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Generac Holdings Inc. (NYSE:GNRC)

This company has been moved to the archive! The financial data has not been updated since August 8, 2022.

Common-Size Income Statement

Generac Holdings Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net sales 100.00 100.00 100.00 100.00 100.00
Costs of goods sold -63.61 -61.47 -63.81 -64.17 -65.19
Gross profit 36.39% 38.53% 36.19% 35.83% 34.81%
Selling and service -8.54 -9.91 -9.88 -9.48 -10.27
Research and development -2.79 -3.23 -3.10 -2.47 -2.57
General and administrative -3.86 -4.76 -4.95 -5.13 -5.23
Acquisition related costs -0.57 -0.06 -0.08 0.00 0.00
Amortization of intangibles -1.33 -1.30 -1.30 -1.09 -1.73
Operating expenses -17.10% -19.26% -19.31% -18.18% -19.79%
Income from operations 19.30% 19.28% 16.88% 17.65% 15.01%
Interest expense -0.88 -1.33 -1.88 -2.02 -2.55
Investment income 0.04 0.09 0.13 0.09 0.02
Loss on extinguishment of debt -0.02 0.00 -0.04 -0.07 0.00
Loss on pension settlement 0.00 0.00 -0.50 0.00 0.00
Other, net 0.07 -0.08 -0.09 -0.28 -0.24
Other expense, net -0.79% -1.32% -2.38% -2.28% -2.77%
Income before provision for income taxes 18.50% 17.95% 14.50% 15.37% 12.24%
Provision for income taxes -3.61 -3.98 -3.05 -3.45 -2.60
Net income 14.89% 13.97% 11.45% 11.92% 9.63%
Net (income) loss attributable to noncontrolling interests -0.16 0.14 -0.01 -0.15 -0.10
Net income attributable to Generac Holdings Inc. 14.73% 14.11% 11.43% 11.77% 9.53%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance of Generac Holdings Inc. from 2017 to 2021 is characterized by a steady expansion of profitability margins and improved operational efficiency. Net income attributable to the company grew from 9.53% of net sales in 2017 to 14.73% in 2021, reflecting a consistent ability to convert a higher percentage of revenue into profit over the five-year period.

Gross Profitability and Cost Management
Gross profit margins exhibited a general upward trend, rising from 34.81% in 2017 to a peak of 38.53% in 2020, before settling at 36.39% in 2021. This improvement was primarily driven by a reduction in the cost of goods sold, which decreased from 65.19% of net sales in 2017 to 63.61% in 2021, suggesting enhanced production efficiency or more favorable pricing strategies.
Operating Expense Trends
Operating expenses as a percentage of net sales decreased from 19.79% in 2017 to 17.10% in 2021. Significant reductions are observed in general and administrative expenses, which dropped from 5.23% to 3.86%, and selling and service expenses, which declined from 10.27% to 8.54% over the period. Research and development spending remained relatively stable, fluctuating between 2.47% and 3.23%, indicating a consistent commitment to innovation relative to revenue growth.
Operating Income and Efficiency
Income from operations demonstrated a positive trajectory, increasing from 15.01% in 2017 to 19.30% in 2021. The synchronization of expanding gross margins and contracting operating expenses resulted in a stronger operational core, with the most notable margin expansion occurring between 2017 and 2018, and again in 2020.
Financial Costs and Other Income
Interest expense showed a marked and consistent decline, falling from 2.55% of net sales in 2017 to 0.88% in 2021. This downward trend suggests a reduction in the relative debt burden or a significant increase in sales volume relative to interest obligations. Other expenses, net, also decreased from 2.77% in 2017 to 0.79% in 2021, contributing further to the improvement in pre-tax margins.
Net Profitability and Tax Impact
Income before provision for income taxes rose from 12.24% in 2017 to 18.50% in 2021. While the provision for income taxes fluctuated, ranging from 2.60% to 3.98%, the overall effect was a substantial increase in the final net income margin. The net income attributable to Generac Holdings Inc. consistently improved, ending the period at its highest level of 14.73%.

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