Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Generac Holdings Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income	556,569)	347,218)	252,308)	241,220)	161,135)
Depreciation	42,155)	36,493)	32,265)	25,296)	23,127)
Amortization of intangible assets	49,886)	32,280)	28,644)	22,112)	28,861)
Amortization of original issue discount and deferred financing costs	2,589)	2,598)	4,712)	4,749)	3,516)
Loss on extinguishment of debt	831)	—)	926)	1,332)	—)
Loss on pension settlement	—)	—)	10,920)	—)	—)
Deferred income taxes	(2,096)	21,195)	18,733)	23,600)	21,439)
Share-based compensation expense	23,954)	20,882)	16,694)	14,563)	10,205)
Gain on disposal of assets	(4,393)	—)	—)	—)	—)
Other	206)	7,145)	1,086)	2,474)	410)
Accounts receivable	(131,861)	(55,976)	8,231)	(43,243)	(29,771)
Inventories	(470,991)	(77,983)	26,369)	(152,594)	(16,278)
Other assets	(819)	12,859)	(358)	(6,362)	(14,783)
Accounts payable	297,323)	66,040)	(69,404)	86,359)	42,788)
Accrued wages and employee benefits	5,814)	20,157)	(3,724)	12,626)	6,105)
Other accrued liabilities	73,798)	60,593)	(16,252)	16,972)	27,514)
Excess tax benefits from equity awards	(31,809)	(6,968)	(2,263)	(1,877)	(3,152)
Net changes in operating assets and liabilities, net of acquisitions	(258,545)	18,722)	(57,401)	(88,119)	12,423)
Adjustments to reconcile net income to net cash provided by operating activities	(145,413)	139,315)	56,579)	6,007)	99,981)
Net cash provided by operating activities	411,156)	486,533)	308,887)	247,227)	261,116)
Proceeds from sale of property and equipment	259)	179)	95)	214)	82)
Proceeds from sale of investment	4,968)	—)	—)	—)	—)
Proceeds from beneficial interest in securitization transactions	4,609)	2,651)	2,630)	3,933)	—)
Contribution to equity method investment	(3,660)	—)	—)	—)	—)
Expenditures for property and equipment	(109,992)	(62,128)	(60,802)	(47,601)	(33,261)
Acquisition of businesses, net of cash acquired	(713,471)	(64,797)	(112,001)	(65,440)	1,257)
Net cash used in investing activities	(817,287)	(124,095)	(170,078)	(108,894)	(31,922)
Proceeds from short-term borrowings	272,818)	257,593)	73,340)	53,965)	101,991)
Proceeds from long-term borrowings	150,088)	277)	1,660)	51,425)	3,069)
Repayments of short-term borrowings	(239,113)	(277,719)	(59,518)	(27,880)	(114,874)
Repayments of long-term borrowings and finance lease obligations	(108,556)	(4,758)	(53,049)	(101,827)	(117,475)
Stock repurchases	(125,992)	—)	—)	(25,656)	(30,012)
Payment of contingent acquisition consideration	(3,750)	(4,000)	(5,550)	—)	—)
Payment of debt issuance costs	(1,185)	—)	(1,473)	(1,702)	(3,901)
Purchase of additional ownership interest	(27,164)	—)	—)	—)	—)
Cash dividends paid to noncontrolling interest of subsidiary	—)	—)	(285)	(314)	—)
Taxes paid related to equity awards	(58,903)	(14,910)	(6,438)	(5,659)	(5,892)
Proceeds from the exercise of stock options	38,787)	13,089)	9,395)	5,614)	6,951)
Net cash used in financing activities	(102,970)	(30,428)	(41,918)	(52,034)	(160,143)
Effect of exchange rate changes on cash and cash equivalents	1,312)	235)	1,510)	(289)	2,149)
Net increase (decrease) in cash and cash equivalents	(507,789)	332,245)	98,401)	86,010)	71,200)
Cash and cash equivalents at beginning of period	655,128)	322,883)	224,482)	138,472)	67,272)
Cash and cash equivalents at end of period	147,339)	655,128)	322,883)	224,482)	138,472)

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 data exhibits significant growth in net income over the five-year period, rising steadily from $161.1 million in 2017 to $556.6 million in 2021. This upward trajectory signifies robust profitability improvements year over year.

Depreciation and amortization expenses have generally increased during the same period. Depreciation rose from $23.1 million to $42.2 million, while amortization of intangible assets saw more fluctuation but ended markedly higher at $49.9 million in 2021 compared to $28.9 million in 2017. These rising costs may reflect increased investment in property, equipment, and intangible assets that are being depreciated or amortized.

Operating cash flows peaked notably in 2020 at approximately $486.5 million before declining to $411.2 million in 2021. Despite the decline, operating cash flow remains elevated compared to earlier years, supporting overall liquidity and operational strength.

Investing activities show heavy fluctuations, with large cash outflows driven primarily by acquisitions, which increased dramatically in 2021 to $713.5 million, indicating an aggressive expansion strategy. Expenditures for property and equipment also increased significantly in 2021, nearly doubling compared to 2020, reflecting ongoing capital investment.

Financing activities saw negative net cash movements in all years, with a notable increase in the net outflow in 2021. This outflow corresponds with higher repayments of both short-term and long-term borrowings and substantial stock repurchases, which resumed in 2021 at $126.0 million after ceasing for two years. These financing activities suggest active capital management and debt reduction efforts.

The changes in working capital components present variable patterns. Accounts receivable and inventories experienced significant fluctuations, with notably negative adjustments in 2021, implying increased investment in these assets or possible collection challenges. Accounts payable and other accrued liabilities also showed wide swings, especially a large increase in accounts payable in 2021, which may indicate extended payment terms or increased supplier financing.

Cash and cash equivalents increased substantially from 2017 through 2020, peaking at $655.1 million at the end of 2020 before declining sharply in 2021 to $147.3 million. This notable reduction relates to the substantial investing and financing cash outflows noted above.

Share-based compensation expenses increased steadily, roughly doubling over the period, which may point to increased equity-based incentive programs for employees and management. Other non-cash adjustments such as loss on extinguishment of debt and deferred income taxes fluctuated, occasionally impacting reported financial results but without a consistent directional trend.

Overall, the data reveals a company experiencing strong income growth and increasing investment activity supported by operational cash flow, balanced against aggressive acquisition spending and capital investments. The elevated financing outflows and reduction in cash reserves in the final year highlight a potential shift in capital structure management and liquidity deployment strategies.

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Generac Holdings Inc. (NYSE:GNRC)

Cash Flow Statement