Generac reaffirms FY23 sale view down (6%)-(10%) vs. last year

The company said, "Due to ongoing strength in leading indicators of demand for home standby generators and significant backlog for C&I products, the Company is maintaining its FY23 net sales guidance. Consistent with the prior outlook, shipments of residential products are still expected to remain soft during the second quarter as home standby field inventory levels continue to normalize, with a return to year-over-year sales growth in the second half of the year partially offsetting the expected first half decline. In addition, our outlook for C&I product sales to grow at a mid to high-single digit rate during the year remains unchanged. Accordingly, the Company continues to expect full-year net sales to decline between (6%)-(10%) as compared to the prior year, which includes approximately 1 to 2% of net favorable impact from acquisitions and foreign currency. Additionally, the Company continues to expect net income margin, before deducting for non-controlling interests, to be approximately 7.5%-8.5% for the FY23. The corresponding adjusted EBITDA margin is still expected to be approximately 17.0%-18.0% and disproportionately weighted towards the second half of the year. Operating and free cash flow generation is expected to return to strong levels for the full year, with conversion of adjusted net income to free cash flow expected to be well over 100%.