Generac Holdings Inc. (GNRC) Q4 2022 Earnings Call Transcript

Generac Holdings Inc. (NYSE:GNRC) Q4 2022 Results Conference Call February 15, 2023 10:00 AM ET

Company Participants

Mike Harris - SVP, Corporate Development and Investor Relations

Aaron Jagdfeld - President and Chief Executive Officer

York Ragen - Chief Financial Officer

Conference Call Participants

Tommy Moll - Stephens

Michael Halloran - Baird

Jeff Hammond - KeyBanc Markets

Mark Strouse - JPMorgan

Brian Drab - William Blair

Jerry Revich - Goldman Sachs

Joseph Osha - Guggenheim

Donovan Schafer - Northland Capital Markets

Maheep Mandloi - Credit Suisse

Kashy Harrison - Piper Sandler

Praneeth Satish - Wells Fargo

George Gianarikas - Canaccord Genuity

Henry Roberts - Truist Securities

Operator

Good day, and thank you for standing by. And welcome to the Fourth Quarter Full Year 2022 Generac Holdings Inc. Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Mr. Mike Harris, Senior VP, Corporate Development and Investor Relations. Please go ahead.

Mike Harris

Good morning. And welcome to our Fourth Quarter and Full Year 2022 earnings call. I'd like to thank everyone for joining us this morning. With me today is Aaron Jagdfeld, President and Chief Executive Officer; and York Ragen, Chief Financial Officer. We will begin our call today by commenting on forward-looking statements. Certain statements made during this presentation as well as other information provided from time-to-time by Generac or its employees may contain forward-looking statements and involve risks and uncertainties that could cause actual results to differ materially from those in these forward-looking statements. Please see our earnings release or SEC filings for a list of words or expressions that identify such statements and the associated risk factors. In addition, we will make reference to certain non-GAAP measures during today's call. Additional information regarding these measures, including reconciliation to comparable US GAAP measures is available in our earnings release and SEC filings. I will now turn the call over to Aaron.

Aaron Jagdfeld

Thanks, Mike. Good morning, everyone, and thank you for joining us today. Our fourth quarter results reflect continued strong momentum in our Commercial and Industrial product categories during the quarter, but softer residential product sales, resulted in consolidated net sales at the low end of our previous guidance range. Specifically, higher home standby field inventory levels continue to impact orders and shipments in the fourth quarter and clean energy product shipments were lower as we work to further improve the reliability of these products and expand our distribution capabilities. Year-over-year, overall net sales decreased 2% to $1.05 billion and core sales declined 7% during the quarter. Residential product sales decreased 19% from the prior year due to the previously mentioned home standby and clean energy products headwinds. C&I product sales increased 27% on a year-over-year basis with robust core sales growth across all channels domestically and all regions internationally.