Generac Holdings Inc. (GNRC) has reported a 25.80 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $12.84 million, or $0.21 a share in the quarter, compared with $10.21 million, or $0.15 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $25.79 million, or $0.41 a share compared with $30.89 million or $0.46 a share, a year ago.
Revenue during the quarter grew 15.80 percent to $331.81 million from $286.54 million in the previous year period. Gross margin for the quarter contracted 93 basis points over the previous year period to 33.30 percent. Total expenses were 90.40 percent of quarterly revenues, down from 90.59 percent for the same period last year. This has led to an improvement of 19 basis points in operating margin to 9.60 percent.
Operating income for the quarter was $31.84 million, compared with $26.96 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $46.70 million compared with $49.12 million in the prior year period. At the same time, adjusted EBITDA margin contracted 307 basis points in the quarter to 14.07 percent from 17.14 percent in the last year period.
"First quarter shipments were ahead of our expectations, with improved sales of commercial and industrial products leading the way during the quarter," said Aaron Jagdfeld, president and chief executive officer. "In particular, demand trends for domestic mobile products were much stronger as compared to the prior-year levels as our rental equipment customers began to replace and upgrade their fleets during the quarter. Our international segment also experienced solid organic sales growth as the year started off on a positive note within our European and Latin American markets. As expected, shipments of residential products started the year more slowly than last year with the backdrop of higher field inventory levels for both home standby and portable generators, which led to softer demand from our channel partners in the quarter. Importantly, higher power outage activity late in the first quarter, as well as the timing of certain end-user promotions, is helping to improve the pace of installations of home standby generators thus far in the second quarter."
For the financial year 2017, Generac Holdings Inc. projects revenue to grow in the range of 5 percent to 7 percent.
Operating cash flow turns negative
Generac Holdings Inc. has spent $4.55 million cash to meet operating activities during the quarter as against cash inflow of $22.15 million in the last year period.
The company has spent $1.90 million cash to meet investing activities during the quarter as against cash outgo of $68.37 million in the last year period. It has incurred net capital expenditure of $3.51 million on net basis during the quarter, down 50.42 percent or $3.57 million from year ago period.
The company has spent $4.76 million cash to carry out financing activities during the quarter as against cash outgo of $1.11 million in the last year period.
Cash and cash equivalents stood at $57.49 million as on Mar. 31, 2017, down 17.12 percent or $11.88 million from $69.37 million on Mar. 31, 2016.
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