Generac sees FY19 net sales growth of 3%-7%, consensus $2.04B
The company is initiating guidance for 2019 with net sales expected to increase between 3%-7% as compared to the prior year on an as-reported basis, and 2%-6% on a core basis. Based on the strength of current end market conditions, we expect net sales in the first half of the year will grow approximately 10%-12% on an as-reported basis, and 8%-10% on a core basis. Net sales growth in the second half of 2019 could range from low single-digit declines to low single-digit increases, depending on the severity of power outages during the year. Net income margins, before deducting for non-controlling interests, are expected to be between 11%-12% for the full-year 2019, with adjusted EBITDA margins, also before deducting for non-controlling interests, expected to be between 20%-21% for the year. Should there be a more active outage environment during 2019, we would expect margins to come in at the high end of the range. Operating and free cash flow generation is expected to be strong, with the conversion of adjusted net income to free cash flow expected to be over 90%.