GNRC - Earnings call transcript Q1 2022

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Operator

Good day, and thank you for standing by. Welcome to the First Quarter 2022 Generac Holdings Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Instructions]. [Operator

Please my today, the Corporate Mike Investor Thank is your over Development to Relations. speaker first Harris, you. pleasure it conference hand to and Now ahead. go Vice President,

Michael Harris

like today Officer. welcome and and York Executive us quarter call. for our Good Jagdfeld, to With President morning, everyone me to thank morning. Officer; Financial Aaron XXXX Ragen, first earnings Chief I'd is this Chief joining and

filings during employees forward-looking will presentation begin time cause today statements. of words for in that call information Certain results from and such materially involve differ or these this expressions We forward-looking made provided actual by that Please commenting other and statements. from and by factors. statements on earnings and Generac forward-looking our may risk our identify the time associated those SEC statements a could see statements uncertainties risks to list to or or release contain its

certain today's will make In measures call. non-GAAP reference addition, we to during

Additional filings. information in and Aaron. to release comparable our turn earnings these is SEC reconciliation GAAP measures, U.S. will call over available now the to measures, I regarding including

Aaron Jagdfeld

us revenue revenues management shipments storage drove supply higher of which driven by in Good was quarter of challenging effective energy and experienced products you today. thank Thanks, generators, another sequentially an were for continued also of our outperformance quarter everyone, all providing from prior XXXX, to progress ahead. in sales the standby products the PWRcell costs EPS as despite adjusted the the previous dollars, our significant in the during C&I with for us The all-time and EBITDA primarily with quarters systems also globally. also Demand quarter. our considerable joining resulting net the overall morning, visibility Mike. in remaining XXXX, record. net expectations. a XX% ahead Year-over-year, and capacity which quarter, the previous input backlog and our on grew and fourth environment. sales, overall plans resulting from home EBITDA all-time exceeded end billion lower-than-expected record shipments increase first standby for We adjusted backlog This home increased $X.XX of our ahead margins in the in was adjusted expectations chain of and expansion were The led elevated to of higher-than-expected expectations,

C&I sales product due those margins EBITDA The driven We pricing of incredibly was segments, mobile overall growth cost the of Overall, as cost to domestically, telecom and excludes the sales, recent the impact C&I continue increase and foreign contribution mix lower growth acquisitions. currency, internationally residential the to in as-reported regions channels XX% favorable impact strong home year-over-year, robust Strong each at by year sales category. again impact momentum implemented and environment. impact by the acquisitions. PWRcell XX.X% over classes systems the the and all chain year, initiatives. from by storage energy led were past multiple business of on growth driven which core our rates challenges all the reduction headwinds led of inflationary across growing impact residential acquisitions costs, residential double-digit as as with in in product increasing supply standby reporting Adjusted product year, was and basis. in recent an International experience primarily and the and sales generators our from prior prior of where early higher actions growth substantial ongoing the compared well a over broad-based both increase input our with the by offsetting across and Domestic of the continued of quarter shipments Partially to and

well incremental impacts headwinds, of as further we XXXX as realization which execution and progresses the price input expect reduction the margin growing in second during projects easing announced margins on from favorable previously cost resulting were sequentially additional cost quarter, enacted increases improving as the year. Importantly, pricing actions, throughout

consumer discussing home continues results with And at outage to in at convergence the first to end of average. the hurricane above-average more another Power category. rolling a the first of for exceptionally first as from approximately strong benefit awareness upcoming Now rate measured quarter of year on the an season our the line activity multiple generators that basis four detail. year significantly quarter early activity. megatrends the the and over have in baseline of forecast Shipments quarter long-term standby pointing grew increased was for in the quarter are prior

of with As line event home storm the winter several for with the consultations challenging comparison discussed to a the and quarter. prior year last outages were but previously, quarter our year, due faced high-profile Texas in in other in the states expectations first significant

We South For were standby XXXX, first some the X,XXX in the at solid the standby ongoing for the well backlog -- of generators with to are further in declining continued XXXX. reinforcing ended end rates over over the to weeks rates proxy a an has South build regions. an once for held XX rates a dealers above levels build XX quarter levels and weeks category home $X grow months. sequentially again and times, during Central than home a year for which lead perspective, build baseline Trenton, approximately prior installs, improvements Wisconsin of important level. Activations, of the past residential increased from levels more continue ramp quarter times, and standby We aggressively to rate remains XX quarter Xx levels view Carolina our than at Despite Midwest daily higher our new year, an as higher to first XXX been prior seen over the by the new improvement facilities home have compared approximately progress and are the achieved better-than-expected at our Higher output consultations demand production which the and dealers, lead led at made increasing facility. nearly home the in billion. that driving increase

increase a In increases in to the additional half the standby to second higher and category inflationary of year, backlog the to additional rates pricing XXXX. While expect during meaningful even we're we projected build the event without this outage realize we throughout to also response XXXX still actions further pressures, of of into second the are our carry in these the a quarter, home benefit primarily benefit portion forecast. major of in expect taking

now see and reflect a orders higher increase X. backlog New effective in this orders pricing will price also June

initiatives significant taken, to In the several addition further are margins the for forward. expected pricing and costs actions input moderating moving to product benefit we've cost-reduction category

X,XXX In the growth input the to sales first team than to is and term, our implemented have energy In price in trained clean energy PowerPlay increases which market continued clean network quarter continued in drivers of has bringing quarter near with Supporting uncertainty ended believe as installer overall compelling rapid receive growth policy-related rising dealers our certified systems the to products optimistic energy spite secular X,XXX demand new meaningfully significant logistic innovative product as and and platform. successfully response logistics this prior the products. ever. for our supply we growth very XXXX, shipments partners. clean our we chain navigated the contributed solutions offering on about the approximately new is our we're in grew our registered megatrends offerings underpinning storage first build-out remain for prelaunch We and the product expedited costs, of more from PV additional as channel PWRmicro, with interest of we as microinverter called PWRcell from also period industry-wide our consumer challenge. significantly including residential recently and energy the as Our to year

market. In our to in has device strengthen market. PowerManager control expect launched residential this energy storage And the within we addition, innovative recently position industry-leading positive garnered our product the further load feedback

revenue product well now provide term, initial with update partners. seeing We're opportunities exciting developing quarter. Longer leverage category, from ecobee's good and In quick ecobee. expecting above smart in Generac's wholesale residential new products. the and ecobee with for in resonates progress We with dealers with the systems, coming here in as to base of have clean pursuing energy contributions well new the a continued and opportunities Generac I'd full-year energy cross-selling still we clean brand thermostat working as we're dealer to sell retail second consumers, are along XX% introductions product with on solutions strength existing rollout to growth PWRcell well storage like energy for products. hardware the the ecobee's HVAC

seeing program of utilities Additionally, ecobee's interest grid a but country, including recently growing a that product thermostats example large Colorado. improved growth dedicated and a Generac provider during a promising a The and this and grid installed million has base This ecobee's periods of And with having projects. demand for of Generac in ecobee teams increasing Grid significant more benefits between homes. in team several utilities the seen services number on be financial leveraging offerings. Grid response We're local allows can energy is sales conservation, replicated rapidly with ecobee bidding Services with Services operators, and expanding demand, jointly also are important commercial ecobee's stability. homeowners the smart high across which utility by in simple energy X developments a program of in wins than collaboration connected and adjustment an ecobee of for announced market resulting offers potential

expanding by the its sales increase Software-as-a-Service and plus Grid such signed proposition. Generac under And during a along for services is The connected other number value programs. Services on is for in important more opportunities has Services. diverse experienced economics the software we software-as-a-service, as hardware that the payback with a Generac and to Grid key impressive improve demand executing our our closed Services value hardware assets share Expanding driven unique strong the also management. also a has beyond well strategic quarter improving includes of of as in the on Grid team as vision Grid contracts. cross-selling turnkey plus participation potential bit Services Generac metrics growth equipment, ability performance to and of pipeline an contracts, stack increasingly program ecobee which and and of homeowners, Our

and addition, have with of home orders, for a PWRcell the in XXXX. including negotiation, significant ramp proportion business generators systems, along our sight of stages improved hardware storage of line final during this energy a In contracts in standby growing other

Generac making for integrating Importantly, utilities platform onto Generac the complete grid create great the Concerto solutions products Grid team software progress operators. and Services is to

value of work to the opportunities digitization societal decarbonization and We and are economic these as the excited decentralization, the about power the of facilitate the we grid.

Now strength let C&I first on geographies. the rapidly with comments markets end also me products, multiple across make which and our some grew in quarter

C&I C&I demand sales for first core for net in emergency by increased global the as-reported gas on Specifically, basis quarter traditional equipment applications in prior and generators our and growth year. net projects. was national sales a customers XX% beyond Strong to as used compared on XX% as rental led well basis growing an the in telecom standby natural domestic products as

critical rates have solid the first this of continue the first first helped power backlog significantly outage in the be the from levels supporting this communications for connected in high-powered devices quarter, to several capital power also customers. and alongside larger customers to last the again C&I continues compared expectations increased year, the and elevated of grew to security of drive catalyst growing national years, California infrastructure. C&I during vertical increased through the benefiting over investment XG for close products, the Shipments a We backup telecom stationary for mandate in by growth Shipments category. and increasingly in prior quarter in several wireless improving the important power the the during number of elevated by our and The as channel our channel. generators further substantial orders in spending of distributor telecom North environment which in backlog to driven build-out our American growth quarter,

market growth improvements remain the in storage Grid mobile about for U.K. And fleet these meaningful passed strong We're independent also domestic and need very outlook this the customers American we demand to channel partners added These mobile we already for about infrastructure of recently products. in long-term activity in experienced very seen national to the bring North customers XXXX. key the megatrend spending. are legislation the excited opportunity our through solutions, given heavily also rental our energy acquisition infrastructure which quarter. investing have critical Energy for optimistic products the equipment. And We the supporting with recently Off and we from order

near in XX% the Energy from segment solutions meaningfully demand is showing as unfavorable segment XX% Strong on of growth Additionally, strong tangible that the core strength generators driven quarter for owners. and net sales these standby generation notably during we're foreign operators with and across very this of for of of national of being a is heightened offer for also core range in asset when region currency. with regions, International excluding situation. due and experiencing Energy municipalities use year-over-year further remain security and A the first in generation fourth basis solutions. enhanced used momentum demand shipments our Europe significant the with In to the call. growth the in applications our the project increasing beyond well demand generators, blocks impact while our on since power portable backlog America. most mobile gas in given increasing and fluid invasion International and by emerged their Deep accounts all benefit and strong driven Russian Latin need momentum natural seeing such Off to return nature was Overall our and part Sea providing stability a customers a We in across quarter, of very these European as-reported grid products distributed traditional earnings in power continued the other by as beyond implications Grid remains wins conflict C&I and region. energy term, acquisitions commercial Ukraine. focus grid troubling The resiliency sales of independence generators particularly the larger the are Service, The and longer-term But simultaneously projects. has microgrid in interest uncertain regional believe as investment for the for substantial an and on improved the diverse

to strong Electronics developing our global geographies technology these the systems storage impressive Energy's international footprint, acquisitions, in through and energy Sea reported Deep products. Off incremental mobile demand Numerous driving growth, synergies In for are results for core significant Generac's resulting first distribution recent addition and Grid sales Energy, new quarter. Grid backlog Off in in

We to product Sea's storage have at also within products intake begun of capacity controls projects respect C&I legacy are Deep With power for automation synergies, demand development controls previous we Global embedding additional And technology further order has range product mobile at the category significantly expand Deep and Sea and globally. expectations. lineup. the our all-time are our into products surpassed highs. to the

grid-connected are portfolio Additionally, solutions. growth Service of core Deep our as important Sea provides that a microgrid and capabilities to of Energy the

headwinds supply profitability has and also much chain Our despite inflationary stronger segment International experienced challenges.

inflationary this today, closing that EBITDA expanded for overall to of forecast and previous XX.X% I'm short, -- But In detail record extremely be which in team's volumes. reflects record for operating portion raising measures profiles expectations. overhead outlook ongoing the backlog accretive we're the the due Deep our maintaining Off in Supply efforts execute. and believe our during full-year in XXXX overall the sales from X.X% environment difficult deliver our chain our margins operating results increased better acquisitions, EBITDA our Grid results on prepared proud we adjusted and Sea but significantly our discussing to in delivering these ability and guidance dollars, taken have to our Generac We'll persisted, margin navigating the offset guidance update overall prior exceeded net net confidence also adjusted challenges the improved year XXXX quarter sales in of we've period absorption to sales the comments and from First provided appropriate environment in of visibility headwinds. leverage higher morning. to

their While the megatrends with our Powering pillars on business longer-term World near-term enterprise focused strategy. alignment and of for we strategic we remain the our are executing a initiatives, tactically on Smarter our

over our we both building expand portfolio to provide for challenges business an faced is to years technology the are serious ahead. ecosystem execute opportunities on for addressable as plan, to grid energy modernization significantly markets ultimately squarely the aging results power address solutions quarter the We and and turn to now our confident and strategic York? the we're and expected solutions on the our first outlook out on remain markets residential out and our supply details the call and As the connected electrical C&I the of by demand that the lead imbalances of further grid want XXXX. to developing. in I to building updated for XXXX our further growth York focused

York Ragen

Thanks, Aaron.

the Looking for prior in approximately detail. as another the winter at XX% services quarter. approximately was service quarter. rate base quarter to this of clean inflationary was contributions the acquisitions first first compared in storage from these severe $XXX results a storm from contributing to and several regions, higher on caused acquisitions $XX in products. core the Partially to prior and volumes. as market including business billion and XXXX XX% Net the the XX% due an for net currency from and year of approximate the growth activity portable overall margin production U.S. Gross driver during to the higher up revenue. we grow states currency foreign quarter Contributions sales parts million growth the foreign net prior offsetting the very quarter increased XX% for X% the record as the install $X.XX by impact Net of the sales also we our year grew be combination compared expand leading to of Texas to during the XXXX, consolidated in residential million currency in growth Shipments first heightened to in to of and our of to compared all-time the growth and and impact industrial standby Sea impact product also years year had from plus and of sales quarter. PWRcell Off net core the more at expand robust energy of challenging grew the the unfavorable solar products quarter impacting increased and The broad-based, of subscription over the field, XXXX, to to first and impact of sales to event. a Contributions as looking a first the revenue growth energy to Also the outages costs systems were plus input from and parts in as compared continued product currency Commercial growth to network significant $XXX first compared revenue strength, Grid acquisitions foreign quarter. Briefly highlighted acquisitions drove to Residential storm offering $XXX faced XX% of unfavorable impact larger a impact X% outage and prior other net the certain capacity prior million increase significant in quarter. year residential year million the at compared increased as sales ecobee despite X% Strength comparable. contributed rental strong prior by this growing revenue supply by recent class. from XX.X% the the strong of majority $XX higher quarter prior XXXX. million the first distribution extended year, solutions. increasing increase for our $XXX and high-profile category tough the to million the product year during XX.X% as contributed first a representing quarter in sales approximately our aftermarket sales storage sales Services winter services the continue Contributions continues a as XX% of Deep product the the during growth comparison our a in due generators made for revenue The driven key XXXX all quarter. as in in is which Grid by growth, for generator products to quarter on of core Home across Chilicon revenue. sales positive category the of telecom of $XXX growth had million warranty in the profit environment year and the quarter. chain power approximately during continues levels foreign of prior

increased ramp-up $XX impact with these elevated Specifically, increase first labor prices other by quarter mix sales partially pressured margins the expenses amortization favorable primarily Operating costs, the This implemented acquisitions increase inbound recent surcharges, the expense. headwinds. expenses or together from of XXXX. margin of multiple operating and price intangible year lagging XX% component driven actions compared in as of increasing the to impact million recurring was offset and all current realization and logistics higher rates of expediting increased costs plant The commodity the and quarter. continued in previously

net in noncontrolling the $XXX given or relative to to In higher year. improved deducting approximately noncontrolling for volumes. operating I expansion that to compared as for leverage primarily was sales or sales the absorption compared approximately sales Adjusted now increase the of as the gross net The the our deducting prior increase. Grid discuss prior before in the as overhead EBITDA the Adjusted to year. Energy in nature. contributing segment Domestic compared the in EBITDA was significantly to margin margin partially their by impact sales in XX.X% previously year, margins. due in International to net XX.X% impact addition, with by million load expenses the quarter our million offset Operating will million results the release EBITDA realization of input of was sales pricing sales, acquisitions to $X.X also representing operating quarter. or have $XXX driven defined or quarter excluding in mix. sales due period sales million sales the significant start-up the XX.X% the XX.X% EBITDA $XXX increased million, and contributions of as EBITDA, as acquisitions sales for interest million as in percentage the lower increasing Deep acquisitions XX% Adjusted recent was of XX.X% the employee year. two expense and prior currency, $XXX financial quarter first higher revenue The impact in the segments. million interest prior sales. implemented for quarter. the XX net acquisitions, increased discussed $XXX X% increased or strong in XX% a was of year margin earnings to as in in compared sales million before and year actions margin XX% the excludes the to impact briefly The the a to previously decline $XXX compared from of in basis which $XXX higher points the variable to $XX in million prior year of quarter margins of $XXX increased the costs acquisitions, of and volumes for segment on as contributed and favorable Core EBITDA the a to segment due amortization, compared and growth International compared intangible additional net X.X% significant of of prior million the revenue, reporting Domestic and Sea significantly prior approximately for Off segment was higher the expenses costs to primarily to decline from

first for of back XXXX switching our to basis. Now financial quarter the consolidated on a performance

quarter compared million our to the income for were adjusted million or full-year seasonally income as $XXX year. guidance equity tax the for $XXX the $X.XX for first the effective in prior from rate the XX.X% net related in primarily net primarily on to first benefit effective million rate company or the first $X.XX share. lower million and in the tax was is of tax disclosed of to income per As prior net the current year income The $XXX XXXX of compared Diluted quarter quarter GAAP a income quarter current equity compares the earnings first in benefit as GAAP due prior taxes $X.XX was year as rate to share. quarter compared per in to to the our XXXX. release, release quarter year-over-year vesting increase million due This was our in Adjusted purposes. in an GAAP awards year. the quarter of or for compensation tax year rate XX.X% in compared of share the The below million certain of during company to tax for recognized $XX.X of the prior in in effective an defined per $XX.X the $X.XX earnings discrete as was the or effective year net year. timing company a XXXX $XXX in current the basis

primarily As negative $XX million release in disclosed positive transaction the current logistics product was positive first the LBO was to for year due by and the compared adjust $XX net our build our much flow inventory categories, $XXX current due schedules The our to due taxes last to year no in inventory cash environment originated supply $XXX that free quarter. in flow negative Cash million in tax as extended certain as XXXX. compared transit driven And earnings rates a was in chain higher capital challenging quarter working quarter. for our in capital longer year. operations working decline investment prior from to was in as year flow million earnings cash our in free and higher for times. EPS cash adjusted release, a investment defined in the The of production seasonal our expiration the from in significant increasing reconciliation further levels shield same the increases and income primarily to million

at X.Xx first As the had outstanding the hand leverage of ratio only of of of billion, of $X.XX cash of March XXXX. quarter which on XX, the $XXX in May was in quarter a Also, million resulting total $XXX an on of million XXXX, approximately matures at gross of facility, our availability debt and on comprised the end million basis. we ABL revolving liquidity, credit $XXX debt as-reported end

addition, In loan plus We until until any of LIBOR low term XXX payments and cost it maturity doesn't December have recall a points. required the basis date, facility mature XXXX. not principal this on do has our

We debt also interest December that million XXXX. exposure rate XXXX. approximately of rate updated our now comments fix this on swap of $XXX through I maturity will With further on our interest for that, arrangements have the provide date outlook

expectations As chain first us Aaron quarter maneuver shipment to of ability this strong the allowed supply challenging through exceed and during previously discussed, our to environment XXXX. execution

second round XXXX. couple higher-than-expected the required manifested of implement that months over to quarter another here has In inflationary has price increases environment addition, in the of the us last of

net increase the on as-reported X% these of an line compared currency. This between X% as approximate XX% raising our is the net rate. an revenue XXXX impact as during prior increase to and expected now guidance XX%. to sales to result includes from revenue are to for which compared expected previous for products factors, low acquisitions a foreign a to prior basis, a up XX% full-year As expectation are XX% between guidance of high we from an top to rate at prior still year now XXXX, growth for grow XX% sales headwinds. assumes This shipments residential a is despite to from increased C&I rate net high-teens products And at mid- larger-than-expected FX year outlook of XX% to the

of longer-term line still the during power Importantly, baseline a average. this outage guidance activity the assumes with year in level

historical event this the outage power our As a outlook result, consistent not of the assume with major during benefit approach, year. a does

the likely meaning standby power generator of upside from major incremental for power standby be capacity throughout shipments XXXX, most incremental Given a expect in portable be for we are outage year, major extra generators still would XXXX. generators any at lift would during to limited outage in result producing home to more revenue the full home a

clean remainder supply home of and sales XX% over sequentially and first incremental quarters, in of half we're As realization the in energy next increase as standby chain our kicks we over the the year, and weighted revenue percent with for to quarterly ramp approaching price net products as a sales. couple expecting the full-year capacity of

at margin profile. Looking our gross

length, cost to our thus at continued As we have impact in XXXX. profitability pressures discussed far have

certain peak We expect margins, pressures the quarter meaningful XXXX gross further the first more focused on impact as year-over-year progressively initiatives positive as and of year for this to of remainder realization inflationary be of cost-reduction benefits price/cost our price the materialize. a has the headwind ease our

first to As XXXX quarter a XX% sequentially gross full-year levels. gross expect percent the approximately increase with for result in is factors, quarterly XXXX line of recover to gross XXXX, to be to fourth This quarter XXXX back we margin expected the in percent would in margin levels range. these result margin throughout with

at Looking expenses sales. of operating as percent a

range full-year inflationary XX%. primarily XX.X% the are of the expected approximately compared percent full-year deducting EBITDA interests amortization EBITDA The for compared points required noncontrolling increase in previous basis from expected dilution expense previously XX% to to Excluding to for to this load resulting price to have now Adjusted expect pressures approximately XXX -- modest XXXX to percent XX.X% we higher-than-expected before expectation. are relative full-year increases offset margins acquisitions approximately be given additional XXXX, higher start-up the nature. impact sales to of the XXXX their that a to recent expense, due to operating to XXXX OpEx

of midpoint primarily a seasonality as in Importantly, as are range the projected to margins in guidance adjusted perspective, line the by this EBITDA adjusted would result we previously move with improve year, margins through significantly gross From discussed. driven improving guidance. our previous dollars EBITDA

XXXX. to by free marked share point quarter also for with improvement EBITDA adjusted quarter items and level resulting flow first earnings provide We to progression of the expect adjusted adjusted assist Several in the XXXX to guidance fourth EBITDA similar with XX% XXXX that returning full-year require approximately the the per the a year cash the additional modeling for updating levels. margins low QX we that loaded margins quarter, for sequential range,

guidance rate XXXX XX% a well tax equity full-year taxes lower effective GAAP first remaining resulting to is full-year full-year to primarily approximately expected driven higher-than-expected is in quarters now quarter income XX%. be state the year, to the compensation as XXXX to between expected the of XXXX. in deduction This rate tax for as Our the XX% during the previous of our decrease GAAP of This by XX% effective XX%. compares

our previously to given be million million than no $XX the For full-year million now is million levels of throughout amortization guidance to be million, million. million is intangible expect payments Depreciation expense previously forecast Stock XXXX, expected high assumed to from reflecting to the interest expected loan to the to of expense expected year. expected. previous during higher of end $XX CapEx be principal previously compensation at while expense now $XX in to XXXX XXXX, $XX additional million, between range compared the to $XXX expected the million to rates $XX to expense GAAP in million assuming million $XX $XX LIBOR now we be an $XX approximately year. for million $XX increase XXXX $XX guidance still term of as is approximately $XX to

expected as similar is items of our income performance, our be to result prior of a quarter As guidance a these first updated percent guidance. in net sales to

to XX.X shares. be Our million full-year million approximately is share XX.X expected weighted average to count diluted

to approximately for still be net expenditures projected of year. sales to Our capital X.X% our X% the are forecasted

cash free historical operating the and XXXX, weighted of is expected the generation disproportionately still to half full-year be second and toward follow flow seasonality For year.

Given the in invested portion the capital still flows net working be of free XX% very of to will strong income a to adjusted as during approximately organic XX% XXXX, the flow cash be to full-year to we cash for growth growth. sales conversion expected expect support this

outlook not up could this open the share shareholder does XXXX updated remarks. incremental for questions. we'd This this value. repurchases additional acquisitions call At reflect our like to potential time, that concludes prepared or Finally, drive

Operator

will begin now We [Operator Instructions]. session. question-and-answer the

line from first the of Baird. with Mike Halloran Please ahead. comes question Your go

Michael Halloran

morning everyone. good Hey,

Aaron Jagdfeld

Mike. Good morning,

York Ragen

Good morning.

Michael Halloran

side a pretty little backlog the consultations just we can with with the Obviously, your in-home to came you you're cover comment demand that incremental to comfortable just in channel from backlog? So expectations. ramping much the in a that But on bit in And anything of versus down. seem consultation into that? dig general is bit? customer general a home at How what the standby being book-to-bill in your maybe some or demand in seeing this like little perspective coming of capacity a point, line

Aaron Jagdfeld

on around that Mike, remarks, to about a a that. I I'll think it the we point talked you give I'd and little more Yes. things prepared beyond of couple bit color

backlog HSB come as the So did down projected.

with was demand Our line in expectations. our

So IHCs, said we in the levels. I XXXX our remarks, they QX think Xx were prepared

reoccurring our events guidance elevated that they're this the year. none of our very significantly guidance nor any was So just unique happening circumstances. a -- is And any year, past Texas when major contemplated you of last look event which set contemplate of does

than point. end at to with greater So we're demand year this if the something even obviously project going we does happen,

thought we we the side than did in On of we execute better would execution QX. things,

standby our couple home were and supply We able challenges continue So that to were face. navigate levels to output a of facing better. chain for we're

goes matter then factories We're we've every to factories a ramping factory. continue to of outpace that so lot been output of aggressively in fact here. And Wisconsin continue as And that Carolina, lift a the Trenton, South getting that that obviously, out projections grows just up. week output by, here. Our of our

an line where output go thought at we back in HSB being kind where above on in today. weren't well incredible backlog if the to would planning Day still of kind we for be the So our Investor have we're and demand point. combination of at September, being would really increased Especially of then puts this you remarks with us we

for So the pretty times exciting HSB category.

Michael Halloran

then a or Aaron, the right, last over But question marketplace? pricing amount a on of put that a for prepared I XX that did in was so. repriced you follow-up. sense remarks pricing current the So the as backlog guys in arbitrarily the for you months suggested you hear cumulative have the Maybe

Aaron Jagdfeld

It will Xst. be June on Correct.

Michael Halloran

cumulative And pricing? Okay.

Aaron Jagdfeld

XX I Cumulative XX the high call now of kind would even. maybe months, is what months pricing, we over last to close like teens think

York Ragen

April. Including this in latest round that we monitor here

Aaron Jagdfeld

date. on here round which of in Including the this April, the is latest repricing backlog X effective June

Michael Halloran

your guys. Thanks it. Appreciate time. Got

Aaron Jagdfeld

Mike. Thanks

Operator

ahead. is go Tommy Stephens. line Please question next the Your from with of Moll

Thomas Moll

taking thanks Good morning. for my And questions.

Aaron Jagdfeld

Tommy. Hey

Thomas Moll

do for wanted unit pricing is underlying home financed I with are portion insight Aaron, on versus demand stick theme how any of insight And the have here. What to the outright the purchased standby? homeowner? of what you elastic by into volumes

Aaron Jagdfeld

we've Yes. maybe the No, those great are probably York given finance I piece. that. questions, I'll Tommy. let don't if tackle know

York Ragen

small I piece. mean a it's still relatively

Aaron Jagdfeld

growing. Yes. mean piece. rapidly, the But I it's it's pretty growing been finance

York Ragen

it's Historically, a dramatically. But growing financed it purchase. wasn't

Aaron Jagdfeld

as think category I the Well, expands...

York Ragen

of XX% but volume, the it's if growing. it's Maybe Yes.

Aaron Jagdfeld

quite growing been It's bit. a

have elasticity a is closely. very ton around would of think we watch we pricing, terms you metrics we tell In I of Tommy, what data that and

go is maybe I average. that the on to, is the product for from HSB obviously, high-teens on that number costs project. And pricing itself out cost total inbound of the everything quoted product Recall just the itself. that consultation request proposal the So of the the just half impact

we average was costs. increased, IHCs that at that XXXX. to $X,XXX, megatrends close have to need the it's point you this we're also And speaks proposal So to really maybe in I $XX,XXX able around resiliency costs, are with, kind in over our be and to underlying course. seem inputs So we project And the that project say of pricing. gauge home have $X,XXX, But a an the of in driving That for on then $XX,XXX last $X,XXX $X,XXX we're about -- the category. us kind not look other seeing we enthusiasm pricing. labor look point again, would when round that that of dampening for the talked being look of helps Xx generator. expensive extra begin to product and there project materials up each when I impact prepared right? an backlog. those and demand $XX,XXX to, for to standby rates other To-date, remarks, the at the seeing, It's we're all it for impact think to Today, a at used of you significant doesn't any

pricing increase dramatically And that in up maybe be overall that would the of over environment. and category price. kind mid-teens, XX% just So product

to had it. we Having We've this. and business long as been would say the XXXX from feel years, pricing. good I'd with durability, demand That I've do last incredibly I XXXX, is -- been on around to respect with And durable in the back recession. pretty you the this, around point my to to So over comment this respect impact that category the just and the pricing the as past.

my that, Our investment, overall of depths of But comment. I did comment. think I last was the know said last nuts. category that. arguably And one consumer it most discretionary comment. people up, And you're would speaks to or think be even would ticket the residential I outperform. of last residential of anybody that think said have that One have potential in said, tied I kind up just would kind kind I actually of category. if And durability the a business to we product was large

think product in You also impact lot home A of up. really way of have values value. the price of think because of improvement Yes, project. to that it's as the relation of to the category the home's home are it a

the you significantly percentage the when context value, of all. it's of So in up a not think about it home's as at

the In argue of project fact, that values home than have the I price risen itself. might faster

that. I'll Tommy. at question, the for anyway, So leave thanks But it

Thomas Moll

appreciate I sticking And theme. Aaron, standby on Yes. context. the home the

of demand and about underlying that you achieved of year, held baseline. the level pre-pandemic next a mentioned some into think versus higher factors we you've As the

year, we outage are a we drive some most a get I there's next your see We'll major that to acquisition awareness within if demand customer drive once can largely units assuming is year or there. on of next to thinking the around once lot focus control backlog I'm of through get what that it's mean that to of But your "normal that so ever drive and or spend. you kind do of away higher? underlying environment." demand? What event And things higher any all

Aaron Jagdfeld

lot something Yes. a No, tell we're focused things. of on. question and we a you, constantly great test would that it's I

roll hesitated been of bigger The out has big have kind right now, backlog because to strong. demand We is as as things obviously, is. it

against to adding that, adding kind the with up lead customers we're do we frustrate demand. of So times versus incremental

program a we've tell So of would this, testing. -- been we're here's I what an you example

We years. have of accumulated hundreds hundreds and unclosed hundreds last several the over thousands and of leads

grown, reengage phone those just the them we nationally, or in the hurricane maybe Just regions, awareness a the maybe unclosed that We those if found on when all that regions or ahead located rate. call close regionally we the and move in ahead in promotion on winter we season of after know in has season they're or leads as hurricane of leads, discuss spend. category the or prior particular came the maybe based can needle the they're of outage if localized of just on upcoming back those upcoming season, reengage to a

be could resources pilot that scaled scaled far on early could we is as one team It a watch is be outsourced So unclosed to that we've area something we're those with program, very that's that, and so returns group, could that the scaled, stood on outbound that a be could it. leads. or calling internally up That we return internalize quickly. pleased the with

We do types it campaigns. of outbound lot capability comes to the of those ability centers have and to a when call

one that's area. So

on is pulling years. over again, largely we, promotional the done last which area levers, several not Another

great a whatever think talking or promotion want you or because to do may I consumers low. be. they're of year on just first And opportunity there have in about tremendous promotions we're promotions find who those extended We've those promotions. to done type the They been there's monitoring the we've lying warranty past whether free effect. wait if promotions

of them two last less a the have over We done lot years.

pull. another be would that lever to So

to -- a proactive around what's you've We're of to share watching to this at the massive one have to I will I there's We event you're sitting we company standby have people, call a are mean things for of the it's forward. last I active, very you pushing happen. if home the over nothing category. XXXX. think the lot if category reasons happen lot in following for a very of That's listen have that constantly we always not always we're So -- going company, think, we're exogenous our and or this of learned wondering about disposal. decade, been. demand some waiting the Look, be. such We

leader definitely move incumbent we We when And you the we are, needle. moved to category. like to And to it's a are that the have on the got the us new place. continue needle

-- hire that's that to there, think expand. in I new out we encouraged we're level. baseline as seeing long again understanding expanding. what future, the grow. the happen have purchasing really time time is just continues It's time and a this with continue It new confident markers You drivers seen to in mentioned this and seeing continue -- going We've category. that around category and the we're to it as being I'm expand. terms the demand it And the it will and drivers, to And of

Operator

Please ahead. America. with question Gilardi next of Bank Your is from Ross go

Ross Gilardi

Good morning, guys.

Aaron Jagdfeld

Hey, Ross.

York Ragen

Ross. Hey,

Ross Gilardi

expand there, just comment your Aaron. on could last we Maybe

billion billion in three billion. target to I new in or your $X.X guide, $X.X So take revenue at think, your it's if from And Investor billion $X.X $X.X year you your Day, XXXX. you're

are how And growth within will standby $X.X soon. next in to business sometime if to to the the the larger And years, the comfortably billion. it levers see home we have I three the is off, mean the enough So business you where billion other raise 'XX? smaller it billion, that to thinking business, you'll the now? get one than come smaller HSB in it's high you $X.X or realistic is think about larger $X.X or finish

Aaron Jagdfeld

Yes.

sometimes continues and we grower Day, category We're we at a in things our happen that things guidance I think never the said in one -- control, the what grower we to period. know straight in that a of going laid outside that are I happened get event Investor to out a we don't Day, our assumed in dynamic -- we know strong think were hurricane are our But And year there three a that. in Ross, to of like you're Recall line. that had The if season. Texas. when in grow. going the you company we Investor grow really major only none the

and of have So on of additional SAM couple each have spaces, much things it's XX% TAM it the The so M&A company It I'm we're way clean We to weren't companies the categories in. organically, I I to evaluations actually available It's that the and greater in Services before that back effect, we've got -- it's just grew our tapping gotten some a kind new do is was pretty are we entire the -- spaces a of story acquired out teams. of potential in We've we've number ago. into got why of channels so like participate market of tremendous me, even pretty -- market new Yes, is were grow the planning think Grid We're company, the Investor that we we that today growing that addressable things It's pretty sure. in when seeing growing to That than to and think year. what and the interesting. And I organically. where in guide. guidance a where ecobee. exercise years energy us some in we around but Day, only into opportunity. based go is continued we our last go the of not kind every through total strategic just a through mean about like we've -- we rigorous stunning. don't it's growing. where whole

this again and lot aren't Our There is year. XX% this guide here companies between that. a XX% of morning doing grow to

what think would the tell we're We're that it's us. it are big a we're markets. we reason and I We're taking leveraging in that, that? you, built for taking just guidance addressable in not know continue is of that from why I bigger it. megatrends growth were into the here. strategically better know. leveraging opportunities much these front mean We're market that I of we've based, why particular, do bigger it to I of advantage opportunities we're think leveraging So long-term we effects. advantage in the morning I experienced is I But that have the experiencing experiencing. these rates? that update all Will this And all to a point into We're we've here future the and that success at the don't tapped on basis. signs

we're I on the build we're year, but to the And in the going years of with think products. place only just forward. remainder the that think right right at time going continue in to the this right not I

Ross Gilardi

overcompensate squeezing they that so hitting ramping the trend you you saying seem dealer you're out than more Day? Is normalized production getting that production, the had of when is inventories, more about actually that, you're be HSB maybe just Wisconsin. And yet? Investor -- you slower you thought? out at Or having Wisconsin talk And are then just for to targets to laid

Aaron Jagdfeld

the a output out of where came the great be. would Really, the actually Wisconsin QX It's pace they facilities. with question. Yes. outperformance out in on additional of we thought Trenton is

dial of facilities a talking kinds about as producing. they've with being but of -- that as in It's to terms to be mean, production around, We've those long daily continuing... the we're the we're continue added our Wisconsin lot We category around the automation of with been To honest, I mind-blowing of rates all HSB. here see facility in. rates they're to

York Ragen

[Indiscernible] through supply.

Aaron Jagdfeld

that stuff. around chain supply of the challenges And getting some

York Ragen

of some in. that baked We

Aaron Jagdfeld

had. We a for had hedged maybe in We that. bit QX little

So that that's to the question. answer

the they've be seeing of about inventories, That of kind historically. It's don't here, little know out been, we're end now. of coming spring. has and wonderful seasonally the dealer on you the high call this at in -- season. winter been happens weather a of many if spring the having we're the On about a Midwest, upper I been the It's live inventory winter it's but where days the people of anywhere

X. actually so saw I yesterday, May think I snowflakes again

just pacing permits some areas the issued California, some of difficult starting And in some to the and been it's out really limitations of also to of at the see. getting permitting like install So struggling we're kind newer to the with product category especially there. areas, we see get of terms want of in expansion

been a that's permitting hurdle. it particular increase in But continues So of to region. It me that couple increasing. output We called difficult we because to is install out the is pace a times. how that just befuddle need

quickly. of with out there. terms in is new channel that hard by we're for dealers increasing focus to dealers, struggling with working the labor. struggle also, but their So of also ability That's And they're a products us. way, with existing area our for another more And massive install the point

move up. So it rates need just But seeing we to watching are faster. We up install it even is something move see we're closely.

York Ragen

that in those are buyers there's believe we units And for field. the

I think that... So

Aaron Jagdfeld

Yes. IHC. Well, The absolutely.

York Ragen

the on Based IHC volume.

Aaron Jagdfeld

the IHC to in the on in there demand support what of think field the Based is volume, we're inventory. terms we seeing

York Ragen

to the increase install Going bandwidth.

Aaron Jagdfeld

Right.

Operator

question Please Partners. is Capital Shen Philip go ahead. next Your from Roth with

Philip Shen

Hey guys, my questions. taking for thanks

radar increases ahead? price see a that probability? First X. one what June is you also, talk -- if is QX? that on inflation Is is on was a And around Can Or is follow-up that's right? a we of price that the QX much sense the see on the then actually chance My increase. meaningfully effective in is it the more low through that you because X% that's could and

Aaron Jagdfeld

on with then round was last more in And and energy home sure. X%, range which even digits, a aggressive but of mid-single somewhere on close Yes. clean the a the for of pricing. SKU of that the across Phil. model, would kind a X%, tell pretty in you're increase. some And you in standby of question, that which products. I number price It's that category It great depends products the little

channel checks. your have may You

through terms mean, guidance pricing you a to because than X, tell that the step as the with additional right we're read extraordinary I I In QX, of the contemplates go that's lot backlog we'll of previous now quicker pricing, would June going QX, where taking somewhat repricing of increases. price

guidance of here, return to progression somewhere So going kind margin like were today, you we in be of just at QX the our we QX, if the back is the of to bottom. XXXX. kind like feel beginning to going -- look we're kind of where

year big get pricing. all here, plus that of also we've alongside of back to additional cost pretty the reductions, a through a the that's balance step, because And reading that, some of X% get kind lot to to right, today actions of that the done impact pricing full of X% the through reading so And the through from there. -- to previous

basic So on pretty obviously, here some good. prior the We like Russian-Ukrainian inflationary persisting which users That of we sit in commodity of not moderation starting costs, and I of pullback logistics then last very basic that the were commodities. last feel seeing the around costs, the commodities today some amazing conflict. start would that round they sitting as somewhat And in the pricing this it those call, optimistic of of that kind And saw call just commodities optimistic the said, to as actually well recent copper actually trends we that. most and a of We're costs. been happened. were did We're of will. And was see really kind to watch. reflective have through balance We on those of high conflict moderate those and logistics I'm here steel, reengagement year. some to those aluminum. we as to and as that's why continued big

York Ragen

now since got we've has guide, their latest at prices our in steel then, higher here. copper actually -- We're copper, levels moderated And but...

Aaron Jagdfeld

It has actually pulled back.

York Ragen

logistics we're starting from so pressures then team these to see very react moderate, yes, are rise of But quickly the higher costs we seeing think inflationary beginnings say, today's was be evaluate. I the levels, today. But And helpful. to Yes. continue of would if to able we some the will to like, have let's costs to it's something that that

Aaron Jagdfeld

out comments to we extraordinary us step. elasticity have the I have the ourselves earlier That's help could bid is They end that we customers. it try reprice if thing a doesn't to given contracted the doing avoid done prior, more probably distribution a oftentimes, that. worry know partners, already our that do already to fully job. And an made that have earlier we they've with to backlog arrangement because We on.

So repricing we channel have pretty which that's price, worry a economics understand on we the increase to reducing go painful step. their do that, a also that it And do approach us. again. backlog have is different customer we to back and that's project effectively end just that. partners -- their they that But differently. But If to that something we will doesn't or

Philip Shen

Okay.

close need Like In waiting the hitting need What where for are your else through well, are you another become do capacity, of -- you been expansion it? sketch at is baseline to to to official? we that we? What see you double, Aaron, how see looking are QX past just to something. you talked out? And where And do expansion, the quarters And you before the capacity strong And terms become what you've demand, through through of in new next 'XX you double. something? leg level. the talked you for that if what degree can it process? over is And We've talked here. few else

Aaron Jagdfeld

And our Trenton Yes. existing standby in Phil. particular. evaluating the Yes. in perhaps another an Thanks, or in facility either facility we've home for been expansion production in for process

that extraordinary capacity in some leg take capacity the -- haven't where take times deliver need That Where there up long. of a of step that we XXXX. tooling additional to we'll in did tooling plans first location question. to in of are next and what We tooling sometime or know further year are the now production take the right hit we would ordering capacity quarter yet our to lead is announced the because the We to there. another we increase

think a think for of excess for We assume, event. we've the all major curve. need We to In Again, not a happen. not to if to for contrary does it. have you what's to build surge We've that in in Today, We need we though the to our will. year assume back capacity. here terms does call shape we've going knowing demand some in even category. ourselves, we latest know hurricane where here the get and I have, seen of we handle some of see, good want pretty of demand we higher upside been already we -- seen the that guidance happen what we to surges not capacity, are, what terms baseline in expansion it do new the half there forecasts need capacity the

of up that been in do our need What We've current south But So active that faster do are meantime, want do if not the another Do in out going out? obviously, have like. on we to capacity that to side And phase we figure we to plans. to season, we an outside HSB know looks expansion deliver see have We has as expand similar we what the at in growing the existing capacity do a kind we're C&I some meantime, there add of facility? of the we We out evaluation of also we'll slower capacity to longer-term address the hurricane move which on for facilities? do category border filling clip. those where builds we're add tooling. figure of Mexico have to going and been, City. similar challenges that very this our facility to business,

and we American for just We give nice us it it facility with have ago, a Latin our And year Canada. capacity years mainly there going quickly a capacity really We've down the up beautiful long-term built U.S. markets. growth brand-new couple down was each very in to that of the there. filled

to starting tight really capacity C&I. on we're get So in

then clean energy the we where is capacity So have area that's another needs area. longer-term. another And for evaluate to

XX% discussion. and very process is and growth XX% active it's footprint a that XX% business. going future, accommodate you one be almost grow in across figuring year, to to growth that So to that the what the year everyday next is When entire the an out

Operator

with from Please is Jeff Hammond go next question ahead. KeyBanc. Your

Jeffrey Hammond

Hi, guys. Good morning.

Aaron Jagdfeld

Hey, Jeff.

Jeffrey Hammond

on ramp. you relates know the of in you But if set some I hit level need ramp. there of your as to that of on reprieve And some margin and confidence price just kind half margin of want So I freight the kind component covered kind cost. kind kind second just it to start-up surcharges, Thanks. of to

York Ragen

say Yes, at realization Jeff, say, this be the will are the York. gross go let's of here I of been just would roughly looking the about about over mean QX. we've is from I QX margins pricing that call. expected X% to commentary, half our length up, that just to talking at

half inputs is just that mentioned. cost other you the The

actually If about is where steel like peak. peak, you its at its was think it off from

what experiencing bit. as we're through off the So a in come steel relative year, to was peak, progresses that QX, which the should and

expedite of in need feel last lower amount of like We the starting safety costs. here We believe to as quarters. a brought much we we good freight don't couple over stock of do the to inbound we'll beginnings as are

bit. So we should cost logistics a inbound just moderate believe that

home reductions telecom And have in standby we sight et bill cost particularly Trenton our then As we ramp, start we'll on do of plant cetera. product, absorbing material better. on focused line of

some good margin execute have of the line cost like gross on easing got to input of So on we we feel sight that improvement.

As the after I up does costs before, levels guidance invasion Russian-Ukraine these higher the there. assume ramped mentioned steel at that

And feel we embedded current like the into commodity standpoint, we so from environment think guide. the a we've future

pieces give to all So that the increase sight good to of line margin. X% gross in

Jeffrey Hammond

don't net the noise kind give Okay. lead your can any Great. kind I updated it, on having then kind clean standby? trade the on you us home circumvention of And any know of energy on if updates of businesses? I and just And missed impact time then metering just this

Aaron Jagdfeld

orders, make on progress we still extended, still weeks Backlog on inbound we're is Jeff. But -- as HSB a Yes. continuing well long. pretty it's so on HSB. there, great billion $X pretty of there to today About No, it's question XX production. ramp north

by In thing business, changes California the vetoed, terms to impacts out. there going the seen there dramatic a metering. just California. have net the The of to around the potential think you to making about curtailment coast of it, actually, of energy been metering Florida play that on is rule rule kind take we've let's in governor proposed of draft right, net example. -- don't clean the the discussions Florida, reevaluating on an the have PUC. metering, vetoed We We the State see coast, from California California as net penetration -- don't the when

of So us. a really kind nonevent probably for

of situation of around I situation, a that's kind fact, being and say of would In by that probably kind curtailed, the metering. metering way, net inevitable the kind net

rates their on-site, As you selling power mean are and more producing that economically. get own homes at have work it retail back to longer-term. doesn't that solar is utilities untenable I

We've but kind this. We've of there this. needs a path. on regulators about -- So gradual to glide be talked engaged

kind this away bowl pulling You abrupt kind the punch of can't of situation. have

to is that answer. punch as in what's proposed detrimental they being curtailed storage would if the the and as there pull net away was the bowl dramatically -- did proposed, metering California, being I think that's industry. But in

solar, And marked XX% is right to think in I that of of kind more on the that rates projects. now utility higher. drive storage discussion, -- range rates. maybe partners. it as scale systems We're our storage storage circumvention we're then we've solar And what trade So to projects, a actually terms even in resi to XX% attachment talking impacting those inevitably, about is not channel attachment in increase seen that the bigger interest in They're concerned on result. going really

Some of of be are this are ones types investigation. caught up maybe the those that to to in projects first or the suppliers this evaluation panels of going

cost these frankly, level. projects. there'll real there the back of On so the demand the providers don't that that residential They of might on But projects, just other residential be in to dramatically any side, panel up the not total bit. are disruption the push panel again, prices a of terms at impact at looking the think

on no our So with concerns based there, today, at channel discussions partners. least major

Operator

question is go ahead. William Drab from Brian Your Blair. next with Please

Blake Keating

for is All good on Blake This morning. right, Keating Brian.

Aaron Jagdfeld

Blake. Hey,

Blake Keating

a forward taken hour. in be one they or Have overall? that ask there as lockdowns to supply a of continue And the you under that since two your China it's lockdown? question, see potential affected risk have the just do moving chain You quick suppliers after here network my I'll your any

Aaron Jagdfeld

Yes, question, not helpful. Blake. great it's It's a

challenge have in another the operational the for created Just that broadly, struggle supply another, chain have of there teams. we or world. just kind of And part lockdowns yet our

we're current We're inventory for made before So York may it. we've capital relative around this -- our have sitting I feeling like working situation. do that got lot a here to comment we're preparing that season. of working think

buffer we get right we expedite things kind you load logistics. think on or basis. little But can't faster stock it here of of having safety a can some of products to can't that. as get So Again we're lockdowns a over-the-top timely here of because like something some fly us the having is which the we a ship impact helping of where to extra instances now, where we're do have to

couple we've our we than had that So if single now supply for years an home standby. anything, I would nice lockdowns have categories kind those we've have chain, job broadening some could supply us? really that over our I think like of do sources a done some think, last critical impact of probably of like impact. fewer of ever extend, the meaning

other have options. do we So not on We're supply. concentrated as

just So impactful. category disruption derisks less that that much think any makes bit and the I one a

like So to shape I better that. a feel we're in weather

Blake Keating

pass along. will thank it, you. I Got

Aaron Jagdfeld

Thanks, Blake.

Operator

open. Strouse Mark with Mark, JPMorgan. Please ahead. question next line is go Your from your

Mark Strouse

Can me that. about you now? Sorry hear

Aaron Jagdfeld

you. hear can we now Yes,

Mark Strouse

new mute. micros, I I want the later missed Most Good have been my I taking that. was Thanks though. sorry product, the track of them introduction to on guys. on talk morning. are are questions. quarter? Sorry, still for Chilicon answered. new did about they for this if But I'm

Aaron Jagdfeld

the us feel launches kind ramp in changed still there. for the a renewable meaningful beta all. we to half. every what We with maybe full of take to guide expect at of be partner of going. that of solar only They is we we the the this, If to not to here one this prove are. production a say ahead. we energy as That the be had could where that the us. channel we in be a product clean time about look full really in second they're first year know here Yes, QX. storage ramp very was here space, for going modest bullish ourselves like in for space, going things, we've part -- the our to clean sites more the have we potential But supplier. was one know mean our pretty We I but meaningful energy, excited more could there shipping and volumes where got forward, our company And late opportunities category years we that got associated shipment that, that's ramp I'll with that the than But a engage probably slower hasn't originally. PWRmicro, we're

Mark Strouse

Great, okay. from That's Thank it me. you.

Aaron Jagdfeld

Thanks, Mark.

Operator

Revich is go ahead. Goldman question from Please Your with Jerry Sachs. next

Jerry Revich

hi. Good everyone. morning Yes,

Aaron Jagdfeld

Hi, Jerry.

Jerry Revich

just seen initiatives you given of the XX do five just Aaron, on about ago, years if about to conversion number Thanks. today? the XX% growing we've peak-to-trough feel in and and what improvement about, versus that move magic the cycle positioned call of you're and in you I'm et can residential standby ago, Rita cetera? how that demand spoke earlier compared the today you within a you database terms talk this wondering thinking way How feels in like in post context rates about years the Katrina are Sandy,

Aaron Jagdfeld

a that's some about a Outages tell different longer. and Sandy very terms is even I ago, Rita awareness, that's and I terms in for of consumers' frequent. outages grid that the terms of than even spending decade well. the homes. backup maybe Just in here a of in one decade, in everything in of terms back spot. in People on continue more you think kind the you kind interesting it's need Jerry, are was -- category are view that's more of transpired back, lasting mean go when and recognition, Yes, really question distribution, the to The as a time are different we that place of would in their right? right? in power, last our of ponder brand given more

in our homes do. we that on we're dependent source think that and much I more power a continuous of everything

know higher a will So that a much it they've products comment much, a different category make today if terms the ever I'm But be place. been. to I ready numerically, I are don't completely that the than differ. how question, there's in levels of, in it'll think no category, around Awareness is

not years on have dependent -- more XX So feel a I we outside episodic I feel lot this that's that, it's a of back the like do that of the ago, -- I levers a more case feel today. not things lot our have was like to category control. we was nature pull. that

demand. push. ways have And We more a buttons stimulate lot marketplace for there's And lot lot to a more have more that. to in the we a need

York Ragen

just Services in the ROI generator past Well, where didn't. just the think it about an having Grid and to

Aaron Jagdfeld

example, bids. -- home standby it's that had as be It's see a for whole another mean Services in part I a great sure. to back Grid generators we're York. of something interest then, angle have to starting we these And would wouldn't

Jerry Revich

How seeing these in close Services Grid in standby Thanks. on anything utilities. can and you that of close category as point? the you for I'm with PWRcell just wondering, and moving utilities? we're similar are contracts I'm expand we to part And alignment if forward last to wondering home had California

Aaron Jagdfeld

press nine said But gotten or really an we've watching our them. that it of about. they I as eight won mean I know kind that's area Services closely important I I -- we've we a do we large. for we're in was to Grid in QX, talk our because of think market else nothing team, number in our deals Grid us think release some others have Services, of Yes, well. deals. some small, one every prepared very remarks, don't

to It's talk in about cost understand the those ecobee opportunities the PWRcell, are given interest a that expensive of not a forward it's to base. a thing. thermostats more of the a about can have solve remarks, out. on when here, particular, just year, And not course, in year, about for that households thing rate cost marching products. everything And only and confidence how impactful, in talk standby, one future we moderate-income you about more solve We paying problem low us standby. going of just all because this only exit you home that are reason utilities of rate prepared kind pretty lot And mix It's of there, about. of us, of We're of some we It's forward home talked and utilities this So how their Services. the thermostats. But have but talk you Grid there's that affordable. They're is the But They lot a with but the of products. just which grid. from about thermostats. for building for of to the their across this entire think balance payers. PWRcells it's

to put standby And so payers generator. not every those system one rate to able is in home a storage battery, of going or a be a

So the in way that. ratepayers, thermostats order all great of really a to are do to address

that base we're can not lot But I the one grid down been of really been many it's couple surprised I enthusiasm and for And seeing. is value for I've in And lot many the one entire thermostats was partners exciting lot a particular, because products that but conversations. rate suite so I deliver think areas number this think of by for down there. those that larger companies. that across I of to talking longer I the the -- a utility the of of of last of high-quality Houston And week just around traction we paying operators utility of offer, also it's a think a pleasantly just they actually sense in you makes term, of investment. think have full

Operator

next Your Mandloi Suisse. ahead. Maheep go is Please with from Credit question

Maheep Mandloi

thanks the And Texas. and Most backlog, you morning questions how understand, us of on from the as my just good just like could should beyond Hey, well. your questions you for HSB answered. the Maybe similar is and a about if XXXX, backup California help Thanks. much markets? been are taking growth in have see last rate seeing -- run expect in core generator those that the thinking what markets in year in maybe like how you we Or market? coming

Aaron Jagdfeld

that tremendous great did traditionally last call backlog that year by Maheep. and the demand by mentioned or Yes, year questions, last No, specifically obviously markets, and quarters we Yes. interest Texas. obviously, curve, don't we seeing out we you last two region But Thanks. California those break state. out were from

We XXXX to markets, growth did there one just terms and very that's still category. the point in around and install, that in additional of in in challenging. what a the last has be in which they those future. seen would down in And my think strong California, in I of Texas in were market, something California, rate there see But high, thing distribution see it inventories. the terms answered a growth indirectly question, our the that have market, in of I that to in growth I consultations continued just mention, we Interest at of the field look level, of continue of in-home the the particular, which kind the level opportunities can sure, of -- kind another question would look in talked we kind about though. lead demand We elevated When IHCs, the last of lot process in and remains kind question, again, at I the to them for levels the opinion, to slowed took to very product. Houston we interest vis-a-vis week. I we participants It we mentioned on can the permitting that at down I we of historically install. of number Q&A kind category

when or I the quote maybe disenfranchised get lot a the of a the tried disenfranchised homeowners the bit were ago demand think even either winter who just off little Texas consultation event. are to an in height they done. get there coming in-home surge lead to were They year times the a by a of of time

and back want starting around they're okay, to be for ready year, think this And XXXX. to so next I about, they're of the winter, coming meaning winter

actually they're customers They and was the so who funnel. just to were starting too long out And wait. talk just in self-selected not it see kind to of to because

back revisiting they're so it. And coming in and

overall home -- standby in an So I deepen. growth and markets those rate feel the going for story as growth penetration are be part the be the to like we continue future see of markets important to

Maheep Mandloi

Thanks.

Operator

with from Your Kash Sandler. final Harrison Piper go Please question is ahead.

Kashy Harrison

taking questions all the details. my morning and Good everybody. Thank for you

to the mean, but XXXX about more things, weren't revenues So home level much we XXXX that being back might should the commentary really around backlog since levels. less I is circling and baseline excess back ecobee residential think consultations effectively way your perhaps U.S. simplistic or presumably be above think being revenues QX then? Xx to a This in contributing from Xx PWRcell about back to "normalized" just

Aaron Jagdfeld

representative tell is mean question. you'd I close you take part thought. That's but consideration think not portion IHCs do, is interesting recall at. not the rate interesting that our of an it's an that HSB or to would everything that And a it's market, equation. have right? where of we a -- proxy That's what we that are our So we it's for I into just full, that's do.

to go-forward Xx. that think the could unpack outside So away. growth HSB there backlog interesting to But established talk run sure we there have this America. North that product rate We with where kind markets I growing XXX% category we're channel see partners would with a the at it outside we've time. as say to the continue to though. baseline of more question, kind the are But an numbers. certainty IHCs. is if in there. I seen that. about U.S. that we're I'd growth the We've of of more seen not rate, dramatically and that I'm -- also took other interest in it's didn't have have It's I where we about the

York Ragen

got a the year. to future forecast of... storm like there's is You And close lot and rates what season then this

Aaron Jagdfeld

lot level thinking higher you're there's new events an everything think It's or But about the his baseline think historically We question. to We cycles. distribution. baseline that. I kinds interesting after higher. that. levels with if last and this seen what which of that baseline, these it's holds But kind a of of always XX talk nearly going I certainly new to question, is about it see. those created into the into But it's And we've gets be that we goes with and brand infill then quite really awareness And new something grow. over recognition infill and them that years. invariably, That's higher goes levels. We

York Ragen

all doing And clean is then got top you've our our global C&I business very energy growing. well business that. that got Then on you've of

Aaron Jagdfeld

Right, so those to would be accretive that.

York Ragen

all pieces Put yes. together, the

Aaron Jagdfeld

yes. Accretive,

Kashy Harrison

follow-up. I'm trying you times you. to circle Thank was HSB back just just the between my maybe the I then as -- if wondering could That's backlog. helpful. And relationship lead and

lead in weeks expect XX you are have $X now XXXX. still billion some over at from XX you year-end. XX times of to into carry around But You mentioned to backlog that and

then was "normal" quarters I'm I maybe there of relationship how shave about Thank call, might so how trying market wondering better that. the dynamics up what lead another And you that just be? then you. the you with just times? to XX next might to time the us times how that to from few are and the you could at And seasonal evolve if weeks lead evolve just reduction like remind lead the to would understand seven in XX stop next wouldn't then consider backlog over of meaning the being times seven think linear, the lead to weeks those and another after times

Aaron Jagdfeld

end demand the thought original to to our given the backlog, off but coming a into have that's place robust, when Yes, of has meaningful today. kind elevated us product. inventory want it QX HSB this almost end in by like, the foresee getting from for surges, was line that, to of Kash, we're a two lead to the was going We we thing question, the good ourselves I That times, your sat to this we exit year. has great have that year. That when with assumption weeks. going pushed product be at what we think this our level Day a maybe Obviously, was Investor the back would don't available expectations handle question, part It's our the to which lead to it. become we year. back that we when QX, are historical for to down and times, in so two zero remained us, That HSB historical call zero we clear are be demand that was are can there in We to where of backlog weeks.

producing elevated. they of lot that a we're won't fairly In quite remember remain lead here fact, each also be weeks, -- we'll talking week. bit bigger backlog, times per be a a at production is won't because week but be XX we're will we're And to because zero ramping at number, weeks. They about two we're back right, more

accelerating. we're So

And number. so week that of a each is bigger actually week backlog --

is So grow our as the output growing quantum here. we

way, major that's -- By not include a our does So event. the without. assumption and

major no So it includes events.

muted So what's that's season, not hurricane projected. a

Whether storms. -- it's way So call. this on I there. right we know. we another But guide. wrong, a or bit don't guess, could that guided conservative without the are, always we We've for debate maybe being that's that's hour I

free like option there's that so a embedded in the And stock way.

of good that to other get season big year more we'll demand line it year. standpoint, And this see here able that's that's know more story on portable next outages if think than sizable we're saying, shape If think for were a But this major we'd is do going have that's to We're leave I call. so that, going a are if gens more because going to this that be much storm things. demand. at be We probably pretty that have be it where anything. there. what that in I you were in year. there From we're do satisfy don't experts -- that way, it and want outages capitalize will of XXXX able with inventory backlog in a you to to we'll the an

So question. -- but great

Operator

And question-and-answer session. the that concludes

back conference I'll to Now Mr. the Harris hand final for comments.

Michael Harris

to again, XXXX want thank We to August. us morning. second and for you look earnings We results everyone quarter this early joining Thank discussing with you goodbye. in forward our

Operator

gentlemen, call. joining. and today's this concludes Thank conference for you Ladies

a great day. You Have may now disconnect.

Generac (GNRC) 4 May 222022 Q1 Earnings call transcript