Generac CEO on Winter Storm Impact, Generator Demand, and Tariffs

Impact of Winter Storms on Power Grids

• ❄️ Winter storms with sub-freezing temperatures, especially in single digits, can cause frozen pipes and significant damage.
• 💡 A backup power source, such as a generator or battery, can prevent damage from power outages during severe weather events.
• ⚠️ The frequency and severity of climate events like hail, wildfires, and hurricanes are increasing, leading to greater demand for backup power solutions.

Consumer Behavior and Generator Purchases

• 📈 Approximately 20% of the population plans for outages in advance, often due to prior experience with damage from power loss.
• 🏃‍♂️ Many people wait until a power outage occurs to purchase a generator, leading to scrambles for portable units to bridge the gap.
• 🥶 Winter outages are particularly challenging because opening windows for ventilation is not an option, unlike during summer outages.

Generac's Inventory and Production

• ✅ Generac is in a good inventory position due to a lack of a major hurricane event in the previous fall.
• 🚀 The company can quickly spool up production to meet demand, especially for events like the current winter storm, which requires significant preparation.

Impact of Tariffs on Generac

• 📉 Tariffs have impacted Generac, as they have with many global companies, leading to increased costs.
• 🌍 While Generac has worked to reshore production to the US, tariff increases over the past several years have necessitated price adjustments.
• 💰 The company aims to mitigate passing these costs directly to customers whenever possible.