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>>> Generac Power Systems, Inc. -- Moody's announces

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gfp927z   Tuesday, 08/25/20 11:32:13 PM
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>>> Generac Power Systems, Inc. -- Moody's announces completion of a periodic review of ratings of Generac Power Systems, Inc.


August 25, 2020


Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Generac Power Systems, Inc.

Global Credit Research - 25 Aug 2020

New York, August 25, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Generac Power Systems, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Key rating considerations are summarized below.

Generac Power Systems, Inc.'s Ba2 corporate family rating considers its strong position in the residential standby generator market, moderate financial leverage, solid margins, and strong free cash flow generation aided by low capital expenditure requirements. The rating also incorporates Moody's expectations for continued organic revenue growth driven by an aging US electrical grid and low US penetration rates of residential home standby generators. The company also has presence in the nascent but rapidly growing clean energy on-site power storage market, which will help diversify the company's product offerings, as well as very good liquidity. However, Generac has a very high product concentration in residential standby power generators, significant reliance on the North American market, and is experiencing weakness in the commercial and industrial segment from the pandemic. Moody's also expects the company to make future acquisitions and potentially become more shareholder friendly.

This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodology used for this review was Manufacturing Methodology published in March 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.


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