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Note 1 - Description of Business and Basis of Presentation | 9 Months Ended
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Sep. 30, 2018
Notes to Financial Statements |
Business Description and Basis of Presentation [Text Block] | 1. Description of Business and Basis of Presentation Founded in 1959, Generac Holdings Inc. (the Company) is a leading global designer and manufacturer of a wide range of power generation equipment and other engine powered products serving the residential, light-commercial and industrial markets. The Company’s power products are available globally through a broad network of independent dealers, distributors, retailers, wholesalers, equipment rental companies, and e-commerce partners, as well as sold direct to certain end user customers. Over the years, the Company has executed a number of acquisitions that support its strategic plan (as discussed in Item 1 of its Annual Report on Form 10 -K for the year ended December 31, 2017). A summary of acquisitions affecting the reporting periods presented include:
| ● | In June 2018, the Company acquired Selmec Equipos Industriales, S.A. de C.V. (Selmec), headquartered in Mexico City, Mexico. Selmec is a designer and manufacturer of industrial generators ranging from 10kW to 2,750kW. Selmec offers a market-leading service platform and specialized engineering capabilities, together with robust integration, project management and remote monitoring services.
| ● | In January 2017, the Company acquired Motortech GmbH (Motortech), headquartered in Celle, Germany. Motortech is a leading manufacturer of gaseous-engine control systems and accessories, which are sold primarily to European gas-engine manufacturers and to aftermarket customers around the world.
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries that are consolidated in conformity with U.S. generally accepted accounting principles (U.S. GAAP). All intercompany amounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017, the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2018 and 2017, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017 have been prepared by the Company and have not been audited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for the fair presentation of the financial position, results of operation and cash flows have been made. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosure normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2017. New Accounting Standards Not Yet Adopted In February 2016, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) 2016 - 02, Leases. This guidance was issued to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. The guidance should be applied using a modified retrospective approach and is effective for the Company in 2019. The Company has developed a comprehensive project plan and established a cross-functional implementation team to evaluate the impact of the standard. The project plan includes evaluating the Company’s lease portfolio, analyzing the standard’s impact on the Company’s various types of lease contracts and identifying the reporting requirements of the standard. While the Company does not anticipate the impact to the statement of comprehensive income to be material, it is still calculating the impact the lease asset and lease liability will have on the balance sheet. In August 2017, the FASB issued ASU 2017 - 12, Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities . This guidance was issued to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and to make certain targeted improvements to simplify the application of the hedge accounting guidance. The standard is effective for the Company in 2019, with early adoption permitted. The Company is currently assessing the impact the adoption of this guidance will have on the Company’s results of operations and financial position. In August 2018, the FASB issued ASU 2018 - 15, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This guidance was issued to address the diversity in practice related to the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption, and is effective for the Company in 2020. The Company is currently assessing the impact the adoption of this guidance will have on the Company’s results of operations and financial position. There are several other new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. Recently Adopted Accounting Standards On January 1, 2018, the Company adopted ASU 2017 - 07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The new standard requires presentation of certain components of net periodic pension cost as non-operating expense. The adoption of this new standard did not have a significant impact on the Company’s financial statements. The changes in presentation of the components of net periodic pension cost were applied retrospectively to all periods presented. On January 1, 2018, the Company adopted ASU 2016 - 15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . The changes in presentation of the proceeds from beneficial interests in securitization transactions were applied retrospectively to all periods presented. On January 1, 2018, the Company adopted ASU 2014 - 09, Revenue from Contracts with Customers , and all related amendments (the “new revenue recognition standard”) using the full retrospective method, which requires application to all periods presented. The impact of adopting the above standards on the Company’s previously reported condensed consolidated financial statements is as follows:
Condensed Consolidated Balance Sheets |  | September 30, 2017 |
|  | As Reported |  |  | Impact of Adoption |  |  | As Adjusted |
Accounts receivable |  | $ | 320,626 |  |  | $ | (4,207 | ) |  | $ | 316,419 |
Inventories |  |  | 349,023 |  |  |  | 7,359 |  |  |  | 356,382 |
Other accrued liabilities |  |  | 109,362 |  |  |  | 5,584 |  |  |  | 114,946 |
Deferred income taxes |  |  | 49,528 |  |  |  | (3,367 | ) |  |  | 46,161 |
Other long-term liabilities |  |  | 69,556 |  |  |  | 6,178 |  |  |  | 75,734 |
Retained earnings |  | $ | 535,172 |  |  | $ | (5,243 | ) |  | $ | 529,929 |
|  | December 31, 2017 |
|  | As Reported |  |  | Impact of Adoption |  |  | As Adjusted |
Accounts receivable |  | $ | 280,002 |  |  | $ | (708 | ) |  | $ | 279,294 |
Inventories |  |  | 380,341 |  |  |  | 6,708 |  |  |  | 387,049 |
Other accrued liabilities |  |  | 105,067 |  |  |  | 7,551 |  |  |  | 112,618 |
Deferred income taxes |  |  | 43,789 |  |  |  | (1,937 | ) |  |  | 41,852 |
Other long-term liabilities |  |  | 76,995 |  |  |  | 5,898 |  |  |  | 82,893 |
Retained earnings |  | $ | 616,347 |  |  | $ | (5,513 | ) |  | $ | 610,835 |
Condensed Consolidated Statements of Comprehensive Income |  | Three Months Ended September 30, 2017 |
|  | As Reported |  |  | Impact of Adoption |  |  | As Adjusted |
Net sales |  | $ | 457,253 |  |  | $ | (1,414 | ) |  | $ | 455,839 |
Cost of goods sold |  |  | 299,784 |  |  |  | (176 | ) |  |  | 299,608 |
Selling and service expenses |  |  | 44,402 |  |  |  | (939 | ) |  |  | 43,463 |
Research and development expenses |  |  | 10,864 |  |  |  | (14 | ) |  |  | 10,850 |
General and administrative expenses |  |  | 22,102 |  |  |  | 26 |  |  |  | 22,128 |
Other, net |  |  | 1,570 |  |  |  | 140 |  |  |  | 1,710 |
Provision for income taxes |  |  | 20,581 |  |  |  | (177 | ) |  |  | 20,404 |
Net income attributable to Generac Holdings Inc. |  | $ | 39,709 |  |  | $ | (274 | ) |  | $ | 39,435 |
Earnings per share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.64 |  |  | $ | - |  |  | $ | 0.64 |
Diluted |  | $ | 0.64 |  |  | $ | (0.01 | ) |  | $ | 0.63 |
Comprehensive income attributable to Generac Holdings Inc. |  | $ | 43,213 |  |  | $ | (274 | ) |  | $ | 42,939 |
|  | Nine Months Ended September 30, 2017 |
|  | As Reported |  |  | Impact of Adoption |  |  | As Adjusted |
Net sales |  | $ | 1,184,443 |  |  | $ | (3,244 | ) |  | $ | 1,181,199 |
Cost of goods sold |  |  | 782,028 |  |  |  | 1,219 |  |  |  | 783,247 |
Selling and service expenses |  |  | 127,702 |  |  |  | (2,762 | ) |  |  | 124,940 |
Research and development expenses |  |  | 31,732 |  |  |  | (42 | ) |  |  | 31,690 |
General and administrative expenses |  |  | 64,436 |  |  |  | 72 |  |  |  | 64,508 |
Other, net |  |  | 3,105 |  |  |  | 420 |  |  |  | 3,525 |
Provision for income taxes |  |  | 42,946 |  |  |  | (841 | ) |  |  | 42,105 |
Net income attributable to Generac Holdings Inc. |  | $ | 78,211 |  |  | $ | (1,310 | ) |  | $ | 76,901 |
Earnings per share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.27 |  |  | $ | (0.02 | ) |  | $ | 1.25 |
Diluted |  | $ | 1.26 |  |  | $ | (0.02 | ) |  | $ | 1.24 |
Comprehensive income attributable to Generac Holdings Inc. |  | $ | 92,177 |  |  | $ | (1,310 | ) |  | $ | 90,867 |
Condensed Consolidated Statement of Cash Flows |  | Nine Months Ended September 30, 2017 |
|  | As Reported |  |  | Impact of Adoption |  |  | As Adjusted |
Net income |  | $ | 78,644 |  |  | $ | (1,310 | ) |  | $ | 77,334 |
Deferred income taxes |  |  | 28,703 |  |  |  | (3,367 | ) |  |  | 25,336 |
Accounts receivable |  |  | (70,108 | ) |  |  | 2,105 |  |  |  | (68,003 | )
Inventories |  |  | 16,738 |  |  |  | (7,359 | ) |  |  | 9,379 |
Other accrued liabilities |  |  | 17,319 |  |  |  | 7,829 |  |  |  | 25,148 |
Net cash provided by operating activities |  | $ | 122,719 |  |  | $ | (2,102 | ) |  | $ | 120,617 |
Proceeds from beneficial interests in securitization transactions |  | $ | - |  |  | $ | 2,102 |  |  | $ | 2,102 |
Net cash used in investing activities |  | $ | (15,324 | ) |  | $ | 2,102 |  |  | $ | (13,222 | )

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- Definition The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI http://asc.fasb.org/topic&trid=2122149 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 + Details
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