Good day, everyone, and thank you for being here. Welcome to the Generac Holdings Incorporated Earnings Call for the Second Quarter of 2021. Currently, all participants are in listen-only mode. After the presentation, we will have a question-and-answer session. I would now like to hand the call over to Mike Harris, Vice President of Corporate Development and Investor Relations. Please go ahead.

Good morning, and welcome to our second quarter 2021 earnings call. I'd like to thank everyone for joining us this morning. With me today is Aaron Jagdfeld, President and Chief Executive Officer; and York Ragen, Chief Financial Officer. We will begin our call today by commenting on forward-looking statements. Certain statements made during this presentation, as well as other information provided from time to time by Generac or its employees may contain forward-looking statements and involve risks and uncertainties that could cause actual results to differ materially from those in these forward-looking statements. Please see our earnings release or SEC filings for a list of words or expressions that identify such statements and the associated risk factors. In addition, we will make reference to certain non-GAAP measures during today's call. Additional information regarding these measures, including reconciliation to comparable U.S. GAAP measures, is available in our earnings release and SEC filings. I will now turn the call over to Aaron.

Thanks, Mike. Good morning, everyone. And thank you for joining us today. Our second quarter results were incredibly strong with broad-based revenue growth of 68%. And with all-time records once again for the company this quarter for net sales, adjusted EBITDA, and adjusted EPS. We're particularly proud of achieving this tremendous top-line growth along with the record levels of adjusted earnings, despite the ongoing significant cost pressures, logistical challenges, and various capacity constraints we faced in the quarter across the supply chain. I'd like to thank our teams for their ongoing commitment to our customers. Their dedication and tireless execution have helped us to largely overcome the incredible supply chain challenges that have become commonplace in today's post-pandemic operating environment. Second quarter revenue, adjusted EBITDA, and adjusted EPS were all ahead of our expectations. The revenue outperformance was highlighted by higher shipments of home standby generators as build rates for the quarter were ahead of our previous guidance due to strong operational execution. Demand for home standby generators remains incredibly robust due to a variety of factors, including continued traction with the Home as a Sanctuary megatrend, as well as significantly higher power outage activity over the past several quarters. Revenue from global C&I products also outperformed expectations during the quarter, both domestically and internationally, highlighted by national telecom and rental customers and growth within the European region. The revenue outperformance in these areas was partially offset by lower than expected shipments of portable generators, primarily due to supply chain constraints, which has led to lower pre-season stocking levels with our retail channel partners. Adjusted EBITDA dollars were also ahead of our previous forecast, driven mainly by the higher shipping levels, but EBITDA margin was slightly below our expectations given the higher input costs in the quarter. Year-over-year, overall net sales increased 68% to $920 million and also increased sequentially at a strong rate relative to the first quarter of 2021, which was the previous all-time record. The growth in the quarter was driven by broad-based strength across the business as both residential and C&I products grew dramatically as compared to the prior year. The growth of residential products was led by robust shipments of home standby generators, which nearly doubled over the prior year due to record production levels. Additionally, shipments of PWRcell energy storage systems experienced tremendous growth both over the prior year and sequentially as demand for clean energy solutions continues to rise alongside the rapidly expanding solar plus storage market. Shipments of C&I products also grew significantly in the quarter as demand continued to recover from the prior year COVID lows at an accelerated rate across a number of markets and geographies and are now solidly above 2019 levels. Adjusted EBITDA increased 77% as compared to the prior year with the corresponding margin increasing 120 basis points and adjusted EPS increasing 71%. Now discussing our second quarter results in more detail, despite strong prior year comparisons due to the emergence of the Home as a Sanctuary megatrend and elevated outage levels, home consultations or sales leads for home standby generators remain strong during the second quarter and increased approximately 50% as compared to the second quarter of 2020. Consistent with the trend seen over the past year, the strength is broad-based across the U.S. with nearly all states experiencing growth again in the quarter with more than half of all states showing triple-digit growth led by Texas. Activations of home standby generators, which are a proxy for installations, also grew again at a strong rate compared to the prior year with broad-based strength across all U.S. regions, including exceptional growth in the Northeast and South Central regions. Overall outage activity as measured on a trailing four-quarter basis continued to be much higher relative to the prior comparable period and was well above the long-term baseline average, helping to drive awareness of the home standby category. In addition, we continue to expand our distribution footprint as we ended the second quarter with more than 8,000 residential dealers, adding over 300 new dealers in the quarter. The build-out distribution remains a critical focus area. As we have added approximately 700 dealers since the start of the year and 1,300 dealers over the last 12 months, which includes the addition of several new dealers in California and Texas that represent nearly one-third of the increase. Early in the third quarter, these key demand metrics for home standby have continued to trend even higher relative to prior year levels, including home consultations increasing at a strong double-digit rate. We believe the ongoing strength in the product category can be attributed to several factors, which are leading to home standby generators becoming more mainstream as homeowners have an increasing awareness of the need for power security, as they are working, learning, shopping, entertaining, and in general, spending more time in their homes. Earlier this month, we achieved a significant milestone by starting production of home standby generators at our new manufacturing facility in Trenton, South Carolina. This facility will provide much-needed capacity to further ramp our daily home standby build rates in an effort to reduce lead times, which remain elevated at approximately 28 weeks. With the successful start-up of Trenton combined with a number of other capacity expansion activities, we're now anticipating higher production levels relative to previous expectations. And as a result, we have moderately increased our shipment outlook for these products during the second half of 2021. In addition, we remain on track to approximately double our current build rates by the end of the second quarter of 2022, which is nearly four times greater than our previous baseline output levels at the beginning of last year. I also want to provide an update on our rapidly growing clean energy product offering. As previously mentioned, we experienced a dramatic increase in shipments of PWRcell energy storage systems during the second quarter, which was aided in part by a softer prior comparison as the overall solar market was negatively impacted by a sharp drop in installations due to the onset of the COVID-19 pandemic. Shipments of PWRcell systems also experienced strong growth sequentially as we gained further traction in the rapidly expanding solar plus storage market. In addition to the strong revenue growth, key performance indicators for clean energy continue to show favorable trends. In-home and virtual consultations expanded at very strong rates as compared to the prior year and sequential trends were also encouraging. System activations, which are a proxy for installations and commissioning, grew at a tremendous rate during the second quarter, as compared to the prior year and also improved on a sequential basis. In addition, we further built out our installer network during the quarter, and we ended the first half of the year with approximately 2,200 trained and certified dealers with nearly 900 of those dealers registered on our PowerPlay CE selling system. As we indicated on the previous quarter’s earnings call, demand for clean energy products has been outpacing supply, which is limiting our growth rates for the category. Throughout the second quarter, strong end-market dynamics around energy storage coupled with our marketing and distribution initiatives resulted in further strengthening of demand for clean energy products. In addition, our teams made important progress during the quarter with our supply chain execution regarding PWRcell energy storage components. As a result, we're increasing our full-year revenue outlook and now expect clean energy shipments to approximately double as compared to the prior year. In addition, we're driving profitable growth within the product category as we scale volumes and optimize the supply chain. As we've also discussed on recent calls, we have an exciting pipeline of innovative clean energy products expected to come to market over the next several quarters. These launches include generator integration with our PWRcell storage systems, the ability to more efficiently add a PWRcell system to an existing solar install, the launch of a new DC output generator that can be combined with solar and storage, to allow an end-user to operate independently of the power grid, and a new load management system that will be paired with our existing power view energy monitoring platform to allow a homeowner to more fully control their power generation and consumption. In addition, we're making our PWRcell systems smart grid ready, which will enable them to be used in virtual power plant applications using Enbala's Concerto software platform. We believe these product launches will further enhance our competitive position and differentiation in the energy storage, monitoring, and management markets. As we look to further build out our clean energy offerings into a complete ecosystem of products and solutions for installers and end-users. Consistent with this approach, in early July, we entered the large and growing microinverter market for solar applications with the acquisition of Chilicon Power. Based in Los Angeles, California, Chilicon is a designer and provider of grid interactive microinverter and monitoring solutions for the solar market. We calculate that the solar plus storage attachment rates are currently between 20% and 25%, which essentially means we aren't participating in 75% to 80% of the market that was focused on solar-only installations. This strategic acquisition will dramatically increase our serve market and help us deepen our relationships with solar channel partners and installers, as we expand our clean energy product suite to include microinverters. Industry sources estimate the global market for microinverters and optimizers used in residential applications to be approximately $2.5 billion for 2020 and is projected to grow to approximately $4.5 billion by the end of 2023. We have a proven track record of developing leading energy solutions, and we intend to apply the same playbook that we have previously used for other acquisitions in this space with a focus on scaling the business through our innovative lead generation capabilities, our omnichannel distribution approach, the implementation of a variety of cost-out actions and by leveraging Generac's extensive supply chain expertise. I'd also like to provide a brief update on Enbala Power Networks, a leading grid services technology provider that we acquired last fall. We are making good progress with the deep integration of Enbala’s Concerto software platform with our existing products. And today, we now have this smart grid-ready functionality available for all of our C&I natural gas generators, home standby generators, and our PWRcell energy storage systems. Also, over the last several quarters, Enbala has been working closely with Generac's commercial sales teams on potential projects with utilities, cooperatives, and energy aggregators, which has led to a considerable increase in quoting and proposal activities for the business so far in 2021. As the market for grid services continues to develop, we believe combining our equipment hardware with Enbala software is a critical first step by making Generac's products smart grid ready, thereby allowing them to operate as distributed energy resources known as DERs. These DERs can be aggregated into a virtual power plant or VPP solution and bundled with turnkey services that should enable us to improve our value proposition to end users, utilities, and grid operators allowing us to develop various new revenue streams in the years ahead. These will not only include the existing Software-as-a-Service platform that Enbala currently offers, but could also include a variety of vertical operational services that enable a more turnkey solution and ultimately even performance services that could deliver megawatts of power to various potential customers. The recent heat waves experienced in the U.S. this summer are an important example of the growing need for utilities and grid operators to expand their use of grid services and DER assets. At one point late June, Enbala enabled the deployment of hundreds of megawatts of its connected fleet to maintain grid stability predominantly in the Pacific Northwest and Northeast in response to the extreme temperatures that created enormous demand spikes for power in those regions. In these instances, the combination of grid services, software, and systems along with DER assets were used for flexibility response purposes to supplement traditional power plants. We believe systems such as Enbala’s Concerto platform and DER assets like those provided by Generac will become critically important going forward for utilities and grid operators who will be tasked with providing stability and resiliency across their networks as more renewable power, which is highly variable is brought online and as end-users dramatically increased their consumption with the electrification of everything from heating and cooling to transportation over the next decade. In addition to the great performance of our residential products in the second quarter, our C&I products also had a tremendous quarter, as demand across a number of markets and geographies continued to recover at a faster pace than we have previously expected. Net sales of C&I stationary generators through our North American distributor channel grew again in the quarter at a solid rate with quoting project activity and order volumes further recovering from the pandemic-related lows of last year with growth well ahead of 2019 levels. And we expect attractive growth for this channel for the full year. We're also experiencing encouraging growth with the energy systems business, our industrial distributor in Northern California that we acquired last year. As our investments integration activities and overall increased focus are producing excellent results in this large and rapidly growing power generation market. Shipments to telecom national account customers increased significantly during the quarter as compared to the prior year. And we're well ahead of our expectations as capital spending by several of our larger telecom customers accelerated and led to a further increase in projected shipments during the current year. The catalyst for the additional spending on backup power in this important vertical continues to be driven by an elevated power outage environment over the last several years. The power security mandate in California requiring a minimum of 72 hours of backup power at all tower locations and the build-out of wireless carriers 5G networks. The long-term demand outlook for telecom backup power remains very compelling driven by the increasingly critical nature of wireless communications, as this infrastructure shifts to the next generation architecture. Shipments of mobile products to national rental account customers were also higher during the second quarter as compared to the very soft prior year, which was negatively impacted by the pandemic. We still expect shipments of mobile products for full year 2021 to improve dramatically from prior year levels. As national rental account customers significantly increased their spending on fleet equipment with utilization and rental rates continuing to improve. Longer term, we remain optimistic about demand for mobile products, with the compelling megatrend around the critical need for infrastructure improvements, which could finally benefit from economic stimulus plans being pursued by the current administration. Additionally, we continue to gain important traction with our lead gas initiatives through increased quoting activity and improved project close rates for our natural gas generators used in applications beyond traditional emergency standby power generation, such as their using microgrids or other distributed generation applications. Quoting activity and the sales pipeline is growing significantly for these project opportunities and revenue for these applications increased at a substantial rate during the second quarter, as compared to the prior year. And the outlook has further increased for full year 2021. This is an emerging part of our C&I business that had good momentum entering the year and with the major winter-related outages in Texas, and the extreme heat waves occurring this summer, we're seeing increased interest and demand for these solutions. To support the growing opportunities we see in our C&I business, we announced the closing of Deep Sea Electronics on June 1. The advanced controls designer and manufacturer headquartered in the United Kingdom. We believe Deep Sea’s high level of technical expertise and the added engineering bandwidth their team will give us will be critical to helping us develop and accelerate our product roadmap for the future, bolstering our electronics and controls capabilities and supporting further innovation to meet dynamic needs of the evolving energy technology solutions market. As we advance the use of our products and applications beyond standby power, the need for complex systems-level controls for distributed generation, storage, and other DER assets used in microgrid applications will serve as a key enabler of the decentralization of the power grid in the future. Similar to our domestic C&I products, demand internationally has also rebounded strongly in recent quarters with shipments increasing at a core rate of 45% in the second quarter, compared to the prior year. This growth was primarily due to strength in the European and Latin American regions, which experienced a sharp increase in demand as end markets recovered off the pandemic-induced prior year lows. While some COVID-19 impacts and restrictions are still lingering in several international regions, larger project quoting and overall order activity continued to recover at a faster than expected pace. This is leading to growth in our international backlog at the end of the second quarter, with the order strength continuing early on here in the third quarter. Stronger organic growth combined with the Deep Sea acquisition are both driving our revenue outlook for the international segment higher than previously expected for the full year. In addition, adjusted EBITDA margins are expected to expand considerably in the second half of the year, primarily benefiting from the impact of the inclusion of Deep Sea’s results, as well as from improved operating leverage on the higher sales volumes. In closing this morning, we believe our recent strategic acquisitions are important examples of our ability to leverage our strong financial position to further expand our capabilities and advance our strategy as we continue our transition into an energy technology solutions company. We remain focused on developing innovative solutions that enable, protect, and improve the efficiency of next-generation power, communications, transportation, and other critical infrastructure and going forward, we intend to continue investing aggressively in a number of strategic initiatives, both organically and through acquisitions that we believe can help to accelerate these efforts. And now, I'd like to turn the call over to York to provide further details on our second quarter results and our updated outlook for 2021.

Thanks, Aaron. Looking at second quarter of 2021 results in more detail, net sales increased 68% to $920 million during the second quarter of 2021, an all-time record as compared to $546.8 million in the prior year second quarter. The combination of the Energy Systems, Mean Green, Enbala, and Deep Sea acquisitions and the favorable impact from foreign currency had an approximate 4% impact on revenue growth during the quarter. Briefly looking at consolidated net sales for the second quarter by product class. Residential products sales increased 76% to $600 million as compared to $341.4 million in the prior year. As Aaron already discussed in detail, home standby generator sales continue to experience robust growth, which nearly doubled during the second quarter, as shipments benefited from much higher production levels for these products as compared to the prior year. Shipments of PWRcell energy storage systems also grew at a dramatic rate as compared to the prior year as the solar plus storage market in the U.S. continues to rapidly expand and as we build out our marketing and distribution capabilities are selling into the clean energy space. Portable generators also increased at a solid rate versus prior year due to the higher power outages severity in recent quarters and shipments of chore products also improved at a strong rate in part due to the electrification of our product lines. Commercial and industrial product net sales for the second quarter of 2021 increased 64% to $254.3 million, as compared to $154.9 million in the prior year quarter. There was an approximate 7% benefit to net sales during the quarter from the impacts of the Deep Sea acquisition and favorable foreign currency. The very strong core revenue growth was in part aided by the softer prior year comparison due to the COVID-19 pandemic. However, C&I revenue also grew 6% on a core basis as compared to 2019 levels. The strength in shipments compared to the prior year was due to broad-based growth across a number of markets and geographies as demand is recovering at an accelerated rate, both domestically and internationally in the following areas. Domestically, the growth was due to a substantial increase in shipments to telecom national account customers, resulting from much higher capital spending as they continue to harden their wireless networks. Shipments of mobile products recovered significantly compared to the soft prior comparison, as our rental account customers accelerated their fleet replacement, given higher utilization and rental rates, also contributing to the increase with solid growth with our industrial distributors, as well as an increase in other project opportunities as we gain traction with our lead gas initiatives. Internationally, the increase in C&I products, as previously mentioned, was primarily due to an increase in market activity, mostly in the European and Latin American regions that are recovering sharply from the impacts of the pandemic that existed during the prior year. Net sales for the other products and services category, primarily made up of aftermarket service parts, product accessories, extended warranty revenue, remote monitoring and grid services subscription revenue, and other service offerings increased 30% to $65.7 million as compared to $50.6 million in the second quarter of 2020. There was an approximate 9% benefit to net sales during the quarter from the impacts of the energy systems at Enbala acquisitions and favorable foreign currency. In addition, we experienced very strong growth in aftermarket service parts as a result of the higher power outage activity in recent quarters. A larger and growing installed base of our products and additional extended warranty revenue also contributed to the increase versus prior year. Gross profit margin was 36.9% as compared to 38.2% in the prior year second quarter, which was impacted by higher input costs in the current year that were partially offset by improved pricing and more favorable overhead absorption from the higher sales volumes. Operating expenses increased $37.4 million or 31.3% as compared to the second quarter of 2020, but declined 460 basis points as a percentage of revenue, excluding intangible amortization due to the strong operating leverage on substantially higher sales volumes in the current year quarter. As a result, adjusted EBITDA before deducting for non-controlling interest, as defined in our earnings release, was an all-time record of $217.7 million or 23.7% of net sales as compared to $123.1 million or 22.5% of net sales in the prior year. This 120 basis point improvement in EBITDA margin was primarily the result of improved leverage or the fixed operating expenses on the much higher sales volumes being partially offset by the aforementioned declining gross margin. I will now briefly discuss financial results for our two reporting segments. Domestic segments sales increased 70% to $784.1 million as compared to $460.8 million in the prior year quarter, with the impact of acquisitions contributing approximately 2% of the revenue growth for the quarter. Adjusted EBITDA for the segment was $203.9 million or 26% of net sales, as compared to $121.3 million in the prior year or 26.3% of net sales. International segment sales increased 57.8% to $135.8 million, as compared to $86.1 million in the prior year quarter, with the impact of acquisitions and foreign currency contributing approximately 13% of the revenue growth for the quarter. Going forward, the financial results for Deep Sea Electronics will be included in our international segment primarily within C&I product class. Adjusted EBITDA for the segment before deducting for non-controlling interest was $13.7 million or 10.1% of net sales, as compared to $1.9 million or 2.2% of net sales in the prior year. The increase in international segment margin was primarily due to improved operating leverage on the higher sales volumes and the impact of the Deep Sea acquisition. Now switching back to our financial performance for the second quarter of 2021 on a consolidated basis. As disclosed in our earnings release, GAAP net income attributable to the company in the quarter was $127 million, as compared to $66.1 million for the second quarter of 2020. GAAP income taxes during the current year second quarter was $46.4 million or an effective tax rate of 26.6% as compared to $18.5 million or an effective tax rate of 22.5% for the prior year. The increase in effective tax rate was primarily due to a discrete tax item resulting from a legislative tax rate change in the United Kingdom, which revalued deferred tax liabilities by $7 million or approximately 4% tax rate impact during the current year quarter. Diluted net income per share for the company on a GAAP basis was $2.01 in the second quarter of 2021 compared to $1.02 in the prior year. Adjusted net income for the company, as defined in our earnings release, was $153.2 million in the current year quarter or $2.39 per share, which was also an all-time record, this comparison with the adjusted net income of $88.5 million in the prior year or $1.40 per share. Cash income taxes for the second quarter of 2021 were $37.4 million as compared to $13.9 million in the prior year quarter. The current year reflects an expected cash income tax rate of approximately 21% to 21.5% for the full year 2021, which is higher than the previously expected rate of approximately 20.5% for 2021, primarily the result of higher intangible amortization from the Deep Sea acquisition, which is not deductible for tax purposes. Also, the 21% to 21.5% cash tax rate compares to the prior year rate of 17% that was anticipated in the second quarter of 2020. The increase in the current year cash tax rate versus the prior year is primarily due to a significant increase in domestic pre-tax income, which is taxed at a higher statutory rate. Cash flow from operations was once again robust at $122.5 million as compared to $101.8 million in the prior year second quarter. And free cash flow, as defined in our earnings release, was $96.3 million as compared to $89 million in the same quarter last year. Both operating and free cash flow represented records for the second quarter of a year. The increase in cash flow was primarily due to higher operating earnings in the current year quarter, which was partially offset by a higher level of income taxes paid and capital expenditures in the current year, which included the new facility in Trenton, South Carolina. Before discussing our updated outlook for 2021, I want to comment briefly on our strong liquidity position at the end of the second quarter of 2021. In May, we amended our ABL facility, increasing its size from $300 million to $500 million and extending the maturity dates from June 2023 to May 2026, along with reducing the LIBOR spread to 100 basis points to 125 basis points, depending on availability under the revolver. As of June 30, 2021, we had $830 million of liquidity comprised of $390 million of cash on hand and $440 million of availability on the ABL revolver. Also, total debt outstanding at the end of the second quarter was $871 million net of unamortized original issue discount in deferred financing costs. Our gross debt leverage ratio at the end of the second quarter was only 1.1 times on an as-reported basis. Further enhancing this attractive capital structure is our strong cash flow profile with free cash flow over the last 12 months at $561 million, which allows us to confidently operate our business, accelerate our strategy, and further enhance shareholder value. I would now like to provide some additional details on our increased outlook for the full year 2021. As Aaron highlighted earlier, there are several areas of the business where we are performing better than expected. And as a result, we are raising our full year revenue outlook for 2021. In particular, the company continues to make better than expected progress in increasing production rates for home standby generators. And as a result, we are moderately increasing our shipment outlook for these products for full year 2021. In addition, we're experiencing stronger than expected demand for our PWRcell energy storage systems and combined with additional supply chain execution and the closing of the recent Chilicon acquisition, we're also increasing our shipment outlook for clean energy products as well. The outlook for C&I products has also improved due to a further broad-based rebound in demand, highlighted by a continued pickup in activity from telecom national account customers, overall stronger demand from international markets and the closing of the Deep Sea acquisition. As a result of these factors, we are increasing our full year 2021 net sales guidance to now be approximately 47% to 50% growth compared to the prior year, which includes approximately 3% of favorable impact from acquisitions and foreign currency. This is an increase from our previous as-reported guidance of 40% to 45% growth with the majority of the improvement being organic growth. Importantly, this guidance assumes a level of power outages for the remainder of the year in line with the long-term baseline average, consistent with our historical approach, this outlook does not assume the benefit of another major power outage event in the second half of the year. Looking at seasonality for the second half of the year, revenue is expected to increase sequentially in the third quarter as compared to the second quarter with an even higher sequential improvement anticipated for the fourth quarter, as we further scale home standby production and clean energy shipments. Updating our margin outlook for the full year 2021, we continue to experience higher input costs relative to our previous guidance due to rising commodities and significantly higher logistics costs. To address these higher input costs, we implemented additional pricing actions during the second quarter across our product lines and we continue to focus on cost reduction initiatives through our profitability enhancement program. However, given our current backlog situation, we do not expect to realize these margin enhancements until the fourth quarter and into 2022. As a result of these factors, we now expect gross margins for full year 2021 to be approximately flat as compared to the prior year, which compares to the previous expectation of an approximate 50 basis point increase. Adjusted EBITDA margins before deducting for non-controlling interest are now expected to be approximately 24.5% to 25% as compared to the previous guidance range of 24.5% and a half to 25.5%, and up from the 23.5% margin in the prior year. From a seasonality perspective, we expect adjusted EBITDA margins during the third quarter to be slightly lower relative to the second quarter, primarily due to the startup of the Trenton, South Carolina facility and higher operating expense investments. However, adjusted EBITDA margin is forecasted to improve sequentially in the fourth quarter, returning closer to the first quarter levels as a result of pricing realization, improved sales mix, favorable overhead absorption, and other margin enhancement initiatives. Several additional guidance items that we provide to assist with modeling adjusted earnings per share and free cash flow also require updating for 2021. As mentioned previously, our cash income tax rate is now expected to be approximately 21% to 21.5% for the full year 2021, which is higher than the previously expected rate of approximately 20.5% for 2021. Interest expense is not expected to be approximately $32 million assuming no additional principal payments and flat LIBOR rates for the remainder of the year. This compares to the previous guidance of approximately $34 million with the decline primarily due to a lower weighted average interest rate for the year. Our capital expenditures for 2021, as a percentage of forecasted net sales are now projected to be at the higher end of the previous guidance range of between 2.5% to 3% due to additional capacity expansion actions. GAAP intangible amortization expense for 2021 is now forecasted to be approximately $49 million to $50 million, as compared to the previous guidance of approximately $34 million to $35 million, which is due to the closing of the Deep Sea and Chilicon acquisitions and the related preliminary purchase price allocations. Stock compensation expense is now expected to be approximately $24 million, which is at the high end of the previous guidance range of between $20 million to $24 million, also due to the recent acquisitions. Finally, the following remaining miscellaneous guidance items remain unchanged. Our GAAP effective tax rate is still expected to be between 22.5% to 23.5% for the full year. Depreciation expense is still forecasted to be approximately $40 million in 2021, given our assumed capital spending guidance. Operating and free cash flow generation for the full year 2021 is expected to remain strong with the conversion of adjusted net income to free cash flow still anticipated to be approximately 90%. And our full year diluted share count is still expected to be approximately 64 million to 64.5 million shares. This concludes our prepared remarks. At this time, we'd like to open up the call for questions.

Our first question or comment comes from Mike Halloran from Baird. Your line is open.

Everyone, thanks for taking the question. So I just want to clarify the comments that were just made by York there. If I heard you right based on the timing of the capacity additions coming in, you should see acceleration in basically throughput through the facilities 3Q into 4Q. Concurrently you should see some margin normalization as the right pricing comes through, as you get a little more normalization. So is the implication there for that the jumping off point into 2022, it should be at a higher run rate relative to what you're seeing today as all of those things start normalizing out for you, or am I thinking about that wrong?

Yes. Mike, this is York. So I think, like I said in my comments, we do expect Q4 margins to return closer to Q1 levels, as Q2, Q3, we see the transitory impact of our higher input costs. So I guess to that end, Q4 looking similar to Q1, I guess that's the jumping off point into 2022, obviously need to roll up our 2022 budgets to figure out what that looks like next year. But we feel good and confident that margins will at least get back to where they were in Q1 by Q4.

Thank you. Our next question or comments come from the line of Tommy Moll from Stephens. Your line is open.

Good morning. Thanks for taking my question.

Good morning.

Good to hear you've now cut the ribbon in Trenton and are on track to hit the run rate thereby, I think you said Q2 of next year, which would reflect a doubling of capacity. So could you walk us through the operational goals you have to get from here to there? And then when you get there next year, just doing the rough math would be – would we be wrong to think about your residential revenue potential is just a doubling of the $600 million that you just put up or is that not the right way to think about it? Thank you.

Yes, Tommy; this is Aaron. The doubling is the max capacity that we would have in total for the home standby products by Q2 of next year, the doubling that we referred to, the doubling of where we're at today, once everything in Trenton is online. And again, what we're trying to do is build some surge capacity into the system, we've lost that over the last couple of years as the market's growth in home standby has outstripped our pacing of output. So, we're hoping to build some additional surge capacity, because that business needs that – they're just – the periods of growth are hallmarked by outage events and other types of things that happen in the external markets, and you have to react to that. And again, we've lost a little bit of – we've lost the ability to get some upside as a result of where we're at today. So that's what we're building out. In terms of operational kind of milestones or things that we're focused on here over the next call it nine months as we bring that facility fully online. Right now, we're in the initial startup phase, we actually were fortunate to get in there right at the beginning of the month, which was amazing, that’s four and a half months from when we took occupancy of the facility. So what our team has done there I'm incredibly proud of, they've worked very, very hard to bring that facility up. We've got about 300 and some employees in the facility today, we've just brought on a second shift. And so, what we're pacing to, is to have about 800 employees in that facility by the end of the year. And that won't get us to the doubling that we're talking about here. What gets us even further is the addition of some further manufacturing, tooling, and automation equipment that we'll be adding into the facilities in Q1 and Q2. And so, the addition of that equipment, those additional pieces of equipment is really what takes us to the full potential run rate of that facility by Q2 of next year.

Thank you. Our next question or comment comes from the line of Ross Gilardi from Bank of America. Your line is open.

Yes. Hi guys; good morning.

Good morning.

Just further on that question. I just wanted to verify, when you quote the backlog and weeks, I think you said it was still 28 weeks, which is similar to what you said last quarter. Is that apples-to-apples on the denominator? In other words, when you quoted the 28 weeks last quarter, was that based on the capacity pre-Trenton, and now you're basing on the capacity with the addition – with Trenton, or how do we think about that? What is the 28 weeks actually based on? We've written in our notes that we think the backlog is closer to $1 billion in dollar terms, and just trying to get a sense if that is still directionally in the right ballpark.

Yes. Ross, the way to think about that is, the quoted lead time would be the lead time today, right. So when we gave that update on the last earnings call, we were quoting it based off of what our expected production rate was going to be in the future. And that's how that's – and based on order volume and the quantum of the backlog, you noted there in your question. That all goes into calculating the backlog. So when we're giving that update again this quarter, and the fact that it hasn't changed, but yet we have higher production levels in the future. We've also, as we indicated in the prepared remarks, we've been experiencing higher incoming order rates. So, that kind of matches up with the higher expected production at this stage. Now, what remains to be seen as we've said throughout is kind of how the season plays out. In terms of hurricanes, in terms of power safety shutoffs around, potential for wildfires out West and in other parts of the country, our guidance doesn't contemplate any of that in there. Now we're not guiding lead times, but what would happen mathematically is, as the order rate – as the output, - excuse me, as the production rate kind of outstrips your rate over time, the lead times would come in. We're still expecting a considerable backlog at this point by the end of the year. I don't know what that exactly will translate to in terms of lead time, because we need to understand what the order rate is at that point and also where we're at on the output levels and how we're thinking about our ability to hit that doubling that we've talked about by Q2. So it's a – there is a lot of math that goes into it. And then there is a bit of a forecast as well, obviously on where we think things are going. But at this stage, the demand has been incredibly robust, we've said this in the prepared remarks as well, we’re here early in the third quarter in July. Our IHCs are home consultation sales leads for home standby are up again on very difficult comps compared to last year. So, I mean, it's just – it continues to amaze us the interest level in the category and how that's translating into real demand. So we're encouraged that that's very supportive of where we're going with the category in terms of our expanded capacity. We think we're going to be in good shape for that. And then again, as I said, we'll let the season play out here to see how kind of things shape up as we exit 2021 and go into 2022.

Thank you. Our next question or comment comes from the line of Philip Shen from ROTH Capital. Your line is open.

Hey guys, thanks for taking the questions. To what degree are you guys considering yet another round of capacity expansion, Q2 2022 is – it's not right around the corner, but you have such visibility into the business now that arguably at some level maybe that's not enough. Do you think beyond Trenton, there is either more expansion there or maybe some more in Wisconsin or in yet another location altogether?

Yes. It’s a good question, Phil. And one obviously we watch – we're watching very closely, mainly on the context that we were – we've been unable – largely unable to get ahead of demand with our output, and that's why we've gone very heavy here with the Trenton investment. And essentially what's going to amount to a quadrupling of our output, potentially a quadrupling of our output by Q2 of next year versus where we kind of came into the year last year as a baseline, if you want to use that as a baseline. In terms of like adding additional capacity, I think a lot of that for us is going to come down to what kind of a season plays out this fall. I think we feel pretty good about – and remember capacity is not just about getting a building and equipment and hiring people, it's about the supply chain to support that. So today, we're actually – and this is a process we've gone through pretty rigorously over the last several years, as we're constantly sizing the supply chain to be greater than our ability to produce. So we're oversizing the supply chain, because it takes longer to get your supply chain to grow. It's a longer – a lot of times you're looking for secondary or even tertiary sources, you have to qualify – if not only find those source, you have to qualify them and get them ramped. And that generally takes longer, as I said, it took us four and a half months to get into – get the building, get in there and get it ready to run and get it producing product. And, while it's not producing at the top rate that we expected at this point, we’re there, it's kind of – the startups getting behind us here and we're growing, but really the supply chain. So we're sizing the supply chain actually larger than that point in Q2 of next year. And so, if we see a really strong season this fall and surges in demand off of that, we could react, we do have some room to expand in Trenton that facility that the area there that we acquired is expandable to about 2.5 times its size, if we chose to do that. We'd have to analyze whether or not that made sense, or if maybe more of the growth is out west, it really kind of depends, it might make more sense to have a facility located closer to wherever we see the demand growth. So we're going to watch it very closely. We're going to react very quickly. And I think we're going to be in pretty good shape given the expansion in our own capacity by Q2, and then also the supply chain expansion that we've been working on.

Thank you. Our next question or comment comes from the line of Brian Drab from William Blair. Your line is open.

Good morning. I’m just – we’re going to ask a question about the Chilicon acquisition. And can you comment on what sort of demand were you seeing from channel partners for you to carry the product line that Chilicon enables? And is there a potential to see step function increase in the shipments and revenue for the PWRcell business in general, just by opening up new channel relationships? And then do you have the capacity at Chilicon to serve all of it? Thanks.

Yes. Let me try to unpack some of that, Brian, because it’s a really good question. Chilicon is a – we're very excited about this acquisition. It's a small company, basically a startup today, really like the technology, really like what they've done with the product line in its early stages. We've got work to do to scale it, of course. Today it's a contract manufacturer here in the U.S., we think that we can – again, as we stated in our prepared remarks, we kind of put a playbook together here for our approach to this, with what we did with Pika. Recall that, Pika was also a startup pretty nascent; the demand was – it was a very small company, and here we’re turning it into just an amazing growth engine for us going forward. We think Chilicon is going to be all of that. I mean, the reason we went after this, we love storage and we think storage fits really, really well with our approach to the market from a resiliency standpoint in particular. But remember, you're only talking about attachment rates to new solar of 20% to 25%. So, in effect, as we try and develop channel partners, and as we try and develop our brand in this market, we're not participating in 75% to 80% of what goes on in the market on the solar-only side. So the acquisition of Chilicon is really a way for us to continue to build out what we're referring to it internally as a supermarket. I think in our prepared remarks, we said an ecosystem of products with this suite of products, but this is truly a supermarket approach. We want to have a really broad product offering here from the microinverters themselves all the way through to the storage pieces to our power generation assets that have been also well received by the solar channel – the channel partners there. So in terms of step function change to answer your question directly, more to come on that, we've got an Investor Day here at the end of September, we are going to be debuting these products at the Solar Power International show down in New Orleans in mid-September. Our first kind of area of focus here is to take the existing Chilicon product. And in order to scale it, there are some things we have to do to it, there are some design for manufacturability considerations alongside the development of the supply chain. We really intend to launch kind of a branded Generac portion of Generac Solutions, if you will of the kind of existing Chilicon technology, sometime in really early Q2 of next year. And I think that's when you would see, and we would expect to see some inflection. Much the same, again, it's like Pika, it took us a good six months by the end of the year. We bought that – we bought Pika, I think it was in April or May of 2019. And it took us till really the beginning of 2020 before we were in the market with a Generac branded solution there. Kind of a similar again, similar playbook and a similar approach here. But I think that the result, I mean, look, the served market that we've basically acquired here, I mean, it's massive. I mean, it's a huge market that's dominated by two players. And everybody, at least in the U.S. and every particular channel partner that we've talked to in the solar side has told us that there's room for more competition. We're excited to hear that. We think that competition should have a Generac brand on it. We think we're going to be able to use a lot of the things that we've done to be successful in the short time we've been involved in this market with Pika and Neurio, we think we're going to be able to replicate that success very quickly with Chilicon so pretty exciting stuff ahead.

Thank you. Our next question or comment comes from the line of Joseph Osha from Guggenheim. Your line is open.

Good morning, guys. Just wondering if we can return to PWRcell a little bit, you've given us some comments about this year, but I'm wondering as we sort of exit the year into 2022, if you can talk a little bit about the run rate you hope to achieve. Thanks.

Yes. No, I think as we said in our prepared remarks, we upped our guidance to basically we're looking to double that business here in 2021 relative to 2020. So I think we've publicly said, we did about $115 million of sales last year, looking to double that here in 2021. And sequentially, that's going to ramp from Q2 to Q3 and then again, into Q4 so that we're looking to successively ramp our output of those products over the quarters here and really in the next year, that's the expectation the market's there, the demands there. We've said publicly that the demand is outstripping our supply and that's what we're working on right now to ramp up in 2022.

And Joe, I would just add to that we look at other people in this, they're serving this market and there's some fairly high-profile players that are – they're constrained on supply as well. And maybe even – I would say maybe even more so than where we're at. I mean, we – just in the second quarter, our growth in the category, York was 500% over the prior year. So, I mean, that is a – we're ripping higher with that product category. And we're looking for big things as we exit this year and going into 2022. I think, again, you combine that and my previous remarks around Chilicon and you put that all together. I think we're incredibly bullish about the future with clean energy, in terms of not only the size of the TAM and the speed at which it's growing, but when you think about storage, the speed at which attachments are growing as well. I mean, their forecast for solar alone to grow 40%, 50% next year. Attachment rates are going to grow, maybe 30% next year from the 20 to 25 they're at this year, you put all that together. And for us, it's – as York said, demand is outstripping supply. So we're really scrambling to add additional supply so that we can satisfy that increase that is coming at us here. So a lot of effort being put on that internally and with our supply chain. And I feel like what we're building there is something that's going to be really exciting in the future.

Thank you. Our next question or comment comes from the line of Mark Strouse from J.P. Morgan. Your line is open.

Yes. Good morning. Thanks for taking our questions. York, I just wanted to go back to the guidance, please. So understand the EBITDA dollar outlook is increasing, the margin goes down just a tad though. I'm wondering if you could break down that between input costs versus just mix. It sounds to me like C&I might be a bit stronger than you were expecting. And then just quick follow-up, sorry, just to not to steal your thunder from the analyst day, but do you intend to update your long-term targets relatively soon?

Yes. To your point, we're looking to schedule an analyst day at the end of September, and that's when we would be updating our long-term targets. So appreciate the ability to get that out there. Relative – that the EBITDA margin bridge versus previous guidance you're right. It only takes down at the mid of the range. It's only about a 25 basis points moderation there. And there are some moving points inside there. So you're right about the cost bucket, the higher input costs probably did have a lot of 1% impact on that guidance change, but we were able to given the volume leverage on the higher sales volume as you're talking about, that's probably bought back about 50 basis points of that 1%. And then from an M&A and mix standpoint, maybe there's another 25 basis points that you're clawing back. So those were good guys offsetting the input cost, bad guy. And so net-net, we just believe that there's going to be some moderation once you get through the reality of steel costs that have really gone up a lot since our last call, our last guidance. And so has logistics costs, just the cost of 40-foot containers are up four times, in that window here. So just battling through that and the good news is we've got some price increases out there and when we start realizing those in Q4, we start ramping up and absorbing Trenton, South Carolina more and just the better mix when you ship more home standby, coupled with some other cost reduction efforts we're working on. That's why we just, we feel confident that we're going to be able to bring our gross margins back up in Q4.

Thank you. Our next question or comment comes from the line of Christopher Glynn from Oppenheimer. Your line is open.

Thanks. Good morning.

Good morning.

So I think in the cash flow statement showed $419 million in acquisitions. Wanted to unpack that a little bit, I don't know if the funding of Chilicon put forward into the second quarter, despite the early July close and I don't know if they're ready earnouts and any prior deals, but I just want to kind of unpack that. And maybe I think you give commentary on Deep Sea being or one of them being sort of a startup wondering if the other one has more run rate business entering Generac.

Yes, so the cash flow statement predominantly, all of that was in fact Deep Sea; Chilicon did close in July, so that's a Q3 event. But Deep Sea, you're right. That's an established business that's been around for a real long time, well-known in the power generation industry in terms of advanced controls and global business. We've talked about how it looks a little bit like acquisitions we've done in the past with that it’s – we’re in that $50 million to $100 million range of established business. What was very different about Deep Sea though, is that their margin profile is much higher than what we've acquired in the past. In fact, it's actually much higher than our corporate average here of 24.5% to 25%. So that acquisition actually will be accretive from a margin standpoint. And we really like what that business is going to do for us.

Thank you. Our next question or comment from the line of Jeff Hammond from KeyBanc Capital. Your line is open.

Hey guys. Just two final point questions. One, if you can quantify the startup costs, you're heading to 2Q and what do you think that's going to be into the second half? And then just you mentioned the portable, kind of being held back by supply chain. I was just wondering what unique about the portable dynamic that held that back. Thanks.

Yes, I think the startup question, I think is specifically around the Trenton facility, there was some small startup costs in Q2 where there are going to be, a rough, a more site startup costs in Q3, which again is part of the weighing down of margins here in Q3. But it's not huge, if it's a few million, 5 million, that would be a lot, but there will be some startup costs in Q3, more so than there were in Q2.

And then Jeff on the portables, the comment there. So interestingly enough, there's kind of a little bit of a something going on there in the portable industry. Many of the large customers are requesting or even mandating carbon monoxide shutoff technology be put on all portable generators. So large DIY retail chains have done that, which has created a bit of a challenge around – the technology itself is, as you can imagine, with a semiconductor limited supply, there's more technology there onboard a portable generator than would traditionally have been involved. So that created a problem with the supply chain. We're working through it effectively what's going to happen is we weren't able to fill a channel to the level that the channel wanted nor that we wanted here in Q2, when we would normally do that ahead of the season. So, we do have a lot of those products hopefully coming at us here in the third quarter. And I think the idea would be, there may be more opportunity if the season plays out, if the season plays out strongly, we'll have to see how that works. Again, our guidance doesn't contemplate that at this point, because we don't have any major outage events in our guide, but it's really kind of a unique thing with those product lines.

Thank you. Our next question or comment comes from the line of J.B. Lowe from Citi. Your line is open.

Hey good morning, Aaron, York and Mike. Just want to follow up on the cost aspect of the guide. What does the – what is the new margin guide contemplate in terms of what the costs will do from here, both on commodities and logistics? And then I guess on the pricing increases, is any of that net pricing or is it all just gross pass-through?

So yes, in terms of like our assumption on steel, copper, aluminum, we effectively assume that it flat lines from where we're at today. And same with logistics costs maybe go up a little bit more because we're seeing that currently as we're bringing product in the door, what was the second question? I'm sorry. I missed the second question. It was – yes. We can circle back with JB on that one.

Our next question or comment comes from the line of Pearce Hammond from Piper Sandler. Your line is open.

Good morning. I'm just curious how you see the relationship between the PWRcell product and home standby generators. Do they compete with one another or are they complementary? Just want to understand how the growth in that PWRcell business could impact home standby generators. Thank you.

Yes, that's a great question, Pearce. At this stage of the game, they're actually very complementary. What we're finding is that the person who buys a home standby generator is worried about long duration outages. So multi-day events that the kind you typically see during a hurricane or an ice storm or what you saw in Texas over that winter event or even some of the power safety shutoffs that have been multiple days in length as much as we love the storage category today, the technology from a performance and cost standpoint are just not competitive with long duration outage protection that you can get from an engine-driven genset. Where storage has been largely coming in and coming on strong, it's for somebody who's really already contemplating a solar system. So they're going to be able to generate their own power on the rooftop. And they want to store that power for use at a later time, either because they can sell it advantageously back to the utility or grid operator at a point in time when rates are higher during the day and gain that arbitrage between their cost to produce versus their cost to sale. Or they want some limited outage protection. Certainly, resiliency is a piece of what people are looking at in the storage market. But we would just – as we've continued to say throughout, each of those kinds of markets, the home standby market and the storage market are kind of concentric circles. And there's a bit of overlap, of course, and over time as storage technology continues to improve and as the cost continues to come down, it's possible that you could use storage products for long-duration outage, but it's got a long way to go before it gets to that point on a cost-effective basis. So in fact, we actually see quite a few customers that who have a solar system and they have the storage device. They also want to add a generator for the long-duration protection. So they have the short-duration protection with the battery product and also the ability to arbitrage on rate, help them save some money on their power bills. But then they want to have a generator also for long-duration outage protection. So we have customers that have all of the products actually. So it’s very interesting to watch how the market develops, but at least at this stage, that they seem to be very complementary to one another.

Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Mike Harris for any closing remarks.

We want to thank everyone for joining us this morning. We look forward to discussing our third quarter 2021 earnings results with you in late October. Thank you again and goodbye.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.