Good day, and thank you for standing by. Welcome to the Fourth Quarter and Full Year 2021 Generac Holdings Inc. Earnings Call. Operator provided instructions. I would now like to hand the conference over to your host today, Michael Harris, VP Corporate Development and Investor Relations. You may begin.

Good morning, and welcome to our fourth quarter and full year 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 results to differ materially from 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. The fourth quarter was a great finish to an outstanding 2021 for Generac, with all-time record performance for both the quarter and the full year for net sales, adjusted EBITDA and adjusted EPS as we achieved record quarterly production levels and continued to experience exceptional demand for our products and our solutions. Additionally, we completed the strategic acquisition of ecobee during the quarter, which represents a major step forward in our efforts to provide a broader residential energy ecosystem that includes intelligent monitoring and management solutions as well as an increasingly sophisticated user interface platform. Fourth quarter revenue was well ahead of our expectations, driven by higher shipments of home standby generators as build rates for the quarter exceeded our plan due to strong operational execution. Shipments of C&I products also outperformed expectations during the quarter, with broad-based strength continuing across all channels and regions. Despite the substantial increase in production levels, our backlog continued to grow in the fourth quarter across the business, highlighted by home standby generators, providing us with substantial visibility into 2022 being another year of exceptional revenue growth. Year-over-year, overall net sales for the fourth quarter increased 40% to $1.07 billion, an all-time record, and also increased sequentially over the third quarter, which was the previous all-time record. Notably, fourth quarter core sales growth of 35% accelerated relative to the third quarter's core growth rate of 30%, highlighting our strong execution and the progress we continue to make in ramping capacity despite ongoing supply chain challenges. Growth in the quarter was broad-based with both residential and C&I products growing at a low 40% rate compared to the year-ago period. Residential sales growth was once again driven by a substantial increase in home standby generator shipments and continued momentum in power cell energy storage shipments as well as the impact from recent acquisitions. The C&I sales increase was led by our telecom and mobile channels domestically, growth across all major regions internationally and the contribution from recent acquisitions. Adjusted EBITDA margins of 20.7% were lower year-over-year as it reflected the impact of higher input costs, driven by ongoing supply chain challenges and the overall inflationary environment as well as the impact of additional operating expense from acquisitions. Partially offsetting these cost headwinds were the initial impact of multiple pricing actions implemented over the past year. And we expect even greater realization of these price increases, along with cost-reduction initiatives and other favorable margin impacts as 2022 progresses. Before discussing our fourth quarter results in more detail, I want to provide some full year 2021 financial highlights as well as share some key accomplishments that we achieved during the year. First and foremost, I want to thank our team of over 9,500 employees globally for their hard work and perseverance throughout an incredibly challenging operating environment in 2021. Our teams have helped us successfully navigate the pandemic while still providing an incredible level of service to our customers and our partners around the world. The hyperscale growth that we are experiencing is a reflection of their commitment to the execution of our strategy and their dedication to our success. As a result of our team's collective efforts, Generac achieved another year of record revenue, adjusted EBITDA and adjusted EPS in 2021, far exceeding the previous record levels seen last year. In fact, revenue increased by approximately $1.3 billion, representing 50% growth year-over-year and marking the highest annual growth rate in our history as a public company. This performance came on top of very strong revenue growth over the 3 previous years that averaged in the mid-teens and was highlighted by tremendous growth in home standby generator shipments and approximate doubling of clean energy revenue and strong and broad-based growth in our global C&I products. Adjusted EBITDA for the full year was $861 million, with a very strong adjusted EBITDA margin of 23.1% that was similar to the prior year despite a variety of supply chain challenges, considerable inflationary headwinds and significant investments for future growth. In the third quarter of 2021, we achieved an important milestone by starting production of home standby generators at our newest facility in Trenton, South Carolina. And we continue to make excellent progress in ramping production levels at this new facility as well as at our existing facilities in Wisconsin. Additionally, the further build-out of our clean energy market opportunity was a key highlight during the year as we significantly grew shipments of our power cell energy storage systems through the expansion of our supply chain, increased targeted marketing efforts, growth in our distribution network and the introduction of several exciting new products. We also broadened our Energy Technology Solutions portfolio with several strategic acquisitions, highlighted by Deep Sea Electronics, Chilicon Power, Apricity Code, Off Grid Energy, Tank Utility and ecobee. 2021 was also a heavy year of new products as we introduced our market-leading 26-kilowatt home standby generator, our Generac branded microinverter that we call PWRmicro, the industry's first dedicated engine-driven battery charging system we call PWRgenerator and our innovative PWRmanager load control device. We also introduced a host of new C&I products this year, including a hybrid mobile power solution pairing a mobile energy storage system with a traditional mobile generator, a mobile battery-powered light tower and our first C&I battery storage system for the North American market through the Off Grid acquisition. We also announced smart grid ready capabilities for all our home standby generators, power cell energy storage systems and our natural gas C&I generators. Smart grid ready technology is important to advancing our turnkey approach to grid services and enabling these products to be utilized in programs that provide grid resiliency and an incremental ROI for the asset owner. Finally, during our 2021 Investor Day last September, we debuted our new enterprise strategy we call Powering a Smarter World, which focuses on improving energy resilience and independence, optimizing energy efficiency and consumption, and protecting and building critical infrastructure. We also published our inaugural environmental, social and governance report, highlighting the alignment of our new strategy to key ESG-related external frameworks and standards. These accomplishments provide us considerable momentum as we head into 2022. The guidance we are initiating today is for another year of significant revenue growth between 32% and 36%, which is expected to be driven by further increases in home standby production throughout the year, strong growth in clean energy markets, continued broad-based global demand for C&I products and contributions from recent acquisitions. Notably, this full year 2022 guidance projects an approximate doubling of Generac's revenue as compared to 2020 levels, with organic growth accounting for the vast majority of the increase. In addition to the significant top line growth, we expect to maintain attractive margins while continuing to make aggressive investments in next-generation energy technology solutions. We credit these accomplishments to the agility and dedication of the Generac team as we overcome short-term operational challenges and remain focused on our long-term purpose of leading the evolution to more resilient, efficient and sustainable energy solutions. Now discussing our fourth quarter results in more detail. Demand for home standby generators in the fourth quarter continued to benefit from important megatrends, which further expanded consumer awareness of the category. The Home as a Sanctuary trend remains a key driver of demand, along with the impacts of more extreme weather resulting in elevated power outage activity over the past several quarters, including 3 major outages over the past 18 months. The combination of these factors, along with broader electrification trends, continues to drive incredibly strong demand for home standby generators. As a result, home consultations or sales leads increased again in the fourth quarter over the robust prior year comparison and for the year grew at a strong double-digit rate, and we're nearly 4x the full year 2019 levels. Activations of home standby generators, which are a proxy for installations, also grew at a significant rate compared to the prior year. And our distribution footprint ended the fourth quarter with 8,100 residential dealers, an increase of approximately 800 dealers over the last 12 months. As we have discussed, we continue to make encouraging progress increasing production levels for home standby generators, most notably at our new facility in Trenton, South Carolina, as daily build rates at all our facilities were dramatically higher when compared to prior year levels. Build rates also grew sequentially as we added a new production line at both the Trenton and Jefferson, Wisconsin facilities during the quarter. As a result of the higher output levels, lead times have declined by approximately 4 to 5 weeks from 32 weeks at the end of the third quarter. However, home standby order rates have remained very strong, leading to a further increase in our backlog, which currently is still well over $1 billion and provides excellent visibility into 2022 revenue growth. Output levels are projected to increase further throughout the year as additional capacity comes online. However, demand has remained strong. And although we expect to exit the year with improved lead times, we anticipate that we will still end 2022 with a significant backlog for home standby generators. Many of the same factors underpinning tremendous demand for home standby generators, along with the increasing penetration of solar installations, are also helping drive rapid growth for our clean energy products. As previously mentioned, shipments of our PWRcell energy storage systems grew significantly in the quarter as compared to the prior year and also grew at a strong double-digit rate sequentially. Despite industry-wide supply chain and logistics challenges impacting our clean energy solutions, full year 2021 clean energy-related revenue approximately doubled as end-user demand remains robust for our PWRcell energy storage systems. In addition to strong revenue growth, key performance indicators for clean energy products continued to show favorable trends in the fourth quarter. Home consultation and system activations both increased at a strong rate over the prior year and also increased sequentially. In addition, we further built out our clean energy installer network as we ended the fourth quarter with nearly 2,500 trained and certified dealers with approximately 1,000 dealers registered on our PowerPlay sales platform. The solar plus storage market continues to expand rapidly, and we expect to see significant year-over-year growth again during 2022. Shipments of PWRcell energy storage systems are anticipated to increase substantially during the year. And we expect clean energy revenues to grow aggressively as compared to the 2021 levels. We're also very excited about beginning shipments of the previously mentioned new product introductions for clean energy, which are expected to contribute incrementally in 2022. This includes our new PV microinverter product offering called PWRmicro, with shipments expected to begin toward the end of the second quarter and ramping further during the second half of the year. A key component of future growth for our clean energy offerings is establishing and developing our distribution network, including partnering with large national solar providers. We recently announced an expansion of our partnership with Sunnova that adds even more of Generac's industry-leading technology to its current suite of offerings. In addition to energy storage systems, Sunnova customers will now have access to the industry's only fully integrated lineup of home standby generators, microinverters and load control devices delivered from a single equipment provider. The scope of the new agreement includes integrating both companies' software platforms, enabling the joint participation in grid services programs across the U.S. Additionally, Sunnova's consumer-friendly financing solution will now be made available to Generac's certified dealers for all their customers' financing needs, including home standby generators. We're very excited about our expanded partnership as it grows distribution capacity for our residential products, increases financing opportunities for potential home standby customers and facilitate additional growth in grid services. I'd now like to provide an update on the ecobee acquisition, which closed in December and which helps to accelerate Generac's evolution into an energy technology company. We believe we can leverage ecobee's existing technology and capabilities to develop a home energy management platform, which will be core to our growing residential energy ecosystem of the future that benefits both homeowners and grid operators. This platform will enable homeowners to make smarter energy production, storage and consumption decisions while also integrating with our Concerto software platform to provide grid operators more efficient access to a home's distributed energy resources. Importantly, while still very early, we are already starting to see near-term commercial synergies from the acquisition as the initial integration with our existing commercial sales channels has been encouraging, including expansion into Generac's residential and clean energy dealer networks as well as key retail relationships. In addition, ecobee has a sizable dedicated sales team directly engaging utilities and grid operators with their ecobee energy program, which is aimed at developing demand response and load control opportunities. Our Generac Grid Services team has begun working closely with this group to coordinate and expand these efforts to develop our sales pipeline together by leveraging ecobee's more than 2 million connected homes as a valuable installed base of potential distributed energy resources. I'd also like to provide a further update on Generac Grid Services, a group recently formed within the company that builds upon our October 2020 acquisition of Enbala. Generac Grid Services has been making excellent progress in expanding its sales pipeline, including meaningful opportunities beyond traditional software-as-a-service contracts. The fourth quarter saw significant progress in new deals closed and in the final stages of negotiation, increasing our top line visibility for 2022. The Grid Services team continues to integrate Generac's products and solutions into the Concerto software platform, with the resulting hardware cross-selling opportunities expanding the sales funnel even further. We believe this creates a unique advantage for Generac in the market for grid services, given our increasingly unmatched set of energy technology assets and industry-leading DERMS platform, helping us to maintain momentum with utilities, grid operators and energy retailers while raising our profile with key decision makers in the utility industry. We also recently announced a key win for Generac Grid Services to build virtual power plants, or VPPs, by recruiting and enrolling Generac solar PV and battery storage system owners for Southern California Edison's PowerFlex program. This initiative gives SoCal Edison's residential customers the opportunity to earn incentives by allowing some of their carbon-free electricity stored in their PWRcell energy storage systems to be dispatched for grid stability purposes. Public sector support for grid services opportunities has been increasing, highlighted by the numerous programs within the recently passed Infrastructure Investment and Jobs Act that target grid flexibility and resilience and encourage utilities and grid operators to develop and manage virtual power plants using distributed energy resources. Now let me make some comments on our C&I business, which grew rapidly in the fourth quarter as key end markets and geographies continued to recover off the softer prior year impacted by the pandemic. Global C&I product sales increased 43% on an as-reported basis compared to the prior year and 30% on a core basis, which was well above 2019 levels during the quarter. Our domestic C&I products saw growth across all channels in the fourth quarter, led by national telecom and rental equipment customers. We also have a record backlog for C&I products, which increased further during the fourth quarter and has continued to build here in the first quarter, providing good visibility for another year of meaningful growth in 2022. Shipments of C&I stationary generators through our North American distributor channel grew again at a solid rate. And the channel continued to experience strong quoting and order activity along with improving close rates and market share gains in the quarter. We're also experiencing strong growth with our Energy Systems industrial distributor business in Northern California that we acquired in 2020 as our investments and overall increased focus in this important backup power market are producing excellent results. In working to build on this success, in the fourth quarter, we acquired the Power Generation Group of Papé Material Handling, our industrial distributor based in Southern California, further expanding our presence in the large and growing West Coast market. Shipments to telecom national account customers increased dramatically again during the fourth quarter as compared to the prior year, benefiting from elevated levels of capital spending by several of our larger telecom customers. The catalyst for the investment in backup power in this important vertical continues to be driven by an elevated power outage environment, the power security mandate in California requiring a minimum of 72 hours of backup power and the build-out of 5G networks. The long-term demand outlook for backup power in the telecom sector remains very compelling, driven by the increasingly critical nature of wireless communications. We also experienced very strong growth with our national rental equipment customers as shipments of mobile products continued to recover at a significant rate off the pandemic-driven lows of 2020. These customers are investing heavily in fleet equipment, and we remain optimistic about the long-term demand outlook for mobile products given the megatrend around the critical need for infrastructure improvements. We expect that the Infrastructure Investment and Jobs Act passed in late 2021 will support a higher level of capital spending by rental equipment companies over the next several years. Additionally, we're experiencing ongoing strength in project quoting and improved close rates for our natural gas generators used in applications beyond traditional emergency standby power generation, such as their use in Energy as a Service, microgrid solutions and other distributed generation projects. Order rates for generators used in these applications increased dramatically during the full year 2021. We believe the increased interest in these products is being driven by the need for enhanced resiliency and grid stability that these large blocks of power offer for grid operators while simultaneously providing a tangible and meaningful return on investment for the asset owners. Internationally, we continue to see strong momentum as well with shipments increasing 47% year-over-year on an as-reported basis during the fourth quarter, with 26% core net sales growth when excluding the benefit of the Deep Sea and Off Grid Energy acquisitions and the impact of foreign currency. The core sales growth was driven by strength across all major regions and has recovered well above the levels from 2019. Overall, quoting and order activity continued to accelerate at a strong pace in key international markets in the fourth quarter, driving growth in the international backlog and higher visibility for 2022. We have also seen a growing interest in home standby generators in certain international markets, highlighting the potential for the product category's addressable market to grow significantly beyond the still underpenetrated U.S. market. Cleaner burning natural gas C&I generators are also experiencing positive momentum internationally as we work to educate the global market on the benefits of natural gas fuel generators over their traditional diesel solutions. The International segment's fourth quarter EBITDA margin expanded to 13.9% from 6.8% in the year-ago period due to the accretive margin profiles of the Deep Sea and Off Grid Energy acquisitions, improved overhead absorption on higher volumes and realization from pricing actions, which were implemented throughout 2021. The integrations of the Deep Sea and Off Grid Energy acquisitions are progressing well as we continue expanding the reach of their energy technology solutions through our global distribution channels. Off Grid has seen very strong market interest for its mobile energy storage systems in new regions and with legacy Generac customers. And we are very excited to bring this innovative battery storage solution to the North American equipment rental market in 2022. The Deep Sea acquisition has substantially expanded our global controls and electronics engineering teams and provides important capabilities that are core to the growth of our portfolio of grid-connected Energy as a Service and microgrid solutions. In closing today, 2021 was a year of tremendous progress for Generac as we significantly expanded our capacity and further accelerated our evolution to an energy technology company with a number of key strategic investments across product categories and regions. We believe this growth has resulted in market share gains in every part of our business during 2021. And I'm extremely proud of the hard work of our teams to achieve such strong results despite the incredibly challenging operating environment. As we look forward, we believe we are just getting started on our newly introduced Powering a Smarter World enterprise strategy. Through the combination of aggressive organic investment and strategic acquisitions, we have built a portfolio of power generation and storage systems, monitoring and management devices, and platform and controls capabilities that provide for resiliency as well as participation in grid services programs, thereby creating enormous value for an increasingly broad range of stakeholders. With these solutions, in tandem with our services, our distribution, our brand and importantly, our expertise, Generac is uniquely positioned to be a leader in the ongoing modernization and evolution of our electrical grid to be more flexible, cleaner and smarter. I now want to turn the call over to York to provide some additional details on our fourth quarter and full year 2021 results and our new outlook for 2022. York?

Thanks, Aaron. Looking at fourth quarter and full year 2021 results in more detail. Net sales increased 40% to $1.07 billion during the fourth quarter of 2021, an all-time record as compared to $761 million in the prior year fourth quarter. The combination of contributions from the Deep Sea, Chilicon, Off Grid, Tank Utility and ecobee acquisitions and the unfavorable impact from foreign currency had an approximate 5% impact on revenue growth during the quarter. Net sales for the full year 2021 increased 50% to approximately $3.74 billion, also an all-time record for the company. Briefly looking at consolidated net sales for the fourth quarter by product class. Residential product sales grew to $706 million as compared to $499 million in the prior year, representing a 42% increase despite a strong prior year comparable. Contributions from the ecobee and Chilicon acquisitions and the impact of foreign currency contributed approximately 2% of revenue growth for the quarter. Home standby generator sales made up of the majority of the residential product growth, increasing by approximately 50% over the prior year as we continue to make significant progress in expanding production capacity for these products despite the challenging supply chain environment. Shipments of PWRcell energy storage systems also grew at a significant rate as compared to the prior year as overall solar market growth, rising storage attachment rates and our expanding distribution continue to drive growth for our clean energy solutions. An increase in shipments of portable generators and shore products also contributed to growth in the quarter. Commercial and industrial product net sales for the fourth quarter of 2021 increased 43% to $284 million as compared to $199 million in the prior year quarter. Contributions from the Deep Sea and Off Grid acquisitions and the unfavorable impact of foreign currency had a combined impact of approximately 13% on net sales growth during the quarter. The very strong core revenue growth was driven by an impressive growth across all domestic C&I channels in all major regions internationally. While this growth rate was aided by the softer prior comparison impacted by the COVID-19 pandemic, our C&I revenue was up approximately 19% on a core basis as compared to 2019 levels, which highlights the strong demand that we are seeing across most C&I markets. Domestically, the C&I growth was driven by a significant increase in shipments to telecom national account customers resulting from the much higher capital spending as these customers continue to harden their wireless networks. We also experienced strong growth in mobile product shipments to our rental channel customers as they continue to invest in their fleets, given strength in their end markets. Also contributing to the increase was solid growth with our industrial distributors as well as higher shipments of natural gas generators used in beyond-standby applications. Internationally, the increase in C&I products was broad-based from a geographic standpoint, with growth in all major regions as global C&I markets continue to experience a sharp increase in demand off the softer prior comparison impacted by COVID and had recovered well above 2019 levels. Net sales for other products and services increased 21% to $77 million as compared to $64 million in the fourth quarter of 2020, recall this service category is primarily made up of aftermarket service parts, product accessories, extended warranty revenue, remote monitoring and grid services subscription revenue and other service offerings. Contributions from the ecobee and Tank Utility acquisitions and the impact of foreign currency contributed approximately 4% of revenue growth during the quarter. Strength in aftermarket service parts continues to be a core driver of sales growth in the category as heightened power outage activity and a larger installed base is driving increased demand. We're also experiencing higher levels of extended warranty revenue on a larger and growing base of extended warranty contracts. Also contributing to the increase were higher levels of remote monitoring and grid services subscription revenue as well as increases in other services. Gross profit margin was 34% compared to 39.4% in the prior year fourth quarter as the challenging supply chain and overall inflationary environment drove input costs significantly higher during the quarter. Specifically, the lagging impact of rising steel prices, inbound logistics costs and labor rates, along with the Trenton plant start-up, all pressured margins in the current year quarter. The early realization of initial pricing actions partially offset these margin pressures. Importantly, our backlog as of the end of the year contains multiple rounds of additional price actions that will be increasingly realized in the coming quarters. Operating expenses increased $58 million or 44.8% as compared to the fourth quarter of 2020, but declined approximately 100 basis points as a percentage of revenue, excluding intangible amortization and transaction-related costs. The overall increase in OpEx dollars was primarily driven by the impact of acquisitions, and related transaction costs, higher employee and marketing spend, additional variable expenses from the significant increase in sales volumes and increased amortization expense. Adjusted EBITDA before deducting for noncontrolling interest, as defined in our earnings release, was an all-time record of $220 million or 20.7% of net sales in the fourth quarter as compared to $196 million or 25.7% of net sales in the prior year. For the full year 2021, adjusted EBITDA before deducting for noncontrolling interests came in at an all-time record of $861 million, resulting in a strong 23.1% margin that was similar to the 23.5% margin in the prior year despite the challenging operating environment and acquisitions that impacted margins during 2021. I will now briefly discuss financial results for our two reporting segments. Domestic segment sales increased 39% to $896 million in the quarter as compared to $645 million in the prior year, with the impact of acquisitions contributing approximately 2% of the revenue growth for the quarter. Adjusted EBITDA for the segment was $197 million, representing a 21.9% margin as compared to $188 million in the prior year or 29.1% of net sales. The lower domestic EBITDA margin in the quarter was primarily due to the significantly higher input costs and the impact of acquisitions, partially offset by the early realization of pricing actions implemented throughout the year. For the full year 2021, Domestic segment sales increased 52% over the prior year to $3.16 billion. Adjusted EBITDA margins for the segment were 25.1% compared to 27.0% in the prior year. International segment sales increased 47% to $171 million in the quarter as compared to $116 million in the prior year quarter. Core sales, which excludes the impact of acquisitions and currency, increased approximately 26% compared to the prior year. Adjusted EBITDA for the segment before deducting for noncontrolling interest was $23.7 million or 13.9% of net sales as compared to $7.8 million or 6.8% of net sales in the prior year. The significant expansion in international EBITDA margins was primarily due to strong margin contributions from the Deep Sea and Off Grid Energy acquisitions, improved overhead absorption and operating leverage as well as the impact of pricing actions. For the full year 2021, International segment sales increased 45% over the prior year to $573 million. Adjusted EBITDA margins for the segment before deducting for noncontrolling interests were 11.5% of net sales during 2021, a 640 basis point increase compared to the 5.1% margin in the prior year. Now switching back to our financial performance for the fourth quarter of 2021 on a consolidated basis. As disclosed in our earnings release, GAAP net income for the company in the quarter was $143 million as compared to $125 million for the fourth quarter of 2020. GAAP income taxes during the current year fourth quarter were $20.6 million or an effective tax rate of 12.4% as compared to $39 million or an effective tax rate of 23.8% in the prior year. The decline in effective tax rate was primarily due to certain discrete items related to acquisitions and a higher stock compensation deduction during the current year. Diluted net income per share for the company on a GAAP basis was $2.04 in the fourth quarter of 2021 compared to $1.97 in the prior year. Adjusted net income for the company as defined in our earnings release was an all-time record $162 million in the current year quarter or $2.51 per share. This compares to adjusted net income of $136 million in the prior year or $2.12 per share. Cash income taxes for the fourth quarter of 2021 were $29.7 million as compared to $34.9 million in the prior year quarter. The current year now reflects a cash income tax rate of approximately 19.7% for the full year 2021 compared to our previous expectation of approximately 20.0% to 20.5%. The decrease is primarily driven by a higher level of stock compensation deduction than previously expected. This full year cash tax rate for 2021 compares to the prior year rate of 17.9%. The increase in the current year cash tax rate versus the prior year is primarily due to a significant increase in domestic pretax income, which is taxed at a higher statutory rate, along with an increase in nondeductible goodwill from acquisitions. Cash flow from operations was $62 million as compared to $218 million in the prior year fourth quarter. And free cash flow as defined in our earnings release was $42 million as compared to $191 million in the same quarter last year. The decline in free cash flow was primarily due to a much higher working capital investment in the current year quarter, partially offset by an increase in operating earnings and lower capital expenditures relative to the prior year. The higher working capital investment was primarily driven by further elevated inventory levels at the end of the year, resulting from extended logistics in transit times, ongoing supply chain constraints, increasing production rates and continued investments in the ramping of our new Trenton facility. We repurchased 350,000 shares of common stock during the fourth quarter for $126 million under our current share repurchase program. And we have approximately $124 million remaining under this authorization as of December 31, 2021. At year-end, we had approximately $550 million of liquidity comprised of approximately $150 million of cash on hand and $400 million of availability on our ABL revolving credit facility, which matures in May of 2026. Also, total debt outstanding at the end of the year was $980 million, net of unamortized original issue discount and deferred financing costs. Our gross debt leverage ratio at the end of the fourth quarter was only 1.2x on an as-reported basis. In addition, our term loan doesn't mature until December 2026, and we do not have any required principal payments on this facility until the maturity date. And it has a low cost of debt of LIBOR plus 175 basis points. We also have interest rate swap arrangements that fix our interest rate exposure on approximately $500 million of this debt through the maturity date of December 2026. Further enhancing our overall liquidity is our strong cash flow profile. And for the full year 2021, free cash flow was $306 million. Uses of cash during 2021 included $744 million for acquisitions, including earn-out and non-controlling interest buyouts, $126 million for share repurchases and $110 million for capital expenditures. Our strong balance sheet and free cash flow generation give us the flexibility to grow our business, execute on our strategy and invest in future shareholder value-enhancing opportunities. With that, I will now provide further comments on our new outlook for 2022. As Aaron previously highlighted, key demand metrics for most of our product categories continue to trend strongly during the fourth quarter, leading to a further increase in backlog as we exit 2021. Looking into 2022, we expect significant growth in home standby generator shipments as we ramp capacity in our Trenton, South Carolina plant. We also expect strong growth from our clean energy products as the solar plus storage market continues to grow rapidly and as we launch several important new products, including PWRmicro throughout the first half of the year. We expect C&I products to continue to benefit from strong and broad-based global demand, highlighted by domestic telecom, mobile and energy management customers and several key international markets. In addition, our 2021 energy technology acquisitions are expected to contribute meaningfully to our overall growth in particular, the ecobee, Deep Sea Electronics and Off Grid Energy acquisitions. In summary, we have tremendous momentum and significant visibility into our demand profile as we enter 2022. As a result of this positive top line outlook, we're initiating guidance for 2022 that anticipate significant revenue growth as compared to the prior year. Net sales are expected to increase between 32% to 36% as compared to the prior year on an as-reported basis, which includes an approximate 5% to 7% net impact from acquisitions and foreign currency. This revenue outlook assumes shipments of residential products increased at a low 40% rate during 2022 and revenue for C&I products is expected to grow at a high-teens rate compared to the prior year. Importantly, this guidance assumes a level of power outage activity during the year in line with the longer-term baseline average. As a result, consistent with our historical approach, this outlook does not assume the benefit of a major power outage event during the year, such as a Category 3 or higher landed hurricane. Given we are expected to be producing at capacity for home standby generators throughout the year, the upside of a major power outage event would be more limited to incremental portable generator shipments during 2022. Meaning, any extra lift for home standby generators from a major power outage event would most likely result in incremental revenue in 2023. As Aaron previously explained, we expect to significantly reduce our backlog and lead times for home standby generators during 2022. But given the strong demand for these products, we're expecting a certain level of quarterly seasonality during 2022, with net sales in the first half being approximately 47% weighted and sales in the second half being approximately 53% weighted. Specifically related to the first quarter, we expect first quarter 2022 shipments to be similar to fourth quarter 2021 levels with increasing residential shipments being offset by seasonal impacts for C&I products. Looking at our gross margin profile as we enter 2022, we anticipate cost pressures from ongoing supply chain challenges, component shortages, higher logistics costs and an overall inflationary environment to further impact gross margins in the first quarter, resulting in a sequential decline in gross margins from fourth quarter 2021 to first quarter 2022. We expect many of these inflationary pressures to progressively ease as we move through 2022 for a variety of reasons. Steel prices have come off their recent peaks, and we expect freight costs will recede during the year as supply chain bottlenecks improve. Also, the realization of multiple pricing actions that we took in 2021 will have a meaningfully positive impact on gross margins, particularly in the second half, supported by our significant backlogs that contain higher pricing levels. In addition, the impact of plant start-up costs will continue to lessen as production at the new Trenton, South Carolina facility further ramps. Also, we expect to realize certain cost-reduction initiatives that began in 2021 to combat the significant increase in input costs, including important projects to improve the cost structure for certain high-volume product lines. These tailwinds should be increasingly realized on a quarterly basis as we progress through 2022. For the full year 2022, we expect pricing, easing input cost pressures during the second half and cost-reduction initiatives to more than offset the continuation of inflationary cost pressures during the first half. As a result, we expect gross margins for full year 2022 to increase modestly compared to 2021 with sequential improvements throughout the year. Specifically, from a seasonality perspective, we expect price cost headwinds to hit peak levels in the first quarter of 2022, leading to trough gross margins that are expected to be approximately 100 basis points below fourth quarter 2021 levels. We expect quarterly improvements throughout the year ultimately leading to fourth quarter 2022 gross margins recovering back to first quarter 2021 levels. In addition, we continue to make significant operating expense investments to scale the business, support innovation and drive future revenue growth in new and existing markets. These energy technology investments and the impact of acquisitions completed in 2021 are expected to result in moderately higher operating expense as a percentage of revenue for the full year 2022 when compared to full year 2021. As a result of these factors and our gross margin expectations, adjusted EBITDA margins before deducting for noncontrolling interests are expected to be approximately 22.0% to 23.0% compared to 23.1% reported for the full year 2021. This includes the combined impact from recent acquisitions that is expected to dilute adjusted EBITDA margins by approximately 150 basis points during 2022. From a seasonality perspective, we expect adjusted EBITDA margins to improve significantly as we move through the year, primarily driven by improving gross margins throughout the year as previously discussed in detail and, to a lesser extent, improved leverage of operating expenses on the expected higher sales volumes. Specifically, regarding the first quarter, adjusted EBITDA margins are expected to bottom in the first quarter at approximately 250 to 300 basis points below fourth quarter 2021 levels and then improve sequentially throughout the year, returning to the mid-20% range in the fourth quarter of 2022 even when including the impact of recent acquisitions. As is our normal practice, we're also providing additional guidance details to assist with modeling adjusted earnings per share and free cash flow for 2022. As a reminder, our approximate $30 million per year tax shield that originated from the LBO transaction in 2006 fully expired at the end of 2021. As a result, 2021 was the last year that adjusted earnings will benefit from a notably lower cash income tax rate relative to the GAAP tax rate. Given that our cash tax rate is now expected to be more in line with the GAAP tax rate, we are now only going to guide to the GAAP tax rate going forward. For 2022, our GAAP effective tax rate is expected to be between 24% to 25% as compared to the 19.7% full year cash tax rate for 2021. This increase is driven primarily by the expiration of the previously mentioned tax shield as well as lower expected share-based compensation deductions in 2022 when compared to the prior year. In 2022, we expect interest expense to be approximately $41 million to $43 million, assuming no additional term loan principal payments during the year and assuming increasing LIBOR rates throughout 2022. Our capital expenditures are projected to be approximately 2.5% to 3% of our forecasted net sales for the year. And depreciation expense is forecast to be approximately $56 million to $58 million in 2022 given our assumed CapEx guidance. GAAP intangible amortization expense in 2022 is expected to be approximately $95 million to $100 million during the year. This is an increase compared to $50 million of amortization expense in 2021 due to the impact of acquisitions completed during 2021 that resulted in a significant increase in finite life intangible assets such as trade names, customer lists, patents and technology. Stock compensation expense is expected to be between $31 million to $34 million for the year. For full year 2022, operating and free cash flow generation is once again expected to follow historical seasonality of being disproportionately weighted toward the second half of the year. Given the very strong organic sales growth expected during 2022, we expect the conversion of adjusted net income to free cash flow to be approximately 70% to 80% for the year as a portion of cash flows will be invested in working capital to support this growth. Our full year weighted average diluted share count is expected to increase and be approximately 65.3 million to 65.5 million shares as compared to 64.3 million shares in 2021. Finally, this 2022 outlook does not reflect potential additional acquisitions or share repurchases that could drive incremental shareholder value. This concludes our prepared remarks. At this time, we'd like to open up the call for questions.

Operator provided instructions. And our first question comes from Tommy Moll from Stephens.

York, you gave some helpful insight on the growth and EBITDA margins and their progression through the year. I wanted to drill down on the home standby business. It sounds like the price-cost dynamic should be a tailwind as you get into the second half of the year. I would think that once Trenton has scaled production there, that also ought to be margin accretive. So if you run it all through and things go according to plan, could you exit 2022 with a higher margin on that business than you had put up in the past?

I think, overall, what we guided and what our guidance anticipates is that our gross margins overall for the company get back to, what we're calling, the pre-inflationary environment. If you look at Q1 2021 gross margins of roughly 40%, our guide basically gets us back there in Q4. We haven't necessarily parsed that out by product category in our guidance and in our prepared comments. But I would think it would get back to at least a similar margin where the pre-inflationary environment was earlier in the year.

Fair enough. Had to ask. Aaron, to follow up on Grid Services, you made some news last month with the virtual power plant deal you announced. About that deal specifically, and then you mentioned the funnel for Grid Services is pretty full for 2022. How many more of these do you think you could sign this year?

The Grid Services piece, Tommy, as we've indicated a couple of times publicly, the pipeline there is growing at a rapid pace. We're actually expanding our sales force there. We've more than doubled the headcount in that business. We're closing in on 100 people that are focused on it every day. And that's without the dedicated team at ecobee as well that, as I mentioned in my prepared remarks, will be helpful in some of the sales efforts. The challenge, of course, for Grid Services, and we noted this during Investor Day, is a long sales cycle. You're dealing with utilities and grid operators and those organizations have processes for these types of programs, often involving one-off approval through regulatory agencies or regulatory bodies. Many of these programs are new to certain utilities and grid operators, so there's a learning curve. But I would say that we're incredibly encouraged. We talked specifically about the Southern California Edison PowerFlex program as a proof point of some of the deals that are in the pipeline that are actually getting done. That one is not a huge program, admittedly, but it's a nice program for us because it helps us demonstrate not only to Southern California Edison, but we can use that program and the elements of that program to share with other utilities. Many utility companies are trying to determine the right program structure for them—demand management, grid support, or other needs such as frequency or voltage management—and those needs differ. We can address voltage or frequency stabilization or augment power generation or curtail demand with our storage systems. We have flexibility in designing programs. The lack of formality around what type of program is needed by each grid operator means we have to educate and work with them, and the long sales cycle means it will be a while before we see meaningful impact in our results. We've contemplated that in the guidance we're offering today, and it's tracking well, if not above, what we shared at Investor Day last September. It's really encouraging, but just a long sales cycle.

And our next question comes from Ross Gilardi from Bank of America.

Can you quantify any more specifically what you're assuming for home standby backlog exiting 2022? And what is a normalized level of orders for home standby in today's world? Really, what I'm trying to get at is, do you have enough home standby backlog in your planning assumptions right now exiting 2022 to avoid a down year in 2023 without significantly above-trend demand in 2023?

You're asking about 2023 guidance. We do think, as we said in the prepared remarks, we're going to end this year with a substantial home standby backlog because order rates have been very strong—so strong that even though we've increased production capacity, backlog continued to grow. We will increase output throughout the year, and we've discussed our plans to add capacity, though supply chain constraints could limit how quickly we can realize theoretical capacity. Based on our prepared remarks, we have meaningful growth built into our forecast for the year, but we still expect to end the year with a significant backlog. The amount of backlog will depend largely on the outage environment over the next 6 to 9 months; if it's a normal or elevated outage environment, the backlog could grow further. It's difficult to provide a precise number at this stage. Previously, we thought we'd be out of backlog by the end of 2022, and that assumption has changed given the current demand environment and the additional capacity we're adding. So while we expect to bring lead times down, we do not expect to return to normal 1- to 2-week lead times by year end.

And our next question comes from Philip Shen from ROTH Capital.

Given the demand signals you're seeing and supply constraints, where do you stand now with capacity expansion? Are you closer to making a decision to expand beyond the Q2 2022 double-double? If so, what's the timing and magnitude of that expansion?

We continue to monitor capacity closely and are making necessary investments. We committed to invest in additional tooling for production of alternators, which are a constrained area in ramping production. That automation equipment has long lead times—50 to 60 weeks—and it's on order. Based on the timing, that equipment would likely be available sometime in early 2023, and we are evaluating where to install it, including whether we can add it to our existing footprint and move some storage off-site. We're considering whether to keep a third facility running and expand it further. We are currently producing home standbys in three facilities; once Trenton is fully ramped, our intent was to transition more production to Trenton. We added another line in Jefferson in the fourth quarter and another line in Trenton in the fourth quarter. Trenton could become more permanent as a way to expand capacity beyond the double-double. The tooling investments we've committed to address longer lead-time items that make further expansion possible, and we will continue investing in automation in existing operations. So we feel good about the steps we've taken to prepare for additional capacity, especially into early 2023.

Regarding Chilicon and PWRmicro, you're targeting a Q2 ramp. How is the channel receiving the product? Do channel partners have samples to test and approve vendors? What kind of demand in megawatts or revenue could Chilicon generate in Q3 and Q4?

We're excited about PWRmicro—it's our path to participate more fully in the clean energy PV market beyond storage. Chilicon's technology is strong, and the 2:1 microinverter approach (two panels to one microinverter) is an important part of the product's value proposition. We're on target for a Q2 launch, with benefits realized in the second half of the year. We haven't given specific guidance on revenue yet. We have supply chain work ahead to ramp, especially on electronics components like semiconductors, where constraints exist industry-wide. We'll get samples into beta test sites in early Q2 for channel partners. Channel receptivity continues to be very strong; partners are excited for Generac to enter the microinverter market because it rounds out our product offering. Our integrated approach—generators, storage, PV inverters, load control devices on a single platform—is a unique capability in the industry and will be especially meaningful when combined with Grid Services.

And our next question comes from Brian Drab from William Blair.

Can you discuss the dynamics impacting dealer count and how that flattened out? I understand new dealers may not be able to get product quickly because of long lead times. How do you view that playing out? Could that spring-load growth into 2023 in the home standby category as lead times come down and dealer count grows again?

The pipeline for new dealers remains very strong, but our challenge has been fulfilling those orders because of backlog. As backlog extended, dealer additions flattened. We still added 800 dealers in the full year, more than we've ever added in a single year, but we need to satisfy these dealers with product, installation bandwidth, sales and service. Continued expansion of the dealer channel is critical to our growth. We are laser-focused on growing that channel. It is possible that as lead times improve, some incremental demand could spring-load into 2023, but our focus is making sure we can deliver product to dealers so we don't sign dealers up and then fail to deliver, which would be demoralizing for them. This area is getting a lot of attention and will remain a priority in 2022.

Is there some lead time threshold where dealer count starts to grow again?

Lead times have already begun to come down—we're down 4 to 5 weeks from the end of Q3—so as lead times continue to improve, dealer counts should begin to pick up again. I don't think dealer growth will remain flat; it should accelerate as we increase production capacity and reduce lead times.

And our next question comes from Jeff Hammond from KeyBanc.

How are you thinking about growth rates in storage and clean energy all in for 2022? Also, what's your view on the California net metering proposal and how it impacts battery storage short term and long term?

Embedded in the 32% to 36% overall growth guidance is an expectation that residential products will increase in the low 40% range, and embedded in that is clean energy. We have aggressive growth plans for clean energy: from 2020 to 2021 we doubled that business, and for 2022 we expect well north of 50% growth for clean energy. That will be accretive to overall residential product growth.

On California net metering, this has been a front-row issue for us. We're involved via industry groups and watching the proposed draft closely. The concern is valid with the California Public Utilities Commission draft; it doesn't achieve balance. This debate on net metering is an early inning and will play out broadly as solar penetration increases. There is an important balance between ensuring fair and equitable incentives and not dampening enthusiasm for renewable energy. If the policy shifts the economics, it could drive storage adoption higher, which benefits us. In the short term, we're underexposed in California so it probably doesn't materially impact us immediately, but over time the net metering discussion will influence storage economics and penetration. We've recognized the need for a stronger voice on policy and regulatory matters and will invest more in that area to support the industry, our customers and dealers.

And our next question comes from Joseph Osha from Guggenheim Partners.

What trends are you seeing in consultation activity across the country? I've heard past growth in consultations in parts of the country that weren't big markets before, which could signal higher growth in places like California. What trends are you seeing now, and how might that shape U.S. sales this year?

We call them in-home consultations (IHCs), and we're seeing a move toward more virtual consultations, but the overall trend is very strong. Year-to-date, 46 states had growth in IHC counts, which shows how widespread and broad-based the demand is. In the fourth quarter, some regions cooled slightly while others remained very strong. Regions like the Midwest, South Central and Western regions continue to be very strong with consultations. Some areas have lower penetration and are catching up, while others with higher penetration might slow a bit. Overall, IHCs were up double digits again for the quarter across the country, which bodes well for our 2022 guidance given the strong front-end interest in the product category.

And our next question comes from Jed Dorsheimer from Canaccord Genuity.

Regarding Grid Services and the SoCal Edison deal, Europe is proposing to reclassify both nuclear and natural gas as cleaner energy. There's a large fleet of capacity in the field, much of it natural gas. How are discussions progressing around deploying that capacity into BPP-type programs, given concerns about natural gas?

We're encouraged by moves in Europe to reconsider natural gas and nuclear, recognizing the importance of continuous baseload power and the opportunity to clean those sources up. As electrification expands, relying on a single energy source is risky; natural gas can be an important transitional fuel to reduce carbon intensity versus coal. In the U.S., utility and grid operators understand that natural gas will be part of the mix, though public debates and local policy moves sometimes aim to limit natural gas. The fleet of products we have is desirable for grid programs, and with our smart grid-ready technology we can enable these assets to participate in BPP programs like SoCal Edison's PowerFlex and similar initiatives elsewhere. Conversations are ongoing with utilities and grid operators and are generally constructive.

And our next question comes from Christopher Glynn from Oppenheimer.

Does the guidance assume Trenton is running full throughput at targeted capacity for the second half, or are there more gated assumptions given all required factors to make Trenton operate at that level?

There is theoretical capacity and realized or real-world capacity. The theoretical number is larger than what we've planned for in guidance because real-world constraints exist—labor, supply chain, logistics, maintenance and the like. Our guidance is planned below the theoretical capacity of the facility for the balance of the year, reflecting those practical constraints. If we get breakthroughs, we could generate higher throughput, and we're aiming for that, but it's rare to run at a full theoretical capacity number continuously due to typical operational realities.

And our next question comes from J.B. Lowe from Citi.

How are you thinking about the opportunity for commercial storage and international expansion for the battery product?

The Off Grid Energy acquisition was our first foray into commercial storage, with products well-suited for the rental market: trailer-mounted systems that can be paired with mobile generators for charging and can run off batteries on-site. They're useful in construction sites and other areas where noise or emissions are constrained. We're introducing these products in the U.S. to national rental account partners and also offering them to our rental customers in Europe through our Pramac group. The European rental market is well developed and receptive. The Off Grid products have been well received, and we're excited about the early innings in C&I storage. We're developing a roadmap for stationary storage, which would serve more traditional commercial and industrial stationary applications, similar to our global C&I generator market. More to come as we develop those products.

And our next question comes from Kashy Harrison from Piper Sandler.

At Investor Day you provided a multiyear revenue CAGR through 2024. Since then, what notable developments should we be aware of that could affect that multiyear view?

One notable development since the LRP model in September is our backlog coming into 2022, which we expect will be higher than anticipated back then, and that will be a tailwind as you progress through the model. Also, ecobee was not in the original LRP model and is a material addition; our strategy around ecobee and the home energy ecosystem, plus the synergies it can provide, represent a meaningful change since the LRP.

I agree with York. Another factor that may not have been fully appreciated in the LRP is that we're gaining share across markets we participate in. Share gains can be sticky and compound in future years. So higher-than-anticipated backlog for home standby exiting 2022 and the ecobee acquisition are the main developments not baked into the prior LRP.

And our next question comes from Donovan Schafer from Colliers Securities.

Historically, acquisitions from 2010 to 2018 focused on building an international footprint to benefit from megatrends like the shift from diesel to natural gas. Now that this seems to be playing out, what specifically have you seen in the last year (setting aside COVID) driving this, and what might you expect over the medium term, say three to five years? For example, LNG market growth, LPG markets in Brazil and Argentina, Japan, India pipeline developments—what are the most important factors?

You're right—the last decade was about building footprint, teams and capabilities to deliver products into global markets. The long-term view always included home standby, C&I natural gas products and clean energy. We're seeing interest in home standby in markets like Argentina and Brazil in South America, Australia, Japan, and even Russia and Ukraine—often driven by concerns around power quality or reliability. Our teams in Europe and rest-of-world are telling us they could sell more product if we can get it to them, which is encouraging. Natural gas expansion, LPG markets, and pipeline expansions in markets like India are enablers for our products. The Off Grid storage product and our other clean energy assets also fit into these international opportunities. We view these as long-term, multi-year opportunities where our investments and distribution footprint can be leveraged; while it's hard to quantify 3- to 5-year rates precisely, we're very encouraged by international interest and the prospects for continued expansion.

I'm showing no further questions. I would now like to turn the call back over to Michael Harris for closing remarks.

We want to thank everyone for joining us this morning. We look forward to discussing our first quarter 2022 earnings results with you in late April. Thank you again, and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.