Gencor Releases First Quarter Fiscal 2017 Results
February 03 2017 - 8:00AM
Gencor Industries, Inc. (Nasdaq:GENC) announced today net revenues
increased 19% to $15.8 million for the quarter ended December 31,
2016 compared to $13.3 million for the quarter ended December 31,
2015. Gross margins increased to 26.3% for the quarter ended
December 31, 2016 from 24.8% for the quarter ended December 31,
2015, due to increased revenues and cost absorption. Product
engineering and development expenses increased $34,000 to $416,000
for the quarter ended December 31, 2016 due to increased staffing.
Selling, general and administrative (“SG&A”) expenses increased
$405,000 to $2,190,000 for the quarter ended December 31, 2016.
Headcount additions and higher sales commissions contributed to
most of the increase in SG&A expenses. Operating income for the
quarter ended December 31, 2016 was $1.5 million or 9.8% of net
revenues compared to operating income of $1.1 million or 8.4% of
net revenues for the quarter ended December 31, 2015.
For the quarter ended December 31, 2016, the Company had
non-operating income of $0.4 million compared to non-operating
income of $1.0 million for the quarter ended December 31,
2015. Net income for the quarter ended December 31, 2016 was
$1.4 million, or $0.10 per basic and diluted share, compared to net
income of $1.6 million, or $0.11 per basic and diluted share for
the quarter ended December 31, 2015.
At December 31, 2016, the Company had $107.0 million of cash and
marketable securities, an increase of $2.8 million over the
September 30, 2016 balance of $104.2 million. Net working capital
was $116.8 million at December 31, 2016. The Company had no
short-term or long-term debt outstanding at December 31, 2016.
The Company’s backlog was $40.8 million at December 31, 2016
compared to $31.2 million at December 31, 2015.
John Elliott, Gencor’s CEO, commented, “Gencor began fiscal 2017
with the largest backlog of asphalt plants and components in the
company’s history. Many of our clients placed orders earlier
in anticipation of 2017 construction work which has resulted in an
increase in demand for our products. Federal funds from the
FAST ACT are being dispersed to state departments of transportation
and should result in an increase in bidding activity for our
domestic customers.
First quarter revenues represent solid growth from the previous
year and a 151% increase from two years ago. Revenues in our
first quarter are often significantly lower than our second and
third quarters as customers typically do not take delivery of
equipment until late winter and spring.
In the first quarter Gencor delivered improved gross margins of
26.3% and managed operational expenses, which resulted in a 140
basis point increase in operating margins to 9.8%.
In January we implemented second shifts at both of our
manufacturing facilities and are exploring avenues to significantly
expand our production capabilities to meet the anticipated future
demand for our products. Potentially favorable new
legislation could have a positive impact on Gencor’s performance in
the future. These include a proposed $1 trillion investment
in domestic infrastructure, an immediate 100% tax deduction on all
capital equipment purchases, and a proposed reduction in the
corporate tax rate.
In March we will be exhibiting at the 2017 Conexpo-Con/Agg
construction equipment show in Las Vegas where we anticipate
significant interest in our products.”
Gencor Industries is a diversified heavy
machinery manufacturer for the production of highway construction
materials, synthetic fuels and environmental control machinery and
equipment used in a variety of applications.
|
GENCOR INDUSTRIES,
INC.Condensed Consolidated Statements of
Income(Unaudited) |
|
For the Quarters Ended
December 31, |
|
|
2016 |
|
|
2015 |
|
|
|
|
Net revenue |
$ |
15,783,000 |
|
$ |
13,258,000 |
Costs
and expenses: |
|
|
|
Production
costs |
|
11,633,000 |
|
|
9,976,000 |
Product
engineering and development |
|
416,000 |
|
|
382,000 |
Selling, general
and administrative |
|
2,190,000 |
|
|
1,785,000 |
|
|
14,239,000 |
|
|
12,143,000 |
|
|
|
|
Operating income |
|
1,544,000 |
|
|
1,115,000 |
|
|
|
|
Other income (expense),
net: |
|
|
|
Interest and
dividend income, net of fees |
|
41,000 |
|
|
385,000 |
Realized and
unrealized gains (losses) on marketable securities, net |
|
407,000 |
|
|
593,000 |
Other |
|
- |
|
|
1,000 |
|
|
448,000 |
|
|
979,000 |
|
|
|
|
Income before income
tax expense |
|
1,992,000 |
|
|
2,094,000 |
Income tax expense |
|
598,000 |
|
|
519,000 |
Net income |
$ |
1,394,000 |
|
$ |
1,575,000 |
|
|
|
|
Basic Income per Common
Share: |
|
|
|
Net income per
share |
$ |
0.10 |
|
$ |
0.11 |
|
|
|
|
Diluted Income per
Common Share: |
|
|
|
Net income per
share |
$ |
0.10 |
|
$ |
0.11 |
|
|
|
|
|
GENCOR INDUSTRIES,
INC.Condensed Consolidated Balance
Sheets |
|
December 31, |
|
September 30, |
|
|
2016 |
|
|
2016 |
ASSETS |
(Unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
20,562,000 |
|
$ |
18,219,000 |
Marketable
securities at fair value (cost $86,498,000 at December 31,
2016 and $86,203,000 at September 30, 2016) |
|
86,386,000 |
|
|
85,938,000 |
Accounts
receivable, less allowance for doubtful accounts of $241,000
at December 31, 2016 and $195,000 at September
30, 2016 |
|
794,000 |
|
|
1,110,000 |
Costs and
estimated earnings in excess of billings |
|
6,691,000 |
|
|
4,921,000 |
Inventories,
net |
|
12,537,000 |
|
|
11,634,000 |
Prepaid expenses
& other current assets |
|
1,536,000 |
|
|
1,598,000 |
Total Current Assets |
|
128,506,000 |
|
|
123,420,000 |
|
|
|
|
Property and equipment,
net of accumulated depreciation |
|
5,181,000 |
|
|
5,239,000 |
Other assets |
|
53,000 |
|
|
53,000 |
Total Assets |
$ |
133,740,000 |
|
$ |
128,712,000 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
1,891,000 |
|
$ |
1,443,000 |
Customer
deposits |
|
7,517,000 |
|
|
4,484,000 |
Accrued
expenses |
|
2,343,000 |
|
|
2,264,000 |
Total Current Liabilities |
|
11,751,000 |
|
|
8,191,000 |
|
|
|
|
Deferred and other
income taxes |
|
362,000 |
|
|
316,000 |
Total Liabilities |
|
12,113,000 |
|
|
8,507,000 |
|
|
|
|
Commitments and
contingencies |
|
|
|
Shareholders’
equity: |
|
|
|
Preferred stock,
par value $.10 per share; authorized 300,000 shares;
none issued |
|
- |
|
|
- |
Common stock,
par value $.10 per share; 15,000,000 shares authorized; |
|
|
|
12,113,079 shares and 12,111,079 shares issued and outstanding at
December 31, 2016 and September 30, 2016,
respectively |
|
1,211,000 |
|
|
1,211,000 |
Class B Stock,
par value $.10 per share; 6,000,000 shares authorized; |
|
|
|
2,263,857
shares issued and outstanding at December 31, 2016 and
September 30, 2016 |
|
226,000 |
|
|
226,000 |
Capital in
excess of par value |
|
10,915,000 |
|
|
10,887,000 |
Retained
earnings |
|
109,275,000 |
|
|
107,881,000 |
Total Shareholders’ Equity |
|
121,627,000 |
|
|
120,205,000 |
Total Liabilities and Shareholders’ Equity |
$ |
133,740,000 |
|
$ |
128,712,000 |
|
|
|
|
Caution Concerning Forward Looking Statements - This press
release and our other communications and statements may contain
“forward-looking statements,” including statements about our
beliefs, plans, objectives, goals, expectations, estimates,
projections and intentions. These statements are subject to
significant risks and uncertainties and are subject to change based
on various factors, many of which are beyond our control. The
words “may,” “could,” “should,” “would,” “believe,” “anticipate,”
“estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and
similar expressions are intended to identify forward-looking
statements. All forward-looking statements, by their nature,
are subject to risks and uncertainties. Our actual future
results may differ materially from those set forth in our
forward-looking statements. For information concerning these
factors and related matters, see our Annual Report on Form 10-K for
the year ended September 30, 2016; (a) “Risk Factors” in Part I,
Item 1A and (b) “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in Part II, Item
7. However, other factors besides those referenced could
adversely affect our results, and you should not consider any such
list of factors to be a complete set of all potential risks or
uncertainties. Any forward-looking statements made by us
herein speak as of the date of this press release. We do not
undertake to update any forward-looking statement, except as
required by law.
Contact:
Eric Mellen, Chief Financial Officer
407-290-6000
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