Gencor Releases Third Quarter Fiscal 2018 Results
August 02 2018 - 8:00AM
Gencor Industries, Inc. (Nasdaq: GENC) announced today net revenues
increased slightly to $24.1 million for the quarter ended June 30,
2018 compared to $23.7 million for the quarter ended June 30,
2017. Gross margins were 26.6% for the quarter ended June 30,
2018 compared to 28.2% for the quarter ended June 30, 2017 as
material costs have increased. Product engineering and development
expenses increased $144,000 to $781,000 for the quarter ended June
30, 2018 due to increased staffing to meet the higher demand for
our products. Selling, general and administrative (“SG&A”)
expenses decreased $80,000 to $2,179,000 for the quarter ended June
30, 2018. Operating income for the quarter ended June 30, 2018 was
$3.5 million compared to $3.8 million for the quarter ended June
30, 2017.
For the quarters ended June 30, 2018 and 2017, the Company had
non-operating expense of $0.1 million. The effective income
tax rate for the quarter ended June 30, 2018 was 20.0% versus 30.5%
for the quarter ended June 30, 2017 reflecting the lower corporate
tax rates to comply with the recently enacted U.S. tax law, Tax
Cuts and Jobs Act (“TCJA”). Net income for the quarter ended June
30, 2018 was $2.7 million, or $0.18 per diluted share, compared to
net income of $2.6 million, or $0.18 per diluted share for the
quarter ended June 30, 2017.
For the nine months ended June 30, 2018 the
Company had net revenue of $78.1 million and net income of $8.8
million ($0.60 per diluted share) versus net revenue of $62.1
million and net income of $7.4 million ($0.50 per diluted share)
for the nine months ended June 30, 2017.
At June 30, 2018, the Company had $112.8 million of cash and
marketable securities compared to $110.8 million at September 30,
2017. Net working capital was $130.6 million at June 30,
2018. The Company had no short-term or long-term debt
outstanding at June 30, 2018.
The Company’s backlog was $29.3 million at June 30, 2018
compared to $37.9 million at June 30, 2017.
John Elliott, Gencor’s CEO, commented, “Gencor has experienced
significant growth over the past two and a half years with revenues
increasing over 100% and operating income increasing exponentially
over the same period. In the third quarter, revenues were up
modestly from the prior year as deliveries on some equipment
shifted to the fourth quarter.
"Backlog of approximately thirty million entering the fourth
quarter of 2018 decreased, as the prior year benefited from sales
after the highly successful March 2017 ConExpo show and the effects
of the transportation bill (FAST Act). As we noted in the
2017 third quarter earnings release, the significant number of
sales during the summer months of 2017 were atypical of historic
buying patterns from our customers due to pent up demand.
"We continued to experience inflationary cost pressures on steel
and numerous purchased items in the third quarter. We expect
those pressures to continue throughout the fourth quarter. As
always, we work closely with our suppliers and internally on cost
savings initiatives to lessen the impact to the company and our
customers.”
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.
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GENCOR INDUSTRIES,
INC.Condensed Consolidated Statements of
Income(Unaudited) |
|
|
For the Quarters Ended
June 30, |
|
For the Nine Months Ended
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
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|
|
|
|
|
|
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Net
revenue |
$24,118,000 |
|
$23,743,000 |
|
$78,069,000 |
|
$62,052,000 |
|
|
|
|
|
|
|
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Costs and expenses: |
|
|
|
|
|
|
|
Production costs |
17,702,000 |
|
17,053,000 |
|
57,800,000 |
|
44,555,000 |
Product engineering and development |
781,000 |
|
637,000 |
|
2,239,000 |
|
1,523,000 |
Selling, general and administrative |
2,179,000 |
|
2,259,000 |
|
7,792,000 |
|
6,576,000 |
|
20,662,000 |
|
19,949,000 |
|
67,831,000 |
|
52,654,000 |
|
|
|
|
|
|
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Operating
income |
3,456,000 |
|
3,794,000 |
|
10,238,000 |
|
9,398,000 |
|
|
|
|
|
|
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Other
income (expense), net: |
|
|
|
|
|
|
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Interest and dividend income, net of fees |
399,000 |
|
181,000 |
|
1,075,000 |
|
384,000 |
Net realized and unrealized gains (losses) on marketable
securities |
(503,000) |
|
(253,000) |
|
(1,061,000) |
|
810,000 |
Other |
- |
|
- |
|
7,000 |
|
- |
|
(104,000) |
|
(72,000) |
|
21,000 |
|
1,194,000 |
|
|
|
|
|
|
|
|
Income
before income tax expense |
3,352,000 |
|
3,722,000 |
|
10,259,000 |
|
10,592,000 |
Income tax
expense |
670,000 |
|
1,134,000 |
|
1,468,000 |
|
3,195,000 |
Net income |
$2,682,000 |
|
$2,588,000 |
|
$8,791,000 |
|
$7,397,000 |
|
|
|
|
|
|
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Basic
Income per Common Share: |
|
|
|
|
|
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Net income per share |
$0.19 |
|
$0.18 |
|
$0.61 |
|
$0.51 |
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|
|
|
|
|
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Diluted
Income per Common Share: |
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|
|
|
|
|
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Net income per share |
$0.18 |
|
$0.18 |
|
$0.60 |
|
$0.50 |
|
|
|
|
|
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GENCOR INDUSTRIES,
INC.Condensed Consolidated Balance
Sheets |
|
|
June 30, |
|
September 30, |
|
2018 |
|
2017 |
ASSETS |
(Unaudited) |
|
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Current
Assets: |
|
|
|
Cash and cash equivalents |
$24,911,000 |
|
$22,933,000 |
Marketable securities at fair value (cost $88,993,000
at June 30, 2018 and $86,967,000 at September 30, 2017) |
87,900,000 |
|
87,886,000 |
Accounts receivable, less allowance for doubtful accounts of
$267,000 at June 30, 2018 and $207,000 at September 30, 2017 |
1,599,000 |
|
1,184,000 |
Costs and estimated earnings in excess of billings |
8,336,000 |
|
6,768,000 |
Inventories, net |
16,244,000 |
|
16,687,000 |
Prepaid expenses and other current assets |
955,000 |
|
1,660,000 |
Total Current Assets |
139,945,000 |
|
137,118,000 |
|
|
|
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Property
and equipment, net |
8,026,000 |
|
5,722,000 |
Other
assets |
53,000 |
|
53,000 |
Total Assets |
$148,024,000 |
|
$142,893,000 |
|
|
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
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Current
Liabilities: |
|
|
|
Accounts payable |
$3,093,000 |
|
$1,320,000 |
Customer deposits |
3,745,000 |
|
8,628,000 |
Accrued expenses and other current liabilities |
2,522,000 |
|
2,426,000 |
Total Current Liabilities |
9,360,000 |
|
12,374,000 |
|
|
|
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Deferred
and other income taxes |
519,000 |
|
1,601,000 |
Total Liabilities |
9,879,000 |
|
13,975,000 |
|
|
|
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Commitments
and contingencies |
|
|
|
|
|
|
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Shareholders’ equity: |
|
|
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Preferred stock, par value $.10 per share; 300,000 shares
authorized;none issued |
- |
|
- |
Common stock, par value $.10 per share; 15,000,000 shares
authorized; |
|
|
|
12,204,837 and 12,154,829 shares issued and outstanding at
June 30, 2018 and September 30, 2017, respectively |
1,220,000 |
|
1,215,000 |
Class B Stock, par value $.10 per share; 6,000,000 shares
authorized; |
|
|
|
2,288,857 and 2,263,857 shares issued and outstanding at June
30, 2018 and September 30, 2017, respectively |
229,000 |
|
226,000 |
Capital in excess of par value |
11,605,000 |
|
11,178,000 |
Retained earnings |
125,091,000 |
|
116,299,000 |
Total Shareholders’ Equity |
138,145,000 |
|
128,918,000 |
Total Liabilities and Shareholders’ Equity |
$148,024,000 |
|
$142,893,000 |
|
|
|
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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, 2017; (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 Officer407-290-6000
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