Gencor Industries, Inc. (the “Company” or “Gencor”) (NYSE American:
GENC) announced today net revenues for the quarter ended June 30,
2024 decreased $2,326,000 to $25,551,000, from $27,877,000 for the
quarter ended June 30, 2023. The decrease in revenues was in
equipment sales recognized at a point in time and reduced parts
sales. The lower revenues reflect the delayed timing of the
shipment of orders.
As a percent of sales, gross profit margins decreased to 23.9%
in the quarter ended June 30, 2024, compared to 26.9% in the
quarter ended June 30, 2023, on lower absorption from reduced
production and lower parts sales.
Product engineering and development expenses decreased by
$21,000 to $824,000 for the quarter ended June 30, 2024, as
compared to $845,000 for the quarter ended June 30, 2023. Selling,
general and administrative (“SG&A”) expenses increased by
$76,000 to $3,290,000 for the quarter ended June 30, 2024, compared
to $3,214,000 for the quarter ended June 30, 2023. The increase in
SG&A expenses was due to increased professional fees.
Operating income decreased from $3,453,000 for the quarter ended
June 30, 2023 to $1,993,000 for the quarter ended June 30, 2024,
due to lower net revenues, reduced gross profit margins, and
slightly higher operating expenses.
For the quarter ended June 30, 2024, the Company had net other
income of $1,329,000 compared to $719,000 for the quarter ended
June 30, 2023. Interest and dividend income, net of fees, was
$966,000 for the quarter ended June 30, 2024 as compared to
$673,000 in the quarter ended June 30, 2023. The increase was
primarily due to higher interest rates earned on increased cash
balances and fixed income investments. The net realized and
unrealized gains on marketable securities were $363,000 for the
quarter ended June 30, 2024 versus $46,000 for the quarter ended
June 30, 2023, due to the sale of bonds prior to maturity.
The effective income tax rate for the quarters ended June 30,
2024 and June 30, 2023 was 23.0%, based on the expected annual
effective income tax rate.
Net income for the quarter ended June 30, 2024 was $2,558,000,
or $0.17 per basic and diluted share, versus net income of
$3,212,000, or $0.22 per basic and diluted share, for the quarter
ended June 30, 2023.
For the nine months ended June 30, 2024 the Company had net
revenues of $92,245,000 and net income of $13,106,000 ($0.89 per
basic and diluted share) versus net revenues of $84,204,000 and net
income of $11,561,000 ($0.79 per basic and diluted share) for the
nine months ended June 30, 2023.
At June 30, 2024, the Company had $116,585,000 of cash and
marketable securities compared to $101,283,000 at September 30,
2023. Net working capital was $178,966,000 at June 30, 2024. The
Company had no short-term or long-term debt outstanding at June 30,
2024.
The Company’s backlog was $46.6 million at June 30, 2024
compared to $27.9 million at June 30, 2023.
Marc Elliott, Gencor’s President, commented, “Third quarter
fiscal 2024 revenues dipped from the prior year, primarily due to
timing of revenue recognition on orders nearing completion. This is
positively reflected in our elevated backlog of $46.6 million, a
historic high for this time of year with an unprecedented 67%
increase over fiscal 2023.
Our performance over the first nine months has been strong, with
increased revenue and a 13% rise in net income over the prior year.
We are optimistic about the future, represented by continued demand
for our equipment and a robust highway funding mechanism to sustain
continued growth. We remain focused on our costs and look for new
ways to improve productivity as we work on our substantial backlog
and toward our fiscal year end goal.”
Gencor Industries, Inc. is a diversified heavy
machinery manufacturer for the production of highway construction
materials and equipment and environmental control machinery and
equipment used in a variety of applications.
|
GENCOR INDUSTRIES, INC.Condensed
Consolidated Income Statements
(Unaudited) |
|
For the Quarters Ended June
30, |
|
For the Nine Months Ended June
30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Net revenue |
$ |
25,551,000 |
|
$ |
27,877,000 |
|
$ |
92,245,000 |
|
$ |
84,204,000 |
Cost of goods sold |
|
19,444,000 |
|
|
20,365,000 |
|
|
66,282,000 |
|
|
61,780,000 |
Gross profit |
|
6,107,000 |
|
|
7,512,000 |
|
|
25,963,000 |
|
|
22,424,000 |
Operating expenses: |
|
|
|
|
|
|
|
Product engineering and development |
|
824,000 |
|
|
845,000 |
|
|
2,518,000 |
|
|
2,616,000 |
Selling, general and administrative |
|
3,290,000 |
|
|
3,214,000 |
|
|
10,997,000 |
|
|
9,075,000 |
Total operating expenses |
|
4,114,000 |
|
|
4,059,000 |
|
|
13,515,000 |
|
|
11,691,000 |
|
|
|
|
|
|
|
|
Operating income |
|
1,993,000 |
|
|
3,453,000 |
|
|
12,448,000 |
|
|
10,733,000 |
|
|
|
|
|
|
|
|
Other income (expense), net: |
|
|
|
|
|
|
|
Interest and dividend income, net of fees |
|
966,000 |
|
|
673,000 |
|
|
2,485,000 |
|
|
1,731,000 |
Net realized and unrealized gains on marketable securities,
net |
|
363,000 |
|
|
46,000 |
|
|
2,087,000 |
|
|
2,700,000 |
Total other income (expense),
net |
|
1,329,000 |
|
|
719,000 |
|
|
4,572,000 |
|
|
4,431,000 |
|
|
|
|
|
|
|
|
Income before income tax
expense |
|
3,322,000 |
|
|
4,172,000 |
|
|
17,020,000 |
|
|
15,164,000 |
Income tax expense |
|
764,000 |
|
|
960,000 |
|
|
3,914,000 |
|
|
3,603,000 |
Net income |
$ |
2,558,000 |
|
$ |
3,212,000 |
|
$ |
13,106,000 |
|
$ |
11,561,000 |
|
|
|
|
|
|
|
|
Net income per common share -
basic and diluted |
$ |
0.17 |
|
$ |
0.22 |
|
$ |
0.89 |
|
$ |
0.79 |
|
|
|
|
|
|
|
|
GENCOR INDUSTRIES, INC.Condensed
Consolidated Balance
Sheets(Unaudited) |
ASSETS |
June 30, 2024 |
|
September 30, 2023 |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
28,780,000 |
|
$ |
17,031,000 |
Marketable securities at fair value (cost of $87,721,000 at June
30, 2024 and $85,514,000 at September 30, 2023) |
|
87,805,000 |
|
|
84,252,000 |
Accounts receivable, less allowance for credit losses of $447,000
at June 30, 2024 and $545,000 at September 30, 2023 |
|
2,923,000 |
|
|
2,467,000 |
Costs and estimated earnings in excess of billings |
|
2,700,000 |
|
|
1,508,000 |
Inventories, net |
|
63,232,000 |
|
|
71,527,000 |
Prepaid expenses and other current assets |
|
531,000 |
|
|
2,169,000 |
Total current assets |
|
185,971,000 |
|
|
178,954,000 |
Property and equipment,
net |
|
12,038,000 |
|
|
13,246,000 |
Deferred and other income
taxes |
|
3,273,000 |
|
|
3,167,000 |
Other long-term assets |
|
473,000 |
|
|
381,000 |
Total Assets |
$ |
201,755,000 |
|
$ |
195,748,000 |
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
2,346,000 |
|
$ |
3,269,000 |
Customer deposits |
|
2,560,000 |
|
|
6,815,000 |
Accrued expenses |
|
1,740,000 |
|
|
3,753,000 |
Current operating lease liabilities |
|
359,000 |
|
|
328,000 |
Total current liabilities |
|
7,005,000 |
|
|
14,165,000 |
Non-current operating lease
liabilities |
|
61,000 |
|
|
- |
Total liabilities |
|
7,066,000 |
|
|
14,165,000 |
Commitments and
contingencies |
|
|
|
Shareholders’ equity: |
|
|
|
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; |
|
|
|
12,338,845 shares issued and outstanding at June 30, 2024 and
September 30, 2023 |
|
1,234,000 |
|
|
1,234,000 |
Class B Stock, par value $.10 per share; 6,000,000 shares
authorized; |
|
|
|
2,318,857 shares issued and outstanding at June 30, 2024
and September 30, 2023 |
|
232,000 |
|
|
232,000 |
Capital in excess of par value |
|
12,590,000 |
|
|
12,590,000 |
Retained earnings |
|
180,633,000 |
|
|
167,527,000 |
Total shareholders’ equity |
|
194,689,000 |
|
|
181,583,000 |
Total Liabilities and
Shareholders’ Equity |
$ |
201,755,000 |
|
$ |
195,748,000 |
|
|
|
|
Caution Concerning Forward Looking Statements - This press
release and our other communications and statements may contain
certain “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), including statements about the Company’s 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 the Company’s control. Actual results may
differ materially depending on a variety of important factors,
including the financial condition of the Company’s customers,
changes in the economic and competitive environments and demand for
the Company’s products. In addition, the impact of the invasion by
Russia into Ukraine and the conflict between Israel and Hamas, as
well as actions taken by other countries, including the U.S., in
response to such conflicts, could result in a disruption in our
supply chain and higher costs of our products. The words “may,”
“could,” “should,” “would,” “believe,” “anticipate,” “estimate,”
“expect,” “intend,” “plan,” “target,” “goal,” and similar
expressions are intended to identify forward-looking
statements.
For information concerning these factors and related matters,
see the following sections of the Company’s Annual Report on Form
10-K for the year ended September 30, 2023: (a) Part I, Item 1A,
“Risk Factors” and (b) Part II, Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”.
However, other factors besides those referenced could adversely
affect the Company’s 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 the Company
herein speak as of the date of this press release. The Company does
not undertake to update any forward-looking statements, except as
required by law.
Unless the context otherwise indicates, all references in this
press release to the “Company,” “Gencor,” “we,” “us,” or “our,” or
similar words are to Gencor Industries, Inc. and its
subsidiaries.
Contact: Eric Mellen, Chief Financial Officer
407-290-6000
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