Gencor Industries, Inc., (NASDAQ: GENC) announced today net revenue
for the fourth quarter of 2021 increased 91.7% to $20.0 million
compared to $10.5 million for the quarter ended September 30, 2020.
The increase in net revenues reflected improved orders from prior
year in anticipation of a new, broad infrastructure bill to replace
the FAST Act, which after two temporary extensions, would have
expired on December 3, 2021. On November 15, 2021, President Biden
signed into law a five-year, $1.2 trillion infrastructure bill, the
Infrastructure Investment and Jobs Act, including $550 billion in
new spending and reauthorization of $650 billion in previously
allocated funds. This provides $110 billion for the nation's
highways, bridges and roads. Gross profit as a percentage of net
revenue were 17.2% for the quarter ended September 30, 2021, a
decrease from 18.3% for the quarter ended September 30, 2020. Gross
profit margins were negatively impacted by unabsorbed manufacturing
labor and overhead expenses. In addition, increases in labor rates
and steel and OEM parts prices contributed to the lower overall
gross margins during the quarter ended September 30, 2021.
Operating loss for the quarter ended September
30, 2021 was ($0.7) million compared to an operating loss of $(1.7)
million for the quarter ended September 30, 2020. The Company had
net non-operating expense of $(0.4) million for the quarter ended
September 30, 2021 compared to net non-operating income of $0.7
million for the quarter ended September 30, 2020. The Company’s tax
benefit was $0.7 million for the quarter ended September 30, 2021
compared to a tax benefit of $0.4 million for the quarter ended
September 30, 2020. Net loss for the quarter ended September 30,
2021 was $(0.4) million compared to a net loss of $(0.6) million
for the quarter ended September 30, 2020.
Net revenue for the year ended September 30, 2021
increased 10.1% to $85.3 million from $77.4 million for the year
ended September 30, 2020. The increase in net revenue was due
primarily to paver equipment and parts sales of approximately $6.1
million for the year ended September 30, 2021, compared with no
paver related revenues in fiscal 2020. Gross profit margins were
21.3% in fiscal 2021 a decrease from 24.5% in fiscal 2020. The
gross profit margins for the year ended September 30, 2021 were
negatively impacted by approximately $4.6 million of unabsorbed
manufacturing labor and overhead expenses. In addition, increases
in labor rates and steel and OEM parts prices contributed to the
lower overall gross margins during the year ended September 30,
2021.
The Company had operating income for the year
ended September 30, 2021 of $0.7 million compared to $5.5 million
for the year ended September 30, 2020. The lower operating income
was driven by the lower gross profit margins, increased product
engineering and development expenses and higher selling, general
and administrative expenses and professional fees to support
business development efforts. The Company had non-operating income
of $5.9 million for the year ended September 30, 2021 compared to
$1.1 million for the year ended September 30, 2020.
The effective income tax rate for fiscal 2021
was 12.5% versus 17.2% in fiscal 2020.
Net income for the year ended September 30, 2021
was $5.8 million ($0.40 per basic share and $0.39 per diluted
share) versus net income of $5.5 million ($0.38 per basic and
diluted share) for the year ended September 30, 2020.
At September 30, 2021, the Company had $118.2
million in cash and marketable securities, a decrease of $6.9
million over the September 30, 2020 balance of $125.1 million. The
Company’s working capital was $155.4 million at September 30,
2021 versus $153.2 million at September 30, 2020. The Company
has no short-term or long-term debt.
The Company’s backlog, which includes orders
received through the date of this filing, was $53.0 million at
December 1, 2021 compared to $24.9 million at December 1, 2020.
Mr. Marc Elliott, Gencor’s President, stated,
“Fiscal 2021 brought on new challenges that Gencor effectively
managed through. Similar to most manufacturing companies, we have
been navigating through labor constraints, supply chain delays, and
steel price inflation that have increased approximately 200% during
the fiscal year.
Market demand for Gencor’s asphalt plants and
components remains strong, represented by a significant
year-over-year increase in backlog. Our ability to meet the high
level of demand is partially constrained by labor and to a lesser
degree by supply chain challenges. We are working with our
suppliers on material and product availability and costs to
mitigate the impact on our customers.
While the economic landscape remains challenging
due to the ongoing supply constraints, and significantly higher
steel and material costs and a tight labor market, Gencor continues
to deliver to ensure that we meet our customers’ equipment needs.
We are optimistic that the passage of the $1.2 trillion
infrastructure bill will provide a catalyst for our markets for the
next few years. We believe this clarity will drive many states to
accelerate their long deferred infrastructure projects.”
Gencor Industries 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. Consolidated Income
Statements For the Years Ended September 30, 2021
and 2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
Net
revenue |
$ |
85,278,000 |
|
$ |
77,420,000 |
|
Cost of
goods sold |
|
67,100,000 |
|
|
58,467,000 |
|
Gross
profit |
|
18,178,000 |
|
|
18,953,000 |
|
Operating
expenses: |
|
|
Product engineering
and development |
|
4,278,000 |
|
|
3,061,000 |
|
Selling, general
and administrative |
|
13,199,000 |
|
|
10,356,000 |
|
Total
operating expenses |
|
17,477,000 |
|
|
13,417,000 |
|
|
|
|
Operating
income |
|
701,000 |
|
|
5,536,000 |
|
|
|
|
Other income
(expense), net: |
|
|
Interest and
dividend income, net of fees |
|
1,762,000 |
|
|
2,321,000 |
|
Realized and
unrealized gains (losses) on marketable securities, net |
|
4,171,000 |
|
|
(1,160,000 |
) |
Other |
|
- |
|
|
(16,000 |
) |
|
|
5,933,000 |
|
|
1,145,000 |
|
|
|
|
Income
before income tax expense |
|
6,634,000 |
|
|
6,681,000 |
|
Income tax
expense |
|
829,000 |
|
|
1,150,000 |
|
Net
income |
$ |
5,805,000 |
|
$ |
5,531,000 |
|
|
|
|
|
|
|
Basic
earnings per common share |
$ |
0.40 |
|
$ |
0.38 |
|
|
|
|
Diluted
earnings per common share |
$ |
0.39 |
|
$ |
0.38 |
|
|
|
|
GENCOR
INDUSTRIES, INC. Consolidated Balance
Sheets As of September 30, 2021 and
2020 |
ASSETS |
|
2021 |
|
|
2020 |
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
23,232,000 |
|
$ |
35,584,000 |
Marketable securities at fair value (cost of $93,690,000 at
September 30, 2021 and $89,514,000 at September 30, 2020) |
|
94,976,000 |
|
|
89,498,000 |
Accounts receivable, less allowance for doubtful accounts of
$321,000 at September 30, 2021 and $442,000 at September 30,
2020 |
|
2,622,000 |
|
|
1,992,000 |
Costs and estimated earnings in excess of billings |
|
1,903,000 |
|
|
6,405,000 |
Inventories, net |
|
41,888,000 |
|
|
27,090,000 |
Prepaid expenses |
|
2,202,000 |
|
|
1,189,000 |
Total current assets |
|
166,823,000 |
|
|
161,758,000 |
Property and
equipment, net |
|
11,801,000 |
|
|
8,341,000 |
Other
long-term assets |
|
838,000 |
|
|
995,000 |
Total Assets |
$ |
179,462,000 |
|
$ |
171,094,000 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
3,105,000 |
|
$ |
1,728,000 |
Customer deposits |
|
5,244,000 |
|
|
3,853,000 |
Accrued expenses |
|
2,645,000 |
|
|
2,605,000 |
Current operating lease liabilities |
|
393,000 |
|
|
328,000 |
Total current liabilities |
|
11,387,000 |
|
|
8,514,000 |
Deferred and
other income taxes |
|
394,000 |
|
|
746,000 |
Non-current
operating lease liabilities |
|
392,000 |
|
|
614,000 |
Total liabilities |
|
12,173,000 |
|
|
9,874,000 |
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 and 12,287,337 shares issued and
outstanding at September 30, 2021 and 2020, respectively |
|
1,234,000 |
|
|
1,229,000 |
Class B Stock, par value $.10 per share; 6,000,000 shares
authorized; 2,318,857 shares issued and outstanding at
September 30, 2021 and 2020 |
|
232,000 |
|
|
232,000 |
Capital in excess of par value |
|
12,590,000 |
|
|
12,331,000 |
Retained earnings |
|
153,233,000 |
|
|
147,428,000 |
Total shareholders’ equity |
|
167,289,000 |
|
|
161,220,000 |
Total
Liabilities and Shareholders’ Equity |
$ |
179,462,000 |
|
$ |
171,094,000 |
|
|
|
|
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, demand for
the Company’s products, the duration and scope of the coronavirus
(“COVID-19”) pandemic, actions governments, and businesses take in
response to the COVID-19 pandemic, including mandatory business
closures; the impact of the pandemic and actions taken on regional
economies; the pace of recovery when the COVID-19 pandemic
subsides. 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, 2021: (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
Gencor Industries (AMEX:GENC)
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