Gencor Industries, Inc. (Nasdaq: GENC) (the “Company”) announced
today net revenues of $20.1 million for the quarter ended December
31, 2021 compared to $19.0 million for the quarter ended December
31, 2020 due to higher parts revenues. There were no revenues
generated by the Blaw-Knox paver product line during the quarter
ended December 31, 2020, as the facility was not in production.
Gross margins were 18.4% for the quarter ended December 31, 2021
compared to 15.7% for the quarter ended December 31, 2020. Due to
the absence of revenues from Blaw-Knox in the quarter ended
December 31, 2020, overall gross profit margins were negatively
impacted by the unabsorbed manufacturing labor and overhead
expenses.
Product engineering and development expenses increased $504,000
to $1,349,000 for the quarter ended December 31, 2021, as compared
to $845,000 for the quarter ended December 31, 2020, due primarily
to increased headcount and salaries related to the Blaw-Knox paver
product line. Selling, general and administrative (“SG&A”)
expenses increased by $205,000 to $3,399,000 for the quarter ended
December 31, 2021, compared to the quarter ended December 31, 2020.
The increase in SG&A expenses was primarily due to a full
quarter of SG&A wages and benefits related to Blaw-Knox
employees.
The Company had an operating loss $(1,043,000) for the quarter
ended December 31, 2021 compared to an operating loss of
$(1,058,000) for the quarter ended December 31, 2020. The improved
net revenues and gross profit for the quarter ended December 31,
2021, were offset by increased operating expenses.
For the quarter ended December 31, 2021, the Company had net
non-operating income of $0.7 million compared to net non-operating
income of $3.0 million for the quarter ended December 31, 2020.
Interest income for the quarter ended December 31, 2020, included
$456,000 collected from a customer due to permitting delays.
Included in net non-operating income for the quarter ended December
31, 2021 were net realized and unrealized gains on marketable
securities of $0.4 million compared to $2.2 million for the quarter
ended December 31, 2020. The higher gains in fiscal 2021 were due
to a stronger domestic stock market during the quarter ended
December 31, 2020.
The effective income tax rate for the quarters ended December
31, 2021 and December 31, 2020 was 20.0%. Net loss for the quarter
ended December 31, 2021 was $(0.3) million, or $(0.02) 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,
2020.
At December 31, 2021, the Company had $116.9 million of cash and
marketable securities compared to $118.2 million at September 30,
2021. Net working capital was $154.9 million at December 31, 2021
compared to $155.4 million at September 30, 2021. The Company had
no short-term or long-term debt outstanding at December 31,
2021.
The Company’s backlog was $58.0 million at December 31, 2021
compared to $32.1 million at December 31, 2020.
Marc Elliott, Gencor’s President, commented, “We began fiscal
2022 with a strong backlog due to increased customer demand and
optimism of the $1.2 trillion Federal infrastructure bill. Sales
inquiries continue to be elevated, giving us confidence that we
should benefit from the incremental Federal highway funds for the
next few years.
First quarter revenues of $20 million reflect a moderate
increase from the prior year. We continue to manage through supply
chain disruptions and logistic bottlenecks and hope that by the
second half of the year many of these issues will have abated.
Commodity and component inflation will also continue to be a
challenge into fiscal 2022.
We are looking forward to exhibiting at the World of Asphalt
show in March 2022 and we expect to generate significant interest
based on positive market feedback from our loyal customers.”
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.Condensed
Consolidated Statements of OperationsFor the
Quarters Ended December 31, 2021 and
2020(Unaudited) |
|
|
2021 |
|
|
2020 |
|
|
|
|
Net
revenue |
$20,106,000 |
|
$18,964,000 |
|
Cost of goods sold |
|
16,401,000 |
|
|
15,983,000 |
|
Gross profit |
|
3,705,000 |
|
|
2,981,000 |
|
|
|
|
Operating expenses: |
|
|
Product engineering and development |
|
1,349,000 |
|
|
845,000 |
|
Selling, general and administrative |
|
3,399,000 |
|
|
3,194,000 |
|
Total
operating expenses |
|
4,748,000 |
|
|
4,039,000 |
|
|
|
|
Operating (loss) |
|
(1,043,000) |
|
|
(1,058,000) |
|
|
|
|
Other
income (expense), net: |
|
|
Interest and dividend income, net of fees |
|
277,000 |
|
|
804,000 |
|
Realized and unrealized gains on marketable securities, net |
|
423,000 |
|
|
2,193,000 |
|
|
|
700,000 |
|
|
2,997,000 |
|
|
|
|
Income
(loss) before income tax expense (benefit) |
|
(343,000) |
|
|
1,939,000 |
|
Income
tax expense (benefit) |
|
(69,000) |
|
|
388,000 |
|
Net
income (loss) |
$(274,000) |
|
$1,551,000 |
|
|
|
|
|
|
|
Basic
income (loss) per common share |
$(0.02) |
|
$0.11 |
|
|
|
|
Diluted
income (loss) per common share |
$(0.02) |
|
$0.11 |
|
|
|
|
GENCOR INDUSTRIES, INC.Condensed
Consolidated Balance Sheets |
ASSETS |
December 31,2021(Unaudited) |
|
September 30,2021 |
Current
assets: |
|
|
|
Cash and cash equivalents |
$21,248,000 |
|
$23,232,000 |
Marketable securities at fair value (cost of $94,329,000 at
December 31, 2021 and $93,690,000 at September 30, 2021) |
|
95,682,000 |
|
|
94,976,000 |
Accounts receivable, less allowance for doubtful accounts of
$378,000 at December 31, 2021 and $321,000 at September 30,
2021 |
|
3,376,000 |
|
|
2,622,000 |
Costs and estimated earnings in excess of billings |
|
1,225,000 |
|
|
1,903,000 |
Inventories, net |
|
45,734,000 |
|
|
41,888,000 |
Prepaid expenses |
|
3,372,000 |
|
|
2,202,000 |
Total current assets |
|
170,637,000 |
|
|
166,823,000 |
Property
and equipment, net |
|
12,051,000 |
|
|
11,801,000 |
Other
long-term assets |
|
778,000 |
|
|
838,000 |
Total Assets |
$183,466,000 |
|
$179,462,000 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$4,455,000 |
|
$3,105,000 |
Customer deposits |
|
8,697,000 |
|
|
5,244,000 |
Accrued expenses |
|
2,167,000 |
|
|
2,645,000 |
Current operating lease liabilities |
|
417,000 |
|
|
393,000 |
Total current liabilities |
|
15,736,000 |
|
|
11,387,000 |
Deferred
and other income taxes |
|
407,000 |
|
|
394,000 |
Non-current operating lease liabilities |
|
308,000 |
|
|
392,000 |
Total liabilities |
|
16,451,000 |
|
|
12,173,000 |
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 December 31,
2021 and September 30, 2021 |
|
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 December 31, 2021 and
September 30, 2021 |
|
232,000 |
|
|
232,000 |
Capital in excess of par value |
|
12,590,000 |
|
|
12,590,000 |
Retained earnings |
|
152,959,000 |
|
|
153,233,000 |
Total shareholders’ equity |
|
167,015,000 |
|
|
167,289,000 |
Total
Liabilities and Shareholders’ Equity |
$183,466,000 |
|
$179,462,000 |
|
|
|
|
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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