Gencor Industries, Inc. (the “Company” or “Gencor”) (NYSE American
LLC: GENC) announced today net revenues increased 33.4% to
$40,676,000 for the quarter ended March 31, 2024 compared with
$30,501,000 for the quarter ended March 31, 2023. Gross profit
margins for the quarter ended March 31, 2024 were 30.3% compared
with 29.8% for the quarter ended March 31, 2023 on improved
absorption on increased production and favorable price realization.
Product engineering and development expenses
increased $19,000 to $893,000 for the quarter ended March 31, 2024,
as compared to $874,000 for the quarter ended March 31, 2023.
Selling, general and administrative (“SG&A”) expenses increased
$1,295,000 to $4,357,000 for the quarter ended March 31, 2024,
compared to $3,062,000 for the quarter ended March 31, 2023. The
increase in SG&A expenses was primarily due to increased trade
show expenses, professional fees and commissions on higher
sales.
Operating income increased 37.0% or $1,911,000
from $5,161,000 for the quarter ended March 31, 2023 to $7,072,000
for the quarter ended March 31, 2024, on significantly higher net
revenue.
For the quarter ended March 31, 2024, the Company
had net non-operating income of $1,008,000 compared to $1,257,000
for the quarter ended March 31, 2023. The decrease was primarily
due to a decrease in gains on marketable securities as the Company
sold most of its equities in January 2023. Interest and dividend
income, net of fees, was $803,000 in the quarter ended March 31,
2024 as compared to $565,000 in the quarter ended March 31, 2023.
The increase was primarily due to higher rates earned on cash and
fixed income investments. The net realized and unrealized gains on
marketable securities were $205,000 for the quarter ended March 31,
2024 compared to $692,000 for the quarter ended March 31, 2023.
The effective income tax rates for the quarters
ended March 31, 2024 and March 31, 2023, were 23.0% and 24.1%,
respectively, based on the expected annual effective income tax
rate.
Net income for the quarter ended March 31, 2024
increased 27.7% to $6,222,000, or $0.42 basic and diluted earnings
per share, from $4,873,000, or $0.33 basic and diluted earnings per
share, for the quarter ended March 31, 2023. The improved net
income and earnings per share resulted primarily from the increased
net revenue.
For the six months ended March 31, 2024 the
Company had net revenue of $66,694,000 and net income of
$10,548,000 ($0.72 per diluted share) versus net revenue of
$56,327,000 and net income of $8,349,000 ($0.57 per diluted share)
for the six months ended March 31, 2023.
At March 31, 2024, the Company had $117,107,000 of
cash and marketable securities compared to $101,283,000 at
September 30, 2023. Net working capital was $176,523,000 at March
31, 2024. The Company had no short-term or long-term debt
outstanding at March 31, 2024.
The Company’s backlog was $50.4 million at March
31, 2024 compared to $37.4 million at March 31, 2023.
Marc Elliott, Gencor’s President, commented,
“Second quarter results were strong across the board, further
demonstrating our successful strategy centered on top-line growth
and solid margin performance. During the quarter, we continued to
see healthy demand for our equipment despite the high-interest rate
environment. Our backlog of $50.4 million is 34.8% higher than the
prior year. It represents continued optimism from highway
contractors that the Federal government and many states continue to
focus on investing in America’s infrastructure.
I am also pleased to report that Gencor had a
strong showing at the World of Asphalt show in March, with
higher-than-normal attendance, which portends continued industry
confidence via the Infrastructure Investment and Jobs Act. We
remain well-positioned to capitalize on our success and new
opportunities going forward.”
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 March
31, |
|
For the Six Months Ended March
31, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Net
revenue |
$ |
40,676,000 |
|
$ |
30,501,000 |
|
$ |
66,694,000 |
|
$ |
56,327,000 |
Cost of
goods sold |
|
28,354,000 |
|
|
21,404,000 |
|
|
46,838,000 |
|
|
41,415,000 |
Gross
profit |
|
12,322,000 |
|
|
9,097,000 |
|
|
19,856,000 |
|
|
14,912,000 |
Operating
expenses: |
|
|
|
|
|
|
|
Product engineering
and development |
|
893,000 |
|
|
874,000 |
|
|
1,694,000 |
|
|
1,771,000 |
Selling, general
and administrative |
|
4,357,000 |
|
|
3,062,000 |
|
|
7,707,000 |
|
|
5,861,000 |
Total
operating expenses |
|
5,250,000 |
|
|
3,936,000 |
|
|
9,401,000 |
|
|
7,632,000 |
|
|
|
|
|
|
|
|
Operating
income |
|
7,072,000 |
|
|
5,161,000 |
|
|
10,455,000 |
|
|
7,280,000 |
|
|
|
|
|
|
|
|
Other income
(expense), net: |
|
|
|
|
|
|
|
Interest and
dividend income, net of fees |
|
803,000 |
|
|
565,000 |
|
|
1,519,000 |
|
|
1,058,000 |
Net realized and
unrealized gains (losses) on marketable securities |
|
205,000 |
|
|
692,000 |
|
|
1,724,000 |
|
|
2,654,000 |
Total other
income (expense), net |
|
1,008,000 |
|
|
1,257,000 |
|
|
3,243,000 |
|
|
3,712,000 |
|
|
|
|
|
|
|
|
Income
before income tax expense |
|
8,080,000 |
|
|
6,418,000 |
|
|
13,698,000 |
|
|
10,992,000 |
Income tax
expense |
|
1,858,000 |
|
|
1,545,000 |
|
|
3,150,000 |
|
|
2,643,000 |
Net income |
$ |
6,222,000 |
|
$ |
4,873,000 |
|
$ |
10,548,000 |
|
$ |
8,349,000 |
|
|
|
|
|
|
|
|
Net income
per common share – basic and diluted |
$ |
0.42 |
|
$ |
0.33 |
|
$ |
0.72 |
|
$ |
0.57 |
|
|
|
|
|
|
|
|
GENCOR
INDUSTRIES, INC. Condensed Consolidated Balance
Sheets (Unaudited) |
|
ASSETS |
March 31, 2024 |
|
September 30, 2023 |
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
30,213,000 |
|
$ |
17,031,000 |
Marketable securities at fair value (cost of $87,006,000 at March
31, 2024 and $85,514,000 at September 30, 2023) |
|
86,894,000 |
|
|
84,252,000 |
Accounts receivable, less allowance for credit losses of $398,000
at March 31, 2024 and $545,000 at September 30, 2023 |
|
5,758,000 |
|
|
2,467,000 |
Costs and estimated earnings in excess of billings |
|
2,469,000 |
|
|
1,508,000 |
Inventories, net |
|
63,732,000 |
|
|
71,527,000 |
Prepaid expenses and other current assets |
|
1,216,000 |
|
|
2,169,000 |
Total current assets |
|
190,282,000 |
|
|
178,954,000 |
|
|
|
|
|
|
Property and
equipment, net |
|
12,296,000 |
|
|
13,246,000 |
Deferred and
other income taxes |
|
2,902,000 |
|
|
3,167,000 |
Other
long-term assets |
|
562,000 |
|
|
381,000 |
Total Assets |
$ |
206,042,000 |
|
$ |
195,748,000 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
2,944,000 |
|
$ |
3,269,000 |
Customer deposits |
|
7,945,000 |
|
|
6,815,000 |
Accrued expenses |
|
2,513,000 |
|
|
3,753,000 |
Current operating lease liabilities |
|
357,000 |
|
|
328,000 |
Total current liabilities |
|
13,759,000 |
|
|
14,165,000 |
|
|
|
|
Non-current
operating lease liabilities |
|
152,000 |
|
|
- |
Total liabilities |
|
13,911,000 |
|
|
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 March 31, 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 March 31, 2024 and
September 30, 2023 |
|
232,000 |
|
|
232,000 |
Capital in excess of par value |
|
12,590,000 |
|
|
12,590,000 |
Retained earnings |
|
178,075,000 |
|
|
167,527,000 |
Total shareholders’ equity |
|
192,131,000 |
|
|
181,583,000 |
Total
Liabilities and Shareholders’ Equity |
$ |
206,042,000 |
|
$ |
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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