UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report: January 31, 2020
(Date of earliest event reported)
GENCOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
5201 North Orange Blossom Trail, Orlando, Florida 32810
(Address of principal executive offices) (Zip Code)
(407) 290-6000
(Registrants telephone number, including area code)
Delaware | 001-11703 | 59-0933147 | ||
(State or other jurisdiction of incorporated or organization) |
Commission File Number |
(I.R.S. Employer Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered or to be registered pursuant to Section 12(b) of the Act
Title of Each Class |
Trading Symbol(s) |
Name of Exchange on which registered | ||
Common Stock ($.10 Par Value) | GENC | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On January 31, 2020 Gencor Industries, Inc. issued a press release announcing its financial results for the first quarter of fiscal 2020. A copy of the press release is attached as Exhibit 99.1.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Earnings Release dated January 31, 2020
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GENCOR INDUSTRIES, INC. | ||||||
January 31, 2020 | By: | /s/ John E. Elliott | ||||
John E. Elliott, Chief Executive Officer | ||||||
January 31, 2020 | By: | /s/ Eric E. Mellen | ||||
Eric E. Mellen, Chief Financial Officer |
Exhibit 99.1
GENCOR RELEASES FIRST QUARTER FISCAL 2020 RESULTS
January 31, 2020 (PRIME NEWSWIRE) - Gencor Industries, Inc. (Nasdaq: GENC) announced today net revenues of $18.0 million for the quarter ended December 31, 2019 compared to $21.3 million for the quarter ended December 31, 2018. Gross margins were 24.0% for the quarter ended December 31, 2019 compared to 23.1% for the quarter ended December 31, 2018. The improved gross margins resulted from an increased percentage of total revenues from parts and component sales compared to prior year. Product engineering and development expenses increased $43,000 to $766,000 on increased headcount for the quarter ended December 31, 2019. Selling, general and administrative (SG&A) expenses increased $192,000 to $2,382,000 for the quarter ended December 31, 2018. Increased travel expenses and professional fees resulted in the increase in SG&A expenses. Operating income for the quarter ended December 31, 2019 was $1.2 million compared to $2.0 million for the quarter ended December 31, 2018 on lower revenues and higher SG&A expenses.
For the quarter ended December 31, 2019, the Company had non-operating income of $1.9 million compared to non-operating expense of $1.6 million for the quarter ended December 31, 2018. Included in non-operating income for the quarter ended December 31, 2019 were net realized and unrealized gains on marketable securities of $1,317,000, due to a strong domestic stock market from October through December of 2019. The effective income tax rate for the quarter ended December 31, 2019 was 20.0%, compared to 19.9% for the quarter ended December 31, 2018. Net income for the quarter ended December 31, 2019 was $2.5 million, or $0.17 per basic and diluted share, compared to net income of $0.3 million, or $0.02 per basic and diluted share for the quarter ended December 31, 2018.
At December 31, 2019, the Company had $121.6 million of cash and marketable securities, up from $115.6 million at September 30, 2019. Net working capital was $151.7 million at December 31, 2019. The Company had no short-term or long-term debt outstanding at December 31, 2019.
The Companys backlog was $30.9 million at December 31, 2019 compared to $34.8 million at December 31, 2018.
John Elliott, Gencors CEO, commented, First quarter revenues of $18 million were slightly lower than the prior year as some customers delayed receiving their equipment until the second fiscal quarter due to permitting and other issues unrelated to the company. This resulted in deferral of associated revenues into the next quarter.
Sales activity was steady throughout the quarter and reflected a typical first quarter level. We anticipate sales to continue to be at historical norms for the remainder of fiscal 2020.
Gross profit margin for the first quarter improved as a higher portion of revenues were from parts and component sales which tend to have higher margins than asphalt plant sales. Also, steel plate prices were lower than the first quarter of 2019, contributing to lower comparable cost of sales. The company closely monitors steel prices and from time to time has locked in prices with key suppliers for six to twelve months.
The company continues to invest in its engineering and sales efforts to expand its product line and geographic reach. Gencor will be exhibiting at the 2020 ConExpo-Con/Agg show in March. These growth initiatives have resulted in moderately higher SG&A.
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.
GENCOR INDUSTRIES, INC. Condensed Consolidated Statements of Income (Unaudited)
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For the Quarters Ended December 31, |
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2019 | 2018 | |||||||
Net revenue |
$ | 18,030,000 | $ | 21,327,000 | ||||
Costs and expenses: |
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Production costs |
13,710,000 | 16,410,000 | ||||||
Product engineering and development |
766,000 | 723,000 | ||||||
Selling, general and administrative |
2,382,000 | 2,190,000 | ||||||
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16,858,000 | 19,323,000 | |||||||
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Operating income |
1,172,000 | 2,004,000 | ||||||
Other income (expense), net: |
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Interest and dividend income, net of fees |
632,000 | 534,000 | ||||||
Realized and unrealized gains (losses) on marketable securities, net |
1,317,000 | (2,147,000 | ) | |||||
Other |
(10,000 | ) | | |||||
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1,939,000 | (1,613,000 | ) | ||||||
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Income before income tax expense |
3,111,000 | 391,000 | ||||||
Income tax expense |
622,000 | 78,000 | ||||||
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Net income |
$ | 2,489,000 | $ | 313,000 | ||||
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Basic Income per Common Share: |
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Net income per share |
$ | 0.17 | $ | 0.02 | ||||
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Diluted Income per Common Share: |
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Net income per share |
$ | 0.17 | $ | 0.02 | ||||
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GENCOR INDUSTRIES, INC. Condensed Consolidated Balance Sheets
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December 31, | September 30, | |||||||
2019 | 2019 | |||||||
(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 14,343,000 | $ | 10,302,000 | ||||
Marketable securities at fair value (cost $104,896,000 at December 31, 2019 and $104,176,000 at September 30, 2019) |
107,232,000 | 105,322,000 | ||||||
Accounts receivable, less allowance for doubtful accounts of $476,000 at December 31, 2019 and $459,000 at September 30, 2019 |
1,662,000 | 1,603,000 | ||||||
Costs and estimated earnings in excess of billings |
13,383,000 | 13,838,000 | ||||||
Inventories, net |
25,691,000 | 25,366,000 | ||||||
Prepaid expenses & other current assets |
1,454,000 | 499,000 | ||||||
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Total Current Assets |
163,765,000 | 156,930,000 | ||||||
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Property and equipment, net |
7,977,000 | 8,389,000 | ||||||
Other assets |
53,000 | 53,000 | ||||||
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Total Assets |
$ | 171,795,000 | $ | 165,372,000 | ||||
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LIABILITIES AND SHAREHOLDERS EQUITY |
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Current Liabilities: |
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Accounts payable |
$ | 2,714,000 | $ | 1,907,000 | ||||
Customer deposits |
4,921,000 | 1,918,000 | ||||||
Accrued expenses |
4,423,000 | 2,660,000 | ||||||
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Total Current Liabilities |
12,058,000 | 6,485,000 | ||||||
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Deferred and other income taxes |
1,715,000 | 3,372,000 | ||||||
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Total Liabilities |
13,773,000 | 9,857,000 | ||||||
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Commitments and contingencies |
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Shareholders equity: |
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Preferred stock, par value $.10 per share; authorized 300,000 shares; none issued |
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Common stock, par value $.10 per share; 15,000,000 shares authorized; 12,277,337 shares issued and outstanding at December 31, 2019 and September 30, 2019, respectively |
1,228,000 | 1,228,000 | ||||||
Class B Stock, par value $.10 per share; 6,000,000 shares authorized; 2,308,857 shares issued and outstanding at December 31, 2019 and September 30, 2019, respectively |
231,000 | 231,000 | ||||||
Capital in excess of par value |
12,177,000 | 12,159,000 | ||||||
Retained earnings |
144,386,000 | 141,897,000 | ||||||
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Total Shareholders Equity |
158,022,000 | 155,515,000 | ||||||
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Total Liabilities and Shareholders Equity |
$ | 171,795,000 | $ | 165,372,000 | ||||
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Caution Concerning Forward Looking StatementsThis 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, 2019; (a) Risk Factors in Part I, Item 1A and (b) Managements 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 Officer | |
407-290-6000 |