UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
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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 May 14, 2021 Gencor Industries, Inc. issued a press release announcing its financial results for the second quarter of fiscal 2021. 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 May 14, 2021 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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. | ||||||||
| May 14, 2021 | By: | /s/ John E. Elliott |
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| John E. Elliott, Chief Executive Officer | ||||||||
| May 14, 2021 | By: | /s/ Eric E. Mellen |
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| Eric E. Mellen, Chief Financial Officer | ||||||||
Index to Exhibits
| Exhibit No. |
Description | |
| 99.1 | Earnings Release dated May 14, 2021 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
Exhibit 99.1
GENCOR RELEASES SECOND QUARTER FISCAL 2021 RESULTS
May 14, 2021 (PRIME NEWSWIRE) - Gencor Industries, Inc. (Nasdaq: GENC) announced today net revenues of $21.4 million for the quarter ended March 31, 2021 compared to $26.0 million for the quarter ended March 31, 2020. Gross margins for the quarter ended March 31, 2021 were 28.8% compared with 28.2% for the quarter ended March 31, 2020. During the quarter ended March 31, 2021, the Company continued to experience higher manufacturing costs associated with steel and OEM parts pricing, as well as unabsorbed manufacturing labor and overhead expenses related to the paver line. The negative effect of these higher manufacturing costs on the quarter ended March 31, 2021, was offset by improved margins on certain equipment sales recognized over time and increased parts sales, in dollars and as a percentage of total net revenues, at higher margins.
Product engineering and development expenses increased $0.4 million to $1.1 million for the quarter ended March 31, 2021, as compared to $0.7 million for the quarter ended March 31, 2020, primarily related to the paver product line. Selling, general and administrative (“SG&A”) expenses increased by $1.3 million to $3.8 million for the quarter ended March 31, 2021, compared to the quarter ended March 31, 2020. The increase in SG&A expenses was due to expenses related to establishing the paver line and professional fees to support business development efforts.
Operating income decreased from $4.1 million for the quarter ended March 31, 2020 to $1.2 million for the quarter ended March 31, 2021, due primarily to the operational and start-up costs related to the Blaw-Knox acquisition and professional fees to support business development efforts.
For the quarter ended March 31, 2021, the Company had non-operating income of $1.6 million compared to non-operating expense of $4.9 million for the quarter ended March 31, 2020. Included in non-operating expense for the quarter ended March 31, 2020 were net realized and unrealized losses on marketable securities of $5.7 million, due to the decline in the domestic equity markets in March 2020. The effective income tax rate for the quarter ended March 31, 2021, and benefit for the quarter ended March 31, 2020, was 20%. Net income for the quarter ended March 31, 2021 was $2.3 million, or $0.16 per diluted share, compared with a net loss of $(0.7) million, or $(0.04) per diluted share for the quarter ended March 31, 2020.
For the six months ended March 31, 2021 the Company had net revenue of $40.3 million and net income of $3.8 million ($0.26 per diluted share) versus net revenue of $44.0 million and net income of $1.8 million ($0.12 per diluted share) for the six months ended March 31, 2020.
At March 31, 2021, the Company had $123.1 million of cash and marketable securities compared to $125.1 million at September 30, 2020. Net working capital was $153.6 million at March 31, 2021. The Company had no short-term or long-term debt outstanding at March 31, 2021.
The Company’s backlog was $42.6 million at March 31, 2021 compared to $24.5 million at March 31, 2020.
John Elliott, Gencor’s CEO, stated, “Despite higher raw material and associated purchased goods costs, Gencor was able to maintain gross margins in the second quarter. Revenues were modest compared to the second quarter of fiscal 2020 primarily due to a higher portion of revenue recognition from contracts recognized over time in fiscal 2020. Production and deliveries were minimally affected by COVID-19 related precautions in the quarter. Steel prices continued to increase and lead times on purchased goods remain a challenge.
We have experienced a pickup in demand for our equipment since the November 2020 election. Backlog exceeded $42M going into the third quarter, which is well above historic norms. We see renewed optimism that additional Federal infrastructure funding should be approved in the second half of 2021.
Our recently acquired Blaw-Knox brand and associated assets has been successfully moved to a separate manufacturing facility, where production of asphalt pavers has begun. Parts sales for the paver products have been steady. We anticipate continuing to invest in the brand to expand the market for both the equipment and parts sales.”
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 Operations
(Unaudited)
| For the Quarters Ended March 31, |
For the Six Months Ended March 31, |
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| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net revenue |
$ | 21,352,000 | $ | 25,993,000 | $ | 40,316,000 | $ | 44,023,000 | ||||||||
| Cost of goods sold |
15,206,000 | 18,655,000 | 31,189,000 | 32,365,000 | ||||||||||||
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| Gross profit |
6,146,000 | 7,338,000 | 9,127,000 | 11,658,000 | ||||||||||||
| Operating expenses: |
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| Product engineering and development |
1,069,000 | 689,000 | 1,914,000 | 1,455,000 | ||||||||||||
| Selling, general and administrative |
3,838,000 | 2,561,000 | 7,032,000 | 4,943,000 | ||||||||||||
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| Total operating expenses |
4,907,000 | 3,250,000 | 8,946,000 | 6,398,000 | ||||||||||||
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| Operating income (loss) |
1,239,000 | 4,088,000 | 181,000 | 5,260,000 | ||||||||||||
| Other income (expense), net: |
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| Interest and dividend income, net of fees |
327,000 | 763,000 | 1,130,000 | 1,395,000 | ||||||||||||
| Net realized and unrealized gains (losses) on marketable securities, net |
1,294,000 | (5,670,000 | ) | 3,488,000 | (4,353,000 | ) | ||||||||||
| Other |
— | — | — | (10,000 | ) | |||||||||||
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| 1,621,000 | (4,907,000 | ) | 4,618,000 | (2,968,000 | ) | |||||||||||
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| Income (loss) before income tax expense (benefit) |
2,860,000 | (819,000 | ) | 4,799,000 | 2,292,000 | |||||||||||
| Income tax expense (benefit) |
572,000 | (164,000 | ) | 960,000 | 458,000 | |||||||||||
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| Net income (loss) |
$ | 2,288,000 | $ | (655,000 | ) | $ | 3,839,000 | $ | 1,834,000 | |||||||
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| Basic Income (Loss) per Common Share |
$ | 0.16 | $ | (0.04 | ) | $ | 0.26 | $ | 0.13 | |||||||
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| Diluted Income (Loss) per Common Share |
$ | 0.16 | $ | (0.04 | ) | $ | 0.26 | $ | 0.12 | |||||||
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GENCOR INDUSTRIES, INC.
Condensed Consolidated Balance Sheets
| March 31, 2021 (Unaudited) |
September 30, 2020 |
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| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 29,417,000 | $ | 35,584,000 | ||||
| Marketable securities at fair value (cost of $91,159,000 at March 31, 2021 and $89,514,000 at September 30, 2020) |
93,646,000 | 89,498,000 | ||||||
| Accounts receivable, less allowance for doubtful accounts of $373,000 at March 31, 2021 and $442,000 at September 30, 2020 |
3,543,000 | 1,992,000 | ||||||
| Costs and estimated earnings in excess of billings |
— | 6,405,000 | ||||||
| Inventories, net |
38,104,000 | 27,090,000 | ||||||
| Prepaid expenses |
1,204,000 | 1,189,000 | ||||||
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| Total current assets |
165,914,000 | 161,758,000 | ||||||
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| Property and equipment, net |
12,252,000 | 8,341,000 | ||||||
| Other long-term assets |
1,054,000 | 995,000 | ||||||
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| Total Assets |
$ | 179,220,000 | $ | 171,094,000 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 2,697,000 | $ | 1,728,000 | ||||
| Customer deposits |
6,026,000 | 3,853,000 | ||||||
| Accrued expenses |
3,134,000 | 2,605,000 | ||||||
| Current operating lease liabilities |
412,000 | 328,000 | ||||||
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| Total current liabilities |
12,269,000 | 8,514,000 | ||||||
| Deferred and other income taxes |
1,247,000 | 746,000 | ||||||
| Non-current operating lease liabilities |
589,000 | 614,000 | ||||||
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| Total liabilities |
14,105,000 | 9,874,000 | ||||||
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| Commitments and contingencies |
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| Shareholders’ equity: |
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| Preferred stock, par value $.10 per share; 300,000 shares authorized; none issued |
— | — | ||||||
| Common stock, par value $.10 per share; 15,000,000 shares authorized; 12,298,337 shares and 12,287,337 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively |
1,230,000 | 1,229,000 | ||||||
| Class B Stock, par value $.10 per share; 6,000,000 shares authorized; 2,318,857 shares issued and outstanding at March 31, 2021 and September 30, 2020 |
232,000 | 232,000 | ||||||
| Capital in excess of par value |
12,386,000 | 12,331,000 | ||||||
| Retained earnings |
151,267,000 | 147,428,000 | ||||||
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| Total shareholders’ equity |
165,115,000 | 161,220,000 | ||||||
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| Total Liabilities and Shareholders’ Equity |
$ | 179,220,000 | $ | 171,094,000 | ||||
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Caution Concerning Forward Looking Statements - This 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, 2020; (a) “Risk Factors” in Part I, Item 1A and (b) “Management’s 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
Document and Entity Information |
May 14, 2021 |
|---|---|
| Cover [Abstract] | |
| Entity Registrant Name | GENCOR INDUSTRIES INC |
| Amendment Flag | false |
| Entity Central Index Key | 0000064472 |
| Document Type | 8-K |
| Document Period End Date | May 14, 2021 |
| Entity Address, Address Line One | 5201 North Orange Blossom Trail |
| Entity Address, City or Town | Orlando |
| Entity Address, State or Province | FL |
| Entity Address, Postal Zip Code | 32810 |
| City Area Code | (407) |
| Local Phone Number | 290-6000 |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 001-11703 |
| Entity Tax Identification Number | 59-0933147 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock ($.10 Par Value) |
| Trading Symbol | GENC |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | false |