QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction |
(IRS Employer | |
of incorporation or organization) |
Identification No.) |
Title of Each Class |
Trading Symbol(s) |
Name of Exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated Filer | ☐ | |||
☒ | Smaller Reporting Company | |||||
Emerging Growth Company |
Class |
Outstanding at May 10, 2022 | |
Common stock, $.10 par value |
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Class B stock, $.10 par value |
Index |
Page |
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Part I. |
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Item 1. |
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4 | ||||||||
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6 | ||||||||
7 | ||||||||
8 | ||||||||
Item 2. |
15 | |||||||
Item 3. |
21 | |||||||
Item 4. |
21 | |||||||
Part II. |
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Item 1. |
Legal Proceedings | 22 | ||||||
Item 1A. |
Risk Factors | 22 | ||||||
Item 6. |
Exhibits | 22 | ||||||
23 |
March 31, 2022 (Unaudited) |
September 30, 2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Marketable securities at fair value (cost of $ |
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Accounts receivable, less allowance for doubtful accounts of $ |
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Costs and estimated earnings in excess of billings |
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Inventories, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Other long-term assets |
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Total Assets |
$ | $ | ||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Customer deposits |
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Accrued expenses |
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Current operating lease liabilities |
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Total current liabilities |
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Deferred and other income taxes |
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Non-current operating lease liabilities |
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Total liabilities |
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Commitments and contingencies |
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Shareholders’ equity: |
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Preferred stock, par value $ |
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Common stock, par value $ |
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Class B Stock, par value $ |
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Capital in excess of par value |
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Retained earnings |
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Total shareholders’ equity |
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Total Liabilities and Shareholders’ Equity |
$ | $ | ||||||
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For the Quarters Ended March 31, |
For the Six Months Ended March 31, |
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2022 |
2021 |
2022 |
2021 |
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Net revenue |
$ | $ | $ | $ | ||||||||||||
Cost of goods sold |
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Gross profit |
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Operating expenses: |
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Product engineering and development |
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Selling, general and administrative |
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Total operating expenses |
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Operating income |
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Other income (expense), net: |
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Interest and dividend income, net of fees |
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Net realized and unrealized gains (losses) on marketable securities, net |
( |
) | ( |
) | ||||||||||||
Other |
( |
) | — | ( |
) | — | ||||||||||
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( |
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Income before income tax expense |
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Income tax expense |
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Net income |
$ | $ | $ | $ | ||||||||||||
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Basic income per common share |
$ | $ | $ | $ | ||||||||||||
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Diluted income per common share |
$ | $ | $ | $ | ||||||||||||
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For the Six Months Ended March 31, 2022 |
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Common Stock | Class B Stock | Capital in Excess of |
Retained | Total Shareholders’ |
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Shares | Amount | Shares | Amount | Par Value | Earnings | Equity | ||||||||||||||||||||||
September 30, 2021 |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
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December 31, 2021 |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
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March 31, 2022 |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
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For the Six Months Ended March 31, 2021 |
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Common Stock | Class B Stock | Capital in Excess of |
Retained | Total Shareholders’ |
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Shares | Amount | Shares | Amount | Par Value | Earnings | Equity | ||||||||||||||||||||||
September 30, 2020 |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
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December 31, 2020 |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Stock options exercised |
— | — | — | |||||||||||||||||||||||||
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March 31, 2021 |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
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2022 |
2021 |
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Cash flows from operating activities: |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to cash provided by operating activities: |
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Purchase of marketable securities |
( |
) | ( |
) | ||||
Proceeds from sale and maturity of marketable securities |
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Change in value of marketable securities |
( |
) | ||||||
Deferred and other income taxes |
( |
) | ||||||
Depreciation and amortization |
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Provision for doubtful accounts |
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Changes in assets and liabilities, excluding the initial effects of business acquisitions: |
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Accounts receivable |
( |
) | ( |
) | ||||
Costs and estimated earnings in excess of billings |
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Inventories |
( |
) | ( |
) | ||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable |
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Customer deposits |
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Accrued expenses |
( |
) | ||||||
Total adjustments |
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Cash flows provided by operating activities |
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Cash flows from investing activities: |
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Acquisition of Blaw-Knox assets |
— | ( |
) | |||||
Capital expenditures |
( |
) | ( |
) | ||||
Cash flows used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
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Proceeds from stock option exercises |
— | |||||||
Cash flows provided by financing activities |
— | |||||||
Net decrease in cash and cash equivalents |
( |
) | ( |
) | ||||
Cash and cash equivalents at: |
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Beginning of period |
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End of period |
$ | $ | ||||||
Non-cash investing and financing activities: |
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Operating lease right-of-use |
$ | — | $ | |||||
Operating lease liabilities |
$ | — | $ |
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equities |
$ | $ | $ | $ | ||||||||||||
Mutual Funds |
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Exchange-Traded Funds |
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Corporate Bonds |
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Government Securities |
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Cash and Money Funds |
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Total |
$ | $ | $ | $ | ||||||||||||
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Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equities |
$ | $ | $ | $ | ||||||||||||
Mutual Funds |
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Exchange-Traded Funds |
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Corporate Bonds |
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Government Securities |
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Cash and Money Funds |
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Total |
$ | $ | $ | $ | ||||||||||||
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March 31, 2022 |
September 30, 2021 |
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Raw materials |
$ | $ | ||||||
Work in process |
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Finished goods |
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Used equipment |
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$ | $ | |||||||
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March 31, 2022 |
September 30, 2021 |
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Costs incurred on uncompleted contracts |
$ | $ | ||||||
Estimated earnings |
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Billings to date |
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Costs and estimated earnings in excess of billings |
$ | $ | ||||||
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Quarter Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net Income |
$ | $ | $ | $ | ||||||||||||
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Common Shares: |
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Weighted average common shares outstanding |
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Effect of dilutive stock options |
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Diluted shares outstanding |
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Basic: |
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Net income per share |
$ | $ | $ | $ | ||||||||||||
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Diluted: |
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Net income per share |
$ | $ | $ | $ | ||||||||||||
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Quarter Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Equipment sales recognized over time |
$ | $ | $ | $ | ||||||||||||
Equipment sales recognized at a point in time |
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Parts and component sales |
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Freight revenue |
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Other |
( |
) | ( |
) | ||||||||||||
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Net revenue |
$ | $ | $ | $ | ||||||||||||
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March 31, 2022 | September 30, 2021 | |||||||
Operating lease ROU asset included in other long-term assets |
$ | $ | ||||||
Current operating lease liability |
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Non-current operating lease liability |
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Weighted average remaining lease term (in years) |
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Weighted average discount rate used in calculating ROU asset |
% | % |
Fiscal Year |
Annual Lease Payments | |||
2022 (remaining 6 months) |
$ | |||
2023 |
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2024 |
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Total |
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Less interest |
( |
) | ||
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Present value of lease liabilities |
$ | |||
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Exhibit 31.1 | Certification of Principal Executive Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended | |
Exhibit 31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended | |
Exhibit 32 | Certifications of Principal Executive Officer and Chief Financial Officer Pursuant to 18 U. S. C. Section 1350 | |
Exhibit 101.1 | Interactive Data File | |
Exhibit 101.INS | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
Exhibit 101.SCH | XBRL Schema Document | |
Exhibit 101.CAL | XBRL Calculation Linkbase Document | |
Exhibit 101.DEF | XBRL Definition Linkbase Document | |
Exhibit 101.LAB | XBRL Label Linkbase Document | |
Exhibit 101.PRE | XBRL Presentation Linkbase Document | |
Exhibit 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL (included in Exhibit 101) |
GENCOR INDUSTRIES, INC. |
/s/ Marc G. Elliott |
Marc G. Elliott |
President |
(Principal Executive Officer) |
May 13, 2022 |
/s/ Eric E. Mellen |
Eric E. Mellen |
Chief Financial Officer |
(Principal Financial and Accounting Officer) |
May 13, 2022 |
Exhibit 31.1
CERTIFICATIONS
I, Mr. Marc G. Elliott, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Gencor Industries, Inc. |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
4. | The registrants other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting, and; |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 13, 2022 | /s/ Marc G. Elliott | |||||
Marc G. Elliott | ||||||
President | ||||||
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Mr. Eric E. Mellen, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Gencor Industries, Inc. |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
4. | The registrants other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting, and; |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 13, 2022 | /s/ Eric E. Mellen | |||||
Eric E. Mellen | ||||||
Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Gencor Industries, Inc. (the Company) on Form 10-Q for the quarter and six months ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Marc G. Elliott |
Marc G. Elliott |
President |
(Principal Executive Officer) |
May 13, 2022
/s/ Eric E. Mellen |
Eric E. Mellen |
Chief Financial Officer |
(Principal Financial and Accounting Officer) |
May 13, 2022
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) |
Mar. 31, 2022 |
Sep. 30, 2021 |
---|---|---|
Marketable securities, cost | $ 94,746,000 | $ 93,690,000 |
Accounts receivable, allowance for doubtful accounts | $ 349,000 | $ 321,000 |
Preferred stock, par value | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 300,000 | 300,000 |
Preferred stock, shares issued | 0 | 0 |
Common Stock [Member] | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 12,338,845 | 12,338,845 |
Common stock, shares outstanding | 12,338,845 | 12,338,845 |
Class B Stock [Member] | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 6,000,000 | 6,000,000 |
Common stock, shares issued | 2,318,857 | 2,318,857 |
Common stock, shares outstanding | 2,318,857 | 2,318,857 |
Condensed Consolidated Income Statements - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Statement [Abstract] | ||||
Net revenue | $ 30,654,000 | $ 21,352,000 | $ 50,760,000 | $ 40,316,000 |
Cost of goods sold | 24,462,000 | 15,206,000 | 40,863,000 | 31,189,000 |
Gross profit | 6,192,000 | 6,146,000 | 9,897,000 | 9,127,000 |
Operating expenses: | ||||
Product engineering and development | 920,000 | 1,069,000 | 2,269,000 | 1,914,000 |
Selling, general and administrative | 3,364,000 | 3,838,000 | 6,763,000 | 7,032,000 |
Total operating expenses | 4,284,000 | 4,907,000 | 9,032,000 | 8,946,000 |
Operating income | 1,908,000 | 1,239,000 | 865,000 | 181,000 |
Other income (expense), net: | ||||
Interest and dividend income, net of fees | 296,000 | 327,000 | 573,000 | 1,130,000 |
Net realized and unrealized gains (losses) on marketable securities, net | (1,488,000) | 1,294,000 | (1,065,000) | 3,488,000 |
Other | (137,000) | (137,000) | ||
Other income (expense),net | (1,329,000) | 1,621,000 | (629,000) | 4,618,000 |
Income before income tax expense | 579,000 | 2,860,000 | 236,000 | 4,799,000 |
Income tax expense | 140,000 | 572,000 | 71,000 | 960,000 |
Net income | $ 439,000 | $ 2,288,000 | $ 165,000 | $ 3,839,000 |
Basic income per common share | $ 0.03 | $ 0.16 | $ 0.01 | $ 0.26 |
Diluted income per common share | $ 0.03 | $ 0.16 | $ 0.01 | $ 0.26 |
Condensed Consolidated Statements of Shareholders' Equity - USD ($) |
Total |
Common Stock [Member] |
Capital in Excess of Par Value [Member] |
Retained Earnings [Member] |
Class B Stock [Member]
Common Stock [Member]
|
---|---|---|---|---|---|
Beginning balance at Sep. 30, 2020 | $ 161,220,000 | $ 1,229,000 | $ 12,331,000 | $ 147,428,000 | $ 232,000 |
Beginning balance, shares at Sep. 30, 2020 | 12,287,337 | 2,318,857 | |||
Net income (loss) | 1,551,000 | 1,551,000 | |||
Ending balance at Dec. 31, 2020 | 162,771,000 | $ 1,229,000 | 12,331,000 | 148,979,000 | $ 232,000 |
Ending balance, shares at Dec. 31, 2020 | 12,287,337 | 2,318,857 | |||
Beginning balance at Sep. 30, 2020 | 161,220,000 | $ 1,229,000 | 12,331,000 | 147,428,000 | $ 232,000 |
Beginning balance, shares at Sep. 30, 2020 | 12,287,337 | 2,318,857 | |||
Net income (loss) | 3,839,000 | ||||
Ending balance at Mar. 31, 2021 | 165,115,000 | $ 1,230,000 | 12,386,000 | 151,267,000 | $ 232,000 |
Ending balance, shares at Mar. 31, 2021 | 12,298,337 | 2,318,857 | |||
Beginning balance at Dec. 31, 2020 | 162,771,000 | $ 1,229,000 | 12,331,000 | 148,979,000 | $ 232,000 |
Beginning balance, shares at Dec. 31, 2020 | 12,287,337 | 2,318,857 | |||
Net income (loss) | 2,288,000 | 2,288,000 | |||
Stock options exercised | 56,000 | $ 1,000 | 55,000 | ||
Stock options exercised, shares | 11,000 | ||||
Ending balance at Mar. 31, 2021 | 165,115,000 | $ 1,230,000 | 12,386,000 | 151,267,000 | $ 232,000 |
Ending balance, shares at Mar. 31, 2021 | 12,298,337 | 2,318,857 | |||
Beginning balance at Sep. 30, 2021 | 167,289,000 | $ 1,234,000 | 12,590,000 | 153,233,000 | $ 232,000 |
Beginning balance, shares at Sep. 30, 2021 | 12,338,845 | 2,318,857 | |||
Net income (loss) | (274,000) | (274,000) | |||
Ending balance at Dec. 31, 2021 | 167,015,000 | $ 1,234,000 | 12,590,000 | 152,959,000 | $ 232,000 |
Ending balance, shares at Dec. 31, 2021 | 12,338,845 | 2,318,857 | |||
Beginning balance at Sep. 30, 2021 | 167,289,000 | $ 1,234,000 | 12,590,000 | 153,233,000 | $ 232,000 |
Beginning balance, shares at Sep. 30, 2021 | 12,338,845 | 2,318,857 | |||
Net income (loss) | 165,000 | ||||
Ending balance at Mar. 31, 2022 | 167,454,000 | $ 1,234,000 | 12,590,000 | 153,398,000 | $ 232,000 |
Ending balance, shares at Mar. 31, 2022 | 12,338,845 | 2,318,857 | |||
Beginning balance at Dec. 31, 2021 | 167,015,000 | $ 1,234,000 | 12,590,000 | 152,959,000 | $ 232,000 |
Beginning balance, shares at Dec. 31, 2021 | 12,338,845 | 2,318,857 | |||
Net income (loss) | 439,000 | 439,000 | |||
Ending balance at Mar. 31, 2022 | $ 167,454,000 | $ 1,234,000 | $ 12,590,000 | $ 153,398,000 | $ 232,000 |
Ending balance, shares at Mar. 31, 2022 | 12,338,845 | 2,318,857 |
Basis of Presentation |
6 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 - Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the quarter and six months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending September 30, 2022. The accompanying Condensed Consolidated Balance Sheet at September 30, 2021 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. On October 1, 2020, the Company acquired the Blaw-Knox paver line and associated assets, including inventory, fixed assets and related intellectual property, from Volvo CE. The acquisition provided the Company entry into the asphalt paver sector of the asphalt industry. The acquisition was accounted for as a business combination under ASC 805, “Business Combinations.” The initial purchase price of approximately $14.4 million, which was subject to post-closing adjustments, was funded by cash on hand. After post-closing adjustments transacted during the quarter ended March 31, 2021, the final purchase price was $13.8 million, including $10.4 million in inventory and $3.4 million in fixed assets. There were no liabilities assumed. The accompanying condensed consolidated financial statements as of March 31, 2022 and September 30, 2021, and for the quarters and six months ended March 31, 2022 and 2021, include the assets, liabilities and operating results of the paver line as of and for the periods then ended. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended September 30, 2021 filed with the Securities and Exchange Commission on December 17, 2021. Recent Accounting Pronouncements There were no accounting pronouncements recently issued or newly effective that had, or are expected to have, a material impact on the Company’s consolidated financial statements. COVID-19 Pandemic The Company continues to monitor and evaluate the risks to public health and the slowdown in overall business activity related to the COVID-19 pandemic, including impacts on its employees, customers, suppliers and financial results. As of the date of issuance of this Quarterly Report, the Company’s operations have not been significantly impacted. However, the full impact of the COVID-19 pandemic continues to evolve subsequent to the quarter ended March 31, 2022 and as of the date this Quarterly Report is issued. As such, the full magnitude that the COVID-19 pandemic will have on the Company’s financial condition and future results of operations is uncertain. Management continues to monitor the situation on the Company’s financial condition, operations, suppliers, industry, customers, and workforce. As the spread of COVID-19 and its variants continues, the Company’s ability to meet customer demands for products may be impacted or its customers may experience adverse business consequences due to COVID-19 and its variants. Reduced demand for products or ability to meet customer demand (including as a result of disruptions at the Company’s suppliers) could have a material adverse effect on its business operations and financial performance. Global, market and economic conditions may negatively impact our business, financial condition and share price. Concerns over inflation, geopolitical issues, global financial markets and the COVID-19 pandemic have led to increased economic instability and expectations of slower global economic growth. Our business may be adversely affected by any such economic instability or unpredictability. Russia’s invasion of Ukraine and related sanctions has led to increased oil and natural gas prices. Such sanctions and disruptions to the global economy may lead to additional inflation and may disrupt the global supply chain and could have a material adverse effect on our ability to secure supplies. The increased cost of oil, along with increased or prolonged periods of inflation, would likely increase our costs in the form of higher wages, further inflation on supplies and equipment necessary to operate our business. There is a risk that one or more of our suppliers could be negatively affected by global economic instability, which could adversely affect our ability to operate efficiently and timely complete our operational goals. |
Marketable Securities and Fair Value Measurements |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities and Fair Value Measurements | Note 2 - Marketable Securities and Fair Value Measurements Marketable debt and equity securities are categorized as trading securities and are thus marked to market and stated at fair value. Fair value is determined using the quoted closing or latest bid prices for Level 1 investments and market standard valuation methodologies for Level 2 investments. Realized gains and losses on investment transactions are determined by specific identification and are recognized as incurred in the condensed consolidated income statements. Net changes in unrealized gains and losses are reported in the condensed consolidated income statements in the current period. Fair Value Measurements The fair value of financial instruments is presented based upon a hierarchy of levels that prioritizes the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The fair value of marketable equity securities (stocks), mutual funds, exchange-traded funds, government securities, and cash and money funds, are substantially based on quoted market prices (Level 1). Corporate bonds are valued using market standard valuation methodologies, including: discounted cash flow methodologies, and matrix pricing or other similar techniques. The inputs to these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, maturity, estimated duration and assumptions regarding liquidity and estimated future cash flows. In addition to bond characteristics, the valuation methodologies incorporate market data, such as actual trades completed, bids and actual dealer quotes, where such information is available. Accordingly, the estimated fair values are based on available market information and judgments about financial instruments (Level 2). Fair values of the Level 2 investments are provided by the Company’s professional investment management firms. From time to time the Company may transfer cash between its marketable securities portfolio and operating cash and cash equivalents. The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of March 31, 2022:
Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2022, were $(1,598,000) and $(1,531,000), respectively. The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2021:
Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2021, were $596,000 and $2,503,000, respectively. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, customer deposits and accrued expenses approximate fair value because of the short-term nature of these items. |
Inventories |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Note 3 – Inventories Inventories are valued at the lower of cost or net realizable value with cost being determined under the first in, first out method and net realizable value defined as the estimated selling price of goods less reasonable costs of completion and delivery. Appropriate consideration is given to obsolescence, excessive levels, deterioration, possible alternative uses and other factors in determining net realizable value. The cost of work in process and finished goods includes materials, direct labor, variable costs and overhead. The Company evaluates the need to record inventory adjustments on all inventories, including raw material, work in process, finished goods, spare parts and used equipment. Used equipment acquired by the Company on trade-in from customers is carried at estimated net realizable value. Unless specific circumstances warrant different treatment regarding inventory obsolescence, an allowance is established to reduce the cost basis of inventories to four years old by 50%, the cost basis of inventories to five years old by 75%, and the cost basis of inventories greater than five years old to zero. Inventory is typically reviewed for obsolescence on an annual basis computed as of September 30, the Company’s fiscal year end. If significant known changes in trends, technology or other specific circumstances that warrant consideration occur during the year, then the impact on obsolescence is considered at that time. Net inventories at March 31, 2022 and September 30, 2021 consist of the following:
Slow-moving and obsolete inventory allowances were $6,828,000 and $5,397,000 at March 31, 2022 and September 30, 2021, respectively. |
Costs and Estimated Earnings in Excess of Billings |
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Costs and Estimated Earnings in Excess of Billings | Note 4 – Costs and Estimated Earnings in Excess of Billings Costs and estimated earnings in excess of billings on uncompleted contracts as of March 31, 2022 and September 30, 2021 consist of the following:
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Earnings per Share Data |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share Data | Note 5 – Earnings per Share Data The Condensed Consolidated Financial Statements include basic and diluted earnings per share information. The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended March 31, 2022 and 2021:
Basic earnings per share are based on the weighted-average number of shares outstanding. Diluted earnings per share are based on the sum of the weighted-average number of shares outstanding plus common stock equivalents. As of September 30, 2021, no options were available for granting of awards under the 2009 Incentive Compensation Plan (the “2009 Plan”) and as of November 1, 2021, there were no outstanding stock options under the 2009 Plan. For the quarter and six months ended M arch 31, 2022, there were no common stock equivalents included in the diluted earnings per share calculation. The weighted-average shares issuable upon the exercise of stock options included in the diluted earnings per share calculation for the quarter ended March 31, 2021 were 252,000, which equates to 133,000 dilutive common stock equivalents. The weighted-average shares issuable upon the exercise of stock options included in the diluted earnings per share calculation for the six months ended March 31, 2021 were 252,000, which equates to 129,000 dilutive common stock equivalents. There were no anti-dilutive shares for the quarter and six months ended March 31, 2022 and March 31, 2021. |
Customers with 10% (or greater) of Net Revenues |
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Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Customers with 10% (or greater) of Net Revenues | Note 6 – Customers with 10% (or greater) of Net Revenues During the quarter ended March 31, 2022, one customer accounted for 13.6% of net revenues. During the quarter ended March 31, 2021, one other customer accounted for 12.0% of net revenues. During the six months ended March 31, 2022 and March 31, 2021, no customer accounted for 10% or greater of net revenues. |
Income Taxes |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 – Income Taxes Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and primarily consist of taxes currently due, plus deferred taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns using current tax rates. The Company and its domestic subsidiaries file a consolidated federal income tax return. Deferred tax assets and liabilities are measured using the rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse and the credits are expected to be used. The effect on deferred tax assets and liabilities of the change in tax rates is recognized in income in the period that includes the enactment date. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, the Company is more likely than not to realize the benefit of a deferred tax asset and whether a valuation allowance is needed for some portion or all of a deferred tax asset. No such valuation allowances were recorded as of March 31, 2022 and September 30, 2021. The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax provision in any period will be affected by, among other things, permanent, as well as temporary differences in the deductibility of certain items, in addition to changes in tax legislation. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, its tax expense divided by pre-tax book income) from period to period. The Company’s effective tax rates for the quarters and six months ended March 31, 2022 and March 31, 2021 reflect the impact of the reduced rates under the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act) which was signed into law on December 22, 2017. |
Revenue Recognition and Related Costs |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition and Related Costs | Note 8 – Revenue Recognition and Related Costs The Company recognizes revenue under ASU No. 2014-09, Revenue from Contracts with Customers
Revenues from contracts with customers for the design, manufacture and sale of custom equipment are recognized over time when the performance obligation is satisfied by transferring control of the equipment. Control of the equipment transfers over time, as the equipment is unique to the specific contract and thus does not create an asset with an alternative use to the Company. Revenues and costs are recognized in proportion to actual labor costs incurred, as compared with total estimated labor costs expected to be incurred, during the entire contract. All incremental costs related to obtaining a contract are expensed as incurred, as the amortization period is less than one year. Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined. Contract assets (excluding accounts receivable) under contracts with customers represent revenue recognized in excess of amounts billed on equipment sales recognized over time. These contract assets were $1,629,000 at March 31, 2022 and $1,903,000 at September 30, 2021, and are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheets. The Company anticipates that all of the contract assets at March 31, 2022, will be billed and collected within one year. Revenues from all other contracts for the design and manufacture of equipment, for service and for parts sales, net of any discounts and return allowances, are recorded at a point in time when control of the goods or services has been transferred. Control of the goods or service typically transfers at time of shipment or upon completion of the service. Payment for equipment under contract with customers is typically due prior to shipment. Payment for services under contract with customers is due as services are completed. Accounts receivable related to contracts with customers for equipment sales were $130,000 and $210,000 at March 31, 2022 and September 30, 2021, respectively. Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized. Under certain contracts with customers, recognition of a portion of the consideration received may be deferred and recorded as a contract liability if the Company has to satisfy a future obligation, such as to provide installation assistance. There were no contract liabilities other than customer deposits at March 31, 2022 and September 30, 2021. Customer deposits related to contracts with customers were $10,286,000 and $5,244,000 at March 31, 2022 and September 30, 2021, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets. The Company records revenues earned for shipping and handling as freight revenue at the time of shipment, regardless of whether or not it is identified as a separate performance obligation. The cost of shipping and handling is classified as cost of goods sold concurrently with the revenue recognition. All product engineering and development costs, and selling, general and administrative expenses are charged to operations as incurred. Provision is made for any anticipated contract losses in the period that the loss becomes evident. The allowance for doubtful accounts is determined by performing a specific review of all account balances greater than 90 days past due and other higher risk amounts to determine collectability, and also adjusting for any known customer payment issues with account balances in the less-than-90-day |
Leases |
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Leases | Note 9 – Leases The Company leases certain equipment under non-cancelable operating leases. Future minimum rental payments under these leases at March 31, 2022 were immaterial. On August 28, 2020, the Company entered into a three-year operating lease for property related to the manufacturing and warehousing of the Blaw-Knox paver product line which was acquired on October 1, 2020. The lease term is for the period beginning on September 1, 2020 through August 31, 2023. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $970,000 and related lease liabilities at inception. On October 9, 2020, the Company entered into an operating lease for additional warehousing space for Blaw-Knox inventory. The original lease term was for one year beginning November 2020 with automatic one-year renewals. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $254,000 and related lease liabilities at inception. An additional $39,000 was recorded as a ROU asset and related lease liability in October 2021 to reflect the impact of the lease renewal. In March 2022, the ROU asset and related liability was reduced by $39,000 to reflect the impact of a reduction in the square footage being leased. For the quarter and six months ended March 31, 2022, operating lease costs were $101,000 and $202,000, respectively, and cash payments related to these operating leases were $107,000 and $216,000, respectively. For the quarter and six months ended March 31, 2021, operating lease costs were $105,000 and $194,000, respectively, and cash payments related to these operating leases were $116,000 and $232,000, respectively. Other information concerning the Company’s operating lease accounted for under ASC 842 guidelines as of March 31, 2022 and September 30, 2021, is as follows:
Future annual minimum lease payments as of March 31, 2022 are as follows:
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Segment Information |
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Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Note 10 – Segment Information The Company has one reporting segment, equipment for the highway construction industry. Based on evaluation of the criteria of ASC 280 – Segment Reporting, including the nature of products and services, the nature of the production processes, the type of customers and the methods used to distribute products and services, the Company determined that its operating segments meet the requirements for aggregation. The Company designs, manufactures and sells asphalt plants and pavers, combustion systems and fluid heat transfer systems for the highway construction industry and environmental and petrochemical markets. The Company’s products are manufactured at three facilities in the United States. The Company also services and sells parts for its equipment. |
Basis of Presentation (Policies) |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements There were no accounting pronouncements recently issued or newly effective that had, or are expected to have, a material impact on the Company’s consolidated financial statements. |
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COVID-19 Pandemic | COVID-19 Pandemic The Company continues to monitor and evaluate the risks to public health and the slowdown in overall business activity related to the COVID-19 pandemic, including impacts on its employees, customers, suppliers and financial results. As of the date of issuance of this Quarterly Report, the Company’s operations have not been significantly impacted. However, the full impact of the COVID-19 pandemic continues to evolve subsequent to the quarter ended March 31, 2022 and as of the date this Quarterly Report is issued. As such, the full magnitude that the COVID-19 pandemic will have on the Company’s financial condition and future results of operations is uncertain. Management continues to monitor the situation on the Company’s financial condition, operations, suppliers, industry, customers, and workforce. As the spread of
COVID-19 and its variants continues, the Company’s ability to meet customer demands for products may be impacted or its customers may experience adverse business consequences due to COVID-19 and its variants. Reduced demand for products or ability to meet customer demand (including as a result of disruptions at the Company’s suppliers) could have a material adverse effect on its business operations and financial performance. |
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Marketable Securities | Marketable debt and equity securities are categorized as trading securities and are thus marked to market and stated at fair value. Fair value is determined using the quoted closing or latest bid prices for Level 1 investments and market standard valuation methodologies for Level 2 investments. Realized gains and losses on investment transactions are determined by specific identification and are recognized as incurred in the condensed consolidated income statements. Net changes in unrealized gains and losses are reported in the condensed consolidated income statements in the current period. |
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Fair Value Measurements | Fair Value Measurements The fair value of financial instruments is presented based upon a hierarchy of levels that prioritizes the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The fair value of marketable equity securities (stocks), mutual funds, exchange-traded funds, government securities, and cash and money funds, are substantially based on quoted market prices (Level 1). Corporate bonds are valued using market standard valuation methodologies, including: discounted cash flow methodologies, and matrix pricing or other similar techniques. The inputs to these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, maturity, estimated duration and assumptions regarding liquidity and estimated future cash flows. In addition to bond characteristics, the valuation methodologies incorporate market data, such as actual trades completed, bids and actual dealer quotes, where such information is available. Accordingly, the estimated fair values are based on available market information and judgments about financial instruments (Level 2). Fair values of the Level 2 investments are provided by the Company’s professional investment management firms. From time to time the Company may transfer cash between its marketable securities portfolio and operating cash and cash equivalents. The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of March 31, 2022:
Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2022, were $(1,598,000) and $(1,531,000), respectively. The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2021:
Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2021, were $596,000 and $2,503,000, respectively. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, customer deposits and accrued expenses approximate fair value because of the short-term nature of these items. |
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Inventories | Inventories are valued at the lower of cost or net realizable value with cost being determined under the first in, first out method and net realizable value defined as the estimated selling price of goods less reasonable costs of completion and delivery. Appropriate consideration is given to obsolescence, excessive levels, deterioration, possible alternative uses and other factors in determining net realizable value. The cost of work in process and finished goods includes materials, direct labor, variable costs and overhead. The Company evaluates the need to record inventory adjustments on all inventories, including raw material, work in process, finished goods, spare parts and used equipment. Used equipment acquired by the Company on trade-in from customers is carried at estimated net realizable value. Unless specific circumstances warrant different treatment regarding inventory obsolescence, an allowance is established to reduce the cost basis of inventories to four years old by 50%, the cost basis of inventories to five years old by 75%, and the cost basis of inventories greater than five years old to zero. Inventory is typically reviewed for obsolescence on an annual basis computed as of September 30, the Company’s fiscal year end. If significant known changes in trends, technology or other specific circumstances that warrant consideration occur during the year, then the impact on obsolescence is considered at that time. |
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Earnings per Share | The Condensed Consolidated Financial Statements include basic and diluted earnings per share information. The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended March 31, 2022 and 2021:
Basic earnings per share are based on the weighted-average number of shares outstanding. Diluted earnings per share are based on the sum of the weighted-average number of shares outstanding plus common stock equivalents. As of September 30, 2021, no options were available for granting of awards under the 2009 Incentive Compensation Plan (the “2009 Plan”) and as of November 1, 2021, there were no outstanding stock options under the 2009 Plan. For the quarter and six months ended M arch 31, 2022, there were no common stock equivalents included in the diluted earnings per share calculation. The weighted-average shares issuable upon the exercise of stock options included in the diluted earnings per share calculation for the quarter ended March 31, 2021 were 252,000, which equates to 133,000 dilutive common stock equivalents. The weighted-average shares issuable upon the exercise of stock options included in the diluted earnings per share calculation for the six months ended March 31, 2021 were 252,000, which equates to 129,000 dilutive common stock equivalents. There were no anti-dilutive shares for the quarter and six months ended March 31, 2022 and March 31, 2021. |
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Income Taxes | Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and primarily consist of taxes currently due, plus deferred taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns using current tax rates. The Company and its domestic subsidiaries file a consolidated federal income tax return. Deferred tax assets and liabilities are measured using the rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse and the credits are expected to be used. The effect on deferred tax assets and liabilities of the change in tax rates is recognized in income in the period that includes the enactment date. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, the Company is more likely than not to realize the benefit of a deferred tax asset and whether a valuation allowance is needed for some portion or all of a deferred tax asset. No such valuation allowances were recorded as of March 31, 2022 and September 30, 2021. The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax provision in any period will be affected by, among other things, permanent, as well as temporary differences in the deductibility of certain items, in addition to changes in tax legislation. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, its tax expense divided by pre-tax book income) from period to period. The Company’s effective tax rates for the quarters and six months ended March 31, 2022 and March 31, 2021 reflect the impact of the reduced rates under the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act) which was signed into law on December 22, 2017. |
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Revenue Recognition and Related Costs | The Company recognizes revenue under ASU No. 2014-09, Revenue from Contracts with Customers
Revenues from contracts with customers for the design, manufacture and sale of custom equipment are recognized over time when the performance obligation is satisfied by transferring control of the equipment. Control of the equipment transfers over time, as the equipment is unique to the specific contract and thus does not create an asset with an alternative use to the Company. Revenues and costs are recognized in proportion to actual labor costs incurred, as compared with total estimated labor costs expected to be incurred, during the entire contract. All incremental costs related to obtaining a contract are expensed as incurred, as the amortization period is less than one year. Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined. Contract assets (excluding accounts receivable) under contracts with customers represent revenue recognized in excess of amounts billed on equipment sales recognized over time. These contract assets were $1,629,000 at March 31, 2022 and $1,903,000 at September 30, 2021, and are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheets. The Company anticipates that all of the contract assets at March 31, 2022, will be billed and collected within one year. Revenues from all other contracts for the design and manufacture of equipment, for service and for parts sales, net of any discounts and return allowances, are recorded at a point in time when control of the goods or services has been transferred. Control of the goods or service typically transfers at time of shipment or upon completion of the service. Payment for equipment under contract with customers is typically due prior to shipment. Payment for services under contract with customers is due as services are completed. Accounts receivable related to contracts with customers for equipment sales were $130,000 and $210,000 at March 31, 2022 and September 30, 2021, respectively. Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized. Under certain contracts with customers, recognition of a portion of the consideration received may be deferred and recorded as a contract liability if the Company has to satisfy a future obligation, such as to provide installation assistance. There were no contract liabilities other than customer deposits at March 31, 2022 and September 30, 2021. Customer deposits related to contracts with customers were $10,286,000 and $5,244,000 at March 31, 2022 and September 30, 2021, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets. The Company records revenues earned for shipping and handling as freight revenue at the time of shipment, regardless of whether or not it is identified as a separate performance obligation. The cost of shipping and handling is classified as cost of goods sold concurrently with the revenue recognition. All product engineering and development costs, and selling, general and administrative expenses are charged to operations as incurred. Provision is made for any anticipated contract losses in the period that the loss becomes evident. The allowance for doubtful accounts is determined by performing a specific review of all account balances greater than 90 days past due and other higher risk amounts to determine collectability, and also adjusting for any known customer payment issues with account balances in the
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Leases | The Company leases certain equipment under non-cancelable operating leases. Future minimum rental payments under these leases at March 31, 2022 were immaterial. On August 28, 2020, the Company entered into a three-year operating lease for property related to the manufacturing and warehousing of the Blaw-Knox paver product line which was acquired on October 1, 2020. The lease term is for the period beginning on September 1, 2020 through August 31, 2023. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $970,000 and related lease liabilities at inception. On October 9, 2020, the Company entered into an operating lease for additional warehousing space for Blaw-Knox inventory. The original lease term was for one year beginning November 2020 with automatic one-year renewals. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $254,000 and related lease liabilities at inception. An additional $39,000 was recorded as a ROU asset and related lease liability in October 2021 to reflect the impact of the lease renewal. In March 2022, the ROU asset and related liability was reduced by $39,000 to reflect the impact of a reduction in the square footage being leased. For the quarter and six months ended March 31, 2022, operating lease costs were $101,000 and $202,000, respectively, and cash payments related to these operating leases were $107,000 and $216,000, respectively. For the quarter and six months ended March 31, 2021, operating lease costs were $105,000 and $194,000, respectively, and cash payments related to these operating leases were $116,000 and $232,000, respectively. |
Marketable Securities and Fair Value Measurements (Tables) |
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Company's Marketable Securities Measured at Fair Value | The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of March 31, 2022:
The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2021:
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Inventories (Tables) |
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Net Inventories | Net inventories at March 31, 2022 and September 30, 2021 consist of the following:
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Costs and Estimated Earnings in Excess of Billings | Costs and estimated earnings in excess of billings on uncompleted contracts as of March 31, 2022 and September 30, 2021 consist of the following:
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Earnings per Share Data (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Earnings Per Share | The Condensed Consolidated Financial Statements include basic and diluted earnings per share information. The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended March 31, 2022 and 2021:
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Revenue Recognition and Related Costs (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Company's Net Revenue by Major Source | The Company recognizes revenue under ASU No. 2014-09, Revenue from Contracts with Customers
|
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Information Concerning the Company's Operating Lease | Other information concerning the Company’s operating lease accounted for under ASC 842 guidelines as of March 31, 2022 and September 30, 2021, is as follows:
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Summary of Future Annual Minimum Lease Payments | Future annual minimum lease payments as of March 31, 2022 are as follows:
|
Basis of Presentation - Additional Information (Detail) - BlawKnox Paver [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 01, 2020 |
Mar. 31, 2022 |
|
Basis Of Presentation [Line Items] | ||
Business combination purchase price | $ 14.4 | $ 13.8 |
Business combination included in inventory | 10.4 | |
Business combination included in fixed assets | $ 3.4 |
Marketable Securities and Fair Value Measurements - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Marketable Securities [Line Items] | ||||
Net unrealized gains (losses) | $ 1,598,000 | $ 596,000 | $ 1,531,000 | $ 2,503,000 |
Inventories - Net Inventories (Detail) - USD ($) |
Mar. 31, 2022 |
Sep. 30, 2021 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw materials | $ 29,847,000 | $ 25,858,000 |
Work in process | 7,858,000 | 6,280,000 |
Finished goods | 9,517,000 | 9,730,000 |
Used equipment | 0 | 20,000 |
Inventories, net | $ 47,222,000 | $ 41,888,000 |
Inventories - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2022 |
Sep. 30, 2021 |
|
Inventory [Line Items] | |||
Slow moving and obsolete inventory reserve | $ 6,828,000 | $ 6,828,000 | $ 5,397,000 |
Three to Four Years Old Inventory [Member] | |||
Inventory [Line Items] | |||
Cost basis reduction in inventory, percentage | 50.00% | ||
Inventory, minimum time period on the shelf, years | 3 years | ||
Inventory, maximum time period on the shelf, years | 4 years | ||
Four to Five Years Old Inventory [Member] | |||
Inventory [Line Items] | |||
Cost basis reduction in inventory, percentage | 75.00% | ||
Inventory, minimum time period on the shelf, years | 4 years | ||
Inventory, maximum time period on the shelf, years | 5 years | ||
Greater Than Five Years Old Inventory [Member] | |||
Inventory [Line Items] | |||
Inventory, minimum time period on the shelf, years | 5 years | ||
Inventory valuation estimate | $ 0 |
Costs and Estimated Earnings in Excess of Billings - Costs and Estimated Earnings in Excess of Billings (Detail) - USD ($) |
Mar. 31, 2022 |
Sep. 30, 2021 |
---|---|---|
Costs in Excess of Billings on Uncompleted Contracts or Programs [Abstract] | ||
Costs incurred on uncompleted contracts | $ 19,501,000 | $ 11,483,000 |
Estimated earnings | 5,875,000 | 4,395,000 |
Costs and estimated earnings on uncompleted contracts | 25,376,000 | 15,878,000 |
Billings to date | 23,747,000 | 13,975,000 |
Costs and estimated earnings in excess of billings | $ 1,629,000 | $ 1,903,000 |
Earnings per Share Data - Basic and Diluted Earnings Per Share (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | ||||||
Net Income | $ 439,000 | $ (274,000) | $ 2,288,000 | $ 1,551,000 | $ 165,000 | $ 3,839,000 |
Common Shares: | ||||||
Weighted average common shares outstanding | 14,658,000 | 14,614,000 | 14,658,000 | 14,611,000 | ||
Effect of dilutive stock options | 0 | 133,000 | 0 | 129,000 | ||
Diluted shares outstanding | 14,658,000 | 14,747,000 | 14,658,000 | 14,740,000 | ||
Basic: | ||||||
Net income per share | $ 0.03 | $ 0.16 | $ 0.01 | $ 0.26 | ||
Diluted: | ||||||
Net income per share | $ 0.03 | $ 0.16 | $ 0.01 | $ 0.26 |
Earnings Per Share Data - Additional Information (Detail) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Exercisable stock options, included in the diluted earnings per share calculation | 252,000 | 252,000 | ||
Effect of dilutive stock options | 0 | 133,000 | 0 | 129,000 |
2009 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||
Number of shares, options outstanding | 0 | 0 | ||
Inclusive Of Diluted Earning [Member] | ||||
Anti-dilutive shares | 0 | 0 | 0 | 0 |
Customers with 10% (or greater) of Net Revenues - Additional information (Detail) - Revenue [Member] - Customer Concentration Risk [Member] |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Customer One [Member] | ||||
Percentage of concentration | 13.60% | 12.00% | ||
No Customer [Member] | ||||
Percentage of concentration | 10.00% | 10.00% |
Income Taxes - Additional Information (Detail) - USD ($) |
Mar. 31, 2022 |
Sep. 30, 2021 |
---|---|---|
IncomeTaxes [Line Items] | ||
Valuation Allowance | $ 0 | $ 0 |
Revenue Recognition and Related Costs - Disaggregation of Company's Net Revenue by Major Source (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 30,654,000 | $ 21,352,000 | $ 50,760,000 | $ 40,316,000 |
Equipment Sales [Member] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 10,998,000 | 3,870,000 | 20,772,000 | 8,002,000 |
Equipment Sales [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 10,475,000 | 9,565,000 | 14,673,000 | 19,701,000 |
Parts and Component Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 7,381,000 | 6,830,000 | 12,824,000 | 10,761,000 |
Freight Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 1,495,000 | 1,147,000 | 2,079,000 | 1,892,000 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 305,000 | $ (60,000) | $ 412,000 | $ (40,000) |
Revenue Recognition and Related Costs - Additional Information (Detail) - USD ($) |
6 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Sep. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||
Amortization period for incremental costs | 1 year | |
Costs and estimated earnings in excess of billings | $ 1,629,000 | $ 1,903,000 |
Contract assets collection period | 1 year | |
Accounts receivable related to contracts with customers | $ 130,000 | 210,000 |
Current Liabilities [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Customer deposits related to contracts with customers | $ 10,286,000 | $ 5,244,000 |
Leases - Summary of Other Information Concerning the Company's Operating Lease (Detail) - USD ($) |
Mar. 31, 2022 |
Sep. 30, 2021 |
Oct. 09, 2020 |
Aug. 28, 2020 |
---|---|---|---|---|
Lessee, Lease, Description [Line Items] | ||||
Current operating lease liability | $ 407,000 | $ 393,000 | ||
Non-current operating lease liability | 189,000 | 392,000 | ||
New Lease Agreement [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease ROU asset included in other long-term assets | $ 254,000 | $ 970,000 | ||
Blaw Knox Product Line From Volvo CE [Member] | New Lease Agreement [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease ROU asset included in other long-term assets | 596,000 | 785,000 | ||
Current operating lease liability | 407,000 | 393,000 | ||
Non-current operating lease liability | $ 189,000 | $ 392,000 | ||
Weighted average remaining lease term (in years) | 1 year 6 months | 2 years | ||
Weighted average discount rate used in calculating ROU asset | 4.00% | 4.00% |
Leases - Summary of Future Annual Minimum Lease Payments (Detail) |
Mar. 31, 2022
USD ($)
|
---|---|
Minimum Lease Payments, Sale Leaseback Transactions, Fiscal Year Maturity [Abstract] | |
2022 (remaining 6 months) | $ 210,000 |
2023 | 398,000 |
2024 | 6,000 |
Total | 614,000 |
Less interest | (18,000) |
Present value of lease liabilities | $ 596,000 |
Leases - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Oct. 31, 2021 |
Sep. 30, 2021 |
Oct. 09, 2020 |
Aug. 28, 2020 |
|
Lessee, Lease, Description [Line Items] | |||||||||
Operating Lease, Expense | $ 101,000 | $ 105,000 | $ 202,000 | $ 194,000 | |||||
Operating lease term | 3 years | ||||||||
Operating leases paid in cash | $ 107,000 | $ 116,000 | 216,000 | $ 232,000 | |||||
New Lease Agreement [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Assets | $ 254,000 | $ 970,000 | |||||||
New Lease Agreement [Member] | Renewal Event | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Assets | $ 39,000 | ||||||||
New Lease Agreement [Member] | Square Footage Leased Event [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Decrease In Leasing Arrangements Right Of Use Asset And Lease Liability | 39,000 | ||||||||
Blaw Knox Product Line From Volvo CE [Member] | New Lease Agreement [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Assets | $ 596,000 | $ 596,000 | $ 785,000 | ||||||
Operating lease term | 1 year |
Segment Information - Additional Information (Detail) |
6 Months Ended |
---|---|
Mar. 31, 2022
Segment
| |
Segment Reporting [Abstract] | |
Number of repotable segments | 1 |
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