8-K
GENCOR INDUSTRIES INC (GENC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report: May 10, 2024
(Date of earliest event reported)
GENCOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
5201 North Orange Blossom Trail, Orlando, Florida 32810
(Address of principal executive offices) (Zip Code)
(407) 290-6000
(Registrant’s telephone number, including area code)
| Delaware | 001-11703 | 59-0933147 |
|---|---|---|
| (State or other jurisdiction of<br> <br>incorporated or organization) | Commission<br> <br>File Number | (I.R.S. Employer<br> <br>Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered or to be registered pursuant to Section 12(b) of the Act
| Title of Each Class | Trading<br>Symbol(s) | Name of Exchange<br> <br>on which registered |
|---|---|---|
| Common Stock ($.10 Par Value) | GENC | NYSE American LLC |
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 10, 2024 Gencor Industries, Inc. issued a press release announcing its financial results for the second quarter of fiscal 2024. 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 10, 2024 |
| --- | --- |
| 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 10, 2024 | By: | /s/ Marc G. Elliott |
| Marc G. Elliott, President | ||
| May 10, 2024 | By: | /s/ Eric E. Mellen |
| Eric E. Mellen, Chief Financial Officer |
Index to Exhibits
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Earnings Release dated May 10, 2024 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
EX-99.1
Exhibit 99.1
GENCOR RELEASES SECOND QUARTER FISCAL 2024 RESULTS
May 10, 2024 (PRIME NEWSWIRE) - Gencor Industries, Inc. (the “Company” or “Gencor”) (NYSE American LLC: GENC) announced today net revenues increased 33.4% to $40,676,000 for the quarter ended March 31, 2024 compared with $30,501,000 for the quarter ended March 31, 2023. Gross profit margins for the quarter ended March 31, 2024 were 30.3% compared with 29.8% for the quarter ended March 31, 2023 on improved absorption on increased production and favorable price realization.
Product engineering and development expenses increased $19,000 to $893,000 for the quarter ended March 31, 2024, as compared to $874,000 for the quarter ended March 31, 2023. Selling, general and administrative (“SG&A”) expenses increased $1,295,000 to $4,357,000 for the quarter ended March 31, 2024, compared to $3,062,000 for the quarter ended March 31, 2023. The increase in SG&A expenses was primarily due to increased trade show expenses, professional fees and commissions on higher sales.
Operating income increased 37.0% or $1,911,000 from $5,161,000 for the quarter ended March 31, 2023 to $7,072,000 for the quarter ended March 31, 2024, on significantly higher net revenue.
For the quarter ended March 31, 2024, the Company had net non-operating income of $1,008,000 compared to $1,257,000 for the quarter ended March 31, 2023. The decrease was primarily due to a decrease in gains on marketable securities as the Company sold most of its equities in January 2023. Interest and dividend income, net of fees, was $803,000 in the quarter ended March 31, 2024 as compared to $565,000 in the quarter ended March 31, 2023. The increase was primarily due to higher rates earned on cash and fixed income investments. The net realized and unrealized gains on marketable securities were $205,000 for the quarter ended March 31, 2024 compared to $692,000 for the quarter ended March 31, 2023.
The effective income tax rates for the quarters ended March 31, 2024 and March 31, 2023, were 23.0% and 24.1%, respectively, based on the expected annual effective income tax rate.
Net income for the quarter ended March 31, 2024 increased 27.7% to $6,222,000, or $0.42 basic and diluted earnings per share, from $4,873,000, or $0.33 basic and diluted earnings per share, for the quarter ended March 31, 2023. The improved net income and earnings per share resulted primarily from the increased net revenue.
For the six months ended March 31, 2024 the Company had net revenue of $66,694,000 and net income of $10,548,000 ($0.72 per diluted share) versus net revenue of $56,327,000 and net income of $8,349,000 ($0.57 per diluted share) for the six months ended March 31, 2023.
At March 31, 2024, the Company had $117,107,000 of cash and marketable securities compared to $101,283,000 at September 30, 2023. Net working capital was $176,523,000 at March 31, 2024. The Company had no short-term or long-term debt outstanding at March 31, 2024.
The Company’s backlog was $50.4 million at March 31, 2024 compared to $37.4 million at March 31, 2023.
Marc Elliott, Gencor’s President, commented, “Second quarter results were strong across the board, further demonstrating our successful strategy centered on top-line growth and solid margin performance. During the quarter, we continued to see healthy demand for our equipment despite the high-interest rate environment. Our backlog of $50.4 million is 34.8% higher than the prior year. It represents continued optimism from highway contractors that the Federal government and many states continue to focus on investing in America’s infrastructure.
I am also pleased to report that Gencor had a strong showing at the World of Asphalt show in March, with higher-than-normal attendance, which portends continued industry confidence via the Infrastructure Investment and Jobs Act. We remain well-positioned to capitalize on our success and new opportunities going forward.”
Gencor Industries, Inc. is a diversified heavy machinery manufacturer for the production of highway construction materials and equipment and environmentalcontrol machinery and equipment used in a variety of applications.
| GENCOR INDUSTRIES, INC.<br><br><br>Condensed Consolidated Income Statements<br><br><br>(Unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| For the Quarters Ended<br>March 31, | For the Six Months Ended<br>March 31, | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Net revenue | $ | 40,676,000 | $ | 30,501,000 | $ | 66,694,000 | $ | 56,327,000 |
| Cost of goods sold | 28,354,000 | 21,404,000 | 46,838,000 | 41,415,000 | ||||
| Gross profit | 12,322,000 | 9,097,000 | 19,856,000 | 14,912,000 | ||||
| Operating expenses: | ||||||||
| Product engineering and development | 893,000 | 874,000 | 1,694,000 | 1,771,000 | ||||
| Selling, general and administrative | 4,357,000 | 3,062,000 | 7,707,000 | 5,861,000 | ||||
| Total operating expenses | 5,250,000 | 3,936,000 | 9,401,000 | 7,632,000 | ||||
| Operating income | 7,072,000 | 5,161,000 | 10,455,000 | 7,280,000 | ||||
| Other income (expense), net: | ||||||||
| Interest and dividend income, net of fees | 803,000 | 565,000 | 1,519,000 | 1,058,000 | ||||
| Net realized and unrealized gains (losses) on marketable securities | 205,000 | 692,000 | 1,724,000 | 2,654,000 | ||||
| Total other income (expense), net | 1,008,000 | 1,257,000 | 3,243,000 | 3,712,000 | ||||
| Income before income tax expense | 8,080,000 | 6,418,000 | 13,698,000 | 10,992,000 | ||||
| Income tax expense | 1,858,000 | 1,545,000 | 3,150,000 | 2,643,000 | ||||
| Net income | $ | 6,222,000 | $ | 4,873,000 | $ | 10,548,000 | $ | 8,349,000 |
| Net income per common share – basic and diluted | $ | 0.42 | $ | 0.33 | $ | 0.72 | $ | 0.57 |
| GENCOR INDUSTRIES, INC.<br>Condensed Consolidated Balance Sheets<br>(Unaudited) | ||||||||
| --- | --- | --- | --- | |||||
| ASSETS | September 30,2023 | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 30,213,000 | $ | 17,031,000 | |||||
| Marketable securities at fair value (cost of 87,006,000 at March 31, 2024 and 85,514,000 at<br>September 30, 2023) | 86,894,000 | 84,252,000 | ||||||
| Accounts receivable, less allowance for credit losses of 398,000 at March 31, 2024 and<br>545,000 at September 30, 2023 | 5,758,000 | 2,467,000 | ||||||
| Costs and estimated earnings in excess of billings | 2,469,000 | 1,508,000 | ||||||
| Inventories, net | 63,732,000 | 71,527,000 | ||||||
| Prepaid expenses and other current assets | 1,216,000 | 2,169,000 | ||||||
| Total current assets | 190,282,000 | 178,954,000 | ||||||
| Property and equipment, net | 12,296,000 | 13,246,000 | ||||||
| Deferred and other income taxes | 2,902,000 | 3,167,000 | ||||||
| Other long-term assets | 562,000 | 381,000 | ||||||
| Total Assets | 206,042,000 | $ | 195,748,000 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 2,944,000 | $ | 3,269,000 | |||||
| Customer deposits | 7,945,000 | 6,815,000 | ||||||
| Accrued expenses | 2,513,000 | 3,753,000 | ||||||
| Current operating lease liabilities | 357,000 | 328,000 | ||||||
| Total current liabilities | 13,759,000 | 14,165,000 | ||||||
| Non-current operating lease liabilities | 152,000 | — | ||||||
| Total liabilities | 13,911,000 | 14,165,000 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, par value .10 per share; 300,000 shares authorized; none issued | — | — | ||||||
| Common stock, par value .10 per share; 15,000,000 shares authorized; 12,338,845 shares issued and<br>outstanding at March 31, 2024 and September 30, 2023 | 1,234,000 | 1,234,000 | ||||||
| Class B Stock, par value .10 per share; 6,000,000 shares authorized; 2,318,857 shares issued<br>and outstanding at March 31, 2024 and September 30, 2023 | 232,000 | 232,000 | ||||||
| Capital in excess of par value | 12,590,000 | 12,590,000 | ||||||
| Retained earnings | 178,075,000 | 167,527,000 | ||||||
| Total shareholders’ equity | 192,131,000 | 181,583,000 | ||||||
| Total Liabilities and Shareholders’ Equity | 206,042,000 | $ | 195,748,000 |
All values are in US Dollars.
Caution Concerning Forward Looking Statements - This press release and our other communications andstatements may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), including statements about the Company’s beliefs, plans, objectives, goals, expectations, estimates, projections and intentions. These statements are subject to significant risks and uncertainties and are subject to change based onvarious factors, many of which are beyond the Company’s control. Actual results may differ materially depending on a variety of important factors, including the financial condition of the Company’s customers, changes in the economic andcompetitive environments and demand for the Company’s products. In addition, the impact of the invasion by Russia into Ukraine and the conflict between Israel and Hamas, as well as actions taken by other countries, including the U.S., inresponse to such conflicts, could result in a disruption in our supply chain and higher costs of our products. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,”“estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements.
For information concerning these factors and related matters, see the following sections of the Company’s Annual Report on Form 10-K for the year ended September 30, 2023: (a) Part I, Item 1A, “Risk Factors” and (b) Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results ofOperations”. However, other factors besides those referenced could adversely affect the Company’s results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Anyforward-looking statements made by the Company herein speak as of the date of this press release. The Company does not undertake to update any forward-looking statements, except as required by law.
Unless the context otherwise indicates, all references in this press release to the “Company,” “Gencor,” “we,”“us,” or “our,” or similar words are to Gencor Industries, Inc. and its subsidiaries.
Contact: Eric Mellen, Chief Financial Officer
407-290-6000