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: December 16, 2022
(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)) |
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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 December 16, 2022 Gencor Industries, Inc. issued a press release announcing its financial results for the full year and fourth quarter of fiscal 2022. 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 December 16, 2022 |
|---|---|
| 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. | ||
|---|---|---|
| December 16, 2022 | By: | /s/ Marc G. Elliott |
| Marc G. Elliott, President | ||
| December 16, 2022 | By: | /s/ Eric E. Mellen |
| Eric E. Mellen, Chief Financial Officer |
Index to Exhibits
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Earnings Release dated December 16, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
EX-99.1
Exhibit 99.1
GENCOR RELEASES FOURTH QUARTER AND FISCAL YEAR 2022 RESULTS
December 16, 2022 (PRIME NEWSWIRE)—Gencor Industries, Inc. (the “Company” or “Gencor”) (NYSE American: GENC) announced today net revenue for the fourth quarter of 2022 increased 15.5% to $23.1 million compared to $20.0 million for the quarter ended September 30, 2021. The increased net revenues reflect increased shipments and progress on large contract orders where revenue is recognized over time. Gross profit as a percentage of net revenue was 21.5% for the quarter ended September 30, 2022, an increase from 17.2% for the quarter ended September 30, 2021. Increased production volumes and pricing more than offset the increases in labor rates, steel and OEM parts prices during the quarter ended September 30, 2022.
Operating income for the quarter ended September 30, 2022 was $1.2 million compared to an operating loss of $(0.7) million for the quarter ended September 30, 2021. The Company had net non-operating expense of $(1.8) million for the quarter ended September 30, 2022 compared to net non-operating expense of $(0.4) million for the quarter ended September 30, 2021. The Company’s tax benefit was $(1.2) million for the quarter ended September 30, 2022 compared to a tax benefit of $(0.7) million for the quarter ended September 30, 2021. Net income for the quarter ended September 30, 2022 was $0.5 million compared to a net loss of $(0.4) million for the quarter ended September 30, 2021.
Net revenue for the year ended September 30, 2022 increased 21.3% to $103.5 million from $85.3 million for the year ended September 30, 2021. The increased net revenues reflect increased shipments and progress on large contract orders where revenue is recognized over time. Gross profit margins were 19.9% in fiscal 2022 a decrease from 21.3% in fiscal 2021 due to higher manufacturing costs associated with wages, steel, and OEM purchased parts.
The Company had operating income for the year ended September 30, 2022 of $4.2 million compared to $0.7 million for the year ended September 30, 2021. The increase in operating income was due to the higher sales and reduced SG&A expenses. The Company had non-operating losses of $(5.9) million for the year ended September 30, 2022 compared to non-operating income of $5.9 million for the year ended September 30, 2021. The fiscal 2022 investment losses reflect the general decline in global equity and bond markets.
The effective income tax rate for fiscal 2022 was a benefit of (78.0%) versus expense of 12.5% in fiscal 2021.
Net loss for the year ended September 30, 2022 was $(0.4) million ($(0.03) per basic and diluted share) versus net income of $5.8 million ($0.40 per basic share and $0.39 per diluted share) for the year ended September 30, 2021 due exclusively to investment portfolio losses in the equity and bond markets.
At September 30, 2022, the Company had $98.9 million in cash and marketable securities, a decrease of $19.3 million over the September 30, 2021 balance of $118.2 million. The Company’s working capital was $150.1 million at September 30, 2022 versus $155.4 million at September 30, 2021. The Company has no short-term or long-term debt.
The Company’s backlog was $43.2 million at December 1, 2022 compared to $53.1 million at December 1, 2021.
Mr. Marc Elliott, Gencor’s President, stated, “I am pleased with Gencor’s strong fourth quarter performance, with solid improvements in revenues and gross margins as market demand for Gencor’s asphalt plants and components have remained strong. While supply chain and inflation-related challenges have continued throughout the fiscal year, our Company has persevered and our business has grown substantially. While the macro environment is more uncertain in 2023, we remain focused on growth in our markets.
I am optimistic that the passage of last year’s Infrastructure Investment and Jobs Act will provide a catalyst for our markets over the next few years as funding is released. We believe this clarity of guaranteed Federal investment will be essential in accelerating state infrastructure projects.”
Gencor Industries is a diversified heavy machinery manufacturer for the production of highway construction materials and equipment and environmental control machinery and equipment used in a variety of applications.
| GENCOR INDUSTRIES, INC.<br><br><br>Consolidated Statements of Operations<br><br><br>For the Years Ended September 30, 2022 and 2021 | |||||
|---|---|---|---|---|---|
| 2022 | 2021 | ||||
| Net revenue | $ | 103,479,000 | $ | 85,278,000 | |
| Cost of goods sold | 82,935,000 | 67,100,000 | |||
| Gross profit | 20,544,000 | 18,178,000 | |||
| Operating expenses: | |||||
| Product engineering and development | 4,325,000 | 4,278,000 | |||
| Selling, general and administrative | 12,052,000 | 13,199,000 | |||
| Total operating expenses | 16,377,000 | 17,477,000 | |||
| Operating income | 4,167,000 | 701,000 | |||
| Other income (expense), net: | |||||
| Interest and dividend income, net of fees | 1,305,000 | 1,762,000 | |||
| Realized and unrealized gains (losses) on marketable securities, net | (7,009,000 | ) | 4,171,000 | ||
| Other | (156,000 | ) | — | ||
| (5,860,000 | ) | 5,933,000 | |||
| Income (loss) before income tax expense (benefit) | (1,693,000 | ) | 6,634,000 | ||
| Income tax expense (benefit) | (1,321,000 | ) | 829,000 | ||
| Net income (loss) | $ | (372,000 | ) | $ | 5,805,000 |
| Basic earnings (loss) per common share | $ | (0.03 | ) | $ | 0.40 |
| Diluted earnings (loss) per common share | $ | (0.03 | ) | $ | 0.39 |
GENCOR INDUSTRIES, INC.
Consolidated Balance Sheets
As of September 30, 2022 and 2021
| ASSETS | 2021 | ||
|---|---|---|---|
| Current assets: | |||
| Cash and cash equivalents | 9,581,000 | $ | 23,232,000 |
| Marketable securities at fair value (cost of 94,879,000 at September 30, 2022 and<br>93,690,000 at September 30, 2021) | 89,300,000 | 94,976,000 | |
| Accounts receivable, less allowance for doubtful accounts of 370,000 at September 30, 2022<br>and 321,000 at September 30, 2021 | 2,996,000 | 2,622,000 | |
| Costs and estimated earnings in excess of billings | 2,118,000 | 1,903,000 | |
| Inventories, net | 55,815,000 | 41,888,000 | |
| Prepaid expenses | 2,669,000 | 2,202,000 | |
| Total current assets | 162,479,000 | 166,823,000 | |
| Property and equipment, net | 13,491,000 | 11,801,000 | |
| Deferred and other income taxes | 2,893,000 | — | |
| Other long-term assets | 450,000 | 838,000 | |
| Total Assets | 179,313,000 | $ | 179,462,000 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current liabilities: | |||
| Accounts payable | 4,251,000 | $ | 3,105,000 |
| Customer deposits | 5,864,000 | 5,244,000 | |
| Accrued expenses | 1,885,000 | 2,645,000 | |
| Current operating lease liabilities | 390,000 | 393,000 | |
| Total current liabilities | 12,390,000 | 11,387,000 | |
| Deferred and other income taxes | — | 394,000 | |
| Non-current operating lease liabilities | 6,000 | 392,000 | |
| Total liabilities | 12,396,000 | 12,173,000 | |
| Commitments and contingencies | |||
| Shareholders’ equity: | |||
| Preferred stock, par value .10 per share; 300,000 shares authorized;<br>none issued | — | — | |
| Common stock, par value .10 per share; 15,000,000 shares authorized; 12,338,845 shares issued and<br>outstanding at September 30, 2022 and 2021 | 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 September 30, 2022 and 2021 | 232,000 | 232,000 | |
| Capital in excess of par value | 12,590,000 | 12,590,000 | |
| Retained earnings | 152,861,000 | 153,233,000 | |
| Total shareholders’ equity | 166,917,000 | 167,289,000 | |
| Total Liabilities and Shareholders’ Equity | 179,313,000 | $ | 179,462,000 |
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, demand for the Company’s products, the duration and scope of the coronavirus (“COVID-19”) pandemic, actions governments, and businesses take in response to the COVID-19 pandemic, including mandatory business closures; the impact of the pandemic and actions taken on regional economies; the pace of recovery when the COVID-19 pandemicsubsides. In addition, on February 24, 2022, Russian military forces invaded Ukraine. The impact to Ukraine as well as actions taken by other countries, including new and stricter sanctions imposed by the U.S. and other countries and companiesagainst officials, individuals, regions, and industries in Russia, and actions taken by Russia and certain other countries in response to such sanctions, 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 similarexpressions are intended to identify forward-looking statements.
For information concerning these factors and related matters, see the followingsections of the Company’s Annual Report on Form 10-K for the year ended September 30, 2022: (a) Part I, Item 1A, “Risk Factors” and (b) Part II, Item 7, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations”. However, other factors besides those referenced could adversely affect the Company’s results, and you should not consider any such list of factors to be a completeset of all potential risks or uncertainties. Any forward-looking statements made by the Company herein speak as of the date of this press release. The Company does not undertake to update any forward-looking statements, except as required by law.
Unless the context otherwise indicates, all references in this press release to the “Company,” “Gencor,” “we,”“us,” or “our,” or similar words are to Gencor Industries, Inc. and its subsidiaries.
| Contact: Eric | Mellen, Chief Financial Officer |
|---|
407-290-6000