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 13, 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)) |
| --- | --- |
Securities registered or to be registered pursuant to Section 12(b) of the Act
| Title of Each Class | Trading<br> <br>Symbol(s) | Name of Exchange<br> <br>on which registered |
|---|---|---|
| Common Stock ($.10 Par Value) | GENC | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 13, 2022 Gencor Industries, Inc. issued a press release announcing its financial results for the second 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 May 13, 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. | ||
|---|---|---|
| May 13, 2022 | By: | /s/ Marc G. Elliott |
| Marc G. Elliott, President | ||
| May 13, 2022 | By: | /s/ Eric E. Mellen |
| Eric E. Mellen, Chief Financial Officer |
Index to Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Earnings Release dated May 13, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
EX-99.1
Exhibit 99.1
GENCOR RELEASES SECOND QUARTER FISCAL 2022 RESULTS
May 13, 2022 (PRIME NEWSWIRE) - Gencor Industries, Inc. (Nasdaq: GENC) announced today net revenues of $30.7 million for the quarter ended March 31, 2022 compared to $21.4 million for the quarter ended March 31, 2021. Gross margins for the quarter ended March 31, 2022 were 20.2% compared with 28.8% for the quarter ended March 31, 2021. During the quarter ended March 31, 2022, the Company continued to experience higher manufacturing costs associated with wages, steel and OEM parts pricing.
Product engineering and development expenses decreased $0.2 million to $0.9 million for the quarter ended March 31, 2022, as compared to $1.1 million for the quarter ended March 31, 2021, primarily related to reduced headcount. Selling, general and administrative (“SG&A”) expenses decreased by $0.5 million to $3.4 million for the quarter ended March 31, 2022, compared to $3.8 million for the quarter ended March 31, 2021. The decrease in SG&A expenses was due to reduced professional fees for business development.
Operating income increased from $1.2 million for the quarter ended March 31, 2021 to $1.9 million for the quarter ended March 31, 2022, due primarily to increased sales and reduced professional fees.
For the quarter ended March 31, 2022, the Company had net non-operating expense of $(1.3) million compared to net non-operating income of $1.6 million for the quarter ended March 31, 2021. The fiscal 2022 investment losses reflect the decline in the equity markets due to higher interest rates, inflation, and the Federal Reserve’s recent monetary tightening policy.
The effective income tax rate for the quarter ended March 31, 2022 was 24.2% versus 20% for the quarter ended March 31, 2021. Net income for the quarter ended March 31, 2022 was $0.4 million, or $0.03 per diluted share, compared with a net income of $2.3 million, or $0.16 per diluted share for the quarter ended March 31, 2021.
For the six months ended March 31, 2022 the Company had net revenue of $50.8 million and net income of $0.2 million ($0.01 per diluted share) versus net revenue of $40.3 million and net income of $3.8 million ($0.26 per diluted share) for the six months ended March 31, 2021.
At March 31, 2022, the Company had $117.1 million of cash and marketable securities compared to $118.2 million at September 30, 2021. Net working capital was $154.7 million at March 31, 2022. The Company had no short-term or long-term debt outstanding at March 31, 2022.
The Company’s backlog was $44.9 million at March 31, 2022 compared to $42.6 million at March 31, 2021.
Marc Elliott, Gencor’s President, commented, “Gencor delivered solid second quarter results considering the current challenging business environment. Revenues increased 43.6% due to the strong backlog entering the quarter and solid execution in the quarter. Commodity prices began to show some improvement in the first quarter, but reversed course in the second quarter likely due to the Russian - Ukrainian conflict and the effect of sanctions on steel. Though labor, supply chain and freight challenges persist, we believe that revenues for the remainder of fiscal 2022 will continue to be solid.
Every employee at Gencor is focused on overcoming the current supply chain challenges to minimize delivery interruptions to our customers. The recent World of Asphalt show in March generated very positive feedback from our loyal customers following a prolonged pandemic and virtually dormant tradeshow circuit. We continue to see strong interest across all our product lines and are optimistic that Gencor will benefit from the Federal infrastructure bill in the coming years.”
Gencor Industries, Inc. is a diversified heavy machinery manufacturer for the production of highwayconstruction materials and equipment and environmental control machinery and equipment used in a variety of applications.
GENCORINDUSTRIES, INC.
Condensed Consolidated Income Statements
(Unaudited)
| For the Quarters Ended<br>March 31, | For the Six Months Ended<br>March 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||
| 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 | ) | — | ||||
| (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 |
GENCOR INDUSTRIES, INC.
Condensed Consolidated Balance Sheets
| September 30,2021 | |||
|---|---|---|---|
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | 22,571,000 | $ | 23,232,000 |
| Marketable securities at fair value (cost of 94,746,000 at March 31, 2022 and 93,690,000 at<br>September 30, 2021) | 94,501,000 | 94,976,000 | |
| Accounts receivable, less allowance for doubtful accounts of 349,000 at March 31, 2022 and<br>321,000 at September 30, 2021 | 3,924,000 | 2,622,000 | |
| Costs and estimated earnings in excess of billings | 1,629,000 | 1,903,000 | |
| Inventories, net | 47,222,000 | 41,888,000 | |
| Prepaid expenses | 3,756,000 | 2,202,000 | |
| Total current assets | 173,603,000 | 166,823,000 | |
| Property and equipment, net | 12,205,000 | 11,801,000 | |
| Other long-term assets | 711,000 | 838,000 | |
| Total Assets | 186,519,000 | $ | 179,462,000 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current liabilities: | |||
| Accounts payable | 5,741,000 | $ | 3,105,000 |
| Customer deposits | 10,286,000 | 5,244,000 | |
| Accrued expenses | 2,442,000 | 2,645,000 | |
| Current operating lease liabilities | 407,000 | 393,000 | |
| Total current liabilities | 18,876,000 | 11,387,000 | |
| Deferred and other income taxes | — | 394,000 | |
| Non-current operating lease liabilities | 189,000 | 392,000 | |
| Total liabilities | 19,065,000 | 12,173,000 | |
| 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, 2022 and September 30, 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 March 31, 2022 and September 30, 2021 | 232,000 | 232,000 | |
| Capital in excess of par value | 12,590,000 | 12,590,000 | |
| Retained earnings | 153,398,000 | 153,233,000 | |
| Total shareholders’ equity | 167,454,000 | 167,289,000 | |
| Total Liabilities and Shareholders’ Equity | 186,519,000 | $ | 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 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 companies againstofficials, 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, 2021: (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