Gencor Releases First Quarter Fiscal 2021 Results
Gencor Industries (GENC) reported net revenues of $19.0 million for the quarter ended December 31, 2020, up from $18.0 million the prior year. However, gross margins plummeted to 15.7% from 24.0%, driven by unabsorbed costs linked to the Blaw-Knox paver product line, which had no revenues during the quarter. Operating income fell to (1.06 million), while net income decreased to $1.6 million or $0.11 per share. The company ended the quarter with $116 million in cash and marketable securities, maintaining a backlog of $32.1 million.
- Net revenues increased by $1 million year-over-year.
- Maintained a strong cash position with $116 million in cash and marketable securities.
- Backlog grew to $32.1 million, up from $30.9 million.
- Gross margin decreased significantly to 15.7% from 24.0%.
- Operating loss of $1.06 million compared to operating income of $1.17 million in the prior year.
- Incurred additional costs related to the Blaw-Knox acquisition.
ORLANDO, Fla., Feb. 12, 2021 (GLOBE NEWSWIRE) -- Gencor Industries, Inc. (Nasdaq: GENC) announced today net revenues of
Product engineering and development expenses increased
Operating income decreased from
For the quarter ended December 31, 2020, the Company had non-operating income of
The effective income tax rate for the quarters ended December 31, 2020 and December 31, 2019 was
At December 31, 2020, the Company had
The Company’s backlog was
John Elliott, Gencor’s CEO, commented, “First quarter revenues of
Gross profit margin in the first quarter of fiscal 2021 declined as steel prices increased throughout the quarter. We have experienced a further increase in steel prices in January and February 2021. The company closely monitors steel prices and from time to time has locked in prices with key suppliers for six to twelve months.
As expected, we closed the Blaw-Knox acquisition and have been in the process of transferring the fixed assets and inventory purchased to a leased facility. During the quarter, we prepared the facility for production. We incurred typical start-up costs, including IT hardware and software, capex, IT and other professional fees, and hiring of key personnel.
We begin calendar 2021 with some optimism that the new administration will receive bipartisan support to successfully approve and fund a Federal infrastructure bill, a portion of which would be used for highways. Prior administrations have proposed smaller infrastructure bills with little bipartisan support and success. Barring incremental Federal funding for infrastructure, we anticipate sales to be at historical norms for the remainder of fiscal 2021.”
Gencor Industries is a leading manufacturer of heavy machinery used in the production and application of highway construction materials and environmental control equipment.
| GENCOR INDUSTRIES, INC. Condensed Consolidated Income Statements For the Quarters Ended December 31, 2020 and 2019 (Unaudited) | ||||||
| 2020 | 2019 | |||||
| Net revenue | $ | 18,964,000 | $ | 18,030,000 | ||
| Cost of goods sold | 15,983,000 | 13,710,000 | ||||
| Gross profit | 2,981,000 | 4,320,000 | ||||
| Operating expenses: | ||||||
| Product engineering and development | 845,000 | 766,000 | ||||
| Selling, general and administrative | 3,194,000 | 2,382,000 | ||||
| Total operating expenses | 4,039,000 | 3,148,000 | ||||
| Operating income (loss) | (1,058,000 | ) | 1,172,000 | |||
| Other income (expense), net: | ||||||
| Interest and dividend income, net of fees | 804,000 | 632,000 | ||||
| Realized and unrealized gains on marketable securities, net | 2,193,000 | 1,317,000 | ||||
| Other | - | (10,000 | ) | |||
| 2,997,000 | 1,939,000 | |||||
| Income before income tax expense | 1,939,000 | 3,111,000 | ||||
| Income tax expense | 388,000 | 622,000 | ||||
| Net income | $ | 1,551,000 | $ | 2,489,000 | ||
| Basic earnings per common share | $ | 0.11 | $ | 0.17 | ||
| Diluted earnings per common share | $ | 0.11 | $ | 0.17 | ||
| GENCOR INDUSTRIES, INC. Condensed Consolidated Balance Sheets | ||||||
| ASSETS | December 31, 2020 (Unaudited) | September 30, 2020 | ||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 23,957,000 | $ | 35,584,000 | ||
| Marketable securities at fair value (cost of 2020 and | 92,049,000 | 89,498,000 | ||||
| Accounts receivable, less allowance for doubtful accounts of December 31, 2020 and | 2,764,000 | 1,992,000 | ||||
| Costs and estimated earnings in excess of billings | 4,709,000 | 6,405,000 | ||||
| Inventories, net | 35,473,000 | 27,090,000 | ||||
| Prepaid expenses | 1,114,000 | 1,189,000 | ||||
| Total current assets | 160,066,000 | 161,758,000 | ||||
| Property and equipment, net | 12,087,000 | 8,341,000 | ||||
| Other long-term assets | 1,159,000 | 995,000 | ||||
| Total Assets | $ | 173,312,000 | $ | 171,094,000 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 3,224,000 | $ | 1,728,000 | ||
| Customer deposits | 2,697,000 | 3,853,000 | ||||
| Accrued expenses | 2,386,000 | 2,605,000 | ||||
| Current operating lease liabilities | 420,000 | 328,000 | ||||
| Total current liabilities | 8,727,000 | 8,514,000 | ||||
Deferred and other income taxes | 1,128,000 | 746,000 | ||||
| Non-current operating lease liabilities | 686,000 | 614,000 | ||||
| Total liabilities | 10,541,000 | 9,874,000 | ||||
| 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; | ||||||
| 12,287,337 shares issued and outstanding at December 31, 2020 and September 30, 2020 | 1,229,000 | 1,229,000 | ||||
| Class B Stock, par value $.10 per share; 6,000,000 shares authorized; | ||||||
| 2,318,857 shares issued and outstanding at December 31, 2020 and September 30, 2020 | 232,000 | 232,000 | ||||
| Capital in excess of par value | 12,331,000 | 12,331,000 | ||||
| Retained earnings | 148,979,000 | 147,428,000 | ||||
| Total shareholders’ equity | 162,771,000 | 161,220,000 | ||||
| Total Liabilities and Shareholders’ Equity | $ | 173,312,000 | $ | 171,094,000 | ||
Caution Concerning Forward Looking Statements - This press release and our other communications and statements may contain “forward-looking statements,” including statements about our beliefs, plans, objectives, goals, expectations, estimates, projections and intentions. These statements are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements. All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements. For information concerning these factors and related matters, see our Annual Report on Form 10-K for the year ended September 30, 2020; (a) “Risk Factors” in Part I, Item 1A and (b) “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7. However, other factors besides those referenced could adversely affect our results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by us herein speak as of the date of this press release. We do not undertake to update any forward-looking statement, except as required by law.
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