Gencor Releases First Quarter Fiscal 2024 Results
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Insights
The financial results of Gencor Industries indicate a slight increase in net revenues year-over-year, which reflects a stable revenue stream. However, the more significant aspect is the improvement in gross profit margins from 22.5% to 29.0%, suggesting enhanced manufacturing efficiencies and favorable price realization. This is a substantial increase and surpasses typical industry margins, which generally range around 20-25% for manufacturing firms. The shift in investment strategy, moving from equities to fixed income, is also notable, resulting in higher net interest and dividend income due to prevailing higher rates. This conservative approach may appeal to risk-averse investors, especially in a volatile market environment.
Additionally, the increase in operating income by 59% is a robust indicator of the company's operational success. It's important to note that SG&A expenses have increased, primarily due to trade shows and professional expenses, which could be seen as an investment in marketing and business development. The backlog growth of 44% year-over-year is a strong forward-looking indicator that suggests sustained demand for the company's products. However, investors should monitor whether this backlog translates into increased revenues and whether the company can maintain its improved margins as it scales up production to meet the backlog.
Gencor's strategic positioning in the heavy machinery manufacturing market, particularly for highway construction and environmental control, is reinforced by its substantial backlog, indicating potential future revenue streams. The company's anticipation of strong demand for road work aligns with the broader infrastructure and construction industry trends, where government spending on infrastructure is expected to remain a priority. The 44% increase in backlog suggests that Gencor is well-positioned to capitalize on these trends.
Moreover, the company's proactive approach to customer demand, as evidenced by early orders, demonstrates effective market forecasting and customer relationship management. The upcoming World of Asphalt show in Nashville presents an opportunity for Gencor to showcase its products and potentially secure additional orders, which could further strengthen its market position. Investors should consider the company's ability to convert its current quoting activity and backlog into actual sales, as well as its capacity to maintain or improve production efficiencies in the face of increased demand.
The reported increase in gross profit margins is indicative of improved manufacturing efficiencies within Gencor Industries. This could be the result of investments in technology, process optimization, or a more favorable cost structure for raw materials. In the manufacturing sector, such improvements are critical for maintaining competitiveness and profitability, particularly when dealing with large-scale production of heavy machinery.
Furthermore, the decrease in product engineering and development expenses due to reduced headcount may reflect a strategic optimization of resources, although it's essential to ensure that this reduction does not negatively impact the company's innovation capacity. As Gencor prepares for the World of Asphalt show, the focus on quality products and the display of their machinery could enhance their reputation and lead to increased sales. The long-term impact of these developments on the company's operational capabilities and product offerings will be crucial for sustaining growth and market share.
ORLANDO, Fla., Feb. 06, 2024 (GLOBE NEWSWIRE) -- Gencor Industries, Inc. (the “Company” or “Gencor”) (NYSE American: GENC) announced today net revenues for the quarter ended December 31, 2023 of
Product engineering and development expenses decreased
The Company had operating income of
For the quarter ended December 31, 2023, the Company had net non-operating income of
The effective income tax rates for the quarters ended December 31, 2023 and December 31, 2022 were
At December 31, 2023, the Company had
The Company’s backlog was
Mr. Marc Elliott, President, stated, “Gencor is benefiting from one of our largest backlogs of asphalt plants and equipment in the company’s history. We are pleased to begin fiscal 2024 with a backlog of $61.3 million, representing an increase of
Gross profit increased
Gencor Industries, Inc. 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. Condensed Consolidated Income Statements For the Quarters Ended December 31, 2023 and 2022 (Unaudited) | |||||
| 2023 | 2022 | ||||
| Net revenue | |||||
| Cost of goods sold | 18,484,000 | 20,010,000 | |||
| Gross profit | 7,534,000 | 5,815,000 | |||
| Operating expenses: | |||||
| Product engineering and development | 801,000 | 897,000 | |||
| Selling, general and administrative | 3,350,000 | 2,799,000 | |||
| Total operating expenses | 4,151,000 | 3,696,000 | |||
| Operating income | 3,383,000 | 2,119,000 | |||
| Other income, net: | |||||
| Interest and dividend income, net of fees | 716,000 | 493,000 | |||
| Realized and unrealized gains on marketable securities, net | 1,519,000 | 1,962,000 | |||
| 2,235,000 | 2,455,000 | ||||
| Income before income tax expense | 5,618,000 | 4,574,000 | |||
| Income tax expense | 1,292,000 | 1,098,000 | |||
| Net income | |||||
| Basic income per common share | |||||
| Diluted income per common share | |||||
| GENCOR INDUSTRIES, INC. Condensed Consolidated Balance Sheets (Unaudited) | |||||
| ASSETS | December 31, 2023 | September 30, 2023 | |||
| Current assets: | |||||
| Cash and cash equivalents | |||||
| Marketable securities at fair value (cost of 2023 and | 86,231,000 | 84,252,000 | |||
| Accounts receivable, less allowance for doubtful accounts of December 31, 2023 and | 4,028,000 | 2,467,000 | |||
| Costs and estimated earnings in excess of billings | 6,164,000 | 1,508,000 | |||
| Inventories, net | 72,209,000 | 71,527,000 | |||
| Prepaid expenses and other current assets | 2,377,000 | 2,169,000 | |||
| Total current assets | 189,568,000 | 178,954,000 | |||
| Property and equipment, net | 12,947,000 | 13,246,000 | |||
| Deferred and other income taxes | 2,855,000 | 3,167,000 | |||
| Other long-term assets | 288,000 | 381,000 | |||
| Total Assets | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | |||||
| Customer deposits | 12,702,000 | 6,815,000 | |||
| Accrued expenses | 3,103,000 | 3,753,000 | |||
| Current operating lease liabilities | 235,000 | 328,000 | |||
| Total current liabilities | 19,749,000 | 14,165,000 | |||
| Total liabilities | 19,749,000 | 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 outstanding at December 31, 2023 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 and outstanding at December 31, 2023 and September 30, 2023 | 232,000 | 232,000 | |||
| Capital in excess of par value | 12,590,000 | 12,590,000 | |||
| Retained earnings | 171,853,000 | 167,527,000 | |||
| Total shareholders’ equity | 185,909,000 | 181,583,000 | |||
| Total Liabilities and Shareholders’ Equity | |||||
Caution Concerning Forward Looking Statements - This press release and our other communications and statements 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 “Exchange Act”), 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 on various 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 and competitive 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., in response 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 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 complete set 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.
FAQ
What were Gencor Industries, Inc.'s net revenues for the quarter ended December 31, 2023?
What were the gross profit margins for Gencor Industries, Inc. for the quarter ended December 31, 2023?
What was the operating income for Gencor Industries, Inc. for the quarter ended December 31, 2023?
What was Gencor Industries, Inc.'s net income for the quarter ended December 31, 2023?
What was Gencor Industries, Inc.'s backlog at December 31, 2023?
