Gencor Releases Fourth Quarter and Fiscal Year 2020 Results
Gencor Industries (GENC) reported a 27.8% decrease in net revenue for Q4 2020, totaling $10.5 million, down from $14.5 million in Q4 2019. The decline was attributed to reduced orders following the FAST Act's impending expiration, although a one-year extension has since been approved. The gross profit margin declined to 18.3% from 19.6%. For the fiscal year, net income was $5.5 million ($0.38/share), down from $10.2 million ($0.70/share) in the prior year. The company increased cash and marketable securities to $125.1 million.
- Acquisition of Blaw-Knox paver business for approximately $14.4 million supports entry into asphalt market.
- Increase in cash and marketable securities to $125.1 million, up by $9.5 million from the prior year.
- Working capital improved to $153.2 million from $150.4 million year-over-year.
- Q4 2020 operating loss increased to ($1.7 million) from ($0.5 million) in Q4 2019.
- Annual net revenue decreased by 4.8% to $77.4 million compared to $81.3 million in 2019.
- Gross profit margin for the year decreased to 24.5% from 27.6% in the previous year.
ORLANDO, Fla., Dec. 18, 2020 (GLOBE NEWSWIRE) -- Gencor Industries, Inc., (NASDAQ: GENC) announced today net revenue for the quarter ended September 30, 2020 decreased
Operating loss for the quarter ended September 30, 2020 was (
Net revenue for the year ended September 30, 2020 decreased
The effective income tax rate for fiscal 2020 was
Net income for the year ended September 30, 2020 was
At September 30, 2020, the Company had
The Company’s backlog, which includes orders received through the date of this filing, was
On October 1, 2020, the Company acquired the Blaw-Knox paver business and associated assets, including inventory, fixed assets and related intellectual property, from Volvo Construction Equipment North America, LLC (“Volvo CE”). The acquisition was accounted for as a business combination under ASC 805, “Business Combinations.” The purchase price of approximately
John E. Elliott, Gencor’s CEO, commented, “Fiscal 2020 was a challenging year that demonstrated Gencor’s resiliency and ability to manage through uncertainty. We quickly adjusted to changes to our customers’ schedules and availability of purchased parts from our vendors. We were able to react to customer and market needs in spite of domestic and international closures and interruptions although, increased sales volume that Gencor experienced in the third quarter did not carry over into the fourth quarter. The domestic highway construction industry continues to remain cautious on 2021 state budgets and long-term federal funding after the expiration of the FAST Act, even though a one year extension was approved.
To date the Company has not been materially impacted by the novel coronavirus “COVID-19” pandemic. Manufacturing experienced minor production challenges as some employees were required to quarantine. Currently, there is minimal workforce impact and production is operating as scheduled. Gencor continues to closely monitor impacts of the COVID-19 pandemic on its employees, operations, financial results, and supply chain. Visibility into 2021 is challenging due to the uncertainty related to the COVID-19 pandemic and a change in the Presidency which may bring increased focus on the need for incremental domestic infrastructure investment.
After the fiscal year ended, Gencor successfully closed on its acquisition of the Blaw-Knox paver business and associated assets from Volvo CE. The Company is in the process of transferring the paver manufacturing to a separate facility. We plan to continue to invest in the engineering, new product development, production and marketing of the Blaw-Knox product line.”
Gencor Industries is a diversified heavy machinery manufacturer for the production of highway construction materials, synthetic fuels and environmental control machinery and equipment used in a variety of applications.
| GENCOR INDUSTRIES, INC. Consolidated Income Statements For the Years Ended September 30, 2020 and 2019 | |||||
| 2020 | 2019 | ||||
| Net revenue | |||||
| Cost of goods sold | 58,467,000 | 58,917,000 | |||
| Gross profit | 18,953,000 | 22,412,000 | |||
| Operating expenses: | |||||
| Product engineering and development | 3,061,000 | 3,295,000 | |||
| Selling, general and administrative | 10,356,000 | 9,647,000 | |||
| Total operating expenses | 13,417,000 | 12,942,000 | |||
| Operating income | 5,536,000 | 9,470,000 | |||
| Other income (expense), net: | |||||
| Interest and dividend income, net of fees | 2,321,000 | 2,307,000 | |||
| Realized and unrealized gains (losses) on marketable securities, net | (1,160,000) | 1,047,000 | |||
| Other | (16,000) | - | |||
| 1,145,000 | 3,354,000 | ||||
| Income before income tax expense | 6,681,000 | 12,824,000 | |||
| Income tax expense | 1,150,000 | 2,628,000 | |||
| Net income | |||||
| Basic earnings per common share | |||||
| Diluted earnings per common share | |||||
| GENCOR INDUSTRIES, INC. Consolidated Balance Sheets As of September 30, 2020 and 2019 | |||||
| ASSETS | 2020 | 2019 | |||
| Current assets: | |||||
| Cash and cash equivalents | |||||
| Marketable securities at fair value (cost of 2020 and | 89,498,000 | 105,322,000 | |||
| Accounts receivable, less allowance for doubtful accounts of September 30, 2020 and | 1,992,000 | 1,603,000 | |||
| Costs and estimated earnings in excess of billings | 6,405,000 | 13,838,000 | |||
| Inventories, net | 27,090,000 | 25,366,000 | |||
| Prepaid expenses | 1,189,000 | 499,000 | |||
| Total current assets | 161,758,000 | 156,930,000 | |||
| Property and equipment, net | 8,341,000 | 8,389,000 | |||
| Other long-term assets | 995,000 | 53,000 | |||
| Total Assets | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | |||||
| Customer deposits | 3,853,000 | 1,918,000 | |||
| Accrued expenses | 2,605,000 | 2,660,000 | |||
| Current operating lease liabilities | 328,000 | - | |||
| Total current liabilities | 8,514,000 | 6,485,000 | |||
| Deferred and other income taxes | 746,000 | 3,372,000 | |||
| Non-current operating lease liabilities | 614,000 | - | |||
| Total liabilities | 9,874,000 | 9,857,000 | |||
| 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 and 12,277,337 shares issued and outstanding at September 30, 2020 and 2019, respectively | 1,229,000 | 1,228,000 | |||
| Class B Stock, par value $.10 per share; 6,000,000 shares authorized; | |||||
| 2,318,857 shares and 2,308,857 shares issued and outstanding at September 30, 2020 and 2019, respectively | 232,000 | 231,000 | |||
| Capital in excess of par value | 12,331,000 | 12,159,000 | |||
| Retained earnings | 147,428,000 | 141,897,000 | |||
| Total shareholders’ equity | 161,220,000 | 155,515,000 | |||
| 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, 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 pandemic subsides. 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, 2020: (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.
Contact:
Eric Mellen, Chief Financial Officer
407-290-6000
FAQ
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