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 3, 2019

(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

incorporated or organization)

 

Commission

File Number

 

(I.R.S. Employer

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))

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.  ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol

 

Name of exchange

on which registered

Common Stock ($.10 par value)   GENC   Nasdaq Global Market

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On May 3, 2019, Gencor Industries, Inc. issued a press release announcing its financial results for the second quarter of fiscal 2019. 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  3, 2019


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 3, 2019     By:  

/s/ John E. Elliott

      John E. Elliott, Chief Executive Officer
May 3, 2019     By:  

/s/ Eric E. Mellen

      Eric E. Mellen, Chief Financial Officer
EX-99.1

Exhibit 99.1

GENCOR RELEASES SECOND QUARTER FISCAL 2019 RESULTS

May 3, 2019 (PRIME NEWSWIRE) - Gencor Industries, Inc. (Nasdaq: GENC) announced today net revenues of $26.7 million for the quarter ended March 31, 2019 compared to $30.8 million for the quarter ended March 31, 2018. Gross margins increased 880 basis points to 37.2% for the quarter ended March 31, 2019 from 28.4% for the quarter ended March 31, 2018, as a result of the Company’s cost management and operational improvements implemented over the past few years, along with an improved pricing environment and an increase in parts sales. Product engineering and development expenses increased $65,000 to $823,000 for the quarter ended March 31, 2019. Selling, general and administrative (“SG&A”) expenses decreased $447,000 to $2,474,000 for the quarter ended March 31, 2019. Reduced sales commissions and advertising and trade show expenses resulted in the decrease in SG&A expenses. Operating income for the quarter ended March 31, 2019 was up 30% to $6.6 million compared with $5.1 million for the quarter ended March 31, 2018.

For the quarter ended March 31, 2019, the Company had non-operating income of $2.7 million compared to non-operating expense of $0.3 million for the quarter ended March 31, 2018. Included in non-operating income for the quarter ended March 31, 2019 were net realized and unrealized gains on marketable securities of $2,204,000, due to the increase in the domestic equity markets in the second quarter of fiscal 2019. The effective income tax rate for the quarter ended March 31, 2019 was 20.0% versus 20.9% for the quarter ended March 31, 2018 reflecting the lower corporate tax rates to comply with the recently enacted U.S. tax law, Tax Cuts and Jobs Act (“TCJA”). Net income for the quarter ended March 31, 2019 was up 98% to $7.5 million, or $0.51 per diluted share, compared with net income of $3.8 million, or $0.26 per diluted share for the quarter ended March 31, 2018.

For the six months ended March 31, 2019 the Company had net revenue of $48.0 million and net income of $7.8 million ($0.53 per diluted share) versus net revenue of $54.0 million and net income of $6.1 million ($0.41 per diluted share) for the six months ended March 31, 2018.

At March 31, 2019, the Company had $114.7 million of cash and marketable securities compared to $112.1 million at September 30, 2018. Net working capital was $143.8 million at March 31, 2019. The Company had no short-term or long-term debt outstanding at March 31, 2019.

The Company’s backlog was $24.2 million at March 31, 2019 compared to $45.6 million at March 31, 2018.

John Elliott, Gencor’s CEO, commented, “Second quarter activity levels were moderately lower compared to the second quarter of fiscal 2018, when we realized record quarterly revenues of $30.8 million. Although revenues were lower, we were able to achieve record gross margins and operating margins in the quarter and first half of fiscal 2019.

Our profit improvement was the result of a favorable pricing environment, stable steel prices, solid execution in production, and continued effective cost management.

Gencor’s business has normalized from the record volumes in fiscal 2018. Our customers are busy and benefitting from both the FAST Act and the numerous states that have increased their infrastructure funding and spending. We anticipate asphalt plant orders to follow the seasonal pattern of prior years where a majority of the plant sales occurred in the fall and winter months.

Gencor received a higher than normal level of interest at the World of Asphalt show in February. We expect to close a couple of the quotes in the next few months.

We have been developing a new product line which should expand our customer base and geographic reach in the future. I am proud of the hard work and dedication of our Gencor employees that delivered these solid results. We continue to identify opportunities to improve our execution and remain focused on delivering strong performance.”

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.

Condensed Consolidated Statements of Income

(Unaudited)

 

     For the Quarters Ended
March 31,
    For the Six Months Ended
March 31,
 
     2019      2018     2019      2018  

Net revenue

   $ 26,670,000      $ 30,829,000     $ 47,997,000      $ 53,951,000  

Costs and expenses:

          

Production costs

     16,759,000        22,059,000       33,169,000        40,098,000  

Product engineering and development

     823,000        758,000       1,546,000        1,458,000  

Selling, general and administrative

     2,474,000        2,921,000       4,664,000        5,613,000  
  

 

 

    

 

 

   

 

 

    

 

 

 
     20,056,000        25,738,000       39,379,000        47,169,000  
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating income

     6,614,000        5,091,000       8,618,000        6,782,000  

Other income (expense), net:

          

Interest and dividend income, net of fees

     507,000        383,000       1,041,000        676,000  

Net realized and unrealized gains (losses) on marketable securities

     2,204,000        (719,000     57,000        (558,000

Other

     —          3,000       —          7,000  
  

 

 

    

 

 

   

 

 

    

 

 

 
     2,711,000        (333,000     1,098,000        125,000  
  

 

 

    

 

 

   

 

 

    

 

 

 

Income before income tax expense

     9,325,000        4,758,000       9,716,000        6,907,000  

Income tax expense

     1,865,000        994,000       1,943,000        797,000  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income

   $ 7,460,000      $ 3,764,000     $ 7,773,000      $ 6,110,000  
  

 

 

    

 

 

   

 

 

    

 

 

 

Basic Income per Common Share:

          

Net income per share

   $ 0.51      $ 0.26     $ 0.53      $ 0.42  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted Income per Common Share:

          

Net income per share

   $ 0.51      $ 0.26     $ 0.53      $ 0.41  
  

 

 

    

 

 

   

 

 

    

 

 

 


GENCOR INDUSTRIES, INC.

Condensed Consolidated Balance Sheets

 

     March 31,      September 30,  
     2019      2018  
     (Unaudited)     

 

 

ASSETS

     

Current Assets:

     

Cash and cash equivalents

   $ 11,586,000      $ 8,012,000  

Marketable securities at fair value (cost $103,629,000 at March 31, 2019 and $103,751,000 at September 30, 2018)

     103,156,000        104,058,000  

Accounts receivable, less allowance for doubtful accounts of $285,000 at March 31, 2019 and $313,000 at September 30, 2018

     2,412,000        993,000  

Costs and estimated earnings in excess of billings

     14,013,000        11,900,000  

Inventories, net

     20,139,000        18,214,000  

Prepaid expenses and other current assets

     926,000        1,904,000  
  

 

 

    

 

 

 

Total Current Assets

     152,232,000        145,081,000  
  

 

 

    

 

 

 

Property and equipment, net

     8,366,000        7,889,000  

Other assets

     53,000        53,000  
  

 

 

    

 

 

 

Total Assets

   $ 160,651,000      $ 153,023,000  
  

 

 

    

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Current Liabilities:

     

Accounts payable

   $ 2,155,000      $ 1,838,000  

Customer deposits

     4,020,000        4,563,000  

Accrued expenses

     2,287,000        2,085,000  
  

 

 

    

 

 

 

Total Current Liabilities

     8,462,000        8,486,000  
  

 

 

    

 

 

 

Deferred and other income taxes

     2,202,000        2,358,000  
  

 

 

    

 

 

 

Total Liabilities

     10,664,000        10,844,000  
  

 

 

    

 

 

 

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; 12,252,337 shares issued and outstanding at March 31, 2019 and September 30, 2018

     1,225,000        1,225,000  

Class B Stock, par value $.10 per share; 6,000,000 shares authorized; 2,288,857 shares issued and outstanding at March 31, 2019 and September 30, 2018

     229,000        229,000  

Capital in excess of par value

     11,897,000        11,862,000  

Retained earnings

     136,636,000        128,863,000  
  

 

 

    

 

 

 

Total Shareholders’ Equity

     149,987,000        142,179,000  
  

 

 

    

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 160,651,000      $ 153,023,000  
  

 

 

    

 

 

 


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, 2018; (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.

Contact:    Eric Mellen, Chief Financial Officer

        407-290-6000