GENCOR RELEASES SECOND QUARTER FISCAL 2023 RESULTS
FOR IMMEDIATE RELEASE:
May 12, 2023 (PRIME NEWSWIRE) – Gencor Industries, Inc. (the “Company” or “Gencor”) (NYSE American LLC: GENC) announced today net revenues of $30,501,000 for the quarter ended March 31, 2023 compared to $30,654,000 for the quarter ended March 31, 2022. Gross profit margins for the quarter ended March 31, 2023 were 29.8% compared with 20.2% for the quarter ended March 31, 2022 on increased efficiency, absorption and favorable price realization.
Product engineering and development expenses decreased $46,000 to $874,000 for the quarter ended March 31, 2023, as compared to $920,000 for the quarter ended March 31, 2022, primarily related to reduced headcount. Selling, general and administrative (“SG&A”) expenses decreased by $302,000 to $3,062,000 for the quarter ended March 31, 2023, compared to $3,364,000 for the quarter ended March 31, 2022. The decrease in SG&A expenses was primarily due to lower headcount and reduced professional expenses.
Operating income increased from $1,908,000 for the quarter ended March 31, 2022 to $5,161,000 for the quarter ended March 31, 2023, due to improved gross profit margins and reduced operating expenses.
For the quarter ended March 31, 2023, the Company had net non-operating income of $1,257,000 compared to net non-operating expense of $(1,329,000) for the quarter ended March 31, 2022. Interest and dividend income, net of fees, was $565,000 for the quarter ended March 31, 2023 as compared to $296,000 in the quarter ended March 31, 2022. In January 2023, the Company reallocated its investments in equities and mutual funds to fixed income, government securities which resulted in the increased interest income for the quarter ended march 31, 2023. The net realized and unrealized gains on marketable securities were $692,000 for the quarter ended March 31, 2023 versus net realized and unrealized losses of $(1,488,000) for the quarter ended March 31, 2022. The higher gains in fiscal 2023 were due to a stronger domestic stock market during the quarter ended March 31, 2023.
The effective income tax rate for the quarter ended March 31, 2023 was 24.1% versus 24.2% for the quarter ended March 31, 2022. Net income for the quarter ended March 31, 2023 was $4,873,000, or $0.33 per diluted share, compared with a net income of $439,000, or $0.03 per diluted share for the quarter ended March 31, 2022.
For the six months ended March 31, 2023 the Company had net revenue of $56,327,000 and net income of $8,349,000 ($0.57 per diluted share) versus net revenue of $50,760,000 and net income of $165,000 ($0.01 per diluted share) for the six months ended March 31, 2022.
At March 31, 2023, the Company had $106,313,000 of cash and marketable securities compared to $98,881,000 at September 30, 2022. Net working capital was $159,824,000 at March 31, 2023. The Company had no short-term or long-term debt outstanding at March 31, 2023.
The Company’s backlog was $34.7 million at March 31, 2023 compared to $44.9 million at March 31, 2022.
Marc Elliott, Gencor’s President, commented, “I am pleased to report that our company achieved another successful quarter. Q2 2023 revenues were comparable to the same period last year; however, we increased our gross margins by 960 basis points, resulting in improved operating income. This improvement was primarily the result of optimization in our manufacturing processes, and positive pricing and overall cost reduction efforts.
Despite the challenges with supply chain disruptions and volatile pricing in certain materials, we remained steadfast in our commitment to effective cost management, manufacturing excellence, and customer service.
I am also proud to report that we had a strong showing at the recent ConExpo-Con/Agg show in March, with higher-than-normal attendance and strong interest in our innovative products. We are well-positioned to capitalize on this success and anticipate continued opportunities going forward.
I am grateful to our hardworking employees who remain committed to our mission of delivering high-quality products and services, and to our loyal customers and dedicated shareholders for their ongoing support of Gencor.”
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.
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, central bank interest rate increases and inflation, changes in the economic and competitive environments, demand for the Company’s products, the duration and scope of the coronavirus (“COVID-19”) pandemic, actions government entities 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, and the pace of recovery when the COVID-19 pandemic subsides. 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 against officials, 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 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, 2022: (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