FOR IMMEDIATE RELEASE:
August 2, 2018 (PRIME NEWSWIRE) – Gencor Industries, Inc. (Nasdaq: GENC) announced today net revenues increased slightly to $24.1 million for the quarter ended June 30, 2018 compared to $23.7 million for the quarter ended June 30, 2017. Gross margins were 26.6% for the quarter ended June 30, 2018 compared to 28.2% for the quarter ended June 30, 2017 as material costs have increased. Product engineering and development expenses increased $144,000 to $781,000 for the quarter ended June 30, 2018 due to increased staffing to meet the higher demand for our products. Selling, general and administrative (“SG&A”) expenses decreased $80,000 to $2,179,000 for the quarter ended June 30, 2018. Operating income for the quarter ended June 30, 2018 was $3.5 million compared to $3.8 million for the quarter ended June 30, 2017.
For the quarters ended June 30, 2018 and 2017, the Company had non-operating expense of $0.1 million. The effective income tax rate for the quarter ended June 30, 2018 was 20.0% versus 30.5% for the quarter ended June 30, 2017 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 June 30, 2018 was $2.7 million, or $0.18 per diluted share, compared to net income of $2.6 million, or $0.18 per diluted share for the quarter ended June 30, 2017.
For the nine months ended June 30, 2018 the Company had net revenue of $78.1 million and net income of $8.8 million ($0.60 per diluted share) versus net revenue of $62.1 million and net income of $7.4 million ($0.50 per diluted share) for the nine months ended June 30, 2017.
At June 30, 2018, the Company had $112.8 million of cash and marketable securities compared to $110.8 million at September 30, 2017. Net working capital was $130.6 million at June 30, 2018. The Company had no short-term or long-term debt outstanding at June 30, 2018.
The Company’s backlog was $29.3 million at June 30, 2018 compared to $37.9 million at June 30, 2017.
John Elliott, Gencor’s CEO, commented, “Gencor has experienced significant growth over the past two and a half years with revenues increasing over 100% and operating income increasing exponentially over the same period. In the third quarter, revenues were up modestly from the prior year as deliveries on some equipment shifted to the fourth quarter.
Backlog of approximately thirty million entering the fourth quarter of 2018 decreased, as the prior year benefited from sales after the highly successful March 2017 ConExpo show and the effects of the transportation bill (FAST Act). As we noted in the 2017 third quarter earnings release, the significant number of sales during the summer months of 2017 were atypical of historic buying patterns from our customers due to pent up demand.
We continued to experience inflationary cost pressures on steel and numerous purchased items in the third quarter. We expect those pressures to continue throughout the fourth quarter. As always, we work closely with our suppliers and internally on cost savings initiatives to lessen the impact to the company and our customers.”
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.
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, 2017; (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