Gencor Industries(GENC) - 2024 Q3 - Quarterly Report

Part I. Financial Information Financial Statements Presents unaudited condensed consolidated financial statements for Q3 and nine months ended June 30, 2024 Condensed Consolidated Balance Sheet Data (Unaudited) | Account | June 30, 2024 ($ in thousands) | September 30, 2023 ($ in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $28,780 | $17,031 | | Marketable securities | $87,805 | $84,252 | | Inventories, net | $63,232 | $71,527 | | Total current assets | $185,971 | $178,954 | | Total Assets | $201,755 | $195,748 | | Liabilities & Equity | | | | Total current liabilities | $7,005 | $14,165 | | Total Liabilities | $7,066 | $14,165 | | Total Shareholders' Equity | $194,689 | $181,583 | Condensed Consolidated Income Statement Data (Unaudited) | Metric | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Nine Months 2024 ($ in thousands) | Nine Months 2023 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $25,551 | $27,877 | $92,245 | $84,204 | | Gross Profit | $6,107 | $7,512 | $25,963 | $22,424 | | Operating Income | $1,993 | $3,453 | $12,448 | $10,733 | | Net Income | $2,558 | $3,212 | $13,106 | $11,561 | | EPS (basic and diluted) | $0.17 | $0.22 | $0.89 | $0.79 | Condensed Consolidated Cash Flow Data (Unaudited, Nine Months Ended June 30) | Cash Flow Activity | 2024 ($ in thousands) | 2023 ($ in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $12,512 | ($1,649) | | Net cash used in investing activities | ($763) | ($1,726) | | Net increase (decrease) in cash | $11,749 | ($3,375) | - For the quarter ended June 30, 2024, three customers accounted for 20.0%, 11.9%, and 11.5% of net revenues[27] - For the same period in 2023, three different customers accounted for 27.7%, 14.8%, and 13.8% of net revenues[27] Disaggregation of Net Revenue (Nine Months Ended June 30) | Revenue Source | 2024 ($ in thousands) | 2023 ($ in thousands) | | :--- | :--- | :--- | | Equipment sales recognized over time | $33,837 | $23,022 | | Equipment sales recognized at a point in time | $31,533 | $37,105 | | Parts and component sales | $21,595 | $19,445 | | Total Net Revenue | $92,245 | $84,204 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, revenue, gross margins, liquidity, backlog, and key business drivers and risks Q3 2024 vs. Q3 2023 Performance | Metric | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $25,551 | $27,877 | -8.3% | | Gross Profit Margin | 23.9% | 26.9% | -3.0 p.p. | | Operating Income | $1,993 | $3,453 | -42.3% | | Net Income | $2,558 | $3,212 | -20.4% | Nine Months 2024 vs. Nine Months 2023 Performance | Metric | Nine Months 2024 ($ in thousands) | Nine Months 2023 ($ in thousands) | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $92,245 | $84,204 | +9.5% | | Gross Profit Margin | 28.1% | 26.6% | +1.5 p.p. | | Operating Income | $12,448 | $10,733 | +16.0% | | Net Income | $13,106 | $11,561 | +13.4% | - The 9.5% increase in nine-month net revenue was primarily driven by higher sales of asphalt plants, resulting from government funding for highways, bridges, and roads under the Infrastructure Investment and Jobs Act (IIJ Act)[47][56] - The company's backlog increased significantly to $46.6 million at June 30, 2024, compared to $27.9 million at June 30, 2023[63] - As of June 30, 2024, the company had a strong liquidity position with $28.8 million in cash and cash equivalents, $87.8 million in marketable securities, and no long-term or short-term debt[60][62] Quantitative and Qualitative Disclosures about Market Risk The company has determined this section is not applicable for the current reporting period - The company states that this item is 'Not applicable'[77] Controls and Procedures President and CFO concluded disclosure controls were effective as of June 30, 2024, with no material changes to internal controls - The President (Principal Executive Officer) and Chief Financial Officer evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the period[78] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, the company's internal control[80] Part II. Other Information Legal Proceedings The company is involved in ordinary course legal proceedings, but none are considered material to its business - The company is not engaged in any legal proceedings that it believes are material to its business[82] Risk Factors No material changes to risk factors from 2023 Form 10-K, except for a new risk on R&D expenditure capitalization - A new risk factor has been added concerning changes in tax law, specifically the requirement under IRC Section 174 to amortize research and development expenditures over five years, which became effective for the company's fiscal year 2023[83] - This tax law change could adversely affect earnings and financial condition, as the company will have to make additional estimated federal tax payments[83] Other Information No officers or directors had Rule 10b5-1 trading plans or non-Rule 10b5-1 arrangements during Q3 2024 - No officers or directors had any Rule 10b5-1(c) trading plans or non-Rule 10b5-1 trading arrangements in effect during the third quarter of 2024[84] Exhibits Lists exhibits filed with Form 10-Q, including certifications by the CEO and CFO, and Interactive Data Files (XBRL) - The report includes certifications from the Principal Executive Officer (Exhibit 31.1) and Chief Financial Officer (Exhibit 31.2) pursuant to Rule 13a-14(a)[86] - Certifications pursuant to 18 U.S.C. Section 1350 (Sarbanes-Oxley Act) are also included as Exhibit 32[86] - Interactive Data Files (XBRL documents) are filed as Exhibit 101[86]