Gencor Industries(GENC) - 2022 Q3 - Quarterly Report

Financial Performance - For the quarter ended June 30, 2022, net revenue was $29,647,000, an increase from $24,919,000 in the same quarter of 2021, representing a growth of approximately 19%[16] - Gross profit for the quarter was $5,679,000, compared to $5,605,000 in the prior year, indicating a slight increase[16] - Operating income for the quarter was $2,151,000, up from $1,227,000 in the same quarter of 2021, reflecting a growth of approximately 75%[16] - The company reported a net loss of $1,015,000 for the quarter, compared to a net income of $2,335,000 in the same quarter of 2021[16] - Net revenues for the quarter ended June 30, 2022, were $29,647,000, representing an increase of $4,728,000 or 19.0% compared to $24,919,000 for the same quarter in 2021[80] - Net loss for the quarter ended June 30, 2022, was $(1,015,000), or $(0.07) per share, compared to net income of $2,335,000, or $0.16 per share, for the same quarter in 2021[86] - Net sales for the nine months ended June 30, 2022, were $80,407,000, an increase of $15,172,000 or 23.3% from $65,235,000 for the same period in 2021[87] Assets and Liabilities - Total current assets as of June 30, 2022, were $168,118,000, slightly up from $166,823,000 as of September 30, 2021[14] - Cash and cash equivalents decreased to $19,474,000 from $23,232,000 at the end of the previous fiscal year[14] - Total liabilities increased to $14,931,000 as of June 30, 2022, compared to $12,173,000 at September 30, 2021[14] - The company’s retained earnings decreased to $152,383,000 from $153,233,000 over the same period[14] - As of June 30, 2022, net inventories totaled $48.244 million, an increase from $41.888 million as of September 30, 2021[40] - The Company had slow-moving and obsolete inventory allowances of $7.975 million as of June 30, 2022, compared to $5.397 million as of September 30, 2021[40] - Contract assets were $1,366,000 at June 30, 2022, down from $1,903,000 at September 30, 2021, indicating a decrease of 28.2%[52] - Customer deposits related to contracts with customers increased to $7,436,000 at June 30, 2022, from $5,244,000 at September 30, 2021, a rise of 41.9%[56] Cash Flow and Investments - Cash flows used in operating activities for the nine months ended June 30, 2022, were $(1,574,000), a significant decrease from $8,130,000 in the prior year[22] - The company made capital expenditures of $2,184,000 during the nine months ended June 30, 2022[22] - The Company acquired the Blaw-Knox paver line for an initial purchase price of approximately $14.4 million, which was adjusted to $13.8 million after post-closing adjustments[25] - The Company had $19,474,000 in cash and cash equivalents and $91,116,000 in marketable securities as of June 30, 2022[96] Market and Operational Insights - The company continues to monitor the impact of the COVID-19 pandemic, which has not significantly affected operations as of the report date[28] - The company expects increased demand for its products due to the $1.2 trillion infrastructure bill signed into law in November 2021, which includes $110 billion for highways, bridges, and roads[72] - The company continues to invest in product engineering and development to strengthen its market position and improve operational efficiency[77] - The company is monitoring the impacts of the COVID-19 pandemic on its operations, with no significant effects reported as of the quarter ended June 30, 2022[78] Profitability Metrics - Gross profit margins decreased to 19.2% for the quarter ended June 30, 2022, down from 22.5% for the same quarter in 2021[81] - Gross profit margins for the nine months ended June 30, 2022, decreased to 19.4% from 22.6% for the same period in 2021[88] - Operating income increased to $2,151,000 for the quarter ended June 30, 2022, compared to $1,227,000 for the same quarter in 2021, driven by increased sales and reduced expenses[83] - Operating income for the nine months ended June 30, 2022, was $3,017,000, up from $1,407,000 for the same period in 2021[90] Securities and Market Risks - The fair value of marketable securities as of June 30, 2022, was $91.116 million, with net unrealized losses of $(3.855 million) for the quarter[35] - Net realized and unrealized losses on marketable securities were $(3,693,000) for the quarter ended June 30, 2022, compared to gains of $1,386,000 for the same quarter in 2021[84] - There are no off-balance sheet arrangements reported by the company[116] - There are no applicable quantitative and qualitative disclosures about market risk[117] Impairment and Asset Management - The company reviews property and equipment and intangible assets for impairment whenever events indicate that the carrying amount may not be recoverable[115] - An impairment loss is recognized when the carrying amount exceeds the estimated undiscounted cash flows expected from the asset[115] - The impairment loss amount is calculated based on the excess of the asset's carrying value over its fair value, determined using discounted cash flow analysis[115]