Gencor Industries(GENC) - 2023 Q3 - Quarterly Report

Financial Performance - For the quarter ended June 30, 2023, net revenue was $27,877,000, a decrease of 5.2% from $29,647,000 in the same quarter of 2022[16] - Gross profit for the quarter was $7,512,000, representing a gross margin of 26.9%, compared to $5,679,000 and a margin of 19.2% in the prior year[16] - Operating income increased to $3,453,000 for the quarter, up 60.5% from $2,151,000 in the same quarter of 2022[16] - Net income for the quarter was $3,212,000, compared to a net loss of $1,015,000 in the same quarter of 2022, resulting in earnings per share of $0.22[16] - For the nine months ended June 30, 2023, net revenue increased to $84,204,000, up from $80,407,000 in the prior year, reflecting a growth of 3%[49] - The company reported a net income of $3,212,000 for the quarter ended June 30, 2023, compared to a net loss of $(1,015,000) in the same quarter of 2022[40] - Basic and diluted earnings per share for the quarter ended June 30, 2023, were $0.22, compared to a loss of $(0.07) in the same quarter of 2022[40] - For the nine months ended June 30, 2023, the Company reported net income of $11,561,000, or $0.79 per share, compared to a net loss of $(850,000), or $(0.06) per share for the same period in 2022[88] Assets and Liabilities - Total current assets as of June 30, 2023, were $174,795,000, an increase from $162,479,000 as of September 30, 2022[13] - Total liabilities decreased to $11,646,000 as of June 30, 2023, down from $12,396,000 as of September 30, 2022[13] - Retained earnings increased to $164,422,000 as of June 30, 2023, compared to $152,861,000 as of September 30, 2022[13] - Cash and cash equivalents decreased to $6,206,000 as of June 30, 2023, from $9,581,000 at the end of the previous fiscal year[13] - As of June 30, 2023, the company had total marketable securities valued at $88,413,000, with $53,778,000 classified as Level 1 and $34,635,000 as Level 2[33] - Cash and cash equivalents stood at $6,206,000, while marketable securities totaled $88,413,000 as of June 30, 2023[92] - The Company had no long-term or short-term debt outstanding as of June 30, 2023[90] Cash Flow - The company reported a net cash inflow from operating activities of $11,561,000 for the nine months ended June 30, 2023, compared to a net loss of $850,000 for the same period in 2022[22] - Cash flows used in operating activities were $1,649,000 for the nine months ended June 30, 2023[93] - Cash flows used in investing activities amounted to $1,726,000, primarily for capital expenditures related to manufacturing equipment[94] Inventory and Costs - The company’s inventory as of June 30, 2023, totaled $66,791,000, an increase from $55,815,000 as of September 30, 2022[38] - Costs incurred on uncompleted contracts amounted to $19,400,000 as of June 30, 2023, compared to $12,660,000 as of September 30, 2022[39] - Costs and estimated earnings in excess of billings increased by $4,795,000 due to inventory build and percentage of completion recognition on sales[93] Operating Expenses - The company plans to continue investing in product engineering and development, with expenses of $845,000 for the quarter ended June 30, 2023[16] - Product engineering and development expenses decreased by $106,000 to $845,000 for the quarter ended June 30, 2023, compared to $951,000 in the same quarter of 2022, primarily due to reduced headcount[79] - Selling, general and administrative expenses increased by $637,000 to $3,214,000 for the quarter ended June 30, 2023, compared to $2,577,000 in the same quarter of 2022, mainly due to trade show expenses[79] Taxation - The effective income tax rate for the quarter ended June 30, 2023 was an expense of 23.0%, compared to a benefit of 18.1% for the same quarter in 2022[83] - The effective income tax rate for the nine months ended June 30, 2023 was 23.8%, compared to a benefit of 15.3% in the prior year[88] Market and Customer Concentration - Three customers accounted for 27.7%, 14.8%, and 13.8% of net revenues during the quarter ended June 30, 2023[42] - The Company's backlog decreased to $27.9 million at June 30, 2023, down from $40.2 million at June 30, 2022[93] Unrealized Gains - The company recognized net unrealized gains of $46,000 for the quarter and $4,490,000 for the nine months ended June 30, 2023, compared to losses of $(3,855,000) and $(5,386,000) in the same periods of 2022[33][34]