Gencor (GENC) Q3 Earnings & Revenues Fall Y/Y, Gross Margin Down

Core Viewpoint - Gencor Industries, Inc. reported disappointing financial results for the third quarter of fiscal 2024, with significant declines in both revenue and net income compared to the previous year [9]. Revenue Details - Gencor's revenues for the fiscal third quarter were $25.6 million, reflecting an 8.3% decrease year over year [2]. - The decline in revenues was attributed to lower equipment sales recognized at a point in time and reduced parts and component sales, primarily due to the timing of orders and shipments [2]. - The company's backlog increased to $46.6 million at the end of June 30, 2024, compared to $27.9 million at the end of June 30, 2023 [2]. Segment Performance - Revenue from Equipment sales recognized over time was $11.6 million, up 2.8% from the year-ago quarter [3]. - Equipment sales recognized at a point in time totaled $6.9 million, down 22.8% year over year [4]. - Parts and component sales generated revenues of $5.2 million, down 17.6% from the year-ago quarter [4]. - Freight revenues were $1.6 million, up 39.9% year over year, while Other revenues were $0.2 million, up 67.3% from the year-ago quarter [4]. Profitability Metrics - Gencor's gross profit margin decreased to 23.9% from 26.9% in the year-ago quarter due to lower absorption from reduced production and lower parts sales [5]. - Operating profit for the quarter was $1.9 million, a decrease of 42.3% from the prior-year quarter [7]. - Net income was $2.6 million, down 20.4% from the year-ago quarter [7]. Operating Expenses - Selling, general and administrative expenses increased by 2.4% year over year to $3.3 million [6]. - Product engineering and development expenses declined by 2.5% year over year to $0.8 million [6]. Liquidity and Cash Flow - Gencor ended the third quarter with cash and cash equivalents of $28.8 million, down from $30.2 million at the end of the fiscal second quarter [8]. - Cumulative net cash provided by operating activities was $12.5 million, compared to cumulative net cash used in operating activities of $1.6 million a year ago [8]. Outlook - Despite the dismal top-line and bottom-line results, management expressed optimism about the company's elevated backlog, which is at a historic high for this time of year [10].