UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED June 30, 2003 |
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD From to |
Commission file number 0-3821
GENCOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 59-0933147 | |
| (State or other jurisdiction of incorporated or organization) | (I.R.S. Employer Identification No.) |
5201 North Orange Blossom Trail, Orlando, Florida 32810
(Address of principal executive offices) (Zip Code)
(407) 290-6000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.)
Yes ¨ No x
Indicate number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
| Class |
Outstanding at July 16, 2003 | |
| Common stock, $.10 par value |
6,884,070 shares | |
| Class B stock, $.10 par value |
1,798,398 shares |
2
Part I. Financial Information
Condensed Consolidated Balance Sheets
In thousands, except share amounts
| June 30 2003 |
September 30 2002 |
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| (Unaudited) | ||||||||
| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 16,113 | $ | 12,305 | ||||
| Accounts receivable, less allowance for doubtful accounts of $1,194 ($1,234 at September 30, 2002) |
4,390 | 8,512 | ||||||
| Inventories |
14,156 | 19,012 | ||||||
| Prepaid expenses |
1,115 | 1,938 | ||||||
| Total current assets |
35,774 | 41,767 | ||||||
| Property and equipment, net |
15,131 | 15,693 | ||||||
| Goodwill, net of accumulated amortization |
364 | 364 | ||||||
| Other assets |
4,292 | 4,360 | ||||||
| Total assets |
$ | 55,561 | $ | 62,184 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
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| Notes payable |
$ | 196 | $ | 196 | ||||
| Current portion of long-term debt |
5,243 | 6,068 | ||||||
| Accounts payable |
6,289 | 9,000 | ||||||
| Customer deposits |
893 | 498 | ||||||
| Income and other taxes payable |
8,318 | 3,534 | ||||||
| Accrued expenses |
8,440 | 9,947 | ||||||
| Total current liabilities |
29,379 | 29,243 | ||||||
| Long-term debt |
10,020 | 24,337 | ||||||
| Other liabilities |
3,309 | 3,309 | ||||||
| Total liabilities |
42,708 | 56,889 | ||||||
| Shareholders’ equity: |
||||||||
| Preferred stock, par value $.10 per share; authorized 300,000 shares; none issued |
— | — | ||||||
| Common stock, par value $.10 per share; 15,000,000 shares authorized; 6,971,470 shares issued |
697 | 697 | ||||||
| Class B stock, par value $.10 per share; 6,000,000 shares authorized: 1,890,398 shares issued |
189 | 189 | ||||||
| Capital in excess of par value |
11,343 | 11,343 | ||||||
| Retained Earnings |
8,418 | 883 | ||||||
| Accumulated other comprehensive loss |
(5,995 | ) | (6,018 | ) | ||||
| Subscription receivable from officer |
(95 | ) | (95 | ) | ||||
| Common stock in treasury, 179,400 shares at cost |
(1,704 | ) | (1,704 | ) | ||||
| 12,853 | 5,295 | |||||||
| Total liabilities and shareholders’ equity |
$ | 55,561 | $ | 62,184 | ||||
See notes to unaudited condensed consolidated financial statements.
3
GENCOR INDUSTRIES, INC.
Unaudited Condensed Consolidated Income Statements
In thousands, except per share amounts
| Three Months Ended June 30 |
Nine Months Ended June 30 |
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| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Net sales |
$ | 14,134 | $ | 17,853 | $ | 48,324 | $ | 51,158 | ||||||||
| Costs and expenses: |
||||||||||||||||
| Costs of products sold |
9,609 | 13,159 | 35,591 | 38,179 | ||||||||||||
| Product engineering and development |
436 | 450 | 1,309 | 1,300 | ||||||||||||
| Selling, general and administrative |
3,998 | 3,286 | 10,370 | 9,553 | ||||||||||||
| Restructuring costs |
— | — | — | 302 | ||||||||||||
| 14,043 | 16,895 | 47,270 | 49,334 | |||||||||||||
| Operating income |
91 | 958 | 1,054 | 1,824 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
42 | 44 | 108 | 118 | ||||||||||||
| Interest expense |
(308 | ) | (554 | ) | (1,251 | ) | (1,737 | ) | ||||||||
| Income from investees |
4,780 | — | 13,428 | 1,526 | ||||||||||||
| Miscellaneous |
65 | 384 | 12 | 456 | ||||||||||||
| 4,579 | (126 | ) | 12,297 | 363 | ||||||||||||
| Income from continuing operations before income taxes |
4,670 | 832 | 13,351 | 2,187 | ||||||||||||
| Income taxes |
2,382 | 263 | 5,816 | 834 | ||||||||||||
| Income from continuing operations |
2,288 | 569 | 7,535 | 1,353 | ||||||||||||
| Discontinued operations |
||||||||||||||||
| Income from discontinued operations, net of income taxes |
— | 5 | — | 172 | ||||||||||||
| Net income |
$ | 2,288 | $ | 574 | $ | 7,535 | $ | 1,525 | ||||||||
| Per common share: |
||||||||||||||||
| Basic: |
||||||||||||||||
| Income from continuing operations |
$ | 0.26 | $ | 0.07 | $ | 0.87 | $ | 0.16 | ||||||||
| Discontinued operations |
$ | — | $ | — | $ | — | $ | 0.02 | ||||||||
| Net income |
$ | 0.26 | $ | 0.07 | $ | 0.87 | $ | 0.18 | ||||||||
| Diluted: |
||||||||||||||||
| Income from continuing operations |
$ | 0.25 | $ | 0.06 | $ | 0.83 | $ | 0.15 | ||||||||
| Discontinued operations |
$ | — | $ | — | $ | — | $ | 0.02 | ||||||||
| Net income |
$ | 0.25 | $ | 0.06 | $ | 0.83 | $ | 0.17 | ||||||||
See notes to unaudited condensed consolidated financial statements.
4
GENCOR INDUSTRIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
In thousands
| Nine Months Ended June 30 |
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| 2003 |
2002 |
|||||||
| Operating activities: |
||||||||
| Net income |
$ | 7,535 | $ | 1,525 | ||||
| Adjustments to reconcile net income to cash provided by (used for) operating activities: |
||||||||
| Depreciation and amortization |
706 | 1,170 | ||||||
| (Gain) Loss on disposition of property and equipment |
— | (421 | ) | |||||
| Income from investees |
(13,428 | ) | (1,526 | ) | ||||
| Write-off deferred loan costs |
— | 43 | ||||||
| Bad debt expense |
1,474 | 145 | ||||||
| Other noncash items |
— | (265 | ) | |||||
| Change in assets and liabilities net of disposed business |
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| Accounts receivable |
& | |||||||