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, 2004
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 28, 2004 | |
| Common stock, $.10 par value |
6,921,570 shares | |
| Class B stock, $.10 par value |
1,798,398 shares |
Index
| Page | ||||||
| Part I. |
||||||
| Item 1. |
||||||
| Condensed consolidated balance sheets – June 30, 2004 (Unaudited) and September 30, 2003 |
3 | |||||
| 4 | ||||||
| Unaudited condensed consolidated statements of cash flows – Nine-months ended June 30, 2004 and 2003 |
5 | |||||
| Notes to unaudited condensed consolidated financial statements |
6 | |||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 | ||||
| Item 3. |
10 | |||||
| Item 4. |
11 | |||||
| Part II. |
||||||
| Item 6. |
12 | |||||
| 13 | ||||||
2
Condensed Consolidated Balance Sheets
In thousands, except share amounts
| June 30 2004 |
September 30 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 310 | $ | 734 | ||||
| Accounts receivable, less allowance for doubtful accounts of $2,498 ($2,428 at September 30, 2003) |
3,495 | 3,344 | ||||||
| Inventories |
11,456 | 12,560 | ||||||
| Deferred Income Taxes |
1,066 | 1,066 | ||||||
| Prepaid expenses |
1,007 | 1,627 | ||||||
| Total current assets |
17,334 | 19,331 | ||||||
| Property and equipment, net |
11,438 | 11,585 | ||||||
| Assets held for sale |
5,672 | 5,672 | ||||||
| Other assets |
3,895 | 4,046 | ||||||
| Total assets |
$ | 38,339 | $ | 40,634 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 3,469 | $ | 3,448 | ||||
| Customer deposits |
1,244 | 1,106 | ||||||
| Income and other taxes payable |
4,262 | 3,639 | ||||||
| Accrued expenses |
9,354 | 8,325 | ||||||
| Total current liabilities |
18,329 | 16,518 | ||||||
| Long-term debt |
806 | 5,321 | ||||||
| Deferred Income Taxes |
577 | 2,877 | ||||||
| Other liabilities |
3,309 | 3,309 | ||||||
| Total liabilities |
23,021 | 28,025 | ||||||
| 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; 6,988,970 shares issued (6,971,470 shares issued September 30, 2003) |
699 | 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 |
11,370 | 11,343 | ||||||
| Retained Earnings |
10,776 | 8,143 | ||||||
| Accumulated other comprehensive loss |
(5,917 | ) | (5,964 | ) | ||||
| Subscription receivable from officer |
(95 | ) | (95 | ) | ||||
| Common stock in treasury, 179,400 shares at cost |
(1,704 | ) | (1,704 | ) | ||||
| 15,318 | 12,609 | |||||||
| Total liabilities and shareholders’ equity |
$ | 38,339 | $ | 40,634 | ||||
See notes to unaudited condensed consolidated financial statements.
3
Unaudited Condensed Consolidated Income Statements
In thousands, except per share amounts
| Three Months Ended June 30 |
Nine Months Ended June 30 |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Net sales |
$ | 12,407 | $ | 14,134 | $ | 42,816 | $ | 48,324 | ||||||||
| Costs and expenses: |
||||||||||||||||
| Costs of products sold |
8,573 | 9,609 | 29,764 | 35,591 | ||||||||||||
| Product engineering and development |
454 | 436 | 1,411 | 1,309 | ||||||||||||
| Selling, general and administrative |
2,419 | 3,998 | 7,490 | 10,370 | ||||||||||||
| 11,446 | 14,043 | 38,665 | 47,270 | |||||||||||||
| Operating income |
961 | 91 | 4,151 | 1,054 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
3 | 42 | 14 | 108 | ||||||||||||
| Interest expense |
(29 | ) | (308 | ) | (131 | ) | (1,251 | ) | ||||||||
| Income from investees |
— | 4,780 | — | 13,428 | ||||||||||||
| Miscellaneous |
11 | 65 | 129 | 12 | ||||||||||||
| (15 | ) | 4,579 | 12 | 12,297 | ||||||||||||
| Income before income taxes |
946 | 4,670 | 4,163 | 13,351 | ||||||||||||
| Income taxes |
302 | 2,382 | 1,530 | 5,816 | ||||||||||||
| Net income |
$ | 644 | $ | 2,288 | $ | 2,633 | $ | 7,535 | ||||||||
| Per common share: |
||||||||||||||||
| Basic and diluted earnings per share: |
||||||||||||||||
| Basic earnings per share |
$ | 0.07 | $ | 0.26 | $ | 0.30 | $ | 0.87 | ||||||||
| Diluted earnings per share |
$ | 0.07 | $ | 0.26 | $ | 0.28 | $ | 0.85 | ||||||||
See notes to unaudited condensed consolidated financial statements.
4
Unaudited Condensed Consolidated Statements of Cash Flows
In thousands
| Nine Months Ended June 30 |
||||||||
| 2004 |
2003 |
|||||||
| Operating activities: |
||||||||
| Net income |
$ | 2,633 | $ | 7,535 | ||||
| Adjustments to reconcile net income to cash provided by (used for) operating activities: |
||||||||
| Deferred income taxes |
(2,300 | ) | — | |||||
| Depreciation and amortization |
619 | 706 | ||||||
| Income from investees |
— | (13,428 | ) | |||||
| Bad debt expense |
260 | 1,474 | ||||||
| Change in assets and liabilities |
||||||||
| Accounts receivable |
(411 | ) | 1,767 | |||||
| Inventories |
1,104 | 4,911 | ||||||
| Prepaid expenses |
620 | 807 | ||||||
| Other assets |
27 | 9 | ||||||
| Accounts payable |
21 | (2,122 | ) | |||||
| Customer deposits |
138 | 418 | ||||||
| Income and other taxes payable |
623 | 4,784 | ||||||
| Accrued expenses and other |
1,029 | (1,510 | ) | |||||
| Total adjustments |
1,730 | (2,184 | ) | |||||
| Net cash provided by operating activities |
4,363 | 5,351 | ||||||
| Investing activities: |
||||||||
| Distributions from unconsolidated investees |
— | 13,428 | ||||||
| Capital expenditures |
(348 | ) | (84 | ) | ||||
| Stock options exercised |
17 | — | ||||||
| Net cash provided by (used for) investing activities |
(331 | ) | 13,344 | |||||
| Financing activities: |
||||||||
| Repayment of debt |
(4,515 | ) | (15,142 | ) | ||||
| Net cash used for financing activities |
(4,515 | ) | (15,142 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
59 | 255 | ||||||
| Increase (decrease) in cash and cash equivalents |
(424 | ) | 3,808 | |||||
| Cash and cash equivalents, beginning of period |
734 | 12,305 | ||||||
| Cash and cash equivalents, end of period |
$ | 310 | $ | 16,113 | ||||
See notes to unaudited condensed consolidated financial statements.
5
GENCOR INDUSTRIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
All amounts in thousands, except per share amounts
Note 1 – Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three- and nine-month periods ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending September 30, 2004.
The balance sheet at September 30, 2003 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
For further information, refer to the consolidated financial statements and footnotes thereto included in the Gencor Industries, Inc. Annual Report on Form 10-K for the year ended Septem