Gencor Industries Reports 20.7% Revenue Increase to $31.4 Million for December Quarter

Gencor Industries, Inc. reported a net revenue of $31.4 million for the quarter ending December 31, 2024, marking a 20.7% increase from $26.0 million in the same quarter of the previous year. The company's gross profit for the quarter was $8.7 million, resulting in a gross profit margin of 27.6%, down from 29.0% in the prior year. Operating income rose to $4.6 million, compared to $3.4 million in the previous year, driven primarily by increased revenues from contract equipment sales. However, net income decreased to $3.8 million, or $0.26 per share, from $4.3 million, or $0.30 per share, in the prior year, reflecting a higher effective tax rate of 26.0% compared to 23.0%.

The company experienced significant operational changes during the quarter, including a decrease in product engineering and development expenses, which fell to $677,000 from $801,000, attributed to reduced headcount. Selling, general, and administrative expenses saw a slight increase to $3.4 million from $3.4 million. Gencor's backlog decreased to $54.4 million as of December 31, 2024, down from $61.3 million a year earlier, indicating a potential slowdown in future revenue generation.

Gencor's financial position improved, with cash and cash equivalents rising to $40.0 million from $25.5 million at the end of the previous fiscal year. Marketable securities also increased to $90.1 million, reflecting a strategic focus on maintaining liquidity. The company reported a working capital of $186.5 million, up from $182.2 million, and cash flows from operations significantly improved to $14.8 million compared to $1.9 million in the same quarter of the previous year.

The company has faced challenges related to its independent registered public accounting firm, having transitioned from MSL, P.A. to Forvis Mazars, and subsequently to Berkowitz Pollack Brant Advisors + CPAs. These changes have contributed to delays in filing required reports with the NYSE American, although Gencor has received an extension to comply with listing standards. The company is actively working to address material weaknesses in its internal controls over financial reporting, which were identified in previous audits.

Looking ahead, Gencor remains focused on its core strategy of investing in product development and enhancing operational efficiencies. The company acknowledges potential risks from geopolitical tensions and inflation, which could impact supply chains and costs. Despite these challenges, Gencor aims to leverage its market position in the highway construction equipment sector, supported by ongoing government infrastructure spending initiatives.