What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-13 · 102 added, 73 removed, 244 unchanged (42% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

June 30, 2022

September 30,

1 unchanged sentence

Cash and cash equivalents

Marketable securities at fair value (cost of $ 94,746,000 at March 31, 2022 and $ 93,690,000 at September 30, 2021)

Accounts receivable, less allowance for doubtful accounts of $ 349,000 at March 31, 2022 and $ 321,000 at September 30, 2021

Marketable securities at fair value (cost of $ 95,216,000 at June 30, 2022 and $ 93,690,000 at September 30, 2021)

Accounts receivable, less allowance for doubtful accounts of $ 353,000 at June 30, 2022 and $ 321,000 at September 30, 2021

Costs and estimated earnings in excess of billings

3 unchanged sentences

Property and equipment, net

Deferred and other income taxes

Other long-term assets

15 unchanged sentences

15,000,000 shares authorized;

12,338,845 shares issued and outstanding at March 31, 2022 and September 30, 2021

12,338,845 shares issued and outstanding at June 30, 2022 and September 30, 2021

Class B Stock, par value $ .10 per share;

6,000,000 shares authorized;

2,318,857 shares issued and outstanding at March 31, 2022 and September 30, 2021

2,318,857 shares issued and outstanding at June 30, 2022 and September 30, 2021

Capital in excess of par value

4 unchanged sentences

GENCOR INDUSTRIES, INC.

Condensed Consolidated Income Statements

Condensed Consolidated Statements of Operations

For the Quarters Ended

For the Six Months Ended

For the Nine Months Ended

Cost of goods sold

7 unchanged sentences

Net realized and unrealized gains (losses) on marketable securities, net

Income before income tax expense

Income tax expense

Basic income per common share

Diluted income per common share

Total other income (expense), net

Income (loss) before income tax expense (benefit)

Income tax expense (benefit)

Net income (loss)

Basic Income (Loss) per Common Share:

Net income (loss) per share

Diluted Income (Loss) per Common Share:

Net income (loss) per share

See accompanying Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Shareholders’ Equity

For the Six Months Ended March 31, 2022

For the Nine Months Ended June 30, 2022

Class B Stock

3 unchanged sentences

March 31, 2022

For the Six Months Ended March 31, 2021

June 30, 2022

See accompanying Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended June 30, 2021

Class B Stock

4 unchanged sentences

March 31, 2021

June 30, 2021

See accompanying Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended March 31, 2022 and 2021

For the Nine Months Ended June 30, 2022 and 2021

Cash flows from operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities:

Purchase of marketable securities

( 101,913,000

( 101,040,000

Proceeds from sale and maturity of marketable securities

9 unchanged sentences

Customer deposits

Accrued expenses

Accrued expenses and other current liabilities

Total adjustments

Cash flows provided by operating activities

Cash flows (used in) provided by operating activities

Cash flows from investing activities:

20 unchanged sentences

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 quarter and six months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending September 30, 2022.

Operating results for the quarter and nine months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending September 30, 2022.

The accompanying Condensed Consolidated Balance Sheet at September 30, 2021 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements.

2 unchanged sentences

The acquisition was accounted for as a business combination under ASC 805, “Business Combinations.” The initial purchase price of approximately $ 14.4 million, which was subject to post-closing adjustments, was funded by cash on hand.

After post-closing adjustments transacted during the

quarter ended March 31, 2021, the final purchase price was $ 13.8 million, including $ 10.4 million in inventory and $ 3.4

million in fixed assets.

After post-closing adjustments transacted during the quarter ended March 31, 2021, the final purchase price was $ 13.8 million, including $ 10.4 million in inventory and $ 3.4 million in fixed assets.

There were no liabilities assumed.

The accompanying condensed consolidated financial statements as of March 31, 2022 and September 30, 2021, and for the quarters and six months ended March 31, 2022 and 2021, include the assets, liabilities and operating results of the paver line as of and for the periods then ended.

The accompanying condensed consolidated financial statements as of June 30, 2022 and September 30, 2021, and for the quarters and nine months ended June 30, 2022 and 2021, include the assets, liabilities and operating results of the paver line as of and for the periods then ended.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K

2 unchanged sentences

There were no accounting pronouncements recently issued or newly effective that had or are expected to have a material impact on the Company’s consolidated financial statements.

The Company continues to monitor and evaluate the risks to public health and the slowdown in overall business activity related to the COVID-19

The Company continues to monitor and evaluate the risks to public health and the overall business activity related to the COVID-19

pandemic, including impacts on its employees, customers, suppliers and financial results.

1 unchanged sentence

However, the full impact of the COVID-19

pandemic continues to evolve subsequent to the quarter ended March 31, 2022 and as of the date this Quarterly Report is issued.

pandemic continues to evolve subsequent to the quarter ended June 30, 2022 and as of the date this Quarterly Report is issued.

As such, the full magnitude that the COVID-19

pandemic will have on the Company’s financial condition and future results of operations is uncertain.

Management continues to monitor the situation on the Company’s financial condition, operations, suppliers,

industry, customers, and workforce.

Management continues to monitor the situation on the Company’s financial condition, operations, suppliers, industry, customers, and workforce.

As the spread of COVID-19

3 unchanged sentences

Global, market and economic conditions may negatively impact our business, financial condition and share price

Concerns over inflation, geopolitical issues, global financial markets and the COVID-19 pandemic have led to increased economic instability and expectations of slower global economic growth.

Concerns over inflation, geopolitical issues, global financial markets and the COVID-19

pandemic have led to increased economic instability and expectations of slower global economic growth.

Our business may be adversely affected by any such economic instability or unpredictability.

6 unchanged sentences

Fair value is determined using the quoted closing or latest bid prices for Level 1 investments and market standard valuation methodologies for Level 2 investments.

Realized gains and losses on investment transactions are determined by specific identification and are recognized as incurred in the condensed consolidated income statements.

Net changes in unrealized gains and losses are reported in the condensed consolidated income statements in the current period.

Realized gains and losses on investment transactions are determined by specific identification and are recognized as incurred in the condensed consolidated statements of operations.

Net changes in unrealized

gains and losses are reporte

d in the condensed consolidated statements of operations in the current period.

Fair Value Measurements

11 unchanged sentences

From time to time the Company may transfer cash between its marketable securities portfolio and operating cash and cash equivalents.

The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of March 31, 2022:

The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of June 30, 2022:

Fair Value Measurements

3 unchanged sentences

Cash and Money Funds

Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2022, were $( 1,598,000 ) and $( 1,531,000 ), respectively.

Net unrealized losses reported during the quarter and nine months ended June 30, 2022, were $( 3,855,000 ) and $( 5,386,000 ), respectively.

There were no transfers of investments between Level 1 and Level 2 during the nine months ended June 30, 2022.

The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2021:

4 unchanged sentences

Cash and Money Funds

Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2021, were $ 596,000 and $ 2,503,000 , respectively.

Net unrealized gains and (losses) reported during the quarter and nine months ended June 30, 2021, were $( 219,000 ) and $ 2,284,000 , respectively.

There were no transfers of investments between Level 1 and Level 2 during the nine months ended June 30, 2021.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, customer deposits and accrued expenses approximate fair value because of the short-term nature of these items.

3 unchanged sentences

The cost of work in process and finished goods includes materials, direct labor, variable costs and overhead.

The Company evaluates the need to record inventory adjustments on all inventories, including raw material, work in process, finished goods, spare parts and used equipment.

Used equipment acquired by the Company on trade-in from customers is carried at estimated net realizable value.

Unless specific circumstances warrant different treatment regarding inventory obsolescence, an allowance is established to reduce the cost basis of inventories

three to four years old by 50 %, the cost basis of inventories four to five years old by 75 %, and the cost basis of inventories greater than five years old to zero .

evaluates the need to record inventory adjustments on all inventories, including raw material, work in process, finished goods, spare parts and used equipment.

Used equipment acquired by the Company on trade-in

from customers is carried at estimated net realizable value.

Unless specific circumstances warrant different treatment regarding inventory obsolescence, an allowance is established to reduce the cost basis of inventories three to four years old by 50 %, the cost basis of inventories four to five years old by 75 %, and the cost basis of inventories greater than five years old to zero .

Inventory is typically reviewed for obsolescence on an annual basis computed as of September 30, the Company’s fiscal year end.

If significant known changes in trends, technology or other specific circumstances that warrant consideration occur during the year, then the impact on obsolescence is considered at that time.

Net inventories at March 31, 2022 and September 30, 2021 consist of the following:

If significant known changes in trends, technology or other specific circumstances that warrant consideration occur during the year, then the impact on obsolescence is considered at

Net inventories at June 30, 2022 and September 30, 2021 consist of the following:

June 30, 2022

September 30, 2021

3 unchanged sentences

Used equipment

Slow-moving and obsolete inventory allowances were $ 6,828,000 and $ 5,397,000 at March 31, 2022 and September 30, 2021, respectively.

Slow-moving and obsolete inventory allowances were $ 7,975,000 and $ 5,397,000 at June 30, 2022 and September 30, 2021, respectively.

Note 4 – Costs and Estimated Earnings in Excess of Billings

Costs and estimated earnings in excess of billings on uncompleted contracts as of March 31, 2022 and September 30, 2021 consist of the following:

Costs and estimated earnings in excess of billings on uncompleted contracts as of June 30, 2022 and September 30, 2021 consist of the following:

June 30, 2022

September 30, 2021

3 unchanged sentences

Costs and estimated earnings in excess of billings

Note 5 – Earnings per Share Data

The Condensed Consolidated Financial Statements include basic and diluted earnings per share information.

The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended March 31, 2022 and 2021:

Quarter Ended March 31,

Six Months Ended March 31,

Note 5 – Earnings (Loss) per Share Data

The condensed consolidated financial statements include basic and diluted earnings (loss) per share information.

The following table sets forth the computation of basic and diluted earnings (loss) per share for the quarters and nine months ended June 30, 2022 and 2021:

Quarter Ended June 30,

Nine Months Ended June 30,

Net Income (loss)

Common Shares:

2 unchanged sentences

Diluted shares outstanding

Net income per share

Basic earnings per share are based on the weighted-average number of shares outstanding.

Net income (loss) per share

Basic earnings (loss) per

share are based on the weighted-average number of shares outstanding.

Diluted earnings per share are based on the sum of the weighted-average number of shares outstanding plus common stock equivalents.

As of September 30, 2021, no options were available for granting of awards under the 2009 Incentive Compensation Plan (the “2009 Plan”) and as of November 1, 2021, there were no outstanding stock options under the 2009 Plan.

For the quarter and six months ended M

arch 31, 2022, there were no common stock equivalents included in the diluted earnings per share calculation.

The weighted-average shares issuable upon the exercise of stock options included in the diluted earnings per share calculation for the quarter ended March 31, 2021 were 252,000 , which equates to 133,000 dilutive common stock equivalents.

The weighted-average shares issuable upon the exercise of stock options included in the diluted earnings per share calculation for the six months ended March 31, 2021 were 252,000 , which equates to 129,000 dilutive common stock equivalents.

There were no anti-dilutive shares for the quarter and six months ended March 31, 2022 and March 31, 2021.

For the quarter and nine months ended June 30, 2022, there were no common stock equivalents included in the diluted earnings per share calculation.

The weighted-average shares issuable upon the exercise of stock options included in the diluted earnings per share calculation for the quarter and nine months ended June 30, 2021 were 252,000 and 252,000 , respectively, which equates to 132,000 and 129,000 dilutive common stock equivalents, respectively.

There were no anti-dilutive shares for the quarter and nine months ended June 30, 2022 and June 30, 2021.

Note 6 – Customers with 10% (or greater) of Net Revenues

During the quarter ended March 31, 2022, one customer accounted for 13.6 % of net revenues.

During the quarter ended March 31, 2021, one other customer accounted for 12.0 % of net revenues.

During the six months ended March 31, 2022 and March 31, 2021, no customer accounted for 10 % or greater of net revenues.

During the quarter ended June 30, 2022, two customers accounted for 15.2 % and 14.5 % of net revenues, respectively.

During the nine months ended June 30, 2022, no customer accounted for 10 % or greater of net revenues.

During the quarter ended June 30, 2021, one customer accounted for 17.5 % of net revenues.

During the nine months ended June 30, 2021, no customer accounted for 10 % or more of net revenues.

Note 7 – Income Taxes

5 unchanged sentences

All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, the Company is more likely than not to realize the benefit of a deferred tax asset and whether a valuation allowance is needed for some portion or all of a deferred tax asset.

No such valuation allowances were recorded as of March 31, 2022 and September 30, 2021.

No such valuation allowances were recorded as of June 30, 2022 and September 30, 2021.

The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year.

2 unchanged sentences

book income) from period to period.

The Company’s effective tax rates for the quarters and six months ended March 31, 2022 and March 31, 2021 reflect the impact of the reduced rates under the U.S.

The Company’s effective tax rates for the quarters and nine months ended June 30, 2022 and June 30, 2021 reflect the impact of the reduced rates under the U.S.

Tax Cuts and Jobs Act (the “Tax Reform Act) which was signed into law on December 22, 2017.

2 unchanged sentences

Revenue from Contracts with Customers

The following table disaggregates the Company’s net revenue by major source for the quarters and six months ended March 31, 2022 and 2021:

Quarter Ended March 31,

Six Months Ended March 31,

The following table disaggregates the Company’s net revenue by major source for the quarters and nine months ended June 30, 2022 and 2021:

Quarter Ended June 30,

Nine Months Ended June 30,

Equipment sales recognized over time

3 unchanged sentences

Revenues from contracts with customers for the design, manufacture and sale of custom equipment are recognized over time when the performance obligation is satisfied by transferring control of the equipment.

Control of the equipment transfers over time, as the equipment is unique to the specific contract and thus does not create an asset

with an alternative use to the Company.

Control of the equipment transfers over time, as the equipment is unique to the specific contract and thus does not create an asset with an alternative use to the Company.

Revenues and costs are recognized in proportion to actual labor costs incurred, as compared with total estimated labor costs expected to be incurred, during the entire contract.

2 unchanged sentences

Contract assets (excluding accounts receivable) under contracts with customers represent revenue recognized in excess of amounts billed on equipment sales recognized over time.

These contract assets were $ 1,629,000 at March 31, 2022 and $ 1,903,000 at September 30, 2021, and are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheets.

The Company anticipates that all of the contract assets at March 31, 2022, will be billed and collected within one year .

These contract assets were $ 1,366,000 at June 30, 2022 and $ 1,903,000 at September 30, 2021, and are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheets.

The Company anticipates that all of the contract assets at June 30, 2022, will be billed and collected within one year .

Revenues from all other contracts for the design and manufacture of equipment, for service and for parts sales, net of any discounts and return allowances, are recorded at a point in time when control of the goods or services has been transferred.

2 unchanged sentences

Payment for services under contract with customers is due as services are completed.

Accounts receivable related to contracts with customers for equipment sales were $ 130,000 and $ 210,000 at March 31, 2022 and September 30, 2021, respectively.

Accounts receivable related to contracts with customers for equipment sales were $ 79,000 and $ 210,000 at June 30, 2022 and September 30, 2021, respectively.

Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized.

Under certain contracts with customers, recognition of a portion of the consideration received may be deferred and recorded as a contract liability if the Company has to satisfy a future obligation, such as to provide installation assistance.

There were no contract liabilities other than customer deposits at March 31, 2022 and September 30, 2021.

Customer deposits related to contracts with customers were $ 10,286,000 and $ 5,244,000 at March 31, 2022 and September 30, 2021, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets.

There were no contract liabilities other than customer deposits at June 30, 2022 and September 30, 2021.

Customer deposits related to contracts with customers were $ 7,436,000 and $ 5,244,000 at June 30, 2022 and September 30, 2021, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets.

The Company records revenues earned for shipping and handling as freight revenue at the time of shipment, regardless of whether or not it is identified as a separate performance obligation.

12 unchanged sentences

operating leases.

Future minimum rental payments under these leases at March 31, 2022 were immaterial.

Future minimum rental payments under these leases at June 30, 2022 were immaterial.

On August 28, 2020, the Company entered into a three-year operating lease for property related to the manufacturing and warehousing of the Blaw-Knox paver product line which was acquired on October 1, 2020.

8 unchanged sentences

In March 2022, the ROU asset and related liability was reduced by $ 39,000 to reflect the impact of a reduction in the square footage being leased.

For the quarter and six months ended March 31, 2022, operating lease costs were $ 101,000 and $ 202,000 , respectively, and cash payments related to these operating leases were $ 107,000 and $ 216,000 , respectively.

For the quarter and six months ended March 31, 2021, operating lease costs were $ 105,000 and $ 194,000 , respectively, and cash payments related to these operating leases were $ 116,000 and $ 232,000 , respectively.

Other information concerning the Company’s operating lease accounted for under ASC 842 guidelines as of March 31, 2022 and September 30, 2021, is as follows:

March 31, 2022

For the quarter and nine months ended June 30, 2022, operating lease costs were $ 99,000

and $ 301,000

, respectively, and cash payments related to these operating leases were $ 104,000

and $ 320,000

, respectively.

For the quarter and nine months ended June 30, 2021, operating lease costs were $ 106,000

and $ 301,000

, respectively, and cash payments related to these operating leases were $ 105,000

and $ 349,000

, respectively.

Other information concerning the Company’s operating lease accounted for under ASC 842 guidelines as of June 30, 2022 and September 30, 2021, is as follows:

June 30, 2022

September 30, 2021

4 unchanged sentences

Weighted average discount rate used in calculating ROU asset

Future annual minimum lease payments as of March 31, 2022 are as follows:

Future annual minimum lease payments as of June 30, 2022 are as follows:

Annual Lease Payments

8 unchanged sentences

The Company also services and sells parts for its equipment.

Note 11 - Subsequent Events

On July 19, 2022, the Company announced that it was transferring the listing of its common stock, $ 0.10

per share par value (“Common Stock”), to the NYSE American LLC (“NYSE American”) from the NASDAQ Global Market (“NASDAQ”).

Listing and trading of the Company’s Common Stock on NASDAQ ended at market close on July 29, 2022 and listing and trading of its Common Stock on the NYSE American commenced at market open on August 1, 2022 under its current ticker

symbol ‘GENC’.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements