What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-12 · 88 added, 92 removed, 226 unchanged (44% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

March 31, 2023

June 30, 2023

September 30,

1 unchanged sentence

Cash and cash equivalents

Marketable securities at fair value (cost of $ 88,987,000 at March 31, 2023 and $ 94,879,000 at September 30, 2022)

Accounts receivable, less allowance for doubtful accounts of $ 528,000 at March 31, 2023 and $ 370,000 at September 30, 2022

Marketable securities at fair value (cost of $ 89,502,000

at June 30, 2023 and $ 94,879,000

at September 30,

Accounts receivable, less allowance for doubtful accounts of $ 598,000

at June 30, 2023 and $ 370,000

at September 30, 2022

Costs and estimated earnings in excess of billings

9 unchanged sentences

Customer deposits

Billings in excess of costs and estimated earnings

Accrued expenses

9 unchanged sentences

15,000,000 shares authorized;

12,338,845 shares issued and outstanding at March 31, 2023 and September 30, 2022

Class B Stock, par value $ .10

12,338,845 shares issued and outstanding at June 30, 2023 and September 30, 2022

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

6,000,000 shares authorized;

2,318,857 shares issued and outstanding at March 31, 2023 and September 30, 2022

2,318,857 shares issued and outstanding at June 30, 2023 and September 30, 2022

Capital in excess of par value

2 unchanged sentences

Total Liabilities and Shareholders’ Equity

See accompanying

Notes to Condensed Consolidated

Financial Statements

See accompanying Notes to Condensed Consolidated Financial Statements

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

8 unchanged sentences

Total other income (expense), net

Income before income tax expense

Income tax expense

Basic income per common share

Diluted income per common share

See accompanying Notes to Condensed Consolidated

Financial Statements

Income (loss) before income tax expense (benefit)

Income tax expense (benefit)

Net income (loss)

Basic and diluted income (loss) per common share

See accompanying Notes to Condensed Consolidated Fi

nancial Statements

GENCOR INDUSTRIES, INC.

Condensed Consolidated Statements of Shareholders’ Equity

For the Six Months Ended March 31, 2023

For the Quarters and Nine Months Ended June 30, 2023

Class B Stock

Excess of Par

Shareholders’

2 unchanged sentences

March 31, 2023

For the Six Months Ended March 31, 2022

June 30, 2023

For the Quarters and Nine Months Ended June 30, 2022

Class B Stock

Excess of Par

Shareholders’

2 unchanged sentences

March 31, 2022

See accompanying Notes to Condensed Consolidated Financial Statements

June 30, 2022

See accompanying Notes to Condensed Consolidated Finan

cial Statements

GENCOR INDUSTRIES, INC.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended March 31, 2023 and 2022

For the Nine Months Ended June 30, 2

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 operating activities:

Purchase of marketable securities

( 118,867,000

( 101,913,000

Proceeds from sale and maturity of marketable securities

12 unchanged sentences

Total adjustments

Cash flows provided by operating activities

Cash flows used in operating activities

Cash flows from investing activities:

1 unchanged sentence

Cash flows used in investing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at:

4 unchanged sentences

Operating lease liabilities

See accompanying Notes to Condensed Consolidated

See accompanying Notes to Condensed Consolidated Financial Statements

GENCOR INDUSTRIES, INC.

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial S

Note 1 – Basis of Presentation

3 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, 2023 are not necessarily indicative of the results that may be expected for the year ending September 30, 2023.

Operating results for the quarter and nine months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending September 30, 2023.

The accompanying Condensed Consolidated Balance Sheet at September 30, 2022 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.

14 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 reported in the Condensed Consolidated Statements of Operations in the current period.

Fair Value Measurements

2 unchanged sentences

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The fair value of marketable equity securities (stocks), mutual funds, exchange-traded funds, government securities, and cash and money funds, are substantially based on quoted market prices (Level 1).

e fair value of marketable equity securities (stocks), mutual funds, exchange-traded funds, government securities, and cash and money funds, are substantially based on quoted market prices (Level 1).

Corporate bonds are valued using market standard valuation methodologies, including:

6 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, 2023:

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, 2023:

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, 2023, were $ 2,112,000 and $ 4,443,000 , respectively.

Net unrealized gains and (losses) included in the Condensed Consolidated Statements of Operations for the quarter and nine months ended June 30, 2023, were $ 46,000 and $ 4,490,000 , respectively.

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

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, 2022, were $( 1,598,000 ) and $( 1,531,000 ), respectively

Net unrealized gains and (losses) included in the Condensed Consolidated Statements of Operations for the quarter and nine months ended June 30, 2022, were $( 3,855,000 ) and $( 5,386,000 ), respectively.

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.

2 unchanged sentences

Appropriate consideration is given to obsolescence, excessive levels, deterioration, possible alternative uses and other factors in determining net realizable value.

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

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.

3 unchanged sentences

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, 2023 and September 30, 2022 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 that

Net inventories at June 30, 2023 and September 30, 2022 consist of the following:

June 30, 2023

September 30, 2022

2 unchanged sentences

Finished goods

Slow-moving and obsolete inventory allowances were $ 8,573,000 and $ 8,192,000 at March 31, 2023 and September 30, 2022, respectively.

Note 4 – Costs and Estimated Earnings in Excess of Billings and Billings in Excess of Costs and Estimated Earnings

Billings in excess of costs and estimated earnings on uncompleted contracts as of March 31, 2023, and costs and estimated earnings in excess of billings on uncompleted contracts as of September 30, 2022, consist of the following:

March 31, 2023

Slow-moving and obsolete inventory allowances were $ 9,551,000 and $ 8,192,000 at June 30, 2023 and September 30, 2022, respectively.

Note 4 – Costs and Estimated Earnings in Excess of Billings

Costs and estimated earnings in excess of billings on uncompleted contracts as of June 30, 2023 and September 30, 2022 consist of the following:

June 30, 2023

September 30, 2022

3 unchanged sentences

Costs and estimated earnings in excess of billings

Billings in excess of costs and estimated earnings

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, 2023 and 2022:

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, 2023 and 2022:

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 and diluted income (loss) per common share

The Company’s 2009 Incentive Compensation Plan expired on October 1, 2021 and as of November 1, 2021 there were no outstanding stock options under the 2009 Plan.

There were no other existing equity compensation plans and arrangements previously approved by security holders as of March 31, 2023 and 2022.

There were no other existing equity compensation plans and arrangements previously approved by security holders as of June 30, 2023 and 2022.

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

During the quarter ended March 31, 2023, two customers accounted for 12.7 % and 11.6 %, respectively, of net revenues.

During the six months ended March 31, 2023, no customer accounted for 10 % or greater of net revenues.

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

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

During the quarter ended June 30, 2023, three

customers accounted for 27.7 %, 14.8 % and 13.8 %, respectively, of net revenues.

During the nine months ended June 30, 2023,

of these three customers

accounted for 11.9 % of net revenues.

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

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

Note 7 – Income Taxes

Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and primarily

consist of taxes currently due, plus deferred taxes.

Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and primarily consist of taxes currently due, plus deferred taxes.

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns using current tax rates.

3 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, 2023 and September 30, 2022.

The Company’s income tax provision is based on management’s estimate of the effective

tax rate for the full year.

No such valuation allowances were recorded as of June 30, 2023 and September 30, 2022.

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

The tax provision in any period will be affected by, among other things, permanent, as well as temporary differences in the deductibility of certain items, in addition to changes in tax legislation.

1 unchanged sentence

book income) from period to period.

The Company’s effective tax rates for the quarters and six months ended March 31, 2023 and March 31, 2022 reflect income tax rates under the Tax Cuts and Jobs Act of 2017 (the “TCJA”).

The Company’s effective tax rates for the quarters and nine months ended June 30, 2023 and June 30, 2022 reflect income tax rates under the Tax Cuts and Jobs Act of 2017 (the “TCJA”).

Beginning in 2022, the TCJA eliminated the option of expensing all research and development expenditures in the current year, instead requiring amortization over five years pursuant to IRC Section 174.

7 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, 2023 and 2022:

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, 2023 and 2022:

Quarter Ended June 30,

Nine Months Ended June 30,

Equipment sales recognized over time

8 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 zero at March 31, 2023 and $

2,118,000 at September 30, 2022.

Contract are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheet at September 30, 2022.

These contract assets were $ 6,913,000 at June 30, 2023 and $ 2,118,000 at September 30, 2022.

Contract assets are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheet at June 30, 2023 and September 30, 2022.

The Company anticipates that all of the contract assets at June 30, 2023, 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 $ 144,000 and $ 142,000 at March 31, 2023 and September 30, 2022, respectively.

Accounts receivable related to contracts with customers for equipment sales were $ 73,000 and $ 142,000 at June 30, 2023 and September 30, 2022, 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 and billings in excess of costs and estimated earnings at March 31, 2023 and customer deposits at September 30, 2022.

Customer deposits related to contracts with customers were $

12,323,000 and $ 5,864,000

at March 31, 2023 and September 30, 2022, respectively, and are included in current

liabilities on the Company’s condensed consolidated balance sheets.

Billings in excess of costs and estimated earnings were $ 703,000 at March 31, 2023 and zero at September 30, 2022.

These contract liabilities represent billings in excess of revenue recognized on equipment sales recognized over time, and are included current liabilities on the Company’s condensed consolidated balance sheet at March 31, 2023.

There were no contract liabilities other than customer deposits at June 30, 2023 and September 30, 2022.

Customer deposits related to contracts with customers were $ 5,834,000 and $ 5,864,000 at June 30, 2023 and September 30, 2022, 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, 2023 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.

Future minimum rental payments under these leases at June 30, 2023 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 paver line.

The lease term is for the period from September 1, 2020 through August 31, 2023 .

3 unchanged sentences

In accordance with ASU 2016-02,

the Company recorded a ROU asset totaling $ 352,000 and related

lease liabilities upon extension.

the Company recorded a ROU asset totaling $ 352,000 and related lease liabilities upon extension.

On October 9, 2020, the Company entered into an operating lease for additional warehousing space.

3 unchanged sentences

An additional $ 39,000 was recorded as a ROU asset and related lease liability in October 2021 to reflect the impact of the lease renewal.

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, 2023, operating lease costs were $ 107,000 and $

respectively, and cash payments related to these operating leases were $ 110,000 and $ 243,000 , respectively.

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.

Other information concerning the Company’s operating lease accounted for under ASC

842 guidelines as of March 31, 2023 and September 30, 2022, is as follows:

March 31, 2023

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 nine months ended June 30, 2023, operating lease costs were $ 101,000 and $ 315,000 , respectively, and cash payments related to these operating leases were $ 101,000 and $ 344,000 , respectively.

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.

Other information concerning the Company’s operating lease accounted for under ASC 842 guidelines as of June 30, 2023 and September 30, 2022, is as follows:

June 30, 2023

September 30, 2022

4 unchanged sentences

Weighted average discount rate used in calculating ROU asset

Future annual minimum lease payments as of March 31, 2023 are as follows:

Future annual minimum lease payments as of June 30, 2023 are as follows:

Annual Lease Payments

2023 (remaining 3 months)

8 unchanged sentences

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