Gencor Industries, Inc. (GENC) research, news, and more from GeoInvesting

Company description

Wed, 16 Dec 2015 20:22:23 GMT

Gencor Industries, Inc., together with its subsidiaries, designs, manufactures, and sells machinery products for the production of highway construction materials, synthetic fuels, and environmental control equipment. It provides hot-mix asphalt plants to produce asphalt paving materials; related asphalt plant equipment, including hot mix storage silos, fabric filtration systems, cold feed bins, and other plant components; and a range of mobile batch plants and trommel screens. The company also offers combustion systems for the asphalt and aggregate drying industries; soil remediation machines; combustion systems for rotary dryers, kilns, fume and liquid incinerators, and fuel heaters; and industrial incinerators. In addition, it manufactures thermal fluid heat transfer systems that transfer heat for storage, heating, and pumping viscous materials, such as asphalt, chemicals, and heavy oils in various industrial and petrochemical applications; and specialty storage tanks for industrial uses. The company sells its products to the highway construction industry through its sales representatives, and independent dealers and agents in the United States and internationally. The company was formerly known as Mechtron International Corporation and changed its name to Gencor Industries, Inc in 1987. Gencor Industries, Inc. was founded in 1968 and is based in Orlando, Florida.

Research

Wed, 14 Aug 2024 04:00:00 GMT

Gencor Industries, Inc. (NYSE:GENC) Added to Buy on Pullback Model Portfolio #12

Pullback on delay in orders, which are slated to fill in coming quarters. Stocks pulling back on a delay in orders is one of our favorite buy on pullback setups.

Caveat - long history of inconsistent growth, and hoarding cash instead of putting forth better capital allocation initiatives.

We are particularly excited about these two stocks due to the performance of our infrastructure screen that has a current average return of 238.23%, and an average peak return of 324.17%.

Gencor Industries, Inc. is a diversified heavy machinery manufacturer for the production of highway construction materials and equipment and environmental control machinery and equipment used in a variety of applications.

Research

Fri, 15 Dec 2023 15:24:47 GMT

Gencor Industries, Inc. (NYSE:GENC) ($16.50; 224.2M market cap) announced Q4 2023 results:

Sales of $20.9 million vs $23.1 million in the prior year
Non GAAP EPS of $0.14 vs $0.14 in the prior year
The Company’s backlog was $57.8 million at December 1, 2023 compared to $43.2 million at December 1, 2022.

“We kicked-off our fiscal 2024 selling season with very strong demand and sales of our equipment which have remained steady. As a result, our backlog has increased well above historic norms and sales inquiries continue to be elevated, giving confidence that we should continue to benefit from incremental U.S. government infrastructure funding.”

We are watching GENC closely due to the company’s backlog being at its highest point in some time, and the anticipation of future government spending related to the infrastructure bill passed by Congress in 2021.

It’s also worth noting that other infrastructure stocks have been on fire like, Nv5 Global, Inc. (NASDAQ:NVEE), Ies Holdings, Inc. (NASDAQ:IESC) and Smith-Midland Corporation (NASDAQ:SMID), three stocks that used to occupy our model portfolios in the past. Obviously we should have never removed them ??.

We will continue to look into GENC backlog trends and the impact it may beave on forward revenues and earnings per share.

At current prices and based on trailing adjusted EPS of $0.70, shares are trading at P/E of 23x, which we would consider fairly valued in the short-term. Our job is to determine if future earnings will materially rise, given the nice backlog.

Research

Fri, 02 Dec 2016 16:00:14 GMT

GENC ($14.20) announced Q4 2016 results:

Sales of $14.8 million vs $8.2 million in the prior year
EPS of $0.12 vs a loss of $0.15 in the prior year
Backlog at September 30, 2016 of $43 million represents a 131% increase from a year ago.

Quotes from management:

“Our industry has been rejuvenated and Gencor’s results are reflecting it. Our fourth quarter 2016 revenues increased 79% which is on top of a 68% increase in revenues in the fourth quarter 2015. What is typically our slowest quarter from a revenue perspective, this year we experienced an improvement. Orders came in throughout the summer and customers were requesting deliveries into the fall and early winter months.

We have been closely watching GENC for nearly a year now. On December 10, 2015 we highlighted GENC and offered our financial modeling on projected revenues based off the strong sales backlog. See our full reasons for tracking the company and our financial model here. (Stock was trading at $12.75 at that time). GENC is benefitting from the December 2015 passage of the FAST Act. The FAST Act authorizes $305 billion over fiscal years 2016 through 2020 for highway, highway and motor vehicle safety, public transportation, motor carrier safety, hazardous materials safety, rail, and research, technology, and statistics programs.

We brought the company up again due to the increase in investor optimism over stocks involved in the infrastructure industry after Donald Trump’s victory. We also had referenced the company’s strong cash position in our November 14, 2016 research note. While the raw cash position/marketable securities position is still strong and increasing, we failed to take into account the 3-2 split in our cash calculation of $10.04. The split adjusted cash per share is $7.38, up from around $6.80.

Research

Mon, 14 Nov 2016 16:21:50 GMT

GENC ($13.95) - Shares hit a new 52 week of $14.00 in Friday’s trading session. We have been closely watching GENC for nearly a year now, and the infrastructure theme and strong company comments have us looking at it again. On December 10, 2015 we highlighted GENC and offered our financial modeling on projected revenues based off the strong sales backlog. See our full reasons for tracking the company and our financial model here. (Stock was trading at $12.75 at that time)

Per the Company’s Q3 2016 earnings release, Q4 guidance implies the GENC will do at least $0.20. If the company can continue to fire on all cylinders we see this as a potential growth + value play.

GENC’s strong cash position plus industry tailwinds make the stock hard to ignore. The Company’s cash of $10.8 million plus relatively stable marketable securities value is $96.4 million or $10.04.

Pretax margins of 17% are also appealing. We will continue our diligence.

Caveat

Past fraud allegations regarding acquisition.

Research

Tue, 09 Aug 2016 14:55:46 GMT

GENC ($12.78) - On December 10, 2015 we highlighted GENC and offered our financial modeling on projected revenues based off the strong sales backlog. See our full reasons for tracking and our financial model here.

This morning, GENC reported strong Q3 results:

Sales of $19.9 million vs $10.9 million in the prior year period
EPS of $0.22 vs $0.03 in the prior year period

Quotes from management:

“I am pleased to report another quarter of significant growth for Gencor. Revenues increased over 80% in the third quarter and 78% for the first nine months of fiscal 2016. Demand for Gencor’s equipment continues to be robust. Gross margins remain solid even though pricing is very competitive. SG&A as a percentage of revenue has dropped notably as a result of maintaining tight controls on general and administrative expenses. We have increased sales efforts to capitalize on the greatly improved outlook for the domestic highway construction industry.

A substantial portion of the $21 million current backlog will be recognized in the fourth quarter. In the fourth quarter of fiscal 2015 we reported revenues of $8.2 million. Thus, we are optimistic that the fourth quarter of 2016 will be another quarter of solid growth. Furthermore, we have secured favorable raw material pricing contracts for the fourth quarter and going into fiscal 2017. Therefore, we expect fourth quarter gross margins to be consistent with the most recent quarters. Quoting activity for fiscal 2017 deliveries looks encouraging. We continue to ramp up our operations to meet the increased demand for our equipment.”

Share Structure

Mon, 11 Jul 2016 14:41:03 GMT

ORLANDO, Fla., July 11, 2016 (GLOBE NEWSWIRE) -- Gencor Industries, Inc., (NASDAQ:GENC) (the “Company”) announced that its Board of Directors has approved a three-for-two split of the Company's Common and Class B stock to be effected in the form of a 50% stock dividend. As a result, shareholders will receive one additional share of Common or Class B stock for every two shares they held of the respective class of stock as of the record date. These shares will be distributed on August 1, 2016, to shareholders of record as of the end of business on July 22, 2016.

Following the 50% stock dividend, the Company’s total shares outstanding of Common and Class B stock will be 12,073,698 and 2,263,857, respectively.

Commenting on the announcement, E.J. Elliott, the Company’s Chairman and Chief Executive Officer, said: “The decision to split the stock reflects the Board of Directors’ confidence in the Company’s future growth. Gencor reported solid results in the first half of fiscal year 2016, highlighted by a 76% increase in revenues, net income of $3.2 million versus $0.1 million in the first half of fiscal year 2015 and a strong backlog going into the third quarter. By increasing the number of shares available for sale to the public, we believe the stock dividend will increase the liquidity of the Company's stock."

Research

Tue, 10 May 2016 15:07:06 GMT

GENC ($14.93) On December 10, 2015 we stated we were closely monitoring a few names that may benefit from the recent transportation bill passage. We highlighted GENC and offered our financial modeling on projected revenues based off the strong sales backlog. See our full reasons for tracking and our financial model here. Yesterday, after the close GENC reported strong Q2 2016 results:

Sales of $22.1 million vs $13.8 million in the prior year
EPS of $0.17 vs $0.12 in the prior year

Quotes from management:

“Domestic demand for our products continues to be robust. Customers have begun making inquiries for shipments of our asphalt plants into 2017. Typically, customers start planning the purchase of next year’s equipment in the fall. We are hopeful that many of these opportunities will turn into orders.

With the first half of fiscal 2016 complete and a backlog of $31.6 million going into the third quarter, I am optimistic that fiscal 2016 revenues will be up significantly from fiscal 2015. On the cost side, we continue to benefit from tight controls on costs. This should result in a continued improvement in operating margins.”

Research

Fri, 11 Dec 2015 15:33:02 GMT

Updated Analysis on GENC ($12.85)

Yesterday we released our initial research note on GENC . We have updated our sales to backlog multiples from 2007 to the present and updated our modeled forecast based off current backlog. Investors should note that the company's current backlog is at the second highest level since 2008. However, the company only reported 88 million in sales for that year, equaling a 3.6 multiplier. We have modeled our projections for 2016 based on sales to backlog ratios of 4 to 8 which is the low end of the company's historical range. Please see our updated modeling here.

Research

Thu, 10 Dec 2015 16:57:38 GMT

Keeping A Close Eye On $GENC ($12.75) (No position as of yet)

We are closely monitoring a few names (and searching for more) that may benefit from the recent transportation bill passage. The House passed a $305 billion measure to fund highways and mass-transit projects for the next five years. The passage of this bill should take a huge bit of uncertainty off companies’ growth prospects that play in the construction space. We have already issued our due diligence on $SMID, which we feel should be one of the companies to benefit from the recent passage. We are also be looking at GENC and STRL. Early due diligence on GENC:

Gencor Industries, Inc., together with its subsidiaries, designs, manufactures, and sells heavy machinery used in the production of highway construction materials, synthetic fuels, and environmental control equipment.

GENC recently reported Q4 and fiscal 2015 results. On the surface, the results alone are not overwhelming although revenue growth was strong. The company reported a 69.4% increase in sales for Q4 2015, however, and a net loss of $0.23.

What piqued our interest was the strong increase in backlog and bullish management commentary. The current backlog of $20.3 million represents a 300% increase from the prior year period. Coupled with the strong backlog is the extremely bullish commentary from management:

“E.J. Elliott, Gencor’s CEO & Chairman, commented, “Shortly after the close of fiscal year 2015, we began to notice significant optimism permeating our industry which bodes well for Gencor in fiscal 2016. Gencor’s U.S. sales activity picked up in September and has continued to be robust. We are encouraged by the renewed optimism of numerous customers who, for the last several years, have deferred significant plant purchases. Gencor’s strong brand name and product quality has continued to differentiate us in the marketplace. Several positive factors are contributing to our customers’ orders, such as Proposition 7 in Texas and numerous state funding programs for infrastructure.

Further, at the Federal level just days ago, a five-year $305 billion highway bill was approved. This breathes new confidence and life into our industry as it allows our customers, the highway contractors of America, the visibility of available funding for five years so as to justify investing multi-million dollars in new asphalt plants...

...Unlike recent years, Gencor sees a robust order activity continuing throughout the selling season. With the appreciable increase in backlog and robust increase in quoting activity, Gencor has been aggressive hiring to meet production demands at both of our facilities.”

Below we have historical sales to backlog relationship and our modeled forecast for sales and earings based off current backlog.

	Begin backlog	Revenue	Beginning backlog to revenue multiplier
2007	5,000	75,286	15.1
2008	24,500	88,343	3.6
2009	16,000	56,789	3.5
2010	4,200	55,587	13.2
2011	7,800	59,692	7.7
2012	6,500	63,182	9.7
2013	3,400	48,943	14.4
2014	5,400	40,017	7.4
2015	4,800	39,200	8.2
2016	20,300

Click Chart to Enlarge

Click Chart to Enlarge

We are performing more due diligence to confirm our assumptions used in our analysis. We still need to interview management but will be watching the stock closely.

Reasons For Tracking

Thu, 10 Dec 2015 05:00:00 GMT

Keeping A Close Eye On $GENC ($12.75) (No position as of yet)

Below we have historical sales to backlog relationship and our modeled forecast for sales and earings based off current backlog.

	Begin backlog	Revenue	Beginning backlog to revenue multiplier
2007	5,000	75,286	15.1
2008	24,500	88,343	3.6
2009	16,000	56,789	3.5
2010	4,200	55,587	13.2
2011	7,800	59,692	7.7
2012	6,500	63,182	9.7
2013	3,400	48,943	14.4
2014	5,400	40,017	7.4
2015	4,800	39,200	8.2
2016	20,300

Click Chart to Enlarge

Click Chart to Enlarge

We are performing more due diligence to confirm our assumptions used in our analysis. We still need to interview management but will be watching the stock closely.

Comments & Business Outlook

Tue, 05 Aug 2014 04:00:00 GMT

Third Quarter 2014 Results

Rrevenue for the quarter ended June 30, 2014 decreased 43.6% to $10.6 million from $18.7 million for the quarter ended June 30, 2013

Net income was $1.7 million, or $0.17 per basic and diluted share, for the quarter ended June 30, 2014, compared to $2.5 million, or $0.26 per basic and diluted share, for the quarter ended June 30, 2013.

E.J. Elliott, Gencor's Chairman, stated, "Sales activity slowed in the third quarter as the domestic highway construction industry remained cautious on the potential change in Federal funding commitments due to the culmination of MAP-21 which expires on September 30, 2014. Over the past few years, Gencor has made numerous improvements in operations to increase its gross margins and reduce general and administrative expenses. This should benefit the Company in the future as volumes improve. Gencor remains focused on manufacturing high quality products and delivering superior service. The fact remains, that for the time being, funding for the nation's roads and highway infrastructure continues pleading while our elected officials are consumed by other political projects and causes, some of which are outright illegal and damaging to America. We are optimistic that funding for America's infrastructure cannot be ignored for much longer, and in the meantime continue operating profitably and increasing our market share albeit in a reduced market." - See more at: http://www.globenewswire.com/news-release/2014/08/05/656184/10093058/en/Gencor-Releases-Third-Quarter-Fiscal-2014-Results.html#sthash.0JdFT9d7.dpuf

Comments & Business Outlook

Fri, 09 May 2014 04:00:00 GMT

Second Quarter 2014 Results

Revenues for the quarter ended March 31, 2014 decreased 18.0% to $14.5 million from $17.7 million for the quarter ended March 31, 2013.

Net income was $1.9 million, or $0.20 per basic and diluted share, for the quarter ended March 31, 2014, compared to $3.0 million, or $0.31 per basic and diluted share, for the quarter ended March 31, 2013.

E.J. Elliott, Gencor's Chairman, stated, "The increased sales volume that Gencor experienced in the first quarter did not carry over into the second quarter. The domestic highway construction industry continues to remain cautious on the shortfall in Federal funding of the Highway Trust Fund. Gencor reported higher gross and operating margins even though revenues declined in the quarter. Our business process improvements continue to enable Gencor to remain profitable, even at these revenue levels. We have been evaluating opportunities for expansion through strategic acquisitions."

Comments & Business Outlook

Mon, 10 Feb 2014 05:00:00 GMT

First Quarter 2014 Results

Revenues for the quarter ended December 31, 2013 of $10.0 million, a 102.5% increase over the $4.9 million in net revenues for the quarter ended December 31, 2012
Net income for the quarter ended December 31, 2013 was $0.5 million, or $0.05 per basic and diluted share, compared to a net loss of $(1.0) million, or $(0.10) per basic and diluted share for the quarter ended December 31, 2012.

E.J. Elliott, Gencor's Chairman, stated, "We are encouraged by our increased sales in the first quarter in spite of the weakness in the domestic highway construction industry. Our improvements in productivity and purchasing and cost containment initiatives have resulted in higher gross and operating margins. We look forward to growth from operations and we continue to evaluate opportunities to expand our existing business and increase shareholder value."

Comments & Business Outlook

Mon, 16 Dec 2013 05:00:00 GMT

Fourth Quarter 2013 Results

Net revenue for the quarter ended September 30, 2013 was $7.6 million compared to $14.0 million for the quarter ended September 30, 2012, a 45.9% decrease.
The company reported EPS of $0.24 to a loss of $0.04 for the same quarter 2012.

E.J. Elliott, Gencor's Chairman, commented, "Sales in the fourth quarter slowed from prior year's level. Business was weak throughout the industry due to a continued concern over the lack of federal highway funding. Even though Gencor had significantly lower revenues in the fourth quarter and for the fiscal year, the Company's gross and operating margins improved from the prior year. Gross profit margin of 22.5% for fiscal 2013 was the Company's highest gross profit margin since 2008. Gencor is committed to building superior products while striving to maximize operating efficiencies."

Fiscal Cliff

Fri, 09 Nov 2012 05:00:00 GMT

Need clarity on domestic infrastructure spending