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GENCOR INDUSTRIES INC - Quarter Report: 2003 June (Form 10-Q)

Form 10-Q
Table of Contents

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, 2003

 

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 16, 2003


Common stock, $.10 par value

  6,884,070 shares

Class B stock, $.10 par value

  1,798,398 shares


Table of Contents

GENCOR INDUSTRIES, INC.

 

Index              
              Page
Part I.   Financial Information     
   

Item 1.

   Financial Statements     
         Condensed consolidated balance sheets – June 30, 2003 (Unaudited) and September 30, 2002    3
         Unaudited condensed consolidated income statements – Three - and Nine-months ended June 30, 2003 and 2002    4
         Unaudited condensed consolidated statements of cash flows – Nine-months ended June 30, 2003 and 2002    5
         Notes to unaudited condensed consolidated financial statements    6
   

Item 2.

   Management’s Discussion and Analysis of Financial Position and Results of Operations    9
   

Item 3.

   Quantitative and Qualitative Disclosure of Market Risk    12
   

Item 4.

   Controls and Procedures    13
Part II.   Other Information     
   

Item 6.

   Exhibits and Reports on Form 8-K    14
Signatures             15

 

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Table of Contents

Part I. Financial Information

 

Item 1. Financial Statements

 

Condensed Consolidated Balance Sheets

In thousands, except share amounts

 

    

June 30

2003


    September 30
2002


 
     (Unaudited)        

ASSETS

                

Current assets:

                

Cash and cash equivalents

   $ 16,113     $ 12,305  

Accounts receivable, less allowance for doubtful accounts of $1,194 ($1,234 at September 30, 2002)

     4,390       8,512  

Inventories

     14,156       19,012  

Prepaid expenses

     1,115       1,938  
    


 


Total current assets

     35,774       41,767  
    


 


Property and equipment, net

     15,131       15,693  

Goodwill, net of accumulated amortization

     364       364  

Other assets

     4,292       4,360  
    


 


Total assets

   $ 55,561     $ 62,184  
    


 


LIABILITIES AND SHAREHOLDERS’ EQUITY

                

Current liabilities:

                

Notes payable

   $ 196     $ 196  

Current portion of long-term debt

     5,243       6,068  

Accounts payable

     6,289       9,000  

Customer deposits

     893       498  

Income and other taxes payable

     8,318       3,534  

Accrued expenses

     8,440       9,947  
    


 


Total current liabilities

     29,379       29,243  

Long-term debt

     10,020       24,337  

Other liabilities

     3,309       3,309  
    


 


Total liabilities

     42,708       56,889  
    


 


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; 6,971,470 shares issued

     697       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

     11,343       11,343  

Retained Earnings

     8,418       883  

Accumulated other comprehensive loss

     (5,995 )     (6,018 )

Subscription receivable from officer

     (95 )     (95 )

Common stock in treasury, 179,400 shares at cost

     (1,704 )     (1,704 )
    


 


       12,853       5,295  
    


 


Total liabilities and shareholders’ equity

   $ 55,561     $ 62,184  
    


 


 

See notes to unaudited condensed consolidated financial statements.

 

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Table of Contents

GENCOR INDUSTRIES, INC.

Unaudited Condensed Consolidated Income Statements

In thousands, except per share amounts

 

     Three Months Ended
June 30
    Nine Months Ended
June 30
 
     2003

    2002

    2003

    2002

 

Net sales

   $ 14,134     $ 17,853     $ 48,324     $ 51,158  

Costs and expenses:

                                

Costs of products sold

     9,609       13,159       35,591       38,179  

Product engineering and development

     436       450       1,309       1,300  

Selling, general and administrative

     3,998       3,286       10,370       9,553  

Restructuring costs

     —         —         —         302  
    


 


 


 


       14,043       16,895       47,270       49,334  
    


 


 


 


Operating income

     91       958       1,054       1,824  

Other income (expense):

                                

Interest income

     42       44       108       118  

Interest expense

     (308 )     (554 )     (1,251 )     (1,737 )

Income from investees

     4,780       —         13,428       1,526  

Miscellaneous

     65       384       12       456  
    


 


 


 


       4,579       (126 )     12,297       363  
    


 


 


 


Income from continuing operations before income taxes

     4,670       832       13,351       2,187  

Income taxes

     2,382       263       5,816       834  
    


 


 


 


Income from continuing operations

     2,288       569       7,535       1,353  
    


 


 


 


Discontinued operations

                                

Income from discontinued operations, net of income taxes

     —         5       —         172  
    


 


 


 


Net income

   $ 2,288     $ 574     $ 7,535     $ 1,525  
    


 


 


 


Per common share:

                                

Basic:

                                

Income from continuing operations

   $ 0.26     $ 0.07     $ 0.87     $ 0.16  

Discontinued operations

   $ —       $ —       $ —       $ 0.02  
    


 


 


 


Net income

   $ 0.26     $ 0.07     $ 0.87     $ 0.18  
    


 


 


 


Diluted:

                                

Income from continuing operations

   $ 0.25     $ 0.06     $ 0.83     $ 0.15  

Discontinued operations

   $ —       $ —       $ —       $ 0.02  
    


 


 


 


Net income

   $ 0.25     $ 0.06     $ 0.83     $ 0.17  
    


 


 


 


See notes to unaudited condensed consolidated financial statements.

 

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GENCOR INDUSTRIES, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

In thousands

 

     Nine Months Ended
June 30


 
     2003

    2002

 

Operating activities:

                

Net income

   $ 7,535     $ 1,525  

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

                

Depreciation and amortization

     706       1,170  

(Gain) Loss on disposition of property and equipment

     —         (421 )

Income from investees

     (13,428 )     (1,526 )

Write-off deferred loan costs

     —         43  

Bad debt expense

     1,474       145  

Other noncash items

     —         (265 )

Change in assets and liabilities net of disposed business

                

Accounts receivable

     1,767       (4,316 )

Inventories

     4,911       4,260  

Prepaid expenses

     807       622  

Other assets

     9       (163 )

Accounts payable

     (2,122 )     (815 )

Customer deposits

     418       279  

Income and other taxes payable

     4,784       1,081  

Accrued expenses and other

     (1,510 )     (2,134 )
    


 


Total adjustments

     (2,184 )     (2,040 )
    


 


Net cash provided by (used for) operating activities

     5,351       (515 )
    


 


Investing activities:

                

Distributions from unconsolidated investees

     13,428       1,526  

Capital expenditures

     (84 )     (219 )

Proceeds from sale of property and equipment

     —         673  
    


 


Net cash provided by investing activities

     13,344       1,980  
    


 


Financing activities:

                

Repayment of debt

     (15,142 )     (3,208 )
    


 


Net cash used for financing activities

     (15,142 )     (3,208 )
    


 


Effect of exchange rate changes on cash and cash equivalents

     255       159  
    


 


Increase (decrease) in cash and cash equivalents

     3,808       (1,584 )

Cash and cash equivalents, beginning of period

     12,305       14,158  
    


 


Cash and cash equivalents, end of period

   $ 16,113     $ 12,574  
    


 


 

See notes to unaudited condensed consolidated financial statements.

 

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Table of Contents

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, 2003 are not necessarily indicative of the results that may be expected for the year ending September 30, 2003.

 

The balance sheet at September 30, 2002 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 September 30, 2002.

 

Note 2 – Inventories

 

The components of inventory consist of the following:

 

     June 30
2003


   September 30
2002


Raw materials

   $ 7,551    $ 9,235

Work in process

     1,448      3,267

Finished goods

     4,205      4,261

Used equipment

     952      2,249
    

  

     $ 14,156    $ 19,012
    

  

 

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Note 3 – Earnings Per Share Data

 

The following table sets forth the computation of basic and diluted earnings per share:

 

     Three Months Ended
June 30


   Nine Months Ended
June 30


       2003  

     2002  

     2003  

     2002  

Income from continuing operations

   $ 2,288    $ 569    $ 7,535    $ 1,353

Income from discontinued operations

     —        5      —        172
    

  

  

  

Net income

   $ 2,288    $ 574    $ 7,535    $ 1,525
    

  

  

  

Denominator (shares in thousands):

                           

Weighted average shares outstanding

     8,682      8,682      8,682      8,682

Effect of dilutive stock options

     190      758      190      504
    

  

  

  

Denominator for diluted EPS computation

     8,872      9,440      8,872      9,186
    

  

  

  

Per common share:

                           

Basic:

                           

Continuing operations

   $ 0.26    $ 0.07    $ 0.87    $ 0.16

Discontinued operations

     —        —        —        0.02
    

  

  

  

Net income

   $ 0.26    $ 0.07    $ 0.87    $ 0.18
    

  

  

  

Diluted:

                           

Continuing operations

   $ 0.26    $ 0.06    $ 0.85    $ 0.15

Discontinued operations

     —        —        —        0.02
    

  

  

  

Net income

   $ 0.26    $ 0.06    $ 0.85    $ 0.18
    

  

  

  

 

Note 4 – Comprehensive Income (Loss)

 

Total comprehensive income for the three-and nine-months ended June 30, 2003 was $2,277 and $7,512 respectively, which compares to the total comprehensive income for the three- and nine-months ended June 30, 2002 of $894 and $2,268, respectively. Total comprehensive income differs from net income due to unrealized gains and losses resulting from foreign currency translation, which are reflected separately in the shareholders’ equity section of the balance sheet under the caption “Accumulated other comprehensive loss.” Realized gains and losses resulting from foreign currency transactions are included in income.

 

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Note 5 – Income From Investees

 

During the first, second and third quarters of fiscal 2003, the Company received cash distributions of $4,239, $4,409 and $4,780, respectively, from its 45% interest in Carbontronics LLC and 25% interest in Carbontronics II LLC and Carbontronics Fuels LLC. These interests were acquired in 1998. The Company has no cost basis in these investments nor requirement to provide future funding. Any income to be derived from these investments is dependent upon tax credits (adjusted for operating losses at the fuel plants) being generated from synthetic fuel production, which are recorded when and if received. The income and distributions projected for fiscal years 1998, 1999, 2000, and 2001 failed in total to materialize. During the first and second quarter of fiscal 2002, distributions of $465 and $1,061, respectively were received. The Company received no distributions in the third quarter of fiscal 2002.

 

The synthetic fuels industry which encompasses the Company’s investment as described herein is driven by Section 29 of the Internal Revenue Service first adopted in 1980 and designed to provide tax credit incentives to stimulate the development of alternative energy sources. To qualify for such Section 29 tax credits, a tax payer has to meet a long and stringent list of controls and requirements which for each producer of synthetic fuels culminates in a Private Letter Ruling (PLR) issued by the IRS. As a consequence, the historical performance of the entities comprising the Company’s interests in synfuel production has been one of frequent disruptions, and total unpredictability as to when and if any income and distribution thereof may occur. Further, the Limited Partners of these entities have the right to suspend any and all payments under certain conditions and circumstances, including initiations of IRS review (Tax Event).

 

After the three quarterly distributions of fiscal 2003, in June 2003 the IRS announced that it had reason to question the scientific validity of certain test procedures and results that have been presented to it by taxpayers with interests in synfuel operations as evidence that the required “significant chemical change” has indeed, occurred so as to qualify as synthetic fuel, and is currently reviewing information regarding these test procedures and practices. Accordingly, the IRS has suspended the issuance of PLR’s. In addition, the IRS indicated that it may revoke existing PLR’s that relied on the procedures and results under review if it determines that those test procedures and results do not demonstrate that a significant chemical change has occurred.

 

The Company believes that under the current pronouncements and actions by the IRS, a significant risk exists that such may be a “Tax Event”, in which case further distributions to Gencor will cease.

 

Under these circumstances, the Company cannot predict when, if ever, there will be any further distributions, nor in what amount, if any.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Results of Operations

 

Net sales for the nine-months ended June 30, 2003 and 2002 were $48.3 million and $51.2 million, respectively a decrease of $2.9 million or 5.6%. Domestic sales for the nine-month period of fiscal 2003 were $38.7 million reflecting a $5.9 million increase from year ago levels. The increase in domestic sales is primarily due to some recovery of our industry from the September 11 events. Decreased asphalt plant orders at one of the Company’s wholly owned U.K. subsidiaries partially eroded the increase in domestic sales. Net sales for the third quarter of fiscal 2003 reflected a decrease of approximately $3.7 million over the same period of the previous year. The foreign operations accounted for $6.2 million of the decline due to unfavorable market conditions in the U.K., increased competition in the Asian market, as well as the effect of the SARS epidemic. Domestic sales for the third quarter increased by $2.5 million from year ago levels.

 

Gross margins as a percent of net sales improved by 1% during the nine-months ended June 30, 2003 from year ago levels. Domestic margins improved 4.6% and 1.0% during the three- and nine -month periods ended June 30, 2003. Higher volume and margins on larger contracts contributed to the improvement in domestic margins. Gross margins from foreign sales declined in the three and nine-month periods of fiscal 2003, due to the unfavorable market conditions in the U.K., increased competition in the Asian market, and the effect of the SARS epidemic.

 

Product engineering and development costs remained constant during the nine-month periods ended 2003 and compared to the quarter ended June 30, 2003. Selling, general and administrative expenses increased $712 and $817 during the three and nine-month periods ended June 30, 2003. The increase in reserve for doubtful accounts due to the consolidation of foreign operations contributed to $1.2 million of the increase during the three and nine –month periods ended June 30, 2003. Domestic selling, general and administrative expenses decreased 7.3% and 6.5% during the three and nine -month periods ended June 30, 2003.

 

Operating income was $91 in the third quarter and $1.1 million in the nine months of fiscal 2003, compared to $958 for the quarter and $1.8 million for the nine months of fiscal 2002. Operating losses were $1.9 million at a foreign operation in the third quarter and $3.0 million in the nine months of fiscal 2003, compared to operating income of $351 for the quarter and $349 for the nine months of fiscal 2002.

 

As a result of the recent and nine months unfavorable operating results referred to above, the operations of Gencor International Limited (GIL), one of the Company’s wholly-owned U.K. subsidiaries, are being consolidated with the Domestic operations. Effective July 3, 2003, with the concurrence of our secured senior lender, the U.K. subsidiary was placed into Administration with a court appointed Administrator. The Administrator will manage GIL for the benefit of all creditors. The Company intends to retain all intellectual property and real property and continue the international business, managed and operated domestically by a new subsidiary. The Company does not expect a loss related to this consolidation.

 

Restructuring costs, primarily legal and professional fees relating to the reorganization were $302 during the first nine-months of fiscal 2002. There were no restructuring costs for the first nine-months of fiscal 2003.

 

Other Income (Expense)

 

Interest expense declined $246 and $486 for the three and nine-month periods of fiscal 2003 from the pervious year, reflecting the reduction in the debt balance and lower interest rates.

 

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During the first, second and third quarters of fiscal 2003, the Company received cash distributions of $4,239, $4,409 and $4,780, respectively, from its 45% interest in Carbontronics LLC and 25% interest in Carbontronics II LLC and Carbontronics Fuels LLC. These interests were acquired in 1998. The Company has no cost basis in these investments nor requirement to provide future funding. Any income to be derived from these investments is dependent upon tax credits (adjusted for operating losses at the fuel plants) being generated from synthetic fuel production, which are recorded when and if received. The income and distributions projected for fiscal years 1998, 1999, 2000, and 2001 failed in total to materialize. During the first and second quarter of fiscal 2002, distributions of $465 and $1,061, respectively were received. The Company received no distributions in the third quarter of fiscal 2002.

 

The synthetic fuels industry which encompasses the Company’s investment as described herein is driven by Section 29 of the Internal Revenue Service first adopted in 1980 and designed to provide tax credit incentives to stimulate the development of alternative energy sources. To qualify for such Section 29 tax credits, a tax payer has to meet a long and stringent list of controls and requirements which for each producer of synthetic fuels culminates in a Private Letter Ruling (PLR) issued by the IRS. As a consequence, the historical performance of the entities comprising the Company’s interests in synfuel production has been one of frequent disruptions, and total unpredictability as to when and if any income and distribution thereof may occur. Further, the Limited Partners of these entities have the right to suspend any and all payments under certain conditions and circumstances, including initiations of IRS review (Tax Event).

 

After the three quarterly distributions of fiscal 2003, in June 2003 the IRS announced that it had reason to question the scientific validity of certain test procedures and results that have been presented to it by taxpayers with interests in synfuel operations as evidence that the required “significant chemical change” has, indeed, occurred so as to qualify as synthetic fuel, and is currently reviewing information regarding these test procedures and practices. Accordingly, the IRS has suspended the issuance of PLR’s. In addition, the IRS indicated that it may revoke existing PLR’s that relied on the procedures and results under review if it determines that those test procedures and results do not demonstrate that a significant chemical change has occurred.

 

The Company believes that under the current pronouncements and actions by the IRS, a significant risk exists that such may be a “Tax Event”, in which case distributions to Gencor will cease.

 

Under these circumstances, the Company can not predict when, if ever there will be any further distributions, nor in what amount, if any.

 

Income Taxes

 

Income tax expense increased by $2.1 million and $5.0 million for the three and nine-month periods of fiscal 2003, reflecting the increase in pre-tax income.

 

Liquidity and Capital Resources

 

On December 27, 2001, the Company and its Senior Secured Lenders signed an Amended and Restated Senior Secured Credit Agreement, which specifies monthly principal payments of $320 beginning December 2001 and continuing through July 2002, then increasing to $400 in August 2002 and continuing to August 2005, with the remaining balance due September 6, 2005. It is management’s intention to refinance any remaining balance. The interest rate during the term of the loan is based upon the prime rate plus 2%. During fiscal 2002, the Company paid $4,000 in principal and during the first nine months of fiscal 2003, paid an additional $15,142. The Amended and Restated Secured Credit Agreement includes certain other financial and restrictive covenants.

 

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The Company is presently negotiating for new financing with a new lender to provide a less costly revolving credit facility. New financing is expected to be in place before the end of August.

 

Pursuant to its Amended Plan of Reorganization, on January 29, 2002 the Company made a principal payment of $488 on the industrial revenue bond. Monthly principal and interest payments of $38 are scheduled to continue until the balance is paid-off in March 2005.

 

The current ratio of 1.22:1.00 and working capital of $6.4 million at June 30, 2003 compares to the current ratio of 1.59:1.00 and working capital of $16.3 million a year earlier, which reflects the payment of $15.1 million for long term debt reduction.

 

Cash provided (used) by operations increased from ($515) during the first nine months of fiscal 2002 to $5.3 million for the same period of fiscal 2003. The $5.8 million improvement reflects favorable net cash inflows from increases in customer deposits of $418, income taxes payable of $4.8 million, and decreases in accounts payable of $2.1 million, accrued expenses of $1.5 million, accounts receivable of $1.8 million, and inventories of $4.9 million. Cash used in financing activities reflected principal payments of $14,782 against the secured loan agreements, and $360 against the Industrial Revenue Bond.

 

Seasonality

 

The Company is concentrated in the asphalt-related business and is subject to a seasonal slow-down during the third and fourth quarters of the calendar year. Traditionally, the Company’s customers do not purchase new equipment for shipment during the summer and fall months to avoid disrupting their peak season for highway construction and repair work. This slow-down often results in lower reported sales and earnings and or losses during the first and fourth quarters of the Company’s fiscal year ended September 30.

 

Forward-Looking Information

 

This Form 10-Q contains certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which represent the Company’s expectations and beliefs, including, but not limited to, statements concerning gross margins, sales of the Company’s products and future financing plans. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond the Company’s control. Actual results may differ materially depending on a variety of important factors, including income from tax credits to the Company, the final expenses related to the U.K. Administration of GIL, the financial condition of the Company’s customers, changes in the economic and competitive environments and demand for the Company’s products.

 

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Item 3.    Quantitative and Qualitative Disclosures About Market Risk

 

The Company operates manufacturing facilities and sales offices principally located in the United States and the United Kingdom. The Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations, and market risk related to changes in interest rates and foreign currency exchange rates. The Company’s principal currency exposure against the U.S. dollar is the British pound. Periodically, the Company has used derivative financial instruments consisting primarily of interest rate hedge agreements to manage exposures to interest rate changes. The Company’s objective in managing its exposure to changes in interest rates on its variable rate debt is to limit the impact of such changes on earnings and cash flow and to reduce its overall borrowing costs.

 

At June 30, 2003, the Company had approximately $15.4 million of debt outstanding. Under the Amended and Restated Secured Credit Agreement, substantially all of the Company’s borrowings bear interest at variable rates based upon the prime rate plus 2%. The Company performed a sensitivity analysis assuming a hypothetical 1% adverse movement in the interest rates on the debt outstanding at the end of June 2003. Such a movement in interest rates would cause the Company to recognize additional interest expense for the nine-month period ended June 30, 2003 of approximately $185 along with a corresponding decrease in cash flows.

 

The above sensitivity analysis for interest rate risk excludes accounts receivable, accounts payable and accrued liabilities because of the short-term maturity of such instruments. The analysis does not consider the effect on other variables such as changes in sales volumes or management’s actions with respect to levels of capital expenditures, future acquisitions or planned divestitures, all of which could be influenced significantly by changes in interest rates and cause the results to differ significantly from those indicated by the sensitivity analysis

 

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Item 4.    Controls and Procedures

 

The Company’s President and Chief Financial Officer evaluated the Company’s disclosure controls and procedures within 90 days of the filing date of this quarterly report. Based upon this evaluation, the Company’s President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that material information required to be disclosed is included in the reports that it files with the Securities and Exchange Commission.

 

There were no significant changes in the Company’s internal controls or, to the knowledge of the management of the Company, in other factors that could significantly affect internal controls subsequent to the evaluation date.

 

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Part II.    Other Information

 

Item 6.    Exhibits and Reports on Form 8-K

 

(a)   Exhibits.

 

10.2 Indemnification Agreement for Directors and Officers

 

99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by E.J. Elliott and Scott W. Runkel.

 

(b)   Reports on Form 8-K.

 

None.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

       

GENCOR INDUSTRIES, INC.

July 23, 2003       By:  

/s/    E.J. Elliott        


                E.J. Elliott, Chairman and President
July 23, 2003       By:  

/s/    Scott W. Runkel


                Scott W. Runkel, Chief Financial Officer

 

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CERTIFICATIONS

 

I, Mr. E.J. Elliott, certify that:

 

1.   I have reviewed this quarterly report on Form 10-Q of Gencor Industries, Inc.

 

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

4.   The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and we have:

 

  a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

 

  b)   evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

 

  c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

 

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

  a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

 

  b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

 

6.   The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Date:  

July 23, 2003


         

/s/    E.J. Elliott


               

E.J. Elliott

Chairman and President

 

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CERTIFICATIONS

 

I, Mr. Scott W. Runkel

 

1.   I have reviewed this quarterly report on Form 10-Q of Gencor Industries, Inc.

 

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

4.   The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and we have:

 

  a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

 

  b)   evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

 

  c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

 

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

  a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

 

  b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

 

6.   The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date:  

July 23, 2003


         

/s/    Scott W. Runkel


               

Scott W. Runkel

Chief Financial Officer

 

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