Cover Page
Cover Page - shares | 6 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | GENCOR INDUSTRIES INC | |
Trading Symbol | GENC | |
Entity Central Index Key | 0000064472 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Address, State or Province | FL | |
Entity Incorporation, State or Country Code | DE | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,277,337 | |
Class B Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,308,857 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Sep. 30, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 18,738,000 | $ 10,302,000 |
Marketable securities at fair value (cost $105,967,000 at March 31, 2020 and $104,176,000 at September 30, 2019) | 102,275,000 | 105,322,000 |
Accounts receivable, less allowance for doubtful accounts of $474,000 at March 31, 2020 and $459,000 at September 30, 2019 | 2,366,000 | 1,603,000 |
Costs and estimated earnings in excess of billings | 8,792,000 | 13,838,000 |
Inventories, net | 27,063,000 | 25,366,000 |
Prepaid expenses and other current assets | 2,144,000 | 499,000 |
Total current assets | 161,378,000 | 156,930,000 |
Property and equipment, net | 8,276,000 | 8,389,000 |
Other assets | 53,000 | 53,000 |
Total Assets | 169,707,000 | 165,372,000 |
Current liabilities: | ||
Accounts payable | 4,380,000 | 1,907,000 |
Customer deposits | 4,713,000 | 1,918,000 |
Accrued expenses | 2,721,000 | 2,660,000 |
Total current liabilities | 11,814,000 | 6,485,000 |
Deferred and other income taxes | 509,000 | 3,372,000 |
Total liabilities | 12,323,000 | 9,857,000 |
Commitments and contingencies | ||
Shareholders' Equity: | ||
Preferred stock, par value $.10 per share; 300,000 shares authorized; none issued | ||
Capital in excess of par value | 12,194,000 | 12,159,000 |
Retained earnings | 143,731,000 | 141,897,000 |
Total shareholders' equity | 157,384,000 | 155,515,000 |
Total Liabilities and Shareholders' Equity | 169,707,000 | 165,372,000 |
Common Stock [Member] | ||
Shareholders' Equity: | ||
Common stock | 1,228,000 | 1,228,000 |
Total shareholders' equity | 1,228,000 | 1,228,000 |
Class B Stock [Member] | ||
Shareholders' Equity: | ||
Common stock | 231,000 | 231,000 |
Total shareholders' equity | $ 231,000 | $ 231,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Sep. 30, 2019 |
Marketable securities, cost | $ 105,967,000 | $ 104,176,000 |
Accounts receivable, allowance for doubtful accounts | $ 474,000 | $ 459,000 |
Preferred stock, par value | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 300,000 | 300,000 |
Preferred stock, shares issued | 0 | 0 |
Common Stock [Member] | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 12,277,337 | 12,277,337 |
Common stock, shares outstanding | 12,277,337 | 12,277,337 |
Class B Stock [Member] | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 6,000,000 | 6,000,000 |
Common stock, shares issued | 2,308,857 | 2,308,857 |
Common stock, shares outstanding | 2,308,857 | 2,308,857 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | ||
Income Statement [Abstract] | |||||
Net revenue | $ 25,993,000 | $ 26,670,000 | $ 44,023,000 | $ 47,997,000 | |
Costs and expenses: | |||||
Production costs | 18,655,000 | 16,759,000 | 32,365,000 | 33,169,000 | |
Product engineering and development | 689,000 | 823,000 | 1,455,000 | 1,546,000 | |
Selling, general and administrative | 2,561,000 | 2,474,000 | 4,943,000 | 4,664,000 | |
Total operating expenses | 21,905,000 | 20,056,000 | 38,763,000 | 39,379,000 | |
Operating income | 4,088,000 | 6,614,000 | 5,260,000 | 8,618,000 | |
Other income (expense), net: | |||||
Interest and dividend income, net of fees | 763,000 | 507,000 | 1,395,000 | 1,041,000 | |
Net realized and unrealized gains (losses) on marketable securities | (5,670,000) | 2,204,000 | (4,353,000) | 57,000 | |
Other | 0 | 0 | (10,000) | 0 | |
Other income (expense),net | (4,907,000) | 2,711,000 | (2,968,000) | 1,098,000 | |
Income (loss) before income tax expense (benefit) | (819,000) | 9,325,000 | 2,292,000 | 9,716,000 | |
Income tax expense (benefit) | (164,000) | 1,865,000 | 458,000 | 1,943,000 | |
Net income (loss) | $ (655,000) | $ 7,460,000 | [1] | $ 1,834,000 | $ 7,773,000 |
Basic Income (Loss) per Common Share: | |||||
Net income (loss) per share | $ (0.04) | $ 0.51 | $ 0.13 | $ 0.53 | |
Diluted Income (Loss) per Common Share: | |||||
Net income (loss) per share | $ (0.04) | $ 0.51 | $ 0.12 | $ 0.53 | |
[1] | The balances as of September 30, 2018, December 31, 2018 and March 31, 2019, and the amounts for the quarter and six months ended March 31, 2019, have been adjusted to reflect the change in inventory accounting method, as described in Note 3 to the Condensed Consolidated Financial Statements. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) | Total | Capital in Excess of Par Value [Member] | Retained Earnings [Member] | Common Stock [Member] | Class B Stock [Member] | |||
Beginning balance at Sep. 30, 2018 | $ 145,017,000 | [1] | $ 11,862,000 | $ 131,701,000 | [1] | $ 1,225,000 | $ 229,000 | |
Beginning balance, shares at Sep. 30, 2018 | 12,252,337 | 2,288,857 | ||||||
Net income | [1] | 313,000 | 313,000 | |||||
Stock-based compensation | 17,000 | [1] | 17,000 | |||||
Ending balance at Dec. 31, 2018 | 145,347,000 | [1] | 11,879,000 | 132,014,000 | [1] | $ 1,225,000 | $ 229,000 | |
Ending balance, shares at Dec. 31, 2018 | 12,252,337 | 2,288,857 | ||||||
Beginning balance at Sep. 30, 2018 | 145,017,000 | [1] | 11,862,000 | 131,701,000 | [1] | $ 1,225,000 | $ 229,000 | |
Beginning balance, shares at Sep. 30, 2018 | 12,252,337 | 2,288,857 | ||||||
Net income | 7,773,000 | |||||||
Ending balance at Mar. 31, 2019 | 152,825,000 | [1] | 11,897,000 | 139,474,000 | [1] | $ 1,225,000 | $ 229,000 | |
Ending balance, shares at Mar. 31, 2019 | 12,252,337 | 2,288,857 | ||||||
Beginning balance at Dec. 31, 2018 | 145,347,000 | [1] | 11,879,000 | 132,014,000 | [1] | $ 1,225,000 | $ 229,000 | |
Beginning balance, shares at Dec. 31, 2018 | 12,252,337 | 2,288,857 | ||||||
Net income | [1] | 7,460,000 | 7,460,000 | |||||
Stock-based compensation | 18,000 | [1] | 18,000 | |||||
Ending balance at Mar. 31, 2019 | 152,825,000 | [1] | 11,897,000 | 139,474,000 | [1] | $ 1,225,000 | $ 229,000 | |
Ending balance, shares at Mar. 31, 2019 | 12,252,337 | 2,288,857 | ||||||
Beginning balance at Sep. 30, 2019 | 155,515,000 | 12,159,000 | 141,897,000 | $ 1,228,000 | $ 231,000 | |||
Beginning balance, shares at Sep. 30, 2019 | 12,277,337 | 2,308,857 | ||||||
Net income | 2,489,000 | 2,489,000 | ||||||
Stock-based compensation | 18,000 | 18,000 | ||||||
Ending balance at Dec. 31, 2019 | 158,022,000 | 12,177,000 | 144,386,000 | $ 1,228,000 | $ 231,000 | |||
Ending balance, shares at Dec. 31, 2019 | 12,277,337 | 2,308,857 | ||||||
Beginning balance at Sep. 30, 2019 | 155,515,000 | 12,159,000 | 141,897,000 | $ 1,228,000 | $ 231,000 | |||
Beginning balance, shares at Sep. 30, 2019 | 12,277,337 | 2,308,857 | ||||||
Net income | 1,834,000 | |||||||
Ending balance at Mar. 31, 2020 | 157,384,000 | 12,194,000 | 143,731,000 | $ 1,228,000 | $ 231,000 | |||
Ending balance, shares at Mar. 31, 2020 | 12,277,337 | 2,308,857 | ||||||
Beginning balance at Dec. 31, 2019 | 158,022,000 | 12,177,000 | 144,386,000 | $ 1,228,000 | $ 231,000 | |||
Beginning balance, shares at Dec. 31, 2019 | 12,277,337 | 2,308,857 | ||||||
Net income | (655,000) | (655,000) | ||||||
Stock-based compensation | 17,000 | 17,000 | ||||||
Ending balance at Mar. 31, 2020 | $ 157,384,000 | $ 12,194,000 | $ 143,731,000 | $ 1,228,000 | $ 231,000 | |||
Ending balance, shares at Mar. 31, 2020 | 12,277,337 | 2,308,857 | ||||||
[1] | The balances as of September 30, 2018, December 31, 2018 and March 31, 2019, and the amounts for the quarter and six months ended March 31, 2019, have been adjusted to reflect the change in inventory accounting method, as described in Note 3 to the Condensed Consolidated Financial Statements. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operations: | ||
Net income | $ 1,834,000 | $ 7,773,000 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Purchases of marketable securities | (73,393,000) | (112,663,000) |
Proceeds from sale and maturity of marketable securities | 72,181,000 | 113,767,000 |
Change in fair value of marketable securities | 4,259,000 | (202,000) |
Deferred income taxes | (2,863,000) | (156,000) |
Depreciation and amortization | 831,000 | 783,000 |
Provision for doubtful accounts | 25,000 | 50,000 |
Stock-based compensation | 35,000 | 35,000 |
Changes in assets and liabilities: | ||
Accounts receivable | (788,000) | (1,469,000) |
Costs and estimated earnings in excess of billings | 5,046,000 | (2,113,000) |
Inventories | (1,697,000) | (1,925,000) |
Prepaid expenses and other current assets | (1,645,000) | 978,000 |
Accounts payable | 2,473,000 | 317,000 |
Customer deposits | 2,795,000 | (543,000) |
Accrued expenses | 61,000 | 202,000 |
Total adjustments | 7,320,000 | (2,939,000) |
Cash flows provided by operating activities | 9,154,000 | 4,834,000 |
Cash flows used in investing activities: | ||
Capital expenditures | (718,000) | (1,260,000) |
Cash flows used in investing activities | (718,000) | (1,260,000) |
Net increase in cash | 8,436,000 | 3,574,000 |
Cash and cash equivalents at: | ||
Beginning of period | 10,302,000 | 8,012,000 |
End of period | $ 18,738,000 | $ 11,586,000 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 S-X. The accompanying Condensed Consolidated Balance Sheet at September 30, 2019 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. For further information, refer to the consolidated financial statements and notes thereto included in the Gencor Industries, Inc. Annual Report on Form 10-K Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers 2014-09”), 2014-09 2014-09 In February 2016, the FASB issued ASU No. 2016-02, Leases 2016-02”). right-of-use is prior 2016-02 2016-02 2016-02 In May 2017, the FASB issued ASU 2017-09, Compensation — Stock Compensation Scope of Modification Accounting 2017-09”). 2017-09 2017-09 2017-09 No other accounting pronouncements recently issued or newly effective have had, or are expected to have, a material impact on the Company’s consolidated financial statements. COVID-19 The Company continues to monitor and evaluate the risks to public health and the slowdown in overall COVID-19 COVID-19. As and scope . H if conditions persist or worsen |
Marketable Securities
Marketable Securities | 6 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Note 2 — Marketable debt and equity securities are categorized as trading securities and are thus marked to market and stated at fair value. 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 statements of income. Net unrealized gains and losses are reported in the condensed consolidated statements of income in the current period and represent the change in the fair value of investment holdings during the period. Fair Value Measurements The fair value of financial instruments is presented based upon a hierarchy of levels that prioritizes the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). 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, 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: discounted cash flow methodologies, matrix pricing or other similar techniques. The inputs to these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, maturity, estimated duration and assumptions regarding liquidity and estimated future cash flows. In addition to bond characteristics, the valuation methodologies incorporate market data, such as actual trades completed, bids and actual dealer quotes, where such information is available. Accordingly, the estimated fair values are based on available market information and judgments about financial instruments (Level 2). Fair values of the Level 2 investments, if any, are provided by the Company’s professional investment management firm. The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of March 31, 2020: Fair Value Measurements Level 1 Level 2 Level 3 Total Equities $ 12,458,000 $ — $ — $ 12,458,000 Mutual Funds 2,290,000 — — 2,290,000 Exchange-Traded Funds 4,005,000 — — 4,005,000 Corporate Bonds — 39,721,000 — 39,721,000 Government Securities 40,315,000 — — 40,315,000 Cash and Money Funds 3,486,000 — — 3,486,000 Total $ 62,554,000 $ 39,721,000 $ — $ 102,275,000 Net unrealized gains and (losses) included in the Condensed Consolidated Statements of Income for the quarter and six months ended March 31, 2020, were $(6,029,000) and $(4,839,000), respectively. There were no transfers of investments between Level 1 and Level 2 during the six months ended March 31, 2020. The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2019: Fair Value Measurements Level 1 Level 2 Level 3 Total Equities $ 10,412,000 $ — $ — $ 10,412,000 Mutual Funds 3,987,000 — — 3,987,000 Exchange-Traded Funds 5,163,000 — — 5,163,000 Corporate Bonds — 38,690,000 — 38,690,000 Government Securities 45,171,000 — — 45,171,000 Cash and Money Funds 1,899,000 — — 1,899,000 Total $ 66,632,000 $ 38,690,000 $ — $ 105,322,000 Net unrealized gains and (losses) included in the condensed consolidated statements of income for the quarter and six months ended Mar c The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these items. |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 — Inventories are valued at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price of goods less reasonable costs of completion and delivery. During the fourth quarter of fiscal 2019, the Company changed its method for accounting for cost of inventories from the last-in, first-out first-in, first-out The fiscal 2018 consolidated financial statements were retrospectively adjusted to apply the new method of FIFO cost accounting for inventories. The cumulative effect of this change on periods prior to those presented herein resulted in an increase in retained earnings of $2,708,000. There was no material impact to the previously reported unaudited interim fiscal 2018 quarterly condensed consolidated results of operations or statements of income as a result of the retrospective application of the change in inventory accounting principle. 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 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 Net inventories at March 31, 2020 and September 30, 2019 consist of the following: March 31, 2020 September 30, 2019 Raw materials $ 15,155,000 $ 14,158,000 Work in process 3,092,000 1,397,000 Finished goods 8,776,000 9,811,000 Used equipment 40,000 — $ 27,063,000 $ 25,366,000 Slow-moving and obsolete inventory reserves were $4,518,000 and $4,700,000 at March 31, 2020 and September 30, 2019, respectively. |
Costs and Estimated Earnings in
Costs and Estimated Earnings in Excess of Billings | 6 Months Ended |
Mar. 31, 2020 | |
Text Block [Abstract] | |
Costs and Estimated Earnings in Excess of Billings | 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, 2020 and September 30, 2019 consist of the following: March 31, 2020 September 30, 2019 Costs incurred on uncompleted contracts $ 17,950,000 $ 18,707,000 Estimated earnings 7,489,000 9,063,000 25,439,000 27,770,000 Billings to date 16,647,000 13,932,000 Costs and estimated earnings in excess of billings $ 8,792,000 $ 13,838,000 |
Earnings per Share Data
Earnings per Share Data | 6 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share Data | 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, 2020 and 2019: Quarter Ended March 31, Six Months Ended March 31, 2020 2019 2020 2019 Net Income (Loss) $ (655,000 ) $ 7,460,000 $ 1,834,000 $ 7,773,000 Common Shares: Weighted average common shares outstanding 14,586,000 14,541,000 14,586,000 14,541,000 Effect of dilutive stock options — 167,000 128,000 164,000 Diluted shares outstanding 14,586,000 14,708,000 14,714,000 14,705,000 Basic: Net earnings (loss) per share $ (0.04 ) $ 0.51 $ 0.13 $ 0.53 Diluted: Net earnings (loss) per share $ (0.04 ) $ 0.51 $ 0.12 $ 0.53 Basic earnings per share is based on the weighted-average number of shares outstanding. Diluted earnings per share is based on the sum of the weighted-average number of shares outstanding plus common stock equivalents. For the quarter ended March 31, 2020, there w ere |
Customers with 10% (or greater)
Customers with 10% (or greater) of Net Revenues | 6 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Customers with 10% (or greater) of Net Revenues | Note 6 — Customers with 10% (or greater) of Net Revenues During the quarter ended March 31, 2020, three customers accounted for Two different customers accounted for 14.2% and 11.2% of net revenues for the quarter ended March 31, 2019. One of these two customers plus two other customers accounted for 13.9%, 13.9% and 11.8% of net revenues for the six months ended March 31, 2019 . |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 — Income Taxes On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law by President Donald Trump. The Tax Reform Act significantly lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities for tax years beginning after December 31, 2017, implementing a territorial tax system and imposing repatriation tax on deemed repatriated earnings of foreign subsidiaries. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. On the condensed consolidated balance sheet as of March 31, 2020, deferred income taxes decreased $2.9 million as compared to September 30, 2019 , reflecting payment of taxes due of $1.9 million on the filing of the Company’s Form 3115 with the Internal Revenue Service to reflect the revenue recognition method change to the percentage of completion method for tax purposes pursuant to Internal Revenue Code Sections 460 and 451(b). 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. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, its tax expense divided by pre-tax |
Revenue Recognition and Related
Revenue Recognition and Related Costs | 6 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition and Related Costs | Note 8 — Revenue Recognition and Related Costs As discussed in Note 1, the Company adopted the provisions of ASU No. 2014-09 The following table disaggregates the Company’s net revenue by major source for the quarter and six months ended March 31, 2020 and 2019: Quarter Ended March 31, Six Months Ended March 31, 2020 2019 2020 2019 Equipment sales recognized over time $ 9,829,000 $ 12,006,000 $ 21,919,000 $ 28,359,000 Equipment sales recognized at a point in time 10,044,000 8,929,000 11,951,000 10,443,000 Parts and component sales 4,675,000 4,466,000 7,821,000 7,517,000 Freight revenue 1,201,000 1,030,000 2,104,000 1,432,000 Other 244,000 239,000 228,000 246,000 Net revenue $ 25,993,000 $ 26,670,000 $ 44,023,000 $ 47,997,000 Revenues from contracts with customers for the design, manufacture and sale of custom equipment are recognized over time when th e 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 $8,792,000 at March 31, 2020 and $13,838,000 at September 30, 2019 and are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheets at March 31, 2020 and September 30, 2019, respectively. The Company anticipates that all these contract assets at March 31, 2020, 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. Control of the goods or service typically transfers at time of shipment or upon completion of the service. Payment for equipment under contract with customers is typically due prior to shipment. Payment for services under contract with customers is due as certain milestones are completed. Accounts receivable related to contracts with customers for equipment sales was $247,000 at March 31, 2020 and $301,000 at September 30, 2019. Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized. Provisions for estimated returns and allowances and other adjustments are provided for in the same period the related sales are recorded. Returns and allowances, which reduce product revenue, are estimated using historical experience. 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, 2020 and September 30, 2019. Customer deposits related to contracts with customers were $4,713,000 at March 31, 2020 and $1,918,000 at September 30, 2019, and are included in current liabilities on the Company’s condensed consolidated balance sheets at March 31, 2020 and September 30, 2019, respectively. 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. The cost of shipping and handling is classified as production costs concurrently with the revenue recognition. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9—Subsequent Events In January 2020, the World Health Organization (the “WHO”) announced a global health emergency because of a new strain of coronavirus COVID-19 COVID-19 As of the date of issuance of these unaudited Condensed Consolidated Financial Statements, our operations have not been significantly impacted. However, the full impact of the COVID-19 COVID-19 COVID-19 COVID-19. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Accounting Pronouncements and Policies | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers 2014-09”), 2014-09 2014-09 In February 2016, the FASB issued ASU No. 2016-02, Leases 2016-02”). right-of-use is prior 2016-02 2016-02 2016-02 In May 2017, the FASB issued ASU 2017-09, Compensation — Stock Compensation Scope of Modification Accounting 2017-09”). 2017-09 2017-09 2017-09 No other accounting pronouncements recently issued or newly effective have had, or are expected to have, a material impact on the Company’s consolidated financial statements. |
Marketable Securities | Marketable debt and equity securities are categorized as trading securities and are thus marked to market and stated at fair value. 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 statements of income. Net unrealized gains and losses are reported in the condensed consolidated statements of income in the current period and represent the change in the fair value of investment holdings during the period. |
Fair Value Measurements | Fair Value Measurements The fair value of financial instruments is presented based upon a hierarchy of levels that prioritizes the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). 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, 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: discounted cash flow methodologies, matrix pricing or other similar techniques. The inputs to these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, maturity, estimated duration and assumptions regarding liquidity and estimated future cash flows. In addition to bond characteristics, the valuation methodologies incorporate market data, such as actual trades completed, bids and actual dealer quotes, where such information is available. Accordingly, the estimated fair values are based on available market information and judgments about financial instruments (Level 2). Fair values of the Level 2 investments, if any, are provided by the Company’s professional investment management firm. The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of March 31, 2020: Fair Value Measurements Level 1 Level 2 Level 3 Total Equities $ 12,458,000 $ — $ — $ 12,458,000 Mutual Funds 2,290,000 — — 2,290,000 Exchange-Traded Funds 4,005,000 — — 4,005,000 Corporate Bonds — 39,721,000 — 39,721,000 Government Securities 40,315,000 — — 40,315,000 Cash and Money Funds 3,486,000 — — 3,486,000 Total $ 62,554,000 $ 39,721,000 $ — $ 102,275,000 Net unrealized gains and (losses) included in the Condensed Consolidated Statements of Income for the quarter and six months ended March 31, 2020, were $(6,029,000) and $(4,839,000), respectively. There were no transfers of investments between Level 1 and Level 2 during the six months ended March 31, 2020. The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2019: Fair Value Measurements Level 1 Level 2 Level 3 Total Equities $ 10,412,000 $ — $ — $ 10,412,000 Mutual Funds 3,987,000 — — 3,987,000 Exchange-Traded Funds 5,163,000 — — 5,163,000 Corporate Bonds — 38,690,000 — 38,690,000 Government Securities 45,171,000 — — 45,171,000 Cash and Money Funds 1,899,000 — — 1,899,000 Total $ 66,632,000 $ 38,690,000 $ — $ 105,322,000 Net unrealized gains and (losses) included in the condensed consolidated statements of income for the quarter and six months ended Mar c The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these items. |
Inventories | Inventories are valued at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price of goods less reasonable costs of completion and delivery. During the fourth quarter of fiscal 2019, the Company changed its method for accounting for cost of inventories from the last-in, first-out first-in, first-out The fiscal 2018 consolidated financial statements were retrospectively adjusted to apply the new method of FIFO cost accounting for inventories. The cumulative effect of this change on periods prior to those presented herein resulted in an increase in retained earnings of $2,708,000. There was no material impact to the previously reported unaudited interim fiscal 2018 quarterly condensed consolidated results of operations or statements of income as a result of the retrospective application of the change in inventory accounting principle. 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 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 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Net Inventories | Net inventories at March 31, 2020 and September 30, 2019 consist of the following: March 31, 2020 September 30, 2019 Raw materials $ 15,155,000 $ 14,158,000 Work in process 3,092,000 1,397,000 Finished goods 8,776,000 9,811,000 Used equipment 40,000 — $ 27,063,000 $ 25,366,000 |
Costs and Estimated Earnings _2
Costs and Estimated Earnings in Excess of Billings (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Text Block [Abstract] | |
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | Costs and estimated earnings in excess of billings on uncompleted contracts as of March 31, 2020 and September 30, 2019 consist of the following: March 31, 2020 September 30, 2019 Costs incurred on uncompleted contracts $ 17,950,000 $ 18,707,000 Estimated earnings 7,489,000 9,063,000 25,439,000 27,770,000 Billings to date 16,647,000 13,932,000 Costs and estimated earnings in excess of billings $ 8,792,000 $ 13,838,000 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Company's Marketable Securities Measured at Fair Value | The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of March 31, 2020: Fair Value Measurements Level 1 Level 2 Level 3 Total Equities $ 12,458,000 $ — $ — $ 12,458,000 Mutual Funds 2,290,000 — — 2,290,000 Exchange-Traded Funds 4,005,000 — — 4,005,000 Corporate Bonds — 39,721,000 — 39,721,000 Government Securities 40,315,000 — — 40,315,000 Cash and Money Funds 3,486,000 — — 3,486,000 Total $ 62,554,000 $ 39,721,000 $ — $ 102,275,000 Net unrealized gains and (losses) included in the Condensed Consolidated Statements of Income for the quarter and six months ended March 31, 2020, were $(6,029,000) and $(4,839,000), respectively. There were no transfers of investments between Level 1 and Level 2 during the six months ended March 31, 2020. The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2019: Fair Value Measurements Level 1 Level 2 Level 3 Total Equities $ 10,412,000 $ — $ — $ 10,412,000 Mutual Funds 3,987,000 — — 3,987,000 Exchange-Traded Funds 5,163,000 — — 5,163,000 Corporate Bonds — 38,690,000 — 38,690,000 Government Securities 45,171,000 — — 45,171,000 Cash and Money Funds 1,899,000 — — 1,899,000 Total $ 66,632,000 $ 38,690,000 $ — $ 105,322,000 |
Earnings per Share Data (Tables
Earnings per Share Data (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended March 31, 2020 and 2019: Quarter Ended March 31, Six Months Ended March 31, 2020 2019 2020 2019 Net Income (Loss) $ (655,000 ) $ 7,460,000 $ 1,834,000 $ 7,773,000 Common Shares: Weighted average common shares outstanding 14,586,000 14,541,000 14,586,000 14,541,000 Effect of dilutive stock options — 167,000 128,000 164,000 Diluted shares outstanding 14,586,000 14,708,000 14,714,000 14,705,000 Basic: Net earnings (loss) per share $ (0.04 ) $ 0.51 $ 0.13 $ 0.53 Diluted: Net earnings (loss) per share $ (0.04 ) $ 0.51 $ 0.12 $ 0.53 |
Revenue Recognition and Relat_2
Revenue Recognition and Related Costs (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Company's Net Revenue by Major Source | The following table disaggregates the Company’s net revenue by major source for the quarter and six months ended March 31, 2020 and 2019: Quarter Ended March 31, Six Months Ended March 31, 2020 2019 2020 2019 Equipment sales recognized over time $ 9,829,000 $ 12,006,000 $ 21,919,000 $ 28,359,000 Equipment sales recognized at a point in time 10,044,000 8,929,000 11,951,000 10,443,000 Parts and component sales 4,675,000 4,466,000 7,821,000 7,517,000 Freight revenue 1,201,000 1,030,000 2,104,000 1,432,000 Other 244,000 239,000 228,000 246,000 Net revenue $ 25,993,000 $ 26,670,000 $ 44,023,000 $ 47,997,000 |
Marketable Securities - Company
Marketable Securities - Company's Assets Measured at Fair Value (Detail) - USD ($) | Mar. 31, 2020 | Sep. 30, 2019 |
Investment Holdings [Line Items] | ||
Total | $ 102,275,000 | $ 105,322,000 |
Equities [Member] | ||
Investment Holdings [Line Items] | ||
Total | 12,458,000 | 10,412,000 |
Mutual Funds [Member] | ||
Investment Holdings [Line Items] | ||
Total | 2,290,000 | 3,987,000 |
Exchange Traded Funds [Member] | ||
Investment Holdings [Line Items] | ||
Total | 4,005,000 | 5,163,000 |
Corporate Bonds [Member] | ||
Investment Holdings [Line Items] | ||
Total | 39,721,000 | 38,690,000 |
Government Securities [Member] | ||
Investment Holdings [Line Items] | ||
Total | 40,315,000 | 45,171,000 |
Cash and Money Funds [Member] | ||
Investment Holdings [Line Items] | ||
Total | 3,486,000 | 1,899,000 |
Level 1 [Member] | ||
Investment Holdings [Line Items] | ||
Total | 62,554,000 | 66,632,000 |
Level 1 [Member] | Equities [Member] | ||
Investment Holdings [Line Items] | ||
Total | 12,458,000 | 10,412,000 |
Level 1 [Member] | Mutual Funds [Member] | ||
Investment Holdings [Line Items] | ||
Total | 2,290,000 | 3,987,000 |
Level 1 [Member] | Exchange Traded Funds [Member] | ||
Investment Holdings [Line Items] | ||
Total | 4,005,000 | 5,163,000 |
Level 1 [Member] | Government Securities [Member] | ||
Investment Holdings [Line Items] | ||
Total | 40,315,000 | 45,171,000 |
Level 1 [Member] | Cash and Money Funds [Member] | ||
Investment Holdings [Line Items] | ||
Total | 3,486,000 | 1,899,000 |
Level 2 [Member] | ||
Investment Holdings [Line Items] | ||
Total | 39,721,000 | 38,690,000 |
Level 2 [Member] | Corporate Bonds [Member] | ||
Investment Holdings [Line Items] | ||
Total | $ 39,721,000 | $ 38,690,000 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Marketable Securities [Line Items] | ||||
Changes in net unrealized gains and (losses) | $ (6,029,000) | $ 1,645,000 | $ (4,839,000) | $ (780,000) |
Transfers of investments between Level 1 and Level 2 | $ 0 | $ 0 | $ 0 | $ 0 |
Inventories - Net Inventories (
Inventories - Net Inventories (Detail) - USD ($) | Mar. 31, 2020 | Sep. 30, 2019 |
Inventory, Net [Abstract] | ||
Raw materials | $ 15,155,000 | $ 14,158,000 |
Work in process | 3,092,000 | 1,397,000 |
Finished goods | 8,776,000 | 9,811,000 |
Used equipment | 40,000 | |
Inventories, net | $ 27,063,000 | $ 25,366,000 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | Mar. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2019 |
Inventory [Line Items] | |||
Slow moving and obsolete inventory reserve | $ 4,518,000 | $ 4,518,000 | $ 4,700,000 |
Three to Four Years Old Inventory [Member] | |||
Inventory [Line Items] | |||
Cost basis reduction in inventory, percentage | 50.00% | ||
Inventory, minimum time period on the shelf, years | 3 years | ||
Inventory, maximum time period on the shelf, years | 4 years | ||
Four to Five Years Old Inventory [Member] | |||
Inventory [Line Items] | |||
Cost basis reduction in inventory, percentage | 75.00% | ||
Inventory, minimum time period on the shelf, years | 4 years | ||
Inventory, maximum time period on the shelf, years | 5 years | ||
Greater Than Five Years Old Inventory [Member] | |||
Inventory [Line Items] | |||
Inventory, minimum time period on the shelf, years | 5 years | ||
Inventory valuation estimate | $ 0 | ||
Provisions on obsolescence | $ 0 | ||
Inventory Valuation Adjustment [Member] | |||
Inventory [Line Items] | |||
Cumulative impact of change in accounting method inventory | $ 2,708,000 |
Costs and Estimated Earnings _3
Costs and Estimated Earnings in Excess of Billings - Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts (Detail) - USD ($) | Mar. 31, 2020 | Sep. 30, 2019 |
Costs in Excess of Billings on Uncompleted Contracts or Programs [Abstract] | ||
Costs incurred on uncompleted contracts | $ 17,950,000 | $ 18,707,000 |
Estimated earnings | 7,489,000 | 9,063,000 |
Costs and estimated earnings on uncompleted contracts | 25,439,000 | 27,770,000 |
Billings to date | 16,647,000 | 13,932,000 |
Costs and estimated earnings in excess of billings | $ 8,792,000 | $ 13,838,000 |
Earnings per Share Data - Basic
Earnings per Share Data - Basic and Diluted Earnings Per Share (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | [1] | Mar. 31, 2020 | Mar. 31, 2019 | ||
Earnings Per Share [Abstract] | ||||||||
Net Income (Loss) | $ (655,000) | $ 2,489,000 | $ 7,460,000 | [1] | $ 313,000 | $ 1,834,000 | $ 7,773,000 | |
Common Shares: | ||||||||
Weighted average common shares outstanding | 14,586,000 | 14,541,000 | 14,586,000 | 14,541,000 | ||||
Effect of dilutive stock options | 167,000 | 128,000 | 164,000 | |||||
Diluted shares outstanding | 14,586,000 | 14,708,000 | 14,714,000 | 14,705,000 | ||||
Basic: | ||||||||
Net earnings (loss) per share | $ (0.04) | $ 0.51 | $ 0.13 | $ 0.53 | ||||
Diluted: | ||||||||
Net earnings (loss) per share | $ (0.04) | $ 0.51 | $ 0.12 | $ 0.53 | ||||
[1] | The balances as of September 30, 2018, December 31, 2018 and March 31, 2019, and the amounts for the quarter and six months ended March 31, 2019, have been adjusted to reflect the change in inventory accounting method, as described in Note 3 to the Condensed Consolidated Financial Statements. |
Earnings Per Share Data - Addit
Earnings Per Share Data - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Exercisable stock options, included in the diluted earnings per share calculation | 317,000 | 260,000 | 317,000 |
Effect of dilutive stock options | 167,000 | 128,000 | 164,000 |
Anti-dilutive shares | 30,000 | ||
Inclusive Of Diluted Earning [Member] | |||
Anti-dilutive shares | 0 | 0 |
Customers with 10% (or greate_2
Customers with 10% (or greater) of Net Revenues - Additional information (Detail) - Revenue [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Customer One [Member] | ||||
Percentage of concentration | 12.30% | 14.20% | 13.90% | |
Customer Two [Member] | ||||
Percentage of concentration | 11.20% | 11.20% | 13.90% | |
Customer Three [Member] | ||||
Percentage of concentration | 10.70% | 10.40% | 11.80% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
IncomeTaxes [Line Items] | |||||
U.S. corporate income tax rate | 21.00% | 35.00% | |||
Adjustments to deferred income taxes | $ 2,863,000 | $ 156,000 | |||
Increase decrease in accounts payable and accrued expenses | $ 1,900,000 | ||||
Internal Revenue Service (IRS) [Member] | |||||
IncomeTaxes [Line Items] | |||||
Adjustments to deferred income taxes | $ 2.9 |
Revenue Recognition and Relat_3
Revenue Recognition and Related Costs - Disaggregation of Company's Net Revenue by Major Source (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 25,993,000 | $ 26,670,000 | $ 44,023,000 | $ 47,997,000 |
Equipment Sales [Member] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 9,829,000 | 12,006,000 | 21,919,000 | 28,359,000 |
Equipment Sales [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 10,044,000 | 8,929,000 | 11,951,000 | 10,443,000 |
Parts and Component Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 4,675,000 | 4,466,000 | 7,821,000 | 7,517,000 |
Freight Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 1,201,000 | 1,030,000 | 2,104,000 | 1,432,000 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 244,000 | $ 239,000 | $ 228,000 | $ 246,000 |
Revenue Recognition and Relat_4
Revenue Recognition and Related Costs - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Amortization period for incremental costs | 1 year | |
Costs and estimated earnings in excess of billings | $ 8,792,000 | $ 13,838,000 |
Accounts receivable related to contracts with customers | 247,000 | 301,000 |
Current Liabilities [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Customer deposits related to contracts with customers | $ 4,713,000 | $ 1,918,000 |
Maximum [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets collection period | 1 year |