Gencor Industries is a US manufacturer of heavy machinery used in the production of highway construction materials, synthentic fuels, and environmental control equipment. Subsidiary Bituma designs and manufactures hot-mix asphalt batch plants used in the production of asphalt paving materials. Subsidiary General Combustion engineers combustion systems, namely large burners that can transform almost any fuel into energy or burn multiple fuels simultaneously, and fluid heat transfer systems under the Hy-Way and Beverley brands. With two manufacturing facilities in the US, it sells products through its own sales force and independent dealers and agents located throughout the world.
The highway construction industry is Gencor's main market. That market, of course, was hit hard by the recession, which in turn drove down sales of Gencor's equipment. The company responded with a restructuring plan that included cutting headcount, operating expenses, raw material purchases, and production. It also sold its UK manufacturing operations in 2009. That fiscal year the company's net sales plunged 36% from a historic peak in 2008. Net income in 2009 also fell to an all-time loss of about $2.6 million. In fiscal 2010 net sales were still significantly below 2008 levels. However, it managed to turn its net loss around, reporting net income of about $3 million in 2010.
Gencor attributes its financial state to the fact that the road building industry in the US continued to languish in 2010 as a result of general economic conditions and a lack of funding at both the federal and state government levels. Gencor's chairman and CEO E.J. Elliott, who owns about 13% of the company, said there has been no concerted effort by Congress and the administration to renew the traditional 6-year Highway Bill. Under these conditions, sales opportunities are fewer and more competitive.
Over the long term, Gencor's strategy is to continue investing in product engineering and development to expand its product lines. It will specifically focus on developing more energy-efficient and environmentally-compatible products. – less