GENCOR INDUSTRIES INC
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
GENC$17.00+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-07-25.
0001193125-25-164840
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001193125-25-176039
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 11 previous paragraphs and 57 current paragraphs.
8 unchanged; 3 reworded; 45 added; 0 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (45)
Current report
Results of Operations
Current report
Quarter Ended June 30, 2025 versus June 30, 2024
Current report
Net revenue for the quarter ended June 30, 2025 increased $1,435,000, or 5.6%, to $26,986,000, from $25,551,000 for the quarter ended June 30, 2024. The increase in revenues was primarily due to higher equipment sales recognized at a point in time, increased parts and component sales and freight revenues.
Current report
As a percent of sales, gross profit margins increased to 26.5% in the quarter ended June 30, 2025, compared to 23.9% in the quarter ended June 30, 2024, from improved profitability on certain contract sales and increased parts sales which have a higher margin compared to other sources of revenue.
Current report
Product engineering and development expenses decreased by $83,000 to $741,000 for the quarter ended June 30, 2025, as compared to $824,000 for the quarter ended June 30, 2024 due to lower headcount. Selling, general and administrative (“SG&A”) expenses decreased by $25,000 to $3,265,000 for the quarter ended June 30, 2025, compared to $3,290,000 for the quarter ended June 30, 2024.
Current report
Operating income increased from $1,993,000 for the quarter ended June 30, 2024 to $3,137,000 for the quarter ended June 30, 2025, due primarily to higher net revenue and improved gross profit margins.
Current report
For the quarter ended June 30, 2025, the Company had net other income of $2,036,000 compared to $1,329,000 for the quarter ended June 30, 2024. Interest and dividend income, net of fees, was $1,142,000 for the quarter ended June 30, 2025 as compared to $966,000 in the quarter ended June 30, 2024. The increase was primarily due to higher interest rates earned on increased cash balances and fixed income investments. The net realized and unrealized gains on marketable securities were $894,000 for the quarter ended June 30, 2025 compared to $363,000 for the quarter ended June 30, 2024, due to gains in fixed income and equity in investments.
Current report
The effective income tax rates for the quarters ended June 30, 2025 and June 30, 2024 were 26.0% and 23.0%, respectively, based on the expected annual effective income tax rate.
Current report
Net income for the quarter ended June 30, 2025 was $3,828,000, or $0.26 per basic and diluted common share, compared to net income of $2,558,000, or $0.17 per basic and diluted common share, for the quarter ended June 30, 2024.
Current report
Nine Months Ended June 30, 2025 versus June 30, 2024
Current report
Net revenues for the nine months ended June 30, 2025 and 2024 were $96,606,000 and $92,245,000, respectively, an increase of $4,361,000, or 4.7%. The improved net revenue was primarily from equipment sales recognized over time. Gross profit margins were 28.1% for both the nine months ended June 30, 2025 and June 30, 2024.
Current report
Product engineering and development expenses decreased $419,000 to $2,099,000 for the nine months ended June 30, 2025, compared to $2,518,000 for the nine months ended June 30, 2024 due primarily to reduced headcount. SG&A expenses decreased slightly by $173,000 to $10,824,000 for the nine months ended June 30, 2025, compared to $10,997,000 the nine months ended June 30, 2024.
Current report
The Company had operating income of $14,241,000 for the nine months ended June 30, 2025 compared to $12,448,000 for the nine months ended June 30, 2024. The increase in operating income was due primarily to the increased net revenue and reduced product engineering and development expenses.
Current report
For the nine months ended June 30, 2025, the Company had net other income of $4,326,000 compared to $4,572,000 for the nine months ended June 30, 2024. Interest and dividend income, net of fees, was $3,289,000 for the nine months ended June 30, 2025 as compared to $2,485,000 for the nine months ended June 30, 2024. The increase in interest and dividend income, net of fees, for the nine months ended June 30, 2025, was primarily due to increased cash balances and fixed income investments. Net realized and unrealized gains on marketable securities were $1,037,000 for the nine months ended June 30, 2025 compared to $2,087,000 for the nine months ended June 30, 2024. During the first nine months of fiscal 2025, bond yields rose due to stronger economic data and higher than anticipated inflation. The higher yields negatively impacted the value of our bond holdings.
Current report
The effective income tax rates for the nine months ended June 30, 2025 and June 30, 2024 were 26.0% and 23.0%, respectively, based on the expected annual effective income tax rate. Net income for the nine months ended June 30, 2025 was $13,740,000, or $0.94 per basic and diluted common share, compared to net income of $13,106,000, or $0.89 per basic and diluted common share, for the nine months ended June 30, 2024.
Current report
Liquidity and Capital Resources
Current report
The Company generates capital resources through operations and returns on its investments. We believe these sources of capital will satisfy our liquidity needs in both the short and long term.
Current report
The Company had no long-term or short-term debt outstanding at June 30, 2025 or September 30, 2024. In April 2020, a financial institution issued an irrevocable standby letter of credit (“letter of credit”) on behalf of the Company for the benefit of one of the Company’s insurance carriers. The maximum amount that can be drawn by the beneficiary under the letter of credit is $150,000. The letter of credit expires in April 2026, unless terminated earlier, and can be extended, as provided by the agreement. The Company intends to renew the letter of credit for as long as the Company does business with the beneficiary insurance carrier. The letter is collateralized by restricted cash of the same amount on any outstanding drawings. To date, no amounts have been drawn under the letter of credit.
Current report
As of June 30, 2025, the Company had $27,874,000 in cash and cash equivalents, and $108,097,000 in marketable securities, including $3,018,000 in equities, $30,871,000 in corporate bonds, $7,856,000 in exchange-traded funds, $4,010,000 in mutual funds, $62,134,000 in government securities, and $208,000 in cash and money funds. The marketable securities are invested through a professional investment management firm. These securities may be liquidated at any time into cash and cash equivalents.
Current report
The Company’s backlog was $26.2 million at June 30, 2025 compared to $46.6 million at June 30, 2024. The Company’s working capital (defined as current assets less current liabilities) was $197.1 million at June 30, 2025 and $182.2 million at September 30, 2024. Cash flows provided by operating activities during the nine months ended June 30, 2025 were $3,343,000. Accounts receivable increased $1,177,000 during the nine months ended June 30, 2025, due to the increase in parts and component sales in the quarter ended June 30, 2025, compared to parts and component sales in the quarter ended September 30, 2024. Contract assets increased $2,887,000 during the nine months ended June 30, 2025, with the timing of inventory build and percentage of completion recognition on sales where revenue is recognized over time. Inventories decreased by $10,890,000 during the nine months ended June 30, 2025, due to paver sales and the completion and shipment on several large contract orders where revenue is recognized at a point in time. Prepaid expenses decreased $1,246,000 during the nine months ended June 30, 2025, due primarily to income tax overpayments at September 30, 2024 being applied to fiscal 2025 income tax liability. Customer deposits decreased $2,591,000 during the nine months ended June 30, 2025, reflecting down payments and final payments on contract jobs that shipped complete during the nine months ended June 30, 2025.
Current report
Cash flows used in investing activities for the nine months ended June 30, 2025 of $951,000 were related to capital expenditures, primarily for land and building improvements and handling equipment.
Current report
Seasonality
Current report
The Company’s primary business is the manufacture of asphalt pavers, asphalt plants and related components. These products typically experience a seasonal slowdown during the third and fourth quarters of the calendar year. This slowdown often results in lower reported sales and operating results during the first and fourth quarters of the fiscal year ended September 30.
Current report
Critical Accounting Policies, Estimates and Assumptions
Current report
The Company believes the following discussion addresses its most critical accounting policies, which are those that are most important to the portrayal of the financial condition and results of operations and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Accounting policies, in addition to the critical accounting policies referenced below, are presented in Note 1 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024, “Nature of Operations and Summary of Significant Accounting Policies.” There were no changes in the Company’s accounting policies during the nine months ended June 30, 2025.
Current report
Estimates and Assumptions
Current report
In preparing the condensed consolidated financial statements, the Company uses certain estimates and assumptions that may affect reported amounts and disclosures. Estimates and assumptions are used, among other places, when accounting for certain revenue (e.g., contract accounting), expense, and asset and liability valuations. The Company believes that the estimates and assumptions made in preparing the condensed consolidated financial statements are reasonable, but are inherently uncertain. Assumptions may be incomplete or inaccurate and unanticipated events may occur. The Company is subject to risks and uncertainties that may cause actual results to differ from estimated results.
Current report
Revenues & Expenses
Current report
The Company recognizes revenue under ASUNo. 2014-09, Revenue from Contracts with Customers (Topic 606). Revenues from contracts with customers for the design, manufacture and sale of custom equipment are recognized over time when the performance obligation is satisfied by transferring control of the equipment. Control of the equipment transfers over time, as the equipment is unique to the specific contract and thus does not create an asset with an alternative use to the Company. Revenues and costs are recognized in proportion to actual labor costs incurred, as compared with total estimated labor costs expected to be incurred, during the entire contract. All incremental costs related to obtaining a contract are expensed as incurred, as the amortization period is less than one year. Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined.
Current report
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 $12,226,000 at June 30, 2025 and $9,339,000 at September 30, 2024, and are included in current assets on the Company’s condensed consolidated balance sheets at June 30, 2025 and September 30, 2024. The Company anticipates that all of the contract assets at June 30, 2025, will be billed and collected within one year.
Current report
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.
Current report
Payment for equipment under contract with customers is typically due prior to shipment. Payment for services under contract with customers is due as services are completed. Accounts receivable related to contracts with customers for equipment sales recognized at a point in time were $426,000 and $163,000 at June 30, 2025 and September 30, 2024, respectively.
Current report
Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized.
Current report
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 June 30, 2025 and September 30, 2024. Customer deposits related to contracts with customers were $2,427,000 and $5,018,000 at June 30, 2025 and September 30, 2024, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets.
Current report
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 cost of goods sold concurrently with the revenue recognition.
Current report
All product engineering and development costs, and selling, general and administrative expenses are charged to operations as incurred. Provision is made for any anticipated contract losses in the period that the loss becomes evident.
Current report
The allowance for credit losses is determined by performing a specific review of all account balances greater than 90 days past due and other higher risk amounts to determine collectability, and also adjusting for any known customer payment issues with account balances in theless-than-90-day past due aging category. The measurement and recognition of credit losses involves judgment and represents the Company’s estimate of expected credit losses based on a number of considerations, including historical credit loss experience, the aging of account balances, customer credit worthiness, and current and expected economic, market and industry factors impacting the Company’s customers, including their financial condition. Account balances are charged off against the allowance for credit losses when they are determined to be uncollectible. Any recoveries of account balances previously considered in the allowance for credit losses reduce future additions to the allowance for credit losses. The allowance for credit losses also includes an estimate for returns and allowances. 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 known issues and historical experience.
Current report
Inventories
Current report
Inventories are valued at the lower of cost or net realizable value, with cost being determined under the first in, first out method and net realizable value defined as the estimated selling price of goods less reasonable costs of completion and delivery. 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 materials, work in process, finished goods, spare parts and used equipment. Used equipment acquired by the Company ontrade-in from customers is carried at estimated net realizable value. Unless specific circumstances warrant different treatment regarding inventory obsolescence, an allowance is established to reduce the cost basis of inventories three to four years old by 50%, the cost basis of inventories four to five years old by 75%, and the cost basis of inventories greater than five years old to zero. Inventory is typically reviewed for obsolescence on an annual basis computed as of September 30, the Company’s fiscal year end. If significant known changes in trends, technology or other specific circumstances that warrant consideration occur during the year, then the impact on obsolescence is considered at that time.
Current report
Marketable Securities and Fair Value Measurements
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (3)
Previous wording
For information concerning these factors and related matters, see the following sections of the Company’s Annual Report on Form 10-K for the year ended September 30, 2024: (a) Part I, Item 1A, “Risk Factors” and (b) Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, however, other factors besides those referenced could adversely affect the Company’s results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by the Company herein speak as of the date of issuance of this Quarterly Report. The Company does not undertake to update any forward-looking statement, except as required by law.
Current wording
For information concerning these factors and related matters, see the following sections of the Company’s Annual Report on Form 10-K for the year ended September 30, 2024: (a) Part I, Item 1A, “Risk Factors” and (b) Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; however, other factors besides those referenced could adversely affect the Company’s results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by the Company herein speak as of the date of this Quarterly Report. The Company does not undertake to update any forward-looking statement, except as required by law.
Previous wording
On November 15, 2021, President Biden signed into law a five-year, $1.2 trillion infrastructure bill, the Infrastructure Investment and Jobs Act (the “IIJ Act”), including $550 billion in new spending and reauthorization of $650 billion in previously allocated funds. The IIJ Act provides $110 billion for the nation’s highways, bridges and roads.
Current wording
On November 15, 2021, President Biden signed into law a five-year, $1.2 trillion infrastructure bill, the Infrastructure Investment and Jobs Act (the “IIJ Act”), including $550 billion in new spending and reauthorization of $650 billion in previously allocated funds. The IIJ Act provides funding of $110 billion for the nation’s highways, bridges and roads through September 2026.
Previous wording
Concerns over inflation, geopolitical issues and global financial markets have led to increased economic instability and expectations of slower global economic growth. Our business may be adversely affected by any such economic instability or unpredictability. Russia’s invasion of Ukraine and related sanctions as well as the conflict between Israel and Iran have led to increased energy prices. Such sanctions and disruptions to the global economy may lead to additional inflation and may disrupt the global supply chain and could have a material adverse effect on our ability to secure supplies. The increased cost of oil, along with increased or prolonged periods of inflation, would likely increase our costs in the form of higher inflation on supplies necessary to operate our business. Additionally, the armed conflict involving Hamas and Israel, as well as further escalation of tensions among Israel, the U.S., and various countries in the Middle East, including hostilities involving Iran, and North Africa, may cause increased inflation in energy and logistics costs and could further cause general economic conditions in the U.S. or abroad to deteriorate. There is a risk that one or more of our suppliers could be negatively affected by global economic instability, which could adversely affect our ability to operate efficiently and timely complete our operational goals. As of the date of issuance of this Quarterly Report, the Company’s operations have not been significantly impacted.
Current wording
Concerns over inflation, geopolitical issues and global financial markets have led to increased economic instability and expectations of slower global economic growth. Our business may be adversely affected by any such economic instability or unpredictability. Russia’s invasion of Ukraine and related sanctions as well as the conflict between Israel and Iran have led to increased energy prices. Such sanctions and disruptions to the global economy may lead to additional inflation and may disrupt the global supply chain and could have a material adverse effect on our ability to secure supplies. The increased cost of oil, along with increased or prolonged periods of inflation, would likely increase our costs in the form of higher inflation on supplies necessary to operate our business. Additionally, the armed conflict involving Hamas and Israel, as well as further escalation of tensions among Israel, the U.S., and various countries in the Middle East, including hostilities involving Iran, and North Africa, may cause increased inflation in energy and logistics costs and could further cause general economic conditions in the U.S. or abroad to deteriorate. There is a risk that one or more of our suppliers could be negatively affected by global economic instability, which could adversely affect our ability to operate efficiently and timely complete our operational goals. As of the date of this Quarterly Report, the Company’s operations have not been significantly impacted.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations