UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~JUNE~~DECEMBER 3031, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD: From

Commission File Number:

001-11703

GENCOR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		59-0933147
(State or other jurisdiction ofincorporation or organization)		(IRS EmployerIdentification No.)
(State or other jurisdictionof incorporation or organization)		(IRS EmployerIdentification 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)

Securities registered ~~or to be registered~~ pursuant to Section 12(b) of the Act

Title of Each Class		~~TradingSymbol~~Trading Symbol(s)		Name of each ~~exchangeon~~exchange on which registered
Common Stock ($.10 Par Value)		GENC		NYSE American LLC

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 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 ☒☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

Large accelerated filer ☐ Accelerated Filer ☒☑ Non-accelerated Filer ☐ Smaller Reporting Company ☒☑ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at ~~August~~February 75, ~~2025~~2026
Common stock, $.10 par value	~~12,338,845 shares~~	12,338,845 shares
Class B common stock, $.10 par value	2,318,857 shares
Class B stock, $.10 par value		2,318,857 shares

GENCOR INDUSTRIES, INC.

Index		~~Page~~		Page
Part I. Financial Information
Part I.	Financial Information
~~Item 1.~~	~~Financial~~Item ~~Statements~~1.	Financial Statements
	Condensed Consolidated Balance Sheets – June 30, 2025 (Unaudited) and September 30, 2024		4
		Condensed Consolidated Balance Sheets – December 31, 2025 (Unaudited) and September 30, 2025			4
	Condensed Consolidated Income Statements – Quarters and Nine Months Ended June 30, 2025 and 2024 (Unaudited)		5
		Condensed Consolidated Income Statements – Quarters Ended December 31, 2025 and 2024 (Unaudited)			5
	Condensed Consolidated Statements of Shareholders’ Equity – Quarters and Nine Months Ended June 30, 2025 and 2024 (Unaudited)		6
		Condensed Consolidated Statements of Shareholders’ Equity – Quarters Ended December 31, 2025 and 2024 (Unaudited)			6
	Condensed Consolidated Statements of Cash Flows – Nine Months Ended June 30, 2025 and 2024 (Unaudited)		7
		Condensed Consolidated Statements of Cash Flows – Quarters Ended December 31, 2025 and 2024 (Unaudited)			7
	~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~	Notes to Condensed Consolidated Financial Statements (Unaudited)	8		8
~~Item 2.~~	~~Management’s~~Item ~~Discussion and Analysis of Financial Condition and Results of Operations~~2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16		16
~~Item 3.~~	~~Quantitative~~Item ~~and Qualitative Disclosures about Market Risk~~3.	Quantitative and Qualitative Disclosures About Market Risk	22		21
~~Item 4.~~	~~Controls~~Item ~~and Procedures~~4.	Controls and Procedures	22		21
Part II. Other Information
Part II.	Other Information
~~Item 1.~~	~~Legal~~Item ~~Proceedings~~1.	Legal Proceedings	24		23
~~Item 1A.~~	~~Risk~~Item ~~Factors~~1A.	Risk Factors	24		23
~~Item 5.~~	~~Other~~Item ~~Information~~5.	Other Information	24		23
~~Item 6.~~	~~Exhibits~~Item 6.	Exhibits	25		24
Signatures			26		25

~~Cautionary~~Introductory Note: ~~Regarding~~Caution Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”) and the Company’s other communications and statements may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements about the Company’s beliefs, plans, objectives, goals, expectations, estimates, projections and intentions. These statements are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company’s control. The Company’s actual results may differ materially from those set forth in the Company’s forward-looking statements depending on a variety of important factors, including the financial condition of the Company’s customers, changes in the economic and competitive environments, and demand for the Company’s products. In addition, the impact of (i) the United States (“U.S.”) government’s ~~recent~~ tariff announcements, (ii) the ~~invasion~~ongoing byconflicts ~~Russia~~and/or ~~into~~tensions involving Russia, Ukraine, ~~and~~Israel, ~~(iii)~~ the ~~conflict~~U.S., ~~between~~Greenland, ~~Israel~~ and ~~Hamas,~~various ~~including~~countries ~~hostilities~~in ~~involving~~South ~~Iran~~America, asEurope ~~well~~and asthe ~~actions~~Middle ~~taken~~East, byand ~~other~~(iii) any ~~countries,~~actions ~~including~~taken by the U.S., or other countries in response to such tariff announcements, conflicts and/or ~~conflicts~~tensions, could result in a disruption in our supply chain and higher costs of our products. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements.

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~~2025: (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 of operations, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statement made by the Company herein speaks as of the date of this Quarterly Report. The Company does not undertake to update any forward-looking statements, except as required by law.

Unless the context otherwise indicates, all references in this Quarterly Report to the “Company,” “Gencor,” “we,” “us,” or “our,” or similar words are to Gencor Industries, Inc. and its subsidiaries.

Part I. Financial Information

Item 1. Financial Statements

GENCOR INDUSTRIES, INC.

Condensed Consolidated Balance Sheets

ASSETS	~~June~~December 3031, 2025 (Unaudited)		September 30, ~~2024~~2025
Current assets:
Cash and cash equivalents	$	2736,~~874~~731,000	$	2526,~~482~~587,000
Marketable securities at fair value (cost of $106,365,000 at June 30, 2025 and $88,777,000 at September 30, 2024)		108,097,000		89,927,000
Marketable securities at fair value (cost of $108,356,000 at December 31, 2025 and $107,237,000 at September 30, 2025)		111,003,000		109,714,000
Accounts receivable, less allowance for credit losses of $480,000 at June 30, 2025 and $390,000 at September 30, 2024		3,157,000		1,980,000
Accounts receivable, less allowance for credit losses of $498,000 at December 31, 2025 and $434,000 at September 30, 2025		3,498,000		3,130,000
Contract assets		125,~~226~~091,000		912,~~339~~208,000
Inventories, net		5253,~~872~~249,000		6353,~~762~~503,000
Prepaid expenses and other current assets		1,106,000		2,352,000
Prepaid expenses		2,919,000		1,399,000
Total current assets		~~205~~212,~~332~~491,000		~~192~~206,~~842~~541,000
Property and equipment, net		1011,~~641~~510,000		11,~~472~~079,000
Deferred income taxes		34,~~698~~611,000		34,~~424~~584,000
Other long-term assets		~~485~~301,000		~~383~~392,000
Total Assets	$	~~220~~228,~~156~~913,000	$	~~208~~222,~~121~~596,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	21,~~539~~991,000	$	21,~~001~~842,000
Customer deposits		26,~~427~~022,000		53,~~018~~889,000
Accrued expenses		23,~~944~~286,000		32,~~255~~741,000
Current operating lease liabilities		~~369~~248,000		~~330~~339,000
Total current liabilities		811,~~279~~547,000		108,~~604~~811,000
Unrecognized tax benefits		12,~~933~~122,000		1,~~376~~983,000
Non-current operating lease liabilities		63,000		—
Total liabilities		13,669,000		10,794,000
Total liabilities		10,275,000		11,980,000
Commitments and contingencies
Shareholders’ equity:
Preferred stock, par value $.10 per share; 300,000 shares authorized; none issued		—		—
Common stock, par value $.10 per share; 15,000,000 shares authorized; 12,338,845 shares issued and outstanding at June 30, 2025 and September 30, 2024		1,234,000		1,234,000
Common stock, par value $.10 per share; 15,000,000 shares authorized; 12,338,845 shares issued and outstanding at December 31, 2025 and September 30, 2025		1,234,000		1,234,000
Class B common stock, par value $.10 per share; 6,000,000 shares authorized; 2,318,857 shares issued and outstanding at June 30, 2025 and September 30, 2024		232,000		232,000
Class B Stock, par value $.10 per share; 6,000,000 shares authorized; 2,318,857 shares issued and outstanding at December 31, 2025 and September 30, 2025		232,000		232,000
Capital in excess of par value		12,590,000		12,590,000
Retained earnings		~~195~~201,~~825~~188,000		~~182~~197,~~085~~746,000
Total shareholders’ equity		~~209~~215,~~881~~244,000		~~196~~211,~~141~~802,000
Total Liabilities and Shareholders’ Equity	$	~~220~~228,~~156~~913,000	$	~~208~~222,~~121~~596,000

See accompanying Notes to Condensed Consolidated Financial Statements

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GENCOR INDUSTRIES, INC.


GENCOR INDUSTRIES, INC. Condensed Consolidated Income Statements For the Quarters Ended December 31, 2025 and 2024 (Unaudited)
	2025		2024
Net revenue	$	23,577,000	$	31,416,000
Cost of goods sold		16,822,000		22,748,000

Gross profit		6,755,000		8,668,000
Operating expenses:
Product engineering and development		758,000		677,000
Selling, general and administrative		2,896,000		3,367,000

Total operating expenses		3,654,000		4,044,000

Operating income		3,101,000		4,624,000
Other income, net:
Interest and dividend income, net of fees		1,177,000		989,000
Realized and unrealized gains (losses) on marketable securities, net		373,000		(455,000	)

Total other income, net		1,550,000		534,000

Income before income tax expense		4,651,000		5,158,000
Income tax expense		1,209,000		1,341,000

Net income	$	3,442,000	$	3,817,000

Net income per common share – basic and diluted	$	0.23	$	0.26

Condensed Consolidated Income Statements

(Unaudited)

	For the Quarters Ended June 30,				For the Nine Months Ended June 30,
	2025		2024		2025		2024
Net revenue	$	26,986,000	$	25,551,000	$	96,606,000	$	92,245,000
Cost of goods sold		19,843,000		19,444,000		69,442,000		66,282,000
Gross profit		7,143,000		6,107,000		27,164,000		25,963,000
Operating expenses:
Product engineering and development		741,000		824,000		2,099,000		2,518,000
Selling, general and administrative		3,265,000		3,290,000		10,824,000		10,997,000
Total operating expenses		4,006,000		4,114,000		12,923,000		13,515,000
Operating income		3,137,000		1,993,000		14,241,000		12,448,000
Other income (expense), net:
Interest and dividend income, net of fees		1,142,000		966,000		3,289,000		2,485,000
Net realized and unrealized gains on marketable securities		894,000		363,000		1,037,000		2,087,000
Total other income (expense), net		2,036,000		1,329,000		4,326,000		4,572,000
Income before income tax expense		5,173,000		3,322,000		18,567,000		17,020,000
Income tax expense		1,345,000		764,000		4,827,000		3,914,000
Net income	$	3,828,000	$	2,558,000	$	13,740,000	$	13,106,000
Net income per common share - basic and diluted	$	0.26	$	0.17	$	0.94	$	0.89

See accompanying Notes to Condensed Consolidated Financial Statements

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GENCOR INDUSTRIES, INC.

Condensed Consolidated Statements of Shareholders’ Equity

Statements of Shareholder

(Unaudited)

	For the Quarters and Nine Months Ended June 30, 2025
	Common Stock				Class B Common Stock				Capital in Excess of		Retained		Total Shareholders’
	Shares		Amount		Shares		Amount		Par Value		Earnings		Equity
September 30, 2024		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	182,085,000	$	196,141,000
Net income		—		—		—		—		—		3,817,000		3,817,000
December 31, 2024		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	185,902,000	$	199,958,000
Net income		—		—		—		—		—		6,095,000		6,095,000
March 31, 2025		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	191,997,000	$	206,053,000
Net income		—		—		—		—		—		3,828,000		3,828,000
June 30, 2025		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	195,825,000	$	209,881,000

For the Quarter Ended December 31, 2025

	For the Quarters and Nine Months Ended June 30, 2024
	Common Stock				Class B Stock				Capital in Excess of Par Value		Retained Earnings		Total Shareholders’ Equity
	Common Stock				Class B Common Stock				Capital in Excess of		Retained		Total Shareholders’
	Shares		Amount		Shares		Amount
	Shares		Amount		Shares		Amount		Par Value		Earnings		Equity
September 30, 2025		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	197,746,000	$	211,802,000
September 30, 2023		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	167,527,000	$	181,583,000
Net income		—		—		—		—		—		3,442,000		3,442,000
Net income		—		—		—		—		—		4,326,000		4,326,000
December 31, 2025		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	201,188,000	$	215,244,000
December 31, 2023		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	171,853,000	$	185,909,000
Net income		—		—		—		—		—		6,222,000		6,222,000
March 31, 2024		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	178,075,000	$	192,131,000
Net income		—		—		—		—		—		2,558,000		2,558,000
June 30, 2024		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	180,633,000	$	194,689,000

For the Quarter Ended December 31, 2024


	Common Stock				Class B Stock				Capital in Excess of Par Value		Retained Earnings		Total Shareholders’ Equity
	Shares		Amount		Shares		Amount		Capital in Excess of Par Value		Retained Earnings		Total Shareholders’ Equity
September 30, 2024		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	182,085,000	$	196,141,000
Net income		—		—		—		—		—		3,817,000		3,817,000

December 31, 2024		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	185,902,000	$	199,958,000

See accompanying Notes to Condensed Consolidated Financial Statements

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GENCOR INDUSTRIES, INC.Condensed Consolidated Statements of Cash FlowsFor the Nine Months Ended June 30, 2025 and 2024(Unaudited)
GENCOR INDUSTRIES, INC.Condensed Consolidated Statements of Cash FlowsFor the Quarters Ended December 31, 2025 and 2024(Unaudited)
	2025			2024
Cash flows from operating activities:
Net income	$	133,~~740~~442,000		$	133,~~106~~817,000
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to cash provided by operating activities:
Net unrealized gains on marketable securities		(582,000	)		(1,346,000	)
Unrealized (gain) loss on marketable securities		(169,000	)		567,000
Deferred income taxes		(~~274~~27,000	)		(~~106~~148,000	)
Unrecognized tax benefits		~~557~~139,000			—155,000
Depreciation and amortization		1542,~~782,~~000			1622,~~971,~~000
Provision for credit losses		95,000			—
Changes in operating assets and liabilities:
Accounts receivable		(1463,~~177,~~000	)		(~~456~~1,616,000	)
Contract assets		(27,~~887~~117,000	)		(1,~~192~~418,000	)
Marketable securities		(171,~~588~~120,000	)		(2773,~~207,~~000	)
Inventories		10254,~~890,~~000			84,~~295~~094,000
Prepaid expenses and other current assets		(1,~~246~~520,000	)		1527,~~638,~~000
Accounts payable		~~538~~149,000			~~(923~~1,719,000	)
Customer deposits		(2,~~591~~133,000	)		(42,~~255~~389,000	)
Accrued expenses		(311,000	)		(2,013,000	)
Contract liabilities		—			2,157,000
Total adjustments		(10,397,000	)		(594,000	)
Accrued expenses		545,000			(119,000	)
Net cash provided by operating activities		3,343,000			12,512,000
Total adjustments		7,675,000			10,992,000
Cash provided by operating activities		11,117,000			14,809,000
Cash flows from investing activities:
Capital expenditures		(~~951~~973,000	)		(~~763~~319,000	)
Cash used in investing activities		(~~951~~973,000	)		(~~763~~319,000	)
Net increase in cash and cash equivalents		210,~~392~~144,000			1114,~~749~~490,000
Cash and cash equivalents at:
Beginning of period		2526,~~482~~587,000			1725,~~031~~482,000
End of period	$	2736,~~874~~731,000		$	2839,~~780~~972,000
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	370,000		$	361,000
Income taxes paid	$	2,826,000		$	6,210,000

See accompanying Notes to Condensed Consolidated Financial Statements

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GENCOR INDUSTRIES, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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 notes 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 quarter ended December 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026.

The accompanying condensed consolidated balance sheet at September 30, ~~2024~~2025 has been derived from the audited consolidated 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.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form

10-K

for the fiscal year ended September 30, 2025 filed with the Securities and Exchange Commission on December 9, 2025.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2023-07,

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

2023-07”)

2023-07

2023-09,

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

(“ASU

2023-09”),

to enhance transparency into income tax disclosures. The amendments require annual disclosure of certain information relating to the rate reconciliation, income taxes paid by jurisdiction, income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign jurisdictions. The amendments also eliminate certain requirements relating to unrecognized tax benefits and certain deferred tax disclosure relating to subsidiaries and corporate joint ventures. ASU

2023-09

is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company is currently evaluating the impact of ASU

2023-09

on its condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU

2024-03,

Income Statement - Reporting Comprehensive Income - Expense Disaggregation

Disclosures

(“ASU

~~(“ASU~~ 2024-03”),

which requires entities to (i) disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of

oil-and

gas-producing

activities, (ii) include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles

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(“GAAP”) in the same disclosures as other disaggregation requirements, (iii) disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and (iv) disclose the total amount of selling expenses, in annual reporting periods, and an entity’s definition of selling expense. ASU

2024-03 is

effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU

2024-03 on

its condensed consolidated financial statements and related disclosures.

No other accounting pronouncements recently issued or newly effective have had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements.

Global, market and economic conditions may negatively impact our business, financial condition and share price

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~~Sanctions ~~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~~Prolonged ~~increased cost of oil, along with increased or prolonged~~ periods of inflation, would likely increase our costs in the form of higher ~~inflation~~wages, onand increased cost of supplies and equipment necessary to operate our business. Additionally, ~~the~~conflicts ~~armed~~and/or ~~conflict~~tensions involving ~~Hamas~~Russia, ~~and Israel~~Ukraine, ~~as well as further escalation of tensions among~~ Israel, the U.S., Greenland, and various countries in ~~the~~South ~~Middle East~~America, ~~including~~Europe ~~hostilities involving Iran,~~ and ~~North~~the ~~Africa~~Middle East, 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.

Reclassifications

Certain amounts in the June 30, 2024 condensed consolidated statement of cash flows have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported net income for the quarter and nine months ended June 30, 2024.

Note 2 - Marketable Securities and Fair Value Measurements

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 income statements. Net changes in unrealized gains and losses are reported in the condensed consolidated income statements in the periods presented.

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 (stocks), 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, and 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 are provided by the Company’s professional investment management firms. From time to time the Company may transfer cash between its marketable securities portfolio and operating cash and cash equivalents.

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The ~~following~~fair ~~table~~value ~~sets~~of ~~forth~~marketable equity securities (stocks), bymutual ~~level~~funds, ~~within~~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, and 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 ~~fair~~issuer ~~value~~or ~~hierarchy~~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 are provided by the Company’s professional investment management firms. From time to time the Company may transfer cash between its marketable securities ~~measured~~portfolio atand ~~fair~~operating ~~value~~cash asand ofcash ~~June 30,~~equivalents. ~~2025:~~

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Equities	$	3,018,000	$	—	$	—	$	3,018,000
Exchange-Traded Funds		7,856,000		—		—		7,856,000
Mutual Funds		4,010,000		—		—		4,010,000
Corporate Bonds		—		30,871,000		—		30,871,000
Government Securities		62,134,000		—		—		62,134,000
Cash and Money Funds		208,000		—		—		208,000
Total	$	77,226,000	$	30,871,000	$	—	$	108,097,000

The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of December 31, 2025:

Net unrealized gains included in the condensed consolidated income statements for the


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Equities	$	5,292,000	$	—	$	—	$	5,292,000
Mutual funds		3,087,000		—		—		3,087,000
Exchange-Traded Funds		11,448,000		—		—		11,448,000
Corporate Bonds		—		30,791,000		—		30,791,000
Government Securities		59,972,000		—		—		59,972,000
Cash and Money Funds		413,000		—		—		413,000

Total	$	80,212,000	$	30,791,000	$	—	$	111,003,000

~~The~~Net ~~following~~unrealized ~~table~~gains ~~sets~~recognized ~~forth~~during ~~by level, within~~ the ~~fair~~quarter ~~value~~ended ~~hierarchy~~December 31, ~~the~~2025 ~~Company’s~~on ~~assets~~trading ~~measured~~securities atstill ~~fair~~held ~~value~~ as of ~~September~~December 3031, ~~2024:~~2025 were $169,000.

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Exchange-Traded Funds	$	3,686,000	$	—	$	—	$	3,686,000
Corporate Bonds		—		34,294,000		—		34,294,000
Government Securities		50,111,000		—		—		50,111,000
Cash and Money Funds		1,836,000		—		—		1,836,000
Total	$	55,633,000	$	34,294,000	$	—	$	89,927,000

The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2025:

Net unrealized gains included in the condensed consolidated income statements for the quarter and nine months ended June 30, 2024, were $195,000 and $1,346,000, respectively.


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Equities	$	4,766,000	$	—	$	—	$	4,766,000
Mutual funds		2,098,000		—		—		2,098,000
Exchange-Traded Funds		8,542,000		—		—		8,542,000
Corporate Bonds		—		31,587,000		—		31,587,000
Government Securities		62,462,000		—		—		62,462,000
Cash and Money Funds		259,000		—		—		259,000

Total	$	78,127,000	$	31,587,000	$	—	$	109,714,000

Net unrealized losses recognized during the quarter ended December 31, 2024 on trading securities still held as of December 31, 2024 were $(567,000).

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, customer deposits and accrued expenses approximate fair value because of the short-term nature of these items.

Note 3 – Inventories

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,

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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 on

trade-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.

10Net inventories at December 31, 2025 and September 30, 2025 consist of the following:

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	December 31, 2025		September 30, 2025
Raw materials	$	27,084,000	$	28,010,000
Work in process		12,820,000		11,731,000
Finished goods		13,345,000		13,762,000

	$	53,249,000	$	53,503,000

Slow-moving and obsolete inventory reserves were $15,843,000 and $15,569,000

~~Net inventories~~ at ~~June~~December 3031, 2025 and September 30, ~~2024~~2025, ~~consist~~respectively. ofDuring the ~~following:~~quarter ended December 31, 2025, the increase in the slow-moving and obsolete inventory allowances of $

274,000

	June 30, 2025		September 30, 2024
Raw materials	$	29,303,000	$	32,631,000
Work in process		11,036,000		18,740,000
Finished goods		12,533,000		12,391,000
	$	52,872,000	$	63,762,000

was due to charges to cost of goods sold to reduce the cost basis of inventories consistent with the Company’s policy on allowances for slow-moving and obsolete inventory. During the quarter ended December 31, 2024, the slow-moving and obsolete inventory allowances increased

~~Slow-moving and obsolete inventory allowances were~~ $14,968,000 and $13,331,000 at June 30, 2025 and September 30, 2024, respectively. The increase in the slow-moving and obsolete inventory allowances of $1,637,000 from September 30, 2024, reflects primarily additional amounts charged to cost of sales to reduce the cost basis of inventories consistent with the Company’s policy on allowances for slow-moving and obsolete inventory. During the nine months ended June 30, 2024, the slow-moving and obsolete inventory allowances increased $1,809,000.

359,000

~~Note 4 – Contract Assets~~ .

~~Contract~~Note ~~assets~~4 ~~reflect~~– ~~costs~~Contract ~~and~~Assets ~~estimated earnings in excess of billings on uncompleted contracts as of June 30, 2025~~ and ~~September 30,~~Liabilities ~~2024, and consist of the following:~~

	June 30, 2025		September 30, 2024
Costs incurred on uncompleted contracts	$	12,625,000	$	14,508,000
Estimated earnings		4,244,000		6,977,000
		16,869,000		21,485,000
Billings to date		4,643,000		12,146,000
Contract assets	$	12,226,000	$	9,339,000

Contract assets reflect costs and estimated earnings in excess of billings on uncompleted contracts as of December 31, 2025 and September 30, 2025, and consist of the following:

Common Share Data


	December 31, 2025		September 30, 2025
Costs incurred on uncompleted contracts	$	9,210,000	$	17,360,000
Estimated earnings		3,157,000		5,926,000

		12,367,000		23,286,000
Billings to date		7,276,000		11,078,000

Contract assets	$	5,091,000	$	12,208,000

~~The~~Note ~~condensed~~5 ~~consolidated~~– ~~financial~~Net ~~statements~~Income ~~include basic and diluted net income~~ per ~~common~~Share share information. The weighted-average number of shares outstanding includes both common stock and Class B common stock. The following table sets forth the computation of basic and diluted net income per common share for the quarters and nine months ended June 30, 2025 and 2024:

	Quarter Ended June 30,				Nine Months Ended June 30,
	2025		2024		2025		2024
Net income	$	3,828,000	$	2,558,000	$	13,740,000	$	13,106,000
Weighted average common shares outstanding:
Basic and diluted		14,658,000		14,658,000		14,658,000		14,658,000
Net income per common share – basic and diluted	$	0.26	$	0.17	$	0.94	$	0.89

The following table sets forth the computation of basic and diluted net income per common share for the quarters ended December 31, 2025 and 2024:

Basic net income per common share is based on the weighted-average number of shares outstanding. Diluted net income per common share is based on the sum of the weighted-average number of shares outstanding plus common stock equivalents. There were no equity compensation plans and arrangements previously approved by security holders as of June 30, 2025 and 2024 and thus no common stock equivalents as of June 30, 2025 and 2024.


	Quarter Ended December 31,
	2025		2024
Net Income	$	3,442,000	$	3,817,000
Weighted average common shares outstanding – basic and diluted		14,658,000		14,658,000

Net income per common share – basic and diluted	$	0.23	$	0.26

~~Note~~Basic 6net –income ~~Customers~~per ~~with~~common ~~10%~~share ~~(or~~is ~~greater)~~based on the weighted-average number of ~~Net~~shares ~~Revenues~~outstanding. Diluted net income per common share is based on the sum of the weighted-average number of shares outstanding plus common stock equivalents. The weighted-average number of shares outstanding includes both common stock and Class B common stock. There were no equity compensation plans and arrangements previously approved by security holders as of December 31, 2025 and 2024 and thus no common stock equivalents as of December 31, 2025 and 2024.

During the quarter ended June 30, 2025, one customer accounted for 17.7% of net revenue. During the nine months ended June 30, 2025, a different customer accounted for 11.2% of net revenue.

During the quarter ended June 30, 2024, three customers accounted for 20.0%, 11.9% and 11.5%, respectively, of net revenue. During the nine months ended June 30, 2024, no customer accounted for 10% or more of net revenue.

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Note 6 – Customers with 10% (or greater) of Net Revenues

For the quarter ended December 31, 2025, three customers accounted for

11.5

10.9

% and

10.6

% of net revenues, respectively.

For the quarter ended December 31, 2024, two customers accounted for

26.8% and 10.8% of net revenues, respectively.

Note 7 – Income Taxes

Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and primarily consist of taxes currently due, plus deferred taxes.

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns using current tax rates. The Company and its domestic subsidiaries file a consolidated federal income tax return.

Deferred tax assets and liabilities are measured using the rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse and the credits are expected to be used. The effect on deferred tax assets and liabilities of the change in tax rates is recognized in income in the period that includes the enactment date. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, the Company is more likely than not to realize the benefit of a deferred tax asset and whether a valuation allowance is needed for some portion or all of a deferred tax asset. No such valuation allowances were recorded as of ~~June~~December 3031, 2025 and September 30, ~~2024~~2025.

Significant judgment is required in evaluating the Company’s uncertain tax positions and determining the Company’s provision for taxes. Although the Company believes the reserves of unrecognized tax benefits (“UTBs”) are reasonable, no assurance can be given that the final outcome of these matters will not be different from that which is reflected in the Company’s historical income tax provision and accruals. The Company adjusts these reserves in light of changing facts and circumstances. As of December 31, 2025 and September 30, 2025, the Company had UTBs of $

2,122,000 and $1,983,000, respectively.

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

book income) from period to period. The Company’s effective tax rates for the quarters ended December 31, 2025 and 2024 reflect the impact of the reduced rates under the U.S. Tax Cuts and Jobs Act which was signed into law on December 22, 2017.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented after. The legislation did not have a material impact on our fiscal 2025 effective tax rate or consolidated financial statements and is not expected to have a material impact in fiscal 2026. We continue to review the OBBBA tax provisions to assess impacts to the condensed consolidated financial statements.

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Note 8 – Revenue Recognition and Related Costs

The Company recognizes revenue under ASU

No. 2014-09,

Revenue from Contracts with Customers

(Topic 606). The following table disaggregates the Company’s net revenue by major source for the quarters ended December 31, 2025 and 2024:

Quarter Ended June 30,

Nine Months Ended June 30,

Quarter Ended December 31,

2025

2024

~~2025~~

~~2024~~

Equipment sales recognized over time

109,~~420~~295,000

1116,~~624~~831,000

~~41,367,000~~

~~33,837,000~~

Equipment sales recognized at a point in time

85,~~583~~904,000

67,~~958~~588,000

~~28,292,000~~

~~31,533,000~~

Parts and component sales

6,~~109~~746,000

56,~~208~~151,000

~~21,134,000~~

~~21,595,000~~

Freight revenue

1,~~652~~574,000

1745,~~597,~~000

~~4,986,000~~

~~4,494,000~~

Other

~~222~~58,000

~~164~~101,000

~~827,000~~

~~786,000~~

Net revenue

2623,~~986~~577,000

2531,~~551~~416,000

~~96,606,000~~

~~92,245,000~~

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.

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 $5,091,000 and $12,208,000 at December 31, 2025 and September 30, 2025, respectively, and are included in current assets on the Company’s condensed consolidated balance sheets. The Company anticipates that all of the contract assets at December 31, 2025 will be billed and collected within one year.

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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.

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 services are completed. Accounts receivable related to contracts with customers for equipment sales ~~recognized at a point in time~~ were $~~426~~101,000 and $~~163~~80,000 at ~~June~~December 3031, 2025 and September 30, ~~2024~~2025, respectively.

Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized.

~~Under~~Provisions ~~certain~~for ~~contracts~~estimated ~~with~~returns ~~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~~allowances, ~~such~~and ~~as to provide installation assistance. There were no contract liabilities~~ other ~~than~~adjustments ~~customer~~are ~~deposits~~provided atfor ~~June 30,~~in ~~2025~~the ~~and~~same ~~September 30,~~period ~~2024.~~the ~~Customer deposits~~ related tosales ~~contracts~~are ~~with~~recorded. ~~customers~~Returns ~~were $2,427,000~~ and $5allowances,~~018,000~~ atwhich ~~June 30,~~reduce ~~2025~~product ~~and September 30~~revenue, ~~2024, respectively, and~~ are ~~included~~estimated inusing ~~current~~historical ~~liabilities on the Company’s condensed consolidated balance sheets~~experience.

~~The~~Under ~~Company~~certain ~~records~~contracts ~~revenues~~with ~~earned~~customers, ~~for~~recognition ~~shipping~~of a portion of the consideration received may be deferred and ~~handling~~recorded as ~~freight~~a ~~revenue~~contract atliability if the ~~time~~Company ofhas ~~shipment~~to satisfy a future obligation, ~~regardless~~such ofas ~~whether~~to orprovide ~~not~~installation itassistance. isThere ~~identified~~were asno acontract ~~separate~~liabilities ~~performance~~other ~~obligation.~~than customer deposits at December ~~The~~31, ~~cost~~2025 ofand ~~shipping~~September 30, 2025. Customer deposits related to contracts with customers were $6,022,000 and ~~handling~~$3,889,000 isat ~~classified~~December 31, as2025 ~~cost~~and ofSeptember 30, ~~goods~~2025, ~~sold~~respectively, ~~concurrently~~and ~~with~~are included in current liabilities on the ~~revenue~~Company’s ~~recognition~~condensed consolidated balance sheets.

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.

less-than-90-day

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~~Changes~~The inCompany ~~the~~records ~~allowance~~revenues earned for ~~credit~~shipping ~~losses~~and handling as freight revenue at the time of ~~June 30,~~shipment. ~~2025~~The ~~consisted~~cost of shipping and handling is recorded as cost of goods sold concurrently with the ~~following:~~revenue recognition.

Balance, September 30, 2024	$	390,000
Provision for credit losses		—
Provision for estimated returns and allowances		395,000
Uncollectible accounts written off		(12,000	)
Returns and allowances issued		(293,000	)
Balance, June 30, 2025	$	480,000

less-than-90-day

past due aging category. 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.

Changes in the allowance for credit losses for the quarters ended December 31, 2025 and December 31, 2024 consisted of the following:


	December 31, 2025			December 31, 2024
Balance, beginning of quarter	$	434,000		$	390,000
Provision for credit losses		95,000			—
Provision for estimated returns and allowances		45,000			160,000
Uncollectible accounts written off		—			(13,000	)
Returns and allowances issued		(76,000	)		(112,000	)

Balance, end of quarter	$	498,000		$	425,000

Note 9 – Leases

The Company leases certain equipment under

non-cancelable

operating leases. Future minimum rental payments under these leases at December 31, 2025 were immaterial.

On August 28, 2020, the Company entered into a three-year operating lease for property related to manufacturing and warehousing. The lease term was for the period beginning on September 1, 2020 through August 31, 2023. In accordance with ASU

2016-02,

Leases (Topic 842),

(“ASU

2016-02”)

the Company recorded a

right-of-use

(“ROU”) asset totaling $970,000 and related lease liabilities at inception. In March 2023, the Company extended the lease term through August 31, 2024. In accordance with ASU

2016-02,

the Company recorded a ROU asset totaling $352,000 and related lease liabilities upon extension. In March 2024, the Company extended the lease term through August 31, 2025. In accordance with ASU

2016-02,

the Company recorded a ROU asset totaling $361,000 and related lease liabilities upon extension. In March 2025, the Company extended the lease term through August 31, 2026. In accordance with ASU

2016-02,

the Company recorded a ROU asset totaling $370,000 and related lease liabilities upon extension.

For the quarter ~~and nine months~~ ended ~~June~~December 3031, 2025, operating lease costs ~~were $112,000~~ and ~~$305,000, respectively, and~~ cash payments related to these operating leases were $~~112~~115,000 ~~and $336,000, respectively~~. For the quarter ~~and nine months~~ ended ~~June~~December 3031, 2024, operating lease costs related to these operating leases were $112,000 and cash payments related to these operating leases were $~~109~~81,000 ~~and $328,000, respectively~~.

Other information concerning the Company’s operating leases accounted for under ASC 842 guidelines as of June 30, 2025 and September 30, 2024, is as follows:

	June 30, 2025			September 30, 2024
Operating lease ROU asset included in other long-term assets	$	432,000		$	330,000
Current operating lease liability		369,000			330,000
Non-current operating lease liability		63,000			—
Weighted average remaining lease term (in years)		0.67			0.92
Weighted average discount rate used in calculating ROU asset		4.8	%		5.0	%

Future annual minimum lease payments as of June 30, 2025 are as follows:

Fiscal Year	Annual Lease Payments
2025 (remaining 3 months)	$	93,000
2026		347,000
Total		440,000
Less interest		(8,000	)
Present value of lease liabilities	$	432,000

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Other information concerning the Company’s operating lease accounted for under Accounting Standards Codification (“ASC”) 842 guidelines as of December 31, 2025 and September 30, 2025, is as follows:


	December 31, 2025			September 30, 2025
Operating lease ROU asset included in other long-term assets	$	248,000		$	339,000
Current operating lease liability	$	248,000		$	339,000
Weighted average remaining lease term (in years)		0.67			0.92
Weighted average discount rate used in calculating ROU asset		4.5	%		4.5	%

Future annual minimum lease payments as of December 31, 2025 are as follows:


Fiscal Year	Annual Lease Payments
2026	$	252,000
Less interest		(4,000	)

Present value of lease liabilities	$	248,000

Note 10 – Segment Information

The Company has one

reporting segment, equipment for the highway construction industry. Based on evaluation of the criteria of ASC Topic 280, including the nature of products and services, the nature of the production processes, the type of customers and the methods used to distribute products and services, the Company determined that its operating segments meet the requirements for aggregation. The chief operating decision maker (“CODM”), who is the Company’s President and Chairman of the Board, measures financial performance as a single enterprise and allocates resources across the Company to maximize profitability, and not on a geographic, legal entity, or end market basis. The Company designs, manufactures and sells asphalt plants and pavers, combustion systems and fluid heat transfer systems, for the highway construction industry and environmental and petrochemical markets. The Company’s products are manufactured at three facilities in the United States. The Company also services and sells spare parts for its equipment.

The key measure of segment profitability that the CODM uses to allocate resources and assess performance is consolidated net income, as reported on the condensed consolidated income statements. The CODM utilizes consolidated net income, as well as net revenues and gross profit, and compares actual results to forecasted amounts. These segment (and consolidated) measures of profitability are shown in the condensed consolidated income statements.

Asset information provided to the CODM is consistent with that reported on the condensed consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash and cash equivalents, marketable securities and inventory, reduced by current liabilities. Net revenue is attributed to geographic areas based on the final destination of products shipped.

As of December 31, 2025 and September 30, 2025, total long-term assets of $16,422,000 and $16,055,000, respectively, were attributed to the United States. Net revenue by geographic location for the quarters ended December 31, 2025 and December 31, 2024 is as follows:


	Quarters Ended December 31,
	2025		2024
United States	$	22,677,000	$	29,991,000
Canada		810,000		1,391,000
All other foreign countries		90,000		34,000

Net revenue	$	23,577,000	$	31,416,000

Note 11 – Subsequent Events

The Company has evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued for potential recognition and disclosure. The Company did not identify any subsequent events that would have required adjustment to or disclosure in the condensed consolidated financial statements.

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

Forward-Looking Information

This Quarterly Report contains certain “forward-looking statements” within the meaning of 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 litigation. 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 the financial condition of the Company’s customers, changes in the economic and competitive environments, the performance of the investment portfolio and the demand for the Company’s products.

For information concerning these factors and related matters, see the following sections of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2024~~2025: (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.

Overview

Gencor is a leading manufacturer of heavy machinery used in the production of highway construction equipment and materials and environmental control equipment. The Company’s core products include asphalt pavers, hot mix asphalt plants, combustion systems, ~~and~~ fluid heat transfer systems, and asphalt pavers. The Company’s products are manufactured at three facilities in the United States.

Because the Company’s products are sold primarily to the highway construction industry, the business is seasonal in nature. Traditionally, the Company’s customers reduce their purchases of new equipment for shipment during the summer and fall months to avoid disrupting their peak season for highway construction and related repair work. The majority of orders for the Company’s products are thus received between October and February, with a significant volume of shipments occurring in the late winter and spring. The principal factors driving demand for the Company’s products are the overall economic conditions, the level of government funding for domestic highway construction and repair, Canadian infrastructure spending, the need for spare parts, fluctuations in the price of liquid asphalt, and a trend towards larger more efficient asphalt plants.

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~~The IIJ Act is scheduled to expire on September 30, 2026.

Fluctuations in the price of carbon steel, which is a significant cost and material used in the manufacturing of the Company’s equipment, may affect the Company’s financial performance. The Company is subject to fluctuations in market prices for raw materials, such as copper and steel. If the Company is unable to purchase materials it requires or is unable to pass on price increases to its customers or otherwise reduce its cost of goods sold, its ~~business~~ results of operations and financial condition may be adversely affected.

~~Also,~~The aCompany ~~significant~~monitors ~~increase in~~ the ~~price~~prices ofit ~~liquid~~charges ~~asphalt could decrease demand~~ for ~~hot~~its ~~mix asphalt paving materials and certain of the Company’s~~ products. ~~Increases in oil prices also drive up the cost of gasoline~~ and ~~diesel,~~services ~~which results in increased freight costs. Where possible, the Company will pass increased freight costs~~ on toan ~~its~~ongoing ~~customers;~~basis ~~however,~~and ~~the~~has ~~Company~~historically ~~may~~been ~~not be~~ able to ~~recapture~~adjust ~~all~~its ofprices ~~the~~to ~~higher~~take ~~costs~~into ~~and~~account ~~thus~~changes ~~could~~in ~~have a negative impact on~~ the ~~Company’s~~rate ~~financial~~of ~~performance~~inflation.

~~The~~Also, ~~Company~~a ~~believes~~significant ~~its~~increase ~~strategy of continuing to invest~~ in ~~product~~the ~~engineering~~price ~~and~~of ~~development~~liquid ~~and~~asphalt ~~its~~could ~~focus~~decrease ondemand ~~delivering~~for ~~the~~hot ~~highest~~mix ~~quality~~asphalt ~~products~~paving materials and ~~superior~~certain ~~service~~of ~~will strengthen~~ the Company’s ~~market position~~products. ~~The~~Increases ~~Company~~in ~~continues~~oil toprices ~~review~~also ~~its~~drive ~~internal~~up ~~processes~~the tocost ~~identify~~of ~~inefficiencies~~gasoline and ~~cost-reduction~~diesel, ~~opportunities~~which results in increased freight costs. ~~The~~Where possible, the Company will ~~continue~~pass toincreased ~~scrutinize~~freight costs on to its ~~relationships~~customers. ~~with~~However, ~~suppliers~~the toCompany ~~ensure~~may itnot isbe ~~achieving~~able to recapture all of the ~~highest~~higher ~~quality~~costs, ~~materials~~which ~~and~~could ~~services~~have ata negative impact on the ~~most~~Company’s ~~competitive~~financial ~~cost~~performance.

~~Concerns~~We ~~over~~manufacture ~~inflation,~~our ~~geopolitical~~equipment ~~issues~~domestically ~~and~~with ~~global~~a ~~financial~~fraction ~~markets have led to increased economic instability and expectations~~ of ~~slower~~our ~~global~~sales ~~economic~~exported ~~growth.~~to ~~Our~~neighboring ~~business may be adversely affected by any such economic instability or unpredictability~~countries. ~~Russia’s~~The ~~invasion~~current ~~of Ukraine and related sanctions as well as the conflict between Israel and Iran have led to increased energy prices~~U.S. ~~Such~~administration ~~sanctions~~has ~~and~~implemented ~~disruptions~~tariffs toon ~~the~~countries ~~global economy may lead~~ to ~~additional~~which ~~inflation and may disrupt~~ the ~~global~~Company ~~supply~~has ~~chain~~sales and ~~could~~has ~~have~~threatened atariffs ~~material adverse effect~~ on ~~our~~a ~~ability~~variety toof ~~secure~~other ~~supplies~~counties. ~~The increased cost of oil~~Also, ~~along~~some ~~with increased or prolonged periods~~ of ~~inflation, would likely increase our costs in~~ the ~~form~~parts ofwe ~~higher~~procure ~~inflation~~are onsourced ~~supplies~~from ~~necessary~~countries subject to ~~operate our business. Additionally,~~ the ~~armed~~recent ~~conflict involving Hamas and Israel, as well as further escalation of tensions among Israel, the U~~tariffs.~~S.,~~ It ~~and~~is ~~various~~not ~~countries~~known inwhether ~~the~~any ~~Middle~~additional ~~East, including hostilities involving Iran, and North Africa, may cause increased inflation in energy and logistics~~ costs ~~and~~will ~~could~~be ~~further~~passed ~~cause~~onto ~~general economic conditions in the U~~customers.S. orIf ~~abroad~~we tocannot ~~deteriorate.~~pass ~~There~~additional iscosts aonto ~~risk~~customers, ~~that~~then ~~one~~this ~~or more of our suppliers~~ could be negatively ~~affected by global economic instability, which could adversely~~ affect our ~~ability~~revenues, tocash ~~operate~~flows, ~~efficiently~~ and ~~timely~~financial ~~complete our operational goals~~position. ~~As of the date of this Quarterly Report, the Company’s operations have not been significantly impacted.~~

The Company believes its strategy of continuing to invest in product engineering and development and its focus on delivering the highest quality products and superior service will strengthen the Company’s market position. The Company continues to review its internal processes to identify inefficiencies and cost-reduction opportunities. The Company will continue to scrutinize its relationships with suppliers to ensure it is achieving the highest quality materials and services at the most competitive cost.

Concerns over inflation, geopolitical issues and global financial markets have led to increased economic instability and expectations of slower economic growth. Our business may be adversely affected by any such economic instability or unpredictability. 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. Prolonged periods of inflation would likely increase our costs in the form of higher wages, and increased cost of supplies and equipment necessary to operate our business. Additionally, conflicts and/or tensions involving Russia, Ukraine, Israel, the U.S., Greenland, and various countries in South America, Europe and the Middle East, 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.

Results of Operations

Quarter Ended ~~June~~December 3031, 2025 versus ~~June~~December 3031, 2024

Net ~~revenue~~revenues for the quarter ended ~~June~~December 3031, 2025 ~~increased~~of $123,~~435~~577,000 decreased $7,839,000 or 525.60%, toas ~~$26,986,000,~~compared ~~from~~to ~~$25,551,000~~net revenues for the quarter ended ~~June~~December 3031, 2024 of $31,416,000. Lower revenues from contract equipment sales were partially offset by higher parts and component sales and freight revenue. The ~~increase~~decrease in ~~revenues~~contract ~~was~~equipment ~~primarily~~sales was due primarily to ~~higher~~uncertainty ~~equipment~~around ~~sales~~replacement ~~recognized~~of atthe acurrent ~~point~~Federal ininfrastructure ~~time,~~spending ~~increased~~bill ~~parts~~which ~~and~~is ~~component~~scheduled ~~sales~~to ~~and~~expire ~~freight~~on ~~revenues~~September 30, 2026.

As a percent of sales, gross profit margins increased to 2628.57% in the quarter ended ~~June~~December 3031, 2025, compared to 2327.96% in the quarter ended ~~June~~December 3031, 2024,. ~~from~~The slightly improved ~~profitability~~margins onwere ~~certain~~driven ~~contract~~by ~~sales~~the ~~and~~ increased parts and components sales which have a higher margin percentage compared to ~~other~~contract ~~sources~~equipment ~~of revenue~~sales.

Product engineering and development expenses ~~decreased~~increased by $8381,000 to $~~741~~758,000 for the quarter ended ~~June~~December 3031, 2025, as compared to $~~824~~677,000 for the quarter ended ~~June~~December 3031, 2024 ~~due to lower headcount~~. Selling, general and administrative (“SG&A”) expenses decreased by $25471,000 to $32,~~265~~896,000 for the quarter ended ~~June~~December 3031, 2025, compared to $3,~~290~~367,000 for the quarter ended ~~June~~December 3031, 2024. The decrease in SG&A expenses was due to reduced salesmen commissions on lower net revenues and a decrease in professional fees.

~~Operating~~The ~~income~~Company ~~increased~~had ~~from~~operating income of $13,~~993~~101,000 for the quarter ended ~~June~~December 3031, ~~2024~~2025 as compared to $34,~~137~~624,000 for the quarter ended ~~June~~December 3031, ~~2025,~~2024. The decrease in operating income was due primarily to ~~higher~~lower net ~~revenue~~revenues ~~and~~for ~~improved~~the ~~gross~~quarter ~~profit~~ended ~~margins~~December 31, 2025.

For the quarter ended ~~June~~December 3031, 2025, the Company had net other income of $21,~~036~~550,000 compared to $1534,~~329,~~000 for the quarter ended ~~June~~December 3031, 2024. ~~Interest~~Net interest and dividend income, ~~net of fees, was $1,142,000~~ for the quarter ended ~~June~~December 3031, 2025 aswas $1,177,000 compared to $~~966~~989,000 infor the quarter ended ~~June~~December 3031, 2024. The increase was primarily due to higher ~~interest~~ rates earned on ~~increased~~fixed ~~cash~~income ~~balances~~investments and ~~fixed~~on ~~income~~higher ~~investments.~~operating ~~The~~cash ~~net~~balances. Net realized and unrealized gains (losses) on marketable securities ~~were $894,000~~ for the quarter ended ~~June~~December 3031, 2025 were $373,000 compared to $~~363~~(455,000) for the quarter ended ~~June~~December 3031, 2024. Bond yields rose during the quarter ended December 31, 2024, due to ~~gains~~better ineconomic ~~fixed~~data ~~income~~ and ~~equity~~higher ininflation. The ~~investments~~higher yields negatively impacted the value of our bond holdings for the quarter ended December 31, 2024.

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.

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.

~~Nine~~The ~~Months~~effective ~~Ended~~income ~~June~~tax rate for both the quarters ended December 3031, 2025 ~~versus~~and ~~June~~December 3031, 2024 was 26.0%. Net income for the quarter ended December 31, 2025 was $3,442,000, or $0.23 per basic and diluted common share, compared to net income of $3,817,000, or $0.26 per basic and diluted common share, for the quarter ended December 31, 2024.

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.

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.

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.

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.

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.

Liquidity and Capital Resources

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.

The Company had no long-term or short-term debt outstanding atas ~~June~~of December 3031, 2025 or September 30, ~~2024~~2025. 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 inon ~~April~~February 25, 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.

As of ~~June~~December 3031, 2025, the Company had $2736,~~874~~731,000 in cash and cash equivalents, and $~~108~~111,~~097~~003,000 in marketable securities, including $35,~~018~~292,000 in equities, $30,~~871~~791,000 in corporate bonds, $711,~~856~~448,000 in exchange-traded funds, $459,~~010~~972,000 in ~~mutual~~government ~~funds~~securities, $623,~~134~~087,000 in ~~government~~mutual ~~securities,~~funds and $~~208~~413,000 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.

The Company’s backlog was $2657.24 million at ~~June~~December 3031, 2025 compared to $4654.64 million at ~~June~~December 3031, 2024. The Company’s working capital (defined as current assets less current liabilities) was $~~197~~200.19 million at ~~June~~December 3031, 2025 and $~~182~~197.27 million at September 30, ~~2024~~2025. Cash flows provided by ~~operating~~operations ~~activities~~ during the ~~nine~~quarter ~~months~~ ended ~~June~~December 3031, 2025, were $311,~~343~~117,000. ~~Accounts~~Contract ~~receivable~~assets ~~increased~~decreased $17,~~177~~117,000 ~~during~~with the ~~nine~~completion ~~months~~and ~~ended~~shipment ~~June 30,~~of ~~2025~~several contract equipment plant sales where revenue is recognized over time. Marketable securities increased $1,289,000 due to ~~the~~net ~~increase~~unrealized ingains ~~parts~~of $169,000, and ~~component~~net ~~sales~~realized ingains ~~the~~and ~~quarter~~interest ~~ended~~earned ~~June 30~~on corporate bonds and U.S. treasuries of $1,120,000. ~~2025~~Prepaid expenses increased $1,520,000 ~~compared~~reflecting prepayments of insurance premiums to ~~parts~~be amortized over fiscal 2026 and ~~component~~prepayments ~~sales~~of inexpenses related to the ~~quarter~~March ~~ended~~2026 ~~September 30,~~ConExpo-Con/Agg ~~2024~~international construction trade show. ~~Contract~~Customer ~~assets~~deposits increased $2,~~887~~133,000 ~~during~~reflecting ~~the~~progress ~~nine~~payments ~~months~~on ~~ended~~contract ~~June~~equipment ~~30,~~sales ~~2025,~~where ~~with~~revenues ~~the~~are ~~timing~~recognized ofat ~~inventory~~a ~~build~~point ~~and~~in ~~percentage~~time ofthat ~~completion~~have ~~recognition~~not onyet ~~sales~~shipped. ~~where~~

18Cash flows used in investing activities for the quarter ended December 31, 2025 of $973,000 were related to capital expenditures, primarily for building additions and improvements, and handling equipment.

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.

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.

Seasonality

The Company’s primary business is the manufacture of asphalt ~~pavers, asphalt~~ plants and related components and asphalt pavers. 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.

Critical Accounting Policies, Estimates and Assumptions

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 fiscal year ended September 30, ~~2024~~2025, “Nature of Operations and Summary of Significant Accounting Policies.” There were no material changes into the ~~Company’s~~ accounting policies during the ~~nine~~quarter ~~months~~ ended ~~June 30~~December 31, 2025.

Estimates and Assumptions

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.

Revenues & Expenses

The Company recognizes revenue under ASU ~~No.~~ 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.

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 $5,091,000 and $12,~~226~~208,000 at ~~June~~December 3031, 2025 and ~~$9,339,000 at~~ September 30, ~~2024~~2025, respectively, 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~~December 3031, 2025, will be billed and collected within one year.

Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized.

The Company records revenues earned for shipping and handling as freight revenue at the time of shipment. The cost of shipping and handling is recorded as cost of goods sold concurrently with the revenue recognition.

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 the less-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.

Inventories

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 on trade-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.

Marketable Securities and Fair Value Measurements

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 statements. Net unrealized gains and (losses) are reported in the condensed consolidated ~~statements of~~ income statements in the current period and represent the change in the fair value of investment holdings during the period.

Long-Lived Asset Impairment

Property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess over its fair value of the asset’s carrying value. Fair value is generally determined using a discounted cash flow analysis. There were no impairment losses in the quarters ~~and nine month periods~~ ended ~~June~~December 3031, 2025 and ~~June~~December 3031, 2024.

Off-Balance Sheet Arrangements

None.

2120

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s President (who is currently serving as the Company’s Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer) evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act) pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this Quarterly Report (~~June 30~~December 31, 2025). Based upon that evaluation, the President and the Chief Financial Officer concluded that, as of ~~June 30, 2025,~~ the end of the period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective at the reasonable assurance level solely as a result of the material weaknesses management identified in our internal control over financial reporting, as described in our Annual Report on Form 10-K for the year ended September 30, ~~2024~~2025.

Because of inherent limitations, the Company’s disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of such disclosure controls and procedures are met, and no evaluation can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Material Weaknesses in Internal Control over Financial Reporting

As previously reported in our Annual Report on Form 10-K for the year ended September 30, ~~2024~~2025, management identified the following material weaknesses in internal control over financial reporting as of September 30, ~~2024~~2025, which were not remediated as of ~~June~~December 3031, 2025:

• Ineffective information technology general controls (ITGCs), particularly as such controls related to user access, program change management, ~~security,~~ and ineffective complementary user-organization controls, which limited management’s ability to rely on technology-dependent controls relevant to the preparation of the Company’s condensed consolidated financial statements. As a result, information technology-dependent manual and automated controls that rely on the affected ITGCs, orwere also ineffective. The information from the information technology systems with affected ITGCs and the period end close process, including the review and approval process of journal entries, account reconciliations and segregation of duties were also ineffective.

• Ineffective design, implementation, and operation of controls over key third-party service provider System and Organizational Controls reports.

• Ineffective controls over the period end close process, including over the review and approval process of journal entries, account reconciliations, and segregation of duties.

• Inadequate documentation and design of controls related to various key financial statement accounts and assertions.

•

Inadequate risk assessment, control activities, information and communication, and monitoring components of the Company’s internal control framework such that internal control weaknesses were not detected, communicated, addressed with mitigating control activities, or remediated on a timely basis.

Management’s Plan of Remediation of Material Weaknesses

Management, with oversight by our Audit Committee, is actively engaged in the planning for, and implementation of, remediation efforts to address the ongoing material weaknesses ~~previously~~ described inabove ~~our Annual Report on Form 10-K for the year ended September 30, 2024~~ and to improve our internal control over financial reporting.

22In response to the material weaknesses discussed above, we plan to continue efforts already underway to remediate the material weaknesses in internal control over financial reporting, including the following:

In• ~~response~~We tohave ~~the~~engaged ~~material~~resources ~~weaknesses previously described, we plan~~ to ~~continue~~support ~~efforts~~our ~~already underway to remediate the material weaknesses in~~ internal control ~~over~~testing ~~financial~~and ~~reporting,~~remediation ~~including the following:~~ efforts.

• We are ~~in the process of~~ conducting a risk assessment over our internal control environment, and we are reviewing and prioritizing individual control deficiencies for remediation, including those which aggregated to the above material weaknesses.

• We ~~are~~continue into ~~the~~document ~~process of documenting~~ and ~~executing~~execute remediation action items, including expansion of mitigating controls where appropriate.

Management and our Audit Committee will monitor these specific remedial measures and the effectiveness of our overall control environment. The identified material weaknesses in internal control over financial reporting will only be considered remediated when the relevant controls have operated effectively for a sufficient period of time for management to conclude that they have been remediated. We can provide no assurance as to when the remediation of these material weaknesses will be completed.

Changes in Internal Control over Financial Reporting

The Company’s management, including the President and Chief Financial Officer, has reviewed the Company’s internal control over financial reporting. Except for the ~~remediation~~changes ~~efforts described above~~ in ~~connection~~the ~~with~~internal ~~the~~controls ~~previously~~to ~~identified~~remediate material weaknesses and other changes as part of our plans to improve our internal controls over financial reporting as discussed above, there were no changes in the Company’s internal control over financial reporting during the quarter ended ~~June~~December 3031, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, as noted above, we will be continuing to implement changes to our internal control over financial reporting to address the material weaknesses described above.

2322

Part II. Other Information

Item 1. Legal Proceedings

From time to time the Company is engaged in legal proceedings in the ordinary course of business. We do not believe any current legal proceedings are material to our business.

Item 1A. Risk Factors

Our business, operations, and financial condition are subject to various risks and uncertainties. The risk factors described in Part I, Item 1A, “Risk Factors” contained in our Annual Report on Form

10-K

for the year ended September 30, 2025, as filed with the Securities and Exchange Commission (the “SEC”) on December 9, 2025, should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form

10-Q

and in our other filings filed with the SEC in connection with evaluating us, our business, and the forward-looking statements contained in this Quarterly Report on Form

10-Q.

During the quarter ended December 31, 2025, there have been no material changes from the risk factors previously disclosed under Part I, Item 1A, “Risk Factors” in our Annual Report on Form

10-K,

for the year ended September 30, 2025.

Item 5. Other Information

Rule

10b5-1

Plan Adoptions, Modifications and Terminations

During the three months ended December 31, 2025,

~~quarter ended June 30, 2025~~no

ne of the Company’s directors or officers adopted, modified or terminated a Rule

none

10b5-1

trading arrangement or a

non-Rule

10b5-1

trading arrangement (each as defined in Item 408 of Regulation

S-K

under the Exchange Act).

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Item 6. Exhibits

Exhibit		Description
Exhibit 31.1		Certification of Principal Executive Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended
31.1		Certification of Principal Executive Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended
Exhibit 31.2		Certification of Chief Financial Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended
31.2		Certification of Chief Financial Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended
Exhibit 32		Certifications of Principal Executive Officer and Chief Financial Officer Pursuant to 18 U. S. C. Section 1350
32		Certifications of Principal Executive Officer and Chief Financial Officer Pursuant to 18 U. S. C. Section 1350
Exhibit 101.1		Interactive Data File
101.1		Interactive Data File
101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		XBRL Schema Document
101.CAL		XBRL Calculation Linkbase Document
101.DEF		XBRL Definition Linkbase Document
101.LAB		XBRL Label Linkbase Document
101.PRE		XBRL Presentation Linkbase Document
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~June~~December 3031, 2025, formatted in Inline XBRL (included in Exhibit 101)

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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. /s/ Marc G. Elliott Marc G. Elliott President and Chairman of the Board (Principal Executive Officer) ~~August~~February 86, ~~2025~~2026 /s/ Eric E. Mellen Eric E. Mellen Chief Financial Officer (Principal Financial and Accounting Officer) ~~August~~February 86, ~~2025~~2026

2625

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