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 MARCH 31, 2026

FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD: From to

Commission File Number:

001-11703

GENCOR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		59-0933147
(State or other jurisdictionof incorporation or organization)		(IRS EmployerIdentification No.)
(State or other jurisdiction ofincorporation 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 pursuant to Section 12(b) of

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

Act

Title of Each Class		~~Trading Symbol~~TradingSymbol(s)		Name of each ~~exchange~~exchangeon 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

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

~~non-accelerated~~☒ 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 outsta

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

ding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at ~~February~~June 510, 2026
Common stock, $.10 par value	12,338,845 shares	~~12,338,845 shares~~
Class B stock, $.10 par value	2,318,857 shares	~~2,318,857 shares~~

GENCOR INDUSTRIES, INC.

Index			Page
Part I.	Financial Information
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets – December 31, 2025 (Unaudited) and September 30, 2025		4
		Condensed Consolidated Balance Sheets – March 31, 2026 (Unaudited) and September 30, 2025		4
		Condensed Consolidated Income Statements – Quarters Ended December 31, 2025 and 2024 (Unaudited)		5
		Condensed Consolidated Income Statements – Quarters and Six Months Ended March 31, 2026 and 2025 (Unaudited)		5
		Condensed Consolidated Statements of Shareholders’ Equity – Quarters Ended December 31, 2025 and 2024 (Unaudited)		6
		Condensed Consolidated Statements of Shareholders’ Equity – Quarters and Six Months Ended March 31, 2026 and 2025 (Unaudited)		6
		Condensed Consolidated Statements of Cash Flows – Quarters Ended December 31, 2025 and 2024 (Unaudited)		7
		Condensed Consolidated Statements of Cash Flows – Six Months Ended March 31, 2026 and 2025 (Unaudited)		7
		Notes to Condensed Consolidated Financial Statements (Unaudited)		8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
	Item 3.	Quantitative and Qualitative Disclosures ~~About~~about Market Risk		21
	Item 4.	Controls and Procedures		21
Part II.	Other Information
	Item 1.	Legal Proceedings		23
	Item 1A.	Risk Factors		23
	Item 5.	Other Information		23
	Item 6.	Exhibits		24
Signatures				25

Introductory Note: 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 tariff announcements, (ii) the ongoing conflicts and/or tensions involving Russia, Ukraine, Israel, Iran, the U.S., ~~Greenland,~~ and various ~~countries~~other ~~in South America~~countries, ~~Europe~~ and ~~the Middle East, and~~ (iii) any actions taken by the U.S. or other countries in response to such tariff announcements, conflicts and/or 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, 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	December 31, 2025 (Unaudited)		September 30, 2025
	March 31, 2026 (Unaudited)		September 30, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	3643,~~731~~464,000	$	26,587,000
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
Marketable securities at fair value (cost of $109,533,000 at March 31, 2026 and $107,237,000 at September 30, 2025)		111,670,000		109,714,000
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
Accounts receivable, less allowance for credit losses of $529,000 at March 31, 2026 and $434,000 at September 30, 2025		3,932,000		3,130,000
Contract assets		57,~~091~~552,000		12,208,000
Inventories, net		5351,~~249~~071,000		53,503,000
Prepaid expenses		2,919,000		1,399,000
Prepaid expenses and other current assets		3,167,000		1,399,000
Total current assets		~~212~~220,~~491~~856,000		206,541,000
Property and equipment, net		11,~~510~~154,000		11,079,000
Deferred income taxes		4,~~611~~843,000		4,584,000
Other long-term assets		~~301~~209,000		392,000
Total Assets	$	~~228~~237,~~913~~062,000	$	222,596,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	14,~~991~~834,000	$	1,842,000
Customer deposits		67,~~022~~105,000		3,889,000
Accrued expenses		3,286,000		2,741,000
Contract liabilities		1,233,000		—
Current operating lease liabilities		248,000		339,000
Accrued expenses		2,282,000		2,741,000
Total current liabilities		11,547,000		8,811,000
Current operating lease liabilities		156,000		339,000
Unrecognized tax benefits		2,122,000		1,983,000
Total current liabilities		15,610,000		8,811,000
Total liabilities		13,669,000		10,794,000
Unrecognized tax benefits		2,365,000		1,983,000
Total liabilities		17,975,000		10,794,000
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 December 31, 2025 and September 30, 2025		1,234,000		1,234,000
Common stock, par value $.10 per share; 15,000,000 shares authorized; 12,339,000 shares issued and outstanding at March 31, 2026 and September 30, 2025		1,234,000		1,234,000
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
Class B Stock, par value $.10 per share; 6,000,000 shares authorized; 2,319,000 shares issued and outstanding at March 31, 2026 and September 30, 2025		232,000		232,000
Capital in excess of par value		12,590,000		12,590,000
Retained earnings		~~201~~205,~~188~~031,000		197,746,000
Total shareholders’ equity		~~215~~219,~~244~~087,000		211,802,000
Total Liabilities and Shareholders’ Equity	$	~~228~~237,~~913~~062,000	$	222,596,000

See accom

~~See accompanying Notes to Condensed Consolidated Financial Statements~~ panying

Notes to Con

den

sed Consolidated Financial Statements

Table of Contents

GENCOR INDUSTRIES, INC.Condensed Consolidated Income StatementsFor 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

GENCOR INDUSTRIES, INC.

Condensed Consolidated Income Statements

(Unaudited)


	For the Quarters Ended March 31,					For the Six Months Ended March 31,
	2026			2025		2026		2025
Net revenue	$	33,799,000		$	38,204,000	$	57,376,000	$	69,620,000
Cost of goods sold		23,091,000			26,851,000		39,913,000		49,599,000

Gross profit		10,708,000			11,353,000		17,463,000		20,021,000
Operating expenses:
Product engineering and development		629,000			681,000		1,387,000		1,357,000
Selling, general and administrative		5,843,000			4,192,000		8,739,000		7,560,000

Total operating expenses		6,472,000			4,873,000		10,126,000		8,917,000

Operating income		4,236,000			6,480,000		7,337,000		11,104,000
Other income (expense), net:
Interest and dividend income, net of fees		1,111,000			1,158,000		2,288,000		2,147,000
Net realized and unrealized gains (losses) on marketable securities		(174,000	)		598,000		199,000		143,000

Total other income, net		937,000			1,756,000		2,487,000		2,290,000

Income before income tax expense		5,173,000			8,236,000		9,824,000		13,394,000
Income tax expense		1,330,000			2,141,000		2,539,000		3,482,000

Net income	$	3,843,000		$	6,095,000	$	7,285,000	$	9,912,000

Net income per common share – basic and diluted	$	0.26		$	0.42	$	0.50	$	0.68

See accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

GENCOR INDUSTRIES, INC.

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

For the Quarter Ended December 31, 2025


	For the Quarters and Six Months Ended March 31, 2026
	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, 2025		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	197,746,000	$	211,802,000
Net income		—		—		—		—		—		3,442,000		3,442,000

December 31, 2025		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	201,188,000	$	215,244,000
Net income		—		—		—		—		—		3,843,000		3,843,000

March 31, 2026		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	205,031,000	$	219,087,000

	For the Quarters and Six Months Ended March 31, 2025
	Common Stock				Class B Stock				Capital in Excess of Par Value		Retained Earnings		Total Shareholders’ Equity
	Shares		Amount		Shares		Amount
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, 2024		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	182,085,000	$	196,141,000
Net income		—		—		—		—		—		3,~~442~~817,000		3,~~442~~817,000
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, 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

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
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

Table of Contents

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	$	3,442,000		$	3,817,000
Adjustments to reconcile net income to cash provided by operating activities:
Unrealized (gain) loss on marketable securities		(169,000	)		567,000
Deferred income taxes		(27,000	)		(148,000	)
Unrecognized tax benefits		139,000			155,000
Depreciation and amortization		542,000			622,000
Provision for credit losses		95,000			—
Changes in operating assets and liabilities:
Accounts receivable		(463,000	)		(1,616,000	)
Contract assets		7,117,000			1,418,000
Marketable securities		(1,120,000	)		(773,000	)
Inventories		254,000			4,094,000
Prepaid expenses and other current assets		(1,520,000	)		527,000
Accounts payable		149,000			1,719,000
Customer deposits		2,133,000			2,389,000
Contract liabilities		—			2,157,000
Accrued expenses		545,000			(119,000	)
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		(973,000	)		(319,000	)
Cash used in investing activities		(973,000	)		(319,000	)
Net increase in cash and cash equivalents		10,144,000			14,490,000
Cash and cash equivalents at:
Beginning of period		26,587,000			25,482,000
End of period	$	36,731,000		$	39,972,000

GENCOR INDUSTRIES, INC.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended March 31, 2026 and 2025

(Unaudited)


	2026			2025
Cash flows from operating activities:
Net income	$	7,285,000		$	9,912,000
Adjustments to reconcile net income to cash provided by operating activities:
Unrealized loss on marketable securities		340,000			225,000
Deferred income taxes		(259,000	)		(59,000	)
Unrecognized tax benefits		382,000			402,000
Depreciation and amortization		1,071,000			1,206,000
Provision for credit losses		45,000			—
Loss on disposal of fixed asset		6,000			—
Changes in operating assets and liabilities:
Accounts receivable		(847,000	)		(3,175,000	)
Contract assets		4,656,000			4,959,000
Marketable securities		(2,296,000	)		(1,703,000	)
Inventories		2,432,000			8,670,000
Prepaid expenses and other current assets		(1,768,000	)		1,511,000
Accounts payable		2,992,000			1,551,000
Contract liabilities		1,233,000			2,796,000
Customer deposits		3,216,000			532,000
Accrued expenses		(459,000	)		421,000

Total adjustments		10,744,000			17,336,000

Cash flows provided by operating activities		18,029,000			27,248,000

Cash flows from investing activities:
Capital expenditures		(1,152,000	)		(460,000	)

Cash flows used in investing activities		(1,152,000	)		(460,000	)

Net increase in cash and cash equivalents		16,877,000			26,788,000
Cash and cash equivalents at:
Beginning of period		26,587,000			25,482,000

End of period	$	43,464,000		$	52,270,000

Supplemental Cash Flow Information
Cash paid for income taxes, net	$	3,948,000		$	1,512,000
Supplemental Disclosures of Non-Cash Financing Activities
Right-of-use assets obtained in exchange for operating lease liabilities	$	—		$	370,000

See accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

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 (“GAAP”) 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 and six months ended March 31, 2026 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, 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 No. (“ASU”)

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 2024-03”),

which requires entities to (i) disclose amounts of (a) purchases 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 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

Table of Contents

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,~~8 ~~market and economic conditions may negatively impact our business, financial condition and share price~~

~~Concerns~~Table ~~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. Contents

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 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, Iran, the U.S., and various other countries, 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.

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.

The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of March 31, 2026:


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Equities	$	5,849,000	$	—	$	—	$	5,849,000
Mutual funds		4,150,000		—		—		4,150,000
Exchange-Traded Funds		12,137,000		—		—		12,137,000
Corporate Bonds		—		28,960,000		—		28,960,000
Government Securities		54,636,000		—		—		54,636,000
Cash and Money Funds		5,938,000		—		—		5,938,000

Total	$	82,710,000	$	28,960,000	$	—	$	111,670,000

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~~The~~Net ~~fair~~unrealized ~~value~~gains ~~of marketable equity securities~~ (~~stocks~~losses), ~~mutual~~included ~~funds,~~in 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~~condensed orconsolidated ~~counterparty,~~income ~~industry~~statements ~~sector~~for of the ~~issuer,~~quarter ~~coupon rate, call provisions, maturity, estimated duration~~ and ~~assumptions~~six ~~regarding~~months ~~liquidity~~ended ~~and~~March ~~estimated future cash flows. In addition to bond characteristics~~31, ~~the~~2026 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 Levelwere 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.

$(510,000) and $(340,000), respectively.

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:

	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

Net unrealized gains recognized during the quarter ended December 31, 2025 on trading securities still held as of December 31, 2025 were $169,000.

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:


	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 gains (losses) ~~recognized~~included ~~during~~in the ~~quarter~~condensed ~~ended~~consolidated ~~December 31,~~income ~~2024~~statements onfor ~~trading~~the ~~securities~~quarter ~~still~~and ~~held~~six asmonths ofended ~~December~~ March 31, ~~2024~~2025 were ~~$(567,000).~~

$342,000 and $(225,000), respectively.

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, 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

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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.

Net inventories at ~~December~~March 31, ~~2025~~2026 and September 30, 2025 consist of the following:

	December 31, 2025		September 30, 2025
	March 31, 2026		September 30, 2025
Raw materials	$	27,~~084~~832,000	$	28,010,000
Work in process		1213,~~820~~156,000		11,731,000
Finished goods		1310,~~345~~083,000		13,762,000
	$	5351,~~249~~071,000	$	53,503,000

Slow-moving and obsolete inventory allowances were $16,225,000 and $15,569,000 at ~~December~~March 31, ~~2025~~2026 and September 30, 2025, respectively. ~~During~~The increase in the ~~quarter~~slow-moving ~~ended~~and ~~December~~obsolete 31inventory allowances of $656,000 from September 30, 2025, reflects primarily additional amounts charged to cost of sales to reduce the ~~increase~~cost inbasis of inventories consistent with the Company’s policy on allowances for slow-moving and obsolete inventory. During the six months ended March 31, 2025, the slow-moving and obsolete inventory allowances ofincreased $919,000.

~~was~~10 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

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Note 4 – Contract Assets and Liabilities

Contract assets reflect costs and estimated earnings in excess of billings on uncompleted contracts as of ~~December~~March 31, ~~2025~~2026 and September 30, 2025, and consist of the following:

	December 31, 2025		September 30, 2025
	March 31, 2026		September 30, 2025
Costs incurred on uncompleted contracts	$	97,~~210~~874,000	$	17,360,000
Estimated earnings		3,~~157~~209,000		5,926,000
		12,367,000		23,286,000
		11,083,000		23,286,000
Billings to date		73,~~276~~531,000		11,078,000
Contract assets	$	57,~~091~~552,000	$	12,208,000

~~Note~~Contract 5liabilities –reflect ~~Net~~billings ~~Income~~in ~~per~~excess ~~Share~~of costs and estimated earnings on uncompleted contracts as of March 31, 2026, and consist of the following:

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:


	March 31, 2026
Costs incurred on uncompleted contracts	$	5,532,000
Estimated earnings		1,808,000

		7,340,000
Billings to date		8,573,000

Contract liabilities	$	(1,233,000	)

	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

There were no contract liabilities as of September 30, 2025.

~~Basic~~Note ~~net~~5 ~~income~~– ~~per~~Net ~~common~~Income ~~share is based on the weighted-average number of shares outstanding. Diluted net income~~ per ~~common~~Common ~~share~~Share isData 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.

The condensed consolidated financial statements include basic and diluted net income per common share information. The following table sets forth the computation of basic and diluted net income per common share for the quarters and six months ended March 31, 2026 and 2025:


	Quarter Ended March 31,				Six Months Ended March 31,
	2026		2025		2026		2025
Net Income	$	3,843,000	$	6,095,000	$	7,285,000	$	9,912,000
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	$	0.42	$	0.50	$	0.68

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. 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 March 31, 2026 and 2025 and thus no common stock equivalents as of March 31, 2026 and 2025.

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

During the quarter ended March 31, 2026, one customer accounted for 13.3% of net revenues. During the six months ended March 31, 2026, no customer accounted for 10.0% or more of net revenues.

During the quarter ended March 31, 2025, one customer accounted for 10.2% of net revenues and a second customer accounted for 12.0% of net revenues. During the six months ended March 31, 2025, the first customer noted above accounted for 10.5% of net revenues and a third customer accounted for 13.7% of net revenues.

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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

% and

% of net revenues, respectively.

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

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 ~~December~~March 31, ~~2025~~2026 and September 30, 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 $

judgment is required in evaluating the Company’s uncertain tax position

and determining the Company’s provision for taxes. Although the Company believes the reserves for 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 March 31, 2026 and September 30, 2025, the Company had UTBs of $2,365,000 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 and six months ended March 31, 2026 and March 31, 2025 reflect income tax rates under the Tax Cuts and Jobs Act of 2017 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 and six months ended March 31, 2026 and 2025:

	Quarter Ended December 31,
	Quarter Ended March 31,				Six Months Ended March 31,
	2025		2024
	2026		2025		2026		2025
Equipment sales recognized over time	$	910,~~295~~591,000	$	1614,~~831~~116,000	$	19,886,000	$	30,947,000
Equipment sales recognized at a point in time		512,~~904~~932,000		712,~~588~~121,000		18,836,000		19,709,000
Parts and component sales		68,~~746~~448,000		68,~~151~~874,000		15,194,000		15,025,000
Freight revenue		1,~~574~~354,000		~~745~~2,588,000		2,928,000		3,333,000
Other		58474,000		~~101~~505,000		532,000		606,000
Net revenue	$	2333,~~577~~799,000	$	3138,~~416~~204,000	$	57,376,000	$	69,620,000

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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 (e

ding accounts receivable) under contracts with customers represent revenue recognized in excess of amounts billed on equipment sales recognized over time. These contract assets were $7,552,000 and $12,208,000 at March 31, 2026 and September 30, 2025, respectively, and are included in current assets on the Company’s condensed consolidated balance sheets. Contract liabilities (excluding customer deposits) under contracts with customers represent amounts billed in excess of revenue recognized on equipment sales recognized over time. These contract liabilities were $1,233,000 and zero at March 31, 2026 and September 30, 2025, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets. The Company anticipates that all of the contract assets at March 31, 2026, 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 were $~~101~~126,000 and $80,000 at ~~December~~March 31, ~~2025~~2026 and September 30, 2025, respectively.

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

~~Provisions~~Under ~~for~~certain ~~estimated~~contracts ~~returns~~with ~~and allowances~~customers, recognition of a portion of the consideration received may be deferred and ~~other~~recorded ~~adjustments~~as ~~are~~a ~~provided~~contract ~~for~~liability inif the ~~same~~Company ~~period~~has ~~the~~to ~~related~~satisfy ~~sales~~a ~~are~~future ~~recorded~~obligation, such as to provide installation assistance. ~~Returns~~There were no such contract liabilities at March 31, 2026 and ~~allowances~~September 30, ~~which~~2025. ~~reduce~~Customer ~~product~~deposits ~~revenue~~related to contracts with customers were $7,105,000 and $3,889,000 at March 31, 2026 and September 30, 2025, respectively, and are ~~estimated~~included ~~using~~in ~~historical~~current ~~experience~~liabilities on the Company’s condensed consolidated balance sheets.

~~Under~~The ~~certain~~Company ~~contracts~~records ~~with~~revenues ~~customers,~~earned ~~recognition~~for ofshipping ~~a portion of the consideration received may be deferred~~ and ~~recorded~~handling as afreight ~~contract~~revenue ~~liability~~at if the ~~Company~~time ~~has~~of ~~to satisfy a future obligation~~shipment, ~~such~~regardless asof towhether ~~provide~~or ~~installation~~not ~~assistance.~~it ~~There~~is ~~were~~identified noas ~~contract~~a ~~liabilities~~separate ~~other~~performance ~~than customer deposits at December~~obligation. ~~31,~~The ~~2025~~cost ~~and~~of ~~September 30,~~shipping ~~2025. Customer deposits related to contracts with customers were $6,022,000~~ and ~~$3,889,000~~handling atis ~~December 31,~~classified ~~2025~~as ~~and~~cost ~~September 30,~~of ~~2025,~~goods ~~respectively,~~sold ~~and~~concurrently ~~are~~with ~~included in current liabilities on~~ the ~~Company’s~~revenue ~~condensed consolidated balance sheets~~recognition.

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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.

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

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 consideration of 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.

~~Changes~~13 ~~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

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Changes in the allowance for credit losses for the six months ended March 31, 2026 and March 31, 2025 consisted of the following:


	Quarter Ended March 31						Six Months Ended March 31,
	2026			2025			2026			2025
Balance, beginning of period	$	498,000		$	425,000		$	434,000		$	390,000
Provision for credit losses		(50,000	)		—			45,000			—
Provision for estimated returns and allowances		135,000			115,000			180,000			275,000
Uncollectible accounts written off		—			1,000			—			(12,000	)
Returns and allowances issued		(54,000	)		(43,000	)		(130,000	)		(155,000	)

Balance, end of period	$	529,000		$	498,000		$	529,000		$	498,000

Note 9 – Leases

The Company leases certain equipment under

non-cancelable

operating leases. Future minimum rental payments under these leases at March 31, 2026 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 six months ended ~~December~~March 31, ~~2025~~2026, operating lease costs and cash payments related to these operating leases were $115,000 and $229,000, respectively. For the quarter and six months ended ~~December~~March 31, ~~2024~~2025, operating lease costs related to these operating leases were $112,000 and $224,000, respectively, and cash payments related to these operating leases were $81112,000 and $193,000, respectively.

Other

information

concerning the Company’s operating leases accounted for under Accounting Standards Codification (“ASC”) 842 guidelines as of March 31, 2026 and September 30, 2025, is as follows:


	March 31, 2026			September 30, 2025
Operating lease ROU asset included in other long-term assets	$	156,000		$	339,000
Current operating lease liability	$	156,000		$	339,000
Weighted average remaining lease term (in years)		0.42			0.92
Weighted average discount rate used in calculating ROU asset		4.5	%		4.5	%

Future annual minimum lease payments as of March 31, 2026 are as follows:


Fiscal Year	Annual Lease Payments
2026	$	158,000
Less interest		(2,000	)

Present value of lease liabilities	$	156,000

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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,

~~reporting~~Segment 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. Reporting

, 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~~ March 31, ~~2025~~2026 and September 30, 2025, total long-term assets of $16,~~422~~206,000 and $16,055,000, respectively, were attributed to the United States. Net revenue by geographic location for the quarters ~~ended~~and ~~December~~six months ended March 31, ~~2025~~2026 and ~~December~~ March 31, ~~2024~~2025 is as follows:

	Quarters Ended December 31,
	Quarters Ended March 31,				Six Months Ended March 31,
	2025		2024
	2026		2025		2026		2025
United States	$	2230,~~677~~923,000	$	2933,~~991~~816,000	$	53,600,000	$	63,807,000
Canada		~~810~~2,328,000		14,~~391~~304,000		3,138,000		5,695,000
All other foreign countries		90548,000		3484,000		638,000		118,000
Net revenue	$	2333,~~577~~799,000	$	3138,~~416~~204,000	$	57,376,000	$	69,620,000

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 other than the event listed below.

Change in Control

Effective May 1, 2026 (the “Change in Control Date”), a change in control occurred. On such date, pursuant to multiple assignments, Marc G. Elliott, the Company’s President and Chairman of the Board, acquired a majority of the membership interests in E.J. Elliott, LLC, a Nevada limited liability company (the “LLC”), the sole general partner of E.J. Elliott Family Limited Partnership, a Nevada limited partnership (the “LP”), as reported in the Company’s 8-K filing on May 7, 2026

Departure of Certain Officers; Appointment of Certain Officers:

As previously disclosed on May 14, 2026, Eric Mellen, who served as Chief Financial Officer and Treasurer of the Company, provided notice of his decision to retire effective June 10, 2026. The Company has begun a search to consider candidates for the Chief Financial Officer role. In the interim, the Company has appointed Raymond Cole as the Company’s Interim Chief Financial Officer, effective June 1, 2026.

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, 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, 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~~IIJA”), including $550 billion in new spending and reauthorization of $650 billion in previously allocated funds. The ~~IIJ~~IIJA ~~Act~~ provides $110 billion for the nation’s highways, bridges and roads. The ~~IIJ~~IIJA ~~Act~~ is scheduled to expire on September 30, 2026. If Congress does not reauthorize or fully fund the IIJA when it expires at the end of fiscal year 2026, demand for our products could decline.

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 results of operations and financial condition may be adversely affected.

The Company monitors the prices it charges for its products and services on an ongoing basis and has historically been able to adjust its prices to take into account changes in the rate of inflation.

Also, a significant increase in the price of liquid asphalt could decrease demand for hot mix asphalt paving materials and certain of the Company’s products. Increases in oil prices also drive up the cost of gasoline and diesel, which results in increased freight costs. Where possible, the Company will pass increased freight costs on to its customers., ~~However~~however, the Company may not be able to recapture all of the higher costs, which could have a negative impact on the Company’s financial performance.

We manufacture our equipment domestically with a fraction of our sales exported to neighboring countries. The current U.S. administration has implemented tariffs on countries to which the Company has sales and has threatened tariffs on a variety of other counties. Also, some of the parts we procure are sourced from countries subject to the recent tariffs. It is not known whether any additional costs will be passed onto customers. If we cannot pass additional costs onto customers, then this could negatively affect our revenues, cash flows, and financial position.

In February 2026, the U.S. Supreme Court issued a ruling invalidating tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). As a result of this ruling, the U.S. Court of International Trade issued an order directing the U.S. Customs and Border Protection (“CBP”) agency to begin formalizing a process for refunds. The CBP launched an online portal that can be used to submit IEEPA tariff refund requests. The ultimate recoverability, timing and amount of any potential refunds of IEEPA tariffs remains uncertain and subject to further legal, regulatory and administrative developments. As of March 31, 2026, the Company has not recorded any potential impact associated with such refunds, but will continue to monitor these developments and their potential impact.

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, Iran, 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 ~~December~~March 31, ~~2025~~2026 versus ~~December~~March 31, ~~2024~~2025

Net ~~revenues~~revenue for the quarter ended ~~December~~March 31, ~~2025~~2026 ofwas $2333,~~577~~799,000 ~~decreased~~compared with $738,~~839~~204,000 ~~or 25.0% as compared to~~ net ~~revenues~~revenue for the quarter ended ~~December~~March 31, ~~2024 of $31,416,000~~2025. ~~Lower~~The ~~revenues~~decrease ~~from~~in ~~contract~~net ~~equipment~~revenue ~~sales~~was ~~were~~primarily ~~partially~~due ~~offset~~to bylower ~~higher~~contract ~~parts~~equipment ~~and~~revenues ~~component~~recognized ~~sales~~over time and associated freight revenue., ~~The~~which ~~decrease~~resulted infrom ~~contract~~the ~~equipment~~timing ~~sales~~of ~~was~~orders ~~due~~and ~~primarily~~shipments. toAs ~~uncertainty~~a ~~around~~percentage ~~replacement~~ of ~~the~~net ~~current~~revenue, ~~Federal~~gross ~~infrastructure~~profit ~~spending~~margins ~~bill~~increased ~~which~~200 isbasis ~~scheduled~~points to ~~expire~~31.7% onin ~~September~~the quarter ended March 3031, 2026, compared to 29.7% in the quarter ended March 31, 2025.

AsProduct aengineering ~~percent~~and ofdevelopment ~~sales~~expenses decreased $52,000 ~~gross~~to ~~profit~~$629,000 ~~margins~~for ~~increased~~the quarter ended March 31, 2026, as compared to ~~28.7%~~$681,000 infor the quarter ended ~~December~~March 31, 2025 primarily due to lower headcount. Selling, general and administrative (“SG&A”) expenses increased $1,651,000 to $5,843,000 for the quarter ended March 31, 2026, compared to ~~27.6%~~$4,192,000 infor the quarter ended ~~December~~March 31, ~~2024.~~2025 ~~The~~due ~~slightly~~to ~~improved~~higher ~~margins~~trade ~~were~~show ~~driven~~expenses. byIn the ~~increased~~quarter ~~parts~~ended ~~and~~March ~~components~~31, ~~sales~~2026 ~~which~~Gencor ~~have~~incurred atrade ~~higher~~show ~~margin~~expenses ~~percentage~~of $3,525,000 compared towith ~~contract~~$345,000 ~~equipment~~in ~~sales~~the quarter ended March 31, 2025.

~~Product~~Operating ~~engineering~~income ~~and~~decreased ~~development~~34.6%, ~~expenses~~or ~~increased~~ $812,244,000, tofrom $~~758~~6,480,000 for the quarter ended ~~December~~March 31, 2025, as compared towith $~~677~~4,236,000 for the quarter ended ~~December~~March 31, ~~2024. Selling~~2026, ~~general~~due ~~and~~to ~~administrative~~higher ~~(“SG&A”)~~trade show expenses. ~~decreased~~Operating ~~$471,000~~margin towas ~~$2,896,000~~12.5% for the quarter ended ~~December~~March 31, ~~2025,~~2026 compared towith ~~$3,367,000~~17.0% for the quarter ended ~~December~~March 31, ~~2024~~2025. ~~The decrease in SG&A expenses was due to reduced salesmen commissions on lower net revenues and a decrease in professional fees.~~

~~The~~For the quarter ended March 31, 2026, the Company had ~~operating~~net other income of $3937,~~101~~000, compared to $1,756,000 for the quarter ended ~~December~~March 31, 2025. asInterest and dividend income, net of fees, was $1,111,000 in the quarter ended March 31, 2026, compared to $41,~~624~~158,000 ~~for~~in the quarter ended ~~December~~March 31, ~~2024~~2025. The ~~decrease~~net inrealized ~~operating~~and ~~income~~unrealized ~~was~~losses ~~due~~on ~~primarily~~marketable tosecurities ~~lower~~were $174,000 for the quarter ended March 31, 2026, compared to net ~~revenues~~realized and unrealized gains of $598,000 for the quarter ended ~~December~~March 31, 2025. The decline in net realized and unrealized gains was due to slightly higher interest rates on longer duration bonds that caused a decline in value.

For the quarter ended December 31, 2025, the Company had net other income of $1,550,000 compared to $534,000 for the quarter ended December 31, 2024. Net interest and dividend income for the quarter ended December 31, 2025 was $1,177,000 compared to $989,000 for the quarter ended December 31, 2024. The increase was primarily due to higher rates earned on fixed income investments and on higher operating cash balances. Net realized and unrealized gains (losses) on marketable securities for the quarter ended December 31, 2025 were $373,000 compared to $(455,000) for the quarter ended December 31, 2024. Bond yields rose during the quarter ended December 31, 2024, due to better economic data and higher inflation. The higher yields negatively impacted the value of our bond holdings for the quarter ended December 31, 2024.

The effective income tax rate for both the quarters ended ~~December~~March 31, ~~2025~~2026 and ~~December~~March 31, ~~2024~~2025 was 26.0%. ~~Net~~based ~~income~~on ~~for~~ the ~~quarter~~expected ~~ended~~annual ~~December 31,~~effective ~~2025 was $3,442,000, or $0.23 per basic and diluted common share, compared to net~~ income oftax ~~$3,817,000, or $0~~rate.26 ~~per basic and diluted common share, for the quarter ended December 31, 2024.~~

Net income for the quarter ended March 31, 2026 decreased $2,252,000 or 37.0% to $3,843,000, or $0.26 basic and diluted net income per common share, from $6,095,000, or $0.42 basic and diluted net income per common share, for the quarter ended March 31, 2025. The lower net income resulted primarily from the higher trade show expenses, lower net revenues and net non-operating income, partially offset by improved gross margins.

Six Months Ended March 31, 2026 versus March 31, 2025

Net revenue for the six months ended March 31, 2026 and 2025 was $57,376,000 and $69,620,000, respectively, a decrease of $12,244,000 or 17.6%. The decrease was primarily in contract equipment sales and was due primarily to uncertainty around replacement of the current Federal infrastructure spending bill which is scheduled to expire on September 30, 2026.

Gross profit margins increased to 30.4% for the six months ended March 31, 2026 from 28.8% for the six months ended March 31, 2025.

Product engineering and development expenses increased $30,000 to $1,387,000 for the six months ended March 31, 2026, compared to $1,357,000 for the six months ended March 31, 2025. SG&A expenses increased $1,179,000 to $8,739,000 for the six months ended March 31, 2026, compared to $7,560,000 the six months ended March 31, 2025, increased trade show expenses.

The Company had operating income of $7,337,000 for the six months ended March 31, 2026, compared to $11,104,000 for the six months ended March 31, 2025. The decrease in operating income was primarily due to higher trade show expenses, lower net revenue, partially offset by increased gross margins.

For the six months ended March 31, 2026, the Company had net other income of $2,487,000, compared to $2,290,000 for the six months ended March 31, 2025. Interest and dividend income, net of fees, was $2,288,000 for the six months ended March 31, 2026, as compared to $2,147,000 for the six months ended March 31, 2025. The increase in interest and dividend income, net of fees, for the six months ended March 31, 2026, was primarily due to higher rates earned on fixed income investments and higher cash balances. Net realized and unrealized gains on marketable securities were $199,000 for the six months ended March 31, 2026, compared to $143,000 for the six months ended March 31, 2025.

The effective income tax rate for both the six month periods ended March 31, 2026 and March 31, 2025 was 26% based on the expected annual effective income tax rate. Net income for the six months ended March 31, 2026 was $7,285,000, or $0.50 basic and diluted net income per common share, compared to $9,912,000, or $0.68 basic and diluted net income per common share for the six months ended March 31, 2025. The lower net income and earnings per share resulted primarily from higher trade show expenses and lower net revenue.

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 asat ~~of December~~March 31, ~~2025~~2026 or September 30, 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 onin ~~February 25,~~March ~~2026~~2027, 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 ~~December~~March 31, ~~2025~~2026, the Company had $3643,~~731~~464,000 in cash and cash equivalents, and $111,~~003~~670,000 in marketable securities, including $5,~~292~~849,000 in equities, $3028,~~791~~960,000 in corporate bonds, $1112,~~448~~137,000 in exchange-traded funds, $594,~~972~~150,000 in ~~government~~mutual ~~securities~~funds, $354,~~087~~636,000 in ~~mutual~~government ~~funds~~securities, and $~~413~~5,938,000 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~~18 Company’s backlog was $57.4 million at December 31, 2025 compared to $54.4 million at December 31, 2024. The Company’s working capital (defined as current assets less current liabilities) was $200.9 million at December 31, 2025 and $197.7 million at September 30, 2025. Cash flows provided by operations during the quarter ended December 31, 2025, were $11,117,000. Contract assets decreased $7,117,000 with the completion and shipment of several contract equipment plant sales where revenue is recognized over time. Marketable securities increased $1,289,000 due to net unrealized gains of $169,000, and net realized gains and interest earned on corporate bonds and U.S. treasuries of $1,120,000. Prepaid expenses increased $1,520,000 reflecting prepayments of insurance premiums to be amortized over fiscal 2026 and prepayments of expenses related to the March 2026 ConExpo-Con/Agg international construction trade show. Customer deposits increased $2,133,000 reflecting progress payments on contract equipment sales where revenues are recognized at a point in time that have not yet shipped.

The Company’s backlog was $60.5 million at March 31, 2026 compared to $27.8 million at March 31, 2025. The Company’s net working capital (defined as current assets less current liabilities) was $205.2 million at March 31, 2026 and $197.7 million at September 30, 2025. Cash flows ~~used~~provided inby ~~investing~~operating activities ~~for~~during the ~~quarter~~six months ended ~~December~~March 31, ~~2025~~2026 was $18,029,000. Contract assets decreased $4,656,000 and contract liabilities increased $1,233,000 with the timing of inventory build, customer payments and percentage of completion recognition on plant sales where revenue is recognized over time. Marketable securities increased $~~973~~1,956,000 ~~were~~due ~~related~~to net unrealized losses of $340,000, and net realized gains and interest earned on corporate bonds and U.S. treasuries of $2,296,000. Inventories decreased $2,432,000 due to ~~capital~~paver ~~expenditures~~sales and the completion and shipment on contract orders. Prepaid expenses increased $1,768,000 ~~primarily~~reflecting ~~for~~prepayments ~~building~~of ~~additions~~insurance premiums to be amortized over fiscal 2026 and ~~improvements~~prepaid income taxes. Accounts payable increased $2,992,000 reflecting primarily open payables related to the March 2026 ConExpo Con/Agg trade show and ~~handling~~the timing of purchase order receipts. Customer deposits increased $3,216,000 reflecting progress payments on contract equipment sales where revenues are recognized at a point in time that have not yet shipped as well as initial deposits on contract equipment sales where revenues are recognized overtime but manufacturing is yet to begin.

Cash flows used in investing activities for the six months ended March 31, 2026 of $1,152,000 were related to capital expenditures, primarily for building additions and improvements, and capital equipment.

Seasonality

The Company’s primary business is the manufacture of 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, 2025, “Nature of Operations and Summary of Significant Accounting Policies.” There were no material changes to the accounting policies during the ~~quarter~~six months ended ~~December~~March 31, ~~2025~~2026.

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~~19 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.

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 $7,552,000 and $12,208,000 at March 31, 2026 and September 30, 2025, respectively, and are included in current assets on the Company’s condensed consolidated balance sheets. Contract liabilities (excluding customer deposits) under contracts with customers represent amounts billed in excess of revenue recognized on equipment sales recognized over time. These contract liabilities were $1,233,000 and zero at March 31, 2026 and September 30, 2025, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets. The Company anticipates that all of the contract assets at March 31, 2026, 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.

Under certain contracts with customers, recognition of a portion of the consideration received may be deferred and recorded as a contract liability if the Company has to satisfy a future obligation, such as to provide installation assistance. There were no contract liabilities other than customer deposits at December 31, 2025 and September 30, 2025. Customer deposits related to contracts with customers were $6,022,000 and $3,889,000 at December 31, 2025 and September 30, 2025, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets.

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. 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.

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 income statements. Net unrealized gains and (losses) are reported in the condensed consolidated 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~~six months ended ~~December~~March 31, ~~2025~~2026 and ~~December~~March 31, ~~2024~~2025.

Off-Balance Sheet Arrangements

None.

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~~and isChairman ~~currently~~of ~~serving as~~ the ~~Company’s~~Board (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 (~~December~~ March 31, ~~2025~~2026). Based upon that evaluation, the President and the Chief Financial Officer concluded that, as of 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, 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, 2025, management identified the following material weaknesses in internal control over financial reporting as of September 30, 2025, which were not remediated as of ~~December~~March 31, ~~2025~~2026:

•

Ineffective information technology general controls (ITGCs), particularly as such controls related to user access, program change management, 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 were 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.

•

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 described above and to improve our internal control over financial reporting.

InTo ~~response~~address to the material weaknesses ~~discussed~~described above, wethe ~~plan~~Company has implemented new and enhanced controls designed to ~~continue~~ensure ~~efforts~~that ~~already~~access ~~underway~~to information technology applications and data are adequately restricted to appropriate personnel, ensure segregation of duties, and appropriately monitor the activities of the individuals with access to modify data. We believe the actions described above will be sufficient to remediate the ~~material~~identified material weaknesses inand strengthen our internal control over financial reporting. However, ~~including~~the new and enhanced controls have not operated for a sufficient period of time to conclude that the ~~following:~~material weaknesses have been remediated. Management and our Audit Committee will continue to monitor these specific remedial measures and the effectiveness of these controls on our overall control environment and will make any further changes management determines to be appropriate. We can provide no assurance as to when the remediation of these material weaknesses will be completed.

• We have engaged resources to support our internal control testing and remediation efforts.

• We are 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 continue to document and 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 changes in the internal controls designed to 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~~three months ended ~~December~~March 31, ~~2025~~2026 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.

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 six months ended March 31, 2026, 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

~~Item 5. Other~~ Information

Rule

10b5-1

Plan Adoptions, Modifications and Terminations

During the three months ended March 31, 2026, none of the Company’s directors or officers adopted, modified or terminated a Rule

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).

Item 6. Exhibits

Exhibit 31.1		Certification of Principal Executive Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended
Exhibit		Description
Exhibit 31.2		Certification of Chief Financial 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 32		Certifications of Principal Executive Officer and Chief Financial Officer Pursuant to 18 U. S. C. Section 1350
31.2		Certification of Chief Financial Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended
Exhibit 101.1		Interactive Data File
32		Certifications of Principal Executive Officer and Chief Financial Officer Pursuant to 18 U. S. C. Section 1350
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 ~~December~~March 31, ~~2025~~2026, formatted in Inline XBRL (included in Exhibit 101)

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) ~~February~~June 612, 2026 ~~/s/ Eric E. Mellen Eric E. Mellen Chief Financial Officer (Principal Financial and Accounting Officer) February 6, 2026~~

/s/ Raymond Cole

Raymond Cole

Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

June 12, 2026

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