Gencor Industries (GENC) investor relations material

Executive summary

• Net revenues for the quarter ended December 31, 2025, were $23.6 million, a 25% decrease year-over-year, mainly due to lower contract equipment sales amid uncertainty over federal infrastructure funding renewal.

• Gross profit margin improved to 28.7% from 27.6% year-over-year, driven by a higher mix of parts and component sales, which carry higher margins.

• Net income for the quarter was $3.4 million ($0.23 per share), down from $3.8 million ($0.26 per share) in the prior year quarter.

• Operating income declined to $3.1 million from $4.6 million year-over-year, reflecting lower revenues.

• Backlog increased to $57.4 million from $54.4 million year-over-year, indicating improved order activity and customer optimism.

Financial highlights

• Cash and cash equivalents increased to $36.7 million at December 31, 2025, from $26.6 million at September 30, 2025.

• Marketable securities rose to $111.0 million from $109.7 million sequentially.

• Working capital was $200.9 million at December 31, 2025, up from $197.7 million at September 30, 2025.

• Gross profit was $6.8 million, down from $8.7 million year-over-year.

• Net other income rose to $1.6 million from $534,000, including $373,000 in marketable securities gains versus $455,000 in losses last year.

Outlook and guidance

• Uncertainty around the replacement of the current federal infrastructure bill, set to expire September 30, 2026, is impacting equipment sales and customer purchasing decisions.

• Backlog growth and recent order activity suggest a more optimistic outlook for the remainder of the fiscal year.

• Management expects all contract assets at December 31, 2025, to be billed and collected within one year.

• The company continues to monitor inflation, supply chain disruptions, and geopolitical risks, but operations have not been significantly impacted as of the report date.