Form 10-Q

Large accelerated filer

Accelerated Filer

Non-accelerated
Filer

Smaller Reporting Company

Emerging Growth Company

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, 2023

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

FOR THE TRANSITION PERIOD: From

Commission File Number:

001-11703

GENCOR INDUSTRIES, INC.


Delaware		59-0933147
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

5201 North Orange Blossom Trail, Orlando, Florida 32810

(Address of principal executive offices) (Zip Code)

(407)

290-6000

(Registrant’s telephone number, including area code)

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


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

S-T

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

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

non-accelerated

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

12b-2

of the Exchange Act.

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

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

12b-2

of the Exchange Act). Yes ☐ No ☒

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


Class	Outstanding at May 12, 2023
Common stock, $.10 par value		12,338,845 shares
Class B stock, $.10 par value		2,318,857 shares

GENCOR INDUSTRIES, INC.


Index			Page
Part I.	Financial Information

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets – March 31, 2023 (Unaudited) and September 30, 2022		4

		Condensed Consolidated Income Statements – Quarters and Six Months Ended March 31, 2023 and 2022 (Unaudited)		5

		Condensed Consolidated Statements of Shareholders’ Equity – Six Months Ended March 31, 2023 and 2022 (Unaudited)		6

		Condensed Consolidated Statements of Cash Flows – Six Months Ended March 31, 2023 and 2022 (Unaudited)		7

		Notes to Condensed Consolidated Financial Statements (Unaudited)		8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		21

	Item 4.	Controls and Procedures		21

Part II.	Other Information

	Item 1.	Legal Proceedings		22

	Item 1A.	Risk Factors		22

	Item 6.	Exhibits		23

Signatures				24

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. All forward-looking statements, by their nature, 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 future 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, central bank interest rate increases and inflation, changes in the economic and competitive environments, demand for the Company’s products, the duration and scope of the coronavirus (“COVID-19”) pandemic and its variants, actions government entities and businesses have taken in response to the COVID-19 pandemic, including mandatory business closures, the impact of the pandemic and actions taken on regional economies, and the pace of recovery as the COVID-19 pandemic subsides. Additionally, on February 24, 2022, Russian military forces invaded Ukraine. The impact to Ukraine as well as actions taken by other countries, including new and stricter sanctions imposed by the U.S. and other countries and companies against officials, individuals, regions, and industries in Russia, and actions taken by Russia and certain other countries in response to such sanctions, 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, 2022: (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 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


	March 31, 2023 (Unaudited)		September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	18,462,000	$	9,581,000
Marketable securities at fair value (cost of $88,987,000 at March 31, 2023 and $94,879,000 at September 30, 2022)		87,851,000		89,300,000
Accounts receivable, less allowance for doubtful accounts of $528,000 at March 31, 2023 and $370,000 at September 30, 2022		7,178,000		2,996,000
Costs and estimated earnings in excess of billings		—		2,118,000
Inventories, net		63,803,000		55,815,000
Prepaid expenses and other current assets		2,613,000		2,669,000

Total current assets		179,907,000		162,479,000

Property and equipment, net		13,114,000		13,491,000
Deferred and other income taxes		1,882,000		2,893,000
Other long-term assets		594,000		450,000

Total Assets	$	195,497,000	$	179,313,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,507,000	$	4,251,000
Customer deposits		12,323,000		5,864,000
Billings in excess of costs and estimated earnings		703,000		—
Accrued expenses		2,157,000		1,885,000
Current operating lease liabilities		393,000		390,000

Total current liabilities		20,083,000		12,390,000
Non-current operating lease liabilities		148,000		6,000

Total liabilities		20,231,000		12,396,000

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 March 31, 2023 and September 30, 2022		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 March 31, 2023 and September 30, 2022		232,000		232,000
Capital in excess of par value		12,590,000		12,590,000
Retained earnings		161,210,000		152,861,000

Total shareholders’ equity		175,266,000		166,917,000

Total Liabilities and Shareholders’ Equity	$	195,497,000	$	179,313,000

See

accompanying

Notes to Condensed

Consolidated

Financial Statements

Table of Contents

GENCOR INDUSTRIES, INC.

Condensed Consolidated Income Statements

(Unaudited)


	For the Quarters Ended March 31,					For the Six Months Ended March 31,
	2023		2022			2023		2022
Net revenue	$	30,501,000	$	30,654,000		$	56,327,000	$	50,760,000
Cost of goods sold		21,404,000		24,462,000			41,415,000		40,863,000

Gross profit		9,097,000		6,192,000			14,912,000		9,897,000
Operating expenses:
Product engineering and development		874,000		920,000			1,771,000		2,269,000
Selling, general and administrative		3,062,000		3,364,000			5,861,000		6,763,000

Total operating expenses		3,936,000		4,284,000			7,632,000		9,032,000

Operating income		5,161,000		1,908,000			7,280,000		865,000

Other income (expense), net:
Interest and dividend income, net of fees		565,000		296,000			1,058,000		573,000
Net realized and unrealized gains (losses) on marketable securities, net		692,000		(1,488,000	)		2,654,000		(1,065,000	)
Other		—		(137,000	)		—		(137,000	)

Total other income (expense), net		1,257,000		(1,329,000	)		3,712,000		(629,000	)

Income before income tax expense		6,418,000		579,000			10,992,000		236,000
Income tax expense		1,545,000		140,000			2,643,000		71,000

Net income	$	4,873,000	$	439,000		$	8,349,000	$	165,000

Basic income per common share	$	0.33	$	0.03		$	0.57	$	0.01

Diluted income per common share	$	0.33	$	0.03		$	0.57	$	0.01

See accompanying Notes to Condensed

Consolidated

Financial Statements

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GENCOR INDUSTRIES, INC.

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)


	For the Six Months Ended March 31, 2023
	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, 2022		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	152,861,000	$	166,917,000
Net income		—		—		—		—		—		3,476,000		3,476,000

December 31, 2022		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	156,337,000	$	170,393,000
Net income		—		—		—		—		—		4,873,000		4,873,000

March 31, 2023		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	161,210,000	$	175,266,000


	For the Six Months Ended March 31, 2022
	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, 2021		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	153,233,000		$	167,289,000
Net loss		—		—		—		—		—		(274,000	)		(274,000	)

December 31, 2021		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	152,959,000		$	167,015,000
Net income		—		—		—		—		—		439,000			439,000

March 31, 2022		12,338,845	$	1,234,000		2,318,857	$	232,000	$	12,590,000	$	153,398,000		$	167,454,000

See accompanying Notes to Condensed Consolidated Financial

Statements

Table of Contents

GENCOR INDUSTRIES, INC.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended March 31, 2023 and 2022

(Unaudited)


	2023			2022
Cash flows from operating activities:
Net income	$	8,349,000		$	165,000
Adjustments to reconcile net income to cash provided by operating activities:
Purchase of marketable securities		(89,256,000	)		(68,803,000	)
Proceeds from sale and maturity of marketable securities		93,074,000			68,043,000
Change in value of marketable securities		(2,369,000	)		1,235,000
Deferred and other income taxes		1,011,000			(456,000	)
Depreciation and amortization		1,394,000			1,299,000
Provision for doubtful accounts		115,000			75,000
Loss on disposal of assets		157,000			—
Changes in assets and liabilities:
Accounts receivable		(4,297,000	)		(1,377,000	)
Costs and estimated earnings in excess of billings		2,821,000			274,000
Inventories		(7,988,000	)		(5,334,000	)
Prepaid expenses and other current assets		56,000			(1,554,000	)
Accounts payable		256,000			2,636,000
Customer deposits		6,459,000			5,042,000
Accrued expenses		273,000			(200,000	)

Total adjustments		1,706,000			880,000

Cash flows provided by operating activities		10,055,000			1,045,000

Cash flows from investing activities:
Capital expenditures		(1,174,000	)		(1,706,000	)

Cash flows used in investing activities		(1,174,000	)		(1,706,000	)

Net increase (decrease) in cash and cash equivalents		8,881,000			(661,000	)
Cash and cash equivalents at:
Beginning of period		9,581,000			23,232,000

End of period	$	18,462,000		$	22,571,000

Non-cash investing and financing activities:
Operating lease right-of-use assets	$	352,000		$	—
Operating lease liabilities	$	352,000		$	—

See accompanying Notes to Condensed

Consolidated

Financial

Statements

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GENCOR INDUSTRIES, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form

10-Q

and Article 10 of Regulation

S-X.

Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the quarter and six months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending September 30, 2023.

The accompanying Condensed Consolidated Balance Sheet at September 30, 2022 has been derived from the audited 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 year ended September 30, 2022 filed with the Securities and Exchange Commission on December 16, 2022.

Recent Accounting Pronouncements

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

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

Concerns over inflation, geopolitical issues, and global financial markets have led to increased economic instability and expectations of slower global economic growth. Our business may be adversely affected by any such economic instability or unpredictability. Russia’s invasion of Ukraine and related sanctions has led to increased energy prices. Such sanctions and disruptions to the global economy may lead to additional inflation and may disrupt the global supply chain and could have a material adverse effect on our ability to secure supplies. The increased cost of oil, along with increased or prolonged periods of inflation, would likely increase our costs in the form of higher wages, further inflation on supplies and equipment necessary to operate our business. There is a risk that one or more of our suppliers could be negatively affected by global economic instability, which could adversely affect our ability to operate efficiently and timely complete our operational goals. As of the date of issuance of this Quarterly Report, the Company’s operations have not been significantly impacted.

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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 current period.

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, 2023:


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Exchange-Traded Funds	$	3,343,000	$	—	$	—	$	3,343,000
Corporate Bonds		—		36,775,000		—		36,775,000
Government Securities		47,487,000		—		—		47,487,000
Cash and Money Funds		246,000		—		—		246,000

Total	$	51,076,000	$	36,775,000	$	—	$	87,851,000

Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2023, were $2,112,000 and $4,443,000, respectively.

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The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2022:


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Equities	$	12,149,000	$	—	$	—	$	12,149,000
Mutual Funds		5,337,000		—		—		5,337,000
Exchange-Traded Funds		4,794,000		—		—		4,794,000
Corporate Bonds		—		37,339,000		—		37,339,000
Government Securities		29,327,000		—		—		29,327,000
Cash and Money Funds		354,000		—		—		354,000

Total	$	51,961,000	$	37,339,000	$	—	$	89,300,000

Net unrealized gains and (losses) included in the Condensed Consolidated Income Statements for the quarter and six months ended March 31, 2022, were $(1,598,000) and $(1,531,000), 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 material, 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.

Net inventories at March 31, 2023 and September 30, 2022 consist of the following:


	March 31, 2023		September 30, 2022
Raw materials	$	36,606,000	$	31,975,000
Work in process		16,775,000		13,903,000
Finished goods		10,422,000		9,937,000

	$	63,803,000	$	55,815,000

Slow-moving and obsolete inventory allowances were $8,573,000 and $8,192,000 at March 31, 2023 and September 30, 2022, respectively.

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Note 4 – Costs and Estimated Earnings in Excess of Billings and Billings in Excess of Costs and Estimated Earnings

Billings in excess of costs and estimated earnings on uncompleted contracts as of March 31, 2023, and costs and estimated earnings in excess of billings on uncompleted contracts as of September 30, 2022, consist of the following:


	March 31, 2023		September 30, 2022
Costs incurred on uncompleted contracts	$	14,528,000	$	12,660,000
Estimated earnings		5,916,000		4,780,000

		20,444,000		17,440,000
Billings to date		21,147,000		15,322,000

Costs and estimated earnings in excess of billings	$	—	$	2,118,000

Billings in excess of costs and estimated earnings	$	703,000	$	—

Note 5 – Earnings per Share Data

The condensed consolidated financial statements include basic and diluted earnings per share information. The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended March 31, 2023 and 2022:


	Quarter Ended March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
Net Income	$	4,873,000	$	439,000	$	8,349,000	$	165,000

Common Shares:
Weighted average common shares outstanding		14,658,000		14,658,000		14,658,000		14,658,000
Effect of dilutive stock options		—		—		—		—

Diluted shares outstanding		14,658,000		14,658,000		14,658,000		14,658,000

Basic:
Net income per share	$	0.33	$	0.03	$	0.57	$	0.01

Diluted:
Net income per share	$	0.33	$	0.03	$	0.57	$	0.01

The Company’s 2009 Incentive Compensation Plan expired on October 1, 2021 and as of November 1, 2021 there were no outstanding stock options under the 2009 Plan. There were no other existing equity compensation plans and arrangements previously approved by security holders as of March 31, 2023 and 2022.

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

During the quarter ended March 31, 2023, two customers accounted for 12.7% and 11.6%, respectively, of net revenues. During the six months ended March 31, 2023, no customer accounted for 10% or greater of net revenues.

During the quarter ended March 31, 2022, one customer accounted for 13.6% of net revenues. During the six months ended March 31, 2022, no customer accounted for 10% or greater of net revenues.

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.

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The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the 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.

such valuation allowances were recorded as of March 31, 2023 and September 30, 2022.

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, 2023 and March 31, 2022 reflect income tax rates under the Tax Cuts and Jobs Act of 2017 (the “TCJA”).

Beginning in 2022, the TCJA eliminated the option of expensing all research and development expenditures in the current year, instead requiring amortization over five years pursuant to IRC Section 174. In the future, Congress may consider legislation that would eliminate the capitalization and amortization requirement. There is no assurance that the requirement will be deferred, repealed or otherwise modified. The requirement is effective for the Company’s fiscal year 2023, beginning October 1, 2022. The Company will continue to make additional estimated federal tax payments based on the current Section 174 tax law. The impact of Section 174 on the Company’s cash from operations depends primarily on the amount of research and development expenditures incurred and whether the IRS issues guidance on the provision which differs from the Company’s current interpretation.

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, 2023 and 2022:


	Quarter Ended March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
Equipment sales recognized over time	$	4,383,000	$	10,998,000	$	11,713,000	$	20,772,000
Equipment sales recognized at a point in time		16,595,000		10,475,000		28,093,000		14,673,000
Parts and component sales		7,227,000		7,381,000		13,128,000		12,824,000
Freight revenue		1,594,000		1,495,000		3,000,000		2,079,000
Other		342,000		305,000		393,000		412,000

Net revenue	$	30,501,000	$	30,654,000	$	56,327,000	$	50,760,000

Revenues from contracts with customers for the design, manufacture and sale of custom equipment are recognized over time when the performance obligation is satisfied by transferring control of the equipment. Control of the equipment transfers over time, as the equipment is unique to the specific contract and thus does not create an asset with an alternative use to the Company. Revenues and costs are recognized in proportion to actual labor costs incurred, as compared with total estimated labor costs expected to be incurred, during the entire contract. All incremental costs related to obtaining a contract are expensed as incurred, as the amortization period is less than one year. Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined.

Contract assets (excluding accounts receivable) under contracts with customers represent revenue recognized in excess of amounts billed on equipment sales recognized over time.

Table of Contents

These contract assets were zero at March 31, 2023 and $

2,118,000

at September 30, 2022. Contract are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheet at September 30, 2022.

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 $144,000 and $142,000 at March 31, 2023 and September 30, 2022, respectively.

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

12,323,000 and $5,864,000

at March 31, 2023 and September 30, 2022, respectively, and are included in current
liabilities on the Company’s condensed consolidated balance sheets. Billings in excess of costs and estimated earnings were $703,000 at March 31, 2023 and zero at September 30, 2022. These contract liabilities represent billings in excess of revenue recognized on equipment sales recognized over time, and are included current liabilities on the Company’s condensed consolidated balance sheet at March 31, 2023.

The Company records revenues earned for shipping and handling as freight revenue at the time of shipment, regardless of whether or not it is identified as a separate performance obligation. The cost of shipping and handling is classified as cost of goods sold concurrently with the revenue recognition.

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. Account balances are charged off against the allowance for doubtful accounts when they are determined to be uncollectible. Any recoveries of account balances previously considered in the allowance for doubtful accounts reduce future additions to the allowance for doubtful accounts. The allowance for doubtful accounts 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.

Note 9 – Leases

The Company leases certain equipment under

non-cancelable

operating leases. Future minimum rental payments under these leases at March 31, 2023 were immaterial.

On August 28, 2020, the Company entered into a three-year operating lease for property

to the manufacturing and

warehousing

of the Blaw-Knox paver product line. The lease term is for the period from September 1, 2020 through August 31, 2023. In accordance with ASU

2016-02,

the Company recorded a 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.

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On October 9, 2020, the Company entered into an operating lease for additional warehousing space. The original lease term was for one year beginning November 2020 with automatic

one-year

renewals. In accordance with ASU

2016-02,

the Company recorded a ROU asset totaling $254,000 and related lease liabilities at inception. An additional $39,000 was recorded as a ROU asset and related lease liability in October 2021 to reflect the impact of the lease renewal. In March 2022, the ROU asset and related liability was reduced by $39,000 to reflect the impact of a

reduction

in the square footage being leased.

For the quarter and six months ended March 31, 2023, operating lease costs were $107,000 and

214,000

respectively, and cash payments related to these operating leases were $110,000 and $243,000, respectively. For the quarter and six months ended March 31, 2022, operating lease costs were $101,000 and $202,000, respectively, and cash payments related to these operating leases were $107,000 and $216,000, respectively.

Other information concerning the Company’s operating lease accounted for under

ASC

842 guidelines as of March 31, 2023 and September 30, 2022, is as follows:


	March 31, 2023			September 30, 2022
Operating lease ROU asset included in other long-term assets	$	541,000		$	396,000
Current operating lease liability	$	393,000		$	390,000
Non-current operating lease liability	$	148,000		$	6,000
Weighted average remaining lease term (in years)		0.67			1.00
Weighted average discount rate used in calculating ROU asset		4.3	%		4.0	%

Future annual minimum lease payments as of March 31, 2023 are as follows:


Fiscal Year	Annual Lease Payments
2023 (remaining 6 months)	$	221,000
2024		330,000

Total		551,000
Less interest		(10,000	)

Present value of lease liabilities	$	541,000

Note 10 – Segment Information

The Company has one reporting segment, equipment for the highway construction industry. Based on evaluation of the criteria of ASC 280 – Segment 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 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 parts for its equipment.

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 future financing plans, income from investees 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 year ended September 30, 2022: (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 designs, manufactures and sells hot mix asphalt plants, combustion systems, fluid heat transfer systems and pavers for the highway construction industry and environmental and petrochemical markets. The Company’s products are manufactured at three facilities in the United States.

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

On November 15, 2021, President Biden signed into law a five-year, $1.2 trillion infrastructure bill, the Infrastructure Investment and Jobs Act (the “IIJ Act”), including $550 billion in new spending and reauthorization of $650 billion in previously allocated funds. The IIJ Act provides $110 billion for the nation’s highways, bridges and roads.

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 steel. If the Company is unable to purchase materials it requires or is unable to pass on price increases to its customers or otherwise reduce its cost of goods sold, its business results of operations and financial condition may be adversely affected.

Also, 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, the Company may not be able to recapture all of the higher costs and thus could have a negative impact on the Company’s financial performance.

On July 19, 2022, the Company announced that it was transferring the listing of its common stock, $0.10 per share par value (“Common Stock”), to the NYSE American LLC (“NYSE American”) from the NASDAQ Global Market (“NASDAQ”). Listing and trading of the Company’s Common Stock on NASDAQ ended at market close on July 29, 2022 and listing and trading of its Common Stock on the NYSE American commenced at market open on August 1, 2022 under its current ticker symbol ‘GENC’.

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

Changes in our tax rates or exposure to additional tax liabilities could adversely affect our earnings and financial condition

Results of Operations

Quarter Ended March 31, 2023 versus March 31, 2022

Net revenues for the quarter ended March 31, 2023 decreased slightly to $30,501,000, from $30,654,000 for the quarter ended March 31, 2022.

As a percent of sales, gross profit margins increased to 29.8% in the quarter ended March 31, 2023, compared to 20.2% in the quarter ended March 31, 2022, on increased efficiency, absorption and favorable price realization.

Product engineering and development expenses decreased $46,000 to $874,000 for the quarter ended March 31, 2023, as compared to $920,000 for the quarter ended March 31, 2022 due primarily to reduced headcount.

Selling, general and administrative (“SG&A”) expenses decreased by $302,000 to $3,062,000 for the quarter ended March 31, 2023, compared to $3,364,000 for the quarter ended March 31, 2022. The decrease in SG&A expenses was primarily due to lower headcount and reduced professional expenses.

Operating income increased from $1,908,000 for the quarter ended March 31, 2022 to $5,161,000 for the quarter ended March 31, 2023, due to improved gross profit margins and reduced operating expenses.

For the quarter ended March 31, 2023, the Company had net non-operating income of $1,257,000 compared to net non-operating expense of $(1,329,000) for the quarter ended March 31, 2022. Interest and dividend income, net of fees, was $565,000 for the quarter ended March 31, 2023 as compared to $296,000 in the quarter ended March 31, 2022. In January 2023, the Company reallocated its investments in equities and mutual funds to fixed income, government securities which resulted in the increased interest income for the quarter ended March 31, 2023. The net realized and unrealized gains on marketable securities were $692,000 for the quarter ended March 31, 2023 versus net realized and unrealized losses of $(1,488,000) for the quarter ended March 31, 2022. The higher gains in fiscal 2023 were due to a stronger domestic stock market during the quarter ended March 31, 2023.

The effective income tax rates for the quarters ended March 31, 2023 and March 31, 2022, were 24.1% and 24.2%, respectively, based on the expected annual effective income tax rate.

Net income for the quarter ended March 31, 2023 was $4,873,000, or $0.33 basic and diluted earnings per share, versus $439,000, or $0.03 basic and diluted earnings per share, for the quarter ended March 31, 2022.

Six Months Ended March 31, 2023 versus March 31, 2022

Net sales for the six months ended March 31, 2023 and 2022 were $56,327,000 and $50,760,000, respectively, an increase of $5,567,000. The improved revenues were primarily in contract equipment and paver sales.

Gross profit margins increased to 26.5% for the six months ended March 31, 2023 from 19.5% for the six months ended March 31, 2022. The improved gross profit margins were due to increased efficiency, absorption and favorable price realization.

Product engineering and development expenses decreased $498,000 to $1,771,000 for the six months ended March 31, 2023, compared to $2,269,000 for the six months ended March 31, 2022 due primarily to reduced headcount. SG&A expenses decreased $902,000 to $5,861,000 for the six months ended March 31, 2023, compared to $6,763,000 the six months ended March 31, 2022. The decrease in SG&A expenses was primarily due to lower headcount and reduced professional expenses.

The Company had operating income of $7,280,000 for the six months ended March 31, 2023 versus $865,000 for the six months ended March 31, 2022. The increase in operating income was due primarily to the improved gross profit margins and reduced operating expenses.

For the six months ended March 31, 2023, the Company had net non-operating income of $3,712,000 compared to net non-operating expense of $(629,000) for the six months ended March 31, 2022. Interest and dividend income, net of fees, was $1,058,000, as compared to $573,000 for the six months ended March 31, 2022. The increase in interest income for the six months ended March 31, 2023, was due to the reallocation of the Company’s investments in equities and mutual funds to fixed income, government securities in January 2023. Net realized and unrealized gains on marketable securities were $2,654,000 for the six months ended March 31, 2023 versus net realized and unrealized losses of $(1,065,000) for the six months ended March 31, 2022. The higher gains in fiscal 2023 were due to a stronger domestic stock market during the six months ended March 31, 2023.

The effective income tax rates for the six months ended March 31, 2023 and March 31, 2022, were 24.0% and 30.0%, respectively, based on the expected annual effective income tax rate. Net income for the six months ended March 31, 2023 was $8,349,000, or $0.57 basic and diluted earnings per share, versus $165,000, or $0.01 basic and diluted earnings per share for the six months ended March 31, 2022.

Liquidity and Capital Resources

The Company generates capital resources through operations and returns on its investments.

The Company had no long-term or short-term debt outstanding at March 31, 2023 or September 30, 2022. As of March 31, 2023, the Company has funded $85,000 in cash deposits at insurance companies to cover related collateral needs. In April 2020, a financial institution issued an irrevocable standby letter of credit (“letter of credit”) on behalf of the Company for the benefit of one of the Company’s insurance carriers. The maximum amount that can be drawn by the beneficiary under the letter of credit is $150,000. The letter of credit expires in

April 2024, 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 March 31, 2023, the Company had $18,462,000 in cash and cash equivalents, and $87,851,000 in marketable securities, including $36,775,000 in corporate bonds, $3,343,000 in exchange-traded funds, $47,487,000 in government securities, and $246,000 in cash and money funds. The marketable securities are invested through a professional investment management firm. These securities may be liquidated into cash at any time.

The Company’s backlog was $37.4 million at March 31, 2023 compared to $44.9 million at March 31, 2022. The Company’s working capital (defined as current assets less current liabilities) was $159.8 million at March 31, 2023 and $150.1 million at September 30, 2022. Cash flows provided by operating activities during the six months ended March 31, 2023 were $10,055,000. The significant purchases, sales and maturities of marketable securities shown on the condensed consolidated statements of cash flows reflect the recurring purchases and sales of United States treasury bills, including the reallocation of investments in equities and mutual funds to United States treasury bills in January 2023. Accounts receivable increased $4,297,000, due primarily to increased paver sales and the timing and collection on parts sales. Costs and estimated earnings in excess of billings decreased $2,821,000 with the timing of inventory build and percentage of completion recognition on plant sales where revenue is recognized over time. Inventories increased by $7,988,000 due to progress on several large contract orders where revenue is recognized at a point in time and some stock build to compensate for the increasing lead times from suppliers. Customer deposits increased by $6,459,000 reflecting down payments and final payments on contract jobs not yet shipped.

Cash flows used in investing activities for the six months ended March 31, 2023 of $1,174,000 were related to capital expenditures, primarily for manufacturing processing and finishing 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 year ended September 30, 2022, “Nature of Operations and Summary of Significant Accounting Policies.”

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).

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 zero at March 31, 2023 and $2,118,000 at September 30, 2022. Contract assets are included in current assets as costs and estimated earnings in excess of billings on the Company’s condensed consolidated balance sheet at September 30, 2022.

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 and billings in excess of costs and estimated earnings at March 31, 2023 and customer deposits at September 30, 2022. Customer deposits related to contracts with customers were $12,323,000 and $5,864,000 at March 31, 2023 and September 30, 2022, respectively, and are included in current liabilities on the Company’s condensed consolidated balance sheets. Billings in excess of costs and estimated earnings were $703,000 at March 31, 2023 and zero at September 30, 2022. These contract liabilities represent billings in excess of revenue recognized on equipment sales recognized over time, and are included current liabilities on the Company’s condensed consolidated balance sheet at March 31, 2023.

The allowance for doubtful accounts 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 doubtful accounts when they are determined to be uncollectible. Any recoveries of account balances previously considered in the allowance for doubtful accounts reduce future additions to the allowance for doubtful accounts. The allowance for doubtful accounts 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 material, work in process, finished goods, spare parts and used equipment. Used equipment acquired by the Company on trade-in from customers is carried at estimated net realizable value. Unless specific circumstances warrant different treatment regarding inventory obsolescence, an allowance is established to reduce the cost basis of inventories three to four years old by 50%, the cost basis of inventories four to five years old by 75%, and the cost basis of inventories greater than five years old to zero. Inventory is typically reviewed for obsolescence on an annual basis computed as of September 30, the Company’s fiscal year end. If significant known changes in trends, technology or other specific circumstances that warrant consideration occur during the year, then the impact on obsolescence is considered at that time.

Marketable Securities and Fair Value Measurements

Marketable debt and equity securities are categorized as trading securities and are thus marked to market and stated at fair value. Fair value is determined using the quoted closing or latest bid prices for Level 1 investments and market standard valuation methodologies for Level 2 investments. Realized gains and (losses) on investment transactions are determined by specific identification and are recognized as incurred in the condensed consolidated statements of income. Net unrealized gains and (losses) are reported in the condensed consolidated statements of income 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.

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 is currently serving as the Company’s Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer) evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. 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 are effective.

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.

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. There were no changes in the Company’s internal control over financial reporting during the quarter and six months ended March 31, 2023 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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, 2022, as filed with the SEC on December 16, 2022, 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, 2023, 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, 2022, other than the addition of the following risk factor:

Changes in our tax rates or exposure to additional tax liabilities could adversely affect our earnings and financial condition

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option of expensing all research and development expenditures in the current year, instead requiring amortization over five years pursuant to IRC Section 174. In the future, Congress may consider legislation that would eliminate the capitalization and amortization requirement. There is no assurance that the requirement will be deferred, repealed or otherwise modified. The requirement is effective for the Company’s fiscal year 2023, beginning October 1, 2022. The Company will continue to make additional estimated federal tax payments based on the current Section 174 tax law. The impact of Section 174 on the Company’s cash from operations depends primarily on the amount of research and development expenditures incurred and whether the IRS issues guidance on the provision which differs from the Company’s current interpretation.

Item 6. Exhibits


Exhibit		Description

31.1		Certification of Principal Executive Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended

31.2		Certification of Chief Financial Officer Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended

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 March 31, 2023, 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

(Principal Executive Officer)

May 12, 2023

/s/ Eric E. Mellen

Eric E. Mellen

Chief Financial Officer

(Principal Financial and Accounting Officer)

May 12, 2023

SEC Form 10-Q filed by Gencor Industries Inc.