Product engineering and development expenses decreased $52,000 to $629,000 for the quarter ended March 31, 2026, as compared to $681,000 for the quarter ended March 31, 2025 primarily due to lower headcount. Selling, general and administrative ("SG&A") expenses decreased $1,270,000 to $2,922,000 for the quarter ended March 31, 2026, compared to $4,192,000 for the quarter ended March 31, 2025 primarily due to reduced professional services expenses.
Operating income increased 10.4%, or $677,000, from $6,480,000 for the quarter ended March 31, 2025 to $7,157,000 for the quarter ended March 31, 2026, primarily due to lower SG&A expenses. The operating margin was 21.1% for the quarter ended March 31, 2026 compared with 17.0% for the quarter ended March 31, 2025.
For the quarter ended March 31, 2026, the Company had net other income of $937,000, compared to $1,756,000 for the quarter ended March 31, 2025. Interest and dividend income, net of fees, was $1,111,000 in the quarter ended March 31, 2026 as compared to $1,158,000 in the quarter ended March 31, 2025. The net realized and unrealized losses on marketable securities were $174,000 for the quarter ended March 31, 2026, compared to net realized and unrealized gains of $598,000 for the quarter ended 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.
The effective income tax rate for both the quarters ended March 31, 2026 and March 31, 2025 was 26.0% based on the expected annual effective income tax rate. Net income for the quarter ended March 31, 2026 decreased $105,000 or 1.7% to $5,990,000, or $0.41 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 slightly lower net income resulted primarily from the impact of lower net revenues and net non-operating income partially offset by improved margins and lower SG&A expenses.
For the six months ended March 31, 2026 the Company had net revenue of $57,376,000 and net income of $9,432,000, or $0.64 per basic and diluted common share, compared to net revenue of $69,620,000 and net income of $9,912,000 or $0.68 per basic and diluted common share for the six months ended March 31, 2025.
At March 31, 2026, the Company had $155.1 million of cash and cash equivalents and marketable securities compared to $136.3 million at September 30, 2025. Net working capital was $207.4 million at March 31, 2026 compared to $197.7 million at September 30, 2025. The Company had no short-term or long-term debt outstanding at March 31, 2026.
The Company's backlog was $60.5 million at March 31, 2026 compared to $27.8 million at March 31, 2025.
Marc Elliott, Gencor's President and Chairman of the Board, commented, "Gencor's second quarter revenue decline from the previous year was due to a slow start to the season delaying asphalt plant orders typically sold earlier in the fiscal year. Despite lower revenue, gross profit margins exceeded expectations, reflecting strong manufacturing execution and effective cost management. Our $60.5 million backlog was more than double the prior year as remaining IIJA funding obligations continued to flow to states. With this record backlog entering the third quarter, we are well-positioned for sustainable performance through the remainder of this fiscal year and into fiscal 2027."
Gencor Industries, Inc. is a diversified heavy machinery manufacturer for the production of highway construction materials and equipment and environmental control machinery and equipment used in a variety of applications.
GENCOR INDUSTRIES, INC.Condensed Consolidated Income Statements(Unaudited)
For the Quarters EndedMarch 31,
For the Six Months EndedMarch 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
2,922,000
4,192,000
5,818,000
7,560,000
Total operating expenses
3,551,000
4,873,000
7,205,000
