Overview

• US heavy machinery maker's Q2 revenue fell yr/yr due to lower contract equipment sales

• Q2 net income dropped 37% as higher trade show expenses weighed on results

• Company backlog more than doubled from prior year, supported by infrastructure funding

Outlook

• Gencor says backlog entering Q3 was $60.5 mln, more than double prior year

• Company expects sustainable performance through remainder of fiscal yr and into fiscal 2027

• Gencor cites IIJA funding as supporting backlog and outlook for highway construction equipment

Result Drivers

• LOWER CONTRACT EQUIPMENT REVENUE - Co said revenue fell due to lower contract equipment sales and related freight, citing timing of orders and shipments and a slow start to the season delaying asphalt plant orders

• HIGHER TRADE SHOW EXPENSES - Operating income and net income declined mainly due to a sharp rise in trade show expenses

• IMPROVED GROSS MARGINS - Gross profit margins increased, which co attributed to strong manufacturing execution and effective cost management

Company press release: ID:nGNX9vzmsj

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Revenue	Miss	$33.80 mln	$36.52 mln (1 Analyst)
Q2 Basic EPS		$0.26

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• The average consensus recommendation for the heavy machinery & vehicles peer group is "buy"

• Wall Street's median 12-month price target for Gencor Industries Inc is $18.70, about 25.1% above its June 12 closing price of $14.95

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 16 three months ago

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