GENCOR INDUSTRIES INCGENC

GENCOR INDUSTRIES INC Leases Disclosure

10-KFiled Dec 9, 20252 min read
NOTE 9 - LEASES
The Company leases certain equipment under
non-cancelable
operating leases. Future minimum rental payments under these leases at September 30, 2025 are immaterial. Total rental expense for the fiscal years ended September 30, 2025 and 2024 was $64,000 and $47,000, respectively.
 
On August 28, 2020, the Company entered into a three-year operating lease for property related to the 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 year ended September 30, 2025, operating lease costs were $449,000 and cash payments related to these operating leases were $418,000. For the year ended September 30, 2024, operating lease costs were $432,000 and cash payments related to these operating leases were $463,000.
Other information concerning the Company’s operating lease accounted for under ASC 842 guidelines as of September 30, 2025 and September 30, 2024, is as follows:
 
     September 30, 2025     September 30, 2024  
Operating lease ROU asset included in other long-term assets
    $ 339,000     $ 330,000  
Current operating lease liability
    $ 339,000       330,000  
Weighted average remaining lease term (in years)
      0.92       0.92  
Weighted average discount rate used in calculating ROU asset
      4.5 %      5.0 % 
Future annual minimum lease payments as of September 30, 2025 are as follows:
 
Fiscal Year
    Annual Lease Payments  
2026
    $ 347,000  
Less interest
      (8,000 ) 
  
 
 
  
Present value of lease liabilities
    $ 339,000  
  
 
 
  

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

Income TaxesRevenuePP&ECommitmentsStock CompensationNew Standards