Gencor Industries Inc – ‘S-3’ on 6/12/98

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Registration Statement for Securities Offered Pursuant to a Transaction   —   Form S-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-3         Gencor Form S-3                                       66    382K 
 2: EX-5.1      Opinion re: Legality                                   2±     8K 
 3: EX-23.1     Consent                                                1      6K 
 4: EX-27       Financial Data Schedule                                1      9K 

S-3   —   Gencor Form S-3
Document Table of Contents

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 1998 
                                       REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------- 

FORM S-3
REGISTRATION STATEMENT
UNDER 
THE SECURITIES ACT OF 1933
--------------------- 

GENCOR INDUSTRIES, INC. 
(Exact name of Registrant as specified in its charter)
--------------------- 

                                                                [Download Table]
                                                       
           DELAWARE                    59-0933147      
(State or other jurisdiction of     (I.R.S. Employer   
incorporation or organization)   Identification Number)

5201 N. ORANGE BLOSSOM TRAIL
ORLANDO, FLORIDA 32810
(407) 290-6000
(Address, including zip code, and telephone number, 
including area code, or registrant's principal executive offices) 
--------------------- 

E.J. ELLIOTT
PRESIDENT AND CHAIRMAN OF THE BOARD 
GENCOR INDUSTRIES, INC. 
5201 N. ORANGE BLOSSOM TRAIL
ORLANDO, FLORIDA 32810
(407) 290-6000
(Name, address, including zip code, and telephone number, 
including area code, of agent for service)
--------------------- 

WITH COPIES TO: 

                                                                [Download Table]
                                                                              
     RANDOLPH H. FIELDS, ESQ.                            BART FRIEDMAN, ESQ.  
 GREENBERG TRAURIG HOFFMAN LIPOFF                      CAHILL GORDON & REINDEL
       ROSEN & QUENTEL, P.A.                               80 PINE STREET     
111 NORTH ORANGE AVENUE, SUITE 2000                      NEW YORK, NY 10005   
      ORLANDO, FLORIDA 32801                               (212) 701-3000     
          (407) 420-1000                                                      

--------------------- 

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  As soon as
practicable after this Registration Statement becomes effective.                

If the only securities being registered on this form are being offered  
pursuant to dividend or interest reinvestment plans, please check the following 
box.  [ ]                                                                       

   If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of  
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.  [ ]                               

If this form is filed to register additional securities for an offering 
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier        
effective registration statement for the same offering.  [ ]                    

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering.  [ ]                                                     

  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.  [ ]                                            
--------------------- 

CALCULATION OF REGISTRATION FEE 

                                                        [Enlarge/Download Table]

===============================================================================================================================
                                                                       PROPOSED             PROPOSED                           
                                                    AMOUNT              MAXIMUM              MAXIMUM             AMOUNT OF     
             TITLE OF SECURITIES                     TO BE          OFFERING PRICE          AGGREGATE          REGISTRATION    
              TO BE REGISTERED                   REGISTERED(1)       PER SHARE(2)        OFFERING PRICE             FEE        
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               
Common Stock, par value $.10 per share.......      4,140,000           $24.3125           $100,653,750          $29,692.87     
===============================================================================================================================

(1) Includes shares that may be sold to cover over-allotments.                  
(2) Estimated solely for the purpose of calculating the registration fee        
  pursuant to Rule 457(c), based upon the average of the high and low prices
reported on the American Stock Exchange Composite Tape on June 10, 1998.
--------------------- 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION       
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF  
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME     
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), 
MAY DETERMINE.                                                                  
================================================================================

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A           
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE     
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY    
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES  
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE         
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES 
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR  
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.   

SUBJECT TO COMPLETION, DATED JUNE 12, 1998

3,600,000 SHARES

[LOGO]                      GENCOR INDUSTRIES, INC.                             

COMMON STOCK
($.10 PAR VALUE)

  Of the 3,600,000 shares of Common Stock offered hereby (the "Offering"),
3,000,000 shares are being offered by Gencor Industries, Inc., a Delaware       
corporation (the "Company" or "Gencor"), and 600,000 shares are being offered by
certain stockholders of the Company (the "Selling Stockholders"). See "Principal
and Selling Stockholders." The Company will not receive any of the proceeds from
the sale of the shares by the Selling Stockholders.                             

The capital stock of the Company consists of Common Stock and Class B 
Stock. Each share of Common Stock and Class B Stock is entitled to one vote per 
share on all matters, except that, with respect to the election of directors,   
holders of Class B Stock, voting separately as a class, may elect 75% of the    
members of the board of directors, and holders of Common Stock, voting          
separately as a class, may elect the remaining 25% of the members of the board  
of directors.                                                                   

The Company's Common Stock is listed on the American Stock Exchange   
("AMEX") under the symbol "GX." On June 10, 1998, the last reported sale price  
of the Common Stock on the AMEX Composite Tape was $24.25 per share.            

    SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.                             

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. 

                                                        [Enlarge/Download Table]

============================================================================================================
                                                  UNDERWRITING                                PROCEEDS      
                                PRICE TO          DISCOUNTS AND         PROCEEDS TO          TO SELLING     
                                 PUBLIC          COMMISSIONS(1)         COMPANY(2)          STOCKHOLDERS    
------------------------------------------------------------------------------------------------------------
                                                                                                            
Per Share.................          $                   $                    $                    $         
------------------------------------------------------------------------------------------------------------
Total(3)..................         $                   $                    $                    $          
============================================================================================================

(1) The Company and the Selling Stockholders have agreed to indemnify the       
several Underwriters against certain liabilities, including liabilities 
under the Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."                                                         
(2) Before deducting expenses payable by the Company estimated at $350,000.     
(3) The Company has granted to the Underwriters a 30-day option to purchase up  
to 540,000 additional shares of Common Stock solely to cover            
over-allotments. If this option is exercised in full, the total Price to
    Public, Underwriting Discounts and Commissions, and Proceeds to Company will
    be $         , $         , and $         , respectively. See "Underwriting."

    The shares of Common Stock offered hereby are being offered by the several
Underwriters, subject to prior sale, when, as and if accepted by them and       
subject to certain prior conditions including the right of the Underwriters to  
reject any order in whole or in part. It is expected that the Common Stock will 
be available for delivery on or about             , 1998 at the offices of      
Schroder & Co. Inc., New York, New York.                                        

SCHRODER & CO. INC.                                                             
MCDONALD & COMPANY                                    
SECURITIES, INC.                          
         CREDIT LYONNAIS SECURITIES (USA) INC.
                            BLUESTONE CAPITAL PARTNERS, L.P.

            , 1998

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ARTWORK -- WORLD MAP, 
NOTING LOCATIONS OF FACILITIES
OF THE COMPANY
[INSIDE FRONT COVER]

[FOLD OUT -- PHOTOGRAPHS OF COMPANY PRODUCTS] 

   CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,     
INCLUDING OVERALLOTMENT, STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS AND  
THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE      
"UNDERWRITING."                                                                 

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PROSPECTUS SUMMARY

 The following summary is qualified in its entirety by the more detailed
information and the consolidated financial statements and notes thereto         
appearing elsewhere, or incorporated by reference, in this Prospectus. As used  
in this Prospectus, unless the context indicates otherwise, the terms "Company" 
and "Gencor" refer to Gencor Industries, Inc. and its subsidiaries. Unless      
otherwise indicated, or the context otherwise requires, all information in this 
Prospectus (i) is based on the assumption that the Underwriters' over-allotment 
option is not exercised and (ii) gives retroactive effect to the two-for-one    
split of the Common Stock in May 1998 and the two-for-one split of the Common   
Stock in May 1997 (the "Stock Splits").                                         

THE COMPANY 

OVERVIEW                                                                        

The Company is a leading manufacturer of process machinery for a wide 
variety of end-markets. Products include machinery used in the production of    
highway construction materials such as hot-mix asphalt, and machinery used to   
produce food products such as pelletized animal feeds, edible oils, sugar and   
citrus juices. The Company believes it has significant market share positions in
its principal product lines. The Company's products are manufactured in 13      
plants in the United States, Asia, Australia, Europe and South America and are  
sold through a combination of Company sales representatives, independent dealers
and agents located throughout the world. The Company operates in two business   
groups: the Construction Equipment Group ("CEG") and the Consolidated Process   
Machinery Group ("CPM"). The core product in each group is "process machinery," 
designed to process and transform bulk materials into end products. As a result 
of the similar technologies shared by both business groups, the Company believes
it is realizing operational synergies.                                          

    CEG, which accounted for 46.2% of the Company's total consolidated revenue
for the six month period ended March 31, 1998, designs and manufactures         
machinery and related equipment used for the production of asphalt and highway  
construction materials. CEG's principal products include asphalt plants,        
combustion systems and fluid heat transfer systems. CEG's technical and design  
capabilities, environmentally friendly process technology and wide range of     
products have enabled it to become a leading producer of asphalt production     
equipment worldwide. The Company believes CEG has the largest installed base of 
asphalt production plants in the United States.                                 

     CEG's products are sold primarily to the highway construction industry. The
principal factors driving demand for CEG's products are the level of government 
funding for domestic highway construction and repair, infrastructure development
in emerging economies, the need for spare parts and a trend towards larger      
plants (e.g. drum mix asphalt production) resulting from asphalt production     
plant consolidation. On June 9, 1998, President Clinton signed the              
Transportation Equity Act for the 21st Century into law (the "Transportation    
Act"). The Transportation Act significantly increases authorized funding levels 
for transportation infrastructure and services. The Transportation Act, which is
part of an overall effort to rebuild and repair aging interstate roads and      
highways, raised highway funding levels to approximately $28 billion per year   
over the next six years (compared to the approximately $20 billion that was     
authorized for 1997). The Company believes that this legislation will lead to an
increase in demand for CEG's products.                                          

    CPM, which accounted for 53.8% of the Company's total consolidated revenue
for the six month period ended March 31, 1998, designs and manufactures process 
machinery used in the production of scientifically compounded animal feeds,     
edible oils, sugar and fruit juice concentrates. CPM's products include pellet  
mills, crushers, flakers, grinders, crystallizers, centrifuges and equipment    
used to concentrate juices, including presses, evaporators, heat exchangers and 
dryers. The Company believes CPM has the largest installed base of pelleting and
grinding equipment in the world and that CPM's customers recognize its products 
for their reliability and technology. The                                       
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Company believes that its large installed base provides it with an advantage    
relative to its competition in continuing to grow its aftermarket sales.        

 CPM's products are sold primarily to commercial agricultural companies,
integrated food producers, feed mills and food processing companies. CPM's      
machinery enables its customers to manufacture food products more efficiently   
and is a widely accepted method of scientifically processing animal feed. Over  
the past several years, the domestic food processing machinery industry has     
experienced strong growth, partly as a result of rising demand from overseas    
markets which are increasingly adopting U.S. food production technologies. The  
Company believes that as living standards continue to improve worldwide,        
particularly in emerging economies, and the fragmented food processing industry 
continues to consolidate, demand will continue to grow for CPM's products.      

   The Company generated sales for the six month period ended March 31, 1998
of $117.7 million, compared to sales of $83.9 million for the six month period  
ended March 31, 1997. Of the increase of $33.8 million, approximately $8.9      
million is attributable to organic growth in the Company's continuing           
operations, while approximately $24.9 million resulted from the inclusion, in   
the most recent period, of Gumaco Industria E Comercio Limitada and other       
related companies ("Gumaco"), which the Company acquired effective July 1, 1997 
and ACP Holdings PLC ("ACP"), which the Company acquired effective October 1,   
1997. Operating income for the six month period ended March 31, 1998 was $14.6  
million compared to operating income of $6.2 million for the six month period   
ended March 31, 1997. Approximately 35% of sales for the six months ended March 
31, 1998 were generated outside of North America.                               

BUSINESS STRATEGY                                                               

   The Company's goal is to continue to improve its position as a technology
and industry leader in markets driven by the essential needs and demands of a   
growing world population. Beginning in 1996, the Company undertook certain      
strategic initiatives designed to facilitate growth and further increase        
shareholder value.                                                              

   Capitalize on Product and Market Synergies.  The Company believes that it
can realize significant synergies by sharing technologies across its different  
product lines. For example, while CPM currently supplies centrifuges and        
crystallization towers which are used in the crystallization phase of sugar     
processing, management believes that by incorporating technology from its other 
business groups, the Company can develop new products such as dryers, conveyors 
and thermal fluid heat transfer systems to expand its presence in the entire    
sugar production process. The Company also recently developed synthetic fuel    
production plants which utilize components from both its CEG and CPM product    
lines and which created an additional market for the Company's products.        

Expand International Markets and Sales.  In the six month period ended
March 31, 1998, international sales constituted approximately 35% of total      
revenues. The Company has manufacturing facilities in eight countries and       
believes that international demand for its products is growing at a faster rate 
than domestic demand. The Company intends to expand its independent sales       
representative network outside North America in order to strengthen its market  
share in Latin America and the Pacific Rim. The Company also intends to utilize 
its substantial Brazilian manufacturing capacity to produce other CEG and CPM   
products in order to further penetrate South American markets.                  

    Grow Aftermarket Sales.  The Company intends to utilize its installed base
of asphalt and food processing equipment to expand its aftermarket sales. In    
addition, the Company has recently committed to make significant capital        
expenditures to further improve the profitability of the replacement parts      
portion of its pelleting business. The Company plans to purchase equipment that 
will enable the Company to manufacture replacement parts at less cost than it   
currently incurs. The Company also recently initiated restructuring in its parts
sales operations to intensify telemarketing and to expand aftermarket sales in  
all of its business groups.                                                     

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Develop New Technological Innovations and Product Applications.  The  
Company continually works with its customers to develop new and more efficient  
products to meet their needs. The Company intends to continue to focus on       
research and development so that it remains the leading technological innovator 
in its industry. The Company utilizes technologies involving advanced concepts  
and disciplines in environmental regulatory compliance, fuel efficiency, energy 
conservation, heat release and recovery, and noise attenuation and environmental
compatibility in manufacturing machinery and plants. For example, one of the    
Company's subsidiaries developed the counterflow technology in asphalt plants,  
which recaptures and burns emissions and vapors resulting in a cleaner and more 
efficient manufacturing process.                                                

     Emphasize Operating Efficiencies.  The Company continually seeks to improve
the profitability of its operations by maximizing the efficiency of its         
facilities while tightening controls on its operating and administrative costs. 
The Company believes that such efforts have resulted in higher marginal returns 
due to substantial improvements in throughput, capacity utilization and         
organizational efficiency.                                                      

 Pursue Strategic Acquisitions.  A key component of the Company's growth
strategy is the acquisition of complementary businesses that can effectively    
increase the Company's market share and operating efficiencies, while           
simultaneously expanding the Company's customer base and international presence.
Some of the Company's businesses operate in fragmented industries which present 
consolidation opportunities. The Company will typically target acquisition      
candidates with (i) earnings accretion potential, (ii) complementary product    
lines and technologies, (iii) established technological and market leadership,  
(iv) opportunities for economies of scale and synergies with the Company, (v)   
solid growth potential, and (vi) international exposure. The Company believes   
that its experience in identifying, completing, integrating and managing        
acquisitions, as well as its reduced debt level, pro forma for the Offering,    
position the Company favorably to execute this strategy.                        

The following table summarizes the Company's history of principal     
acquisitions:                                                                   

                                                                [Download Table]

YEAR               ACQUISITION                        PRINCIPAL PRODUCTS          
----  -------------------------------------  -------------------------------------
                                                                                  
1985  Beverley Group Ltd.                    Thermal fluid heaters and industrial 
                                             incinerators                         
1986  Hy-Way Heat Company, Inc.              Fluid heat transfer systems and      
                                             specialty tanks                      
1986  Bituma-Stor, Inc. and its wholly       Asphalt plants and hot mix asphalt   
      owned subsidiary, Bituma Corporation   storage silos                        
1988  The Davis Line and its wholly owned    Batch mix asphalt plants, specialty  
      subsidiary, Midwest Tank and           tanks and other products             
      Construction Holding Corporation                                            
1996  Process Equipment Division of          Pelleting, grinding, flaking, sugar  
      Ingersoll-Rand Company ("PED")         processing and filtration equipment  
1997  Gumaco Industria E Comercio Limitada   Citrus processing machinery and      
      and other South American companies     equipment                            
1997  ACP Holdings PLC and subsidiaries      Road construction and crushing       
                                             machinery                            

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RECENT DEVELOPMENTS                                                             

Following its business strategy to capitalize on product and market   
synergies, the Company recently developed synthetic fuel production plants which
utilize components from both its CEG and CPM product lines and which created an 
additional market for the Company's products. In June 1998, the Company         
finalized agreements with Carbontronics, LLC ("Carbontronics") pursuant to which
Gencor is obligated to manufacture and install four synthetic fuel production   
plants ("Fuel Plants") at three separate sites. Pursuant to agreements with     
Carbontronics, Gencor will receive a 40% equity interest in Carbontronics and is
to receive a total of approximately $26 million for its machinery and           
technology. The economic benefits realizable by the Company on its equity       
interests depend, among other factors, on the plants being able to qualify for  
tax credits under Section 29 of the Internal Revenue Code of 1986 (the "Code"), 
and on the ability to produce and successfully market synthetic fuel, if any,   
produced by the Fuel Plants. Each Fuel Plant must be placed in service before   
July 1, 1998 in order for tax credits to be available on the output of the      
plant. See "Risk Factors -- Synthetic Fuel Investment."                         

* * * 

  The Company's executive offices are located at 5201 North Orange Blossom
Trail, Orlando, Florida 32810, telephone (407) 290-6000.                        

THE OFFERING

                                                        [Enlarge/Download Table]
                                                                                         
Common Stock offered by:                                                                 
  The Company................................  3,000,000 shares(1)                       
  The Selling Stockholders...................    600,000 shares                          
                                              ------------                               
          Total..............................  3,600,000 shares                          
                                              ============                               

Common Stock outstanding after the Offering.. 10,045,740 shares(1)(2)                    
Class B Stock outstanding after the                                                      
  Offering...................................  1,766,128(3)                              
                                              ------------                               
          Total common stock outstanding                                                 
            after the Offering............... 11,811,868(4)                              
                                              ============                               

Use of proceeds.............................. For repayment of debt and general corporate
                                              purposes                                   

AMEX symbol.................................. GX                                         

---------------                                                                 

(1) Does not include up to 540,000 shares of Common Stock to be sold by the     
Company if the Underwriters' over-allotment option is exercised in full.

(2) Does not include 350,000 shares of Common Stock issuable upon the exercise  
of stock options outstanding as of April 30, 1998.                      

(3) Shares of Class B Stock may be converted into shares of Common Stock on a   
 share for share basis. Does not include 1,616,000 shares of Class B Stock
issuable upon the exercise of stock options outstanding as of April 30, 
  1998. See "Description of Capital Stock -- Conversion Rights Applicable to
Class B Stock."                                                         

(4) Assumes conversion of the Class B Stock into shares of Common Stock. See    
"Description of Capital Stock -- Conversion Rights Applicable to Class B
Stock."                                                                 

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SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except per share amounts and percentages)

                                                        [Enlarge/Download Table]

                                                                                  SIX MONTHS ENDED  
                                                   YEARS ENDED SEPTEMBER 30,         MARCH 31,      
                                                  ----------------------------   ------------------ 
                                                   1995      1996       1997      1997       1998   
                                                  -------   -------   --------   -------   -------- 
                                                                                                    
INCOME STATEMENT DATA:                                                                              
Net revenue...................................... $58,944   $60,208   $195,313   $83,936   $117,667 
Gross profit(1)..................................  16,181    15,674     52,435    23,275     38,395 
Operating income.................................   3,871     5,240     18,206     6,168     14,566 
Income before income taxes.......................   3,125     3,951     11,021     3,341      9,504 
Net income.......................................   2,537     2,756      6,896     2,143      5,893 
Diluted income per share(2)...................... $  0.36   $  0.38   $   0.74   $  0.24   $   0.60 
Weighted average shares outstanding..............   7,047     7,163      9,326     8,826      9,883 
Dividends paid per share......................... $    --   $0.0125   $ 0.0125   $0.0125   $ 0.0250 
AS ADJUSTED FOR THE OFFERING(3):                                                                    
Net income.......................................                     $ 10,616             $  7,753 
Diluted income per share.........................                         0.86                 0.60 
Weighted average shares outstanding..............                       12,326               12,883 
OTHER FINANCIAL DATA:                                                                               
Depreciation and amortization.................... $   757   $   695   $  4,445   $ 2,659   $  3,190 
Capital expenditures.............................     454     1,397      1,580     1,259      2,230 
Gross margin.....................................    27.4%     26.0%      26.8%     27.7%      32.6%
Operating margin.................................     6.6%      8.7%       9.3%      7.3%      12.4%

                                                        [Enlarge/Download Table]

                                                               AS OF MARCH 31, 1998   
                                                             -------------------------
                                                              ACTUAL    AS ADJUSTED(3)
                                                             --------   --------------
                                                                                      
BALANCE SHEET DATA:                                                                   
Working capital............................................. $ 42,178      $ 42,178   
Total assets................................................  182,508       182,508   
Total debt..................................................   91,205        22,624   
Shareholders' equity........................................   26,802        95,383   
Total debt to total capitalization(4).......................     77.3%         19.2%  

---------------                                                                 

(1) Equals Net Revenue less Production costs.                                   

(2) Retroactively restated to effect the adoption of SFAS 128, "Earnings Per    
Share."                                                                 

(3) As adjusted to reflect the sale by the Company of 3,000,000 shares of Common
  Stock at an assumed offering price of $24.25 per share and the application
of net proceeds therefrom as set forth under "Use of Proceeds."         

(4) Total capitalization reflects the total of long-term debt and stockholders' 
equity.                                                                 

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RISK FACTORS

This Prospectus and certain of the documents incorporated herein by   
reference contain forward-looking statements that involve risks and             
uncertainties. Statements in this Prospectus regarding future financial         
performance and other statements containing the words "expect," "believe,"      
"anticipate," "project," "estimate," "predict," "intend" and similar expressions
are forward-looking statements. The Company's actual results could differ       
materially from those anticipated in such forward-looking statements as a result
of a variety of factors, including those set forth in the following risk factors
and elsewhere in this Prospectus. Prospective investors should consider         
carefully the following factors, in addition to other information contained in  
this Prospectus, prior to making an investment in the Common Stock.             

INTERNATIONAL EXPOSURE                                                          

 In the first six months of fiscal 1998, international sales represented
approximately 35% of the Company's total revenues. The Company anticipates that 
international operations will continue to account for a significant portion of  
its business for the foreseeable future. As a result, the Company may be subject
to certain risks, including difficulty in staffing and managing foreign         
subsidiary operations, difficulty in managing distributors and dealers, adverse 
tax consequences, political and economic instability of governments, and        
difficulty in accounts receivable collection. The Company is subject to the     
risks associated with the imposition of protective legislation and regulations, 
including those relating to import or export or otherwise resulting from trade  
or foreign policy, in the nations in which it now or in the future will conduct 
business. The Company cannot predict whether quotas, duties, taxes or other     
charges or restrictions will be implemented by the U.S. or any other country    
upon the import or export of the Company's products. There can be no assurance  
that any of these factors, or the adoption of restrictive policies, will not    
have a material adverse effect on the Company's business, financial condition   
and results of operations. In addition, the Company denominates some sales by   
foreign subsidiaries in local currency, and an increase in the relative value of
the dollar against such currencies may lead to a reduction in sales and         
earnings. The Company's foreign currency exposures generally are not hedged and 
there can be no assurance that the Company's future results of operations and   
investments will not be adversely affected by currency fluctuations.            

ACQUISITION STRATEGY; INTEGRATION OF ACQUIRED BUSINESSES                        

As part of its growth strategy, the Company intends to evaluate the   
acquisitions of other companies, assets or product lines that would complement  
or expand its existing businesses or broaden its customer relationships.        
Although the Company conducts due diligence reviews of potential acquisition    
candidates, the Company may not be able to identify all material liabilities or 
risks related to potential acquisition candidates. There can be no assurance    
that the Company will be able to locate and acquire any business, retain key    
personnel and customers of an acquired business or integrate any acquired       
business successfully, including the recent acquisitions of PED, Gumaco and ACP.
Additionally, there can be no assurance that financing for any acquisition, if  
necessary, will be available on acceptable terms, if at all, or that the Company
will be able to accomplish its strategic objectives in connection with any      
acquisition. Although the Company periodically considers possible acquisitions, 
no specific acquisitions are probable as of the date of this Prospectus. See    
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations," and "Business -- Business Strategy."                               

INDEBTEDNESS; FINANCIAL COVENANTS                                               

    Upon completion of the Offering, the Company will have outstanding debt of
approximately $22.6 million, representing 19.2% of its total capitalization. The
Company's strategy contemplates continued strategic acquisitions, and a portion 
of the cost of such acquisitions may be financed through additional             
indebtedness. There can be no assurance that financing will continue to be      
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available on terms acceptable to the Company or at all. In the absence of such  
financing, the Company's ability to respond to changing business and economic   
conditions, to fund scheduled investments and capital expenditures, to make     
future acquisitions and to absorb adverse operating results may be adversely    
affected. See "Management's Discussion and Analysis of Financial Condition and  
Results of Operations -- Liquidity and Capital Resources."                      

    The Senior Secured Credit Agreement dated December 10, 1996, as amended to
date (the "Credit Facility") between the Company and the lenders party thereto  
imposes certain financial and operating covenants upon the Company, including,  
among others, restrictions on the ability of the Company to incur debt, or take 
certain other corporate actions. The Credit Facility also limits the amount of  
cash dividends that the Company may pay to a maximum of $250,000 per year,      
subject to compliance with other loan covenants. The Company was in compliance  
with these covenants as of March 31, 1998. In addition, the Credit Facility     
requires that the Company maintain certain financial ratios and provides for    
limitations on capital expenditures. The foregoing covenants may restrict the   
Company's ability to obtain additional funds, dispose of assets, or otherwise   
pursue its business strategies, and may impair the Company's ability to obtain  
additional financing to fund future working capital requirements, capital       
expenditures, acquisitions and other general corporate purposes. Changes in     
economic or business conditions, results of operations or other factors could in
the future cause a violation of one or more covenants in the Credit Facility.   

CYCLICALITY OF DEMAND FOR COMPANY PRODUCTS                                      

     Demand for the Company's products depends in part upon the level of capital
and maintenance expenditures by its industrial customers, in particular those by
the highway construction industry, commercial agricultural companies, integrated
food producers, feed mills and food processing and production companies. These  
industries historically have been cyclical in nature and vulnerable to general  
downturns in the economy. Decreases in industry spending could have a material  
adverse effect upon demand for the Company's products and the Company's         
business, financial condition and results of operations.                        

The agricultural industry serviced by the Company is susceptible to   
fluctuations caused by adverse weather, natural disasters, disease, governmental
policies and similar adversities and factors beyond the Company's control. For  
example, as a result of the slaughter of animals caused by Mad Cow Disease and  
Swine Flu, there was a reduction of shipments of pelleting equipment to Europe  
by the Company's food processing division in the first six months of fiscal     
1998. In addition, the effect on the Brazilian orange crop of adverse weather   
during the 1997 growing season may impact demand for the Company's products by  
the Brazilian citrus industry. General downturns in the agricultural sector, as 
well as the highway construction industry, could have a material adverse effect 
on the Company's business, financial condition and results of operations. See   
also "-- Quarterly Variations of Operating Results."                            

QUARTERLY VARIATIONS OF OPERATING RESULTS                                       

   The Company's operating results historically have fluctuated from quarter
to quarter as a result of a number of factors, including the value, timing and  
shipment of individual orders and the mix of products sold. Moreover, although  
revenues from certain large system contracts are recognized using the percentage
of completion method of accounting, the Company generally recognizes product    
revenues upon shipment of its products. Accordingly, revenue in any quarter is  
primarily dependent on product shipment.                                        

The Company's asphalt production equipment operations are subject to  
seasonal fluctuation, which may lower sales and result in possible losses in the
first and fourth fiscal quarters of each year. Traditionally, asphalt producers 
do not purchase new equipment for shipment during the summer and fall months to 
avoid disruption of their activities during peak periods of highway             
construction. Pelleting and other food production equipment products are less   
seasonal, but may                                                               

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result in lower demand in the second and third fiscal quarters. The Company     
expects seasonality to have less of an influence on future results of operations
as it continues to add new companies and products and to grow in international  
markets. However, there can be no assurance that such additions and growth will 
reduce the seasonality of its product lines. See "Management's Discussion and   
Analysis of Financial Condition and Operations -- Overview."                    

COMPETITION                                                                     

  The highway construction machinery and food process machinery industries
are highly competitive. In each of the lines of business in which the Company   
provides goods and services, it competes with a variety of companies, many of   
which have greater financial and other resources than the Company, or are       
subsidiaries or divisions of larger organizations. In addition, the Company may 
encounter competition from new market entrants. There can be no assurance that  
competitors will not take actions, including developing new products, which     
could adversely affect the Company's sales and operating results. See           
"Business -- Industry Overview" and "Business -- Competition."                  

DEPENDENCE ON KEY PERSONNEL                                                     

     The success of the Company's business will continue to depend substantially
upon the efforts, abilities and services of its executive officers and certain  
other key employees. The loss of one or more key employees could adversely      
affect the Company's operations. The Company's ability to attract and retain    
qualified engineers and other professionals, either through direct hiring, or   
acquisition of other businesses employing such professionals, will also be an   
important factor in determining the Company's future success.                   

INTELLECTUAL PROPERTY MATTERS                                                   

 The Company holds numerous patents covering technology and applications
related to various products, equipment and systems, and numerous trademarks and 
trade names registered with the U.S. Patent and Trademark Office and in various 
foreign countries. There can be no assurance as to the breadth or degree of     
protection that existing or future patents or trademarks may afford the Company,
or that any pending patent or trademark applications will result in issued      
patents or trademarks, or that the Company's patents, registered trademarks or  
patent applications, if any, will be upheld if challenged, or that competitors  
will not develop similar or superior methods or products outside the protection 
of any patents issued, licensed or sublicensed to the Company. Although the     
Company believes that none of its patents, technologies, products or trademarks 
infringe upon the patents, technologies, products or trademarks of others, it is
possible that its existing patent, trademark or other rights may not be valid or
that infringement of existing or future patents, trademarks or proprietary      
rights may occur. In the event that the Company's products are deemed to        
infringe upon the patent or proprietary rights of others, the Company could be  
required to modify the design of its products, change the name of its products  
or obtain a license for the use of certain technologies incorporated into its   
products. There can be no assurance that the Company would be able to do any of 
the foregoing in a timely manner, upon acceptable terms and conditions, or at   
all, and the failure to do so could have a material adverse effect on the       
Company. In addition, there can be no assurance that the Company will have the  
financial or other resources necessary to enforce or defend a patent, registered
trademark or other proprietary right, and, if the Company's products are deemed 
to infringe upon the patents, trademarks or other proprietary rights of others, 
the Company could become liable for damages, which could also have a material   
adverse effect on the Company. See "Business -- Licenses, Patents and           
Trademarks."                                                                    

PRODUCT LIABILITY                                                               

The Company is engaged in a business that could expose it to possible 
liability claims for personal injury or property damage due to alleged design or
manufacturing defects in the Com-                                               
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pany's products. The Company believes that it meets existing professional       
specification standards recognized or required in the industries in which it    
operates, and has had no material product liability claims brought against it as
of the date hereof. Although the Company currently maintains product liability  
coverage which it believes is adequate for the continued operation of its       
business, such insurance may prove inadequate or become difficult to obtain or  
unobtainable in the future on terms acceptable to the Company.                  

ENVIRONMENTAL MATTERS                                                           

   The Company's operations are subject to federal, state, local and foreign
laws and regulations relating to the protection of the environment. Sanctions   
for noncompliance may include revocation of permits, corrective action orders,  
administrative or civil penalties and criminal prosecution. The Company's       
business involves environmental management and issues typically associated with 
historical manufacturing operations. To date, the Company's cost of complying   
with environmental laws and regulations has not been material, but the fact that
such laws or regulations are changed frequently makes predicting the cost or    
impact of such laws and regulations on its future operations uncertain. See     
"-- Government Regulations" and "Business -- Environmental Matters."            

SUPPLY AND PRICE OF RAW MATERIALS                                               

The principal raw materials used by the Company are steel and related 
products. The Company has no long-term supply agreements with any of its major  
suppliers. However, the Company has generally been able to obtain sufficient    
supplies of raw materials for its operations, and changes in prices of such     
materials historically have not had a significant effect on its operations.     
Although the Company believes that such raw materials are readily available from
alternate sources, an interruption in the Company's supply of steel and related 
products or a substantial increase in the price of any of these raw materials   
could have a material adverse effect on the Company's business, financial       
condition and results of operations. See "Business -- Sources of Supply and     
Manufacturing."                                                                 

SYNTHETIC FUEL INVESTMENT                                                       

   Whether or not the Company will realize economic benefits from its equity
interest in Carbontronics will depend, among other factors, on the Fuel Plants  
being able to qualify for tax credits under Section 29 of the Code and on the   
ability to produce and successfully market synthetic fuel, if any, produced by  
the Fuel Plants. Qualification for tax credits with regard to the synthetic fuel
projects requires satisfying a number of statutory criteria, and there can be no
guarantee that all of these criteria will be met. Section 29 of the Code imposes
a requirement that a qualified project must be placed in service before July 1, 
1998. Failure to meet this and other statutory requirements for any project     
could lead to the disqualification for tax credits. Tax credits are based on the
heating value of the synthetic fuel produced and sold to unrelated parties. See 
"Prospectus Summary -- Recent Developments."                                    

Construction of each Fuel Plant and its related feed stock preparation
facility involves a substantial number of risks, including shortages of         
equipment, material and labor, work stoppages, labor disputes, weather          
interference, unforeseen engineering, environmental and geological problems and 
unanticipated cost increases. Difficulties in obtaining any requisite licenses  
or permits could adversely affect the design, cost, completion or operation of a
Fuel Plant. The Fuel Plant technology and equipment manufactured by the Company 
has only recently been developed and there can be no assurance that any of the  
Fuel Plants will operate as intended or that the technology to be employed in   
the projects will result in commercially viable synthetic fuel products.        
Operation of the Fuel Plants involves various risks, including the potential for
breakdown or failure of equipment, the inability to obtain adequate supplies of 
suitable feed stock or binder material, or performance of the equipment below   
expected levels of output or efficiency, failure to keep on hand adequate       
supplies of spare parts or other raw materials, operator error, utility         
unavailability and catastrophic                                                 
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events such as fires, floods and earthquakes. There is no assurance that the    
synthetic fuel to be produced by the Fuel Plants can be marketed at prices and  
on terms that are financially advantageous.                                     

 The synthetic fuel projects will be required to comply with a number of
statutes and regulations relating to the health and safety of personnel and the 
public, including the identification, generation, storage, handling,            
transportation, disposal, record keeping, relating and reporting of and         
emergency response in connection with materials relating to the facility that   
may be hazardous or toxic, safety and health standards, practices and procedures
applicable to construction and operation of the facility, and environmental     
protection requirements including standards and limitations relating to the     
discharge of air and water pollutants and discharge of solid waste. See         
"Risks -- Environmental Matters."                                               

GOVERNMENT REGULATIONS                                                          

     The Company is subject to a variety of governmental regulations relating to
the manufacturing of the Company's products. Any failure by the Company to      
comply with present or future regulations could subject it to future            
liabilities, or the suspension of production that could have a material adverse 
effect on the Company's results of operations. Such regulations could also      
restrict the Company's ability to expand its facilities, or could require the   
Company to acquire costly equipment or to incur other expenses to comply with   
such regulations. Although the Company believes it has the design and           
manufacturing capability to meet all industry or governmental agency standards  
that may apply to its product lines, including all domestic and foreign         
environmental, structural, electrical and safety codes, there can be no         
assurance that governmental laws and regulations will not become more stringent 
over time, imposing greater compliance costs and increasing risks and penalties 
associated with a violation. The cost to the Company of such compliance to date 
has not materially affected the Company's business, financial condition or      
results of operations. There can be no assurance, however, that violations will 
not occur in the future as a result of human error, equipment failure or other  
causes. The Company's customers are also subject to extensive regulations,      
including those related to the workplace. The Company cannot predict the nature,
scope or effect of governmental legislation, or regulatory requirements that    
could be imposed or how existing or future laws or regulations will be          
administered, or interpreted. Compliance with more stringent laws or            
regulations, as well as more vigorous enforcement policies of regulatory        
agencies, could require substantial expenditures by the Company and could       
adversely affect the Company's business, financial condition and results of     
operations.                                                                     

YEAR 2000 COMPLIANCE                                                            

    Many existing computer systems and applications, and other control devices
use only two digits to identify a year in the date field, without considering   
the impact of the upcoming change in the century. As a result, such systems and 
applications could fail or create erroneous results unless corrected so that    
they can process data related to the year 2000. The Company relies on its       
computer systems, applications and devices in operating and monitoring all major
aspects of its business, including financial systems, customer services,        
infrastructure, embedded computer chips, networks and telecommunications        
equipment and end products. The Company is in the process of upgrading its      
software to address the year 2000 issue. The Company currently estimates that   
the costs associated with the year 2000 issue, and the consequences of          
incomplete or untimely resolution of the year 2000 issue, will not have a       
material adverse effect on the results of operations or financial position of   
the Company.                                                                    

EFFECTIVE VOTING CONTROL BY PRINCIPAL STOCKHOLDERS                              

 The Company's executive officers and directors will beneficially own an
aggregate of approximately 16.8% of the outstanding shares of Common Stock after
this Offering (approximately 15.9% if the Underwriters' over-allotment option is
exercised in full). Moreover, the Company's executive                           
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officers and directors beneficially own an aggregate of approximately 96.0% of  
the outstanding shares of the Company's $.10 par value Class B Stock ("Class B  
Stock"). The Class B Stock is entitled to elect 75% (calculated to the nearest  
whole number, rounding five-tenths to next highest whole number) of the members 
of the board of directors of the Company. As a result, these stockholders can   
elect more than a majority of the board of directors of the Company and exercise
significant influence over most matters requiring approval by the Company's     
stockholders. This concentration of control may also have the effect of delaying
or preventing a change in control of the Company. See "Description of Capital   
Stock -- Antitakeover Effects of the Provisions of the Charter and By-Laws and  
of Delaware Law."                                                               

SHARES ELIGIBLE FOR FUTURE SALE                                                 

   Upon completion of this Offering, the Company will have 10,045,740 shares
of Common Stock outstanding (10,585,740 shares if the Underwriters'             
over-allotment option is exercised in full), substantially all of which will be 
freely tradeable without restriction or further registration under the          
Securities Act other than shares held by "affiliates" of the Company, as that   
term is defined in Rule 144 under the Securities Act. The Company, together with
its executive officers and directors and the Selling Stockholders, who in the   
aggregate will own or have the right to acquire 1,914,000 shares of Common Stock
upon completion of the Offering, have agreed that they will not directly or     
indirectly offer, sell or otherwise dispose of any shares of Common Stock, or   
other securities convertible into, or exercisable or exchangeable for, any      
shares of Common Stock of the Company without the prior written consent of the  
Underwriters for a period of 180 days from the date of this Prospectus, with the
exception of shares of Common Stock that the Company may issue in connection    
with acquisitions that may be made in the future or pursuant to the exercise of 
stock options. From time to time the Company may issue shares of Common Stock in
acquisition transactions and in respect thereof, may be required to register the
sale of such shares under the Securities Act. In such event, such shares would  
be freely tradeable during the effectiveness of any such registration unless    
subject to other restrictions. Sales of a substantial number of shares of Common
Stock in the public market following this Offering, or the perception that such 
sales might occur after the applicable restrictions thereupon lapse could have a
material adverse effect on the market price of the Common Stock.                

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USE OF PROCEEDS 

     The net proceeds from the sale of the 3,000,000 shares (3,540,000 shares if
the Underwriters' over-allotment option is exercised in full) of Common Stock   
offered by the Company hereby (at an assumed public offering price of $24.25 per
share and after deducting the underwriting discount and estimated offering      
expenses payable by the Company) are estimated to be approximately $68.6 million
($81.0 million if the Underwriters' over-allotment option is exercised in full).
The Company intends to use net proceeds from the sale of the shares offered by  
it hereby to repay outstanding term loans under its Credit Facility, thereby    
improving the Company's capital structure and enabling it to continue to pursue 
its acquisition strategy.                                                       

The Company entered into the Credit Facility on December 10, 1996 in  
conjunction with its acquisition of CPM and has amended such Credit Facility to 
provide for, among other things, the Gumaco and ACP acquisitions during the     
second half of calendar 1997. Pursuant to the Credit Facility at April 30, 1998,
the Company had $63.7 million in the aggregate outstanding under three term     
loans, and, may borrow up to $48 million under its revolving credit facility.   
The term loans amortize to maturity at various dates commencing December 2001   
through December 2004, respectively. The revolving credit facility matures      
December 2001. At April 30, 1998 the Company had an aggregate of $30 million in 
borrowings outstanding under its revolving credit facility. The weighted average
interest rate for all borrowings under these credit facilities was 8.6% for     
fiscal 1997. The indebtedness incurred under the Credit Facility was used to    
finance working capital needs, capital expenditures and recent acquisitions.    

   The Company will not receive any of the proceeds from the sale of 600,000
shares by the Selling Stockholders.                                             

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PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY 

     The Company's Common Stock is traded on the AMEX under the symbol "GX." The
following table sets forth, for the quarterly periods indicated, the high and   
low sale prices of the Common Stock, as reported on the American Stock Exchange,
and the cash dividends paid on the Common Stock.                                

                                                        [Enlarge/Download Table]

                                                                               DIVIDENDS PAID
                                                              HIGH      LOW      PER SHARE   
                                                             -------  -------  --------------
                                                                                             
FISCAL 1996                                                                                  
  First Quarter............................................. $ 2.750  $ 1.875                
  Second Quarter............................................   2.312    1.875     $0.0125    
  Third Quarter.............................................   2.656    2.875                
  Fourth Quarter............................................   4.250    1.875                
FISCAL 1997                                                                                  
  First Quarter.............................................   4.625    3.250      0.0125    
  Second Quarter............................................   5.187    3.687                
  Third Quarter.............................................   7.500    3.656                
  Fourth Quarter............................................   8.093    5.687                
FISCAL 1998                                                                                  
  First Quarter.............................................  10.312    5.812      0.0250    
  Second Quarter............................................  15.906    9.718                
  Third Quarter (through June 10, 1998).....................  27.500   13.563                

  On June 10, 1998, the last sale price of the Common Stock as reported on
the AMEX Composite Tape was $24.25 per share. As of May 6, 1998, there were 430 
holders of record of the Common Stock. The Company estimates that approximately 
2,560 additional stockholders own Common Stock held for their accounts at       
brokerage firms and financial institutions.                                     

    The payment of cash dividends by the Company has been and will continue to
be at the discretion of the board of directors and will depend upon, among other
factors, the capital requirements, operating results, financial condition and   
restrictions imposed by financing arrangements of the Company from time to time.
The Credit Facility allows the Company to pay cash dividends not to exceed      
$250,000 in the aggregate in any fiscal year, subject to compliance with other  
loan covenants.                                                                 

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CAPITALIZATION

The following table sets forth the consolidated capitalization of the 
Company at March 31, 1998, as adjusted to reflect the sale of 3,000,000 shares  
of Common Stock offered by the Company hereby (at an assumed public offering    
price of $24.25 per share) and the application of the net proceeds therefrom as 
described under "Use of Proceeds." This table should be read in conjunction with
the historical consolidated financial statements of the Company and related     
notes, included elsewhere in this Prospectus.                                   

                                                        [Enlarge/Download Table]

                                                                     MARCH 31, 1998       
                                                              ----------------------------
                                                               ACTUAL          AS ADJUSTED
                                                              --------         -----------
                                                                 (IN THOUSANDS, EXCEPT    
                                                                      PERCENTAGES)        
                                                                                          
Long-term debt, including current maturities:                                             
  Revolving Credit Facility.................................  $ 25,000                --  
  Term Loan Facility........................................    63,699          $ 20,118  
  Other obligations.........................................     2,506             2,506  
                                                              --------          --------  
          Total long term debt..............................  $ 91,205          $ 22,624  
                                                              ========          ========  
Shareholders' Equity:                                                                     
  Preferred stock, par value $0.10 per share; 300,000 shares                              
     authorized; none issued................................                              
  Common stock, par value $0.10 per share; 15,000,000 shares                              
     authorized; 6,545,740 shares issued (9,545,740, as                                   
     adjusted)(1)...........................................  $    654          $    954  
  Class B stock, par value $0.10 per share; 6,000,000 shares                              
     authorized; 1,766,128 shares issued(2).................       177               177  
Capital in excess of par value..............................     9,356            77,637  
Retained earnings...........................................    17,478            17,478  
Cumulative translation adjustment...........................      (768)             (768) 
Subscription receivable from officer........................       (95)              (95) 
                                                              --------          --------  
          Total shareholders' equity........................    26,802            95,383  
                                                              --------          --------  
          Total capitalization(3)...........................  $118,007          $118,007  
                                                              ========          ========  
Total debt to total capitalization..........................      77.3%             19.2% 

---------------                                                                 

(1) Does not include 350,000 shares of Common Stock issuable upon exercise of   
stock options with a weighted average exercise price of $1.96 per share 
outstanding as of April 30, 1998.                                       

(2) Does not include 1,616,000 shares of Class B Stock issuable upon exercise of
stock options with a weighted average exercise price of $2.15 per share 
outstanding as of April 30, 1998.                                       

(3) Total capitalization reflects the total of long-term debt and shareholders' 
equity.                                                                 

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SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share amounts)

    The following selected financial data with respect to the Company's Income
Statements for the nine months ended September 30, 1993 and the years ended     
September 30, 1994, 1995, 1996 and 1997, and the Company's Balance Sheet Data as
of September 30, 1993, 1994, 1995, 1996 and 1997, are derived from the Financial
Statements of the Company which have been audited by Deloitte & Touche LLP,     
independent auditors. The selected financial data presented below for the six   
months ended March 31, 1997 and 1998 are unaudited and were prepared by         
management of the Company on the same basis as the audited Financial Statements 
included elsewhere herein and, in the opinion of management of the Company,     
include all adjustments necessary to present fairly the information set forth   
therein. The results for the six months ended March 31, 1998 are not necessarily
indicative of the results to be expected for the full year ending September 30, 
1998 or future periods. The following data should be read in conjunction with   
the Financial Statements of the Company and the related notes thereto and       
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations," and "Business" included elsewhere in this Prospectus.              

                                                        [Enlarge/Download Table]

                              NINE MONTHS                                             SIX MONTHS ENDED  
                                 ENDED            YEARS ENDED SEPTEMBER 30,              MARCH 31,      
                             SEPTEMBER 30,  --------------------------------------  --------------------
                                 1993        1994      1995      1996       1997      1997        1998  
                             -------------  -------   -------   -------   --------  ---------   --------
                                                                                                        
INCOME STATEMENT DATA:                                                                                  
Net revenue.................    $43,642     $57,732   $58,994   $60,208   $195,313   $83,936    $117,667
Operating income............      2,072       3,560     3,871     5,240     18,206     6,168      14,566
Income before extraordinary                                                                             
  gain......................        955       1,631     2,039     2,756      6,896     2,143       5,893
Extraordinary gain..........         --          --       498        --         --        --          --
                                -------     -------   -------   -------   --------  --------    --------
         Net Income.........    $   955     $ 1,631   $ 2,537   $ 2,756   $  6,896  $  2,143    $  5,893
                                =======     =======   =======   =======   ========  ========    ========
PER SHARE DATA:                                                                                         
Basic(1)                                                                                                
  Income before                                                                                         
    extraordinary gain......    $  0.15     $  0.26   $  0.29   $  0.39   $   0.85  $   0.27    $   0.71
  Extraordinary gain........         --          --      0.07        --         --        --          --
                                -------     -------   -------   -------   --------  --------    --------
         Net income.........    $  0.15     $  0.26   $  0.36   $  0.39   $   0.85  $   0.27    $   0.71
                                =======     =======   =======   =======   ========  ========    ========
Diluted(1)                                                                                              
  Income before                                                                                         
    extraordinary gain......    $  0.15     $  0.26   $  0.29   $  0.38   $   0.74  $   0.24    $   0.60
  Extraordinary gain........         --          --      0.07        --         --        --          --
                                -------     -------   -------   -------   --------  --------    --------
         Net income.........    $  0.15     $  0.26   $  0.36   $  0.38   $   0.74  $   0.24    $   0.60
                                =======     =======   =======   =======   ========  ========    ========
Cash dividends declared per                                                                             
  common share..............    $    --     $    --   $    --   $0.0125   $ 0.0125   $0.0125    $ 0.0250
                                =======     =======   =======   =======   ========  ========    ========

                                                        [Enlarge/Download Table]

                                              AS OF SEPTEMBER 30,                      AS OF  
                             ------------------------------------------------------  MARCH 31,
                                 1993         1994      1995     1996(2)     1997      1998   
                             -------------   -------   -------   -------   --------  ---------
                                                                                              
BALANCE SHEET DATA:                                                                           
Current assets..............    $21,200      $23,437   $24,005   $69,813   $ 95,393  $105,191 
Current liabilities.........     16,046       15,172    12,958    29,952     49,666    63,013 
Total assets................     35,138       34,538    34,819   119,061    163,152   182,508 
Long-term debt, excluding                                                                     
  current maturities........     12,388       11,263    11,708    73,746     86,489    85,145 
Shareholders' equity........      5,417        7,100     9,642    12,399     21,212    26,802 

---------------                                                                 

(1) Applicable amounts have been restated to give retroactive effect to the     
adoption of SFAS 128, "Earnings Per Share".                             

(2) Includes the Company's acquisition of CPM, effective as of September 30,    
1996.                                                                   

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS 

OVERVIEW                                                                        

  The Company achieved record sales and earnings in fiscal 1997, driven by
the acquisitions of PED and Gumaco as well as continued strong demand for       
process machinery for highway construction materials. These record levels of    
operating results have continued in the first half of fiscal 1998, driven by the
acquisition of ACP and synergistic benefits resulting from recent acquisitions. 

  Through fiscal 1996, the Company operated primarily as a manufacturer of
process machinery for the highway construction industry. In September 1996, the 
Company made a strategic decision to diversify into machinery for the food      
processing industry and acquired PED from Ingersoll-Rand (currently part of     
CPM). With this acquisition, the Company combined its leading process machinery 
technology with CPM's installed customer base and generated significant         
operational and marketing synergies. The Company's acquisition of Gumaco further
expanded its food processing capabilities into new niche market areas while its 
acquisition of ACP broadened its highway construction material processing       
capabilities and provided CEG with greater access to international markets.     
Currently, CPM is the larger of the two business groups, contributing 53.8% of  
Company revenue and 49.8% of Company gross profit for the six month period ended
March 31, 1998.                                                                 

The Company traditionally has experienced seasonality in its sales and
earnings. Asphalt producers typically do not purchase new equipment for shipment
during summer and fall months to avoid disruption of their activities during    
peak periods of highway construction and repair. This has often resulted in     
lower sales and earnings in the first and fourth fiscal quarters of each year.  
The Company's newer business line, food process machinery, is less seasonal, but
does experience lower demand in the second and third fiscal quarters. The       
Company expects seasonality to have less of an influence on future results as   
CPM will help counteract CEG seasonality and as international diversification   
helps to counteract domestic trends. In addition, the agricultural industry     
serviced by the Company is susceptible to fluctuations caused by adverse        
weather, natural disasters, disease, governmental policies and similar          
adversities and factors beyond the Company's control.                           

  Revenues from contracts for the design and manufacture of certain custom
equipment are recognized under the percentage-of-completion method. Revenue from
all other sales are recorded as the products are shipped. The                   
percentage-of-completion method of accounting for long term contracts recognizes
revenue in proportion to actual labor costs incurred as compared with total     
estimated labor costs expected to be incurred during the entire contract. All   
selling, general and administrative expenses are charged to income as incurred. 
Provision is made for any anticipated contract losses in the period that the    
loss becomes evident.                                                           

CONSOLIDATED RESULTS OF OPERATIONS                                              

    The consolidated statements of income, shareholders' equity and cash flows
are presented for the years ended September 30, 1995, 1996 and 1997 and for the 
six months ended March 31, 1997 and 1998.                                       

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 The following table sets forth for the periods indicated, the Company's
sales, gross profit and gross profit margin by the two principal markets and by 
international and domestic sales.                                               

MARKET SECTOR ANALYSIS

                                                        [Enlarge/Download Table]

                                                                          SIX MONTHS     
                                        YEARS ENDED SEPTEMBER 30,      ENDED MARCH 31,   
                                       ----------------------------   ------------------ 
                                        1995      1996       1997      1997       1998   
                                       -------   -------   --------   -------   -------- 
                                              (IN THOUSANDS, EXCEPT PERCENTAGES)         
                                                                                         
SALES                                                                                    
Transportation........................ $58,944   $60,208   $ 64,928   $29,389   $ 54,331 
Food..................................      --        --    130,385    54,547     63,336 
                                       -------   -------   --------   -------   -------- 
          Total....................... $58,944   $60,208   $195,313   $83,936   $117,667 
                                       =======   =======   ========   =======   ======== 
GROSS PROFIT                                                                             
Transportation........................ $16,181   $15,674   $ 19,125   $ 6,535   $ 19,260 
Food..................................      --        --     38,230    16,740     19,135 
                                       -------   -------   --------   -------   -------- 
          Total....................... $16,181   $15,674   $ 57,355   $23,275   $ 38,395 
                                       =======   =======   ========   =======   ======== 
GROSS PROFIT MARGIN                                                                      
Transportation........................    27.5%     26.0%      29.5%     22.2%      35.4%
Food..................................      --        --       29.3%     30.7%      30.2%
          Total.......................    27.5%     26.0%      29.4%     27.7%      32.6%

                                                        [Enlarge/Download Table]

                                                                          SIX MONTHS     
                                        YEARS ENDED SEPTEMBER 30,      ENDED MARCH 31,   
                                       ----------------------------   ------------------ 
                                        1995      1996       1997      1997       1998   
                                       -------   -------   --------   -------   -------- 
                                              (IN THOUSANDS, EXCEPT PERCENTAGES)         
                                                                                         
SALES                                                                                    
International......................... $ 2,517   $ 2,812   $ 61,209   $24,257   $ 40,680 
Domestic..............................  56,427    57,396    134,104    59,679     76,987 
                                       -------   -------   --------   -------   -------- 
          Total....................... $58,944   $60,208   $195,313   $83,936   $117,667 
                                       =======   =======   ========   =======   ======== 
GROSS PROFIT                                                                             
International......................... $   796   $   804   $ 14,588   $ 5,580   $ 10,645 
Domestic..............................  15,385    14,870     42,767    17,695     27,750 
                                       -------   -------   --------   -------   -------- 
          Total....................... $16,181   $15,674   $ 57,355   $23,275   $ 38,395 
                                       =======   =======   ========   =======   ======== 
GROSS PROFIT MARGIN                                                                      
International.........................    31.6%     28.6%      23.8%     23.0%      26.2%
Domestic..............................    27.3%     25.9%      31.9%     29.7%      36.0%
          Total.......................    27.5%     26.0%      29.4%     27.7%      32.6%

Six months ended March 31, 1997 compared with the six months ended March 31,
1998                                                                            

Net revenue for the six months ended March 31, 1998 increased by $33.8
million, or 40.2%, to $117.7 million from $83.9 million in the same period last 
year. The transportation group contributed $25.0 million and food processing    
equipment product lines added $8.8 million to the increase in net revenues. The 
increase in sales as a result of the recent acquisitions of ACP and Gumaco was  
$24.9 million. International sales, excluding the recent acquisitions, decreased
by $8.5 million to $15.8 million, or 17% of net sales, principally as a result  
of an unusually high level of shipments during the first quarter of fiscal 1997 
in Europe for the food processing division and the reduction of shipments to    
Europe in the first six months of fiscal 1998 related to the slaughter of       
animals caused by Mad Cow Disease and Swine Flu.                                

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     Gross profit increased 65.0% to $38.4 million in the six months ended March
31, 1998 from $23.2 million in the same period of fiscal 1997. The              
transportation group contributed $12.7 million and food processing equipment    
product lines added $2.5 million to the increase in gross profit. The increase  
in gross profit as a result of the recent acquisitions was $6.2 million. Gross  
profit from international sales, excluding the recent acquisitions, decreased by
$1.1 million to $4.4 million in the six months ended March 31, 1998. Gross      
profit as a percentage of sales increased to 32.6% in the six months ended March
31, 1998 from 27.7% in the prior period as a result of a more favorable product 
mix.                                                                            

    Selling, general and administrative expenses increased to $22.5 million in
the first six months of fiscal 1998 from $15.9 million in the same period of    
fiscal 1997 due primarily to the acquisitions of Gumaco and ACP. The            
transportation group selling, general and administrative expenses increased by  
$4.0 million and the food processing equipment selling, general and             
administrative expenses increased by $2.6 million.                              

As a result of the above factors, operating income increased by $8.4  
million to $14.6 million in the first six months of fiscal 1998 from $6.2       
million in the first six months of fiscal 1997. The transportation group        
contributed $8.6 million of this increase, which was offset by a reduction in   
operating income of $0.2 million in the food processing equipment product lines.
The increase in operating income as a result of the recent acquisitions of ACP  
and Gumaco was $0.3 million. Operating results from international activities,   
excluding the recent acquisitions, decreased by $1.0 million to produce a loss  
of $0.2 million in the first six months of 1998.                                

 Year ended September 30, 1997 compared with the year ended September 30, 1996

Net sales for the twelve months ended September 30, 1997 were $195.3  
million versus $60.2 million for the same period of 1996, an increase of $135.1 
million or 224.4%. The increase resulted primarily from the inclusion of sales  
from the acquisition of CPM.                                                    

   Production costs were $142.9 million or 73.2% of net sales in fiscal 1997
versus $44.5 million or 74.0% of net sales in fiscal 1996. This increase in     
production costs is a result of the CPM acquisition.                            

   Selling, general, and administrative expenses increased in fiscal 1997 to
$31.4 million from $8.2 million in fiscal 1996, due primarily to the CPM        
acquisition, including the related amortization of goodwill.                    

The increase in interest expense reflects higher average borrowing,   
primarily as a result of financing the CPM acquisition.                         

  Net income increased in fiscal 1997 to $6.9 million from $2.8 million in
fiscal 1996 as a result of the above factors.                                   

 Year ended September 30, 1996 compared with the year ended September 30, 1995

     Net sales and revenue increased to $60.2 million in the twelve months ended
September 30, 1996 as compared to $58.9 million in the twelve months ended      
September 30, 1995. Income before the extraordinary gain increased 35.2% from   
$2.0 million in the twelve months ended September 30, 1995 to $2.8 million in   
the 1996 period.                                                                

  Sales in the U.S. increased slightly from $56.4 million in 1995's twelve
months to $57.4 million in the 1996 period. Production costs as a percentage of 
sales also increased slightly between the two periods. Operating expenses in the
U.S. decreased $1.9 million in the twelve months ended September 30, 1996 from  
20.9% of sales to 17.3% of sales. This increase resulted from a decrease in bad 
debt expense and outside service costs.                                         

Operating income in the U.S. increased from $3.7 million in the twelve
months ended September 30, 1995 to $5.1 million in 1996, as a result of the     
higher sales volume and lower operating expenses.                               
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  The Company's U.K. subsidiary's sales increased from $2.5 million in the
twelve months ended September 30, 1995 to $2.8 million in fiscal 1996. Operating
income in the U.K. decreased 19.2% from $.21 million in 1995 to $.17 million in 
1996, as a result of sales of lower margin products.                            

    Consolidated non-operating income and expense increased from a net expense
of $.7 million in the twelve months ended September 30, 1995 to $1.3 million in 
fiscal 1996, as a result of higher interest expense due to higher average       
outstanding debt balances combined with the loss of non-recurring equipment     
rental income in fiscal 1995.                                                   

LIQUIDITY AND CAPITAL RESOURCES                                                 

  For the six months ended March 31, 1998, cash provided by operations was
$9.9 million, an increase of $5.6 million, compared to fiscal 1997. This        
increase was due primarily to an increase in net income and collections of      
accounts receivable.                                                            

 Working capital decreased by $3.5 million to $42.2 million at March 31,
1998, principally as a result of an increase in short-term notes payable related
to the credit facilities established by Gumaco and an increase in customer      
deposits and accrued expenses.                                                  

 Investing activities used $16.7 million in fiscal 1998 compared to $3.3
million in fiscal 1997, a change of $13.4 million, resulting primarily from the 
acquisition of ACP.                                                             

Cash provided by financing activities was $6.2 million in fiscal 1998,
primarily as a result of an increase in borrowings related to the new credit    
facilities established by Gumaco.                                               

     As of March 31, 1998, the Company had a revolving credit facility providing
a total of $48 million, of which $10 million remained unused. Interest rates    
vary at the Company's option, based on a factor applied to the prime rate or    
LIBOR. The weighted average interest rate for the borrowings under the revolving
credit facility at March 31, 1998 was 8.33%. The revolving credit facility is   
payable through December 2001. Under the terms of its senior secured credit     
agreement, the Company is required to maintain compliance with certain financial
and other covenants.                                                            

   Under the Company's Credit Facility, the Company has $63.7 million in the
aggregate outstanding under three term loans which amortize to maturity at      
various dates beginning December 2001 through December 2004. The weighted       
average interest rate for these borrowings at March 31, 1998 was 8.46%.         

The Company's asphalt production equipment operations are subject to  
seasonal fluctuation, often resulting in lower sales in the first and fourth    
fiscal quarters of each period and much lower earnings or losses during such    
quarters. Traditionally, asphalt producers do not purchase new equipment for    
shipment during the summer and fall months to avoid disruption of their         
activities during peak periods of highway construction and repair. Pelleting and
processing equipment products are much less seasonal, resulting in lower demand 
in the second and third fiscal quarters. The Company expects seasonality to have
less of an influence on future results of operations as it continues to grow in 
international markets.                                                          

Based upon its present plans, the Company believes that its working   
capital, operating cash flow and available credit resources will be adequate to 
repay current portions of long-term debt, to finance currently planned capital  
expenditures, and to meet the currently foreseeable liquidity needs of the      
Company.                                                                        

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BUSINESS

OVERVIEW                                                                        

The Company is a leading manufacturer of process machinery for a wide 
variety of end-markets. Products include machinery used in the production of    
highway construction materials such as hot-mix asphalt and machinery used to    
produce food products such as pelletized animal feeds, edible oils, sugar and   
citrus juices. The Company believes it has significant market share positions in
its principal product lines. The Company's products are manufactured in 13      
plants in the United States, Asia, Australia, Europe and South America and are  
sold through a combination of Company sales representatives, independent dealers
and agents located throughout the world. The Company operates in two business   
groups: CEG and CPM. The core product in each group is "process machinery,"     
designed to process and transform bulk materials into end products. As a result 
of the similar technologies shared by both business groups, the Company believes
it is realizing operational synergies.                                          

    CEG, which accounted for 46.2% of the Company's total consolidated revenue
for the six month period ended March 31, 1998, designs and manufactures         
machinery and related equipment used for the production of asphalt and highway  
construction materials. CEG's principal products include asphalt plants,        
combustion systems and fluid heat transfer systems. CEG's technical and design  
capabilities, environmentally friendly process technology and wide range of     
products have enabled it to become a leading producer of asphalt production     
equipment worldwide. The Company believes CEG has the largest installed base of 
asphalt production plants in the United States.                                 

     CEG's products are sold primarily to the highway construction industry. The
principal factors driving demand for CEG's products are the level of government 
funding for domestic highway construction and repair, infrastructure development
in emerging economies, the need for spare parts and a trend towards larger      
plants (e.g. drum mix asphalt production) resulting from asphalt production     
plant consolidation. On June 9, 1998, President Clinton signed the              
Transportation Act into law. The Transportation Act significantly increases     
authorized funding levels for transportation infrastructure and services. The   
Transportation Act, which is part of an overall effort to rebuild and repair    
aging interstate roads and highways, raised highway funding levels to           
approximately $28 billion per year over the next six years (compared to         
approximately $20 billion that was authorized for 1997). The Company believes   
that this legislation will lead to an increase in demand for CEG's products.    

    CPM, which accounted for 53.8% of the Company's total consolidated revenue
for the six month period ended March 31, 1998, designs and manufactures process 
machinery used in the production of scientifically compounded animal feeds,     
edible oils, sugar and fruit juice concentrates. CPM's products include pellet  
mills, crushers, flakers, grinders, crystallizers, centrifuges and equipment    
used to concentrate juices, including presses, evaporators, heat exchangers and 
dryers. The Company believes CPM has the largest installed base of pelleting and
grinding equipment in the world and that CPM's customers recognize its products 
for their reliability and technology. The Company believes that its large       
installed base provides it with an advantage relative to its competition in     
continuing to grow its aftermarket sales.                                       

 CPM's products are sold primarily to commercial agricultural companies,
integrated food producers, feed mills and food processing companies. CPM's      
machinery enables its customers to manufacture food products more efficiently   
and is a widely accepted method of scientifically processing animal feed. Over  
the past several years, the domestic food processing machinery industry has     
experienced strong growth, partly as a result of rising demand from overseas    
markets which are increasingly adopting U.S. food production technologies. The  
Company believes that as living standards continue to improve worldwide,        
particularly in emerging economies, and the fragmented food processing industry 
continues to consolidate, demand will continue to grow for CPM's products.      

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   The Company generated sales for the six month period ended March 31, 1998
of $117.7 million, compared to sales of $83.9 million for the six month period  
ended March 31, 1997. Of the increase of $33.8 million, approximately $8.9      
million is attributable to organic growth in the Company's continuing           
operations, while approximately $24.9 million resulted from the inclusion, in   
the most recent period, of Gumaco and ACP. Operating income for the six month   
period ended March 31, 1998 was $14.6 million compared to operating income of   
$6.2 million for the six month period ended March 31, 1997. Approximately 35% of
sales for the six months ended March 31, 1998 were generated outside of North   
America.                                                                        

INDUSTRY OVERVIEW                                                               

The Company competes principally in selected markets of the highway   
construction and food processing machinery industries.                          

Highway Construction Industry -- Construction Equipment Group               

 The road construction industry involves the building and maintenance of
highways, roads and bridges. The process of building and maintaining roads      
includes materials production and application. The Company manufactures         
equipment primarily for the materials production phase of road construction. The
principal material produced by the Company's equipment is a bituminous material 
known as hot-mix asphalt ("HMA"), which is 95% aggregate, reprocessed asphalt   
paving and mineral filler and 5% asphalt cement. HMA is the predominant material
used in paving roads and is produced in continuous and batch type asphalt       
plants. Approximately 60% of the 3.9 million miles of roads in the U.S. are     
paved, of which 55% are paved with "high type" materials. Approximately 90% of  
the "high type" paved roads utilize HMA. The remaining 10% of "high type" roads 
are paved with concrete. HMA is the preferred paving material because it is more
durable, economical, easily maintained, 100% recyclable, smoother and quieter to
drive on. The United States and Europe are the largest producers of HMA,        
producing approximately 500 million tons and 269 million tons of HMA,           
respectively, in 1996.                                                          

   There are currently 4,000 to 5,000 asphalt production plants operating in
the United States and 4,000 mixing plants operating in Europe. In 1997, the     
Company estimates approximately 100 asphalt plants were installed in the United 
States and approximately 400 asphalt plants were installed internationally. The 
Company's principal competitors in asphalt production plants include Ammann     
Group, Astec Industries, Benninghoven GmbH, CMI Corporation, Marini SpA, Parker 
International Ltd. and Teltomat Maschinen GmbH.                                 

  During the construction of the Interstate Highway System, which began in
1953 and was completed in the mid-1970's, HMA production in the U.S. had a      
compounded annual growth rate of approximately 7.5%. The growth rate declined   
from the 1970's to the present due to the fact that HMA was required primarily  
for road maintenance and not new construction. However, the Company anticipates 
accelerated growth in the future, which will be driven by the need to rebuild   
and repair the aging interstate roads and highways in the U.S. and Europe as    
well as the development of road infrastructure projects in developing countries.
Roads and bridges in the United States have deteriorated and continue to        
deteriorate at a faster rate than improvements are made. Sixty percent of the   
major roads are in poor to fair condition, and one-third of bridges are rated   
structurally deficient or functionally obsolete. The U.S. Department of         
Transportation has estimated that $357 billion is needed to improve the highway 
system to optimum levels over the next five years, while $264 billion is needed 
to maintain current conditions over the same period. On June 9, 1998, President 
Clinton signed into law a $203 billion Transportation Act which authorizes $167 
billion for highway funding and $36 billion for mass transit funding over the   
next six years. The new highway funding levels are significantly greater than   
previous levels, increasing to $28 billion per year (up from approximately $20  
billion in 1997), and are part of an overall effort to rebuild and repair aging 
interstate roads and highways. The highway construction industry is expected to 
benefit from this legislation. There is also a consolidation trend in the U.S.  
toward larger asphalt                                                           
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plants that meet stringent environmental requirements. The Company specializes  
in manufacturing large asphalt plants consistent with that trend. The           
international highway construction market is fragmented and also dependent upon 
government funding of infrastructure projects. Development varies from region to
region, ranging from a very developed European infrastructure system to regions 
that are in the process of development to regions which have not yet started any
infrastructure projects. Therefore, as these regions initiate and continue      
progress on road construction, international demand is expected to grow for     
asphalt production plants.                                                      

Food Processing Machinery -- Consolidated Process Machinery Group           

The pelleting and particle size reduction equipment industry primarily
serves the feed processing and oilseed extraction industries. In feed           
processing, pellet mills and particle size reduction equipment are used in the  
production of scientifically compounded animal and aquaculture feeds used by    
commercial feed companies and integrated food producers. Other uses for pellet  
machinery include bio-mass and synthetic fuels production, waste processing, as 
well as chemical and plastics manufacturing. Particle size reduction equipment  
and flaking mills are utilized in the preparation of oil-bearing grains for the 
extraction of vegetable oil. Particle size reduction equipment is also used in  
the pharmaceutical and dry chemical industries. In addition to the Company,     
major manufacturers include Andritz AG (Sprout-Matador A/S), Buhler Ltd,        
Dorsser, Jacobson LLC, Kahl, Landers and UMT. The Company estimates that in     
1997, worldwide sales of pelleting equipment were approximately $150 million,   
and particle reduction equipment sales were approximately $60 million worldwide.

    The world's food output is increasingly dependent upon improved management
and technology. Manufactured feed is necessary to produce high quality animal   
products efficiently. The pellet mill is the only widely accepted process which 
can scientifically process grain and compound the mineral concentrations, thus  
increasing the grain-to-meat conversion ratio, improving palatibility,          
eliminating selectivity and reducing waste and handling problems. This          
translates into savings via faster growing and higher yielding livestock as well
as reduced production costs. Pellet feeds also allow livestock producers to     
custom blend feeds to meet specific needs. Approximately 600 million tons of    
feed are produced each year with the United States/Canada and Asia as the       
largest producers. Manufactured feed production has been increasing in Asian and
Latin American countries at a much faster rate than in the United States and    
Europe. Globally, approximately 45% of all manufactured feed is pelleted.       
Although feed is produced by 25,000 companies around the world, 25% of feed     
mills produce about 75% of the world's feed. Growth in the feed processing      
industry is driven primarily by the increased consumption of meat. Worldwide    
consumption of intensively farmed poultry, pork, finfish, shellfish and milk    
products continues to rise. Other sources of the rising worldwide demand for    
feed products are: the expanding population, the general expansion of global    
trade and the dramatic increase in personal income in key developing countries, 
particularly in Asia and Latin America. There is also a general trend toward    
increased meat consumption per capita in countries and regions with improving   
economic conditions. Approximately 247 million metric tons of oilseed crush are 
produced annually, primarily in the United States/Canada, Asia and Latin        
America. Trends in the oilseed market are similar to those in the feed industry.
Growth in the oilseed processing market is driven primarily by demand from the  
feed industry for high protein soybean meal and demand for vegetable oils and   
margarine for human consumption.                                                

    The sugar processing industry produces sugar from extracted sugar cane and
sugar beet juices. In the final stages of processing, sugar crystals are        
extracted with crystallization towers and centrifuges. The Company manufactures 
equipment specifically for the crystallization phase of the sugar production    
process and manufactures both batch and continuous centrifuges as well as       
crystallization towers. The batch centrifuge produces the highest quality of    
sugar crystals and is used in the final stage of the sugar refinement process.  
The continuous centrifuge is lower in cost but provides more output as it       
processes in a "continuous" mode. Continuous centrifuges are used in the        
preliminary stages of the crystallization process.                              

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     The Company estimates that the annual worldwide market for equipment in the
crystallization phase of sugar production is approximately $75 to $100 million. 
In addition to the Company, major producers of crystallization equipment include
Braunschweigische Maschinen GmbH, Dorr-Oliver Inc., Fives Cail Babcock,         
Tsukishima Kikai Ltd. and The Western States Machine Company. Approximately 117 
million tons of sugar are produced each year. Major production regions are      
Asia/Australia, India, and Latin America. Sugar production growth typically     
follows population trends and increases about two to three percent each year.   
The United States is a relatively small sugar producer relative to the total    
market, and the high per capita consumption of artificial sweeteners impacts    
sugar usage in the United States. Growth in the market for crystallization      
equipment is driven by modernization requirements, including mill expansions,   
consolidations and upgrades for both increased volume and increased efficiency  
to lower production costs. Worldwide, the industry trend is moving towards      
larger mills with larger equipment, greater capacity, and longer production runs
to increase efficiency from higher production volume.                           

  The citrus processing equipment industry manufactures plants to extract,
concentrate and freeze citrus fruit juices. In processing, juice is extracted   
and then polished with a finisher which removes pulp and seeds. The juice may   
then be pasteurized and packed as Not From Concentrate ("NFC") juice or it may  
be concentrated in evaporators, standardized and stored as Frozen Concentrated  
Orange Juice ("FCOJ") at temperatures below 20 degreesF. Most large processors  
also dry the citrus waste which is then used to produce cattle feed as well as  
produce essences and peel oil which is either centrifuged or steam distilled.   
The Company manufactures most of the equipment in the processing plant except   
for the extractors, cold pressed oil recovery equipment and finishers.          

    The orange is the most widely processed fruit with orange juice accounting
for 65% of all juice sales during the 1996-97 season. In the 1996-97 season,    
approximately 56 million metric tons of oranges were produced, of which Brazil  
produced 29% and the United States produced 23%. Brazil and the United States   
processed approximately 88% of the 22,475,000 metric tons of oranges processed  
worldwide. Other top orange-growing countries include Mexico, Spain, Egypt,     
China and Italy. Brazil has been the top producer of oranges in the world since 
the 1980s. The Brazilian citrus industry began as a result of the freeze that   
destroyed Florida orange groves in 1962. In Brazil, nearly 100% of the oranges  
processed are used to produce FCOJ. In Florida, approximately 71% of the oranges
are processed for FCOJ and 29% are processed for NFC. Worldwide, citrus         
processing machinery sales in 1997 are estimated at approximately $60 million.  
Very few competitors exist in the industry as the Company holds an 85% market   
share in the FCOJ market. Most competitors are international companies with     
niche markets in citrus and other fruits in certain geographic regions and, in  
addition to the Company, include APV (a Siebe Group Company), FMC Corporation,  
GEA AG, Schmidt-Bretten GmbH, and Unipektin AG. Growth in the market for citrus 
processing machinery is driven by increased worldwide demand for high quality   
premium juice products, the start up of production and processing of oranges and
other fruits in other countries, and new product applications for non-citrus    
fruits as well as non-fruit products.                                           

BUSINESS STRATEGY                                                               

Beginning in 1996, the Company undertook certain strategic initiatives
designed to facilitate growth and further increase shareholder value. The       
Company's goal is to continue to improve its position as a technology and       
industry leader in markets driven by the essential needs of a growing world     
population.                                                                     

    Capitalize on Product and Market Synergies.  The Company's core product is
process machinery. As a result of similar technologies shared by both of its    
business groups, the Company believes that it can realize significant synergies 
by sharing technologies across its different product lines and cross-selling    
products in different geographical markets. Furthermore, by leveraging on the   
wide range of products and services offered through both of its business groups,
the Company believes that it can better serve the needs of domestic and         
international customers and markets. For example, while the Company currently   
supplies centrifuges and crystallization towers which are                       
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used in the crystallization phase of sugar processing, management believes that 
by incorporating technology from other business groups, the Company can develop 
new products such as dryers, conveyors and thermal fluid heat transfer systems  
to expand its presence in the entire sugar production process. The Company also 
has recently developed synthetic fuel production plants which utilize components
from both its CEG and CPM product lines and which have created an additional    
market for the Company's products.                                              

Expand International Markets and Sales.  In the six month period ended
March 31, 1998, international sales constituted approximately 35% of total      
sales. The Company has manufacturing facilities in eight countries and believes 
that international demand for its products is growing at a faster rate than     
domestic demand. The Company believes that its ability to grow internationally  
through its worldwide sales and manufacturing facilities is central to          
maintaining and expanding its market position. The Company intends to expand its
independent sales representative network outside North America in order to      
strengthen its market share in Latin America and the Pacific Rim. The Company   
also intends to utilize its substantial Brazilian manufacturing capacity to     
produce other CEG and CPM products in order to further penetrate South American 
markets. Furthermore, as a result of its recent acquisitions, the Company       
believes it is already well positioned in many international markets including  
Europe, the Far East, Australia and Latin America where the Company believes    
there is significant potential for its products. The ACP acquisition has also   
added a complementary line of construction equipment machinery which is ideally 
suited for developing economies which demand smaller batch type asphalt plants  
and equipment.                                                                  

    Grow Aftermarket Sales.  The Company intends to utilize its installed base
of asphalt and food processing equipment to expand its aftermarket sales. In    
addition, the Company has recently committed to making significant capital      
expenditures to further improve the profitability of the replacement parts      
portion of its pelleting business. The Company plans to purchase equipment that 
will enable it to manufacture replacement parts at a lower cost than it         
currently incurs. The Company also recently initiated restructuring in its parts
sales operations to intensify telemarketing and to expand aftermarket sales in  
all of its business groups.                                                     

Develop New Technological Innovations and Product Applications.  The  
Company continually works with its customers to develop new and more efficient  
products to meet their needs. The Company intends to continue to focus on       
research and development so that it remains the leading technological innovator 
in its industry. The Company utilizes technologies involving advanced concepts  
and disciplines in environmental regulatory compliance, fuel efficiency, energy 
conservation, heat release and recovery and noise attenuation and environmental 
comparability in manufacturing machinery and plants. For example, one of the    
Company's subsidiaries developed the counterflow technology in asphalt plants,  
which recaptures and burns emissions and vapors, resulting in a cleaner and more
efficient manufacturing process. The Company also recently developed new        
applications for its products in other industries such as the pharmaceutical,   
waste treatment, chemical and petrochemical industries.                         

     Emphasize Operating Efficiencies.  The Company continually seeks to improve
the profitability of its operations by maximizing the efficiency of its         
facilities while tightening controls on its operating and administrative costs. 
The Company believes that such efforts have resulted in higher marginal returns 
due to substantial improvements in throughput, capacity utilization and         
organizational efficiency. The Company also expects to achieve significant      
economies of scale in conjunction with it acquisition strategy. The Company     
expects to (i) consolidate facilities and reduce duplicative functions of newly 
acquired businesses; (ii) emphasize products that yield higher margins,         
including replacement parts; (iii) leverage purchasing power with suppliers; and
(iv) take advantage of cross-selling opportunities.                             

 Pursue Strategic Acquisitions.  A key component of the Company's growth
strategy is the acquisition of complementary businesses that can effectively    
increase the Company's market share and operating efficiencies, while           
simultaneously expanding the Company's customer base and                        

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international presence. Some of the Company's businesses operate in fragmented  
industries which present consolidation opportunities. The Company will typically
target acquisition candidates with (i) earnings accretion potential, (ii)       
complementary product lines and technologies, (iii) established technological   
and market leadership, (iv) opportunities for economies of scale and synergies  
with the Company, (v) solid growth potential, and (vi) international exposure.  
The Company believes that its experience in identifying, completing, integrating
and managing acquisitions, as well as the Company's reduced debt level, pro     
forma for the Offering, position the Company favorably to execute this strategy.

ACQUISITION HISTORY                                                             

    The Company believes that its management team has demonstrated the ability
to identify, complete and integrate strategic acquisitions. In 1968, the        
foundation of the Company was formed by the merger of Mechtron Corporation with 
General Combustion, Inc. and Genco Manufacturing, Inc. The new entity           
reincorporated in Delaware in 1969 and adopted the name Mechtron International  
Corporation in 1970. In 1985, the Company began a series of acquisitions into   
related fields starting with the Beverley Group Ltd. in the United Kingdom.     
Hy-Way Heat Company, Inc. and the Bituma Group were acquired in 1986. In 1987,  
the Company changed its name to Gencor Industries, Inc. and acquired the Davis  
Line and its subsidiaries in 1988.                                              

    Beginning in 1996, the Company sought to diversify and expand its "process
machinery" product lines and markets in order to facilitate more opportunities  
for growth and reduce seasonality in quarterly earnings. At the end of fiscal   
1996, the Company embarked on its new strategy with the opportunistic           
acquisition of PED (now CPM). CPM shared complementary technologies with the    
Company's existing highway construction equipment business and enabled the      
Company to enter a new industry, food processing machinery, as well as new      
international markets. Less than a year later, the Company furthered its        
expansion into the food processing machinery industry with the acquisition of   
Gumaco in Brazil. The Company then continued to expand its penetration in the   
highway construction industry with the acquisition of ACP in 1997.              

Acquisitions                                                                

    Building on the base of its combustion and asphalt machinery business, the
Company has successfully made the following acquisitions in process machinery:  

  - Process Equipment Division of Ingersoll-Rand Company.  Effective
          September 30, 1996, the PED acquisition (which subsequently became the
          basis of the Company's CPM business), initiated the Company's strategy
of acquiring complementary process machinery businesses. The
          acquisition nearly tripled the Company's revenues and provided it with
 significant market share positions in new niche markets which
     manufacture equipment to process food products such as pelletized
        animal feeds, sugar and edible oils. Furthermore, the expansion into
        the food machinery industry reduced the seasonality in the Company's
 quarterly earnings since the slower quarters for construction
      equipment are typically the strongest quarters for food processing
   machinery and vice versa. The Company believes that CPM has the
     largest installed base of pelleting and grinding equipment in the
     world, which provides the Company with a competitive advantage in
        growing its aftermarket sales. In addition, the acquisition provided
        the Company with strategic access into international markets through
 CPM's manufacturing facilities in Sweden, the Netherlands and
       Singapore as well as created the opportunity for cross-selling with
CEG.                                                        

   - Gumaco Industria E Comercio Limitada.  Effective July 1, 1997 the
      Company acquired Gumaco and certain other South American companies
       with worldwide technology and substantial manufacturing capacity in
          Brazil. These companies produce heavy machinery for the production and
 processing of fruit juices. Gumaco is the world leader in the

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          industry of manufacturing plants which extract, concentrate and freeze
         juices. The Gumaco acquisition furthered the Company's expansion into
     the food process machinery industry and provided the Company with
access to Latin American markets where the Company believes 
    significant opportunities exist for its other product lines. The
     Company intends to start manufacturing these product lines in the
Brazilian manufacturing facility.                           

   - ACP Holdings PLC.  Effective October 1, 1997, the ACP acquisition
     expanded Gencor's construction equipment product line as ACP is a
       leading manufacturer of portable batch asphalt plants. These plants
  are more suitable for international markets since capacity and
         production needs are different and much lower in foreign markets than
    in the United States. ACP is one of the largest exporters in the
          United Kingdom for its type of construction equipment and products and
      sells to developed markets all over the world including Australia,
       China, Thailand, Malaysia, Southern Europe, Africa, the Middle East
         and the Mediterranean. ACP has manufacturing facilities in the United
     Kingdom and Australia and is an ideal complement to the Company's
      Bituma and Davis product lines. The Company believes that it has a
  competitive advantage in its ability to meet customer needs by
    offering large and small as well as batch and continuous asphalt
plants and construction machinery.                          

PRODUCTS                                                                        

Construction Equipment Group                                                

Asphalt Plants.  The Company's subsidiaries, Hetherington and Berner, 
Bituma, and Gencor ACP manufacture plants which produce hot-mix asphalt, a      
bituminous mixture comprised of 5% asphalt cement and 95% aggregate, reprocessed
asphalt paving and mineral filler. The Company also manufactures related asphalt
plant equipment including hot mix storage silos, fabric filtration systems, cold
feed bins and other plant components. Hetherington and Berner built the first   
asphalt batch plant in 1894 and is the world's oldest asphalt plant             
manufacturer. Bituma, formerly known as Boeing Construction Company, developed  
the continuous process for asphalt production, which has been adopted worldwide 
as the industry's standard technology, as well as the counterflow technology    
which recaptures and burns emissions and vapors, resulting in a cleaner and more
efficient process. Gencor ACP manufactures the most comprehensive range of fully
mobile batch plants in the world and is a leading exporter of its type of       
construction machinery.                                                         

   Combustion Systems and Industrial Incinerators.  The Company manufactures
combustion systems, which are large burners that can transform most solid,      
liquid or gaseous fuels into usable energy or burn multiple fuels               
simultaneously. Through its subsidiary, General Combustion, the Company has been
a significant source of combustion systems for the asphalt and aggregate drying 
industries since the 1950's. The Company also manufactures combustion systems   
for rotary dryers, kilns, fume and liquid incinerators, boilers and tank        
heaters. The Company believes maintenance and fuel costs are lower for its      
burners because of their efficient design.                                      

   Fluid Heat Transfer Systems.  The Company's General Combustion subsidiary
manufactures the Hy-Way heat and Beverley lines of thermal fluid heat transfer  
systems and specialty storage tanks for a wide array of industry uses. Thermal  
fluid heat transfer systems are similar to boilers but use a high temperature   
fluid instead of water. Thermal fluid heaters have been replacing steam pressure
boilers as the best method of heat transfer for storage, heating and pumping    
viscous materials (i.e., asphalt, heavy fuels, etc.) systems in many industrial 
applications worldwide. The high efficiency design of the Company's thermal     
fluid heaters can outperform competitive units in many types of process         
applications. Heaters are available for vertical, horizontal and underground    
tanks in steel, stainless steel, nickel and other materials designed to meet    
large or small specific job requirements.                                       

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Consolidated Process Machinery Group                                        

   Pelleting Equipment.  California Pellet Mill Company, a subsidiary of the
Company, manufactures pelleting equipment which is primarily used in the        
production of scientifically compounded animal and aquaculture feed. The        
equipment is also used for biomass and synthetic fuel production. Pellet mills  
are the only widely accepted processes which can scientifically process grain   
and compound mineral concentrations to achieve a highly efficient grain-to-meat 
conversion ratio as well as improve palatibility to animals, lower production   
costs and increase efficiency. The pelleting process compresses materials       
ranging from fine powders to small granules into pellets of increased bulk      
density. Pellets are durable, stable and highly resistant to disintegration and 
breakage.                                                                       

    Grinding and Flaking Equipment.  Under the names Roskamp and Champion, the
Company manufactures grinding and flaking equipment designed to grind and       
process various grains, including wheat, soybeans and corn, which are used for  
the production of pelletized animal feeds, grinding of mash feed and the        
processing of seeds for edible oil production. The equipment is also used in the
pharmaceutical and dry chemical industries.                                     

 Sugar Processing Equipment.  Under the name Silver-Weibull, the Company
designs and manufactures some of the largest continuous and batch centrifuges   
and crystallization towers used in the processing of sugar from beets and sugar 
cane. The batch centrifuge produces the highest quality of sugar crystals and is
used in the final stage of the sugar refinement process. The lower cost         
continuous centrifuge is used in the preliminary stages of the crystallization  
process and provides more output as it processes in a continuous mode.          
Silver-Weibull's designed flexibility allows continuous monitoring of incoming  
product consistency to assure the highest quality and production rates in the   
industry.                                                                       

Citrus Processing Machinery.  Gumaco manufactures equipment including 
presses, evaporators, heat exchangers and dryers which concentrate fruit juices.
Gumaco is the innovator of the patented T.A.S.T.E. (Thermally Accelerated       
Short-Term Evaporator) which revolutionized the process of concentrating citrus 
juices. This process results in less waste and energy consumption and commands  
the majority of the world's market share for frozen concentrated orange juice.  
Gumaco's T.A.S.T.E. efficiency and reliability has enabled the Company to expand
into the chemical, petrochemical, pharmaceutical and waste treatment industries.

PRODUCT ENGINEERING AND DEVELOPMENT                                             

The Company is engaged in continuing worldwide product engineering and
development efforts to expand its product lines and to further develop more     
energy efficient and environmentally compatible systems.                        

Significant developments include the use of cost effective, non-fossil
fuels, biomass (bagasse, municipal solid waste, sludge and wood waste),         
refuse-derived fuel, coal and coal mixtures, the economical recycling of old    
asphalt, new designs of environmentally compatible asphalt plants and           
development of advanced designs of machinery for the remediation of contaminated
soil. In addition, product engineering and development activities are directed  
toward more efficient methods of producing asphalt through a continuous effort  
to improve the quality of the asphalt plants manufactured and the methods by    
which asphalt is produced by the plants. Product engineering and development has
also focused on the development of combustion systems that operate at higher    
temperatures and with higher levels of environmental compatibility, as well as  
more efficient and lower cost fluid heat transfer systems.                      

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 Product engineering and development efforts in the Company's pelleting,
grinding and flaking product lines are directed toward new mill design features,
such as quick change rollers and long-wearing dies, and developing testing      
facilities to expand product uses to include pharmaceutical and scientific      
applications. Product engineering and development expenses were approximately   
$1.2 million and $1.3 million for the six month periods ended March 31, 1997 and
1998, respectively, and approximately $1.9 million, $2.2 million, and $2.8      
million in the fiscal years ended September 30, 1995, 1996 and 1997,            
respectively.                                                                   

SOURCES OF SUPPLY AND MANUFACTURING                                             

 Substantially all products sold by the Company and its subsidiaries are
manufactured or assembled by the Company, except for procured raw materials and 
hardware. The Company purchases a large quantity of steel used in the           
manufacture of many of its products and various raw materials and hardware from 
hundreds of suppliers. The Company does not believe it is dependent on any      
single supplier for major raw materials or components. The Company reviews the  
cost effectiveness of internal manufacturing versus subcontracting the assembly 
of its product lines and currently believes it has the internal capability to   
produce the lowest cost, highest quality products.                              

COMPETITION                                                                     

 The markets for the Company's products are highly competitive. Within a
given product line, the industry remains fairly concentrated, with typically a  
small number of competitors accounting for the bulk of a product line's industry
sales. The principal competitive factors include product reliability and        
performance, brand recognition, price, distribution, design features and        
after-sale service. Management believes that its ability to compete depends on  
exceptional product performance, innovative technologies, competitive pricing   
and superior customer service support. In the international markets, the Company
competes with U.S. manufacturers and numerous global and local competitors.     
Management believes that the Company's international manufacturing facilities   
and distribution capabilities position it to provide value-added products and   
services to the U.S. and international markets. See "Industry -- Overview."     

SALES AND MARKETING                                                             

    The Company's products and services are marketed internationally through a
combination of Company-employed sales representatives, independent dealers and  
agents located throughout the world. The Company believes that it has developed 
the largest and most comprehensive marketing and sales organization in its      
industries, enabling it to focus on common end-markets and customers for all of 
the Company's product lines throughout the world. Each of the Company's business
groups is responsible for the marketing of its products and services. Each      
business division manages its own sales, promotion and marketing programs with  
coordination and support provided by corporate sales and marketing functions.   

CUSTOMERS                                                                       

  The Company's products are sold primarily through Company-employed sales
representatives, independent dealers and agents to large highway construction   
companies, producers of materials used in highway construction, commercial      
agricultural companies, integrated food producers, feed mills and food          
processing companies. Some of the Company's major customers include:            

Construction Equipment Group........     ARC Limited, Boral Limited (Boral      
                                        Asphalt), Cemex S.A., Diamond Shamrock
                                    Corporation, Granite Construction,
                              Hanson PLC, Hoechst-Celanese
                                         Corporation, Lafarge Corporation, Shell
                                   Oil Corporation, Vulcan Materials
                               Company, and Wimpey Minerals.

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Consolidated Process Machinery                                                  
Group...............................     Archer Daniels Midland Co., Cargill    
                                  Inc., Citrovita S.A., Dole Foods
                                     Company, Louis Dreyfus Citrus S.A.,
                                         Perdue Farms Inc., Spreckles Sugar Co.,
                                      Sucorricos S.A., Sucocitrico Cutrale
                                S.A., TicoFrut S.A., Tropicana
                                       Products, Inc., Tyson Foods, Inc. and
                        Western Sugar Company.

     The Company's ten largest customers accounted for 21% of revenues in fiscal
1997, with no single customer accounting for more than 7% of revenues.          

SALES BACKLOG                                                                   

 The nature of the Company's business is such as to require a relatively
short turnaround from order to shipment, usually less than ninety (90) days.    
Therefore, the size of the Company's backlog should not be viewed as an         
indicator of the Company's future financial results. The Company's backlog was  
approximately $50 million on March 31, 1998. The Company believes that all of   
this backlog will be delivered in fiscal 1998.                                  

LICENSES, PATENTS AND TRADEMARKS                                                

 The Company holds numerous patents covering technology and applications
related to various products, equipment and systems, and numerous trademarks and 
trade names registered with the U.S. Patent and Trademark Office and in various 
foreign countries. In general, the Company depends upon technological           
capabilities, manufacturing quality control and application know-how, rather    
than patents or other proprietary rights in the conduct of its business. The    
Company believes the expiration of any one of these patents or a group of       
related patents would not have a material adverse effect on the overall         
operations of the Company.                                                      

GOVERNMENT REGULATIONS                                                          

The Company believes its design and manufacturing processes meet all  
industry and governmental agency standards that may apply to its entire line of 
products, including all domestic and foreign environmental, structural,         
electrical and safety codes. The Company's products are designed and            
manufactured to comply with Environmental Protection Agency regulations. Certain
state and local regulatory authorities have strong environmental impact         
regulations. While the Company believes such regulations have helped, rather    
than restricted, its marketing efforts and sales results, there is no assurance 
that changes to federal, state, local, or foreign laws and regulations will not 
have a material adverse effect on the Company's products and earnings in the    
future.                                                                         

ENVIRONMENTAL MATTERS                                                           

  The Company is subject to various federal, state, local and foreign laws
and regulations relating to the protection of the environment. The Company is   
also subject to the federal Occupational Safety and Health Act and similar state
statutes. The Company believes it is in material compliance with all applicable 
environmental laws and regulations. The Company does not expect any material    
impact on future operating costs as a result of compliance with currently       
enacted environmental regulations.                                              

    The Company also regularly conducts an environmental assessment consistent
with recognized standards of due diligence on properties and businesses which it
acquires. To date, these assessments have not identified contamination resulting
from acquired properties that would be reasonably likely to result in a material
adverse effect on the Company's business, results of operations or financial    
condition.                                                                      

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LEGAL PROCEEDINGS                                                               

In the normal course of business, the Company has various lawsuits and
claims pending, which may be covered in whole or in part by insurance, and      
which, in any event, if found against the Company, will not have a material     
effect on the Company's results of operations. Management has reviewed all      
litigation matters and, upon advice of counsel, has made provisions for any     
estimable losses and expenses of litigation.                                    

PROPERTIES                                                                      

Set forth below are the properties of the Company:                    

                                                        [Enlarge/Download Table]

                                           OWNED    SQUARE                                      
LOCATION                                  ACREAGE  FOOTAGE       PRINCIPAL FUNCTION             
--------                                  -------  --------      ------------------             
                                                                                                
Amsterdam, Netherlands(1)................   1.2     64,000   Offices and manufacturing          
Araraquara, Brazil(1)....................  29.2    295,000   Offices and manufacturing          
Aurora, Colorado(1)......................  16.8    117,000   Offices and manufacturing          
Billingshurst, West Sussex England(1)....   1.2      5,000   Offices                            
Brisbane, Australia(2)...................   N/A     15,000   Offices and manufacturing          
Wuxi, Jiangsu, China(2)..................   N/A     11,000   Offices and warehouse              
Crawfordsville, Indiana(1)...............   2.7     62,000   Offices and manufacturing          
Daventry, England(2).....................   N/A      3,000   Office and warehouse               
Hasselholm, Sweden(2)....................   N/A     10,000   Offices and manufacturing          
Leicester, England(1)....................   6.0     97,000   Offices and manufacturing          
Marquette, Iowa(1).......................  72.0    137,000   Offices and manufacturing          
Merrimack, New Hampshire(2)(3)...........   N/A     37,000   Offices and manufacturing          
Orlando, Florida(1)......................  27.0    171,000   Principal offices and manufacturing
Rueil Malmaison, France(1)...............   0.2      4,000   Offices                            
Sao Paulo, Brazil(1).....................   0.4     38,000   Offices                            
Singapore, Republic of Singapore(2)......   N/A     40,000   Offices and manufacturing          
Waterloo, Iowa(1)........................  11.5     55,000   Offices and manufacturing          
Wexford, Ireland(1)......................   5.6     60,000   Offices and manufacturing          

---------------                                                                 

(1) Owned                                                                       

(2) Leased                                                                      

(3) The Company will be occupying this leased space commencing June 1998 and    
closing its leased facilities in Nashua, New Hampshire and other leased 
facilities in Merrimack, New Hampshire.                                 

  In addition, the Company owns properties in Youngstown, Ohio (5.5 acres;
45,000 square feet), Indianapolis, Indiana (11.3 acres; 79,000 square feet) and 
North Kansas City, Missouri (0.7 acres; 6,000 square feet), which have been used
by the Company as offices, manufacturing and warehouse facilities, and which are
currently in the process of being sold by the Company.                          

EMPLOYEES                                                                       

 As of May 1, 1998, the Company employed 1,599 persons, including 147 in
sales and marketing, 108 in product development and engineering, 194 in         
administration and 1,150 in manufacturing. The Company negotiated a collective  
bargaining agreement as of June 25, 1996 effective through June 27, 1998,       
covering production and maintenance employees at its Marquette, Iowa facility.  
In addition, the Company has a collective bargaining agreement in place covering
production employees at its Crawfordsville, Indiana facility until April 1,     
2000. None of the Company's remaining employees is represented by a labor union 
or is subject to a collective bargaining agreement. The Company believes that   
its relations with its employees are good. See "Risk Factors -- Dependence on   
Key Personnel."                                                                 

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MANAGEMENT

The following table lists each director and executive officer of the  
Company as of June 10, 1998. The table also includes the principal occupation   
and business experience for the past five years, positions and offices held with
the Company, and period of service as a director or executive officer.          

                                                        [Enlarge/Download Table]

                                                      PRINCIPAL OCCUPATION AND BUSINESS    
NAME AND POSITIONS HELD WITH THE COMPANY    AGE     EXPERIENCE DURING THE PAST FIVE YEARS  
----------------------------------------    ---     -------------------------------------  
                                                                                           
E. J. Elliott.............................. 69   Chairman of the Board and President of the
  Chairman of the Board and President;             Company                                 
  Director(1)(4)(5)(6)(9)                                                                  
Constantine L. Corpas...................... 68   Attorney, Corpas & Pahys                  
  Director(1)(2)(3)(6)                                                                     
John E. Elliott............................ 37   Executive Vice President of the Company   
  Executive Vice President,                        since 1989                              
  Director(4)(7)(10)                                                                       
Peter Kourmolis............................ 80   Investor                                  
  Director(2)(3)(6)                                                                        
Glenn B. Dalby............................. 41   President, ACP Holdings PLC since 1985    
  Director(8)                                                                              
David F. Brashears......................... 51   Senior Vice President, Technology, since  
                                                   1993; Vice President of Engineering,    
                                                   1978-1993                               
Marc G. Elliott(4)......................... 33   Vice President, Marketing since 1993;     
                                                   previously served in various marketing  
                                                   positions since joining the Company in  
                                                   1988                                    
D. William Garrett......................... 49   Vice President, Sales since 1991;         
                                                   previously held various top management  
                                                   positions in the Company or its         
                                                   subsidiaries since 1984                 
Russell R. Lee, III........................ 48   Treasurer of the Company since 1995;      
                                                   Corporate Controller, 1990-1995         

---------------                                                                 

(1) Member of the Executive Committee.                                        

(2) Member of the Audit Committee.                                            

(3) Member of the Compensation Committee.                                     

(4) E.J. Elliott is the father of John E. Elliott and Marc G. Elliott.        

(5) Each executive officer holds office until his successor has been elected  
and qualified, or until his earlier resignation or removal.           

(6) Director of Company since 1968.                                           

(7) Director of Company since 1985.                                           

(8) Director of Company since 1998.                                           

(9) Officer of Company since 1968.                                            

(10) Officer of Company since 1985.                                             

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PRINCIPAL AND SELLING STOCKHOLDERS

 The Selling Stockholders have advised the Company that they are selling
their shares hereunder in order to exercise and pay for Company stock options,  
and to otherwise recoup a portion of certain amounts invested by the Selling    
Stockholders as a condition to the financing of the acquisition of the PED      
Division of Ingersoll-Rand pursuant to the Credit Facility. The following table 
sets forth certain information regarding beneficial ownership of the Common     
Stock and Class B Stock as of May 5, 1998, with respect to (i) each Selling     
Stockholder, (ii) each person known by the Company to be the beneficial owner of
more than 5% of the Company's Common Stock or Class B Stock, (iii) each director
and executive officer of the Company, and (iv) the directors and executive      
officers of the Company as a group. Except as otherwise noted, each named       
beneficial owner has sole voting and investment power over the shares shown.    

                                                        [Enlarge/Download Table]

                                                                                        SHARES                        
                                                                                         BEING                        
                                                   SHARES BENEFICIALLY                  OFFERED   SHARES BENEFICIALLY 
                                               OWNED PRIOR TO OFFERING(1)               -------  OWNED AFTER OFFERING 
                                   ---------------------------------------------------  COMMON   ---------------------
                                         COMMON STOCK              CLASS B STOCK         STOCK       COMMON STOCK     
                                   ------------------------   ------------------------  -------  ---------------------
                                    NUMBER          PERCENT    NUMBER          PERCENT  NUMBER     NUMBER     PERCENT 
                                   ---------        -------   ---------        -------  -------  ----------   --------
                                                                                                                      
NAME                                                                                                                  
E. J. Elliott.....................   971,080(2)      13.8%    2,177,296(3)      85.5%   441,000    530,080       5.3% 
Constantine L. Corpas.............   100,000(4)       1.4       110,000          6.2          0    100,000       1.0  
John E. Elliott...................   468,096(5)       6.6       495,520(6)      22.7     70,000    398,096       4.0  
Peter Kourmolis...................    77,566(7)       1.1             *            *          0     77,566         *  
David F. Brashears................   129,824(8)       1.8             *            *     29,000    100,824       1.0  
D. William Garrett................   100,456(9)       1.4             *            *          0    100,456       1.0  
Russell R. Lee, III...............    80,000(10)      1.1             *            *          0     80,000         *  
Marc G. Elliott...................   120,000(5)       1.7       465,520(6)      21.3     60,000     60,000         *  
Wingspan Enterprises, Ltd.........   480,000(11)      6.8             *            *          0    480,000       4.8  
Harvey Houtkin....................   634,952(12)      9.0             *            *          0    634,952       6.3  
All Directors and Executive                                                                                           
  Officers as a Group (9                                                                                              
  persons)........................ 2,287,022(13)     31.1     3,248,336(14)     96.0    600,000  1,687,022      16.8  

---------------                                                                 

*  Percentage ownership is less than 1%                                     

(1) In accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as  
   amended, shares that are not outstanding, but that are subject to option,
   warrants, rights or conversion privileges exercisable within 60 days have
   been deemed to be outstanding for the purpose of computing the percentage
  of outstanding shares owned by the individual having such right but have
     not been deemed outstanding for the purpose of computing the percentage for
any other person.                                                     

(2) Includes 120,000 shares owned jointly with John Elliott and 120,000 shares
owned jointly with Marc Elliott.                                      

(3) Includes options to purchase 780,000 shares of Class B Stock.             

(4) Includes options to purchase 60,000 shares of Common Stock.               

(5) Includes 120,000 shares owned jointly with E.J. Elliott.                  

(6) Includes options to purchase 418,000 shares of Class B Stock.             

(7) Includes options to purchase 58,000 shares of Common Stock.               

(8) Includes options to purchase 60,000 shares of Common Stock.               

(9) Includes options to purchase 40,000 shares of Common Stock.               

(10) Includes options to purchase 80,000 shares of Common Stock.                

(11) A corporation in which Glenn B. Dalby, a director of the Company, is a     
principal shareholder.                                                

(12) Based on a Schedule 13D dated July 17, 1997 filed by Harvey Houtkin with   
the Securities and Exchange Commission. Includes 115,139 shares       
individually owned by Mr. Houtkin and subject to sole voting and      
dispositive power. Includes the following shares with Mr. Houtkin as  
   control person subject to shared voting and dispositive power: 518 shares
  owned by Mark Shefts, who is Mr. Houtkin's brother-in-law. Also includes
128,489 shares held by Sherry Houtkin, wife of Mr. Houtkin; and 73,330
shares held by Wanda Shefts, wife of Mr. Shefts; as to which in the   
aggregate, Mr. Houtkin disclaims beneficial ownership.                

(13) Includes options to purchase 298,000 shares of Common Stock.               

(14) Includes options to purchase 1,616,000 shares of Class B Stock.            

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DESCRIPTION OF CAPITAL STOCK

 The following summarizes the material terms of the capital stock of the
Company.                                                                        

GENERAL                                                                         

   The authorized capital stock of the Company consists of 15,000,000 shares
of Common Stock, par value $.10 per share, 10,045,740 shares of which will be   
issued and outstanding upon the consummation of this Offering (10,585,740 if the
Underwriters' over-allotment option is exercised in full); 6,000,000 shares of  
Class B Stock, par value $.10 per share, 1,766,128 shares of which will be      
issued and outstanding upon consummation of this Offering; and 300,000 shares of
Preferred Stock, par value $.10 per share, none of which will be outstanding    
upon consummation of this Offering. As of May 15, 1998 there were 7,045,740     
shares of Common Stock outstanding, 1,766,128 shares of Class B stock           
outstanding and no shares of Preferred Stock outstanding.                       

RIGHTS OF THE COMMON STOCK AND CLASS B STOCK                                    

Voting Rights                                                               

    Each share of Class B Stock entitles the holder thereof to one vote on all
matters submitted to shareholders, except that holders of Common Stock shall    
have the right, voting as a class, to elect approximately 25 percent of the     
Board of Directors and the holders of Class B Stock shall have the right, voting
as a class, to elect approximately 75 percent of the Board of Directors. Where  
adjustment is required, the holders of Class B Stock are entitled to elect 75   
percent of the Board of Directors calculated to the nearest whole number        
rounding any fractional number of five-tenths or more to the next highest whole 
number, and the holders of Common Stock will be entitled to elect the balance of
the directors.                                                                  

    The Certificate of Incorporation provides that holders of Common Stock and
Class B Stock vote separately as a class on (i) any merger or consolidation of  
the Company with or into any other corporation; or any sale, lease, exchange, or
other disposition of all or substantially all of the Company's assets to or with
any other person except where such merger or transaction is with a              
majority-owned subsidiary of the Company; or any dissolution of the Company;    
(ii) any additional issuance of shares of Class B Stock other than in connection
with stock splits and stock dividends on shares of Class B Stock or the exercise
of stock options by holders of Class B Stock; (iii) any modification, alteration
or amendment to the Certificate of Incorporation; and (iv) on any other matters 
requiring a separate vote by classes provided for under the Delaware Corporation
Law.                                                                            

    Any action that can be taken at a meeting of the stockholders may be taken
by written consent in lieu of the meeting if the Company receives consents      
signed by stockholders having the minimum number of votes that would be         
necessary to approve the action at a meeting at which all shares entitled to    
vote on the matter were present.                                                

Dividends and Distributions (Including Distributions Upon Liquidation of the
Company)                                                                        

Holders of Common Stock and Class B Stock are entitled to receive cash
dividends at the same rate if and when declared by the board of directors out of
funds legally available therefor, subject to the dividend and liquidation rights
of any Preferred Stock that may be issued and outstanding. With respect to      
distributions other than cash dividends, all other distributions, including     
stock dividends and all other distributions and rights including distributions  
upon liquidation, the Common Stock and Class B Stock will rank equally and have 
the same rights, except that stock dividends and stock splits of the Common     
Stock and the Class B Stock will be payable or made to the holders of each such 
class only in the shares of such class.                                         

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Restrictions on Transfers of Class B Stock (Conversion of Class B Stock into
Common Stock)                                                                   

 As more fully described below, the Class B Stock is not transferable as
Class B Stock except to certain eligible transferees including such holder's    
spouse, certain of such holder's relatives, certain trusts established for their
benefit, corporations and partnerships principally owned by such holders, their 
relatives and such trusts, charitable organizations and such holder's estate.   
Accordingly, there is no trading market for shares of Class B Stock.            

  Other than pursuant to conversions into Common Stock as described below,
the holder of shares of Class B Stock may transfer such shares (whether by sale,
assignment, gift, bequest, appointment, or otherwise) only to a permitted       
transferee (a "Permitted Transferee") defined generally as follows:             

(i) The spouse of the holder of such Class B Stock;         

         (ii) Any lineal descendant of a grandparent of such holder of Class B
     Stock, including adopted children, and any spouse of such lineal descendant
  (said descendants, together with such shareholder and such shareholder's
     spouse, being hereinafter referred to as "such Class B Shareholder's Family
Members");                                                            

(iii) A trust principally for the benefit of such Class B   
Shareholder's Family Members and charitable organizations;            

(iv) Any charitable organization;                           

  (v) A partnership or corporation, a majority of the beneficial
   ownership of which is owned by such holder of Class B Stock and/or one or
more of his or her Permitted Transferees; and                         

(vi) The estate of such holder of Class B Stock.            

Shares of Class B Stock held by a partnership or corporation may be   
transferred to a person who transferred such shares to such partnership or      
corporation (and to such person's Permitted Transferees). Shares of Class B     
Stock may, upon certain circumstances, also be transferred by a corporation or  
by a partnership to its successor. Shares held by trusts which are irrevocable  
at the time of issuance of the Class B Stock may be transferred to any person to
whom or for whose benefit principal may be distributed under the terms of the   
trust and such person's Permitted Transferees. Shares held by all other trusts  
may be transferred to the person who established such trust and such person's   
Permitted Transferees. Shares held by estates of Class B shareholders may be    
transferred to Permitted Transferees of such Class B shareholders.              

  Any transfer of shares of Class B Stock not permitted under the Restated
Certificate of Incorporation shall result in the conversion of the transferee's 
shares of Class B stock into shares of Common Stock, effective as of the day on 
which certificates representing such shares are presented for transfer on the   
books of the Company.                                                           

Conversion Rights Applicable to Class B Stock                               

 The Class B Stock will be convertible on a share for share basis at all
times other than while the stock transfer books of the Company are closed for   
any purpose. Any shares surrendered for conversion while the stock transfer     
books are closed shall be converted immediately upon reopening the stock        
transfer books as of the day such shares were surrendered for conversion.       
Holders of Common Stock are not entitled to exchange or otherwise convert shares
of Common Stock into shares of Class B Stock. Shares of Class B stock are also  
subject to conversion in the event of presentation for transfer to other than a 
Permitted Transferee, as outlined above, and automatic conversion as outlined   
below.                                                                          

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Automatic Conversion of Class B Stock                                       

  All shares of outstanding Class B Stock will be converted into shares of
Common Stock on a share for share basis automatically and without further action
of the board of directors or the holders thereof if at any time (i) the number  
of outstanding shares of Class B Stock as reflected on the stock transfer books 
of the Company falls below 100,000 shares, or (ii) the board of directors and   
the holders of a majority of the outstanding shares of the Class B Stock approve
the conversion of all of the outstanding shares of the Class B Stock into Common
Stock. In the event of such conversion, certificates formerly representing      
outstanding shares of Class B Stock will thereafter be deemed to represent a    
like number of shares of Common Stock.                                          

Other                                                                       

     The currently outstanding Common Stock does not carry any preemptive rights
enabling a holder to subscribe for or receive shares of stock of the Company of 
any class or any other securities convertible into shares of stock of the       
Company. The Company delivers to the holders of Class B Stock the same          
information and reports which it delivers to holders of Common Stock. The       
Company expects the Common Stock to remain registered under the Securities      
Exchange Act of 1934 but does not intend to register the Class B Stock under the
Act unless such registration is required by law.                                

PREFERRED STOCK                                                                 

The Board of Directors may, without further action by the Company's   
stockholders, from time to time, direct the issuance of shares of Preferred     
Stock in series and may, at the time of issuance, determine the rights,         
preferences and limitations of each series. Satisfaction of any dividend        
preferences of outstanding shares of Preferred Stock would reduce the amount of 
funds available for the payment of dividends on shares of Common Stock. Holders 
of shares of Preferred Stock may be entitled to receive a preference payment in 
the event of any liquidation, dissolution or winding-up of the Company before   
any payment is made to the holders of shares of Common Stock. Under certain     
circumstances, the issuance of shares of Preferred Stock may render more        
difficult or tend to discourage a merger, tender offer or proxy contest, the    
assumption of control by a holder of a large block of the Company's securities  
or the removal of incumbent management. The Board of Directors, without         
stockholder approval, may issue shares of Preferred Stock with voting and       
conversion rights which could adversely affect holders of shares of Common      
Stock. Upon consummation of the Offering, there will be no shares of Preferred  
Stock outstanding, and the Company has no present intention to issue any shares 
of Preferred Stock.                                                             

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE CHARTER AND BY-LAWS AND OF DELAWARE  
LAW                                                                             

Charter and By-Laws                                                         

     The Certificate of Incorporation authorizes the directors to issue, without
stockholder approval, shares of Preferred Stock in one or more series and to fix
the voting powers, designations, preferences and relative, participating,       
optional or other special rights (and the qualifications, limitations or        
restrictions of such preferences and rights) of the shares of each such series. 
The Certificate of Incorporation and By-laws provide that special meetings of   
the Company's stockholders may be called only by the President, and shall be    
called by the President or Secretary at the request of a majority of the        
directors or at the request in writing of the holder of a majority of the shares
of stock of the Company issued and outstanding and entitled to vote at any      
meeting at which the directors of the Company are elected. The By-laws also     
require a stockholder to provide to the Secretary of the Company advance notice 
of business to be brought by such stockholder before any annual or special      
meeting of stockholders as well as certain information regarding such           
stockholder and others known to support such proposal and any material interest 
they may have in the proposed                                                   

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business. These provisions could delay stockholder actions that are favored by  
the holders of a majority of the outstanding stock of the Company until the next
stockholders' meeting.                                                          

The rights of the holders of Class B Stock to elect approximately 75  
percent of the directors and the requirement that certain mergers,              
consolidations, sales of assets, and other matters be approved by the           
affirmative vote of a majority of the outstanding Common Stock and the          
affirmative vote of a majority of the outstanding Class B Stock, in each case   
voting separately as a class, may have a deterrent effect on takeover attempts. 

Delaware Anti-Takeover Statute                                              

   The Company is subject to Section 203 of the Delaware General Corporation
Law which, subject to certain exceptions, prohibits a Delaware corporation from 
engaging in any business combination with any interested stockholder for a      
period of three years following the time that such stockholder became an        
interested stockholder, unless: (i) prior to such time, the board of directors  
of the corporation approved either the business combination or the transaction  
which resulted in the stockholder becoming an interested stockholder, (ii) upon 
consummation of the transaction which resulted in the stockholder becoming an   
interested stockholder, the interested stockholder owned at least 85% of the    
voting stock of the corporation outstanding at the time the transaction         
commenced, excluding for purposes of determining the number of shares           
outstanding those shares owned (x) by persons who are directors and also        
officers and (y) by employee stock plans in which employee participants do not  
have the right to determine confidentially whether shares held subject to the   
plan will be tendered in a tender or exchange offer; or (iii) at or subsequent  
to such time, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written  
consent, by the affirmative vote of at least two-thirds of the outstanding      
voting stock which is not owned by the interested stockholder. The application  
of Section 203 may limit the ability of stockholders to approve a transaction   
that they may deem to be in their best interests.                               

    In general, Section 203 defines "business combination" to include: (i) any
merger or consolidation involving the corporation and the interested            
stockholder; (ii) any sale, transfer, pledge or other disposition of 10% or more
of the assets of the corporation to or with the interested stockholder; (iii)   
subject to certain exceptions, any transaction which results in the issuance or 
transfer by the corporation of any stock of the corporation to the interested   
stockholder; (iv) any transaction involving the corporation which has the effect
of increasing the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested stockholder; or (v) the receipt
by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation. In  
general, Section 203 defines an "interested stockholder" as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the          
corporation and any entity or person associated with, affiliated with or        
controlling or controlled by such entity or person.                             

TRANSFER AGENT AND REGISTRAR                                                    

The transfer agent and registrar for the Common Stock is Firstar Trust
Company, 1555 North River Center Drive, Suite 301, Milwaukee, Wisconsin 53212.  

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UNDERWRITING

   The Underwriters named below (the "Underwriters") for whom Schroder & Co.
Inc., McDonald & Company Securities, Inc., Credit Lyonnais Securities (USA) Inc.
and BlueStone Capital Partners, L.P. are acting as representatives (the         
"Representatives"), have severally agreed, subject to the terms and conditions  
of the Underwriting Agreement, to purchase from the Company and the Selling     
Stockholders, and the Company and the Selling Stockholders have agreed to sell  
to the Underwriters, the aggregate number of shares of Common Stock set forth   
opposite their respective names.                                                

                                                                [Download Table]

UNDERWRITER                                                   NUMBER OF SHARES
-----------                                                   ----------------
                                                                              
Schroder & Co. Inc..........................................                  
McDonald & Company Securities, Inc..........................                  
Credit Lyonnais Securities (USA) Inc........................                  
BlueStone Capital Partners, L.P.............................                  

                                                                 ----------   
          Total.............................................      3,600,000   
                                                                 ==========   

    The Underwriting Agreement provides that the Underwriters are obligated to
purchase all of the shares of Common Stock offered hereby, if any such shares   
are purchased.                                                                  

   The Representatives have advised the Company and the Selling Stockholders
that the Underwriters propose to offer the shares of Common Stock directly to   
the public, initially at the public offering price set forth on the cover page  
of this Prospectus; that the Underwriters propose initially to allow a          
concession not in excess of $     per share to certain dealers and that the     
Underwriters and such dealers may initially allow a concession not in excess of 
$     per share to other dealers. After the initial offering of the shares of   
Common Stock, the public offering price and stock concessions may be changed.   

    The Company has granted the Underwriters an option exercisable for 30 days
from the date of the Underwriting Agreement, to purchase up to an additional    
540,000 shares of Common Stock at the public offering price less underwriting   
discounts and commissions, all as set forth on the cover page of this           
Prospectus. The Underwriters may exercise the option, in whole or in part, only 
to cover over-allotments, if any, in connection with the sale of shares of      
Common Stock offered hereby.                                                    

The Company and the Selling Stockholders have agreed to indemnify the 
Underwriters against certain liabilities, including liabilities under the       
Securities Act.                                                                 

The Company, its directors and executive officers, and the Selling    
Stockholders have agreed not to offer, sell, contract to sell, grant an option  
to purchase or otherwise dispose (or announce any offer, sale, grant of any     
option or other distribution) of any shares of Common Stock or any securities   
convertible into or exchangeable for shares of common stock for a period of 180 
days following the Offering without the prior written consent of Schroder & Co. 
Inc.                                                                            

  The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions, and penalty bids in accordance with Regulation 
M under the Securities Exchange Act of 1934 (the "Exchange Act"). Over-allotment
involves syndicate sales in excess of the offering size, which creates a        
syndicate short position. Stabilizing transactions permit bids to purchase the  

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underlying security so long as the stabilizing bids do not exceed a specific    
maximum. Syndicate covering transactions involve purchases of the securities in 
the open market after the distribution has been completed in order to cover     
syndicate short positions. Penalty bids permit the Underwriters to reclaim a    
selling concession from a syndicate member when the securities originally sold  
by such syndicate member are purchased in a syndicate covering transaction to   
cover syndicate short positions. Such stabilizing transactions, syndicate       
covering transactions and penalty bids may cause the price of the securities to 
be higher than it would otherwise be in the absence of such transactions. These 
transactions may be effected on the AMEX or otherwise and, if commenced, may be 
discontinued at any time.                                                       

     Credit Lyonnais New York Branch, an affiliate of Credit Lyonnais Securities
(USA), Inc., an underwriter for this Offering, is the agent bank and a lender   
under the Credit Facility, and will receive its pro rata share relative to all  
lenders under the Credit Facility of the proceeds of the Offering. See "Use of  
Proceeds." Accordingly, the Offering is being conducted in accordance with the  
requirements of Rule 2720 of the Conduct Rules of the National Association of   
Securities Dealers, Inc.                                                        

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

     The following documents heretofore filed by the Company with the Commission
(File No. 1-11703) pursuant to the Exchange Act are incorporated by reference in
this Prospectus and shall be deemed to be a part hereof:                        

  1. The Company's Annual Report on Form 10-K for the year ended
September 30, 1997 and Form 10-K/A (Amendment No. 1) to said Form 10-K
filed January 20, 1998.                                               

         2. The Company's Quarterly Reports on Form 10-Q for the periods ended
December 31, 1997 and March 31, 1998; and                             

       3. The Company's Current Reports on Form 8-K dated October 27, 1997
and November 20, 1997.                                                

    All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus 
and prior to the termination of the Offering shall be deemed to be incorporated 
by reference in this Prospectus and to be a part hereof from their respective   
dates of filing. Any statement contained herein or in any document incorporated 
or deemed to be incorporated shall be deemed to be modified or superseded for   
all purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any subsequently filed document which also is deemed to be     
incorporated by reference herein modifies or supersedes such statement. Any     
statement so modified or superseded shall not be deemed, except as so modified  
or superseded, to constitute a part of this Prospectus. The making of a         
modifying or superseding statement shall not be deemed an admission for any     
purposes that the modified or superseded statement, when made, constituted a    
misrepresentation, an untrue statement of a material fact or an omission to     
state a material fact that is required to be stated or that is necessary to make
a statement not misleading in light of the circumstances in which it was made.  

   The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon written or oral request 
of such person, a copy of any and all of the information that has been          
incorporated by reference in the Prospectus (other than exhibits to the         
information that is incorporated by reference unless such exhibits are          
specifically incorporated by reference into the information that this Prospectus
incorporates). Requests should be directed to Secretary, Gencor Industries,     
Inc., at the Company's principal executive offices, 5201 N. Orange Blossom      
Trail, Orlando, Florida 32810, telephone number (407) 290-6000. Persons         
requesting copies of exhibits to such documents that were not specifically      
incorporated by reference in such documents will be charged the costs of        
reproduction and mailing.                                                       

     This Prospectus includes trade names and trademarks of companies other than
Gencor. The use of any such third party trade name or trademark herein is an    
editorial fashion only, and to the benefit of the owner thereof, with no        
intention of commercial use or infringement of such trade name or trademark.    

LEGAL MATTERS 

     The validity of the Common Stock offered hereby will be passed upon for the
Company and the Selling Stockholders by Greenberg Traurig Hoffman Lipoff Rosen &
Quentel, P.A., 111 North Orange Avenue, Orlando, Florida 32801. Certain matters 
will be passed upon for the Underwriters by Cahill Gordon & Reindel (a          
partnership including a professional corporation), 80 Pine Street, New York, New
York 10005.                                                                     

EXPERTS 

    The consolidated financial statements of the Company at September 30, 1997
and 1996, and for each of the three years within the period ended September 30, 
1997, appearing in this Prospectus                                              

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and Registration Statement have been audited by Deloitte & Touche LLP,          
independent auditors, as stated in their report thereon appearing elsewhere     
herein, and are included in reliance upon the report of such firm given upon    
their authority as experts in accounting and auditing.                          

AVAILABLE INFORMATION 

  The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other      
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected and copied at  
the public reference facilities maintained by the Commission at Room 1024, 450  
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional    
offices located at Seven World Trade Center, 13th Floor, New York, New York     
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60061. Copies  
of such material can also be obtained at prescribed rates by writing the        
Commission, Pubic Reference Section, 450 Fifth Street, N.W., Washington, D.C.   
20549. The Commission maintains a Web site, the address of which is             
http://www.sec.gov, that contains reports, proxy and information statements and 
other information regarding registrants, including the Company, that file       
electronically with the Commission. The Company's Common stock is listed on the 
American Stock Exchange, and reports, proxy statements and other information    
concerning the Company may also be inspected at the offices of the American     
Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006-1881.          

 The Company has filed with the Commission a registration statement (the
"Registration Statement," which term shall include any amendments thereto) on   
Form S-3 under the Securities Act, with respect to the shares of Common Stock   
offered hereby. This Prospectus does not contain all the information set forth  
in the Registration Statement and the exhibits and schedules thereto, certain   
parts of which are committed in accordance with the rules and regulations of the
Commission, and to which reference is hereby made. For further information,     
reference is hereby made to the Registration Statement and the exhibits and     
schedules thereto.                                                              

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GENCOR INDUSTRIES, INC. 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
Report of Independent Certified Public Accountants..........  F-2 
Consolidated Balance Sheets at September 30, 1996 and 1997        
  and March 31, 1998 (Unaudited)............................  F-3 
Consolidated Statements of Income for the Years ended             
  September 30, 1995, 1996 and 1997 and the Six Months Ended      
  March 31, 1997 and 1998 (Unaudited).......................  F-4 
Consolidated Statements of Shareholders' Equity for the           
  Years Ended September 30, 1995, 1996 and 1997 and the Six       
  Months Ended March 31, 1998 (Unaudited)...................  F-5 
Consolidated Statements of Cash Flows for the Years Ended         
  September 30, 1995, 1996 and 1997 and the Six Months Ended      
  March 31, 1997 and 1998 (Unaudited).......................  F-6 
Notes to Consolidated Financial Statements..................  F-7 

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of                                   
Gencor Industries, Inc.:                                                    

We have audited the accompanying consolidated balance sheets of Gencor
Industries, Inc. and subsidiaries (the "Company") as of September 30, 1996 and  
1997, and the related consolidated statements of income, shareholders' equity   
and cash flows for each of the three years in the period ended September 30,    
1997. These consolidated financial statements are the responsibility of the     
Company's management. Our responsibility is to express an opinion on the        
financial statements based on our audits.                                       

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

   In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Gencor Industries, Inc. and    
subsidiaries at September 30, 1996 and 1997, and the results of their operations
and their cash flows for each of the three years in the period ended September  
30, 1997, in conformity with generally accepted accounting principles.          

                              /s/  DELOITTE & TOUCHE LLP

November 11, 1997                                                               
(April 9, 1998 as to the effects of the stock split described in Note 1)    
Orlando, Florida                                                                

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GENCOR INDUSTRIES, INC. 

CONSOLIDATED BALANCE SHEETS 
(All Dollar Amounts in Thousands except for Share Amounts)

                                                        [Enlarge/Download Table]

                                                              SEPTEMBER 30,                  
                                                           -------------------    MARCH 31,  
                                                             1996       1997         1998    
                                                           --------   --------   ------------
                                                                                 (UNAUDITED) 
                                                                                             
ASSETS                                                                                       
Current Assets:                                                                              
  Cash and cash equivalents............................... $  1,501   $ 10,287     $  9,744  
  Accounts receivable, less allowance for doubtful                                           
     accounts of $2,859, $3,412, $3,818 (unaudited),                                         
     respectively.........................................   24,646     36,465       39,188  
  Inventories.............................................   41,537     46,175       53,888  
  Prepaid expenses, including deferred income taxes of                                       
     $612, $419, $0 (unaudited), respectively.............    2,129      2,466        2,371  
                                                           --------   --------     --------  
          Total current assets............................   69,813     95,393      105,191  
Property and Equipment -- Net.............................   36,795     38,414       42,753  
Goodwill..................................................    9,107     16,119       18,600  
Other Assets..............................................    3,346     13,226       15,964  
                                                           --------   --------     --------  
                                                           $119,061   $163,152     $182,508  
                                                           ========   ========     ========  
LIABILITIES AND SHAREHOLDERS' EQUITY                                                         
Current Liabilities:                                                                         
  Notes payable........................................... $  1,699   $     44     $  6,276  
  Current portion of long-term debt.......................    2,528      4,798        6,060  
  Accounts payable........................................   13,368     15,825       14,381  
  Customer deposits.......................................    3,242     12,218       15,991  
  Income taxes payable....................................      285        701        2,065  
  Accrued expenses........................................    8,830     16,080       18,240  
                                                           --------   --------     --------  
          Total current liabilities.......................   29,952     49,666       63,013  
Post-Retirement Benefits..................................    1,526      1,958        2,155  
Deferred Income Taxes.....................................    1,438        738        2,061  
Other Liabilities.........................................       --      3,089        3,332  
Long-Term Debt............................................   73,746     86,489       85,145  

Contingencies and Commitments                                                                

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 (5,000,000 in 1996); 6,545,740                                        
     shares issued (6,481,068 shares in 1996).............      648        654          654  
  Class B stock, par value $.10 per share; 6,000,000                                         
     shares authorized (3,000,000 in 1996); 1,766,128                                        
     shares issued........................................      177        177          177  
  Capital in excess of par value..........................    7,217      9,356        9,356  
  Retained earnings.......................................    4,998     11,804       17,478  
  Cumulative translation adjustment.......................      309       (684)        (768) 
  Subscription receivable from officer....................      (95)       (95)         (95) 
  Common stock in treasury, 1,065,740 shares at cost......     (855)        --           --  
                                                           --------   --------     --------  
                                                             12,399     21,212       26,802  
                                                           --------   --------     --------  
                                                           $119,061   $163,152     $182,508  
                                                           ========   ========     ========  

See accompanying notes to consolidated financial statements.

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GENCOR INDUSTRIES, INC. 

CONSOLIDATED STATEMENTS OF INCOME 
(All Dollar Amounts in Thousands, except per Share Amounts) 

                                                        [Enlarge/Download Table]

                                                                              SIX MONTHS     
                                            YEARS ENDED SEPTEMBER 30,      ENDED MARCH 31,   
                                           ----------------------------   ------------------ 
                                            1995      1996       1997      1997       1998   
                                           -------   -------   --------   -------   -------- 
                                                                             (UNAUDITED)     
                                                                                             
Net Revenue..............................  $58,944   $60,208   $195,313   $83,936   $117,667 
Costs And Expenses:                                                                          
  Production costs.......................   42,763    44,534    142,878    60,661     79,272 
  Product engineering and development....    1,920     2,208      2,824     1,167      1,289 
  Selling, general and administration                                                        
     expenses............................   10,390     8,226     31,405    15,940     22,540 
                                           -------   -------   --------   -------   -------- 
                                            55,073    54,968    177,107    77,768    103,101 
                                           -------   -------   --------   -------   -------- 
Operating Income.........................    3,871     5,240     18,206     6,168     14,566 
Other Income (Expense):                                                                      
  Interest income........................       17        --        363         5        675 
  Interest expense.......................   (1,055)   (1,357)    (7,170)   (3,177)    (5,377)
  Miscellaneous..........................      292        68       (378)      345       (360)
                                           -------   -------   --------   -------   -------- 
                                              (746)   (1,289)    (7,185)   (2,827)    (5,062)
                                           -------   -------   --------   -------   -------- 
Income Before Income Taxes and                                                               
  Extraordinary Gain.....................    3,125     3,951     11,021     3,341      9,504 
Provision For Income Taxes...............    1,086     1,195      4,125     1,198      3,611 
                                           -------   -------   --------   -------   -------- 
  Income Before Extraordinary Gain.......    2,039     2,756      6,896     2,143      5,893 
Extraordinary Gain From The Retirement Of                                                    
  Debt -- Net of income taxes of                                                             
  $312,000...............................      498        --         --        --         -- 
                                           -------   -------   --------   -------   -------- 
          Net Income.....................  $ 2,537   $ 2,756   $  6,896   $ 2,143   $  5,893 
                                           =======   =======   ========   =======   ======== 
Net Income Per Share:                                                                        
  Basic:                                                                                     
     Income before extraordinary gain....  $  0.29      0.39   $   0.85   $  0.27   $   0.71 
     Extraordinary gain                       0.07        --         --        --         -- 
                                           -------   -------   --------   -------   -------- 
          Net Income.....................  $  0.36   $  0.39   $   0.85   $  0.27   $   0.71 
                                           =======   =======   ========   =======   ======== 
  Diluted:                                                                                   
     Income before extraordinary gain....  $  0.29   $  0.38   $   0.74   $  0.24   $   0.60 
     Extraordinary gain..................     0.07        --         --        --         -- 
                                           -------   -------   --------   -------   -------- 
          Net Income.....................  $  0.36   $  0.38   $   0.74   $  0.24   $   0.60 
                                           =======   =======   ========   =======   ======== 

See accompanying notes to consolidated financial statements.

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GENCOR INDUSTRIES, INC. 

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 
YEARS ENDED SEPTEMBER 30, 1995, 1996, AND 1997 AND SIX MONTHS ENDED MARCH 31, 
1998 (UNAUDITED)
(All Dollar Amounts in Thousands) 

                                                        [Enlarge/Download Table]

                                                                CAPITAL IN                                     
                         COMMON STOCK         CLASS B STOCK       EXCESS              CUMULATIVE               
                      -------------------   ------------------      OF      RETAINED  TRANSLATION  SUBSCRIPTION
                        SHARES     AMOUNT    SHARES     AMOUNT  PAR VALUE   EARNINGS  ADJUSTMENT    RECEIVABLE 
                      ----------   ------   ---------   ------  ----------  --------  -----------  ------------
                                                                                                               
September 30, 1994...  5,838,028    $584    1,578,300    $159     $6,250    $   744      $ 316        $(100)   
  10% stock                                                                                                    
    dividend.........    583,040      58      157,828      16        878       (952)        --           --    
  Net income.........         --      --           --      --         --      2,537         --           --    
  Translation                                                                                                  
    adjustment.......         --      --           --      --         --         --          3           --    
  Reductions in                                                                                                
    subscription                                                                                               
    receivable.......         --      --           --      --         --         --         --            5    
                      ----------    ----    ---------    ----     ------    --------     -----        -----    
September 30, 1995...  6,421,068     642    1,736,128     175      7,128      2,329        319          (95)   
  Stock options                                                                                                
    exercised........     60,000       6       30,000       2         89         --         --           --    
  Cash dividend......         --      --           --      --         --        (87)        --           --    
  Net income.........         --      --           --      --         --      2,756         --           --    
  Translation                                                                                                  
    adjustment.......         --      --           --      --         --         --        (10)          --    
                      ----------    ----    ---------    ----     ------    --------     -----        -----    
September 30, 1996...  6,481,068     648    1,766,128     177      7,217      4,998        309          (95)   
  Sale of stock......  1,130,412     112           --      --      2,888         --         --           --    
  Retirement of                                                                                                
    treasury stock... (1,065,740)   (106)          --      --       (749)        --         --           --    
  Cash dividend......         --      --           --      --         --        (90)        --           --    
  Net income.........         --      --           --      --         --      6,896         --           --    
  Translation                                                                                                  
    adjustment.......         --      --           --      --         --         --       (993)          --    
                      ----------    ----    ---------    ----     ------    --------     -----        -----    
September 30, 1997...  6,545,740     654    1,766,128     177      9,356     11,804       (684)         (95)   
  Cash dividend......         --      --           --      --         --       (219)        --           --    
  Net income.........         --      --           --      --         --      5,893         --           --    
  Translation                                                                                                  
    adjustment.......         --      --           --      --         --         --        (84)          --    
                      ----------    ----    ---------    ----     ------    --------     -----        -----    
March 31, 1998                                                                                                 
  (Unaudited)........  6,545,740    $654    1,766,128    $177     $9,356    $17,478      $(768)       $ (95)   
                      ==========    ====    =========    ====     ======    ========     =====        =====    



                                                   TOTAL                                                       
                      TREASURY STOCK           SHAREHOLDERS'                                                   
                          SHARES       COST       EQUITY                                                       
                      --------------   -----   -------------                                                   
                                                                                                               
September 30, 1994...      968,856     $(853)    $  7,100                                                      
  10% stock                                                                                                    
    dividend.........       96,884        (2)          (2)                                                     
  Net income.........           --        --        2,537                                                      
  Translation                                                                                                  
    adjustment.......           --        --            3                                                      
  Reductions in                                                                                                
    subscription                                                                                               
    receivable.......           --        --            5                                                      
                        ----------     -----     --------                                                      
September 30, 1995...    1,065,740      (855)       9,643                                                      
  Stock options                                                                                                
    exercised........           --        --           97                                                      
  Cash dividend......           --        --          (87)                                                     
  Net income.........           --        --        2,756                                                      
  Translation                                                                                                  
    adjustment.......           --        --          (10)                                                     
                        ----------     -----     --------                                                      
September 30, 1996...    1,065,740      (855)      12,399                                                      
  Sale of stock......           --        --        3,000                                                      
  Retirement of                                                                                                
    treasury stock...   (1,065,740)      855           --                                                      
  Cash dividend......           --        --          (90)                                                     
  Net income.........           --        --        6,896                                                      
  Translation                                                                                                  
    adjustment.......           --        --         (993)                                                     
                        ----------     -----     --------                                                      
September 30, 1997...           --        --       21,212                                                      
  Cash dividend......           --        --         (219)                                                     
  Net income.........           --        --        5,893                                                      
  Translation                                                                                                  
    adjustment.......           --        --          (84)                                                     
                        ----------     -----     --------                                                      
March 31, 1998                                                                                                 
  (Unaudited)........           --     $  --     $ 26,802                                                      
                        ==========     =====     ========                                                      

See accompanying notes to consolidated financial statements.

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GENCOR INDUSTRIES, INC. 

CONSOLIDATED STATEMENTS OF CASH FLOWS 
(All Dollar Amounts in Thousands) 

                                                        [Enlarge/Download Table]

                                                                                      SIX MONTHS ENDED  
                                                       YEARS ENDED SEPTEMBER 30,         MARCH 31,      
                                                      ----------------------------   ------------------ 
                                                       1995      1996       1997       1997      1998   
                                                      -------   -------   --------   --------   ------- 
                                                                                        (UNAUDITED)     
                                                                                                        
Cash Flows From Operations:                                                                             
  Net income......................................... $ 2,537   $ 2,756   $  6,896   $  2,143   $ 5,893 
  Adjustments to reconcile net income to cash                                                           
    provided by (used for) operations:                                                                  
    Extraordinary gain...............................    (499)       --         --         --        -- 
    Imputed interest.................................      --        --      1,070         --        -- 
    Depreciation and amortization....................     757       695      4,445      2,659     3,190 
    Loss on equipment disposal.......................      --        --         --         --       531 
    Postretirement benefits..........................      --        --        432         --       197 
    Change in assets and liabilities -- net of                                                          
      businesses acquired:                                                                              
      (Increase) decrease in accounts receivable.....  (1,650)     (362)   (12,609)   (10,663)    7,392 
      (Increase) decrease in inventories.............  (2,604)   (5,913)    10,208     (1,073)   (4,400)
      (Increase) decrease in prepaid expenses........    (131)      767     (1,619)     1,117      (109)
      (Increase) decrease in other assets............      --        --     (3,253)       797    (1,523)
      (Increase) decrease in deferred income taxes...    (133)     (182)     4,316       (497)      315 
      Increase (decrease) in accounts payable and                                                       
         customer deposits...........................   2,401       (41)    (7,993)     6,684    (1,039)
      Increase (decrease) in income tax                                                                 
         liabilities.................................    (879)     (455)       416         58     1,036 
      Increase (decrease) in accrued expenses........  (1,719)     (157)     3,379      3,083    (1,555)
                                                      -------   -------   --------   --------   ------- 
         Total adjustments...........................  (4,457)   (5,648)    (1,208)     2,165     4,035 
                                                      -------   -------   --------   --------   ------- 
         Cash provided by (used for) operations......  (1,920)   (2,892)     5,688      4,308     9,928 
Cash Flow From Investing Activities:                                                                    
  Cash acquired from CPM.............................      --     1,219         --         --        -- 
  Cash acquired from Gumaco..........................      --        --      3,973         --        -- 
  Cash paid for business acquired....................      --        --     (2,000)        --   (11,634)
  Capital expenditures -- net........................    (454)   (1,397)    (1,580)    (1,259)   (2,230)
  Proceeds from sale of property and equipment.......      --       434         --         --        -- 
  Insurance proceeds from property theft.............      --       400         --         --        -- 
  Acquisition costs..................................      --      (312)    (1,977)    (1,993)   (2,849)
  Other -- net.......................................      19      (160)        --         --        -- 
                                                      -------   -------   --------   --------   ------- 
         Cash provided by (used for) investing                                                          
           activities                                    (435)      184     (1,584)    (3,252)  (16,713)
Cash Flows From Financing Activities:                                                                   
  Net (reduction) increase in notes payable..........     599     2,292       (331)   (12,256)    6,233 
  Payment to Ingersoll-Rand..........................      --        --    (60,869)   (61,011)       -- 
  Repayment of existing debt.........................  (4,210)   (1,375)   (14,978)        --        -- 
  Borrowings.........................................   2,484     2,867     80,719     79,672       (82)
  Cash dividends paid................................      --       (87)       (90)       (89)     (219)
  Issuance of common stock...........................      --        --      1,675      1,611        -- 
  Other -- net.......................................     (27)       97     (1,247)    (1,247)      242 
                                                      -------   -------   --------   --------   ------- 
         Cash provided by (used for) financing                                                          
           activities................................  (1,154)    3,794      4,879      6,680     6,174 
Effect of Exchange Rate Changes on Cash..............      --        --       (197)       (86)       68 
                                                      -------   -------   --------   --------   ------- 
Net Increase (Decrease) in Cash......................  (3,509)    1,086      8,786      7,650      (543)
CASH AND CASH EQUIVALENTS AT:                                                                           
  Beginning of period................................   3,924       415      1,501      1,501    10,287 
                                                      -------   -------   --------   --------   ------- 
  End of period...................................... $   415   $ 1,501   $ 10,287   $  9,151   $ 9,744 
                                                      =======   =======   ========   ========   ======= 
SUPPLEMENTAL CASH FLOW INFORMATION:                                                                     
  Cash paid during the year for:                                                                        
    Interest......................................... $ 1,288   $ 1,381   $  5,175   $  2,100   $ 4,491 
                                                      =======   =======   ========   ========   ======= 
    Income taxes..................................... $ 2,179   $ 1,571   $  2,220   $    769   $ 1,975 
                                                      =======   =======   ========   ========   ======= 

See accompanying notes to consolidated financial statements.

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(SIX MONTHS ENDED MARCH 31, 1998 AND 1997 -- UNAUDITED) 
(All Dollar Amounts in Thousands, Except Per Share Amounts) 

1. SIGNIFICANT ACCOUNTING POLICIES                                              

 General -- Gencor Industries, Inc. and its subsidiaries (the "Company")
designs and manufactures process equipment primarily utilized in the asphalt,   
agricultural and food industries.                                               

   On April 9, 1998, the Board of Directors authorized a 2-for-1 stock split
to shareholders of record as of April 22, 1998, effective May 4, 1998. As a     
result of the split, 3,272,870 additional common shares and 883,094 additional  
Class B shares were issued and paid-in-capital was reduced by $415. On May 7,   
1997, the Board of Directors authorized a 2-for-1 stock split to shareholders of
record as of May 19, 1997, effective May 30, 1997. As a result of the split,    
1,636,435 additional common shares and 441,532 additional Class B shares were   
issued, and paid-in capital was reduced by $208. Shareholders' equity has been  
restated for all periods presented to give retroactive recognition to the stock 
splits. In addition, for all periods presented, all references in the           
consolidated financial statements and footnotes thereto to number of shares, per
share amounts, weighted average shares outstanding, as well as stock options and
related price information have been restated to give retroactive effect to the  
splits.                                                                         

All material intercompany accounts and transactions are eliminated in 
consolidation. In conformity with generally accepted accounting principles,     
management has used estimates in preparing its consolidated financial           
statements. Actual results could differ from these estimates.                   

    Net Income per share -- The Company adopted SFAS 128, "Earnings per share"
as of October 1, 1997. The prior year earnings per share amounts have been      
restated to conform with this standard. Under SFAS 128, basic net income per    
share is computed based on the weighted average shares outstanding during the   
period. Diluted net income per share includes the dilutive effect of potential  
common stock using the treasury stock method.                                   

     The following reconciles basic income per share to diluted income per share
for the years ended September 30, 1995, 1996 and 1997:                          

                                                        [Enlarge/Download Table]

                                       1995                                    1996                             1997           
                      --------------------------------------  --------------------------------------  -------------------------
                      INCOME BEFORE                           INCOME BEFORE                           INCOME BEFORE            
                      EXTRAORDINARY                PER SHARE  EXTRAORDINARY                PER SHARE  EXTRAORDINARY            
                           GAIN          SHARES     AMOUNT        GAIN         SHARES       AMOUNT        GAIN         SHARES  
                      -------------   ---------     -------    ------------   ---------     --------  -------------   ---------
                                                                                                                               
Basic EPS............    $2,039       6,930,900     $0.29        $2,756       7,120,636     $0.39        $6,896       8,094,268
Effect of Dilutive                                                                                                             
  Securities:                                                                                                                  
  Options............                   115,656                                  42,446                               1,232,058
                                      ---------                               ---------                               ---------
Diluted EPS..........    $2,039       7,046,566     $0.29        $2,756       7,163,082     $0.38        $6,896       9,326,326
                                      =========                               =========                               =========


                         1997                                                                                                  
                      ----------                                                                                               
                       PER SHARE                                                                                               
                         AMOUNT                                                                                                
                      ----------                                                                                               
                                                                                                                               
Basic EPS............   $0.85                                                                                                  
Effect of Dilutive                                                                                                             
  Securities:                                                                                                                  
  Options............                                                                                                          
Diluted EPS..........   $0.74                                                                                                  

Cash Equivalents -- Cash equivalents, which consist of short-term     
certificates of deposit and deposits in money market accounts with original     
maturities of three months or less, are carried at cost, which approximates     
their market value.                                                             

Fair Value of Financial Instruments -- The carrying amounts of cash,  
accounts receivable, accounts payable, and notes payable to banks approximate   
fair value because of the short-term nature of these items. The carrying amount 
of substantially all of the Company's long-term debt approximates fair value due
to the variable nature of the interest rates on the debt.                       

 Foreign Currency Translation -- Assets and liabilities of the Company's
foreign subsidiaries are translated into U.S. dollars at the applicable rate of 
exchange in effect at the end of the fiscal year. Revenue and expense accounts  
are translated at the average rate of exchange during the period and equity     
accounts are translated at the rate in effect when the transactions giving rise 
to the                                                                          
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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

balances took place. Gains and losses resulting from translation are accumulated
in a separate component of shareholders' equity. Gains and losses resulting from
foreign currency transactions are included in income.                           

Foreign Exchange Risk Management -- The Company enters into foreign   
currency forward exchange contracts with major financial institutions to hedge  
certain loans and trade accounts receivables against adverse fluctuations in    
exchange rates. At September 30, 1997, the Company had forward exchange         
contracts totaling $5,801. These contracts mature at various dates in the first 
quarter of fiscal 1998. The Company expects to continue to utilize foreign      
currency exchange contracts to manage its exposure, although there can be no    
assurance the Company's efforts in this regard will be successful.              

   Inventories -- Inventories are stated at the lower of cost or market. The
Company uses the last-in, first-out (LIFO) method of determining cost for       
substantially all inventories in the United States. All other inventories are   
accounted for using the first-in, first-out (FIFO) method.                      

Property and Equipment -- Property and equipment are stated at cost.  
Depreciation of property and equipment, including depreciation on assets        
acquired under capital leases, is computed using straight-line and accelerated  
methods over the estimated useful lives of the related assets. Maintenance and  
repairs are expensed as incurred. Expenditures which significantly increase     
asset values or extend useful lives are capitalized.                            

Assets held for resale are stated at lower of depreciated cost or net 
realizable value and are no longer depreciated.                                 

    Goodwill -- Goodwill, the excess of the purchase price over the fair value
of net assets of businesses acquired, is being amortized over 25 years using the
straight-line method. Management evaluates the recoverability of intangible     
assets periodically based on current operating trends.                          

Revenues -- Revenues from contracts for the design and manufacture of 
certain custom equipment are recognized under the percentage-of-completion      
method. Revenue from all other sales are recorded as the products are shipped.  

   The percentage-of-completion method of accounting for long term contracts
recognizes revenue in proportion to actual labor costs incurred as compared with
total estimated labor costs expected to be incurred during the entire contract. 
All selling, general and administrative expenses are charged to income as       
incurred. Provision is made for any anticipated contract losses in the period   
that the loss becomes evident.                                                  

   The estimated costs of product warranties are charged to production costs
as revenue is recognized.                                                       

    Income Taxes -- The Company recognizes deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in   
the financial statements or tax returns using current tax rates. The Company and
its domestic subsidiaries file a consolidated federal income tax return. The    
foreign subsidiaries provide income taxes based on the tax regulations of the   
countries in which they operate. Undistributed earnings of the Company's foreign
subsidiaries are indefinitely reinvested. No deferred taxes have been provided  
on these earnings.                                                              

 Stock Options -- The Company discloses stock-based compensation at fair
value.                                                                          

Reclassification -- Certain prior year amounts in the consolidated    
financial statements have been reclassified to conform with the current year    
presentation.                                                                   

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

Interim Information -- The accompanying unaudited interim consolidated
financial statements have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, certain information and    
footnote disclosures normally included in financial statements prepared in      
accordance with generally accepted accounting principles have been omitted      
pursuant to such rules and regulations. The accompanying unaudited interim      
consolidated financial statements and related notes should be read in           
conjunction with the financial statements and related notes included in the     
Company's 1997 Annual Report on Form 10-K. In the opinion of management, all    
material adjustments, consisting of normal recurring adjustments, considered    
necessary for a fair presentation have been included in the accompanying        
unaudited interim consolidated financial statements. Operating results for the  
six months ended March 31, 1998, are not necessarily indicative of the results  
that may be expected for the year ending September 30, 1998.                    

2. ACQUISITIONS                                                                 

     Effective July 1, 1997, the Company purchased the stock of Gumaco Industria
E Comercio Limitada of Sao Paulo, Brazil ("Gumaco") and other South American    
companies for $12,730, net of imputed interest. Gumaco and the other companies  
are engaged in the design and manufacture of process equipment. The acquisitions
were financed under a new $12 million credit facility (see Note 9).             

    The transactions were accounted for as a purchase and the assets have been
included in the accompanying balance sheet at their fair value. Total assets    
acquired approximated $32,780, liabilities assumed approximated $23,288, and the
excess of the amount paid over the fair value of the assets acquired was        
approximately $3,238. Further adjustments may be made to the accompanying       
balance sheet as a result of finalization of acquisition costs and fair value   
adjustments.                                                                    

     The results of operations of these acquired companies have been included in
the results of the Company from July 1, 1997. Assuming these acquisitions and   
the acquisition of CPM, referred to below, had occurred on October 1, 1995 and  
1996, the Company's unaudited proforma net sales, net income, and diluted       
earnings per share would have been approximately $183,901, $3,869, and $.54 and 
$210,381, $7,881, and $.85, respectively, for the years ended September 30, 1996
and 1997.                                                                       

  Effective September 30, 1996, the Company purchased the stock of Process
Equipment Division of Ingersoll-Rand Company ("CPM") for $60,869. CPM, a        
multi-national entity, is also engaged in the design and manufacture of process 
equipment. The acquisition was financed under a new $95 million credit facility 
(see Note 9).                                                                   

3. INVENTORIES                                                                  

Inventories at September 30, 1996 and 1997 consist of the following:  

                                                                [Download Table]

                                                               1996      1997  
                                                              -------   -------
                                                                               
Raw materials...............................................  $14,390   $12,109
Work in process.............................................   10,340     8,915
Finished goods..............................................   16,807    25,151
                                                              -------   -------
                                                              $41,537   $46,175
                                                              =======   =======

   At September 30, 1996, accumulated costs of approximately $4,102 on major
contracts, net of progress payments of approximately $1,068, and estimated      
earnings of approximately $2,437 amount to approximately $5,471, and are        
included in work-in-process inventory.                                          

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

   At September 30, 1997, accumulated costs of approximately $3,855 on major
contracts, net of progress payments of approximately $2,772, and estimated      
earnings of approximately $4,075 amount to approximately $5,158 and are included
in work-in-process inventory.                                                   

At September 30, 1996 and 1997, cost is determined by the last-in,    
first-out (LIFO) method for 69% and 60%, respectively, of total inventories,    
exclusive of progress payments, and the first-in, first-out (FIFO) method for   
all other inventories. At September 30, 1996 and 1997, the estimated current    
cost of inventories exceeded their LIFO basis by approximately $2,468 and       
$2,575, respectively.                                                           

4. PROPERTY AND EQUIPMENT                                                       

Property and equipment at September 30, 1996 and 1997, consist of the 
following:                                                                      

                                                                [Download Table]

                                                               1996      1997   
                                                              -------   ------- 
                                                                                
Land and improvements.......................................  $ 6,072   $ 6,251 
Building and improvements...................................   17,825    14,511 
Machinery and equipment.....................................   17,969    23,804 
Tools, jigs and dies........................................      119       120 
Furniture and equipment.....................................    2,986     3,135 
Automobiles.................................................      362       586 
Construction in progress....................................      369       488 
                                                              -------   ------- 
                                                               45,702    48,895 
Less: Accumulated depreciation..............................   (8,907)  (10,481)
                                                              -------   ------- 
                                                              $36,795   $38,414 
                                                              =======   ======= 

 Substantially all of the Company's property and equipment is pledged as
collateral for the Company's debt.                                              

     Depreciation expense for the years ended September 30, 1995, 1996, and 1997
was approximately $675, $641 and $3,641, respectively. There was no interest    
capitalized during 1995, 1996, or 1997.                                         

5. OTHER ASSETS                                                                 

Other assets at September 30, 1996 and 1997 consist of the following: 

                                                                [Download Table]

                                                               1996     1997  
                                                              ------   -------
                                                                              
Deposits....................................................  $   --   $ 3,498
Deferred acquisition costs, net.............................      --     1,976
Deferred loan costs, net....................................     147     1,836
Other.......................................................   3,199     5,916
                                                              ------   -------
                                                              $3,346   $13,226
                                                              ======   =======

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

6. ACCRUED EXPENSES                                                             

   Accrued expenses consist of the following at September 30, 1996 and 1997:

                                                                [Download Table]

                                                               1996     1997  
                                                              ------   -------
                                                                              
Payroll and related accruals................................  $5,004   $ 6,705
Warranty and related accruals...............................   2,049     1,751
Acquisition costs...........................................     662     2,723
Professional fees...........................................     130     1,117
Interest....................................................     274       904
Sales and property taxes....................................     603       540
Other.......................................................     108     2,340
                                                              ------   -------
          Total.............................................  $8,830   $16,080
                                                              ======   =======

7.  INCOME TAXES                                                                

The provision for income taxes consists of:                           

                                                                [Download Table]

                                                             1995     1996     1997 
                                                            ------   ------   ------
                                                                                    
Current:                                                                            
  Federal.................................................. $1,301   $  872   $1,697
  State....................................................    170      (33)     210
  Foreign..................................................     --       --    1,400
                                                            ------   ------   ------
          Total currently payable..........................  1,471      839    3,307
Deferred:                                                                           
  Federal..................................................   (341)     370      731
  State....................................................    (44)     (14)      87
  Foreign..................................................     --       --       --
                                                            ------   ------   ------
          Total deferred tax expense (benefit).............   (385)     356      818
                                                            ------   ------   ------
  Provision for income taxes............................... $1,086   $1,195   $4,125
                                                            ======   ======   ======

   The difference between the U.S. federal income tax rate and the Company's
effective income tax rate is as follows:                                        

                                                                [Download Table]

                                                             1995   1996   1997 
                                                             ----   ----   ---- 
                                                                                
Federal income tax rate..................................... 34.0%  34.0%  34.0%
State income taxes, net of federal income tax benefit.......  2.9   (0.5)   1.3 
Internal revenue service examination and other prior period                     
  adjustments and refunds...................................   --   (2.0)    -- 
Difference arising from transactions with, and profit and                       
  loss of, foreign subsidiary not deductible or includable                      
  for U.S. federal income tax purposes...................... (1.3)  (2.3)   0.2 
Other-net................................................... (0.9)   1.0    1.9 
                                                             ----   ----   ---- 
                                                             34.7%  30.2%  37.4%
                                                             ====   ====   ==== 

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

   Deferred taxes and balance sheet classifications are recorded as follows:

                                                                [Download Table]

                                                               1996      1997   
                                                              -------   ------- 
                                                                                
Deferred tax assets (liabilities):                                              
  Differences in basis of acquired assets...................  $(1,109)  $    -- 
  Depreciation and amortization.............................     (329)     (738)
  Inventory cost adjustments................................     (720)   (1,582)
                                                              -------   ------- 
Gross deferred tax liability................................   (2,158)   (2,320)
  Allowance for doubtful accounts...........................      480       700 
  Accrued expenses..........................................      852     1,301 
                                                              -------   ------- 
Gross deferred tax asset....................................    1,332     2,001 
                                                              -------   ------- 
                                                              $  (826)  $  (319)
                                                              =======   ======= 
Balance sheet classification:                                                   
  Allowance for doubtful accounts...........................  $   480   $   700 
  Inventory.................................................     (720)   (1,582)
  Accrued expenses..........................................      852     1,301 
                                                              -------   ------- 
Current deferred tax assets.................................  $   612   $   419 
                                                              =======   ======= 
  Difference on basis of acquired assets....................  $(1,109)  $    -- 
  Depreciation and amortization.............................     (329)     (738)
                                                              -------   ------- 
Noncurrent deferred tax liabilities.........................  $(1,438)  $  (738)
                                                              =======   ======= 

8. RETIREMENT BENEFITS                                                          

Retirement Benefits Other than Pensions -- The Company sponsors a     
postretirement plan (the "Plan") that covers certain domestic employees. The    
Plan provides for healthcare benefits and, in some instances, life insurance    
benefits and is contributory with amounts adjusted annually. When full-time     
employees retire from CPM between age 55 and age 65 with 15 years of service,   
most will be eligible to receive, at a cost to the retiree, certain healthcare  
benefits identical to those available to active employees. After attaining age  
65, an eligible retiree's healthcare benefit coverage will become coordinated   
with Medicare.                                                                  

  At September 30, 1996 and 1997, respectively, the actuarial and recorded
liabilities for these post-retirement benefits, none of which have been funded, 
are as follows:                                                                 

                                                                [Download Table]

                                                               1996     1997 
                                                              ------   ------
                                                                             
Accumulated post-retirement benefit obligation:                              
  Retirees..................................................  $   --   $   --
  Active employees..........................................   1,526    1,794
                                                              ------   ------
Unfunded accumulated post-retirement benefit obligation.....   1,526    1,794
Unrecognized net gain.......................................      --      164
Unrecognized prior service benefits.........................      --       --
                                                              ------   ------
Accrued post-retirement benefit cost........................  $1,526   $1,958
                                                              ======   ======

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

   The components of net periodic post-retirement benefits cost for the year
ended September 30, 1997 are as follows:                                        

                                                                [Download Table]
                                                                  
Service costs...............................................  $229
Interest costs..............................................   158
Net amortization and deferred amounts.......................    44
                                                              ----
          Total.............................................  $431
                                                              ====

The discount rate used in determining the accumulated postretirement  
benefit obligation was 7.25% at September 30, 1997. The assumed healthcare cost 
trend rates used in measuring the accumulated post-retirement benefit obligation
was 8.55% in 1997, declining each year to an ultimate rate by 2003 of 4.75% in  
1997. An increase of one percentage point in the assumed healthcare cost trend  
rates for each future year would have increased the aggregate of the service and
interest cost components of the 1997 net periodic postretirement benefit cost by
$52 and would have increased the accumulated postretirement benefit obligation  
as of September 30, 1997 by $93.                                                

401(k) Plan -- The Company has voluntary 401(k) employee benefit plans
("401(k) Plans") which covers all eligible employees. The Company makes         
discretionary matching contributions subject to a maximum level, in accordance  
with the terms of the respective 401(k) Plans. The Company charged approximately
$113, $127, and $390 to operating expense under the provisions of the 401(k)    
Plan in the years ended September 30, 1995, 1996, and 1997, respectively.       

Pension Plan -- The Company provides pension benefits covering certain
domestic employees. Benefits under the plan are based upon an employee's        
compensation and years of service. It is the Company's policy to make           
contributions to the plan sufficient to meet the minimum funding requirements of
applicable laws and regulations plus such additional amounts, if any, as the    
Company's actuarial consultants advise to be appropriate.                       

The following table sets forth the plan's funded status and amounts   
recognized in the Company's balance sheet at September 30, 1996 and 1997:       

                                                                [Download Table]

                                                              1996    1997  
                                                              -----   ----- 
                                                                            
Actuarial present value of accumulated benefit obligations:                 
  Vested....................................................  $  43   $ 201 
  Nonvested.................................................     15      60 
                                                              -----   ----- 
Accumulated benefit obligation..............................  $  58   $ 261 
                                                              -----   ----- 
Projected benefit obligation................................  $  75   $ 329 
Plan assets at fair value...................................     --      -- 
                                                              -----   ----- 
Projected benefit obligation in excess of plan assets.......     75     329 
Unrecognized prior service cost.............................    (75)    (70)
Adjustment required to recognize minimum liability..........     --       2 
                                                              -----   ----- 
Accrued pension costs.......................................  $  --   $ 261 
                                                              =====   ===== 

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

Net periodic pension cost includes the following components:          

                                                                [Download Table]

                                                                1996    1997
                                                                ----    ----
                                                                            
Service cost -- benefits earned during the year.............    $ --    $247
Interest cost on projected benefit obligation...............      --       6
Actual return on plan assets................................      --      --
Net amortization and deferral...............................      --       5
                                                                ----    ----
                                                                $ --    $258
                                                                ====    ====

To determine the actuarial present value of the projected benefit     
obligation, the following rates were used:                                      

                                                                [Download Table]

                                                                1996    1997
                                                                ----    ----
                                                                            
Discount rate...............................................    N/A     7.5%
Rate of increase in future compensation levels..............    N/A     5.0%

9. LONG-TERM DEBT                                                               

  Long-term debt at September 30, 1996 and 1997 consists of the following:

                                                                [Download Table]

                                                               1996       1997   
                                                               ----       ----   
                                                                                 
Line of credit facility..................................... $  9,072   $ 19,860 
Senior secured credit agreement.............................       --     57,750 
Term loan payable to bank...................................    3,365         -- 
Industrial revenue bonds payable to bank....................    2,969      2,677 
Acquisition payable (see below).............................   60,868     11,000 
                                                             --------   -------- 
                                                               76,274     91,287 
Less current maturities.....................................   (2,528)    (4,798)
                                                             --------   -------- 
                                                             $ 73,746   $ 86,489 
                                                             ========   ======== 

The industrial revenue bonds are payable in monthly installments of   
principal and interest (6.851% at September 30, 1997) at a varying percentage   
(82% at September 30, 1997) of the bank's prime rate through December 2004.     
Under the terms of the industrial revenue bond indenture, the Company is        
required to maintain compliance with certain financial and other covenants. The 
Company was in compliance with the covenants at September 30, 1997.             

In conjunction with the acquisition of CPM, the Company entered into a
Senior Secured Credit Agreement with a bank whereby the Company retired its     
existing line of credit facilities, including its foreign line of credit and    
term loan payable to another bank. Under the terms of the agreement, the Company
borrowed $60 million under two term loans and, in connection therewith, was     
granted a $35 million revolving credit facility to facilitate the acquisition.  
Interest rates on these loans vary, at the Company's option, based upon a factor
applied to the prime rate or LIBOR. The weighted average interest rate for these
borrowings was 8.6% for fiscal 1997. The revolving credit facility and $30      
million of the term notes are payable through December 2001 with the remaining  
term note payable through December 2003. Under the terms of the senior secured  
credit agreement, the Company is required to maintain compliance with certain   
financial and other covenants. The Company was in compliance with the covenants 
at September 30, 1997.                                                          

 The Company has entered into both an interest rate swap and an interest
rate collar with a major financial institution to reduce exposure to interest   
rate fluctuations. Under the rate swap, the Company agrees with other parties to
exchange, at specified intervals, the difference between fixed-rate and         
floating-rate interest amounts calculated by reference to an agreed notional    
principal amount. Under the interest rate collar, the Company has effectively   
limited its interest rate to a maximum of 7.0%. The notional amounts of each of 
the interest rate swap and the interest rate collar                             

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

outstanding at September 30, 1997 are $40,000 and expire in February 1999 and   
2000, respectively. At September 30, 1997, the Company owed $27 and $26 under   
the terms of the interest rate swap and interest rate collar, respectively.     

    In conjunction with the acquisition of Gumaco and the other South American
companies, the Company amended its existing Senior Secured Credit Agreement to  
provide an additional $12 million term loan. Interest on this loan is based on a
factor applied to the prime rate or LIBOR. The loan is payable in equal         
quarterly installments through December 2004.                                   

     Substantially all of the Company's assets are pledged as security under the
various credit agreements.                                                      

     Aggregate maturities of long-term debt under the existing agreement and the
industrial revenue bonds for each of the five years in the period ending        
September 30, 2002 are as follows:                                              

                                                                [Download Table]
                                                                     
1998........................................................  $ 4,798
1999........................................................    7,569
2000........................................................    9,841
2001........................................................   12,614
2002........................................................   32,624
Thereafter..................................................   23,841
                                                              -------
                                                              $91,287
                                                              =======

10. COMMITMENTS AND CONTINGENCIES                                               

    The Company leases certain equipment under noncancelable operating leases.
Future minimum rental commitments under noncancelable leases in effect at       
September 30, 1997 are as follows:                                              

                                                                [Download Table]
                                                                     
1998........................................................  $   792
1999........................................................      432
2000........................................................      333
2001........................................................       42
2002........................................................       20
                                                              -------
                                                              $ 1,619
                                                              =======

     Total rental expense for the years ended September 30, 1995, 1996, and 1997
was $415, $374 and $658, respectively.                                          

The Company is involved in various litigation matters arising in the  
ordinary course of business. Management has reviewed all claims and lawsuits    
and, upon the advice of counsel, has made provision for estimable losses and    
expenses of litigation relating to claims against the Company.                  

11. SHAREHOLDERS' EQUITY                                                        

    On May 7, 1997, the Board of Directors authorized a 2-for-1 stock split to
shareholders of record as of May 19, 1997, effective May 30, 1997. As a result  
of the split, 1,636,435 additional common shares and 441,532 additional Class B 
shares were issued, and paid-in capital was reduced by $208. Shareholders'      
equity has been restated for all period presented to give retroactive           
recognition to the stock split. In addition, for all periods presented, all     
references in the consolidated financial statements and footnotes thereto to    
number of shares, per share amounts, weighted average shares outstanding, as    
well as stock option and related price information have been restated to give   
retroactive effect to the split.                                                

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

  On November 21, 1996 the Company declared a cash dividend of $0.0125 per
share payable on January 4, 1997, to shareholders of record as of December 18,  
1996.                                                                           

  Under the Company's amended Certificate of Incorporation, certain of the
rights of the holders of the Company's Common Stock are modified during any     
period when shares of Class B Stock are outstanding. During such periods,       
holders of Common Stock will have the right to elect approximately 25% of the   
Company's Board of Directors, and conversely, Class B Stock will be entitled to 
elect approximately 75%. During any period when Common Stock and Class B Stock  
are outstanding, certain matters submitted to a vote of shareholders will also  
require approval of the holders of Common Stock and Class B Stock, each voting  
separately as a class.                                                          

 Under the terms of the Senior Secured Credit Agreement, as amended, the
Company may declare and pay cash dividends up to $250,000 annually.             

12. STOCK OPTIONS                                                               

     The Company maintains two stock option plans which provide for the issuance
of nonqualified or incentive stock options to certain directors, officers and   
key employees.                                                                  

 The 1992 Stock Option Plan (the "1992 Plan") authorizes the granting of
options to purchase up to 400,000 shares of the Company's Common Stock, 400,000 
shares of the Company's Class B Stock and fifteen percent (15%) of the          
authorized Common Stock of any Company subsidiary. Shares are no longer         
available for grant under the 1992 Plan since all options authorized under the  
Plan have been granted.                                                         

   The 1997 Stock Option Plan (the "1997 Plan") provides for the issuance of
incentive stock options and nonqualified stock options to purchase up to        
1,200,000 shares of the Company's Common Stock, 1,200,000 shares of the         
Company's Class B Stock and up to fifteen percent (15%) of the authorized Common
Stock of any subsidiary.                                                        

Options become exercisable in a manner and on such dates and times as 
determined by a committee of the Board of Directors. Options expire not more    
than ten years from the date of grant.                                          

The following table summarizes option activity under the plans:       

                                                        [Enlarge/Download Table]

                                                                        EXERCISE PRICE
                                                             SHARES       PER SHARE   
                                                            ---------   --------------
                                                                                      
Outstanding at September 30, 1994..........................    60,000       $0.69     
  Granted..................................................   800,000        2.38     
  Exercised................................................        --          --     
                                                            ---------       -----     
Outstanding at September 30, 1995..........................   860,000        2.28     
  Granted.................................................. 1,186,000        1.94     
  Exercised................................................   (60,000)       0.69     
                                                            ---------       -----     
Outstanding at September 30, 1996.......................... 1,986,000        2.11     
  Granted..................................................        --          --     
  Exercised................................................        --          --     
                                                            ---------       -----     
Outstanding at September 30, 1997.......................... 1,986,000       $2.11     
                                                            =========       =====     

    No compensation cost has been recognized for stock options granted in 1995
or 1996. If the Company had recognized compensation cost based on the fair value
of the options granted at grant date amortized to expense, net income and       
earnings per share for the years ended September 30, 1995 and 1996 would have   
been reduced by, on a proforma basis, $841 and $2,017 and $.12 and $.28,        
respectively. The estimated weighted average fair value at grant date for the   
options granted                                                                 
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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

during 1995 and 1996 was $1.05 and $.92, respectively, per option. The fair     
value of options at date of grant was estimated using the Black-Scholes         
option-pricing model with the following assumptions:                            

                                                                [Download Table]
                                                                     
Expected dividend yield.....................................       0%
Expected stock price volatility.............................      55%
Risk-free interest rate.....................................    6.65%
Expected life of options....................................  3 years

13. QUARTERLY FINANCIAL DATA (UNAUDITED)                                        

   The following is a summary of the quarterly results of operations for the
years ended September 30, 1996 and 1997:                                        

                                                        [Enlarge/Download Table]

                                                        SEPTEMBER 30, 1996           
                                              -------------------------------------- 
                                               FIRST    SECOND     THIRD     FOURTH  
                                              -------   -------   -------   -------- 
                                                                                     
Net revenue.................................. $ 8,261   $17,433   $21,722   $ 12,792 
Cost and expenses............................   9,384    15,445    19,118     12,309 
Income tax expense...........................    (450)      738     1,025       (118)
                                              -------   -------   -------   -------- 
Net income................................... $  (673)  $ 1,250   $ 1,579   $    601 
                                              =======   =======   =======   ======== 
EPS:                                                                                 
  Basic...................................... $  (.09)  $   .18   $   .22   $    .08 
  Diluted.................................... $  (.09)  $   .17   $   .22   $    .08 

                                                                [Download Table]

                                                        SEPTEMBER 30, 1997          
                                               -------------------------------------
                                                FIRST    SECOND     THIRD    FOURTH 
                                               -------   -------   -------   -------
                                                                                    
Net revenue................................... $35,219   $48,717   $51,079   $60,298
Cost and expenses.............................  34,785    45,810    47,242    56,455
Income tax expense............................     152     1,046     1,501     1,426
                                               -------   -------   -------   -------
Net income.................................... $   282   $ 1,861   $ 2,336   $ 2,417
                                               =======   =======   =======   =======
EPS:                                                                                
  Basic....................................... $   .04   $   .22   $   .28   $   .29
  Diluted..................................... $   .03   $   .20   $   .24   $   .25

14. SEGMENT AND GEOGRAPHIC INFORMATION                                          

The Company operates in one industry segment consisting of the design,
manufacture, and marketing of products and services for process machinery       
equipment used for the production of highway construction materials and related 
equipment, and machinery for the production of pelleting, grinding, flaking,    
sugar processing, citrus juice, and filtration equipment.                       

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GENCOR INDUSTRIES, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

 Information about the Company's identifiable assets as of September 30,
1995, 1996, and 1997 and operations for the years ended September 30, 1995,     
1996, and 1997, in these geographic areas is as follows:                        

                                                                [Download Table]

                                                        1995      1996      1997  
                                                       -------  --------  --------
                                                                                  
Net sales to unaffiliated customers                                               
  United States....................................... $56,427  $ 57,396  $134,104
  Europe..............................................   2,517     2,812    39,128
  South America.......................................      --        --    15,337
  Other...............................................      --        --     6,744
                                                       -------  --------  --------
          Total consolidated.......................... $58,944  $ 60,208  $195,313
                                                       =======  ========  ========
Net sales or transfers between                                                    
  geographic areas                                                                
  United States....................................... $    --  $     --  $  5,944
  Europe..............................................     144       109     8,345
  South America                                             --        --        --
  Other...............................................      --        --         9
                                                       -------  --------  --------
          Total....................................... $   144  $    109  $ 14,298
                                                       =======  ========  ========
Operating profit:                                                                 
  United States....................................... $ 3,657  $  5,067  $ 13,667
  Europe..............................................     214       173     1,539
  South America.......................................      --        --     2,697
  Other...............................................      --        --       303
                                                       -------  --------  --------
          Total....................................... $ 3,871  $  5,240  $ 18,206
                                                       =======  ========  ========
Identifiable assets at year-end:                                                  
  United States....................................... $32,984  $ 98,170  $114,424
  Europe..............................................   1,835    13,915    19,734
  South America.......................................      --        --    27,139
  Other...............................................      --     6,976     1,855
                                                       -------  --------  --------
          Total....................................... $34,819  $119,061  $163,152
                                                       =======  ========  ========

The Company's intercompany policy is to transfer product at estimated 
market prices. Identifiable assets are those assets of the Company that are     
identifiable with the operations in each geographic area. Export sales for the  
years ended September 30, 1995, 1996, and 1997, were approximately $4,828,      
$1,846, and $19,994, respectively.                                              

15. SUBSEQUENT EVENT                                                            

 Effective October 1997, the Company acquired ACP Holdings PLC, a United
Kingdom based designer and manufacturer of heavy machinery for the road         
construction and quarrying industries for approximately $3.0 million in cash.   
The acquisition was financed using the Company's existing revolving line of     
credit. In addition, the Company may pay additional payments of the Company's   
common stock contingent upon achieving specified earning levels in future       
periods. These contingent payments, if any, will be reflected as acquisition    
costs when the contingencies are resolved.                                      

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======================================================                          

    NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN  
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH 
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN     
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. THIS   
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER  
TO BUY, ANY SECURITY OTHER THAN THE COMMON STOCK, NOR DOES IT CONSTITUTE AN     
OFFER OR SOLICITATION IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM IT IS 
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION, OR AN OFFER OR SOLICITATION BY     
ANYONE IN ANY JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION
IS NOT QUALIFIED TO DO SO. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE 
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE     
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.                                   

--------------------- 

TABLE OF CONTENTS 

                                                                [Download Table]

                                        PAGE
                                        ----
                                            
Prospectus Summary....................    3 
The Company...........................    3 
The Offering..........................    6 
Risk Factors..........................    8 
Use of Proceeds.......................   14 
Price Range of Common Stock and             
  Dividend Policy.....................   15 
Capitalization........................   16 
Selected Consolidated Financial             
  Data................................   17 
Management's Discussion and Analysis        
  of Financial Condition and Results        
  of Operations.......................   18 
Business..............................   22 
Management............................   33 
Principal and Selling Stockholders....   34 
Description of Capital Stock..........   35 
Underwriting..........................   39 
Incorporation of Certain Documents by       
  Reference...........................   41 
Legal Matters.........................   41 
Experts...............................   41 
Available Information.................   42 
Index to Consolidated Financial             
  Statements..........................  F-1 

======================================================                          
======================================================                          

3,600,000 SHARES
[LOGO]

GENCOR INDUSTRIES, INC. 

COMMON STOCK  
($.10 PAR VALUE)

SCHRODER & CO. INC. 

MCDONALD & COMPANY
SECURITIES, INC.

CREDIT LYONNAIS SECURITIES
(USA) INC.

BLUESTONE CAPITAL PARTNERS, L.P.

              , 1998

======================================================                          

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PART II 

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION                           

  The following is a list of the expenses to be incurred by the Company in
connection with the distribution of the Common Stock being registered hereby.   

                                                                [Download Table]
                                                                       
Securities and Exchange Commission registration fee.........  $ 29,693 
National Association of Securities Dealers, Inc. filing                
  fee.......................................................    10,566 
American Stock Exchange listing fee.........................    17,500 
Printing costs..............................................    80,000*
Accounting fees and expenses................................    80,000*
Legal fees and expenses (not including Blue Sky)............    80,000*
Miscellaneous...............................................    52,241*
                                                              -------- 
          Total.............................................  $350,000*
                                                              ======== 

---------------                                                                 

* Estimated                                                                     

ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS                             

Section 145 of the Delaware General Corporation Law of the State of   
Delaware sets forth the conditions and limitations governing the                
indemnifications of officers, directors and other parties.                      

   Article VI of the Company's By-Laws (the "By-Laws") provides in part that
the Company shall indemnify any director or officer who was or is a party or is 
threatened to be made a party to any threatened, pending or completed action,   
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was a director, officer, employee or    
agent of the Company, or is or was serving at the request of the Company, as a  
director, officer, employee or agent of certain other entities, against all     
expense, liability and loss reasonably incurred or suffered by such person in   
connection with such action, suit or proceeding, and under certain              
circumstances, whether or not the indemnified liability arises or arose from any
threatened, pending or completed action by or in the right of the Company.      
Responsibility for determinations with respect to such indemnifications shall be
made by the Board of Directors, by independent legal counsel or by the          
stockholders of the Company.                                                    

The Company has also entered into indemnity agreements (the "Indemnity
Agreements") with its Directors and officers that expend the protection provided
to the Company's directors and officers and are based upon sections of the      
General Corporation Law of the State of Delaware and Article VI, subsection 1(f)
of the Company's By-Laws which recognize the validity of additional indemnity   
rights granted by agreement. The substantive content of the Indemnity Agreements
and Article VI of the By-Laws is substantially the same except that, pursuant to
the Indemnity Agreements, indemnity is expressly provided for settlements in    
derivative actions, and partial indemnification is permitted in the event that  
the director or officer is not entitled to full indemnification.                

   Both the General Corporation Law of the State of Delaware and Article VI,
Section 2 of the Company's By-Laws provide that the Company may maintain        
insurance to cover loss incurred pursuant to liability to directors and officers
of the Company arising under the Securities Act of 1933, as amended (the        
"Securities Act").                                                              

    Reference is made to Section        of the Underwriting Agreement (Exhibit
1.1 to this Registration Statement) which provides for indemnification of the   
Registrant's officers, directors and controlling persons by the Underwriters    
against certain civil liabilities, including liabilities under the Securities   
Act.                                                                            

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ITEM 16.  EXHIBITS                                                              

See the Exhibit Index at page II-4 of this Registration Statement     

ITEM 17.  UNDERTAKINGS                                                          

The undersigned Registrant hereby undertakes that, for purpose of     
determining any liability under the Securities Act of 1933, each filing of the  
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities 
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit 
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be  
deemed to be anew registration statement relating to the securities offered     
therein, and the offering of such securities at that time shall be deemed to be 
the initial bona fide offering thereof.                                         

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the  
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant   
has been advised that in the opinion of the Securities and Exchange Commission  
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification 
against such abilities (other than the payment by the Registrant of expenses    
incurred or paid by a director, officer or controlling person of the Registrant 
in the successful defense of any action ,suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being 
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate     
jurisdiction the question whether such indemnification by it is against public  
policy as expressed in the Act and will be governed by the final adjudication of
such issues.                                                                    

The undersigned Registrant hereby undertakes that:                    

          (1) For purposes of determining any liability under the Securities Act
    of 1933, the information omitted from the form of prospectus filed as part
     of this registration statement in reliance upon Rule 430A and obtained in a
  form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
   (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.      

         (2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of    
  prospectus shall be deemed to be anew registration statement relating to
    the securities offered therein, and the offer in of such securities at the
   time shall be deemed to be the initial bona fide public offering thereof.

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SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the    
requirements for filing on Form S-3 and has duly caused this registration       
statement to be signed on its behalf by the undersigned, thereunto duly         
authorized, in the City of Orlando, State of Florida, on June 12, 1998.         

                           GENCOR INDUSTRIES, INC.

                              By:       /s/ E.J. ELLIOTT
                                            ------------------------------------
                                            E.J. Elliott
                                           President and
                                           Chairman of the Board

POWER OF ATTORNEY 

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being a 
Director and/or officer of Gencor Industries, Inc., a Delaware corporation,     
hereby constitutes and appoints E.J. Elliott and Russell R. Lee, III, and each  
of them, his true and lawful attorneys-in-fact and agents, with full power of   
substitution and resubstitution, for him and in his name, place and stead, in   
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all      
exhibits hereto, and other documents in connection therewith, with the          
Securities and Exchange Commission, granting unto said attorneys-in-fact and    
agents, and each of them, full power and authority to do and perform each and   
every act and thing requisite, necessary or advisable to be done, as fully to   
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their 
or his substitute or substitutes, may lawfully do or cause to be done by virtue 
hereof.                                                                         

Pursuant to the requirements of the Securities Act of 1933, this      
registration statement has been signed below on June 12, 1998, by the following 
persons in the capacities indicated:                                            

                                                        [Enlarge/Download Table]

                     SIGNATURES                                           TITLE                   
                     ----------                                           -----                   
                                                                                                  

                  /s/ E.J. ELLIOTT                     President, Chairman of the Board (Principal
-----------------------------------------------------    Executive Officer)                       
                    E.J. Elliott                                                                  

               /s/ RUSSELL R. LEE, III                 Treasurer (Principal Financial and         
-----------------------------------------------------    Accounting Officer)                      
                 Russell R. Lee, III                                                              

                 /s/ JOHN E. ELLIOTT                   Executive Vice President, Director         
-----------------------------------------------------                                             
                   John E. Elliott                                                                

              /s/ CONSTANTINE L. CORPAS                Director                                   
-----------------------------------------------------                                             
                Constantine L. Corpas                                                             

                 /s/ PETER KOURMOLIS                   Director                                   
-----------------------------------------------------                                             
                   Peter Kourmolis                                                                

                 /s/ GLENN B. DALBY                    Director                                   
-----------------------------------------------------                                             
                   Glenn B. Dalby                                                                 

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EXHIBIT INDEX 

                                                                [Download Table]

EXHIBIT                                                                   
NUMBER                          DESCRIPTION OF DOCUMENT                   
-------                         -----------------------                   
                                                                          
   1.1    --  Form of Underwriting Agreement*                             
   5.1    --  Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
              P.A.                                                        
  23.1    --  Consent of Deloitte & Touche LLP                            
  23.2    --  Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
              P.A. (contained in Exhibit 5.1)                             
    24    --  Power of Attorney (contained in Signature Page)             
    27    --  Financial Data Schedule (electronic filing only)            

---------------                                                                 

* To be added by amendment.                                                     

II-4

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-3’ Filing		Date		First		Last			Other Filings
		9/30/02		58					10-K
		4/1/00		33
		9/30/98		18		52			10-K405
		7/1/98		7		12
		6/27/98		33
Filed on:		6/12/98		1		65
		6/10/98		1		34
		6/9/98		4		24
		5/15/98		36
		5/6/98		16
		5/5/98		35
		5/4/98		50
		5/1/98		33					DEF 14A
		4/30/98		7		17
		4/22/98		50
		4/9/98		45		50
		3/31/98		4		52			10-Q
		1/20/98		42
		12/31/97		42					10-Q
		11/20/97		42					8-K
		11/11/97		45
		10/27/97		42					8-K
		10/1/97		5		50
		9/30/97		18		61			10-K405,  10-K405/A
		7/17/97		35					SC 13D/A
		7/1/97		5		52
		5/30/97		50		58
		5/19/97		50		58
		5/7/97		50		58
		3/31/97		5		50			10-Q
		1/4/97		59
		12/18/96		59
		12/10/96		10		15			8-K,  8-K/A
		11/21/96		59
		10/1/96		52
		9/30/96		18		61			10-K,  10-K/A
		6/25/96		33
		10/1/95		52
		9/30/95		18		61			10-K
		9/30/94		18		59
		9/30/93		18
									List all Filings