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PART I — FINANCIAL INFORMATION PART II — OTHER INFORMATION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934For the quarter ended March 31, 2000 Commission File Number 1-6747
The Gorman-Rupp Company
(Exact name of registrant as specified in its charter)
Ohio 34-0253990 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 305 Bowman Street, P. O. Box 1217, Mansfield, Ohio 44901 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (419) 755-1011
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Shares outstanding at March 31, 2000 —
common, without par value, 8,592,049Page 1 of 6 pages
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PART I — FINANCIAL INFORMATION
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands of dollars, except per share data)
Three Months Ended March 31 2000 1999 INCOME Net sales $ 48,289 $ 43,184 Other income 170 202 TOTAL INCOME 48,459 43,386 DEDUCTIONS FROM INCOME Cost of products sold 35,606 31,890 Selling, general and administrative expenses 6,149 6,818 TOTAL DEDUCTIONS 41,755 38,708 INCOME BEFORE INCOME TAXES 6,704 4,678 Income taxes 2,604 1,817 NET INCOME $ 4,100 $ 2,861 Basic And Diluted Earnings Per Share $ 0.48 $ 0.33 Dividends Paid Per Share $ 0.15 $ 0.15 Average Shares Outstanding 8,592,049 8,579,830 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
Three Months Ended March 31 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 4,100 $ 2,861 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,592 1,494 Changes in operating assets and liabilities 3,822 (582 ) CASH FLOWS FROM INVESTING ACTIVITIES: Capital additions, net (4,565 ) (1,306 ) Change in short-term investments (3,177 ) (441 ) Other 38 (177 ) CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (1,289 ) (1,288 ) Change in treasury shares 0 (148 ) (Repayments to) Borrowings from bank (1,499 ) 1,237 NET (DECREASE) INCREASE IN CASH — — AND CASH EQUIVALENTS (978 ) 1,650 CASH AND CASH EQUIVALENTS: Beginning of year 4,114 2,359 March 31 $ 3,136 $ 4,009 2
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
March 31 December 31 2000 1999 ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,136 $ 4,114 Short-term investments 6,403 3,225 Accounts receivable 31,713 27,898 Inventories 35,039 36,189 Other current assets and deferred income taxes 6,040 6,759 TOTAL CURRENT ASSETS 82,331 78,185 OTHER ASSETS 675 715 DEFERRED INCOME TAXES 4,367 4,366 PROPERTY, PLANT AND EQUIPMENT 112,352 107,962 Less allowances for depreciation 55,770 54,353 PROPERTY, PLANT AND EQUIPMENT — NET 56,582 53,609 TOTAL ASSETS $ 143,955 $ 136,875 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 7,728 $ 5,805 Payrolls and related liabilities 3,103 2,943 Accrued expenses 8,781 6,969 Income taxes 2,875 693 TOTAL CURRENT LIABILITIES 22,487 16,410 LONG TERM DEBT 1,607 3,107 POSTRETIREMENT BENEFITS 24,768 25,063 SHAREHOLDERS’ EQUITY Common shares, without par value at stated capital amount 5,123 5,123 Retained earnings 91,220 88,409 Accumulated other comprehensive income (1,250 ) (1,237 ) TOTAL SHAREHOLDERS’ EQUITY 95,093 92,295 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 143,955 $ 136,875 Common shares — authorized 14,000,000 14,000,000 * Common shares — outstanding 8,592,049 8,592,049 Common shares — treasury 273,127 273,127 * After deducting treasury shares 3
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)MARCH 31, 2000
NOTE A — BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2000 are not necessarily indicative of results that may be expected for the year ending December 31, 2000. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 1999.
NOTE B — INVENTORIES
The major components of inventories are as follows:
March 31 December 31 (Thousands of dollars) 2000 1999 Raw materials and in-process $ 23,276 $ 24,040 Finished parts 8,972 9,266 Finished products 2,791 2,883 $ 35,039 $ 36,189 NOTE C — COMPREHENSIVE INCOME
During the first quarter of 2000 and 1999, total comprehensive income amounted to $4,087,000 and $2,992,000.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONSFirst Quarter 2000 vs First Quarter 1999
Net sales were $48,289,000 in 2000, an increase of $5,105,000 or 11.8% from the $43,184,000 in 1999. Most of the increase was due to increased sales of pumps and fabricated turbine diffusers.Other income was $170,000 in 2000 compared to $202,000 in 1999. Most of this decrease was a result of decreased interest income.
Cost of products sold in 2000 was $35,606,000 compared to $31,890,000 in 1999. The increase was primarily due to the use of materials to support the increased sales. As a percentage of net sales, cost of products sold in 2000 was 73.7% compared to 73.8% in 1999.
Selling, general and administrative expenses decreased to $6,149,000 in 2000 from $6,818,000 in 1999 principally due to a decrease in advertising expenses associated with trade shows. More shows, including ConExpo, were held in 1999 than 2000. ConExpo is the largest trade show related to the construction industry in the U.S. and is held every three years. Lower expenses for supplies and travel contributed to the decrease.
Income before income taxes was $6,704,000 in 2000 compared to $4,678,000 in 1999, an increase of $2,026,000. Income tax expense increased from $1,817,000 in 1999 to $2,604,000 in 2000, primarily as a result of the increase in profit. The effective income tax rate was 38.8% in 2000 and 1999.
Net income in 2000 of $4,100,000 increased $1,239,000 from $2,861,000 in 1999. As a percent of net sales, net income was 8.5% in 2000 and 6.6% in 1999. Net income per share was $.48 in 2000, an increase of $.15 from $.33 in 1999.
FINANCIAL CONDITION
The Company continues to finance most of its capital expenditures and working capital requirements through internally generated funds and bank financing. The ratio of current assets to current liabilities was 3.7 to 1 at March 31, 2000 and 4.8 to 1 at December 31, 1999.The Company presently has adequate working capital, adequate borrowing capacity and a healthy liquidity position.
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PART II — OTHER INFORMATION
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits — 27 Financial Data Schedule (b) Reports filed on Form 8-K during the Quarter Ended March 31, 2000 — None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
The Gorman-Rupp Company (Registrant) Date April 20, 2000 By:/S/Kenneth E. Dudley
Kenneth E. Dudley
Treasurer & Principal
Financial Officer6
The Gorman-Rupp Company (GRC)
Filed: 20 Apr 00, 12:00am