SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2001 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
common, without par value, 8,565,553
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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 | ||||||||||||||
| 2001 | 2000 | |||||||||||||
| INCOME | ||||||||||||||
| Net sales | $ | 49,671 | $ | 49,024 | ||||||||||
| Other income | 262 | 170 | ||||||||||||
| TOTAL INCOME | 49,933 | 49,194 | ||||||||||||
| DEDUCTIONS FROM INCOME | ||||||||||||||
| Cost of products sold | 37,325 | 36,341 | ||||||||||||
| Selling, general and administrative expenses | 6,744 | 6,149 | ||||||||||||
| TOTAL DEDUCTIONS | 44,069 | 42,490 | ||||||||||||
| INCOME BEFORE INCOME TAXES | 5,864 | 6,704 | ||||||||||||
| Income taxes | 2,260 | 2,604 | ||||||||||||
| NET INCOME | $ | 3,604 | $ | 4,100 | ||||||||||
| Basic And Diluted | ||||||||||||||
| Earnings Per Share | $ | 0.42 | $ | 0.48 | ||||||||||
| Dividends Paid Per Share | $ | 0.16 | $ | 0.15 | ||||||||||
| Average Shares Outstanding | 8,565,553 | 8,592,049 | ||||||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
| Three Months Ended | |||||||||||||||
| March 31 | |||||||||||||||
| 2001 | 2000 | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
| Net income | $ | 3,604 | $ | 4,100 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Depreciation and amortization | 1,813 | 1,592 | |||||||||||||
| Changes in operating assets and liabilities | 588 | 3,822 | |||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,005 | 9,514 | |||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
| Capital additions, net | (1,191 | ) | (4,565 | ) | |||||||||||
| Change in short-term investments | 0 | (3,177 | ) | ||||||||||||
| Other | 0 | 38 | |||||||||||||
| NET CASH USED FOR INVESTING ACTIVITIES | (1,191 | ) | (7,704 | ) | |||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
| Cash dividends | (1,370 | ) | (1,289 | ) | |||||||||||
| Repayments to bank | (6 | ) | (1,499 | ) | |||||||||||
| NET CASH USED FOR FINANCING ACTIVITIES | (1,376 | ) | (2,788 | ) | |||||||||||
| NET INCREASE (DECREASE) IN CASH | — | — | |||||||||||||
| AND CASH EQUIVALENTS | 3,438 | (978 | ) | ||||||||||||
| CASH AND CASH EQUIVALENTS: | |||||||||||||||
| Beginning of year | 7,630 | 4,114 | |||||||||||||
| March 31 | $ | 11,068 | $ | 3,136 | |||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
| March 31 | December 31 | |||||||||||
| 2001 | 2000 | |||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash and cash equivalents | $ | 11,068 | $ | 7,630 | ||||||||
| Accounts receivable | 32,113 | 28,851 | ||||||||||
| Inventories | 40,325 | 39,760 | ||||||||||
| Other current assets and deferred income taxes | 5,361 | 6,048 | ||||||||||
| TOTAL CURRENT ASSETS | 88,867 | 82,289 | ||||||||||
| OTHER ASSETS | 2,075 | 1,593 | ||||||||||
| DEFERRED INCOME TAXES | 4,120 | 4,114 | ||||||||||
| PROPERTY, PLANT AND EQUIPMENT | 117,071 | 117,322 | ||||||||||
| Less allowances for depreciation | 59,808 | 59,437 | ||||||||||
| PROPERTY, PLANT AND EQUIPMENT — NET | 57,263 | 57,885 | ||||||||||
| TOTAL ASSETS | $ | 152,325 | $ | 145,881 | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Accounts payable | $ | 8,080 | $ | 7,391 | ||||||||
| Payrolls and related liabilities | 3,471 | 3,331 | ||||||||||
| Accrued expenses | 10,878 | 8,357 | ||||||||||
| Income taxes | 1,485 | 0 | ||||||||||
| TOTAL CURRENT LIABILITIES | 23,914 | 19,079 | ||||||||||
| LONG TERM DEBT | 3,207 | 3,413 | ||||||||||
| POSTRETIREMENT BENEFITS | 23,319 | 23,390 | ||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Common shares, without par value at stated capital amount | 5,106 | 5,106 | ||||||||||
| Retained earnings | 98,650 | 96,417 | ||||||||||
| Accumulated other comprehensive income | (1,871 | ) | (1,524 | ) | ||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 101,885 | 99,999 | ||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 152,325 | $ | 145,881 | ||||||||
| Common shares — authorized | 14,000,000 | 14,000,000 | ||||||||||
| * | Common shares — outstanding | 8,565,553 | 8,565,553 | |||||||||
| Common shares — treasury | 299,623 | 299,623 | ||||||||||
| * | After deducting treasury shares | |||||||||||
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2001
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, 2001 are not necessarily indicative of results that may be expected for the year ending December 31, 2001. 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, 2000.
NOTE B — INVENTORIES
The major components of inventories are as follows:
| March 31 | December 31 | |||||||||||
| (Thousands of dollars) | 2001 | 2000 | ||||||||||
| Raw materials and in-process | $ | 26,266 | $ | 25,898 | ||||||||
| Finished parts | 11,306 | 11,148 | ||||||||||
| Finished products | 2,753 | 2,714 | ||||||||||
| $ | 40,325 | $ | 39,760 | |||||||||
NOTE C — COMPREHENSIVE INCOME
During the first quarter of 2001 and 2000, total comprehensive income amounted to $3,257,000 and $4,087,000.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
First Quarter 2001 vs First Quarter 2000
Net sales were $49,671,000 in 2001, an increase of $647,000 or 1.3% from the $49,024,000 in 2000. Most of the increase was due to increased sales of pumps and fabricated turbine diffusers.
Other income was $262,000 in 2001 compared to $170,000 in 2000. Most of this increase was a result of increased currency exchange gains.
Cost of products sold in 2001 was $37,325,000 compared to $36,341,000 in 2000. The increase was primarily due to the use of materials to support the increased sales. Increases in payroll related expenses and health insurance were other major contributors to the increase. Heating costs were considerably higher than last year. As a percent of net sales, cost of products sold in 2001 was 75.1% compared to 74.1% in 2000.
Selling, general and administrative expenses increased to $6,744,000 in 2001 from $6,149,000 in 2000 principally due to an increase in advertising expenses. These expenses were unusually low in 2000.
Income before income taxes was $5,864,000 in 2001 compared to $6,704,000 in 2000, a decrease of $840,000. Income tax expense decreased from $2,604,000 in 2000 to $2,260,000 in 2001, primarily as a result of the decrease in profit. The effective income tax rate was 38.5% in 2001 and 38.8% in 2000.
Net income in 2001 of $3,604,000 decreased $496,000 from $4,100,000 in 2000. As a percent of net sales, net income was 7.3% in 2001 and 8.4% in 2000. Net income per share was $.42 in 2001, a decrease of $.06 from $.48 in 2000.
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, 2001 and 4.3 to 1 at December 31, 2000.
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 25, 2001 | ||||
| By: | /S/Kenneth E. Dudley | ||||
| Kenneth E. Dudley Treasurer & Principal Financial Officer |
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