The Gorman-Rupp Company (GRC) 10-Q 4 May 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 29, 2016
Entity Registrant Name	GORMAN RUPP CO
Entity Central Index Key	42,682
Trading Symbol	grc
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		26,083,623
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net sales	$ 100,257	$ 99,233
Cost of products sold	77,360	75,318
Gross profit	22,897	23,915
Selling, general and administrative expenses	13,669	13,312
Operating income	9,228	10,603
Other income	94	331
Other expense	(63)	(21)
Income before income taxes	9,259	10,913
Income taxes	2,977	3,638
Net income	$ 6,282	$ 7,275
Earnings per share (in dollars per share)	$ 0.24	$ 0.28
Cash dividends per share (in dollars per share)	$ 0.105	$ 0.10
Average number of shares outstanding (in shares)	26,083,623	26,260,543

Condensed Consolidated Stateme3

Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income	$ 6,282	$ 7,275
Cumulative translation adjustments	1,500	(2,836)
Pension and postretirement medical liability adjustments, net of tax	250	226
Other comprehensive income (loss)	1,750	(2,610)
Comprehensive income	$ 8,032	$ 4,665

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 40,191	$ 23,724
Accounts receivable – net	78,059	76,758
Inventories - net	77,293	82,818
Other current assets	3,354	6,091
Total current assets	198,897	189,391
Property, plant and equipment	272,231	271,739
Less accumulated depreciation	(144,662)	(141,852)
Property, plant and equipment – net	127,569	129,887
Other assets	3,981	3,860
Goodwill and other intangible assets – net	40,876	41,063
Total assets	371,323	364,201
Current liabilities:
Accounts payable	17,476	14,529
Payroll and employee related liabilities	9,426	10,871
Commissions payable	9,373	7,950
Deferred revenue	1,638	1,741
Accrued expenses	8,466	8,369
Total current liabilities	46,379	43,460
Pension benefits	7,697	9,309
Postretirement benefits	20,970	20,784
Deferred and other income taxes	3,962	3,627
Total liabilities	79,008	77,180
Equity:
Outstanding common shares: 26,083,623 at March 31, 2016 and December 31, 2015 (net of treasury shares of 965,173, respectively), at stated capital amounts	5,095	5,095
Retained earnings	307,885	304,341
Accumulated other comprehensive loss	(20,665)	(22,415)
Total equity	292,315	287,021
Total liabilities and equity	$ 371,323	$ 364,201

Condensed Consolidated Balance5

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - shares	Mar. 31, 2016	Dec. 31, 2015
Common Stock Outstanding (in shares)	26,083,623	26,260,543
Treasury Shares (in shares)		965,173

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 6,282	$ 7,275
Adjustments to reconcile net income attributable to net cash provided by operating activities:
Depreciation and amortization	3,872	3,752
Pension expense	913	$ 913
Contributions to pension plan	(2,000)
Changes in operating assets and liabilities:
Accounts receivable - net	(1,301)	$ (860)
Inventories - net	5,525	(2,442)
Accounts payable	2,947	2,453
Commissions payable	1,424	1,024
Deferred revenue	(104)	(777)
Accrued expenses	(1,279)	(322)
Benefit obligations and other	3,831	(2,053)
Net cash provided by operating activities	20,110	8,963
Cash flows used for investing activities, Capital additions - net	(1,212)	(1,397)
Cash flows from financing activities:
Cash dividends	$ (2,739)	(2,626)
Payments to bank for borrowings		(3,000)
Net cash used for financing activities	$ (2,739)	(5,626)
Effect of exchange rate changes on cash	308	870
Net increase in cash and cash equivalents	16,467	2,810
Cash and cash equivalents:
Beginning of period	23,724	24,491
End of period	$ 40,191	$ 27,301

Note A - Basis of Presentation

Note A - Basis of Presentation of Financial Statements	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Basis of Accounting [Text Block]	NOTE A - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of The Gorman-Rupp Company (the “Company” or “Gorman-Rupp”) and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. 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, 2015, from which related information herein has been derived.

Note B - Recently Issued Accoun

Note B - Recently Issued Accounting Standards	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	NOTE B - RECENTLY ISSUED ACCOUNTING STANDARDS The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606),

Note C - Inventories

Note C - Inventories	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	NOTE C - INVENTORIES Inventories are stated at the lower of cost or market. The costs for approximately 72% of inventories at March 31, 2016 and 73% of inventories at December 31, 2015 are determined using the last-in, first-out (LIFO) method, with the remainder determined using the first-in, first-out (FIFO) method applied on a consistent basis. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimate of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory valuation. The major components of inventories are as follows (net of LIFO reserves of $59.8 million and $59.1 million at March 31, 2016 and December 31, 2015, respectively): March 31, December 31, (Dollars in thousands) 2016 2015 Raw materials and in-process $ 22,122 $ 25,652 Finished parts 45,472 46,270 Finished products 9,699 10,896 Total inventories $ 77,293 $ 82,818

Note D - Product Warranties

Note D - Product Warranties	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Product Warranty Disclosure [Text Block]	NOTE D - PRODUCT WARRANTIES A liability is established for estimated future warranty and service claims based on historical claims experience and specific product failures. The Company expenses warranty costs directly to cost of products sold. Changes in the Company’s product warranty liability are: March 31, (Dollars in thousands) 2016 2015 Balance at beginning of year $ 1,380 $ 1,166 Provision 269 185 Claims (402 ) (280 ) Balance at end of period $ 1,247 $ 1,071

Note E - Pension and Other Post

Note E - Pension and Other Postretirement Benefits	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Pension and Other Postretirement Benefits Disclosure [Text Block]	NOTE E - PENSION AND OTHER POSTRETIREMENT BENEFITS The Company sponsors a defined benefit pension plan (“Plan”) covering certain domestic employees. Benefits are based on each covered employee’s years of service and compensation. The Plan is funded in conformity with the funding requirements of applicable U.S. regulations. The Plan was closed to new participants effective January 1, 2008. Employees hired after that date, in eligible locations, are eligible to participate in an enhanced 401(k) plan instead of the defined benefit pension plan. Employees hired prior to January 1, 2008 continue to accrue benefits under the Plan. Additionally, the Company sponsors defined contribution pension plans made available to all domestic and Canadian employees. The Company funds the cost of these benefits as incurred. The following tables present the components of net periodic benefit cost: Pension Benefits Postretirement Benefits Three Months Ended Three Months Ended March 31, March 31, 2016 2015 2016 2015 (Dollars in thousands) Service cost $ 709 $ 784 $ 298 $ 299 Interest cost 661 659 210 198 Expected return on plan assets (982 ) (1,067 ) - - Recognized actuarial loss (gain) 525 537 (174 ) (163 ) Net periodic benefit cost $ 913 $ 913 $ 334 $ 334

Note F - Accumulated Other Comp

Note F - Accumulated Other Comprehensive Income (Loss)	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Accumulated Other Comprehensive Loss [Text Block]	NOTE F – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes reclassifications out of accumulated other comprehensive income (loss): Three Months Ended March 31, (Dollars in thousands) 2016 2015 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 351 $ 355 Income tax (101 ) (129 ) Net of income tax $ 250 $ 226 (a) The recognized actuarial loss is included in the computation of net periodic benefit cost. See Note E for additional details. The following tables summarize changes in accumulated balances for each component of other comprehensive income (loss): (Dollars in thousands) Currency Pension and Other Accumulated Other Balance at January 1, 2016 $ (9,057 ) $ (13,358 ) $ (22,415 ) Reclassification adjustments - 351 351 Current period charge 1,500 42 1,542 Income tax expense - (143 ) (143 ) Balance at March 31, 2016 $ (7,557 ) $ (13,108 ) $ (20,665 ) (Dollars in thousands) Currency Pension and Other Accumulated Other Balance at January 1, 2015 $ (4,338 ) $ (12,988 ) $ (17,326 ) Reclassification adjustments - 355 355 Current period charge (2,836 ) - (2,836 ) Income tax expense - (129 ) (129 ) Balance at March 31, 2015 $ (7,174 ) $ (12,762 ) $ (19,936 )

Note C - Inventories (Tables)

Note C - Inventories (Tables)	3 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	March 31, December 31, (Dollars in thousands) 2016 2015 Raw materials and in-process $ 22,122 $ 25,652 Finished parts 45,472 46,270 Finished products 9,699 10,896 Total inventories $ 77,293 $ 82,818

Note D - Product Warranties (Ta

Note D - Product Warranties (Tables)	3 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	March 31, (Dollars in thousands) 2016 2015 Balance at beginning of year $ 1,380 $ 1,166 Provision 269 185 Claims (402 ) (280 ) Balance at end of period $ 1,247 $ 1,071

Note E - Pension and Other Po15

Note E - Pension and Other Postretirement Benefits (Tables)	3 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Costs of Retirement Plans [Table Text Block]	Pension Benefits Postretirement Benefits Three Months Ended Three Months Ended March 31, March 31, 2016 2015 2016 2015 (Dollars in thousands) Service cost $ 709 $ 784 $ 298 $ 299 Interest cost 661 659 210 198 Expected return on plan assets (982 ) (1,067 ) - - Recognized actuarial loss (gain) 525 537 (174 ) (163 ) Net periodic benefit cost $ 913 $ 913 $ 334 $ 334

Note F - Accumulated Other Co16

Note F - Accumulated Other Comprehensive Income (Loss) (Tables)	3 Months Ended
	Mar. 31, 2016
Notes Tables
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]	Three Months Ended March 31, (Dollars in thousands) 2016 2015 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 351 $ 355 Income tax (101 ) (129 ) Net of income tax $ 250 $ 226
Comprehensive Income (Loss) [Table Text Block]	(Dollars in thousands) Currency Pension and Other Accumulated Other Balance at January 1, 2016 $ (9,057 ) $ (13,358 ) $ (22,415 ) Reclassification adjustments - 351 351 Current period charge 1,500 42 1,542 Income tax expense - (143 ) (143 ) Balance at March 31, 2016 $ (7,557 ) $ (13,108 ) $ (20,665 ) (Dollars in thousands) Currency Pension and Other Accumulated Other Balance at January 1, 2015 $ (4,338 ) $ (12,988 ) $ (17,326 ) Reclassification adjustments - 355 355 Current period charge (2,836 ) - (2,836 ) Income tax expense - (129 ) (129 ) Balance at March 31, 2015 $ (7,174 ) $ (12,762 ) $ (19,936 )

Note C - Inventories (Details T

Note C - Inventories (Details Textual) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Percentage of LIFO Inventory	72.00%	73.00%
Inventory, LIFO Reserve	$ 59.8	$ 59.1

Note C - Inventories - Inventor

Note C - Inventories - Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Raw materials and in-process	$ 22,122	$ 25,652
Finished parts	45,472	46,270
Finished products	9,699	10,896
Total inventories	$ 77,293	$ 82,818

Note D - Product Warranties - P

Note D - Product Warranties - Product Warranties (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Balance at beginning of year	$ 1,380	$ 1,166
Provision	269	185
Claims	(402)	(280)
Balance at end of period	$ 1,247	$ 1,071

Note E - Pension and Other Po20

Note E - Pension and Other Postretirement Benefits - Pension and Other Postretirement Benefits (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pension Plan [Member]
Service cost	$ 709	$ 784
Interest cost	661	659
Expected return on plan assets	(982)	(1,067)
Recognized actuarial loss (gain)	525	537
Net periodic benefit cost	913	913
Postretirement Benefits [Member]
Service cost	298	299
Interest cost	$ 210	$ 198
Expected return on plan assets
Recognized actuarial loss (gain)	$ (174)	$ (163)
Net periodic benefit cost	$ 334	$ 334

Note F - Accumulated Other Co21

Note F - Accumulated Other Comprehensive Income (Loss) - Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Recognized actuarial loss (a)	[1]	$ 351	$ 355
Income tax		(101)	(129)
Net of income tax		250	226
Income tax		$ (2,977)	$ (3,638)
[1]	The recognized actuarial loss is included in the computation of net periodic benefit cost. See Note E for additional details.

Note F - Accumulated Other Co22

Note F - Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) as Reported in the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	3 Months Ended		15 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016
Currency Translation Adjustments [Member]
Balance	$ (9,057)	$ (4,338)	$ (4,338)
Reclassification adjustments
Current period charge	$ 1,500	$ (2,836)
Income tax expense
Balance	(7,557)	$ (7,174)	$ (7,557)
Pension And O P E B Adjustments [Member]
Balance	(13,358)	(12,988)	(12,988)
Reclassification adjustments	351	$ 355
Current period charge	42
Income tax expense		$ (129)	(143)
Balance	(13,108)	(12,762)	(13,108)
Accumulated Other Comprehensive Income Loss [Member]
Balance	(22,415)	(17,326)	(17,326)
Reclassification adjustments	351	355
Current period charge	1,542	(2,836)
Income tax expense		(129)	(143)
Balance	(20,665)	$ (19,936)	(20,665)
Balance	(22,415)
Balance	$ (20,665)		$ (20,665)