The Gorman-Rupp Company (GRC) 10-Q 3 Aug 16 2016 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document Information [Line Items]
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)		26,091,123
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net sales	$ 96,265	$ 103,892	$ 196,522	$ 203,125
Cost of products sold	73,025	79,751	150,385	155,069
Gross profit	23,240	24,141	46,137	48,056
Selling, general and administrative expenses	13,702	14,258	27,371	27,570
Operating income	9,538	9,883	18,766	20,486
Other income	108	122	202	453
Other expense	(14)	(140)	(77)	(161)
Income before income taxes	9,632	9,865	18,891	20,778
Income taxes	3,012	3,236	5,989	6,874
Net income	$ 6,620	$ 6,629	$ 12,902	$ 13,904
Earnings per share (in dollars per share)	$ 0.25	$ 0.25	$ 0.49	$ 0.53
Cash dividends per share (in dollars per share)	$ 0.11	$ 0.10	$ 0.21	$ 0.20
Average number of shares outstanding (in shares)	26,083,623	26,260,543	26,083,623	26,260,543

Condensed Consolidated Stateme3

Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net income	$ 6,620	$ 6,629	$ 12,902	$ 13,904
Cumulative translation adjustments	(254)	621	1,246	(2,215)
Pension and postretirement medical liability adjustments, net of tax	232	1,162	482	1,388
Other comprehensive (loss) income	(22)	1,783	1,728	(827)
Comprehensive income	$ 6,598	$ 8,412	$ 14,630	$ 13,077

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 49,541	$ 23,724
Accounts receivable - net	74,676	76,758
Inventories - net	75,551	82,818
Other current assets	2,561	6,091
Total current assets	202,329	189,391
Property, plant and equipment	273,191	271,739
Less accumulated depreciation	(147,816)	(141,852)
Property, plant and equipment - net	125,375	129,887
Other assets	3,867	3,860
Goodwill and other intangible assets - net	40,413	41,063
Total assets	371,984	364,201
Current liabilities:
Accounts payable	15,298	14,529
Payroll and employee related liabilities	11,801	10,871
Commissions payable	10,612	7,950
Deferred revenue	361	1,741
Accrued expenses	8,571	8,369
Total current liabilities	46,643	43,460
Pension benefits	4,084	9,309
Postretirement benefits	21,140	20,784
Deferred and other income taxes	3,943	3,627
Total liabilities	75,810	77,180
Equity:
Outstanding common shares: 26,083,623 at June 30, 2016 and December 31, 2015 (net of treasury shares of 965,173, respectively), at stated capital amounts	5,095	5,095
Retained earnings	311,766	304,341
Accumulated other comprehensive loss	(20,687)	(22,415)
Total equity	296,174	287,021
Total liabilities and equity	$ 371,984	$ 364,201

Condensed Consolidated Balance5

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - shares	Jun. 30, 2016	Dec. 31, 2015
Common Stock Outstanding (in shares)	26,083,623	26,083,623
Treasury Shares (in shares)	965,173	965,173

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 12,902	$ 13,904
Adjustments to reconcile net income attributable to net cash provided by operating activities:
Depreciation and amortization	7,777	7,532
Pension expense	1,826	3,277
Contributions to pension plan	(6,000)
Changes in operating assets and liabilities:
Accounts receivable - net	2,082	(6,060)
Inventories - net	7,267	1,510
Accounts payable	769	(11)
Commissions payable	2,662	(40)
Deferred revenue	(1,380)	(1,999)
Prepaid income taxes	2,076	(435)
Payroll and benefit obligations	717	(213)
Accrued expenses and other	2,893	49
Net cash provided by operating activities	33,591	17,514
Cash flows from investing activities:
Capital additions - net	(2,547)	(4,104)
Acquisition, net of cash acquired		34
Net cash used for investing activities	(2,547)	(4,070)
Cash dividends	(5,478)	(5,252)
Payments to bank for borrowings		(6,000)
Net cash used for financing activities	(5,478)	(11,252)
Effect of exchange rate changes on cash	251	(694)
Net increase in cash and cash equivalents	25,817	1,498
Cash and cash equivalents:
Beginning of period	23,724	24,491
End of period	$ 49,541	$ 25,989

Note A - Basis of Presentation

Note A - Basis of Presentation of Financial Statements	6 Months Ended
	Jun. 30, 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 considered necessary for a fair presentation have been included. Certain amounts for 2015 have been reclassified to conform to the 2016 presentation. Operating results for the three and six months ended June 30, 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	6 Months Ended
	Jun. 30, 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 February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” In November 2015, the FASB issued ASU 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In July 2015, the FASB issued ASU 2015-11, “ Simplifying the Measurement of Inventory (Topic 330 ),” The Company currently does not expect the adoption of ASU 2015-11 to have a material impact on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606),

Note C - Inventories

Note C - Inventories	6 Months Ended
	Jun. 30, 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 June 30, 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 The major components of inventories are as follows (net of LIFO reserves of $60.0 million and $59.1 million at June 30, 2016 and December 31, 2015, respectively): (Dollars in thousands) June 30, 2016 December 31, 2015 Raw materials and in-process $ 24,088 $ 25,652 Finished parts 42,936 46,270 Finished products 8,527 10,896 Total inventories $ 75,551 $ 82,818

Note D - Product Warranties

Note D - Product Warranties	6 Months Ended
	Jun. 30, 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: June 30, (Dollars in thousands) 2016 2015 Balance at beginning of year $ 1,380 $ 1,189 Provision 1,160 734 Claims (884 ) (727 ) Balance at end of period $ 1,656 $ 1,196

Note E - Pension and Other Post

Note E - Pension and Other Postretirement Benefits	6 Months Ended
	Jun. 30, 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 June 30, Three Months Ende d June 30, (Dollars in thousands) 2016 2015 2016 2015 Service cost $ 709 $ 783 $ 298 $ 299 Interest cost 661 659 211 199 Expected return on plan assets (983 ) (1,067 ) - - Recognized actuarial loss (gain) 526 537 (175 ) (164 ) Settlement loss - 1,452 - - Net periodic benefit cost $ 913 $ 2,364 $ 334 $ 334 Pension Benefits Postretirement Benefits Six Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Service cost $ 1,418 $ 1,567 $ 596 $ 598 Interest cost 1,322 1,318 421 397 Expected return on plan assets (1,965 ) (2,134 ) - - Recognized actuarial loss (gain) 1,051 1,074 (349 ) (327 ) Settlement loss - 1,452 - - Net periodic benefit cost $ 1,826 $ 3,277 $ 668 $ 668

Note F - Accumulated Other Comp

Note F - Accumulated Other Comprehensive Income (Loss)	6 Months Ended
	Jun. 30, 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 June 30, Six Months Ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 351 $ 384 $ 702 $ 739 Settlement loss (b) - 959 - 959 Settlement loss (c) - 493 - 493 Total before income tax $ 351 $ 1,836 $ 702 $ 2,191 Income tax (119 ) (674 ) (220 ) (803 ) Net of income tax $ 232 $ 1,162 $ 482 $ 1,388 (a) The recognized actuarial loss is included in the computation of net periodic benefit cost. See Note E for additional details. (b) This portion of the settlement loss is included in cost of products sold on the condensed consolidated statements of income. (c) This portion of the settlement loss in included in Selling, general & administrative expenses on the condensed consolidated statements of income. The following tables summarize changes in balances for each component of accumulated other comprehensive income (loss): (Dollars in thousands) Currency Translation Adjustments Pensi Other Postretirement Benefits Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2016 $ (9,057 ) $ (13,358 ) $ (22,415 ) Reclassification adjustments - 702 702 Current period credit 1,246 - 1,246 Income tax expense - (220 ) (220 ) Balance at June 30, 2016 $ (7,811 ) $ (12,876 ) $ (20,687 ) (Dollars in thousands) Currency Translation Adjustments Pension and Other Postretirement Benefits Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2015 $ (4,338 ) $ (12,988 ) $ (17,326 ) Reclassification adjustments - 2,191 2,191 Current period (charge) credit (2,215 ) - (2,215 ) Income tax expense - (803 ) (803 ) Balance at June 30, 2015 $ (6,553 ) $ (11,600 ) $ (18,153 )

Note C - Inventories (Tables)

Note C - Inventories (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	(Dollars in thousands) June 30, 2016 December 31, 2015 Raw materials and in-process $ 24,088 $ 25,652 Finished parts 42,936 46,270 Finished products 8,527 10,896 Total inventories $ 75,551 $ 82,818

Note D - Product Warranties (Ta

Note D - Product Warranties (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	June 30, (Dollars in thousands) 2016 2015 Balance at beginning of year $ 1,380 $ 1,189 Provision 1,160 734 Claims (884 ) (727 ) Balance at end of period $ 1,656 $ 1,196

Note E - Pension and Other Po15

Note E - Pension and Other Postretirement Benefits (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Costs of Retirement Plans [Table Text Block]	Pension Benefits Postretirement Benefits Three Months Ended June 30, Three Months Ende d June 30, (Dollars in thousands) 2016 2015 2016 2015 Service cost $ 709 $ 783 $ 298 $ 299 Interest cost 661 659 211 199 Expected return on plan assets (983 ) (1,067 ) - - Recognized actuarial loss (gain) 526 537 (175 ) (164 ) Settlement loss - 1,452 - - Net periodic benefit cost $ 913 $ 2,364 $ 334 $ 334 Pension Benefits Postretirement Benefits Six Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Service cost $ 1,418 $ 1,567 $ 596 $ 598 Interest cost 1,322 1,318 421 397 Expected return on plan assets (1,965 ) (2,134 ) - - Recognized actuarial loss (gain) 1,051 1,074 (349 ) (327 ) Settlement loss - 1,452 - - Net periodic benefit cost $ 1,826 $ 3,277 $ 668 $ 668

Note F - Accumulated Other Co16

Note F - Accumulated Other Comprehensive Income (Loss) (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 351 $ 384 $ 702 $ 739 Settlement loss (b) - 959 - 959 Settlement loss (c) - 493 - 493 Total before income tax $ 351 $ 1,836 $ 702 $ 2,191 Income tax (119 ) (674 ) (220 ) (803 ) Net of income tax $ 232 $ 1,162 $ 482 $ 1,388
Comprehensive Income (Loss) [Table Text Block]	(Dollars in thousands) Currency Translation Adjustments Pensi Other Postretirement Benefits Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2016 $ (9,057 ) $ (13,358 ) $ (22,415 ) Reclassification adjustments - 702 702 Current period credit 1,246 - 1,246 Income tax expense - (220 ) (220 ) Balance at June 30, 2016 $ (7,811 ) $ (12,876 ) $ (20,687 ) (Dollars in thousands) Currency Translation Adjustments Pension and Other Postretirement Benefits Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2015 $ (4,338 ) $ (12,988 ) $ (17,326 ) Reclassification adjustments - 2,191 2,191 Current period (charge) credit (2,215 ) - (2,215 ) Income tax expense - (803 ) (803 ) Balance at June 30, 2015 $ (6,553 ) $ (11,600 ) $ (18,153 )

Note C - Inventories (Details T

Note C - Inventories (Details Textual) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Percentage of LIFO Inventory	72.00%	73.00%
Inventory, LIFO Reserve	$ 60	$ 59.1

Note C - Inventories (Details)

Note C - Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Raw materials and in-process	$ 24,088	$ 25,652
Finished parts	42,936	46,270
Finished products	8,527	10,896
Total inventories	$ 75,551	$ 82,818

Note D - Product Warranties (De

Note D - Product Warranties (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Balance at beginning of year	$ 1,380	$ 1,189
Provision	1,160	734
Claims	(884)	(727)
Balance at end of period	$ 1,656	$ 1,196

Note E - Pension and Other Po20

Note E - Pension and Other Postretirement Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Pension Plan [Member]
Service cost	$ 709	$ 783	$ 1,418	$ 1,567
Interest cost	661	659	1,322	1,318
Expected return on plan assets	(983)	(1,067)	(1,965)	(2,134)
Recognized actuarial loss (gain)	526	537	1,051	1,074
Settlement loss		1,452		1,452
Net periodic benefit cost	913	2,364	1,826	3,277
Service cost	709	783	1,418	1,567
Interest cost	661	659	1,322	1,318
Expected return on plan assets	(983)	(1,067)	(1,965)	(2,134)
Recognized actuarial loss (gain)	526	537	1,051	1,074
Settlement loss		1,452		1,452
Postretirement Benefits [Member]
Service cost	298	299	596	598
Interest cost	211	199	421	397
Expected return on plan assets
Recognized actuarial loss (gain)	(175)	(164)	(349)	(327)
Settlement loss
Net periodic benefit cost	334	334	668	668
Service cost	298	299	596	598
Interest cost	211	199	421	397
Expected return on plan assets
Recognized actuarial loss (gain)	(175)	(164)	(349)	(327)
Settlement loss

Note F - Reclassification out o

Note F - Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Cost of Sales [Member]
Settlement loss	[1]		$ 959		$ 959
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Selling, General and Administrative Expenses [Member]
Settlement loss	[2]		493		493
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Recognized actuarial loss (a)	[3]	351	384	702	739
Total before income tax		351	1,836	702	2,191
Income tax		(119)	(674)	(220)	(803)
Net of income tax		232	1,162	482	1,388
Total before income tax		9,632	9,865	18,891	20,778
Income tax		$ (3,012)	$ (3,236)	$ (5,989)	$ (6,874)
[1]	This portion of the settlement loss is included in cost of products sold on the condensed consolidated statements of income.
[2]	This portion of the settlement loss in included in Selling, general & administrative expenses on the condensed consolidated statements of income.
[3]	The recognized actuarial loss is included in the computation of net periodic benefit cost. See Note E for additional details.

Note F - Components of Accumula

Note F - Components of Accumulated Other Comprehensive Income (Loss) as Reported in the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Currency Translation Adjustments [Member]
Balance	$ (9,057)	$ (4,338)
Reclassification adjustments
Current period credit	1,246	(2,215)
Income tax expense
Balance	(7,811)	(6,553)
Current period (charge) credit	1,246	(2,215)
Pension Benefits [Member]
Balance	(13,358)	(12,988)
Reclassification adjustments	702	2,191
Current period credit
Income tax expense	(220)	(803)
Balance	(12,876)	(11,600)
Current period (charge) credit
Accumulated Other Comprehensive Income Loss [Member]
Balance	(22,415)	(17,326)
Reclassification adjustments	702	2,191
Current period credit	1,246	(2,215)
Income tax expense	(220)	(803)
Balance	(20,687)	(18,153)
Current period (charge) credit	1,246	$ (2,215)
Balance	(22,415)
Balance	$ (20,687)