The Gorman-Rupp Company (GRC) 10-Q 2 Aug 17 2017 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
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)		26,099,123
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net sales	$ 97,872	$ 96,265	$ 190,475	$ 196,522
Cost of products sold	71,727	73,025	143,135	150,385
Gross profit	26,145	23,240	47,340	46,137
Selling, general and administrative expenses	14,651	13,702	28,865	27,371
Operating income	11,494	9,538	18,475	18,766
Other income, net	313	94	652	125
Income before income taxes	11,807	9,632	19,127	18,891
Income taxes	3,959	3,012	6,214	5,989
Net income	$ 7,848	$ 6,620	$ 12,913	$ 12,902
Earnings per share (in dollars per share)	$ 0.30	$ 0.25	$ 0.49	$ 0.49
Cash dividends per share (in dollars per share)	$ 0.115	$ 0.105	$ 0.23	$ 0.21
Average number of shares outstanding (in shares)	26,096,881	26,083,623	26,095,013	26,083,623

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net income	$ 7,848	$ 6,620	$ 12,913	$ 12,902
Cumulative translation adjustments	1,317	(254)	1,864	1,246
Pension and postretirement medical liability adjustments, net of tax	1,280	232	2,556	482
Other comprehensive income (loss)	2,597	(22)	4,420	1,728
Comprehensive income	$ 10,445	$ 6,598	$ 17,333	$ 14,630

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 66,974	$ 57,604
Accounts receivable, net	72,884	71,424
Inventories, net	66,781	69,049
Prepaid and other	8,842	5,823
Total current assets	215,481	203,900
Property, plant and equipment, net	119,441	122,067
Other assets	8,206	7,769
Prepaid pension assets	7,856	6,211
Goodwill and other intangible assets, net	42,482	42,871
Total assets	393,466	382,818
Liabilities and equity
Accounts payable	17,205	16,306
Payroll and employee related liabilities	12,212	11,336
Commissions payable	7,679	11,163
Deferred revenue	1,021	1,361
Accrued expenses	9,834	9,186
Total current liabilities	47,951	49,352
Postretirement benefits	21,055	20,709
Other long-term liabilities	10,070	9,869
Total liabilities	79,076	79,930
Equity:
Common shares outstanding: 26,099,123 at June 30, 2017 and 26,093,123 at December 31, 2016 (net of treasury shares of 949,673 and 955,673, respectively), at stated capital amounts	5,098	5,097
Additional paid-in capital	363	215
Retained earnings	324,974	318,041
Accumulated other comprehensive loss	(16,045)	(20,465)
Total equity	314,390	302,888
Total liabilities and equity	$ 393,466	$ 382,818

Consolidated Balance Sheets (C5

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - shares	Jun. 30, 2017	Dec. 31, 2016
Common shares outstanding (in shares)	26,099,123	26,093,123
Treasury shares (in shares)	949,673	955,673

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net income	$ 12,913	$ 12,902
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,433	7,777
Pension expense	4,696	1,826
Contributions to pension plan	(2,000)	(6,000)
Changes in operating assets and liabilities:
Accounts receivable, net	(649)	2,082
Inventories, net	3,227	7,267
Accounts payable	461	769
Commissions payable	(3,642)	2,662
Deferred revenue	(340)	(1,380)
Income taxes	3,227	2,076
Accrued expenses and other	(2,347)	2,893
Benefit obligations	1,008	717
Net cash provided by operating activities	23,987	33,591
Cash used for investing activities:
Capital additions	(3,345)	(2,547)
Purchases of short-term investments	(5,999)
Net cash used for investing activities	(9,344)	(2,547)
Cash used for financing activities, cash dividends	(6,002)	(5,478)
Effect of exchange rate changes on cash	729	251
Net increase in cash and cash equivalents	9,370	25,817
Cash and cash equivalents:
Beginning of period	57,604	23,724
End of period	$ 66,974	$ 49,541

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation of Financial Statements	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
Basis of Accounting [Text Block]	NOTE 1 The accompanying unaudited 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 not three six June 30, 2017 not may December 31, 2017. 10 December 31, 2016,

Note 2 - Recently Issued Accoun

Note 2 - Recently Issued Accounting Standards	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	NOTE 2 The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not not In March 2017, No. 2017 07, 715 December 15, 2017. In January 2017, No. 2017 04, 350 December 15, 2019. not In February 2016, 2016 02, 842 one December 15, 2018. not 2016 02 not In May 2014, 2014 09, 606 2014 09. December 15, 2017. 2014 09

Note 3 - Inventories

Note 3 - Inventories	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
Inventory Disclosure [Text Block]	NOTE 3 Inventories are stated at the lower of cost or market. The costs for approximately 72% June 30, 2017 December 31, 2016 first first first $59.7 $58.4 June 30, 2017 December 31, 2016, Allowances for excess and obsolete inventory totaled $4.7 $4.5 June 30, 2017 December 31, 2016, The major components of net inventories are as follows: June 30, 2017 December 31, 2016 Raw materials and in-process $ 18,254 $ 17,986 Finished parts 41,850 43,423 Finished products 6,677 7,640 Total net inventories $ 66,781 $ 69,049

Note 4 - Property, Plant and Eq

Note 4 - Property, Plant and Equipment	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
Property, Plant and Equipment Disclosure [Text Block]	NOTE 4 Property, plant and equipment consist of the following: June 30, 2017 December 31, 2016 Land $ 4,157 $ 4,099 Buildings 105,733 104,952 Machinery and equipment 168,461 165,157 278,351 274,208 Less accumulated depreciation (158,910 ) (152,141 ) Property, plant and equipment, net $ 119,441 $ 122,067

Note 5 - Product Warranties

Note 5 - Product Warranties	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
Product Warranty Disclosure [Text Block]	NOTE 5 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, 2017 2016 Balance at beginning of year $ 1,435 $ 1,380 Provision 815 1,160 Claims (1,012 ) (884 ) Balance at end of period $ 1,238 $ 1,656

Note 6 - Pension and Other Post

Note 6 - Pension and Other Postretirement Benefits	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
Pension and Other Postretirement Benefits Disclosure [Text Block]	NOTE 6 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. 401 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 Company also sponsors a non-contributory defined benefit postretirement health care plan that provides health benefits to certain domestic and Canadian retirees and their spouses. 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 2017 2016 2017 2016 Service cost $ 671 $ 709 $ 312 $ 298 Interest cost 650 661 204 211 Expected return on plan assets (1,191 ) (983 ) - - Recognized actuarial loss (gain) 459 526 (169 ) (175 ) Settlement loss 1,713 - - - Net periodic benefit cost $ 2,302 $ 913 $ 347 $ 334 Pension Benefits Postretirement Benefits Six Months Ended Six Months Ended 2017 2016 2017 2016 Service cost $ 1,422 $ 1,418 $ 624 $ 596 Interest cost 1,319 1,322 407 421 Expected return on plan assets (2,387 ) (1,965 ) - - Recognized actuarial loss (gain) 949 1,051 (337 ) (349 ) Settlement loss 3,393 - - - Net periodic benefit cost $ 4,696 $ 1,826 $ 694 $ 668

Note 7 - Accumulated Other Comp

Note 7 - Accumulated Other Comprehensive Income (Loss)	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
Comprehensive Income (Loss) Note [Text Block]	NOTE 7 The following table summarizes reclassifications out of accumulated other comprehensive income (loss): Three Months Ended Six Months Ended 2017 2016 2017 2016 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 290 $ 351 $ 612 $ 702 Settlement loss (b) 1,130 - 2,188 - Settlement loss (c) 583 - 1,205 - Total before income tax $ 2,003 $ 351 $ 4,005 $ 702 Income tax (723 ) (119 ) (1,449 ) (220 ) Net of income tax $ 1,280 $ 232 $ 2,556 $ 482 (a) The recognized actuarial loss is included in the computation of net periodic benefit cost. See Note 6 (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 is 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): Currency Pension and Accumulated Balance at January 1, 2017 $ (8,842 ) $ (11,623 ) $ (20,465 ) Reclassification adjustments - 4,005 4,005 Current period credit 1,864 - 1,864 Income tax expense - (1,449 ) (1,449 ) Balance at June 30, 2017 $ (6,978 ) $ (9,067 ) $ (16,045 ) Currency Pension and Accumulated 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 )

Note 3 - Inventories (Tables)

Note 3 - Inventories (Tables)	6 Months Ended
	Jun. 30, 2017
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 30, 2017 December 31, 2016 Raw materials and in-process $ 18,254 $ 17,986 Finished parts 41,850 43,423 Finished products 6,677 7,640 Total net inventories $ 66,781 $ 69,049

Note 4 - Property, Plant and 15

Note 4 - Property, Plant and Equipment (Tables)	6 Months Ended
	Jun. 30, 2017
Notes Tables
Property, Plant and Equipment [Table Text Block]	June 30, 2017 December 31, 2016 Land $ 4,157 $ 4,099 Buildings 105,733 104,952 Machinery and equipment 168,461 165,157 278,351 274,208 Less accumulated depreciation (158,910 ) (152,141 ) Property, plant and equipment, net $ 119,441 $ 122,067

Note 5 - Product Warranties (Ta

Note 5 - Product Warranties (Tables)	6 Months Ended
	Jun. 30, 2017
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	June 30, 2017 2016 Balance at beginning of year $ 1,435 $ 1,380 Provision 815 1,160 Claims (1,012 ) (884 ) Balance at end of period $ 1,238 $ 1,656

Note 6 - Pension and Other Po17

Note 6 - Pension and Other Postretirement Benefits (Tables)	6 Months Ended
	Jun. 30, 2017
Notes Tables
Schedule of Costs of Retirement Plans [Table Text Block]	Pension Benefits Postretirement Benefits Three Months Ended Three Months Ended 2017 2016 2017 2016 Service cost $ 671 $ 709 $ 312 $ 298 Interest cost 650 661 204 211 Expected return on plan assets (1,191 ) (983 ) - - Recognized actuarial loss (gain) 459 526 (169 ) (175 ) Settlement loss 1,713 - - - Net periodic benefit cost $ 2,302 $ 913 $ 347 $ 334 Pension Benefits Postretirement Benefits Six Months Ended Six Months Ended 2017 2016 2017 2016 Service cost $ 1,422 $ 1,418 $ 624 $ 596 Interest cost 1,319 1,322 407 421 Expected return on plan assets (2,387 ) (1,965 ) - - Recognized actuarial loss (gain) 949 1,051 (337 ) (349 ) Settlement loss 3,393 - - - Net periodic benefit cost $ 4,696 $ 1,826 $ 694 $ 668

Note 7 - Accumulated Other Co18

Note 7 - Accumulated Other Comprehensive Income (Loss) (Tables)	6 Months Ended
	Jun. 30, 2017
Notes Tables
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]	Three Months Ended Six Months Ended 2017 2016 2017 2016 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 290 $ 351 $ 612 $ 702 Settlement loss (b) 1,130 - 2,188 - Settlement loss (c) 583 - 1,205 - Total before income tax $ 2,003 $ 351 $ 4,005 $ 702 Income tax (723 ) (119 ) (1,449 ) (220 ) Net of income tax $ 1,280 $ 232 $ 2,556 $ 482
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	Currency Pension and Accumulated Balance at January 1, 2017 $ (8,842 ) $ (11,623 ) $ (20,465 ) Reclassification adjustments - 4,005 4,005 Current period credit 1,864 - 1,864 Income tax expense - (1,449 ) (1,449 ) Balance at June 30, 2017 $ (6,978 ) $ (9,067 ) $ (16,045 ) Currency Pension and Accumulated 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 )

Note 3 - Inventories (Details T

Note 3 - Inventories (Details Textual) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Percentage of LIFO Inventory	72.00%	72.00%
Inventory, LIFO Reserve	$ 59.7	$ 58.4
Inventory Valuation Reserves	$ 4.7	$ 4.5

Note 3 - Inventories - Inventor

Note 3 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Raw materials and in-process	$ 18,254	$ 17,986
Finished parts	41,850	43,423
Finished products	6,677	7,640
Total net inventories	$ 66,781	$ 69,049

Note 4 - Property, Plant and 21

Note 4 - Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Property, plant and equipment, gross	$ 278,351	$ 274,208
Less accumulated depreciation	(158,910)	(152,141)
Property, plant and equipment, net	119,441	122,067
Land [Member]
Property, plant and equipment, gross	4,157	4,099
Building [Member]
Property, plant and equipment, gross	105,733	104,952
Machinery and Equipment [Member]
Property, plant and equipment, gross	$ 168,461	$ 165,157

Note 5 - Product Warranties - P

Note 5 - Product Warranties - Product Warranties (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Balance at beginning of year	$ 1,435	$ 1,380
Provision	815	1,160
Claims	(1,012)	(884)
Balance at end of period	$ 1,238	$ 1,656

Note 6 - Pension and Other Po23

Note 6 - Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Pension Plan [Member]
Net periodic benefit cost	$ 2,302	$ 913	$ 4,696	$ 1,826
Service cost	671	709	1,422	1,418
Interest cost	650	661	1,319	1,322
Expected return on plan assets	(1,191)	(983)	(2,387)	(1,965)
Recognized actuarial loss (gain)	459	526	949	1,051
Settlement loss	1,713		3,393
Postretirement Health Coverage [Member]
Net periodic benefit cost	347	334	694	668
Service cost	312	298	624	596
Interest cost	204	211	407	421
Expected return on plan assets
Recognized actuarial loss (gain)	(169)	(175)	(337)	(349)
Settlement loss

Note 7 - Accumulated Other Co24

Note 7 - Accumulated Other Comprehensive Income (Loss) - Reclassification Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Total before income tax		$ (11,807)	$ (9,632)	$ (19,127)	$ (18,891)
Income tax		3,959	3,012	6,214	5,989
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Recognized actuarial loss (a)	[1]	290	351	612	702
Total before income tax		2,003	351	4,005	702
Income tax		(723)	(119)	(1,449)	(220)
Net of income tax		1,280	232	2,556	482
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Cost of Sales [Member]
Settlement loss	[2]	1,130		2,188
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	[3]	$ 583		$ 1,205
[1]	The recognized actuarial loss is included in the computation of net periodic benefit cost. See Note 6 for additional details.
[2]	This portion of the settlement loss is included in cost of products sold on the condensed consolidated statements of income.
[3]	This portion of the settlement loss in included in selling, general & administrative expenses on the condensed consolidated statements of income.

Note 7 - Accumulated Other Co25

Note 7 - Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) as Reported in the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Balance	$ 314,390
Balance	302,888
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Current period credit	1,864	$ 1,246
Income tax expense
Balance	(6,978)	(7,811)
Balance	(8,842)	(9,057)
Reclassification adjustments
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Current period credit
Income tax expense	(1,449)	(220)
Balance	(9,067)	(12,876)
Balance	(11,623)	(13,358)
Reclassification adjustments	4,005	702
AOCI Attributable to Parent [Member]
Current period credit	1,864	1,246
Income tax expense	(1,449)	(220)
Balance	(16,045)	(20,687)
Balance	(20,465)	(22,415)
Reclassification adjustments	$ 4,005	$ 702