The Gorman-Rupp Company (GRC) 10-Q 31 Oct 17 2017 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 27, 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)		26,106,623
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net sales	$ 93,976	$ 91,346	$ 284,451	$ 287,868
Cost of products sold	67,777	68,676	210,912	219,061
Gross profit	26,199	22,670	73,539	68,807
Selling, general and administrative expenses	14,242	12,819	43,107	40,190
Impairment of goodwill and other intangible assets	4,098		4,098
Operating income	7,859	9,851	26,334	28,617
Other income, net	98	551	750	676
Income before income taxes	7,957	10,402	27,084	29,293
Income taxes	2,255	3,475	8,469	9,464
Net income	$ 5,702	$ 6,927	$ 18,615	$ 19,829
Earnings per share (in dollars per share)	$ 0.22	$ 0.27	$ 0.71	$ 0.76
Cash dividends per share (in dollars per share)	$ 0.115	$ 0.105	$ 0.345	$ 0.315
Average number of shares outstanding (in shares)	26,106,623	26,091,123	26,098,925	26,086,141

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net income	$ 5,702	$ 6,927	$ 18,615	$ 19,829
Cumulative translation adjustments	1,255	241	3,119	1,487
Pension and postretirement medical liability adjustments, net of tax	472	228	3,028	710
Other comprehensive income	1,727	469	6,147	2,197
Comprehensive income	$ 7,429	$ 7,396	$ 24,762	$ 22,026

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 75,958	$ 57,604
Accounts receivable, net	67,964	71,424
Inventories, net	73,803	69,049
Prepaid and other	7,398	5,823
Total current assets	225,123	203,900
Property, plant and equipment, net	117,471	122,067
Other assets	8,451	7,769
Prepaid pension assets	7,740	6,211
Goodwill and other intangible assets, net	37,879	42,871
Total assets	396,664	382,818
Liabilities and equity
Accounts payable	16,624	16,306
Payroll and employee related liabilities	14,961	11,336
Commissions payable	6,822	11,163
Deferred revenue	551	1,361
Accrued expenses	8,322	9,186
Total current liabilities	47,280	49,352
Postretirement benefits	21,238	20,709
Other long-term liabilities	9,137	9,869
Total liabilities	77,655	79,930
Equity:
Common shares outstanding: 26,106,623 at September 30, 2017 and 26,093,123 at December 31, 2016 (net of treasury shares of 942,173 and 955,673, respectively), at stated capital amounts	5,100	5,097
Additional paid-in capital	526	215
Retained earnings	327,701	318,041
Accumulated other comprehensive loss	(14,318)	(20,465)
Total equity	319,009	302,888
Total liabilities and equity	$ 396,664	$ 382,818

Consolidated Balance Sheets (C5

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - shares	Sep. 30, 2017	Dec. 31, 2016
Common shares outstanding (in shares)	26,106,623	26,093,123
Treasury shares (in shares)	942,173	955,673

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net income	$ 18,615	$ 19,829
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,406	11,604
Pension expense	5,696	2,737
Pension contributions	(2,000)	(8,000)
Impairment of goodwill and other intangible assets	4,098
Gain on sale of property, plant and equipment	(48)	(974)
Changes in operating assets and liabilities:
Accounts receivable, net	4,570	2,869
Inventories, net	(3,377)	8,294
Accounts payable	(278)	467
Commissions payable	(4,593)	3,260
Deferred revenue	(810)	492
Income taxes	909	(568)
Accrued expenses and other	(4,117)	9,776
Benefit obligations	3,341	2,423
Net cash provided by operating activities	33,412	52,209
Cash used for investing activities:
Capital additions	(4,840)	(5,613)
Proceeds from sale of property, plant and equipment	294	1,284
Purchase of short-term investments, net	(2,975)
Net cash used for investing activities	(7,521)	(4,329)
Cash used for financing activities, cash dividends	(9,004)	(8,217)
Effect of exchange rate changes on cash	1,467	294
Net increase in cash and cash equivalents	18,354	39,957
Cash and cash equivalents:
Beginning of period	57,604	23,724
End of period	$ 75,958	$ 63,681

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation of Financial Statements	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
Basis of Accounting [Text Block]	NOTE 1 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS 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 presentation have been included. Operating results for the three nine September 30, 2017 not may December 31, 2017. 10 December 31, 2016,

Note 2 - Recently Issued Accoun

Note 2 - Recently Issued Accounting Standards	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	NOTE 2 - RECENTLY ISSUED ACCOUNTING STANDARDS The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not either to be not In March 2017, No. 2017 07, 715 December 15, 2017 2017 07 6 not 2017 07 In January 2017, No. 2017 04, 350 December 15, 2019 three September 30, 2017. 2017 04 2017 04 2017 04 not third 2017. 8 In February 2016, 2016 02, 842 ,” which requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with a term of more than one December 15, 2018 not 2016 02 not In May 2014, 2014 09, 606 Subsequent accounting standards updates have been issued, which amend and/or clarify the application of ASU 2014 09. December 15, 2017. not

Note 3 - Inventories

Note 3 - Inventories	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
Inventory Disclosure [Text Block]	NOTE 3 - INVENTORIES Inventories are stated at the lower of cost or market. The costs for approximately 72% September 30, 2017 December 31, 2016 first first first $59.7 $58.4 September 30, 2017 December 31, 2016, Allowances for excess and obsolete inventory totaled $ 4.9 $4.5 September 30, 2017 December 31, 2016, The major components of net inventories are as follows: September 3 0 , 2017 December 31, 2016 Raw materials and in-process $ 20,406 $ 17,986 Finished parts 46,126 43,423 Finished products 7,271 7,640 Total net inventories $ 73,803 $ 69,049

Note 4 - Property, Plant and Eq

Note 4 - Property, Plant and Equipment	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
Property, Plant and Equipment Disclosure [Text Block]	NOTE 4 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following: September 3 0 , 2017 December 31, 2016 Land $ 4,148 $ 4,099 Buildings 106,356 104,952 Machinery and equipment 168,190 165,157 278,694 274,208 Less accumulated depreciation (161,223 ) (152,141 ) Property, plant and equipment, net $ 117,471 $ 122,067

Note 5 - Product Warranties

Note 5 - Product Warranties	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
Product Warranty Disclosure [Text Block]	NOTE 5 - 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: September 3 0 , 2017 2016 Balance at beginning of year $ 1,435 $ 1,380 Provision 1,058 1,572 Claims (1,360 ) (1,418 ) Balance at end of period $ 1,133 $ 1,534

Note 6 - Pension and Other Post

Note 6 - Pension and Other Postretirement Benefits	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
Pension and Other Postretirement Benefits Disclosure [Text Block]	NOTE 6 - 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. 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 September 3 0 , Three Months Ended September 3 0 , 2017 2016 2017 2016 Service cost $ 655 $ 709 $ 312 $ 298 Interest cost 599 659 203 210 Expected return on plan assets (1,138 ) (982 ) - - Recognized actuarial loss (gain) 436 525 (168 ) (174 ) Settlement loss 448 - - - Net periodic benefit cost $ 1,000 $ 911 $ 347 $ 334 Pension Benefits Postretirement Benefits Nine Months Ended September 3 0 , Nine Months Ended September 3 0 , 2017 2016 2017 2016 Service cost $ 2,078 $ 2,127 $ 937 $ 894 Interest cost 1,918 1,981 610 631 Expected return on plan assets (3,525 ) (2,947 ) - - Recognized actuarial loss (gain) 1,384 1,576 (505 ) (523 ) Settlement loss 3,841 - - - Net periodic benefit cost $ 5,696 $ 2,737 $ 1,042 $ 1,002

Note 7 - Accumulated Other Comp

Note 7 - Accumulated Other Comprehensive Income (Loss)	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
Comprehensive Income (Loss) Note [Text Block]	NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes reclassifications out of accumulated other comprehensive income (loss): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 267 $ 351 $ 879 $ 1,053 Settlement loss (b) 305 - 2,493 - Settlement loss (c) 143 - 1,348 - Total before income tax $ 715 $ 351 $ 4,720 $ 1,053 Income tax (243 ) (123 ) (1,692 ) (343 ) Net of income tax $ 472 $ 228 $ 3,028 $ 710 (a) The recognized actuarial loss is included in the computation of net p eriodic 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 i s 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 Translation Pension and Other Accumulated Other Balance at January 1, 2017 $ (8,842 ) $ (11,623 ) $ (20,465 ) Reclassification adjustments - 4,720 4,720 Current period credit 3,119 54 3,173 Income tax expense - (1,746 ) (1,746 ) Balance at September 30, 2017 $ (5,723 ) $ (8,595 ) $ (14,318 ) Currency Translation Pension and Other Accumulated Other Balance at January 1, 2016 $ (9,057 ) $ (13,358 ) $ (22,415 ) Reclassification adjustments - 1,053 1,053 Current period credit 1,487 - 1,487 Income tax expense - (343 ) (343 ) Balance at September 30, 2016 $ (7,570 ) $ (12,648 ) $ (20,218 )

Note 8 - Impairment Charges

Note 8 - Impairment Charges	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
Asset Impairment Charges [Text Block]	NOTE 8 – IMPAIRMENT CHARGES The decreasing demand for barge pumps for the marine transportation market, driven by low oil prices and overcapacity of inland barges, has continued to negatively affect the Bayou City Pump Company (“Bayou”) reporting unit, leading management to reconsider its estimates for future profitability of this reporting unit during the third 2017 2017 04 $0.9 $3.2

Note 3 - Inventories (Tables)

Note 3 - Inventories (Tables)	9 Months Ended
	Sep. 30, 2017
Notes Tables
Schedule of Inventory, Current [Table Text Block]	September 3 0 , 2017 December 31, 2016 Raw materials and in-process $ 20,406 $ 17,986 Finished parts 46,126 43,423 Finished products 7,271 7,640 Total net inventories $ 73,803 $ 69,049

Note 4 - Property, Plant and 16

Note 4 - Property, Plant and Equipment (Tables)	9 Months Ended
	Sep. 30, 2017
Notes Tables
Property, Plant and Equipment [Table Text Block]	September 3 0 , 2017 December 31, 2016 Land $ 4,148 $ 4,099 Buildings 106,356 104,952 Machinery and equipment 168,190 165,157 278,694 274,208 Less accumulated depreciation (161,223 ) (152,141 ) Property, plant and equipment, net $ 117,471 $ 122,067

Note 5 - Product Warranties (Ta

Note 5 - Product Warranties (Tables)	9 Months Ended
	Sep. 30, 2017
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	September 3 0 , 2017 2016 Balance at beginning of year $ 1,435 $ 1,380 Provision 1,058 1,572 Claims (1,360 ) (1,418 ) Balance at end of period $ 1,133 $ 1,534

Note 6 - Pension and Other Po18

Note 6 - Pension and Other Postretirement Benefits (Tables)	9 Months Ended
	Sep. 30, 2017
Notes Tables
Schedule of Costs of Retirement Plans [Table Text Block]	Pension Benefits Postretirement Benefits Three Months Ended September 3 0 , Three Months Ended September 3 0 , 2017 2016 2017 2016 Service cost $ 655 $ 709 $ 312 $ 298 Interest cost 599 659 203 210 Expected return on plan assets (1,138 ) (982 ) - - Recognized actuarial loss (gain) 436 525 (168 ) (174 ) Settlement loss 448 - - - Net periodic benefit cost $ 1,000 $ 911 $ 347 $ 334 Pension Benefits Postretirement Benefits Nine Months Ended September 3 0 , Nine Months Ended September 3 0 , 2017 2016 2017 2016 Service cost $ 2,078 $ 2,127 $ 937 $ 894 Interest cost 1,918 1,981 610 631 Expected return on plan assets (3,525 ) (2,947 ) - - Recognized actuarial loss (gain) 1,384 1,576 (505 ) (523 ) Settlement loss 3,841 - - - Net periodic benefit cost $ 5,696 $ 2,737 $ 1,042 $ 1,002

Note 7 - Accumulated Other Co19

Note 7 - Accumulated Other Comprehensive Income (Loss) (Tables)	9 Months Ended
	Sep. 30, 2017
Notes Tables
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]	Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Pension and other postretirement benefits: Recognized actuarial loss (a) $ 267 $ 351 $ 879 $ 1,053 Settlement loss (b) 305 - 2,493 - Settlement loss (c) 143 - 1,348 - Total before income tax $ 715 $ 351 $ 4,720 $ 1,053 Income tax (243 ) (123 ) (1,692 ) (343 ) Net of income tax $ 472 $ 228 $ 3,028 $ 710
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	Currency Translation Pension and Other Accumulated Other Balance at January 1, 2017 $ (8,842 ) $ (11,623 ) $ (20,465 ) Reclassification adjustments - 4,720 4,720 Current period credit 3,119 54 3,173 Income tax expense - (1,746 ) (1,746 ) Balance at September 30, 2017 $ (5,723 ) $ (8,595 ) $ (14,318 ) Currency Translation Pension and Other Accumulated Other Balance at January 1, 2016 $ (9,057 ) $ (13,358 ) $ (22,415 ) Reclassification adjustments - 1,053 1,053 Current period credit 1,487 - 1,487 Income tax expense - (343 ) (343 ) Balance at September 30, 2016 $ (7,570 ) $ (12,648 ) $ (20,218 )

Note 3 - Inventories (Details T

Note 3 - Inventories (Details Textual) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Percentage of LIFO Inventory	72.00%	72.00%
Inventory, LIFO Reserve	$ 59.7	$ 58.4
Inventory Valuation Reserves	$ 4.9	$ 4.5

Note 3 - Inventories - Inventor

Note 3 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Raw materials and in-process	$ 20,406	$ 17,986
Finished parts	46,126	43,423
Finished products	7,271	7,640
Total net inventories	$ 73,803	$ 69,049

Note 4 - Property, Plant and 22

Note 4 - Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Property, plant and equipment, gross	$ 278,694	$ 274,208
Less accumulated depreciation	(161,223)	(152,141)
Property, plant and equipment, net	117,471	122,067
Land [Member]
Property, plant and equipment, gross	4,148	4,099
Building [Member]
Property, plant and equipment, gross	106,356	104,952
Machinery and Equipment [Member]
Property, plant and equipment, gross	$ 168,190	$ 165,157

Note 5 - Product Warranties - P

Note 5 - Product Warranties - Product Warranties (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Balance at beginning of year	$ 1,435	$ 1,380
Provision	1,058	1,572
Claims	(1,360)	(1,418)
Balance at end of period	$ 1,133	$ 1,534

Note 6 - Pension and Other Po24

Note 6 - Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Pension Plan [Member]
Service cost	$ 655	$ 709	$ 2,078	$ 2,127
Interest cost	599	659	1,918	1,981
Expected return on plan assets	(1,138)	(982)	(3,525)	(2,947)
Recognized actuarial loss (gain)	436	525	1,384	1,576
Settlement loss	448		3,841
Net periodic benefit cost	1,000	911	5,696	2,737
Postretirement Health Coverage [Member]
Service cost	312	298	937	894
Interest cost	203	210	610	631
Expected return on plan assets
Recognized actuarial loss (gain)	(168)	(174)	(505)	(523)
Settlement loss
Net periodic benefit cost	$ 347	$ 334	$ 1,042	$ 1,002

Note 7 - Accumulated Other Co25

Note 7 - Accumulated Other Comprehensive Income (Loss) - Reclassification Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Total before income tax		$ (7,957)	$ (10,402)	$ (27,084)	$ (29,293)
Income tax		2,255	3,475	8,469	9,464
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Recognized actuarial loss (a)	[1]	267	351	879	1,053
Total before income tax		715	351	4,720	1,053
Income tax		(243)	(123)	(1,692)	(343)
Net of income tax		472	228	3,028	710
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Cost of Sales [Member]
Settlement loss	[2]	305		2,493
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]	$ 143		$ 1,348
[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 is included in selling, general & administrative expenses on the condensed consolidated statements of income.

Note 7 - Accumulated Other Co26

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	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Balance	$ 302,888
Balance	319,009
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Balance	(8,842)	$ (9,057)
Reclassification adjustments
Current period credit	3,119	1,487
Income tax expense
Balance	(5,723)	(7,570)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Balance	(11,623)	(13,358)
Reclassification adjustments	4,720	1,053
Current period credit	54
Income tax expense	(1,746)	(343)
Balance	(8,595)	(12,648)
AOCI Attributable to Parent [Member]
Balance	(20,465)	(22,415)
Reclassification adjustments	4,720	1,053
Current period credit	3,173	1,487
Income tax expense	(1,746)	(343)
Balance	$ (14,318)	$ (20,218)

Note 8 - Impairment Charges (De

Note 8 - Impairment Charges (Details Textual) $ in Millions	3 Months Ended
	Sep. 30, 2017USD ($)
Goodwill, Impairment Loss	$ 0.9
Customer Relationships [Member]
Impairment of Intangible Assets, Finite-lived	$ 3.2