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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 June 30, 2000 Commission File Number 1-6747
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The Gorman-Rupp Company
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(Exact name of registrant as specified in its charter)
Ohio 34-0253990
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
305 Bowman Street, P. O. Box 1217, Mansfield, Ohio 44901
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 755-1011
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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
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Shares outstanding at June 30, 2000
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common, without par value, 8,585,505
Page 1 of 7 pages
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PART I - FINANCIAL INFORMATION
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands of dollars, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
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INCOME
Net sales $ 47,288 $ 45,118 $ 95,577 $ 88,302
Other income 229 256 399 458
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TOTAL INCOME 47,517 45,374 95,976 88,760
DEDUCTIONS FROM INCOME
Cost of products sold 35,050 33,615 70,656 65,505
Selling, general and
administrative expenses 6,427 6,282 12,576 13,100
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TOTAL DEDUCTIONS 41,477 39,897 83,232 78,605
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INCOME BEFORE INCOME TAXES 6,040 5,477 12,744 10,155
Income taxes 2,379 2,096 4,983 3,913
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NET INCOME $ 3,661 $ 3,381 $ 7,761 $ 6,242
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Basic And Diluted
Earnings Per Share $ 0.42 $ 0.40 $ 0.90 $ 0.73
Dividends Paid Per Share $ 0.15 $ 0.15 $ 0.30 $ 0.30
Avg. Shares Outstanding 8,591,402 8,579,641 8,591,725 8,579,735
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
Six Months Ended
June 30
2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,761 $ 6,242
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,210 3,279
Changes in operating assets and liabilities 380 (3,815)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (7,662) (4,947)
Change in short-term investments (2,587) (1,502)
Other 46 (177)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (2,578) (2,575)
Change in treasury shares (348) 104
(Repayments to) Borrowings from bank (232) 2,734
NET (DECREASE) INCREASE IN CASH ---------- ----------
AND CASH EQUIVALENTS (2,010) (657)
CASH AND CASH EQUIVALENTS:
Beginning of year 4,114 2,359
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June 30 $ 2,104 $ 1,702
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
June 30 December 31
2000 1999
ASSETS ------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 2,104 $ 4,114
Short-term investments 5,812 3,225
Accounts receivable 33,046 27,898
Inventories 35,283 36,189
Other current assets and deferred income taxes 6,643 6,759
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TOTAL CURRENT ASSETS 82,888 78,185
OTHER ASSETS 663 715
DEFERRED INCOME TAXES 4,373 4,366
PROPERTY, PLANT AND EQUIPMENT 115,295 107,962
Less allowances for depreciation 57,235 54,353
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PROPERTY, PLANT AND EQUIPMENT - NET 58,060 53,609
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TOTAL ASSETS $ 145,984 $ 136,875
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,801 $ 5,805
Payrolls and related liabilities 3,218 2,943
Accrued expenses 9,050 6,969
Income taxes 1,592 693
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TOTAL CURRENT LIABILITIES 21,661 16,410
LONG TERM DEBT 2,875 3,107
POSTRETIREMENT BENEFITS 24,272 25,063
SHAREHOLDERS' EQUITY
Common shares, without par value
at stated capital amount 5,119 5,123
Retained earnings 93,248 88,409
Accumulated other comprehensive income (1,191) (1,237)
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TOTAL SHAREHOLDERS' EQUITY 97,176 92,295
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 145,984 $ 136,875
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Common shares - authorized 14,000,000 14,000,000
* Common shares - outstanding 8,585,505 8,592,049
Common shares - treasury 279,671 273,127
* After deducting treasury shares
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2000
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 and six
month periods ended June 30, 2000 are not necessarily indicative of results that
may be expected for the year ending December 31, 2000. For further information,
refer to the consolidated financial statements and notes thereto included in
the Company's Annual Report on Form 10K for the year ended December 31, 1999.
NOTE B - INVENTORIES
The major components of inventories are as follows:
June 30 December 31
(Thousands of dollars) 2000 1999
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Raw materials and in-process $23,438 $24,040
Finished parts 9,034 9,266
Finished products 2,811 2,883
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$35,283 $36,189
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NOTE C - COMPREHENSIVE INCOME
During the three month periods ended June 30, 2000 and 1999, total comprehensive
income was $3,720,000 and $3,564,000, respectively. During the six month periods
ended June 30, 2000 and 1999, total comprehensive income was $7,807,000 and
$6,556,000, respectively.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Second Quarter 2000 vs Second Quarter 1999
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Net sales were $47,288,000 in 2000 compared to $45,118,000 in 1999, an in-
crease of 4.8%. A significant amount of the increase was due to increased sales
to the equipment rental market.
Other income was $229,000 in 2000 compared to $256,000 in 1999. The decrease was
due primarily to gains on disposals of property, plant and equipment in 1999
that were not repeated in 2000.
Cost of products sold in 2000 was $35,050,000 compared to $33,615,000 in 1999.
The largest factors in the increase were material needed to support the
increased sales and increased payroll related expenses. As a percentage of net
sales, cost of products sold was 74.1% in 2000 compared to 74.5% in 1999. A
change in product mix lowered the percentage in 2000.
Selling, general and administrative expenses increased from $6,282,000 in 1999
to $6,427,000 in 2000 primarily as a result of an increase in payroll related
expenses.
Income before income taxes was $6,040,000 in 2000 compared to $5,477,000 in
1999, an increase of $563,000. Income tax expense increased from $2,096,000 in
1999 to $2,379,000 in 2000, primarily as a result of the increase in profit. The
effective tax rate was 39.4% in 2000 compared to 38.3% in 1999.
Net income in 2000 was $3,661,000 which resulted in an increase of $280,000 from
$3,381,000 in 1999, an increase of 8.3%. As a percent of net sales, net income
was 7.7% in 2000 and 7.5% in 1999. Net income per share was $.42 in 2000, an
increase of $.02 from the $.40 in 1999.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Six Months 2000 vs Six Months 1999
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Net sales were $95,577,000 in 2000, an increase of $7,275,000 or 8.2% over the
$88,302,000 in 1999. A majority of the increase is related to increased sales of
fabricated turbine diffusers.
Other income was $399,000 in 2000 compared to $458,000 in 1999. The decrease was
primarily due to a decrease in gains on disposals of property, plant and
equipment in 1999 that were not repeated in 2000.
Cost of products sold in 2000 was $70,656,000 compared to $65,505,000 in 1999.
The largest factor in the increase was material needed to support the increased
sales. An increase in payroll related expenses also contributed to the
increase. As a percentage of net sales, cost of products sold was 73.9% in 2000
compared to 74.2% in 1999. Changes in product mix are responsible for the lower
percentage in 2000.
Selling, general and administrative expenses decreased from $13,100,000 in 1999
to $12,576,000 in 2000 principally due to a decrease in advertising expenses
associated with some non-recurring trade shows. More shows, including ConExpo,
were held in 1999 than 2000. ConExpo is the largest trade show related to the
construction industry in the U.S. and is held every three years.
Income before income taxes was $12,744,000 in 2000, compared to $10,155,000 in
1999, an increase of $2,589,000. Income tax expense increase from $3,913,000 in
1999 to $4,983,000 in 2000. The effective income tax rate was 39.1% in 2000
compared to 38.5% in 1999.
Net income of $7,761,000 in 2000 increased $1,519,000 from $6,242,000 in 1999,
an increase of 24.3%. As a percent of net sales, net income was 8.1% in 2000 and
7.1% in 1999. Net income per share was $.90 in 2000, an increase from the $.73
in 1999.
FINANCIAL CONDITION
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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 3.8 to 1 at June 30, 2000 and
4.8 to 1 at December 31, 1999.
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
June 30, 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
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(Registrant)
Date July 25, 2000
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By:/S/Kenneth E. Dudley
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Kenneth E. Dudley
Treasurer & Principal
Financial Officer
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