EXHIBIT 99, PAGE 1
GORMAN-RUPP REPORTS 2004 RESULTS
Mansfield, Ohio - February 25, 2005 - The Gorman-Rupp Company (AMEX:GRC) reports
record net sales of $203,554,000 for the year ended December 31, 2004 compared
to $195,826,000 for 2003, an increase of 3.9%. Net income for 2004 was
$9,277,000 compared to $9,787,000 in 2003. Earnings per share for 2004 and 2003,
stated to reflect the five-for-four stock split effective September 10, 2004,
were $0.87 and $0.92, respectively.
Record sales during 2004 reflected positive signs in the general economic
environment and capital goods markets during the year, and resulted principally
from increased pump sales in the industrial, construction and international
markets.
Benefit from increased sales volume on 2004 margins was more than offset
principally by lower operating results at the Company's wholly-owned subsidiary,
Patterson Pump Company. Increased prices for steel and energy, increased health
care costs and the impact of a year-end adjustment to inventory were
contributing factors to lower results at Patterson Pump. In addition, increases
in expenses associated with complying with the requirements of the
Sarbanes-Oxley Act of 2002 added pressure to the Company's operating income for
the year.
Net sales for the fourth quarter 2004 were $50,927,000 compared to $49,159,000
in 2003, an increase of 3.6%. Net income for the fourth quarter 2004 was
$2,565,000 compared to $3,463,000 in 2003, equal to post-split earnings per
share of $0.24 and $0.33, respectively.
The Company's backlog of orders at December 31, 2004 was $69.0 million compared
to $58.4 million at December 31, 2003, an increase of 18.2%.
During the course of the annual audit of the Company's 2004 financial
statements, the Company's management, together with Ernst & Young LLP, the
Company's independent auditors, identified the existence of one material
weakness in the Company's internal control over financial reporting. The
material weakness related to the inadequacy of accounting personnel and certain
communication procedures at Patterson Pump Company, which resulted in an
untimely recognition of a decrease in inventory. The Audit Review Committee of
the Company's Board of Directors, and the Board of Directors itself, have
reviewed the reports of management and Ernst & Young with respect to this
matter, including management's recommendations regarding how to remedy the
material weakness at Patterson Pump Company.
Jeffrey S. Gorman, President and CEO, said, "Gorman-Rupp has addressed the
situation at Patterson and is taking appropriate action. Management has plans
underway to add additional accounting staff at Patterson and to refine the
manner and timeliness of communications between Patterson's accounting
department and the Company's CFO."
EXHIBIT 99, PAGE 2
During the preparation of the 2004 income tax provision, the Company identified
a prior period error relating to the overstatement of a deferred income tax
liability. The correction of the error resulted in a 1997 through 2003
restatement recognizing the favorable impact of a $1.5 million increase to
shareholders' equity and a reduction to deferred tax liability.
The Company remains financially strong with positive cash flow and no long-term
debt contributing to its financial strength. Mr. Gorman stated, "New orders
received in 2005 from the construction, rental and fire protection markets have
been especially encouraging. In addition, Patterson Pump Company introduced a
line of pumps and pump systems for the heating, ventilating and air conditioning
(HVAC) market early in 2005. With the capital goods markets seemingly in a solid
recovery, we are optimistic that 2005 will be a good year for the Company."
David P. Emmens
Corporate Secretary
The Gorman-Rupp Company
Telephone (419) 755-1477
For information contact Robert E. Kirkendall, Sr. Vice President & CFO,
Telephone (419) 755-1294.
The Gorman-Rupp Company is a manufacturer of pumps and related equipment for
water, wastewater, construction, industrial, petroleum, original equipment,
agricultural, fire and government applications.
EXHIBIT 99, PAGE 3
The Gorman-Rupp Company and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands of dollars, except per share data)
Three Months Ended December 31, Twelve Months Ended December 31,
(unaudited)
2004 2003 2004 2003
-------- -------- -------- --------
Net sales $ 50,927 $ 49,159 $203,554 $195,826
Cost of products sold (1) 40,278 38,171 161,129 153,975
-------- -------- -------- --------
Gross profit 10,649 10,988 42,425 41,851
Selling, general &
administrative expenses (1) 7,446 6,641 28,999 27,988
-------- -------- -------- --------
Operating income 3,203 4,347 13,426 13,863
Other income (expense), net (1) 495 (148) 926 537
-------- -------- -------- --------
Income before income taxes 3,698 4,199 14,352 14,400
Income taxes 1,133 736 5,075 4,613
-------- -------- -------- --------
Net income $ 2,565 $ 3,463 $ 9,277 $ 9,787
======== ======== ======== ========
Basic & diluted earnings
per share $ 0.24 $ 0.33 $ 0.87 $ 0.92
(1) Prior period amounts have been reclassified to conform to the 2004
presentation.
The Gorman-Rupp Company and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands of dollars)
December 31, December 31,
2004 2003
------------ ------------
Assets As Restated
Cash & cash equivalents $ 18,898 $ 17,446
Accounts receivable 32,988 32,148
Inventories 38,234 38,062
Other current assets & deferred
income taxes 6,525 8,062
----------- -----------
Total Current Assets 96,645 95,718
Property, plant & equipment, net 54,812 54,338
Other assets 13,887 12,339
----------- -----------
Total Assets $ 165,344 $ 162,395
=========== ===========
Liabilities and Shareholders' Equity
Accounts payable $ 6,615 $ 6,163
Accrued liabilities & expenses 14,497 15,745
----------- -----------
Total Current Liabilities 21,112 21,908
Postretirement benefits 22,334 22,569
Shareholders' Equity 121,898 117,918
----------- -----------
Total Liabilities & Shareholders'
Equity $ 165,344 $ 162,395
=========== ===========
Shares outstanding 10,682,697 10,678,947
Shares outstanding and per share data reflect the 5 for 4 stock split effective
September 10, 2004.