1
Exhibit (13)
The Gorman-Rupp Company and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME AND SHAREHOLDERS' EQUITY
(Thousands of dollars, except per share amounts) YEAR ENDED DECEMBER 31,
INCOME 1994 1993 1992
-------- -------- --------
Net sales......................... $137,508 $131,535 $126,019
Other income...................... 511 589 521
-------- -------- --------
TOTAL INCOME.................. 138,019 132,124 126,540
Deductions from income:
Cost of products sold......... 101,745 98,836 95,044
Selling, general and
administrative expenses.... 21,322 19,430 18,837
-------- -------- --------
123,067 118,266 113,881
-------- -------- --------
INCOME BEFORE
INCOME TAXES............... 14,952 13,858 12,659
Income taxes...................... 5,625 5,063 4,693
-------- -------- --------
Income before cumulative
effect of a change in
accounting principle......... 9,327 8,795 7,966
Cumulative effect of a change in
accounting principle......... - - (11,886)
-------- -------- --------
NET INCOME (LOSS).......... $ 9,327 $ 8,795 $ (3,920)
======== ======== ========
Per Share Amounts
Income before cumulative
effect of a change in
accounting principle......... $ 1.09 $ 1.02 $ .92
Cumulative effect of a change
in accounting principle...... - - (1.38)
-------- -------- --------
NET INCOME (LOSS).......... $ 1.09 $ 1.02 $ (.46)
======== ======== ========
SHAREHOLDERS' EQUITY
CUMULATIVE
COMMON RETAINED TRANSLATION
SHARES EARNINGS ADJUSTMENTS TOTAL
------ -------- ----------- -------
BALANCES
DECEMBER 31, 1991................. $5,124 $55,884 $ 248 $61,256
Net loss.......................... (3,920) (3,920)
Cash dividends - $.46 a share..... (3,923) (3,923)
Translation adjustment............ (654) (654)
------ -------- ----------- -------
BALANCES
DECEMBER 31, 1992................. 5,124 48,041 (406) 52,759
Net income........................ 8,795 8,795
Cash dividends - $.48 a share..... (4,122) (4,122)
Purchase of 14,305 common
shares for treasury............. (9) (266) (275)
Translation adjustment............ (246) (246)
------ -------- ----------- -------
BALANCES
DECEMBER 31, 1993................. 5,115 52,448 (652) 56,911
Net income........................ 9,327 9,327
Cash dividends - $.49 a share..... (4,209) (4,209)
Translation adjustment............ (421) (421)
------ -------- ----------- -------
BALANCES
DECEMBER 31, 1994................. $5,115 $57,566 $(1,073) $61,608
====== ======== =========== ======
<FN>
Per share data reflects the 3 for 2 stock split effective October 27, 1994.
See notes to consolidated financial statements.
2
The Gorman-Rupp Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars) DECEMBER 31,
ASSETS 1994 1993
-------- --------
CURRENT ASSETS
Cash and cash equivalents $ 3,062 $ 2,782
Accounts receivable 22,772 23,886
Inventories 30,814 25,614
Deferred income taxes 2,644 2,742
Other current assets 778 722
-------- --------
TOTAL CURRENT ASSETS 60,070 55,746
OTHER ASSETS 651 701
DEFERRED INCOME TAXES 5,500 5,424
PROPERTY, PLANT AND EQUIPMENT
Land 1,004 1,004
Buildings 26,130 24,472
Machinery and equipment 49,529 45,250
-------- --------
76,663 70,726
Less allowances for depreciation 35,784 33,891
-------- --------
PROPERTY, PLANT AND EQUIPMENT - NET 40,879 36,835
-------- --------
$107,100 $ 98,706
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable............................... $ 5,781 $ 6,844
Payrolls and related liabilities............... 2,340 2,176
Accrued expenses............................... 4,513 4,581
Income taxes................................... 257 781
Notes payable to banks......................... 3,500 -
-------- --------
TOTAL CURRENT LIABILITIES................... 16,391 14,382
LONG-TERM DEBT.................................... 4,715 4,274
PENSION LIABILITY................................. 1,512 1,064
POSTRETIREMENT HEALTH BENEFITS OBLIGATION......... 22,874 22,075
SHAREHOLDERS' EQUITY
Common Shares, without par value:
Authorized - 14,000,000 shares;
Outstanding* - 8,579,633 shares in
1994 and 8,579,949 shares in 1993
(after deducting treasury shares
of 285,543 in each year) at stated
capital amount........................... 5,115 5,115
Retained earnings.............................. 57,566 52,448
Cumulative translation adjustments............. (1,073) (652)
-------- --------
TOTAL SHAREHOLDERS' EQUITY............... 61,608 56,911
-------- --------
$107,100 $ 98,706
======== ========
<FN>
*Shares reflect the 3 for 2 stock split effective October 27, 1994.
See notes to consolidated financial statements.
3
The Gorman-Rupp Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31,
(Thousands of dollars) 1994 1993 1992
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................... $ 9,327 $ 8,795 $ (3,920)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Cumulative effect of an accounting change........... - - 11,886
Depreciation and amortization....................... 4,534 4,274 4,025
Deferred income taxes............................... 22 (771) (689)
Pension liability................................... 448 512 100
Changes in operating assets and liabilities:
Accounts receivable............................... 1,114 (4,528) (386)
Inventories....................................... (5,200) (1,623) 2,008
Accounts payable.................................. (1,063) 1,265 (607)
Postretirement health benefits obligation......... 799 1,448 1,796
Other............................................. (880) 408 (1,713)
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES......... 9,101 9,780 12,500
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net..................................... (8,553) (10,277) (4,496)
Proceeds from sale of assets............................... - - 1,948
-------- -------- --------
NET CASH USED FOR INVESTING ACTIVITIES............ (8,553) (10,277) (2,548)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends............................................. (4,209) (4,122) (3,923)
Borrowings from (payments to) bank......................... 3,941 4,274 (5,670)
Purchase of common shares for treasury..................... - (275) -
-------- -------- --------
NET CASH USED FOR FINANCING ACTIVITIES............ (268) (123) (9,593)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS........................... 280 (620) 359
CASH AND CASH EQUIVALENTS:
Beginning of year.......................................... 2,782 3,402 3,043
-------- -------- --------
END OF YEAR................................................ $3,062 $2,782 $3,402
======== ======== ========
<FN>
See notes to consolidated financial statements.
4
The Gorman-Rupp Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF MAJOR ACCOUNTING POLICIES
CONSOLIDATION: The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are stated
on the basis of cost. Depreciation is computed principally by the straight-line
method over the estimated useful lives of the assets.
INCOME TAXES: The Company uses the liability method of accounting for
income taxes.
STATEMENT OF CASH FLOWS: The Company considers highly liquid, short-term
investments to be cash equivalents.
INVENTORIES: Inventories are stated at the lower of cost or market. The cost
for approximately 67% and 59% of inventories at December 31, 1994 and 1993,
respectively, is determined using the last-in, first-out (LIFO) method, with
the remainder determined using the first-in, first-out method.
BUSINESS SEGMENT INFORMATION: The Company operates principally in one business
segment, the manufacture and sale of pumps and other fluid control equipment.
Export sales comprised approximately 13% of net sales in 1994 and 11% in 1993
and 1992.
CONCENTRATION OF CREDIT RISK: Sales to two customers were approxi-
mately 15% of total net sales in 1994 and 1993. Approximately 13% and 25% of
accounts receivable at December 31, 1994 and 1993, respectively, relate to the
same customers. The Company generally does not require collateral from its
customers. The Company has a good collection rate.
NOTE B -- INVENTORIES: The major components of inventories are
as follows:
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993
- --------------------------------------------------------------------------------
Raw materials and in-process.......... $ 7,883 $ 8,824
Finished parts........................ 19,834 14,941
Finished products..................... 3,097 1,849
------ ------
$ 30,814 $ 25,614
======== ========
- --------------------------------------------------------------------------------
The excess of replacement cost over LIFO cost is approximately $18,758,000 and
$18,244,000 at December 31, 1994 and 1993, respectively.
During 1992, the Company's inventory levels decreased resulting in a
liquidation of LIFO inventory quantities carried at lower prior year costs as
compared to current costs. The effect of the liquidation of LIFO inventories
increased income before cumulative effect of a change in accounting principle
by $824,000 or $.10 per share.
NOTE C -- FINANCING ARRANGEMENTS: Under unsecured demand lines of credit with
banks, the Company may borrow up to $5.0 million with interest at the banks'
prime rate. At December 31, 1994, $3.5 million was outstanding at a weighted
average interest rate of 7.0%.
The Company also has an unsecured revolving loan agreement which matures in
August 1996 and provides for maximum borrowings of $8 million. $4.7 million and
$4.3 million was outstanding at December 31, 1994 and 1993, respectively; $.9
million covered outstanding letters of credit at December 31, 1994 and
1993; and the remainder in each year was available for borrowing. Interest is
payable quarterly at the LIBOR rate plus .75% or at alternative rates as
selected by the Company (7.0% and 4.3% at December 31, 1994 and 1993,
respectively). The agreement contains restrictive covenants including limits on
additional borrowings and maintenance of certain operating and financial ratios.
Interest expense was $195,000, $58,000 and $213,000 in 1994, 1993 and 1992,
respectively.
NOTE D -- INCOME TAXES: The components of income before income taxes are:
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993 1992
- --------------------------------------------------------------------------------
United States....................... $14,724 $13,646 $12,568
Canada.............................. 228 212 91
------- ------- -------
$14,952 $13,858 $12,659
======= ======= =======
- --------------------------------------------------------------------------------
The components of income tax expense are as follows:
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993 1992
- --------------------------------------------------------------------------------
Current:
Federal.......................... $4,888 $5,110 $4,703
Canadian......................... 115 104 49
State and local.................. 600 620 630
------- ------- -------
5,603 5,834 5,382
Deferred............................ 22 (771) (689)
------- ------- -------
$5,625 $5,063 $4,693
======= ======= =======
- --------------------------------------------------------------------------------
The reasons for the difference between income tax expense and the amount
computed by applying the statutory federal income tax rate of 35% in 1994 and
1993 (34% in 1992) to income before income taxes are as follows:
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993 1992
- --------------------------------------------------------------------------------
Income taxes at
statutory rate.................. $5,233 $4,850 $4,304
Deferred benefit due to
change in federal rate.......... - (229) -
State and local income
taxes, net of federal
tax benefit..................... 390 363 416
Other............................... 2 79 (27)
------- ------- -------
$5,625 $5,063 $4,693
======= ======= =======
- --------------------------------------------------------------------------------
Deferred tax assets (liabilities) consist of the following:
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993 1992
- --------------------------------------------------------------------------------
Current:
Inventories...................... $1,292 $1,205 $1,187
Accrued liabilities.............. 1,352 1,537 1,350
------- ------- -------
2,644 2,742 2,537
Non-current:
Depreciation..................... (3,010) (2,465) (1,945)
Postretirement health
benefits obligation............ 8,692 8,393 7,605
Other............................ (182) (504) (815)
------- ------- -------
5,500 5,424 4,845
------- ------- -------
$8,144 $8,166 $7,382
======= ======= =======
- --------------------------------------------------------------------------------
The Company made income tax payments of $6,018,000, $5,857,000 and
$5,951,000 in 1994, 1993 and 1992, respectively.
5
The Gorman-Rupp Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE E - PENSIONS: The Company has a defined benefit pension plan covering
substantially all employees. The Company's policy is to fund the maximum tax
deductible contribution. The plan provides benefits based upon years of service
and compensation. The components of pension expense are as follows:
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993 1992
- --------------------------------------------------------------------------------
Service cost - benefits earned....... $ 1,128 $ 896 $ 842
Interest cost........................ 1,467 1,411 1,255
Return on plan assets................ 1,069 (709) (904)
Net amortization and deferral........ (3,215) (1,086) (1,093)
------- ------ ------
$ 449 $ 512 $ 100
======= ====== ======
- --------------------------------------------------------------------------------
The funded status of the Plan at November 1, 1994 and 1993
is as follows:
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993
- --------------------------------------------------------------------------------
Actuarial present value of
accumulated benefit obligation:
Vested....................... $11,078 $14,068
Non-vested................... 119 188
------- -------
$11,197 $14,256
======= =======
Plan assets at fair value............ $16,487 $20,541
Actuarial present value of projected
benefit obligation.............. (16,028) (20,640)
------- -------
Plan assets in excess of (less than)
projected benefit obligation.... 459 (99)
Unrecognized net (gain) loss......... (774) 658
Unrecognized transition asset........ (1,391) (1,851)
Unrecognized prior service cost...... 194 228
------- -------
Net pension (liability) at December 31 $(1,512) $(1,064)
======= =======
- --------------------------------------------------------------------------------
The projected benefit obligation was determined using an assumed discount rate
of 8 1/2% in 1994 (7% in 1993). A 7% discount rate was used to calculate lump
sum benefit payments in 1994 and 1993. Annual salary increases are assumed to
be 4 1/2% in 1994 and 1993. The long-term rate of return on plan assets was
assumed to be 8% in each year. Plan assets are invested principally in
guaranteed investment contracts and equity and fixed income funds.
The effect of the change in the discount rate was to decrease the actuarial
present value of the projected benefit obligation by approximately
$4,200,000 as of December 31, 1994. The change, which will also be used for
determining expense in 1995, is not expected to have a material effect on the
Company's financial statements.
NOTE F - POSTRETIREMENT HEALTH BENEFITS:
The Company sponsors a non-contributory defined benefit health care plan that
provides health benefits to retirees and their spouses. The Company's policy is
to fund the cost of these benefits as incurred. In 1992, the Company adopted
Statement of Financial Accounting Standards No. 106, Accounting for
Postretirement Benefits Other than Pensions (Statement 106). In adopting
Statement 106, the Company recorded the accumulated postretirement health
benefits obligation as of January 1, 1992 ($11,886,000, net of applicable
income taxes of $6,945,000) as a cumulative effect of a change in accounting
principle. The following table presents the plan's funded status reconciled
with amounts recognized in the Company's balance sheets.
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993
- --------------------------------------------------------------------------------
Accumulated postretirement
health benefits obligation:
Retirees....................... $ 6,363 $ 6,186
Fully eligible active
plan participants............. 5,051 5,633
Other active plan participants. 3,389 4,042
------- -------
Accumulated benefits obligation 14,803 15,861
Unrecognized assets:
Net gain....................... 2,442 61
Prior service cost from
plan amendment................ 5,629 6,153
------- -------
Accrued postretirement health
benefits obligation............ $22,874 $22,075
======= =======
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993 1992
- --------------------------------------------------------------------------------
Postretirement health benefits
expense includes the following
components:
Service cost................. $ 785 $ 704 $ 776
Interest cost................ 1,144 1,429 1,548
Net amortization of
unrecognized prior
service cost.............. (525) (131) -
------- ------ ------
$1,404 $2,002 $2,324
======= ====== ======
- --------------------------------------------------------------------------------
The weighted-average discount rate used in determining the accumulated
postretirement health benefits obligation was 8 1/2% in 1994 (7% in 1993). The
weighted-average annual assumed rate of increase in the per capita cost of
covered benefits (i.e., health care cost trend rate) for 1995 and 1994 is
11 - 12 1/2%, depending on the age of the retiree, and is assumed to decrease
gradually to 5.5% by 2008 and remain at that level thereafter. Increasing the
assumed health care cost trend rates by one percentage point in each year would
increase the accumulated postretirement health benefits obligation as of
December 31, 1994 by $1,698,000 and post retirement health benefits expense
for the year ended December 31, 1994 by $202,00O.
The effect of the change in the discount rate was to decrease the
accumulated postretirement health benefits obligation by approximately
$2,400,000 as of December 31, 1994. The effect of the change on 1994 expense
was not material and the change is not expected to have a material effect on
the 1995 financial statements.
6
The Gorman-Rupp Company and Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1994 COMPARED TO 1993
Record sales of $137.5 million were recorded in 1994, compared to $131.5
million in 1993, an increase of $6.0 million or 4.5%. The increase in net sales
was principally the result of increased business in the waste and fresh water
business, and to a lesser degree, increases in unit pricing. Other income in
1994 was $511,000, compared to $589,000 in 1993, and consisted principally of
interest earned on short-term investments and income from leased facilities.
Cost of products sold as a percentage of net sales was 74% in 1994,
compared to 75.1% in 1993. Continued efforts to improve manufacturing
efficiencies and cost containment procedures coupled with increased utilization
of the manufacturing facilities at the Company's largest division resulted in
improved cost of products sold for the comparative periods.
Selling, general and administrative expense was 15.5% of net sales in 1994,
compared to 14.8% in 1993. The increase of $1,892,000 in 1994 was principally
the result of increased salaries and related employee benefits and expenses
associated with the design and implementation of upgraded information
management systems.
The effective income tax rate was 37.6% in 1994, compared to 36.5% in 1993.
(See Note D to the financial statements.)
Net income in 1994 was a record $9,327,000, compared to net income of
$8,795,000 in 1993, an increase of 6.0%. Net income as a percent of net sales
in 1994 was 6.8%, as compared to 6.7% in 1993. Net income per share in 1994 was
a record $1.09, an increase of $.07 from net income per share of $1.02 in 1993.
On August 25, 1994, the Board of Directors of the Company declared and
authorized a 3 for 2 split of the Company's Common Shares which was
effected by a distribution of additional Common Shares on October 27, 1994 to
shareholders of record on September 29, 1994. The authorized distribution
increased the shares outstanding by 2,859,667 to 8,579,633. Accordingly, per
share data has been restated to reflect the 3 for 2 stock split.
1993 COMPARED TO 1992
Record sales of $131.5 million were recorded in 1993, compared to $126 million
in 1992, an increase of $5.5 million or 4.4%. The increase in net sales was
principally the result of increased business in the waste and fresh water
business, and to a lesser degree, increases in unit pricing. The sale of pumps,
the Company's primary business, increased approximately 8% in 1993, more than
offsetting the reduction in sales due to the divestiture in August 1992 of the
Durham Products Division, a manufacturer of electric motors. Other income in
1993 was $589,000, compared to $521,000 in 1992, and consisted principally of
interest earned on short-term investments and income from leased facilities.
Cost of products sold as a percentage of net sales was 75.1% in 1993, compared
to 75.4% in 1992. Continued efforts to improve manufacturing efficiencies and
cost containment procedures resulted in stabilized cost of product sold for the
comparative periods.
Selling, general and administrative expense was 14.8% of net sales in
1993, compared to 14.9% in 1992. The $593,000 increase in 1993 was principally
the result of increased advertising expense due to the Company's participation
in Con Expo '93, a national construction show held every six years.
The effective income tax rate was 36.5% in 1993, compared to 37.1% in 1992.
(See Note D to the financial statements.)
Net income in 1993 was a record $8,795,000, compared to income of $7,966,000
before cumulative effect of a change in accounting in 1992, an increase of
10.4%. Net income as a percent of net sales in 1993 was 6.7%, as compared to
income before cumulative effect of a change in accounting in 1992 as a percent
of net sales of 6.3%. Net income per share in 1993 was a record $1.02, an
increase of $.10 from income per share before cumulative effect of a change in
accounting in 1992 of $.92. In 1992 the cumulative effect of a change in a
accounting reduced income by $11,886,000 or $1.38 per share, resulting in a net
loss of $3,920,000 or $.46 per share.
LIQUIDITY AND SOURCES OF CAPITAL
Cash and cash equivalents were $3 million as of December 31, 1994. The
Company has $5 million in bank lines of credit. $3.5 million was borrowed
against these lines at December 31, 1994.
The Company also maintains an unsecured revolving credit facility which
provides for maximum borrowings of $8 million, $2.4 million of which is
available. As of December 31, 1994, $4.7 million had been borrowed and $.9
million covered outstanding letters of credit.
During 1994, the Company financed its capital improvements and working capital
requirements through internally generated funds and line of credit arrangements
with banks. Capital expenditures for 1995 are expected to be financed through
internally generated funds and existing credit arrangements.
The ratio of current assets to current liabilities was 3.7 to 1 at
December 31, 1994, compared to 3.9 to 1 at December 31, 1993. Management
believes that it has adequate working capital and a healthy liquidity position.
IMPACT OF INFLATION
The Company continues to implement programs that improve productivity and
efficiency in a stabilizing inflationary economy.
7
The Gorman-Rupp Company and Subsidiaries
TEN YEAR SUMMARY OF SELECTED FINANCIAL DATA
(Thousands of dollars, except per share amounts)
1994 1993 1992 1991
-------- -------- -------- --------
OPERATING RESULTS:
Net sales $137,508 $131,535 $126,019 $123,442
Gross profit 35,763 32,699 30,975 29,872
Income taxes 5,625 5,063 4,693 4,664
Income (1) 9,327 8,795 7,966 7,689
Return on sales (%) 6.8 6.7 6.3 6.2
Sales dollars per employee 138.5 133.9 125.6 120.0
FINANCIAL POSITION:
Current assets $ 60,070 $ 55,746 $ 50,152 $ 53,642
Current liabilities 16,391 14,382 12,380 14,471
Working capital 43,679 41,364 37,772 39,171
Current ratio 3.7 3.9 4.1 3.7
Property, plant and
equipment - net 40,879 36,835 30,807 30,838
Capital additions 8,553 10,277 4,496 8,224
Total assets 107,100 98,706 86,434 85,131
Shareholders' equity 61,608 56,911 52,759 61,256
Dividends paid 4,209 4,122 3,923 3,820
Average number of employees 993 982 1,003 1,029
SHAREHOLDER INFORMATION:
Income per share (1) $1.09 $1.02 $.92 $.89
Cash dividends per share .49 .48 .46 .45
Shareholders' equity per share at December 31, 7.18 6.63 6.14 7.13
Average number of shares outstanding 8,579,633 8,588,493 8,594,255 8,594,255
<FN>
Per share data reflects the 3 for 2 split effective October 27, 1994.
(1) Income for 1992 is before cumulative effect of a change in accounting
principle which reduced income by $11,886,000 or $1.38 per share.
* Includes the aquisition of Patterson Pump Company in November 1988.
- -------------------------------------------------------------------------------------------------------------------
Ranges of Stock Prices
The high and low sales price and dividends per share for Common Shares traded on the American Stock Exchange were:
Sales Price of Common Shares Dividends Per Share
1994 1993 1994 1993
---------------- ----------------- ---- ----
Quarter High Low High Low
First $20.000 $16.750 $19.500 $16.583 $.12 $.12
Second 18.583 16.333 18.583 17.000 .12 .12
Third 17.333 15.167 20.333 17.833 .12 .12
Fourth 8.500 15.750 18.917 17.333 .13 .12
<FN>
Per share data reflects the 3 for 2 split effective October 27, 1994.
- -------------------------------------------------------------------------------------------------------------------
SHAREHOLDER INFORMATION REPORTED BY TRANSFER AGENT AND REGISTRAR, NATIONAL CITY BANK, FEBRUARY 15, 1995
Holders Shares
----- ---------
Individuals 1,273 2,584,141
Nominees, Brokers and Other 33 5,999,980
----- ---------
Total 1,306 8,584,121
===== =========
<FN>
An additional 281,055 Common Shares are held in Treasury.
- -------------------------------------------------------------------------------------------------------------------
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
The following is a summary of unaudited quarterly results of operations for the years ended December 31, 1994 and 1993.
(Thousands of dollars, except per share amounts)
QUARTER ENDED 1994 MAR. 31 JUNE 30 SEPT. 30 DEC.31
------- ------- -------- -------
Net sales $38,118 $34,003 $33,781 $31,606
Gross profit 9,732 9,372 8,860 7,799
Net income 2,968 2,615 2,329 1,415
Net income per share .35 .30 .27 .17
QUARTER ENDED 1993 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
------- ------- -------- -------
Net sales $32,832 $33,858 $33,532 $31,313
Gross profit 8,070 8,326 8,624 7,679
Net Income 2,199 2,281 2,485 1,830
Net Income per share .26 .26 .29 .21
<FN>
Per share data reflects the 3 for 2 stock split effective October 27, 1994.
8
1990 1989 1988* 1987 1986 1985
---- ---- ----- ---- ---- ----
$ 119,715 $ 114,253 $ 82,750 $ 74,435 $ 65,274 $ 67,324
28,602 27,663 22,308 20,460 17,376 19,908
4,888 4,638 4,221 4,851 3,821 4,780
7,342 6,771 6,618 5,919 4,397 5,762
6.1 5.9 8.0 8.0 6.7 8.6
120.7 118.6 106.9 99.2 85.3 87.2
$ 50,531 $ 48,793 $ 44,118 $ 39,663 $ 34,539 $ 35,289
14,805 15,871 14,789 6,402 4,688 5,802
35,726 32,922 29,329 33,261 29,851 29,487
3.4 3.1 3.0 6.2 7.4 6.1
26,134 24,479 22,795 16,890 16,988 16,884
4,962 4,844 2,873 2,100 2,174 3,424
77,643 74,560 68,695 57,119 52,028 52,730
57,310 53,711 50,476 48,248 45,330 45,144
3,743 3,667 3,399 3,258 3,151 3,020
992 963 774 750 765 772
$ .85 $ .79 $ .76 $ .68 $ .50 $ .66
.44 .43 .39 .38 .36 .34
6.67 6.25 5.83 5.56 5.17 5.15
8,594,255 8,594,255 8,655,119 8,682,711 8,772,465 8,772,711
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Shareholders
The Gorman-Rupp Company
We have audited the accompanying consolidated balance sheets of The Gorman-Rupp
Company and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1994, appearing on pages 10
through 14. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
The Gorman-Rupp Company and subsidiaries at December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles.
As discussed in Note F to the consolidated financial statements, in 1992 the
Company changed its method of accounting for postretirement health benefits.
/S/ ERNST & YOUNG LLP
Cleveland, Ohio
February 3, 1995