1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For six months ended June 30, 1995 Commission File Number 1-6747
--------------- ------
The Gorman-Rupp Company
- ------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0253990
- ------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
305 Bowman Street, P. O. Box 1217, Mansfield, Ohio 44901
- ------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 755-1011
---------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to by 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
----- -----
Shares outstanding at June 30, 1995 -----
common, without par value, 8,580,820
Page 1 of 7 pages
2
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
1995 1994 1995 1994
--------- --------- --------- ---------
INCOME
Net sales $37,845 $34,003 $74,069 $72,121
Other income 141 132 261 236
--------- --------- --------- ---------
TOTAL INCOME 37,986 34,135 74,330 72,357
DEDUCTIONS FROM INCOME
Cost of products sold 28,575 24,631 55,499 53,017
Selling, general and
administrative expenses 5,748 5,286 11,068 10,194
--------- --------- --------- ---------
TOTAL DEDUCTIONS 34,323 29,917 66,567 63,211
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 3,663 4,218 7,763 9,146
Income taxes 1,509 1,603 3,101 3,563
--------- --------- --------- ---------
NET INCOME $2,154 $2,615 $4,662 $5,583
========= ========= ========= =========
* Net Income Per Share $0.25 $0.30 $0.54 $0.65
* Dividends Paid Per Share $0.13 $0.12 $0.26 $0.24
* Average Shares Outstanding 8,584,100 8,579,633 8,581,414 8,579,633
* Reflects the 3 for 2 stock split effective October 27, 1994
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
Six Months Ended
June 30
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES: --------- ---------
Net income $4,662 $5,583
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,562 2,157
Changes in operating assets and liabilities (1,965) (2,165)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (3,002) (3,167)
Other 79 (89)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (2,232) (2,059)
Change in treasury shares 33 0
Borrowings from (payments to) bank (168) (897)
NET INCREASE (DECREASE)IN CASH --------- ---------
AND CASH EQUIVALENTS (31) (637)
CASH AND CASH EQUIVALENTS:
Beginning of year 3,062 2,782
--------- ---------
June 30 $3,031 $2,145
========== ==========
2
3
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
June 30 December 31
1995 1994
ASSETS --------- ---------
CURRENT ASSETS
Cash and cash equivalents $3,031 $3,062
Accounts receivable 30,204 22,772
Inventories 32,562 30,814
Other current assets and deferred income taxes 3,057 3,422
--------- ---------
TOTAL CURRENT ASSETS 68,854 60,070
OTHER ASSETS 702 651
DEFERRED INCOME TAXES 5,727 5,500
PROPERTY, PLANT AND EQUIPMENT 79,667 76,663
Less allowances for depreciation 38,305 35,784
--------- ---------
PROPERTY, PLANT AND EQUIPMENT - NET 41,362 40,879
--------- ---------
TOTAL ASSETS $116,645 $107,100
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $8,260 $5,781
Payrolls and related liabilities,
accrued expenses 9,132 6,853
Income taxes 653 257
Notes payable to banks 3,750 3,500
--------- ---------
TOTAL CURRENT LIABILITIES 21,795 16,391
LONG TERM DEBT 5,381 4,715
PENSION LIABILITY 1,932 1,512
POSTRETIREMENT HEALTH BENEFITS OBLIGATION 23,294 22,874
SHAREHOLDERS' EQUITY
Common shares, without par value
authorized - 14,000,000 shares
* outstanding - 8,580,820 shares in 1995 and
8,579,633 shares in 1994 (after deducting
treasury shares of 284,356 in 1995 and 285,543
in 1994) at stated capital amount 5,113 5,115
Retained earnings 60,028 57,566
Translation adjustments (898) (1,073)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 64,243 61,608
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $116,645 $107,100
========= =========
<FN>
* Reflects the 3 for 2 stock split effective October 27, 1994
3
4
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
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 the management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three
month period and six month period ended June 30, 1995 are not neces-
sarily indicative of results that may be expected for the year ending
December 31, 1995. For further information, refer to the consolidated
financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994.
NOTE B - INVENTORIES
The major components of inventories are as follows:
June 30 December 31
(Thousands of dollars) 1995 1994
--------- ---------
Raw materials and in-process $8,330 $7,883
Finished parts 20,959 19,834
Finished products 3,273 3,097
--------- ---------
Inventories $32,562 $30,814
========= =========
4
5
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Second Quarter 1995 vs Second Quarter 1994
- ------------------------------------------
Net sales were $37,845,000 in 1995 compared to $34,003,000 in 1994, an
increase of 11.3%. The increase was due to increased sales at the Mans-
field Division and the Patterson Pump Company.
Other income was $141,000 in 1995 compared to $132,000 in 1994. This
was a small change from the previous year.
Cost of products sold in 1995 was $28,575,000 compared to $24,631,000 in
1994. The largest factor in the increase was material needed to support
the increased sales. An increase in the medical insurance was the next
largest single item. As a percentage of net sales, cost of products
sold was 75.5% in 1995 compared to 72.4% in 1994. Some change in pro-
duct mix resulted in the higher percentage in 1995.
Selling, general and administrative expenses increased from $5,286,000
in 1994 to $5,748,000 in 1995 with increases in consulting fees and
interest being the largest reasons for the increase.
Income before income taxes was $3,663,000 in 1995 compared to $4,218,000
in 1994, a decrease of $555,000. Income tax expense decreased from
$1,603,000 in 1994 to $1,509,000 in 1995, primarily as a result of the
decrease in profit. The effective tax rate was 41.2% in 1995 compared
to 38.0% in 1994. This increase is partially due to an increase in
state and local income taxes.
Net income in 1995 of $2,154,000 decreased $461,000 from $2,615,000 in
1994. As a percent of net sales, net income was 5.7% in 1995 and 7.7%
in 1994. Net income per share was $.25 in 1995, a decrease of $.05
from the $.30 in 1994.
5
6
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
Six Months 1995 vs Six Months 1994
- ----------------------------------
Net sales were $74,069,000 in 1995, an increase of $1,948,000 or 2.7%
over the $72,121,000 in 1994. Most of the increase was due to increased
sales at the Mansfield Division.
Other income was $261,000 in 1995 compared to $236,000 in 1994. This
was a similiar amount for both years.
Cost of products sold in 1995 was $55,499,000 compared to $53,017,000 in
1994. The largest factor in the increase was material needed to support
the increased sales. An increase in the medical insurance was the next
largest single item. As a percentage of net sales, cost of products
sold was 74.9% in 1995 compared to 73.5% in 1994. Some change in pro-
duct mix resulted in the higher percentage in 1995.
Selling, general and administrative expenses increased from $10,194,000
in 1994 to $11,068,000 in 1995 with increases in consulting fees and
interest being the largest reasons for the increase.
Income before income taxes was $7,763,000 in 1995 compared to $9,146,000
in 1994, a decrease of $1,383,000. Income tax expense decreased from
$3,563,000 in 1994 to $3,101,000 in 1995, primarily as a result of the
decrease in profit. The effective income tax rate was 39.9% in 1995
compared to 39.0% in 1994.
Net income of $4,662,000 in 1995 was down $921,000 from $5,583,000 in
1994. As a percent of net sales, net income was 6.3% in 1995 and 7.7%
in 1994. Net income per share was $.54 in 1995, a decrease of $.11
from the $.65 in 1994.
FINANCIAL CONDITION
- --------------------
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 3.2
to 1 at June 30, 1995 and 3.7 to 1 at December 31, 1994.
The Company presently has adequate working capital, adequate borrowing
capacity and a healthy liquidity position.
6
7
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, 1995 - 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
--------------------------------
(Registrant)
Date July 27, 1995 Kenneth E. Dudley
----------------------------
/S/ Kenneth E. Dudley
--------------------------------
(Signature)
Treasurer & Principal
Financial Officer
7