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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 three months ended March 31, 1997 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 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
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Shares outstanding at March 31, 1997 -----
common, without par value, 8,618,383
Page 1 of 6 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
March 31
1997 1996
INCOME ---------- ----------
Net sales $ 40,530 $ 38,006
Other income 139 116
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TOTAL INCOME 40,669 38,122
DEDUCTIONS FROM INCOME
Cost of products sold 30,623 29,109
Selling, general and
administrative expenses 5,667 5,809
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TOTAL DEDUCTIONS 36,290 34,918
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INCOME BEFORE INCOME TAXES 4,379 3,204
Income taxes 1,643 1,230
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NET INCOME $ 2,736 $ 1,974
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Net Income Per Share $ 0.32 $ 0.23
Dividends Paid Per Share $ 0.14 $ 0.13
Average Shares Outstanding 8,618,383 8,613,496
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
Three Months Ended
March 31
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES: ------- -------
Net income $ 2,736 $ 1,974
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,395 1,381
Changes in operating assets and liabilities (471) 4,131
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (1,713) (683)
Other (360) 189
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (1,207) (1,120)
(Repayments to) Borrowings from bank 1,083 (7,516)
NET (DECREASE) INCREASE IN CASH -- --
AND CASH EQUIVALENTS 1,463 (1,644)
CASH AND CASH EQUIVALENTS:
Beginning of year 4,284 3,250
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March 31 $ 5,747 $ 1,606
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
March 31 December 31
1997 1996
ASSETS ----------- ---------
CURRENT ASSETS
Cash and cash equivalents $ 5,747 $ 4,284
Accounts receivable 31,473 29,894
Inventories 34,437 33,621
Other current assets and deferred income taxes 3,866 4,127
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TOTAL CURRENT ASSETS 75,523 71,926
OTHER ASSETS 856 786
DEFERRED INCOME TAXES 4,392 4,389
PROPERTY, PLANT AND EQUIPMENT 86,212 84,667
Less allowances for depreciation 45,445 44,118
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PROPERTY, PLANT AND EQUIPMENT - NET 40,767 40,549
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TOTAL ASSETS $ 121,538 $ 117,650
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 5,862 $ 6,659
Payrolls and related liabilities,
accrued expenses 8,221 7,439
Income taxes 2,450 1,101
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TOTAL CURRENT LIABILITIES 16,533 15,199
LONG TERM DEBT 4,879 3,796
PENSION LIABILITY 1,774 1,921
POSTRETIREMENT HEALTH BENEFITS OBLIGATION 24,163 23,997
SHAREHOLDERS' EQUITY
Common shares, without par value
authorized - 14,000,000 shares
outstanding - 8,618,383 shares in 1997 and
8,618,383 shares in 1996 (after deducting
treasury shares of 246,793 in 1997 and 246,793
in 1996) at stated capital amount 5,141 5,141
Retained earnings 70,032 68,502
Translation adjustments (984) (906)
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TOTAL SHAREHOLDERS' EQUITY 74,189 72,737
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 121,538 $ 117,650
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1997
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 month
period ended March 31, 1997 are not necessarily indicative of results that may
be expected for the year ending December 31, 1997. 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, 1996.
NOTE B - INVENTORIES
The major components of inventories are as follows:
March 31 December 31
(Thousands of dollars) 1997 1996
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Raw materials and in-process $17,201 $16,793
Finished parts 13,676 13,352
Finished products 3,560 3,476
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$34,437 $33,621
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
First Quarter 1997 vs First Quarter 1996
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Net sales were $40,530,000 in 1997, an increase of $2,524,000 or 6.6% from the
$38,006,000 in 1996. Most of the increase was due to increased sales at the
Patterson subsidiary.
Other income was $139,000 in 1997 compared to $116,000 in 1996.
Cost of products sold in 1997 was $30,623,000 compared to $29,109,000 in 1996.
The increase was primarily due to the use of materials to build additional
product. As a percentage of net sales, cost of products sold in 1997 was 75.6%
compared to 76.6% in 1996. The reduction is principally the result of changes in
product mix and manufacturing efficiencies.
Selling, general and administrative expenses decreased to $5,667,000 in 1997
from $5,809,000 in 1996 with a decrease in advertising expense being the largest
factor. This was a result of a large trade show that is attended every three
years. This show was attended in 1996 and there was no show in 1997.
Income before income taxes was $4,379,000 in 1997 compared to $3,204,000 in
1996, an increase of $1,175,000. Income tax expense increased from $1,230,000 in
1996 to $1,643,000 in 1997, primarily as a result of an increase in profit. The
effective income tax rate was 37.5% in 1997 compared to 38.4% in 1996.
Net income in 1997 of $2,736,000 increased $762,000 from $1,974,000 in 1996. As
a percent of net sales, net income was 6.8% in 1997 and 5.2% in 1996. Net income
per share was $.32 in 1997, an increase of $.09 from $.23 in 1996.
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 4.6 to 1 at March 31, 1997
and 4.7 to 1 at December 31, 1996.
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
March 31, 1997 - 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 April 30, 1997 Kenneth E. Dudley
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/S/ Kenneth E. Dudley
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(Signature)
Treasurer & Principal
Financial Officer
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