Gorman Rupp Co. Q3 2024: Sales Dip Slightly, Net Income Declines

TL;DR

GRC sales down slightly YTD, net income also down. Hedging with interest rate swaps.

AI Summary

Gorman Rupp Co. reported its Q3 2024 results, with net sales for the nine months ending September 30, 2024, reaching $496.7 million, a slight decrease from $500.1 million in the same period of 2023. The company's net income for the nine months was $51.6 million, down from $54.1 million in the prior year. The filing also details their use of interest rate swaps for hedging purposes.

Why It Matters

This filing provides insight into Gorman Rupp's financial performance and operational health, which can influence investor confidence and market perception of the industrial pump manufacturer.

Risk Assessment

Risk Level: low — The filing is a standard quarterly report with no immediately apparent major financial distress or significant negative events.

Key Numbers

• $496.7M — Net Sales (YTD) (Represents a slight decrease compared to the same period in 2023.)
• $51.6M — Net Income (YTD) (Shows a decrease from the prior year's nine-month period.)
• $500.1M — Net Sales (Prior Year YTD) (Benchmark for current year's sales performance.)
• $54.1M — Net Income (Prior Year YTD) (Benchmark for current year's net income performance.)

Key Players & Entities

• GORMAN RUPP CO (company) — Filer
• 20240930 (date) — Reporting period end date
• $496.7 million (dollar_amount) — Net sales for the nine months ending September 30, 2024
• $500.1 million (dollar_amount) — Net sales for the nine months ending September 30, 2023
• $51.6 million (dollar_amount) — Net income for the nine months ending September 30, 2024
• $54.1 million (dollar_amount) — Net income for the nine months ending September 30, 2023

FAQ

Filing Documents

• grc20240930_10q.htm (10-Q) — 1142KB
• ex_736877.htm (EX-31.1) — 12KB
• ex_736878.htm (EX-31.2) — 12KB
• ex_736879.htm (EX-32) — 6KB
• 0001437749-24-032214.txt ( ) — 4859KB
• grc-20240930.xsd (EX-101.SCH) — 42KB
• grc-20240930_def.xml (EX-101.DEF) — 268KB
• grc-20240930_lab.xml (EX-101.LAB) — 237KB
• grc-20240930_pre.xml (EX-101.PRE) — 294KB
• grc-20240930_cal.xml (EX-101.CAL) — 43KB
• grc20240930_10q_htm.xml (XML) — 727KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Statements of Income - Three months ended September 30, 2024 and 2023 - Nine months ended September 30, 2024 and 2023 3 Consolidated Statements of Comprehensive Income - Three months ended September 30, 2024 and 2023 - Nine months ended September 30, 2024 and 2023 3 Consolidated Balance Sheets - September 30, 2024 and December 31, 2023 4 Consolidated Statements of Cash Flows - Nine months ended September 30, 2024 and 2023 5 Consolidated Statements of Equity - Nine months ended September 30, 2024 and 2023 6

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 23 Item 4.

Controls and Procedures

Controls and Procedures 23

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 24 Item 1A.

Risk Factors

Risk Factors 24 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 25 Item 3. Defaults Upon Senior Securities 25 Item 4. Mine Safety Information 25 Item 5. Other Information 25 Item 6. Exhibits 26 EX-31.1 Section 302 Principal Executive Officer (PEO) Certification EX-31.2 Section 302 Principal Financial Officer (PFO) Certification EX-32 Section 1350 Certifications 2

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) THE GORMAN-RUPP COMPANY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands, except per share amounts) 2024 2023 2024 2023 Net sales $ 168,182 $ 167,456 $ 496,963 $ 498,946 Cost of products sold 115,521 119,322 341,828 353,631 Gross profit 52,661 48,134 155,135 145,315 Selling, general and administrative expenses 25,675 23,233 75,494 70,664 Amortization expense 3,101 3,026 9,278 9,398 Operating income 23,885 21,875 70,363 65,253 Interest expense ( 7,766 ) ( 10,475 ) ( 26,886 ) ( 31,147 ) Other income (expense), net ( 59 ) ( 416 ) ( 6,662 ) ( 1,385 ) Income before income taxes 16,060 10,984 36,815 32,721 Provision for income taxes 3,141 2,006 7,677 6,746 Net income $ 12,919 $ 8,978 $ 29,138 $ 25,975 Earnings per share $ 0.49 $ 0.34 $ 1.11 $ 0.99 Average number of shares outstanding 26,227,540 26,193,656 26,216,521 26,167,494 See notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2024 2023 2024 2023 Net income $ 12,919 $ 8,978 $ 29,138 $ 25,975 Other comprehensive income (loss), net of tax: Cumulative translation adjustments 1,866 ( 1,166 ) 677 ( 888 ) Cash flow hedging activity ( 2,612 ) 1,238 ( 770 ) 2,332 Pension and postretirement medical liability adjustments 255 226 228 592 Other comprehensive income (loss) ( 491 ) 298 135 2,036 Comprehensive income $ 12,428 $ 9,276 $ 29,273 $ 28,011 See notes to consolidated financial statements (unaudited). 3 THE GORMAN-RUPP COMPANY CONSOLIDATED BALANCE SHEETS (unaudited) (Dollars in thousands) September

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Amounts in tables in thousands of dollars, except for per share amounts) NOTE 1 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The Consolidated Financial Statements include the accounts of The Gorman-Rupp Company (the "Company" or "Gorman-Rupp") and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results. In the opinion of management of the Company, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024. For further information, refer to the Consolidated Financial Statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, from which related information herein has been derived. Accounting Standards Issued But Not Yet Adopted The Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new standard is intended to improve reportable segment disclosure requirements, primarily through additional and more detailed information about a reportable segment's expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods

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View this 10-Q filing on SEC EDGAR