GORMAN RUPP CO — Interim / Quarterly Report 2001

Apr 25, 2001

10-Q 1 l87863ae10-q.htm THE GORMAN-RUPP COMPANY 10-Q The Gorman-Rupp Company Form 10-Q/qtr end 3-31-01 PAGEBREAK TOC

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II — OTHER INFORMATION
SIGNATURES

/TOC

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2001 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 incorporation or organization)	(I.R.S. Employer 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 be 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 March 31, 2001 — common, without par value, 8,565,553

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Table of Contents

link1 "PART I — FINANCIAL INFORMATION"

PART I — FINANCIAL INFORMATION THE GORMAN-RUPP COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands of dollars, except per share data)

link2 "CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)"

	Three Months Ended
	March 31
	2001	2000
INCOME
Net sales	$ 49,671	$ 49,024
Other income	262	170
TOTAL INCOME	49,933	49,194
DEDUCTIONS FROM INCOME
Cost of products sold	37,325	36,341
Selling, general and
administrative expenses	6,744	6,149
TOTAL DEDUCTIONS	44,069	42,490
INCOME BEFORE INCOME TAXES	5,864	6,704
Income taxes	2,260	2,604
NET INCOME	$ 3,604	$ 4,100
Basic And Diluted
Earnings Per Share	$ 0.42	$ 0.48
Dividends Paid Per Share	$ 0.16	$ 0.15
Average Shares Outstanding	8,565,553	8,592,049

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link2 "CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)"

THE GORMAN-RUPP COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands of dollars)

	Three Months Ended
	March 31
	2001	2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,604	$	4,100
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization	1,813		1,592
Changes in operating assets and liabilities	588		3,822
NET CASH PROVIDED BY OPERATING ACTIVITIES	6,005		9,514
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net	(1,191	)	(4,565	)
Change in short-term investments	0		(3,177	)
Other	0		38
NET CASH USED FOR INVESTING ACTIVITIES	(1,191	)	(7,704	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends	(1,370	)	(1,289	)
Repayments to bank	(6	)	(1,499	)
NET CASH USED FOR FINANCING ACTIVITIES	(1,376	)	(2,788	)
NET INCREASE (DECREASE) IN CASH	—		—
AND CASH EQUIVALENTS	3,438		(978	)
CASH AND CASH EQUIVALENTS:
Beginning of year	7,630		4,114
March 31	$ 11,068	$	3,136

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link2 "CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)"

THE GORMAN-RUPP COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands of dollars)

		March 31
		2001	2000
ASSETS
CURRENT ASSETS
	Cash and cash equivalents	$ 11,068	$	7,630
	Accounts receivable	32,113		28,851
	Inventories	40,325		39,760
	Other current assets and deferred income taxes	5,361		6,048
	TOTAL CURRENT ASSETS	88,867		82,289
OTHER ASSETS		2,075		1,593
DEFERRED INCOME TAXES		4,120		4,114
PROPERTY, PLANT AND EQUIPMENT		117,071		117,322
	Less allowances for depreciation	59,808		59,437
	PROPERTY, PLANT AND EQUIPMENT — NET	57,263		57,885
	TOTAL ASSETS	$ 152,325	$	145,881
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
	Accounts payable	$ 8,080	$	7,391
	Payrolls and related liabilities	3,471		3,331
	Accrued expenses	10,878		8,357
	Income taxes	1,485		0
	TOTAL CURRENT LIABILITIES	23,914		19,079
LONG TERM DEBT		3,207		3,413
POSTRETIREMENT BENEFITS		23,319		23,390
SHAREHOLDERS’ EQUITY
	Common shares, without par value
at stated capital amount	5,106		5,106
	Retained earnings	98,650		96,417
	Accumulated other comprehensive income	(1,871	)	(1,524	)
	TOTAL SHAREHOLDERS’ EQUITY	101,885		99,999
	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 152,325	$	145,881
	Common shares — authorized	14,000,000		14,000,000
*	Common shares — outstanding	8,565,553		8,565,553
	Common shares — treasury	299,623		299,623
*	After deducting treasury shares

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link2 "NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)"

THE GORMAN-RUPP COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2001

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, 2001 are not necessarily indicative of results that may be expected for the year ending December 31, 2001. 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, 2000.

NOTE B — INVENTORIES

The major components of inventories are as follows:

	March 31	December 31
(Thousands of dollars)	2001	2000
Raw materials and in-process	$ 26,266	$ 25,898
Finished parts	11,306	11,148
Finished products	2,753	2,714
	$ 40,325	$ 39,760

NOTE C — COMPREHENSIVE INCOME

During the first quarter of 2001 and 2000, total comprehensive income amounted to $3,257,000 and $4,087,000.

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link2 "MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS"

THE GORMAN-RUPP COMPANY AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

First Quarter 2001 vs First Quarter 2000

Net sales were $49,671,000 in 2001, an increase of $647,000 or 1.3% from the $49,024,000 in 2000. Most of the increase was due to increased sales of pumps and fabricated turbine diffusers.

Other income was $262,000 in 2001 compared to $170,000 in 2000. Most of this increase was a result of increased currency exchange gains.

Cost of products sold in 2001 was $37,325,000 compared to $36,341,000 in 2000. The increase was primarily due to the use of materials to support the increased sales. Increases in payroll related expenses and health insurance were other major contributors to the increase. Heating costs were considerably higher than last year. As a percent of net sales, cost of products sold in 2001 was 75.1% compared to 74.1% in 2000.

Selling, general and administrative expenses increased to $6,744,000 in 2001 from $6,149,000 in 2000 principally due to an increase in advertising expenses. These expenses were unusually low in 2000.

Income before income taxes was $5,864,000 in 2001 compared to $6,704,000 in 2000, a decrease of $840,000. Income tax expense decreased from $2,604,000 in 2000 to $2,260,000 in 2001, primarily as a result of the decrease in profit. The effective income tax rate was 38.5% in 2001 and 38.8% in 2000.

Net income in 2001 of $3,604,000 decreased $496,000 from $4,100,000 in 2000. As a percent of net sales, net income was 7.3% in 2001 and 8.4% in 2000. Net income per share was $.42 in 2001, a decrease of $.06 from $.48 in 2000.

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 3.7 to 1 at March 31, 2001 and 4.3 to 1 at December 31, 2000.

The Company presently has adequate working capital, adequate borrowing capacity and a healthy liquidity position.

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link1 "PART II — OTHER INFORMATION"

PART II — OTHER INFORMATION THE GORMAN-RUPP COMPANY AND SUBSIDIARIES

Item 6.
(a)	Exhibits — 27 Financial Data Schedule
(b)	Reports filed on Form 8-K during the Quarter Ended March 31, 2000 — None

link1 "SIGNATURES"

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	April 25, 2001
	By:	/S/Kenneth E. Dudley
		Kenneth E. Dudley Treasurer & Principal Financial Officer

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