<PAGE> 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, 1996 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, 1996 -----
common, without par value, 8,618,383
Page 1 of 7 pages
<PAGE> 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)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
INCOME ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 36,251 $ 37,845 $ 74,257 $ 74,069
Other income 125 141 241 261
---------- ---------- ---------- ----------
TOTAL INCOME 36,376 37,986 74,498 74,330
DEDUCTIONS FROM INCOME
Cost of products sold 27,333 28,575 56,442 55,499
Selling, general and
administrative expenses 6,013 5,748 11,822 11,068
---------- ---------- ---------- ----------
TOTAL DEDUCTIONS 33,346 34,323 68,264 66,567
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 3,030 3,663 6,234 7,763
Income taxes 1,209 1,509 2,439 3,101
---------- ---------- ---------- ----------
NET INCOME $ 1,821 $ 2,154 $ 3,795 $ 4,662
========== ========== ========== ==========
Net Income Per Share $ 0.21 $ 0.25 $ 0.44 $ 0.54
Dividends Paid Per Share $ 0.13 $ 0.13 $ 0.26 $ 0.26
Average Shares Outstanding 8,618,383 8,584,100 8,615,939 8,581,414
</TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES: ------- -------
<S> <C> <C>
Net income $ 3,795 $ 4,662
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,749 2,562
Changes in operating assets and liabilities (2,620) (1,965)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (1,645) (3,002)
Other (58) 79
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (2,240) (2,232)
Change in treasury shares 165 33
Repayments to bank (1,672) (168)
NET DECREASE IN CASH ------- -------
AND CASH EQUIVALENTS (1,526) (31)
CASH AND CASH EQUIVALENTS:
Beginning of year 3,250 3,062
------- -------
June 30 $ 1,724 $ 3,031
======= =======
</TABLE>
2
<PAGE> 3
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
ASSETS --------- ---------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,724 $ 3,250
Accounts receivable 28,149 31,952
Inventories 32,862 32,833
Other current assets and deferred income taxes 2,967 3,366
--------- ---------
TOTAL CURRENT ASSETS 65,702 71,401
OTHER ASSETS 593 543
DEFERRED INCOME TAXES 5,709 5,709
PROPERTY, PLANT AND EQUIPMENT 83,258 81,789
Less allowances for depreciation 42,187 39,626
--------- ---------
PROPERTY, PLANT AND EQUIPMENT - NET 41,071 42,163
--------- ---------
TOTAL ASSETS $ 113,075 $ 119,816
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 6,941 $ 7,508
Payrolls and related liabilities,
accrued expenses 8,058 6,509
Income taxes 664 710
Notes payable to banks 0 5,000
--------- ---------
TOTAL CURRENT LIABILITIES 15,663 19,727
LONG TERM DEBT 3,000 7,188
PENSION LIABILITY 1,707 2,219
POSTRETIREMENT HEALTH BENEFITS OBLIGATION 23,741 23,442
SHAREHOLDERS' EQUITY
Common shares, without par value
authorized - 14,000,000 shares
outstanding - 8,618,383 shares in 1996 and
8,580,820 shares in 1995 (after deducting
treasury shares of 246,793 in 1996 and
284,356 in 1995) at stated capital amount 5,141 5,133
Retained earnings 64,696 62,984
Translation adjustments (873) (877)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 68,964 67,240
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 113,075 $ 119,816
========= =========
</TABLE>
3
<PAGE> 4
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
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, 1996 are not necessarily
indicative of results that may be expected for the year ending December 31,
1996. 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, 1995.
NOTE B - INVENTORIES
The major components of inventories are as follows:
<TABLE>
<CAPTION>
June 30 December 31
(Thousands of dollars) 1996 1995
------- -------
<S> <C> <C>
Raw materials and in-process $10,846 $10,836
Finished parts 18,462 18,446
Finished products 3,554 3,551
------- -------
Inventories $32,862 $32,833
======= =======
</TABLE>
4
<PAGE> 5
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Second Quarter 1996 vs Second Quarter 1995
- ------------------------------------------
Net sales were $36,251,000 in 1996 compared to $37,845,000 in 1995, a decrease
of 4.2%. The decrease was due to decreased sales volume at the Mansfield
Division and Patterson Pump Company.
Other income was $125,000 in 1996 compared to $141,000 in 1995. This was a small
change from the previous year.
Cost of products sold in 1996 was $27,333,000 compared to $28,575,000 in 1995.
The largest factor in the decrease was material needed to support the decreased
sales. A decrease in the medical insurance was the next largest single item. As
a percentage of net sales, cost of products sold was 75.4% in 1996 compared to
75.5% in 1995.
Selling, general and administrative expenses increased from $5,748,000 in 1995
to $6,013,000 in 1996 with increases in advertising expenses and consulting fees
being the largest reasons for the increase.
Income before income taxes was $3,030,000 in 1996 compared to $3,663,000 in
1995, a decrease of $633,000. Income tax expense decreased from $1,509,000 in
1995 to $1,209,000 in 1996, primarily as a result of the decrease in profit. The
effective tax rate was 39.9% in 1996 compared to 41.2% in 1995.
Net income in 1996 of $1,821,000 decreased $333,000 from $2,154,000 in 1995. As
a percent of net sales, net income was 5.0% in 1996 and 5.7% in 1995. Net income
per share was $.21 in 1996, a decrease of $.04 from the $.25 in 1995.
5
<PAGE> 6
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
Six Months 1996 vs Six Months 1995
- ----------------------------------
Net sales were $74,257,000 in 1996, an increase of $188,000 or 0.3% over the
$74,069,000 in 1995. Most of the increase was due to increased sales volume at
the Mansfield Division offset by decreased sales volume at Patterson Pump
Company.
Other income was $241,000 in 1996 compared to $261,000 in 1995. This was a
similiar amount for both years.
Cost of products sold in 1996 was $56,442,000 compared to $55,499,000 in 1995.
The largest factor in the increase was material needed to support the increased
sales. As a percentage of net sales, cost of products sold was 76.0% in 1996
compared to 74.9% in 1995. Some change in product mix resulted in the higher
percentage in 1996.
Selling, general and administrative expenses increased from $11,068,000 in 1995
to $11,822,000 in 1996 with an increase in advertising expense being the largest
reason for the increase.
Income before income taxes was $6,234,000 in 1996 compared to $7,763,000 in
1995, a decrease of $1,529,000. Income tax expense decreased from $3,101,000 in
1995 to $2,439,000 in 1996, primarily as a result of the decrease in profit. The
effective income tax rate was 39.1% in 1996 compared to 39.9% in 1995.
Net income of $3,795,000 in 1996 was down $867,000 from $4,662,000 in 1995. As a
percent of net sales, net income was 5.1% in 1996 and 6.3 in 1995. Net income
per share was $.44 in 1996, a decrease of $.10 from the $.54 in 1995.
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 4.2 to 1 at June 30, 1996 and
3.6 to 1 at December 31, 1995.
The Company presently has adequate working capital, adequate borrowing capacity
and a healthy liquidity position.
6
<PAGE> 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, 1996 - 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 19, 1996 Kenneth E. Dudley
----------------------
/S/ Kenneth E. Dudley
------------------------------
(Signature)
Treasurer & Principal
Financial Officer
7
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000042682
<NAME> THE GORMAN-RUPP COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,724
<SECURITIES> 0
<RECEIVABLES> 28,477
<ALLOWANCES> 328
<INVENTORY> 32,862
<CURRENT-ASSETS> 65,702
<PP&E> 83,258
<DEPRECIATION> 42,187
<TOTAL-ASSETS> 113,075
<CURRENT-LIABILITIES> 15,663
<BONDS> 0
<COMMON> 5,141
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 113,075
<SALES> 74,257
<TOTAL-REVENUES> 74,498
<CGS> 56,442
<TOTAL-COSTS> 68,264
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 130
<INTEREST-EXPENSE> 203
<INCOME-PRETAX> 6,234
<INCOME-TAX> 2,439
<INCOME-CONTINUING> 3,795
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,795
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
