<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 nine months ended September 30, 1996 Commission File Number 1-6747
------------------ ------
The Gorman-Rupp Company
- ------------------------------------------------------------------------
(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
- ------------------------------------------------------------------------
(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 September 30, 1996 -----
common, without par value, 8,618,383
Page 1 of 7 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)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
---------- ---------- ---------- ----------
INCOME
<S> <C> <C> <C> <C>
Net sales $ 39,625 $ 38,231 $ 113,882 $ 112,300
Other income 131 206 372 467
---------- ---------- ---------- ----------
TOTAL INCOME 39,756 38,437 114,254 112,767
DEDUCTIONS FROM INCOME
Cost of products sold 29,489 29,021 85,931 84,520
Selling, general and
administrative expenses 5,661 5,383 17,483 16,451
---------- ---------- ---------- ----------
TOTAL DEDUCTIONS 35,150 34,404 103,414 100,971
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES . 4,606 4,033 10,840 11,796
Income taxes 1,695 1,515 4,134 4,616
---------- ---------- ---------- ----------
NET INCOME $ 2,911 $ 2,518 $ 6,706 $ 7,180
========== ========== ========== ==========
Net Income Per Share $ 0.34 $ 0.30 $ 0.78 $ 0.84
Dividends Paid Per Share $ 0.13 $ 0.13 $ 0.39 $ 0.39
Average Shares Outstanding 8,618,383 8,586,722 8,616,760 8,583,203
</TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1996 1995
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 6,706 $ 7,180
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,121 3,856
Changes in operating assets and liabilities 5,203 (1,186)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (2,926) (5,820)
Other (167) 615
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (3,361) (3,348)
Change in treasury shares 165 221
Repayments to bank (7,852) (2,376)
NET INCREASE (DECREASE)IN CASH ------- ------
AND CASH EQUIVALENTS 1,889 (858)
CASH AND CASH EQUIVALENTS:
Beginning of year 3,250 3,062
------- -------
September 30 $ 5,139 $ 2,204
======= =======
</TABLE>
2
<PAGE> 3
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
<TABLE>
<CAPTION>
September 30 December 31
1996 1995
------------ ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 5,139 $ 3,250
Accounts receivable 29,277 31,952
Inventories 33,546 32,833
Other current assets and deferred income taxes 3,882 3,366
------------ ------------
TOTAL CURRENT ASSETS 71,844 71,401
OTHER ASSETS 806 543
DEFERRED INCOME TAXES 5,708 5,709
PROPERTY, PLANT AND EQUIPMENT 84,076 81,789
Less allowances for depreciation 43,191 39,626
------------ ------------
PROPERTY, PLANT AND EQUIPMENT - NET 40,885 42,163
------------ ------------
TOTAL ASSETS $ 119,243 $ 119,816
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,027 $ 7,508
Payrolls and related liabilities,
accrued expenses 9,342 6,509
Income taxes 2,268 710
Notes payable to banks 0 5,000
------------ ------------
TOTAL CURRENT LIABILITIES 18,637 19,727
LONG TERM DEBT 4,336 7,188
PENSION LIABILITY 1,616 2,219
POSTRETIREMENT HEALTH BENEFITS OBLIGATION 23,891 23,442
SHAREHOLDERS' EQUITY
Common shares, without par value
at stated capital amount 5,141 5,133
Retained earnings 66,486 62,984
Translation adjustments (864) (877)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 70,763 67,240
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 119,243 $ 119,816
============ ============
Common shares - authorized 14,000,000 14,000,000
* Common shares - outstanding 8,618,383 8,607,672
Common shares - treasury 246,793 257,504
* After deducting treasury shares
</TABLE>
3
<PAGE> 4
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 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 nine month period ended September 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>
September 30 December 31
(Thousands of dollars) 1996 1995
------- -------
<S> <C> <C>
Raw materials and in-process $11,071 $10,836
Finished parts 18,847 18,446
Finished products 3,628 3,551
------- -------
Inventories $33,546 $32,833
======= =======
</TABLE>
4
<PAGE> 5
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Third Quarter 1996 vs Third Quarter 1995
- ------------------------------------------
Net sales were $39,625,000 in 1996 compared to $38,231,000 in 1995, an increase
of 3.6%. Most of the increase was due to increased sales at the Mansfield
Division and the Patterson Pump Company.
Other income was $131,000 in 1996 compared to $206,000 in 1995. The largest
reason for this decrease was a gain on a disposal of an asset in 1995 that was
not repeated in 1996.
Cost of products sold in 1996 was $29,489,000 compared to $29,021,000 in 1995.
The largest factor in the increase was payrolls with deprecation being the
second largest reason for the increase. As a percentage of net sales, cost of
products sold was 74.4% in 1996 compared to 75.9% in 1995. Some change in
product mix resulted in the higher gross margin in 1996.
Selling, general and administrative expenses increased from $5,383,000 in 1995
to $5,661,000 in 1996 with increases in payrolls being the largest single reason
for the increase.
Income before income taxes was $4,606,000 in 1996 compared to $4,033,000 in
1995, an increase of $573,000. Income tax expense increased from $1,515,000 in
1995 to $1,695,000 in 1996, primarily as a result of the increase in profit. The
effective tax rate was 36.8% in 1996 compared to 37.6% in 1995.
Net income in 1996 of $2,911,000 increased $393,000 from $2,518,000 in 1995. As
a percent of net sales, net income was 7.3% in 1996 and 6.6% in 1995. Net income
per share was $.34 in 1996, an increase of $.04 from the $.30 in 1995.
5
<PAGE> 6
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Nine Months 1996 vs Nine Months 1995
- ------------------------------------
Net sales were $113,882,000 in 1996, an increase of $1,582,000 or 1.4% over the
$112,300,000 in 1995. Most of the increase was due to increased sales at the
Mansfield Division.
Other income was $372,000 in 1996 compared to $467,000 in 1995. The largest
reasons for this decrease was a decrease in rental income, a disposal of an
asset in 1995 that was not repeated in 1996 and a decrease in interest income.
Cost of products sold in 1996 was $85,931,000 compared to $84,520,000 in 1995.
The largest factor in the increase was material needed to support the increased
sales. An increase in depreciation was the next largest single item. As a
percentage of net sales, cost of products sold was 75.5% in 1996 compared to
75.3% in 1995. Some change in product mix resulted in the higher percentage in
1996.
Selling, general and administrative expenses increased from $16,451,000 in 1995
to $17,483,000 in 1996 with increases in advertising expenses and payrolls being
the largest reasons for the increase.
Income before income taxes was $10,840,000 in 1996 compared to $11,796,000 in
1995, a decrease of $956,000. Income tax expense decreased from $4,616,000 in
1995 to $4,134,000 in 1996, primarily as a result of the decrease in profit. The
effective income tax rate was 38.1% in 1996 compared to 39.1% in 1995.
Net income of $6,706,000 in 1996 was down $474,000 from $7,180,000 in 1995. As a
percent of net sales, net income was 5.9% in 1996 and 6.4% in 1995. Net income
per share was $.78 in 1996, a decrease of $.06 from the $.84 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 3.9 to 1 at September 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
September 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 October 24, 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
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 5,139
<SECURITIES> 0
<RECEIVABLES> 29,619
<ALLOWANCES> 342
<INVENTORY> 33,546
<CURRENT-ASSETS> 71,844
<PP&E> 84,076
<DEPRECIATION> 43,191
<TOTAL-ASSETS> 119,243
<CURRENT-LIABILITIES> 18,637
<BONDS> 0
<COMMON> 5,141
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 119,243
<SALES> 113,882
<TOTAL-REVENUES> 114,254
<CGS> 85,931
<TOTAL-COSTS> 103,414
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 195
<INTEREST-EXPENSE> 245
<INCOME-PRETAX> 10,840
<INCOME-TAX> 4,134
<INCOME-CONTINUING> 6,706
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,706
<EPS-PRIMARY> .78
<EPS-DILUTED> .78
</TABLE>
