<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 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 Identification No.)
incorporation or organization)
305 Bowman St., Mansfield, Ohio 44903
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 755-1011
--------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on which registered
Common Shares, without par value American Stock Exchange
- -------------------------------- -----------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
-----------------------------------------------------------
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, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in the definitive proxy statement incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
X
- ---
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant. The aggregate market value is computed by reference to the price
at which the stock was sold as of February 29, 1996. $62,526,001
-----------
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock as of February 29, 1996.
Common Shares, without par value--8,614,059
-------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1995 Annual Report to Shareholders incorporated by reference
into Part II (Item 5-8).
Portions of Notice of 1996 Annual Meeting of Shareholders and related Proxy
Statement incorporated by reference into Part III (Items 10-13).
**************
The Exhibit Index is located at Page 13
<PAGE> 2
PART I
ITEM 1. BUSINESS
Registrant ("Gorman-Rupp" or the "Company") designs, manufactures and sells
pumps and related equipment (pump and motor controls) for use in construction,
industrial, petroleum, agricultural, water and wastewater, original equipment,
fire, military and other liquid-handling applications.
PRODUCTS
The principal products of the Company are pumps and fluid control products. (The
Company operates principally in one business segment, the manufacture and sale
of pumps and other fluid control equipment.) The following table sets forth, for
the years 1993 through 1995, the total net sales, income before income taxes and
identifiable assets ($000 omitted) of the Company.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net Sales $149,489 $137,508 $131,535
Income Before Income Taxes 15,051 14,952 13,858
Identifiable Assets 119,816 107,100 98,706
</TABLE>
The Company's product line is composed of pump models ranging in rated capacity
from less than one gallon per minute up to 200,000 gallons per minute. The types
of pumps which the Company produces include self priming centrifugal, standard
centrifugal, magnetic drive centrifugal, rotary gear, diaphragm, bellows and
oscillating.
The pumps have drives that range from 1/35 horsepower electric motors up to much
larger electric motors or internal combustion engines. Many of the larger units
comprise encased, fully integrated sewage pumping stations. In certain cases,
units are designed for the inclusion of customer-supplied drives.
The Company's larger pumps are sold principally for use in the construction,
industrial, sewage and waste handling fields; for pumping refined petroleum
products, including the ground refueling of aircraft; for agricultural
applications; and for fire fighting.
Many of the Company's smallest pumps are sold to customers for incorporation
into such products as X-ray processing equipment; gas air conditioning
equipment; office copy machines; chemical feeding, instrumentation and ice cube
making machinery; photographic processing and soft drink dispensing equipment;
laser cooling applications; graphic arts equipment; and floor cleaning
equipment.
In 1992 the Company introduced a positive displacement rotary gear pump line
designed for pumping viscous liquids such as paint, tar and glue, as well as
solvents and chemicals of lower viscosity. The product line was marketed widely
beginning in 1993.
2
<PAGE> 3
PART I--CONTINUED
ITEM 1. BUSINESS--CONTINUED
An "Auto-Start" pump allowing for unattended operation, pumping units featuring
two or more pumps and motors, and pump and motor controls for industrial and
residential wastewater applications were also introduced in 1992.
The Company expanded its metering pump lines in 1992 with the introduction of
additional mini and mini-compact bellows metering pumps. A smaller version, the
micro-metering pump, was developed primarily for the photographic processing
market.
Although no new significant products have been introduced in 1995, 1994 or 1993,
the Company continues to emphasize product development. Several of the Company's
existing products, which have been designed with added features, have been
expanded to various applications. The Company continues to penetrate
international markets principally by its aggressive response to worldwide pump
needs.
MARKETING
Except for government, component and export sales, the Company's pumps are
marketed in the United States and Canada through a network of about 1,000
distributors, through manufacturers' representatives (for sales to many original
equipment manufacturers) and by the Company's wholly owned subsidiary,
Gorman-Rupp of Canada Limited. Government and component sales are handled
directly by the Company; and export sales are made through the Company's wholly
owned subsidiary, The Gorman-Rupp International Company, as well as through
foreign distributors and representatives. During 1995, there were no shipments
to any single customer greater than 10% of total net sales. Approximately 11% of
all 1995 sales were made to customers outside North America.
COMPETITION
The pump business is highly competitive. Gorman-Rupp estimates that 80 other
companies sell pumps and pump units which compete in one or more of the
industries and applications in which comparable products of the Company are
utilized. Many pumps are specifically designed and engineered for a particular
customer's application. The Company believes that proper application, product
performance and service are the principal methods of competition, and attributes
its success to its emphasis in these areas.
PURCHASING AND PRODUCTION
Virtually all materials, supplies, components and accessories used by the
Company in the fabrication of its products, including all castings (for which
the patterns are made and owned by the Company), structural steel, bar stock,
motors, solenoids, engines, seals, and phenolic, polyethylene and rubber
components, are purchased by the Company from other suppliers and manufacturers.
No purchases are made under long-term contracts and the Company is not dependent
upon a single source for any materials, supplies, components or accessories
which are of material importance to its business.
3
<PAGE> 4
PART I--CONTINUED
ITEM 1. BUSINESS--CONTINUED
PURCHASING AND PRODUCTION--CONTINUED
The Company purchases motors for its polypropylene bellows pumps and its
magnetic drive pumps from several alternate vendors and motor components for its
large submersible pumps from a limited number of suppliers. Small motor
requirements are also currently sourced from alternate suppliers.
The other production operations of the Company consist of the machining of
castings, the cutting and shaping of bar stock and structural members, the
manufacture of a few minor components, and the assembling, painting and testing
of its products. Virtually all of the Company's products are tested prior to
shipment.
OTHER ASPECTS
As of December 31, 1995, the Company employed approximately 960 persons, of whom
approximately 570 were hourly employees. The Company has no collective
bargaining agreements, has never experienced a strike and considers its labor
relations to be satisfactory.
Although the Company owns a number of patents, and several of them are important
to its business, Gorman-Rupp believes that the business of the Company is not
materially dependent upon any one or more patents.
As of December 31, 1995, the value of the Company's backlog of unfilled orders
was approximately $46,311,000, of which $23,759,000 was for the unfilled orders
of Patterson Pump Company. Approximately $45,141,000 is scheduled to be shipped
during 1996, with the balance ($1,170,000) to be shipped in 1997. At December
31, 1994, the value of the backlog of unfilled orders was approximately
$56,628,000.
ITEM 2. PROPERTIES
All of the production operations of the Company are conducted at its plants
located in Mansfield and Bellville, Ohio; St. Thomas, Ontario; Sand Springs,
Oklahoma; and Toccoa, Georgia. All of the Company's properties are owned in fee
without any material encumbrance. (In December 1995, the Company sold facilities
and 19 contiguous undeveloped acres, utilized by its former Durham Products
Division, located in Durham, North Carolina.) The Company also owns in fee an
approximately 26,000 square foot facility in Sparks, Nevada which comprises a
training center and warehouse space.
The Company's Ohio operations are principally located in facilities in
Mansfield. These facilities consist of five buildings containing approximately
682,200 square feet of floor space for production, office and warehousing
functions. The original portion of the largest production plant, consisting of
approximately 238,000 square feet located on a 26 acre site, was built in 1917
and has been expanded
4
<PAGE> 5
PART I--CONTINUED
ITEM 2. PROPERTIES--CONTINUED
on several occasions, the latest in 1973. Another production plant, also
situated on the 26 acre site, was built in 1968 and has been frequently
expanded, most recently in 1994. The 1994 expansion added approximately 37,600
square feet, including a modern testing facility. This plant currently comprises
approximately 134,200 square feet of floor space. A third plant, containing
approximately 215,000 square feet of floor space, located on a 5-1/2 acre site,
was purchased in 1975 and is used for most machining operations and storage of
raw materials. Its latest addition, consisting of 30,000 square feet of floor
space, was made in 1978. A small office building of approximately 11,500 square
feet was purchased in 1979 and houses a training facility and the Company's
personnel and advertising departments. In late 1982, the Company purchased a
building built in 1920 and located on 3.4 acres adjacent to the Company's 26
acre site. This acquisition, which was renovated in 1983, contains 83,500 square
feet and is being used for additional warehouse space.
The remainder of the Company's Ohio operations are conducted at two plants in
Bellville, which comprise approximately 107,500 square feet of floor space
situated on an 8.5 acre site. The initial portion of the larger plant,
containing approximately 93,200 square feet of floor space, was built in 1953
and has been expanded on several occasions, most recently in 1973-74. The
smaller facility, which contains approximately 14,300 square feet of floor
space, was acquired in 1984.
The plant in St. Thomas, Ontario has undergone five major expansions since it
was established in 1960. In 1986, a minor expansion of approximately 600 square
feet was added as a receiving and shipping area to improve materials handling.
This facility contains about 52,600 square feet of floor space and is situated
on an 11 acre site.
The Oklahoma facility, located on 4.5 acres of land, was purchased in 1977.
Manufacturing and warehousing facilities are located in a 26,700 square foot
building, originally built in 1973 and expanded in 1978, 1981, 1982 and 1991. A
detached 2,200 square foot building is used for offices. In 1980, a contiguous
parcel of two acres of undeveloped land was purchased for future needs.
Patterson Pump Company, in Toccoa, Georgia, includes a 31 acre site with
buildings totaling approximately 165,900 square feet, with about 28,000 square
feet of office space and 137,900 square feet of manufacturing space. In 1989,
Patterson Pump Company completed an addition of 38,500 square feet to the
building for manufacturing purposes and razed an approximately 12,700 square
foot portion of the manufacturing facility. In 1992, the Company completed a
64,000 square foot addition to the manufacturing plant, including a modern
400,000 gallon testing facility. A 28,000 square foot office addition was
completed in 1993. Upon occupancy of the new building in 1993, the pre-existing
office space of 15,200 square feet was razed for additional parking space.
The Company considers its plants, machinery and equipment to be well maintained,
in good operating condition and adequate for the present uses and business
requirements of the Company.
5
<PAGE> 6
ITEM 3. LEGAL PROCEEDINGS
Gorman-Rupp is not currently engaged in any litigation which in the opinion of
the Company is material to its operations or assets.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this Form 10-K, no
matter was submitted to a vote of the Company's shareholders, through the
solicitation of proxies or otherwise.
********************
6
<PAGE> 7
PART I --CONTINUED
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3), the information regarding executive
officers called for by Item 401 of Regulation S-K and by Item 10 of this Form
10-K is set forth below.
<TABLE>
<CAPTION>
Date
Elected to
Name Age Officer Position
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James C. Gorman 71 Chairman and Chief Executive Officer 1964
John A. Walter 62 President and Chief Operating Officer 1989
K. Jack Bargahiser 63 Vice President Communications 1975
Jeffrey S. Gorman 43 Vice President; General Manager,
Mansfield Division 1989
Kenneth E. Dudley 58 Treasurer 1982
Robert E. Kirkendall 53 Corporate Secretary/Assistant Treasurer 1982
William D. Danuloff 48 Vice President Information Services 1991
</TABLE>
Except as noted, each of the above-named officers has held his executive
position with the Company for the past five years. Mr. J. C. Gorman has served
as the Company's Chief Executive Officer since 1964; in 1989, he also assumed
the office of Chairman and relinquished the office of President. Mr. Walter was
elected to the additional position of Chief Operating Officer in 1993; he served
as Vice President and General Manager of the Industries Division from 1978 until
1990. Mr. J. S. Gorman was elected Vice President and General Manager of the
Mansfield Division in 1989, after serving as Assistant General Manager from 1986
to 1988; he held the office of Corporate Secretary from 1982 to 1990. Mr.
Kirkendall was elected as Assistant Treasurer in 1982; he assumed the additional
office of Corporate Secretary in 1990. Mr. Danuloff was elected Vice President
Information Services in 1991, after serving as Director of Information Services
from 1981 to 1991.
Mr. J. S. Gorman is the son of Mr. J. C. Gorman. Otherwise, there is no family
relationship among any of the Executive Officers and Directors of the Company.
7
<PAGE> 8
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Attention is directed to the section "Ranges of Stock Prices" and the data
immediately below pertaining to the shareholder information reported by the
Transfer Agent on page 16 in the Company's 1995 Annual Report to Shareholders,
which are incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
Attention is directed to the section "Ten Year Summary of Selected Financial
Data" on pages 16 and 17 in the Company's 1995 Annual Report to Shareholders,
which is incorporated herein by this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Attention is directed to the section "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on page 15 in the Company's 1995
Annual Report to Shareholders, which is incorporated herein by this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Attention is directed to the Company's consolidated financial statements, the
notes thereto and the report of independent auditors thereon on pages 10-14, and
17, and to the section "Summary of Quarterly Results of Operations" on page 16,
in the Company's 1995 Annual Report to Shareholders, which are incorporated
herein by this reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has not changed its independent public accountants and there have
been no reportable disagreements with such accountants regarding accounting
principles or practices or financial disclosure matters.
8
<PAGE> 9
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
With respect to Directors, attention is directed to the section "Election of
Directors" in the Company's definitive Notice of 1996 Annual Meeting of
Shareholders and related Proxy Statement (filed pursuant to Regulation 14A not
later than 120 days after the end of the fiscal year covered by this Form 10-K),
which is incorporated herein by this reference.
With respect to executive officers, attention is directed to Part I of this Form
10-K.
ITEM 11. EXECUTIVE COMPENSATION
Attention is directed to the sections "Board of Directors and Directors'
Committees", "Executive Compensation", "Pension and Retirement Benefits",
"Salary Committee Report on Executive Compensation" and "Shareholder Return
Performance Presentation" in the Company's definitive Notice of 1996 Annual
Meeting of Shareholders and related Proxy Statement (filed pursuant to
Regulation 14A not later than 120 days after the end of the fiscal year covered
by this Form 10-K), which are incorporated herein by this reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Attention is directed to the sections "Principal Shareholders", "Election of
Directors" and "Shareholdings by Executive Officers" in the Company's definitive
Notice of 1996 Annual Meeting of Shareholders and related Proxy Statement (filed
pursuant to Regulation 14A not later than 120 days after the end of the fiscal
year covered by this Form 10-K), which are incorporated herein by this
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as disclosed in the footnote in the section "Shareholdings by Executive
Officers" and in footnote 2 in the section "Principal Shareholders" in the
Company's definitive Notice of 1996 Annual Meeting of Shareholders and related
Proxy Statement (filed pursuant to Regulation 14A not later than 120 days after
the end of the fiscal year covered by this Form 10-K), which are incorporated
herein by this reference, the Company has no relationships or transactions
required to be reported by Item 404 of Regulation S-K.
9
<PAGE> 10
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
With respect to the consolidated financial statements of the Registrant
and its subsidiaries, the following documents have been incorporated by
reference into this report:
(i) Consolidated balance sheets--December 31, 1995 and 1994
(ii) Consolidated statements of income--Years ended December 31,
1995, 1994 and 1993
(iii) Consolidated statements of shareholders' equity--Years ended
December 31, 1995, 1994 and 1993
(iv) Consolidated statements of cash flows--Years ended
December 31, 1995, 1994 and 1993
(v) Notes to consolidated financial statements
(vi) Report of independent auditors
2. Financial Statement Schedules
All financial statement schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable and, therefore, have been omitted.
3. Exhibits
The exhibits listed below are submitted in a separate section of this
report immediately following the Exhibit Index.
(3) (i) Articles of incorporation and (ii) By-laws
(4) Instruments defining the rights of security holders, including
indentures
(10) Material contracts
(13) Annual report to security holders
(21) Subsidiaries of the registrant
(23) Consents of experts and counsel
(24) Powers of attorney
(27) Financial data schedule
(b) No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
10
<PAGE> 11
PART IV--CONTINUED
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
*By ROBERT E. KIRKENDALL
--------------------------
Robert E. Kirkendall
Attorney-In-Fact
Date: March 22, 1996
11
<PAGE> 12
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
*JAMES C. GORMAN Chairman, Principal Executive
- ------------------------- Officer and Director
James C. Gorman
*KENNETH E. DUDLEY Treasurer and Principal Financial
- ------------------------- and Accounting Officer
Kenneth E. Dudley
*WILLIAM A. CALHOUN Director
- -------------------------
William A. Calhoun
*PETER B. LAKE Director
- -------------------------
Peter B. Lake
*BURTON PRESTON Director
- -------------------------
Burton Preston
Director
- -------------------------
John A. Walter
*JEFFREY S. GORMAN Director
- -------------------------
Jeffrey S. Gorman
*JAMES R. WATSON Director
- -------------------------
James R.Watson
*THOMAS E. HOAGLIN Director
- -------------------------
Thomas E. Hoaglin
*The undersigned, by signing his name hereto, does sign and execute this Annual
Report on Form 10-K on behalf of The Gorman-Rupp Company and on behalf of each
of the above-named Officers and Directors of The Gorman-Rupp Company pursuant to
Powers of Attorney executed by The Gorman-Rupp Company and by each such Officer
and Director and filed with the Securities and Exchange Commission.
March 22, 1996
By: /s/ ROBERT E. KIRKENDALL
------------------------
Robert E. Kirkendall
Attorney-In-Fact
12
<PAGE> 13
ANNUAL REPORT ON FORM 10-K
THE GORMAN-RUPP COMPANY
For the Year Ended December 31, 1995
EXHIBIT INDEX
EXHIBIT
(3) (4) Amended Articles of Incorporation, as amended *
(3) (4) Regulations *
(10) Form of Indemnification Agreement between the
Company and its Directors and Officers **
(13) Incorporated Portions of 1995 Annual Report
to Shareholders 14
(21) Subsidiaries of the Company 26
(23) Consent of Independent Auditors 27
(24) Powers of Attorney 28
(27) Financial Data Schedule 31
- ---------------------
* Incorporated herein by this reference from Exhibits (3) (4) of the
Company's Annual Report on Form 10-K for the year ended December 31,
1994.
** Incorporated herein by this reference from Exhibit (10) of the Company's
Annual Report on Form 10-K for the year ended December 31, 1994.
13
<PAGE> 1
EXHIBIT (13)
The Gorman-Rupp Company and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(Thousands of dollars, except per share amounts) YEAR ENDED DECEMBER 31,
INCOME 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net sales....................................... $149,489 $137,508 $131,535
Other income.................................... 1,304 511 589
-------- -------- --------
TOTAL INCOME............................... 150,793 138,019 132,124
Deductions from income:
Cost of products sold...................... 112,973 101,745 98,836
Selling, general and
administrative expenses................. 22,769 21,322 19,430
-------- -------- --------
135,742 123,067 118,266
-------- -------- --------
INCOME BEFORE
INCOME TAXES............................ 15,051 14,952 13,858
Income taxes.................................... 5,590 5,625 5,063
-------- -------- --------
NET INCOME ............................ $ 9,461 $ 9,327 $ 8,795
======== ======== ========
NET INCOME PER SHARE.................... $ 1.10 $ 1.09 $ 1.02
======== ======== ========
Average number of shares outstanding............ 8,587,466 8,579,633 8,588,493
</TABLE>
SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
CUMULATIVE
COMMON RETAINED TRANSLATION
SHARES EARNINGS ADJUSTMENTS TOTAL
------ -------- ----------- -----
<S> <C> <C> <C> <C>
BALANCES
DECEMBER 31, 1992...................... $5,124 $48,041 $ (406) $52,759
Net income............................. 8,795 8,795
Cash dividends - $.48 a share.......... (4,122) (4,122)
Purchase of 14,305 common
shares for treasury.................. (9) (266) (275)
Translation adjustment................. (246) (246)
------ ------- ------- -------
BALANCES
DECEMBER 31, 1993...................... 5,115 52,448 (652) 56,911
Net income............................. 9,327 9,327
Cash dividends - $.49 a share.......... (4,209) (4,209)
Translation adjustment................. (421) (421)
------ ------- ------- -------
BALANCES
DECEMBER 31, 1994...................... 5,115 57,566 (1,073) 61,608
Net income............................. 9,461 9,461
Cash dividends - $.52 a share.......... (4,466) (4,466)
Sale of 49,289 common shares
from treasury........................ 32 727 759
Purchase of 21,250 common shares
for treasury......................... (14) (304) (318)
Translation adjustment................. 196 196
------ ------- ------- -------
BALANCES
DECEMBER 31, 1995...................... $5,133 $62,984 $ (877) $67,240
====== ======= ======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE> 2
The Gorman-Rupp Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Thousands of dollars) DECEMBER 31,
ASSETS 1995 1994
-------- --------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents.......................... $ 3,250 $ 3,062
Accounts receivable................................ 31,952 22,772
Inventories........................................ 32,833 30,814
Deferred income taxes.............................. 2,557 2,644
Other current assets............................... 809 778
-------- --------
TOTAL CURRENT ASSETS........................ 71,401 60,070
OTHER ASSETS.......................................... 543 651
DEFERRED INCOME TAXES................................. 5,709 5,500
PROPERTY, PLANT AND EQUIPMENT
Land............................................ 898 1,004
Buildings....................................... 25,304 26,130
Machinery and equipment......................... 55,587 49,529
-------- --------
81,789 76,663
Less allowances for depreciation................ 39,626 35,784
-------- --------
PROPERTY, PLANT AND EQUIPMENT - NET ........ 42,163 40,879
-------- --------
$119,816 $107,100
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.................................. $ 7,508 $ 5,781
Payrolls and related liabilities.................. 2,156 2,340
Commissions payable............................... 2,027 1,450
Accrued expenses ................................. 2,326 3,063
Income taxes...................................... 710 257
Notes payable to banks ........................... 5,000 3,500
-------- --------
TOTAL CURRENT LIABILITIES.................. 19,727 16,391
LONG-TERM DEBT....................................... 7,188 4,715
PENSION LIABILITY.................................... 2,219 1,512
POSTRETIREMENT HEALTH BENEFITS OBLIGATION............ 23,442 22,874
SHAREHOLDERS' EQUITY
Common Shares, without par value:
Authorized - 14,000,000 shares;
Outstanding- 8,607,672 shares in 1995 and
8,579,633 shares in 1994 (after deducting
treasury shares of 257,504 in 1995 and
285,543 in 1994) at stated capital amount.. 5,133 5,115
Retained earnings................................. 62,984 57,566
Cumulative translation adjustments................ (877) (1,073)
-------- --------
TOTAL SHAREHOLDERS' EQUITY................. 67,240 61,608
-------- --------
$119,816 $107,100
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 3
The Gorman-Rupp Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
(Thousands of dollars) 1995 1994 1993
------- ------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................ $ 9,461 $ 9,327 $ 8,795
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................. 5,173 4,534 4,274
Gain on disposal of assets..................... (681) - -
Deferred income taxes.......................... (122) 22 (771)
Pension liability.............................. 707 448 512
Changes in operating assets and liabilities:
Accounts receivable.......................... (9,180) 1,114 (4,528)
Inventories.................................. (2,019) (5,200) (1,623)
Accounts payable............................. 1,727 (1,063) 1,265
Postretirement health benefits obligation.... 568 799 1,448
Other........................................ 357 (880) 408
------- ------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES.... 5,991 9,101 9,780
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net................................ (8,229) (8,553) (10,277)
Proceeds from sale of assets.......................... 2,478 - -
------- ------- --------
NET CASH USED FOR INVESTING ACTIVITIES....... (5,751) (8,553) (10,277)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends ....................................... (4,466) (4,209) (4,122)
Net borrowings from banks............................. 3,973 3,941 4,274
Sale of common shares from treasury................... 759 - -
Purchase of common shares for treasury................ (318) - (275)
------- ------- --------
NET CASH USED FOR FINANCING ACTIVITIES....... (52) (268) (123)
------- ------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS....................... 188 280 (620)
CASH AND CASH EQUIVALENTS:
Beginning of year..................................... 3,062 2,782 3,402
------- ------- --------
END OF YEAR .......................................... $ 3,250 $ 3,062 $ 2,782
======= ======= ========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 4
The Gorman-Rupp Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF MAJOR ACCOUNTING POLICIES
CONSOLIDATION: The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are stated on the
basis of cost. Depreciation is computed principally by the straight-line method
over the estimated useful lives of the assets. The estimated useful life is
primarily 30 years for buildings and ranges from 5 to 12 years for machinery and
equipment.
STATEMENT OF CASH FLOWS: The Company considers highly liquid, short-term
investments to be cash equivalents.
INVENTORIES: Inventories are stated at the lower of cost or market. The cost for
approximately 70% and 67% of inventories at December 31, 1995 and 1994,
respectively, is determined using the last-in, first-out (LIFO) method, with the
remainder determined using the first-in, first-out method.
BUSINESS SEGMENT INFORMATION: The Company operates principally in one business
segment, the manufacture and sale of pumps and other fluid control equipment.
Export sales comprised approximately 11%, 13% and 11% of net sales in 1995, 1994
and 1993, respectively.
CONCENTRATION OF CREDIT RISK: In 1995, there were no sales to any one customer
greater than 10% of total net sales. In 1994 and 1993 sales to two customers
were approximately 15% of total net sales. The Company generally does not
require collateral from its customers. The Company has generally had a good
collection history.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE B - INVENTORIES: The major components of inventories are as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Raw materials and in-process........ $10,836 $ 7,883
Finished parts...................... 18,446 19,834
Finished products................... 3,551 3,097
------- -------
$32,833 $30,814
======= =======
</TABLE>
The excess of replacement cost over LIFO cost is approximately $19,743,000 and
$18,758,000 at December 31, 1995 and 1994, respectively.
NOTE C - FINANCING ARRANGEMENTS: Under unsecured demand lines of credit with
banks, the Company may borrow up to $7.0 million with interest at the LIBOR rate
plus .75% or at alternative rates as selected by the Company. At December 31,
1995, $5.0 million was outstanding at a weighted average interest rate of 6.7%
($3.5 million at a weighted average interest rate of 7.0% in 1994).
The Company also has an unsecured revolving loan agreement which matures in May
1999 and provides for maximum borrowings of $8 million. $7.2 million and $4.7
million was outstanding at December 31, 1995 and 1994, respectively; $.9 million
covered outstanding letters of credit at December 31,1994; and the remainder in
each year was available for borrowing. Interest is payable quarterly at the
LIBOR rate plus .75% or at alternative rates as selected by the Company
(weighted average interest rate 6.7% and 7.0% at December 31, 1995 and 1994,
respectively). The agreement contains restrictive covenants including limits on
additional borrowings and maintenance of certain operating and financial ratios.
Interest expense was $602,000, $195,000, and $58,000 in 1995, 1994 and 1993,
respectively.
NOTE D - INCOME TAXES: The components of income before income taxes are as
follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
United States.............. $14,258 $14,724 $13,646
Canada..................... 793 228 212
------- ------- -------
$15,051 $14,952 $13,858
======= ======= =======
</TABLE>
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal.................. $4,669 $4,888 $5,110
Canadian................. 393 115 104
State and local.......... 650 600 620
------ ------ ------
5,712 5,603 5,834
Deferred................... (122) 22 (771)
------ ------ ------
$5,590 $5,625 $5,063
====== ====== ======
</TABLE>
The reasons for the difference between income tax expense and the amount
computed by applying the statutory federal income tax rate of 35% in 1995, 1994
and 1993 to income before income taxes are as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Income taxes at
statutory rate........ $5,268 $5,233 $4,850
Deferred benefit due to
change in federal rate - - (229)
State and local income
taxes, net of federal
tax benefit........... 423 390 363
Other...................... (101) 2 79
------ ------ ------
$5,590 $5,625 $5,063
====== ====== ======
</TABLE>
Deferred tax assets (liabilities) consist of the following:
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Current:
Inventories.............. $ 1,226 $ 1,292 $ 1,205
Accrued liabilities...... 1,331 1,352 1,537
------- ------- -------
2,557 2,644 2,742
Non-current:
Depreciation............. (3,883) (3,010) (2,465)
Postretirement health
benefits obligation... 9,002 8,692 8,393
Other.................... 590 (182) (504)
------- ------- -------
5,709 5,500 5,424
------- ------- -------
$ 8,266 $ 8,144 $ 8,166
======= ======= =======
</TABLE>
The Company made income tax payments of $5,600,000, $6,018,000, and $ 5,857,000
in 1995, 1994 and 1993, respectively.
<PAGE> 5
The Gorman-Rupp Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE E - PENSIONS: The Company has a defined benefit pension plan covering
substantially all employees. The Company's policy is to fund the maximum tax
deductible contribution. The plan provides benefits based upon years of service
and compensation.
The components of pension expense are as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned ....... $ 851 $ 1,128 $ 896
Interest cost ........................ 1,376 1,467 1,411
Return on plan assets ................ (2,443) 1,069 (709)
Net amortization and deferral ........ 1,038 (3,215) (1,086)
------- ------- -------
$ 822 $ 449 $ 512
======= ======= =======
</TABLE>
The funded status of the Plan at November 1, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of
accumulated benefit obligation:
Vested ................................. $ 15,191 $ 11,078
Non-vested ............................. 157 119
-------- --------
$ 15,348 $ 11,197
======== ========
Plan assets at fair value ...................... $ 18,630 $ 16,487
Actuarial present value of projected
benefit obligation ........................ (22,027) (16,028)
-------- --------
Plan assets in excess of (less than)
projected benefit obligation .............. (3,397) 459
Unrecognized net (gain) loss ................... 2,235 (774)
Unrecognized transition asset .................. (1,217) (1,391)
Unrecognized prior service cost ................ 160 194
-------- --------
Net pension (liability) at December 31 ......... $ (2,219) $ (1,512)
======== ========
</TABLE>
The projected benefit obligation was determined using an assumed discount rate
of 7.25% in 1995 (8 1/2% in 1994). Annual salary increases are assumed to be
4 1/2% in 1995 and 1994. The long-term rate of return on plan assets was assumed
to be 8% in each year. Plan assets are invested principally in guaranteed
investment contracts and equity and fixed income funds.
The effect of the change in the discount rate was to increase the actuarial
present value of the projected benefit obligation by approximately $4,187,000 as
of December 31, 1995. The change, which will also be used for determining
expense in 1996, is not expected to have a material effect on the Company's
financial statements.
NOTE F - POSTRETIREMENT HEALTH BENEFITS:
The Company sponsors a non-contributory defined benefit health care plan that
provides health benefits to retirees and their spouses. The Company's policy is
to fund the cost of these benefits as incurred.
The following table presents the plan's funded status reconciled with amounts
recognized in the Company's balance sheets.
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994
- -------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement
health benefits obligation:
Retirees......................... $ 7,395 $ 6,363
Fully eligible active
plan participants............. 5,694 5,051
Other active plan participants... 3,209 3,389
------- -------
Accumulated benefits obligation....... 16,298 14,803
Unrecognized assets:
Net gain......................... 2,038 2,442
Prior service cost from
plan amendment................ 5,106 5,629
------- -------
Accrued postretirement health
benefits obligation.............. $23,442 $22,874
======= =======
</TABLE>
<TABLE>
<CAPTION>
(Thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Postretirement health benefits
expense includes the following
components:
Service cost........... $ 661 $ 785 $ 704
Interest cost 1,336 1,144 1,429
Net amortization of
unrecognized prior
service cost....... (556) (525) (131)
------ ------ ------
$1,441 $1,404 $2,002
====== ====== ======
</TABLE>
The weighted-average discount rate used in determining the accumulated
postretirement health benefits obligation was 7.25% in 1995 (8 1/2% in 1994).
The weighted-average annual assumed rate of increase in the per capita cost of
covered benefits (i.e., health care cost trend rate) for 1995 is 9-10 1/2%,
(11-12 1/2% in 1994) depending on the age of the retiree, and is assumed to
decrease gradually to 5.0% by 2006 and remain at that level thereafter.
Increasing the assumed health care cost trend rates by one percentage point in
each year would increase the accumulated postretirement health benefits
obligation as of December 31, 1995 by $1,654,600 and postretirement health
benefits expense for the year ended December 31, 1995 by $203,500. The net
effect of the change in assumptions in 1995 was not material.
<PAGE> 6
The Gorman-Rupp Company and Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
1995 COMPARED TO 1994
Record sales of $149.5 million were recorded in 1995, compared to $137.5 million
in 1994, an increase of $12.0 million or 8.7%. The increase in net sales was
principally the result of increased business at the Company's Mansfield
Division, shipments relating to a government contract and to a lesser degree,
overall price increases on products and the general economic improvement in
Canada. Other income in 1995 was $1,304,000 compared to $511,000 in 1994. Other
income includes interest earned on short-term investments, income from leased
facilities and gains on sales of assets. The increase in 1995 resulted
principally from the gain on the sale of the Company's former Durham Products
Division facilities.
Cost of products sold as a percentage of net sales was 75.6% in 1995, compared
to 74.0% in 1994. The increase in cost of products sold was principally due to
product mix, including the production of products which have higher material
content and increases in spending for employee medical and health care.
Continued efforts to improve manufacturing efficiencies and cost containment
procedures coupled with increased utilization of the manufacturing facilities at
the Company's largest Division continue to help offset the increase in
manufacturing cost.
Selling, general and administrative expense was 15.2% of net sales in 1995,
compared to 15.5% in 1994. However, there was an increase of $1,447,000 in 1995
which was principally the result of increased employee related expenses and
benefits, interest expense, continued expenses associated with the design and
implementation of upgraded information management systems and professional fees.
The effective income tax rate was 37.1% in 1995, compared to 37.6% in 1994. (See
Note D to the financial statements.)
Record net income in 1995 was $9,461,000, compared to net income of $9,327,000
in 1994, an increase of 1.4%. Net income as a percent of net sales in 1995 was
6.3%, as compared to 6.8% in 1994. Net income per share in 1995 was a record
$1.10, an increase of $.01 from income per share of $1.09 in 1994.
1994 COMPARED TO 1993
Record sales of $137.5 million were recorded in 1994, compared to $131.5 million
in 1993, an increase of $6.0 million or 4.5%. The increase in net sales was
principally the result of increased business at the Mansfield Division, and to a
lesser degree, increases in unit pricing. Other income in 1994 was $511,000,
compared to $589,000 in 1993, and consisted principally of interest earned on
short-term investments and income from leased facilities.
Cost of products sold as a percentage of net sales was 74% in 1994, compared to
75.1% in 1993. Continued efforts to improve manufacturing efficiencies and cost
containment procedures coupled with increased utilization of the manufacturing
facilities at the Company's largest Division resulted in improved cost of
products sold for the comparative periods.
Selling, general and administrative expense was 15.5% of net sales in 1994,
compared to 14.8% in 1993. The increase of $1,892,000 in 1994 was principally
the result of increased salaries and related employee benefits and expenses
associated with the design and implementation of upgraded information management
systems.
The effective income tax rate was 37.6% in 1994, compared to 36.5% in 1993. (See
Note D to the financial statements.)
Net income in 1994 was a record $9,327,000, compared to net income of $8,795,000
in 1993, an increase of 6.0%. Net income as a percent of net sales in 1994 was
6.8%, as compared to 6.7% in 1993. Net income per share in 1994 was a record
$1.09, an increase of $.07 from net income per share of $1.02 in 1993.
On August 25, 1994, the Board of Directors of the Company declared and
authorized a 3 for 2 split of the Company's Common Shares which was effected by
a distribution of additional Common Shares on October 27, 1994 to shareholders
of record on September 29, 1994. The authorized distribution increased the
shares outstanding by 2,859,667 to 8,579,633. Accordingly, per share data was
restated to reflect the 3 for 2 stock split.
LIQUIDITY AND SOURCES OF CAPITAL
Cash and cash equivalents were $3.2 million as of December 31, 1995. The Company
has $7.0 million in bank lines of credit. $5.0 million was borrowed against
these lines at December 31, 1995.
The Company also maintains an unsecured revolving credit facility which provides
for maximum borrowings of $8.0 million, $.8 million of which is available. As of
December 31, 1995, $7.2 million had been borrowed.
During 1995, the Company financed its capital improvements and working capital
requirements through internally generated funds and line of credit arrangements
with banks. Capital expenditures for 1996 are expected to be financed through
internally generated funds and existing credit arrangements.
The ratio of current assets to current liabilities was 3.6 to 1 at December 31,
1995, compared to 3.7 to 1 at December 31, 1994. Management believes that it has
adequate working capital and a healthy liquidity position.
IMPACT OF INFLATION
The Company continues to implement programs that improve productivity and
efficiency in a stabilizing inflationary economy.
<PAGE> 7
The Gorman-Rupp Company and Subsidiaries
TEN YEAR SUMMARY OF SELECTED FINANCIAL DATA
(Thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
1995 1994 1993 1992
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales $ 149,489 $ 137,508 $ 131,535 $ 126,019
Gross profit 36,516 35,763 32,699 30,975
Income taxes 5,590 5,625 5,063 4,693
Income (1) 9,461 9,327 8,795 7,966
Return on sales (%) 6.3 6.8 6.7 6.3
Sales dollars per employee 153.8 138.5 133.9 125.6
FINANCIAL POSITION:
Current assets $ 71,401 $ 60,070 $ 55,746 $ 50,152
Current liabilities 19,727 16,391 14,382 12,380
Working capital 51,674 43,679 41,364 37,772
Current ratio 3.6 3.7 3.9 4.1
Property, plant and
equipment - net 42,163 40,879 36,835 30,807
Capital additions 8,229 8,553 10,277 4,496
Total assets 119,816 107,100 98,706 86,434
Shareholders' equity 67,240 61,608 56,911 52,759
Dividends paid 4,466 4,209 4,122 3,923
Average number of employees 972 993 982 1,003
SHAREHOLDER INFORMATION:
Income per share (1) $ 1.10 $ 1.09 $ 1.02 $ .92
Cash dividends per share .52 .49 .48 .46
Shareholders' equity per share at December 31, 7.81 7.18 6.63 6.14
Average number of shares outstanding 8,587,466 8,579,633 8,588,493 8,594,255
</TABLE>
(1) Income in 1992 is before the cumulative effect of a change in accounting
principle which reduced income by $11,886,000 or $1.38 per share.
*Includes the acquisition of Patterson Pump Company in November 1988.
RANGES OF STOCK PRICES
The high and low sales price and dividends per share for Common Shares traded on
the American Stock Exchange were:
<TABLE>
<CAPTION>
Sales Price of Common Shares Dividends Per Share
1995 1994 1995 1994
-------------------- -------------------- -------------------
Quarter High Low High Low
<S> <C> <C> <C> <C> <C> <C>
First............................ $18.250 $15.000 $20.000 $16.750 $.13 $.12
Second........................... 16.000 14.000 18.583 16.333 .13 .12
Third............................ 17.625 13.000 17.333 15.167 .13 .12
Fourth........................... 16.625 14.125 18.500 15.750 .13 .13
</TABLE>
Shareholder information reported by Transfer Agent and Registrar, National City
Bank, February 14, 1996.
<TABLE>
<CAPTION>
Holders Shares
------- ------
<S> <C> <C>
Individuals............................. 1,243 2,526,677
Nominees, Brokers and Other ............ 30 6,087,382
----- ---------
TOTAL 1,273 8,614,059
===== =========
</TABLE>
An additional 251,117 Common Shares are held in Treasury.
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
The following is a summary of unaudited quarterly results of operations for the
years ended December 31, 1995 and 1994.
(Thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
QUARTER ENDED 1995 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
------- ------- -------- -------
<S> <C> <C> <C> <C>
Net sales............ $36,224 $37,845 $38,231 $37,189
Gross profit......... 9,300 9,270 9,210 8,736
Net income........... 2,508 2,154 2,518 2,281
Net income per share. .29 .25 .30 .26
<CAPTION>
QUARTER ENDED 1994 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
------- ------- -------- -------
<S> <C> <C> <C> <C>
Net sales............ $38,118 $34,003 $33,781 $31,606
Gross profit......... 9,732 9,372 8,860 7,799
Net income........... 2,968 2,615 2,329 1,415
Net income per share. .35 .30 .27 .17
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
1991 1990 1989 1988* 1987 1986
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales $ 123,442 $ 119,715 $ 114,253 $ 82,750 $ 74,435 $ 65,274
Gross profit 29,872 28,602 27,663 22,308 20,460 17,376
Income taxes 4,664 4,888 4,638 4,221 4,851 3,821
Income (1) 7,689 7,342 6,771 6,618 5,919 4,397
Return on sales (%) 6.2 6.1 5.9 8.0 8.0 6.7
Sales dollars per employee 120.0 120.7 118.6 106.9 99.2 85.3
FINANCIAL POSITION:
Current assets $ 53,642 $ 50,531 $ 48,793 $ 44,118 $ 39,663 $ 34,539
Current liabilities 14,471 14,805 15,871 14,789 6,402 4,688
Working capital 39,171 35,726 32,922 29,329 33,261 29,851
Current ratio 3.7 3.4 3.1 3.0 6.2 7.4
Property, plant and
equipment - net 30,838 26,134 24,479 22,795 16,890 16,988
Capital additions 8,224 4,962 4,844 2,873 2,100 2,174
Total assets 85,131 77,643 74,560 68,695 57,119 52,028
Shareholders' equity 61,256 57,310 53,711 50,476 48,248 45,330
Dividends paid 3,820 3,743 3,667 3,399 3,258 3,151
Average number of employees 1,029 992 963 774 750 765
SHAREHOLDER INFORMATION:
Income per share (1) $ .89 $ .85 $ .79 $ .76 $ .68 $ .50
Cash dividends per share .45 .44 .43 .39 .38 .36
Shareholders' equity per share at December 31, 7.13 6.67 6.25 5.83 5.56 5.17
Average number of shares outstanding 8,594,255 8,594,255 8,594,255 8,655,119 8,682,711 8,772,465
</TABLE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Shareholders
The Gorman-Rupp Company
We have audited the accompanying consolidated balance sheets of The Gorman-Rupp
Company and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1995, appearing on pages 10
through 14. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Gorman-Rupp Company and subsidiaries at December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
Cleveland, Ohio
February 2, 1996
<PAGE> 1
EXHIBIT (21)
SUBSIDIARIES OF THE COMPANY
The Company has three wholly owned subsidiaries: (i) Gorman-Rupp of Canada
Limited, organized under the laws of the Province of Ontario; (ii) The
Gorman-Rupp International Company, organized under the laws of the State of
Ohio; and (iii) Patterson Pump Company, organized under the laws of the State of
Ohio. The consolidated financial statements of the Company, filed as a part of
this Form 10-K, include the account of each such subsidiary.
26
<PAGE> 1
EXHIBIT (23)
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of The Gorman-Rupp Company of our report dated February 2, 1996, included in
the 1995 Annual Report to Shareholders of The Gorman-Rupp Company.
We also consent to the incorporation by reference in the Registration Statement
(Form S-3 No. 33-87198) pertaining to the registration of 60,000 shares of The
Gorman-Rupp Company common stock and in the related Prospectus, and in the
Registration Statement (Form S-3 No. 33-86322) pertaining to the registration
of 75,000 shares of The Gorman-Rupp Company common stock and in the related
Prospectus, and in the Registration Statement (Form S-8 No. 33-47712) pertaining
to the Employee Stock Purchase Plan of The Gorman-Rupp Company and in the
related Prospectus, and in the Registration Statement (Form S-8 No. 33-44370)
pertaining to the Individual Profit Sharing Retirement Plan of The Gorman-Rupp
Company and in the related Prospectus of our report dated February 2, 1996,
with respect to the consolidated financial statements of The Gorman-Rupp
Company incorporated by reference in this Annual Report (Form 10-K) for the
year ended December 31, 1995.
/s/ Ernst & Young LLP
Cleveland, Ohio
March 22, 1996
27
<PAGE> 1
EXHIBIT (24)
THE GORMAN-RUPP COMPANY
CERTIFICATE OF THE SECRETARY
The undersigned hereby certifies that he is the duly elected, qualified and
acting Corporate Secretary of The Gorman-Rupp Company, an Ohio corporation (the
"Company"), and that the following resolutions were duly adopted by the
Company's Board of Directors at a duly noticed and called meeting held on
January 25, 1996 at which a quorum was present and acting throughout, which
resolutions have not been amended, rescinded or modified and are in full force
and effect on the date hereof.
RESOLVED, that the officers of the Company, and each of them, hereby are
authorized, for and on behalf of the Company, to prepare, sign and file, or
cause to be prepared, signed and filed, with the Securities and Exchange
Commission, under the Securities Exchange Act of 1934, the Company's 1995 Annual
Report on Form 10-K, and any and all amendments thereto, and to do or cause to
be done all things necessary or advisable in connection therewith.
FURTHER RESOLVED, that James C. Gorman, Jeffrey S. Gorman, Robert E.
Kirkendall and Anthony R. Moore, and each of them, hereby are appointed
attorneys for the Company, with full power of substitution, for and in the name,
place and stead of the Company, to sign and file the Company's 1995 Annual
Report on Form 10-K and any and all amendments thereto, and any and all other
documents in connection therewith, with full power and authority to do and
perform any and all acts necessary or advisable.
FURTHER RESOLVED, that the officers of the Company and each of them, hereby
are authorized, for and on behalf of the Company, to execute a power of attorney
evidencing the foregoing appointments.
IN WITNESS WHEREOF, I have hereunto signed this Certificate as of the 22nd
day of March, 1996.
/s/ ROBERT E. KIRKENDALL
-------------------------------
Robert E. Kirkendall
Corporate Secretary
28
<PAGE> 2
EXHIBIT (24)
POWER OF ATTORNEY
The undersigned, The Gorman-Rupp Company (the "Company"), by the
undersigned officer of the Company hereunto duly authorized, hereby appoints
James C. Gorman, Jeffrey S. Gorman, Robert E. Kirkendall and Anthony R. Moore,
and each of them, as attorneys for the Company with full power of substitution,
for and in its name, place and stead, to sign and file with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, the
Company's 1995 Annual Report on Form 10-K and any and all amendments thereto,
and any and all other documents to be filed with the Securities and Exchange
Commission or otherwise in connection therewith, with full power and authority
to do and perform any and all acts whatsoever necessary or advisable.
Executed this 22nd day of March 1996.
THE GORMAN-RUPP COMPANY
BY: /s/ ROBERT E. KIRKENDALL
--------------------------
Robert E. Kirkendall
Corporate Secretary
29
<PAGE> 3
EXHIBIT (24)
POWER OF ATTORNEY
The undersigned Officers and Directors of The Gorman-Rupp Company (the
"Company") hereby appoint James C. Gorman, Jeffrey S. Gorman, Robert E.
Kirkendall, and Anthony R. Moore, and each of them, as attorneys for each of the
undersigned, with full power of substitution, for and in the name, place and
stead of each of the undersigned to sign and file with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, the
Company's 1995 Annual Report on Form 10-K and any and all amendments thereto,
and any and all other documents to be filed with the Securities and Exchange
Commission or otherwise in connection therewith, with full power and authority
to do and perform any and all acts whatsoever necessary or advisable.
Executed this 25th day of January 1996.
/s/ JAMES C. GORMAN Chairman, Principal Executive Officer
- ----------------------------- and Director
James C. Gorman
/s/ KENNETH E. DUDLEY Treasurer and Principal Financial
- ----------------------------- and Accounting Officer
Kenneth E. Dudley
/s/ WILLIAM A. CALHOUN Director
- -----------------------------
William A. Calhoun
/s/ PETER B. LAKE Director
- -----------------------------
Peter B. Lake
/s/ BURTON PRESTON Director
- -----------------------------
Burton Preston
- ----------------------------- Director
John A. Walter
/s/ JEFFREY S. GORMAN Director
- -----------------------------
Jeffrey S. Gorman
/s/ JAMES R. WATSON Director
- -----------------------------
James R. Watson
/s/ THOMAS E. HOAGLIN Director
- -----------------------------
Thomas E. Hoaglin
30
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ART. 5 FDS
FOR 1995 FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000042682
<NAME> GORMAN-RUPP COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,250
<SECURITIES> 0
<RECEIVABLES> 31,952
<ALLOWANCES> 0
<INVENTORY> 32,833
<CURRENT-ASSETS> 71,401
<PP&E> 81,789
<DEPRECIATION> 39,626
<TOTAL-ASSETS> 119,816
<CURRENT-LIABILITIES> 19,727
<BONDS> 0
5,133
0
<COMMON> 0
<OTHER-SE> 62,107
<TOTAL-LIABILITY-AND-EQUITY> 119,816
<SALES> 149,489
<TOTAL-REVENUES> 150,793
<CGS> 112,973
<TOTAL-COSTS> 135,742
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,051
<INCOME-TAX> 5,590
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,461
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.10
</TABLE>
