<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 three months ended March 31, 1996 Commission File Number 1-6747
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The Gorman-Rupp Company
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 755-1011
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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
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Shares outstanding at March 31, 1996 -----
common, without par value, 8,618,383
Page 1 of 6 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
March 31
1996 1995
INCOME --------- ---------
Net sales $38,006 $36,224
Other income 116 120
--------- ---------
TOTAL INCOME 38,122 36,344
DEDUCTIONS FROM INCOME
Cost of products sold 29,109 26,924
Selling, general and
administrative expenses 5,809 5,320
--------- ---------
TOTAL DEDUCTIONS 34,918 32,244
--------- ---------
INCOME BEFORE INCOME TAXES 3,204 4,100
Income taxes 1,230 1,592
--------- ---------
NET INCOME $1,974 $2,508
========= =========
Net Income Per Share $0.23 $0.29
Dividends Paid Per Share $0.13 $0.13
Average Shares Outstanding 8,613,496 8,578,698
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in
thousands of dollars)
<CAPTION>
Three Months Ended
March 31
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES: --------- ---------
<S> <C> <C>
Net income $1,974 $2,508
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,381 1,255
Changes in operating assets and liabilities 4,131 (3,112)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (683) (2,032)
Other 189 (37)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (1,120) (1,116)
(Repayments to) Borrowings from bank (7,516) 2,787
NET (DECREASE) INCREASE IN CASH --------- ---------
AND CASH EQUIVALENTS (1,644) 253
CASH AND CASH EQUIVALENTS:
Beginning of year 3,250 3,062
--------- ---------
March 31 $1,606 $3,315
========= =========
</TABLE>
2
<PAGE> 3
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
<TABLE>
<CAPTION>
March 31 December 31
1996 1995
ASSETS --------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $1,606 $3,250
Accounts receivable 29,450 31,952
Inventories 31,567 32,833
Other current assets and deferred income taxes 3,160 3,366
--------- ---------
TOTAL CURRENT ASSETS 65,783 71,401
OTHER ASSETS 530 543
DEFERRED INCOME TAXES 5,708 5,709
PROPERTY, PLANT AND EQUIPMENT 82,311 81,789
Less allowances for depreciation 40,832 39,626
--------- ---------
PROPERTY, PLANT AND EQUIPMENT - NET 41,479 42,163
--------- ---------
TOTAL ASSETS $113,500 $119,816
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $5,770 $7,508
Payrolls and related liabilities,
accrued expenses 7,843 6,509
Income taxes 1,341 710
Notes payable to banks 0 5,000
--------- ---------
TOTAL CURRENT LIABILITIES 14,954 19,727
LONG TERM DEBT 4,672 7,188
PENSION LIABILITY 1,998 2,219
POSTRETIREMENT HEALTH BENEFITS OBLIGATION 23,591 23,442
SHAREHOLDERS' EQUITY
Common shares, without par value
authorized - 14,000,000 shares
outstanding - 8,618,383 shares in 1996 and
8,607,672 shares in 1995 (after deducting
treasury shares of 246,793 in 1996 and 257,504
in 1995) at stated capital amount 5,141 5,133
Retained earnings 63,996 62,984
Translation adjustments (852) (877)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 68,285 67,240
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $113,500 $119,816
========= =========
</TABLE>
3
<PAGE> 4
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 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 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, 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>
March 31 December 31
(Thousands of dollars) 1996 1995
--------- ---------
<S> <C> <C>
Raw materials and in-process $10,418 $10,836
Finished parts 17,735 18,446
Finished products 3,414 3,551
--------- ---------
$31,567 $32,833
========= =========
</TABLE>
4
<PAGE> 5
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
First Quarter 1996 vs First Quarter 1995
- ----------------------------------------
Net sales were $38,006,000 in 1996, an increase of $1,782,000 or 4.9% from the
$36,224,000 in 1995. Most of the increase was due to increased sales at the
Mansfield Division. The last half of the approximately $7,000,000 government
order is being shipped during the first half of 1996.
Other income was $116,000 in 1996 compared to $120,000 in 1995.
Cost of products sold in 1996 was $29,109,000 compared to $26,924,000 in 1995.
As a percentage of net sales, cost of products sold in 1996 was 76.6% compared
to 74.3% in 1995. The largest increase was in the materials needed to build the
government pumps that was previously mentioned.
Selling, general and administrative expenses increased to $5,809,000 in 1996
from $5,320,000 in 1995 with increases in advertising expenses and travel being
the largest factors. This was a result of a large trade show that is
attended every three years.
Income before income taxes was $3,204,000 in 1996 compared to $4,100,000 in
1995, a decrease of $896,000. Income tax expense decreased from $1,592,000 in
1995 to $1,230,000 in 1996, primarily as a result of a decrease in profit. The
effective income tax rate was 38.4% in 1996 compared to 38.8% in 1995.
Net income in 1996 of $1,974,000 decreased $534,000 from $2,508,000 in 1995.
As a percent of net sales, net income was 5.2% in 1996 and 6.9% in 1995. Net
income per share was $.23 in 1996, a decrease of $.06 from $.29 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 4.4 to 1 at March 31, 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.
5
<PAGE> 6
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 March
31, 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
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(Registrant)
Date April 26, 1996 Kenneth E. Dudley
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/S/ Kenneth E. Dudley
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(Signature)
Treasurer & Principal
Financial Officer
6
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-01-1996
<CASH> 1,606
<SECURITIES> 0
<RECEIVABLES> 29,719
<ALLOWANCES> 269
<INVENTORY> 31,567
<CURRENT-ASSETS> 65,783
<PP&E> 82,311
<DEPRECIATION> 40,832
<TOTAL-ASSETS> 113,500
<CURRENT-LIABILITIES> 14,954
<BONDS> 0
<COMMON> 5,141
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 113,500
<SALES> 38,006
<TOTAL-REVENUES> 38,122
<CGS> 29,109
<TOTAL-COSTS> 34,918
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 67
<INTEREST-EXPENSE> 119
<INCOME-PRETAX> 3,204
<INCOME-TAX> 1,230
<INCOME-CONTINUING> 1,974
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,974
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
