<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2000 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 be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Shares outstanding at September 30, 2000 -----
common, without par value, 8,565,553
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 Nine Months Ended
September 30 September 30
2000 1999 2000 1999
INCOME ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 46,904 $ 46,898 $ 142,481 $ 135,200
Other income 207 168 606 626
---------- ---------- ---------- ----------
TOTAL INCOME 47,111 47,066 143,087 135,826
DEDUCTIONS FROM INCOME
Cost of products sold 34,460 33,829 105,116 99,334
Selling, general and
administrative expenses 6,485 6,647 19,061 19,747
Non-recurring expense/
plant relocation 1,051 0 1,051 0
---------- ---------- ---------- ----------
TOTAL DEDUCTIONS 41,996 40,476 125,228 119,081
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 5,115 6,590 17,859 16,745
Income taxes 1,987 2,687 6,970 6,600
---------- ---------- ---------- ----------
NET INCOME $ 3,128 $ 3,903 $ 10,889 $ 10,145
========== ========== ========== ==========
Basic And Diluted
Earnings Per Share $ 0.37 $ 0.45 $ 1.27 $ 1.18
Dividends Paid Per Share $ 0.16 $ 0.15 $ 0.46 $ 0.45
Avg. Shares Outstanding 8,583,914 8,591,790 8,589,103 8,583,797
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of dollars)
Nine Months Ended
September 30
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES: ---------- ----------
<S> <C> <C>
Net income $ 10,889 $ 10,145
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,985 5,086
Changes in operating assets and liabilities 511 (1,638)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (9,472) (9,172)
Change in short-term investments (571) (845)
Other (5) (173)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (3,952) (3,864)
Change in treasury shares (723) 124
(Repayments to) Borrowings from bank 496 1,197
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NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS 2,158 860
CASH AND CASH EQUIVALENTS:
Beginning of year 4,114 2,359
-------- --------
September 30 $ 6,272 $ 3,219
======== ========
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
Sept 30 Dec 31
2000 1999
ASSETS ------------ ------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 6,272 $ 4,114
Short-term investments 3,797 3,225
Accounts receivable 31,027 27,898
Inventories 37,288 36,189
Other current assets and deferred income taxes 6,395 6,759
------------ ------------
TOTAL CURRENT ASSETS 84,779 78,185
OTHER ASSETS 719 715
DEFERRED INCOME TAXES 4,376 4,366
PROPERTY, PLANT AND EQUIPMENT 116,407 107,962
Less allowances for depreciation 58,311 54,353
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PROPERTY, PLANT AND EQUIPMENT - NET 58,096 53,609
------------ ------------
TOTAL ASSETS $ 147,970 $ 136,875
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,099 $ 5,805
Payrolls and related liabilities 3,409 2,943
Accrued expenses 10,289 6,969
Income taxes 1,125 693
------------ ------------
TOTAL CURRENT LIABILITIES 21,922 16,410
LONG TERM DEBT 3,603 3,107
POSTRETIREMENT BENEFITS 23,970 25,063
SHAREHOLDERS' EQUITY
Common shares, without par value
at stated capital amount 5,106 5,123
Retained earnings 94,640 88,409
Accumulated other comprehensive income (1,271) (1,237)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 98,475 92,295
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 147,970 $ 136,875
============ ============
Common shares - authorized 14,000,000 14,000,000
* Common shares - outstanding 8,565,553 8,592,049
Common shares - treasury 299,623 273,127
* After deducting treasury shares
</TABLE>
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<PAGE> 4
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2000
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 and nine
month periods ended September 30, 2000 are not necessarily indicative of results
that may be expected for the year ending December 31, 2000. For further
information, refer to the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10K for the year ended December
31, 1999.
NOTE B - INVENTORIES
The major components of inventories are as follows:
Sept 30 Dec 31
(Thousands of dollars) 2000 1999
------- -------
Raw materials and in-process $24,770 $24,040
Finished parts 9,547 9,266
Finished products 2,971 2,883
------- -------
$37,288 $36,189
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NOTE C - COMPREHENSIVE INCOME
During the three month periods ended September 30, 2000 and 1999, total
comprehensive income was $3,048,000 and $3,923,000, respectively. During the
nine month periods ended September 30, 2000 and 1999, total comprehensive income
was $10,855,000 and $10,479,000, respectively.
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<PAGE> 5
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Third Quarter 2000 vs Third Quarter 1999
------------------------------------------
Net sales were $46,904,000 in 2000 compared to $46,898,000 in 1999, an increase
of $6,000, and is virtually the same for both years.
Other income was $207,000 in 2000 compared to $168,000 in 1999. The increase was
due primarily to increased interest expense.
Cost of products sold in 2000 was $34,460,000 compared to $33,829,000 in 1999.
The largest factors contributing to the increase were depreciation and
professional expenses. As a percentage of net sales, cost of products sold was
73.5% in 2000 compared to 72.1% in 1999. A change in product mix increased the
percentage in 2000.
Selling, general and administrative expenses decreased from $6,647,000 in 1999
to $6,485,000 in 2000 primarily as a result of decreases in bad debts and
depreciation.
A non-recurring expense of $1,051,000 was recorded at the Mansfield Division
and was associated with the moving of machines and materials into the newly
completed manufacturing facility.
Income before income taxes was $5,115,000 in 2000 compared to $6,590,000 in
1999, a decrease of $1,475,000. Income tax expense decreased from $2,687,000 in
1999 to $1,987,000 in 2000, primarily as a result of the decrease in profit. The
effective tax rate was 38.8% in 2000 compared to 40.8% in 1999.
Net income in 2000 was $3,128,000 which resulted in a decrease of $775,000 from
$3,903,000 in 1999, a decrease of 19.9%. As a percent of net sales, net income
was 6.7% in 2000 and 8.3% in 1999. Net income per share was $.37 in 2000, a
decrease of $.08 from the $.45 in 1999.
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<PAGE> 6
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Nine Months 2000 vs Nine Months 1999
------------------------------------------
Net sales were $142,481,000 in 2000, an increase of $7,281,000 or 5.4% over the
$135,200,000 in 1999. A majority of the increase is related to increased sales
of fabricated turbine diffusers.
Other income was $606,000 in 2000 compared to $626,000 in 1999. The decrease was
primarily due to a decrease in gains on disposals of property, plant and
equipment in 1999 that were not repeated in 2000.
Cost of products sold in 2000 was $105,116,000 compared to $99,334,000 in 1999.
The largest factor in the increase was material needed to support the increased
sales. An increase in payroll related expenses also contributed to the increase.
As a percentage of net sales, cost of products sold was 73.8% in 2000 compared
to 73.5% in 1999. Changes in product mix are responsible for the higher
percentage in 2000.
Selling, general and administrative expenses decreased from $19,747,000 in 1999
to $19,061,000 in 2000 primarily as a result in decreases in retirement,
advertising, personal property taxes and depreciation expenses.
A non-recurring expense of $1,051,000 was recorded at the Mansfield Division
and was associated with the moving of machines and materials into the newly
completed manufacturing facility.
Income before income taxes was $17,859,000 in 2000, compared to $16,745,000 in
1999, an increase of $1,114,000. Income tax expense increase from $6,600,000 in
1999 to $6,970,000 in 2000. The effective income tax rate was 39.0% in 2000
compared to 39.4% in 1999.
Net income of $10,889,000 in 2000 increased $744,000 from $10,145,000 in 1999,
an increase of 7.3%. As a percent of net sales, net income was 7.6% in 2000 and
7.5% in 1999. Net income per share was $1.27 in 2000, an increase from the $1.18
in 1999.
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,
2000 and 4.8 to 1 at December 31, 1999.
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, 2000 - 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 November 2, 2000
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By:/S/Kenneth E. Dudley
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Kenneth E. Dudley
Treasurer & Principal
Financial Officer
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