10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 incorporation or organization)	(I.R.S. Employer Identification No.)
600 South Airport Road, 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	NYSE Amex

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in the definitive proxy statement or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

State the aggregate market value of the voting common equity held by non-affiliates of the Registrant. The aggregate market value is computed by reference to the price at which the common equity was sold as of June 30, 2009. $200,324,754

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock as of March 1, 2010.

Common Shares, without par value—16,707,535

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 2009 Annual Report to Shareholders incorporated by reference into Part II (Items 5-9A).

Portions of Notice of 2010 Annual Meeting of Shareholders and related Proxy Statement incorporated by reference into Part III (Items 10-14).

**************

The Exhibit Index is located at Page 17

TABLE OF CONTENTS

PART I
	ITEM 1. BUSINESS
	ITEM 1A. RISK FACTORS
	ITEM 1B. UNRESOLVED STAFF COMMENTS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. RESERVED
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER_______MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION_______AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNT- ING AND FINANCIAL DISCLOSURE
	ITEM 9A. CONTROLS AND PROCEDURES
	ITEM 9B. OTHER INFORMATION
	PART III
	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND_______MANAGEMENT AND RELATED STOCKHOLDER MATTERS
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
	ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
	PART IV
	ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
SIGNATURES
Exhibit 13
Exhibit 14
Exhibit 21
Exhibit 23
Exhibit 24
Exhibit 31(a)
Exhibit 31(b)
Exhibit 32

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 water, wastewater, construction, industrial, petroleum, original equipment, agriculture, fire protection, heating, ventilating and air conditioning (“HVAC”), military and other liquid-handling applications.

PRODUCTS

The Company operates principally in one business segment, the manufacture and sale of pumps and related fluid control equipment and systems. The following table sets forth, for the years 2007 through 2009, the total net sales, income before income taxes and total assets ($000 omitted) of the Company.

	2009		2008		2007
Net Sales	$	266,242	$	330,646	$	305,562
Income Before Income Taxes		27,255		40,494		35,383
Assets		249,424		231,538		211,534

The Company’s product line consists of pump models ranging in size from ¹/4” to 144” and ranging in rated capacity from less than one gallon per minute to in excess of 750,000 gallons per minute. The types of pumps which the Company produces include self priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, 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 boosting low residential water pressure; for pumping refined petroleum products, including the ground refueling of aircraft; for fluid control in heating, ventilating and air conditioning (HVAC) applications; and for various agricultural purposes. Additionally, pumps manufactured for fire protection are used for sprinkler systems, fire hydrants, stand pipes, fog systems and deluge systems at hotels, banks, factories, airports, schools, public buildings and hundreds of other facilities throughout the world. Pumps are also utilized for dewatering and flood control purposes.

Many of the Company’s smallest pumps are sold to customers for incorporation into such products as food processing, chemical, photo processing, waste treatment, HVAC equipment, appliances, solar heating, and for automated explosives detection systems in airports.

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PART I — CONTINUED

ITEM 1. BUSINESS — CONTINUED

MARKETING

Except for government 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), through third-party distributor catalogs, and by direct sales. The Company is continuously seeking alliances to further enhance marketing opportunities. Government sales are handled directly by the Company; and export sales are made primarily through foreign distributors and representatives. During 2009, 2008 and 2007, there were no shipments to any single customer that exceeded 10% of total net sales.

Gorman-Rupp continues to actively pursue international business opportunities and, in 2009, shipped its pumps to over 100 countries across the globe. In April 2007, the Company’s wholly owned subsidiary, The Gorman-Rupp International Company, purchased a 90% controlling equity interest in Wavo Pompen B.V. located in The Netherlands, which was subsequently renamed Gorman-Rupp Europe B.V. The Company’s foreign operations do not involve financial or other material risks due to their small size, both individually and collectively.

As a result of this active pursuit of international business, approximately $96.4 million of 2009 sales were made to customers in over 100 countries outside the United States, as compared to $103.2 million in 2008 and $88.1 million in 2007. International sales represented 36%, 31% and 29% of total sales in 2009, 2008 and 2007, respectively. No sales made to customers in any one foreign country amounted to more than 5% of total sales during 2009, 2008 or 2007. The Company continues its efforts to penetrate international markets principally by its aggressive response to worldwide pumping needs.

COMPETITION

Since the late 1990’s, a number of consolidations have occurred within the highly competitive pump industry. As a consequence, numerous pump competitors now exist as subsidiaries, divisions or departments within larger corporations. Foreign-sourced pumps have also increasingly penetrated into the Company’s domestic markets.

Gorman-Rupp estimates that 80 other domestic and global companies selling pumps and pump units compete in one or more of the lines of business and applications which comparable products of the Company are utilized. International competitors are based mostly in Europe and Asia. Many pumps are specifically designed and engineered for a particular customer’s application. The Company believes that proper application, product performance, and quality of delivery and service are the principal methods of competition, and attributes its success to its continued 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 most patterns are made and owned by the Company), structural steel, bar stock, motors, solenoids, engines, seals, and plastic and elastomeric 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

PART I — CONTINUED

ITEM 1. BUSINESS — CONTINUED

The Company purchases motors for its polypropylene bellows pumps and magnetic drive pumps from several alternative vendors; and motor components for its large submersible pumps, and motors and engines for its pumps systems from a limited number of suppliers. Small motor requirements are also currently sourced from alternative suppliers.

The other production operations of the Company consist of the machining of castings, the cutting, shaping and welding of bar stock and structural members, the design and assembly of electrical control panels, 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, 2009, the Company employed approximately 957 persons, of whom approximately 568 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. The Company’s patents, trademarks and other intellectual property are adequate for its business purposes.

The backlog of orders at December 31, 2009 was valued at $93.7 million compared to $107.8 million at December 31, 2008. About 99% of the Company’s backlog of unfilled orders is scheduled to be shipped during 2010, with the remainder during 2011.

AVAILABLE INFORMATION

The Company maintains a website accessible through its Internet address of www.gormanrupp.com. Gorman-Rupp makes available free of charge on or through www.gormanrupp.com its Annual Report to Shareholders, its annual reports on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after those reports (and any amendments) are electronically filed with or furnished to the Securities and Exchange Commission (“Commission”). As noted in Gorman-Rupp’s Annual Report to Shareholders, a paper copy of the Company’s Form 10-K is also available free of charge upon written request to the Company’s Corporate Secretary. However, the information contained on the Company’s website is not a part of this Form 10-K or any other report filed with or furnished to the Commission.

ITEM 1A. RISK FACTORS

Market influences and cost pressures

The overall pump industry is cyclical in nature, and some of its business activity is generally related to conditions in the durable goods and capital equipment markets. The Company cannot predict the timing or extent of future economic or market swings. Additionally, raw material and energy purchases are major drivers of costs in the manufacture of pumps, and these costs are highly unpredictable. While efforts are made to recoup higher production costs through increased prices, the future acceptability of such price increases by customers is not guaranteed due to the highly competitive market place.

4

PART I — CONTINUED

ITEM 1A. RISK FACTORS — CONTINUED

Family ownership of common equity

A substantial percentage of the Company’s Common Shares is held by various members of the Gorman and Rupp families and their affiliates. These family holdings do not typically trade; therefore, the Common Shares, in part because of these circumstances, generally have a history of relatively thin trading experiences on the NYSE Amex Exchange.

ITEM 1B. UNRESOLVED STAFF COMMENTS

The Company has not received any written comments from the Commission staff regarding its periodic or current reports under the Securities Exchange Act of 1934 within 180 days before the end of its fiscal year to which this Form 10-K relates.

ITEM 2. PROPERTIES

All of the production operations of the Company are conducted at its plants located in Mansfield and Bellville, Ohio; Toccoa, Georgia; Royersford, Pennsylvania; St. Thomas, Ontario, Canada; County Westmeath, Ireland; and Leeuwarden, The Netherlands. All of these properties, except the plants in Leeuwarden, The Netherlands and County Westmeath, Ireland are owned in fee without any material encumbrance. The Company similarly owns a facility in Sparks, Nevada comprising a training center and warehouse, and a former production plant in Oklahoma now used for warehousing and office space. In addition, the Company leases warehouse facilities in Bangkok, Thailand and Culemborg, The Netherlands to house pumps and pump parts. The Company’s various production facilities and warehouses are described below in more detail.

			Company
	Square		Operation
Location	Footage		Start Date		Description of Production Activity
Mansfield, Ohio		238,000		1947	Vacant (1)
		134,200		1968	Assembly, Warehousing and Office (2)
		11,500		1979	Vacant (3)
		83,500		1983	Vacant (4)
		365,600		2000	Machining, Assembly and Warehousing (5)
		460,500		2009	Assembly, Warehousing and Office (5)
Bellville, Ohio		93,200		1953	Assembly, Warehousing and Office (6)
Toccoa, Georgia		171,750		1988	Manufacturing, Warehousing and Office (7)
		31,800		2006	Assembly and Warehousing (8)
St. Thomas, Ontario, Canada		52,600		1960	Manufacturing, Warehousing and Office (9)
County Westmeath, Ireland		10,000		1998	Manufacturing (10)
Royersford, Pennsylvania		78,400		2002	Manufacturing, Warehousing and Office (11)
		43,100		2002	Warehousing (12)

5

PART I — CONTINUED

ITEM 2. PROPERTIES — CONTINUED

			Company
	Square		Operation
Location	Footage		Start Date		Description of Production Activity
Sand Springs, Oklahoma		28,200		1977	Warehousing and Office (13)
Leeuwarden, The Netherlands		16,210		2002	Warehousing (14)
		10,193		2007	Assembly, Warehousing and Office (15)
Culemborg, The Netherlands		10,150		2007	Warehousing and Office (16)
		2,691		2007	Warehousing (17)
Sparks, Nevada		26,000		1972	Warehousing (18)
Bangkok, Thailand		3,000		2006	Warehousing (19)

(1)	The original production plant, located on a 26 acre site, was built in 1917 and has been expanded on several occasions, the latest in 1973. During the fourth quarter 2009, all operations from this facility were relocated to a newly constructed facility near the Mansfield Lahm Airport.
(2)	This facility, also situated on the foregoing 26 acre site, has been frequently expanded, most recently in 1994 and includes a modern testing facility.
(3)	This facility is located on 3.4 acres adjacent to the Company’s 26 acre site. This facility comprised human resources and advertising operations for the Mansfield Division, and the Company’s training center. During the fourth quarter 2009, all operations from this facility were relocated to a newly constructed facility near the Mansfield Lahm Airport.
(4)	This facility was built in 1920 and is located on 3.4 acres adjacent to the Company’s 26 acre site. This facility was renovated in 1983. During the fourth quarter 2009, all operations from this facility were relocated to a newly constructed facility near the Mansfield Lahm Airport.
(5)	In 1997, the Company purchased 90 acres of undeveloped land near the Mansfield Lahm Airport for future expansion and consolidation of facilities for the Mansfield Division and the Corporate Office. In 1998, design work and site preparation began on the new consolidated facilities project. In 2000, the first phase of the manufacturing and warehousing facility was completed, and the machining, welding and fabrication operations of the Mansfield Division were relocated to this facility. Construction of the second phase began in the third quarter 2008. In the fourth quarter 2009, the second phase was completed, and most of the remaining operations of the Mansfield Division and the Corporate offices were relocated to this facility.
(6)	This facility, which comprises the production operations of the Industries Division, is situated on an 8.5 acre site. The initial portion of this plant was built in 1953 and has been expanded on several occasions, most recently in 1973-74.
(7)	This facility, which supports Patterson Pump Company, is situated on a 31 acre site. Between 1989 and 2000, the facility was expanded on several occasions, including the addition of a modern 400,000 gallon testing facility and office.
(8)	This facility, which is adjacent to the main plant, is operated by Patterson Pump Company and is utilized for light manufacturing and inventory warehousing purposes.
(9)	The plant in St. Thomas, Ontario is operated by Gorman-Rupp of Canada, Ltd. It is situated on an 11 acre site and has undergone a number of expansions since it was established in 1960, the latest being completed in 1998.
(10)	This leased manufacturing facility is occupied by Patterson Pump Ireland Limited and consists of 8,000 square feet of manufacturing space and 2,000 square feet of office space. The lease is for a 20 year term ending March 31, 2022, with certain lease termination options throughout the time period.

6

PART I — CONTINUED

ITEM 2. PROPERTIES — CONTINUED

(11)	This facility supports the operations of American Machine and Tool Co., Inc. of Pennsylvania. It is located on a 3.25 acre site and has undergone a number of expansions since it was established in 1962.
(12)	This facility also supports the operations of American Machine and Tool Co., Inc. of Pennsylvania. It is located on a 2.2 acre site and has undergone two expansions since it was established in 1982. Ten thousand square feet of this facility was leased to an unrelated company under a 60 month agreement which ended April 1, 2009.
(13)	The Oklahoma facility is located on 4.5 acres of land. Originally built in 1973, the facility was expanded four times between 1978 and 1991. In 1980, a contiguous parcel of two acres of undeveloped land was purchased for future needs.
(14)	This leased warehousing facility near Leeuwarden, The Netherlands is used by Gorman-Rupp Europe B.V. for storage of product, and by the Mansfield Division as a warehouse for distributing product principally to European customers. The ending date for the lease agreement is December 31, 2012.
(15)	This leased warehousing facility near Leeuwarden, The Netherlands is used by Gorman-Rupp Europe B.V. for office facilities, the assembly of pumps and the storage of product. The ending date for the lease agreement is December 31, 2012.
(16)	This leased warehousing facility in Culemborg, The Netherlands is used by Gorman-Rupp Europe B.V. for storage of product. The ending date for the lease agreement is December 31, 2012.
(17)	This leased warehousing facility in Culemborg, The Netherlands is used by Gorman-Rupp Europe B.V. for storage of product. The ending date for the lease agreement is July 31, 2012.
(18)	The Nevada facility consists of office and warehouse space. The Company utilizes 13,000 square feet of the facility, and 13,000 square feet is leased on a month to month basis to an unrelated party.
(19)	This leased warehousing facility is used by the Mansfield Division for distributing product principally to customers in Asia. The lease is on a month to month basis.

Gorman-Rupp 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.

7

PART I — CONTINUED

ITEM 3. LEGAL PROCEEDINGS

For more than ten years, numerous business entities in the pump and fluid-handling industries, as well as a multitude of companies in many other industries, have been targeted in a series of lawsuits in several jurisdictions by various individuals seeking redress to claimed injury as a result of the entities’ alleged use of asbestos in their products. The Company and two of its subsidiaries remain drawn into this mass-scaled litigation, typically as one of hundreds of co-defendants in a particular proceeding. (The vast majority of these cases are against Patterson Pump Company.) The allegations in the lawsuits involving the Company and/or its subsidiaries are vague, general and speculative, and most cases have not advanced beyond the early stage of discovery. In certain situations, the plaintiffs have voluntarily dismissed the Company and/or its subsidiaries from some of the lawsuits after the plaintiffs have acknowledged that there is no basis for their claims. In other situations, the Company and/or its subsidiaries have been dismissed from some of the lawsuits as a result of court rulings in favor of motions to dismiss and/or motions for summary judgment. In thirty-two cases, the Company and/or its subsidiaries have entered into nominal economic settlements recommended and paid for by insurers, coupled with dismissal of the lawsuits. Insurers of the Company have engaged legal counsel to represent the Company and its subsidiaries and to protect their interests.

In addition, the Company and/or its subsidiaries are parties in a small number of legal proceedings arising out of the ordinary course of business. Management does not currently believe that these proceedings, or the industry-wide asbestos litigation, will materially impact the Company’s results of operations, liquidity or financial condition.

ITEM 4.    RESERVED

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8

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 9 of this Form 10-K is set forth below.

				Date
				Elected to
Name	Age		Office	Position
James C. Gorman		85	Chairman		1989
Jeffrey S. Gorman		57	President and Chief Executive Officer		1998
Wayne L. Knabel		63	Chief Financial Officer		2009
David P. Emmens		61	Corporate Counsel and Corporate Secretary		2002

Except as noted, each of the above-named officers has held his or her executive position with the Company for the past five years. Mr. J. C. Gorman served as the Company’s President from 1964 until 1989, and as Chief Executive Officer from 1964 until 1996. (He has served as a Director of the Company continuously since 1946.) Mr. J. S. Gorman was elected President and Chief Executive Officer effective May 1, 1998, after having served as Senior Vice President since 1996. Mr. J. S. Gorman also held the position of General Manager of the Mansfield Division from 1989 through 2005. He served as Assistant General Manager from 1986 to 1988; and he held the office of Corporate Secretary from 1982 to 1990. (He has served as a Director of the Company continuously since 1989.) Mr. Knabel was elected Chief Financial Officer effective May 1, 2009. Mr. Knabel previously served as Vice President Finance since May 1, 2008. Mr. Knabel joined the Company in March 2008. He previously served as Chief Financial Officer at Arthur Middleton Capital Holdings from 2003 to 2008, which manufactures and distributes over-the-counter nutraceuticals and performs direct marketing. Mr. Emmens joined the Company as Corporate Counsel in 1997, and was elected as Corporate Secretary in 2002. He served as Assistant Corporate Secretary from 1999 to 2002. Mr. J. S. Gorman is the son of Mr. J. C. Gorman. Mr. Christopher H. Lake, a Director of the Company, is the son of Dr. Peter B. Lake, also a Director. There are no other family relationships among any of the Executive Officers and Directors of the Company.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Attention is directed to the section “Ranges of Stock Prices” and the data below pertaining to the shareholder information reported by the Transfer Agent and Registrar on page 34 in the Company’s 2009 Annual Report to Shareholders, which is incorporated herein by this reference.

Attention is also directed to the “Shareholder Return Performance Presentation” on page 34 in the Company’s 2009 Annual Report to Shareholders, which is incorporated herein by this reference.

9

PART II — CONTINUED

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES — CONTINUED

The Company did not repurchase any of its Common Shares during the fourth quarter of the period covered by this Form 10-K.

ITEM 6. SELECTED FINANCIAL DATA

Attention is directed to the section “Eleven Year Summary of Selected Financial Data” on pages 30 and 31 in the Company’s 2009 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 pages 24 – 27, and to the section “Safe Harbor Statement” on page 35, in the Company’s 2009 Annual Report to Shareholders, which are incorporated herein by this reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Attention is directed to the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 24 – 27, and to the section “Safe Harbor Statement” on page 35, in the Company’s 2009 Annual Report to Shareholders, which are incorporated herein by this reference. The Company’s foreign operations do not involve material market risks due to their small size, both individually and collectively. As indicated in paragraph 11 on page 25 referenced above, the Company has no material market risk exposures required to be reported by Item 305 of Regulation S-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Attention is directed to the Company’s consolidated financial statements, the notes thereto and the report of the independent registered public accounting firm thereon on pages 10 – 23, and to the section “Summary of Quarterly Results of Operations” on pages 30 and 31, in the Company’s 2009 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.

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PART II — CONTINUED

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. An evaluation was carried out under the supervision and with the participation of the Company’s Management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Based on that evaluation, the principal executive officer and the principal financial officer have concluded that the Company’s disclosure controls and procedures maintained effective internal control over financial reporting as of December 31, 2009.

Management’s Report on Internal Control over Financial Reporting

There were no material weaknesses identified at any Division or Subsidiary of the Company during 2009. The 2009 Report of Management on Internal Control over Financial Reporting and the related Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting are incorporated herein by this reference from pages 28 and 29 of the Company’s 2009 Annual Report to Shareholders.

Changes in Internal Control over Financial Reporting

There were no other changes in the Company’s disclosure controls and procedures that occurred during the most recent fiscal year that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Subsequent to the date of the evaluation, there have been no significant changes in the Company’s disclosure controls and procedures that could significantly affect the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

The Company has no information required to be disclosed in a report on Form 8-K during the fourth quarter of the year covered by this report on Form 10-K that has not otherwise been reported on a Form 8-K.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

With respect to Directors, attention is directed to the sections “Election of Directors”, “Board of Directors and Directors’ Committees” and “Audit Review Committee Report” in the Company’s definitive Notice of 2010 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.

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PART III — CONTINUED

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE — CONTINUED

With respect to executive officers, attention is directed to Part I of this Form 10-K.

The Company has adopted a Code of Ethics that applies to its President and Chief Executive Officer and Chief Financial Officer (as well as to all employees, officers and Directors). The Code of Ethics is set forth as an exhibit to this Form 10-K. In addition, the Code of Ethics is posted on the Company’s website accessible through its Internet address of www.gormanrupp.com (under the heading “Investor Relations” and the sub-heading “Corporate Governance”).

ITEM 11. EXECUTIVE COMPENSATION

Attention is directed to the sections “Board of Directors and Directors’ Committees”, “Executive Compensation”, “Compensation Discussion and Analysis”, “Pension Benefits” and “Compensation Committee Report” in the Company’s definitive Notice of 2010 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 AND RELATED STOCKHOLDER MATTERS

Attention is directed to the sections “Principal Shareholders”, “Election of Directors” and “Shareholdings by Named Executive Officers” in the Company’s definitive Notice of 2010 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.

On May 22, 1997, the Company’s Board of Directors adopted a Non-Employee Directors’ Compensation Plan. This Plan became effective without shareholder approval and constitutes the Company’s only equity compensation plan. The Plan provides (originally through 2006) for share compensation for regular services performed by each of the Company’s non-employee Directors. In addition to cash compensation, non-employee Directors receive an automatic award of 500 Common Shares (from the Company’s treasury) on each July 1. On July 27, 2006, the Company’s Board of Directors adopted a resolution extending the Non-Employee Directors’ Compensation plan for an additional term until the earlier of (i) May 21, 2017, (ii) at such time as all of the Company’s Common Shares authorized for award under the Plan and registered under Form S-8 Registration Statement No. 333-30159 shall have been awarded and issued, (iii) at such time as the Company deregisters any Common Shares not issued under the foregoing Registration Statement, or (iv) at such time as the Plan is terminated by action of the Board of Directors. The number of Common Shares which may be awarded under the Plan cannot exceed 50,000, subject to certain conditions (e.g., stock splits, stock dividends).

12

PART III — CONTINUED

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS — CONTINUED

As of December 31, 2009, 37,000 Common Shares had been issued to non-employee Directors and 35,085 Common Shares remained available for future issuance. (6,875 Common Shares were added as a result of the 5 for 4 stock split effective September 10, 2004; 7,093 Common Shares were added as a result of the 5 for 4 stock split effective December 8, 2006; and 8,117 Common Shares were added as a result of the 5 for 4 stock split effective December 10, 2007). No options, warrants or rights are available for issuance under the Plan. Attention is directed to the section “Board of Directors and Directors’ Committees” in the Company’s definitive Notice of 2010 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.

EQUITY COMPENSATION PLAN INFORMATION

	Number of securities
	to be issued upon		Weighted average
	exercise of outstanding		exercise price of		Number of securities
	options, warrants and		outstanding options,		remaining available
Plan Category	rights		warrants and rights		for future issuance
Non-Employee Directors’ Compensation Plan (not approved by shareholders)		-0-	$	-0-		35,085
Equity compensation plans approved by shareholders		—		—		—
Total		-0-	$	-0-		35,085

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Attention is directed to the section “Board of Directors and Directors’ Committees” in the Company’s definitive Notice of 2010 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.

The Company has no relationships or transactions required to be reported by Item 404 of Regulation S-K.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Attention is directed to the section “Appointment of Independent Registered Public Accounting Firm” in the Company’s definitive Notice of 2010 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.

13

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report:

1.	Financial Statements
	With respect to the audited 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, 2009 and 2008
(ii)	Consolidated statements of income—Years ended
(iii)	December 31, 2009, 2008 and 2007
(iv)	Consolidated statements of shareholders’ equity—Years ended
(v)	December 31, 2009, 2008 and 2007
(vi)	Consolidated statements of cash flows—Years ended
(vii)	December 31, 2009, 2008 and 2007
(viii)	Notes to consolidated financial statements
(ix)	2009 Report of independent registered public accounting firm on consolidated financial statements
(x)	2009 Report of management on internal control over financial reporting
(xi)	2009 Report of independent registered public accounting firm on internal control over financial reporting

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
(14)	Code of ethics
(21)	Subsidiaries of the registrant
(23)	Consents of experts
(24)	Powers of attorney
(31)	Rule 13a-14(a)/15d-14(a) Certifications
(32)	Section 1350 Certifications

14

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:	DAVID P. EMMENS David P. Emmens
	Attorney-In-Fact

Date: March 5, 2010

15

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.

*JEFFREY S. GORMAN Jeffrey S. Gorman	President and Chief Executive Officer and Director (Principal Executive Officer)
*WAYNE L. KNABEL Wayne L. Knabel	Chief Financial Officer (Principal Financial and Accounting Officer)
*JAMES C. GORMAN James C. Gorman	Director
*M. ANN HARLAN M. Ann Harlan	Director
*THOMAS E. HOAGLIN Thomas E. Hoaglin	Director
*CHRISTOPHER H. LAKE Christopher H. Lake	Director
*PETER B. LAKE Peter B. Lake	Director
*RICK R. TAYLOR Rick R. Taylor	Director
*W. WAYNE WALSTON W. Wayne Walston	Director

* 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 5, 2010

By:	/s/ DAVID P. EMMENS David P. Emmens
	Attorney-In-Fact

16

ANNUAL REPORT ON FORM 10-K

THE GORMAN-RUPP COMPANY

For the Year Ended December 31, 2009

EXHIBIT INDEX

Exhibit			Page
Number		Description	Number
	(3)(4)	Amended Articles of Incorporation, as amended		*
	(3)(4)	Regulations		*
	(10)(a)	Form of Indemnification Agreement between the Company and its Directors and Officers		**
	(10)(b)	Non-Employee Directors’ Compensation Plan		***
	(13)	Incorporated Portions of 2009 Annual Report to Shareholders		18
	(14)	Code of Ethics		42
	(21)	Subsidiaries of the Company		45
	(23)	Consent of Independent Registered Public Accounting Firm		46
	(24)	Powers of Attorney		47
	(31)(a)	Certification of Chief Executive Officer (Section 302 of the Sarbanes-Oxley Act of 2002)		50
	(31)(b)	Certification of Chief Financial Officer (Section 302 of the Sarbanes-Oxley Act of 2002)		51
	(32)	Certification Pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		52

*	Incorporated herein by this reference from Exhibit (3) (4) of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.
**	Incorporated herein by this reference from Exhibit (10) (a) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.
***	Incorporated herein by this reference from Exhibit (10) (b) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

17

EX-13

EXHIBIT (13)

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of
The Gorman-Rupp Company

We have audited the accompanying consolidated balance sheets of The Gorman-Rupp Company as of December 31, 2009 and 2008, and the related consolidated statements of income, equity, and cash flows for each of the three years in the period ended December 31, 2009. 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 the standards of the Public Company Accounting Oversight Board (United States). 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Gorman-Rupp Company at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Gorman-Rupp Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 5, 2010 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Cleveland, Ohio
March 5, 2010

18

Consolidated Statements of Income

	Year ended December 31,
(Thousands of dollars, except per share amounts)	2009			2008			2007
Net sales	$	266,242		$	330,646		$	305,562
Cost of products sold		204,469			253,557			238,110
Gross profit		61,773			77,089			67,452
Selling, general and administrative expenses		35,380			38,101			34,567
Operating income		26,393			38,988			32,885
Other income		1,209			2,113			2,574
Other expense		(347	)		(607	)		(76	)
Income before income taxes		27,255			40,494			35,383
Income taxes		8,986			13,297			12,524
Net income	$	18,269		$	27,197		$	22,859
Earnings per share	$	1.09		$	1.63		$	1.37
Average number of shares outstanding		16,709,047			16,705,210			16,701,175

See notes to consolidated financial statements.

19

Consolidated Balance Sheets

	December 31,
(Thousands of dollars)	2009		2008
Assets
Current assets:
Cash and cash equivalents	$	44,403	$	23,793
Short-term investments		1,505		—
Accounts receivable		37,239		48,200
Inventories:
Raw materials and in-process		22,087		32,996
Finished parts		16,026		20,288
Finished products		2,393		3,597
		40,506		56,881
Deferred income taxes		2,333		1,198
Prepaid and other		5,414		4,194
Total current assets		131,400		134,266
Property, plant and equipment:
Land		1,259		1,694
Buildings		83,293		71,900
Machinery and equipment		124,019		104,436
		208,571		178,030
Accumulated depreciation		100,048		97,624
Property, plant and equipment — net		108,523		80,406
Deferred income taxes		864		6,883
Other		8,637		9,983
	$	249,424	$	231,538

See notes to consolidated financial statements.

20

	December 31,
	2009			2008
Liabilities and equity
Current liabilities:
Accounts payable	$	8,972		$	15,878
Short-term debt		15,000			—
Payroll and related liabilities		6,909			7,442
Commissions payable		4,348			5,246
Accrued expenses		5,098			4,641
Accrued postretirement and medical benefits		2,848			2,362
Total current liabilities		43,175			35,569
Retirement benefits		5,044			11,421
Postretirement benefits		22,270			24,020
Deferred and other income taxes		1,323			1,322
Equity:
Common shares, without par value:
Authorized — 35,000,000 shares;
Outstanding — 16,710,535 shares in 2009 and 16,707,535 shares in 2008 (after deducting treasury shares of 601,683 in 2009 and 604,683 in 2008) at stated capital amount		5,100			5,099
Retained earnings		182,875			171,312
Accumulated other comprehensive loss		(11,070	)		(17,823	)
The Gorman-Rupp Company shareholders’ equity		176,905			158,588
Noncontrolling interest		707			618
Total equity		177,612			159,206
	$	249,424		$	231,538

21

Consolidated Statements of Equity

						Accumulated
						Other
	Common		Retained			Comprehensive			Noncontrolling
(Thousands of dollars, except per share amounts)	Shares		Earnings			Income (Loss)			Interest			Total
Balances January 1, 2007	$	5,097	$	135,268		$	(12,223	)	$	—		$	128,142
Adoption of FASB Interpretation No. 48				(253	)								(253	)
Acquired noncontrolling interest										472			472
Comprehensive income:
Net income				22,859						18			22,877
Foreign currency translation adjustments							2,252			30			2,282
Pension and OPEB adjustments (net of income tax expense of $343)							2,846						2,846
Total comprehensive income		—		22,859			5,098			48			28,005
Issuance of 3,000 treasury shares		1		96									97
Cash dividends — $0.388 a share				(6,503	)								(6,503	)
Balances December 31, 2007		5,098		151,467			(7,125	)		520			149,960
Change in Pension and OPEB measurement date				(837	)								(837	)
Comprehensive income:
Net income				27,197						140			27,337
Foreign currency translation adjustments							(3,117	)		(42	)		(3,159	)
Pension and OPEB adjustments (net of income tax benefit of $4,864)							(7,581	)					(7,581	)
Total comprehensive income (loss)		—		27,197			(10,698	)		98			16,597
Issuance of 4,500 treasury shares		1		167									168
Cash dividends — $0.400 a share				(6,682	)								(6,682	)
Balances December 31, 2008		5,099		171,312			(17,823	)		618			159,206
Comprehensive income:
Net income				18,269						75			18,344
Foreign currency translation adjustments							1,750			14			1,764
Pension and OPEB adjustments (net of income tax expense of $2,831)							5,003						5,003
Total comprehensive income		—		18,269			6,753			89			25,111
Issuance of 3,000 treasury shares		1		61									62
Cash dividends — $0.405 a share				(6,767	)								(6,767	)
Balances December 31, 2009	$	5,100	$	182,875		$	(11,070	)	$	707		$	177,612

See notes to consolidated financial statements.

22

Consolidated Statements of Cash Flows

	Year ended December 31,
(Thousands of dollars)	2009			2008			2007
Cash flows from operating activities:
Net income	$	18,269		$	27,197		$	22,859
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,955			7,848			7,597
Deferred income taxes		4,776			(2,154	)		2,490
Changes in operating assets and liabilities:
Accounts receivable		10,961			(944	)		(1,103	)
Inventories		14,979			(3,658	)		(1,773	)
Accounts payable		(6,906	)		1,716			3,376
Commissions payable		(898	)		238			833
Income taxes		698			(1,762	)		570
Pension benefits		(3,248	)		2,429			(2,475	)
Other		742			(2,606	)		(9	)
Proceeds from insured loss		1,305			1,093			2,470
Net cash provided by operating activities		49,633			29,397			34,835
Cash flows from investing activities:
Capital additions — net		(38,071	)		(27,909	)		(12,826	)
Proceeds from insured loss		95			428			530
(Purchases) redemption of short-term investments		(1,500	)		5,586			(1,385	)
Proceeds from sale of product line		1,420			—			—
Payment for acquisition		—			—			(3,693	)
Net cash used for investing activities		(38,056	)		(21,895	)		(17,374	)
Cash flows from financing activities:
Cash dividends		(6,767	)		(6,682	)		(6,503	)
Proceeds from bank borrowings		24,806			—			—
Payments to bank for borrowings		(9,806	)		—			—
Net cash provided by (used for) financing activities		8,233			(6,682	)		(6,503	)
Effect of exchange rate changes on cash		800			(1,631	)		992
Net increase (decrease) in cash and cash equivalents		20,610			(811	)		11,950
Cash and cash equivalents:
Beginning of year		23,793			24,604			12,654
End of year	$	44,403		$	23,793		$	24,604

See notes to consolidated financial statements.

23

Notes to Consolidated Financial Statements
(Amounts in tables in thousands of dollars)

Note A — Summary of Major Accounting Policies

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Earnings per share are calculated based on the weighted-average number of common shares outstanding.

Cash Equivalents and Short-Term Investments

The Company considers highly liquid instruments with maturities of 90 days or less to be cash equivalents. The Company periodically makes short-term investments for which cost approximates fair value. Short term investments at December 31, 2009 consist of certificates of deposit.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products delivered. The Company estimates this allowance based on knowledge of the financial condition of customers, review of historical receivables and reserve trends, and other pertinent information.

Inventories

Inventories are stated at the lower of cost or market. The costs for approximately 90% of inventories at December 31, 2009 and 92% at December 31, 2008 are determined using the last-in, first-out (LIFO) method, with the remainder determined using the first-in, first-out method. Cost components include materials, inbound freight costs, labor and an appropriate proportion of fixed and variable overheads, on an absorption costing basis.

Property, Plant and Equipment

Property, plant and equipment are stated on the basis of cost. Repairs and maintenance costs are expensed as incurred. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets and is included in cost of products sold and selling, general and administrative expenses, as appropriate.

The estimated useful life generally ranges from 20 to 50 years for buildings and 5 to 15 years for machinery and equipment. Software is amortized over 3 to 5 years. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recovered through future net cash flows generated by the assets. Impairment losses are recorded when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts.

Goodwill and Intangibles

Goodwill recognized in connection with business acquisitions is not amortized to expense. Goodwill is tested annually for impairment as of October 1 each year, or whenever events or changes in circumstances indicate there may be a possible permanent loss of value. The Company completed its annual impairment test for goodwill as of October 1 of each year presented using discounted cash flow and other valuation techniques. These tests confirmed that the fair value of the Company’s reporting units exceeds their respective carrying values and that no impairment loss was required to be recognized in 2009 or for any prior periods.

Goodwill is tested for impairment at the reporting unit level and is based on the net assets for each reporting unit, including goodwill and intangible assets. A discounted cash flow model is used to estimate the fair value of each reporting unit, which considers forecasted cash flows discounted at an estimated weighted-average cost of capital. The forecasted cash flows are based on the Company’s long-term operating plan and the weighted-average cost of capital is an estimate of the overall after-tax rate of return. Other valuation techniques including comparative market multiples are used when appropriate. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.

Amortization of other intangible assets is calculated on the straight-line basis using the following lives:

Sales contracts	18 years
Drawings	15 years
Program logic	10 years
Customer relationships	9 years
Non-compete agreements	2-3 years

Revenue Recognition

Revenue from product sales is recognized when the risks and rewards of ownership and title pass, which usually occurs upon shipment to the customer.

24

Concentration of Credit Risk

The Company does not require collateral from its customers and has a good collection history. There were no sales to a single customer that exceeded 10% of total net sales for the years ended December 31, 2009, 2008 or 2007.

Shipping and Handling Costs

The Company classifies all amounts billed to customers for shipping and handling as revenue and reflects shipping and handling costs in cost of products sold.

Advertising

The Company expenses all advertising costs as incurred, which for the years ended December 31, 2009, 2008 and 2007 totaled $2.7 million, $3.6 million, and $3.2 million, respectively.

Product Warranties

A liability is established for estimated future warranty and service claims based on historical claim experience and specific product failures. The Company expenses warranty costs directly to cost of products sold. Changes in the Company’s product warranty liability are as follows:

	2009			2008
Balance at beginning of year	$	2,048		$	1,682
Warranty costs accrued		1,915			3,231
Expenses		(2,100	)		(2,865	)
Balance at end of year	$	1,863		$	2,048

Foreign Currency Translation

Assets and liabilities of the Company’s operations outside the United States which are accounted for in a functional currency other than U.S. dollars are translated into U.S. dollars using year-end exchange rates. Revenues and expenses are translated at weighted-average exchange rates effective during the year. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within shareholders’ equity.

Gains and losses resulting from foreign currency transactions, the amounts of which are not material, are included in net income.

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.

New Accounting Pronouncements

In 2009, the Company adopted the revised standard which changes the accounting and reporting for minority interests. The new guidance requires minority interest to be recharacterized as noncontrolling interests and classified as a component of equity. The Company has a 10% noncontrolling interest in its investment in Gorman-Rupp Europe B.V. As a result of the adoption of this standard, prior period amounts of noncontrolling interest were reclassified to stockholders’ equity to conform to the current period presentation. Income attributable to noncontrolling interest is not material and is therefore not presented separately in the consolidated statements of income, but rather is included in other expense. The adoption of this standard did not have a material effect on the Company’s financial position, results of operations or cash flows.

In 2009, the Company adopted the new guidance which requires employers to disclose additional information about fair value measurements of employee benefit plan assets. Specifically, employers are required to disclose information about how investment allocation decisions are made, the fair value of each major category of employee benefit plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of employee benefit plan assets. Refer to Note G — Pensions and Other Postretirement Benefits.

In 2009, the Company adopted the new subsequent events standard, as amended, which established general guidance for accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued. The Company has evaluated subsequent events through the date the financial statements were issued, noting no events that require adjustment of, or disclosure in, the consolidated financial statements for the period ended December 31, 2009.

25

Notes to Consolidated Financial Statements — Continued

In 2009, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standard (FAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FAS No. 162, which establishes the FASB Accounting Standards Codification (ASC) as the source of authoritative accounting principles recognized by the FASB to be applied in the preparation of financial statements in conformity with generally accepted accounting principles (GAAP). FAS 168 explicitly recognizes rules and interpretive releases of the Securities and Exchange Commission (SEC) under federal securities laws as authoritative GAAP for SEC registrants. Pursuant to the provisions of the Codification, the Company has updated references to U.S. GAAP in these consolidated financial statements. The adoption of the Codification did not have an effect on the Company’s financial position, results of operations or cash flows.

Note B — Allowance for Doubtful Accounts

The allowance for doubtful accounts was $507,000 and $484,000 at December 31, 2009 and 2008, respectively.

Note C — Inventories

The excess of replacement cost over LIFO cost is approximately $47.6 million and $49.8 million at December 31, 2009 and 2008, respectively. Replacement cost approximates current cost. Some inventory quantities were reduced during 2009 and 2008 resulting in liquidation of some LIFO quantities carried at lower costs from earlier years versus current year costs. The related effect increased net income by $1.9 million in 2009 ($.12 per share) and $907,000 ($0.05 per share) in 2008. Reserves for excess and obsolete inventory totaled $2.2 million and $2.3 million at December 31, 2009 and 2008, respectively.

Note D — Financing Arrangements

Under an unsecured bank loan agreement which matures in November 2010, the Company may borrow up to $15.0 million with interest at LIBOR plus .75%, adjustable and payable monthly. At December 31, 2009, $15.0 million was outstanding against this agreement to partially finance the consolidation and expansion of the Company’s Mansfield, Ohio manufacturing and office facilities which were substantially completed in 2009.

Under an unsecured bank line of credit which matures in November 2010, the Company may borrow up to $20.0 million with interest at LIBOR plus .75% or at alternative rates as selected by the Company. At December 31, 2009, $19.6 million were available for borrowing after deducting $400,000 for outstanding letters of credit.

The Company also has a $6.0 million unsecured bank line of credit which matures in May 2010. At December 31, 2009, $2.6 million were available for borrowing after deducting $3.4 million for letters of credit. Interest is payable quarterly at LIBOR plus .55% to 1.0% or at alternative rates as selected by the Company.

The financing arrangements described above contain restrictive covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios. At December 31, 2009, the Company was in compliance with all requirements.

Interest expense which approximates interest paid, was $170,000, $45,000 and $49,000 in 2009, 2008 and 2007, respectively. Additionally, interest capitalized as part of the Mansfield, Ohio construction project in 2009 totaled $109,000.

The Company has operating leases for certain offices, manufacturing facilities, land, office equipment and automobiles. Rental expenses relating to operating leases were $741,000, $762,000 and $691,000 in 2009, 2008 and 2007, respectively. The future minimum lease payments due under these operating leases are:

			Less						More
			than 1		1-3		3-5		than 5
	Total		Year		Years		Years		Years
Operating leases	$	3,763	$	519	$	884	$	792	$	1,568

Note E — Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss as reported in the Consolidated Balance Sheets are:

	2009			2008
Foreign currency translation adjustments	$	675		$	(1,075	)
Pension and OPEB adjustments (net of income tax benefits of $7,544 in 2009 and $10,375 in 2008)		(11,745	)		(16,748	)
	$	(11,070	)	$	(17,823	)

Note F — Income Taxes

The components of income before income taxes are:

	2009		2008		2007
United States	$	25,213	$	35,939	$	33,243
Foreign countries		2,042		4,555		2,140
	$	27,255	$	40,494	$	35,383

26

The components of income tax expense are as follows:

	2009			2008			2007
Current expense:
Federal	$	4,975		$	8,945		$	10,347
Foreign		734			1,173			713
State and local		644			504			1,153
		6,353			10,622			12,213
Deferred expense (credit):
Federal		2,961			2,668			225
Foreign		(142	)		(288	)		(15	)
State and local		(186	)		295			101
		2,633			2,675			311
Income tax expense	$	8,986		$	13,297		$	12,524

The reconciliation between income tax expense and the amount computed by applying the statutory federal income tax rate of 35% to income before income taxes is as follows:

	2009			2008			2007
Income taxes at statutory rate	$	9,539		$	14,173		$	12,384
State and local income taxes, net of federal tax benefit		298			519			815
Tax credits		(300	)		(1,232	)		(350	)
IRC Section 199		(216	)		(551	)		(508	)
Dividend received from foreign subsidiary		—			884			—
Lower foreign taxes differential		(261	)		(709	)		—
Other		(74	)		213			183
Income tax expense	$	8,986		$	13,297		$	12,524

Deferred tax assets and liabilities consist of:

	2009		2008		2007
Deferred tax assets:
Inventories	$	806	$	—	$	—
Accrued liabilities		1,775		2,192		2,140
Postretirement health
benefits obligation		7,793		8,527		9,663
Accrued pension		305		2,632		—
Other		1,745		864		823
Total deferred tax assets		12,424		14,215		12,626
Deferred tax liabilities:
Inventories		—		736		244
Depreciation and amortization		9,579		5,857		6,074
Accrued pension		—		—		840
Total deferred tax liabilities		9,579		6,593		7,158
Net deferred tax assets	$	2,845	$	7,622	$	5,468

The Company made income tax payments of $6.1 million, $10.8 million and $8.9 million in 2009, 2008 and 2007, respectively.

At December 31, 2009, total unrecognized tax benefits were $1.5 million. Of the total, $876,000, if ultimately recognized, would reduce the Company’s annual effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2009			2008			2007
Balance at beginning of year	$	870		$	844		$	987
Additions based on tax positions related to the current year		110			174			242
Additions (reductions) for tax positions of prior years		665			(1	)		(204	)
Reductions due to lapse of applicable statue of limitations		(184	)		(47	)		(4	)
Settlements		—			(100	)		(177	)
Balance at end of year	$	1,461		$	870		$	844

The Company is subject to income taxes in the U.S. federal and various state, local and foreign jurisdictions. Income tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2005. The Company is currently under examination by the Canadian Revenue Agency for tax years ending 2004 – 2006. Management has filed a Competent Authority relief request with both U.S. and Canadian tax authorities to eliminate a double tax treatment dispute. Under the most recent U.S.-Canadian tax protocol, Competent Authority assessments should achieve symmetry under binding arbitration. Any adjustment resulting from Competent Authority resolution of the examination will not have a material impact on the financial position of the Company.

The statutes of limitations in taxing jurisdictions expire in varying periods. The Company has an unrecognized tax benefit of $61,000 which will be recognized if the relevant statute of limitations expires in the next 12 months without the relevant taxing authority examining the applicable return.

27

Notes to Consolidated Financial Statements — Continued

The Company has not provided an estimate for any U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries that might be payable if these earnings were repatriated since the Company considers these amounts to be permanently invested.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense for all periods presented. The Company accrued approximately $391,000 and $201,000 for the payment of interest and penalties at December 31, 2009 and 2008, respectively.

Note G — Pensions and Other Postretirement Benefits

The Company sponsors a defined benefit pension plan covering substantially all employees. Additionally, the Company sponsors a defined contribution pension plan at one location not participating in the defined benefit pension plan.

A 401(k) plan that includes a partial Company match is also available. For substantially all United States employees hired after January 1, 2008, an enhanced 401(k) plan is available instead of the Company’s defined benefit pension plan. Benefits are based on age and years of service. Employees hired prior to January 1, 2008 were not affected by the change.

Total contributions for the defined contribution pension plan and the 401(k) plan in 2009, 2008 and 2007 were $867,000, $932,000 and $821,000, respectively.

The Company also sponsors a non-contributory defined benefit health care plan that provides health benefits to substantially all retirees and their spouses. The Company funds the cost of these benefits as incurred. For measurement purposes, a zero percent annual rate of increase in the per capita cost of covered health care benefits for retirees age 65 and over was assumed for 2009 and is expected to remain constant going forward.

The Company fully recognizes the obligations associated with its defined benefit pension plan and defined benefit healthcare plan in its financial statements.

The following table presents the plans’ funded status as of the measurement date reconciled with amounts recognized in the Company’s consolidated balance sheets:

	Pension						Postretirement
	Benefits						Benefits
	2009			2008			2009			2008
Accumulated benefit obligation at end of year	$	48,123		$	44,672		$	23,919		$	25,578
Change in benefit obligation:
Benefit obligation at beginning of year	$	55,497		$	51,977		$	25,577		$	28,372
Service cost		2,752			3,073			1,213			1,187
Interest cost		3,403			3,567			1,580			1,654
Measurement date change		—			—			—			474
Benefits paid		(5,554	)		(2,902	)		(1,394	)		(1,113	)
Effect of foreign exchange		—			—			103			(143	)
Actuarial (gain) or loss		4,315			(218	)		(3,160	)		(4,853	)
Benefit obligation at end of year		60,413			55,497		$	23,919		$	25,578
Change in plan assets:
Fair value of plan assets at beginning of year		44,076			54,188		$	—		$	—
Actual return on plan assets		10,647			(13,410	)		—			—
Employer contributions		6,200			6,200			1,394			1,113
Benefits paid		(5,554	)		(2,902	)		(1,394	)		(1,113	)
Fair value of plan assets at end of year		55,369			44,076		$	—		$	—
Funded status at end of year	$	(5,044	)	$	(11,421	)
Amounts recognized in the statement of financial position consist of:
Current liabilities	$	—		$	—		$	(1,649	)	$	(1,558	)
Noncurrent liabilities		(5,044	)		(11,421	)		(22,270	)		(24,020	)
	$	(5,044	)	$	(11,421	)	$	(23,919	)	$	(25,578	)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial (gain) or loss	$	26,826		$	31,730		$	(7,537	)	$	(4,607	)
Deferred tax (benefit) charge		(10,408	)		(12,182	)		2,864			1,807
After tax actuarial (gain) or loss	$	16,418		$	19,548		$	(4,673	)	$	(2,800	)

28

	Pension						Postretirement
	Benefits						Benefits
	2009			2008			2009			2008
Components of net periodic benefit cost:
Service cost	$	2,752		$	3,073		$	1,213		$	1,187
Interest cost		3,403			3,567			1,580			1,654
Expected return on plan assets		(3,536	)		(4,893	)		—			—
Recognized actuarial (gain) or loss		2,107			794			(225	)		—
Net periodic benefit cost	$	4,726		$	2,541		$	2,568		$	2,841
Other changes in plan assets and benefit obligations recognized in other comprehensive income are:
Net loss (gain)		(4,903	)		17,290			(3,160	)		(4,847	)
Total income (loss) recognized in net periodic benefit cost and other comprehensive income	$	(177	)	$	19,831		$	(592	)	$	(2,006	)

The prior service cost is amortized on a straight line basis over the average remaining service period of active participants. The gain or loss in excess of the greater of 10% of the benefit obligation or the market related value of assets is amortized on a straight line basis over the average remaining service period of active participants.

	Pension						Postretirement
	Benefits						Benefits
	2009			2008			2009			2008
Weighted-average assumptions used to determine benefit obligations:
Discount rate		5.60	%		6.30	%		5.50	%		6.40	%
Rate of compensation increase		3.50	%		3.50	%		—			—
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate		6.30	%		6.10	%		6.40	%		6.10	%
Expected long-term rate of return on plan assets		8.00	%		8.00	%		—			—
Rate of compensation increase		3.50	%		3.50	%		—			—

The assumption used for the rate of increase in medical costs over the next five years was essentially unchanged in 2009 from 2008. The health-care cost trend rate assumption has a significant effect on the amounts reported. For example, a one-percentage point change in the assumed health care cost trend rate would have the following effects:

	One-Percentage Point
	Increase		Decrease
Effect on total of service and interest cost components in 2009	$	234	$	(212	)
Effect on accumulated postretirement benefit obligation as of December 31, 2009		1,582		(1,528	)

The investment return of the Pension Plan is measured against those of a target portfolio consisting of 60% equities, 35% fixed income securities, and 5% cash equivalents of domestic corporations. Equities (including all convertible securities) may comprise up to 70% of the Pension Plan’s market value, with a minimum requirement of 20%. Fixed income/floating rate securities (including preferred stocks and cash equivalents) should not exceed 80% of the Pension Plan’s market value and may represent as little as 30%. Cash equivalents (including all senior debt securities with less than one year to maturity) may comprise up to 40% of the market value. Non-U.S. corporate securities may comprise up to 35% of the Pension Plan’s market value. The long term growth rate of the Plan is the CPI plus 3%.

Financial instruments included in pension plan assets are categorized into a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology as follows:

Level 1 — Unadjusted quoted prices in active markets that are accessible to the reporting entity at the measurement date for identical assets and liabilities.

Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs for the asset or liability (i.e., supported by little or no market activity). Level 3 inputs include management’s own assessments about the assumptions that market participants would use in pricing assets or liabilities (including assumptions about risk).

The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measure in its entirety.

29

Notes to Consolidated Financial Statements — Continued

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets carried at fair value at December 31, 2009:

	Level 1		Level 2		Level 3		Total
Total assets at fair value (all mutual funds)	$	55,369	$	—	$	—	$	55,369

	Pension
	Benefits
	2009			2008
Asset allocation:
Asset category:
U.S. equity	$	15,219		$	9,762
Non-U.S. equity		4,719			2,912
Balanced		8,531			5,912
U.S. fixed income		24,578			21,989
Cash and cash equivalents		2,322			3,502
Total fair value of plan assets	$	55,369		$	44,077
Target asset allocation:
Equity securities		20-70	%		20-70	%
Debt securities		30-80	%		30-80	%

Contributions

The Company expects to contribute approximately $6.0 million to its pension plan in 2010.

Expected future benefit payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

	2010		2011		2012		2013		2014		Thereafter
Pension	$	4,203	$	3,996	$	5,616	$	6,041	$	6,014	$	31,652
Postretirement		1,694		1,734		1,743		1,783		1,907		11,372

Note H — Business Segment Information

The Company operates principally in one business segment: the design, manufacture and sale of pumps and related fluid control equipment for water, wastewater, construction, industrial, petroleum, original equipment, agriculture, fire protection, heating, ventilation and air conditioning (HVAC), military and other liquid-handling applications. The Company’s pumps are marketed in the United States and Canada through a network of more than 1,000 distributors, through manufacturers’ representatives (for sales to many original equipment manufacturers), through third-party distributor catalogs, and by direct sales. International sales are made primarily through foreign distributors and representatives. The Company sells to more than 100 countries around the world. The components of customer sales, determined based on the location of customers, are as follows:

	2009		%		2008		%		2007		%
United States	$	169,844		64	$	227,423		69	$	217,444		71
Foreign countries		96,398		36		103,223		31		88,118		29
Total	$	266,242		100	$	330,646		100	$	305,562		100

Note I — Other Assets

The major components of other assets are as follows:

	December 31,
	2009			2008
Goodwill	$	4,798		$	4,798
Intangibles:
Trade names		1,020			1,020
Drawings		1,400			1,400
Customer relationships		874			874
Non-compete agreements		709			704
Other intangibles		687			689
Total intangibles		4,690			4,687
Less-accumulated amortization		(2,240	)		(1,862	)
Net intangibles		2,450			2,825
Other assets		1,389			2,360
Total	$	8,637		$	9,983

30

Note J — Flood Insurance Recoveries

The Company maintains insurance coverage, including flood insurance, which provides for reimbursement of losses resulting from property damage, loss of product and business interruption.

In August 2007, the Company’s Mansfield Division assembly facility was damaged by flooding. As of December 31, 2008, the Company incurred costs and damages related to the flood of $5.0 million, all of which were reimbursed, less a $500,000 insurance deductible. These costs included the write-off of inventory and long-lived assets, repair of the property damage and other clean-up costs. The Company maintains replacement value insurance coverage, including flood insurance, which provides for reimbursement of losses resulting from property damage, loss of product and business interruption.

In September 2009, the Company’s Patterson Pump Company subsidiary was damaged by flooding. As of December 31, 2009, the Company incurred costs and damages related to the flood of $2.3 million, less a $50,000 insurance deductible. As of December 31, 2009, the Company received partial reimbursement payments of $1.4 million and recorded a receivable of $834,000 for the remaining insurance recoveries which were received in 2010.

31

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations 2009 Compared to 2008:

The Company recorded net sales of $266.3 million in 2009 compared to record net sales of $330.7 million in 2008, a decrease of $64.4 million or 19.5%. The decline in net sales principally resulted from the severe global recession which negatively impacted sales in most of the markets the Company serves.

The most significant declines in net sales were in the fire protection market of $20.4 million primarily due to the decrease in commercial construction activity, the construction market of $17.0 million and the wastewater market of $14.2 million primarily due to infrastructure related projects being halted in anticipation of federal stimulus funding. Partially offsetting these decreases was an increase of custom pump sales of $4.0 million related to flood control projects.

International sales amounted to $96.4 million in 2009 compared to $103.2 million in 2008, a decrease of $6.8 million, representing a 6.6% decrease from 2008 levels due primarily to the global economic downturn. The related decline in the value of the U.S. dollar helped keep international sales from declining as much as domestic sales. International sales represented 36% and 31% of total sales for the Company in 2009 and 2008, respectively.

The backlog of orders at December 31, 2009 was $93.7 million compared to $107.8 million at December 31, 2008, a decrease of $14.1 million or 13.1%. The backlog decreased primarily due to a lessening of orders in the original equipment market. Substantially all of the current backlog of orders is expected to ship during 2010.

Cost of products sold in 2009 was $204.5 million compared to $253.6 million in 2008, a decrease of $49.1 million or 19.4%. The decrease in cost of products sold was primarily due to lower sales volume, including a $6.8 million decrease in LIFO expense due to reduced inventory levels resulting in partial liquidation of LIFO quantities. Manufacturing costs included decreases in compensation and payroll taxes of $7.0 million and supplies, patterns and tooling of $1.8 million primarily due to lower production levels. Also, warranty expense decreased $1.3 million due to estimates related to lower sales volume and claims experience and profit sharing expense decreased $1.0 million related to lower operating income. Partially offsetting these decreases is increased pension expense of $1.6 million resulting from the significant market value declines in the worldwide equity markets in 2008 which resulted in higher pension expense in 2009. As a percent of net sales, cost of products sold was 76.8% in 2009 compared to 76.7% in 2008. Gross profit was $61.8 million in 2009 compared to $77.1 million in 2008, a decrease of 19.8%. As a percent of net sales, gross profit was 23.2% and 23.3% in 2009 and 2008, respectively.

Selling, general and administrative (SG&A) expenses in 2009 were $35.4 million compared to $38.1 million in 2008, a decrease of $2.7 million. The decrease in SG&A expenses is principally due to lower advertising and travel expenses of $1.6 million and supplies of $418,000 as the previous year included expenses related to the Construction Expo and IFAT trade shows held every three years. In addition, the level of these expenses was curtailed in 2009 due to the economic downturn. Professional services decreased $532,000 primarily due to additional expenses in 2008 relating to computer system upgrades. Compensation and payroll taxes decreased $361,000 principally due to reduced headcount and temporary wage reductions. Partially offsetting these decreases are increases in pension expense of $913,000 resulting from the significant market value declines in the worldwide equity markets in 2008 and in healthcare expense of $217,000 due to increased medical claims and higher medical costs. As a percent of net sales, SG&A expenses were 13.3% during 2009 and 11.5% in 2008.

Other income in 2009 was $1.2 million compared to $2.1 million in 2008, a decrease of $900,000 or 42.9%. Interest income decreased $827,000 primarily due to a decline in interest rates.

Other expense was $347,000 and $607,000 in 2009 and 2008, respectively. The change was primarily due to reduced foreign currency exchange rate losses related to the increase in the value of the Euro and Canadian dollar in relation to the U.S. dollar.

The effective income tax rate was 33.0% in 2009 compared to 32.8% in 2008.

Net income for 2009 was $18.3 million compared to a record $27.2 million in 2008, a decrease of $8.9 million or 32.7%. As a percent of net sales, net income was 6.9% and 8.2% in 2009 and 2008, respectively.

Earnings per share were $1.09 in 2009 compared to $1.63 in 2008, a decrease of $0.54 per share.

Results of Operations 2008 Compared to 2007:

The Company achieved record net sales of $330.7 million in 2008 compared to the previous record of $305.6 million set in 2007, an increase of $25.1 million or 8.2%. The record level of net sales reflected the continued growth in the Company’s core business of fluid-handling applications.

32

Sales of fire pumps for the international market contributed to the strong 2008 results, increasing by over $17 million, offsetting the decline in custom pump shipments from 2007 levels that included the shipment of pumps to New Orleans for a flood control project. Fabrication of components for the original equipment market increased by $9.5 million from 2007 levels. Sales at Gorman-Rupp Europe B.V. increased by $3.5 million reflecting the inclusion of the full year results of Gorman-Rupp Europe, acquired in April, 2007.

International sales amounted to $103.2 million in 2008 compared to $88.1 million in 2007, an increase of $15.1 million, representing a 17.1% increase from 2007 levels. This increase is primarily the result of an increased focus on international growth by the Company and strong global economics. International sales represented 31% and 29% of total sales for the Company in 2008 and 2007, respectively.

The backlog of orders at December 31, 2008 was $107.8 million compared to $116.4 million at December 31, 2007, a decrease of $8.6 million or 7.4%. The backlog decreased primarily as a result of a fourth quarter economic slowdown in orders.

Cost of products sold in 2008 was $253.6 million compared to $238.1 million in 2007, an increase of $15.5 million or 6.5%. As a percent of net sales, cost of products sold was 76.7% in 2008 compared to 77.9% in 2007. The 1.2 percentage point reduction in cost of products sold primarily related to efficiencies on increased volume at the Company’s principal manufacturing facilities. Increases in material costs of $12.1 million, factory supplies of $984,000, and production labor costs and benefits of $819,000 were incurred to support the increase in sales volume. Additional depreciation expense of $656,000 was incurred due to previous years’ investments in machinery, and profit sharing expense increased $489,000 due to higher operating income levels. Gross profit was $77.1 million in 2008 compared to $67.5 million in 2007, an increase of 14.2%. As a percent of net sales, gross profit was 23.3% and 22.1% in 2008 and 2007, respectively.

SG&A expenses in 2008 were $38.1 million compared to $34.6 million in 2007, an increase of $3.5 million. As a percent of net sales, SG&A expenses were 11.5% during 2008 and 11.3% in 2007. Compensation increased $1.0 million as a result of additional staffing due to growth and normal compensation increases. Profit sharing expense increased $479,000 in relation to higher operating income levels. Advertising costs increased $470,000 due to costs associated with the Construction-Exposition Trade Show held once every three years. Travel expenses increased $380,000 due to the trade show and additional travel resulting from the increased sales volume. Computer system upgrades resulted in an increase in professional fees of $300,000.

Other income in 2008 was $2.1 million compared to $2.6 million in 2007, a decrease of $500,000 or 19.2%. Interest income decreased $545,000 as the result of lower cash balances invested during the year and lower interest rates.

Other expense was $607,000 and $76,000 in 2008 and 2007, respectively. The increase was primarily due to foreign currency exchange rate losses related to the decrease in the value of the Euro and Canadian dollar in relation to the U.S. dollar.

The effective income tax rate was 32.8% in 2008 compared to 35.4% in 2007, a decrease of 2.6 percentage points. The lower effective tax rate in 2008 was primarily due to the benefit from tax credits and lower foreign taxes differential.

Net income for 2008 was a record $27.2 million compared to $22.9 million in 2007, an increase of $4.3 million or 18.8%. As a percent of net sales, net income was 8.2% and 7.5% in 2008 and 2007, respectively.

Earnings per share were $1.63 in 2008 compared to $1.37 in 2007, an increase of $0.26 per share.

Cash dividends paid on common shares increased $0.012 per share during 2008 to $0.40 per share and marked the 36th consecutive year of increased cash dividends. The dividend yield at December 31, 2008 was 1.3%.

Trends

The Company is not exposed to material market risks as a result of its export sales or operations outside of the United States. Export sales are denominated predominately in U.S. dollars and made on open account or with a letter of credit.

For more than 10 years, numerous business entities in the pump and fluid-handling industries, as well as a multitude of companies in many other industries, have been targeted in a series of lawsuits in several jurisdictions by various individuals seeking redress to claimed injury as a result of the entities’ alleged use of asbestos in their products. The Company and three of its subsidiaries remain drawn into mass-scale asbestos-related litigation, typically as one of hundreds of co-defendants in a particular proceeding; the vast majority of these cases are against Patterson Pump Company. The allegations in the lawsuits involving the Company and/or its subsidiaries are vague, general and speculative, and most cases have not advanced beyond the early stage of discovery. In certain situations, the plaintiffs have voluntarily dismissed the Company and/or its subsidiaries from some of the lawsuits after the plaintiffs have acknowledged that there is no basis for their claims. In other situations, the Company and/or its subsidiaries have been dismissed from some of the lawsuits as a result of court rulings in favor of motions to dismiss and/or motions for summary judgment. In thirty-two cases, the Company and/or its subsidiaries have entered into nominal economic settlements recommended and paid for by insurers, coupled with dismissal of the lawsuits. Insurers of the Company have engaged legal counsel to represent the Company and its subsidiaries and to protect their interests.

33

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Management does not currently believe that the small number of legal proceedings arising out of the ordinary course of business, or the industry-wide asbestos litigation, will materially impact the Company’s results of operations, liquidity or financial condition.

Liquidity and Sources of Capital

Cash equivalents and short-term investments totaled $45.9 million and there was $15.0 million in bank debt at December 31, 2009. In addition, the Company had $22.2 million available in bank lines of credit after deducting $3.8 million in outstanding letters of credit. The Company was in compliance with all restrictive covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios at December 31, 2009.

Capital expenditures for 2010, consisting principally of machinery and equipment, are estimated to be $5 to $7 million. They are expected to be financed through internally generated funds and existing lines of credit. During 2009, 2008 and 2007, the Company financed its capital improvements and working capital requirements principally through internally generated funds, proceeds from short-term investments and proceeds from a bank loan agreement.

Cash provided by operating activities was $49.6 million, $29.4 million and $34.8 million in 2009, 2008 and 2007, respectively. In 2009, additional cash was generated principally due to lower inventory and accounts receivable balances.

Cash used for investing activities was $38.0 million, $21.9 million and $17.4 million for 2009, 2008 and 2007, respectively. The Company substantially completed construction of the second phase of the consolidation and expansion of its primary manufacturing facility in Mansfield, Ohio. Approximately $54.6 million has been expended for the construction project ($3.4 million less than approved); $30.7 million in 2009, $21.5 million in 2008 and $2.4 million in 2007.

Cash provided by (used for) financing activities was $8.2 million in 2009, ($6.7) million in 2008 and ($6.5) million in 2007. The increase in cash provided in 2009 was due to a net $15.0 million of proceeds from bank borrowings during the year which were used to partially finance the construction project in Mansfield. The remaining $15.0 million of borrowings is expected to be paid back by the end of the third quarter 2010.

On October 22, 2009, the Board of Directors authorized an increase in the payment of quarterly dividends on common stock to $0.105 per share, representing a 5% increase over the dividend paid in the previous quarter and marking the 37th consecutive year of increased dividends. The dividend yield at December 31, 2009 was 1.5%.

The changes in foreign currency translation against the U.S. dollar increased cash by $800,000 in 2009, decreased cash by $1.6 million in 2008 and increased cash by $992,000 in 2007. The increase in 2009 is primarily due to the increase in the value of the Euro and the Canadian dollar compared to the U.S. dollar.

The ratio of current assets to current liabilities was 3.0 to 1 and 3.8 to 1 at December 31, 2009 and 2008, respectively. Management believes that the Company has adequate working capital and financing capabilities, resulting in a healthy, flexible liquidity position.

Critical Accounting Estimates

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. When more than one accounting principle, or the method of its application, is generally accepted, management selects the principle or method that is appropriate in the Company’s specific circumstances. Application of these accounting principles requires management to make estimates about the future resolution of existing uncertainties; as a result, actual results could differ from these estimates.

In preparing these financial statements, management has made its best estimates and judgments of the amounts and disclosures included in the financial statements, giving due regard to materiality. The Company does not believe there is a great likelihood that materially different amounts would be reported under different conditions or using different assumptions pertaining to the accounting policies described below.

Revenue Recognition

Substantially all of the Company’s revenues from product sales are recognized when all of the following criteria are met: persuasive evidence of a sale arrangement exists, the price is fixed or determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectibility is probable. Product delivery occurs when the risks and rewards of ownership and title pass, which usually occurs upon shipment to the customer.

34

Allowance for Doubtful Accounts

The Company evaluates the collectibility of its accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings, substantial down-grading of credit scores, etc.), the Company records a specific allowance for bad debts against amounts due to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for bad debts based on the length of time the receivables are past due. If circumstances change (e.g., an unexpected material adverse change in a major customer’s ability to meet its financial obligations), the Company’s estimates of the recoverability of amounts due could be reduced by a material amount. Historically, the Company’s collection history has been good.

Inventories and Related Allowance

Inventories are valued at the lower of cost or market value and have been reduced by an allowance for excess and obsolete inventories. The estimated allowance is based on a variety of factors, including historical inventory usage and management evaluations. Historically, the Company has not experienced large write-offs due to obsolescence. The Company uses the last-in, first-out (LIFO) method for primarily all of its inventories.

Pension Plans and Other Postretirement Benefit Plans

The Company fully recognizes the obligations associated with its defined benefit pension plan and defined benefit health-care plan in its financial statements.

The measurement of liabilities related to pension plans and other postretirement benefit plans is based on management’s assumptions related to future events including interest rates, return on pension plan assets, compensation increases and health-care cost trend rates. The Company uses a measurement date of December 31 for benefit plan determinations. The discount rates used to determine the present value of future benefits are based on estimated yields of investment grade fixed income investments. The discount rate used to value pension plan obligations was 5.60% and 6.30% in 2009 and 2008, respectively. The discount rate used to value postretirement obligations was 5.50% and 6.30% at December 31, 2009 and 2008, respectively. The expected rate of return on pension assets is designed to be a long-term assumption that will be subject to year-to-year variability. The rate for 2009 and 2008 was 8.00%. Actual pension plan asset performance will either reduce or increase unamortized losses which will ultimately affect net income. The assumed rate of compensation increase was 3.50% in 2009 and 2008.

The assumption used for the rate of increase in medical costs over the next five years was essentially unchanged in 2009 from 2008.

The overall effect of changes noted in the above assumptions will increase (decrease) pension and postretirement expenses.

Income Taxes

The basic principles related to accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns.

Realization of the Company’s deferred tax assets is principally dependent upon the Company’s achievement of projected future taxable income, which management believes will be sufficient to fully utilize the deferred tax assets recorded.

Goodwill and Other Intangibles

The Company accounts for goodwill in a purchase business combination as the excess of the cost over the fair value of net assets acquired. Business combinations can also result in other intangible assets being recognized. Amortization of intangible assets, if applicable, occurs over their estimated useful lives. Goodwill is tested for impairment at the reporting unit level on an annual basis (October 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These analyses require the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates and the timing of expected future cash flows. No reporting unit was at risk of failing the impairment test in 2009 or any prior periods.

Other Matters

Transactions with related parties are in the ordinary course of business and are not material to the Company’s financial position, net income or cash flows. The Company does not have any off-balance sheet arrangements, financings or other relationships with unconsolidated “special purpose entities.” Also, the Company is not a party to any long-term debt agreements, or any material capital leases, operating leases or purchase obligations.

35

Report of Management on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company (as defined in Exchange Act rules 13(a) — 15(f )). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Management and Directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, Management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2009.

The independent registered public accounting firm of Ernst & Young LLP issued an audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. This report is included on the following page.

/s/ JEFFERY S. GORMAN

Jeffrey S. Gorman
President and Chief Executive Officer

/s/ WAYNE L. KNABEL

Wayne L. Knabel
Chief Financial Officer

March 5, 2010

36

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The Board of Directors and Shareholders of
The Gorman-Rupp Company

We have audited The Gorman-Rupp Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Gorman-Rupp Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, The Gorman-Rupp Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of The Gorman-Rupp Company as of December 31, 2009 and 2008, and the related consolidated statements of income, equity, and cash flows for each of the three years in the period ended December 31, 2009 of The Gorman-Rupp Company and our report dated March 5, 2010 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Cleveland, Ohio
March 5, 2010

37

Eleven-Year Summary of Selected Financial Data
(Thousands of dollars, except per share amounts)

	2009		2008		2007		2006
Operating Results:
Net sales	$	266,242	$	330,646	$	305,562	$	270,910
Gross profit		61,773		77,089		67,452		58,676
Income taxes		8,986		13,297		12,524		8,654
Net income		18,269		27,197		22,859		19,072
Depreciation and amortization		8,955		7,848		7,597		6,688
Interest expense		170		45		49		41
Return on net sales (%)		6.9		8.2		7.5		7.0
Sales dollars per employee		264.1		302.5		286.9		258.3
Income dollars per employee		18.1		24.9		21.5		18.2
Financial Position:
Current assets	$	131,400	$	134,266	$	135,288	$	120,118
Current liabilities		43,175		35,569		33,481		27,646
Working capital		88,225		98,697		101,807		92,472
Current ratio		3.0		3.8		4.0		4.3
Property, plant and equipment — net	$	108,523	$	80,406	$	59,970	$	52,351
Capital additions		38,071		27,909		12,826		7,258
Total assets		249,424		231,538		211,534		187,540
Long-term debt		—		—		—		—
Equity		177,612		159,206		149,960		128,142
Dividends paid		6,767		6,682		6,503		6,126
Average number of employees		1,008		1,093		1,065		1,049
Shareholder Information:
Earnings per share	$	1.09	$	1.63	$	1.37	$	1.14
Cash dividends per share		0.405		0.400		0.388		0.365
Equity per share at December 31		10.63		9.53		8.98		7.67
Average number of shares outstanding		16,709,047		16,705,210		16,701,175		16,696,962

Summary of Quarterly Results of Operations
(Thousands of dollars, except per share amounts)

The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2009 and 2008:

							Earnings
Quarter Ended 2009	Net Sales		Gross Profit		Net Income		per Share
First quarter	$	71,598	$	15,345	$	4,506	$	0.27
Second quarter		68,345		15,790		4,867		0.29
Third quarter		64,096		16,100		5,177		0.31
Fourth quarter		62,203		14,538		3,719		0.22
Total	$	266,242	$	61,773	$	18,269	$	1.09

38

2005		2004		2003		2002		2001		2000		1999
$	231,249	$	203,554	$	195,826	$	195,081	$	203,169	$	190,384	$	182,239
	47,071		42,425		41,851		41,451		48,108		48,430		46,347
	6,235		5,075		4,613		5,267		8,450		8,400		8,460
	10,903		9,277		9,787		8,936		14,585		13,796		13,081
	6,808		7,179		7,274		7,035		7,128		6,863		6,489
	25		40		56		72		116		183		55
	4.7		4.6		5.0		4.6		7.2		7.2		7.2
	233.3		211.4		196.4		185.1		195.2		186.5		177.6
	11.0		9.6		9.8		8.5		14.0		13.5		12.7
$	110,501	$	96,974	$	95,718	$	85,315	$	90,575	$	83,745	$	79,641
	28,219		21,112		21,908		19,282		18,103		19,079		17,439
	82,282		75,862		73,810		66,033		72,472		64,666		62,202
	3.9		4.6		4.4		4.4		5.0		4.4		4.6
$	51,505	$	54,812	$	54,338	$	57,757	$	53,895	$	57,885	$	53,609
	3,189		7,500		3,698		5,765		3,139		11,439		16,182
	179,541		165,673		162,395		154,302		149,569		147,337		138,331
	—		—		—		291		—		3,413		3,107
	127,048		121,898		117,918		112,912		109,366		101,455		93,751
	5,983		5,907		5,809		5,550		5,475		5,322		5,152
	991		963		997		1,054		1,041		1,021		1,026
$	0.66	$	0.55	$	0.58	$	0.54	$	0.87	$	0.82	$	0.78
	0.358		0.354		0.348		0.333		0.328		0.318		0.307
	7.61		7.30		7.07		6.77		6.55		6.05		5.59
	16,692,273		16,686,997		16,681,146		16,675,287		16,708,026		16,761,442		16,766,702

							Earnings
Quarter Ended 2008	Net Sales		Gross Profit		Net Income		per Share
First quarter	$	81,434	$	19,844	$	7,152	$	0.43
Second quarter		84,031		20,406		7,895		0.47
Third quarter		84,188		20,172		7,385		0.44
Fourth quarter		80,993		16,667		4,765		0.29
Total	$	330,646	$	77,089	$	27,197	$	1.63

39

Shareholder Information

Set forth above is a line graph comparing the yearly percentage change in the cumulative total shareholder return, including reinvested cash dividends, on the Company’s Common Shares against the cumulative total return of the NYSE Amex Exchange Index and a Peer Group Index for the period of five fiscal years commencing January 1, 2005 and ending December 31, 2009. The issuers in the Peer Group Index were selected on a line-of-business basis by reference to SIC Code 3561—Pumps and Pumping Equipment. The Peer Group Index is composed of the following issuers: Ampco-Pittsburgh Corp., Colfax Corp., Flowserve Corp., Graco Inc., Idex Corp., Pentair Inc., Robbins & Myers Inc. and Roper Industries Inc.

Ranges of Stock Prices

The high and low sales price and dividends per share for common shares traded on the NYSE Amex Exchange were:

	Sales Price of Common Shares
	2009				2008				Dividends Per Share
	High		Low		High		Low		2009		2008
First quarter	$	32.60	$	14.50	$	34.60	$	25.65	$	.100	$	.100
Second quarter		23.96		18.72		45.38		30.60		.100		.100
Third quarter		26.48		18.44		45.85		35.50		.100		.100
Fourth quarter		29.79		22.37		38.91		18.25		.105		.100

Shareholder information reported by Transfer Agent and Registrar, Computershare Investor Services, LLC, February 19, 2010:

	Holders		Shares
Individuals		1,566		2,711,101
Nominees, brokers and others		123		13,999,434
Total		1,689		16,710,535

An additional 601,683 common shares are held in Treasury.

40

Safe Harbor Statement

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, The Gorman-Rupp Company provides the following cautionary statement: This Annual Report contains various forward-looking statements and includes assumptions concerning The Gorman-Rupp Company’s operations, future results and prospects. These forward-looking statements are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, the absence of which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.

Such factors include the following: (1) continuation of the current and projected future business environment, including interest rates and capital and consumer spending; (2) competitive factors and competitor responses to Gorman-Rupp initiatives; (3) successful development and market introductions of anticipated new products; (4) stability of government laws and regulations, including taxes; (5) stable governments and business conditions in emerging economies; (6) successful penetration of emerging economies; and (7) continuation of the favorable environment to make acquisitions, domestic and foreign, including regulatory requirements and market values of candidates.

41

EX-14

EXHIBIT (14)

THE GORMAN-RUPP COMPANY

CODE OF ETHICS

Introduction

This Code of Ethics describes the basic principles of conduct that apply to all employees, officers and Directors of The Gorman-Rupp Company (“Company”). This Code is intended to provide a broad overview of basic ethical principles that guide our conduct. Violation of this Code may result in disciplinary action as deemed appropriate by the Company’s Board of Directors, varying from reprimand to dismissal.

The requirement that we adhere to each of the policies and principles contained in this Code may only be waived by the Board of Directors. The Company will promptly disclose to the Company’s shareholders and the investing public any waiver of this Code.

Compliance with Laws, Rules and Regulations

We strive to comply with all laws, rules and regulations of the places where the Company conducts business.

Conflicts of Interest

We conduct our business affairs in the best interests of the Company and shall therefore avoid situations where our private interests interfere with the Company’s interests. We shall be especially sensitive to situations that have the appearance of impropriety.

Record-Keeping

We require honest and accurate recording and reporting of financial and other information.

All of the Company’s records, accounts and financial statements are maintained in reasonable detail, appropriately reflect its transactions, and conform both to applicable legal and financial accounting requirements.

Public Reporting

We endeavor to make full, fair, accurate, timely and understandable disclosure in reports and documents filed with, or submitted to, the Securities and Exchange Commission and the NYSE Amex and in the Company’s news releases and other public communications.

We require cooperation and open communication with our internal and external auditors. We consider any action to fraudulently influence, coerce, manipulate or mislead any auditor engaged in the performance of an audit of the Company’s financial statements to be an illegal activity.

Insider Trading

Consistent with the federal securities laws, we confirm that the conduct of any person who buys or sells the Company’s securities on the basis of material, non-public information concerning the Company is illegal.

We further confirm the illegal conduct of any person in possession of material, non-public information who provides another person with such information or recommends that he or she buy or sell the Company’s securities. These prohibitions also apply to material, non-public information obtained about any other company during the course of working for the Company.

42

Corporate Opportunities

We do not personally take advantage of opportunities that are discovered because of our position without the prior consent of the Board of Directors. We shall not compete with the Company and shall fulfill our fiduciary duties to the Company to advance its legitimate interests whenever the opportunity to do so arises.

Competition and Fair Dealing

We manage the Company so that it competes fairly and honestly. We do not engage in unethical or illegal business practices such as stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing disclosure of this type of information by past or present employees of other companies. We shall respect the confidentiality of our customers’, suppliers’ and competitors’ information.

Business Entertainment and Gifts

We recognize that business entertainment and gifts are meant to create goodwill and sound working relationships, not to gain unfair advantage with customers or suppliers. We shall not offer, give or accept any gift or entertainment unless it: (i) is not a cash gift, (ii) is consistent with customary business practices, (iii) is not excessive in value, (iv) cannot be construed as a bribe or payoff, and (v) does not violate any laws or regulations.

Discrimination and Harassment

We provide equal opportunity in employment and will not tolerate discrimination or harassment in the workplace. Derogatory comments based on racial or ethnic characteristics, unwelcome sexual advances and similar behavior are prohibited by the Company’s policies.

Health and Safety

We strive to provide a safe and healthful work environment by following safety and health rules and practices.

We do not permit violence or threatening behavior in the workplace.

Confidentiality

We protect the Company’s confidential, proprietary and trade secret information. We also protect information that suppliers and customers have entrusted to the Company on a confidential basis. Our personal obligation to safeguard the Company’s confidential, proprietary and trade secret information continues even after our employment with the Company ends.

Protection and Proper Use of Company Assets

We shall not engage in theft or careless use of the Company’s assets. We shall never use the Company’s assets for illegal purposes.

43

Activities Concerning Foreign Governments

In compliance with the United States Foreign Corrupt Practices Act and The Organization for Economic Co-Operation and Development Anti-Bribery Convention, we do not give anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. We do not promise, offer or deliver to any foreign or domestic government employee or official any gift, favor or other gratuity that would be illegal.

Our policy is to comply with the laws of other nations in which the Company conducts business.

Reporting Illegal or Unethical Behavior

In order to encourage good faith reports of illegal or unethical behavior within the Company to the Company’s Corporate Manager Internal Audit (including violations of this Code), we keep all reports confidential and do not allow retaliation for reports of misconduct by others. We will cooperate in internal investigations of alleged misconduct.

We shall not permit any form of retribution against any employee who, in good faith, reports violations or suspected violations of Company policy.

Conclusion

Our business conduct on behalf of the Company shall be guided by the policies and principles set forth in this Code.

* * * * * * * * * * * *

This Code of Ethics was first authorized, approved and adopted by the Board of Directors of The Gorman-Rupp Company on October 23, 2003 for application to the Company’s Chief Executive Officer, Chief Financial Officer and Treasurer. The Board of Directors expanded the scope of this Code of Ethics by the authorization, approval and adoption of an appropriate resolution on April 22, 2004 so that it applies to all employees, officers and Directors of the Company.

44

EX-21

EXHIBIT (21)

SUBSIDIARIES OF THE COMPANY

The Company has four 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, (iii) Patterson Pump Company, organized under the laws of the State of Ohio; and (iv) American Machine and Tool Co., Inc. of Pennsylvania, organized under the laws of the State of Delaware. The Company has one indirect, wholly-owned subsidiary: Patterson Pump Ireland Limited, a wholly owned subsidiary of Patterson Pump Company, and organized under the laws of the Republic of Ireland. The Company has one indirect, majority-owned subsidiary: Gorman-Rupp of Europe B.V., a 90% owned subsidiary of The Gorman-Rupp International Company, and organized under the laws of The Netherlands. The consolidated financial statements of the Company, filed as a part of this Form 10-K, include the accounts of each such subsidiary.

45

EX-23

EXHIBIT (23)

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Annual Report (Form 10-K) of The Gorman-Rupp Company of our reports dated March 5, 2010, with respect to the consolidated financial statements of The Gorman-Rupp Company, and the effectiveness of internal control over financial reporting of The Gorman-Rupp Company, included in the 2009 Annual Report to Shareholders of The Gorman-Rupp Company.

We also consent to the incorporation by reference in the Registration Statement and in the related Prospectus (Form S-8 No. 333-85982) pertaining to the Employee Stock Purchase Plan of The Gorman-Rupp Company, in the Registration Statement and in the related Prospectus (Form S-8 No. 333-105682) pertaining to the 401(k) Plan of The Gorman-Rupp Company, and in the Registration Statement and in the related Prospectus (Form S-8 No. 333-30159) pertaining to the Non-Employee Directors’ Compensation Plan of The Gorman-Rupp Company of our reports dated March 5, 2010, with respect to the consolidated financial statements of The Gorman-Rupp Company, and the effectiveness of internal control over financial reporting of The Gorman-Rupp Company, incorporated herein by reference in this Annual Report (Form 10-K) for the year ended December 31, 2009.

/s/ ERNST & YOUNG LLP

Cleveland, Ohio
March 5, 2010

46

EX-24

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 February 25, 2010 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 executive 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, as amended, the Company’s 2009 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 Jeffrey S. Gorman, David P. Emmens and Anthony R. Moore, and each of them, hereby are appointed attorneys for the Company, with full power of substitution and resubstitution, for and in the name, place and stead of the Company, to sign and file the Company’s 2009 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 executive 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 this 5th day of March, 2010.

/s/ DAVID P. EMMENS  

David P. Emmens 

Corporate Secretary 

47

POWER OF ATTORNEY

The undersigned, The Gorman-Rupp Company (the “Company”), by the undersigned executive officer of the Company hereunto duly authorized, hereby appoints Jeffrey S. Gorman, David P. Emmens and Anthony R. Moore, and each of them, as attorneys for the Company, with full power of substitution and resubstitution, 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 2009 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 5th day of March 2010.

THE GORMAN-RUPP COMPANY
BY:	/s/ DAVID P. EMMENS
	David P. Emmens
	Corporate Secretary

48

POWER OF ATTORNEY

The undersigned Directors and Officers of The Gorman-Rupp Company (the “Company”) hereby appoint Jeffrey S. Gorman, David P. Emmens, and Anthony R. Moore, and each of them, as attorneys for each of the undersigned, with full power of substitution and resubstitution, 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 2009 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 as of the 25th day of February, 2010

/s/ JEFFREY S. GORMAN Jeffrey S. Gorman	President and Chief Executive Officer and Director (Principal Executive Officer)
/s/ WAYNE L. KNABEL Wayne L. Knabel	Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ JAMES C. GORMAN James C. Gorman	Director
/s/ M. ANN HARLAN M. Ann Harlan	Director
/s/ THOMAS E. HOAGLIN Thomas E. Hoaglin	Director
/s/ CHRISTOPHER H. LAKE Christopher H. Lake	Director
/s/ PETER B. LAKE Peter B. Lake	Director
/s/ RICK R. TAYLOR Rick R. Taylor	Director
/s/ W. WAYNE WALSTON W. Wayne Walston	Director

49

EX-31.(A)

EXHIBIT (31)(a)

CERTIFICATIONS

I, Jeffrey S. Gorman, certify that:

1. I have reviewed this annual report on Form 10-K of The Gorman-Rupp Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 5, 2010	/s/ JEFFREY S. GORMAN
	Jeffrey S. Gorman
	President and Chief Executive Officer The Gorman-Rupp Company (Principal Executive Officer)

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EX-31.(B)

EXHIBIT (31)(b)

CERTIFICATIONS

I, Wayne L. Knabel, certify that:

1. I have reviewed this annual report on Form 10-K of The Gorman-Rupp Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 5, 2010	/s/ WAYNE L. KNABEL
	Wayne L. Knabel
	Chief Financial Officer The Gorman-Rupp Company (Principal Financial Officer)

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EX-32

EXHIBIT (32)

Certification Pursuant to 18 U. S. C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of The Gorman-Rupp Company on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U. S. C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date: March 5, 2010	/s/ JEFFREY S. GORMAN
	Jeffrey S. Gorman
	President and Chief Executive Officer (Principal Executive Officer)

/s/ WAYNE L. KNABEL  

Wayne L. Knabel 

Chief Financial Officer
(Principal Financial Officer) 

The foregoing certification is being furnished solely pursuant to 18 U. S. C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

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