10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended June 30, 2011

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

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 Web site, 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). Yes þ No o

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 “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

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

Common shares, without par value, outstanding at July 29, 2011. 20,987,893

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

The Gorman-Rupp Company and Subsidiaries
Three and Six Months Ended June 30, 2011 and 2010

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Statements of Income -Three months ended June 30, 2011 and 2010 -Six months ended June 30, 2011 and 2010	3
Condensed Consolidated Balance Sheets -June 30, 2011 and December 31, 2010	4
Condensed Consolidated Statements of Cash Flows -Six months ended June 30, 2011 and 2010	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3. Quantitative and Qualitative Disclosures about Market Risk	14
Item 4. Controls and Procedures	14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	14
Item 1A. Risk Factors	14
Item 6. Exhibits	15
Exhibit 31.1
Exhibit 31.2
EX-32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

2

PART I. FINANCIAL INFORMATION

ITEM 1—FINANCIAL STATEMENTS (UNAUDITED)

THE GORMAN-RUPP COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Thousands of dollars, except per share amounts)	2011			2010			2011			2010
Net sales	$	92,159		$	72,380		$	176,233		$	138,166
Cost of products sold		67,910			55,094			130,598			105,431
Gross profit		24,249			17,286			45,635			32,735
Selling, general and administrative expenses		10,768			8,375			21,495			17,134
Operating income		13,481			8,911			24,140			15,601
Other income		110			12			221			137
Other expense		(176	)		(412	)		(318	)		(528	)
Income before income taxes		13,415			8,511			24,043			15,210
Income taxes		4,490			2,855			7,999			5,057
Net income	$	8,925		$	5,656		$	16,044		$	10,153
Earnings per share	$	0.42		$	0.27		$	0.76		$	0.49
Cash dividends paid per share	$	0.090		$	0.084		$	0.174		$	0.168
Weighted average shares outstanding		20,984,893			20,887,825			20,984,893			20,887,996

Shares outstanding and per share data reflect the 5 for 4 stock split effective June 10, 2011.
See notes to condensed consolidated financial statements.

3

THE GORMAN-RUPP COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNADUITED)

	June 30,			December 31,
(Thousands of dollars)	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	25,718		$	32,229
Short-term investments		1,759			2,017
Accounts receivable — net		61,267			51,996
Inventories — net		64,971			51,449
Deferred income taxes and other current assets		4,443			5,503
Total current assets		158,158			143,194
Property, plant and equipment		222,353			216,239
Less accumulated depreciation		108,040			102,713
Property, plant and equipment — net		114,313			113,526
Prepaid pension and other assets		6,685			3,545
Goodwill and other intangible assets		25,953			26,442
Total assets	$	305,109		$	286,707
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	17,770		$	12,042
Short-term debt		20,000			25,000
Payroll and related liabilities		9,742			7,794
Commissions payable		6,881			6,591
Accrued expenses		9,149			8,251
Total current liabilities		63,542			59,678
Postretirement benefits		22,554			22,241
Deferred and other income taxes		4,954			4,954
Total liabilities		91,050			86,873
Shareholders’ equity
Common shares, without par value:
Authorized - 35,000,000 shares
Outstanding - 20,984,893 shares in 2011 and 2010 (after deducting treasury shares of 654,603 in 2011 and 2010) at stated capital amount		5,127			5,127
Additional paid-in capital		2,373			2,400
Retained earnings		214,127			201,735
Accumulated other comprehensive loss		(7,568	)		(9,428	)
Total shareholders’ equity		214,059			199,834
Total liabilities and shareholders’ equity	$	305,109		$	286,707

Shares outstanding reflect the 5 for 4 stock split effective June 10, 2011.
See notes to condensed consolidated financial statements.

4

THE GORMAN-RUPP COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended
	June 30,
(Thousands of dollars)	2011			2010
Cash flows from operating activities:
Net income	$	16,044		$	10,153
Adjustments to reconcile net income attributable to net cash provided by operating activities:
Depreciation and amortization		5,629			5,205
Changes in operating assets and liabilities:
Accounts receivable		(9,271	)		(12,075	)
Inventories		(13,523	)		2,795
Accounts payable		5,728			4,697
Commissions payable		290			3,315
Accrued expenses and other		2,431			2,421
Net cash provided by operating activities		7,328			16,511
Cash flows from investing activities:
Capital additions — net		(5,924	)		(3,966	)
Change in short-term investments		259			(8	)
Net cash used for investing activities		(5,665	)		(3,974	)
Cash flows from financing activities:
Cash dividends		(3,651	)		(3,509	)
Payments to bank for borrowings		(5,000	)		(15,000	)
Purchase of common shares for treasury		—			(648	)
Other		(28	)		—
Net cash used for financing activities		(8,679	)		(19,157	)
Effect of exchange rate changes on cash		505			(567	)
Net decrease in cash and cash equivalents		(6,511	)		(7,187	)
Cash and cash equivalents:
Beginning of year		32,229			44,403
June 30,	$	25,718		$	37,216

See notes to condensed consolidated financial statements.

5

PART I

ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A — BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2011 are not necessarily indicative of results that may be expected for the year ending December 31, 2011. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The Company has evaluated the existence of subsequent events through the filing date of this Form 10-Q.

On April 28, 2011, the Company declared a five-for-four split of its Common Shares in the form of a distribution of one additional Common Share for each four Common Shares previously issued. The distribution was made on June 10, 2011. Accordingly, all number of shares outstanding and per share data throughout this Quarterly Report on Form 10-Q have been adjusted retroactively to reflect the stock split.

NEW ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update No. 2011-05 — “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”)

ASU No. 2011-05 amends existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. Also, items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements. ASU No. 2011-05 requires retrospective application, and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company plans to adopt ASU No. 2011-05 in the first quarter of fiscal 2012. The Company believes the adoption of this update will change the order in which certain financial statements are presented and provide additional detail on those financial statements when applicable, but will not have any other impact on its consolidated financial statements.

NOTE B — INVENTORIES

Inventories are stated at the lower of cost or market. The costs for approximately 81% of inventories at June 30, 2011 and 82% at December 31, 2010 are determined using the last-in, first-out (LIFO) method, with the remainder determined using the first-in, first-out (FIFO) method. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimate of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory valuation.

6

PART I — CONTINUED

ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

NOTE B — INVENTORIES — CONTINUED

The major components of inventories are as follows (net of LIFO reserves):

	June 30,		December 31,
(Thousands of dollars)	2011		2010
Raw materials and in-process	$	28,181	$	20,128
Finished parts		32,632		27,005
Finished products		4,158		4,316
Total inventories	$	64,971	$	51,449

NOTE C — PRODUCT WARRANTIES

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

	June 30,
(Thousands of dollars)	2011			2010
Balance at beginning of year	$	1,543		$	1,863
Provision		610			486
Claims		(717	)		(944	)
Balance at end of period	$	1,436		$	1,405

NOTE D — COMPREHENSIVE INCOME

Comprehensive income and its components, net of tax, are as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Thousands of dollars)	2011		2010			2011		2010
Net income	$	8,925	$	5,656		$	16,044	$	10,153
Changes in cumulative foreign currency translation adjustments		342		(1,401	)		1,285		(1,509	)
Pension and OPEB adjustments		732		246			575		515
Total comprehensive income	$	9,999	$	4,501		$	17,904	$	9,159

7

PART I — CONTINUED

ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

NOTE E — PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company sponsors a defined benefit pension plan covering substantially all employees hired prior to January 1, 2008. 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 graduated Company match is also available. The Company also sponsors a non-contributory defined benefit health care plan that provides health benefits to substantially all retirees and their spouses.

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 with the Company. Employees hired prior to January 1, 2008 were not affected by the change.

The following table presents the components of net periodic benefit cost:

	Pension Benefits						Postretirement Benefits
	Six Months Ended						Six Months Ended
	June 30,						June 30,
(Thousands of dollars)	2011			2010			2011			2010
Service cost	$	1,428		$	1,361		$	526		$	553
Interest cost		1,534			1,577			554			628
Expected return on plan assets		(2,256	)		(2,214	)		—			—
Recognized actuarial (gain) loss		838			788			(328	)		(287	)
Benefit cost	$	1,544		$	1,512		$	752		$	894

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

The Gorman-Rupp Company is a leading designer, manufacturer and international marketer of 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. The Company attributes its success to product quality, application and performance combined with delivery and service, and attempts to continually develop initiatives to improve performance in these key areas. Gorman-Rupp actively pursues growth opportunities through organic growth, international business opportunities and acquisitions.

During the second quarter 2011, the Company continued to experience improved incoming orders and ended the quarter with a record backlog of $154.2 million. Financial results during the quarter and first half continued to improve compared to the same period a year ago, with earnings largely driven by strong North American sales growth and improved operating leverage. Sales and earnings also benefited from the inclusion of National Pump Company acquired on October 1, 2010.

8

PART I — CONTINUED

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

Second Quarter 2011 Compared to Second Quarter 2010

Net Sales

	Three Months Ended
	June 30,
(Thousands of dollars)	2011		2010		$ Change		% Change
Net sales	$	92,159	$	72,380	$	19,779		27.3	%

The increase in net sales during the quarter was due principally to increases in the industrial market of $8.2 million, the agricultural market of $6.0 million, the construction market of $3.4 million and the rental market of $2.1 million. In addition, sales of custom pumps for flood control projects increased $4.6 million. Partially offsetting these increases was a decrease in fire protection market sales of $4.3 million.

Strong incoming orders in the original equipment market along with increased orders in the aforementioned markets during the quarter resulted in a record backlog of $154.2 million at June 30, 2011, a 46.9% increase from a year ago and 43.6% higher than the backlog of $107.4 million at December 31, 2010.

Cost of Products Sold

	Three Months Ended
	June 30,
(Thousands of dollars)	2011			2010			$ Change		% Change
Cost of products sold	$	67,910		$	55,094		$	12,816		23.3	%
% of Net sales		73.7	%		76.1	%

The increase in cost of products sold was primarily due to higher sales volume which resulted in additional material costs of $10.4 million. Manufacturing costs include increased compensation and payroll taxes of $1.4 million principally due to increased headcount and overtime compensation associated with meeting increased customer demand for our products.

Selling, General and Administrative Expenses (SG&A)

	Three Months Ended
	June 30,
(Thousands of dollars)	2011			2010			$ Change		% Change
Selling, general and administrative expenses (SG&A)	$	10,768		$	8,375		$	2,393		28.6	%
% of Net sales		11.7	%		11.6	%

9

PART I — CONTINUED

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

The increase in SG&A expenses is principally due to the business acquisition of National Pump Company on October 1, 2010. In addition, profit sharing increased $290,000 related to higher operating income and professional fees increased $182,000 primarily due to software consulting, legal and accounting fees.

Net Income

	Three Months Ended
	June 30,
(Thousands of dollars)	2011			2010			$ Change		% Change
Income before income taxes	$	13,415		$	8,511		$	4,904		57.6	%
% of Net sales		14.6	%		11.8	%
Income taxes	$	4,490		$	2,855		$	1,635		57.3	%
Effective tax rate		33.5	%		33.5	%
Net income	$	8,925		$	5,656		$	3,269		57.8	%
% of Net sales		9.7	%		7.8	%
Earnings per share	$	0.42		$	0.27		$	0.15		55.6	%

The increase in net income was primarily due to the factors described above, with earnings largely driven by improved sales and operating leverage.

Six Months 2011 Compared to Six Months 2010

Net Sales

	Six Months Ended
	June 30,
(Thousands of Dollars)	2011		2010		$ Change		% Change
Net sales	$	176,233	$	138,166	$	38,067		27.6	%

The increase in sales in the first six months of 2011 compared to the same period last year was due principally to increases in the industrial market of $13.4 million, the agricultural market of $10.1 million, the construction market of $6.6 million and the rental market of $3.8 million. In addition, sales of custom pumps increased $9.6 million over 2010 as a result of pumps supplied for flood control projects. These increases were partially offset by decreases in sales to the fire protection market of $5.5 million and the original equipment market of $5.0 million.

10

PART I — CONTINUED

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

Cost of Products Sold

	Six Months Ended
	June 30,
(Thousands of Dollars)	2011			2010			$ Change		% Change
Cost of products sold	$	130,598		$	105,431		$	25,167		23.9	%
% of Net sales		74.1	%		76.3	%

The increase in cost of products sold was primarily due to higher sales volume which resulted in additional material costs of $19.6 million, including higher LIFO expense of $1.5 million mainly due to increases in price indexes. Manufacturing costs include increases in compensation and payroll taxes of $3.2 million principally due to increased headcount and overtime compensation associated with meeting increased customer demand for our products. Also, supplies, patterns and tooling expenses increased $853,000 due to increased business activity and profit sharing increased $772,000 related to higher operating income.

Selling, General, and Administrative Expenses (SG&A)

	Six Months Ended
	June 30,
(Thousands of Dollars)	2011			2010			$ Change		% Change
Selling, general, and administrative expenses (SG&A)	$	21,495		$	17,134		$	4,361		25.5	%
% of Net sales		12.2	%		12.4	%

The increase in SG&A expenses is principally due to the business acquisition of National Pump Company on October 1, 2010. In addition, profit sharing increased $406,000 related to higher operating income and professional fees increased $282,000 primarily due to software consulting, legal and accounting fees.

11

PART I — CONTINUED

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

Net Income

	Six Months Ended
	June 30,
(Thousands of Dollars)	2011			2010			$ Change		% Change
Income before income taxes	$	24,043		$	15,210		$	8,833		58.1	%
% of Net sales		13.6	%		11.0	%
Income taxes	$	7,999		$	5,057		$	2,942		58.2	%
Effective tax rate		33.3	%		33.2	%
Net income	$	16,044		$	10,153		$	5,891		58.0	%
% of Net sales		9.1	%		7.4	%
Earnings per share	$	0.76		$	0.49		$	0.27		55.1	%

The increase in net income was primarily due to the factors described above, with earnings largely driven by improved North American sales and operating leverage.

Liquidity and Capital Resources

	Six Months Ended
	June 30,
(Thousands of dollars)	2011			2010
Net cash provided by operating activities	$	7,328		$	16,511
Net cash used for investing activities		(5,665	)		(3,974	)
Net cash used for financing activities		(8,679	)		(19,157	)

The Company’s principal funding source generally is its cash generated from operations. Cash and cash equivalents and short-term investments totaled $27.5 million and there was $20.0 million in outstanding bank debt at June 30, 2011. In addition, the Company had $25.5 million available in bank lines of credit after deducting $4.5 million in outstanding letters of credit primarily related to customer orders. The Company was in compliance with all restrictive covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios, at June 30, 2011.

As operations continued to improve over the last two years, higher sales resulted in increased inventory balances, accounts receivable and accounts payable during the first six months of 2011. The lower cash provided by operations compared to the same period in 2010 was primarily due to increased inventory balances.

Investing activities for the six months ended June 30, 2011 primarily consisted of capital expenditures for machinery and equipment of $4.5 million and building improvements of $1.2 million. Capital expenditures for the full year 2011, consisting principally of machinery and equipment, are estimated to be $10 to $12 million and are expected to be financed through internally generated funds and existing lines of credit.

12

PART I — CONTINUED

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

Financing activities for the six months ended June 30, 2011 consisted of the re-payment of $5.0 million on short-term debt used to partially finance the acquisition of National Pump Company, and payments for dividends of $3.7 million. The ratio of current assets to current liabilities was 2.5 to 1 at June 30, 2011 and 2.4 to 1 at December 31, 2010.

Management believes that cash on hand, combined with cash provided by operations and existing financing capabilities, will be sufficient to meet cash requirements, including capital expenditures and the payment of quarterly dividends, for the next 12 months. On June 10, 2011 the Company paid a quarterly dividend of $0.09 per share, representing the 245^th consecutive quarterly dividend paid by the Company. While the Company currently expects to continue its history of paying regular quarterly dividends, any future dividends will be reviewed individually and declared by our Board of Directors at its discretion, dependent on our assessment of the Company’s financial condition and business outlook at the applicable time.

Critical Accounting Policies

Our critical accounting policies are described in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our Consolidated Financial Statements for the year ended December 31, 2010 contained in our Fiscal 2010 Annual Report on Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

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: Certain statements in this section and elsewhere herein contain various forward-looking statements and include 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 risk 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.

13

PART I — CONTINUED

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s foreign operations do not involve material risks due to their relative size, both individually and collectively. The Company is not exposed to material market risks as a result of its diversified export sales. Export sales generally are denominated in U.S. Dollars and made on open account or under letters of credit. The increase in comprehensive income during the six months ended June 30, 2011 was primarily due to the increase in value of the Euro and Canadian dollar in relation to the U.S. dollar when translating balance sheets from foreign currencies to U.S. dollars.

ITEM 4. 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. The Company’s disclosure controls and procedures are also designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act of 1934 is accumulated and communicated to the Company’s Management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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-Q. Based on that evaluation, the principal executive officer and the principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2011.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s disclosure controls and procedures that occurred during the most recent fiscal quarter 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.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no material changes from the legal proceedings previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

ITEM 1A. RISK FACTORS

There are no material changes from the risk factors previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

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ITEM 6. EXHIBITS

(a) Exhibits

Exhibits 3 and 4	(articles of incorporation) are incorporated herein by this reference from Exhibits (3) and (4) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.
Exhibits 3, 4 and 10	(by-laws; instruments defining the rights of security holders, including indentures; and material contracts) are incorporated herein by this reference from Exhibits (3), (4) and (10) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.
Exhibit 31.1	Certification of Jeffrey S. Gorman, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of Wayne L. Knabel, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32	Certification pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	The Gorman-Rupp Company (Registrant)
Date: August 1, 2011	By:	/s/Wayne L. Knabel
		Wayne L. Knabel
		Chief Financial Officer

15

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Jeffrey S. Gorman, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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: August 1, 2011	/s/Jeffrey S. Gorman
	Jeffrey S. Gorman
	President and Chief Executive Officer The Gorman-Rupp Company (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Wayne L. Knabel, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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: August 1, 2011	/s/Wayne L. Knabel
	Wayne L. Knabel
	Chief Financial Officer The Gorman-Rupp Company (Principal Financial Officer)

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 Quarterly Report of The Gorman-Rupp Company on Form 10-Q for the quarter ended June 30, 2011, 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: August 1, 2011	/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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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) In Thousands, except Per Share data	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 25,718	$ 32,229
Short-term investments	1,759	2,017
Accounts receivable - net	61,267	51,996
Inventories - net	64,971	51,449
Deferred income taxes and other current assets	4,443	5,503
Total current assets	158,158	143,194
Property, plant and equipment	222,353	216,239
Less accumulated depreciation	108,040	102,713
Property, plant and equipment - net	114,313	113,526
Prepaid pension and other assets	6,685	3,545
Goodwill and other intangible assets	25,953	26,442
Total assets	305,109	286,707
Current liabilities:
Accounts payable	17,770	12,042
Short-term debt	20,000	25,000
Payroll and related liabilities	9,742	7,794
Commissions payable	6,881	6,591
Accrued expenses	9,149	8,251
Total current liabilities	63,542	59,678
Postretirement benefits	22,554	22,241
Deferred and other income taxes	4,954	4,954
Total liabilities	91,050	86,873
Shareholders' equity
Common shares, without par value: Authorized - 35,000,000 shares Outstanding - 20,984,893 shares in 2011 and 2010 (after deducting treasury shares of 654,603 in 2011 and 2010) at stated capital amount (in Dollars per share)	$ 5,127	$ 5,127
Additional paid-in capital	2,373	2,400
Retained earnings	214,127	201,735
Accumulated other comprehensive loss	(7,568)	(9,428)
Total shareholders' equity	214,059	199,834
Total liabilities and shareholders' equity	$ 305,109	$ 286,707

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parentheticals)	Jun. 30, 2011	Dec. 31, 2010
Common shares - authorized	35,000,000	35,000,000
Common shares - shares outstanding net of treasury shares	20,984,893	20,984,893
Common shares - net of treasury shares of	654,603	654,603

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Document And Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 29, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	GORMAN RUPP CO
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		20,987,893
Amendment Flag	false
Entity Central Index Key	0000042682
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2

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NOTE C - PRODUCT WARRANTIES

3 Months Ended

Jun. 30, 2011

Product Warranty Disclosure [Text Block]

NOTE C - PRODUCT WARRANTIES

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

(Thousands of dollars)	June 30,
	2011			2010
Balance at beginning of year	$	1,543		$	1,863
Provision		610			486
Claims		(717	)		(944	)
Balance at end of period	$	1,436		$	1,405

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NOTE A - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

3 Months Ended

Jun. 30, 2011

Basis of Accounting [Text Block]

NOTE A - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  The consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three and six months ended June 30, 2011 are not necessarily indicative of results that may be expected for the year ending December 31, 2011.  For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.  The Company has evaluated the existence of subsequent events through the filing date of this Form 10-Q.

On April 28, 2011, the Company declared a five-for-four split of its Common Shares in the form of a distribution of one additional Common Share for each four Common Shares previously issued.  The distribution was made on June 10, 2011.  Accordingly, all number of shares outstanding and per share data throughout this Quarterly Report on Form 10-Q have been adjusted retroactively to reflect the stock split.

NEW ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update No. 2011-05 – “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”)

ASU No. 2011-05 amends existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. Also, items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements. ASU No. 2011-05 requires retrospective application, and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company plans to adopt ASU No. 2011-05 in the first quarter of fiscal 2012.  The Company believes the adoption of this update will change the order in which certain financial statements are presented and provide additional detail on those financial statements when applicable, but will not have any other impact on its consolidated financial statements.

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NOTE D - COMPREHENSIVE INCOME

3 Months Ended

Jun. 30, 2011

Comprehensive Income (Loss) Note [Text Block]

NOTE D - COMPREHENSIVE INCOME

Comprehensive income and its components, net of tax, are as follows:

(Thousands of dollars)	Three Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010
Net income	$	8,925	$	5,656		$	16,044	$	10,153
Changes in cumulative foreign currency translation adjustments		342		(1,401	)		1,285		(1,509	)
Pension and OPEB adjustments		732		246			575		515
Total comprehensive income	$	9,999	$	4,501		$	17,904	$	9,159

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NOTE E - PENSION AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Jun. 30, 2011

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE E - PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company sponsors a defined benefit pension plan covering substantially all employees hired prior to January 1, 2008.  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 graduated Company match is also available.  The Company also sponsors a non-contributory defined benefit health care plan that provides health benefits to substantially all retirees and their spouses.

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 with the Company.  Employees hired prior to January 1, 2008 were not affected by the change.

The following table presents the components of net periodic benefit cost:

	Pension Benefits						Postretirement Benefits
(Thousands of dollars)	Six Months Ended June 30,						Six Months Ended  June 30,
	2011			2010			2011			2010
Service cost	$	1,428		$	1,361		$	526		$	553
Interest cost		1,534			1,577			554			628
Expected return on plan assets		(2,256	)		(2,214	)		-			-
Recognized actuarial (gain) loss		838			788			(328	)		(287	)
Benefit cost	$	1,544		$	1,512		$	752		$	894

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income	$ 16,044	$ 10,153
net cash provided by operating activities:
Depreciation and amortization	5,629	5,205
Changes in operating assets and liabilities:
Accounts receivable	(9,271)	(12,075)
Inventories	(13,523)	2,795
Accounts payable	5,728	4,697
Commissions payable	290	3,315
Accrued expenses and other	2,431	2,421
Net cash provided by operating activities	7,328	16,511
Cash flows from investing activities:
Capital additions - net	(5,924)	(3,966)
Change in short-term investments	259	(8)
Net cash used for investing activities	(5,665)	(3,974)
Cash flows from financing activities:
Cash dividends	(3,651)	(3,509)
Payments to bank for borrowings	(5,000)	(15,000)
Purchase of common shares for treasury		(648)
Other	(28)
Net cash used for financing activities	(8,679)	(19,157)
Effect of exchange rate changes on cash	505	(567)
Net decrease in cash and cash equivalents	(6,511)	(7,187)
Cash and cash equivalents:
Beginning of year	32,229	44,403
June 30,	$ 25,718	$ 37,216

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NOTE B - INVENTORIES

3 Months Ended

Jun. 30, 2011

Inventory, Policy [Policy Text Block]

NOTE B - INVENTORIES

Inventories are stated at the lower of cost or market.  The costs for approximately 81% of inventories at June 30, 2011 and 82% at December 31, 2010 are determined using the last-in, first-out (LIFO) method, with the remainder determined using the first-in, first-out (FIFO) method.  An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels and

costs at that time.  Interim LIFO calculations are based on management’s estimate of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory valuation.

The major components of inventories are as follows (net of LIFO reserves):

(Thousands of dollars)	June 30, 2011		December 31, 2010
Raw materials and in-process	$	28,181	$	20,128
Finished parts		32,632		27,005
Finished products		4,158		4,316
Total inventories	$	64,971	$	51,449

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net sales	$ 92,159	$ 72,380	$ 176,233	$ 138,166
Cost of products sold	67,910	55,094	130,598	105,431
Gross profit	24,249	17,286	45,635	32,735
Selling, general and administrative expenses	10,768	8,375	21,495	17,134
Operating income	13,481	8,911	24,140	15,601
Other income	110	12	221	137
Other expense	(176)	(412)	(318)	(528)
Income before income taxes	13,415	8,511	24,043	15,210
Income taxes	4,490	2,855	7,999	5,057
Net income	$ 8,925	$ 5,656	$ 16,044	$ 10,153
Earnings per share (in Dollars per share)	$ 0.42	$ 0.27	$ 0.76	$ 0.49
Cash dividends paid per share (in Dollars per share)	$ 0.090	$ 0.084	$ 0.174	$ 0.168
Weighted average shares outstanding (in Shares)	20,984,893	20,887,825	20,984,893	20,887,996