-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A8hF+lT0rSCPZWaJMF7hBMY2MX3OJmHY+eGiTdeONn/DQnk1vkhZbfSRUvsL2HLe l4juSxukP2mI64+KRPVYeQ== 0000950152-99-008471.txt : 19991028 0000950152-99-008471.hdr.sgml : 19991028 ACCESSION NUMBER: 0000950152-99-008471 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GORMAN RUPP CO CENTRAL INDEX KEY: 0000042682 STANDARD INDUSTRIAL CLASSIFICATION: PUMPS & PUMPING EQUIPMENT [3561] IRS NUMBER: 340253990 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06747 FILM NUMBER: 99734269 BUSINESS ADDRESS: STREET 1: 305 BOWMAN ST STREET 2: PO BOX 1217 CITY: MANSFIELD STATE: OH ZIP: 44901 BUSINESS PHONE: 4197551011 MAIL ADDRESS: STREET 1: 305 BOWMAN STREET STREET 2: P.O. BOX 1217 CITY: MANSFIELD STATE: OH ZIP: 44901 10-Q 1 THE GORMAN-RUPP COMPANY 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For nine months ended September 30, 1999 Commission File Number 1-6747 ------------------ ------ The Gorman-Rupp Company - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 34-0253990 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 305 Bowman Street, P. O. Box 1217, Mansfield, Ohio 44901 - -------------------------------------------------------------------------------- (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 X No ----- ----- Shares outstanding at September 30, 1999 ----- common, without par value, 8,592,049 Page 1 of 8 pages 2 PART I - FINANCIAL INFORMATION THE GORMAN-RUPP COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Thousands of dollars, except per share data)
Three Months Ended Nine Months Ended September 30 September 30 1999 1998 1999 1998 ---------- ---------- ---------- ---------- INCOME Net sales $ 46,898 $ 44,535 $ 135,200 $ 130,773 Other income 168 177 626 656 ---------- ---------- ---------- ---------- TOTAL INCOME 47,066 44,712 135,826 131,429 DEDUCTIONS FROM INCOME Cost of products sold 33,829 32,495 99,334 96,563 Selling, general and administrative expenses 6,647 6,643 19,747 19,112 ---------- ---------- ---------- ---------- TOTAL DEDUCTIONS 40,476 39,138 119,081 115,675 ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 6,590 5,574 16,745 15,754 Income taxes 2,687 2,190 6,600 6,092 ---------- ---------- ---------- ---------- NET INCOME $ 3,903 $ 3,384 $ 10,145 $ 9,662 ========== ========== ========== ========== Basic And Diluted Earnings Per Share $ 0.45 $ 0.39 $ 1.18 $ 1.12 Dividends Paid Per Share $ 0.15 $ 0.15 $ 0.45 $ 0.43 Average Shares Outstanding 8,591,790 8,582,940 8,583,797 8,608,676
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands of dollars)
Nine Months Ended September 30 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: -------- -------- Net income $ 10,145 $ 9,662 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,086 4,714 Deferred income taxes 12 (1,022) Changes in operating assets and liabilities (1,650) 7,676 CASH FLOWS FROM INVESTING ACTIVITIES: Capital additions, net (9,172) (5,314) Change in short-term investments (845) (3,809) Other (173) (419) CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (3,864) (3,697) Change in treasury shares 124 (876) Borrowings from (Repayments to) bank 1,197 (4,692) NET INCREASE IN CASH -------- -------- AND CASH EQUIVALENTS 860 2,223 CASH AND CASH EQUIVALENTS: Beginning of year 2,359 836 -------- -------- September 30 $ 3,219 $ 3,059 ======== ========
2 3 THE GORMAN-RUPP COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Thousands of dollars)
September 30 December 31 1999 1998 ASSETS ------------ ------------ CURRENT ASSETS Cash and cash equivalents $ 3,219 $ 2,359 Short-term investments 7,152 6,306 Accounts receivable 31,984 26,282 Inventories 37,019 38,323 Other current assets and deferred income taxes 5,991 5,286 ------------ ------------ TOTAL CURRENT ASSETS 85,365 78,556 OTHER ASSETS 805 632 DEFERRED INCOME TAXES 4,361 4,373 PROPERTY, PLANT AND EQUIPMENT 100,741 93,363 Less allowances for depreciation 52,741 49,447 ------------ ------------ PROPERTY, PLANT AND EQUIPMENT - NET 48,000 43,916 ------------ ------------ TOTAL ASSETS $ 138,531 $ 127,477 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 7,932 $ 8,666 Payrolls and related liabilities 3,181 2,925 Accrued expenses 9,308 5,297 Income taxes 914 543 ------------ ------------ TOTAL CURRENT LIABILITIES 21,335 17,431 LONG TERM DEBT 1,980 783 POSTRETIREMENT BENEFITS 24,744 25,557 SHAREHOLDERS' EQUITY Common shares, without par value at stated capital amount 5,123 5,116 Retained earnings 86,739 80,314 Accumulated comprehensive income (1,390) (1,724) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 90,472 83,706 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 138,531 $ 127,477 ============ ============ Common shares - authorized 14,000,000 14,000,000 * Common shares - outstanding 8,592,049 8,581,236 Common shares - treasury 273,127 283,940 * After deducting treasury shares
3 4 THE GORMAN-RUPP COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1999 NOTE A - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period and nine month period ended September 30, 1999 are not necessarily indicative of results that may be expected for the year ending December 31, 1999. 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, 1998. NOTE B - INVENTORIES The major components of inventories are as follows: (Thousands of dollars) September 30 December 31 1999 1998 ------- ------- Raw materials and in-process $20,609 $21,335 Finished parts 13,154 13,617 Finished products 3,256 3,371 ------- ------- Inventories $37,019 $38,323 ======= ======= NOTE C - COMPREHENSIVE INCOME During the three months ended September 30 of 1999 and 1998, total comprehensive income amounted to $3,923,000 and $3,072,000. During the nine months ended September 30 of 1999 and 1998, total comprehensive income amounted to $10,479,000 and $9,158,000. 4 5 THE GORMAN-RUPP COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Third Quarter 1999 vs Third Quarter 1998 - ---------------------------------------- Net sales were $46,898,000 in 1999 compared to $44,535,000 in 1998, an increase of 5.3%. Most of the increase was due to increased sales at Patterson Pump Company and Gorman-Rupp Industries Division. Patterson Pump Company continues to experience good sales of its product, and Gorman-Rupp Industries Division experienced stronger sales in the OEM market. Other income was $168,000 in 1999 compared to $177,000 in 1998. This decrease was primarily due to lower interest income. Cost of products sold in 1999 was $33,829,000 compared to $32,495,000 in 1998. The largest factors in the increase were higher material costs that were incurred to support increased sales. As a percentage of net sales, cost of products sold was 72.1% in 1999 compared to 73.0% in 1998. Some change in product mix resulted in the lower gross margin percentage in 1999. Selling, general and administrative expenses increased from $6,643,000 in 1998 to $6,647,000 in 1999 with increases in advertising costs being offset by a decrease in bad debt expense. Income before income taxes was $6,590,000 in 1999 compared to $5,574,000 in 1998, an increase of $1,016,000. Income tax expense increased from $2,190,000 in 1998 to $2,687,000 in 1999, primarily as a result of the increase in profit. The effective tax rate was 40.8% in 1999 compared to 39.3% in 1998. Net income in 1999 of $3,903,000 increased $519,000 from $3,384,000 in 1998. As a percent of net sales, net income was 8.3% in 1999 and 7.6% in 1998. Net income per share was $.45 in 1999, an increase of $.06 from the $.39 in 1998. 5 6 THE GORMAN-RUPP COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Nine Months 1999 vs Nine Months 1998 - ------------------------------------ Net sales were $135,200,000 in 1999, an increase of $4,427,00 or 3.4% over the $130,773,000 in 1998. Most of the increase was due to increased sales at Patterson Pump Company and Gorman-Rupp Industries Division. Patterson Pump Company has continued to experience good sales of its product, and Gorman-Rupp Industries Division has experienced stronger sales in the OEM market. Other income was $626,000 in 1999 compared to $656,000 in 1998. This decrease was primarily due to lower interest income. Cost of products sold in 1999 was $99,334,000 compared to $96,563,000 in 1998. The largest factors in the increase were higher material costs that were incurred to support increased sales. As a percentage of net sales, cost of products sold was 73.5% in 1999 compared to 73.8% in 1998. Some change in product mix resulted in the lower gross margin percentage in 1999. Selling, general and administrative expenses increased from $19,112,000 in 1998 to $19,747,000 in 1999 with an increase in advertising expense being the largest reason for the increase. Income before income taxes was $16,745,000 in 1999 compared to $15,754,000 in 1998, an increase of $991,000. Income tax expense increased from $6,092,000 in 1998 to $6,600,000 in 1999, primarily as a result of the increase in profit. The effective income tax rate was 39.4% in 1999 compared to 38.7% in 1998. Net income of $10,145,000 in 1999 increased $483,000 from $9,662,000 in 1998. As a percent of net sales, net income was 7.5% in 1999 and 7.4% in 1998. Net income per share was $1.18 in 1999, an increase of $.06 from $1.12 in 1998. FINANCIAL CONDITION - ------------------- The Company continues to finance most of its capital expenditures and working capital requirements through internally generated funds and bank financing. An additional credit facility for $20,000,000 to finance the construction of the first phase of the Company's new manufacturing complex is in place. The ratio of current assents to current liabilities was 4.0 to 1 at September 30, 1999 and 4.5 to 1 at December 31, 1998. The Company presently has adequate working capital, adequate borrowing capacity and a healthy liquidity position. 6 7 THE GORMAN-RUPP COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Impact of Year 2000 - ------------------- The Year 2000 issue, as widely reported, could cause malfunctions in certain computer-related applications with respect to dates on or after January 1, 2000. The Company's Year 2000 program provides for assessments of its computer technology, operating equipment, facilities and suppliers. Assessments, initiated in 1998, continue to be conducted primarily through internal testing procedures and inquiry of critical suppliers. Further, individual assessments regarding significant suppliers of services, product materials and components continue to be conducted at the Company's various facilities in accordance with the Company's Year 2000 program. Management believes the completion in 1998 of additional hardware and software upgrades to the Company's new management information systems originally installed in 1996 thave enabled manufacturing, financial and distribution systems to become Year 2000 compliant. Ancillary computer systems are being evaluated in accordance with the Company's Year 2000 program to assure their compliance. Costs of the new systems were capitalized in 1996; certain implementation costs were expensed and related software upgrades were substantially provided through existing acquisition and maintenance agreements. Any other Year 2000 costs have not been and are not expected to be material. Management continues to assess the extent of necessary modification to its operating activities and supplier and customer readiness. To date, no significant issues have been identified and the Company is not aware of any unresolved Year 2000 issue which would materially impact the Company's operations and financial position. 7 8 PART II - OTHER INFORMATION THE GORMAN-RUPP COMPANY AND SUBSIDIARIES Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - 27 Financial Data Schedule (b) Reports filed on Form 8-K during the Quarter Ended September 30, 1999 - None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The Gorman-Rupp Company -------------------------- (Registrant) Date October 27, 1999 Kenneth E. Dudley ---------------------- /S/ Kenneth E. Dudley -------------------------- (Signature) Treasurer & Principal Financial Officer 8 EX-27 2 EXHIBIT 27
5 0000042682 THE GORMAN-RUPP COMPANY 1,000 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 3,219 7,152 32,772 788 37,019 85,365 100,741 52,741 138,531 21,335 0 0 0 5,123 85,349 138,531 135,200 135,826 99,334 119,081 0 89 140 16,745 6,600 10,145 0 0 0 10,145 1.18 1.18
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