The Gorman-Rupp Company (NYSE MKT: GRC), a leading international
designer, manufacturer and marketer of pumps and pump systems,
reports financial results for the first quarter ended March 31,
2014.
Net sales during the first quarter of 2014 increased 19.0% to a
record $110.1 million compared to $92.5 million during the same
period in 2013. Domestic sales increased 28.0% or $15.7 million and
international sales increased 5.3% or $1.9 million. Sales in water
end markets increased $12.0 million and sales in non-water end
markets increased $5.6 million during the first quarter.
The increase in water end market sales was due about equally to
increases in shipments of $4.1 million in the construction market
principally for pumps for rental businesses and for oil and gas
drilling and fracking within North America, $4.1 million in the
fire market due to increased domestic commercial construction
spending, and $4.3 million in the municipal market driven by large
volume pumps related to wastewater and water supply. Sales
increased $5.6 million in the non-water markets primarily due to
increased shipments for the OEM market related to power generation
equipment and pumps for military applications.
Gross profit was a record $27.6 million for the first quarter of
2014, resulting in gross margin of 25.0% compared to 23.0% in the
same period in 2013. The increase in gross margin was principally
due to increased sales and sales mix changes during the quarter.
Operating income was $14.7 million, resulting in operating margin
of 13.3% in the first quarter of 2014 compared to 8.9% in the same
period in 2013. The gross margin and operating margin for the first
quarter of 2013 were reduced by 90 and 150 basis points,
respectively, due to a non-cash pension settlement charge which did
not recur in the first quarter of 2014.
Net income was $10.0 million during the first quarter of 2014
compared to $5.8 million in the first quarter of 2013 and earnings
per share were $0.38 and $0.22 for the respective periods. Earnings
per share for the first quarter of 2013 included a reduction of
$0.04 due to a non-cash pension settlement charge.
The Company’s backlog of orders was $171.7 million at March 31,
2014 compared to $182.2 million at December 31, 2013. Incoming
orders grew 19% during the current quarter compared to the previous
quarter primarily reflecting increased activity across our water
end markets. The $10.5 million decrease in backlog is principally
due to record shipments during the current quarter. Approximately
$56.1 million of the PCCP project to supply major flood control
pumps to a member of a joint venture construction group for a
significant New Orleans flood control project remain in the March
31, 2014 backlog total. The pumps for this project are expected to
be shipped primarily in the second half of 2014 and first half of
2015.
Cash and short-term investments totaled $22.0 million and
short-term bank debt was $5.2 million at March 31, 2014. Working
capital rose 5.4% from December 31, 2013 to a record $135.5 million
at March 31, 2014 principally due to increased first quarter 2014
net sales. Net capital expenditures for 2014, consisting
principally of machinery and equipment and building improvements,
are estimated to be in the range of $12 to $14 million and are
expected to be financed through internally generated funds.
Jeffrey S. Gorman, President and CEO said, “We are pleased to be
off to a strong start in 2014 with record quarterly revenue. We are
encouraged by the on-going stabilization in key markets the Company
serves and continue to believe 2014 should be a solid year for the
Company.”
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 news release
contains various forward-looking statements based on 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,
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, but are
not limited to: (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; (7) unforeseen delays
or disruptions in the New Orleans flood control project; and (8)
continuation of the favorable environment to make acquisitions,
domestic and foreign, including regulatory requirements and market
values of candidates. Except to the extent required by law, we do
not undertake and specifically decline any obligation to review or
update any forward-looking statements or to publicly announce the
results of any revisions to any of such statements to reflect
future events or developments or otherwise.
David P. EmmensCorporate SecretaryThe Gorman-Rupp
CompanyTelephone (419) 755-1477NYSE MKT: GRC
For additional information, contact Wayne L. Knabel, Chief
Financial Officer, Telephone (419) 755-1397.
The Gorman-Rupp Company and
Subsidiaries Condensed Consolidated Statements of Income
(Unaudited) (in thousands of dollars, except per share data)
Three Months Ended March 31, 2014 2013 Net sales $
110,064 $ 92,457 Cost of products sold 82,510 71,233
Gross profit 27,554 21,224
Selling, general and administrative
expenses
12,861 12,967 Operating income 14,693
8,257 Other income (expense) - net 139 (30 )
Income before income taxes 14,832 8,227 Income taxes
4,878 2,409 Net income $ 9,954 $ 5,818
Earnings per share $ 0.38 $ 0.22 The
Gorman-Rupp Company and Subsidiaries Condensed Consolidated Balance
Sheets (Unaudited) (in thousands of dollars) March 31,
December 31, 2014 2013
Assets
Cash and cash equivalents $ 22,004 $ 31,376 Accounts receivable -
net 71,902 59,374 Inventories 88,933 89,946 Deferred income taxes
and other current assets 8,370 8,593
Total current assets 191,209 189,289 Property, plant and
equipment - net 129,648 131,189 Other assets 5,749 3,657
Goodwill and other intangible assets 31,199
31,503 Total assets $ 357,805 $ 355,638
Liabilities and
shareholders' equity
Accounts payable $ 16,961 $ 17,882 Short-term debt 5,163 9,000
Accrued liabilities and expenses 33,558 33,878
Total current liabilities 55,682 60,760
Postretirement benefits 18,563 18,393 Deferred and other
income taxes 12,339 12,345 Total
liabilities 86,584 91,498 Shareholders' equity
271,221 264,140 Total liabilities and
shareholders' equity $ 357,805 $ 355,638 Shares
outstanding 26,253,043 26,253,043
The Gorman-Rupp CompanyWayne L. Knabel, Chief Financial Officer,
419-755-1397
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