Gorman-Rupp Reports Record Sales and Earnings for the First Quarter 2012 and Declares Cash Dividend Increase

Thu Apr 26, 2012 10:00am EDT

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Gorman-Rupp Reports Record Sales and Earnings for the First Quarter 2012 and Declares Cash Dividend Increase

The Gorman-Rupp Company (NYSE Amex: GRC) reports record net sales and earnings for the first quarter 2012.

Net sales during the first quarter 2012 increased 22.3% to a record $102.8 million compared to $84.1 million during the same period in 2011. Net income increased 43.9% to a record $10.2 million compared to $7.1 million in the first quarter 2011. Earnings per share were $0.49 and $0.34 for the respective periods.

Increases in sales during the quarter were primarily in the construction, industrial, original equipment manufacturer (OEM) and agricultural markets, while municipal sales were flat largely due to decreased sales of pumps supplied for domestic flood control projects as compared to the first quarter of 2011. Domestic sales grew 24.6% and international sales grew 17.5% in the first quarter 2012 compared to the same period last year.

The increase in earnings during the quarter was due to improved operating leverage on record sales. As a percent of net sales, gross profit was 25.9% in the first quarter 2012, which represents a 50 basis-point increase from the first quarter 2011. Operating profit increased 210 basis-points during the first quarter 2012 to 14.8% of net sales compared to 12.7% during the same period last year.

Record shipments during the quarter, less intense demand for pumps in natural gas drilling applications and lower incoming orders for the municipal market resulted in a backlog of $139.1 million at March 31, 2012, a 1.4% decrease from a year ago and 10.5% lower than the backlog of $155.5 million at December 31, 2011.

Cash and short-term investments totaled $21.3 million and $10.0 million of bank debt was outstanding at March 31, 2012; this debt is expected to be repaid during 2012. Working capital increased 5.9% from December 31, 2011 to a record $111.2 million at March 31, 2012 primarily due to increased current accounts receivable as a result of the increase in net sales.

Jeffrey S. Gorman, President and CEO said, “We are off to a great start in 2012 with record quarterly revenue exceeding $100 million for the first time in Company history. We are equally pleased that our operations achieved record earnings by maintaining solid production and operating margins. We are however mindful of many significant global economic and political challenges that continue, and we have begun to experience some softening of incoming orders for pumps from the energy sector related to low natural gas prices and have seen few signs of returns to domestic commercial or residential construction and municipal infrastructure funding. The remainder of 2012 therefore is expected to be good but not at the record pace of this quarter.”

The Board of Directors of the Company has declared a quarterly cash dividend of $0.10 per share on the common stock of the Company, payable June 8, 2012, to shareholders of record on May 15, 2012. This marks the 249th consecutive quarterly dividend paid by The Gorman-Rupp Company and represents an 11.1% increase over the $0.09 dividend paid during the previous quarter.

“The increased cash dividend returns added value to our shareholders from our continuing strong operating performance and reflects the strength of our cash flow and balance sheet,” said Jeffrey S. Gorman, President and CEO.

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, 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, but are not limited to: (1) continuation of the current and projected future business environment; (2) stability of government laws and regulations, including taxes; and (3) the Company’s future cash flow and financial condition.

     
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,
2012 2011
 
 
Net sales $ 102,825 $ 84,074
Cost of products sold   76,151   62,688  
 
Gross profit 26,674 21,386
 

Selling, general and administrative expenses

  11,446   10,727  
 
Operating income 15,228 10,659
 
Other income (expense) - net   154   (31 )
 
Income before income taxes 15,382 10,628
Income taxes   5,141   3,509  
 
Net income $ 10,241 $ 7,119  
 
Earnings per share $ 0.49 $ 0.34
 
     
The Gorman-Rupp Company and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands of dollars)
 
    Unaudited
March 31, December 31,
2012 2011

Assets

Cash and short-term investments $ 21,264 $ 21,202
Accounts receivable - net 63,050 56,419
Inventories 77,630 73,193
Deferred income taxes and other current assets   5,173   5,058
 
Total current assets 167,117 155,872
 
Property, plant and equipment - net 116,162 114,349
 
Other assets 3,996 2,998
 
Goodwill and other intangible assets   25,262   25,481
 
Total assets $ 312,537 $ 298,700
 

Liabilities and shareholders' equity

Accounts payable $ 18,269 $ 15,679
Short-term debt 10,000 10,000
Accrued liabilities and expenses   27,671   25,194
 
Total current liabilities 55,940 50,873
 
Pension benefits 6,941 6,571
 
Postretirement benefits 22,898 22,705
 
Deferred and other income taxes   3,718   3,787
 
Total liabilities 89,497 83,936
 
Shareholders' equity   223,040   214,764
 
Total liabilities and shareholders' equity $ 312,537 $ 298,700
 
Shares outstanding 20,990,893 20,990,893
 
 
Shares outstanding and per share data reflect the 5 for 4 stock split effective June 10, 2011.

The Gorman-Rupp Company
David P. Emmens, Corporate Secretary, 419-755-1477
or
Wayne L. Knabel, Chief Financial Officer, 419-755-1397