The Gorman-Rupp Company (NYSE Amex: GRC) reports net sales and earnings for the first quarter ended March 31, 2010.

Net sales during the first quarter ended March 31, 2010 decreased 8.1% to $65,786,000 compared to $71,598,000 during the same period in 2009. Net income decreased slightly to $4,497,000 compared to $4,506,000 in the first quarter 2009, a total decrease of 0.2%. Earnings per share were $0.27 and $0.27 for the two compared periods.

Net sales during the quarter continued to be negatively impacted by the global recession. The markets with the largest declines include fire protection, government and custom pump applications.

Although sales were lower, earnings for the quarter were similar to the first quarter of 2009 due to continuing cost savings implemented in 2009. These cost savings also contributed to the 5.2% increase in operating income. In addition, pension expense decreased $0.02 per share as a result of the rebound in the equity markets during 2009. Offsetting this decrease was increased depreciation expense of $0.02 per share primarily due to the Mansfield Division’s new facilities.

The Company’s backlog of orders increased to $104.5 million at March 31, 2010 compared to $91.8 million a year ago and $93.7 million at December 31, 2009. The increase from March 31, 2009 was primarily due to orders arising from wastewater and international fire protection applications. Federal stimulus dollars had some favorable impact on orders received in the municipal market during the quarter.

Cash flow from operations during the first quarter 2010 was $9.0 million, resulting in a continuing strong liquidity position with $45.5 million of cash and short-term investments. During the quarter, $5.0 million of borrowings used to partially finance the expansion and consolidation of the Mansfield Division were re-paid with the remaining $10.0 million planned to be paid by the end of 2010.

The Company successfully implemented a new enterprise resource planning system at several locations during the quarter, which will provide for greater information technology capabilities as the Company continues to grow.

Jeffrey S. Gorman, President and CEO said, “Customer order growth is encouraging, especially in the commercial and international fire protection markets. The economy appears to be starting to recover from the global recession, but we continue to remain cautious until clearer signs of a solid recovery in the capital goods sector become more evident. We are pleased with the continued collective effort of all our locations to control costs while improving productivity, resulting in our earnings for the quarter being comparable to first quarter 2009 even though sales decreased. ”

Released by David P. Emmens, Corporate Secretary, Telephone (419) 755-1477.

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,
 
2010 2009
 
Net sales $65,786 $71,598
Cost of products sold 50,337 56,253
 
Gross profit 15,449 15,345
 

Selling, general and administrative expenses
8,759 8,988
 
Operating income 6,690 6,357
 
Other income (expense) - net 9 511
 
Income before income taxes 6,699 6,868
Income taxes 2,202 2,362
 
Net income $4,497 $4,506
 
Basic and diluted earnings per share $0.27 $0.27
 
The Gorman-Rupp Company and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands of dollars)
      Unaudited  
March 31, December 31,
2010 2009
 
Assets
Cash and short-term investments $45,528 $45,908
Accounts receivable - net 42,739 37,239
Inventories 38,539 40,506
Deferred income taxes and other current assets 4,929 7,747
 
Total current assets 131,735 131,400
 
Property, plant and equipment - net 108,660 108,523
 
Deferred income taxes and other assets 9,751 9,501
 
Total assets $250,146 $249,424
 
Liabilities and shareholders' equity
 
Accounts payable $11,548 $8,972
Short-term debt 10,000 15,000
Accrued liabilities and expenses 19,999 19,203
 
Total current liabilities 41,547 43,175
 
Deferred and other income taxes 1,325 1,323
Retirement benefits 4,206 5,044
Postretirement benefits 22,582 22,270
 
The Gorman-Rupp Company shareholders' equity 179,798 176,905
Noncontrolling interest 688 707
 
Total shareholders' equity 180,486 177,612
 
Total liabilities and shareholders' equity $250,146 $249,424
 
Shares outstanding 16,710,535 16,710,535

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