Gorman-Rupp Reports Double-Digit Sales, Earnings And Backlog Growth And Announces Stock Split And Cash Dividend Increase

The Gorman-Rupp Company (NYSE Amex: GRC) reports net sales and earnings for the first quarter ended March 31, 2011.

Net sales during the first quarter ended March 31, 2011 increased 27.8% to $84,074,000 compared to $65,786,000 during the same period in 2010. Net income increased 58.3% to $7,119,000 compared to $4,497,000 in the first quarter 2010. Earnings per share were $0.42 and $0.27 for the respective periods.

Higher sales during the quarter, which includes sales of National Pump Company acquired October 1, 2010, were positively impacted by the improved global economy compared to a year ago. Primary increases were in sales to the industrial, agricultural, construction and rental markets. In addition, sales of custom pumps increased during the quarter as a result of pumps supplied for flood control projects.

Strong incoming orders in the aforementioned markets during the quarter resulted in a record backlog of $141.1 million at March 31, 2011, a 35.0% increase from a year ago and 31.4% higher than the backlog of $107.4 million at December 31, 2010.

The increase in earnings for the quarter principally reflects improved operating leverage on the higher volume of sales. First quarter earnings also benefited from the inclusion of National Pump Company, partially offset by additional LIFO expense of $0.03 per share primarily due to increases in price indexes.

The Company continues to maintain a strong balance sheet with $32.9 million in cash and short-term investments at March 31, 2011 and has excellent liquidity. During the quarter, $3.0 million of borrowings used to finance the acquisition of National Pump Company were re-paid with the remaining $22.0 million planned to be paid by the end of the year.

Jeffrey S. Gorman, President and CEO said, “We are very encouraged by the amount and diversity of new orders received during the quarter and by the much improved financial results compared to a year ago. Strong domestic sales growth combined with continued expansion in international markets and improved operating leverage have contributed to the Company’s performance. The record backlog at the end of the quarter favorably positions the Company for the coming months.”

At its April 28, 2011 meeting, the Board of Directors of the Company declared a five-for-four split of the Company’s Common Shares in the form of a distribution of one additional Common Share for each four Common Shares previously issued. The distribution will be made on June 10, 2011 to shareholders of record at the close of business on May 13, 2011.

Cash payments will be made to shareholders in settlement of fractional-share interests resulting from the distribution on the basis of the average of the high and low sales price of the Company’s Common Shares on the NYSE Amex Exchange on the record date (or, if there are no sales on the record date, then on the first preceding day on which there were sales), adjusted to reflect the distribution.

Computershare Investor Services, LLC, the Transfer Agent and Registrar for the Common Shares of the Company, will accept instructions from brokers and nominees regarding their requirements for the distribution until June 3, 2011.

After giving effect to the issuance of the additional Common Shares in the distribution, the most recent quarterly cash dividend rate of $0.105 per Common Share on a post-split basis would be equivalent to $0.084 per share.

In an additional action, the Board of Directors of the Company declared a quarterly cash dividend of $0.09 per share on the common stock of the Company, payable June 10, 2011, to shareholders of record May 13, 2011. The cash dividend is payable on post-split shares and represents a 7.1% increase over the equivalent post-split dividend paid during the previous quarter. This marks the 245 th consecutive dividend paid by The Gorman-Rupp Company.

“As demonstrated previously, the 25% increase in our Common Shares resulting from the split should enhance trading liquidity in our stock,” said Jeffrey S. Gorman, President and CEO. “The increase in the quarterly dividend at this same time reflects the strength of our cash flow and balance sheet, our recognition of an improving global economy, and our desire to share our increasing value with our shareholders.”
           
 
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,
 
2011 2010
 
 
Net sales $84,074 $65,786
Cost of products sold 62,688   50,337
 
Gross profit 21,386 15,449
 

Selling, general and administrative expenses
10,727   8,759
 
Operating income 10,659 6,690
 
Other income (expense) - net (31 ) 9
 
Income before income taxes 10,628 6,699
Income taxes 3,509   2,202
 
Net income $7,119   $4,497
 
Basic and diluted earnings per share $0.42 $0.27
 
 
 
The Gorman-Rupp Company and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands of dollars)
 
Unaudited
March 31, December 31,
2011 2010
Assets
Cash and short-term investments $32,929 $34,246
Accounts receivable - net 54,811 51,996
Inventories 56,958 51,449
Deferred income taxes and other current assets 3,869   5,503
 
Total current assets 148,567 143,194
 
Property, plant and equipment - net 113,280 113,526
 
Deferred income taxes and other assets 5,565 3,545
 
Goodwill and other intangible assets 26,189   26,442
 
Total assets $293,601   $286,707
 
Liabilities and shareholders' equity
 
Accounts payable $14,115 $12,042
Short-term debt 22,000 25,000
Accrued liabilities and expenses 24,126   22,636
 
Total current liabilities 60,241 59,678
 
Deferred and other income taxes 4,954 4,954
 
Postretirement benefits 22,430 22,241
 
Shareholders' equity 205,976   199,834
 
Total liabilities and shareholders' equity $293,601   $286,707
 
Shares outstanding 16,788,535 16,788,535
 

The Gorman-Rupp Company designs, manufactures and sells pumps and related equipment (pumps 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.

Copyright Business Wire 2010

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