Gorman-Rupp Reports Third Quarter 2012 Results And Completes South African Acquisition
The Gorman-Rupp Company (NYSE MKT: GRC) reports financial results for
the third quarter 2012 and announces the completion of the acquisition
of Pumptron (Proprietary) Limited of Johannesburg, South Africa
The Gorman-Rupp Company (NYSE MKT: GRC) reports financial results for the third quarter 2012 and announces the completion of the acquisition of Pumptron (Proprietary) Limited of Johannesburg, South Africa (“Pumptron”). Net sales during the third quarter 2012 were $91.6 million compared to $90.2 million during the same period in 2011. Net income during the quarter was $6.7 million compared to $7.7 million in the third quarter 2011, a 13.0% decrease. Earnings per share were $0.32 and $0.37 for the respective periods. Net sales for the nine months ended September 30, 2012 increased 7.7% to a record $287.0 million compared to $266.4 million during the same period in 2011. Both years benefited from increases in our seasonal agriculture market business contributed by our 2010 acquisition of National Pump Company. Net income increased 3.4% to a record $24.5 million compared to $23.7 million in the first nine months of 2011. Earnings per share were $1.17 and $1.13 for the respective periods. Sales increased a modest 1.6% during the quarter compared to the same period last year. Sales improved 10.3% in our larger water markets group and declined 12.0% in our non-water markets. Major contributions to water market sales were shipments of pumps for domestic flood control, and shipments of pumps for water supply and sewage systems domestically and internationally. The quarter’s non-water market decreases were primarily in the OEM market due to the scale-down of U.S. military operations overseas, and shipments of fabricated products related to power generation declined due to the slow and unsteady economic recovery and related reduced power demands in North America. The decrease in earnings for the quarter was principally driven by a less favorable product mix among the market groups, combined with selling, general and administrative expense increases due to healthcare costs and the completion of the Pumptron acquisition.
Shareholders of Gorman-Rupp Co. looking to boost their income beyond the stock's 1.4% annualized dividend yield can sell the June covered call at the $30 strike and collect the premium based on the $1.70 bid, which annualizes to an additional 16.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 18.2% annualized rate in the scenario where the stock is not called away.