# Gorman Rupp Co: Form 10-Q for the period ended Mar 31, 2013

- Company: [Gorman Rupp Co](/companies/grc.md) (CIK 42682)
- Form: 10-Q
- Filed: 2013-04-29
- Accepted by EDGAR: Apr 29, 2013, 15:42 ET
- Period: 2013-03-31
- Accession: 0001193125-13-181900
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/42682/000119312513181900/d527606d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/42682/000119312513181900/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2013-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2013-01-01 to 2013-03-31 | $92.5m | us-gaap:SalesRevenueNet |
| Cost of revenue | 3 months, 2013-01-01 to 2013-03-31 | $71.2m | us-gaap:CostOfGoodsSold |
| Gross profit | 3 months, 2013-01-01 to 2013-03-31 | $21.2m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2013-01-01 to 2013-03-31 | $13.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2013-01-01 to 2013-03-31 | $8.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2013-01-01 to 2013-03-31 | $2.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2013-01-01 to 2013-03-31 | $5.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2013-01-01 to 2013-03-31 | $0.28 | us-gaap:EarningsPerShareDiluted |
| Diluted shares (weighted) | 3 months, 2013-01-01 to 2013-03-31 | 20,996,893 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2013-01-01 to 2013-03-31 | $3.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2013-01-01 to 2013-03-31 | $2.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2013-03-31 | $16.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2013-03-31 | $177.1m | us-gaap:AssetsCurrent |
| Total assets | at 2013-03-31 | $334.4m | us-gaap:Assets |
| Current liabilities | at 2013-03-31 | $61.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2013-03-31 | $95.6m | us-gaap:Liabilities |
| Current portion of debt | at 2013-03-31 | $19.0m | us-gaap:DebtCurrent |
| Shareholders' equity | at 2013-03-31 | $238.8m | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 3,555 characters.

Net sales for the three months ended March 31, 2013 declined 10.1% to $92.5 million compared to our all-time record sales of $102.8 million during the same period in 2012. International sales increased 14.2% and $4.5 million while domestic sales decreased 21.0% and $14.9 million. Sales declined $1.1 million during the quarter in our water end markets and $8.2 million in our non-water end markets compared to the same period last year. The decrease in water market sales was primarily due to reduced construction market demand for pumps from rental businesses as compared to the strong sales in first quarter 2012 in anticipation of an improved domestic economy. This decrease was partially offset by an increase in international fire protection market sales. The quarter’s decline in non-water market sales was primarily in the OEM market due to reduced shipments of fabricated products related to power generation equipment and in the industrial market due to reduced demand for pumps for oil and natural gas drilling applications.

Due to increased retirement payments and additional announced retirements during the first quarter 2013, the Company recorded a GAAP-required $1.4 million non-cash pension settlement charge relating to its defined benefit pension plan which negatively impacted margins and earnings as detailed below. This required charge is driven by our expectation that the actuarial payments threshold relating to retirees receiving lump-sum distributions will be exceeded during 2013. Therefore, it is likely that margins and earnings will continue to be negatively impacted by this charge for retirements during the remainder of the year. In 2011 and 2012 the actuarial payments threshold was not exceeded until the respective fourth quarters, which did not require earlier quarterly recording of these charges.

Gross profit was $21.2 million for the first quarter 2013 resulting in gross margin of 23.0% compared to 25.9% in the same period last year. The decline in gross margin was principally due to the favorable product mix within our record first quarter 2012 sales additionally offset this quarter by the non-cash pension settlement charge described above. The current quarter’s operating income was $8.3 million resulting in operating margin of 8.9% compared to 14.8% in first quarter 2012. The decline in operating margin was principally due to the leverage from the record sales in the first quarter 2012 compared to the current quarter’s sales combined with the further negative impact from the pension settlement charge. In addition to the changes noted above, increased healthcare costs and depreciation expense decreased operating margin by 125 basis points. Excluding the pension settlement charges, gross margin was 23.9% and 25.9% and operating margin was 10.4% and 14.8% for the first quarters of 2013 and 2012, respectively.

Net income during the quarter was $5.8 million compared to a record $10.2 million in the first quarter 2012 and earnings per share were $0.28 and $0.49 for the respective periods. Excluding the non-cash pension settlement charge noted above, earnings were $0.32 and $0.49 per share for the respective periods.

Encouragingly, the Company’s backlog of orders was $145.4 million at March 31, 2013 compared to $139.1 million a year ago and $143.4 million at December 31, 2012. The increase in backlog is primarily due to increased orders from the agricultural market due to the beginning of the selling season and from the OEM market related to products for power generation equipment.

## Market risk

As filed, 331 characters.

The Company’s foreign operations do not involve material risks due to their relative size, both individually and collectively. The Company is not exposed to material market risks as a result of its diversified export sales. Export sales generally are denominated in U.S. Dollars and made on open account or under letters of credit.

## Controls and procedures

As filed, 1,895 characters.

### Evaluation of Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. The Company’s disclosure controls and procedures are also designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act of 1934 is accumulated and communicated to the Company’s Management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

An evaluation was carried out under the supervision and with the participation of the Company’s Management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q. Based on that evaluation, the principal executive officer and the principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2013.

### Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s disclosure controls and procedures that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Subsequent to the date of the evaluation, there have been no significant changes in the Company’s disclosure controls and procedures that could significantly affect the Company’s internal control over financial reporting.

## Risk factors

As filed, 160 characters.

There are no material changes from the risk factors previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Filed Apr 29, 2013.
Source: SEC EDGAR, the filing index for accession 0001193125-13-181900. Last ingested by Listed: Oct 30, 2026, 07:59 ET. No prices; not investment advice.