SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)OF THE SECURITIES EXCHANGE ACT OF 1934
Registrant’s telephone number, including area code (419) 755-1011
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
Shares outstanding at June 30, 2001 —common, without par value, 8,565,553
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PART I — FINANCIAL INFORMATIONTHE GORMAN-RUPP COMPANY AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(in thousands of dollars, except per share data)
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(in thousands of dollars)
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(in thousands of dollars)
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2001
NOTE A — BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2001 are not necessarily indicative of results that may be expected for the year ending December 31, 2001. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10K for the year ended December 31, 2000.
NOTE B — INVENTORIES
The major components of inventories are as follows:
NOTE C — COMPREHENSIVE INCOME
During the three month periods ended June 30, 2001 and 2000, total comprehensive income was $4,337,000 and $3,720,000, respectively During the six month periods ended June 30, 2001 and 2000, total comprehensive income was $7,594,000 and $7,807,000, respectively Comprehensive income consists of foreign currency translation adjustments.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIESMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS
Second Quarter 2001 vs Second Quarter 2000
Net sales were $54,838,000 in 2001 compared to $48,008,000 in 2000, an increase of 14.2% A majority of the increase was due to increased sales of fabricated turbine diffusers.
Other income was $114,000 in 2001 compared to $229,000 in 2000. The decrease was due primarily to decreased currency exchange gains.
Cost of products sold in 2001 was $41,413,000 compared to $35,770,000 in 2000. The largest factors in the increase were material needed to support the increased sales and increased payroll related expenses. As a percentage of net sales, cost of products sold was 75.5% in 2000 compared to 74.5% in 2000. A change in product mix increased the percentage in 2001.
Selling, general and administrative expenses increased from $6,427,000 in 2000 to $6,951,000 in 2001 primarily as a result of an increase in professional services.
Income before income taxes was $6,588,000 in 2001 compared to $6,040,000 in 2000, an increase of $548,000. Income tax expense increased from $2,379,000 in 2000 to $2,590,000 in 2001, primarily as a result of the increase in profit. The effective tax rate was 39.3% in 2001 compared to 39.4% in 2000.
Net income in 2001 was $3,998,000 which resulted in an increase of $337,000 from $3,661,000 in 2000, an increase of 9.2%. As a percent of net sales, net income was 7.3% in 2001 and 7.7% in 2000. Net income per share was $.47 in 2001, an increase of $.05 from the $.42 in 2000.
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Six Months 2001 vs Six Months 2000
Net sales were $104,509,000 in 2001, an increase of $7,477,000 or 7.7% over the $97,032,000 in 2000. A majority of the increase is related to increased sales of fabricated turbine diffusers.
Other income was $376,000 in 2000 compared to $399,000 in 1999. The decrease was primarily due to a decrease in interest income.
Cost of products sold in 2001 was $78,738,000 compared to $72,111,000 in 2000. The largest factor in the increase was material needed to support the increased sales. An increase in payroll related expenses, medical expenses and depreciation also contributed to the increase. As a percentage of net sales, cost of products sold was 75.3% in 2001 compared to 74.3% in 2000. Changes in product mix are responsible for the higher percentage in 2001.
Selling, general and administrative expenses increased from $12,576,000 in 2000 to $13,695,000 in 2001 with an increase in professional services being the largest single item with health care costs also contributing to the increase.
Income before income taxes was $12,452,000 in 2001 compared to $12,744,000 in 2000, a decrease of $292,000. Income tax expense decreased from $4,983,000 in 2000 to $4,850,000 in 2001. The effective income tax rate was 38.9% in 2001 compared to 39.1% in 2000.
Net income of $7,602,000 in 2001 decreased $159,000 from $7,761,000 in 2000, a decrease of 2.0%. As a percent of net sales, net income was 7.3% in 2001 and 8.0% in 2000. Net income per share was $.89 in 2001, a decrease from the $.90 in 2000.
FINANCIAL CONDITION
The Company continues to finance most of its capital expenditures and working capital requirements through internally generated funds and bank financing. The ratio of current assets to current liabilities was 3.9 to 1 at June 30, 2001 and 4.3 to 1 at December 31, 2000.
The Company presently has adequate working capital, adequate borrowing capacity and a healthy liquidity position.
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PART II — OTHER INFORMATIONTHE GORMAN-RUPP COMPANY AND SUBSIDIARIES
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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