The Gorman-Rupp Company (NYSE: GRC) reports financial results
for the first quarter ended March 31, 2024.
First Quarter 2024 Highlights
- Net sales of $159.3 million decreased 0.7%, or $1.2 million,
compared to the first quarter of 2023
- Record incoming orders of $178.9 million increased 7.1%, or
$11.9 million, compared to the first quarter of 2023 and increased
27.0%, or $38.1 million, compared to the fourth quarter of
2023
- First quarter net income was $7.9 million, or $0.30 per share,
compared to net income of $6.5 million, or $0.25 per share, for the
first quarter of 2023
- Adjusted earnings per share1 for the first quarters of 2024 and
2023 were $0.30 and $0.27, respectively
- Gross margin increased 200 basis points compared to the first
quarter of 2023
- Adjusted EBITDA1 of $28.2 million for the first quarter of 2024
decreased $0.2 million, or 0.6%, from $28.4 million for the first
quarter of 2023
Net sales for the first quarter of 2024 were $159.3 million
compared to net sales of $160.5 million for the first quarter of
2023, a decrease of 0.7% or $1.2 million. Domestic sales increased
1.1%, or $1.3 million, and international sales decreased 6.2%, or
$2.5 million, compared to the first quarter of 2023.
Sales increased $2.8 million in the municipal market due to an
increase in domestic flood control and wastewater projects, $0.6
million in the construction market due to overall strong market
conditions including demand in infrastructure-related projects,
$0.4 million in the petroleum market due to increased demand for
larger petroleum transfer pumps, and $0.2 million in the industrial
market due to strengthening in the broader industrial economy,
while sales in the repair market were flat. Offsetting these
increases was a sales decrease of $3.8 million in the fire
suppression market partially due to customer related delays in
shipments. In addition, sales decreased $0.8 million in the OEM
market and $0.6 million in the agriculture market primarily driven
by weather conditions that slowed demand.
Gross profit was $48.4 million for the first quarter of 2024,
resulting in gross margin of 30.4%, compared to gross profit of
$45.5 million and gross margin of 28.4% for the same period in
2023. The 200 basis point increase in gross margin included a 230
basis point improvement in cost of material, which consisted of a
reduction in LIFO2 expense of 60 basis points, a favorable impact
of 40 basis points related to the amortization of acquired
Fill-Rite customer backlog which occurred in the first quarter of
2023 and did not reoccur in 2024, and a 130 basis point improvement
from the realization of selling price increases. The improvement in
cost of material was partially offset by a 30 basis point increase
in labor and overhead expenses.
Selling, general and administrative (“SG&A”) expenses were
$24.9 million and 15.6% of net sales for the first quarter of 2024
compared to $23.2 million and 14.5% of net sales for the same
period in 2023. The increase in SG&A expenses was due to
increased expenses to support ongoing sales growth.
Amortization expense was $3.1 million for the first quarter of
2024 compared to $3.2 million for the same period in 2023.
Operating income was $20.4 million for the first quarter of
2024, resulting in an operating margin of 12.8%, compared to
operating income of $19.1 million and operating margin of 11.9% for
the same period in 2023. Operating margin increased 90 basis points
compared to the same period in 2023 due to improved margin on
material costs partially offset by increased SG&A expenses.
Interest expense was $10.1 million for the first quarter of 2024
compared to $10.2 million for the same period in 2023.
Net income was $7.9 million, or $0.30 per share, for the first
quarter of 2024 compared to net income of $6.5 million, or $0.25
per share, in the first quarter of 2023. Adjusted earnings per
share1 for the first quarters of 2024 and 2023 were $0.30 and $0.27
per share, respectively.
Adjusted EBITDA1 was $28.2 million for the first quarter of 2024
compared to $28.4 million for the first quarter of 2023.
The Company’s backlog of orders was $234.2 million at March 31,
2024 compared to $270.6 million at March 31, 2023 and $218.1
million at December 31, 2023. Incoming orders during the first
quarter of 2024 of $178.9 million increased 7.1%, or $11.9 million,
compared to the first quarter of 2023.
Net cash provided by operating activities for the first three
months of 2024 was $10.7 million compared to $18.6 million for the
same period in 2023 driven by increased working capital needs.
Capital expenditures for the first three months of 2024 were $3.9
million and consisted primarily of machinery and equipment. Capital
expenditures for the full-year 2024 are presently planned to be in
the range of $18 - $20 million. Total debt, net of cash, of $381.6
million at March 31, 2024 decreased $1.6 million during the first
three months of 2024.
Scott A. King, President and CEO commented, “We continued to
deliver gross margin and earnings improvement despite sales being
down slightly to last year. We had record incoming orders during
the quarter, in part due to our municipal market, which includes
flood control and storm water management applications. As a result,
we saw an increase in backlog of $16 million during the quarter to
$234.2 million. While backlog remains at elevated levels, we still
expect backlog to return to more normal levels by the end of the
year. We remain optimistic about our full year outlook and remain
focused on delivering profitable growth.”
About The Gorman-Rupp Company
Founded in 1933, The Gorman-Rupp Company is a leading designer,
manufacturer and international marketer of pumps and pump systems
for use in diverse water, wastewater, construction, dewatering,
industrial, petroleum, original equipment, agriculture, fire
suppression, heating, ventilating and air conditioning (HVAC),
military and other liquid-handling applications.
(1) Non-GAAP Information
This release includes certain non-GAAP financial data and
measures such as adjusted earnings, adjusted earnings per share,
and adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”). Adjusted earnings is earnings
excluding amortization of customer backlog. Adjusted earnings per
share is earnings per share excluding amortization of customer
backlog per share. Adjusted earnings before interest, taxes,
depreciation and amortization is net income (loss) excluding
interest, taxes, depreciation and amortization, adjusted to exclude
amortization of customer backlog, and non-cash LIFO2 expense.
Management utilizes these adjusted financial data and measures to
assess comparative operations against those of prior periods
without the distortion of non-comparable factors. The inclusion of
these adjusted measures should not be construed as an indication
that the Company’s future results will be unaffected by unusual or
infrequent items or that the items for which the Company has made
adjustments are unusual or infrequent or will not recur. Further,
the impact of the LIFO2 inventory costing method can cause results
to vary substantially from company to company depending upon
whether they elect to utilize LIFO2 and depending upon which method
they may elect. The Gorman-Rupp Company believes that these
non-GAAP financial data and measures also will be useful to
investors in assessing the strength of the Company’s underlying
operations and liquidity from period to period. These non-GAAP
financial measures are not intended to replace GAAP financial
measures, and they are not necessarily standardized or comparable
to similarly titled measures used by other companies. Provided
later in this release is a reconciliation of adjusted earnings,
adjusted earnings per share, and adjusted EBITDA to their
respective corresponding GAAP financial measures, which includes
descriptions of actual adjustments made in the current period and
the corresponding prior period.
(2) LIFO Inventory Method
The majority of the Company’s inventories are valued on the
last-in, first-out (LIFO) method and stated at the lower of cost or
market. Current cost approximates replacement cost, or market, and
LIFO cost is determined at the end of each fiscal year based on
inventory levels on-hand at current replacement cost and a LIFO
reserve. The Company uses the simplified LIFO method, under which
the LIFO reserve is determined utilizing the inflation factor
specified in the Producer Price Index for Machinery and Equipment –
Pumps, Compressors and Equipment, as published by the U.S. Bureau
of Labor Statistics. Interim LIFO calculations are based on
management’s estimate of the expected year-end inflation index and,
as such, are subject to adjustment each quarter. When inflation
increases, the LIFO reserve and non-cash expense increase.
Forward-Looking Statements
In connection with the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, The Gorman-Rupp Company
provides the following cautionary statement: This news release
contains various forward-looking statements based on assumptions
concerning The Gorman-Rupp Company’s operations, future results and
prospects. These forward-looking statements are based on current
expectations about important economic, political, and technological
factors, among others, and are subject to risks and uncertainties,
which could cause the actual results or events to differ materially
from those set forth in or implied by the forward-looking
statements and related assumptions. Such uncertainties include, but
are not limited to, our estimates of future earnings and cash
flows, general economic conditions and supply chain conditions and
any related impact on costs and availability of materials,
integration of the Fill-Rite business in a timely and cost
effective manner, retention of supplier and customer relationships
and key employees, the ability to achieve synergies and cost
savings in the amounts and within the time frames currently
anticipated and the ability to service and repay indebtedness
incurred in connection with the transaction. Other factors include,
but are not limited to: company specific risk factors including (1)
loss of key personnel; (2) intellectual property security; (3)
acquisition performance and integration; (4) the Company’s
indebtedness and how it may impact the Company’s financial
condition and the way it operates its business; (5) general risks
associated with acquisitions; (6) the anticipated benefits from the
Fill-Rite transaction may not be realized; (7) impairment in the
value of intangible assets, including goodwill; (8) defined benefit
pension plan settlement expense; (9) risk of reserve and expense
increases resulting from the LIFO2 inventory method; and (10)
family ownership of common equity; and general risk factors
including (11) continuation of the current and projected future
business environment; (12) highly competitive markets; (13)
availability and costs of raw materials and labor; (14)
cybersecurity threats; (15) compliance with, and costs related to,
a variety of import and export laws and regulations; (16)
environmental compliance costs and liabilities; (17) exposure to
fluctuations in foreign currency exchange rates; (18) conditions in
foreign countries in which The Gorman-Rupp Company conducts
business; (19) changes in our tax rates and exposure to additional
income tax liabilities; and (20) risks described from time to time
in our reports filed with the Securities and Exchange Commission.
Except to the extent required by law, we do not undertake and
specifically decline any obligation to review or update any
forward-looking statements or to publicly announce the results of
any revisions to any of such statements to reflect future events or
developments or otherwise.
The Gorman-Rupp Company
Condensed Consolidated Statements of Income (Unaudited) (thousands
of dollars, except per share data)
Three Months Ended March 31,
2024
2023
Net sales
$
159,268
$
160,466
Cost of products sold
110,874
114,943
Gross profit
48,394
45,523
Selling, general and administrative expenses
24,888
23,237
Amortization expense
3,077
3,191
Operating income
20,429
19,095
Interest expense
(10,073
)
(10,187
)
Other expense, net
(272
)
(433
)
Income before income taxes
10,084
8,475
Provision for income taxes
2,200
1,955
Net income
$
7,884
$
6,520
Earnings per share
$
0.30
$
0.25
The Gorman-Rupp Company
Condensed Consolidated Balance Sheets (Unaudited) (thousands of
dollars, except share data)
March 31,
December 31,
Assets
2024
2023
Cash and cash equivalents
$
27,772
$
30,518
Accounts receivable, net
94,757
89,625
Inventories, net
101,053
104,156
Prepaid and other
12,623
11,812
Total current assets
236,205
236,111
Property, plant and equipment, net
134,861
134,872
Other assets
24,923
24,841
Goodwill and other intangible assets, net
491,372
494,534
Total assets
$
887,361
$
890,358
Liabilities and shareholders'
equity Accounts payable
$
27,743
$
23,277
Current portion of long-term debt
24,063
21,875
Accrued liabilities and expenses
49,899
55,524
Total current liabilities
101,705
100,676
Pension benefits
11,601
11,500
Postretirement benefits
22,738
22,786
Long-term debt, net of current portion
376,666
382,579
Other long-term liabilities
20,968
23,358
Total liabilities
533,678
540,899
Shareholders' equity
353,683
349,459
Total liabilities and shareholders' equity
$
887,361
$
890,358
Shares outstanding
26,210,986
26,193,998
The Gorman-Rupp Company
Condensed Consolidated Statements of Cash Flows (Unaudited)
(thousands of dollars, except share data)
Three Months Ended March 31,
2024
2023
Cash flows from operating activities: Net income
$
7,884
$
6,520
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
7,065
7,044
LIFO expense
993
2,032
Pension expense
663
808
Stock based compensation
1,074
465
Amortization of debt issuance fees
767
740
Other
97
14
Changes in operating assets and liabilities: Accounts receivable,
net
(5,425
)
(4,264
)
Inventories, net
1,462
(7,533
)
Accounts payable
4,624
7,236
Commissions payable
(1,826
)
961
Deferred revenue and customer deposits
(169
)
859
Income taxes
2,406
1,534
Accrued expenses and other
(4,120
)
2,909
Benefit obligations
(4,753
)
(703
)
Net cash provided by operating activities
10,742
18,622
Cash flows from investing activities: Capital additions
(3,906
)
(6,450
)
Other
52
426
Net cash used for investing activities
(3,854
)
(6,024
)
Cash flows from financing activities: Cash dividends
(4,715
)
(4,567
)
Treasury share repurchases
(267
)
(1,028
)
Proceeds from bank borrowings
-
5,000
Payments to banks for borrowings
(4,375
)
(6,375
)
Other
(17
)
(34
)
Net cash used for financing activities
(9,374
)
(7,004
)
Effect of exchange rate changes on cash
(260
)
(146
)
Net increase (decrease) in cash and cash equivalents
(2,746
)
5,448
Cash and cash equivalents: Beginning of period
30,518
6,783
End of period
$
27,772
$
12,231
The Gorman-Rupp Company
Non-GAAP Financial Information (thousands of dollars, except per
share data)
Three Months Ended March 31,
2024
2023
Adjusted earnings: Reported net income – GAAP basis
$
7,884
$
6,520
Amortization of acquired customer backlog
-
514
Non-GAAP adjusted earnings
$
7,884
$
7,034
Three Months Ended March 31,
2024
2023
Adjusted earnings per share: Reported earnings per share –
GAAP basis
$
0.30
$
0.25
Amortization of acquired customer backlog
-
0.02
Non-GAAP adjusted earnings per share
$
0.30
$
0.27
Three Months Ended March 31,
2024
2023
Adjusted earnings before interest, taxes, depreciation and
amortization: Reported net income – GAAP basis
$
7,884
$
6,520
Interest expense
10,073
10,187
Provision for income taxes
2,200
1,955
Depreciation and amortization
7,065
7,044
Non-GAAP earnings before interest, taxes, depreciation and
amortization
27,222
25,706
Amortization of acquired customer backlog
-
650
Non-cash LIFO expense
993
2,032
Non-GAAP adjusted earnings before interest, taxes, depreciation and
amortization
$
28,215
$
28,388
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424557957/en/
Brigette A. Burnell Corporate Secretary The Gorman-Rupp Company
Telephone (419) 755-1246
For additional information, contact James C. Kerr, Chief
Financial Officer, Telephone (419) 755-1548.
Gorman Rupp (NYSE:GRC)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Gorman Rupp (NYSE:GRC)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024