Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score simplifies the process of finding promising growth stocks by analyzing a company's real growth prospects beyond traditional metrics [2] - Gorman-Rupp (GRC) is currently highlighted as a recommended stock due to its favorable Growth Score and top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly attractive [4] - Gorman-Rupp has a historical EPS growth rate of 11%, but projected EPS growth for this year is expected to be 16.6%, significantly higher than the industry average of 6.5% [5] Group 3: Cash Flow Growth - High cash flow growth is essential for growth-oriented companies, allowing them to fund new projects without external financing [6] - Gorman-Rupp's year-over-year cash flow growth is currently at 19.3%, well above the industry average of 2.9% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 10.6%, compared to the industry average of 9.9% [7] Group 4: Earnings Estimate Revisions - Trends in earnings estimate revisions are strongly correlated with near-term stock price movements, making them an important metric [8] - Gorman-Rupp's current-year earnings estimates have been revised upward, with the Zacks Consensus Estimate increasing by 2.5% over the past month [9] Group 5: Overall Assessment - Gorman-Rupp has achieved a Zacks Rank of 2 and a Growth Score of B, indicating its potential as an outperformer and a solid choice for growth investors [11]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Gorman-Rupp (GRC) identified as a promising candidate due to its favorable growth metrics and Zacks Rank [1][2]. Group 1: Earnings Growth - Gorman-Rupp has a historical EPS growth rate of 11%, but projected EPS growth for this year is expected to be 16.6%, significantly outperforming the industry average of 5.6% [4]. Group 2: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 19.3%, which is substantially higher than the industry average of 2.1% [5]. - Over the past 3-5 years, Gorman-Rupp's annualized cash flow growth rate has been 10.6%, compared to the industry average of 9.4% [6]. Group 3: Earnings Estimate Revisions - The current-year earnings estimates for Gorman-Rupp have been revised upward, with the Zacks Consensus Estimate increasing by 2.5% over the past month, indicating a positive trend in earnings estimate revisions [7]. Group 4: Overall Positioning - Gorman-Rupp has achieved a Growth Score of B and holds a Zacks Rank 2, positioning it well for potential outperformance in the growth stock category [9].

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The company reported significant growth in net income and EPS for Q2 and H1 2025, driven by increased sales and reduced interest expenses Consolidated Statements of Income Highlights (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $179,045 | $169,513 | +5.6% | $342,994 | $328,781 | +4.3% | | **Gross Profit** | $56,053 | $54,079 | +3.6% | $106,385 | $102,473 | +3.8% | | **Operating Income** | $26,912 | $26,049 | +3.3% | $49,037 | $46,477 | +5.5% | | **Net Income** | $15,797 | $8,335 | +89.5% | $27,925 | $16,219 | +72.2% | | **Earnings Per Share** | $0.60 | $0.32 | +87.5% | $1.06 | $0.62 | +71.0% | Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $231,290 | $220,827 | | **Total Assets** | $861,796 | $858,469 | | **Total Current Liabilities** | $96,669 | $87,527 | | **Total Liabilities** | $464,028 | $484,669 | | **Total Equity** | $397,768 | $373,800 | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $48,888 | $33,397 | | **Net cash used for investing activities** | ($5,918) | ($4,962) | | **Net cash used for financing activities** | ($40,931) | ($24,230) | | **Net increase in cash and cash equivalents** | $2,772 | $3,727 | [Notes to Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Notes detail revenue by market, debt structure, and single-segment operations, highlighting strong municipal and fire market growth Net Sales by End Market (Six Months Ended June 30, in thousands) | End Market | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Industrial | $68,747 | $68,130 | +0.9% | | Fire | $64,730 | $61,249 | +5.7% | | Agriculture | $39,621 | $41,787 | -5.2% | | Construction | $40,748 | $43,389 | -6.1% | | Municipal | $51,845 | $46,419 | +11.7% | | Petroleum | $13,900 | $11,353 | +22.4% | | OEM | $22,019 | $19,842 | +11.0% | | Repair parts | $41,384 | $36,612 | +13.0% | - As of June 30, 2025, the company had a backlog of **$224.4 million** in remaining performance obligations, substantially all of which is expected to be recognized as revenue within one year[24](index=24&type=chunk) - On May 31, 2024, the Company amended and restated its Senior Secured Credit Agreement, providing a **$370 million** term loan facility and a **$100 million** revolving credit facility, maturing in May 2029 The company also issued **$30.0 million** of 6.40% senior secured notes due in 2031[38](index=38&type=chunk)[45](index=45&type=chunk) - The company operates in a single business segment: the design, manufacture, and sale of pumps and pump systems The Chief Operating Decision Maker (CODM) assesses performance on a consolidated basis[53](index=53&type=chunk)[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 sales growth, substantial net income increase due to debt refinancing, and strong liquidity [Executive Overview and Outlook](index=19&type=section&id=Executive%20Overview%20and%20Outlook) The company's order backlog increased to **$224.4 million**, with incoming orders up **7.1%**, driven by infrastructure and data center demand - The company's order backlog was **$224.4 million** at June 30, 2025, compared to **$206.0 million** at December 31, 2024[61](index=61&type=chunk) - Incoming orders for the first six months of 2025 increased by **7.1%** to **$365.7 million** compared to the same period in 2024[61](index=61&type=chunk) - The Board of Directors authorized a quarterly dividend of **$0.185 per share**, marking the **302nd** consecutive quarterly dividend[62](index=62&type=chunk) - The company expects continued strong demand from the municipal market due to infrastructure spending and from data center construction[64](index=64&type=chunk) [Results of Operations - Three Months Ended June 30, 2025 vs. 2024](index=20&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20vs.%202024) Q2 2025 net sales rose **5.6%**, with net income surging **89.5%** due to lower interest expense and favorable other income Q2 2025 vs Q2 2024 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $179,045 | $169,513 | $9,532 | 5.6% | | **Gross Profit** | $56,053 | $54,079 | $1,974 | 3.6% | | **Operating Income** | $26,912 | $26,049 | $863 | 3.3% | | **Net Income** | $15,797 | $8,335 | $7,462 | 89.5% | - The **60 basis point** decrease in gross margin was primarily driven by a **120 basis point** increase in cost of material, which included higher LIFO expense and unfavorable product mix, partially offset by leverage from increased sales[68](index=68&type=chunk) - Interest expense decreased by **33.8%** to **$6.0 million** due to 2024 refinancing transactions and lower outstanding debt[71](index=71&type=chunk) - Other expense in Q2 2024 included a **$4.4 million** write-off of deferred debt financing fees and a **$1.8 million** prepayment fee, which did not recur in Q2 2025[72](index=72&type=chunk) [Results of Operations - Six Months Ended June 30, 2025 vs. 2024](index=23&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20vs.%202024) H1 2025 net sales grew **4.3%**, with net income rising **72.2%** due to reduced interest expense and improved operating margin H1 2025 vs H1 2024 Performance (in thousands) | Metric | H1 2025 | H1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $342,994 | $328,781 | $14,213 | 4.3% | | **Gross Profit** | $106,385 | $102,473 | $3,912 | 3.8% | | **Operating Income** | $49,037 | $46,477 | $2,560 | 5.5% | | **Net Income** | $27,925 | $16,219 | $11,706 | 72.2% | - Sales growth was led by the municipal, repair parts, fire suppression, petroleum, and OEM markets, while construction and agriculture markets saw declines[77](index=77&type=chunk) - Interest expense decreased by **36.2%** to **$12.2 million** due to debt refinancing in May 2024 and lower debt levels[81](index=81&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$27.0 million** cash and **$99.1 million** available credit, planning **$20.0 million** in 2025 capex - Primary liquidity sources are cash from operations and the Credit Facility, with **$99.1 million** available under the revolver as of June 30, 2025[89](index=89&type=chunk) - Net cash from operating activities increased to **$48.9 million** in H1 2025 from **$33.4 million** in H1 2024, primarily due to higher net income[94](index=94&type=chunk) - Capital expenditures for H1 2025 were **$6.0 million**, with a full-year plan of approximately **$20.0 million**[91](index=91&type=chunk) - The company has a share repurchase program with **$48.1 million** available as of June 30, 2025[93](index=93&type=chunk) [Non-GAAP Financial Information](index=25&type=section&id=Non-GAAP%20Financial%20Information) Non-GAAP Adjusted EBITDA for H1 2025 was **$65.0 million**, providing a clearer operational comparison by excluding specific items Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net income – GAAP basis** | $15,797 | $8,335 | $27,925 | $16,219 | | Interest expense | $5,990 | $9,048 | $12,192 | $19,120 | | Provision for income taxes | $4,587 | $2,335 | $7,994 | $4,535 | | Depreciation and amortization | $6,974 | $7,024 | $13,937 | $14,089 | | Write-off/Refinancing costs | — | $7,493 | — | $7,493 | | Non-cash LIFO expense | $1,928 | $1,134 | $2,923 | $2,127 | | **Adjusted EBITDA** | **$35,276** | **$35,369** | **$64,971** | **$63,583** | [Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces interest rate risk on its variable-rate debt, partially hedged, with limited foreign currency exposure - The company is exposed to interest rate risk on its **$310.8 million** Senior Term Loan Facility, which bears interest at a variable rate (Adjusted Term SOFR plus 2.0% at June 30, 2025)[102](index=102&type=chunk) - To mitigate interest rate risk, the company uses interest rate swap agreements, designated as cash flow hedges[103](index=103&type=chunk) - A hypothetical **100 basis point** increase in interest rates is estimated to increase annual interest expense by approximately **$1.7 million**[104](index=104&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[107](index=107&type=chunk) - There were no changes in internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[108](index=108&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, new risk factors on trade policy, share repurchase status, and filed exhibits [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings were reported from the prior Annual Report on Form 10-K - There are no material changes from the legal proceedings previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024[109](index=109&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) A supplemental risk factor addresses potential adverse effects of U.S. trade policy, including tariffs on materials and sales - A supplemental risk factor was added concerning U.S. trade policy, noting that tariffs could increase the cost of imported materials and that retaliatory tariffs from other countries could apply to the company's products sold internationally[110](index=110&type=chunk) [Issuer Purchases of Equity Securities](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No common shares were repurchased in Q2 2025 under the public program, with **$48.1 million** remaining for future purchases Issuer Purchases of Common Shares (Q2 2025) | Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced program | | :--- | :--- | :--- | :--- | | April 1 to April 30, 2025 | — | — | — | | May 1 to May 31, 2025 | — | — | — | | June 1 to June 30, 2025 | — | — | — | | **Total** | **—** | **—** | **—** | [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) The report includes key exhibits such as CEO and CFO certifications and financial statements in Inline XBRL format - Key exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[116](index=116&type=chunk) - Financial statements and the cover page interactive data file are provided in Inline eXtensible Business Reporting Language (XBRL) format[116](index=116&type=chunk)

[Financial Results](index=1&type=section&id=Financial%20Results) The company reported strong Q2 and year-to-date 2025 financial performance, marked by record sales, substantial net income growth, and improved cash flow driven by strategic debt reduction [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Q2 2025 achieved record net sales of **$179.0 million** and **90.0%** net income growth, driven by strong market performance and reduced interest expense Q2 2025 vs Q2 2024 Financial Performance | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $179.0M | $169.5M | +5.6% | | Gross Profit | $56.1M | $54.1M | +3.7% | | Gross Margin | 31.3% | 31.9% | -60 bps | | Operating Income | $26.9M | $26.0M | +3.5% | | Net Income | $15.8M | $8.3M | +90.0% | | Diluted EPS | $0.60 | $0.32 | +87.5% | | Adjusted Diluted EPS | $0.60 | $0.54 | +11.1% | Q2 2025 Net Sales Change by Market (YoY) | Market | Sales Change (in millions) | | :--- | :--- | | Municipal | +$3.5 | | Fire Suppression | +$2.8 | | Industrial | +$1.6 | | Petroleum | +$1.5 | | Repair | +$1.5 | | Construction | +$0.1 | | OEM | -$0.3 | | Agriculture | -$1.2 | - Gross margin **decreased by 60 basis points** to **31.3%**, **primarily due to** a **120 basis point** increase in material costs (including LIFO expense), which was **partially offset by** a **60 basis point** improvement from labor and overhead leverage[4](index=4&type=chunk) - Interest expense **decreased significantly** to **$6.0 million** from **$9.0 million** in Q2 2024, **mainly due to** **debt refinancing transactions** completed in May 2024 and a **reduction in outstanding debt**[7](index=7&type=chunk) - The company reported **record incoming orders** of **$188.0 million**, a **15.7% increase** compared to the second quarter of the previous year[10](index=10&type=chunk) [Year to Date 2025 Highlights](index=2&type=section&id=Year%20to%20Date%202025%20Highlights) H1 2025 net sales **increased by 4.3%** to **$343.0 million**, with net income **up 72.2%** and **$30.0 million** debt reduction First Half 2025 vs First Half 2024 Financial Performance | Financial Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $343.0M | $328.8M | +4.3% | | Gross Profit | $106.4M | $102.5M | +3.8% | | Gross Margin | 31.0% | 31.2% | -20 bps | | Operating Income | $49.0M | $46.5M | +5.4% | | Net Income | $27.9M | $16.2M | +72.2% | | Diluted EPS | $1.06 | $0.62 | +71.0% | | Adjusted EBITDA | $65.0M | $63.6M | +2.2% | - **Sales growth** in the first half was **led by** the municipal (+$5.4M), repair (+$4.8M), and fire suppression (+$3.5M) markets. This was **partially offset by declines** in the construction (-$2.6M) and agriculture (-$2.2M) markets[13](index=13&type=chunk) - **Total debt was reduced by $30.0 million** during the first six months of 2025. **Net cash provided by operating activities increased to $48.9 million** from **$33.4 million** in the prior-year period[21](index=21&type=chunk)[22](index=22&type=chunk) - The **order backlog was $224.4 million** at June 30, 2025, **consistent with the prior year**, while **incoming orders for the first six months increased 7.1%** to **$365.7 million**[20](index=20&type=chunk) [Management Commentary](index=3&type=section&id=Management%20Commentary) Management attributes strong financial performance to infrastructure spending and a robust U.S.-based supply chain, optimistic for H2 [CEO Commentary](index=3&type=section&id=CEO%20Commentary) CEO attributes **record sales** and **EPS** to **infrastructure spending** and a **U.S.-based supply chain**, optimistic for H2 - **Key growth drivers** include **infrastructure spending** in the municipal market and **increased demand** related to data center construction[23](index=23&type=chunk) - The company's **primarily U.S.-based supply chain** is considered a **competitive advantage**, helping to **mitigate tariff impacts**[23](index=23&type=chunk) - **Strong cash flow** facilitated a **$30 million debt reduction** in the first half of 2025, **improving the company's financial position**[23](index=23&type=chunk) - Management is **optimistic about the second half of the year**, supported by **positive incoming order trends** and **current backlog levels**[23](index=23&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Detailed financial statements reveal significant year-over-year improvements in net income and operating cash flow, alongside a reduction in total liabilities [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Income statement shows year-over-year growth in net sales and operating income, with reduced interest expense boosting net income Income Statement Summary (in thousands) | Account | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $179,045 | $169,513 | $342,994 | $328,781 | | Gross Profit | $56,053 | $54,079 | $106,385 | $102,473 | | Operating Income | $26,912 | $26,049 | $49,037 | $46,477 | | Interest Expense | $(5,990) | $(9,048) | $(12,192) | $(19,120) | | Net Income | $15,797 | $8,335 | $27,925 | $16,219 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheet shows total assets of **$861.8 million**, with total liabilities decreased by **$20.7 million** due to debt reduction Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $231,290 | $220,827 | | Total Assets | $861,796 | $858,469 | | Long-term Debt, net | $318,564 | $348,097 | | Total Liabilities | $464,028 | $484,669 | | Shareholders' Equity | $397,768 | $373,800 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow **increased** to **$48.9 million** in H1 2025, with **$30.0 million** used for debt repayment Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $48,888 | $33,397 | | Net Cash used for Investing Activities | $(5,918) | $(4,962) | | Net Cash used for Financing Activities | $(40,931) | $(24,230) | | Net Increase in Cash | $2,772 | $3,727 | - **Key uses of cash** in H1 2025 included **$30.0 million** in **debt payments**, **$9.7 million** in **cash dividends**, and **$6.0 million** in **capital expenditures**[22](index=22&type=chunk)[35](index=35&type=chunk) [Non-GAAP Financial Information](index=3&type=section&id=Non-GAAP%20Financial%20Information) Non-GAAP financial measures are presented to provide a clearer view of operational performance by excluding non-comparable factors [Reconciliation of GAAP to Non-GAAP Measures](index=3&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Non-GAAP measures like **Adjusted EPS** and **EBITDA** provide clearer operational comparison by excluding non-comparable factors - Management uses **non-GAAP measures** like **adjusted earnings**, **adjusted EPS**, and **Adjusted EBITDA** to **assess comparative operations** against prior periods **without the distortion of non-comparable factors** like refinancing costs[25](index=25&type=chunk) Adjusted Earnings Per Share (EPS) Reconciliation | Description | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP EPS | $0.60 | $0.32 | $1.06 | $0.62 | | Adjustments (Refinancing, etc.) | $0.00 | $0.22 | $0.00 | $0.22 | | Non-GAAP Adjusted EPS | $0.60 | $0.54 | $1.06 | $0.84 | Adjusted EBITDA Reconciliation (in thousands) | Description | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (GAAP) | $15,797 | $8,335 | $27,925 | $16,219 | | Adjustments | $19,479 | $27,034 | $37,046 | $47,364 | | Non-GAAP Adjusted EBITDA | $35,276 | $35,369 | $64,971 | $63,583 | [Other Information](index=3&type=section&id=Other%20Information) This section provides an overview of The Gorman-Rupp Company's business and outlines key risks associated with forward-looking statements [About The Gorman-Rupp Company](index=3&type=section&id=About%20The%20Gorman-Rupp%20Company) Gorman-Rupp, founded 1933, is a **leading global manufacturer** of pumps for **diverse liquid-handling applications** - The company is a **leading designer, manufacturer, and international marketer** of pumps and pump systems for various liquid-handling applications[24](index=24&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to risks including supply chain, competition, cybersecurity, and trade policy - The **news release contains forward-looking statements** based on assumptions that are **subject to risks and uncertainties** which **could cause actual results to differ materially**[27](index=27&type=chunk) - **Key risk factors** include **supply chain conditions**, **availability and costs of materials**, **competitive markets**, **cybersecurity threats**, **artificial intelligence challenges**, and the **impact of U.S. trade policy and tariffs**[27](index=27&type=chunk)[28](index=28&type=chunk)

Group 1 - Gorman-Rupp (GRC) reported quarterly earnings of $0.6 per share, exceeding the Zacks Consensus Estimate of $0.55 per share, and showing an increase from $0.54 per share a year ago, representing an earnings surprise of +9.09% [1] - The company posted revenues of $179.05 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.55%, compared to year-ago revenues of $169.51 million [2] - Gorman-Rupp shares have underperformed the market, losing about 0.1% since the beginning of the year, while the S&P 500 gained 8.2% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.55 on revenues of $173.23 million, and for the current fiscal year, it is $1.99 on revenues of $680.77 million [7] - The Manufacturing - General Industrial industry, to which Gorman-Rupp belongs, is currently in the top 14% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Performance - Record net sales for Q2 2025 reached $179.0 million, a 5.6% increase or $9.5 million compared to Q2 2024[101] - Record incoming orders for Q2 2025 were $188.0 million, up 15.7% or $25.5 million from Q2 2024[101] - Net sales for the six months ended June 30, 2025, were $343.0 million, a 4.3% increase or $14.2 million compared to the same period in 2024[104] - Adjusted EBITDA for Q2 2025 was $35.3 million, representing 19.7% of net sales[100] - Adjusted earnings per share for Q2 2025 were $0.60[100] - Adjusted EBITDA for the first six months of 2025 increased to $65.0 million, a 2.2% increase or $1.4 million from $63.6 million in 2024[104] Capital Structure and Dividends - Total debt decreased by $30 million in the first six months of 2025[109] - The company has a strong dividend track record with over 75 years of cash dividends and 52 consecutive years of increases[7, 117] - The current annualized dividend rate is $0.74 per share, yielding 2.0% as of June 30, 2025[118] International Sales - International sales represent approximately 25% of total company sales annually[75] - In 2024, international sales totaled $168 million, with $90 million exported from the USA and $78 million direct from international locations[76]

Company Overview - Gorman-Rupp (GRC) is located in Mansfield and operates within the Industrial Products sector, experiencing a price change of -2.35% since the beginning of the year [3] - The company currently pays a dividend of $0.19 per share, resulting in a dividend yield of 2%, which is significantly higher than the Manufacturing - General Industrial industry's yield of 0.21% and the S&P 500's yield of 1.54% [3] Dividend Performance - Gorman-Rupp's annualized dividend of $0.74 has increased by 2.1% from the previous year, with a total of five dividend increases over the last five years, averaging an annual increase of 4.62% [4] - The current payout ratio stands at 39%, indicating that the company distributes 39% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - For the fiscal year 2025, the Zacks Consensus Estimate predicts earnings of $1.99 per share, reflecting a 13.71% increase compared to the previous year [5] - The company is viewed as a strong dividend investment opportunity, particularly in the context of rising interest rates, where high-yielding stocks may face challenges [6]

Gorman-Rupp Company (GRC) Conference Summary Company Overview - Gorman-Rupp Company is a manufacturer of pumps and pump-related systems, serving a wide range of end markets [2][4] - The company has a strong brand reputation and focuses on customer service [5][6] Industry Insights - The global pump industry is valued at approximately $80 billion annually [9] - The industry is highly fragmented, presenting numerous acquisition opportunities [9] Financial Performance - Significant growth in net sales and adjusted EPS over the last four years, driven by both organic growth and the Fill Rite acquisition [19][20] - Organic growth rates were 15% in 2022 and 16% in 2023 [20] - 2024 adjusted EPS reached a record of $1.75, with adjusted EBITDA nearly $125 million [23] - Incoming orders in 2024 increased by 6.8% compared to 2023, with a strong backlog of $218 million at the end of Q1 2025 [25][26] Capital Allocation and Debt Management - Historical capital expenditure of about $20 million annually, primarily for machinery and equipment [30] - The company has a long history of dividend payments, with 52 consecutive years of increases [33] - Debt has decreased by $43 million in 2024, with expectations for similar reductions in 2025 [28] Growth Strategy - Focus on customer service and maintaining a high-performing culture as key growth pillars [35][36] - Plans for strategic acquisitions once leverage is reduced to below two times EBITDA [58][63] - Continued emphasis on new product development, particularly in self-priming pump technology [65][66] Market Dynamics - The company benefits from a U.S.-centric supply chain, which has provided advantages during macroeconomic challenges [6][43] - Strong relationships with distributors and a diverse product offering help mitigate risks during economic cycles [16][17] Customer Relationships and Pricing Strategy - Customers prioritize reliability and value over price sensitivity, particularly for repair parts [54][55] - The company maintains a stable pricing model, mindful of inflationary pressures [56][57] Conclusion - Gorman-Rupp Company is well-positioned for continued growth through a combination of organic initiatives and strategic acquisitions, supported by a strong financial foundation and commitment to customer service [41][42]

Core Viewpoint - Gorman-Rupp (GRC) is identified as a promising growth stock due to its strong earnings and cash flow growth, along with positive earnings estimate revisions, making it a solid choice for growth investors [2][10]. Earnings Growth - Gorman-Rupp has a historical EPS growth rate of 8.7%, but projected EPS growth for this year is expected to be 13.7%, significantly higher than the industry average of 6.3% [4]. Cash Flow Growth - The company is experiencing a year-over-year cash flow growth of 19.3%, which surpasses the industry average of 1.6% [5]. - Over the past 3-5 years, Gorman-Rupp's annualized cash flow growth rate has been 10.6%, compared to the industry average of 8.4% [6]. Earnings Estimate Revisions - The current-year earnings estimates for Gorman-Rupp have been revised upward, with the Zacks Consensus Estimate increasing by 0.5% over the past month [8].

Core Insights - Gorman-Rupp (GRC) is currently viewed as a more attractive investment option compared to Trimble Navigation (TRMB) for value investors due to its stronger earnings outlook and better valuation metrics [3][7]. Valuation Metrics - GRC has a forward P/E ratio of 19.61, while TRMB has a higher forward P/E of 24.68 [5]. - The PEG ratio for GRC is 1.51, indicating a more favorable growth outlook compared to TRMB's PEG ratio of 2.47 [5]. - GRC's P/B ratio stands at 2.69, which is lower than TRMB's P/B ratio of 3.14, suggesting GRC is undervalued relative to its book value [6]. Earnings Estimate Revisions - GRC has experienced stronger estimate revision activity, which is a positive indicator for its earnings outlook compared to TRMB [7].