[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%2EFINANCIAL%20INFORMATION) This section details unaudited financial statements, management's discussion and analysis, market risk, and internal controls [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Q3 and nine months ended September 30, 2023 and 2022, along with detailed notes on accounting policies and the Fill-Rite acquisition Consolidated Statements of Income Highlights (in thousands, except per share amounts) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $167,456 | $153,792 | $498,946 | $375,026 | | **Gross profit** | $48,134 | $40,563 | $145,315 | $94,299 | | **Operating income** | $21,875 | $15,311 | $65,253 | $27,676 | | **Net income** | $8,978 | $2,221 | $25,975 | $8,768 | | **Earnings per share** | $0.34 | $0.09 | $0.99 | $0.34 | Consolidated Balance Sheet Highlights (in thousands) | Metric | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $233,129 | $225,526 | | **Total assets** | $891,377 | $872,830 | | **Total current liabilities** | $102,446 | $85,213 | | **Total liabilities** | $544,597 | $541,636 | | **Total equity** | $346,780 | $331,194 | Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $71,659 | $12,508 | | **Net cash used for investing activities** | ($16,309) | ($537,242) | | **Net cash provided by (used for) financing activities** | ($43,404) | $411,087 | | **Net increase (decrease) in cash** | $11,406 | ($114,906) | - On May 31, 2022, the Company acquired Fill-Rite for cash consideration of **$528.0 million**, funded with new debt and cash on hand, with acquisition results included from that date[20](index=20&type=chunk)[21](index=21&type=chunk) Net Sales by End Market - Nine Months Ended Sep 30 (in thousands) | End Market | 2023 | 2022 | | :--- | :--- | :--- | | Industrial | $103,886 | $72,452 | | Fire | $109,211 | $88,237 | | Agriculture | $65,292 | $37,571 | | Construction | $66,723 | $42,581 | | Municipal | $55,831 | $51,940 | | Petroleum | $16,440 | $11,506 | | OEM | $28,223 | $25,802 | | Repair parts | $53,340 | $44,937 | | **Total net sales** | **$498,946** | **$375,026** | - As of September 30, 2023, the company's backlog was **$237.5 million**, expected to be recognized as revenue within one year[27](index=27&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results of operations, analyzing revenue, profitability, liquidity, and cash flows for the periods presented - The company's order backlog was **$237.5 million** at September 30, 2023, a decrease from **$266.7 million** in 2022, though incoming orders for the first nine months of 2023 increased by **6.9%**[58](index=58&type=chunk) - The Board of Directors authorized a quarterly dividend of **$0.18 per share**, marking the company's 295th consecutive quarterly dividend[59](index=59&type=chunk) - The company maintains an optimistic outlook, supported by a strong backlog and expanded capacity from the new Fill-Rite manufacturing facility[61](index=61&type=chunk) [Results of Operations - Three Months Ended Sep 30, 2023 vs 2022](index=16&type=section&id=Three%20Months%20Ended%20September%2030%2C%202023%20vs.%20Three%20Months%20Ended%20September%2030%2C%202022) Q3 2023 net sales grew **8.9%** to **$167.5 million**, with gross margin improving **230 basis points** and net income increasing over **300%**, driven by sales leverage and favorable cost management Q3 Net Sales by Market (in thousands) | End Market | Q3 2023 | Q3 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Industrial | $34,777 | $32,093 | $2,684 | 8.4% | | Fire | $35,986 | $31,785 | $4,201 | 13.2% | | Construction | $23,388 | $19,886 | $3,502 | 17.6% | | Petroleum | $5,801 | $4,832 | $969 | 20.1% | | OEM | $9,730 | $7,767 | $1,963 | 25.3% | | Repair parts | $17,698 | $15,250 | $2,448 | 16.1% | | **Total net sales** | **$167,456** | **$153,792** | **$13,664** | **8.9%** | - Gross margin for Q3 2023 increased to **28.7%** from **26.4%** in Q3 2022, a **230 basis point** improvement driven by better material costs and price realization, partially offset by higher labor and overhead[64](index=64&type=chunk) - Q3 2023 operating income rose **42.9%** to **$21.9 million** (**13.1%** margin) from **$15.3 million** (**10.0%** margin) in Q3 2022, driven by improved gross margin and sales leverage[68](index=68&type=chunk) - Net income for Q3 2023 was **$9.0 million** (**$0.34 per share**), a **304.2%** increase from **$2.2 million** (**$0.09 per share**) in Q3 2022, with the prior year impacted by a **$4.8 million** non-cash pension settlement charge[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) [Results of Operations - Nine Months Ended Sep 30, 2023 vs 2022](index=19&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202023%20vs.%20Nine%20Months%20Ended%20September%2030%2C%202022) For the first nine months of 2023, net sales rose **33.0%** to **$498.9 million**, driven by the Fill-Rite acquisition and organic growth, resulting in substantial improvements in gross margin, operating income, and net income - Net sales for the first nine months of 2023 increased **33.0%** to **$498.9 million**, driven by full nine-month Fill-Rite sales, increased volume, and **4.0% - 5.0%** pricing increases[73](index=73&type=chunk) - Gross margin for the first nine months of 2023 improved by **400 basis points** to **29.1%** from **25.1%**, due to favorable material costs, price realization, and better labor/overhead leverage from higher sales volume[76](index=76&type=chunk) - Operating income for the nine-month period was **$65.3 million** (**13.1%** margin), a **135.8%** increase from **$27.7 million** (**7.4%** margin) in 2022, with the prior year including **$7.0 million** in one-time acquisition costs and **$1.4 million** in inventory step-up amortization[79](index=79&type=chunk) - Net income for the first nine months of 2023 was **$26.0 million** (**$0.99 per share**), compared to **$8.8 million** (**$0.34 per share**) for the same period in 2022[84](index=84&type=chunk) [Non-GAAP Financial Information](index=21&type=section&id=Non-GAAP%20Financial%20Information) This section reconciles GAAP to non-GAAP financial measures, including adjusted EPS, by excluding specific non-recurring items to provide a clearer view of underlying operational performance Reconciliation of Reported to Non-GAAP Adjusted EPS | | Three Months Ended Sep 30, | Nine Months Ended Sep 30, | | :--- | :--- | :--- | | **Per Share Data** | **2023** | **2022** | **2023** | **2022** | | Reported EPS – GAAP basis | $0.34 | $0.09 | $0.99 | $0.34 | | Plus: Pension settlement charge | - | $0.14 | - | $0.19 | | Plus: One-time acquisition costs | - | - | - | $0.21 | | Plus: Amortization of inventory step-up | - | - | - | $0.04 | | Plus: Amortization of customer backlog | - | $0.02 | $0.03 | $0.03 | | **Non-GAAP adjusted EPS** | **$0.34** | **$0.25** | **$1.02** | **$0.81** | [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity relies on cash from operations and its credit facility, with significant operational cash flow growth and planned capital expenditures, while maintaining compliance with debt covenants - Primary liquidity sources are cash from operations and the credit facility, with **$18.2 million** cash and **$96.3 million** available under the revolving credit facility as of September 30, 2023[87](index=87&type=chunk) - Total debt outstanding was **$420.1 million** as of September 30, 2023, with the company in compliance with all debt covenants[88](index=88&type=chunk) - Full-year 2023 capital expenditures are planned to be approximately **$20 million**, primarily for building improvements and machinery[89](index=89&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $71,659 | $12,508 | | Net cash used for investing activities | ($16,309) | ($537,242) | | Net cash provided by (used for) financing activities | ($43,404) | $411,087 | [Quantitative and Qualitative Disclosures about Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate and foreign currency fluctuations, managing interest rate risk with swaps and foreign currency risk by invoicing in local currencies - The company's primary market risks are changes in interest rates and foreign currency exchange rates[98](index=98&type=chunk) - To mitigate interest rate risk on variable-rate debt, the company uses interest rate swap agreements designated as cash flow hedges[100](index=100&type=chunk) - A hypothetical **100 basis point** increase in interest rates is estimated to increase annual interest expense by approximately **$2.6 million**[101](index=101&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2023, with ongoing integration of Fill-Rite's internal controls and no other material changes during the quarter - The principal executive and financial officers concluded that disclosure controls and procedures were effective as of September 30, 2023[104](index=104&type=chunk) - The company is integrating the internal controls of the acquired Fill-Rite business, with no other material changes to internal controls during the quarter[105](index=105&type=chunk) [PART II. OTHER INFORMATION](index=25&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other required disclosures, reporting no material changes to legal proceedings or risk factors, no share repurchases in Q3, and no defaults on senior securities [Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) This section reports no material changes to legal proceedings since the company's last annual report on Form 10-K - No material changes to legal proceedings were reported since the fiscal year-end 2022 Form 10-K[106](index=106&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) This section reports no material changes to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - No material changes to risk factors were reported since the fiscal year-end 2022 Form 10-K[107](index=107&type=chunk) [Issuer Purchases of Equity Securities](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) During Q3 2023, the company did not repurchase any common shares, with approximately **$48.1 million** remaining available under the repurchase program Issuer Purchases of Common Shares - Q3 2023 | Period | Total number of shares purchased | Average price paid per share | Approximate dollar value of shares that may yet be purchased under the program | | :--- | :--- | :--- | :--- | | July 2023 | - | - | $48,067 | | August 2023 | - | - | $48,067 | | September 2023 | - | - | $48,067 | | **Total** | **-** | **-** | **$48,067** |

Financial Performance - The company's net sales for Q2 2023 were $171.0 million, an increase of 43.6% compared to $119.1 million in Q2 2022, with domestic sales up 50.3% and international sales up 26.8%[59]. - Net sales for the first six months of 2023 were $331.5 million, an increase of 49.8% or $110.3 million compared to $221.2 million in the same period of 2022[68]. - Domestic sales increased by 57.2% or $90.3 million, while international sales rose by 31.5% or $20.0 million compared to the first half of 2022[68]. - Fill-Rite sales contributed $42.9 million in Q2 2023, a significant increase from $13.5 million in the same period of 2022, reflecting a 216.7% growth[60]. - Fill-Rite sales were $82.8 million for the first six months of 2023, a significant increase from $13.5 million in the same period of 2022, contributing to overall sales growth[69]. Profitability - Gross profit for Q2 2023 was $51.7 million, resulting in a gross margin of 30.2%, up from $28.2 million and 23.7% in Q2 2022, reflecting a 650 basis point increase[61]. - Gross profit was $97.2 million with a gross margin of 29.3%, up from $53.7 million and 24.3% in the same period of 2022, reflecting a 500 basis point increase in gross margin[70]. - Operating income surged to $24.3 million in Q2 2023, a 735.3% increase from $2.9 million in Q2 2022, with an operating margin of 14.2%[64]. - Operating income for the first six months of 2023 was $43.4 million, resulting in an operating margin of 13.1%, compared to $12.4 million and 5.6% in the same period of 2022[74]. - Net income for Q2 2023 was $10.5 million, or $0.40 per share, compared to a net loss of $1.0 million, or ($0.04) per share, in Q2 2022, marking a 1151.9% increase[66]. - Net income was $17.0 million, or $0.65 per share, for the first six months of 2023, compared to $6.5 million, or $0.25 per share, in the same period of 2022, representing a 159.6% increase[76]. - Reported net income for Q2 2023 was $10.5 million, compared to a loss of $1.0 million in Q2 2022, representing a significant turnaround[80]. - Non-GAAP adjusted earnings per share for Q2 2023 increased to $0.41 from $0.27 in Q2 2022, reflecting a growth of 51.9%[80]. - Adjusted earnings per share for the first six months of 2023 were $0.68, compared to $0.56 in the same period of 2022, reflecting an unfavorable LIFO impact[77]. Expenses and Debt - SG&A expenses were $24.2 million, or 14.1% of net sales, for Q2 2023, compared to $24.1 million and 20.3% of net sales in Q2 2022, reflecting improved leverage from increased sales[62]. - Selling, general and administrative (SG&A) expenses were $47.4 million, or 14.3% of net sales, compared to $39.9 million and 18.1% in the same period of 2022[71]. - Interest expense increased to $10.5 million in Q2 2023 from $2.3 million in Q2 2022, primarily due to the Fill-Rite acquisition and rising interest rates[65]. - Interest expense increased to $20.7 million for the first six months of 2023, compared to $2.3 million in the same period of 2022, primarily due to the Fill-Rite acquisition financing[75]. - Total debt outstanding as of June 30, 2023, was $439.5 million, with compliance to debt covenants maintained[82]. Cash Flow and Capital Expenditures - Net cash provided by operating activities for the first half of 2023 was $37.9 million, a significant increase from $6.7 million in the same period last year[86]. - Capital expenditures for the first half of 2023 were $13.3 million, with full-year expectations set between $18 million and $20 million[83]. - Cash and cash equivalents at the end of Q2 2023 totaled $12.2 million, with an additional $80.9 million available under the revolving credit facility[81]. Dividends and Share Repurchase - The company authorized a quarterly dividend of $0.175 per share, marking the 294th consecutive quarterly dividend payment[56]. - A share repurchase program of up to $50 million was authorized, with $48.1 million available for repurchase as of June 30, 2023[85]. - The company expects to continue its history of paying regular dividends and aims to improve cash flow and debt leverage in the future[58]. Other Considerations - The company's backlog of orders was $249.8 million as of June 30, 2023, down from $264.7 million a year earlier, but incoming orders increased by 12.0% to $321.0 million in the first half of 2023[55]. - Foreign currency transaction losses for the first half of 2023 were $0.4 million, compared to gains of $0.1 million in the same period of 2022[96]. - A hypothetical increase of 100 basis points in interest rates would increase interest expense by approximately $2.7 million annually[95].

or UNITED STATES 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 For the Quarterly Period Ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-6747 The Gorman-Rupp Company (Exact name of registrant as specified in its charter) | Ohio | 34-0253990 | | --- | --- | | (State or other ju ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 1-6747 THE GORMAN-RUPP COMPANY (Exact name of Registrant as specified in its charter) (State or other jurisdiction of Ohio 34-0 ...

Financial Performance - Adjusted earnings per share for 2019 were $1.37, a decrease of 10.5% from $1.53 in 2018[79] - Net sales for 2019 were $398.2 million, down 3.9% or $16.1 million compared to $414.3 million in 2018[86] - Gross profit for 2019 was $102.7 million, resulting in a gross margin of 25.8%, down from 26.5% in 2018[87] - Operating income decreased by 13.4% to $43.8 million, with an operating margin of 11.0% compared to 12.2% in 2018[103] - Net income for 2019 was $35.8 million, a decrease of 10.4% from $40.0 million in 2018[104] - Free cash flow for 2019 was $33.6 million, a significant recovery from a negative $8.8 million in 2018[125] Sales Breakdown - Domestic sales increased by 1.3% or $3.5 million, while international sales decreased by 13.8% or $19.6 million[86] - Net sales for 2018 were $414.3 million, an increase of 9.2% or $34.9 million compared to 2017[109] - International sales in 2018 were $142.5 million, representing 34.4% of total sales, a decrease from 36.3% in 2017[112] Expenses and Margins - Selling, general and administrative expenses for 2018 were $59.3 million, or 14.3% of net sales, down from 14.6% in 2017[115] - Operating income for 2018 was $50.6 million, with an operating margin of 12.2%, an increase of 1.2 percentage points from 2017[116] Tax and Credits - The effective tax rate for 2019 was 20.7%, slightly up from 20.5% in 2018, benefiting from higher research and development tax credits[104] - The company's effective income tax rate was 20.7% for 2019, down from 32.6% in 2017, primarily due to the Tax Cuts and Jobs Act[147] - The company has completed its accounting for the tax effects of the Tax Cuts and Jobs Act as of December 31, 2018[148] Capital Expenditures - Capital expenditures for 2020 are planned to be in the range of $15-$18 million, primarily for building improvements and machinery purchases[85] - Capital expenditures for 2020 are estimated to be in the range of $15-$18 million, primarily for machinery and equipment[122] Order Backlog - The company's backlog of orders was $105.0 million at December 31, 2019, down 7.7% from $113.7 million at the end of 2018[92] Pension and Benefits - The company expects to contribute up to $2 million to its defined benefit pension plan in 2020[124] - The discount rates used to value pension plan obligations were 2.83% and 3.94% at December 31, 2019 and 2018, respectively[143] - A one percentage point increase in the assumed health care trend would increase postretirement expense by approximately $0.3 million[146] Asset Valuation - Goodwill related to the National Pump Company reporting unit represents 4% of the company's total assets as of December 31, 2019[160] - The fair value of indefinite-lived intangible assets exceeded their carrying values for both 2019 and 2018[162] Other Financial Metrics - The company generated $58.9 million in adjusted earnings before interest, taxes, depreciation, and amortization in 2019[84] - The estimated allowance for bad debts is based on the length of time receivables are past due, with historical collection rates being good[139] - The company has not experienced substantive write-offs due to inventory obsolescence, using the last-in, first-out (LIFO) method for inventory valuation[140] - The company recorded foreign currency transaction gains of $0.1 million for the year ending December 31, 2019, compared to losses of $(0.8) million in 2018[165] - The company estimates profit on long-term contracts based on total estimated revenue and expected costs, with adjustments made under the cumulative catch-up method[138]