The Gorman-Rupp pany(GRC) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for Q3 2024 were $168.2 million, a slight increase of 0.4% compared to $167.5 million in Q3 2023, driven by pricing increases despite a decrease in volume[61]. - Gross profit for Q3 2024 was $52.7 million, resulting in a gross margin of 31.3%, up from $48.1 million and 28.7% in Q3 2023, reflecting a 260 basis point improvement[63]. - Operating income for Q3 2024 was $23.9 million, with an operating margin of 14.2%, compared to $21.9 million and 13.1% in Q3 2023, indicating a 110 basis point increase[66]. - Net income for Q3 2024 was $12.9 million, or $0.49 per share, compared to $9.0 million, or $0.34 per share, in Q3 2023, representing a 43.9% increase[69]. - For the first nine months of 2024, total net sales were $496.9 million, a decrease of 0.4% from $498.9 million in the same period of 2023, attributed to a decrease in volume[71]. - Gross profit for the first nine months of 2024 was $155.1 million, with a gross margin of 31.2%, up from $145.3 million and 29.1% in the same period of 2023[73]. - Operating income increased to $70.4 million, with an operating margin of 14.2%, compared to $65.3 million and 13.1% in the same period of 2023[76]. - Net income for the first nine months of 2024 was $29.1 million, or $1.11 per share, compared to $26.0 million, or $0.99 per share, in the same period of 2023[81]. - Adjusted EBITDA was $95.6 million, representing 19.2% of net sales for the first nine months of 2024, compared to $92.6 million and 18.6% in the prior year[81]. Expenses and Costs - SG&A expenses increased to $25.7 million in Q3 2024, representing 15.3% of net sales, up from $23.2 million and 13.9% in Q3 2023, due to higher payroll and selling activity[65]. - SG&A expenses rose to $75.5 million, representing 15.2% of net sales, compared to $70.7 million and 14.2% in the prior year[75]. - Interest expense decreased to $7.8 million in Q3 2024, down 25.9% from $10.5 million in Q3 2023, primarily due to refinancing transactions[67]. - Interest expense decreased to $26.9 million, down 13.7% from $31.1 million in the same period of 2023, due to debt refinancing[77]. Cash Flow and Capital Management - Net cash provided by operating activities for the first nine months of 2024 was $60.6 million, a decrease from $71.7 million in the same period last year[90]. - Net cash used for financing activities was $43.6 million for the first nine months of 2024, primarily due to net payments on bank borrowings of $28.4 million and dividend payments of $14.2 million[92]. - Capital expenditures for the first nine months of 2024 were $10.3 million, with full-year 2024 planned capital expenditures expected to be approximately $18 - $20 million[87]. - Capital expenditures for the first nine months of 2024 included $10.3 million primarily for machinery and equipment, partially offset by $2.3 million in proceeds from the sale of property, plant, and equipment[91]. Debt and Interest Rates - As of September 30, 2024, the Company had total debt outstanding of $385.4 million, with $30.0 million due in 2031 and the remainder due in 2029[86]. - The Company had $355.4 million in borrowings under the Senior Term Loan Facility as of September 30, 2024, with interest rates ranging from 1.5% to 2.25%[97]. - A hypothetical increase of 100 basis points in interest rates would increase interest expense by approximately $2.0 million annually[99]. Dividends and Shareholder Returns - The company expects to continue its history of paying regular quarterly dividends, with a quarterly dividend of $0.185 per share authorized for payment on December 10, 2024[56][57]. - The Board of Directors authorized a quarterly dividend of $0.185 per share, marking the 299th consecutive quarterly dividend[88]. - A share repurchase program of up to $50.0 million has been authorized, with $48.1 million available for repurchase as of September 30, 2024[89]. Market Performance - Sales increased by $14.8 million in the municipal market due to domestic flood control and wastewater projects, while fire suppression market sales decreased by $16.5 million[72]. - Fire suppression incoming orders for the first nine months of 2024 were up 3.5% compared to the same period in 2023[72]. Other Income and Losses - Other income (expense), net was a loss of $6.7 million for the first nine months of 2024, compared to a loss of $1.4 million in the same period of 2023[78]. - Foreign currency transaction losses for the nine-month period ending September 30, 2023, were ($0.5) million, with no foreign currency gains or losses reported for the same period in 2024[100].