The Gorman-Rupp pany(GRC) - 2024 Q4 - Annual Report

Financial Performance - Net sales for 2024 were $659.7 million, a slight increase of 0.1% or $0.2 million from $659.5 million in 2023[103] - Gross profit for 2024 was $204.3 million, with a gross margin of 31.0%, up from $196.3 million and 29.8% in 2023[105] - Operating income increased by 5.1% to $91.4 million in 2024, resulting in an operating margin of 13.9%[108] - Net income for 2024 was $40.1 million, or $1.53 per share, compared to $35.0 million, or $1.34 per share, in 2023, representing a 14.8% increase[111] - Reported net income for 2024 was $40.1 million, an increase of 15.8% from $34.9 million in 2023 and a significant rise from $11.2 million in 2022[115] - Non-GAAP adjusted earnings for 2024 reached $46.0 million, up 28.3% from $35.8 million in 2023 and 87.5% from $24.5 million in 2022[115] - Adjusted earnings per share for 2024 was $1.75, a 27.7% increase from $1.37 in 2023 and a 86.2% increase from $0.94 in 2022[115] Orders and Backlog - The Gorman-Rupp Company's backlog of orders decreased by 5.6% to $206.0 million as of December 31, 2024, compared to $218.1 million in 2023[97] - Incoming orders for the year ending December 31, 2024, increased by 6.8% to $659.3 million compared to 2023[98] Expenses and Cash Flow - Interest expense decreased by 18.5% to $33.6 million in 2024, down from $41.3 million in 2023 due to debt refinancing[109] - Net cash provided by operating activities in 2024 was $69.8 million, a decrease from $98.2 million in 2023[121] - Rental expenses for operating and financing leases were $3.6 million in 2024, up from $2.8 million in 2023[128] Debt and Capital Management - The company had $340.8 million in debt outstanding due in 2029 and $30.0 million due in 2031, remaining compliant with debt covenants[118] - The Company had $340.8 million in borrowings under the Senior Term Loan Facility as of December 31, 2024[155] - The Board of Directors has authorized a share repurchase program of up to $50.0 million, with approximately $48.1 million remaining to be repurchased[127] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.185 per share, marking the 300th consecutive quarterly dividend payment[99] Pension and Employee Benefits - The company plans to contribute $2.9 million to its defined benefit pension plan in 2025, following a contribution of $5.1 million in 2024[120] - The discount rates used to value pension plan obligations were 5.3% at December 31, 2024, compared to 4.7% at December 31, 2023[138] - The expected rate of return on pension assets was 7.2% for 2024 and 6.2% for 2023[138] Goodwill and Assets - Goodwill relating to the National reporting unit is $13.6 million, or 1.6% of the Company's total assets as of December 31, 2024[147] - Goodwill relating to the Fill-Rite reporting unit is $230.7 million, or 26.9% of the Company's total assets as of December 31, 2024[147] Inventory and Contract Estimates - The Company uses the last-in, first-out (LIFO) method for the majority of its inventories[136] - The Company estimates profit on long-term contracts based on total estimated revenue and expected costs to complete[134] - The Company regularly reviews and updates its contract-related estimates to reflect significant changes[135] Market Conditions and Future Outlook - The company remains focused on benefiting from infrastructure spending and strong demand for flood control and storm water management[101] - A hypothetical increase of 100 basis points in interest rates would increase interest expense by approximately $1.9 million annually[157] - Foreign currency transaction losses for 2024 and 2023 were $(0.4) million each, while gains for 2022 were $0.2 million[158]