Mansfield, Ohio – July 25 , 201 4 – The Gorman - Rupp Company (NYSE MKT: GRC) reports financial results for the second quarter ended June 30 , 201 4 . Net sales during the second quarter of 201 4 increased 3.1 % to $ 1 09.7 million compared to $ 106.4 million during the same period in 201 3 . Domestic sales increased 11.9 % or $ 8.3 million while i nternational sales de creased 13.5 % or $ 5.0 million. Sa les in water end markets increased 1.1% or $0.7 million and s ale s in non - water end markets increased 5.7% or $ 1.8 million during the second quarter . The second quarter increase in water end market sales was largely due to increased sales in the municipal market of $5.1 million driven by large volume pumps related to wastewater and flood control . This increase was partially offset by lower fire protection sales of $3.2 million due to timing of shipments and lower agriculture sales driven by wet weather conditions . Sales increased $1.8 million in non - water markets pri marily due to increased shipments for the OEM market related to power generation equipment and pumps for residential appliances. Net sales for the six months ended June 30, 2014 were a record $ 219.8 million compared to $ 198.9 million during the same perio d in 201 3 , an increase of 10.5 %. Domestic sales increased 16.0 % or $ 20.7 million while international sales were comparable to the same period in 2013. Sales increased $12.7 million in water end markets primarily due to higher sales in the municipal market of $9.4 million driven by large volume pumps related to wastewater, water supply and flood control. In addition, sales in the construction market increased $4.6 million principally for pumps for rental businesses and for oil and gas drilling and fracking within North America. These increases were reduced by lower agriculture sales of $2.1 million in large part driven by wet weather conditions. Sales increased $6.6 million in non - water markets primarily due to increased shipments for the OEM market relat ed to power generation equipment and pumps for military applications and residential appliances. Gross profit was $ 2 6.9 million for the second quarter of 201 4 , resulting in gross margin of 24.5 % compared to 24.9 % in the same period in 201 3 . The de crease in gross margin was principally due to increased cost of material primarily from the purchase of completed components for our previously disclosed Permanent Canal Closure and Pumps (“PCCP”) project driven by timing and capacity constraints , and freight cos t s due mostly to PCCP flood control project specialized shipments. These costs and some additional temporary labor totaled 160 basis points. Operating income was $ 13.4 million , resulting in operating margin of 12.2 % in the second quarter of 201 4 compared to 12.7% in the same period in 201 3 . The gross margin and operating margin for the second quarter of 2013 were reduced by 100 and 150 basis points, respectively, due to a non - cash pension sett lement charge which did not re cur in the second quarter of 20 14. Net income was $ 8.9 million during the second quarter of 201 4 compared to $ 9.2 million in the second quarter of 201 3 and earnings per share were $ 0.3 4 and $0. 35 for the respective periods . E arnings per share for the second quarter of 201 3 included a reduction of $0.04 due to a non - cash pension settlement charge which did not recur in the second quarter of 2014. Gross profit was a record $ 54.5 million in the first six months of 201 4 resulting in gross margin of 24.8 % compared to 24.0% in 20 1 3. Operating income also was a record $ 28.1 million resulting in operating margin of 12.8 % in the first six months of 201 4 compared to 10.9 % in 201 3. T he gross margin and operating margin for the first six months of 2013 w ere reduced by 100 and 1 6 0 basi s points , respectively, due to a non - cash pension sett lement charge which did not re cur in the second quarter of 2014 . Net income for the first six months of 201 4 was a record $ 18.8 million compared to $ 15.0 million in 201 3 and earnings per share were $ 0. 72 and $ 0.57 for the respective periods. Earnings per share for the first six months of 2013 included a reduction of $0.07 due to a non - cash pension settlement charge which did not recur in the first six months of 2014 . T he Company’s backlog of orders was $ 17 3.8 million at June 30 , 201 4 compared to $ 182.2 million at December 31 , 2013. I ncoming orders grew 1 2.6 % during the current quarter compared to the previous quarter reflecting increased activity a cross both o ur water and non - water end markets. T he $ 8 .4 million decrease in backlog is principally due to record shipments during the first six months of 2014. Approximately $5 3.5 million of the PCCP project to supply major flood control pumps to a member of a joint venture construction group for a signific ant New Orleans flood control project remain in the June 30, 2014 backlog total. The pumps for this project are expected to be shipped primarily in the second half of 2014 and first half of 2015. C ash and short - term investments totaled $ 2 9.7 million and s hort - term bank debt was $ 22.7 million at June 30, 2014 . During the second quarter of 2014, $18.0 million was borrowed to fund the acquisition of the assets of Bayou City Pump Company. Working capital rose $0.7 million f rom December 31, 2013 to $1 29.2 mil lion at June 30, 2014. Net capital expenditures for 2014, consisting principally of machinery and equipment and building improvements, are estim ated to be in the range of $12 to $14 million and are expected to be financed thro ugh internally generated fund s. Jeffrey S. Gorman, President and CEO said, “We are pleased with the Company’s performance during the first six months of the year and remain encouraged by the incoming order activity we are seeing across most of the key markets we serve . This activity continued to increase this quarter and helped us achieve a stron g start in 2014 with record first half year revenue and earnings. We also are pleased about the recent acquisition of Bayou City Pump Company and the new niche market opportunities it should provide .” Safe Harbor Statement In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1 995, The Gorman - Rupp Company provides the following cautionary statement: This news release contains various forward - look ing 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 othe rs, 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 factors include, but are not limited to: (1) continuation of the current and projected future business environment, including interest rates and capital and consumer spending; (2) competitive factors and competitor r esponses to initiatives of The Gorman - Rupp Company ; (3) successful development a nd market introductions of anticipated new products; (4) stability of government laws and regulations, including taxes; (5) stable governments and business c onditions in emerging economies; (6) successful penetration of emerging economies; (7) unforeseen d elays or disruptions in the New Orleans flood control project ; and ( 8 ) continuation of the favorable environment to make acquisitions, domestic and foreign, including regulatory requirements and market values of candidates and our ability to successfully i ntegrate and realize the anticipated benefits of completed acquisitions. 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 resul ts of any
revisions to any of such statements to reflect future events or developments or otherwise