Business Context and Reporting Period
Company: The Gorman-Rupp Company (Gorman-Rupp)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2003
Business Overview: Gorman-Rupp designs, manufactures, and sells pumps and related fluid control equipment for water, wastewater, construction, industrial, agricultural, and HVAC applications. The company operates principally in one business segment. Key subsidiaries include Patterson Pump Company, American Machine and Tool Co. (AMT), and Flo-Pak, Inc.
Key Financial Metrics
The following data is presented in thousands ($000 omitted) based on the segment information provided in Item 1.
| Metric | 2003 | 2002 | 2001 |
|---|---|---|---|
| Net Sales | $195,826 | $195,081 | $203,169 |
| Income Before Income Taxes | $14,400 | $14,203 | $23,035 |
| Identifiable Assets | $160,939 | $152,846 | $148,113 |
Backlog: As of December 31, 2003, the backlog of unfilled orders was approximately $58,359,000 (down from $70,185,000 in 2002). Approximately 98% is scheduled for shipment in 2004.
International Sales: Approximately 18% of 2003 sales were made to customers outside the United States.
Debt and Liquidity: The filing text does not provide specific values for total debt, cash flow, or liquidity ratios; these are incorporated by reference from the Annual Report to Shareholders.
Material Changes vs. Prior Period
- Revenue: Net sales increased slightly by approximately 0.4% from 2002 to 2003 ($195.8M vs. $195.1M).
- Profitability: Income before income taxes increased marginally by approximately 1.4% ($14.4M vs. $14.2M).
- Backlog: The order backlog decreased by approximately 16.8% year-over-year, dropping from $70.2M to $58.4M.
- Operations: Manufacturing operations at the Sand Springs, Oklahoma facility were relocated to the Mansfield, Ohio division in 2003.
- Customer Concentration: In 2003, no single customer accounted for more than 10% of total net sales, a reduction from 2002 (11.6%) and 2001 (16.7%).
Outlook, Risks, and Management Commentary
Management Commentary: The company continues to emphasize product development and international market penetration. Management considers labor relations satisfactory with no collective bargaining agreements or strikes.
Risks and Contingencies:
- Asbestos Litigation: The company and three subsidiaries are defendants in mass-scaled lawsuits regarding alleged asbestos use. Management believes these proceedings will not materially impact results of operations, liquidity, or financial condition.
- Competition: The pump industry is highly competitive with approximately 80 other companies. Competition is based on application, performance, and service.
- Market Risk: The company states it has no material market risk exposures required to be reported, and foreign operations do not involve material risks due to their small size.
Guidance: Specific forward-looking financial guidance is not provided in the text of this filing; it is incorporated by reference from the Annual Report to Shareholders.
Investor Verification Checklist
- Verify the full consolidated financial statements (Balance Sheet, Cash Flow, Income Statement) in the 2003 Annual Report to Shareholders, as specific debt, cash, and margin figures are not detailed in this 10-K text.
- Review the "Management's Discussion and Analysis" section in the Annual Report for detailed explanations of the slight revenue increase and the significant drop in order backlog.
- Confirm the status of asbestos litigation claims and insurance coverage details in the full financial notes.
- Check the stock price performance and dividend history referenced in the "Market for Registrant's Common Equity" section of the Annual Report.