Business Context and Reporting Period
Company: The Gorman-Rupp Company
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 1994
Business Overview: The Company designs, manufactures, and sells pumps and fluid control equipment for construction, industrial, petroleum, agricultural, water/wastewater, and military applications. It operates principally in one business segment.
Key Financial Metrics
The following data is presented in thousands ($000 omitted) based on the segment information provided in Item 1:
| Metric | 1994 | 1993 | 1992 |
|---|---|---|---|
| Net Sales | $137,508 | $131,535 | $126,019 |
| Income Before Income Taxes | $14,952 | $13,858 | $12,659 |
| Identifiable Assets | $107,100 | $98,706 | $86,434 |
Other Financial Data:
- Backlog (Dec 31, 1994): Approximately $56,653,000 (up from $54,255,000 in 1993).
- Market Value of Voting Stock (Non-affiliates): $71,111,024 (as of Feb 28, 1995).
- Shares Outstanding: 8,572,871 (as of Feb 28, 1995).
Note: Specific figures for net income, cash flow, debt, and liquidity ratios are incorporated by reference to the 1994 Annual Report to Shareholders and are not explicitly detailed in the provided text.
Material Changes vs. Prior Period
- Sales Growth: Net sales increased by approximately 4.5% from 1993 to 1994 ($131.5M to $137.5M).
- Profitability: Income before income taxes increased by approximately 7.9% from 1993 to 1994 ($13.9M to $15.0M).
- Asset Base: Identifiable assets grew by approximately 8.5% year-over-year.
- Backlog: Unfilled orders increased by approximately 4.4% compared to the prior year-end.
- Facility Expansion: In 1994, the Company added approximately 37,600 square feet to its Mansfield, Ohio production plant, including a modern test facility.
Outlook, Risks, and Management Commentary
Management Commentary & Strategy:
- The Company continues to emphasize product development and penetration of international markets.
- Competition is high, with an estimated 80 other companies selling comparable pumps; the Company competes on application, performance, and service.
- No new significant products were introduced in 1994, but existing products were expanded to various applications.
Risks and Contingencies:
- Customer Concentration: Shipments to two customers accounted for approximately 15% of total sales in 1994. The single largest customer, General Electric Company, accounted for slightly less than 13% of sales.
- Export Exposure: Approximately 13% of sales were made to customers outside North America.
- Legal: The Company is not currently engaged in any material litigation.
- Supply Chain: The Company is not dependent on a single source for material supplies, though motor components for large submersible pumps are sourced from a limited number of suppliers.
Investor Verification Checklist
- Full Financial Statements: Verify net income, cash flow from operations, and debt levels in the 1994 Annual Report to Shareholders (incorporated by reference).
- Customer Concentration: Assess the risk associated with General Electric Company representing nearly 13% of total revenue.
- Backlog Realization: Confirm the conversion of the $56.6M backlog into revenue during 1995, noting that $55.6M is scheduled for shipment in 1995.
- Capital Expenditures: Review the impact of the 1994 facility expansion (37,600 sq. ft.) on future depreciation and cash flow.
- International Exposure: Evaluate the impact of foreign exchange rates on the 13% of sales generated outside North America.