Other income (expense), net was $6.6 million of expense for the first six months of 2024 compared to
$1.0 million of expense for the same period in 2023. Other expense for the first six months of 2024 included a $4.4 million write-off of unamortized previously deferred debt financing fees and a
$1.8 million prepayment fee related to the early retirement of the unsecured Subordinated Credit Facility.
Net income was $16.2 million, or
$0.62 per share, for the first six months of 2024 compared to net income of $17.0 million, or $0.65 per share, for the first six months of 2023. Adjusted earnings per share1 for the
first six months of 2024 were $0.84 per share compared to $0.68 per share for the first six months of 2023.
Adjusted EBITDA1 was $63.6 million and 19.4% of net sales for the first six months of 2024 compared to $62.1 million and 18.7% of net sales for the first six months of 2023.
The Company’s backlog of orders was $224.4 million at June 30, 2024 compared to $249.8 million at June 30, 2023 and
$218.1 million at December 31, 2023. Incoming orders for the first six months of 2024 were $341.4 million, or an increase of 6.3% compared to the same period in 2023.
Net cash provided by operating activities for the first six months of 2024 was $33.4 million compared to $37.9 million for the same period in 2023
with the decrease driven by working capital needs. Capital expenditures for the first six months of 2024 were $7.1 million and consisted primarily of machinery and equipment. Capital expenditures for the full-year 2024 are presently
planned to be approximately $20.0 million. Total debt, net of cash, decreased $17.5 million during the first six months of 2024.
Scott A.
King, President and CEO commented, “Incoming orders have continued at a solid pace and on a year-to-date basis are up over 6% compared to the first half of last
year, resulting in an increase in backlog since the end of 2023. In addition, our pricing strategies contributed to improved gross margin and increased adjusted earnings. We are focused on top line growth through backlog reduction in the
second half of the year, as well as delivering strong gross margin and earnings. We are also pleased that our previously announced refinancing is expected to result in significant interest savings going forward.”
About The Gorman-Rupp Company
Founded in 1933, The Gorman-Rupp
Company is a leading designer, manufacturer and international marketer of pumps and pump systems for use in diverse water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire suppression, heating,
ventilating and air conditioning (HVAC), military and other liquid-handling applications.
(1) Non-GAAP
Information
This release includes certain non-GAAP financial data and measures such as adjusted earnings, adjusted
earnings per share, and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted earnings is earnings excluding amortization of customer backlog,
write-off of unamortized previously deferred debt financing fees, and refinancing costs. Adjusted earnings per share is earnings per share excluding amortization of customer backlog per share, write-off of unamortized previously deferred debt financing fees per share, and refinancing costs per share. Adjusted earnings before interest, taxes, depreciation and amortization is net income (loss) excluding
interest, taxes, depreciation and amortization, adjusted to exclude amortization of customer backlog, write-off of unamortized previously deferred debt financing fees, refinancing costs, and non-cash LIFO2 expense. Management utilizes these adjusted financial data and measures to assess comparative operations against those of prior periods without the
distortion of non-comparable factors. The inclusion of these adjusted measures should not be construed as an indication that the Company’s future results will be unaffected by unusual or infrequent items
or that the items for which the Company has made adjustments are unusual or infrequent or will not recur. Further, the impact of the LIFO2 inventory costing method can cause results to vary
substantially from company to company depending upon whether they elect to utilize LIFO2 and depending upon which method they may elect. The Gorman-Rupp Company believes that these non-GAAP financial data and measures also will be useful to investors in assessing the strength of the Company’s underlying operations and liquidity from period to period. These
non-GAAP financial measures are not intended to replace GAAP financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. Provided later in
this release is a reconciliation of adjusted earnings, adjusted earnings per share, and adjusted EBITDA to their respective corresponding GAAP financial measures, which includes descriptions of actual adjustments made in the current period and the
corresponding prior period.
(2) LIFO Inventory Method
The
majority of the Company’s inventories are valued on the last-in, first-out (LIFO) method and stated at the lower of cost or market. Current cost approximates
replacement cost, or market, and LIFO cost is determined at the end of each fiscal year based on inventory levels on-hand at current replacement cost and a LIFO reserve. The Company uses the simplified LIFO
method, under which the LIFO reserve is determined utilizing the inflation factor specified in the Producer Price Index for Machinery and Equipment – Pumps, Compressors and Equipment, as published by the U.S. Bureau of Labor
Statistics. Interim LIFO calculations are based on management’s estimate of the expected year-end inflation index and, as such, are subject to adjustment each quarter. When inflation increases, the
LIFO reserve and non-cash expense increase.