The Gorman-Rupp Co. today reported net sales during the second-quarter 2012 were $92.6 million compared to $92.2 million during the same period in 2011. Net income was $7.6 million compared to $8.9 million in the second quarter 2011, a 14.6-percent decrease. Earnings per share were $0.36 and $0.42 for the respective periods, a 14.3-percent decrease.
Net sales for the six months ended June 30 increased 10.9 percent to $195.4 million compared to $176.2 million during the same period in 2011. Net income increased 11.3 percent to $17.8 million compared to $16.0 in the first six months of 2011. Earnings per share were $0.85 and $0.76 for the respective periods.
Sales were flat in the quarter compared to the second quarter 2011 and less than the record first quarter 2012. Strong sales increases occurred in the agricultural and fire protection markets and sales also rose in the petroleum and OEM markets. However, these increases were largely offset by decreased sales in the municipal market primarily because of decreased shipments of pumps supplied for domestic flood control projects and municipal funding constraints affecting sales of sewage pumps and systems, as well as reduced demand for pumps for natural gas drilling applications and from rental businesses.
International sales grew 38.0 percent in the second quarter compared to the same period last year, while domestic sales decreased 15.8 percent largely due to the decline in municipal market sales.
“Although our first-half results included all-time record sales and earnings for the company, we were impacted by declining orders in our major capital goods-affected markets during the second quarter,” said Jeffrey Gorman, president and CEO. “Many domestic and global economic challenges continue and consumer, municipal and overall business confidence are not yet fully recovered. As with current trends in other major capital goods markets, incoming orders are expected to remain moderate over the next few quarters compared to last year’s record pace.”
The decrease in earnings for the quarter was principally driven by a less favorable product mix and increased healthcare expense of $0.02 per share.
The company’s backlog of orders was $133.7 million on June 30, compared to $154.2 million a year ago and $155.5 million at Dec. 31, 2011. The decrease from June 30, 2011 and December 31, 2011 was primarily because of record shipments during the first six months of 2012 combined with lower incoming orders for the construction and municipal markets.
In other news, the company announced the formation of Gorman-Rupp Africa Proprietary Ltd. as a wholly owned operating subsidiary headquartered in Johannesburg, Republic of South Africa. G-R Africa will primarily focus on the planned expansion of international sales throughout Sub-Sahara Africa and the extension of the company’s existing sales operations based in South Africa. The addition of G-R Africa will complement the company’s existing international operations centers in Europe and Asia.
“This expansion in Africa demonstrates another step in our long-standing focus on international growth. Africa is an increasingly rapid-developing continent that continues to benefit from positive internal governmental reforms that are starting to strengthen its various economies. As a result, the urbanization rate is increasing in many areas of the continent but it still generally remains highly underdeveloped and lacks needed water, wastewater, agriculture and construction infrastructure, all of which are proven core markets for The Gorman-Rupp Company’s products,” Gorman said.
The board of directors of The Gorman-Rupp Co. declared a quarterly cash dividend of $0.10 per share on the common stock of the company, payable Sept. 10, to shareholders of record Aug. 15. This marks the 250th consecutive quarterly dividend paid by The Gorman-Rupp Co.