The Gorman-Rupp Co. last week reported that net sales during the first quarter ended March 31, decreased 12.1 percent to $71.6 million from $81.4 million during the same period in 2008. Net income during the quarter was $4.5 million, a decrease of 37 percent compared to $7.2 million in 2008. Earnings per share were $0.27 and $0.43, respectively.
The decline in sales resulted from the continuing impact of the global economic downturn and affected most of the markets the company serves. The decline in earnings principally reflects decreased operating leverage on the lower volume of operations and increased pension expense.
The company’s backlog of orders was $91.8 million at March 31, compared to $116.6 million a year ago and $107.8 million at Dec. 31, 2008. These decreases from March 31, 2008 were due to the worldwide recession, which the company began experiencing during the fourth quarter of 2008. The economic uncertainty facing most companies and municipalities has caused some orders to be delayed, deferred or cancelled.
In response to the current economic reality, the company expanded several initiatives during the quarter to help adjust cost structures to current operating levels. Production plans have been realigned to match current demand. The company stopped adding new personnel at all locations and some locations reduced personnel. Also, temporary personnel and overtime were eliminated and compensation reductions have been put in place for salary and hourly workers at locations where appropriate.
Capital expenditures totaling $30.1 million for the previously announced consolidation and expansion of the Mansfield, Ohio, facilities have been incurred as of March 31, of which $6.2 million was incurred in 2009. During the quarter the company borrowed $5.7 million under an unsecured loan agreement to partially finance this construction project, which is expected to be completed by the end of 2009.
“While our financial performance was impacted by the decline in spending in the capital goods sector, we have implemented measures to allow us to remain financially sound during this period of unusual economic uncertainty,” said Jeffrey Gorman, president and CEO. “We remain optimistic that the infusion of Federal stimulus dollars targeted toward water, wastewater and other infrastructure projects will be positive for some of the markets we serve. We are continuing to provide high-quality products with timely deliveries and we remain confident over the longer term.”
The board of directors last week declared a quarterly cash dividend of $0.10 per share on the common stock of the company, payable June 10, to shareholders of record May 15. This marks the 237th consecutive dividend paid by The Gorman-Rupp Co.
Mansfield, Ohio-based Gorman-Rupp Co. was recently recognized again as one of the Top 100 public companies that have displayed the highest corporate integrity by Audit Integrity Inc.
The company designs, manufactures and sells pumps and related equipment for use in water, wastewater, construction, industrial, petroleum and other applications.