Gorman-Rupp Q1 Sales Dip 10 Percent on Decreased Rental Demand
The Gorman-Rupp Co. last week reported net sales for the three months ended March 31, declined 10.1 percent to $92.5 million compared to its all-time record sales of $102.8 million during the same period in 2012.
International sales increased 14.2 percent and $4.5 million in the first quarter, while domestic sales decreased 21.0 percent and $14.9 million. Sales declined $1.1 million during the quarter in the company’s water end markets and $8.2 million in non-water end markets compared to the same period last year. The decrease in water-market sales was primarily because of a reduced construction market demand for pumps from rental businesses compared to the strong first-quarter 2012 sales in anticipation of an improved domestic economy. This decrease was partially offset by an increase in international fire protection market sales. The quarter’s decline in non-water market sales was primarily in the OEM market because of reduced shipments of fabricated products related to power generation equipment, and in the industrial market as a result of reduced demand for pumps for oil and natural gas drilling applications.
Gross profit was $21.2 million for the first quarter 2013 resulting in gross margin of 23.0 percent compared to 25.9 percent in the same period last year. The decline in gross margin was principally because of the favorable product mix within the company’s record first-quarter 2012 sales. The current quarter’s operating income was $8.3 million resulting in operating margin of 8.9 percent compared to 14.8 percent in first quarter 2012.
Net income during the quarter was $5.8 million compared to a record $10.2 million in the first-quarter 2012 and earnings per share were $0.28 and $0.49 for the respective periods.
Encouragingly, the company’s backlog of orders was $145.4 million at March 31, compared to $139.1 million a year ago and $143.4 million at Dec. 31, 2012. The increase in backlog is primarily because of increased orders from the agricultural market due to the beginning of the selling season and from the OEM market related to products for power generation equipment.
“Operating performance was negatively impacted by lower volume compared to the very favorable impacts from our record net sales experienced in the first quarter of 2012,” said Jeffrey Gorman, president and CEO. “We remain encouraged by our agriculture and international sales growth over the last several years. We still see challenging business conditions in some key end markets such as municipal and construction for 2013, but continue to believe that the company has solidly invested to be well positioned for growth over the long term.”
The company expects its backlog to increase in the second quarter of 2013 by approximately $65 million based on a letter of intent to its Patterson Pump subsidiary to supply major flood control pumps to a member of a joint venture construction group for a significant New Orleans flood control project. This three-year project would be the largest single order in the history of the company. On April 17, the U.S. Army Corps of Engineers, New Orleans District, reaffirmed the project award to PCCP Constructors, the joint venture that will contract with Patterson Pump to supply the pumps. A new 10-day protest period was allowed under federal contracting regulations.
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 June 10, to shareholders of record May 15. This marks the 253rd consecutive quarterly dividend paid by the company.
Gorman-Rupp is headquartered in Mansfield, Ohio.
