QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2026
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-6747
The Gorman-Rupp Company
(Exact name of registrant as specified in its charter)
Ohio
34-0253990
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
600 South Airport Road, Mansfield, Ohio
44903
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code (419) 755-1011
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Shares, without par value
GRC
New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
On April 27, 2026 there were 26,410,243 common shares, without par value, of The Gorman-Rupp Company outstanding.
Section 302 Principal Executive Officer (PEO) Certification
EX-31.2
Section 302 Principal Financial Officer (PFO) Certification
EX-32
Section 1350 Certifications
1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
THE GORMAN-RUPP COMPANY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31,
(Dollars in thousands, except per share amounts)
2026
2025
Net sales
$
176,593
$
163,948
Cost of products sold
119,234
113,616
Gross profit
57,359
50,332
Selling, general and administrative expenses
26,802
25,107
Amortization expense
3,080
3,100
Operating income
27,477
22,125
Interest expense
(4,967
)
(6,203
)
Other income (expense), net
(258
)
(386
)
Income before income taxes
22,252
15,536
Provision for income taxes
4,412
3,408
Net income
$
17,840
$
12,128
Earnings per share
$
0.68
$
0.46
Average number of shares outstanding
26,339,240
26,246,848
See notes to consolidated financial statements (unaudited).
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended March 31,
(Dollars in thousands)
2026
2025
Net income
$
17,840
$
12,128
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments
(1,182
)
1,548
Cash flow hedging activity
521
(677
)
Pension and postretirement medical liability adjustments
173
217
Other comprehensive income (loss)
(488
)
1,088
Comprehensive income
$
17,352
$
13,216
See notes to consolidated financial statements (unaudited).
2
THE GORMAN-RUPP COMPANY
CONSOLIDATED BALANCE SHEETS
(unaudited)
(Dollars in thousands)
March 31, 2026
December 31, 2025
Assets
Current assets:
Cash and cash equivalents
$
29,855
$
35,083
Accounts receivable, net
102,053
88,378
Inventories, net
95,920
96,457
Prepaid and other
11,334
13,776
Total current assets
239,162
233,694
Property, plant and equipment, net
134,005
134,131
Other assets
21,856
22,192
Other intangible assets, net
208,986
212,066
Goodwill
257,891
257,972
Total assets
$
861,900
$
860,055
Liabilities and equity
Current liabilities:
Accounts payable
$
32,221
$
25,885
Payroll and employee related liabilities
21,719
22,612
Commissions payable
6,461
7,048
Deferred revenue and customer deposits
10,574
7,658
Current portion of long-term debt
—
23,125
Accrued expenses
10,547
12,284
Total current liabilities
81,522
98,612
Pension benefits
4,871
5,149
Postretirement benefits
25,161
24,803
Long-term debt, net of current portion
292,765
284,406
Other long-term liabilities
31,977
32,362
Total liabilities
436,296
445,332
Equity:
Common shares, without par value:
Authorized - 35,000,000 shares;
Outstanding - 26,400,835 shares at March 31, 2026 and 26,312,842 shares at December 31, 2025 (after deducting treasury shares of 647,961 and 735,954, respectively), at stated capital amounts
5,163
5,144
Additional paid-in capital
9,642
11,456
Retained earnings
431,663
418,499
Accumulated other comprehensive (loss)
(20,864
)
(20,376
)
Total equity
425,604
414,723
Total liabilities and equity
$
861,900
$
860,055
See notes to consolidated financial statements (unaudited).
3
THE GORMAN-RUPP COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31,
(Dollars in thousands)
2026
2025
Cash flows from operating activities:
Net income
$
17,840
$
12,128
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
6,993
6,963
LIFO expense
1,316
995
Pension expense
522
696
Stock based compensation
1,177
1,048
Amortization of debt issuance fees
295
295
Other
(436
)
(489
)
Changes in operating assets and liabilities:
Accounts receivable, net
(13,979
)
(5,359
)
Inventories, net
(1,409
)
(231
)
Accounts payable
6,490
2,408
Commissions payable
(536
)
2,471
Deferred revenue and customer deposits
2,930
(1,548
)
Income taxes
4,244
2,608
Accrued expenses and other
(2,921
)
589
Benefit obligations
(539
)
(1,474
)
Net cash provided by operating activities
21,987
21,100
Cash flows from investing activities:
Capital additions
(4,258
)
(3,020
)
Other
127
19
Net cash used for investing activities
(4,131
)
(3,001
)
Cash flows from financing activities:
Cash dividends
(4,999
)
(4,852
)
Treasury share repurchases
(2,649
)
(1,141
)
Payments to banks for borrowings
(15,000
)
(14,625
)
Other
(30
)
(30
)
Net cash used for financing activities
(22,678
)
(20,648
)
Effect of exchange rate changes on cash
(406
)
176
Net increase (decrease) in cash and cash equivalents
(5,228
)
(2,373
)
Cash and cash equivalents:
Beginning of period
35,083
24,213
End of period
$
29,855
$
21,840
See notes to consolidated financial statements (unaudited).
4
THE GORMAN-RUPP COMPANY
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
Three Months Ended March 31, 2026
(Dollars in thousands, except
Common Shares
Additional Paid-In
Retained
Accumulated Other Comprehensive
share and per share amounts)
Shares
Dollars
Capital
Earnings
(Loss) Income
Total
Balances December 31, 2025
26,312,842
$
5,144
$
11,456
$
418,499
$
(20,376
)
$
414,723
Net income
17,840
17,840
Other comprehensive loss
(488
)
(488
)
Stock based compensation, net
128,551
28
677
472
1,177
Treasury share repurchases
(40,558
)
(9
)
(2,491
)
(149
)
(2,649
)
Cash dividends - $0.19 per share
(4,999
)
(4,999
)
Balances March 31, 2026
26,400,835
$
5,163
$
9,642
$
431,663
$
(20,864
)
$
425,604
Three Months Ended March 31, 2025
(Dollars in thousands, except
Common Shares
Additional Paid-In
Retained
Accumulated Other Comprehensive
share and per share amounts)
Shares
Dollars
Capital
Earnings
(Loss) Income
Total
Balances December 31, 2024
26,227,540
$
5,126
$
9,360
$
384,757
$
(25,443
)
$
373,800
Net income
12,128
12,128
Other comprehensive income
1,088
1,088
Stock based compensation, net
96,900
21
671
356
1,048
Treasury share repurchases
(30,063
)
(7
)
(1,024
)
(110
)
(1,141
)
Cash dividends - $0.185 per share
(4,852
)
(4,852
)
Balances March 31, 2025
26,294,377
$
5,140
$
9,007
$
392,279
$
(24,355
)
$
382,071
See notes to consolidated financial statements (unaudited).
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Amounts in tables in thousands of dollars, except for per share amounts)
NOTE 1 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The Consolidated Financial Statements include the accounts of The Gorman-Rupp Company (the “Company” or “Gorman-Rupp”) and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results. In the opinion of management of the Company, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of results that may be expected for the year ending December 31, 2026. For further information, refer to the Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, from which related information herein has been derived.
Accounting Standards Issued But Not Yet Adopted
The FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The standard is intended to enhance the transparency of business expenses in commonly presented expense captions. This amendment requires entities to disclose the following amounts in each relevant income statement expense caption (1) purchases of inventory, (2) employee compensation, (3) depreciation, and (4) intangible asset amortization. Entities are also required to disclose the total amount of selling expense and the entities definition of selling expenses. The standard is effective for annual periods beginning after December 15, 2026. The standard is required to be applied on a prospective basis, while retrospective application is permitted but not required. The Company is evaluating the impact of the standard on the Company's financial disclosures.
NOTE 2 – REVENUE
The following tables disaggregate total net sales by end market and geographic location:
End market
Three Months Ended March 31,
2026
2025
Industrial
$
32,168
$
28,627
Fire
27,429
32,977
Agriculture
26,853
22,461
Construction
27,089
20,810
Municipal
24,953
22,049
Petroleum
5,130
5,477
OEM
12,714
11,044
Repair parts
20,257
20,503
Total net sales
$
176,593
$
163,948
Geographic Location
Three Months Ended March 31,
2026
2025
United States
$
134,331
$
121,994
Foreign countries
42,262
41,954
Total net sales
$
176,593
$
163,948
The Company attributes revenues to individual countries based on the customer location to which finished products are shipped. International sales represented approximately 24% and 26% of total net sales for the first quarter of 2026 and 2025, respectively.
6
On March 31, 2026, the Company had $247.9 million of remaining performance obligations, also referred to as backlog. The Company expects to recognize as revenue substantially all of its remaining performance obligations within one year.
The Company’s contract assets and liabilities as of March 31, 2026 and December 31, 2025 were as follows:
March 31, 2026
December 31, 2025
Contract assets
$
224
$
634
Contract liabilities
10,574
7,658
Revenue recognized for the three months ended March 31, 2026 and 2025 that was included in the contract liabilities balance at the beginning of the period was $3.0 million and $4.4 million, respectively.
NOTE 3 - INVENTORIES
LIFO inventories are stated at the lower of cost or market and all other inventories are stated at the lower of cost or net realizable value. Replacement cost approximates current cost and the excess over LIFO cost was approximately $105.9 million and $104.6 million at March 31, 2026 and December 31, 2025, respectively. Allowances for excess and obsolete inventory totaled $7.2 million and $7.3 million at March 31, 2026 and December 31, 2025, respectively. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimate of expected year-end inventory levels and costs, and are subject to the final year-end LIFO inventory valuation.
Pre-tax LIFO expense was $1.3 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively.
Inventories are comprised of the following:
March 31, 2026
December 31, 2025
Inventories, net:
Raw materials and in-process
$
30,125
$
26,312
Finished parts
48,686
51,719
Finished products
17,109
18,426
Total net inventories
$
95,920
$
96,457
NOTE 4 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net consist of the following:
March 31, 2026
December 31, 2025
Land
$
6,111
$
6,040
Buildings
126,877
125,397
Machinery and equipment
241,385
240,293
$
374,373
$
371,730
Less accumulated depreciation
(240,368
)
(237,599
)
Property, plant and equipment, net
$
134,005
$
134,131
7
NOTE 5 - PRODUCT WARRANTIES
A liability is established for estimated future warranty and service claims based on historical claims experience and specific product failures. The Company expenses warranty costs directly to Cost of products sold. Changes in the Company’s product warranties liability are:
March 31,
2026
2025
Balance of beginning of year
$
2,551
$
2,210
Provision
225
1,089
Claims
(660
)
(875
)
Balance at end of period
$
2,116
$
2,424
NOTE 6 - PENSION AND OTHER POSTRETIREMENT BENEFITS
The Company sponsors a defined benefit pension plan (“GR Plan”) covering certain domestic employees. Benefits are based on each covered employee’s years of service and compensation. The GR Plan is funded in conformity with the funding requirements of applicable U.S. regulations. The GR Plan was closed to new participants effective January 1, 2008. Employees hired after this date, in eligible locations, participate in an enhanced 401(k) plan instead of the defined benefit pension plan. Employees hired prior to this date continue to accrue benefits.
Additionally, the Company sponsors defined contribution pension plans made available to all domestic and Canadian employees. The Company funds the cost of these benefits as incurred.
The Company also sponsors a non-contributory defined benefit postretirement health care plan that provides health benefits to certain domestic and Canadian retirees and eligible spouses and dependent children. The Company funds the cost of these benefits as incurred.
The following tables present the components of net periodic benefit costs:
Pension Benefits
Postretirement Benefits
Three Months Ended March 31,
Three Months Ended March 31,
2026
2025
2026
2025
Service cost
$
474
$
493
$
220
$
202
Interest cost
714
750
327
310
Expected return on plan assets
(879
)
(832
)
—
—
Amortization of prior service cost
—
—
(19
)
(19
)
Recognized actuarial loss (gain)
213
285
13
(8
)
Net periodic benefit cost (a)
$
522
$
696
$
541
$
485
(a)
The components of net periodic cost other than the service cost component are included in Other income (expense), net in the Consolidated Statements of Income.
NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The components of Accumulated other comprehensive income (loss) as reported in the Consolidated Balance Sheets are:
Currency Translation Adjustments
Deferred Gain (Loss) on Cash Flow Hedging
Pension and OPEB Adjustments
Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2025
$
(6,948
)
$
(970
)
$
(14,458
)
$
(20,376
)
Reclassification adjustments
—
125
226
351
Current period benefit (charge)
(1,182
)
562
1
(619
)
Income tax benefit (charge)
—
(166
)
(54
)
(220
)
Balance at March 31, 2026
$
(8,130
)
$
(449
)
$
(14,285
)
$
(20,864
)
8
Currency Translation Adjustments
Deferred Gain (Loss) on Cash Flow Hedging
Pension and OPEB Adjustments
Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2024
$
(12,712
)
$
(103
)
$
(12,628
)
$
(25,443
)
Reclassification adjustments
—
(104
)
277
173
Current period benefit (charge)
1,548
(785
)
8
771
Income tax benefit (charge)
—
212
(68
)
144
Balance at March 31, 2025
$
(11,164
)
$
(780
)
$
(12,411
)
$
(24,355
)
NOTE 8 – COMMON SHARE REPURCHASES
The Company has a share repurchase program with the authorization to purchase up to $50.0 million of the Company’s common shares. As of March 31, 2026, the Company had $48.1 million available for repurchase under the share repurchase program. During the three-month period ending March 31, 2026, the Company repurchased 40,558 shares at an average cost per share of $65.32 for a total of $2.6 million in the surrender of common shares to cover taxes in connection with the vesting of stock awards, which were not part of the share repurchase program. During the three month period ending March 31, 2025, the Company repurchased 30,063 shares at an average cost per share of $37.97 for a total of $1.1 million in the surrender of common shares to cover taxes in connection with the vesting of stock awards, which were not part of the share repurchase program.
NOTE 9 – FINANCING ARRANGEMENTS
Debt consisted of:
March 31, 2026
December 31, 2025
Senior Secured Credit Agreement
$
265,750
$
280,750
Credit Facility
—
—
6.40% Note Agreement
30,000
30,000
Total debt
295,750
310,750
Unamortized discount and debt issuance fees
(2,985
)
(3,219
)
Total debt, net
292,765
307,531
Less: current portion of long-term debt
—
(23,125
)
Total long-term debt, net
$
292,765
$
284,406
The carrying value of long term debt, including the current portion, approximates fair value as the variable interest rates approximate rates available to other market participants with comparable credit risk, and interest rates as of March 31, 2026 were approximately the same as interest rates at the time the fixed rate agreement was executed.
Amended and Restated Senior Secured Credit Agreement
On May 31, 2024, the Company entered into an Amended and Restated Senior Secured Credit Agreement (the “Amended and Restated Senior Credit Agreement”) with several lenders, which amended, extended, and restated the Company’s previous Senior Secured Credit Agreement, dated as of May 31, 2022. The Amended and Restated Senior Credit Agreement provides for a term loan facility in an aggregate principal amount of $370 million (the “Senior Term Loan Facility”), a revolving credit facility in an aggregate principal amount of up to $100 million (the “Credit Facility”), a letter of credit sub-facility in the aggregate available amount of up to $30 million, as a sublimit of the Credit Facility, and a swing line sub-facility in the aggregate available amount of up to $20 million, as a sublimit of the Credit Facility. The obligations of the Company under the Amended and Restated Senior Credit Agreement are secured by a first priority lien on substantially all of its personal property, and guaranteed by certain of the Company’s direct, wholly-owned subsidiaries (the “Guarantors”), which guarantees are secured by a first priority lien in substantially all of the Guarantors’ personal property.
The Amended and Restated Senior Credit Agreement has a maturity date of May 31, 2029, with the Senior Term Loan Facility requiring quarterly installment payments commencing on September 30, 2024 and continuing on the last day of each consecutive December, March, June and September thereafter. The Company has made payments in excess of the required minimum installment payments, which have been applied to future required minimum quarterly installment payments. As a result, the Company does not have any required quarterly installment payments due under the Senior Term Loan Facility within the next 12 months.
9
At the option of the Company, borrowings under the Senior Term Loan Facility and under the Credit Facility bear interest at either a base rate or at an Adjusted Term SOFR Rate (as defined in the Amended and Restated Senor Credit Agreement), plus the applicable margin, which ranges from 0.5% to 1.25% for base rate loans and 1.50% to2.25% for Adjusted Term SOFR Rate loans. The applicable margin is based on the Company’s total leverage ratio. At March 31, 2026, the applicable interest rate under the Amended and Restated Senior Secured Credit Agreement was Adjusted Term SOFR plus 2.0%, or 5.8%.
The Amended and Restated Senior Credit Agreement requires the Company to maintain a consolidated total net leverage ratio not to exceed 3.50 to 1.00 for the four consecutive fiscal quarter periods ending December 31, 2025 and each of the four consecutive fiscal quarter periods ending thereafter.
The Amended and Restated Senior Credit Agreement requires the Company to maintain an interest coverage ratio of not less than 3.00 to 1.00 for any four consecutive fiscal quarter period.
The Amended and Restated Senior Credit Agreement contains customary affirmative and negative covenants, including among others, limitations on the Company and its subsidiaries with respect to the incurrence of liens and indebtedness, dispositions of assets, mergers, transaction with affiliates, and the ability to make or pay dividends in excess of certain thresholds.
The Amended and Restated Senior Credit Agreement also contains customary provisions requiring certain mandatory prepayments, including, among others, prepayments of the net cash proceeds from any non-ordinary course sale of assets, and net cash proceeds of any non-permitted indebtedness.
6.40% Note Agreement
On May 31, 2024, the Company entered into a Note Agreement (the “6.40% Note Agreement”) whereby the Company issued $30.0 million aggregate principal amount of 6.40% senior secured notes (the “6.40% Notes”). The Company’s obligations under the 6.40% Notes are secured by a first priority lien on substantially all of its personal property, and guaranteed by each of the Guarantors, which guarantees are secured by a first priority lien in substantially all of the Guarantors’ personal property. The liens granted under the 6.40% Notes are equal in priority to those granted pursuant to the Amended and Restated Senior Credit Agreement.
The 6.40% Note Agreement has a maturity date of May 31, 2031 and interest is payable semiannually on the last day of May and November in each year.
The 6.40% Note Agreement includes representations, warranties, covenants and events of default, substantially consistent with those contained in the Amended and Restated Senior Credit Agreement.
Other
The Company was in compliance with all debt covenants as of March 31, 2026.
Interest Rate Derivatives
The Company entered into interest rate swaps that hedge interest payments on its SOFR borrowing during the fourth quarter of 2022. All swaps have been designated as cash flow hedges. The following table summarizes the notional amounts, related rates and remaining terms of interest swap agreements as of March 31, 2026 and December 31, 2025:
Notional Amount
Average Fixed Rate
March 31, 2026
December 31, 2025
March 31, 2026
December 31, 2025
Term
Interest rate swaps
$
131,250
$
135,625
4.1
%
4.1
%
Extending to May 2027
The fair value of the Company’s interest rate swaps was a payable of $0.6 million as of March 31, 2026 and a payable of $1.3 million as of December 31, 2025. The fair value was based on inputs other than quoted prices in active markets for identical assets that are observable either directly or indirectly and therefore considered level 2. The mark-to-market effect of interest rate swap agreements that are considered effective as hedges has been included in Accumulated Other Comprehensive Loss. The interest rate swap agreements held by the Company on March 31, 2026 are expected to continue to be effective hedges through the end of their respective terms.
The following table summarizes the fair value of derivative instruments as recorded in the Consolidated Balance Sheets:
10
March 31, 2026
December 31, 2025
Liabilities:
Accrued expenses
$
(504
)
$
(847
)
Other long-term liabilities
(86
)
(430
)
Total derivatives
$
(590
)
$
(1,277
)
The following table summarizes total gains (losses) recognized on derivatives:
Derivatives in Cash Flow Hedging Relationships
Amount of (Loss) Gain Recognized in AOCI on Derivatives
Three Months Ended March 31,
2026
2025
Interest rate swaps
$
562
$
(785
)
The effects of derivative instruments on the Company’s Consolidated Statements of Income are as follows:
Location of (Loss) Gain Reclassed from AOCI into Income (Effective Portion)
Amount of (Loss) Gain Reclassed from AOCI into Income (Effective Portion)
Three Months Ended March 31,
2026
2025
Interest expense
$
(125
)
$
104
Note 10 – BUSINESS SEGMENT INFORMATION
The Company operates in one business segment comprising the design, manufacture and sale of pumps and pump systems. The Company’s products are used in water, wastewater, construction, industrial, petroleum, original equipment, agriculture, fire suppression, heating, ventilation and air conditioning (HVAC), military and other liquid-handling applications.
The pumps and pump systems are marketed in the United States and worldwide through a broad network of distributors, through manufacturers’ representatives (for sales to many original equipment manufacturers), through third-party distributor catalogs, and by direct sales. International sales are made primarily through foreign distributors and representatives.
The Company's chief operating decision maker ("CODM") is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating income and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the allocation of capital between reinvestment in the business, the payment of dividends, paying down debt, and/or acquisitions. The measure of segment assets is reported on the balance sheet as total consolidated assets.
The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2026 and 2025:
11
Three Months Ended March 31,
2026
2025
Net sales
$
176,593
$
163,948
Less:
Cost of Material
81,936
77,428
Labor
22,375
21,142
Overhead
14,923
15,046
Selling
12,773
11,588
General and administrative
14,029
13,519
Amortization expense
3,080
3,100
Operating Income
27,477
22,125
Other income (expense):
Interest expense
(4,967
)
(6,203
)
Other income (expense)
(258
)
(386
)
Income before income taxes
22,252
15,536
Provision from income taxes
4,412
3,408
Net income
$
17,840
$
12,128
The Company sells to approximately 140 countries around the world. The Company attributes revenues to individual countries based on the customer location to which finished products are shipped. The following tables disaggregate total net sales by geographic location:
Geographic Location
Three Months Ended March 31,
2026
2025
United States
$
134,331
$
121,994
Foreign countries
42,262
41,954
Total net sales
$
176,593
$
163,948
12
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except for per share amounts)
The following discussion and analysis of the Company’s financial condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements, and notes thereto, and the other financial data included elsewhere in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with the Company’s audited Consolidated Financial Statements and accompanying notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in its Annual Report on Form 10-K for the year ended December 31, 2025.
Executive Overview
The Gorman-Rupp Company (“we”, “our”, “Gorman-Rupp” or the “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. The Company attributes its success to long-term product quality, applications and performance combined with timely delivery and service, and continually seeks to develop initiatives to improve performance in these key areas.
We regularly invest in training for our employees, in new product development and in modern manufacturing equipment, technology and facilities all designed to increase production efficiency and capacity and drive growth by delivering innovative solutions to our customers. We believe that the diversity of our markets is a major contributor to the generally stable financial growth we have produced historically.
Incoming orders for the first three months of 2026 were $187.5 million, or an increase of 5.5%, compared to the same period in 2025. The Company’s backlog of orders was $247.9 million at March 31, 2026 compared to $217.8 million at March 31, 2025 and $244.0 million at December 31, 2025.
On April 23, 2026, the Board of Directors authorized the payment of a quarterly dividend of $0.19 per share on the common stock of the Company, payable June 10, 2026, to shareholders of record as of May 15, 2026. This will mark the 305th consecutive quarterly dividend paid by The Gorman-Rupp Company.
The Company currently expects to continue its exceptional history of paying regular quarterly dividends and increased annual dividends. However, any future dividends will be reviewed individually and declared by our Board of Directors at its discretion, dependent on our assessment of the Company’s financial condition and business outlook at the applicable time.
Outlook
Demand during the first quarter of 2026 remained broad‑based across most of our end markets with incoming order volumes supporting sales growth and increasing our backlog, which we believe positions us well for the remainder of the year. We also generated strong operating cash flow and reduced debt during the first quarter. As we move forward, we remain focused on disciplined execution, investing appropriately in the business, and delivering long-term profitable growth.
13
Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025
Net Sales
The following table presents the Company’s disaggregated net sales by its end markets:
Three Months Ended March 31,
2026
2025
$ Change
% Change
Industrial
$
32,168
$
28,627
$
3,541
12.4
%
Fire
27,429
32,977
(5,548
)
(16.8
%)
Agriculture
26,853
22,461
4,392
19.6
%
Construction
27,089
20,810
6,279
30.2
%
Municipal
24,953
22,049
2,904
13.2
%
Petroleum
5,130
5,477
(347
)
(6.3
%)
OEM
12,714
11,044
1,670
15.1
%
Repair parts
20,257
20,503
(246
)
(1.2
%)
Total net sales
$
176,593
$
163,948
$
12,645
7.7
%
Net sales for the first quarter of 2026 were $176.6 million compared to net sales of $163.9 million for the first quarter of 2025, an increase of 7.7%, or $12.7 million. The increase was driven by volume growth as well as pricing increases which averaged approximately 3.0% in both 2025 and 2026.
Sales increased in the majority of our markets, including increases of $6.3 million in the construction market due to increased demand in mining and sales of rental equipment, $4.4 million in the agriculture market due to broad based improvement across Fill-Rite's sale channels, $3.5 million in the industrial market due to increased domestic investment, $2.9 million in the municipal market due to increased water and wastewater projects related to infrastructure investment, and $1.7 million in the OEM market due to increased demand related to data centers. These increases were partially offset by a sales decrease of $5.5 million in the fire suppression market primarily due to reduced international shipments. Sales also decreased $0.3 million in the petroleum market and $0.3 million in the repair market.
Cost of Products Sold and Gross Profit
Three Months Ended March 31,
2026
2025
$ Change
% Change
Cost of products sold
$
119,234
$
113,616
$
5,618
4.9
%
% of Net sales
67.5
%
69.3
%
Gross Margin
32.5
%
30.7
%
Gross profit was $57.4 million for the first quarter of 2026, resulting in gross margin of 32.5%, compared to gross profit of $50.3 million and gross margin of 30.7% for the same period in 2025. The 180 basis point increase in gross margin was driven by a 100 basis point improvement in labor and overhead leverage from increased sales and an 80 basis point improvement in cost of material due in part to favorable product mix.
Selling, General and Administrative (SG&A) Expenses
Three Months Ended March 31,
2026
2025
$ Change
% Change
Selling, general and administrative expenses
$
26,802
$
25,107
$
1,695
6.8
%
% of Net sales
15.2
%
15.3
%
Selling, general and administrative (“SG&A”) expenses were $26.8 million and 15.2% of net sales for the first quarter of 2026 compared to $25.1 million and 15.3% of net sales for the same period in 2025. SG&A expenses increased due to higher advertising expenses related to trade show activity as well as increased freight out costs driven by increased sales.
14
Operating Income
Three Months Ended March 31,
2026
2025
$ Change
% Change
Operating Income
$
27,477
$
22,125
$
5,352
24.2
%
% of Net sales
15.6
%
13.5
%
Operating income was $27.5 million for the first quarter of 2026, resulting in an operating margin of 15.6%, compared to operating income of $22.1 million and an operating margin of 13.5% for the same period in 2025. The 210 basis point increase in operating margin was driven by improved leverage on labor, overhead, and SG&A expenses due to increased sales and favorable product mix.
Interest Expense
Three Months Ended March 31,
2026
2025
$ Change
% Change
Interest Expense
$
4,967
$
6,203
$
(1,236
)
(19.9
%)
% of Net sales
2.8
%
3.8
%
Interest expense was $5.0 million for the first quarter of 2026 compared to $6.2 million for the same period in 2025. The decrease in interest expense was due primarily to a decrease in outstanding debt.
Net Income
Three Months Ended March 31,
2026
2025
$ Change
% Change
Income before income taxes
$
22,252
$
15,536
$
6,716
43.2
%
% of Net sales
12.6
%
9.5
%
Income taxes
$
4,412
$
3,408
$
1,004
29.5
%
Effective tax rate
19.8
%
21.9
%
Net income
$
17,840
$
12,128
$
5,712
47.1
%
% of Net sales
10.1
%
7.4
%
Earnings per share
$
0.68
$
0.46
$
0.22
47.8
%
The Company’s effective tax rate was 19.8% for the first quarter of 2026 compared to 21.9% for the first quarter of 2025. The decrease in the effective tax rate was driven by a favorable discrete adjustment recorded during the first quarter of 2026. The Company expects the effective tax rate for the full year 2026 to be between 22.0% and 23.0%.
Net income was $17.8 million, or $0.68 per share, for the first quarter of 2026 compared to net income of $12.1 million, or $0.46 per share, in the first quarter of 2025.
Adjusted EBITDA was $35.5 million and 20.1% of sales for the first quarter of 2026 compared to $29.7 million and 18.1% of sales for the first quarter of 2025.
Non-GAAP Financial Information
15
The discussion of Results of Operations above includes certain non-GAAP financial data and measures such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted earnings before interest, taxes, depreciation and amortization is net income (loss) excluding interest, taxes, depreciation and amortization, adjusted to exclude non-cash LIFO 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 LIFO inventory costing method can cause results to vary substantially from company to company depending upon whether they elect to utilize LIFO and depending upon which LIFO 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 below is a reconciliation of Adjusted EBITDA to its corresponding GAAP financial measure, which includes a description of actual adjustments made in the current period and the corresponding prior period.
Three Months Ended March 31,
2026
2025
Adjusted EBITDA:
Reported net income –GAAP basis
$
17,840
$
12,128
Interest expense
4,967
6,203
Provision for income taxes
4,412
3,408
Depreciation and amortization expense
6,993
6,963
Non-GAAP earnings before interest, taxes, depreciation and amortization
34,212
28,702
Non-cash LIFO expense
1,316
995
Non-GAAP adjusted EBITDA
$
35,528
$
29,697
Liquidity and Capital Resources
Our primary sources of liquidity are cash generated from operations and borrowings under our Credit Facility. Cash and cash equivalents totaled $29.9 million at March 31, 2026. The Company had an additional $99.6 million available under the revolving credit facility after deducting $0.4 million in outstanding letters of credit primarily related to customer orders. We believe we have adequate liquidity from funds on hand and borrowing capacity to execute our financial and operating strategy, as well as comply with financial covenants, for at least the next 12 months. The Company has made payments on the Senior Term Loan Facility in excess of the required minimum installment payments and, as a result, has no required quarterly installment payments due on the Senior Term Loan Facility within the next 12 months.
As of March 31, 2026, the Company had $295.8 million in total debt outstanding with $265.8 million due in 2029 and $30.0 million due in 2031. The Company was in compliance with its debt covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios, at March 31, 2026 and December 31, 2025. See “Note 9 – Financing Arrangements” in the Notes to Consolidated Financial Statements included in this Form 10-Q for a further description of our outstanding debt.
Capital expenditures for the first quarter of 2026 were $4.3 million consisting of machinery and equipment and a building. Capital expenditures for the full-year 2026 are presently planned to be approximately $22.0 - $24.0 million primarily for machinery and equipment, and are expected to be financed through cash from operations.
On April 23, 2026, the Board of Directors authorized the payment of a quarterly dividend of $0.19 per share on the common stock of the Company, payable June 10, 2026, to shareholders of record as of May 15, 2026. This will mark the 305th consecutive quarterly dividend paid by The Gorman-Rupp Company. The Company currently expects to continue its exceptional history of paying regular quarterly dividends and increased annual dividends. However, any future dividends will be reviewed individually and declared by our Board of Directors at its discretion, dependent on our assessment of the Company’s financial condition and business outlook at the applicable time.
The Board of Directors has authorized a share repurchase program of up to $50.0 million of the Company’s common shares. The actual number of shares repurchased will depend on prevailing market conditions, alternative uses of capital and other factors, and will be determined at management’s discretion. The Company is not obligated to make any purchases under the program, and the program may be suspended or discontinued at any time. As of March 31, 2026, the Company had $48.1 million available for repurchase under the share repurchase program.
16
Financial Cash Flow
Three Months Ended March 31,
2026
2025
Beginning of period cash and cash equivalents
$
35,083
$
24,213
Net cash provided by operating activities
21,987
21,100
Net cash used for investing activities
(4,131
)
(3,001
)
Net cash used for financing activities
(22,678
)
(20,648
)
Effect of exchange rate changes on cash
(406
)
176
Net increase (decrease) in cash and cash equivalents
$
(5,228
)
$
(2,373
)
End of period cash and cash equivalents
$
29,855
$
21,840
The increase in cash provided by operating activities in the first three months of 2026 compared to the same period last year was primarily due to increased net income partially offset by increased working capital for the three month period ended March 31, 2026 compared to the same period last year.
During the first three months of 2026, investing activities included $4.3 million of capital expenditures for machinery and equipment and a building. During the first three months of 2025, investing activities of $3.0 million consisted of capital expenditures primarily for machinery and equipment.
Net cash used for financing activities of $22.7 million for the first three months of 2026 primarily consisted of net payments on bank borrowings of $15.0 million, dividend payments of $5.0 million, and $2.6 million of payments in the surrender of common shares to cover taxes upon the vesting of stock awards. Net cash used for financing activities of $20.6 million for the first three months of 2025 primarily consisted of net payments on bank borrowings of $14.6 million, dividend payments of $4.9 million, and $1.1 million of payments in the surrender of common shares to cover taxes upon the vesting of stock awards.
Critical Accounting Policies
Our critical accounting policies are described in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our Consolidated Financial Statements for the year ended December 31, 2025 contained in our Annual Report on Form 10-K for the year ended December 31, 2025. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.
In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, The Gorman-Rupp Company provides the following cautionary statement: This Form 10-Q contains various forward-looking statements based on assumptions concerning The Gorman-Rupp Company’s operations, future results and prospects. These forward-looking statements are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.
Such uncertainties include, but are not limited to, our estimates of future earnings and cash flows, general economic conditions and supply chain conditions and any related impact on costs and availability of materials, retention of supplier and customer relationships and key employees, and the ability to service and repay indebtedness. Other factors include, but are not limited to: company specific risk factors including (1) loss of key personnel; (2) intellectual property security; (3) growth through acquisitions; (4) the Company’s indebtedness and how it may impact the Company’s financial condition and the way it operates its business; (5) impairment in the value of intangible assets, including goodwill; (6) defined benefit pension plan settlement expense; (7) LIFO inventory method; and (8) family ownership of common equity; and general risk factors including (9) continuation of the current and projected future business environment; (10) highly competitive markets; (11) availability and costs of raw materials and labor; (12) cybersecurity threats; (13) artificial intelligence risk and challenges that can impact our business; (14) compliance with, and costs related to, a variety of import and export laws and regulations; (15) the impact of U.S. trade policy, including resulting tariffs; (16) environmental compliance costs and liabilities; (17) exposure to fluctuations in foreign currency exchange rates; (18) conditions in foreign countries in which The Gorman-Rupp Company conducts business; (19) changes in our tax rates and exposure to additional income tax liabilities; and (20) risks described from time to time in our reports filed with the Securities and Exchange Commission. Except to the extent required by law,
17
we do not undertake and specifically decline any obligation to review or update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Exposure to foreign exchange rate risk is due to certain costs and revenue being denominated in currencies other than one of the Company’s subsidiaries functional currency. The Company is also exposed to market risk as the result of changes in interest rates which may affect the cost of financing. We continually monitor these risks and regularly develop appropriate strategies to manage them. Accordingly, from time to time, we may enter into certain derivative or other financial instruments. These financial instruments are used to mitigate market exposure and are not used for trading or speculative purposes.
Interest Rate Risk
The results of operations are exposed to changes in interest rates primarily with respect to borrowings under the Company’s Senior Term Loan Facility and Credit Facility. Borrowings under the Senior Term Loan Facility and Credit Facility may be made either at (i) a base rate plus the applicable margin, which ranges from 0.50% to 1.25%, or at (ii) an Adjusted Term SOFR Rate, plus the applicable margin, which ranges from 1.5% to 2.25%. At March 31, 2026, the Company had $265.8 million in borrowings under the Senior Term Loan Facility and no borrowings under the Credit Facility. As of March 31, 2026, the applicable interest rates under the Senior Secured Credit Agreement were Adjusted Term SOFR plus 2.0%, or 5.8%. See Note 9 “Financing Arrangements” in the notes to our Consolidated Financial Statements.
To reduce the exposure to changes in the market rate of interest, effective October 31, 2022, the Company entered into interest rate swap agreements for a portion of the borrowing under the Senior Term Loan Facility. Terms of the interest rate swap agreements require the Company to receive a fixed interest rate and pay a variable interest rate with respect to the hedged portion of the Senior Term Loan Facility borrowings. The interest rate swap agreements are designated as a cash flow hedge, and as a result, the mark-to-market gains or losses will be deferred and included as a component of accumulated other comprehensive income (loss) and reclassified to interest expense in the period during which the hedged transactions affect earnings. See “Derivative Financial Instruments” and “Interest Rate Derivatives” in the Notes to our Consolidated Financial Statements.
The Company estimates that a hypothetical increase of 100 basis points in interest rates would increase interest expense by approximately $1.3 million on an annual basis.
Foreign Currency Risk
The Company’s foreign currency exchange rate risk is limited primarily to the Euro, Canadian Dollar, South African Rand and British Pound. The Company manages its foreign exchange risk principally through invoicing customers in the same currency as is used in the market of the source of products. The foreign currency transaction gains (losses) for the three month periods ending March 31, 2026 and 2025 were both ($0.1) million, and are reported within Other (expense) income, net on the Consolidated Statements of Income.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. The Company’s disclosure controls and procedures are also designed to ensure that information required to be disclosed in Company reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
An evaluation was carried out under the supervision and with the participation of the Company’s management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q. Based on that evaluation, the principal executive officer and the principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026.
Changes in Internal Control Over Financial Reporting
18
There were no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
19
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material changes from the legal proceedings previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
ITEM 1A. RISK FACTORS
In addition to the information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
On October 29, 2021, the Company announced a share repurchase program of up to $50.0 million of the Company’s common shares. Shares may be repurchased from time to time by the Company through a variety of methods, which may include open-market transactions, pre-set trading plans designed in accordance with Rule 10b5-1, privately negotiated transactions, accelerated share repurchase transactions, or any combination of such methods. The actual number of shares repurchased will depend on prevailing market conditions, alternative uses of capital and other factors, and will be determined at management’s discretion. The Company is not obligated to make any purchases under the program, and the program may be suspended or discontinued at any time. The program does not have an expiration date. As reflected in the table below, the Company made no repurchases of its common shares during the first quarter of 2026.
Period
Total number of shares purchased
Average price paid per share
Total number of shares purchased as part of publicly announced program
Approximate dollar value of shares that may yet be purchased under the program
January 1 to January 31, 2026
—
—
—
$
48,067
February 1 to February 28, 2026
—
—
—
48,067
March 1 to March 31, 2026
—
—
—
48,067
Total
—
—
—
$
48,067
20
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
During the quarter ended March 31, 2026, no director or officer of the Company adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, each as defined in Item 408 of Regulation S-K.
Financial statements from the Quarterly Report on Form 10-Q of The Gorman-Rupp Company for the quarter ended March 31, 2026, formatted in Inline eXtensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity, and (vi) the Notes to Consolidated Financial Statements.
Exhibit 104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
The Gorman-Rupp Company
(Registrant)
Date: April 27, 2026
By:
/s/James C. Kerr
James C. Kerr
Executive Vice President and Chief Financial Officer