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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended SEPTEMBER 30, 2002 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 (I.R.S. Employer
incorporation or organization) Identification No.)
305 BOWMAN STREET, P.O. BOX 1217, MANSFIELD, OHIO 44901
------------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 755-1011
--------------
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 X No __
Common shares, without par value, outstanding at September 30, 2002 -- 8,540,553
Page 1 of 15 pages
PART I - FINANCIAL INFORMATION
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands of dollars, except per share data) Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
--------- ---------- -------- --------
INCOME
Net sales $49,139 $51,430 $147,021 $155,939
Other income 406 225 804 601
---------- ---------- ---------- ----------
TOTAL INCOME 49,545 51,655 147,825 156,540
DEDUCTIONS FROM INCOME
Cost of products sold 39,219 39,471 115,307 118,209
Selling, general and
administrative expenses 7,191 6,427 20,933 20,122
---------- ---------- ---------- ----------
TOTAL DEDUCTIONS 46,410 45,898 136,240 138,331
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 3,135 5,757 11,585 18,209
Income taxes 1,230 2,120 4,277 6,970
---------- ---------- ---------- ----------
NET INCOME $1,905 $3,637 $7,308 $11,239
====== ====== ====== ======
Basic And Diluted
Earnings Per Share $0.23 $0.42 $0.86 $1.31
Dividends Paid Per Share $0.16 $0.16 $0.48 $0.48
Average Shares Outstanding 8,540,553 8,551,977 8,538,564 8,560,978
2
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of dollars)
September 30, December 30,
2002 2001
------------- ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $12,024 $20,583
Short-term investments 17 0
Accounts receivable 29,665 28,378
Inventories 36,045 33,889
Other current assets and deferred income taxes 6,445 6,269
---------- ----------
TOTAL CURRENT ASSETS 84,196 89,119
OTHER ASSETS 5,185 2,280
DEFERRED INCOME TAXES 3,352 2,819
PROPERTY, PLANT AND EQUIPMENT 125,730 118,449
Less allowances for depreciation 69,339 64,554
---------- ----------
PROPERTY, PLANT AND EQUIPMENT - NET 56,391 53,895
UNALLOCATED EXCESS PURCHASE PRICE OVER NET
ASSETS OF BUSINESSES ACQUIRED 5,859 0
---------- ----------
TOTAL ASSETS $154,983 $148,113
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $5,771 $5,433
Payrolls and related liabilities 3,695 3,377
Accrued expenses 10,125 8,493
Income taxes 1,701 0
Current Portion of long-term note payable 145 800
---------- ----------
TOTAL CURRENT LIABILITIES 21,437 18,103
LONG TERM NOTE PAYABLE 291 0
POSTRETIREMENT BENEFITS 22,023 22,100
SHAREHOLDERS' EQUITY
Common shares, without par value
at stated capital amount 5,089 5,087
Retained earnings 108,132 104,833
Accumulated other comprehensive income (loss) (1,989) (2,010)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 111,232 107,910
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $154,983 $148,113
========== ==========
Common shares - authorized 14,000,000 14,000,000
* Common shares - outstanding 8,540,553 8,537,553
Common shares - treasury 324,623 327,623
* After deducting treasury shares
3
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended
September 30,
2002 2001
(in thousands of dollars) -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $7,308 $11,239
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,194 5,351
Changes in operating assets and liabilities 4,251 7,071
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 16,753 23,661
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions, net (3,612) (2,336)
Change in short-term investments 998 (2,000)
Payment for acquistions, net of $3,671
cash acquired and related fees (18,150) 0
-------- --------
NET CASH USED FOR INVESTING ACTIVITIES (20,764) (4,336)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (4,098) (4,108)
Purchase of treasury shares 0 (643)
Borrowings from bank 10,000 2,882
Repayments to bank and note holders (10,450) (6,295)
-------- --------
NET CASH USED FOR FINANCING ACTIVITIES (4,548) (8,164)
NET (DECREASE) INCREASE IN CASH -------- --------
AND CASH EQUIVALENTS (8,559) 11,161
CASH AND CASH EQUIVALENTS:
Beginning of year 20,583 7,630
-------- --------
September 30, $12,024 $18,791
======== ========
4
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS(UNAUDITED)
SEPTEMBER 30, 2002
NOTE A - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles 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 generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended September 30, 2002 are not
necessarily indicative of results that may be expected for the year ending
December 31, 2002. For further information, refer to the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2001.
NOTE B - INVENTORIES
The major components of inventories are as follows:
Sept 30 Dec 31
(Thousands of dollars) 2002 2001
-------- --------
Raw materials and in-process $23,638 $22,224
Finished parts 10,317 9,700
Finished products 2,090 1,965
------- -------
$36,045 $33,889
======= =======
NOTE C - COMPREHENSIVE INCOME
During the three month periods ended September 30, 2002 and 2001, total
comprehensive income was $1,488,000 and $3,449,000, respectively. During the
nine month periods ended September 30, 2002 and 2001, total comprehensive income
was $7,329,000 and $11,043,000, respectively. The reconciling item between net
income and comprehensive income consists of foreign currency translation
adjustments.
NOTE D - RECENT ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
No. 141, "Business Combinations," and Statement No. 142, "Goodwill and Other
Intangible Assets," effective for fiscal years beginning after December 15,
2001.("the Statements") Under the Statements, goodwill is no longer amortized
but is subject to annual impairment tests in accordance with the Statements.
Other intangible assets will continue to be amortized over their useful lives.
The Company adopted the rules for accounting for goodwill and other intangible
assets contained in the Statements in the first quarter of 2002. Since the
Company had no goodwill or other intangibles prior to January 1, 2001, there was
no effect on the earnings and financial position of the Company upon adoption.
During 2002, the Company acquired two businesses which will result in
intangibles and goodwill. In the fourth quarter of 2002, the Company will
perform the required annual impairment test for goodwill.
5
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS(UNAUDITED)
SEPTEMBER 30, 2002
NOTE E - ACQUISITIONS
On February 26, 2002, the Company acquired all of the issued and outstanding
stock of American Machine & Tool Co., Inc. ("AMT") for a cash purchase price of
approximately $16.0 million. On March 1, 2002, the Company acquired all of the
issued and outstanding stock of Flo-Pak, Inc. ("Flo-Pak") for a purchase price
of approximately $6.4 million. ($5.5 million in cash and $886,000 in notes) The
acquisitions were financed with cash from the Company's treasury and by a draw
of $10.0 million on an unsecured credit facility established on January 3, 2002.
The Company executed four non-interest bearing notes payable to the former
shareholders of Flo-Pak in the total amount of $886,000. Two of the notes
totaling $450,000 were due and paid in the second quarter of 2002, and the two
remaining notes payable totaling approximately $436,000 are payable in three
annual installments commencing March 1, 2003. The Company subsequently repaid
the $10.0 million unsecured credit facility draw in full with internally
generated funds and cash on hand.
AMT, located in Royersford, Pennsylvania, is a developer and manufacturer of
standard centrifugal pumps principally for industrial and commercial
fluid-handling applications and had revenues of approximately $14.9 million for
the fiscal year ended October 31, 2001. AMT is a subsidiary of the Company.
Flo-Pak, located in Atlanta, Georgia, is a manufacturer of designed pumping
systems for the heating, ventilation, and air-conditioning (HVAC) market and had
revenues of approximately $11.0 million for the year ended December 31, 2001.
Flo-Pak's operations were merged into Patterson Pump Company, a subsidiary of
Gorman-Rupp. The results of operations for the acquired entities are included in
the Registrant's condensed consolidated statement of income beginning on the
date of acquisition. Allocation of the purchase price has not been completed
pending finalization of the third party appraisals regarding goodwill and other
intangibles.
The following unaudited pro forma data summarizes the results of operations for
the periods indicated as if the fiscal 2002 acquisitions had been completed as
of the beginning of the periods presented. The pro forma data shows the effect
on actual operating results prior to the acquisitions. Effects of cost
reductions and operating synergies are not presented. These pro forma amounts
are not indicative of the results that would have actually been achieved if the
acquisitions had occurred at the beginning of the periods presented or that may
be achieved in the future.
Three Months Ended Nine Months Ended
September 30, September 30,
(thousands, except for ------------------- -----------------
per share data) 2002 2001 2002 2001
- ------------------------ ---- ---- ---- ----
TOTAL REVENUE $49,139 $58,219 $150,117 $175,852
NET INCOME 1,905 4,083 6,598 12,714
BASIC AND DILUTED EARNINIGS $0.23 $0.48 $0.77 $1.49
PER COMMON SHARE
6
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THIRD QUARTER 2002 COMPARED TO THIRD QUARTER 2001
Net sales were $49,139,000 in 2002 compared to $51,430,000 in 2001, a reduction
of $2,291,000 or 4.5%. The lower level of sales followed a continuing trend for
manufacturers serving the sluggish capital goods sector. Most notable was a 47%
reduction in shipments of fabricated products for the power generation market
manufactured by Patterson Pump Company, the Company's wholly-owned subsidiary.
The decline was offset by the addition of sales approximating $6,500,000
contributed by the Company's recent acquisitions of AMT and Flo-Pak. The pace of
quoting and incoming orders remained good for pumps and engineered systems in
the municipal and original equipment markets. The current backlog of unfilled
orders is $72,100,000 compared to $88,200,000 last year.
Cost of products sold in 2002 was $39,219,000 compared to $39,471,000 in 2001, a
decrease of 0.6%. As a percentage of sales, cost of products sold was 79.8% in
2002 compared to 76.7% in 2001. The increase in cost of goods sold as a percent
of sales principally resulted from the reduction in manufacturing activity at
all the Company's operating subsidiaries and divisions. Increases in expenses
for employee health care, prescription drugs and property and liability
insurance premiums also contributed to the higher cost of good sold.
Selling, general, and administrative expenses were $7,191,000 in 2002 compared
to $6,427,000 in 2001, an increase of $764,000 or 11.9%. The increase
principally resulted from the inclusion of selling, general, and administrative
expenses from the Company's recent acquisitions, higher employee health care
costs and increases in property and liability insurance premiums, reduced by
benefits from cost control programs.
Income before income taxes was $3,135,000 in 2002 compared to $5,757,000 in
2001, a decrease of $2,622,000 or 45.5%. Reduced sales along with increased
operating costs principally accounted for the decrease in income before income
taxes. The effective tax rate was 39.2% in 2002 compared to 36.8% in 2001. The
lower effective rate in 2001 included the benefit of an investment tax credit.
Net income was $1,905,000 in 2002 compared to $3,637,000 in 2001, a decrease of
$1,732,000 or 47.6%. As a percent of sales, net income was 3.9% in 2002 compared
to 7.1% in 2001. Earnings per share were $0.23 in 2002 compared to $0.42 in
2001, a reduction of $0.19 per share.
NINE MONTHS 2002 VS. NINE MONTHS 2001
Net sales were $147,021,000 in 2002, compared to $155,939,000 in 2001, a
reduction of $8,918,000 or 5.7%. The decrease reflects a continuing trend for
manufacturers serving the sluggish capital goods sector and reduced orders at
Patterson Pump Company arising out of weakness in the power generation business
from G.E. Power Systems. The recent acquisitions of AMT and Flo-Pak contributed
$14,272,000 in net sales for the nine months.
Cost of products sold in 2002 was $115,307,000 compared to $118,209,000 in 2001,
a decrease of 2.5%. As a percentage of net sales, the cost of products sold was
78.4% in 2002 compared to 75.8% in 2001. Decreased manufacturing production
activity during the nine months resulted in decreased absorption of fixed costs
that accounted for a majority of the increase in cost of product sold as a
percent of sales. Increased property and liability and health insurance costs
were more than offset by reductions in controllable expenses.
7
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Selling, general, and administrative expenses were $20,933,000 in 2002 compared
to $20,122,000 in 2001, an increase of $811,000 or 4.0%. These expenses in 2002
included seven months of expense arising out of the Company's recent
acquisitions of AMT and Flo-Pak, which totaled $2,317,000. Continued emphasis on
cost containment helped in controlling selling, general and administrative
expenses in all subsidiaries and divisions.
Income before income taxes was $11,585,000 in 2002 compared to $18,209,000 in
2001, a decrease of $6,624,000 or 36.4%. Reduced sales along with a higher cost
of sales percentage contributed to the decline. Tax expense decreased to
$4,277,000 from $6,970,000 in 2001. The effective tax rate was 36.9% in 2002
compared to 38.3% in 2001. The lower effective tax rate was primarily the result
of the benefit from non-recurring investment tax credits in the second quarter.
Net Income was $7,308,000 in 2002 compared to $11,239,000 in 2001, a decrease of
$3,931,000 or 35.0%. As a percent of net sales, net income was 5.0% in 2002 and
7.2% in 2001. Earnings per share were $.86 in 2002, a decrease of $.45 from the
$1.31 in 2001.
Inventories and accounts receivable increased from year end 2001 levels
principally due to the recent acquisitions of AMT and Flo-Pak.
On February 26, 2002, the Company acquired all of the issued and outstanding
stock of American Machine & Tool Co., Inc. ("AMT") for a cash purchase price of
approximately $16.0 million. On March 1, 2002, the Company acquired all of the
issued and outstanding stock of Flo-Pak, Inc. ("Flo-Pak") for a purchase price
of approximately $6.4 million. ($5.5 million in cash and $886,000 in notes) The
acquisitions were financed with cash from the Company's treasury and by a draw
of $10.0 million on an unsecured credit facility established on January 3, 2002.
The Company executed four non-interest bearing notes payable to the former
shareholders of Flo-Pak in the amount of $886,000. Two of the notes totaling
$450,000 were due and paid in the second quarter of 2002, and the two remaining
notes payable totaling approximately $436,000 are due in three annual
installments commencing March 1, 2003. The Company repaid the acquisition
borrowings with internally generated funds and cash on hand.
The Company expects increased sales of AMT products to be achieved through the
Company's existing outlets to domestic and international markets formerly not
available to AMT. AMT's current primary sales channel is to large-scale
distributors of industrial supplies sold through third-party distributor
catalogs. In the future, the Company has the opportunity to market some of its
pumps through these catalogs that it has had minimal exposure to in the past.
Many of the small "off the shelf" pumps represent commodity type products that
the Company does not currently manufacture. A significant portion of AMT's sales
is through a catalog house under the "TEEL(R)" brand, a registered trademark of
W.W. Grainger, Inc., which has leading recognition in the market place. This
will offer the Company an opportunity to gain increased market exposure.
The acquisition of Flo-Pak provided the Company an opportunity to diversify its
product line and enter a market without incurring the cost or time to perform
necessary research and development activities to enter the market. The Company's
distribution network and market strength offers growth opportunities to Flo-Pak,
eliminating the need for additional capital investment to gain market share.
8
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND SOURCES OF CAPITAL
The Company continues to finance most of its capital expenditures and working
capital requirements through internally generated funds and bank financing. The
ratio of current assets to current liabilities was 3.9 to 1 at September 30,
2002 and 4.9 to 1 at December 31, 2001.
The Company presently has adequate working capital and borrowing capacity and a
strong liquidity position.
NEW ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
No. 141, "Business Combinations," and Statement No. 142, "Goodwill and Other
Intangible Assets," effective for fiscal years beginning after December 15,
2001.("the Statements") Under the Statements, goodwill is no longer amortized
but is subject to annual impairment tests in accordance with the Statements.
Other intangible assets will continue to be amortized over their useful lives.
The Company adopted the rules for accounting for goodwill and other intangible
assets contained in the Statements in the first quarter of 2002. Since the
Company had no goodwill or other intangibles prior to January 1, 2001, there was
no effect on the earnings and financial position of the Company upon adoption.
During 2002, the Company acquired two businesses which will result in
intangibles and goodwill. In the fourth quarter of 2002, the Company will
perform the required annual impairment test for goodwill.
CONTROLS AND PROCEDURES
As of September 30, 2002, an evaluation was performed under the supervision and
with the participation of the Company's management, including the Principal
Executive Officer and Principal Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Company's management, including the Principal Executive
Officer and Principal Financial Officer, concluded that the Company's disclosure
controls and procedures were effective as of September 30, 2002. There have been
no significant changes in the Company's internal controls, or in other factors
that could significantly affect those internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses, subsequent to September 30, 2002.
9
PART II - OTHER INFORMATION
THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
Item 6. EXHIBITS AND REPORT ON FORM 8-K
(a) Exhibits
Exhibit 99 Certification Pursuant to 18 U.S.C Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports filed on Form 8-K during the Quarter ended September 30, 2002
Pursuant to item 9, the Company filed a report on Form 8-K dated August 14, 2002
to announce the filing of certifications by the Company's Principal Executive
Officer and Principal Financial Officer in accordance with Section 906 of the
Sarbanes-Oxley Act of 2002.
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: NOVEMBER 6, 2002
By: /s/JUDITH L. SOVINE
---------------------------
Judith L. Sovine
Corporate Treasurer
By: /s/ROBERT E. KIRKENDALL
---------------------------
Robert E. Kirkendall
Senior Vice President
(Principal Financial and
Accounting Officer)
10
CERTIFICATIONS
I, Jeffrey S. Gorman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of The
Gorman-Rupp Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures(as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report(the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
11
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: NOVEMBER 6, 2002 /s/JEFFREY S. GORMAN
---------------------
Jeffrey S. Gorman
President and Chief Executive Officer
The Gorman-Rupp Company
(Principal Executive Officer)
12
CERTIFICATIONS
I, Robert E. Kirkendall, certify that:
1. I have reviewed this quarterly report on Form 10-Q of The
Gorman-Rupp Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures(as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report(the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
13
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: NOVEMBER 6, 2002 /s/ROBERT E. KIRKENDALL
---------------------------
Robert E. Kirkendall
Senior Vice President
The Gorman-Rupp Company
(Principal Financial Officer)
14