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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994 Commission file number 1-6747
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THE GORMAN-RUPP COMPANY
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(Exact name of Registrant as specified in its charter)
Ohio 34-0253990
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
305 Bowman St., Mansfield, Ohio 44903
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 755-1011
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on which registered
Common Shares, without par value American Stock Exchange
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
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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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in the definitive proxy statement incorporated
by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
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State the aggregate market value of the voting stock held by non-affiliates of
the Registrant. The aggregate market value is computed by reference to the
price at which the stock was sold as of February 28, 1995. $71,111,024
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Indicate the number of shares outstanding of each of the Registrant's classes
of common stock as of February 28, 1995.
Common Shares, without par value--8,572,871
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1994 Annual Report to Shareholders incorporated by reference
into Part II (Item 5-8).
Portions of Notice of 1995 Annual Meeting of Shareholders and related Proxy
Statement incorporated by reference into Part III (Items 10-13).
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The Exhibit Index is located at Page 13
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PART I
ITEM 1. BUSINESS
Registrant ("Gorman-Rupp" or the "Company") designs, manufactures and sells
pumps and related equipment (pump and motor controls) for use in construction,
industrial, petroleum, agricultural, water and wastewater, original equipment,
fire, military and other liquid-handling applications.
PRODUCTS
The principal products of the Company are pumps and fluid control products.
(The Company operates principally in one business segment, the manufacture and
sale of pumps and other fluid control equipment.) The following table sets
forth, for the years 1992 through 1994, the total net sales, income before
income taxes and identifiable assets ($000 omitted) of the Company.
1994 1993 1992
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Net Sales $137,508 $131,535 $126,019
Income Before Income Taxes 14,952 13,858 12,659
Identifiable Assets 107,100 98,706 86,434
The Company's product line is composed of pump models ranging in rated capacity
from less than one gallon per minute up to 200,000 gallons per minute. The
types of pumps which the Company produces include self priming centrifugal,
standard centrifugal, magnetic drive centrifugal, rotary gear, diaphragm,
bellows and oscillating.
The pumps have drives that range from 1/35 horsepower electric motors up to
much larger electric motors or internal combustion engines. Many of the
larger units comprise encased, fully integrated sewage pumping stations. In
certain cases, units are designed for the inclusion of customer-supplied
drives.
The Company's larger pumps are sold principally for use in the construction,
industrial, sewage and waste handling fields; for pumping refined petroleum
products, including the ground refueling of aircraft; for agricultural
applications; and for fire fighting.
Many of the Company's smallest pumps are sold to customers for incorporation
into such products as X-ray processing equipment; gas air conditioning
equipment; office copy machines; chemical feeding, instrumentation and ice cube
making machinery; photographic processing and soft drink dispensing equipment;
laser cooling applications; graphic arts equipment; and floor cleaning
equipment.
Although principally a pump manufacturer, the Company, for a number of years,
also produced electric motors for sale to others and for use in its submersible
and smaller capacity pumps. In August 1992, the Company sold its electric
motor division (Durham Products) to concentrate on its primary business of
manufacturing pumps. The sale of the electric motor division did not have a
significant effect on 1992 sales or on the operations of the Company.
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PART I--CONTINUED
ITEM 1. BUSINESS--CONTINUED
In 1992 the Company introduced a positive displacement rotary gear pump line
designed for pumping viscous liquids such as paint, tar and glue, as well as
solvents and chemicals of lower viscosity. The product line was marketed
widely beginning in 1993.
An "Auto-Start" pump allowing for unattended operation, pumping units featuring
two or more pumps and motors, and pump and motor controls for industrial and
residential wastewater applications were also introduced in 1992.
The Company expanded its metering pump lines in 1992 with the introduction of
additional mini and mini-compact bellows metering pumps. A smaller version,
the micro-metering pump, was developed primarily for the photographic
processing market.
Although no new significant products were introduced in 1994 or 1993, the
Company continued to emphasize product development. Several of the Company's
existing products, which have been designed with added features, have been
expanded to various applications. The Company continued to penetrate
international markets principally by its aggressive response to worldwide pump
needs.
MARKETING
Except for government, component and export sales, the Company's pumps are
marketed in the United States and Canada through a network of about 1,000
distributors, through manufacturers' representatives (for sales to many
original equipment manufacturers) and by the Company's wholly owned subsidiary,
Gorman-Rupp of Canada Limited. Government and component sales are handled
directly by the Company; and export sales are made through the Company's wholly
owned subsidiary, The Gorman-Rupp International Company, as well as through
foreign distributors and representatives. During 1994, shipments to two
customers accounted for approximately 15% of total sales. The single largest
customer, General Electric Company, accounted for slightly less than 13% of the
Company's 1994 sales, and approximately 13% of all sales were made to customers
outside North America.
COMPETITION
The pump business is highly competitive. Gorman-Rupp estimates that 80 other
companies sell pumps and pump units which compete in one or more of the
industries and applications in which comparable products of the Company are
utilized. Many pumps are specifically designed and engineered for a particular
customer's application. The Company believes that proper application, product
performance and service are the principal methods of competition, and
attributes its success to its emphasis in these areas.
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PART I--CONTINUED
ITEM 1. BUSINESS--CONTINUED
PURCHASING AND PRODUCTION
Virtually all materials, supplies, components and accessories used by the
Company in the fabrication of its products, including all castings (for which
the patterns are made and owned by the Company), structural steel, bar stock,
motors, solenoids, engines, seals, and phenolic, polyethylene and rubber
components, are purchased by the Company from other suppliers and
manufacturers. No purchases are made under long-term contracts and the Company
is not dependent upon a single source for any materials, supplies, components
or accessories which are of material importance to its business.
The Company purchases motors for its polypropylene bellows pumps and its
magnetic drive pumps from several alternate vendors and motor components for
its large submersible pumps from a limited number of suppliers. The Company
had an agreement with the purchaser of its Durham Products Division to supply a
minimum quantity of electric coils, shaded pole and gear motors over a two year
period which ended August 31, 1994. Small motor requirements are currently
sourced from that purchaser and alternate suppliers.
The other production operations of the Company consist of the machining of
castings, the cutting and shaping of bar stock and structural members, the
manufacture of a few minor components, and the assembling, painting and testing
of its products. Virtually all of the Company's products are tested prior to
shipment.
OTHER ASPECTS
As of December 31, 1994, the Company employed approximately 994 persons, of
whom approximately 608 were hourly employees. The Company has no collective
bargaining agreements, has never experienced a strike and considers its labor
relations to be satisfactory.
Although the Company owns a number of patents, and several of them are
important to its business, Gorman-Rupp believes that the business of the
Company is not materially dependent upon any one or more patents.
As of December 31, 1994, the value of the Company's backlog of unfilled orders
was approximately $56,653,000, of which $28,471,000 was for the unfilled orders
of Patterson Pump Company. Approximately $55,637,000 is scheduled to be
shipped during 1995, with the balance ($1,016,000) being shipped in 1996. At
December 31, 1993, the value of the backlog of unfilled orders was
approximately $54,255,000.
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PART I--CONTINUED
ITEM 2. PROPERTIES
All of the production operations of the Company are conducted at its plants
located in Mansfield and Bellville, Ohio; St. Thomas, Ontario; Sand Springs,
Oklahoma; and Toccoa, Georgia. All of the Company's properties are owned in fee
without any material encumbrance. The Company also owns facilities (formerly
utilized by its Durham Products Division) located in Durham, North Carolina,
which are currently leased to another manufacturer. In addition, the Company
owns in fee an approximately 26,000 square foot facility in Sparks, Nevada
which comprises a training center and warehouse space.
The Company's Ohio operations are principally located in facilities in
Mansfield. These facilities consist of five buildings containing approximately
682,200 square feet of floor space for production, office and warehousing
functions. The original portion of the largest production plant, consisting of
approximately 238,000 square feet located on a 26 acre site, was built in 1917
and has been expanded on several occasions, the latest in 1973. Another
production plant, also situated on the 26 acre site, was built in 1968 and has
been frequently expanded, most recently in 1994. The 1994 expansion added
approximately 37,600 square feet, including a modern test facility. This plant
currently comprises approximately 134,200 square feet of floor space. A third
plant, containing approximately 215,000 square feet of floor space, located on
a 5-1/2 acre site, was purchased in 1975 and is used for most machining
operations and storage of raw materials. Its latest addition, consisting of
30,000 square feet of floor space, was made in 1978. A small office building
of approximately 11,500 square feet was purchased in 1979 and houses a training
facility and the Company's personnel and advertising departments. In late
1982, the Company purchased a building built in 1920 and located on 3.4 acres
adjacent to the Company's 26 acre site. This acquisition, which was renovated
in 1983, contains 83,500 square feet and is being used for additional warehouse
space.
The remainder of the Company's Ohio operations are conducted at two plants in
Bellville, which comprise approximately 107,500 square feet of floor space
situated on an 8.5 acre site. The initial portion of the larger plant,
containing approximately 93,200 square feet of floor space, was built in 1953
and has been expanded on several occasions, most recently in 1973-74. The
smaller facility, which contains approximately 14,300 square feet of floor
space, was acquired in 1984.
The plant in St. Thomas, Ontario has undergone five major expansions since it
was established in 1960. In 1986, a minor expansion of approximately 600
square feet was added as a receiving and shipping area to improve materials
handling. This facility contains about 52,600 square feet of floor space and
is situated on an 11 acre site.
The Oklahoma facility, located on 4.5 acres of land, was purchased in 1977.
Manufacturing and warehousing facilities are located in a 26,700 square foot
building, originally built in 1973 and expanded in 1978, 1981, 1982 and 1991.
A detached 2,200 square foot building is used for offices. In 1980, a
contiguous parcel of two acres of undeveloped land was purchased for future
needs.
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PART I--CONTINUED
ITEM 2. PROPERTIES--CONTINUED
A building, built in 1959 and located on 20 acres of land in Durham, North
Carolina, formerly housed the Company's Durham Products Division and is
currently being leased to another manufacturer through August 31, 1995. It was
purchased in 1980 and contains 43,500 square feet of manufacturing, warehousing
and office space, 3,500 square feet of which were added in 1982. In 1981-82,
19 contiguous undeveloped acres were purchased for future needs. In 1989, the
Company completed an addition of 15,000 square feet on the ground floor and
5,000 square feet on the second floor. The offices are located on the second
floor addition and the expanded ground floor addition is available for
manufacturing.
Patterson Pump Company, in Toccoa, Georgia, includes a 31 acre site with
buildings totaling approximately 165,900 square feet, with about 28,000 square
feet of office space and 137,900 square feet of manufacturing space. In 1989,
Patterson Pump Company completed an addition of 38,500 square feet to the
building for manufacturing purposes and razed an approximately 12,700 square
foot portion of the manufacturing facility. In 1992, the Company completed a
64,000 square foot addition to the manufacturing plant, including a modern
400,000 gallon test facility. A 28,000 square foot office addition was
completed in 1993. Upon occupancy of the new building in 1993, the pre-existing
office space of 15,200 square feet was razed for additional parking space.
The Company considers its plants, machinery and equipment to be well
maintained, in good operating condition and adequate for the present uses and
business requirements of the Company.
ITEM 3. LEGAL PROCEEDINGS
Gorman-Rupp is not currently engaged in any litigation which in the opinion of
the Company is material to its operations or assets.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this Form 10-K, no
matter was submitted to a vote of the Company's shareholders, through the
solicitation of proxies or otherwise.
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PART I --CONTINUED
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3), the information regarding executive
officers called for by Item 401 of Regulation S-K and by Item 10 of this Form
10-K is set forth below.
Date Elected to
Name Age Office Position
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James C. Gorman 70 Chairman and Chief Executive Officer 1964
John A. Walter 61 President and Chief Operating Officer 1989
K. Jack Bargahiser 62 Vice President Communications 1975
Jeffrey S. Gorman 42 Vice President; General Manager,
Mansfield Division 1989
Kenneth E. Dudley 57 Treasurer 1982
Robert E. Kirkendall 52 Corporate Secretary/Assistant Treasurer 1982
William D. Danuloff 47 Vice President Information Services 1991
Except as noted, each of the above-named officers has held his executive
position with the Company for the past five years. Mr. J. C. Gorman has served
as the Company's Chief Executive Officer since 1964; in 1989, he also assumed
the office of Chairman and relinquished the office of President. Mr. Walter
was elected to the additional position of Chief Operating Officer in 1993; he
served as Vice President and General Manager of the Industries Division from
1978 until 1990. Mr. J. S. Gorman was elected Vice President and General
Manager of the Mansfield Division in 1989, after serving as Assistant General
Manager from 1986 to 1988; he held the office of Corporate Secretary from 1982
to 1990. Mr. Kirkendall was elected as Assistant Treasurer in 1982; he assumed
the additional office of Corporate Secretary in 1990. Mr. Danuloff was elected
Vice President Information Services in 1991, after serving as Director of
Information Services from 1981 to 1991.
Mr. J. S. Gorman is the son of Mr. J. C. Gorman. Otherwise, there is no family
relationship among any of the Executive Officers and Directors of the Company.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Attention is directed to the section "Ranges of Stock Prices" and the data
immediately below pertaining to the shareholder information reported by the
Transfer Agent on page 16 in the Company's 1994 Annual Report to Shareholders,
which are incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
Attention is directed to the section "Ten Year Summary of Selected Financial
Data" on pages 16 and 17 in the Company's 1994 Annual Report to Shareholders,
which is incorporated herein by this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Attention is directed to the section "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on page 15 in the Company's 1994
Annual Report to Shareholders, which is incorporated herein by this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Attention is directed to the Company's consolidated financial statements, the
notes thereto and the report of independent auditors thereon on pages 10-14,
and 17, and to the section "Summary of Quarterly Results of Operations" on page
16, in the Company's 1994 Annual Report to Shareholders, which are incorporated
herein by this reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNT-
ING AND FINANCIAL DISCLOSURE
The Company has not changed its independent public accountants and there have
been no reportable disagreements with such accountants regarding accounting
principles or practices or financial disclosure matters.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
With respect to Directors, attention is directed to the section "Election of
Directors" in the Company's definitive Notice of 1995 Annual Meeting of
Shareholders and related Proxy Statement (filed pursuant to Regulation 14A not
later than 120 days after the end of the fiscal year covered by this Form
10-K), which is incorporated herein by this reference.
With respect to executive officers, attention is directed to Part I of this
Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Attention is directed to the sections "Executive Compensation", "Pension and
Retirement Benefits", "Salary Committee Report on Executive Compensation" and
"Shareholder Return Performance Presentation" in the Company's definitive
Notice of 1995 Annual Meeting of Shareholders and related Proxy Statement
(filed pursuant to Regulation 14A not later than 120 days after the end of the
fiscal year covered by this Form 10-K), which are incorporated herein by this
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MAN-
AGEMENT
Attention is directed to the sections "Principal Shareholders", "Election of
Directors" and "Shareholdings by Executive Officers" in the Company's
definitive Notice of 1995 Annual Meeting of Shareholders and related Proxy
Statement (filed pursuant to Regulation 14A not later than 120 days after the
end of the fiscal year covered by this Form 10-K), which are incorporated
herein by this reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as disclosed in the footnote in the section "Shareholdings by Executive
Officers" and in footnote 2 in the section "Principal Shareholders" in the
Company's definitive Notice of 1995 Annual Meeting of Shareholders and related
Proxy Statement (filed pursuant to Regulation 14A not later than 120 days after
the end of the fiscal year covered by this Form 10-K), which are incorporated
herein by this reference, the Company has no relationships or transactions
required to be reported by Item 404 of Regulation S-K.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
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With respect to the consolidated financial statements of the
Registrant and its subsidiaries, the following documents have been
incorporated by reference into this report:
(i) Consolidated balance sheets--December 31, 1994 and 1993
(ii) Consolidated statements of income--Years ended
December 31, 1994, 1993 and 1992
(iii) Consolidated statements of shareholders' equity--Years
ended December 31, 1994, 1993 and 1992
(iv) Consolidated statements of cash flows--Years ended
December 31, 1994, 1993 and 1992
(v) Notes to consolidated financial statements
(vi) Report of independent auditors
2. Financial Statement Schedules
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All financial statement schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable and, therefore, have been omitted.
3. Exhibits
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The exhibits listed below are submitted in a separate section of this
report immediately following the Exhibit Index.
(3) (i) Articles of incorporation and (ii) By-laws
(4) Instruments defining the rights of security holders,
including indentures
(10) Material contracts
(13) Annual report to security holders
(21) Subsidiaries of the registrant
(23) Consents of experts and counsel
(24) Powers of attorney
(27) Financial data schedule
(b) No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
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PART IV--CONTINUED
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
*By ROBERT E. KIRKENDALL
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Robert E. Kirkendall
Attorney-In-Fact
Date: March 28, 1995
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Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
*JAMES C. GORMAN Chairman, Principal Executive
- ------------------------ Officer and Director
James C. Gorman
*KENNETH E. DUDLEY Treasurer and Principal Financial
- ------------------------ and Accounting Officer
Kenneth E. Dudley
*WILLIAM A. CALHOUN Director
- ------------------------
William A. Calhoun
*PETER B. LAKE Director
- ------------------------
Peter B. Lake
*BURTON PRESTON Director
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Burton Preston
*JOHN A. WALTER Director
- ------------------------
John A. Walter
*JEFFREY S. GORMAN Director
- ------------------------
Jeffrey S. Gorman
*JAMES R. WATSON Director
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James R. Watson
Director
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Thomas E. Hoaglin
*The undersigned, by signing his name hereto, does sign and execute this Annual
Report on Form 10-K on behalf of The Gorman-Rupp Company and on behalf of each
of the above-named Officers and Directors of The Gorman-Rupp Company pursuant
to Powers of Attorney executed by The Gorman-Rupp Company and by each such
Officer and Director and filed with the Securities and Exchange Commission.
March 28, 1995
By: /s/ ROBERT E. KIRKENDALL
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Robert E. Kirkendall
Attorney-In-Fact
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ANNUAL REPORT ON FORM 10-K
THE GORMAN-RUPP COMPANY
For the Year Ended December 31, 1994
EXHIBIT INDEX
EXHIBIT
(3)(4) Amended Articles of Incorporation, as amended 14
(3)(4) Regulations 16
(10) Form of Indemnification Agreement between the
Company and its Directors and Officers 24
(13) Incorporated Portions of 1994 Annual Report to
Shareholders 34
(21) Subsidiaries of the Company 46
(23) Consent of Independent Auditors 47
(24) Powers of Attorney 48
(27) Financial Data Schedule 51
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