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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 1-6747
 The Gorman-Rupp Company
 
 Ohio
    
    34-0253990(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)305 Bowman Street, Mansfield, Ohio
    
    44903(Address of principal executive offices)
    
    (Zip Code)
 (419) 755-1011
 þ o
  o þ o
 o þ
 13,360,004




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##### Table of Contents



The Gorman-Rupp Company and Subsidiaries
Three and Six Months Ended June 30, 2007 and 2006
 PART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Condensed Consolidated Statements of Income
Three
months ended June 30, 2007 and 2006
Six
months ended June 30, 2007 and 2006Condensed Consolidated Balance Sheets
June 30,
2007 and December 31, 2006Condensed Consolidated Statements of Cash Flows
Six
months ended June 30, 2007 and 2006Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of OperationsItem 3.
    
    Quantitative and Qualitative Disclosures about Market RiskItem 4.
    
    Controls and ProceduresPART II. OTHER INFORMATIONItem 1.
    
    Legal ProceedingsItem 1A.
    
    Risk FactorsItem 4.
    
    Submission of Matters to a Vote of Security HoldersItem 6.
    
    ExhibitsEX-3 Articles of Incorporation and By-lawsEX-4 Instruments defining the rights of security holders, including indenturesEX-10 Material ContractsEX-31.1 302 CEO CertificationEX-31.2 302 CFO CertificationEX-32 Section 1350 CEO and CFO CertificationsEX-3.4EX-31.1EX-31.2EX-32
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PART I. FINANCIAL INFORMATION
 
 ITEM 1FINANCIAL STATEMENTS (UNAUDITED)
 
 THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(Thousands of dollars, except per share amounts)
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    79,647
    
    
    $
    67,905
    
    
    $
    154,108
    
    
    $
    134,992Cost of products sold
    
    
    61,548
    
    
    
    52,318
    
    
    
    119,944
    
    
    
    104,455Gross Profit
    
    
    18,099
    
    
    
    15,587
    
    
    
    34,164
    
    
    
    30,537Selling, general and
administrative expenses
    
    
    8,286
    
    
    
    7,643
    
    
    
    16,726
    
    
    
    15,749Operating Income
    
    
    9,813
    
    
    
    7,944
    
    
    
    17,438
    
    
    
    14,788Other income
    
    
    639
    
    
    
    442
    
    
    
    1,068
    
    
    
    654Other expense
    
    
    (14
    )
    
    
    (3
    )
    
    
    (25
    )
    
    
    (11
    )Income Before Income Taxes
    
    
    10,438
    
    
    
    8,383
    
    
    
    18,481
    
    
    
    15,431Income taxes
    
    
    3,900
    
    
    
    2,884
    
    
    
    6,851
    
    
    
    5,394Net Income
    
    $
    6,538
    
    
    $
    5,499
    
    
    $
    11,630
    
    
    $
    10,037Basic and DilutedEarnings Per Share
    
    $
    0.49
    
    
    $
    0.41
    
    
    $
    0.87
    
    
    $
    0.75Dividends Paid Per Share
    
    $
    0.120
    
    
    $
    0.112
    
    
    $
    0.240
    
    
    $
    0.224Average Shares Outstanding
    
    
    13,360,004
    
    
    
    13,356,254
    
    
    
    13,360,004
    
    
    
    13,356,254
 See notes to condensed consolidated financial statements.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 UnauditedJune 30,
    
    
    December 31,(Thousands of dollars)
    
    2007
    
    
    2006AssetsCurrent Assets:Cash and cash equivalents
    
    $
    19,848
    
    
    $
    12,654Short-term investments
    
    
    4,782
    
    
    
    4,201Accounts receivable  net
    
    
    52,213
    
    
    
    45,135Inventories  net
    
    
    51,241
    
    
    
    50,299Deferred income taxes and other current assets
    
    
    3,048
    
    
    
    7,829Total Current Assets
    
    
    131,132
    
    
    
    120,118Property, plant and equipment
    
    
    148,423
    
    
    
    141,901Less allowances for depreciation
    
    
    93,638
    
    
    
    89,550Property, Plant and Equipment  Net
    
    
    54,785
    
    
    
    52,351Deferred income taxes and other assets
    
    
    19,908
    
    
    
    15,071Total Assets
    
    $
    205,825
    
    
    $
    187,540Liabilities and Shareholders EquityCurrent Liabilities:Accounts payable
    
    $
    15,308
    
    
    $
    10,417Payrolls and related liabilities
    
    
    4,217
    
    
    
    3,557Accrued expenses
    
    
    17,262
    
    
    
    13,672Total Current Liabilities
    
    
    36,787
    
    
    
    27,646Income taxes payable
    
    
    1,466
    
    
    
    Retirement benefits
    
    
    1,438
    
    
    
    4,185Postretirement benefits
    
    
    28,105
    
    
    
    27,567Total Liabilities
    
    
    67,796
    
    
    
    59,398Minority Interest
    
    
    483
    
    
    
    Shareholders EquityCommon shares, without par value:Authorized  35,000,000 shares in 2007
and 14,000,000 in 2006;Outstanding  13,360,004 shares in 2007 and
2006 (after deducting treasury
shares of 490,347 in 2007 and 2006)
at stated capital amount
    
    
    5,097
    
    
    
    5,097Retained earnings
    
    
    143,438
    
    
    
    135,268Accumulated other comprehensive loss
    
    
    (10,989
    )
    
    
    (12,223
    )Total Shareholders Equity
    
    
    137,546
    
    
    
    128,142Total Liabilities and Shareholders Equity
    
    $
    205,825
    
    
    $
    187,540
 See notes to condensed consolidated financial statements.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Six Months EndedJune 30,(Thousands of dollars)
    
    2007
    
    
    2006Cash Flows From Operating Activities:Net income
    
    $
    11,630
    
    
    $
    10,037Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    3,583
    
    
    
    3,311Changes in operating assets and liabilities
    
    
    4,588
    
    
    
    (5,232
    )Net Cash Provided by Operating Activities
    
    
    19,801
    
    
    
    8,116Cash Flows From Investing Activities:Capital additions, net
    
    
    (4,894
    )
    
    
    (2,596
    )Change in short-term investments
    
    
    (581
    )
    
    
    (1,728
    )Payment for acquisition, net of cash acquired
    
    
    (3,412
    )
    
    
    Net Cash Used for Investing Activities
    
    
    (8,887
    )
    
    
    (4,324
    )Cash Flows From Financing Activities:Net Cash Used for Financing Activities, cash dividends
    
    
    (3,206
    )
    
    
    (2,992
    )Effect of exchange rate changes on cash
    
    
    (514
    )
    
    
    230Net Increase in Cash
and Cash Equivalents
    
    
    7,194
    
    
    
    1,030Cash and Cash Equivalents:Beginning of year
    
    
    12,654
    
    
    
    6,755June 30,
    
    $
    19,848
    
    
    $
    7,785
 See notes to condensed consolidated financial statements.
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PART I
 ITEM 1.
    
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
 NOTE A  BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
  NEW ACCOUNTING PRONOUNCEMENTS
  NOTE B  INVENTORIES
   (Thousands of dollars)
    
    June 30,
    
    December 31,2007
    
    2006Raw materials and in-process
    
    $
    21,835
    
    
    $
    22,423Finished parts
    
    
    21,321
    
    
    
    23,491Finished products
    
    
    8,085
    
    
    
    4,385Total inventories
    
    $
    51,241
    
    
    $
    50,299
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PART I  CONTINUED
 ITEM 1.
    
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  CONTINUED
 NOTE C  PRODUCT WARRANTIES
  (Thousands of dollars)
    
    Six Months EndedJune 30,2007
    
    2006Balance at beginning of year
    
    $
    1,216
    
    
    $
    1,277Warranty costs
    
    
    1,495
    
    
    
    1,005Settlements
    
    
    (1,204
    )
    
    
    (906
    )Balance at end of quarter
    
    $
    1,507
    
    
    $
    1,376
 NOTE D  COMPREHENSIVE INCOME
  (Thousands of dollars)
    
    Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Net income
    
    $
    6,538
    
    
    $
    5,499
    
    
    $
    11,630
    
    
    $
    10,037Changes in cumulative
foreign currency
translation adjustment
    
    
    898
    
    
    
    432
    
    
    
    953
    
    
    
    108Pension benefit adjustments
    
    
    282
    
    
    
    
    
    
    
    281
    
    
    
    Total comprehensive income
    
    $
    7,718
    
    
    $
    5,931
    
    
    $
    12,864
    
    
    $
    10,145
 NOTE E  INCOME TAXES
 Accounting for Uncertainty in Income
Taxes Accounting for Contingencies Accounting for Income Taxes
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PART I  CONTINUED
 ITEM 1.
    
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  CONTINUED
      NOTE F  PENSION AND OTHER POSTRETIREMENT BENEFITS
   Pension Benefits
    
    Postretirement Benefits(Thousands of dollars)
    
    Six Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Service cost
    
    $
    1,239
    
    
    $
    1,118
    
    
    $
    625
    
    
    $
    596Interest cost
    
    
    1,341
    
    
    
    1,248
    
    
    
    805
    
    
    
    855Expected return on plan assets
    
    
    (1,709
    )
    
    
    (1,429
    )
    
    
    
    
    
    
    Amortization of loss
    
    
    461
    
    
    
    512
    
    
    
    
    
    
    
    131Benefit cost
    
    $
    1,332
    
    
    $
    1,449
    
    
    $
    1,430
    
    
    $
    1,582
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PART I  CONTINUED
 ITEM 1.
    
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  CONTINUED
 NOTE G  ACQUISITIONS
  
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Second Quarter 2007 Compared to Second Quarter 2006
 Net Sales
 (Thousands of Dollars)
    
    Three Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeNet sales
    
    $
    79,647
    
    
    $
    67,905
    
    
    $
    11,742
    
    
    
    17.3
    %
  9




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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS  CONTINUED
  Cost of Products Sold
 (Thousands of Dollars)
    
    Three Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeCost of products sold
    
    $
    61,548
    
    
    $
    52,318
    
    
    $
    9,230
    
    
    
    17.6
    %% of Net sales
    
    
    77.3
    %
    
    
    77.0
    %
  Selling, General, and Administrative Expenses (SG&A)
 (Thousands of Dollars)
    
    Three Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeSelling, general, and
administrative expenses
(SG&A)
    
    $
    8,286
    
    
    $
    7,643
    
    
    $
    643
    
    
    
    8.4
    %% of Net sales
    
    
    10.4
    %
    
    
    11.3
    %
  Other Income
 (Thousands of Dollars)
    
    Three Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeOther income
    
    $
    639
    
    
    $
    442
    
    
    $
    197
    
    
    
    44.6
    %% of Net sales
    
    
    0.8
    %
    
    
    0.7
    %
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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS  CONTINUED
  Net Income
 (Thousands of Dollars)
    
    Three Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeIncome before income taxes
    
    $
    10,438
    
    
    $
    8,383
    
    
    $
    2,055
    
    
    
    24.5
    %% of Net sales
    
    
    13.1
    %
    
    
    12.3
    %Income taxes
    
    $
    3,900
    
    
    $
    2,884
    
    
    $
    1,016
    
    
    
    35.2
    %Effective tax rate
    
    
    37.4
    %
    
    
    34.4
    %Net income
    
    $
    6,538
    
    
    $
    5,499
    
    
    $
    1,039
    
    
    
    18.9
    %% of Net sales
    
    
    8.2
    %
    
    
    8.1
    %Earnings per share
    
    $
    0.49
    
    
    $
    0.41
    
    
    $
    0.08
    
    
    
    19.5
    %
   Six Months 2007 Compared to Six Months 2006
 Net Sales
 (Thousands of Dollars)
    
    Six Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeNet sales
    
    $
    154,108
    
    
    $
    134,992
    
    
    $
    19,116
    
    
    
    14.2
    %
   11




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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS  CONTINUED
 Cost of Products Sold
 (Thousands of Dollars)
    
    Six Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeCost of products sold
    
    $
    119,944
    
    
    $
    104,455
    
    
    $
    15,489
    
    
    
    14.8
    %% of Net sales
    
    
    77.8
    %
    
    
    77.4
    %
  Selling, General, and Administrative Expenses (SG&A)
 (Thousands of Dollars)
    
    Six Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeSelling, general, and
administrative expenses
(SG&A)
    
    $
    16,726
    
    
    $
    15,749
    
    
    $
    977
    
    
    
    6.2
    %% of Net sales
    
    
    10.9
    %
    
    
    11.7
    %
  Other Income
 (Thousands of Dollars)
    
    Six Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeOther income
    
    $
    1,068
    
    
    $
    654
    
    
    $
    414
    
    
    
    63.3
    %% of Net sales
    
    
    0.7
    %
    
    
    0.5
    %
  12




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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS  CONTINUED
 Net Income
 (Thousands of Dollars)
    
    Six Months EndedJune 30,2007
    
    2006
    
    $ Change
    
    % ChangeIncome before income taxes
    
    $
    18,481
    
    
    $
    15,431
    
    
    $
    3,050
    
    
    
    19.8
    %% of Net sales
    
    
    12.0
    %
    
    
    11.4
    %Income taxes
    
    $
    6,851
    
    
    $
    5,394
    
    
    $
    1,457
    
    
    
    27.0
    %Effective tax rate
    
    
    37.1
    %
    
    
    35.0
    %Net income
    
    $
    11,630
    
    
    $
    10,037
    
    
    $
    1,593
    
    
    
    15.9
    %% of Net sales
    
    
    7.5
    %
    
    
    7.4
    %Earnings per share
    
    $
    0.87
    
    
    $
    0.75
    
    
    $
    0.12
    
    
    
    16.0
    %
   Liquidity and Sources of Capital
    13




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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS  CONTINUED
    
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 PART II OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  14




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PART II OTHER INFORMATION  CONTINUED
 
 ITEM 1A. RISK FACTORS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    Fix the number of Directors of the Company at eight and elect eight Directors to hold office
until the next annual meeting of shareholders and until their successors are elected and
qualified.
 Number of votesFor
    
    Abstain/WithheldJames C. Gorman
    
    
    11,842,209
    
    
    
    304,227Jeffrey S. Gorman
    
    
    12,028,410
    
    
    
    118,026Thomas E. Hoaglin
    
    
    12,035,143
    
    
    
    111,293Christopher H. Lake
    
    
    12,017,189
    
    
    
    129,247Dr. Peter B. Lake
    
    
    12,006,736
    
    
    
    139,700Rick R. Taylor
    
    
    12,041,744
    
    
    
    104,692W. Wayne Walston
    
    
    12,038,284
    
    
    
    108,152John A. Walter
    
    
    9,165,978
    
    
    
    2,980,458
 2.
    
    Approve and adopt an amendment to the Companys Amended Articles of Incorporation to
increase, from 14,000,000 to 35,000,000, the number of Common Shares, without par value.
 Number of votesFor
    
    Against
    
    Abstain/Withheld11,041,240
    
    997,448
    
    107,748
 3.
    
    Ratify the appointment by the Audit Review Committee of the Board of Directors of Ernst &
Young LLP as independent public accountants for the Company during the year ending December
31, 2007.
 Number of votesFor
    
    Against
    
    Abstain/Withheld11,972,829
    
    56,761
    
    116,846
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ITEM 6. EXHIBITS
 (a)
    
    Exhibits
 Exhibits 3, 4
    
    Amended Articles of Incorporation
As Amended.Exhibits 3, 4
    
    (Companys Regulations) are incorporated herein by this
reference from Exhibits (3), (4) of the Companys Annual
Report on Form 10-K for the year ended December 31, 2005.Exhibit 10
    
    (Material Contracts) are incorporated herein by this
reference from Exhibit (10) of the Companys Annual Report on Form
10-K for the year ended December 31, 2005.Exhibit 31.1
    
    Certification of Jeffrey S. Gorman, Chief Executive
Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.Exhibit 31.2
    
    Certification of Robert E. Kirkendall, Chief Financial
Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.Exhibit 32
    
    Certification pursuant to 18 U.S.C Section
1350, as adopted pursuant to Section 906 of
The Sarbanes-Oxley Act of 2002.
 SIGNATURES
  The Gorman-Rupp Company
(Registrant)  By:

/s/ Judith L. SovineJudith L. SovineCorporate Treasurer By:

/s/ Robert E. KirkendallRobert E. KirkendallSenior Vice President and
Chief Financial Officer 16