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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 March 31, 2010
 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.)
 600 South Airport Road, Mansfield, Ohio
    
    44903(Address of principal executive offices)
    
    (Zip Code)
 (419) 755-1011
 þ o
 Yes
o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ
 16,710,535
     Page 1 of 17
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The Gorman-Rupp Company and Subsidiaries
Three Months Ended March 31, 2010
 PART I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)
    
    
    3Condensed Consolidated Statements of Income
-Three months ended March 31, 2010 and 2009
    
    
    3Condensed Consolidated Balance Sheets
-March 31, 2010 and December 31, 2009
    
    
    4Condensed Consolidated Statements of Cash Flows
-Three months ended March 31, 2010 and 2009
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    12Item 4. Controls and Procedures
    
    
    12PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    13Item 1A. Risk Factors
    
    
    13Item 6. Exhibits
    
    
    14EX-31.1 302 Principal Executive Officer (PEO) CertificationEX-31.2 302 Principal Financial Officer (PFO) CertificationEX-32 Section 1350 Certifications
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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 EndedMarch 31,(Thousands of dollars, except per share amounts)
    
    2010
    
    
    2009Net sales
    
    $
    65,786
    
    
    $
    71,598Cost of products sold
    
    
    50,337
    
    
    
    56,253Gross profit
    
    
    15,449
    
    
    
    15,345Selling, general and
administrative expenses
    
    
    8,759
    
    
    
    8,988Operating income
    
    
    6,690
    
    
    
    6,357Other income
    
    
    125
    
    
    
    765Other expense
    
    
    (116
    )
    
    
    (254
    )Income before income taxes
    
    
    6,699
    
    
    
    6,868Income taxes
    
    
    2,202
    
    
    
    2,362Net income
    
    $
    4,497
    
    
    $
    4,506Earnings per share
    
    $
    0.27
    
    
    $
    0.27Cash dividends paid per share
    
    $
    0.105
    
    
    $
    0.100Weighted average shares outstanding
    
    
    16,710,535
    
    
    
    16,707,535
 See notes to condensed consolidated financial statements.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 UnauditedMarch 31,
    
    
    December 31,(Thousands of dollars)
    
    2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    44,019
    
    
    $
    44,403Short-term investments
    
    
    1,509
    
    
    
    1,505Accounts receivable  net
    
    
    42,739
    
    
    
    37,239Inventories  net
    
    
    38,539
    
    
    
    40,506Deferred income taxes and other current assets
    
    
    4,929
    
    
    
    7,747Total current assets
    
    
    131,735
    
    
    
    131,400Property, plant and equipment
    
    
    207,875
    
    
    
    208,571Less accumulated depreciation
    
    
    99,215
    
    
    
    100,048Property, plant and equipment  net
    
    
    108,660
    
    
    
    108,523Deferred income taxes and other assets
    
    
    9,751
    
    
    
    9,501Total assets
    
    $
    250,146
    
    
    $
    249,424Liabilities and shareholders equityCurrent liabilities:Accounts payable
    
    $
    11,548
    
    
    $
    8,972Short-term debt
    
    
    10,000
    
    
    
    15,000Payroll and related liabilities
    
    
    6,067
    
    
    
    6,909Accrued expenses
    
    
    13,932
    
    
    
    12,294Total current liabilities
    
    
    41,547
    
    
    
    43,175Income taxes payable
    
    
    971
    
    
    
    971Retirement benefits
    
    
    4,206
    
    
    
    5,044Postretirement benefits
    
    
    22,582
    
    
    
    22,270Deferred income taxes
    
    
    354
    
    
    
    352Total liabilities
    
    
    69,660
    
    
    
    71,812The Gorman-Rupp Company shareholders equityCommon shares, without par value:Authorized - 35,000,000 sharesOutstanding - 16,710,535 shares in 2010
and 2009 (after deducting treasury
shares of 601,683 in 2010 and 2009)
at stated capital amount
    
    
    5,100
    
    
    
    5,100Retained earnings
    
    
    185,607
    
    
    
    182,875Accumulated other comprehensive loss
    
    
    (10,909
    )
    
    
    (11,070
    )The Gorman-Rupp Company shareholders equity
    
    
    179,798
    
    
    
    176,905Noncontrolling interest
    
    
    688
    
    
    
    707Total shareholders equity
    
    
    180,486
    
    
    
    177,612Total liabilities and shareholders equity
    
    $
    250,146
    
    
    $
    249,424
 See notes to condensed consolidated financial statements.
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THE GORMAN-RUPP COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    4,497
    
    
    $
    4,506Adjustments to reconcile net income attributable to
net cash provided by operating activities:Depreciation and amortization
    
    
    2,597
    
    
    
    2,105Changes in operating assets and liabilities
    
    
    1,876
    
    
    
    4,196Net cash provided by operating activities
    
    
    8,970
    
    
    
    10,807Cash flows from investing activities:Capital additions  net
    
    
    (2,577
    )
    
    
    (9,034
    )Proceeds from sale of product line
    
    
    
    
    
    
    1,105Change in short-term investments
    
    
    (4
    )
    
    
    Net cash used for investing activities
    
    
    (2,581
    )
    
    
    (7,929
    )Cash flows from financing activities:Cash dividends
    
    
    (1,755
    )
    
    
    (1,671
    )Proceeds from bank borrowings
    
    
    
    
    
    
    5,671Payments to bank for borrowings
    
    
    (5,000
    )
    
    
    Net cash (used for) provided by financing activities
    
    
    (6,755
    )
    
    
    4,000Effect of exchange rate changes on cash
    
    
    (18
    )
    
    
    (195
    )Net (decrease) increase in cash
and cash equivalents
    
    
    (384
    )
    
    
    6,683Cash and cash equivalents:Beginning of year
    
    
    44,403
    
    
    
    23,793March 31,
    
    $
    44,019
    
    
    $
    30,476
 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
   March 31,
    
    
    December  31,(Thousands of dollars)
    
    2010
    
    
    2009Raw materials and in-process
    
    $
    21,227
    
    
    $
    22,087Finished parts
    
    
    14,390
    
    
    
    16,026Finished products
    
    
    2,922
    
    
    
    2,393Total inventories
    
    $
    38,539
    
    
    $
    40,506
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PART I  CONTINUED
 ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  CONTINUED
 NOTE C  FINANCING ARRANGEMENTS
  NOTE D  PRODUCT WARRANTIES
  Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009Balance at beginning of year
    
    $
    1,863
    
    
    $
    2,048Warranty costs accrued
    
    
    119
    
    
    
    792Expenses
    
    
    (484
    )
    
    
    (804
    )Balance at end of quarter
    
    $
    1,498
    
    
    $
    2,036
 NOTE E  COMPREHENSIVE INCOME
  Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009Net income
    
    $
    4,497
    
    
    $
    4,506Changes in cumulative foreign currency
translation adjustments
    
    
    (108
    )
    
    
    (680
    )Pension and OPEB adjustments
    
    
    269
    
    
    
    470Noncontrolling interest
    
    
    (19
    )
    
    
    (5
    )Total comprehensive income
    
    $
    4,639
    
    
    $
    4,291
 NOTE F  INCOME TAXES
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PART I  CONTINUED
 ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  CONTINUED
 NOTE F  INCOME TAXES  CONTINUED
       NOTE G  PENSION AND OTHER POSTRETIREMENT BENEFITS
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PART I  CONTINUED
 ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  CONTINUED
 NOTE G  PENSION AND OTHER POSTRETIREMENT BENEFITS  CONTINUED
   Postretirement BenefitsPension Benefits
    
    
    (OPEB)Three Months Ended March 31,(Thousands of dollars)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Service cost
    
    $
    680
    
    
    $
    688
    
    
    $
    276
    
    
    $
    302Interest cost
    
    
    789
    
    
    
    851
    
    
    
    314
    
    
    
    394Expected return on plan assets
    
    
    (1,107
    )
    
    
    (884
    )
    
    
    
    
    
    
    Recognized actuarial (gain) loss
    
    
    394
    
    
    
    527
    
    
    
    (143
    )
    
    
    (56
    )Benefit cost
    
    $
    756
    
    
    $
    1,182
    
    
    $
    447
    
    
    $
    640
 
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  CONTINUED
 First Quarter 2010 Compared to First Quarter 2009
 Net Sales
 Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009
    
    
    $ Change
    
    

%
ChangeNet sales
    
    $
    65,786
    
    
    $
    71,598
    
    
    $
    (5,812
    )
    
    
    (8.1
    )%
  Cost of Products Sold
 Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeCost of products sold
    
    $
    50,337
    
    
    $
    56,253
    
    
    $
    (5,916
    )
    
    
    (10.5
    )%% of Net sales
    
    
    76.5
    %
    
    
    78.6
    %
  Selling, General and Administrative Expenses (SG&A)
 Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeSelling, general and
administrative expenses
(SG&A)
    
    $
    8,759
    
    
    $
    8,988
    
    
    $
    (229
    )
    
    
    (2.5
    )%% of Net sales
    
    
    13.3
    %
    
    
    12.6
    %
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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS  CONTINUED
 Other Income
 Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeOther income
    
    $
    125
    
    
    $
    765
    
    
    $
    (640
    )
    
    
    (83.7
    )%% of Net sales
    
    
    0.2
    %
    
    
    1.1
    %
  Net Income
 Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeIncome before income taxes
    
    $
    6,699
    
    
    $
    6,868
    
    
    $
    (169
    )
    
    
    (2.5
    )%% of Net sales
    
    
    10.2
    %
    
    
    9.6
    %Income taxes
    
    $
    2,202
    
    
    $
    2,362
    
    
    $
    (160
    )
    
    
    (6.8
    )%Effective tax rate
    
    
    32.9
    %
    
    
    34.4
    %Net income
    
    $
    4,497
    
    
    $
    4,506
    
    
    $
    (9
    )
    
    
    (0.2
    )%% of Net sales
    
    
    6.8
    %
    
    
    6.3
    %Earnings per share
    
    $
    0.27
    
    
    $
    0.27
    
    
    $
    0.00
    
    
    
    0.0
    %
  Liquidity and Sources of Capital
 Three Months EndedMarch 31,(Thousands of dollars)
    
    2010
    
    
    2009
    
    
    $ ChangeNet cash provided by operating activities
    
    $
    8,970
    
    
    $
    10,807
    
    
    $
    (1,837
    )Net cash used for investing activities
    
    
    (2,581
    )
    
    
    (7,929
    )
    
    
    5,348Net cash (used for) provided by
financing activities
    
    
    (6,755
    )
    
    
    4,000
    
    
    
    (10,755
    )
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PART I  CONTINUED
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS  CONTINUED
   Critical Accounting Policies
 Managements Discussion and Analysis of
Financial Condition and Results of Operations
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
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PART I  CONTINUED
 ITEM 4. CONTROLS AND PROCEDURES  CONTINUED
 Changes in Internal Control Over Financial Reporting
  
 PART II OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
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ITEM 6. EXHIBITS
       
 SIGNATURES
  The Gorman-Rupp Company
             (Registrant)Date:  April 28, 2010
    By:
    /s/ Wayne L. KnabelWayne L. KnabelChief Financial Officer  14