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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, 2008
 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
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ
 16,703,035




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##### 



The Gorman-Rupp Company and Subsidiaries
Three Months Ended March 31, 2008 and 2007
 PART I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Statements of Income
-Three months ended March 31, 2008 and 2007Condensed Consolidated Balance Sheets
-March 31, 2008 and December 31, 2007Condensed Consolidated Statements of Cash Flows
-Three months ended March 31, 2008 and 2007Item 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 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-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 EndedMarch 31,(Thousands of dollars, except per share amounts)
    
    2008
    
    
    2007Net sales
    
    $
    81,434
    
    
    $
    74,461Cost of products sold
    
    
    61,590
    
    
    
    58,396Gross profit
    
    
    19,844
    
    
    
    16,065Selling, general and
administrative expenses
    
    
    9,499
    
    
    
    8,440Operating income
    
    
    10,345
    
    
    
    7,625Other income
    
    
    616
    
    
    
    429Other expense
    
    
    (73
    )
    
    
    (11
    )Income before income taxes
    
    
    10,888
    
    
    
    8,043Income taxes
    
    
    3,736
    
    
    
    2,951Net income
    
    $
    7,152
    
    
    $
    5,092Basic and diluted
earnings per share
    
    $
    0.43
    
    
    $
    0.30Dividends paid per share
    
    $
    0.100
    
    
    $
    0.096Average shares outstanding
    
    
    16,703,035
    
    
    
    16,700,005
 Shares outstanding and per share data reflect the 5 for 4 stock split effective December 10, 2007.
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)
    
    2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    26,424
    
    
    $
    24,604Short-term investments
    
    
    5,406
    
    
    
    5,586Accounts receivable  net
    
    
    47,570
    
    
    
    47,256Inventories  net
    
    
    55,608
    
    
    
    53,223Deferred income taxes and other current assets
    
    
    4,157
    
    
    
    4,619Total current assets
    
    
    139,165
    
    
    
    135,288Property, plant and equipment
    
    
    157,197
    
    
    
    155,379Less allowances for depreciation
    
    
    96,940
    
    
    
    95,409Property, plant and equipment  net
    
    
    60,257
    
    
    
    59,970Deferred income taxes and other assets
    
    
    16,819
    
    
    
    16,276Total assets
    
    $
    216,241
    
    
    $
    211,534Liabilities and shareholders equityCurrent liabilities:Accounts payable
    
    $
    11,225
    
    
    $
    14,162Payrolls and related liabilities
    
    
    6,534
    
    
    
    7,122Accrued expenses
    
    
    15,142
    
    
    
    12,197Total current liabilities
    
    
    32,901
    
    
    
    33,481Income taxes payable
    
    
    823
    
    
    
    823Postretirement benefits
    
    
    26,909
    
    
    
    26,661Deferred income taxes
    
    
    436
    
    
    
    609Total liabilities
    
    
    61,069
    
    
    
    61,574Minority interest
    
    
    591
    
    
    
    520Shareholders equityCommon shares, without par value:Authorized - 35,000,000 shares
Outstanding - 16,703,035 shares in 2008 and
2007 (after deducting treasury shares
of 609,183 in 2008 and 2007) at
stated capital amount
    
    
    5,098
    
    
    
    5,098Retained earnings
    
    
    156,950
    
    
    
    151,467Accumulated other comprehensive loss
    
    
    (7,467
    )
    
    
    (7,125
    )Total shareholders equity
    
    
    154,581
    
    
    
    149,440Total liabilities and shareholders equity
    
    $
    216,241
    
    
    $
    211,534
 Shares outstanding reflect the 5 for 4 stock split effective December 10, 2007.
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)
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    7,152
    
    
    $
    5,092Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    1,935
    
    
    
    1,694Changes in operating assets and liabilities
    
    
    (3,668
    )
    
    
    3,600Net cash provided by operating activities
    
    
    5,419
    
    
    
    10,386Cash flows from investing activities:Capital additions, net
    
    
    (2,053
    )
    
    
    (1,567
    )Change in short-term investments
    
    
    179
    
    
    
    (42
    )Net cash used for investing activities
    
    
    (1,874
    )
    
    
    (1,609
    )Cash flows from financing activities:Net cash used for financing activities, cash dividends
    
    
    (1,670
    )
    
    
    (1,603
    )Effect of exchange rate changes on cash
    
    
    (55
    )
    
    
    55Net increase in cash
and cash equivalents
    
    
    1,820
    
    
    
    7,229Cash and cash equivalents:Beginning of year
    
    
    24,604
    
    
    
    12,654March 31,
    
    $
    26,424
    
    
    $
    19,883
 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
 Accounting for Uncertainty in Income Taxes-An
Interpretation of FASB Statement No. 109 (FIN 48)
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans (FAS 158),
 Fair Value Measurements (FAS 157)
 The Fair Value Option for Financial Assets and
Financial Liabilities-Including an Amendment of SFAS 115
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PART I  CONTINUED
 ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  CONTINUED
 NOTE A  BASIS OF PRESENTATION OF FINANCIAL STATEMENTS  CONTINUED
 Business Combinations (FAS 141(R)).
 , Noncontrolling Interests in Consolidated Financial
Statements (FAS 160), an amendment of Accounting Research Bulletin No. 51, Consolidated Financial
Statements (ARB 51).
 NOTE B  INVENTORIES
   March 31,
    
    December 31,(Thousands of dollars)
    
    2008
    
    2007Raw materials and in-process
    
    $
    30,866
    
    
    $
    27,917Finished parts
    
    
    20,916
    
    
    
    21,348Finished products
    
    
    3,826
    
    
    
    3,958Total inventories
    
    $
    55,608
    
    
    $
    53,223
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PART I  CONTINUED
 ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  CONTINUED
 NOTE C  PRODUCT WARRANTIES
  Three Months EndedMarch 31,(Thousands of dollars)
    
    2008
    
    2007Balance at beginning of year
    
    $
    1,682
    
    
    $
    1,216Warranty costs
    
    
    683
    
    
    
    388Settlements
    
    
    (541
    )
    
    
    (426
    )Balance at end of quarter
    
    $
    1,824
    
    
    $
    1,178
 NOTE D  COMPREHENSIVE INCOME
  Three Months EndedMarch 31,(Thousands of dollars)
    
    2008
    
    2007Net income
    
    $
    7,152
    
    
    $
    5,092Changes in cumulative foreign currency
translation adjustment
    
    
    25
    
    
    
    55Pension benefit adjustments
    
    
    (367
    )
    
    
    (1
    )Total comprehensive income
    
    $
    6,810
    
    
    $
    5,146
 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 E  INCOME TAXES  CONTINUED
      NOTE F  PENSION AND OTHER POSTRETIREMENT BENEFITS
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PART I  CONTINUED
 ITEM 1. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  CONTINUED
 NOTE F  PENSION AND OTHER POSTRETIREMENT BENEFITS   CONTINUED
  Pension Benefits
    
    Postretirement BenefitsThree Months Ended
    
    Three Months EndedMarch 31,
    
    March 31,(Thousands of dollars)
    
    2008
    
    2007
    
    2008
    
    2007Service cost
    
    $
    659
    
    
    $
    581
    
    
    $
    298
    
    
    $
    313Interest cost
    
    
    764
    
    
    
    669
    
    
    
    416
    
    
    
    402Expected return on plan assets
    
    
    (1,048
    )
    
    
    (855
    )
    
    
    
    
    
    
    Amortization of loss
    
    
    170
    
    
    
    234
    
    
    
    
    
    
    
    Benefit cost
    
    $
    545
    
    
    $
    629
    
    
    $
    714
    
    
    $
    715
 NOTE G  SUBSEQUENT EVENT
  
 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 2008 Compared to First Quarter 2007
 Net Sales
 Three Months EndedMarch 31,(Thousands of Dollars)
    
    2008
    
    2007
    
    $ Change
    
    % ChangeNet sales
    
    $
    81,434
    
    
    $
    74,461
    
    
    $
    6,973
    
    
    
    9.4
    %
  Cost of Products Sold
 Three Months EndedMarch 31,(Thousands of Dollars)
    
    2008
    
    2007
    
    $ Change
    
    % ChangeCost of products sold
    
    $
    61,590
    
    
    $
    58,396
    
    
    $
    3,194
    
    
    
    5.5
    %% of Net sales
    
    
    75.6
    %
    
    
    78.4
    %
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PART I  CONTINUED
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
CONTINUED
 Selling, General, and Administrative Expenses (SG&A)
 Three Months EndedMarch 31,(Thousands of Dollars)
    
    2008
    
    2007
    
    $ Change
    
    % ChangeSelling, general, and
administrative
expenses (SG&A)
    
    $
    9,499
    
    
    $
    8,440
    
    
    $
    1,059
    
    
    
    12.5
    %% of Net sales
    
    
    11.7
    %
    
    
    11.3
    %
  Other Income
 Three Months EndedMarch 31,(Thousands of Dollars)
    
    2008
    
    2007
    
    $ Change
    
    % ChangeOther income
    
    $
    616
    
    
    $
    429
    
    
    $
    187
    
    
    
    43.6
    %% of Net sales
    
    
    0.8
    %
    
    
    0.6
    %
  Net Income
 Three Months EndedMarch 31,(Thousands of Dollars)
    
    2008
    
    2007
    
    $ Change
    
    % ChangeIncome before income taxes
    
    $
    10,888
    
    
    $
    8,043
    
    
    $
    2,845
    
    
    
    35.4
    %% of Net sales
    
    
    13.4
    %
    
    
    10.8
    %Income taxes
    
    $
    3,736
    
    
    $
    2,951
    
    
    $
    785
    
    
    
    26.6
    %Effective tax rate
    
    
    34.3
    %
    
    
    36.7
    %Net income
    
    $
    7,152
    
    
    $
    5,092
    
    
    $
    2,060
    
    
    
    40.5
    %% of Net sales
    
    
    8.8
    %
    
    
    6.8
    %Earnings per share
    
    $
    0.43
    
    
    $
    0.30
    
    
    $
    0.13
    
    
    
    43.3
    %
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PART I  CONTINUED
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
CONTINUED
  Liquidity and Sources of Capital
      
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
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PART I  CONTINUED
 
 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
  
 ITEM 1A. RISK FACTORS
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ITEM 6. EXHIBITS
       SIGNATURES
  Date: May 5, 2008
    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 15