(Dollars in thousands, except for per share amounts)

The following discussion and analysis of the Company's financial condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements, and notes thereto, and the other financial data included elsewhere in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with the Company's audited Consolidated Financial Statements and accompanying notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations included in its Annual Report on Form 10-K for the year ended December 31, 2021. The coronavirus (COVID-19) pandemic had an adverse effect on the Company's reported results in 2021 and while our supply chains continue to face challenges, our reported results have continued to improve. The extent to which the Company's operations will continue to be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the pandemic and actions by government authorities to contain the pandemic or treat its impact, among other things.





Executive Overview



On May 31, 2022, the Company completed its acquisition of Fill-Rite and Sotera ("Fill-Rite"), a division of Tuthill Corporation, for $526.3 million. When adjusted for approximately $80.0 million in expected tax benefits, the net transaction value is approximately $446.3 million. The Company funded the transaction with cash on-hand and new debt. The Company incurred $6.9 million of one-time acquisition costs during the six months ended June 30, 2022 and does not expect to incur material acquisition costs in connection with the transaction going forward. The results of operations for Fill-Rite from the acquisition date are included in the Company's Consolidated Statements of Income for the three and six months ended June 30, 2022.

The following discussion of Results of Operations includes certain non-GAAP financial data and measures such as adjusted earnings per share and adjusted earnings before interest, taxes, depreciation and amortization. Adjusted earnings per share is earnings per share excluding non-cash pension settlement charges per share, one-time acquisition costs per share, amortization of step up in value of acquired inventories per share, and amortization of customer backlog per share and adjusted earnings before interest, taxes, depreciation and amortization is net income (loss) excluding interest, taxes, depreciation and amortization, adjusted to exclude non-cash pension settlement charges, one-time acquisition costs, amortization of step up in value of acquired inventories, and amortization of customer backlog. Management utilizes these adjusted financial data and measures to assess comparative operations against those of prior periods without the distortion of non-comparable factors. The inclusion of these adjusted measures should not be construed as an indication that the Company's future results will be unaffected by unusual or infrequent items or that the items for which the Company has made adjustments are unusual or infrequent or will not recur. The Gorman-Rupp Company believes that these non-GAAP financial data and measures also will be useful to investors in assessing the strength of the Company's underlying operations from period to period. These non-GAAP financial measures are not intended to replace GAAP financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. Provided below is a reconciliation of adjusted earnings per share and adjusted earnings before interest, taxes, depreciation and amortization.





                                              Three Months Ended           Six Months Ended
                                                   June 30,                    June 30,
                                              2022          2021          2022          2021
Adjusted earnings per share:
Reported earnings (loss) per share -
GAAP basis                                 $    (0.04 )   $    0.27     $    0.25     $    0.56
Plus pension settlement charge                   0.05          0.05          0.05          0.05
Plus one-time acquisition costs                  0.21             -          0.21             -
Plus amortization of step up in value of
acquired inventories                             0.04             -          0.04             -
Plus amortization of acquired customer
backlog                                          0.01             -          0.01             -

Non-GAAP adjusted earnings per share $ 0.27 $ 0.32 $ 0.56 $ 0.61



Adjusted earnings (loss) before
interest, taxes, depreciation
and amortization:
Reported net income (loss) -GAAP basis     $     (996 )   $   7,097     $   6,547     $  14,526
Plus interest expense                           2,322             -         2,322             -
Plus provision (benefit) for income
taxes                                            (265 )       1,812         1,740         3,701
Plus depreciation and amortization
expense                                         4,268         2,969         7,201         5,951
Non-GAAP earnings before interest,
taxes, depreciation and amortization            5,329        11,878        17,810        24,178
Plus pension settlement charge                  1,597         1,728         1,597         1,728
Plus one-time acquisition costs                 6,894             -         6,894             -
Plus amortization of step up in value of
acquired inventories                            1,406             -         1,406             -
Plus amortization of acquired customer
backlog                                           217             -           217             -
Non-GAAP adjusted earnings before
interest, taxes, depreciation and
amortization                               $   15,443     $  13,606     $  27,924     $  25,906




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The Gorman-Rupp Company ("we", "our", "Gorman-Rupp" or the "Company") is a leading designer, manufacturer and international marketer of pumps and pump systems for use in diverse water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire suppression, heating, ventilating and air conditioning (HVAC), military and other liquid-handling applications. The Company attributes its success to long-term product quality, applications and performance combined with timely delivery and service, and continually seeks to develop initiatives to improve performance in these key areas.

We regularly invest in training for our employees, in new product development and in modern manufacturing equipment, technology and facilities all designed to increase production efficiency and capacity and drive growth by delivering innovative solutions to our customers. We believe that the diversity of our markets is a major contributor to the generally stable financial growth we have produced historically.

As a result of the Fill-Rite acquisition, the Company's cash position decreased $108.4 million during the first six months of 2022 to $16.8 million. The Company generated $27.9 million in adjusted earnings before interest, taxes, depreciation and amortization during the same period.

Capital expenditures for the first six months of 2022 were $8.4 million and consisted primarily of machinery and equipment. Capital expenditures for the full-year 2022 are presently planned to be in the range of $15-$20 million primarily for machinery and equipment purchases, and are expected to be financed through internally-generated funds.

The Company's backlog of orders was $264.7 million at June 30, 2022 compared to $153.0 million at June 30, 2021 and $186.0 million at December 31, 2021. Fill-Rite added $14.7 million to the backlog at June 30, 2022. Incoming orders increased 28.5% for the first six months of 2022 compared to the same period in 2021, and 22.7% excluding Fill-Rite. Incoming orders during the second quarter of 2022 increased 44.5% when compared to the same period last year, and 33.7% excluding Fill-Rite. The increase in backlog for the first six months of 2022 was primarily driven by strong incoming orders during the second quarter, large municipal orders which are longer term in nature, and the acquisition of Fill-Rite. The backlog aging has remained consistent with historical levels.

On July 28, 2022, the Board of Directors authorized the payment of a quarterly dividend of $0.17 per share on the common stock of the Company, payable September 9, 2022, to shareholders of record as of August 15, 2022. This will mark the 290th consecutive quarterly dividend paid by The Gorman-Rupp Company.

The Company currently expects to continue its exceptional history of paying regular quarterly dividends and increased annual dividends. However, any future dividends will be reviewed individually and declared by our Board of Directors at its discretion, dependent on our assessment of the Company's financial condition and business outlook at the applicable time.





Outlook


We are extremely pleased to have completed the acquisition of Fill-Rite. We are also pleased to report year-over-year double digit organic revenue and adjusted EBIDTA growth during the second quarter of 2022. Global supply chain challenges are likely to persist in the near-term, we expect to continue to navigate these challenges well. We remain optimistic about our outlook due to strong incoming levels across all markets, high quality backlog, and continued pricing action to mitigate inflationary pressures. We will continue to focus on the integration and growth of the Fill-Rite business, as well as executing our strategic initiatives to drive long-term profitable growth.

Three Months Ended June 30, 2022 vs. Three Months Ended June 30, 2021

Net Sales



              Three Months Ended
                   June 30,
               2022          2021       $ Change       % Change
Net Sales   $  119,067     $ 93,015     $  26,052           28.0 %




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Net sales for the second quarter of 2022 were $119.1 million compared to net sales of $93.0 million for the second quarter of 2021, an increase of 28.0% or $26.1 million. Domestic sales increased 32.4% or $20.9 million and international sales increased 18.1% or $5.2 million compared to the same period in 2021. Fill-Rite sales, which are primarily domestic, were $13.6 million from the acquisition date of May 31, 2022 to June 30, 2022.

Excluding Fill-Rite, sales in our water markets increased 16.7% or $10.7 million in the second quarter of 2022 compared to the second quarter of 2021. Sales increased $5.2 million in the municipal market, $2.8 million in the fire protection market, $1.8 million in the construction market, and $1.4 million in the repair market. Partially offsetting these increases was a sales decrease of $0.5 million in the agriculture market.

Excluding Fill-Rite, sales in our non-water markets increased 6.2% or $1.8 million in the second quarter of 2022 compared to the second quarter of 2021. Sales increased $2.8 million in the industrial market and $1.3 million in the OEM market. Partially offsetting these increases was a sales decrease of $2.3 million in the petroleum market primarily due to timing.

Cost of Products Sold and Gross Profit





                          Three Months Ended
                               June 30,
                           2022          2021       $ Change       % Change
Cost of products sold   $   90,828     $ 68,342     $  22,486           32.9 %
% of Net sales                76.3 %       73.5 %
Gross Margin                  23.7 %       26.5 %



Gross profit was $28.2 million for the second quarter of 2022, resulting in gross margin of 23.7%, compared to gross profit of $24.7 million and gross margin of 26.5% for the same period in 2021. The 280 basis point decrease in gross margin was driven by a 500 basis point increase in cost of material, which included an unfavorable LIFO impact of 290 basis points, an unfavorable impact of 120 basis points related to Fill-Rite inventory recorded at fair value and recognized during the period, and an unfavorable impact of 20 basis points related to the amortization of acquired Fill-Rite customer backlog. The full amount of the step-up to record Fill-Rite inventory at fair value was recognized during the period and will not recur, while the Fill-Rite customer backlog will be amortized within the next year. The decrease in gross margin was partially offset by a 220 basis point improvement from labor and overhead leverage due to increased sales volume.

Selling, General and Administrative (SG&A) Expenses





                                          Three Months Ended
                                               June 30,
                                         2022            2021         $ Change        % Change
Selling, general and administrative
expenses                              $    24,114     $   13,884     $    10,230            73.7 %
% of Net sales                               20.3 %         14.9 %



Selling, general and administrative ("SG&A") expenses were $24.1 million for the second quarter of 2022, which included $6.9 million of one-time acquisition costs. Excluding acquisition costs, SG&A expenses were $17.2 million and 14.5% of net sales for the second quarter of 2022 compared to $13.9 million and 14.9% of net sales for the same period in 2021. The decrease in SG&A expenses as a percentage of sales, excluding acquisition costs, was due to increased sales volume.





Amortization expense



                         Three Months Ended
                              June 30,
                          2022           2021       $ Change       % Change

Amortization expense   $     1,218       $ 175     $    1,043          596.0 %
% of Net sales                 1.0 %       0.2 %



Amortization expense was $1.2 million for the second quarter of 2022 compared to $0.2 million for the same period in 2021. The increase in amortization expense was due to $1.0 million in amortization from the acquisition date of May 31, 2022 to June 30, 2022 related to the Fill-Rite acquisition.





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Operating Income



                     Three Months Ended
                          June 30,
                     2022           2021       $ Change       % Change
Operating income   $   2,907      $ 10,614     $  (7,707 )        (72.6 )%
% of Net sales           2.4 %        11.4 %



Operating income was $2.9 million for the second quarter of 2022, which included $6.9 million in one-time acquisition costs, $1.4 million of inventory step up amortization, and $0.2 million of acquired customer backlog amortization. Excluding acquisition costs, inventory step up and backlog amortization, operating income was $11.4 million for the second quarter of 2022, resulting in an operating margin of 9.6%, compared to operating income of $10.6 million and operating margin of 11.4% for the same period in 2021. Excluding acquisition costs, inventory step up and backlog amortization, operating margin decreased 180 basis points primarily as a result of an unfavorable LIFO impact.





Net Income (loss)



                                      Three Months Ended
                                           June 30,
                                       2022          2021       $ Change      % Change
Income (loss) before income taxes   $   (1,261 )    $ 8,909     $ (10,170 )      (114.2 )%
% of Net sales                            (1.1 )%       9.6 %
Income taxes                        $     (265 )    $ 1,812     $  (2,077 )      (114.6 )%
Effective tax rate                        (0.2 )%      20.3 %
Net income (loss)                   $     (996 )    $ 7,097     $  (8,093 )      (114.0 )%
% of Net sales                            (0.8 )%       7.6 %
Earnings per share                  $    (0.04 )    $  0.27     $   (0.31 )      (114.8 )%



The Company's effective tax rate was 21.0% for the second quarter of 2022 compared to 20.3% for the second quarter of 2021.

Net loss was ($1.0) million, or ($0.04) per share, for the second quarter of 2022 compared to net income of $7.1 million in the second quarter of 2021, or $0.27 per share. Adjusted earnings per share for the second quarter of 2022 were $0.27 per share compared to $0.32 per share for the second quarter of 2021. Earnings per share for the second quarter of 2022 included an unfavorable LIFO impact of $0.13 per share compared to an unfavorable LIFO impact of $0.02 per share in the second quarter of 2021.

Six Months Ended June 30, 2022 vs. Six Months Ended June 30, 2021

Net Sales



               Six Months Ended
                   June 30,
              2022          2021        $ Change       % Change
Net Sales   $ 221,234     $ 182,042     $  39,192           21.5 %



Net sales for the first six months of 2022 were $221.2 million compared to net sales of $182.0 million for the first six months of 2021, an increase of 21.5% or $39.2 million. Domestic sales increased 24.1% or $30.7 million and international sales increased 15.5% or $8.5 million compared to the same period in 2021. Fill-Rite sales, which are primarily domestic, were $13.6 million from the acquisition date of May 31, 2022 to June 30, 2022.

Excluding Fill-Rite, sales in our water markets increased 14.1% or $18.1 million in the first six months of 2022 compared to the first six months of 2021. Sales increased $8.6 million in the fire market, $4.1 million in the construction market, and $3.0 million in each of the municipal and repair markets. Partially offsetting these increases was a decrease of $0.6 million in the agriculture market.

Excluding Fill-Rite, sales in our non-water markets increased 14.1% or $7.5 million in the first six months of 2022 compared to the first six months of 2021. Sales increased $6.4 million in the industrial market and $3.1 million in the OEM market. Partially offsetting these increases was a decrease of $2.0 million in the petroleum market.





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Cost of Products Sold and Gross Profit





                           Six Months Ended
                               June 30,
                          2022          2021        $ Change       % Change
Cost of products sold   $ 167,498     $ 134,326     $  33,172           24.7 %
% of Net sales               75.7 %        73.8 %
Gross Margin                 24.3 %        26.2 %



Gross profit was $53.7 million for the first six months of 2022, resulting in gross margin of 24.3%, compared to gross profit of $47.7 million and gross margin of 26.2% for the same period in 2021. The 190 basis point decrease in gross margin was driven by a 360 basis point increase in cost of material, which included an unfavorable LIFO impact of 200 basis points, an unfavorable impact of 60 basis points related to Fill-Rite inventory recorded at fair value and recognized during the period, and an unfavorable impact of 10 basis points related to the amortization of acquired Fill-Rite customer backlog. The full amount of the step-up to record Fill-Rite inventory at fair value was recognized during the period and will not recur, while the Fill-Rite customer backlog will be amortized within the next year. The decrease in gross margin was partially offset by a 170 basis point improvement from labor and overhead leverage due to increased sales volume.

Selling, General and Administrative (SG&A) Expenses





                                          Six Months Ended
                                              June 30,
                                         2022           2021         $ Change        % Change
Selling, general and administrative
expenses                              $   39,936     $   27,779     $    12,157            43.8 %
% of Net sales                              18.1 %         15.3 %



Selling, general and administrative ("SG&A") expenses were $39.9 million for the first six months of 2022, which included $6.9 million of one-time acquisition costs. Excluding acquisition costs, SG&A expenses were $33.0 million and 14.9% of net sales for the second quarter of 2022 compared to $27.8 million and 15.3% of net sales for the same period in 2021. The decrease in SG&A expenses as a percentage of sales, excluding acquisition costs, is due to increased sales volume.





Amortization expense



                         Six Months Ended
                             June 30,
                          2022         2021       $ Change       % Change

Amortization expense   $    1,435      $ 350     $    1,085          310.0 %
% of Net sales                0.6 %      0.2 %



Amortization expense was $1.4 million for the first six months of 2022 compared to $0.4 million for the same period in 2021. The increase in amortization expense was due to $1.0 million in amortization attributable to the Fill-Rite acquisition.





Operating Income



                     Six Months Ended
                         June 30,
                     2022         2021       $ Change       % Change

Operating income $ 12,365 $ 19,587 $ (7,222 ) (36.9 )% % of Net sales 5.6 % 10.8 %

Operating income was $12.4 million for the first six months of 2022, which included $6.9 million in one-time acquisition costs, $1.4 million of inventory step up amortization, and $0.2 million of acquired customer backlog amortization. Excluding acquisition costs, inventory step up and backlog amortization, operating income was $20.9 million for the second quarter of 2022, resulting in an operating margin of 9.4%, compared to operating income of $19.6 million and operating margin of 10.8% for the same period in 2021. Excluding acquisition costs, inventory step up and backlog amortization, operating margin decreased 140 basis points primarily as a result of an unfavorable LIFO impact.





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Net Income



                               Six Months Ended
                                   June 30,
                               2022         2021       $ Change       % Change
Income before income taxes   $  8,287     $ 18,227     $  (9,940 )        (54.5 )%
% of Net sales                    3.7 %       10.0 %
Income taxes                 $  1,740     $  3,701     $  (1,961 )        (53.0 )%
Effective tax rate                0.8 %       20.3 %
Net income                   $  6,547     $ 14,526     $  (7,979 )        (54.9 )%
% of Net sales                    3.0 %        8.0 %
Earnings per share           $   0.25     $   0.56     $   (0.31 )        (55.4 )%



The Company's effective tax rate was 21.0% for the first six months of 2022 compared to 20.3% for the first six months of 2021.

Net income was $6.5 million, or $0.25 per share, for the first six months of 2022 compared to $14.5 million for the first six months of 2021, or $0.56 per share. Adjusted earnings per share for the first six months of 2022 were $0.56 per share compared to $0.61 per share for the first six months of 2021. Earnings per share for the first six months of 2022 included an unfavorable LIFO impact of $0.18 per share compared to an unfavorable LIFO impact of $0.04 per share for the first six months of 2021.

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from operations and borrowings under our Credit Facility. Cash and cash equivalents totaled $16.8 million at June 30, 2022. The Company had an additional $92.4 million available under the revolving credit facility after deducting $5.0 million drawn and $2.6 million in outstanding letters of credit primarily related to customer orders. During the second quarter of 2022, our debt obligations increased by $445.0 million as a result of the Senior Term Loan Facility, revolving Credit Facility and Subordinated Credit Facility entered into in connection with the Fill-Rite transaction. See Note 10 "Financing Arrangements" in the Notes to our Consolidated Financial Statements.

Free cash flow, a non-GAAP measure for reporting cash flow, is defined by the Company as adjusted earnings before interest, income taxes and depreciation and amortization, less capital expenditures and dividends. The Company believes free cash flow provides investors with an important perspective on cash available for investments, acquisitions and working capital requirements.

The following table reconciles adjusted earnings before interest, income taxes and depreciation and amortization as reconciled above to free cash flow:





                                                               Six Months Ended
                                                                   June 30,
                                                             2022             2021
Non-GAAP adjusted earnings before interest, taxes,
depreciation and amortization                            $     27,924     $     25,906
Less capital expenditures                                      (8,445 )         (3,548 )
Less cash dividends                                            (8,869 )         (8,095 )
Non-GAAP free cash flow                                  $     10,610     $     14,263




Financial Cash Flow



                                                    Six Months Ended
                                                        June 30,
                                                   2022          2021

Beginning of period cash and cash equivalents $ 125,194 $ 108,203 Net cash provided by operating activities

            6,692        28,111
Net cash used for investing activities            (534,538 )      (2,971 )

Net cash provided by financing activities 419,983 (8,984 ) Effect of exchange rate changes on cash

               (503 )         (65 )

Net increase in cash and cash equivalents (108,366 ) 16,901 End of period cash and cash equivalents $ 16,828 $ 124,294






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The decrease in cash provided by operating activities in the first six months of 2022 compared to the same period last year was primarily due to acquisition costs of $6.9 million as well as increases for the six month period in accounts receivable and inventory as the result of increased sales and backlog. In addition, account payable has remained flat for the first six months of 2022, after excluding Fill-Rite, compared to an increase of $7.1 million in the same prior period of the prior year and deferred revenue and customer deposits have decreased in the first six months of the current year compared to an increase in the same period of the prior year.

During the first six months of 2022, investing activities of $534.5 million consisted of $526.3 million for the acquisition of Fill-Rite and $8.4 million for capital expenditures primarily for machinery and equipment. During the first six months of 2021, investing activities of $3.0 million consisted of capital expenditures primarily for machinery and equipment of $3.5 million.

Net cash received for financing activities for the first six months of 2022 consisted of proceeds from the new Senior Secured loan of $350.0 million, $90.0 million in unsecured subordinated debt, and $5.0 million from the new revolving credit facility. Partially offsetting these proceeds were debt issuance fees paid of $15.2 million, dividend payments of $8.9 million and share repurchases of $0.9 million during the first six months of 2022. Net cash used from financing activities in 2021 primarily consisted of dividend payments of $8.1 million. There were no share repurchases for the first six months of 2021.

Maturities of long-term debt in the next five fiscal years, and the remaining years thereafter, are as follows:





    2022
(six months)        2023         2024         2025         2026         2027          Total
$       8,750     $ 17,500     $ 21,875     $ 30,625     $ 35,000     $ 331,250     $ 445,000

The Company was in compliance with its debt covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios, at June 30, 2022 and December 31, 2021. We believe we have adequate liquidity from funds on hand and borrowing capacity to execute our financial and operating strategy, as well as comply with debt obligation and financial covenants for the next 12 months.

The Company currently expects to continue its exceptional history of paying regular quarterly dividends and increased annual dividends. However, any future dividends will be reviewed individually and declared by our Board of Directors at its discretion, dependent on our assessment of the Company's financial condition and business outlook at the applicable time.

The Board of Directors has authorized a share repurchase program of up to $50.0 million of the Company's common shares. The actual number of shares repurchased will depend on prevailing market conditions, alternative uses of capital and other factors, and will be determined at management's discretion. The Company is not obligated to make any purchases under the program, and the program may be suspended or discontinued at any time. As of June 30, 2022, the Company had $48.1 million available for repurchase under the share repurchase program.





Critical Accounting Policies


Our critical accounting policies are described in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our Consolidated Financial Statements for the year ended December 31, 2021 contained in our Annual Report on Form 10-K for the year ended December 31, 2021. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

Cautionary Note Regarding Forward-Looking Statements

In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, The Gorman-Rupp Company provides the following cautionary statement: This Form 10-Q contains various forward-looking statements based on assumptions concerning The Gorman-Rupp Company's operations, future results and prospects. These forward-looking statements are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.





                                       21

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Such uncertainties include, but are not limited to, our estimates of future earnings and cash flows, general economic conditions and supply chain conditions and any related impact on costs and availability of materials, integration of the Fill-Rite business in a timely and cost effective manner, retention of supplier and customer relationships and key employees, the ability to achieve synergies and cost savings in the amounts and within the time frames currently anticipated and the ability to service and repay indebtedness incurred in connection with the transaction. Other factors include, but are not limited to: company specific risk factors including (1) loss of key personnel; (2) intellectual property security; (3) acquisition performance and integration; (4) impairment in the value of intangible assets, including goodwill; (5) defined benefit pension plan settlement expense; and (6) family ownership of common equity; and general risk factors including (7) continuation of the current and projected future business environment, including the duration and scope of the COVID-19 pandemic, the impact of the pandemic and actions taken in response to the pandemic? (8) highly competitive markets; (9) availability and costs of raw materials and labor; (10) cyber security threats; (11) compliance with, and costs related to, a variety of import and export laws and regulations; (12) environmental compliance costs and liabilities; (13) exposure to fluctuations in foreign currency exchange rates; (14) conditions in foreign countries in which The Gorman-Rupp Company conducts business; (15) changes in our tax rates and exposure to additional income tax liabilities; and (16) risks described from time to time in our reports filed with the Securities and Exchange Commission. Except to the extent required by law, we do not undertake and specifically decline any obligation to review or update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments or otherwise.

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