(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
20
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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.
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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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