GORMAN RUPP CO

Previous wording

The Company’s backlog of orders was $234.2 million at September 30, 2025 compared to $206.0 million at December 31, 2024, and $207.8 million at September 30, 2024. Incoming orders for the first nine months of 2025 were $550.2 million, or an increase of 10.9%, compared to the same period in 2024.

Current wording

Incoming orders for the first three months of 2026 were $187.5 million, or an increase of 5.5%, compared to the same period in 2025. The Company’s backlog of orders was $247.9 million at March 31, 2026 compared to $217.8 million at March 31, 2025 and $244.0 million at December 31, 2025.

Previous wording

On October 23, 2025, the Board of Directors authorized the payment of a quarterly dividend of $0.19 per share on the common stock of the Company, payable December 10, 2025, to shareholders of record as of November 14, 2025. This will mark the 303 rd consecutive quarterly dividend paid by The Gorman-Rupp Company.

Current wording

On April 23, 2026, the Board of Directors authorized the payment of a quarterly dividend of $0.19 per share on the common stock of the Company, payable June 10, 2026, to shareholders of record as of May 15, 2026. This will mark the 305 th consecutive quarterly dividend paid by The Gorman-Rupp Company.

Previous wording

Net sales for the third quarter of 2025 were $172.8 million compared to net sales of $168.2 million for the third quarter of 2024, an increase of 2.8% or $4.6 million.

Current wording

Net sales for the first quarter of 2026 were $176.6 million compared to net sales of $163.9 million for the first quarter of 2025, an increase of 7.7%, or $12.7 million. The increase was driven by volume growth as well as pricing increases which averaged approximately 3.0% in both 2025 and 2026.

Previous wording

Sales increased in the majority of our markets, including an increase of $5.3 million in the industrial market primarily due to increased demand related to data centers, as well as an increase of $2.1 million in the municipal market due to water and wastewater projects related to increased infrastructure investment. Sales also increased $2.0 million in the agriculture market, $0.7 million in the OEM market, and $0.4 million in the fire suppression market. These increases were partially offset by sales decreases of $4.6 million in the construction market due to a general slow down in construction activity including sales into the rental market, $0.9 million in the petroleum market, and $0.4 million in the repair market.

Current wording

Sales increased in the majority of our markets, including increases of $6.3 million in the construction market due to increased demand in mining and sales of rental equipment, $4.4 million in the agriculture market due to broad based improvement across Fill-Rite's sale channels, $3.5 million in the industrial market due to increased domestic investment, $2.9 million in the municipal market due to increased water and wastewater projects related to infrastructure investment, and $1.7 million in the OEM market due to increased demand related to data centers. These increases were partially offset by a sales decrease of $5.5 million in the fire suppression market primarily due to reduced international shipments. Sales also decreased $0.3 million in the petroleum market and $0.3 million in the repair market.

Previous wording

Gross profit was $156.8 million for the first nine months of 2025, resulting in gross margin of 30.4%, compared to gross profit of $155.1 million and gross margin of 31.2% for the same period in 2024. Gross profit for the first nine months of 2025 included $2.7 million of facility optimization costs. The 80 basis point decrease in gross margin was driven by 50 basis points in facility optimization costs, a 20 basis point increase in cost of material, primarily driven by increased LIFO expense, and a 10 basis point increase in labor and overhead expenses as a percentage of net sales.

Current wording

Gross profit was $57.4 million for the first quarter of 2026, resulting in gross margin of 32.5%, compared to gross profit of $50.3 million and gross margin of 30.7% for the same period in 2025. The 180 basis point increase in gross margin was driven by a 100 basis point improvement in labor and overhead leverage from increased sales and an 80 basis point improvement in cost of material due in part to favorable product mix.

Previous wording

Selling, general and administrative (“SG&A”) expenses were $25.9 million and 15.0% of net sales for the third quarter of 2025 compared to $25.7 million and 15.3% of net sales for the same period in 2024. The increase in SG&A costs was driven by $0.3 million of facility optimization costs.

Current wording

Selling, general and administrative (“SG&A”) expenses were $26.8 million and 15.2% of net sales for the first quarter of 2026 compared to $25.1 million and 15.3% of net sales for the same period in 2025. SG&A expenses increased due to higher advertising expenses related to trade show activity as well as increased freight out costs driven by increased sales.

Previous wording

Operating income was $21.5 million for the third quarter of 2025, resulting in an operating margin of 12.4%, compared to operating income of $23.9 million and an operating margin of 14.2% for the same period in 2024. Operating income for the third quarter of 2025 included $3.0 million of facility optimization costs. The 180 basis point decrease in operating margin compared to the same period in 2024 was driven by 170 basis points in facility optimization costs and 50 basis points due to increased cost of material, labor, and overhead, partially offset by 40 basis points of improved leverage on SG&A expenses due to increased sales.

Current wording

Operating income was $27.5 million for the first quarter of 2026, resulting in an operating margin of 15.6%, compared to operating income of $22.1 million and an operating margin of 13.5% for the same period in 2025. The 210 basis point increase in operating margin was driven by improved leverage on labor, overhead, and SG&A expenses due to increased sales and favorable product mix.

Previous wording

Interest expense was $5.8 million for the third quarter of 2025 compared to $7.8 million for the same period in 2024. The decrease in interest expense was due primarily to a decrease in outstanding debt.

Current wording

Interest expense was $5.0 million for the first quarter of 2026 compared to $6.2 million for the same period in 2025. The decrease in interest expense was due primarily to a decrease in outstanding debt.

Previous wording

This Quarterly Report on Form 10-Q includes certain non-GAAP financial data and measures such as adjusted earnings, adjusted earnings per share, and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted earnings is earnings excluding the write-off of unamortized previously deferred debt financing fees, refinancing costs, and facility optimization costs. Adjusted earnings per share is earnings per share excluding the write-off of unamortized previously deferred debt financing fees per share, refinancing costs per share, and facility optimization costs per share. Adjusted earnings before interest, taxes, depreciation and amortization is net income (loss) excluding interest, taxes, depreciation and amortization, adjusted to exclude the write-off of unamortized previously deferred debt financing fees, refinancing costs, facility optimization costs, and non-cash LIFO expense. 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. Further, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon whether they elect to utilize LIFO and depending upon which method they may elect. 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 and liquidity 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, adjusted earnings per share, and adjusted EBITDA to their respective corresponding GAAP financial measures, which includes a description of actual adjustments made in the current period and the corresponding prior period.

Current wording

The discussion of Results of Operations above includes certain non-GAAP financial data and measures such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted earnings before interest, taxes, depreciation and amortization is net income (loss) excluding interest, taxes, depreciation and amortization, adjusted to exclude non-cash LIFO expense. 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. Further, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon whether they elect to utilize LIFO and depending upon which LIFO method they may elect. 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 and liquidity 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 EBITDA to its corresponding GAAP financial measure, which includes a description of actual adjustments made in the current period and the corresponding prior period.

Previous wording

Our primary sources of liquidity are cash generated from operations and borrowings under our Credit Facility. Cash and cash equivalents totaled $42.9 million at September 30, 2025. The Company had an additional $99.4 million available under the revolving credit facility after deducting $0.6 million in outstanding letters of credit primarily related to customer orders. 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 at least the next 12 months.

Current wording

Our primary sources of liquidity are cash generated from operations and borrowings under our Credit Facility. Cash and cash equivalents totaled $29.9 million at March 31, 2026. The Company had an additional $99.6 million available under the revolving credit facility after deducting $0.4 million in outstanding letters of credit primarily related to customer orders. 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 financial covenants, for at least the next 12 months. The Company has made payments on the Senior Term Loan Facility in excess of the required minimum installment payments and, as a result, has no required quarterly installment payments due on the Senior Term Loan Facility within the next 12 months.

Previous wording

As of September 30, 2025, the Company had $325.8 million in total debt outstanding with $295.8 million due in 2029 and $30.0 million due in 2031. The Company was in compliance with its debt covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios, at September 30, 2025 and December 31, 2024. See “Note 9 – Financing Arrangements” in the Notes to Consolidated Financial Statements included in this Form 10-Q for a further description of our outstanding debt.

Current wording

As of March 31, 2026, the Company had $295.8 million in total debt outstanding with $265.8 million due in 2029 and $30.0 million due in 2031. The Company was in compliance with its debt covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios, at March 31, 2026 and December 31, 2025. See “Note 9 – Financing Arrangements” in the Notes to Consolidated Financial Statements included in this Form 10-Q for a further description of our outstanding debt.

Previous wording

Capital expenditures for the first nine months of 2025 were $12.5 million and consisted primarily of machinery and equipment. Capital expenditures for the full-year 2025 are presently planned to be approximately $20.0 million primarily for machinery and equipment, and are expected to be financed through cash from operations.

Current wording

Capital expenditures for the first quarter of 2026 were $4.3 million consisting of machinery and equipment and a building. Capital expenditures for the full-year 2026 are presently planned to be approximately $22.0 - $24.0 million primarily for machinery and equipment, and are expected to be financed through cash from operations.

Previous wording

On October 23, 2025, the Board of Directors authorized the payment of a quarterly dividend of $0.19 per share on the common stock of the Company, payable December 10, 2025, to shareholders of record as of November 14, 2025. This will mark the 303 rd 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.

Current wording

On April 23, 2026, the Board of Directors authorized the payment of a quarterly dividend of $0.19 per share on the common stock of the Company, payable June 10, 2026, to shareholders of record as of May 15, 2026. This will mark the 305 th 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.

Previous wording

The increase in cash provided by operating activities in the first nine months of 2025 compared to the same period last year was primarily due to increased net income and an increase in operating liabilities during the nine months ended September 30, 2025 compared to the same period last year.

Current wording

The increase in cash provided by operating activities in the first three months of 2026 compared to the same period last year was primarily due to increased net income partially offset by increased working capital for the three month period ended March 31, 2026 compared to the same period last year.

Previous wording

During the first nine months of 2025, investing activities of $12.4 million consisted primarily of capital expenditures for machinery and equipment. During the first nine months of 2024, investing activities of $8.0 million consisted of $10.3 million for capital expenditures primarily for machinery and equipment partially offset by $2.3 million in proceeds from the sale of property, plant, and equipment.

Current wording

During the first three months of 2026, investing activities included $4.3 million of capital expenditures for machinery and equipment and a building. During the first three months of 2025, investing activities of $3.0 million consisted of capital expenditures primarily for machinery and equipment.

Previous wording

Net cash used for financing activities of $60.8 million for the first nine months of 2025 primarily consisted of net payments on bank borrowings of $45.0 million, dividend payments of $14.6 million, and $1.2 million of payments in the surrender of common shares to cover taxes upon the vesting of stock awards. Net cash used for financing activities of $43.6 million for the first nine months of 2024 primarily consisted of net payments on bank borrowings of $28.4 million and dividend payments of $14.2 million.

Current wording

Net cash used for financing activities of $22.7 million for the first three months of 2026 primarily consisted of net payments on bank borrowings of $15.0 million, dividend payments of $5.0 million, and $2.6 million of payments in the surrender of common shares to cover taxes upon the vesting of stock awards. Net cash used for financing activities of $20.6 million for the first three months of 2025 primarily consisted of net payments on bank borrowings of $14.6 million, dividend payments of $4.9 million, and $1.1 million of payments in the surrender of common shares to cover taxes upon the vesting of stock awards.

Previous wording

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, retention of supplier and customer relationships and key employees, and the ability to service and repay indebtedness. Other factors include, but are not limited to: company specific risk factors including (1) loss of key personnel; (2) intellectual property security; (3) growth through acquisitions; (4) the Company’s indebtedness and how it may impact the Company’s financial condition and the way it operates its business; (5) acquisition performance and integration; (6) impairment in the value of intangible assets, including goodwill; (7) defined benefit pension plan settlement expense; (8) LIFO inventory method; and (9) family ownership of common equity; and general risk factors including (10) continuation of the current and projected future business environment; (11) highly competitive markets; (12) availability and costs of raw materials and labor; (13) cybersecurity threats; (14) artificial intelligence risk and challenges that can impact our business; (15) compliance with, and costs related to, a variety of import and export laws and regulations; (16) the impact of U.S. trade policy, including resulting tariffs; (17) environmental compliance costs and liabilities; (18) exposure to fluctuations in foreign currency exchange rates; (19) conditions in foreign countries in which The Gorman-Rupp Company conducts business; (20) changes in our tax rates and exposure to additional income tax liabilities; and (21) risks described from time to time in our reports filed with the Securities and Exchange

Current wording

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, retention of supplier and customer relationships and key employees, and the ability to service and repay indebtedness. Other factors include, but are not limited to: company specific risk factors including (1) loss of key personnel; (2) intellectual property security; (3) growth through acquisitions; (4) the Company’s indebtedness and how it may impact the Company’s financial condition and the way it operates its business; (5) impairment in the value of intangible assets, including goodwill; (6) defined benefit pension plan settlement expense; (7) LIFO inventory method; and (8) family ownership of common equity; and general risk factors including (9) continuation of the current and projected future business environment; (10) highly competitive markets; (11) availability and costs of raw materials and labor; (12) cybersecurity threats; (13) artificial intelligence risk and challenges that can impact our business; (14) compliance with, and costs related to, a variety of import and export laws and regulations; (15) the impact of U.S. trade policy, including resulting tariffs; (16) environmental compliance costs and liabilities; (17) exposure to fluctuations in foreign currency exchange rates; (18) conditions in foreign countries in which The Gorman-Rupp Company conducts business; (19) changes in our tax rates and exposure to additional income tax liabilities; and (20) 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.