Special to 1812Blockhouse
The Gorman-Rupp Company (NYSE: GRC) reports financial results for the first quarter ended March 31, 2025.
First Quarter 2025 Highlights
- Net sales of $163.9 million increased 2.9%, or $4.7 million, compared to the first quarter of 2024
- First quarter net income was $12.1 million, or $0.46 per share, compared to net income of $7.9 million, or $0.30 per share, for the first quarter of 2024
- Adjusted EBITDA1 of $29.7 million for the first quarter of 2025 increased $1.5 million, or 5.3%, from $28.2 million for the first quarter of 2024
- Total debt decreased $14.6 million during the quarter
Net sales for the first quarter of 2025 were $163.9 million compared to net sales of $159.3 million for the first quarter of 2024, an increase of 2.9% or $4.7 million.
Sales increased $1.8 million in the municipal market and $3.2 million in the repair market due to water and wastewater projects related to increased infrastructure investment. Sales also increased $2.5 million in the OEM market due to an increase in various OEM applications, $1.0 million in the petroleum market, and $0.7 million in the fire suppression market. These increases were partially offset by sales decreases of $2.7 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 agriculture market, and $0.9 million in the industrial market.
Gross profit was $50.3 million for the first quarter of 2025, resulting in gross margin of 30.7%, compared to gross profit of $48.4 million and gross margin of 30.4% for the same period in 2024. The increase in gross margin was primarily driven by the realization of selling price increases partially offset by increased labor and overhead expenses.
Selling, general and administrative (“SG&A”) expenses were $25.1 million and 15.3% of net sales for the first quarter of 2025 compared to $24.9 million and 15.6% of net sales for the same period in 2024.
Operating income was $22.1 million for the first quarter of 2025, resulting in an operating margin of 13.5%, compared to operating income of $20.4 million and an operating margin of 12.8% for the same period in 2024. Operating margin increased 70 basis points compared to the same period in 2024 due to the realization of selling price increases and SG&A leverage partially offset by increased labor and overhead expenses.
Interest expense was $6.2 million for the first quarter of 2025 compared to $10.1 million for the same period in 2024. The decrease in interest expense was due primarily to the series of refinancing transactions the Company completed on May 31, 2024 as well as a decrease in outstanding debt.
Net income was $12.1 million, or $0.46 per share, for the first quarter of 2025 compared to net income of $7.9 million, or $0.30 per share, in the first quarter of 2024.
Adjusted EBITDA1 was $29.7 million for the first quarter of 2025 compared to $28.2 million for the first quarter of 2024.
The Company’s backlog of orders was $217.8 million at March 31, 2025 compared to $234.2 million at March 31, 2024 and $206.0 million at December 31, 2024. Incoming orders for the first quarter of 2025 were $177.7 million, a decrease of 0.7%, or $1.2 million, compared to record incoming orders for the first quarter of 2024.
Net cash provided by operating activities for the first three months of 2025 was $21.1 million compared to $10.7 million for the same period in 2024 driven by increased net income and an increase in commissions payable and accrued expenses during the three month period ended March 31, 2025 compared to the same period last year. Capital expenditures for the first three months of 2025 were $3.0 million and consisted primarily of machinery and equipment. Capital expenditures for the full-year 2025 are presently planned to be approximately $20.0 million. Total debt decreased $14.6 million during the first three months of 2025.
Scott A. King, President and CEO, commented, “Continued strength in our incoming orders throughout the quarter resulted in a year over year increase in sales as well as an increase in backlog from year-end. We continued to see a positive trend in our municipal market as our quality products and engineering expertise allow us to benefit from infrastructure spending including the strong demand for flood control and storm water management. We leveraged our sales growth to improve operating income, which along with significant savings in interest expense, resulted in a 53% increase in earnings per share for the quarter compared to last year. Although we benefit from a primarily U.S. based supply chain, we continue to monitor the impact of tariffs and believe we will be able to mitigate the impact through product pricing and supply arrangements. We remain optimistic about our full year outlook and are focused on delivering profitable growth.”
About The Gorman-Rupp Company
Founded in 1933, The Gorman-Rupp 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.
Source: Business Wire
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