Gorman-rupp Company (the) · NYSE:GRC
Gorman-rupp Company (the) — The Gorman-Rupp Company — Q4 2024 Earnings Presentation
51 slides from Gorman-rupp Company (the)'s earnings presentation, February 2025
Slide 1: Investor Presentation February 2025
INVESTOR PRESENTATION February 2025 FEBRUARY FEBRUARY2025 2025PRESENTATION PRESENTATION
Slide 2: Forward-Looking Statements
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 presentation contains various forward-looking statements based on assumptions concerning The G
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Leading designer and manufacturer of pumps and pump systems with over 90 years of experience Reputation for quality products and outstanding customer first service is a competitive advantage Highly diversified markets and products with significant presence in Fire Suppression,
Slide 4: Industry Overview
INDUSTRY OVERVIEW Pumps touch our daily lives: drinking water, wastewater, sewage, irrigation, appliance cooling, transportation, fuel, industrial products, chemicals, fire suppression, construction, HVAC Many specialized pumps – due to many specialized applications Very fragmented industry wi
Slide 5: Company History
COMPANY HISTORY 1933 - Company founded with $1,500 initial – and only – capital investment 1956 - First international expansion – established Canadian manufacturing facility 1968 - Publicly listed (American Stock Exchange NYSE MKT NYSE in 2017) 1988 - Acquired Patterson Pump Company, manufacture
Slide 6: Global Operations
GLOBAL OPERATIONS Mission Statement “To provide a quality product, competitively priced, delivered on time, backed by reliable service, at a profit that provides an equitable return to our shareholders, as well as providing our employees with competitive wages and benefits.” - J.C. Gorman and Herb R
Slide 7: Operating Model
OPERATING MODEL Treasury Quality products and Strategic Planning Corporate strong reputations Legal Acquisitions Insurance / Risk Management Customer focus – Capital Allocation External Reporting & taking care of Information Technology Compliance customers Employee Benefits I
Slide 8: Product Diversity
PRODUCT DIVERSITY FEBRUARY 2025 PRESENTATION 8
Slide 9: Market Diversity – By Design
MARKET DIVERSITY – BY DESIGN Gorman-Rupp Company Markets MARKETS • Industrial/Chemicals & HVAC Supply (19% - 21%) • Fire Suppression (19% - 22%) Refined Repair Parts Industrial / • Agriculture & Irrigation Supply (14% - 16%) Petroleum Chemicals & HVAC Supply • Municipal Water / Wastewater (12% - 15%
Slide 10: Industrial / Chemicals & HVAC Supply
INDUSTRIAL / CHEMICALS & HVAC SUPPLY (19% - 21%) Dependable pumps for manufacturing applications Pumps for moving waste streams, chemicals, viscous materials, and heating/cooling fluids HVAC pump market share expanding MARKET DRIVERS: Industrial construction, expansion and remodeling FEBRUARY
Slide 11: Fire Suppression
FIRE SUPPRESSION (19% - 22%) Booster pumps for sprinkler systems in large commercial structures Fire pumps are UL/FM Global approved and an industry standard Manufacturing facility in Ireland for increased capacity Domestic and international market leader MARKET DRIVERS: Commercial and indus
Slide 12: Agriculture & Irrigation
AGRICULTURE & IRRIGATION (14% - 16%) Irrigation pumps - strategically located branch locations across the U.S. Pumps for fuel transfer, animal waste, pit agitation, and liquid fertilizer MARKET DRIVERS: Grower cash flows from farm commodity prices and weather conditions FEBRUARY 2025 PRESENTATIO
Slide 13: Construction & Dewatering
CONSTRUCTION & DEWATERING (11% - 13%) Self-priming and vacuum prime-assisted centrifugal pumps for dewatering foundations, quarries, ditches and streams Diaphragm pumps to remove mud and sand-laden water at construction sites Rotory vane fuel transfer pumps, meters, and accessories for contrac
Slide 14: Municipal Water & Wastewater
MUNICIPAL WATER & WASTEWATER (12% - 15%) Pumps and wastewater stations Pre-engineered turn-key systems Custom design capabilities, above and below ground installation Booster pumps and deep-well line shaft pumps provide clean drinking water Municipal water and sewer funding is typically se
Slide 15: Large Custom Municipal Pumps
LARGE CUSTOM MUNICIPAL PUMPS Flood control pumps capable of pumping up to one million gallons per minute Numerous coastal flood protection installments Storm water management Wetland restoration MARKET DRIVERS: Infrastructure build and re-build; natural disasters FEBRUARY 2025 PRESENTATION 1
Slide 16: OEM
OEM (6% - 8%) OEM Pump supplier to a variety of manufacturers Range of applications from transportation, appliances, food processing, chemical processing and electronics Military applications MARKET DRIVERS: Growth and new products in numerous commercial, medical and retail sectors; power gene
Slide 17: Refined Petroleum
REFINED PETROLEUM (2% - 4%) Leader in aircraft refueler market Refinery and pipeline applications Vertical turbine pumps for barge loading and unloading American Petroleum Institute certified pumps Safe bulk handling of volatile fuels MARKET DRIVERS: Petroleum refinery production, storage
Slide 18: Repair Parts
REPAIR PARTS Most parts ship within 24 hours Consolidated 9% - 12% Large range by market and application – from 30% for Construction/Industrial to minimal for Fire Suppression Approximately 20% adjusted for markets with minimal repairs HOW LONG DO PUMPS LAST? Many Variables by Application Th
Slide 19: Divisions / Markets
DIVISIONS / MARKETS End Markets Industrial/Chemicals & HVAC Supply Fire Suppression Agriculture & Irrigation Supply Construction & Dewatering Municipal Water, Wastewater & Flood Control Refined Petroleum Original Equipment Manufacturer (OEM) FEBRUARY
Slide 20: International Distribution Capability
INTERNATIONAL DISTRIBUTION CAPABILITY International sales represent approximately 25% of total company sales annually 2024 Total International International Sales Sales Mix Mexico / South & Central America 18% Europe 29% $90 million $78 million Canada 24% Exported From USA Direct From Locations In
Slide 21: Competition
COMPETITION OCTOBER 2024 PRESENTATION 21
Slide 22: Notable Pump Competitors
NOTABLE PUMP COMPETITORS GORMAN-RUPP MARKETS Company Fire Suppression Municipal Flood Control Construction Agriculture Industrial Petroleum OEM XYLEM (XYL) – ($7.4B; Pumps/Services $4.8B, 65%) Flygt Goulds AC Fire Pump Bell & Gossettt Godwin Pumps Flow
Slide 23: Notable Pump Competitors
NOTABLE PUMP COMPETITORS GORMAN-RUPP MARKETS Company Fire Suppression Municipal Flood Control Construction Agriculture Industrial Petroleum OEM Pentair (PNR) – ($4.1B; 100% Flow/Pumps) Hydromatic Aurora Fairbanks Nijhuis Franklin Electric (FELE) – ($2.1B; Flow/Pum
Slide 24: Notable Pump Competitors
NOTABLE PUMP COMPETITORS GORMAN-RUPP MARKETS Company Fire Suppression Municipal Flood Control Construction Agriculture Industrial Petroleum OEM Hundreds of private companies/divisions Smith & Loveless Industrial Flow Solutions Thompson Pumps Zoeller Pumps Vaugha
Slide 25: Financial Summary
FINANCIAL SUMMARY OCTOBER 2024 PRESENTATION 25
Slide 26: Net Sales & Adjusted EPS
NET SALES & ADJUSTED EPS $700 $2.00 $1.80 $600 $1.60 $500 $1.40 $1.20 $400 Millions of Dollars (Adjusted EPS) $1.00 Dollars (Sales) $300 $0.80 $200 $0.60 $0.40 $100 $0.20 $0 $0.00 2020 2021 2022* 2023 2024 See appendix for non-GAAP reconciliations. Net Sales Adjusted EPS * Unusually high LIFO expens
Slide 27: Strong Adjusted EBITDA
STRONG ADJUSTED EBITDA $140 20.0% 18.0% $120 16.0% $100 14.0% Millions in Dollars 12.0% $80 % of Sales 10.0% $60 8.0% $40 6.0% 4.0% $20 2.0% $0 0.0% 2020 2021 2022 2023 2024 Adjusted EBITDA Adjusted EBITDA % of Sales See appendix for non-GAAP reconciliations. FEBRUARY 2025 PRESENTATION 27
Slide 28: Incoming & Backlog Trend
INCOMING & BACKLOG TREND Total Incoming Orders Backlog $300 $250 $200 Millions $150 $100 $50 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2022 2023 2024 Amounts include Fill-Rite as of June 2022. FEBRUARY 2025 PRESENTATION 28
Slide 29: Leverage Ratio
LEVERAGE RATIO Fill-Rite Acquisition 5.0 4.9 (Total debt net of excess cash / Adjusted EBITDA 4.7 4.5 4.4 4.2 Total Leverage Ratio 4.0 3.8 3.5 3.5 3.3 3.3 3.0 3.1 2.9 2.9 2.5 2.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2022 2023 2024 FEBRUARY 2025 PRESENTATION 29
Slide 30: Debt Refinancing
DEBT REFINANCING December 31, 2024 March 31, 2024 (in millions) Balance Terms Balance Terms Senior Term Loan $340.8 Due May 2029, SOFR+2.00% $319.4 Due May 2027, SOFR+2.25% Credit Facility - Due May 2029 - Due May 2027 6.40% Notes 30.0 Due May 2031, 6.4% - Subordinated Credit Facility - 90.0 Due Dec
Slide 31: Capital Allocation
CAPITAL ALLOCATION Historical Current Priorities Our capital expenditures are expected to be ~$20mm per year We expect to maintain our dividend practices while achieving our leverage target Continue to focus on deleveraging Leverage as of December 31, 2024 was 2.9X Once we delever, acquisi
Slide 32: History of Increasing Dividends
HISTORY OF INCREASING DIVIDENDS 300 Consecutive quarters of cash dividends 52 Consecutive years of increased cash dividends $0.70 $20.0 Among Top 50 U.S. Public Companies $18.0 $0.60 Current annualized rate $0.74 per share $16.0 1.9% yield as of 12/31/24 Annual Dividends Paid ($ Millions) $0.5
Slide 33: Q4 2024 P&L
Q4 2024 P&L Net sales of $162.7 million increased 1.3%, or $2.1 million, compared to the fourth quarter of 2023 Fourth quarter net income was $11.0 million, or $0.42 per share, compared to a net income of $9.0 million, or $0.34 per share, for the fourth quarter of 2023 Gross margin decreased 1
Slide 34: Year Ended December 31, 2024 P&L
YEAR ENDED DECEMBER 31, 2024 P&L Net sales of $659.7 million increased 0.1%, or $0.2 million, compared to 2023 Net income was $40.1 million, or $1.53 per share, compared to net income of $35.0 million, or $1.34 per share, in 2023 o Adjusted earnings per share1 for 2024 and 2023 were $1.75 and $1
Slide 35: Balance Sheet
BALANCE SHEET Total debt decreased $43.0 million during 2024 ($ in millions) December 31, December 31, December 31, December 31, 2024 2023 2024 2023 ASSETS LIABILITIES & SHAREHOLDERS’ EQUITY Cash and cash equivalents $24.2 $30.5 Current portion of long-term debt $18.5 $21.9 Accounts receivable, ne
Slide 36: Strategic Pillars
STRATEGIC PILLARS OCTOBER 2024 PRESENTATION 36
Slide 37: Pillars for Growth
PILLARS FOR GROWTH “We take care of our customers or someone else will” High-Performing Operational Organic Growth Acquisitions Culture Excellence • Focus on customers • Expand market share • High quality products • Pumps, pumping related equipment • Profit sharing • Benefit from • Product availabil
Slide 38: High-Performing Culture
HIGH-PERFORMING CULTURE High- Performing Culture Employees empowered to take care of customers Organic Growth Acquisitions Profit sharing at all levels of the organization drives owner like behavior Operational Excellence Employee development and training results in promote-from-within culture
Slide 39: Expand Market Share
EXPAND MARKET SHARE Organic Growth High value of retained customers – service, repairs and replacements Operational Excellence High Performing Culture Well positioned for infrastructure opportunities: Acquisitions Replacement/upgrades to aging U.S. infrastructure Infrastructure bill investme
Slide 40: New Product Development
NEW PRODUCT DEVELOPMENT Organic Growth Industry leading team of experienced engineers providing solutions to complex Operational High Excellence Performing problems through project-specific engineering and new product development Culture Acquisitions New products focused on: Continued advancem
Slide 41: Customer Training and Education
CUSTOMER TRAINING AND EDUCATION Organic Growth Operational High Excellence Performing Culture Acquisitions Customer visits Increased use and plant tours of technology are part of sales to deliver process virtual training Long history of In-house Mobile training product training and equipment educati
Slide 42: International Growth
INTERNATIONAL GROWTH Organic Growth Well positioned international facilities provide for local customization Operational Excellence High Performing Culture Capacity for growth-leverage existing GRC footprint Acquisitions Gorman-Rupp Canada Gorman-Rupp Africa Gorman-Rupp Europe Gorman-Rupp Belgiu
Slide 43: Operational Excellence
OPERATIONAL EXCELLENCE Operational Excellence High quality products – designed, engineered, manufactured, and tested Acquisitions Organic Growth We hold #1 market share positions in many of the markets where we operate High- Performing Culture Well established and knowledgeable distribution ne
Slide 44: History of Growth Through Acquisitions
HISTORY OF GROWTH THROUGH ACQUISITIONS Acquisitions Gorman-Rupp has successfully grown through acquisitions Operational High- Performing Excellence Culture Approach to acquisitions remains disciplined and selective Organic Growth Acquisitions since 2010: Year Company Locations Key Markets 2010 N
Slide 45: Disciplined Acquisition Criteria
DISCIPLINED ACQUISITION CRITERIA Acquisitions Criteria Preferences Operational High- Excellence Performing Pumps, pumping related equipment and systems that complement Culture Products Organic existing product lines Growth Chemical / Fuels HVAC Municipal OEM Markets Alternative Energy
Slide 46: Investment Highlights
INVESTMENT HIGHLIGHTS Leading designer and manufacturer of pumps and pump systems with over 90 years of experience Reputation for quality products and outstanding customer first service is a competitive advantage Highly diversified markets and products with significant presence in Fire Suppression,
Slide 47: Bios
BIOS Scott A. King, President and Chief Executive Officer Scott was promoted to Chief Executive Officer in January 2022 in addition to his role as President. He served as President and Chief Operating Officer from January 2021 to December 2021. Prior to that he was Vice President and Chief Operating
Slide 48: Appendix: Non-GAAP Measures
APPENDIX The Gorman-Rupp Company Non-GAAP Measures This presentation 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, referred to as “Adjusted EBITDA”. Adjusted e
Slide 49: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended Year ended December 31, December 31, 2024 2023 2024 2023 Net Income – GAAP basis $11.0 $9.0 $40.1 $35.0 Amortization of acquired customer backlog - - - 0.8 Write-off of unamortized deferred debt financing fees - - 3.5 - Refinancing Costs - - 2.4 - Adjusted
Slide 50: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months Year ended ended December 31, December 31, 2024 2023 2024 2023 Adjusted earnings before interest, taxes, depreciation and amortization: Reported net income – GAAP basis $11.0 $9.0 $40.1 $34.9 Interest expense 6.7 10.1 33.6 41.3 Provision for income taxes 2.7 2.3
Slide 51: OCTOBER 2024 PRESENTATION
OCTOBER 2024 PRESENTATION 51
The Gorman-Rupp Company — Q4 2024 Earnings Presentation on 6ix