Gorman Rupp Co 8-K/A, filed Aug 15, 2022

Gorman Rupp Co (GRC)

8-K/A 2022-08-15 For: 2022-05-31

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Added on April 08, 2026

About this 8-K/A

Gorman Rupp Co filed this 8-K/A on August 15, 2022, reporting on events of May 31, 2022.

Items reported

Item 9.01: Financial statements and exhibits

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600 South Airport Road, Mansfield, Ohio		44903
(Address of principal executive offices)		(Zip Code)


Exhibit Number		Description

23.1		Consent of RSM US LLP

99.1		Historical audited financial statements of the Acquired Business as of and for the year ended December 31, 2021 and 2020

99.2		Historical unaudited financial statements of the Acquired Business as of and for the three-months ended March 31, 2022 and 2021

99.3		Unaudited pro forma combined financial information of the Company and the Acquired Business as of and for the three-months ended March 31, 2022 and for the year ended December 31, 2021

104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)


THE GORMAN-RUPP COMPANY

By:		/s/ Brigette A. Burnell
Name:		Brigette A. Burnell
Title:		Executive Vice President, General Counsel and Corporate Secretary


Independent auditor’s report	1-2

Financial statements

Combined balance sheets		3

Combined statements of operations		4

Combined statements of changes in Parent Company net investment		5

Combined statements of cash flows		6

Notes to combined financial statements		7-16


	2021		2020
Assets
Current assets:
Accounts receivable, net	$	18,287	$	17,186
Inventories		6,571		6,715
Prepaid expenses and other		625		347

Total current assets		25,483		24,248

Property, plant and equipment:
Land and improvements		1,743		1,642
Buildings		7,179		6,991
Machinery, equipment and other		41,003		39,326
Construction in progress		1,970		2,307

		51,895		50,266
Less accumulated depreciation		38,720		35,666

Total property, plant and equipment, net		13,175		14,600

Other assets:
Goodwill		2,865		2,865
Intangible assets, net		844		815

Total other assets		3,709		3,680

Total assets	$	42,367	$	42,528

Liabilities and Parent Company Net Investment
Current liabilities:
Accounts payable and accrued expenses	$	12,984	$	10,447
Accrued compensation and related expenses		2,219		1,907

Total current liabilities		15,203		12,354

Deferred income taxes, net		1,325		1,219

Parent Company net investment		25,839		28,955

Total liabilities and Parent Company net investment	$	42,367	$	42,528


	2021			2020
Net sales	$	132,683		$	123,616

Costs of good sold:
Cost of goods sold		88,791			80,137
Engineering expenses		2,052			2,192

		90,843			82,329

Gross profit		41,840			41,287
Selling, general and administrative expenses:
Selling expenses		9,224			9,072
General and administrative expenses		14,241			15,060

		23,465			24,132

Operating income		18,375			17,155

Other (expense) income:
Other, net		(4	)		11

		(4	)		11

Income before income taxes		18,371			17,166
Provision for income taxes		3,845			3,625

Net income	$	14,526		$	13,541


Balance, December 31, 2019	$	24,034
Net income		13,541
Net transfers to Parent		(8,620	)

Balance, December 31, 2020		28,955
Net income		14,526
Net transfers to Parent		(17,642	)

Balance, December 31, 2021	$	25,839


	2021			2020
Cash flows from operating activities:
Net income	$	14,526		$	13,541
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,016			4,020
Deferred income taxes		106			658
Changes in assets and liabilities:
Accounts receivable		(1,101	)		(2,898	)
Inventories		144			(1,483	)
Prepaid expenses and other		(278	)		22
Accounts payable and accrued expenses		2,537			3,012
Accrued compensation and related expenses		312			(7	)

Net cash provided by operating activities		20,262			16,865

Cash flows from investing activities:
Additions to property, plant and equipment		(2,493	)		(8,010	)
Purchase of intangible assets		(127	)		(235	)

Net cash used in investing activities		(2,620	)		(8,245	)

Cash flows from financing activities:
Net transfers to Parent		(17,642	)		(8,620	)

Net cash used in financing activities		(17,642	)		(8,620	)

Net change in cash and cash equivalents		—			—
Cash and cash equivalents:
Beginning		—			—

Ending	$	—		$	—


Warranty accruals—December 31, 2019	$	554
Payments made		(1,207	)
Increase to provision		1,367

Warranty accruals—December 31, 2020		714
Payments made		(953	)
Increase to provision		918

Warranty accruals—December 31, 2021	$	679


	2021			2020
Inventories on a FIFO basis:
Raw materials	$	5,581		$	6,432
Finished goods		3,200			2,411

		8,781			8,843
Less allowance to adjust carrying values of inventories to LIFO method		(2,210	)		(2,128	)

	$	6,571		$	6,715


	2021		2020
Trade payables	$	8,824	$	6,379
Accrued rebates		2,830		2,226
Accrued warranty		679		714
Other accrued expenses		651		1,128

	$	12,984	$	10,447


	2021		2020
Current:
U.S. federal	$	3,325	$	2,494
State		414		473
Deferred:
United States		38		639
State		68		19

	$	3,845	$	3,625


	2021			2020
Deferred tax assets:
Accrued expenses	$	19		$	240
Other		169			234

		188			474
Deferred tax liabilities:
Property and equipment		1,513			1,693

		1,513			1,693

Net deferred tax liability	$	(1,325	)	$	(1,219	)


	2021			2020
At statutory rate	$	3,858		$	3,605
State income taxes		356			329
Permanent differences		(356	)		(161	)
Other		(13	)		(148	)

	$	3,845		$	3,625



Financial statements

Unaudited condensed combined balance sheets			1

Unaudited condensed combined statements of operations			2

Unaudited condensed combined statements of changes in Parent Company net investment			3

Unaudited condensed combined statements of cash flows			4

Notes to unaudited condensed combined financial statements			5-11


Years ended December 31,
2022	$	738
2023		540
2024		488
2025		205

	$	1,971


	March 31, 2022		December 31, 2021
Assets
Current assets:
Accounts receivable, net	$	22,931	$	18,287
Inventories		8,369		6,571
Prepaid expenses and other		656		625

Total current assets		31,956		25,483

Property, plant and equipment:
Land and improvements		1,743		1,743
Buildings		7,179		7,179
Machinery, equipment and other		41,003		41,003
Construction in progress		2,382		1,970

		52,307		51,895
Less accumulated depreciation		39,824		38,720

Total property, plant and equipment, net		12,483		13,175

Other assets:
Goodwill		2,865		2,865
Intangible assets, net		845		844

Total other assets		3,710		3,709

Total assets	$	48,149	$	42,367

Liabilities and Parent Company Net Investment
Current liabilities:
Accounts payable and accrued expenses	$	14,787	$	12,984
Accrued compensation and related expenses		2,118		2,219

Total current liabilities		16,905		15,203

Deferred income taxes, net		1,059		1,325
Parent Company net investment		30,185		25,839

Total liabilities and Parent Company net investment	$	48,149	$	42,367


	Total Members’ Equity
Balance, January 1, 2021	$	28,955
Net income		3,596
Net transfers to Parent		(3,920	)

Balance, March 31, 2021	$	28,631

Balance, January 1, 2022	$	25,839
Net income		4,862
Net transfers to Parent		(516	)

Balance, March 31, 2022	$	30,185


Warranty accruals—December 31, 2020	$	699
Payments made		(366	)
Increase to provision		346

Warranty accruals—March 31, 2021	$	679

Warranty accruals—December 31, 2021	$	678
Payments made		(420	)
Increase to provision		396

Warranty accruals—March 31, 2022	$	654


	The Gorman- Rupp Company (Historical)			Tuthill Transfer Systems (Historical)		Reclassification (Note 4b)			Tuthill Transfer Systems (Adjusted Historical)		Transaction Accounting Adjustments			Notes		Other Transaction Accounting Adjustments			Notes		Pro forma Condensed Combined
Assets
Current assets:
Cash and cash equivalents	$	122,686		$	—	$	—		$	—	$	(526,301	)		5	$	429,765			9	$	26,150
Accounts receivable, net		67,711			22,931		—			22,931		(1,538	)		5, 6a		(120	)		6a		88,984
Inventories, net		89,974			8,369		—			8,369		3,733			5, 6a		(109	)		6a		101,967
Prepaid and other		8,314			656		—			656		410			5, 6a		8,364			6a, 7d, 7f		17,744

Total Current assets		288,685			31,956					31,956		(523,696	)				437,900					234,845
Property, plant and equipment, net		104,238			12,483		—			12,483		12,022			5, 6b		(5,525	)		7a		123,218
Other assets		5,470			—		—			—		2,600			5, 6c		1,704			4a, 6e, 7b, 7d		9,774
Goodwill and other intangible assets, net		32,925			3,710		—			3,710		476,415			5, 6c, 6d		(15,044	)		7b		498,006

Total assets	$	431,318		$	48,149	$	—		$	48,149	$	(32,659	)			$	419,035				$	865,843

Liabilities and equity
Current liabilities:
Trade and other payables	$	41,674		$	—	$	12,242		$	12,242		(2,741	)		5, 6g	$	—				$	51,175
Accounts payable and accrued expenses					14,787		(14,787	)		—		—					—					—
Deferred revenue and customer deposits		10,434			—		—			—		—					—					10,434
Current portion of long-term debt										—		—					17,208			6e		17,208
Accrued compensation and related		—			2,118		(2,118	)		—		—					—					—
Accrued expenses		7,401			—		4,663			4,663		1,166			5, 6f		38,133			4a, 6a, 6f, 7c, 7e		51,363

Total Current liabilities		59,509			16,905		—			16,905		(1,575	)				55,341					130,180
Deferred income taxes, net		—			1,059		—			1,059		(1,059	)		6g		—					—
Pension and post retirement benefits		36,866			—		—			—		—					—					36,866
Long-term debt, net of current portion		—			—		—			—		—					418,076			6e		418,076
Other long-term liabilities		1,709			—		—			—		—					1,040			4a		2,749

Total liabilities		98,084			17,964		—			17,964		(2,634	)				474,457					587,871

Equity:
Common shares without par value:
Authorized - 35,000,000 shares
Outstanding - 26,079,115 shares at March 31, 2021 and 26,103,661 shares at December 31, 2021 (net of treasury shares of 969,681 and 945,135 shares, respectively)		5,094			—		—			—							—					5,094
Parent Company net investment		—			30,185		—			30,185		(30,025	)		5		(160	)		5, 6a, 6b, 6c, 6e, 7c, 7d, 7e, 7f, 7g		—
Additional paid-in capital		1,698			—		—			—		—										1,698
Retained earnings		356,385			—		—			—		—					(55,262	)		5, 6a, 6e, 7a, 7b, 7c, 7d, 7f, 7g		300,963
Accumulated other comprehensive loss		(29,943	)		—		—			—		—					—					(29,943	)

Total equity		333,234			30,185		—			30,185		(30,025	)				(55,422	)				277,972

Total liabilities and equity	$	431,318		$	48,149	$	—		$	48,149	$	(32,659	)			$	419,035				$	865,843


	The Gorman- Rupp Company (Historical)		Tuthill Transfer Systems (Historical)		Reclassification (Note 4c)			Tuthill Transfer Systems (Adjusted Historical)		Other Transaction Accounting Adjustments			Notes	Pro forma Condensed Combined
Net sales	$	102,167	$	41,289	$	(322	)	$	40,967					$	143,134
Cost of products sold		76,670		27,422		—			27,422		1		7a		104,093

Gross profit		25,497		13,867		(322	)		13,545		(1	)			39,041
Selling, general and administrative expenses		16,039		7,679		(322	)		7,357		211		7b, 7d, 7e, 7g		23,607

Operating income		9,458		6,188		—			6,188		(212	)			15,434
Other (expense) income, net		90		4		—			4		(6,966	)	6e, 7c		(6,872	)

Income before income taxes		9,548		6,192		—			6,192		(7,178	)			8,562
Provision for income tax expense (benefit)		2,005		1,330		—			1,330		(1,537	)	7f		1,798

Net income	$	7,543	$	4,862	$	—		$	4,862	$	(5,641	)		$	6,764

Weighted-average earnings per share of common stock, basic and diluted	$	0.29											8	$	0.26
Weighted average number of shares outstandings		26,090,963													26,090,963


	The Gorman- Rupp Company (Historical)			Tuthill Transfer Systems (Historical)			Reclassification (Note 4c)			Tuthill Transfer Systems (Adjusted Historical)			Other Transaction Accounting Adjustments			Notes		Pro Forma Condensed Combined
Net sales	$	378,316		$	132,683		$	(928	)	$	131,755							$	510,071
Cost of products sold		282,419			90,843			—			90,843			4,313			6a, 7a, 7b, 7g		377,575

Gross profit		95,897			41,840			(928	)		40,912			(4,313	)				132,496
Selling, general and administrative		56,541			23,465			(928	)		22,537			12,612			6a, 7b, 7d, 7e, 7g		91,690

Operating income		39,356			18,375			—			18,375			(16,925	)				40,806
Other (expense) income, net		(2,108	)		(4	)					(4	)		(27,864	)		6e, 7c		(29,976	)

Income before income taxes		37,248			18,371						18,371			(44,789	)				10,830
Provision for income tax expense (benefit)		7,397			3,845						3,845			(9,076	)		7f		2,166

Net income	$	29,851		$	14,526		$	—		$	14,526		$	(35,713	)			$	8,664

Weighted-average earnings per share of common stock, basic and diluted	$	1.14															8	$	0.33
Weighted average number of shares		26,119,376																	26,119,376


Description	Financial Statement Caption	As at March 31, 2022
Recognition of right-of-use assets and related lease obligation of operating leases acquired	Other Assets - Right of use (“ROU”) lease assets	$	1,560

	Accrued expenses	$	520
	Other long-term liabilities	$	1,040


Presentation in Tuthill Transfer Systems’ Balance Sheet	Presentation in unaudited pro forma condensed combined statement of income		Reclassifications Three months ended March 31, 2022
*Current Liabilities*
Accounts payable and accrued expenses		Trade and other payables	$	10,124
Accounts payable and accrued expenses		Accrued expenses	$	4,663
Accrued compensation and other related expenses		Trade and other payables	$	2,118


Presentation in Tuthill Transfer Systems’ Statement of Income	Presentation in unaudited pro forma condensed combined statement of income		Reclassifications Three months ended March 31, 2022			Reclassifications Year ended December 31, 2021
*Selling, General and Administrative Expenses*
Discounts		Net sales	$	(50	)	$	(135	)
Customer fines		Net sales		(272	)		(793	)

Total reclassification			$	(322	)	$	(928	)


	Amount
Base consideration	$	525,000
Plus: Net working capital adjustment amount		1,301

Preliminary aggregated consideration	$	526,301


Description	Amount
Assets acquired:
Accounts receivable			$	21,273
Inventory				12,214
Customer backlog				2,600
Other current assets				914
Property, plant and equipment
Land	$	510
Machinery and equipment		20,205
Building		3,790		24,505

Intangible assets other than goodwill
Technology	$	39,800
Tradenames		10,700
Customer relationships		200,900		251,400

Goodwill				228,725

Total assets acquired				541,631

Current liabilities assumed:
Trade payables	$	9,501
Accrued expenses		5,829		15,330

Allocated Preliminary Purchase Consideration			$	526,301


Description	Preliminary Fair Value of Acquired Assets		Reversal of Historical balance		Pro Forma Adjustment		Estimated Remaining Life
Land	$	510	$	493		17		n/a
Building and improvements		3,790		3,495		295		10 years
Machinery and equipment		20,205		8,495		11,710		5 years

Total	$	24,505	$	12,483	$	12,022


	Senior term loan facility			Subordinated credit facility			Credit facility		Total
Senior Secured Credit Agreement	$	350,000		$	—		$	5,000	$	355,000
Subordinated Credit Agreement					90,000				$	90,000

*Other transaction accounting adjustment to debt*	$	350,000		$	90,000		$	5,000	$	445,000
Less: Unamortized debt issuance costs		(6,169	)		(3,547	)				(9,716	)

Total debt	$	343,831		$	86,453		$	5,000	$	435,284

Current portion of long-term debt										17,208

Long-term debt, net of current portion									$	418,076

Unamortized debt issuance costs (presented as Other assets)							$	1,763


	Amount
Acquisition of R&W insurance	$	1,962
Incurrence of transaction costs		6,894
Acquisition of software		521
Interest on long-term debts		31,143
Purchase price allocation adjustment		1,096
Reduction of income tax payable		(2,837	)
Current portion of lease obligation		520

Total pro forma other transaction adjustment	$	39,299


Description	Estimated Depreciation Expense based on Preliminary Fair Value of Acquired Assets		Reversal of Historical Balance of Acquired Assets		Pro Forma Other Transaction Adjustment - Cost of Products Sold
Depreciation expense for the period
3 months ended March 31, 2022	$	1,105	$	1,104	$	1
12 months ended December 31, 2021	$	4,420	$	3,918	$	502


Description	Estimated Amortization Expense based on Preliminary Fair Value of Acquired Assets		Reversal of Historical Balance of Acquired Asset		Pro Forma Other Transaction Adjustment - Selling, General and Administrative Expenses		Pro Forma Other Transaction Adjustment - Cost of Products Sold
Amortization of other assets (backlog) and other intangible assets other than goodwill:
Three months ended March 31, 2022	$	3,009	$	26	$	2,983	$	—
Twelve months ended December 31, 2021	$	14,635	$	98	$	11,937	$	2,600


	Three Months Ended March 31, 2022		Year Ended December 31, 2021
Interest expense on new debt	$	6,229	$	24,914
Amortization of new debt issuance costs		737		2,950

Other transaction accounting adjustment to interest expense and other financing costs	$	6,966	$	27,864


	Three Months Ended March 31, 2022			Year Ended December 31, 2021
Prepaid expenses - representation and warranty insurance
Beginning balance	$	1,526		$	—
Purchases		—			1,962
Other transaction accounting adjustment - Selling, general and administrative		(109	)		(436	)

Balance, end of period	$	1,417		$	1,526

Other transaction accounting adjustment - Prepaid expenses - representation and warranty insurance
Short-term portion	$	436		$	436
Long-term portion		981			1,090

Total	$	1,417		$	1,526


Account	Financial statement caption	Three months ended March 31, 2022			Twelve months ended December 31, 2021
Income tax expense (benefit)	Provision for income tax expense (benefit)	$	(1,537	)	$	(9,076	)


Description	Amount
Sources of acquisition of Tuthill Transfer System
Proceeds from new debts	$	445,000
Less: Debt issuance costs		(15,165	)
Add: Credits provided by Tuthill to the Company		521
Company’s cash and cash equivalents		122,686

Total cash and cash equivalents, available		553,042

Uses for acquisition of Tuthill Transfer System
Preliminary cash consideration transferred		(526,301	)
Transaction costs, net of accruals		(462	)
Reimbursement of professional fees to Tuthill		(129	)

Total cash uses		(526,892	)


Cash and cash equivalents at end of period	$	26,150

Cash and cash equivalent at beginning of period	$	122,686
Add: Proceeds from new debts net of debt issuance costs		429,835
Add: Credits provided by Tuthill to the Company		521

Total cash and cash equivalents, available		553,042
Pro forma adjustment to cash and cash equivalents - *Net cash used in Tuthill Transfer Systems acquisition*		(526,892	)

Cash and cash equivalents at end of period	$	26,150