8-K/A - GRC - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 31, 2022

THE GORMAN-RUPP COMPANY

(Exact name of registrant as specified in its charter)

Ohio	1-6747	34-0253990
(State or other jurisdiction<br> <br>of incorporation)	(Commission<br> <br>File Number)	(IRS Employer<br> <br>Identification No.)
600 South Airport Road, Mansfield, Ohio	44903
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(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (419) 755-1011

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br> <br>Symbol(s)	Name of each exchange<br> <br>on which registered
Common Shares, without par value	GRC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

On June 1, 2022, The Gorman-Rupp Company (the “Company”) filed a Current Report on Form 8-K (the “Initial Form 8-K”) in connection with the closing of its acquisition of the fuel transfer business, including the Fill-Rite and Sotera brands (the “Acquired Business”) from Tuthill Corporation, for approximately $525 million (the “Purchase Agreement”).

This Current Report on Form 8-K/A (“Form 8-K/A”) amends the Initial Form 8-K, to include the non-statutory carve-out audited and unaudited historical financial statements of the Acquired Business required by Item 9.01(a) of Form 8-K and the unaudited pro forma financial statements required by Item 9.01(b) of Form 8-K. Such information should be read in conjunction with the Initial Form 8-K. The pro forma financial information included in this Form 8-K/A has been presented for informational purposes only, as required by Form 8-K. It does not purport to represent the actual results of operations that the Company and the Acquired Business would have achieved had the companies been combined during the periods presented in the pro forma financial information and is not intended to project the future results of operations that the combined company may achieve. Except as described above, all other information in the Initial Form 8-K, remains unchanged.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The non-statutory carve-out historical audited financial statements of the Acquired Business as of and for the years ended December 31, 2021 and 2020 are attached hereto as Exhibit 99.1 to this Form 8-K/A.

The non-statutory carve-out historical unaudited financial statements of the Acquired Business as of and for the three-months ended March 31, 2022 and 2021 are attached hereto as Exhibit 99.2 to this Form 8-K/A.

(b) Pro Forma Financial Information.

The 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 is attached hereto as Exhibit 99.3 to this Form 8-K/A.

Exhibit<br>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)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 15, 2022

THE GORMAN-RUPP COMPANY
By:	/s/ Brigette A. Burnell
Name:	Brigette A. Burnell
Title:	Executive Vice President, General Counsel and Corporate Secretary

EX-23.1

Exhibit 23.1

Consent of Independent Auditor

We consent to the incorporation by reference in the Registration Statement (Nos. 333-203747, 333-207693, 333-211552 and 333-230067) on Form S-8 of The Gorman-Rupp Company of our report dated April 22, 2022, relating to the combined financial statements of Tuthill Transfer Systems, appearing in this Current Report on Form 8-K/A.

/s/ RSM US LLP

Schaumburg, Illinois

August 15, 2022

EX-99.1

Exhibit 99.1

Tuthill Transfer Systems

(Carve-out from TuthillCorporation)

Combined Financial Statements

December 31, 2021 and 2020

Contents

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

LOGO

RSM US LLP

Independent Auditor’s Report

Board of Directors

Tuthill Corporation

Opinion

We have audited the combined financial statements of Tuthill Transfer Systems (the Business), which comprise the combined balance sheets as of December 31, 2021 and 2020, the related combined statements of operations, changes in Parent Company net investment, and cash flows for the years then ended, and the related notes to the combined financial statements (collectively, the financial statements).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Business as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the financial statements section of our report. We are required to be independent of the Business and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Business’ ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

LOGO

In performing an audit in accordance with GAAS, we:

•	Exercise professional judgment and maintain professional skepticism throughout the audit.
•	Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or<br>error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
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•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are<br>appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Business’ internal control. Accordingly, no such opinion is expressed.
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•	Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting<br>estimates made by management, as well as evaluate the overall presentation of the financial statements.
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•	Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise<br>substantial doubt about the Business’ ability to continue as a going concern for a reasonable period of time.
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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

LOGO

Schaumburg, Illinois

April 22, 2022

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Combined Balance Sheets

December 31, 2021 and 2020

(Amounts in Thousands)

	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

See notes to combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Combined Statements of Operations

Years Ended December 31, 2021 and 2020

(Amounts inThousands)

	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

See notes to combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Combined Statements of Changes in Parent Company Net Investment

Years Ended December 31, 2021 and 2020

(Amountsin Thousands)

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	****

See notes to combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Combined Statements of Cash Flows

Years Ended December 31, 2021 and 2020

(Amountsin Thousands)

	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	$	—		$	—

See notes to combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies

Description of business: The accompanying combined financial statements present, on a historical cost basis, the combined assets, liabilities, revenues and expenses of Tuthill Transfer Systems (TTS or the Business), a division of Tuthill Corporation (Tuthill or the Parent), a holding company and multinational manufacturer of industrial products. Tuthill Transfer Systems is a manufacturer of fuel transfer pumps and meters manufactured in the United States (US) that sells to global markets in the agriculture, construction, transportation, oil & gas and other and other markets.

Significant accounting policies are as follows:

Basis ofpresentation: Throughout the periods covered by the combined financial statements, TTS operated as part of Tuthill. Consequently, stand-alone financial statements have not historically been prepared for TTS. The accompanying combined financial statements have been prepared on a combined basis as they represent a portion of Tuthill’s business and not a separate legal entity. The TTS division is comprised of two separate trial balances—TRAN (division located in Fort Wayne, Indiana and Lenexa, Kansas) and TGUK (division located in the United Kingdom (UK)). These combined financial statements are presented on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Tuthill using the historical results of operations and historical cost basis of the assets and liabilities of Tuthill that comprise the TTS division. The combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). These combined financial statements may not be indicative of the future performance of the TTS division and do not necessarily reflect what the combined results of operations, financial position and cash flows would have been had the TTS division been operated as an independent company during the periods presented.

The combined financial statements consist of TTS products which are operationally and geographically located within the US and the UK.

The combined statements of operations include all associated revenues from the assets being included in the stand-alone financials, and the corporate functional related expenses to generate those revenues (direct, indirect and allocated overhead). These corporate functional related expenses have been allocated to the Business based on direct usage or benefit, where identifiable, with the remainder allocated based on proportionate formulas involving total costs or other various allocation methods that management believes are consistent and reasonable. See Note 5 Relationship with Parent and Related Entities. The allocated costs are deemed to be settled by TTS to the Parent in the period in which the expense was recorded in the combined statements of operations. Current and deferred income taxes and related tax expense have been determined based on the stand-alone results of the Business by applying Accounting Standards Codification (ASC) No. 740, Income Taxes, to TTS’ operations in each country as if it were a separate taxpayer (i.e., following the Separate Return Methodology).

The combined financial statements of TTS will include the historical assets and liabilities of the one identified US division and the UK division, where discrete financial information is available, and where employees and assets are located that support the Business. To the extent a shared asset is primarily used by TTS, the entire asset and any related depreciation were included within the stand-alone financial statements. If TTS is not the primary user of the asset, it was excluded entirely from the combined financial statements, and a representative charge for the usage of the asset was included in the combined statement of operations.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

TTS utilizes the Parent’s centralized processes and systems for cash management. The net results of these cash transactions between TTS and Parent are reflected within Parent Company net investment in the accompanying combined balance sheets. All Parent funding to the TTS Business since inception has been accounted for as a capital contribution from Parent and all cash remittances from the TTS Business to Parent have been accounted for as distributions to Parent, including allocation of Parent expenses and settlement of transactions with Parent, reflected within Parent Company net investment in the combined balance sheets. In addition, Parent Company net investment represents Parent’s interest in the recorded net assets of the Business and represents the cumulative net investment by parent in the Business through the dates presented and includes cumulative operating results.

Intercompany transactions between the TTS divisions were eliminated, and there is no remaining activity between TTS and Tuthill disclosed in the periods presented.

All of the allocations and estimates in the combined financial statements are based on assumptions that management believes are reasonable. However, the combined financial statements included herein may not be indicative of the financial position, results of operations and cash flows of TTS in the future or if the Business had been a separate, stand-alone entity during the periods presented.

Basis of combination: The combined financial statements are presented on a stand-alone basis and include the financial position, statements of operations and cash flows of TTS. All significant intercompany accounts and transactions within TTS have been eliminated in the accompanying combined financial statements. All other intercompany activity identified for inclusion within the combined financial statements, either through specific identification or allocation to the Business, is deemed to have been paid to the Parent in the period the cost was incurred.

Use of estimates: The preparation of combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Parent Company net investment: TTS’ equity on the combined balance sheets represents Parent’s net investment in the Business and is presented as Parent Company net investment in lieu of stockholders’ equity. The statements of changes in Parent Company net investment include net cash transfers and other property transfers between Parent and TTS, as well as intercompany receivables and payables between TTS and other Parent affiliates that were settled on a current basis. Parent performs cash management and other treasury-related functions on a centralized basis for nearly all of its legal entities, which includes TTS.

All transactions reflected in Parent Company net investment in the accompanying combined balance sheets have been considered cash receipts and payments for purposes of the combined statements of cash flows and are reflected as financing activities in the accompanying combined statements of cash flows.

Cash and cash equivalents: TTS participates in the Parent’s centralized cash management and financing programs. (See Note 5).

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Accounts receivable: Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The allowance for doubtful accounts was $144 and $106 at December 31, 2021 and 2020, respectively.

Customers are considered major when sales volume exceeds 10% of total net sales for the year or outstanding receivable balances exceed 10% of current assets. No customers comprise 10% of net sales for the years ended December 31, 2021 and 2020. One customer’s outstanding receivable balance represented 12% of current assets at December 31, 2021 and 2020.

Inventories: Inventories are valued at the lower of cost or net realizable value. Cost of inventories is determined using the last-in, first-out (LIFO) method for TTS’s inventories.

Property, plant and equipment: The Business computes depreciation principally under accelerated methods over the estimated useful lives of the various assets, which average 39 years for buildings and improvements and seven years for machinery and equipment. The depreciation method switches to a straight-line method for certain assets during the year when depreciation expense under the straight-line method exceeds depreciation expense under the accelerated method.

The carrying amount of all long-lived assets is evaluated periodically to determine if an adjustment to the depreciation and amortization period or impairment to the unamortized balance is warranted. Such evaluation is based principally on the expected utilization of the long-lived assets and the projected, undiscounted cash flows of the operations in which the long-lived assets are deployed.

Goodwill: The Business follows the provisions of U.S. GAAP under which goodwill is not amortized but tested annually for impairment. It is the TTS’s policy to perform impairment testing annually on September 30. Goodwill is generally evaluated for impairment using a two-step approach. In the first step, the Business compares the carrying value of the reporting unit to its fair value. If this step identifies a potential impairment, the Business performs the second step to determine the amount of the impairment loss, if any. US GAAP also permits companies to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this approach, the Business is not required to calculate the fair value of its reporting unit unless it determines, based on the qualitative assessment, that it is more likely than not that the fair value of its reporting unit is less than its carrying amount.

The Business tests the carrying value of goodwill for impairment at a reporting unit level, annually in the fourth quarter of each fiscal year, or whenever an event occurs, or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Business applied the qualitative approach during 2021 and determined there to be no impairment of goodwill.

Intangible assets: Upon acquisition, identifiable intangible assets are recorded at fair value. Identifiable intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis. The Business periodically evaluates the amortization methods, rates and remaining amortization periods of the assets, which are dependent upon the economic useful life of the asset. Intangible assets related to patents reflected a cost basis of $1,261 as of December 31, 2021, with accumulated amortization of $417. The cost basis as of December 31, 2020, was $1,134 with accumulated amortization of $319.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Revenue recognition: TTS recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which provides a five-step model for recognizing revenue from contracts with customers as follows:

•	Identify the contract with a customer.
•	Identify the performance obligations in the contract.
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•	Determine the transaction price.
---	---
•	Allocate the transaction price to the performance obligations in the contract.
---	---
•	Recognize revenue when or as performance obligations are satisfied.
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Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration the Business expects to receive in exchange for transferring goods. The amount of consideration received can vary, primarily because of customer incentives or rebate arrangements. The Business estimates variable consideration based on the expected value of total consideration to which it is likely to be entitled based on historical experience and projected market expectations. Included in the estimate is an assessment as to whether any variable consideration is constrained. Revenue estimates are adjusted at the earlier of a change in the expected value of consideration or when the consideration becomes fixed. For all contracts with customers, the Business has not adjusted the promised amount of consideration for the effects of a significant financing component as the period between the transfer of promised goods and the customer’s payment is expected to be one year or less. Sales are made on normal and customary short-term credit terms, generally ranging from 30 to 60 days. Sales, value-added and other taxes the Business collects concurrent with revenue-producing activities are excluded from revenue. The Business expenses incremental costs of obtaining a contract due to the short-term nature of the contracts.

Estimated costs of discounts, based on historical experience, are recognized as a reduction to sales when revenue is recognized. The Business provides customers the right to return eligible products under certain circumstances.

The Business generally accounts for shipping and handling as fulfillment activity, consistent with the timing of revenue recognition; that is, when a customer takes control of the transferred goods. In the event that a customer were to take control of a product upon or after shipment, the Business has made an accounting policy election to treat such shipping and handling activities as fulfillment cost. Shipping and handling fees billed to customers are included in net sales and shipping and handling costs are recognized in cost of goods sold in the same period the related revenue is recognized.

The Business has a wide variety of pumps and meters for fluid dispensing needs that are sold to a variety of customers in multiple end markets. While there are multiple products sold, the nature of the products are similar in terms of the nature of the revenue recognition policies.

**Income taxes:**Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. TGUK is subject to foreign taxes on their taxable income.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

The Business follows the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the combined financial statements. Under this guidance, the Business may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the combined financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses derecognition, classification, interest and penalties on income taxes, and accounting in interim periods.

The Business has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Tuthill files tax returns in all appropriate jurisdictions, which include a federal tax return and Illinois, as well as numerous other required state and international filings. The results of the Business are included in the Tuthill tax returns. The open tax years for the federal and state returns are 2018, 2019 and 2020, for which the statutes expire in 2022, 2023 and 2024, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in general and administrative expenses in the combined statement of operations. As of December 31, 2021, the Business has no liability for unrecognized tax benefits.

Foreign operations: The financial statements of TGUK are remeasured to U.S. dollars using the period-end exchange rate for assets and liabilities and a weighted average exchange rate for each period for revenues and expenses. The US dollar is the functional currency for TGUK, and translation adjustments for these subsidiaries are recorded in other, net on the combined statement of operations.

Assets located outside the US, net sales and net income recorded by the Company’s foreign subsidiaries were insignificant for the years ended December 31, 2021 and 2020.

Product warranties: The Company has product warranties granted and guaranteed upon sale of certain products. The accruals recorded related to the warranties granted and guaranteed are calculated based upon actual warranty expenditures incurred in relation to the volume of those products sold under warranty. A rollforward of these warranty accruals is as follows:

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

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Pending accounting pronouncements: In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842): Amendments to US Securities and Exchange Commissions (SEC) Paragraphs, which rescinds certain SEC Observer comments and staff announcements from the lease guidance and incorporates SEC staff announcements on the effect of a change in tax law on leveraged leases from ASC 840 into ASC 842. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, which amends the new lease guidance to add an optional transition practical expedient that permits an entity to continue applying its current accounting policy for land easements that exist or expire before the ASC 842 effective date. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which makes narrow scope improvements to the standard for specific issues. In July 2018, the FASB also issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method allowing the standard to be applied at the adoption date. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements, which exempts entities from having to provide the interim disclosures required by ASC 250-10-50-3 in the fiscal year in which an entity adopts the new leases standard. In November 2021, the FASB issued ASU 2021-09, Leases (Topic 842): Discount Rate for Lessees That Are Not Public Business Entities, which allows lessees that are not public business entities to make the ASC 842 risk-free discount rate accounting policy election by class of underlying asset, rather than at the entity-wide level.

A modified retrospective transition approach is required. An entity may adopt the guidance either (1) retrospectively to each prior reporting period presented in the combined financial statements with a cumulative-effect adjustment recognized at the beginning of the earliest comparative period presented or (2) retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment. The Business expects to adopt the guidance retrospectively at the beginning of the period of adoption, January 1, 2022, through a cumulative-effect adjustment.

The new standard provides a number of practical expedients. Upon adoption, the Business expects to elect all the practical expedients available.

The Business is currently evaluating the impact of its pending adoption of the new standard on its combined financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The ASU simplifies the measurement of goodwill impairment by eliminating the requirement that an entity compute the implied fair value of goodwill based on the fair values of its assets and liabilities to measure impairment. Instead, goodwill impairment will be measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The ASU also clarifies the treatment of the income tax effect of tax deductible goodwill when measuring goodwill impairment loss. ASU 2017-04 will be effective for the Business beginning on January 1, 2023. ASU 2017-04 must be applied prospectively with early adoption permitted. The Business is currently evaluating the impact of the adoption of this guidance on its combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting forIncome Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for the Business beginning on January 1, 2022. The Business is currently evaluating the impact of this new guidance on its combined financial statements.

Subsequent events: The Business has evaluated subsequent events for recognition and/or disclosure through April 22, 2022, the date the combined financial statements were available to be issued.

Note 2. Inventory

If the first-in, first-out (FIFO) method of inventory valuation had been used for all inventories, inventories would have been $2,210 and $2,128 higher than reported at December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, substantially all of TTS’s inventories were on the LIFO method for inventory valuation.

	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

At December 31, 2021 and 2020, TTS’s tax basis in LIFO inventories exceeds its book basis in LIFO inventories by $101 and $103, respectively.

Note 3. Accounts Payable and Accrued Expenses

As of December 31, 2021 and 2020, accounts payable and accrued expenses comprised of the following:

	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

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 4. Benefit Plans

Pension plans: TTS’ eligible employees participate in a defined pension plan covering substantially all of its US hourly employees (Hourly Plan). The benefits are based upon years of service and average monthly compensation or, in the case of certain divisions, contractual amounts. Tuthill makes annual contributions to the plans in accordance with Employee Retirement Income Security Act (ERISA) and Internal Revenue Service (IRS) regulations. The Business’ allocation of pension expense (benefit) to the Hourly Plan, were $87 and $(61) for the years ended December 31, 2021 and 2020, respectively, and included in the combined statements of operations within cost of goods sold.

401(k) Plan: TTS’ eligible employees participate in a discretionary defined contribution 401(k) plan. The plan is sponsored by Tuthill and administered by a third party. Tuthill has the right to terminate the plan at any time. The Business’ contributions related to the plan was $368 and $378 for the years ended December 31, 2021 and 2020, respectively, and included in the combined statements of operations within general and administrative expenses.

Note 5. Relationshipwith Parent and Related Entities

Historically, TTS has been managed and operated in the normal course of business with other affiliates of the Parent. Accordingly, certain shared costs have been allocated to TTS and reflected as expenses in the stand-alone financial statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the historical Parent expenses attributable to TTS for purposes of the stand-alone combined financial statements. The expenses reflected in the combined financial statements may not be indicative of expenses that will be incurred by TTS in the future.

Insurance: Tuthill is partially self-insured for health insurance, which is then allocated for TTS’ respective portion. Tuthill maintains stop-loss insurance, which limits exposure to $215k of annual benefits.

General corporate overhead: Tuthill incurs significant corporate costs for support services provided to TTS as well as other Parent entities. These costs include expenses for information systems, accounting, other financial services such as treasury and audit, purchasing, human resources, legal, facilities, engineering, corporate research and development, corporate stewardship, marketing and business analysis support.

Expenses relating to these services have been allocated to TTS and are reflected in the combined financial statements. Where direct assignment is not possible or practical, these costs were allocated using methods based on proportionate formulas involving total costs or other various allocation methods that management believes are consistent and reasonable.

The general allocated corporate expenses, excluding the allocations identified in Note 4 above for the benefit plans, were $13,310 and $12,615 for the years ended December 31, 2021 and 2020, respectively. For the year ended December 31, 2021, $12,867 and $443 was included in the combined statements of operations within general and administrative expenses and selling expenses, respectively. For the year ended December 31, 2020, $12,194 and $421 was included in the combined statements of operations within general and administrative expenses and selling expenses, respectively.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 6. Income Taxes

As previously discussed in Note 1, although TTS was historically included in consolidated income tax returns of Parent, TTS’ income taxes are computed and reported herein under the separate return method. Use of the separate return method may result in differences when the sum of the amounts allocated to stand-alone tax provisions are compared with amounts presented in combined financial statements. In that event, the related deferred tax assets and liabilities could be significantly different from those presented herein. Certain tax attributes, which were actually reflected in Parent’s consolidated financial statements may or may not exist at the stand-alone TTS level. TTS combined financial statements do not reflect any amounts due to Parent for income tax related matters as it is assumed that all such amounts due to Parent were settled on December 31st of each year.

Income tax expense for the years ended December 31, 2021 and 2020, consisted of the following:

	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

The deferred tax assets and liabilities consist of the following components as of December 31, 2021 and 2020:

	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	)

The income tax provision differs from the amounts computed by applying the statutory income tax rate for years ended December 21, 2021 and 2020 as follows:

	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

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toCombined Financial Statements

(Amounts in Thousands)

Note 7. Commitments and Contingencies

Operating leases: TTS leases its Lenexa warehouse through an operating lease agreement expiring in April 2025. The Business also has various machinery and equipment leases expiring at various times through February 2025. At December 31, 2021, future minimum lease payments were as follows:

Years ended December 31,
2022	$	738
2023		540
2024		488
2025		205
	$	1,971

Rent expense was $738 and $616 for the years ended December 31, 2021 and 2020, respectively.

Legal: The Business is subject to pending and threatened legal actions and proceedings arising in the ordinary course of business. Although the outcome of matters in effect at year-end and through the date of this report cannot presently be determined, management does not expect that the resolution of such matters will have a materially adverse effect on the Business’ financial position or results of operations**.**

EX-99.2

Exhibit 99.2

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Condensed Combined Financial Report

March 31, 2022

Contents

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

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Unaudited Condensed Combined Balance Sheets

March 31, 2022 and December 31, 2021

(Dollars in Thousands)

	March 31,<br>2022		December 31,<br>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

See notes to unaudited condensed combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Unaudited Condensed Combined Statements of Operations

Three-Month Periods ended March 31, 2022 and March 31, 2021

(Dollars in Thousands)

	2022		2021
Net sales	$	41,289	$	33,298
Costs of good sold:
Cost of goods sold		26,898		21,446
Engineering expenses		524		527
		27,422		21,973
Gross profit		13,867		11,325
Selling, general and administrative expenses:
Selling expenses		2,251		1,725
General and administrative expenses		5,428		5,048
		7,679		6,773
Operating income		6,188		4,552
Other income:
Other, net		4		—
		4		—
Income before income taxes		6,192		4,552
Provision for income taxes		1,330		956
Net income	$	4,862	$	3,596

See notes to unaudited condensed combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Unaudited Condensed Combined Statements of Changes in Parent Company Net Investment

Three-Month Periods Ended March 31, 2022 and March 31, 2021

(Dollars in Thousands)

	TotalMembers’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	****

See notes to unaudited condensed combined financial statements.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Unaudited Condensed Combined Statements of Cash Flows

Three-Month Periods Ended March 31, 2022 and March 31, 2021

(Dollars in Thousands)

	2022			2021
Cash flows from operating activities:
Net income	$	4,862		$	3,596
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,130			1,050
Deferred income taxes		(266	)		—
Changes in assets and liabilities:
Accounts receivable		(4,644	)		(3,415	)
Inventories		(1,798	)		629
Prepaid expenses and other		(31	)		65
Accounts payable and accrued expenses		1,803			2,267
Accrued compensation and related expenses		(101	)		241
Net cash provided by operating activities		955			4,433
Cash flows from investing activities:
Additions to property, plant and equipment		(412	)		(470	)
Purchase of intangible assets		(27	)		(43	)
Net cash used in investing activities		(439	)		(513	)
Cash flows from financing activities:
Net transfers to Parent		(516	)		(3,920	)
Net cash used in financing activities		(516	)		(3,920	)
Net change in cash and cash equivalents		—			—
Cash and cash equivalents:
Beginning		—			—
Ending	$	—		$	—

See notes to unaudited condensed combined financial statements.

Tuthill Transfer Systems

(Carve Out from Tuthill Corporation)

Notes toUnaudited Condensed Combined Financial Statements

(Amounts in Thousands)

Note 1.	Basis of Presentation and Summary of Significant Accounting Policies

Description of business: The accompanying unaudited condensed combined financial statements present, on a historical cost basis, the unaudited combined assets, liabilities, revenues and expenses of Tuthill Transfer Systems (TTS or the Business), a division of Tuthill Corporation (Tuthill or the Parent), a holding company and multinational manufacturer of industrial products. Tuthill Transfer Systems is a manufacturer of fuel transfer pumps and meters manufactured in the United States (US) that sells to global markets in the agriculture, construction, transportation, oil & gas and other markets.

Significant accounting policies are as follows:

Basis ofpresentation: The unaudited condensed combined financial statements have been prepared pursuant to the rules and regulations of interim financial reporting. Therefore, certain information and disclosures normally included in financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted. These unaudited condensed combined financial statements should be read in conjunction with the audited combined financial statements and accompanying notes thereto included in TTS’s December 31, 2021, combined financial statements. In management’s opinion, the accompanying unaudited condensed combined financial statements reflect all adjustments (consisting of only normal recurring unaudited adjustments) considered necessary for a fair presentation of TTS’s unaudited condensed combined balance sheet as of March 31, 2022, and the unaudited condensed combined statements of operations for the three-months ended March 31, 2022 and 2021.

Throughout the periods covered by the unaudited condensed combined financial statements, TTS operated as part of Tuthill. Consequently, stand-alone financial statements have not historically been prepared for TTS. The accompanying unaudited condensed combined financial statements have been prepared on a combined basis as they represent a portion of Tuthill’s business and not a separate legal entity. The TTS division is comprised of two separate trial balances—TRAN (division located in Fort Wayne, Indiana and Lenexa, Kansas) and TGUK (division located in the United Kingdom (UK)). These unaudited condensed combined financial statements are presented on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Tuthill using the historical results of operations and historical cost basis of the assets and liabilities of Tuthill that comprise the TTS division. These unaudited condensed combined financial statements may not be indicative of the future performance of the TTS division and do not necessarily reflect what the combined results of operations, financial position and cash flows would have been had the TTS division been operated as an independent company during the periods presented.

The unaudited condensed combined financial statements consist of TTS products which are operationally and geographically located within the US and the UK.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toUnaudited Condensed Combined Financial Statements

(Amounts in Thousands)

Note 1.	Basis of Presentation and Summary of Significant Accounting Policies (Continued)

The unaudited condensed combined statements of operations include all associated revenues from the assets being included in the stand-alone financials, and the corporate functional related expenses to generate those revenues (direct, indirect and allocated overhead). These corporate functional related expenses have been allocated to the Business based on direct usage or benefit, where identifiable, with the remainder allocated based on proportionate formulas involving total costs or other various allocation methods that management believes are consistent and reasonable. See Note 5, Relationship with Parent and Related Entities. The allocated costs are deemed to be settled by TTS to the Parent in the period in which the expense was recorded in the unaudited condensed combined statements of operations. Current and deferred income taxes and related tax expense have been determined based on the stand-alone results of the Business by applying Accounting Standards Codification (ASC) No. 740, Income Taxes, to TTS’ operations in each country as if it were a separate taxpayer (i.e., following the Separate Return Methodology).

The unaudited condensed combined financial statements of TTS will include the historical assets and liabilities of the one identified US division and the UK division, where discrete financial information is available, and where employees and assets are located that support the Business. To the extent a shared asset is primarily used by TTS, the entire asset and any related depreciation were included within the stand-alone financial statements. If TTS is not the primary user of the asset, it was excluded entirely from the unaudited condensed combined financial statements, and a representative charge for the usage of the asset was included in the unaudited condensed combined statement of operations.

TTS utilizes the Parent’s centralized processes and systems for cash management. The net results of these cash transactions between TTS and Parent are reflected within Parent Company net investment in the accompanying unaudited condensed combined balance sheets. All Parent funding to the TTS Business since inception has been accounted for as a capital contribution from Parent and all cash remittances from the TTS Business to Parent have been accounted for as distributions to Parent, including allocation of Parent expenses and settlement of transactions with Parent, reflected within Parent Company net investment in the unaudited condensed combined balance sheets. In addition, Parent Company net investment represents Parent’s interest in the recorded net assets of the Business and represents the cumulative net investment by Parent in the Business through the dates presented and includes cumulative operating results.

Intercompany transactions between the TTS divisions were eliminated, and there is no remaining activity between TTS and Tuthill disclosed in the periods presented.

All of the allocations and estimates in the unaudited condensed combined financial statements are based on assumptions that management believes are reasonable. However, the unaudited condensed combined financial statements included herein may not be indicative of the financial position, results of operations and cash flows of TTS in the future or if the Business had been a separate, stand-alone entity during the periods presented.

Accounts receivable: Accounts receivable are stated net of an allowance for doubtful accounts of $333 and $144 at March 31, 2022 and December 31, 2021, respectively.

Customers are considered major when sales volume exceeds 10% of total net sales for the year or outstanding receivable balances exceed 10% of current assets. No customers comprise 10% of net sales for the three-month periods ended March 31, 2022 and 2021. One customer’s outstanding receivable balance represented 11% and 12% of current assets at March 31, 2022 and December 31, 2021, respectively.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toUnaudited Condensed Combined Financial Statements

(Amounts in Thousands)

Note 1.	Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Inventories: Inventories are valued at the lower of cost or net realizable value. Cost of inventories is determined using the last-in, first-out (LIFO) method for TTS’s inventories.

Property, plant and equipment: Depreciation expense was $1,104 and $1,026 for the three-month periods ended March 31, 2022 and 2021, respectively.

There was no impairment of property, plant and equipment for the three-month periods ended March 31, 2022 or 2021.

Goodwill: There was no impairment of goodwill for the three-month periods ended March 31, 2022 or 2021

Intangible assets: Amortization expense was $26 and $24 for the three-month periods ended March 31, 2022 and 2021, respectively.

There was no impairment of intangible assets for the three-month periods ended March 31, 2022 or 2021.

Income taxes: As of March 31, 2022 or December 31, 2021, the Business has no liability for unrecognized tax benefits.

Foreign operations: Assets located outside the US, net sales and net income recorded by the Business’ foreign subsidiaries were insignificant for the three-month periods ended March 31, 2022 and 2021.

Product warranties: The Business has product warranties granted and guaranteed upon sale of certain products. The accruals recorded related to the warranties granted and guaranteed are calculated based upon actual warranty expenditures incurred in relation to the volume of those products sold under warranty. A rollforward of these warranty accruals is as follows:

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

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toUnaudited Condensed Combined Financial Statements

(Amounts in Thousands)

Note 1.	Basis of Presentation and Summary of Significant Accounting Policies (Continued)

July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which makes narrow scope improvements to the standard for specific issues. In July 2018, the FASB also issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method allowing the standard to be applied at the adoption date. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements, which exempts entities from having to provide the interim disclosures required by ASC 250-10-50-3 in the fiscal year in which an entity adopts the new leases standard. In November 2021, the FASB issued ASU 2021-09, Leases (Topic 842): Discount Rate for Lessees That Are Not Public Business Entities, which allows lessees that are not public business entities to make the ASC 842 risk-free discount rate accounting policy election by class of underlying asset, rather than at the entity-wide level.

A modified retrospective transition approach is required. An entity may adopt the guidance either (1) retrospectively to each prior reporting period presented in the unaudited combined financial statements with a cumulative-effect adjustment recognized at the beginning of the earliest comparative period presented or (2) retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment.

The new standard provides a number of practical expedients. Upon adoption, the Business expects to elect all the practical expedients available.

Due to the sale transaction disclosed in Note 8, TTS applied ASU 2016-02, Leases (Topic 842), in accordance with The Gorman-Rupp Company’s accounting policies after the sale by Tuthill.

Subsequent events: The Business has evaluated subsequent events for recognition and/or disclosure through August 11, 2022, the date the unaudited combined financial statements were available to be issued.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toUnaudited Condensed Combined Financial Statements

(Amounts in Thousands)

Note 2.	Inventory

If the first-in, first-out (FIFO) method of inventory valuation had been used for all inventories, inventories would have been $2,210 higher than reported at March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, substantially all of TTS’s inventories were on the LIFO method for inventory valuation.

	2022			2021
Inventories on a FIFO basis:
Raw materials	$	8,445		$	5,581
Finished goods		2,134			3,200
		10,579			8,781
Less allowance to adjust carrying values of inventories to LIFO method		(2,210	)		(2,210	)
	$	8,369		$	6,571
Note 3.	Accounts Payable and Accrued Expenses
---	---

As of March 31, 2022 and December 31, 2021, accounts payable and accrued expenses comprised of the following:

	2022		2021
Trade payables	$	10,124	$	8,824
Accrued rebates		2,342		2,830
Accrued warranty		654		679
Other accrued expenses		1,667		651
	$	14,787	$	12,984
Note 4.	Benefit Plans
---	---

Pension plans: The Business’ allocation of pension expense to the Tuthill’s Hourly Plan was $11 and $40 for the three-month periods ended March 31, 2022 and 2021, respectively, and included in the unaudited condensed combined statements of operations within cost of goods sold.

401(k) Plan: The Business’ contributions related to Tuthill’s defined contribution 401(k) plan was $172 and $88 for the three-month periods ended March 31, 2022 and 2021, respectively, and included in the unaudited condensed combined statements of operations within general and administrative expenses.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toUnaudited Condensed Combined Financial Statements

(Amounts in Thousands)

Note 5.	Relationship with Parent and Related Entities

Historically, TTS has been managed and operated in the normal course of business with other affiliates of the Parent. Accordingly, certain shared costs have been allocated to TTS and reflected as expenses in the stand-alone financial statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the historical Parent expenses attributable to TTS for purposes of the stand-alone unaudited condensed combined financial statements. The expenses reflected in the unaudited condensed combined financial statements may not be indicative of expenses that will be incurred by TTS in the future.

Expenses relating to these services have been allocated to TTS and are reflected in the unaudited condensed combined financial statements. Where direct assignment is not possible or practical, these costs were allocated using methods based on proportionate formulas involving total costs or other various allocation methods that management believes are consistent and reasonable.

The general allocated corporate expenses, excluding the allocations identified in Note 4 for the benefit plans, were $3,726 and $4,106 for the three-month periods ended March 31, 2022 and 2021, respectively. For the three-month period ended March 31, 2022, $3,619 and $107 was included in the unaudited condensed combined statements of operations within general and administrative expenses and selling expenses, respectively. For the three-month period ended March 31, 2021, $4,022 and $84 was included in the unaudited condensed combined statements of operations within general and administrative expenses and selling expenses, respectively.

Note 6.	Income Taxes

Although TTS was historically included in consolidated income tax returns of Parent, TTS’ income taxes are computed and reported herein under the separate return method. Use of the separate return method may result in differences when the sum of the amounts allocated to stand-alone tax provisions are compared with amounts presented in unaudited consolidated financial statements. In that event, the related deferred tax assets and liabilities could be significantly different from those presented herein. Certain tax attributes, which were actually reflected in Parent’s consolidated financial statements may or may not exist at the stand-alone TTS level. TTS unaudited condensed combined financial statements do not reflect any amounts due to Parent for income tax related matters as it is assumed that all such amounts due to Parent were settled on March 31, 2022 and December 31, 2021.

The Business recognized income tax expense of $1,330 and $956 during the three-month periods ended March 31, 2022 and 2021, respectively.

Tuthill Transfer Systems

(Carve-out from Tuthill Corporation)

Notes toUnaudited Condensed Combined Financial Statements

(Amounts in Thousands)

Note 6.	Income Taxes (Continued)

The Business calculates the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate to its year-to-date pretax book income or loss. The effective tax rate (income taxes as a percentage of income before income taxes) was 21% for the three-month periods ended March 31, 2022 and 2021. The Business’ effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of earnings and changes in permanent differences.

Note 7.	Commitments and Contingencies

Operating leases: Rent expense was $199 and $183 for the three-month periods ended March 31, 2022 and 2021, respectively.

Legal: The Business is subject to pending and threatened legal actions and proceedings arising in the ordinary course of business. Although the outcome of matters in effect at March 31, 2022 and through the date of this report cannot presently be determined, management does not expect that the resolution of such matters will have a materially adverse effect on the Business’ financial position or results of operations.

Note 8.	Sale Transaction

On May 31, 2022, Tuthill sold substantially all of its interest in the assets of TTS to The Gorman-Rupp Company.

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”) and presents the combined historical consolidated financial position and consolidated results of operations of The Gorman-Rupp Company (“Gorman-Rupp” or the “Company”) and the historical combined financial position and results of operations of the fuel transfer business, including the Fill-Rite and Sotera brands (the “Acquired Business”, “Fill-Rite” or “Tuthill Transfer Systems”), of Tuthill Corporation (“Tuthill”), adjusted to give effect to the May 31, 2022 acquisition of Tuthill Transfer Systems as further described in Note 1 – Description of the Transaction (the “Transaction”) and the pro forma effects of certain assumptions and adjustments described in “Notes to the Unaudited Pro Forma Condensed Combined Financial Information” below.

The unaudited pro forma condensed combined financial information has been prepared to give effect to the following:

•	Transaction accounting adjustments necessary to account for the acquisition of Tuthill Transfer Systems, under<br>the acquisition method of accounting based on the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”), whereby the assets and<br>liabilities of Tuthill Transfer Systems are recorded by the Company at their respective fair values as of the date the Transaction was completed (otherwise referred to as the “Closing Date” which is May 31, 2022).<br>
•	Adjustments to conform certain accounting policies and financial statement presentations of Tuthill Transfer<br>Systems to those of the Company. These are shown in a separate column as “other transaction accounting adjustments.”
---	---
•	The Company, as borrower, and certain direct, wholly-owned subsidiaries of the Company, as guarantors, entering<br>into: (i) a Senior Secured Credit Agreement, whereby the Company is provided with a Senior Term Loan Facility in an initial aggregate principal amount of $350.0 million (the “Senior Term Loan Facility”), a credit facility in an<br>aggregate principal amount of up to $100.0 million (the “Credit Facility”), and (ii) a Subordinated Credit Agreement covering a term loan facility in an initial aggregate principal amount of $90.0 million (the<br>“Subordinated Credit Facility”), with several lenders from time to time party thereto, with JP Morgan Chase Bank, N.A., (“JPM”), as administrative agent, and as sole bookrunner and sole lead arranger. On the Closing Date, the<br>Company borrowed a total of $350.0 million under the Senior Term Loan Facility and $5.0 million under the Credit Facility, which along with the proceeds of the Subordinated Credit Facility of $90.0 million and cash on hand, was used<br>to finance the Transaction. The adjustments related to the incurrence of this indebtedness are shown in a separate columns as “other transaction accounting adjustments.”
---	---
•	Adjustments to reflect transaction costs that would have been incurred had the Transaction been effected as at<br>January 1, 2021. These are shown in a separate column as “other transaction accounting adjustments.”
---	---

The following unaudited pro forma condensed combined financial information and related notes are based on and should be read in conjunction with: (i) the historical unaudited consolidated financial statements of the Company and the related notes included in the Company’s Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2022, (ii) the historical audited consolidated financial statements of the Company and the related notes included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2021, (iii) the historical unaudited combined financial statements of Tuthill Transfer Systems and the related notes as of and for the three months ended March 31, 2022 included as Exhibit 99.2 and (iv) the historical audited combined financial statements of Tuthill Transfer Systems and the related notes as of and for the year ended December 31, 2021 included as Exhibit 99.1, in this Current Report on Form 8-K/A, adjusted based on management reviews of the financial information of Tuthill Transfer Systems.

The unaudited pro forma condensed combined balance sheet as of March 31, 2022 combines the historical unaudited condensed consolidated balance sheet of The Gorman-Rupp Company as of March 31, 2022 and the historical unaudited balance sheet of Tuthill Transfer Systems as of March 31, 2022 on a pro forma basis as if the Transaction, the incurrence of certain indebtedness by the Company to finance the Transaction and the other events contemplated by the Asset Purchase Agreement, as summarized below, had been consummated by March 31, 2022. The unaudited pro forma condensed combined statement of income for the three months ended March 31, 2022 and the year ended December 31, 2021 combines the historical consolidated statements of income of the Company for the three months ended March 31, 2022 and the year ended December 31, 2021, respectively, and historical unaudited combined statements of operations of Tuthill Transfer Systems for the three months ended March 31, 2022 and the audited historical combined statement of operations for the year ended December 31, 2021, respectively, on a pro forma basis as if the Transaction, the incurrence of certain indebtedness by the Company to finance the Transaction, and the other events contemplated by the Asset Purchase Agreement, as summarized below, had been consummated on January 1, 2021.

The unaudited pro forma condensed combined financial information is provided for information purposes only. The unaudited pro forma condensed combined financial information does not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition of Tuthill Transfer Systems and the related financing occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The Company’s actual financial condition and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed.

The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting under United States Generally Accepted Accounting Principles (“GAAP”). GAAP requires that a business acquisition is accounted for under the acquisition method of accounting, which requires all of the following steps: (a) identifying the acquirer; (b) determining the acquisition date; (c) recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; and (d) recognizing and measuring goodwill or a gain from a bargain purchase. For the contemplated Transaction, the Company will be treated as the accounting acquirer. On the acquisition date, the identifiable assets acquired and liabilities assumed and goodwill will be measured at fair value, with limited exceptions. The results of operations for the combined company will be reported prospectively after the acquisition date. While pro forma adjustments related to Tuthill Transfer Systems’ assets and liabilities were based on estimates of fair value determined from preliminary information received from Tuthill and initial discussions between the Company and Tuthill management, due diligence efforts, and information available in the historical audited financial statements of Tuthill Transfer Systems and the related notes, the detailed valuation studies necessary to arrive at the required estimates of the fair value of the assets to be acquired and the liabilities to be assumed from the Transaction, as well as the identification of all adjustments necessary to conform the Company’s and Tuthill Transfer Systems’ accounting policies, remain subject to completion because, amongst other things, prior to the closing of the Transaction, both companies were limited in their ability to share information. Thus, certain valuations and other studies have yet to progress to a stage where there is sufficient information available for a definitive measurement. The Company intends to complete the valuations and other studies and will finalize the purchase price allocation as soon as practicable within the measurement period, but in no event later than one year following the Closing Date of the Transaction. The assets and liabilities of Tuthill Transfer Systems have been measured based on various preliminary estimates using assumptions that the Company believes are reasonable, based on information that is currently available. Accordingly, actual adjustments may differ from the amounts reflected in the unaudited pro forma condensed combined financial information and the differences may be material.

Also, the Company has not identified all significant adjustments necessary to conform the accounting policies of Tuthill Transfer Systems to the Company’s accounting policies. As more information becomes available, a more detailed review of Tuthill Transfer Systems’ accounting policies will be performed, which could result in identification of differences between the accounting policies of the two companies that, when conformed, could have a material impact on the combined financial information.

Further, the unaudited pro forma condensed combined financial information does not include management’s adjustments that depict or give effect to any cost savings, operating synergies, or revenue synergies that may result from the Transaction or the costs to achieve such synergies.

As a result of the foregoing, the pro forma adjustments reflected herein are preliminary and are subject to change as additional information becomes available and as additional analysis is performed. The preliminary pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma condensed combined financial information.

The Gorman-Rupp Company

Unaudited Pro Forma Condensed Combined Balance Sheet

As of March 31, 2022

(in thousands of U.S. dollars, except share and per share data)

	TheGorman-RuppCompany(Historical)			TuthillTransferSystems(Historical)		Reclassification(Note 4b)			TuthillTransferSystems(AdjustedHistorical)		TransactionAccountingAdjustments				OtherTransactionAccountingAdjustments				Pro formaCondensedCombined
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<br>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,<br>7c, 7d, 7e, 7f, 7g		—
Additional paid-in capital		1,698			—		—			—		—								1,698
Retained earnings		356,385			—		—			—		—				(55,262	)	5, 6a, 6e, 7a, 7b,<br>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

See accompanying notes to the unaudited pro forma condensed combined financial information.

The Gorman-Rupp Company

Unaudited Pro Forma Condensed Combined Statement of Income

For the Three Months Ended March 31, 2022

(in thousands of U.S. dollars, except share and per share data)

	The Gorman-<br>Rupp Company<br>(Historical)		TuthillTransferSystems<br>(Historical)		Reclassification<br>(Note 4c)			Tuthill<br>Transfer<br>Systems<br>(Adjusted<br>Historical)		Other<br>TransactionAccountingAdjustments			Notes	Pro formaCondensed<br>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

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.

The Gorman-Rupp Company

Unaudited Pro Forma Condensed Combined Statement of Income

For the Year Ended December 31, 2021

(in thousands of U.S. dollars, except share and per share data)

	The Gorman-Rupp Company(Historical)			TuthillTransferSystems(Historical)			Reclassification(Note 4c)			TuthillTransferSystems(AdjustedHistorical)			OtherTransactionAccountingAdjustments				Pro FormaCondensedCombined
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

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.

The Gorman-Rupp Company

Notes to Unaudited Pro Forma Condensed Combined Financial Information

1. Description of the Transaction

On April 26, 2022, The Gorman-Rupp Company entered into an Asset Purchase Agreement (the “APA”) to acquire the assets and assumed the liabilities of the fuel transfer business, including the Fill-Rite and Sotera brands (the “Acquired Business”, “Fill-Rite” or “Tuthill Transfer Systems”), of Tuthill Corporation (“Tuthill” or “Seller”), as defined in and upon the terms and conditions set forth in the APA, for a base purchase price of $525.0 million, before adjustment for any working capital amounts, and financing and transaction expenses (the “Transaction”). The Transaction was completed on May 31, 2022 (the “Closing Date”) for aggregate cash consideration of $526.3 million.

The Transaction was funded with indebtedness, consisting of $350.0 million from a Senior Secured Term Loan, $90.0 million from a Subordinated Unsecured Loan and $5.0 million from a new Credit Facility, and $81.3 million of cash on hand. The debt agreements covering these new facilities were entered into between the Company, as borrower, certain of the Company’s subsidiaries as guarantors, the several lenders from time to time party thereto, and JP Morgan Chase Bank, N.A., (“JPM”), as administrative agent, and as sole bookrunner and sole lead arranger (refer to Note 6.e for further details related to the financing completed as part of the Transaction).

2. Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial information and related notes have been prepared in accordance with Article 11 of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”). The accompanying unaudited pro forma condensed combined balance sheet as of March 31, 2022 combines the historical unaudited consolidated balance sheet of the Company and the historical unaudited combined balance sheet of Tuthill Transfer Systems, after giving effect to the Transaction as if it had been completed by March 31, 2022. Both the Company and Tuthill Transfer Systems have a fiscal year end of December 31. The unaudited pro forma condensed combined statements of income for the three months ended March 31, 2022 and the year ended December 31, 2021 combine the historical unaudited consolidated statements of income of the Company and the historical unaudited combined statement of operations of Tuthill Transfer Systems for the three months ended March 31, 2022 and the year ended December 31, 2021, respectively, giving effect to the Transaction as if it had been completed on January 1, 2021.

The historical combined financial information of Tuthill Transfer Systems has been presented on a “carve-out” basis from Tuthill’s consolidated financial statements using the historical results of operations, the assets, and the liabilities of Tuthill Transfer Systems and includes allocations of corporate expenses and shared expenses from Tuthill. These allocations reflect significant assumptions and the financial statements may not fully reflect what Tuthill Transfer Systems’ financial position, results of operations, or cash flows would have been had it been a stand-alone company during the period presented. As a result, historical financial information is not necessarily indicative of Tuthill Transfer Systems’ future results of operations or financial position.

The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to events that are: (a) directly attributable to the Transaction; (b) factually supportable; and (c) with respect to the pro forma statements of operations, expected to have a continuing impact on the results of the Company after taking into account the Transaction. The adjustments in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the Company following completion of the Transaction. Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma condensed combined financial information are described in the accompanying notes.

The unaudited pro forma condensed combined financial statements do not include any adjustments to these corporate and shared expense allocations from Tuthill, except as noted within the footnotes herein, nor the realization of any costs from operating efficiencies, synergies, or other restructuring activities that might result from the Transaction. Further, there may be additional charges related to restructuring or other integration activities resulting from the Transaction, the timing, nature, and amount of which the Company’s management cannot currently identify, and thus, such charges are not reflected in the unaudited pro forma condensed combined financial statements. The pro forma adjustments represent management’s best estimates and are based upon currently available information and certain assumptions that the Company believes are reasonable under the circumstances.

The unaudited pro forma condensed combined financial information and explanatory notes have been prepared to illustrate the effects of the Transaction involving the Company and Tuthill Transfer Systems under the acquisition method of accounting with the Company as the accounting acquirer. The unaudited pro forma condensed combined financial information is presented for informational purposes only and does not necessarily indicate the financial results of the combined company had the companies been combined at the beginning of the period presented, nor does it necessarily indicate the results of operations in future periods or the future financial position of the combined company. Under the acquisition method of accounting, the assets and liabilities of Tuthill Transfer Systems, as of the acquisition date, will be recorded by the Company at their respective fair values, with the excess of the purchase consideration over the fair value of Tuthill Transfer Systems’ net assets allocated to goodwill. The pro forma allocation of the purchase price reflected in the unaudited pro forma condensed combined financial information is subject to adjustment and may vary materially from the final purchase price allocation that will be completed no later than one year following the Closing Date since, among other reasons, prior to the closing of the Transaction, both companies were limited in their ability to share information.

3. Accounting Policies

As part of preparing the pro forma condensed combined financial information, the Company conducted a preliminary review of the accounting policies of Tuthill Transfer Systems in order to determine if any differences require adjustment or reclassification of Tuthill Transfer Systems’ financial position and results of operation to conform to The Gorman-Rupp Company’s accounting policies and classifications. See Note 4 for additional information.

4. Adjustment and Reclassification of Tuthill Transfer Systems’ historical financial information

Certain adjustments and reclassifications have been made to Tuthill Transfer Systems’ historical financial statements to conform to the Company’s accounting policies and presentation, as follows:

a.	As at March 31, 2022, an adjustment has been made to recognize the application of the Financial Accounting<br>Standard’s Board (“FASB”) Accounting Standards Codification Topic 842, Leases (“ASC 842”) to certain operating lease contracts acquired, to conform to the Company’s policy and presentation for lease contracts, as<br>follows (in thousands):
Description	Financial Statement Caption	As at March 31, 2022
---	---	---	---
Recognition of<br>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

Tuthill Transfer Systems has not yet applied the provisions of ASC 842 in its historical financial statements and presented the operating leases as part of Selling, General and Administrative expenses – Rental expense, as incurred.

b.	The financial information presented in the “Tuthill Transfer Systems (Adjusted Historical)” column in<br>the unaudited pro forma condensed combined balance sheet as at March 31, 2022 has been reclassified to conform to the Company’s presentation as indicated in the table below (in thousands):
Presentation in Tuthill Transfer Systems’<br><br><br>Balance Sheet	Presentation in unaudited pro formacondensed combined statement of<br>income		ReclassificationsThree months endedMarch 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
c.	The financial information presented in the “Tuthill Transfer Systems (Adjusted Historical)” column in<br>the unaudited pro forma condensed combined statement of income for the three months period ended March 31, 2022 and the year ended December 31, 2021 has been reclassified to conform to the Company’s presentation as indicated in the<br>table below (in thousands):
---	---
Presentation in Tuthill Transfer Systems’<br><br><br>Statement of Income	Presentation in unaudited proforma condensed combinedstatement of income		ReclassificationsThree months endedMarch 31, 2022			ReclassificationsYear endedDecember 31, 2021
---	---	---	---	---	---	---	---	---
Selling, General and Administrative Expenses
Discounts		Net sales	$	(50	)	$	(135	)
Customer fines		Net sales		(272	)		(793	)
Total reclassification			$	(322	)	$	(928	)

5. Preliminary Purchase Price Allocation

Estimated Consideration

The total estimated consideration is calculated as follows (in thousands):

	Amount
Base consideration	$	525,000
Plus: Net working capital adjustment amount		1,301
Preliminary aggregated consideration	$	526,301

The net working capital as at the Closing Date is equal to: (i) the current assets (other than cash) representing transferred assets (which is calculated net of reserves and allowances) minus (ii) the current liabilities (other than indebtedness and transaction expenses) representing assumed liabilities. The target net working capital was $15.8 million. If actual net working capital is below or above the target, there will be a decrease or an increase, respectively, to the purchase consideration paid by the Company. The balances above reflect the adjustment as if the Transaction had closed by March 31, 2022.

Preliminary Purchase Price Allocation

The Company has performed a preliminary valuation analysis of the fair value of Tuthill Transfer Systems’ assets to be acquired and liabilities to be assumed. Using the total preliminary aggregate consideration for the acquisition of $526.3 million, the Company has estimated the allocation to such acquired assets and assumed liabilities. The fair value assessments are preliminary and are based on available information and certain assumptions which the Company believes are reasonable. The following table summarizes the allocation of the preliminary aggregate consideration as of the Closing Date of the Transaction, which allocations were reflected in Tuthill Transfer Systems’ balance sheet as of March 31, 2022 for pro forma purposes as if the Transaction was completed by March 31, 2022 (in thousands).

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

This preliminary purchase price allocation has been used to prepare the transaction accounting adjustments in the pro forma condensed combined balance sheet and income statement. As of the date of this Current Report on Form 8-K/A, the Company has not completed the valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair value of Tuthill Transfer Systems’ assets acquired or liabilities assumed, other than a preliminary estimate for inventory, property and equipment, and intangible assets. Accordingly, apart from the aforementioned, certain assets acquired and liabilities assumed are presented at their respective carrying amounts and should be treated as preliminary values. A final determination of the fair value of Tuthill Transfer Systems’ assets and liabilities will be based on Tuthill Transfer Systems’ actual assets and liabilities as of the Closing Date and is expected to be completed within one year of the Closing Date. The final allocation when completed, could differ materially from the preliminary allocation used in the transaction accounting adjustments presented in the accompanying unaudited pro forma condensed combined financial information. The final allocation may include (i) changes in the fair values of property, plant and equipment; (ii) changes in allocations to intangible assets, such as customer relationships, trade names, developed technology, backlog, as well as goodwill; and (iii) other changes in assets and liabilities.

6. Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

The adjustments included in the unaudited pro forma condensed combined balance sheet as at March 31, 2022 are as follows:

a.	Represents adjustments to net working capital due primarily to the following:
(1)	Step-up and other inventory costing adjustments of $3.9 million,<br>net of write off of supplies in inventory of $0.3 million. The adjustment steps up the pro forma balance sheet for Tuthill Transfer Systems’ inventories, which fair value calculation is preliminary and subject to change. The pro forma<br>condensed combined statement of income for the year ended December 31, 2021 is also adjusted to increase cost of product sold by the same amount as the inventory that is expected to be sold within one year of the Closing Date.<br>
---	---
(2)	Removal of bad debt accounts and other receivable adjustments of $1.7 million.
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(3)	Additional prepayments for representation and warranty insurance, software costs, and taxes of<br>$9.4 million and $0.4 million in prepaids acquired in connection with the acquisition of Tuthill Transfer Systems, reduced by write off of unusable prepaid expenses of $0.2 million and amortization of prepayments of $0.8 million.<br>
---	---
b.	Represents an adjustment to recognize allocation of the purchase consideration to various property and<br>equipment to be acquired in connection with the Transaction, and consisting of the following (in thousands):
---	---
Description	PreliminaryFair Value ofAcquiredAssets		Reversal ofHistoricalbalance		Pro FormaAdjustment		EstimatedRemaining 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
c.	Represents an adjustment to recognize allocation of the purchase consideration to the following acquired assets<br>in connection with the Transaction, and consisting of the following (in thousands):
---	---
Description	PreliminaryFair Value ofAcquiredAssets		Reversal ofHistoricalBalance		Pro FormaAdjustment		EstimatedRemaining Life
---	---	---	---	---	---	---	---	---
Other Assets and Other Intangible Assets Other Than Goodwill
Other Assets
Backlog	$	2,600	$	—	$	2,600		1 Year
Other Intangible Assets Other Than Goodwill
Customer relationships		200,900		—		200,900		20 Years
Trademark and patent		10,700		845		9,855		indefinite
Developed technology		39,800		—		39,800		20 years
Total Other Intangible Assets	$	251,400	$	845	$	250,555

The fair value estimates for all identifiable intangible assets are preliminary and are based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use). The final fair value determination for identifiable intangibles may differ materially from this preliminary determination.

The estimated fair value of Tuthill Transfer Systems’ identified intangible assets includes definite-lived intangible assets such as customer relationships, developed technology and backlog. The assumptions used in estimating fair value were made solely for purposes of preparing the foregoing unaudited condensed combined pro forma financial information and the accounting treatment of acquired customer relationships and technology that were determinable at the closing of the transaction.

d.	Represents the elimination of Tuthill Transfer Systems’ historical goodwill of $2.9 million and the<br>recognition of the preliminary goodwill of $228.7 million, or a net pro forma adjustment on goodwill of $225.8 million, for the amount of estimated purchase consideration in excess of the fair value of the net assets acquired in connection<br>with the Transaction.
e.	The increase to debt of $445.0 million reflects the new indebtedness incurred to finance the acquisition<br>of Tuthill Transfer Systems. The debt issuance costs relating to the new indebtedness totaled $15.2 million, of which $12.8 million are presented as reduction to the related indebtedness and $2.4 million are presented in Other Assets.<br>These debt issuance costs are amortized over the term of the respective new indebtedness. The following is the breakdown of the new indebtedness (in thousands):
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	Senior termloan facility			Subordinatedcredit 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

Senior Secured Credit Agreement

On May 31, 2022, the Company entered into a Senior Secured Credit Agreement with several lenders, which provides a term loan of $350.0 million (“Senior Term Loan Facility”) and a credit facility up to $100.0 million (“Credit Facility”). The obligations under the Senior Secured Credit Agreement are secured by a first priority lien on substantially all of the Company’s personal property, and each of Patterson Pump Company, AMT Pump Company, National Pump Company and Fill-Rite Company (collectively, the “Guarantors”) has agreed to guarantee the obligations of the Company under the Senior Secured Credit Agreement and to secure the obligations thereunder by granting a first priority lien in substantially all of such Guarantor’s personal property. The Senior Term Loan Facility is payable in quarterly installment payments commencing on September 30, 2022, while the Senior Secured Credit Agreement will mature on May 31, 2027.

At the option of the Company, borrowings under the Senior Term Loan Facility and under the Credit Facility bear interest at either a base rate or at an Adjusted Term SOFR Rate, plus the applicable margin, which ranges from 0.75% to 1.75% for base rate loans and 1.75% to 2.75% for Adjusted Term SOFR Rate loans. The applicable margin is based on the Company’s senior leverage ratio. As of March 31, 2022, the applicable interest rate under the Senior Secured Credit Agreement was Adjusted Term SOFR plus 2.75%.

Subordinated Credit Agreement

On May 31, 2022, the Company entered into an unsecured subordinated credit agreement (“Subordinated Credit Agreement”) with one lender, which provides for a term loan of $90.0 million (the “Subordinated Credit Facility”). Each of the Guarantors has agreed to guarantee the obligations of the Company under the Subordinated Credit Agreement. The Subordinated Credit Agreement will mature on December 1, 2027.

At the option of the Company, borrowings under the Subordinated Credit Facility bear interest at either a base rate plus 8.0%, or at an Adjusted Term SOFR Rate plus 9.0%. As of March 31, 2022 borrowings under the Subordinated Credit Facility bear interest at an Adjusted Term SOFR Rate plus 9%.

Deferred debt issuance costs

The Company incurred total issuance costs of approximately $15.2 million related to the Senior Secured Credit Agreement and Subordinated Credit Agreement of which $12.8 million are shown as reduction to the related debt and $2.4 million are capitalized under Other assets in the accompanying unaudited condensed combined balance sheet. Of this amount, the Company determined that $12.8 million was related to the Senior Term Loan facility and the Subordinated Credit Facility and $2.4 million was related to the Credit Facility.

f.	Represents adjustments to recognize the purchase price allocation on accrued liabilities assumed and additional<br>accruals for acquisitions of representation and warranty insurance, software, and incurrence of transaction costs and interest on debt in connection with the Transaction, net of reduction of income tax payable, with details as follows (inthousands):
	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
g.	Represents purchase price allocation adjustment to write down trade and other payables of $2.7 million and<br>deferred tax liability of $1.0 million of Tuthill Transfer Systems that are not included on the liabilities to be transferred or assumed by the Company in relation to the Transaction.
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7. Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Income

The adjustments included in the unaudited pro forma condensed combined statement of income for the three months ended March 31, 2022 and the year ended December 31, 2021, are as follows:

a.	Represents an adjustment to recognize depreciation on property and equipment to be acquired in connection with<br>the Transaction, and reversal of depreciation expense recognized from historical statement of income of Tuthill Transfer Systems as follows (in thousands):
Description	EstimatedDepreciationExpense basedon PreliminaryFair Value ofAcquired Assets		Reversal ofHistoricalBalance ofAcquired Assets		Pro FormaOtherTransactionAdjustment -<br>Cost of ProductsSold
---	---	---	---	---	---	---
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
b.	Represents an adjustment to recognize amortization of intangible assets except goodwill, and other assets to be<br>acquired in connection with the Transaction, and reversal of amortization expense recognized from historical statement of income of Tuthill Transfer Systems as follows (in thousands):
---	---
Description	EstimatedAmortizationExpense basedon PreliminaryFair Value ofAcquired Assets		Reversal ofHistoricalBalance ofAcquired Asset		Pro FormaOtherTransactionAdjustment -Selling, GeneralandAdministrativeExpenses		Pro FormaOtherTransactionAdjustment -Cost ofProducts Sold
---	---	---	---	---	---	---	---	---
Amortization of other assets (backlog) and other intangible assets other thangoodwill:
Three months ended March 31, 2022	$	3,009	$	26	$	2,983	$	—
Twelve months ended December 31, 2021	$	14,635	$	98	$	11,937	$	2,600
c.	Represents a net increase to interest expense resulting from interest on the new indebtedness incurred to<br>finance the acquisition of Tuthill Transfer Systems and the amortization of related debt issuance costs, with details as follows (in thousands):
---	---
	Three MonthsEnded March 31,<br>2022		Year EndedDecember 31,<br>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 financingcosts	$	6,966	$	27,864
d.	Represents amortization of prepaid representation and warranty insurance incurred by the Company as part of the<br>arrangement for the purchase of Tuthill Transfer Systems. These will be amortized between three to six years, with details as follows (in thousands):
---	---
	Three MonthsEnded March 31,2022			Year EndedDecember 31,<br>2021
---	---	---	---	---	---	---
Prepaid expenses - representation and warranty insurance
Beginning balance	$	1,526		$	—
Purchases		—			1,962
Other transaction accounting adjustment - Selling, general andadministrative		(109	)		(436	)
Balance, end of period	$	1,417	****	$	1,526	****
Other transaction accounting adjustment - Prepaid expenses - representation and warrantyinsurance
Short-term portion	$	436		$	436
Long-term portion		981			1,090
Total	$	1,417		$	1,526
e.	Represents an adjustment to record $6.9 million of estimated transaction costs related to the Transaction<br>in general and administrative expenses. These costs were incurred by the Company subsequent to March 31, 2022 but prior to the Closing Date of May 31, 2022. These costs have not been included in the historical consolidated statement of<br>income of the Company for the three months ended March 31, 2022 and the year ended December 31, 2021 and therefore are added as an additional expense for the year ended December 31, 2021 within the other transaction accounting<br>adjustments These costs are non-recurring and are not expected to have a continuing impact on the combined company’s operating results in future periods.
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f.	This adjustment represents the estimated income tax effect of the pro forma adjustments. Statutory tax rate was<br>applied to each acquisition and financing adjustment using the blended federal and state statutory rate of approximately 21% for the three months ended March 31, 2022 and 20% for the year ended December 31, 2021, with details below. The<br>total effective tax rate of the combined company could be significantly different depending on the post-acquisition geographical mix of income and other factors.
---	---
Account	Financial statement caption	Three monthsended March 31,2022			Twelve monthsended December 31,2021
---	---	---	---	---	---	---	---
Income tax expense (benefit)	Provision for income tax expense (benefit)	$	(1,537	)	$	(9,076	)
g.	Certain Tuthill corporate allocations included within the historical statements of operations of Tuthill<br>Transfer Systems for the three months ended March 31, 2022 (unaudited) and the year ended December 31, 2021 were excluded from the proforma condensed combined statements of income of Tuthill Transfer Systems as those costs are not expected to have a<br>continuing impact on the combined company’s operating results in future period. The
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following accounts have been adjusted to remove these corporate allocations in the condensed combined statement of income (in thousands):
---
Description	Financial Statement Caption	Three monthsended March 31,<br>2022
---	---	---	---	---
Corporate allocation – Pension and other employee benefits, logistics and back office<br>support, insurance and depreciation	Selling, General, and Administrative expenses	$	(2,925	)
Description	Financial Statement Caption	Twelve monthsended December 31,<br>2021
Corporate allocation - Pension and other employee benefits, logistics and back office support,<br>insurance and depreciation	Selling, General and Administrative expenses	$	(7,100	)
Corporate allocation - Inventory adjustments	Cost of Product Sold	$	(82	) ****

8. Net Income per Share

Represents the net income per share calculated using the Company’s historical weighted-average number of shares of common stock, basic and diluted. No new or additional shares were issued in exchange for the Transaction. Accordingly, there were no change in the historical weighted-average number of common stock, basic and diluted, for each of the periods ended March 31, 2022 and December 31, 2021.

9. Changes in Cash and Cash Equivalents

The decrease in cash and cash equivalents of $96.5 million was determined as follows (in thousands):

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 TransferSystems acquisition	****	(526,892	)
Cash and cash equivalents at end of period	$	26,150	****