Gorman-Rupp Co (GRC) Reports Q3 2023 Financial Results
Net sales for Q3 2023 reached $167.5 million, an 8.9% increase compared to Q3 2022.
Net income for Q3 2023 was $9.0 million, a significant increase from $2.2 million in Q3 2022.
Adjusted EBITDA for Q3 2023 was $30.5 million, a 16.0% increase from the same period in 2022.
Total debt, net of cash, decreased by $25.4 million during Q3 2023.
On October 27, 2023, Gorman-Rupp Co (NYSE:GRC) released its financial results for the third quarter ended September 30, 2023. The company reported an increase in net sales and net income compared to the same period in 2022.
Performance Highlights
Net sales for Q3 2023 were $167.5 million, an 8.9% increase compared to net sales of $153.8 million for Q3 2022. This increase was attributed to an increase in volume and the impact of pricing increases taken in 2022 and an annual price increase in January 2023. Domestic sales increased by 10.1% and international sales increased by 5.2% compared to the same period in 2022.
Net income for Q3 2023 was $9.0 million, or $0.34 per share, a significant increase from net income of $2.2 million, or $0.09 per share, for Q3 2022. Adjusted earnings per share for Q3 2022 were $0.25.
Adjusted EBITDA for Q3 2023 was $30.5 million, a 16.0% increase from $26.3 million for the same period in 2022. Total debt, net of cash, decreased by $25.4 million during Q3 2023.
Financial Analysis
Gross profit for Q3 2023 was $48.1 million, resulting in a gross margin of 28.7%, compared to a gross profit of $40.6 million and a gross margin of 26.4% for the same period in 2022. The increase in gross margin was partially offset by a 90 basis point increase in labor and overhead expenses.
Selling, general and administrative (SG&A) expenses were $23.2 million and 13.9% of net sales for Q3 2023 compared to $22.1 million and 14.4% of net sales for the same period in 2022. The increase in SG&A expenses was due to increased expenses to support sales growth.
Operating income for Q3 2023 was $21.9 million, resulting in an operating margin of 13.1%, compared to operating income of $15.3 million and an operating margin of 10.0% for the same period in 2022.
CEO Commentary
Scott A. King, President and CEO commented, We continued to see strong sales across the majority of our markets which, along with improved gross margins and SG&A leverage, resulted in an increase in Adjusted EBITDA of 16% over the third quarter of last year. Although down from the record levels we saw earlier in the year, our backlog remains strong and at elevated levels. As expected, we saw our inventories decrease from their second quarter peak which contributed to an improvement in debt, net of cash, of over $25 million during the third quarter. I am pleased that during the quarter we completed the planned relocation and expansion of Fill-Rites manufacturing facility in Lenexa, Kansas. This expansion nearly tripled the size of the prior facility and provides additional capacity for Fill-Rites continued growth. We remain optimistic about our outlook and will continue to focus on delivering long-term sustained growth and shareholder value.
For more detailed information, please refer to Gorman-Rupp Co (NYSE:GRC)'s full earnings report.
Explore the complete 8-K earnings release (here) from Gorman-Rupp Co for further details.
This article first appeared on GuruFocus.
