The Gorman-Rupp Compan, a pump company, reported financial results for the fourth quarter and year ended December 31, 2014. Net sales during the fourth quarter of 2014 increased 14.6% to a record $105 million compared to $91.6 million during the same period in 2013.
Article continues below
Domestic sales increased 18.9% or $11.2 million and international sales increased 6.7% or $2.2 million compared to the fourth quarter of 2013. Sales in water end markets increased 13.7% or $8.9 million and sales in non-water end markets increased 16.9% or $4.5 million during the quarter.
The fourth quarter increase in water end market sales was largely due to additional sales in the fire protection market of $4.2 million driven primarily by international sales and additional sales in the construction market of $1.4 million principally for pumps for rental businesses.
Also, sales increased $2.9 million in the municipal market primarily due to large volume pumps related to flood control, partially offset by decreased sales for smaller infrastructure projects.
Increased sales in non-water markets during the fourth quarter of 2014 were primarily due to added shipments for the industrial market of $5.1 million related to fracking and the contribution from the recent acquisition of Bayou City Pump Company.
Net sales for the year ended December 31, 2014 were a record $434.9 million compared to $391.7 million for the year 2013, an increase of 11.0%. Domestic sales increased 16.1% or $41.3 million while international sales were up 3.2% on a constant currency basis but were largely offset by currency translation of $2.4 million. Sales increased 10.4% or $28.6 million in water end markets primarily due to additional sales in the municipal market of $20.0 million driven by large volume pumps related to wastewater and flood control.
Also, sales increased in the construction market by $6.1 million principally for pumps for rental businesses and for oil and gas drilling support within North America, and in the fire protection market by $3.8 million driven primarily by domestic sales. These increases were largely offset by lower agriculture market sales of $4.3 million driven by wet weather conditions in several domestic regions.
Sales increased 12.5% or $14.7 million for the year ended December 31, 2014 in non-water markets primarily due to additional shipments of $13.3 million for the industrial market related to fracking and $8.5 million from the recent acquisition of Bayou City Pump Company. Gross profit was $25.0 million for the fourth quarter of 2014, resulting in gross margin of 23.8% compared to 23.4% for the same period in 2013.
Operating income was $11.2 million, resulting in operating margin of 10.6% for the fourth quarter of 2014 compared to 8.9% for the same period in 2013. The gross margin and operating margin for the fourth quarter of 2013 were reduced by 50 and 70 basis points, respectively, due to a non-cash pension settlement charge which did not recur in the fourth quarter of 2014.
Net income was $7.9 million during the fourth quarter of 2014 compared to $7.2 million in the fourth quarter of 2013 and earnings per share were $0.30 and $0.28 for the respective periods.
The fourth quarter of 2013 included a non-recurring asset sale gain of $0.06 per share offset by $0.01 per share due to a non-cash pension settlement charge, both of which did not recur in the fourth quarter of 2014. Gross profit was a record $107.6 million in 2014 resulting in gross margin of 24.7% compared to 23.9% for 2013.
Operating income also was a record $53.3 million resulting in operating margin of 12.3% for 2014 compared to 10.7% in 2013. The gross margin and operating margin for 2013 were reduced by 70 and 110 basis points, respectively, due to a non-cash pension settlement charge which did not recur in 2014. Net income for 2014 was a record $36.1 million compared to $30.1 million for 2013 and earnings per share were $1.38 and $1.15 for the respective years.
Earnings per share for 2013 included a reduction of $0.10 due to a non-cash pension settlement charge offset by $0.06 per share for a non-recurring asset sale gain, both of which did not recur in 2014.
Currency translation negatively impacted earnings in 2014 by $0.01 per share. The Company’s backlog of orders was $160.7 million at December 31, 2014 compared to $182.2 million a year ago and $170.0 million at September 30, 2014.
The decrease in backlog from a year ago is principally due to record shipments during 2014, including approximately $14.4 million related to the Permanent Canal Closure Project (PCCP) to supply major flood control pumps to a member of a joint venture construction group for a significant New Orleans flood control project.
Excluding the PCCP project, incoming orders increased 12.3% in 2014 compared to 2013. Approximately $43.2 million of the PCCP project remain in the December 31, 2014 backlog total and are expected to be shipped by the end of 2015. ■