GRC · The Gorman-Rupp Company

The Gorman-Rupp Company delivered a strong start to 2026, achieving record net income of $17.8 million, or $0.68 per share, representing a significant improvement from $12.1 million, or $0.46 per share, in the first quarter of 2025. The 7.7% increase in net sales to $176.6 million was primarily driven by volume growth and pricing actions. Key market contributors included construction ($6.3 million increase), agriculture ($4.4 million increase), and industrial markets ($3.5 million increase), partially offset by a $5.5 million decrease in fire suppression sales due to reduced international shipments.

Profitability showed marked improvement, with gross margin expanding 180 basis points to 32.5%. This expansion was attributed to a 100 basis point improvement in labor and overhead leverage from increased sales and an 80 basis point improvement in material costs due to favorable product mix. Operating margin increased 210 basis points to 15.6%, driven by the gross margin improvement and leverage on SG&A expenses. Interest expense decreased to $5.0 million from $6.2 million due to a reduction in outstanding debt, with total debt decreasing by $15.0 million during the quarter.

The company generated $22.0 million in operating cash flow and maintained a healthy backlog of $247.9 million, up from $217.8 million at March 31, 2025. Management indicated that full-year 2026 capital expenditures are planned to be approximately $22.0 to $24.0 million. The effective tax rate for the quarter was 19.8%, and the company expects the full-year rate to be between 22.0% and 23.0%.