Gorman-Rupp Reports Strong Revenue Growth in Latest Quarter
Segments of revenue
Gorman-Rupp Company (GRC) reported net sales of $167.5 million for the three months ended September 30, 2023, representing a significant increase compared to $153.8 million in the same period last year. For the nine months ended September 30, 2023, net sales reached $498.9 million, showing substantial growth from $375.0 million in the prior year.
GRC's strong revenue performance can be attributed to several factors. Firstly, the company experienced a 400 basis point increase in gross margin, resulting in a gross profit of $145.3 million for the first nine months of 2023, compared to $94.3 million in the same period last year. This improvement was driven by a favorable impact from cost of material, including a favorable LIFO impact and the absence of a Fill-Rite inventory step-up recognized in 2022. Additionally, GRC benefited from selling price increases and increased sales volume, including the inclusion of nine months of Fill-Rite sales in 2023 compared to four months in the prior year.
While GRC's revenue growth has been impressive, there are some challenges to consider. The company's selling, general, and administrative (SG&A) expenses increased to $70.7 million for the nine months ended September 30, 2023, compared to $62.1 million in the same period last year. This rise in SG&A expenses may put pressure on GRC's profitability and could impact its overall financial performance.
It is worth mentioning that GRC's gross margin improvement of 400 basis points is a notable achievement. The company's ability to realize selling price increases, optimize cost of material, and leverage increased sales volume and mix has contributed to this significant improvement. Additionally, the inclusion of nine months of Fill-Rite sales in 2023 compared to four months in the prior year has positively impacted GRC's revenue growth.
Gorman-Rupp Company has delivered a strong performance in the latest quarter, with robust revenue growth. The company's net sales increased to $167.5 million for the three months ended September 30, 2023, and reached $498.9 million for the nine months ended September 30, 2023. GRC's gross margin improvement of 400 basis points, driven by favorable cost of material and increased sales volume, has been a key strength. However, the rise in SG&A expenses poses a challenge to GRC's profitability. Overall, GRC's revenue growth reflects positive momentum and highlights the company's ability to capitalize on market opportunities.