July 25, 2025 – Mansfield, OH – The Gorman-Rupp Company (NYSE: GRC), a leading manufacturer of pumps and pumping systems, reported robust financial results for the second quarter ended June 30, 2025. The company delivered record-setting performance in net sales, net income, and incoming orders, underscoring strong momentum across several key end markets and effective operational execution.
Second Quarter 2025: A Period of Significant Growth
Gorman-Rupp reported net sales of $179.0 million for Q2 2025, a 5.6% increase compared to $169.5 million in the same quarter of 2024. This $9.5 million year-over-year rise reflects broad-based demand, particularly in infrastructure-driven segments.
Net income for the quarter surged to $15.8 million, translating to earnings of $0.60 per share. This represents a sharp increase from $8.3 million, or $0.32 per share, in Q2 2024. On an adjusted basis, earnings per share in the prior year were $0.54, highlighting the continued upward trajectory of the company’s profitability.
Record incoming orders during the quarter reached $188.0 million, an impressive 15.7% or $25.5 million increase over Q2 2024. The company’s backlog remained strong at $224.4 million as of June 30, 2025, consistent with the year-ago period and reflecting robust customer demand.
Growth Across Core Markets
Sales expanded across most major end markets. The municipal sector was a major driver, with revenues up $3.5 million, fueled by increased investment in water and wastewater infrastructure. The fire suppression market also showed strength with a $2.8 million increase, while the industrial, petroleum, repair, and construction markets added $1.6 million, $1.5 million, $1.5 million, and $0.1 million respectively.
These gains were partially offset by a $1.2 million decline in agricultural sales, attributed to a downturn in farm income, and a modest $0.3 million drop in the OEM segment.
Margins and Cost Management
Gross profit rose to $56.1 million in Q2 2025, up from $54.1 million in the prior-year quarter. However, gross margin declined slightly to 31.3% from 31.9%, primarily due to higher material costs and unfavorable product mix. Cost of materials rose 120 basis points, including a 40 basis point increase in LIFO (Last-In, First-Out) expenses. Labor and overhead efficiencies related to higher sales volumes helped offset some of the margin pressure, improving by 60 basis points.
Selling, general, and administrative (SG&A) expenses were $26.0 million, or 14.5% of net sales, compared to $24.9 million or 14.7% of sales in Q2 2024. The prior year included $1.3 million in refinancing costs and a $1.1 million gain from the sale of a fixed asset.
Operating income reached $26.9 million, slightly higher than $26.0 million in Q2 2024. However, the operating margin dipped 40 basis points to 15.0%, mainly due to increased material costs. Still, Gorman-Rupp achieved better cost leverage in SG&A, labor, and overhead.
Financial Efficiency and Capital Structure Improvements
Interest expense fell significantly to $6.0 million in Q2 2025 from $9.0 million a year earlier. This reduction stemmed from debt refinancing transactions completed on May 31, 2024, and a lower level of outstanding debt.
Other expenses, net, were also reduced to $0.5 million compared to $6.3 million in Q2 2024. The prior year included a $4.4 million write-off of deferred debt financing fees and a $1.8 million prepayment fee linked to the early retirement of a subordinated credit facility.
Adjusted EBITDA came in at $35.3 million, nearly unchanged from $35.4 million in Q2 2024, illustrating the company’s sustained earnings power amid fluctuating cost conditions.
First Half of 2025: Solid Performance and Improved Profitability
For the six-month period ending June 30, 2025, Gorman-Rupp posted net sales of $343.0 million, up 4.3% from $328.8 million in the first half of 2024. Net income for the period totaled $27.9 million, or $1.06 per share, a notable increase from $16.2 million, or $0.62 per share, in the prior-year period. Adjusted EPS in the first half of 2024 was $0.84.
Adjusted EBITDA for the first six months of 2025 rose to $65.0 million, a 2.2% increase from $63.6 million in the same period last year.
Sales growth was led by a $5.4 million increase in the municipal market and a $4.8 million increase in the repair segment. Additional contributions came from the fire suppression ($3.5 million), petroleum ($2.5 million), OEM ($2.2 million), and industrial ($0.6 million) markets. These gains were partially offset by a $2.6 million decline in the construction sector and a $2.2 million drop in agriculture sales.
Gross profit for the first half of 2025 was $106.4 million, with a gross margin of 31.0%. This compares to $102.5 million and 31.2% margin in the same period last year. Material, labor, and overhead costs increased slightly as a percentage of sales, resulting in a modest 20 basis point reduction in gross margin.
SG&A expenses totaled $51.1 million, or 14.9% of net sales, down from 15.2% in the first half of 2024. Improved leverage on these expenses helped boost operating income to $49.0 million, up from $46.5 million, and improved the operating margin to 14.3%.
Interest expense declined to $12.2 million from $19.1 million in the first half of 2024, further reflecting benefits from the refinancing efforts. Other income (expense), net was $0.9 million of expense versus $6.6 million last year, again due to the prior year’s debt-related write-offs.
Cash Flow, Debt Reduction, and Outlook
Cash flow from operating activities rose to $48.9 million in the first half of 2025, up from $33.4 million a year earlier. The improvement was driven by higher net income and increased accrued liabilities. Capital expenditures reached $6.0 million, focused largely on machinery and equipment. Full-year capital investment is projected to total around $20.0 million.
In addition to solid earnings, the company significantly strengthened its balance sheet, reducing total debt by $30.0 million in the first six months of 2025.
Incoming orders for the first half of 2025 totaled $365.7 million, representing a 7.1% increase over the same period in 2024 and pointing to continued demand strength.
Leadership Commentary and Strategic Outlook
Scott A. King, President and CEO of Gorman-Rupp, expressed confidence in the company’s trajectory. “We were pleased to report record sales, earnings per share, and incoming orders during the quarter,” said King. “Infrastructure investments, particularly in water management, continue to support our municipal business. We’re also seeing increased demand from emerging sectors such as data center construction.”
King emphasized the strength of the company’s U.S.-centric supply chain as a competitive advantage, especially as global tariff concerns persist. He also highlighted the importance of operational cash flow in reducing debt and improving the company’s financial flexibility.
“With a strong order backlog and encouraging incoming order trends, we are well-positioned heading into the second half of the year,” King concluded.
