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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 11-K
ANNUAL REPORT
Pursuant to section 15(d) of the
Securities Exchange Act of 1934
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2003
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____ to _____
Commission file number: 1-6747
THE GORMAN-RUPP COMPANY 401(k) PLAN
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(Full title of the plan)
The Gorman Rupp Company 305 Bowman Street Mansfield, Ohio 44903
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(Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office)
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The Exhibit Index is located at Page 17.
Page 1 of 18 Pages
REQUIRED INFORMATION
Audited plan financial statements and schedules prepared in accordance with the
financial reporting requirements of the Employee Retirement Income Security Act
of 1974, as amended, are filed herewith in lieu of the requirements of audited
statements of financial condition and audited statements of income and changes
in plan equity.
Financial Statements and Exhibits
A) The following financial statements and schedules (including the report of
Ernst & Young LLP) are filed as part of this annual report:
1) Statements of Net Assets Available for Benefits - December 31, 2003
and 2002
2) Statement of Changes in Net Assets Available for Benefits - Year
ended December 31, 2003
3) Schedule of Assets (Held at End of Year)
4) Schedule of Reportable Transactions
B) The following exhibit is filed as part of this annual report:
(23) Consent of Independent Registered Public Accounting Firm
2
AUDITED FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
The Gorman-Rupp Company 401(k) Plan
December 31, 2003 and 2002 and Year ended December 31, 2003 with Report of
Independent Registered Public Accounting Firm
The Gorman-Rupp Company 401(k) Plan
Audited Financial Statements
and Supplemental Schedules
December 31, 2003 and 2002 and
Year ended December 31, 2003
CONTENTS
Report of Independent Registered Public Accounting Firm.......................................... 1
Financial Statements
Statements of Net Assets Available for Benefits.................................................. 2
Statement of Changes in Net Assets Available for Benefits........................................ 3
Notes to Financial Statements.................................................................... 4
Supplemental Schedules
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year).................................. 10
Schedule H, Line 4j -- Schedule of Reportable Transactions....................................... 11
Report of Independent Registered Public Accounting Firm
Plan Administrator
The Gorman - Rupp Company 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of The Gorman-Rupp Company 401(k) Plan as of December 31, 2003 and 2002, and the
related statement of changes in net assets available for benefits for the year
ended December 31, 2003. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2003 and 2002, and the changes in its net assets available for
benefits for the year ended December 31, 2003, in conformity with U.S. generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of December 31, 2003, and reportable transactions for
the year then ended, are presented for purposes of additional analysis and are
not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
June 4, 2004
Cleveland, Ohio
1
The Gorman-Rupp Company 401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2003 2002
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ASSETS
Investments, at fair value 22,020,711 $ 17,991,563
Receivables:
Employer contribution 42,415 42,203
Participants contribution 193,806 193,418
Accrued interest 18,331 8,667
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Total receivables 254,552 244,288
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Net assets available for benefits 22,275,263 $ 18,235,851
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See accompanying notes to financial statements.
2
The Gorman-Rupp Company 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2003
ADDITIONS
Investment income:
Net appreciation in fair value of investments $ 2,870,930
Interest and dividends 386,298
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3,257,228
Contributions:
Participants 1,735,785
Employer 380,646
Rollovers 49,608
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2,166,039
Total additions 5,423,267
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DEDUCTIONS
Benefits paid to participants 1,383,855
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Net increase 4,039,412
Net assets available for benefits:
Beginning of year 18,235,851
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End of year $ 22,275,263
============
See accompanying notes to financial statements.
3
The Gorman-Rupp Company 401(k) Plan
Notes to Financial Statements
December 31, 2003 and 2002 and
Year ended December 31, 2003
1. DESCRIPTION OF THE PLAN
The following description of The Gorman - Rupp Company 401(k) Plan (Plan)
provides only general information. Participants should refer to the Summary Plan
Description for a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering substantially all employees of
the Corporate, Mansfield, Industries, and Ramparts Divisions of The Gorman -
Rupp Company (Company and Plan Administrator) and Patterson Pump Company, a
subsidiary of the Company. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Each year, participants may contribute up to 15% of pretax annual compensation,
as defined in the Plan. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans. Effective August 1, 2000, the Company contributes 40% of the first 4% of
compensation that a participant contributes to the Plan.
Upon enrollment, a participant may direct employee contributions in whole
increments to any of the investment fund options offered by the Plan. Effective
August 1, 2000, employer contributions are restricted to the Gorman-Rupp Company
Common Stock Fund. Participants may change their investment options daily.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) Plan earnings.
Allocations are based on participant earnings or account balances, as defined.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account.
4
The Gorman-Rupp Company 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. Participants are also fully vested in the Company contribution portion
of their accounts plus actual earnings thereon.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balance.
Loan terms range from 1-5 years or up to 20 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account and
bear interest at the prime rate, as quoted in the Wall Street Journal. Principal
and interest is paid ratably through payroll deductions.
PAYMENT OF BENEFITS
Upon retirement, death, or termination of employment, a participant will receive
a lump-sum amount equal to the vested value of his or her account.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of accounting.
5
The Gorman-Rupp Company 401(k) Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year-end. The Company stock is valued
at its quoted market price as of the last business day of the Plan's year. The
participant loans are valued at their outstanding balances, which approximate
fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
3. INVESTMENTS
During 2003, the Plan's investments (including investments purchased, sold as
well as held during the year) appreciated in fair value as determined by quoted
market prices as follows:
NET
APPRECIATION
IN FAIR VALUE
OF INVESTMENTS
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Common stock $ 902,148
Shares of registered investment companies 1,968,782
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$ 2,870,930
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6
The Gorman-Rupp Company 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Investments that represent 5% or more of the Plan's net assets are as follows:
2003 2002
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The Gorman-Rupp Company Common Stock * $ 8,110,925 $ 6,843,618
American Century Income and Growth Fund 2,970,697 2,266,602
Armada U.S. Government Income Fund 1,044,816
Armada Money Market Fund 3,133,531 3,202,502
AIM Balanced Fund 1,518,703 1,305,728
* Nonparticipant-directed
4. NONPARTICIPANT-DIRECTED INVESTMENTS
The Gorman-Rupp Company Common Stock Fund contains participant account balances
that are both participant-directed and nonparticipant-directed. Because the fund
contains balances that are nonparticipant-directed, the entire fund is
considered nonparticipant-directed for disclosure purposes.
Information about the net assets and the significant components of changes in
net assets related to nonparticipant-directed investments is as follows:
DECEMBER 31
2003 2002
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Net assets:
Investments, at fair value:
The Gorman-Rupp Company Common Stock $ 8,110,925 $ 6,843,618
Contributions receivable 77,354 78,688
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$ 8,188,279 $ 6,922,306
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7
The Gorman-Rupp Company 401(k) Plan
Notes to Financial Statements (continued)
4. NONPARTICIPANT-DIRECTED INVESTMENTS (CONTINUED)
YEAR ENDED
DECEMBER 31,
2003
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Changes in net assets:
Contributions:
Participants $ 325,613
Employer 375,128
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700,741
The Gorman-Rupp Company Common Stock dividends 205,379
Net appreciation in fair value of common stock 902,148
Net transfers to participant directed funds (223,996)
Distributions to participants (318,299)
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$ 1,265,973
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5. ADMINISTRATIVE COSTS
Fees for legal, accounting and other services rendered to the Plan are paid by
the Company.
6. RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of the investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits.
8
The Gorman-Rupp Company 401(k) Plan
Notes to Financial Statements (continued)
7. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 14, 2004, stating that the Plan is qualified under section 401(a) of
the Internal Revenue Code (Code) and, therefore, the related trust is exempt
from taxation. Subsequent to this determination by the Internal Revenue Service,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan, as amended, is
qualified and the related trust is tax exempt.
9
The Gorman-Rupp Company 401(k) Plan
EIN: 34-0253990 Plan Number: 005
Schedule H, Line 4i--Schedule of Assets
(Held at End of Year)
December 31, 2003
DESCRIPTION OF
INVESTMENT INCLUDING
MATURITY DATE, RATE
IDENTITY OF ISSUER, BORROWER, OF INTEREST, PAR CURRENT
LESSOR OR SIMILAR PARTY OR MATURITY VALUE COST* VALUE
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The Gorman-Rupp Company
Common Stock* 307,232 shares $ 4,145,914 $ 8,110,925
Armada S&P 500 Index Fund* 51,492 shares 492,780
Armada Money Market Fund* 3,133,531 shares 3,133,531
Armada Small Cap Value Fund* 38,116 shares 826,349
Armada Government Mortgage
Institutional Fund* 103,876 shares 979,553
American Century Income and
Growth Fund 107,323 shares 2,970,697
Gabelli Value Fund 22,130 shares 397,661
Janus Fund 16,391 shares 384,692
Janus World Wide Fund 6,590 shares 260,586
AIM Balanced Fund 63,464 shares 1,518,703
White Oak Growth Stock Fund 26,657 shares 938,063
Franklin Small-Mid Cap Growth Fund 29,671 shares 896,657
Putnam New Opportunities Fund 9,528 shares 359,405
Barclays Global Fund Lifepath 2000 4,336 shares 47,827
Barclays Global Fund Lifepath 2010 6,871 shares 84,518
Barclays Global Fund Lifepath 2020 4,975 shares 70,296
Barclays Global Fund Lifepath 2030 5,400 shares 76,301
Barclays Global Fund Lifepath 2040 798 shares 12,349
Lasalle Income Advantage Fund 92,251 shares 92,251
Loan Fund* At interest rates ranging
from 4% to 9.5% 367,567
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$ 22,020,711
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* Indicates party-in-interest to the Plan.
** Cost is presented for nonparticipant-directed investments only.
The Gorman-Rupp Company 401(k) Plan
EIN: 34-0253990 Plan Number: 005
Schedule H, Line 4j--Schedule of Reportable Transactions
Year ended December 31, 2003
CURRENT
VALUE
IDENTITY OF OF ASSET ON
PARTY DESCRIPTION PURCHASE SELLING COST OF TRANSACTION NET
INVOLVED OF ASSET PRICE PRICE ASSET DATE GAIN
-------- -------- ----- ----- ----- ---- ----
CATEGORY (iii) -- SERIES OF TRANSACTIONS IN EXCESS OF 5 PERCENT OF PLAN ASSETS
The Gorman-Rupp Company Common Stock $ 995,465 $ 995,465
$ 635,727 $ 482,349 $ 635,727 $ 153,378
There were no category (i), (ii) or (iv) reportable transactions during the year
ended December 31, 2003.
11
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE GORMAN-RUPP COMPANY 401(k) PLAN
BY: The Gorman-Rupp Company,
as Plan administrator
Date: June 23, 2004 BY: /s/JEFFREY S. GORMAN
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Jeffrey S. Gorman,
Committee Member
Date: June 23, 2004 BY: /s/ROBERT E. KIRKENDALL
-------------------------------
Robert E. Kirkendall,
Committee Member
Date: June 23, 2004 BY: /s/JUDITH L. SOVINE
----------------------------------------
Judith L. Sovine,
Committee Member
Date: June 23, 2004 BY: /s/DAVID P. EMMENS
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David P. Emmens,
Committee Member
16
EXHIBIT INDEX
Pagination by
Exhibit Sequential
Number Description Numbering System
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23 Consent of Independent Registered
Public Accounting Firm 18
17