10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT

Commission file number 1-6747

THE GORMAN-RUPP COMPANY

(Exact name of Registrant as specified in its charter)

Ohio	34-0253990
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
600 South Airport Road, Mansfield, Ohio	44903
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (419) 755-1011

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class	Name of each exchange on which registered
Common Shares, without par value	NYSE MKT

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in the definitive proxy statement or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant. The aggregate market value is computed by reference to the price at which the common equity was sold as of June 30, 2013. $413,792,255.

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock as of March 1, 2014.

Common Shares, without par value—26,253,043

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 2013 Annual Report to Shareholders incorporated by reference into Part II (Items 5-9A).

Portions of Notice of 2014 Annual Meeting of Shareholders and related Proxy Statement incorporated by reference into Part III (Items 10-14).

**************

The Exhibit Index is located at Page 16

PART I

ITEM 1. BUSINESS

The Gorman-Rupp Company (“Registrant”, “Gorman-Rupp” or the “Company”) was incorporated in Ohio in 1934. The Company designs, manufactures and globally sells pumps and pump systems for use in water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire protection, heating, ventilating and air conditioning (“HVAC”), military and other liquid-handling applications.

PRODUCTS

The Company operates in one business segment, the manufacture and international sale of pumps and pump systems. The following table sets forth, for the years 2011 through 2013, the total net sales, income before income taxes and year-end total assets (in thousands) of the Company.

	2013		2012		2011
Net Sales	$	391,665	$	375,691	$	359,490
Income Before Income Taxes		44,277		42,447		42,685
Assets		355,638		335,183		298,700

The Company’s product line consists of pump models ranging in size from  ¹/₄“ to nearly 180” and ranging in rated capacity from less than one gallon per minute to nearly one million gallons per minute. The types of pumps which the Company produces include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, high pressure booster, rotary gear, diaphragm, bellows and oscillating.

The pumps have drives that range from 1/35 horsepower electric motors up to much larger electric motors or internal combustion engines capable of producing several thousand horsepower. Many of the larger units comprise encased, fully integrated water and wastewater pumping stations. In certain cases, units are designed for the inclusion of customer-supplied drives.

The Company’s larger pumps are sold principally for use in the construction, industrial, water and wastewater handling fields; for flood control; for boosting low residential water pressure; for pumping refined petroleum products, including the ground refueling of aircraft; for fluid control in HVAC applications; and for various agricultural purposes.

The Company’s pumps are also utilized for dewatering purposes. Additionally, pumps manufactured for fire protection are used for sprinkler back-up systems, fire hydrants, stand pipes, fog systems and deluge systems at hotels, banks, factories, airports, schools, public buildings and hundreds of other facilities throughout the world.

Many of the Company’s smallest pumps are sold to customers for incorporation into such products as food processing, chemical processing, photo processing, medical and other waste treatment, HVAC equipment, appliances and solar heating.

2

PART I – CONTINUED

ITEM 1. BUSINESS – CONTINUED

MARKETING

The Company’s pumps are marketed in the United States and worldwide through a network of more than 1,000 distributors, through manufacturers’ representatives (for sales to many original equipment manufacturers), through third-party distributor catalogs, and by direct sales. The Company is continuously seeking alliances to further enhance marketing opportunities. Government sales are handled directly by the Company and export sales are made primarily through foreign distributors and representatives.

During 2013, 2012 and 2011, there were no shipments to any single customer that exceeded 10% of total net sales.

Gorman-Rupp continues to actively pursue international business opportunities and, in 2013, shipped its pumps to more than 120 countries. However, the Company’s foreign operations do not involve material financial or other risks due to their relatively small size, both individually and collectively. No sales made to customers in any one foreign country amounted to more than 5% of total net sales during 2013, 2012 or 2011.

As a result of our active pursuit of international business, approximately $134.6 million of 2013 sales were shipped outside the United States, as compared to $136.5 million in 2012 and $118.1 million in 2011. International sales represented 34%, 36% and 33% of total sales in 2013, 2012 and 2011, respectively. The Company continues its efforts to penetrate international markets principally by its increased global investments and its sales responses to worldwide pumping needs.

COMPETITION

Since the late 1990’s, a number of consolidations have occurred within the highly competitive pump industry. As a consequence, numerous pump competitors now exist as subsidiaries, divisions or departments within significantly larger corporations. Foreign-sourced pumps have also increasingly penetrated into most of the Company’s domestic markets.

Gorman-Rupp estimates that 80 other domestic and global companies selling pumps and pump units compete in one or more of the lines of business and applications in which comparable products of the Company are utilized. International competitors are based mostly in Europe and Asia.

Most commercial and industrial pumps are specifically designed and engineered for a particular customer’s application. The Company believes that proper application, product performance, and quality of delivery and service are its principal methods of competition, and attributes its success to its continued emphasis in these areas.

3

PART I – CONTINUED

ITEM 1. BUSINESS – CONTINUED

PURCHASING AND PRODUCTION

Virtually all materials, supplies, components and accessories used by the Company in the fabrication of its products, including all castings (for which most patterns are made and owned by the Company), structural steel, bar stock, motors, solenoids, engines, seals, and plastic and elastomeric components are purchased by the Company from other suppliers and manufacturers. No purchases are made under long-term contracts and the Company is not dependent upon a single source for any materials, supplies, components or accessories which are of material importance to its business.

The Company purchases motors for its polypropylene bellows pumps and magnetic drive pumps from several alternative vendors; and motor components for its large submersible pumps, and motors and engines for its pump systems, are purchased from a limited number of suppliers. Small motor requirements are also currently sourced from alternative suppliers.

The other production operations of the Company consist of the machining of castings, the cutting, shaping and welding of bar stock and structural members, the design and assembly of electrical control panels, the manufacture of a few minor components, and the assembling, painting and testing of its products. Virtually all of the Company’s products are tested prior to shipment.

OTHER ASPECTS

As of December 31, 2013, the Company employed approximately 1,247 persons, of whom approximately 744 were hourly employees. The Company has no collective bargaining agreements, has never experienced a work stoppage and considers its labor relations to be satisfactory.

Although the Company owns a number of patents, and several of them are important to its business, Gorman-Rupp believes that the business of the Company is not materially dependent upon any one or more patents. The Company’s patents, trademarks and other intellectual property are adequate for its business purposes.

The backlog of orders at December 31, 2013 was valued at $182.2 million compared to $143.4 million at December 31, 2012. Approximately 77% of the Company’s backlog of unfilled orders is scheduled to be shipped during 2014, with the remainder principally during the first half of 2015. The increase in backlog from a year ago reflects the 2013 award of the Permanent Canal Closure Project (“PCCP”) contract of approximately $60.0 million to supply major flood control pumps to a member of a joint venture construction group for a significant New Orleans flood control project. Approximately $57.6 million of the project remain in the December 31, 2013 backlog total. The PCCP is a fixed-price contract and full government funding has been appropriated for the project. The termination, cancellation and delay provisions within the PCCP contract are governed by provision of the Federal Acquisition Regulation (“FAR”) clauses 52.222-12 (Contract Termination-Debarment), 52.242-14 (Suspension of Work), 52.242-2 Alt. 1 (Production Progress Reports), and 52.249.10 (Default – Fixed-Price Construction).

4

PART I – CONTINUED

ITEM 1. BUSINESS – CONTINUED

AVAILABLE INFORMATION

The Company maintains a website accessible through its internet address of www.gormanrupp.com. Gorman-Rupp makes available free of charge on or through www.gormanrupp.com its Annual Report to Shareholders, its annual reports on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after those reports (and any amendments) are electronically filed with or furnished to the Securities and Exchange Commission (“Commission”). However, the information contained on the Company’s website is not a part of this Form 10-K or any other report filed with or furnished to the Commission.

As noted in Gorman-Rupp’s Annual Report to Shareholders, a paper copy of the Company’s Form 10-K is also available free of charge upon written request to the Company’s Corporate Secretary.

ITEM 1A. RISK FACTORS

Market influences and cost pressures

The overall pump industry is cyclical in nature, and some of its business activity is generally related to business conditions in the durable goods and capital equipment markets. The Company cannot predict the timing or extent of future economic or market swings.

Additionally, raw material and energy purchases are major drivers of costs in the manufacture of pumps, and these costs are usually highly unpredictable. While efforts are made to recoup higher production costs through increased prices, the future acceptability of such price increases by customers is not guaranteed due to the highly competitive market place.

Compliance with , and costs related to, a variety of import and export laws and regulations and the consequences of failure to properly comply with such laws

The Company is subject to a variety of laws regarding international operations, including regulations issued by the U.S. Department of Commerce Bureau of Industry and Security and various foreign governmental agencies. Actual or alleged violations of import-export laws could result in enforcement actions and substantial financial penalties.

The Company cannot predict the nature, scope or effect of future regulatory requirements to which our international operations and trading practices might be subject or the manner in which existing laws might be administered or interpreted. Future regulations could limit the countries in which certain of our products may be manufactured or sold or could restrict our access to, and increase the cost of obtaining, products from foreign sources.

Family ownership of common equity

A substantial percentage of the Company’s Common Shares is held by various members of the Gorman and Rupp families and their affiliates. These family holdings do not typically trade; therefore, the Common Shares, in part because of these circumstances, generally have a history of relatively low volume trading experiences on the NYSE MKT Exchange.

5

PART I – CONTINUED

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Company’s corporate headquarters is located in Mansfield, Ohio. The production operations of the Company are conducted at several locations throughout the United States and other countries as set forth below. The Company is a lessee under a number of operating leases for certain real properties, none of which is material to its operations.

The Company owns facilities in Sparks, Nevada and Dallas, Texas comprising training centers and warehouses, and leases a warehouse and training facility in Bangkok, Thailand. In addition, the Company leases warehouse facilities in Jebal Ali, Dubai and Culemborg, The Netherlands.

The Company’s principal production operations are:

United States
Mansfield (two) and Bellville, Ohio	Glendale, Arizona	Houston, Texas*
Toccoa, Georgia	Olive Branch, Mississippi	Lubbock, Texas (two)
Royersford, Pennsylvania
Other Countries
St. Thomas, Ontario, Canada	County Westmeath, Ireland*	Leeuwarden, The Netherlands*
Culemborg, The Netherlands*	Johannesburg, South Africa*

* Leased properties

Gorman-Rupp considers its plants, machinery and equipment to be well maintained, in good operating condition and adequate for the present uses and business requirements of the Company.

ITEM 3. LEGAL PROCEEDINGS

For more than ten years, numerous business entities in the pump and fluid-handling industries, as well as a multitude of companies in many other industries, have been targeted in a series of lawsuits in several jurisdictions by various individuals seeking redress to claimed injury as a result of the entities’ alleged use of asbestos in their products. The Company and two of its subsidiaries remain drawn into this mass-scaled litigation, typically as one of many co-defendants in a particular proceeding; the majority of these cases were against Patterson Pump Company. The allegations in the lawsuits involving the Company and/or its subsidiaries are vague, general and speculative, and most cases have not advanced beyond the early stage of discovery. Insurers of the Company have engaged legal counsel to represent the Company and its subsidiaries and to protect their interests. In certain situations, the plaintiffs have voluntarily dismissed the Company and/or its

6

PART I – CONTINUED

ITEM 3. LEGAL PROCEEDINGS – CONTINUED

subsidiaries from some of the lawsuits after the plaintiffs have acknowledged that there is no basis for their claims. In other situations, the Company and/or its subsidiaries have been dismissed from some of the lawsuits as a result of court rulings in favor of motions to dismiss and/or motions for summary judgment. In seventy-seven, the Company and/or its subsidiaries have entered into nominal economic settlements recommended and paid for by insurers, coupled with dismissal of the lawsuits. During the fourth quarter 2011, Patterson Pump Company entered into an agreement with plaintiffs’ counsel for the voluntary dismissal of more than 95% of the cases against it at no cost to Patterson Pump Company or its insurer.

In addition, the Company and/or its subsidiaries are parties in a small number of legal proceedings arising in the ordinary course of business. Management does not currently believe that these proceedings, or the industry-wide asbestos litigation, will materially impact the Company’s consolidated results of operations, liquidity or financial condition.

7

PART I – CONTINUED

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

Pursuant to General Instruction G(3), the information regarding executive officers called for by Item 401 of Regulation S-K and by Item 9 of this Form 10-K is set forth below.

				Date Elected
Name	Age		Office	to Position
James C. Gorman		89	Chairman	1989
Jeffrey S. Gorman		61	President and Chief Executive Officer	1998
Wayne L. Knabel		67	Chief Financial Officer and Treasurer	2009
David P. Emmens		65	Corporate Counsel and Corporate Secretary	2002

Except as noted, each of the above-named officers has held his or her executive position with the Company for the past five years. Mr. J. C. Gorman served as the Company’s President from 1964 until 1989, and as Chief Executive Officer from 1964 until 1996. He has served as a Director of the Company continuously since 1946. Mr. J. S. Gorman was elected President and Chief Executive Officer effective May 1, 1998, after having served as Senior Vice President since 1996. Mr. J. S. Gorman also held the position of General Manager of the Mansfield Division from 1989 through 2005. He served as Assistant General Manager from 1986 to 1988; and he held the office of Corporate Secretary from 1982 to 1990. He has served as a Director of the Company continuously since 1989. Mr. Knabel was elected Chief Financial Officer and Treasurer effective May 1, 2009. Mr. Knabel previously served as Vice President Finance since May 1, 2008. Mr. Knabel joined the Company in March 2008. Mr. Emmens joined the Company as Corporate Counsel in 1997, and was elected as Corporate Secretary in 2002. He served as Assistant Corporate Secretary from 1999 to 2002. Mr. J. S. Gorman is the son of Mr. J. C. Gorman. Mr. Christopher H. Lake, a Director of the Company, is the son of Dr. Peter B. Lake, also a Director. There are no other family relationships among any of the Executive Officers and Directors of the Company.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Attention is directed to the section “Quarterly Stock Prices and Dividends” and the data below pertaining to the shareholder information on page 44 in the Company’s 2013 Annual Report to Shareholders, which is incorporated herein by this reference.

Attention is also directed to the “Shareholder Return Performance Presentation” on page 44 in the Company’s 2013 Annual Report to Shareholders, which is incorporated herein by this reference.

The Company did not repurchase any of its Common Shares during the fourth quarter of the period covered by this Form 10-K.

8

PART II – CONTINUED

ITEM 6. SELECTED FINANCIAL DATA

Attention is directed to the section “Eleven Year Summary of Selected Financial Data” on pages 40 and 41 in the Company’s 2013 Annual Report to Shareholders, which is incorporated herein by this reference.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Attention is directed to the section “Management’s Discussion and Analysis” on pages 30 through 37, and to the section “Safe Harbor Statement” on page 45, in the Company’s 2013 Annual Report to Shareholders, which are incorporated herein by this reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Attention is directed to the section “Management’s Discussion and Analysis” on pages 30 through 37, and to the section “Safe Harbor Statement” on page 45, in the Company’s 2013 Annual Report to Shareholders, which are incorporated herein by this reference. The Company’s foreign operations do not involve material market risks due to their relatively small size, both individually and collectively. As indicated in paragraph 3on page 4 referenced above, the Company has no material market risk exposures required to be reported by Item 305 of Regulation S-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Attention is directed to the Company’s consolidated financial statements, the notes thereto and the report of the independent registered public accounting firm thereon on pages 16 through 29, and to the section “Summary of Quarterly Results of Operations” on pages 40 and 41, in the Company’s 2013 Annual Report to Shareholders, which are incorporated herein by this reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. The Company’s disclosure controls and procedures are also designed to ensure that information required to be disclosed in Company reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s Management, including the principal executive

officer and the principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

9

PART II – CONTINUED

ITEM 9A. CONTROLS AND PROCEDURES – CONTINUED

An evaluation was carried out under the supervision and with the participation of the Company’s Management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Based on the evaluation, the principal executive officer and the principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2013.

Management’s Report on Internal Control over Financial Reporting

There were no material weaknesses identified at any Division or Subsidiary of the Company during 2013. The 2013 Report of Management on Internal Control over Financial Reporting and the related Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting are incorporated herein by this reference from pages     and     of the Company’s 2013 Annual Report to Shareholders, respectively.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Attention is directed to the sections “Election of Directors,” “Board of Directors and Board Committees,” “Audit Committee Report” and “Section 16(a) Beneficial Ownership Compliance” in the Company’s definitive Notice of 2014 Annual Meeting of Shareholders and related Proxy Statement (filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K), which are incorporated herein by this reference.

With respect to Executive Officers, attention is directed to Part I of this Form 10-K.

10

PART III – CONTINUED

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE – CONTINUED

The Company has adopted a Code of Ethics that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer, as well as to all employees, officers and Directors. The Code of Ethics is set forth as an exhibit to this Form 10-K. In addition, the Code of Ethics is posted on the Company’s website accessible through its Internet address of www.gormanrupp.com (under the heading “Investor Relations” and the sub-heading “Corporate Governance”), including any amendments.

ITEM 11. EXECUTIVE COMPENSATION

Attention is directed to the sections “Board of Directors and Board Committees,” “Executive Compensation,” “Compensation Discussion and Analysis,” “Pension Benefits,” “Summary Compensation Table,” “Director Compensation,” “Risk Oversight” and “Compensation Committee Report” in the Company’s definitive Notice of 2014 Annual Meeting of Shareholders and related Proxy Statement (filed pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K), which are incorporated herein by this reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Attention is directed to the section “Beneficial Ownership of Shares” and “Election of Directors” in the Company’s definitive Notice of 2014 Annual Meeting of Shareholders and related Proxy Statement (filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K), which are incorporated herein by this reference.

On May 22, 1997, the Company’s Board of Directors adopted a Non-Employee Directors’ Compensation Plan (the “Plan”). This Plan became effective without shareholder approval and constitutes the Company’s only equity compensation plan. The Plan provides (originally through 2006) for share compensation for regular services performed by each of the Company’s non-employee Directors. In addition to cash compensation, non-employee Directors historically received an automatic award of 500 Common Shares (from the Company’s treasury) on each July 1. On July 27, 2006, the Company’s Board of Directors adopted a resolution extending the Non-Employee Directors’ Compensation plan for an additional term until the earlier of (i) May 21, 2017, (ii) at such time as all of the Company’s Common Shares authorized for award under the Plan and registered under Form S-8 Registration Statement No. 333-30159 shall have been awarded and issued, (iii) at such time as the Company deregisters any Common Shares not issued under the foregoing Registration Statement, or (iv) at such time as the Plan is terminated by action of the Board of Directors. On July 28, 2011, the Company’s Board of Directors adopted an amendment effective August 1, 2011 to provide for the aggregate award of 1,000 Common Shares to each Non-Employee Director during 2011 and 1,000 Common Shares each July 1 thereafter. The number of Common Shares which may be awarded under the Plan cannot exceed 50,000, subject to certain conditions (e.g., stock splits, stock dividends).

As of December 31, 2013, 58,000 Common Shares had been issued to non-employee Directors and 27,632 Common Shares remained available for future issuance (6,875 Common Shares were added as a result of the 5 for 4 stock split effective September 10, 2004; 7,093 Common Shares were added as a result of the 5 for 4 stock

11

PART III – CONTINUED

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS – CONTINUED

split effective December 8, 2006; 8,117 Common Shares were added as a result of the 5 for 4 stock split effective December 10, 2007; 8,021 were added as a result of the 5 for 4 stock split effective June 10, 2011; and 5,526 Common Shares were added as a result of the 5 for 4 stock split effective December 10, 2013). No options, warrants or rights are available for issuance under the Plan. Attention is directed to the sections “Board of Directors and Board Committees” and “Beneficial Ownership of Shares” in the Company’s definitive Notice of 2014 Annual Meeting of Shareholders and related Proxy Statement (filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K), which is incorporated herein by this reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

EQUITY COMPENSATION PLAN INFORMATION

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance
Non-Employee Directors’ Compensation Plan (not approved by shareholders)		-0-	$	-0-		27,632
Equity compensation plans approved by shareholders		—		—		—
Total		-0-	$	-0-		27,632

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Attention is directed to the section “Board of Directors and Board Committees” in the Company’s definitive Notice of 2014 Annual Meeting of Shareholders and related Proxy Statement (filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K), which is incorporated herein by this reference. The Company has no relationships or transactions required to be reported by Item 404 of Regulation S-K.

12

PART III – CONTINUED

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Attention is directed to the section “Appointment of Independent Registered Public Accounting Firm” in the Company’s definitive Notice of 2014 Annual Meeting of Shareholders and related Proxy Statement (filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K), which is incorporated herein by this reference.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report:

1. Financial Statements

With respect to the audited consolidated financial statements of the Registrant and its subsidiaries, the following documents have been incorporated by reference into this report:

(i.) Consolidated balance sheets—December 31, 2013 and 2012

(ii.) Consolidated statements of income-Years ended December 31, 2013, 2012, 2011

(iii.) Consolidated statements of comprehensive income-Years ended December 31, 2013, 2012, 2011

(iv.) Consolidated statements of shareholders’ equity-Years ended December 31, 2013, 2012, 2011

(v.) Consolidated statements of cash flows-Years ended December 31, 2013, 2012, 2011

(vi.) Notes to consolidated financial statements

(vii.) 2013 Report of independent registered public accounting firm

(viii.) 2013 Report of management on internal control over financial reporting as of December 31, 2013

(ix.) 2013 Report of independent registered public accounting firm on internal control over financial reporting as of December 31, 2013

2. Financial Statement Schedules

All financial statement schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, or the information required to be set forth therein is included in the consolidated financial statements or Notes thereto.

13

PART III – CONTINUED

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES – CONTINUED

3. Exhibits

The exhibits listed below are submitted in a separate section of this report immediately following the Exhibit Index.

(3)	(i) Articles of incorporation and (ii) By-law
(4)	Instruments defining the rights of security holders, including indentures
(10)	Material contracts
(13)	Annual report to security holders
(14)	Code of ethics
(21)	Subsidiaries of the registrant
(23)	Consent of Independent Registered Public Accounting Firm
(24)	Powers of attorney
(31)	Rule 13a-14(a)/15d-14(a) Certifications
(32)	Section 1350 Certifications
(101.INS)	XBRL Instance Document
(101.SCH)	XBRL Taxonomy Extension Schema Document
(101.CAL)	XBRL Taxonomy Extension Calculation Linkbase Document
(101.DEF)	XBRL Taxonomy Extension Definition Linkbase Document
(101.LAB)	XBRL Taxonomy Extension Label Linkbase Document
(101.PRE)	XBRL Taxonomy Extension Presentation Linkbase Document

14

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE GORMAN-RUPP COMPANY
*By:	DAVID P. EMMENS
	David P. Emmens
	Attorney-In-Fact

Date: March 10, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

*JEFFREY S. GORMAN	President and Chief Executive Officer and Director
Jeffrey S. Gorman	(Principal Executive Officer)
*WAYNE L. KNABEL	Chief Financial Officer
Wayne L. Knabel	(Principal Financial and Accounting Officer)
*JAMES C. GORMAN	Director
James C. Gorman
*M. ANN HARLAN	Director
M. Ann Harlan
*THOMAS E. HOAGLIN	Director
Thomas E. Hoaglin
*CHRISTOPHER H. LAKE	Director
Christopher H. Lake
*PETER B. LAKE	Director
Peter B. Lake
*RICK R. TAYLOR	Director
Rick R. Taylor
*W. WAYNE WALSTON	Director
W. Wayne Walston

* The undersigned, by signing his name hereto, does sign and execute this Annual Report on Form 10-K on behalf of The Gorman-Rupp Company and on behalf of each of the above-named Officers and Directors of The Gorman-Rupp Company pursuant to Powers of Attorney executed by The Gorman-Rupp Company and by each such Officer and Director and filed with the Securities and Exchange Commission.

March 10, 2014

By:	/s/ DAVID P. EMMENS
	David P. Emmens
	Attorney-In-Fact

15

ANNUAL REPORT ON FORM 10-K

THE GORMAN-RUPP COMPANY

For the Year Ended December 31, 2013

EXHIBIT INDEX

Exhibit Number	Description
(3)(4)	Amended Articles of Incorporation, as amended*
(3)(4)	Regulations*
(10) (a)	Form of Indemnification Agreement between the Company and its Directors and Officers**
(10) (b)	Non-Employee Directors’ Compensation Plan***
(13)	Incorporated Portions of 2013 Annual Report to Shareholders
(14)	Code of Ethics
(21)	Subsidiaries of the Company
(23)	Consent of Independent Registered Public Accounting Firm
(24)	Powers of Attorney
(31) (a)	Certification of Chief Executive Officer (Section 302 of the Sarbanes-Oxley Act of 2002)
(31) (b)	Certification of Chief Financial Officer (Section 302 of the Sarbanes-Oxley Act of 2002)
(32)	Certification Pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(101.INS)	XBRL Instance Document
(101.SCH)	XBRL Taxonomy Extension Schema Document
(101.CAL)	XBRL Taxonomy Extension Calculation Linkbase Document
(101.DEF)	XBRL Taxonomy Extension Definition Linkbase Document
(101.LAB)	XBRL Taxonomy Extension Label Linkbase Document
(101.PRE)	XBRL Taxonomy Extension Presentation Linkbase Document

* Incorporated herein by this reference from Exhibit (3) (4) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

** Incorporated herein by this reference from Exhibit (10) (a) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

*** Incorporated herein by this reference from Exhibit (10) (b) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

16

EX-13

Exhibit 13

The Gorman-Rupp Company        Annual Report 2013

Report of Independent Registered

Public Accounting Firm

The Board of Directors and Shareholders of

The Gorman-Rupp Company

We have audited the accompanying consolidated balance sheets of The Gorman-Rupp Company as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company’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 consolidated financial position of The Gorman-Rupp Company at December 31, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Gorman-Rupp Company’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated March 10, 2014 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio

March 10, 2014

16

The Gorman-Rupp Company        Annual Report 2013

Consolidated Statements of Income

	Year ended December 31,
(Thousands of dollars, except per share amounts)	2013			2012			2011
Net sales	$	391,665		$	375,691		$	359,490
Cost of products sold		298,010			285,540			271,653
Gross profit		93,655			90,151			87,837
Selling, general and administrative expenses		51,734			47,968			44,843
Operating income		41,921			42,183			42,994
Other income		3,050			907			409
Other expense		(694	)		(643	)		(718	)
Income before income taxes		44,277			42,447			42,685
Income taxes		14,173			14,244			13,881
Net income	$	30,104		$	28,203		$	28,804
Earnings per share	$	1.15		$	1.07		$	1.10
Average number of shares outstanding		26,249,324			26,242,366			26,234,579

Share amounts have been restated to reflect the 5 for 4 stock split effective December 10, 2013.

See notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income

	Year ended December 31,
(Thousands of dollars)	2013			2012			2011
Net income	$	30,104		$	28,203		$	28,804
Cumulative translation adjustments		(1,381	)		437			(886	)
Pension and postretirement medical liability adjustments, net of tax		9,202			(675	)		(5,730	)
Other comprehensive income (loss)		7,821			(238	)		(6,616	)
Comprehensive income	$	37,925		$	27,965		$	22,188

See notes to consolidated financial statements.

17

The Gorman-Rupp Company        Annual Report 2013

Consolidated Balance Sheets

	December 31,
(Thousands of dollars)	2013		2012
Assets
Current assets:
Cash and cash equivalents	$	31,123	$	20,119
Short-term investments		253		254
Accounts receivable – net		59,374		58,712
Inventories – net:
Raw materials and in-process		26,877		23,967
Finished parts		46,491		52,607
Finished products		16,578		14,324
		89,946		90,898
Deferred income taxes		3,803		2,803
Prepaid and other		4,790		2,889
Total current assets		189,289		175,675
Property, plant and equipment:
Land		3,048		3,048
Buildings		96,775		96,261
Machinery and equipment		153,935		143,471
		253,758		242,780
Accumulated depreciation		122,569		119,714
Property, plant and equipment – net		131,189		123,066
Deferred income taxes		20		153
Other		3,637		4,003
Goodwill and other intangible assets – net		31,503		32,286
	$	355,638	$	335,183

Share amounts have been restated to reflect the 5 for 4 stock split effective December 10, 2013.

See notes to consolidated financial statements.

18

The Gorman-Rupp Company        Annual Report 2013

	December 31,
	2013			2012
Liabilities and equity
Current liabilities:
Accounts payable	$	17,882		$	14,897
Short-term debt		9,000			22,000
Payroll and employee related liabilities		11,020			10,646
Commissions payable		6,081			7,568
Deferred revenue		7,190			—
Accrued expenses		9,587			9,710
Total current liabilities		60,760			64,821
Pension benefits		—			7,517
Postretirement benefits		18,393			22,399
Deferred and other income taxes		12,345			5,727
Total liabilities		91,498			100,464
Equity:
Common shares, without par value:
Authorized – 35,000,000 shares;
Outstanding – 26,253,043 shares in 2013 and 26,246,116 shares in 2012 (after deducting treasury shares of 795,753 in 2013 and 803,254 in 2012) at stated capital amount		5,131			5,130
Additional paid-in capital		2,822			2,693
Retained earnings		264,648			243,178
Accumulated other comprehensive loss		(8,461	)		(16,282	)
Total equity		264,140			234,719
	$	355,638		$	335,183

19

The Gorman-Rupp Company        Annual Report 2013

Consolidated Statements of Equity

								Accumulated
			Additional					Other
	Common		Paid-In		Retained			Comprehensive
(Thousands of dollars, except per share amounts)	Shares		Capital		Earnings			Income (Loss)			Total
Balances January 1, 2011	$	5,127	$	2,400	$	201,735		$	(9,428	)	$	199,834
Net income						28,804						28,804
Other comprehensive loss									(6,616	)		(6,616	)
Issuance of 7,500 treasury shares		1		144		27						172
Cash dividends—$0.283 a share						(7,430	)					(7,430	)
Balances December 31, 2011		5,128		2,544		223,136			(16,044	)		214,764
Net income						28,203						28,203
Other comprehensive loss									(238	)		(238	)
Issuance of 7,500 treasury shares		2		149		27						178
Cash dividends—$0.312 a share						(8,188	)					(8,188	)
Balances December 31, 2012		5,130		2,693		243,178			(16,282	)		234,719
Net income						30,104						30,104
Other comprehensive income									7,821			7,821
Issuance of 7,500 treasury shares		1		129		28						158
Cash dividends—$0.330 a share						(8,662	)					(8,662	)
Balances December 31, 2013	$	5,131	$	2,822	$	264,648		$	(8,461	)	$	264,140

Share amounts have been restated to reflect the 5 for 4 stock split effective December 10, 2013.

See notes to consolidated financial statements.

20

The Gorman-Rupp Company        Annual Report 2013

Consolidated Statements of Cash Flows

	Year ended December 31,
(Thousands of dollars)	2013			2012			2011
Cash flows from operating activities:
Net income	$	30,104		$	28,203		$	28,804
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,588			12,066			11,459
Pension expense		7,164			6,946			6,070
Contributions to pension plan		(4,200	)		(7,200	)		(7,200	)
Deferred income taxes		241			2,193			1,608
Gain on sale of machinery and equipment		(2,535	)		—			—
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable – net		(662	)		710			(4,423	)
Inventories – net		(48	)		(8,583	)		(21,744	)
Accounts payable		2,985			(1,911	)		3,637
Commissions payable		(1,487	)		(189	)		1,166
Deferred revenue		7,112			—			—
Accrued expenses		6,947			4,727			8,211
Benefit obligations and other		(8,823	)		(4,329	)		(6,456	)
Net cash provided by operating activities		50,386			32,633			21,132
Cash flows from investing activities:
Capital additions		(21,015	)		(16,373	)		(11,175	)
Proceeds from sale of machinery and equipment		2,905			—			—
Redemptions of short-term investments		1			805			958
Payments for acquisitions, net of cash acquired		—			(20,823	)		—
Net cash used for investing activities		(18,109	)		(36,391	)		(10,217	)
Cash flows from financing activities:
Cash dividends		(8,662	)		(8,188	)		(7,430	)
Proceeds from bank borrowings		6,000			17,000			—
Payments to bank for borrowings		(19,000	)		(5,000	)		(15,000	)
Net cash (used for) provided by financing activities		(21,662	)		3,812			(22,430	)
Effect of exchange rate changes on cash		389			(77	)		(572	)
Net increase (decrease) in cash and cash equivalents		11,004			(23	)		(12,087	)
Cash and cash equivalents:
Beginning of year		20,119			20,142			32,229
End of year	$	31,123		$	20,119		$	20,142

See notes to consolidated financial statements.

21

The Gorman-Rupp Company        Annual Report 2013

Notes to Consolidated Financial Statements

(Amounts in tables in thousands of dollars)

Note A – Summary of Significant Accounting Policies

General Information and Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Earnings per share are calculated based on the weighted-average number of common shares outstanding.

Common Stock Split

On October 24, 2013, the Company declared a five-for-four split of its common shares in the form of a distribution of one additional common share for each four common shares previously issued. The distribution was made on December 10, 2013. Accordingly, all share amounts and per share data throughout this Annual Report have been restated to reflect the stock split.

Cash Equivalents and Short-Term Investments

The Company considers highly liquid instruments with maturities of 90 days or less to be cash equivalents. The Company periodically makes short-term investments for which cost approximates fair value. Short-term investments at December 31, 2013 and 2012 consist primarily of certificates of deposit.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products delivered. The Company estimates this allowance based on knowledge of the financial condition of customers, review of historical receivables and reserve trends and other relevant information.

Inventories

Inventories are stated at the lower of cost or market. The costs for approximately 76% of inventories at December 31, 2013 and 73% of inventories at December 31, 2012 are determined using the last-in, first-out (LIFO) method, with the remainder determined using the first-in, first-out method (FIFO). Cost components include materials, inbound freight costs, labor and allocations of fixed and variable overheads on an absorption costing basis.

Long-Lived Assets

Property, plant and equipment are stated on the basis of cost. Repairs and maintenance costs are expensed as incurred. Depreciation for property, plant and equipment and amortization for finite-lived intangible assets are computed by the straight-line method over the estimated useful lives of the assets and are included in cost of products sold and selling, general and administrative expenses based on the use of the assets. Depreciation expense was $12.4 million, $11.2 million and $10.5 million during 2013, 2012 and 2011, respectively.

Depreciation of property, plant and equipment is determined based on the following lives:

Buildings	20-50 years
Machinery and equipment	5-15 years
Software	3-5 years

Amortization of finite-lived intangible assets is determined based on the following lives:

Technology and drawings	15-20 years
Customer relationships	9-10 years
Other intangibles	2-18 years

Long-lived assets, except goodwill and indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recovered through future net cash flows generated by the assets. Impairment losses may be recorded when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts based on the excess of the carrying amounts over the estimated fair value of the assets.

Goodwill and Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets primarily consist of trademarks and trade names. Goodwill and indefinite-lived intangible assets are tested annually for impairment as of October 1, or whenever events or changes in circumstances indicate there may be a possible permanent loss of value in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other.

Goodwill is tested for impairment at the applicable reporting unit level and is based on the net assets for the applicable reporting unit, including goodwill and intangible assets. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair

22

The Gorman-Rupp Company        Annual Report 2013

value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary.

In assessing the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we identify and assess relevant drivers of fair value and events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments and assumptions. The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Company specific events and share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.

If our qualitative assessment concludes that it is more likely than not that impairment exists then a quantitative assessment is required. In a quantitative assessment, a discounted cash flow model is used to estimate the fair value of each reporting unit, which considers forecasted cash flows discounted at a market based weighted-average cost of capital. The forecasted cash flows are based on the Company’s long-term operating plan and the weighted-average cost of capital is an estimate of the overall after-tax rate of return of market participants. Other valuation techniques including comparative market multiples are used when appropriate. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.

The Company has completed its annual goodwill impairment test for each year presented and concluded no reporting unit was at risk of failing the impairment test for any periods presented herein.

In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02 which amends the rules for testing indefinite-lived intangible assets other than goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount similar

to the goodwill impairment testing described above. The Company early-adopted ASU 2012-02 for its October 1, 2012 annual impairment test. The Company has completed its annual impairment test for each year presented and concluded that the fair value of indefinite-lived intangible assets substantially exceeded the respective carrying value.

Revenue Recognition

The Company’s revenues from product sales are recognized when all of the following criteria are met: persuasive evidence of a sale arrangement exists, the price is fixed or determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectability is probable. Product delivery occurs when the risks and rewards of ownership and title pass, which normally occurs upon shipment to the customer.

Concentration of Credit Risk

The Company generally does not require collateral from its customers and has a very good collection history. There were no sales to a single customer that exceeded 10% of total net sales for the years ended December 31, 2013, 2012 or 2011.

Shipping and Handling Costs

The Company classifies all amounts billed to customers for shipping and handling as revenue and reflects related shipping and handling costs in cost of products sold.

Advertising

The Company expenses all advertising costs as incurred, which for the years ended December 31, 2013, 2012 and 2011 totaled $3.4 million, $3.5 million, and $3.4 million, respectively.

Product Warranties

A liability is established for estimated future warranty and service claims based on historical claims experience and specific product failures. The Company expenses warranty costs directly to cost of products sold. Changes in the Company’s product warranty liability are:

	2013		2012		2011
Balance at beginning of year	$	1,133	$	1,228	$	1,543
Provision		1,220		1,394		1,081
Claims		(1,183)		(1,489)		(1,396)
Balance at end of year	$	1,170	$	1,133	$	1,228

23

The Gorman-Rupp Company        Annual Report 2013

Notes to Consolidated Financial Statements

(Amounts in tables in thousands of dollars)

Foreign Currency Translation

Assets and liabilities of the Company’s operations outside the United States which are accounted for in a functional currency other than U.S. dollars are translated into U.S. dollars using year-end exchange rates. Revenues and expenses are translated at weighted-average exchange rates effective during the year. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within equity.

Gains and losses resulting from foreign currency transactions, the amounts of which are not material, are included in net income.

Fair Value

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximates their fair value.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Note B – Allowance for Doubtful Accounts

The allowance for doubtful accounts was $498,000 and $561,000 at December 31, 2013 and 2012, respectively.

Note C – Inventories

Inventories are stated at the lower of cost or market. Replacement cost approximates current cost and the excess over LIFO cost is approximately $55.3 million and $53.2 million at December 31, 2013 and 2012, respectively. Allowances for excess and obsolete inventory totaled $3.8 million and $3.3 million at December 31, 2013 and 2012, respectively.

Note D – Financing Arrangements

On December 17, 2012, the Company borrowed $17.0 million under an unsecured bank loan agreement to finance the acquisition of American Turbine. The loan bears interest at LIBOR plus 0.75%, adjustable and payable monthly, and, with annual renewal, matures in August 2015. At December 31, 2013, $3.0 million was outstanding against this agreement.

On December 6, 2013, the Company borrowed $6.0 million in a promissory note for the purchase of equipment. The loan bears interest at LIBOR plus 0.75%, adjustable and payable monthly, and is expected to be paid in full by December 31, 2014.

The Company may borrow up to $20.0 million with interest at LIBOR plus 0.75% or at alternative rates as selected by the Company under an unsecured bank line of credit which matures in August, 2015. At December 31, 2013 and 2012, $20.0 million and $19.3 million, respectively, were available for borrowing after deducting $700,000 in outstanding letters of credit in 2012.

The Company also has a $10.0 million unsecured bank line of credit with interest at LIBOR plus 0.75% payable monthly which matures in May 2014. At December 31, 2013 and 2012, $6.0 million and $4.9 million, respectively, was available for borrowing after deducting $4.0 million and $5.1 million in outstanding letters of credit, respectively.

The financing arrangements described above contain nominal restrictive covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios. At December 31, 2013 and 2012, the Company was in compliance with all requirements.

Interest expense, which approximates interest paid, was $146,000, $122,000 and $179,000 in 2013, 2012 and 2011, respectively.

The Company has operating leases for certain offices, manufacturing facilities, land, office equipment and automobiles. Rental expense relating to operating leases was $1,109,000, $1,068,000 and $866,000 in 2013, 2012 and 2011, respectively.

The future minimum lease payments due under these operating leases as of December 31, 2013 are:

2014		2015		2016		2017		2018		Thereafter		Total
$	860	$	539	$	398	$	272	$	211	$	11	$	2,291

Note E – Accumulated Other Comprehensive Loss

The reclassifications out of accumulated other comprehensive loss as reported in the Consolidated Statement of Income are:

Pension and other post retirement benefits:	2013			2012			2011
Recognized actuarial gain (loss) (a)	$	10,282		$	(3,922	)	$	(12,022	)
Settlement loss (b)		2,756			1,940			1,987
Settlement loss (c)		1,413			995			1,023
Total before income tax		14,451			(987	)		(9,012	)
Income tax		(5,249	)		312			3,282
Net of income tax	$	9,202		$	(675	)	$	(5,730	)

24

The Gorman-Rupp Company        Annual Report 2013

(a) The recognized actuarial gain (loss) is included in the computation of net periodic benefit cost. See Note G for additional details.

(b) This portion of the settlement loss is included in Cost of products sold in the Consolidated Statements of Income.

(c) This portion of the settlement loss is included in Selling, general and administrative expenses in the Consolidated Statements of Income.

The components of accumulated other comprehensive loss as reported in the Consolidated Balance Sheets are:

							Accumulated
	Currency			Pension and			Other
	Translation			OPEB			Comprehensive
	Adjustments			Adjustments			Income (Loss)
Balance at January 1, 2011	$	768		$	(10,196	)	$	(9,428	)
Current period charge		(886	)		(9,012	)		(9,898	)
Income tax benefit		—			3,282			3,282
Balance at December 31, 2011		(118	)		(15,926	)		(16,044	)
Current period credit (charge)		437			(987	)		(550	)
Income tax benefit		—			312			312
Balance at December 31, 2012		319			(16,601	)		(16,282	)
Current period (charge) credit		(1,381	)		14,451			13,070
Income tax (charge)		—			(5,249	)		(5,249	)
Balance at December 31, 2013	$	(1,062	)	$	(7,399	)	$	(8,461	)

Note F – Income Taxes

The components of income before income taxes are:

	2013		2012		2011
United States	$	40,374	$	40,019	$	37,329
Foreign countries		3,903		2,428		5,356
Total	$	44,277	$	42,447	$	42,685

The components of income tax expense are:

	2013			2012			2011
Current expense:
Federal	$	12,159		$	11,542		$	10,037
Foreign		792			(342	)		1,576
State and local		981			1,021			761
		13,932			12,239			12,374
Deferred expense (benefit):
Federal		108			2,109			1,429
Foreign		(38	)		(189	)		(101	)
State and local		171			85			179
		241			2,005			1,507
Income tax expense	$	14,173		$	14,244		$	13,881

The reconciliation between income tax expense and the amount computed by applying the statutory federal income tax rate of 35% to income before income taxes is:

	2013			2012			2011
Income taxes at statutory rate	$	15,497		$	14,856		$	14,940
State and local income taxes, net of federal tax benefit		587			719			611
Research and development tax credits		(740	)		—			(375	)
Domestic production activities		(952	)		(980	)		(811	)
Lower foreign taxes differential		(612	)		(528	)		(577	)
Uncertain tax positions		94			(236	)		49
Valuation Allowance		162			—			—
Other		137			413			44
Income tax expense	$	14,173		$	14,244		$	13,881

The Company made income tax payments of $13.2 million, $12.0 million and $10.3 million in 2013, 2012 and 2011, respectively.

Deferred income tax assets and liabilities consist of:

	2013			2012			2011
Deferred tax assets:
Inventories	$	1,688		$	170		$	49
Accrued liabilities		2,341			2,430			2,506
Postretirement health benefits obligation		6,545			7,848			8,060
Pension		—			1,217			873
Other		101			452			1,634
Total deferred income tax assets		10,675			12,117			13,122
Valuation allowance		(162	)		—			—
Net deferred income tax assets		10,513			12,117			13,122
Deferred tax liabilities:
Depreciation and amortization		16,858			14,376			13,419
Pension		1,634			—			—
		18,492			14,376			13,419
Net deferred tax liabilities	$	(7,979	)	$	(2,259	)	$	(297	)

The Company has a valuation allowance as of December 31, 2013 of $162,000 against certain of its deferred tax assets. ASC 740 requires that a valuation allowance be recorded against deferred tax assets when it is more likely than not that some or all of a Company’s deferred tax assets will not be realized based on available positive and negative evidence.

25

The Gorman-Rupp Company        Annual Report 2013

Notes to Consolidated Financial Statements

(Amounts in tables in thousands of dollars)

At December 31, 2013, total unrecognized tax benefits were $516,000. Of the total, $412,000 of unrecognized tax benefits, if ultimately recognized, would reduce the Company’s annual effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2013			2012			2011
Balance at beginning of year	$	421		$	1,423		$	1,298
Additions based on tax positions related to the current year		189			68			132
(Reduction) additions for tax positions of prior years		—			(1	)		117
Reductions due to lapse of applicable statute of limitations		(46	)		(131	)		(124	)
Settlements		(48	)		(938	)		—
Balance at end of year	$	516		$	421		$	1,423

The Company is subject to income taxes in the U.S. federal and various state, local and foreign jurisdictions. Income tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2010. The Company has $56,000 of unrecognized tax benefits recorded for periods which the relevant statutes of limitations expire in the next 12 months.

As of December 31, 2013, the Company has state tax credit carryforwards of $343,000 set to expire between 2018 and 2022.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense for all periods presented. The Company accrued approximately $85,000, $91,000 and $361,000 for the payment of interest and penalties at December 31, 2013, 2012 and 2011 respectively.

The Company has not provided an estimate for any U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries that might be payable if these earnings were repatriated since the Company considers these amounts to be permanently invested. It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on remittance of such earnings.

In September 2013, the Internal Revenue Service issued final regulations governing the income tax treatment of acquisitions, dispositions, and repairs of tangible property. Taxpayers are required to follow the new regulations in taxable years beginning on or after January 1, 2014.

Management is currently assessing the impact of the regulations and does not expect they will have a material impact on the Company’s financial statements.

Note G – Pensions and Other Postretirement Benefits

The Company sponsors a defined benefit pension plan (“Plan”) covering certain domestic employees. Benefits are based on each covered employee’s years of service and compensation. The Plan is funded in conformity with the funding requirements of applicable U.S. regulations. The Plan was closed to new participants effective January 1, 2008. Employees hired after this date, in eligible locations, participate in an enhanced 401(k) plan instead of the defined benefit pension plan. Employees hired prior to this date continue to accrue benefits.

Additionally, the Company sponsors defined contribution pension plans made available to all domestic and Canadian employees. Total contributions for the plans in 2013, 2012 and 2011 were $1.34 million, $1.22 million and $1.0 million, respectively.

The Company also sponsors a non-contributory defined benefit health care plan that provides health benefits to certain domestic and Canadian retirees and their spouses. The Company funds the cost of these benefits as incurred. For measurement purposes, and based on maximum benefits as defined by the plan, a zero percent annual rate of increase in the per capita cost of covered health care benefits for retirees age 65 and over was assumed for 2013 and is expected to remain constant going forward. A 5% rate of increase for retirees under age 65 was assumed.

The Company recognizes the obligations associated with its defined benefit pension plan and defined benefit health care plan in its consolidated financial statements. The following table presents the plans’ funded status as of the measurement date reconciled with amounts recognized in the Company’s consolidated balance sheets:

	Pension						Postretirement
	Plan						Plan
	2013			2012			2013			2012
Accumulated benefit obligation at end of year	$	57,632		$	65,427		$	19,794		$	23,794
Change in benefit obligation:
Benefit obligation at beginning of year	$	81,148		$	72,325		$	23,794		$	24,094
Service cost		3,144			3,188			1,153			1,156
Interest cost		2,851			2,803			724			871
Settlement		191			263			—			—
Benefits paid		(11,371	)		(6,974	)		(1,370	)		(1,324	)
Effect of foreign exchange		—			—			(68	)		24
Actuarial (gain) loss		(5,328	)		9,543			(4,439	)		(1,027	)
Benefit obligation at end of year	$	70,635		$	81,148		$	19,794		$	23,794

26

The Gorman-Rupp Company        Annual Report 2013

	Pension						Postretirement
	Plan						Plan
	2013			2012			2013			2012
Change in plan assets:
Fair value of plan assets at beginning of year	$	73,631		$	65,754		$	—		$	—
Actual return on plan assets		4,429			7,651			—			—
Employer contributions		4,200			7,200			1,370			1,324
Benefits paid		(11,371	)		(6,974	)		(1,370	)		(1,324	)
Fair value of plan assets at end of year		70,889			73,631			—			—
Funded status at end of year	$	254		$	(7,517	)	$	(19,794	)	$	(23,794	)
Amounts recognized in the Consolidated Balance Sheets consist of:
Noncurrent assets	$	254		$	—		$	—		$	—
Total assets	$	254		$	—		$	—		$	—
Current liabilities	$	—		$	—		$	(1,401	)	$	(1,395	)
Noncurrent liabilities		—			(7,517	)		(18,393	)		(22,399	)
Total liabilities	$	—		$	(7,517	)	$	(19,794	)	$	(23,794	)
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss (gain)	$	24,295		$	35,029		$	(11,871	)	$	(8,154	)
Deferred tax (benefit) expense		(9,496	)		(13,434	)		4,471			3,160
After tax actuarial loss (gain)	$	14,799		$	21,595		$	(7,400	)	$	(4,994	)
Components of net periodic benefit cost:
Service cost	$	3,144		$	3,188		$	1,153		$	1,156
Interest cost		2,851			2,803			724			871
Expected return on plan assets		(5,080	)		(4,591	)		—			—
Recognized actuarial loss (gain)		2,080			2,441			(723	)		(647	)
Settlement loss		4,169			2,935			—			—
Net periodic benefit cost	$	7,164		$	6,776		$	1,154		$	1,380
Other changes in plan assets and benefit obligations recognized in other comprehensive loss:
Net (gain) loss	$	(10,734	)	$	1,371		$	(3,717	)	$	(384	)
Total (income) expense recognized in net periodic benefit cost and other comprehensive income	$	(3,570	)	$	8,147		$	(2,563	)	$	996

During 2013, 2012 and 2011, the Company recorded settlement losses relating to retirees that received lump-sum distributions from the Company’s defined benefit pension plan totaling $4.2 million, $2.9 million and $3.0 million, respectively. These charges were the result of lump-sum payments to retirees which exceeded the plan’s actuarial service and interest cost thresholds in each of 2013 and 2012.

The prior service cost is amortized on a straight-line basis over the average estimated remaining service period of active participants. The unrecognized actuarial gain or loss in excess of the greater of 10% of the benefit obligation or the market value of plan assets is also amortized on a straight-line basis over the average estimated remaining service period of active participants.

	Pension						Postretirement
	Benefits						Benefits
	2013			2012			2013			2012
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate		4.30	%		3.40	%		4.50	%		3.20	%
Rate of compensation increase		3.50	%		3.50	%		—			—
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate		4.30	%		4.00	%		3.20	%		3.76	%
Expected long-term rate of return on plan assets		7.00	%		7.00	%		—			—
Rate of compensation increase		3.50	%		3.50	%		—			—

To enhance the Company’s efforts to mitigate the impact of the defined benefit pension plan on its financial statements, the Company has recently moved towards a liability driven investing model to more closely align assets with liabilities based on when the liabilities are expected to come due. Currently, based on 2013 funding levels, equities may comprise between 20% to 40% of the Plan’s market value. Fixed income investments may comprise between 50% to 70% of the Plan’s market value. Alternative investments may comprise between 0% to 12% of the Plan’s market value. Cash and cash equivalents (including all senior debt securities with less than one year to maturity) may comprise between 0% to 10% of the Plan’s market value.

Financial instruments included in pension plan assets are categorized into a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology. Level 1 assets are based on unadjusted quoted prices in active markets that are accessible to the reporting entity at the measurement

27

The Gorman-Rupp Company        Annual Report 2013

Notes to Consolidated Financial Statements

(Amounts in tables in thousands of dollars)

date for identical assets. Level 2 assets are valued at inputs other than quoted prices in active markets for identical assets that are observable either directly or indirectly for substantially the full term of the assets. Level 3 assets are valued based on unobservable inputs for the asset (i.e., supported by little or no market activity). These inputs include management’s own assessments about the assumptions that market participants would use in pricing assets (including assumptions about risk). The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measure in its entirety.

All of the Plan’s assets are in level 1 or level 2 within the fair value hierarchy, and the following table sets forth by asset class the Plan’s fair value of assets.

Plan fair value asset allocation by category:

2013	$		%
Level 1
Equity	$	21,795		31	%
Fixed Income		919		1	%
Mutual Funds		5,031		7	%
Money Fund		2,043		3	%
Cash		90		0	%
Total Level 1		29,878		42	%
Level 2
Fixed Income		35,540		50	%
Money Fund		5,471		8	%
Total Level 2		41,011		58	%
Level 3
Total Level 3		—		—
Total fair value of Plan assets	$	70,889		100	%

2012	$		%
Level 1
Equity	$	27,628		38	%
Fixed Income		39,778		54	%
Balanced		6,210		8	%
Cash		15		—
Total Level 1		73,631		100	%
Level 2
Total Level 2		—		—
Level 3
Total Level 3		—		—
Total fair value of Plan assets	$	73,631		100	%

Contributions

The Company expects to contribute $4 million to $5 million to its pension plan in 2014.

Expected future benefit payments

The following benefit payments are expected to be paid as follows based on actuarial calculations:

	2014		2015		2016		2017		2018		Thereafter
Pension	$	3,923	$	4,337	$	4,753	$	5,409	$	5,802	$	29,982
Postretirement		1,432		1,399		1,412		1,466		1,561		8,454

A one percentage point increase in the assumed health care trend rate would increase postretirement expense by approximately $223,000, changing the benefit obligation by approximately $1.65 million; while a one percentage point decrease in the assumed health care trend rate would decrease postretirement expense by approximately $209,000, changing the benefit obligation by approximately $1.53 million.

A one percentage point change in the assumed rate of return on the defined benefit pension plan assets is estimated to have an approximate $738,000 effect on pension expense. Additionally, a one percentage point increase in the discount rate is estimated to have a $1.5 million decrease in pension expense, while a one percentage point decrease in the discount rate is estimated to have a $1.8 million increase in pension expense.

Note H – Goodwill and Other Intangible Assets

The major components of goodwill and other intangible assets are:

	2013				2012
	Historical		Accumulated		Historical		Accumulated
	Cost		Amortization		Cost		Amortization
Finite-lived intangible assets:
Customer relationships	$	8,170	$	2,403	$	8,366	$	1,582
Technology & drawings		5,790		1,685		5,790		1,379
Other intangibles		1,568		1,505		1,560		1,453
Total finite-lived intangible assets		15,528		5,593		15,716		4,414
Goodwill		18,046		—		17,452		—
Trade names & trademarks		3,522		—		3,532		—
Total	$	37,096	$	5,593	$	36,700	$	4,414

28

The Gorman-Rupp Company        Annual Report 2013

Amortization of intangible assets in 2013, 2012 and 2011 was $1,179,000, $869,000 and $955,000, respectively. Amortization of these intangible assets for 2014 through 2018 is expected to approximate $1.2 million per year. Pursuant to the acquisitions described in Note J, in 2012 the Company recognized customer relationships of $3.1 million, technology and drawings of $1.2 million, tradenames and trademarks of $612,000 and goodwill of $2.8 million. The remaining changes occurring in 2012 relate to foreign currency translation affects and amortization.

Note I – Business Segment Information

The Company operates in one business segment comprising the design, manufacture and sale of pumps and pump systems. The Company’s products are used in water, wastewater, construction, industrial, petroleum, original equipment, agriculture, fire protection, heating, ventilation and air conditioning (HVAC), military and other liquid-handling applications.

The pumps and pump systems are marketed in the United States and worldwide through a network of more than 1,000 distributors, through manufacturers’ representatives (for sales to many original equipment manufacturers), through third-party distributor catalogs, and by direct sales. International sales are made primarily through foreign distributors and representatives.

The Company sells to more than 120 countries around the world. The components of customer sales, determined based on the location of customers are:

	2013		%		2012		%		2011		%
United States	$	257,038		66	$	239,153		64	$	241,405		67
Foreign countries		134,627		34		136,538		36		118,085		33
Total	$	391,665		100	$	375,691		100	$	359,490		100

Net sales from external customers by product category are:

	2013		2012		2011
Pumps and pump systems	$	336,779	$	318,235	$	303,479
Repairs and other		54,886		57,456		56,011
Total	$	391,665	$	375,691	$	359,490

As of December 31, 2013 and 2012, 99% and 98% of the Company’s long-lived assets were located in the United States, respectively.

Note J – Acquisitions

During the year ended December 31, 2012, the Company completed two business combinations. The results of operations of the acquired companies have been included in Gorman-Rupp’s consolidated results since the effective date of each transaction. The Company financed the all-cash acquisitions through cash on hand and borrowed $17.0 million under a short-term unsecured bank loan agreement. Supplemental pro forma information has not been provided as the acquisitions did not have a material impact on the Company’s consolidated results of operations individually or in aggregate.

In September 2012, the Company’s wholly-owned subsidiary, Gorman-Rupp Africa Proprietary Limited (“GR Africa”), purchased the business of Pumptron (Proprietary) Limited (“Pumptron”) through internally generated cash flows. Pumptron has been an international value-added distributor for Gorman-Rupp for over 25 years and will further enhance the Company’s continuing international expansion. Founded in 1986, Pumptron is a leading provider of water-related pumping solutions primarily serving the construction, mining, agricultural and municipal markets in South Africa and increasingly throughout other sub-Sahara African countries. Pumptron is headquartered in Johannesburg with operating locations in Cape Town and Durban, all in South Africa, and had approximately $10 million in revenue during its fiscal year 2012, which consisted primarily of Gorman-Rupp products.

In December 2012, the Company’s wholly-owned subsidiary, National Pump Company, acquired substantially all of the assets and certain liabilities of American Turbine. Founded in 1975, American Turbine is a group of companies that collectively are a leading manufacturer and distributor of energy-efficient vertical turbine and submersible pumps primarily serving agricultural, municipal and industrial markets, both domestically and globally. During 2011, American Turbine had approximately $15 million in revenue from sales of its products through its Lubbock, Texas headquarters and two other locations in Houston, Texas and Fresno, California. American Turbine will help expand sales in target growth markets and complement existing brands of National Pump Company. In addition, the acquired facilities will provide additional capacity, including machining and testing capabilities.

29

The Gorman-Rupp Company        Annual Report 2013

Management’s Discussion and Analysis

Executive Overview and Outlook

The Gorman-Rupp Company is a leading designer, manufacturer and international marketer of pumps and pump systems for use in diverse water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire protection, heating, ventilating and air conditioning (HVAC), military and other liquid-handling applications. The Company attributes its success to long-term product quality, applications and performance combined with timely delivery and service, and continually develops initiatives to improve performance in these key areas.

Gorman-Rupp actively pursues growth opportunities through organic growth, international business opportunities and acquisitions. We continually invest in training for our employees, new product development and modern manufacturing equipment and technology designed to increase production efficiency and capacity and drive growth by delivering innovative solutions to our customers.

The following discussion of Results of Operations includes certain non-GAAP financial measures. The adjusted gross margins, operating margins and earnings per share amounts exclude non-cash pension settlement charges as a result of continuing lump sum payments related to the defined benefit pension plan. Management utilizes these adjusted financial measures to assess comparative operations against those of prior periods without the distortion of this non-operating factor. The Company believes that these non-GAAP financial measures will be useful to investors as well as to assess the continuing strength of the Company’s underlying operations.

The Company achieved record sales during 2013 and attained its forty-first consecutive year of increased cash dividends paid to shareholders. Operating results for 2013 include Gorman-Rupp Africa and American Turbine results for a full year, after being acquired in the third and fourth quarters of 2012, respectively.

Net sales for the year ended December 31, 2013 increased 4.3% to a record $391.7 million compared to $375.7 million during the same period in 2012.

Domestic sales increased 7.5% or $17.9 million due to the improving U.S. economy and the inclusion of the 2012 acquisitions sales for the entire year in 2013. The increase in water end market sales of $13.3 million was primarily due to shipments for the fire and agricultural markets and for Gulf Coast flood control projects. This increase was partially offset by reduced construction market demand for pumps from rental businesses as compared to the market’s strong sales early in 2012. Increased shipments for the petroleum and industrial markets were the major contributors to the increase in non-water market sales of $2.8 million.

Gross profit was a record $93.7 million in 2013, resulting in gross margin of 23.9% compared to 24.0% in 2012. Operating income was $41.9 million resulting in operating margin of 10.7% compared to 11.2% in 2012. Excluding the pension settlement charges, gross margin would have been 24.6% and 24.5%, respectively, and operating margin would have been 11.8% for 2013 and 12.0% for 2012.

Net income for 2013 was a record $30.1 million compared to $28.2 million in 2012. Earnings per share were $1.15 and $1.07 for the respective years. Excluding the decrease of $0.10 and $0.08 per share due to the non-cash pension settlement charges described above, earnings per share would have been $1.25 and $1.15 for 2013 and 2012, respectively.

The Company’s backlog of orders was $182.2 million at December 31, 2013 compared to $143.4 million a year ago and $190.7 million at September 30, 2013. The increase in backlog from a year ago reflects the 2013 award of the Permanent Canal Closure Project (“PCCP”) contract of approximately $60.0 million to supply major flood control pumps to a member of a joint venture construction group for a significant New Orleans flood control project. Approximately $57.6 million of the project remain in the December 31, 2013 backlog total. The pumps for this project are expected to be shipped primarily in the second half of 2014 and first half of 2015. The PCCP is a fixed price contract and full government funding has been appropriated for the project.

30

The Gorman-Rupp Company        Annual Report 2013

The Company’s balance sheet continues to remain strong with $31.4 million of cash and short-term investments at December 31, 2013. The Company generated a record $50.4 million in operating cash flow during 2013 compared to $32.6 million during 2012 and has excellent liquidity and flexibility. Working capital increased 15.9% to $128.5 million at December 31, 2013 compared to $110.9 million a year ago, primarily due to increased sales and reduced short-term debt. Short-term debt totaled $9.0 million at year end 2013.

We are beginning to see some stabilization in key markets, and, with a strong order backlog, 2014 is expected to be an expansion year for the Company. The Company remains focused on providing high quality products and maintaining a very strong balance sheet which provides excellent financial flexibility to position us for future growth opportunities.

We believe that the Company is well positioned to grow organically at generally comparable operating margins over the long term by expanding our customer base, both domestically and globally, and through new product offerings. We expect that the increasing need for water and wastewater infrastructure rehabilitation within the United States, and similar needs internationally, along with increasing demand for pumps and pump systems for industrial and agricultural applications, will provide excellent growth opportunities for Gorman-Rupp in the future.

Results of Operations – 2013 Compared to 2012:

The Company attained record net sales of $391.7 million in 2013 compared to net sales of $375.7 million in 2012, an increase of $16.0 million or 4.3%. Major contributors to the increase included an $8.7 million increase in fire pump shipments in the U.S. due to some increases in large building construction, a $7.8 million increase in the agriculture market for irrigation pumps, due to a 2012 acquisition, and an increase of $5.2 million in the municipal market, partially offset by an $8.4 million decrease in the construction market when compared to the strong fracking market early in 2012.

International sales were $134.6 million in 2013 compared to a record $136.5 million in 2012, a slight decrease of $1.9 million or 1.4% from the prior year. International sales represented 34.4% and 36.3% of total sales for the Company in 2013 and 2012, respectively. Sales were somewhat softer in Europe due to the deteriorating economic conditions compared to 2012.

The Company’s backlog of orders was $182.2 million at December 31, 2013 compared to $143.4 million a year ago and $190.7 million at September 30, 2013. Approximately 77% of the Company’s backlog of unfilled orders at December 31, 2013 is scheduled to be shipped during 2014, lower than previous years’ percentages due to some of the Permanent Canal Closure Project that is expected to ship through the first three quarters of 2015.

Cost of products sold in 2013 was $298.0 million compared to $285.5 million in 2012, an increase of $12.5 million or 4.4%. Gross profit was $93.7 million in 2013 compared to $90.2 million in 2012, an increase of 3.9% resulting in gross margins of 23.9% and 24.0% in 2013 and 2012, respectively. Excluding the non- cash pension settlement charges, gross margin would have been 24.6% and 24.5% in 2013 and 2012, respectively.

Selling, general and administrative (“SG&A”) expenses for 2013 were $51.8 million, or 13.2% of net sales, compared with $48.0 million, or 12.8% of net sales for 2012. The increase in SG&A expenses was primarily driven by the inclusion of wages and benefits for a full year related to two acquisitions that were made during the latter part of 2012.

Operating income in 2013 was $41.9 million compared to $42.2 million in 2012, resulting in operating margins of 10.7% and 11.2%, respectively. Excluding the non-cash pension settlement charges described above, operating margins would have been 11.4% and 12.0% for 2013 and 2012, respectively.

Other income in 2013 was $3.1 million compared to $0.09 million in 2012. The increase in other income during 2013 was principally due to gain on sale of machinery and equipment of $2.5 million.

31

The Gorman-Rupp Company        Annual Report 2013

Management’s Discussion and Analysis

The effective income tax rate was 32.0% in 2013 compared to 33.6% in 2012. The difference in the effective tax rate was primarily due to the federal research and development tax credit that was not enacted for 2012 until January 2013, and thus not permitted to be recorded until 2013 for 2012. Therefore, two years of the research and development tax credit were recognized in 2013.

Net income for 2013 was a record $30.1 million compared to $28.2 million in 2012, an increase of $1.9 million or 6.7%. The non-cash pension settlement charges reduced net income by $2.8 million and $1.9 million in 2013 and 2012, respectively. Net income excluding the charges would have been $32.9 million in 2013 and $30.1 million in 2012. As a percent of net sales, net income was 7.7% and 7.5% in 2013 and 2012, respectively. Excluding the pension settlement charges, net income would have been 8.4% and 8.0% in 2013 and 2012, respectively.

Earnings per share were $1.15 in 2013 compared to $1.07 in 2012, an increase of $0.08 per share or 7.5%. The non-cash pension settlement charges reduced net income by $0.10 in 2013 and $0.08 per share in 2012, which would have resulted in earnings per share of $1.25 in 2013 and $1.15 in 2012.

Results of Operations – 2012 Compared to 2011:

The Company attained record net sales of $375.7 million in 2012 compared to net sales of $359.5 million in 2011, an increase of $16.2 million or 4.5%. Sales improved 6.0% in our larger water markets group and 4.9% in our non-water markets. Sales of repair parts decreased 3.5% during the year as sales during 2011 were bolstered by pent-up demand.

Major contributions to water market sales were increased international shipments of pumps of $10.3 million for fire protection as a result of more higher-priced heavily engineered products and increased sales for the agricultural market of $7.1 million primarily due to agricultural cash-flow benefits from high commodity prices and drought conditions in the United States. Partially offsetting these increases were lower sales for the construction market of $6.3 million

due to reduced demand for pumps for natural gas drilling applications and from rental businesses. The growth in non-water market sales was primarily due to increases in petroleum market shipments of pumps of $4.5 million primarily used in the domestic pipeline industry and in industrial market international shipments of $1.0 million primarily for desalination.

International sales were $136.5 million in 2012 compared to $118.1 million in 2011, an increase of $18.5 million or 15.6%. International sales represented 36.3% and 32.8% of total sales for the Company in 2012 and 2011, respectively. The increase is primarily due to higher sales in the fire protection market noted above and in the municipal market as a result of the acquisition of Pumptron during the third quarter 2012.

The Company’s backlog of orders was $143.4 million at December 31, 2012 compared to $155.5 million a year ago and $146.7 million at September 30, 2012. The expected decrease in backlog from December 31, 2011 was primarily due to anticipated shipments during the twelve months ending December 31, 2012 combined with anticipated lower incoming orders from the construction, municipal, industrial and OEM markets, during the year ended December 31, 2012. Approximately 92% of the Company’s backlog of unfilled orders at December 31, 2012 is scheduled to be shipped during 2013, with the remainder during 2014.

Cost of products sold in 2012 was $285.5 million compared to $271.7 million in 2011, an increase of $13.9 million or 5.1%. Gross profit was $90.2 million in 2012 compared to $87.8 million in 2011, an increase of 2.6% resulting in gross margins of 24.0% and 24.4% in 2012 and 2011, respectively. Excluding the non- cash pension settlement charges, gross margins were 24.5% and 25.0% for 2012 and 2011, respectively. The decrease in gross profit primarily reflects increased material costs due to a less favorable product mix combined with increases in healthcare costs of 20 basis points and in depreciation expense of 10 basis points due to larger than normal capital expenditures during 2012.

32

The Gorman-Rupp Company        Annual Report 2013

Selling, general and administrative (“SG&A”) expenses for 2012 were $48.0 million, or 12.8% of net sales, compared with $44.8 million, or 12.5% of net sales for 2011. The increase in SG&A expenses as percent of net sales was primarily driven by the impact of acquisitions during 2012 including non-recurring acquisition-related expenses of 10 basis points. In addition, travel and advertising expenses increased 10 basis points.

Operating income in 2012 was $42.2 million compared to $43.0 million in 2011, resulting in operating margins of 11.2% and 12.0%, respectively. Excluding the non-cash pension settlement charges described above, operating margins were 12.0% and 12.8% for 2012 and 2011, respectively.

The effective income tax rate was 33.6% in 2012 compared to 32.5% in 2011. The difference in the effective tax rate is primarily due to the federal research and development tax credit that was not enacted for 2012 until January 2013, and not permitted to be recorded in 2012 under current accounting regulations. The effective tax rate was also unfavorably impacted by I.R.S. audit adjustments relating to transfer pricing for tax years 2009 and 2010 paid in 2012.

Net income for 2012 was $28.2 million compared to $28.8 million in 2011, a decrease of $601,000 or 2.1%. The non-cash pension settlement charges described above reduced net income by $1.9 million and $2.0 million in 2012 and 2011, respectively. As a percent of net sales, net income was 7.5% and 8.0% in 2012 and 2011, respectively.

Adjusted for the December 10, 2013 stock split, earnings per share were $1.07 in 2012 compared to $1.10 in 2011, a decrease of $0.03 per share or 2.1%. The non-cash pension settlement charges described above reduced net income by $0.08 in 2012 and 2011.

Trends

The Company does not believe that it is exposed to material market risks as a result of its export sales or operations outside of the United States. Export sales are denominated predominately in U.S. dollars and made on open account or with letters of credit.

For more than 10 years, numerous business entities in the pump and fluid-handling industries, as well as a multitude of companies in many other industries, have been targeted in a series of lawsuits in several jurisdictions by various individuals seeking redress to claimed injury as a result of the entities’ alleged use of asbestos in their products. The Company and two of its subsidiaries remain drawn into mass-scale asbestos-related litigation, typically as one of hundreds of co-defendants in a particular proceeding; the vast majority of these cases are against Patterson Pump Company. The allegations in the lawsuits involving the Company and/or its subsidiaries are vague, general and speculative, and most cases have not advanced beyond the early stage of discovery. In certain situations, the plaintiffs have voluntarily dismissed the Company and/or its subsidiaries from some of the lawsuits after the plaintiffs have acknowledged that there is no basis for their claims. In other situations, the Company and/or its subsidiaries have been dismissed from some of the lawsuits as a result of court rulings in favor of motions to dismiss and/or motions for summary judgment. During the fourth quarter 2011, Patterson Pump Company entered into an agreement with plaintiffs’ counsel for the voluntary dismissal of more than 95% of the cases against it at no cost to Patterson Pump Company or its insurer. In seventy-seven cases the Company and/or its subsidiaries have entered into nominal economic settlements recommended and paid for by its insurers, coupled with dismissal of the lawsuits. Insurers of the Company have engaged legal counsel to represent the Company and its subsidiaries and to protect their interests. Management does not currently believe that the small number of legal proceedings arising out of the ordinary course of business, or the industry-wide asbestos litigation, will materially impact the Company’s consolidated results of operations, liquidity or financial condition.

Liquidity and Sources of Capital

The Company places a strong emphasis on cash flow generation and having excellent liquidity and financial flexibility. This focus has afforded us the continuing ability to reinvest our cash resources while preserving a strong balance sheet to position us for future opportunities. The $104.1 million of cash generated

33

The Gorman-Rupp Company        Annual Report 2013

Management’s Discussion and Analysis

by operating activities over the past three years was utilized primarily to fund growth-oriented acquisitions and productivity-enhancing capital expenditures, pay dividends, repay acquisitions-related short-term debt and fund the Company’s defined benefit pension plan.

Cash equivalents and short-term investments totaled $31.4 million and there was $9.0 million in outstanding bank debt at December 31, 2013. In addition, the Company had $26 million available in bank lines of credit after deducting $4 million in outstanding letters of credit primarily related to customer orders. The Company was in compliance with its nominal restrictive covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios, at all times in 2013 and 2012.

Capital expenditures for 2014, consisting principally of building expansions and machinery and equipment purchases, are estimated to be in the range of $13 to $15 million and are expected to be financed through internally generated funds and existing lines of credit. During 2013, 2012 and 2011, the Company financed its capital improvements and working capital requirements principally through internally generated funds.

Working capital increased 15.9% to $128.5 million at December 31, 2013 compared to $110.9 million a year ago, largely due to increased cash and reduced bank debt.

Gross cash flow, representing net income plus depreciation and amortization, was $43.7 million for 2013, $40.3 million for 2012 and $40.3 million in 2011.

Financial Cash Flow

Net cash provided by operating activities was $50.4 million, $32.6 million and $21.1 million for 2013, 2012 and 2011, respectively. The primary drivers of operating cash flows during 2013 were net earnings and improved working capital.

Cash used for investing activities was $18.1 million, $36.4 million and $10.2 million for 2013, 2012 and 2011, respectively. Net cash paid for acquisitions was $20.8 million in 2012. Capital expenditures were approximately $21.0 million, $16.4 million and $11.2 million in 2013, 2012 and 2011, respectively.

Net cash provided by (used for) financing activities was ($21.7) million in 2013, $3.8 million in 2012 and ($22.4) million in 2011. During 2013, the Company’s repayment on short-term bank borrowings was $19.0 million and dividend payments were $8.7 million.

On January 23, 2014, the Board of Directors authorized the payment of a quarterly dividend of $0.09 per share, representing the 256th consecutive quarterly dividend to be paid by the Company. During 2013, the Company again paid increased dividends and thereby attained its 41st consecutive year of increased dividends. These consecutive years place Gorman-Rupp in the top 50 of all U.S. public companies with respect to number of consecutive years of increased dividend payments. The dividend yield at December 31, 2013 was 1.1%.

The changes in foreign currency translation against the U.S. dollar increased cash by $389,000 in 2013 and decreased cash by $77,000 and $572,000 in 2012 and 2011, respectively.

The ratio of current assets to current liabilities was 3.1 to 1 and 2.7 to 1 at December 31, 2013 and 2012, respectively. Management believes that cash on hand, combined with cash provided by operating activities and existing financing capabilities, will be sufficient to meet cash requirements for the next twelve months, including capital expenditures, the expected payment of quarterly dividends, and principal and interest on debt outstanding.

The Company currently expects to continue its long history of paying regular quarterly dividends and increased annual dividends. However, any future dividends will be reviewed individually and declared by our Board of Directors at its discretion, dependent on our assessment of the Company’s financial condition and business outlook at the applicable time.

34

The Gorman-Rupp Company        Annual Report 2013

Contractual Obligations

Capital commitments in the table below include commitments to purchase machinery and equipment that have been approved by the Board of Directors and are enforceable and legally binding on the Company. The capital commitments do not represent the entire anticipated purchases in the future, but represent only those substantive items for which the Company is contractually obligated as of December 31, 2013. Also, the Company has some operating leases for certain specified offices, manufacturing facilities, land, office equipment and automobiles. Rental expenses relating to these leases were $1,109,000, $1,068,000 and $866,000 in 2013, 2012 and 2011, respectively.

The following table summarizes the Company’s contractual obligations at December 31, 2013:

	Payment Due By Period
(Thousands of dollars)	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Capital commitments	$	550	$	550	$	—	$	—	$	—
Operating leases		2,292		860		937		484		11
Total	$	2,842	$	1,410	$	937	$	484	$	11

Critical Accounting Policies

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. When more than one accounting principle, or the method of its application, is generally accepted, management selects the principle or method that is appropriate in the Company’s specific circumstances. Application of these accounting principles requires management to make estimates about the future resolution of existing uncertainties; as a result, actual results could differ from these estimates.

In preparing these consolidated financial statements, management has made its best estimates and judgments of the amounts and disclosures included in the consolidated financial statements, giving due regard to materiality. The Company does not believe there

is a great likelihood that materially different amounts would be reported under different conditions or using different assumptions pertaining to the accounting policies described below.

Revenue Recognition

Substantially all of the Company’s revenues from product sales are recognized when all of the following criteria are met: persuasive evidence of a sale arrangement exists, the price is fixed or determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectability is probable. Product delivery occurs when the risks and rewards of ownership and title pass, which usually occurs upon shipment to the customer.

Allowance for Doubtful Accounts

The Company evaluates the collectability of its accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings, substantial downgrading of credit scores, etc.), the Company records a specific allowance for bad debts against amounts due to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for bad debts based on the length of time the receivables are past due. If circumstances change (e.g., an unexpected material adverse change in a major customer’s ability to meet its financial obligations), the Company’s estimates of the recoverability of amounts due could be reduced by a material amount. Historically, the Company’s collection history has been good.

Inventories and Related Allowance

Inventories are valued at the lower of cost or market value and have been reduced by an allowance for excess and obsolete inventories. The estimated allowance is based on a variety of factors, including historical inventory usage and management evaluations. Historically, the Company has not experienced substantive write-offs due to obsolescence. The Company uses the last-in, first-out (LIFO) method for the majority of its inventories.

35

The Gorman-Rupp Company        Annual Report 2013

Management’s Discussion and Analysis

Pension Plans and Other Postretirement Benefit Plans

The Company recognizes the obligations associated with its defined benefit pension plan and defined benefit health care plan in its consolidated financial statements. The measurement of liabilities related to pension plans and other postretirement benefit plans is based on management’s assumptions related to future events including interest rates, return on pension plan assets, rate of compensation increases and health care cost trend rates. Actual pension plan asset performance will either reduce or increase pension losses included in accumulated other comprehensive loss, which ultimately affects net income. The Company uses a measurement date of December 31 for benefit plan determinations. The discount rates used to determine the present value of future benefits are based on estimated yields of investment grade fixed income investments.

The discount rate used to value pension plan obligations was 4.30% and 3.40% at December 31, 2013 and 2012, respectively. The discount rate used to value postretirement obligations was 4.50% and 3.20% at December 31, 2013 and 2012, respectively. The discount rate was determined by constructing a zero-coupon spot yield curve derived from a universe of high-quality bonds as of the measurement date. The expected rate of return on pension assets is designed to be a long- term assumption that will be subject to year-to-year variability. The rate for 2013 and 2012 was 7.00%. Actual pension plan asset performance will either reduce or increase unamortized losses included in accumulated other comprehensive loss, which will ultimately affect net income. The assumed rate of compensation increase was 3.5% in 2013 and 2012. The pension plan was fully funded at December 31, 2013.

The assumption used for the rate of increase in medical costs over the next five years was unchanged in 2013 from 2012. A one percentage point increase in the assumed health care trend would increase postretirement expense by approximately $223,000, changing the benefit obligation by approximately

$1.65 million; while a one percentage point decrease in the assumed health care trend would decrease postretirement expense by approximately $209,000, changing the benefit obligation by approximately $1.53 million.

Substantially all retirees elect to take lump sum settlements of their benefits. When interest rates are low as they have been the last three years, this subjects the Company to the risk of exceeding an actuarial threshold computed on an annual basis and triggering a GAAP-required non-cash pension settlement loss. This event occurred in 2013, 2012, 2011 and in 2003.

Income Taxes

The basic principles related to accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns.

Realization of the Company’s deferred tax assets is principally dependent upon the Company’s achievement of projected future taxable income, which management believes will be sufficient to fully utilize the deferred tax assets recorded; with the exception of deferred tax associated with certain state tax credits for which a valuation allowance has been recognized.

Goodwill and Other Intangibles

The Company accounts for goodwill in a purchase business combination as the excess of the cost over the fair value of net assets acquired. Business combinations can also result in other intangible assets being recognized. Amortization of intangible assets, if applicable, occurs over their estimated useful lives.

Goodwill and indefinite lived intangible assets are tested annually for impairment as of October 1, or whenever events or changes in circumstances indicate there may be a possible permanent loss of value in accordance with ASC 350, Intangibles – Goodwill and Other.

Goodwill is tested for impairment at the reporting unit level and is based on the net assets for each reporting unit, including goodwill and intangible assets. The

36

The Gorman-Rupp Company        Annual Report 2013

Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary.

In assessing the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we identify and assess relevant drivers of fair value and events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of relevant events and circumstances and how these may impact a reporting units’ fair value or carrying amount involve significant judgments and assumptions. The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Company specific events and share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.

When performing a quantitative assessment of goodwill impairment if necessary, a discounted cash flow model is used to estimate the fair value of each reporting unit, which considers forecasted cash flows discounted at an estimated weighted-average cost of capital. The forecasted cash flows are based on the Company’s long-term operating plan and the weighted-average cost of capital is an estimate of the overall after-tax rate of return. Other valuation techniques including comparative market multiples are used when appropriate. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.

Based upon our fiscal 2013 and 2012 qualitative impairment analyses, the Company concluded that it is more likely than not that the fair value of our reporting units continues to substantially exceed the respective carrying amounts.

Indefinite lived intangible assets primarily consist of trademarks and trade names. In July 2012, the FASB issued ASU 2012-02 which amends the rules for testing indefinite-lived intangible assets other than goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount similar to the goodwill impairment testing described above. The Company early adopted ASU 2012-02 for its October 1, 2012 annual impairment test.

When performing a quantitative assessment of indefinite lived intangible asset impairment if necessary, the fair values of these assets are determined using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows and profitability. For 2013, the fair value of indefinite lived intangible assets substantially exceeded the respective carrying value.

Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recovered through future net cash flows generated by the assets.

Other Matters

Transactions with related parties are in the ordinary course of business and are not material to the Company’s consolidated financial position, net income or cash flows.

The Company does not have any off-balance sheet arrangements, financings or other relationships with unconsolidated “special purpose entities.”

The Company is not a party to any long-term debt agreements, or any material capital leases or purchase obligations.

37

Report of Management on Internal Control

Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company (as defined in Exchange Act rules 13[a]–15[f ]). Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and affected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Management and Directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Based on this evaluation, Management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2013.

The independent registered public accounting firm of Ernst & Young LLP that has audited the consolidated financial statements included in this annual report on Form 10-K, has also issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2013. This report is included on the following page.

/s/ Jeffrey S. Gorman

Jeffrey S. Gorman

President and Chief Executive Officer

/s/ Wayne L. Knabel

Wayne L. Knabel

Chief Financial Officer

March 10, 2014

38

The Gorman-Rupp Company        Annual Report 2013

Report of Independent Registered

Public Accounting Firm

The Board of Directors and Shareholders

of The Gorman-Rupp Company

We have audited The Gorman-Rupp Company’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). The Gorman-Rupp Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, The Gorman-Rupp Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of The Gorman-Rupp Company as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2013 of The Gorman-Rupp Company and our report dated March 10, 2014 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio

March 10, 2014

39

The Gorman-Rupp Company        Annual Report 2013

Eleven-Year Summary of Selected Financial Data

Share amounts have been restated to reflect the 5 for 4 stock split effective December 10, 2013.

(Thousands of dollars, except per share amounts)

	2013		2012		2011		2010
Operating Results
Net sales	$	391,665	$	375,691	$	359,490	$	296,808
Gross profit		93,655		90,151		87,837		76,337
Income taxes		14,173		14,244		13,881		12,370
Net income		30,104		28,203		28,804		25,963
Depreciation and amortization		13,588		12,066		11,459		10,601
Interest expense		146		122		179		175
Return on net sales (%)		7.7		7.5		8.0		8.7
Sales dollars per employee		315.6		326.4		327.1		304.4
Income dollars per employee		24.3		24.5		26.2		26.6
Financial Position
Current assets	$	189,289	$	175,675	$	155,872	$	143,194
Current liabilities		60,760		64,821		50,873		59,678
Working capital		128,529		110,854		104,999		83,516
Current ratio		3.1		2.7		3.1		2.4
Property, plant and equipment—net	$	131,189	$	123,066	$	114,349	$	113,526
Capital additions—net		21,015		16,373		11,175		8,310
Total assets		355,638		335,183		298,700		286,707
Equity		264,140		234,719		214,764		199,834
Dividends paid		8,662		8,188		7,430		7,024
Average number of employees		1,241		1,151		1,099		975
Shareholder Information
Earnings per share	$	1.15	$	1.07	$	1.10	$	0.99
Cash dividends per share		0.330		0.312		0.283		0.269
Equity per share at December 31		10.06		8.94		8.19		7.65
Average number of shares outstanding		26,249,324		26,242,366		26,234,579		26,132,160

Summary of Quarterly Results of Operations

(Thousands of dollars, except per share amounts)

The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2013 and 2012:

Quarter Ended 2013	Net Sales		Gross Profit		Net Income		Earnings per Share
First quarter	$	92,457	$	21,224	$	5,818	$	0.22
Second quarter		106,415		26,481		9,168		0.35
Third quarter		101,186		24,485		7,946		0.30
Fourth quarter		91,607		21,465		7,172		0.28
Total	$	391,665	$	93,655	$	30,104	$	1.15

Share amounts have been restated to reflect the 5 for 4 stock split effective December 10, 2013.

40

The Gorman-Rupp Company        Annual Report 2013

2009		2008		2007		2006		2005		2004		2003
$	266,242	$	330,646	$	305,562	$	270,910	$	231,249	$	203,554	$	195,826
	61,773		77,089		67,452		58,676		47,071		42,425		41,851
	8,986		13,297		12,524		8,654		6,235		5,075		4,613
	18,269		27,197		22,859		19,072		10,903		9,277		9,787
	8,955		7,848		7,597		6,688		6,808		7,179		7,274
	170		45		49		41		25		40		56
	6.9		8.2		7.5		7.0		4.7		4.6		5.0
	264.1		302.5		286.9		258.3		233.3		211.4		196.4
	18.1		24.9		21.5		18.2		11.0		9.6		9.8
$	131,400	$	134,266	$	135,288	$	120,118	$	110,501	$	96,974	$	95,718
	43,175		35,569		33,481		27,646		28,219		21,112		21,908
	88,225		98,697		101,807		92,472		82,282		75,862		73,810
	3.0		3.8		4.0		4.3		3.9		4.6		4.4
$	108,523	$	80,406	$	59,970	$	52,351	$	51,505	$	54,812	$	54,338
	38,071		27,909		12,826		7,258		3,189		7,500		3,698
	249,424		231,538		211,534		187,540		179,541		165,673		162,395
	177,612		159,206		149,960		128,142		127,048		121,898		117,918
	6,767		6,682		6,503		6,126		5,983		5,907		5,809
	1,008		1,093		1,065		1,049		991		963		997
$	0.70	$	1.04	$	0.88	$	0.73	$	0.42	$	0.36	$	0.38
	0.259		0.256		0.248		0.234		0.229		0.227		0.223
	6.80		6.10		5.75		4.91		4.87		4.68		4.52
	26,107,886		26,101,891		26,095,586		26,089,004		26,081,676		26,073,433		26,064,291

Quarter Ended 2012	Net Sales		Gross Profit		Net Income		Earnings per Share
First quarter	$	102,825	$	26,674	$	10,241	$	0.39
Second quarter		92,583		22,741		7,568		0.29
Third quarter		91,626		21,830		6,706		0.25
Fourth quarter		88,657		18,906		3,688		0.14
Total	$	375,691	$	90,151	$	28,203	$	1.07

41

The Gorman-Rupp Company        Annual Report 2013

Shareholder Information

Comparison of 5-Year Cumulative Total Shareholder Return Among The Gorman-Rupp Company,

NYSE MKT Composite Index and SIC Code Index

ASSUMES $100 INVESTED ON JANUARY 1, 2009 AND DIVIDENDS REINVESTMENT THROUGH YEAR ENDING DECEMBER 31, 2013.

Set forth above is a line graph comparing the yearly percentage change in the cumulative total shareholder return, including reinvested cash dividends, on the Company’s common shares against the cumulative total return of the NYSE MKT Exchange Index and a Peer Group Index for the period of five fiscal years commencing January 1, 2009 and ending December 31, 2013. The issuers in the SIC Code Index were selected on a line-of-business basis by reference to SIC Code 3561— Pumps and Pumping Equipment. The SIC Code Index is composed of the following issuers: Ampco-Pittsburgh Corp., Colfax Corp., Entech Solar Inc., Flow International Corp., Flowserve Corp., Graco Inc., Idex Corp., ITT Corp., Pentair Limited, The Gorman-Rupp Company and Xylem Inc.

Quarterly Stock Prices and Dividends

The high and low sales price and dividends per share for common shares traded on the NYSE MKT Exchange were:

	Sales Price of Common Shares								Dividends Per Share
	2013				2012				2013		2012
	High		Low		High		Low
First quarter	$	24.78	$	22.82	$	27.72	$	21.75	$	0.080	$	0.072
Second quarter		24.50		21.44		23.60		21.34		0.080		0.080
Third quarter		33.86		24.43		25.24		21.25		0.080		0.080
Fourth quarter		34.59		22.55		23.98		20.41		0.090		0.080

Per share data reflect the 5 for 4 stock split effective December 10, 2013.

There were approximately 7,701 shareholders as of January 31, 2014, of which 1,620 were registered holders of common shares.

Annual Meeting	Transfer Agent and Registrar	Mailing Address	Exchange Listing
The annual meeting of the shareholders of The Gorman-Rupp Company will be held at the Company’s Corporate Headquarters, 600 South Airport Road, Mansfield, Ohio, on April 24, 2014 at 10:00 a.m., Eastern Daylight Time.	Computershare Investor Services, LLC 250 Royall Street Canton, MA 02021 Phone 800-622-6757     (U.S., Canada, Puerto Rico)     781-575-4735     (Outside the U.S.)	The Gorman-Rupp Company P.O. Box 1217 Mansfield, OH 44901-1217 Phone 419-755-1011 Fax 419-755-1263 Principal Office The Gorman-Rupp Company 600 South Airport Road Mansfield, OH 44903	NYSE MKT Exchange Symbol GRC Independent Registered Public Accounting Firm Ernst & Young LLP Suite 1800 950 Main Avenue Cleveland, OH 44113-7214

42

The Gorman-Rupp Company        Annual Report 2013

Incorporated

April 18, 1934, under the laws of the State of Ohio

Investor Information Contact

Wayne L. Knabel, CPA

Chief Financial Officer

Phone 419-755-1397

Fax 419-755-1263

Email WLKnabel@gormanrupp.com

The SEC Annual Report Form 10-K is available free of charge by written request to Mr. Knabel at:

The Gorman-Rupp Company

P. O. Box 1217

Mansfield, Ohio 44901-1217

Internet Information

Information about the Company, its U.S. Securities and Exchange Commission filings and its products are available through its web site at: www.gormanrupp.com

To Buy or Sell Stock

Stock cannot be purchased or sold directly through The Gorman-Rupp Company. Purchases and sales of the Company’s stock generally are made through a securities dealer or through the Dividend Reinvestment Plan offered through Computershare Investor Services, LLC.

In addition, employees of the Company may purchase shares through an Employee Stock Purchase Plan offered through monthly deductions from their paychecks.

Open Enrollment Dividend Reinvestment and Stock Purchase Plan

Computershare Investor Services, LLC offers a convenient plan for investment in shares of common stock of The Gorman-Rupp Company. Investors may buy or sell common shares of The Gorman-Rupp Company through Computershare Investor Services, LLC’s Open Enrollment Dividend Reinvestment and Stock Purchase Plan. Initial investments may be made from a minimum of $500 to a maximum of $10,000. Any subsequent investments may be made for a minimum of $50 to a maximum of $5,000 per month.

For additional information please contact The Gorman-Rupp Company, Attention: Corporate Secretary, for a copy of the Plan brochure, or call a customer service representative at Computershare Investor Services, LLC.

Phone 800-622-6757 (U.S., Canada, Puerto Rico)

781-575-4735 (Outside the U.S.)

Direct Dividend Deposit

Gorman-Rupp offers the opportunity to have your dividend directly deposited into your checking or savings account. Your dividend is available to you on the payment date.

For additional information, call a customer service representative at Computershare Investor Services, LLC.

Phone 800-622-6757 (U.S., Canada, Puerto Rico)

781-575-4735 (Outside the U.S.)

Safe Harbor Statement

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, The Gorman-Rupp Company provides the following cautionary statement: This Annual Report contains various forward-looking statements based on assumptions concerning The Gorman-Rupp Company’s operations, future results and prospects. These forward-looking statements are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.

Such factors include, but are not limited to: (1) continuation of the current and projected future business environment, including interest rates and capital and consumer spending; (2) competitive factors and competitor responses to Gorman-Rupp initiatives; (3) successful development and market introductions of anticipated new products; (4) stability of government laws and regulations, including taxes; (5) stable governments and business conditions in emerging economies; (6) successful penetration of emerging economies; and (7) continuation of the favorable environment to make acquisitions, domestic and foreign, including regulatory requirements and market values of candidates.

43

EX-14

Exhibit (14)

THE GORMAN-RUPP COMPANY

CODE OF ETHICS

Introduction

This Code of Ethics was first adopted by the Board of Directors of The Gorman-Rupp Company on October 23, 2003 for application to the Company’s Chief Executive Officer, Chief Financial Officer and Treasurer. The Board of Directors expanded the scope of this Code of Ethics by the adoption of an amending resolution on April 22, 2004 so that it applies to all employees, officers and Directors of the Company. On January 24, 2013 the Board of Directors approved updating amendments of this Code of Ethics to clarify its applicability to all subsidiaries and divisions of the Company, expand international enforcement emphasis of the U.S. Foreign Corrupt Practices Act, include reference to the new U.K. Bribery Act, and provide for its annual review by the Board of Directors.

This Code of Ethics describes the basic principles of conduct that apply to all employees, officers and Directors of The Gorman-Rupp Company (“Company”) and its subsidiaries and divisions. This Code is intended to provide a broad overview of basic ethical principles that guide our conduct. Violation of this Code may result in disciplinary action as deemed appropriate by the Company’s Board of Directors, varying from reprimand to dismissal.

The requirement that we adhere to each of the policies and principles contained in this Code may only be waived by the Board of Directors. The Company will promptly disclose to the Company’s shareholders and the investing public any waiver of this Code.

Compliance with Laws, Rules and Regulations

We strive to comply with all laws, rules and regulations of the places where the Company conducts business.

Conflicts of Interest

We conduct our business affairs in the best interests of the Company and shall therefore avoid situations where our private interests interfere with the Company’s interests. We shall be especially sensitive to situations that have the appearance of impropriety.

Record-Keeping

We require honest and accurate recording and reporting of financial and other information.

All of the Company’s records, accounts and financial statements are maintained in reasonable detail, appropriately reflect its transactions, and conform both to applicable legal and financial accounting requirements.

Public Reporting

We endeavor to make full, fair, accurate, timely and understandable disclosure in reports and documents filed with, or submitted to, the Securities and Exchange Commission and the NYSE MKT and in the Company’s news releases and other public communications.

We require cooperation and open communication with our internal and external auditors. We consider any action to fraudulently influence, coerce, manipulate or mislead any auditor engaged in the performance of an audit of the Company’s financial statements to be an illegal activity.

Insider Trading

Consistent with the federal securities laws, we confirm that the conduct of any person who buys or sells the Company’s securities on the basis of material, non-public information concerning the Company is illegal.

We further confirm the illegal conduct of any person in possession of material, non-public information who provides another person with such information or recommends that he or she buy or sell the Company’s securities. These prohibitions also apply to material, non-public information obtained about any other company during the course of working for the Company.

Corporate Opportunities

We do not personally take advantage of opportunities that are discovered because of our position without the prior consent of the Board of Directors. We shall not compete with the Company and shall fulfill our fiduciary duties to the Company to advance its legitimate interests whenever the opportunity to do so arises.

Competition and Fair Dealing

We manage the Company so that it competes fairly and honestly. We do not engage in unethical or illegal business practices such as stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing disclosure of this type of information by past or present employees of other companies. We shall respect the confidentiality of our customers’, suppliers’ and competitors’ information.

Business Entertainment and Gifts

We recognize that business entertainment and gifts are meant to create goodwill and sound working relationships, not to gain unfair advantage with customers, suppliers or government officials. We shall not offer, give or accept any gift or entertainment unless it: (i) is not a cash gift, (ii) is not excessive in value, (iii) cannot be construed as a bribe or payoff, and (iv) does not violate any laws or regulations.

Discrimination and Harassment

We provide equal opportunity in employment and will not tolerate discrimination or harassment in the workplace. Derogatory comments based on racial or ethnic characteristics, unwelcome sexual advances and similar behavior are prohibited by the Company’s policies.

Health and Safety

We strive to provide a safe and healthful work environment by following safety and health rules and practices.

We do not permit violence or threatening behavior in the workplace.

Confidentiality

We protect the Company’s confidential, proprietary and trade secret information. We also protect information that suppliers and customers have entrusted to the Company on a confidential basis. Our personal obligation to safeguard the Company’s confidential, proprietary and trade secret information continues even after our employment with the Company ends.

Protection and Proper Use of Company Assets

We shall not engage in theft or careless use of the Company’s assets. We shall never use the Company’s assets for illegal purposes.

Activities Concerning Foreign Governments

In compliance with the United States Foreign Corrupt Practices Act, The Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention 2009 Anti-Bribery Recommendation, and the United Kingdom (UK) Bribery Act 2010, we do not give anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. We do not promise, offer or deliver to any foreign or domestic government employee or official any gift, favor or other gratuity that would be illegal.

Our policy is to comply with the laws of other nations in which the Company conducts business.

Reporting Illegal or Unethical Behavior

To encourage good faith reports of illegal or unethical behavior (including violations of this Code) through the Company’s Ethics Hotline to the Company’s Corporate Manager Internal Audit, we keep all reports confidential and do not allow retaliation for reports of misconduct by others. We will cooperate in internal investigations of alleged misconduct.

We shall not permit any form of retribution against any employee who, in good faith, reports violations or suspected violations of Company policy.

Conclusion

Our business conduct on behalf of the Company shall be guided by the policies and principles set forth in this Code. This Code shall be reviewed annually by the Board of Directors.

EX-21

Exhibit (21)

SUBSIDIARIES OF THE COMPANY

The Gorman-Rupp Company is publicly-held and has no parent corporation. The Company’s subsidiaries as of December 31, 2013, and the state or country in which each was organized, are as follows:

Consolidated subsidiaries	Where organized
Patterson Pump Company	Ohio
National Pump Company	Ohio
The Gorman-Rupp International Company	Ohio
GRC International LLC	Ohio
American Machine and Tool Co., Inc. of Pennsylvania	Delaware
Gorman-Rupp of Canada Limited	Canada
Patterson Pump Ireland Limited	Ireland
GRC International C.V.	The Netherlands
Gorman-Rupp International B.V.	The Netherlands
G-R Europe B.V.	The Netherlands
Gorman-Rupp Africa Proprietary Limited	Republic of South Africa
Pumptron (Proprietary) Limited	Republic of South Africa

EX-23

Exhibit (23)

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Annual Report (Form 10-K) of The Gorman-Rupp Company of our reports dated March 10, 2014, with respect to the consolidated financial statements of The Gorman-Rupp Company, and the effectiveness of internal control over financial reporting of The Gorman-Rupp Company, included in the 2013 Annual Report to Shareholders of The Gorman-Rupp Company.

We also consent to the incorporation by reference in the following Registration Statements: (1) Registration Statement (Form S-8 No. 333-187048) pertaining to the Employee Stock Purchase Plan of The Gorman-Rupp Company, (2) Registration Statement (Form S-8 No. 333-105682) pertaining to the 401(k) Plan of The Gorman-Rupp Company, and (3) Registration Statement (Form S-8 No. 333-30159) pertaining to the Non-Employee Directors’ Compensation Plan of The Gorman-Rupp Company; of our reports dated March 10, 2014, with respect to the consolidated financial statements of The Gorman-Rupp Company and the effectiveness of internal control over financial reporting of The Gorman-Rupp Company incorporated by reference in this Annual Report (Form 10-K) of The Gorman-Rupp Company for the year ended December 31, 2013.

/s/ ERNST & YOUNG LLP

Cleveland, Ohio

March 10, 2014

EX-24

Exhibit (24)

THE GORMAN-RUPP COMPANY

CERTIFICATE OF THE SECRETARY

The undersigned hereby certifies that he is the duly elected, qualified and acting Corporate Secretary of The Gorman-Rupp Company, an Ohio corporation (the “Company”), and that the following resolutions were duly adopted by the Company’s Board of Directors at a duly noticed and called meeting held on February 27, 2014 at which a quorum was present and acting throughout, which resolutions have not been amended, rescinded or modified and are in full force and effect on the date hereof.

RESOLVED, that the Executive Officers of the Company, and each of them, hereby are authorized, for and on behalf of the Company, to prepare, sign and file, or cause to be prepared, signed and filed, with the Securities and Exchange Commission, under the Securities Exchange Act of 1934, as amended, the Company’s 2013 Annual Report on Form 10-K, and any and all amendments thereto, and to do or cause to be done all things necessary or advisable in connection therewith.

FURTHER RESOLVED, that Jeffrey S. Gorman, David P. Emmens and Douglas A. Neary, and each of them, hereby are appointed attorneys for the Company, with full power of substitution and resubstitution, for and in the name, place and stead of the Company, to sign and file the Company’s 2013 Annual Report on Form 10-K and any and all amendments thereto, and any and all other documents in connection therewith, with full power and authority to do and perform any and all acts necessary or advisable.

FURTHER RESOLVED, that the Executive Officers of the Company and each of them, hereby are authorized, for and on behalf of the Company, to execute a power of attorney evidencing the foregoing appointments.

IN WITNESS WHEREOF, I have hereunto signed this Certificate this 10th day of March, 2014.

/s/ DAVID P. EMMENS

David P. Emmens

Corporate Secretary

POWER OF ATTORNEY

The undersigned, The Gorman-Rupp Company (the “Company”), by the undersigned Executive Officer of the Company hereunto duly authorized, hereby appoints Jeffrey S. Gorman, Wayne L. Knabel, David P. Emmens and Douglas A. Neary, and each of them, as attorneys for the Company, with full power of substitution and resubstitution, for and in its name, place and stead, to sign and file with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the Company’s 2013 Annual Report on Form 10-K and any and all amendments thereto, and any and all other documents to be filed with the Securities and Exchange Commission or otherwise in connection therewith, with full power and authority to do and perform any and all acts whatsoever necessary or advisable.

Executed this 10th day of March 2014.

THE GORMAN-RUPP COMPANY

BY:	/s/ DAVID P. EMMENS
David P. Emmens
Corporate Secretary

POWER OF ATTORNEY

The undersigned Directors and Executive Officers of The Gorman-Rupp Company (the “Company”) hereby appoint Jeffrey S. Gorman, Wayne L. Knabel, David P. Emmens and Douglas A. Neary, and each of them, as attorneys for each of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of each of the undersigned, to sign and file with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the Company’s 2013 Annual Report on Form 10-K and any and all amendments thereto, and any and all other documents to be filed with the Securities and Exchange Commission or otherwise in connection therewith, with full power and authority to do and perform any and all acts whatsoever necessary or advisable.

Executed as of the 27th day of February, 2014

*JEFFREY S. GORMAN	President and Chief Executive Officer and Director
Jeffrey S. Gorman	(Principal Executive Officer)
*WAYNE L. KNABEL	Chief Financial Officer
Wayne L. Knabel	(Principal Financial and Accounting Officer)
*JAMES C. GORMAN	Director
James C. Gorman
*M. ANN HARLAN	Director
M. Ann Harlan
*THOMAS E. HOAGLIN	Director
Thomas E. Hoaglin
*CHRISTOPHER H. LAKE	Director
Christopher H. Lake
*PETER B. LAKE	Director
Peter B. Lake
*RICK R. TAYLOR	Director
Rick R. Taylor
*W. WAYNE WALSTON	Director
W. Wayne Walston

EX-31.A

Exhibit (31)(a)

CERTIFICATIONS

I, Jeffrey S. Gorman, certify that:

1. I have reviewed this annual report on Form 10-K of The Gorman-Rupp Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2014

/s/ JEFFREY S. GORMAN

Jeffrey S. Gorman

President and Chief Executive Officer

The Gorman-Rupp Company

(Principal Executive Officer)

EX-31.B

Exhibit (31)(b)

CERTIFICATIONS

I, Wayne L. Knabel, certify that:

1. I have reviewed this annual report on Form 10-K of The Gorman-Rupp Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2014

/s/ WAYNE L. KNABEL

Wayne L. Knabel

Chief Financial Officer

The Gorman-Rupp Company

(Principal Financial Officer)

EX-32

Exhibit (32)

Certification Pursuant to 18 U. S. C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of The Gorman-Rupp Company on Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U. S. C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934 as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date: March 10, 2014

/s/ JEFFREY S. GORMAN

Jeffrey S. Gorman

President and Chief Executive Officer

(Principal Executive Officer)

/s/ WAYNE L. KNABEL

Wayne L. Knabel

Chief Financial Officer

(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to 18 U. S. C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Note F - Income Taxes (Details) - Reconciliation of Income Tax Expense By Applying The Statutory Federal Rate (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Reconciliation of Income Tax Expense By Applying The Statutory Federal Rate [Abstract]
Income taxes at statutory rate	$ 15,497	$ 14,856	$ 14,940
State and local income taxes, net of federal tax benefit	587	719	611
Research and development tax credits	(740)		(375)
Domestic production activities	(952)	(980)	(811)
Lower foreign taxes differential	(612)	(528)	(577)
Uncertain tax positions	94	(236)	49
Valuation Allowance	162
Other	137	413	44
Income tax expense	$ 14,173	$ 14,244	$ 13,881

XML

Note H - Goodwill and Other Intangible Assets (Details) - Major Components of Goodwill and Other Intangible Assets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Note H - Goodwill and Other Intangible Assets (Details) - Major Components of Goodwill and Other Intangible Assets [Line Items]
Historical Cost	$ 15,528	$ 15,716
Accumulated Amortization	5,593	4,414
Total	37,096	36,700
Total	5,593	4,414
Goodwill [Member]
Note H - Goodwill and Other Intangible Assets (Details) - Major Components of Goodwill and Other Intangible Assets [Line Items]
Goodwill	18,046	17,452
Trademarks and Trade Names [Member]
Note H - Goodwill and Other Intangible Assets (Details) - Major Components of Goodwill and Other Intangible Assets [Line Items]
Trade names & trademarks	3,522	3,532
Customer Relationships [Member]
Note H - Goodwill and Other Intangible Assets (Details) - Major Components of Goodwill and Other Intangible Assets [Line Items]
Historical Cost	8,170	8,366
Accumulated Amortization	2,403	1,582
Total	2,403	1,582
Technology And Drawings [Member]
Note H - Goodwill and Other Intangible Assets (Details) - Major Components of Goodwill and Other Intangible Assets [Line Items]
Historical Cost	5,790	5,790
Accumulated Amortization	1,685	1,379
Total	1,685	1,379
Other Intangible Assets [Member]
Note H - Goodwill and Other Intangible Assets (Details) - Major Components of Goodwill and Other Intangible Assets [Line Items]
Historical Cost	1,568	1,560
Accumulated Amortization	1,505	1,453
Total	$ 1,505	$ 1,453

XML

Note G - Pensions and Other Postretirement Benefits (Details) - Expected Future Benefit Payments (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Pension Plan [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Expected Future Benefit Payments [Line Items]
2014	$ 3,923
2015	4,337
2016	4,753
2017	5,409
2018	5,802
Thereafter	29,982
Postretirment Benefits [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Expected Future Benefit Payments [Line Items]
2014	1,432
2015	1,399
2016	1,412
2017	1,466
2018	1,561
Thereafter	$ 8,454

XML

Note D - Financing Arrangements (Details) (USD $)	12 Months Ended				0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 17, 2013 London Interbank Offered Rate (LIBOR) [Member] Bank Line Of Credit Maturing August 2015 [Member]	Dec. 06, 2013 London Interbank Offered Rate (LIBOR) [Member] Promissory Note [Member]	Dec. 31, 2013 London Interbank Offered Rate (LIBOR) [Member] Bank Line Of Credit Maturing May 2014 [Member]	Dec. 31, 2013 London Interbank Offered Rate (LIBOR) [Member]	Dec. 17, 2013 Bank Line Of Credit Maturing August 2015 [Member]	Dec. 17, 2012 Bank Line Of Credit Maturing August 2015 [Member]	Dec. 06, 2013 Promissory Note [Member]	Dec. 31, 2013 Bank Line Of Credit Maturing May 2014 [Member]	Dec. 31, 2012 Bank Line Of Credit Maturing November 2012 [Member]	Dec. 31, 2013 Bank Line Of Credit Maturing May 2012 [Member]
Note D - Financing Arrangements (Details) [Line Items]
Unsecured Debt									$ 17,000,000		$ 10,000,000
Debt Instrument, Basis Spread on Variable Rate				0.75%	0.75%	0.75%	0.75%
Line of Credit Facility, Amount Outstanding	20,000,000	19,300,000						3,000,000
Notes Payable										6,000,000
Line of Credit Facility, Maximum Borrowing Capacity	20,000,000
Letters of Credit Outstanding, Amount		5,100,000										700,000	4,000,000
Line of Credit Facility, Remaining Borrowing Capacity	6,000,000	4,900,000
Interest Expense, Debt	146,000	122,000	179,000
Operating Leases, Rent Expense	$ 1,109,000	$ 1,068,000	$ 866,000

XML

Note H - Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

	2013				2012
	Historical Cost		Accumulated Amortization		Historical Cost		Accumulated Amortization
Finite-lived intangible assets:
Customer relationships	$	8,170	$	2,403	$	8,366	$	1,582
Technology & drawings		5,790		1,685		5,790		1,379
Other intangibles		1,568		1,505		1,560		1,453
Total finite-lived intangible assets		15,528		5,593		15,716		4,414
Goodwill		18,046		--		17,452		--
Trade names & trademarks		3,522		--		3,532		--
Total	$	37,096	$	5,593	$	36,700	$	4,414

XML

Note I - Business Segment Information (Details) - Components of Customer Sales Determined Based on the Location of Customers (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Note I - Business Segment Information (Details) - Components of Customer Sales Determined Based on the Location of Customers [Line Items]
Sales by Location (in Dollars)	$ 391,665	$ 375,691	$ 359,490
Percentage of Sales	100.00%	100.00%	100.00%
UNITED STATES
Note I - Business Segment Information (Details) - Components of Customer Sales Determined Based on the Location of Customers [Line Items]
Sales by Location (in Dollars)	257,038	239,153	241,405
Percentage of Sales	66.00%	64.00%	67.00%
Foreign Countries [Member]
Note I - Business Segment Information (Details) - Components of Customer Sales Determined Based on the Location of Customers [Line Items]
Sales by Location (in Dollars)	$ 134,627	$ 136,538	$ 118,085
Percentage of Sales	34.00%	36.00%	33.00%

XML

Note G - Pensions and Other Postretirement Benefits (Details) (USD $)	3 Months Ended	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Retirees Age 65 And Over [Member] Defined Benefit Postretirement Health Coverage [Member]	Dec. 31, 2013 Retirees Under Age 65 [Member] Defined Benefit Postretirement Health Coverage [Member]	Dec. 31, 2013 One Percentage Point Change in Assumed Rate of Return [Member]	Dec. 31, 2013 One Percentage Point Increase in Discount Rate [Member]	Dec. 31, 2013 One Percentage Point Decrease in Discount Rate [Member]	Dec. 31, 2013 Equity Securities [Member]	Dec. 31, 2013 Fixed Income Securities [Member]	Dec. 31, 2013 Alternative Investments [Member]	Dec. 31, 2013 Cash and Cash Equivalents [Member]	Dec. 31, 2013 Defined Contribution Pension [Member]	Dec. 31, 2012 Defined Contribution Pension [Member]	Dec. 31, 2011 Defined Contribution Pension [Member]	Dec. 31, 2013 Minimum [Member] Pension Plan, Defined Benefit [Member]	Dec. 31, 2013 Maximum [Member] Pension Plan, Defined Benefit [Member]
Note G - Pensions and Other Postretirement Benefits (Details) [Line Items]
Defined Contribution Plan, Employer Discretionary Contribution Amount													$ 1,340,000	$ 1,220,000	$ 1,000,000
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate				0.00%	5.00%
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements	3,000,000	4,200,000	2,900,000
Unrecognized Actuarial Gain (Loss) in Excess of Benefit Obligation, Percentage		10.00%
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum									20.00%	50.00%	0.00%	0.00%
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum									40.00%	70.00%	12.00%	10.00%
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year																4,000,000	5,000,000
Defined Benefit Plan, Effect of One Percentage Point Increase on Service and Interest Cost Components		223,000
Defined Benefit Plan, Effect of One Percentage Point Increase on Accumulated Postretirement Benefit Obligation		1,650,000
Defined Benefit Plan, Effect of One Percentage Point Decrease on Service and Interest Cost Components		209,000
Defined Benefit Plan, Effect of One Percentage Point Decrease on Accumulated Postretirement Benefit Obligation		1,530,000
Defined Benefit Plan Effect On Pension Expense						$ 738,000	$ 1,500,000	$ 1,800,000

XML

Note F - Income Taxes (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%
Income Taxes Paid	$ 13,200,000	$ 12,000,000	$ 10,300,000
Deferred Tax Assets, Valuation Allowance	162,000
Unrecognized Tax Benefits	516,000	421,000	1,423,000	1,298,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	412,000
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	56,000
Tax Credit Carryforward, Amount	343,000
Income Tax Examination, Penalties and Interest Accrued	$ 85,000	$ 91,000	$ 361,000

XML

Note J - Acquisitions (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2012 Pumptron Limited [Member]	Dec. 31, 2011 American Turbine [Member]
Note J - Acquisitions (Details) [Line Items]
Number of Businesses Acquired	2
Unsecured Debt, Current	$ 17.0
Revenues		$ 10	$ 15

XML

Note H - Goodwill and Other Intangible Assets (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Note H - Goodwill and Other Intangible Assets (Details) [Line Items]
Amortization of Intangible Assets	$ 1,179,000	$ 869,000	$ 955,000
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	1,200,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	1,200,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	1,200,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	1,200,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	1,200,000
Customer Relationships [Member]
Note H - Goodwill and Other Intangible Assets (Details) [Line Items]
Finite-lived Intangible Assets Acquired		3,100,000
Technology And Drawings [Member]
Note H - Goodwill and Other Intangible Assets (Details) [Line Items]
Finite-lived Intangible Assets Acquired		1,200,000
Trade Names And Trade Marks [Member]
Note H - Goodwill and Other Intangible Assets (Details) [Line Items]
Finite-lived Intangible Assets Acquired		612,000
Goodwill [Member]
Note H - Goodwill and Other Intangible Assets (Details) [Line Items]
Finite-lived Intangible Assets Acquired		$ 2,800,000

XML

Note A - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note A – Summary of Significant Accounting Policies

General Information and Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Earnings per share are calculated based on the weighted-average number of common shares outstanding.

Common Stock Split

On October 24, 2013, the Company declared a five -for -four split of its common shares in the form of a distribution of one additional common share for each four common shares previously issued. The distribution was made on December 10, 2013. Accordingly, all share amounts and per share data throughout this Annual Report have been restated to reflect the stock split.

Cash Equivalents and Short-Term Investments

The Company considers highly liquid instruments with maturities of 90 days or less to be cash equivalents. The Company periodically makes short-term investments for which cost approximates fair value. Short-term investments at December 31, 2013 and 2012 consist primarily of certificates of deposit.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products delivered. The Company estimates this allowance based on knowledge of the financial condition of customers, review of historical receivables and reserve trends and other relevant information.

Inventories

Inventories are stated at the lower of cost or market. The costs for approximately 76% of inventories at December 31, 2013 and 73% of inventories at December 31, 2012 are determined using the last-in, first-out (LIFO) method, with the remainder determined using the first-in, first-out method (FIFO). Cost components include materials, inbound freight costs, labor and allocations of fixed and variable overheads on an absorption costing basis.

Long-Lived Assets

Property, plant and equipment are stated on the basis of cost. Repairs and maintenance costs are expensed as incurred. Depreciation for property, plant and equipment and amortization for finite-lived intangible assets are computed by the straight-line method over the estimated useful lives of the assets and are included in cost of products sold and selling, general and administrative expenses based on the use of the assets. Depreciation expense was $12.4 million, $11.2 million and $10.5 million during 2013, 2012 and 2011, respectively.

Depreciation of property, plant and equipment is determined based on the following lives:

Buildings (years)	20	-	50
Machinery and equipment (years)	5	-	15
Software (years)	3	-	5

Amortization of finite-lived intangible assets is determined based on the following lives:

Technology and drawings (years)	15	-	20
Customer relationships (years)	9	-	10
Other intangibles (years)	2	-	18

Long-lived assets, except goodwill and indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recovered through future net cash flows generated by the assets. Impairment losses may be recorded when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts based on the excess of the carrying amounts over the estimated fair value of the assets.

Goodwill and Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets primarily consist of trademarks and trade names. Goodwill and indefinite-lived intangible assets are tested annually for impairment as of October 1, or whenever events or changes in circumstances indicate there may be a possible permanent loss of value in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other.

Goodwill is tested for impairment at the applicable reporting unit level and is based on the net assets for the applicable reporting unit, including goodwill and intangible assets. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary.

In assessing the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we identify and assess relevant drivers of fair value and events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments and assumptions. The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Company specific events and share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.

If our qualitative assessment concludes that it is more likely than not that impairment exists then a quantitative assessment is required. In a quantitative assessment, a discounted cash flow model is used to estimate the fair value of each reporting unit, which considers forecasted cash flows discounted at a market based weighted-average cost of capital. The forecasted cash flows are based on the Company’s long-term operating plan and the weighted-average cost of capital is an estimate of the overall after-tax rate of return of market participants. Other valuation techniques including comparative market multiples are used when appropriate. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.

The Company has completed its annual goodwill impairment test for each year presented and concluded no reporting unit was at risk of failing the impairment test for any periods presented herein.

In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02 which amends the rules for testing indefinite-lived intangible assets other than goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount similar to the goodwill impairment testing described above. The Company early-adopted ASU 2012-02 for its October 1, 2012 annual impairment test. The Company has completed its annual impairment test for each year presented and concluded that the fair value of indefinite-lived intangible assets substantially exceeded the respective carrying value.

Revenue Recognition

The Company’s revenues from product sales are recognized when all of the following criteria are met: persuasive evidence of a sale arrangement exists, the price is fixed or determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectability is probable. Product delivery occurs when the risks and rewards of ownership and title pass, which normally occurs upon shipment to the customer.

Concentration of Credit Risk

The Company generally does not require collateral from its customers and has a very good collection history. There were no sales to a single customer that exceeded 10% of total net sales for the years ended December 31, 2013, 2012 or 2011.

Shipping and Handling Costs

The Company classifies all amounts billed to customers for shipping and handling as revenue and reflects related shipping and handling costs in cost of products sold.

Advertising

The Company expenses all advertising costs as incurred, which for the years ended December 31, 2013, 2012 and 2011 totaled $3.4 million, $3.5 million, and $3.4 million, respectively.

Product Warranties

A liability is established for estimated future warranty and service claims based on historical claims experience and specific product failures. The Company expenses warranty costs directly to cost of products sold. Changes in the Company’s product warranty liability are:

	2013			2012			2011
Balance at beginning of year	$	1,133		$	1,228		$	1,543
Provision		1,220			1,394			1,081
Claims		(1,183	)		(1,489	)		(1,396	)
Balance at end of year	$	1,170		$	1,133		$	1,228

Foreign Currency Translation

Assets and liabilities of the Company’s operations outside the United States which are accounted for in a functional currency other than U.S. dollars are translated into U.S. dollars using year-end exchange rates. Revenues and expenses are translated at weighted-average exchange rates effective during the year. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within equity.

Gains and losses resulting from foreign currency transactions, the amounts of which are not material, are included in net income.

Fair Value

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximates their fair value.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

XML

Note G - Pensions and Other Postretirement Benefits (Details) - Amounts Recognized in the Company’s Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Amounts recognized in the Consolidated Balance Sheets consist of:
Noncurrent liabilities		$ 7,517
Pension Plan [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Amounts Recognized in the Company’s Consolidated Balance Sheets [Line Items]
Accumulated benefit obligation at end of year	57,632	65,427
Change in benefit obligation:
Benefit obligation at beginning of year	81,148	72,325
Benefit obligation at end of year	70,635	81,148
Service cost	3,144	3,188
Interest cost	2,851	2,803
Settlement	191	263
Benefits paid	(11,371)	(6,974)
Actuarial (gain) Loss	(5,328)	9,543
Change in plan assets:
Fair value of plan assets at beginning of year	73,631	65,754
Fair value of plan assets at end of year	70,889	73,631
Funded status at end of year	254	(7,517)
Actual return on plan assets	4,429	7,651
Employer contributions	4,200	7,200
Benefits paid	(11,371)	(6,974)
Amounts recognized in the Consolidated Balance Sheets consist of:
Noncurrent assets	254
Total assets	254
Noncurrent liabilities		(7,517)
Total liabilities		(7,517)
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss (gain)	24,295	35,029
Deferred tax (benefit) expense	(9,496)	(13,434)
After tax actuarial loss (gain)	14,799	21,595
Components of net periodic benefit cost:
Interest cost	2,851	2,803
Expected return on plan assets	(5,080)	(4,591)
Recognized actuarial loss (gain)	2,080	2,441
Settlement loss	4,169	2,935
Net periodic benefit cost	7,164	6,776
Other changes in plan assets and benefit obligations recognized in other comprehensive loss:
Net (gain) loss	(10,374)	1,371
Total (income) expense recognized in net periodic benefit cost and other comprehensive income	(3,570)	8,147
Postretirement Plan [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Amounts Recognized in the Company’s Consolidated Balance Sheets [Line Items]
Accumulated benefit obligation at end of year	19,794	23,794
Change in benefit obligation:
Benefit obligation at beginning of year	23,794	24,094
Benefit obligation at end of year	19,794	23,794
Service cost	1,153	1,156
Interest cost	724	871
Benefits paid	(1,370)	(1,324)
Effect of foreign Exchange	(68)	24
Actuarial (gain) Loss	(4,439)	(1,027)
Change in plan assets:
Funded status at end of year	(19,794)	(23,794)
Employer contributions	1,370	1,324
Benefits paid	(1,370)	(1,324)
Amounts recognized in the Consolidated Balance Sheets consist of:
Current liabilities	(1,401)	(1,395)
Noncurrent liabilities	(18,393)	(22,399)
Total liabilities	(19,794)	(23,794)
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss (gain)	(11,871)	(8,154)
Deferred tax (benefit) expense	4,471	3,160
After tax actuarial loss (gain)	(7,400)	(4,994)
Components of net periodic benefit cost:
Interest cost	724	871
Recognized actuarial loss (gain)	(723)	(647)
Net periodic benefit cost	1,154	1,380
Other changes in plan assets and benefit obligations recognized in other comprehensive loss:
Net (gain) loss	(3,717)	(384)
Total (income) expense recognized in net periodic benefit cost and other comprehensive income	$ (2,563)	$ 996

XML

Note A - Summary of Significant Accounting Policies (Details) - Amortization of Intangible Assets Lives	12 Months Ended
	Dec. 31, 2013
Minimum [Member] | Technology And Drawings [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives of finite-lived intangible assets	15 years
Minimum [Member] | Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives of finite-lived intangible assets	9 years
Minimum [Member] | Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives of finite-lived intangible assets	2 years
Maximum [Member] | Technology And Drawings [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives of finite-lived intangible assets	20 years
Maximum [Member] | Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives of finite-lived intangible assets	10 years
Maximum [Member] | Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives of finite-lived intangible assets	18 years

XML

Note A - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment Useful Lives	12 Months Ended
	Dec. 31, 2013
Building [Member] | Minimum [Member]
Note A - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment Useful Lives [Line Items]
Useful lives of property, plant, and equipment	20 years
Building [Member] | Maximum [Member]
Note A - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment Useful Lives [Line Items]
Useful lives of property, plant, and equipment	50 years
Machinery and Equipment [Member] | Minimum [Member]
Note A - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment Useful Lives [Line Items]
Useful lives of property, plant, and equipment	5 years
Machinery and Equipment [Member] | Maximum [Member]
Note A - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment Useful Lives [Line Items]
Useful lives of property, plant, and equipment	15 years
Computer Software, Intangible Asset [Member] | Minimum [Member]
Note A - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment Useful Lives [Line Items]
Software (years)	3 years
Computer Software, Intangible Asset [Member] | Maximum [Member]
Note A - Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment Useful Lives [Line Items]
Software (years)	5 years

XML

Note G - Pensions and Other Postretirement Benefits (Details) - Assumptions Used	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Pension Benefits [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Assumptions Used [Line Items]
Discount rate	4.30%	3.40%
Rate of compensation increase	3.50%	3.50%
Discount rate	4.30%	4.00%
Expected long-term rate of return on plan assets	7.00%	7.00%
Rate of compensation increase	3.50%	3.50%
Postretirment Benefits [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Assumptions Used [Line Items]
Discount rate	4.50%	3.20%
Discount rate	3.20%	3.76%

XML

Note A - Summary of Significant Accounting Policies (Details) - Product Warranties (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Product Warranties [Abstract]
Balance at beginning of year	$ 1,133	$ 1,228	$ 1,543
Provision	1,220	1,394	1,081
Claims	(1,183)	(1,489)	(1,396)
Balance at end of year	$ 1,170	$ 1,133	$ 1,228

XML

Note B - Allowance for Doubtful Accounts (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Disclosure Text Block Supplement [Abstract]
Allowance for Doubtful Accounts Receivable	$ 498,000	$ 561,000

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 30,104	$ 28,203	$ 28,804
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,588	12,066	11,459
Pension expense	7,164	6,946	6,070
Contributions to pension plan	(4,200)	(7,200)	(7,200)
Deferred income taxes	241	2,193	1,608
Gain on sale of machinery and equipment	(2,535)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable - net	(662)	710	(4,423)
Inventories - net	(48)	(8,583)	(21,744)
Accounts payable	2,985	(1,911)	3,637
Commissions payable	(1,487)	(189)	1,166
Deferred revenue	7,112
Accrued expenses	6,947	4,727	8,211
Benefit obligations and other	(8,823)	(4,329)	(6,456)
Net cash provided by operating activities	50,386	32,633	21,132
Capital additions	(21,015)	(16,373)	(11,175)
Proceeds from sale of machinery and equipment	2,905
Redemptions of short-term investments	1	805	958
Payments for acquisitions, net of cash acquired		(20,823)
Net cash used for investing activities	(18,109)	(36,391)	(10,217)
Cash dividends	(8,662)	(8,188)	(7,430)
Proceeds from bank borrowings	6,000	17,000
Payments to bank for borrowings	(19,000)	(5,000)	(15,000)
Net cash (used for) provided by financing activities	(21,662)	3,812	(22,430)
Effect of exchange rate changes on cash	389	(77)	(572)
Net increase (decrease) in cash and cash equivalents	11,004	(23)	(12,087)
Cash and cash equivalents:
Beginning of year	20,119	20,142	32,229
End of year	$ 31,123	$ 20,119	$ 20,142

XML

Note C - Inventories (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Excess of Replacement or Current Costs over Stated LIFO Value	$ 55.3	$ 53.2
Inventory Valuation Reserves	$ 3.8	$ 3.3

XML

Note F - Income Taxes (Details) - Deferred Tax Assets and Liabilities (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets:
Inventories	$ 1,688,000	$ 170,000	$ 49,000
Accrued liabilities	2,341,000	2,430,000	2,506,000
Postretirement health benefits obligation	6,545,000	7,848,000	8,060,000
Pension		1,217,000	873,000
Other	101,000	452,000	1,634,000
Total deferred income tax assets	10,675,000	12,117,000	13,122,000
Valuation allowance	(162,000)
Net deferred income tax assets	10,513,000	12,117,000	13,122,000
Deferred tax liabilities:
Depreciation and amortization	16,858,000	14,376,000	13,419,000
Pension	1,634,000
	18,492,000	14,376,000	13,419,000
Net deferred tax liabilities	$ (7,979,000)	$ (2,259,000)	$ (297,000)

XML

Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Net sales	$ 391,665	$ 375,691	$ 359,490
Cost of products sold	298,010	285,540	271,653
Gross profit	93,655	90,151	87,837
Selling, general and administrative expenses	51,734	47,968	44,843
Operating income	41,921	42,183	42,994
Other income	3,050	907	409
Other expense	(694)	(643)	(718)
Income before income taxes	44,277	42,447	42,685
Income taxes	14,173	14,244	13,881
Net income	$ 30,104	$ 28,203	$ 28,804
Earnings per share (in Dollars per share)	$ 1.15	$ 1.07	$ 1.10
Average number of shares outstanding (in Shares)	26,249,324	26,242,366	26,234,579

XML

Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	$ 21,795	$ 27,628
Percentage allocations	31.00%	38.00%
Fixed Income Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	919	39,778
Percentage allocations	1.00%	54.00%
Fixed Income Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	35,540
Percentage allocations	50.00%
Mutual Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	5,031
Percentage allocations	7.00%
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	2,043
Percentage allocations	3.00%
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	5,471
Percentage allocations	8.00%
Cash [Member] | Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	90
Percentage allocations	0.00%
Balanced [Member] | Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category		6,210
Percentage allocations		8.00%
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category		15
Fair Value, Inputs, Level 1 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	29,878	73,631
Percentage allocations	42.00%	100.00%
Fair Value, Inputs, Level 2 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	41,011
Percentage allocations	58.00%
Fair Value, Inputs, Level 3 [Member]
Note G - Pensions and Other Postretirement Benefits (Details) - Allocation of Plan Assets [Line Items]
Amounts allocated by category	$ 70,889	$ 73,631
Percentage allocations	100.00%	100.00%

XML

Consolidated Statements of Equity (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balances at Dec. 31, 2010	$ 5,127	$ 2,400	$ 201,735	$ (9,428)	$ 199,834
Net income			28,804		28,804
Other comprehensive income (loss)				(6,616)	(6,616)
Issuance of treasury shares	1	144	27		172
Cash dividends			(7,430)		(7,430)
Balances at Dec. 31, 2011	5,128	2,544	223,136	(16,044)	214,764
Net income			28,203		28,203
Other comprehensive income (loss)				(238)	(238)
Issuance of treasury shares	2	149	27		178
Cash dividends			(8,188)		(8,188)
Balances at Dec. 31, 2012	5,130	2,693	243,178	(16,282)	234,719
Net income			30,104		30,104
Other comprehensive income (loss)				7,821	7,821
Issuance of treasury shares	1	129	28		158
Cash dividends			(8,662)		(8,662)
Balances at Dec. 31, 2013	$ 5,131	$ 2,822	$ 264,648	$ (8,461)	$ 264,140

XML

Note E - Accumulated Other Comprehensive Loss (Details) - Reclassifications out of Accumulated Other Comprehensive Loss (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Settlement loss (b)	$ (298,010)		$ (285,540)		$ (271,653)
Settlement loss (c)	(51,734)		(47,968)		(44,843)
Total before income tax	44,277		42,447		42,685
Income tax	(14,173)		(14,244)		(13,881)
Accumulated Defined Benefit Plans Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Recognized actuarial gain (loss) (a)	10,282	[1]	(3,922)	[1]	(12,022)	[1]
Settlement loss (b)	2,756	[2]	1,940	[2]	1,987	[2]
Settlement loss (c)	1,413	[3]	995	[3]	1,023	[3]
Total before income tax	14,451		(987)		(9,012)
Income tax	(5,249)		312		3,282
Net of income tax	$ 9,202		$ (675)		$ (5,730)

[1] The recognized actuarial gain (loss) is included in the computation of net periodic benefit cost. See Note G for additional details.

[2] This portion of the settlement loss is included in Cost of products sold in the Consolidated Statements of Income.

[3] This portion of the settlement loss is included in Selling, general and administrative expenses in the Consolidated Statements of Income.

XML

Note E - Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2013

Accumulated Other Comprehensive Loss [Abstract]

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

Pension and other post retirement benefits:	2013			2012			2011
Recognized actuarial gain (loss) (a)	$	10,282		$	(3,922	)	$	(12,022	)
Settlement loss (b)		2,756			1,940			1,987
Settlement loss (c)		1,413			995			1,023
Total before income tax		14,451			(987	)		(9,012	)
Income tax		(5,249	)		312			3,282
Net of income tax	$	9,202		$	(675	)	$	(5,730	)

Comprehensive Income (Loss) [Table Text Block]

	Currency Translation Adjustments			Pension and OPEB Adjustments			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2011	$	768		$	(10,196	)	$	(9,428	)
Current period charge		(886	)		(9,012	)		(9,898	)
Income tax benefit		--			3,282			3,282
Balance at December 31, 2011		(118	)		(15,926	)		(16,044	)
Current period credit (charge)		437			(987	)		(550	)
Income tax benefit		--			312			312
Balance at December 31, 2012		319			(16,601	)		(16,282	)
Current period (charge) credit		(1,381	)		14,451			13,070
Income tax (charge)		--			(5,249	)		(5,249	)
Balance at December 31, 2013	$	(1,062	)	$	(7,399	)	$	(8,461	)

XML

Note E - Accumulated Other Comprehensive Loss (Details) - Components of Accumulated Other Comprehensive Loss as Reported in the Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Note E - Accumulated Other Comprehensive Loss (Details) - Components of Accumulated Other Comprehensive Loss as Reported in the Consolidated Balance Sheets [Line Items]
Balance	$ (16,282)
Current period credit (charge)	37,925	27,965	22,188
Balance	(8,461)	(16,282)
Currency Translation Adjustments [Member]
Note E - Accumulated Other Comprehensive Loss (Details) - Components of Accumulated Other Comprehensive Loss as Reported in the Consolidated Balance Sheets [Line Items]
Balance	319	(118)	768
Current period credit (charge)	(1,381)	437	(886)
Balance	(1,062)	319	(118)
Pension And OPEB Adjustments [Member]
Note E - Accumulated Other Comprehensive Loss (Details) - Components of Accumulated Other Comprehensive Loss as Reported in the Consolidated Balance Sheets [Line Items]
Balance	(16,601)	(15,926)	(10,196)
Current period credit (charge)	14,451	(987)	(9,012)
Income tax benefit (charge)	(5,249)	312	3,282
Balance	(7,399)	(16,601)	(15,926)
Accumulated Other Comprehensive Income (Loss) [Member]
Note E - Accumulated Other Comprehensive Loss (Details) - Components of Accumulated Other Comprehensive Loss as Reported in the Consolidated Balance Sheets [Line Items]
Balance	(16,282)	(16,044)	(9,428)
Current period credit (charge)	13,070	(550)	(9,898)
Income tax benefit (charge)	(5,249)	312	3,282
Balance	$ (8,461)	$ (16,282)	$ (16,044)

XML

Note G - Pensions and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Schedule of Changes in Projected Benefit Obligations [Table Text Block]

	Pension Plan						Postretirement Plan
	2013			2012			2013			2012
Accumulated benefit obligation at end of year	$	57,632		$	65,427		$	19,794		$	23,794
Change in benefit obligation:
Benefit obligation at beginning of year	$	81,148		$	72,325		$	23,794		$	24,094
Service cost		3,144			3,188			1,153			1,156
Interest cost		2,851			2,803			724			871
Settlement		191			263			--			--
Benefits paid		(11,371	)		(6,974	)		(1,370	)		(1,324	)
Effect of foreign Exchange		--			--			(68	)		24
Actuarial (gain) Loss		(5,328	)		9,543			(4,439	)		(1,027	)
Benefit obligation at end of year	$	70,635		$	81,148		$	19,794		$	23,794

	Pension Plan						Postretirement Plan
	2013			2012			2013			2012
Change in plan assets:
Fair value of plan assets at beginning of year	$	73,631		$	65,754			--			--
Actual return on plan assets		4,429			7,651			--			--
Employer contributions		4,200			7,200			1,370			1,324
Benefits paid		(11,371	)		(6,974	)		(1,370	)		(1,324	)
Fair value of plan assets at end of year		70,889			73,631			--			--
Funded status at end of year	$	254		$	(7,517	)	$	(19,794	)	$	(23,794	)
Amounts recognized in the Consolidated Balance Sheets consist of:
Noncurrent assets	$	254		$	--		$	--		$	--
Total assets	$	254		$	--		$	--		$	--
Current liabilities	$	--		$	--		$	(1,401	)	$	(1,395	)
Noncurrent liabilities		--			(7,517	)		(18,393	)		(22,399	)
Total liabilities	$	--		$	(7,517	)	$	(19,794	)	$	(23,794	)
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss (gain)	$	24,295		$	35,029		$	(11,871	)	$	(8,154	)
Deferred tax (benefit) expense		(9,496	)		(13,434	)		4,471			3,160
After tax actuarial loss (gain)	$	14,799		$	21,595		$	(7,400	)	$	(4,994	)
Components of net periodic benefit cost:
Service cost	$	3,144		$	3,188		$	1,153		$	1,156
Interest cost		2,851			2,803			724			871
Expected return on plan assets		(5,080	)		(4,591	)		--			--
Recognized actuarial loss (gain)		2,080			2,441			(723	)		(647	)
Settlement loss		4,169			2,935			--			--
Net periodic benefit cost	$	7,164		$	6,776		$	1,154		$	1,380
Other changes in plan assets and benefit obligations recognized in other comprehensive loss:
Net (gain) loss	$	(10,374	)	$	1,371		$	(3,717	)	$	(384	)
Total (income) expense recognized in net periodic benefit cost and other comprehensive income	$	(3,570	)	$	8,147		$	(2,563	)	$	996

Schedule of Assumptions Used [Table Text Block]

	Pension Plan						Postretirement Plan
	2013			2012			2013			2012
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate		4.30	%		3.40	%		4.50	%		3.20	%
Rate of compensation increase		3.50	%		3.50	%		--			--
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate		4.30	%		4.00	%		3.20	%		3.76	%
Expected long-term rate of return on plan assets		7.00	%		7.00	%		--			--
Rate of compensation increase		3.50	%		3.50	%		--			--

Schedule of Allocation of Plan Assets [Table Text Block]

2013		$	%
Level 1
Equity	$	21,795		31	%
Fixed Income		919		1	%
Mutual Funds		5,031		7	%
Money Fund		2,043		3	%
Cash		90		0	%
Total Level 1		29,878		42	%
Level 2
Fixed Income		35,540		50	%
Money Fund		5,471		8	%
Total Level 2		41,011		58	%
Level 3
Total Level 3		--		--
Total fair value of Plan assets	$	70,889		100	%
2012		$	%
Level 1
Equity	$	27,628		38	%
Fixed Income		39,778		54	%
Balanced		6,210		8	%
Cash		15		--
Total Level 1		73,631		100	%
Level 2
Total Level 2		--		--
Level 2
Total Level 3		--		--
Total fair value of Plan assets	$	73,631		100	%

Schedule of Expected Benefit Payments [Table Text Block]

	2014		2015		2016		2017		2018		Thereafter
Pension	$	3,923	$	4,337	$	4,753	$	5,409	$	5,802	$	29,982
Postretirement		1,432		1,399		1,412		1,466		1,561		8,454

XML

Consolidated Statements of Equity (Parentheticals) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Issuance of treasury shares - shares	7,500	7,500	7,500
Cash dividends - per share amount (in Dollars per share)	$ 0.330	$ 0.312	$ 0.283

XML

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Net income	$ 30,104	$ 28,203	$ 28,804
Cumulative translation adjustments	(1,381)	437	(886)
Pension and postretirement medical liability adjustments, net of tax	9,202	(675)	(5,730)
Total adjustments	7,821	(238)	(6,616)
Comprehensive income	$ 37,925	$ 27,965	$ 22,188

XML

Note I - Business Segment Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note I – Business Segment Information

The Company operates in one business segment comprising the design, manufacture and sale of pumps and pump systems. The Company’s products are used in water, wastewater, construction, industrial, petroleum, original equipment, agriculture, fire protection, heating, ventilation and air conditioning (HVAC), military and other liquid-handling applications.

The pumps and pump systems are marketed in the United States and worldwide through a network of more than 1,000 distributors, through manufacturers’ representatives (for sales to many original equipment manufacturers), through third-party distributor catalogs, and by direct sales. International sales are made primarily through foreign distributors and representatives.

The Company sells to more than 120 countries around the world. The components of customer sales, determined based on the location of customers are:

	2013		%		2012		%		2011		%
United States	$	257,038		66	$	239,153		64	$	241,405		67
Foreign countries		134,627		34		136,538		36		118,085		33
Total	$	391,665		100	$	375,691		100	$	359,490		100

Net sales from external customers by product category are:

	2013		2012		2011
Pumps and pump systems	$	336,779	$	318,235	$	303,479
Repairs and other		54,886		57,456		56,011
Total	$	391,665	$	375,691	$	359,490

As of December 31, 2013 and 2012, 99% and 98% of the Company’s long-lived assets were located in the United States, respectively.

XML

Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 01, 2014	Jun. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	GORMAN RUPP CO
Document Type	10-K
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		26,253,043
Entity Public Float			$ 413,792,255
Amendment Flag	false
Entity Central Index Key	0000042682
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY

XML

Note J - Acquisitions

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note J – Acquisitions

During the year ended December 31, 2012, the Company completed two business combinations. The results of operations of the acquired companies have been included in Gorman-Rupp’s consolidated results since the effective date of each transaction. The Company financed the all-cash acquisitions through cash on hand and borrowed $17.0 million under a short-term unsecured bank loan agreement. Supplemental pro forma information has not been provided as the acquisitions did not have a material impact on the Company’s consolidated results of operations individually or in aggregate.

In September 2012, the Company’s wholly-owned subsidiary, Gorman-Rupp Africa Proprietary Limited (“GR Africa”), purchased the business of Pumptron (Proprietary) Limited (“Pumptron”) through internally generated cash flows. Pumptron has been an international value-added distributor for Gorman-Rupp for over 25 years and will further enhance the Company’s continuing international expansion. Founded in 1986, Pumptron is a leading provider of water-related pumping solutions primarily serving the construction, mining, agricultural and municipal markets in South Africa and increasingly throughout other sub-Sahara African countries. Pumptron is headquartered in Johannesburg with operating locations in Cape Town and Durban, all in South Africa, and had approximately $10 million in revenue during its fiscal year 2012, which consisted primarily of Gorman-Rupp products.

In December 2012, the Company’s wholly-owned subsidiary, National Pump Company, acquired substantially all of the assets and certain liabilities of American Turbine. Founded in 1975, American Turbine is a group of companies that collectively are a leading manufacturer and distributor of energy-efficient vertical turbine and submersible pumps primarily serving agricultural, municipal and industrial markets, both domestically and globally. During 2011, American Turbine had approximately $15 million in revenue from sales of its products through its Lubbock, Texas headquarters and two other locations in Houston, Texas and Fresno, California. American Turbine will help expand sales in target growth markets and complement existing brands of National Pump Company. In addition, the acquired facilities will provide additional capacity, including machining and testing capabilities.

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 31,123	$ 20,119
Short-term investments	253	254
Accounts receivable, net	59,374	58,712
Inventories, net:
Raw materials and in-process	26,877	23,967
Finished parts	46,491	52,607
Finished products	16,578	14,324
	89,946	90,898
Deferred income taxes	3,803	2,803
Prepaid and other	4,790	2,889
Total current assets	189,289	175,675
Property, plant, and equipment
Land	3,048	3,048
Buildings	96,775	96,261
Machinery and equipment	153,935	143,471
	253,758	242,780
Accumulated depreciation	122,569	119,714
Property, plant and equipment - net	131,189	123,066
Deferred income taxes	20	153
Other	3,637	4,003
Goodwill and other intangible assets - net	31,503	32,286
	355,638	335,183
Current Liabilities:
Accounts payable	17,882	14,897
Short-term debt	9,000	22,000
Payroll and employee related liabilities	11,020	10,646
Commissions payable	6,081	7,568
Deferred revenue	7,190
Accrued expenses	9,587	9,710
Total current liabilities	60,760	64,821
Pension benefits		7,517
Postretirement benefits	18,393	22,399
Deferred and other income taxes	12,345	5,727
Total liabilities	91,498	100,464
Common Shares, without par value:
Outstanding - 26,253,043 shares in 2013 and 26,246,116 shares in 2012 (after deducting treasury shares of 795,753 in 2013 and 803,254 in 2012) at stated capital amount	5,131	5,130
Additional paid-in capital	2,822	2,693
Retained earnings	264,648	243,178
Accumulated other comprehensive loss	(8,461)	(16,282)
Total equity	264,140	234,719
	$ 355,638	$ 335,183

XML

Note D - Financing Arrangements

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note D – Financing Arrangements

On December 17, 2012, the Company borrowed $17.0 million under an unsecured bank loan agreement to finance the acquisition of American Turbine. The loan bears interest at LIBOR plus 0.75%, adjustable and payable monthly, and, with annual renewal, matures in August 2015. At December 31, 2013, $3.0 million was outstanding against this agreement.

On December 6, 2013, the Company borrowed $6.0 million in a promissory note for the purchase of equipment. The loan bears interest at LIBOR plus 0.75%, adjustable and payable monthly, and is expected to be paid in full by December 31, 2014.

The Company may borrow up to $20.0 million with interest at LIBOR plus 0.75% or at alternative rates as selected by the Company under an unsecured bank line of credit which matures in August, 2015. At December 31, 2013 and 2012, $20.0 million and $19.3 million, respectively, were available for borrowing after deducting $700,000 in outstanding letters of credit in 2012.

The Company also has a $10.0 million unsecured bank line of credit with interest at LIBOR plus 0.75% payable monthly which matures in May 2014. At December 31, 2013 and 2012, $6.0 million and $4.9 million, respectively, was available for borrowing after deducting $4.0 million and $5.1 million in outstanding letters of credit, respectively.

The financing arrangements described above contain nominal restrictive covenants, including limits on additional borrowings and maintenance of certain operating and financial ratios. At December 31, 2013 and 2012, the Company was in compliance with all requirements.

Interest expense, which approximates interest paid, was $146,000, $122,000 and $179,000 in 2013, 2012 and 2011, respectively.

The Company has operating leases for certain offices, manufacturing facilities, land, office equipment and automobiles. Rental expense relating to operating leases was $1,109,000, $1,068,000 and $866,000 in 2013, 2012 and 2011, respectively.

The future minimum lease payments due under these operating leases as of December 31, 2013 are:

2014		2015		2016		2017		2018		Thereafter		Total
$	860	$	539	$	398	$	272	$	211	$	11	$	2,291

XML

Note C - Inventories

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note C – Inventories

Inventories are stated at the lower of cost or market. Replacement cost approximates current cost and the excess over LIFO cost is approximately $55.3 million and $53.2 million at December 31, 2013 and 2012, respectively. Allowances for excess and obsolete inventory totaled $3.8 million and $3.3 million at December 31, 2013 and 2012, respectively.

XML

Note F - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	2013			2012			2011
Current Expense:
Federal	$	12,159		$	11,542		$	10,037
Foreign		792			(324	)		1,576
State and Local		981			1,021			761
		13,932			12,239			12,374
Deferred expense (benefit):
Federal		108			2,109			1,429
Foreign		(38	)		(189	)		(101	)
State and Local		171			85			179
		241			2,005			1,507
Income tax expense	$	14,173		$	14,244		$	13,881

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	2013			2012			2011
Income taxes at statutory rate	$	15,497		$	14,856		$	14,940
State and local income taxes, net of federal tax benefit		587			719			611
Research and development tax credits		(740	)		--			(375	)
Domestic production activities		(952	)		(980	)		(811	)
Lower foreign taxes differential		(612	)		(528	)		(577	)
Uncertain tax positions		94			(236	)		49
Valuation Allowance		162			--			--
Other		137			413			44
Income tax expense	$	14,173		$	14,244		$	13,881

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	2013			2012			2011
Deferred tax assets:
Inventories	$	1,688		$	170		$	49
Accrued liabilities		2,341			2,430			2,506
Postretirement health benefits obligation		6,545			7,848			8,060
Pension		--			1,217			873
Other		101			452			1,634
Total deferred income tax assets		10,675			12,117			13,122
Valuation allowance		(162	)		--			--
Net deferred income tax assets		10,513			12,117			13,122
Deferred tax liabilities:
Depreciation and amortization		16,858			14,376			13,419
Pension		1,634			--			--
		18,492			14,376			13,419
Net deferred tax liabilities	$	(7,979	)	$	(2,259	)	$	(297	)

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

	2013			2012			2011
Balance at beginning of year	$	421		$	1,423		$	1,298
Additions based on tax positions related to the current year		189			68			132
(Reduction) additions for tax positions of prior years		--			(1	)		117
Reductions due to lapse of applicable statute of limitations		(46	)		(131	)		(124	)
Settlements		(48	)		(938	)		--
Balance at end of year	$	516		$	421		$	1,423

XML

Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

General Information and Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Earnings per share are calculated based on the weighted-average number of common shares outstanding.

Stockholders' Equity, Policy [Policy Text Block]

Stock Split

On October 24, 2013, the Company declared a five -for -four split of its common shares in the form of a distribution of one additional common share for each four common shares previously issued. The distribution was made on December 10, 2013. Accordingly, all share amounts and per share data throughout this Annual Report have been restated to reflect the stock split.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents and Short-Term Investments

The Company considers highly liquid instruments with maturities of 90 days or less to be cash equivalents. The Company periodically makes short-term investments for which cost approximates fair value. Short-term investments at December 31, 2013 and 2012 consist primarily of certificates of deposit.

Receivables, Policy [Policy Text Block]

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products delivered. The Company estimates this allowance based on knowledge of the financial condition of customers, review of historical receivables and reserve trends and other relevant information.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at the lower of cost or market. The costs for approximately 76% of inventories at December 31, 2013 and 73% of inventories at December 31, 2012 are determined using the last-in, first-out (LIFO) method, with the remainder determined using the first-in, first-out method (FIFO). Cost components include materials, inbound freight costs, labor and allocations of fixed and variable overheads on an absorption costing basis.

Property, Plant and Equipment, Policy [Policy Text Block]

Assets

Property, plant and equipment are stated on the basis of cost. Repairs and maintenance costs are expensed as incurred. Depreciation for property, plant and equipment and amortization for finite-lived intangible assets are computed by the straight-line method over the estimated useful lives of the assets and are included in cost of products sold and selling, general and administrative expenses based on the use of the assets. Depreciation expense was $12.4 million, $11.2 million and $10.5 million during 2013, 2012 and 2011, respectively.

Depreciation of property, plant and equipment is determined based on the following lives:

Buildings (years)	20	-	50
Machinery and equipment (years)	5	-	15
Software (years)	3	-	5

Amortization of finite-lived intangible assets is determined based on the following lives:

Technology and drawings (years)	15	-	20
Customer relationships (years)	9	-	10
Other intangibles (years)	2	-	18

Long-lived assets, except goodwill and indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recovered through future net cash flows generated by the assets. Impairment losses may be recorded when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts based on the excess of the carrying amounts over the estimated fair value of the assets

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill and Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets primarily consist of trademarks and trade names. Goodwill and indefinite-lived intangible assets are tested annually for impairment as of October 1, or whenever events or changes in circumstances indicate there may be a possible permanent loss of value in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other.

Goodwill is tested for impairment at the applicable reporting unit level and is based on the net assets for the applicable reporting unit, including goodwill and intangible assets. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary.

In assessing the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we identify and assess relevant drivers of fair value and events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments and assumptions. The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Company specific events and share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.

If our qualitative assessment concludes that it is more likely than not that impairment exists then a quantitative assessment is required. In a quantitative assessment, a discounted cash flow model is used to estimate the fair value of each reporting unit, which considers forecasted cash flows discounted at a market based weighted-average cost of capital. The forecasted cash flows are based on the Company’s long-term operating plan and the weighted-average cost of capital is an estimate of the overall after-tax rate of return of market participants. Other valuation techniques including comparative market multiples are used when appropriate. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.

The Company has completed its annual goodwill impairment test for each year presented and concluded no reporting unit was at risk of failing the impairment test for any periods presented herein.

In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02 which amends the rules for testing indefinite-lived intangible assets other than goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount similar to the goodwill impairment testing described above. The Company early-adopted ASU 2012-02 for its October 1, 2012 annual impairment test. The Company has completed its annual impairment test for each year presented and concluded that the fair value of indefinite-lived intangible assets substantially exceeded the respective carrying value.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company’s revenues from product sales are recognized when all of the following criteria are met: persuasive evidence of a sale arrangement exists, the price is fixed or determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectability is probable. Product delivery occurs when the risks and rewards of ownership and title pass, which normally occurs upon shipment to the customer.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

of Credit Risk

The Company generally does not require collateral from its customers and has a very good collection history. There were no sales to a single customer that exceeded 10% of total net sales for the years ended December 31, 2013, 2012 or 2011.

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and Handling Costs

The Company classifies all amounts billed to customers for shipping and handling as revenue and reflects related shipping and handling costs in cost of products sold.

Advertising Costs, Policy [Policy Text Block]

Advertising

The Company expenses all advertising costs as incurred, which for the years ended December 31, 2013, 2012 and 2011 totaled $3.4 million, $3.5 million, and $3.4 million, respectively.

Standard Product Warranty, Policy [Policy Text Block]

Product Warranties

A liability is established for estimated future warranty and service claims based on historical claims experience and specific product failures. The Company expenses warranty costs directly to cost of products sold.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

Assets and liabilities of the Company’s operations outside the United States which are accounted for in a functional currency other than U.S. dollars are translated into U.S. dollars using year-end exchange rates. Revenues and expenses are translated at weighted-average exchange rates effective during the year. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within equity.

Gains and losses resulting from foreign currency transactions, the amounts of which are not material, are included in net income.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximates their fair value.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

XML

Note G - Pensions and Other Postretirement Benefits

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note G – Pensions and Other Postretirement Benefits

The Company sponsors a defined benefit pension plan (“Plan”) covering certain domestic employees. Benefits are based on each covered employee’s years of service and compensation. The Plan is funded in conformity with the funding requirements of applicable U.S. regulations. The Plan was closed to new participants effective January 1, 2008. Employees hired after this date, in eligible locations, participate in an enhanced 401(k) plan instead of the defined benefit pension plan. Employees hired prior to this date continue to accrue benefits.

Additionally, the Company sponsors defined contribution pension plans made available to all domestic and Canadian employees. Total contributions for the plans in 2013, 2012 and 2011 were $1.34 million, $1.22 million and $1.0 million, respectively.

The Company also sponsors a non-contributory defined benefit health care plan that provides health benefits to certain domestic and Canadian retirees and their spouses. The Company funds the cost of these benefits as incurred. For measurement purposes, and based on maximum benefits as defined by the plan, a zero percent annual rate of increase in the per capita cost of covered health care benefits for retirees age 65 and over was assumed for 2013 and is expected to remain constant going forward. A 5% rate of increase for retirees under age 65 was assumed.

The Company recognizes the obligations associated with its defined benefit pension plan and defined benefit health care plan in its consolidated financial statements. The following table presents the plans’ funded status as of the measurement date reconciled with amounts recognized in the Company’s consolidated balance sheets:

	Pension Plan						Postretirement Plan
	2013			2012			2013			2012
Accumulated benefit obligation at end of year	$	57,632		$	65,427		$	19,794		$	23,794
Change in benefit obligation:
Benefit obligation at beginning of year	$	81,148		$	72,325		$	23,794		$	24,094
Service cost		3,144			3,188			1,153			1,156
Interest cost		2,851			2,803			724			871
Settlement		191			263			--			--
Benefits paid		(11,371	)		(6,974	)		(1,370	)		(1,324	)
Effect of foreign Exchange		--			--			(68	)		24
Actuarial (gain) Loss		(5,328	)		9,543			(4,439	)		(1,027	)
Benefit obligation at end of year	$	70,635		$	81,148		$	19,794		$	23,794

	Pension Plan						Postretirement Plan
	2013			2012			2013			2012
Change in plan assets:
Fair value of plan assets at beginning of year	$	73,631		$	65,754			--			--
Actual return on plan assets		4,429			7,651			--			--
Employer contributions		4,200			7,200			1,370			1,324
Benefits paid		(11,371	)		(6,974	)		(1,370	)		(1,324	)
Fair value of plan assets at end of year		70,889			73,631			--			--
Funded status at end of year	$	254		$	(7,517	)	$	(19,794	)	$	(23,794	)
Amounts recognized in the Consolidated Balance Sheets consist of:
Noncurrent assets	$	254		$	--		$	--		$	--
Total assets	$	254		$	--		$	--		$	--
Current liabilities	$	--		$	--		$	(1,401	)	$	(1,395	)
Noncurrent liabilities		--			(7,517	)		(18,393	)		(22,399	)
Total liabilities	$	--		$	(7,517	)	$	(19,794	)	$	(23,794	)
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss (gain)	$	24,295		$	35,029		$	(11,871	)	$	(8,154	)
Deferred tax (benefit) expense		(9,496	)		(13,434	)		4,471			3,160
After tax actuarial loss (gain)	$	14,799		$	21,595		$	(7,400	)	$	(4,994	)
Components of net periodic benefit cost:
Service cost	$	3,144		$	3,188		$	1,153		$	1,156
Interest cost		2,851			2,803			724			871
Expected return on plan assets		(5,080	)		(4,591	)		--			--
Recognized actuarial loss (gain)		2,080			2,441			(723	)		(647	)
Settlement loss		4,169			2,935			--			--
Net periodic benefit cost	$	7,164		$	6,776		$	1,154		$	1,380
Other changes in plan assets and benefit obligations recognized in other comprehensive loss:
Net (gain) loss	$	(10,374	)	$	1,371		$	(3,717	)	$	(384	)
Total (income) expense recognized in net periodic benefit cost and other comprehensive income	$	(3,570	)	$	8,147		$	(2,563	)	$	996

During 2013, 2012 and 2011, the Company recorded settlement losses relating to retirees that received lump-sum distributions from the Company’s defined benefit pension plan totaling $4.2 million, $2.9 million and $3.0 million, respectively. These charges were the result of lump-sum payments to retirees which exceeded the plan’s actuarial service and interest cost thresholds in each of 2013 and 2012.

The prior service cost is amortized on a straight-line basis over the average estimated remaining service period of active participants. The unrecognized actuarial gain or loss in excess of the greater of 10% of the benefit obligation or the market value of plan assets is also amortized on a straight-line basis over the average estimated remaining service period of active participants.

	Pension Plan						Postretirement Plan
	2013			2012			2013			2012
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate		4.30	%		3.40	%		4.50	%		3.20	%
Rate of compensation increase		3.50	%		3.50	%		--			--
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate		4.30	%		4.00	%		3.20	%		3.76	%
Expected long-term rate of return on plan assets		7.00	%		7.00	%		--			--
Rate of compensation increase		3.50	%		3.50	%		--			--

To enhance the Company’s efforts to mitigate the impact of the defined benefit pension plan on its financial statements, the Company has recently moved towards a liability driven investing model to more closely align assets with liabilities based on when the liabilities are expected to come due. Currently, based on 2013 funding levels, equities may comprise between 20% to 40% of the Plan’s market value. Fixed income investments may comprise between 50% to 70% of the Plan’s market value. Alternative investments may comprise between 0% to 12% of the Plan’s market value. Cash and cash equivalents (including all senior debt securities with less than one year to maturity) may comprise between 0% to 10% of the Plan’s market value.

Financial instruments included in pension plan assets are categorized into a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology. Level 1 assets are based on unadjusted quoted prices in active markets that are accessible to the reporting entity at the measurement date for identical assets. Level 2 assets are valued at inputs other than quoted prices in active markets for identical assets that are observable either directly or indirectly for substantially the full term of the assets. Level 3 assets are valued based on unobservable inputs for the asset (i.e., supported by little or no market activity). These inputs include management’s own assessments about the assumptions that market participants would use in pricing assets (including assumptions about risk). The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measure in its entirety.

All of the Plan’s assets are in level 1 or level 2 within the fair value hierarchy, and the following table sets forth by asset class the Plan’s fair value of assets.

Plan fair value asset allocation by category:

2013		$	%
Level 1
Equity	$	21,795		31	%
Fixed Income		919		1	%
Mutual Funds		5,031		7	%
Money Fund		2,043		3	%
Cash		90		0	%
Total Level 1		29,878		42	%
Level 2
Fixed Income		35,540		50	%
Money Fund		5,471		8	%
Total Level 2		41,011		58	%
Level 3
Total Level 3		--		--
Total fair value of Plan assets	$	70,889		100	%
2012		$	%
Level 1
Equity	$	27,628		38	%
Fixed Income		39,778		54	%
Balanced		6,210		8	%
Cash		15		--
Total Level 1		73,631		100	%
Level 2
Total Level 2		--		--
Level 2
Total Level 3		--		--
Total fair value of Plan assets	$	73,631		100	%

Contributions

The Company expects to contribute $4 million to $5 million to its pension plan in 2014.

Expected future benefit payments

The following benefit payments are expected to be paid as follows based on actuarial calculations:

	2014		2015		2016		2017		2018		Thereafter
Pension	$	3,923	$	4,337	$	4,753	$	5,409	$	5,802	$	29,982
Postretirement		1,432		1,399		1,412		1,466		1,561		8,454

A one percentage point increase in the assumed health care trend rate would increase postretirement expense by approximately $223,000, changing the benefit obligation by approximately $1.65 million; while a one percentage point decrease in the assumed health care trend rate would decrease postretirement expense by approximately $209,000, changing the benefit obligation by approximately $1.53 million.

A one percentage point change in the assumed rate of return on the defined benefit pension plan assets is estimated to have an approximate $738,000 effect on pension expense. Additionally, a one percentage point increase in the discount rate is estimated to have a $1.5 million decrease in pension expense, while a one percentage point decrease in the discount rate is estimated to have a $1.8 million increase in pension expense.

XML

Note E - Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2013

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss [Text Block]

Note E – Accumulated Other Comprehensive Loss

The reclassifications out of accumulated other comprehensive loss as reported in the Consolidated Statement of Income are:

Pension and other post retirement benefits:	2013			2012			2011
Recognized actuarial gain (loss) (a)	$	10,282		$	(3,922	)	$	(12,022	)
Settlement loss (b)		2,756			1,940			1,987
Settlement loss (c)		1,413			995			1,023
Total before income tax		14,451			(987	)		(9,012	)
Income tax		(5,249	)		312			3,282
Net of income tax	$	9,202		$	(675	)	$	(5,730	)

(a) The recognized actuarial gain (loss) is included in the computation of net periodic benefit cost. See Note G for additional details.

(b) This portion of the settlement loss is included in Cost of products sold in the Consolidated Statements of Income.

(c) This portion of the settlement loss is included in Selling, general and administrative expenses in the Consolidated Statements of Income.

The components of accumulated other comprehensive loss as reported in the Consolidated Balance Sheets are:

	Currency Translation Adjustments			Pension and OPEB Adjustments			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2011	$	768		$	(10,196	)	$	(9,428	)
Current period charge		(886	)		(9,012	)		(9,898	)
Income tax benefit		--			3,282			3,282
Balance at December 31, 2011		(118	)		(15,926	)		(16,044	)
Current period credit (charge)		437			(987	)		(550	)
Income tax benefit		--			312			312
Balance at December 31, 2012		319			(16,601	)		(16,282	)
Current period (charge) credit		(1,381	)		14,451			13,070
Income tax (charge)		--			(5,249	)		(5,249	)
Balance at December 31, 2013	$	(1,062	)	$	(7,399	)	$	(8,461	)

XML

Note F - Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note F – Income Taxes

The components of income tax expense are:

	2013			2012			2011
Current Expense:
Federal	$	12,159		$	11,542		$	10,037
Foreign		792			(324	)		1,576
State and Local		981			1,021			761
		13,932			12,239			12,374
Deferred expense (benefit):
Federal		108			2,109			1,429
Foreign		(38	)		(189	)		(101	)
State and Local		171			85			179
		241			2,005			1,507
Income tax expense	$	14,173		$	14,244		$	13,881

The reconciliation between income tax expense and the amount computed by applying the statutory federal income tax rate of 35% to income before income taxes is:

	2013			2012			2011
Income taxes at statutory rate	$	15,497		$	14,856		$	14,940
State and local income taxes, net of federal tax benefit		587			719			611
Research and development tax credits		(740	)		--			(375	)
Domestic production activities		(952	)		(980	)		(811	)
Lower foreign taxes differential		(612	)		(528	)		(577	)
Uncertain tax positions		94			(236	)		49
Valuation Allowance		162			--			--
Other		137			413			44
Income tax expense	$	14,173		$	14,244		$	13,881

The Company made income tax payments of $13.2 million, $12.0 million and $10.3 million in 2013, 2012 and 2011, respectively.

Deferred income tax assets and liabilities consist of:

	2013			2012			2011
Deferred tax assets:
Inventories	$	1,688		$	170		$	49
Accrued liabilities		2,341			2,430			2,506
Postretirement health benefits obligation		6,545			7,848			8,060
Pension		--			1,217			873
Other		101			452			1,634
Total deferred income tax assets		10,675			12,117			13,122
Valuation allowance		(162	)		--			--
Net deferred income tax assets		10,513			12,117			13,122
Deferred tax liabilities:
Depreciation and amortization		16,858			14,376			13,419
Pension		1,634			--			--
		18,492			14,376			13,419
Net deferred tax liabilities	$	(7,979	)	$	(2,259	)	$	(297	)

The Company has a valuation allowance as of December 31, 2013 of $162,000 against certain of its deferred tax assets. ASC 740 requires that a valuation allowance be recorded against deferred tax assets when it is more likely than not that some or all of a Company’s deferred tax assets will not be realized based on available positive and negative evidence.

At December 31, 2013, total unrecognized tax benefits were $516,000. Of the total, $412,000 of unrecognized tax benefits, if ultimately recognized, would reduce the Company’s annual effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2013			2012			2011
Balance at beginning of year	$	421		$	1,423		$	1,298
Additions based on tax positions related to the current year		189			68			132
(Reduction) additions for tax positions of prior years		--			(1	)		117
Reductions due to lapse of applicable statute of limitations		(46	)		(131	)		(124	)
Settlements		(48	)		(938	)		--
Balance at end of year	$	516		$	421		$	1,423

The Company is subject to income taxes in the U.S. federal and various state, local and foreign jurisdictions. Income tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2010. The Company has $56,000 of unrecognized tax benefits recorded for periods which the relevant statutes of limitations expire in the next 12 months.

As of December 31, 2013, the Company has state tax credit carryforwards of $343,000 set to expire between 2018 and 2022.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense for all periods presented. The Company accrued approximately $85,000, $91,000 and $361,000 for the payment of interest and penalties at December 31, 2013, 2012 and 2011 respectively.

The Company has not provided an estimate for any U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries that might be payable if these earnings were repatriated since the Company considers these amounts to be permanently invested. It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on remittance of such earnings.

In September 2013, the Internal Revenue Service issued final regulations governing the income tax treatment of acquisitions, dispositions, and repairs of tangible property. Taxpayers are required to follow the new regulations in taxable years beginning on or after January 1, 2014.

Management is currently assessing the impact of the regulations and does not expect they will have a material impact on the Company’s financial statements.

XML

Note H - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note H – Goodwill and Other Intangible Assets

The major components of goodwill and other intangible assets are:

	2013				2012
	Historical Cost		Accumulated Amortization		Historical Cost		Accumulated Amortization
Finite-lived intangible assets:
Customer relationships	$	8,170	$	2,403	$	8,366	$	1,582
Technology & drawings		5,790		1,685		5,790		1,379
Other intangibles		1,568		1,505		1,560		1,453
Total finite-lived intangible assets		15,528		5,593		15,716		4,414
Goodwill		18,046		--		17,452		--
Trade names & trademarks		3,522		--		3,532		--
Total	$	37,096	$	5,593	$	36,700	$	4,414

Amortization of intangible assets in 2013, 2012 and 2011 was $1,179,000, $869,000 and $955,000, respectively. Amortization of these intangible assets for 2014 through 2018 is expected to approximate $1.2 million per year. Pursuant to the acquisitions described in Note J, in 2012 the Company recognized customer relationships of $3.1 million, technology and drawings of $1.2 million, tradenames and trademarks of $612,000 and goodwill of $2.8 million. The remaining changes occurring in 2012 relate to foreign currency translation affects and amortization.

XML

Note D - Financing Arrangements (Details) - Future Minimum Lease Payments (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Future Minimum Lease Payments [Abstract]
	$ 860
	539
	398
	272
	211
	11
	$ 2,291

XML

Note I - Business Segment Information (Details) - Net Sales from External Customers by Product Category (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Segment Reporting Information [Line Items]
Net Sales	$ 391,665	$ 375,691	$ 359,490
Pumps And Pump Systems [Member]
Segment Reporting Information [Line Items]
Net Sales	336,779	318,235	303,479
Repairs and Other [Member]
Segment Reporting Information [Line Items]
Net Sales	$ 54,886	$ 57,456	$ 56,011

XML

Note D - Financing Arrangements (Tables)

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2014		2015		2016		2017		2018		Thereafter		Total
$	860	$	539	$	398	$	272	$	211	$	11	$	2,291

XML

Note I - Business Segment Information (Tables)

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	2013		%		2012		%		2011		%
United States	$	257,038		66	$	239,153		64	$	241,405		67
Foreign countries		134,627		34		136,538		36		118,085		33
Total	$	391,665		100	$	375,691		100	$	359,490		100

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	2013		2012		2011
Pumps and pump systems	$	336,779	$	318,235	$	303,479
Repairs and other		54,886		57,456		56,011
Total	$	391,665	$	375,691	$	359,490

XML

Note I - Business Segment Information (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Note I - Business Segment Information (Details) [Line Items]
Number of Reportable Segments	1
Number of Countries in which Entity Operates	120
UNITED STATES
Note I - Business Segment Information (Details) [Line Items]
Long-Lived Assets, Percent	99.00%	98.00%

XML

Note F - Income Taxes (Details) - Reconciliation of the Beginning and Ending Amount Of Unrecognized Tax Benefits (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Reconciliation of the Beginning and Ending Amount Of Unrecognized Tax Benefits [Abstract]
Balance at beginning of year	$ 421,000	$ 1,423,000	$ 1,298,000
Additions based on tax positions related to the current year	189,000	68,000	132,000
(Reduction) additions for tax positions of prior years		(1,000)	117,000
Reductions due to lapse of applicable statute of limitations	(46,000)	(131,000)	(124,000)
Settlements	(48,000)	(938,000)
Balance at end of year	$ 516,000	$ 421,000	$ 1,423,000

XML

Consolidated Balance Sheets (Parentheticals) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Common sharеs - authorizеd	35,000,000	35,000,000
Common sharеs - sharеs outstanding after deducting trеasury sharеs	26,253,043	26,246,116
Trеasury sharеs	795,753	803,254
Common sharеs, par valuе (in Dollars per share)	$ 0	$ 0

XML

Note B - Allowance for Doubtful Accounts

12 Months Ended

Dec. 31, 2013

Disclosure Text Block Supplement [Abstract]

Allowance for Credit Losses [Text Block]

Note B – Allowance for Doubtful Accounts

The allowance for doubtful accounts was $498,000 and $561,000 at December 31, 2013 and 2012, respectively.

XML

Note A - Summary of Significant Accounting Policies (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended			1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Oct. 24, 2013 Numerator [Member]	Oct. 24, 2013 Denominator [Member]
Note A - Summary of Significant Accounting Policies (Details) [Line Items]
Stockholders' Equity Note, Stock Split, Conversion Ratio				5	4
Percentage of LIFO Inventory	76.00%	73.00%
Depreciation	$ 12.4	$ 11.2	$ 10.5
Advertising Expense	$ 3.4	$ 3.5	$ 3.4

XML

Note F - Income Taxes (Details) - Components of Income Tax Expense (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Current Expense:
Federal	$ 12,159	$ 11,542	$ 10,037
Foreign	792	(324)	1,576
State and Local	981	1,021	761
	13,932	12,239	12,374
Deferred expense (benefit):
Federal	108	2,109	1,429
Foreign	(38)	(189)	(101)
State and Local	171	85	179
	241	2,193	1,608
Income tax expense	$ 14,173	$ 14,244	$ 13,881

XML

Note A - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Property, Plant, And Equipment, Useful Lives [Table Text Block]

Buildings (years)	20	-	50
Machinery and equipment (years)	5	-	15
Software (years)	3	-	5

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Technology and drawings (years)	15	-	20
Customer relationships (years)	9	-	10
Other intangibles (years)	2	-	18

Schedule of Product Warranty Liability [Table Text Block]

	2013			2012			2011
Balance at beginning of year	$	1,133		$	1,228		$	1,543
Provision		1,220			1,394			1,081
Claims		(1,183	)		(1,489	)		(1,396	)
Balance at end of year	$	1,170		$	1,133		$	1,228