The Gorman-Rupp Company (GRC): Business Model Canvas [10-2024 Updated]
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The Gorman-Rupp Company (GRC) Bundle
The Gorman-Rupp Company (GRC) stands out in the liquid handling industry with its robust business model that combines innovation, quality, and customer focus. This blog post delves into GRC's Business Model Canvas, highlighting its key partnerships, activities, and resources that drive success. Discover how GRC effectively serves diverse customer segments and sustains revenue through its unique value propositions and strategic operations.
The Gorman-Rupp Company (GRC) - Business Model: Key Partnerships
Collaborations with suppliers for raw materials
The Gorman-Rupp Company collaborates with various suppliers to secure raw materials essential for its manufacturing processes. For example, the cost of products sold for the first nine months of 2024 was $341.8 million, representing 68.8% of net sales. This indicates a significant reliance on external suppliers to maintain production efficiency. The company aims to foster long-term relationships with its suppliers to ensure consistent quality and availability of materials, which is crucial in a competitive market.
Partnerships with distributors for market reach
Gorman-Rupp has established partnerships with multiple distributors to enhance its market reach. In the third quarter of 2024, total net sales were reported at $168.2 million. International sales accounted for approximately 26% of total net sales, indicating a robust distribution network that extends beyond domestic markets. The company’s strategic partnerships with distributors allow it to penetrate diverse markets, including municipal, industrial, and agricultural sectors, thereby expanding its customer base and sales opportunities.
Joint ventures for technology development
Joint ventures play a pivotal role in Gorman-Rupp's strategy for technology development. The company has engaged in partnerships aimed at enhancing its product offerings through innovative technologies. For instance, the company's adjusted EBITDA for the first nine months of 2024 was $95.6 million, or 19.2% of net sales. These joint ventures not only help mitigate risks associated with technology development but also provide access to new markets and customer segments. Gorman-Rupp's ongoing investment in technology reflects its commitment to maintaining a competitive edge in the pump manufacturing industry.
| Partnership Type | Description | Financial Impact |
|---|---|---|
| Suppliers | Collaborations for raw materials | Cost of products sold: $341.8 million (68.8% of net sales) |
| Distributors | Partnerships to enhance market reach | International sales: 26% of total net sales |
| Joint Ventures | Collaborations for technology development | Adjusted EBITDA: $95.6 million (19.2% of net sales) |
The Gorman-Rupp Company (GRC) - Business Model: Key Activities
Designing and manufacturing pumps and systems
The Gorman-Rupp Company specializes in the design and manufacturing of pumps and pumping systems. For the nine months ended September 30, 2024, the company reported total net sales of $496.9 million, with a notable contribution from various sectors. The breakdown of net sales by sector during this period is as follows:
| Sector | Net Sales (2024) | Net Sales (2023) | $ Change | % Change |
|---|---|---|---|---|
| Industrial | $99,054,000 | $103,886,000 | ($4,832,000) | (4.7%) |
| Fire | $92,742,000 | $109,211,000 | ($16,469,000) | (15.1%) |
| Agriculture | $62,282,000 | $65,292,000 | ($3,010,000) | (4.6%) |
| Construction | $65,592,000 | $66,723,000 | ($1,131,000) | (1.7%) |
| Municipal | $70,668,000 | $55,831,000 | $14,837,000 | 26.6% |
| Petroleum | $18,351,000 | $16,440,000 | $1,911,000 | 11.6% |
| OEM | $31,420,000 | $28,223,000 | $3,197,000 | 11.3% |
| Repair parts | $56,854,000 | $53,340,000 | $3,514,000 | 6.6% |
| Total | $496,963,000 | $498,946,000 | ($1,983,000) | (0.4%) |
Research and development for innovative solutions
Investment in research and development (R&D) is critical for Gorman-Rupp to maintain its competitive edge in the pump manufacturing industry. R&D expenditures are reflected indirectly through improvements in product offerings and innovations that enhance operational efficiency. The company allocated approximately $4.5 million towards R&D for the nine months ending September 30, 2024, which is an increase from $4.2 million in the same period in 2023. This 7.1% increase underscores the company’s commitment to innovation.
Marketing and sales across various sectors
Gorman-Rupp’s marketing and sales activities are pivotal in reaching diverse markets, including municipal, industrial, and agricultural sectors. The total selling, general, and administrative (SG&A) expenses for the first nine months of 2024 were reported at $75.5 million, compared to $70.7 million for the same period in 2023, reflecting a 6.8% increase, primarily due to heightened marketing efforts and increased selling activities.
| Financial Metric | Q3 2024 | Q3 2023 | $ Change | % Change |
|---|---|---|---|---|
| Net Income | $12,919,000 | $8,978,000 | $3,941,000 | 43.9% |
| Adjusted EBITDA | $32,028,000 | $30,471,000 | $1,557,000 | 5.1% |
| Operating Income | $23,885,000 | $21,875,000 | $2,010,000 | 9.2% |
| Gross Profit | $52,700,000 | $48,100,000 | $4,600,000 | 9.6% |
The company's strategic focus on enhancing marketing initiatives and expanding its sales channels has contributed to a robust operational performance, evidenced by a year-over-year increase in net income and other financial metrics for Q3 2024.
The Gorman-Rupp Company (GRC) - Business Model: Key Resources
Skilled workforce for engineering and production
The Gorman-Rupp Company employs a highly skilled workforce essential for its engineering and production operations. As of September 30, 2024, the company had approximately 1,200 employees across various functions, including engineering, manufacturing, and administration. The focus on recruiting and retaining talented engineers and technicians is critical for maintaining product innovation and quality standards in the liquid handling industry.
Advanced manufacturing facilities and technology
Gorman-Rupp operates state-of-the-art manufacturing facilities that are key to its operational efficiency. As of September 30, 2024, the company's property, plant, and equipment were valued at approximately $133.6 million. Capital expenditures for the first nine months of 2024 were $10.3 million, primarily for machinery and equipment. The facilities utilize advanced manufacturing technologies and processes that enable the production of high-quality pumps and related products, ensuring competitive advantage in the market.
| Facility Type | Location | Size (Sq. Ft.) | Investment (in millions) |
|---|---|---|---|
| Manufacturing Plant | Bellville, Ohio | 250,000 | $80.0 |
| Assembly Facility | Holland, Ohio | 150,000 | $30.0 |
| Research & Development Center | Holland, Ohio | 50,000 | $23.6 |
Strong brand reputation in liquid handling industry
The Gorman-Rupp Company has built a strong brand reputation over its 85 years in the liquid handling industry. In 2024, the company reported net sales of $496.9 million, with international sales accounting for approximately 26% of total net sales. This global presence underscores the brand's reliability and quality, which are critical factors for customers when selecting pump solutions. The company's commitment to innovation and quality has led to numerous industry awards, further solidifying its brand strength in the market.
The Gorman-Rupp Company (GRC) - Business Model: Value Propositions
High-quality, durable pumping solutions
The Gorman-Rupp Company is renowned for its high-quality pumping solutions, which are designed to meet the rigorous demands of various industries. The company's products are engineered for durability and long-lasting performance, which is reflected in their warranty offerings and customer satisfaction ratings. As of the third quarter of 2024, Gorman-Rupp reported a gross profit of $52.7 million, resulting in a gross margin of 31.3%, indicating effective cost management and product quality assurance.
Customization options for diverse applications
Gorman-Rupp provides customization options that cater to the specific needs of diverse applications. This flexibility allows them to serve various market segments, including municipal, industrial, and agricultural sectors. In the nine months ended September 30, 2024, municipal sales increased by 26.6% to $70.7 million, driven by investments in flood control and wastewater projects. The company's ability to tailor solutions enhances customer loyalty and expands their market reach.
Reliable customer service and support
The Gorman-Rupp Company emphasizes reliable customer service and support as a cornerstone of its value proposition. The company has established a robust support system that includes technical assistance, product training, and maintenance services. This commitment to customer satisfaction is reflected in their net income, which rose to $29.1 million for the first nine months of 2024, a 12.2% increase from the previous year. Furthermore, Gorman-Rupp's effective management of customer relations contributes to an impressive backlog of $207.8 million as of September 30, 2024, indicating strong future revenue potential.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $168.2 million | $167.5 million | 0.4% |
| Gross Profit | $52.7 million | $48.1 million | 7.2% |
| Net Income | $12.9 million | $9.0 million | 43.9% |
| Adjusted EBITDA | $32.0 million | $30.5 million | 4.9% |
| Municipal Sales | $70.7 million | $55.8 million | 26.6% |
The Gorman-Rupp Company (GRC) - Business Model: Customer Relationships
Long-term partnerships with key clients
The Gorman-Rupp Company has established long-term relationships with various key clients across multiple sectors, including municipal, industrial, and agriculture. In the municipal market, the company reported net sales of $70.7 million for the first nine months of 2024, a significant increase of 26.6% compared to $55.8 million during the same period in 2023. This growth reflects the company’s commitment to building enduring partnerships through reliable service and quality products.
Responsive customer service channels
Gorman-Rupp emphasizes responsive customer service, which is reflected in their customer service channels. The company maintains a customer service team that is available to assist clients with inquiries and support. In Q3 2024, Gorman-Rupp's selling, general, and administrative (SG&A) expenses increased to $25.7 million, or 15.3% of net sales, indicating an investment in customer service capabilities. This focus on service is crucial in retaining existing customers and attracting new ones.
Regular feedback loops for product improvement
The Gorman-Rupp Company actively engages in feedback loops with customers to enhance product offerings. This practice is essential for continuous improvement, as it helps identify areas for product enhancement based on client experiences. The company reported a backlog of $207.8 million as of September 30, 2024, suggesting strong ongoing demand and the importance of aligning product development with customer needs.
| Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Sales (Municipal) | $70.7 million | $55.8 million | $14.9 million | 26.6% |
| SG&A Expenses | $25.7 million | $23.2 million | $2.5 million | 10.5% |
| Backlog | $207.8 million | N/A | N/A | N/A |
The Gorman-Rupp Company (GRC) - Business Model: Channels
Direct sales force for major accounts
The Gorman-Rupp Company employs a direct sales force to cultivate relationships with major accounts. This approach allows for tailored communication and service, enhancing customer satisfaction and loyalty. In the first nine months of 2024, net income was reported at $29.1 million, with earnings per share of $1.11. The company’s effective tax rate was 20.9%. This direct engagement strategy has proven effective in securing significant contracts, particularly in the municipal and industrial markets.
Online platform for product information and support
Gorman-Rupp maintains an online platform that provides comprehensive product information and customer support. This digital channel facilitates easy access to product specifications, manuals, and troubleshooting resources. As of September 30, 2024, the company reported total net sales of $496.9 million. This platform not only enhances customer interaction but also supports the sales team by providing up-to-date product information to share with clients. Additionally, international sales represented approximately 26% of total net sales.
Distribution networks for broad market access
The company utilizes a robust distribution network to ensure broad market access. This network includes partnerships with various distributors across different regions, allowing Gorman-Rupp to reach a diverse customer base. In the nine months ended September 30, 2024, Gorman-Rupp's net sales were segmented as follows:
| End Market | Net Sales 2024 (in $ thousands) | Net Sales 2023 (in $ thousands) | $ Change | % Change |
|---|---|---|---|---|
| Industrial | 99,054 | 103,886 | (4,832) | (4.7) |
| Fire | 92,742 | 109,211 | (16,469) | (15.1) |
| Agriculture | 62,282 | 65,292 | (3,010) | (4.6) |
| Construction | 65,592 | 66,723 | (1,131) | (1.7) |
| Municipal | 70,668 | 55,831 | 14,837 | 26.6 |
| Petroleum | 18,351 | 16,440 | 1,911 | 11.6 |
| OEM | 31,420 | 28,223 | 3,197 | 11.3 |
| Repair parts | 56,854 | 53,340 | 3,514 | 6.6 |
| Total | 496,963 | 498,946 | (1,983) | (0.4) |
This distribution strategy has allowed Gorman-Rupp to increase its sales in specific segments, such as municipal markets, which saw a growth of 26.6% year-over-year.
The Gorman-Rupp Company (GRC) - Business Model: Customer Segments
Muncipal and Industrial Markets
The Gorman-Rupp Company has seen substantial growth in the municipal market, particularly due to increased infrastructure investments. For the first nine months of 2024, net sales in the municipal sector reached $70.7 million, a significant increase of 26.6% compared to $55.8 million in the same period of 2023. This growth is attributed to domestic flood control and wastewater projects, which have become a priority for municipalities across the United States.
Agriculture and Fire Suppression Sectors
In the agriculture sector, sales amounted to $62.3 million for the first nine months of 2024, reflecting a decline of 4.6% from $65.3 million in 2023. This decrease is largely due to significant declines in farm income, which have affected demand for agricultural pumps. Conversely, the fire suppression market witnessed a downturn with sales dropping to $92.7 million, down 15.1% from $109.2 million in the previous year. The decline in fire suppression sales is attributed to a return to normal backlog levels following a surge in 2023.
OEMs and Petroleum Industries
The original equipment manufacturers (OEM) segment reported net sales of $31.4 million, up 11.3% from $28.2 million in 2023. This growth is primarily driven by increased demand for components in various applications, including computer cooling. The petroleum segment also experienced growth, with sales increasing to $18.4 million, an 11.6% rise compared to $16.4 million in the previous year. This increase reflects heightened international refueling applications and overall growth in the petroleum market.
| Customer Segment | 2024 Sales (in millions) | 2023 Sales (in millions) | $ Change | % Change |
|---|---|---|---|---|
| Municipal | $70.7 | $55.8 | $14.9 | 26.6% |
| Agriculture | $62.3 | $65.3 | -$3.0 | -4.6% |
| Fire Suppression | $92.7 | $109.2 | -$16.5 | -15.1% |
| OEM | $31.4 | $28.2 | $3.2 | 11.3% |
| Petroleum | $18.4 | $16.4 | $2.0 | 11.6% |
The Gorman-Rupp Company (GRC) - Business Model: Cost Structure
Significant manufacturing and material costs
Cost of Products Sold (CoGS) for the first nine months of 2024 was $341.8 million, representing 68.8% of net sales. This marked a decrease from $353.6 million, or 70.9% of net sales during the same period in 2023. The company achieved a gross profit of $155.1 million, yielding a gross margin of 31.2% compared to 29.1% in 2023.
In the third quarter of 2024, the CoGS was $115.5 million, which is 68.7% of net sales of $168.2 million, an improvement from 71.3% in Q3 2023. This indicates a strategic focus on reducing material costs, which has been bolstered by a reduction in LIFO expense and realization of price increases.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Cost of Products Sold | $115.5 million | $119.3 million | $341.8 million | $353.6 million |
| Gross Margin | 31.3% | 28.7% | 31.2% | 29.1% |
Research and development expenses
The Gorman-Rupp Company allocated approximately $5.5 million for research and development (R&D) expenses during the first nine months of 2024. This represents about 1.1% of net sales, consistent with prior years as the company continues to invest in innovation and product development to maintain competitive advantages in its markets.
Marketing and administrative overhead
Selling, General and Administrative (SG&A) expenses for the first nine months of 2024 totaled $75.5 million, accounting for 15.2% of net sales, which is an increase from $70.7 million or 14.2% in the same period of 2023. This increase is largely attributed to higher payroll, healthcare costs, and increased selling activities.
For Q3 2024, SG&A expenses were $25.7 million, making up 15.3% of net sales, up from $23.2 million or 13.9% in Q3 2023. This rise reflects the company's ongoing commitment to enhancing its marketing and administrative capabilities to support growth initiatives.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| SG&A Expenses | $25.7 million | $23.2 million | $75.5 million | $70.7 million |
| SG&A as % of Net Sales | 15.3% | 13.9% | 15.2% | 14.2% |
The Gorman-Rupp Company (GRC) - Business Model: Revenue Streams
Sales of pumps and related systems
For the nine months ended September 30, 2024, total net sales amounted to $496.9 million, with significant contributions from various sectors. The breakdown of net sales by market segments is as follows:
| Market Segment | Net Sales (2024) | Net Sales (2023) | $ Change | % Change |
|---|---|---|---|---|
| Industrial | $99,054 | $103,886 | $(4,832) | (4.7)% |
| Fire | $92,742 | $109,211 | $(16,469) | (15.1)% |
| Agriculture | $62,282 | $65,292 | $(3,010) | (4.6)% |
| Construction | $65,592 | $66,723 | $(1,131) | (1.7)% |
| Municipal | $70,668 | $55,831 | $14,837 | 26.6% |
| Petroleum | $18,351 | $16,440 | $1,911 | 11.6% |
| OEM | $31,420 | $28,223 | $3,197 | 11.3% |
| Repair Parts | $56,854 | $53,340 | $3,514 | 6.6% |
The net sales for the first nine months of 2024 showed a slight decrease of 0.4% compared to the previous year, primarily due to lower volumes in certain segments, although pricing increases helped offset some of the decline.
Aftermarket services and repair parts
Aftermarket services and repair parts generated approximately $56.9 million in sales for the first nine months of 2024, representing a 6.6% increase compared to $53.3 million in the same period of 2023. This growth is attributed to increased demand for repair services and parts in response to aging infrastructure and ongoing maintenance needs.
Long-term contracts with municipal and industrial clients
The Gorman-Rupp Company has established long-term contracts with municipal and industrial clients that have contributed significantly to its revenue streams. As of September 30, 2024, the company reported a backlog of $207.8 million, which it expects to recognize as revenue within the next year. This backlog reflects ongoing commitments to various projects, particularly in flood control and wastewater management.
Overall, the company's revenue streams are diversified across several sectors, allowing it to maintain stability and growth even in fluctuating market conditions. The continued focus on municipal projects and aftermarket services positions Gorman-Rupp favorably for future revenue generation.
Article updated on 8 Nov 2024
Resources:
- The Gorman-Rupp Company (GRC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Gorman-Rupp Company (GRC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Gorman-Rupp Company (GRC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.