Gorman-Rupp Posts Record Profit as Margins Keep Widening
Gorman-Rupp reported record second-quarter net income of $19.4 million as operating margin climbed to 16.3%, even as order growth slowed sharply from 2025's pace.
Gorman-Rupp (GRC) posted record net sales of $186.1 million in the second quarter and record net income of $19.4 million, or $0.74 a share, as margin gains that began recovering last quarter continued to build.
The pump maker's revenue growth accelerated to 3.9% year over year from 2.4% in the fourth quarter of 2025, though it remained below the 5.6% pace set in the second quarter of last year. The more notable shift was on the cost side. Gross margin reached 32.6%, up 130 basis points from a year earlier and well above the 29.2% low hit in the third quarter of 2025, when $2.7 million in facility optimization costs weighed on results. Operating margin followed the same arc, climbing to 16.3% from 12.4% in that same third-quarter trough and topping the 15.0% level from a year ago.
Net income of $19.4 million compared with $15.8 million in the prior-year quarter, extending a recovery that began in the fourth quarter of 2025, when earnings rose to $13.7 million from $11.0 million, after a dip in the third quarter to $11.3 million from $12.9 million. Adjusted EBITDA margin rose to 20.5% of sales from 19.7% a year earlier and from 18.9% in the fourth quarter, marking a fourth straight quarter of improvement.
The restructuring behind much of that margin recovery traces to the third quarter of 2025, when Gorman-Rupp took $3.0 million in facility optimization and restructuring charges tied to consolidating its NPC operations from six facilities to three. The move would generate $2.0 million to $2.5 million in annualized savings, and no comparable charges appeared in either the fourth quarter of 2025 or the second quarter of 2026.
Interest expense has fallen for five straight quarters on a year-over-year basis, dropping to $4.7 million from $6.0 million in the second quarter of last year, part of a broader deleveraging effort that cut total debt by $33.0 million in the first half of 2026 on top of a $60.0 million reduction across all of 2025.
Demand signals were less favorable. Incoming orders rose just 1.4% year over year in the first half to $370.8 million, a sharp slowdown from the 10.5% growth Gorman-Rupp posted for all of 2025 and the 19.2% surge recorded in the third quarter of that year. Backlog eased to $239.7 million at the end of June from $244.0 million at year-end 2025, though it remained above the $224.4 million level a year earlier.
The fourth quarter of 2025 also included a one-time, non-cash pension settlement charge of $1.2 million within other expense, a line item that did not recur in the second-quarter release.