MANSFIELD – The Gorman-Rupp Company (NYSE: GRC) reported a strong financial picture in its third-quarter results, ending Sept. 30, 2026.
“We are very pleased with our third-quarter results, which included record net sales, gross margin, and earnings per share,” said Scott A. King, President and CEO. “This marks the third consecutive quarter with record earnings per share and the second consecutive quarter with record sales.
“Our sales growth was broad-based with all of our markets showing growth over the same quarter last year. Our margins remained strong as increased volumes drove leverage on labor, overhead and SG&A expenses,” King said.
“These operating improvements, together with lower interest expense, contributed to record earnings and strong cash generation. Solid operating cash flow allowed us to reduce total debt by $58.0 million during the first nine months of the year while also continuing to invest in the business,” King noted.
“Incoming orders and backlog remain healthy, and our diverse markets and strong financial position provide a solid foundation as we enter the fourth quarter.”
Third quarter 2026 highlights
Record net sales of $193.3 million increased 11.8%, or $20.4 million, compared to the third quarter of 2025.
Record net income of $22.7 million, or $0.86 per share, compared to net income of $11.3 million, or $0.43 per share, for the third quarter of 2025.
o Adjusted earnings per shar1 for the third quarter of 2026 and 2025 were $0.86 and $0.52, respectively.
Record adjusted EBITDA of $41.8 million, which was 21.6% of sales, an increase of $9.5 million, or 29.4%, over the third quarter of 2025.
Net sales for the third quarter of 2026 were $193.3 million compared to net sales of $172.8 million for the third quarter of 2025, an increase of 11.8%, or $20.4 million. Sales increased across all of our markets driven by volume growth as well as price increases taken in the first quarter of 2026.
Sales increased $4.7 million in the agriculture market, $3.5 million in the construction market, and $3.4 million in the industrial market, in each case due in part to improvement across Fill-Rite’s sales channels.
Sales in the construction market also benefited from increased sales of rental equipment and industrial sales benefited from increased HVAC demand. Sales increased $3.8 million in the fire suppression market due to increased international sales.
In addition, sales increased $2.0 million in the municipal market, $1.4 million in the OEM market, $1.0 million in the petroleum market, and $0.6 million in the repair market.
Gross profit was $64.5 million for the third quarter of 2026, resulting in gross margin of 33.4%, compared to gross profit of $50.4 million and gross margin of 29.2% for the same period in 2025.
Gross profit for the third quarter of 2025 included $2.7 million of one-time facility optimization costs.
The 420 basis-point increase in gross margin was driven by a 190 basis-point improvement in labor and overhead expense (130 basis points driven by leverage on increased sales and 60 basis points driven by favorable medical expenses), a 160 basis-point improvement from 2025 facility optimization costs that did not recur, and a 70 basis-point reduction in LIFO expense.
Selling, general and administrative (“SG&A”) expenses were $27.5 million and improved to 14.3% of net sales for the third quarter of 2026 compared to $25.9 million and 15.0% of net sales for the same period in 2025.
The decrease in SG&A expense as a percent of net sales was driven by improved leverage on SG&A expenses from increased sales.
Operating income was $33.9 million for the third quarter of 2026, resulting in an operating margin of 17.5%, compared to operating income of $21.5 million and an operating margin of 12.4% for the same period in 2025.
Operating income for the third quarter of 2025 included $3.0 million of one-time facility optimization costs. The 510 basis-point increase in operating margin was driven by a 420 basis-point improvement in gross margin as well as a 90 basis point improvement in leverage on SG&A and amortization.
Interest expense was $4.3 million for the third quarter of 2026 compared to $5.8 million for the same period in 2025. The decrease in interest expense was due primarily to a decrease in outstanding debt.
Net income was $22.7 million, or $0.86 per share, for the third quarter of 2026 compared to net income of $11.3 million, or $0.43 per share, in the third quarter of 2025. Adjusted earnings per share for the third quarter of 2026 and 2025 were $0.86 and $0.52, respectively.
Adjusted EBITDA was $41.8 million and 21.6% of sales for the third quarter of 2026 compared to $32.3 million and 18.7% of sales for the third quarter of 2025.
Year-to-date 2026 highlights
Net sales of $555.9 million increased 7.8%, or $40.1 million, compared to the first nine months of 2025.
Net income of $60.0 million, or $2.27 per share, compared to net income of $39.3 million, or $1.49 per share, for the first nine months of 2025.
o Adjusted earnings per share1 for the first nine months of 2026 and 2025 were $2.27 and $1.58, respectively.
Adjusted EBITDA of $115.5 million, which was 20.8% of sales, an increase of $18.3 million, or 18.8%, over the first nine months of 2025.
Total debt decreased $58.0 million through the first nine months of 2026.
Net sales for the first nine months of 2026 were $555.9 million compared to net sales of $515.8 million for the first nine months of 2025, an increase of 7.8%, or $40.1 million.
Sales increased in the majority of our markets including a sales increase of $14.7 million in the construction market due to increased demand in mining and sales of rental equipment, $13.3 million in the agriculture market due to broad-based improvement across Fill-Rite’s sales channels, $8.6 million in the industrial market due to increased domestic investment, $4.0 million in the OEM market, $3.9 million in the municipal market, and $0.2 million in the petroleum market.
Offsetting these increases were a decrease of $3.8 million in the fire suppression market and a decrease of $0.8 million in the repair market.
Gross profit was $182.5 million for the first nine months of 2026, resulting in gross margin of 32.8%, compared to gross profit of $156.8 million and gross margin of 30.4% for the same period in 2025.
Gross profit for the first nine months of 2025 included $2.7 million of one-time facility optimization costs.
The 240 basis-point increase in gross margin included a 100 basis-point improvement in margin on material (30 basis points of which was attributable to a decrease in LIFO expense), a 90 basis-point improvement in leverage on labor and overhead expense resulting from increased sales, and a 50 basis-point improvement from 2025 facility optimization costs that did not recur.
SG&A expenses were $81.5 million and improved to 14.7% of net sales for the first nine months of 2026 compared to $77.0 million and 14.9% of net sales for the same period in 2025.
SG&A expenses increased due to increased incentive-based payroll expenses, higher advertising expenses, and increased freight out costs driven by increased sales. The decrease in SG&A expense as a percent of net sales was driven by improved leverage on SG&A expenses from increased sales.
Operating income was $91.8 million for the first nine months of 2026, resulting in an operating margin of 16.5%, compared to operating income of $70.5 million and an operating margin of 13.7% for the same period in 2025.
Operating income for the first nine months of 2025 included $3.0 million of one-time facility optimization costs. The 280 basis-point increase in operating margin was driven by a 240 basis-point improvement in gross margin as well as a 40 basis point improvement in leverage on SG&A and amortization.
Interest expense was $13.9 million for the first nine months of 2026 compared to $18.0 million for the same period in 2025.
The decrease in interest expense was primarily due to a decrease in outstanding debt.
Net income was $60.0 million, or $2.27 per share, for the first nine months of 2026 compared to net income of $39.3 million, or $1.49 per share, for the first nine months of 2025.
Adjusted earnings per share for the first nine months of 2026 and 2025 were $2.27 per share and $1.58 per share, respectively.
Adjusted EBITDA was $115.5 million and 20.8% of net sales for the first nine months of 2026 compared to $97.3 million and 18.9% of net sales for the first nine months of 2025.
Incoming orders for the first nine months of 2026 were $562.2 million, an increase of 2.2%, or $12.0 million, compared to the same period in 2025. The Company’s backlog of orders was $236.8 million at Sept. 30, 2026 compared to $234.2 million at Sept. 30, 2025 and $244.0 million at Dec. 31, 2025.
Net cash provided by operating activities for the first nine months of 2026 was $114.9 million compared to $91.2 million for the same period in 2025. The increase in cash provided by operating activities in the first nine months of 2026 compared to the same period last year was primarily due to increased net income.
Capital expenditures for the first nine months of 2026 were $14.7 million and consisted primarily of machinery and equipment. Capital expenditures for the full-year 2026 are presently planned to be approximately $22.0 to $24.0 million.
Total debt decreased $58.0 million during the first nine months of 2026.