Executive Summary

Q4 2024 printed modest top-line growth with net sales of $162.7M (+1.3% YoY) and EPS of $0.42 (+24% YoY), but margins compressed vs last year on higher healthcare-driven labor/overhead; orders accelerated with incoming orders up 15.8% YoY, and backlog ended the year at $206.0M .
Results were roughly in line on revenue and missed on EPS versus external consensus: EPS $0.42 vs $0.45 and revenue $162.7M vs $162.84M; S&P Global consensus was unavailable at time of analysis, so we reference MarketBeat/Yahoo for context .
Mix was favorable in municipal, repair and agriculture, offset by normalization in fire suppression and softer petroleum, construction, industrial and OEM; gross margin fell 150 bps YoY (30.2% vs 31.7%) on higher labor/overhead, partially offset by improved materials cost and pricing realization .
Interest expense declined sharply following the Q2 2024 refinancing and lower debt; total debt fell $43M in 2024, supporting improved leverage and interest savings into 2025, with 2025 capex planned at ~$20M and dividend increased to $0.185 in October 2024 .

What Went Well and What Went Wrong

What Went Well
- Orders momentum and backlog: Incoming orders grew 15.8% YoY in Q4; backlog ended at $206.0M, positioning the company well entering 2025 .
- End-market strength in municipal/repair/agriculture: Q4 sales rose in municipal (+$6.6M), repair (+$2.2M) and agriculture (+$2.0M), aided by U.S. infrastructure-driven flood control/wastewater demand .
- Reduced interest burden and deleveraging: Interest expense dropped to $6.7M from $10.1M YoY on Q2 refinancing and lower debt; total debt decreased $43M in 2024. CEO: “We...reduced our debt by $43 million...resulted in a significant reduction in interest expense and positions us well to further reduce our debt and interest expense going forward.” .
What Went Wrong
- Margin compression YoY: Gross margin declined 150 bps to 30.2% on a 220 bps increase in labor/overhead (higher healthcare), partly offset by a 70 bps materials improvement; operating margin fell 60 bps to 13.0% .
- Normalization in fire suppression and pockets of softness: Fire suppression sales fell $5.8M YoY as backlog/lead times normalized; petroleum (-$0.9M), construction (-$0.8M), industrial (-$0.7M) and OEM (-$0.5M) also declined .
- Slightly light vs consensus EPS: EPS of $0.42 missed external consensus of $0.45; S&P Global consensus unavailable at time of analysis .

Financial Results

Performance vs prior year and prior quarter

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($M)	160.6	168.2	162.7
Gross Margin %	31.7%	31.3%	30.2%
Operating Margin %	13.6%	14.2%	13.0%
EPS ($)	0.34	0.49	0.42
Adjusted EBITDA ($M)	29.1	32.0	29.0
Adjusted EBITDA Margin %	18.2%	19.0%	17.8%

Actual vs consensus (Q4 2024)

Metric	Consensus	Actual
EPS ($)	0.45	0.42
Revenue ($M)	162.84	162.70

Market/End-Market color (Q4 2024 YoY change)

Market	YoY Δ ($M)
Municipal	+6.6
Repair	+2.2
Agriculture	+2.0
Fire Suppression	-5.8
Petroleum	-0.9
Construction	-0.8
Industrial	-0.7
OEM	-0.5

KPIs and cash/returns

KPI	2023	2024	Notes
Backlog ($M, Dec 31)	218.1	206.0	Healthy entering 2025
Incoming Orders ($M)	617.4 approx (derived from +6.8% to 659.3) — see note	659.3	Incoming orders +6.8% YoY
Q4 Incoming Orders YoY	—	+15.8%	Acceleration
Interest Expense ($M, Q4)	10.1	6.7	Refinancing & deleveraging
Capex ($M)	20.8	14.3
2025 Capex Plan ($M)	18–20 (full-year 2024 plan)	~20 (2025 plan)
Total Debt Change ($M)	—	-43.0	2024 decrease
Dividend/Share ($)	0.18 (prior)	0.185 (Oct 2024)	299th/300th consecutive dividends (Oct/Jan)

Note: 2023 incoming orders base implied by growth comment; company discloses 2024 incoming orders and YoY growth but not the 2023 absolute figure in Q4 release .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capex	FY 2025	—	“presently planned to be approximately $20.0M”	New disclosure
Capex	FY 2024	$18–$20M (disclosed in Q3 release)	Actual 2024 capex $14.3M	Actual below plan
Dividend/Share	Q4 2024 onward	$0.18	$0.185 (declared Oct 25, 2024)	Raised
Capital Structure	Ongoing	—	Refinancing (May 31, 2024) extended maturities; deleveraging continues	Positioning improvement

No explicit revenue/EPS/tax-rate/segment guidance was provided in the Q4 materials; management described a positive outlook supported by orders/backlog and infrastructure demand .

Earnings Call Themes & Trends

(Transcript not available in our corpus; themes synthesized from company releases for Q2–Q4 2024.)

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Pricing & Gross Margin	Q2: +170 bps GM YoY on materials/pricing; Q3: +260 bps YoY GM, pricing realization aided; SG&A elevated by healthcare	GM down 150 bps YoY; higher healthcare-driven labor/overhead (+220 bps) offset by materials improvement (+70 bps) and price realization	Moderating; cost headwinds resurfaced
Interest Expense & Refinancing	Refinanced 5/31/24; expected >$7M annual savings; interest expense down vs 2023	Q4 interest fell to $6.7M (from $10.1M); debt down $43M in 2024	Improving
Orders/Backlog	Q2: orders +6.3% YTD; backlog $224.4M; Q3: orders +4.1% YTD; backlog $207.8M	Q4: incoming orders +15.8% YoY; backlog $206.0M; positive 2025 outlook	Positive momentum
End-Markets: Municipal/Repair	Q2–Q3: strength from U.S. flood control/wastewater	Continued growth in municipal (+$6.6M) and repair (+$2.2M)	Sustained tailwind (infrastructure)
Fire Suppression Normalization	Q2–Q3: lower sales on backlog/lead-time normalization	Q4: -$5.8M YoY; tough comp vs 2023 elevated levels	Normalization persists
Opex/Healthcare Costs	Q3: SG&A up on payroll/healthcare	Q4: healthcare pressure drove +220 bps labor/overhead burden, weighing GM	Cost headwind
Capex & Investment	Q3: 2024 capex plan $18–$20M; focus on machinery/equipment	2024 actual capex $14.3M; 2025 plan ~ $20M	Steady reinvestment
Capital Returns	Dividend track record emphasized	Raised to $0.185; 300th consecutive dividend in Jan 2025	Consistent

Management Commentary

“We are pleased that we achieved an improvement in gross margin and operating income in 2024, as well as a 28% increase in adjusted earnings per share for the year. We also reduced our debt by $43 million...resulted in a significant reduction in interest expense and positions us well to further reduce our debt and interest expense going forward.” — Scott A. King, President & CEO .
“As we begin 2025 our outlook remains positive...we continued to see strong incoming orders during the year and ended the year with healthy backlog...we remain well positioned to continue to benefit from infrastructure spending and the strong demand for flood control and storm water management.” — Scott A. King .

Q&A Highlights

A Q4 2024 conference call was scheduled for Feb 7, 2025 at 12:30 PM ET, but a transcript was not available in our source set at time of analysis; we will update this section if/when a transcript is published .

Estimates Context

S&P Global (Capital IQ) consensus was unavailable due to access limits at time of analysis. For directional context, external sources indicated EPS consensus of $0.45 vs actual $0.42 and revenue consensus of $162.84M vs actual $162.70M; we therefore view Q4 as a slight EPS miss with revenue roughly in line. We will refresh with S&P Global data when accessible .

Key Takeaways for Investors

Orders re-accelerated into year-end and backlog remains healthy, underpinning 2025 revenue visibility despite mixed end-market trends; municipal/repair remain structural beneficiaries of U.S. infrastructure spend .
Interest expense tailwind and deleveraging are material to 2025 EPS; management cut debt $43M in 2024 and post-refi interest run-rate improved meaningfully .
Cost control remains in focus: healthcare-driven labor/overhead pressure offset some materials/pricing benefits; execution on productivity and pricing discipline will be key to sustaining margin expansion .
Fire suppression normalization continues to be a headwind vs 2023’s elevated backlog-driven comp; watch for orders inflection to restore growth in that category .
Capital allocation is balanced: steady capex (~$20M plan for 2025) to support operations, plus a growing dividend (raised to $0.185) signaling confidence in cash generation .
Near-term trading setup: Slight EPS miss vs external consensus may cap immediate upside, but strong orders and improving interest burden could support estimate stability or upward revisions if margin pressures ease in 1H25 .

Sources: Q4 press release and 8-K (Feb 7, 2025), Q3 and Q2 releases/8-Ks for trend context, dividend releases (Oct 25, 2024; Jan 27, 2025), and external consensus references where S&P Global was unavailable .

GORMAN RUPP CO (GRC)·Q4 2024 Earnings Summary