The Gorman-Rupp Company (GRC): BCG Matrix [Dec-2025 Updated]

You're looking at The Gorman-Rupp Company's 2025 portfolio, and honestly, it's a classic split: the reliable cash engines are funding the big bets. We see clear Stars like the 17.1% growth in Data Center pumps fueling the machine, while mature lines helped slash $45 million in debt this year. But, you need to see where the capital is draining-like the Construction pumps down 11.0%-and which expensive Question Marks, like the $525 million acquisition, need immediate focus to avoid becoming Dogs. Dive in to see the full breakdown of where The Gorman-Rupp Company must invest, hold, or divest right now.

Background of The Gorman-Rupp Company (GRC)

You're looking at The Gorman-Rupp Company (GRC), a firm with deep roots in American manufacturing, specifically in the pump industry. The Gorman-Rupp Company was established way back in 1933 by two engineers, J.C. Gorman and H.E. Rupp, right in the middle of the Great Depression in Mansfield, Ohio. They started with a modest investment, pooling their resources to begin manufacturing pumps. The company's headquarters remain in Mansfield, Ohio, today.

Their initial success hinged on innovation; they launched what they called the first simplified self-priming centrifugal pump, a design that had no valves or orifices, which really set them apart early on. This focus on engineering helped them secure contracts with the United States military during the Second World War, which significantly boosted their manufacturing capabilities and sales. Later, in the early 1950s, they formed Gorman-Rupp Industries (GRI) to focus on smaller pumps for the appliance and OEM markets, showing an early drive to diversify beyond their core industrial offerings.

Today, The Gorman-Rupp Company, traded on the NYSE under the ticker GRC, is a major player, having a market cap exceeding $3.5 billion as of 2024. They manufacture pumps for a wide range of uses, including municipal, water, wastewater, industrial, construction, and fire markets. To give you a sense of scale as of late 2025, their third-quarter net sales, ending September 30, 2025, were $172.8 million, with net income for that quarter coming in at $11.3 million. Furthermore, the company maintained a solid order backlog of $234.2 million at the end of Q3 2025, positioning them well for the near term.

The Gorman-Rupp Company (GRC) - BCG Matrix: Stars

You're looking at the business units within The Gorman-Rupp Company (GRC) that are currently dominating high-growth arenas. These are the Stars-the segments where GRC has a strong foothold and the market itself is expanding rapidly, demanding significant cash investment to keep pace.

The overall picture for GRC as of the third quarter of 2025 shows strong order momentum. Incoming orders for the quarter ending September 30, 2025, hit $184.5 million, a 19.2% increase compared to the third quarter last year. This robust order book translates to a backlog of $234.2 million at the end of Q3 2025, up from $207.8 million at the end of Q3 2024, suggesting these high-growth areas are translating into future revenue visibility.

Here's a look at the key segments fitting the Star profile, based on recent performance and market dynamics.

The Municipal Water/Wastewater Pumps segment is clearly benefiting from macro tailwinds. The global market for these pumps is calculated at $19.53 billion in 2025, projected to grow at a 7.25% CAGR through 2034. GRC saw its municipal sales contribute a $2.1 million lift in Q3 2025, directly tied to infrastructure investment. In the U.S. specifically, the municipal pump market is anticipated to grow at a 4.9% CAGR between 2025 and 2034. This area is a leader for GRC, but it requires continued investment to capture the full benefit of government spending cycles.

For Industrial Pumps serving Data Centers, the growth is even more pronounced in the near term. The industrial market saw a $5.3 million sales increase in Q3 2025, which management noted was primarily due to data center demand. The broader data center market is expanding at a baseline 15% CAGR through 2027, with potential to hit 20%. GRC is redirecting operational focus, transitioning facilities to support growth markets like data center HVAC, which shows you where the capital support is being directed.

The Fire Suppression Systems business also shows positive momentum, adding $0.4 million to Q3 2025 sales. While the absolute dollar increase is smaller than the other two, the underlying market is growing globally at a 5.4% CAGR through 2035. Industrial applications are a key driver here, projected to represent 49% of fire suppression system demand in 2025. You need to keep pouring resources into this area to defend share against competitors.

These Stars are the engine for future Cash Cows, but they currently consume cash to maintain their market leadership. Here are the key financial metrics reflecting this investment phase:

• Net sales for Q3 2025 were $172.8 million, a 2.8% increase year-over-year.
• Year-to-Date Net Sales (9M 2025) reached $515.8 million, up 3.8%.
• Gross margin for Q3 2025 was 29.2%, down from 31.3% in Q3 2024, partly due to costs associated with facility optimization to support these growth areas.
• Operating income for Q3 2025 was $21.5 million, representing an operating margin of 12.4%.

The Gorman-Rupp Company (GRC) - BCG Matrix: Cash Cows

The Gorman-Rupp Company (GRC) sustains its operations and funds growth initiatives through highly established product lines that dominate mature segments, fitting the Cash Cow profile perfectly. These units generate significant cash flow relative to the capital required to maintain them.

Core Self-Priming Centrifugal Pumps represent a foundational element of this strategy. The Gorman-Rupp self-priming pumps are cited as the world's leading choice for waste handling applications across various industries, including steel and paper mills, mining, and sewage handling. This market leadership in a mature segment implies a high relative market share and the ability to generate consistent, high-margin revenue with relatively low promotional expenditure.

The financial performance through the first nine months of 2025 clearly demonstrates the cash-generating power of these established businesses. The company reported total debt reduction of $45.0 million through the first nine months of 2025, a direct result of strong cash flow generation from its core operations. This debt paydown is a classic action for a Cash Cow unit-milking the existing business to improve the balance sheet.

The overall financial performance for the nine-month period ending September 30, 2025, shows net sales of $515.82 million and net income of $39.27 million. Even looking at the third quarter alone, net sales were $172.83 million, with a gross margin of 29.2%, illustrating the underlying profitability of the mature product base, despite one-time optimization costs recognized in the quarter.

Repair and Aftermarket Parts form a crucial, high-margin component of the Cash Cow portfolio. This stream benefits from the large installed base of Gorman-Rupp pumps globally, ensuring recurring revenue that requires minimal new product development investment. While Q3 2025 saw some market softness, the recurring nature of service and parts revenue provides a stable floor for cash generation.

These long-standing product lines are the engine that funds the entire enterprise. The cash generated here is essential for covering corporate overhead and supporting riskier ventures, such as Question Marks. The company's focus on efficiency within these units, evidenced by the expected annualized savings between $2.0 and $2.5 million from facility optimization, is designed to further enhance the net cash flow extracted from these stable assets.

The strength of the Cash Cow segment is also reflected in the company's forward visibility, as the order backlog stood at $234.2 million at the end of Q3 2025. This backlog supports the near-term expectation that these cash flows will remain robust.

Key financial metrics illustrating the Cash Cow performance through the first nine months of 2025:

The strategic deployment of the cash generated by these market leaders includes:

• Debt reduction of $45.0 million through the first nine months of 2025.
• Funding of corporate administrative costs.
• Supporting infrastructure investments to improve efficiency.
• Maintaining dividend payments, such as the recent declaration to $0.19 per share payable in December 2025.

The Cash Cow segment's role is to provide the necessary liquidity for The Gorman-Rupp Company to operate effectively and pursue higher-growth, higher-risk opportunities. It is the bedrock of financial stability.

The Gorman-Rupp Company (GRC) - BCG Matrix: Dogs

When you look at The Gorman-Rupp Company's portfolio, the 'Dogs' quadrant represents those areas where market growth is slow and the company's relative market share is low. These units tie up capital without offering significant returns, making tough decisions about resource allocation necessary.

Agriculture Market Pumps

The agriculture segment clearly shows Dog characteristics based on recent performance. Sales in the second quarter ended June 30, 2025, saw a decline of $1.2 million, which the company directly attributed to significant drops in farm income. This trend of underperformance continued into the third quarter, with sales in the agriculture market decreasing by another $0.2 million compared to the prior year period. You see a pattern here: low market growth environment translating directly into negative sales movement for The Gorman-Rupp Company in this area.

Construction/Dewatering Pumps

The Construction market, which includes dewatering applications, has also shown weakness, particularly in the third quarter ended September 30, 2025. Sales for this segment decreased by $4.6 million in Q3 2025, which management linked to a general slowdown in construction activity, including sales into the rental market. This follows a $2.7 million sales decrease in the first quarter of 2025 due to the same construction slowdown. It's worth noting that Q2 2025 saw a slight uptick of $0.1 million in construction market sales, but the broader trend points toward a low-growth, low-share position for this product group.

Here's a quick look at how these specific market segments performed in terms of sales change year-over-year for the first three quarters of 2025:

Older, Less Efficient Product Lines from the National Pump Company (NPC) Footprint Optimization

The strategic move to optimize the National Pump Company (NPC) footprint is a classic action taken with Dog units-minimizing cash consumption. During the third quarter of 2025, The Gorman-Rupp Company reduced the number of NPC operating facilities from six to three. This restructuring involved recognizing $3.0 million in one-time facility optimization costs, which included inventory rationalization and severance. The goal is clear: to lower the fixed operating costs, with management expecting annualized savings between $2.0 and $2.5 million in payroll and facility costs going forward. This action signals a move to stop the bleeding from older, less efficient operations tied to the NPC footprint.

International Sales (Non-Core Regions)

While The Gorman-Rupp Company generates the majority of its revenue from the United States, the international component represents a smaller, less dominant share. The trailing twelve-month revenue as of September 30, 2025, was reported at $679M. Although the specific Q3 2025 international share figures of 23% from 26% aren't directly confirmed in the latest reports, the context of the NPC optimization and the focus on domestic growth markets like municipal and data center industrial applications suggests that non-core international regions are candidates for minimization or divestiture if they do not show a path to higher market share.

You should review the capital allocation for these areas:

• Agriculture market sales declined in both Q2 2025 ($1.2 million) and Q3 2025 ($0.2 million).
• Construction market sales saw a significant Q3 2025 drop of $4.6 million.
• NPC optimization incurred $3.0 million in one-time costs to achieve projected annual savings of up to $2.5 million.

Finance: draft 13-week cash view by Friday.

The Gorman-Rupp Company (GRC) - BCG Matrix: Question Marks

You're looking at the parts of The Gorman-Rupp Company (GRC) that are in high-growth areas but haven't captured significant market share yet. These are the Question Marks that demand cash now for a shot at becoming future Stars. Honestly, these units are burning capital, but the market potential is too big to ignore.

Fill-Rite/Sotera Liquid Transfer Pumps represents a significant investment, having been acquired for \$525 million, with a net transaction value of approximately \$445 million after expected tax benefits. While these brands hold leadership in attractive niche pump markets, the integration and scaling into new segments require heavy capital commitment to move them out of this quadrant quickly. For context, The Gorman-Rupp Company reported net sales of \$179.0 million in the second quarter of 2025, showing the scale of the overall business that needs to fund this growth.

The HVAC Market Pumps segment fits the Question Mark profile because, while the North America HVAC pump market saw significant value in 2024 and is expected to gain steady traction during 2025-2034, The Gorman-Rupp Company needs substantial capital to expand its current low market share within this mature yet evolving space. The strategy here is clear: invest to capture share before the growth slows down.

For New Product Development (NPD) in Digital/IoT Pump Monitoring, the market growth prospects are massive. The global smart IoT pumps market is projected to be valued at USD 1.7 billion in 2025 and is expected to grow at a compound annual growth rate (CAGR) of 12.2% through 2035. The Gorman-Rupp Company is a player, but its relative share in this emerging technology space is low, meaning it must invest heavily to keep pace with leaders who are developing AI and IoT integration.

These growth-focused areas are the primary reason for significant capital allocation. The company has planned capital expenditures for the full year 2025 at approximately \$20.0 million. This expenditure is necessary to support the high-growth potential of these segments, even as the company works to strengthen its balance sheet, having reduced total debt by \$30.0 million in the first six months of 2025.

Here's a quick look at the financial environment these Question Marks operate within, based on recent performance:

The core strategic challenge for The Gorman-Rupp Company is deciding which of these Question Marks warrant heavy investment to gain market share quickly, and which should be divested before they drain too much cash. You need to decide where to place your bets.

• Invest heavily to achieve rapid market share gains in IoT.
• Scale Fill-Rite/Sotera integration to realize full value from the \$525 million investment.
• Target specific, high-return niches within the growing HVAC pump sector.
• Avoid letting these units slip into the Dog quadrant due to slow adoption.

To be fair, the company is actively managing its debt, reducing it by \$30.0 million in the first half of 2025, which frees up capacity to fund these high-potential, but currently low-return, ventures. Finance: draft the 13-week cash view by Friday, specifically modeling the cash burn rate for the IoT NPD team.