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0.80x Total Debt / Equity (Moderate leverage)

Gorman-Rupp carried ~$770M debt post-2022 Singer acquisition; 20bp rate rise adds ~$1.5M annual interest expense, modest but meaningful given thin margins

Medium intensity; US-China trade tariffs on metals and components disrupt supply chains.

Cast iron and steel sourcing concentrated in North American mills; electronic components (sensors, controls) dependent on Asia-Pacific, particularly Taiwan/China semiconductor supply

International revenue ~25% of total; primary exposure in Euro-zone, Middle East, and Latin America (BRL/MXN volatility); limited natural hedging increases translation risk

Euro depreciation vs USD most material; Middle East mostly USD-pegged; Latin American currencies (BRL, MXN) pose highest devaluation risk on ~5-8% of total revenue

Medium intensity; commodities: Steel, Aluminum, Copper, Crude Oil (fuel), Rare Earth Elements, Plastics/Resins; geopolitical: US-China trade tariffs on metals and components disrupt supply chains.

No single vendor exceeds 30% of input costs; steel/castings sourced from multiple domestic suppliers; some component concentration but substitutable within 60-90 days

Traditional industrial manufacturer; minimal cloud infrastructure dependency; on-premises ERP and manufacturing systems dominate; AWS/Azure termination would be operationally inconvenient but not existential

Aftermarket parts and service represent secondary revenue stream; cloud termination would disrupt e-commerce parts ordering but core manufacturing unaffected

Minimal API coupling risk; Gorman-Rupp uses standard industrial ERP (likely SAP/Oracle); no proprietary external API dependencies critical to revenue generation

Near-zero Howey Test risk; revenue derived from manufacturing and selling physical pump equipment; no investment contract, profit-sharing, or token-based revenue model

Medium

Low GDPR/CCPA exposure; B2B industrial manufacturer with limited consumer PII; customer data is primarily procurement/engineering contacts, not sensitive personal data

Low antitrust risk; holds ~15-20% U.S. pump market share in niches; faces competition from Xylem, Grundfos, KSB; no dominant market position triggering regulatory scrutiny

Medium burden; regimes: FAA, DOT, OSHA, EPA, ITAR, FTC; Export controls and defense procurement rules create contract concentration risk.

~70-75% transactional (capital equipment sales); ~25-30% recurring via aftermarket parts, service contracts, and municipal/infrastructure replacement cycles

Primary: capital equipment unit sales; Secondary: high-margin aftermarket parts (est. 30-35% gross margin premium over OEM equipment sales)

Cost-plus pricing with project-bid model; inflation pass-through lagged 6-12 months on backlog; Singer acquisition adds service contract pricing layer improving revenue quality

Moderate-high; engineered-to-spec pumps for municipal water/wastewater create switching costs; 6-8% price increases implemented post-2022 with minimal volume loss

30.6% Gross Margin (Moderate (20-40%))

No free-rider problem; physical product company; aftermarket parts loyalty high (~60-70% return rate) due to proprietary specifications and municipal procurement inertia

Revenue growth is headcount-linear to sublinear; manufacturing requires proportional labor for volume increases but aftermarket/service scales better; automation investment modest

Doubling revenue requires ~70-80% headcount increase in manufacturing; aftermarket segment scales at ~40-50% headcount ratio; capital expenditure for capacity is the primary growth constraint

Not applicable; Gorman-Rupp operates direct manufacturing and distributor model, not a franchise network

At 10x scale, distributor channel economics compress; direct municipal bidding costs rise; estimated CAC/LTV ratio remains favorable given 20-30 year infrastructure asset lifecycles

Minimal network effects; installed base creates parts/service lock-in (indirect effect) but no demand-side network effects; durability relies on switching costs not network density

8.0% Return on Assets (Excellent)

Tier 2 recession-resistant; ~60% revenue tied to municipal water/wastewater (non-discretionary infrastructure); industrial/petroleum segments (40%) are cyclically sensitive

Municipal water and wastewater utilities (~55-60% revenue); highly fragmented customer base across thousands of U.S. municipalities reducing concentration risk

Industrial/petroleum/construction (~40-45% revenue); oil & gas sector most cyclically volatile; no single industrial customer estimated above 5% of total revenue

["11-0000 Management Occupations", "13-0000 Business and Financial Operations Occupations", "15-0000 Computer and Mathematical Occupations", "17-0000 Architecture and Engineering Occupations", "23-0000 Legal Occupations", "33-0000 Protective Service Occupations", "37-0000 Building and Grounds Cleaning and Maintenance Occupations", "41-0000 Sales and Related Occupations", "43-0000 Office and Administrative Support Occupations", "47-0000 Construction and Extraction Occupations", "49-0000 Installation, Maintenance, and Repair Occupations", "51-0000 Production Occupations", "53-0000 Transportation and Material Moving Occupations"]

0.3 (HIL — ~30% of characteristic roles agent-automatable)

1.9% CapEx / Revenue (Low-CapEx Asset-Light)

0000042682

GRC