Document 2jw4bz6g4ZdaVxmeQzOXL12q7

SECURITIES AND EXCHANGE COMMISSION Washington. D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,1989 Commission file number 0-684 GOULDS PUMPS, INCORPORATED (Exact name ol registrant as specified in its charter) __________ Delaware __________ (State or other jurisdiction of incorporation or organization) 240 Fall Street. Seneca Falls. NY 13148 (Address of principal executive o(Tices) (Zip Code) _________ 15-0321120 (LR-S. Employer Identification No.) (315) 568-2811 Registrant's telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: None _________________ Title of each class __ Name of each exchange on which registered Securities registered pursuant to Section 12(g) of the Act: 9 7/8% Convertible Common Stock. $1 Par Value Per Share Subordinated Debentures due July 1,2006 (Title of Class) (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Ex change Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. EH Yes D No As of February 28, 1990, 20,526,572 common shares were outstanding, and the aggregate market value of the common shares of Goulds Pumps, Inc. held by non-affiliates was approximately S347 million. DOCUMENTS INCORPORATED BY REFERENCE Annual Report to Shareholders for fiscal year ended December 31.1989 (1989 Annual Report). With the exception of those portions which are incorporated by reference into Parts I and II of this Form 10-K Annual Report, the 1989 Annual Report is not deemed to be fil as a part of this report. Proxy Statement for Annual Meeting of Shareholders to be held on May 2,1990 (Proxy Statement). See Part IQ of this Form 10-K Annual Report for portions incorporated by reference. Index to exhibits filed appears on pages 21 and 22. GOULDS PUMPS, INCORPORATED Table of Contents Item 1. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 8. Item 9. Item 10. Item 11. Item 12. Item 13. _____________________ PART I_______ Business.................................................. ........................................... Executive Officers..................................................................... Properties........................................................................................... Legal Proceedings......................................................................... Submission of Matters to a Vote of Security Holders..................................................................... PART II Market for the Registrant's Common Equity Securities and Related StockholderMatters... Selected Financial Data.......................................................... Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................................................... Financial Statements and Supplementary Data.... Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............... PART III Directors and Executive Officers of the Registrant.......................................................................... Executive Compensation.................... Security Ownership of Certain Beneficial Owners and Management......................................................... Certain Relationships and Related Transactions. Page 3-14 15-16 17 17 17 18 18 18 19 19 20 20 20 20 Item 14. PART IV______________________________________________ Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................................... 21-39 Signatures......................................................................................... 40-41 Page 2 of 41 PART I ITEM 1.BUS. 'ESS (A) Gener Development of Business The Company started business in 1844 and was incorporated 20 years later in 1864 under the laws of New York State as Downs & Co. Manufacturing Company. In 1869, the Company's name was changed to The Goulds Manufacturing Company and in 1926 the name was changed to Goulds Pumps, Incorporated. Effective December 31, 1984, the Company was reincorporated under the laws of the State of Delaware by virtue of a merger transaction. Goulds Pumps, Incorporated designs, manufactures and services pumps, motors and accessories for industrial, agricultural, commercial and consumer markets. Industrial markets account for approximately 64 percent of the Company's sales. These include: chemical, petrochemical, refining, pulp and paper, utilities, mining and municipal, including waste water treatment systems. The remaining sales, representing approximately 36 percent of the Company's business, include pumps, motors and accessories for home water and sewage systems, agricultural irrigation and commercial uses. Significant developments over the past five years have been: 1985 Acquisition of Lowara S.p.A. in Vicenza, Italy. Consolidation of facilities in Texas and California to form a single division. Closing of operations in Radisson, New York through streamlining efforts within the Slurry Pump Division. Introduction of ANSI-Plv.j enhancements to improve existing ANSI pumps in industrial use. Performed a foundry utilization program to improve efficiency of the Company's existing facilities. 1986 Restructuring of operating divisions into major business groups to improve efficiency in target markets. Industrial Products Group, Water Technologies Group and Pump Service ("Pro Shops"). Establishment of joint venture with Nanjing Deep Well Pump Works of Nanjing, China, to produce an agricultural vertical turbine pump. Discontinued operations of the Company's subsidiary in Brazil. Page 3 of 41 1987 Entered into the home water treatment business through the investment in the Raytec Watergroup Company, L.P. ("Raytec"). Expanded business for turnkey systems through the operations of Goulds Pumps Worldwide, Inc. 1988 The Pro Shops were integrated with the Industrial Products Group, providing total customer service. Completed 1.9 million share common stock offering generating proceeds of $34.3 million. Restructured short-term credit agreements establishing a $35 million Revolving Credit Agreement with three domestic banks. In December 1988, the Board of Directors approved a shareholders' rights plan designed to ensure that all of the Company's shareholders receive fair and equal treatment in the event of any proposal to acquire control of the Company. Goulds Pumps made a commitment to the Total Quality Process. The Company began Total Quality Awareness training and installed the first stages of C.A.T.S. (Competitive Advantage Through Simplification), Goulds first Total Quality project. Introduced the revolutionary Super Stainless Technology pump to America. This pump was created at our Lowara subsidiary in Vicenza, Italy, and is built by only four operators using unique equipment to form, stamp and weld stainless steel sheet metal. 1989 In early 1990, the Company announced its intention to dispose of its investment in the Raytec Watergroup Company, L.P. ("Raytec"). A formal plan of disposal was approved by the Board of Directors. The write-down of the Company's investment in Raytec was accounted for as a discontinued operation and, accordingly, its operating results were reported in this manner in the Company's 1989 Annual Report to Shareholders, incorporated herein by reference as Exhibit 13 of this Form 10-K Annual Report. The net loss from discontinued operations for the twelve months ended December 31, 1989, was $30.1 million, a net loss per share of $1.47. On March 23, 1990, Raytec announced the completion of the sale of substantially all of its assets and various liabilities to Quad-C, Inc. acting on behalf of its affiliated limited partnership. Page 4 of 41 Recognized a gain of $2.6 million on the transfer of the net assets of the Gaso Pump Division to WPV Holdings, Inc. in exchange for $12 million of 8% cumulative preferred stock of WPV, redeemable in 1996. This gain had a related tax expense of $1.9 million because, in accordance with generally accepted accounting principles, deferred taxes had not been provided related to certain original acquisition items. Negotiated a two year $10 million term loan bearing interest of 8.7% which is due in full in July, 1991. Proceeds from the borrowing were used to pay down existing debt which had a higher interest rate. In January, 1989, the Company obtained $3.4 million of Industrial Development Revenue Bond financing to purchase a facility in Auburn, New York and the manufacturing equipment to be installed therein. In December, 1989, the Company obtained $5 million of Industrial Development Revenue Bond financing to be used to finance the expansion, renovation and equipping of the Slurry Pumps Division facility in Ashland, Pennsylvania. Opened new IPG Customer Service Center in Seneca Falls, New York. Its mission is to establish and maintain undisputed customer service leadership as evaluated by customers, to achieve a significant competitive advantage and to increase sales. (B) Financial Information About Industry/Market Segments Financial information about market segments contained in Note 9 (Major Market Segment Information) on pages 38 and 39 of the Company's 1989 Annual Report to Shareholders is incorporated herein by reference. (C) Narrative Description of Business OVERVIEW The Company designs, manufactures and services pumps for the industrial, agricultural, commercial and consumer markets. The Company's pumps are manufactured for a broad range of uses in the chemical, petrochemical, refining, pulp and paper, utilities and mining industries, home water and sewage systems, agricultural irrigation and office building and Page 5 of 41 other commercial applications. Demand for the Company's Industrial products from the chemical, pulp and paper and other coi market industries remained strong throughout 1989. He aver, demand for Water Technologies Group products was less han expected because of softness in the home water systems i asiness. This softness resulted from excessive Rainfall which limited well-drilling and the related pump installation as well as a sluggish home building industry. Due in large part to its reputation for quality products and services, the Company was able to improve or maintain its market share in key industries. This is evidenced in 1989 by the record level orders of $516.6 million and the increase in backlog of $9.0 million or 9.3 percent to $106.1 million. PRODUCTS AND MARKETS The Company manufactures an extensive line of products to supply many of the pumps required by its markets. The Company's pumps range from 3/4 inch to 77-1/2 inch diameter discharges expelling from 1 to 200,000 gallons per minute. The pumps are made in a wide variety of materials and alloys, including bronze, cast and stamped stainless steel., hard metals, high alloy, stainless, titanium and zirconium, ductile and cast iron and synthetics, depending upon the type of liquid being handled, and have drivers from 1/8 hp. to over 2000 hp. Pumps manufactured for industrial uses are designed to handle a variety of liquids that may be very corrosive, abrasive or viscous at extremely high or low temperatures. Many of these pumps are built to individual customer specifications. The Company, in 1986, reorganized its divisions into two groups in an effort to improve service to its target markets; the Industrial Products Group and the 'ater Technologies Group. The Industrial Products Group represented approximately 64% of the Company's sales and 59% of operating earnings for 1989. The types of pumps manufactured for customers served by the Industrial Products Group include end-suction, double-suction, multistage, axial flow, vertical turbine, sump and slurry pumps to meet a wide variety of needs in the industrial and municipal markets including pumps designed for API and ANSI standards. The Company manufactures pumps from nonmetallic materials for applications where metal alloys are unsatisfactory or prohibitively expensive. The Company's vertical industrial turbine pumps are used throughout Page 6 of 41 industry where space limitations or unsatisfactory suction conditions make the use of horizontal pumps impractical. The Company's slurry pumps serve the alumina and phosphate mining and industrial slurry markets. Abrasion resistant pumps are manufactured for mining, utility and steel mill applications. Submersible and deep-well turbine pumps are used for irrigation and other agricultural services. Oil Dynamics, Inc., of Tulsa, Oklahoma, is a 50% owned joint venture which manufactures and distributes a line of high-performance submersible pumps used in secondary oil recovery and provides the necessary sales and service network. A key element in the Industrial Products Group long-term planning is to focus on four key market segments: chemical, pulp and paper, mining and energy. By focusing on these core market segments and reducing efforts in segments where the potential for market leadership is not satisfactory, the Company believes it can leverage its strengths and achieve superior performance. While the Industrial Products Group has sharpened its focus on direct marketing, selling and distribution to core market segments, it has also broadened its overall market and customer coverage through a three-pronged, multi-channel sales, marketing and distribution approach. The Company has not abandoned other potential markets but, rather, has sharpened its focus in areas where it is confident of strong or improving results. The Water Technologies Group represented approximately 36% of the Company's sales and 41% of operating earnings for 1989. The Group manufactures and sells water pump systems, which include pumps (jet or submersible), motors, pressure tanks and related accessories, used to supply water for farms, single and multiple family residences, office buildings, restaurants and other commercial uses, and municipal water supply and sewage treatment facilities. Larger submersible pumps are used to supply water for commercial and municipal customers. The Company believes that it is the largest manufacturer of home water pump systems in the world as a result of the acquisition of Lowara S.p.A. ("Lowara") in 1985. In 1986, the Company entered into a joint venture with Lowara and two other major pump manufacturers to develops line of fabricated stainless steel centrifugal pumps, which are designed to replace traditional cast iron pumps for light industrial and commercial uses without a significant price increase to the user. Fabrication of components takes place at Lowara's automated facility in Vicenza, Italy. Lowara established a joint venture marketing agreement with Tsurumi Company of Japan to market the highly sophisticated Lowara fabricated stainless steel pump range. Page 7 of 41 The home water systems market presently accounts for 60% of Water Technologies Group sales. This market is cyclical, however, because it is tied to residential housing starts and the weather, and it is mature, holding at approximately l.l million units seven of the last ten years. To provide additional opportunities for growth, the Company is focusing on the sewage and effluent pump market and the commercial pump market. A new effluent pump was introduced in 1989, and the Company plans to expand this product line in the coming year. Additionally, the Company offers the commercial heating and cooling and general purpose water transfer market a differentiated, "value added" product with the SST and NPE stainless steel lines. Components for these products are manufactured at Lowara in Italy, and shipped to Goulds' facility in Auburn, New York for assembly and testing. Sales of these stainless steel products grew over 50% in 1989. Information concerning net sales, operating earnings and assets attributable to the Company's business segments and to the geographic areas in which the Company operates may be found in Note 9 of the Company's 1989 Annual Report to Shareholders, pages 38 and 39. Repair Service Operations The Company believes that the availability of reliable repairs and service support by the Company is an important factor in attracting new customers for the Company's products and maintaining a good relationship with long-term customers. The Company's Pump Repair and Overhaul (PRO) Shops play an important role in customer service by rebuilding and repairing pumps and other rotating equipment produced by any manufacturer. The Company currently operates Pro Shops in Baton Rouge, Louisiana; Houston, Texas; Fairfield, New Jersey; Chicago, Illinois; Savannah, Georgia; Los Angeles and San Francisco, California; Portland, Oregon and Benton Station, Maine. The Company intends to add Pro Shops in areas where the pump population warrants it and will broaden its scope of services to meet its customers' requirements. The Company has a repair parts service organization to assist customers in its key industrial areas of the United States. Service representatives provide emergency service and technical advice on a 24-hour basis. This same support and service package is available to worldwide customers through Pro World and through the Company's subsidiaries in Hong Kong and the Netherlands. Registered trademark of Goulds Pumps, Inc. Page 8 of 41 Distribution and Marketing The Company's industrial sales organization markets pumps for U.S. industrial users through 34 branch sales offices and approximately 90 independent sales representatives and distributors. The services of the independent representatives and distributors aic used in geographic areas where it is not economical to maintain a direct branch office and in some of the large metropolitan areas where they supplement branch personnel in servicing specialized markets. The Company employs approximately 100 sales engineers nationwide in its branch sales offices. The Company's agricultural and domestic water pumping systems are marketed in the United States through the Water Systems Division sales force. The Company employs approximately 50 water systems sales persons to call on approximately. 400 distributors throughout the country. These distributors, primarily plumbing, heating and pump specialty wholesalers, sell to and service over 20,000 dealers, such as plumbing contractors, hardware stores, and well drillers, who in turn sell, install and service the water systems. Competition The Company is one of the largest manufacturers of pumps in I the United States. There are few competitors in the industrial sector in the United States who carry a diversified product line with a broad service network comparable to that of the Company's. The Company and one other competitor control approximately 50% of the water pumping systems market in the United States. The remainder of the market share is apportioned among various other competitors. The Company competes principally on the bases of product performance, price, quality and service. The Company enjoys the reputation as a "quality" pump manufacturer with a complete repair parts service. It believes it can maintain and strengthen its present competitive position by continuing to improve its manufacturing equipment and processes, by designing and developing new and improved products, by maintaining strategically located parts distribution centers and Pro Shops and by promoting the efforts of its sales force in the world market. The pump industry is highly competitive with numerous competitors in the field. Some competitors are divisions of larger corporations, while others are companies with a limited product line. Page 9 of 41 Product Development The Company is committed to the ongoing development of new products and improvement of existing products. Product development and research activities are carried out at the Company's various manufacturing facilities. Research and development expenditures amounted to $5,400,000, $5,000,000 and $5,400,000 for the years ended December 31, 1989, 1988 and 1987, respectively. Additionally, see "Products and Markets" for a description of the Company's joint ventures for the development and marketing of fabricated stainless steel pumps. International Operations The Company has wholly-owned subsidiaries in Italy, Canada and the Philippines and a majority-owned subsidiary in Mexico. Sales by foreign affiliates were approximately $117 million, $102 million and $84 million for 1989, 1988 and 1987, respectively. The Water Systems Division markets Lowara's light industrial pumps in the U.S. The Canadian operation includes manufacturing facilities in Kitchener, Ontario for water systems products and in Cambridge, Ontario for industrial products, as well as sales offices in Montreal, Toronto and Calgary. The Philippine subsidiary manufactures residential and agricultural water systems pumps. The Mexican operation manufactures various pumps for industrial and agricultural applications. The International Sales Department markets the Company's products overseas. The sales efforts of the Company's employees are supplemented by local sales representatives. Offices to support foreign sales have been established in Fort Lauderdale, Florida; Singapore, Republic of Singapore; Athens, Greece; The Hague, Netherlands; Dammam, Saudi Arabia; London, England; Stavanger, Norway; Kowloon, Hong Kong; Lima, Peru and Seoul, South Korea. In addition, the foreign operations maintain sales personnel to market their respective products. The Company also maintains warehouses in the Hague, Netherlands and Kowloon, Hong Kong. Export sales from the United States were $51 million in 1989, $42 million in 1988 and $36 million in 1987. The Company's export sales are distributed throughout the world without concentration in any one geographic region. The Company has increased its worldwide exposure through joint ventures, marketing agreements and other cooperative efforts with several entities around the world. The Company Page 10 of 41 has a minority interest in Famoven-Goulds, C.A. in Caracas, Venezuela, which produces and markets certain industrial pumps in South America. In 1986, the Company entered into a joint venture with Nanjing Deep Well Pump Works of Nanjing, China, to produce agricultural vertical turbine pumps for sale worldwide. In addition, in 1989 Lowara s.p.A. established a joint venture marketing agreement with Tsurumi Company of Osaka, Japan, to market the Lowara fabricated stainless steel pump range. Facilities The Company operates manufacturing plants, service facilities, warehouses and sales offices in 58 domestic locations in 24 states and in 22 locations in 13 foreign countries. Substantially all manufacturing sites are owned, and most sales offices, warehouses and service facilities are leased. The Company's primary manufacturing facilities are located in Seneca Falls, New York. During the five years ended December 31, 1989, the Company invested approximately $100 million in capital improvements. These improvements include the addition of fourteen machining cells in the Company's Engineered Products Division (EPD), which permit the production and assembly of families of parts, with a significant reduction in the time formerly required. EPD has been implementing the cell concept into their machine shop to enable parts to be machined completely, without moving to another area of the machine shop. Each cell consists of two or more machines that are dedicated to a family of parts. EPD created eight manufacturing cells in 1989 and six cells in 1988, with more scheduled for 1990. Other automated systems have been introduced in the Company's other manufacturing divisions. The Company operates three foundries in the United States. Iron parts are cast chiefly at Seneca Falls, New York and Lubbock, Texas. Stainless steel and hard iron are cast at Ashland, Pennsylvania. By concentrating foundry production in this fashion, the Company has been able to improve its operating efficiency and to eliminate most outside purchases of stainless steel and iron foundry products. Page 11 of 41 The Company maintains warehouses or distribution centers in Chicago Illinois; Houston, Texas; Portland, Oregon; Nitro, West Vi- inia; Atlanta, Georgia; Memphis, Tennessee; Benton Station Maine; Tulsa, Oklahoma,- Savannah, Georgia; and Baton Rouge, iuisiana, which carry inventories of pumps and parts sold to industrial users. The Company maintains regional warehouses to keep inventories of water pump systems and/or deep-wexl turbine components readily available in the vicinities of Chicago, Illinois; Orlando, Florida; Lubbock, Texas; Phoenix, Arizona; Santa Fe Springs, Fresno and Sacramento, California; Atlanta, Georgia and Memphis, Tennessee. Management believes that the Company's facilities are adequate for its operations and that such facilities are well maintained. Raw Materials The principal raw materials essential to manufacturing pumps are nickel, iron, bronze and stainless steel. These are used more specifically in the manufacture of castings. In addition, sheets of stainless steel are used in various stamping processes. Other components such as drivers, ball bearings and mechanical seals, along with bar stock for shafts, are purchased from several suppliers. Raw materials for the Company's products are in adequate supply from a number of alternative suppliers and, at present, the Company has the ability to select and apportion among vendors based on price, quality and delivery capability. The Company purchases motors for its domestic water systems pumps primarily from Franklin Electric Company. The Company expects that it will continue to purchase motors from Franklin, but if the Company were required to establish a relationship with another supplier, its manufacturing business could be temporarily disrupted. Employee Relations The Company presently employs approximately 4,200 persons. Nearly 1,300 employees are covered under union contracts stipulating rates of pay, hours of employment and other conditions of employment. During 1989, the Company negotiated an unprecedented early settlement of its contract Page 12 of 41 with the United Steelworkers Union representing its two largest plants. Approximately 800 employees are covered under the terms of the agreement which provides for wage increases of approximately eighteen percent over the next three years. This contract will be renegotiated in 1992. A wage reopener was also successfully negotiated at the California Plant of the Vertical Procucts Division with a full negotiation scheduled late in 1990. Contract negotiations are due in 1991 at the Slurry Pump Division and the Texas Plant of the Vertical Products Division. The Company considers that its overall labor relations are good with arhv 1 abor-management committees operating at all local ...'ns. Approximately 3,200 persons are employed domes' i c-\l ]P' v='ile approximately 1,000 persons work at foreign affiliate locations. Seasonal Business The Company operates at its lowest level during the first and last quarter of each calendar year due primarily to the Water Technologies Group market decline in winter months. The Industrial Products Group of the Company is not a seasonal business. Environmental Considerations On October 13, 1988, the Company began a study of groundwater quality at an inactive company landfill site in Seneca Falls. Based on initial favorable findings, the Company has not accrued a liability at this time. Discussions with the State of New York are continuing, and the Company expects to settle this matter promptly without significant financial concern. The Company believes that it is in compliance with environmental protection requirements. Required expenditures to comply with environmental regulations have not been and are not expected to be material. Patents and Trademarks Although the Company owns several beneficial patents, none are considered to be material to its operations. The Company believes its trademark "Goulds" is of importance worldwide, since its products have been sold and used for almost 140 years. Page 13 of 41 Backlog The backlog of orders was $117.9 million at February 28, 1990, an increase of $11.8 million over December 31, 1989. Backlog is primarily in the Industrial Products Group as the Water Technologies Group maintains minimal backlog levels srnce their products are normally shipped within two weeks from receipt of a customer order. Page 14 of 41 Name S. V. Ardia* E. B. Bradshaw C. J. Connell* R. F. Landers R. C. Laude J. M. Morphy f L. L. Polcaro J. J. Scanlon EXECUTIVE OFFICERS Age Present Office and Experience 48 President and Chief Executive Officer since 1985; President and Chief Operating Officer 1984-1985; Vice President-Corporate Sales 1982-1984; Vice President-International Operations 1979-1982; General Manager of Standard Pump Division of Worthington Pump Co. 1976-1979; Director of Goulds Pumps International Sales 1974-1975- Director since 1984. 51 Vice President since 1979; Secretary since 1974; General Counsel since 1969. 60 Senior Vice President since October, 1989; Group Vice President-Industrial Products Group 1986-1989; Vice President-Finance 1984-1986; Treasurer 1972-1985; Manager of Information Systems 1969-1972; Director since 1984. 47 Vice President - Human Resources since July, 1988; Director of Human Resources 1984-1988. 56 Assistant Treasurer since 1987; Manager of Corporate Finance 1965-1987. 42 Vice President-Finance and Chief Financial Officer since 1986; Controller 1985-1986; Previously Vice-President and Controller, Computer Consoles, Inc., Rochester, NY; developer of comput r systems for telephone ar. office automation systems. 38 Treasurer since June 1987; Tax Manager 1984-1987; previously Tax Manager with Coopers and Lybrand CPA's. 55 Vice President Sales - Water Technologies Groi since September, 1988; General Sales Manager Water Systems Division 1979-1988; Assistant Sales Manager Water Systems Division 1975-197 Regional Manager/Plant Manager Water Systems Texas Division 1970-1975. Page 15 of 41 Continued Name M. C. Scheuerman w. F. Ware F. J. Zonarich Age Present Office and Experience 31 Assistant Secretary since May, 1988; Corporate Attorney since 1988; Staff Counsel 1986-1988. 47 Group Vice President - Industrial Products Group since October, 1989; previously Group Vice President and Chief Executive Officer of Garrett Automotive Group, a division cf Allied Signal, Inc. Mr. Ware was with Garrett from 1968 until ho joined Goulds Pumps. Inc. 44 Group Vice President - Water Technologies Group since December, 1989; Vice President Sales-Industrial Products Group 1986-1989; Commercial Manager Engineered Products Division 1985-1986; Director of Marketing 1982-1985. ^Indicates officers who are also directors. No family relationship exists between any of the above officers. The term of office for all officers listed above runs from one annual meeting to the next, or approximately one year. There were no arrangements or understandings between any of the above Executive Officers and any other person pursuant to which they were selected as an officer. Page 16 of 41 ITEM 2. ITEM 3. ITEM 4. PROPERTIES These facilities are specifically discussed in Item l.of this Form 10-K Annual Report. Management believes that the Company's facilities are adequate for its operations, and that such facilities are well maintained. LEGAL PROCEEDINGS The Company is not involved in any material legal proceedings. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of shareholders during the fourth quarter of 1989. Part II ITEW 5. ITEM 6. ITEM' 7 . MARKE FOR THE REGISTRANT'S COMMON EQUITY SECURITIES AND RELATED STOCKHOLDER MATTERS The Company's common stock is traded in the NASDAQ National Market System under the symbol GULD. Quarterly high and low sales prices reported by NASDAQ National Markets and related dividend information for the past two years is contained on pages 41 and 44 ;f the 1989 Annual Repor* tc Shareholders and i.s income *-a red herein bv reference. The approximate number of record holders of the Company's common stock as of February 28, 1990 was 6,417. The Company's policy is to pay cash dividends quarterly. The amount of dividends is within the discretion of the Board of Directors and depends, among other factors, on earnings, capital requirements and the operating and financial condition of the Company. There are no dividend restrictions which materially limit the Company's current ability to pay dividends. SELECTED FINANCIAL DATA Included in the 1989 Annual Report to Shareholders on pages 42 and 43 is an Eleven-Year Summary of Financial Data which is incorporated herein by reference. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion of financial condition and results of operations which appears on pages 24-27 of the Company's 1989 Annual Report to Shareholdersincluded in this Form 10-K. Annual Report, as Exhibit 13, is incorporated herein by reference. Page 18 of 41 ITEM 8. ITEM 9. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements, together with the report thereon of Deloitte & Touche dated February 15, 1990, appearing on pages 23 to 30 and page 27, respectively, of the Goulds Pumps, Incorporated 1989 Annual Report to Shareholders, are incorporated herein by reference. Supplementary data that appears in "Notes to Consolidated Financial Statements" Note 11 - "Quarterly Financial Data (unaudited)" on page 41 of the Goulds Pumps, Incorporated 1989 Annual Report to Shareholders, is incorporated herein by reference. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Page 19 of 41 Part III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Pages 1 through 4 of the Proxy Statement contain information concerning directors which is incorporated herein by reference. Information concerning executive officers is included in Part I of this Form 10-K Annual Report, following Item 1. ITEM 11. EXECUTIVE COMPENSATION Pages 4 through 9 of the Proxy Statement contain information concerning executive compensation which is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Pages 2 through 4 of the Proxy Statement contain information concerning ownership of the Company's common stock which is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Page 9 of the Proxy Statement contains information concerning transactions with directors and others which is incorporated herein by reference. Page 20 of 41 Part IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents under item (1) are incorporated by reference in this report: * Page In Annual Report (1) Independent Auditors' Report 27 Financial Statements: Consolidated Balance Sheets at December 31, 1989 and 1988 28 Consolidated Statements of Income and Shareholders' Equity, three years ended December 31, 1989 29 Consolidated Statements of Cash Flow, three years ended December 31, 1989 30 Notes to Consolidated Financial Statements 31-41 * Incorporated by reference from the indicated page(s) of the Goulds-Pumps Incorporated 1989 Annual Report to Shareholders. Page in Form 10-K (2) Independent Auditors' Report on Financial Statement Schedules 25 The following schedules are included in this Form 10-K Annual Report: I - Marketable Securities 26 II - Amounts Receivable from Related Parties and Underwriters, Promoters, and Employees other than related parties. 27 v - Property, Plant and Equipment 28 VI - Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment 29 Page 21 of 41 VIII - Valuation and Qualifying Accounts IX - Short-term Borrowings X - Supplementary Income Statement Information All other financial Statement Schedules and the statement of Changes in Shared, .df-'.' ".c'vi'-y are omittub because they are not applicable or the required information is shown in the Consolidated Financial Statements. Page in Form 10-K 30 31 32 (b) Reports on Form 8-K. No reports on Form 8-K were filed during the fourth quarter of the year ended December 31, 1989. (c) Exhibits. Exhibit Number Description of Exhibits (3) Articles of Incorporation and By-Laws: * Amendment to the Certificates oc Incorporation, incorporated by reference from Company's definitive Proxy Statement for its Annual Meeting of , Stockholders held on May 4, 1988, copies of which were filed with the Commission on April 11, 1988, wherein said amendment is identified as exhibit (B). * Amendment to the Certificate of Incorporation as filed by the Delaware Secretary of State on May 31, 1989 (Exhibit (a). Form 10-Q for the quarter ended June 30, 1989) . * Amendment to the Company's By-Laws, incorporated by reference from the Company's definitive Proxy Statement for its Annual Meeting of Stockholders held on May 4, 1988, copies of which were filed with the Commission on April 11, 1988, wherein said amendment is identified as exhibit (C). Page 22 of 41 (4) Instruments Defining the Rights of Security Holders, Including Indentures: Revolving Credit Agreement (filed as Exhibit 4(a) pages 31-32 to Form 10-K for year ended December 31, 1988 ) . Waiver and Consent filed as Exhibit 4(a) pages 33-35 to Form 10-K for year ended December 31, 1989. Indenture dated as of July 1, 1981, between the Registrant and Mellon Bank, N.A. (filed as Exhibit 4.2 of Form 8-A Registration Statement 1988 Stock Issuance dated 'uly 25, 1981). Stockholder Rights Plan (filed as Exhibit 4(B), pages 33-37 to Form 10-K for year ended December 31, 1988). (10) Material Contracts: (iii) Compensatory Plans for Officers: * Goulds Pumps, Incorporated Senior Executive Severance Agreement, effective May 12, 1983 (Exhibit 19, Form 10-Q for quarter ended June 30, 1983). * Goulds Pumps, Incorporated Investment and Stock Ownership Plan (filed on May 8, 1984, Form S-8, Registration Statement No. 2-90969). * Goulds Pumps, Incorporated Revised Incentive Stock Option Plan, effective March 19, 1987 (Form S-8 Registration Statement No. 2-78145, filed on June 25, 1982. Appendices No. 1 and No. 2 to the prospectus filed with SEC on June 8, 1983 and May 8, 1987 respect.vely). * Goulds Pumps, Incorporated Non-Qualified Stock Option Plan (Form S-8 Registration Statement No. 2-64847, filed on June 25, 1979). * Goulds Pumps, Incorporated Stock Purchase Plan for Employees (Form S-8 Registration Statement No. 2-64530, filed on May 21, 1979). * Goulds Pumps, Incorporated 1988 Stock Incentive Plan (Form S-8 Registration Statement No. 33-22902 filed on July 5, 1988) . (11) Computation of Earnings Per Share: See page 36 of this Annual Report on Form 10-K. Page 23 of 41 (13) Annual Report to Shareholders: Gelds Pumps, Incorporated 1989 Annual Report to si reholders. See page 37 of this Annual Report on Fc .i 10-K. (22) Subsidiaries of the Registrant: See page 38 of this Annual Report on Form 10-K. (24) Consents of Experts and Counsel: For Consent of Independent Auditors see page 39 of thus Annual Report on Form 10-K. Alx otnej. exhioits are omicced because they are not applicable or the required information is shown elsewhere in this Annual Report on Form 10-K. Incorporated herein by reference as indicated. Page 24 of 41 INDEPENDENT AUDITORS' REPORT Goulds Pumps, Incorporated: We have audited the consolidated balance sheets of Goulds Pumps, Incorporated and its subsidiaries as of December 31, 1989 and 1988 and the related consolidated statements of income, shareholders' equity and cash flow for each of the three years in the period ended December 31, 1989, and have issued our report thereon dated February 15, 1990; such financial statements and report are included in your 1989 Annual Report to Shareholders and are incorporated herein by reference. Our audits also comprehended the supplemental schedules of Goulds Pumps, Incorporated and its subsidiaries, listed in Item 14(a)2. In our opinion, such supplemental schedules, when considered in relation to the basic financial statements, present fairly in all material respects the information shown therein. Deloitte & Touche Rochester, New York t February 15, 1990 Page 25 of 41 Schedule I GOULOS PUMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES SCHEDULE I - MARKETABLE SECURITIES DECEMBER 31, 1989 (IN THOUSANDS) Title Principal Amount Cost Market Value Balance Sheet Value Italian Government Securities... $20,074 $20,033 $20,093 $20,008 Note: Italian Government Securities reflect the translation of Italian Lira to U. S. Dollars in accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation". Page 26 of 41 Schedule II GOULDS PUMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES FOR THE YEARS ENDED DECEMBER 31, 1989, 1988 AND 1987 (IN THOUSANDS) Name of Do tor (Note l'1 Balance at Beginning of Per \J ! Not-. L' Addi ;ons Deductions Amounts Amounts Collected .fritter, Off Balance at End of Period Current Not Current Year ended December 31, 1989 G. Barnes $ 133 W. Ware -0- Raytec (Note 3) 13,606 $ -0100 13,083 $ 70 -0-0- Year ended December 31, 1988 J. Jones $ 120 G. Barnes 30 Raytec (Note 3) 6,157 $ -0103 7,449 5 120 -0-0- $ -o-o- 26,689 $ -o-0-0- $ 63 100 -0- $ -0-o-0- $ -04 187 $ -0129 13,419 Year ended December 31, 1987 J. Jones $ K. Powers Raytec (Note 3) 120 125 -0- $ -0-0- 6,157 5 -054 -0- 5 -o-0-0- $ 120 50 -0- $ -0- 21 6.157 (1) ' Debtors are current or former employees or affiliates of the Company. (2) Loan to Mr. Barnes is a relocation term loan with no stated interest rate. Loan to Mr. Ware is a relocation term loan with no stated interest rate. Loan to Mr. Jones was a demand note with no stated interest rate. Loan to Mr. Powers is a relocation term loan with no stated interest rate and is repayable in regular monthly installments. (3) Loans to Raytec Watergroup Company, L.P. ("Raytec"; and related interest were writ off in 1989 as part of the Company's investment in Raytec. Reference Management s Discussion and Analysis of Financial Condition and Results of Operations Discontinued Operations. Page 27 of 41 Schedule V GOULDS PUMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT FOR THE YEARS ENDED DECEMBER 31, 1989, 1988 and 1987 (IN THOUSANDS) m.ASS[FICATION BALANCE AT BEGINNING GL' Y^AR ADDITIONS AT COST RETIREMENTS OTHER CHANGESADD (DEDUCT) (1) BALANCE AT END OF YEAR 1989 Land................... Buildings.... Machinery and Equipment__ TOTAL......... 5 4,767 33,778 209,355 S 24 7,900 $ 43 2,258 18,978 $21,279 $ (295) ` (2,570) (*' ... 17,551)1^ $(10,416) $ (55) 314 2,193 52,452 5 4,460 33,780 222,975 $261,215 1988 Land................... Buildings____ Machinery and Equipment... TOTAL......... $ 4,865 29,959 189,311 5224,135 $ 100 3,688 19,695 $23,483 $ -- (1,025) 5(1,025) $ (198) 131 1,374 $1,307 $ 4,767 33,778 209,355 $247,900 1S87 Land................... Buildings.... Machinery and Equipment... TOTAL......... $ 4,458 26,568 172,393 $203,419 $ 2,602 14,755 $17,357 $ (19) (74) mgs) 5(1.458) $ 426 863 3,528 $4,817 $ 4,865 29,959 189,311 $224,135 (1) Represents the following: Currency translation effect Amortization of Lowara Purchase Adjustment Includes Gaso disposition: Land Bui 1 dings Machinery and Equipment 1989 $ (488) 2,940 5 2,452 5 (295) (2,520) (6,315) 5(9,130) 1988 $(1,850) 3,157 $ 1,307 1987 $ 3,232 1,585 I 4,817 Schedule VI GOULDS PUMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEARS ENDED DECEMBER 31, 1989, and 1987 (IN THOUSANDS) CLA'.LS ITICATION BALANCE AT BEGINNING OF YEAR ADDITIONS CHARGED TO INCOME RETIREMENTS OTHER CHANGESADD (DEDUCT) (1) BALANCE AT END OF YEAR 1989 Buildings......... Machinery and Equipment.... TOTAL............ 1988 Buildings.......... Machinery and Equipment.... TOTAL............ 1987 Buildings......... Machinery and Equipment.... TOTAL............ $ 9,909 116,487 $126,396 $ 8,243 96,627 $104,870 $ 6,678 79,980 $ 86,658 $ 1,186 18,691 $19,877 $ 1,298 18,334 $19,632 $ 1,531 15,778 $17,309 $ (652)<2) $ 382 (4,558)(2) 2,389 $(5,210) $2,771 $ (515) $ (515) $ 368 2,041 $ 2,409 $ (13) (1,094) $(1,107) $ 47 1,963 $ 2,010 ' $ 10,825 133,009 $143,834 $ 9,909 116,487 $126,396 $ 8,243 96,627 $104,870 (1) Represents the following: Currency translation effect Amortization of Lowara Purchase Adjustment 1989 $ (169) 2,940 $ 2,771 1988 $ (748) 3,157 $ 2,409 (2) Includes Gaso disposition: Buildings Machinery and Equipment $ (652) (3,595) $(4,247) 1987 $ 60-' 1,40; $ 2,01: Schedule VIII GOULD? UMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES SCHcDULE VIII - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1989, 1988 AND 1987 (IN THOUSANDS) BALANCE AT r7.Grf: TVr< OF YEAR ADDITIONS XARGED T'< INCOME DEDUCTIONS (1) BALANCE AT END OF YEAR Allowance for Doubtful Accounts, Deducted from Trade Receivables: 1989.................. 1988.................. 1987.................. $2,885 $3,058 $1,973 $ 687 $ 978 $1 ,272 $ 936 $1 ,151 $ 187 $2,636 $2,885 $3,058 (1) Accounts written off, less recoveries. Schedule IX GOULDS PUMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES SCHEDULE IX - SHORT-TERM BORROWINGS FOR THE YEARS ENDED DECEMBER 31, 1989, 1988 and 1987 (IN THOUSANDS) 4/> 1O 1 CO 00 CATEGORY OF AGLaLu.h ' u SHORT-TERM BORROWINGS BALANCE AT END OF YEAR WEIGHTED AVERAGE RATE AT END OF YEAR Year 1989: Notes Due to U.S. Banks Notes Due to Foreian Sanks O; Year 1988: Notes Oue to U.S. Banks Notes Due to Foreian Banks 0) Year 1987: Notes Due to U.S. Banks Notes Oue to Foreign Banks $ 4,200 $15,825 $ 4,000 .17,497 $30,382 9.5% 14.0% 10.4% 11 6% -011.2% MAXIMUM AMOUNv OUTS:ANTING DURING THl YEAR AVERAGE AMOUNT OUTSTANDING DUR ING 7 He YEAR _________ 01 WEIGHTED AVERAGE INTEREST RATE CURING THE YEAR _________ 01 $15,500 $17,948 $ 6,452 $14,434 10.5% $14,053 $31,922 $ 5,079 $27,956 7.9% 12.5% $ 3,518 $41,831 $ 162 $35,350 7.2% 13.3% (1) Computed by dividing the total of daily outstanding principal balances by the number of days the notes were outstanding. (2) Computed by dividing the actual short-term interest expense by the average short-term debt outstanding. (3) Reflects short-term loans and bank overdrafts of Lowara S.p.A. subsidiary. Page 31 of 41 Schedule X GOULDS PUMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR THE THREE YEARS ENDED DECEMBER 31, 1989, 1988, 1987 (IN THOUSANDS) Item Maintenance and Repairs Depreciation and Amortization of intangible assets, pre-operating costs and similar deferrals Taxes, other than payroll and income taxes Royalties Advertising costs Charged to Costs and Expenses 1989 1988 1987 $16,058 $13,598 $12,448 * * * ** * * it * it * Less than 1% of total sales. t Page 32 of 41 EXHIBIT 4(A) WAIVER AND CONSENT A. Pursuant to Section 8.03 of a certain Credit Agreement dated as of November 22, 1988 (the "Agreement") among Goulds Pumps, Inc. ("Goulds"), Chase Lincoln First Bank, N.A., as Agent, and the undersigned banks ("Banks"), Goulds is required to maintain a ratio of consolidated income before income taxes plus consolidated interest expense to consolidated interest expense of not less than 2 to 1 for the immediately preceding four fiscal quarters (the "Interest Coverage Ratio"). B. Goulds has advised the Banks that Goulds failed to meet the Interest Coverage Ratio at December 31, 1989 due to certain extraordinary write-offs which Goulds has elected to account for in the fourth quarter of 1989. In particular, Goulds has elected to write off its investment in Raytec Watergroup Company, L.P. ("Raytec") and will account for Raytec as a "discontinued operation". This will result in a one-time loss on the disposal of Raytec estimated to be $35.8 million. This will also permit Goulds to segregate on its financial statements the loss from the discontinued operations of Raytec which, for the 1989 fiscal year, is estimated to be $8 million. C. Goulds has asked the Banks to waive Goulds' failure to satisfy the Interest Coverage Ratio at December 31, 1989 and to permit Goulds to exclude from the Interest Coverage Ratio calculations for future periods (a) the loss on the disposal of Page 33 of 41 Raytec estimated to be $35.8 million, and (b) the loss related to the discontinued operations of Raytec estimated to be $8 million (clauses (a) and (b) collectively referred to as the "Raytec Losses"). NOW, THEREFORE, the Banks agree as follows: 1. The Banks hereby waive any right to declare a default by reason of Goulds' failure to meet the Interest Coverage Ratio at December 31, 1989. In addition, in calculating the Interest Coverage Ratio for the fiscal quarters through and including September 30, 1990, the Banks agree to permit Goulds to exclude from consolidated income before income taxes the Raytec losses realized during the fourth quarter of 1989. 2. This Waiver affects only the calculation of the Interest Coverage Ratio for periods ending December 31, 1989, March 31, 1990, June 30, 1990 and September 30, 1990. The Banks reserve the right to declare a default under the Agreement in the event Goulds should be in default of any other term, provision or covenant in the Agreement. 3. This Waiver and Consent may be executed in one or more counterparts, each of which shall be an original but all of which together shall constitute but one and the same instrument. Dated as of the 2nd day of February, 1990. CHASE LINCOLN FIRST BANK, N.A. By: /s/ James w. Getman Title: Vice President PHILADELPHIA NATIONAL BANK By: /s/ Susan S. Callahan Title: Assistant Vice President MELLON BANK, N.A. By: fsf Frederick w. Brooke IV Title: Assistant Vice President Page 35 of 41 EXHIBIT XI GOULDS PUMPS, INCORPORATED AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE _________ (IN THOUSANDS, EXCEPT PER SHARE DATA'_____________ a. Net income (loss) - as repor ................................................................................. 1989______________ 1988______________1987 $(1,328) $23,323 $18,537 b. Decrease in interest expense .net of tax benefit) based upon issuar.c-D of all shares of co non stock under Deferred Connon Stack Agreement..................................................................................................................... $ $ $ 65 c. Restated net income (a + b)......................................................................................... -I. Actual weighted average r.^bur of shares outstanding.............................. S(1,328) 2C,446 $23,323 19,817 $18,602 18,044 . ;-. star' . actual average shares outstanding (c + d) ^............................................................................... S (.06) $ 1.18 S 1.03 f. Decrease in interest expense (net of tax benefit) based on conversion of all Convertible Subordinated Debentures into common stock............................................................................................................................ $ 1,629 $ 1,629 $ 1,481 8* Restated net income (c + f)......................................................................................... h. Increase in weighted average number of shares outstanding based on conversion of all Convertible Subordinated Debentures into common stock..................................................................................... $ 301 935 $24,952 935 $20,083 935 1. Shares exercisable under outstanding options................................................. 410 500 167 3- Proceeds assuming exercise of outstanding options..................................... Reinvestment of proceeds under "Treasury Stock Method": k. Average market price per share during each year or market price at year-end (whichever is higher)............................................ 1. Shares to be acquired (j * k).................................................................................... $ 6,448 $ 20.50 315 $ 7,750 $ 19.72 393 $ 2,366 $ 19.50 121 a. Net increase in outstanding shares relative to stock options (i - 1)............................................................................................... n. Adjusted weighted average shares outstanding (d + h + a)..................... 95 21,476 107 20,859 46 19,025 o. Earnings per share assuming conversion of all Convertible Subordinated Debentures into common stock and exercise of outstanding options (g + n)......................................................................................... $ .01 $ 1.20 1 1.06 P- Dilutive (Anti-dilutive) effect on earnings per share (e - o) S (.07) $ (.02) $ (.03 (1) Earnings per share information is based on weighted average numbe: of shares of common stock outstanding duri; each year. No effect has been given to options outstanding under the Company's Stock Option Plans or Convert. Subordinated Debentures as no material dilutive effect would result from the exercise of these items. (2) This calculation is submitted in accordance with Securities Exchange Act of 1934 Release No. 9038 although no. required by APB Opinion No. 15 since no material dilutive effect would result from the exercise of these item. Page 36 of 41 EXHIBIT 13 The following pages comprise t* Vip 1989 Annual Report > I Page 37 of 41 EXHIBIT 22 All subsidiaries of Goulds Pumps, Incorporated listed below are included in tie consolidated financial statements. State or Country Ownership Incorporated SubsidiaryPercentage or Organized Bombas Goulds de Mexico, S.A. de C.V................. C .TV T\..: pen AG. . . .......... .. ............................................ Goulds Pumps (Asia), Ltd............................................... Goulds Pumps (N.Y.), Inc............................................... Goulds Pumps Canada, Inc............................................... Goulds Pumps DISC, Inc.................................................... Goulds Pumps Delaware, Inc.......................................... Goulds Pumps Distribution B.V.................................. Goulds Pumps International, Inc. (a DISC)... Goulds Pumps World Sales, Ltd. (a FSC)............ Goulds Pumps (Phil.), Inc............................................ Goulds Pumps Trading Corp............................................ Goulds Pumps Worldwide, Inc....................................... Lowara Corp............................................................................... I Lowara Pumps PTE, Ltd...................................................... Lowara S.p.A............................................................................. Morris Pumps International, Inc. (a DISC)... Seneca Falls Country Club, Inc................................ Goulds Pumps Water Treatment Corporation.... Goulds Pumps World Sales (V.l.) Ltd.................... 80 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Mexico Switzerland Hong Kong New York Canada New York Delaware Netherlands Delaware Guam Philippines Delaware Delaware Texas Singapore Italy New York New York Delaware U.S. virgin Islands The Company also has equity investments in Oil ^namics, Inc., a 50 ) percent owned corporation incorporated in Oklahoma; Famoven-Goulds, C.A. of Qaracas, Venezuela, a 19.8 percent owned affiliate; and Nanjing Goulds Pumps Limited Liability Co., of China, a 45 percent owned joint venture. t Page 38 of 41 EXHIBIT 22 All subsidiaries of Goulds Pumps, Incorporated listed below are included in the consolidated financial statements. Subsidiary Bombas Goulds de Mexico, S.A. de C.V................. C.r>. pen AG....... ............... ............................................ Goulds Pumps (Asia), Ltd............................................... Goulds Pumps (N.Y.), Inc............................................... Goulds Pumps Canada, Inc............................................... Goulds Pumps DISC, Inc.................................................... Goulds Pumps Delaware, Inc.......................................... Goulds Pumps Distribution B.V................................... Goulds Pumps International, Inc. (a DISC)... Goulds Pumps World Sales, Ltd. (a FSC)............. Goulds Pumps (Phil.), Inc............................................ Goulds Pumps Trading Corp............................................ Goulds Pumps Worldwide, Inc....................................... Lowara Corp............................................................................... Lowara Pumps PTE, Ltd...................................................... Lowara S.p.A............................................................................. Morris Pumps International, Inc. (a DISC)... Seneca Falls Country Club, Inc................................ Goulds Pumps Water Treatment Corporation.... Goulds Pumps World Sales (V.I.) Ltd.................... Ownership Percentage State or Country Incorporated or Organized 80 no 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Mexico Switzerland Hong Kong New York Canaria New York Delaware Netherlands Delaware Guam Philippines Delaware Delaware Texas Singapore Italy New York New York Delaware U.S. Virgin Islands The Company also has equity investments in Oi' Dynamics, Inc., a 50 percent owned corporation incorporated in Ok ahoma; Famoven-Goulds, C.A. of Caracas, Venezuela, a 19.8 percent owned affiliate; and Nanjing Goulds Pumps Limited Liability Co., of China, a 45 percent owned joint venture. Page 38 of 41 EXHIBIT 24 CONSENT OF INDEPENDENT AUDITORS Goulds Pumps, Incorporated: We hereby consent to the incorporation by reference in Registration Statement No.s' 2-64847, 2-64530, 2-7.8145, 2-90969 and 33-22902 on Forms S-8 of our reports dated February 15, 1990 appearing in and incorporated by reference in this Annual Report on Form 10-K of Goulds Pumps, Incorporated and its subsidiaries for the year ended December 31, 1989. ikLddjbu Deloitte & Touche Rochester, New York March 26, 1990 Page 39 of 41 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Goulds Pumps, Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 23, 1990. GOULDS PUMPS, INCORPORATED Stephen V.. Ardia (President, Chief Executive Officer and Director) Pursuant ot the requirements of Securities Exchange Act of 1934, this report has been signed on March 13, 1989 below by the following persons on behalf of the Re^strant and in the capacities indicated. 7>o- Stephen V. Ardia (President, Chief Executive Officer and Director) John Morphy (Vice President - Finance and Chief Financial Officer) jL ClkiLJr- Coleman J. connell (Senior Vice President and Director) Peter Oddleifson (Director) (Group Vice President Industrial Products) Page 40 of 41 SIGNATURES (continued) -2 Thomas C, McDermott (Director) Listed below are those directors not mentioned on page 40 Forrest E. Behm William R. Fenoglio William Goessel Robert L. Tarnow Page 41 of 41