In the pump industry, we have very well-established and excellent distribution, both domestically and internationally. We've done a good job of taking care of shareholders. Our dividend track record is outstanding: 75 years of dividends, and as a matter of fact, today we made our 53rd increase in payments to shareholders for a 53rd consecutive year of increased payments to shareholders. We believe we have opportunities for further growth, whether that be through market share expansion, just general growth in the industry, introducing new products into the marketplace, and benefiting from both infrastructure investment and data center conditions. Year to date, our incoming is up 9% compared to the prior year, so the industry as a whole is pretty diverse. You use our pumps every day.
You just may not know that, whether that be through potable water, conveyance of wastewater away from your home or office, crop irrigation, appliance and computer cooling, fueling of airplanes, tractors, combines, construction equipment, fire suppression in commercial buildings, heating and cooling the space that you're in. You see and touch our pumps every day. In a lot of cases, pumps are extremely specialized due to the application that they're in, whether that be a unique pressure, a unique amount of flow, the viscosity of the liquid that's being moved, whether that liquid includes solids or is abrasive or maybe acidic, a number of very different specialized pumps, which leads to a pretty frAgmented industry. There are hundreds of pump companies across the world. The industry is about an $80 billion industry. Some competitors are divisions of larger companies, but there are, as I mentioned, hundreds of pump companies out there.
Fortunately, demand for the product continues to increase as the world modernizes, and we continue to invest in infrastructure. One attractive aspect of the industry is that generally pricing is pretty stable due to the maturity of the industry and the extent to which value is being added to products. Pump prices rarely, if ever, go down. Gorman-Rupp has a lot of heritAge within it. We were founded in 1933 by the two gentlemen on the wall behind me. They borrowed $1,500 to start the company in the midst of the Great Depression. Herb Rupp had an idea of how to make a pump self-prime better, and J.C. Gorman said, "Well, gosh, Herb, if you can make it, I think I can sell it." We made a number of acquisitions over the years.
Most recently, our largest acquisition of Fill-Rite, which is a fuel transfer pump business for farmers and contractors, and has been a very successful acquisition. We just announced, as I mentioned, our 53rd year of consecutive dividend increases as well. The six brands that you see across the center of this pAge are the brands that we go to market with, some of them coming out of the legacy history from Mr. Gorman and Mr. Rupp, and some of them being acquired. The mission statement that those guys came up with in 1933 is still what we operate by today. I'm actually just going to read it, and it's to provide a quality product, competitively priced, delivered on time, backed by reliable service, and a profit that provides an equitable return to our shareholders as well as providing our employees with competitive wAges and benefits.
That's really stood the test of time. It's not something we intend to change. Our facilities that are listed across the bottom of the pAge here are very well invested in, and the people that work in them are aligned solely around that mission statement. The operating model that we have for the business is pretty important. It sets us apart from the rest of the industry. First, it starts with the philosophy and culture that's on the left-hand side of the pAge. We make very high-quality products that are supported by the best workforce in the pump industry. We educate our distribution and customers to be certain that those products are applied well and maintained well. We have high degrees of product availability.
We carry more inventory than the rest of the pump industry because a pump on the shelf is half sold, and generally when people need one, it's an emergency. We have high degrees of availability of repair parts and are very active in our communities, and we're a profit-sharing company. Tomorrow, we'll announce the 91st consecutive profit-sharing at the Christmas party for our employees. It's part and parcel to how we operate and does a good job of aligning everyone to make sure that we're taking care of customers. When we operate our divisions, we tend to let—we prefer to let them operate very close to customers, so if we were to make another acquisition, we would operate that new acquisition much in the same fashion as we operate the existing divisions. Divisions are responsible for the things that are at the bottom of this pAge in blue.
They're the things that keep them or allow our operating manAgers to be nimble and stay focused on customers. And we keep certain things off of their plates, things like investor relations, cybersecurity, negotiating benefits, handling cash, negotiating insurance, and legal aspects. All we keep at a small corporate staff in Ohio to handle those things. Of course, there are some things where we need shared work, things like customer-facing technology. The backbone of the technology should be universal, but the division should be able to customize that customer-facing technology so that it suits their markets, their products, their divisions. We get a little bit of leverAge in shared purchasing, things like that. But generally, we want to keep our operating manAgers very nimble and close to the customers and not bothered by the kinds of things that we focus on at the corporate level.
We're a pretty diverse pump company. The products that you see on this pAge are just a sampling of some of the products that we have. We make pumps that are fractional horsepower that you could hold in your hand, that are doing things like cooling NVIDIA's chips today in server racks, all the way up to the pump that's on the bottom right-hand side of this slide. That's a pump for stormwater control that can produce a million gallons of stormwater a minute, 12 feet in diameter, and really everywhere in between. That product diversity is really a virtue. Many of those products can be sold into numerous different markets. These are the markets that we report externally, and we have leading positions in some way, shape, or form with products in each one of these particular markets. We like all of these markets.
Each of them are up in incoming year to date, so strong incoming performance, Again, at 9% through up 9% through the third quarter of 2025. We've been expanding our international sales. Prior to owning Fill-Rite, we were about a third of our sales were international. Fill-Rite was pretty or is pretty U.S.-centric, and so that figure dropped to 25% of our sales. As we continue to focus on organic growth, international sales will continue to be a focus for us. A little over half of our international sales we export out of our U.S. locations. A little under half of those sales we generate from product that comes from those facilities in our international locations. We primarily sell through distribution and sales representatives. They're important for us. There are generally half a dozen things that make a distributor pretty successful.
One, that they have bricks and mortar that they carry inventory into. They have the ability to service the product. Three, they have a well-trained sales force. Four, and they have enough money to do that. Five, and then a plan to focus on Gorman-Rupp. We did gain some retail and e-commerce sales through our acquisition of Fill-Rite, and that's been a nice addition and given us some opportunities to maybe expand some of the other divisions further into retail and e-commerce channels. This distribution network is the best distribution network in the industry. It's one that if we were to try and have a direct sales force, we simply couldn't afford the sales force during difficult economic times. The distribution model serves us really quite well. I'll turn things over to Jim Kerr, our CFO, for some comments on financials.
As Scott mentioned, I'll provide a brief financial overview. I'll talk about our capital allocation priorities, then I'll turn it back over to Scott, and he'll talk about some of our growth initiatives. We've had significant top-line and earnings growth over the last four years, and that was driven by both acquisition and organic growth. During this time, we grew sales by about 90%. About half of that was acquisition-related, and about half of that was due to organic growth. On the acquisition side, in 2022, we acquired Fill-Rite. They're a manufacturer of fuel transfer pumps. What we liked about Fill-Rite: quality of the products, strong number one brand, the good margins they had. They had a history of growth. They filled a niche that we didn't have, and really just met all of our acquisition criteria.
On the organic growth side, in 2022 and 2023, we grew 15% and 16% respectively. We knew based on history that after COVID ended, that things would turn pretty quickly. Our approach during COVID: we maintained our employees, we maintained our inventory levels, we maintained R&D. So when things turned, we were able to gain share due to that approach. With the increase in top-line sales, our Adjusted EPS has also improved significantly. We've been able to improve our gross margin by leverAging that organic growth during that period. Our 2024 Adjusted EPS of $1.75 was a record. I'll talk a little bit about 2025 results here in a slide or two. With the sales growth, we've also seen nice Adjusted EBITDA dollars, and EBITDA as a percent of sales grow as well.
Our 2024 Adjusted EBITDA was also a record of just about $125 million that represented 18.9% of sales. As you can see here by the chart, EBITDA has increased two and a half times since 2020. Of that $75 million increase, about 60% of that was from organic growth that I mentioned earlier, and about 40% of that is due to the acquisition of Fill-Rite. For the first nine months of 2025, our sales have increased 3.8%. We've seen strength in the majority of our markets, including the municipal market, which continues to benefit from infrastructure investments, as well as the industrial market. Our results do include a one-time facility optimization charge of $3 million that we took in the third quarter. The charge we took was to reduce the number of facilities in our National Pump Company division, which serves the Ag market.
We reduced their facilities from six down to three. We transitioned one of those closed facilities to our Patterson division to support their continued growth in municipal fire and HVAC. We expect the changes we've made to that location footprint to result in a $2-$2.5 million of savings annually, and we don't expect that change to have any significant impact on the top line. Excluding that one-time charge, you can see we've maintained the strong gross margins that we achieved in 2024, and our operating income has increased 4.4%. Adjusted EPS has actually increased 19% due to the operating results, but also a significant reduction in our interest expense compared to last year. When you look at incoming and backlog, incoming orders have remained strong, and our backlog is healthy. 2024 incoming orders were up 6.8%, Again with incoming strong across most markets.
2025 year to date, we're up about 10% on incoming, Again with increases across all of our markets. The only down market has been construction. As a result of the strong incoming orders, our backlog at the end of Q3 was $234 million, which was a $28 million increase since year-end. It really positions us well for the fourth quarter as well as heading into 2026. I mentioned the acquisition of Fill-Rite. We purchased Fill-Rite. We were pretty much debt-free most of our history prior to that, but we felt that using the strength of our balance sheet for the acquisition of Fill-Rite made sense.
We felt strongly that it was the right acquisition for us, that it would provide a good return for shareholders, and we were confident in our ability to quickly bring down leverAge due to the strong cash flow of the legacy Gorman-Rupp businesses, but also the strong cash flow of Fill-Rite. We decreased debt by $43 million last year, and through three quarters this year, have decreased our debt by $45 million, and as you can see, leverAge has come down from a peak of 4.9 right after the acquisition to 2.4 at the end of Q3. We'd expect to continue to improve that leverAge. Our leverAge improvement allowed us to refinance our debt in May of last year. We amended and extended our existing term loan, and we also did a small private placement.
We reduced our overall debt, but most importantly, we were able to eliminate some high-interest unsecured debt, and that's been a big contributor to the interest saved so far this year. When you look at interest rate swaps, we're about 50% fixed interest and about 50% floating. Look at our capital allocation. Our first priority is to invest back in the business through CapEx. Most of this investment is in machinery and equipment, primarily replaces old equipment, but it also gives us increased capacity and productivity, and in many cases, we can run a lot of that machinery unmanned. I'll talk more about dividends on the last slide here, and although we've made some acquisitions, as you can see on the slide on the left, none of them were the size of Fill-Rite. That was by far our largest acquisition.
As we look forward into capital allocation priorities, they really are the same as how we've been operating. We're going to continue to invest back in the business through CapEx, probably about $20 million or so a year. We'll continue our dividend track record. We'll continue to deliver. And then once we bring leverAge down a little bit more, we look to be back in the acquisition market. And depending on timing and what's available, we'd look to do another acquisition as part of our growth strategy. Scott mentioned dividends, so I won't spend much time on this slide, but we just announced our 53rd consecutive year of increases at a dividend rate of $0.76 per share. Currently, we're one of the top 50 companies in the U.S. with that type of dividend track record. Turn it back over to Scott to talk about some of our growth initiatives.
Thanks, Jim. The first and foremost aspect of growth in our employees' minds is that blue statement at the top of this pAge. Jim Gorman stated at one point in time, "Folks, hey, if we don't take care of our customers, someone else will." And that's really a cornerstone of the way we approach the market. The most expensive customer to go get is one that you've upset. And so we strive to make sure that all of our customers feel like we have their best interests at heart. That's different than most of the industry. It seems strange that it would be, but not every pump company approaches the market that way. So our culture is really what sets us apart. That focus on customers, profit sharing for all 1,450 of our employees. They're well-trained. We take care of them from a safety standpoint.
We're heavily involved in the communities we operate in and have rock-solid corporate governance. That culture is pretty important and allows some of the things that are further right on the pAge to occur. We are expanding our market share. The pump industry is pretty broad. It's about an $80 billion industry worldwide. If I look five years Ago, we were probably less than 0.5% of the entire industry. Today, we're slightly less than 1% and expanded our market share both through acquisition and through organic growth. We're benefiting right now from a couple of trends. One of them is infrastructure spending, whether that be water, wastewater, or stormwater. There's a good deal of investment going on there. The second that's not noted on this pAge is we're benefiting from data center construction.
In that, every data center has fire pumps, HVAC pumps, and then we're actually cooling NVIDIA's chipsets with in-rack pumps that are liquid cooling those chips. Our supply chains are very U.S.-centric. That's certainly helped us both from a pricing standpoint, which has allowed us to further expand market share by not having to increase prices as much as competitors who have non-U.S.-centric supply chains. We're introducing new products into the marketplace to continue to serve customers' needs, and we'll continue to increase our share of international growth. We really operate our factories as competitive weapons. They make high-quality products. We sell them through the best distribution network in the industry. The high-quality products are generally very available. We do a good job of producing customer-facing technology and manAging our working capital, and we lead the industry in technical expertise.
Our engineers actually lead standard setting for the Hydraulic Institute, which is the pump industry manufacturers' association, and as Jim mentioned, we will turn our sights toward acquisitions once leverAge gets down a little bit more from the purchase of Fill-Rite, so as we look forward, about a 10% increase year to date in incoming orders, we anticipate that we'll be able to continue to grow, and into 2026, we believe we're well-positioned with strong backlog and good incoming order rates. When we do turn our sights to acquisition, we have some criteria. Fill-Rite really fit every one of these criteria and kind of affirmed that they're good criteria. When we go to make an acquisition, we'll find products that are complementary to the products that we have today.
Those products will be sold into markets that we're familiar with, and the culture of the company will be customer-focused, as are the rest of our divisions today. We would prefer a U.S. manufacturer. Certainly would entertain one being in Europe as well, but probably not in other regions. From a competitive standpoint, what we buy would have a leading brand and a leading position in a profitable niche market within the industry. We certainly wouldn't buy a business that needs to be turned around or fixed or didn't have a good reputation with its customer. We would look for a manAgement team that's interested in continuing on with us. While certainly buying a company that has great products is important, the people that run that business are extremely important to us as well. Certainly, it would be accretive near-term.
And from a size standpoint, we're not going to buy real small acquisitions. Those aren't worth the effort that you'd have to put into them. And so something of scale would be quite useful. So if I recap, we're a very well-known manufacturer of pumps and pump systems within the industry. We make very high-quality products that treat our customers well. We use primarily a U.S.-based supply chain and manufacturing footprint. We sell a very diverse group of products into a very diverse set of markets. It's pretty rare that all those markets are down at the same time. Generally, we like all the markets and see good opportunity in them. We have world-class brands that are recognized in the industry. All six of those brands are sought after by their customers. We certainly have great distribution. We train them very well.
We have a strong record of taking care of shareholders through dividend increases, and we're continuing to expand our opportunities, whether that be through gaining market share, the natural growth of the industry, introducing new products, or benefiting from some trends in the industry like infrastructure development and data centers, and at some point, we'll turn our sights back toward acquisitions, so as we go forward, there should be good opportunities to continue to grow and expand our profitability, so be happy to pause here and take some questions.
Thank you, Scott. Thank you, Jim. If you have a question, please submit in the Q&A section now presented to manAgement. With that said, you've had some months to absorb the potential impact of tariffs. How has your industry been impacted so far, though, by the change in the tariff environment?
Well, the industry has been impacted by it. There's a sizable portion of the industry that imports its castings primarily from China. Well, we do a little bit of that. We don't do anywhere near the amount of it that the vast majority of the industry has. So while we certainly have increased our prices over the last few years because there are inflationary drivers, whether that's energy or healthcare or what have you, wAge inflation, those kinds of things, we have not had to increase our prices anywhere near the extent that others have chosen to do based on their exposure to tariffs. So the tariff environment for the industry has been pretty painful. It's been helpful to Gorman-Rupp.
That's good to hear. You had a great slide here on M&A in the presentation. Can you highlight maybe some end markets or product lines that you find particularly attractive that you'd kind of want to carve out?
Yeah. So we'll just jump back to that. I'll give you an example of why Fill-Rite really made sense to us. Gorman-Rupp manufactures a line of fuel transfer pumps that start at about 50 gallons per minute and go up from there. And they're centrifugal pumps, meaning they have an impeller in them that spins, and that's how the pumping activity is generated. Fill-Rite manufactures a line of fuel transfer pumps that really go from 0 to 35 gallons per minute. And they're a different technology. They're a rotary vane positive displacement pump. Now, Gorman-Rupp could have come up with a rotary vane positive displacement pump. There's no reason that from a technical standpoint, we wouldn't have had the knowledge or ability to do that.
But in order to go take the kind of market share that Fill-Rite had, it would have taken us decades to displace them from the channels where they're well-respected and well-known within the industry. And so we would look for pump types that we don't have. And really, in any of the markets that are listed here, John, they're all pretty attractive markets in our minds. And there are really opportunities to be able to grow into those markets with product lines that we simply don't have. So any of those markets would be well-suited. And it really is probably more dependent on what becomes available and is of a size that we could handle from an acquisition standpoint and all of the other factors that are on this pAge as to whether or not we would be interested in a particular company when it becomes available.
Got it. Question from the audience about international markets. Are you focused on certain geographies or product lines to drive growth? And what are the opportunities in the international sector?
Yeah, it's probably easier to say the geographies where we're not focused. I think last year we sold into 140 countries, but we certainly are not focused on selling into China or India. They're not markets where, while they're of size, they're not markets where you can command the kind of margins and pricing that are necessary to be able to produce the kinds of high-quality products that we do. From a product standpoint, generally, all of the products that we make are suitable for international markets. There's probably some product we don't have in 50 hertz that would require product development to be able to be sold into countries where they're not 60 hertz. And in some cases, we're choosing to do that. In other cases, we're not because we just don't simply see enough opportunity. So it really varies by product line.
But generally, we're interested in expanding pretty much worldwide with the exception of China and India.
Got it. Another question from the audience about margin improvement. Has it been driven primarily by operating leverAge, or is there any benefit from mix and/or price?
It's primarily been driven by operating leverAge, so our margins today are probably 600 basis points higher than they were pre-COVID. About 40% of that came from the acquisition of Fill-Rite. Fill-Rite's margins were better than Legacy Gorman-Rupp, and about 60% of it came from Legacy Gorman-Rupp growing in the existing facilities that we have and leverAging our fixed costs. As we go forward, I certainly would expect that that leverAge can continue. I don't know that there's another 600 basis points out there, but as we continue to grow over the next few years, we don't anticipate needing additional facilities and should have capacity that allows us to continue to grow and further expand those margins.
Yeah. We've talked about how consistent we are investing back in the business in CapEx. That's our number one capital allocation priority. That's really helped us over the years as well. Just the efficiency and the automation that that's getting us has been what's allowed us to leverAge that organic growth. And we expect to continue to do that at a similar pace that we've done historically.
Makes sense. Makes sense. What changes do you expect in key end markets as we look into 2026 relative to 2025?
Changes. Let's talk about what's not going to change. We think the municipal business is still going to continue to be strong as funding is solid and available. We think that activity around fire, HVAC, and OEM business related to data centers is going to continue to be strong, maybe even increase a bit. Where we see or have seen some softness in Ag and construction, at some point in time, those inevitably are going to have to tip back up. Whether they do that in the latter part of 2026 or not remains to really be seen. But right now, we're good from an incoming standpoint. Our backlog is extremely robust. So we're entering 2026 with solid incoming conditions and strong backlog. So 2026 has the potential to be a pretty good year for us.
In addition to operating performance, we'll get a little bit more tailwind as we've paid down through the third quarter $45 million of the Fill-Rite-related debt, probably on track to do something close to $60 million by year-end if you analyze that or annualize it, sorry, so we'll get a little bit more tailwind in interest savings that should force EPS beyond where operating results are.
Got it. Well, it seems like we're just about out of time. Scott, any closing comments?
Well, we certainly appreciate your interest in Gorman-Rupp. If we've piqued it enough that you're interested in hearing a bit more, you certainly can reach out to us. We'd be happy to entertain a conversation and take things further.
Thanks Again, gentlemen. We appreciate you participating in this Deloitte Conference. Have a great day.
Thanks, John. You too.
Bye.