8-K
FLOWSERVE CORP (FLS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 2024
FLOWSERVE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
| New York | 1-13179 | 31-0267900 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
| 5215 N. O’Connor Blvd., Suite 700, Irving, Texas | 75039 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
(972) 443-6500
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br>on which registered |
|---|---|---|
| Common Stock, $1.25 Par Value | FLS | New York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 28, 2024, Flowserve Corporation, a New York corporation (the “Company”), issued a press release announcing financial results for the third quarter ended September 30, 2024. A copy of this press release is attached as Exhibit 99.1 and incorporated herein by reference.
The information in this Item 2.02 of Form 8-K and in Exhibit 99.1 attached hereto is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 7.01 Regulation FD Disclosure.
On October 29, 2024, the Company will make a presentation about its financial and operating results for the third quarter of 2024, as noted in the press release described in Item 2.02 above. The Company has posted the presentation on its website at http://www.flowserve.com under the “Investors” section.
The information in this Item 7.01 of Form 8-K and in Exhibit 99.1 attached hereto is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. |
|---|---|
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release, dated October 28, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FLOWSERVE CORPORATION | ||
|---|---|---|
| Dated: October 28, 2024 | By: | /s/ Amy B. Schwetz |
| Amy B. Schwetz | ||
| Senior Vice President, Chief Financial Officer |
EX-99.1
Exhibit 99.1
FOR IMMEDIATE RELEASE
Flowserve Corporation Reports Third Quarter 2024 Results;
Reaffirms 2024 Adjusted EPS Guidance
| • | Bookings of $1.20 billion, an increase of 12.7% compared to prior year, including $615 million ofaftermarket activity and record levels of 3D strategy bookings |
|---|---|
| • | Power bookings increased nearly 30% year-over-year, including over $100 million in nuclear awardsduring the third quarter |
| --- | --- |
| • | Adjusted Gross and Operating Margins^1^ of 32.4% and11.1%, respectively, an increase of 270 and 240 basis points compared to prior year period |
| --- | --- |
| • | Third quarter Reported and Adjusted^2^ Earnings Per Share(EPS)^3^ of 44 cents and 62 cents, an increase of 26% and 24%, respectively, and both include a 7 cent unfavorable impact from a discrete charge for certain long-term liabilities |
| --- | --- |
| • | Generated strong operating cash flow of $178 million, an increase of 121% year-over-year, driven byearnings growth and working capital improvements |
| --- | --- |
DALLAS, October 28, 2024 – Flowserve Corporation (NYSE: FLS) (“Flowserve” or the “Company”), a leading provider of flow control products and services for the global infrastructure markets, today announced its financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights (all comparisons to the 2023 third quarter, unless otherwise noted)
| • | Total bookings were $1.20 billion, up $136.1 million or 12.7%. On a constant currency basis^4^, total bookings were up $142.8 million or 13.4% |
|---|---|
| • | Original equipment bookings were $589.0 million, up $103.8 million or 21.4%. On a constant currency<br>basis, original equipment bookings were up $106.1 million or 21.9% |
| --- | --- |
| • | Aftermarket bookings were $614.6 million, up $32.3 million or 5.6%. On a constant currency basis,<br>aftermarket bookings were up $36.7 million or 6.3% |
| --- | --- |
| • | Sales were $1.13 billion, up $38.4 million or 3.5%. On a constant currency basis, sales were up<br>$43.4 million or 4.0% |
| --- | --- |
| • | Original equipment sales were $555.8 million, up $26.6 million or 5.0%. On a constant currency basis,<br>original equipment sales were up $27.6 million or 5.2% |
| --- | --- |
| • | Aftermarket sales were $577.3 million, up $11.7 million or 2.1%. On a constant currency basis,<br>aftermarket sales were up $15.7 million or 2.8% |
| --- | --- |
| • | Reported gross and operating margins were 31.5% and 9.1%, respectively, up 250 basis points and 270 basis<br>points, respectively |
| --- | --- |
| • | Adjusted gross and operating margins were 32.4% and 11.1%, respectively, up 270 basis points and 240 basis<br>points, respectively |
| --- | --- |
| • | Both Reported and Adjusted third quarter 2024 operating margins were impacted by a $12.0 million expense<br>charge from an actuarial-determined assessment of certain long-term liabilities, which reduced operating margins by approximately 106 basis points |
| --- | --- |
| • | Reported EPS of $0.44 and Adjusted EPS of $0.62, compared to $0.35 and $0.50, respectively<br> |
| --- | --- |
| • | Third quarter 2024 Reported EPS includes after-tax adjusted expenses of<br>$23.5 million, comprised of realignment charges, an in-process R&D technology purchase, pension plan transition expense,<br>below-the-line foreign currency impact and MOGAS Industries acquisition expense |
| --- | --- |
| • | Both Reported and Adjusted EPS were impacted by a $9.2 million (7 cents per share) expense charge resulting<br>from an actuarial-determined assessment of certain long-term liabilities |
| --- | --- |
| • | Backlog of $2.8 billion was up 3.7% sequentially with a third quarter book-to-bill of 1.06x |
| --- | --- |
“Our third quarter results reflect strong operational performance, including meaningful year-over-year improvements in margins, EPS and cash flow. The Flowserve Business System is beginning to deliver results as we advance our operational excellence and portfolio excellence initiatives. We generated $1.2 billion in bookings during the quarter, which included a healthy mix of project awards, strong aftermarket activity and record bookings from our 3D strategic initiatives,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “We believe our 3D strategy, combined with the Flowserve Business System, are the key drivers to accelerating growth and continuing to expand our margins.”
Rowe concluded, “With backlog at near-record levels of $2.8 billion and our successful closing of the MOGAS Industries acquisition earlier this month, we expect to exit 2024 with positive momentum. We are well-positioned to continue our meaningful progress in 2025 toward our 2027 financial targets. I am confident that our sustained progress will enable us to create long-term value for our customers, associates, and shareholders.”
2024 Guidance^5^
Flowserve today reaffirmed its previously announced Adjusted EPS target range, as well as certain other financial metrics, provided in its full-year 2024 guidance issued on July 29, 2024. Flowserve’s 2024 Adjusted EPS target range excludes expected adjusted items including realignment charges of approximately $45 million and the potential impact of below-the-line foreign currency effects and certain other discrete items which may arise during the course of the year. In addition, Flowserve lowered its full-year 2024 Reported EPS target range. 2024 Guidance excludes the recently completed MOGAS Industries acquisition.
2
| Target Range | |
|---|---|
| Revenue Growth | Up 4.0% to 6.0% |
| Reported Earnings Per Share | $2.15 - $2.35 |
| Adjusted Earnings Per Share | $2.60 - $2.75 |
| Net Interest Expense | $60 to $65 million |
| Adjusted Tax Rate | ~21% |
| Capital Expenditures | $75 - $85 million |
Third Quarter 2024 Results Conference Call
Flowserve will host its conference call with the financial community on Tuesday, October 29^th^ at 10:00 AM Eastern. Scott Rowe, President and Chief Executive Officer, as well as other members of the management team will be presenting. The call can be accessed by shareholders and other interested parties at www.flowserve.com under the “Investors” section.
| ^1^ | Adjusted gross and operating margins are calculated by dividing adjusted gross profit and adjusted operating<br>income, respectively, by revenues. Adjusted gross profit and adjusted operating income are derived by excluding the adjusted items. See Consolidated Reconciliation of Non-GAAP Financial Measures to the Most<br>Directly Comparable GAAP Financial Measure (Unaudited) and Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) tables for a detailed<br>reconciliation. |
|---|---|
| ^2^ | See Consolidated Reconciliation of Non-GAAP Financial Measures to the<br>Most Directly Comparable GAAP Financial Measure (Unaudited) and Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) tables for a detailed<br>reconciliation of reported results to adjusted measures. |
| --- | --- |
| ^3^ | Adjusted EPS excludes identified realignment expenses, the impact from other specific discrete items and below-the-line foreign currency effects and utilizes the then-applicable foreign exchange rates and approximately 132 million fully diluted shares. |
| --- | --- |
| ^4^ | Constant currency is a non-GAAP financial measure. We have calculated<br>constant currency amounts and the associated currency effects on operations by translating current year results on a monthly basis at prior year exchange rates for the same periods. |
| --- | --- |
| ^5^ | 2024 Adjusted EPS excludes realignment expenses, the recently completed MOGAS Industries acquisition, the<br>impact of below-the-line foreign currency effects and certain other discrete items which may arise during the year and utilizes September 2024 foreign exchange rates and<br>approximately 132 million fully diluted shares. |
| --- | --- |
3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands, except per share data) | 2024 | 2023 | ||||
| Sales | $ | 1,133,087 | $ | 1,094,718 | ||
| Cost of sales | (776,020 | ) | (777,024 | ) | ||
| Gross profit | 357,067 | 317,694 | ||||
| Selling, general and administrative expense | (259,025 | ) | (252,065 | ) | ||
| Net earnings from affiliates | 5,150 | 4,627 | ||||
| Operating income | 103,192 | 70,256 | ||||
| Interest expense | (16,587 | ) | (17,273 | ) | ||
| Interest income | 1,403 | 2,134 | ||||
| Other income (expense), net | (5,920 | ) | (13,710 | ) | ||
| Earnings (loss) before income taxes | 82,088 | 41,407 | ||||
| (Provision for) benefit from income taxes | (18,739 | ) | 11,186 | |||
| Net earnings (loss), including noncontrolling interests | 63,349 | 52,593 | ||||
| Less: Net earnings attributable to noncontrolling interests | (4,967 | ) | (6,437 | ) | ||
| Net earnings (loss) attributable to Flowserve Corporation | $ | 58,382 | $ | 46,156 | ||
| Net earnings (loss) per share attributable to Flowserve Corporation common shareholders: | ||||||
| Basic | $ | 0.44 | $ | 0.35 | ||
| Diluted | 0.44 | 0.35 | ||||
| Weighted average shares – basic | 131,395 | 131,183 | ||||
| Weighted average shares – diluted | 132,247 | 132,026 |
4
Consolidated Reconciliation of Non-GAAP Financial Measures to theMost Directly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands, except per share data)
| Three Months Ended September 30, 2024 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | OtherIncome(Expense),Net | ProvisionFor (BenefitFrom)IncomeTaxes | Net Earnings(Loss) | EffectiveTax Rate | DilutedEPS | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 357,067 | **** | $ | 259,025 | **** | $ | 103,192 | **** | $ | (5,920 | ) | $ | 18,739 | **** | $ | 58,382 | **** | **** | 22.8 | % | **** | 0.44 |
| Reported as a percent of sales | 31.5 | % | 22.9 | % | 9.1 | % | -0.5 | % | 1.7 | % | 5.2 | % | |||||||||||
| Realignment charges (a) | 6,813 | (2,142 | ) | 8,955 | — | (246 | ) | 9,201 | -2.7 | % | 0.07 | ||||||||||||
| Discrete items (b)(c) | 2,700 | (9,500 | ) | 12,200 | — | 2,869 | 9,331 | 23.5 | % | 0.07 | |||||||||||||
| Acquisition related (d) | — | (1,694 | ) | 1,694 | — | 399 | 1,295 | 23.6 | % | 0.01 | |||||||||||||
| Below-the-line<br>foreign exchange impacts (e) | — | — | — | 3,184 | (467 | ) | 3,651 | -14.8 | % | 0.03 | |||||||||||||
| Adjusted | $ | 366,580 | **** | $ | 245,689 | **** | $ | 126,041 | **** | $ | (2,736 | ) | $ | 21,294 | **** | $ | 81,860 | **** | **** | 19.7 | % | **** | 0.62 |
| Adjusted as a percent of sales | 32.4 | % | 21.7 | % | 11.1 | % | -0.2 | % | 1.9 | % | 7.2 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $5,100 is non-cash. |
|---|---|
| (b) | Charge represents a one-time $5,000 discretionary cash transition<br>benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan. |
| --- | --- |
| (c) | Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied<br>natural gas technology. |
| --- | --- |
| (d) | Charge represents acquisition-related costs associated with the MOGAS acquisition. |
| --- | --- |
| (e) | Below-the-line foreign exchange<br>impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency. |
| --- | --- |
5
| Three Months EndedSeptember 30, 2023 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | OtherIncome(Expense),Net | ProvisionFor (BenefitFrom)IncomeTaxes | EarningsAttributable toNoncontrollingInterests | NetEarnings(Loss) | EffectiveTax Rate | DilutedEPS | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 317,694 | **** | $ | 252,065 | **** | $ | 70,256 | **** | $ | (13,710 | ) | $ | (11,186 | ) | $ | 6,437 | **** | $ | 46,156 | **** | **** | -27.0 | % | **** | 0.35 | **** |
| Reported as a percent of sales | 29.0 | % | 23.0 | % | 6.4 | % | -1.3 | % | -1.0 | % | 0.6 | % | 4.2 | % | |||||||||||||
| Realignment charges (a) | 7,240 | (14,954 | ) | 22,194 | — | 4,250 | — | 17,944 | 19.1 | % | 0.14 | ||||||||||||||||
| Acquisition related (b) | — | (2,539 | ) | 2,539 | — | 443 | — | 2,096 | 17.4 | % | 0.02 | ||||||||||||||||
| Correction of prior period errors (c) | — | — | — | — | — | (3,559 | ) | 3,559 | 0.0 | % | 0.03 | ||||||||||||||||
| Discrete tax benefit (d) | — | — | — | — | 13,000 | — | (13,000 | ) | 0.0 | % | (0.10 | ) | |||||||||||||||
| Below-the-line<br>foreign exchange impacts (e) | — | — | — | 12,164 | 2,276 | — | 9,888 | 18.7 | % | 0.07 | |||||||||||||||||
| Adjusted | $ | 324,934 | **** | $ | 234,572 | **** | $ | 94,989 | **** | $ | (1,546 | ) | $ | 8,783 | **** | $ | 2,878 | **** | $ | 66,643 | **** | **** | 11.2 | % | **** | 0.50 | **** |
| Adjusted as a percent of sales | 29.7 | % | 21.4 | % | 8.7 | % | -0.1 | % | 0.8 | % | 0.3 | % | 6.1 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $0 is non-cash. |
|---|---|
| (b) | Charges represent costs associated with a terminated acquisition. |
| --- | --- |
| (c) | Represents the amount to correct the cumulative impact of prior period errors |
| --- | --- |
| (d) | Represents a discrete tax benefit due to release of tax valuation allowance on the net deferred tax assets in a<br>foreign jurisdiction. The associated tax expense was adjusted out in 2015. |
| --- | --- |
| (e) | Below-the-line foreign exchange<br>impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency. |
| --- | --- |
6
SEGMENT INFORMATION
(Unaudited)
| FLOWSERVE PUMPS DIVISION | Three Months Ended September 30, | |||||
|---|---|---|---|---|---|---|
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 886.6 | $ | 734.7 | ||
| Sales | 782.1 | 766.2 | ||||
| Gross profit | 253.2 | 220.3 | ||||
| Gross profit margin | 32.4 | % | 28.8 | % | ||
| SG&A | 149.1 | 146.7 | ||||
| Segment operating income | 109.3 | 78.3 | ||||
| Segment operating income as a percentage of sales | 14.0 | % | 10.2 | % | ||
| FLOW CONTROL DIVISION | Three Months Ended September 30, | |||||
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 318.4 | $ | 330.5 | ||
| Sales | 353.1 | 330.7 | ||||
| Gross profit | 106.5 | 97.6 | ||||
| Gross profit margin | 30.2 | % | 29.5 | % | ||
| SG&A | 59.8 | 54.0 | ||||
| Segment operating income | 46.7 | 43.5 | ||||
| Segment operating income as a percentage of sales | 13.2 | % | 13.2 | % |
Segment Reconciliation of Non-GAAP Financial Measures to the Most DirectlyComparable GAAP Financial Measure (Unaudited)
(Amounts in thousands)
Flowserve Pumps Division
| Three Months EndedSeptember 30, 2024 | Gross Profit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 253,185 | **** | $ | 149,060 | **** | $ | 109,274 | **** |
| Reported as a percent of sales | 32.4 | % | 19.1 | % | 14.0 | % | |||
| Realignment charges (a) | 8,415 | (716 | ) | 9,131 | |||||
| Discrete items (b)(c) | 1,700 | (8,000 | ) | 9,700 | |||||
| Adjusted | $ | 263,300 | **** | $ | 140,344 | **** | $ | 128,105 | **** |
| Adjusted as a percent of sales | 33.7 | % | 17.9 | % | 16.4 | % | |||
| Three Months EndedSeptember 30, 2023 | Gross Profit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Reported | $ | 220,321 | **** | $ | 146,679 | **** | $ | 78,269 | **** |
| Reported as a percent of sales | 28.8 | % | 19.1 | % | 10.2 | % | |||
| Realignment charges (a) | 6,141 | (9,929 | ) | 16,070 | |||||
| Adjusted | $ | 226,462 | **** | $ | 136,750 | **** | $ | 94,339 | **** |
| Adjusted as a percent of sales | 29.6 | % | 17.8 | % | 12.3 | % |
7
Flow Control Division
| Three Months EndedSeptember 30, 2024 | Gross Profit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 106,503 | **** | $ | 59,790 | **** | $ | 46,713 | **** |
| Reported as a percent of sales | 30.2 | % | 16.9 | % | 13.2 | % | |||
| Realignment charges (a) | (1,590 | ) | (1,379 | ) | (211 | ) | |||
| Discrete items (b) | 800 | (400 | ) | 1,200 | |||||
| Acquisition related (d) | — | (1,694 | ) | 1,694 | |||||
| Adjusted | $ | 105,713 | **** | $ | 56,317 | **** | $ | 49,396 | **** |
| Adjusted as a percent of sales | 29.9 | % | 15.9 | % | 14.0 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $5,100 is non-cash. | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (b) | Charge represents a one-time $3,700 discretionary cash transition<br>benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan. | ||||||||
| --- | --- | ||||||||
| (c) | Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied<br>natural gas technology. | ||||||||
| --- | --- | ||||||||
| (d) | Charge represents acquisition-related costs associated with the MOGAS acquisition. <br> | ||||||||
| --- | --- | ||||||||
| Three Months EndedSeptember 30, 2023 | Gross Profit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Reported | $ | 97,563 | **** | $ | 54,016 | **** | $ | 43,547 | **** |
| Reported as a percent of sales | 29.5 | % | 16.3 | % | 13.2 | % | |||
| Realignment charges (a) | 1,099 | (1,572 | ) | 2,671 | |||||
| Acquisition related (b) | — | (2,539 | ) | 2,539 | |||||
| Adjusted | $ | 98,662 | **** | $ | 49,905 | **** | $ | 48,757 | **** |
| Adjusted as a percent of sales | 29.8 | % | 15.1 | % | 14.7 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $0 is non-cash. |
|---|---|
| (b) | Charges represent costs associated with a terminated acquisition<br> |
| --- | --- |
8
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands, except per share data) | 2024 | 2023 | ||||
| Sales | $ | 3,377,458 | $ | 3,155,399 | ||
| Cost of sales | (2,315,326 | ) | (2,218,114 | ) | ||
| Gross profit | 1,062,132 | 937,285 | ||||
| Selling, general and administrative expense | (726,070 | ) | (726,424 | ) | ||
| Loss on sale of business | (12,981 | ) | — | |||
| Net earnings from affiliates | 14,494 | 13,229 | ||||
| Operating income | 337,575 | 224,090 | ||||
| Interest expense | (48,820 | ) | (50,039 | ) | ||
| Interest income | 3,746 | 5,535 | ||||
| Other income (expense), net | (12,057 | ) | (27,271 | ) | ||
| Earnings (loss) before income taxes | 280,444 | 152,315 | ||||
| (Provision for) benefit from income taxes | (62,728 | ) | (14,571 | ) | ||
| Net earnings (loss), including noncontrolling interests | 217,716 | 137,744 | ||||
| Less: Net earnings attributable to noncontrolling interests | (12,498 | ) | (13,618 | ) | ||
| Net earnings (loss) attributable to Flowserve Corporation | $ | 205,218 | $ | 124,126 | ||
| Net earnings (loss) per share attributable to Flowserve Corporation common shareholders: | ||||||
| Basic | $ | 1.56 | $ | 0.95 | ||
| Diluted | 1.55 | 0.94 | ||||
| Weighted average shares – basic | 131,520 | 131,095 | ||||
| Weighted average shares – diluted | 132,343 | 131,864 |
9
Consolidated Reconciliation of Non-GAAP Financial Measures to theMost Directly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands, except per share data)
| Nine Months EndedSeptember 30, 2024 | Gross Profit | Selling,General &AdministrativeExpense | Loss onSale ofBusiness | OperatingIncome | OtherIncome(Expense),Net | Provision For(Benefit From)Income Taxes | NetEarnings(Loss) | EffectiveTaxRate | DilutedEPS | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 1,062,132 | **** | $ | 726,070 | **** | $ | 12,981 | **** | $ | 337,575 | **** | $ | (12,057 | ) | $ | 62,728 | **** | $ | 205,218 | **** | **** | 22.4 | % | **** | 1.55 |
| Reported as a percent of sales | 31.4 | % | 21.5 | % | 0.4 | % | 10.0 | % | -0.4 | % | 1.9 | % | 6.1 | % | ||||||||||||
| Realignment charges (a) | 20,007 | (3,369 | ) | (12,981 | ) | 36,357 | — | 2,035 | 34,322 | 5.6 | % | 0.26 | ||||||||||||||
| Discrete items (b)(c)(d) | 2,700 | (7,500 | ) | — | 10,200 | — | 2,869 | 7,331 | 28.1 | % | 0.06 | |||||||||||||||
| Acquisition related (e) | — | (2,794 | ) | — | 2,794 | — | 658 | 2,136 | 23.6 | % | 0.02 | |||||||||||||||
| Discrete asset write-downs (f)(g) | — | (1,795 | ) | — | 1,795 | 3,567 | 1,342 | 4,020 | 25.0 | % | 0.03 | |||||||||||||||
| Below-the-line<br>foreign exchange impacts (h) | — | — | — | — | 2,068 | (489 | ) | 2,557 | -23.6 | % | 0.02 | |||||||||||||||
| Adjusted | $ | 1,084,839 | **** | $ | 710,612 | **** | $ | — | **** | $ | 388,721 | **** | $ | (6,422 | ) | $ | 69,143 | **** | $ | 255,584 | **** | **** | 20.5 | % | **** | 1.93 |
| Adjusted as a percent of sales | 32.1 | % | 21.0 | % | 0.0 | % | 11.5 | % | -0.2 | % | 2.0 | % | 7.6 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $25,100 is non-cash. |
|---|---|
| (b) | Charge represents a reduction to reserves of $2,000 associated with our ongoing financial exposure in Russia<br>that were adjusted for Non-GAAP measures when established in 2022. |
| --- | --- |
| (c) | Charge represents a one-time $5,000 discretionary cash transition<br>benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan. |
| --- | --- |
| (d) | Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied<br>natural gas technology. |
| --- | --- |
| (e) | Charge represents acquisition-related costs associated with the MOGAS acquisition. |
| --- | --- |
| (f) | Charge represents a $1,795 non-cash write-down of a software asset.<br> |
| --- | --- |
| (g) | Charge represents a $3,567 non-cash write-down of a debt investment.<br> |
| --- | --- |
| (h) | Below-the-line foreign exchange<br>impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency. |
| --- | --- |
10
| Nine Months EndedSeptember 30, 2023 | Gross Profit | Selling,General &AdministrativeExpense | OperatingIncome | OtherIncome(Expense),Net | ProvisionFor (BenefitFrom)IncomeTaxes | EarningsAttributable toNoncontrollingInterests | NetEarnings(Loss) | EffectiveTaxRate | DilutedEPS | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 937,285 | $ | 726,424 | $ | 224,090 | $ | (27,271 | ) | $ | 14,571 | $ | 13,618 | $ | 124,126 | 9.6 | % | 0.94 | |||||||||
| Reported as a percent of sales | 29.7 | % | 23.0 | % | 7.1 | % | -0.9 | % | 0.5 | % | 0.4 | % | 3.9 | % | |||||||||||||
| Realignment charges (a) | 11,548 | (39,076 | ) | 50,624 | — | 10,415 | — | 40,209 | 20.6 | % | 0.30 | ||||||||||||||||
| Acquisition related (b) | — | (8,491 | ) | 8,491 | — | 1,997 | — | 6,494 | 23.5 | % | 0.05 | ||||||||||||||||
| Discrete asset write-downs (c)(d)(e) | 1,969 | (3,955 | ) | 5,924 | — | 1,517 | — | 4,407 | 25.6 | % | 0.03 | ||||||||||||||||
| Below-the-line<br>foreign exchange impacts (f) | — | — | — | 24,328 | 2,669 | — | 21,659 | 0.0 | % | 0.16 | |||||||||||||||||
| Correction of prior period errors (g) | — | — | — | — | — | (3,559 | ) | 3,559 | 0.0 | % | 0.03 | ||||||||||||||||
| Discrete tax benefit (h) | — | — | — | — | 13,000 | — | (13,000 | ) | 0.0 | % | (0.10 | ) | |||||||||||||||
| Adjusted | $ | 950,802 | **** | $ | 674,902 | **** | $ | 289,129 | **** | $ | (2,943 | ) | $ | 44,169 | **** | $ | 10,059 | **** | $ | 187,454 | **** | **** | 18.3 | % | **** | 1.42 | **** |
| Adjusted as a percent of sales | 30.1 | % | 21.4 | % | 9.2 | % | -0.1 | % | 1.4 | % | 0.3 | % | 5.9 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $7,601 is non-cash. |
|---|---|
| (b) | Charges represent costs associated with a terminated acquisition. |
| --- | --- |
| (c) | Charge represents a further expense of $1,834 associated with a sales contract that was initially adjusted out<br>of Non-GAAP measures in 2017. |
| --- | --- |
| (d) | Charge represents a further $1,173 non-cash write-down of inventory<br>associated with a customer sales contract that was originally determined to be uncollectible in 2020. |
| --- | --- |
| (e) | Charge represents a $2,917 non-cash write-down of a licensing<br>agreement. |
| --- | --- |
| (f) | Below-the-line foreign exchange<br>impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency. |
| --- | --- |
| (g) | Represents the amount to correct the cumulative impact of prior period errors. |
| --- | --- |
| (h) | Represents a discrete tax benefit due to release of tax valuation allowance on the net deferred tax assets in a<br>foreign jurisdiction. The associated tax expense was adjusted out in 2015. |
| --- | --- |
11
SEGMENT INFORMATION
(Unaudited)
| FLOWSERVE PUMPS DIVISION | Nine Months Ended September 30, | |||||
|---|---|---|---|---|---|---|
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 2,488.6 | $ | 2,222.3 | ||
| Sales | 2,363.7 | 2,231.7 | ||||
| Gross profit | 761.3 | 668.6 | ||||
| Gross profit margin | 32.2 | % | 30.0 | % | ||
| SG&A | 424.8 | 426.4 | ||||
| Segment operating income | 351.1 | 255.3 | ||||
| Segment operating income as a percentage of sales | 14.9 | % | 11.4 | % | ||
| FLOW CONTROL DIVISION | Nine Months Ended September 30, | |||||
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 1,008.3 | $ | 1,022.1 | ||
| Sales | 1,021.4 | 930.0 | ||||
| Gross profit | 305.5 | 270.9 | ||||
| Gross profit margin | 29.9 | % | 29.1 | % | ||
| SG&A | 178.8 | 172.7 | ||||
| Loss on sale of business | (13.0 | ) | — | |||
| Segment operating income | 113.7 | 98.2 | ||||
| Segment operating income as a percentage of sales | 11.1 | % | 10.6 | % |
12
Segment Reconciliation of Non-GAAP Financial Measures to the MostDirectly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands)
Flowserve Pumps Division
| Nine Months EndedSeptember 30, 2024 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 761,338 | **** | $ | 424,824 | **** | $ | 351,146 | **** |
| Reported as a percent of sales | 32.2 | % | 18.0 | % | 14.9 | % | |||
| Realignment charges (a) | 20,837 | (1,037 | ) | 21,874 | |||||
| Discrete items (b)(c)(d) | 1,700 | (6,000 | ) | 7,700 | |||||
| Adjusted | $ | 783,875 | **** | $ | 417,787 | **** | $ | 380,720 | **** |
| Adjusted as a percent of sales | 33.2 | % | 17.7 | % | 16.1 | % |
Flow Control Division
| Nine MonthsEndedSeptember 30,2024 | GrossProfit | Selling,General &AdministrativeExpense | Loss onSale ofBusiness | OperatingIncome | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 305,469 | **** | $ | 178,816 | **** | $ | 12,981 | **** | $ | 113,672 | **** |
| Reported as a percent of sales | 29.9 | % | 17.5 | % | 1.3 | % | 11.1 | % | ||||
| Realignment charges (a) | (602 | ) | (1,440 | ) | (12,981 | ) | 13,819 | |||||
| Discrete item (b) | 800 | (400 | ) | — | 1,200 | |||||||
| Acquisition related (e) | — | (2,794 | ) | — | 2,794 | |||||||
| Adjusted | $ | 305,667 | **** | $ | 174,182 | **** | $ | — | **** | $ | 131,485 | **** |
| Adjusted as a percent of sales | 29.9 | % | 17.1 | % | 0.0 | % | 12.9 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $25,100 is non-cash. | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (b) | Charge represents a one-time $3,700 discretionary cash transition<br>benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan. | ||||||||
| --- | --- | ||||||||
| (c) | Charge represents a reduction to reserves of $2,000 associated with our ongoing financial exposure in Russia<br>that were adjusted for Non-GAAP measures when established in 2022. | ||||||||
| --- | --- | ||||||||
| (d) | Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied<br>natural gas technology. | ||||||||
| --- | --- | ||||||||
| (e) | Charge represents acquisition-related costs associated with the MOGAS acquisition.<br> | ||||||||
| --- | --- | ||||||||
| Nine Months EndedSeptember 30, 2023 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Reported | $ | 668,562 | **** | $ | 426,438 | **** | $ | 255,345 | **** |
| Reported as a percent of sales | 30.0 | % | 19.1 | % | 11.4 | % | |||
| Realignment charges (a) | 7,484 | (11,996 | ) | 19,480 | |||||
| Discrete asset write-downs (b)(c)(d) | 1,969 | (3,955 | ) | 5,924 | |||||
| Adjusted | $ | 678,015 | **** | $ | 410,487 | **** | $ | 280,749 | **** |
| Adjusted as a percent of sales | 30.4 | % | 18.4 | % | 12.6 | % | |||
| Nine Months EndedSeptember 30, 2023 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
| Reported | $ | 270,914 | **** | $ | 172,718 | **** | $ | 98,196 | **** |
| Reported as a percent of sales | 29.1 | % | 18.6 | % | 10.6 | % | |||
| Realignment charges (a) | 4,263 | (10,478 | ) | 14,741 | |||||
| Acquisition related (e) | — | (8,491 | ) | 8,491 | |||||
| Adjusted | $ | 275,177 | **** | $ | 153,749 | **** | $ | 121,428 | **** |
| Adjusted as a percent of sales | 29.6 | % | 16.5 | % | 13.1 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $7,601 is non-cash. |
|---|---|
| (b) | Charge represents a further expense of $1,834 associated with a sales contract that was initially reserved for<br>in 2017. |
| --- | --- |
| (c) | Charge represents a further $1,173 non-cash write-down of inventory<br>associated with a customer sales contract that was originally determined to be uncollectible in 2020. |
| --- | --- |
| (d) | Charge represents a $2,917 non-cash write-down of a licensing<br>agreement. |
| --- | --- |
| (e) | Charges represent costs associated with a terminated acquisition.<br> |
| --- | --- |
13
| Third Quarter and Year-to-Date 2024 - Segment Results | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions, comparison vs. 2023 third quarter and year-to-date,<br>unaudited) | ||||||||||||||||||||
| FPD | FCD | |||||||||||||||||||
| 3rd Qtr | YTD | 3rd Qtr | YTD | |||||||||||||||||
| Bookings | $ | 886.6 | $ | 2,488.6 | $ | 318.4 | $ | 1,008.3 | ||||||||||||
| - vs. prior year | 151.9 | 20.7 | % | 266.3 | 12.0 | % | -12.1 | -3.7 | % | -13.8 | -1.4 | % | ||||||||
| - on constant currency | 158.8 | 21.6 | % | 279.6 | 12.6 | % | -12.3 | -3.7 | % | -11.0 | -1.1 | % | ||||||||
| Sales | $ | 782.1 | $ | 2,363.7 | $ | 353.1 | $ | 1,021.4 | ||||||||||||
| - vs. prior year | 15.9 | 2.1 | % | 132.0 | 5.9 | % | 22.4 | 6.8 | % | 91.4 | 9.8 | % | ||||||||
| - on constant currency | 22.3 | 2.9 | % | 140.4 | 6.3 | % | 21.1 | 6.4 | % | 92.4 | 9.9 | % | ||||||||
| Gross Profit | $ | 253.2 | $ | 761.3 | $ | 106.5 | $ | 305.5 | ||||||||||||
| - vs. prior year | 14.9 | % | 13.9 | % | 9.1 | % | 12.8 | % | ||||||||||||
| Gross Margin (% of sales) | 32.4 | % | 32.2 | % | 30.2 | % | 29.9 | % | ||||||||||||
| - vs. prior year (in basis points) | 360 bps | 220 bps | 70 bps | 80 bps | ||||||||||||||||
| Operating Income | $ | 109.3 | $ | 351.1 | $ | 46.7 | $ | 113.7 | ||||||||||||
| - vs. prior year | 31.0 | 39.6 | % | 95.8 | 37.5 | % | 3.2 | 7.4 | % | 15.5 | 15.8 | % | ||||||||
| - on constant currency | 32.7 | 41.8 | % | 99.3 | 38.9 | % | 3.4 | 7.6 | % | 16.4 | 16.7 | % | ||||||||
| Operating Margin (% of sales) | 14.0 | % | 14.9 | % | 13.2 | % | 11.1 | % | ||||||||||||
| - vs. prior year (in basis points) | 380 bps | 350 bps | 0 bps | 50 bps | ||||||||||||||||
| Adjusted Operating Income * | $ | 128.1 | $ | 380.7 | $ | 49.4 | $ | 131.5 | ||||||||||||
| - vs. prior year | 33.8 | 35.8 | % | 100.0 | 35.6 | % | 0.6 | 1.2 | % | 10.1 | 8.3 | % | ||||||||
| - on constant currency | 35.5 | 37.7 | % | 103.5 | 36.9 | % | 0.8 | 1.5 | % | 11.0 | 9.1 | % | ||||||||
| Adj. Oper. Margin (% of sales)* | 16.4 | % | 16.1 | % | 14.0 | % | 12.9 | % | ||||||||||||
| - vs. prior year (in basis points) | 410 bps | 350 bps | (70) bps | (20) bps | ||||||||||||||||
| Backlog | $ | 1,982.8 | $ | 814.4 | ||||||||||||||||
| * | Adjusted Operating Income and Adjusted Operating Margin exclude realignment charges and other specific discrete<br>items | |||||||||||||||||||
| --- | --- |
14
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31, | |||||
|---|---|---|---|---|---|
| (Amounts in thousands, except par value) | 2023 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 611,745 | $ | 545,678 | ||
| Accounts receivable, net of allowance for expected credit losses of 80,757 and 80,013,<br>respectively | 971,261 | 881,869 | |||
| Contract assets, net of allowance for expected credit losses of 4,808 and 4,993,<br>respectively | 299,421 | 280,228 | |||
| Inventories | 862,477 | 879,937 | |||
| Prepaid expenses and other | 124,883 | 116,065 | |||
| Total current assets | 2,869,787 | 2,703,777 | |||
| Property, plant and equipment, net of accumulated depreciation of 1,184,833 and 1,158,451,<br>respectively | 502,430 | 506,158 | |||
| Operating lease<br>right-of-use assets, net | 170,395 | 156,430 | |||
| Goodwill | 1,188,609 | 1,182,225 | |||
| Deferred taxes | 216,241 | 218,358 | |||
| Other intangible assets, net | 117,999 | 122,248 | |||
| Other assets, net of allowance for expected credit losses of 65,989 and 66,864,<br>respectively | 209,097 | 219,523 | |||
| Total assets | 5,274,558 | $ | 5,108,719 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | 572,776 | $ | 547,824 | ||
| Accrued liabilities | 472,454 | 504,430 | |||
| Contract liabilities | 294,222 | 287,697 | |||
| Debt due within one year | 66,919 | 66,243 | |||
| Operating lease liabilities | 33,995 | 32,382 | |||
| Total current liabilities | 1,440,366 | 1,438,576 | |||
| Long-term debt due after one year | 1,172,771 | 1,167,307 | |||
| Operating lease liabilities | 158,216 | 138,665 | |||
| Retirement obligations and other liabilities | 397,684 | 389,120 | |||
| Shareholders’ equity: | |||||
| Common shares, 1.25 par value | 220,991 | 220,991 | |||
| Shares authorized – 305,000 | |||||
| Shares issued – 176,793 and 176,793, respectively | |||||
| Capital in excess of par value | 496,673 | 506,525 | |||
| Retained earnings | 3,976,016 | 3,854,717 | |||
| Treasury shares, at cost – 45,701 and 45,885 shares, respectively | (2,008,361 | ) | (2,014,474 | ) | |
| Deferred compensation obligation | 8,076 | 7,942 | |||
| Accumulated other comprehensive loss | (639,100 | ) | (639,601 | ) | |
| Total Flowserve Corporation shareholders’ equity | 2,054,295 | 1,936,100 | |||
| Noncontrolling interests | 51,226 | 38,951 | |||
| Total equity | 2,105,521 | 1,975,051 | |||
| Total liabilities and equity | 5,274,558 | $ | 5,108,719 |
All values are in US Dollars.
15
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands) | 2024 | 2023 | ||||
| Cash flows – Operating activities: | ||||||
| Net earnings (loss), including noncontrolling interests | $ | 217,716 | $ | 137,744 | ||
| Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating<br>activities: | ||||||
| Depreciation | 56,765 | 55,292 | ||||
| Amortization of intangible and other assets | 6,482 | 7,782 | ||||
| Loss on sale of business | 12,981 | — | ||||
| Stock-based compensation | 24,608 | 22,127 | ||||
| Foreign currency, asset write downs and other non-cash<br>adjustments | 11,580 | (11,827 | ) | |||
| Change in assets and liabilities: | ||||||
| Accounts receivable, net | (96,402 | ) | 1,524 | |||
| Inventories | 2,944 | (114,596 | ) | |||
| Contract assets, net | (23,293 | ) | (10,239 | ) | ||
| Prepaid expenses and other, net | 3,505 | (6,727 | ) | |||
| Accounts payable | 24,654 | 1,910 | ||||
| Contract liabilities | 8,466 | 15,879 | ||||
| Accrued liabilities | (33,850 | ) | 21,429 | |||
| Retirement obligations and other liabilities | 8,696 | 38,838 | ||||
| Net deferred taxes | 3,108 | (27,996 | ) | |||
| Net cash flows provided (used) by operating activities | 227,960 | 131,140 | ||||
| Cash flows – Investing activities: | ||||||
| Capital expenditures | (52,169 | ) | (47,544 | ) | ||
| Payments for disposition of business | (2,555 | ) | — | |||
| Other | 612 | (833 | ) | |||
| Net cash flows provided (used) by investing activities | (54,112 | ) | (48,377 | ) | ||
| Cash flows – Financing activities: | ||||||
| Payments on term loan | (45,000 | ) | (30,000 | ) | ||
| Proceeds under revolving credit facility | 100,000 | 230,000 | ||||
| Payments under revolving credit facility | (50,000 | ) | (145,000 | ) | ||
| Proceeds under other financing arrangements | 1,001 | 242 | ||||
| Payments under other financing arrangements | (784 | ) | (2,098 | ) | ||
| Repurchases of common shares | (20,070 | ) | — | |||
| Payments related to tax withholding for stock-based compensation | (9,407 | ) | (6,203 | ) | ||
| Payments of dividends | (82,848 | ) | (78,712 | ) | ||
| Other | (272 | ) | (320 | ) | ||
| Net cash flows provided (used) by financing activities | (107,380 | ) | (32,091 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents | (401 | ) | (5,185 | ) | ||
| Net change in cash and cash equivalents | 66,067 | 45,487 | ||||
| Cash and cash equivalents at beginning of period | 545,678 | 434,971 | ||||
| Cash and cash equivalents at end of period | $ | 611,745 | $ | 480,458 |
16
About Flowserve
Flowserve Corp. is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 50 countries, the Company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company’s Web site at www.flowserve.com.
Safe Harbor Statement: This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as, “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition.
The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the following: economic, political and other risks associated with our international operations, including military actions, trade embargoes, epidemics or pandemics or changes to tariffs or trade agreements that could affect customer markets, particularly North African, Latin American, Asian and Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations; any continued volatile regional and global economic conditions resulting from the COVID-19 pandemic on our business and operations; global supply chain disruptions and the current inflationary environment could adversely affect the efficiency of our manufacturing and increase the cost of providing our products to customers; a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins; changes in global economic conditions and the potential for unexpected cancellations or delays of customer orders in our reported backlog; our dependence on our customers’ ability to make required capital investment and maintenance expenditures; if we are not able to successfully execute and realize the expected financial benefits from any restructuring and realignment initiatives, our business could be adversely affected; the substantial dependence of our sales on the success of the oil and gas, chemical, power generation and water management industries; the adverse impact of volatile raw materials prices on our products and operating margins; increased aging and slower collection of receivables, particularly in Latin America and other emerging markets; our exposure to fluctuations in foreign currency exchange rates, including in hyperinflationary countries such as Venezuela and Argentina; potential adverse consequences resulting from litigation to which we are a party, such as litigation involving asbestos-containing material claims; expectations regarding acquisitions and the integration of acquired businesses; the potential adverse impact of an impairment in the carrying value of goodwill or other intangible assets; our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations; the highly competitive nature of the markets in which we operate; environmental compliance costs and liabilities; potential work stoppages and other labor matters; access to public and private sources of debt financing; our inability to protect our intellectual property in the U.S., as well as in foreign countries; obligations under our defined benefit pension plans; our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud; the recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results; our information technology infrastructure could be subject to service interruptions, data corruption, cyber-based attacks or network security breaches, which could disrupt our business operations and result in the loss of critical and confidential information; ineffective internal controls could impact the accuracy and timely reporting of our business and financial results; and other factors described from time to time in our filings with the Securities and Exchange Commission.
All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.
17
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company’s performance. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.
Flowserve Contacts
Investor Contacts:
| Brian Ezzell, Vice President, Investor Relations, Treasurer & Corporate<br>Finance | (469) 420-3222 |
|---|---|
| Tarek Zeni, Director, Investor Relations | (469) 420-4045 |
Media Contact:
| Wes Warnock, Vice President, Marketing, Communications & Public<br>Affairs | (972) 443-6900 |
|---|
18