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): February 18, 2025
FLOWSERVE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
| New York | 1-13179 | 31-0267900 |
|---|---|---|
| (State or Other Jurisdiction<br> <br>of Incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <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> <br>Symbol(s) | Name of each exchange<br> <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 February 18, 2025, Flowserve Corporation, a New York corporation (the “Company”), issued a press release announcing financial results for the fourth quarter and full year ended December 31, 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 February 19, 2025, the Company will make a presentation about its financial and operating results for the fourth 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 February 18, 2025. |
| 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: February 18, 2025 | By: | /s/ Amy B. Schwetz |
| Amy B. Schwetz | ||
| Senior Vice President, Chief Financial Officer |
EX-99.1
Exhibit 99.1
Flowserve Corporation Reports Fourth Quarter and Full-Year Results
3D Strategy and Flowserve Business System Deliver Sales and Earnings Growth
DALLAS, February 18, 2025 – Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, reported its financial results for the fourth quarter and full year ended December 31, 2024.
Highlights (unaudited):
| • | Fourth quarter bookings of $1.2 billion, including $618 million of aftermarket activity<br> |
|---|---|
| • | Power bookings increased more than 40% year-over-year, with over $110 million in nuclear awards during the<br>fourth quarter |
| --- | --- |
| • | Gross margin and adjusted^1^ gross margin^2^ of 31.5% and 32.8%, respectively, increased 240 and 300 basis points versus the prior year period |
| --- | --- |
| • | Operating income and adjusted operating income^3^ of<br>$125 million and $149 million, respectively, an increase of 14% and 22% compared to last year |
| --- | --- |
| • | Operating cash flow of $197 million driven by strong earnings and working capital improvements<br> |
| --- | --- |
| • | Initiated full-year 2025 guidance^4^, including organic sales<br>growth of 3% to 5% and adjusted Earnings Per Share (EPS) of $3.10 to $3.30, which at the midpoint, represents a 22% increase versus full-year 2024 adjusted EPS^5^ |
| --- | --- |
Management Commentary*:*
“We made significant progress throughout 2024, launching the Flowserve Business System and leveraging our 3D strategy to drive solid top-line growth, expand margins, increase adjusted earnings, and deliver strong cash flow,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “I am grateful for the dedication and effort of our associates who are improving our execution and positioning Flowserve for continued near-term and long-term growth.”
Rowe continued, “Activity across our markets remains robust as customers leverage our capabilities to address ongoing demand, improve efficiency, and advance decarbonization investments. We enter 2025 with strong momentum, which we expect to build on through enhanced operational execution and our 80-20 complexity reduction efforts. With these levers, we are well-positioned to continue creating long-term value for our customers, shareholders, and associates.”
Key Figures (unaudited):
| (dollars in millions, except per share) | 2024 Q4 | 2023 Q4 | Change | 2024 | 2023 | Change | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Backlog | $ | 2,789.6 | $ | 2,695.1 | 3.5 | % | $ | 2,789.6 | $ | 2,695.1 | 3.5 | % | ||||||
| Bookings | $ | 1,175.3 | $ | 1,043.6 | 12.6 | % | $ | 4,660.8 | $ | 4,271.8 | 9.1 | % | ||||||
| Original Equipment | $ | 557.2 | $ | 490.3 | 13.6 | % | $ | 2,238.4 | $ | 1,995.1 | 12.2 | % | ||||||
| Aftermarket | $ | 618.1 | $ | 553.3 | 11.7 | % | $ | 2,422.4 | $ | 2,276.7 | 6.4 | % | ||||||
| Sales^6^ | $ | 1,180.3 | $ | 1,165.2 | 1.3 | % | $ | 4,557.8 | $ | 4,320.6 | 5.5 | % | ||||||
| Organic | (90) bps | 510 bps | ||||||||||||||||
| Acquisitions | 320 bps | 90 bps | ||||||||||||||||
| Foreign Exchange | (100) bps | (50) bps | ||||||||||||||||
| Operating Margin | 10.6 | % | 9.4 | % | 120 bps | 10.1 | % | 7.7 | % | 240 bps | ||||||||
| Adjusted Operating Margin^3^ | 12.6 | % | 10.5 | % | 210 bps | 11.8 | % | 9.5 | % | 230 bps | ||||||||
| Earnings Per Share | $ | 0.59 | $ | 0.47 | 25.5 | % | $ | 2.14 | $ | 1.42 | 50.7 | % | ||||||
| Adjusted Earnings Per Share | $ | 0.70 | $ | 0.68 | 2.9 | % | $ | 2.63 | $ | 2.10 | 25.2 | % | ||||||
| Cash From Operations | $ | 197.3 | $ | 194.6 | 1.4 | % | $ | 425.3 | $ | 325.8 | 30.5 | % |
2025 Guidance:
| Target range | |
|---|---|
| Organic sales growth | +3% to +5% |
| Impact from acquisitions | Approx. +300 bps |
| Impact from foreign exchange translation | Approx. (100 bps) |
| Total sales growth | +5% to +7% |
| Adjusted EPS | $3.10 to $3.30 |
| Net interest expense | Approx. $70 million |
| Adjusted tax rate | Approx. 21% |
| Capital expenditures | $80 to $90 million |
Excluding sales, Flowserve provides guidance only on a non-GAAP basis due to the inherent and increasing difficulty and unreasonable effort required to forecast certain amounts that would be included in GAAP earnings. This includes, but is not limited to, items such as foreign currency fluctuations, realignment expenses, impairments, and discrete tax events. As a result, we have not provided a reconciliation to the most comparable GAAP financial measures for these forward-looking non-GAAP measures.
2
Authorized Dividend:
Flowserve’s Board of Directors authorized a quarterly cash dividend of $0.21 per share on the Company’s outstanding shares of common stock. The dividend is payable on April 11, 2025, to shareholders of record as of the close of business on March 28, 2025. While Flowserve currently intends to pay regular quarterly cash dividends for the foreseeable future, any future dividends, at this $0.21 per share rate or otherwise, will be reviewed individually and declared by the Board at its discretion.
Webcast and Conference Call Instructions:
Flowserve will host its conference call to discuss fourth quarter results on Wednesday, February 19, at 10:00 a.m. Eastern Time. The call can be accessed by shareholders and other interested parties on Flowserve’s Investors page.
Footnotes (pages1-2)
| ^1^ | 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. |
|---|---|
| ^2^ | Adjusted gross margin is calculated by dividing adjusted gross profit by sales. Adjusted gross profit is<br>derived by excluding the adjusted items. |
| --- | --- |
| ^3^ | Adjusted operating margin is calculated by dividing adjusted operating income by sales. Adjusted operating<br>income is derived by excluding the adjusted items. |
| --- | --- |
| ^4^ | Adjusted 2025 EPS includes expected 16 cent contribution from MOGAS operations (inclusive of $7 million<br>cost synergy benefit) and excludes potential realignment expenses, below-the-line foreign currency effects, and certain other discrete items which may arise during the<br>year and utilizes prevailing FX rates and approximately 132 million fully diluted shares. |
| --- | --- |
| ^5^ | Adjusted 2024 EPS excludes realignment expenses, the impact from other specific discrete and below-the-line foreign currency effects and utilizes the then-applicable FX rates and approximately 132 million fully diluted shares. |
| --- | --- |
| ^6^ | Organic is defined as the change in sales, as defined by U.S. GAAP, excluding the impacts of currency<br>translation and acquisitions. The impact of currency translation is calculated by translating current year results on a monthly basis at prior year exchange rates for the same period. |
| --- | --- |
3
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands, except per share data) | 2024 | 2023 | ||||
| Sales | $ | 1,180,348 | $ | 1,165,179 | ||
| Cost of sales | (808,234 | ) | (825,635 | ) | ||
| Gross profit | 372,114 | 339,544 | ||||
| Selling, general and administrative expense | (251,966 | ) | (234,744 | ) | ||
| Net earnings from affiliates | 4,557 | 4,663 | ||||
| Operating income | 124,705 | 109,463 | ||||
| Interest expense | (20,481 | ) | (16,886 | ) | ||
| Interest income | 1,625 | 1,457 | ||||
| Other income (expense), net | (137 | ) | (22,599 | ) | ||
| Earnings before income taxes | 105,712 | 71,435 | ||||
| (Provision for) benefit from income taxes | (22,202 | ) | (3,991 | ) | ||
| Net earnings, including noncontrolling interests | 83,510 | 67,444 | ||||
| Less: Net earnings attributable to noncontrolling interests | (5,969 | ) | (4,827 | ) | ||
| Net earnings attributable to Flowserve Corporation | $ | 77,541 | $ | 62,617 | ||
| Net earnings per share attributable to Flowserve Corporation common shareholders: | ||||||
| Basic | $ | 0.59 | $ | 0.48 | ||
| Diluted | 0.59 | 0.47 | ||||
| Weighted average shares – basic | 131,393 | 131,184 | ||||
| Weighted average shares – diluted | 132,395 | 132,132 |
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 December 31, 2024 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | OtherIncome(Expense),Net | Provision For(Benefit From)Income Taxes | Net Earnings(Loss) | EffectiveTax Rate | DilutedEPS | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 372,114 | **** | $ | 251,966 | **** | $ | 124,705 | **** | $ | (138) | **** | $ | 22,202 | **** | $ | 77,541 | **** | **** | 21.0 | % | **** | 0.59 | **** |
| Reported as a percent of sales | 31.5 | % | 21.3 | % | 10.6 | % | 0.0 | % | 1.9 | % | 6.6 | % | ||||||||||||
| Realignment charges (a) | 11,569 | (1,570 | ) | 13,139 | — | 2,849 | 10,290 | 21.7 | % | 0.08 | ||||||||||||||
| Acquisition related (b) | — | (7,150 | ) | 7,150 | — | 1,682 | 5,468 | 23.5 | % | 0.04 | ||||||||||||||
| Purchase accounting step-up and intangible asset<br>amortization (c) | 3,067 | (1,033 | ) | 4,100 | — | 1,300 | 2,800 | 31.7 | % | 0.02 | ||||||||||||||
| Below-the-line<br>foreign exchange impacts (d) | — | — | — | (4,370 | ) | (1,423 | ) | (2,947 | ) | 32.6 | % | (0.02 | ) | |||||||||||
| Adjusted | $ | 386,750 | **** | $ | 242,213 | **** | $ | 149,094 | **** | $ | (4,508 | ) | $ | 26,610 | **** | $ | 93,152 | **** | **** | 21.2 | % | **** | 0.70 | **** |
| Adjusted as a percent of sales | 32.8 | % | 20.5 | % | 12.6 | % | -0.4 | % | 2.3 | % | 7.9 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $8,600 is non-cash. | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (b) | Charge represents acquisition and integration related costs associated with the MOGAS acquisition.<br> | |||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||
| (c) | Charge represents amortization of step-up in value of acquired<br>inventories and acquisition related intangible assets associated with the MOGAS acquisition. | |||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||
| (d) | 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. | |||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||
| Three Months Ended December 31, 2023 | Gross Profit | Selling,General &AdministrativeExpense | OperatingIncome | OtherIncome(Expense),Net | Provision For(Benefit From)Income Taxes | Net Earnings(Loss) | Effective<br>Tax Rate | DilutedEPS | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Reported | $ | 339,544 | **** | $ | 234,744 | **** | $ | 109,463 | **** | $ | (22,599 | ) | $ | 3,991 | **** | $ | 62,617 | **** | **** | 5.6 | % | **** | 0.47 | **** |
| Reported as a percent of sales | 29.1 | % | 20.1 | % | 9.4 | % | -1.9 | % | 0.3 | % | 5.4 | % | ||||||||||||
| Realignment charges (a) | 9,464 | (5,949 | ) | 15,413 | — | 4,534 | 10,879 | 29.4 | % | 0.08 | ||||||||||||||
| Discrete asset write-downs (b)(c) | (1,254 | ) | — | (1,254 | ) | 2,000 | 94 | 652 | 12.6 | % | 0.01 | |||||||||||||
| Acquisition related (d) | — | 1,244 | (1,244 | ) | — | (293 | ) | (951 | ) | 23.6 | % | (0.01 | ) | |||||||||||
| Below-the-line foreign exchange impacts (e) | — | — | — | 16,764 | (274 | ) | 17,038 | -1.6 | % | 0.13 | ||||||||||||||
| Adjusted | $ | 347,754 | **** | $ | 230,039 | **** | $ | 122,378 | **** | $ | (3,835 | ) | $ | 8,052 | **** | $ | 90,235 | **** | **** | 7.8 | % | **** | 0.68 | **** |
| Adjusted as a percent of sales | 29.8 | % | 19.7 | % | 10.5 | % | -0.3 | % | 0.7 | % | 7.7 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $2,100 is non-cash. |
|---|---|
| (b) | Includes reversals of expenses that were adjusted for Non-GAAP measures<br>in previous periods of $1,254. |
| --- | --- |
| (c) | Charge represents a non-cash asset write-down of $2,000 associated with<br>the impairment of an equity investment. |
| --- | --- |
| (d) | Represents reversal of costs associated with a terminated acquisition that were adjusted for Non-GAAP measures in previous periods. |
| --- | --- |
| (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
SEGMENT INFORMATION
(Unaudited)
| FLOWSERVE PUMPS DIVISION | Three Months Ended December 31, | |||||
|---|---|---|---|---|---|---|
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 816.4 | $ | 722.2 | ||
| Sales | 794.9 | 832.8 | ||||
| Gross profit | 255.7 | 238.2 | ||||
| Gross profit margin | 32.2 | % | 28.6 | % | ||
| SG&A | 131.4 | 149.4 | ||||
| Segment operating income | 129.1 | 93.5 | ||||
| Segment operating income as a percentage of sales | 16.2 | % | 11.2 | % | ||
| FLOW CONTROL DIVISION | Three Months Ended December 31, | |||||
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 363.4 | $ | 326.9 | ||
| Sales | 387.9 | 336.0 | ||||
| Gross profit | 118.5 | 101.9 | ||||
| Gross profit margin | 30.5 | % | 30.3 | % | ||
| SG&A | 73.9 | 52.1 | ||||
| Segment operating income | 44.6 | 49.8 | ||||
| Segment operating income as a percentage of sales | 11.5 | % | 14.8 | % |
6
Segment Reconciliation of Non-GAAP Financial Measures to the MostDirectly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands)
| Flowserve Pumps Division | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended December 31,2024 | GrossProfit | Selling,General &<br>Administrative<br>Expense | Operating<br>Income | ||||||
| Reported | $ | 255,710 | **** | $ | 131,402 | **** | $ | 129,069 | **** |
| Reported as a percent of sales | 32.2 | % | 16.5 | % | 16.2 | % | |||
| Realignment charges (a) | 9,890 | (41 | ) | 9,931 | |||||
| Adjusted | $ | 265,600 | **** | $ | 131,361 | **** | $ | 139,000 | **** |
| Adjusted as a percent of sales | 33.4 | % | 16.5 | % | 17.5 | % | |||
| Flow Control Division | |||||||||
| Three Months Ended December 31,2024 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
| Reported | $ | 118,503 | **** | $ | 73,859 | **** | $ | 44,592 | **** |
| Reported as a percent of sales | 30.5 | % | 19.0 | % | 11.5 | % | |||
| Realignment charges (a) | 1,679 | (1,655 | ) | 3,334 | |||||
| Acquisition related (b) | — | (7,150 | ) | 7,150 | |||||
| Purchase accounting step-up and intangible asset<br>amortization (c) | 3,067 | (1,033 | ) | 4,100 | |||||
| Adjusted | $ | 123,249 | **** | $ | 64,021 | **** | $ | 59,176 | **** |
| Adjusted as a percent of sales | 31.8 | % | 16.5 | % | 15.3 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $8,600 is non-cash. | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (b) | Charge represents acquisition and integration-related costs associated with the MOGAS acquisition.<br> | ||||||||
| --- | --- | ||||||||
| (c) | Charge represents amortization of step-up in value of acquired<br>inventories and acquisition related intangible assets associated with the MOGAS acquisition.<br> | ||||||||
| --- | --- | ||||||||
| Three Months Ended December 31,2023 | GrossProfit | Selling, General<br>&AdministrativeExpense | OperatingIncome | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Reported | $ | 238,213 | **** | $ | 149,354 | **** | $ | 93,522 | **** |
| Reported as a percent of sales | 28.6 | % | 17.9 | % | 11.2 | % | |||
| Realignment charges (a) | 3,313 | (2,537 | ) | 5,850 | |||||
| Discrete asset write-downs (b) | (1,254 | ) | — | (1,254 | ) | ||||
| Adjusted | $ | 240,272 | **** | $ | 146,817 | **** | $ | 98,118 | **** |
| Adjusted as a percent of sales | 28.9 | % | 17.6 | % | 11.8 | % | |||
| Flow Control Division | |||||||||
| Three Months Ended December 31,2023 | GrossProfit | Selling, General<br>&AdministrativeExpense | OperatingIncome | ||||||
| Reported | $ | 101,894 | **** | $ | 52,056 | **** | $ | 49,838 | **** |
| Reported as a percent of sales | 30.3 | % | 15.5 | % | 14.8 | % | |||
| Realignment charges (a) | 6,313 | (915 | ) | 7,228 | |||||
| Acquisition related (c) | — | 1,244 | (1,244 | ) | |||||
| Adjusted | $ | 108,207 | **** | $ | 52,385 | **** | $ | 55,822 | **** |
| Adjusted as a percent of sales | 32.2 | % | 15.6 | % | 16.6 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $2,100 is non-cash. |
|---|---|
| (b) | Represents reversals of expenses that were adjusted for Non-GAAP<br>measures in previous periods. |
| --- | --- |
| (c) | Represents reversal of costs associated with a terminated acquisition that were adjusted for Non-GAAP measures in previous periods. |
| --- | --- |
7
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Year Ended December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Amounts in thousands, except per share data) | 2024 | 2023 | 2022 | ||||||
| Sales | $ | 4,557,806 | $ | 4,320,577 | $ | 3,615,120 | |||
| Cost of sales | (3,123,560 | ) | (3,043,749 | ) | (2,620,825 | ) | |||
| Gross profit | 1,434,246 | 1,276,828 | 994,295 | ||||||
| Selling, general and administrative expense | (978,037 | ) | (961,169 | ) | (815,545 | ) | |||
| Loss on sale of business | (12,981 | ) | — | — | |||||
| Net earnings from affiliates | 19,051 | 17,894 | 18,469 | ||||||
| Operating income | 462,279 | 333,553 | 197,219 | ||||||
| Interest expense | (69,301 | ) | (66,924 | ) | (46,247 | ) | |||
| Interest income | 5,371 | 6,991 | 3,963 | ||||||
| Other income (expense), net | (12,194 | ) | (49,870 | ) | (559 | ) | |||
| Earnings before income taxes | 386,155 | 223,750 | 154,376 | ||||||
| (Provision for) benefit from income taxes | (84,929 | ) | (18,562 | ) | 43,639 | ||||
| Net earnings, including noncontrolling interests | 301,226 | 205,188 | 198,015 | ||||||
| Less: Net earnings attributable to noncontrolling interests | (18,467 | ) | (18,445 | ) | (9,326 | ) | |||
| Net earnings attributable to Flowserve Corporation | $ | 282,759 | $ | 186,743 | $ | 188,689 | |||
| Net earnings per share attributable to Flowserve Corporation common shareholders: | |||||||||
| Basic | $ | 2.15 | $ | 1.42 | $ | 1.44 | |||
| Diluted | 2.14 | 1.42 | 1.44 | ||||||
| Weighted average shares – basic | 131,488 | 131,117 | 130,630 | ||||||
| Weighted average shares – diluted | 132,356 | 131,931 | 131,315 |
8
Consolidated Reconciliation of Non-GAAP Financial Measures to theMost Directly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands, except per share data)
| Twelve Months EndedDecember 31, 2024 | Gross Profit | Selling,General &AdministrativeExpense | Loss onSale ofBusiness | OperatingIncome | Other Income(Expense), Net | Provision For(BenefitFrom) IncomeTaxes | NetEarnings(Loss) | EffectiveTaxRate | DilutedEPS | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 1,434,246 | **** | $ | 978,037 | **** | $ | 12,981 | **** | $ | 462,279 | **** | $ | (12,194 | ) | $ | 84,929 | **** | $ | 282,759 | **** | **** | 22.0 | % | **** | 2.14 | **** |
| Reported as a percent of sales | 31.5 | % | 21.5 | % | 0.3 | % | 10.1 | % | -0.3 | % | 1.9 | % | 6.2 | % | |||||||||||||
| Realignment charges (a) | 31,576 | (4,939 | ) | (12,981 | ) | 49,496 | — | 4,884 | 44,612 | 9.9 | % | 0.34 | |||||||||||||||
| Discrete items (b)(c)(d) | 2,700 | (7,500 | ) | — | 10,200 | — | 2,869 | 7,331 | 28.1 | % | 0.06 | ||||||||||||||||
| Acquisition related (e) | — | (9,944 | ) | — | 9,944 | — | 2,340 | 7,604 | 23.5 | % | 0.06 | ||||||||||||||||
| Discrete asset write-downs (f)(g) | — | (1,795 | ) | — | 1,795 | 3,567 | 1,342 | 4,020 | 25.0 | % | 0.03 | ||||||||||||||||
| Purchase accounting step-up and intangible asset<br>amortization (h) | 3,067 | (1,033 | ) | — | 4,100 | — | 1,300 | 2,800 | 31.7 | % | 0.02 | ||||||||||||||||
| Below-the-line<br>foreign exchange impacts (i) | — | — | — | — | (2,302 | ) | (1,912 | ) | (390 | ) | 83.1 | % | (0.00 | ) | |||||||||||||
| Adjusted | $ | 1,471,589 | **** | $ | 952,826 | **** | $ | — | **** | $ | 537,814 | **** | $ | (10,929 | ) | $ | 95,752 | **** | $ | 348,736 | **** | **** | 20.7 | % | **** | 2.63 | **** |
| Adjusted as a percent of sales | 32.3 | % | 20.9 | % | 0.0 | % | 11.8 | % | -0.2 | % | 2.1 | % | 7.7 | % | |||||||||||||
| Note: | Amounts may not calculate due to rounding | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $33,700 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 and integration related costs associated with the MOGAS acquisition.<br> | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (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) | Charge represents amortization of step-up in value of acquired<br>inventories and acquisition related intangible assets associated with the MOGAS acquisition. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (i) | 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. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| Twelve Months EndedDecember 31, 2023 | Gross Profit | Selling,General &AdministrativeExpense | OperatingIncome | OtherIncome(Expense),Net | Provision For(Benefit From)Income Taxes | Net EarningsAttributable toNoncontrollingInterests | NetEarnings(Loss) | EffectiveTax Rate | DilutedEPS | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Reported | $ | 1,276,828 | **** | $ | 961,169 | **** | $ | 333,553 | **** | $ | (49,870 | ) | $ | 18,562 | **** | $ | 18,445 | **** | $ | 186,743 | **** | **** | 8.3 | % | **** | 1.42 | **** |
| Reported as a percent of sales | 29.6 | % | 22.2 | % | 7.7 | % | -1.2 | % | 0.4 | % | 0.4 | % | 4.3 | % | |||||||||||||
| Realignment charges (a) | 21,012 | (45,025 | ) | 66,037 | — | 14,949 | — | 51,088 | 22.6 | % | 0.39 | ||||||||||||||||
| Discrete asset write-downs (b)(c)(d)(e) | 715 | (3,955 | ) | 4,670 | 2,000 | 1,611 | — | 5,059 | 24.2 | % | 0.04 | ||||||||||||||||
| Acquisition related (f) | — | (7,247 | ) | 7,247 | — | 1,704 | — | 5,543 | 23.5 | % | 0.04 | ||||||||||||||||
| Below-the-line<br>foreign exchange impacts (g) | — | — | — | 41,092 | 2,395 | — | 38,697 | 5.8 | % | 0.29 | |||||||||||||||||
| Correction of prior period errors (h) | — | — | — | — | — | (3,559 | ) | 3,559 | 0.0 | % | 0.03 | ||||||||||||||||
| Discrete tax benefit (i) | — | — | — | — | 13,000 | — | (13,000 | ) | 0.0 | % | (0.10 | ) | |||||||||||||||
| Adjusted | $ | 1,298,555 | **** | $ | 904,942 | **** | $ | 411,507 | **** | $ | (6,778 | ) | $ | 52,221 | **** | $ | 14,886 | **** | $ | 277,689 | **** | **** | 15.1 | % | **** | 2.10 | **** |
| Adjusted as a percent of sales | 30.1 | % | 20.9 | % | 9.5 | % | -0.2 | % | 1.2 | % | 0.3 | % | 6.4 | % | |||||||||||||
| Note: | Amounts may not calculate due to rounding | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $9,701 is non-cash. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (b) | 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. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (c) | Includes reversals of expenses that were adjusted for Non-GAAP measures<br>in previous periods of $81. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (d) | Charge represents a $2,917 non-cash write-down of a licensing<br>agreement. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (e) | Charge represents a non-cash asset write-down of $2,000 associated with<br>the impairment of an equity investment. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (f) | Charges represent costs associated with a terminated acquisition. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (g) | 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. | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (h) | Represents the amount to correct the cumulative impact of immaterial prior period errors.<br> | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| (i) | 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 on Non-GAAP measures in 2015. | ||||||||||||||||||||||||||
| --- | --- |
9
SEGMENT INFORMATION
(Unaudited)
| FLOWSERVE PUMPS DIVISION | Year Ended December 31, | |||||
|---|---|---|---|---|---|---|
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 3,304.3 | $ | 2,941.2 | ||
| Sales | 3,158.6 | 3,064.5 | ||||
| Gross profit | 1,017.0 | 906.8 | ||||
| Gross profit margin | 32.2 | % | 29.6 | % | ||
| SG&A | 556.2 | 575.8 | ||||
| Segment operating income | 480.2 | 348.9 | ||||
| Segment operating income as a percentage of sales | 15.2 | % | 11.4 | % | ||
| FLOW CONTROL DIVISION | Year Ended December 31, | |||||
| (Amounts in millions, except percentages) | 2024 | 2023 | ||||
| Bookings | $ | 1,370.7 | $ | 1,345.9 | ||
| Sales | 1,409.3 | 1,266.0 | ||||
| Gross profit | 424.0 | 372.8 | ||||
| Gross profit margin | 30.1 | % | 29.4 | % | ||
| SG&A | 252.7 | 224.8 | ||||
| Loss on sale of business | (13.0 | ) | — | |||
| Segment operating income | 158.3 | 148.0 | ||||
| Segment operating income as a percentage of sales | 11.2 | % | 11.7 | % |
10
Segment Reconciliation of Non-GAAP Financial Measures to the MostDirectly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands)
Flowserve Pumps Division
| Twelve Months EndedDecember 31, 2024 | Gross Profit | Selling, General&AdministrativeExpense | OperatingIncome | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 1,017,048 | **** | $ | 556,225 | **** | $ | 480,216 | **** |
| Reported as a percent of sales | 32.2 | % | 17.6 | % | 15.2 | % | |||
| Realignment charges (a) | 30,727 | (1,078 | ) | 31,805 | |||||
| Discrete items (b)(c)(d) | 1,700 | (6,000 | ) | 7,700 | |||||
| Adjusted | $ | 1,049,475 | **** | $ | 549,147 | **** | $ | 519,721 | **** |
| Adjusted as a percent of sales | 33.2 | % | 17.4 | % | 16.5 | % |
Flow Control Division
| Twelve MonthsEnded December 31,2024 | GrossProfit | Selling, General&AdministrativeExpense | Loss onSale ofBusiness | OperatingIncome | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 423,973 | **** | $ | 252,675 | **** | $ | 12,981 | **** | $ | 158,265 | **** |
| Reported as a percent of sales | 30.1 | % | 17.9 | % | 0.9 | % | 11.2 | % | ||||
| Realignment charges (a) | 1,077 | (3,095 | ) | (12,981 | ) | 17,153 | ||||||
| Discrete item (b) | 800 | (400 | ) | — | 1,200 | |||||||
| Acquisition related (e) | — | (9,944 | ) | — | 9,944 | |||||||
| Purchase accounting step-up and intangible asset<br>amortization (f) | 3,067 | (1,033 | ) | — | 4,100 | |||||||
| Adjusted | $ | 428,917 | **** | $ | 238,203 | **** | $ | — | **** | $ | 190,662 | **** |
| Adjusted as a percent of sales | 30.4 | % | 16.9 | % | 0.0 | % | 13.5 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $33,700 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 and integration related costs associated with the MOGAS acquisition.<br> | ||||||||
| --- | --- | ||||||||
| (f) | Charge represents amortization of step-up in value of acquired<br>inventories and acquisition related intangible assets associated with the MOGAS acquisition.<br> | ||||||||
| --- | --- | ||||||||
| Twelve Months EndedDecember 31, 2023 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Reported | $ | 906,775 | **** | $ | 575,792 | **** | $ | 348,867 | **** |
| Reported as a percent of sales | 29.6 | % | 18.8 | % | 11.4 | % | |||
| Realignment charges (a) | 10,797 | (14,533 | ) | 25,330 | |||||
| Discrete asset write-downs (b)(c)(d) | 715 | (3,955 | ) | 4,670 | |||||
| Adjusted | $ | 918,287 | **** | $ | 557,304 | **** | $ | 378,867 | **** |
| Adjusted as a percent of sales | 30.0 | % | 18.2 | % | 12.4 | % |
Flow ControlDivision
| Twelve Months EndedDecember 31, 2023 | GrossProfit | Selling,General &AdministrativeExpense | OperatingIncome | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Reported | $ | 372,808 | **** | $ | 224,774 | **** | $ | 148,034 | **** |
| Reported as a percent of sales | 29.4 | % | 17.8 | % | 11.7 | % | |||
| Realignment charges (a) | 10,576 | (11,393 | ) | 21,969 | |||||
| Acquisition related (e) | — | (7,247 | ) | 7,247 | |||||
| Adjusted | $ | 383,384 | **** | $ | 206,134 | **** | $ | 177,250 | **** |
| Adjusted as a percent of sales | 30.3 | % | 16.3 | % | 14.0 | % |
Note: Amounts may not calculate due to rounding
| (a) | Charges represent realignment costs incurred as a result of realignment programs of which $9,701 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) | Includes reversals of expenses that were adjusted for Non-GAAP measures<br>in previous periods of $81. |
| --- | --- |
| (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> |
| --- | --- |
11
| Fourth Quarter and Full Year 2024 - Segment Results | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions, comparison vs. 2023 fourth quarter and full year, unaudited) | ||||||||||||||||||||
| FPD | FCD | |||||||||||||||||||
| 4th Qtr | Full Year | 4th Qtr | Full Year | |||||||||||||||||
| Bookings | $ | 816.4 | $ | 3,304.3 | $ | 363.4 | $ | 1,370.7 | ||||||||||||
| - vs. prior year | 94.2 | 13.0 | % | 363.1 | 12.3 | % | 36.5 | 11.2 | % | 24.8 | 1.8 | % | ||||||||
| - on constant currency | 106.6 | 14.8 | % | 388.8 | 13.2 | % | 38.0 | 11.6 | % | 29.1 | 2.2 | % | ||||||||
| Sales | $ | 794.9 | $ | 3,158.6 | $ | 387.9 | $ | 1,409.3 | ||||||||||||
| - vs. prior year | -37.9 | -4.6 | % | 94.1 | 3.1 | % | 51.9 | 15.4 | % | 143.3 | 11.3 | % | ||||||||
| - on constant currency | -27.4 | -3.3 | % | 113.0 | 3.7 | % | 53.0 | 15.8 | % | 145.5 | 11.5 | % | ||||||||
| Gross Profit | $ | 255.7 | $ | 1,017.0 | $ | 118.5 | $ | 424.0 | ||||||||||||
| - vs. prior year | 7.3 | % | 12.2 | % | 16.3 | % | 13.7 | % | ||||||||||||
| Gross Margin (% of sales) | 32.2 | % | 32.2 | % | 30.5 | % | 30.1 | % | ||||||||||||
| - vs. prior year (in basis points) | 360 bps | 260 bps | 20 bps | 70 bps | ||||||||||||||||
| Operating Income | $ | 129.1 | $ | 480.2 | $ | 44.6 | $ | 158.3 | ||||||||||||
| - vs. prior year | 35.6 | 38.1 | % | 131.3 | 37.6 | % | -5.2 | -10.4 | % | 10.3 | 7.0 | % | ||||||||
| - on constant currency | 37.2 | 39.8 | % | 136.5 | 39.1 | % | -5.2 | -10.4 | % | 11.3 | 7.6 | % | ||||||||
| Operating Margin (% of sales) | 16.2 | % | 15.2 | % | 11.5 | % | 11.2 | % | ||||||||||||
| - vs. prior year (in basis points) | 500 bps | 380 bps | (330) bps | (50) bps | ||||||||||||||||
| Adjusted Operating Income * | $ | 139.0 | $ | 519.7 | $ | 59.2 | $ | 190.7 | ||||||||||||
| - vs. prior year | 40.9 | 41.7 | % | 140.8 | 37.2 | % | 3.4 | 6.1 | % | 13.4 | 7.6 | % | ||||||||
| - on constant currency | 42.5 | 43.4 | % | 146.0 | 38.5 | % | 3.4 | 6.2 | % | 14.4 | 8.1 | % | ||||||||
| Adj. Oper. Margin (% of sales)* | 17.5 | % | 16.5 | % | 15.3 | % | 13.5 | % | ||||||||||||
| - vs. prior year (in basis points) | 570 bps | 410 bps | (130 | ) bps | (50 | ) bps | ||||||||||||||
| Backlog | $ | 1,930.4 | $ | 869.6 | ||||||||||||||||
| * Adjusted Operating Income and Adjusted Operating Margin exclude<br>realignment charges and other specific discrete items |
12
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (Amounts in thousands, except par value) | December 31,2023 | ||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 675,441 | $ | 545,678 | ||
| Accounts receivable, net of allowance for expected credit losses of 79,059 and 80,013,<br>respectively | 976,739 | 881,869 | |||
| Contract assets, net | 298,906 | 280,228 | |||
| Inventories | 828,254 | 879,937 | |||
| Prepaid expenses and other | 116,157 | 116,065 | |||
| Total current assets | 2,895,497 | 2,703,777 | |||
| Property, plant and equipment, net | 539,703 | 506,158 | |||
| Operating lease<br>right-of-use assets, net | 159,400 | 156,430 | |||
| Goodwill | 1,293,795 | 1,182,225 | |||
| Deferred taxes | 221,742 | 218,358 | |||
| Other intangible assets, net | 188,604 | 122,248 | |||
| Other assets, net | 200,580 | 219,523 | |||
| Total assets | 5,499,321 | $ | 5,108,719 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | 545,310 | $ | 547,824 | ||
| Accrued liabilities | 561,486 | 504,430 | |||
| Contract liabilities | 282,170 | 287,697 | |||
| Debt due within one year | 44,059 | 66,243 | |||
| Operating lease liabilities | 33,559 | 32,382 | |||
| Total current liabilities | 1,466,584 | 1,438,576 | |||
| Long-term debt due after one year | 1,460,132 | 1,167,307 | |||
| Operating lease liabilities | 149,838 | 138,665 | |||
| Retirement obligations and other liabilities | 371,055 | 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 | 502,045 | 506,525 | |||
| Retained earnings | 4,025,750 | 3,854,717 | |||
| Treasury shares, at cost – 45,688 and 45,885 shares, respectively | (2,007,869 | ) | (2,014,474 | ) | |
| Deferred compensation obligation | 8,172 | 7,942 | |||
| Accumulated other comprehensive loss | (741,424 | ) | (639,601 | ) | |
| Total Flowserve Corporation shareholders’ equity | 2,007,665 | 1,936,100 | |||
| Noncontrolling interests | 44,047 | 38,951 | |||
| Total equity | 2,051,712 | 1,975,051 | |||
| Total liabilities and equity | 5,499,321 | $ | 5,108,719 |
All values are in US Dollars.
13
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Year Ended December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Amounts in thousands) | 2024 | 2023 | 2022 | ||||||
| Cash flows – Operating activities: | |||||||||
| Net earnings, including noncontrolling interests | $ | 301,226 | $ | 205,188 | $ | 198,015 | |||
| Adjustments to reconcile net earnings to net cash provided (used) by operating<br>activities: | |||||||||
| Depreciation | 75,849 | 73,464 | 77,636 | ||||||
| Amortization of intangible and other assets | 9,749 | 10,283 | 13,317 | ||||||
| Loss on sale of business | 12,981 | — | — | ||||||
| Stock-based compensation | 30,474 | 27,808 | 25,530 | ||||||
| Foreign currency, asset write downs and other non-cash<br>adjustments | 24,172 | (17,331 | ) | (27,758 | ) | ||||
| Change in assets and liabilities, net of businesses acquired: | |||||||||
| Accounts receivable, net | (74,886 | ) | 4,744 | (152,011 | ) | ||||
| Inventories | 47,915 | (59,831 | ) | (147,492 | ) | ||||
| Contract assets, net | (20,197 | ) | (41,149 | ) | (41,768 | ) | |||
| Prepaid expenses and other assets, net | 7,610 | 7,825 | 17,461 | ||||||
| Accounts payable | (11,756 | ) | 53,065 | 78,968 | |||||
| Contract liabilities | (18,706 | ) | 26,837 | 61,684 | |||||
| Accrued liabilities | 54,479 | 59,213 | (5,226 | ) | |||||
| Retirement obligations and other | 1,456 | 38,497 | (1,430 | ) | |||||
| Net deferred taxes | (15,058 | ) | (62,841 | ) | (136,936 | ) | |||
| Net cash flows provided (used) by operating activities | 425,308 | 325,772 | (40,010 | ) | |||||
| Cash flows – Investing activities: | |||||||||
| Capital expenditures | (81,019 | ) | (67,359 | ) | (76,287 | ) | |||
| Payments for acquisition, net of cash acquired | (305,924 | ) | — | — | |||||
| Proceeds from disposal of assets | 2,244 | 2,057 | 4,422 | ||||||
| Payments for disposition of business | (2,555 | ) | — | — | |||||
| Proceeds from termination of cross-currency swap | — | — | 66,004 | ||||||
| Net affiliate investment activity | 40 | (3,278 | ) | (225 | ) | ||||
| Net cash flows provided (used) by investing activities | (387,214 | ) | (68,580 | ) | (6,086 | ) | |||
| Cash flows – Financing activities: | |||||||||
| Proceeds from term loan | 366,000 | — | — | ||||||
| Payments on term loan | (95,375 | ) | (40,000 | ) | (32,500 | ) | |||
| Proceeds under revolving credit facility | 100,000 | 280,000 | 45,000 | ||||||
| Payments under revolving credit facility | (100,000 | ) | (280,000 | ) | (45,000 | ) | |||
| Proceeds under other financing arrangements | 1,437 | 1,114 | 1,733 | ||||||
| Payments under other financing arrangements | (1,455 | ) | (2,604 | ) | (1,790 | ) | |||
| Payments related to tax withholding for stock-based compensation | (9,581 | ) | (6,245 | ) | (4,683 | ) | |||
| Repurchases of common shares | (20,070 | ) | — | — | |||||
| Payments of dividends | (110,440 | ) | (104,955 | ) | (104,549 | ) | |||
| Other | (13,021 | ) | (324 | ) | (8,223 | ) | |||
| Net cash flows provided (used) by financing activities | 117,495 | (153,014 | ) | (150,012 | ) | ||||
| Effect of exchange rate changes on cash | (25,826 | ) | 6,529 | (27,373 | ) | ||||
| Net change in cash and cash equivalents | 129,763 | 110,707 | (223,481 | ) | |||||
| Cash and cash equivalents at beginning of year | 545,678 | 545,678 | 658,452 | ||||||
| Cash and cash equivalents at end of year | $ | 675,441 | $ | 656,385 | $ | 434,971 | |||
| Income taxes paid (net of refunds) | $ | 81,172 | $ | 119,275 | $ | 60,085 | |||
| Interest paid | 66,809 | 64,865 | 41,629 | ||||||
| Non-Cash Investing and FinancingActivities: | |||||||||
| Contingent liabilities incurred related to acquired business, but not paid | $ | 15,000 | $ | — | — |
14
About Flowserve:
Flowserve Corporation 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 website 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: 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; 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; the impact of public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, on our business and operations; 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 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; if we are not able to maintain our competitive position by successfully developing and introducing new products and technology, including artificial intelligence and machine learning; 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 United States, 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.
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 Finance (972) 443-6560
Tarek Zeni, Director, Investor Relations (469) 420-4045
Media Contact:
Wes Warnock, Vice President, Marketing, Communications & Public Affairs (972) 443-6900
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