- Bookings of $1.20 billion, an increase of 12.7% compared to
prior year, including $615 million of aftermarket activity and
record levels of 3D strategy bookings
- Power bookings increased nearly 30% year-over-year,
including over $100 million in nuclear awards during the third
quarter
- Adjusted Gross and Operating Margins1 of 32.4% and 11.1%,
respectively, an increase of 270 and 240 basis points compared to
prior year period
- Third quarter Reported and Adjusted2 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 by earnings growth and
working capital improvements
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 basis4, 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 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, 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 $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, 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, 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 points,
respectively
- Adjusted gross and operating margins were 32.4% and 11.1%,
respectively, up 270 basis points and 240 basis points,
respectively
- Both Reported and Adjusted third quarter 2024 operating margins
were impacted by a $12.0 million expense 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
- Third quarter 2024 Reported EPS includes after-tax adjusted
expenses of $23.5 million, comprised of realignment charges, an
in-process R&D technology purchase, pension plan transition
expense, 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 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 Guidance5
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.
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 29th 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
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 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 reconciliation. 2 See
Consolidated Reconciliation of Non-GAAP Financial Measures to the
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 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 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 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 approximately 132 million fully diluted
shares.
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
Consolidated Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measure (Unaudited)
(Amounts in thousands, except per share
data)
Three Months Ended September 30,
2024
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Other Income (Expense),
Net
Provision For (Benefit From)
Income Taxes
Net Earnings (Loss)
Effective Tax Rate
Diluted EPS
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 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 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
natural gas technology.
(d) Charge represents acquisition-related
costs associated with the MOGAS acquisition.
(e) Below-the-line foreign exchange
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 September 30,
2023
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Other Income (Expense),
Net
Provision For (Benefit From)
Income Taxes
Earnings Attributable to
Noncontrolling Interests
Net Earnings (Loss)
Effective Tax Rate
Diluted EPS
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 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 foreign jurisdiction. The associated tax expense was
adjusted out in 2015.
(e) Below-the-line foreign exchange
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.
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 Directly Comparable GAAP
Financial Measure (Unaudited)
(Amounts in thousands)
Flowserve Pumps
Division
Three Months Ended September 30,
2024
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Three Months Ended September 30,
2023
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Reported
$
253,185
$
149,060
$
109,274
Reported
$
220,321
$
146,679
$
78,269
Reported as a percent of sales
32.4
%
19.1
%
14.0
%
Reported as a percent of sales
28.8
%
19.1
%
10.2
%
Realignment charges (a)
8,415
(716
)
9,131
Realignment charges (a)
6,141
(9,929
)
16,070
Discrete items (b)(c)
1,700
(8,000
)
9,700
Adjusted
$
226,462
$
136,750
$
94,339
Adjusted
$
263,300
$
140,344
$
128,105
Adjusted as a percent of sales
29.6
%
17.8
%
12.3
%
Adjusted as a percent of sales
33.7
%
17.9
%
16.4
%
Flow Control
Division
Three Months Ended September 30,
2024
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Three Months Ended September 30,
2023
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Reported
$
106,503
$
59,790
$
46,713
Reported
$
97,563
$
54,016
$
43,547
Reported as a percent of sales
30.2
%
16.9
%
13.2
%
Reported as a percent of sales
29.5
%
16.3
%
13.2
%
Realignment charges (a)
(1,590
)
(1,379
)
(211
)
Realignment charges (a)
1,099
(1,572
)
2,671
Discrete items (b)
800
(400
)
1,200
Acquisition related (b)
-
(2,539
)
2,539
Acquisition related (d)
-
(1,694
)
1,694
Adjusted
$
98,662
$
49,905
$
48,757
Adjusted
$
105,713
$
56,317
$
49,396
Adjusted as a percent of sales
29.8
%
15.1
%
14.7
%
Adjusted as a percent of sales
29.9
%
15.9
%
14.0
%
Note: Amounts may not calculate due to
rounding
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.
(a) Charges represent realignment costs
incurred as a result of realignment programs of which $0 is
non-cash.
(b) Charge represents a one-time $3,700
discretionary cash transition benefit provided to certain employees
in conjunction with the freeze of our US Qualified pension
plan.
(b) Charges represent costs associated
with a terminated acquisition
(c) Charge represents the $7,200 strategic acquisition of
intellectual property related to certain liquefied natural gas
technology.
(d) Charge represents acquisition-related
costs associated with the MOGAS acquisition.
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
Consolidated Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measure (Unaudited)
(Amounts in thousands, except per share
data)
Nine Months Ended September 30,
2024
Gross Profit
Selling, General &
Administrative Expense
Loss on Sale of
Business
Operating Income
Other Income (Expense),
Net
Provision For (Benefit From)
Income Taxes
Net Earnings (Loss)
Effective Tax Rate
Diluted EPS
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 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 that were adjusted for Non-GAAP measures when established
in 2022.
(c) Charge represents a one-time $5,000
discretionary cash transition 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
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.
(g) Charge represents a $3,567 non-cash
write-down of a debt investment.
(h) Below-the-line foreign exchange
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.
Nine Months Ended September 30,
2023
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Other Income (Expense),
Net
Provision For (Benefit From)
Income Taxes
Earnings Attributable to
Noncontrolling Interests
Net Earnings (Loss)
Effective Tax Rate
Diluted EPS
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 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 of Non-GAAP measures in 2017.
(d) Charge represents a further $1,173
non-cash write-down of inventory 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 agreement.
(f) Below-the-line foreign exchange
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 foreign jurisdiction. The associated tax expense was
adjusted out in 2015.
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
%
Segment Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measure (Unaudited)
(Amounts in thousands)
Flowserve Pumps
Division
Nine Months Ended September 30,
2024
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Nine Months Ended September 30,
2023
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Reported
$
761,338
$
424,824
$
351,146
Reported
$
668,562
$
426,438
$
255,345
Reported as a percent of sales
32.2
%
18.0
%
14.9
%
Reported as a percent of sales
30.0
%
19.1
%
11.4
%
Realignment charges (a)
20,837
(1,037
)
21,874
Realignment charges (a)
7,484
(11,996
)
19,480
Discrete items (b)(c)(d)
1,700
(6,000
)
7,700
Discrete asset write-downs (b)(c)(d)
1,969
(3,955
)
5,924
Adjusted
$
783,875
$
417,787
$
380,720
Adjusted
$
678,015
$
410,487
$
280,749
Adjusted as a percent of sales
33.2
%
17.7
%
16.1
%
Adjusted as a percent of sales
30.4
%
18.4
%
12.6
%
Flow Control
Division
Nine Months Ended September 30,
2024
Gross Profit
Selling, General &
Administrative Expense
Loss on Sale of
Business
Operating Income
Nine Months Ended September 30,
2023
Gross Profit
Selling, General &
Administrative Expense
Operating Income
Reported
$
305,469
$
178,816
$
12,981
$
113,672
Reported
$
270,914
$
172,718
$
98,196
Reported as a percent of sales
29.9
%
17.5
%
1.3
%
11.1
%
Reported as a percent of sales
29.1
%
18.6
%
10.6
%
Realignment charges (a)
(602
)
(1,440
)
(12,981
)
13,819
Realignment charges (a)
4,263
(10,478
)
14,741
Discrete item (b)
800
(400
)
-
1,200
Acquisition related (e)
-
(8,491
)
8,491
Acquisition related (e)
-
(2,794
)
-
2,794
Adjusted
$
275,177
$
153,749
$
121,428
Adjusted
$
305,667
$
174,182
$
-
$
131,485
Adjusted as a percent of sales
29.6
%
16.5
%
13.1
%
Adjusted as a percent of sales
29.9
%
17.1
%
0.0
%
12.9
%
Note: Amounts may not calculate due to
rounding
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.
(a) Charges represent realignment costs
incurred as a result of realignment programs of which $7,601 is
non-cash.
(b) Charge represents a one-time $3,700
discretionary cash transition benefit provided to certain employees
in conjunction with the freeze of our US Qualified pension
plan.
(b) Charge represents a further expense of
$1,834 associated with a sales contract that was initially reserved
for in 2017.
(c) Charge represents a reduction to
reserves of $2,000 associated with our ongoing financial exposure
in Russia that were adjusted for Non-GAAP measures when established
in 2022.
(c) Charge represents a further $1,173
non-cash write-down of inventory associated with a customer sales
contract that was originally determined to be uncollectible in
2020.
(d) Charge represents the $7,200 strategic
acquisition of intellectual property related to certain liquefied
natural gas technology.
(d) Charge represents a $2,917 non-cash
write-down of a licensing agreement.
(e) Charge represents acquisition-related
costs associated with the MOGAS acquisition.
(e) Charges represent costs associated
with a terminated acquisition.
Third Quarter and Year-to-Date
2024 - Segment Results
(dollars in millions, comparison
vs. 2023 third quarter and year-to-date, 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 items
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
September 30,
December 31,
(Amounts in thousands, except par
value)
2024
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, respectively
971,261
881,869
Contract assets, net of allowance for
expected credit losses of $4,808 and $4,993, 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,
respectively
502,430
506,158
Operating lease 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, 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
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 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 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
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.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241028698418/en/
Investor Contacts: Brian Ezzell, Vice President, Investor
Relations, Treasurer & Corporate Finance (469) 420-3222 Tarek
Zeni, Director, Investor Relations (469) 420-4045
Media Contact: Wes Warnock, Vice President, Marketing,
Communications & Public Affairs (972) 443-6900
Flowserve (NYSE:FLS)
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부터 10월(10) 2024 으로 11월(11) 2024
Flowserve (NYSE:FLS)
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부터 11월(11) 2023 으로 11월(11) 2024
