Sign In  |  Register  |  About Santa Clara  |  Contact Us

Santa Clara, CA
September 01, 2020 1:39pm
7-Day Forecast | Traffic
  • Search Hotels in Santa Clara

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Flowserve Corporation Reports Third Quarter 2022 Results; Issues Fourth Quarter 2022 Financial Guidance

  • Strong bookings of $1.22 billion increased 34.2% year-over-year and 40.8% on a constant currency basis, including one of Flowserve’s largest awards in its history
  • Reported Earnings Per Share of 29 cents, includes 20 cents of net benefit due primarily to $30 million below-the-line foreign exchange gain, Adjusted Earnings per Share of 9 cents
  • As previously announced, Reported and Adjusted Earnings per Share were impacted by approximately 22 cents per share of certain discrete items in the third quarter
  • Backlog of $2.6 billion was up 29.9% versus 2021 year-end and 32.1% year-over-year, reaching its highest level since Q2 2015 and positioning the Company for growth
  • With the highest backlog since 2015, and expectations for continued supportive end-markets, Flowserve is well-positioned for sequential revenue and earnings growth in the fourth quarter and full-year 2023
  • Announced the acquisition of Chart Industries’ in-process R&D for hydrogen pumps to support our Diversify, Decarbonize and Digitize (“3D”) strategy

Flowserve Corporation (NYSE: FLS), 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, 2022.

Third Quarter 2022 Highlights (all comparisons to the 2021 third quarter, unless otherwise noted)

  • Reported Earnings Per Share (EPS) of $0.29 and Adjusted EPS1 of $0.09
    • Reported EPS includes a $30.5 million below-the-line FX benefit, $2.7 million reserve reversal of a prior discrete asset write-down and a modest realignment benefit
  • Total bookings were $1.22 billion, up 34.2%, or 40.8% on a constant currency basis
    • Original equipment bookings were $679.7 million, up 63.0% or 70.1% on a constant currency basis
    • Aftermarket bookings were $543.7 million, up 9.9%, or 16.2% on a constant currency basis
  • Sales were $872.9 million, up 0.8%, or 7.2% on a constant currency basis
    • Original equipment sales were $412.1 million, down 3.1%, or up 3.6% on a constant currency basis
    • Aftermarket sales were $460.8 million, up 4.5%, or up 10.6% on a constant currency basis
  • Reported gross and operating margins were 27.4% and 2.8%, respectively
    • Adjusted gross and operating margins2 were 27.4% and 2.4%, respectively

“Our third quarter results were impacted by a number of previously disclosed discrete, period-specific issues impacting our EPS and margin performance,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “While we are disappointed by these results, our performance in the third quarter does not reflect what the business is capable of delivering or our opportunities for the future. We have since put these non-recurring items behind us and have taken corrective actions to remedy the operating issues. Third quarter bookings, however, were exceptionally strong with large project awards in our traditional markets, solid aftermarket and MRO activity, and numerous awards driven by our 3D growth strategy. Our current project funnel remains healthy and includes significant opportunities in energy transition and energy security.”

Rowe concluded, “We look to close out the year with significant sequential revenue growth and improved margins given the one-time nature of most of the factors that impacted our third quarter performance. We continue to make progress on our efforts to mitigate supply chain headwinds that have challenged our revenue conversion this year and are implementing new cost reduction measures to improve efficiency and address underutilization at certain facilities. With our highest backlog in seven years, increased spending in our traditional markets driven by energy security concerns and continued progress and momentum in our 3D strategy, we believe Flowserve is positioned to deliver sequential revenue growth and earnings improvement for the remainder of the year and for full-year 2023.”

2022 Fourth Quarter Guidance3

Flowserve expects 2022 fourth quarter Reported and Adjusted EPS of at least 40 cents on year-over-year quarterly revenue growth of approximately 8-10%. Additionally, several of the issues that impacted the third quarter, including business disruption due to an ERP conversion, discrete one-time accounting issues, the purchase of R&D and elevated bad debt expenses are not expected to recur in the fourth quarter. Fourth quarter Adjusted EPS will exclude realignment expenses, below-the-line FX impacts and other potential specific discrete items.

Third Quarter 2022 Results Conference Call

Flowserve will host its conference call with the financial community on Tuesday, November 1st at 11:00 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 “Investor Relations” section.

1 See Reconciliation of Non-GAAP Measures table for detailed reconciliation of reported results to adjusted measures.

2 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 reconciliation of Non-GAAP Measures table for detailed reconciliation.

3 Adjusted 2022 EPS excludes realignment expenses, the impact from other specific discrete items and below-the-line foreign currency effects and utilizes current FX rates and approximately 131 million fully diluted shares.

- FX impact is calculated by comparing the difference between the actual average FX rates of 2022 and the year-end 2021 spot rates both as applied to our 2022 expectations, divided by the number of shares expected for 2022.

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: the impact of the global outbreak of COVID-19 on our business and operations; 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 our strategic transformation and realignment initiatives, our business could be adversely affected; risks associated with cost overruns on fixed-fee projects and in taking customer orders for large complex custom engineered products; 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, Russian 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; 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; our furnishing of products and services to nuclear power plant facilities and other critical processes; 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; our relative geographical profitability and its impact on our utilization of deferred tax assets, including foreign tax credits; 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. Throughout our materials we refer to non-GAAP measures as “Adjusted.” 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended September 30,

(Amounts in thousands, except per share data)

2022

2021

 
Sales

$

872,881

 

$

866,118

 

Cost of sales

 

(633,304

)

 

(612,626

)

Gross profit

 

239,577

 

 

253,492

 

Selling, general and administrative expense

 

(221,142

)

 

(200,862

)

Net earnings from affiliates

 

5,782

 

 

4,732

 

Operating income

 

24,217

 

 

57,362

 

Interest expense

 

(11,582

)

 

(14,746

)

Loss on extinguishment of debt

 

-

 

 

(563

)

Interest income

 

1,141

 

 

827

 

Other income (expense), net

 

28,676

 

 

(1,504

)

Earnings before income taxes

 

42,452

 

 

41,376

 

(Provision for) benefit from income taxes

 

(1,817

)

 

10,433

 

Net earnings, including noncontrolling interests

 

40,635

 

 

51,809

 

Less: Net earnings attributable to noncontrolling interests

 

(2,235

)

 

(2,024

)

Net earnings attributable to Flowserve Corporation

$

38,400

 

$

49,785

 

 
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic

$

0.29

 

$

0.38

 

Diluted

 

0.29

 

 

0.38

 

 
Weighted average shares - basic

 

130,703

 

 

130,242

 

Weighted average shares - diluted

 

131,402

 

 

130,789

 

RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
       
Three Months Ended September 30, 2022
(Amounts in thousands, except per share data) As Reported (a)   Realignment (1)   Other Items   As Adjusted
       
Sales

$

872,881

 

 

$

-

 

 

$

-

 

 

$

872,881

 

Gross profit

 

239,577

 

 

 

395

 

 

 

209

 

(3)

 

 

238,973

 

Gross margin

 

27.4

%

 

 

-

 

 

 

-

 

 

 

27.4

%

       
Selling, general and administrative expense

 

(221,142

)

 

 

(99

)

 

 

2,523

 

(3)

 

 

(223,566

)

Net earnings from affiliates

 

5,782

 

 

 

-

 

 

 

-

 

 

 

5,782

 

       
Operating income

 

24,217

 

 

 

296

 

 

 

2,732

 

 

 

21,189

 

Operating income as a percentage of sales

 

2.8

%

 

 

-

 

 

 

-

 

 

 

2.4

%

       
Interest and other expense, net

 

18,235

 

 

 

-

 

 

 

30,482

 

(4)

 

 

(12,247

)

       
Earnings before income taxes

 

42,452

 

 

 

296

 

 

 

33,214

 

 

 

8,942

 

Provision for income taxes

 

(1,817

)

 

 

(94

)

(2)

 

 

(7,354

)

(5)

 

 

5,631

 

Tax Rate

 

4.3

%

 

 

31.8

%

 

 

22.1

%

 

 

-63.0

%

       
Net earnings attributable to Flowserve Corporation

$

38,400

 

 

$

202

 

 

$

25,860

 

 

$

12,338

 

       
Net earnings per share attributable to Flowserve Corporation common shareholders:      
Basic

$

0.29

 

 

$

-

 

 

$

0.20

 

 

$

0.09

 

Diluted

 

0.29

 

 

 

-

 

 

 

0.20

 

 

 

0.09

 

       
Basic number of shares used for calculation

 

130,703

 

 

 

130,703

 

 

 

130,703

 

 

 

130,703

 

Diluted number of shares used for calculation

 

131,402

 

 

 

131,402

 

 

 

131,402

 

 

 

131,402

 

(a) Reported in conformity with U.S. GAAP
Notes:
(1) Represents realignment adjustments incurred as a result of realignment programs
(2) Includes tax impact of items above
(3) Represents reversals of expenses that were adjusted for Non-GAAP measures in previous periods
(4) Represents below-the-line foreign exchange impacts
(5) Includes tax impact of items above
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
       
Three Months Ended September 30, 2021
(Amounts in thousands, except per share data) As Reported (a)   Realignment (1)   Other Items   As Adjusted
       
Sales

$

866,118

 

 

$

-

 

 

$

-

 

 

$

866,118

 

Gross profit

 

253,492

 

 

 

(2,582

)

 

 

-

 

 

 

256,074

 

Gross margin

 

29.3

%

 

 

-

 

 

 

-

 

 

 

29.6

%

       
Selling, general and administrative expense

 

(200,862

)

 

 

(368

)

 

 

-

 

 

 

(200,494

)

Gain on sale of business

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net earnings from affiliates

 

4,732

 

 

 

-

 

 

 

-

 

 

 

4,732

 

       
Operating income

 

57,362

 

 

 

(2,950

)

 

 

-

 

 

 

60,312

 

Operating income as a percentage of sales

 

6.6

%

 

 

-

 

 

 

-

 

 

 

7.0

%

       
Interest and other expense, net

 

(15,986

)

 

 

-

 

 

 

(2,520

)

(3)

 

 

(13,466

)

       
Earnings before income taxes

 

41,376

 

 

 

(2,950

)

 

 

(2,520

)

 

 

46,846

 

(Provision for) benefit from income taxes

 

10,433

 

 

 

624

 

(2)

 

 

16,935

 

(4)

 

 

(7,126

)

Tax Rate

 

-25.2

%

 

 

21.2

%

 

 

672.0

%

 

 

15.2

%

       
Net earnings attributable to Flowserve Corporation

$

49,785

 

 

$

(2,326

)

 

$

14,415

 

 

$

37,696

 

       
Net earnings per share attributable to Flowserve Corporation common shareholders:      
Basic

$

0.38

 

 

$

(0.02

)

 

$

0.11

 

 

$

0.29

 

Diluted

 

0.38

 

 

 

(0.02

)

 

 

0.11

 

 

 

0.29

 

       
Basic number of shares used for calculation

 

130,242

 

 

 

130,242

 

 

 

130,242

 

 

 

130,242

 

Diluted number of shares used for calculation

 

130,789

 

 

 

130,789

 

 

 

130,789

 

 

 

130,789

 

(a) Reported in conformity with U.S. GAAP
Notes:
(1) Represents realignment expense incurred as a result of realignment programs.
(2) Includes tax impact of items above.
(3) Represents below-the-line foreign exchange impacts and $1.5 million of expense as a result of early extinguishment of debt and duplicate interest expense.
(4) Includes tax impact of items above and $16.6 million benefit related to legal entity restructuring of foreign holding companies.
SEGMENT INFORMATION
(Unaudited)
 
FLOWSERVE PUMP DIVISION

Three Months Ended September 30,

(Amounts in millions, except percentages)

2022

2021

Bookings

$

925.8

 

$

660.9

 

Sales

 

592.6

 

 

601.8

 

Gross profit

 

170.0

 

 

182.9

 

Gross profit margin

 

28.7

%

 

30.4

%

SG&A

 

136.9

 

 

128.5

 

Segment operating income

 

38.9

 

 

59.1

 

Segment operating income as a percentage of sales

 

6.6

%

 

9.8

%

 
FLOW CONTROL DIVISION

Three Months Ended September 30,

(Amounts in millions, except percentages)

2022

2021

Bookings

$

300.0

 

$

253.6

 

Sales

 

282.6

 

 

266.1

 

Gross profit

 

78.2

 

 

77.0

 

Gross profit margin

 

27.7

%

 

28.9

%

SG&A

 

48.5

 

 

49.3

 

Segment operating income

 

29.7

 

 

27.7

 

Segment operating income as a percentage of sales

 

10.5

%

 

10.4

%

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Nine Months Ended September 30,

(Amounts in thousands, except per share data)

2022

 

2021

 
Sales

$

2,576,161

 

$

2,621,604

 

Cost of sales

 

(1,877,108

)

 

(1,838,974

)

Gross profit

 

699,053

 

 

782,630

 

Selling, general and administrative expense

 

(621,956

)

 

(609,965

)

Gain on sale of business

 

-

 

 

1,806

 

Net earnings from affiliates

 

14,821

 

 

11,157

 

Operating income

 

91,918

 

 

185,628

 

Interest expense

 

(33,337

)

 

(45,847

)

Loss on extinguishment of debt

 

-

 

 

(8,173

)

Interest income

 

2,938

 

 

1,893

 

Other income (expense), net

 

28,152

 

 

(20,717

)

Earnings before income taxes

 

89,671

 

 

112,784

 

(Provision for) benefit from income taxes

 

(16,618

)

 

3,929

 

Net earnings, including noncontrolling interests

 

73,053

 

 

116,713

 

Less: Net earnings attributable to noncontrolling interests

 

(5,694

)

 

(7,495

)

Net earnings attributable to Flowserve Corporation

$

67,359

 

$

109,218

 

 
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic

$

0.52

 

$

0.84

 

Diluted

 

0.51

 

 

0.83

 

 
Weighted average shares - basic

 

130,604

 

 

130,325

 

Weighted average shares - diluted

 

131,233

 

 

130,867

 

RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
       
Nine Months Ended September 30, 2022
(Amounts in thousands, except per share data) As Reported (a)   Realignment (1)   Other Items   As Adjusted
       
Sales

$

2,576,161

 

 

$

-

 

 

$

-

 

 

$

2,576,161

 

Cost of sales

 

(1,877,108

)

 

 

126

 

 

 

(9,844

)

(3)

 

 

(1,867,390

)

Gross profit

 

699,053

 

 

 

126

 

 

 

(9,844

)

(3)

 

 

708,771

 

Gross margin

 

27.1

%

 

 

-

 

 

 

-

 

 

 

27.5

%

       
Selling, general and administrative expense

 

(621,956

)

 

 

40

 

 

 

(10,706

)

(3)

 

 

(611,290

)

Loss on sale of business

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net earnings from affiliates

 

14,821

 

 

 

-

 

 

 

-

 

 

 

14,821

 

       
Operating income

 

91,918

 

 

 

166

 

 

 

(20,550

)

 

 

112,302

 

Operating income as a percentage of sales

 

3.6

%

 

 

-

 

 

 

-

 

 

 

4.4

%

       
Interest and other expense, net

 

(2,247

)

 

 

-

 

 

 

34,900

 

(4)

 

 

(37,147

)

       
Earnings before income taxes

 

89,671

 

 

 

166

 

 

 

14,350

 

 

 

75,155

 

Provision for income taxes

 

(16,618

)

 

 

(67

)

(2)

 

 

(8,455

)

(5)

 

 

(8,096

)

Tax Rate

 

18.5

%

 

 

40.4

%

 

 

58.9

%

 

 

10.8

%

Net earnings (loss), including noncontrolling interests

 

73,053

 

 

 

99

 

 

 

5,895

 

 

 

67,059

 

Less: Net earnings attributable to noncontrolling interests

 

(5,694

)

 

 

-

 

 

 

-

 

 

 

(5,694

)

       
Net earnings attributable to Flowserve Corporation

$

67,359

 

 

$

99

 

 

$

5,895

 

 

$

61,365

 

       
Net earnings per share attributable to Flowserve Corporation common shareholders:      
Basic

$

0.52

 

 

$

-

 

 

$

0.05

 

 

$

0.47

 

Diluted

 

0.51

 

 

 

-

 

 

 

0.04

 

 

 

0.47

 

       
Basic number of shares used for calculation

 

130,604

 

 

 

130,604

 

 

 

130,604

 

 

 

130,604

 

Diluted number of shares used for calculation

 

131,233

 

 

 

131,233

 

 

 

131,233

 

 

 

131,233

 

(a) Reported in conformity with U.S. GAAP
Notes:
(1) Represents realignment adjustments incurred as a result of realignment programs
(2) Includes tax impact of items above
(3) Represents the reserve of Russia related financial exposures and a discrete asset write-down. The impact of $5.4 million of previously recognized revenue and estimated cancellation fees on open contracts that were previously accounted for under POC and subsequently canceled have been reflected in the above adjustment to gross profit. In addition, includes reversals of expenses that were adjusted for Non-GAAP measures in previous periods.
(4) Represents below-the-line foreign exchange impacts
(5) Includes tax impact of items above
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
       
Nine Months Ended September 30, 2021
(Amounts in thousands, except per share data) As Reported (a)   Realignment (1)   Other Items   As Adjusted
       
Sales

$

2,621,604

 

 

$

-

 

 

$

-

 

 

$

2,621,604

 

Gross profit

 

782,630

 

 

 

(15,813

)

 

 

-

 

 

 

798,443

 

Gross margin

 

29.9

%

 

 

-

 

 

 

-

 

 

 

30.5

%

       
Selling, general and administrative expense

 

(609,965

)

 

 

(6,454

)

 

 

-

 

 

 

(603,511

)

Gain on sale of business

 

1,806

 

 

 

-

 

 

 

1,806

 

(3)

 

 

-

 

Net earnings from affiliates

 

11,157

 

 

 

-

 

 

 

-

 

 

 

11,157

 

       
Operating income

 

185,628

 

 

 

(22,267

)

 

 

1,806

 

 

 

206,089

 

Operating income as a percentage of sales

 

7.1

%

 

 

-

 

 

 

-

 

 

 

7.9

%

       
Interest and other expense, net

 

(72,844

)

 

 

-

 

 

 

(23,833

)

(4)

 

 

(49,011

)

       
Earnings before income taxes

 

112,784

 

 

 

(22,267

)

 

 

(22,027

)

 

 

157,078

 

(Provision for) benefit from income taxes

 

3,929

 

 

 

8,466

 

(2)

 

 

22,734

 

(5)

 

 

(27,271

)

Tax Rate

 

-3.5

%

 

 

38.0

%

 

 

103.2

%

 

 

17.4

%

       
Net earnings attributable to Flowserve Corporation

$

109,218

 

 

$

(13,801

)

 

$

707

 

 

$

122,312

 

       
Net earnings per share attributable to Flowserve Corporation common shareholders:      
Basic

$

0.84

 

 

$

(0.11

)

 

$

0.01

 

 

$

0.94

 

Diluted

 

0.83

 

 

 

(0.11

)

 

 

0.01

 

 

 

0.93

 

       
Basic number of shares used for calculation

 

130,325

 

 

 

130,325

 

 

 

130,325

 

 

 

130,325

 

Diluted number of shares used for calculation

 

130,867

 

 

 

130,867

 

 

 

130,867

 

 

 

130,867

 

(a) Reported in conformity with U.S. GAAP
Notes:
(1) Represents realignment expense incurred as a result of realignment programs.
(2) Includes tax impact of items above and realignment related tax release.
(3) Represents final settlement gain on sale of business in 2018.
(4) Represents below-the-line foreign exchange impacts and $9.1 million of expense as a result of early extinguishment of debt and duplicate interest expense.
(5) Includes tax impact of items above and $17.9 million benefit related to legal entity restructuring of foreign holding companies.
SEGMENT INFORMATION
(Unaudited)
 
FLOWSERVE PUMP DIVISION

Nine Months Ended September 30,

(Amounts in millions, except percentages)

2022

2021

Bookings

$

2,433.6

 

$

1,982.5

 

Sales

 

1,783.1

 

 

1,821.9

 

Gross profit

 

510.9

 

 

562.1

 

Gross profit margin

 

28.7

%

 

30.9

%

SG&A

 

408.4

 

 

394.7

 

Gain on sale of business

 

-

 

 

1.8

 

Segment operating income

 

117.3

 

 

180.7

 

Segment operating income as a percentage of sales

 

6.6

%

 

9.9

%

 
FLOW CONTROL DIVISION

Nine Months Ended September 30,

(Amounts in millions, except percentages)

2022

2021

Bookings

$

923.2

 

$

834.0

 

Sales

 

798.8

 

 

803.1

 

Gross profit

 

218.0

 

 

236.4

 

Gross profit margin

 

27.3

%

 

29.4

%

SG&A

 

142.7

 

 

147.1

 

Segment operating income

 

75.3

 

 

89.7

 

Segment operating income as a percentage of sales

 

9.4

%

 

11.2

%

Third Quarter and Year-to-Date 2022 - Segment Results
(dollars in millions, comparison vs. 2021 third quarter and year-to-date, unaudited)
         
  FPD   FCD

3rd Qtr

 

 

YTD

 

 

3rd Qtr

 

 

 YTD

Bookings  

$

925.8

 

$

2,433.6

 

$

300.0

 

$

923.2

- vs. prior year  

 

40.1%

 

 

22.8%

 

 

18.3%

 

 

10.7%

- on constant currency  

 

46.8%

 

 

27.7%

 

 

24.7%

 

 

15.0%

         
Sales  

$

592.6

 

$

1,783.1

 

$

282.6

 

$

798.8

- vs. prior year  

 

-1.5%

 

 

-2.1%

 

 

6.2%

 

 

-0.5%

- on constant currency  

 

4.8%

 

 

2.4%

 

 

12.5%

 

 

3.6%

         
Gross Profit  

$

170.0

 

$

510.9

 

$

78.2

 

$

218.0

- vs. prior year  

 

-7.1%

 

 

-9.1%

 

 

1.6%

 

 

-7.8%

         
Gross Margin (% of sales)  

 

28.7%

 

 

28.7%

 

 

27.7%

 

 

27.3%

- vs. prior year (in basis points)  

(170) bps

 

(220) bps

 

(120) bps

 

(210) bps

         
Operating Income  

$

38.9

 

$

117.3

 

$

29.7

 

$

75.3

- vs. prior year  

 

-34.2%

 

 

-35.1%

 

 

7.2%

 

 

-16.1%

- on constant currency  

 

-25.4%

 

 

-31.0%

 

 

11.3%

 

 

-13.8%

         
Operating Margin (% of sales)  

 

6.6%

 

 

6.6%

 

 

10.5%

 

 

9.4%

- vs. prior year (in basis points)  

(320) bps

 

(330) bps

 

(10) bps

 

(180) bps

         
Adjusted Operating Income *  

$

35.8

 

$

132.6

 

$

29.7

 

$

80.6

- vs. prior year  

 

-41.4%

 

 

-31.5%

 

 

6.1%

 

 

-12.3%

- on constant currency  

 

-33.0%

 

 

-27.6%

 

 

10.2%

 

 

-10.2%

         
Adj. Oper. Margin (% of sales)*  

 

6.0%

 

 

7.4%

 

 

10.5%

 

 

10.1%

- vs. prior year (in basis points)  

(420) bps

 

(320) bps

 

(0) bps

 

(130) bps

         
Backlog  

$

1,911.1

   

$

701.8

 
         
* 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)

2022

2021

 
ASSETS
Current assets:
Cash and cash equivalents

$

351,870

 

$

658,452

 

Accounts receivable, net of allowance for expected credit losses of $82,101 and $74,336, respectively

 

770,152

 

 

739,210

 

Contract assets, net of allowance for expected credit losses of $3,999 and $2,393, respectively

 

205,236

 

 

195,598

 

Inventories, net

 

779,449

 

 

678,287

 

Prepaid expenses and other

 

117,077

 

 

117,130

 

Total current assets

 

2,223,784

 

 

2,388,677

 

Property, plant and equipment, net of accumulated depreciation of $1,135,437 and $1,191,823, respectively

 

473,224

 

 

515,927

 

Operating lease right-of-use assets, net

 

173,442

 

 

193,863

 

Goodwill

 

1,135,538

 

 

1,196,479

 

Deferred taxes

 

44,833

 

 

44,049

 

Other intangible assets, net

 

134,105

 

 

152,463

 

Other assets, net of allowance for expected credit losses of $66,210 and $67,696, respectively

 

321,062

 

 

258,310

 

Total assets

$

4,505,988

 

$

4,749,768

 

 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable

$

414,372

 

$

410,062

 

Accrued liabilities

 

382,535

 

 

445,092

 

Contract liabilities

 

216,094

 

 

202,965

 

Debt due within one year

 

47,962

 

 

41,058

 

Operating lease liabilities

 

30,723

 

 

32,628

 

Total current liabilities

 

1,091,686

 

 

1,131,805

 

Long-term debt due after one year

 

1,232,248

 

 

1,261,770

 

Operating lease liabilities

 

155,328

 

 

166,786

 

Retirement obligations and other liabilities

 

334,967

 

 

352,062

 

Shareholders’ equity:
Common shares, $1.25 par value

 

220,991

 

 

220,991

 

Shares authorized – 305,000
Shares issued – 176,793
Capital in excess of par value

 

506,744

 

 

506,386

 

Retained earnings

 

3,678,817

 

 

3,691,023

 

Treasury shares, at cost – 46,376 and 46,794 shares, respectively

 

(2,037,758

)

 

(2,057,706

)

Deferred compensation obligation

 

6,950

 

 

7,214

 

Accumulated other comprehensive loss

 

(718,619

)

 

(563,589

)

Total Flowserve Corporation shareholders' equity

 

1,657,125

 

 

1,804,319

 

Noncontrolling interests

 

34,634

 

 

33,026

 

Total equity

 

1,691,759

 

 

1,837,345

 

Total liabilities and equity

$

4,505,988

 

$

4,749,768

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended September 30,

(Amounts in thousands)

2022

2021

 
Cash flows – Operating activities:
Net earnings, including noncontrolling interests

$

73,053

 

$

116,713

 

Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation

 

59,207

 

 

66,316

 

Amortization of intangible and other assets

 

10,051

 

 

10,643

 

Loss on extinguishment of debt

 

-

 

 

8,173

 

Stock-based compensation

 

23,757

 

 

23,610

 

Foreign currency, asset write downs and other non-cash adjustments

 

(24,085

)

 

9,897

 

Change in assets and liabilities:
Accounts receivable, net

 

(78,376

)

 

24,361

 

Inventories, net

 

(151,938

)

 

(47,533

)

Contract assets, net

 

(21,912

)

 

35,358

 

Prepaid expenses and other, net

 

(14,881

)

 

2,429

 

Accounts payable

 

29,307

 

 

(58,600

)

Contract liabilities

 

27,237

 

 

9,379

 

Accrued liabilities and income taxes payable

 

(32,735

)

 

9,136

 

Retirement obligations and other liabilities

 

24,123

 

 

(23,842

)

Net deferred taxes

 

(32,293

)

 

(34,933

)

Net cash flows provided (used) by operating activities

 

(109,485

)

 

151,107

 

Cash flows – Investing activities:
Capital expenditures

 

(45,831

)

 

(34,034

)

Other

 

184

 

 

(4,679

)

Net cash flows provided (used) by investing activities

 

(45,647

)

 

(38,713

)

Cash flows – Financing activities:
Payments on senior notes

 

-

 

 

(407,473

)

Proceeds from issuance of senior notes

 

-

 

 

498,280

 

Proceeds from long-term debt

 

-

 

 

300,000

 

Payments of deferred loan cost

 

-

 

 

(5,399

)

Payments on term loan

 

(24,239

)

 

-

 

Proceeds under other financing arrangements

 

1,135

 

 

1,408

 

Payments under other financing arrangements

 

(356

)

 

(6,215

)

Repurchases of common shares

 

-

 

 

(17,531

)

Payments related to tax withholding for stock-based compensation

 

(4,578

)

 

(5,899

)

Payments of dividends

 

(78,406

)

 

(78,551

)

Other

 

(5,334

)

 

(6,276

)

Net cash flows provided (used) by financing activities

 

(111,778

)

 

272,344

 

Effect of exchange rate changes on cash

 

(39,672

)

 

(22,743

)

Net change in cash and cash equivalents

 

(306,582

)

 

361,995

 

Cash and cash equivalents at beginning of period

 

658,452

 

 

1,095,274

 

Cash and cash equivalents at end of period

$

351,870

 

$

1,457,269

 

 

Contacts

Investor Contacts:

Jay Roueche, Vice President, Investor Relations & Treasurer (972) 443-6560

Mike Mullin, Director, Investor Relations (214) 697-8568

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 SantaClara.com & California Media Partners, LLC. All rights reserved.