July 31, 2019 - 4:06 PM EDT
Print Email Article Font Down Font Up Charts

Flowserve Corporation Reports Second Quarter 2019 Results

DALLAS

  • Increased full year 2019 Reported and Adjusted EPS guidance
  • Bookings of $1.1 billion demonstrate benefits of growth-oriented initiatives
  • Flowserve 2.0 transformation program delivering strong margin improvement
  • Free cash flow for 2019 improved $113 million year-over-year through June 30

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 second quarter ended June 30, 2019.

Second Quarter 2019 Highlights (all comparisons to the 2018 second quarter, unless otherwise noted)

  • Reported Earnings Per Share (EPS) were $0.44, and Adjusted[1] EPS of $0.54
    • Pre-tax adjusted items include $13.9 million of realignment and transformation activities and approximately $3.1 million of negative below-the-line FX impact
    • Adjusted EPS increased approximately 32% year-over-year
  • Total bookings were $1.11 billion, up 6.5%, or 9.9% on a constant currency basis, and included approximately 1.0% negative impact related to divested businesses
    • Aftermarket bookings were $508.2 million, or 46% of total bookings, up 0.8%, or 4.5% on a constant currency basis
    • Original equipment bookings were up 11.9%, or 15.0% on a constant currency basis
  • Backlog as of June 30, 2019 was $2.2 billion, up 14.0% versus 2018 year-end, on 1.12 book-to-bill
  • Sales were $990.1 million, up 1.7%, or 4.7% on a constant currency basis and included approximately 1.5% negative impact related to divested businesses
    • Aftermarket sales were $497.5 million, up 2.0%, or 5.4% on a constant currency basis
  • Reported gross and operating margins were 32.1% and 9.9%, up 270 basis points and 510 basis points, respectively
    • Adjusted gross and operating margins[2] were 32.5% and 11.3%, up 60 basis points and 200 basis points, respectively

“Flowserve delivered strong results in the second quarter, including year-over-year growth in bookings, sales, margins and net income,” said Scott Rowe, Flowserve’s president and chief executive officer. “Our results demonstrate that we are building momentum as we continued to drive operational improvements while delivering solid margin enhancement and increased backlog quality. Our bookings this quarter, the highest quarterly level in over three years, included important new awards across a range of end markets such as midstream pipeline, LNG, refinery regulation driven upgrades and solar, which helped drive strong original equipment order growth. At the same time, our Flowserve 2.0 commercial intensity initiative supported increased capture of customer’s aftermarket spending.”

“In addition to our strong top- and bottom-line performance, our focus on cash flow and working capital improvements, driven by Flowserve 2.0 transformation initiatives, delivered first-half 2019 free cash flow improvement of $113 million compared to the prior year,” added Lee Eckert, Flowserve’s senior vice president and chief financial officer. “As a result of our solid first half 2019 financial results and confidence in the remainder of the year, we are increasing our full year Reported and Adjusted EPS[1] target range.”

Rowe concluded, “I am pleased with the continued progress of our Flowserve 2.0 transformation program, including the early benefits of our recent pumps platform combination to better leverage Flowserve’s scale and drive value for our customers. Our transformation journey continues to gain momentum, which provides confidence in achieving our revised 2019 outlook, as well as our longer-term financial targets. We remain focused on executing our strategy to drive long-term value for our customers, employees and shareholders.”

Full Year 2019 Guidance[3]

Flowserve today revised its 2019 guidance, including increasing its Reported and Adjusted EPS target to a range of $1.75 to $1.90 and $2.05 to $2.20, respectively. Both the Reported and the Adjusted EPS target range now include an expected revenue increase of approximately 4.0% to 5.0% year-over-year and remain based on the other previously announced assumptions.

Second Quarter 2019 Results Conference Call

Flowserve will host its conference call with the financial community on Thursday, August 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 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 2019 EPS will exclude the Company’s realignment expenses, the impact from other specific one-time events and below-the-line foreign currency effects and utilizes year-end 2018 FX rates and approximately 132 million fully diluted shares.

- FX headwind is calculated by comparing the difference between the actual average FX rates of 2018 and the year-end 2018 spot rates both as applied to our 2019 expectations, divided by the number of shares expected for 2019.

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: 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 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.

 
FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended June 30,

(Amounts in thousands, except per share data)

2019

2018

 
Sales

$

990,084

 

$

973,129

 

Cost of sales

 

(672,051

)

 

(687,072

)

Gross profit

 

318,033

 

 

286,057

 

Selling, general and administrative expense

 

(223,676

)

 

(240,791

)

Net earnings from affiliates

 

3,661

 

 

1,445

 

Operating income

 

98,018

 

 

46,711

 

Interest expense

 

(14,013

)

 

(14,939

)

Interest income

 

2,218

 

 

1,330

 

Other income (expense), net

 

(3,336

)

 

(4,770

)

Earnings before income taxes

 

82,887

 

 

28,332

 

Provision for income taxes

 

(22,413

)

 

(13,545

)

Net earnings, including noncontrolling interests

 

60,474

 

 

14,787

 

Less: Net earnings attributable to noncontrolling interests

 

(2,302

)

 

(1,567

)

Net earnings attributable to Flowserve Corporation

$

58,172

 

$

13,220

 

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

$

0.44

 

$

0.10

 

Diluted

 

0.44

 

 

0.10

 

RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
 
Three Months Ended June 30, 2019
(Amounts in thousands, except per share data) As Reported (a) Realignment (1) Other Items As Adjusted
 
Sales

$

990,084

 

$

-

 

$

-

 

$

990,084

 

Gross profit

 

318,033

 

 

(3,863

)

 

-

 

 

321,896

 

Gross margin

 

32.1

%

 

-

 

 

-

 

 

32.5

%

 
Selling, general and administrative expense

 

(223,676

)

 

(2,437

)

 

(7,573

)

(3

)

 

(213,666

)

 
Operating income

 

98,018

 

 

(6,300

)

 

(7,573

)

 

111,891

 

Operating income as a percentage of sales

 

9.9

%

 

-

 

 

-

 

 

11.3

%

 
Interest and other expense, net

 

(15,131

)

 

-

 

 

(3,079

)

(4

)

 

(12,052

)

 
Earnings before income taxes

 

82,887

 

 

(6,300

)

 

(10,652

)

 

99,839

 

Provision for income taxes

 

(22,413

)

 

980

 

(2

)

 

2,552

 

(5

)

 

(25,945

)

Tax Rate

 

27.0

%

 

15.6

%

 

24.0

%

 

26.0

%

 
Net earnings attributable to Flowserve Corporation

$

58,172

 

$

(5,320

)

$

(8,100

)

$

71,592

 

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

$

0.44

 

$

(0.04

)

$

(0.06

)

$

0.55

 

Diluted

 

0.44

 

 

(0.04

)

 

(0.06

)

 

0.54

 

 
Basic number of shares used for calculation

 

131,147

 

 

131,147

 

 

131,147

 

 

131,147

 

Diluted number of shares used for calculation

 

131,754

 

 

131,754

 

 

131,754

 

 

131,754

 

 
(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 Flowserve 2.0 transformation efforts
(4) Represents below-the-line foreign exchange impacts
(5) Includes tax impact of items above
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
 
Three Months Ended June 30, 2018
(Amounts in thousands, except per share data) As Reported (a) Realignment (1) Other Items As Adjusted
 
Sales

$

973,129

 

$

-

 

$

-

 

$

973,129

 

Gross profit

 

286,057

 

 

(16,229

)

 

(7,713

)

(3

)

 

309,999

 

Gross margin

 

29.4

%

 

-

 

 

-

 

 

31.9

%

 
Selling, general and administrative expense

 

(240,791

)

 

(4,511

)

 

(14,912

)

(4

)

 

(221,368

)

 
Operating income

 

46,711

 

 

(20,740

)

 

(22,625

)

 

90,076

 

Operating income as a percentage of sales

 

4.8

%

 

-

 

 

-

 

 

9.3

%

 
Interest and other expense, net

 

(18,379

)

 

-

 

 

(4,062

)

(5

)

 

(14,317

)

 
Earnings before income taxes

 

28,332

 

 

(20,740

)

 

(26,687

)

 

75,759

 

Provision for income taxes

 

(13,545

)

 

4,721

 

(2

)

 

1,516

 

(6

)

 

(19,782

)

Tax Rate

 

47.8

%

 

22.8

%

 

5.7

%

 

26.1

%

 
Net earnings attributable to Flowserve Corporation

$

13,220

 

$

(16,019

)

$

(25,171

)

$

54,410

 

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

$

0.10

 

$

(0.12

)

$

(0.19

)

$

0.42

 

Diluted

$

0.10

 

$

(0.12

)

$

(0.19

)

$

0.41

 

 
Basic number of shares used for calculation

 

130,844

 

 

130,844

 

 

130,844

 

 

130,844

 

Diluted number of shares used for calculation

 

131,226

 

 

131,226

 

 

131,226

 

 

131,226

 

 
(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 $7.7 million related to FPD divestiture write-down of assets
(4) Represents $9.7 million related to FPD divestiture write-down of assets, $2.4 million related to implementation costs for the adoption of ASC 606 and $2.9 million related to Flowserve 2.0 transformation efforts
(5) Represents below-the-line foreign exchange impacts
(6) Includes tax impact of items above
FLOWSERVE CORPORATION
SEGMENT INFORMATION
(Unaudited)
 
FLOWSERVE PUMP DIVISION

Three Months Ended June 30,

(Amounts in millions, except percentages)

2019

2018

Bookings

$

761.9

 

$

720.8

 

Sales

 

674.6

 

 

668.4

 

Gross profit

 

222.7

 

 

186.4

 

Gross profit margin

 

33.0

%

 

27.9

%

SG&A

 

150.2

 

 

157.0

 

Segment operating income

 

76.2

 

 

31.6

 

Segment operating income as a percentage of sales

 

11.3

%

 

4.7

%

 
 
FLOW CONTROL DIVISION

Three Months Ended June 30,

(Amounts in millions, except percentages)

2019

2018

Bookings

$

346.4

 

$

318.6

 

Sales

 

316.9

 

 

306.5

 

Gross profit

 

99.4

 

 

101.0

 

Gross profit margin

 

31.4

%

 

33.0

%

SG&A

 

53.3

 

 

53.9

 

Segment operating income

 

46.2

 

 

46.4

 

Segment operating income as a percentage of sales

 

14.6

%

 

15.1

%

FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Six Months Ended June 30,

(Amounts in thousands, except per share data)

2019

 

2018

 
Sales

$

1,880,135

 

$

1,893,083

 

Cost of sales

 

(1,268,026

)

 

(1,335,593

)

Gross profit

 

612,109

 

 

557,490

 

Selling, general and administrative expense

 

(428,830

)

 

(469,966

)

Net earnings from affiliates

 

5,970

 

 

4,613

 

Operating income

 

189,249

 

 

92,137

 

Interest expense

 

(28,044

)

 

(29,818

)

Interest income

 

4,241

 

 

2,968

 

Other income (expense), net

 

(6,476

)

 

(11,925

)

Earnings before income taxes

 

158,970

 

 

53,362

 

Provision for income taxes

 

(38,999

)

 

(22,116

)

Net earnings, including noncontrolling interests

 

119,971

 

 

31,246

 

Less: Net earnings attributable to noncontrolling interests

 

(4,538

)

 

(2,883

)

Net earnings attributable to Flowserve Corporation

$

115,433

 

$

28,363

 

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

$

0.88

 

$

0.22

 

Diluted

 

0.88

 

 

0.22

RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
 
Six Months Ended June 30, 2019
(Amounts in thousands, except per share data) As Reported (a) Realignment (1) Other Items As Adjusted
 
Sales

$

1,880,135

 

$

-

 

$

-

 

$

1,880,135

 

Gross profit

 

612,109

 

 

(9,363

)

 

-

 

 

621,472

 

Gross margin

 

32.6

%

 

-

 

 

-

 

 

33.1

%

 
Selling, general and administrative expense

 

(428,830

)

 

14,993

 

 

(15,986

)

(3

)

 

(427,837

)

 
Operating income

 

189,249

 

 

5,630

 

 

(15,986

)

 

199,605

 

Operating income as a percentage of sales

 

10.1

%

 

-

 

 

-

 

 

10.6

%

 
Interest and other expense, net

 

(30,279

)

 

-

 

 

(5,786

)

(4

)

 

(24,493

)

 
Earnings before income taxes

 

158,970

 

 

5,630

 

 

(21,772

)

 

175,112

 

Provision for income taxes

 

(39,000

)

 

961

 

(2

)

 

5,263

 

(5

)

 

(45,224

)

Tax Rate

 

24.5

%

 

-17.1

%

 

24.2

%

 

25.8

%

 
Net earnings attributable to Flowserve Corporation

$

115,433

 

$

6,591

 

$

(16,509

)

$

125,351

 

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

$

0.88

 

$

0.05

 

$

(0.13

)

$

0.96

 

Diluted

 

0.88

 

 

0.05

 

 

(0.13

)

 

0.95

 

 
Basic number of shares used for calculation

 

131,065

 

 

131,065

 

 

131,065

 

 

131,065

 

Diluted number of shares used for calculation

 

131,643

 

 

131,643

 

 

131,643

 

 

131,643

 

 
(a) Reported in conformity with U.S. GAAP
Notes:
(1) Represents realignment (expense) income incurred as a result of realignment programs. Income in selling, general and administrative due to gains from the sales of non-strategic manufacturing facilities that are included in our Realignment Programs.
(2) Includes tax impact of items above
(3) Represents Flowserve 2.0 transformation efforts
(4) Represents below-the-line foreign exchange impacts
(5) Includes tax impact of items above
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
 
Six Months Ended June 30, 2018
(Amounts in thousands, except per share data) As Reported (a) Realignment (1) Other Items As Adjusted
 
Sales

$

1,893,083

 

$

-

 

$

-

 

$

1,893,083

 

Gross profit

 

557,490

 

 

(23,385

)

 

(7,713

)

(3

)

 

588,588

 

Gross margin

 

29.4

%

 

-

 

 

-

 

 

31.1

%

 
Selling, general and administrative expense

 

(469,966

)

 

(8,829

)

 

(20,379

)

(4

)

 

(440,758

)

 
Operating income

 

92,137

 

 

(32,214

)

 

(28,092

)

 

152,443

 

Operating income as a percentage of sales

 

4.9

%

 

-

 

 

-

 

 

8.1

%

 
Interest and other expense, net

 

(38,775

)

 

-

 

 

(12,014

)

(5

)

 

(26,761

)

 
Earnings before income taxes

 

53,362

 

 

(32,214

)

 

(40,106

)

 

125,682

 

Provision for income taxes

 

(22,116

)

 

7,016

 

(2

)

 

4,354

 

(6

)

 

(33,486

)

Tax Rate

 

41.4

%

 

21.8

%

 

10.9

%

 

26.6

%

 
Net earnings attributable to Flowserve Corporation

$

28,363

 

$

(25,198

)

$

(35,752

)

$

89,313

 

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

$

0.22

 

$

(0.19

)

$

(0.27

)

$

0.68

 

Diluted

$

0.22

 

$

(0.19

)

$

(0.27

)

$

0.68

 

 
Basic number of shares used for calculation

 

130,803

 

 

130,803

 

 

130,803

 

 

130,803

 

Diluted number of shares used for calculation

 

131,161

 

 

131,161

 

 

131,161

 

 

131,161

 

 
(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 $7.7 million related to FPD divestiture write-down of assets
(4) Represents $9.7 million related to FPD divestiture write-down of assets, $7.3 million related to implementation costs for the adoption of ASC 606 and $3.4 million related to Flowserve 2.0 transformation efforts
(5) Represents below-the-line foreign exchange impacts
(6) Includes tax impact of items above
FLOWSERVE CORPORATION
SEGMENT INFORMATION
(Unaudited)
 
FLOWSERVE PUMP DIVISION

Six Months Ended June 30,

(Amounts in millions, except percentages)

2019

2018

Bookings

$

1,512.0

 

$

1,324.9

 

Sales

 

1,284.0

 

 

1,312.9

 

Gross profit

 

423.3

 

 

369.8

 

Gross profit margin

 

33.0

%

 

28.2

%

SG&A

 

272.6

 

 

308.7

 

Segment operating income

 

156.6

 

 

66.3

 

Segment operating income as a percentage of sales

 

12.2

%

 

5.0

%

 
 
FLOW CONTROL DIVISION

Six Months Ended June 30,

(Amounts in millions, except percentages)

2019

2018

Bookings

$

659.6

 

$

645.3

 

Sales

 

599.1

 

 

583.7

 

Gross profit

 

197.2

 

 

189.2

 

Gross profit margin

 

32.9

%

 

32.4

%

SG&A

 

106.6

 

 

108.2

 

Segment operating income

 

90.6

 

 

80.3

 

Segment operating income as a percentage of sales

 

15.1

%

 

13.8

%

 
Second Quarter and Year-to-Date 2019 - Segment Results
(dollars in millions, comparison vs. 2018 second quarter and year-to-date, unaudited)
 
FPD FCD
2nd Qtr YTD 2nd Qtr YTD
Bookings

$

761.9

 

$

1,512.0

 

$

346.4

 

$

659.6

 

- vs. prior year

 

5.7

%

 

14.1

%

 

8.7

%

 

2.2

%

- on constant currency

 

9.2

%

 

18.2

%

 

11.9

%

 

5.4

%

 
Sales

$

674.6

 

$

1,284.0

 

$

316.9

 

$

599.1

 

- vs. prior year

 

0.9

%

 

-2.2

%

 

3.4

%

 

2.6

%

- on constant currency

 

3.9

%

 

1.1

%

 

6.3

%

 

5.8

%

 
Gross Profit

$

222.7

 

$

423.3

 

$

99.4

 

$

197.2

 

- vs. prior year

 

19.5

%

 

14.5

%

 

-1.6

%

 

4.2

%

 
Gross Margin (% of sales)

 

33.0

%

 

33.0

%

 

31.4

%

 

32.9

%

- vs. prior year (in basis points) 510 bps 480 bps (160) bps 50 bps
 
Operating Income

$

76.2

 

$

156.6

 

$

46.2

 

$

90.6

 

- vs. prior year

 

141.1

%

 

136.2

%

 

-0.4

%

 

12.8

%

- on constant currency

 

149.8

%

 

146.9

%

 

1.8

%

 

15.7

%

 
Operating Margin (% of sales)

 

11.3

%

 

12.2

%

 

14.6

%

 

15.1

%

- vs. prior year (in basis points) 660 bps 720 bps (50) bps 130 bps
 
Adjusted Operating Income *

$

81.6

 

$

148.7

 

$

46.4

 

$

91.6

 

- vs. prior year

 

21.8

%

 

35.4

%

 

-3.7

%

 

8.5

%

- on constant currency

 

25.9

%

 

41.9

%

 

-1.5

%

 

11.3

%

 
Adj. Oper. Margin (% of sales)*

 

12.1

%

 

11.6

%

 

14.6

%

 

15.3

%

- vs. prior year (in basis points) 210 bps 320 bps (110) bps 80 bps
 
Backlog

$

1,494.9

 

$

665.6

 

 
* Adjusted Operating Income and Adjusted Operating Margin exclude realignment charges
FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

June 30,

December 31,

(Amounts in thousands, except par value)

2019

2018

 
ASSETS
Current assets:
Cash and cash equivalents

$

596,470

 

$

619,683

 

Accounts receivable, net of allowance for doubtful accounts of $53,251 and $51,501, respectively

 

806,724

 

 

792,434

 

Contract assets, net

 

215,440

 

 

228,579

 

Inventories, net

 

680,898

 

 

633,871

 

Prepaid expenses and other

 

109,792

 

 

108,578

 

Total current assets

 

2,409,324

 

 

2,383,145

 

Property, plant and equipment, net of accumulated depreciation of $992,196 and
$956,634, respectively

 

590,213

 

 

610,096

 

Operating lease right-of-use assets, net

 

189,966

 

 

-

 

Goodwill

 

1,195,116

 

 

1,197,640

 

Deferred taxes

 

54,576

 

 

44,682

 

Other intangible assets, net

 

183,113

 

 

190,550

 

Other assets, net

 

198,901

 

 

190,164

 

Total assets

$

4,821,209

 

$

4,616,277

 

 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable

$

402,118

 

$

418,893

 

Accrued liabilities

 

339,297

 

 

391,406

 

Contract liabilities

 

209,689

 

 

202,458

 

Debt due within one year

 

71,495

 

 

68,218

 

Operating lease liabilities

 

36,272

 

 

-

 

Total current liabilities

 

1,058,871

 

 

1,080,975

 

Long-term debt due after one year

 

1,386,475

 

 

1,414,829

 

Operating lease liabilities

 

153,401

 

 

-

 

Retirement obligations and other liabilities

 

472,674

 

 

459,693

 

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

 

493,037

 

 

494,551

 

Retained earnings

 

3,607,928

 

 

3,543,007

 

Treasury shares, at cost – 45,943 and 46,237 shares, respectively

 

(2,036,857

)

 

(2,049,404

)

Deferred compensation obligation

 

8,219

 

 

7,117

 

Accumulated other comprehensive loss

 

(567,007

)

 

(573,947

)

Total Flowserve Corporation shareholders' equity

 

1,726,311

 

 

1,642,315

 

Noncontrolling interests

 

23,477

 

 

18,465

 

Total equity

 

1,749,788

 

 

1,660,780

 

Total liabilities and equity

$

4,821,209

 

$

4,616,277

 

FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended June 30

(Amounts in thousands)

2019

 

2018

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

$

119,971

 

$

31,246

 

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

 

46,666

 

 

49,169

 

Amortization of intangible and other assets

 

8,003

 

 

8,467

 

Stock-based compensation

 

15,354

 

 

8,395

 

Foreign currency and other non-cash adjustments

 

(20,206

)

 

35,037

 

Change in assets and liabilities:
Accounts receivable, net

 

(13,445

)

 

(32,235

)

Inventories, net

 

(47,610

)

 

(57,414

)

Contract assets, net

 

12,432

 

 

(48,907

)

Prepaid expenses and other assets, net

 

4,949

 

 

2,353

 

Accounts payable

 

(20,660

)

 

(10,550

)

Contract liabilities

 

6,744

 

 

(384

)

Accrued liabilities and income taxes payable

 

(56,935

)

 

(44,756

)

Retirement obligations and other

 

(6,824

)

 

4,478

 

Net deferred taxes

 

911

 

 

(1,636

)

Net cash flows provided (used) by operating activities

 

49,350

 

 

(56,737

)

Cash flows – Investing activities:
Capital expenditures

 

(25,267

)

 

(31,747

)

Proceeds from disposal of assets and other

 

40,302

 

 

908

 

Net cash flows provided (used) by investing activities

 

15,035

 

 

(30,839

)

Cash flows – Financing activities:
Payments on long-term debt

 

(30,000

)

 

(30,000

)

Proceeds under other financing arrangements

 

1,699

 

 

2,253

 

Payments under other financing arrangements

 

(5,124

)

 

(6,282

)

Payments related to tax withholding for stock-based compensation

 

(3,441

)

 

(2,931

)

Payments of dividends

 

(49,772

)

 

(49,681

)

Other

 

(190

)

 

(607

)

Net cash flows provided (used) by financing activities

 

(86,828

)

 

(87,248

)

Effect of exchange rate changes on cash

 

(770

)

 

(11,179

)

Net change in cash and cash equivalents

 

(23,213

)

 

(186,003

)

Cash and cash equivalents at beginning of period

 

619,683

 

 

703,445

 

Cash and cash equivalents at end of period

$

596,470

 

$

517,442

 

 

Flowserve Contacts
Investor Contacts:
Jay Roueche, Vice President, Investor Relations & Treasurer (972) 443-6560
Mike Mullin, Director, Investor Relations (972) 443-6636

Media Contact:
Lars Rosene, Vice President, Corporate & Marketing Communications (972) 443-6644


Source: Business Wire (July 31, 2019 - 4:06 PM EDT)

News by QuoteMedia
www.quotemedia.com

Legal Notice