Flowserve Corporation FLS, a leading provider of flow control products and services for the global infrastructure markets, today reported its financial results for the third quarter ended September 30, 2016.
Third Quarter 2016 Highlights [1]:
-
Reported Loss Per Share of $0.16 includes $0.68 per share of adjusted
items, as detailed below, and approximately $0.02 per share of
negative currency translation
- Adjusted Earnings Per Share (EPS)[2] was $0.52, excluding the adjusted items but including the negative currency translation
- Adjusted items includes $0.47 per share to reserve for certain Latin American non-cash exposures and realignment expenses of $0.21
-
Sales were $943 million, down 14.0% or 12.1% on a constant currency
basis
- Original equipment sales were $531 million, down 14.5% on a constant currency basis
- Aftermarket sales were $412 million, down 8.8% on a constant currency basis
-
Total Bookings were $960 million, down 7.3% on a constant currency
basis, and down 1.0% sequentially on a constant currency basis
- Aftermarket bookings were $452 million, down 2.1% on a constant currency basis as compared to the 2015 third quarter. Year-to-date aftermarket bookings through September 30, 2016 were up 0.3% on a constant currency basis
- Achieved approximately $37 million of realignment savings in the quarter, and remain on track to deliver expected incremental savings of approximately $100 million in 2016
- Backlog at September 30, 2016 was $2.14 billion, down 1.6% versus year-end 2015 and up 1.7% sequentially, including third quarter book-to-bill of 1.02. Aftermarket backlog exceeded 30% of total backlog for the first time
"Our third quarter results were largely impacted by non-cash reserves recorded in our Latin American operations, as well as lower than expected short-cycle industrial and aftermarket revenues, particularly in September," said Mark Blinn, Flowserve's president and chief executive officer. "Though our energy and industrial customers remain deliberate in their investment decisions, reflected primarily in original equipment orders and continued project acceptance delays, we were pleased to achieve a book-to-bill greater than one for the first time since early 2015. As expected, core aftermarket activity demonstrated booking resiliency; however, ongoing rolling maintenance deferrals continued as our customers remain cautious in the current challenging end-market environment.
"Given the current market dynamics, we continue to remain focused on what we can control, including disciplined cost management, increasing our speed to market through e-commerce and optimizing efficiency across the organization. We are successfully executing on our realignment program and made solid progress towards the structural transformation of our business platform this quarter. As a result of these efforts, we remain on track to achieve our goal of approximately $100 million in incremental savings for the full year 2016. Flowserve has successfully navigated prior cycles, and we are leveraging that experience as we continue to focus on driving increased shareholder value over the long term, including disciplined growth investments and R&D initiatives," Blinn concluded.
Third Quarter 2016
For the third quarter of 2016, Flowserve delivered Adjusted EPS of $0.52 on revenues of $943 million. Reported gross and operating margins were 28.1% and -0.3%. Adjusted gross and operating margins of 32.4% and 11.7% continued to be impacted by lower volumes and under-absorption challenges, particularly in our Engineered and Industrial Product Divisions. Third quarter Adjusted EPS excludes the impact of non-cash charges to reserve for certain Latin American accounts receivables and net inventory exposures totaling $0.47, realignment expenses of $0.21, $0.01 of SIHI purchase price accounting and integration costs and a $0.01 gain from below-the-line FX, but includes $0.02 of negative currency translation. On a reported basis, loss per share for the third quarter was $0.16 per share.
Commenting on third quarter 2016 performance, Karyn Ovelmen, Flowserve's executive vice president and chief financial officer, said, "As a result of the continued deterioration of political and economic conditions in certain Latin American markets during the third quarter, Flowserve recorded non-cash charges totaling $79.1 million to fully reserve for potentially uncollectable undisputed accounts receivable and inventory exposures. While our markets remain challenged, we are pleased with the stability of our backlog thus far in 2016, including a greater mix of higher margin aftermarket work as we continue to benefit from our continued focus on bidding discipline to maintain backlog quality."
Realignment Program & Full Year 2016 Outlook
In the 2016 third quarter, Flowserve continued its progress on the transformational realignment program to repurpose, close or sell a number of manufacturing facilities and reduce total headcount approximately 15-20% by the end of 2017. Flowserve realized cost savings of approximately $37 million in the third quarter and continues to expect full year 2016 incremental savings of approximately $100 million. The Company expensed $37 million during the quarter related to realignment efforts, and for the full year 2016 continues to expect to incur realignment charges of approximately $160 million.
Flowserve updated its 2016 Adjusted[3] EPS target range to $2.05 to $2.25 per share, on expected revenue declines of 11 to 14 percent year-over-year, including a forecasted 2 percent currency headwind. Updated guidance reflects Flowserve's 2016 performance to date, expectations for the continuation of global macro uncertainty and challenging visibility into our end-markets, partially offset by our expected realignment savings as well as a reduced variable incentive compensation.
Segment Performance
Flowserve reports its operations through three segments: Engineered Product Division (EPD), Industrial Product Division (IPD) and Flow Control Division (FCD). Key financial highlights of segment performance for the third quarter and year-to-date include:
| Third Quarter and Year-to-Date 2016 - Segment Results | ||||||||||||||||||||||||||||||
| (dollars in millions, comparison vs. 2015 third quarter and full year, unaudited) | ||||||||||||||||||||||||||||||
| EPD | IPD | FCD | ||||||||||||||||||||||||||||
| 3rd Qtr | YTD | 3rd Qtr | YTD | 3rd Qtr | YTD | |||||||||||||||||||||||||
| Bookings | $ | 497.5 | $ | 1,387.5 | $ | 189.6 | $ | 609.5 | $ | 291.9 | $ | 913.8 | ||||||||||||||||||
| - vs. prior year | -7.4 | % | -13.7 | % | -19.8 | % | -11.7 | % | -6.2 | % | -7.6 | % | ||||||||||||||||||
| - on constant currency | -4.6 | % | -9.8 | % | -19.3 | % | -10.6 | % | -4.9 | % | -5.8 | % | ||||||||||||||||||
| Sales | $ | 455.8 | $ | 1,441.5 | $ | 203.3 | $ | 615.8 | $ | 299.3 | $ | 915.5 | ||||||||||||||||||
| - vs. prior year | -11.4 | % | -8.1 | % | -15.9 | % | -15.2 | % | -18.6 | % | -12.9 | % | ||||||||||||||||||
| - on constant currency | -8.5 | % | -3.9 | % | -14.8 | % | -13.7 | % | -17.9 | % | -11.8 | % | ||||||||||||||||||
| Gross Profit | $ | 126.9 | $ | 449.8 | $ | 32.1 | $ | 132.8 | $ | 107.3 | $ | 314.7 | ||||||||||||||||||
| - vs. prior year | -29.7 | % | -16.1 | % | -53.5 | % | -22.2 | % | -21.4 | % | -17.0 | % | ||||||||||||||||||
| Gross Margin (% of sales) | 27.8 | % | 31.2 | % | 15.8 | % | 21.6 | % | 35.9 | % | 34.4 | % | ||||||||||||||||||
| - vs. prior year (in basis points) | -730 | -290 | -1280 | 190 | -120 | -170 | ||||||||||||||||||||||||
| Operating (Loss) Income | $ | (25.2 | ) | $ | 98.5 | $ | (15.7 | ) | $ | (6.2 | ) | $ | 52.8 | $ | 140.1 | |||||||||||||||
| - vs. prior year | -132.4 | % | -57.7 | % | -162.8 | % | -133.2 | % | -31.5 | % | -24.8 | % | ||||||||||||||||||
| - on constant currency | -127.4 | % | -53.4 | % | -161.6 | % | -125.7 | % | -31.3 | % | -23.9 | % | ||||||||||||||||||
| Operating Margin (% of sales) | -5.5 | % | 6.8 | % | -7.7 | % | -1.0 | % | 17.6 | % | 15.3 | % | ||||||||||||||||||
| - vs. prior year (in basis points) | -2060 | -800 | -1800 | -360 | -340 | -240 | ||||||||||||||||||||||||
| Adjusted Operating Income * | $ | 60.8 | $ | 200.3 | $ | 7.3 | $ | 28.9 | $ | 55.7 | $ | 150.9 | ||||||||||||||||||
| - vs. prior year | -23.4 | % | -18.3 | % | -76.5 | % | -64.1 | % | -27.8 | % | -24.0 | % | ||||||||||||||||||
| - on constant currency | -18.5 | % | -14.2 | % | -75.6 | % | -62.4 | % | -27.5 | % | -23.2 | % | ||||||||||||||||||
| Adj. Oper. Margin (% of sales)* | 13.3 | % | 13.9 | % | 3.6 | % | 4.7 | % | 18.6 | % | 16.5 | % | ||||||||||||||||||
| - vs. prior year (in basis points) | -210 | -170 | -930 | -640 | -240 | -240 | ||||||||||||||||||||||||
| Backlog | $ | 1,114.7 | $ | 434.1 | $ | 620.7 | ||||||||||||||||||||||||
| * | Adjusted Operating Income and Adjusted Operating Margin exclude realignment charges, purchase price accounting charges, acquisition related costs and other specific discrete items |
Third Quarter 2016 Results Conference Call
Flowserve will host its conference call with the financial community on Friday, October 28th at 11:00 AM Eastern. Mark Blinn, 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] Comparisons versus prior year quarter, unless otherwise noted |
|
[2] See Reconciliation of Non-GAAP Measures table for detailed reconciliation of reported results to adjusted measures |
|
[3] Adjusted 2016 EPS will include SIHI's operational results and will exclude the Company's realignment expenses, SIHI purchase price accounting/integration costs, the potential impact from certain other discrete items and below-the-line foreign currency effects |
About Flowserve
Flowserve Corp. is one of the world's leading providers of fluid motion and control products and services. Operating in more than 55 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; 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; our ability to execute and realize the expected financial benefits from our strategic manufacturing optimization and realignment initiatives; economic, political and other risks associated with our international operations, including military actions or trade embargoes that could affect customer markets, particularly 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; 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; a foreign government investigation regarding our participation in the United Nations Oil-for-Food Program; expectations regarding acquisitions and the integration of acquired businesses; our ability to anticipate and manage cybersecurity risk, including the risk of potential business disruptions or financial losses; 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; our inability to protect our intellectual property in the U.S., as well as in foreign countries; obligations under our defined benefit pension plans; 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 BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| September 30, | December 31, | |||||||||
| (Amounts in thousands, except par value) | 2016 | 2015 | ||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 260,870 | $ | 366,444 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $49,665 and $43,936, respectively | 896,755 | 988,391 | ||||||||
| Inventories, net | 1,038,944 | 995,565 | ||||||||
| Prepaid expenses and other | 186,311 | 125,410 | ||||||||
| Total current assets | 2,382,880 | 2,475,810 | ||||||||
| Property, plant and equipment, net of accumulated depreciation of $906,726 and $855,214, respectively | 750,128 | 758,427 | ||||||||
| Goodwill | 1,229,817 | 1,223,986 | ||||||||
| Deferred taxes | 76,095 | 69,327 | ||||||||
| Other intangible assets, net | 219,280 | 228,777 | ||||||||
| Other assets, net | 195,402 | 224,330 | ||||||||
| Total assets | $ | 4,853,602 | $ | 4,980,657 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 394,600 | $ | 491,378 | ||||||
| Accrued liabilities | 731,928 | 796,764 | ||||||||
| Debt due within one year | 75,211 | 60,434 | ||||||||
| Total current liabilities | 1,201,739 | 1,348,576 | ||||||||
| Long-term debt due after one year | 1,535,678 | 1,560,562 | ||||||||
| Retirement obligations and other liabilities | 402,645 | 387,786 | ||||||||
| 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 | 491,639 | 494,961 | ||||||||
| Retained earnings | 3,591,867 | 3,587,120 | ||||||||
| Treasury shares, at cost – 46,977 and 47,703 shares, respectively | (2,078,439 | ) | (2,106,785 | ) | ||||||
| Deferred compensation obligation | 8,369 | 10,233 | ||||||||
| Accumulated other comprehensive loss | (540,006 | ) | (540,043 | ) | ||||||
| Total Flowserve Corporation shareholders' equity | 1,694,421 | 1,666,477 | ||||||||
| Noncontrolling interests | 19,119 | 17,256 | ||||||||
| Total equity | 1,713,540 | 1,683,733 | ||||||||
| Total liabilities and equity | $ | 4,853,602 | $ | 4,980,657 | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended September 30, | ||||||||||
| (Amounts in thousands, except per share data) | 2016 | 2015 | ||||||||
| Sales | $ | 943,334 | $ | 1,096,476 | ||||||
| Cost of sales | (677,891 | ) | (707,726 | ) | ||||||
| Gross profit | 265,443 | 388,750 | ||||||||
| Selling, general and administrative expense | (271,643 | ) | (223,516 | ) | ||||||
| Net earnings from affiliates | 3,394 | 2,615 | ||||||||
| Operating (loss) income | (2,806 | ) | 167,849 | |||||||
| Interest expense | (15,141 | ) | (16,283 | ) | ||||||
| Interest income | 924 | 499 | ||||||||
| Other income (expense), net | 1,899 | (5,430 | ) | |||||||
| (Loss) earnings before income taxes | (15,124 | ) | 146,635 | |||||||
| Provision for income taxes | (4,996 | ) | (52,099 | ) | ||||||
| Net (loss) earnings, including noncontrolling interests | (20,120 | ) | 94,536 | |||||||
| Less: Net earnings attributable to noncontrolling interests | (808 | ) | (913 | ) | ||||||
| Net (loss) earnings attributable to Flowserve Corporation | $ | (20,928 | ) | $ | 93,623 | |||||
| Net (loss) earnings per share attributable to Flowserve Corporation common shareholders: | ||||||||||
| Basic | $ | (0.16 | ) | $ | 0.71 | |||||
| Diluted | (0.16 | ) | 0.70 | |||||||
| Cash dividends declared per share | $ | 0.19 | $ | 0.18 | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
| (Unaudited) | ||||||||||
| Nine Months Ended September 30, | ||||||||||
| (Amounts in thousands, except per share data) | 2016 | 2015 | ||||||||
| Sales | $ | 2,916,814 | $ | 3,273,342 | ||||||
| Cost of sales | (2,018,646 | ) | (2,183,770 | ) | ||||||
| Gross profit | 898,168 | 1,089,572 | ||||||||
| Selling, general and administrative expense | (737,083 | ) | (707,037 | ) | ||||||
| Net earnings from affiliates | 8,522 | 6,268 | ||||||||
| Operating income | 169,607 | 388,803 | ||||||||
| Interest expense | (44,982 | ) | (47,712 | ) | ||||||
| Interest income | 2,243 | 1,504 | ||||||||
| Other income (expense), net | 2,091 | (30,258 | ) | |||||||
| Earnings before income taxes | 128,959 | 312,337 | ||||||||
| Provision for income taxes | (47,809 | ) | (111,525 | ) | ||||||
| Net earnings, including noncontrolling interests | 81,150 | 200,812 | ||||||||
| Less: Net earnings attributable to noncontrolling interests | (1,222 | ) | (4,515 | ) | ||||||
| Net earnings attributable to Flowserve Corporation | $ | 79,928 | $ | 196,297 | ||||||
| Net earnings per share attributable to Flowserve Corporation common shareholders: | ||||||||||
| Basic | $ | 0.61 | $ | 1.47 | ||||||
| Diluted | 0.61 | 1.46 | ||||||||
| Cash dividends declared per share | $ | 0.57 | $ | 0.54 | ||||||
| RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended September 30, 2016 | ||||||||||||||||||||
| (Amounts in thousands, except per share data) | As Reported (a) | Realignment (1) | Other Items | As Adjusted | ||||||||||||||||
| Sales | $ | 943,334 | $ | - | $ | - | $ | 943,334 | ||||||||||||
| Gross profit (loss) | 265,443 | (24,503 | ) | (15,930 | ) | (3) | 305,876 | |||||||||||||
| Gross margin (loss) | 28.1 | % | - | - | 32.4 | % | ||||||||||||||
| Selling, general and administrative expense | (271,643 | ) | (6,983 | ) | (65,822 | ) | (4) | (198,838 | ) | |||||||||||
| Operating (loss) income | (2,806 | ) | (31,486 | ) | (81,752 | ) | 110,432 | |||||||||||||
| Operating income (loss) as a percentage of sales | -0.3 | % | - | - | 11.7 | % | ||||||||||||||
| Interest and other (expense) income, net | (12,318 | ) | - | 1,357 | (5) | (13,675 | ) | |||||||||||||
| (Loss) earnings before income taxes | (15,124 | ) | (31,486 | ) | (80,395 | ) | 96,757 | |||||||||||||
| Provision for income taxes | (4,996 | ) | 4,203 | (2) | 19,129 | (6) | (28,328 | ) | ||||||||||||
| Tax Rate | -33.0 | % | 13.3 | % | 23.8 | % | 29.3 | % | ||||||||||||
| Net (loss) earnings attributable to Flowserve Corporation | $ | (20,928 | ) | $ | (27,283 | ) | $ | (61,266 | ) | $ | 67,621 | |||||||||
| Net earnings per share attributable to Flowserve Corporation common shareholders: | ||||||||||||||||||||
| Basic | $ | (0.16 | ) | $ | (0.21 | ) | $ | (0.47 | ) | $ | 0.52 | |||||||||
| Diluted | $ | (0.16 | ) | $ | (0.21 | ) | $ | (0.47 | ) | $ | 0.52 | |||||||||
| Basic number of shares used for calculation | 130,299 | 130,558 | 130,558 | 130,558 | ||||||||||||||||
| Diluted number of shares used for calculation | 130,299 | 131,102 | 131,102 | 131,102 | ||||||||||||||||
| (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 offset by $5.400 million of realignment expense recorded in provision for income taxes |
|
(3) Represents Brazil inventory write-down of $14.064 million and Venezuela inventory reserve of $1.866 million |
| (4) Represents Venezuela accounts receivable reserve of $63.192 million and SIHI integration costs/purchase price adjustments ("PPA") of $2.630 million |
| (5) Represents below-the-line foreign exchange impacts |
| (6) Includes tax impact of items above |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (Unaudited) | ||||||||||
| Nine Months Ended September 30, | ||||||||||
| (Amounts in thousands) | 2016 | 2015 | ||||||||
| Cash flows – Operating activities: | ||||||||||
| Net earnings, including noncontrolling interests | $ | 81,150 | $ | 200,812 | ||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||
| Depreciation | 74,875 | 73,652 | ||||||||
| Amortization of intangible and other assets | 12,424 | 25,918 | ||||||||
| Loss on divestiture of business | 7,664 | - | ||||||||
| Excess tax benefits from stock-based payment arrangements | (2,480 | ) | (6,822 | ) | ||||||
| Stock-based compensation | 29,966 | 26,027 | ||||||||
| Latin America accounts receivable reserve and inventory write-downs | 79,122 | - | ||||||||
| Foreign currency and other non-cash adjustments | 940 | 54,635 | ||||||||
| Change in assets and liabilities, net of acquisitions: | ||||||||||
| Accounts receivable, net | 70,190 | 66,660 | ||||||||
| Inventories, net | (47,375 | ) | (119,530 | ) | ||||||
| Prepaid expenses and other | (59,799 | ) | (42,361 | ) | ||||||
| Other assets, net | (19,512 | ) | (17,890 | ) | ||||||
| Accounts payable | (97,838 | ) | (157,930 | ) | ||||||
| Accrued liabilities and income taxes payable | (90,304 | ) | (2,989 | ) | ||||||
| Retirement obligations and other | 7,821 | (6,402 | ) | |||||||
| Net deferred taxes | 11,349 | 37,261 | ||||||||
| Net cash flows provided by operating activities | 58,193 | 131,041 | ||||||||
| Cash flows – Investing activities: | ||||||||||
| Capital expenditures | (64,475 | ) | (138,532 | ) | ||||||
| Payments for acquisition, net of cash acquired | - | (353,654 | ) | |||||||
| Proceeds from disposal of assets | 632 | 4,103 | ||||||||
| Payment for divestiture of business | (5,064 | ) | - | |||||||
| Net cash flows used by investing activities | (68,907 | ) | (488,083 | ) | ||||||
| Cash flows – Financing activities: | ||||||||||
| Excess tax benefits from stock-based payment arrangements | 2,480 | 6,822 | ||||||||
| Payments on long-term debt | (45,000 | ) | (30,000 | ) | ||||||
| Proceeds from issuance of senior notes | - | 526,332 | ||||||||
| Payments of deferred loan costs | - | (5,108 | ) | |||||||
| Proceeds under other financing arrangements | 24,701 | 8,157 | ||||||||
| Payments under other financing arrangements | (12,060 | ) | (15,524 | ) | ||||||
| Repurchases of common shares | - | (249,682 | ) | |||||||
| Payments of dividends | (72,960 | ) | (70,000 | ) | ||||||
| Other | 1,325 | 192 | ||||||||
| Net cash flows (used) provided by financing activities | (101,514 | ) | 171,189 | |||||||
| Effect of exchange rate changes on cash | 6,654 | (26,655 | ) | |||||||
| Net change in cash and cash equivalents | (105,574 | ) | (212,508 | ) | ||||||
| Cash and cash equivalents at beginning of period | 366,444 | 450,350 | ||||||||
| Cash and cash equivalents at end of period | $ | 260,870 | $ | 237,842 | ||||||
| SEGMENT INFORMATION | ||||||||||
| ENGINEERED PRODUCT DIVISION | Three Months Ended September 30, | |||||||||
| (Amounts in millions, except percentages) | 2016 | 2015 | ||||||||
| Bookings | $ | 497.5 | $ | 537.5 | ||||||
| Sales | 455.8 | 514.5 | ||||||||
| Gross profit | 126.9 | 180.4 | ||||||||
| Gross profit margin | 27.8 | % | 35.1 | % | ||||||
| Operating (loss) income | (25.2 | ) | 77.7 | |||||||
| Operating margin | (5.5 | %) | 15.1 | % | ||||||
| INDUSTRIAL PRODUCT DIVISION | Three Months Ended September 30, | |||||||||
| (Amounts in millions, except percentages) | 2016 | 2015 | ||||||||
| Bookings | $ | 189.6 | $ | 236.5 | ||||||
| Sales | 203.3 | 241.6 | ||||||||
| Gross profit | 32.1 | 69.0 | ||||||||
| Gross profit margin | 15.8 | % | 28.6 | % | ||||||
| Operating (loss) income | (15.7 | ) | 25.0 | |||||||
| Operating margin | (7.7 | %) | 10.3 | % | ||||||
| FLOW CONTROL DIVISION | Three Months Ended September 30, | |||||||||
| (Amounts in millions, except percentages) | 2016 | 2015 | ||||||||
| Bookings | $ | 291.9 | $ | 311.1 | ||||||
| Sales | 299.3 | 367.9 | ||||||||
| Gross profit | 107.3 | 136.6 | ||||||||
| Gross profit margin | 35.9 | % | 37.1 | % | ||||||
| Operating income | 52.8 | 77.1 | ||||||||
| Operating margin | 17.6 | % | 21.0 | % | ||||||
| SEGMENT INFORMATION | ||||||||||
| ENGINEERED PRODUCT DIVISION | Nine Months Ended September 30, | |||||||||
| (Amounts in millions, except percentages) | 2016 | 2015 | ||||||||
| Bookings | $ | 1,387.5 | $ | 1,608.0 | ||||||
| Sales | 1,441.5 | 1,569.4 | ||||||||
| Gross profit | 449.8 | 535.9 | ||||||||
| Gross profit margin | 31.2 | % | 34.1 | % | ||||||
| Operating income | 98.5 | 232.8 | ||||||||
| Operating margin | 6.8 | % | 14.8 | % | ||||||
| INDUSTRIAL PRODUCT DIVISION | Nine Months Ended September 30, | |||||||||
| (Amounts in millions, except percentages) | 2016 | 2015 | ||||||||
| Bookings | $ | 609.5 | $ | 689.9 | ||||||
| Sales | 615.8 | 725.8 | ||||||||
| Gross profit | 132.8 | 170.7 | ||||||||
| Gross profit margin | 21.6 | % | 23.5 | % | ||||||
| Operating (loss) income | (6.2 | ) | 18.7 | |||||||
| Operating margin | (1.0 | %) | 2.6 | % | ||||||
| FLOW CONTROL DIVISION | Nine Months Ended September 30, | |||||||||
| (Amounts in millions, except percentages) | 2016 | 2015 | ||||||||
| Bookings | $ | 913.8 | $ | 988.6 | ||||||
| Sales | 915.5 | 1,051.5 | ||||||||
| Gross profit | 314.7 | 379.2 | ||||||||
| Gross profit margin | 34.4 | % | 36.1 | % | ||||||
| Operating income | 140.1 | 186.3 | ||||||||
| Operating margin | 15.3 | % | 17.7 | % | ||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161027006831/en/
Flowserve Corporation
Investor Contacts:
Jay Roueche,
972-443-6560
Vice President, IR & Treasurer
or
Mike
Mullin, 972-443-6636
Director, Investor Relations
or
Media
Contact:
Lars Rosene, 972-443-6644
Vice President, Global
Communications and Public Affairs
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