• Reported and Adjusted¹ Earnings Per Share (EPS) of 20 cents and 40 cents, respectively

• Achieved fifth consecutive quarter of bookings above $1 billion with $1.06 billion delivered in the first quarter; driven by strong MRO and Aftermarket activity and combined with the continued success of the 3D strategy

• Delivered strong revenue growth of 19.4%, generating adjusted operating margin of 8.3% with year-over-year incremental adjusted operating margins of 33.9%

• Book-to-bill of 1.08x increased backlog by 2.6%, or $71 million, to $2.8 billion on a sequential basis

• Velan acquisition is now expected to close early in the third quarter of 2023

• Strong first quarter financial performance supports raising full year guidance range for Revenues and Adjusted EPS

DALLAS--(BUSINESS WIRE)--May 1, 2023-- 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 first quarter ended March 31, 2023.

First Quarter 2023 Highlights (all comparisons to the 2022 first quarter, unless otherwise noted)

• Reported Earnings Per Share (EPS) of $0.20 and Adjusted Earnings Per Share (EPS)¹ of $0.40
  • Reported EPS includes a net after-tax adjusted loss of $25.9 million, comprised primarily of realignment charges and below-the-line foreign exchange impacts
• Total bookings were $1.06 billion, down 2.7%, or 0.5% on a constant currency basis
  • Original equipment bookings were $506.9 million, down 6.8% or 4.5% on a constant currency basis
  • Aftermarket bookings were $550.3 million, up 1.5%, or 3.5% on a constant currency basis
• Sales were $980.3 million, up 19.4%, or 22.3% on a constant currency basis
  • Original equipment sales were $463.5 million, up 21.0%, or 24.1% on a constant currency basis
  • Aftermarket sales were $516.8 million, up 18.0%, or 20.7% on a constant currency basis
• Reported gross and operating margins were 30.3% and 5.8%, respectively
  • Adjusted gross and operating margins² were 30.4% and 8.3%, respectively

“We delivered a very strong start to 2023, building on the momentum established in the fourth quarter of 2022,” said Scott Rowe, Flowserve’s president and chief executive officer. “Our performance was supported by improved operational execution and healthy revenue growth which enabled us to achieve adjusted gross margins above 30%. Thanks to the continued commitment of our associates, both of our segments exceeded our previous revenue, margin and bookings expectations for the period, validating the process improvement actions implemented over the past year.“

Rowe concluded, “Our end markets remain supportive as demonstrated by our strong first quarter bookings, representing the fifth consecutive quarter of bookings over $1 billion. We are confident in our outlook as our project opportunity funnel continues to grow and our MRO and aftermarket business is at record levels. Looking ahead, our priorities are clear- improving execution, converting our $2.8 billion backlog, continuing to progress our 3D growth strategy (Diversify, Decarbonize, Digitize) and integrating the pending Velan transaction. We believe executing these actions will drive sustainable growth and value creation for all of our stakeholders.”

Revised 2023 Guidance³

Flowserve is raising its Revenue and Adjusted EPS guidance metrics for 2023, as well as re-affirming certain other financial metrics, as shown in the table below:

The outlook excludes any contribution from the previously announced pending acquisition of Velan Inc. Additionally, Flowserve’s 2023 Adjusted EPS target range also excludes expected adjusted items including realignment charges of approximately $25 million, as well as the potential impact of below-the-line foreign currency effects and certain other discrete items which may arise during the course of the year.

First Quarter 2023 Results Conference Call

Flowserve will host its conference call with the financial community on Tuesday, May 2^nd 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.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230501005619/en/

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

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

Source: Flowserve Corporation