• Strong bookings of $1.04 billion increased 9.6% year-over-year and 14.5% constant currency, marking the second consecutive quarter with bookings over $1 billion

• Backlog of $2.32 billion at June 30 was up 15.6% versus 2021 year-end and 18.8% year-over-year, reaching its highest level since Q3 2015 and positioning the Company for growth

• Diversify, Decarbonize and Digitize (“3D”) strategy accelerating bookings growth in current market conditions

• Sequential incremental adjusted operating margin of 60% on 7.4% revenue growth

• Reported Earnings Per Share of 34 cents, includes 4 cents of net benefit due primarily to $10 million below-the-line foreign exchange gain

• Adjusted Earnings Per Share of 30 cents, exceeding prior expectations

DALLAS--(BUSINESS WIRE)--Jul. 27, 2022-- 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, 2022.

Second Quarter 2022 Highlights (all comparisons to the 2021 second quarter, unless otherwise noted)

• Reported Earnings Per Share (EPS) of $0.34 and Adjusted EPS¹ of $0.30
  • Reported EPS includes a $10.1 million below-the-line FX benefit, partially offset by a $3.0 million discrete asset write-down and modest realignment expenses

• Total bookings were $1.04 billion, up 9.6%, or 14.5% on a constant currency basis
  • Original equipment bookings were $518.0 million, up 21.1% or 26.9% on a constant currency basis
  • Aftermarket bookings were $526.0 million, up 0.2%, or 4.5% on a constant currency basis

• Sales were $882.2 million, down 1.8%, or up 2.8% on a constant currency basis
  • Original equipment sales were $411.3 million, down 5.3%, or 0.2% on a constant currency basis
  • Aftermarket sales were $470.9 million, up 1.6%, or up 5.7% on a constant currency basis

• Reported gross and operating margins were 28.3% and 6.8%, respectively
  • Adjusted gross and operating margins² were 28.4% and 7.2%, respectively

“We delivered strong sequential earnings and margin improvement in the second quarter, supported by solid operational execution and continued efforts to mitigate ongoing supply chain and inflationary headwinds,” said Scott Rowe, Flowserve’s president and chief executive officer. “With our strong customer relationships and comprehensive flow control portfolio, we continued to capitalize on healthy demand across our served markets, which drove solid bookings growth, particularly within our aftermarket and MRO-focused businesses. We expect improved demand for both our traditional energy and energy transition offerings to continue in the quarters ahead, as our project funnel continues to grow.”

Rowe concluded, “Flowserve is well positioned to deliver further revenue and earnings growth in the second half of the year. These expectations are driven by our highest backlog since 2015 and our belief that supportive end-markets will continue, particularly for energy, chemical and power investments. Our 3D strategy to diversify, decarbonize and digitize has gained significant traction year-to-date, with strong first half bookings exceeding our targets, particularly as a result of strength in decarbonization and energy transition projects. Looking forward, we will continue to take action to mitigate external headwinds while we focus on accelerating our backlog conversion and margin expansion. We expect to build on our progress and exit 2022 with positive momentum, positioning us well to deliver substantial long-term value to our customers, shareholders and associates.”

2022 Guidance³

Flowserve today reaffirmed its previously announced target ranges, as well as certain other financial metrics, it has provided in its full-year 2022 guidance issued on May 3, 2022. The company did indicate, however, that should the US Dollar persist at the current strong level through the remainder of the year, it expects full-year revenue, GAAP EPS and Adjusted EPS at the low end of those respective ranges. The company also noted that it expects to exit the fourth quarter of 2022 with an adjusted operating margin in the 12% to 14% range.

Second Quarter 2022 Results Conference Call

Flowserve will host its conference call with the financial community on Thursday, July 28^th 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 second-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.

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Flowserve Contacts

Investor Contacts:
Jay Roueche, Vice President, Investor Relations & Treasurer (972) 443-6560
Mike Mullin, Director, Investor Relations (214) 697-8568

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

Source: Flowserve Corporation