Flowserve Corporation Reports Fourth Quarter and Full-Year Results

Rhea-AI Summary

Flowserve (NYSE: FLS) reported strong Q4 and full-year 2024 results, with Q4 bookings reaching $1.2 billion, including $618 million in aftermarket activity. The company achieved notable improvements in key metrics:

- Q4 gross margin increased to 31.5% (32.8% adjusted), up 240-300 basis points year-over-year
- Operating income rose to $125 million (14% increase) and adjusted operating income to $149 million (22% increase)
- Operating cash flow reached $197 million
- Power bookings grew over 40% year-over-year, with nuclear awards exceeding $110 million

For 2025, Flowserve projects organic sales growth of 3-5% and adjusted EPS of $3.10-$3.30, representing a 22% increase at midpoint versus 2024. The company also authorized a quarterly dividend of $0.21 per share, payable April 11, 2025.

Positive

• Q4 bookings increased 12.6% to $1.2 billion
• Operating margin improved 120 basis points to 10.6%
• Full-year operating cash flow up 30.5% to $425.3 million
• Power division bookings grew over 40% year-over-year
• Gross margin expanded 240 basis points to 31.5%
• Projected 22% EPS growth for 2025

Negative

• Q4 sales growth to 1.3% year-over-year
• Organic sales declined 90 basis points in Q4
• Flow Control Division operating margin decreased to 11.5% from 14.8%

Insights

Financial Analyst

Flowserve's Q4 and FY2024 results reveal a company successfully executing its operational transformation while capitalizing on robust market demand. The implementation of the Flowserve Business System and 3D strategy has yielded tangible results, evidenced by the 300 basis point expansion in adjusted gross margins to 32.8%.

The 40% surge in power sector bookings, including $110 million in nuclear awards, signals Flowserve's strong positioning in the energy transition market. This growth, combined with an 11.7% increase in aftermarket bookings to $618.1 million, demonstrates the company's ability to capture both new infrastructure investments and recurring maintenance revenue streams.

The Flowserve Pumps Division showed particularly impressive performance with segment operating margins expanding to 16.2%, while the Flow Control Division maintained solid profitability at 11.5%. The company's working capital optimization efforts have translated into strong cash generation, with operating cash flow reaching $197.3 million in Q4, supporting both organic growth initiatives and shareholder returns through the maintained quarterly dividend of $0.21 per share.

The 2025 guidance, projecting 22% adjusted EPS growth at midpoint, reflects management's confidence in continued operational improvements and market opportunities. The expected 300 basis point contribution from acquisitions, particularly MOGAS, indicates successful integration efforts and synergy realization.

3D Strategy and Flowserve Business System Deliver Sales and Earnings Growth

DALLAS--(BUSINESS WIRE)-- Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, reported its financial results for the fourth quarter and full year ended December 31, 2024.

Highlights (unaudited):

• Fourth quarter bookings of $1.2 billion, including $618 million of aftermarket activity
• Power bookings increased more than 40% year-over-year, with over $110 million in nuclear awards during the fourth quarter
• Gross margin and adjusted¹ gross margin² of 31.5% and 32.8%, respectively, increased 240 and 300 basis points versus the prior year period
• Operating income and adjusted operating income³ of $125 million and $149 million, respectively, an increase of 14% and 22% compared to last year
• Operating cash flow of $197 million driven by strong earnings and working capital improvements
• Initiated full-year 2025 guidance⁴, including organic sales growth of 3% to 5% and adjusted Earnings Per Share (EPS) of $3.10 to $3.30, which at the midpoint, represents a 22% increase versus full-year 2024 adjusted EPS⁵

Management Commentary:

“We made significant progress throughout 2024, launching the Flowserve Business System and leveraging our 3D strategy to drive solid top-line growth, expand margins, increase adjusted earnings, and deliver strong cash flow,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “I am grateful for the dedication and effort of our associates who are improving our execution and positioning Flowserve for continued near-term and long-term growth.”

Rowe continued, “Activity across our markets remains robust as customers leverage our capabilities to address ongoing demand, improve efficiency, and advance decarbonization investments. We enter 2025 with strong momentum, which we expect to build on through enhanced operational execution and our 80-20 complexity reduction efforts. With these levers, we are well-positioned to continue creating long-term value for our customers, shareholders, and associates.”

Key Figures (unaudited):

(dollars in millions, except per share)		2024 Q4		2023 Q4	Change		2024		2023		Change
Backlog		$2,789.6		$2,695.1	3.5%		$2,789.6		$2,695.1		3.5%
Bookings		$1,175.3		$1,043.6	12.6%		$4,660.8		$4,271.8		9.1%
Original Equipment		$557.2		$490.3	13.6%		$2,238.4		$1,995.1		12.2%
Aftermarket		$618.1		$553.3	11.7%		$2,422.4		$2,276.7		6.4%
Sales6		$1,180.3		$1,165.2	1.3%		$4,557.8		$4,320.6		5.5%
Organic					(90) bps						510 bps
Acquisitions					320 bps						90 bps
Foreign Exchange					(100) bps						(50) bps
Operating Margin		10.6%		9.4%	120 bps		10.1%		7.7%		240 bps
Adjusted Operating Margin3		12.6%		10.5%	210 bps		11.8%		9.5%		230 bps
Earnings Per Share		$0.59		$0.47	25.5%		$2.14		$1.42		50.7%
Adjusted Earnings Per Share		$0.70		$0.68	2.9%		$2.63		$2.10		25.2%
Cash From Operations		$197.3		$194.6	1.4%		$425.3		$325.8		30.5%

2025 Guidance:

	Target range
Organic sales growth	+3% to +5%
Impact from acquisitions	Approx. +300 bps
Impact from foreign exchange translation	Approx. (100 bps)
Total sales growth	+5% to +7%
Adjusted EPS	$3.10 to $3.30
Net interest expense	Approx. $70 million
Adjusted tax rate	Approx. 21%
Capital expenditures	$80 to $90 million

Excluding sales, Flowserve provides guidance only on a non-GAAP basis due to the inherent and increasing difficulty and unreasonable effort required to forecast certain amounts that would be included in GAAP earnings. This includes, but is not limited to, items such as foreign currency fluctuations, realignment expenses, impairments, and discrete tax events. As a result, we have not provided a reconciliation to the most comparable GAAP financial measures for these forward-looking non-GAAP measures.

Authorized Dividend:

Flowserve’s Board of Directors authorized a quarterly cash dividend of $0.21 per share on the Company's outstanding shares of common stock. The dividend is payable on April 11, 2025, to shareholders of record as of the close of business on March 28, 2025. While Flowserve currently intends to pay regular quarterly cash dividends for the foreseeable future, any future dividends, at this $0.21 per share rate or otherwise, will be reviewed individually and declared by the Board at its discretion.

Webcast and Conference Call Instructions:

Flowserve will host its conference call to discuss fourth quarter results on Wednesday, February 19, at 10:00 a.m. Eastern Time. The call can be accessed by shareholders and other interested parties on Flowserve’s Investors page.

Footnotes (pages 1-2)

1 See Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited) and Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited) tables for a detailed reconciliation of reported results to adjusted measures.

2 Adjusted gross margin is calculated by dividing adjusted gross profit by sales. Adjusted gross profit is derived by excluding the adjusted items.

3 Adjusted operating margin is calculated by dividing adjusted operating income by sales. Adjusted operating income is derived by excluding the adjusted items.

4 Adjusted 2025 EPS includes expected 16 cent contribution from MOGAS operations (inclusive of $7 million cost synergy benefit) and excludes potential realignment expenses, below-the-line foreign currency effects, and certain other discrete items which may arise during the year and utilizes prevailing FX rates and approximately 132 million fully diluted shares.

5 Adjusted 2024 EPS excludes realignment expenses, the impact from other specific discrete and below-the-line foreign currency effects and utilizes the then-applicable FX rates and approximately 132 million fully diluted shares.

6 Organic is defined as the change in sales, as defined by U.S. GAAP, excluding the impacts of currency translation and acquisitions. The impact of currency translation is calculated by translating current year results on a monthly basis at prior year exchange rates for the same period.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Three Months Ended December 31,
(Amounts in thousands, except per share data)		2024				2023
Sales	$	1,180,348			$	1,165,179
Cost of sales		(808,234	)			(825,635	)
Gross profit		372,114				339,544
Selling, general and administrative expense		(251,966	)			(234,744	)
Net earnings from affiliates		4,557				4,663
Operating income		124,705				109,463
Interest expense		(20,481	)			(16,886	)
Interest income		1,625				1,457
Other income (expense), net		(137	)			(22,599	)
Earnings before income taxes		105,712				71,435
(Provision for) benefit from income taxes		(22,202	)			(3,991	)
Net earnings, including noncontrolling interests		83,510				67,444
Less: Net earnings attributable to noncontrolling interests		(5,969	)			(4,827	)
Net earnings attributable to Flowserve Corporation	$	77,541			$	62,617
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	0.59			$	0.48
Diluted		0.59				0.47
Weighted average shares – basic		131,393				131,184
Weighted average shares – diluted		132,395				132,132

Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended December 31, 2024	Gross Profit			Selling, General & Administrative Expense			Operating Income			Other Income (Expense), Net			Provision For (Benefit From) Income Taxes			Net Earnings (Loss)			Effective Tax Rate		Diluted EPS
Reported	$	372,114		$	251,966		$	124,705		$	(138	)	$	22,202		$	77,541		21.0	%	0.59
Reported as a percent of sales		31.5	%		21.3	%		10.6	%		0.0	%		1.9	%		6.6	%
Realignment charges (a)		11,569			(1,570	)		13,139			-			2,849			10,290		21.7	%	0.08
Acquisition related (b)		-			(7,150	)		7,150			-			1,682			5,468		23.5	%	0.04
Purchase accounting step-up and intangible asset amortization (c)		3,067			(1,033	)		4,100			-			1,300			2,800		31.7	%	0.02
Below-the-line foreign exchange impacts (d)		-			-			-			(4,370	)		(1,423	)		(2,947	)	32.6	%	(0.02	)
Adjusted	$	386,750		$	242,213		$	149,094		$	(4,508	)	$	26,610		$	93,152		21.2	%	0.70
Adjusted as a percent of sales		32.8	%		20.5	%		12.6	%		-0.4	%		2.3	%		7.9	%
Note: Amounts may not calculate due to rounding
(a) Charges represent realignment costs incurred as a result of realignment programs of which $8,600 is non-cash.
(b) Charge represents acquisition and integration related costs associated with the MOGAS acquisition.
(c) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.
(d) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.
Three Months Ended December 31, 2023	Gross Profit			Selling, General & Administrative Expense			Operating Income			Other Income (Expense), Net			Provision For (Benefit From) Income Taxes			Net Earnings (Loss)			Effective Tax Rate		Diluted EPS
Reported	$	339,544		$	234,744		$	109,463		$	(22,599	)	$	3,991		$	62,617		5.6	%	0.47
Reported as a percent of sales		29.1	%		20.1	%		9.4	%		-1.9	%		0.3	%		5.4	%
Realignment charges (a)		9,464			(5,949	)		15,413			-			4,534			10,879		29.4	%	0.08
Discrete asset write-downs (b)(c)		(1,254	)		-			(1,254	)		2,000			94			652		12.6	%	0.01
Acquisition related (d)		-			1,244			(1,244	)		-			(293	)		(951	)	23.6	%	(0.01	)
Below-the-line foreign exchange impacts (e)		-			-			-			16,764			(274	)		17,038		-1.6	%	0.13
Adjusted	$	347,754		$	230,039		$	122,378		$	(3,835	)	$	8,052		$	90,235		7.8	%	0.68
Adjusted as a percent of sales		29.8	%		19.7	%		10.5	%		-0.3	%		0.7	%		7.7	%
Note: Amounts may not calculate due to rounding
(a) Charges represent realignment costs incurred as a result of realignment programs of which $2,100 is non-cash.
(b) Includes reversals of expenses that were adjusted for Non-GAAP measures in previous periods of $1,254.
(c) Charge represents a non-cash asset write-down of $2,000 associated with the impairment of an equity investment.
(d) Represents reversal of costs associated with a terminated acquisition that were adjusted for Non-GAAP measures in previous periods.
(e) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.

SEGMENT INFORMATION
(Unaudited)
FLOWSERVE PUMPS DIVISION	Three Months Ended December 31,
(Amounts in millions, except percentages)		2024				2023
Bookings	$	816.4			$	722.2
Sales		794.9				832.8
Gross profit		255.7				238.2
Gross profit margin		32.2	%			28.6	%
SG&A		131.4				149.4
Segment operating income		129.1				93.5
Segment operating income as a percentage of sales		16.2	%			11.2	%
FLOW CONTROL DIVISION	Three Months Ended December 31,
(Amounts in millions, except percentages)		2024				2023
Bookings	$	363.4			$	326.9
Sales		387.9				336.0
Gross profit		118.5				101.9
Gross profit margin		30.5	%			30.3	%
SG&A		73.9				52.1
Segment operating income		44.6				49.8
Segment operating income as a percentage of sales		11.5	%			14.8	%

Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands)
Flowserve Pumps Division
Three Months Ended December 31, 2024	Gross Profit			Selling, General & Administrative Expense			Operating Income				Three Months Ended December 31, 2023	Gross Profit			Selling, General & Administrative Expense			Operating Income
Reported	$	255,710		$	131,402		$	129,069			Reported	$	238,213		$	149,354		$	93,522
Reported as a percent of sales		32.2	%		16.5	%		16.2	%		Reported as a percent of sales		28.6	%		17.9	%		11.2	%
Realignment charges (a)		9,890			(41	)		9,931			Realignment charges (a)		3,313			(2,537	)		5,850
Adjusted	$	265,600		$	131,361		$	139,000			Discrete asset write-downs (b)		(1,254	)		-			(1,254	)
Adjusted as a percent of sales		33.4	%		16.5	%		17.5	%		Adjusted	$	240,272		$	146,817		$	98,118
											Adjusted as a percent of sales		28.9	%		17.6	%		11.8	%
Flow Control Division											Flow Control Division
Three Months Ended December 31, 2024	Gross Profit			Selling, General & Administrative Expense			Operating Income				Three Months Ended December 31, 2023	Gross Profit			Selling, General & Administrative Expense			Operating Income
Reported	$	118,503		$	73,859		$	44,592			Reported	$	101,894		$	52,056		$	49,838
Reported as a percent of sales		30.5	%		19.0	%		11.5	%		Reported as a percent of sales		30.3	%		15.5	%		14.8	%
Realignment charges (a)		1,679			(1,655	)		3,334			Realignment charges (a)		6,313			(915	)		7,228
Acquisition related (b)		-			(7,150	)		7,150			Acquisition related (c)		-			1,244			(1,244	)
Purchase accounting step-up and intangible asset amortization (c)		3,067			(1,033	)		4,100			Adjusted	$	108,207		$	52,385		$	55,822
Adjusted	$	123,249		$	64,021		$	59,176			Adjusted as a percent of sales		32.2	%		15.6	%		16.6	%
Adjusted as a percent of sales		31.8	%		16.5	%		15.3	%
Note: Amounts may not calculate due to rounding											Note: Amounts may not calculate due to rounding
(a) Charges represent realignment costs incurred as a result of realignment programs of which $8,600 is non-cash.											(a) Charges represent realignment costs incurred as a result of realignment programs of which $2,100 is non-cash.
(b) Charge represents acquisition and integration-related costs associated with the MOGAS acquisition.											(b) Represents reversals of expenses that were adjusted for Non-GAAP measures in previous periods.
(c) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.											(c) Represents reversal of costs associated with a terminated acquisition that were adjusted for Non-GAAP measures in previous periods.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Year Ended December 31,
(Amounts in thousands, except per share data)		2024				2023				2022
Sales	$	4,557,806			$	4,320,577			$	3,615,120
Cost of sales		(3,123,560	)			(3,043,749	)			(2,620,825	)
Gross profit		1,434,246				1,276,828				994,295
Selling, general and administrative expense		(978,037	)			(961,169	)			(815,545	)
Loss on sale of business		(12,981	)			-				-
Net earnings from affiliates		19,051				17,894				18,469
Operating income		462,279				333,553				197,219
Interest expense		(69,301	)			(66,924	)			(46,247	)
Interest income		5,371				6,991				3,963
Other income (expense), net		(12,194	)			(49,870	)			(559	)
Earnings before income taxes		386,155				223,750				154,376
(Provision for) benefit from income taxes		(84,929	)			(18,562	)			43,639
Net earnings, including noncontrolling interests		301,226				205,188				198,015
Less: Net earnings attributable to noncontrolling interests		(18,467	)			(18,445	)			(9,326	)
Net earnings attributable to Flowserve Corporation	$	282,759			$	186,743			$	188,689
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	2.15			$	1.42			$	1.44
Diluted		2.14				1.42				1.44
Weighted average shares – basic		131,488				131,117				130,630
Weighted average shares – diluted		132,356				131,931				131,315

Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands, except per share data)
Twelve Months Ended December 31, 2024	Gross Profit			Selling, General & Administrative Expense			Loss on Sale of Business			Operating Income			Other Income (Expense), Net			Provision For (Benefit From) Income Taxes			Net Earnings (Loss)			Effective Tax Rate		Diluted EPS
Reported	$	1,434,246		$	978,037		$	12,981		$	462,279		$	(12,194	)	$	84,929		$	282,759		22.0	%	2.14
Reported as a percent of sales		31.5	%		21.5	%		0.3	%		10.1	%		-0.3	%		1.9	%		6.2	%
Realignment charges (a)		31,576			(4,939	)		(12,981	)		49,496			-			4,884			44,612		9.9	%	0.34
Discrete items (b)(c)(d)		2,700			(7,500	)		-			10,200			-			2,869			7,331		28.1	%	0.06
Acquisition related (e)		-			(9,944	)		-			9,944			-			2,340			7,604		23.5	%	0.06
Discrete asset write-downs (f)(g)		-			(1,795	)		-			1,795			3,567			1,342			4,020		25.0	%	0.03
Purchase accounting step-up and intangible asset amortization (h)		3,067			(1,033	)		-			4,100			-			1,300			2,800		31.7	%	0.02
Below-the-line foreign exchange impacts (i)		-			-			-			-			(2,302	)		(1,912	)		(390	)	83.1	%	(0.00	)
Adjusted	$	1,471,589		$	952,826		$	-		$	537,814		$	(10,929	)	$	95,752		$	348,736		20.7	%	2.63
Adjusted as a percent of sales		32.3	%		20.9	%		0.0	%		11.8	%		-0.2	%		2.1	%		7.7	%
Note: Amounts may not calculate due to rounding
(a) Charges represent realignment costs incurred as a result of realignment programs of which $33,700 is non-cash.
(b) Charge represents a reduction to reserves of $2,000 associated with our ongoing financial exposure in Russia that were adjusted for Non-GAAP measures when established in 2022.
(c) Charge represents a one-time $5,000 discretionary cash transition benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan.
(d) Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied natural gas technology.
(e) Charge represents acquisition and integration related costs associated with the MOGAS acquisition.
(f) Charge represents a $1,795 non-cash write-down of a software asset.
(g) Charge represents a $3,567 non-cash write-down of a debt investment.
(h) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.
(i) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.
Twelve Months Ended December 31, 2023	Gross Profit			Selling, General & Administrative Expense			Operating Income			Other Income (Expense), Net			Provision For (Benefit From) Income Taxes			Net Earnings Attributable to Noncontrolling Interests			Net Earnings (Loss)			Effective Tax Rate		Diluted EPS
Reported	$	1,276,828		$	961,169		$	333,553		$	(49,870	)	$	18,562		$	18,445		$	186,743		8.3	%	1.42
Reported as a percent of sales		29.6	%		22.2	%		7.7	%		-1.2	%		0.4	%		0.4	%		4.3	%
Realignment charges (a)		21,012			(45,025	)		66,037			-			14,949			-			51,088		22.6	%	0.39
Discrete asset write-downs (b)(c)(d)(e)		715			(3,955	)		4,670			2,000			1,611			-			5,059		24.2	%	0.04
Acquisition related (f)		-			(7,247	)		7,247			-			1,704			-			5,543		23.5	%	0.04
Below-the-line foreign exchange impacts (g)		-			-			-			41,092			2,395			-			38,697		5.8	%	0.29
Correction of prior period errors (h)		-			-			-			-			-			(3,559	)		3,559		0.0	%	0.03
Discrete tax benefit (i)		-			-			-			-			13,000			-			(13,000	)	0.0	%	(0.10	)
Adjusted	$	1,298,555		$	904,942		$	411,507		$	(6,778	)	$	52,221		$	14,886		$	277,689		15.1	%	2.10
Adjusted as a percent of sales		30.1	%		20.9	%		9.5	%		-0.2	%		1.2	%		0.3	%		6.4	%
Note: Amounts may not calculate due to rounding
(a) Charges represent realignment costs incurred as a result of realignment programs of which $9,701 is non-cash.
(b) Charge represents a further expense of $1,834 associated with a sales contract that was initially adjusted out of Non-GAAP measures in 2017.
(c) Includes reversals of expenses that were adjusted for Non-GAAP measures in previous periods of $81.
(d) Charge represents a $2,917 non-cash write-down of a licensing agreement.
(e) Charge represents a non-cash asset write-down of $2,000 associated with the impairment of an equity investment.
(f) Charges represent costs associated with a terminated acquisition.
(g) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.
(h) Represents the amount to correct the cumulative impact of immaterial prior period errors.
(i) Represents a discrete tax benefit due to release of tax valuation allowance on the net deferred tax assets in a foreign jurisdiction. The associated tax expense was adjusted out on Non-GAAP measures in 2015.

SEGMENT INFORMATION
(Unaudited)
FLOWSERVE PUMPS DIVISION	Year Ended December 31,
(Amounts in millions, except percentages)		2024				2023
Bookings	$	3,304.3			$	2,941.2
Sales		3,158.6				3,064.5
Gross profit		1,017.0				906.8
Gross profit margin		32.2	%			29.6	%
SG&A		556.2				575.8
Segment operating income		480.2				348.9
Segment operating income as a percentage of sales		15.2	%			11.4	%
FLOW CONTROL DIVISION	Year Ended December 31,
(Amounts in millions, except percentages)		2024				2023
Bookings	$	1,370.7			$	1,345.9
Sales		1,409.3				1,266.0
Gross profit		424.0				372.8
Gross profit margin		30.1	%			29.4	%
SG&A		252.7				224.8
Loss on sale of business		(13.0	)			-
Segment operating income		158.3				148.0
Segment operating income as a percentage of sales		11.2	%			11.7	%

Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)
(Amounts in thousands)
Flowserve Pumps Division
Twelve Months Ended December 31, 2024	Gross Profit			Selling, General & Administrative Expense			Operating Income							Twelve Months Ended December 31, 2023	Gross Profit			Selling, General & Administrative Expense			Operating Income
Reported	$	1,017,048		$	556,225		$	480,216						Reported	$	906,775		$	575,792		$	348,867
Reported as a percent of sales		32.2	%		17.6	%		15.2	%					Reported as a percent of sales		29.6	%		18.8	%		11.4	%
Realignment charges (a)		30,727			(1,078	)		31,805						Realignment charges (a)		10,797			(14,533	)		25,330
Discrete items (b)(c)(d)		1,700			(6,000	)		7,700						Discrete asset write-downs (b)(c)(d)		715			(3,955	)		4,670
Adjusted	$	1,049,475		$	549,147		$	519,721						Adjusted	$	918,287		$	557,304		$	378,867
Adjusted as a percent of sales		33.2	%		17.4	%		16.5	%					Adjusted as a percent of sales		30.0	%		18.2	%		12.4	%
Flow Control Division														Flow Control Division
Twelve Months Ended December 31, 2024	Gross Profit			Selling, General & Administrative Expense			Loss on Sale of Business			Operating Income				Twelve Months Ended December 31, 2023	Gross Profit			Selling, General & Administrative Expense			Operating Income
Reported	$	423,973		$	252,675		$	12,981		$	158,265			Reported	$	372,808		$	224,774		$	148,034
Reported as a percent of sales		30.1	%		17.9	%		0.9	%		11.2	%		Reported as a percent of sales		29.4	%		17.8	%		11.7	%
Realignment charges (a)		1,077			(3,095	)		(12,981	)		17,153			Realignment charges (a)		10,576			(11,393	)		21,969
Discrete item (b)		800			(400	)		-			1,200			Acquisition related (e)		-			(7,247	)		7,247
Acquisition related (e)		-			(9,944	)		-			9,944			Adjusted	$	383,384		$	206,134		$	177,250
Purchase accounting step-up and intangible asset amortization (f)		3,067			(1,033	)		-			4,100			Adjusted as a percent of sales		30.3	%		16.3	%		14.0	%
Adjusted	$	428,917		$	238,203		$	-		$	190,662
Adjusted as a percent of sales		30.4	%		16.9	%		0.0	%		13.5	%
Note: Amounts may not calculate due to rounding														Note: Amounts may not calculate due to rounding
(a) Charges represent realignment costs incurred as a result of realignment programs of which $33,700 is non-cash.														(a) Charges represent realignment costs incurred as a result of realignment programs of which $9,701 is non-cash.
(b) Charge represents a one-time $3,700 discretionary cash transition benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan.														(b) Charge represents a further expense of $1,834 associated with a sales contract that was initially reserved for in 2017.
(c) Charge represents a reduction to reserves of $2,000 associated with our ongoing financial exposure in Russia that were adjusted for Non-GAAP measures when established in 2022.														(c) Includes reversals of expenses that were adjusted for Non-GAAP measures in previous periods of $81.
(d) Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied natural gas technology.														(d) Charge represents a $2,917 non-cash write-down of a licensing agreement.
(e) Charge represents acquisition and integration related costs associated with the MOGAS acquisition.														(e) Charges represent costs associated with a terminated acquisition.
(f) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

Fourth Quarter and Full Year 2024 - Segment Results
(dollars in millions, comparison vs. 2023 fourth quarter and full year, unaudited)
	FPD												FCD
	4th Qtr						Full Year						4th Qtr						Full Year
Bookings	$	816.4					$	3,304.3					$	363.4					$	1,370.7
- vs. prior year		94.2		13.0	%			363.1		12.3	%			36.5		11.2	%			24.8		1.8	%
- on constant currency		106.6		14.8	%			388.8		13.2	%			38.0		11.6	%			29.1		2.2	%
Sales	$	794.9					$	3,158.6					$	387.9					$	1,409.3
- vs. prior year		-37.9		-4.6	%			94.1		3.1	%			51.9		15.4	%			143.3		11.3	%
- on constant currency		-27.4		-3.3	%			113.0		3.7	%			53.0		15.8	%			145.5		11.5	%
Gross Profit	$	255.7					$	1,017.0					$	118.5					$	424.0
- vs. prior year		7.3	%					12.2	%					16.3	%					13.7	%
Gross Margin (% of sales)		32.2	%					32.2	%					30.5	%					30.1	%
- vs. prior year (in basis points)	360 bps						260 bps						20 bps						70 bps
Operating Income	$	129.1					$	480.2					$	44.6					$	158.3
- vs. prior year		35.6		38.1	%			131.3		37.6	%			-5.2		-10.4	%			10.3		7.0	%
- on constant currency		37.2		39.8	%			136.5		39.1	%			-5.2		-10.4	%			11.3		7.6	%
Operating Margin (% of sales)		16.2	%					15.2	%					11.5	%					11.2	%
- vs. prior year (in basis points)	500 bps						380 bps						(330) bps						(50) bps
Adjusted Operating Income *	$	139.0					$	519.7					$	59.2					$	190.7
- vs. prior year		40.9		41.7	%			140.8		37.2	%			3.4		6.1	%			13.4		7.6	%
- on constant currency		42.5		43.4	%			146.0		38.5	%			3.4		6.2	%			14.4		8.1	%
Adj. Oper. Margin (% of sales)*		17.5	%					16.5	%					15.3	%					13.5	%
- vs. prior year (in basis points)	570 bps						410 bps						(130) bps						(50) bps
Backlog	$	1,930.4											$	869.6
* Adjusted Operating Income and Adjusted Operating Margin exclude realignment charges and other specific discrete items

CONSOLIDATED BALANCE SHEETS
(Unaudited)
	December 31,				December 31,
(Amounts in thousands, except par value)		2024				2023
ASSETS
Current assets:
Cash and cash equivalents	$	675,441			$	545,678
Accounts receivable, net of allowance for expected credit losses of $79,059 and $80,013, respectively		976,739				881,869
Contract assets, net		298,906				280,228
Inventories		828,254				879,937
Prepaid expenses and other		116,157				116,065
Total current assets		2,895,497				2,703,777
Property, plant and equipment, net		539,703				506,158
Operating lease right-of-use assets, net		159,400				156,430
Goodwill		1,293,795				1,182,225
Deferred taxes		221,742				218,358
Other intangible assets, net		188,604				122,248
Other assets, net		200,580				219,523
Total assets	$	5,499,321			$	5,108,719
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	545,310			$	547,824
Accrued liabilities		561,486				504,430
Contract liabilities		282,170				287,697
Debt due within one year		44,059				66,243
Operating lease liabilities		33,559				32,382
Total current liabilities		1,466,584				1,438,576
Long-term debt due after one year		1,460,132				1,167,307
Operating lease liabilities		149,838				138,665
Retirement obligations and other liabilities		371,055				389,120
Shareholders’ equity:
Common shares, $1.25 par value		220,991				220,991
Shares authorized – 305,000
Shares issued – 176,793 and 176,793, respectively
Capital in excess of par value		502,045				506,525
Retained earnings		4,025,750				3,854,717
Treasury shares, at cost – 45,688 and 45,885 shares, respectively		(2,007,869	)			(2,014,474	)
Deferred compensation obligation		8,172				7,942
Accumulated other comprehensive loss		(741,424	)			(639,601	)
Total Flowserve Corporation shareholders' equity		2,007,665				1,936,100
Noncontrolling interests		44,047				38,951
Total equity		2,051,712				1,975,051
Total liabilities and equity	$	5,499,321			$	5,108,719

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Year Ended December 31,
(Amounts in thousands)		2024				2023				2022
Cash flows – Operating activities:
Net earnings, including noncontrolling interests	$	301,226			$	205,188			$	198,015
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation		75,849				73,464				77,636
Amortization of intangible and other assets		9,749				10,283				13,317
Loss on sale of business		12,981				-				-
Stock-based compensation		30,474				27,808				25,530
Foreign currency, asset write downs and other non-cash adjustments		24,172				(17,331	)			(27,758	)
Change in assets and liabilities, net of businesses acquired:
Accounts receivable, net		(74,886	)			4,744				(152,011	)
Inventories		47,915				(59,831	)			(147,492	)
Contract assets, net		(20,197	)			(41,149	)			(41,768	)
Prepaid expenses and other assets, net		7,610				7,825				17,461
Accounts payable		(11,756	)			53,065				78,968
Contract liabilities		(18,706	)			26,837				61,684
Accrued liabilities		54,479				59,213				(5,226	)
Retirement obligations and other		1,456				38,497				(1,430	)
Net deferred taxes		(15,058	)			(62,841	)			(136,936	)
Net cash flows provided (used) by operating activities		425,308				325,772				(40,010	)
Cash flows – Investing activities:
Capital expenditures		(81,019	)			(67,359	)			(76,287	)
Payments for acquisition, net of cash acquired		(305,924	)			-				-
Proceeds from disposal of assets		2,244				2,057				4,422
Payments for disposition of business		(2,555	)			-				-
Proceeds from termination of cross-currency swap		-				-				66,004
Net affiliate investment activity		40				(3,278	)			(225	)
Net cash flows provided (used) by investing activities		(387,214	)			(68,580	)			(6,086	)
Cash flows – Financing activities:
Proceeds from term loan		366,000				-				-
Payments on term loan		(95,375	)			(40,000	)			(32,500	)
Proceeds under revolving credit facility		100,000				280,000				45,000
Payments under revolving credit facility		(100,000	)			(280,000	)			(45,000	)
Proceeds under other financing arrangements		1,437				1,114				1,733
Payments under other financing arrangements		(1,455	)			(2,604	)			(1,790	)
Payments related to tax withholding for stock-based compensation		(9,581	)			(6,245	)			(4,683	)
Repurchases of common shares		(20,070	)			-				-
Payments of dividends		(110,440	)			(104,955	)			(104,549	)
Other		(13,021	)			(324	)			(8,223	)
Net cash flows provided (used) by financing activities		117,495				(153,014	)			(150,012	)
Effect of exchange rate changes on cash		(25,826	)			6,529				(27,373	)
Net change in cash and cash equivalents		129,763				110,707				(223,481	)
Cash and cash equivalents at beginning of year		545,678				545,678				658,452
Cash and cash equivalents at end of year	$	675,441			$	656,385			$	434,971
Income taxes paid (net of refunds)	$	81,172			$	119,275			$	60,085
Interest paid		66,809				64,865				41,629
Non-Cash Investing and Financing Activities:
Contingent liabilities incurred related to acquired business, but not paid	$	15,000			$	-				-

About Flowserve:

Flowserve Corporation 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 website 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: global supply chain disruptions and the current inflationary environment could adversely affect the efficiency of our manufacturing and increase the cost of providing our products to customers; 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 any restructuring and realignment initiatives, our business could be adversely affected; 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, Latin American, Asian 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; the impact of public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, on our business and operations; 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 Argentina; 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; 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; if we are not able to maintain our competitive position by successfully developing and introducing new products and technology, including artificial intelligence and machine learning; 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 United States, 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. 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/20250218332918/en/

Flowserve

Investor Contacts:

Brian Ezzell, Vice President, Investor Relations, Treasurer & Corporate Finance (972) 443-6560

Tarek Zeni, Director, Investor Relations (469) 420-4045



Media Contact:

Wes Warnock, Vice President, Marketing, Communications & Public Affairs (972) 443-6900

Source: Flowserve Corporation

FAQ

What was Flowserve's (FLS) Q4 2024 revenue?

Flowserve reported Q4 2024 revenue of $1.18 billion, representing a 1.3% increase from Q4 2023.

How much did FLS's operating income grow in Q4 2024?

Flowserve's Q4 2024 operating income grew 14% to $125 million, while adjusted operating income increased 22% to $149 million.

What is Flowserve's (FLS) projected EPS guidance for 2025?

Flowserve projects adjusted EPS of $3.10 to $3.30 for 2025, representing a 22% increase at the midpoint compared to 2024.

What dividend did FLS announce for Q1 2025?

Flowserve announced a quarterly dividend of $0.21 per share, payable on April 11, 2025, to shareholders of record as of March 28, 2025.

What was Flowserve's (FLS) Q4 2024 operating margin?

Flowserve's Q4 2024 operating margin was 10.6%, an increase of 120 basis points from 9.4% in Q4 2023.