Financial Data and Key Metrics - Adjusted earnings per share for Q3 2023 was $0.50, exceeding internal expectations [13] - Q3 revenue reached $1.1 billion, the highest quarterly revenue since 2015, with an adjusted gross margin of nearly 30% [13] - Bookings for Q3 were nearly $1.1 billion, maintaining a near-record backlog of $2.8 billion [13] - Year-to-date operating cash flow improved by $241 million to $131 million compared to the prior year [19] - Adjusted gross margin increased by 230 basis points year-over-year to 29.7% [17] - Adjusted operating margin increased by 630 basis points to 8.7% in Q3 [42] Business Line Performance - Aftermarket bookings exceeded $580 million in Q3, marking the eighth consecutive quarter above $500 million [15] - Original equipment and aftermarket revenues increased by 28% and 23% respectively compared to the prior year [40] - FPD's original equipment sales grew by 45% year-over-year, while FCD contributed a 14% increase [40] - Aftermarket revenues increased by 28% in FCD and 22% in FPD [40] Market Performance - Middle East and Africa, Latin America, and North America saw year-over-year revenue growth of 51%, 43%, and 24% respectively [40] - Europe and Asia also delivered substantial increases of 18% and 14% respectively [40] - The Middle East showed significant growth, with visibility to several large projects, particularly in oil and gas and petrochemical markets [14][59] Company Strategy and Industry Competition - The company's 3D strategy (diversification, decarbonization, and digitization) is driving accelerated growth, with 3D bookings representing 26% of total awards in Q3 [39] - The company is focusing on operational excellence and product management to drive margin expansion [17] - The termination of the Velan acquisition does not change the company's confidence in its 3D growth strategy, which includes a programmatic M&A approach [21] - The company is leveraging its position in energy security and energy transition to drive growth, particularly in hydrogen, carbon capture, nuclear, and LNG markets [45] Management Commentary on Operating Environment and Future Outlook - The company expects full-year 2023 revenue growth of 18% to 19% and adjusted EPS of $1.95 to $2.05 [43] - The company anticipates mid-single-digit revenue growth in 2024, with adjusted operating margin improvement of approximately 100 basis points and adjusted EPS growth of 20% to 25% [43] - The company remains committed to its 2027 financial goals, including growing revenues at a 5% CAGR and expanding adjusted operating margins to 14% to 16% [22] - The company is confident in its ability to maintain operating momentum and deliver further improvement in 2024 [22] Other Important Information - The company achieved a $50 million annualized cost reduction goal, with 60% of the savings benefiting the cost of goods sold line [17] - The company is focusing on reducing working capital investment to below 30% of sales, targeting 25% to 27% [19] - The company is digitizing its offerings, with RedRaven technology now utilized in over 75 customer facilities [22] Q&A Session Question: Bookings environment and confidence in larger projects [24] - The company remains committed to 5% growth through 2027, with strong aftermarket and MRO activity expected to continue [24] - The project funnel is up 5% year-over-year, with significant opportunities in the Middle East, LNG, and nuclear markets [59] Question: Incremental margin in Q3 and sustainability [26] - The company is pleased with the Q3 margin improvement and expects continued margin expansion in Q4 and beyond [26] Question: Capital allocation and buybacks [28] - The company plans to return to buybacks to offset dilution from equity comps and is weighing reinvestment, M&A, and shareholder returns [28] Question: Pricing environment and project pricing [78][79] - The company is comfortable with pricing in the run rate business but sees continued competitiveness in larger project pricing, particularly in energy transition and Middle East projects [79] Question: Geopolitical risks and project execution [99] - The company is monitoring geopolitical risks but remains confident in its project pipeline, particularly in the Middle East [99] Question: Liability management and balance sheet flexibility [90] - The company is considering options to manage its $60 million liability but views it as manageable given current insurance proceeds and legal management [5] Question: Seasonality and Q4 expectations [95] - The company expects modest revenue growth in Q4, with a focus on maintaining consistent performance across quarters [95]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-13179 FLOWSERVE CORPORATION (Exact name of registrant as specified in its charter) | --- | --- | --- | |------------------------- ...

Flowserve Corporation (NYSE:FLS) Q2 2023 Earnings Conference Call August 2, 2023 11:00 AM ET Company Participants Jay Roueche - Vice President, Investor Relations & Treasurer Scott Rowe - President & Chief Executive Officer Amy Schwetz - Senior Vice President & Chief Financial Officer Conference Call Participants Nathan Jones - Stifel Joe Giordano - TD Cowen Deane Dray - RBC Capital Markets Sabrina Abrams - Bank of America Michael Halloran - Baird Damian Karas - UBS Brett Linzey - Mizuho Operator Good day, ...

FORWARD LOOKING STATEMENTS AND NON-GAAP MEASURES 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 ma ...

15 | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------|------------------------------------------------------------------------------|-------|--------------------------|-------|----------------------| | The following table presents the reclassifications \n(Amounts in thousands) | out of AOCL: \nAffected line item in the statement of income | | Six Months \n2023(1) | Ended | June 30, \n2022(1) | | Pension and other postretirement effe ...

Flowserve Corporation (NYSE:FLS) Q1 2023 Earnings Call Transcript May 2, 2023 11:00 AM ET Company Participants Jay Roueche - Vice President, Investor Relations and Treasurer Scott Rowe - President and Chief Executive Officer Amy Schwetz - Senior Vice President and Chief Financial Officer Conference Call Participants Andrew Kaplowitz - Citi Mike Halloran - Baird Joseph Giordano - Cowen & Company Sabrina Abrams - Bank of America Merrill Lynch Deane Dray - RBC Capital Markets Saree Boroditsky - Jefferies Natha ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------|-------|--------------------------|------------------|--------------|-------|-------|--------------------------|------------------------|----------------------|-------|----------------------|------------------------|---------------------| | (Amounts in millions) \nService cost | $ | Defined \n2023 \n5.0 | U.S. Benefit \n$ | Plans \n2022 | 6.3 ...

• coordinating operations that are increased in scope, geographic diversity and complexity; 15 • retooling and reprogramming of equipment; • hiring additional management and other critical personnel; and • the diversion of management's attention from our day-to-day operations. Further, no guarantees can be made that we would realize the cost savings, synergies or revenue enhancements that we may anticipate from any acquisition, or that we will realize such benefits within the time frame that we expect. If w ...

Flowserve Corporation (NYSE:FLS) Q4 2022 Earnings Conference Call February 17, 2023 11:00 AM ET Company Participants Jay Roueche - VP, IR and Treasurer Scott Rowe - President and CEO Amy Schwetz - SVP and CFO Conference Call Participants Josh Pokrzywinski - Morgan Stanley Damian Karas - UBS Mike Halloran - Baird Joseph Giordano - Cowen & Company Saree Boroditsky - Jefferies Adam Farley - Stifel Operator Good day, and welcome to the Q4 2022 Flowserve Corporation Earnings Conference Call. Today's conference i ...

Flowserve Corporation (NYSE:FLS) Q3 2022 Earnings Conference Call November 1, 2022 11:00 AM ET Company Participants Jay Roueche - VP, IR and Treasurer Scott Rowe - President and CEO Amy Schwetz - SVP and CFO Conference Call Participants Deane Dray - RBC Capital Markets Michael Halloran - Robert W. Baird Andy Kaplowitz - Citigroup Saree Boroditsky - Jefferies Nathan Jones - Stifel Joe Giordano - Cowen Operator Good day and welcome to the Q3 2022 Flowserve Corporation Earnings Conference Call. Today's confere ...