Flowserve Corp. (NYSE:FLS), a global leader in the fluid motion and control industry, announced today record third quarter performance including earnings per share, sales and bookings. The company announced third quarter fully diluted EPS of $2.04, up 86% (including items of $0.10, net), and operating income of $163.6 million, up 51%, both over the third quarter of 2007. This earnings growth significantly outpaced strong quarterly sales growth of 26%, compared to the same quarter of 2007, which was driven by a third quarter operating margin improvement of 240 basis points, to 14.2%. Flowserve also posted record third quarter bookings of $1.37 billion, up 30%, 22% on an organic basis (excluding currency effects and the acquisition of Niigata Worthington), over the prior year period, driven by continued strong growth of both its original equipment and aftermarket business. The company indicated that the bookings growth was led by the Flowserve Pump Division bookings increase of 44%, 35% on an organic basis.
The company also indicated that it now expects full year 2008 EPS at or around the high end of the previously announced range of $7.20 to $7.50, despite adverse currency impact.
Highlights
| Third Quarter of 2008 (all comparisons versus the third quarter of 2007, unless otherwise noted) |
| -- Record third quarter fully diluted EPS of $2.04, up 86% |
| -- EPS included $0.22 in benefits from tax items and charges of $0.12 from foreign currency hedging activities |
| -- Record bookings of $1.37 billion, up 30% (22% organic) |
| -- Flowserve Pump Division bookings increased significantly to $858 million, up 44% (35% organic) |
| -- Record sales of $1.15 billion, up 26% (18% organic) |
| -- Strong gross margin improvement, up 100 basis points to 35.1% |
| -- Strong SG&A reduction as a percentage of sales, down 170 basis points to 21.2% |
| -- Record operating income of $163.6 million, up $55.4 million, or 51% |
| -- Substantial operating margin improvement, up 240 basis points from 11.8% to 14.2% |
| -- Added to the S&P 500 Index on September 29 |
| -- Corporate credit rating increased by Standard and Poor's to BB, with a positive outlook on September 29 |
| Year-to-Date 2008 (all comparisons versus year-to-date 2007 unless otherwise noted) |
| -- Record fully diluted EPS of $5.71, up 105% |
| -- EPS included $0.38 in benefits from tax items |
| -- Record bookings of $4.11 billion, up 28% |
| -- Year-to-date organic bookings growth of 19% |
| -- Record sales of $3.30 billion, up 25% |
| -- Year-to-date organic sales growth of 15% |
| -- Continued strong gross margin improvement, up 220 basis points to 35.4% |
| -- Continued SG&A reduction as a percentage of sales, down 140 basis points, to 22.1% |
| -- Substantial operating margin improvement, up 340 basis points, to 13.7% |
Discussion and analysis of the third quarter of 2008 financial results (all comparisons versus the third quarter of 2007, unless otherwise noted)
Fully diluted EPS increased to a third quarter record $2.04 per share. EPS was higher primarily due to improvements in operating income driven by an increase in sales of 26%, an improvement in gross margin of 100 basis points and a reduction of 170 basis points for Selling, General & Administrative (SG&A) expenses as a percentage of sales. EPS for the quarter also included a $0.22 net benefit from reinvestment in foreign subsidiaries, the resolution of tax audits and repatriation of foreign source cash, partially offset by a $0.12 negative impact from foreign currency hedging activities.
Bookings increased significantly to $1.37 billion, up $313 million, or 30% (22% organic), including currency benefits of approximately $53 million. This is the seventh consecutive quarter of company bookings exceeding $1 billion. The increase is attributable to continued strength in the company’s markets, primarily in Europe, the Middle East and Africa (EMA) as well as $22 million in bookings provided by the previously announced acquisition of Niigata Worthington.
“We are continuing to see high quotation levels requested for our products and aftermarket services throughout our global markets, and at the same time are monitoring general global economic conditions very closely and are prepared to quickly respond to any changes in market conditions,” said Lewis Kling, Flowserve President and Chief Executive Officer.
Backlog increased 35% to a record $3.08 billion from $2.28 billion at December 31, 2007. Currency effects provided a decrease of approximately $95 million, and the first quarter acquisition of Niigata Worthington contributed an increase of approximately $92 million to this closing backlog.
“We believe that our backlog is very solid, bolstered by the strong project completion needs of our customers,” said Kling. “Additionally, we have not seen any unusual cancellations to date,” he added.
The effective tax rate of 18.7% for the third quarter 2008 decreased from 33.7% for the same period in 2007. The effective rate for the third quarter 2008 includes a net tax benefit of $12.4 million arising from tax benefits related to the company’s permanent reinvestment in foreign subsidiaries, release of certain reserves related to the closure of the statute of limitations on tax audits in various jurisdictions and repatriation of foreign source cash.
The year-to-date effective tax rate of 23.8% decreased from 31.1% for the same period in 2007. The decrease is primarily due to the net impact of foreign operations, a favorable tax ruling in Luxembourg, benefits related to the reinvestment in foreign subsidiaries and the closure of the statute of limitations on tax audits in various jurisdictions.
Sales increased to $1.15 billion, up $234 million, or 26% (18% organic). This increase included currency benefits of approximately $47 million. The increase is attributable to strong growth in the oil and gas, power and chemical markets, as well as $18 million in sales provided by Niigata Worthington.
Gross profit increased to $405 million, up $91 million, or 29%. Gross margin increased by 100 basis points to 35.1%. The increase reflected improved pricing, ongoing operational excellence initiatives and improved fixed cost absorption on higher sales.
SG&A expenses as a percentage of sales decreased 170 basis points to 21.2%. The improvement was primarily attributable to ongoing cost containment initiatives and leverage from higher sales. SG&A, in total, increased to $245 million, up $35 million, or 17%, which demonstrated leverage when compared to the sales increase of 26%. The SG&A increase was primarily attributable to an increase in commissions and other selling related expenses in support of the significant rise in bookings and sales, other employee related costs including increased incentive accruals, and a currency related increase partially offset by an approximately $11 million decrease in legal-related costs.
“We continue to make solid progress toward our target of SG&A as a percentage of sales at or below 20 percent,” said Mark Blinn, Flowserve Senior Vice President, Chief Financial Officer and Latin America Operations.
Operating income increased significantly to $164 million, up $55 million, or 51%. Operating income benefited from higher sales, significantly improved gross profit and leverage of SG&A expenses. Operating margin increased 240 basis points to 14.2%.
“The third quarter was another very strong quarter for Flowserve, with record bookings, sales and backlog,” said Kling. “We continued to see strength in our global markets, specifically the oil and gas, power, chemical and water industries. We have also continued to execute well against both our original equipment and aftermarket strategies in all parts of the world, and because of this, delivered outstanding quarterly results to our shareholders,” added Kling.
“We are also pleased that strong third quarter operating performance provided $173 million in cash flow from operations,” said Blinn. “During the quarter we used this strong cash flow to further strengthen our balance sheet, make key investments in the business and repurchase over 800,000 shares of common stock,” he added.
Flowserve Pump Division
Flowserve Pump Division (FPD) bookings for the third quarter 2008 increased significantly to $858 million, up $263 million, or 44%, including currency benefits of approximately $32 million. This increase was primarily attributable to strength in the oil and gas, power and general industry markets. The increase in oil and gas was primarily driven by a previously announced significant project, worth approximately $85 to $90 million, to supply a variety of pumps to build the Abu Dhabi Crude Oil Pipeline. The Niigata Worthington acquisition also provided an increase of $22 million in bookings.
FPD sales for the third quarter of 2008 increased to $639 million, up $143 million, or 29%, including currency benefits of approximately $27 million. The acquisition of Niigata Worthington provided approximately $18 million in additional sales. Sales of original equipment increased 42%, and aftermarket sales grew 11%. The original equipment sales mix increased 600 basis points to approximately 64% in the third quarter of 2008, from approximately 58% in the third quarter of 2007.
FPD gross profit increased to $195 million, up $47 million, or 32%. Gross margin for the third quarter of 2008 increased 70 basis points to 30.5%. This increase was favorably impacted by better original equipment pricing, better capacity utilization and absorption as a result of higher sales volumes and operational excellence initiatives.
FPD operating income for the third quarter of 2008 increased to $99 million, up $30 million, or 44%, including currency benefits of approximately $4 million. The significant increase was primarily attributable to the $47 million increase in gross profit, partially offset by a $16 million increase in SG&A primarily related to increased selling and marketing-related expenses in support of increased bookings and sales, and $3 million of Niigata Worthington SG&A and related integration costs. Operating margin improved 160 basis points to 15.5%.
Flow Control Division
Flow Control Division (FCD) bookings for the third quarter of 2008 increased to $368 million, up $44 million, or 14%, including currency benefits of approximately $14 million. The increase was generally attributable to strength across key end-markets.
FCD sales for the third quarter of 2008 increased to $365 million, up $70 million, or 24%, including currency benefits of approximately $15 million. The increase was primarily attributable to strength in the power and chemical markets in EMA, projects in coal gasification and strength in the chemical markets in Asia Pacific, as well as in the paper markets in Latin America.
FCD gross profit increased to $133 million, up $31 million, or 31%. Gross margin improved 200 basis points to 36.3%. Gross margin increases resulting from price increases, improved fixed cost absorption on higher sales and the implementation of various continuous improvement process (CIP) and supply chain initiatives were partially offset by inflation in materials costs.
FCD operating income increased to $61 million, up $20 million, or 48%, including approximately $2 million in currency benefits. The increase was primarily due to the $31 million improvement in gross profit, partially offset by higher selling costs. Operating margin improved 280 basis points to 16.7%.
Flow Solutions Division
Flow Solutions Division (FSD) bookings for the third quarter of 2008 increased to $173 million, up $14 million, or 9%, including currency benefits of approximately $6 million. The increase is primarily attributable to increased original equipment bookings in EMA and North America and increased aftermarket bookings in Latin America.
FSD sales increased to $171 million, up $30 million, or 22%, including currency benefits of approximately $5 million. The increase is primarily attributable to increased aftermarket sales in Asia and Latin America and increased original equipment sales in EMA and North America, particularly in the chemical and oil and gas markets.
FSD gross profit increased to $78 million, up $13 million, or 21%. Gross margin for the third quarter of 2008 decreased 30 basis points to 45.5%. The small decrease was principally the result of a sales mix shift to lower margin original equipment business in EMA and North America, largely offset by improved fixed cost absorption on higher sales as well as the impact of cost savings initiatives.
FSD operating income for the third quarter of 2008 increased to $33 million, up $2 million, or 8%, including currency benefits of approximately $1 million. FSD operating margin decreased 250 basis points to 19.1%, primarily due to continued investment in the expansion of its global engineering and sales teams, as well as increases in infrastructure to support the global growth of the business through its Quick Response Center (QRC) platform.
Outlook
“We continue to see attractive opportunities ahead for Flowserve in our key markets around the globe,” said Kling. “And while it is impossible to predict the impact of the current credit situation on the global economy, history has consistently shown that our markets may temporarily weaken during their cycles, but they do not go away and even provide a chance to grow market share for strong companies like Flowserve. Based on our operational excellence initiatives, global diversification and aftermarket strategy, we continue to be well positioned for the future,” he added.
“Additionally, the recent weakening of the Euro against the U.S. Dollar allows our foreign operations to be more competitive in the global arena. However, after comparing the current foreign exchange rates to those applicable when we issued our annual earnings forecast in July, we estimate a $0.60 adverse impact on the last half of 2008 EPS, including an adverse approximate impact of over $0.40 on projected fourth quarter 2008 earnings per share,” Kling said.
“Despite this currency headwind, we believe the underlying strength of our operations and our global markets should enable us to offset this adverse development, and we now expect to achieve EPS results at or around the upper end of our previously announced range of $7.20 to $7.50,” Kling concluded.
Conference Call
The conference call will take place on Wednesday, October 29th at 11:00 AM Eastern.
Lewis Kling, President and Chief Executive Officer, and Mark Blinn, Senior Vice President, Chief Financial Officer and Latin America Operations, will be presenting.
The call can be accessed at Flowserve’s website at www.flowserve.com under the Investor Relations section.
About Flowserve Corp.
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,”“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; risks associated with cost overruns on fixed-fee projects and in taking customer orders for large complex custom engineered products requiring sophisticated program management skills and technical expertise for completion; the substantial dependence of our sales on the success of the petroleum, chemical, power and water 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 or trade embargoes that could affect customer markets, particularly Middle Eastern markets and global petroleum producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations; our furnishing of products and services to nuclear power plant facilities; 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; risks associated with certain of our foreign subsidiaries conducting business operations and sales in certain countries that have been identified by the U.S. State Department as state sponsors of terrorism; our relative geographical profitability and its impact on our utilization of deferred tax assets, including foreign tax credits, and tax liabilities that could result from audits of our tax returns by regulatory authorities in various tax jurisdictions; the potential adverse impact of an impairment in the carrying value of goodwill or other intangibles; our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations; changes in the global financial markets and the availability of capital; our dependence on our customers’ ability to make required capital investment and maintenance expenditures; 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.
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| Three Months Ended September 30, | ||||||||
| (Amounts in thousands, except per share data) | 2008 | 2007 | ||||||
| Sales | $ | 1,153,592 | $ | 919,247 | ||||
| Cost of sales | (748,668 | ) | (605,664 | ) | ||||
| Gross profit | 404,924 | 313,583 | ||||||
| Selling, general and administrative expense | (244,673 | ) | (210,135 | ) | ||||
| Net earnings from affiliates | 3,389 | 4,781 | ||||||
| Operating income | 163,640 | 108,229 | ||||||
| Interest expense | (13,105 | ) | (15,332 | ) | ||||
| Interest income | 2,152 | 919 | ||||||
| Other (expense) income, net | (8,690 | ) | 1,224 | |||||
| Earnings before income taxes | 143,997 | 95,040 | ||||||
| Provision for income taxes | (26,948 | ) | (31,985 | ) | ||||
| Net earnings | $ | 117,049 | $ | 63,055 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 2.06 | $ | 1.12 | ||||
| Diluted | 2.04 | 1.10 | ||||||
| Cash dividends declared per share | $ | 0.25 | $ | 0.15 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| Nine Months Ended September 30, | ||||||||
| (Amounts in thousands, except per share data) | 2008 | 2007 | ||||||
| Sales | $ | 3,304,516 | $ | 2,653,325 | ||||
| Cost of sales | (2,135,776 | ) | (1,771,852 | ) | ||||
| Gross profit | 1,168,740 | 881,473 | ||||||
| Selling, general and administrative expense | (728,702 | ) | (623,253 | ) | ||||
| Net earnings from affiliates | 13,873 | 14,341 | ||||||
| Operating income | 453,911 | 272,561 | ||||||
| Interest expense | (38,695 | ) | (45,164 | ) | ||||
| Interest income | 6,612 | 2,490 | ||||||
| Other income, net | 8,365 | 2,159 | ||||||
| Earnings before income taxes | 430,193 | 232,046 | ||||||
| Provision for income taxes | (102,212 | ) | (72,172 | ) | ||||
| Net earnings | $ | 327,981 | $ | 159,874 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 5.77 | $ | 2.83 | ||||
| Diluted | 5.71 | 2.79 | ||||||
| Cash dividends declared per share | $ | 0.75 | $ | 0.45 | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| September 30, | December 31, | |||||||
| (Amounts in thousands, except per share data) | 2008 | 2007 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 153,431 | $ | 370,575 | ||||
| Restricted cash | 519 | 2,663 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $17,883 and $14,219, respectively | 912,042 | 666,733 | ||||||
| Inventories, net | 859,289 | 680,199 | ||||||
| Deferred taxes | 86,666 | 105,221 | ||||||
| Prepaid expenses and other | 92,665 | 71,380 | ||||||
| Total current assets | 2,104,612 | 1,896,771 | ||||||
Property, plant and equipment, net of accumulated depreciation of $602,429 and $575,280, respectively | 493,711 | 488,892 | ||||||
| Goodwill | 842,772 | 853,265 | ||||||
| Deferred taxes | 54,594 | 13,816 | ||||||
| Other intangible assets, net | 125,855 | 134,734 | ||||||
| Other assets, net | 123,763 | 132,943 | ||||||
| Total assets | $ | 3,745,307 | $ | 3,520,421 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 470,580 | $ | 513,169 | ||||
| Accrued liabilities | 936,601 | 723,026 | ||||||
| Debt due within one year | 21,695 | 7,181 | ||||||
| Deferred taxes | 7,906 | 6,804 | ||||||
Total current liabilities | 1,436,782 | 1,250,180 | ||||||
| Long-term debt due after one year | 547,191 | 550,795 | ||||||
| Retirement obligations and other liabilities | 351,368 | 426,469 | ||||||
| Shareholders’ equity: | ||||||||
| Common shares, $1.25 par value | 73,474 | 73,394 | ||||||
| Shares authorized – 120,000 | ||||||||
| Shares issued – 58,779 and 58,715, respectively | ||||||||
| Capital in excess of par value | 579,009 | 561,732 | ||||||
| Retained earnings | 1,059,258 | 774,366 | ||||||
| 1,711,741 | 1,409,492 | |||||||
| Treasury shares, at cost – 2,977 and 2,406 shares, respectively | (219,881 | ) | (101,781 | ) | ||||
| Deferred compensation obligation | 7,542 | 6,650 | ||||||
| Accumulated other comprehensive loss | (89,436 | ) | (21,384 | ) | ||||
| Total shareholders’ equity | 1,409,966 | 1,292,977 | ||||||
| Total liabilities and shareholders’ equity | $ | 3,745,307 | $ | 3,520,421 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Nine Months Ended September 30, | ||||||||
| (Amounts in thousands) | 2008 | 2007 | ||||||
| Cash flows – Operating activities: | ||||||||
| Net earnings | $ | 327,981 | $ | 159,874 | ||||
Adjustments to reconcile net earnings to net cash (used) provided by operating activities: | ||||||||
| Depreciation | 54,414 | 49,029 | ||||||
| Amortization of intangible and other assets | 7,519 | 7,408 | ||||||
| Amortization of deferred loan costs | 1,265 | 1,694 | ||||||
| Net gain on disposition of assets | (6,200 | ) | (2,018 | ) | ||||
| Gain on bargain purchase | (3,400 | ) | - | |||||
| Excess tax benefits from stock-based compensation arrangements | (16,414 | ) | (8,177 | ) | ||||
| Stock-based compensation | 23,981 | 19,213 | ||||||
| Net earnings from affiliates, net of dividends received | (5,911 | ) | (6,339 | ) | ||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable, net | (280,343 | ) | (119,022 | ) | ||||
| Inventories, net | (190,292 | ) | (147,729 | ) | ||||
| Prepaid expenses and other | (26,763 | ) | (34,831 | ) | ||||
| Other assets, net | 7,571 | (4,665 | ) | |||||
| Accounts payable | (32,599 | ) | (24,111 | ) | ||||
| Accrued liabilities and income taxes payable | 212,336 | 152,866 | ||||||
| Retirement obligations and other liabilities | (46,034 | ) | 12,531 | |||||
| Net deferred taxes | (31,914 | ) | (10,623 | ) | ||||
| Net cash flows (used) provided by operating activities | (4,803 | ) | 45,100 | |||||
| Cash flows – Investing activities: | ||||||||
| Capital expenditures | (72,506 | ) | (60,941 | ) | ||||
| Proceeds from disposal of assets | 7,556 | 3,906 | ||||||
| Change in restricted cash | 2,144 | (274 | ) | |||||
| Net cash flows used by investing activities | (62,806 | ) | (57,309 | ) | ||||
| Cash flows – Financing activities: | ||||||||
| Net borrowings under lines of credit | - | 58,000 | ||||||
| Excess tax benefits from stock-based compensation arrangements | 16,414 | 8,177 | ||||||
| Payments on long-term debt | (4,261 | ) | (1,420 | ) | ||||
| Borrowings (payments) under other financing arrangements | 9,644 | (4,486 | ) | |||||
| Repurchase of common shares | (134,997 | ) | (44,798 | ) | ||||
| Payments of dividends | (37,348 | ) | (17,176 | ) | ||||
| Proceeds from stock option activity | 11,214 | 13,341 | ||||||
| Net cash flows (used) provided by financing activities | (139,334 | ) | 11,638 | |||||
| Effect of exchange rate changes on cash | (10,201 | ) | 4,678 | |||||
| Net change in cash and cash equivalents | (217,144 | ) | 4,107 | |||||
| Cash and cash equivalents at beginning of year | 370,575 | 67,000 | ||||||
| Cash and cash equivalents at end of period | $ | 153,431 | $ | 71,107 | ||||
| SEGMENT INFORMATION | ||||||||
| FLOWSERVE PUMP DIVISION | Three Months Ended September 30, | |||||||
| (Amounts in millions) | 2008 | 2007 | ||||||
| Bookings | $ | 858.3 | $ | 594.9 | ||||
| Sales | 639.2 | 496.4 | ||||||
| Gross profit | 194.8 | 147.9 | ||||||
| Gross profit margin | 30.5 | % | 29.8 | % | ||||
| Operating income | 99.3 | 68.9 | ||||||
| Operating margin | 15.5 | % | 13.9 | % | ||||
| FLOW CONTROL DIVISION | Three Months Ended September 30, | |||||||
| (Amounts in millions) | 2008 | 2007 | ||||||
| Bookings | $ | 367.6 | $ | 324.0 | ||||
| Sales | 365.2 | 295.0 | ||||||
| Gross profit | 132.5 | 101.1 | ||||||
| Gross profit margin | 36.3 | % | 34.3 | % | ||||
| Operating income | 61.0 | 41.1 | ||||||
| Operating margin | 16.7 | % | 13.9 | % | ||||
| FLOW SOLUTIONS DIVISION | Three Months Ended September 30, | |||||||
| (Amounts in millions) | 2008 | 2007 | ||||||
| Bookings | $ | 173.0 | $ | 159.4 | ||||
| Sales | 170.9 | 140.7 | ||||||
| Gross profit | 77.7 | 64.5 | ||||||
| Gross profit margin | 45.5 | % | 45.8 | % | ||||
| Operating income | 32.7 | 30.4 | ||||||
| Operating margin | 19.1 | % | 21.6 | % | ||||
| SEGMENT INFORMATION | ||||||||
| FLOWSERVE PUMP DIVISION | Nine Months Ended September 30, | |||||||
| (Amounts in millions) | 2008 | 2007 | ||||||
| Bookings | $ | 2,484.9 | $ | 1,869.3 | ||||
| Sales | 1,833.5 | 1,440.3 | ||||||
| Gross profit | 575.5 | 408.9 | ||||||
| Gross profit margin | 31.4 | % | 28.4 | % | ||||
| Operating income | 281.2 | 175.9 | ||||||
| Operating margin | 15.3 | % | 12.2 | % | ||||
| FLOW CONTROL DIVISION | Nine Months Ended September 30, | |||||||
| (Amounts in millions) | 2008 | 2007 | ||||||
| Bookings | $ | 1,187.0 | $ | 948.1 | ||||
| Sales | 1,035.7 | 848.7 | ||||||
| Gross profit | 371.6 | 295.6 | ||||||
| Gross profit margin | 35.9 | % | 34.8 | % | ||||
| Operating income | 166.9 | 118.6 | ||||||
| Operating margin | 16.1 | % | 14.0 | % | ||||
| FLOW SOLUTIONS DIVISION | Nine Months Ended September 30, | |||||||
| (Amounts in millions) | 2008 | 2007 | ||||||
| Bookings | $ | 513.7 | $ | 438.4 | ||||
| Sales | 495.5 | 404.4 | ||||||
| Gross profit | 223.3 | 182.9 | ||||||
| Gross profit margin | 45.1 | % | 45.2 | % | ||||
| Operating income | 96.6 | 81.4 | ||||||
| Operating margin | 19.5 | % | 20.1 | % | ||||
Contacts:
Investor Contact:
Zac Nagle, 972-443-6557
Vice
President – Investor Relations
or
Media
Contact:
Lars Rosene, 469-420-3264
Vice President –
Global Communications and Public Affairs
