Flowserve Corporation : Flowserve Previews Expected 2012 Key Financial Metrics
and Issues Initial 2013 Guidance of $9.60-$10.60 per share
Announces dates for fourth quarter earnings and upcoming analyst day
DALLAS, January 24, 2013 - Flowserve Corp. (NYSE:FLS), a leading provider of
flow control products and services for the global infrastructure markets,
today previewed its expectations for certain key 2012 financial metrics and
issued its initial guidance for full year 2013. In addition, the company
announced its fourth quarter and full year 2012 earnings release dates and
plans for its Analyst Day event.
Based on its preliminary review, Flowserve anticipates fourth quarter 2012
earnings in a range of $2.75 to $2.90 per fully diluted share, including an
expected tax rate of approximately 26 percent for the quarter. With these
anticipated fourth quarter results, the company now expects full year 2012
earnings in a forecasted range of $8.45 to $8.60 per fully diluted share,
within the upper-half of the company's previously announced target range. This
range would represent full year 2012 EPS growth between approximately 10.6 and
12.6 percent compared to full year 2011. With solid cash generation in the
fourth quarter, Flowserve ended 2012 with approximately $304 million of cash
and cash equivalents.
"We are very pleased with our expected full year 2012 earnings performance, as
we continued to execute our long-term plan of converting mid-to-high single
digit revenue growth into leveraged earnings growth," said Mark A. Blinn,
Flowserve president and chief executive officer. "Our 2012 success was
primarily the result of both operational performance and margin improvements,
combined with a focus on cost control, and aided by our enhanced capital
structure strategy. These factors more than offset the significant currency
headwinds that impacted both operating income and other income well beyond our
expectations at the beginning of the year. Our overall performance led to
improved cash generation, while we remained committed to our customer's
expectations for quality and on-time delivery."
Based upon fourth quarter 2012 bookings of nearly $1.1 billion, consisting of
approximately 45 percent aftermarket as well as other smaller- to mid-sized
awards, the company announced full year 2012 bookings of approximately $4.7
billion. Compared to the prior year, full year 2012 bookings represent an
increase of 1.1 percent or 5.5 percent excluding currency effects.
Aftermarket bookings for full year 2012 were approximately 41 percent of total
bookings, and increased 4.0 percent compared to full year 2011, or 7.1 percent
excluding currency effects. Total backlog at December 31, 2012 was
approximately $2.6 billion, compared to $2.7 billion at December 31, 2011.
Blinn continued, "Beyond our strong earnings performance, we are also
encouraged by the profile of projects we added to our backlog during the year.
While we did not see the release of significant large capital projects that
were in the FEED stage during 2012, we successfully increased our bookings and
remained selective about the projects we pursued. And, we believe these
larger capital projects remain an opportunity for Flowserve in the latter half
During 2012, Flowserve returned over $845 million to shareholders through
dividends and share repurchases, including approximately 6.2 million shares
repurchased at an average price of approximately $124 per share. At December
31, 2012, approximately $286 million of capacity remained available under the
currently authorized $1 billion share repurchase program. On a fully diluted
basis, Flowserve ended the year with approximately 48.7 million shares
outstanding and had weighted average shares of 50.0 million and 52.7 million
for the fourth quarter and full year 2012, respectively.
Flowserve also today announced its initial 2013 target range of $9.60 to
$10.60 per share, noting its expectation for progressively stronger earnings
in the second half of the year with the expected phase-in of higher margin
work. The company added that its forecast assumes current exchange rates, a
more normalized tax rate of approximately 30 percent and the completion of its
current share repurchase program in the first half of the year followed by a
return to its previously announced capital allocation policy.
"While some uncertainties and risks exist, we remain cautiously optimistic
when looking at 2013 given the diversity of our served end markets and
geographies, as well as our strong backlog. We believe that a third
consecutive year of double-digit EPS growth is achievable through internal
operational improvements, a growing aftermarket franchise and our
shareholder-focused capital allocation strategy. All told, we made good
progress on our ongoing 'One Flowserve' initiative during 2012, and we
continue to believe that additional opportunities remain. The continued
execution of this strategy should translate into consistent business growth,
improving operating platforms, solid cash flow generation and an ongoing
commitment to serving our customers," concluded Blinn.
Flowserve announced its intent to file its 2012 Annual Report on Form 10-K and
announce fourth quarter and full year 2012 financial results after the markets
have closed on Thursday, February 21, 2013 and hold its conference call on the
following day, Friday, February 22, at 11:00 AM Eastern.
Flowserve also announced that its Analyst Day is scheduled for Wednesday,
March 20, in New York City. The event is scheduled to start at 9:00 AM
Eastern, with presentations from Flowserve senior management, and conclude at
approximately noon that day.
A live audio webcast of both the earnings conference call and the Flowserve
analyst day presentations, along with corresponding slides, will be available
in the Investor Relations section of the Flowserve website at
www.flowserve.com. An archived replay of these webcasts will also be
available following the events at www.flowserve.com.
Jay Roueche, vice president, treasurer & investor relations, (972) 443-6550
Mike Mullin, director, investor relations (972) 443-6636
Steve Boone, director, global communications & public affairs (972) 443-6644
About Flowserve: 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
Safe Harbor Statement: This news release includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section
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The forward-looking statements included in this news release are based on our
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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; changes in the global financial markets and the availability of
capital 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; 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 or trade embargoes that could affect customer markets,
particularly 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; our exposure to
fluctuations in foreign currency exchange rates, including in
hyperinflationary countries such as Venezuela; 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; 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; and other
factors described from time to time in our filings with the Securities and
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Source: Flowserve Corporation via Thomson Reuters ONE
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