Flowserve Corporation Reports First Quarter 2021 Results

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 first quarter ended March 31, 2021.

First Quarter 2021 Highlights (all comparisons to the 2020 first quarter, unless otherwise noted)¹

• Reported Earnings Per Share (EPS) of $0.11 and Adjusted EPS² of $0.28
  • Reported EPS includes after-tax adjusted items of $22.6 million, including realignment costs, below-the-line foreign exchange impacts and debt retirement costs

• Total bookings were $945.0 million, down 3.3%, or 6.0% on a constant currency basis and up 14.5% on a sequential basis
  • Original equipment bookings were $487.7 million, or 52% of total bookings, up 2.7%, or down 0.1% on a constant currency basis and up 20.5% on a sequential basis
  • Aftermarket bookings were $457.3 million, or 48% of total bookings, down 8.9%, or 11.5% on a constant currency basis and up 8.8% on a sequential basis

• Sales were $857.3 million, down 4.1%, or 7.0% on a constant currency basis
  • Original equipment sales were $406.9 million, down 9.9%, or 13.1% on a constant currency basis
  • Aftermarket sales were $450.4 million, up 1.9%, or down 0.9% on a constant currency basis

• Reported gross and operating margins were 29.3% and 6.5%, respectively
  • Adjusted gross and operating margins ³ were 30.4% and 8.1%, respectively 

• Backlog at March 31, 2021 was $1.9 billion, up 1.6% versus December 31, 2020

“Flowserve delivered a strong start to 2021, including a 47% increase in adjusted EPS year-over-year while generating 15 percent sequential bookings growth,” said Scott Rowe, Flowserve’s president and chief executive officer. “Our decisive cost actions in 2020, combined with other Flowserve 2.0 transformation activities, were key to our first quarter performance, as adjusted operating income increased over $20 million from last year.”

Rowe concluded, “Our first quarter results support our conviction that Flowserve is strongly positioned to benefit as the global economic recovery continues and as COVID subsides. The investment cycle in our core end markets is appearing to inflect as we see meaningful progress with vaccinations driving increased mobility around the world. We are increasingly confident that our focus on growth, product innovation and initiatives to support our customers’ energy transition and emission reduction efforts will position Flowserve well to return to earnings growth early in 2022, driving value for our shareholders and our customers.”

Revised 2021 Guidance⁴

Flowserve today revised certain of the full-year metrics of our 2021 target range. Previously announced metrics not shown below are reaffirmed as of today. The revised categories and the new range include:

	Revised Target Range		Prior Target Range
Revenues	Down 3.0% to 5.0%		Down 4% to 7.0%
Adjusted Earnings Per Share	$1.40 - $1.60		$1.30 - $1.55

Consistent with the prior range, Flowserve’s 2021 Adjusted EPS target range excludes expected realignment charges of approximately $25 million, as well as the potential impact of below-the-line foreign currency effects and certain other discrete items. In a change to our approach for 2021, Flowserve 2.0 transformation-related expenses of approximately 5 cents per share will now be included in both our reported and adjusted EPS.

First Quarter 2021 Results Conference Call

Flowserve will host its conference call with the financial community on Tuesday, May 4^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.

¹ Prior period comparisons are impacted by certain accounting revisions. Reference Flowserve’s Form 8-K filed on November 5, 2020 and Form 10-Q for the period ending March 31, 2021 for additional details.
² See Reconciliation of Non-GAAP Measures table for detailed reconciliation of reported results to adjusted measures.
³ Adjusted gross and operating margins are calculated by dividing adjusted gross profit and adjusted operating income, respectively, by revenues. Adjusted gross profit and adjusted operating income are derived by excluding the adjusted items. See reconciliation of Non-GAAP Measures table for detailed reconciliation.
⁴ Adjusted 2021 EPS excludes realignment expenses, the impact from other specific discrete items and below-the-line foreign currency effects and utilizes year-end 2020 FX rates and approximately 131 million fully diluted shares.
^_ FX impact is calculated by comparing the difference between the actual average FX rates of 2020 and the year-end 202