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8-K - FORM 8-K - FLOWSERVE CORP | d70827e8vk.htm |
Exhibit 99.1
News Release
Investor Contact: Paul Fehlman, Vice President Financial Planning & Analysis and Investor Relations
(972) 443-6517
Media Contact: Lars Rosene, Chief Sustainability Officer and Vice President Public Affairs (469)
420-3264
FOR IMMEDIATE RELEASE
Flowserve Announces Expected 2009 EPS to be At or Above the High End of the Previously
Announced Target Range of $7.20 to $7.50, Including Approximately $68 Million, or $0.90 Per
Share, in 2009 Realignment Charges
2009 Full Year Bookings of Approximately $3.9 Billion and Year End Backlog of Approximately $2.4
Billion
2009 Closing Cash Balance Expected to be Approximately $650 Million
2010 EPS Target Range of $6.35 to $7.15, which Includes the Full Impact of Up to $20 Million, or
Approximately $0.26 Per Share, in Planned 2010 Realignment Costs and an Expected After-tax
Charge of Around $14 Million, or $0.25 Per Share, from Venezuelan Currency Devaluation
Announces New Flow Solutions Group, Combining its Pump and Seal Divisions to Enhance Customer
Focus and Leverage Joint Capabilities
DALLAS, January 29, 2010 Flowserve Corporation (NYSE:FLS), a leading provider of flow
control products and services for the global infrastructure markets, today announced that it
now sees 2009 EPS at or above the high end of its previously announced target range of $7.20
to $7.50, including approximately $68 million (of the originally planned $71 million), or
$0.90 per share, in 2009 realignment charges. The company added that it expects to achieve
approximately $110 million in annual run rate benefits from these realignment initiatives
and the realignment charges expected to be taken in 2010.
Bookings for full year 2009 were approximately $3.9 billion, down 24 percent compared to
full year 2008. Bookings for the fourth quarter 2009 were approximately $940 million, a
decrease of 8 percent compared to the fourth quarter 2008.
During the fourth quarter we saw delays in the release of major pending projects,
said Mark Blinn, Flowserve President and Chief Executive Officer. We continue to actively
pursue, with appropriate discipline, a number of major orders, focusing on our strategic
global markets, added Blinn.
We continued to see good levels of other original equipment business and aftermarket
business opportunities worldwide, said Blinn, and our continued focus on these parts of
our business have provided stable and profitable business in recent challenging markets.
Additionally, the growth in our original equipment sales over the past few years will
provide continued aftermarket opportunities, Blinn noted.
The companys backlog at December 31, 2009 was approximately $2.4 billion, compared to $2.8
billion at December 31, 2008.
The company had strong cash flow performance in the fourth quarter of 2009, ending the year
with a cash balance of approximately $650 million, exceeding total debt by approximately $90
million.
The company announced its 2010 EPS target range of $6.35 to $7.15, which includes the full
impact of up to $20 million (including $3 million carried over from 2009), or approximately
$0.26 per share, in planned 2010 realignment charges and an expected first quarter after-tax
charge of around $14 million, or $0.25 per share, to reflect the adverse impact of the
devaluation of the Venezuelan bolivar.
In January 2010, the Venezuelan bolivar was devalued from 2.15 bolivars to 4.3 bolivars to
the U.S. dollar, and the currency was designated as hyperinflationary. As a result, the
company expects to recognize an estimated currency re-measurement loss in the first quarter
of 2010 of around $14 million, which will be recognized in other income (expense). The
company is
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assessing the ongoing impact of the currency devaluation on its operations in Venezuela and
imports into the Venezuelan market. The Venezuelan subsidiarys sales in 2009 and total
assets after the effect of the devaluation represented less than 1% of the companys
respective consolidated totals.
As part of its strategy to drive an enhanced customer facing organization and to further
leverage best practices and capabilities across the two organizations, Flowserve announced
that the Flowserve Pump Division and the Flow Solutions Division have been integrated into
the new Flow Solutions Group (FSG), effective January 1, 2010. The new group will be led by
Senior Vice President and President of FSG, Tom Ferguson. This integration is designed to
drive business growth and provide increased value to our customers, while we continue to
focus on operational excellence and cost efficiency, said Blinn.
Our balance sheet positions us to respond to dynamic market conditions. It also allows us
to further invest in our business by focusing on growth initiatives while implementing our
strategy of rationalizing and optimizing our global footprint. As part of our long term
strategy, the FSG integration and our other investments should drive higher customer service
levels, growth opportunities, and greater efficiencies for the future. said Blinn.
As previously announced, Flowserve plans to file its 2009 Annual Report on Form 10-K and
announce its fourth quarter and full year 2009 financial results on Wednesday, February 24
and hold its conference call on Thursday, February 25.
About Flowserve Corp.
Flowserve Corp. is one of the worlds 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 companys 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,
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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; 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 petroleum, chemical, power and water industries; the adverse
impact of volatile raw materials prices on our products and operating margins; our ability
to execute and realize the expected financial benefits from our strategic realignment
initiatives; 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 exposure to fluctuations in foreign currency
exchange rates, particularly 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 shareholder
litigation and litigation involving asbestos-containing material claims; a foreign
government investigation regarding our participation in the United Nations Oil-for-Food
Program; our foreign subsidiaries autonomously conducting limited business operations and
sales in certain countries 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; 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; 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.
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