Flowserve Corporation Reports First Quarter 2015 Results
Flowserve Corporation reported Adjusted1 Earnings Per Share (EPS) of $0.58 for the 2015 first quarter, which includes $0.06 per share of negative currency translation as compared to last year, and excludes $0.38 per share of adjusted items.
As previously disclosed, Flowserve s 2015 Adjusted EPS calculation excludes the impact of the SIHI Group ("SIHI") acquisition, which was completed on January 7, 2015, as well as below-the-line foreign currency effects and specific one-time events, such as realignment.
First Quarter 2015 Summary (all comparisons versus prior year quarter, unless otherwise noted):
- Bookings were $1.04 billion, including $85.2 million from SIHI
- Bookings included approximately $577 million of original equipment and $466 million of aftermarket bookings
- Excluding SIHI s contribution, bookings decreased 13.1% on a constant currency basis
- Sales were $1.01 billion, including $66.8 million from SIHI
- Aftermarket sales were $448 million, or approximately 44% of total sales
- Excluding SIHI s contribution, aftermarket sales increased 1.8% constant currency
- Gross profit was $331.7 million, including a $0.6 million loss from SIHI
- Excluding adjusted items, gross profit decreased 11.2%
- Gross margin excluding adjusted items was flat at 35.3%, and up 10 basis points sequentially
- SG&A expense was $239.9 million, including $32.1 million from SIHI
- Excluding 2014 s gain on asset sale and 2015 adjusted items, SG&A expenses declined $23.0 million
- Operating income was $93.4 million, including a $32.8 million loss from SIHI
- Excluding the 2014 gain on asset sale and 2015 adjusted items, operating income decreased 5.8% on a constant currency basis.
- Adjusted operating margin, excluding SIHI and other adjusted items, was 13.8% compared to 14.2% a year ago when excluding the 2014 gain on asset sale
- Backlog at March 31, 2015 was $2.7 billion, including $127.2 million from the SIHI acquisition, which was offset by approximately $129.5 million of currency reduction
"Our 2015 first quarter results were lower than expected, specifically in the final month, by broad-based industrial spending declines, which originated in the oil and gas markets, and were further accentuated by the strengthening U.S. dollar," said Mark Blinn, Flowserve s president and chief executive officer. "Despite this environment, Flowserve continues to perform operationally at a high level, as evidenced by our adjusted gross margin. Additionally, our operational strength allows us to quickly react to the changing marketplace. We are accelerating our existing plans to capture available market opportunities, while driving additional cost savings through manufacturing optimization and SG&A efficiency initiatives. Flowserve has a proven track record of successfully managing through challenging markets, and I am confident we will emerge from the current market an even stronger company.
We also remain committed to effectively allocating capital. In the 2015 first quarter, Flowserve returned over $100 million to our shareholders through dividends and share repurchases. Since implementing our distribution policy in late 2011, Flowserve has now returned over $1.9 billion to shareholders, which encompasses approximately 34.9 million shares repurchased at an average price below $48, while maintaining a strong balance sheet. We believe our shares remain a compelling investment at current levels and we will continue to opportunistically repurchase shares.
At the same time, we have strategically invested to grow our business. Most recently, our acquisition of SIHI brought complementary assets that enable Flowserve to penetrate attractive new markets, enhance our chemical ISO pump strategy and leverage cross-selling opportunities in the aftermarket and across our combined installed base. With the integration still in the early stages, SIHI is performing well, and we are pleased to have identified additional upside opportunities beyond our initial expectations."
Source: Flowserve Corporation