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Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
Flowserve Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 27, 2011 05:39PM
Flowserve Corp. (FLS) filed Quarterly Report for the period ended 2011-03-31. Highlight of Business Operations:As discussed in Note 6 to our condensed consolidated financial statements included in this Quarterly Report, beginning in 2009, we initiated Realignment Programs to reduce and optimize certain non-strategic manufacturing facilities and our overall cost structure by improving our operating efficiency, reducing redundancies, maximizing global consistency and driving improved financial performance, as well as expanding our efforts to optimize assets, responding to reduced orders and driving an enhanced customer-facing organization. To date, we have incurred charges related to our Realignment Programs of $87.2 million, including $18.3 million in 2010 and $68.1 million in 2009. We expect to incur approximately $3 million of additional charges for total expected Realignment Programs charges of approximately $90 million for approved plans. Total expected realignment charges represent management’s best estimate to date for approved plans. As the execution of certain initiatives are still in process, the amount and nature of actual realignment charges incurred could vary from total expected charges. Other income (expense), net for the three months ended March 31, 2011 increased to other income, net of $8.5 million, as compared with other expense, net of $21.5 million for the same period in 2010, primarily due to a $15.6 million increase in gains (due to a $5.6 million gain in the current period as compared with a $10.0 million loss in the prior period) on foreign exchange contracts, as well as a $14.7 million increase in gains (due to a $3.1 million gain in the current period as compared with an $11.6 million loss in the prior period) arising from transactions in currencies other than our sites’ functional currencies, which reflect the relative weakening of the U.S. dollar exchange rate versus the Euro during the three months ended March 31, 2011 as compared with the comparable period in 2010. The above mentioned increase in gains includes the impact of the $8.9 million net loss recorded in the first quarter of 2010 as a result of Venezuela’s currency devaluation and the settlement of U.S. dollar denominated liabilities at the more favorable essential items exchange rate of 2.60 Bolivars to the U.S. dollar recorded, which did not recur in 2011. Bookings for the three months ended March 31, 2011 increased by $10.3 million, or 1.7%, as compared with the same period in 2010. The increase included currency benefits of approximately $12 million. Customer bookings in Latin America and Asia Pacific increased $20.9 million (including currency benefits of approximately $3 million) and $4.5 million (including currency benefits of approximately $6 million), respectively. These increases were partially offset by decreases of $11.3 million (including currency benefits of approximately $2 million) and $6.3 million (including currency benefits of approximately $1 million) in EMA and North America, respectively. The overall net increase consisted of increases in bookings in the oil and gas, mining, water management and chemical industries, primarily driven by aftermarket bookings. These increases were slightly offset by decreased bookings in the power generation and general industries. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) increased $2.5 million. Sales for the three months ended March 31, 2011 decreased $8.0 million, or 1.5%, as compared with the same period in 2010. The decrease included currency benefits of approximately $13 million. The decrease was primarily due to decreases in customer sales in EMA of $47.6 million (including currency benefits of approximately $2 million), driven by decreased original equipment sales, primarily resulting from lower beginning of year backlog in EMA. In addition, Latin America decreased by $4.2 million (including currency benefits of approximately $3 million), driven by decreased original equipment sales, mostly offset by increased aftermarket sales, These decreases were partially offset by increases of customer sales in North America of $19.4 million (including currency benefits of approximately $1 million) and Asia Pacific of $13.5 million (including currency benefits of approximately $6 million), primarily driven by increased aftermarket sales. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) increased $9.3 million. Backlog of $1,547.9 million at March 31, 2011 increased by $112.4 million, or 7.8%, as compared with December 31, 2010. Currency effects provided an increase of approximately $37 million. Backlog at March 31, 2011 and December 31, 2010 includes $22.5 million and $25.5 million, respectively, of interdivision backlog (which is eliminated and not included in consolidated backlog as disclosed above). Backlog of $625.7 million at March 31, 2011 increased by $57.7 million, or 10.2%, as compared with December 31, 2010. Currency effects provided an increase of approximately $21 million. Backlog at March 31, 2011 and December 31, 2010 includes $44.1 million and $38.5 million, respectively, of interdivision backlog (which is eliminated and not included in consolidated backlog as disclosed above).
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