Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, reported its financial results for the third quarter ended September 30, 2026.

Highlights:

  • Bookings of $1.38 billion, up 14% on a reported basis and 8% organically versus the prior-year period

  • Record aftermarket bookings of $728 million

  • Operating margin of 12.5% expanded 580 basis points and adjusted1 operating margin2 of 16.5% expanded 170 basis points compared to the prior-year period

  • Reported EPS of $0.81 and adjusted EPS3 of $1.07

  • Raised the low end of full-year 2026 adjusted EPS3 guidance to $4.10 to $4.20

  • Revised full-year 2026 organic sales guidance to down 2.5% to down 1.5% reflecting increasingly challenging conditions in the Middle East

  • Backlog of $3.5 billion, up 20% year over year, the largest backlog in Flowserve’s history

Management Commentary:

“Our teams delivered another quarter of meaningful bookings growth, adjusted operating margin expansion, and higher adjusted earnings per share while navigating ongoing Middle East disruption,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “The Flowserve Business System is helping us translate solid market demand into bookings growth and stronger profitability, with a clear focus on growth, execution, and customer service. The resilience and commitment of our associates around the globe remain instrumental in our ability to deliver for our customers and shareholders.”

“With three quarters behind us, our year-to-date earnings performance and continued margin expansion support raising the low end of our adjusted EPS guidance range. At the same time, we are lowering our full-year sales growth outlook to reflect more challenging operating conditions in the Middle East, which are delaying customer activity and revenue conversion and are expected to impact fourth-quarter sales. Significant growth in our backlog, alongside healthy underlying demand across our end markets, reinforces our confidence in delivering mid-single digit organic sales CAGR through 2030, while continued operational progress supports our broader long-term financial targets. We remain focused on converting our growing backlog to sales, further reducing complexity in our operations, and continuing to deliver margin expansion to create shareholder value.”

Key Figures (unaudited):

(dollars in millions, except per share)

Q3 2026

 

Q3 2025

 

Change

 

YTD 2026

 

YTD 2025

 

Change

Organic Bookings

 

 

 

 

 

7.7%

 

 

 

 

 

6.1%

Acquisitions/Divestitures Impact

 

 

 

 

 

660 bps

 

 

 

 

 

270 bps

Foreign Exchange Impact

 

 

 

 

 

(20 bps)

 

 

 

 

 

150 bps

Total Bookings

 

$1,383.5

 

$1,213.0

 

14.1%

 

$3,872.5

 

$3,511.2

 

10.3%

Original Equipment Bookings

 

$655.8

 

$559.9

 

17.1%

 

$1,768.6

 

$1,549.0

 

14.2%

Aftermarket Bookings

$727.7

 

$653.1

 

11.4%

 

$2,103.9

 

$1,962.2

 

7.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic Sales4

 

 

 

 

 

(1.2%)

 

 

 

 

 

(4.9%)

Acquisitions/Divestitures Impact

 

 

 

 

670 bps

 

 

 

 

 

260 bps

Foreign Exchange Impact

 

 

 

 

 

(10 bps)

 

 

 

 

 

140 bps

Reported Sales

$1,237.8

 

$1,174.4

 

5.4%

 

$3,475.2

 

$3,507.1

 

(0.9%)

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

12.5%

 

6.7%

 

580 bps

 

12.2%

 

10.2%

 

200 bps

Adjusted Operating Margin

 

16.5%

 

14.8%

 

170 bps

 

15.6%

 

14.1%

 

150 bps

Earnings Per Share (EPS)

$0.81

 

$1.67

 

(51.5%)

 

$2.21

 

$2.85

 

(22.5%)

Adjusted Earnings Per Share (EPS)

 

$1.07

 

$0.90

 

18.9%

 

$2.87

 

$2.53

 

13.4%

Cash From Operations

 

$144.1

 

$401.8

 

($257.7)

 

$230.3

 

$506.1

 

($275.8)

Backlog

 

$3,471.8

 

$2,896.1

 

19.9%

 

$3,471.8

 

$2,896.1

 

19.9%

2026 Guidance3:

The Company updated 2026 guidance:

 

 

Prior

 

Current

 

Organic Sales Growth

 

Approx. (1%)

 

(2.5%) to (1.5%)

 

Impact From Acquisitions/Divestitures

 

Approx. +300 bps

 

Approx. +350 bps

 

Impact From Foreign Exchange Translation

 

Approx. +100 bps

 

Approx. +100 bps

 

Total Sales Growth

 

Approx. +3%

 

+2% to +3%

 

Adjusted EPS

 

$4.05 to $4.20

 

$4.10 to $4.20

 

Net Interest Expense

 

Approx. $85 million

 

Approx. $85 million

 

Adjusted Tax Rate

 

21% to 22%

 

21% to 22%

 

Capital Expenditures

 

Approx. $100 million

 

Approx. $90 million

 

The guidance assumes tariff rates in place as of October 1, 2026, and assumes increasingly challenging conditions in the Middle East, which have been impacted by armed conflict and geopolitical instability.

Webcast and Conference Call Instructions:

Flowserve will host its conference call to discuss third quarter results on Thursday, October 29, 2026, at 8:30 a.m. Eastern Time. The call can be accessed by shareholders and other interested parties on Flowserve’s Investor Relations website.

Upcoming Investor Conferences:

Flowserve announced its participation in the following upcoming investor conferences:

  • On Wednesday, November 11, 2026, Scott Rowe and Brian Ezzell, Senior Vice President and Chief Financial Officer, will participate in investor meetings at the Baird Global Industrial Conference. Additionally, Scott Rowe will participate in a fireside chat that will begin at 1:10 p.m. Central Time (2:10 p.m. Eastern Time).

  • On Wednesday, December 2, 2026, Brian Ezzell will participate in investor meetings as well as a fireside chat at the Goldman Sachs Industrials and Materials Conference that will begin at 11:30 a.m. Eastern Time.

Shareholders and other interested parties can access the live webcasts of the fireside chats on Flowserve’s Investor Relations website. Replays of the webcasts will be available after the events.

Footnotes

1 See Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited) and Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited) tables for a detailed reconciliation of reported results to adjusted measures.

2 Adjusted operating margin is calculated by dividing adjusted operating income by sales. Adjusted operating income is derived by excluding the adjusted items.

3 Adjusted earnings per share (EPS) excludes realignment expenses, the impact from other specific discrete and below-the-line foreign currency effects and utilizes the then-applicable foreign exchange rates and fully diluted shares. Adjusted full-year 2026 EPS guidance excludes certain other discrete items which may arise during the year.

4 Organic is defined as the change in sales, as defined by U.S. GAAP, excluding the impacts of currency translation and acquisitions and divestitures. The impact of currency translation is calculated by translating current year results on a monthly basis at prior year exchange rates for the same period.
 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

Three Months Ended September 30,

(Amounts in thousands)

 

2026

 

 

 

2025

 

 

Sales

$

1,237,773

 

$

1,174,434

 

Cost of sales

 

(823,393

)

 

 

(794,148

)

Gross profit

 

414,380

 

 

 

380,286

 

Selling, general and administrative expense

 

(281,937

)

 

(305,152

)

Gain on sale of business

 

16,177

 

 

—

 

Net earnings from affiliates

 

5,986

 

 

4,138

 

Operating income

 

154,606

 

 

79,272

 

Interest expense

 

(26,641

)

 

(18,738

)

Interest income

 

2,362

 

 

792

 

Other (expense) income, net

 

(8,184

)

 

256,220

 

Earnings before income taxes

 

122,143

 

 

317,546

 

(Provision for) benefit from income taxes

 

(15,090

)

 

(93,688

)

Net earnings, including noncontrolling interests

 

107,053

 

 

223,858

 

Less: net earnings attributable to noncontrolling interests

 

(4,015

)

 

(4,276

)

Net earnings attributable to Flowserve Corporation

$

103,038

 

$

219,582

 

Net earnings per share attributable to Flowserve Corporation common shareholders:

 

 

Basic

$

0.81

 

$

1.69

 

Diluted

 

0.81

 

 

1.67

 
 

Weighted average shares – basic

 

127,164

 

 

130,315

 

Weighted average shares – diluted

 

127,962

 

 

131,235

 
 

Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)

(Amounts in thousands, except per share data)
 

Three Months Ended September 30, 2026

Gross

Profit

Selling, General & Administrative

Expense

Gain on Sale of

Business

Operating

Income

Other Income (Expense),

Net

Provision For (Benefit From) Income

Taxes

Net Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

$

414,380

 

$

281,937

 

$

16,177

 

$

154,606

 

$

(8,184

)

$

15,090

 

$

103,038

 

12.4

%

0.81

 

Reported as a percent of sales

 

33.5

%

 

22.8

%

 

1.3

%

 

12.5

%

 

-0.7

%

 

1.2

%

 

8.3

%

Realignment charges (a)

 

25,971

 

 

(6,018

)

 

(16,177

)

 

15,812

 

 

–

 

 

(6,260

)

 

22,072

 

-39.6

%

0.17

 

Acquisition and divestiture related (b)

 

–

 

 

(5,275

)

 

–

 

 

5,275

 

 

–

 

 

1,241

 

 

4,034

 

23.5

%

0.03

 

Amortization of intangible assets (c)

 

13,898

 

 

(6,765

)

 

–

 

 

20,663

 

 

–

 

 

2,874

 

 

17,789

 

13.9

%

0.14

 

Discrete items (d)

 

–

 

 

(7,830

)

 

–

 

 

7,830

 

 

1,000

 

 

190

 

 

8,640

 

2.2

%

0.07

 

Discrete tax items (e)

 

–

 

 

–

 

 

–

 

 

–

 

 

–

 

 

23,072

 

 

(23,072

)

0.0

%

(0.18

)

Below-the-line foreign exchange impacts (f)

 

–

 

 

–

 

 

–

 

 

–

 

 

5,132

 

 

442

 

 

4,690

 

8.6

%

0.04

 

Adjusted

$

454,249

 

$

256,049

 

$

–

 

$

204,186

 

$

(2,052

)

$

36,649

 

$

137,191

 

20.6

%

1.07

 

Adjusted as a percent of sales

 

36.7

%

 

20.7

%

 

0.0

%

 

16.5

%

 

-0.2

%

 

3.0

%

 

11.1

%
 

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs and includes the gain on divestiture of our PMV Automation business (PMV) within FCD.

(b) Charges represent costs associated with strategic acquisition and divestiture activities including the acquisitions of Trillium Valves and Flowserve Al Mansoori Services Company (FAMCO), and the divestiture of PMV.

(c) Charges represent non-cash amortization of intangible assets and step-up in value of acquired inventories.

(d) Charge represents the $7,972 strategic acquisition of intellectual property within FPD, an immaterial adjustment to transaction costs related to the divestiture of our asbestos-related assets and liabilities that were adjusted out in a prior period and $1,000 for non-cash pension settlement accounting losses incurred in conjunction with the U.S. pension plan.

(e) Discrete tax adjustment includes the impact from the release of a valuation allowance in Italy.

(f) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency and includes the foreign exchange loss on the Blue Chip Swap Securities transaction.
 
 

Three Months Ended September 30, 2025

Gross

Profit

Selling, General & Administrative

Expense

Operating

Income

Other Income (Expense),

Net

Provision For (Benefit From) Income

Taxes

Net Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

$

380,286

 

$

305,152

 

$

79,272

 

$

256,220

 

$

93,688

 

$

219,582

 

 

29.5

%

1.67

 

Reported as a percent of sales

 

32.4

%

 

26.0

%

 

6.7

%

 

21.8

%

 

8.0

%

 

18.7

%

Realignment charges (a)

 

25,481

 

 

(4,571

)

 

30,052

 

 

–

 

 

6,907

 

 

23,145

 

 

23.0

%

0.18

 

Acquisition related (b)

 

9

 

 

(4,243

)

 

4,252

 

 

–

 

 

1,000

 

 

3,252

 

 

23.5

%

0.02

 

Purchase accounting step-up and intangible asset amortization (c)

 

2,625

 

 

(1,300

)

 

3,925

 

 

–

 

 

1,182

 

 

2,743

 

 

30.1

%

0.02

 

Discrete items (d)(e)(f)

 

31

 

 

(30,351

)

 

30,382

 

 

1,500

 

 

7,499

 

 

24,383

 

 

23.5

%

0.19

 

Merger transaction costs (g)

 

–

 

 

(25,682

)

 

25,682

 

 

–

 

 

5,885

 

 

19,797

 

 

22.9

%

0.15

 

Merger termination payment (h)

 

–

 

 

–

 

 

–

 

 

(266,000

)

 

(60,957

)

 

(205,043

)

 

22.9

%

(1.56

)

Discrete tax items (i)

 

–

 

 

–

 

 

–

 

 

–

 

 

(24,860

)

 

24,860

 

 

0.0

%

0.19

 

Below-the-line foreign exchange impacts (j)

 

–

 

 

–

 

 

–

 

 

5,401

 

 

622

 

 

4,779

 

 

11.5

%

0.04

 

Adjusted

$

408,432

 

$

239,005

 

$

173,565

 

$

(2,879

)

$

30,966

 

$

117,498

 

 

20.3

%

0.90

 

Adjusted as a percent of sales

 

34.8

%

 

20.4

%

 

14.8

%

 

-0.2

%

 

2.6

%

 

10.0

%
 

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $2,300 is non-cash.

(b) Charge represents acquisition and integration related costs associated with the MOGAS acquisition.

(c) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

(d) Charge represents non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our U.S. Qualified pension plan.

(e) Charge of $1,500 represents a non-cash pension settlement accounting loss incurred in conjunction with the freeze of our U.S. Qualified pension plan.

(f) Charge of $30,100 represents the Q3 2025 non-cash adjustment to our estimated liability for incurred by not reported asbestos claims based on an annual actuarial study.

(g) Charge represents transaction costs incurred associated with the terminated Chart Industries merger.

(h) Amount represents the Chart Industries merger termination fee paid to Flowserve.

(i) Amount represents a one-time tax charge related to enactment of the One Big Beautiful Bill Act during Q3 2025.

(j) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.
 

SEGMENT INFORMATION

(Unaudited)

Three Months Ended September 30,

FLOWSERVE PUMPS DIVISION

 

2026

 

 

 

2025

 

(Amounts in millions, except percentages)

 

Bookings

$

940.1

 

$

819.5

 

Sales

 

830.4

 

 

800.3

 

Gross profit

 

314.3

 

 

265.8

 

Gross profit margin

 

37.8

%

 

33.2

%

SG&A

 

152.2

 

 

135.0

 

Segment operating income

 

168.0

 

 

134.9

 

Segment operating income as a percentage of sales

 

20.2

%

 

16.9

%
 

Three Months Ended September 30,

FLOW CONTROL DIVISION

 

2026

 

 

 

2025

 

(Amounts in millions, except percentages)

 

Bookings

$

446.2

 

$

396.1

 

Sales

 

411.6

 

 

377.4

 

Gross profit

 

98.9

 

 

114.2

 

Gross profit margin

 

24.0

%

 

30.3

%

SG&A

 

80.9

 

 

67.8

 

Gain on sale of business

 

16.2

 

 

—

 

Segment operating income

 

34.2

 

 

46.4

 

Segment operating income as a percentage of sales

 

8.3

%

 

12.3

%
 

Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)

(Amounts in thousands)
 

Flowserve Pumps Division

Three Months Ended September 30, 2026

Gross

Profit

Selling, General & Administrative

Expense

Operating

Income

Three Months Ended

September 30, 2025

Gross

Profit

Selling, General & Administrative

Expense

Operating

Income

Reported

$

314,255

 

$

152,218

 

$

168,023

 

Reported

$

265,776

 

$

135,046

 

$

134,869

 

Reported as a percent of sales

 

37.8

%

 

18.3

%

 

20.2

%

Reported as a percent of sales

 

33.2

%

 

16.9

%

 

16.9

%

Realignment charges (a)

 

(869

)

 

(534

)

 

(335

)

Realignment charges (a)

 

21,628

 

 

(88

)

 

21,716

 

Discrete items (b)

 

–

 

 

(7,967

)

 

7,967

 

Discrete items (b)

 

24

 

 

(63

)

 

87

 

Amortization of intangible assets (d)

 

2,916

 

 

(2,276

)

 

5,192

 

Adjusted

$

287,428

 

$

134,895

 

$

156,672

 

Adjusted

$

316,302

 

$

141,441

 

$

180,847

 

Adjusted as a percent of sales

 

35.9

%

 

16.9

%

 

19.6

%

Adjusted as a percent of sales

 

38.1

%

 

17.0

%

 

21.8

%
 
 

Flow Control Division

Three Months Ended September 30, 2026

Gross

Profit

Selling, General & Administrative

Expense

Gain on Sale of

Business

Operating

Income

Three Months Ended

September 30, 2025

Gross

Profit

Selling, General & Administrative

Expense

Operating

Income

Reported

$

98,906

 

$

80,889

 

$

16,177

 

$

34,194

 

Reported

$

114,250

 

$

67,810

 

$

46,440

 

Reported as a percent of sales

 

24.0

%

 

19.7

%

 

3.9

%

 

8.3

%

Reported as a percent of sales

 

30.3

%

 

18.0

%

 

12.3

%

Realignment charges (a)

 

26,840

 

 

(3,762

)

 

(16,177

)

 

14,425

 

Realignment charges (a)

 

4,386

 

 

(2,395

)

 

6,781

 

Acquisition and divestiture related (c)

 

–

 

 

(2,956

)

 

–

 

 

2,956

 

Acquisition related (c)

 

9

 

 

(4,243

)

 

4,252

 

Amortization of intangible assets (d)

 

10,982

 

 

(4,489

)

 

–

 

 

15,471

 

Purchase accounting step-up and intangible asset amortization (d)

 

2,625

 

 

(1,300

)

 

3,925

 

Adjusted

$

136,728

 

$

69,682

 

$

–

 

$

67,046

 

Discrete items (b)

 

5

 

 

(45

)

 

50

 

Adjusted as a percent of sales

 

33.2

%

 

16.9

%

 

0.0

%

 

16.3

%

Adjusted

$

121,275

 

$

59,827

 

$

61,448

 

Adjusted as a percent of sales

 

32.1

%

 

15.9

%

 

16.3

%
 
 

Note: Amounts may not calculate due to rounding

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs and includes the gain on divestiture of our PMV Automation business (PMV) within FCD.

(a) Charges represent realignment costs incurred as a result of realignment programs of which $2,300 is non-cash.

(b) Charge represents the $7,967 strategic acquisition of intellectual property within FPD.

(b) Charge represents non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our U.S. Qualified pension plan.

(c) Charges represent costs associated with strategic acquisition and divestiture activities including the acquisitions of Trillium Valves and the divestiture of PMV with FCD.

(c) Charge represents acquisition and integration-related costs associated with the MOGAS acquisition.

(d) Charges represent non-cash amortization of intangible assets and step-up in value of acquired inventories.

(d) Charge represents amortization of acquisition related intangible assets associated with the MOGAS acquisition.
 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except per share data)

Nine Months Ended September 30,

 

2026

 

 

 

2025

 

 

Sales

$

3,475,217

 

$

3,507,069

 

Cost of sales

 

(2,296,270

)

 

 

(2,350,867

)

Gross profit

 

1,178,947

 

 

 

1,156,202

 

Selling, general and administrative expense

 

(811,655

)

 

(814,237

)

Gain on sale of business

 

16,177

 

 

—

 

Net earnings from affiliates

 

41,992

 

 

15,786

 

Operating income

 

425,461

 

 

357,751

 

Interest expense

 

(72,768

)

 

(58,166

)

Interest income

 

8,885

 

 

5,063

 

Other (expense) income, net

 

(13,272

)

 

213,958

 

Earnings before income taxes

 

348,306

 

 

518,606

 

Provision for income taxes

 

(53,299

)

 

(127,067

)

Net earnings, including noncontrolling interests

 

295,007

 

 

391,539

 

Less: Net earnings attributable to noncontrolling interests

 

(11,290

)

 

(16,298

)

Net earnings attributable to Flowserve Corporation

$

283,717

 

$

375,241

 

Net earnings per share attributable to Flowserve Corporation common shareholders:

 

 

Basic

$

2.23

 

$

2.87

 

Diluted

 

2.21

 

 

2.85

 
 

Weighted average shares – basic

 

127,434

 

 

130,910

 

Weighted average shares – diluted

 

128,314

 

 

131,836

 
 

Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)

(Amounts in thousands, except per share data)
 

Nine Months Ended September 30, 2026

Gross

Profit

Selling, General & Administrative

Expense

Gain on Sale of

Business

Net earnings from

affiliates

Operating

Income

Other Income (Expense),

Net

Provision For (Benefit From) Income

Taxes

Net Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

$

1,178,947

 

$

811,655

 

$

16,177

 

$

41,992

 

$

425,461

 

$

(13,272

)

$

53,299

 

$

283,717

 

15.3

%

2.21

 

Reported as a percent of sales

 

33.9

%

 

23.4

%

 

0.5

%

 

1.2

%

 

12.2

%

 

-0.4

%

 

1.5

%

 

8.2

%

Realignment charges (a)

 

75,452

 

 

(26,234

)

 

(16,177

)

 

–

 

 

85,509

 

 

–

 

 

6,773

 

 

78,736

 

7.9

%

0.61

 

Acquisition and divestiture related (b)(c)

 

–

 

 

(23,179

)

 

–

 

 

(27,700

)

 

(4,521

)

 

–

 

 

5,554

 

 

(10,075

)

-122.8

%

(0.08

)

Amortization of intangible assets (d)

 

16,454

 

 

(12,113

)

 

–

 

 

–

 

 

28,567

 

 

–

 

 

4,394

 

 

24,173

 

15.4

%

0.19

 

Discrete items (e)(f)

 

62

 

 

(8,719

)

 

–

 

 

–

 

 

8,781

 

 

5,576

 

 

1,491

 

 

12,866

 

10.4

%

0.10

 

Discrete tax items (g)

 

–

 

 

–

 

 

–

 

 

–

 

 

–

 

 

–

 

 

23,072

 

 

(23,072

)

0.0

%

(0.18

)

Below-the-line foreign exchange impacts (h)

 

–

 

 

–

 

 

–

 

 

–

 

 

–

 

 

2,409

 

 

255

 

 

2,154

 

10.6

%

0.02

 

Adjusted

$

1,270,915

 

$

741,410

 

$

–

 

$

14,292

 

$

543,797

 

$

(5,287

)

$

94,838

 

$

368,499

 

20.0

%

2.87

 

Adjusted as a percent of sales

 

36.6

%

 

21.3

%

 

0.0

%

 

0.4

%

 

15.6

%

 

-0.2

%

 

2.7

%

 

10.6

%
 

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs, net of a $5,300 gain associated with a sale-leaseback transaction related to a FCD facility, and of which $5,234 is non-cash. Also includes the gain on divestiture of our PMV Automation business (PMV) within FCD.

(b) Charges represent costs associated with strategic acquisition and divestiture activities including the acquisitions of Greenray, Trillium Valves and Flowserve Al Mansoori Services Company (FAMCO), and the divestiture of PMV.

(c) Adjustment represents a $27,700 gain recognized in Net earnings from affiliates on the remeasurement of our previously held equity interest in FAMCO.

(d) Charges represent non-cash amortization of intangible assets and step-up in value of acquired inventories.

(e) Charges represent discrete items including $523 of non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our U.S. Qualified pension plan, $286 of transaction costs related to the divestiture of our asbestos-related assets and liabilities and the $7,972 strategic acquisition of intellectual property within FPD.

(f) Charges include $5,576 for non-cash pension settlement accounting losses incurred in conjunction with pension plans in the United States and Canada.

(g) Discrete tax adjustment includes the impact from the release of a valuation allowance in Italy.

(h) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency and includes the foreign exchange loss on the Blue Chip Swap Securities transaction.
 

Nine Months Ended September 30, 2025

Gross

Profit

Selling, General & Administrative

Expense

Operating

Income

Other Income (Expense),

Net

Provision For (Benefit From) Income

Taxes

Net Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

$

1,156,202

 

$

814,237

 

$

357,751

 

$

213,958

 

$

127,067

 

$

375,241

 

 

24.5

%

 

2.85

 

Reported as a percent of sales

 

33.0

%

 

23.2

%

 

10.2

%

 

6.1

%

 

3.6

%

 

10.7

%

Realignment charges (a)

 

40,600

 

 

(1,481

)

 

42,081

 

 

–

 

 

10,096

 

 

31,985

 

 

24.0

%

 

0.24

 

Acquisition related (b)

 

761

 

 

(8,714

)

 

9,475

 

 

–

 

 

2,228

 

 

7,247

 

 

23.5

%

 

0.05

 

Purchase accounting step-up and intangible asset amortization (c)

 

8,742

 

 

(3,900

)

 

12,642

 

 

–

 

 

3,729

 

 

8,913

 

 

29.5

%

 

0.07

 

Discrete items (d)(e)(f)

 

106

 

 

(31,116

)

 

31,222

 

 

4,500

 

 

8,403

 

 

27,319

 

 

23.5

%

 

0.21

 

Merger transaction costs (g)

 

–

 

 

(41,197

)

 

41,197

 

 

–

 

 

9,534

 

 

31,663

 

 

23.1

%

 

0.24

 

Merger termination payment (h)

 

–

 

 

–

 

 

–

 

 

(266,000

)

 

(60,957

)

 

(205,043

)

 

22.9

%

 

(1.56

)

Discrete tax items (i)

 

–

 

 

–

 

 

–

 

 

–

 

 

(24,860

)

 

24,860

 

 

0.0

%

 

0.19

 

Below-the-line foreign exchange impacts (j)

 

–

 

 

–

 

 

–

 

 

36,797

 

 

5,977

 

 

30,820

 

 

16.2

%

 

0.23

 

Adjusted

$

1,206,411

 

$

727,829

 

$

494,368

 

$

(10,745

)

$

81,217

 

$

333,005

 

 

18.9

%

 

2.53

 

Adjusted as a percent of sales

 

34.4

%

 

20.8

%

 

14.1

%

 

-0.3

%

 

2.3

%

 

9.5

%
 

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $5,300 is non-cash.

(b) Charge represents acquisition and integration related costs associated with the MOGAS acquisition.

(c) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

(d) Charge represents non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our U.S. Qualified pension plan.

(e) Charge of $4,500 represents a non-cash pension settlement accounting loss incurred in conjunction with the freeze of our U.S. Qualified pension plan.

(f) Charge of $30,100 represents the Q3 2025 non-cash adjustment to our estimated liability for incurred by not reported asbestos claims based on an annual actuarial study.

(g) Charge represents transaction costs incurred associated with the terminated Chart Industries merger.

(h) Amount represents the Chart Industries merger termination fee paid to Flowserve.

(i) Amount represents a one-time tax charge related to enactment of the One Big Beautiful Bill Act during Q3 2025.

(j) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.
 

SEGMENT INFORMATION

(Unaudited)

Nine Months Ended September 30,

FLOWSERVE PUMPS DIVISION

 

2026

 

 

 

2025

 

(Amounts in millions, except percentages)

 

Bookings

$

2,646.3

 

$

2,394.8

 

Sales

 

2,389.0

 

 

2,402.4

 

Gross profit

 

880.3

 

 

833.5

 

Gross profit margin

 

36.8

%

 

34.7

%

SG&A

 

447.4

 

 

415.1

 

Segment operating income

 

474.9

 

 

434.1

 

Segment operating income as a percentage of sales

 

19.9

%

 

18.1

%
 

Nine Months Ended September 30,

FLOW CONTROL DIVISION

 

2026

 

 

 

2025

 

(Amounts in millions, except percentages)

 

Bookings

$

1,236.0

 

$

1,126.1

 

Sales

 

1,096.5

 

 

1,112.9

 

Gross profit

 

296.4

 

 

322.1

 

Gross profit margin

 

27.0

%

 

28.9

%

SG&A

 

225.7

 

 

206.4

 

Gain on sale of business

 

16.2

 

 

—

 

Segment operating income

 

86.9

 

 

115.7

 

Segment operating income as a percentage of sales

 

7.9

%

 

10.4

%
 

Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)

(Amounts in thousands)
 

Flowserve Pumps Division

Nine Months Ended

September 30, 2026

Gross

Profit

Selling, General & Administrative

Expense

Net earnings from

affiliates

Operating

Income

Nine Months Ended

September 30, 2025

Gross

Profit

Selling, General & Administrative

Expense

Operating

Income

Reported

$

880,323

 

$

447,390

 

$

41,992

 

$

474,925

 

Reported

$

833,467

 

$

415,126

 

$

434,128

 

Reported as a percent of sales

 

36.8

%

 

18.7

%

 

1.8

%

 

19.9

%

Reported as a percent of sales

 

34.7

%

 

17.3

%

 

18.1

%

Realignment charges (a)

 

19,740

 

 

(10,067

)

 

–

 

 

29,807

 

Realignment charges (a)

 

26,495

 

 

(840

)

 

27,335

 

Discrete items (b)(c)

 

48

 

 

(8,063

)

 

–

 

 

8,111

 

Discrete items (b)

 

87

 

 

(287

)

 

374

 

Acquisition and divestiture related (d)(e)

 

–

 

 

(813

)

 

(27,700

)

 

(26,887

)

Adjusted

$

860,049

 

$

413,999

 

$

461,837

 

Amortization of intangible assets (f)

 

5,372

 

 

(5,022

)

 

–

 

 

10,394

 

Adjusted as a percent of sales

 

35.8

%

 

17.2

%

 

19.2

%

Adjusted

$

905,483

 

$

423,425

 

$

14,292

 

$

496,350

 

Adjusted as a percent of sales

 

37.9

%

 

17.7

%

 

0.6

%

 

20.8

%
 

Flow Control Division

Nine Months Ended

September 30, 2026

Gross

Profit

Selling, General & Administrative

Expense

Gain on Sale of

Business

Operating

Income

Nine Months Ended

September 30, 2025

Gross

Profit

Selling, General & Administrative

Expense

Operating

Income

Reported

$

296,399

 

$

225,648

 

$

16,177

 

$

86,928

 

Reported

$

322,131

 

$

206,437

 

$

115,694

 

Reported as a percent of sales

 

27.0

%

 

20.6

%

 

1.5

%

 

7.9

%

Reported as a percent of sales

 

28.9

%

 

18.5

%

 

10.4

%

Realignment charges (a)

 

55,712

 

 

(476

)

 

(16,177

)

 

40,011

 

Realignment charges (a)

 

14,704

 

 

1,230

 

 

13,474

 

Discrete items (b)

 

10

 

 

(75

)

 

–

 

 

85

 

Acquisition related (c)

 

761

 

 

(8,714

)

 

9,475

 

Acquisition and divestiture related (d)

 

–

 

 

(19,121

)

 

–

 

 

19,121

 

Purchase accounting step-up and intangible asset amortization (d)

 

8,742

 

 

(3,900

)

 

12,642

 

Amortization of intangible assets (f)

 

11,082

 

 

(7,091

)

 

–

 

 

18,173

 

Discrete items (b)

 

14

 

 

(208

)

 

222

 

Adjusted

$

363,203

 

$

198,885

 

$

–

 

$

164,318

 

Adjusted

$

346,352

 

$

194,845

 

$

151,507

 

Adjusted as a percent of sales

 

33.1

%

 

18.1

%

 

0.0

%

 

15.0

%

Adjusted as a percent of sales

 

31.1

%

 

17.5

%

 

13.6

%
 
 

Note: Amounts may not calculate due to rounding

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs, net of a $5,300 gain associated with a sale-leaseback transaction related to a FCD facility, and of which $5,234 is non-cash. Also includes the gain on divestiture of our PMV Automation business (PMV) within FCD.

(a) Charges represent realignment costs incurred as a result of realignment programs of which $5,300 is non-cash.

(b) Charges represent $229 of non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our U.S. Qualified pension plan.

(b) Charge represents non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our U.S. Qualified pension plan.

(c) Charge represents the $7,967 strategic acquisition of intellectual property within FPD.

(d) Charges represent costs associated with strategic acquisition and divestiture activities including the acquisitions of Greenray, Trillium Valves and Flowserve Al Mansoori Services Company (FAMCO), and the divestiture of PMV.

(c) Charge represents acquisition and integration-related costs associated with the MOGAS acquisition.

(e) Adjustment represents a $27,700 gain recognized in Net earnings from affiliates on the remeasurement of our previously held equity interest in FAMCO.

(d) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

(f) Charges represent non-cash amortization of intangible assets and step-up in value of acquired inventories.
 

Segment Results

(Unaudited)
 

Flowserve Pumps Division
 

(dollars in millions)

Q3 2026

Q3 2025

Change

 

YTD 2026

YTD 2025

Change

Organic Bookings

 

 

10.9%

 

 

 

6.8%

Acquisitions / Divestitures Impact

 

 

3.9%

 

 

 

1.8%

FX Impact (a)

 

 

(0.1%)

 

 

 

1.9%

Total Bookings (b)

$940

$819

14.7%

 

$2,646

$2,395

10.5%

 

 

 

 

 

 

 

Organic Sales

 

 

(0.9%)

 

 

 

(3.6%)

Acquisitions / Divestitures Impact

 

 

4.7%

 

 

 

1.2%

FX Impact (a)

 

 

0.0%

 

 

 

1.8%

Reported Sales (b)

$830

$800

3.8%

 

$2,389

$2,402

(0.6%)

 

 

 

 

 

 

 

Gross Margin

37.8%

33.2%

460 bps

 

36.8%

34.7%

210 bps

Adjusted Gross Margin (c)

38.1%

35.9%

220 bps

 

37.9%

35.8%

210 bps

Operating Margin

20.2%

16.9%

330 bps

 

19.9%

18.1%

180 bps

Adjusted Operating Margin (d)

21.8%

19.6%

220 bps

 

20.8%

19.2%

160 bps

Backlog (b)

$2,377

$2,007

18.5%

 

$2,377

$2,007

18.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flow Control Division

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

Q3 2026

Q3 2025

Change

 

YTD 2026

YTD 2025

Change

Organic Bookings

 

 

0.8%

 

 

 

4.8%

Acquisitions / Divestitures Impact

 

 

12.2%

 

 

 

4.3%

FX Impact (a)

 

 

(0.4%)

 

 

 

0.7%

Total Bookings (b)

$446

$396

12.6%

 

$1,236

$1,126

9.8%

 

 

 

 

 

 

 

Organic Sales

 

 

(1.3%)

 

 

 

(5.8%)

Acquisitions / Divestitures Impact

 

 

10.8%

 

 

 

3.7%

FX Impact (a)

 

 

(0.4%)

 

 

 

0.6%

Reported Sales (b)

$412

$377

9.1%

 

$1,096

$1,113

(1.5%)

 

 

 

 

 

 

 

Gross Margin

24.0%

30.3%

(630 bps)

 

27.0%

28.9%

(190 bps)

Adjusted Gross Margin (c)

33.2%

32.1%

110 bps

 

33.1%

31.1%

200 bps

Operating Margin

8.3%

12.3%

(400 bps)

 

7.9%

10.4%

(250 bps)

Adjusted Operating Margin (d)

16.3%

16.3%

–

 

15.0%

13.6%

140 bps

Backlog (b)

$1,105

$896

23.2%

 

$1,105

$896

23.2%
 

(a) Constant foreign exchange (FX) represents the year-over-year variance assuming Q3 and YTD 2026 results at Q3 and YTD 2025 FX rates

(b) Bookings, sales, and backlog do not include interdivision eliminations

(c) Adjusted gross margin is a non‑GAAP financial measure. Adjusted gross margin is calculated by dividing adjusted gross profit by sales. Adjusted gross profit is derived by excluding realignment charges and other specific discrete items. See the Segment Reconciliation of Non‑GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited)

(d) Adjusted operating margin excludes realignment charges and other specific discrete items
 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

September 30,

December 31,

(Amounts in thousands, except par value)

 

2026

 

 

 

2025

 

 

 

ASSETS

Current assets:

Cash and cash equivalents

$

742,148

 

$

760,183

 

Accounts receivable, net of allowance for expected credit losses of $92,193 and $83,094, respectively

 

1,084,291

 

 

1,029,095

 

Contract assets, net of allowance for expected credit losses of $6,124 and $6,028, respectively

 

330,293

 

 

322,472

 

Inventories

 

844,122

 

 

789,898

 

Prepaid expenses and other

 

127,820

 

 

141,237

 

Total current assets

 

3,128,674

 

 

3,042,885

 

Property, plant, and equipment, net of accumulated depreciation of $1,242,388 and $1,224,912, respectively

 

574,771

 

 

566,751

 

Operating lease right-of-use asset, net

 

189,000

 

 

166,031

 

Goodwill

 

1,697,977

 

 

1,391,988

 

Deferred taxes

 

181,605

 

 

156,250

 

Other intangible assets, net

 

369,747

 

 

198,475

 

Other assets, net of allowance for expected credit losses of $66,210 and $66,047, respectively

 

205,227

 

 

185,820

 

Total assets

$

6,347,001

 

$

5,708,200

 

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

556,532

 

$

554,243

 

Accrued liabilities

 

556,768

 

 

587,475

 

Contract liabilities

 

329,380

 

 

274,669

 

Debt due within one year

 

9,895

 

 

49,868

 

Operating lease liabilities

 

38,093

 

 

35,630

 

Total current liabilities

 

1,490,668

 

 

1,501,885

 

Long-term debt due after one year

 

2,046,807

 

 

1,525,210

 

Operating lease liabilities

 

163,348

 

 

149,565

 

Retirement obligations and other liabilities

 

262,767

 

 

277,216

 

Contingencies (See Note 12)

Shareholders’ equity:

Preferred shares, $1.00 par value

 

—

 

 

—

 

Shares authorized — 1,000, no shares issued

Common shares, $1.25 par value

 

220,991

 

 

220,991

 

Shares authorized — 305,000

Shares issued — 176,793 and 176,793, respectively

Capital in excess of par value

 

504,791

 

 

508,890

 

Retained earnings

 

4,460,774

 

 

4,261,977

 

Treasury shares, at cost — 50,173 and 49,763 shares, respectively

 

(2,290,306

)

 

(2,231,685

)

Deferred compensation obligation

 

5,922

 

 

6,629

 

Accumulated other comprehensive loss

 

(590,627

)

 

(575,405

)

Total Flowserve Corporation shareholders’ equity

 

2,311,545

 

 

2,191,397

 

Noncontrolling interests

 

71,866

 

 

62,927

 

Total equity

 

2,383,411

 

 

2,254,324

 

Total liabilities and equity

$

6,347,001

 

$

5,708,200

 
 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in thousands)

Nine Months Ended September 30,

2026

 

 

2025

 

Cash flows — Operating activities:

 

 

Net earnings, including noncontrolling interests

295,007

 

391,539

 

Adjustments to reconcile net earnings to net cash provided by operating activities

Depreciation

61,537

 

58,685

 

Amortization of intangible and other assets

24,750

 

14,009

 

(Gain) on remeasurement of previously held equity interest

(27,700

)

—

 

(Gain) on sale of business

(16,177

)

—

 

Stock-based compensation

30,469

 

25,787

 

Loss on Blue Chip Swap Securities

3,146

 

—

 

Foreign currency, asset write downs and other non-cash adjustments

(5,446

)

(3,326

)

Change in assets and liabilities:

Accounts receivable, net

(28,684

)

(26,081

)

Inventories

(7,421

)

26,727

 

Contract assets, net

(8,198

)

(35,157

)

Prepaid expenses and other assets, net

15,698

 

(7,362

)

Accounts payable

(34,192

)

31,158

 

Contract liabilities

18,750

 

(17,857

)

Accrued liabilities

(60,582

)

(30,488

)

Retirement obligations and other liabilities

(5,779

)

31,900

 

Net deferred taxes

(24,897

)

46,524

 

Net cash flows provided by operating activities

230,281

 

506,058

 

Cash flows — Investing activities:

 

 

Capital expenditures

(51,056

)

(45,534

)

Payments for acquisitions, net of cash acquired

(517,735

)

—

 

Proceeds from disposal of assets

9,783

 

1,067

 

Purchases of Blue Chip Swap Securities

(52,939

)

—

 

Proceeds from Sales of Blue Chip Swap Securities

49,793

 

—

 

Proceeds from divestiture of business, net of cash divested

34,567

 

—

 

Affiliate investment activity

(3,960

)

—

 

Net cash flows (used) by investing activities

(531,547

)

(44,467

)

Cash flows — Financing activities:

 

 

Proceeds from issuance of senior notes, net of discount

499,320

 

—

 

Payments on term loan

(77,875

)

(28,125

)

Proceeds from long-term debt

74,750

 

—

 

Payment of deferred loan costs

(4,893

)

—

 

Proceeds under revolving credit facility

150,000

 

50,000

 

Payments under revolving credit facility

(160,000

)

(50,000

)

Proceeds under other financing arrangements

1,071

 

10,562

 

Payments under other financing arrangements

(8,058

)

(3,310

)

Payments related to tax withholding for stock-based compensation

(23,339

)

(11,584

)

Repurchases of common shares

(75,000

)

(197,920

)

Payments of dividends

(82,881

)

(82,671

)

Contingent consideration payment related to acquired business

—

 

(15,000

)

Other

(2,123

)

(2,899

)

Net cash flows (used) provided by financing activities

290,972

 

(330,947

)

Effect of exchange rate changes on cash and cash equivalents

(7,741

)

27,762

 

Net change in cash and cash equivalents

(18,035

)

158,406

 

Cash and cash equivalents at beginning of period

760,183

 

675,441

 

Cash and cash equivalents at end of period

$742,148

 

$833,847

 

Non-Cash Investing and Financing Activities:

 

 

Liabilities incurred related to acquired business, but not paid

$ 1,505

 

—

 

About Flowserve:

Flowserve Corporation is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 50 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 website 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “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: economic, political and other risks associated with our international operations, including military actions, trade embargoes, blockades or other closures of major trade lanes, epidemics or pandemics and changes to tariffs or trade agreements that could affect customer markets, particularly North African, Latin American, Asian and 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; global supply chain disruptions and the current inflationary environment could adversely affect the efficiency of our manufacturing and increase the cost of providing our products to customers; 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 global economic conditions 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; if we are not able to successfully execute and realize the expected financial benefits from any restructuring and realignment initiatives, our business could be adversely affected; the substantial dependence of our sales on the success of the energy, chemical, power generation and general industries; the adverse impact of volatile raw materials prices on our products and operating margins; the impact of public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, on our business and operations; increased aging and slower collection of receivables, particularly in Latin America and other emerging markets; potential adverse effects resulting from the implementation of new tariffs and related retaliatory actions and changes to or uncertainties related to tariffs and trade agreements; our exposure to fluctuations in foreign currency exchange rates, including in hyperinflationary countries such as Argentina; potential adverse consequences resulting from litigation to which we are a party; expectations regarding acquisitions and the integration of acquired businesses; 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; if we are not able to maintain our competitive position by successfully developing and introducing new products and integrating new technologies, including artificial intelligence and machine learning; 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 United States, as well as in foreign countries; obligations under our defined benefit pension plans; our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud; the recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results; our information technology infrastructure could be subject to service interruptions, data corruption, cyber-based attacks or network security breaches, which could disrupt our business operations and result in the loss of critical and confidential information; ineffective internal controls could impact the accuracy and timely reporting of our business and financial results; 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.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company’s performance. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

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