The following is a summary of the Flowserve Corporation (FLS) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Flowserve Corporation reported a robust annual revenue growth of nearly 20% and an increase in full-year earnings per share (EPS) by 90% due to improved adjusted gross and operating margins.

• The company's Q4 sales led to their highest quarterly sales level since 2015, recording a 12% Y-o-Y increase.

• Q4 operating cash flow stood at $195 million, marking a significant improvement of $125 million.

• Adjusted gross margins rose by 100 basis points to 29.8% in Q4, compared to the same quarter last year.

• Bookings for the year amounted to $4.25 billion, pushing the year-end backlog to $2.7 billion.

• Full-year 2023 EPS reached $2.10, while Q4 EPS was $0.68.

Business Progress:

• Flowserve's growth was fueled by increased backlog conversion and significant operational progress.

• Despite the Full-year 2023 book-to-bill ratio being below 1.0x, the backlog for 2024 remains healthy at $2.7 billion.

• The company shifted focus on its 3D strategy: Diversify, Decarbonize, Digitize, which contributed to bookings growth in 2023 and is expected to drive further growth.

• The company also continued the development of their RedRaven technology, now employed at over 80 customer locations.

• Ambitious targets for 2024 have been set by Flowserve including 4%-6% revenue growth, more than 100 basis points adjusted operating margin improvement, and around 20% adjusted EPS growth.

• Flowserve announced a 5% increase to dividend to $0.21 per share and replenished their authorized share repurchase capacity to $300 million.

• The company also plans to invest in M&A opportunities and anticipate a full year's revenue growth of 4% to 6% for 2024.

More details: Flowserve IR

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