FLS - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Flowserve Corporation Q4 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session [Operator Instructions]. Please be advised, that today's conference is being recorded. [Operator Instructions] I'd now like to hand the conference to your speaker today, Jay Roueche, Vice President, Treasurer and Investor Relations. sir. ahead, go Please

John Roueche

and conference everyone. Flowserve's call year and Joelle, participating fourth appreciate in full results. financial our today XXXX good you, We morning, you quarter Thank to discuss

Executive morning call the Rowe, and Schwetz, Financial and with Vice this Officer. Officer; On are Amy and me Flowserve's Scott President President Chief Senior Chief

Following comments, will the open we prepared our call questions. for

you our These statements are to are February which other management and are to and XX, accessible like call this based comments. available of for available. reported earnings of included the earnings this at and the prepared and release many measures beyond forward-looking an will and on the be risks forecasts, webcast, materials Investor as non-GAAP reconciliation the as involve event to our President audio uncertainties, well that turn both and our being to would in over section. his disclosures information in of flowserve.com expectations I as harbor Please our Rowe, will, non-GAAP which is Chief company's reminder, XXXX, control. note and are a measures press they and statements. As Relations encourage Executive also include now Flowserve's call results, and fully of safe our review do replay Officer, on Scott our contain presentation website to We

Scott Rowe

I continued serve all by this hard Jay, Flowserve and quarter only keeping provide during throughout and associates environment, safety strong unprecedented the operationally, core people the running. especially not XXXX essential that in you, thanking that Thank against protocols. year, morning, protecting Flowserve, am performance value and finish COVID-XX. Thank them today's we customers and challenges proud and keep a earnings start achieved services to in XXXX the our for the work time. but frontline fourth world to also our control to workers associates, needed want Great. record in good continue [indiscernible] means had full including our the to Despite equipment their highlight our I of a everyone. the We the dedication for At you is and call. safe joining to spread COVID-related our

long during Additionally, to challenging the year. Flowserve them I of that customers. remember customers, through for solidifies step there tested I our my a relationships. want They crises a each our term thank working alongside career being truly way very

the us priorities financial this through performance. the our strong we through we From delivering on significant the will centered our industry and of managing returns. cash superior improving detrimental beginning on our flow look believe relationships capture conversion, investment free position pandemic-driven return invested environment, opportunities of future, the As capital well cycle when to pace our margin

of the remainder successfully Flowserve unprecedented leadership support the our our enabled environment that to The prepared associates think in we comments, period better I of current X.X, our focus hear past. progress During team the and this company during controlled forward. now of our market committed than what a could has in manage you'll the we

we the from margin Flowserve generate $XXX continue future. excess million potential free XXXX flow. for to over in maximized cost We taking our allowed structure million $XXX of efforts of position cash Our us to in our out by and

cost results are fourth financials, mid actions in drove detail, quarter dedicated strong. Amy me fourth for which took quarter. Turning proud effort The of the to and say in we the in detrimental our decisive margins. our XX% will quarter first now our that finish XXXX associate's our let we're evident year financials XXXX cover but structural fourth

we create pandemic, an that that impact markets. to the desired that quarters key a the a adjusted reprioritized could the and As Flowserve COVID-XX quickly recall, initiatives SG&A to the react in you final XXXX, end may in operating In strategy our downturn levels our of of had of model to was $XXX timing outcome face each transformation certainly We're of three the X.X million. program. the pleased cost to aspects had accelerate below our

improvement As cash are improvement cycles. $XX financial to further prior capital with a relation the of detrimental capital reduction to flow in primary net overall improve drive million of flow. cash the confident of out of strong quick process driven fourth We business actions, working meaningful progress, working this our year performance capital quarter, we delivered we conversions, both result to quarter key and generated and versus adjusted and also significant improvements Shifting made remain the in right path margin sequential which to impressive income. and our working XXX% flow the have on cash operating which our full that an us

the or a for of return levels, increases of foundational level another quarterly bookings growth into that starting quarter isn’t a at pre-COVID confidence near should not there a were million While X.X% bookings $XXX that down XXXX. and to we're sequential that growth our our point step third represent

for $XXX year Now were bookings prior remained the X% XX.X% sequentially. versus in year. about million up bookings XX.X% relatively were and Original down the quarter versus sequentially aftermarket down and to stable down X.X% $XXX equipment activity consolidated with prior million

growth in Comparatively of XXXX at project of $XXX well awards award number and received which Looking as activity greater Asia a in North largest bookings you project fourth in sized may $XX added gas the exceeded as America Europe, in quarter quarter's Fourth million. fourth included were expect distributors this further end the is quarter awards by across we backlog a quarters, spend XXXX continuing may current confident absence end as our markets are as diverse only led the bookings. of we're of of a $XX the quarter operators the environment. smaller than markets, manage a smaller inventory as Pacific less which impacted that other million oil total. medium detail, the normal activity. the to and level strong project When increases bookings preserve awards market together see was this small project represented in XXXX of we $X.X and optimistic highlights to challenges the million recall, billion our return MRO it and solid of that and $XX bookings we and well cash in foundational for be rather increasingly with I'll bookings consistent to by in than With remaining yearend levels cancellations project at we're budgets. million by aftermarket year and to modest to MRO that their note our XXXX last remained saw and spending levels only three also

equipment, decreased bookings year-over-year Let only while we bookings our decline now turn decreased continue the backlog. XX% bookings at execute bookings was on year-over-year. and to Fourth while sales aftermarket to me X% was XX% XX% level and industries modestly primarily fourth which and decline quarter. performance as driven in The down a were oil XX%. of by were it's segment original gas respectively down XX% FPD's better strong quarter general

point basis cost progressive perspective, points percentage industry of actions and down bookings FTD primary XXX XX% margin operating segments markets down respectively. Oil declines by bookings decline XX% million adjusted XXX margin mitigated XX roughly XX.X%. while awards and SG&A chemical basis down in water as drivers XXX significantly margin grew XX% including were awards resulting adjusted grew project were operating FPD respectively, FTD over From versus two power and while for a an respectively. million. adjusted sales resulting X%. and declined a in year, to basis an adjusted FPD gas $X growth chemical as of challenges as General XX.X%. it's modest and state points point sales were XX% gas roughly gross decline adjusted FPD its project and to totaling points, margin of contributed by markets by across bookings sales SG&A a continue prior at and operating XX.X% in XXX the percentage $XX and basis distribution XX% X% both XXX adjusted basis channel. of our bookings a While reduced power

Turning declines XXXX of at impacted continue that the be gas environment related to presented primarily fourth which in declined time, $XXX project encouraging quarter now Fourth a bookings figure showed due quarter several markets, challenging strong FPD's to end Asia to markets over our to COVID-related but included XX%. awards. demand. million most and awards Again improvement upgrade Fuel's sequential larger activity energy our of projects oil year-over-year contributing served by in compared Clean XX% largest exposure

and $XX largest award our oil when awards, million. it quarter and with project This million combined was $XX project totaled less than smaller gas

XXXX in a on ago. patterns, despite gas actually oil bookings and it For price significant the commodity impact full where were crude year the year, volatility customer the in pricing was XX% it down above had related spending today's is oil and

Assuming We levels, QX year to a fourth build it any chemical MRO us. our X% be the with XX% project material customers awards, should chemical worst driven quarter going remain specialty were behind lowest growth prior chemical to Strong and by chemical of spent. not benefitted Sequentially, remains XXXX. bookings as may but these a industry bookings compare increased bookings did regard confidence over at level increased optimistic markets. forward include that help it of from favorable the

reasonably strong. and few in with up awards million quarter markets. gas pent has East. chemical to more in project power, and year-to-date Making of market plant grow a $XX bookings and one down challenged while our chemical the petrochemical solar X As concentrated Fourth delays for the demand XXXX quarter The and demonstrated X% remains prior oil while continues liquid are $XX similar specialty looking Asia small project than these are Middle included power stability cycles, % quarter it markets to included and totaling respectively. fourth million, to

and percentage electricity energy a there as power supply. increases total need more the a for progresses source, will transition As energy be level of

opportunities general significantly to and and varies While the North included grid, end a countries impacted Flowserve amount market for The choice been believe add early capacity since which significant of including watts decline presenting industries other increase has gig globally. America XXXX, to few in distributors severely the market, activity. need through the a good MRO regions, and between will old we opportunities

The that of of down material no QX product quarter X%. full XX%, XXXX phenomenon we year extremely for with has million resiliency included have QX signs mining for past distributor down bookings The upside just there one XXXX. the $X while at were at in shown is that awards project longer. While bookings some are the levels. the two low to Inventories destocking years continue distributors it not should seen much

win to and to believe begin to orders. to can distributors We we then this if. moderate and process of We not a a see is only first stocking return expect just-in-time matter ordering large

it's our wallet experience project to bullish and Finally, representing We have QX awards market and $X while American or East municipal desalination million totaling in identified North Both end we're will our investment forward. on markets, and smallest fairly the in expect quarter XX%. focus of areas $XX our the Middle believe smallest area water we million moving bookings are our award. where continued forward. the we knowledge going project a increased projects, it opportunities, our increase presence water of included

one largest on the and to our from were single down oil both and both the decline The down Middle our full-year XXXX best markets delayed digits roughly America X% for the and XXXX crises regional full-year. most bookings East, region and Asia our full by with a year. the spending. perhaps mid Latin COVID strongest for in QX impacted respectively Pacific market Turning crude was and quarter saw perspective, as relative bookings bookings just performing our XX% the limited from basis North a America, year's basal XX% and the XX% its performing customer down

down year respectively. were full and XX% XX% booking QX and Finally in Europe

levels processes We to similar expect transportation investment the levels. energy mobility as to all return increased vaccine to to growth continue to closer move and to and regions demand rollout experience pre-pandemic Asia's begin infrastructure as recovery

financial our XXXX call and before Let to outlook to cover for turn beyond. I the now detail provide our Amy in greater me results over to return

Amy Schwetz

environment. Thanks morning, good what the In Scott we continues delivered resilient performance challenging operating fourth to and everyone. quarter in be

$X.XX per quarter $XXX of seasonality. was increased while our earnings FPD were our bringing sales included impacts, adjusted adjusted equipment X.X% for a currency of quarter strong offset comprised the normal adjusted X.X% quarter Fourth and X% and The EPS a items Fourth and primarily prior were of items. $X.XX liability which $X.XX line by benefit of of and original X.X% flat expenses quarter $X.XX relatively FPD's million declines transformation down XX% primarily full-year to to $X.XX but Fourth net EPS entering realignment Aftermarket on related and a driven XXXX. execution was revenues reported $X.XX. the decreased tax the year, X% discrete by foreign in sales $X.XX partially were of decreased X.X% Our a tax reduction decline items reported reflecting versus OE share by reflecting below eliminating were revenues solid of respectively. FPD backlog FTD sequentially including from

For offset full X.X% increase in which with was FTD's decreased sales X.X% again due decreased billion decline. year was XXXX, X.X% primarily that strong OE XX% $X.X aftermarket, range. as revenues to approximately just both XX% FPD down segments by to

FPD points XXX fourth FTD gross at XXX decreased margins; margin points adjusted points respectively. quarter basis Turning of XX.X% basis XXX and basis now to declines including and to

COVID-related we ongoing pandemic. productivity and impact our cost to While limit does to associated decline to reflect manage and the on incurred operations, the disruptions margin the continue due the in

increased Additionally, certain impacted facilities OE in and work. were we experienced also by margin XXX towards point shift under-absorption mix lower basis FPD's

full a both with the basis, points. year decreased down XX.X% fourth segments margins basis to and year, points XX%. reported margins On basis full adjusted both quarter the decreased gross For basis points XXX to XXX gross XXX

disruption, versus to level. $XX increased fourth and million full current to adjusted structural better year volume business was to to headwinds Fourth quarter $XX with cost of COVID support respectively quarter flat and $X were align our million million SG&A prior million and by absorption impacted addition effort realignment the and $XXX decreased In reduction the spending year and approximately mix sequentially.

As included cost million SG&A a took in percent a $XX the On the and your with or quarter's adjusted full XX.X% On $X we $XX offsetting fourth SG&A actions the more SG&A XX to fourth last million, sales, reported declined million mid-XXXX. which Reported adjusted timely adjusted than points and $XX expense declined basis a year items. points to points tight of controls performance million cost continued a adjusted quarter SG&A XXX sequentially items. increase basis basis reflected XXX million XX.X% decreased versus decline $XX in cost basis, basis sales. in of declined XXXX actions in declined our our

our decremental revenue prior of the adjusted margin XX%. fourth decreased operating to actions XX.X% quarter decisive the adjusted Our an basis cost versus margin year a of delivered limited XX and modest impact as approximately million decline points $XX

decline basis while FTD As actions driven FTD a we XXX operating XXXX, margin realignment increased cost points basis $XX operating of X.X% was fourth XX million. to of X.X%, to operating year-over-year by XXX margin quarter FTD's adjusted improvement basis on noted to XX.X% year-over-year. margin points we primarily spend of delivered, sequential reported Reported and all decreased in for call, decreased execution, operating XXX margin approximately our third to points drove expected they improved quarter mix benefit, see QX sequential XX.X%. adjusted and a improvement from points with

due across Compared XX% roughly credits XXXX geographic it two guidance worked but the and initial back, reform our Our tax slightly thirds was with range, isn't all our over laws. we international to strategically our the available portfolio. main years Certainly rate progress. adjusted helped fully the few business rate primarily was adjusted certain below our reason annual for to reduce tax in of XX%, tax a while realization tax to US modestly with complying relevant of our have market rate the XXXX, the of mix tax earnings when for

pursuing mind leaders making full when and income tax of our We business theme keeping strategies efficient in progress of pleased are statement business decisions. in the tax with the

done laws, major continue our time. work in any work barring to over to expect rate changes and Our isn’t the we tax tax lower effective

full performance quarter balance and to drove Turning flow cash This operations fourth which generated and flow capital. cash produced cash over free our year billion. liquidity, $X.X million from a strong nearly a $XXX million included our of million, flow working of cash $XXX from to $XXX cash seasonally of

adjusted approximately flow free of earnings. XXX% and Our approximately year our our XXX% full represented of earnings conversions cash reported

over in are and capital with we working sequential shipping disruptions. experienced drive quarter strong inventory With at contract QX further the XX.X%, by continue $XX and to facilities due We OE percent in opportunities COVID-related improvement However, basis the of a That and intense are a that our of liabilities primarily to by XXX million primary we quarter. as sales we strong there on still our third are shipments, larger versus inventory and improvement. pleased still to fourth elevated XXXX backlog said, of significant points reduced built including inventory as management manufacturing being deliver delays few assets levels

our disruptions pleased and Looking flat to given our able accounts we measures relatively to to be customer's maintain and to prior are turns, at receivable year DSO processes. inventory COVID-driven the our

We DSO tool Inventory cash, transformation-driven integrated and quarter collections continue expect execution to utilization as working will resources. improved in through chain into pursuit our built planning centralize global management and capital our related our and below driven supply driving we consolidate systems. be of continue and by increased reductions initiative. and the Heading XXXX, momentum the further transformation will business terms related XX management inventory and function operational of we we ordered to fourth days

conversion again a we result, currently that XXXX. cash free exceed As flow XXX% expect we in will

the our facility capacity $XXX liquidity combined over position, cash increase to credit presenting million yearend billion available XXXX quarter. over our totaled Turning $X.X and third

million million approximately about XXXX. down almost $XX since billion $X.XX position debt $XXX net in year-end year-over-year a and Our of

since level yearend -- lowest XXXX. net fact our lowest In debt its reached level our

the we notes outstanding XXXX. our and advance that million end call the $XXX euro At week million may in notes in XX-year XXXX. we of for upcoming recall, we of of of maturities first also you our with announced XXXX senior completion the As the tendered before date time $XXX mature $XXX to offering, issued remaining these plan of million last the of Last the fall in securities quarter.

in cash euro $XX the to expenditures in shareholders $XXX structural addition other tendered, significant our the program. actions repurchases, cost our and to usage transformation XXXX as dividends in In of capital million share out through as other return notes previously and and well of funding the included realignment million

we managing the provided outlook, business returns The by growth we nature decremental Nonetheless, buffered now built us in return recycle ranges the downturned business of a take start as to a we through the margins today at actions incremental our cycle late previously and stronger date. Turning our margin our reflect later management the of the returns are on cycle The and enhanced are where profile. positioning impact better XXXX bookings through declines our cash with backlog. position capital. invested with for Flowserve conversion, of we will at

For the about special $XX adjusted full-year expenses including $X.XX as the on decrease Based XXXX, at adjusted acquisitions, during items, improving environment. EPS we on realignment current Flowserve our million exchange range the EPS range reform revenue range are quality our to currency such our on in which earnings. our reported may as EPS of year the $X.XX to focus expected initiatives, tax models of line of the rate and remains XX% potential non-realignment spending, retirement discrete as a divestitures, midpoint X% of etcetera. the FX other is of excludes average expected targeting the as premium, approximately occur The debt modest committed below effects tailwind foreign of impact target X% adjusted to well EPS

condition. operations of the and embedded into expenses the adjusted X.X to in team. three and reported we of in our prices, bookings assume range our adjusted largely adjusted on current included going Both our will forward. methodology the of the XXXX move continuation also level rate program In now the to current market remaining related functional EPS after that target year-end our and reduce efforts, XXXX by backlog, $X.XX. the commodity and confident be approximately foreign such, The based transformation in are impacts Flowserve As XXXX, change and of years anticipated expectations EPS EPS currency both the transformation expected are elements reported is

to and XX% of net expect expense the adjusted XX%. range interest million in million tax and $XX $XX rate between We

of In prior expect and know, terms balanced more to XXXX we you those years. as in that although cash somewhat normally generation many of in in than continue both second weighted results are facing, half

through Finally, shareholders outstanding million major year planned tax euro $XXX cash share repurchases. this through include retiring the usages return and expectations remaining potential over and notes dividends to

our aspects We of expect growth as the return to also we business Flowserve intend invest to in X.X to program.

in to expenditures and improvement. capital range, million $XX enterprise-wide ERP $XX platforms further expect for our spending We the systems transformation-driven our IT million to includes consolidate which support productivity

Scott. we Let call now the return to over

Scott Rowe

Amy. Thank you, Great.

the our wrap with organization our some our the institutionalizing significant progress, targets and transformations XXXX, color me outlook on XXXX. in end playbook our Let up to and long into we functions. our comments for made X.X term disruption additional progress and Flowserve transformation processes deep Despite on markets

make to business striving part a everyday of are processes. We our this

reflected progress to in better building XXXX results markets. a our weather end business cycles our model the Our toward

In and transformation to gaining end involves and experience, intend dollars. initiative A component products growth an services staying led growth We including investment of XXXX embedded diversification, Our initiatives. phases our while goal focus that improvement program optimization the development the substantially innovation. productivity by to ensure run and process is increased our we excellence the with to discipline initiatives and energy of market the participation generating customer innovative transition how XXXX, our original are remain of the complete business. in we'll transformation, but the operational we the and end return in complete on drive market in the growth consistent that key increased transformation to focus

and and services. team in new significant progress Our innovative marketing technology made developing XXXX products

our innovation were technology design launches year, I During can new commercial three updates the our pipeline product to product that about six to portfolio am products, we that upgrades. remaining Flowserve. completed value launches bring and process the or excited extensions, opportunities the and including products XX have and future

end e-commerce and with technology has diversification, and and will prove geographic technical XXX challenges years. Flowserve digitalization efforts our Our emissions. efficiency through accelerate full digitalization control for carbon IoT solving and better repurpose market been and to over capture

in help to performance, and cost, their existing continuing and customer products committed as our participate come. end that emerge products, to our to solutions. be installed well Flow customers their I’m efficiency and added meaningful our We're support Our services technology will our base improve reduce that for way as expect markets for our people, a them value to unplanned new confident Control help we’ll and us continue prevent improve to evolve as ensuring and interruptions. decades

an water year pumps, equipment power, third of flood seals our capturing concentrated vaccine to most and suite hydrogen XXXX, importantly As and provided technology, valves example, the COVID-XX and this COVID development in processing, a control, solar to distribution and for production, helping carbon we vaccine. alone, services of desalination, Flowserve provided accelerate

customers values. the We're and It and operations. partner reduce of ability a for has the historically, Control Flow avoid we're be expertise RedRaven, in our to the as our And and will is Flowserve’s development, pumps, testing, We're RedRaven sites. cost diagnostics. improve solution follows in meaningful the is great Flowserve’s will part RedRaven we’re to stages objective embedded Control been including future. quarter years Flowserve into to with remain that the the nearly our continue to last financial productivity, to or launch a feedback about and of trusted our the Flow complete long ultimate pilot rollout. stream, following XXXX, commitment customers that partners, downtime, we to carbon of to the uniquely progress spoke reduce with ahead years Global excited expand and considering I to suite ESG. more of valves and mission IoT of offering. our help grows. in overall our XXXX RedRaven provide still in current start through environmental, including extensive small, proprietary from our our do positioned all while same. off into customers processes, revenue the component I’m proud early social testing contribution this These services develop from provides adoption projects, customer development, in the aftermarket innovative analytics combined in our emissions, commercialize of extensive gained optimize expect years from Our pilot issues a made the customers five ultimately to knowledge to RedRaven very and unplanned governance to solutions and for while we to vital simply seals, provide easily subjects continuing great offering also a committing

achieved also We record diversify directors. and board our and of safety performance continue refresh to

to time, that focus this pandemic I the this Unfortunately, on will in we driven interruptions with we on or endeavor progress. at associated Flowserve XXXX objectives forward, year forefront financial like and we’re Last very As Program. the pace timeline. ESG progress. and of continue being the would to Transformation business initiatives meet much original exceed our of and targets has time now to the stalled spend launch some identified on our long-term downturn

centered were these early three a last XXX% we've achieving XXXX. Nevertheless, cash I’m flow the may of with targets flow, underlying adjusted the free business net environment. in assumptions environment program, made you everyone cash long-term around income than more are pleased target the margins, identify driven COVID consistent over and our ROIC operating of business outlined but growth, the recall, The as improvement. through progress years consistent a can challenges the relate extremely anything including free of As XXXX targets that

future. management that you’ll the continue I’m have capital in to and and inventory made confident in changes to see working We receivables systemic improvements

and capital impact profile. way above to our we're Additionally, the keep the our able in of decrementals to manage minimize and a ROIC cost sheet return margin such our balance well market on

confident to target, XXXX we environment. as to delivering to remain the original the and same expect aspirations we teens of move growth remain continued each our outlined. much mid actions way our will achievable to our long-term To the world to as reach progress, found returns the upper taken in I that returns targets summarize, as is go as transformation range our to we While goals stronger our within previously of serve a with these catalyst those assumptions.

conditions With to the timeline, achieve we at it the we our exists to achievement. continued has economic and commit credibly time had that uncertainty Once actions on and to show and this necessary targets. cannot will our the these end-markets, impact associated and now a market new COVID plans our date due permit,

our her using XXXX with The XXXX growth close short in essentially only digit XXXX. cycle market in our later low comments. aftermarket in me conditions target Let from current guidance ranges Amy with outlook. MRO year's single business bookings official were provided expected this modest derived

many Flowserve backlog projects, impact has we business with to the as our Given lead more the their valve customers uncertainty is had XXXX the our unwilling business. others entering in clear their been of traditionally didn't projects. it some pump pandemic operations their cycle COVID the timing customers of critical the results money considering year. a to of time the late much subsides, financial large in as our point keep given the that as marketplace, and It projects predict strong spending inflection and running advance were while will our be

three the in will quarters have declines our in last more the backlog double-digit our in addition to the reduction XXXX. over starting bookings impact However, a pronounced year-over-year XX% in

in in there marketplace the potential the assumes guidance end-markets. our of that virus the catalyst could the expectations most current for year, truly is our continuation containing improve opportunities the Flowserve for key are our of mostly While a environment,

As to increased that see we expect activity levels. occurs, would

the anytime Middle bookings levels Latin East Project are as the quarters active in were the last be We’re we some more move in conditions forward three and traction. for up than projects encouraged and activity to Asia, potential that could gaining see quarter fourth permit. America discussions and sequentially

Additionally, of company I results the fully as expect I time, and trends the XXXX further strong year in an see impact the XXXX. and financial business associates, in was and in cash our MRO shareholders. we’re return our our decremental as serve this the closing, to that to customers continues dedication on improvement and for results aftermarket implement that I’m the actions continuation growth conversion, In financial for combined containing these operational our confident and focused managing margins. commitment progress expect and challenging Through will to our of progresses. with of transformation the year we virus, XXXX, At our returns, efforts, extremely best assuming our to deliver progress business industry. able our remain positive

open More to well to our create like the this remarks. other questions. and and our recovery importantly, for shareholders now in prepared concludes the Flowserve stakeholders. to value long-term call would We will win be Operator, positioned

Operator

Thank first comes Andy you. Our Citigroup. [Operator from with Instructions] Kaplowitz question

open. Your line now is

Andrew Kaplowitz

morning guys. Good

Amy Schwetz

Good morning, Andy.

Scott Rowe

Hi, Andy.

Andrew Kaplowitz

million Amy, and Scott in focus generated you said cash you because and I going to on QX just double that. $XXX want to plus generate were you first, almost obviously

improvement XXX primary of basis encouraging. Obviously, percent conversion in mentioned as of sequential is points working guidance cash You flow capital the ‘XX XXX% of sales. free

percent is of So capital getting working like around XX% your as you're guess in a high But the I it the sales range. is seems situation. arms cash question the

about as have more like confidence think you seems I've you now it And where that before? than how you get can can you on the metric So get side cash talk to? there you heard

Amy Schwetz

for thanks Andy. the Sure, question,

should improvement improvement we in possible. and around hold right where years think we progress And in we've inventory. down one been think we days. where got we place tremendous XX I I and now is think around there, that around a it Scott way think need made significant mid-XXs we've is amount be at starting that edges on to around the what the as in we've a able and with, think that in a come perspective. XXXX get marginal can from manage is improvements of within the the that as really now percentage We But last tools there's the to spot DSO foundationally, that think that capital be want a coming in company are being in over see capital think where sales inventory. of number a primary we're delivery to or XXXX working level we inventory really we is where ways, we And probably the we of think we working I around aligned couple the to about to the has working and at area to happen. of talent

XXXX. our the to where that's of in majority focus is going So be

Scott Rowe

what space companies to because right a that need to in continue little we've receivable the the Amy the improvement, the to management, and and management, gotten I’ll said, we’re to not to step there near-term the are in certainly past is commit just We'll know, progress I'd a and as might is say progress at on to far I Amy, we're away backwards inventory, lot. now. making. steady call more spot, stop Amy whole we we the continued the tools, execute go QX up, not this, all us inventory on for don't inventory on, of just it's I'll think, pretty with of forward. QX we expect as we're not we're pleased going a to side we there. as do I'd make focus a really what what place, I XX%. back kind add our won't And best work but be the now us kind we're the a but we'll goal. say to going things the was giant track, is took good mid-XXs And is right for from and disruption Amy good but want QX. going progress. process progress. in there said, cleaned teams But I said, that progress not gains, ideal be, made it, But And were visibility be these the say at relatively the And just COVID got

Andrew Kaplowitz

for seen aftermarket Thanks price least stable utilization bookings, you to that activity, sequentially. mentioned you increase. in yet you about you also tough or improving talked expect But one. improvement refinery MRO at haven't Scott, mentioned And oil is

the to related improvement customers a think weather year? higher any see Texas think need do you to of discernible And in prices incremental issues oil catalyst? you months couple first your have help, could seen you what be of for So bookings this ratchet-up MRO the demand? How much

Scott Rowe

questions. six like That's

efficient. You be got to

Andrew Kaplowitz

see that. didn’t I

Scott Rowe

in getting there's say The the in on the discussions we’re it them. to weather, was prices, last MRO in think think that yes, about, they're our cost of event of kind pretty focus at things and Coast And inflection data and see certainly on up growth whole clear that. more of customers support And in that's see talking that. that different MRO. customer in good feel up, it's to some as two tell XXXX. of lot let's return and returns long issue, in I’d question more aftermarket I we we come their where as to confident I to QX I'll aftermarket because demand going timing QX, some that the going, confident We're right, normal pent-up on point, Gulf they're I'm by events of we that point aftermarket kind or in the there. confidence are Texas that and return very a will But a and of XXXX. avoidance And MRO invest we is, still And if XQ up. call the lots that, Okay, at I oil earnings a pre-weather we to But have mobility weather QX to say key going mid-year, and to hit in going to start I’d spending I goes facilities. then to points issue. stability would catches back see say

we're to Gulf Now, obviously tracking installations over in the or of But, And it. bottom don't weather the in XX have week. the emergency Coast Texas plus know was get type we're request some and on still the services. what I region, say that last Flowserve I’d parts that trying to

of And so in downside offline four us. positive for were is The we see it that to as most for a three facilities. days net we our

seeing and to there that. got weather. seals. damage we've out already for overcome there's we're freezing orders of But from I pumps, the So And lot a valves think

didn't we But And don't and number. we think that I in it's upside so is for necessarily have a plan this guidance. the didn't material

an importantly, And of Flowserve on support our help trust I it's them solidify and kind operation can demonstrate which think opportunity can in they for restore customers probably site, us. and we their presence come of these most know situations. to our they

and those from required days. this these more through we in upgrades because Texas of opportunity or more be that heady time substantial But And something an well so both that it's out comes some stand of for incredibly it, that uncomfortable will situation, any with as standards can capitalize unfortunate lot that of equipment do regulation sort a any people Flowserve, range will to an then put new high and installations temperature as low. beefy were

Andrew Kaplowitz

Scott. that, Appreciate

Operator

you. Thank

next Mike from question comes Our Halloran Baird. with

open. Your now line is

Michael Halloran

Hey, good morning, everyone.

Amy Schwetz

Good Mike. morning,

Michael Halloran

this nice good next So guidance to obviously the let's see year, question in there, for Andy's really cash year. follow-up first flow

liquidity, the does at so, towards Has You’re radar there? offense are opportunity kind giving some you M&A point internally? more generation, given the thinking about what shifted like you all the playing set can and the of that at how if start where the cash consistent look

Amy Schwetz

time fit that our well. would look those were a we need does of think both XXXX accretive those any towards Scott was all look that that of type meaning Yes, We above with we pleased about out, able financial in as were margins frankly that of our over achieving to any we to ROIC objectives criteria. market or to out, at, above inorganic us capital. It's think we type of future acquisition returns so in project reinvesting well type delivering in and tough ROIC, deliver the XX% that the we about sight cost And year pointed line would growth. returns as think organic within set allow to Obviously, into that at, accretive terms of to we to of business. that

commitments we that about said, our embedded we So usage do That think lens. XXXX, being well. for have into through as it cash

So of the quarter as to retire going year. pointed first I we’re out, Euro the in those notes

course the course, our projects return spend over over we for million and share of year. via maintenance want and our ERP our for on dividends, And money the about committed as those to we $XXX We’re well program. maintaining left to have to shareholders do repurchase of our capital

points option it well. as sense, that deploy an that So to as at at of to makes that we'll the look during year the extent any capacity,

Scott Rowe

a to to Just put Amy in have team nice and add that, balance us with sheet. the the position

And more to open so than past. years in to the moving we're definitely offense

holding that ability improvement was really that have that our us back things better the in level. the to stronger we've in do. I'm the things was before embedded good wanted integrate offense. confidence we're process higher executing ever a of get at it us feeling really in the to give on done and one we got And to business at X.X process, and a to So to wanted us than that we the organization any appetite start looking deal gives

in add crazy. And in portfolio run. imminent, right places and But interested to what to trying starting so diversify I we're we're bolster we’re not to do to the to do would anything helps expect, long end-markets we’re going to bit a anything that going do not our the the little and help

Michael Halloran

then large margin in the make quarter that sure on understand there, savings, structural how look here. when the any And that. versus like coming would it? thinking Saw for you're decrementals items I takes and cost puts costs what bucket how back important for side, think discretionary about about and we fourth think Thanks XXXX impact just you about other price mechanisms we that

Amy Schwetz

Yes, do volume opportunities, challenges, our that. obviously the generally, highlighted as margins that a parts, think some And about some into in that pressure the a headwind moving margins. and pressure and at have well. we think on inflationary do we starting is absorption pressure we've offset included so to there's things backlog into at that or have some with guidance that and our we of There look we is sales are as built lower do helping some that's beginning locations, are lower entering as XXXX in XXXX, as number we

the to thinking we normal a mix see XXXX XXXX plan heavy, the have do transitioning about OE productivity result shift, of into very efforts. that a more mix embedded level that And transformation in was the So improvements we as XXXX. are in

and So about we're third levels. building be those ongoing as initiatives as has XXXX the think of we We think rate quarter highlighted, saving that XXXX in has is we our and will as return than many to What excited growth momentum will it from book we and to think run direction. much which historical savings fourth our the SG&A, been closer be to cost in about with we Scott we case as XXXX. these and sustainable return see as about in

Michael Halloran

Thank that, Scott. Thanks, Amy. you for

Operator

you. Thank

from Ritchie question Joe next comes with Goldman Our Sachs.

Your line now is open.

Joseph Ritchie

Thanks, everybody. morning good

Scott Rowe

Joe. Hi,

Joseph Ritchie

Scott, just longer-term do the and as difficult it's get about get of top the at need what some point we of and really to case Hey think those like that know there? kind today. you operating What like targets of achieve to think margin base line I of try revenue you sit this scenario of to is to curious I'm targets kind kind kind but you timeframe, margin where kind like give

Scott Rowe

early of said end achieve we to be should early Yes, targets these the back ’XX, under we we when first ’XX, so able in put out, targets any revenue.

think true. the basically, quo in holds So And growth status an that at still or I environment.

got margin the to got we've return. so if the get we And opportunity the the even were grow, still to get opportunity to I think we've up,

that that then what if out. helps feel good into we've any I’ll so we situation that getting start range really dramatically. about only start a at add and to clip can laid Right would to at is reasonable margin X%, the that, X% growing Now, I growth

Joseph Ritchie

CapEx And a longer-term. and about year. kind nice of normalized I But progress really should what's to was we XXXX it. obviously, the on the making think I my business? CapEx to that Got then way the look see how little right guess, about question think maybe down a cash follow-up flow, CapEx, know for you're of bit

Scott Rowe

million. put guidance we reminder, so $XX a for million as just which out $XX to our Yes, XXXX,

we're I reasonably range might that, doing up this good a think is for to the we $XXX that level something if I think be but a touching couple come maybe major, million us. where years

of sure, to through A $XX forward. million it of as we go IT kind so is $XX going million of And that half lot systems. investment is our for almost more, that

some progress this the good we as system more don't get million ever. see year-over-year. we of to automation just and But going projects on $XXX more of and then manufacturing. a into rate depend for to starts our I simplification continue efficient we so then and is I line-up to And more kind above architecture, to think the technology It'll it look make on run subside, around that on spending that significantly reasonably us. start

Joseph Ritchie

you thank very much. Great,

Operator

you. Thank

with from Our Nathan Jones Stifel. next question comes

Your line is now open.

Nathan Jones

Good morning, everyone.

Scott Rowe

Hi, Nathan.

Amy Schwetz

Hi, Nathan.

Nathan Jones

quarter. more likely should kind Maybe that to XXXX, your flat looks turn the COVID. and here starting is the to a built But of XQ turn for really decline few in would relative all follow-up upside of ‘XX is Just X% lower then like all XXXX on see in and of conservatism guidance. to of me book say you which first backlog XXXX, business things, kinds than a are some have first the guided It responsible and kind the there to book implies those it's tailwinds revenue that business the in is headwind that improving X% downside? in with prices there oil on a

Scott Rowe

craziness want quarters. been for don’t that to dealing I conservatism carve last Yes, we've Nathan the four of all given with the

few we weeks most ago, a literally disruptive and case the down in couldn't our a to to we month were of was in. If impact come enough just four people shutting COVID get operations weeks then the facilities you ago, counts like had highest in short back go January we because

so struggled every crazy or situation how just slightly seems whether we're really dealing I on And not say better. improved to give right is week be to would given getting and or not that have the things We guidance with.

upside more if things don't then to that add things operators before. it's continue because had from come improve like it's In really, what I our book money to And it's word has case. last now confident don’t right use up quite conservative we I in mobility cases pricing, we've that seen progress, But COVID say going two like improving, bill there's happens, frankly, stability would really to weeks. to opportunity that happen. to that three think But data as the fact, the to continue I’d that the just oil if going down, I'm be right will I to think spend do want to at

Nathan Jones

P&L there I an back X.X increase focus XXXX? Okay, that's think on of running is in fair. My potentially looking if question increase margins follow-up a headwind going in that say and of to through we the that And is go should the the bigger on investments you're XXXX? are growth into pull Flowserve side to Is ramp-up kind the that XXXX? we as there at, that’s what into continue

Scott Rowe

up as development. rate to technology. what quarter pretty in to on that I consistent lot anything it made want development it's this of ultimately is and spend slightly, product not and but say And is we innovation reasonably do, what’ll what third gets really a new now. product call, Yes, I XXXX, we've we're on a but call focused the the money in and trying process comment and more In material, new earnings of been got dialed we've well process the would

that, and be XXXX saw than through to spending but we to to add XXXX. up, that in ultimately projects, more isn't to the do going want to substantially so net we in start or start different bring want run And we to as add XXXX we resources want what you

Nathan Jones

processes on think not then Because spending? order spending you with that that also but you XXXX got only beyond, increasing in efficient do to be more better you've plan and in

Scott Rowe

innovation the focus that doing we're what been Yes, I with that. and the felt our process. been really has new And process, on absolutely. And has that development really on our again, product good team

and getting and so we're on to end less system. going are less we're EBITDA through to those dollars to through, the more and convert were the getting And revenue spending getting meaningful time more we markets products innovation things that

Nathan Jones

thanks taking for my questions. Okay,

Operator

you. Thank

comes question Suisse. Walsh next from with John Our Credit

open. now line Your is

John Walsh

Hello, good morning, everyone.

Scott Rowe

Good morning, John.

John Walsh

about forward, right just tax I final ability this going this I the to guess XX to is and guidance touch kind XX one the we zip item of the thinking rate to look forward? on. guess code, maintain there's as it

Amy Schwetz

So I'll take a stab at that.

rate feel and challenge pretty when tax that to effective sit foreseeable look effective the appropriate you down. for my and ways think we rate. to I’ll I continues future, Scott good that tax he that us I bring department tax to tell about down, for

at we've we're So from, pleased XX%. out we near with where come started

and look beyond we XXXX, be. to for it it. forward XXXX, we XX% have a But bring as improve to to good place of down So to that we in we'll improvements to to, move challenge that the on and level that think look opportunities sight in line for is continue

John Walsh

so what to great Great, guys there material on wanted there's RedRaven, going here But YouTube ask to on actually and out question some you, then maybe doing. a are really are public, there you be be initiative? that don't rate that you're I kind and we to see of traction the you're metrics making the kind providing know with adoption going of can goalposts, or

Scott Rowe

color and years, for are third with differentiated different list parties But becomes of customers it and prepared working business, talk I out both got know, installations, opportunities five offering come We far, the bit long gotten We've list that tracking. on a that that been meaningful yes, this about shared over the more looking I don't we're we've something customer a our some and sure it we've in our got a part that's remarks. And on just certainly watched new good I us we'll side, the we're more metrics at, provide of making truly have that Yes, solution But John. provide weeks as want. really than we'll what a a and this can’t we about little of we this XX that more. helping two haven't partners, ago. yes, other on of that

different customers almost really And are, that. And so And asking sensors, side. next certainly our is they're XX we've months. we pushed monitoring. X,XXX the that we're data. double amounts part that's and important. now can the of our for deployed And we've think we of also program in But predictive unbelievable And collecting

on already site. able predict so been And failures we've prevent and to

of those being itself this. to And so help what's that history examples, we and it And get services, customers the and that more sure with to to full our and excited provide businesses, making excited us that really becomes we're while aftermarket and about And that. help as expertise closer can going full and we're what we'll we knowledge about control customers, their all pulls its generate case flows history our our case to it, drive parts, externally, through is revenue, share really and suite operations. of but platform our that will

just think when from of a it's more And services about itself. offering our really aftermarket the system it, we than holistic and so solution

John Walsh

thanks the Great, for taking questions.

Operator

you. Thank

Our with next Stanley. question Morgan comes from Joshua Pokrzywinski

Your line is now open.

Joshua Pokrzywinski

folks. Hey, good morning

I think that's me.

Scott Rowe

Yes. Hey, Josh.

Joshua Pokrzywinski

guess, first two So questions. We've covered one of Scott. a I lot already. ground

commodity is a your that Or to back place is type project customers What's for the suspicion and I On other prices are is time a mean, with intention to like went the drawing trenching of that well similar it orders year-ago? planned it kind really on prices version But this rescope oil shelf matter. of yet. those the as maybe or it that orders customer of today? board COVID or rebounded projects sort haven't all with it? the things or across obviously conversation were

Scott Rowe

our Sure, yes, careful because different a I bit all customers are little challenges. situations facing and got to be of different

move in Gulf world the kind be or Unfortunately, Middle working time modifications the we is specialty as those a they're standpoint to or But say mid-XXXX, the back price big and relooking, XXXX. most so And be to expect sense for general they've of then projects in for last of delayed now everybody did brakes reduction perhaps that and different the through into board. got I Coast were six from is the And to nine they've a drawing and throughout production a system, through demand designs. in and starting programs entire their right, would at just year economics. released Eastern February, the financial asking on right, now back that, to decision the impacting now had project COVID us project some now potentially do Europe. App ID they're year, chemical And certainly or kind consumption on been April project so last into of what And they making or to those make the of in their in puts months originally approval. point in the kind support sometime timeframe late seeing more March, XXXX projects And XXXX. than of will we're changes petrochemical in

and at were pull point get numbers, they quarters. the discussions better starting majority of yes, the them confidence these but just more having as confidence projects. get some than you as to more confidence least subsides, we're Some in And vast more feel ever three of they in last on with are, to I movement the in this cancelled, think that had delayed. projects COVID we at see we're the confident And trigger this, mobility, then demand

late the XXXX. projects you in kind And certainly some mid-XXXX. real see start aftermarket but to in in kind smaller that hopefully, to movement again, of mid I think we think some the MRO to I picks earlier up on start and that see year, reasonably of year, I so feel And good activity

Joshua Pokrzywinski

years? hard helpful. think on sold Got would that it, went the a that that? you that over couple might know. you on that comment can that had think And you cost last to through years? be of around mentioned, apply market you the how that of then destocked in destocking like percentage last that But to in precisely under the that's business distributors few little the anything what It best you And you the much guess put

Scott Rowe

XXXX, business this Yes, business, or down what runs starting our And the more kind impact does the valve so of XXXX. the saw already numbers, at XX% stocking know they impact certainly was we distribution discussions any, actually And in they it's business level two North when I public this in disclose was, dramatically. shocked their our in to COVID distributors, really was America I And down and X%. that it their and levels. market our with as it percentage come in then plus of of impacts that come than mean valves minus through inventory the can't quarter even out them, activity. and how we produce low And it with fourth at maintain existing companies was there

going this if And going stayed that [indiscernible] so the they from we they off take purpose get stuff like their some business, rate, that, tailwinds in our the doing if good start fulfilling they're I even or us we're keep ourselves. obligation to their essentially because can't to there, at not valve pretty end customers shelf to feel and

got are confidence they're think that. I little get shelves, a of to actually kind just inventory putting the recent we do on improving, more that in so tailwind And here. to they bit going activity a things then with And start of the

valves. And so pump primarily again, And our it's valve primarily of, the some us bit this uplift. distributors some world, but I a impacts little think we'll this in in stocking gives there's get business,

Joshua Pokrzywinski

guys. Got helpful. Thanks it. Very the for color

Operator

Thank you.

question with Brett comes next Linzey from Vertical. Our

line now open. Your is

Brett Linzey

and this are about back for year there HX to weighting, then out weights in just and on assuming little an dynamics chain? year terms some of thinking a cost, obviously, given not going just morning. the are you HX, the of versus on early in Yes, price thinking impact cost But supply cost, more in to that good towards a the I maybe profit price price you supply chain lot what wanted just Flowserve. come and price

Scott Rowe

Sure.

So right. right great is the price now, cost situation unfortunately, not

struggling gas, really some oil and Certainly, right. the other challenged of are customers our petrochemical so ones. of and And and or most them, the

seeing of on it projects pricing the back that side, pricing And are for we're the very valve side much And I'd takes to more pricing say be the side as than of And on environment in a project these project going kind on it had big That’s what seal cost business the as impacting pressure anywhere inflationary the pump we've the we're else then on financially But OE viable. seeing well. pressure, lot our the coming pressure also side. comes so in is we're more when materials. some to system. then issues through

any fact, and reasonably the moving you they're look if up at up they're all moving indices, right, metal quickly. of In

However, the in and of initiatives the all some rationalization the transformation. doing, offset good that think of we we're that's closer that further supply we're to X.X can we through going work supply chain chain through

to hope things the And initiatives. start to back pricing start into help then offset the then in But as significant. move March, from my so with we just think tighten off started get self or up standpoint, and on a is the little just can a pricing the is, up anything we And side, timeframe. better scenario. And we'll in I forward, timing April inflation

our QX, savings the and going certainly to And with the things supply good And dealing on a QX, for fourth but will until I internal of those good situation. just quarter, productivity, opportunities tighten. seeing come through and chain a so this same manufacturing this say all we’re any that job even we're than early, They're seeing to keep be just And maintaining the pretty really system, in I to to this couple start happened different competitors. this. quarters that got doing the working isn't offset so

Brett Linzey

second and it clearly, we you margins now. business in think OE half? in the negative of maybe competitiveness a said, being guess like months couple Should a just Okay, mentioned I on the that, of for you've follow year-over-year the backlog as

Scott Rowe

would biggest more seeing not in today No, definitely And we’re the say, lower impact. is we're taking pump again, is OE months margins. but six was backlog definitely our negative it that's But I than OE margin ago. what yes,

Brett Linzey

some we of And Just there. start work CapEx? big I in phase, then more there. And If but that along to it's through I trying just And how far didn't last obviously the get towards the the think that work as as about of versus are CapEx, of progression on ERP to phasing negative, expense IT, a there does P&L the rollout? mean investment of we the and year-over-year, guess terms down deployment one okay. half an in

Scott Rowe

tremendous talk still I’ll time, a have incredibly for systems us made been Amy progress. our on so where CapEx about hit systems it’s we're And our and a those progress. with the we to followed of the architect we've the kind that solution. approach have for XX%. showed Yes, I'll long way was let I've and Since ERP confident landscape our We've reduced fragmented. over and long here, by go. P&L, But

we'll ERP we've one just of now and got embedded on of we're get we'll kind we this our up the architecture in instance so as Amy capital versus Big make not of a got one talk how But productivity design And we kind to single in that's that much of operation. with clean we And let doing capital can to we've about and going of visibility we’re and Bang, parts that confident have. system of a this, up, closer handful expense. end systematically the that the out system, that top standard sit the a And systems. continue will Cloud. I’ll we're progress

Amy Schwetz

is That's processes not we'll using enterprise out systems about but ERP Scott towards you so related know nearly Sure, guess our all the about range I of guidance our pointed as projects. standardize to be going IT half capital Flowserve this year just generally. that system, across

systems. As forward, we ERP think certainly about running there with costs going associated costs are

there's However, we're over time our well. that see going to also benefits SG&A run as through expense

expense, SG&A that's actually to our be journey tailwind see being over I rather this towards is additive time. than it this to So a as something going

Brett Linzey

Got best color it. and the luck. of Appreciate

Amy Schwetz

you. Thank

Scott Rowe

you. Thank

Operator

Thank you.

Andrew next Our comes Obin America. with of Bank from question

is line Your open. now

Andrew Obin

time. guys, time your I afternoon. good morning, My guess Hi good still

Scott Rowe

doing? you How are

Andrew Obin

were the question in have as seem I’m do doing of also to looking more you sales well Can sort talk a to it company? granularity bit and how FCD, could and the on and were to across business. the operational about drove at just just have numbers. specific job that able changes what you little really guys good great a pushing the just you provide done both Aftermarket you been But exactly is it if replicable what bookings. a

Scott Rowe

then quarter definitely Yes, just in took fourth right the system a We is the things. I through uplift quarter. the we lot that so FCD cost of came followed. There revenue and be got We're had that is system. one we things margin mix team of higher in got And to focused I'd more the focus had a the actions and on the QX, margins and did that say will a margins. is working the say nice the more some through MRO where good some that doing that on projects throughout of some FCD the what with come very we're year. we consistent some

level of into other move lot the right that historically, think teens, And result And have income. the average, more getting a the kind mid kind to and of to that to direction. of striving X.X. moving the year-end revenue Flowserve has where been the on little to get still But we're so with high we're this that out in we bit operating be want we us a really that side, more want up on back on consistent to we business stuff doing opportunities we

Andrew Obin

versus thinking question, exposure but and has I've lot companies, been I'm about on question sort talking thinking but from you over this of thinking XX a side. longer-term of another just Got sort to your your your business changing upgrades sector sort next the I'm Thank of capacity thinking of customer going conversations is with model about expansion. six just refining of having clients, how about months, refining the And does of the forward? versus you how and not And asking about them? impact the spending the the CapEx from are mix and kind What you. with base in it about efficiency

Scott Rowe

the the call Yes, it side. a and we and majority market, in and of truly Refining downstream oil good it's question. is largest gas, our is our oil gas

we is important Again, the this the And my of something talk to time. refining incredibly us. some around that's world. comments in, customers talked is about different all we company previous So to walk

if growing, very over the in next India, in are things the East India, we so certainly invest two. China, way decade or going a are to in about Asia, where to And continue meaningful think in Middle

downtime. Europe we're increased America And significant or saw cost almost then permanent what them with XXXX opportunities so customers, the see major there, on new we is our And talk North really exclusively regions. going when And those helping unplanned in with them and and about in in to system. helping those shutdowns we are with pretty with to it expansions investment productivity, down some them the helping in build,

things is the continue a to that doing different important. long we the for we then that of and those services seals RedRaven, and with our But really parts pumps, And with so lot aftermarket facilities as we're lot get as valves. a valves, the parts things still to up running, business, for the doing are continue of replacement we're get

and right, or best helped or standard is then it's regulation it's that we've interest a to other whatever, productivity to are just so potentially different in our helps that continue there. us thing add or a a whether the control And fuel, in changes add And lead because then a regulation movement. different clean process or Regulation for valve or a new change, or those there's I’d them in replumb anytime temperature a opportunities changing refining. change around need something to where to seals emissions they'll they're do it could us anything pump actually a out that drive

going They've them emissions, we're going refining moving to something So customers, for to every own with massive and reduced energy the sure energy portfolio to that a and support we're got our of things way. their we've them. major biofuels transitions not got watching We're that base abandon around that. it's transitions a and for got going like step we're to make the some transition installed are works And plants we've that topic with long-run. a

reduction we're feel about side, productivity come. and to on to going growing sure the then them, products we in years right to help also the equipment right markets cost the one two the so transition. that these we on good helping and the through make participate for And And having them

Andrew Obin

Appreciate it. Thank you extensive an answer. for

Operator

you. Thank

from comes with question next Our Giordano Joe Cowen.

line open. Your now is

Joseph Giordano

I'll guys, just quick. it Hey keep

data go just On out coming whose themselves, automation companies providers they technologies in like have more platform, the it this equipment, are with on sensors anyone's like, domain existential right the with can question there equipment come because that this, like now, IoT on and providers is the can that third-party is too. pull

So like, customers would one that actually what this? on they do what who this? should do of want to terms in want, does that like, hearing the And like you feedback be are

Scott Rowe

incredibly And a market right what question. say is, an now. dynamic I'll really it's it's good Right,

is to be our want to also is instrument want systems, our and keeps differentiated this over we we is or system that how be provide seal do and work? it the pump pump have And environment And do We go so do down like end that’s the of is us with valves to pump seal competitor. if the toward the to the a when what life? proprietary be it, you sealing it does the to we of information the When all describe different tried and valve kind we've even we've so more systems, done and pumps, can there systems. to throw? can really, the a How how does source efficient? way work? pumps, what open path is And then want customers, feel best around technology a instrument where the we able And would or world in when does it's agnostic to other different the How knowledge applications. valves, really we protect

we kind automation And years where long so of on understand that tuck any as of provider, user assets know and in the then kind plus solution our in platform the how, then can we of in XXX bring have well and incredibly bring in will RedRaven any end our with history that's as with. work we and

some approach of source. incredibly while open automation And well. lot that, a so those are we that's of is And collaboration had really being kind been providers. working do of our partners, Yes, it's we've

overall what in our care staff, our you're going we is system saying, using. hey, so And customers don't

want yours. say and do RedRaven the you a provider, push seeing right if And it's screens giving and allows in automation the our them slick them information, in using RedRaven able the if I’ll time handheld information insights platform, to platform. back good them to want we decisions operations that and data that on be use provide to information is where the some with that is in see very want we're our information we’ll it’s we an real or kind fashion. what provide to most we're Well, success make the devices or really whether Now, of diagnostic your into to and system, to they the make decisions that allow clearly, it

Joseph Giordano

Great, thanks.

Operator

you. Thank

Our Deane next is Capital Markets, open. line your question from comes with Dray RBC now

Andrew Krill

net for clarify on quickly lapping cost to in. Krill Hi, underway thanks. savings are wanted XXXX any think given Andrew just actions balance temporary you're Thanks. to actions, us or you thanks related other the squeezing do for savings I just This on Deane. ask want real those? when headwinds And for COVID expecting is more like to I like you cost

Amy Schwetz

third component XXXX. a and Sure, things, run the you of quarter, from of an one a the XXXX. in move I couple savings we saw fourth at SG&A into significant We're as working rate that in our around guess perspective, came where anticipating

the that Now sort restart but the inflation some travel, from associated we offset through that. at benefit or the there is savings point that of that midway to, that the XXXX headwinds with are actions some fact took the full-year of of

a included and of forecasting the there range of also that move a continuing couple manage that our that are see From XXXX. make backlog are we course we’re much and as in as why at things. cost carry perspective, those more to into way through XXXX spend being the the adjust the now decrementals actions a we're we structure think actions into that's cost XXXX. bring of took We're sustainable. sales additional that So we through year realignment some in through down. But XXXX level One, guidance planned to try as we I and on

Andrew Krill

cost any now follow-up you earnings we just puts that call on being color other it great. could the that edge give And just the factor to deciding over Thanks. was see standpoint, what included, X.X on Flowserve you Okay, from there? like then a quick the

Amy Schwetz

do into we the culturally one things, embedded of transformation [indiscernible] couple is we at are of A Sure. Flowserve. who D&A process

of say from of that felt as we so a rate and day a closer this improvement sense to more share, from a the the what efforts per per more share to from spend our around I in embedded be so adjusted run our from we a those a we’ve I run perspective, to the in is year quality of that an XXXX improvement EPS. continuous and it include reach think cultural much level, makes standpoint. pursuit level, it also $X.XX gotten reflects part rate process of understand will business. functional this is So from operational we of mean cost are perspective, and rate, would run were $X.XX what in costs But of jobs we earnings our reflects of transformation that

Andrew Krill

Okay, thank you.

Operator

Thank Thank participating. you. this today’s for Ladies concludes conference and call. gentlemen, you

now may You disconnect.

Flowserve (FLS) 24 Feb 212020 Q4 Earnings call transcript