爆料瓜

CHARLOTTE, N.C.,听July 29, 2020听// --听爆料瓜, Inc. (NYSE: FLOW), a leading provider of process solutions, today reported results for the quarter ended June听27, 2020.

"Our second quarter results demonstrate our nimble operating structure, which led to an effective and resilient response to the continued COVID-19 market environment. Revenues and orders were better than our expectations. The stronger than anticipated revenues combined with productivity efforts, improved operating execution and strict cost controls led to an impressive operating performance during the quarter. The company recorded all-time high gross margins of 37% in one of the most difficult demand quarters in its history," said听Marc Michael, President and Chief Executive Officer.

"As we navigate through this historic time, our guiding principles remain consistent. We will continue to ensure a safe and healthy work environment, support our customers with high performance, maintain financial strength and execute our strategy. Consistent with our plans following the sale of the Power and Energy business, on听July 16听we issued irrevocable notice of the redemption of our 5.625% Senior Notes due 2024 with an outstanding principal balance of听$300 million dollars.听 Additionally, we deployed听$6.2 million dollars听towards share repurchases in the quarter. These actions, coupled with the cash generation power of our business, leave ample liquidity to pursue our long-term capital deployment priorities supporting growth, expanding margins and returning excess cash to shareholders."

"Based on our performance in the quarter and our updated end market view, we are modifying our working assumptions for the full year. We now expect full year 2020 organic orders to decline (10%) to (20%) versus our prior expectation for a decline in the range of (15%) to (25%). Organic revenues for the year are forecast to decline (10%) to (20%) versus our prior expectation for a decline in the range of (15%) to (20%). Second half decremental margins are expected to be 30% to 40%."

"We are better positioned today than in previous industrial economic recessions to provide our customers excellent service while maintaining financial strength and strategic optionality. I am proud of what the team has accomplished in the first half of the year and our performance is indicative of the high performing culture we have built through our transformation efforts," added Michael.

Note: The commentary below is compared to the prior-year period. Organic changes exclude the effects of currency fluctuations.

• Backlog increased 6.1% organically driven by an increase in the Industrial backlog associated with strong mixer and OE pump orders and were only slightly offset by a decline in Food and Beverage orders driven largely by the company's strategy to methodically reduce its exposure to large, dry-dairy applications and focus on growing orders in higher value, liquid-processing applications.
• Orders declined (7.6)% organically. The decline was largely due to a lower level of Industrial orders as Food and Beverage orders were roughly flat. From a geographic perspective, declines in听North America,听Middle East听&听Africa听and听Asia Pacific听outside of听China听were only partially offset by growth in听China.
• Revenues declined (17.6)% organically, due to a lower level of revenue from large dry-dairy projects and broad based weakness across most Industrial product lines, largely attributable to current market conditions, along with a lower starting backlog year-over-year.
• Gross profit decreased听$(16.8) million听due primarily to the lower volume described above. However, gross margins expanded 290 points to 36.8% driven by a higher quality of revenue, improved operating execution and favorable net price/cost benefits.
• Operating income was听$14.2 million, or 4.6% of revenues. This included听$4.8 million听of restructuring charges, a听$0.8 million听non-cash impairment charge, and听$2.4 million dollars听of professional fees supporting the company's enterprise strategy and long-term value creation planning. Transitional services income of听$1.5 million听was reported in other operating income/expense. After excluding these items and reclassifying transitional services income, adjusted operating income* was听$23.7 million, or 7.7% of revenues.
• Diluted earnings per share from continuing operations were听$0.15听and included:
  • A non-cash impairment charge of听$(0.01)听per share related to the rationalization of a product line.
  • Professional fees of听$(0.04)听per share related primarily to strategic actions.
  • Restructuring and other related charges of听$(0.09).
  • A benefit of听$0.09听per share related to a mark-to-market adjustment of an equity investment.
  • Discrete and other tax items totaling a net credit of听$0.02听per share as compared to the Company's expected tax rate of 29%.
• Excluding the items noted above, adjusted earnings per share* from continuous operations were听$0.22.
• Free cash flow* generated across all operations was听$11.7 million, including investments of听$7.1 million听on capital expenditures and听$2.4 million听on restructuring actions.
• Completed the sale of the Power and Energy segment with net proceeds totaling approximately听$400 million听after adjustments, fees and taxes.

Second Quarter 2020 Results by Segment

Food and Beverage

Note: The commentary below is compared to the prior-year period. Organic changes exclude the effects of currency fluctuations.

• Backlog was flat organically with improved systems orders out of听China听offset by the Company's strategy to methodically reduce its exposure to large dry-dairy applications and increase its focus on liquid-processing applications.
• Orders were flat organically, as a rebound in听China听systems was offset by a slight decline in aftermarket along with component declines. Aftermarket orders were aided by strong service awards in the quarter.
• Revenues declined (16.1)% organically, due to a lower level of revenue from large dry-dairy systems, as anticipated, along with lower components and aftermarket sales.
• Segment income of听$19.1 million听was up approximately 36% year-over-year as margins expanded 540 points to 13.2%. The margin improvement was driven by strong operational and project execution, a higher quality of revenue which led to better mix, savings from cost reduction actions and net price benefits.

Industrial

Note: The commentary below is compared to the prior-year period. Organic changes exclude the effects of currency fluctuations.

• Backlog increased 13.2% organically reflecting strength in long cycle orders in the fourth quarter of 2019 and the first quarter of 2020 along with lower year-over-year shipments in the first half of 2020.
• Orders declined (13.5)% organically. This decline was broad-based across the majority of industrial product lines, most notably in dehydration equipment and hydraulic tools, reflecting the broader global industrial slowdown. Notably European orders were flat in the quarter, and the decline was concentrated in听North America.
• Revenues declined (18.9)% organically primarily due to a lower level of demand across the majority of short cycle product categories and end markets, primarily associated with global macroeconomic conditions.
• Segment income decreased听$(10.8) million听and margins contracted 260 points to 12.2%. The decline in segment income and margin was largely related to volume declines in high margin product categories and was partially offset by cost reduction efforts.

OTHER ITEMS

Form 10-Q听:听The company expects to file its quarterly report on Form 10-Q for the quarter ended June听27, 2020 with the Securities and Exchange Commission on or about听August 3, 2020. This news release should be read in conjunction with that filing, which will be available on the company's website at听听, in the Investor Relations section.

Subsequent Events听:听On听July 16, 2020, 爆料瓜, Inc. issued an irrevocable notice (the "Notice") with respect to its 5.625% Senior Notes due 2024 (the "2024 Notes") that it will redeem all of the outstanding 2024 Notes on听August 15, 2020听(the "Redemption Date"). The 2024 Notes, which have an outstanding principal balance of听$300.0 million, will be redeemed in full pursuant to the redemption provisions of the indenture governing the 2024 Notes for a redemption price equal to 102.813% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the Redemption Date. 爆料瓜 plans to fund the redemption using available cash.

About 爆料瓜, Inc.听:听Based in听Charlotte, North Carolina, 爆料瓜, Inc.听(NYSE: FLOW) innovates with customers to help feed and enhance the world by designing, delivering and servicing high value process solutions at the heart of growing and sustaining our diverse communities. The company's product offering is concentrated in process technologies that perform mixing, blending, fluid handling, separation, thermal heat transfer and other activities that are integral to processes performed across a wide variety of sanitary and industrial markets.听爆料瓜听had approximately听$1.5 billion听in 2019 annual revenues and has operations in more than 30 countries and sales in more than 140 countries. To learn more about 爆料瓜, please visit听听.

*Non-GAAP measure. See attached schedules for reconciliation from most comparable GAAP measure. Management believes these Non-GAAP metrics are commonly used financial measures for investors to evaluate our operating performance for the periods presented, and when read in conjunction with our condensed consolidated financial statements, present a useful tool to evaluate continuing operations and provide investors with metrics they can use to evaluate our management of the business from period to period. In addition, these are some of the factors we use in internal evaluations of the overall performance of our business.

Management acknowledges that there are many items that impact a company's reported results and the adjustments reflected in these Non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these Non-GAAP measures are not necessarily comparable to similarly-titled measures used by other companies.

Note: Net leverage as defined in the company's credit facility.

Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. Please read these results in conjunction with the company's documents filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended听December 31, 2019听and its quarterly report on Form 10-Q for the period ended听March 28, 2020. These filings identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements. Actual results may differ materially from these statements. The words "expect," "anticipate," "plan," "target," "project," "believe" and similar expressions identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are only predictions. Actual events or results may differ materially because of market conditions or other factors, and forward-looking statements should not be relied upon as a prediction of actual results. All the forward-looking statements in this press release are qualified in their entirety by reference to the factors discussed under the heading "Risk Factors" in the company's most recent Form 10-K and Form 10Q and in any other documents filed by the company with the Securities and Exchange Commission that describe risks and factors that could cause actual results to differ materially from those projected in these forward-looking statements. These risk factors may not be exhaustive. Further, the company operates in a continually changing business environment and cannot predict new risk factors that may arise as a result of these and other changes. Statements in this press release speak only as of the date of this press release, and 爆料瓜 disclaims any responsibility to update or revise such statements.

Investor Contacts听:

Scott Gaffner
VP, Investor Relations and Strategic Insights
704-752-4485
investor@spxflow.com

Media Contact听:
Melissa Buscher
Chief Communications Officer
704-540-2160

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SOURCE 爆料瓜, Inc.