FLOWSERVE CORP

Previous wording

The reputation of our product portfolio is built on more than 50 well-respected brand names such as Worthington, IDP, SIHI, INNOMAG, Valtek, Limitorque, Durco, Argus and Durametallic, which we believe to be one of the most comprehensive in the industry. Our products and services are sold either directly or through designated channels to more than 10,000 companies, including some of the world’s leading engineering, procurement and construction ("EPC") firms, original equipment manufacturers, distributors and end users.

Current wording

The reputation of our product portfolio is built on more than 50 well-respected brand names such as Worthington, IDP, SIHI, INNOMAG, Valtek, Limitorque, Durco and Argus, which we believe to be one of the most comprehensive in the industry. Our products and services are sold either directly or through designated channels to more than 10,000 companies, including some of the world’s leading engineering, procurement and construction ("EPC") firms, original equipment manufacturers, distributors and end users.

Previous wording

Throughout the COVID-19 pandemic we engaged in a number of cost savings measures in order to help mitigate the adverse effects of the pandemic on our financial results, including certain realignment activities. In the first quarter of 2023, we identified and initiated certain realignment activities concurrent with the consolidation of our FPD aftermarket and pump operations into a single operating model. This consolidated operating model was designed to better align our go-to-market strategy with our product offerings, enable end-to-end lifecycle responsibility and accountability, and to facilitate more efficient operations. Additionally, we committed to an estimated $50 million in cost reduction efforts to begin in 2023. Collectively, the above realignment activities are referred to as the "2023 Realignment Programs." The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and are continuing into 2024.

Current wording

In the first quarter of 2023, we identified and initiated certain realignment activities concurrent with the consolidation of our FPD aftermarket and pump operations into a single operating model. This consolidated operating model was designed to better align our go-to-market strategy with our product offerings, enable end-to-end lifecycle responsibility and accountability, and to facilitate more efficient operations. Additionally, we committed to an estimated $50 million in cost reduction efforts to begin in 2023. Collectively, the above realignment activities are referred to as the "2023 Realignment Programs." The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and are continuing through 2024.

Previous wording

As our operations have generally stabilized from the COVID-19 pandemic, we have seen growth from our supportive served end-markets and our focus on our strategic plan that takes a balanced approach to integrating both short-term and long-term initiatives and aims to accelerate growth through three key areas: diversification, decarbonization, and digitization, the "3D Strategy." Our sales volume is expected to deliver sustainable and healthy growth, while our 2023 Realignment Programs and the new operating model have unlocked gains in organizational efficiency. With our strong backlog and supportive market environment, we expect to continue revenue growth into the second half of 2024.

Current wording

We have seen growth from the end-markets we serve and continue to focus on our strategic plan that takes a balanced approach to integrating both short-term and long-term initiatives and aims to accelerate growth through three key areas: diversification, decarbonization, and digitization, the "3D Strategy." Our sales volume is expected to deliver sustainable and healthy growth, while our 2023 Realignment Programs and the new operating model have unlocked gains in organizational efficiency. With our strong backlog and supportive market environment, we expect to deliver annual revenue growth in 2024.

Previous wording

As of June 30, 2024, we have cash and cash equi valents of$515.1 million and $621.2 millionof borrowings available under our Senior Credit Facility. We do not currently anticipate, nor are we aware of, any significant market conditions or commitments that would change any of our conclusions of the liquidity available to us. We expect the liquidity discussed above coupled with the costs savings measures planned and already in place will further enable us to maintain adequate liquidity over the short-term (next 12 months) and long-term (beyond the next 12 months). We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital.

Current wording

As of September 30, 2024, we have cash and cash equivalents of $611.7 million and $615.2 million of borrowings available under our Senior Credit Agreement. On October 10, 2024, we entered into the Second Amended and Restated Credit Agreement, which includes a $800.0 million Revolving Credit Facility and $500.0 million Term Loan. We do not currently anticipate, nor are we aware of, any significant market conditions or commitments that would change any of our conclusions of the liquidity available to us. We expect the liquidity discussed above coupled with the costs savings measures planned and already in place will further enable us to maintain adequate liquidity over the short-term (next 12 months) and long-term (beyond the next 12 months). We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital.

Previous wording

RESULTS OF OPERATIONS — Three and six months ended June 30, 2024 and 2023

Current wording

RESULTS OF OPERATIONS — Three and nine months ended September 30, 2024 and 2023

Previous wording

The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and are continuing into 2024. We currently anticipate a total investment in realignment activities that have been evaluated and initiated of approximately $107 million of which $31 million is estimated to be non-cash. Based on the activities of the 2023 Realignment Programs initiated to date, we estimate that we recognized cost savings of approximately $66 million through June 30, 2024. Upon completion of the activities of the 2023 Realignment Programs that have been identified and initiated to date, we expect to achieve annualized cost savings in excess of $100 million. Actual savings could vary from expected savings, which represent management's best estimate to date. There are certain remaining realignment activities that are currently being evaluated, but have not yet been approved and therefore are not included in the above anticipated total investment or estimated savings.

Current wording

The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and are continuing into 2024. We currently anticipate a total investment in realignment activities that have been evaluated and initiated of approximately $123 million of which $37 million is estimated to be non-cash. Based on the activities of the 2023 Realignment Programs initiated to date, we estimate that we recognized cost savings of approximately $89 million through September 30, 2024. Upon completion of the activities of the 2023 Realignment Programs that have been identified and initiated to date, we expect to achieve annualized cost savings in excess of $100 million. Actual savings could vary from expected savings, which represent management's best estimate to date. There are certain remaining realignment activities that are currently being evaluated, but have not yet been approved and therefore are not included in the above anticipated total investment or estimated savings.

Previous wording

We define a booking as the receipt of a customer order that contractually engages us to perform activities on behalf of our customer with regard to manufacturing, service or support. Bookings recorded and subsequently canceled within the year-to-date period are excluded from year-to-date bookings. Bookings for the three months ended June 30, 2024 increased by $135.1 million, or 12.2%, as compared with the same period in 2023. The increase included negative currency effects of approximately $9 million. The increase was driven by increased customer orders in the oil and gas, chemical and power generation industries, partially offset by the general and water management industries. The increase in customer bookings was driven substantially by original equipment bookings and included the impact of FPD orders booked in the second quarter of 2024 in excess of $150 million to supply pumps and related equipment to support the continued development of an onshore unconventional gas project and a petrochemical project in the Middle East.

Current wording

We define a booking as the receipt of a customer order that contractually engages us to perform activities on behalf of our customer with regard to manufacturing, service or support. Bookings recorded and subsequently canceled within the year-to-date period are excluded from year-to-date bookings. Bookings for the three months ended September 30, 2024 increased by $136.1 million, or 12.7%, as compared with the same period in 2023. The increase included negative currency effects of approximately $7 million. The increase was driven by increased customer orders of $60 million in the water management industry, $34 million in the power generation industry, $31 million in the oil and gas industry and $22 million in general industries, partially offset by a decrease of $15 million in the chemical industry. The increase in customer bookings was driven substantially by original equipment bookings.

Previous wording

Sales for the three months ended June 30, 2024 increased by $76.5 million, or 7.1%, as compared with the same period in 2023. The increase included negative currency effects of approximately $7 million. The increased sales were driven by both aftermarket and original equipment customer sales, with increased customer sales into North America, Europe, Latin America, Asia Pacific and Middle East, partially offset by decreased customer sales into Africa. Net sales to international customers, including export sales from the United States, were approximately 62% of total sales for both the three months ended June 30, 2024 and 2023. Aftermarket sales represented approximately 51% of total sales, as compared with approximately 52% of total sales for the same period in 2023.

Current wording

Sales for the three months ended September 30, 2024 increased by $38.4 million, or 3.5%, as compared with the same period in 2023. The increase included negative currency effects of approximately $5 million. The increased sales were driven by both aftermarket and original equipment customer sales, with increased customer sales of $25 million into the Middle East, $13 million into Europe, $9 million into Latin America and $6 million into Asia Pacific, partially offset by decreased customer sales of $4 million into both Africa and North America. Net sales to international customers, including export sales from the United States, were approximately 64% and 63% of total sales for the three months ended September 30, 2024 and 2023, respectively. Aftermarket sales represented approximately 51% of total sales, as compared with approximately 52% of total sales for the same period in 2023.

Previous wording

Sales for thesix months ended June 30, 2024 increased by $183.7 million, or 8.9%, as compared with the same period in 2023. The increase included negative currency effects of approximately $4 million. The increased sales were driven by both aftermarket and original equipment customer sales, with increased customer sales into North America, Europe, Latin America, Asia Pacific, Middle East and Africa. Net sales to international customers, including export sales from the United States, were approximately 63% of total sales for both the six months ended June 30, 2024 and 2023, respectively. Aftermarket sales represented approximately 51% of total sales, as compared with approximately 52% of total sales for the same period in 2023.

Current wording

Sales for thenine months ended September 30, 2024 increased by $222.1 million, or 7.0%, as compared with the same period in 2023. The increase included negative currency effects of approximately $9 million. The increased sales were driven by both aftermarket and original equipment customer sales, with increased customer sales of $83 million into the Middle East, $60 million into Europe, $54 million into North America, $22 million into Latin America and $18 million into Asia Pacific, partially offset by decreased customer sales of $3 million into Africa. Net sales to international customers, including export sales from the United States, were approximately 64% and 63% of total sales for the nine months ended September 30, 2024 and 2023, respectively. Aftermarket sales represented approximately 51% of total sales, as compared with approximately 52% of total sales for the same period in 2023.

Previous wording

Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellat ions and currency effects. Backlog of $2,684.4 million at June 30, 2024 decreased by $10.7 million, or 0.4%, as compared with December 31, 2023. Currency effects provided a decrease of approximately $35 million. Approximately 37% of the backlog at both June 30, 2024 and December 31, 2023 was related to aftermarket orders. Backlog includes our unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of one year of approxi mately $775 million, as discussed in Note 2, "Revenue Recognition," to our condensed consolidated financial statements included in this Quarterly Report.

Current wording

Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellat ions and currency effects. Backlog of $2,783.8 million at September 30, 2024 increased by $88.7 million, or 3.3%, as compared with December 31, 2023. Currency effects provided an increase of less than $1 million. Approximately 38% and 37% of the backlog at September 30, 2024 and December 31, 2023, respectively, was related to aftermarket orders. Backlog includes our unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of one year of approxi mately $924 million, as discussed in Note 2, "Revenue Recognition," to our condensed consolidated financial statements included in this Quarterly Report.

Previous wording

Gross profit for the six months ended June 30, 2024 increased by $85.5 million, or 13.8%, as compared with the same period in 2023. Gross profit margin for the six months ended June 30, 2024 of 31.4% increased from 30.1% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases and higher sales volume, partially offset by increased charges of $8.9 million related to our 2023 Realignment Programs and higher broad-based annual incentive compensation as compared to the same period in 2023.

Current wording

Gross profit for the nine months ended September 30, 2024 increased by $124.8 million, or 13.3%, as compared with the same period in 2023. Gross profit margin for the nine months ended September 30, 2024 of 31.4% increased from 29.7% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases and higher sales volume, partially offset by increased charges of $8.5 million related to our 2023 Realignment Programs, $2.7 million in one-time U.S. pension transition benefit expense and higher broad-based annual incentive compensation as compared to the same period in 2023.

Previous wording

SG&A for the three months ended June 30, 2024 increased by $8.5 million, or 3.7%, as compared with the same period in 2023. Currency effects yielded a decrease of approximately $1 million. SG&A increased due to increased charges of $4.4 million in research and development costs, a $4.0 million reduction of costs in the second quarter of 2023 associated with a discrete legal matter that did not recur, an increase in bad debt expense of $2.4 million, a $1.8 million discrete software asset impairment, higher broad-based annual incentive compensation and $1.1 million related to ongoing merger and acquisition costs, partially offset by decreased charges of $7.7 million related to our 2023 Realignment Programs and $2.9 million of expense related to the terminated Velan acquisition incurred in the second quarter of 2023 that did not recur as compared with the same period in 2023. SG&A as a percentage of sales for the three months ended June 30, 2024 decreased 70 basis points primarily due to increased sales leverage.

Current wording

SG&A for the three months ended September 30, 2024 increased by $6.9 million, or 2.7%, as compared with the same period in 2023. Currency effects yielded a decrease of approximately $1 million. SG&A increased due to increased charges of $11.0 million in research and development costs which includes the $7.2 million strategic acquisition of intellectual property related to certain liquefied natural gas ("LNG") technology, $2.3 million in one-time U.S. pension plan transition benefit expense, $1.7 million of expense related to the MOGAS acquisition, asbestos-related costs of $1.3 million driven by a $12.0 million adjustment for Incurred But Not Reported ("IBNR") asbestos liability accruals based on an annual actuarial study, and an increase in bad debt expense of $0.8 million, partially offset by decreased charges of $12.8 million related to our 2023 Realignment Programs, $2.5 million of expense related to the terminated Velan acquisition incurred in the third quarter of 2023 that did not recur and lower broad-based annual incentive compensation as compared with the same period in 2023. SG&A as a percentage of sales for the three months ended September 30, 2024 decreased 10 basis points primarily due to increased sales leverage that outpaced cost increases.

Previous wording

SG&A for the six months ended June 30, 2024 decreased by $7.4 million, or 1.6%, as compared with the same period in 2023. Currency effects yielded a decrease of less than $1 million. SG&A decreased due to decreased charges of $22.9 million related to our 2023 Realignment Programs, $6.0 million of expense related to the terminated Velan acquisition in 2023 that did not recur, a $2.9 million impairment of a licensing intangible in 2023 that did not recur and the reversal of previously recognized expenses of $2.0 million related to our financial exposure in Russia, partially offset by an increase in research and development costs of $9.2 million, an increase in bad debt expense of $4.8 million, higher broad-based annual incentive compensation, a $1.8 million discrete software asset impairment and $1.1 million related to ongoing merger and acquisition costs as compared with the same period in 2023. SG&A as a percentage of sales for the six months ended June 30, 2024 decreased 220 basis points primarily due to increased sales leverage and cost decreases.

Current wording

SG&A for the nine months ended September 30, 2024 decreased by $0.3 million, or less than one percent, as compared with the same period in 2023. Currency effects yielded a decrease of approximately $2 million. SG&A decreased due to decreased charges of $35.7 million related to our 2023 Realignment Programs, $8.5 million of expense related to the terminated Velan acquisition incurred in 2023 that did not recur, a $2.9 million impairment of a licensing intangible in 2023 that did not recur, the reversal of previously recognized expenses of $2.0 million related to our financial exposure in Russia and lower broad-based annual incentive compensation, partially offset by an increase in research and development costs of $20.2 million which includes the $7.2 million strategic acquisition of intellectual property related to certain LNG technology, an increase in bad debt expense of $5.6 million, asbestos-related costs of $3.4 million for IBNR asbestos liability accruals, $2.8 million of expense related to the MOGAS acquisition and a $1.8 million discrete software asset impairment as compared with the same period in 2023. SG&A as a percentage of sales for the nine months ended September 30, 2024 decreased 150 basis points primarily due to increased sales leverage and cost decreases.

Previous wording

The loss on sale of business for the three and six months ended June 30, 2024 increased by $13.0 million from zero in 2023 to $13.0 million in 2024 due to the divestiture of NAF AB, a previously wholly-owned subsidiary and control valves business within our FCD segment, including the NAF AB facility located in Linkoping, Sweden. See Note 1 , "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report for additional information on this transaction.

Current wording

The loss on sale of business for the nine months ended September 30, 2024 increased by $13.0 million from zero in 2023 to $13.0 million in 2024 due to the divestiture of NAF AB, a previously wholly-owned subsidiary and control valves business within our FCD segment, including the NAF AB facility located in Linkoping, Sweden. See Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report for additional information on this transaction.

Previous wording

Net earnings from affiliates for the three months ended June 30, 2024 increased by $2.8 million, or 70.0%, as compared with the same period in 2023. The increase in net earnings was primarily a result of increased earnings of our FPD joint venture in South Korea.

Current wording

Net earnings from affiliates for the three months ended September 30, 2024 increased by $0.6 million, or 13.0%, as compared with the same period in 2023. The increase in net earnings was primarily a result of increased earnings of our FPD joint venture in South Korea.

Previous wording

Net earnings from affiliates for the six months ended June 30, 2024 increased by $0.7 million, or 8.1%, as compared with the same period in 2023. The increase was primarily a result of increased earnings of our FPD joint venture in South Korea.

Current wording

Net earnings from affiliates for the nine months ended September 30, 2024 increased by $1.3 million, or 9.8%, as compared with the same period in 2023. The increase was primarily a result of increased earnings of our FPD joint venture in South Korea.

Previous wording

Operating income for the three months ended June 30, 2024 decreased by $3.8 million, or 10.5%, as compared with the same period in 2023. The decrease included negative currency effects of less than $1 million. The decrease was primarily due to the $13.0 million loss on sale of business and $4.1 million increase in SG&A, partially offset by the $13.2 million increase in gross profit.

Current wording

Operating income for the nine months ended September 30, 2024 increased by $113.5 million, or 50.6%, as compared with the same period in 2023. The increase included negative currency effects of approximately $4 million. The increase was primarily a result of the $124.8 million increase in gross profit and $0.3 million decrease in SG&A, partially offset by $13.0 million loss on sale of business.

Previous wording

Interest expense for the six months ended June 30, 2024 decreased by $0.6 million, as compared with the same period in 2023, primarily due to lower outstanding debt during the period, partially offset by higher effective interest rates as compared with the same period in 2023.

Current wording

Interest expense for the three months ended September 30, 2024 decreased by $0.7 million, as compared with the same period in 2023, primarily due to lower outstanding debt during the period and lower effective interest rates as compared with the same period in 2023.

Previous wording

Interest expense for the three months ended June 30, 2024 increased by $0.3 million, as compared with the same period in 2023, due to higher effective interest rates, partially offset by lower outstanding debt during the period as compared with the same period in 2023.

Current wording

Interest expense for the nine months ended September 30, 2024 decreased by $1.2 million, as compared with the same period in 2023, primarily due to lower outstanding debt during the period and lower effective interest rates as compared with the same period in 2023.

Previous wording

Other expense, net for the three months ended June 30, 2024 decreased by $0.2 million as compared with the same period in 2023, primarily due to a $5.6 million decrease in losses from transactions in currencies other than our sites' functional currencies, partially offset by a $3.6 million impairment of a debt investment and a $1.0 million increase in losses arising from transactions on foreign exchange forward contracts. The net change was primarily due to the foreign currency exchange rate movements in the Swedish krona, Mexican peso, Euro, and Brazilian real during the three months ended June 30, 2024, as compared with the same period in 2023.

Current wording

Other expense, net for the three months ended September 30, 2024 decreased by $7.8 million as compared with the same period in 2023, primarily due to a $7.0 million decrease in losses from transactions in currencies other than our sites' functional currencies and $2.0 million decrease in losses arising from transactions on foreign exchange forward contracts. The net change was primarily due to the foreign currency exchange rate movements in the United Arab Emirates dirhams, Singapore dollar, Mexican peso and Argentine peso during the three months ended September 30, 2024, as compared with the same period in 2023.

Previous wording

Other expense, net for the six months ended June 30, 2024 decreased by $7.5 million as compared with the same period in 2023, primarily due to a $7.0 million decrease in losses from transactions in currencies other than our sites' functional currencies and a $6.3 million decrease in losses arising from transactions on foreign exchange forward contracts, partially offset by a $3.6 million impairment of a debt investment. The net change was primarily due to the foreign currency exchange rate movements in the Euro, Hungarian forint, Mexican peso, and Brazilian real during the six months ended June 30, 2024, as compared with the same period in 2023.

Current wording

Other expense, net for the nine months ended September 30, 2024 decreased by $15.2 million as compared with the same period in 2023, primarily due to a $14.0 million decrease in losses from transactions in currencies other than our sites' functional currencies and a $8.3 million decrease in losses arising from transactions on foreign exchange forward contracts. The net change was primarily due to the foreign currency exchange rate movements in the Euro, Argentine peso, Mexican peso, and Brazilian real during the nine months ended September 30, 2024, as compared with the same period in 2023.

Previous wording

The effective tax rate of 23.8% for the three months ended June 30, 2024 decreased from 27.9% for the same period in 2023. The effective tax rate varied from the U.S. federal statutory rate for the three months ended June 30, 2024 primarily due to the net impact of foreign divestiture. Refer to Note 13, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

Current wording

The effective tax rate of 22.8% for the three months ended September 30, 2024 increased from (27.0)% for the same period in 2023. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2024 primarily due to the net impact of foreign operations. Refer to Note 13, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

Previous wording

The effective tax rate of 22.2% for the six months ended June 30, 2024 decreased from 23.2% for the same period in 2023. The effective tax rate varied from the U.S. federal statutory rate for the six months ended June 30, 2024 primarily due to the net impact of foreign divestiture. Refer to Note 13, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

Current wording

The effective tax rate of 22.4% for the nine months ended September 30, 2024 increased from 9.6% for the same period in 2023. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, 2024 primarily due to the net impact of foreign divestiture and foreign operations. Refer to Note 13, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

Previous wording

Other comprehensive loss for the three months ended June 30, 2024 increased by $31.7 million from an income of $8.1 million in the same period in 2023. The loss was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, Brazilian real, Colombian peso and Mexican peso versus the U.S. dollar during the three months ended June 30, 2024, as compared with the same period in 2023.

Current wording

Other comprehensive income for the three months ended September 30, 2024 increased by $91.5 million from a loss of $40.8 million in the same period in 2023. The income was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, Great British pound, Chinese yuan, Malaysian ringgits and Mexican peso versus the U.S. dollar during the three months ended September 30, 2024, as compared with the same period in 2023.

Previous wording

Other comprehensive loss for the six months ended June 30, 2024 increased by $71.7 million from an income of $21.2 millionin the same period in 2023. The loss was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, Brazilian real and Mexican peso versus the U.S. dollar during the six months ended June 30, 2024, as compared with the same period in 2023.

Current wording

Other comprehensive income for the nine months ended September 30, 2024 increased by $19.8 million from a loss of $19.6 million in the same period in 2023. The income was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, Brazilian real, Great British pound, Malaysian ringgits and Mexican peso versus the U.S. dollar during the nine months ended September 30, 2024, as compared with the same period in 2023.

Previous wording

Sales for the three months ended June 30, 2024 increased by $46.8 million, or 6.1% as compared with the same period in 2023 and included negative currency effects of approximately $5 million. The increase was driven by both aftermarket and original equipment customer sales. Increased customer sales of $25.7 million into North America, $11.8 million into Europe, $11.6 million into the Middle East and $10.1 million into Latin America were partially offset by decreased sales of $6.7 million into Africa and $4.3 million into Asia Pacific.

Current wording

Sales for the three months ended September 30, 2024 increased by $15.9 million, or 2.1% as compared with the same period in 2023 and included negative currency effects of approximately $6 million. The increase was driven by aftermarket customer sales. Increased customer sales of $9.4 million into Latin America, $8.5 million into the Middle East, $7.9 million into Europe and $3.4 million into Asia Pacific were partially offset by decreased sales of $4.3 million into North America and $3.3 million into Africa.

Previous wording

Sales for thesix months ended June 30, 2024 increased by $116.1 million, or 7.9% as compared with the same period in 2023 and included negative currency effects of approximately $2 million. The increase was driven by both aftermarket and original equipment customer sales. Increased customer sales of $54.4 million into North America, $31.9 million into Europe, $30.3 million into the Middle East and $16.6 million into Latin America were partially offset by decreased $11.3 million into Asia Pacific and $3.3 million into Africa.

Current wording

Sales for thenine months ended September 30, 2024 increased by $132.0 million, or 5.9% as compared with the same period in 2023 and included negative currency effects of approximately $8 million. The increase was driven by both aftermarket and original equipment customer sales. Increased customer sales of $50.1 million into North America, $39.8 million into Europe, $38.8 million into the Middle East and $26.0 million into Latin America were partially offset by decreased sales of $7.9 million into Asia Pacific and $6.6 million into Africa.

Previous wording

Gross profit for thesix months ended June 30, 2024 increased by $60.0 million, or 13.4%, as compared with the same period in 2023. Gross profit margin for the six months ended June 30, 2024 of 32.1% increased from 30.6% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases and higher sales volume, partially offset by increased charges of $11.1 million related to our 2023 Realignment Programs and higher broad-based annual incentive compensation as compared to the same period in 2023.

Current wording

Gross profit for thenine months ended September 30, 2024 increased by $92.7 million, or 13.9%, as compared with the same period in 2023. Gross profit margin for the nine months ended September 30, 2024 of 32.2% increased from 30.0% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases and higher sales volume, partially offset by increased charges of $13.4 million related to our 2023 Realignment Programs, $1.7 million in one-time U.S. pension plan transition benefit expense and higher broad-based annual incentive compensation as compared to the same period in 2023.

Previous wording

SG&A for the six months ended June 30, 2024 decreased by $4.0 million, or 1.4%, as compared with the same period in 2023. Currency effects provided a decrease of less than $1 million. The decrease in SG&A was primarily due to a $2.9 million impairment of a licensing intangible in 2023 that did not recur, the reversal of previously recognized expenses of $2.0 million related to our financial exposure in Russia and decreased charges of $1.7 million related to our 2023 Realignment Programs, partially offset by a $6.9 million increase in research and development costs, $3.0 million increase in bad debt expense and higher broad-based annual incentive compensation as compared to the same period in 2023.

Current wording

SG&A for the nine months ended September 30, 2024 decreased by $1.6 million, or 0.4%, as compared with the same period in 2023. Currency effects provided a decrease of approximately $1.1 million. The decrease in SG&A was primarily due to realized cost savings associated with previously implemented 2023 Realignment Programs, decreased charges of $11.0 million related to our 2023 Realignment Programs, $2.9 million impairment of a licensing intangible in 2023 that did not recur and the reversal of previously recognized expenses of $2.0 million related to our financial exposure in Russia, partially offset by a $18.5 million increase in research and development costs which includes the strategic acquisition of intellectual property related to certain LNG technology, $3.2 million increase in bad debt expense, higher broad-based annual incentive compensation and $0.8 million in one-time U.S. pension plan transition benefit expense as compared to the same period in 2023.

Previous wording

Bookings for the three months ended June 30, 2024 decreased by $10.5 million, or 2.9%, as compared with the same period in 2023. Bookings included negative currency effects of approximately $2 million. The decrease in customer bookings was driven by decreased customer orders in the oil and gas, chemical and water management industries, partially offset by increased customer orders in the power generation industry. Decreased customer bookings were driven by decreased orders of $16.8 million into Asia Pacific, $7.4 million into the Middle East, $4.9 million into Europe and $0.4 million into Africa, partially offset by increased orders of $10.3 million into Latin America and $9.9 million into North America. The decrease was primarily driven by customer original equipment bookings.

Current wording

Bookings for the three months ended September 30, 2024 decreased by $12.1 million, or 3.7%, as compared with the same period in 2023. Bookings included currency benefits of less than $1 million. The decrease in customer bookings was driven by decreased customer orders of $17.9 million in the chemical industry and $3.9 million in general industries, partially offset by increased customer orders of $5.7 million in the power generation industry and $4.9 million in the oil and gas industry. Decreased customer bookings were driven by decreased orders of $14.4 million into Asia Pacific, $5.6 million into Africa and $3.4 million into the Middle East, partially offset by increased orders of $7.2 million into Europe, $2.8 million into Latin America and $2.4 million into North America. The decrease was primarily driven by customer original equipment bookings.

Previous wording

Bookings for the six months ended June 30, 2024 decreased by $1.7 million, or 0.2%, as compared with the same period in 2023. Bookings included negative currency effects of approximately $3 million. The decrease in customer bookings was primarily driven by decreased customer orders in the oil and gas, chemical, water management and general industries, partially offset by increased customer orders in the power generation industry. Decreased customer bookings were driven by decreased orders of $16.1 million into the Middle East and $10.7 million into North America, partially offset by increased orders of $11.5 million into Latin America, $10.3 million into Asia Pacific, $3.8 million into Europe and $1.9 million into Africa. The decrease was driven by customer original equipment bookings.

Current wording

Bookings for the nine months ended September 30, 2024 decreased by $13.8 million, or 1.4%, as compared with the same period in 2023. Bookings included negative currency effects of approximately $3 million. The decrease in customer bookings was primarily driven by decreased customer orders of $24.7 million in the chemical industry, $18.2 million in general industries and $4.3 million from the water management industry, partially offset by increased customer orders of $36.3 million in the power generation industry and $0.9 million in the oil and gas industry. Decreased customer bookings were driven by decreased orders of $19.4 million into the Middle East, $8.3 million into North America, $4.0 million into Asia Pacific and $3.6 million into Africa, partially offset by increased orders of $14.3 million into Latin America and $11.0 million into Europe. The decrease was driven by customer original equipment bookings.

Previous wording

Sales for the three months ended June 30, 2024 increased $30.0 million, or 9.4%, as compared with the same period in 2023. The increase included negative currency effects of approximately $2 million. Increased customer sales were primarily driven by customer original equipment sales. The increase was primarily driven by increased customer sales of $15.9 million into the Middle East, $14.7 million into Asia Pacific, $3.4 million into Europe and $0.3 million into North America, partially offset by decreased customer sales of $1.6 million into Africa and $1.1 million into Latin America.

Current wording

Sales for the three months ended September 30, 2024 increased $22.4 million, or 6.8%, as compared with the same period in 2023. The increase included currency benefits of approximately $1 million. Increased customer sales were driven by customer original equipment sales. The increase was primarily driven by increased customer sales of $16.1 million into the Middle East, $5.6 million into Europe, $2.6 million into Asia Pacific and $0.5 million into North America, partially offset by decreased customer sales of $0.2 million into both Africa and Latin America.

Previous wording

Sales for the six months ended June 30, 2024 increased $68.9 million, or 11.5%, as compared with the same period in 2023. The increase included negative currency effects of approximately $2 million. Increased customer sales were driven by both aftermarket and customer original equipment sales. The increase was primarily driven by increased customer sales of $28.6 million into the Middle East, $23.1 million into Asia Pacific, $12.3 million into Europe, $3.4 million into North America and $3.3 million into Africa, partially offset by decreased customer sales of $4.0 million into Latin America.

Current wording

Sales for the nine months ended September 30, 2024 increased $91.4 million, or 9.8%, as compared with the same period in 2023. The increase included negative currency effects of approximately $1 million. Increased customer sales were driven by customer original equipment sales. The increase was primarily driven by increased customer sales of $44.7 million into the Middle East, $26.0 million into Asia Pacific, $20.0 million into Europe, $4.2 million into North America and $3.3 million into Africa, partially offset by decreased customer sales of $4.1 million into Latin America.

Previous wording

Gross profit for the three months ended June 30, 2024 increased by $13.2 million, or 14.2%, as compared with the same period in 2023. Gross profit margin for the three months ended June 30, 2024 of 30.6% increased from the 29.3% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases, higher sales volume, decreased charges of $2.9 million related to our 2023 Realignment Programs and lower broad-based annual incentive compensation, partially offset by slightly unfavorable mix as compared to the same period in 2023.

Current wording

Gross profit for the three months ended September 30, 2024 increased by $8.9 million, or 9.1%, as compared with the same period in 2023. Gross profit margin for the three months ended September 30, 2024 of 30.2% increased from the 29.5% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases, higher sales volume, decreased charges of $2.7 million related to our 2023 Realignment Programs and lower broad-based annual incentive compensation, partially offset by $0.8 million in one-time U.S. pension plan transition benefit expense and slightly unfavorable mix as compared to the same period in 2023.

Previous wording

Gross profit for the six months ended June 30, 2024 increased by $25.6 million, or 14.8%, as compared with the same period in 2023. Gross profit margin for the six months ended June 30, 2024 of 29.8% increased from the 28.9% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases, higher sales volume, decreased charges of $2.2 million related to our 2023 Realignment Programs and lower broad-based annual incentive compensation, partially offset by slightly unfavorable mix as compared to the same period in 2023.

Current wording

Gross profit for the nine months ended September 30, 2024 increased by $34.6 million, or 12.8%, as compared with the same period in 2023. Gross profit margin for the nine months ended September 30, 2024 of 29.9% increased from the 29.1% for the same period in 2023. The increase was primarily due to the favorable impact of previously implemented sales price increases, higher sales volume, decreased charges of $4.9 million related to our 2023 Realignment Programs and lower broad-based annual incentive compensation, partially offset by $0.8 million in one-time U.S. pension plan transition benefit expense and slightly unfavorable mix as compared to the same period in 2023.

Previous wording

Loss on sale of business for the three and six months ended June 30, 2024 increased by $13.0 million from zero in 2023 to $13.0 million in 2024 due to the divestiture of NAF AB, a previously wholly-owned subsidiary and control valves business within our FCD segment, including the NAF AB facility located in Linkoping, Sweden. The loss on sale of business is included within charges related to our 2023 Realignment Programs.

Current wording

Loss on sale of business for the nine months ended September 30, 2024 increased by $13.0 million from zero in 2023 to $13.0 million in 2024 due to the divestiture of NAF AB, a previously wholly-owned subsidiary and control valves business within our FCD segment, including the NAF AB facility located in Linkoping, Sweden. The loss on sale of business is included within charges related to our 2023 Realignment Programs.

Previous wording

Operating income for the six months ended June 30, 2024 increased by $12.4 million, or 22.7%, as compared with the same period in 2023. The increase included negative currency effects of approximately $1 million. The increase was primarily due to the $25.6 million increase in gross profit, partially offset by the $13.0 million loss on sale of business and $0.3 million increase in SG&A.

Current wording

Operating income for the nine months ended September 30, 2024 increased by $15.5 million, or 15.8%, as compared with the same period in 2023. The increase included negative currency effects of approximately $1 million. The increase was primarily due to the $34.6 million increase in gross profit, partially offset by the $13.0 million loss on sale of business and $6.1 million increase in SG&A.

Previous wording

Existing cash, cash generated by operations and borrowings available under the Senior Credit Facility are our primary sources of short-term liquidity. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions. Our sources of operating cash generally include the sale of our products and services and the conversion of our working capital, particularly accounts receivable and inventories. Our cash balance at June 30, 2024 was $515.1 million as compared with $545.7 million at December 31, 2023.

Current wording

Existing cash, cash generated by operations and borrowings available under the Second Amended and Restated Credit Agreement are our primary sources of short-term liquidity. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions. Our sources of operating cash generally include the sale of our products and services and the conversion of our working capital, particularly accounts receivable and inventories. Our cash balance at September 30, 2024 was $611.7 million as compared with $545.7 million at December 31, 2023.

Previous wording

Our cash balance decreased by $30.6 million to $515.1 million at June 30, 2024, as compared with December 31, 2023. The cash activity during the first six months of 2024 included cash provided by operating activities, $55.3 million in dividend payments, $28.3 million in capital expenditures, $30.0 million of payments on our Term Loan and $16.2 million of share repurchases.

Current wording

Our cash balance increased by $66.0 million to $611.7 million at September 30, 2024, as compared with December 31, 2023. The cash activity during the first nine months of 2024 included cash provided by operating activities, $82.8 million in dividend payments, $52.2 million in capital expenditures, $45.0 million of payments on our Term Loan and $20.1 million of share repurchases.

Previous wording

For the six months ended June 30, 2024, our cash provided by operating activities was $49.5 million, as compared to cash provided of $50.4 million for the same period in 2023. Cash flow used for working capital increased for the six months ended June 30, 2024, primarily due to increased cash flows used by or decreased cash flows provided by accounts receivable, contract assets, accrued liabilities, and retirement obligations and other liabilities, partially offset by increased cash flows provided by or decreased cash flows used by inventories, prepaid expenses and other, accounts payable, contract liabilities and net deferred taxes as compared to the same periodin 2023.

Current wording

For the nine months ended September 30, 2024, our cash provided by operating activities was $228.0 million, as compared to cash provided of $131.1 million for the same period in 2023. Working capital levels vary from period to period and are primarily affected by our volume of work, and can be impacted by billing schedules on our projects. Cash flows used by working capital accounts increased for the nine months ended September 30, 2024, primarily due to increased cash flows used by or decreased cash flows provided by accounts receivable, contract assets, contract liabilities and accrued liabilities, partially offset by increased cash flows provided by or decreased cash flows used by inventories, prepaid expenses and other assets and accounts payable as compared to the same period in 2023.