FLOWSERVE CORP

Previous wording

We are a world-leading manufacturer and aftermarket service provider of comprehensive flow control systems. We develop and manufacture precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in our customers’ critical processes. Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including energy, chemical, power generation and general, which includes water management and pharmaceuticals, where our products and services enable customers to achieve their goals. Through our manufacturing platform and global network of Quick Response Centers ("QRCs"), we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics and turnkey maintenance programs. We currently have approximately 16,000 employees globally and a footprint of manufacturing facilities and QRCs in more than 50 countries.

Current wording

We are a world-leading manufacturer and aftermarket service provider of comprehensive flow control systems. We develop and manufacture precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in our customers’ critical processes. Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including energy, chemical, power generation and general, which includes water management and pharmaceuticals, where our products and services enable customers to achieve their goals. Through our manufacturing platform and global network of Quick Response Centers ("QRCs"), we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics and turnkey maintenance programs. We currently have approximately 16,000 employees globally and a footprint of manufacturing facilities and QRCs in more than 48 countries.

Previous wording

Our business model is significantly influenced by the capital and operating spending of global infrastructure industries for the placement of new products into service and maintenance spending for aftermarket services for existing operations. The worldwide installed base of our products is an important source of aftermarket revenue, where products are relied upon to maximize operating time of many key industrial processes. We continue to invest in our aftermarket strategy to provide local support to drive customer investments in our offerings and use of our services to replace or repair installed products. The aftermarket portion of our business also helps provide business stability during various economic periods. The aftermarket business, which is primarily served by our network of 152 QRCs (some of which are shared by our two business segments) located around the globe, provides a variety of service offerings for our customers including spare parts, service solutions, product life cycle solutions and other value-added services. It is generally a higher margin business compared to our original equipment business and a key component of our profitable growth strategy.

Current wording

Our business model is significantly influenced by the capital and operating spending of global infrastructure industries for the placement of new products into service and maintenance spending for aftermarket services for existing operations. The worldwide installed base of our products is an important source of aftermarket revenue, where products are relied upon to maximize operating time of many key industrial processes. We continue to invest in our aftermarket strategy to provide local support to drive customer investments in our offerings and use of our services to replace or repair installed products. The aftermarket portion of our business also helps provide business stability during various economic periods. The aftermarket business, which is primarily served by our network of 155 QRCs (some of which are shared by our two business segments) located around the globe, provides a variety of service offerings for our customers including spare parts, service solutions, product life cycle solutions and other value-added services. It is generally a higher margin business compared to our original equipment business and a key component of our profitable growth strategy.

Previous wording

Through the Flowserve Business System, we are committed to operational excellence, which includes continuous enhancements of our global supply chain capability to increase our ability to meet global customer demands and improve the quality and timely delivery of our products over the long term. Additionally, we continue to devote resources to improving the supply chain processes across our business segments to find areas of synergy and cost reduction and to improving our supply chain management capabilities to meet global customer demands. We also remain focused on improving on-time delivery and quality, while managing warranty costs across our global operations, through our operational excellence program. The goal of the program, which includes lean manufacturing, six sigma business management strategy and value engineering, is to maximize service fulfillment to customers through on-time delivery, reduced cycle time and quality at the highest internal productivity. Another main focus area of the Flowserve Business System is portfolio excellence. As part of these efforts, in 2024, we launched the complexity reduction ("CORE") program that focuses on product rationalization and continuous improvement of our overall product portfolio.

Current wording

Through the Flowserve Business System, we are committed to advancing our strategy through a culture of strong execution. Our Operational Excellence program within the Flowserve Business System, focuses on continuous enhancements of our global supply chain capability to increase our ability to meet global customer demands and improve the quality and timely delivery of our products over the long term. We continue to devote resources to improving the supply chain and our operational processes across our business segments including lean manufacturing, six sigma business management strategy, and value engineering, to find areas of synergy and cost reduction while also improving on-time delivery, reducing cycle time, and delivering quality at the highest internal productivity. Portfolio Excellence within the Flowserve Business System was launched in 2024, specifically with the complexity reduction (“CORE”) program that focuses on product rationalization and continuous improvement of our overall product portfolio. The CORE program has now been implemented in all of our main product segments with a focus on optimizing our product portfolio, improving speed, and reducing space requirements through fewer products and required inventory levels.

Previous 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. 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 2024 and are substantially completed. In the fourth quarter of 2024, we launched the CORE program within the portfolio excellence category of the Flowserve Business System. During 2025 we also initiated certain other portfolio and footprint optimization activities. These optimization activities, together with the CORE program are referred to as the "2025 Realignment Programs."

Current wording

Both the CORE program within the Portfolio Excellence and the initiation of certain other portfolio and footprint optimization activities under Operational Excellence are referred to as the "Realignment Programs."

Previous wording

We continue to see growth from the end-markets we serve and 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 strategy is expected to deliver sustainable growth, while the Flowserve Business System is expected to unlock gains in organizational and operational efficiency. The current macroeconomic environment is dynamic and uncertainty exists given the trade policy actions introduced throughout 2025, including higher import tariffs in a number of countries in which we operate, the potential implementation of modified or new tariffs and related retaliatory actions. We plan to leverage our global footprint, expansive manufacturing network, flexible supply chain and ability to incorporate tariff impacts into pricing decisions to minimize the economic impact of this uncertainty to our business. We will continue to monitor and manage macroeconomic trends and uncertainties, including inflationary and recessionary pressures resulting from the ongoing tariffs and geopolitical climate; however, with our strong backlog, improved execution and acquisition of MOGAS, we expect to deliver annual revenue growth in 2025.

Current wording

We have seen growth from the end-markets we serve and continue to advance our strategy by driving operational excellence and efficiency throughout the organization supported by the Flowserve Business System. The current macroeconomic environment is dynamic and uncertainty exists given the current armed conflict with Iran and ongoing geopolitical instability and continued trade policy actions, including higher import tariffs in a number of countries in which we operate, the potential implementation of modified or new tariffs and related retaliatory actions. We plan to leverage our global footprint, expansive manufacturing network, flexible supply chain and ability to incorporate tariff impacts into pricing decisions to minimize the economic impact of this uncertainty to our business. While we will continue to monitor and manage macroeconomic trends and uncertainties, including inflationary and recessionary pressures resulting from the ongoing tariffs and geopolitical climate, our existing backlog, improved execution and announced acquisitions activity, provide a solid revenue base for 2026.

Previous wording

As of September 30, 2025, we have cash and cash equi valents of $833.8 million and $715.4 million of borr owings available under our Second Amended and Restated Credit Agreement. 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 currently available to us. We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital throughout 2025.

Current wording

As of March 31, 2026, we have cash and cash equivalents of $792.4 million and $470.7 million of borrowings available under our Second Amended and Restated Credit Agreement. On April 15, 2026, we entered into the Third Amended and Restated Credit Agreement, which includes a $1,000 million Revolving Credit Facility and$450.0 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 currently available to us. We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital throughout 2026.

Previous wording

OUR RESULTS OF OPERATIONS — Three months ended September 30, 2025 and 2024

Current wording

RESULTS OF OPERATIONS — Three months ended March 31, 2026 and 2025

Previous wording

As discussed in Note 2, "Acquisition," to our condensed consolidated financial statements included in this Quarterly Report, effective October 15, 2024, we acquired for inclusion in FCD, all of the equity interests of MOGAS Industries, Inc., MOGAS Real Estate LLC and MOGAS Systems & Consulting LLC (such entities collectively, "MOGAS"). We incurred $9.5 million in acquisition and integration related costs for the nine months ended September 30, 2025 associated with the acquisition which are included within selling, general and administrative expense ("SG&A") in our condensed consolidated statements of income. The impact of the acquisition of MOGAS is not material for the nine months ended September 30, 2025.

Current wording

As discussed in Note 2, "Acquisitions," to our condensed consolidated financial statements included in this Quarterly Report, effective October 15, 2024, we acquired for inclusion in FCD, all of the equity interests of MOGAS Industries, Inc., MOGAS Real Estate LLC and MOGAS Systems & Consulting LLC (such entities collectively, "MOGAS"). We incurred $1.3 million in acquisition and integration related costs for the three-month period ended March 31, 2025 associated with the acquisition which are included within selling, general and administrative expense ("SG&A") in our condensed consolidated statement of income. The impact of the acquisition of MOGAS was not material for the three-month period ended March 31, 2025.

Previous wording

Our realignment activities are implemented in phases. We currently anticipate a total investment of approximately $65 million in the 2025 Realignment Programs that have been evaluated and initiated, of which $11 million is estimated to be non-cash. We are evaluating the annualized cost savings expected to be achieved upon completion of the activities of the 2025 Realignment Programs that have been identified and initiated to date. Actual savings could vary from expected savings. 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

Our realignment activities are implemented in phases. We currently anticipate a total investment in the 2025 Realignment Programs, which have been evaluated and initiated, of approximately $120 million of which $17 million is estimated to be non-cash. We are evaluating the annualized cost savings expected to be achieved upon completion of the activities of the 2025 Realignment Programs that have been identified and initiated to date. Actual savings could vary from expected savings. 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

(2) Includes the immaterial reversal of previously recognized realignment charges associated with our 2023 Realignment Programs and an immaterial non-cash gain recognized on the early cancellation of certain lease agreements and the resulting write-off of the remaining operating lease liabilities associated with our 2023 Realignment Programs, which were recognized in the first and second quarters of 2025, respectively. Our 2023 Realignment Programs are substantially completed.

Current wording

(1) Includes within FPD a $3.5 million non-cash gain recognized on the early cancellation of a certain lease agreement and the resulting write-off of the remaining operating lease liability associated with our 2023 Realignment Programs. Our 2023 Realignment Programs are substantially completed.

Previous wording

We revised the end market categories for bookings during the first quarter of 2025 to better reflect the end markets of our customers and better align with Flowserve's strategic focus. All bookings by industry amounts discussed below, including the 2024 comparative period, have been reclassified from five categories (i.e., oil and gas, chemical, power generation, water management and general industries) to four categories (i.e., energy, chemical, power generation and general industries) to conform to our current classification of end markets. The revisions implemented are as follows:

Current wording

We revised the end market categories for bookings during the first quarter of 2025 to better reflect the end markets of our customers and better align with Flowserve's strategic focus. All bookings by industry amounts discussed below have been reclassified from five categories (i.e., oil and gas, chemical, power generation, water management and general industries) to four categories (i.e., energy, chemical, power generation and general industries) to conform to our current classification of end markets. The revisions implemented are as follows:

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 September 30, 2025 increased by $9.4 million, or 0.8%, as compared with the same period in 2024. The increase included currency benefits of approximately $18 million. The increased bookings were driven by increased customer orders of $35 million in the power generation industry, $34 million in the chemical industry and $29 million in general industries, partially offset by a decrease of $84 million in the energy industry. The increase in customer bookings was driven by aftermarket bookings.

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 March 31, 2026 decreased by $78.2 million, or 6.4%, as compared with the same period in 2025. The decrease included currency benefits of $42.8 million. The decreased bookings were driven by decreased customer orders of $37.4 million in the energy industry, $26.8 million in the power generation industry and $16.3 million in the general industries, partially offset by an increase of $7.0 million in the chemical industry. The decrease in customer bookings was driven by original equipment bookings.

Previous wording

Sales for the three months ended September 30, 2025 increased by $41.3 million, or 3.6%, as compared to the same period in 2024. The increase included currency benefits of approximately $15 million. The increased sales were driven by aftermarket customer sales, with increased customer sales of $48 million into North America, $11 million into Africa and $10 million into Europe, partially offset by decreased customer sales of $19 million into Asia Pacific, $8 million into Latin America, and $6 million into the Middle East. Net sales to international customers, including export sales from the United States, were approximately 63% and 64% of total sales for the three months ended September 30, 2025 and 2024, respectively. Aftermarket sales represented approximately 53% of total sales, as compared with approximately 51% of total sales for the same period in 2024.

Current wording

$6.6 million into Latin America and $1.3 million into Europe, partially offset by increased customer sales of $17.1 million into North America and $7.1 million into Africa. Net sales to international customers, including export sales from the United States, were approximately 61% and 63% of total sales for the three months ended March 31, 2026 and 2025, respectively. Aftermarket sales represented approximately 57% of total sales, as compared with approximately 51% of total sales for the same period in 2025.

Previous wording

Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellations and currency effects. Backlog of $2,896.1 million at September 30, 2025 increased by $106.5 million, or 3.8%, as compared to December 31, 2024. Currency effects provided an increase of approximately $123 million (currency effects on backlog are calculated using the change in period end exchange rates). Approximately 41% of the backlog at September 30, 2025 and 37% of the backlog at December 31, 2024 was related to aftermarket orders. Backlog includes our unsatisfied (or partially unsatisfied) performance obligations of approximately $994 million related to contracts having an original expected duration of over one year as discussed in Note 3, "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 $2.9 billion at March 31, 2026 increased by $78.0 million, or 2.7%, as compared with December 31, 2025. Currency effects provided a decrease of approximately $7.7 million (currency effects on backlog are calculated using the change in period end exchange rates). Approximately 43.4% of the backlog at March 31, 2026 and 42.0% of the backlog at December 31, 2025 was related to aftermarket orders. Backlog includes our unsatisfied (or partially unsatisfied) performance obligations of approximately $1.0 billion related to contracts having an original expected duration in excess of one year as discussed in Note 3, "Revenue Recognition," to our condensed consolidated financial statements included in this Quarterly Report.

Previous wording

SG&A for the nine months ended September 30, 2025 increased by $88.1 million, or 12.1%, as compared with the same period in 2024. Currency effects yielded an increase of approximately $1 million. SG&A increased due to $41.2 million in transaction costs incurred associated with the terminated Chart Merger, increased asbestos-related costs of $14.8 million for IBNR asbestos liability activity and increased acquisition and integration costs and amortization of acquisition related intangibles assets associated with the MOGAS acquisition of $9.8 million, partially offset by a decrease in research and development costs of $14.1 million, lower broad-based annual incentive compensation, decreased charges of $1.9 million related to our realignment activities, a $1.8 million discrete software asset impairment recognized in 2024 that did not recur and decreased bad debt expense of $0.8 million as compared to the same period in 2024. SG&A as a percentage of sales for the nine months ended September 30, 2025 increased 170 basis points driven by cost increases.

Current wording

SG&A for the three months ended March 31, 2026 increased by $20.2 million, or 8.3%, as compared with the same period in 2025. Currency effects yielded an increase of approximately $9.2 million. SG&A increased due to increased charges of $13.7 million related to our realignment activities, increased charges of $7.3 million for acquisition and integration related costs associated with the Greenray and Trillium Valves acquisitions in 2026 compared to MOGAS related charges incurred in the comparative period, a $1.4 million charge incurred during the first quarter of 2026 related to a taxing authority matter in Latin America and a $0.9 million increase in amortization of acquisition related intangible assets, partially offset by a decrease in bad debt expense of $2.3 million as compared to the same period in 2025. SG&A as a percentage of sales for the three months ended March 31, 2026 increased 350 basis points driven by cost increases.

Previous wording

Net earnings from affiliates for the three months ended September 30, 2025 decreased by $1.1 million, or 21.2%, as compared with the same period in 2024. The decrease in net earnings was primarily a result of decreased earnings of our FPD joint venture in South Korea.

Current wording

Net earnings from affiliates for the three months ended March 31, 2026 decreased by $2.7 million, or 47.1%, as compared with the same period in 2025. The decrease in net earnings was primarily a result of decreased earnings of our FPD joint ventures in South Korea.

Previous wording

Operating income for the three months ended September 30, 2025 decreased by $23.9 million, or 23.2%, as compared with the same period in 2024. The decrease included currency benefits of approximately $3 million. The decrease was primarily a result of the $46.2 million increase in SG&A, partially offset by the $23.2 million increase in gross profit.

Current wording

Operating income for the three months ended March 31, 2026 decreased by $12.5 million, or 9.4%, as compared with the same period in 2025. The decrease included negative currency effects of approximately $1.1 million. The decrease was primarily a result of the $20.2 million increase in SG&A, partially offset by the $10.5 million increase in gross profit.

Previous wording

Interest expense for the three months ended September 30, 2025 increased by $2.1 million, as compared with the same period in 2024, primarily due to higher outstanding debt during the period. Interest income for the three months ended September 30, 2025 decreased by $0.6 million as compared to the same period in 2024.

Current wording

Interest expense for the three months ended March 31, 2026 increased by $1.3 million, as compared to the same period in 2025, primarily due to higher outstanding debt during the period. Interest income for the three months ended March 31, 2026 decreased by $0.2 million primarily due to lower average balances as compared to the same period in 2025.

Previous wording

Other income (expense), net for the three months ended September 30, 2025 increased $262.1 million as compared to the same period in 2024, primarily due to the $266.0 million payment we received per the Mutual Termination Agreement for the terminated Chart Merger and a $1.1 million decrease in losses from transactions in currencies other than our sites' functional currencies, partially offset by a $3.3 million increase in losses arising from transactions on foreign exchange forward contracts. The net currency change was primarily due to the foreign currency exchange rate movements in the Mexican peso, Singapore dollar, United Arab Emirates dirham, Indian rupee and Euro during the three months ended September 30, 2025, as compared to the same period in 2024. The three-month period ended September 30, 2025 also includes a pension settlement loss of $1.5 million incurred in conjunction with the freeze of our U.S. Qualified pension plan, which represents a portion of the estimated full year expected settlement loss of $5 million - $6 million triggered due to expected cash outflows exceeding service and interest costs.

Current wording

Other income (expense), net for the three months ended March 31, 2026 increased $24.3 million as compared with the same period in 2025, primarily due to a $5.6 million gain arising from transactions on foreign exchange forward contracts and a $14.8 million gain from transactions in currencies other than our sites' functional currencies during the first quarter of 2026. The net change was primarily due to the foreign currency exchange rate movements in the Euro, British pound and Indian Rupee during the three months ended March 31, 2026, as compared to the same period in 2025. The three-month period ended March 31, 2026 also includes a pension settlement loss of $1.5 million incurred in conjunction with the freeze of our U.S. Qualified pension plan, which represents a portion of the estimated full year expected settlement loss of $5.0 million - $6.0 million triggered due to expected cash outflows exceeding service and interest costs.

Previous wording

The effective tax rate of 29.5% for the three months ended September 30, 2025 increased from 22.8% for the same period in 2024. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2025 primarily due to the impacts pursuant to the enactment of OBBBA and state income taxes, partially offset by the net impact of foreign operations. Refer to Note 15, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

Current wording

The effective tax rate of 19.7% for the three months ended March 31, 2026 increased from 18.3% for the same period in 2025. The effective tax rate varied from the U.S. federal statutory rate for the three months ended March 31, 2026 primarily due to the net impact of U.S. discrete items, partially offset by state income taxes and the net impact of foreign operations. Refer to Note 15, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

Previous wording

Other comprehensive income for the three months ended September 30, 2025 decreased by $64.6 million to a loss from income of $50.7 million in the same period in 2024. The decrease was due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Indian rupee, Euro, British pound and Mexican peso versus the U.S. dollar during the three months ended September 30, 2025, as compared to the same period in 2024.

Current wording

Other comprehensive income (loss) for the three months ended March 31, 2026, decreased by $71.1 million from $47.9 million of income from the same period in 2025. The loss was due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, Brazilian real and Indian rupee versus the U.S. dollar during the three months ended March 31, 2026, as compared with the same period in 2025.

Previous wording

Our largest business segment is FPD, through which we design, manufacture, pretest, distribute and service highly custom engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, and auxiliary systems (collectively referred to as "original equipment") and related services. FPD includes highly engineered pump products with longer lead times and mechanical seals, that are generally manufactured within shorter lead times. FPD also manufactures replacement parts and related equipment and provides aftermarket services. FPD primarily operates in the energy, power generation, chemical, and general industries. FPD operates in 49 countries with 37 manufacturing facilities worldwide, 12 of which are located in North America, 11 in Europe and the Middle East, eight in Asia Pacific, and six in Latin America, and it operates 127 QRCs, including those co-located in manufacturing facilities and/or shared with FCD.

Current wording

Our largest business segment is FPD, through which we design, manufacture, distribute and service highly custom engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, and auxiliary systems (collectively referred to as "original equipment") and related services. FPD includes highly engineered pump products with longer lead times and mechanical seals, which are generally manufactured within shorter lead times. FPD also manufactures replacement parts and related equipment and provides aftermarket services. FPD primarily operates in the energy, power generation, chemical, and general industries. FPD operates in 48 countries with 37 manufacturing facilities worldwide, 12 of which are located in North America, 11 in Europe and the Middle East, eight in Asia and six in Latin America, and it operates 126 QRCs, including those co-located in manufacturing facilities and/or shared with FCD.

Previous wording

As discussed above, we revised the end market categories for bookings during the first quarter of 2025. All bookings by industry amounts discussed below, including the 2024 comparative period, have been reclassified from five categories (i.e., oil and gas, chemical, power generation, water management, and general industries) to four categories (i.e., energy, chemical, power generation and general industries) to conform to our current classification of end markets.

Current wording

As discussed above, we revised the end market categories for bookings during the first quarter of 2026. All bookings by industry amounts discussed below, including the 2025 comparative period, where applicable, have been reclassified from five categories (i.e., oil and gas, chemical, power generation, water management, and general industries) to four categories (i.e., energy, chemical, power generation and general industries) to conform to our current classification of end markets.

Previous wording

Sales for the three months ended September 30, 2025 increased by $18.2 million, or 2.3% as compared to the same period in 2024 and included currency benefits of approximately $12 million. The increase was driven by aftermarket customer sales. Increased customer sales of approximately $26 million into North America, $11 million into Africa and $7 million into Europe were partially offset by decreased customer sales of approximately $15 million into Asia Pacific, $12 million into Latin America and $1 million into the Middle East.

Current wording

Sales for thethree months ended March 31, 2026 decreased by $38.6 million, or 4.9% as compared to the same period in 2025 and included currency benefits of approximately $33.5 million. The decrease was driven by original equipment sales. Decreased customer sales of approximately $38.4 million into the Middle East, $14.3 million into Asia Pacific, $6.0 million into Latin America and $1.7 million into Europe, were partially offset by increases of $13.5 million into North America and $7.4 million into Africa.

Previous wording

Operating income for the three months ended September 30, 2025 decreased by $0.3 million, or 0.6%, as compared with the same period in 2024. The decrease included negative currency effects of less than $1 million. The decrease was primarily due to the $8.0 million increase in SG&A, partially offset by the $7.7 million increase in gross profit.

Current wording

Operating income for the three months ended March 31, 2026 decreased by $10.7 million, or 7.8%, as compared with the same period in 2025. The decrease included currency benefits of approximately $0.8 million. The decrease was primarily due to the $9.5 million increase in SG&A, partially offset by the $1.4 million increase in gross profit.

Previous wording

FCD designs, manufactures and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related equipment. FCD leverages its experience and application know-how by offering a complete menu of engineered services to complement its expansive product portfolio. FCD has a total of 44 manufacturing facilities and QRCs in 22 countries around the world, with six of its 19 manufacturing operations located in the United States, seven located in Europe and the Middle East, five located in Asia Pacific and one located in Latin America. Based on independent industry sources, we believe that FCD is the second largest industrial valve supplier on a global basis.

Current wording

FCD designs, manufactures and distributes a broad portfolio ofengineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related equipment. FCD leverages its experience and application know-how by offering a complete menu of engineered services to complement its expansive product portfolio. FCD has a total of 48 manufacturing facilities and QRCs in 22 countries around the world, with seven of its 19 manufacturing operations located in the Europe and the Middle East, six located in the United States, five located in Asia Pacific and one located in Latin America. Based on independent industry sources, we believe that FCD is the second largest industrial valve supplier on a global basis.

Previous wording

As discussed above, we revised the end market categories for bookings during the first quarter of 2025. All bookings by industry amounts discussed below, including the 2024 comparative period, have been reclassified from five categories (i.e., oil and gas, chemical, power generation, water management, and general industries) to four categories (i.e., energy, chemical, power generation and general industries) to conform to our current classification of end markets.

Current wording

As discussed above, we revised the end market categories for bookings during the first quarter of 2026. All bookings by industry amounts discussed below, including the 2025 comparative period, where applicable, have been reclassified from five categories (i.e., oil and gas, chemical, power generation, water management, and general industries) to four categories (i.e., energy, chemical, power generation and general industries) to conform to our current classification of end markets.

Previous wording

Existing cash, cash generated by operations and borrowings available under our 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.

Current wording

Existing cash, cash generated by operations and borrowings available under our Third 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.

Previous wording

Our cash balance increased by $158.4 million to $833.8 million at September 30, 2025, as compared with December 31, 2024. The cash activity during the first nine months of 2025 included cash provided by operating activities, $45.5 million in capital expenditures, $197.9 million of share repurchases, $82.7 million in dividend payments, $28.1 million of payments on our $500.0 million unsecured term loan facility (the "Term Loan") and $15.0 million contingent consideration payment related to the MOGAS acquisition.

Current wording

Our cash balance increased by $32.2 million to $792.4 million at March 31, 2026, as compared with December 31, 2025. The cash activity during the first three months of 2026 included cash used by operating activities, $16.9 million in capital expenditures, $26.7 million in dividend payments, $22.6 million of payments related to tax withholdings for stock-based compensation and $9.4 million of payments on our $500.0 million unsecured term loan facility (the "Term Loan"), offset by $150.0 million proceeds under the Revolving Credit Facility and $9.7 million proceeds from the disposal of assets.

Previous wording

For the nine months ended September 30, 2025, our cash provided by operating activities was $506.1 million, as compared to cash provided of $228.0 million for the same period in 2024. Cash flow used by working capital decreased for the nine months ended September 30, 2025, primarily due to increased cash flows provided by, or decreased cash flows used by, accounts receivable, inventories, accounts payable and accrued liabilities, partially offset by decreased cash flows provided by, or increased cash flows used by, contract assets, prepaid expenses and other assets and contract liabilities as compared to the same period in 2024.

Current wording

For the three months ended March 31, 2026, our cash used by operating activities was $43.1 million, as compared to cash used of $49.9 million for the same period in 2025. Cash flow used by working capital increased for the three months ended March 31, 2026, primarily due to decreased cash flows provided by, or increased cash flows used by, inventories, contract assets, prepaid expenses and other assets, accounts payable, contract liabilities and accrued liabilities, partially offset by creased cash flows provided by, or decreased cash flows used by, accounts receivable, as compared to the same period in 2025.

Previous wording

Increases in accounts receivable used $26.1 million of cash flow for the nine months ended September 30, 2025, compared to cash used of $96.4 million for the same period in 2024. As of September 30, 2025, our days’ sales outstanding ("DSO") was 80 days as compared to 77 days as of September 30, 2024.

Current wording

Decreases in accounts receivable provided $63.5 million of cash flow for the three months ended March 31, 2026, compared to cash used of $50.7 million for the same period in 2025. As of March 31, 2026, our days’ sales outstanding ("DSO") was 81 days as compared to 82 days as of March 31, 2025.

Previous wording

Increases in contract assets used $35.2 million of cash flow for the nine months ended September 30, 2025, as compared to cash used of $23.3 million for the same period in 2024.

Current wording

Increases in contract assets used $38.5 million of cash flow for the three months ended March 31, 2026, as compared to cash used of $9.4 million for the same period in 2025.

Previous wording

Changes in inventory provided $26.7 million of cash flow for the nine months ended September 30, 2025, as compared to cash provided of $2.9 million for the same period in 2024. Inventory turns were 3.6 times at September 30, 2025, as compared to 3.5 times as of September 30, 2024.

Current wording

Changes in inventories used $24.6 million of cash flow for the three months ended March 31, 2026, as compared to cash provided of $8.8 million for the same period in 2025. Inventory turns were 3.3 times at March 31, 2026, as compared to 3.6 times as of March 31, 2025.

Previous wording

Changes in accounts payable provided $31.2 million of cash flow for the nine months ended September 30, 2025, as compared to cash provided of $24.7 million for the same period in 2024. Decreases in accrued liabilities used $30.5 million of cash flow for the nine months ended September 30, 2025, as compared to cash used of $33.9 million for the same period in 2024.

Current wording

Decreases in accounts payable used $32.4 million of cash flow for the three months ended March 31, 2026, as compared to cash used of $16.9 million for the same period in 2025. Decreases in accrued liabilities used $110.1 million of cash flow for the three months ended March 31, 2026, as compared to cash used of $89.5 million for the same period in 2025.

Previous wording

Decreases in contract liabilities used $17.9 million of cash flow for the nine months ended September 30, 2025, as compared to cash provided of $8.5 million for the same period in 2024.

Current wording

Decreases in contract liabilities used $3.7 million of cash flow for the three months ended March 31, 2026, as compared to cash used of $3.6 million for the same period in 2025.

Previous wording

2025 were $45.5 million, a decrease of $6.6 million as compared with the same period in 2024. Our capital expenditures are generally focused on strategic initiatives to pursue information technology infrastructure, ongoing scheduled replacements and upgrades and cost reduction opportunities. In 2025, we currently estimate capital expenditures to be approximately $75.0 million, before consideration of any merger and acquisition activity.

Current wording

Cash flows used by investing activities during the three months ended March 31, 2026 were $7.2 million, as compared to cash used of $11.3 million for the same period in 2025. Capital expenditures during the three months ended March 31, 2026 were $16.9 million, an increase of $5.2 million as compared with the same period in 2025. Our capital expenditures are generally focused on strategic initiatives to pursue information technology infrastructure, ongoing scheduled replacements and upgrades and cost reduction opportunities. In 2026, we currently estimate capital expenditures to be between $90.0 million and $100.0 million, before consideration of any merger and acquisition activity.

Previous wording

Cash flows used by financing activities during the nine months ended September 30, 2025 were $330.9 million, as compared to $107.4 million of cash flows used for the same period in 2024. Cash outflows in the nine months ended September 30, 2025 resulted primarily from the $197.9 million in stock repurchases, $82.7 million of dividend payments, $28.1 million of payments on our Term Loan, $15.0 million contingent consideration payment related to the MOGAS acquisition and $11.6 million in payments related to tax withholding for stock-based compensation. Cash outflows during the nine months ended September 30, 2024 resulted primarily from the $82.8 million of dividend payments, $45.0 million of payments on our Term Loan, $50.0 million of payments on our Revolving Credit Facility and $20.1 million of share repurchases, partially offset by $100.0 million of cash proceeds from our Revolving Credit Facility.

Current wording

Cash flows provided by financing activities during the three months ended March 31, 2026 were $88.5 million, as compared to $84.2 million of cash flows used for the same period in 2025. Cash inflows in the three months ended March 31, 2026 resulted primarily from the $150.0 million of proceeds from our Revolving Credit Facility, partially offset by cash outflows of $26.7 million for dividend payments, $22.6 million in payments related to tax withholding for stock-based compensation, $9.4 million of payments on our Term Loan, and $2.6 million of payments on other financing arrangements. Cash outflows during the three months ended March 31, 2025 resulted primarily from the $27.6 million of dividend payments, $21.1 million of share repurchases, $15.0 million contingent consideration payment related to the MOGAS acquisition, $11.1 million in payments related to tax withholding for stock-based compensation and $9.4 million of payments on our Term Loan.

Previous wording

As of September 30, 2025, we had an available capacity of $715.4 million on our Second Amended and Restated Credit Agreement, which provides for a $800.0 million unsecured revolving credit facility with a maturity date of October 10, 2029. Our borrowing capacity is subject to financial covenant limitations based on the terms of our Second Amended and Restated Credit Agreement and is also reduced by outstanding letters of credit. Our Second Amended and Restated Credit Agreement is committed and held by a diversified group of financial institutions. Refer to Note 7, "Debt and Finance Lease Obligations," to our condensed consolidated financial statements included in this Quarterly Report for additional information concerning our Second Amended and Restated Credit Agreement.

Current wording

As of March 31, 2026, we had an available capacity of $470.7 million on our Second Amended and Restated Credit Agreement, which provides for a $800.0 million unsecured revolving credit facility with a maturity date of October 10, 2029. On April 15, 2026, we amended and restated our Second Amended and Restated Credit Agreement and entered into the Third Amended and Restated Credit Agreement to (i) increase the Revolving Credit Facility from $800.0 million to $1.0 billion, (ii) decrease our Term Loan from $500.0 million to $450.0 million, and (iii) extend our maturity date to April 15, 2031. Our borrowing capacity is subject to financial covenant limitations based on the terms of our Second Amended and Restated Credit Agreement and is also reduced by outstanding letters of credit. Our Third Amended and Restated Credit Agreement is committed and held by a diversified group of financial institutions. Refer to Note 7, "Debt and Finance Lease Obligations," to our condensed consolidated financial statements included in this Quarterly Report for additional information concerning our Third Amended and Restated Credit Agreement.

Previous wording

During the nine months ended September 30, 2025, we contributed $10.0 million to our U.S. pension plan, compared to $20.0 million in contributions for the same period in 2024. At December 31, 2024, our U.S. pension plan was fully funded as defined by applicable law. We continue to maintain an asset allocation consistent with our strategy to maximize total return, while reducing portfolio risks through asset class diversification.

Current wording

During the three months ended March 31, 2026, we have made no contributions to our U.S. pension plan. We have no obligation to make contributions to our U.S. pension plans in 2026, but have authorization for contributions up to $10 million. At December 31, 2025, our U.S. pension plan was fully funded as defined by applicable law. We continue to maintain an asset allocation consistent with our strategy to maximize total return, while reducing portfolio risks through asset class diversification.

Previous wording

As of September 30, 2025, we have $254.9 million of remaining capacity for Board of Directors approved share repurchases. While we currently intend to continue to return cash through dividends and/or share repurchases for the foreseeable future, any future returns of cash through dividends will be reviewed individually, declared by our Board of Directors at its discretion and implemented by management.

Current wording

As of March 31, 2026, we had $197.9 million of remaining capacity for Board of Directors approved share repurchases. While we currently intend to continue to return cash through dividends and/or share repurchases for the foreseeable future, any future returns of cash through dividends will be reviewed individually, declared by our Board of Directors at its discretion and implemented by management.