Ãâ·Ñ³Ô¹Ï

CHARLOTTE, N.C.,ÌýFeb. 6, 2018Ìý// -- Ãâ·Ñ³Ô¹Ï, Inc. (NYSE: FLOW) today reported results for the quarter and full year endedÌýDecember 31, 2017Ìýand issued its 2018 full year guidance.

"Over the past two years we created a strong, healthy foundation for the future.Ìý We completed the execution of our realignment program and transitioned to a customer-focused operating structure, which is simplifying how we work together and unlocking our potential for growth and improvement," saidÌýMarc Michael, President and Chief Executive Officer.

"Our people have shown tremendous resiliency through this transition, great pride in our products and a strong desire to provide first class customer service. These are critical attributes for our drive to transform Ãâ·Ñ³Ô¹Ï into a world-class operating enterprise."

"Looking back at 2017, we finished with a solid fourth quarter, highlighted by 25% order growth, strong cash generation and continued debt reduction. For the full year, orders grew 10% and backlog increased 27% toÌý$1.0 billion. We generatedÌý$205 millionÌýof operating cash flow and reduced net debt byÌý$262 million, or 29%. Net leverage was down to 3.0x at year end, a significant accomplishment."

"As for 2018, we are targeting revenue growth of 4% to 6% with EPS in the range ofÌý$2.21ÌýtoÌý$2.56Ìýper share and EBITDA betweenÌý$240ÌýandÌý$260 million."

"I'm encouraged with the current state of our company and I'm confident in our strategy to create shareholder value. We are prioritizing investments in our highest value product lines and emphasizing continuous improvement across the enterprise to generate margin expansion. We are in a strong financial position to invest in our business and see potential for significant value creation as we pivot our strategy to growth and continuous improvement to expand margins," Michael concluded.

Fourth Quarter 2017 Overview:

• Orders increased 24.6% toÌý$564.9 million, as compared toÌý$453.3 millionÌýin the year-ago quarter. Organic orders increased 20.2%, orÌý$91.6 million, with growth across all three segments, including two large dairy processing systems awards totalingÌý$71.5 millionÌýin the Food and Beverage segment. The impact of the U.S. dollar versus foreign currencies increased orders by 4.4%, orÌý$20.0 million.Ìý
  • Excluding large capital orders^Ìý(1), orders grew organically byÌý$20.1 millionÌýtoÌý$493.4 million, up 4.4% from the year-ago quarter, driven by the Power and Energy segment.Ìý
• Revenues increased 6.8% toÌý$529.2 million, fromÌý$495.4 millionÌýin the year-ago quarter. Organic revenues* increased 2.2%, orÌý$10.9 million, primarily due to increased shipments of valves and pumps into midstream oil applications, and to a lesser extent, aftermarket sales. The impact of the weaker U.S. dollar versus foreign currencies increased revenues by 4.6%, orÌý$22.9 million.
• Operating income and margin wereÌý$42.0 millionÌýand 7.9%, compared to operating income and margin ofÌý$10.9 millionÌýand 2.2% in the year-ago quarter.Ìý
  • The company recordedÌý$1.7 millionÌýof special charges primarily related to its previously announced realignment program, compared toÌý$15.5 millionÌýin the year-ago quarter.
• Diluted net earnings per share wereÌý$0.72Ìýand included:
  • Discrete and other tax benefits ofÌý$0.23Ìýper share primarily related to the enactment of the Tax Cuts and Jobs Act.
  • Special charges ofÌý($0.03)Ìýper share primarily related to the company's global realignment program.
• Excluding the items noted above, adjusted earnings per share* wereÌý$0.52.Ìý
• Net cash from operating activities wasÌý$87.8 millionÌýin the period includingÌý($9.7) millionÌýof cash outflows in support of the company's realignment program.
• Free cash flow* wasÌý$82.1 millionÌýand included the net cash from operating activities described above andÌý($5.7) millionÌýin capital expenditures.
• Adjusted free cash flow* for the period wasÌý$91.8 million.
• Net income for the period wasÌý$30.7 million.
• Adjusted EBITDA* for the period wasÌý$61.9 million.

Fourth Quarter 2017 Results by Segment:

Food and Beverage
Revenues for Q4 2017 wereÌý$197.1 million, compared toÌý$182.5 millionÌýin Q4 2016, an increase ofÌý$14.6 million, or 8.0%. Organic revenues* grew 3.3%, orÌý$6.1 million, and currency fluctuations increased revenues 4.7%, orÌý$8.5 million. The increase in organic revenues was due primarily to higher volumes of aftermarket and component sales, partially offset by lower volume of systems projects.

Segment income wasÌý$22.2 million, or 11.3% of revenues, in Q4 2017, compared toÌý$18.2 million, or 10.0% of revenues, in Q4 2016. Segment income and margin increased primarily due to improved project execution costs, savings from restructuring actions and cost reduction initiatives, and improved productivity in our Bydgoszcz,ÌýPolandÌýfacility. These items were partially offset by increased variable incentive compensation.

Power and Energy
Revenues for Q4 2017 wereÌý$151.3 million, compared toÌý$129.9 millionÌýin Q4 2016, an increase ofÌý$21.4 million, or 16.5%. Organic revenues* grew 10.9%, orÌý$14.2 million, and currency fluctuations increased revenues 5.6%, orÌý$7.2 million. The increase in organic revenue was due largely to an increase in revenue related to valves and pumps used in midstream oil applications, and to a lesser extent, aftermarket sales.

Segment income wasÌý$14.2 million, or 9.4% of revenues, in Q4 2017, compared toÌý$7.7 million, or 5.9% of revenues, in Q4 2016. The increase in segment income and margin was due primarily to the organic revenue increase described above, savings from restructuring actions and cost reduction initiatives, and partially offset by increased variable incentive compensation.

Industrial
Revenues for Q4 2017 wereÌý$180.8 million, compared toÌý$183.0 millionÌýin Q4 2016, a decline ofÌý$2.2 million, or 1.2%. Organic revenues* declined 5.1%, orÌý$9.4 million, and currency fluctuations increased revenues 3.9%, orÌý$7.2 million. The organic revenue decline was due primarily to lower shipments of OE and aftermarket mixers, partially offset by increased sales of hydraulic tools.

Segment income wasÌý$22.2 million, or 12.3% of revenues, in Q4 2017, compared toÌý$29.5 million, or 16.1% of revenues, in Q4 2016. The decrease in segment income and margin was driven primarily by the decline in mixer shipments mentioned above, increased variable incentive compensation, and a legal settlement. These items were partially offset by savings from restructuring actions and cost reduction initiatives.

Full Year 2017 Overview:

• Orders increased 10.2% toÌý$2.12 billionÌýfromÌý$1.92 billionÌýin the prior year. Organic orders grew byÌý$186.5 million, or 9.7% with growth across all three segments, highlighted by high-teens order growth in Power and Energy. Foreign currency was a modest benefit.Ìý
• Revenues declined 2.2% toÌý$1.95 billionÌýfromÌý$2.00 billionÌýin the prior year. The impact of the weaker U.S. dollar on foreign currencies increased revenues by 0.8%, orÌý$14.7 million. Organic revenues* decreased 3.0%, due largely to a lower opening backlog in oil and dairy related product lines.
• Operating income (loss) wasÌý$119.1 millionÌýas compared toÌý($382.6) millionÌýin the prior year.Ìý
• Segment income and margin wereÌý$196.5 millionÌýand 10.1%, compared toÌý$199.3 millionÌýand 10.0% in the prior year. Increased cost savings driven by the company's global realignment program and improved project execution costs were offset by the revenue decline described above, lower utilization rates at certain large facilities and higher variable incentive compensation.
• Special charges wereÌý$19.3 million, compared toÌý$79.8 millionÌýin the prior year, and substantially related to the company's global realignment program.
• Diluted net earnings per share wereÌý$1.10Ìýand included:
  • Special charges ofÌý($0.37)Ìýper share primarily related to the company's global realignment program.
  • Discrete and other tax benefits ofÌý$0.20Ìýper share, primarily relating to the enactment of the Tax Cuts and Jobs Act.
• Excluding the items noted above, adjusted earnings per share* wereÌý$1.27.Ìý
• Net cash from operating activities wasÌý$205.0 millionÌýand includedÌý($37.5) millionÌýof cash outflows in support of the company's realignment program.
• Free cash flow* wasÌý$185.6 millionÌýand included the net cash from operating activities described above andÌý($19.4) millionÌýin capital expenditures.Ìý
• Adjusted free cash flow* for the full year 2017 wasÌý$223.1 million.
• Net income for the full year 2017 wasÌý$46.4 million.Ìý
• Adjusted EBITDA* for the full year 2017 wasÌý$200.5 million.

2018 Full Year Financial Guidance:

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OTHER ITEMS

Global Realignment Program:ÌýÌý As previously disclosed, the company is optimizing its global footprint, streamlining business processes and reducing selling, general and administrative expense through a global realignment program. The realignment program is intended to reduce costs across operating sites and corporate and global functions, in part by making structural changes and process enhancements to help the company operate more efficiently. The realignment program was initiated in 2015 and the vast majority of the planned actions were completed at the end of 2017. The total costs of the program, which have been fully incurred wereÌý$138.0 millionÌýwith annualized savings of approximatelyÌý$140.0 million, to be fully realized by the end of 2018.

Debt Repayment:ÌýÌýÌýDuring Q4 the company made voluntary prepayments ofÌý$100.0 millionÌýon its term loan. These payments, coupled with the required principal payments reduced the outstanding principal balance of the term loan toÌý$270.0 million. OnÌýJanuary 31, 2018Ìýthe company made a voluntary prepayment ofÌý$30.0 millionÌýon its term loan, reducing the outstanding principal toÌý$240.0 million.

Income Taxes:ÌýÌýAs a result of the Tax Cuts and Jobs Act, the company recorded a net tax benefit ofÌý$20.8 millionÌýin the fourth quarter. This included a tax benefit ofÌý$17.8 millionÌýrelated to the revaluation of its U.S. federal net deferred tax liabilities. It also included aÌý$53.4 millionÌýtax benefit associated with previously accrued repatriation tax on foreign earnings deemed not to be indefinitely reinvested. Additionally, the company recorded a provisional estimate ofÌý$50.4 millionÌýrelated to the mandatory one-time "deemed repatriation" of accumulated post-1986 foreign earnings which have not been previously taxed. The company expects to pay U.S. federal tax of approximatelyÌý$18.8 millionÌýon the deemed repatriation after utilization of tax loss and foreign tax credit carryforwards. The Company expects to pay this amount over the next eight years as a result of fiscal year-ends of certain foreign subsidiaries ending afterÌýDecember 31, 2017.Ìý

Form 10-K:ÌýÌýThe company expects to file its annual report on Form 10-K for the year endedÌýDecember 31, 2017Ìýwith the Securities and Exchange Commission onÌýFebruary 6, 2018. This press release should be read in conjunction with that filing, which will be available on the company's website atÌý, in the Investor Relations section.

Ãâ·Ñ³Ô¹Ï Ãâ·Ñ³Ô¹Ï, Inc.:ÌýÌýÌýBased inÌýCharlotte, North Carolina, Ãâ·Ñ³Ô¹Ï is a global supplier of highly engineered solutions, process equipment and turn-key systems, along with the related aftermarket parts and services, into the food and beverage, power and energy and industrial end markets. Ãâ·Ñ³Ô¹Ï has approximatelyÌý$2 billionÌýin annual revenues with operations in over 30 countries and sales in over 150 countries around the world. To learn more about Ãâ·Ñ³Ô¹Ï, please visitÌý.

(1)ÌýÌý Large capital orders defined as individual orders greater thanÌý$15 millionÌýin value.

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

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

Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. Please read these results in conjunction with the company's documents filed with the Securities and Exchange Commission. These filings identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements. Actual results may differ materially from these statements. The words "expect", "anticipate", "plan", "target", "project", "believe" and similar expressions identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. In addition, estimates of future operating results are based on the company's current complement of businesses, which is subject to change.Ìý Statements in this press release speak only as of the date of this press release, and Ãâ·Ñ³Ô¹Ï disclaims any responsibility to update or revise such statements.

Investor and Media Contact:
Ryan Taylor, Vice President, Communications and Investor Relations
Phone:Ìý 704-752-4486
E-mail: Ìýinvestor@Ãâ·Ñ³Ô¹Ï.com

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