Ãâ·Ñ³Ô¹Ï

CHARLOTTE, N.C.,ÌýNov. 1, 2017Ìý// -- Ãâ·Ñ³Ô¹Ï, Inc. (NYSE: FLOW) today reported results for the quarter endedÌýSeptember 30, 2017.Ìý Management will discuss the results in more detail on its Q3 2017 earnings webcast this morning atÌý8:30 am ET.

"Over the past two years, we have transitioned Ãâ·Ñ³Ô¹Ï to an operating company with an improved cost position and a streamlined organization.Ìý Our realignment program is nearly complete and we expect to realize the full, annualized benefit of ourÌý$140 millionÌýsavings target in 2018.Ìý We have also established a strong foundation for customer engagement, growth and margin expansion," saidÌýMarc Michael, President and Chief Executive Officer.

"Our Q3 2017 financial results underscore our progress.Ìý As compared to the prior year period, orders grew 12%, revenues grew 5% and segment income margins expanded 80 points.Ìý In addition, we generated strong cash flow and further strengthened our financial position."

Michael continued, "Since the end of 2016, our backlog has now increased 23%, net debt has been reduced by 19% and net leverage is down to 3.4x."Ìý

"Today we updated our 2017 full year guidance to reflect our results through the first nine months and our outlook for the fourth quarter.Ìý We increased our full year adjusted free cash flow guidance to a range ofÌý$150 to $160 million, up from our previous guidance range ofÌý$130 to $150 million, reflecting the strength of our year-to-date free cash flow performance.Ìý We modestly lowered our full year revenue target to a range ofÌý$1.920 to $1.940 billion, as compared to our previous target range ofÌý$1.925 to $1.975 billion, due primarily to delays on the timing of certain projects in backlog.Ìý On this level of revenue, our adjusted EBITDA is now expected to be betweenÌý$193 and $200 million, compared to our previous guidance range ofÌý$195 to $215 million."

"For 2018, we reaffirmed our financial framework, targeting revenue ofÌý$2.000 to $2.050 billion, or 4% to 6% growth from the mid-point of our updated 2017 guidance, and EBITDA ofÌý$240 to $260 million.Ìý As we plan for 2018 and beyond, we are prioritizing investments in our highest value product lines and emphasizing continuous improvement actions across the enterprise to drive margin expansion.Ìý We see potential for significant value creation as we continue our journey to transform Ãâ·Ñ³Ô¹Ï into a high-performing operating enterprise," Michael concluded.

Third Quarter 2017 Overview:

• Orders increased 12.3% toÌý$512.4 million, as compared toÌý$456.3 millionÌýin the year-ago quarter.Ìý Organic orders increased 10.4%, orÌý$47.5 million, with growth across all three segments, including aÌý$28 millionÌýdairy processing award in the Food and Beverage segment.Ìý The impact of the U.S. Dollar versus foreign currencies increased orders by 1.9%, orÌý$8.6 million.Ìý
  • Excluding large capital orders⁽¹⁾, orders grew organically byÌý$38.4 millionÌýtoÌý$484.4 million, up 8.8% from the year-ago quarter, driven by the Power and Energy segment.Ìý
• Revenues increased 5.2% toÌý$491.1 million, as compared toÌý$466.8 millionÌýin the year-ago quarter. ÌýOrganic revenues* grew 3.4%, orÌý$16.0 million, driven by the Power and Energy and Industrial segments.Ìý The impact of the U.S. dollar versus foreign currencies increased revenues by 1.8%, orÌý$8.3 million.
• Operating income and margin wereÌý$37.5 millionÌýand 7.6% as compared toÌý$21.4 millionÌýand 4.6% in the year-ago quarter.
  • The company recordedÌý($2.3) millionÌýof special charges in the third quarter related to its previously announced realignment program.
• Excluding special charges, adjusted operating income* and margin wereÌý$39.8 millionÌýand 8.1% respectively.
• Diluted net earnings per share wereÌý$0.30Ìýincluding special charges ofÌý($0.04)Ìýper share related to the company's global realignment program andÌý($0.08)Ìýper share of discrete and other tax items.Ìý
• Excluding special charges and the tax items described above, adjusted earnings per share* wereÌý$0.42.
• Net cash from operating activities wasÌý$45.3 millionÌýin the quarter includingÌý($9.3) millionÌýof cash outflows in support of the company's realignment program.
• Free cash flow* wasÌý$43.0 million, including the net cash from operating activities described above lessÌý($2.3) millionÌýin capital expenditures.
• Adjusted free cash flow* for the quarter wasÌý$52.3 million.
• Net income for the quarter wasÌý$12.8 millionÌýand adjusted net income* wasÌý$17.6 million.
• Adjusted EBITDA* wasÌý$55.4 million.

Third Quarter 2017 Results by Segment:

Food and Beverage

Revenues for Q3 2017 wereÌý$176.4 million, compared toÌý$173.0 millionÌýin Q3 2016, an increase ofÌý$3.4 million, or 2.0%.Ìý Organic revenues* grew modestly during the period, and currency fluctuations increased revenues by 1.9%, orÌý$3.2 million. ÌýOn an organic basis, growth in component sales was largely offset by lower revenue from systems projects.

Segment income wasÌý$19.9 million, or 11.3% of revenues, compared toÌý$19.6 million, or 11.3% of revenues, in Q3 2016.Ìý Segment income increased primarily due to the revenue growth, improved productivity in the Bydgoszcz,ÌýPolandÌýfacility and savings from restructuring actions and cost reduction initiatives. These items were largely offset by increased variable incentive compensation.

Power and Energy

Revenues for Q3 2017 wereÌý$141.0 million, compared toÌý$127.3 millionÌýin Q3 2016, an increase ofÌý$13.7 million, or 10.8%.Ìý Organic revenues* grew 9.4%, orÌý$12.0 million, and currency fluctuations increased revenues by 1.4%, orÌý$1.7 million.Ìý On an organic basis, aftermarket sales grew double-digits year-over-year.Ìý Original equipment revenues also grew organically, driven by an increase in revenue related to valves and pumps used in midstream oil applications, partially offset by a decrease in shipments of valve closure and filtration products.

Segment income wasÌý$12.8 million, or 9.1% of revenues, compared toÌý$5.5 million, or 4.3% of revenues, in Q3 2016.Ìý The increase in segment income and margin was driven by the organic revenue growth described above, particularly in higher-margin aftermarket sales, and savings from restructuring actions and cost reduction initiatives.Ìý

Industrial

Revenues for Q3 2017 wereÌý$173.7 million, compared toÌý$166.5 millionÌýin Q3 2016, an increase ofÌý$7.2 million, or 4.3%.Ìý Organic revenues* grew 2.3%, orÌý$3.8 million, and currency fluctuations increased revenues by 2.0%, orÌý$3.4 million.Ìý The organic growth was driven by higher sales of heat exchangers and hydraulic tools.

Segment income wasÌý$22.0 million, or 12.7% of revenues, compared toÌý$23.0 million, or 13.8% of revenues, in Q3 2016.Ìý The decrease in segment income and margin was due primarily to increased variable incentive compensation, which was partially offset by savings from restructuring actions and cost reduction initiatives.

2017 Updated Full Year Financial Guidance

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. ÌýThe realignment program was initiated in 2015 and the vast majority of the planned actions are expected to be complete by the end of 2017.Ìý The total cost of the program is now expected to be approximatelyÌý$145.0 millionÌýwith annualized savings of approximatelyÌý$140.0 million, fully realized by the end of 2018.

Debt Repayment:ÌýÌýÌýOnÌýOctober 31, 2017Ìýthe company made a voluntary prepayment ofÌý$80.0 millionÌýon its term loan, reducing the outstanding principal balance of the term loan toÌý$295.0.Ìý This payment was partially funded withÌý20 million dollarsÌýof borrowings on our AR securitization facility.

Form 10-Q:ÌýThe company expects to file its quarterly report on Form 10-Q for the quarter endedÌýSeptember 30, 2017Ìýwith the Securities and Exchange Commission onÌýNovember 1, 2017. 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.

*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 condensed consolidated 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.

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

(2)ÌýÌý On an adjusted basis, 2017 guidance assumes an effective tax rate of 30% and 42 million shares outstanding.Ìý It excludesÌý~$22 millionÌýof special charges andÌý~$35 millionÌýof cash outflows related to the company's realignment program.Ìý See attached schedules for reconciliations of pre-adjusted guidance to adjusted guidance figures.

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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