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Realignment Programs | 3 Months Ended
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Mar. 31, 2025
Restructuring and Related Activities [Abstract] |
Realignment Programs | REALIGNMENT PROGRAMS 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. During 2023, we also initiated certain product and portfolio optimization activities. 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 complexity reduction ("CORE") program within the portfolio excellence category of the Flowserve Business System. The CORE program focuses on product rationalization and continuous improvement of our overall product portfolio. 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." We currently anticipate a total investment in the 2025 Realignment Programs, which have been evaluated and initiated, of approximately $23 million of which $8 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. The realignment activities consist of restructuring and non-restructuring charges. Restructuring charges represent costs associated with the relocation of certain business activities and facility closures and include related severance costs. Non-restructuring charges are primarily employee severance associated with the workforce reductions and professional service fees. Expenses are primarily reported in cost of sales ("COS") or SG&A, as applicable, in our condensed consolidated statements of income. 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. Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. The following is a summary of total charges, net of adjustments, incurred related to our realignment activities:
| Three Months Ended March 31, 2025
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Realignment Charges |  |  |  |  |  |  |  |  |
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 3,616 |  |  | $ | 7,109 |  |  | $ | 10,725 |  |  | $ | — |  |  | $ | 10,725 |
SG&A | 106 |  |  | — |  |  | 106 |  |  | — |  |  | 106 |
| $ | 3,722 |  |  | $ | 7,109 |  |  | $ | 10,831 |  |  | $ | — |  |  | $ | 10,831 |
Non-Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | (637) |  |  | $ | (8) |  |  | $ | (645) |  |  | $ | (66) |  |  | $ | (711) |
SG&A | (1,103) |  |  | (121) |  |  | (1,224) |  |  | (185) |  |  | (1,409) |
| $ | (1,740) |  |  | $ | (129) |  |  | $ | (1,869) |  |  | $ | (251) |  |  | $ | (2,120) |
Total Realignment Charges |  |  |  |  |  |  |  |  |
COS | $ | 2,979 |  |  | $ | 7,101 |  |  | $ | 10,080 |  |  | $ | (66) |  |  | $ | 10,014 |
SG&A | (997) |  |  | (121) |  |  | (1,118) |  |  | (185) |  |  | (1,303) |
Total | $ | 1,982 |  |  | $ | 6,980 |  |  | $ | 8,962 |  |  | $ | (251) |  |  | $ | 8,711 |
| Three Months Ended March 31, 2024
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Realignment Charges |  |  |  |  |  |  |  |  |
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 4,414 |  |  | $ | 15 |  |  | $ | 4,429 |  |  | $ | — |  |  | $ | 4,429 |
SG&A | 701 |  |  | — |  |  | 701 |  |  | — |  |  | 701 |
| $ | 5,115 |  |  | $ | 15 |  |  | $ | 5,130 |  |  | $ | — |  |  | $ | 5,130 |
Non-Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 630 |  |  | $ | 752 |  |  | $ | 1,382 |  |  | $ | (138) |  |  | $ | 1,244 |
SG&A | 340 |  |  | 114 |  |  | 454 |  |  | 339 |  |  | 793 |
| $ | 970 |  |  | $ | 866 |  |  | $ | 1,836 |  |  | $ | 201 |  |  | $ | 2,037 |
Total Realignment Charges |  |  |  |  |  |  |  |  |
COS | $ | 5,044 |  |  | $ | 767 |  |  | $ | 5,811 |  |  | $ | (138) |  |  | $ | 5,673 |
SG&A | 1,041 |  |  | 114 |  |  | 1,155 |  |  | 339 |  |  | 1,494 |
Total | $ | 6,085 |  |  | $ | 881 |  |  | $ | 6,966 |  |  | $ | 201 |  |  | $ | 7,167 |
The following is a summary of total inception to date charges, net of adjustments, related to the 2025 Realignment Programs:
| Inception to Date
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Realignment Charges |  |  |  |  |  |  |  |  |
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 3,616 |  |  | $ | 7,109 |  |  | $ | 10,725 |  |  | $ | — |  |  | $ | 10,725 |
SG&A | 106 |  |  | — |  |  | 106 |  |  | — |  |  | 106 |
| $ | 3,722 |  |  | $ | 7,109 |  |  | $ | 10,831 |  |  | $ | — |  |  | $ | 10,831 |
Non-Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 2,305 |  |  | $ | (8) |  |  | $ | 2,297 |  |  | $ | (66) |  |  | $ | 2,231 |
SG&A(1) | (1,103) |  |  | (121) |  |  | (1,224) |  |  | (185) |  |  | (1,409) |
| $ | 1,202 |  |  | $ | (129) |  |  | $ | 1,073 |  |  | $ | (251) |  |  | $ | 822 |
Total Realignment Charges |  |  |  |  |  |  |  |  |
COS | $ | 5,921 |  |  | $ | 7,101 |  |  | $ | 13,022 |  |  | $ | (66) |  |  | $ | 12,956 |
SG&A | (997) |  |  | (121) |  |  | (1,118) |  |  | (185) |  |  | (1,303) |
Total | $ | 4,924 |  |  | $ | 6,980 |  |  | $ | 11,904 |  |  | $ | (251) |  |  | $ | 11,653 |
(1) Includes the immaterial reversal of previously recognized realignment charges associated with our 2023 Realignment Programs, which was recognized in the first quarter of 2025. Our 2023 Realignment Programs are substantially completed. The following is a summary of total inception to date charges, net of adjustments, related to the 2023 Realignment Programs:
| Inception to Date
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Realignment Charges |  |  |  |  |  |  |  |  |
COS | $ | 27,076 |  |  | $ | 5,041 |  |  | $ | 32,117 |  |  | $ | 66 |  |  | $ | 32,183 |
SG&A | 1,355 |  |  | 12,376 |  |  | 13,731 |  |  | (28) |  |  | 13,703 |
Loss on sale of business(1) | — |  |  | 12,981 |  |  | 12,981 |  |  | — |  |  | 12,981 |
| $ | 28,431 |  |  | $ | 30,398 |  |  | $ | 58,829 |  |  | $ | 38 |  |  | $ | 58,867 |
Non-Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 11,506 |  |  | $ | 6,612 |  |  | $ | 18,118 |  |  | $ | (655) |  |  | $ | 17,463 |
SG&A | 14,256 |  |  | 2,112 |  |  | 16,368 |  |  | 19,893 |  |  | $ | 36,261 |
| $ | 25,762 |  |  | $ | 8,724 |  |  | $ | 34,486 |  |  | $ | 19,238 |  |  | $ | 53,724 |
Total Realignment Charges |  |  |  |  |  |  |  |  |
COS | $ | 38,582 |  |  | $ | 11,653 |  |  | $ | 50,235 |  |  | $ | (589) |  |  | $ | 49,646 |
SG&A | 15,611 |  |  | 14,488 |  |  | 30,099 |  |  | 19,865 |  |  | $ | 49,964 |
Loss on sale of business(1) | — |  |  | 12,981 |  |  | 12,981 |  |  | — |  |  | $ | 12,981 |
Total | $ | 54,193 |  |  | $ | 39,122 |  |  | $ | 93,315 |  |  | $ | 19,276 |  |  | $ | 112,591 |
(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Significant Accounting Policies and Accounting Developments," to our consolidated financial statements included in our 2024 Annual Report. Restructuring charges represent costs associated with the relocation or reorganization of certain business activities and facility closures and include costs related to employee severance at closed facilities, contract termination costs, asset write-downs and other costs. Severance costs primarily include costs associated with involuntary termination benefits. Contract termination costs include costs related to the termination of operating leases or other contract termination costs. Asset write-downs include accelerated depreciation of fixed assets, accelerated amortization of intangible assets, divestiture of certain non-strategic assets and inventory write-downs. Other costs generally include costs related to employee relocation, asset relocation, vacant facility costs (i.e., taxes and insurance) and other charges. Restructuring charges include charges related to approved, but not yet announced, facility closures. The following is a summary of restructuring charges, net of adjustments, for our restructuring activities:
| Three Months Ended March 31, 2025
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs (Gains) |  | Other |  | Total
COS | $ | 7,655 |  |  | $ | — |  |  | $ | 2,000 |  |  | $ | 1,070 |  |  | $ | 10,725 |
SG&A | 22 |  |  | — |  |  | — |  |  | 84 |  |  | 106 |
Total | $ | 7,677 |  |  | $ | — |  |  | $ | 2,000 |  |  | $ | 1,154 |  |  | $ | 10,831 |
| Three Months Ended March 31, 2024
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs (Gains) |  | Other |  | Total
COS | $ | 3,985 |  |  | $ | — |  |  | $ | — |  |  | $ | 444 |  |  | $ | 4,429 |
SG&A | 701 |  |  | — |  |  | — |  |  | — |  |  | 701 |
Total | $ | 4,686 |  |  | $ | — |  |  | $ | — |  |  | $ | 444 |  |  | $ | 5,130 |
The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2025 Realignment Programs:
| Inception to Date
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs (Gains) |  | Other |  | Total
COS | $ | 7,655 |  |  | $ | — |  |  | $ | 2,000 |  |  | $ | 1,070 |  |  | $ | 10,725 |
SG&A | 22 |  |  | — |  |  | — |  |  | 84 |  |  | 106 |
Total | $ | 7,677 |  |  | $ | — |  |  | $ | 2,000 |  |  | $ | 1,154 |  |  | $ | 10,831 |
The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2023 Realignment Programs:
| Inception to Date
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs |  | Other |  | Total
COS | $ | 14,164 |  |  | $ | 301 |  |  | $ | 13,655 |  |  | $ | 4,063 |  |  | $ | 32,183 |
SG&A | 1,106 |  |  | — |  |  | 12,621 |  |  | (24) |  |  | 13,703 |
Loss on sale of business(1) | — |  |  | — |  |  | — |  |  | 12,981 |  |  | 12,981 |
Total | $ | 15,270 |  |  | $ | 301 |  |  | $ | 26,276 |  |  | $ | 17,020 |  |  | $ | 58,867 |
(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Significant Accounting Policies and Accounting Developments," to our consolidated financial statements included in our 2024 Annual Report. The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the three months ended March 31, 2025 and 2024:
(Amounts in thousands) | 2025 |  | 2024
Balance at January 1, | $ | 8,300 |  |  | $ | 8,184 |
Charges, net of adjustments | 8,831 |  |  | 5,130 |
Cash expenditures | (3,537) |  |  | (387) |
Other non-cash adjustments, including currency | (684) |  |  | (849) |
Balance at March 31, | $ | 12,910 |  |  | $ | 12,078 |

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4.e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479823/420-10-S99-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/420/tableOfContent Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 + Details
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