Flowserve (FLS)

Risks

• Our business depends on our customers’ levels of capital investment and maintenance expenditures, which in turn are affected by numerous factors, including changes in the state of domestic and global economies, global energy demand and the liquidity cyclicality and condition of global credit and capital markets, which have impacted and which could continue to impact the ability or willingness of our customers to invest in our products and services and adversely affect our financial condition, results of operations and cash flow.
• Volatility in commodity prices, effects from credit and capital market conditions and global economic growth forecasts have in the past prompted and may in the future prompt customers to delay or cancel existing orders, which could adversely affect the viability of our backlog and could impede our ability to realize revenues on our backlog.
• Our inability to deliver our backlog on time could affect our revenues, future sales and profitability and our relationships with customers.
• Failure to successfully execute and realize the expected financial benefits from our transformation and strategic realignment and other cost-saving initiatives could adversely affect our business.
• We sell our products in highly competitive markets, which results in pressure on our profit margins and limits our ability to maintain or increase the market share of our products.
• Failure to successfully develop and introduce new products could limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow.
• Our inability to obtain raw materials at favorable prices may adversely affect our operating margins and results of operations.
• The outbreak and global spread of the novel coronavirus (COVID-19), or variants thereof, are continuing to have an adverse impact on our operations and financial performance, as well as on the operations and financial performance of many of our customers and suppliers. We are unable to predict the full extent to which the COVID-19 pandemic will continue to adversely impact our operations, financial performance, results of operations, financial condition, cash flows and/or stock price.
• Our business may be adversely impacted by work stoppages and other labor matters.
• Our growth strategy depends on our ability to continue to expand our market presence through acquisitions, and any future acquisitions may present unforeseen integration difficulties or costs which could materially affect our business.
• A significant data breach or disruption to our information technology infrastructure could materially adversely affect our business operations.
• Economic, political and other risks associated with international operations could adversely affect our business.
• We might be adversely impacted by the Brexit withdrawal of the United Kingdom’s exit from the European Union.
• Implementation of new tariffs and changes to or uncertainties related to tariffs and trade agreements could adversely affect our business.
• Our international operations expose us to fluctuations in foreign currency exchange rates which could adversely affect our business.
• We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws and regulations.
• Our operations are subject to a variety of complex and continually changing laws, regulations and policies, both internationally and domestically, which could adversely affect our business.
• We are exposed to certain regulatory and financial risks related to climate change, which could adversely affect our financial condition, results of operations and cash flows.
• We are party to asbestos-containing product litigation that could adversely affect our financial condition, results of operations and cash flows.
• Inability to protect our intellectual property could negatively affect our competitive position.
• Increased costs as a result of product liability and warranty claims could adversely affect our financial condition, results of operations and cash flows.
• Significant changes in pension fund investment performance or assumptions changes may have a material effect on the valuation of our obligations under our defined benefit pension plans, the funded status of these plans and our pension expense.
• The recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could adversely affect our operating results.
• Our outstanding indebtedness and the restrictive covenants in the agreements governing our indebtedness limit our operating and financial flexibility.
• Goodwill impairment could negatively impact our net income and shareholders' equity.
• The failure to maintain effective internal controls could impact the accuracy and timely reporting of our business and financial results.
• We depend on key personnel, the loss of whom would harm our business.
• Changes in accounting principles and guidance could result in unfavorable accounting charges or effects.