Flowserve Corporation announced it has acquired the remaining 50 percent of shares needed to have full ownership interest in Niigata Worthington in Kawasaki, Kanagawa, Japan.
DALLAS, Mar 10, 2008 -- Flowserve Corporation (NYSE:FLS), a leading global provider of fluid motion and control products and services, announced it has acquired the remaining 50 percent of shares needed to have full ownership interest in Niigata Worthington in Kawasaki, Kanagawa, Japan. Flowserve previously owned 50 percent of Niigata Worthington in a long-term joint venture.
Niigata Worthington, a premier manufacturer of certain Flowserve pumps and other rotating equipment, reported sales of approximately $64 million in 2007. Flowserve recorded approximately $2 million for its 50 percent share of net income from the joint venture in 2007, using the equity method of accounting.
The transaction will be completed through cash and assumed liabilities totaling approximately $12 million. Other terms of the purchase were not disclosed.
Due to the size and timing of this remaining 50 percent share acquisition, Flowserve does not believe it will have a material impact on its results for the quarter ending March 31, 2008.
"This acquisition reflects our strong commitment to serving our customers - both end users and contractors - in this key Asia-Pacific region with products, service and support," said Tom Ferguson, president of Flowserve Pump Division. "Niigata Worthington has an excellent reputation as a world-class manufacturer of rotating equipment and services in this region."
Niigata Worthington provides Flowserve with a well-respected regional market leader in the industry, as well as an experienced employee base that can further continue to grow the company's aftermarket services business in the region. The acquisition also enhances Flowserve's ability to provide aftermarket support for the installed base of hydraulic decoking pumping systems, a key company product in Japan.
"With sales offices in several important locations and proven manufacturing capability, this acquisition further enhances our ability to serve the life cycle needs of our customers in the Asia-Pacific region and provides an excellent local platform for long-term growth within the region's oil and gas, chemical and power market sectors," added Ferguson.
With 100 percent ownership, Flowserve now expects increased opportunities to grow the sales and profitability of Niigata Worthington. The company plans to invest in the growth of the Niigata Worthington business and work to transfer its global best practices to further drive efficiencies throughout the organization.
Facility and Operations
In addition to its headquarters, Niigata Worthington has a 200,000 sq ft (18,600 sq m) manufacturing plant in Kashiwazaki, Niigata, and sales offices in Osaka, Fukuoka, Niigata and at the Kashiwazaki-kariha nuclear power plant.
Since its founding in 1953, Niigata Worthington has been contributing to the development of Japan's major industries, including oil and gas, petrochemical, power generation, steelmaking, and shipbuilding, as well as public work projects under the Worthington brand. This Japanese company employs approximately 200 people
About Flowserve Corp.
Flowserve Corp. is one of the world's leading providers of fluid motion and control products and services. Operating in more than 55 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company's Web site at www.flowserve.com.
SAFE HARBOR STATEMENT
This news release includes forward-looking statements. Forward-looking statements are all statements that are not statements of historical facts and include, without limitation, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition. The words "believe," "seek," "anticipate," "plan," "estimate," "expect," "intend," "project," "forecast," "predict," "potential," "continue," "will," "may," "could," "should," and other words of similar meaning are intended to identify forward-looking statements. The forward-looking statements made in this news release are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that, in some cases, are beyond our control. These risks, uncertainties and factors may cause our actual results, performance and achievements, or industry results and market trends, to be materially different from any future results, performance, achievements or trends expressed or implied by such forward-looking statements. Important risks, uncertainties and other factors that could cause actual results to differ from these forward-looking statements include, but are not limited to, the following: inherent limitations of the effectiveness of our internal control over financial reporting; potential adverse consequences resulting from securities class action litigation and other litigation, including asbestos-containing product claims; the possibility of adverse consequences related to the domestic and foreign government actions regarding our participation in the United Nations Oil-for-Food Program; the possibility of adverse consequences of governmental tax audits of our tax returns, including the ongoing IRS audit of our U.S. tax returns for the years 2002 through 2004; our ability to convert bookings, which are not subject to nor computed in accordance with generally accepted accounting principles, into revenues at acceptable, if any, profit margins, since such profit margins cannot be assured or assumed to follow historical trends; changes in the financial markets and the availability of capital; changes in the already competitive environment for our products or competitors' responses to our strategies; our inability to continue to expand our market presence through acquisitions, and unforeseen integration difficulties or costs resulting from acquisitions; economic, political and other risks associated with our international operations, including military actions or trade embargoes that could affect customer markets, including the continuing conflict in Iraq, uncertainties in certain Middle Eastern countries such as Iran, and their potential impact on Middle Eastern markets and global petroleum producers; our ability to comply with the laws and regulations affecting our international operations, including the U.S. export laws, and the effect of any noncompliance; the potential adverse impact of a significant downturn in petroleum, chemical, power and water industries; changes in economic conditions and the extent of economic growth in the U.S. and other countries and regions; unanticipated difficulties or costs associated with the implementation of systems, including software; unanticipated higher costs associated with environmental compliance and liabilities; our relative geographical profitability and its impact on our utilization of foreign tax credits; the potential impact of our indebtedness on cash flows and our ability to meet the financial covenants and other requirements in our debt agreements; any terrorist attacks; adverse changes in the regulatory climate and other legal obligations imposed on us; and other factors described from time to time in our filings with the Securities and Exchange Commission. It is not possible to foresee or identify all the factors that may affect our future performance or any forward-looking information, and new risk factors can emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements included in this news release are based on information available to us on the date of this news release. We undertake no obligation to revise or update any forward-looking statement or disclose any facts, events or circumstances that occur after the date hereof that may affect the accuracy of any forward-looking statement.
Technical Contact: Zac Nagle, Vice President - Investor Relations (972) 443-6557
Media Contact: Lars Rosene, Vice President - Global Communications and Public Affairs (469) 420-3264