Exhibit 99.1
Pentair, Inc.
5500 Wayzata Blvd., Suite 800
Golden Valley, MN 55416
763 545 1730 Tel
763 656 5400 Fax
5500 Wayzata Blvd., Suite 800
Golden Valley, MN 55416
763 545 1730 Tel
763 656 5400 Fax
News Release
Pentair Announces Strong Third Quarter Sales and Record Operating Income
| • | Reports strong third quarter sales of $838 million, up 8 percent versus the third quarter 2006 | ||
| • | Delivers third quarter net earnings per share from continuing operations (EPS) of $0.58 reported and $0.53 on an adjusted basis* | ||
| • | Generates strong free cash flow of $120 million in the third quarter and $189 million for the first three quarters of 2007, up $96 million year-to-date versus 2006 | ||
| • | Updates full year 2007 EPS guidance range of $2.04 to $2.09 reported and $2.03 to $2.07 on an adjusted basis | ||
| • | Introduces full year 2008 guidance consisting of sales growth of 4 to 5 percent and net earnings per diluted share from continuing operations of between $2.25 and $2.40 |
| * | Adjusted 2007 and 2006 EPS exclude the benefit of non-recurring tax items as well as the negative impact associated with restructuring costs and other market related actions in the respective period. Adjusted 2007 and 2006 Operating Income and Margins exclude the negative impact associated with restructuring costs and other market related actions in the respective period (see reconciliation tables attached to this release). |
GOLDEN VALLEY, Minn. — October 23, 2007 — Pentair, Inc. (NYSE: PNR) today announced third quarter 2007 net earnings per diluted share from continuing operations (EPS) of $0.58. This represents an increase of 76 percent as compared to the $0.33 of reported EPS from continuing operations in the third quarter last year. Current period results include the favorable impact of $0.11 per share from one-time net tax benefits and a negative $0.06 per share impact from restructuring costs and market related items. Adjusting for these items in both periods, third quarter 2007 EPS from continuing operations was $0.53, up 29 percent compared to adjusted earnings per share of $0.41 in the third quarter of 2006.
Total sales increased 8 percent to $838 million as compared with $778 million in the third quarter of 2006. The company delivered operating income for the third quarter of $91 million versus $60 million in the year-earlier quarter. On an adjusted basis, the company delivered operating income of $100 million versus third quarter, 2006 adjusted operating income of $77 million. Overall, operating margins expanded 320 basis points on a reported basis to 10.9 percent. On an adjusted basis, operating margins expanded 210 basis points to 12.0 percent, driven by a positive 530 basis point improvement from volume, price, mix, acquisitions and productivity. The positive impact from these items more than offset a negative 320 basis point impact related to total inflation.
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Pentair generated free cash flow of $120 million for the quarter, driven primarily by a lower use of working capital year-over-year. Year-to-date the company has generated $189 million of free cash flow, reflecting a $96 million improvement as compared with the first three quarters of 2006.
“Our performance in the third quarter was first rate as we leveraged the strength of our business diversity and our growing international presence. Strong sales growth and earnings in our Technical Products business enabled us to exceed the third quarter earnings guidance we provided in July. In our Water businesses, we continue to navigate the challenging North American residential markets, which were as tough as we expected, while growing nicely in our international, industrial, commercial and municipal Water markets,” said Randall J. Hogan, chairman and chief executive officer.
“Our earnings per share reflect effective execution against our goals as well as the positive impact from a recent change in the German corporate tax rate. We initiated additional actions in the third quarter to improve our cost structure and to solidify our productivity momentum for 2008. Our EPS of $0.53 on an adjusted basis was up 29 percent year-over-year, a very respectable performance given the challenges in a few of our key markets.”
Third Quarter Business Highlights
The Water Groupdelivered $562 million in sales or 6 percent year-over-year sales growth. Organic sales were down 1 percent excluding acquisitions or down 2 percent excluding foreign exchange. The decline in organic growth reflects continuing softness in the North American residential markets. Internationally, Water sales increased at a double-digit rate.
| • | North American pump sales were down 4 percent as growth in commercial and municipal markets as well as new products and pricing actions could not overcome residential market declines. | ||
| • | North American filtration sales were up 11 percent or down 1 percent when adjusted for the Porous Media acquisition. Solid sales growth in food service and in other commercial and industrial markets was muted by declines in the residential water treatment markets. | ||
| • | North American pool and spa sales were down 5 percent organically as new products and price actions somewhat offset overall declines in the pool and spa markets. | ||
| • | Sales in Asia-Pacific grew 34 percent driven by strong growth in Australian sales and continued successful penetration in China. | ||
| • | Sales in Europe grew 47 percent or 10 percent excluding the Jung Pump acquisition. Sales growth outpaced the economy with particular strength in the industrial and food service markets. |
The Water Group’s third quarter operating income totaled $54 million, up 48 percent as compared to $36 million in the same period last year. On an adjusted basis, operating income was $64 million or 25 percent higher than the $51 million in the year-ago period. Adjusted operating margins expanded 170 basis points as the benefit from productivity, acquisitions and positive price more than offset the negative impact from inflation and decreased volumes.
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Technical Productsdelivered third quarter 2007 sales of $276 million, an increase of 12 percent versus the year-earlier period. Sales were up approximately 11 percent excluding acquisitions or up 9 percent excluding foreign exchange. Strong sales in international regions, solid gains in the electrical markets, and a recovering electronics market combined to drive expanded growth.
| • | Electrical third quarter sales grew approximately 11 percent driven by market share gains year-over-year in the industrial, commercial and networking market segments. New products contributed significantly to this growth, especially in the networking segment. | ||
| • | Global electronic sales were up approximately 13 percent. In North America, electronic sales declined approximately 2 percent. Electronic sales grew 15 percent in Europe and 83 percent in Asia Pacific, reflecting continuing penetration of the China market. |
Technical Products’ third quarter operating income totaled $46 million, up 24 percent as compared to $37 million in the same quarter last year. Operating margins were 16.8 percent, up 180 basis points. On an adjusted basis, margins were 16.5 percent, up 150 basis points versus the year ago period. In the quarter, the benefit from volume, price, productivity and acquisitions more than offset the negative impact from total inflation.
“Water and Technical Products performed very well in the quarter and we continue to see numerous opportunities for growth and productivity in both businesses,” Hogan said. “The 6 cents, or $9.7 million, pre-tax charge represents an acceleration of actions initiated in the third quarter in light of the deep and extended downturn in North American residential markets. The benefits associated with these actions — as well as continued productivity actions driven by lean — are included in our 2008 outlook,” he added.
Outlook
The company introduces fourth quarter 2007 EPS guidance range of $0.42 to $0.47, which includes a negative EPS impact of $0.03 to $0.04 predominantly related to a new Q4 restructuring action associated with the recently announced closure of a North American Electronics facility. On an adjusted basis, the company expects fourth quarter EPS to be $0.46 to $0.50, an increase of 48 to 61 percent year-over-year.
“With our fourth quarter guidance we now expect full-year EPS in the range of $2.04 to $2.09 on a reported basis and $2.03 to $2.07 on an adjusted basis. This represents full year adjusted EPS growth of 18 to 20 percent. We continue to generate tremendous free cash flow which gives us confidence to increase our full year 2007 free cash flow range to 230 million to 250 million dollars,” Hogan said. “We expect our positive performance momentum to continue despite North American residential weakness. We anticipate continued softness in the North American residential market, which impacts our Water business, and continued recovery in the electronics markets we serve.
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“As we look ahead to 2008, we believe the productivity and growth actions we’re taking in 2007 will help ensure another strong year of performance for Pentair. We anticipate total revenue growth of 4 to 5 percent, as our global growth initiatives in international, commercial, industrial and municipal markets should offset the softness of the North American residential market,” said Hogan. “This sales growth, combined with carry-over 2007 productivity actions, more aggressive sourcing efforts, reduction in our manufacturing fixed cost structure, and an emphasis on reducing our general and administrative structure globally should position us to deliver EPS in the range of $2.25 to $2.40 in 2008. Furthermore, we continue to drive working capital performance and expect full year 2008 free cash flow to be at least 100 percent conversion of net income,” he concluded.
Earnings Conference Call
Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the Company’s performance and Q4 and 2008 guidance on a two-way conference call with investors at 12:00 p.m. Eastern today. Reconciliation of any non-GAAP financial measures are set forth in the attachments to this third quarter 2007 earnings release and in the third quarter 2007 earning release conference call presentation, both of which can be found at Pentair’s web site (www.pentair.com). Related financial charts and certain other information to be discussed on the conference call will be available on the company’s website shortly before the conference call. The web cast and presentation will be archived at the same site following the conclusion of the conference call.
Caution concerning forward-looking statements
Any statements made about the company’s anticipated financial results are forward-looking statements subject to risks and uncertainties such as continued economic growth, including: the strength of housing and related markets; the ability to integrate acquisitions successfully and the risk that expected synergies may not be fully realized or may take longer to realize than expected; the ability to successfully limit any judgment arising out of the Horizon litigation; foreign currency effects; retail and industrial demand; product introductions; and, pricing and other competitive pressures. Forward-looking statements included herein are made as of the date hereof, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results.
About Pentair, Inc.
Pentair (www.pentair.com) is a diversified operating company headquartered in Minnesota. Its Water Group is a global leader in providing innovative products and systems used worldwide in the movement, treatment, storage and enjoyment of water. Pentair’s Technical Products Group is a leader in the global enclosures and thermal management markets, designing and manufacturing thermal management products and standard, modified, and custom enclosures that house and protect sensitive electronics and electrical components. With 2006 revenues of $3.15 billion, Pentair employs approximately 15,000 people worldwide.
Pentair Contacts: | ||
| Todd Gleason | Rachael Jarosh | |
| Vice President, Investor Relations | Director, Communications | |
| Tel.: (763) 656-5570 | Tel.: (763) 656-5280 | |
E-mail:todd.gleason@pentair.com | E-mail:rachael.jarosh@pentair.com |
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Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Condensed Consolidated Statements of Income (Unaudited)
| Three months ended | Nine months ended | |||||||||||||||
| September 29 | September 30 | September 29 | September 30 | |||||||||||||
| In thousands, except per-share data | 2007 | 2006 | 2007 | 2006 | ||||||||||||
| Net sales | $ | 837,834 | $ | 778,020 | $ | 2,568,474 | $ | 2,411,431 | ||||||||
| Cost of goods sold | 591,667 | 565,533 | 1,801,459 | 1,713,747 | ||||||||||||
| Gross profit | 246,167 | 212,487 | 767,015 | 697,684 | ||||||||||||
% of net sales | 29.4 | % | 27.3 | % | 29.8 | % | 28.9 | % | ||||||||
| Selling, general and administrative | 140,745 | 137,923 | 436,837 | 406,843 | ||||||||||||
% of net sales | 16.8 | % | 17.7 | % | 17.0 | % | 16.9 | % | ||||||||
| Research and development | 14,446 | 14,271 | 44,204 | 44,017 | ||||||||||||
% of net sales | 1.7 | % | 1.9 | % | 1.7 | % | 1.8 | % | ||||||||
| Operating income | 90,976 | 60,293 | 285,974 | 246,824 | ||||||||||||
% of net sales | 10.9 | % | 7.7 | % | 11.1 | % | 10.2 | % | ||||||||
| Gain on sale of investment | — | 167 | — | 167 | ||||||||||||
| Net interest expense | 18,836 | 13,024 | 52,841 | 38,861 | ||||||||||||
% of net sales | 2.2 | % | 1.7 | % | 2.0 | % | 1.6 | % | ||||||||
| Income from continuing operations before income taxes | 72,140 | 47,436 | 233,133 | 208,130 | ||||||||||||
% of net sales | 8.7 | % | 6.1 | % | 9.1 | % | 8.6 | % | ||||||||
| Provision for income taxes | 14,096 | 13,995 | 70,958 | 62,985 | ||||||||||||
Effective tax rate | 19.5 | % | 29.5 | % | 30.4 | % | 30.3 | % | ||||||||
| Income from continuing operations | 58,044 | 33,441 | 162,175 | 145,145 | ||||||||||||
| Gain (loss) on disposal of discontinued operations, net of tax | — | 1,400 | 207 | (51 | ) | |||||||||||
| Net income | $ | 58,044 | $ | 34,841 | $ | 162,382 | $ | 145,094 | ||||||||
Earnings (loss) per common share | ||||||||||||||||
Basic | ||||||||||||||||
| Continuing operations | $ | 0.59 | $ | 0.34 | $ | 1.64 | $ | 1.45 | ||||||||
| Discontinued operations | — | 0.01 | — | — | ||||||||||||
| Basic earnings per common share | $ | 0.59 | $ | 0.35 | $ | 1.64 | $ | 1.45 | ||||||||
Diluted | ||||||||||||||||
| Continuing operations | $ | 0.58 | $ | 0.33 | $ | 1.62 | $ | 1.42 | ||||||||
| Discontinued operations | — | 0.01 | — | — | ||||||||||||
| Diluted earnings per common share | $ | 0.58 | $ | 0.34 | $ | 1.62 | $ | 1.42 | ||||||||
Weighted average common shares outstanding | ||||||||||||||||
| Basic | 98,747 | 99,419 | 98,859 | 100,133 | ||||||||||||
| Diluted | 100,365 | 101,062 | 100,339 | 101,998 | ||||||||||||
Cash dividends declared per common share | $ | 0.15 | $ | 0.14 | $ | 0.45 | $ | 0.42 | ||||||||
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Pentair, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited)
| September 29 | December 31 | September 30 | ||||||||||
| In thousands | 2007 | 2006 | 2006 | |||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
| Cash and cash equivalents | $ | 56,555 | $ | 54,820 | $ | 45,153 | ||||||
| Accounts and notes receivable, net | 479,915 | 422,134 | 454,255 | |||||||||
| Inventories | 414,302 | 398,857 | 397,637 | |||||||||
| Deferred tax assets | 53,057 | 50,578 | 46,040 | |||||||||
| Prepaid expenses and other current assets | 48,512 | 31,239 | 28,736 | |||||||||
| Total current assets | 1,052,341 | 957,628 | 971,821 | |||||||||
Property, plant and equipment, net | 358,138 | 330,372 | 312,295 | |||||||||
Other assets | ||||||||||||
| Goodwill | 2,006,426 | 1,718,771 | 1,732,410 | |||||||||
| Intangibles, net | 492,882 | 287,011 | 261,261 | |||||||||
| Other | 77,084 | 71,197 | 77,386 | |||||||||
| Total other assets | 2,576,392 | 2,076,979 | 2,071,057 | |||||||||
Total assets | $ | 3,986,871 | $ | 3,364,979 | $ | 3,355,173 | ||||||
Liabilities and Shareholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
| Short-term borrowings | $ | 4,800 | $ | 14,563 | $ | — | ||||||
| Current maturities of long-term debt | 5,099 | 7,625 | 6,912 | |||||||||
| Accounts payable | 208,505 | 206,286 | 191,206 | |||||||||
| Employee compensation and benefits | 107,828 | 88,882 | 93,431 | |||||||||
| Current pension and post-retirement benefits | 7,918 | 7,918 | — | |||||||||
| Accrued product claims and warranties | 47,719 | 44,093 | 44,016 | |||||||||
| Income taxes | 10,439 | 22,493 | — | |||||||||
| Accrued rebates and sales incentives | 37,115 | 39,419 | 41,982 | |||||||||
| Other current liabilities | 112,673 | 90,003 | 95,122 | |||||||||
| Total current liabilities | 542,096 | 521,282 | 472,669 | |||||||||
Other liabilities | ||||||||||||
| Long-term debt | 1,103,023 | 721,873 | 788,066 | |||||||||
| Pension and other retirement compensation | 222,098 | 207,676 | 171,063 | |||||||||
| Post-retirement medical and other benefits | 46,499 | 47,842 | 73,398 | |||||||||
| Long-term income taxes payable | 18,214 | — | — | |||||||||
| Deferred tax liabilities | 136,886 | 109,781 | 124,393 | |||||||||
| Other non-current liabilities | 89,898 | 86,526 | 84,783 | |||||||||
| Total liabilities | 2,158,714 | 1,694,980 | 1,714,372 | |||||||||
Shareholders’ equity | 1,828,157 | 1,669,999 | 1,640,801 | |||||||||
Total liabilities and shareholders’ equity | $ | 3,986,871 | $ | 3,364,979 | $ | 3,355,173 | ||||||
| Days sales in accounts receivable (13 month moving average) | 54 | 54 | 54 | |||||||||
| Days inventory on hand (13 month moving average) | 78 | 76 | 73 | |||||||||
| Days in accounts payable (13 month moving average) | 54 | 56 | 56 | |||||||||
| Debt/total capital | 37.8 | % | 30.8 | % | 32.6 | % | ||||||
| NOTE: | The Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48,Accounting for Uncertainty in Income Taxes — an interpretation of FASB No. 109(“FIN 48”) on January 1, 2007. As a result of adoption of FIN 48, the Company recorded an adjustment to retained earnings of $2.9 million in the first quarter of 2007. Additionally, the Company has added the line “Long-term income taxes payable” to the Company’s Condensed Consolidated Balance Sheets to report its total long-term liability for unrecognized tax benefits. |
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Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Nine months ended | ||||||||
| September 29 | September 30 | |||||||
| In thousands | 2007 | 2006 | ||||||
Operating activities | ||||||||
| Net income | $ | 162,382 | $ | 145,094 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| (Gain) loss on disposal of discontinued operations | (207 | ) | 51 | |||||
| Depreciation | 45,786 | 44,762 | ||||||
| Amortization | 18,665 | 13,955 | ||||||
| Deferred income taxes | (18,883 | ) | (89 | ) | ||||
| Stock compensation | 17,071 | 18,058 | ||||||
| Excess tax benefits from stock-based compensation | (2,706 | ) | (2,677 | ) | ||||
| Gain on sale of assets | (2,195 | ) | (167 | ) | ||||
Changes in assets and liabilities, net of effects of business acquisitions and dispositions | ||||||||
| Accounts and notes receivable | (27,627 | ) | (23,210 | ) | ||||
| Inventories | 10,620 | (43,360 | ) | |||||
| Prepaid expenses and other current assets | (8,673 | ) | (3,671 | ) | ||||
| Accounts payable | 168 | (22,136 | ) | |||||
| Employee compensation and benefits | 2,835 | (7,153 | ) | |||||
| Accrued product claims and warranties | 3,199 | 547 | ||||||
| Income taxes | (4,813 | ) | (14,800 | ) | ||||
| Other current liabilities | 16,634 | (2,263 | ) | |||||
| Pension and post-retirement benefits | 7,924 | 14,365 | ||||||
| Other assets and liabilities | 9,153 | 8,546 | ||||||
| Net cash provided by continuing operations | 229,333 | 125,852 | ||||||
| Net cash provided by operating activities of discontinued operations | — | 48 | ||||||
| Net cash provided by operating activities | 229,333 | 125,900 | ||||||
Investing activities | ||||||||
| Capital expenditures | (45,163 | ) | (33,311 | ) | ||||
| Proceeds from sale of property and equipment | 5,136 | 497 | ||||||
| Acquisitions, net of cash acquired | (486,264 | ) | (22,879 | ) | ||||
| Divestitures | — | (24,007 | ) | |||||
| Equity Investments | — | 167 | ||||||
| Other | (4,044 | ) | (6,823 | ) | ||||
| Net cash used for investing activities | (530,335 | ) | (86,356 | ) | ||||
Financing activities | ||||||||
| Net short-term borrowings | (10,378 | ) | — | |||||
| Proceeds from long-term debt | 1,147,132 | 568,996 | ||||||
| Repayment of long-term debt | (770,822 | ) | (526,599 | ) | ||||
| Debt issuance costs | (1,876 | ) | — | |||||
| Excess tax benefits from stock-based compensation | 2,706 | 2,677 | ||||||
| Proceeds from exercise of stock options | 5,512 | 3,126 | ||||||
| Repurchases of common stock | (27,119 | ) | (50,000 | ) | ||||
| Dividends paid | (44,986 | ) | (42,616 | ) | ||||
| Net cash provided by (used for) financing activities | 300,169 | (44,416 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 2,568 | 1,525 | ||||||
Change in cash and cash equivalents | 1,735 | (3,347 | ) | |||||
Cash and cash equivalents, beginning of period | 54,820 | 48,500 | ||||||
Cash and cash equivalents, end of period | $ | 56,555 | $ | 45,153 | ||||
Free cash flow | ||||||||
| Net cash provided by operating activities | $ | 229,333 | $ | 125,900 | ||||
| Less capital expenditures | (45,163 | ) | (33,311 | ) | ||||
| Proceeds from sale of property and equipment | 5,136 | 497 | ||||||
Free cash flow | $ | 189,306 | $ | 93,086 | ||||
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Pentair, Inc. and Subsidiaries
Supplemental Financial Information by Reportable Business Segment (Unaudited)
Supplemental Financial Information by Reportable Business Segment (Unaudited)
| First Qtr | Second Qtr | Third Qtr | Nine Months | |||||||||||||
| In thousands | 2007 | 2007 | 2007 | 2007 | ||||||||||||
Net sales to external customers | ||||||||||||||||
| Water | $ | 555,412 | $ | 665,495 | $ | 562,133 | $ | 1,783,040 | ||||||||
| Technical Products | 252,583 | 257,150 | 275,701 | 785,434 | ||||||||||||
Consolidated | $ | 807,995 | $ | 922,645 | $ | 837,834 | $ | 2,568,474 | ||||||||
Intersegment sales | ||||||||||||||||
| Water | $ | 214 | $ | 46 | $ | 207 | $ | 467 | ||||||||
| Technical Products | 896 | 1,689 | 1,526 | 4,111 | ||||||||||||
| Other | (1,110 | ) | (1,735 | ) | (1,733 | ) | (4,578 | ) | ||||||||
Consolidated | $ | — | $ | — | $ | — | $ | — | ||||||||
Operating income (loss) | ||||||||||||||||
| Water | $ | 60,879 | $ | 90,978 | $ | 53,685 | $ | 205,542 | ||||||||
| Technical Products | 31,631 | 36,140 | 46,237 | 114,008 | ||||||||||||
| Other | (12,357 | ) | (12,273 | ) | (8,946 | ) | (33,576 | ) | ||||||||
Consolidated | $ | 80,153 | $ | 114,845 | $ | 90,976 | $ | 285,974 | ||||||||
Operating income as a percent of net sales | ||||||||||||||||
| Water | 11.0 | % | 13.7 | % | 9.6 | % | 11.5 | % | ||||||||
| Technical Products | 12.5 | % | 14.1 | % | 16.8 | % | 14.5 | % | ||||||||
Consolidated | 9.9 | % | 12.4 | % | 10.9 | % | 11.1 | % | ||||||||
| First Qtr | Second Qtr | Third Qtr | Nine Months | |||||||||||||
| In thousands | 2006 | 2006 | 2006 | 2006 | ||||||||||||
Net sales to external customers | ||||||||||||||||
| Water | $ | 517,169 | $ | 605,516 | $ | 531,703 | $ | 1,654,388 | ||||||||
| Technical Products | 254,220 | 256,506 | 246,317 | 757,043 | ||||||||||||
Consolidated | $ | 771,389 | $ | 862,022 | $ | 778,020 | $ | 2,411,431 | ||||||||
Intersegment sales | ||||||||||||||||
| Water | $ | 50 | $ | 55 | $ | 140 | $ | 245 | ||||||||
| Technical Products | 889 | 1,312 | 1,133 | 3,334 | ||||||||||||
| Other | (939 | ) | (1,367 | ) | (1,273 | ) | (3,579 | ) | ||||||||
Consolidated | $ | — | $ | — | $ | — | $ | — | ||||||||
Operating income (loss) | ||||||||||||||||
| Water | $ | 55,587 | $ | 84,191 | $ | 36,226 | $ | 176,004 | ||||||||
| Technical Products | 37,704 | 39,678 | 37,050 | 114,432 | ||||||||||||
| Other | (14,735 | ) | (15,894 | ) | (12,983 | ) | (43,612 | ) | ||||||||
Consolidated | $ | 78,556 | $ | 107,975 | $ | 60,293 | $ | 246,824 | ||||||||
Operating income as a percent of net sales | ||||||||||||||||
| Water | 10.8 | % | 13.9 | % | 6.8 | % | 10.6 | % | ||||||||
| Technical Products | 14.8 | % | 15.5 | % | 15.0 | % | 15.1 | % | ||||||||
Consolidated | 10.2 | % | 12.5 | % | 7.7 | % | 10.2 | % | ||||||||
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Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2007 to the “Adjusted” non-GAAP
excluding the effect of 2007 adjustments (Unaudited)
Reconciliation of the GAAP “As Reported” year ending December 31, 2007 to the “Adjusted” non-GAAP
excluding the effect of 2007 adjustments (Unaudited)
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | ||||||||||||||||||||
| In thousands, except per-share data | 2007 | 2007 | 2007 | 2007 forecast | 2007 forecast | |||||||||||||||||||
| Net sales | $ | 807,995 | $ | 922,645 | $ | 837,834 | $ | 795,000-$820,000 | $ | 3,375M-$3,400M | ||||||||||||||
| Operating income — as reported | 80,153 | 114,845 | 90,976 | 83,000 - 90,000 | ~370M | + | ||||||||||||||||||
% of net sales | 9.9 | % | 12.4 | % | 10.9 | % | ~10.4% - 11.0 | % | ~ 11.0 | % | ||||||||||||||
| Adjustments | — | — | 9,192 | ~5,000 | ~15M | + | ||||||||||||||||||
| Operating income — as adjusted | 80,153 | 114,845 | 100,168 | 88,000 - 95,000 | ~385M | + | ||||||||||||||||||
% of net sales | 9.9 | % | 12.4 | % | 12.0 | % | ~11% - 11.5 | % | ~11.5 | % | ||||||||||||||
| Income from continuing operations — as reported | 42,130 | 62,001 | 58,044 | 42,200 - 47,200 | 205M - 210M | |||||||||||||||||||
| Adjustments — tax affected | — | — | 6,246 | ~3,200 | ~10M | |||||||||||||||||||
| Non-recurring tax items | (145 | ) | (83 | ) | (11,517 | ) | — | ~(12M | ) | |||||||||||||||
| Income from continuing operations — as adjusted | 41,985 | 61,918 | 52,773 | 45,400 - 50,400 | 203M - 208M | |||||||||||||||||||
Continuing earnings per common share — diluted | ||||||||||||||||||||||||
| Diluted earnings per common share — as reported | $ | 0.42 | $ | 0.62 | $ | 0.58 | $ | 0.42 - $0.47 | $ | 2.04 - $2.09 | ||||||||||||||
| Adjustments | — | — | (0.05 | ) | 0.03 - 0.04 | (0.01) - (0.02 | ) | |||||||||||||||||
| Diluted earnings per common share — as adjusted | $ | 0.42 | $ | 0.62 | $ | 0.53 | $ | 0.46 - $0.50 | $ | 2.03 - $2.07 | ||||||||||||||
| Weighted average common shares outstanding - Diluted | 100,271 | 100,371 | 100,365 | 100,400 | 100,400 | |||||||||||||||||||
Pentair, Inc. and Subsidiaries Reconciliation of the GAAP “As Reported” year ending December 31, 2006 to the “Adjusted” non-GAAP excluding the effect of 2006 adjustments (Unaudited) | ||||||||||||||||||||||||
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | ||||||||||||||||||||
| In thousands, except per-share data | 2006 | 2006 | 2006 | 2006 | 2006 | |||||||||||||||||||
| Net sales | $ | 771,389 | $ | 862,022 | $ | 778,020 | $ | 743,038 | $ | 3,154,469 | ||||||||||||||
| Operating income — as reported | 78,556 | 107,975 | 60,293 | 60,162 | 306,986 | |||||||||||||||||||
% of net sales | 10.2 | % | 12.5 | % | 7.7 | % | 8.1 | % | 9.7 | % | ||||||||||||||
| Adjustments | — | — | 16,949 | — | 16,949 | |||||||||||||||||||
| Operating income — as adjusted | 78,556 | 107,975 | 77,242 | 60,162 | 323,935 | |||||||||||||||||||
% of net sales | 10.2 | % | 12.5 | % | 9.9 | % | 8.1 | % | 10.3 | % | ||||||||||||||
| Income from continuing operations — as reported | 43,071 | 68,633 | 33,441 | 38,622 | 183,767 | |||||||||||||||||||
| Adjustments — tax affected | — | — | 10,847 | — | 10,847 | |||||||||||||||||||
| Non-recurring tax items | (878 | ) | (8,023 | ) | (3,080 | ) | (8,285 | ) | (20,266 | ) | ||||||||||||||
| Income from continuing operations — as adjusted | 42,193 | 60,610 | 41,208 | 30,337 | 174,348 | |||||||||||||||||||
Continuing earnings per common share — diluted | ||||||||||||||||||||||||
| Diluted earnings per common share — as reported | $ | 0.42 | $ | 0.67 | $ | 0.33 | $ | 0.39 | $ | 1.81 | ||||||||||||||
| Adjustments | (0.01 | ) | (0.08 | ) | 0.08 | (0.08 | ) | (0.09 | ) | |||||||||||||||
| Diluted earnings per common share — as adjusted | $ | 0.41 | $ | 0.59 | $ | 0.41 | $ | 0.31 | $ | 1.72 | ||||||||||||||
| Weighted average common shares outstanding - Diluted | 102,492 | 102,429 | 101,062 | 100,233 | 101,371 | |||||||||||||||||||
(more)
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Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2007 to the “Adjusted” non-GAAP
excluding the effect of 2007 adjustments (Unaudited)
Reconciliation of the GAAP “As Reported” year ending December 31, 2007 to the “Adjusted” non-GAAP
excluding the effect of 2007 adjustments (Unaudited)
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | ||||||||||||||||
| In thousands | 2007 | 2007 | 2007 | 2007 forecast | 2007 forecast | |||||||||||||||
Water | ||||||||||||||||||||
| Net sales | $ | 555,412 | $ | 665,495 | $ | 562,133 | $ | 540,000 - $550,000 | $ | 2,320M - $2,330M | ||||||||||
| Operating income — as reported | 60,879 | 90,978 | 53,685 | 59,000 - 61,000 | ~266M | + | ||||||||||||||
% of net sales | 11.0 | % | 13.7 | % | 9.6 | % | ~ 11.0 | % | ~11.0% - 11.5 | % | ||||||||||
| Adjustments | — | — | 9,843 | — | ~10M | |||||||||||||||
| Operating income — as adjusted | 60,879 | 90,978 | 63,528 | 59,000 - 61,000 | ~276M | + | ||||||||||||||
% of net sales | 11.0 | % | 13.7 | % | 11.3 | % | ~ 11.0 | % | ~12.0 | % | ||||||||||
Technical Products | ||||||||||||||||||||
| Net sales | $ | 252,583 | $ | 257,150 | $ | 275,701 | $ | 260,000 - $265,000 | $ | 1,000M - $1,100M | ||||||||||
| Operating income — as reported | 31,631 | 36,140 | 46,237 | 34,100 - 35,700 | ~150M | + | ||||||||||||||
% of net sales | 12.5 | % | 14.1 | % | 16.8 | % | ~13.0% - 13.5 | % | ~14.0% - 14.5 | % | ||||||||||
| Adjustments | — | — | (652 | ) | ~5,000 | ~4.5M | ||||||||||||||
| Operating income — as adjusted | 31,631 | 36,140 | 45,585 | 39,100 - 40,700 | ~155M | + | ||||||||||||||
% of net sales | 12.5 | % | 14.1 | % | 16.5 | % | ~15.0% - 15.5 | % | ~14.5 | % | ||||||||||
Pentair, Inc. and Subsidiaries Reconciliation of the GAAP “As Reported” year ending December 31, 2006 to the “Adjusted” non-GAAP excluding the effect of 2006 adjustments (Unaudited) | ||||||||||||||||||||
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | ||||||||||||||||
| In thousands | 2006 | 2006 | 2006 | 2006 | 2006 | |||||||||||||||
Water | ||||||||||||||||||||
| Net sales | $ | 517,169 | $ | 605,516 | $ | 531,703 | $ | 500,837 | $ | 2,155,225 | ||||||||||
| Operating income — as reported | 55,587 | 84,191 | 36,226 | 36,494 | 212,498 | |||||||||||||||
% of net sales | 10.7 | % | 13.9 | % | 6.8 | % | 7.3 | % | 9.9 | % | ||||||||||
| Adjustments | — | — | 14,906 | — | 14,906 | |||||||||||||||
| Operating income — as adjusted | 55,587 | 84,191 | 51,132 | 36,494 | 227,404 | |||||||||||||||
% of net sales | 10.7 | % | 13.9 | % | 9.6 | % | 7.3 | % | 10.6 | % | ||||||||||
Technical Products | ||||||||||||||||||||
| Net sales | $ | 254,220 | $ | 256,506 | $ | 246,317 | $ | 242,201 | $ | 999,244 | ||||||||||
| Operating income — as reported | 37,704 | 39,678 | 37,050 | 34,473 | 148,905 | |||||||||||||||
% of net sales | 14.8 | % | 15.5 | % | 15.0 | % | 14.2 | % | 14.9 | % | ||||||||||
| Adjustments | — | — | — | — | — | |||||||||||||||
| Operating income — as adjusted | 37,704 | 39,678 | 37,050 | 34,473 | 148,905 | |||||||||||||||
% of net sales | 14.8 | % | 15.5 | % | 15.0 | % | 14.2 | % | 14.9 | % | ||||||||||