Pentair (PNR) 8-K Pentair Reports First Quarter Net Income Per Share from Continuing Operations of $0.18; Adjusted EPS of $0.20

Exhibit 99.1

Pentair, Inc.
5500 Wayzata Blvd., Suite 800
MInneapolis, MN 55416
763 545 1730 Tel
763 656 5400 Fax

News Release

Pentair Reports First Quarter Net Income Per Share from
Continuing Operations of $0.18; Adjusted EPS of $0.20

• Reports first quarter sales of $634 million, down 24 percent year-over-year.

• Effectively executing against restructuring actions as all events on or ahead of schedule.

• Updates full year EPS guidance to exceed $1.40 on full year sales outlook of down approximately 20 percent.

• Full year free cash flow expected to be at least $225 million as company is $45 million ahead of 2008 levels exiting first quarter.

All financial information and period-to-period references are on a continuing operations basis unless otherwise noted. Reconciliations to discontinued operations as well as GAAP and Non-GAAP reconciliations are in the attached financial tables.

MINNEAPOLIS, Minn. — April 21, 2009 — Pentair, Inc. (NYSE: PNR) today announced first quarter 2009 net earnings per diluted share from continuing operations (EPS) of $0.18. This represents a decrease of 66 percent as compared to the $0.53 of EPS in the first quarter last year. Current period results include a negative $0.02 per share impact from restructuring charges taken late in the quarter related to additional headcount reductions. Adjusting for these items, first quarter 2009 EPS was $0.20, which met the low end of the company’s guidance range.

Total company sales decreased 24 percent to $634 million, compared with $830 million in the first quarter of 2008. The company delivered first quarter operating income of $37 million. On an adjusted basis, the company delivered operating income of $40 million versus $97 million in the year-ago quarter. The company’s adjusted operating income excludes the impact of additional severance charges associated with the first quarter elimination of 340 positions not included in prior restructuring. Overall, adjusted operating margins for the first quarter contracted 540 basis points to 6.3 percent. The positive impact from productivity and price could not offset the significant negative impact related to lower volumes.

Total company free cash flow was a usage of $33 million for the quarter versus a usage of $78 million for the year-earlier quarter. The company said it remains on track to achieve free cash flow greater than $225 million for 2009, driven by improvements in working capital.

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“Most of our major markets were dismal throughout the first quarter as many of our customers retrenched in reaction to the global recession. Fortunately, our execution against our aggressive cost reduction plans is yielding solid benefits. We delivered first quarter adjusted EPS of 20 cents, which matched the low-end of our guidance range, in spite of sales declining 24 percent which was ten percentage points worse than our sales outlook,” said Randall J. Hogan, Pentair chairman and chief executive officer.

First Quarter Business Highlights

The Water Groupdelivered $424 million in sales, a 22 percent decline year-over-year. Sales were down 21 percent excluding the formation of the Pentair Residential Filtration (PRF) business with General Electric’s (GE) Water and Process Technologies unit, which added three points of growth, and foreign exchange, which reduced sales by four points.

• Global Flow Technologies sales were down 18 percent versus the year-ago quarter, as sales increases of pump equipment for global commercial markets did not outpace declines in residential and agricultural markets.

• Global Filtration sales were down 8 percent, or down 19 percent excluding the increased sales associated with the formation of PRF. Sales increases in desalination markets did not offset declines in residential, industrial and foodservice markets.

• Global Pool and Spa sales were down 45 percent as the prolonged decline in North American residential pool and spa markets continued to impact sales.

• International Water sales declined over 20 percent as growth in Asia-Pacific did not outpace organic sales declines of 23 percent in Europe, Middle East and Africa.

The Water Group’s first quarter reported operating income totaled $27 million, down 59 percent as compared to $65 million in the same period last year. In the quarter, the Water Group had $1 million in pre-tax restructuring charges associated with severance from recently announced headcount reductions. Excluding these items, adjusted operating income was $28 million, down 56 percent versus $65 million a year ago. Adjusted operating margins of 6.7 percent were down 520 basis points as benefits from productivity and price did not offset the negative impact from volume declines, inflation, pay-as-you-go restructuring costs, and integration expenses associated with the formation of PRF with GE.

Technical Productsdelivered first quarter 2009 sales of $210 million, a decrease of 26 percent versus the year-earlier period. Sales were down 24 percent excluding the impact of foreign exchange.

• Global Electrical sales were down 25 percent as global industrial markets dramatically slowed their capital projects and distributors aggressively reduced inventory levels.

• Global Electronic sales were down 27 percent. In Asia, electronic sales were down 3 percent while sales in Europe were down 15 percent in local currencies, and North American sales were down 32 percent.

Technical Products’ first quarter reported operating income totaled $20 million, down 55 percent compared to $45 million in the same quarter last year. Adjusting for a restructuring charge, operating income was $21 million. Adjusted operating margins were 10.1 percent, down 580 basis points versus the first quarter 2008. In the quarter, the benefits from productivity and price did not offset the negative impact from volume declines, inflation and foreign exchange.

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“Clearly, we are wrestling with a worse than expected global economic downturn that has had a dramatic impact on us and most of our markets. First quarter sales were much lower than expected and it is prudent we plan for a challenging sales environment for the balance of 2009,” Hogan said. “However, the tremendous progress we are making to reduce fixed and variable cost is encouraging. We believe that this progress, coupled with our focus to generate solid free cash flow, positions the company for significant upside once markets stabilize and then improve.”

Outlook

The company introduces its second quarter reported 2009 EPS guidance range of $0.32 to $0.42. Adjusting for charges associated with the recently announced early redemption of its bonds, second quarter EPS is expected to be $0.35 to $0.45, down approximately 43 percent year-over-year when using the midpoint of the guidance range. Second quarter sales are expected to be down over 20 percent.

The company updates its full year 2009 EPS guidance to equal or to exceed $1.40, which would be down 46 percent when compared to reported full year 2008 EPS or down 36 percent when 2008 EPS is adjusted for non-recurring items (see attached 2008 reconciliation table). The company expects full year 2009 EPS on both a reported and adjusted basis will be comparable as restructuring and other charges in 2009 are expected to be similar in size to anticipated gains from other nonrecurring items.

“Many markets are faring much worse than the sober outlook planned upon and our updated guidance reflects this,” said Hogan. “We now expect the next few quarters will demonstrate only modest seasonal benefits and that sales will be down over 20 percent for 2009. Our full year EPS guidance of at least $1.40 provides investors with a foundation which we believe will be achieved or exceeded through continued solid execution despite these unprecedented times.”

“Further, we believe our first quarter earnings — and the sales decline that drove it — represents a low-point for the company. While it is clearly too early to forecast 2010, the benefits we expect to receive from our productivity and cost actions and cash flow generation position us well to grow earnings when markets stabilize,” Hogan added.

Earnings Conference Call

Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company’s performance and second quarter and full year 2009 guidance on a two-way conference call with investors and a live audio webcast at 12:00 p.m. Eastern today. Reconciliation of non-GAAP financial measures are set forth in the attachments to this first quarter 2009 earnings release and in the first quarter 2009 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.

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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 the breadth and severity of the global economic downturn; the strength of housing and related markets; the ability to implement our restructuring and other cost reduction plans successfully and the risk that expected benefits may not be fully realized or may take longer to realize than expected; foreign currency effects; retail and industrial demand; product introductions; and pricing and other competitive pressures, as well as other risk factors set forth in our SEC filings. 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 2008 revenues of $3.35 billion, Pentair employs approximately 13,400 people worldwide.

Pentair Contacts:
Todd Gleason
Vice President, Strategic Planning & Investor Relations
Tel.: (763) 656-5570
E-mail: todd.gleason@pentair.com

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Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)

	Three months ended
	March 28			March 29
In thousands, except per-share data	2009			2008
Net sales	$	633,840		$	830,146
Cost of goods sold		464,608			579,452
Gross profit		169,232			250,694
% of net sales		26.7	%		30.2	%
Selling, general and administrative		117,275			138,103
% of net sales		18.5	%		16.6	%
Research and development		14,743			15,264
% of net sales		2.3	%		1.9	%
Operating income		37,214			97,327
% of net sales		5.9	%		11.7	%
Other (income) expense:
Equity losses of unconsolidated subsidiary		277			917
Net interest expense		11,784			16,089
% of net sales		1.9	%		1.9	%
Income from continuing operations before income taxes and noncontrolling interest		25,153			80,321
% of net sales		4.0	%		9.7	%
Provision for income taxes		7,432			27,858
Effective tax rate		29.5	%		34.7	%
Income from continuing operations		17,721			52,463
Loss from discontinued operations, net of tax		—			(1,036	)
Gain (loss) on disposal of discontinued operations, net of tax		10			(7,137	)
Net income before noncontrolling interest		17,731			44,290
Noncontrolling interest		466			—
Net income attributable to Pentair, Inc.	$	17,265		$	44,290
Net income from continuing operations attributable to Pentair, Inc.	$	17,255		$	52,463
Earnings (loss) per common share attributable to Pentair, Inc.
Basic
Continuing operations	$	0.18		$	0.53
Discontinued operations		—			(0.08	)
Basic earnings per common share	$	0.18		$	0.45
Diluted
Continuing operations	$	0.18		$	0.53
Discontinued operations		—			(0.08	)
Diluted earnings per common share	$	0.18		$	0.45
Weighted average common shares outstanding
Basic		97,375			98,280
Diluted		97,966			99,558
Cash dividends declared per common share	$	0.18		$	0.17

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Pentair, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)

	March 28		December 31		March 29
In thousands	2009		2008		2008
Assets
Current assets
Cash and cash equivalents	$	34,708	$	39,344	$	62,284
Accounts and notes receivable, net		505,196		461,081		609,960
Inventories		393,201		417,287		402,618
Deferred tax assets		51,268		51,354		54,275
Prepaid expenses and other current assets		47,848		63,113		43,125
Current assets of discontinued operations		—		—		20,306
Total current assets		1,032,221		1,032,179		1,192,568
Property, plant and equipment, net		337,898		343,881		364,068
Other assets
Goodwill		2,092,825		2,101,851		2,024,680
Intangibles, net		504,921		515,508		493,564
Other		56,964		59,794		81,447
Non-current assets of discontinued operations		—		—		14,061
Total other assets		2,654,710		2,677,153		2,613,752
Total assets	$	4,024,829	$	4,053,213	$	4,170,388
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	7,404	$	—	$	7,005
Current maturities of long-term debt		630		624		5,209
Accounts payable		196,767		217,898		233,993
Employee compensation and benefits		75,664		90,210		99,364
Current pension and post-retirement benefits		8,890		8,890		8,557
Accrued product claims and warranties		38,639		41,559		45,949
Income taxes		4,312		5,451		34,728
Accrued rebates and sales incentives		20,754		28,897		28,790
Other current liabilities		98,919		104,975		109,278
Current liabilities of discontinued operations		—		—		1,799
Total current liabilities		451,979		498,504		574,672
Other liabilities
Long-term debt		991,807		953,468		1,119,105
Pension and other retirement compensation		270,443		270,139		169,790
Post-retirement medical and other benefits		34,299		34,723		36,179
Long-term income taxes payable		28,076		28,139		24,268
Deferred tax liabilities		145,565		146,559		165,842
Other non-current liabilities		97,260		101,612		105,041
Non-current liabilities of discontinued operations		—		—		1,271
Total liabilities		2,019,429		2,033,144		2,196,168
Shareholders’ equity		2,005,400		2,020,069		1,974,220
Total liabilities and shareholders’ equity	$	4,024,829	$	4,053,213	$	4,170,388
Days sales in accounts receivable (13 month moving average)		60		57		55
Days inventory on hand (13 month moving average)		85		79		74
Days in accounts payable (13 month moving average)		61		59		56

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Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)

	Three months ended
	March 28			March 29
In thousands	2009			2008
Operating activities
Net income attributable to Pentair, Inc.	$	17,265		$	44,290
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss from discontinued operations		—			1,036
(Gain) loss on disposal of discontinued operations		(10	)		7,137
Equity losses of unconsolidated subsidiary		277			917
Noncontrolling interest		466			—
Depreciation		15,170			14,811
Amortization		7,233			6,535
Deferred income taxes		7			(5,836	)
Stock compensation		4,720			6,465
Excess tax benefits from stock-based compensation		(64	)		(378	)
Other		19			(552	)
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		(47,021	)		(137,651	)
Inventories		21,069			(16,196	)
Prepaid expenses and other current assets		15,008			(5,644	)
Accounts payable		(18,052	)		5,893
Employee compensation and benefits		(15,470	)		(16,863	)
Accrued product claims and warranties		(2,797	)		(3,400	)
Income taxes		(922	)		17,923
Other current liabilities		(13,337	)		9,504
Pension and post-retirement benefits		1,801			1,885
Other assets and liabilities		(2,415	)		2,589
Net cash provided by (used for) continuing operations		(17,053	)		(67,535	)
Net cash provided by (used for) operating activities of discontinued operations		—			(2,997	)
Net cash provided by (used for) operating activities		(17,053	)		(70,532	)
Investing activities
Capital expenditures		(15,979	)		(14,042	)
Proceeds from sale of property and equipment		280			3,845
Acquisitions, net of cash acquired or received		—			165
Divestitures		—			29,959
Other		(40	)		—
Net cash provided by (used for) investing activities		(15,739	)		19,927
Financing activities
Net short-term borrowings (repayments)		7,494			(7,272	)
Proceeds from long-term debt		135,000			159,405
Repayment of long-term debt		(96,679	)		(82,766	)
Excess tax benefits from stock-based compensation		64			378
Proceeds from exercise of stock options		680			851
Repurchases of common stock		—			(12,500	)
Dividends paid		(17,710	)		(16,908	)
Net cash provided by (used for) financing activities		28,849			41,188
Effect of exchange rate changes on cash and cash equivalents		(693	)		906
Change in cash and cash equivalents		(4,636	)		(8,511	)
Cash and cash equivalents, beginning of period		39,344			70,795
Cash and cash equivalents, end of period	$	34,708		$	62,284
Free cash flow
Net cash provided by (used for) continuing operations	$	(17,053	)	$	(67,535	)
Capital expenditures		(15,979	)		(14,042	)
Proceeds from sale of property and equipment		280			3,845
Free cash flow	$	(32,752	)	$	(77,732	)

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Pentair, Inc. and Subsidiaries
Supplemental Financial Information by Reportable Business Segment(Unaudited)

	First Qtr			First Qtr
In thousands	2009			2008
Net sales to external customers
Water Group	$	423,932		$	544,686
Technical Products Group		209,908			285,460
Consolidated	$	633,840		$	830,146
Intersegment sales
Water Group	$	289		$	372
Technical Products Group		233			1,138
Other		(522	)		(1,510	)
Consolidated	$	—		$	—
Operating income (loss)
Water Group	$	26,976		$	65,035
Technical Products Group		20,462			45,337
Other		(10,224	)		(13,045	)
Consolidated	$	37,214		$	97,327
Operating income as a percent of net sales
Water Group		6.4	%		11.9	%
Technical Products Group		9.7	%		15.9	%
Consolidated		5.9	%		11.7	%

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Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2009 to the “Adjusted” non-GAAP
excluding the effect of 2009 adjustments (Unaudited)

	First Quarter			Second Quarter		Year
In thousands, except per-share data	2009			2009		2009
Net sales	$	633,840		$	690,000-$720,000	approx $2,700M
Operating income — as reported		37,214			65,000-75,000	approx 252,000
% of net sales		5.9	%	approx 10%		approx 9.3%
Adjustments:
Restructuring & other non-recurring		2,824			—	approx 3,000
Operating income — as adjusted		40,038			65,000-75,000	approx 255,000
% of net sales		6.3	%	approx 10%		approx 9.4%
Net income from continuing operations attributable to Pentair, Inc. — as reported		17,255			31,400-42,800	approx 137,000
Adjustments — tax affected
Restructuring & other non-recurring		1,864			3,000		—
Net income from continuing operations attributable to Pentair, Inc. — as adjusted		19,119			34,400-45,800	approx 137,000
Continuing earnings per common share attributable to Pentair, Inc. — diluted
Diluted earnings per common share — as reported	$	0.18		$	0.32 - $0.42	$1.40 or above
Adjustments		0.02			0.03		—
Diluted earnings per common share — as adjusted	$	0.20		$	0.35 - $0.45	$1.40 or above
Weighted average common shares outstanding — Diluted		97,966		approx 98,000		approx 98,000

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2008 to the “Adjusted” non-GAAP
excluding the effect of 2008 adjustments (Unaudited)

	First Quarter			Second Quarter			Year
In thousands, except per-share data	2008			2008			2008
Net sales	$	830,146		$	898,378		$	3,351,976
Operating income — as reported		97,327			96,547			324,685
% of net sales		11.7	%		10.7	%		9.7	%
Adjustments:
Restructuring and asset impairment		—			2,586			46,170
Horizon settlement		—			20,435			20,435
Operating income — as adjusted		97,327			119,568			391,290
% of net sales		11.7	%		13.3	%		11.7	%
Net income from continuing operations attributable to Pentair, Inc. — as reported		52,463			139,837			256,363
Adjustments — tax affected
Restructuring and asset impairment		—			1,707			30,473
Horizon settlement		—			13,487			13,487
Gain on PRF transaction		—			(85,832	)		(85,832	)
Bond tender		—			—			3,043
Net income from continuing operations attributable to Pentair, Inc. — as adjusted		52,463			69,199			217,534
Continuing earnings per common share attributable to Pentair, Inc. — diluted
Diluted earnings per common share — as reported	$	0.53		$	1.41		$	2.59
Adjustments		—			(0.71	)		(0.39	)
Diluted earnings per common share — as adjusted	$	0.53		$	0.70		$	2.20
Weighted average common shares outstanding — Diluted		99,558			99,509			99,068

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Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2009 to the “Adjusted” non-GAAP
excluding the effect of 2009 adjustments (Unaudited)

	First Quarter			Second Quarter			Year
In thousands	2009			2009			2009
Water
Net sales	$	423,932		$	480,000-$500,000		approx $1,825M
Operating income — as reported		26,976			50,000-55,000			178,500-183,500
% of net sales		6.4	%		10.0% - 11.5	%	approx 10.0%
Adjustments — restructuring		1,464			—		approx 1,500
Operating income — as adjusted		28,440			50,000-55,000			180,000-185,000
% of net sales		6.7	%		10.0% - 11.5	%	approx 10.0%
Technical Products
Net sales	$	209,908		$	210,000-$220,000		approx $875M
Operating income — as reported		20,462			25,000-30,000			114,200-119,800
% of net sales		9.7	%		11.4% - 14.3	%	approx 13.5%
Adjustments — restructuring		792			—		approx 800
Operating income — as adjusted		21,254			25,000-30,000			115,000-120,000
% of net sales		10.1	%		11.4% - 14.3	%	approx 13.5%

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2008 to the “Adjusted” non-GAAP
excluding the effect of 2008 adjustments (Unaudited)

	First Quarter			Second Quarter			Year
In thousands	2008			2008			2008
Water
Net sales	$	544,686		$	594,118		$	2,206,142
Operating income — as reported		65,035			59,475			206,357
% of net sales		11.9	%		10.0	%		9.4	%
Adjustments Restructuring and asset impairment		—			2,157			35,223
Horizon settlement		—			20,435			20,435
Operating income — as adjusted		65,035			82,067			262,015
% of net sales		11.9	%		13.8	%		11.9	%
Technical Products
Net sales	$	285,460		$	304,260		$	1,145,834
Operating income — as reported		45,337			49,732			169,315
% of net sales		15.9	%		16.3	%		14.8	%
Adjustments — restructuring and asset impairment		—			429			8,271
Operating income — as adjusted		45,337			50,161			177,586
% of net sales		15.9	%		16.4	%		15.5	%

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