MINNEAPOLIS, Oct. 17 /PRNewswire/ -- Pentair, Inc. (NYSE: PNR) reported
today that its revenues for the third quarter of 2000 increased 18 percent,
while earnings per share (EPS) of $.26 were in line with revised expectations.
For the quarter ended September 30, 2000, net sales totaled
$715.9 million, versus $604.9 million in the year-earlier quarter; operating
income was $39.1 million, versus $62.7 million. EPS in the 1999 quarter was
$.69.
For the nine months ended September 30, 2000, net sales totaled
$2.205 billion, an increase of 39 percent from the sales of $1.583 billion in
the initial three quarters of 1999. Operating income for the first
nine months of 2000 was $191.5 million, or $1.71 per share, versus 1999
operating income of $122.7 million, or $1.40 per share, including
restructuring charges.
"Pentair's water and enclosures groups generated outstanding sales and
earnings growth in the third quarter, however, their performance was offset by
the disappointing results achieved by the tools and equipment businesses,"
said Winslow H. Buxton, chairman and chief executive officer. "The actions
taken to turn around our underperforming tools and equipment businesses are
proceeding with great intensity. We fully expect to see steady improvement in
the company's operating results in the ensuing quarters."
In Water Technologies, a sales gain of 30 percent and an operating income
improvement of 42 percent reflect solid organic performance gains, as well as
the contributions of Essef, acquired in early August of last year. Margins in
the Group increased 120 basis points over the third quarter of 1999.
Municipal pump markets were up strongly, September was an all-time sales
record for the Hydromatic pump brand, and order backlogs also remain
exceptionally strong across most lines. Pool and spa equipment sales grew in
the double digits during the third quarter, and the Water Treatment business
performed equally well, despite the unfavorable impact of foreign currency
translation.
In the Enclosures Group, revenues grew 18 percent -- or 22 percent in
local currencies -- and operating income improved by 51 percent. Pentair's
enclosure businesses have seen tremendous growth in the telecom and datacom
markets, and with industrial original equipment manufacturers. Sales to these
markets are up substantially against a strong comparison last year, and
Pentair has landed new projects with Lucent, Gateway, Radisys, Ericsson,
Qualcomm, and Corvis, to name a few. In Europe, September was a record sales
month with third quarter orders up 21 percent in local currencies.
Lincoln Industrial contributed strong profits to the Equipment Group, but
losses in Service Equipment (SE) continued to hurt results. As announced on
September 14, an $8 million reserve was booked for receivables and another
$8 million was reserved for inventory, both within the SE businesses. The SE
manufacturing facility in Jonesboro, Arkansas ceased manufacturing as the
company completed the delayed implementation of its Asian sourcing strategy.
Responsibility for Lincoln lubrication products has been centralized at
Lincoln Industrial, strengthening the automotive lubrication business and
improving customer service. Pentair continues to evaluate the long-term
potential of the businesses in the Equipment Group.
Third-quarter revenues grew 27 percent in the Tools Group while operating
income declined 63 percent. The profit shortfall resulted from a chain of
events linked to difficulties encountered during the first quarter start-up of
a new tools distribution center in Tennessee.
Randall J. Hogan, president and chief operating officer, cautioned that
the turnaround of the Tools Group is being implemented to assure both
near-term improvement and long-term enhancement of customer service and the
financial performance of the business, and will not be completed until
sometime in 2001.
A Pentair conference call scheduled for 9:00 a.m. CDT today will be
webcast live via http://www.pentair.com . The conference call, which can be
found on the site's "Financial Information" page, will be archived at the same
location.
Pentair is a diversified manufacturer operating in tools, equipment, water
technologies, and enclosures markets. The company employs 14,000 people in
more than 50 locations around the world.
Any statements made about the company's anticipated financial results are
forward-looking statements subject to risks and uncertainties such as
continued economic growth in North America, strong retail demand during the
Christmas selling season, pricing and other competitive pressures, Pentair's
ability to rapidly strengthen management in the affected businesses, and other
uncertainties as described in the company's Annual Report on Form 10K for the
year ended December 31, 1999. Actual results could differ materially from
anticipated results.
PENTAIR, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
In thousands,
except Three Months Ended Nine Months Ended
per-share Sept. 30 Sept. 25 Sept. 30 Sept. 25
data 2000 1999 2000 1999
Net sales $715,926 $604,918 $2,204,817 $1,582,636
Cost of goods sold 533,529 418,719 1,577,306 1,086,593
Gross profit 182,397 186,199 627,511 496,043
Selling, general
and administrative 135,009 117,066 408,699 316,745
Research and
development 8,252 6,481 27,117 18,583
Restructuring charge -- -- 200 38,000
Operating income 39,136 62,652 191,495 122,715
Net interest expense 20,061 14,188 60,471 26,180
Income before
income taxes 19,075 48,464 131,024 96,535
Income taxes 6,402 18,655 47,823 36,201
Net income $12,673 $29,809 $83,201 $60,334
Earnings per
common share
Basic $0.26 $0.70 $1.72 $1.42
Diluted $0.26 $0.69 $1.71 $1.40
Weighted average
common shares
outstanding
Basic 48,521 42,684 48,497 42,517
Diluted 48,568 43,150 48,628 43,087
PENTAIR, INC.
FINANCIAL INFORMATION BY REPORTABLE BUSINESS SEGMENT (UNAUDITED)
Nine Third Second First
Months Quarter Quarter Quarter Year
In thousands 2000 2000 2000 2000 1999
Net Sales
Tools $766,018 $265,543 $263,780 $236,695 $852,869
Equipment 190,911 51,288 67,406 72,217 308,954
Water 690,168 208,561 255,627 225,980 572,259
Enclosures 557,720 190,534 189,800 177,386 633,671
Other -- -- -- -- --
Consolidated $2,204,817 $715,926 $776,613 $712,278 $2,367,753
Operating Income (Loss)
Before Restructuring Charge
Tools $49,278 $9,262 $16,144 $23,872 $106,987
Equipment (18,847) (20,704) (776) 2,633 27,555
Water 100,708 28,512 41,448 30,748 73,362
Enclosures 72,687 24,786 24,692 23,209 63,089
Other (12,131) (2,720) (3,791) (5,620) (18,662)
Consolidated $191,695 $39,136 $77,717 $74,842 $252,331
Operating Income (Loss)
Before Restructuring Charge
as a Percent of Net Sales
Tools 6.4% 3.5% 6.1% 10.1% 12.5%
Equipment (9.9%) (40.4%) (1.2%) 3.6% 8.9%
Water 14.6% 13.7% 16.2% 13.6% 12.8%
Enclosures 13.0% 13.0% 13.0% 13.1% 10.0%
Consolidated 8.7% 5.5% 10.0% 10.5% 10.7%
Restructuring Charge
(Income) Expense
Tools $(1,171) $-- $-- $(1,171) $6,305
Equipment 2,668 -- -- 2,668 14,952
Water -- -- -- -- --
Enclosures (1,297) -- -- (1,297) 16,743
Consolidated $200 $-- $-- $200 $38,000
Operating Income (Loss)
After Restructuring Charge
Tools $50,449 $9,262 $16,144 $25,043 $100,682
Equipment (21,515) (20,704) (776) (35) 12,603
Water 100,708 28,512 41,448 30,748 73,362
Enclosures 73,984 24,786 24,692 24,506 46,346
Other (12,131) (2,720) (3,791) (5,620) (18,662)
Consolidated $191,495 $39,136 $77,717 $74,642 $214,331
In the second quarter of 2000, we reorganized our management reporting
structure into four segments, from the three segments reported in the
first quarter of 2000. Prior period amounts have been restated for this
change. In 1999, we recorded an initial restructuring charge of
$38.0 million $24.1 million after-tax) and in the first quarter of 2000
recorded an additional net restructuring charge of $0.2 million
($0.1 million after-tax). The status and progress of the projects
implemented in 1999 were re-evaluated in the first quarter and a reduction
for a change in the original estimate of $6.3 million was recorded. Three
new related projects were determined as restructuring items and an
additional $6.5 million charge was recorded.
PENTAIR, INC.
FINANCIAL INFORMATION BY REPORTABLE BUSINESS SEGMENT (UNAUDITED)
Fourth Nine Third Second First
Quarter Months Quarter Quarter Quarter
In thousands 1999 1999 1999 1999 1999
Net Sales
Tools $344,125 $508,744 $209,255 $149,423 $150,066
Equipment 82,804 226,150 73,115 79,594 73,441
Water 185,824 386,435 160,865 121,937 103,633
Enclosures 172,364 461,307 161,683 156,271 143,353
Other -- -- -- -- --
Consolidated $785,117 $1,582,636 $604,918 $507,225 $470,493
Operating Income (Loss)
Before Restructuring Charge
Tools $47,859 $59,128 $24,702 $15,611 $18,815
Equipment 6,896 20,659 6,482 8,338 5,839
Water 21,602 51,760 20,113 17,595 14,052
Enclosures 19,885 43,204 16,406 14,405 12,393
Other (4,626) (14,036) (5,051) (4,324) (4,661)
Consolidated $91,616 $160,715 $62,652 $51,625 $46,438
Operating Income (Loss)
Before Restructuring Charge
as a Percent of Net Sales
Tools 13.9% 11.6% 11.8% 10.4% 12.5%
Equipment 8.3% 9.1% 8.9% 10.5% 8.0%
Water 11.6% 13.4% 12.5% 14.4% 13.6%
Enclosures 11.5% 9.4% 10.1% 9.2% 8.6%
Consolidated 11.7% 10.2% 10.4% 10.2% 9.9%
Restructuring Charge
(Income) Expense
Tools $-- $6,305 $-- $-- $6,305
Equipment -- 14,952 -- -- 14,952
Water -- -- -- -- --
Enclosures -- 16,743 -- -- 16,743
Consolidated $-- $38,000 $-- $-- $38,000
Operating Income (Loss)
After Restructuring Charge
Tools $47,859 $52,823 $24,702 $15,611 $12,510
Equipment 6,896 5,707 6,482 8,338 (9,113)
Water 21,602 51,760 20,113 17,595 14,052
Enclosures 19,885 26,461 16,406 14,405 (4,350)
Other (4,626) (14,036) (5,051) (4,324) (4,661)
Consolidated $91,616 $122,715 $62,652 $51,625 $8,438
In the second quarter of 2000, we reorganized our management reporting
structure into four segments, from the three segments reported in the
first quarter of 2000. Prior period amounts have been restated for this
change. In 1999, we recorded an initial restructuring charge of
$38.0 million $24.1 million after-tax) and in the first quarter of 2000
recorded an additional net restructuring charge of $0.2 million ($0.1
million after-tax). The status and progress of the projects implemented
in 1999 were re-evaluated in the first quarter and a reduction for a
change in the original estimate of $6.3 million was recorded. Three new
related projects were determined as restructuring items and an additional
$6.5 million charge was recorded.
| CONTACT: |
Mark Cain of Pentair, Inc., 612-486-2761 |
SOURCE Pentair, Inc.
CONTACT: Mark Cain of Pentair, Inc., 612-486-2761/