ST. PAUL, Minn., April 23 /PRNewswire Interactive News Release/ --
Pentair (NYSE: PNR) today announced that its first quarter 2001 earnings per
share (EPS) of $.42 exceeded analysts' consensus earnings estimates by
11 percent, while revenues increased four percent and free cash flow improved
dramatically over the same period last year.
"The turnaround of our tools business is becoming evident, and our
enclosures and water technologies businesses are working hard to offset the
impact of difficult economic conditions that exist in many of our markets,"
said Randall J. Hogan, president and CEO. "We are benefiting from some of the
cost savings initiated during our December 2000 restructuring, and additional
savings will be realized in the second quarter and beyond."
First quarter 2001 operating income was $52.9 million, compared to
$72.8 million in the first quarter of 2000. First quarter net sales totaled
$671.4 million, versus $647.7 million in the year earlier period. Continuing
EPS for the first quarter of 2001 was $.42, compared to continuing EPS of
$.69 in the previous year. The $.42 of continuing EPS in the first quarter
2001 is a substantial improvement over pre-charge EPS of ($.02) in the fourth
quarter of 2000. First quarter 2001 operating margins were 7.9 percent as
compared to fourth quarter 2000 operating margins of 2.3 percent. Free cash
flow for the first quarter reflected a use of funds of $47 million, which is a
$120 million improvement compared to the first quarter of 2000.
In the Tools segment, Pentair said that first quarter sales were ahead of
year-earlier levels, while operating income improved significantly over the
fourth quarter of 2000 due to improved realized pricing and ongoing cost
reduction efforts. Cash flow from the tools business improved dramatically in
the first quarter versus the same period a year ago, net receivables in the
tools business have decreased significantly, and inventories are down.
Efforts to better manage the tool brands and sales channels are beginning to
pay off, and new product development has been accelerated.
In the Water Technologies segment, margins improved in the first quarter
over those of the fourth quarter 2000, while the impact of soft economic
conditions and weather slowed sales as compared to year-earlier levels. A
late spring delayed both the pool construction season and the start-up of
drilling projects that require pumps, contributing to lower pool and pump unit
sales, respectively. Orders grew four percent on strong demand for large
pumps used in municipal water treatment operations. As a result, a strong
backlog of municipal pump orders is expected to ship throughout the remainder
of 2001 and into next year.
In the Enclosures segment, Pentair said that it continued to win new
datacom and telecom business during the first quarter, but that unfavorable
product mix reduced margins. Strong sales continued through most of the first
quarter, but operating earnings suffered as customers' reduced capital
spending resulted in a sales decline in higher-margin Hoffman- and
Schroff-brand products. The business is reducing headcount and operating
expenses, and is selectively in-sourcing production to optimize the efficiency
of its manufacturing facilities. Meanwhile, the business is redoubling
efforts to ensure the success of new product launches in support of growth
commitments.
"We've made progress in restoring the tools business and in reducing costs
across the board, but we're not done yet. We are vigorously pursuing
additional cost reductions -- particularly those in the Enclosures business --
and new top-line growth opportunities," Hogan said. "Barring further decline
in the current economic environment, we feel comfortable with estimates for
Pentair's 2001 earnings performance."
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 St. Paul-based manufacturer whose core businesses compete in
tools, water technologies, and enclosures markets. The company employs
13,000 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, retail demand and other competitive pressures, the
ability to successfully strengthen management, and other uncertainties as
described in the company's Annual Report on Form 10K for the year ended
December 31, 2000. Actual results could differ materially from anticipated
results.
Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
First Quarter
In thousands, except per-share data 2001 2000
Net sales $ 671,383 $ 647,691
Cost of goods sold 507,396 467,789
Gross profit 163,987 179,902
Selling, general and administrative 103,392 101,000
Research and development 7,739 8,618
Restructuring charge (income) -- (2,468)
Operating income 52,856 72,752
Net interest expense 17,716 18,948
Other expense 2,500 --
Income from continuing operations before
income taxes 32,640 53,804
Provision for income taxes 12,077 20,163
Income from continuing operations 20,563 33,641
Income (loss) from discontinued operations,
net of tax -- (975)
Cumulative effect of accounting change,
net of tax -- (1,222)
Net income $20,563 $31,444
Earnings per common share
Basic
Continuing operations $0.42 $0.69
Income (loss) from discontinued operations -- (0.02)
Cumulative effect of accounting change -- (0.02)
Basic earnings per common share $0.42 $0.65
Diluted
Continuing operations $0.42 $0.69
Income (loss) from discontinued operations -- (0.02)
Cumulative effect of accounting change -- (0.02)
Diluted earnings per common share $0.42 $0.65
Weighted average common shares outstanding
Basic 49,006 48,454
Diluted 49,127 48,575
Cash dividends declared per common share $0.17 $0.16
Pentair, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31 December 31 April 1
2001 2000 2000
In thousands (Unaudited) (Unaudited)
Assets
Current assets
Cash and cash equivalents $33,003 $34,944 $38,898
Accounts and notes receivable,
net 508,344 468,081 578,678
Inventories 383,194 392,495 398,259
Other current assets 94,547 95,019 68,230
Net assets of discontinued
operations 106,633 101,263 156,046
Total current assets 1,125,721 1,091,802 1,240,111
Property, plant and equipment,
net 346,820 352,984 354,144
Goodwill, net 1,132,070 1,141,102 1,147,762
Other assets 66,373 58,137 49,486
Total assets $2,670,984 $2,644,025 $2,791,503
Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings $ 170,111 $ 108,141 $ 285,625
Current maturities of
long-term debt 24,569 23,999 26,414
Accounts and notes payable 224,293 250,088 184,197
Accrued expenses and other
current liabilities 243,982 266,564 260,056
Total current liabilities 662,955 648,792 756,292
Long-term debt 782,173 781,834 858,662
Other noncurrent liabilities 202,421 202,808 166,254
Total liabilities 1,647,549 1,633,434 1,781,208
Shareholders' equity 1,023,435 1,010,591 1,010,295
Total liabilities and
shareholders' equity $2,670,984 $2,644,025 $2,791,503
Pentair, Inc. and Subsidiaries
Financial Information by Reportable Business Segment (Unaudited)
First First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter Year
In thousands 2001 2000 2000 2000 2000 2000
Net Sales
Tools $240,392 $231,610 $275,375 $280,203 $279,428 $1,066,616
Water 220,852 231,967 261,727 214,119 195,859 903,672
Enclosures 210,139 184,114 196,659 197,462 199,490 777,725
Consolidated $671,383 $647,691 $733,761 $691,784 $674,777 $2,748,013
Operating Income (Loss) Before Restructuring Charge
Tools $7,863 $ 22,005 $ 17,235 $ 10,772 $(20,865) $ 29,147
Water 28,193 30,749 41,448 28,512 20,023 120,732
Enclosures 21,237 23,149 24,542 24,786 22,166 94,643
Other (4,437) (5,619) (3,788) (2,720) (5,576) (17,703)
Consolidated $ 52,856 $ 70,284 $ 79,437 $ 61,350 $ 15,748 $ 226,819
Operating Income (Loss) Before Restructuring Charge as a Percent of Net
Sales
Tools 3.3% 9.5% 6.3% 3.8% (7.5%) 2.7%
Water 12.8% 13.3% 15.8% 13.3% 10.2% 13.4%
Enclosures 10.1% 12.6% 12.5% 12.6% 11.1% 12.2%
Other 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Consolidated 7.9% 10.9% 10.8% 8.9% 2.3% 8.3%
Restructuring Charge (Income) Expense
Tools $ -- $ (1,171) $ -- $ -- $ 6,567 $ 5,396
Water -- -- -- -- -- --
Enclosures -- (1,297) -- -- (328) (1,625)
Other -- -- -- -- 21,018 21,018
Consolidated $ -- $ (2,468) $ -- $ -- $ 27,257 $ 24,789
Operating Income (Loss) After Restructuring Charge
Tools (A) $ 7,863 $ 23,176 $ 17,235 $ 10,772 $(27,432) $ 23,751
Water 28,193 30,749 41,448 28,512 20,023 120,732
Enclosures 21,237 24,446 24,542 24,786 22,494 96,268
Other (4,437) (5,619) (3,788) (2,720) (26,594) (38,721)
Consolidated $ 52,856 $ 72,752 $ 79,437 $ 61,350 $(11,509) $ 202,030
(A) Second quarter 2000 Tools segment operating income reflects one-time
pre-tax costs to establish an additional $5.0 million in Accounts
receivable reserves. Fourth quarter 2000 Tools segment operating
income reflects one-time pre-tax costs to establish an additional
$25 million for accounts receivable ($17 million) and inventory
valuation ($8 million) reserves.
Pentair, Inc. and Subsidiaries
Financial Information by Reportable Business Segment (Unaudited) -
(Continued)
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
In thousands 1999 1999 1999 1999 1999
Net Sales
Tools $154,831 $153,606 $214,747 $352,459 $875,643
Water 105,049 123,544 164,353 189,981 582,927
Enclosures 148,360 162,038 167,486 179,616 657,500
Other -- -- -- -- --
Consolidated $408,240 $439,188 $546,586 $722,056 $2,116,070
Operating Income (Loss) Before Restructuring Charge
Tools $ 18,815 $ 15,611 $ 24,702 $ 47,857 $106,985
Water 14,052 17,595 20,113 21,602 73,362
Enclosures 12,393 14,405 16,406 19,885 63,089
Other (4,661) (4,324) (5,051) (4,626) (18,662)
Consolidated $ 40,599 $ 43,287 $ 56,170 $ 84,718 $224,774
Operating Income (Loss) Before Restructuring Charge as a Percent of Net
Sales
Tools 12.2% 10.2% 11.5% 13.6% 12.2%
Water 13.4% 14.2% 12.2% 11.4% 12.6%
Enclosures 8.4% 8.9% 9.8% 11.1% 9.6%
Other 0.0% 0.0% 0.0% 0.0% 0.0%
Consolidated 9.9% 9.9% 10.3% 11.7% 10.6%
Restructuring Charge (Income) Expense
Tools $6,305 $-- $-- $-- $6,305
Water -- -- -- -- --
Enclosures 16,743 -- -- -- 16,743
Other -- -- -- -- --
Consolidated $ 23,048 $-- $-- $-- $ 23,048
Operating Income (Loss) After Restructuring Charge
Tools $ 12,510 $ 15,611 $ 24,702 $ 47,857 $100,680
Water 14,052 17,595 20,113 21,602 73,362
Enclosures (4,350) 14,405 16,406 19,885 46,346
Other (4,661) (4,324) (5,051) (4,626) (18,662)
Consolidated $ 17,551 $ 43,287 $ 56,170 $ 84,718 $201,726
| Contact: |
Mark Cain (651) 639-5278 |
SOURCE Pentair, Inc.
CONTACT: Mark Cain of Pentair, 651-639-5278