MINNEAPOLIS--(BUSINESS WIRE)--July 22, 2008--Pentair, Inc.
(NYSE:PNR):
- Reports second quarter sales of $910 million, up 1 percent
versus the second quarter 2007
- Delivers earnings per share from continuing operations (EPS)
of $1.39 on a reported basis and adjusted(a) EPS of $0.68 up
11 percent
- Delivers adjusted income from continuing operations of $68
million, up 12 percent
- Announces transaction with GE to create residential water
filtration business, settles Horizon legal case, and announces
significant restructuring and other actions
- Introduces third quarter guidance and updates full year
guidance
(a) Adjusted 2008 and 2007 EPS exclude the impact of gains/losses
from acquisitions and divestitures, the settlement of the Horizon
litigation and the negative impact associated with restructuring costs
and other market related actions. Adjusted 2008 and 2007 Operating
Income and Margins exclude the settlement of the Horizon litigation,
the negative impact associated with restructuring costs and other
market related actions in the respective period. 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.
Pentair, Inc. (NYSE:PNR) today announced second quarter 2008 net
earnings per diluted share from continuing operations (EPS) of $1.39.
This represents an increase of 228 percent as compared to the $0.61 of
reported EPS from continuing operations in the second quarter last
year. Current period results include a 86 cents per share gain from
the transaction with GE Water & Process Technologies, a unit of
General Electric Company (NYSE:GE), to combine residential water
filtration businesses as well as a negative $0.14 per share impact
from the Horizon settlement, and a $0.01 per share negative impact
from restructuring charges. Adjusting for these items, second quarter
2008 EPS was $0.68, up 11 percent year over year.
Total company sales increased 1 percent to $910 million as
compared with $899 million in the second quarter of 2007. The company
delivered second quarter operating income of $95 million. On an
adjusted basis, the company delivered operating income of $118 million
versus $113 million in the year-ago quarter. Overall, adjusted
operating margins for the second quarter expanded 50 basis points to
13.0 percent driven by a positive 360 basis point improvement from
productivity, price, and product mix. The positive impact from these
items more than offset a negative 310 basis point impact related to
total inflation and foreign exchange.
Pentair generated free cash flow of $135 million for the quarter.
Year-to-date, the company has generated $57 million of free cash flow.
The company said it remains on track to achieve free cash flow greater
than $235 million.
"Overall, our businesses performed very well in the second quarter
as we navigated through persistently soft residential markets and a
weaker-than-expected residential pool market. Our business diversity,
growing international market penetration, and aggressive cost-takeout
measures continue to enable us to meet the commitments we laid out
earlier in the year," said Randall J. Hogan, chairman and chief
executive officer.
SECOND QUARTER BUSINESS HIGHLIGHTS
The Water Group delivered $605 million in sales, down 6 percent
year over year. Organic sales were down 9 percent excluding foreign
exchange, driven by continuing softness in the North American
residential markets and aggressive inventory reductions in pool
equipment distribution. Internationally, Water sales increased at a
double-digit rate.
- Global Flow Technologies sales were down 3 percent versus the
year-ago quarter, as unfavorable comparisons associated with
the $21 million municipal pump project for New Orleans in the
second quarter 2007 were not overcome. Sales of pump equipment
for global commercial, municipal and agricultural markets
continue to outpace declines in North American residential
markets.
- Global Filtration sales grew 8 percent or 5 percent excluding
the 2007 acquisition of Porous Media. Steady gains in
industrial filtration, food service and desalination markets
offset declines in the North American residential market.
- Global Pool and Spa sales were down 22 percent. The prolonged
decline in North American residential pool and spa markets,
coupled with distributor inventory reductions, impacted sales.
- International Water sales grew 15 percent in Europe, Middle
East and Africa led by growth in the Middle East and Eastern
Europe. Asia-Pacific sales grew 20 percent driven by strong
double-digit growth in China and India.
The Water Group's second quarter reported operating income totaled
$58 million, down 65 percent as compared to $89 million in the same
period last year. In the quarter, the company settled the Horizon
litigation lawsuit, which resulted in a $20 million charge to
operating income. The company also had $2 million in pre-tax
restructuring charges associated with severance from headcount
reductions and costs related to facility rationalizations. Adjusting
for these items, adjusted operating income was $81 million, down 10
percent versus the $89 million a year-ago. Adjusted operating margins
of 13.3 percent were down 60 basis points as benefits from
productivity, price and product mix could not offset the negative
impact from inflation and decreased volumes.
Technical Products delivered second quarter 2008 sales of $304
million, an increase of 18 percent versus the year-earlier period.
Sales were up 14 percent excluding foreign exchange.
- Global Electrical sales were up 14 percent, led by strong
double-digit increases in its Thermal applications product
line and continued strength in energy and natural resource
related markets (e.g., Oil, Gas and Mining).
- Global Electronic sales were up 24 percent. In Asia,
electronic sales were up over 44 percent while sales in Europe
were up 12 percent in local currencies. North American sales
were up 12 percent.
Technical Products' second quarter operating income totaled $50
million, up 38 percent compared to $36 million in the same quarter
last year. Reported operating margins were 16.3 percent. Adjusting for
a modest restructuring charge, operating margins were 16.4 percent, up
230 basis points versus the second quarter 2007. In the quarter, the
benefits from volume, productivity and price more than offset the
negative impact from total inflation.
"We continue to perform well in our respective markets. In the
second quarter, our Technical Products business maintained outstanding
market and financial momentum. In our Water businesses, we continue to
drive solid growth in our industrial, commercial and municipal Water
markets globally to help compensate for severe declines in the North
American residential market," Hogan said.
"We believe our restructuring and other market-related actions
better position the company for sustainable, positive performance as
demonstrated by what we accomplished in the quarter and have announced
this week. For example, the formation of the residential water
filtration business with GE combines our leading technologies and
distribution channels. We expect this combination will create a
stronger business, enabling us to more effectively serve our
customers. Additionally, the settlement of the Horizon legal case
removes a long-standing uncertainty," Hogan added.
MAJOR ACTIONS UNDERWAY
In July 2008, the company announced several significant actions
that will affect reported and adjusted earnings guidance for the
second half of 2008.
First, the company recently announced actions to rationalize three
international and three United States Water segment factories. The
production at these sites will shift to Mexico, China, and other
United States facilities. Additionally, the company plans to embark on
an operational restructuring plan associated with its Spa/Bath
business. The company continues to evaluate other restructuring
actions to improve overall cost structure. In aggregate, these major
restructuring actions are expected to result in a charge of over 50
cents per share in the second half of 2008. The annualized savings
associated with these actions is expected to be approximately 40 cents
per share when fully realized.
Next, the company recently issued a tender offer to bondholders of
the company's 7.85 percent bonds due in October 2009. The company
expects the outcome of the tender will result in a pre-tax charge of
$3 to $5 million assuming a participation of 50 percent of the
bondholders. The resulting quarterly benefit is expected to be a penny
per share of reduced interest expense.
OUTLOOK
The company introduced its third quarter reported 2008 EPS
guidance range of $0.31 to $0.33. Adjusting for charges associated
with restructuring and the bond tender offer, third quarter EPS is
expected to be $0.51 to $0.53, a decrease of 2 to 6 percent versus the
third quarter 2007. This third quarter range includes $0.06 of
expenses associated mainly with integration, inventory step-up and
intangibles amortization charges related to the GE transaction.
The company updates its full year 2008 reported EPS guidance range
to $2.44 to $2.49, up 15 to 17 percent versus reported full year 2007
EPS. Adjusting for non-recurring items associated with the GE
transaction gain, Horizon settlement, restructuring actions and the
bond tender, full year EPS is expected to be $2.28 to $2.33, up 9 to
11 percent versus adjusted full year 2007 EPS. The full year adjusted
EPS guidance includes approximately $0.07 per share of expenses mainly
associated with integration and step-up charges related to the
residential filtration transaction.
"We expect our positive performance to continue in our
non-residential and international Water and global Technical Products'
businesses. We are launching a number of actions to improve our cost
structure and better position the company to control our own destiny.
These actions introduce a new full year EPS guidance range of $2.28 to
$2.33, which includes 7 cents of incremental expenses to restructure
our Water businesses. Absent these incremental expenses, our business
outlook would be higher than previous guidance," Hogan said.
EARNINGS CONFERENCE CALL
Pentair Chairman and CEO Randall J. Hogan and Chief Financial
Officer John L. Stauch will discuss the Company's performance and
third quarter and full year 2008 guidance on a two-way conference call
with investors at 12:00 p.m. Eastern today. Reconciliation of non-GAAP
financial measures are set forth in the attachments to this second
quarter 2008 earnings release and in the second quarter 2008 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; 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 2007 revenues of $3.30 billion, Pentair employs approximately
16,000 people worldwide.
Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Three months ended Six months ended
-------------------- -----------------------
In thousands, except per- June 28 June 30 June 28 June 30
share data 2008 2007 2008 2007
----------------------------------------------------------------------
Net sales $ 909,757 $899,299 $1,750,161 $1,692,144
Cost of goods sold 631,695 619,750 1,220,768 1,176,664
----------------------------------------------------------------------
Gross profit 278,062 279,549 529,393 515,480
% of net sales 30.6% 31.1% 30.3% 30.5%
Selling, general and
administrative 146,311 151,881 284,957 291,363
% of net sales 16.1% 16.9% 16.3% 17.2%
Research and development 16,314 14,808 32,180 29,758
% of net sales 1.8% 1.6% 1.8% 1.8%
Legal settlement 20,435 -- 20,435 --
% of net sales 2.3% -- 1.2% --
----------------------------------------------------------------------
Operating income 95,002 112,860 191,821 194,359
% of net sales 10.4% 12.5% 11.0% 11.5%
Other (income) expense:
Gain on sale of interest
in subsidiaries (109,648) -- (109,648) --
Equity losses of
unconsolidated
subsidiary 847 36 1,764 993
Net interest expense 15,862 18,483 31,950 33,194
% of net sales 1.7% 2.1% 1.8% 2.0%
----------------------------------------------------------------------
Income from continuing
operations before income
taxes 187,941 94,341 267,755 160,172
% of net sales 20.7% 10.5% 15.3% 9.5%
Provision for income
taxes 49,206 33,348 76,376 56,550
Effective tax rate 26.2% 35.4% 28.5% 35.3%
----------------------------------------------------------------------
Income from continuing
operations 138,735 60,993 191,379 103,622
Income (loss) from
discontinued operations,
net of tax -- 1,008 (1,217) 509
Gain (loss) on disposal
of discontinued
operations, net of tax -- 64 (7,137) 207
----------------------------------------------------------------------
Net income $ 138,735 $ 62,065 $ 183,025 $ 104,338
======================================================================
Earnings (loss) per
common share
Basic
Continuing operations $ 1.41 $ 0.62 $ 1.95 $ 1.04
Discontinued operations -- 0.01 (0.09) 0.01
----------------------------------------------------------------------
Basic earnings per common
share $ 1.41 $ 0.63 $ 1.86 $ 1.05
======================================================================
Diluted
Continuing operations $ 1.39 $ 0.61 $ 1.92 $ 1.03
Discontinued operations -- 0.01 (0.08) 0.01
----------------------------------------------------------------------
Diluted earnings per
common share $ 1.39 $ 0.62 $ 1.84 $ 1.04
======================================================================
Weighted average common
shares outstanding
Basic 98,062 98,874 98,172 98,915
Diluted 99,509 100,371 99,462 100,294
Cash dividends declared
per common share $ 0.17 $ 0.15 $ 0.34 $ 0.30
Pentair, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
June 28 December 31 June 30
In thousands 2008 2007 2007
----------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 74,616 $ 70,795 $ 52,016
Accounts and notes receivable, net 558,928 466,675 523,941
Inventories 437,421 392,416 395,330
Deferred tax assets 51,961 50,511 51,621
Prepaid expenses and other current
assets 46,213 35,908 41,605
Current assets of discontinued
operations -- 21,716 31,750
----------------------------------------------------------------------
Total current assets 1,169,139 1,038,021 1,096,263
Property, plant and equipment, net 379,471 365,990 352,853
Other assets
Goodwill 2,158,229 2,004,720 1,924,208
Intangibles, net 558,451 491,263 503,663
Other 78,732 82,237 77,821
Non-current assets of discontinued
operations -- 18,383 18,436
----------------------------------------------------------------------
Total other assets 2,795,412 2,596,603 2,524,128
----------------------------------------------------------------------
Total assets $4,344,022 $4,000,614 $3,973,244
======================================================================
Liabilities and Shareholders'
Equity
Current liabilities
Short-term borrowings $ 217 $ 13,586 $ 10,202
Current maturities of long-term
debt 4,442 5,075 4,516
Accounts payable 238,656 229,937 211,504
Employee compensation and benefits 98,816 111,475 95,960
Current pension and post-
retirement benefits 8,557 8,557 7,918
Accrued product claims and
warranties 47,528 49,382 48,867
Income taxes 18,115 12,919 20,322
Accrued rebates and sales
incentives 36,687 36,663 42,075
Other current liabilities 130,431 90,377 93,948
Current liabilities of
discontinued operations -- 2,935 9,616
----------------------------------------------------------------------
Total current liabilities 583,449 560,906 544,928
Other liabilities
Long-term debt 1,024,160 1,041,925 1,173,184
Pension and other retirement
compensation 171,923 161,042 218,420
Post-retirement medical and other
benefits 35,095 37,147 46,806
Long-term income taxes payable 24,442 21,306 14,705
Deferred tax liabilities 189,214 167,633 110,412
Other non-current liabilities 95,544 97,086 87,949
Non-current liabilities of
discontinued operations -- 2,698 2,546
----------------------------------------------------------------------
Total liabilities 2,123,827 2,089,743 2,198,950
Minority interest 122,960 -- --
--
Shareholders' equity 2,097,235 1,910,871 1,774,294
----------------------------------------------------------------------
Total liabilities and
shareholders' equity $4,344,022 $4,000,614 $3,973,244
======================================================================
Days sales in accounts receivable
(13 month moving average) 56 53 55
Days inventory on hand (13 month
moving average) 77 75 76
Days in accounts payable (13 month
moving average) 57 54 55
Debt/total capital 32.9% 35.7% 40.1%
Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six months ended
----------------------
June 28 June 30
In thousands 2008 2007
----------------------------------------------------------------------
Operating activities
Net income $ 183,025 $ 104,338
Adjustments to reconcile net income to net cash
provided by (used for) operating activities
(Income) loss from discontinued operations 1,217 (509)
(Gain) loss on disposal of discontinued
operations 7,137 (207)
Equity losses of unconsolidated subsidiary 1,764 993
Depreciation 30,795 30,043
Amortization 13,101 12,952
Deferred income taxes 21,037 (6,476)
Stock compensation 11,932 12,626
Excess tax benefits from stock-based
compensation (776) (2,213)
Gain on sale of assets (443) --
Gain on sale of interest in subsidiaries (109,648) --
Changes in assets and liabilities, net of
effects of business acquisitions and
dispositions
Accounts and notes receivable (85,203) (84,466)
Inventories (20,300) 8,040
Prepaid expenses and other current assets (7,852) (3,465)
Accounts payable 11,044 10,308
Employee compensation and benefits (18,482) (4,915)
Accrued product claims and warranties (2,298) 4,561
Income taxes 4,131 5,157
Other current liabilities 31,261 2,525
Pension and post-retirement benefits 3,320 7,730
Other assets and liabilities 4,986 2,554
----------------------------------------------------------------------
Net cash provided by (used for) continuing
operations 79,748 99,576
Net cash provided by (used for) operating
activities of discontinued operations (4,137) (1,660)
----------------------------------------------------------------------
Net cash provided by (used for) operating
activities 75,611 97,916
Investing activities
Capital expenditures (26,328) (30,058)
Proceeds from sale of property and equipment 3,802 1,526
Acquisitions, net of cash acquired or received 6,237 (482,885)
Divestitures 29,959 --
Other -- (779)
----------------------------------------------------------------------
Net cash provided by (used for) investing
activities 13,670 (512,196)
Financing activities
Net short-term borrowings (repayments) (13,965) (4,708)
Proceeds from long-term debt 279,405 1,121,402
Repayment of long-term debt (297,740) (673,341)
Debt issuance costs (50) (1,782)
Excess tax benefits from stock-based
compensation 776 2,213
Proceeds from exercise of stock options 2,175 4,922
Repurchases of common stock (21,721) (9,280)
Dividends paid (33,747) (29,991)
----------------------------------------------------------------------
Net cash provided by (used for) financing
activities (84,867) 409,435
Effect of exchange rate changes on cash and
cash equivalents (593) 2,041
----------------------------------------------------------------------
Change in cash and cash equivalents 3,821 (2,804)
Cash and cash equivalents, beginning of period 70,795 54,820
----------------------------------------------------------------------
Cash and cash equivalents, end of period $ 74,616 $ 52,016
======================================================================
Free cash flow
----------------------------------------------------------------------
Net cash provided by (used for) continuing
operations $ 79,748 $ 99,576
Capital expenditures (26,328) (30,058)
Proceeds from sale of property and equipment 3,802 1,526
----------------------------------------------------------------------
Free cash flow $ 57,222 $ 71,044
======================================================================
Pentair, Inc. and Subsidiaries
Supplemental Financial Information by Reportable Business Segment
(Unaudited)
First Qtr Second Qtr Six Months
In thousands 2008 2008 2008
----------------------------------------------------------------------
Net sales to external customers
Water Group $554,944 $ 605,497 $1,160,441
Technical Products Group 285,460 304,260 589,720
----------------------------------------------------------------------
Consolidated $840,404 $ 909,757 $1,750,161
======================================================================
Intersegment sales
Water Group $ 372 $ 139 $ 511
Technical Products Group 1,138 1,034 2,172
Other (1,510) (1,173) (2,683)
----------------------------------------------------------------------
Consolidated $ -- $ -- $ --
======================================================================
Operating income (loss)
Water Group $ 64,419 $ 57,822 $ 122,241
Technical Products Group 45,337 49,732 95,069
Other (12,937) (12,552) (25,489)
----------------------------------------------------------------------
Consolidated $ 96,819 $ 95,002 $ 191,821
======================================================================
Operating income as a percent of net
sales
Water Group 11.6% 9.5% 10.5%
Technical Products Group 15.9% 16.3% 16.1%
Consolidated 11.5% 10.4% 11.0%
First Qtr Second Qtr Six Months
In thousands 2007 2007 2007
----------------------------------------------------------------------
Net sales to external customers
Water Group $540,262 $ 642,149 $1,182,411
Technical Products Group 252,583 257,150 509,733
----------------------------------------------------------------------
Consolidated $792,845 $ 899,299 $1,692,144
======================================================================
Intersegment sales
Water Group $ 214 $ 46 $ 260
Technical Products Group 896 1,689 2,585
Other (1,110) (1,735) (2,845)
----------------------------------------------------------------------
Consolidated $ -- $ -- $ --
======================================================================
Operating income (loss)
Water Group $ 62,426 $ 89,195 $ 151,621
Technical Products Group 31,631 36,140 67,771
Other (12,558) (12,475) (25,033)
----------------------------------------------------------------------
Consolidated $ 81,499 $ 112,860 $ 194,359
======================================================================
Operating income as a percent of net
sales
Water Group 11.6% 13.9% 12.8%
Technical Products Group 12.5% 14.1% 13.3%
Consolidated 10.3% 12.5% 11.5%
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)
In thousands, except First Quarter Second Quarter Third Quarter
per-share data 2008 2008 2008
----------------------------------------------------------------------
Net sales $840,404 $909,757 $845,000 - $855,000
----------------------------------------------------------------------
Operating income - as
reported 96,819 95,002 67,000 - 71, 000
% of net sales 11.5% 10.4% 7.8% - 8.4%
Adjustments -- 23,140 approx. 25,000
----------------------------------------------------------------------
Operating income - as
adjusted 96,819 118,142 92,000 - 96,000
% of net sales 11.5% 13.0% 10.8% - 11.4%
Income from
continuing
operations - as
reported 52,644 138,735 31,000 - 33,000
Adjustments - tax
affected -- (70,560) approx. 20,000
----------------------------------------------------------------------
Income from
continuing
operations - as
adjusted 52,644 68,175 51,000 - 53,000
======================================================================
Continuing earnings
per common share -
diluted
Diluted earnings per
common share - as
reported $0.53 $1.39 $0.31 - $0.33
Adjustments -- (0.71) approx. 0.20
----------------------------------------------------------------------
Diluted earnings per
common share - as
adjusted $0.53 $0.68 $0.51 - $0.53
======================================================================
Weighted average
common shares
outstanding -
Diluted 99,558 99,509 approx. 99,400
In thousands, except per-share Fourth Quarter Year
data 2008 2008
----------------------------------------------------------------------
Net sales $880,000 - $895,000 approx. $3,500M
----------------------------------------------------------------------
Operating income - as reported 56,000 - 62,000 315M - 325M
% of net sales 6.3% -7.0% 9.0% - 9.3%
Adjustments approx. 52,000 approx. 100M
----------------------------------------------------------------------
Operating income - as adjusted 108,000 - 114,000 415M - 425M
% of net sales 12.1% - 13.0% 11.9% - 12.2%
Income from continuing operations
- as reported 20,000 - 23,000 243M - 248M
Adjustments - tax affected approx. 35,000 approx. (16M)
----------------------------------------------------------------------
Income from continuing operations
- as adjusted 55,000 - 58,000 227M - 232M
======================================================================
Continuing earnings per common
share - diluted
Diluted earnings per common share
- as reported $0.20 - $0.23 $2.44 - $2.49
Adjustments approx. 0.35 approx. (0.16)
----------------------------------------------------------------------
Diluted earnings per common share
- as adjusted $0.55 - $0.58 $2.28 - $2.33
======================================================================
Weighted average common shares
outstanding - Diluted approx. 99,200 approx. 99,300
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)
In thousands, except per- First Quarter Second Quarter Third Quarter
share data 2007 2007 2007
----------------------------------------------------------------------
Net sales $792,845 $899,299 $821,214
----------------------------------------------------------------------
Operating income - as
reported 81,499 112,860 93,149
% of net sales 10.3% 12.5% 11.3%
Adjustments -- -- 9,192
----------------------------------------------------------------------
Operating income - as
adjusted 81,499 112,860 102,341
% of net sales 10.3% 12.5% 12.5%
Income from continuing
operations - as reported 42,629 60,994 59,277
Adjustments - tax affected -- -- 6,246
Non-recurring tax items (145) (83) (11,517)
----------------------------------------------------------------------
Income from continuing
operations - as adjusted 42,484 60,911 54,006
======================================================================
Continuing earnings per
common share - diluted
Diluted earnings per common
share - as reported $0.42 $0.61 $0.59
Adjustments -- -- (0.05)
----------------------------------------------------------------------
Diluted earnings per common
share - as adjusted $0.42 $0.61 $0.54
----------------------------------------------------------------------
Weighted average common
shares outstanding -
Diluted 100,271 100,371 100,365
Fourth Quarter Year
In thousands, except per-share data 2007 2007
----------------------------------------------------------------------
Net sales $817,519 $3,330,877
----------------------------------------------------------------------
Operating income - as reported 91,519 379,027
% of net sales 11.2% 11.4%
Adjustments 5,970 15,162
----------------------------------------------------------------------
Operating income - as adjusted 97,489 394,189
% of net sales 11.9% 11.8%
Income from continuing operations - as
reported 49,470 212,370
Adjustments - tax affected 3,881 10,127
Non-recurring tax items (1,073) (12,818)
----------------------------------------------------------------------
Income from continuing operations - as
adjusted 52,278 209,679
======================================================================
Continuing earnings per common share -
diluted
Diluted earnings per common share - as
reported $0.50 $2.12
Adjustments 0.03 (0.02)
----------------------------------------------------------------------
Diluted earnings per common share - as
adjusted $0.53 $2.10
----------------------------------------------------------------------
Weighted average common shares outstanding -
Diluted 99,859 100,205
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 Third Quarter
In thousands 2008 2008 2008
----------------------------------------------------------------------
Water
Net sales $554,944 $605,497 $555,000 - $560,000
----------------------------------------------------------------------
Operating income - as
reported 64,419 57,822 36,000 - 38,000
% of net sales 11.6% 9.5% 6.4% - 6.8%
Adjustments -- 22,711 approx. 23,000
----------------------------------------------------------------------
Operating income - as
adjusted 64,419 80,533 59,000 - 61,000
% of net sales 11.6% 13.3% 10.5% - 11.0%
Technical Products
Net sales $285,460 $304,260 $290,000 - $295,000
----------------------------------------------------------------------
Operating income - as
reported 45,337 49,732 45,000 - 47,000
% of net sales 15.9% 16.3% 15.3% - 16.2%
Adjustments -- 429 approx. 2,000
----------------------------------------------------------------------
Operating income - as
adjusted 45,337 50,161 47,000 - 49,000
% of net sales 15.9% 16.4% 15.9% - 16.9%
Fourth Quarter Year
In thousands 2008 2008
----------------------------------------------------------------------
Water
Net sales $585,000 - $595,000 approx. $2,300M+
----------------------------------------------------------------------
Operating income - as reported 26,000 - 30,000 184M - 190M
% of net sales 4.4% - 5.1% 8.0% - 8.3%
Adjustments approx. 50,000 approx. 96M
----------------------------------------------------------------------
Operating income - as adjusted 76,500 - 80,500 280M - 286M
% of net sales 12.8% - 13.7% 12.1% - 12.4%
Technical Products
Net sales $295,000 - $300,000 $1,175M - $1,185M
----------------------------------------------------------------------
Operating income - as reported 45,000 - 47,000 185M - 189M
% of net sales 15.0% - 15.9% 15.6% - 16.1%
Adjustments approx. 2,000 approx. 4M
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Operating income - as adjusted 47,000 - 49,000 189M - 193M
% of net sales 15.7% - 16.6% 16.0% - 16.5%
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)
First Quarter Second Quarter Third Quarter
In thousands 2007 2007 2007
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Water
Net sales $540,262 $642,149 $545,513
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Operating income - as
reported 62,426 89,195 56,061
% of net sales 11.6% 13.9% 10.3%
Adjustments -- -- 9,843
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Operating income - as
adjusted 62,426 89,195 65,904
% of net sales 11.6% 13.9% 12.1%
Technical Products
Net sales $252,583 $257,150 $275,701
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Operating income - as
reported 31,631 36,140 46,237
% of net sales 12.5% 14.1% 16.8%
Adjustments -- -- (652)
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Operating income - as
adjusted 31,631 36,140 45,585
% of net sales 12.5% 14.1% 16.5%
Fourth Quarter Year
In thousands 2007 2007
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Water
Net sales $552,820 $2,280,744
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Operating income - as reported 65,541 273,223
% of net sales 11.9% 12.0%
Adjustments 3,897 13,740
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Operating income - as adjusted 69,438 286,963
% of net sales 12.6% 12.6%
Technical Products
Net sales $264,699 $1,050,133
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Operating income - as reported 39,578 153,586
% of net sales 15.0% 14.6%
Adjustments 2,073 1,421
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Operating income - as adjusted 41,651 155,007
% of net sales 15.7% 14.8%
CONTACT: Pentair, Inc.
Todd Gleason, 763-656-5570
Vice President, Investor Relations
todd.gleason@pentair.com
Rachael Jarosh, 763-656-5280
Vice President, Communications
rachael.jarosh@pentair.com
SOURCE: Pentair, Inc.