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Pentair Provides Financial Outlook for 2016; Reaffirms Full Year 2015 Outlook
12.17.2015

 

  • Company provides full year 2016 adjusted EPS outlook of $4.05 to $4.25
  • At the mid-point of the range, core sales are expected to be down approximately 2 percent and segment income is expected to increase 10 percent.  Free cash flow of greater than $750 million is expected to be equal to or greater than
    adjusted net income.
  • Reaffirms 2015 adjusted EPS outlook of $3.84 to $3.86

Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.

MANCHESTER, United Kingdom - December 17, 2015 - Pentair plc (NYSE: PNR) today provided its outlook for 2016 and reaffirmed its fourth quarter and full year 2015 sales and earnings outlook.

For full year 2016, the company is providing an adjusted earnings per diluted share (EPS) outlook of $4.05 to $4.25, which represents an increase of 5 to 10 percent from the mid-point of the 2015 adjusted EPS outlook.  The company anticipates full year 2016 sales to be approximately $6.6 billion, or an increase of 3 percent, a 2 percent core sales decline, a 1 percent foreign exchange headwind, and a 6 percent positive contribution from acquisitions compared to estimated 2015 sales.  The company expects to generate greater than $750 million in free cash flow or approximately 100 percent of adjusted net income in 2016.

"2015 was a challenging year, but we continue to make progress on the elements within our control," said Randall J. Hogan, Chairman and Chief Executive Officer.  "Three of our four segments are positioned to grow income in 2016.  While our Valves & Controls segment is facing ongoing challenges in its various served industries, we remain vigilant on aligning our selling organization to customer requirements and right-sizing the cost structure to better position the business for the long term.  The integration of ERICO remains on track and we believe our businesses serving the Food & Beverage and Residential & Commercial verticals continue to have favorable growth prospects."

Pentair expects fourth quarter 2015 adjusted EPS to be in the range of $1.03 to $1.05, down approximately 10 percent versus the same quarter last year's adjusted EPS.  The company expects full year 2015 adjusted EPS to be in the range of $3.84 to $3.86, which represents a decrease of 9 percent over 2014 adjusted EPS of $4.23.

CONFERENCE CALL

Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company's outlook on a two-way conference call with investors at 9:00 a.m. Eastern today. A live audio webcast of the call, along with the related presentation, can be accessed in the Investors section of the company's website, www.pentair.com, shortly before the call begins. Reconciliations of non-GAAP financial measures are set forth in the attachments to this release and in the presentation, both of which can be found on Pentair's website. The webcast and presentation will be archived at the company's website following the conclusion of the event.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains statements that we believe to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "likely," "may," "anticipates," "estimates," "projects," "should," "would," "positioned," "strategy," "future" or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the ability to achieve the benefits of planned cost take-out actions; the ability to successfully identify, complete and integrate acquisitions, including the ability to successfully integrate and achieve the expected benefits of the acquisition of ERICO Global Company; overall global economic and business conditions; competition and pricing pressures in the markets we serve; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including in our 2014 Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this press release. We assume no obligation, and disclaim any obligation, to update the information contained in this press release. 

ABOUT PENTAIR PLC
Pentair plc (www.pentair.com) delivers industry-leading products, services and solutions for its customers' diverse needs in water and other fluids, thermal management and equipment protection. With 2014 revenues of $7.0 billion, Pentair employs approximately 30,000 people worldwide.

PENTAIR CONTACTS:
Investors:
Jim Lucas
Vice President, Investor Relations & Strategic Planning
Direct:  763-656-5575
Email: jim.lucas@pentair.com
     
Media:
Rebecca Osborn
Senior Manager, External Communications
Direct:  763-656-5589
Email: rebecca.osborn@pentair.com


Pentair plc and Subsidiaries
Reconciliation of the GAAP year ended December 31, 2015 to the non-GAAP
excluding the effect of 2015 adjustments (Unaudited)
                     
    Actual   Forecast
In millions, except per-share data   First Quarter Second Quarter Third
Quarter
  Fourth
Quarter
  Full
Year
Total Pentair                    
Net sales   $ 1,475.0   $ 1,661.2   $ 1,552.1     approx $ 1,745     approx $ 6,430  
Operating income   171.2   217.9   180.0     approx 158     approx 726  
% of net sales   11.6 % 13.1 % 11.6 %   approx 9.1 %   approx 11.3 %
Adjustments:                    
Restructuring and other   -   25.5   25.3     approx 54     approx 105  
Intangible amortization   27.6   28.0   28.2     approx 39     approx 123  
Inventory step-up   -   1.5   1.4     approx 29     approx 32  
Deal related costs and expenses   -   -   14.3     approx -     approx 14  
Segment income   198.8   272.9   249.2     approx 280     approx 1,000  
% of net sales   13.5 % 16.4 % 16.1 %   approx 16.0 %   approx 15.6 %
Net income from continuing operations-as reported   118.2   153.9   115.2     approx 96     approx 484  
Amortization of bridge financing fees   -   -   8.3     approx -     approx 8  
Adjustments, net of tax   21.2   42.4   53.2     approx 94     approx 211  
Net income from continuing operations-as adjusted   $ 139.4   $ 196.3   $ 176.7     approx $ 190     approx $ 703  
Continuing earnings per ordinary share-diluted                    
Diluted earnings per ordinary share-as reported   $ 0.65   $ 0.84   $ 0.63     approx $0.52 - $0.54   approx $2.64 - $2.66
Adjustments   0.11   0.24   0.34     approx 0.51     approx 1.20  
Diluted earnings per ordinary share-as adjusted   $ 0.76   $ 1.08   $ 0.97     approx $1.03 - $1.05   approx $3.84 - $3.86

Pentair plc and Subsidiaries
Reconciliation of the GAAP year ended December 31, 2014 to the non-GAAP
excluding the effect of 2014 adjustments (Unaudited)
             
In millions, except per-share data First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
  Full
Year
Total Pentair            
Net sales $ 1,644.0   $ 1,834.1   $ 1,758.4   $ 1,802.5     $ 7,039.0  
Operating income 182.1   226.4   267.4   176.0     851.9  
% of net sales 11.1 % 12.3 % 15.2 % 9.8 %   12.1 %
Adjustments:            
  Restructuring and other 17.0   44.1   -   48.5     109.6  
Intangible amortization 28.5   29.0   28.4   28.1     114.0  
Pension and other post-retirement mark-to-market loss -   -   -   49.9     49.9  
Redomicile related expenses 1.5   8.8   -   -     10.3  
Segment income 229.1   308.3   295.8   302.5     1,135.7  
% of net sales 13.9 % 16.8 % 16.8 % 16.8 %   16.1 %
Net income from continuing operations-as reported 125.5   159.2   192.5   129.8     607.0  
  Adjustments, net of tax 38.1   63.5   21.5   87.6     210.7  
Net income from continuing operations-as adjusted $ 163.6   $ 222.7   $ 214.0   $ 217.4     $ 817.7  
Continuing earnings per ordinary share-diluted            
Diluted earnings per ordinary share-as reported $ 0.63   $ 0.81   $ 1.00   $ 0.70     $ 3.14  
Adjustments 0.19   0.32   0.11   0.47     1.09  
Diluted earnings per ordinary share-as adjusted $ 0.82   $ 1.13   $ 1.11   $ 1.17     $ 4.23  

HUG#1974311
Categories: Press Releases