Pentair Reports Fourth Quarter and Full Year 2018 Results
- Fourth quarter sales of $741 million; full year 2018 sales of $2.97 billion.
- Fourth quarter GAAP EPS of $0.54 and adjusted EPS of $0.60; full year 2018 GAAP EPS of $1.81 and adjusted EPS of $2.35.
- The company introduces its 2019 GAAP EPS guidance of approximately $2.29 to $2.39 and on an adjusted basis of approximately $2.50 to $2.60.
Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.
LONDON--(BUSINESS WIRE)-- Pentair plc (NYSE: PNR) today announced fourth quarter 2018 sales of $741 million. Sales were up 3 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 6 percent in the fourth quarter. Fourth quarter 2018 earnings per diluted share from continuing operations ("EPS") were $0.54 compared to $0.30 in the fourth quarter of 2017. On an adjusted basis, the company reported EPS of $0.60 compared to $0.52 in the fourth quarter of 2017. Segment income, adjusted net income, free cash flow, and adjusted EPS are described in the attached schedules.
Fourth quarter 2018 operating income was $113 million, up 32 percent compared to operating income for the fourth quarter of 2017, and return on sales ("ROS") was 15.3 percent, an increase of 350 basis points when compared to the fourth quarter of 2017. On an adjusted basis, the company reported segment income of $134 million for the fourth quarter, up 5 percent compared to segment income for the fourth quarter of 2017, and ROS was 18.1 percent, an increase of 40 basis points when compared to the fourth quarter of 2017.
Full year net cash provided by operating activities of continuing operations was $458 million and free cash flow from continuing operations was $410 million. The company delivered full year free cash flow of 98 percent of adjusted net income.
Pentair paid dividends of $0.175 per share in the fourth quarter of 2018. Pentair previously announced on December 10, 2018 that its Board of Directors approved a 3 percent increase in the company's regular annual cash dividend rate for 2019 to $0.72 from $0.70, adjusted for the spin-off of nVent Electric plc. 2019 will mark the 43rd consecutive year that Pentair has increased its dividend.
"2018 was an eventful year for Pentair as we began our new journey as a pure play water company," said John L. Stauch, Pentair President and Chief Executive Officer. "We delivered on our 2018 commitments while successfully completing the separation of nVent Electric plc to shareholders. During 2018, we returned nearly $700 million to our shareholders through share buybacks and dividends. Our core sales growth accelerated during the year and we were able to expand our margins while making a number of long-term, strategic growth investments. To start 2019, we announced agreements for two strategic acquisitions to further our Residential & Commercial water treatment strategy. Our balance sheet remains in excellent shape and we remain committed to executing our strategy as a focused Residential & Commercial water treatment company."
OUTLOOK
The company introduces its 2019 GAAP EPS guidance of $2.29 to $2.39 and on an adjusted basis of $2.50 to $2.60. The company anticipates full year 2019 sales up approximately 5 to 6 percent on a reported basis and up approximately 4 to 5 percent on a core basis. The company expects to deliver full year free cash flow to approximate adjusted net income.
In addition, the company introduces first quarter 2019 GAAP EPS from continuing operations guidance of $0.47 to $0.50 and on an adjusted EPS basis of $0.52 to $0.55. The company expects first quarter sales to be up approximately 0 to 1 percent on a reported basis and up approximately 4 to 5 percent on a core basis compared to first quarter 2018.
EARNINGS CONFERENCE CALL
Pentair President and Chief Executive Officer John L. Stauch and Chief Financial Officer Mark C. Borin will discuss the company’s fourth quarter and full year 2018 results 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 Investor Relations 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 presentations, each of which can be found on Pentair’s website. The webcast and presentations will be archived at the company’s website following the conclusion of the event.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This 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 overall global economic and business conditions impacting our business, including the strength of housing and related markets; competition and pricing pressures in the markets we serve; volatility in currency exchange rates; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions, including the Aquion and Pelican Water Systems acquisitions; the ability to achieve the benefits of our restructuring plans and cost reduction initiatives; risks associated with operating foreign businesses; the impact of material cost and other inflation; our ability to comply with laws and regulations; the impact of changes in laws, regulations and administrative policy, including those that limit U.S. tax benefits or impact trade agreements and tariffs; the outcome of litigation and governmental proceedings; the ability to realize the anticipated benefits from the separation of nVent Electric plc from Pentair; 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 Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2017. All forward-looking statements speak only as of the date of this release. Pentair plc assumes no obligation, and disclaims any obligation, to update the information contained in this release.
ABOUT PENTAIR PLC
At Pentair, we believe the health of our world depends on reliable access to clean water. We deliver a comprehensive range of smart, sustainable water solutions to homes, business and industry around the world. Our industry leading and proven portfolio of solutions enables our customers to access clean, safe water. Whether it’s improving, moving or enjoying water, we help manage the world’s most precious resource. Smart, Sustainable, Water Solutions. For Life.
With approximately 130 locations in 34 countries and 10,000 employees, we believe that the future of water depends on us. Our 2018 revenue was $3.0 billion, and we trade under the ticker symbol PNR. To learn more, visit www.pentair.com.
| Pentair plc and Subsidiaries | ||||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||||
| In millions, except per-share data | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Net sales | $ | 740.5 | $ | 720.8 | $ | 2,965.1 | $ | 2,845.7 | ||||||||||
| Cost of goods sold | 472.5 | 467.1 | 1,917.4 | 1,858.2 | ||||||||||||||
| Gross profit | 268.0 | 253.7 | 1,047.7 | 987.5 | ||||||||||||||
| % of net sales | 36.2 | % | 35.2 | % | 35.3 | % | 34.7 | % | ||||||||||
| Selling, general and administrative | 135.3 | 149.8 | 534.3 | 536.0 | ||||||||||||||
| % of net sales | 18.3 | % | 20.8 | % | 18.0 | % | 18.8 | % | ||||||||||
| Research and development | 19.7 | 18.5 | 76.7 | 73.2 | ||||||||||||||
| % of net sales | 2.7 | % | 2.6 | % | 2.6 | % | 2.6 | % | ||||||||||
| Operating income | 113.0 | 85.4 | 436.7 | 378.3 | ||||||||||||||
| % of net sales | 15.3 | % | 11.8 | % | 14.7 | % | 13.3 | % | ||||||||||
| Other expense (income): | ||||||||||||||||||
| Loss on sale of businesses, net | 0.9 | 0.4 | 7.3 | 4.2 | ||||||||||||||
| Loss on early extinguishment of debt | — | — | 17.1 | 101.4 | ||||||||||||||
| Other expense (income) | 1.6 | 9.5 | (0.1 | ) | 12.6 | |||||||||||||
| Net interest expense | 4.7 | 13.1 | 32.6 | 87.3 | ||||||||||||||
| % of net sales | 0.6 | % | 1.8 | % | 1.1 | % | 3.1 | % | ||||||||||
| Income from continuing operations before income taxes | 105.8 | 62.4 | 379.8 | 172.8 | ||||||||||||||
| Provision for income taxes | 11.6 | 6.6 | 58.1 | 58.7 | ||||||||||||||
| Effective tax rate | 11.0 | % | 10.6 | % | 15.3 | % | 34.0 | % | ||||||||||
| Net income from continuing operations | 94.2 | 55.8 | 321.7 | 114.1 | ||||||||||||||
| (Loss) income from discontinued operations, net of tax | (1.3 | ) | 151.6 | 25.7 | 371.3 | |||||||||||||
| (Loss) gain from sale of discontinued operations, net of tax | — | (17.8 | ) | — | 181.1 | |||||||||||||
| Net income | $ | 92.9 | $ | 189.6 | $ | 347.4 | $ | 666.5 | ||||||||||
| Earnings (loss) per ordinary share | ||||||||||||||||||
| Basic | ||||||||||||||||||
| Continuing operations | $ | 0.55 | $ | 0.32 | $ | 1.83 | $ | 0.63 | ||||||||||
| Discontinued operations | (0.01 | ) | 0.73 | 0.15 | 3.04 | |||||||||||||
| Basic earnings per ordinary share | $ | 0.54 | $ | 1.05 | $ | 1.98 | $ | 3.67 | ||||||||||
| Diluted | ||||||||||||||||||
| Continuing operations | $ | 0.54 | $ | 0.30 | $ | 1.81 | $ | 0.62 | ||||||||||
| Discontinued operations | (0.01 | ) | 0.74 | 0.15 | 3.01 | |||||||||||||
| Diluted earnings per ordinary share | $ | 0.53 | $ | 1.04 | $ | 1.96 | $ | 3.63 | ||||||||||
| Weighted average ordinary shares outstanding | ||||||||||||||||||
| Basic | 172.9 | 181.4 | 175.8 | 181.7 | ||||||||||||||
| Diluted | 174.0 | 183.6 | 177.3 | 183.7 | ||||||||||||||
| Cash dividends paid per ordinary share | $ | 0.175 | $ | 0.345 | $ | 1.05 | $ | 1.38 | ||||||||||
| Pentair plc and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
December 31, | December 31, 2017 | |||||||
| In millions | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 74.3 | $ | 86.3 | ||||
| Accounts and notes receivable, net | 488.2 | 483.1 | ||||||
| Inventories | 387.5 | 356.9 | ||||||
| Other current assets | 89.4 | 114.5 | ||||||
| Current assets held for sale | — | 708.0 | ||||||
| Total current assets | 1,039.4 | 1,748.8 | ||||||
| Property, plant and equipment, net | 272.6 | 279.8 | ||||||
| Other assets | ||||||||
| Goodwill | 2,072.7 | 2,112.8 | ||||||
| Intangibles, net | 276.3 | 321.8 | ||||||
| Other non-current assets | 145.5 | 180.9 | ||||||
| Non-current assets held for sale | — | 3,989.6 | ||||||
| Total other assets | 2,494.5 | 6,605.1 | ||||||
| Total assets | $ | 3,806.5 | $ | 8,633.7 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 378.6 | $ | 321.5 | ||||
| Employee compensation and benefits | 111.7 | 115.8 | ||||||
| Other current liabilities | 328.4 | 401.3 | ||||||
| Current liabilities held for sale | — | 360.8 | ||||||
| Total current liabilities | 818.7 | 1,199.4 | ||||||
| Other liabilities | ||||||||
| Long-term debt | 787.6 | 1,440.7 | ||||||
| Pension and other post-retirement compensation and benefits | 90.0 | 96.4 | ||||||
| Deferred tax liabilities | 105.9 | 108.6 | ||||||
| Other non-current liabilities | 168.2 | 213.8 | ||||||
| Non-current liabilities held for sale | — | 537.0 | ||||||
| Total liabilities | 1,970.4 | 3,595.9 | ||||||
| Equity | 1,836.1 | 5,037.8 | ||||||
| Total liabilities and equity | $ | 3,806.5 | $ | 8,633.7 | ||||
| Pentair plc and Subsidiaries | ||||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||
| Years ended December 31 | ||||||||||
| In millions | 2018 | 2017 | ||||||||
| Operating activities | ||||||||||
| Net income | $ | 347.4 | $ | 666.5 | ||||||
| Income from discontinued operations, net of tax | (25.7 | ) | (371.3 | ) | ||||||
| Gain from sale of discontinued operations, net of tax | — | (181.1 | ) | |||||||
| Adjustments to reconcile net income from continuing operations to net cash provided by (used for) operating activities of continuing operations | ||||||||||
| Equity income of unconsolidated subsidiaries | (8.4 | ) | (1.3 | ) | ||||||
| Depreciation | 49.7 | 50.8 | ||||||||
| Amortization | 34.9 | 36.4 | ||||||||
| Loss on sale of businesses | 7.3 | 4.2 | ||||||||
| Deferred income taxes | (4.1 | ) | (18.0 | ) | ||||||
| Share-based compensation | 20.9 | 39.6 | ||||||||
| Trade name and other impairment | 12.0 | 15.6 | ||||||||
| Loss on early extinguishment of debt | 17.1 | 101.4 | ||||||||
| Changes in assets and liabilities, net of effects of business acquisitions | ||||||||||
| Accounts and notes receivable | (15.3 | ) | (13.4 | ) | ||||||
| Inventories | (40.1 | ) | (20.5 | ) | ||||||
| Other current assets | 31.2 | (13.0 | ) | |||||||
| Accounts payable | 58.3 | 15.6 | ||||||||
| Employee compensation and benefits | (0.6 | ) | (1.4 | ) | ||||||
| Other current liabilities | (3.3 | ) | (54.6 | ) | ||||||
| Other non-current assets and liabilities | (23.2 | ) | 23.1 | |||||||
| Net cash provided by (used for) operating activities of continuing operations | 458.1 | 278.6 | ||||||||
| Net cash provided by (used for) operating activities of discontinued operations | (19.0 | ) | 341.6 | |||||||
| Net cash provided by (used for) operating activities | 439.1 | 620.2 | ||||||||
| Investing activities | ||||||||||
| Capital expenditures | (48.2 | ) | (39.1 | ) | ||||||
| Proceeds from sale of property and equipment | 0.2 | 3.7 | ||||||||
| (Payments due to) proceeds from sale of businesses and other | (12.8 | ) | 2,759.4 | |||||||
| Acquisitions, net of cash acquired | (0.9 | ) | (45.9 | ) | ||||||
| Net cash provided by (used for) investing activities of continuing operations | (61.7 | ) | 2,678.1 | |||||||
| Net cash provided by (used for) investing activities of discontinued operations | (7.1 | ) | (47.7 | ) | ||||||
| Net cash provided by (used for) investing activities | (68.8 | ) | 2,630.4 | |||||||
| Financing activities | ||||||||||
| Net receipts (repayments) of commercial paper and revolving long-term debt | 39.7 | (913.1 | ) | |||||||
| Repayments of long-term debt | (675.1 | ) | (2,009.3 | ) | ||||||
| Premium paid on early extinguishment of debt | (16.0 | ) | (94.9 | ) | ||||||
| Transfer of cash to nVent | (74.2 | ) | — | |||||||
| Distribution of cash from nVent | 993.6 | — | ||||||||
| Shares issued to employees, net of shares withheld | 13.3 | 37.2 | ||||||||
| Repurchases of ordinary shares | (500.0 | ) | (200.0 | ) | ||||||
| Dividends paid | (187.2 | ) | (251.7 | ) | ||||||
| Other | (2.0 | ) | (0.8 | ) | ||||||
| Net cash provided by (used for) financing activities | (407.9 | ) | (3,432.6 | ) | ||||||
| Change in cash held for sale | 27.0 | (5.4 | ) | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (1.4 | ) | 56.8 | |||||||
| Change in cash and cash equivalents | (12.0 | ) | (130.6 | ) | ||||||
| Cash and cash equivalents, beginning of year | 86.3 | 216.9 | ||||||||
| Cash and cash equivalents, end of year | $ | 74.3 | $ | 86.3 | ||||||
| Pentair plc and Subsidiaries | ||||||||||
| Reconciliation of the GAAP operating activities cash flow to the non-GAAP free cash flow (Unaudited) | ||||||||||
| Year ended December 31 | ||||||||||
| In millions | 2018 | 2017 | ||||||||
| Net cash provided by (used for) operating activities of continuing operations | $ | 458.1 | $ | 278.6 | ||||||
| Capital expenditures | (48.2 | ) | (39.1 | ) | ||||||
| Proceeds from sale of property and equipment | 0.2 | 3.7 | ||||||||
| Free cash flow from continuing operations | $ | 410.1 | $ | 243.2 | ||||||
| Net cash provided by (used for) operating activities of discontinued operations | (19.0 | ) | 341.6 | |||||||
| Capital expenditures of discontinued operations | (7.4 | ) | (38.6 | ) | ||||||
| Proceeds from sale of property and equipment of discontinued operations | 2.3 | 4.5 | ||||||||
Free cash flow | $ | 386.0 | $ | 550.7 | ||||||
| Pentair plc and Subsidiaries | |||||||||||||||||||||||||
| Supplemental Financial Information by Reportable Segment (Unaudited) | |||||||||||||||||||||||||
| 2018 | |||||||||||||||||||||||||
| First | Second | Third | Fourth | Full | |||||||||||||||||||||
In millions | Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||
| Aquatic Systems | $ | 240.4 | $ | 276.2 | $ | 232.7 | $ | 276.8 | $ | 1,026.1 | |||||||||||||||
| Filtration Solutions | 251.6 | 262.1 | 240.4 | 246.9 | 1,001.0 | ||||||||||||||||||||
| Flow Technologies | 240.3 | 241.9 | 238.0 | 216.5 | 936.7 | ||||||||||||||||||||
| Other | 0.3 | 0.4 | 0.3 | 0.3 | 1.3 | ||||||||||||||||||||
| Consolidated | $ | 732.6 | $ | 780.6 | $ | 711.4 | $ | 740.5 | $ | 2,965.1 | |||||||||||||||
| Segment income (loss) | |||||||||||||||||||||||||
| Aquatic Systems | $ | 60.0 | $ | 79.6 | $ | 59.9 | $ | 78.1 | $ | 277.6 | |||||||||||||||
| Filtration Solutions | 33.7 | 52.3 | 38.4 | 44.1 | 168.5 | ||||||||||||||||||||
| Flow Technologies | 38.7 | 44.4 | 36.6 | 25.9 | 145.6 | ||||||||||||||||||||
| Other | (15.4 | ) | (12.2 | ) | (13.1 | ) | (14.2 | ) | (54.9 | ) | |||||||||||||||
| Consolidated | $ | 117.0 | $ | 164.1 | $ | 121.8 | $ | 133.9 | $ | 536.8 | |||||||||||||||
| Return on sales | |||||||||||||||||||||||||
| Aquatic Systems | 25.0 | % | 28.8 | % | 25.7 | % | 28.2 | % | 27.1 | % | |||||||||||||||
| Filtration Solutions | 13.4 | % | 20.0 | % | 16.0 | % | 17.9 | % | 16.8 | % | |||||||||||||||
| Flow Technologies | 16.1 | % | 18.4 | % | 15.4 | % | 12.0 | % | 15.5 | % | |||||||||||||||
| Consolidated | 16.0 | % | 21.0 | % | 17.1 | % | 18.1 | % | 18.1 | % | |||||||||||||||
| Pentair plc and Subsidiaries | |||||||||||||||||||||||||
| Supplemental Financial Information by Reportable Segment (Unaudited) | |||||||||||||||||||||||||
| 2017 | |||||||||||||||||||||||||
| First | Second | Third | Fourth | Full | |||||||||||||||||||||
In millions | Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||
| Aquatic Systems | $ | 222.5 | $ | 253.7 | $ | 211.8 | $ | 251.6 | $ | 939.6 | |||||||||||||||
| Filtration Solutions | 230.8 | 263.8 | 242.4 | 253.6 | 990.6 | ||||||||||||||||||||
| Flow Technologies | 229.6 | 236.2 | 233.0 | 215.4 | 914.2 | ||||||||||||||||||||
| Other | 0.4 | 0.3 | 0.4 | 0.2 | 1.3 | ||||||||||||||||||||
| Consolidated | $ | 683.3 | $ | 754.0 | $ | 687.6 | $ | 720.8 | $ | 2,845.7 | |||||||||||||||
| Segment income (loss) | |||||||||||||||||||||||||
| Aquatic Systems | $ | 55.5 | $ | 74.3 | $ | 53.1 | $ | 71.2 | $ | 254.1 | |||||||||||||||
| Filtration Solutions | 24.0 | 49.0 | 40.4 | 41.1 | 154.5 | ||||||||||||||||||||
| Flow Technologies | 33.1 | 40.3 | 39.3 | 27.9 | 140.6 | ||||||||||||||||||||
| Other | (15.6 | ) | (12.0 | ) | (12.6 | ) | (12.5 | ) | (52.7 | ) | |||||||||||||||
| Consolidated | $ | 97.0 | $ | 151.6 | $ | 120.2 | $ | 127.7 | $ | 496.5 | |||||||||||||||
| Return on sales | |||||||||||||||||||||||||
| Aquatic Systems | 24.9 | % | 29.3 | % | 25.1 | % | 28.3 | % | 27.0 | % | |||||||||||||||
| Filtration Solutions | 10.4 | % | 18.6 | % | 16.7 | % | 16.2 | % | 15.6 | % | |||||||||||||||
| Flow Technologies | 14.4 | % | 17.1 | % | 16.9 | % | 13.0 | % | 15.4 | % | |||||||||||||||
| Consolidated | 14.2 | % | 20.1 | % | 17.5 | % | 17.7 | % | 17.5 | % | |||||||||||||||
| Pentair plc and Subsidiaries | |||||||||||||||||||||||||
| Reconciliation of the GAAP year ended December 31, 2018 to the non-GAAP | |||||||||||||||||||||||||
| excluding the effect of 2018 adjustments (Unaudited) | |||||||||||||||||||||||||
| First | Second | Third | Fourth | Full | |||||||||||||||||||||
| In millions, except per-share data | Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||||||
| Net sales | $ | 732.6 | $ | 780.6 | $ | 711.4 | $ | 740.5 | $ | 2,965.1 | |||||||||||||||
| Operating income | 92.7 | 122.6 | 108.4 | 113.0 | 436.7 | ||||||||||||||||||||
| % of net sales | 12.7 | % | 15.7 | % | 15.2 | % | 15.3 | % | 14.7 | % | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Restructuring and other | 5.6 | 19.0 | 3.5 | 3.7 | 31.8 | ||||||||||||||||||||
| Intangible amortization | 9.3 | 9.1 | 8.6 | 7.9 | 34.9 | ||||||||||||||||||||
| Trade name and other impairment | — | 6.0 | — | 6.0 | 12.0 | ||||||||||||||||||||
| Corporate allocations | 8.8 | 2.2 | — | — | 11.0 | ||||||||||||||||||||
| Deal related costs and expenses | — | — | — | 2.0 | 2.0 | ||||||||||||||||||||
| Equity income of unconsolidated subsidiaries | 0.6 | 5.2 | 1.3 | 1.3 | 8.4 | ||||||||||||||||||||
| Segment income | 117.0 | 164.1 | 121.8 | 133.9 | 536.8 | ||||||||||||||||||||
| Return on sales | 16.0 | % | 21.0 | % | 17.1 | % | 18.1 | % | 18.1 | % | |||||||||||||||
| Net income from continuing operations—as reported | 58.4 | 77.9 | 91.2 | 94.2 | 321.7 | ||||||||||||||||||||
| Loss on sale of businesses | 5.3 | 0.9 | 0.2 | 0.9 | 7.3 | ||||||||||||||||||||
| Loss on early extinguishment of debt | — | 17.1 | — | — | 17.1 | ||||||||||||||||||||
| Interest expense adjustment | 6.0 | 2.4 | — | — | 8.4 | ||||||||||||||||||||
| Pension and other post-retirement mark-to-market loss | — | — | 2.2 | 1.4 | 3.6 | ||||||||||||||||||||
| Adjustments to operating income | 23.7 | 36.3 | 12.1 | 19.6 | 91.7 | ||||||||||||||||||||
| Income tax adjustments | (4.5 | ) | (7.1 | ) | (10.3 | ) | (11.5 | ) | (33.4 | ) | |||||||||||||||
| Net income from continuing operations—as adjusted | $ | 88.9 | $ | 127.5 | $ | 95.4 | $ | 104.6 | $ | 416.4 | |||||||||||||||
| Continuing earnings per ordinary share—diluted | |||||||||||||||||||||||||
| Diluted earnings per ordinary share—as reported | $ | 0.32 | $ | 0.44 | $ | 0.52 | $ | 0.54 | $ | 1.81 | |||||||||||||||
| Adjustments | 0.17 | 0.27 | 0.02 | 0.06 | 0.54 | ||||||||||||||||||||
| Diluted earnings per ordinary share—as adjusted | $ | 0.49 | $ | 0.71 | $ | 0.54 | $ | 0.60 | $ | 2.35 | |||||||||||||||
| Pentair plc and Subsidiaries | ||||||||||||
| Reconciliation of the GAAP year ended December 31, 2019 to the non-GAAP | ||||||||||||
| excluding the effect of 2019 adjustments (Unaudited) | ||||||||||||
| Forecast | ||||||||||||
| First | Full | |||||||||||
| In millions, except per-share data | Quarter | Year | ||||||||||
| Net sales | approx | Up 0 - 1 % | approx | Up 5 - 6 % | ||||||||
| Operating income | approx | Up 12 - 20 % | approx | Up 22 - 26 % | ||||||||
| Adjustments: | ||||||||||||
| Intangible amortization | approx | $10 | approx | $45 | ||||||||
| Equity income of unconsolidated subsidiaries | approx | $1 | approx | $4 | ||||||||
| Segment income | approx | Up 2 - 5 % | approx | Up 8 - 12 % | ||||||||
| Net income from continuing operations—as reported | approx | $82 - $87 | approx | $394 - $411 | ||||||||
| Adjustments to operating income | approx | 10 | approx | 45 | ||||||||
| Income tax adjustments | approx | (2) | approx | (9) | ||||||||
| Net income from continuing operations—as adjusted | approx | $90 - $95 | approx | $430 - $447 | ||||||||
| Continuing earnings per ordinary share—diluted | ||||||||||||
| Diluted earnings per ordinary share—as reported | approx | $0.47 - $0.50 | approx | $2.29 - $2.39 | ||||||||
| Adjustments | approx | 0.05 | approx | 0.21 | ||||||||
| Diluted earnings per ordinary share—as adjusted | approx | $0.52 - $0.55 | approx | $2.50 - $2.60 | ||||||||
| Pentair plc and Subsidiaries | ||||||||||||||||||||||||||||||||
| Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment | ||||||||||||||||||||||||||||||||
| For the Quarter and Year Ending December 31, 2018 (Unaudited) | ||||||||||||||||||||||||||||||||
| Q4 Net Sales Growth | Full Year Net Sales Growth | |||||||||||||||||||||||||||||||
| Acq. / | Acq. / | |||||||||||||||||||||||||||||||
| Core | Currency | Div. | Total | Core | Currency | Div. | Total | |||||||||||||||||||||||||
| Total Pentair | 5.7 | % | (1.2 | )% | (1.7 | )% | 2.8 | % | 4.8 | % | 0.6 | % | (1.2 | )% | 4.2 | % | ||||||||||||||||
| Aquatic Systems | 12.6 | % | (0.6 | )% | (2.0 | )% | 10.0 | % | 10.5 | % | (0.1 | )% | (1.2 | )% | 9.2 | % | ||||||||||||||||
| Filtration Solutions | 0.4 | % | (2.2 | )% | (0.9 | )% | (2.7 | )% | 0.8 | % | 1.1 | % | (0.9 | )% | 1.0 | % | ||||||||||||||||
| Flow Technologies | 4.0 | % | (1.3 | )% | (2.1 | )% | 0.6 | % | 3.2 | % | 0.6 | % | (1.3 | )% | 2.5 | % | ||||||||||||||||
| Pentair plc and Subsidiaries | |||||||||||||||||||||||||||||||||||
| Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment | |||||||||||||||||||||||||||||||||||
| For the Quarter Ending March 31, 2019 and Year Ending December 31, 2019 (Unaudited) | |||||||||||||||||||||||||||||||||||
| Forecast | |||||||||||||||||||||||||||||||||||
| Q1 Net Sales Growth | Full Year Net Sales Growth | ||||||||||||||||||||||||||||||||||
| Acq. / | Acq. / | ||||||||||||||||||||||||||||||||||
| Core | Currency | Div. | Total | Core | Currency | Div. | Total | ||||||||||||||||||||||||||||
| Total Pentair | approx | 4 - 5 | % | (2 | ) % | (2 | ) % | 0 - 1 | % | 4 - 5 | % | (1 | ) % | 2 | % | 5 - 6 | % | ||||||||||||||||||
| Aquatic Systems | approx | 4 - 6 | % | — | (1 | ) % | 3 - 5 | % | 5 - 7 | % | (1 | ) % | — | 4 - 6 | % | ||||||||||||||||||||
| Filtration Solutions | approx | 0 - 1 | % | (4 | ) % | (1 | ) % | (5) - (4) | % | 1 - 4 | % | (1 | ) % | 6 | % | 6 - 9 | % | ||||||||||||||||||
| Flow Technologies | approx | 3 - 6 | % | (2 | ) % | (3 | ) % | (2) - 1 | % | 4 - 6 | % | (1 | ) % | (2 | ) % | 1 - 3 | % | ||||||||||||||||||
| Pentair plc and Subsidiaries | |||||||||||||||||||||||||
| Reconciliation of the GAAP year ended December 31, 2017 to the non-GAAP | |||||||||||||||||||||||||
| excluding the effect of 2017 adjustments (Unaudited) | |||||||||||||||||||||||||
| First | Second | Third | Fourth | Full | |||||||||||||||||||||
| In millions, except per-share data | Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||||||
| Net sales | $ | 683.3 | $ | 754.0 | $ | 687.6 | $ | 720.8 | $ | 2,845.7 | |||||||||||||||
| Operating income | 61.9 | 129.2 | 101.8 | 85.4 | 378.3 | ||||||||||||||||||||
| % of net sales | 9.1 | % | 17.1 | % | 14.8 | % | 11.8 | % | 13.3 | % | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Restructuring and other | 11.6 | 5.9 | 1.4 | 9.3 | 28.2 | ||||||||||||||||||||
| Intangible amortization | 8.7 | 9.3 | 9.2 | 9.2 | 36.4 | ||||||||||||||||||||
| Tradename and other impairment | — | — | — | 15.6 | 15.6 | ||||||||||||||||||||
| Corporate allocations | 14.6 | 6.8 | 7.5 | 7.8 | 36.7 | ||||||||||||||||||||
| Equity income of unconsolidated subsidiaries | 0.2 | 0.4 | 0.3 | 0.4 | 1.3 | ||||||||||||||||||||
| Segment income | 97.0 | 151.6 | 120.2 | 127.7 | 496.5 | ||||||||||||||||||||
| Return on sales | 14.2 | % | 20.1 | % | 17.5 | % | 17.7 | % | 17.5 | % | |||||||||||||||
| Net income (loss) from continuing operations | 12.7 | (3.4 | ) | 49.0 | 55.8 | 114.1 | |||||||||||||||||||
| Loss on sale of businesses | — | — | 3.8 | 0.4 | 4.2 | ||||||||||||||||||||
| Pension and other post-retirement mark-to-market loss | — | — | — | 8.5 | 8.5 | ||||||||||||||||||||
| Loss on early extinguishment of debt | — | 101.4 | — | — | 101.4 | ||||||||||||||||||||
| Interest expense adjustment | 16.5 | 11.9 | 6.8 | 6.5 | 41.7 | ||||||||||||||||||||
| Adjustments to operating income | 34.9 | 22.0 | 18.1 | 41.9 | 116.9 | ||||||||||||||||||||
| Income tax adjustments | (2.5 | ) | (22.5 | ) | 11.7 | (17.2 | ) | (30.5 | ) | ||||||||||||||||
| Net income from continuing operations—as adjusted | $ | 61.6 | $ | 109.4 | $ | 89.4 | $ | 95.9 | $ | 356.3 | |||||||||||||||
| Continuing earnings per ordinary share—diluted | |||||||||||||||||||||||||
| Diluted earnings per ordinary share | $ | 0.07 | $ | (0.02 | ) | $ | 0.27 | $ | 0.30 | $ | 0.62 | ||||||||||||||
| Adjustments | 0.26 | 0.62 | 0.22 | 0.22 | 1.32 | ||||||||||||||||||||
| Diluted earnings per ordinary share—as adjusted | $ | 0.33 | $ | 0.60 | $ | 0.49 | $ | 0.52 | $ | 1.94 | |||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190129005245/en/
Jim Lucas
Senior Vice President, Investor Relations and Treasurer
Direct: 763-656-5575
Email: jim.lucas@pentair.com
Rebecca Osborn
Senior Manager, External Communications
Direct: 763-656-5589
Email: rebecca.osborn@pentair.com
Source: Pentair plc