- Sales of $1.0 billion
- Operating income of $181 million reflecting ROS of 17.8
percent, flat to prior year; on an adjusted basis, ROS expanded 90
basis points to 21.4 percent
- GAAP EPS of $0.80 and adjusted EPS of $0.94
- The company updates its full year 2024 GAAP EPS guidance to
approximately $3.76 to $3.86 and reiterates EPS guidance on an
adjusted basis of approximately $4.15 to $4.25
Reconciliations of GAAP to Non-GAAP measures are in the attached
financial tables.
Pentair plc (NYSE: PNR), a leader in helping the world
sustainably move, improve and enjoy water, life’s most essential
resource, today announced first quarter 2024 sales of $1.0 billion.
Sales were down 1 percent compared to sales for the same period
last year. Excluding currency translation, acquisitions and
divestitures, core sales declined 1 percent in the first quarter.
First quarter 2024 earnings per diluted share from continuing
operations (“EPS”) were $0.80 compared to $0.78 in the first
quarter of 2023. On an adjusted basis, the company reported first
quarter 2024 EPS of $0.94 compared to $0.91 in the first quarter of
2023. Segment income, adjusted net income, free cash flow and
adjusted EPS are described in the attached schedules.
John L. Stauch, Pentair’s President and Chief Executive Officer
commented: “Our balanced water portfolio delivered strong first
quarter results that exceeded our expectations. For the first time
in nearly four years, we are pleased to be entering what we believe
to be a more normal operating environment. Order rates remained
solid and our backlog and lead times have been normalizing. Our
Transformation initiatives remained on track and continue to fuel
our return on sales goal of 24 percent with potential upside by the
end of fiscal 2026 as we highlighted at our recent Investor
Day.”
First quarter 2024 operating income was $181 million, down 2
percent compared to operating income for the first quarter of 2023,
and return on sales (“ROS”) was 17.8 percent, or flat when compared
to the first quarter of 2023. On an adjusted basis, the company
reported segment income of $217 million for the first quarter of
2024, up 3 percent compared to segment income for the first quarter
of 2023, and ROS was 21.4 percent, an increase of 90 basis points
when compared to the first quarter of 2023.
Flow sales were down 2 percent compared to sales for the same
period last year. Excluding currency translation, acquisitions and
divestitures, core sales declined 2 percent in the first quarter.
Segment income of $77 million was up 19 percent compared to the
first quarter of 2023, and ROS was 20.1 percent, an increase of 350
basis points when compared to the first quarter of 2023.
Water Solutions sales were flat compared to sales for the same
period last year. Excluding currency translation, acquisitions and
divestitures, core sales increased 1 percent in the first quarter.
Segment income of $56 million was up 6 percent compared to the
first quarter of 2023, and ROS was 20.4 percent, an increase of 110
basis points when compared to the first quarter of 2023.
Pool sales were down 1 percent compared to sales for the same
period last year. Excluding currency translation, acquisitions and
divestitures, core sales declined 1 percent in the first quarter.
Segment income of $111 million was down 5 percent compared to the
first quarter of 2023, and ROS was 30.8 percent, a decrease of 110
basis points when compared to the first quarter of 2023.
Net cash used for operating activities of continuing operations
was $107 million for the first quarters of 2024 and 2023. Free cash
flow used for continuing operations for the quarter was $127
million compared to $123 million in the first quarter of 2023.
Pentair paid a regular cash dividend of $0.23 per share in the
first quarter of 2024. Pentair previously announced on February 19,
2024 that it will pay a regular quarterly cash dividend of $0.23
per share on May 3, 2024 to shareholders of record at the close of
business on April 19, 2024. This year marks the 48th consecutive
year that Pentair has increased its dividend.
OUTLOOK
Mr. Stauch concluded, “We are reiterating our full year outlook
and introducing strong Q2 guidance reflecting solid execution
across all three segments while being mindful of the uncertainty
across the global macroeconomic and geopolitical landscape. We
continue to focus on investing in the long-term growth of Pentair
and remain confident in our balanced water portfolio and
Transformation initiatives.”
The company updates its estimated 2024 GAAP EPS from continuing
operations to approximately $3.76 to $3.86 and reiterates its
guidance on an adjusted EPS basis of approximately $4.15 to $4.25.
This is an increase of 11 percent to 13 percent compared to 2023.
The Company anticipates full year 2024 sales to increase 2 percent
to 3 percent on a reported basis.
In addition, the company introduces second quarter 2024 GAAP EPS
from continuing operations guidance of approximately $1.08 to $1.10
and on an adjusted EPS basis of approximately $1.15 to $1.17. The
company expects second quarter sales to be up approximately 1
percent to 2 percent on a reported basis compared to the second
quarter of 2023.
EARNINGS CONFERENCE CALL
Pentair President and Chief Executive Officer John L. Stauch and
Chief Financial Officer Robert P. Fishman will discuss the
company’s first quarter 2024 results on a 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,” “could,” “positioned,” “strategy,”
or “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
overall global economic and business conditions impacting our
business, including the strength of housing and related markets and
conditions relating to international hostilities; supply, demand,
logistics, competition and pricing pressures related to and in the
markets we serve; the ability to achieve the benefits of our
restructuring plans, cost reduction initiatives and Transformation
Program; the impact of raw material, logistics and labor costs and
other inflation; volatility in currency exchange rates and interest
rates; failure of markets to accept new product introductions and
enhancements; the ability to successfully identify, finance,
complete and integrate acquisitions; risks associated with
operating foreign businesses; the impact of seasonality of sales
and weather conditions; 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; and the ability to achieve our
long-term strategic operating and environmental, social and
governance (“ESG”) goals and targets. Additional information
concerning these and other factors is contained in our filings with
the U.S. Securities and Exchange Commission, including our Annual
Report on Form 10-K for the year ended December 31, 2023. All
forward-looking statements, including all financial forecasts,
speak only as of the date of this release. Pentair assumes no
obligation, and disclaims any obligation, to update the information
contained in this release.
ABOUT PENTAIR PLC
At Pentair, we help the world sustainably move, improve and
enjoy water, life’s most essential resource. From our residential
and commercial water solutions, to industrial water management and
everything in between, Pentair is focused on smart, sustainable
water solutions that help our planet and people thrive.
Pentair had revenue in 2023 of approximately $4.1 billion, and
trades under the ticker symbol PNR. With approximately 10,500
global employees serving customers in more than 150 countries, we
work to help improve lives and the environment around the world. To
learn more, visit www.pentair.com.
Pentair plc and
Subsidiaries
Condensed Consolidated
Statements of Operations (Unaudited)
Three months ended
In millions, except per-share data
March 31, 2024
March 31, 2023
Net sales
$
1,017.2
$
1,028.6
Cost of goods sold
627.1
646.8
Gross profit
390.1
381.8
% of net sales
38.4
%
37.1
%
Selling, general and administrative
expenses
185.2
173.3
% of net sales
18.2
%
16.8
%
Research and development expenses
24.1
24.9
% of net sales
2.4
%
2.4
%
Operating income
180.8
183.6
% of net sales
17.8
%
17.8
%
Other expense
Other expense
0.1
0.7
Net interest expense
27.3
32.4
% of net sales
2.7
%
3.1
%
Income from continuing operations before
income taxes
153.4
150.5
Provision for income taxes
19.9
22.0
Effective tax rate
13.0
%
14.6
%
Net income from continuing
operations
133.5
128.5
(Loss) income from discontinued
operations, net of tax
(0.2
)
1.2
Net income
$
133.3
$
129.7
Earnings per ordinary share
Basic
Continuing operations
$
0.80
$
0.78
Discontinued operations
—
0.01
Basic earnings per ordinary share
$
0.80
$
0.79
Diluted
Continuing operations
$
0.80
$
0.78
Discontinued operations
—
0.01
Diluted earnings per ordinary share
$
0.80
$
0.79
Weighted average ordinary shares
outstanding
Basic
165.7
164.8
Diluted
167.2
165.8
Cash dividends paid per ordinary
share
$
0.23
$
0.22
Pentair plc and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
March 31, 2024
December 31,
2023
In millions
Assets
Current assets
Cash and cash equivalents
$
109.1
$
170.3
Accounts receivable, net
807.4
561.7
Inventories
675.1
677.7
Other current assets
157.0
159.3
Total current assets
1,748.6
1,569.0
Property, plant and equipment,
net
363.1
362.0
Other assets
Goodwill
3,255.8
3,274.6
Intangibles, net
1,026.2
1,042.4
Other non-current assets
345.0
315.3
Total other assets
4,627.0
4,632.3
Total assets
$
6,738.7
$
6,563.3
Liabilities and Equity
Current liabilities
Accounts payable
$
308.8
$
278.9
Employee compensation and benefits
96.0
125.4
Other current liabilities
514.5
545.3
Total current liabilities
919.3
949.6
Other liabilities
Long-term debt
2,084.3
1,988.3
Pension and other post-retirement
compensation and benefits
73.1
73.6
Deferred tax liabilities
39.0
40.0
Other non-current liabilities
295.8
294.7
Total liabilities
3,411.5
3,346.2
Equity
3,327.2
3,217.1
Total liabilities and equity
$
6,738.7
$
6,563.3
Pentair plc and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Three months ended
In millions
March 31, 2024
March 31, 2023
Operating activities
Net income
$
133.3
$
129.7
Loss (income) from discontinued
operations, net of tax
0.2
(1.2
)
Adjustments to reconcile net income
from continuing operations to net cash provided by (used for)
operating activities
Equity income of unconsolidated
subsidiaries
(0.9
)
(0.2
)
Depreciation
14.9
14.7
Amortization
13.5
13.8
Deferred income taxes
4.8
(14.0
)
Share-based compensation
7.9
7.2
Asset impairment and write-offs
0.8
4.1
Changes in assets and liabilities, net
of effects of business acquisitions
Accounts receivable
(249.5
)
(184.8
)
Inventories
(3.2
)
6.0
Other current assets
(11.8
)
(17.4
)
Accounts payable
33.0
(24.9
)
Employee compensation and benefits
(28.3
)
(12.8
)
Other current liabilities
(28.1
)
(28.7
)
Other non-current assets and
liabilities
6.0
1.9
Net cash used for operating activities of
continuing operations
(107.4
)
(106.6
)
Net cash used for operating activities of
discontinued operations
(0.2
)
—
Net cash used for operating activities
(107.6
)
(106.6
)
Investing activities
Capital expenditures
(19.3
)
(16.6
)
Proceeds from sale of property and
equipment
—
0.2
Acquisitions, net of cash acquired
—
0.2
Net cash used for investing activities
(19.3
)
(16.2
)
Financing activities
Net borrowings of revolving long-term
debt
101.4
173.6
Repayments of long-term debt
(6.3
)
—
Shares issued to employees, net of shares
withheld
6.1
(4.1
)
Dividends paid
(38.0
)
(36.2
)
Net cash provided by financing
activities
63.2
133.3
Effect of exchange rate changes on cash
and cash equivalents
2.5
(0.2
)
Change in cash and cash
equivalents
(61.2
)
10.3
Cash and cash equivalents, beginning of
period
170.3
108.9
Cash and cash equivalents, end of
period
$
109.1
$
119.2
Pentair plc and
Subsidiaries
Reconciliation of the GAAP
Operating Activities Cash Flow to the Non-GAAP Free Cash Flow
(Unaudited)
Three months ended
Three months ended
In millions
March 31, 2024
March 31, 2023
Net cash used for operating activities of
continuing operations
$
(107.4
)
$
(106.6
)
Capital expenditures
(19.3
)
(16.6
)
Proceeds from sale of property and
equipment
—
0.2
Free cash flow from continuing
operations
(126.7
)
(123.0
)
Net cash used for operating activities of
discontinued operations
(0.2
)
—
Free cash flow
$
(126.9
)
$
(123.0
)
Pentair plc and
Subsidiaries
Supplemental Financial
Information by Reportable Segment (Unaudited)
2024
2023
In millions
First Quarter
First Quarter
Net sales
Flow
$
384.3
$
391.8
Water Solutions
273.1
272.0
Pool
359.5
364.3
Other
0.3
0.5
Consolidated
$
1,017.2
$
1,028.6
Segment income (loss)
Flow
$
77.3
$
65.0
Water Solutions
55.6
52.4
Pool
110.8
116.2
Other
(26.4
)
(22.6
)
Consolidated
$
217.3
$
211.0
Return on sales
Flow
20.1
%
16.6
%
Water Solutions
20.4
%
19.3
%
Pool
30.8
%
31.9
%
Consolidated adjusted return on sales
21.4
%
20.5
%
Pentair plc and
Subsidiaries
Reconciliation of GAAP to
Non-GAAP Financial Measures for the Year Ending December 31,
2024
Excluding the Effect of
Adjustments (Unaudited)
Actual
Forecast
In millions, except per-share data
First Quarter
Second Quarter
Full Year
Net sales
$
1,017.2
approx
Up 1% - 2%
approx
Up 2% - 3%
Operating income
180.8
approx
Up 17% - 18%
approx
Up 14% - 17%
Return on sales
17.8
%
Adjustments:
Restructuring and other
4.6
approx
$
—
approx
$
5
Transformation costs
17.0
approx
—
approx
17
Intangible amortization
13.5
approx
14
approx
55
Legal accrual adjustments and
settlements
(0.3
)
approx
—
approx
—
Asset impairment and write-offs
0.8
approx
—
approx
1
Equity income of unconsolidated
subsidiaries
0.9
approx
1
approx
4
Segment income
217.3
approx
Up 10% - 12%
approx
Up 8% - 11%
Adjusted return on sales
21.4
%
Net income from continuing operations—as
reported
133.5
approx
$180 - $183
approx
$626 - $643
Adjustments to operating income
35.6
approx
14
approx
78
Income tax adjustments
(11.3
)
approx
(2)
approx
(13)
Net income from continuing operations—as
adjusted
$
157.8
approx
$192 - $195
approx
$691 - $708
Continuing earnings per ordinary
share—diluted
Diluted earnings per ordinary share—as
reported
$
0.80
approx
$1.08 - $1.10
approx
$3.76 - $3.86
Adjustments
0.14
approx
0.07
approx
0.39
Diluted earnings per ordinary share—as
adjusted
$
0.94
approx
$1.15 - $1.17
approx
$4.15 - $4.25
Pentair plc and
Subsidiaries
Reconciliation of GAAP to
Non-GAAP Financial Measures for the Year Ended December 31,
2023
Excluding the Effect of
Adjustments (Unaudited)
In millions, except per-share data
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Net sales
$
1,028.6
$
1,082.5
$
1,008.8
$
984.6
$
4,104.5
Operating income
183.6
208.5
180.1
167.0
739.2
Return on sales
17.8
%
19.3
%
17.9
%
17.0
%
18.0
%
Adjustments:
Restructuring and other
2.9
0.6
1.6
(1.7
)
3.4
Transformation costs
8.5
6.0
13.5
16.3
44.3
Intangible amortization
13.8
13.9
13.8
13.8
55.3
Legal accrual adjustments and
settlements
(1.9
)
4.1
—
—
2.2
Asset impairment and write-offs
3.9
0.5
1.8
1.7
7.9
Equity income of unconsolidated
subsidiaries
0.2
0.6
1.3
0.7
2.8
Segment income
211.0
234.2
212.1
197.8
855.1
Adjusted return on sales
20.5
%
21.6
%
21.0
%
20.1
%
20.8
%
Net income from continuing operations—as
reported
128.5
154.2
132.1
208.1
622.9
Pension and other post retirement mark to
market loss
—
—
—
6.1
6.1
Other income
—
(5.1
)
—
—
(5.1
)
Adjustments to operating income
27.2
25.1
30.7
30.1
113.1
Income tax adjustments (1)
(4.6
)
(3.1
)
(6.6
)
(98.5
)
(112.8
)
Net income from continuing operations—as
adjusted
$
151.1
$
171.1
$
156.2
$
145.8
$
624.2
Continuing earnings per ordinary
share—diluted
Diluted earnings per ordinary share—as
reported
$
0.78
$
0.93
$
0.79
$
1.25
$
3.75
Adjustments
0.13
0.10
0.15
(0.38
)
—
Diluted earnings per ordinary share—as
adjusted
$
0.91
$
1.03
$
0.94
$
0.87
$
3.75
(1)
Income tax adjustments in the fourth
quarter include $74.3 million resulting from favorable impacts of
worthless stock deductions related to exiting certain businesses in
our Water Solutions segment and favorable discrete items primarily
related to the recognition of deferred tax assets.
Pentair plc and
Subsidiaries
Reconciliation of Net Sales
Growth to Core Net Sales Growth by Segment
For the Quarter Ended March
31, 2024 (Unaudited)
Q1 Net Sales Growth
Core
Currency
Total
Total Pentair
(1.1
)%
—
%
(1.1
)%
Flow
(2.1
)%
0.2
%
(1.9
)%
Water Solutions
0.8
%
(0.4
)%
0.4
%
Pool
(1.3
)%
—
%
(1.3
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240423455477/en/
Shelly Hubbard Vice President, Investor Relations Direct:
612-812-0148 Email: shelly.hubbard@pentair.com
Rebecca Osborn Sr. Director, External Communications Direct:
763-656-5589 Email: rebecca.osborn@pentair.com
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