Pentair Reports Strong First Quarter 2025 Results
-
Sales of
$1.0 billion -
Operating income rose 12 percent to
$203 million with ROS of 20.1 percent, an increase of 230 basis points compared to the prior year period; on an adjusted basis, operating income increased 12 percent to$243 million and ROS expanded 260 basis points to 24.0 percent -
GAAP EPS increased 16 percent to
$0.93 when compared to the prior year period and adjusted EPS rose 18 percent to$1.11 -
Repurchased
$50 million of ordinary shares and increased dividend for the 49th consecutive year -
The company updates its full year 2025 GAAP EPS guidance to approximately
$4.27 to$4.42 and maintains EPS guidance on an adjusted basis of approximately$4.65 to$4.80
Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.
First quarter 2025 operating income was
Flow sales were down 4 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 3 percent in the first quarter. Reportable segment income of
Water Solutions sales were down 5 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 4 percent in the first quarter. Reportable segment income of
Pool sales were up 7 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 4 percent in the first quarter. Reportable segment income of
Net cash used for operating activities of continuing operations was
During the first quarter, the Company repurchased 0.6 million of ordinary shares for
OUTLOOK
The Company updated its estimated 2025 GAAP EPS from continuing operations to approximately
In addition, the Company introduces second quarter 2025 GAAP EPS from continuing operations guidance of approximately
EARNINGS CONFERENCE CALL
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
ABOUT
At
|
|
||||||
|
Condensed Consolidated Statements of Operations (Unaudited) |
||||||
|
|
|
|
||||
|
|
Three months ended |
|||||
|
In millions, except per-share data |
2 025 |
2 024 |
||||
|
Net sales |
$ |
1,010.4 |
|
$ |
1,017.2 |
|
|
Cost of goods sold |
|
607.1 |
|
|
627.1 |
|
|
Gross profit |
|
403.3 |
|
|
390.1 |
|
|
% of net sales |
|
39.9 |
% |
|
38.4 |
% |
|
Selling, general and administrative expenses |
|
176.6 |
|
|
185.2 |
|
|
% of net sales |
|
17.5 |
% |
|
18.2 |
% |
|
Research and development expenses |
|
23.6 |
|
|
24.1 |
|
|
% of net sales |
|
2.3 |
% |
|
2.4 |
% |
|
Operating income |
|
203.1 |
|
|
180.8 |
|
|
% of net sales |
|
20.1 |
% |
|
17.8 |
% |
|
Other expense |
|
|
||||
|
Other expense |
|
0.5 |
|
|
0.1 |
|
|
Net interest expense |
|
19.7 |
|
|
27.3 |
|
|
% of net sales |
|
1.9 |
% |
|
2.7 |
% |
|
Income from continuing operations before income taxes |
|
182.9 |
|
|
153.4 |
|
|
Provision for income taxes |
|
28.0 |
|
|
19.9 |
|
|
Effective tax rate |
|
15.3 |
% |
|
13.0 |
% |
|
Net income from continuing operations |
|
154.9 |
|
|
133.5 |
|
|
Loss from discontinued operations, net of tax |
|
— |
|
|
(0.2 |
) |
|
Net income |
$ |
154.9 |
|
$ |
133.3 |
|
|
Earnings per ordinary share |
|
|
||||
|
Basic |
|
|
||||
|
Continuing operations |
$ |
0.94 |
|
$ |
0.80 |
|
|
Discontinued operations |
|
— |
|
|
— |
|
|
Basic earnings per ordinary share |
$ |
0.94 |
|
$ |
0.80 |
|
|
Diluted |
|
|
||||
|
Continuing operations |
$ |
0.93 |
|
$ |
0.80 |
|
|
Discontinued operations |
|
— |
|
|
— |
|
|
Diluted earnings per ordinary share |
$ |
0.93 |
|
$ |
0.80 |
|
|
Weighted average ordinary shares outstanding |
|
|
||||
|
Basic |
|
164.9 |
|
|
165.7 |
|
|
Diluted |
|
166.3 |
|
|
167.2 |
|
|
Cash dividends paid per ordinary share |
$ |
0.25 |
|
$ |
0.23 |
|
|
|
||||
|
Condensed Consolidated Balance Sheets (Unaudited) |
||||
|
|
|
|
||
|
|
2 025 |
2 024 |
||
|
In millions |
||||
|
Assets |
||||
|
Current assets |
|
|
||
|
Cash and cash equivalents |
$ |
140.6 |
$ |
118.7 |
|
Accounts receivable, net |
|
831.2 |
|
565.2 |
|
Inventories |
|
614.2 |
|
610.9 |
|
Other current assets |
|
141.1 |
|
141.3 |
|
Total current assets |
|
1,727.1 |
|
1,436.1 |
|
Property, plant and equipment, net |
|
361.9 |
|
358.8 |
|
Other assets |
|
|
||
|
|
|
3,310.5 |
|
3,286.6 |
|
Intangibles, net |
|
1,022.5 |
|
1,033.8 |
|
Other non-current assets |
|
325.2 |
|
331.2 |
|
Total other assets |
|
4,658.2 |
|
4,651.6 |
|
Total assets |
$ |
6,747.2 |
$ |
6,446.5 |
|
Liabilities and Equity |
||||
|
Current liabilities |
|
|
||
|
Current maturities of short-term borrowings |
$ |
— |
$ |
9.3 |
|
Accounts payable |
|
296.7 |
|
272.8 |
|
Employee compensation and benefits |
|
93.4 |
|
116.2 |
|
Other current liabilities |
|
522.6 |
|
496.8 |
|
Total current liabilities |
|
912.7 |
|
895.1 |
|
Other liabilities |
|
|
||
|
Long-term debt |
|
1,835.7 |
|
1,638.7 |
|
Pension and other post-retirement compensation and benefits |
|
60.6 |
|
61.6 |
|
Deferred tax liabilities |
|
45.6 |
|
44.4 |
|
Other non-current liabilities |
|
259.0 |
|
243.8 |
|
Total liabilities |
|
3,113.6 |
|
2,883.6 |
|
Equity |
|
3,633.6 |
|
3,562.9 |
|
Total liabilities and equity |
$ |
6,747.2 |
$ |
6,446.5 |
|
|
||||||
|
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||
|
|
||||||
|
|
Three months ended |
|||||
|
In millions |
2 025 |
2 024 |
||||
|
Operating activities |
|
|
||||
|
Net income |
$ |
154.9 |
|
$ |
133.3 |
|
|
Loss from discontinued operations, net of tax |
|
— |
|
|
0.2 |
|
|
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 |
|
(0.4 |
) |
|
(0.9 |
) |
|
Depreciation |
|
14.8 |
|
|
14.9 |
|
|
Amortization |
|
14.2 |
|
|
13.5 |
|
|
Deferred income taxes |
|
11.5 |
|
|
4.8 |
|
|
Share-based compensation |
|
12.6 |
|
|
7.9 |
|
|
Asset impairment and write-offs |
|
5.2 |
|
|
0.8 |
|
|
Changes in assets and liabilities, net of effects of business acquisitions |
|
|
||||
|
Accounts receivable |
|
(261.6 |
) |
|
(249.5 |
) |
|
Inventories |
|
(3.5 |
) |
|
(3.2 |
) |
|
Other current assets |
|
(12.5 |
) |
|
(11.8 |
) |
|
Accounts payable |
|
23.8 |
|
|
33.0 |
|
|
Employee compensation and benefits |
|
(24.3 |
) |
|
(28.3 |
) |
|
Other current liabilities |
|
22.6 |
|
|
(28.1 |
) |
|
Other non-current assets and liabilities |
|
3.8 |
|
|
6.0 |
|
|
Net cash used for operating activities of continuing operations |
|
(38.9 |
) |
|
(107.4 |
) |
|
Net cash used for operating activities of discontinued operations |
|
— |
|
|
(0.2 |
) |
|
Net cash used for operating activities |
|
(38.9 |
) |
|
(107.6 |
) |
|
Investing activities |
|
|
||||
|
Capital expenditures |
|
(16.8 |
) |
|
(19.3 |
) |
|
Net cash used for investing activities |
|
(16.8 |
) |
|
(19.3 |
) |
|
Financing activities |
|
|
||||
|
Net repayments of short-term borrowings |
|
(9.3 |
) |
|
— |
|
|
Net borrowings of revolving long-term debt |
|
196.2 |
|
|
101.4 |
|
|
Repayments of long-term debt |
|
— |
|
|
(6.3 |
) |
|
Shares issued to employees, net of shares withheld |
|
(8.6 |
) |
|
6.1 |
|
|
Repurchases of ordinary shares |
|
(50.0 |
) |
|
— |
|
|
Dividends paid |
|
(41.2 |
) |
|
(38.0 |
) |
|
Net cash provided by financing activities |
|
87.1 |
|
|
63.2 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(9.5 |
) |
|
2.5 |
|
|
Change in cash and cash equivalents |
|
21.9 |
|
|
(61.2 |
) |
|
Cash and cash equivalents, beginning of period |
|
118.7 |
|
|
170.3 |
|
|
Cash and cash equivalents, end of period |
$ |
140.6 |
|
$ |
109.1 |
|
|
|
||||||
|
Reconciliation of the GAAP Operating Activities Cash Flow to the Non-GAAP Free Cash Flow (Unaudited) |
||||||
|
|
||||||
|
|
Three months ended |
Three months ended |
||||
|
In millions |
2 025 |
2 024 |
||||
|
Net cash used for operating activities of continuing operations |
$ |
(38.9 |
) |
$ |
(107.4 |
) |
|
Capital expenditures |
|
(16.8 |
) |
|
(19.3 |
) |
|
Free cash flow from continuing operations |
|
(55.7 |
) |
|
(126.7 |
) |
|
Net cash used for operating activities of discontinued operations |
|
— |
|
|
(0.2 |
) |
|
Free cash flow |
$ |
(55.7 |
) |
$ |
(126.9 |
) |
|
|
||||||
|
Supplemental Financial Information by Reportable Segment (Unaudited) |
||||||
|
|
|
|
||||
|
|
|
2025 |
|
|
2024 |
|
|
In millions |
First Quarter |
First Quarter |
||||
|
Net sales |
|
|
||||
|
Flow |
$ |
367.9 |
|
$ |
384.3 |
|
|
Water Solutions |
|
258.2 |
|
|
273.1 |
|
|
Pool |
|
383.9 |
|
|
359.5 |
|
|
Reportable segment net sales |
|
1,010.0 |
|
|
1,016.9 |
|
|
Corporate and other |
|
0.4 |
|
|
0.3 |
|
|
Net sales |
$ |
1,010.4 |
|
$ |
1,017.2 |
|
|
Reportable segment income (loss) |
|
|
||||
|
Flow |
$ |
83.6 |
|
$ |
77.3 |
|
|
Water Solutions |
|
60.7 |
|
|
55.6 |
|
|
Pool |
|
126.0 |
|
|
110.8 |
|
|
Reportable segment income |
|
270.3 |
|
|
243.7 |
|
|
Corporate and other |
|
(27.8 |
) |
|
(26.4 |
) |
|
Adjusted operating income |
$ |
242.5 |
|
$ |
217.3 |
|
|
Return on sales |
|
|
||||
|
Flow |
|
22.7 |
% |
|
20.1 |
% |
|
Water Solutions |
|
23.5 |
% |
|
20.4 |
% |
|
Pool |
|
32.8 |
% |
|
30.8 |
% |
|
Adjusted return on sales |
|
24.0 |
% |
|
21.4 |
% |
|
|
|||||||||||
|
Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ending |
|||||||||||
|
Excluding the Effect of Adjustments (Unaudited) |
|||||||||||
|
|
|
|
|
|
|
||||||
|
|
Actual |
Forecast |
|||||||||
|
In millions, except per-share data |
First Quarter |
Second Quarter |
Full Year |
||||||||
|
Net sales |
$ |
1,010.4 |
|
approx |
Up 1% - 2% |
approx |
Flat - Up 2% |
||||
|
Operating income |
|
203.1 |
|
approx |
Up 9% - 12% |
approx |
Up 16% - 20% |
||||
|
Return on sales |
|
20.1 |
% |
|
|
|
|
||||
|
Adjustments: |
|
|
|
|
|
||||||
|
Restructuring and other |
|
10.5 |
|
approx |
$ |
— |
|
approx |
$ |
11 |
|
|
Transformation costs |
|
9.1 |
|
approx |
|
— |
|
approx |
|
9 |
|
|
Intangible amortization |
|
14.2 |
|
approx |
|
14 |
|
approx |
|
55 |
|
|
Asset impairment and write-offs |
|
5.2 |
|
approx |
|
— |
|
approx |
|
5 |
|
|
Equity income of unconsolidated subsidiaries |
|
0.4 |
|
approx |
|
1 |
|
approx |
|
3 |
|
|
Adjusted operating income |
|
242.5 |
|
approx |
Up 5% - 8% |
approx |
Up 6% - 9% |
||||
|
Adjusted return on sales |
|
24.0 |
% |
|
|
|
|
||||
|
Net income from continuing operations—as reported |
|
154.9 |
|
approx |
|
approx |
|
||||
|
Adjustments to operating income |
|
39.0 |
|
approx |
|
14 |
|
approx |
|
80 |
|
|
Income tax adjustments |
|
(9.7 |
) |
approx |
|
(2 |
) |
approx |
|
(17 |
) |
|
Net income from continuing operations—as adjusted |
$ |
184.2 |
|
approx |
|
approx |
|
||||
|
Continuing earnings per ordinary share—diluted |
|
|
|
|
|
||||||
|
Diluted earnings per ordinary share—as reported |
$ |
0.93 |
|
approx |
|
approx |
|
||||
|
Adjustments |
|
0.18 |
|
approx |
|
0.07 |
|
approx |
|
0.38 |
|
|
Diluted earnings per ordinary share—as adjusted |
$ |
1.11 |
|
approx |
|
approx |
|
||||
|
|
|||||||||||||||
|
Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ending |
|||||||||||||||
|
Excluding the Effect of Adjustments (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
In millions, except per-share data |
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
||||||||||
|
Net sales |
$ |
1,017.2 |
|
$ |
1,099.3 |
|
$ |
993.4 |
|
$ |
972.9 |
|
$ |
4,082.8 |
|
|
Operating income |
|
180.8 |
|
|
248.0 |
|
|
179.9 |
|
|
195.1 |
|
|
803.8 |
|
|
Return on sales |
|
17.8 |
% |
|
22.6 |
% |
|
18.1 |
% |
|
20.1 |
% |
|
19.7 |
% |
|
Adjustments: |
|
|
|
|
|
||||||||||
|
Restructuring and other |
|
4.6 |
|
|
5.9 |
|
|
23.4 |
|
|
3.1 |
|
|
37.0 |
|
|
Transformation costs |
|
17.0 |
|
|
11.8 |
|
|
12.6 |
|
|
10.7 |
|
|
52.1 |
|
|
Intangible amortization |
|
13.5 |
|
|
13.4 |
|
|
13.5 |
|
|
13.9 |
|
|
54.3 |
|
|
Legal accrual adjustments and settlements |
|
(0.3 |
) |
|
(7.9 |
) |
|
0.7 |
|
|
— |
|
|
(7.5 |
) |
|
Asset impairment and write-offs |
|
0.8 |
|
|
— |
|
|
8.5 |
|
|
8.3 |
|
|
17.6 |
|
|
Equity income of unconsolidated subsidiaries |
|
0.9 |
|
|
0.2 |
|
|
0.6 |
|
|
0.2 |
|
|
1.9 |
|
|
Adjusted operating income |
|
217.3 |
|
|
271.4 |
|
|
239.2 |
|
|
231.3 |
|
|
959.2 |
|
|
Adjusted return on sales |
|
21.4 |
% |
|
24.7 |
% |
|
24.1 |
% |
|
23.8 |
% |
|
23.5 |
% |
|
Net income from continuing operations—as reported |
|
133.5 |
|
|
186.1 |
|
|
139.6 |
|
|
166.4 |
|
|
625.6 |
|
|
Pension and other post retirement mark to market gain |
|
— |
|
|
— |
|
|
— |
|
|
(5.3 |
) |
|
(5.3 |
) |
|
Other (income) expense |
|
— |
|
|
— |
|
|
(0.5 |
) |
|
0.1 |
|
|
(0.4 |
) |
|
Adjustments to operating income |
|
35.6 |
|
|
23.2 |
|
|
58.7 |
|
|
36.0 |
|
|
153.5 |
|
|
Income tax adjustments |
|
(11.3 |
) |
|
(5.4 |
) |
|
(15.4 |
) |
|
(17.6 |
) |
|
(49.7 |
) |
|
Net income from continuing operations—as adjusted |
$ |
157.8 |
|
$ |
203.9 |
|
$ |
182.4 |
|
$ |
179.6 |
|
$ |
723.7 |
|
|
Continuing earnings per ordinary share—diluted |
|
|
|
|
|
||||||||||
|
Diluted earnings per ordinary share—as reported |
$ |
0.80 |
|
$ |
1.11 |
|
$ |
0.84 |
|
$ |
0.99 |
|
$ |
3.74 |
|
|
Adjustments |
|
0.14 |
|
|
0.11 |
|
|
0.25 |
|
|
0.09 |
|
|
0.59 |
|
|
Diluted earnings per ordinary share—as adjusted |
$ |
0.94 |
|
$ |
1.22 |
|
$ |
1.09 |
|
$ |
1.08 |
|
$ |
4.33 |
|
|
|
||||||||
|
Reconciliation of Net Sales Growth to Core Net Sales Growth by Reportable Segment |
||||||||
|
For the Quarter Ended |
||||||||
|
|
||||||||
|
|
Q1 Net Sales Growth |
|||||||
|
|
Core |
Currency |
Acq. / Div. |
Total |
||||
|
Total |
(0.8 |
)% |
(0.7 |
)% |
0.8 |
% |
(0.7 |
)% |
|
Flow |
(2.9 |
)% |
(1.4 |
)% |
— |
% |
(4.3 |
)% |
|
Water Solutions |
(4.3 |
)% |
(0.6 |
)% |
(0.6 |
)% |
(5.5 |
)% |
|
Pool |
4.2 |
% |
(0.1 |
)% |
2.7 |
% |
6.8 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250422404241/en/
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Email: shelly.hubbard@pentair.com
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Email: rebecca.osborn@pentair.com
Source:
