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Pentair Reports Fourth Quarter and Full Year 2018 Results

January 29, 2019

LONDON--(BUSINESS WIRE)--Jan 29, 2019--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.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190129005245/en/

CONTACT: Jim Lucas

Senior Vice President, Investor Relations and Treasurer

Direct: 763-656-5575

Email:jim.lucas@pentair.comRebecca Osborn

Senior Manager, External Communications

Direct: 763-656-5589

Email:rebecca.osborn@pentair.com

KEYWORD: UNITED STATES NORTH AMERICA MINNESOTA

INDUSTRY KEYWORD: BUILDING SYSTEMS ENERGY UTILITIES URBAN PLANNING ENVIRONMENT RETAIL FOOD/BEVERAGE CONSTRUCTION & PROPERTY OTHER CONSTRUCTION & PROPERTY

SOURCE: Pentair plc

Copyright Business Wire 2019.

PUB: 01/29/2019 07:00 AM/DISC: 01/29/2019 07:01 AM

http://www.businesswire.com/news/home/20190129005245/en

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