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Pentair Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 1, 2012 01:02PM
Pentair Inc. (PNR) filed Quarterly Report for the period ended 2012-09-29.
Highlight of Business Operations:Following the Merger, we are a diversified industrial manufacturing company comprising three reporting segments: Water & Fluid Solutions, Valves & Controls and Technical Solutions. Water & Fluid Solutions designs, manufactures, installs and services products and systems used in the movement, storage and treatment of water. Valves & Controls designs, manufactures and markets valves, actuators and controls throughout the energy and process industries. Technical Solutions is a leading provider of products that guard and protect some of the worlds most sensitive electronics and electronic equipment, ensuring their safe, secure and reliable performance, and is a leading provider of complete electric heat management solutions. In 2011, Water & Fluid Solutions and Technical Solutions accounted for approximately 2/3 and 1/3 of total revenues, respectively. The revenues and expenses of Flow Control for the period from the date of the Merger to September 29, 2012 were not material.
Although stabilized, new home building and new pool start end markets have not shown significant signs of improvement and continue at historically low levels. In the fourth quarter of 2011, as a result of these economic conditions and end market softness, we recorded a goodwill impairment charge of $200.5 million. While new product introductions, expanded distribution and channel penetration have resulted in volume increases for the first nine months of 2012, continued stagnation in new housing construction and new pool starts could negatively impact our ability to grow sales in the future and could have a material adverse effect on our results of operations.
The 5.7 and 3.0 percentage point increases in SG&A expense as a percentage of net sales in the third quarter and first nine months, respectively, of 2012 from 2011 were primarily due to:
The 1.7 and 0.6 percentage point increases in the Water & Fluid Solutions operating income as a percentage of net sales in the third quarter and first nine months, respectively, of 2012 from 2011 were primarily the result of:
The 2.5 and 1.7 percentage point increases in Technical Solutions operating income as a percentage of net sales in the third quarter and first nine months, respectively, of 2012 from 2011 were primarily the result of: