Pentair, Inc. reported fourth quarter 2001 pre-charge continuing EPS of $0.27, at the high end of the range provided in the Company's revised guidance issued December 11, 2001. This compares to ($0.02) in the fourth quarter 2000, which included a $25 million one-time charge. Pentair said fourth quarter net sales of $595.9 million declined 12 percent versus the same period in 2000.
A year-over-year working capital reduction of more than 18 percent drove Pentair's full-year free cash flow past its goal of $150 million to a record $179 million, up 50 percent from $117 million in 2000. This cash flow performance represents cash earnings per share (EPS) of $3.62.
"Pentair recorded concrete accomplishments in several important areas during 2001 -- among them strong cash flow, reduced debt, innovative product development and the adoption of lean enterprise practices across the company. But our disappointing 2001 sales and earnings clearly illustrate the impact of the weak global economy and the fact that we have more work to do to return the Company to its previous levels of performance," said Randall J. Hogan, president and chief executive officer.
Pentair's full year 2001 sales and pre-restructuring charge operating income from continuing businesses totaled $2.6 billion and $198.8 million, respectively, representing a five percent decline in sales and a 12 percent decrease in pre-restructuring charge operating income. The declines were predominately in the Enclosure Group due to adverse market conditions throughout 2001. A pre-tax restructuring charge of $41.1 million was taken in the fourth quarter of 2001 to reduce capacity in the Enclosures Group and gain operational efficiencies. Pre-restructuring charge net income from continuing businesses in 2001 was $87.3 million, or $1.77 diluted EPS as compared to $97.2 million, or $1.99 diluted EPS in 2000, which included one-time charges of $30 million.
The Water Technologies Group reported 2001 sales of $887.5 million, a two percent decline from 2000. Operating income for the segment totaled $109.8 million, down nine percent from 2000. The weak economic environment, coupled with unfavorable sales mix within the pump business and investments in foreign manufacturing capacity, dampened the Water Technologies Group's fourth quarter results. The Group reported fourth quarter 2001 sales of $194.1 million, flat with 2000 levels. Operating income for the segment totaled $17.5 million, down 12.5 percent from the previous year. Return on sales for the segment was 9.0 percent for 2001 versus 10.2 percent for 2000.
"In 2002, we will work to reduce our overall cost structure by some $38 million by further simplifying and rationalizing our infrastructure, capturing supply management opportunities, and implementing lean enterprise practices throughout the organization," Hogan said, "Our efforts to strengthen our processes and systems capabilities, reinvigorate product development efforts, and develop stronger talent throughout the company will continue. Finally, we will maintain our momentum on cash flow and improving return on investment."
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