Pentair(US:PNR)2025-04-22 20:17Financial Performance - For the first three months of 2025, consolidated net sales decreased by 0.7% to $1,010.4 million compared to $1,017.2 million in the same period of 2024[69]. - Gross profit as a percentage of net sales decreased by 1.5 percentage points to 38.4% in Q1 2025, down from 39.9% in Q1 2024[69]. - The Flow segment reported net sales of $367.9 million, a decrease of 4.3% from $384.3 million in the prior year, with a segment income increase of 8.2% to $83.6 million[77]. - Net sales for Water Solutions decreased by 5.5% to $258.2 million in Q1 2025 compared to $273.1 million in Q1 2024, primarily due to decreased sales volume and a business exit in the residential segment[81]. - Pool segment net sales increased by 6.8% to $383.9 million, driven by a 2.7% increase in selling prices and a 1.5% increase in sales volume[88][89]. - Segment income for Pool increased by 13.7% to $126.0 million, with a 2.0 percentage point increase in segment income as a percentage of net sales[88][91]. - Segment income for Water Solutions increased by 9.2% to $60.7 million, with a 3.1 percentage point increase in segment income as a percentage of net sales[81][86]. Acquisitions and Investments - The company completed the acquisition of G & F Manufacturing for $116.0 million in cash, enhancing its Pool segment offerings[67]. - The company anticipates continued investment in research and development to pursue attractive product and geographic market opportunities[68]. Cost and Expenses - Inflationary cost increases for raw materials and logistics were noted, with ongoing pressures expected to continue throughout 2025[68]. - The company implemented a Transformation Program aimed at driving operational excellence and margin expansion, with ongoing transformation costs expected throughout 2025[68]. - The net interest expense decreased by 27.8% to $27.3 million in Q1 2025, attributed to lower debt levels compared to the prior year[74]. Cash Flow and Liquidity - Cash used for operating activities of continuing operations was $38.9 million in Q1 2025, an improvement from $107.4 million in Q1 2024[98]. - The company experienced seasonal cash usage in Q1 2025, drawing on its revolving credit facility, with expectations of significant cash generation in Q2 2025[93][95]. - The company reported a free cash flow of $(55.7) million for Q1 2025, an improvement from $(126.9) million in Q1 2024[104]. - The company anticipates sufficient liquidity to meet cash needs for the next twelve months, supported by existing cash flows and borrowing capacity[95]. Debt and Credit Facilities - Total availability under the Senior Credit Facility was $694.3 million as of March 31, 2025, with an option to increase the facility by up to $300.0 million[106]. - The company has a $900.0 million senior unsecured revolving credit facility maturing on December 16, 2026, and a $1.0 billion term loan facility maturing on July 28, 2027[105][107]. Shareholder Returns - The Board of Directors authorized a share repurchase program with a maximum limit of $750 million, expiring on December 31, 2025, with $400 million available as of March 31, 2025[111]. - A quarterly cash dividend of $0.25 per share was declared on February 24, 2025, with a total dividend payment of $41.2 million in the first three months of 2025, compared to $38.0 million in the prior year period[112][113]. - The distributable reserve balance was $6.8 billion as of December 31, 2024, which is necessary for future cash dividends and share repurchases under Irish law[114]. - The company repurchased 0.6 million ordinary shares for $50 million during the three months ended March 31, 2025[111]. - The balance of dividends payable was $41.2 million at both March 31, 2025, and December 31, 2024[112]. Assets and Liabilities - Current assets as of March 31, 2025, were $2.2 million, while noncurrent assets were $2,537.3 million, and current liabilities were $1,812.3 million[118]. - Noncurrent liabilities increased to $2,022.9 million as of March 31, 2025, compared to $1,828.6 million as of December 31, 2024[118]. Risk and Accounting Policies - There were no material changes in market risk during the quarter ended March 31, 2025[120]. - The company has not made any material changes to its critical accounting policies and estimates since the last annual report[119]. - The Parent Company Guarantor's principal source of cash flow is dividends from its subsidiaries, with no direct obligation from subsidiaries to pay amounts due on senior notes[116].