SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (date of earliest event reported) April 8, 1999
PENTAIR, INC.
(Exact Name of Registrant as specified in Its Charter)
MINNESOTA 001-11625 41-0907434
(State of Incorporation (Commission File (I.R.S. Employer
or Organization) Number) Identification No.)
1500 County Road B2 West, St. Paul, Minnesota 55113-3105
(Address of Principal Executive Offices) (Zip Code)
651.636.7920
(Registrant's Telephone Number, Including Area Code)
Item 5. Other Matters
Pentair, Inc. today announced restructuring plans that will
streamline operations to deliver significant cost savings and
contribute to future earnings growth. A $38 million pre-tax,
non-recurring charge against earnings in the first quarter of
1999 - equivalent to $.56 per share -- is expected to result
in pre-tax savings of $5 million in 1999, another $26 million
in 2000, and an additional $30 million in 2001.
"Pentair continues to transform itself and raise its
profitability. We have identified several major opportunities
to accelerate this process, and this strategic restructuring
strengthens our ability to meet our growth objectives," said
Winslow H. Buxton, chairman, president, and chief executive
officer. "Overall, we foresee a 12-month payback from the time
the restructuring funds are spent to the time they are
returned to the Company in the form of greater efficiencies
and lower costs."
Buxton said Pentair expects to meet or exceed analysts'
consensus estimates of 59 cents per share on a pre-charge
basis in the first quarter of 1999. The restructuring plan is
in addition to, and separate from, Pentair's ongoing PACE cost-
saving project, which is expected to deliver savings of $60
million through company-wide purchasing and shared services
initiatives.
"We are now more confident than ever that the pre-charge
consensus estimate for 1999 of $2.86 can be achieved or
exceeded, and that we can continue our growth trend at an
annual rate of 15 percent or greater into the year 2000 and
beyond," Buxton added.
The restructuring plan comprises consolidation of certain
operations, overhead reductions, and outsourcing of specific
product lines in each of the Company's three business
segments. Pentair anticipates a net reduction of approximately
700 jobs, less than seven percent of the company's global
workforce.
Pentair's Electrical and Electronic Enclosures Group already
has initiated a major overhead reduction in its European
enclosure businesses -- principally at the Schroff operation
in Straubenhardt, Germany -- and manufacturing rationalization
in its North American facilities. This Group will absorb $16.7
million of the charge, with anticipated savings of more than
$4.0 million in the remaining quarters of 1999 and more than
$9.0 million in 2000.
The Professional Tools and Equipment Group will accelerate its
already-strong performance by consolidating distribution
operations, and by combining the headquarters of the two power
tool businesses, Delta and Porter-Cable. In the service
equipment businesses, products are being outsourced to
offshore manufacturers, and the Jonesboro, Arkansas,
manufacturing operation of Lincoln Automotive will be closed.
Restructuring charges of $16.8 million in this Group will
deliver anticipated savings of more than $14.0 million in
2000.
The Water and Fluid Technologies Group will reduce the
workforce at its Lincoln Industrial business and outsource
some product manufacturing. Approximately 50 percent of the
company's U.S. manufacturing facility will be closed. This
Group's charge will be $4.5 million, with anticipated savings
of $0.4 million in late 1999 and more than $2.0 million in the
year 2000.
Any statements made about the Company's anticipated financial
results are forward-looking statements subject to risks and
uncertainties such as those described in the Company's Annual
Report on Form 10K for the year ended December 31, 1998.
Actual results may differ materially from anticipated results.
Item 7. Financial Statements and Exhibits.
a. Not applicable
b. Not applicable
c. Exhibits
Exhibit 99.1 Press release dated April 8, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
PENTAIR, INC.
By: Richard W. Ingman
Executive Vice President and
Chief Financial Officer
Dated: April 8, 1999
EXHIBIT 99.1
For release at 7:30 a.m., CDT
Contact: Mark Cain (651) 639-5278
Pentair Announces Strategic Restructuring; 1-year
Payback Foreseen
ST. PAUL, MN -- April 8, 1999 -- Pentair, Inc.
(NYSE: PNR) today announced restructuring plans that
will streamline operations to deliver significant
cost savings and contribute to future earnings
growth. A $38 million pre-tax, non-recurring charge
against earnings in the first quarter of 1999 -
equivalent to $.56 per share -- is expected to
result in pre-tax savings of $5 million in 1999,
another $26 million in 2000, and an additional $30
million in 2001.
"Pentair continues to transform itself and raise its
profitability. We have identified several major
opportunities to accelerate this process, and this
strategic restructuring strengthens our ability to
meet our growth objectives," said Winslow H. Buxton,
chairman, president, and chief executive officer.
"Overall, we foresee a 12-month payback from the
time the restructuring funds are spent to the time
they are returned to the Company in the form of
greater efficiencies and lower costs."
Buxton said Pentair expects to meet or exceed
analysts' consensus estimates of 59 cents per share
on a pre-charge basis in the first quarter of 1999.
The restructuring plan is in addition to, and
separate from, Pentair's ongoing PACE cost-saving
project, which is expected to deliver savings of $60
million through company-wide purchasing and shared
services initiatives.
"We are now more confident than ever that the pre-
charge consensus estimate for 1999 of $2.86 can be
achieved or exceeded, and that we can continue our
growth trend at an annual rate of 15 percent or
greater into the year 2000 and beyond," Buxton
added.
The restructuring plan comprises consolidation of
certain operations, overhead reductions, and
outsourcing of specific product lines in each of the
Company's three business segments. Pentair
anticipates a net reduction of approximately 700
jobs, less than seven percent of the company's
global workforce.
Pentair's Electrical and Electronic Enclosures Group
already has initiated a major overhead reduction in
its European enclosure businesses -- principally at
the Schroff operation in Straubenhardt, Germany --
and manufacturing rationalization in its North
American facilities. This Group will absorb $16.7
million of the charge, with anticipated savings of
more than $4.0 million in the remaining quarters of
1999 and more than $9.0 million in 2000.
The Professional Tools and Equipment Group will
accelerate its already-strong performance by
consolidating distribution operations, and by
combining the headquarters of the two power tool
businesses, Delta and Porter-Cable. In the service
equipment businesses, products are being outsourced
to offshore manufacturers, and the Jonesboro,
Arkansas, manufacturing operation of Lincoln
Automotive will be closed. Restructuring charges of
$16.8 million in this Group will deliver anticipated
savings of more than $14.0 million in 2000.
The Water and Fluid Technologies Group will reduce
the workforce at its Lincoln Industrial business and
outsource some product manufacturing. Approximately
50 percent of the company's U.S. manufacturing
facility will be closed. This Group's charge will be
$4.5 million, with anticipated savings of $0.4
million in late 1999 and more than $2.0 million in
the year 2000.
"The restructuring is a key element in Pentair's
plans for the future. In addition to the savings
being separately generated by our company-wide PACE
program, these actions within our operating groups
will enhance Pentair's competitive viability and
build shareholder value," Buxton added. "While this
decision to restructure the business will eliminate
a number of positions across the company, we will
treat affected employees with fairness and
consideration."
Pentair (http://www.pentair.com) is a diversified
manufacturer operating in three principal markets:
professional tools and equipment, water and fluid
technologies, and electrical and electronic
enclosures. Pentair brands include Delta woodworking
machinery; Porter-Cable power tools; Myers,
Fairbanks Morse, Aurora, and Hydromatic pumps; Fleck
water conditioning control valves; Century, Solar,
and Lincoln service equipment; Lincoln Industrial
automated lubrication systems; and Hoffman and
Schroff enclosures. Pentair employs 10,500 people in
56 locations around the world, and had 1998 sales of
$1.9 billion.
Any statements made about the Company's anticipated
financial results are forward-looking statements
subject to risks and uncertainties such as those
described in the Company's Annual Report on Form 10K
for the year ended December 31, 1998. Actual
results may differ materially from anticipated
results.
