pnr-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the Quarterly Period Ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-11625


Pentair plc

(Exact name of Registrant as specified in its charter)

Ireland

98-1141328

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Regal House, 70 London Road,

Twickenham,

London,

TW13QS

United Kingdom

(Address of principal executive offices)

Registrant’s telephone number, including area code: 44-74-9421-6154

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, nominal value $0.01 per share	PNR	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting
company

☐

Emerging growth
company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On March 31, 2022, 165,399,674 shares of Registrant’s common stock were outstanding.

Table of Contents

Pentair plc and Subsidiaries


		Page

PART I FINANCIAL INFORMATION

ITEM 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations and Comprehensive Income	3

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Cash Flows	5

	Condensed Consolidated Statements of Changes in Equity	6

	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	30

ITEM 4.	Controls and Procedures	31

PART II OTHER INFORMATION

ITEM 1.	Legal Proceedings	31

ITEM 1A.	Risk Factors	31

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

ITEM 6.	Exhibits	34

	Signatures	35

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Pentair plc and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)


	Three months ended
In millions, except per-share data		March 31, 2022		March 31, 2021
Net sales		$	999.6	$	865.9
Cost of goods sold		667.4		550.7
Gross profit		332.2		315.2
Selling, general and administrative expenses		164.1		136.6
Research and development expenses		22.3		21.5

Operating income		145.8		157.1
Other expense:



Net interest expense		5.7		5.1
Other expense		0.1		0.4
Income from continuing operations before income taxes		140.0		151.6
Provision for income taxes		21.5		20.5
Net income from continuing operations		118.5		131.1
Loss from discontinued operations, net of tax		(0.9)		(2.5)

Net income		$	117.6	$	128.6

Comprehensive income, net of tax
Net income		$	117.6	$	128.6
Changes in cumulative translation adjustment		(7.4)		(20.7)

Changes in market value of derivative financial instruments, net of tax		6.6		17.0
Comprehensive income		$	116.8	$	124.9
Earnings (loss) per ordinary share
Basic
Continuing operations		$	0.72	$	0.79
Discontinued operations		(0.01)		(0.02)
Basic earnings per ordinary share		$	0.71	$	0.77
Diluted
Continuing operations		$	0.71	$	0.78
Discontinued operations		(0.01)		(0.01)
Diluted earnings per ordinary share		$	0.70	$	0.77
Weighted average ordinary shares outstanding
Basic		165.3		166.2
Diluted		166.5		167.7

See accompanying notes to condensed consolidated financial statements.

Table of Contents

Pentair plc and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


	March 31, 2022		December 31, 2021
In millions, except per-share data
Assets
Current assets
Cash and cash equivalents	$	102.3	$	94.5
Accounts receivable, net of allowances of $12.0 and $9.1, respectively	648.6		534.3
Inventories	656.2		562.9
Other current assets	134.6		112.3

Total current assets	1,541.7		1,304.0
Property, plant and equipment, net	315.0		310.0
Other assets
Goodwill	2,493.4		2,504.5
Intangibles, net	420.0		428.0
Other non-current assets	205.8		207.1

Total other assets	3,119.2		3,139.6
Total assets	$	4,975.9	$	4,753.6
Liabilities and Equity
Current liabilities

Accounts payable	$	396.8	$	385.7
Employee compensation and benefits	102.0		140.1
Other current liabilities	515.6		525.9

Total current liabilities	1,014.4		1,051.7
Other liabilities
Long-term debt	1,091.1		894.1
Pension and other post-retirement compensation and benefits	91.8		93.2
Deferred tax liabilities	85.1		89.8
Other non-current liabilities	189.6		202.9

Total liabilities	2,472.0		2,331.7
Commitments and contingencies (Note 16)
Equity
Ordinary shares $0.01 par value, 426.0 authorized, 165.4 and 165.1 issued at March 31, 2022 and December 31, 2021, respectively	1.7		1.7

Additional paid-in capital	1,584.3		1,582.7
Retained earnings	1,132.6		1,051.4
Accumulated other comprehensive loss	(214.7)		(213.9)
Total equity	2,503.9		2,421.9
Total liabilities and equity	$	4,975.9	$	4,753.6

See accompanying notes to condensed consolidated financial statements.

Table of Contents

Pentair plc and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Three months ended
In millions	March 31, 2022		March 31, 2021
Operating activities
Net income	$	117.6	$	128.6
Loss from discontinued operations, net of tax	0.9		2.5

Adjustments to reconcile net income from continuing operations to net cash provided by (used for) operating activities of continuing operations
Equity income of unconsolidated subsidiaries	(0.5)		(0.2)
Depreciation	13.0		12.7
Amortization	6.6		7.1
Deferred income taxes	(3.7)		(2.8)

Share-based compensation	6.9		5.6




Amortization of bridge financing fees	2.6		—

Changes in assets and liabilities, net of effects of business acquisitions
Accounts receivable	(116.1)		(202.4)
Inventories	(95.1)		(12.5)