UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended September 30, 2003 |
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or |
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from to |
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Commission file number 1-11499 |
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WATTS WATER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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04-2916536 |
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(State of incorporation) |
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(I.R.S. Employer Identification No.) |
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815 Chestnut Street, North Andover, MA |
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01845 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (978) 688-1811 |
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Watts Industries, Inc. |
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(Former Name, Former Address and Former Fiscal year, if changed since last report.) |
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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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
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Class |
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Outstanding at November 7, 2003 |
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Class A Common, $.10 par value |
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19,785,230 |
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Class B Common, $.10 par value |
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7,805,224 |
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WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES
(Thousands, except share amounts)
(Unaudited)
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September 30, |
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December
31, |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
39,618 |
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$ |
10,973 |
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Restricted treasury securities |
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78,016 |
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— |
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Trade accounts receivable, less allowance for doubtful accounts of $7,721 at September 30, 2003 and $7,322 at December 31, 2002 |
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147,712 |
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123,504 |
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Inventories: |
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Raw materials |
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44,808 |
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40,591 |
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Work in process |
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22,303 |
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17,289 |
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Finished goods |
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83,939 |
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75,535 |
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Total Inventories |
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151,050 |
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133,415 |
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Prepaid expenses and other assets |
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13,401 |
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10,732 |
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Deferred income taxes |
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24,369 |
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21,927 |
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Net assets held for sale |
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1,940 |
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2,464 |
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Total Current Assets |
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456,106 |
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303,015 |
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PROPERTY, PLANT AND EQUIPMENT: |
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Property, plant and equipment, at cost |
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271,846 |
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248,933 |
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Accumulated depreciation |
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(132,563 |
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(114,557 |
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Property, plant and equipment, net |
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139,283 |
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134,376 |
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OTHER ASSETS: |
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Goodwill |
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177,916 |
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163,226 |
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Other |
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30,979 |
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28,114 |
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TOTAL ASSETS |
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$ |
804,284 |
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$ |
628,731 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
60,125 |
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$ |
64,704 |
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Accrued expenses and other liabilities |
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70,628 |
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69,202 |
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Accrued compensation and benefits |
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16,175 |
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15,514 |
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Current portion of long-term debt |
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88,338 |
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82,211 |
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Total Current Liabilities |
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235,266 |
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231,631 |
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LONG-TERM DEBT, NET OF CURRENT PORTION |
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189,203 |
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56,276 |
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DEFERRED INCOME TAXES |
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17,162 |
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15,011 |
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OTHER NONCURRENT LIABILITIES |
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20,988 |
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19,743 |
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MINORITY INTEREST |
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9,784 |
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10,134 |
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STOCKHOLDERS’ EQUITY: |
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Preferred Stock, $.10 par value; 5,000,000 shares authorized; no shares issued or outstanding |
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— |
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Class A Common Stock, $.10 par value; 80,000,000 shares authorized; 1 vote per share; issued and outstanding: 19,563,281 shares at September 30, 2003 and 18,863,482 shares at December 31, 2002 |
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1,956 |
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1,886 |
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Class B Common Stock, $.10 par value; 25,000,000 shares authorized; 10 votes per share; issued and outstanding: 7,805,224 shares at September 30, 2003 and 8,185,224 shares at December 31, 2002 |
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781 |
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819 |
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Additional paid-in capital |
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49,256 |
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45,132 |
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Retained earnings |
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278,583 |
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259,893 |
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Accumulated other comprehensive income (loss) |
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1,305 |
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(11,794 |
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Total Stockholders’ Equity |
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331,881 |
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295,936 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
804,284 |
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$ |
628,731 |
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See accompanying notes to consolidated financial statements.
3
WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except per share amounts)
(Unaudited)
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Three Months Ended |
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September 30, |
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September 30, |
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Net sales |
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$ |
175,509 |
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$ |
159,811 |
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Cost of goods sold |
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116,136 |
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106,304 |
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GROSS PROFIT |
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59,373 |
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53,507 |
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Selling, general & administrative expenses |
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41,396 |
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37,532 |
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Restructuring |
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— |
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208 |
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OPERATING INCOME |
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17,977 |
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15,767 |
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Other (income) expense: |
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