WATTS WATER TECHNOLOGIES INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended April 3, 2005

or

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 1-11499

WATTS WATER TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		04-2916536
(State of incorporation)		(I.R.S. Employer Identification No.)

815 Chestnut Street, North Andover, MA		01845
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (978) 688-1811

(Former Name, Former Address and Former Fiscal year, if changed since last report.)

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.

Class		Outstanding at April 30, 2005

Class A Common Stock, $.10 par value		25,091,676

Class B Common Stock, $.10 par value		7,343,880

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share information)

(Unaudited)

	April 3, 2005			December 31, 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	61,532		$	65,913
Investment securities	—			26,600
Trade accounts receivable, less allowance for doubtful accounts of $7,319 at April 3, 2005 and $7,551 at December 31, 2004	156,675			150,073
Inventories, net:
Raw materials	55,778			53,942
Work in process	28,637			28,020
Finished goods	128,319			121,082
Total Inventories	212,734			203,044
Prepaid expenses and other assets	15,317			14,359
Deferred income taxes	27,809			27,463
Assets of discontinued operations	8,644			10,227
Total Current Assets	482,711			497,679
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost	322,709			321,655
Accumulated depreciation	(174,698		)	(170,966		)
Property, plant and equipment, net	148,011			150,689
OTHER ASSETS:
Goodwill	234,039			226,178
Other	54,120			49,702
TOTAL ASSETS	$	918,881		$	924,248

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	72,071		$	73,606
Accrued expenses and other liabilities	63,051			64,604
Accrued compensation and benefits	25,638			29,679
Current portion of long-term debt	5,542			4,981
Liabilities of discontinued operations	23,456			24,303
Total Current Liabilities	189,758			197,173
LONG-TERM DEBT, NET OF CURRENT PORTION	178,983			180,562
DEFERRED INCOME TAXES	20,476			19,578
OTHER NONCURRENT LIABILITIES	25,558			26,632
MINORITY INTEREST	7,544			7,515

STOCKHOLDERS’ EQUITY:
Preferred Stock, $.10 par value; 5,000,000 shares authorized; no shares issued or outstanding	—			—

Part I. Financial Information

	Item 1. Financial Statements

		Consolidated Balance Sheets at April 3, 2005 and December 31, 2004 (unaudited)

		Consolidated Statements of Operations for the First Quarters Ended April 3, 2005 and March 28, 2004 (unaudited)

		Consolidated Statements of Cash Flows for the First Quarters Ended April 3, 2005 and March 28, 2004 (unaudited)

		Notes to Consolidated Financial Statements

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

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk

	Item 4.	Controls and Procedures

Part II. Other Information

	Item 1.	Legal Proceedings

	Item 6.	Exhibits

	Signatures

	Exhibit Index