REXNORD CORPORATION |
(Exact name of registrant as specified in its charter) |
Delaware | 20-5197013 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
247 Freshwater Way, Suite 300, Milwaukee, Wisconsin | 53204 | |
(Address of Principal Executive Offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Exhibits. |
Exhibit No. | Description |
99.1 | Earnings Release dated May 18, 2016 |
REXNORD CORPORATION | ||
BY: | /S/ Mark W. Peterson | |
Mark W. Peterson | ||
Senior Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Earnings Release dated May 18, 2016 |
Press Release | |
May 18, 2016 | Contact Information: |
For Immediate Release | Rob McCarthy |
Vice President - Investor Relations | |
414.223.1615 |
• | Net sales were $493 million |
• | GAAP net income from continuing operations was $1 million |
• | Adjusted net income was $38 million, and adjusted earnings per share was $0.37 |
• | Net sales were $1.924 billion for fiscal year 2016 |
• | Adjusted EBITDA of $366 million, resulting in an adjusted EBITDA margin of 19% |
• | Net income from continuing operations was $69 million, and diluted earnings per share was $0.67 |
• | Adjusted earnings per share was $1.47 |
• | Free cash flow was $171 million, or 113% of adjusted net income |
Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||||
March 31, 2016 | March 31, 2015 | March 31, 2016 | March 31, 2015 | |||||||||||||
Net sales | $ | 492.6 | $ | 518.5 | $ | 1,923.8 | $ | 2,050.2 | ||||||||
Cost of sales | 324.8 | 329.0 | 1,258.6 | 1,304.0 | ||||||||||||
Gross profit | 167.8 | 189.5 | 665.2 | 746.2 | ||||||||||||
Selling, general and administrative expenses | 99.3 | 109.0 | 385.7 | 415.1 | ||||||||||||
Restructuring and other similar charges | 24.2 | 5.8 | 34.9 | 12.9 | ||||||||||||
Actuarial loss on pension and postretirement benefit obligations | 12.9 | 28.0 | 12.9 | 59.4 | ||||||||||||
Amortization of intangible assets | 14.3 | 14.3 | 57.4 | 55.1 | ||||||||||||
Income from operations | 17.1 | 32.4 | 174.3 | 203.7 | ||||||||||||
Non-operating expense: | ||||||||||||||||
Interest expense, net | (23.4 | ) | (21.5 | ) | (91.4 | ) | (87.9 | ) | ||||||||
Other income (expense), net | 5.6 | 1.8 | 3.1 | (7.2 | ) | |||||||||||
Income from continuing operations before income taxes | (0.7 | ) | 12.7 | 86.0 | 108.6 | |||||||||||
(Benefit) provision for income taxes | (1.5 | ) | (23.0 | ) | 17.1 | 16.8 | ||||||||||
Net income from continuing operations | 0.8 | 35.7 | 68.9 | 91.8 | ||||||||||||
Loss from discontinued operations, net of tax | (1.4 | ) | (3.2 | ) | (1.4 | ) | (8.0 | ) | ||||||||
Net income | $ | (0.6 | ) | $ | 32.5 | $ | 67.5 | $ | 83.8 | |||||||
Non-controlling interest (loss) | (0.2 | ) | (0.2 | ) | (0.4 | ) | — | |||||||||
Net income attributable to Rexnord | $ | (0.4 | ) | $ | 32.3 | $ | 67.9 | $ | 83.8 | |||||||
Net income per share from continuing operations: | ||||||||||||||||
Basic | $ | 0.01 | $ | 0.35 | $ | 0.68 | $ | 0.90 | ||||||||
Diluted | $ | 0.01 | $ | 0.34 | $ | 0.67 | $ | 0.88 | ||||||||
Net (loss) income per share from discontinued operations: | ||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.08 | ) | ||||
Diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.08 | ) | ||||
Net income per share attributable to Rexnord: | ||||||||||||||||
Basic | $ | — | $ | 0.32 | $ | 0.67 | $ | 0.82 | ||||||||
Diluted | $ | — | $ | 0.31 | $ | 0.66 | $ | 0.80 | ||||||||
Weighted-average number of shares outstanding (in thousands): | ||||||||||||||||
Basic | 101,248 | 101,739 | 100,841 | 101,530 | ||||||||||||
Effect of dilutive stock options | 1,894 | 3,069 | 2,469 | 3,197 | ||||||||||||
Diluted | 103,142 | 104,808 | 103,310 | 104,727 |
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||
Adjusted EBITDA | March 31, 2016 | March 31, 2015 | March 31, 2016 | March 31, 2015 | |||||||||||
Net income | (0.6 | ) | 32.5 | 67.5 | 83.8 | ||||||||||
Interest expense, net | 23.4 | 21.5 | 91.4 | 87.9 | |||||||||||
Income tax (benefit) provision | (1.5 | ) | (23.0 | ) | 17.1 | 16.8 | |||||||||
Depreciation and amortization | 29.4 | 28.7 | 115.4 | 112.2 | |||||||||||
EBITDA | 50.7 | 59.7 | 291.4 | 300.7 | |||||||||||
Adjustments to EBITDA | |||||||||||||||
Actuarial loss on pension and postretirement benefit obligations | 12.9 | 28.0 | 12.9 | 59.4 | |||||||||||
Impact of RHF product line exit (1) | 10.2 | 3.4 | 21.3 | 8.9 | |||||||||||
Loss from discontinued operations, net of tax | 1.4 | 3.2 | 1.4 | 8.0 | |||||||||||
Restructuring and other similar charges | 24.2 | 5.8 | 34.9 | 12.9 | |||||||||||
Stock-based compensation expense | 1.7 | 1.6 | 7.5 | 6.4 | |||||||||||
Last-in first-out inventory adjustments | (2.2 | ) | (1.9 | ) | (0.8 | ) | (1.7 | ) | |||||||
Impact of inventory fair value adjustment | — | 1.1 | — | 3.2 | |||||||||||
Other (income) expense, net (2) | (5.6 | ) | (1.8 | ) | (3.1 | ) | 7.2 | ||||||||
Subtotal of adjustments to EBITDA | 42.6 | 39.4 | 74.1 | 104.3 | |||||||||||
Adjusted EBITDA | $ | 93.3 | $ | 99.1 | $ | 365.5 | $ | 405.0 |
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||
Adjusted Net Income and Earnings Per Share | March 31, 2016 | March 31, 2015 | March 31, 2016 | March 31, 2015 | |||||||||||
Net income from continuing operations | 0.8 | 35.7 | 68.9 | 91.8 | |||||||||||
Actuarial loss on pension and postretirement benefit obligations | 12.9 | 28.0 | 12.9 | 59.4 | |||||||||||
Supply chain optimization and footprint repositioning initiatives (3) | 1.0 | — | 2.5 | — | |||||||||||
Impact of RHF product line exit (1) | 10.7 | 3.7 | 23.3 | 10.1 | |||||||||||
Restructuring and other similar charges | 24.2 | 5.8 | 34.9 | 12.9 | |||||||||||
Impact of inventory fair value adjustment | — | 1.1 | — | 3.2 | |||||||||||
Amortization of intangible assets | 14.3 | 14.3 | 57.4 | 55.1 | |||||||||||
Other (income) expense, net (2) | (5.6 | ) | (1.8 | ) | (3.1 | ) | 7.2 | ||||||||
Tax effect on above items | (20.5 | ) | (18.3 | ) | (45.2 | ) | (53.0 | ) | |||||||
Tax restructuring (4) | — | — | — | 10.1 | |||||||||||
Adjusted net income from continuing operations | $ | 37.8 | $ | 68.5 | $ | 151.6 | $ | 196.8 | |||||||
Weighted-average number of shares outstanding (in thousands) | |||||||||||||||
Basic | 101,248 | 101,739 | 100,841 | 101,530 | |||||||||||
Effect of dilutive equity awards | 1,894 | 3,069 | 2,469 | 3,197 | |||||||||||
Diluted | 103,142 | 104,808 | 103,310 | 104,727 | |||||||||||
Adjusted earnings per share - diluted | $ | 0.37 | $ | 0.65 | $ | 1.47 | $ | 1.88 | |||||||
Net income per share from continuing operations - diluted (in accordance with GAAP) | $ | 0.01 | $ | 0.34 | $ | 0.67 | $ | 0.88 |
(1) | During the fourth quarter of fiscal 2016, the Company announced its decision to exit the RHF flow control gate product line within its Water Management platform. The operating loss (excluding restructuring and related charges) is not included in Adjusted EBITDA in accordance with our credit agreement. Further, to enhance comparability between historical periods, the pre-tax loss of the RHF product line exit has also been excluded from our Adjusted earnings per share. |
(2) | Other (income) expense, net includes the impact of foreign currency transactions, sale of property, plant and equipment, other miscellaneous expenses and a recovery under the Continued Dumping and Subsidy Offset Act. See "Management Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Form 10-K for the fiscal year ended March 31, 2016 for further information. |
(3) | Represents accelerated depreciation associated with our strategic supply chain optimization and footprint repositioning initiatives. |
(4) | Fiscal 2015 includes a non-recurring, non-cash tax expense related to a change in the U.S. income tax entity classification of a foreign subsidiary. |
Fourth Quarter Ended | |||||||||||||||
March 31, 2016 | March 31, 2015 | ||||||||||||||
Adjusted EBITDA by Segment | Process & Motion Control | Water Management | Process & Motion Control | Water Management | |||||||||||
Income from operations | $ | 41.7 | $ | (5.3 | ) | $ | 61.4 | $ | 10.1 | ||||||
Operating margin | 14.2 | % | (2.7 | )% | 18.7 | % | 5.3 | % | |||||||
Depreciation and amortization | 19.6 | 9.8 | 19.1 | 9.6 | |||||||||||
Restructuring and other similar charges | 7.5 | 16.6 | 5.4 | 0.4 | |||||||||||
Impact of RHF product line exit (1) | — | 10.2 | — | 3.4 | |||||||||||
Stock-based compensation expense | 0.7 | — | 0.3 | 0.3 | |||||||||||
Last-in first-out inventory adjustments | (4.5 | ) | 2.3 | (0.5 | ) | (1.4 | ) | ||||||||
Impact of inventory fair value adjustments | — | — | 1.1 | — | |||||||||||
Adjusted EBITDA | $ | 65.0 | $ | 33.6 | $ | 86.8 | $ | 22.4 | |||||||
Adjusted EBITDA margin | 22.1 | % | 17.6 | % | 26.5 | % | 12.4 | % |
Fiscal Year Ended | ||||||||
March 31, 2016 | March 31, 2015 | |||||||
Cash provided by operating activities | $ | 219.0 | $ | 245.9 | ||||
Expenditures for property, plant and equipment | (52.1 | ) | (48.8 | ) | ||||
Excess tax benefit on exercise of stock options | 4.0 | 5.8 | ||||||
Free cash flow | $ | 170.9 | $ | 202.9 |
Earnings Guidance for | Earnings Guidance for | |||||||
the Three Months Ending | the Twelve Months Ending | |||||||
Adjusted net income per diluted share | June 30, 2016 | March 31, 2017 | ||||||
Net income per diluted share (2) | $0.14 to $0.16 | $0.98 to $1.08 | ||||||
Footprint repositioning and supply chain optimization | 0.01 | 0.11 | ||||||
Restructuring and other similar charges | 0.06 | 0.24 | ||||||
Amortization of intangible assets | 0.14 | 0.41 | ||||||
Tax impact on adjustments | (0.07) | (0.27) | ||||||
Adjusted net income per diluted share | $0.28 to $0.30 | $1.47 to $1.57 |
(1) | During the fourth quarter of fiscal 2016, the Company announced its decision to exit the RHF flow control gate product line within its Water Management platform and its intention to exclude related RHF results from its forward-looking guidance. The operating loss (excluding restructuring and related charges) is not included in Adjusted EBITDA in accordance with our credit agreement. |
(2) | Our guidance for net income per diluted share is based upon the extent of information available as of the date of this filing regarding events and conditions that will impact our future operating results for the periods noted above. Our actual net income per diluted share may be materially impacted by events for which information is not available, such as asset impairments, purchase accounting effects related to future acquisitions, future restructuring actions, gains (losses) recognized on the disposal of tangible assets, gains (losses) on debt extinguishment, actuarial gains (losses) on our defined benefit plans, and other gains (losses) related to events or conditions not yet known. Consequently, we have not included incremental gains or (losses) for these items in our forward-looking guidance. |
Year Ended | ||||||||||||
March 31, 2016 | March 31, 2015 | March 31, 2014 | ||||||||||
Net income attributable to Rexnord | $ | 67.9 | $ | 83.8 | $ | 30.2 | ||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | (10.0 | ) | (84.3 | ) | 7.1 | |||||||
Unrealized loss on interest rate derivatives, net of tax | (4.3 | ) | (10.9 | ) | (1.7 | ) | ||||||
Change in pension and other postretirement defined benefit plans, net of tax | 5.5 | (11.2 | ) | 9.5 | ||||||||
Other comprehensive (loss) income, net of tax | (8.8 | ) | (106.4 | ) | 14.9 | |||||||
Non-controlling interest loss | (0.4 | ) | — | (0.6 | ) | |||||||
Total comprehensive income (loss) | $ | 58.7 | $ | (22.6 | ) | $ | 44.5 |
March 31, 2016 | March 31, 2015 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 484.6 | $ | 370.3 | ||||
Receivables, net | 317.6 | 336.0 | ||||||
Inventories, net | 327.2 | 367.7 | ||||||
Other current assets | 46.7 | 53.6 | ||||||
Total current assets | 1,176.1 | 1,127.6 | ||||||
Property, plant and equipment, net | 397.2 | 417.6 | ||||||
Intangible assets, net | 520.9 | 587.7 | ||||||
Goodwill | 1,193.8 | 1,202.3 | ||||||
Insurance for asbestos claims | 32.0 | 35.0 | ||||||
Other assets | 34.8 | 39.1 | ||||||
Total assets | $ | 3,354.8 | $ | 3,409.3 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Current maturities of debt | $ | 20.2 | $ | 24.3 | ||||
Trade payables | 200.8 | 234.1 | ||||||
Compensation and benefits | 54.0 | 53.9 | ||||||
Current portion of pension and postretirement benefit obligations | 5.0 | 5.0 | ||||||
Other current liabilities | 124.4 | 115.7 | ||||||
Total current liabilities | 404.4 | 433.0 | ||||||
Long-term debt | 1,899.9 | 1,915.7 | ||||||
Pension and postretirement benefit obligations | 195.5 | 203.0 | ||||||
Deferred income taxes | 186.0 | 203.3 | ||||||
Reserve for asbestos claims | 32.0 | 35.0 | ||||||
Other liabilities | 49.0 | 66.6 | ||||||
Total liabilities | 2,766.8 | 2,856.6 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued | — | — | ||||||
Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued: 101,435,762 at March 31, 2016 and 102,681,964 at March 31, 2015 | 1.0 | 1.0 | ||||||
Additional paid-in capital | 856.2 | 885.9 | ||||||
Retained deficit | (129.6 | ) | (197.5 | ) | ||||
Accumulated other comprehensive loss | (139.0 | ) | (130.2 | ) | ||||
Treasury stock at cost; 0 and 900,904 shares at March 31, 2016 and March 31, 2015, respectively | — | (6.3 | ) | |||||
Total Rexnord stockholders' equity | 588.6 | 552.9 | ||||||
Non-controlling interest | (0.6 | ) | (0.2 | ) | ||||
Total stockholders' equity | 588.0 | 552.7 | ||||||
Total liabilities and stockholders' equity | $ | 3,354.8 | $ | 3,409.3 |
Fiscal Year Ended | ||||||||
March 31, 2016 | March 31, 2015 | |||||||
Operating activities | ||||||||
Net income | $ | 67.5 | $ | 83.8 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation | 58.0 | 57.1 | ||||||
Amortization of intangible assets | 57.4 | 55.1 | ||||||
Amortization of deferred financing costs | 2.0 | 2.1 | ||||||
Non-cash asset impairment | 17.5 | — | ||||||
Loss on dispositions of property, plant and equipment | 0.6 | 3.0 | ||||||
Deferred income taxes | (13.9 | ) | (36.9 | ) | ||||
Non-cash charge for disposal of discontinued operations | 1.5 | 9.7 | ||||||
Actuarial loss on pension and post retirement benefit obligations | 12.9 | 59.4 | ||||||
Other non-cash charges (credits) | 9.6 | (9.8 | ) | |||||
Stock-based compensation expense | 7.5 | 6.4 | ||||||
Changes in operating assets and liabilities: | ||||||||
Receivables | 1.5 | 6.1 | ||||||
Inventories | 37.7 | (15.2 | ) | |||||
Other assets | 7.5 | 0.1 | ||||||
Accounts payable | (32.4 | ) | 3.7 | |||||
Accruals and other | (15.9 | ) | 21.3 | |||||
Cash provided by operating activities | 219.0 | 245.9 | ||||||
Investing activities | ||||||||
Expenditures for property, plant and equipment | (52.1 | ) | (48.8 | ) | ||||
Acquisitions, net of cash acquired | 1.1 | (138.2 | ) | |||||
Proceeds from dispositions of property, plant and equipment | 5.8 | 0.5 | ||||||
Proceeds from divestiture, net of cash | — | 9.2 | ||||||
Cash used for investing activities | (45.2 | ) | (177.3 | ) | ||||
Financing activities | ||||||||
Proceeds from borrowings of debt | 0.9 | 0.1 | ||||||
Repayments of long-term debt | (19.5 | ) | (19.8 | ) | ||||
Proceeds from borrowings of short-term debt | — | 11.5 | ||||||
Repayments of short-term debt | (5.9 | ) | (16.1 | ) | ||||
Payment of deferred financing fees | (0.9 | ) | — | |||||
Proceeds from exercise of stock options | 5.1 | 1.1 | ||||||
Repurchase of Company common stock | (40.0 | ) | — | |||||
Excess tax benefit on exercise of stock options | 4.0 | 5.8 | ||||||
Cash used for financing activities | (56.3 | ) | (17.4 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (3.2 | ) | (19.9 | ) | ||||
Increase in cash and cash equivalents | 114.3 | 31.3 | ||||||
Cash and cash equivalents at beginning of period | 370.3 | 339.0 | ||||||
Cash and cash equivalents at end of period | $ | 484.6 | $ | 370.3 |
Fiscal 2016 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Net sales | |||||||||||||||||||
Process & Motion Control | $ | 271.6 | $ | 268.8 | $ | 265.8 | $ | 294.1 | $ | 1,100.3 | |||||||||
Water Management, as adjusted (1) | 196.6 | 208.5 | 188.2 | 191.2 | 784.5 | ||||||||||||||
Total, as adjusted (1) | $ | 468.2 | $ | 477.3 | $ | 454.0 | $ | 485.3 | $ | 1,884.8 | |||||||||
Sales growth | |||||||||||||||||||
Core growth | (2)% | (5)% | (4)% | (3)% | (3)% | ||||||||||||||
Currency translation | (5)% | (5)% | (4)% | (2)% | (4)% | ||||||||||||||
Acquisition/divestiture | 2% | 2% | 1% | —% | 1% | ||||||||||||||
Reported growth | (5)% | (8)% | (7)% | (5)% | (6)% | ||||||||||||||
Adjusted EBITDA | |||||||||||||||||||
Process & Motion Control | $ | 57.0 | $ | 55.7 | $ | 56.6 | $ | 65.0 | $ | 234.3 | |||||||||
Water Management | 38.9 | 43.5 | 43.4 | $ | 33.6 | 159.4 | |||||||||||||
Corporate | (8.8 | ) | (6.1 | ) | (7.9 | ) | (5.4 | ) | (28.2 | ) | |||||||||
Total | $ | 87.1 | $ | 93.1 | $ | 92.1 | $ | 93.2 | $ | 365.5 | |||||||||
Adjusted EBITDA % | |||||||||||||||||||
Process & Motion Control | 21.0 | % | 20.7 | % | 21.3 | % | 22.1 | % | 21.3 | % | |||||||||
Water Management | 19.8 | % | 20.9 | % | 23.1 | % | 17.6 | % | 20.3 | % | |||||||||
Total (including Corporate) | 18.6 | % | 19.5 | % | 20.3 | % | 19.2 | % | 19.4 | % | |||||||||
Depreciation & amortization of intangible assets | |||||||||||||||||||
Process & Motion Control | $ | 19.2 | $ | 19.0 | $ | 19.6 | $ | 19.5 | $ | 77.3 | |||||||||
Water Management, as adjusted (1) (2) | 9.0 | 9.4 | 9.9 | 9.8 | 38.1 | ||||||||||||||
Total, as adjusted (1) (2) | $ | 28.2 | $ | 28.4 | $ | 29.4 | $ | 29.4 | $ | 115.4 |
Fiscal 2015 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Net sales | |||||||||||||||||||
Process & Motion Control | $ | 298.4 | $ | 304.8 | $ | 298.9 | $ | 328.1 | $ | 1,230.2 | |||||||||
Water Management, as adjusted (1) | 194.5 | 213.9 | 189.6 | 180.4 | 778.4 | ||||||||||||||
Total, as adjusted (1) | 492.9 | 518.7 | 488.5 | 508.5 | 2,008.6 | ||||||||||||||
Sales growth | |||||||||||||||||||
Core growth | —% | 3% | 5% | (5)% | 1% | ||||||||||||||
Currency translation | —% | —% | (3)% | (5)% | (2)% | ||||||||||||||
Acquisition/divestiture | 3% | 3% | 4% | 3% | 3% | ||||||||||||||
Reported growth | 3% | 6% | 6% | (7)% | 2% | ||||||||||||||
Adjusted EBITDA | |||||||||||||||||||
Process & Motion Control | $ | 69.7 | $ | 77.3 | $ | 73.2 | $ | 86.8 | $ | 307.0 | |||||||||
Water Management | 32.6 | 40.7 | 34.2 | 22.4 | 129.9 | ||||||||||||||
Corporate | (8.2 | ) | (7.2 | ) | (6.4 | ) | (10.1 | ) | (31.9 | ) | |||||||||
Total | $ | 94.1 | $ | 110.8 | $ | 101.0 | $ | 99.1 | $ | 405.0 | |||||||||
Adjusted EBITDA % | |||||||||||||||||||
Process & Motion Control | 23.4 | % | 25.4 | % | 24.5 | % | 26.5 | % | 25.0 | % | |||||||||
Water Management | 16.8 | % | 19.0 | % | 18.0 | % | 12.4 | % | 16.7 | % | |||||||||
Total (including Corporate) | 19.1 | % | 21.4 | % | 20.7 | % | 19.5 | % | 20.2 | % | |||||||||
Depreciation & amortization of intangible assets | |||||||||||||||||||
Process & Motion Control | $ | 18.6 | $ | 18.3 | $ | 18.1 | $ | 19.1 | $ | 74.1 | |||||||||
Water Management, as adjusted (1) (2) | 9.6 | 9.5 | 9.4 | 9.6 | 38.1 | ||||||||||||||
Total, as adjusted (1) (2) | $ | 28.2 | $ | 27.8 | $ | 27.5 | $ | 28.7 | $ | 112.2 |
(1) | During the fourth quarter of fiscal 2016, the Company announced its decision to exit the RHF flow control gate product line within its Water Management platform and its intention to exclude related RHF results from its forward-looking guidance. To improve the comparability of historical and prospective financial information, this supplementary schedule presents pro forma Water Management and consolidated financial information that has been adjusted to exclude the RHF product line. Refer to the "Reconciliation of GAAP to Non-GAAP Financial Measures" schedules below. |
(2) | Water Management depreciation and amortization includes depreciation and amortization associated with RHF of $0.4 million, $0.5 million, $0.5 million and $0.5 million in the first, second, third and fourth quarters of fiscal 2016, respectively. Depreciation and amortization associated with RHF in the first, second, third and fourth quarters of fiscal 2015 were $0.4 million, $0.4 million, $0.5 million and $0.4 million, respectively. |
Fiscal 2016 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Water Management net sales, as reported | $ | 213.5 | $ | 217.1 | $ | 194.4 | $ | 198.5 | $ | 823.5 | |||||||||
Less RHF net sales (1) | (16.9 | ) | (8.6 | ) | (6.2 | ) | (7.3 | ) | (39.0 | ) | |||||||||
Water Management net sales, as adjusted (1) | $ | 196.6 | $ | 208.5 | $ | 188.2 | $ | 191.2 | $ | 784.5 | |||||||||
Fiscal 2015 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Water Management net sales, as reported | $ | 205.2 | $ | 226.2 | $ | 198.2 | $ | 190.4 | $ | 820.0 | |||||||||
Less RHF net sales (1) | (10.7 | ) | (12.3 | ) | (8.6 | ) | (10.0 | ) | (41.6 | ) | |||||||||
Water Management net sales, as adjusted (1) | $ | 194.5 | $ | 213.9 | $ | 189.6 | $ | 180.4 | $ | 778.4 |
Fiscal 2016 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Water Management Income from operations | $ | 27.4 | $ | 28.6 | $ | 22.1 | $ | (5.3 | ) | $ | 72.8 | ||||||||
Depreciation and amortization | 9.0 | 9.4 | 9.9 | 9.8 | 38.1 | ||||||||||||||
Restructuring and other similar charges | 0.6 | 0.8 | 4.5 | 16.6 | 22.5 | ||||||||||||||
Impact of RHF product line exit (1) | 1.9 | 3.8 | 5.4 | 10.2 | 21.3 | ||||||||||||||
Stock-based compensation expense | 0.3 | 0.5 | 0.5 | — | 1.3 | ||||||||||||||
Last-in first-out inventory adjustments | (0.3 | ) | 0.4 | 1.0 | 2.3 | 3.4 | |||||||||||||
Water Management Adjusted EBITDA | $ | 38.9 | $ | 43.5 | $ | 43.4 | $ | 33.6 | $ | 159.4 | |||||||||
Water Management Adjusted EBITDA margin | 19.8 | % | 20.9 | % | 23.1 | % | 17.6 | % | 20.3 | % |
Fiscal 2015 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Water Management Income from operations | $ | 18.5 | $ | 29.6 | $ | 20.8 | $ | 10.1 | $ | 79.0 | |||||||||
Depreciation and amortization | 9.6 | 9.5 | 9.4 | 9.6 | 38.1 | ||||||||||||||
Restructuring and other similar charges | 1.5 | 0.6 | 1.6 | 0.4 | 4.1 | ||||||||||||||
Impact of RHF product line exit (1) | 2.4 | 1.3 | 1.8 | 3.4 | 8.9 | ||||||||||||||
Stock-based compensation expense | 0.2 | 0.3 | 0.3 | 0.3 | 1.1 | ||||||||||||||
Last-in first-out inventory adjustments | (0.2 | ) | (0.6 | ) | 0.3 | (1.4 | ) | (1.9 | ) | ||||||||||
Impact of inventory fair value adjustments | 0.6 | — | — | — | 0.6 | ||||||||||||||
Water Management Adjusted EBITDA | $ | 32.6 | $ | 40.7 | $ | 34.2 | $ | 22.4 | $ | 129.9 | |||||||||
Water Management Adjusted EBITDA margin | 16.8 | % | 19.0 | % | 18.0 | % | 12.4 | % | 16.7 | % |
(1) | During the fourth quarter of fiscal 2016, the Company announced its decision to exit the RHF flow control gate product line within its Water Management platform. To enhance comparability between historical periods, the net sales and corresponding operating loss attributable to the RHF product line exit has been excluded from our adjusted results. |
Fiscal 2016 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Net Income from continuing operations | $ | 21.2 | $ | 22.6 | $ | 24.3 | $ | 0.8 | $ | 68.9 | |||||||||
Actuarial loss on pension and postretirement benefit obligations | — | — | — | 12.9 | 12.9 | ||||||||||||||
Supply chain optimization and footprint repositioning initiatives | — | 0.4 | 1.1 | 1.0 | 2.5 | ||||||||||||||
Impact of RHF product line exit (1) | 2.4 | 4.3 | 5.9 | 10.7 | 23.3 | ||||||||||||||
Restructuring and other similar charges | 1.9 | 2.7 | 6.1 | 24.2 | 34.9 | ||||||||||||||
Amortization of intangible assets | 14.3 | 14.2 | 14.6 | 14.3 | 57.4 | ||||||||||||||
Other expense (income), net | 0.4 | 1.0 | 1.1 | (5.6 | ) | (3.1 | ) | ||||||||||||
Tax effect on above items | (6.8 | ) | (7.8 | ) | (10.1 | ) | (20.5 | ) | (45.2 | ) | |||||||||
Adjusted net income from continuing operations | $ | 33.4 | $ | 37.4 | $ | 43.0 | $ | 37.8 | $ | 151.6 | |||||||||
Weighted-average number of diluted shares outstanding (in thousands) | 104,367 | 102,880 | 102,776 | 103,142 | 103,310 | ||||||||||||||
Adjusted earnings per share | $ | 0.32 | $ | 0.36 | $ | 0.42 | $ | 0.37 | $ | 1.47 |
Fiscal 2015 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
Net Income from continuing operations | $ | 11.6 | $ | 37.8 | $ | 6.7 | $ | 35.7 | $ | 91.8 | |||||||||
Actuarial loss on pension and postretirement benefit obligations | — | — | 31.4 | 28.0 | 59.4 | ||||||||||||||
Impact of RHF product line exit (1) | 2.7 | 1.6 | 2.1 | 3.7 | 10.1 | ||||||||||||||
Restructuring and other similar charges | 3.4 | 1.4 | 2.3 | 5.8 | 12.9 | ||||||||||||||
Amortization of intangible assets | 13.5 | 13.7 | 13.6 | 14.3 | 55.1 | ||||||||||||||
Impact of inventory fair value adjustments | 1.4 | 0.7 | — | 1.1 | 3.2 | ||||||||||||||
Other expense (income), net | 1.3 | 2.3 | 5.4 | (1.8 | ) | 7.2 | |||||||||||||
Tax effect on above items | (7.9 | ) | (6.9 | ) | (19.9 | ) | (18.3 | ) | (53.0 | ) | |||||||||
Tax restructuring | 10.1 | — | — | — | 10.1 | ||||||||||||||
Adjusted net income from continuing operations | $ | 36.1 | $ | 50.6 | $ | 41.6 | $ | 68.5 | $ | 196.8 | |||||||||
Weighted-average number of diluted shares outstanding (in thousands) | 104,529 | 104,710 | 104,785 | 104,808 | 104,727 | ||||||||||||||
Adjusted earnings per share | $ | 0.35 | $ | 0.48 | $ | 0.40 | $ | 0.65 | $ | 1.88 |
(1) | During the fourth quarter of fiscal 2016, the Company announced its decision to exit the RHF flow control gate product line within its Water Management platform and its intention to exclude related RHF results from its forward-looking guidance. To enhance comparability between historical periods, the pre-tax loss of the RHF product line exit has been excluded. |
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