8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported): April 27, 2010

Commission file number 000-04689

Pentair, Inc.

(Exact name of Registrant as specified in its charter)

Minnesota	41-0907434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification number)
5500 Wayzata Blvd, Suite 800, Golden Valley, Minnesota	55416
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (763) 545-1730

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

On April 27, 2010, Pentair, Inc. (the “Company”) issued a press release announcing its earnings for the first quarter of 2010 and a conference call in connection therewith. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

This press release refers to certain non-GAAP financial measures (adjusted operating income, adjusted operating margins, adjusted earnings per share and free cash flow) and a reconciliation of those non-GAAP financial measures to the corresponding financial measures contained in the Company’s financial statements prepared in accordance with generally accepted accounting principles.

Adjusted operating income, adjusted operating margins and adjusted earnings per share eliminate certain expenses incurred in 2009 to restructure certain operations of the Company by reducing headcount as a result of the significant continuing downturn in the global economy. Management utilizes these adjusted financial measures to assess the run-rate of its continuing operations against those of comparable periods without the distortion of these factors. The Company believes that these non-GAAP financial measures will be useful to investors as well to assess the continuing strength of the Company’s underlying operations in light of the downturn in the residential end markets.

The Company uses free cash flow to assess its cash flow performance. The Company believes free cash flow is an important measure of operating performance because it provides the Company and its investors a measurement of cash generated from operations that is available to pay dividends and repay debt. In addition, free cash flow is used as a criterion to measure and pay compensation-based incentives. The Company’s measure of free cash flow may not be comparable to similarly titled measures reported by other companies.

The information contained in this Current Report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01 Financial Statements and Exhibits

(a)	Financial Statements of Businesses Acquired
	Not applicable.
(b)	Pro Forma Financial Information
	Not applicable.
(c)	Shell Company Transactions
	Not applicable
(d)	Exhibits
	The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:

Exhibit	Description
99.1	Pentair, Inc. press release dated April 27, 2010 announcing the earnings results for the first quarter 2010.

SIGNATURE

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, thereunto duly authorized, on April 27, 2010.

PENTAIR, INC. Registrant
By	/s/ John L. Stauch
	John L. Stauch
	Executive Vice President and Chief Financial Officer

PENTAIR, INC.

Exhibit Index to Current Report on Form 8-K
Dated April 27, 2010

Exhibit
Number	Description
99.1	Pentair, Inc. press release dated April 27, 2010 announcing the earnings results for the first quarter 2010.

EX-99.1

Exhibit 99.1

Pentair, Inc.
5500 Wayzata Blvd., Suite 800
MInneapolis, MN 55416
763 545 1730 Tel
763 656 5400 Fax

News Release

Pentair Reports First Quarter 2010 Net Income Per Share from Continuing Operations of $0.35 on 12 Percent Growth in Sales

• Reports first quarter sales of $707 million, up 12 percent year-over-year

• Operating margins in Water Group and Technical Products increase year over year

• Earnings per share up 94 percent year-over-year on GAAP basis, or up 75 percent when compared to adjusted first quarter 2009 EPS

• First quarter free cash flow improved year-over-year and is on track to achieve full year target of over $225 million

All financial information and period-to-period references are on a continuing operations basis unless otherwise noted. Reconciliations to discontinued operations as well as GAAP and Non-GAAP reconciliations are in the attached financial tables.

MINNEAPOLIS, Minn. — April 27, 2010 — Pentair, Inc. (NYSE: PNR) today announced first quarter 2010 net earnings per diluted share from continuing operations (EPS) of $0.35. This represents an increase of 94 percent as compared to the $0.18 of EPS in the first quarter last year. Adjusting first quarter 2009 for restructuring items, year-over-year adjusted EPS increased 75 percent.

Total company sales increased 12 percent to $707 million, compared with $634 million in the first quarter of 2009. The company delivered first quarter operating income of $64 million, up 71 percent year-over-year or up 59 percent compared to adjusted first quarter 2009 operating income. Overall, operating margins for the first quarter increased 270 basis points to 9 percent when compared to adjusted first quarter 2009 operating margins. The positive impact on operating margins from higher volume and productivity more than offset the negative impact related to modest selling price reductions and inflation.

Total company free cash flow was a usage of $22 million for the quarter versus a usage of $33 million for the year-earlier quarter. The company said it is on track to achieve free cash flow of $225 million for 2010, driven by improvements in working capital and earnings growth.

“We had a great start to the year with double digit sales increases, strong earnings growth and free cash flow already ahead of last year’s robust levels,” said Randall J. Hogan, Pentair chairman and chief executive officer. “Last year we put the company in position to weather the downturn and prepare for growth. As evidenced in our first quarter sales growth, we believe markets are steadily recovering and emerging markets are once again strong,” he added.

(more)

-2-

First Quarter Business Highlights

The Water Group delivered $478 million in sales, a 13 percent increase year-over-year. Sales were up 11 percent excluding foreign exchange.

• Residential Flow sales were up 12 percent versus the year-ago quarter. Strong growth in residential channels coupled with demand for residential de-watering products to protect homes from heavier than normal flooding helped to drive sales.

• Residential Filtration sales were up 14 percent as fast growth regions grew in the high teens and the U.S. market continued its steady recovery.

• Pool sales were up 25 percent as the business continued to expand its dealer base, new energy efficient products were well received in the marketplace and key distributors started to build inventory levels.

• Engineered Flow sales were up 10 percent as municipal and industrial pump sales remained strong while commercial water systems were down significantly reflecting a weak commercial construction market globally.

• Filtration Solutions sales were up 8 percent led by strong double-digit sales growth in Food Service, which helped overcome weaker energy and desalination sales.

The Water Group’s first quarter reported operating income totaled $42 million, up 56 percent as compared to $27 million in the same period last year. When compared to first quarter 2009 adjusted operating income of $28 million, first quarter 2010 operating margins increased by 210 basis points to 8.8 percent. The benefits from higher volume and productivity more than offset the negative impact from inflation and growth investments. First quarter 2010 margins are inclusive of approximately 100 basis points of pay as you go expenses related to previously announced plant moves incurred in the quarter.

Technical Products delivered first quarter 2010 sales of $229 million, an increase of 9 percent versus the year-earlier period. Sales were up 7 percent excluding the impact of foreign exchange.

• Strong sales in industrial, infrastructure and general electronics markets offset declines in commercial, security and defense sales.

• International markets were up nine percent, led by Asia up 13 percent in local currencies.

Technical Products’ first quarter reported operating income totaled $33 million, up 62 percent compared to $20 million in the same quarter last year. When compared to first quarter 2009 adjusted operating income of $21 million, first quarter 2010 operating margins increased 440 basis points to 14.5 percent margins. The positive impact of volume, productivity and material savings more than offset the negative impact from investments. First quarter 2010 margins are inclusive of approximately 50 basis points of pay as you go expenses related to previously announced plant moves incurred in the quarter.

“We delivered the growth and financial results we expected — and are seeing solid indicators that trends are favorable for the balance of the year,” said Hogan. “In the quarter, we reinstated major employee benefits, incentive accruals, sales volume rebate programs and accelerated the remainder of our major restructuring actions — all of which impacted and are included in our results, which met the high end of our original guidance,” he added.

(more)

-3-

Outlook

The company updates its second quarter 2010 EPS guidance to a range of $0.52 to $0.55, an increase of over 35 percent year-over-year over adjusted second quarter 2009 earnings. The company expects second quarter sales to be up over 10 percent compared to the same period last year.

The company maintains its full year 2010 EPS guidance range of $1.75 to $1.90, an increase of 19 to 29 percent versus 2009 adjusted EPS. The company expects full year 2010 sales to be approximately $2.9 billion and full year free cash flow to be approximately $225 million.

“We are encouraged by our first quarter results and, as we enter the critical second quarter, we have positive order trends, strong backlog and solid execution against our productivity initiatives,” said Hogan. “We are maintaining our full year outlook as we validate the sustainability of the trends we are experiencing today,” he added.

Earnings Conference Call

Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company’s performance and first quarter 2010 results and 2010 outlook on a two-way conference call with investors and a live audio webcast at 9 a.m. Eastern today. Reconciliation of non-GAAP financial measures are set forth in the attachments to this first quarter 2010 earnings release and the first quarter 2010 earnings conference call presentation, both of which can be found at Pentair’s web site (www.pentair.com). Related financial charts and certain other information to be discussed on the conference call will be available on the company’s website shortly before the conference call. The webcast and presentation will be archived at the same site following the conclusion of the conference call.

Caution concerning forward-looking statements

Any statements made about the company’s anticipated financial results are forward-looking statements subject to risks and uncertainties such as the magnitude, timing and scope of recovery from the global economic downturn; the strength of housing and related markets; the risk that expected benefits from our recent restructuring and other cost reduction plans may not be fully realized, or may take longer to realize than expected; foreign currency effects; material inflation outpacing our productivity and pricing actions; retail, commercial and industrial demand; product introductions; and pricing and other competitive pressures, as well as other risk factors set forth in our SEC filings. Forward-looking statements included herein are made as of the date hereof, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results.

About Pentair, Inc.

Pentair (www.pentair.com) is a global diversified industrial company headquartered in Minneapolis, Minnesota. Its Water Group is a global leader in providing innovative products and systems used worldwide in the movement, treatment, storage and enjoyment of water. Pentair’s Technical Products Group is a leader in the global enclosures and thermal management markets, designing and manufacturing thermal management products and standard, modified, and custom enclosures that protect sensitive electronics and the people that use them. With 2009 revenues of $2.7 billion, Pentair employs approximately 13,500 people worldwide.

(more)

-4-

Pentair Contacts:
Todd Gleason
Vice President, Strategic Planning & Investor Relations
Tel.: (763) 656-5570
E-mail: todd.gleason@pentair.com

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

	Three months ended
	April 3,			March 28,
In thousands, except per-share data	2010			2009
Net sales	$	707,013		$	633,840
Cost of goods sold		493,311			464,608
Gross profit		213,702			169,232
% of net sales		30.2	%		26.7	%
Selling, general and administrative		132,890			117,275
% of net sales		18.8	%		18.5	%
Research and development		17,211			14,743
% of net sales		2.4	%		2.3	%
Operating income		63,601			37,214
% of net sales		9.0	%		5.9	%
Other (income) expense:
Equity (income) losses of unconsolidated subsidiary		(84	)		277
Net interest expense		9,527			11,784
% of net sales		1.3	%		1.9	%
Income from continuing operations before income taxes and noncontrolling interest		54,158			25,153
% of net sales		7.7	%		4.0	%
Provision for income taxes		18,129			7,432
Effective tax rate		33.5	%		29.5	%
Income from continuing operations		36,029			17,721
Gain on disposal of discontinued operations, net of tax		524			10
Net income before noncontrolling interest		36,553			17,731
Noncontrolling interest		1,232			466
Net income attributable to Pentair, Inc.	$	35,321		$	17,265
Net income from continuing operations attributable to Pentair, Inc.	$	34,797		$	17,255
Earnings per common share attributable to Pentair, Inc.
Basic
Continuing operations	$	0.35		$	0.18
Discontinued operations		0.01			—
Basic earnings per common share	$	0.36		$	0.18
Diluted
Continuing operations	$	0.35		$	0.18
Discontinued operations		0.01			—
Diluted earnings per common share	$	0.36		$	0.18
Weighted average common shares outstanding
Basic		98,030			97,375
Diluted		99,568			97,966
Cash dividends declared per common share	$	0.19		$	0.18

Pentair, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

	April 3,		December 31,		March 28,
In thousands	2010		2009		2009
Assets
Current assets
Cash and cash equivalents	$	46,783	$	33,396	$	34,708
Accounts and notes receivable, net		550,830		455,090		505,196
Inventories		363,667		360,627		393,201
Deferred tax assets		49,665		49,609		51,268
Prepaid expenses and other current assets		43,580		47,576		47,848
Total current assets		1,054,525		946,298		1,032,221
Property, plant and equipment, net		330,201		333,688		337,898
Other assets
Goodwill		2,067,836		2,088,797		2,092,825
Intangibles, net		472,398		486,407		504,921
Other		56,224		56,144		56,964
Total other assets		2,596,458		2,631,348		2,654,710
Total assets	$	3,981,184	$	3,911,334	$	4,024,829
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	3,731	$	2,205	$	7,404
Current maturities of long-term debt		51		81		630
Accounts payable		229,502		207,661		196,767
Employee compensation and benefits		77,496		74,254		75,664
Current pension and post-retirement benefits		8,948		8,948		8,890
Accrued product claims and warranties		37,803		34,288		38,639
Income taxes		8,571		5,659		4,312
Accrued rebates and sales incentives		24,653		27,554		20,754
Other current liabilities		86,763		85,629		98,919
Total current liabilities		477,518		446,279		451,979
Other liabilities
Long-term debt		862,351		803,351		991,807
Pension and other retirement compensation		231,733		234,948		270,443
Post-retirement medical and other benefits		30,630		31,790		34,299
Long-term income taxes payable		25,720		26,936		28,076
Deferred tax liabilities		145,777		146,630		145,565
Other non-current liabilities		95,399		95,060		97,260
Total liabilities		1,869,128		1,784,994		2,019,429
Shareholders’ equity		2,112,056		2,126,340		2,005,400
Total liabilities and shareholders’ equity	$	3,981,184	$	3,911,334	$	4,024,829
Days sales in accounts receivable (13 month moving average)		61		62		60
Days inventory on hand (13 month moving average)		86		90		85
Days in accounts payable (13 month moving average)		66		66		61

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Three months ended
	April 3,			March 28,
In thousands	2010			2009
Operating activities
Net income before noncontrolling interest	$	36,553		$	17,731
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Gain on disposal of discontinued operations		(524	)		(10	)
Equity (income) losses of unconsolidated subsidiary		(84	)		277
Depreciation		14,564			15,170
Amortization		6,746			7,233
Deferred income taxes		1,617			7
Stock compensation		6,802			4,720
Excess tax benefits from stock-based compensation		(980	)		(64	)
(Gain) loss on sale of assets		(147	)		19
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		(99,054	)		(47,021	)
Inventories		(5,525	)		21,069
Prepaid expenses and other current assets		2,826			15,008
Accounts payable		22,479			(18,052	)
Employee compensation and benefits		1,694			(15,470	)
Accrued product claims and warranties		3,647			(2,797	)
Income taxes		3,446			(922	)
Other current liabilities		(1,584	)		(13,337	)
Pension and post-retirement benefits		(426	)		1,801
Other assets and liabilities		(2,363	)		(2,415	)
Net cash provided by (used for) operating activities		(10,313	)		(17,053	)
Investing activities
Capital expenditures		(12,059	)		(15,979	)
Proceeds from sale of property and equipment		127			280
Other		292			(40	)
Net cash provided by (used for) investing activities		(11,640	)		(15,739	)
Financing activities
Net short-term borrowings		1,526			7,494
Proceeds from long-term debt		200,000			135,000
Repayment of long-term debt		(141,025	)		(96,679	)
Excess tax benefits from stock-based compensation		980			64
Stock issued to employees, net of shares withheld		(1,938	)		680
Dividends paid		(18,837	)		(17,710	)
Net cash provided by (used for) financing activities		40,706			28,849
Effect of exchange rate changes on cash and cash equivalents		(5,366	)		(693	)
Change in cash and cash equivalents		13,387			(4,636	)
Cash and cash equivalents, beginning of period		33,396			39,344
Cash and cash equivalents, end of period	$	46,783		$	34,708
Free cash flow
Net cash provided by (used for) operating activities	$	(10,313	)	$	(17,053	)
Capital expenditures		(12,059	)		(15,979	)
Proceeds from sale of property and equipment		127			280
Free cash flow	$	(22,245	)	$	(32,752	)

Pentair, Inc. and Subsidiaries

Supplemental Financial Information by Reportable Business Segment (Unaudited)

	First Qtr			First Qtr
In thousands	2010			2009
Net sales to external customers
Water Group	$	478,038		$	423,932
Technical Products Group		228,975			209,908
Consolidated	$	707,013		$	633,840
Intersegment sales
Water Group	$	517		$	289
Technical Products Group		703			233
Intercompany sales eliminations		(1,220	)		(522	)
Consolidated	$	—		$	—
Operating income (loss)
Water Group	$	42,138		$	26,976
Technical Products Group		33,098			20,462
Unallocated corporate expenses and intercompany eliminations		(11,635	)		(10,224	)
Consolidated	$	63,601		$	37,214
Operating income as a percent of net sales
Water		8.8	%		6.4	%
Technical Products		14.5	%		9.7	%
Consolidated		9.0	%		5.9	%

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2009 to the “Adjusted” non-GAAP
excluding the effect of 2009 adjustments (Unaudited)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
In thousands, except per-share data	2009			2009			2009			2009			2009
Net sales	$	633,840		$	693,712		$	662,665		$	702,251		$	2,692,468
Operating income — as reported		37,214			63,560			66,682			52,492			219,948
% of net sales		5.9	%		9.2	%		10.1	%		7.5	%		8.2	%
Adjustments:
Restructuring and asset impairment		2,824			2,944			7,295			24,881			37,944
Operating income — as adjusted		40,038			66,504			73,977			77,373			257,892
% of net sales		6.3	%		9.6	%		11.2	%		11.0	%		9.6	%
Net income from continuing operations attributable to Pentair, Inc. — as reported		17,255			32,006			37,033			29,218			115,512
Adjustments — tax affected
Restructuring and asset impairment, net of minority interest		1,864			1,943			4,815			17,549			26,171
Bond tender		—			3,171			—			—			3,171
Net income from continuing operations attributable to Pentair, Inc. — as adjusted		19,119			37,120			41,848			46,767			144,854
Continuing earnings per common share attributable to Pentair, Inc. — diluted
Diluted earnings per common share — as reported	$	0.18		$	0.33		$	0.38		$	0.29		$	1.17
Adjustments		0.02			0.05			0.04			0.18			0.30
Diluted earnings per common share — as adjusted	$	0.20		$	0.38		$	0.42		$	0.47		$	1.47
Weighted average common shares outstanding — Diluted		97,966			98,422			98,641			99,226			98,522

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2009 to the “Adjusted” non-GAAP
excluding the effect of 2009 adjustments (Unaudited)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
In thousands	2009			2009			2009			2009			2009
Water
Net sales	$	423,932		$	486,990		$	461,570		$	475,272		$	1,847,764
Operating income — as reported		26,976			49,781			53,085			33,903			163,745
% of net sales		6.4	%		10.2	%		11.5	%		7.1	%		8.9	%
Adjustments — restructuring and asset impairment		1,464			1,460			2,639			21,336			26,899
Operating income — as adjusted		28,440			51,241			55,724			55,239			190,644
% of net sales		6.7	%		10.5	%		12.1	%		11.6	%		10.3	%
Technical Products
Net sales	$	209,908		$	206,722		$	201,095		$	226,979		$	844,704
Operating income — as reported		20,462			23,578			24,356			31,959			100,355
% of net sales		9.7	%		11.4	%		12.1	%		14.1	%		11.9	%
Adjustments — restructuring and asset impairment		792			1,139			4,557			2,729			9,217
Operating income — as adjusted		21,254			24,717			28,913			34,688			109,572
% of net sales		10.1	%		12.0	%		14.4	%		15.3	%		13.0	%