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): February 2, 2005

Commission file number 1-11625

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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ 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 February 2, 2005, Pentair, Inc. issued a press release announcing earnings for the fourth quarter and year ended December 31, 2004 and conference call in connection therewith. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

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)	Exhibits
	The following exhibits are 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 February 2, 2005 announcing the earnings results for the fourth quarter and year ended December 31, 2004.

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 February 2, 2005.

PENTAIR, INC.
Registrant
By	/s/ David D. Harrison
	David D. Harrison
	Executive Vice President and Chief Financial Officer (Chief Accounting Officer)

PENTAIR, INC.

Exhibit Index to Current Report on Form 8-K

Dated February 2, 2005

Exhibit Number	Description
99.1	Pentair, Inc. press release dated February 2, 2005 announcing the earnings results for the fourth quarter and year ended December 31, 2004.

EX-99.1

Exhibit 99.1

Pentair, Inc.

5500 Wayzata Blvd., Suite 800

Golden Valley, MN 55416

763 545 1730 Tel

763 656 5204 Fax

News Release

Pentair Reports 39% Sales Growth and a 36% Gain in EPS from Continuing Operations in 2004

Company Highlights a “Tremendous Year Distinguished by Successful Execution”

GOLDEN VALLEY, Minn. — February 2, 2005 — Pentair (NYSE: PNR) today announced its full-year 2004 results, saying they reflect a series of achievements including the strategic repositioning of the Company, sales growth of 39 percent or 14 percent on an organic basis, a 36 percent gain in 2004 earnings per share (EPS) from continuing operations over that of the previous year, and a 50 basis point increase in operating margins to 10.9 percent. Fourth quarter 2004 results were also positive with organic sales rising 10 percent over same period last year, and EPS from continuing operations of $0.33, up 38 percent over the same period last year.

“Pentair’s 2004 was a tremendous year distinguished by successful execution, not the least of which was the sale of our Tools Group and the acquisition of WICOR Industries,” said Randall J. Hogan, Pentair chairman and chief executive officer. “This strategic repositioning, coupled with double digit growth and increased margins driven by good execution of our operating initiatives, has delivered total shareholder return in excess of 90 percent in 2004. As we enter 2005, we believe we are well-positioned to continue our high level of performance with two strong and growing business platforms, the destinies of which are both firmly in our grasp.”

Pentair’s fourth quarter 2004 EPS from continuing operations of $0.33 increased 38 percent over fourth quarter 2003 EPS from continuing operations of $0.24. Pentair’s fourth quarter 2004 net sales totaled $651.5 million, up 61 percent from $404.7 million in the same period a year ago. Fourth quarter organic sales – removing the effects of acquisitions and excluding favorable foreign currency exchange – grew 10 percent. Further adjusting for the three fewer days in the fourth quarter, organic sales growth was 15 percent. Operating income from continuing operations for the fourth quarter 2004 totaled $62.0 million, 47 percent greater than the $42.2 million reported in the fourth quarter of 2003. Excluding acquisitions, operating income increased approximately eight percent in the fourth quarter. Fourth quarter 2004 free cash flow was $46.1 million, bringing the total for the year to $215.2 million.

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For the full year 2004, Pentair’s sales from continuing operations increased 39 percent to $2.278 billion from the 2003 total of $1.643 billion. Operating income increased 45 percent to $247.2 million in 2004 from $170.2 million in 2003. EPS from continuing operations of $1.35 in 2004 increased 36 percent over 2003 EPS from continuing operations of $0.99.

In the Water Group, fourth quarter 2004 sales of $469.5 million were 86 percent higher than the $252.3 million recorded in the same period last year, reflecting the impact of the WICOR acquisition and strong organic growth. Organic sales, without acquisitions and foreign exchange; and adjusted for days, increased about 11 percent, reflecting strong domestic pool sales, and growth in US, Asian, and European pump and filtration sales.

Fourth quarter 2004 operating income of $49.1 million in the Water Group reflected a 52 percent gain over the same period last year. Operating income margins in the Water Group were 10.5 percent in the fourth quarter 2004, down 230 basis points reflecting the lower initial margins of the former WICOR businesses and one-time costs related to the consolidation of pump facilities and other integration activities. Adding back these one-time costs of about $5 million, operating income margins in the fourth quarter would have been 11.5 percent.

Pentair said integration of the former WICOR water businesses advanced in the fourth quarter with nine facilities closed or consolidated to date, and another six closings or consolidations in process. Construction of a water products manufacturing facility near the campus of the existing Enclosures operation in Reynosa, Mexico, will be complete in the first quarter of 2005, with product transfers starting immediately thereafter. Product rationalization efforts are well underway, and early results include a 20 percent reduction in storage tank SKUs and a 50 percent reduction in residential filtration SKUs. Sales forces serving certain pump markets were realigned to take advantage of cross-selling opportunities. Consistent with its original plan, Pentair expects integration benefits to begin exceeding costs late in the first quarter of 2005.

Enclosures Group sales in the fourth quarter 2004 totaled $182.2 million compared to a year-earlier total of $152.5 million, a 20 percent increase. This performance was driven by the Group’s improved market position with continued success in penetrating new vertical markets, new products, and growth in core markets. Pentair noted that the fourth quarter of 2004 was the Enclosure Group’s eighth consecutive quarter of sequential sales growth.

Fourth quarter operating income in the Enclosures Group increased 48 percent from the same period last year, totaling $23.7 million in 2004 versus $16.0 million in 2003. Margins reached 13 percent, expanding by 250 basis points over the fourth quarter 2003 and by 20 basis points over the third quarter 2004, delivering the Enclosures Group’s 12th consecutive quarter of sequential margin improvement. This performance was driven by higher volume and productivity gains from lean enterprise and supply management initiatives.

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“Our efforts to achieve operating excellence have produced solid progress over the last four years and, now, we believe we have transformed Pentair to maximize our growth opportunities and deliver even higher levels of performance,” Hogan said. “As we enter 2005, the integration of the former WICOR businesses is proceeding as planned, and we are executing a robust and reliable integration process that we expect will continue to serve us well when applied to future Water and Enclosures acquisitions.

“As for 2005, we expect first quarter EPS of between $0.35 and $0.38, which is at least 25 percent higher than the same period last year,” Hogan said. “For the second quarter 2005, we anticipate EPS of $0.61 to $0.65, which is at minimum 45 percent higher than the same period in 2004. This guidance reflects the new seasonality of the transformed Pentair. In addition, we are reaffirming our previous guidance for the full-year 2005 of $1.95 to $2.10, an increase of more than 45 percent from 2004.”

In a separate news release issued today, Pentair announced it has appointed Richard J. Cathcart, formerly president and COO of Pentair’s Water Group, to vice chairman. In his new role, Cathcart will lead Pentair’s intensified growth focus with primary responsibilities for international growth and for business development. He will continue in his leadership role with Pentair Water.

A Pentair conference call scheduled for 11:00 a.m. CST today will be webcast live via http://www.pentair.com. A link to the conference call is posted on the site’s “Financial Information” page and will be archived at the same location.

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Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

	Three months ended						Year ended
In thousands, except per-share data	December 31 2004			December 31 2003			December 31 2004			December 31 2003
Net sales	$	651,476		$	404,677		$	2,278,129		$	1,642,987
Cost of goods sold		468,274			291,184			1,623,419			1,196,757
Gross profit		183,202			113,493			654,710			446,230
% of net sales		28.1	%		28.0	%		28.7	%		27.2	%
Selling, general and administrative		111,221			65,089			376,015			253,087
% of net sales		17.1	%		16.1	%		16.5	%		15.4	%
Research and development		9,932			6,227			31,453			22,932
% of net sales		1.5	%		1.5	%		1.4	%		1.4	%
Operating income		62,049			42,177			247,242			170,211
% of net sales		9.5	%		10.4	%		10.9	%		10.4	%
Net interest expense		10,892			7,824			37,210			26,395
% of net sales		1.7	%		1.9	%		1.6	%		1.6	%
Income from continuing operations before income taxes		51,157			34,353			210,032			143,816
% of net sales		7.9	%		8.5	%		9.2	%		8.8	%
Provision for income taxes		17,460			10,927			73,008			45,666
Effective tax rate		34.1	%		31.8	%		34.8	%		31.8	%
Income from continuing operations		33,697			23,426			137,024			98,150
Income from discontinued operations, net of tax		—			10,751			40,248			46,138
Loss on disposal of discontinued operations, net of tax		(6,047	)		(2,936	)		(6,047	)		(2,936	)
Net income	$	27,650		$	31,241		$	171,225		$	141,352
Earnings per common share
Basic
Continuing operations	$	0.34		$	0.24		$	1.38		$	1.00
Discontinued operations		(0.07	)		0.08			0.34			0.44
Basic earnings per common share	$	0.27		$	0.32		$	1.72		$	1.44
Diluted
Continuing operations	$	0.33		$	0.24		$	1.35		$	0.99
Discontinued operations		(0.07	)		0.08			0.33			0.43
Diluted earnings per common share	$	0.26		$	0.32		$	1.68		$	1.42
Weighted average common shares outstanding
Basic		100,014			97,926			99,316			97,876
Diluted		102,541			99,532			101,706			99,620
Cash dividends declared per common share	$	0.110		$	0.105		$	0.430		$	0.410

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Pentair, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

In thousands	December 31 2004			December 31 2003
Assets
Current assets
Cash and cash equivalents	$	31,495		$	47,989
Accounts and notes receivable, net		396,459			251,475
Inventories		323,676			166,862
Current assets of discontinued operations		—			313,399
Deferred tax assets		52,899			30,871
Prepaid expenses and other current assets		24,433			18,854
Total current assets		828,962			829,450
Property, plant and equipment, net		336,302			233,106
Other assets
Assets of discontinued operations		393			539,892
Goodwill		1,620,404			997,183
Intangibles, net		258,438			98,490
Other		80,213			82,556
Total other assets		1,959,448			1,718,121
Total assets	$	3,124,712		$	2,780,677
Liabilities and Shareholders’ Equity
Current liabilities
Current maturities of long-term debt	$	11,957		$	73,631
Accounts payable		195,289			93,043
Employee compensation and benefits		104,821			61,213
Accrued product claims and warranties		42,524			24,427
Current liabilities of discontinued operations		192			155,898
Income taxes		27,395			14,912
Other current liabilities		144,664			74,327
Total current liabilities		526,842			497,451
Long-term debt		724,148			732,862
Pension and other retirement compensation		135,356			100,234
Post-retirement medical and other benefits		69,667			26,227
Deferred tax liabilities		146,698			60,636
Other noncurrent liabilities		71,154			62,208
Liabilities of discontinued operations		3,054			39,581
Total liabilities		1,676,919			1,519,199
Commitments and contingencies
Shareholders’ equity		1,447,793			1,261,478
Total liabilities and shareholders’ equity	$	3,124,712		$	2,780,677
Days sales in accounts receivable (13 month moving average)		52			54
Days inventory on hand (13 month moving average)		62			59
Days in accounts payable (13 month moving average)		57			54
Debt/total capital		33.7	%		39.0	%

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Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Year ended
In thousands	December 31 2004			December 31 2003
Operating activities
Net income	$	171,225		$	141,352
Adjustments to reconcile net income to net cash provided by operating activities
Net income from discontinued operations		(40,248	)		(46,138	)
Loss on disposal of discontinued operations		6,047			2,936
Depreciation		47,063			40,809
Amortization		13,534			4,074
Deferred income taxes		16,736			31,319
Stock compensation		—			306
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		26,328			(5,080	)
Inventories		(51,996	)		13,174
Prepaid expenses and other current assets		2,176			(4,781	)
Accounts payable		17,864			(12,758	)
Employee compensation and benefits		4,596			4,813
Accrued product claims and warranties		2,993			(1,756	)
Income taxes		6,352			5,437
Other current liabilities		9,191			(3,336	)
Pension and post-retirement benefits		11,508			(2,108	)
Other assets and liabilities		6,794			6,769
Net cash provided by continuing operations		250,163			175,032
Net cash provided by discontinued operations		13,928			87,907
Net cash provided by operating activities		264,091			262,939
Investing activities
Capital expenditures		(48,867	)		(43,622	)
Acquisitions, net of cash acquired		(869,155	)		(229,094	)
Divestitures		773,399			(2,400	)
Equity investments		60			(5,294	)
Other		—			48
Net cash used for investing activities		(144,563	)		(280,362	)
Financing activities
Repayment of short-term borrowings, net		(4,162	)		(873	)
Proceeds from long-term debt		343,316			780,857
Repayment of long-term debt		(440,518	)		(709,886	)
Proceeds from exercise of stock options		10,862			5,795
Repurchases of common stock		(4,200	)		(1,589	)
Dividends paid		(43,128	)		(40,494	)
Net cash provided by (used for) financing activities		(137,830	)		33,810
Effect of exchange rate changes on cash		1,808			(8,046	)
Change in cash and cash equivalents		(16,494	)		8,341
Cash and cash equivalents, beginning of period		47,989			39,648
Cash and cash equivalents, end of period	$	31,495		$	47,989
Free cash flow
Net cash provided by operating activities	$	264,091		$	262,939
Less capital expenditures		(48,867	)		(43,622	)
Free cash flow	$	215,224		$	219,317

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Pentair, Inc. and Subsidiaries

Supplemental Financial Information by Reportable Business Segment (Unaudited)

In thousands	First Qtr 2004			Second Qtr 2004			Third Qtr 2004			Fourth Qtr 2004			Year 2004
Net sales to external customers
Water	$	314,002		$	353,345		$	426,696		$	469,469		$	1,563,512
Enclosures		174,803			178,103			181,100			182,189			716,195
Intersegment sales elimination		(352	)		(1,015	)		(29	)		(182	)		(1,578	)
Consolidated	$	488,453		$	530,433		$	607,767		$	651,476		$	2,278,129
Operating income (loss)
Water	$	41,547		$	59,253		$	47,410		$	49,100		$	197,310
Enclosures		19,354			21,590			23,211			23,689			87,844
Other		(10,791	)		(9,860	)		(6,521	)		(10,740	)		(37,912	)
Consolidated	$	50,110		$	70,983		$	64,100		$	62,049		$	247,242
Operating income as a percent of net sales
Water		13.2	%		16.8	%		11.1	%		10.5	%		12.6	%
Enclosures		11.1	%		12.1	%		12.8	%		13.0	%		12.3	%
Consolidated		10.3	%		13.4	%		10.5	%		9.5	%		10.9	%
In thousands	First Qtr 2003			Second Qtr 2003			Third Qtr 2003			Fourth Qtr 2003			Year 2003
Net sales to external customers
Water	$	246,440		$	290,692		$	270,901		$	252,332		$	1,060,365
Enclosures		139,453			145,236			146,232			152,494			583,415
Intersegment sales elimination		(142	)		(355	)		(147	)		(149	)		(793	)
Consolidated	$	385,751		$	435,573		$	416,986		$	404,677		$	1,642,987
Operating income (loss)
Water	$	29,504		$	46,002		$	36,197		$	32,259		$	143,962
Enclosures		9,865			11,703			13,555			15,972			51,095
Other		(7,217	)		(7,015	)		(4,560	)		(6,054	)		(24,846	)
Consolidated	$	32,152		$	50,690		$	45,192		$	42,177		$	170,211
Operating income as a percent of net sales
Water		12.0	%		15.8	%		13.4	%		12.8	%		13.6	%
Enclosures		7.1	%		8.1	%		9.3	%		10.5	%		8.8	%
Consolidated		8.3	%		11.6	%		10.8	%		10.4	%		10.4	%

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About Pentair, Inc.

Pentair (www.pentair.com) is a diversified operating company headquartered in 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 Enclosures Group is a leader in the global enclosures market, designing and manufacturing standard, modified and custom enclosures that house and protect sensitive electronics and electrical components. 2004 revenues from continuing operations were $2.28 billion, or $2.76 billion on a pro forma basis (as if Pentair’s 2004 acquisitions had been completed at the beginning of the year). Pentair has approximately 13,000 employees worldwide.

Any statements made about the company’s anticipated financial results are forward-looking statements subject to risks and uncertainties such as continued economic growth; the ability to integrate the WICOR acquisition successfully and the risk that expected synergies may not be fully realized or may take longer to realize than expected; foreign currency effects; retail and industrial demand; product introductions; and pricing and other competitive pressures. 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.

Pentair Contacts:
Rachael Jarosh	Mark Cain
Communications	Investor Relations
Tel.: (763) 656-5280	Tel.: (763) 656-5278
E-mail: rachael.jarosh@pentair.com	E-mail: mark.cain@pentair.com

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