Pentair plc (NYSE:PNR) Q1 2019 Earnings Conference Call - Final Transcript

Apr 06, 2019 • 09:00 am ET


Pentair plc (NYSE:PNR) Q1 2019 Earnings Conference Call - Final Transcript


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Good morning. My name is Zetania, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pentair 2019 First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

I would now like to turn the call over to your host Mr. Jim Lucas. Sir, you may begin your conference.

James C. Lucas

Thanks, Zetania, and welcome to Pentair's first quarter 2019 earnings conference call. We're glad you could join us. I'm Jim Lucas, Senior Vice President of Investor Relations and Treasurer, and with me today is John Stauch, our President and Chief Executive Officer; and Mark Borin, our Chief Financial Officer.

On today's call, we will provide details on our first quarter 2019 performance as well as our second quarter and full-year 2019 outlook as outlined in this morning's press release.

Before we begin, let me remind you that any statements made about the Company's anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in Pentair's most recent Form 10-Q, Form 10-K and today's press release.

Forward-looking statements included herein are made as of today 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.

Today's webcast is accompanied by a presentation, which can be found in the Investor Relations section of Pentair's website. We will reference these slides throughout our prepared remarks. Any references to non-GAAP financials are reconciled in the appendix of the presentation. We will be sure to reserve time for questions and answers after our prepared remarks. I would like to request that you limit your questions to one and a follow-up in order to ensure everyone an opportunity to ask their questions.

I will now turn the call over to John.

John L. Stauch

Thank you, Jim, and good morning, everyone. Please turn to Slide number 4, titled executive summary. As we shared earlier this month, our first quarter of 2019 reflected cold wet weather in many parts of the country, and this had an adverse impact on our first quarter sales of our high margin pool and Specialty Ag Spray businesses. This weather pattern combined with distribution inventory that was created to avoid our heavier than usual price increases related to 2018 tariff impacts created a significant impact to the bottom line.

The slower pull-through of demand in Q1 related to weather and pool means that we expect inventory will now be worked out of the channel in Q2 and Q3, causing the further reduction to our full-year guidance. While these two events create a unique impact on the business, we feel that the situation is isolated to 2019 and our overall thesis for our pool business remains healthy and intact.

On a more positive note, we completed two strategic acquisitions during the first quarter that further our strategic initiative