Watts Water Technologies Inc. (WTS, Financial) filed Quarterly Report for the period ended 2009-03-29.
Watts Water Technologies Inc. designs manufactures and sells an extensive line of products to the water quality and water regulation and control markets. Watts Water Technologies Inc. has a market cap of $796.5 million; its shares were traded at around $21.76 with a P/E ratio of 12.8 and P/S ratio of 0.6. The dividend yield of Watts Water Technologies Inc. stocks is 2.1%. Watts Water Technologies Inc. had an annual average earning growth of 18.2% over the past 10 years. GuruFocus rated Watts Water Technologies Inc. the business predictability rank of 2.5-star.
During the quarter ended March 29, 2009, we were notified by our investment advisor that UBS has challenged our investment advisors participation in the settlement as an eligible holder, as defined. Our investment advisor has responded to UBS and believes that its participation as an eligible holder is supported and legally enforceable. We have continued to account for the ARS and the related rights issued by UBS as though our investment advisors participation has not changed. If ultimately a court were to decide that our investment advisor cannot participate in the settlement, we would no longer have an investment in the $1.6 million rights issued by UBS but would retain our $6.4 million investments in the ARS.
Restructuring and Other Charges. In the first quarter of 2009, we recorded $1.5 million primarily for severance, relocation costs and assets impairment in Europe and North America. In the first quarter of 2008, we recorded $1.0 million for severance and relocation costs in North America and China.
Read the The complete ReportWTS is in the portfolios of John Keeley of Keeley Fund Management.
Watts Water Technologies Inc. designs manufactures and sells an extensive line of products to the water quality and water regulation and control markets. Watts Water Technologies Inc. has a market cap of $796.5 million; its shares were traded at around $21.76 with a P/E ratio of 12.8 and P/S ratio of 0.6. The dividend yield of Watts Water Technologies Inc. stocks is 2.1%. Watts Water Technologies Inc. had an annual average earning growth of 18.2% over the past 10 years. GuruFocus rated Watts Water Technologies Inc. the business predictability rank of 2.5-star.
Highlight of Business Operations:
Our sales in the first quarter continued to be affected by downward pressure from a receding U.S. commercial construction marketplace. In addition, U.S. residential construction activity is at historically low levels. We also saw a marked reduction in European sales as the European economy has migrated into recession. Presently, we believe sales in 2009 will continue to trend down when compared to 2008 as a result of the recessionary pressures. Operating results in the first quarter of 2009, were affected by plant under-absorption and negative foreign currency movements. Plant under-absorption costs were partially offset by our cost saving initiatives. Foreign currency movements, mainly related to the strengthening of the U.S. dollar against the euro and Canadian dollar, negatively impacted the first quarter of 2009 earnings per share by $0.04 compared to the first quarter of 2008. Additionally, the credit market crisis continues to create concerns for our performance in 2009. In response to these concerns, we are taking steps to ensure we remain on a firm fiscal platform. In the latter half of 2008, we announced a reduction of the United States workforce, implemented a nine-month salary freeze in North America and are reviewing discretionary spending in detail to reduce operating expenses. In 2009, we have expanded our cost savings programs on a worldwide basis. We have or will be initiating salary reductions, worker furloughs and other cost reductions in an effort to leverage our costs against anticipated lower sales volumes. Additionally, in February 2009, we expanded our restructuring program to consolidate our manufacturing footprint in North America and China. Savings from this program will not be realized until sometime in 2010. However, we did record a $3.9 million tax charge in the first quarter of 2009 for the expected tax recapture from previously awarded tax holiday programs. Lastly, we are continuing our implementation of lean manufacturing and six sigma disciplines to partially offset any negative pressures to operating income.During the quarter ended March 29, 2009, we were notified by our investment advisor that UBS has challenged our investment advisors participation in the settlement as an eligible holder, as defined. Our investment advisor has responded to UBS and believes that its participation as an eligible holder is supported and legally enforceable. We have continued to account for the ARS and the related rights issued by UBS as though our investment advisors participation has not changed. If ultimately a court were to decide that our investment advisor cannot participate in the settlement, we would no longer have an investment in the $1.6 million rights issued by UBS but would retain our $6.4 million investments in the ARS.
Restructuring and Other Charges. In the first quarter of 2009, we recorded $1.5 million primarily for severance, relocation costs and assets impairment in Europe and North America. In the first quarter of 2008, we recorded $1.0 million for severance and relocation costs in North America and China.
Read the The complete ReportWTS is in the portfolios of John Keeley of Keeley Fund Management.
