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Thomas explores strategic alternatives
PUMP INDUSTRY ANALYST
NEWS
THOMAS EXPLORES STRATEGIC ALTERNATIVES Thomas Industries Inc parent company of pump manufacturers Rietschle Thomas and Oberdorfer is reviewing strategic and financial alternatives, including the possible sale of the company. The pump and compressor company, which is being advised by Robert W Baird & Co, is also looking at options like acquisitions, stock buybacks and a special cash dividend. Thomas, headquartered in Louisville, Kentucky, designs, manufactures and markets Rietschle Thomas brand pumps and compressors and Oberdorfer bronze and high alloy liquid pumps. Other products include Welch laboratory equipment and automotive component castings. Earlier this year Thomas sold its 32% interest in Genlyte Thomas Group for US$400 million in cash in order to focus solely on growing the pump and compressor business and driving shareholder value (see Pump Industry Analyst, June and September 2004). At the time Thomas said that it would use
about US$100 million of the proceeds to pay off debt and that it would pursue several internal growth initiatives and external acquisition opportunities, as well as consider other uses for the proceeds including the payment of a special dividend and share repurchases. For the first nine months of this year, the company reported net sales of US$309.9 million, a record for the pump and compressor maker, compared with US$277.1 million in 2003. Net income for the nine months was US$110.7 million.
COMMENT After the sale of its interest in Genlyte Thomas Group for US$400 million in cash, Thomas Industries finds itself cash-rich with a number of options open to the company. Having transformed itself in August 2002 with the acquisition of Germany’s Werner Rietschle GmbH + Co KG, Thomas’s next steps will be worth watching. ■
UPBEAT ITT FORECASTS STRONG GROWTH FOR 2005 ITT Industries Inc says that solid growth in its core businesses and improved operating performance in 2004 have set the stage for continued positive momentum in 2005 within each of its four business segments Fluid Technology, Defense, Motion & Flow Control and Electronic Components. The company is forecasting full year 2005 earnings per share between US$5.00–5.15. “We’re certainly pleased with the double digit organic revenue and earnings growth we’ve realized so far in 2004, reflecting the strength of our portfolio and the soundness of the ITT management system,” said CEO Steve Loranger. ITT expects the continued growth in 2005 to come from favourable catalysts within the Fluid Technology and Defense segments, the recently acquired space and water businesses and improved margins. “We will enter 2005 with clear goals and objectives in terms of our key strategies of growth, operational excellence and leadership development. We believe we are positioned to grow revenues 6–12% to US$7.2 billion–7.4 billion, continue growing operating margin and cash flow, and anticipate a 2005 EPS of US$5.00–5.15.”
DECEMBER 2004 ISSN 1359-6128 www.worldpumps.com The water/wastewater businesses are expected to lead the gains in Fluid Technology in 2005, with the expanded product range driving revenue growth of 2–7% to US$2.65 billion–2.75 billion for the year. The company expects revenues in the water/wastewater businesses to grow 10%, continuing a recent hike in order activity especially in the Advanced Water Treatment unit. Operating margin is expected to grow 70–120 basis points as the company continues to integrate the recently acquired Wedeco Water Technology business, and through continued focus on operational excellence in the rest of the business. ITT says that increasing capacity utilization and a favourable dollar exchange rate will provide a positive backdrop for the segment’s industrial products group. In Motion & Flow Control, the new product offerings in Leisure Marine, Friction Materials and the tubing business, and gains from operational improvements are expected to continue in 2005. The company anticipates 2005 segment revenues of US$1.05 billion–1.1 billion, representing 0–6% growth over 2004. Loranger reaffirmed ITT’s previous full year 2004 earnings guidance at the top end of the US$4.45–4.50 range, on expected revenues of US$6.65 –6.75 billion, with cash performance consistent with prior guidance.
CONTENTS CALENDAR 12 COMPANY PROFILE 5 COMPANY WATCH 6–9 DIARY 15 DIVIDENDS 12 E-BUSINESS 13 ECONOMIC REVIEW 14 IN BRIEF 10,11,12,13 MARKET PROSPECTS 2–4 MARKET REPORT 13 NEWS 1,16 NPD 14 ORDERS 11 PEOPLE 10 STOCK WATCH 15 ISSN 1359-6128/04 © 2004 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.
NEWS
THOMAS EXPLORES STRATEGIC ALTERNATIVES Thomas Industries Inc parent company of pump manufacturers Rietschle Thomas and Oberdorfer is reviewing strategic and financial alternatives, including the possible sale of the company. The pump and compressor company, which is being advised by Robert W Baird & Co, is also looking at options like acquisitions, stock buybacks and a special cash dividend. Thomas, headquartered in Louisville, Kentucky, designs, manufactures and markets Rietschle Thomas brand pumps and compressors and Oberdorfer bronze and high alloy liquid pumps. Other products include Welch laboratory equipment and automotive component castings. Earlier this year Thomas sold its 32% interest in Genlyte Thomas Group for US$400 million in cash in order to focus solely on growing the pump and compressor business and driving shareholder value (see Pump Industry Analyst, June and September 2004). At the time Thomas said that it would use
about US$100 million of the proceeds to pay off debt and that it would pursue several internal growth initiatives and external acquisition opportunities, as well as consider other uses for the proceeds including the payment of a special dividend and share repurchases. For the first nine months of this year, the company reported net sales of US$309.9 million, a record for the pump and compressor maker, compared with US$277.1 million in 2003. Net income for the nine months was US$110.7 million.
COMMENT After the sale of its interest in Genlyte Thomas Group for US$400 million in cash, Thomas Industries finds itself cash-rich with a number of options open to the company. Having transformed itself in August 2002 with the acquisition of Germany’s Werner Rietschle GmbH + Co KG, Thomas’s next steps will be worth watching. ■
UPBEAT ITT FORECASTS STRONG GROWTH FOR 2005 ITT Industries Inc says that solid growth in its core businesses and improved operating performance in 2004 have set the stage for continued positive momentum in 2005 within each of its four business segments Fluid Technology, Defense, Motion & Flow Control and Electronic Components. The company is forecasting full year 2005 earnings per share between US$5.00–5.15. “We’re certainly pleased with the double digit organic revenue and earnings growth we’ve realized so far in 2004, reflecting the strength of our portfolio and the soundness of the ITT management system,” said CEO Steve Loranger. ITT expects the continued growth in 2005 to come from favourable catalysts within the Fluid Technology and Defense segments, the recently acquired space and water businesses and improved margins. “We will enter 2005 with clear goals and objectives in terms of our key strategies of growth, operational excellence and leadership development. We believe we are positioned to grow revenues 6–12% to US$7.2 billion–7.4 billion, continue growing operating margin and cash flow, and anticipate a 2005 EPS of US$5.00–5.15.”
DECEMBER 2004 ISSN 1359-6128 www.worldpumps.com The water/wastewater businesses are expected to lead the gains in Fluid Technology in 2005, with the expanded product range driving revenue growth of 2–7% to US$2.65 billion–2.75 billion for the year. The company expects revenues in the water/wastewater businesses to grow 10%, continuing a recent hike in order activity especially in the Advanced Water Treatment unit. Operating margin is expected to grow 70–120 basis points as the company continues to integrate the recently acquired Wedeco Water Technology business, and through continued focus on operational excellence in the rest of the business. ITT says that increasing capacity utilization and a favourable dollar exchange rate will provide a positive backdrop for the segment’s industrial products group. In Motion & Flow Control, the new product offerings in Leisure Marine, Friction Materials and the tubing business, and gains from operational improvements are expected to continue in 2005. The company anticipates 2005 segment revenues of US$1.05 billion–1.1 billion, representing 0–6% growth over 2004. Loranger reaffirmed ITT’s previous full year 2004 earnings guidance at the top end of the US$4.45–4.50 range, on expected revenues of US$6.65 –6.75 billion, with cash performance consistent with prior guidance.
CONTENTS CALENDAR 12 COMPANY PROFILE 5 COMPANY WATCH 6–9 DIARY 15 DIVIDENDS 12 E-BUSINESS 13 ECONOMIC REVIEW 14 IN BRIEF 10,11,12,13 MARKET PROSPECTS 2–4 MARKET REPORT 13 NEWS 1,16 NPD 14 ORDERS 11 PEOPLE 10 STOCK WATCH 15 ISSN 1359-6128/04 © 2004 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.