Watts Water Technologies Q2 2024 10-Q Filing

Ticker: WTS · Form: 10-Q · Filed: Aug 8, 2024 · CIK: 795403

Sentiment: neutral

Topics: 10-Q, credit-facility, financials

TL;DR

Watts Water Q2 10-Q: $2.74B sales, amended credit facility on July 12th.

AI Summary

Watts Water Technologies, Inc. filed its 10-Q for the period ending June 30, 2024. The company reported net sales of $2.74 billion for the trailing twelve months. A significant subsequent event noted was the amendment of their revolving credit facility on July 12, 2024, which impacts their financial flexibility.

Why It Matters

This filing provides investors with an update on Watts Water Technologies' financial performance and any material changes to their credit facilities, impacting their operational and investment capacity.

Risk Assessment

Risk Level: medium — The filing details financial performance and credit facility amendments, which are crucial for assessing the company's financial health and future borrowing capabilities.

Key Numbers

Key Players & Entities

FAQ

What were the net sales for the trailing twelve months ending June 30, 2024?

The net sales for the trailing twelve months ending June 30, 2024, were $2.74 billion.

When was the company's revolving credit facility amended?

The company's revolving credit facility was amended on July 12, 2024.

What is the company's fiscal year end?

The company's fiscal year ends on December 31.

What is the company's primary SIC code?

The company's primary SIC code is 3490, Miscellaneous Fabricated Metal Products.

What is the filing date of this 10-Q report?

This 10-Q report was filed on August 8, 2024.

Filing Stats: 4,582 words · 18 min read · ~15 pages · Grade level 6.6 · Accepted 2024-08-08 10:05:28

Key Financial Figures

Filing Documents

Financial Information

Part I. Financial Information 3 Item 1.

Financial Statements

Financial Statements 3 Consolidated Balance Sheets at June 30, 2024 and December 31, 2023 (unaudited) 3 Consolidated Statements of Operations for the Second Quarters and Six Months ended June 30, 2024 and June 25, 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income for the Second Quarters and Six Months ended June 30, 2024 and June 25, 2023 (unaudited) 5 Consolidated Statements of Stockholders' Equity for the Second Quarters and Six Months ended June 30, 2024 and June 25, 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the Six Months ended June 30, 2024 and June 25, 2023 (unaudited) 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 35 Item 4.

Controls and Procedures

Controls and Procedures 36

Other Information

Part II. Other Information 37 Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A.

Risk Factors

Risk Factors 37 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38 Item 5. Other Information 39 Item 6. Exhibits 40

Signatures

Signatures 41 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in millions, except share information) (Unaudited) June 30, December 31, 2024 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 279.4 $ 350.1 Trade accounts receivable, less reserve allowances of $ 13.4 million at June 30, 2024 and $ 11.9 million at December 31, 2023 310.6 259.8 Inventories, net: Raw materials 155.6 150.6 Work in process 21.1 20.2 Finished goods 249.7 228.5 Total Inventories 426.4 399.3 Prepaid expenses and other current assets 44.6 51.8 Total Current Assets 1,061.0 1,061.0 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, at cost 683.6 677.2 Accumulated depreciation ( 429.4 ) ( 429.0 ) Property, plant and equipment, net 254.2 248.2 OTHER ASSETS: Goodwill 719.6 693.0 Intangible assets, net 245.7 216.1 Deferred income taxes 28.0 23.6 Other, net 74.8 67.5 TOTAL ASSETS $ 2,383.3 $ 2,309.4 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 163.2 $ 131.8 Accrued expenses and other liabilities 198.0 190.3 Accrued compensation and benefits 63.4 83.7 Total Current Liabilities 424.6 405.8 LONG-TERM DEBT 258.7 298.3 DEFERRED INCOME TAXES 12.8 13.5 OTHER NONCURRENT LIABILITIES 69.0 78.5 STOCKHOLDERS' EQUITY: Preferred Stock, $ 0.10 par value; 5,000,000 shares authorized; no shares issued or outstanding — — Class A common stock, $ 0.10 par value; 120,000,000 shares authorized; 1 vote per share; issued and outstanding , 27,404,090 shares at June 30, 2024 and 27,352,701 shares at December 31, 2023 2.7 2.7 Class B common stock, $ 0.10 par value; 25,000,000 shares authorized; 10 votes per share; issued and outstanding , 5,953,290 shares at June 30, 2024 and 5,958,290 shares at December 31, 2023 0.6 0.6 Additional paid-in capital 686.6 674.3 Ret

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included in the Watts Water Technologies, Inc. (the "Company") Consolidated Balance Sheet as of June 30, 2024, the Consolidated Statements of Operations for the second quarters and six months ended June 30, 2024 and June 25, 2023, the Consolidated Statements of Comprehensive Income for the second quarters and six months ended June 30, 2024 and June 25, 2023, the Consolidated Statements of Stockholders' Equity for the second quarters and six months ended June 30, 2024 and June 25, 2023, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and June 25, 2023. The consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date. The accounting policies followed by the Company are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The financial statements included in this report should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2023. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2024. The Company operates on a 52 -week fiscal year ending on December 31, with each quarter

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