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☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Ireland
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98-1391970
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification number)
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(Address of principal executive offices)
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Title of each class
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Trading symbol
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Name of each exchange on which registered
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Ordinary Shares, nominal value $0.01 per share
|
NVT
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New York Stock Exchange
|
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Large accelerated filer
|
☑
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Accelerated filer
|
☐
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Non-accelerated filer
|
☐
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Smaller reporting
company |
☐
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Emerging growth
company |
☐
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Page
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PART I FINANCIAL INFORMATION
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II OTHER INFORMATION
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ITEM 1.
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||
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ITEM 1A.
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ITEM 2.
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ITEM 6.
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Three months ended
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Nine months ended
|
||||||||||
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In millions, except per-share data
|
September 30,
2019 |
September 30,
2018 |
|
September 30,
2019 |
September 30,
2018 |
||||||||
|
Net sales
|
$
|
559.8
|
|
$
|
563.9
|
|
|
$
|
1,637.3
|
|
$
|
1,645.5
|
|
|
Cost of goods sold
|
335.7
|
|
334.8
|
|
|
991.1
|
|
988.1
|
|
||||
|
Gross profit
|
224.1
|
|
229.1
|
|
|
646.2
|
|
657.4
|
|
||||
|
Selling, general and administrative
|
126.2
|
|
124.1
|
|
|
359.4
|
|
399.1
|
|
||||
|
Research and development
|
11.8
|
|
11.3
|
|
|
36.2
|
|
33.7
|
|
||||
|
Operating income
|
86.1
|
|
93.7
|
|
|
250.6
|
|
224.6
|
|
||||
|
Net interest expense
|
11.6
|
|
11.7
|
|
|
34.0
|
|
21.6
|
|
||||
|
Other expense
|
0.9
|
|
0.9
|
|
|
2.8
|
|
7.2
|
|
||||
|
Income before income taxes
|
73.6
|
|
81.1
|
|
|
213.8
|
|
195.8
|
|
||||
|
Provision for income taxes
|
13.7
|
|
12.9
|
|
|
36.6
|
|
32.0
|
|
||||
|
Net income
|
$
|
59.9
|
|
$
|
68.2
|
|
|
$
|
177.2
|
|
$
|
163.8
|
|
|
Comprehensive income, net of tax
|
|
|
|
|
|
||||||||
|
Net income
|
$
|
59.9
|
|
$
|
68.2
|
|
|
$
|
177.2
|
|
$
|
163.8
|
|
|
Changes in cumulative translation adjustment
|
(8.0
|
)
|
4.3
|
|
|
(1.8
|
)
|
(33.2
|
)
|
||||
|
Changes in market value of derivative financial instruments, net of tax
|
2.3
|
|
0.5
|
|
|
8.8
|
|
(1.2
|
)
|
||||
|
Comprehensive income
|
$
|
54.2
|
|
$
|
73.0
|
|
|
$
|
184.2
|
|
$
|
129.4
|
|
|
Earnings per ordinary share
|
|
|
|
|
|
||||||||
|
Basic
|
$
|
0.35
|
|
$
|
0.38
|
|
|
$
|
1.03
|
|
$
|
0.92
|
|
|
Diluted
|
$
|
0.35
|
|
$
|
0.38
|
|
|
$
|
1.02
|
|
$
|
0.90
|
|
|
Weighted average ordinary shares outstanding
|
|
|
|
|
|
||||||||
|
Basic
|
169.1
|
|
179.3
|
|
|
172.3
|
|
178.8
|
|
||||
|
Diluted
|
170.3
|
|
181.5
|
|
|
173.8
|
|
181.1
|
|
||||
|
Cash dividends paid per ordinary share
|
$
|
0.175
|
|
$
|
0.175
|
|
|
$
|
0.525
|
|
$
|
0.175
|
|
|
|
September 30,
2019 |
December 31,
2018 |
||||
|
In millions, except per-share data
|
||||||
|
Assets
|
||||||
|
Current assets
|
|
|
||||
|
Cash and cash equivalents
|
$
|
49.5
|
|
$
|
159.0
|
|
|
Accounts and notes receivable, net of allowances of $6.2 and $6.1, respectively
|
375.0
|
|
340.9
|
|
||
|
Inventories
|
259.1
|
|
228.2
|
|
||
|
Other current assets
|
122.8
|
|
118.4
|
|
||
|
Total current assets
|
806.4
|
|
846.5
|
|
||
|
Property, plant and equipment, net
|
280.3
|
|
264.8
|
|
||
|
Other assets
|
|
|
||||
|
Goodwill
|
2,286.1
|
|
2,234.3
|
|
||
|
Intangibles, net
|
1,174.7
|
|
1,173.3
|
|
||
|
Other non-current assets
|
88.6
|
|
33.8
|
|
||
|
Total other assets
|
3,549.4
|
|
3,441.4
|
|
||
|
Total assets
|
$
|
4,636.1
|
|
$
|
4,552.7
|
|
|
Liabilities and Equity
|
||||||
|
Current liabilities
|
|
|
||||
|
Current maturities of long-term debt and short-term borrowings
|
$
|
16.8
|
|
$
|
12.5
|
|
|
Accounts payable
|
139.6
|
|
186.4
|
|
||
|
Employee compensation and benefits
|
70.0
|
|
75.8
|
|
||
|
Other current liabilities
|
210.9
|
|
187.0
|
|
||
|
Total current liabilities
|
437.3
|
|
461.7
|
|
||
|
Other liabilities
|
|
|
||||
|
Long-term debt
|
1,133.8
|
|
929.2
|
|
||
|
Pension and other post-retirement compensation and benefits
|
175.3
|
|
177.9
|
|
||
|
Deferred tax liabilities
|
232.8
|
|
224.8
|
|
||
|
Other non-current liabilities
|
90.4
|
|
72.0
|
|
||
|
Total liabilities
|
2,069.6
|
|
1,865.6
|
|
||
|
Equity
|
|
|
||||
|
Ordinary shares $0.01 par value, 400.0 authorized, 169.2 and 177.2 issued at September 30, 2019 and December 31, 2018, respectively
|
1.7
|
|
1.8
|
|
||
|
Additional paid-in capital
|
2,494.8
|
|
2,709.7
|
|
||
|
Retained earnings
|
170.8
|
|
83.4
|
|
||
|
Accumulated other comprehensive loss
|
(100.8
|
)
|
(107.8
|
)
|
||
|
Total equity
|
2,566.5
|
|
2,687.1
|
|
||
|
Total liabilities and equity
|
$
|
4,636.1
|
|
$
|
4,552.7
|
|
|
|
Nine months ended
|
|||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
||||
|
Operating activities
|
|
|
||||
|
Net income
|
$
|
177.2
|
|
$
|
163.8
|
|
|
Adjustments to reconcile net income to net cash provided by (used for) operating activities
|
|
|
||||
|
Depreciation
|
26.1
|
|
27.6
|
|
||
|
Amortization
|
45.6
|
|
45.8
|
|
||
|
Deferred income taxes
|
(1.9
|
)
|
(4.3
|
)
|
||
|
Share-based compensation
|
12.4
|
|
9.3
|
|
||
|
Changes in assets and liabilities, net of effects of business acquisitions
|
|
|
||||
|
Accounts and notes receivable
|
(17.2
|
)
|
(21.7
|
)
|
||
|
Inventories
|
(18.4
|
)
|
(18.5
|
)
|
||
|
Other current assets
|
—
|
|
(8.2
|
)
|
||
|
Accounts payable
|
(53.6
|
)
|
(28.1
|
)
|
||
|
Employee compensation and benefits
|
(7.7
|
)
|
4.0
|
|
||
|
Other current liabilities
|
(1.9
|
)
|
30.0
|
|
||
|
Other non-current assets and liabilities
|
(3.1
|
)
|
(17.1
|
)
|
||
|
Net cash provided by (used for) operating activities
|
157.5
|
|
182.6
|
|
||
|
Investing activities
|
|
|
||||
|
Capital expenditures
|
(29.0
|
)
|
(28.5
|
)
|
||
|
Proceeds from sale of property and equipment
|
6.1
|
|
2.3
|
|
||
|
Acquisitions, net of cash acquired
|
(127.8
|
)
|
(2.0
|
)
|
||
|
Net cash provided by (used for) investing activities
|
(150.7
|
)
|
(28.2
|
)
|
||
|
Financing activities
|
|
|
||||
|
Net repayments of short-term borrowings
|
—
|
|
(0.3
|
)
|
||
|
Net receipts of revolving long-term debt
|
216.5
|
|
—
|
|
||
|
Proceeds from long-term debt
|
—
|
|
1,000.0
|
|
||
|
Repayments of long-term debt
|
(9.7
|
)
|
(50.0
|
)
|
||
|
Debt issuance costs
|
—
|
|
(9.9
|
)
|
||
|
Cash provided at separation to former Parent
|
—
|
|
(993.6
|
)
|
||
|
Dividends paid
|
(91.1
|
)
|
(31.4
|
)
|
||
|
Shares issued to employees, net of shares withheld
|
5.3
|
|
10.1
|
|
||
|
Repurchases of ordinary shares
|
(235.7
|
)
|
—
|
|
||
|
Net cash provided by (used for) financing activities
|
(114.7
|
)
|
(75.1
|
)
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
(1.6
|
)
|
(0.2
|
)
|
||
|
Change in cash and cash equivalents
|
(109.5
|
)
|
79.1
|
|
||
|
Cash and cash equivalents, beginning of period
|
159.0
|
|
26.9
|
|
||
|
Cash and cash equivalents, end of period
|
$
|
49.5
|
|
$
|
106.0
|
|
|
In millions
|
Ordinary shares
|
Additional paid-in capital
|
Retained earnings
|
Net Parent investment
|
Accumulated
other
comprehensive loss
|
Total
|
||||||||||||||
|
Number
|
Amount
|
|||||||||||||||||||
|
Balance - December 31, 2018
|
177.2
|
|
$
|
1.8
|
|
$
|
2,709.7
|
|
$
|
83.4
|
|
$
|
—
|
|
$
|
(107.8
|
)
|
$
|
2,687.1
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
56.4
|
|
—
|
|
—
|
|
56.4
|
|
||||||
|
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3.2
|
)
|
(3.2
|
)
|
||||||
|
Dividends declared
|
—
|
|
—
|
|
—
|
|
(30.6
|
)
|
—
|
|
—
|
|
(30.6
|
)
|
||||||
|
Share repurchases
|
(3.0
|
)
|
(0.1
|
)
|
(79.8
|
)
|
—
|
|
—
|
|
—
|
|
(79.9
|
)
|
||||||
|
Exercise of options, net of shares tendered for payment
|
0.3
|
|
—
|
|
3.6
|
|
—
|
|
—
|
|
—
|
|
3.6
|
|
||||||
|
Issuance of restricted shares, net of cancellations
|
0.3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
|
Shares surrendered by employees to pay taxes
|
(0.1
|
)
|
—
|
|
(2.6
|
)
|
—
|
|
—
|
|
—
|
|
(2.6
|
)
|
||||||
|
Share-based compensation
|
—
|
|
—
|
|
4.3
|
|
—
|
|
—
|
|
—
|
|
4.3
|
|
||||||
|
Balance - March 31, 2019
|
174.7
|
|
$
|
1.7
|
|
$
|
2,635.2
|
|
$
|
109.2
|
|
$
|
—
|
|
$
|
(111.0
|
)
|
$
|
2,635.1
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
60.9
|
|
—
|
|
—
|
|
60.9
|
|
||||||
|
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
15.9
|
|
15.9
|
|
||||||
|
Dividends declared
|
—
|
|
—
|
|
—
|
|
(29.6
|
)
|
—
|
|
—
|
|
(29.6
|
)
|
||||||
|
Share repurchases
|
(5.9
|
)
|
—
|
|
(152.8
|
)
|
—
|
|
—
|
|
—
|
|
(152.8
|
)
|
||||||
|
Exercise of options, net of shares tendered for payment
|
0.3
|
|
—
|
|
4.8
|
|
—
|
|
—
|
|
—
|
|
4.8
|
|
||||||
|
Shares surrendered by employees to pay taxes
|
—
|
|
—
|
|
(0.6
|
)
|
—
|
|
—
|
|
—
|
|
(0.6
|
)
|
||||||
|
Share-based compensation
|
—
|
|
—
|
|
4.1
|
|
—
|
|
—
|
|
—
|
|
4.1
|
|
||||||
|
Balance - June 30, 2019
|
169.1
|
|
$
|
1.7
|
|
$
|
2,490.7
|
|
$
|
140.5
|
|
$
|
—
|
|
$
|
(95.1
|
)
|
$
|
2,537.8
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
59.9
|
|
—
|
|
—
|
|
59.9
|
|
||||||
|
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5.7
|
)
|
(5.7
|
)
|
||||||
|
Dividends declared
|
—
|
|
—
|
|
—
|
|
(29.6
|
)
|
—
|
|
—
|
|
(29.6
|
)
|
||||||
|
Exercise of options, net of shares tendered for payment
|
—
|
|
—
|
|
0.3
|
|
—
|
|
—
|
|
—
|
|
0.3
|
|
||||||
|
Issuance of restricted shares, net of cancellations
|
0.1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
|
Shares surrendered by employees to pay taxes
|
—
|
|
—
|
|
(0.3
|
)
|
—
|
|
—
|
|
—
|
|
(0.3
|
)
|
||||||
|
Share-based compensation
|
—
|
|
—
|
|
4.1
|
|
—
|
|
—
|
|
—
|
|
4.1
|
|
||||||
|
Balance - September 30, 2019
|
169.2
|
|
$
|
1.7
|
|
$
|
2,494.8
|
|
$
|
170.8
|
|
$
|
—
|
|
$
|
(100.8
|
)
|
$
|
2,566.5
|
|
|
In millions
|
Ordinary shares
|
Additional paid-in capital
|
Retained earnings
|
Net Parent investment
|
Accumulated
other
comprehensive loss
|
Total
|
||||||||||||||
|
Number
|
Amount
|
|||||||||||||||||||
|
Balance - December 31, 2017
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,848.4
|
|
$
|
(57.1
|
)
|
$
|
3,791.3
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
52.3
|
|
—
|
|
52.3
|
|
||||||
|
Cumulative effect of accounting changes
|
—
|
|
—
|
|
—
|
|
—
|
|
(172.7
|
)
|
—
|
|
(172.7
|
)
|
||||||
|
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.6
|
|
1.6
|
|
||||||
|
Net transfers to former Parent
|
—
|
|
—
|
|
—
|
|
—
|
|
(32.3
|
)
|
—
|
|
(32.3
|
)
|
||||||
|
Balance - March 31, 2018
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,695.7
|
|
$
|
(55.5
|
)
|
$
|
3,640.2
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
42.1
|
|
1.2
|
|
—
|
|
43.3
|
|
||||||
|
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(40.8
|
)
|
(40.8
|
)
|
||||||
|
Net transfers from former Parent
|
—
|
|
—
|
|
—
|
|
—
|
|
38.0
|
|
—
|
|
38.0
|
|
||||||
|
Cash provided at separation to former Parent
|
—
|
|
—
|
|
—
|
|
—
|
|
(993.6
|
)
|
—
|
|
(993.6
|
)
|
||||||
|
Reclassification of Net Parent investment to additional paid-in capital
|
—
|
|
—
|
|
2,741.3
|
|
—
|
|
(2,741.3
|
)
|
—
|
|
—
|
|
||||||
|
Issuance of common stock upon separation
|
178.4
|
|
1.8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.8
|
|
||||||
|
Exercise of options, net of shares tendered for payment
|
0.6
|
|
—
|
|
5.5
|
|
—
|
|
—
|
|
—
|
|
5.5
|
|
||||||
|
Shares surrendered by employees to pay taxes
|
—
|
|
—
|
|
(0.5
|
)
|
—
|
|
—
|
|
—
|
|
(0.5
|
)
|
||||||
|
Share-based compensation
|
—
|
|
—
|
|
2.5
|
|
—
|
|
—
|
|
—
|
|
2.5
|
|
||||||
|
Balance - June 30, 2018
|
179.0
|
|
$
|
1.8
|
|
$
|
2,748.8
|
|
$
|
42.1
|
|
$
|
—
|
|
$
|
(96.3
|
)
|
$
|
2,696.4
|
|
|
Net Income
|
—
|
|
—
|
|
—
|
|
68.2
|
|
—
|
|
—
|
|
68.2
|
|
||||||
|
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4.8
|
|
4.8
|
|
||||||
|
Dividends declared
|
—
|
|
—
|
|
—
|
|
(62.8
|
)
|
—
|
|
—
|
|
(62.8
|
)
|
||||||
|
Exercise of options, net of shares tendered for payment
|
0.3
|
|
—
|
|
5.7
|
|
—
|
|
—
|
|
—
|
|
5.7
|
|
||||||
|
Shares surrendered by employees to pay taxes
|
0.1
|
|
—
|
|
(0.6
|
)
|
—
|
|
—
|
|
—
|
|
(0.6
|
)
|
||||||
|
Share-based compensation
|
—
|
|
—
|
|
3.9
|
|
—
|
|
—
|
|
—
|
|
3.9
|
|
||||||
|
Balance - September 30, 2018
|
179.4
|
|
$
|
1.8
|
|
$
|
2,757.8
|
|
$
|
47.5
|
|
$
|
—
|
|
$
|
(91.5
|
)
|
$
|
2,715.6
|
|
|
Condensed Combined Balance Sheets
|
|
|
|
|||||||||
|
In millions
|
Balance at December 31, 2017
|
Adjustments due to ASU 2016-16
|
Adjustments due to ASU 2014-09
|
Balance at January 1, 2018
|
||||||||
|
Assets
|
|
|
|
|
||||||||
|
Accounts and notes receivable, net
|
$
|
349.3
|
|
$
|
—
|
|
$
|
3.8
|
|
$
|
353.1
|
|
|
Inventories
|
224.1
|
|
—
|
|
(1.8
|
)
|
222.3
|
|
||||
|
Other current assets
|
132.3
|
|
—
|
|
1.8
|
|
134.1
|
|
||||
|
Other non-current assets
|
251.8
|
|
(174.5
|
)
|
—
|
|
77.3
|
|
||||
|
Liabilities
|
|
|
|
|
||||||||
|
Other current liabilities
|
141.3
|
|
—
|
|
3.8
|
|
145.1
|
|
||||
|
Deferred tax liabilities
|
279.4
|
|
—
|
|
0.4
|
|
279.8
|
|
||||
|
Equity
|
|
|
|
|
||||||||
|
Net Parent investment
|
3,848.4
|
|
(174.5
|
)
|
1.8
|
|
3,675.7
|
|
||||
|
In millions
|
September 30, 2019
|
December 31, 2018
|
$ Change
|
% Change
|
|||||||
|
Contract assets
|
$
|
65.5
|
|
$
|
74.4
|
|
$
|
(8.9
|
)
|
(12.0
|
)%
|
|
Contract liabilities
|
15.0
|
|
13.2
|
|
1.8
|
|
13.6
|
%
|
|||
|
Net contract assets
|
$
|
50.5
|
|
$
|
61.2
|
|
$
|
(10.7
|
)
|
(17.5
|
)%
|
|
|
Three months ended September 30, 2019
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
U.S. and Canada
|
$
|
183.3
|
|
$
|
90.7
|
|
$
|
107.6
|
|
$
|
381.6
|
|
|
Developed Europe (1)
|
52.0
|
|
32.1
|
|
28.1
|
|
112.2
|
|
||||
|
Developing (2)
|
23.6
|
|
20.3
|
|
10.5
|
|
54.4
|
|
||||
|
Other Developed (3)
|
3.7
|
|
4.5
|
|
3.4
|
|
11.6
|
|
||||
|
Total
|
$
|
262.6
|
|
$
|
147.6
|
|
$
|
149.6
|
|
$
|
559.8
|
|
|
|
Nine months ended September 30, 2019
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
U.S. and Canada
|
$
|
549.8
|
|
$
|
248.0
|
|
$
|
314.6
|
|
$
|
1,112.4
|
|
|
Developed Europe (1)
|
150.4
|
|
97.4
|
|
82.9
|
|
330.7
|
|
||||
|
Developing (2)
|
68.9
|
|
63.2
|
|
30.1
|
|
162.2
|
|
||||
|
Other Developed (3)
|
9.0
|
|
12.9
|
|
10.1
|
|
32.0
|
|
||||
|
Total
|
$
|
778.1
|
|
$
|
421.5
|
|
$
|
437.7
|
|
$
|
1,637.3
|
|
|
|
Three months ended September 30, 2018
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
U.S. and Canada
|
$
|
179.7
|
|
$
|
90.7
|
|
$
|
104.1
|
|
$
|
374.5
|
|
|
Developed Europe (1)
|
50.6
|
|
42.9
|
|
28.5
|
|
122.0
|
|
||||
|
Developing (2)
|
26.0
|
|
20.7
|
|
11.0
|
|
57.7
|
|
||||
|
Other Developed (3)
|
3.2
|
|
3.1
|
|
3.4
|
|
9.7
|
|
||||
|
Total
|
$
|
259.5
|
|
$
|
157.4
|
|
$
|
147.0
|
|
$
|
563.9
|
|
|
|
Nine months ended September 30, 2018
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
U.S. and Canada
|
$
|
530.8
|
|
$
|
248.3
|
|
$
|
300.7
|
|
$
|
1,079.8
|
|
|
Developed Europe (1)
|
152.6
|
|
122.6
|
|
84.2
|
|
359.4
|
|
||||
|
Developing (2)
|
77.0
|
|
60.7
|
|
35.7
|
|
173.4
|
|
||||
|
Other Developed (3)
|
8.8
|
|
12.7
|
|
11.4
|
|
32.9
|
|
||||
|
Total
|
$
|
769.2
|
|
$
|
444.3
|
|
$
|
432.0
|
|
$
|
1,645.5
|
|
|
(1) Developed Europe includes Western Europe and Eastern Europe included in European Union.
|
||||||||||||
|
(2) Developing includes China, Eastern Europe not included in European Union, Latin America, Middle East and Southeast Asia.
|
||||||||||||
|
(3) Other Developed includes Australia and Japan.
|
||||||||||||
|
|
Three months ended September 30, 2019
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
Industrial
|
$
|
157.8
|
|
$
|
55.0
|
|
$
|
30.1
|
|
$
|
242.9
|
|
|
Commercial & Residential
|
29.4
|
|
47.3
|
|
87.2
|
|
163.9
|
|
||||
|
Energy
|
26.5
|
|
42.6
|
|
13.6
|
|
82.7
|
|
||||
|
Infrastructure
|
48.9
|
|
2.7
|
|
18.7
|
|
70.3
|
|
||||
|
Total
|
$
|
262.6
|
|
$
|
147.6
|
|
$
|
149.6
|
|
$
|
559.8
|
|
|
|
Nine months ended September 30, 2019
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
Industrial
|
$
|
467.7
|
|
$
|
165.7
|
|
$
|
86.7
|
|
$
|
720.1
|
|
|
Commercial & Residential
|
78.7
|
|
131.7
|
|
255.0
|
|
465.4
|
|
||||
|
Energy
|
78.6
|
|
117.3
|
|
41.8
|
|
237.7
|
|
||||
|
Infrastructure
|
153.1
|
|
6.8
|
|
54.2
|
|
214.1
|
|
||||
|
Total
|
$
|
778.1
|
|
$
|
421.5
|
|
$
|
437.7
|
|
$
|
1,637.3
|
|
|
|
Three months ended September 30, 2018
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
Industrial
|
$
|
161.1
|
|
$
|
66.9
|
|
$
|
29.3
|
|
$
|
257.3
|
|
|
Commercial & Residential
|
22.8
|
|
45.5
|
|
85.5
|
|
153.8
|
|
||||
|
Energy
|
24.5
|
|
43.7
|
|
13.8
|
|
82.0
|
|
||||
|
Infrastructure
|
51.1
|
|
1.3
|
|
18.4
|
|
70.8
|
|
||||
|
Total
|
$
|
259.5
|
|
$
|
157.4
|
|
$
|
147.0
|
|
$
|
563.9
|
|
|
|
Nine months ended September 30, 2018
|
|||||||||||
|
In millions
|
Enclosures
|
Thermal Management
|
Electrical & Fastening Solutions
|
Total
|
||||||||
|
Industrial
|
$
|
475.2
|
|
$
|
185.1
|
|
$
|
84.5
|
|
$
|
744.8
|
|
|
Commercial & Residential
|
65.0
|
|
135.4
|
|
248.9
|
|
449.3
|
|
||||
|
Energy
|
79.8
|
|
119.8
|
|
39.9
|
|
239.5
|
|
||||
|
Infrastructure
|
149.2
|
|
4.0
|
|
58.7
|
|
211.9
|
|
||||
|
Total
|
$
|
769.2
|
|
$
|
444.3
|
|
$
|
432.0
|
|
$
|
1,645.5
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
|
September 30,
2019 |
September 30,
2018 |
||||||||
|
Severance and related costs
|
$
|
10.9
|
|
$
|
1.3
|
|
|
$
|
14.4
|
|
$
|
6.4
|
|
|
Other
|
0.3
|
|
—
|
|
|
1.5
|
|
—
|
|
||||
|
Total restructuring costs
|
$
|
11.2
|
|
$
|
1.3
|
|
|
$
|
15.9
|
|
$
|
6.4
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
|
September 30,
2019 |
September 30,
2018 |
||||||||
|
Enclosures
|
$
|
1.5
|
|
$
|
—
|
|
|
$
|
1.6
|
|
$
|
1.2
|
|
|
Thermal Management
|
2.8
|
|
0.3
|
|
|
5.6
|
|
3.0
|
|
||||
|
Electrical & Fastening Solutions
|
0.2
|
|
—
|
|
|
1.2
|
|
1.0
|
|
||||
|
Other
|
6.7
|
|
1.0
|
|
|
7.5
|
|
1.2
|
|
||||
|
Total
|
$
|
11.2
|
|
$
|
1.3
|
|
|
$
|
15.9
|
|
$
|
6.4
|
|
|
In millions
|
September 30,
2019 |
||
|
Beginning balance
|
$
|
3.8
|
|
|
Costs incurred
|
14.4
|
|
|
|
Cash payments and other
|
(8.9
|
)
|
|
|
Ending balance
|
$
|
9.3
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
In millions, except per-share data
|
September 30,
2019 |
September 30,
2018 |
|
September 30,
2019 |
September 30,
2018 |
||||||||
|
Net income
|
$
|
59.9
|
|
$
|
68.2
|
|
|
$
|
177.2
|
|
$
|
163.8
|
|
|
Weighted average ordinary shares outstanding
|
|
|
|
|
|
||||||||
|
Basic
|
169.1
|
|
179.3
|
|
|
172.3
|
|
178.8
|
|
||||
|
Dilutive impact of stock options, restricted stock units and performance share units
|
1.2
|
|
2.2
|
|
|
1.5
|
|
2.3
|
|
||||
|
Diluted
|
170.3
|
|
181.5
|
|
|
173.8
|
|
181.1
|
|
||||
|
Earnings per ordinary share
|
|
|
|
|
|
||||||||
|
Basic earnings per ordinary share
|
$
|
0.35
|
|
$
|
0.38
|
|
|
$
|
1.03
|
|
$
|
0.92
|
|
|
Diluted earnings per ordinary share
|
$
|
0.35
|
|
$
|
0.38
|
|
|
$
|
1.02
|
|
$
|
0.90
|
|
|
Anti-dilutive stock options excluded from the calculation of diluted earnings per share
|
2.6
|
|
0.9
|
|
|
2.1
|
|
0.6
|
|
||||
|
In millions
|
December 31,
2018 |
Acquisitions/
divestitures |
Foreign currency
translation/other
|
September 30,
2019 |
||||||||
|
Enclosures
|
$
|
272.0
|
|
$
|
54.2
|
|
$
|
(3.4
|
)
|
$
|
322.8
|
|
|
Thermal Management
|
924.1
|
|
—
|
|
1.0
|
|
925.1
|
|
||||
|
Electrical & Fastening Solutions
|
1,038.2
|
|
—
|
|
—
|
|
1,038.2
|
|
||||
|
Total goodwill
|
$
|
2,234.3
|
|
$
|
54.2
|
|
$
|
(2.4
|
)
|
$
|
2,286.1
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||
|
In millions
|
Cost
|
Accumulated amortization
|
Net
|
|
Cost
|
Accumulated
amortization
|
Net
|
||||||||||||
|
Definite-life intangibles
|
|
|
|
|
|
|
|
||||||||||||
|
Customer relationships
|
$
|
1,196.1
|
|
$
|
(310.5
|
)
|
$
|
885.6
|
|
|
$
|
1,149.7
|
|
$
|
(266.4
|
)
|
$
|
883.3
|
|
|
Proprietary technology and patents
|
14.8
|
|
(7.0
|
)
|
7.8
|
|
|
14.8
|
|
(6.1
|
)
|
8.7
|
|
||||||
|
Total definite-life intangibles
|
1,210.9
|
|
(317.5
|
)
|
893.4
|
|
|
1,164.5
|
|
(272.5
|
)
|
892.0
|
|
||||||
|
Indefinite-life intangibles
|
|
|
|
|
|
|
|
||||||||||||
|
Trade names
|
281.3
|
|
—
|
|
281.3
|
|
|
281.3
|
|
—
|
|
281.3
|
|
||||||
|
Total intangibles
|
$
|
1,492.2
|
|
$
|
(317.5
|
)
|
$
|
1,174.7
|
|
|
$
|
1,445.8
|
|
$
|
(272.5
|
)
|
$
|
1,173.3
|
|
|
|
Q4
|
|
|
|
|
|
||||||||||||
|
In millions
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
||||||||||||
|
Estimated amortization expense
|
$
|
15.8
|
|
$
|
63.1
|
|
$
|
61.9
|
|
$
|
61.8
|
|
$
|
61.6
|
|
$
|
61.0
|
|
|
In millions
|
September 30,
2019 |
December 31,
2018 |
||||
|
Inventories
|
|
|
||||
|
Raw materials and supplies
|
$
|
75.3
|
|
$
|
63.1
|
|
|
Work-in-process
|
28.6
|
|
25.3
|
|
||
|
Finished goods
|
155.2
|
|
139.8
|
|
||
|
Total inventories
|
$
|
259.1
|
|
$
|
228.2
|
|
|
Other current assets
|
|
|
||||
|
Contract assets
|
$
|
65.5
|
|
$
|
74.4
|
|
|
Prepaid expenses
|
39.0
|
|
31.7
|
|
||
|
Prepaid income taxes
|
15.7
|
|
9.1
|
|
||
|
Other current assets
|
2.6
|
|
3.2
|
|
||
|
Total other current assets
|
$
|
122.8
|
|
$
|
118.4
|
|
|
Property, plant and equipment, net
|
|
|
||||
|
Land and land improvements
|
$
|
40.4
|
|
$
|
39.1
|
|
|
Buildings and leasehold improvements
|
178.6
|
|
172.6
|
|
||
|
Machinery and equipment
|
430.1
|
|
410.8
|
|
||
|
Construction in progress
|
18.9
|
|
14.6
|
|
||
|
Total property, plant and equipment
|
668.0
|
|
637.1
|
|
||
|
Accumulated depreciation and amortization
|
387.7
|
|
372.3
|
|
||
|
Total property, plant and equipment, net
|
$
|
280.3
|
|
$
|
264.8
|
|
|
Other non-current assets
|
|
|
||||
|
Deferred compensation plan assets
|
$
|
16.0
|
|
$
|
23.1
|
|
|
Lease right-of-use assets
|
46.5
|
|
—
|
|
||
|
Other non-current assets
|
26.1
|
|
10.7
|
|
||
|
Total other non-current assets
|
$
|
88.6
|
|
$
|
33.8
|
|
|
Other current liabilities
|
|
|
||||
|
Current lease liabilities
|
$
|
15.4
|
|
$
|
—
|
|
|
Dividends payable
|
29.6
|
|
31.0
|
|
||
|
Accrued rebates
|
40.5
|
|
46.1
|
|
||
|
Contract liabilities
|
15.0
|
|
13.2
|
|
||
|
Accrued taxes payable
|
35.4
|
|
27.4
|
|
||
|
Accrued interest
|
19.2
|
|
23.3
|
|
||
|
Other current liabilities
|
55.8
|
|
46.0
|
|
||
|
Total other current liabilities
|
$
|
210.9
|
|
$
|
187.0
|
|
|
Other non-current liabilities
|
|
|
||||
|
Income taxes payable
|
$
|
31.5
|
|
$
|
41.9
|
|
|
Deferred compensation plan liabilities
|
16.0
|
|
23.1
|
|
||
|
Non-current lease liabilities
|
35.3
|
|
—
|
|
||
|
Other non-current liabilities
|
7.6
|
|
7.0
|
|
||
|
Total other non-current liabilities
|
$
|
90.4
|
|
$
|
72.0
|
|
|
•
|
short-term financial instruments (cash and cash equivalents, accounts and notes receivable, accounts and notes payable and variable-rate debt) — recorded amount approximates fair value because of the short maturity period;
|
|
•
|
long-term fixed-rate debt, including current maturities — fair value is based on market quotes available for issuance of debt with similar terms, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance;
|
|
•
|
foreign currency contract agreements — fair values are determined through the use of models that consider various assumptions, including time value, yield curves, as well as other relevant economic measures, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance; and
|
|
•
|
deferred compensation plan assets (mutual funds, common/collective trusts and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees) — fair value of mutual funds and cash equivalents are based on quoted market prices in active markets that are classified as Level 1 in the valuation hierarchy defined by the accounting guidance; fair value of common/collective trusts are based on observable inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance.
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||||||||
|
In millions
|
Recorded
Amount
|
Fair
Value
|
|
Recorded
Amount
|
Fair
Value
|
||||||||
|
Variable rate debt
|
$
|
355.8
|
|
$
|
355.8
|
|
|
$
|
147.5
|
|
$
|
147.5
|
|
|
Fixed rate debt
|
800.0
|
|
861.2
|
|
|
800.0
|
|
793.5
|
|
||||
|
Total debt
|
$
|
1,155.8
|
|
$
|
1,217.0
|
|
|
$
|
947.5
|
|
$
|
941.0
|
|
|
|
September 30, 2019
|
|||||||||||
|
In millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
|
Recurring fair value measurements
|
|
|
|
|
||||||||
|
Foreign currency contract liabilities
|
$
|
—
|
|
$
|
(0.8
|
)
|
$
|
—
|
|
$
|
(0.8
|
)
|
|
Foreign currency contract assets
|
—
|
|
13.0
|
|
—
|
|
13.0
|
|
||||
|
Deferred compensation plan assets
|
11.8
|
|
4.2
|
|
—
|
|
16.0
|
|
||||
|
Total recurring fair value measurements
|
$
|
11.8
|
|
$
|
16.4
|
|
$
|
—
|
|
$
|
28.2
|
|
|
|
December 31, 2018
|
|||||||||||
|
In millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
|
Recurring fair value measurements
|
|
|
|
|
||||||||
|
Foreign currency contract liabilities
|
$
|
—
|
|
$
|
(2.6
|
)
|
$
|
—
|
|
$
|
(2.6
|
)
|
|
Deferred compensation plan assets
|
19.1
|
|
4.0
|
|
—
|
|
23.1
|
|
||||
|
Total recurring fair value measurements
|
$
|
19.1
|
|
$
|
1.4
|
|
$
|
—
|
|
$
|
20.5
|
|
|
In millions
|
Average interest rate as of
September 30, 2019
|
Maturity
Year
|
September 30,
2019 |
December 31,
2018 |
||||
|
Revolving credit facility
|
3.416%
|
2023
|
$
|
216.5
|
|
$
|
—
|
|
|
Senior notes - fixed rate
|
3.950%
|
2023
|
300.0
|
|
300.0
|
|
||
|
Senior notes - fixed rate
|
4.550%
|
2028
|
500.0
|
|
500.0
|
|
||
|
Term loan facility
|
3.432%
|
2023
|
138.8
|
|
147.5
|
|
||
|
Other
|
2.250%
|
2019
|
0.5
|
|
—
|
|
||
|
Unamortized debt issuance costs and discounts
|
N/A
|
N/A
|
(5.2
|
)
|
(5.8
|
)
|
||
|
Total debt
|
|
|
1,150.6
|
|
941.7
|
|
||
|
Less: Current maturities and short-term borrowings
|
|
|
(16.8
|
)
|
(12.5
|
)
|
||
|
Long-term debt
|
|
|
$
|
1,133.8
|
|
$
|
929.2
|
|
|
|
Q4
|
|
|
|
|
|
|
|
||||||||||||||||
|
In millions
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
Total
|
||||||||||||||||
|
Contractual debt obligation maturities
|
$
|
4.3
|
|
$
|
17.5
|
|
$
|
20.0
|
|
$
|
20.0
|
|
$
|
594.0
|
|
$
|
—
|
|
$
|
500.0
|
|
$
|
1,155.8
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
|
September 30,
2019 |
September 30,
2018 |
||||||||
|
Net sales
|
|
|
|
|
|
||||||||
|
Enclosures
|
$
|
262.6
|
|
$
|
259.5
|
|
|
$
|
778.1
|
|
$
|
769.2
|
|
|
Thermal Management
|
147.6
|
|
157.4
|
|
|
421.5
|
|
444.3
|
|
||||
|
Electrical & Fastening Solutions
|
149.6
|
|
147.0
|
|
|
437.7
|
|
432.0
|
|
||||
|
Total
|
$
|
559.8
|
|
$
|
563.9
|
|
|
$
|
1,637.3
|
|
$
|
1,645.5
|
|
|
Segment income (loss)
|
|
|
|
|
|
||||||||
|
Enclosures
|
$
|
47.6
|
|
$
|
47.4
|
|
|
$
|
141.4
|
|
$
|
135.9
|
|
|
Thermal Management
|
38.5
|
|
41.9
|
|
|
98.1
|
|
105.8
|
|
||||
|
Electrical & Fastening Solutions
|
41.3
|
|
38.9
|
|
|
114.1
|
|
111.5
|
|
||||
|
Other
|
(12.8
|
)
|
(13.2
|
)
|
|
(38.0
|
)
|
(37.1
|
)
|
||||
|
Total
|
$
|
114.6
|
|
$
|
115.0
|
|
|
$
|
315.6
|
|
$
|
316.1
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
|
September 30,
2019 |
September 30,
2018 |
||||||||
|
Segment income
|
$
|
114.6
|
|
$
|
115.0
|
|
|
$
|
315.6
|
|
$
|
316.1
|
|
|
Intangible amortization
|
(15.4
|
)
|
(15.2
|
)
|
|
(45.6
|
)
|
(45.8
|
)
|
||||
|
Separation costs
|
—
|
|
(4.8
|
)
|
|
—
|
|
(39.3
|
)
|
||||
|
Acquisition transaction and integration costs
|
(1.9
|
)
|
—
|
|
|
(1.9
|
)
|
—
|
|
||||
|
Net interest expense
|
(11.6
|
)
|
(11.7
|
)
|
|
(34.0
|
)
|
(21.6
|
)
|
||||
|
Restructuring and other
|
(11.2
|
)
|
(1.3
|
)
|
|
(17.5
|
)
|
(6.4
|
)
|
||||
|
Other expense
|
(0.9
|
)
|
(0.9
|
)
|
|
(2.8
|
)
|
(7.2
|
)
|
||||
|
Income before income taxes
|
$
|
73.6
|
|
$
|
81.1
|
|
|
$
|
213.8
|
|
$
|
195.8
|
|
|
|
September 30, 2019
|
|
|
Weighted average remaining lease term
|
|
|
|
Operating leases
|
5 years
|
|
|
Weighted average discount rate
|
|
|
|
Operating leases
|
4.1
|
%
|
|
In millions
|
|
||
|
Remainder of 2019
|
$
|
4.8
|
|
|
2020
|
16.4
|
|
|
|
2021
|
11.0
|
|
|
|
2022
|
7.3
|
|
|
|
2023
|
4.1
|
|
|
|
2024
|
3.3
|
|
|
|
Thereafter
|
10.9
|
|
|
|
Total lease payments
|
57.8
|
|
|
|
Less imputed interest
|
(7.1
|
)
|
|
|
Total reported lease liability
|
$
|
50.7
|
|
|
In millions
|
|
||
|
2019
|
$
|
16.2
|
|
|
2020
|
12.6
|
|
|
|
2021
|
8.0
|
|
|
|
2022
|
5.6
|
|
|
|
2023
|
2.7
|
|
|
|
Thereafter
|
9.6
|
|
|
|
Total
|
$
|
54.7
|
|
|
|
Nine months ended
|
||
|
In millions
|
September 30, 2019
|
||
|
Cash paid for amounts included in the measurement of lease liabilities:
|
$
|
12.9
|
|
|
Lease right-of-use assets obtained in exchange for new lease liabilities:
|
12.8
|
|
|
|
In millions
|
Classification
|
September 30, 2019
|
January 1, 2019
|
||||
|
Assets
|
|
|
|
||||
|
Lease right-of-use assets
|
Other non-current assets
|
$
|
46.5
|
|
$
|
44.2
|
|
|
Liabilities
|
|
|
|
||||
|
Current lease liabilities
|
Other current liabilities
|
$
|
15.4
|
|
$
|
13.6
|
|
|
Non-current lease liabilities
|
Other non-current liabilities
|
35.3
|
|
34.8
|
|
||
|
Total lease liabilities
|
|
$
|
50.7
|
|
$
|
48.4
|
|
|
14.
|
Commitments and Contingencies
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
•
|
Enclosures—The Enclosures segment provides inventive solutions that protect, connect and manage heat in critical electronics, communication, control and power equipment. From metallic and non-metallic enclosures to cabinets, subracks and backplanes, it offers the physical infrastructure to host, connect and protect server and network equipment, as well as indoor and outdoor protection for broadband voice, data and video surveillance applications in industrial, infrastructure, energy and commercial verticals.
|
|
•
|
Thermal Management—The Thermal Management segment provides electric thermal solutions that connect and protect critical buildings, infrastructure, industrial processes and people. Its thermal management systems include heat tracing, floor heating, fire-rated and specialty wiring, sensing and snow melting and de-icing solutions for use in industrial, commercial & residential, energy and infrastructure verticals. Its highly reliable and easy to install solutions lower total cost of ownership to building owners, facility managers, operators and end users.
|
|
•
|
Electrical & Fastening Solutions—The Electrical & Fastening Solutions segment provides fastening solutions that connect and protect electrical and mechanical systems and civil structures. Its engineered electrical and fastening products are used across a wide range of verticals, including commercial, industrial, infrastructure and energy.
|
|
•
|
We have identified specific product and geographic market opportunities that we find attractive and continue to pursue, both within and outside the U.S. We are reinforcing our businesses to more effectively address these opportunities through research and development and additional sales and marketing resources. Unless we successfully penetrate these markets, our organic sales growth will likely be limited or may decline.
|
|
•
|
We have experienced material and other cost inflation. We strive for productivity improvements, and we implement increases in selling prices to help mitigate this inflation. We expect the current economic environment, including the impacts of tariffs, will result in continuing price volatility for many of our raw materials and purchased components, and we are uncertain as to the timing and impact of these market changes.
|
|
•
|
During 2018 and the first nine months of 2019, we continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.
|
|
•
|
Achieving differentiated revenue growth through new products and solutions and market expansion in key developing regions;
|
|
•
|
Driving operating excellence through lean enterprise initiatives, with specific focus on sourcing and supply management, cash flow management and lean operations;
|
|
•
|
Optimizing our technological capabilities to increasingly generate innovative new and connected products and enhance the customer experience; and
|
|
•
|
Focusing on developing global talent in light of our global presence.
|
|
|
Three months ended
|
||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
$
change
|
% / point
change
|
|||||||
|
Net sales
|
$
|
559.8
|
|
$
|
563.9
|
|
$
|
(4.1
|
)
|
(0.7
|
%)
|
|
Cost of goods sold
|
335.7
|
|
334.8
|
|
0.9
|
|
0.3
|
%
|
|||
|
Gross profit
|
224.1
|
|
229.1
|
|
(5.0
|
)
|
(2.2
|
%)
|
|||
|
% of net sales
|
40.0
|
%
|
40.6
|
%
|
|
(0.6
|
pts)
|
||||
|
|
|
|
|
|
|
||||||
|
Selling, general and administrative
|
126.2
|
|
124.1
|
|
2.1
|
|
1.7
|
%
|
|||
|
% of net sales
|
22.5
|
%
|
22.0
|
%
|
|
0.5
|
pts
|
||||
|
Research and development
|
11.8
|
|
11.3
|
|
0.5
|
|
4.4
|
%
|
|||
|
% of net sales
|
2.1
|
%
|
2.0
|
%
|
|
0.1
|
pts
|
||||
|
|
|
|
|
|
|||||||
|
Operating income
|
86.1
|
|
93.7
|
|
(7.6
|
)
|
(8.1
|
%)
|
|||
|
% of net sales
|
15.4
|
%
|
16.6
|
%
|
|
(1.2
|
pts)
|
||||
|
|
|
|
|
|
|||||||
|
Net interest expense
|
11.6
|
|
11.7
|
|
(0.1
|
)
|
N.M.
|
|
|||
|
Other expense
|
0.9
|
|
0.9
|
|
—
|
|
N.M.
|
|
|||
|
|
|
|
|
|
|||||||
|
Income before income taxes
|
73.6
|
|
81.1
|
|
(7.5
|
)
|
(9.2
|
%)
|
|||
|
Provision for income taxes
|
13.7
|
|
12.9
|
|
0.8
|
|
6.2
|
%
|
|||
|
Effective tax rate
|
18.6
|
%
|
15.9
|
%
|
|
2.7
|
pts
|
||||
|
|
Nine months ended
|
||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
$
change |
% / point
change |
|||||||
|
Net sales
|
$
|
1,637.3
|
|
$
|
1,645.5
|
|
$
|
(8.2
|
)
|
(0.5
|
%)
|
|
Cost of goods sold
|
991.1
|
|
988.1
|
|
3.0
|
|
0.3
|
%
|
|||
|
Gross profit
|
646.2
|
|
657.4
|
|
(11.2
|
)
|
(1.7
|
%)
|
|||
|
% of net sales
|
39.5
|
%
|
40.0
|
%
|
|
(0.5
|
pts)
|
||||
|
|
|
|
|
|
|||||||
|
Selling, general and administrative
|
359.4
|
|
399.1
|
|
(39.7
|
)
|
(9.9
|
%)
|
|||
|
% of net sales
|
22.0
|
%
|
24.3
|
%
|
|
(2.3
|
pts)
|
||||
|
Research and development
|
36.2
|
|
33.7
|
|
2.5
|
|
7.4
|
%
|
|||
|
% of net sales
|
2.2
|
%
|
2.0
|
%
|
|
0.2
|
pts
|
||||
|
|
|
|
|
|
|||||||
|
Operating income
|
250.6
|
|
224.6
|
|
26.0
|
|
11.6
|
%
|
|||
|
% of net sales
|
15.3
|
%
|
13.6
|
%
|
|
1.7
|
pts
|
||||
|
|
|
|
|
|
|||||||
|
Net interest expense
|
34.0
|
|
21.6
|
|
12.4
|
|
N.M.
|
|
|||
|
Other expense
|
2.8
|
|
7.2
|
|
(4.4
|
)
|
N.M.
|
|
|||
|
|
|
|
|
|
|||||||
|
Income before income taxes
|
213.8
|
|
195.8
|
|
18.0
|
|
9.2
|
%
|
|||
|
Provision for income taxes
|
36.6
|
|
32.0
|
|
4.6
|
|
14.4
|
%
|
|||
|
Effective tax rate
|
17.1
|
%
|
16.3
|
%
|
|
0.8
|
pts
|
||||
|
|
Three months ended September 30, 2019
|
Nine months ended September 30, 2019
|
||
|
|
over the prior year period
|
over the prior year period
|
||
|
Volume
|
(2.6
|
%)
|
(0.8
|
%)
|
|
Price
|
1.7
|
|
1.8
|
|
|
Organic growth
|
(0.9
|
)
|
1.0
|
|
|
Acquisition
|
1.4
|
|
0.5
|
|
|
Currency
|
(1.2
|
)
|
(2.0
|
)
|
|
Total
|
(0.7
|
%)
|
(0.5
|
%)
|
|
•
|
unfavorable foreign currency effects; and
|
|
•
|
slowdown in capital spending resulting in organic sales decline of approximately 2.5% contributed from our industrial business in the third quarter of 2019 from 2018.
|
|
•
|
organic sales growth contributions of approximately 1.5% from our commercial & residential business in both the third quarter and first nine months of 2019 from 2018, which includes selective increases in selling prices; and
|
|
•
|
sales of $7.7 million in the third quarter of 2019 as a result of the Eldon acquisition.
|
|
•
|
inflationary increases related to certain raw materials, labor and freight costs; and
|
|
•
|
sales volume decline resulting in decreased leverage on fixed expenses in cost of goods sold.
|
|
•
|
selective increases in selling prices to mitigate inflationary cost increases; and
|
|
•
|
savings generated from our lean and supply management practices.
|
|
•
|
restructuring costs of $11.2 million in the third quarter of 2019, compared to $1.3 million in the third quarter of 2018;
|
|
•
|
investment in sales and marketing to drive growth; and
|
|
•
|
inflationary increases impacting our labor costs.
|
|
•
|
savings generated from restructuring and other lean initiatives; and
|
|
•
|
non-recurring separation related costs of $4.8 million incurred in the third quarter of 2018 to prepare nVent to operate as an independent stand-alone public company.
|
|
•
|
non-recurring separation related costs of $39.3 million incurred in the first nine months of 2018 to prepare nVent to operate as an independent stand-alone public company; and
|
|
•
|
savings generated from restructuring and other lean initiatives.
|
|
•
|
restructuring costs of $17.5 million in the first nine months of 2019, compared to $6.4 million in the first nine months of 2018;
|
|
•
|
investment in sales and marketing to drive growth; and
|
|
•
|
inflationary increases impacting our labor costs.
|
|
•
|
the favorable impact of discrete items that occurred during the third quarter and first nine months of 2018 that did not recur in the corresponding periods in 2019.
|
|
|
Three months ended
|
|
|
|
Nine months ended
|
|
|
||||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
|
% / point change
|
|
September 30,
2019 |
September 30,
2018 |
|
% / point change
|
||||||||||
|
Net sales
|
$
|
262.6
|
|
$
|
259.5
|
|
|
1.2
|
%
|
|
$
|
778.1
|
|
$
|
769.2
|
|
|
1.2
|
%
|
|
Segment income
|
47.6
|
|
47.4
|
|
|
0.4
|
%
|
|
141.4
|
|
135.9
|
|
|
4.0
|
%
|
||||
|
% of net sales
|
18.1
|
%
|
18.3
|
%
|
|
(0.2
|
pts)
|
|
18.2
|
%
|
17.7
|
%
|
|
0.5
|
pts
|
||||
|
|
Three months ended September 30, 2019
|
Nine months ended September 30, 2019
|
||
|
|
over the prior year period
|
over the prior year period
|
||
|
Volume
|
(3.0
|
%)
|
—
|
%
|
|
Price
|
2.2
|
|
1.7
|
|
|
Organic growth
|
(0.8
|
)
|
1.7
|
|
|
Acquisition
|
3.0
|
|
1.0
|
|
|
Currency
|
(1.0
|
)
|
(1.5
|
)
|
|
Total
|
1.2
|
%
|
1.2
|
%
|
|
•
|
sales of $7.7 million in the third quarter of 2019 as a result of the Eldon acquisition; and
|
|
•
|
organic sales growth contributions of approximately 1.0% and 1.5% from our commercial & residential business in the third quarter and first nine months of 2019 from 2018, respectively, which includes selective increases in selling prices.
|
|
•
|
slowdown in capital spending resulting in organic sales decline of approximately 2.0% contributed from our industrial business in the third quarter of 2019 from 2018; and
|
|
•
|
unfavorable foreign currency effects.
|
|
|
Three months ended September 30, 2019
|
Nine months ended September 30, 2019
|
||
|
|
over the prior year period
|
over the prior year period
|
||
|
Growth/acquisition
|
(2.6
|
pts)
|
(0.6
|
pts)
|
|
Price
|
1.7
|
|
1.4
|
|
|
Currency
|
0.7
|
|
0.3
|
|
|
Net productivity
|
—
|
|
(0.6
|
)
|
|
Total
|
(0.2
|
pts)
|
0.5
|
pts
|
|
•
|
lower sales volume resulting in decreased leverage on fixed expenses; and
|
|
•
|
inflationary increases related to certain raw materials, labor and freight costs.
|
|
•
|
selective increases in selling prices to mitigate inflationary cost increases;
|
|
•
|
savings generated from restructuring and lean initiatives; and
|
|
•
|
favorable foreign currency effects.
|
|
•
|
selective increases in selling prices to mitigate inflationary cost increases; and
|
|
•
|
savings generated from restructuring and lean initiatives.
|
|
•
|
inflationary increases related to certain raw materials, labor and freight costs.
|
|
|
Three months ended
|
|
|
|
Nine months ended
|
|
|
||||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
|
% / point change
|
|
September 30,
2019 |
September 30,
2018 |
|
% / point change
|
||||||||||
|
Net sales
|
$
|
147.6
|
|
$
|
157.4
|
|
|
(6.2
|
%)
|
|
$
|
421.5
|
|
$
|
444.3
|
|
|
(5.1
|
%)
|
|
Segment income
|
38.5
|
|
41.9
|
|
|
(8.1
|
%)
|
|
98.1
|
|
105.8
|
|
|
(7.3
|
%)
|
||||
|
% of net sales
|
26.1
|
%
|
26.6
|
%
|
|
(0.5
|
pts)
|
|
23.3
|
%
|
23.8
|
%
|
|
(0.5
|
pts)
|
||||
|
|
Three months ended September 30, 2019
|
Nine months ended September 30, 2019
|
||
|
|
over the prior year period
|
over the prior year period
|
||
|
Volume
|
(5.0
|
%)
|
(2.6
|
%)
|
|
Price
|
0.5
|
|
0.5
|
|
|
Organic growth
|
(4.5
|
)
|
(2.1
|
)
|
|
Currency
|
(1.7
|
)
|
(3.0
|
)
|
|
Total
|
(6.2
|
%)
|
(5.1
|
%)
|
|
•
|
slowdown in capital spending resulting in organic sales declines of approximately 7.5% and 3.0% contributed from our industrial business in the third quarter and first nine months of 2019 from 2018, respectively; and
|
|
•
|
unfavorable foreign currency effects.
|
|
•
|
organic sales growth contribution of approximately 2.0% from our commercial & residential business in the third quarter of 2019 from 2018, which includes selective increases in selling prices; and
|
|
•
|
organic sales growth in the after-market repair and maintenance component of our industrial business in the first nine months of 2019 from 2018.
|
|
•
|
lower sales volume resulting in decreased leverage on fixed expenses;
|
|
•
|
inflationary increases related to certain raw materials, labor and freight costs; and
|
|
•
|
impact of unfavorable product mix.
|
|
•
|
savings generated from restructuring and lean initiatives; and
|
|
•
|
selective increases in selling prices to mitigate inflationary cost increases.
|
|
|
Three months ended
|
|
|
|
Nine months ended
|
|
|
||||||||||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
|
% / point change
|
|
September 30,
2019 |
September 30,
2018 |
|
% / point change
|
||||||||||
|
Net sales
|
$
|
149.6
|
|
$
|
147.0
|
|
|
1.8
|
%
|
|
$
|
437.7
|
|
$
|
432.0
|
|
|
1.3
|
%
|
|
Segment income
|
41.3
|
|
38.9
|
|
|
6.2
|
%
|
|
114.1
|
|
111.5
|
|
|
2.3
|
%
|
||||
|
% of net sales
|
27.6
|
%
|
26.5
|
%
|
|
1.1
|
pts
|
|
26.1
|
%
|
25.8
|
%
|
|
0.3
|
pts
|
||||
|
|
Three months ended September 30, 2019
|
Nine months ended September 30, 2019
|
||
|
|
over the prior year period
|
over the prior year period
|
||
|
Volume
|
0.9
|
%
|
(0.4
|
%)
|
|
Price
|
2.0
|
|
3.4
|
|
|
Organic growth
|
2.9
|
|
3.0
|
|
|
Currency
|
(1.1
|
)
|
(1.7
|
)
|
|
Total
|
1.8
|
%
|
1.3
|
%
|
|
•
|
organic sales growth contributions of approximately 1.5% and 2.0% from our commercial & residential business in the third quarter and first nine months of 2019 from 2018, respectively, and approximately 1.0% from our industrial business in both the third quarter and first nine months of 2019 from 2018, which includes selective increases in selling prices.
|
|
•
|
unfavorable foreign currency effects.
|
|
•
|
selective increases in selling prices to mitigate inflationary cost increases;
|
|
•
|
savings generated from our lean and supply management practices; and
|
|
•
|
higher sales volume resulting in increased leverage on fixed expenses.
|
|
•
|
inflationary increases related to certain raw materials, labor and freight costs.
|
|
•
|
selective increases in selling prices to mitigate inflationary cost increases.
|
|
•
|
inflationary increases related to certain raw materials, labor and freight costs.
|
|
|
Nine months ended
|
|||||
|
In millions
|
September 30,
2019 |
September 30,
2018 |
||||
|
Net cash provided by (used for) operating activities
|
$
|
157.5
|
|
$
|
182.6
|
|
|
Capital expenditures
|
(29.0
|
)
|
(28.5
|
)
|
||
|
Proceeds from sale of property and equipment
|
6.1
|
|
2.3
|
|
||
|
Free cash flow
|
$
|
134.6
|
|
$
|
156.4
|
|
|
(a)
|
The purchases in this column include shares repurchased as part of our publicly announced plans and shares deemed surrendered to us by participants in the nVent Electric plc 2018 Omnibus Incentive Plan (the "2018 Plan") and earlier Pentair stock incentive plans that are now outstanding under the 2018 Plan (collectively the "Plans") to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options, vesting of restricted shares and vesting of performance shares.
|
|
(b)
|
The average price paid in this column includes shares repurchased as part of our publicly announced plans and shares deemed surrendered to us by participants in the Plans to satisfy the exercise price of stock options and withholding tax obligations due upon stock option exercises and vesting of restricted and performance shares.
|
|
(c)
|
The number of shares in this column represents the number of shares repurchased as part of our publicly announced plans to repurchase our ordinary shares up to a maximum dollar limit authorized by the Board of Directors, discussed below.
|
|
(d)
|
On July 23, 2018, our Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $500.0 million (the "2018 Authorization"). On February 19, 2019, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $380.0 million (the "2019 Authorization"). The 2018 and 2019 Authorizations expire on July 23, 2021. As of September 30, 2019, we have $588.3 million available for share repurchases under the combined 2018 and 2019 Authorizations.
|
|
|
Form of Key Executive Employment and Severance Agreement for Elizabeth C. Noonan and Sara E. Zawoyski [Incorporated by reference to Exhibit 10.6 to Amendment No. 2 to the Registration Statement on Form 10 of nVent Electric plc filed with the Commission on January 31, 2018 (File No. 001-38265)].
|
|
|
|
|
|
|
|
Separation Agreement and Release, by and between Stacy P. McMahan and nVent Management Company.
|
|
|
|
|
|
|
|
Certification of Chief Executive Officer.
|
|
|
|
|
|
|
|
Certification of Chief Financial Officer.
|
|
|
|
|
|
|
|
Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
101
|
|
The following materials from nVent Electric plc's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 are filed herewith, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated and Combined Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2019 and 2018, (ii) the Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018, (iii) the Condensed Consolidated and Combined Statements of Cash Flows for the nine months ended September 30, 2019 and 2018, (iv) the Condensed Consolidated and Combined Statements of Changes in Equity for the three and nine months ended September 30, 2019 and 2018, and (v) Notes to Condensed Consolidated and Combined Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
|
|
|
|
|
nVent Electric plc
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
By
|
/s/ Stacy P. McMahan
|
|
|
|
Stacy P. McMahan
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
By
|
/s/ Randolph A. Wacker
|
|
|
|
Randolph A. Wacker
|
|
|
|
Senior Vice President and Chief Accounting Officer
|
|
|
Stacy P. McMahan
|
|
Dated: 10/1/19
|
/s/ Stacy P. McMahan
|
|
|
|
|
Dated: 10/2/19
|
nVent Management Company
|
|
|
By /s/ Lynnette Heath
|
|
|
Its CHRO
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of nVent Electric plc;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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October 30, 2019
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/s/ Beth A. Wozniak
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Beth A. Wozniak
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of nVent Electric plc;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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October 30, 2019
|
/s/ Stacy P. McMahan
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Stacy P. McMahan
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Executive Vice President and Chief Financial Officer
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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October 30, 2019
|
/s/ Beth A. Wozniak
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|
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|
Beth A. Wozniak
|
|
|
|
Chief Executive Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
|
October 30, 2019
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/s/ Stacy P. McMahan
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|
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Stacy P. McMahan
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|
|
Executive Vice President and Chief Financial Officer
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