Jacuzzi (NYSE:JJZ)
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From Jun 2019 to Jun 2024
Jacuzzi Brands, Inc. (NYSE: JJZ):
-- Plumbing Products Segment Operating Income Up 32% to $27.4
Million on 27% Rise in Net Sales
-- Bath Products Segment Operating Income Increases 19% to $14.8
Million on 1% Decline in Net Sales
-- Net Debt Declines to $293.2 Million
Jacuzzi Brands, Inc. (NYSE: JJZ), a leading global producer of
branded bath and plumbing products for the residential, commercial and
institutional markets, today announced financial results for the third
quarter ended June 30, 2006. Net sales and operating income for the
third quarter of fiscal 2006 were $332.6 million and $33.6 million,
respectively, compared to $334.2 million and $34.0 million,
respectively, for the third quarter of fiscal 2005. Results for the
third quarter of fiscal 2005 included Rexair net sales and operating
income of $24.7 million and $6.5 million, respectively.
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Operating Income
Net Sales for the for the
Three Months Ended Three Months Ended
-------------------- ---------------------
June 30, June 30, June 30, June 30,
2006 200 5 2006 2005
---------- --------- ---------- ---------
(in millions)
Bath Products $ 210.6 $ 213.3 $ 14.8 $ 12.4
Plumbing Products 122.0 96.2 27.4 20.7
Rexair - 24.7 - 6.5
Corporate & Other - - (8.6) (5.6)
---------- --------- ---------- ---------
$ 332.6 $ 334.2 $ 33.6 $ 34.0
========== ========= ========== =========
*T
The Company incurred a net loss of $1.0 million or $0.01 per share
from continuing operations for the third quarter of fiscal 2006 as a
result of a non-cash charge of $14.4 million associated with the
establishment of a reserve for the deferred tax assets of the U.K.
operations. Earnings per share from continuing operations for the
third quarter of fiscal 2005 of $37.9 million, or $0.50 per share
included a $0.34 per share gain on the sale of Rexair.
The Company recorded the $14.4 million valuation allowance for the
U.K. deferred tax assets due to losses expected to be incurred through
the two year period ended fiscal 2006. The Company expects that the
previously announced U.K. restructuring initiatives and plant
consolidation, which caused a significant portion of these losses,
will return the U.K. operations to profitability in fiscal 2007. A
return to profitability at the U.K. operations would result in a
reversal of this reserve, which would reduce income tax expense in
future periods.
Operating income in the third quarter of fiscal 2006 included $4.5
million of expense related to the Company's retiree benefit
liabilities for several key executives. Approximately $1.0 million of
this amount should have been recorded in the first and second quarters
of fiscal 2006, $2.9 million should have been recorded during the
period beginning with the Company's 1995 spin off from Hanson plc to
fiscal year end 2005, and $0.6 million related to the current quarter.
No single fiscal year was materially misstated. Consequently, the
entire $4.5 million was recorded in the current period as follows:
$2.9 million in corporate expenses; $1.1 million in the Bath Products
segment; and $0.5 million in the Plumbing Products segment.
Adjusted earnings from continuing operations for the third quarter
of 2006 were $0.21 per share versus $0.13 per share in the third
quarter of 2005. In fiscal 2006 the adjustments to arrive at adjusted
earnings from continuing operations included the above mentioned
non-cash write off of deferred tax assets, restructuring and other
charges, as well as the portion of an adjustment for retiree benefits
related to prior periods. The 2005 adjustments to arrive at adjusted
earnings from continuing operations included non-operating asset gains
as well as a tax benefit on an audit settlement, partially offset by
restructuring charges and debt retirement costs (see the table below
for a detailed reconciliation to the adjusted balances and per share
amounts).
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Computation of Adjusted Earnings from Continuing Operations
(in millions, except per share data)
Three Months Ended June 30,
----------------------------------
2006 2005
----------------- ----------------
$ EPS $ EPS
-------- -------- ------- -------
(Loss) Earnings from continuing
operations $ (1.0) $ (0.01) $ 37.9 $ 0.50
Restructuring and other charges,
net of tax 0.7 0.01 0.7 0.01
-------- -------- ------- -------
(0.3) - 38.6 0.51
Adjustment to retirement
benefits, net of tax 2.2 0.03 - -
Net non-operating asset gains,
net of tax - - (25.8) (0.34)
Debt retirement costs, net of
tax - - 1.6 0.02
Non-cash reserve for deferred tax
assets 14.4 0.18
Tax benefit on audit settlement - - (4.4) (0.06)
-------- -------- ------- -------
Adjusted earnings from continuing
operations $ 16.3 $ 0.21 $ 10.0 $ 0.13
======== ======== ======= =======
*T
The Company incurred a net loss for the third quarter of fiscal
2006 of $3.9 million, or $0.05 per share, which included a loss from
discontinued operations totaling $2.9 million, or $0.04 per share. The
losses from discontinued operations included $1.6 million ($0.02 per
share) related to the Company's investment in Spear & Jackson (the
sale of which was consummated on July 28, 2006), and $1.3 million
($0.02 per share) related to adjustments to reserves associated with
Eljer and other operations that were previously sold. The Company
incurred a net loss for the third quarter of fiscal 2005 of $20.8
million, or $0.27 per share, which included a loss from discontinued
operations totaling $58.7 million or $0.77 per share largely related
to the loss on disposal of the Eljer operations in June 2005.
As a result of the sale of the Spear & Jackson investment, the
Company expects to record total income of approximately $4.0 million
in the fourth quarter of fiscal 2006 related to both the operation and
sale of Spear & Jackson.
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Bath Products
Three Months Ended Nine Months Ended
------------------- ------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
-------- -------- -------- ---------
(in millions)
Net Sales $ 210.6 $ 213.3 $ 573.0 $ 585.5
Operating Income $ 14.8 $ 12.4 $ 28.7 $ 23.2
Capital Expenditures $ 2.4 $ 6.1 $ 5.1 $ 14.8
Depreciation & Amortization $ 4.4 $ 3.6 $ 13.0 $ 10.8
*T
Bath segment sales declined 1.3% in the third quarter of fiscal
2006 compared to the same period in fiscal 2005. Improved worldwide
sales of U.K. sink products and spas partially offset declines in
sales of U.K. bath products. Sales of the Company's U.K. sink products
improved over last year largely as a result of increased export sales
to the U.S. Worldwide spa sales increased as a result of improved
pricing, mix, and the continued expansion into European markets, which
offset continued softness in the U.S. spa market.
Operating income increased 19.4% to $14.8 million in the third
quarter of fiscal 2006 from $12.4 million in the third quarter of
fiscal 2005, primarily due to cost controls and other performance
improvement measures at U.S. bath and spa businesses. Price increases
throughout the Bath Products segment mitigated higher raw material
costs, including oil-based and metal commodities.
Operating income in the Bath Products segment included
restructuring and other charges of $1.3 million in the third quarter
of fiscal 2006 and $1.4 million in the third quarter of fiscal 2005.
Restructuring and other charges for the third quarter of 2006 largely
consisted of $0.5 million in accelerated depreciation, reflected in
cost of goods sold, and $0.6 million in severance reflected in
restructuring, related to the previously announced consolidation of
the Bradford, U.K. ceramics plant and other U.K. staffing and overhead
reductions. The Company expects to record $0.6 million in accelerated
depreciation in cost of goods sold and $0.6 million in cash
restructuring charges over the remainder of fiscal 2006 related to the
Bradford ceramics plant consolidation. The Company does not expect to
incur additional costs in relation to the Bradford ceramics plant
consolidation after fiscal 2006. In conjunction with the anticipated
return to profitability, the Company is reviewing a number of
additional U.K. profit improvement opportunities. Fiscal 2005
restructuring charges were mainly associated with staffing reductions
in the U.K., management changes in the domestic bath business and
other overhead reductions.
The Bath Products segment results in the third quarter of fiscal
2006 included $1.1 million of the previously mentioned adjustment to
retirement benefits, of which $1.0 million related to prior years and
the remaining $0.1 million largely related to the first and second
quarters of fiscal 2006. The third quarter of 2005 included costs
related to the opening of the Zhuhai, China Engineering and Sourcing
Center of $0.5 million. Pro forma operating income (excluding
restructuring and other charges mentioned above) increased to $17.2
million in the third quarter of fiscal 2006 from $14.3 million in the
third quarter of fiscal 2005 (see table below for detailed
reconciliation.)
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Three Months Ended Nine Months Ended
------------------- -----------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
---------- -------- -------- --------
Bath Products Segment: (in millions)
Operating Income $ 14.8 $ 12.4 $ 28.7 $ 23.2
Restructuring and Other Charges 1.3 1.4 4.3 3.6
Retirement benefit adjustment 1.1 - 1.0 -
Warranty Benefit - - - (2.2)
China Sourcing Center Start Up
Costs - 0.5 - 1.3
---------- -------- -------- --------
Pro forma Operating Income $ 17.2 $ 14.3 $ 34.0 $ 25.9
========== ======== ======== ========
% of Net Sales, as reported 7.0% 5.8% 5.0% 4.0%
% of Net Sales, pro forma 8.2% 6.7% 5.9% 4.4%
Plumbing Products
Three Months Ended Nine Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
---------- -------- --------- ---------
(in millions)
Net Sales $ 122.0 $ 96.2 $ 315.9 $ 255.1
Operating Income $ 27.4 $ 20.7 $ 65.5 $ 51.2
Capital Expenditures $ 0.6 $ 0.7 $ 3.1 $ 2.9
Depreciation & Amortization $ 1.0 $ 1.2 $ 3.3 $ 3.9
*T
Net sales in the Plumbing Products segment increased 26.8% to
$122.0 million in the third quarter of fiscal 2006 compared to the
same period last year, driven by sales of new products, market
penetration and industry growth. Net sales for PEX products increased
largely due to the continued market conversion from copper products to
PEX. Higher net sales for Wilkins and Commercial Brass products were
primarily a result of increased market penetration, new product
innovation and reputation for outstanding customer service.
Operating income for the third quarter of fiscal 2006 increased by
32.4% to $27.4 million from $20.7 million in the same period last
year. The increase was principally due to strong sales volume. In
addition, price increases initiated in prior periods mitigated the
continued rise of raw material costs, primarily increases in metal and
oil-based commodities.
Corporate Expenses and Other
Corporate expenses increased to $8.6 million in the third quarter
of fiscal 2006 from $5.6 million in the same period last year.
Corporate expenses for the current period included $2.9 million of the
previously discussed retirement benefit adjustment. The current
quarter also included less pension income due to a lower discount rate
and increased pension costs ($0.7 million), largely offset by lower
professional fees principally due to a reduction in Sarbanes-Oxley
compliance costs.
As previously announced, David H. Clarke will retire as Chief
Executive Officer of the Company on August 31, 2006. He will also
retire as Chairman and member of the Board of Directors effective
September 30, 2006. The Company will record approximately $2.0 million
related to his separation agreement in the fourth quarter of fiscal
2006, of which approximately half is accelerated restricted stock
vesting while the remainder is cash charges.
The decrease in interest expense of $1.9 million and increase in
interest income of $0.9 million are the result of lower debt levels
and higher cash and cash equivalents, resulting primarily from the
proceeds generated by the sale of Rexair in June 2005.
Other expense, net in the prior year included debt retirement
costs of $3.2 million, as well as foreign currency transaction losses
of $0.9 million.
The provision for income taxes in the third quarter of fiscal 2006
included the above mentioned $14.4 million increase in valuation
allowance associated with the deferred tax assets of the U.K.
operations. In the third quarter of fiscal 2005, the provision for
income taxes included a $4.4 million tax benefit as a result of a
favorable settlement of a Federal income tax audit. Also no taxes were
recorded on the Rexair gain in the third quarter of 2005 because it
resulted in a capital loss for tax purposes.
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Net Debt
June 30, June 30,
2006 2005
---------- ---------
(in millions)
Notes payable $ 18.6 $ 17.8
Current maturities of long-term debt 1.7 1.5
Long-term debt 381.8 383.5
---------- ---------
Total debt 402.1 402.8
Less:
Cash and cash equivalents 108.9 69.2
Restricted cash collateral accounts - 12.4
---------- ---------
Net Debt $ 293.2 $ 321.2
========== =========
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Net debt decreased by $28.0 million from June 30, 2005 primarily
as a result of cash generated by operations in the fourth quarter of
2005.
Free Cash Flow
For the third quarter of fiscal 2006, $14.3 million of positive
free cash flow was generated ($17.3 million of cash generated in
operating activities less cash used in investing activities of $3.0
million). Free cash flow for the first nine months of fiscal 2006 was
a negative $11.6 million (cash flow used in operating activities of
$13.1 million less cash provided by investing activities of $1.5
million) primarily as a result of negative cash flow of $13.9 million
related to discontinued operations. The Company expects to continue to
generate cash during the fourth quarter of fiscal 2006 and should
report positive free cash flow for the entire fiscal year.
Outlook
Al Marini, Chief Operating Officer and newly appointed Chief
Executive Officer of Jacuzzi Brands, stated "We are very pleased with
our third quarter results as both our Bath and Plumbing segments
performed well. Our Bath segment continued to improve its
profitability, while our Plumbing segment continues its outstanding
record of increased sales and profits. We anticipate that we will
continue to see positive results for the balance of fiscal 2006."
While the Company has revised its GAAP-based earnings guidance to
reflect the impact of the valuation allowance related to the U.K.
deferred tax assets from $0.50 to $0.52 per share to $0.31 to $0.34
per share, adjusted earnings from continuing operations as computed in
the table "Estimate of Adjusted Earnings from Continuing Operations"
on page 13 is now expected to increase from $0.44 to $0.46 per share
to $0.48 to $0.51 per share. This guidance does not include any other
expenses that might be incurred in connection with additional measures
that might be undertaken to restructure operations and further reduce
the Company's cost structure. The guidance also assumes product prices
will be able to be adjusted to offset any raw material price
increases.
Conference Call
The Company will host a conference call on August 10, 2006 at
11:00 am (Eastern Daylight Time) to review the operating results. The
dial-in number is (630) 395-0023. The pass code to participate is
"2835156" and the leader's name is David Clarke. A replay of the call
will be available through September 9, 2006 by calling (402) 220-3015.
The call will be webcast by Thomson StreetEvents Network. Individual
investors can listen to the call at www.earnings.com and institutional
investors can access the call via Thomson StreetEvents,
www.streetevents.com, a password-protected event management site,
through September 9, 2006.
Jacuzzi Brands, Inc., through its subsidiaries, is a global
manufacturer and distributor of branded bath and plumbing products for
the residential, commercial and institutional markets. These include
whirlpool baths, spas, showers, sanitary ware and bathtubs, as well as
professional grade drainage, water control, commercial faucets and
other plumbing products. Our products are marketed under our portfolio
of brand names, including JACUZZI(R), SUNDANCE(R), ZURN(R) and
ASTRACAST(R). Learn more at www.jacuzzibrands.com.
Jacuzzi Brands, Inc. operates on a 52- or 53-week fiscal year
ending on the Saturday nearest to September 30. The periods presented
in this press release ended the Saturday nearest June 30 or September
30 of the respective year, but are presented as of June 30 or
September 30 for convenience.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including the Company's current expectations with respect to future
market conditions, future operating results and other plans. Words
such as "expects," "intends," "anticipates," "plans," "projects,"
"probably," "believes," "estimates," "may," "will," "should," "shall,"
and similar expressions typically identify such forward-looking
statements. Even though the Company believes the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, it can give no assurance that its expectations will be
attained. In particular, various economic and competitive factors,
including those outside our control, such as interest rates, foreign
currency exchange rates, inflation rates, instability in domestic and
foreign financial markets, acts of war, terrorist acts, outbreaks of
new diseases, consumer spending patterns, energy costs and
availability, freight costs, availability of consumer and commercial
credit, adverse weather, levels of residential and commercial
construction, changes in raw material and component costs, and the
credit worthiness of our customers, insurers, and investees, and other
factors contained in the Company's filings with the Securities and
Exchange Commission could cause our actual results in fiscal 2006 and
in future years to differ materially from those expressed in this
press release.
Jacuzzi Brands, Inc. prepares its financial statements in
accordance with accounting principles generally accepted in the United
States (GAAP). Adjusted earnings from continuing operations, pro forma
operating income for the Bath Products segment, net debt and free cash
flow are non-GAAP financial measures, which exclude certain charges
and have material limitations. Items excluded from earnings from
continuing operations to arrive at adjusted earnings from continuing
operations (both historical and estimated) include restructuring and
other charges, net of tax, non-cash reserve for deferred tax assets
and the other items set forth in the reconciliations attached to this
release. Pro forma operating income for the Bath Products segment
excludes restructuring and other items set forth in the reconciliation
included in this release. Net debt excludes cash, cash equivalents and
restricted cash collateral accounts from total debt. Free cash flow
includes net cash provided by operations less capital spending, net of
asset sales. Adjusted earnings from continuing operations and related
per share information, pro forma operating income for the Bath
Products segment, net debt and free cash flow, are key measures used
by management to evaluate its operations. Management does not consider
the items excluded from the non-GAAP measures of operating performance
to be normal operating costs and therefore, excludes them from the
evaluation of the Company's operating performance. Adjusted earnings
from continuing operations, pro forma operating income for the Bath
Products segment, net debt and free cash flow have material
limitations, and should not be considered measures of financial
condition or performance in isolation or as an alternative to earnings
from continuing operations, operating income, cash flow from
operations, net earnings, earnings per share from continuing
operations or total debt as reported in accordance with GAAP, and as
presented, may not be comparable to similarly titled measures of other
companies. Items excluded from earnings from continuing operations,
operating income, cash flow from operations, earnings per share from
continuing operations or total debt are significant components in
understanding and assessing financial performance.
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Jacuzzi Brands, Inc.
Condensed Consolidated Statements of Earnings
(in millions, except per share data)
(Unaudited)
Three Months Nine Months
Ended Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
-------- -------- -------- --------
Net sales $ 332.6 $ 334.2 $ 888.9 $ 916.7
Operating costs and expenses:
Cost of products sold (1) 225.6 223.5 608.9 621.2
Selling, general and
administrative expenses 72.7 75.3 200.4 214.6
Restructuring charges 0.7 1.4 3.3 3.6
-------- -------- -------- --------
Operating income 33.6 34.0 76.3 77.3
Interest expense (10.5) (12.4) (31.5) (36.9)
Interest income 1.2 0.3 3.8 1.5
Gain on sale of business - 25.8 - 25.8
Rexair equity earnings 0.8 - 2.5 -
Other (expense) income, net (0.7) (5.9) 8.4 (5.9)
-------- -------- -------- --------
Earnings before income taxes 24.4 41.8 59.5 61.8
Provision for income taxes (25.4) (3.9) (41.3) (8.7)
-------- -------- -------- --------
(Loss) Earnings from continuing
operations (1.0) 37.9 18.2 53.1
-------- -------- -------- --------
Loss from discontinued operations,
net of tax benefit of $1.5 and
$2.4 in the three and nine months
ended 2005, respectively (1.6) (2.7) (3.8) (4.7)
Loss from disposal of discontinued
operations, net of tax benefit of
$0.4, $1.0, $1.8, and $1.2,
respectively (1.3) (56.0) (3.5) (56.3)
-------- -------- -------- --------
Net (loss) earnings $ (3.9) $ (20.8) $ 10.9 $ (7.9)
======== ======== ======== ========
Basic (loss) earnings per share:
Continuing operations $ (0.01) $ 0.50 $ 0.24 $ 0.70
Discontinued operations (0.04) (0.78) (0.10) (0.81)
-------- -------- -------- --------
$ (0.05) $ (0.28) $ 0.14 $ (0.11)
======== ======== ======== ========
Diluted (loss) earnings per
share:
Continuing operations $ (0.01) $ 0.50 $ 0.24 $ 0.69
Discontinued operations (0.04) (0.77) (0.10) (0.79)
-------- -------- -------- --------
$ (0.05) $ (0.27) $ 0.14 $ (0.10)
======== ======== ======== ========
(1) The three and nine months ended June 30, 2006 includes
inventory write-downs and accelerated depreciation of $0.6 million
and $1.2 million, respectively, associated with the consolidation
of the Bradford, U.K. plant.
Jacuzzi Brands, Inc.
Condensed Consolidated Balance Sheets
(in millions)
June 30, September 30,
2006 2005
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 108.9 $ 110.2
Trade receivables, net 219.3 200.5
Inventories 191.2 165.0
Deferred income taxes 28.6 27.9
Assets held for sale 69.4 69.7
Other current assets 23.4 22.6
------------- -------------
Total current assets 640.8 595.9
Restricted cash collateral accounts - 12.4
Property, plant and equipment, net 99.0 103.7
Goodwill 230.7 228.2
Insurance for asbestos claims 153.0 153.0
Pension assets 149.8 147.8
Other non-current assets 49.5 48.5
------------- -------------
TOTAL ASSETS $ 1,322.8 $ 1,289.5
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 18.6 $ 22.0
Current maturities of long-term debt 1.7 1.5
Trade accounts payable 109.9 105.7
Income taxes payable 34.6 24.7
Liabilities associated with assets held
for sale 71.1 66.9
Accrued expenses and other current
liabilities 104.8 114.4
------------- -------------
Total current liabilities 340.7 335.2
Long-term debt 381.8 383.5
Deferred income taxes 17.6 5.6
Asbestos claims 153.0 153.0
Other non-current liabilities 120.8 127.0
------------- -------------
Total liabilities 1,013.9 1,004.3
Commitments and contingencies
Stockholders' equity 308.9 285.2
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,322.8 $ 1,289.5
============= =============
Jacuzzi Brands, Inc.
Supplemental Segment Information
(in millions)
Consol-
Bath Plumbing Corporate idated
Products Products Rexair and Other Total
--------- --------- -------- ---------- ---------
Net Sales
Third Quarter 2006 $ 210.6 $ 122.0 $ - $ - $ 332.6
2005 213.3 96.2 24.7 - 334.2
Year to Date 2006 $ 573.0 $ 315.9 $ - $ - $ 888.9
2005 585.5 255.1 76.1 - 916.7
----------------------------------------------------------------------
Total Operating Income (Loss)
Third Quarter 2006 $ 14.8 $ 27.4 $ - $ (8.6) $ 33.6
2005 12.4 20.7 6.5 (5.6) 34.0
Year to Date 2006 $ 28.7 $ 65.5 $ - $ (17.9) $ 76.3
2005 23.2 51.2 19.0 (16.1) 77.3
----------------------------------------------------------------------
Capital Expenditures
Third Quarter 2006 $ 2.4 $ 0.6 $ - $ - $ 3.0
2005 6.1 0.7 0.2 0.1 7.1
Year to Date 2006 $ 5.1 $ 3.1 $ - $ - $ 8.2
2005 14.8 2.9 0.4 0.3 18.4
----------------------------------------------------------------------
Depreciation and Amortization
Third Quarter 2006 $ 4.4 $ 1.0 $ - $ 0.5 $ 5.9
2005 3.6 1.2 0.7 0.7 6.2
Year to Date 2006 $ 13.0 $ 3.3 $ - $ 1.4 $ 17.7
2005 10.8 3.9 2.3 2.6 19.6
----------------------------------------------------------------------
Restructuring and Other Charges Included In Operating Income (Loss)(1)
Third Quarter 2006 $ 1.3 $ - $ - $ - $ 1.3
2005 1.4 - - - 1.4
Year to Date 2006 $ 4.3 $ - $ - $ 0.2 4.5
2005 3.6 - - - 3.6
----------------------------------------------------------------------
(1) The third quarter and year to date periods of fiscal 2006
includes $0.6 million and $1.2 million, respectively, of inventory
write-downs and accelerated depreciation included in cost of goods
sold associated with the Bradford, U.K. consolidation.
Jacuzzi Brands, Inc.
Computation of Adjusted Earnings from Continuing Operations
(in millions, except per share data)
Nine Months Ended June 30,
------------------------------
2006 2005
-------------- ---------------
$ EPS $ EPS
------ ------- ------- -------
Earnings from continuing operations $18.2 $ 0.24 $ 53.1 $ 0.69
Restructuring and other charges,
net of tax 2.5 0.03 2.0 0.03
------ ------- ------- -------
20.7 0.27 55.1 0.72
Adjustment to retirement benefits,
net of tax 1.6 0.02 - -
Gain from ruling on environmental
site, net of tax (1.9) (0.02) - -
Foreign currency loss, net of tax 0.9 0.01 - -
Gain from the settlement of a
property tax liability, net of tax (1.2) (0.02) - -
Net non-operating asset gains, net
of tax (5.1) (0.07) (26.4) (0.34)
Non-cash reserve for deferred tax
assets 14.4 0.19 - -
Debt retirement costs, net of tax - - 1.8 0.02
Tax benefit on audit settlement - - (7.3) (0.10)
------ ------- ------- -------
Adjusted earnings from continuing
operations $29.4 $ 0.38 $ 23.2 $ 0.30
====== ======= ======= =======
(1) Earnings from continuing operations include Rexair equity
earnings of $0.02 per share in the nine months ended June 30,
2006. Earnings from continuing operations also include additional
interest income and reduced interest expense attributable to funds
received from the Rexair sale estimated to be $0.05 per share for
the nine months ended June 30, 2006. Earnings from continuing
operations for the nine months ended June 30, 2005 includes Rexair
operating income, net of tax of $0.14 per share.
Estimate of Adjusted Earnings from Continuing Operations
Twelve Months Ended
-------------------
September 30, 2006
-------------------
EPS Range
Expected earnings from continuing operations $ 0.31 $ 0.34
Restructuring and other charges, net of tax 0.04 0.04
-------- --------
0.35 0.38
Adjustment to retirement benefits, net of tax 0.02 0.02
Gain from ruling on environmental site, net of
tax (0.02) (0.02)
Foreign currency loss, net of tax 0.01 0.01
Non-cash reserve for deferred tax assets 0.19 0.19
Gain from the settlement of a property tax
liability, net of tax (0.02) (0.02)
CEO separation agreement, net of tax 0.02 0.02
Recognition of deferred profit on the sale of
real estate, net of tax (0.07) (0.07)
-------- --------
Adjusted earnings from continuing operations $ 0.48 $ 0.51
======== ========
*T