Jacuzzi (NYSE:JJZ)
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From May 2019 to May 2024
Jacuzzi Brands, Inc. (NYSE: JJZ), a leading global producer of
branded bath and plumbing products for the residential, commercial and
institutional markets, today reaffirmed its 2007 guidance and announced
selected preliminary financial results for the fiscal 2007 first quarter
ended December 30, 2006.
Net sales for the first quarter of fiscal 2007 are estimated to be
approximately $272 million compared to $267.1 million in the first
quarter of fiscal 2006. Operating income is estimated to be $18 million
compared to $21.1 million for the same period one year ago. Net income
from continuing operations for the first quarter of fiscal 2007 is
estimated to be $0.06 per diluted share which included $0.02 per share
of net charges for merger and other costs described below. This compares
to net income from continuing operations of $0.16 per diluted share in
the first quarter of fiscal 2006 which included $0.08 per share of net
gains for items described below.
The increase in estimated sales was the result of increased sales at the
Plumbing Products segment (“Zurn”)
of approximately 12% partially offset by a 4% decrease sales in Bath
Products. Zurn’s sales growth was driven by
improved sales of existing products, including PEX products,
specification drains, commercial brass, and Wilkins™
brand products, as well as higher sales of new products. Increased sales
at Zurn also reflected price increases that partially offset higher raw
materials costs. Bath Products sales declined due to weak demand for
U.S. whirlpool baths and spas in a challenging domestic operating
environment characterized by ongoing sluggishness in both new
residential housing sales and the remodeling market. U.S. whirlpool bath
sales were also adversely affected by destocking programs implemented by
several major customers in response to current market conditions.
The decline in estimated operating income was primarily due to an
approximately 40% drop in income in the Bath segment due to operating
losses at the U.S. whirlpool bath operations. The operating losses at
the U.S. whirlpool bath operations resulted from the decline in sales
noted above and unfavorable manufacturing absorption variances generated
from the resulting decline in production. Zurn’s
operating income increased 3% over the prior period. While operating
income at Zurn increased in dollars, operating margin for the first
quarter of fiscal 2007 declined from the same period last year due
primarily to the inability to recover higher copper prices. Corporate
expenses in the first quarter of fiscal 2007 included $1.2 million of
additional pension income versus the prior year period.
Estimated net earnings from continuing operations in first quarter of
fiscal 2007 included restructuring charges of $0.7 million, a $0.6
million gain from the sale of real estate, and merger-related expenses
of $2.3 million which reduced net earnings per share by a total of
approximately $0.02 per share. Net earnings from continuing operations
in first quarter of fiscal 2006 included restructuring charges of $1.6
million, a $1.7 million gain from the settlement of a property tax
liability, and a $9.3 million gain from the recognition of deferred
profit on the sale of real estate which increased earnings per share by
a total of $0.08 per share.
The Company is reaffirming its December forecast of fiscal 2007 earnings
of $0.75 per share from continuing operations. This forecast includes
$0.04 per share of income from the sale of surplus properties. The
Company noted that its first fiscal quarter has historically reflected
its seasonal low point in sales. The Company forecasts that the recent
weakness in the US whirlpool bath operations will be offset by increased
sales in its primary selling season as a result of new product
introductions and improving market conditions, including a pick-up in
the renovation markets. This forecast is a “forward-looking
statement”, and accordingly is subject to the
qualifications noted below. The major assumptions for the forecast
include the successful execution of business strategies to outperform
the residential housing market, which the Company expects to decline but
moderate while the renovation market improves; continued growth in
domestic commercial and institutional construction activity; successful
new product introductions driving sales and profit margins for the Bath
segment, which has experienced increasingly difficult trading
conditions; successful marketing initiatives and dealer enhancements to
increase spa market share, in a significantly declining domestic market,
together with increased penetration of European markets; continued
conversion of copper plumbing to PEX, consistent with recent industry
trends, sufficient to overcome both increased competition and a
declining residential construction market; the return to profitability
of the U.K. operations following a 2-year trend of increasing losses;
product price increases to offset continued overall inflationary cost
pressures on commodities including energy; continued reductions of
corporate overhead costs; and increased non-cash pension income,
primarily due to a higher discount rate.
About Jacuzzi Brands
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®,
SUNDANCE®, ZURN®
and ASTRACAST®.
Learn more at www.jacuzzibrands.com.
Business Risks
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words
such as “expects,” “intends,”
“anticipates,” “plans,”
“projects,” “probably,”
“believes,” “estimates,”
“may,” “will,”
“should,” “shall,”
and similar expressions typically identify such forward-looking
statements. Such forward-looking statements include, but are not limited
to, the Company’s estimated (1) net sales,
operating income, net income from continuing operations and earnings per
share in the first quarter of fiscal 2007; (2) results of the Company’s
operating segments for such quarter and (3) highlighted charges and
other items in such quarter.
Each of these estimates is based on preliminary information about the
first quarter of fiscal 2007. Although the quarter is now completed, the
Company is still in the process of performing its standard financial
reporting closing procedures. Accordingly, as the Company completes its
quarter-end closing processes, actual results could differ from these
preliminary estimates.
Even though the Company believes the expectations reflected in its
forward-looking statements are based on reasonable assumptions, it can
give no assurance that its expectations will be attained. In addition to
the factors noted above, 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 to differ materially
from those expressed in this press release.