NVent Electric : Quarterly Earnings Document

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

• QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2021

OR

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-38265

nVent Electric plc

(Exact name of Registrant as specified in its charter)

Ireland	98-1391970
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification number)

The Mille, 1000 Great West Road, 8th Floor (East), London, TW8 9DW, United Kingdom

(Address of principal executive offices)

Registrant's telephone number, including area code: 44-20-3966-0279

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Ordinary Shares, nominal value $0.01 per share	NVT	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer	☐	Non-	☐ Smaller reporting	☐ Emerging growth ☐
			accelerated filer	company	company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On June 30, 2021, 168,107,127 shares of Registrant's common stock were outstanding.

Table of Contents
	nVent Electric plc
		Page
PART I FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Income and Comprehensive Income	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Changes in Equity	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	33
ITEM 4.	Controls and Procedures	33
PART II OTHER INFORMATION
ITEM 1.	Legal Proceedings	34
ITEM 1A.	Risk Factors	34
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
ITEM 6.	Exhibits	35
	Signatures	36

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	PART I FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
		nVent Electric plc
	Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)
			Three months ended			Six months ended
In millions, except per-share data		June 30,		June 30,			June 30,		June 30,
	2021		2020			2021		2020
Net sales		$	601.3	$	447.2	$	1,150.2	$	968.1
Cost of goods sold		366.1		286.9			706.0		612.5
Gross profit			235.2		160.3			444.2		355.6
Selling, general and administrative		135.2		104.3			252.4		227.4
Research and development		11.7		10.7			23.1		22.6
Operating income			88.3		45.3			168.7		105.6
Net interest expense		8.1		9.4			16.2		19.3
Other expense			0.6		0.7			1.2		1.5
Income before income taxes		79.6		35.2			151.3		84.8
Provision for income taxes		13.4		9.4			19.7		40.4
Net income		$	66.2	$	25.8	$	131.6	$	44.4
Comprehensive income, net of tax
Net income		$	66.2	$	25.8	$	131.6	$	44.4
Changes in cumulative translation adjustment		3.8		6.6			6.8		(16.9)
Changes in market value of derivative financial		(10.3)		(4.8)			9.0		12.2
instruments, net of tax
Comprehensive income	$	59.7	$	27.6	$	147.4	$	39.7
Earnings per ordinary share
Basic		$	0.39	$	0.15	$	0.78	$	0.26
Diluted		$	0.39	$	0.15	$	0.78	$	0.26
Weighted average ordinary shares outstanding
Basic			167.9		169.9			167.8		169.9
Diluted			169.6		170.4			169.2		170.7
Cash dividends paid per ordinary share	$	0.175	$	0.175	$	0.35	$	0.35

See accompanying notes to condensed consolidated financial statements.

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nVent Electric plc

Condensed Consolidated Balance Sheets (Unaudited)

In millions, except per-share data		June 30,		December 31,
	2021		2020
Assets
Current assets
Cash and cash equivalents	$	101.8	$	122.5
Accounts and notes receivable, net of allowances of $5.8 and $6.2, respectively		409.3		313.8
Inventories		275.4		235.2
Other current assets		116.0		92.9
Total current assets		902.5		764.4
Property, plant and equipment, net		291.6		289.4
Other assets
Goodwill		2,193.3		2,098.2
Intangibles, net		1,179.0		1,105.5
Other non-current assets		143.4		108.6
Total other assets		3,515.7		3,312.3
Total assets	$	4,709.8	$	4,366.1
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	20.0	$	20.0
Accounts payable		219.1		171.1
Employee compensation and benefits		95.3		70.4
Other current liabilities		201.4		188.5
Total current liabilities		535.8		450.0
Other liabilities
Long-term debt		1,083.9		928.0
Pension and other post-retirement compensation and benefits		231.8		237.9
Deferred tax liabilities		231.3		230.1
Other non-current liabilities		134.2		110.3
Total liabilities		2,217.0		1,956.3
Equity
Ordinary shares $0.01 par value, 400.0 authorized, 168.1 and 168.2 issued at June 30, 2021 and		1.7		1.7
December 31, 2020, respectively
Additional paid-in capital		2,478.2		2,482.6
Retained earnings		92.3		20.7
Accumulated other comprehensive loss		(79.4)		(95.2)
Total equity		2,492.8		2,409.8
Total liabilities and equity	$	4,709.8	$	4,366.1

See accompanying notes to condensed consolidated financial statements.

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nVent Electric plc

Condensed Consolidated Statements of Cash Flows (Unaudited)

		Six months ended
In millions		June 30,		June 30,
	2021		2020
Operating activities
Net income	$	131.6	$	44.4
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Depreciation		20.0		19.0
Amortization		31.9		32.0
Deferred income taxes		(0.9)		26.2
Share-based compensation		6.2		6.1
Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable		(69.2)		31.9
Inventories		(20.5)		(2.9)
Other current assets		(21.2)		10.0
Accounts payable		33.1		(49.3)
Employee compensation and benefits		23.5		(9.4)
Other current liabilities		6.7		(16.5)
Other non-current assets and liabilities		2.1		(1.0)
Net cash provided by (used for) operating activities		143.3		90.5
Investing activities
Capital expenditures		(17.9)		(17.2)
Proceeds from sale of property and equipment		0.1		1.4
Acquisitions, net of cash acquired		(232.6)		(27.0)
Net cash provided by (used for) investing activities		(250.4)		(42.8)
Financing activities
Net receipts of revolving long-term debt		165.4		150.0
Repayments of long-term debt		(10.0)		(7.5)
Dividends paid		(58.8)		(59.5)
Shares issued to employees, net of shares withheld		9.5		2.7
Repurchases of ordinary shares		(20.0)		(3.2)
Net cash provided by (used for) financing activities		86.1		82.5
Effect of exchange rate changes on cash and cash equivalents		0.3		(1.6)
Change in cash and cash equivalents		(20.7)		128.6
Cash and cash equivalents, beginning of period		122.5		106.4
Cash and cash equivalents, end of period	$	101.8	$	235.0

See accompanying notes to condensed consolidated financial statements.

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