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Watts Water Technologies Inc . (NYSE:WTS), a manufacturer of water solutions with a market capitalization of $6.8 billion and strong revenue growth of 12.4% over the last twelve months, disclosed a restructuring program involving its facility in Hautvillers-Ouville, France. According to InvestingPro data, the company maintains a robust financial position with more cash than debt on its balance sheet. On Monday, the company’s Board of Directors authorized the closure of the foundry operations and the relocation of other manufacturing processes to different European locations.
The restructuring is projected to incur pre-tax charges of approximately $22 million, mainly from severance payments estimated at $18 million. The company appears well-positioned to handle these costs, with InvestingPro analysis showing a healthy current ratio of 2.55 and liquid assets exceeding short-term obligations. The program will also encompass relocation, facility exit, cleanup costs, and some asset write-downs. Severance costs will constitute the bulk of these expenses.
As a result of the restructuring, approximately 96 jobs at the French facility will be eliminated, leading to a net reduction of 68 positions across the company’s operations in France. The after-tax charges are expected to be about $16 million, with non-cash charges being negligible.
The company anticipates incurring these costs through the end of 2026, which marks the expected completion date of the restructuring. Additionally, Watts Water is planning to invest roughly $1 million in capital expenditures to facilitate the consolidation of its operations.
The restructuring is anticipated to yield annual pre-tax savings of around $3 million, with the company expecting to fully realize these savings by the end of 2026. This move is part of Watts Water’s broader strategy to optimize its manufacturing footprint and improve operational efficiencies. The company’s financial health score on InvestingPro is rated as "GREAT," with particularly strong scores in profitability (4.18/5) and cash flow management (3.78/5). InvestingPro subscribers have access to 12 additional key insights about WTS, including detailed analysis of its dividend history and growth potential.
The information regarding this restructuring plan is based on the latest 8-K filing with the Securities and Exchange Commission by Watts Water Technologies, Inc.
In other recent news, Watts Water Technologies, a prominent global manufacturer of plumbing, heating, and water quality products, announced a quarterly dividend of $0.43 per share for its Class A and B Common Stock. This payment, part of the company’s tradition of returning value to shareholders, reflects its ongoing financial performance. Scheduled for March 14, 2025, the dividend will be paid to shareholders of record as of February 28, 2025.
In parallel developments, Deutsche Bank (ETR:DBKGn) has initiated coverage on Watts Water Technologies, maintaining a Hold rating and setting a price target of $240. The bank highlighted the company’s current valuation as one of the most attractive in recent years, despite the stock’s historical underperformance relative to its sector. The firm also noted the potential for a construction recovery to drive significant revisions to earnings per share forecasts, but expressed reservations about predicting a robust recovery by 2025.
Deutsche Bank also acknowledged Watts Water’s strategic move towards Smart & Connected products and its exposure to the rapidly expanding data center sector. However, the firm sees limited apparent catalysts that could lead to a re-evaluation of the stock in the near to medium term. These recent developments provide a snapshot of the current state of affairs for Watts Water Technologies.
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