Watts Water Technologies (NYSE: WTS) reported Q4 EPS of $1.15, $0.14 better than the analyst estimate of $1.01. Revenue for the quarter came in at $403.4 million versus the consensus estimate of $385.87 million.

• Reported sales increased 1% to $403 million; organic sales declined 2%
• GAAP and adjusted operating margin of 13.5% and 13.6%, respectively; up 170 bps on GAAP basis, up 110 bps on adjusted basis
• GAAP EPS of $0.86, down 8% vs. last year; adjusted EPS of $1.15, up 15%
• Full year 2020 operating cash flow of $229 million and full year free cash flow of $187 million, an 18% and 14% increase, respectively, over the prior year
• *Performance relative to comparable fourth quarter and year ended December 31, 2019.

NORTH ANDOVER, Mass.--(BUSINESS WIRE)-- Watts Water Technologies, Inc. (NYSE: WTS)

Chief Executive Officer Robert J. Pagano Jr. noted, “2020 will certainly be remembered for the many global challenges as a result of the pandemic. Those challenges were pervasive and continue to impact both our personal and work lives. My sincere thanks to all our team members for their dedication while managing the added complexities they encountered in both their personal and professional lives. Their ability to focus on customer needs, remotely collaborate with others to drive performance and adapt to an ever-changing work environment were a source of inspiration for me. COVID-19 will continue to affect our business in 2021, but I am confident that our experienced team will again proactively manage the business to meet and exceed the expectations of our customers.”

Commenting on operating results, Mr. Pagano remarked, “2020 finished stronger than expected as fourth quarter sales were better than anticipated in the Americas and Europe. The higher than expected sales plus continued cost action savings drove a solid quarterly adjusted operating margin. For the full year, although the top line was negatively impacted by the pandemic, we were able to deliver an adjusted operating margin in line with 2019, again due to the aggressive cost actions we’ve taken since early 2020. Cash flow was also very strong. For the full year, free cash flow increased by 14% over 2019, driven by better working capital management.”

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