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INDUSTRY NEWS

CAB™ 2012 to Focus on Entire Spectrum of Nonwovens Converting and Bonding Recognizing a need for an inclusive conference to service the needs of multiple production and bonding technologies, INDA, the trade association representing the nonwoven fabrics industry, will hold the inaugural Converting and Bonding (CAB) Conference from April 17-19, 2012 at the Hyatt Regency in Greenville, S.C.

The Converting and Bonding Conference will expand on the reach – and take the place of – INDA’s successful Needlepunch Conference, which has been held on a regular basis the past few years. The new Conference will encompass a range of nonwoven bonding technologies, including needlepunch, chemical, spray, foam, powder, stitch, thermal, through-air and ultrasonic.

In addition, by including converting as an important part of CAB, INDA looks to attract a larger, more diverse audience looking for information on and solutions for their bonding and converting needs. The target audience for CAB includes roll goods manufacturers, converters and end product manufacturers for automotive and packaging applications. While the agenda is still being finalized the sessions and topics at CAB will include:

• Tutorials on bonding and converting

• Medical, military and alternative energy market updates

• Technical sessions on machinery innovations

• New chemical applications

• Innovations in thermal bonding

• Converting applications using ultrasonic, coating, laminating, water jet and laser technologies

• Market opportunities and applications in geotextiles, building/construction and protective barriers

Market influences, ranging from sustainability, innovation, raw materials and government affairs.

Full Year 2011 Highlights

- Full year sales up 14 percent year-over-year to record $3.5 billion

- Generated strong free cash flow of $248 million, exceeding net income

Pentair, Inc. (NYSE: PNR) announced full year 2011 sales of $3.5 billion, an increase of 14 percent from the prior year. The full year sales increase reflected broad-based growth in both Water and Technical Products, and included 8 percentage points from the acquisition of Clean Process Technologies (CPT) and a point from favorable foreign exchange.

During the year, Pentair generated $248 million in free cash flow, which represented another year of greater than 100 percent conversion of net income. The company paid approximately $80 million in dividends in 2011, or $0.80 per share. The new quarterly dividend effective in the first quarter of 2012 equates to an annual cash dividend of $0.88 cents per share, up 10 percent.

"Delivering strong sales and over 20 percent adjusted earnings growth for the year were significant accomplishments given challenging market conditions," said Randall J. Hogan, Pentair chairman and chief executive officer. "Robust sales in fast growth regions, along with distribution gains and new product introductions drove sales higher. Pricing and productivity discipline enabled another year of margin expansion, and we continued to invest in the innovation, brands and global capabilities that we believe position us well to deliver long-term, sustainable growth."

Fourth Quarter Results

Total company fourth quarter sales increased 15 percent over the prior year quarter to $866 million, and included 12 percentage points from the CPT acquisition and a minimal negative impact from foreign exchange. Sales in fast growth regions grew 65 percent in the quarter, including a 42 percentage point contribution from the CPT acquisition. Year-over-year sales growth in the quarter included a negative 2 percentage point impact due to sales in 2010 related to the Gulf Intracoastal Waterway (GIWW) project.

The company reported a fourth quarter operating loss of $120 million compared to operating income of $80 million in the prior year quarter. Fourth quarter results included a pre-tax non-cash goodwill impairment charge of $201 million in the Residential Filtration business as a result of the company's annual impairment analysis of goodwill. The company concluded that due to continued softness in the end-markets served by residential water treatment components, the carrying amount of this business exceeded its fair value. This non-cash charge does not impact the company's normal business operations or debt covenants.

The company also recorded a pre-tax restructuring charge of $11 million in the fourth quarter as a result of repositioning actions taken to reduce the company's cost structure and better align around channels and growth platforms. Excluding the impairment and restructuring charges and acquisition related costs, operating income increased 18 percent over the prior year quarter to $94 million and operating margins expanded 30 basis points to 10.9 percent.

"We delivered strong sales and cash flow performance in the fourth quarter," added Hogan, "despite softness in western European and residential water treatment component sales. While the goodwill impairment charge and restructuring initiatives significantly impacted reported profitability in the quarter, adjusted operating performance was solid as pricing and productivity helped offset inflation and continued global investments."

Fourth Quarter Business Highlights

Water sales grew 21 percent year-over-year to $608 million in the fourth quarter, with CPT contributing 18 percentage points. Year-over-year sales growth was negatively impacted by approximately 3 percentage points due to sales in 2010 related to the GIWW project. Within the five Water global businesses, the fourth quarter sales performances as compared to the same quarter last year were as follows:

• Residential Flow sales were up 7 percent, with strong double-digit growth in agricultural products and U.S. residential pumps, partly offset by softness in western Europe.
• Residential Filtration sales were up 5 percent, reflecting continued strength in fast growth regions, offset by lower residential water treatment component sales in developed regions.
• Pool sales were up 18 percent, driven by continued dealer expansion, new product introductions and demand for the energy-efficient Eco-Select product line.
• Engineered Flow sales were down 25 percent, reflecting continued headwinds in the municipal end-market and a negative 17 percentage point impact from GIWW.
• Filtration Solutions sales were up 136 percent, reflecting a 133 percentage point or $92 million contribution from the CPT acquisition. The remaining 3 percentage points reflected year-over-year sales growth in foodservice and desalination.

Water reported a fourth quarter operating loss of $142 million, compared to operating income of $55 million in the same period last year. Excluding the non-cash goodwill impairment charge, restructuring charges and acquisition related costs included in the Water segment, fourth quarter operating income increased 24 percent to $68 million while operating margins expanded 20 basis points to 11.2 percent. The benefits from price and productivity nearly offset the unfavorable impact of inflation and increased investments, while volume growth and the impact of CPT helped drive margins higher.

Technical Products delivered fourth quarter sales of $258 million, an increase of 2 percent versus the fourth quarter of last year.

Solid global demand drove double-digit growth across most of the end-markets served, including industrial, energy, infrastructure and commercial that collectively comprise more than 60 percent of Technical Products' sales. The communications end-market declined double-digits year-over-year, as expected, with general electronics sales roughly flat to prior year.

Sales in the U.S. were relatively flat year-over-year, with strong growth in industrial being offset by softness in communications. Western European sales grew modestly, and fast growth regions were up 25 percent.

Outlook

The company anticipates full year 2012 sales to be in the range of approximately $3.7 billion to $3.8 billion, or up 7 to 10 percent, which includes an approximate 3 percentage point contribution from the CPT acquisition. The company expects to generate free cash flow of approximately $270 million in 2012.

"As we exit 2011 and look toward this year, we are well positioned for growth," continued Hogan. "Greater scale in fast-growth regions, more innovative solutions for an expanding customer base and the added technology and application know-how gained with the CPT acquisition position us well for continued success. We expect solid price realization, accelerated productivity and the benefit from repositioning actions to drive margin expansion and profitable growth in 2012."

Air filter maker Clarcor Inc. (CLC), recently reported a 28 percent increase in fourth-quarter profit, driven mainly by double-digit revenue growth and stronger operating margins. Both earnings and revenues for the quarter came in ahead of Street estimates.

The Franklin, Tennessee-headquartered company's attributable net income for the quarter improved to $37.2 million from $29.0 million last year.

Chief Executive Chris Conway said, "This consistent success is a result of the continued execution of our long-term strategy including a commitment to sustainable sales growth, cost containment and continuous improvement."

Clarcor said its net sales for the quarter grew 12 percent to $307.5 million from $275.7 million last year.

Industrial/Environmental Filtration segment sales increased 11 percent to $145.0 million from last year. Net sales in the U.S. rose 22 percent while net sales outside the U.S. declined 12 percent. Growth in domestic sales was the result of higher natural gas vessel sales, increased sales of new air filtration products and incremental sales from the acquisition of TransWeb, which was completed at the end of December 2010. The reduction in sales outside the U.S. was heavily influenced by a reduction in Asian sales primarily due to several large natural gas vessel projects completed in the fourth quarter of 2010 that did not repeat in the fourth quarter this year.

Operating profit in the Industrial/Environmental Filtration segment increased 31 percent from the fourth quarter of 2010. This increase was across the broad markets they serve including $1.3 million as a result of our acquisition of TransWeb. Their 14.4 percent operating margin in the fourth quarter propelled 2011 operating margin in this reporting segment to 11.1 percent.

Net sales at Packaging segment declined 9 percent year-over-year to $24.6 million reflecting lower sales of decorated flat sheet metal including lower holiday promotional sales.

Operating margin, or operating profit as a percentage of sales, improved 1.9 percentage points to 17.8 percent from last year.

Moving forward, Conway said, "We anticipate continued growth in our Engine-Mobile Filtration segment in 2012 primarily from higher sales of heavy-duty engine filters in both the U.S. and foreign markets. We expect that our foreign growth will be higher than our domestic growth due to increased sales in China and export sales to South America and the Middle East."

Clarcor expects total sales growth for full year 2012 in a range of 6.0 to 8.0 percent.

Continuing operations October–December 2011 compared with October–December 2010:

· Net sales EUR 371.3 million (EUR 416.8 million)

· Operating loss EUR 4.2 million (EUR 9.0 million loss)

· Operating profit excluding non-recurring items EUR 1.7 million (EUR 12.7 million).

· Operating margin excluding non-recurring items 0.4% (3.1%).

· Loss before taxes EUR 10.7 million (EUR 14.5 million loss).

Highlights in October–December 2011

· Divestment of the Home and Personal business area was concluded except for the Brazilian operation that is expected to be transferred by the end of first quarter 2012.

· A new vision ‘Inspiring people, passionate about new ideas, growing with our customers’ was introduced to define the kind of company we aim to be in the future.

· Acquisition of a 49.5% stake in a developer of battery technology Porous Power Technologies, LLC.

· A new profit improvement program addressing underperforming businesses was initiated and executed.

Continuing operations January–December 2011 compared with January–December 2010:

· Net sales EUR 1,607.2 million (EUR 1,636.3 million).

· Operating profit EUR 20.1 million (EUR 46.5 million)

· Operating profit excluding non-recurring items EUR 49.7 million (EUR 66.8 million).

· Operating margin excluding non-recurring items 3.1% (4.1%).

· Loss before taxes EUR 6.6 million (EUR 18.8 million profit).

Outlook for 2012

· Net sales from continuing operations are expected to be EUR 1,575-1,735 million. Operating profit excluding non-recurring items from continuing operations is expected to be EUR 60-80 million.

Parker Acquires Railroad Filtration Business of Camfil Farr Group

Parker Hannifin Corporation, the global leader in motion and control technologies, recently announced that it has acquired the railroad filtration business of the Camfil Farr Group. The railroad filtration business of the Camfil Farr Group is a leading manufacturer of air and liquid filtration products used in rail and transit, mining and marine engine applications. Terms of the transaction were not disclosed.

Headquartered in Laval, Canada, the railroad filtration business of the Camfil Farr Group had sales of approximately $22 million in 2011. With approximately 90 employees and operations and sales in Canada, Mexico and India and a sales presence in the United States and Australia, approximately 75% of the ongoing revenues of the business will be reported in Parker's Industrial North America reporting segment with the remaining 25% reported in the Industrial International segment. The acquired business will become a part of Parker's Filtration Group.

"Parker sees significant opportunities to broaden our large engine and air filtration product lines and leverage products in other large combustion engine applications," said Peter Popoff, President - Filtration Group. "The railroad business of Camfil Farr brings expertise and services that allow Parker's Filtration Group to build a worldwide presence in specialized rail, marine and mining markets, while adding clean air technologies to strengthen our filtration solutions capabilities. Additionally, this transaction will give Parker Filtration manufacturing capacity in Canada and Mexico to better service customers in those markets."

Ahlstrom Corporation announced that it has completed significant upgrades to its Global Filtration Technical Center in Turin, Italy.

Ahlstrom has been investing in testing and processing equipment in its Global Filtration Technical Center in Turin during the last year. Now the state of the art technical center is equipped with various filtration testing and simulation equipment. Testing can be carried out as finished filters or flat sheet configuration, and the testing facility focuses on research and development for all transportation, air and liquid filtration applications.

In addition to the several filtration testing equipment, the center provides access to pleaters and processing equipment in order to build prototypes and simulate real life filtration conditions in order to achieve the specific performance needed for filtration norms and applications.

Investments made at the Technical Center offer support and expertise knowhow to all Ahlstrom global customers. "Our investment to the testing and development facility is yet another example of our commitment to the filtration market. We are now better equipped to collaborate with our customers and work together to develop the next generation filtration ideas," states Tommi Björnman, Executive Vice President, Filtration.

Ahlstrom Filtration has 5 other Technical Centers in North and South America and in Asia, which offer research and development support globally for testing and development of filter media.

H.B. Fuller Company will purchase the global industrial adhesives business of Forbo Group. This business will generate approximately $580 million in revenue for the fiscal year ending December 31, 2011, operates 17 manufacturing facilities in 10 countries, and employs more than 1,100 people globally. Projected EBITDA for the business for the 2011 fiscal year is $35 million.

The purchase price for the transaction is $394 million on a debt-free and cash-free basis. The consideration will be paid in cash at the time of closing. H.B. Fuller has committed financing from Morgan Stanley Senior Funding, Inc., Citigroup Global Markets Inc. and JPMorgan Chase Bank, N.A. to support the completion of this transaction.

With this acquisition, H.B. Fuller will gain product technology and add people and skills that will make the company stronger.In addition, there will be sizable opportunities to capitalize on synergies and eliminate duplication in a number of areas, including raw material procurement, manufacturing and redundant services.

Mott Corp has developed a new metal filtration media which meets ASTM F838-05 standards for bacterial retention.

Mott’s sterilising grade filters are biocompatible, impervious to solvents, and compatible with most organic compounds and complex drug chemistries. The media is offered in 316L stainless steel as well as titanium and is engineered for external use or for implantable devices. Mott says that it is stronger, more durable and longer lasting than existing products.

Porous metal filter media is suitable for various implantable devices, filters to prevent plugging of catheters, drug delivery devices, medical instrumentation, various test filters, bacteria filters, sparging devices for cell culture processing, and gas flow restrictor devices for gas delivery in life-critical systems. It has also been used to filter carrier gases and cryogenic fluids, as vents for bioreactors and fermentor vessels, and as site markers used in the human body. The metal can be autoclaved, sterilized or completely recycled.

Website: www.mcilvainecompany.com