ITT ENIDINE INC.

ITT Corporation hopes its customers are pumped, moved, and energized about its products. A diversified manufacturer, ITT makes a range of industrial products through four operating segments: industrial process (pumping systems though Goulds Pumps, valves, and services for oil and gas and chemical companies); motion technologies (brake pads and friction materials for transportation markets); interconnect solutions (ICS, connectors for fiber optic, RF, power, and other electronic products); and control technologies (hydraulic valves, actuators, and switches for aerospace companies).

Geographic Reach

ITT does about 35% of its business in the US, but it operates through 150 locations in 35 countries and generates sales in 125 countries.

Operations

The industrial process segment's diversified customer base -- ranging from individual end users to large multinational companies -- includes such markets as oil and gas, mining, power generation, and chemicals. Offering aftermarket services, the segment operates eight Pump Repair and Overhaul outlets in the US, as well as facilities in Australia, Brazil, Chile, Saudi Arabia, Thailand, and Venezuela. Industrial process also provides services for plant optimization and efficiency improvement. The segment accounts for about 44% of sales.

Motion technologies, accounting for 29% of sales, serves the automotive, truck, trailer, bus, and rail sectors. Customers include Shanghai General Motors and Daimler-owned Mercedes in China. Aftermarket sales are also an important element of this segment's business. The segment is itself divided into two businesses, Friction Technologies (brake pads) and KONI (shock absorbers and damping equipment).

Interconnect Solutions (ICS), 16% of sales, serves the aerospace, industrial, defense, and oil & gas markets with products that allow the transfer of signal and power in electronic devices. Brands include Cannon, VEAM, and VIW. The products are focused primarily on two applications, harsh environments and telecom, computer, and consumer technologies. The company's smallest segment, control technologies, (11% of sales), supplies the military and industrial markets, as well as aerospace, with fluid handling, motion control, and shock isolation products.

Financial Performance

As the global industrial pump and automotive markets rebound, the company enjoyed a 12% spike in revenue from $2.2 billion in 2012 to $2.5 billion in 2013. ITT also saw its profits skyrocket by nearly 300% from $125 million in 2012 to $489 million in 2013 due to a $310 million tax benefit it received as a result of the valuation allowance against its US deferred tax assets.

The growth for 2013 was driven by increases from its industrial process segment due to additional revenue from an acquisition and organic growth driven by gains in the global oil and gas market. ITT also experienced increased shipments of project pumps in the North American chemical market and gains in brake pad volumes in Europe and China.

ITT's operating cash flow dropped massively from 2010 to 2011, but it has remained consistent since. In 2013 operating cash flow decreased by $21 million due to a rise in cash used in deferred income taxes and a change in receivables.

Strategy

ITT's six-pronged growth strategy is focused on improving the customer experience, investing in technology and research and development, expanding in growth markets, growing aftermarket sales, expanding margin through operations improvements, and using capital to grow organically and inorganically. To improve customer relationships the company uses the Value-Based Commercial Excellence (VBCE) process, which is used to price products and help customers resolve challenges. Most of ITT's products are made to withstand harsh conditions.

To meet more demand from emerging markets, which accounted for nearly 30% of ITT's 2013 revenue, the company has sited half of its manufacturing base outside the US and is developing more operations in the developing world. In 2013 it opened a new pump manufacturing facility, located in the central county of Chungcheongbuk-do in South Korea. The $34 million facility produces, packages, and tests highly engineered pumps under the Goulds Pumps brand. In 2014 ITT invested $20 million to expand its braking technology production and R&D capabilities in Wuxi, Jiangsu Province, China, bringing its total investment in the facility to nearly $30 million over the past two years.

The aftermarket accounted for 35% of 2013 revenue. Through end user sales channels and service personnel the company is seeking more opportunities for that business while also developing technologies that reduce aftermarket costs for customers.

The company's capital deployment strategy also calls for the acquisition of companies that make unique and differentiated products. In 2012 it purchased Germany-based Bornemann Pumps, a pump and pumping systems maker catering to new markets in the oil and gas industry.

Company Background

In 2011, ITT spun off two of its other key segments -- defense and fluid -- into independent, publicly-traded operating companies:  Exelis and  Xylem. The 2011 transformation, which effectively split the company into three separate operating companies, significantly reduced ITT's operational size (In 2010, its Defense and Fluid segments accounted for almost 90% of its total revenue.), but preserved the company's presence in the aerospace, automotive, rail, energy, and industrial markets. 

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ITT ENIDINE INC.


7 Centre Dr
Orchard Park, NY 14127-2281
Phone: 1 (716) 662-1900
Fax: 1 (716) 6621909
www.ittcontroltech.com

STATS


  • Employer Type: Unknown
  • Manager Of Rail Product Sales: Jim Mohn
  • Chb: Munish Nanda
  • Chief Executive Officer: Michael Siino

Major Office Locations

  • Orchard Park, NY

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