Achieved Net Sales of $234.0 million
Mueller Water Products, Inc. (NYSE: MWA) announced today that for
its fiscal 2019 second quarter ended March 31, 2019, net sales
were $234.0 million and net income was $10.9 million.
In the 2019 second quarter, the Company:
- Achieved net sales of $234.0 million as compared with $233.2
million in the prior year quarter.
- Generated operating income of $22.2 million as compared with
operating income of $29.9 million in the prior year quarter.
Achieved adjusted operating income of $31.3 million as compared
with $31.8 million in the prior year quarter.
- Achieved net income of $10.9 million as compared with $10.2
million in the prior year quarter, which included the impact of
prior year tax law changes. Generated adjusted net income of
$18.6 million as compared with $19.1 million in the prior year
quarter.
- Reported net income per diluted share of $0.07 as compared with
$0.06 in the prior year quarter. Achieved adjusted net income
per diluted share of $0.12 as compared with $0.12 in the prior year
quarter.
- Increased adjusted EBITDA 5.4 percent to $44.7 million as
compared with $42.4 million in the prior year quarter.
“For our company, February 15th of this year will forever be
remembered for the senseless tragedy that occurred at our Henry
Pratt facility in Aurora, Illinois. We are grateful for the
outpouring of support and encouragement we have received from the
Aurora community and the nation. What we’ve seen in the wake
of this tragedy, from our Pratt team members and employees around
the globe, is the embodiment of the values of the Mueller
family. I am proud of the team and their commitment to each
other. Our hearts continue to be with the victims and their
loved ones,” said Scott Hall, President and Chief Executive Officer
of Mueller Water Products.
“In the quarter, we generated a slight increase in net sales as
the benefit from our acquisition of Krausz Industries helped offset
lower volumes at both Infrastructure and Technologies. We
faced challenges from slower than anticipated residential
construction and severe weather, as well as the impact of the
Aurora tragedy. As a reminder, in the second quarter of 2018
our net sales increased 16.8 percent.
“Despite these challenges in the second quarter, our net sales
and adjusted EBITDA increased 3.7 percent and 11.1 percent,
respectively, through the first half of the year. Further, we
expect to generate stronger sales growth in the second half of the
year, supported by growth in our end markets and improving
execution by our teams. We anticipate our net sales will
increase between 7 and 9 percent in fiscal 2019 with adjusted
EBITDA increasing between 12 and 15 percent. Importantly, we
will continue to execute our strategies to reinvest and grow our
business leveraging our strong balance sheet and free cash flow
generation.”
Consolidated Results
Net sales for the 2019 second quarter increased $0.8 million to
$234.0 million, as compared with $233.2 million in the 2018 second
quarter.
Adjusted operating income decreased 1.6 percent to $31.3 million
for the 2019 second quarter as compared with $31.8 million in the
2018 second quarter.
During the second 2019 quarter we recorded $6.9 million of
strategic reorganization and other charges including $4.3 million
of non-recurring expenses associated with the tragedy that occurred
at our facility in Aurora, Illinois.
Segment Results
Infrastructure
Net sales for the 2019 second quarter increased $3.0 million, or
1.4 percent, to $214.1 million, as compared with $211.1 million in
the 2018 second quarter, due to the acquisition of Krausz
Industries and higher pricing, partially offset by lower volumes
caused by the challenges mentioned earlier.
Operating income was $40.1 million and adjusted operating income
was $43.4 million in the quarter, excluding Krausz inventory
step-up amortization of $2.2 million. Adjusted operating
income decreased $1.6 million as compared with the prior year
quarter, primarily due to lower shipment volumes and higher costs
associated with inflation and SG&A expenses, partially offset
by higher pricing.
Adjusted EBITDA of $54.8 million increased $0.3 million as
compared with $54.5 million in the prior year quarter.
Technologies
Net sales for the 2019 second quarter decreased $2.2 million to
$19.9 million primarily due to lower volumes at Echologics,
partially offset by sales growth at Metrology.
Operating loss and adjusted operating loss were $3.6 million in
the 2019 second quarter. Adjusted operating loss improved
$0.3 million as compared with $3.9 million in the prior year
quarter, primarily due to improved manufacturing performance and
lower SG&A, partially offset by lower volumes at
Echologics.
Adjusted EBITDA improved $0.7 million for a loss of $1.7 million
as compared with a loss of $2.4 million in the prior year
quarter.
Income Taxes
For the 2019 second quarter, the Company reported income tax
expense of $3.9 million, or 26.4 percent of income before
tax. The prior year quarter included $7.5 million related to
the one-time provisional expense recorded for the transition tax on
previously-untaxed, undistributed foreign earnings.
2019 Business Outlook
The Company’s following full year 2019 expectations reflect the
current business environment and include the results expected from
the acquisition of Krausz Industries Ltd.
- Growth in all end markets during the second half of 2019 with
municipal spending growth in the mid-single digit range,
residential construction growth in the low-single digit range and
natural gas distribution growth in the mid-single digit range.
- Consolidated net sales growth between 7 and 9 percent with
organic sales growth supported by increased volume and higher
pricing.
- Based on the current outlook for product mix and inflation,
adjusted EBITDA growth between 12 and 15 percent (from $180.0
million of adjusted EBITDA in 2018).
- Depreciation and amortization between $53 million and $56
million.
- Corporate SG&A expenses between $34 million and $36
million.
- Net interest expense between $23 million and $24 million and an
annual effective income tax rate between 25 and 27 percent.
- Capital expenditures between $60 million and $65 million.
Conference Call Webcast
Mueller Water Products’ quarterly earnings conference call will
take place Tuesday, May 7, 2019, at 9:00 a.m. ET. Members of
Mueller Water Products’ leadership team will discuss the Company’s
recent financial performance and respond to questions from
financial analysts. A live webcast of the call will be
available on the Investor Relations section of the Company’s
website. Please go to the website
(www.muellerwaterproducts.com) at least 15 minutes prior to the
start of the call to register, download and install any necessary
software. A replay of the call will be available for 30 days
and can be accessed by dialing 1-800-469-5420. An archive of
the webcast will also be available on the Investor Relations
section of the Company’s website.
Use of Non-GAAP Measures
In an effort to provide investors with additional information
regarding the Company’s results as determined under GAAP, the
Company also provides non-GAAP information that management believes
is useful to investors. These non-GAAP measures have
limitations as analytical tools, and securities analysts, investors
and other interested parties should not consider any of these
non-GAAP measures in isolation or as a substitute for analysis of
the Company’s results as reported under GAAP. These non-GAAP
measures may not be comparable to similarly titled measures used by
other companies.
The Company presents adjusted net income, adjusted net income
per diluted share, adjusted operating income, adjusted operating
margin, adjusted EBITDA and adjusted EBITDA margin as performance
measures because management uses these measures in evaluating the
Company’s underlying performance on a consistent basis across
periods and in making decisions about operational strategies.
Management also believes these measures are frequently used by
securities analysts, investors and other interested parties in the
evaluation of the Company’s recurring performance.
The Company presents net debt and net debt leverage as
performance measures because management uses them in evaluating its
capital management, and the investment community commonly uses them
as measures of indebtedness. The Company presents free cash
flow because management believes it is commonly used by the
investment community to measure the Company’s ability to create
liquidity.
The calculations of these non-GAAP measures and reconciliations
to GAAP results are included as an attachment to this press release
and have been posted online at www.muellerwaterproducts.com.
Forward-Looking Statements
This press release contains certain statements that may be
deemed “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements
that address activities, events or developments that we intend,
expect, plan, project, believe or anticipate will or may occur in
the future are forward-looking statements, including statements
regarding our go-to-market strategies, operational excellence,
acceleration of new product development, continued growth in our
end markets, net sales growth, organic adjusted operating income
and adjusted EBITDA growth, capital allocation and growth
strategies and future warranty charges. Forward-looking
statements are based on certain assumptions and assessments made by
us in light of our experience and perception of historical trends,
current conditions and expected future developments.
Actual results and the timing of events may differ materially
from those contemplated by the forward-looking statements due to a
number of factors, including regional, national or global
political, economic, market and competitive conditions, cyclical
and changing demand in core markets such as municipal spending,
residential and non-residential construction, and natural gas
distribution, manufacturing and product performance, expectations
regarding higher volumes, continued execution of our cost
productivity initiatives and improved pricing, warranty exposures
(including the adequacy of our warranty reserves), our ability to
successfully resolve the issues associated with the Walter Tax
Liability, changing regulatory, trade and tariff conditions, the
failure to realize any of the anticipated benefits of our
acquisition of Krausz within the time period currently expected,
the risk that the integration of Krausz’s operations into our own
will be more costly, difficult or time consuming than expected, and
other factors that are described in the section entitled “RISK
FACTORS” in Item 1A of our Quarterly Reports on Form 10-Q and most
recently filed Annual Report on Form 10-K. Undue reliance should
not be placed on any forward-looking statements. We do not
have any intent to update forward-looking statements, except as
required by law.
About Mueller Water Products, Inc.
Mueller Water Products, Inc. (NYSE: MWA) is a leading
manufacturer and marketer of products and services used in the
transmission, distribution and measurement of water in North
America. Our broad product and service portfolio includes
engineered valves, fire hydrants, pipe connection and repair
products, metering products, leak detection, and pipe condition
assessment. We help municipalities increase operational
efficiencies, improve customer service and prioritize capital
spending, demonstrating why Mueller Water Products is Where
Intelligence Meets Infrastructure®. Visit us at
www.muellerwaterproducts.com.
Mueller refers to one or more of Mueller Water Products, Inc. a
Delaware corporation (“MWP”), and its subsidiaries. MWP and each of
its subsidiaries are legally separate and independent entities when
providing products and services. MWP does not provide products or
services to third parties. MWP and each of its subsidiaries are
liable only for their own acts and omissions and not those of each
other. MWP brands include Mueller®, Echologics®, Hydro Gate®,
Hydro-Guard®, HYMAX®, Jones®, Krausz®, Mi.Net®, Milliken®, Pratt®,
Singer®, and U.S. Pipe Valve & Hydrant. Please see
muellerwp.com/brands and krauszusa.com to learn more.
Investor Relations Contact: Whit
Kincaid770-206-4116wkincaid@muellerwp.com
Media Contact: Yolanda
Kokayi770-206-4131ykokayi@muellerwp.com
MUELLER WATER PRODUCTS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(UNAUDITED) |
|
March 31, |
|
September 30, |
|
2019 |
|
2018 |
|
(in millions, except share
amounts) |
Assets: |
|
|
|
Cash and cash
equivalents |
$ |
134.3 |
|
|
$ |
347.1 |
|
Receivables, net |
167.3 |
|
|
164.3 |
|
Inventories |
205.9 |
|
|
156.6 |
|
Other
current assets |
27.6 |
|
|
17.5 |
|
Total
current assets |
535.1 |
|
|
685.5 |
|
Property,
plant and equipment, net |
176.0 |
|
|
150.9 |
|
Goodwill |
84.5 |
|
|
12.1 |
|
Intangible assets |
450.3 |
|
|
408.1 |
|
Other
noncurrent assets |
34.3 |
|
|
35.3 |
|
Total
assets |
$ |
1,280.2 |
|
|
$ |
1,291.9 |
|
|
|
|
|
Liabilities and
equity: |
|
|
|
Current
portion of long-term debt |
$ |
0.8 |
|
|
$ |
0.7 |
|
Accounts
payable |
69.1 |
|
|
90.0 |
|
Other
current liabilities |
104.4 |
|
|
76.4 |
|
Total
current liabilities |
174.3 |
|
|
167.1 |
|
Long-term
debt |
444.9 |
|
|
444.3 |
|
Deferred
income taxes |
84.3 |
|
|
79.2 |
|
Other
noncurrent liabilities |
27.9 |
|
|
36.5 |
|
Total
liabilities |
731.4 |
|
|
727.1 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Common stock:
600,000,000 shares authorized; 158,249,164 and 157,332,121 shares
outstanding at March 31, 2019 and September 30, 2018,
respectively |
1.6 |
|
|
1.6 |
|
Additional paid-in capital |
1,433.2 |
|
|
1,444.5 |
|
Accumulated deficit |
(860.1 |
) |
|
(850.0 |
) |
Accumulated other comprehensive loss |
(27.8 |
) |
|
(32.8 |
) |
Total
Company stockholders’ equity |
546.9 |
|
|
563.3 |
|
Noncontrolling interest |
1.9 |
|
|
1.5 |
|
Total
equity |
548.8 |
|
|
564.8 |
|
Total
liabilities and equity |
$ |
1,280.2 |
|
|
$ |
1,291.9 |
|
|
|
MUELLER WATER PRODUCTS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED) |
|
Three months ended |
|
Six months ended |
|
March 31, |
|
March 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in millions, except per share
amounts) |
Net sales |
$ |
234.0 |
|
|
$ |
233.2 |
|
|
$ |
426.8 |
|
|
$ |
411.5 |
|
Cost of sales |
159.2 |
|
|
158.7 |
|
|
291.9 |
|
|
281.6 |
|
Gross
profit |
74.8 |
|
|
74.5 |
|
|
134.9 |
|
|
129.9 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling,
general and administrative |
45.7 |
|
|
42.7 |
|
|
86.7 |
|
|
82.5 |
|
Gain on
sale of idle property |
— |
|
|
— |
|
|
— |
|
|
(9.0 |
) |
Strategic
reorganization and other charges (1) |
6.9 |
|
|
1.9 |
|
|
10.1 |
|
|
5.8 |
|
Total
operating expenses |
52.6 |
|
|
44.6 |
|
|
96.8 |
|
|
79.3 |
|
Operating
income |
22.2 |
|
|
29.9 |
|
|
38.1 |
|
|
50.6 |
|
Other expense
(income): |
|
|
|
|
|
|
|
Pension
cost other than service (2) |
1.0 |
|
|
0.3 |
|
|
0.9 |
|
|
0.5 |
|
Interest
expense, net |
5.9 |
|
|
5.2 |
|
|
11.4 |
|
|
10.4 |
|
Walter
Energy Accrual (3) |
0.5 |
|
|
— |
|
|
37.9 |
|
|
— |
|
Net other
expense |
7.4 |
|
|
5.5 |
|
|
50.2 |
|
|
10.9 |
|
Income
(loss) before income taxes |
14.8 |
|
|
24.4 |
|
|
(12.1 |
) |
|
39.7 |
|
Income taxes: |
|
|
|
|
|
|
|
Recurring-basis income tax expense |
4.0 |
|
|
6.7 |
|
|
6.3 |
|
|
9.5 |
|
Tax
benefit of Walter Energy Accrual |
(0.1 |
) |
|
— |
|
|
(7.7 |
) |
|
— |
|
One-time
impacts from tax legislation (4) |
— |
|
|
7.5 |
|
|
(0.6 |
) |
|
(35.1 |
) |
Income
tax expense (benefit) |
3.9 |
|
|
14.2 |
|
|
(2.0 |
) |
|
(25.6 |
) |
Net
income (loss) |
$ |
10.9 |
|
|
$ |
10.2 |
|
|
$ |
(10.1 |
) |
|
$ |
65.3 |
|
|
|
|
|
|
|
|
|
Net income (loss) per
basic share |
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
(0.06 |
) |
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
Net income (loss) per
diluted share |
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
(0.06 |
) |
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
158.2 |
|
|
158.3 |
|
|
157.9 |
|
|
158.4 |
|
Diluted |
159.2 |
|
|
159.4 |
|
|
157.9 |
|
|
159.6 |
|
|
|
|
|
|
|
|
|
Dividends declared per
share |
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.10 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
(1) Strategic
reorganization and other charges includes $4.3 million for
identifiable one-time expenses related to the Aurora tragedy. |
(2) Pension
cost other than service includes a $1.0 million contribution to
annuitize the accounts of all participants in our Canadian pension
plans. |
(3) For the
quarter ended March 31, 2019, the Company remained in settlement
discussions related to a proposed calculation of the liability
related to the ongoing dispute regarding Walter Energy tax returns.
For the quarter ended March 31, 2019, we recorded an additional
accrual of $0.5 million for subsequent accrued interest. For the
six months ended March 31, 2019, the amount accrued includes
approximately $7 million for the underlying tax matter, which is
not deductible for federal income tax purposes, and approximately
$31 million of related interest. |
(4) U.S.
federal income tax legislation was enacted during the quarter ended
December 31, 2017. The six months ended March 31, 2019 included a
$0.6 million income tax benefit for the finalized calculation of
this legislation’s “transition tax.” |
MUELLER WATER PRODUCTS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(UNAUDITED) |
|
Six months ended |
|
March 31, |
|
2019 |
|
2018 |
|
(in millions) |
Operating
activities: |
|
|
|
Net income (loss) |
$ |
(10.1 |
) |
|
$ |
65.3 |
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: |
|
|
|
Depreciation |
12.6 |
|
|
10.1 |
|
Amortization |
12.9 |
|
|
11.4 |
|
Stock-based compensation |
2.3 |
|
|
3.5 |
|
Retirement plans |
3.2 |
|
|
1.5 |
|
Deferred
income taxes |
(3.8 |
) |
|
(38.6 |
) |
Gain on
sale |
— |
|
|
(9.0 |
) |
Other,
net |
1.7 |
|
|
2.1 |
|
Changes
in assets and liabilities, net of acquisitions: |
|
|
|
Receivables |
3.7 |
|
|
(6.8 |
) |
Inventories |
(32.2 |
) |
|
(17.5 |
) |
Other
assets |
(10.1 |
) |
|
(2.0 |
) |
Walter
Energy Accrual |
37.9 |
|
|
— |
|
Other
liabilities |
(47.2 |
) |
|
(18.4 |
) |
Net cash
provided by (used in) operating activities |
(29.1 |
) |
|
1.6 |
|
Investing
activities: |
|
|
|
Capital
expenditures |
(30.5 |
) |
|
(14.4 |
) |
Proceeds
from sales of assets |
— |
|
|
7.4 |
|
Acquisitions, net of cash acquired |
(127.5 |
) |
|
— |
|
Net cash
used in investing activities |
(158.0 |
) |
|
(7.0 |
) |
Financing
activities: |
|
|
|
Repayment
of Krausz debt |
(13.2 |
) |
|
— |
|
Dividends |
(15.8 |
) |
|
(14.3 |
) |
Employee
taxes related to stock-based compensation |
(1.4 |
) |
|
(2.1 |
) |
Common
stock issued |
3.6 |
|
|
6.4 |
|
Stock
repurchased under buyback program |
— |
|
|
(20.0 |
) |
Repayment
of debt |
— |
|
|
(2.4 |
) |
Other |
0.1 |
|
|
(0.1 |
) |
Net cash
used in financing activities |
(26.7 |
) |
|
(32.5 |
) |
Effect of currency
exchange rate changes on cash |
1.0 |
|
|
0.1 |
|
Net
change in cash and cash equivalents |
(212.8 |
) |
|
(37.8 |
) |
Cash and cash
equivalents at beginning of period |
347.1 |
|
|
361.7 |
|
Cash and
cash equivalents at end of period |
$ |
134.3 |
|
|
$ |
323.9 |
|
MUELLER WATER PRODUCTS, INC. AND
SUBSIDIARIESSEGMENT RESULTS AND RECONCILIATION OF
GAAP TO NON-GAAP PERFORMANCE
MEASURES(UNAUDITED) |
|
Quarter ended March 31, 2019 |
|
Infrastructure |
|
Technologies |
|
Corporate |
|
Consolidated |
|
(dollars in millions, except per share
amounts) |
Net sales |
$ |
214.1 |
|
|
$ |
19.9 |
|
|
$ |
— |
|
|
$ |
234.0 |
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
71.9 |
|
|
$ |
2.9 |
|
|
$ |
— |
|
|
$ |
74.8 |
|
Selling, general and
administrative expenses |
30.7 |
|
|
6.5 |
|
|
8.5 |
|
|
45.7 |
|
Strategic
reorganization and other charges |
1.1 |
|
|
— |
|
|
5.8 |
|
|
6.9 |
|
Operating
income (loss) (1) |
$ |
40.1 |
|
|
$ |
(3.6 |
) |
|
$ |
(14.3 |
) |
|
$ |
22.2 |
|
|
|
|
|
|
|
|
|
Operating margin |
18.7 |
% |
|
(18.1 |
)% |
|
|
|
9.5 |
% |
|
|
|
|
|
|
|
|
Capital
expenditures |
$ |
13.0 |
|
|
$ |
1.6 |
|
|
$ |
— |
|
|
$ |
14.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP performance measures to GAAP performance
measures: |
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
$ |
10.9 |
|
Strategic
reorganization and other charges |
|
|
|
|
|
|
6.9 |
|
Exit of
pension plans |
|
|
|
|
|
|
1.0 |
|
Krausz
inventory step-up amortization |
|
|
|
|
|
|
2.2 |
|
Walter
Energy Accrual |
|
|
|
|
|
|
0.5 |
|
Income
tax benefit of adjusting items |
|
|
|
|
|
|
(2.9 |
) |
Adjusted
net income |
|
|
|
|
|
|
$ |
18.6 |
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding |
|
|
|
|
|
|
159.2 |
|
|
|
|
|
|
|
|
|
Adjusted
net income per diluted share |
|
|
|
|
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
$ |
10.9 |
|
Income
tax expense (benefit) (1) |
|
|
|
|
|
|
3.9 |
|
Interest
expense, net (1) |
|
|
|
|
|
|
5.9 |
|
Walter
Energy Accrual |
|
|
|
|
|
|
0.5 |
|
Pension
costs other than service |
|
|
|
|
|
|
1.0 |
|
Operating
income (loss) |
$ |
40.1 |
|
|
$ |
(3.6 |
) |
|
$ |
(14.3 |
) |
|
22.2 |
|
Krausz
inventory step-up amortization |
2.2 |
|
|
— |
|
|
— |
|
|
2.2 |
|
Strategic
reorganization and other charges |
1.1 |
|
|
— |
|
|
5.8 |
|
|
6.9 |
|
Adjusted
operating income (loss) |
43.4 |
|
|
(3.6 |
) |
|
(8.5 |
) |
|
31.3 |
|
Depreciation and amortization |
11.4 |
|
|
1.9 |
|
|
0.1 |
|
|
13.4 |
|
Adjusted EBITDA |
$ |
54.8 |
|
|
$ |
(1.7 |
) |
|
$ |
(8.4 |
) |
|
$ |
44.7 |
|
|
|
|
|
|
|
|
|
Adjusted
operating margin |
20.3 |
% |
|
(18.1 |
)% |
|
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin |
25.6 |
% |
|
(8.5 |
)% |
|
|
|
19.1 |
% |
|
|
|
|
|
|
|
|
(1)
We do not allocate interest or income taxes to our segments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended March 31, 2019 |
|
Infrastructure |
|
Technologies |
|
Corporate |
|
Consolidated |
|
(dollars in millions, except per share
amounts) |
Adjusted
EBITDA |
$ |
54.8 |
|
|
$ |
(1.7 |
) |
|
$ |
(8.4 |
) |
|
$ |
44.7 |
|
Three
prior quarters’ adjusted EBITDA |
167.0 |
|
|
(0.2 |
) |
|
(23.9 |
) |
|
142.9 |
|
Trailing
twelve months’ adjusted EBITDA |
$ |
221.8 |
|
|
$ |
(1.9 |
) |
|
$ |
(32.3 |
) |
|
$ |
187.6 |
|
|
|
|
|
|
|
|
|
Reconciliation of net
debt to total debt (end of period): |
|
|
|
|
|
|
|
Current
portion of long-term debt |
|
|
|
|
|
|
$ |
0.8 |
|
Long-term
debt |
|
|
|
|
|
|
444.9 |
|
Total
debt |
|
|
|
|
|
|
445.7 |
|
Less cash
and cash equivalents |
|
|
|
|
|
|
134.3 |
|
Net
debt |
|
|
|
|
|
|
$ |
311.4 |
|
|
|
|
|
|
|
|
|
Net debt
leverage (net debt divided by trailing twelve months’ adjusted
EBITDA) |
|
|
|
|
|
1.7x |
|
|
|
|
|
|
|
|
MUELLER WATER PRODUCTS, INC. AND
SUBSIDIARIESSEGMENT RESULTS AND RECONCILIATION OF
GAAP TO NON-GAAP PERFORMANCE
MEASURES(UNAUDITED) |
|
Quarter ended March 31, 2018 |
|
Infrastructure |
|
Technologies |
|
Corporate |
|
Consolidated |
|
(dollars in millions, except per share
amounts) |
Net sales |
$ |
211.1 |
|
|
$ |
22.1 |
|
|
$ |
— |
|
|
$ |
233.2 |
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
71.4 |
|
|
$ |
3.1 |
|
|
$ |
— |
|
|
$ |
74.5 |
|
Selling, general and
administrative expenses |
26.4 |
|
|
7.0 |
|
|
9.3 |
|
|
42.7 |
|
Gain on sale of idle
property |
— |
|
|
— |
|
|
— |
|
|
— |
|
Strategic
reorganization and other charges |
0.1 |
|
|
— |
|
|
1.8 |
|
|
1.9 |
|
Operating
income (loss) (1) |
$ |
44.9 |
|
|
$ |
(3.9 |
) |
|
$ |
(11.1 |
) |
|
$ |
29.9 |
|
|
|
|
|
|
|
|
|
Operating margin |
21.3 |
% |
|
(17.6 |
)% |
|
|
|
12.8 |
% |
|
|
|
|
|
|
|
|
Capital
expenditures |
$ |
6.3 |
|
|
$ |
1.5 |
|
|
$ |
0.2 |
|
|
$ |
8.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP performance measures to GAAP performance
measures: |
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
$ |
10.2 |
|
Income tax
benefit from remeasuring deferred income tax items |
|
|
|
|
|
|
7.5 |
|
Strategic
reorganization and other charges |
|
|
|
|
|
|
1.9 |
|
Income
tax benefit of adjusting items |
|
|
|
|
|
|
(0.5 |
) |
Adjusted
net income |
|
|
|
|
|
|
$ |
19.1 |
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding |
|
|
|
|
|
|
159.4 |
|
|
|
|
|
|
|
|
|
Adjusted
net income per diluted share |
|
|
|
|
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
$ |
10.2 |
|
Income
tax expense (1) |
|
|
|
|
|
|
14.2 |
|
Interest
expense, net (1) |
|
|
|
|
|
|
5.2 |
|
Pension
costs other than service |
|
|
|
|
|
|
0.3 |
|
Operating
income (loss) |
$ |
44.9 |
|
|
$ |
(3.9 |
) |
|
$ |
(11.1 |
) |
|
29.9 |
|
Strategic
reorganization and other charges |
0.1 |
|
|
— |
|
|
1.8 |
|
|
1.9 |
|
Adjusted
operating income (loss) |
45.0 |
|
|
(3.9 |
) |
|
(9.3 |
) |
|
31.8 |
|
Pension
costs other than service |
0.1 |
|
|
— |
|
|
(0.4 |
) |
|
(0.3 |
) |
Depreciation and amortization |
9.4 |
|
|
1.5 |
|
|
— |
|
|
10.9 |
|
Adjusted EBITDA |
$ |
54.5 |
|
|
$ |
(2.4 |
) |
|
$ |
(9.7 |
) |
|
$ |
42.4 |
|
|
|
|
|
|
|
|
|
Adjusted
operating margin |
21.3 |
% |
|
(17.6 |
)% |
|
|
|
13.6 |
% |
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin |
25.8 |
% |
|
(10.9 |
)% |
|
|
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
We do not allocate interest or income taxes to our segments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended March 31, 2018 |
|
Infrastructure |
|
Technologies |
|
Corporate |
|
Consolidated |
|
(dollars in millions, except per share
amounts) |
Adjusted
EBITDA |
$ |
54.5 |
|
|
$ |
(2.4 |
) |
|
$ |
(9.7 |
) |
|
$ |
42.4 |
|
Three
prior quarters’ adjusted EBITDA |
160.3 |
|
|
(4.4 |
) |
|
(25.4 |
) |
|
130.5 |
|
Trailing
twelve months’ adjusted EBITDA |
$ |
214.8 |
|
|
$ |
(6.8 |
) |
|
$ |
(35.1 |
) |
|
$ |
172.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net
debt to total debt (end of period): |
|
|
|
|
|
|
|
Current
portion of long-term debt |
|
|
|
|
|
|
$ |
5.6 |
|
Long-term
debt |
|
|
|
|
|
|
473.4 |
|
Total
debt |
|
|
|
|
|
|
479.0 |
|
Less cash
and cash equivalents |
|
|
|
|
|
|
323.9 |
|
Net
debt |
|
|
|
|
|
|
$ |
155.1 |
|
|
|
|
|
|
|
|
|
Net debt
leverage (net debt divided by trailing twelve months’ adjusted
EBITDA) |
|
|
|
|
|
0.9x |
|
|
|
|
|
|
|
|
MUELLER WATER PRODUCTS, INC. AND
SUBSIDIARIESSEGMENT RESULTS AND RECONCILIATION OF
GAAP TO NON-GAAP PERFORMANCE
MEASURES(UNAUDITED) |
|
Six months ended March 31, 2019 |
|
Infrastructure |
|
Technologies |
|
Corporate |
|
Consolidated |
|
(dollars in millions, except per share
amounts) |
Net sales |
$ |
386.1 |
|
|
$ |
40.7 |
|
|
$ |
— |
|
|
$ |
426.8 |
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
128.7 |
|
|
$ |
6.2 |
|
|
$ |
— |
|
|
$ |
134.9 |
|
Selling, general and
administrative expenses |
56.6 |
|
|
13.5 |
|
|
16.6 |
|
|
86.7 |
|
Strategic
reorganization and other charges |
1.1 |
|
|
— |
|
|
9.0 |
|
|
10.1 |
|
Operating
income (loss) (1) |
$ |
71.0 |
|
|
$ |
(7.3 |
) |
|
$ |
(25.6 |
) |
|
$ |
38.1 |
|
|
|
|
|
|
|
|
|
Operating margin |
18.4 |
% |
|
(17.9 |
)% |
|
|
|
8.9 |
% |
|
|
|
|
|
|
|
|
Capital
expenditures |
$ |
27.8 |
|
|
$ |
2.7 |
|
|
$ |
— |
|
|
$ |
30.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP performance measures to GAAP performance
measures: |
|
|
|
|
|
|
Net
loss |
|
|
|
|
|
|
$ |
(10.1 |
) |
Walter
Energy Accrual |
|
|
|
|
|
|
37.9 |
|
Strategic
reorganization and other charges |
|
|
|
|
|
|
10.1 |
|
Transition tax benefit |
|
|
|
|
|
|
(0.6 |
) |
Discrete
tax benefit of Walter Energy Accrual |
|
|
|
|
|
|
(7.7 |
) |
Exit of
pension plans |
|
|
|
|
|
|
1.0 |
|
Krausz
inventory step-up amortization |
|
|
|
|
|
|
2.2 |
|
Income
tax benefit of adjusting items |
|
|
|
|
|
|
(2.6 |
) |
Adjusted
net income |
|
|
|
|
|
|
$ |
30.2 |
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding |
|
|
|
|
|
|
157.9 |
|
|
|
|
|
|
|
|
|
Adjusted
net income per diluted share |
|
|
|
|
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
|
|
|
|
$ |
(10.1 |
) |
Income
tax expense (benefit) (1) |
|
|
|
|
|
|
(2.0 |
) |
Interest
expense, net (1) |
|
|
|
|
|
|
11.4 |
|
Walter
Energy Accrual |
|
|
|
|
|
|
37.9 |
|
Pension
costs other than service |
|
|
|
|
|
|
0.9 |
|
Operating
income (loss) |
$ |
71.0 |
|
|
$ |
(7.3 |
) |
|
$ |
(25.6 |
) |
|
38.1 |
|
Krausz inventory step-up amortization |
2.2 |
|
|
— |
|
|
— |
|
|
2.2 |
|
Strategic
reorganization and other charges |
1.1 |
|
|
— |
|
|
9.0 |
|
|
10.1 |
|
Adjusted
operating income (loss) |
74.3 |
|
|
(7.3 |
) |
|
(16.6 |
) |
|
50.4 |
|
Pension
benefit other than service, excluding the effect of exit of pension
plans |
— |
|
|
— |
|
|
0.1 |
|
|
0.1 |
|
Depreciation and amortization |
21.5 |
|
|
3.9 |
|
|
0.1 |
|
|
25.5 |
|
Adjusted
EBITDA |
$ |
95.8 |
|
|
$ |
(3.4 |
) |
|
$ |
(16.4 |
) |
|
$ |
76.0 |
|
|
|
|
|
|
|
|
|
Adjusted
operating margin |
19.2 |
% |
|
(17.9 |
)% |
|
|
|
11.8 |
% |
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin |
24.8 |
% |
|
(8.4 |
)% |
|
|
|
17.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of free
cash flow to net cash used in operating activities: |
|
|
|
|
|
|
|
Net cash
used in operating activities |
|
|
|
|
|
|
$ |
(29.1 |
) |
Less
capital expenditures |
|
|
|
|
|
|
(30.5 |
) |
Free cash
flow |
|
|
|
|
|
|
$ |
(59.6 |
) |
|
|
|
|
|
|
|
|
(1)
We do not allocate interest or income taxes to our segments. |
|
|
|
|
MUELLER WATER PRODUCTS, INC. AND
SUBSIDIARIESSEGMENT RESULTS AND RECONCILIATION OF
GAAP TO NON-GAAP PERFORMANCE
MEASURES(UNAUDITED) |
|
Six months ended March 31, 2018 |
|
Infrastructure |
|
Technologies |
|
Corporate |
|
Consolidated |
|
(dollars in millions, except per share
amounts) |
Net sales |
$ |
371.2 |
|
|
$ |
40.3 |
|
|
$ |
— |
|
|
$ |
411.5 |
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
123.9 |
|
|
$ |
6.0 |
|
|
$ |
— |
|
|
$ |
129.9 |
|
Selling, general and
administrative expenses |
50.8 |
|
|
14.5 |
|
|
17.2 |
|
|
82.5 |
|
Gain on sale of idle
property |
— |
|
|
— |
|
|
(9.0 |
) |
|
(9.0 |
) |
Strategic
reorganization and other charges |
0.1 |
|
|
0.1 |
|
|
5.6 |
|
|
5.8 |
|
Operating
income (loss) (1) |
$ |
73.0 |
|
|
$ |
(8.6 |
) |
|
$ |
(13.8 |
) |
|
$ |
50.6 |
|
|
|
|
|
|
|
|
|
Operating margin |
19.7 |
% |
|
(21.3 |
)% |
|
|
|
12.3 |
% |
|
|
|
|
|
|
|
|
Capital
expenditures |
$ |
11.1 |
|
|
$ |
3.0 |
|
|
$ |
0.3 |
|
|
$ |
14.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP performance measures to GAAP performance
measures: |
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
$ |
65.3 |
|
Income tax
benefit from remeasuring deferred income tax items |
|
|
|
|
|
|
(35.1 |
) |
Gain on sale of
idle property |
|
|
|
|
|
|
(9.0 |
) |
Strategic
reorganization and other charges |
|
|
|
|
|
|
5.8 |
|
Income
tax benefit of adjusting items |
|
|
|
|
|
|
0.9 |
|
Adjusted
net income |
|
|
|
|
|
|
$ |
27.9 |
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding |
|
|
|
|
|
|
159.6 |
|
|
|
|
|
|
|
|
|
Adjusted
net income per diluted share |
|
|
|
|
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
$ |
65.3 |
|
Income
tax expense (1) |
|
|
|
|
|
|
(25.6 |
) |
Interest
expense, net (1) |
|
|
|
|
|
|
10.4 |
|
Pension
costs other than service |
|
|
|
|
|
|
0.5 |
|
Operating
income (loss) |
$ |
73.0 |
|
|
$ |
(8.6 |
) |
|
$ |
(13.8 |
) |
|
50.6 |
|
Gain on sale of
idle property |
— |
|
|
— |
|
|
(9.0 |
) |
|
(9.0 |
) |
Strategic
reorganization and other charges |
0.1 |
|
|
0.1 |
|
|
5.6 |
|
|
5.8 |
|
Adjusted
operating income (loss) |
73.1 |
|
|
(8.5 |
) |
|
(17.2 |
) |
|
47.4 |
|
Pension
costs other than service |
— |
|
|
— |
|
|
(0.5 |
) |
|
(0.5 |
) |
Depreciation and amortization |
18.5 |
|
|
2.9 |
|
|
0.1 |
|
|
21.5 |
|
Adjusted EBITDA |
$ |
91.6 |
|
|
$ |
(5.6 |
) |
|
$ |
(17.6 |
) |
|
$ |
68.4 |
|
|
|
|
|
|
|
|
|
Adjusted
operating margin |
19.7 |
% |
|
(21.1 |
)% |
|
|
|
11.5 |
% |
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin |
24.7 |
% |
|
(13.9 |
)% |
|
|
|
16.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of free
cash flow to net cash used in operating activities: |
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
|
|
|
|
|
$ |
1.6 |
|
Less
capital expenditures |
|
|
|
|
|
|
(14.4 |
) |
Free cash
flow |
|
|
|
|
|
|
$ |
(12.8 |
) |
|
|
|
|
|
|
|
|
(1)
We do not allocate interest or income taxes to our segments. |
|
|
|
|
Mueller Water Products (NYSE:MWA)
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Mueller Water Products (NYSE:MWA)
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