Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Mueller Water Products, Inc. | d236184d8k.htm |
 1
Oppenheimer
6
th
Annual Industrials Conference
September 27, 2011
Exhibit 99.1 |
 2
Non-GAAP Financial Measures
Non-GAAP Financial Measures
The Company presents adjusted income (loss) from operations, adjusted operating margin,
adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted
net income (loss) per share, free cash flow and net
debt as non-GAAP measures. Adjusted income (loss) from operations represents
income (loss) from operations excluding restructuring. This amount divided
by net sales is adjusted operating margin. Adjusted EBITDA represents
income (loss) from operations excluding restructuring, depreciation and amortization. This amount
divided by net sales is adjusted EBITDA margin. The Company presents adjusted
income (loss) from operations, adjusted operating margin, adjusted EBITDA and
adjusted EBITDA margin because these are measures management believes are
frequently used by securities analysts, investors and interested parties in the
evaluation of financial performance. Adjusted net income (loss)
and adjusted net income (loss) per share
exclude restructuring, certain costs from settled interest rate swap contracts, the
income tax effects of these excluded items and a tax adjustment for the
repatriation of earnings. These items are excluded because they are not
considered indicative of recurring operations. Free cash flow represents cash flow from operating activities
less capital expenditures. It is presented as a measurement of cash flow because
it is commonly used by the investment community. Net debt represents total
debt less cash and cash equivalents. Net debt is commonly used by the
investment community as a measure of indebtedness. These non-GAAP measures have limitations as
analytical tools, and securities analysts, investors and 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 accounting principles
generally accepted in the United States ("GAAP"). A
reconciliation of non-GAAP to GAAP results is included as an attachment to this presentation and has been
posted online at www.muellerwaterproducts.com.
|
 3
Safe Harbor Statement
Safe Harbor Statement
This presentation 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. Examples of
forward-looking statements include, but are not limited to, statements we
make regarding spending trends by municipalities on water infrastructure and the market reception of Mueller
Systems’
and Echologics’
products and services, and the impact of these factors on our businesses.
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, business, competitive, market and
regulatory conditions and the following:
Undue reliance should not be placed on any forward-looking statements. We do
not have any intention or obligation to update forward-looking statements,
except as required by law. •
the spending level for water and wastewater infrastructure;
•
the demand level of manufacturing and construction activity;
•
our ability to service our debt obligations; and
•
the other factors that are described in the section entitled “RISK
FACTORS” in Item 1A of our most recently
filed Annual Report on Form 10-K and in Part I, Item 1A of our quarterly report on
Form 10-Q for the quarter ended March 31, 2011.
|
 4
Leading North American provider of water
infrastructure and flow control products
and services
Investment Highlights
Leading brands in water infrastructure
Leveraging brands to expand intelligent water
technology offering for diagnostic and data
management
Low-cost manufacturing processes
Increasing investment needed in water
infrastructure industry
One of the largest installed bases in the U.S. |
 5
The largest publicly traded water infrastructure company in the United States
Our Business
•
$1.3B LTM net sales (as of June 30, 2011)
•
Portfolio includes:
•
Fire hydrants
•
Valves
•
Pipe fittings
•
Ductile iron pipe
•
Metering systems
•
Leak detection
•
Specified in 100 largest U.S. metropolitan markets
(1)
•
More than 75% of FY2010 net sales from products with
#1 or #2 position
(1)
Valves or hydrants
(2)
Based on management estimates
* Residential construction systems driven primarily by new community development
FY2010 Primary End Markets
(2)
Net Sales $1.3B |
 6
Ductile Iron
Pipe
Restrained Pipe
Joint
Joint
Restraints Joint Fittings
Broad Product Portfolio
$608
$69
$48
$117
SEGMENT NET SALES
PRODUCT
PORTFOLIO
ADJUSTED OPERATING
INCOME (LOSS)
(1)
$352
($46)
$19
($27)
$352
$31
$15
$45
Iron Gate
Valves
Butterfly, Ball
and Plug Valves
Fittings &
Couplings
Cast Iron
Fittings
Hangers &
Supports
Metering
Systems
Pipe Nipples
Hydrants
DEPRECIATION AND
AMORTIZATION
(2)
Est. 1857
Est. 1899
Est. 1999 (1850)
HISTORICAL ROOTS
ADJUSTED EBITDA
(1) (2)
Note: All statistics are actuals for LTM ended June 30, 2011
(1)
Segment operating income (loss) excludes corporate expenses of $30mm. Mueller Co.
excludes $1.2 mm of restructuring. U.S. Pipe excludes $4.2 mm of restructuring. Anvil excludes $1.6 mm of restructuring.
(2)
Segment depreciation and amortization excludes corporate depreciation of $0.6mm.
($ in millions) |
 7
Complete Water Transmission Solutions
Mueller Water Products
manufactures and
markets products and
services that are used in
the transmission,
distribution and
measurement of safe,
clean drinking water and
in water treatment
facilities. |
 8
* Company estimates based on internal analysis and information from trade associations
and our distributor networks, where available. |
 9
Strategy And Objectives
Capitalize on the large,
attractive and growing
water infrastructure
markets worldwide
Maintain leadership positions with
customers and end users
Broaden breadth and depth of
products and services
Continue to enhance operational
and organizational excellence
Expand internationally |
 10
Strategic Initiatives
Maintain leadership positions with customers and end users
Continue to enhance operational and organizational excellence
Broaden breadth and depth of products and services
Expand internationally
•
Leveraging the Mueller brand
•
Developing value-added products
and services
•
Strengthened balance sheet
•
Implemented Lean Six Sigma
•
Introduced first wireless mesh
agreement for water industry
•
Enhanced AMI system with
remote disconnect meter and customer portal
•
Export orders
•
Evaluating opportunities
•
Leveraging distribution network
•
Improving customer service levels
•
Consolidated plants
•
Automated DIP facility
•
Acquired leak detection and pipe
condition assessment services company |
 11
Our End Markets |
 12
Primary End Markets: 2006-2010
Source: Management estimates
*
Residential construction is driven primarily by new community development
Since 2006, our exposure to the residential construction
market has declined from roughly 40% to 5%. |
 13
Historical Housing Starts
Historical Housing Starts (1991 -
August 2011)
Seasonally Adjusted Annualized |
 14
Non-Residential Construction
Architecture Billings Index Trends
Source: IHS Global Insight
Data as of September 21, 2011
Non-Residential Construction Actual / Forecast
Data as of September 22, 2011
We continue to see signs that the non-residential market has stabilized
|
 15
Significant Market
Opportunities |
 16
Opportunity: Aging Water Infrastructure
“America’s drinking water systems
face an annual shortfall of at
least $11 billion
to replace aging
facilities that are near the end of
their useful lives and to comply
with existing and future federal
water regulations. This does not
account for growth in the demand
for drinking water over the next
20 years.”
2009 Report Card for America’s Infrastructure
American Society of Civil Engineers (ASCE) |
 17
The Market Opportunity Is Significant And Growing
Repair and Replacement Market
•
Aging water pipes need to be repaired/ replaced
•
Valves and hydrants typically replaced at same time as pipes
•
More than 36 states project water shortages between now and
2013
(1)
•
Up to 15% -
30% of treated potable water lost in leaky pipes
•
Emphasis on improving operational efficiencies
Funding and Spending
•
90% funded at local level
(3)
•
29% of water systems charge less than cost
(4)
•
63% of American voters willing to pay more to upgrade water
system
(5)
Source:
(1) EPA: WaterSense Statistics and Facts
(2) Global Water Intelligence Water Technology Markets 2010
(3) EPA Clean Water and Drinking Water Infrastructure Gap Analysis
(4) Government Accountability Office 2004 report on water infrastructure
(5) Americans on the U.S. Water Crisis, ITT
(6) EPA 2007 Drinking Water Needs Survey and Assessment
Future Drinking Water
Infrastructure Expenditure Needs
(6)
Area in which
Mueller Water
Products operates
20-YR Need for
Water Infrastructure = $335B
(2) |
 18
Aging
Water Infrastructure
Average life of 100 year and 75 year old pipe is converging, contributing
to accelerating need for pipe replacement.
(1) The EPA Clean Water and Drinking Water Infrastructure Gap Analysis 2002
|
 19
Increasing Federal Awareness of Funding Needs
•
At least 40 cities under consent decrees
—
Atlanta $4.0B
—
Washington, D.C. $2.6B
—
Baltimore City and county $1.7B
—
Kansas City $2.5B
—
Cincinnati $1.5B
•
1974/1996 Safe Drinking Water Act
•
2011 federal budget
—
$965 million for Drinking Water
State Revolving Funding (SRF)
—
Decline of $422 million from FY2010
Stronger EPA regulations should lead to increased investment
“New Jersey can maintain
a viable economy with a
sound environment only if
it ensures that its water
supply, wastewater and
stormwater infrastructure
is effectively maintained in
a manner that produces
the lowest life-cycle cost.”
The Clean Water Council of
New Jersey -
October 2010 |
 20
Funding Water Infrastructure Repair
Sources:
(1) Bureau of Labor Statistics
(2) AWWA State of the Industry Report 2011
(3) Black & Veatch 2009/2010 50 Largest Cities Water/Wastewater Rate Survey for
residential 7,500 gallons Bonds
24%
Other
5%
Other
Loans/Debt
6%
Operational
43%
Tap Fees
11%
Grants
4%
Utility-expected
sources of capital for
2011
(2)
Historical Water
Rates Compared to
Other Utilities
(1)
From 2007-2009, average annual
residential water rates increased about
10%
(3)
Long-term trends in consumer prices (CPI) for utilities (1913-2010)
State
Revolving
Loans
7% |
 21
Opportunities: Smart Metering and Pipe Condition Assessment
Smart Metering
•
Advanced Metering Infrastructure 20% of market -
$200 million today*
•
Forecasted to grow an average of 20% per year
through 2015*
•
Transition from one-way to two-way AMI Systems
Pipe Condition Assessment
•
Constrained municipal budgets
•
Greater attention on condition assessment
•
Help prioritize capital spending
•
Two-way mesh network
•
Enhanced AMI System
•
Mi.Hydrant
•
Mi.Data
•
420 Remote Disconnect Meter
•
Pioneered acoustic, non-invasive
leak detection and pipe condition
assessment
•
Proven technology
* Proprietary publishing for AWWA; Canada/Mex. Scott Report for AMI/AMR Dec.2010;
Management estimates |
 22
Actions & Business
Results |
 23
Management Actions/Initiatives
Objectives
Actions
Reduce costs and improve
operating leverage
•
Closed six plants since FY2006
•
Sold two non-core assets of Anvil
•
Reduced headcount by about 23% from September 30, 2008 to June 30,
2011 from approximately 6,300 to approximately 4,800
•
Took actions to lower labor costs
•
Implemented Lean Six Sigma and other manufacturing improvements (continuous
improvement)
•
Invested in new automated ductile iron pipe operation to lower costs
•
Consolidated distribution centers and smaller manufacturing facilities at Anvil
Manage working capital and
capital expenditures to generate
free cash flow
•
Capital spending decreased from FY2007/FY2008 levels
•
FY2009 capital spending of $39.7 million; FY2010 capital spending of $32.8
million •
Reduced inventory by $116.6 million in FY2009; $74.4 million reduction in FY2010
•
Reduced debt by $403 million from September 30, 2008 through June 30, 2011
•
Inventory
turns
have
improved
close
to
half
a
turn
at
the
end
of
June
2011
from
June 2010
Leverage Mueller brand to pursue
strategic growth opportunities
•
Acquired and invested in AMI technology
•
Acquired leak detection and pipe condition assessment business
•
Established first AMI wireless mesh agreement for water industry
•
Entered into advanced metering agreement with Landis+Gyr for electric meters
|
 24
a) Fiscal year end as of September 30th. Reflects inventory step-up
costs of $53.1 million in 2006; restructuring charges of $2.0 million in 2009; goodwill impairment charges of $818.7 million
in 2009; restructuring charges of $0.1 million in 2010
b)
Financial
results
for
2002,
2003
and
2004
are
calendar
year
while
subsequent
years
are
fiscal
years
ending
September
30th.
Excludes
$6.5
million
of
litigation
settlement
expenses
in
2003; environmental-related insurance settlement benefits of $1.9 million and
$5.1 million in 2004 and 2005, respectively. U.S. Pipe Chattanooga closing costs of $49.9 million in 2006;
restructuring charges of $18.3 million in 2008 and goodwill impairment charges of
$59.5 million and restructuring charges of $41.6 million in 2009; restructuring charges of $12.5 million
in 2010
c) Excludes inventory step-up costs of $17.3 million in 2006;
restructuring costs of $4.0 million in 2009; goodwill impairment charges of $92.7 million in 2009; restructuring charges of $0.5
million in 2010
History
of
Strong
Financial
Performance
(see
appendices
for
GAAP
reconciliation)
$509
$536
$618
$664
$804
$756
$718
$547
$613
$492
$465
$551
$598
$595
$537
$546
$411
$378
$393
$387
$431
$485
$535
$556
$595
$470
$347
2002
2003
2004
2005
2006
2007
2008
2009
2010
2002
2003
2004
2005
2006
2007
2008
2009
2010
2002
2003
2004
2005
2006
2007
2008
2009
2010
NET
SALES
($
in
millions)
(a)
(c)
(b)
$131
$139
$167
$190
$248
$207
$179
$101
$131
$44
$26
$42
$56
$57
$24
($34)
$48
$38
$47
$62
$73
$81
$94
$61
$38
25.7%
25.9%
27.1%
28.6%
30.8%
27.3%
24.9%
18.5%
21.3%
8.8%
3.3%
4.4%
7.0%
9.3%
10.7%
4.3%
(4.9%)
(9.0%)
12.3%
9.7%
10.8%
12.8%
13.6%
14.6%
15.8%
13.0%
11.0%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2002
2003
2004
2005
2006
2007
2008
2009
2010
2002
2003
2004
2005
2006
2007
2008
2009
2010
($20)
$16
ADJUSTED
EBITDA
&
ADJ.
EBITDA
MARGIN |
 25
Consolidated Non-GAAP Results
•
Adj. operating income improved year-over-year, although not as much as
expected •
Higher sales pricing covered increased raw material costs in all
three businesses
•
U.S. Pipe operating performance improved both year-over-year and
sequentially •
Anvil’s performance was particularly strong with 15.7% increase in net
sales and more than doubling of
operating income
•
Market reception of newer water-technology businesses is encouraging. Mueller
Systems experienced double digit sales growth year-over-year. Bookings
were up in both Mueller Systems and Echologics. $ in millions (except per share
amounts) 2011
2010
Net sales
$366.7
$375.9
Adj. income from operations
$15.6
$13.4
Adj. operating margin
4.3%
3.6%
Adj. net income (loss) per share
$0.00
($0.01)
Adj. EBITDA
$35.9
$34.5
Adj. EBITDA margin
9.8%
9.2%
Third Quarter Fiscal
FY 3Q11 results exclude restructuring costs of $1.7 million, $1.0 million net of
tax; and interest rate swap costs of $2.1 million, $1.3 million net of tax. FY
3Q10 results exclude restructuring costs of $0.9 million, $0.5 million net of tax; and $2.2 million tax expense on the repatriation of Canadian earnings
. |
 26
Debt Structure
•
FY 2010 recapitalization provided a long-term
capital structure
•
Extended maturities with no significant required
principal payments before 2015
•
Locked in long-term capital at attractive rates
•
Preserved deleveraging capability
•
Expect greater operational flexibility
•
Eliminated financial maintenance covenants with
excess availability at the greater of $34 million or
12.5% of facility amount
•
More than $174 million of excess availability at
June 30, 2011
•
Reduced limitations on business operations
including acquisitions, investments, restricted
payments and divestitures
New structure:
•$420 million 7.375% Senior Subordinated Notes due 2017
•$225 million 8.75
% Senior Unsecured Notes due 2020
•$275 million ABL Revolver Credit Facility due 2015
|
 27
Key Financial Metrics
$37
$115
$94
$91
$30
$0
$20
$40
$60
$80
$100
$120
$140
FY2006
FY2007*
FY2008
FY2009**
FY2010***
Free Cash Flow
($ in millions)
$1,549
$1,127
$1,101
$1,096
$740
$692
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Mar-2006
FY2006
FY2007*
FY2008
FY2009
FY2010
Total Debt
($ in millions)
$71
$88
$88
$40
$33
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
FY2006
FY2007
FY2008
FY2009
FY2010
Capital Expenditures
($ in millions)
* FY2007 results exclude $48.1 million of debt restructuring activities
** FY2009 results include $6.3 million of cash used to settle certain interest rate
swap contracts. *** FY2010 results include $18.3 million of cash used to
settle certain interest rate swap contracts. $73 million free cash flow average
over last five years Debt has declined $857 million from 2006
|
 28
Why Invest in MWA?
Water industry
has fundamentally strong long-term dynamics
•
Driven by new and upgraded infrastructure
•
Limited number of suppliers to end markets
Strong
competitive
position
•
Leading brand positions with large installed base
•
Leading municipal specification positions
•
Comprehensive distribution network
•
Low-cost manufacturing operations
Operating
leverage
when
volumes
improve
•
Recovery of residential market
•
Increased municipal spending
•
Operating excellence initiatives
Leveraging
strengths
in
the
evolving
market
•
Expand smart metering
•
Expand diagnostic offerings (leak detection and pipe condition assessment)
•
Develop intelligent water technology solutions
•
Strategic acquisitions/partnerships |
 29
Supplemental Data |
 30
Segment Results and Reconciliation of Non-GAAP to GAAP
Performance Measures
(in millions, except per share amounts)
Three months ended June 30, 2011
Mueller Co.
U.S. Pipe
Anvil
Corporate
Total
GAAP results:
Net sales
165.8
$
107.1
$
93.8
$
-
$
366.7
$
Gross profit (loss)
46.7
$
(2.8)
$
26.6
$
(0.2)
$
70.3
$
Selling, general and administrative expenses
23.9
6.6
17.0
7.2
54.7
Restructuring
0.2
1.4
0.1
-
1.7
Income (loss) from operations
22.6
$
(10.8)
$
9.5
$
(7.4)
$
13.9
Interest expense, net
16.8
Income tax benefit
(0.2)
Net loss
(2.7)
$
Net loss per diluted share
(0.02)
$
Capital expenditures
4.1
$
1.8
$
1.8
$
-
$
7.7
$
Non-GAAP results:
Adjusted income (loss) from operations and EBITDA:
Income (loss) from operations
22.6
$
(10.8)
$
9.5
$
(7.4)
$
13.9
$
Restructuring
0.2
1.4
0.1
-
1.7
Adjusted income (loss) from operations
22.8
(9.4)
9.6
(7.4)
15.6
Depreciation and amortization
11.8
4.6
3.7
0.2
20.3
Adjusted EBITDA
34.6
$
(4.8)
$
13.3
$
(7.2)
$
35.9
$
Adjusted operating margin
13.8%
-8.8%
10.2%
-
4.3%
Adjusted EBITDA margin
20.9%
-4.5%
14.2%
-
9.8%
Adjusted net loss:
Net loss
(2.7)
$
Restructuring, net of tax
1.0
Interest rate swap settlement costs, net of tax
1.3
Adjusted net loss
(0.4)
$
Adjusted net loss per diluted share
-
$
Free cash flow:
Net cash provided by operating activities
12.1
$
Capital expenditures
(7.7)
Free cash flow
4.4
$
Net debt (end of period):
Current portion of long-term debt
0.9
$
Long-term debt
692.1
Total debt
693.0
Less cash and cash equivalents
(45.8)
Net debt
647.2
$
|
 31
Segment Results and Reconciliation of Non-GAAP to GAAP
Performance Measures
(in millions, except per share amounts)
Three months ended June 30, 2010
Mueller Co.
U.S. Pipe
Anvil
Corporate
Total
GAAP results:
Net sales
174.6
$
120.2
$
81.1
$
-
$
375.9
$
Gross profit (loss)
52.1
$
(2.7)
$
21.1
$
0.1
$
70.6
$
Selling, general and administrative expenses
23.3
7.7
16.6
9.6
57.2
Restructuring
-
0.9
-
-
0.9
Income (loss) from operations
28.8
$
(11.3)
$
4.5
$
(9.5)
$
12.5
Interest expense, net
15.8
Income tax expense
0.5
Net loss
(3.8)
$
Net loss per diluted share
(0.02)
$
Capital expenditures
2.7
$
2.1
$
2.0
$
-
$
6.8
$
Non-GAAP results:
Adjusted income (loss) from operations and EBITDA:
Income (loss) from operations
28.8
$
(11.3)
$
4.5
$
(9.5)
$
12.5
$
Restructuring
-
0.9
-
-
0.9
Adjusted income (loss) from operations
28.8
(10.4)
4.5
(9.5)
13.4
Depreciation and amortization
12.3
4.6
3.9
0.3
21.1
Adjusted EBITDA
41.1
$
(5.8)
$
8.4
$
(9.2)
$
34.5
$
Adjusted operating margin
16.5%
-8.7%
5.5%
-
3.6%
Adjusted EBITDA margin
23.5%
-4.8%
10.4%
-
9.2%
Adjusted net loss:
Net loss
(3.8)
$
Tax on repatriation on Canadian earnings
2.2
Restructuring, net of tax
0.5
Adjusted net loss
(1.1)
$
Adjusted net loss per diluted share
(0.01)
$
Free cash flow:
Net cash used in operating activities
(8.6)
$
Capital expenditures
(6.8)
Free cash flow
(15.4)
$
Net debt (end of period):
Current portion of long-term debt
10.5
$
Long-term debt
682.2
Total debt
692.7
Less cash and cash equivalents
(77.1)
Net debt
615.6
$
|
 32
Segment Results and Reconciliation of Non-GAAP to GAAP
Performance Measures
(in millions, except per share amounts)
Nine months ended June 30, 2011
Mueller Co.
U.S. Pipe
Anvil
Corporate
Total
GAAP results:
Net sales
444.5
$
257.3
$
263.8
$
-
$
965.6
$
Gross profit (loss)
109.7
$
(13.3)
$
73.4
$
0.1
$
169.9
$
Selling, general and administrative expenses
67.6
21.2
50.4
22.3
161.5
Restructuring
1.2
3.3
1.2
-
5.7
Income (loss) from operations
40.9
$
(37.8)
$
21.8
$
(22.2)
$
2.7
Interest expense, net
49.0
Income tax benefit
(17.8)
Net loss
(28.5)
$
Net loss per diluted share
(0.18)
$
Capital expenditures
11.0
$
6.0
$
4.4
$
0.5
$
21.9
$
Non-GAAP results:
Adjusted income (loss) from operations and EBITDA:
Income (loss) from operations
40.9
$
(37.8)
$
21.8
$
(22.2)
$
2.7
$
Restructuring
1.2
3.3
1.2
-
5.7
Adjusted income (loss) from operations
42.1
(34.5)
23.0
(22.2)
8.4
Depreciation and amortization
35.7
13.8
10.9
0.6
61.0
Adjusted EBITDA
77.8
$
(20.7)
$
33.9
$
(21.6)
$
69.4
$
Adjusted operating margin
9.5%
-13.4%
8.7%
-
0.9%
Adjusted EBITDA margin
17.5%
-8.0%
12.9%
-
7.2%
Adjusted net loss:
Net loss
(28.5)
$
Interest rate swap settlement costs, net of tax
3.7
Restructuring, net of tax
3.5
Adjusted net loss
(21.3)
$
Adjusted net loss per diluted share
(0.14)
$
Free cash flow:
Net cash used in operating activities
(2.7)
$
Capital expenditures
(21.9)
Free cash flow
(24.6)
$
Net debt (end of period):
Current portion of long-term debt
0.9
$
Long-term debt
692.1
Total debt
693.0
Less cash and cash equivalents
(45.8)
Net debt
647.2
$
|
 33
Segment Results and Reconciliation of Non-GAAP to GAAP
Performance Measures
(in millions, except per share amounts)
Nine months ended June 30, 2010
Mueller Co.
U.S. Pipe
Anvil
Corporate
Total
GAAP results:
Net sales
449.1
$
282.9
$
258.8
$
-
$
990.8
$
Gross profit (loss)
121.2
$
(19.6)
$
63.0
$
0.1
$
164.7
$
Selling, general and administrative expenses
66.7
22.3
48.0
26.0
163.0
Restructuring
0.1
11.6
0.1
-
11.8
Income (loss) from operations
54.4
$
(53.5)
$
14.9
$
(25.9)
$
(10.1)
Interest expense, net
47.4
Loss on early extinguishment of debt
0.5
Income tax benefit
(19.8)
Net loss
(38.2)
$
Net loss per diluted share
(0.25)
$
Capital expenditures
9.8
$
7.4
$
4.1
$
0.1
$
21.4
$
Non-GAAP results:
Adjusted income (loss) from operations and EBITDA:
Income (loss) from operations
54.4
$
(53.5)
$
14.9
$
(25.9)
$
(10.1)
$
Restructuring
0.1
11.6
0.1
-
11.8
Adjusted income (loss) from operations
54.5
(41.9)
15.0
(25.9)
1.7
Depreciation and amortization
37.2
14.0
11.5
0.6
63.3
Adjusted EBITDA
91.7
$
(27.9)
$
26.5
$
(25.3)
$
65.0
$
Adjusted operating margin
12.1%
-14.8%
5.8%
-
0.2%
Adjusted EBITDA margin
20.4%
-9.9%
10.2%
-
6.6%
Adjusted net loss
Net loss
(38.2)
$
Restructuring, net of tax
7.1
Tax on repatriation on Canadian earnings
2.2
Interest rate swap settlement costs, net of
tax (0.7)
Loss on early extinguishment of debt, net of tax
0.3
Adjusted net loss
(29.3)
$
Adjusted net loss per diluted share
(0.19)
$
Free cash flow:
Net cash provided by operating activities
35.7
$
Capital expenditures
(21.4)
Free cash flow
14.3
$
Net debt (end of period):
Current portion of long-term debt
10.5
$
Long-term debt
682.2
Total debt
692.7
Less cash and cash equivalents
(77.1)
Net debt
615.6
$
|
 34
Segment Results and Reconciliation of Non-GAAP to GAAP
Performance Measures
(in millions, except per share amounts)
Year ended September 30, 2010
Mueller Co.
U.S. Pipe
Anvil
Corporate
Total
GAAP results:
Net sales
612.8
$
377.8
$
346.9
$
-
$
1,337.5
$
Gross profit (loss)
170.3
$
(22.7)
$
88.8
$
-
$
236.4
$
Selling, general and administrative expenses
89.2
30.5
66.2
33.4
219.3
Restructuring
0.1
12.5
0.5
-
13.1
Income (loss) from operations
81.0
$
(65.7)
$
22.1
$
(33.4)
$
4.0
Interest expense, net
68.0
Loss on early extinguishment of debt
4.6
Income tax benefit
(23.4)
Net loss
(45.2)
$
Net loss per diluted share
(0.29)
$
Capital expenditures
15.6
$
11.0
$
6.0
$
0.2
$
32.8
$
Non-GAAP results:
Adjusted income (loss) from operations and EBITDA:
Income (loss) from operations
81.0
$
(65.7)
$
22.1
$
(33.4)
$
4.0
$
Restructuring
0.1
12.5
0.5
-
13.1
Adjusted income (loss) from operations
81.1
(53.2)
22.6
(33.4)
17.1
Depreciation and amortization
49.7
18.9
15.4
0.6
84.6
Adjusted EBITDA
130.8
$
(34.3)
$
38.0
$
(32.8)
$
101.7
$
Adjusted net loss:
Net loss
(45.2)
$
Restructuring, net of tax
7.9
Interest rate swap settlement costs, net of tax
4.8
Loss on early extinguishment of debt, net of tax
2.8
Tax on repatriation on Canadian earnings
2.2
Adjusted net loss
(27.5)
$
Adjusted net loss per diluted share
(0.18)
$
Free cash flow:
Net cash provided by operating activities
63.0
$
Capital expenditures
(32.8)
Free cash flow
30.2
$
Net debt (end of period):
Current portion of long-term debt
0.7
$
Long-term debt
691.5
Total debt
692.2
Less cash and cash equivalents
(83.7)
Net debt
608.5
$
|
 35
Segment Results and Reconciliation of Non-GAAP to GAAP
Performance Measures
(in millions, except per share amounts)
Year ended September 30, 2009
Mueller Co.
U.S. Pipe
Anvil
Corporate
Total
GAAP results:
Net sales
547.1
$
410.9
$
469.9
$
-
$
1,427.9
$
Gross profit (loss)
134.3
$
(5.7)
$
128.2
$
0.1
$
256.9
$
Selling, general and administrative expenses
84.2
35.6
84.9
34.4
239.1
Impairment and restructuring
820.7
101.1
96.7
0.2
1,018.7
Loss from operations
(770.6)
$
(142.4)
$
(53.4)
$
(34.5)
$
(1,000.9)
Interest expense, net
78.3
Loss on early extinguishment of debt
3.8
Income tax benefit
(86.3)
Net loss
(996.7)
$
Net loss per diluted share
(8.55)
$
Capital expenditures
16.2
$
11.2
$
11.9
$
0.4
$
39.7
$
Non-GAAP results:
Adjusted income (loss) from operations and EBITDA:
Loss from operations
(770.6)
$
(142.4)
$
(53.4)
$
(34.5)
$
(1,000.9)
$
Impairment and restructuring
820.7
101.1
96.7
0.2
1,018.7
Adjusted income (loss) from operations
50.1
(41.3)
43.3
(34.3)
17.8
Depreciation and amortization
50.9
21.1
17.6
0.6
90.2
Adjusted EBITDA
101.0
$
(20.2)
$
60.9
$
(33.7)
$
108.0
$
Adjusted net loss
Net loss
(996.7)
$
Impairment and restructuring, net of tax
954.9
Interest rate swap settlement costs, net of tax
3.8
Loss on early extinguishment of debt, net of tax
2.3
Adjusted net loss
(35.7)
$
Adjusted net loss per diluted share
(0.31)
$
Free cash flow:
Net cash provided by operating activities
130.5
$
Capital expenditures
(39.7)
Free cash flow
90.8
$
Net debt (end of period):
Current portion of long-term debt
11.7
$
Long-term debt
728.5
Total debt
740.2
Less cash and cash equivalents
(61.5)
Net debt
678.7
$
|
 36
Questions |