Mueller Water Products, Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 4, 2012

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8-K - Mueller Water Products, Inc.form8-kprojectforwardx2.htm
EX-99.1 - EXHIBIT 99.1 - Mueller Water Products, Inc.exhibit9912.htm
EX-10.21.3 - EXHIBIT 10.21.3 - Mueller Water Products, Inc.exhibit10213.htm


Mueller Water Products, Inc. and Subsidiaries
Condensed Consolidated Pro Forma Financial Statements - Unaudited

This unaudited pro forma financial information should be read in conjunction with the consolidated financial statements of Mueller Water Products, Inc. (the "Company") included in its annual report on Form 10-K for the year ended September 30, 2011 and its unaudited condensed consolidated financial statements included in its quarterly report on Form 10-Q for the quarter ended December 31, 2011.

On April 2, 2012, the Company completed the sale of its United States Pipe and Foundry Company, LLC and Fast Fabricators, LLC (together, "U.S. Pipe") business units to an affiliate of Wynnchurch Capital, Ltd. for a purchase price of $89.8 million in cash, plus $4.2 million for estimated net working capital and estimated net indebtedness adjustments subject to post-closing adjustments. Wynnchurch also agreed to reimburse the Company for certain liabilities, currently estimated at $10.2 million.

The following condensed consolidated pro forma financial statements have been prepared to give effect to the sale of U.S. Pipe as if the sale had occurred at earlier dates such that the assets, liabilities, sales and expenses of U.S. Pipe are not reflected in these financial statements. The resulting financial information of the continuing operations of the Company are not necessarily indicative of future results. Also, the amount of net proceeds that will ultimately be realized by the Company will likely change as will the loss that will ultimately be recognized by the Company from the sale of U.S. Pipe.




Mueller Water Products, Inc. and Subsidiaries
Condensed Consolidated Pro Forma Balance Sheet - Unaudited
December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
Pro forma adjustments
 
 
 
Previously
 
U.S. Pipe
 
Proceeds
 
 
 
reported
 
items
 
and other
 
Pro forma
 
(in millions)
Assets:
 
 
 
 
 
 
 
  Cash and cash equivalents
$
39.6

 
$
0.2

 
$
87.5

(a)
$
127.3

  Receivables, net
197.8

 
(75.7
)
 
—

 
122.1

  Inventories
250.6

 
(60.5
)
 
—

 
190.1

  Deferred income taxes
29.3

 
—

 
—

 
29.3

  Other current assets
56.7

 
(7.3
)
 
2.8

 (b)
52.2

    Total current assets
574.0

 
(143.3
)
 
90.3

 
521.0

  Property, plant and equipment, net
239.4

 
(98.3
)
 
—

 
141.1

  Identifiable intangible assets
603.3

 
(8.2
)
 
—

 
595.1

  Other noncurrent assets
30.3

 
(1.0
)
 
7.4

 (b)
36.7

    Total assets
$
1,447.0

 
$
(250.8
)
 
$
97.7

 
$
1,293.9

 
 
 
 
 
 
 
 
Liabilities and stockholders' equity:
 
 
 
 
 
 
 
  Current portion of long-term debt
$
0.9

 
$
—

 
$
—

 
$
0.9

  Accounts payable
97.2

 
(32.0
)
 
—

 
65.2

  Other current liabilities
74.8

 
(5.8
)
 
—

 
69.0

    Total current liabilities
172.9

 
(37.8
)
 
—

 
135.1

  Long-term debt
677.6

 
—

 
—

 
677.6

  Deferred income taxes
153.2

 
—

 
—

 
153.2

  Other noncurrent liabilities
75.8

 
—

 
—

 
75.8

    Total liabilities
1,079.5

 
(37.8
)
 
—

 
1,041.7

 
 
 
 
 
 
 
 
  Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Common stock
1.6

 
—

 
—

 
1.6

  Additional paid-in capital
1,591.8

 
—

 
—

 
1,591.8

  Accumulated deficit
(1,173.5
)
 
(213.0
)
 (c)
97.7

 (c)
(1,288.8
)
  Accumulated other comprehensive loss
(52.4
)
 
—

 
—

 
(52.4
)
    Total stockholders' equity
367.5

 
(213.0
)
 
97.7

 
252.2

    Total liabilities and stockholders' equity
$
1,447.0

 
$
(250.8
)
 
$
97.7

 
$
1,293.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Net proceeds, including estimated purchase price adjustments, selling and other expenses.
(b) Cost reimbursements due from Purchaser.
(c) Collectively, the estimated loss related to the sale of U.S. Pipe.




Mueller Water Products, Inc. and Subsidiaries
Condensed Consolidated Pro Forma Statement of Operations from Continuing Operations - Unaudited
Three Months Ended December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
Pro forma adjustments
 
 
 
Previously
 
U.S. Pipe
 
 
 
 
 
reported
 
items
 
Other
 
Pro forma
 
(in millions, except per share amounts)
 
 
 
 
 
 
 
 
Net sales
$
311.5

 
$
(96.1
)
 
—

 
$
215.4

Cost of sales
259.7

 
(97.1
)
 
—

 
162.6

Gross profit
51.8

 
1.0

 
—

 
52.8

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
  Selling, general and administrative
53.4

 
(6.9
)
 
(0.2
)
(b)
46.3

  Restructuring
1.3

 
(0.9
)
 
—

 
0.4

    Total operating expenses
54.7

 
(7.8
)
 
(0.2
)
 
46.7

 
 
 
 
 
 
 
 
Operating income (loss) from continuing operations
(2.9
)
 
8.8

 
0.2

 
6.1

 
 
 
 
 
 
 
 
Interest expense, net
15.7

 
(0.1
)
 
—

 
15.6

Income (loss) from continuing operations
 
 
 
 
 
 
 
 before income taxes
(18.6
)
 
8.9

 
0.2

 
(9.5
)
 
 
 
 
 
 
 
 
Income tax expense (benefit)
(6.7
)
 
3.0

(a)
—

(a)
(3.7
)
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
$
(11.9
)
 
$
5.9

 
$
0.2

 
$
(5.8
)
 
 
 
 
 
 
 
 
Weighted average shares outstanding
156.0

 
 
 
 
 
156.0

 
 
 
 
 
 
 
 
Loss from continuing operations per share
$
(0.08
)
 
 
 
 
 
$
(0.04
)
 
 
 
 
 
 
 
 
(a) Income taxes have been provided at the U.S. federal statutory rate of 35%.
(b) Corporate professional fees related to the sale of U.S. Pipe and items related to retained liabilities.
 




Mueller Water Products, Inc. and Subsidiaries
Condensed Consolidated Pro Forma Statement of Operations from Continuing Operations - Unaudited
Year Ended September 30, 2011
 
 
 
 
 
 
 
 
 
 
 
Pro forma adjustments
 
 
 
Previously
 
U.S. Pipe
 
 
 
 
 
reported
 
items
 
Other
 
Pro forma
 
(in millions, except per share amounts)
 
 
 
 
 
 
 
 
Net sales
$
1,339.2

 
$
(374.6
)
 
—

 
$
964.6

Cost of sales
1,105.1

 
(388.7
)
 
—

 
716.4

Gross profit
234.1

 
14.1

 
—

 
248.2

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
  Selling, general and administrative
219.9

 
(28.0
)
 
(1.0
)
 (b)
190.9

  Restructuring
7.5

 
(3.9
)
 
—

 
3.6

    Total operating expenses
227.4

 
(31.9
)
 
(1.0
)
 
194.5

 
 
 
 
 
 
 
 
Operating income from continuing operations
6.7

 
46.0

 
1.0

 
53.7

 
 
 
 
 
 
 
 
Interest expense, net
65.6

 
0.1

 
—

 
65.7

Income (loss) from continuing operations
 
 
 
 
 
 
 
 before income taxes
(58.9
)
 
45.9

 
1.0

 
(12.0
)
 
 
 
 
 
 
 
 
Income tax expense (benefit)
(20.8
)
 
16.1

 (a)
0.3

 (a)
(4.4
)
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
$
(38.1
)
 
$
29.8

 
$
0.7

 
$
(7.6
)
 
 
 
 
 
 
 
 
Weighted average shares outstanding
155.3

 
 
 
 
 
155.3

 
 
 
 
 
 
 
 
Loss from continuing operations per share
$
(0.25
)
 
 
 
 
 
$
(0.05
)
 
 
 
 
 
 
 
 
(a) Income taxes have been provided at the U.S. federal statutory rate of 35%.
(b) Corporate professional fees related to the sale of U.S. Pipe and items related to retained liabilities.




Mueller Water Products, Inc. and Subsidiaries
Condensed Consolidated Pro Forma Statement of Operations from Continuing Operations - Unaudited
Three Months Ended December 31, 2010
 
 
 
 
 
 
 
 
 
 
 
Pro forma adjustments
 
 
 
Previously
 
U.S. Pipe
 
 
 
 
 
reported
 
items
 
Other
 
Pro forma
 
(in millions, except per share amounts)
 
 
 
 
 
 
 
 
Net sales
$
287.6

 
$
(74.4
)
 
—

 
$
213.2

Cost of sales
238.0

 
(76.8
)
 
—

 
161.2

Gross profit
49.6

 
2.4

 
—

 
52.0

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
  Selling, general and administrative
52.0

 
(7.0
)
 
(0.6
)
 (b)
44.4

  Restructuring
1.9

 
(0.9
)
 
—

 
1.0

    Total operating expenses
53.9

 
(7.9
)
 
(0.6
)
 
45.4

 
 
 
 
 
 
 
 
Operating income (loss) from
 
 
 
 
 
 
 
 continuing operations
(4.3
)
 
10.3

 
0.6

 
6.6

 
 
 
 
 
 
 
 
Interest expense, net
15.9

 
—

 
—

 
15.9

Income (loss) from continuing operations
 
 
 
 
 
 
 
 before income taxes
(20.2
)
 
10.3

 
0.6

 
(9.3
)
 
 
 
 
 
 
 
 
Income tax expense (benefit)
(8.1
)
 
3.6

 (a)
0.2

 (a)
(4.3
)
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
$
(12.1
)
 
$
6.7

 
$
0.4

 
$
(5.0
)
 
 
 
 
 
 
 
 
Weighted average shares outstanding
154.9

 
 
 
 
 
154.9

 
 
 
 
 
 
 
 
Loss from continuing operations per share
$
(0.08
)
 
 
 
 
 
$
(0.03
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Income taxes have been provided at the U.S. federal statutory rate of 35%.
(b) Corporate professional fees related to the sale of U.S. Pipe and items related to retained liabilities.



Mueller Water Products, Inc. Reports