Mueller Water Products · NYSE:MWA
Mueller Water Products — Q1 2023 Earnings Presentation
21 slides from Mueller Water Products's earnings presentation, Feb 3, 2023
Slide 1: Where Intelligence Meets Infrastructure - Earnings Conference Call
Where Intelligence Meets Infrastructure® Earnings Conference Call 2023 First Quarter Ended December 31, 2022 February 3, 2023 These slides are not intended to be a stand-alone presentation, but are for use in conjunction with the earnings call
Slide 2: Non-GAAP Financial Measures
Non-GAAP Financial Measures In an effort to provide investors with additional information regarding the Company’s results as determined by accounting principles generally accepted in the United States (“GAAP”), the Company also provides non-GAAP information that management believes is useful to inve
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements that address activities, events or developments that the Company intends, expects, plans, projects, believes or a
Slide 4: First Quarter Highlights
First Quarter Highlights • Generated a double-digit increase in consolidated net sales (+15.6% y/y) − Benefited from past pricing actions taken to help offset inflationary pressures − Improved price realization was partially offset by modest decrease in overall volumes in the quarter − Although bras
Slide 5: Consolidated GAAP Results
Consolidated GAAP Results Gross Profit ($M) SG&A ($M) Operating Income ($M) Net Sales ($M) % of Net Sales % of Net Sales % of Net Sales +6.4% y/y +11.7 y/y +17.6% y/y +15.6% y/y -260 bps. -70 bps. +20 bps. $314.8 $93.2 $62.9 $87.6 $34.0 $272.3 $56.3 29.6% 20.0% $28.9 32.2% 20.7% 10.8% 10.6% Q1 FY202
Slide 6: Consolidated Non-GAAP Results
Consolidated Non-GAAP Results (1) Adj. Operating Income ($M) Adj. EBITDA ($M) Adj. Net Income per Share % of Net Sales % of Net Sales -3.2% y/y -6.9% y/y 0.0% y/y -190 bps. -340 bps. $31.3 $47.5 $0.13 $0.13 $30.3 $44.2 17.4% 11.5% 9.6% 14.0% Q1 FY2022 Q1 FY2023 Q1 FY2022 Q1 FY2023 Q1 FY2022 Q1 FY202
Slide 7: Water Flow Solutions Segment Results
Water Flow Solutions Segment Results Adj. Operating Income ($M) (1) Adj. EBITDA ($M) (1) Net Sales ($M) % of Net Sales % of Net Sales -22.7% y/y -17.6% y/y +6.9% y/y -560 bps. -570 bps. $165.6 $31.3 $154.9 $38.7 20.2% $24.2 $31.9 25.0% 14.6% 19.3% Q1 FY2022 Q1 FY2023 Q1 FY2022 Q1 FY2023 Q1 FY2022 Q1
Slide 8: Water Management Solutions Segment Results
Water Management Solutions Segment Results Adj. Operating Income ($M) (1) Adj. EBITDA ($M) (1) Net Sales ($M) % of Net Sales % of Net Sales +70.4% y/y +38.5% y/y +27.1% y/y +330 bps. +140 bps. $149.2 $26.6 $117.4 $19.6 $19.2 17.8% 13.1% $11.5 16.4% 9.8% Q1 FY2022 Q1 FY2023 Q1 FY2022 Q1 FY2023 Q1 FY2
Slide 9: Free Cash Flow
Free Cash Flow • Net cash used in operating activities for Q1 FY2023 was $6.5M compared with net cash provided by operating activities of $19.8M in prior year $25.0 $19.8 − Decrease was primarily due to an increase in inventories $20.0 − Average net working capital, using the 5-point method, as a pe
Slide 10: Balance Sheet and Liquidity
Balance Sheet and Liquidity Continue to have ample capacity to support our strategic priorities, including acquisitions • Moody’s: Ba1 Corporate Rating, Ba1 Notes Rating, Stable Outlook Debt Maturities Credit Rating • S&P: BB Corporate and Notes Ratings, Stable Outlook $500 • $450M of 4.0% Senior No
Slide 11: Key Updates: First Quarter Performance, End Markets and Full-Year 2023 Outlook
Key Updates: First Quarter Performance, End Markets and Full-Year 2023 Outlook
Slide 12: First Quarter Performance
First Quarter Performance • Continue to be pleased with price realization, which more than offset inflationary pressures for the fourth consecutive quarter • As expected, unfavorable manufacturing performance, primarily at foundries, partially offset benefits from higher pricing − Unfavorable manufa
Slide 13: End Markets
End Markets • Believe the municipal repair and replacement market remains resilient, helping partially offset the slowdown in residential construction activity • Municipal Repair and Replacement End Market − Remain excited about benefits of the federal infrastructure bill starting to take effect lat
Slide 14: Full-Year Fiscal 2023 Outlook
Full-Year Fiscal 2023 Outlook* • With product lead times and project timelines improving, anticipate backlog levels could normalize over the coming quarters depending on end market activity − Expect to get clearer sense of sell-through, channel inventory plans and order levels as we move into upcomi
Slide 15: Key Takeaways
Key Takeaways • Teams continue to focus on maintaining strong customer relationships while executing top priorities for the year − Achieving operational improvements − Delivering benefits from large domestic capital investments − Accelerating development and commercialization of new products − Gener
Slide 16: Q&A
Q&A
Slide 17: Supplemental Data
Supplemental Data
Slide 18: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 165.6 $ 149.2 $ — $ 314.8 Gross profit $ 46.
Slide 19: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2022 Water Management Water Flow Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 22.5 Income tax expense (1) 6.9 Interest ex
Slide 20: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2021 Water Flow Water Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 154.9 $ 117.4 $ — $ 272.3 Gross profit $ 52.
Slide 21: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2021 Water Management Water Flow Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 19.4 Income tax expense (1) 6.2 Interest ex
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