Mueller Water Products · NYSE:MWA
Mueller Water Products — Q3 2020 Earnings Presentation
24 slides from Mueller Water Products's earnings presentation, Aug 6, 2020
Slide 1: Where Intelligence Meets Infrastructure
Where Intelligence Meets Infrastructure® Earnings Conference Call For The Third Quarter Ended June 30, 2020 August 6, 2020 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 under GAAP, the Company also provides non-GAAP information that management believes is useful to investors. These non-GAAP measures have limitations as analytical t
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation 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 the Company intends, expect
Slide 4: COVID-19 Update
COVID-19 Update • Took swift action implementing enhanced safety and hygiene processes to create safe and healthy working environments for our employees, customers, suppliers and communities, that are now part of our standard work procedures Top Priorities • Response team continues to provide leader
Slide 5: Third Quarter Highlights
Third Quarter Highlights • Realized a 16.7% decrease in consolidated net sales, which were better than expectations for a year-over-year decrease between 20% and 30% − Smaller-than-expected downturn in residential construction activity during the quarter − As expected, channel partners reacted quick
Slide 6: Consolidated GAAP Results
Consolidated GAAP Results • Net sales of $228.5 million decreased 16.7%, or $45.8 million, primarily due to reduced shipment volumes related to the pandemic seen across most of our product lines, partially offset by higher pricing Third Quarter 2020 2019 • Gross profit of $75.7 million decreased 22.
Slide 7: Consolidated Non-GAAP Results
Consolidated Non-GAAP Results • Adjusted operating income of $28.6 million decreased 45.0%, or $23.4 million Third Quarter 2020 2019 • Decrease is primarily due to lower volumes and higher expenses relating to the pandemic at both Infrastructure Adj. operating income $ 28.6 $ 52.0 and Technologies A
Slide 8: Infrastructure Results
Infrastructure Results • Net sales of $209.9 million decreased 16.1%, or $40.3 million, primarily due to reduced shipment Third Quarter 2020 2019 volumes related to the pandemic, partially offset by higher pricing Net sales $ 209.9 $ 250.2 • Adjusted operating income of $43.8 million Adj. operating
Slide 9: Technologies Results
Technologies Results • Net sales of $18.6 million decreased 22.8%, or $5.5 million, primarily due to lower volumes related to the Third Quarter 2020 2019 pandemic, partially offset by higher pricing Net sales $ 18.6 $ 24.1 • Much of Technologies business is project-related, so shelter-in-place order
Slide 10: Free Cash Flow
Free Cash Flow $100.0 • Net cash provided by operating activities for nine $80.0 months ended June 30, 2020 improved $60.0 $60.0 million to $77.8 million, primarily driven by improvements in working capital management $40.0 $77.8 and the timing of tax payments $ in millions $26.6 $20.0 $17.8 • Cash
Slide 11: Strong Balance Sheet and Ample Liquidity
Strong Balance Sheet and Ample Liquidity Believe We Are Well-Positioned to Face Future Challenges from COVID-19 Pandemic • Moody’s: Ba2 Corporate Rating, Ba3 Notes Rating, Stable Outlook Debt Maturities Credit Rating • S&P: BB Corporate and Notes Ratings, Stable Outlook $500 • $450 million of 5.5% S
Slide 12: Market Conditions Update
Market Conditions Update • Municipal end market held up relatively well during the third quarter • Utilities focused on maintaining essential services and completing existing projects, where possible End Markets in FY2019 • Level of repair and replacement and project activity varied greatly dependin
Slide 13: Fourth Quarter and Full-Year 2020 Outlook
Fourth Quarter and Full-Year 2020 Outlook • Strong bookings in June and July across entire Infrastructure segment, especially for shorter-cycle products (gate valves, hydrants and brass products); backlog for our specialty valve products increased 9% versus the prior year to $98 million • Although t
Slide 14: Takeaways
Takeaways • Recently announced the closure of our Woodland, Washington knife gate valve manufacturing operations, which will be relocated to our new facility in Kimball, Tennessee EXECUTING • Continue to maintain tight cost controls, and continue to evaluate INITIATIVES TO REDUCE OPERATING EXPENSES
Slide 15: Q&A
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Slide 16: Supplemental Data
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Slide 17: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Quarter ended June 30, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 209.9 $ 18.6 $ — $ 228.5 Gross profit $ 73.5 $ 2.2 $ — $ 75.7 Selling, ge
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) Quarter ended June 30, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 11.2 Income tax expense (1) 3.4 Interest expense, net (1) 6.1 Pension be
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) Quarter ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 250.2 $ 24.1 $ — $ 274.3 Gross profit $ 92.7 $ 4.5 $ — $ 97.2 Selling, ge
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) Quarter ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 33.7 Income tax expense (1) 8.9 Interest expense, net (1) 4.2 Walter Ene
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) Nine months ended June 30, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 643.0 $ 55.8 $ — $ 698.8 Gross profit $ 225.9 $ 8.4 $ — $ 234.3 Selli
Slide 22: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Nine months ended June 30, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 45.3 Income tax expense (1) 13.3 Interest expense, net (1) 19.5 Walt
Slide 23: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Nine months ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 636.3 $ 64.8 $ — $ 701.1 Gross profit $ 221.4 $ 10.7 $ — $ 232.1 Sell
Slide 24: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Nine months ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 23.6 Income tax expense (1) 6.9 Interest expense, net (1) 15.6 Walte
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