Mueller Water Products · NYSE:MWA
Mueller Water Products — Q4 2023 Earnings Presentation
24 slides from Mueller Water Products's earnings presentation, Dec 14, 2023
Slide 1: Where Intelligence Meets Infrastructure - Earnings Conference Call
Where Intelligence Meets Infrastructure® Earnings Conference Call 2023 Fourth Quarter September 30, 2023 December 14, 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: Fourth Quarter and Full Year Highlights
Fourth Quarter and Full Year Highlights • Executed well to finish the year despite a challenging external environment, and Q4 Fiscal 2023 net sales exceeded expectations Performance vs. Prior Year • Experienced a mid-teens year-over-year decrease in volumes due to ongoing channel and customer invent
Slide 5: Update on Cybersecurity Incident Announced on October 28, 2023
Update on Cybersecurity Incident Announced on October 28, 2023 • Team members across the organization have worked tirelessly to support customers and restore operations • Largely restored impacted applications and systems, with the help of leading third-party cybersecurity specialists • All of our f
Slide 6: Considerations for 2024
Considerations for 2024 • Focused on delivering benefits from strategic capital investments in specialty and large gate valves, and service brass products, which are poised to benefit from the increased federal infrastructure funding beyond fiscal 2024 • Continued to make progress on ramp-up of new
Slide 7: Consolidated GAAP Results (Q4 Fiscal 2023)
Consolidated GAAP Results (Q4 Fiscal 2023) Gross Profit ($M) SG&A ($M) Operating Income ($M) Net Sales ($M) % of Net Sales % of Net Sales % of Net Sales +3.3% y/y -14.8% y/y +114.7% y/y -9.1% y/y +350 bps. -120 bps. +480 bps. $331.4 $63.6 $301.4 $85.6 $88.4 $24.9 $54.2 25.8% 29.3% 19.2% 8.3% 18.0% $
Slide 8: Consolidated Non-GAAP Results (Q4 Fiscal 2023)
Consolidated Non-GAAP Results (Q4 Fiscal 2023) (1) Adj. Operating Income ($M) Adj. EBITDA ($M) Adj. Net Income per Diluted Share % of Net Sales % of Net Sales +81.4% y/y +43.5% y/y +90.0% y/y +660 bps. +680 bps. $55.4 $0.19 $39.9 13.2% 18.4% $38.6 $22.0 $0.10 11.6% 6.6% Q4 FY2022 Q4 FY2023 Q4 FY2022
Slide 9: Water Flow Solutions Segment Results (Q4 Fiscal 2023)
Water Flow Solutions Segment Results (Q4 Fiscal 2023) Adj. Operating Income ($M) (1) Adj. EBITDA ($M) (1) Net Sales ($M) % of Net Sales % of Net Sales +34.1% y/y +30.7% y/y -10.0% y/y +560 bps. +710 bps. $179.4 $27.5 $36.6 $161.5 $20.5 17.0% $28.0 22.7% 11.4% 15.6% Q4 FY2022 Q4 FY2023 Q4 FY2022 Q4 F
Slide 10: Water Management Solutions Segment Results (Q4 Fiscal 2023)
Water Management Solutions Segment Results (Q4 Fiscal 2023) Adj. Operating Income ($M) (1) Adj. EBITDA ($M) (1) Net Sales ($M) % of Net Sales % of Net Sales +58.7% y/y +32.9% y/y -8.0% y/y +660 bps. +640 bps. $152.0 $139.9 $21.9 $29.1 15.7% $21.9 20.8% $13.8 14.4% 9.1% Q4 FY2022 Q4 FY2023 Q4 FY2022
Slide 11: Free Cash Flow (Fiscal 2023)
Free Cash Flow (Fiscal 2023) • Increased net cash provided by operating activities for fiscal 2023 by $56.7M to $109.0M compared with $109.0 $110.0 prior year $100.0 $90.0 − Increase driven by improvements in working capital $47.6 $80.0 − Inventories decreased $14.8M in Q4 to $297.9M, which $70.0 is
Slide 12: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity 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 Notes (matur
Slide 13: Fiscal 2024 Outlook
Fiscal 2024 Outlook (1) • Anticipate channel and customer inventory levels will be substantially normalized by the end of Q1FY24 • Consolidated backlog declined about $400M during the year and was approximately $326M at end of fiscal 2023, primarily due to our short-cycle products, mainly iron gate
Slide 14: Closing Comments
Closing Comments • Strong foundation built on talented and committed employees, industry-leading brands, and deep distribution channel and end customer relationships • Broad portfolio of products and solutions allows us to play a critical role in addressing the challenges and opportunities facing th
Slide 15: Q&A
Q&A
Slide 16: Supplemental Data
Supplemental Data
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 September 30, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 161.5 $ 139.9 $ — $ 301.4 Gross profit (1) $ 47.
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 September 30, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 17.2 Income tax expense (3) 3.5 Interest expens
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 September 30, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 179.4 $ 152.0 $ — $ 331.4 Gross profit $ 42.5 $
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 September 30, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 7.1 Income tax expense (2) 1.6 Interest expense
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) Year ended September 30, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 634.4 $ 641.3 $ — $ 1,275.7 Gross profit (1) $ 164.
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) Year ended September 30, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 85.5 Income tax expense (3) 23.5 Interest expense,
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) Year ended September 30, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 714.1 $ 533.3 $ — $ 1,247.4 Gross profit (1) $ 212.
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) Year ended September 30, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 76.6 Income tax expense (3) 22.0 Interest expense,
Mueller Water Products — Q4 2023 Earnings Presentation on 6ix