Mueller Water Products · NYSE:MWA
Mueller Water Products — Q2 2020 Earnings Presentation
24 slides from Mueller Water Products's earnings presentation, May 5, 2020
Slide 1: Where Intelligence Meets Infrastructure
Where Intelligence Meets Infrastructure® Earnings Conference Call For The Second Quarter Ended March 31, 2020 May 5, 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 • COVID-19 response team utilizing daily communication to share information and make quick decisions • Eliminated non-essential travel for all employees and executed remote work procedures Employees • Enhanced procedures for disinfection including reinforcing hand washing at all faci
Slide 5: Second Quarter Highlights
Second Quarter Highlights • Generated strong consolidated net sales growth of 10.1% driven by increased shipment volumes across most of our product lines and pricing • Significant sequential improvement versus the 3.1% organic net sales growth in the first quarter of this year • Higher volumes were
Slide 6: Mueller Water Products in Much Stronger Position
Mueller Water Products in Much Stronger Position • Impressive longevity, working with our customers for over a century to ensure that they have the vital products and services they need to deliver clean, safe drinking water • Strong balance sheet with ample liquidity with net debt leverage 1.6 times
Slide 7: Consolidated GAAP Results
Consolidated GAAP Results • Net sales increased 10.1%, or $23.7 million, to $257.7 million primarily driven by increased shipment volumes across most of our product lines at Infrastructure and higher pricing Second Quarter 2020 2019 • Gross profit increased 15.0%, or $11.2 million, to $86.0 million,
Slide 8: Consolidated Non-GAAP Results
Consolidated Non-GAAP Results • Adjusted operating income increased 17.3%, or $5.4 million, to $36.7 million Second Quarter 2020 2019 • Increase at Infrastructure partially offset by a decrease in adjusted operating income at Technologies and higher Adj. operating income $ 36.7 $ 31.3 corporate SG&A
Slide 9: Infrastructure Results
Infrastructure Results • Net sales increased 12.2%, or $26.2 million, to $240.3 million in the quarter primarily due to Second Quarter 2020 2019 increased shipment volumes and higher pricing Net sales $ 240.3 $ 214.1 • Increased volumes driven by many core product categories including iron gate valv
Slide 10: Technologies Results
Technologies Results • Net sales decreased $2.5 million to $17.4 million in the quarter, driven by lower volumes at Second Quarter 2020 2019 Metrology, which were partially offset by higher volumes at Echologics Net sales $ 17.4 $ 19.9 • Adjusted operating loss was $4.7 million as Adj. operating los
Slide 11: Free Cash Flow
Free Cash Flow $0.0 ($3.0) • Cash used in operating activities for six month period ended March 31, 2020 improved $26.1 ($10.0) ($37.3) ($29.1) million to $3.0 million as compared with $29.1 ($20.0) million of cash used in the prior year • Cash used in operating activities includes the $ in millions
Slide 12: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity • Moody’s: Ba2 Corporate Rating, Ba3 Notes Rating, Stable Outlook Credit Rating • S&P: BB Corporate and Notes Ratings, Stable Outlook • $450M of 5.5% Senior Unsecured Notes* Debt • Asset based lending agreement (“ABL”) provides up to $175M revolving credit facility
Slide 13: Market Conditions Update
Market Conditions Update • Economic and operational effects of shelter-in-place orders and social distancing being felt to varying degrees End Markets in FY2019 • Shifted priorities leading to delays for some ongoing projects and postponement of Municipal new projects <10% Water Repair • Expect to s
Slide 14: Adapting to COVID-19
Adapting to COVID-19 • Assuming material slowdown in our end markets for the second half of our fiscal year, especially residential construction • Based on our current outlook, currently expect our third quarter to be the most challenging quarter of this year • With April orders approximately 25% lo
Slide 15: Q&A
SS = ee ae eS ~~ Q&A = Se TTT wT LH Mueller MUELLER) "=. Products
Slide 16: Supplemental Data
Supplemental Data TOIEAPSGMG CaNtcd Products
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 March 31, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 240.3 $ 17.4 $ — $ 257.7 Gross profit $ 84.2 $ 1.8 $ — $ 86.0 Selling, g
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 March 31, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 23.8 Income tax expense (1) 6.8 Interest expense, net (1) 6.0 Pension b
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 March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 214.1 $ 19.9 $ — $ 234.0 Gross profit $ 71.9 $ 2.9 $ — $ 74.8 Selling, g
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 March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 10.9 Income tax expense (1) 3.9 Interest expense, net (1) 5.9 Walter En
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) Six months ended March 31, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 433.1 $ 37.2 $ — $ 470.3 Gross profit 152.4 6.2 — 158.6 Selling, gene
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) Six months ended March 31, 2020 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 34.1 Income tax expense (1) — Interest expense, net (1) 9.9 Walter E
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) Six months ended March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 386.1 $ 40.7 $ — $ 426.8 Gross profit $ 128.7 $ 6.2 $ — $ 134.9 Selli
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) Six months ended March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net loss $ (10.1) Income tax expense (1) (2.0) Interest expense, net (1) 11.4 Wal
Mueller Water Products — Q2 2020 Earnings Presentation on 6ix