Mueller Water Products · NYSE:MWA
Mueller Water Products — Brean Murray, Carret & Co. Global Infrastructure Resources Conference 2011
34 slides from Mueller Water Products's conference presentation, Jun 6, 2011
Slide 1: Brean Murray, Carret & Co. Global Infrastructure Resources Conference
Exhibit 99.1 Exhibit Brean 2011 Infrastructure June 1 6, Global Murray 2011 99.1 Resources Conference Carret & & Co.
Slide 2: Non-GAAP Financial Measures
Non-GAAP The share, represents Adjusted items. presented investment adjusted measures A 2 reconciliation Company free These EBITDA net EBITDA net in as adjusted cash community Financial isolation income aitems income measurement presents flow ofmargin are margin non-GAAP income (loss) and (loss) or
Slide 3: Safe Harbor Statement
Safeother This address statements higher assessments materially regulatory our the Undue 3 spending demand ability Harbor presentation pricing reliance 3activities, factors from conditions to include, level made Statement level service and should those that of contains events by for our but manufact
Slide 4: Investment Highlights
Investment Increasing One Leading Leveraging Low-cost 4 of the North brands manufacturing investment largest Highlights brands American in installed water to expand needed infrastructure processes provider bases intelligent in water inofthe water infrastructure U.S. water infrastructure technology i
Slide 5: Our Business and Portfolio
•Our The Valves Based * 5 Valves $1.3B Portfolio Fire Pipe Ductile Metering Leak Specified More largest Business hydrants fittings on detection or than Residential LTM iron management hydrants includes: systems in publicly 75% net pipesales 100 oflargest construction FY2010 traded Net(as estimates S
Slide 6: Broad Product Portfolio and Historical Segment Results
Broad ($ HISTORICAL SEGMENT ADJUSTED Ductile Restrained Hydrants Butterfly, PORTFOLIO Note: Segment restructuring. 6 in millions) All Product Iron operating depreciation Iron statistics Ball Pipe NET EBITDA Gate Metering Portfolio ROOTS SALES are income Pipe and actuals (1) tJoint Joint t$617 (2) am
Slide 7: Complete Water Products and Solutions
Complete Mueller manufactures markets services the distribution monitoring drinking water 7 facilities. transmission, treatment Water products that water Water of and are and safe, Products and used Transmission and in clean in Solutions
Slide 8: Water Infrastructure Landscape
Water Infrastructure Landscape * Company estimates based on internal analysis and information from trade associations and our distributor networks, where available. 8
Slide 9: Strategy and Objectives
Strategyinternationally Maintain customers Continue Capitalize Expand 9 And leadership toon and enhance Objectives the endlarge, users positions operational and organizational with excellence attractive and growing water infrastructure markets worldwide Broaden breadth and depth of products and serv
Slide 10: Our End Markets
Our End Markets 10
Slide 11: Primary End Markets
Primary Since Source: *Residential 11 2006, Management Endour construction Markets: exposure estimates 2006-2010 to is driven the residential primarilyconstruction by new community market has development declined from roughly 40% to 5%.
Slide 12: Historical Housing Starts
Historical 2,400 1,650 (thou Bottom 1,150 April 900 91—- 400 650 12 1,400 2009 2,150 sands) 92—93—94—95—96 of Housing prior –1,410 1,900 1991 Lowest down Units –Starts 2011 starts cycle (1991—April Average (477) (798) 97—-since 98—99 Census 2011) 00—01—- Seasonally Bureau began 02—03 Adjusted keepin
Slide 13: Non-Residential Construction Trends
Noncontinue Source: We 13 -Residential IHS Global to see Construction signs Insight thatData the Actual as non-residential of /May Forecast 18, 2011 Architecture market has stabilized Billings Index Trends
Slide 14: A Significant Market Opportunity
A Significant Market Opportunity 14
Slide 15: Aging Infrastructure
Aging “America’s face least facilities their with water account for 20 2009 American 15 years.” drinking an existing useful $11 Report regulations. Water annual for that billion Society growth lives drinkin water Card Infrastructure are and shortfall to near and future This for of over replace in g
Slide 16: The Future of Water Infrastructure Repair Needs
The Repair Future Infrastructure Aging Valves Up Emphasis [Graphic Funding Area 9 funded Mueller Products •2 of 20-YR (1) Source: (2) Water (3) (4) 160% 9% water Global EPA Government toMarket in15%—30% Infrastructure water Drinking and Need at which Water 2007 Clean systems and Appears operates loc
Slide 17: Aging Water Infrastructure Accelerating Need
Aging Water Accelerating Average (1) 17 The Infrastructure life EPA of Need 100 Clean yearWater and 75and year Drinking old pipeWater is converging, Infrastructure contributing Gap Analysis to accelerating 2002 need for pipe replacement.
Slide 18: Increasing Regulatory Pressure
Increasing •Stronger Atlanta Washington, Baltimore Kansas Cincinnati 1974/1996 2011 — (1) At$965 18 “Newleast federal produces The City $4.0B American Cleanmillion EPA 40 City JerseyFederal $1.5B Safe the $2.5B cities budget D.C. regulations Water canand Drinking for lowest Water $2.6B under Awarene
Slide 19: Historical Funding Sources
Funding Historical Sources Long-term Rate Other Loans From residential about Bureau Sources: AWWA Black 19 Increases 2007-2009, 10%(3) 15% &Grants of State of Water Veatch Water Labor water Funding trends Operational of 16% 10% Infrastructure 2009/2010 the Statistics rates in average 3%Rates Industr
Slide 20: Actions & Business Results
Actions & Business Results 20
Slide 21: Management Actions and Objectives
Management Reduce Objectives Manage Leverage •Closed •Sold •Reduced and facilities million end •Acquired •Entered 21 other oftwo March in costs six working at into Mueller manufacturing headcount FY2009; non-core and leak Anvil plants Actions/Initiatives and advanced 2011 invested detection capital
Slide 22: Historical Financial Performance
History (see (a) 2010 ($ $804 $492 NET 30.8% 11.0% ADJ. 4.% ($20) 2002 appendices Fiscal (b) of$101 restructuring Financial SALES $756 $485 2003 EBITDA ($34) year & 28.6%Strong (c) inventory results $57 $18.3 $718 $470 2004 end for environmental-related charges Excludes 22 in$564 millions)(4.9%) Fin
Slide 23: Consolidated Second Quarter Fiscal Results
Consolidated Second $ Net 2010 2011 $301.8 $311.3 ($12.4) ($4.8) (4.1%) (1.5%) ($0.11) ($0.07) Adj. $9.0 $15.8 Financial 3.0% 5.1% Benefitted Anvil’s Continue FY 23in2Q10 2Q11 sales millions lossQuarter operating net EBITDA operating loss from to results performance from invest per (except Non-GAAP
Slide 24: Refinancing and Recapitalization Highlights
Refinancing Recapitalization Extended Locked •Preserved Eliminated More Reduced payments New $420 $225 2017 $275 24 Expect structure: million than ingreater limitations maturities and deleveraging long-term $163 financial Highlights ABL 7.375% 8.75 divestitures million operational provides % Revolve
Slide 25: Key Financial Metrics: Free Cash Flow and Debt
Key Free $73 $140 $0 FY2006 Capital ($ $100 FY2007 FY2009 FY2010 25 in $0million Financial Cash millions) 800 $88 Expenditures FY2007* results $1, $88 Flow free $1,549 $90 Metrics ($include exclude Total cash in$80 FY2008 millions) $115 flow Debt $71 $6.3 $18.3 $48.1 $1,600 average $70 FY2009** mill
Slide 26: Why Invest in MWA?
Why Invest Water Driven Limited Strong Leading Comprehensive Low-cost Recovery Increased Operating Leveraging Expand Develop Strategic 26 industry competitive by smart diagnostic number brand municipal intelligent acquisitions/partnerships manufacturing municipal of leverage excellence new strengths
Slide 27: Supplemental Data
Supplemental Data 27
Slide 28: Segment Results: Three Months Ended March 31, 2011
Segment (in Three Mueller U.S. GAAP Corporate Anvil Gross $311.3 $— $86.6 $75.8 $148.9 Selling, $50.0 $(0.1) $24.4 $(8.1) $33.8 54.8 6.4 17.5 7.6 23.3 (6.9) 16.3 (9.5) $(0.09) Non-GAAP $7.8 $0.1 $1.2 $2.8 $3.7 Income 2.1 0.5 1.0 0.6 Restructuring $(6.9) $(6.5) $6.4 $(16.7) $9.9 Depreciation (4.8) (6
Slide 29: Segment Results: Three Months Ended March 31, 2010
Segment except Three Mueller U.S. GAAP Corporate Anvil Gross $301.8 $77.6 $83.0 $141.2 Selling, $38.2 $— $18.9 $(12.9) $32.2 50.6 8.5 12.9 6.7 22.5 (22.9) 14.8 0.5 (14.5) $(0.15) Non-GAAP $0.1 $1.1 $1.3 $3.4 Income 10.5 0.1 10.4 Restructuring $(22.9) $(8.5) $5.9 $(30.0) Depreciation (12.4) (8.5) 6.0
Slide 30: Segment Results: Six Months Ended March 31, 2011
Segment millions, (in Six Mueller U.S. GAAP Corporate Anvil Gross $598.9 $— $170.0 $150.2 $278.7 Selling, $99.6 $0.3 $46.8 $(10.5) $63.0 106.8 15.1 33.4 14.6 43.7 (11.2) 32.2 (17.6) $(0.17) Non-GAAP $14.2 $0.5 $2.6 $4.2 $6.9 Income 4.0 1.1 1.9 1.0 Restructuring $(11.2) $12.3 $(27.0) $18.3 Depreciati
Slide 31: Segment Results: Six Months Ended March 31, 2010
Segment Six (in Mueller U.S. GAAP Corporate Anvil Gross $614.9 $177.7 $162.7 $274.5 Selling, $94.1 $— $41.9 $(16.9) $69.1 105.8 16.4 31.4 14.6 43.4 (22.6) 31.6 0.5 (20.3) $(0.22) Non-GAAP $14.6 $0.1 $2.1 $5.3 $7.1 Income 10.9 10.7 0.1 Restructuring $(22.6) $(16.4) $10.4 $(42.2) $25.6 Depreciation (1
Slide 32: Segment Results: Year Ended September 30, 2010
Segment (in Year Mueller U.S. GAAP Corporate Anvil Gross $1,337.5 $346.9 $377.8 $612.8 Selling, $236.4 $— $88.8 $(22.7) $170.3 219.3 33.4 66.2 30.5 89.2 4.0 68.0 4.6 (23.4) $(0.29) Non-GAAP $32.8 $0.2 $6.0 $11.0 $15.6 Income 13.1 — 0.5 12.5 0.1 Restructuring $4.0 $(33.4) $22.1 $(65.7) $81.0 Deprecia
Slide 33: Segment Results: Year Ended September 30, 2009
Segment (in Year Mueller U.S. GAAP Corporate Anvil Gross $1,427.9 $— $469.9 $410.9 $547.1 Selling, $256.9 $0.1 $128.2 $(5.7) $134.3 239.1 34.4 84.9 35.6 84.2 (1,000.9) 78.3 Income (86.3) $(8.55) Non-GAAP $39.7 $0.4 $11.9 $11.2 $16.2 $(1,000.9) $(34.5) $(53.4) $(142.4) $(770.6) 1,018.7 0.2 96.7 101.1
Slide 34: Questions
34 Questions