Mueller Water Products · NYSE:MWA
Mueller Water Products — Q1 2020 Earnings Presentation
22 slides from Mueller Water Products's earnings presentation, Feb 5, 2020
Slide 1: Where Intelligence Meets Infrastructure
Where Intelligence Meets Infrastructure® Earnings Conference Call For The First Quarter Ended December 31, 2019 February 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 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, expects, plans
Slide 4: First Quarter Highlights
First Quarter Highlights • Very good start to 2020, generated solid organic consolidated net sales growth, improved margins and increased adjusted EBITDA • Increased net sales 10.3% driven by the benefit of the Krausz acquisition, with organic net sales increasing 3.1% due to higher pricing and incr
Slide 5: Consolidated GAAP Results
Consolidated GAAP Results • Net sales increased 10.3%, or $19.8 million, to $212.6 million driven by the acquisition of Krausz, as well as higher First Quarter 2020 2019 pricing and increased shipment volumes at Infrastructure • Gross profit increased 20.8%, or $12.5 million, to $72.6 Net sales $ 21
Slide 6: Consolidated Non-GAAP Results
Consolidated Non-GAAP Results • Adjusted operating income increased 18.8%, or $3.6 million, to $22.7 million First Quarter 2020 2019 • Increases at both Infrastructure and Technologies Adj. operating income $ 22.7 $ 19.1 were partially offset by higher corporate SG&A expenses Adj. operating margin 1
Slide 7: Infrastructure Results
Infrastructure Results • Net sales increased 12.1%, or $20.8 million, to $192.8 million in the quarter primarily due to $13.8 First Quarter 2020 2019 million in sales from Krausz and a 4.1% increase in organic net sales, which was primarily driven by higher Net sales $ 192.8 $ 172.0 pricing and incr
Slide 8: Technologies Results
Technologies Results • Net sales decreased $1.0 million to $19.8 million in the quarter, driven by lower volumes at First Quarter 2020 2019 Metrology, which were partially offset by higher volumes at Echologics Net sales $ 19.8 $ 20.8 • Adjusted operating loss improved $1.7 million Adj. operating lo
Slide 9: Free Cash Flow
Free Cash Flow $10.0 • Cash used in operating activities for first quarter $5.0 $9.9 2020 was $12.4 million with negative free cash $0.0 flow of $27.6 million ($5.0) ($15.9) • Both cash flow from operations and free cash ($12.4) ($6.0) flow were impacted by the $22.2 million $ in millions ($10.0) pa
Slide 10: Net Debt
Net Debt $500 • Total debt of $446.4 million with cash and cash $446.4 $445.6 $450 equivalents of $136.8 million, after $22.2 million $400 payment for Walter Tax settlement in Q1 FY20 $136.8 $350 $198.8 • Net debt leverage was 1.5x at December 31, 2019 $300 $ in millions $250 • $122 million of exces
Slide 11: First Quarter Comments and Full-Year 2020 Outlook
First Quarter Comments and Full-Year 2020 Outlook
Slide 12: Key Strategic Priorities for 2020 and Beyond
Key Strategic Priorities for 2020 and Beyond Where Intelligence Meets Infrastructure® Committed to delivering sustainable and efficient solutions for our customers and the work they do by bridging the gap between intelligence and infrastructure, helping our customers deliver the most important water
Slide 13: Modernizing Manufacturing Facilities
Modernizing Manufacturing Facilities • Major projects driving capital spending above historical levels to deliver above-market sales growth by broadening our product capabilities and expand gross margins as we modernize facilities, equipment and processes • Three transformational projects are foreca
Slide 14: Chattanooga Large Casting Foundry (LCF)
Chattanooga Large Casting Foundry (LCF) • Large casting foundry expansion adjacent to Chattanooga foundry is first of three major capital projects to be completed • Anticipate LCF will begin producing product with our own castings by the end of the second quarter of this year • Benefits from expansi
Slide 15: Large Valve Opportunity
Large Valve Opportunity • Historically, Mueller’s focus has been on small valves, which are less than 12 inches, as they are used much more frequently for water distribution • Increased population density and urbanization are driving a greater need for large valve sizes Small Gate Valve • Although t
Slide 16: Full-Year 2020 Outlook
Full-Year 2020 Outlook Updated expectations for full-year 2020, which reflect the current business environment and outlook, are as follows: • Municipal spending growing in the low-single digit range, residential construction growing in the low- single digit range and natural gas distribution growing
Slide 17: Q&A
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Slide 18: Supplemental Data
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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 December 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 192.8 $ 19.8 $ — $ 212.6 Gross profit $ 68.2 $ 4.4 $ — $ 72.6 Selling
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 December 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 10.3 Income tax expense (1) 3.1 Interest expense, net (1) 7.4 Walter
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) Quarter ended December 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 172.0 $ 20.8 $ — $ 192.8 Gross profit $ 56.8 $ 3.3 $ — $ 60.1 Selling
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) Quarter ended December 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net loss $ (21.0) Income tax expense (1) (5.9) Interest expense, net (1) 5.5 Walt
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