Mueller Water Products · NYSE:MWA
Mueller Water Products — Brean Murray, Carret & Co. Global Resources & Infrastructure Conference 2010
33 slides from Mueller Water Products's conference presentation, Jun 11, 2010
Slide 1: Brean Murray, Carret & Co. Global Resources & Infrastructure Conference
Exhibit 99.1 Brean Murray, Carrett & Co. Global Resources & Infrastructure Conference June 14, 2010
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement 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 we intend, expect,
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures The Company presents adjusted income (loss) from operations, adjusted EBITDA, adjusted net loss, adjusted net loss per share, net debt and free cash flow as non-GAAP measures. Adjusted income (loss) from operations represents income (loss) from
Slide 4: Investment Highlights
Investment Highlights Leading North American provider of water infrastructure and flow control products in attractive and growing water industry One of the largest installed bases in the U.S. Strong brands Leading specification positions in 99 of 100 top U.S. metropolitan areas Low-cost manufacturin
Slide 5: Our Business
Our Business • $1.4B LTM net sales (as of March 31, 2010) FY2009 Primary End Markets (1) • Portfolio includes: • Fire hydrants • Valves • Pipe fittings • Ductile iron pipe • Water meters • Specified in 99 of top 100 U.S. metropolitan areas • Approximately 75% of FY2009 net sales from products with #
Slide 6: Broad Product Portfolio
Broad Product Portfolio ($ in millions) HISTORICAL ROOTS Est. 1857 Est. 1899 Est. 1999 (1850) SEGMENT NET SALES $587 $365 $401 ADJUSTED OPERATING INCOME (LOSS) (1) $65 ($55) $20 DEPRECIATION AND AMORTIZATION (2) $50 $18 $17 EBITDA (1) (2) $115 ($37) $37 Restrained Joint Ductile Iron Iron Gate Pipe P
Slide 7: Complete Water Transmission Solutions
Complete Water Transmission Solutions As water flows from its source to treatment facilities to homes and businesses across North America, it flows through or is controlled by the type of products we manufacture, making Mueller Water Products an integral part of the water infrastructure system. 7
Slide 8: * Company estimates based on internal analysis and information from trade associations and our
* Company estimates based on internal analysis and information from trade associations and our distributor networks, where available. 8
Slide 9: Strategy And Objectives
Strategy And Objectives Capitalize on the large, attractive and growing water infrastructure markets worldwide • Maintain leadership positions with customers and end users • Continue to enhance operational and organizational excellence • Broaden breadth and depth of products and services • Expand in
Slide 10: Our End Markets
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Slide 11: FY2009 Net Sales: $1.4B by Primary End Markets
Primary End Markets Residential Construction* (Private) $150mm FY2009 Net Sales: $1.4B 15% Repair and Replacement (Public) $850mm 85% Water Infrastructure $1B Non-Residential 70% Construction “We are encouraged by the $430mm evidence of recovery we are 30% seeing in certain of our end markets, parti
Slide 12: Aging Water Infrastructure
Aging Water Infrastructure Average life of 100 year old and 75 year old pipe is converging, contributing to accelerating need for pipe replacement. (1) The EPA Clean Water and Drinking Water Infrastructure Gap Analysis 2002 12
Slide 13: Aging Water Infrastructure
Aging Water Infrastructure • An average of 700 water mains break daily in U.S. (about one every two minutes) (1) • Los Angeles typically has up to five breaks daily; 225 major breaks each year (2) • Baltimore water main break in March 2010 left 100,000 people without water (3) June 2010 sinkhole 20’
Slide 14: Aging Water Infrastructure
Aging Water Infrastructure America’s drinking water systems face an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful lives and to comply with existing and future federal water regulations. This does not account for growth in the demand for dr
Slide 15: The Market Opportunity Is Significant And Growing
The Market Opportunity Is Significant And Growing Future Drinking Water Infrastructure Expenditure Needs Repair and Replacement Market ($ in billions) (1) • Aging water pipes need to be rehabilitated / replaced • Valves and hydrants typically replaced at same time as pipes • 15% - 30% of treated pot
Slide 16: Funding 2010 Water Infrastructure Repair
Funding 2010 Water Infrastructure Repair Historical Water Rates Sources of Funding Compared to Other Water Infrastructure Utilities (1) Repair (2) Rate Increases 2% Operational Savings 24% Other 23% Grants Bonds 1% 3% Loans 46% Sources: (1) Bureau of Labor Statistics (2) AWWA State of the Industry R
Slide 17: Increasing Federal Awareness of Funding Needs
Increasing Federal Awareness of Funding Needs Stronger EPA regulations should lead to increased investment • At least 30 cities under consent decrees In 2008, 40 percent of — Atlanta $4.0B the nation’s community — Washington, D.C. $2.8B water systems violated — Baltimore City and county $1.7B the Sa
Slide 18: Historical Housing Starts
Historical Housing Starts Historical Housing Starts (1991 - Apr 2010) Seasonally Adjusted Annualized 2,400 2,150 1,900 1,650 1,400 1991-2009 Average 1,515 1,150 900 Bottom of prior down April - Lowest Starts (479,000) cycle (798,000) 2010 Forecast = 650,000 12% increase over 2009 since Census Bureau
Slide 19: Update on End Markets - Residential Construction
Update on End Markets - Residential Construction Significant Economic Downturns (1) Significant Downturns Peak Trough Length of % Decline Length of Recovery Trough + 12 Months Month Starts Month Starts Downturn From Peak To 1.6MM Starts Starts Increase Feb-1959 1,667 Dec-1960 1,063 22 months (36.2%)
Slide 20: Non-Residential Construction
Non-Residential Construction Non-Residential Construction Actual / Forecast Average 3-Month Change in Non-Residential Construction (1) Source: IHS Global Insight Construction Forecast for Office, Retail, Lodging, Data as of May, 2010 Healthcare (both public and private), Educational, Religious and G
Slide 21: Business Update
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Slide 22: History Of Strong Financial Performance
History Of Strong Financial Performance (a) (b) (a) ($ in millions) $1,000 $804 $800 $756 $718 $664 $618 $598 $595 $595 $600 $509 $536 $547 $551 $537 $546 $535 $556 NET SALES $492 $465 $485 $470 $411 $431 $393 $387 $400 $200 $0 2002 2003 2004 2005 2006 2007 2008 2009 2002 2003 2004 2005 2006 2007 20
Slide 23: Consolidated Non-GAAP Results
Consolidated Non-GAAP Results Second Quarter Fiscal $ in millions (except per share amounts) 2010 2009 Net sales $301.8 $322.2 Adj. loss from operations ($12.4) ($5.1) Adj. operating loss margin (4.1%) (1.6%) Adj. EPS loss ($0.11) ($0.13) Adj. EBITDA $9.0 $18.8 Adj. EBITDA margin 3.0% 5.8% • Results
Slide 24: Capital Structure
Capital Structure Free Cash Flow Total Debt ($ in millions) ($ in millions) $140 $1,800 $1,549 $120 $115 $1,600 $1,400 $100 $94 $91 $1,200 $1,127 $1,101 $1,096 $80 $1,000 $800 $740 $695 $60 $37 $600 $40 $30 $400 $20 $200 $0 $0 FY2006 FY2007* FY2008 FY2009 1H2010 Mar-2006 FY2006 FY2007* FY2008 FY2009
Slide 25: Investment Highlights
Investment Highlights • Water industry has fundamentally strong long-term dynamics • Driven by new and upgraded infrastructure • Limited number of suppliers to end markets • Strong competitive position • Leading brand positions with large installed base • Leading municipal specification positions •
Slide 26: Supplemental Data
[(Mueller Water Products)| - | ital Data
Slide 27: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Three months ended March 31, 2010 (in millions, except per share amounts) Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales $ 141.2 $ 83.0 $ 77.6 $ - $ 301.8 Gross profit (loss) $ 32.2 $ (12.9) $ 18.9 $ - $
Slide 28: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (in millions, except per share amounts) Three months ended March 31, 2009 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales $ 114.8 $ 93.2 $ 114.2 $ - $ 322.2 Gross profit (loss) $ 22.3 $ (2.8) $ 35.4 $ - $
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (in millions, except per share amounts) Six months ended March 31, 2010 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales $ 274.5 $ 162.7 $ 177.7 $ - $ 614.9 Gross profit (loss) $ 69.1 $ (16.9) $ 41.9 $ - $
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (in millions, except per share amounts) Six months ended March 31, 2009 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales $ 234.4 $ 208.9 $ 246.6 $ - $ 689.9 Gross profit (loss) $ 53.5 $ (0.3) $ 76.7 $ - $
Slide 31: Segment Results And Reconciliation Of Non-GAAP To GAAP Performance Measures
Segment Results And Reconciliation Of Non-GAAP To GAAP Performance Measures Year ended September 30, 2009 (in millions, except per share amounts) Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales $ 547.1 $ 410.9 $ 469.9 $ - $ 1,427.9 Loss from operations $ (770.6) $ (142.4) $ (53.4
Slide 32: Segment Results And Reconciliation Of Non-GAAP To GAAP Performance Measures
Segment Results And Reconciliation Of Non-GAAP To GAAP Performance Measures (in millions, except per share amounts) Year ended September 30, 2008 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales $ 718.1 $ 546.0 $ 595.2 $ - $ 1,859.3 Income (loss) from operations $ 128.4 $ (17.4) $
Slide 33: Questions
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