Mueller Water Products · NYSE:MWA

Mueller Water Products — Q3 2018 Earnings Presentation

21 slides from Mueller Water Products's earnings presentation, Aug 7, 2018

1. Slide 1: Earnings Conference Call for the Third Quarter Ended June 30, 2018

   Where Intelligence Meets Infrastructure® Earnings Conference Call For The Third Quarter Ended June 30, 2018 August 7, 2018 These slides are not intended to be a stand-alone presentation, but are for use in conjunction with the earnings call

2. 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

3. 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 we intend, expect, plan, project, b

4. Slide 4: Third Quarter Highlights

   THIRD QUARTER HIGHLIGHTS  Increased consolidated net sales 7.8% after growing net sales 16.8% in second quarter with both Infrastructure and Technologies generating solid volume growth  Benefiting from price increases implemented in second quarter which more than covered inflation  Adjusted opera

5. Slide 5: Consolidated GAAP Results

   CONSOLIDATED GAAP RESULTS  Net sales increased 7.8%, or $18.0 million, to $250.2 million driven by higher volumes Third Quarter 2018 2017 at both Infrastructure and Technologies, as well as higher pricing at Infrastructure Net sales $ 250.2 $ 232.2  Gross profit was $74.5 million with gross profit

6. Slide 6: Consolidated Non-GAAP Results

   CONSOLIDATED NON-GAAP RESULTS  Adjusted operating income increased Third Quarter 2018 2017 5.1% to $47.3 million compared with $45.0 million in 2017 Adj. operating income $ 47.3 $ 45.0  Adjusted operating performance was favorably impacted by higher Adj. operating margin 18.9% 19.4% volumes and hi

7. Slide 7: Infrastructure Results

   INFRASTRUCTURE RESULTS  Net sales grew 7.9% to $224.1 million for the quarter compared Third Quarter 2018 2017 with $207.6 million last year Net sales $ 224.1 $ 207.6  Increase driven by higher shipment Adj. operating income $ 57.0 $ 54.2 volumes and pricing Adj. operating margin 25.4% 26.1%  Adj

8. Slide 8: Technologies Results

   TECHNOLOGIES RESULTS  Net sales increased 6.1% to $26.1 million in the quarter as compared Third Quarter 2018 2017 with $24.6 million last year Net sales $ 26.1 $ 24.6  Primarily driven by higher volumes at Systems Adj. operating loss $ (2.0) $ (1.6)  Adjusted operating loss was $2.0 Adj. operati

9. Slide 9: Net Debt

   NET DEBT $600 $480.6 June 30, $500 $445.3 $ in millions 2018 $400 ABL Revolver (LIBOR + 125 basis points) $ 0.0 $ in Millions $300 $361.7 5.5% Senior Notes* 443.4 $331.5 $200 Other 1.9 $100 Total Debt $ 445.3 $113.8 $118.9 * 5.5% Senior Notes net of $6.6 million of deferred debt issuance costs $0 6/

10. Slide 10: Third Quarter Comments and 2018 Full Year Outlook

    Third Quarter Comments and 2018 Full Year Outlook

11. Slide 11: 2018 Full Year Outlook

    2018 FULL YEAR OUTLOOK  Continue to be very encouraged by healthy demand in both municipal and residential end markets  Residential construction market growth in the mid to high-single digit range  Municipal spending growth in the low to mid-single digit range  Consolidated net sales growth at h

12. Slide 12: Q&A

    Q&A

13. Slide 13: Supplemental Data

    Supplemental Data

14. Slide 14: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended June 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 224.1 $ 26.1 $ — $ 250.2 Gross profit (loss) $ 83.4 $ (8.9) $ — $ 74.5 Selling, gener

15. Slide 15: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended June 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 15.3 Loss on early extinguishment of debt 6.2 Gain on settlement of interest rate sw

16. Slide 16: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended June 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 207.6 $ 24.6 $ — $ 232.2 Gross profit $ 77.0 $ 5.6 $ — $ 82.6 Selling, general and ad

17. Slide 17: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended June 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 24.0 Loss from discontinued operations (after tax) 0.1 Income tax expense (1) 13.4 I

18. Slide 18: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Nine months ended June 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 595.3 $ 66.4 $ — $ 661.7 Gross profit (loss) $ 207.3 $ (2.9) $ — $ 204.4 Selling,

19. Slide 19: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Nine months ended June 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 80.6 One-time impacts from tax legislation (35.1) Loss on early extinguishment o

20. Slide 20: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Nine months ended June 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 535.5 $ 63.6 $ — $ 599.1 Gross profit $ 183.6 $ 3.3 $ — $ 186.9 Selling, general

21. Slide 21: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Nine months ended June 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 104.0 Income from discontinued operations (after tax) (69.8) Income tax expense

Mueller Water Products — Q3 2018 Earnings Presentation on 6ix