Mueller Water Products · NYSE:MWA
Mueller Water Products — Gabelli & Company 21st Annual Pump, Valve and Motor Symposium (February 2011)
32 slides from Mueller Water Products's conference presentation, Feb 16, 2011
Slide 1: Gabelli & Company 21st Annual Pump, Valve and Motor Symposium
1 Gabelli & Company 21 st Annual Pump, Valve and Motor Symposium February 17, 2011 Exhibit 99.1
Slide 2: Safe Harbor Statement
2 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 the Company inte
Slide 3: Non-GAAP Financial Measures
3 Non-GAAP Financial Measures Non-GAAP Financial Measures The Company presents adjusted income (loss) from operations, adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per share, free cash flow and net debt as non-GAAP measures. Adjusted income (loss) from operations represent
Slide 4: Investment Highlights
4 Investment Highlights Leading North American provider of water infrastructure and flow control products and services Leading brands in water infrastructure Leveraging brands to expand smart water infrastructure offering for diagnostic and data management Low-cost manufacturing processes Increasing
Slide 5: Our Business
5 Our Business • $1.3B LTM net sales (as of December 31, 2010) • Portfolio includes: • Fire hydrants • Valves • Pipe fittings • Ductile iron pipe • Metering systems • Leak detection • Specified in 100 largest U.S. metropolitan markets (1) • More than 75% of FY2010 net sales from products with #1 or
Slide 6: Segment net sales and product portfolio
6 SEGMENT NET SALES PRODUCT PORTFOLIO ADJUSTED OPERATING INCOME (LOSS) (1) DEPRECIATION AND AMORTIZATION (2) HISTORICAL ROOTS ADJUSTED EBITDA (1) (2) Ductile Iron Pipe Restrained Pipe Joint Joint Restraints Joint Fittings Broad Product Portfolio $609 $74 $49 $123 $373 ($51) $19 ($32) $330 $25 $15 $4
Slide 7: Complete Water Transmission Solutions
7 Complete Water Transmission Solutions Mueller Water Products manufactures and markets products and services that are used in the transmission, distribution and monitoring of safe, clean drinking water and in water treatment facilities.
Slide 8: Mueller Water Products market positions
Mueller Water Products & Ook BUTTERFLY AND —_ BRASS WATER: FIRE HYDRANTS — GATE VALVES. BALL VALVES PRODUCTS DUCTILE IRON PIPE Mueller Water Products cas HL ae #1 Position \ e e C c ~) oe ‘AY. McDonald ry 7 DeZURIK ry) Ford Meter Box rT) Griffin Pipe i] ry MeWane @ rd ) . * Company estimates based o
Slide 9: Strategy And Objectives
9 Capitalize on the large, attractive and growing water infrastructure markets worldwide Strategy And Objectives Maintain leadership positions with customers and end users Broaden breadth and depth of products and services Continue to enhance operational and organizational excellence Expand internat
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Mueller Water Products) |i
Slide 11: Primary End Markets: 2006-2010
11 Primary End Markets: 2006-2010 Since 2006, our exposure to the residential construction market has declined from roughly 40% to 5%.
Slide 12: Historical Housing Starts
12 Historical Housing Starts
Slide 13: Non-Residential Construction
13 Non-Residential Construction
Slide 14: A Significant Market Opportunity
11 A Significant Market Opportunity
Slide 15: Aging Water Infrastructure
15 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 fo
Slide 16: The Market Opportunity Is Significant And Growing
16 The Market Opportunity Is Significant And Growing Repair and Replacement Market • Aging water pipes need to be repaired/ replaced • Valves and hydrants typically replaced at same time as pipes • Up to 15% - 30% of treated potable water lost in leaky pipes (2) • Emphasis on improving operational e
Slide 17: Aging Water Infrastructure
17 Aging Water Infrastructure
Slide 18: Increasing Federal Awareness of Funding Needs
18 Increasing Federal Awareness of Funding Needs • At least 40 cities under consent decrees — Atlanta $4.0B — Washington, D.C. $2.6B — Baltimore City and county $1.7B — Kansas City $2.5B — Cincinnati $1.5B • 1974/1996 Safe Drinking Water Act • 2011 proposed federal budget — $1.3B for Drinking Water
Slide 19: Funding Water Infrastructure Repair
19 Sources of Funding Water Infrastructure Repair (2) Historical Water Rates Compared to Other Utilities (1) Funding Water Infrastructure Repair
Slide 20: Actions & Business Results
11 Actions & Business Results
Slide 21: Management Actions/Initiatives
21 Management Actions/Initiatives Objectives Actions Reduce costs and improve operating leverage •Closed six plants since FY2006 •Sold two non-core assets of Anvil •Reduced headcount by about 24% from September 30, 2008 to December 31, 2010 from approximately 6,300 to approximately 4,800 •Took actio
Slide 22: History of Strong Financial Performance
22 History of Strong Financial Performance (see appendices for GAAP reconciliation)
Slide 23: Consolidated Non-GAAP Results
23 Consolidated Non-GAAP Results $ in millions (except per share amounts) 2011 2010 Net sales $287.6 $313.1 Adj. income (loss) from operations ($2.4) $0.7 Adj. operating income (loss) % of net sales (0.8%) 0.2% Adj. net loss per share ($0.06) ($0.07) Adj. EBITDA $17.7 $21.5 Adj. EBITDA % of net sale
Slide 24: Refinancing Highlights
24 Refinancing Highlights • Recapitalization provides a long-term capital structure • Extended maturities with no significant required principal payments before 2015 • Locked in long-term capital at attractive rates • Preserved deleveraging capability • Expect greater operational flexibility • Elimi
Slide 25: Key Financial Metrics
25 Key Financial Metrics $37 $115 $94 $91 $30 $0 $20 $40 $60 $80 $100 $120 $140 FY2006 FY2007* FY2008 FY2009** FY2010*** Free Cash Flow ($ in millions) $1,549 $1,127 $1,101 $1,096 $740 $692 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 Mar-2006 FY2006 FY2007* FY2008 FY2009 FY2010 Total D
Slide 26: Mueller Water Products
Mueller Water Products 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 Comprehensive
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Mueller Water Products) |i
Slide 28: Segment Results and Reconciliation of Non-GAAP to GAAP
28 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (in millions, except per share amounts) Three months ended December 31, 2010 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales 129.8 $ 74.4 $ 83.4 $ - $ 287.6 $ Gross profit (loss) 29.2 $ (2.4) $ 22.4 $
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP
29 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (in millions, except per share amounts) Three months ended December 31, 2009 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales 133.3 $ 79.7 $ 100.1 $ - $ 313.1 $ Gross profit (loss) 36.9 $ (4.0) $ 23.0 $
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP
30 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (in millions, except per share amounts) Year ended September 30, 2010 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales 612.8 $ 377.8 $ 346.9 $ - $ 1,337.5 $ Gross profit (loss) 170.3 $ (22.7) $ 88.8 $ -
Slide 31: Segment Results and Reconciliation of Non-GAAP to GAAP
31 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (in millions, except per share amounts) Year ended September 30, 2009 Mueller Co. U.S. Pipe Anvil Corporate Total GAAP results: Net sales 547.1 $ 410.9 $ 469.9 $ - $ 1,427.9 $ Gross profit (loss) 134.3 $ (5.7) $ 128.2 $ 0
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Mueller Water Products) |i