Delaware | 0001-32892 | 20-3547095 |
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)) |
Dated: February 2, 2017 | MUELLER WATER PRODUCTS, INC. | ||
By: | /s/ Evan L. Hart | ||
Evan L. Hart | |||
Senior Vice President and Chief Financial Officer |
• | Increased net sales $4.1 million to $167.2 million, as compared with $163.1 million in the prior year quarter, |
• | Improved operating income from continuing operations 21.9 percent to $13.9 million, as compared with $11.4 million, and improved adjusted operating income from continuing operations 24.6 percent to $15.2 million, as compared with $12.2 million, both compared to the prior year, and, |
• | Increased income from continuing operations 35.0 percent to $5.4 million, as compared with $4.0 million in the prior year, and |
• | Earned net income per diluted share of $0.04. |
December 31, | September 30, | ||||||
2016 | 2016 | ||||||
(in millions, except share amounts) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | 172.3 | $ | 195.0 | |||
Receivables, net | 104.2 | 131.8 | |||||
Inventories | 142.7 | 130.7 | |||||
Other current assets | 13.6 | 12.7 | |||||
Current assets held for sale | 233.9 | 142.1 | |||||
Total current assets | 666.7 | 612.3 | |||||
Property, plant and equipment, net | 106.8 | 108.4 | |||||
Intangible assets | 429.8 | 434.6 | |||||
Other noncurrent assets | 25.1 | 25.4 | |||||
Noncurrent assets held for sale | — | 99.9 | |||||
Total assets | $ | 1,228.4 | $ | 1,280.6 | |||
Liabilities and equity: | |||||||
Current portion of long-term debt | $ | 5.6 | $ | 5.6 | |||
Accounts payable | 45.4 | 73.7 | |||||
Other current liabilities | 40.2 | 61.7 | |||||
Current liabilities held for sale | 44.5 | 44.8 | |||||
Total current liabilities | 135.7 | 185.8 | |||||
Long-term debt | 478.0 | 478.8 | |||||
Deferred income taxes | 111.4 | 109.9 | |||||
Other noncurrent liabilities | 80.0 | 85.8 | |||||
Noncurrent liabilities held for sale | — | 0.8 | |||||
Total liabilities | 805.1 | 861.1 | |||||
Commitments and contingencies | |||||||
Common stock: 600,000,000 shares authorized; 162,065,657 and 161,693,051 shares outstanding at December 31, 2016 and September 30, 2016, respectively | 1.6 | 1.6 | |||||
Additional paid-in capital | 1,559.0 | 1,563.9 | |||||
Accumulated deficit | (1,072.2 | ) | (1,078.9 | ) | |||
Accumulated other comprehensive loss | (66.3 | ) | (68.3 | ) | |||
Total Company stockholders’ equity | 422.1 | 418.3 | |||||
Noncontrolling interest | 1.2 | 1.2 | |||||
Total equity | 423.3 | 419.5 | |||||
Total liabilities and equity | $ | 1,228.4 | $ | 1,280.6 |
Three months ended | |||||||
December 31, | |||||||
2016 | 2015 | ||||||
(in millions, except per share amounts) | |||||||
Net sales | $ | 167.2 | $ | 163.1 | |||
Cost of sales | 115.5 | 115.5 | |||||
Gross profit | 51.7 | 47.6 | |||||
Operating expenses: | |||||||
Selling, general and administrative | 36.5 | 35.4 | |||||
Other charges | 1.3 | 0.8 | |||||
Total operating expenses | 37.8 | 36.2 | |||||
Operating income | 13.9 | 11.4 | |||||
Interest expense, net | 6.4 | 6.1 | |||||
Income before income taxes | 7.5 | 5.3 | |||||
Income tax expense | 2.1 | 1.3 | |||||
Income from continuing operations | 5.4 | 4.0 | |||||
Income from discontinued operations | 1.3 | 2.2 | |||||
Net income | $ | 6.7 | $ | 6.2 | |||
Net income per basic share: | |||||||
Continuing operations | $ | 0.03 | $ | 0.02 | |||
Discontinued operations | 0.01 | 0.02 | |||||
Net income | $ | 0.04 | $ | 0.04 | |||
Net income per diluted share: | |||||||
Continuing operations | $ | 0.03 | $ | 0.02 | |||
Discontinued operations | 0.01 | 0.02 | |||||
Net income | $ | 0.04 | $ | 0.04 | |||
Weighted average shares outstanding: | |||||||
Basic | 161.8 | 160.8 | |||||
Diluted | 164.6 | 163.2 | |||||
Dividends declared per share | $ | 0.03 | $ | 0.02 |
Three months ended | |||||||
December 31, | |||||||
2016 | 2015 | ||||||
(in millions) | |||||||
Operating activities: | |||||||
Net income | $ | 6.7 | $ | 6.2 | |||
Less income from discontinued operations | 1.3 | 2.2 | |||||
Income from continuing operations | 5.4 | 4.0 | |||||
Adjustments to reconcile income from continuing operations to net cash used in operating activities of continuing operations: | |||||||
Depreciation | 4.9 | 4.4 | |||||
Amortization | 5.4 | 5.2 | |||||
Stock-based compensation | 1.8 | 1.1 | |||||
Retirement plans | 0.8 | 1.2 | |||||
Deferred income taxes | (2.1 | ) | (0.2 | ) | |||
Other, net | 0.3 | 0.6 | |||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Receivables | 27.4 | 21.9 | |||||
Inventories | (12.2 | ) | (8.1 | ) | |||
Other assets | (0.8 | ) | (2.1 | ) | |||
Liabilities | (50.8 | ) | (36.3 | ) | |||
Net cash used in operating activities of continuing operations | (19.9 | ) | (8.3 | ) | |||
Investing activities: | |||||||
Capital expenditures | (4.2 | ) | (4.7 | ) | |||
Net cash used in investing activities of continuing operations | (4.2 | ) | (4.7 | ) | |||
Financing activities: | |||||||
Dividends | (4.8 | ) | (3.2 | ) | |||
Employee taxes related to stock-based compensation | (2.5 | ) | (2.9 | ) | |||
Repayments of debt | (1.3 | ) | (1.3 | ) | |||
Excess tax benefit on stock-based compensation exercises | — | 0.7 | |||||
Issuance of common stock | 0.4 | 0.4 | |||||
Other | 0.1 | 2.1 | |||||
Net cash used in financing activities of continuing operations | (8.1 | ) | (4.2 | ) | |||
Net cash flows from discontinued operations: | |||||||
Operating activities | 12.4 | 10.8 | |||||
Investing activities | (2.1 | ) | (1.6 | ) | |||
Financing activities | (0.1 | ) | 0.1 | ||||
Net cash provided by discontinued operations | 10.2 | 9.3 | |||||
Effect of currency exchange rate changes on cash | (0.7 | ) | (0.7 | ) | |||
Net change in cash and cash equivalents | (22.7 | ) | (8.6 | ) | |||
Cash and cash equivalents at beginning of period | 195.0 | 113.1 | |||||
Cash and cash equivalents at end of period | $ | 172.3 | $ | 104.5 |
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES (UNAUDITED) | |||||||||||||||
Quarter ended December 31, 2016 | |||||||||||||||
Mueller Co. | Mueller Technologies | Corporate | Consolidated | ||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||
Net sales | $ | 146.3 | $ | 20.9 | $ | — | $ | 167.2 | |||||||
Gross profit | $ | 47.5 | $ | 4.2 | $ | — | $ | 51.7 | |||||||
Selling, general and administrative expenses | 21.3 | 6.4 | 8.8 | 36.5 | |||||||||||
Other charges | 0.1 | — | 1.2 | 1.3 | |||||||||||
Operating income (loss) from continuing operations | $ | 26.1 | $ | (2.2 | ) | $ | (10.0 | ) | 13.9 | ||||||
Interest expense, net | 6.4 | ||||||||||||||
Income tax expense | 2.1 | ||||||||||||||
Income from continuing operations | $ | 5.4 | |||||||||||||
Income from continuing operations per diluted share | $ | 0.03 | |||||||||||||
Capital expenditures | $ | 3.0 | $ | 1.1 | $ | 0.1 | $ | 4.2 | |||||||
Operating margin | 17.8 | % | (10.5 | )% | 8.3 | % | |||||||||
Reconciliation of Non-GAAP performance measures to GAAP performance measures: | |||||||||||||||
Income from continuing operations | $ | 5.4 | |||||||||||||
Other charges | 1.3 | ||||||||||||||
Income tax benefit of adjusting items | (0.4 | ) | |||||||||||||
Adjusted income from continuing operations | $ | 6.3 | |||||||||||||
Weighted average diluted shares outstanding | 164.6 | ||||||||||||||
Adjusted income from continuing operations per share | $ | 0.04 | |||||||||||||
Net income | $ | 6.7 | |||||||||||||
Less income from discontinued operations | (1.3 | ) | |||||||||||||
Interest expense, net (1) | 6.4 | ||||||||||||||
Income tax expense (1) | 2.1 | ||||||||||||||
Operating income (loss) from continuing operations | $ | 26.1 | $ | (2.2 | ) | $ | (10.0 | ) | 13.9 | ||||||
Other charges | 0.1 | — | 1.2 | 1.3 | |||||||||||
Adjusted operating income (loss) from continuing operations | 26.2 | (2.2 | ) | (8.8 | ) | 15.2 | |||||||||
Depreciation and amortization | 9.0 | 1.2 | 0.1 | 10.3 | |||||||||||
Adjusted EBITDA | $ | 35.2 | $ | (1.0 | ) | $ | (8.7 | ) | $ | 25.5 | |||||
Adjusted operating margin | 17.9 | % | (10.5 | )% | 9.1 | % | |||||||||
Adjusted EBITDA margin | 24.1 | % | (4.8 | )% | 15.3 | % | |||||||||
(1) We do not allocate interest or income taxes to our segments. | |||||||||||||||
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES (UNAUDITED) | |||||||||||||||
Quarter ended December 31, 2016 | |||||||||||||||
Mueller Co. | Mueller Technologies | Corporate | Consolidated | ||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||
Adjusted EBITDA | $ | 35.2 | $ | (1.0 | ) | $ | (8.7 | ) | $ | 25.5 | |||||
Three prior quarters' adjusted EBITDA | 164.1 | (3.2 | ) | (26.5 | ) | 134.4 | |||||||||
Trailing twelve months' adjusted EBITDA | $ | 199.3 | $ | (4.2 | ) | $ | (35.2 | ) | $ | 159.9 | |||||
Reconciliation of net debt to total debt (end of period): | |||||||||||||||
Current portion of long-term debt | $ | 5.6 | |||||||||||||
Long-term debt | 478.0 | ||||||||||||||
Total debt | 483.6 | ||||||||||||||
Less cash and cash equivalents | 172.3 | ||||||||||||||
Net debt | $ | 311.3 | |||||||||||||
Net debt leverage (net debt divided by trailing twelve months' adjusted EBITDA) | 1.9x | ||||||||||||||
Reconciliation of free cash flow to net cash used in operating activities of continuing operations: | |||||||||||||||
Net cash used in operating activities of continuing operations | $ | (19.9 | ) | ||||||||||||
Less capital expenditures | (4.2 | ) | |||||||||||||
Free cash flow | $ | (24.1 | ) |
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES (UNAUDITED) | |||||||||||||||
Quarter ended December 31, 2015 | |||||||||||||||
Mueller Co. | Mueller Technologies | Corporate | Consolidated | ||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||
Net sales | $ | 144.7 | $ | 18.4 | $ | — | $ | 163.1 | |||||||
Gross profit | $ | 44.0 | $ | 3.6 | $ | — | $ | 47.6 | |||||||
Selling, general and administrative expenses | 20.0 | 6.9 | 8.5 | 35.4 | |||||||||||
Other charges | 0.2 | 0.5 | 0.1 | 0.8 | |||||||||||
Operating income (loss) | $ | 23.8 | $ | (3.8 | ) | $ | (8.6 | ) | 11.4 | ||||||
Interest expense, net | 6.1 | ||||||||||||||
Income tax expense | 1.3 | ||||||||||||||
Income from continuing operations | $ | 4.0 | |||||||||||||
Income from continuing operations per diluted share | $ | 0.02 | |||||||||||||
Capital expenditures | $ | 3.6 | $ | 1.0 | $ | 0.1 | $ | 4.7 | |||||||
Operating margin | 16.4 | % | (20.7 | )% | 7.0 | % | |||||||||
Reconciliation of Non-GAAP performance measures to GAAP performance measures: | |||||||||||||||
Income from continuing operations | $ | 4.0 | |||||||||||||
Other charges | 0.8 | ||||||||||||||
Income tax benefit of adjusting items | (0.2 | ) | |||||||||||||
Adjusted income from continuing operations | $ | 4.6 | |||||||||||||
Weighted average diluted shares outstanding | 163.2 | ||||||||||||||
Adjusted income from continuing operations per share | $ | 0.03 | |||||||||||||
Net income | $ | 6.2 | |||||||||||||
Less income from discontinued operations | (2.2 | ) | |||||||||||||
Interest expense, net (1) | 6.1 | ||||||||||||||
Income tax expense (1) | 1.3 | ||||||||||||||
Operating income (loss) from continuing operations | $ | 23.8 | $ | (3.8 | ) | $ | (8.6 | ) | 11.4 | ||||||
Other charges | 0.2 | 0.5 | 0.1 | 0.8 | |||||||||||
Adjusted operating income (loss) from continuing operations | 24.0 | (3.3 | ) | (8.5 | ) | 12.2 | |||||||||
Depreciation and amortization | 8.4 | 1.1 | 0.1 | 9.6 | |||||||||||
Adjusted EBITDA | $ | 32.4 | $ | (2.2 | ) | $ | (8.4 | ) | $ | 21.8 | |||||
Adjusted operating margin | 16.6 | % | (17.9 | )% | 7.5 | % | |||||||||
Adjusted EBITDA margin | 22.4 | % | (12.0 | )% | 13.4 | % | |||||||||
(1) We do not allocate interest or income taxes to our segments. | |||||||||||||||
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES (UNAUDITED) | |||||||||||||||
Quarter ended December 31, 2015 | |||||||||||||||
Mueller Co. | Mueller Technologies | Corporate | Consolidated | ||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||
Adjusted EBITDA | $ | 32.4 | $ | (2.2 | ) | $ | (8.4 | ) | $ | 21.8 | |||||
Three prior quarters' adjusted EBITDA | 153.9 | (6.6 | ) | (23.0 | ) | 124.3 | |||||||||
Trailing twelve months' adjusted EBITDA | $ | 186.3 | $ | (8.8 | ) | $ | (31.4 | ) | $ | 146.1 | |||||
Reconciliation of net debt to total debt (end of period): | |||||||||||||||
Current portion of long-term debt | $ | 5.7 | |||||||||||||
Long-term debt | 481.5 | ||||||||||||||
Total debt | 487.2 | ||||||||||||||
Less cash and cash equivalents | 104.5 | ||||||||||||||
Net debt | $ | 382.7 | |||||||||||||
Net debt leverage (net debt divided by trailing twelve months' adjusted EBITDA) | 2.6x | ||||||||||||||
Reconciliation of free cash flow to net cash provided by operating activities of continuing operations: | |||||||||||||||
Net cash used in operating activities of continuing operations | $ | (8.3 | ) | ||||||||||||
Less capital expenditures | (4.7 | ) | |||||||||||||
Free cash flow | $ | (13.0 | ) |
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