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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||||
Emerging growth company | o | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | o |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. | |
(d) Exhibits. | ||
Press release dated February 1, 2018 - Mueller Water Products Reports 2018 First Quarter Results |
Dated: February 1, 2018 | MUELLER WATER PRODUCTS, INC. | ||
By: | /s/ Marietta Edmunds Zakas | ||
Marietta Edmunds Zakas | |||
Executive Vice President and Chief Financial Officer |
• | Increased net sales $11.1 million, or 6.6 percent, to $178.3 million, as compared with $167.2 million in the prior year quarter. |
• | Improved operating income 45.8 percent to $20.7 million, as compared with $14.2 million in the prior year quarter. Adjusted operating income was $15.6 million in the quarter and $15.5 million in the prior year quarter. |
• | Increased income from continuing operations to $55.1 million from $5.4 million in the prior year quarter, and increased adjusted net income 39.7 percent to $8.8 million, as compared with $6.3 million in the prior year quarter. |
• | Sold an idle property for a gain of $9.0 million and incurred other charges of $3.9 million, which were primarily related to its previously announced strategic reorganization. |
• | Generated net income per diluted share of $0.34 and adjusted net income per diluted share of $0.06, as compared with both net income per diluted share and adjusted net income per diluted share of $0.04 in the prior year quarter. |
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
December 31, | September 30, | ||||||
2017 | 2017 | ||||||
(in millions, except share amounts) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | 348.3 | $ | 361.7 | |||
Receivables, net | 107.4 | 145.3 | |||||
Inventories | 155.2 | 138.9 | |||||
Other current assets | 26.5 | 24.4 | |||||
Total current assets | 637.4 | 670.3 | |||||
Property, plant and equipment, net | 122.3 | 122.3 | |||||
Intangible assets | 434.6 | 439.3 | |||||
Other noncurrent assets | 25.9 | 26.4 | |||||
Total assets | $ | 1,220.2 | $ | 1,258.3 | |||
Liabilities and equity: | |||||||
Current portion of long-term debt | $ | 5.6 | $ | 5.6 | |||
Accounts payable | 51.3 | 82.5 | |||||
Other current liabilities | 46.1 | 53.5 | |||||
Total current liabilities | 103.0 | 141.6 | |||||
Long-term debt | 474.3 | 475.0 | |||||
Deferred income taxes | 76.2 | 115.1 | |||||
Other noncurrent liabilities | 32.4 | 37.1 | |||||
Total liabilities | 685.9 | 768.8 | |||||
Commitments and contingencies | |||||||
Common stock: 600,000,000 shares authorized; 158,539,376 and 158,590,383 shares outstanding at December 31, 2017 and September 30, 2017, respectively | 1.6 | 1.6 | |||||
Additional paid-in capital | 1,482.4 | 1,494.2 | |||||
Accumulated deficit | (900.5 | ) | (955.6 | ) | |||
Accumulated other comprehensive loss | (50.2 | ) | (51.8 | ) | |||
Total Company stockholders’ equity | 533.3 | 488.4 | |||||
Noncontrolling interest | 1.0 | 1.1 | |||||
Total equity | 534.3 | 489.5 | |||||
Total liabilities and equity | $ | 1,220.2 | $ | 1,258.3 |
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
Three months ended | |||||||
December 31, | |||||||
2017 | 2016 | ||||||
(in millions, except per share amounts) | |||||||
Net sales | $ | 178.3 | $ | 167.2 | |||
Cost of sales | 122.9 | 115.4 | |||||
Gross profit | 55.4 | 51.8 | |||||
Operating expenses: | |||||||
Selling, general and administrative | 39.8 | 36.3 | |||||
Gain on sale of idle property | (9.0 | ) | — | ||||
Strategic reorganization and other charges | 3.9 | 1.3 | |||||
Total operating expenses | 34.7 | 37.6 | |||||
Operating income | 20.7 | 14.2 | |||||
Pension costs other than service | 0.2 | 0.3 | |||||
Interest expense, net | 5.2 | 6.4 | |||||
Income before income taxes | 15.3 | 7.5 | |||||
Income taxes: | |||||||
Recurring-basis income tax expense (1) | 2.8 | 2.1 | |||||
Income tax benefit from remeasuring deferred income tax balances (2) | (42.6 | ) | — | ||||
Total income tax expense (benefit) | (39.8 | ) | 2.1 | ||||
Income from continuing operations | 55.1 | 5.4 | |||||
Income from discontinued operations | — | 1.3 | |||||
Net income | $ | 55.1 | $ | 6.7 | |||
Net income per basic share: | |||||||
Continuing operations | $ | 0.35 | $ | 0.03 | |||
Discontinued operations | — | 0.01 | |||||
Net income | $ | 0.35 | $ | 0.04 | |||
Net income per diluted share: | |||||||
Continuing operations | $ | 0.34 | $ | 0.03 | |||
Discontinued operations | — | 0.01 | |||||
Net income | $ | 0.34 | $ | 0.04 | |||
Weighted average shares outstanding: | |||||||
Basic | 158.5 | 161.8 | |||||
Diluted | 160.0 | 164.6 | |||||
Dividends declared per share | $ | 0.04 | $ | 0.03 | |||
(1) Effective tax rates for the first quarter are generally lower than the full-year rate due to the impact of discrete items during the quarter, particularly certain effects of stock compensation transactions. | |||||||
(2) U.S. federal income tax legislation was enacted during the quarter ended December 31, 2017 that reduced the federal income tax rate, which required a remeasurement of net deferred tax liabilities to reflect the enacted tax rates in effect when the Company expects to recognize the related tax expenses or benefits. | |||||||
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
Three months ended | |||||||
December 31, | |||||||
2017 | 2016 | ||||||
(in millions) | |||||||
Operating activities: | |||||||
Net income | $ | 55.1 | $ | 6.7 | |||
Less income from discontinued operations | — | 1.3 | |||||
Income from continuing operations | 55.1 | 5.4 | |||||
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities of continuing operations: | |||||||
Depreciation | 4.9 | 4.9 | |||||
Amortization | 5.7 | 5.4 | |||||
Stock-based compensation | 2.0 | 1.8 | |||||
Retirement plans | 0.7 | 0.8 | |||||
Deferred income taxes | (39.7 | ) | (2.1 | ) | |||
Gain on sale | (9.0 | ) | — | ||||
Other, net | 0.7 | 0.3 | |||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Receivables | 38.4 | 27.4 | |||||
Inventories | (16.3 | ) | (12.2 | ) | |||
Other assets | (0.8 | ) | (0.8 | ) | |||
Liabilities | (41.2 | ) | (50.8 | ) | |||
Net cash provided by (used in) operating activities of continuing operations | 0.5 | (19.9 | ) | ||||
Investing activities: | |||||||
Capital expenditures | (6.4 | ) | (4.2 | ) | |||
Proceeds from sales of assets | 7.4 | — | |||||
Net cash provided by (used in) investing activities of continuing operations | 1.0 | (4.2 | ) | ||||
Financing activities: | |||||||
Dividends | (6.3 | ) | (4.8 | ) | |||
Employee taxes related to stock-based compensation | (1.8 | ) | (2.5 | ) | |||
Repayments of debt | (1.2 | ) | (1.3 | ) | |||
Issuance of common stock | 4.3 | 0.4 | |||||
Stock repurchased under buyback program | (10.0 | ) | — | ||||
Other | — | 0.1 | |||||
Net cash used in financing activities of continuing operations | (15.0 | ) | (8.1 | ) | |||
Net cash flows from discontinued operations: | |||||||
Operating activities | — | 12.4 | |||||
Investing activities | — | (2.1 | ) | ||||
Financing activities | — | (0.1 | ) | ||||
Net cash provided by discontinued operations | — | 10.2 | |||||
Effect of currency exchange rate changes on cash | 0.1 | (0.7 | ) | ||||
Net change in cash and cash equivalents | (13.4 | ) | (22.7 | ) | |||
Cash and cash equivalents at beginning of period | 361.7 | 195.0 | |||||
Cash and cash equivalents at end of period | $ | 348.3 | $ | 172.3 |
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES (UNAUDITED) | |||||||||||||||
Quarter ended December 31, 2017 | |||||||||||||||
Infrastructure | Technologies | Corporate | Consolidated | ||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||
Net sales | $ | 160.1 | $ | 18.2 | $ | — | $ | 178.3 | |||||||
Gross profit | $ | 52.5 | $ | 2.9 | $ | — | $ | 55.4 | |||||||
Selling, general and administrative expenses | 24.4 | 7.5 | 7.9 | 39.8 | |||||||||||
Gain on sale of idle property | — | — | (9.0 | ) | (9.0 | ) | |||||||||
Strategic reorganization and other charges | — | 0.1 | 3.8 | 3.9 | |||||||||||
Operating income (loss) (1) | $ | 28.1 | $ | (4.7 | ) | $ | (2.7 | ) | $ | 20.7 | |||||
Operating margin | 17.6 | % | (25.8 | )% | 11.6 | % | |||||||||
Capital expenditures | $ | 4.8 | $ | 1.5 | $ | 0.1 | $ | 6.4 | |||||||
Reconciliation of non-GAAP performance measures to GAAP performance measures: | |||||||||||||||
Net income | $ | 55.1 | |||||||||||||
Income tax benefit from remeasuring deferred income tax balances | (42.6 | ) | |||||||||||||
Gain on sale of idle property | (9.0 | ) | |||||||||||||
Strategic reorganization and other charges | 3.9 | ||||||||||||||
Income tax benefit of adjusting items | 1.4 | ||||||||||||||
Adjusted net income | $ | 8.8 | |||||||||||||
Weighted average diluted shares outstanding | 160.0 | ||||||||||||||
Adjusted net income per diluted share | $ | 0.06 | |||||||||||||
Net income | $ | 55.1 | |||||||||||||
Income tax benefit (1) | (39.8 | ) | |||||||||||||
Interest expense, net (1) | 5.2 | ||||||||||||||
Pension costs other than service | 0.2 | ||||||||||||||
Operating income (loss) | $ | 28.1 | $ | (4.7 | ) | $ | (2.7 | ) | 20.7 | ||||||
Gain on sale of idle property | — | — | (9.0 | ) | (9.0 | ) | |||||||||
Strategic reorganization and other charges | — | 0.1 | 3.8 | 3.9 | |||||||||||
Adjusted operating income (loss) | 28.1 | (4.6 | ) | (7.9 | ) | 15.6 | |||||||||
Pension costs other than service | (0.1 | ) | — | (0.1 | ) | (0.2 | ) | ||||||||
Depreciation and amortization | 9.1 | 1.4 | 0.1 | 10.6 | |||||||||||
Adjusted EBITDA | $ | 37.1 | $ | (3.2 | ) | $ | (7.9 | ) | $ | 26.0 | |||||
Adjusted operating margin | 17.6 | % | (25.3 | )% | 8.7 | % | |||||||||
Adjusted EBITDA margin | 23.2 | % | (17.6 | )% | 14.6 | % | |||||||||
(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, 2017 | |||||||||||||||
Infrastructure | Technologies | Corporate | Consolidated | ||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||
Adjusted EBITDA | $ | 37.1 | $ | (3.2 | ) | $ | (7.9 | ) | $ | 26.0 | |||||
Three prior quarters’ adjusted EBITDA | 168.2 | (3.6 | ) | (26.3 | ) | 138.3 | |||||||||
Trailing twelve months’ adjusted EBITDA | $ | 205.3 | $ | (6.8 | ) | $ | (34.2 | ) | $ | 164.3 | |||||
Reconciliation of net debt to total debt (end of period): | |||||||||||||||
Current portion of long-term debt | $ | 5.6 | |||||||||||||
Long-term debt | 474.3 | ||||||||||||||
Total debt | 479.9 | ||||||||||||||
Less cash and cash equivalents | 348.3 | ||||||||||||||
Net debt | $ | 131.6 | |||||||||||||
Net debt leverage (net debt divided by trailing twelve months’ adjusted EBITDA) | 0.8x | ||||||||||||||
Reconciliation of free cash flow to net cash provided by operating activities of continuing operations: | |||||||||||||||
Net cash provided by operating activities of continuing operations | $ | 0.5 | |||||||||||||
Less capital expenditures | (6.4 | ) | |||||||||||||
Free cash flow | $ | (5.9 | ) |
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES (UNAUDITED) | |||||||||||||||
Quarter ended December 31, 2016 | |||||||||||||||
Infrastructure | Technologies | Corporate | Consolidated | ||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||
Net sales | $ | 146.3 | $ | 20.9 | $ | — | $ | 167.2 | |||||||
Gross profit | $ | 47.6 | $ | 4.2 | $ | — | $ | 51.8 | |||||||
Selling, general and administrative expenses | 21.3 | 6.4 | 8.6 | 36.3 | |||||||||||
Other charges | 0.1 | — | 1.2 | 1.3 | |||||||||||
Operating income (loss) (1) | $ | 26.2 | $ | (2.2 | ) | $ | (9.8 | ) | $ | 14.2 | |||||
Operating margin | 17.9 | % | (10.5 | )% | 8.5 | % | |||||||||
Capital expenditures | $ | 3.0 | $ | 1.1 | $ | 0.1 | $ | 4.2 | |||||||
Reconciliation of non-GAAP performance measures to GAAP performance measures: | |||||||||||||||
Net income | $ | 6.7 | |||||||||||||
Income from discontinued operations (after tax) | (1.3 | ) | |||||||||||||
Other charges | 1.3 | ||||||||||||||
Income tax benefit of adjusting items | (0.4 | ) | |||||||||||||
Adjusted net income | $ | 6.3 | |||||||||||||
Weighted average diluted shares outstanding | 164.6 | ||||||||||||||
Adjusted net income per diluted share | $ | 0.04 | |||||||||||||
Net income | $ | 6.7 | |||||||||||||
Income from discontinued operations (after tax) | (1.3 | ) | |||||||||||||
Income tax expense (1) | 2.1 | ||||||||||||||
Interest expense, net (1) | 6.4 | ||||||||||||||
Pension costs other than service | 0.3 | ||||||||||||||
Operating income (loss) | $ | 26.2 | $ | (2.2 | ) | $ | (9.8 | ) | 14.2 | ||||||
Other charges | 0.1 | — | 1.2 | 1.3 | |||||||||||
Adjusted operating income (loss) | 26.3 | (2.2 | ) | (8.6 | ) | 15.5 | |||||||||
Pension costs other than service | (0.1 | ) | — | (0.2 | ) | (0.3 | ) | ||||||||
Depreciation and amortization | 9.0 | 1.2 | 0.1 | 10.3 | |||||||||||
Adjusted EBITDA | $ | 35.2 | $ | (1.0 | ) | $ | (8.7 | ) | $ | 25.5 | |||||
Adjusted operating margin | 18.0 | % | (10.5 | )% | 9.3 | % | |||||||||
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 | |||||||||||||||
Infrastructure | 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 | ) | |||||||||||||
$ | (24.1 | ) |
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