Airo AV Declares Mueller Water Products Reports 2019 Third Quarter Results N... - Jonathan Cartu Residential & Industrial Construction Services
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Airo AV Declares Mueller Water Products Reports 2019 Third Quarter Results N…

Mueller Water Products Reports 2019 Third Quarter Results N...

Airo AV Declares Mueller Water Products Reports 2019 Third Quarter Results N…


Increased Net Sales 9.6 percent to $274.3 million

Reported Net Income per Diluted Share of $0.21

Delivered Adjusted Net Income per Diluted Share of $0.24

ATLANTA, Aug. 05, 2019 (GLOBE NEWSWIRE) —  Mueller Water Products, Inc. (NYSE: MWA) announced today that for its fiscal 2019 third quarter ended June 30, 2019, net sales were $274.3 million and net income was $33.7 million.

In the 2019 third quarter, the Company:

  • Increased net sales 9.6 percent to $274.3 million as compared with $250.2 million in the prior year quarter.
  • Generated operating income of $47.2 million as compared with $30.6 million in the prior year quarter.  Increased adjusted operating income 9.9 percent to $52.0 million as compared with $47.3 million in the prior year quarter.
  • Achieved net income of $33.7 million as compared with $15.3 million in the prior year quarter.  Adjusted net income increased 26.3 percent to $37.9 million as compared with $30.0 million in the prior year quarter.
  • Reported net income per diluted share of $0.21 as compared with $0.10 in the prior year quarter.  Achieved adjusted net income per diluted share of $0.24 as compared with $0.19 in the prior year quarter.
  • Increased adjusted EBITDA 13.0 percent to $65.4 million as compared with $57.9 million in the prior year quarter.

“I am pleased with our performance in the quarter.  The team produced solid growth both in sales and adjusted EBITDA.  Our consolidated net sales increased 9.6 percent and our organic net sales increased 4.6 percent as we benefited from both higher pricing and shipment volumes,” said Scott Hall, President and Chief Executive Officer of Mueller Water Products.

“Our gross margin improved 90 basis points to over 36 percent in the quarter, excluding the impact of the inventory step-up at Krausz.  This performance helped deliver adjusted EBITDA growth of 13.0 percent with favorable contributions from both Infrastructure and Technologies.

“We remain on track to meet the net sales and adjusted EBITDA target ranges we communicated in our second quarter earnings release.  We are focused on continuing our momentum in the fourth quarter and finishing the year on a strong note, even as we compare performance to the fourth quarter of the prior year, in which we reported a 12 percent organic increase in net sales.

“Looking forward, with the support of our strong balance sheet, we will continue to maintain a balanced approach to capital allocation. We are prioritizing capital investments to improve our manufacturing operations and enhance the technological fundamentals in our business. We are initiating a multi-year project at our brass manufacturing facility in Decatur, Illinois, which will enable us to unlock significant efficiencies for Infrastructure and Technologies.

“Over the next few years, we plan further reinvestment in our manufacturing base to enable us to accelerate strategies for new product development and operational efficiencies.  We expect these initiatives will drive above-market sales growth, additional margin expansion and improved performance.  As we execute our strategies, we will also continue to return cash to shareholders through our ongoing share repurchase program and quarterly dividend.  During the third quarter, we repurchased $10 million worth of stock and recently announced an increase in our quarterly dividend.”

Consolidated Results

Net sales for the 2019 third quarter increased 9.6 percent, or $24.1 million, to $274.3 million, as compared with $250.2 million in the 2018 third quarter.

Adjusted operating income increased 9.9 percent to $52.0 million for the 2019 third quarter as compared with $47.3 million in the 2018 third quarter.

During the 2019 third quarter, we recorded $2.5 million of strategic reorganization and other charges.

Segment Results

Infrastructure

Net sales for the 2019 third quarter increased 11.6 percent, or $26.1 million, to $250.2 million, as compared with $224.1 million in the 2018 third quarter.  This increase was due to the sales from Krausz Industries, and higher pricing and shipment volumes as organic net sales increased 6.1 percent in the quarter as compared with the prior year.

Operating income was $60.6 million and adjusted operating income was $62.9 million in the quarter, excluding Krausz inventory step-up amortization of $2.3 million.  Adjusted operating income increased 10.4 percent, or $5.9 million, as compared with the prior year quarter, primarily due to higher pricing, shipment volumes and the inclusion of Krausz Industries, partially offset by higher costs associated with inflation, increased SG&A expenses and manufacturing performance.

Adjusted EBITDA of $74.2 million increased 12.1 percent, or $8.0 million, as compared with $66.2 million in the prior year quarter.

Technologies

Net sales for the 2019 third quarter decreased $2.0 million to $24.1 million primarily due to lower volumes at Metrology, partially offset by sales increases at Echologics.

Operating loss and adjusted operating loss were $2.2 million.  Adjusted operating loss increased $0.2 million as compared with $2.0 million in the prior year quarter, primarily due to lower shipment volumes and manufacturing performance, partially offset by improved product mix and lower SG&A expenses.

Adjusted EBITDA improved $0.3 million for a loss of $0.2 million as compared with a loss of $0.5 million in the prior year quarter.

Income Taxes

Income tax expense was $8.9 million, or 20.9 percent of income before tax.

Full-Year 2019 Outlook

The Company’s expectations for full-year 2019, which reflect the current business environment and include the results of Krausz Industries, are as follows:

  • Growth in all end markets during the fourth quarter of 2019 with municipal spending growth in the mid-single digit range, residential construction growth in the low-single digit range and natural gas distribution growth in the mid-single digit range.
  • Consolidated net sales growth towards the lower end of the 7 to 9 percent range previously provided.
  • Growth in adjusted EBITDA towards the midpoint of the 12 to 15 percent range previously provided (as compared with $180.0 million of adjusted EBITDA in 2018), based on the current outlook for net sales, product mix and inflation.
  • Depreciation and amortization about $53 million.
  • Corporate SG&A expenses between $34 million and $35 million.
  • Net interest expense around $21 million and an annual effective income tax rate between 23 and 25 percent.
  • Capital expenditures about $80 million with ongoing evaluation of additional investment opportunities.

Conference Call Webcast

Mueller Water Products’ quarterly earnings conference call will take place Tuesday August 6, 2019, at 9:00 a.m. ET.  Members of Mueller Water Products’ leadership team will discuss the Company’s recent financial performance and respond to questions from financial analysts.  A live webcast of the call will be available on the Investor Relations section of the Company’s website.  Please go to the website (www.muellerwaterproducts.com) at least 15 minutes prior to the start of the call to register, download and install any necessary software.  A replay of the call will be available for 30 days and can be accessed by dialing 1-866-457-5519.  An archive of the webcast will also be available on the Investor Relations section of the Company’s website.

Use of Non-GAAP 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 tools, and securities analysts, investors and other interested parties should not consider any of these non-GAAP measures in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.  These non-GAAP measures may not be comparable to similarly titled measures used by other companies.

The Company presents adjusted net income, adjusted net income per diluted share, adjusted operating income, adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin as performance measures because management uses these measures in evaluating the Company’s underlying performance on a consistent basis across periods and in making decisions about operational strategies.  Management also believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of the Company’s recurring performance.

The Company presents net debt and net debt leverage as performance measures because management uses them in evaluating its capital management, and the investment community commonly uses them as measures of indebtedness.  The Company presents free cash flow because management believes it is commonly used by the investment community to measure the Company’s ability to create liquidity.

The calculations of these non-GAAP measures and reconciliations to GAAP results are included as an attachment to this press release and have been posted online at www.muellerwaterproducts.com.

Forward-Looking Statements

This press release 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, believe or anticipate will or may occur in the future are forward-looking statements, including statements regarding our go-to-market strategies, operational excellence, acceleration of new product development, continued growth in our end markets, net sales growth, organic adjusted operating income and adjusted EBITDA growth, capital allocation and growth strategies and future warranty charges.  Forward-looking statements are based on certain assumptions and assessments made by us in light of our…

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