Mueller Water Products Reports Fiscal 2013 First Quarter Results

Tue Feb 5, 2013 5:00pm EST

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ATLANTA--(Business Wire)--
Mueller Water Products, Inc. (NYSE: MWA) today reported net sales of $245.1
million and net income of $7.0 million for the fiscal 2013 first quarter ended
December 31, 2012. The following compares 2013 first quarter results from
continuing operations to the prior year period. In the quarter, the Company:

* Increased net sales 13.8 percent to $245.1 million from $215.4 million. 
* Grew operating income 16.9 percent to $6.9 million from $5.9 million, while
adjusted operating income increased 20.6 percent to $7.6 million from $6.3
million. 
* Improved adjusted net loss per diluted share to $0.02 from a loss of $0.04. 
* Increased adjusted EBITDA to $22.4 million from $21.3 million.

Subsequent to the end of the quarter, the Company announced its intention to
redeem $22.5 million in principal amount of its 8.75 percent Senior Unsecured
Notes on February 22, 2013. 

"Our consolidated performance improved again in the first quarter, as
demonstrated by a 13.8 percent increase in net sales and a 20.6 percent increase
in adjusted operating income," said Gregory E. Hyland, chairman, president and
chief executive officer of Mueller Water Products. 

"Shipments of Mueller Co.`s valves, hydrants and brass products increased in the
quarter year-over-year, which we believe was due to continued improvement in
both the municipal and residential construction markets. Net sales of Mueller
Co.`s newer technology products and services more than doubled in the quarter on
a year-over-year basis, demonstrating the traction we believe these products and
services are gaining in the marketplace. Although these products and services
negatively impacted Mueller Co.`s adjusted operating margin in the quarter, the
incremental margin from increased net sales was encouraging, and we believe
there is room for further improvement especially as deployment of our Advanced
Metering Infrastructure system grows. 

"Anvil`s net sales also increased year-over-year. However, as we expected,
adjusted operating income was negatively impacted by higher per-unit overhead
costs due to lower production during the second half of 2012. 

"Overall, results for the quarter were about as we anticipated. We look forward
to our performance improving further over the remainder of the year as our end
markets are expected to continue to recover." 

First Quarter Consolidated Results

Net sales for the 2013 first quarter increased $29.7 million, or 13.8 percent,
to $245.1 million, from 2012 first quarter net sales of $215.4 million, due
primarily to higher shipment volumes. 

Adjusted operating income for the 2013 first quarter increased 20.6 percent to
$7.6 million from adjusted operating income of $6.3 million for the 2012 first
quarter. This increase was driven primarily by higher shipment volumes, higher
sales prices and lower raw material costs, partially offset by higher per-unit
overhead costs. 

Selling, general and administrative expenses decreased as a percent of net sales
to 20.2 percent for the 2013 first quarter from 21.6 percent for the 2012 first
quarter. 

First Quarter Segment Results

Mueller Co.

Net sales for the 2013 first quarter increased 18.0 percent to $151.1 million
from net sales of $128.1 million for the 2012 first quarter. This increase was
due to higher shipment volumes across most of Mueller Co.`s products, especially
metering systems, valves, hydrants and brass products. 

Adjusted operating income for the 2013 first quarter improved 72.5 percent to
$8.8 million as compared with $5.1 million for the 2012 first quarter. Adjusted
operating margin for the 2013 first quarter improved 180 basis points to 5.8
percent as compared with 4.0 percent for the 2012 first quarter. 

Anvil

Net sales for the 2013 first quarter increased 7.7 percent to $94.0 million as
compared with $87.3 million for the 2012 first quarter. The increase resulted
primarily from higher shipment volumes. 

Adjusted operating income for the 2013 first quarter of $5.9 million compares to
adjusted operating income for the 2012 first quarter of $7.8 million. Anvil`s
adjusted operating income declined due to lower production levels in the second
half of 2012, which caused higher per-unit overhead costs in inventory that
adversely impacted operating results this quarter. 

Interest Expense, Net

Interest expense, net, excluding terminated swap contracts, decreased $0.7
million in the 2013 first quarter year-over-year due primarily to lower levels
of total debt outstanding. Interest expense, net, for the 2013 first quarter was
$13.5 million compared to $14.2 million for the 2012 first quarter, excluding
$1.4 million of non-cash costs for terminated interest rate swap contracts. 

Income Taxes

During the 2013 first quarter, income tax benefit was $1.6 million on pre-tax
loss of $6.6 million, or an effective income tax rate of 24.2 percent. The 2013
first quarter benefit was reduced by $0.8 million related to a deferred tax
valuation allowance adjustment. Excluding this adjustment, the effective tax
rate for the 2013 first quarter was 36.4 percent. Net operating loss
carryforwards remain available to offset future taxable earnings. 

Use of Non-GAAP Measures

The Company presents adjusted operating income (loss), adjusted operating
margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss),
adjusted net income (loss) per diluted share, free cash flow, net debt and net
debt leverage as non-GAAP measures. Adjusted operating income (loss) represents
operating income (loss) excluding restructuring. This amount divided by net
sales is adjusted operating margin. Adjusted EBITDA represents operating income
(loss) excluding restructuring, depreciation and amortization. This amount
divided by net sales is adjusted EBITDA margin. The Company presents adjusted
operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted
EBITDA margin because these are measures management believes are frequently used
by securities analysts, investors and other interested parties in the evaluation
of financial performance. Adjusted net income (loss) and adjusted net income
(loss) per diluted share exclude, on an after-tax basis, discontinued
operations, restructuring, certain costs from settled interest rate swap
contracts, certain tax adjustments and expenses related to the early
extinguishment of debt. These items are excluded because they are not considered
indicative of recurring operations. Free cash flow represents cash flows from
operating activities less capital expenditures from continuing operations. It is
presented as a measurement of cash flows because management believes it is
commonly used by the investment community. Net debt represents total debt less
cash and cash equivalents. Net debt leverage represents net debt divided by
trailing 12 months adjusted EBITDA. Net debt and net debt leverage are commonly
used by the investment community as measures of indebtedness. 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 accounting principles generally accepted in the United States
("GAAP"). These non-GAAP measures may not be comparable to similarly titled
measures used by other companies. 

A reconciliation of non-GAAP to GAAP results is included as an attachment to
this press release and has been posted online at www.muellerwaterproducts.com. 

Conference Call Webcast

Mueller Water Products` quarterly earnings conference call will take place
Wednesday, February 6, 2013 at 9:00 a.m. ET. 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 after the call. To access the replay,
please dial 1-866-470-7045. The replay will also be available as a webcast on
the investor relations section of the Company`s website. 

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. Examples of
forward-looking statements include, but are not limited to, statements we make
regarding recovery in our end markets and the traction we believe Mueller Co.`s
newer technology products and services are gaining. Forward-looking statements
are based on certain assumptions and assessments made by us in light of our
experience and perception of historical trends, current conditions and expected
future developments. Actual results and the timing of events may differ
materially from those contemplated by the forward-looking statements due to a
number of factors, including regional, national or global political, economic,
business, competitive, market and regulatory conditions and the other factors
that are described in the section entitled "RISK FACTORS" in Item 1A of our most
recently filed Annual Report on Form 10-K. Undue reliance should not be placed
on any forward-looking statements. We do not have any intention or obligation to
update forward-looking statements, except as required by law. 

About Mueller Water Products, Inc.

Mueller Water Products, Inc. (NYSE: MWA) is a leading manufacturer and marketer
of products and services used in the transmission, distribution and measurement
of water. Our broad product and service portfolio includes engineered valves,
fire hydrants, metering products and systems, leak detection and pipe condition
assessment. We help municipalities increase operational efficiencies, improve
customer service and prioritize capital spending, demonstrating why Mueller
Water Products is Where Intelligence Meets Infrastructure. The piping component
systems produced by Anvil help build connections that last in commercial,
industrial and oil & gas applications. Visit us at
www.muellerwaterproducts.com.

 MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES                                                                       
 CONDENSED CONSOLIDATED BALANCE SHEETS                                                                               
 (UNAUDITED)                                                                                                         
                                                                                                                     
                                                             December 31,                    September 30,           
                                                                    2012                            2012             
                                                             (in millions)                                           
 Assets:                                                                                                             
 Cash and cash equivalents                                   $      74.5                     $      83.0             
 Receivables, net                                                   135.9                           166.1            
 Inventories                                                        190.2                           183.2            
 Deferred income taxes                                              20.7                            19.6             
 Other current assets                                               48.2                            38.0             
 Total current assets                                               469.5                           489.9            
                                                                                                                     
 Property, plant and equipment, net                                 143.5                           144.7            
 Identifiable intangible assets                                     566.6                           573.7            
 Other noncurrent assets                                            20.3                            32.6             
                                                                                                                     
 Total assets                                                $      1,199.9                  $      1,240.9          
                                                                                                                     
 Liabilities and stockholders' equity:                                                                               
 Current portion of long-term debt                           $      23.7                     $      1.1              
 Accounts payable                                                   63.0                            84.5             
 Other current liabilities                                          67.2                            82.8             
 Total current liabilities                                          153.9                           168.4            
                                                                                                                     
 Long-term debt                                                     599.3                           621.7            
 Deferred income taxes                                              125.5                           132.8            
 Other noncurrent liabilities                                       82.5                            86.8             
 Total liabilities                                                  961.2                           1,009.7          
                                                                                                                     
 Commitments and contingencies                                                                                       
                                                                                                                     
 Common stock: 600,000,000 shares authorized;                                                                        
 157,505,500 shares and 156,840,648 shares outstanding at                                                            
 December 31, 2012 and September 30, 2012, respectively             1.6                             1.6              
 Additional paid-in capital                                         1,585.1                         1,587.3          
 Accumulated deficit                                                (1,263.0  )                     (1,270.0  )      
 Accumulated other comprehensive loss                               (85.0     )                     (87.7     )      
 Total stockholders' equity                                         238.7                           231.2            
                                                                                                                     
 Total liabilities and stockholders' equity                  $      1,199.9                  $      1,240.9          
                                                                                                                     
                                                                                                                     


 MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES                                                               
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                                             
 (UNAUDITED)                                                                                                 
                                                                                                             
                                                               Three months ended                            
                                                               December 31,                                  
                                                                    2012                        2011         
                                                               (in millions)                                 
                                                                                                             
 Net sales                                                     $    245.1                  $    215.4        
 Cost of sales                                                      188.0                       162.6        
                                                                                                             
 Gross profit                                                       57.1                        52.8         
                                                                                                             
 Operating expenses:                                                                                         
 Selling, general and administrative                                49.5                        46.5         
 Restructuring                                                      0.7                         0.4          
 Total operating expenses                                           50.2                        46.9         
                                                                                                             
 Operating income                                                   6.9                         5.9          
                                                                                                             
 Interest expense, net                                              13.5                        15.6         
                                                                                                             
 Loss before income taxes                                           (6.6    )                   (9.7    )    
 Income tax benefit                                                 (1.6    )                   (3.2    )    
                                                                                                             
 Loss from continuing operations                                    (5.0    )                   (6.5    )    
 Income (loss) from discontinued operations, net of tax             12.0                        (5.4    )    
                                                                                                             
 Net income (loss)                                             $    7.0                    $    (11.9   )    
                                                                                                             
 Net income (loss) per basic share:                                                                          
 Continuing operations                                         $    (0.03   )              $    (0.04   )    
 Discontinued operations                                            0.07                        (0.04   )    
 Net income (loss)                                             $    0.04                   $    (0.08   )    
                                                                                                             
 Net income (loss) per diluted share:                                                                        
 Continuing operations                                         $    (0.03   )              $    (0.04   )    
 Discontinued operations                                            0.07                        (0.04   )    
 Net income (loss)                                             $    0.04                   $    (0.08   )    
                                                                                                             
 Weighted average shares outstanding:                                                                        
 Basic                                                              157.1                       156.0        
 Diluted                                                            159.2                       156.0        
                                                                                                             
 Dividends declared per share                                  $    0.0175                 $    0.0175       
                                                                                                             
                                                                                                             


   MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES                                                                                                                                                                                      
   CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS` EQUITY                                                                                                                                                                           
   THREE MONTHS ENDED DECEMBER 31, 2012                                                                                                                                                                                               
   (UNAUDITED)                                                                                                                                                                                                                        
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
                                                                                                                                                            Accumulated                                                               
                                                                                 Additional                                                                 other                                                                     
                                                    Common                       paid-in                                  Accumulated                       comprehensive                                                             
                                                    stock                        capital                                  deficit                           loss                             Total                                    
                                                    (in millions)                                                                                                                                                                     
                                                                                                                                                                                                                                      
   Balance at September 30, 2012                    $           1.6              $              1,587.3                   $     (1,270.0  )                 $      (87.7  )                  $                           231.2        
   Net income                                                   -                               -                               7.0                                -                                                     7.0          
   Dividends declared                                           -                               (2.7     )                      -                                  -                                                     (2.7   )     
   Stock-based compensation                                     -                               1.5                             -                                  -                                                     1.5          
   Shares retained for employee taxes                           -                               (1.3     )                      -                                  -                                                     (1.3   )     
   Stock issued under stock compensation plans                  -                               0.3                             -                                  -                                                     0.3          
   Foreign currency translation                                 -                               -                               -                                  (0.7   )                                              (0.7   )     
   Minimum pension liability                                    -                               -                               -                                  3.4                                                   3.4          
                                                                                                                                                                                                                                      
   Balance at December 31, 2012                     $           1.6              $              1,585.1                   $     (1,263.0  )                 $      (85.0  )                  $                           238.7        
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      


 MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES                                                                                                                
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                              
 (UNAUDITED)                                                                                                                                                  
                                                                                                                                                              
                                                                             Three months ended                                                               
                                                                             December 31,                                                                     
                                                                                            2012                                                2011          
                                                                             (in millions)                                                                    
 Operating activities:                                                                                                                                        
 Net income (loss)                                                           $              7.0                                  $              (11.9  )      
 Adjustments to reconcile net income (loss) to net cash                                                                                                       
 provided by operating activities:                                                                                                                            
 (Income) loss from discontinued operations                                                 (12.0  )                                            5.4           
 Loss from continuing operations                                                            (5.0   )                                            (6.5   )      
                                                                                                                                                              
 Depreciation                                                                               7.4                                                 7.6           
 Amortization                                                                               7.4                                                 7.4           
 Stock-based compensation                                                                   1.5                                                 1.4           
 Deferred income taxes                                                                      (1.8   )                                            (1.0   )      
 Retirement plans                                                                           1.1                                                 1.8           
 Interest rate swap contracts                                                               -                                                   1.4           
 Other, net                                                                                 0.8                                                 0.8           
 Changes in assets and liabilities:                                                                                                                           
 Receivables                                                                                30.0                                                26.0          
 Inventories                                                                                (7.1   )                                            (14.1  )      
 Other assets                                                                               (0.4   )                                            0.9           
 Liabilities                                                                                (33.3  )                                            (13.8  )      
                                                                                                                                                              
 Net cash provided by operating activities                                                                                                                    
 from continuing operations                                                                 0.6                                                 11.9          
                                                                                                                                                              
 Investing activities:                                                                                                                                        
 Capital expenditures                                                                       (6.2   )                                            (5.3   )      
 Acquisitions, net of cash acquired                                                         (0.3   )                                            -             
                                                                                                                                                              
 Net cash used in investing activities                                                                                                                        
 from continuing operations                                                                 (6.5   )                                            (5.3   )      
                                                                                                                                                              
 Financing activities:                                                                                                                                        
 Dividends paid                                                                             (2.7   )                                            (2.7   )      
 Shares retained for employee taxes                                                         (1.3   )                                            (0.3   )      
 Payment of deferred financing fees                                                         (0.7   )                                            -             
 Other                                                                                      (0.3   )                                            -             
                                                                                                                                                              
 Net cash used in financing activities                                                                                                                        
 from continuing operations                                                                 (5.0   )                                            (3.0   )      
                                                                                                                                                              
 Net cash flows from discontinued operations:                                                                                                                 
 Operating activities                                                                       (1.7   )                                            (22.9  )      
 Investing activities                                                                       4.5                                                 (2.8   )      
 Financing activities                                                                       -                                                   1.0           
                                                                                                                                                              
 Net cash provided by (used in) discontinued operations                                     2.8                                                 (24.7  )      
                                                                                                                                                              
 Effect of currency exchange rate changes on cash                                           (0.4   )                                            0.4           
                                                                                                                                                              
 Cash and cash equivalents at beginning of period                                           83.0                                                61.0          
                                                                                                                                                              
 Cash and cash equivalents at end of period                                  $              74.5                                 $              40.3          
                                                                                                                                                              
                                                                                                                                                              


 MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES                                                                                                                                                                                                          
 SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES                                                                                                                                                                            
 (UNAUDITED)                                                                                                                                                                                                                                            
 (dollars in millions, except per share amounts)                                                                                                                                                                                                        
                                                                                                                                                                                                                                                        
                                                                                                  Three months ended December 31, 2012                                                                                                                  
                                                                                                  Mueller Co.                            Anvil                                    Corporate                                Total                        
 GAAP results:                                                                                                                                                                                                                                          
        Net sales                                                                                 $     151.1                            $         94.0                           $         -                              $              245.1         
                                                                                                                                                                                                                                                        
        Gross profit                                                                              $     32.9                             $         24.2                           $         -                              $              57.1          
        Selling, general and administrative expenses                                                    24.1                                       18.3                                     7.1                                           49.5          
        Restructuring expenses                                                                          0.7                                        -                                        -                                             0.7           
                             Operating income (loss)                                              $     8.1                              $         5.9                            $         (7.1  )                                       6.9           
        Interest expense, net                                                                                                                                                                                                             13.5          
        Income tax benefit                                                                                                                                                                                                                (1.6   )      
                             Loss from continuing operations                                                                                                                                                                              (5.0   )      
                             Income from discontinued operations, net of tax                                                                                                                                                              12.0          
                                                        Net income                                                                                                                                                         $              7.0           
                                                                                                                                                                                                                                                        
        Net income per diluted share:                                                                                                                                                                                                                   
                             Continuing operations                                                                                                                                                                         $              (0.03  )      
                             Discontinued operations                                                                                                                                                                                      0.07          
                                                        Net income per diluted share                                                                                                                                       $              0.04          
                                                                                                                                                                                                                                                        
        Capital expenditures                                                                      $     3.4                              $         2.8                            $         -                              $              6.2           
                                                                                                                                                                                                                                                        
 Non-GAAP results:                                                                                                                                                                                                                                      
        Adjusted operating income (loss) and EBITDA:                                                                                                                                                                                                    
                             Operating income (loss)                                              $     8.1                              $         5.9                            $         (7.1  )                        $              6.9           
                             Restructuring                                                              0.7                                        -                                        -                                             0.7           
                                                        Adjusted operating income (loss)                8.8                                        5.9                                      (7.1  )                                       7.6           
                             Depreciation and amortization                                              11.2                                       3.5                                      0.1                                           14.8          
                                                        Adjusted EBITDA                           $     20.0                             $         9.4                            $         (7.0  )                        $              22.4          
                                                                                                                                                                                                                                                        
                             Adjusted operating margin                                                  5.8    %                                   6.3   %                                                                                3.1    %      
                             Adjusted EBITDA margin                                                     13.2   %                                   10.0  %                                                                                9.1    %      
                                                                                                                                                                                                                                                        
        Adjusted net loss:                                                                                                                                                                                                                              
                             Net income                                                                                                                                                                                    $              7.0           
                             Discontinued operations, net of tax                                                                                                                                                                          (12.0  )      
                             Restructuring, net of tax                                                                                                                                                                                    0.4           
                             Valuation allowance against beginning of the year                                                                                                                                                                          
                             deferred tax assets                                                                                                                                                                                          0.8           
                                                        Adjusted net loss                                                                                                                                                  $              (3.8   )      
                                                        Adjusted net loss per diluted share                                                                                                                                $              (0.02  )      
                                                                                                                                                                                                                                                        
        Free cash flow:                                                                                                                                                                                                                                 
                             Net cash provided by operating activities                                                                                                                                                     $              0.6           
                             Less capital expenditures                                                                                                                                                                                    (6.2   )      
                                                        Free cash flow                                                                                                                                                     $              (5.6   )      
                                                                                                                                                                                                                                                        
        Net debt (end of period):                                                                                                                                                                                                                       
                             Current portion of long-term debt                                                                                                                                                             $              23.7          
                             Long-term debt                                                                                                                                                                                               599.3         
                                                        Total debt                                                                                                                                                                        623.0         
                             Less cash and cash equivalents                                                                                                                                                                               (74.5  )      
                                                        Net debt                                                                                                                                                           $              548.5         
                                                                                                                                                                                                                                                        
        Adjusted EBITDA:                                                                                                                                                                                                                                
                             Current quarter                                                                                                                                                                               $              22.4          
                             Three prior quarters                                                                                                                                                                                         106.2         
                                                        Adjusted EBITDA                                                                                                                                                    $              128.6         
                                                                                                                                                                                                                                                        
        Net debt leverage (net debt divided by adjusted EBITDA)                                                                                                                                                                           4.3           
                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                        


 MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES                                                                                                                                                                                                                    
 SEGMENT RESULTS AND RECONCILIATION OF GAAP TO NON-GAAP PERFORMANCE MEASURES                                                                                                                                                                                      
 (UNAUDITED)                                                                                                                                                                                                                                                      
 (dollars in millions, except per share amounts)                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                             Three months ended December 31, 2011                                                                                                                                 
                                                                                             Mueller Co.                            Anvil                                              Corporate                                Total                             
 GAAP results:                                                                                                                                                                                                                                                    
        Net sales                                                                            $     128.1                            $                   87.3                           $         -                              $                   215.4         
                                                                                                                                                                                                                                                                  
        Gross profit                                                                         $     28.5                             $                   24.3                           $         -                              $                   52.8          
        Selling, general and administrative expenses                                               23.4                                                 16.5                                     6.6                                                46.5          
        Restructuring expenses                                                                     0.4                                                  0.1                                      (0.1  )                                            0.4           
                         Operating income (loss)                                             $     4.7                              $                   7.7                            $         (6.5  )                                            5.9           
        Interest expense, net                                                                                                                                                                                                                       15.6          
        Income tax benefit                                                                                                                                                                                                                          (3.2   )      
                         Loss from continuing operations                                                                                                                                                                                            (6.5   )      
                         Loss from discontinued operations, net of tax                                                                                                                                                                              (5.4   )      
                                                   Net loss                                                                                                                                                                     $                   (11.9  )      
                                                                                                                                                                                                                                                                  
        Net loss per diluted share:                                                                                                                                                                                                                               
                         Continuing operations                                                                                                                                                                                  $                   (0.04  )      
                         Discontinued operations                                                                                                                                                                                                    (0.04  )      
                                                   Net loss per diluted share                                                                                                                                                   $                   (0.08  )      
                                                                                                                                                                                                                                                                  
        Capital expenditures                                                                 $     3.4                              $                   1.9                            $         -                              $                   5.3           
                                                                                                                                                                                                                                                                  
 Non-GAAP results:                                                                                                                                                                                                                                                
        Adjusted operating income (loss) and EBITDA:                                                                                                                                                                                                              
                         Operating income (loss)                                             $     4.7                              $                   7.7                            $         (6.5  )                        $                   5.9           
                         Restructuring                                                             0.4                                                  0.1                                      (0.1  )                                            0.4           
                                                   Adjusted operating income (loss)                5.1                                                  7.8                                      (6.6  )                                            6.3           
                         Depreciation and amortization                                             11.2                                                 3.6                                      0.2                                                15.0          
                                                   Adjusted EBITDA                           $     16.3                             $                   11.4                           $         (6.4  )                        $                   21.3          
                                                                                                                                                                                                                                                                  
                         Adjusted operating margin                                                 4.0    %                                             8.9   %                                                                                     2.9    %      
                         Adjusted EBITDA margin                                                    12.7   %                                             13.1  %                                                                                     9.9    %      
                                                                                                                                                                                                                                                                  
        Adjusted net loss:                                                                                                                                                                                                                                        
                         Net loss                                                                                                                                                                                               $                   (11.9  )      
                         Discontinued operations, net of tax                                                                                                                                                                                        5.4           
                         Interest rate swap settlement costs, net of tax                                                                                                                                                                            0.8           
                         Restructuring, net of tax                                                                                                                                                                                                  0.2           
                                                   Adjusted net loss                                                                                                                                                            $                   (5.5   )      
                                                   Adjusted net loss per diluted share                                                                                                                                          $                   (0.04  )      
                                                                                                                                                                                                                                                                  
        Free cash flow:                                                                                                                                                                                                                                           
                         Net cash provided by operating activities                                                                                                                                                              $                   11.9          
                         Less capital expenditures                                                                                                                                                                                                  (5.3   )      
                                                   Free cash flow                                                                                                                                                               $                   6.6           
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  


Mueller Water Products, Inc.
Investor Contact:
Martie Edmunds Zakas, 770-206-4237
Sr. Vice President - Strategy, Corporate Development
& Communications
mzakas@muellerwp.com
or
Media Contact:
John Pensec, 770-206-4240
Sr. Director - Corporate Communications & Public Affairs
jpensec@muellerwp.com



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