Mueller Water Products, Inc. (NYSE: MWA) today announced selected
preliminary financial information for its fourth quarter and fiscal
year ended September 30, 2023, and updated timing for
reporting results for fiscal 2023.
As previously announced on October 28, 2023, the Company
recently identified a cybersecurity incident impacting certain of
its operational and information technology systems. The
cybersecurity incident has disrupted access to certain systems and
information, impacting the Company’s ability to finalize its fiscal
2023 financial statements. Therefore, the Company is postponing its
quarterly earnings conference call for the fourth quarter and
fiscal 2023. At a later date, the Company will make an announcement
related to the timing of its earnings release and conference call
to discuss the Company’s fourth quarter and fiscal 2023 results and
respond to questions from financial analysts.
“For fiscal 2023, our preliminary consolidated net sales and
adjusted EBITDA exceeded the expectations we provided with our
third quarter 2023 results. We ended fiscal 2023 with a strong
balance sheet and liquidity, allowing us to continue reinvesting in
our operations while returning cash to shareholders through our
quarterly dividend, which was recently increased for the eighth
time since 2014, as well as through share repurchases,” said Martie
Edmunds Zakas, Chief Executive Officer of Mueller Water
Products.
“Our teams are working around the clock to restore normal
operations from the cybersecurity incident. This includes working
with leading third-party cybersecurity specialists to support our
investigation and recovery efforts. We are focused on systems
remediation and restoration in order to minimize the impact on
customers and employees, as we remain centered on serving our
customers,” Ms. Zakas concluded.
The Company is sharing the following selected preliminary
financial information which has not been reviewed or audited by the
Company’s independent auditor. The following preliminary financial
information should not be considered final until the Company files
its Annual Report on Form 10-K for the year ended September 30,
2023 (the “Annual Report”). See “Note Regarding Preliminary
Information” below.
Selected Preliminary Financial Information for Fiscal 2023:
- Consolidated net sales are
anticipated to be between $1,260 million and $1,275 million (1.0
percent to 2.2 percent higher than the prior year), as compared
with expectations for annual consolidated net sales to be between
flat and down 2 percent compared with the prior year (1)
- Adjusted EBITDA is expected to be
between $197 million and $203 million (1.3 percent to 4.4 percent
higher than the prior year), as compared with expectations for
annual consolidated adjusted EBITDA to be between flat and down 5
percent compared with the prior year (1,2)
- During fiscal 2023, approximately
$48 million was returned to shareholders through dividends and
common stock repurchases, including $10 million of common stock
repurchased during the fiscal 2023 fourth quarter
- As of September 30, 2023, total
debt outstanding was approximately $447 million and cash and cash
equivalents were approximately $160 million
- As of September 30, 2023, total
liquidity was approximately $322 million, including approximately
$162 million of excess availability under the Company’s ABL
Agreement
(1) See Full-Year Fiscal 2023 Outlook provided with Q3FY23
earnings release dated August 3, 2023.(2) Adjusted EBITDA includes
estimated GAAP operating income with a range between $122 million
and $128 million, with strategic reorganization and other charges
of approximately $10 million, a $6 million warranty charge, pension
expense other than service of $4 million and depreciation and
amortization of approximately $63 million. Strategic reorganization
and other charges include expenses associated with the leadership
transition and other charges, including restructuring charges
related to severance and certain transaction-related
expenses.
Note Regarding Preliminary Information
The Company’s management has prepared the estimates for the
three months and year ended September 30, 2023, presented above in
good faith based upon the most recent information available to the
Company’s management from its internal reporting procedures as of
the date of this release. The preliminary estimated ranges set
forth herein are preliminary, unaudited, subject to further
completion and reflect the Company’s current good faith estimates,
are subject to additional financial closing procedures and may be
revised as a result of management’s further review of the Company’s
results and any adjustments or other developments that may result
from the completion of the audit of the fiscal 2023 consolidated
financial statements. Unless otherwise indicated or the context
otherwise requires, “expectations” refer to the expectations set
forth in the Company’s earnings release dated August 3, 2023. The
Company and its independent auditors have not completed their
normal quarterly review or annual audit procedures as of and for
the three months and year ended September 30, 2023, and there can
be no assurance that its final results for this quarterly and
annual period will not differ from these estimates. Any such
differences could be material. During such procedures, items may be
identified which might result in material adjustments to the
preliminary financial information presented above. As a result, the
Company’s actual results may differ materially from the fourth
quarter and year end estimates above. Accordingly, you should not
place undue reliance on these preliminary estimates. These
estimates should not be viewed as a substitute for the Company’s
annual audited financial statements prepared in accordance with
accounting principles generally accepted in the United States
(“GAAP”). In addition, these preliminary estimates as of and for
the three months and year ended September 30, 2023, are not
necessarily indicative of the results to be achieved for any future
period. Factors that could cause these preliminary estimates to
differ include, but are not limited to, the discovery of new
information that alters expectations about fourth quarter and year
end results or impacts valuation methodologies underlying these
results. The Company undertakes no obligation to update or
supplement the information provided in this press release until the
Company releases its financial information for the three months and
fiscal year ended September 30, 2023.
Use of Non-GAAP Measures
In an effort to provide investors with additional information
regarding the Company’s results as determined by 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.
In this release, the Company presents adjusted operating income
and adjusted EBITDA as performance measures because management uses
these measures to evaluate the Company’s underlying performance on
a consistent basis across periods and to make 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 does not reconcile forward-looking non-GAAP measures
to the comparable GAAP measures, as permitted by Regulation S-K, as
certain items, e.g., expenses related to corporate development
activities, transactions, pension expenses/(benefits) and corporate
restructuring, may have not yet occurred, are out of the Company’s
control and/or cannot be reasonably predicted without unreasonable
efforts. Additionally, such reconciliation would imply a degree of
precision and certainty regarding relevant items that may be
confusing to investors. Such items could have a substantial impact
on GAAP measures of the Company’s financial performance.
Forward-Looking Statements
This press release contains certain statements that may be
deemed “forward-looking statements” within the meaning of the
federal securities laws. All statements that address activities,
events or developments that the Company intends, expects, plans,
projects, believes or anticipates will or may occur in the future
are forward-looking statements, including, without limitation,
statements regarding outlooks, projections, forecasts,
expectations, commitments, trend descriptions and the ability to
capitalize on trends, value creation, Board and committee
composition plans, long-term strategies and the execution or
acceleration thereof, operational improvements, inventory
positions, the benefits of capital investments, financial or
operating performance including improving sales growth and driving
increased margins, capital allocation and growth strategy plans,
the Company’s product portfolio positioning and the demand for the
Company’s products. Forward-looking statements are based on certain
assumptions and assessments made by the Company in light of the
Company’s 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, without limitation, the ongoing
assessment of the cybersecurity incident; legal, reputational,
audit and financial risks resulting from the cybersecurity
incident; the Company’s ability to adequately assess and remedy the
cybersecurity incident, the effectiveness of the Company’s business
continuity plans during the cybersecurity incident, the Company’s
ability to recover under its cybersecurity insurance policies;
logistical challenges and supply chain disruptions, geopolitical
conditions, including the Israel-Hamas war, public health crises,
or other events; inventory and in-stock positions of our
distributors and end customers; an inability to realize the
anticipated benefits from our operational initiatives, including
our large capital investments in Chattanooga and Kimball,
Tennessee, and Decatur, Illinois, plant closures, and
reorganization and related strategic realignment activities; an
inability to attract or retain a skilled and diverse workforce,
including executive officers, increased competition related to the
workforce and labor markets; an inability to protect the Company’s
information systems against further service interruption,
misappropriation of data or breaches of security; failure to comply
with personal data protection and privacy laws; cyclical and
changing demand in core markets such as municipal spending,
residential construction, and natural gas distribution; government
monetary or fiscal policies; the impact of adverse weather
conditions; the impact of manufacturing and product performance;
the impact of wage, commodity and materials price inflation;
foreign exchange rate fluctuations; the impact of warranty charges
and claims, and related accommodations; the strength of our brands
and reputation; an inability to successfully resolve significant
legal proceedings or government investigations; compliance with
environmental, trade and anti-corruption laws and regulations;
climate change and legal or regulatory responses thereto; changing
regulatory, trade and tariff conditions; the failure to integrate
and/or realize any of the anticipated benefits of acquisitions or
divestitures; an inability to achieve some or all of our
Environmental, Social, and Governance goals; and other factors that
are described in the section entitled “RISK FACTORS” in Item 1A of
the Company’s most recent Annual Report on Form 10-K and later
filings on Form 10-Q, as applicable.
Forward-looking statements do not guarantee future performance
and are only as of the date they are made. The Company undertakes
no duty to update its forward-looking statements except as required
by law. Undue reliance should not be placed on any forward-looking
statements. You are advised to review any further disclosures the
Company makes on related subjects in subsequent Forms 10-K, 10-Q,
8-K and other reports filed with the U.S. Securities and Exchange
Commission.
About Mueller Water Products, Inc.
Mueller Water Products, Inc. is a leading manufacturer and
marketer of products and services used in the transmission,
distribution and measurement of water in North America. Our broad
product and service portfolio includes engineered valves, fire
hydrants, pipe connection and repair products, metering products,
leak detection, pipe condition assessment, pressure management
products, and software technology that provides critical water
system data. We help municipalities increase operational
efficiencies, improve customer service and prioritize capital
spending, demonstrating why Mueller Water Products is Where
Intelligence Meets Infrastructure®. Visit us at
www.muellerwaterproducts.com.
Mueller refers to one or more of Mueller Water Products, Inc.
(MWP), a Delaware corporation, and its subsidiaries. MWP and each
of its subsidiaries are legally separate and independent entities
when providing products and services. MWP does not provide products
or services to third parties. MWP and each of its subsidiaries are
liable only for their own acts and omissions and not those of each
other.
Investor Relations and Media Contact: Whit
Kincaid770-206-4116wkincaid@muellerwp.com
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