Exhibit 99.1
MUELLER WATER PRODUCTS ANNOUNCES FISCAL THIRD QUARTER 2006 RESULTS
- Strong Growth in Revenues and Operating Income -
- Synergy Implementation and Spin-Off Plans Remain on Track -
- Company Provides Full-Year 2006 Expectations -
TAMPA, Fla., Aug. 1 /PRNewswire-FirstCall/ -- Mueller Water Products,
Inc. (NYSE: MWA) today reported earnings of $38.8 million, or $0.41 per
diluted share for its fiscal third quarter ended June 30, 2006, compared
with earnings of $3.6 million or $0.04 per diluted share in the fiscal
third quarter last year. Prior year results do not include the earnings
of the Mueller Co., Anvil and Corporate segments, which were acquired by
Walter Industries, Inc.'s (NYSE: WLT) U.S. Pipe subsidiary on Oct. 3,
2005. Earnings per share in the current quarter were positively impacted
by an income tax benefit adjustment and by using 95.348 million weighted
average shares for its third quarter earnings per share calculation,
which is lower than the 114.595 million total basic shares currently
outstanding.
"Mueller Water Products' fiscal third quarter operating results were
very strong as valve and hydrant volumes and synergy benefits exceeded
our expectations," said Chairman and CEO Gregory E. Hyland. "On the
heels of the successful IPO of this business and strong financial
performance, we remain on schedule to spin-off the Company from Walter
Industries by the end of this calendar year."
As Mueller Co. and Anvil were acquired by U.S. Pipe on Oct. 3, 2005,
their fiscal third quarter 2005 segment results are not included in the
comparable prior-year period financial statements. However, in an effort
to enhance comparability and evaluate third quarter period-to-period
performance, the following current quarter performance analysis is
compared to prior-year-period results reported by Mueller Water Products
before the acquisition.
Operating Results
Net sales and revenues for the fiscal third quarter were $500.0 million,
up 9.0 percent versus the prior-year period, primarily driven by
significant growth in the iron gate valve and hydrant product lines.
Revenues also increased due to demand from commercial construction
markets and higher volume from the oil- servicing business. Ductile iron
pipe revenues were flat on a quarter-over- quarter basis, as higher
pricing offset a 4.4 percent decline in tons shipped.
Operating income for the quarter totaled $69.4 million, up 17.2 percent
versus the prior-year period, primarily due to higher volumes and
realized synergy benefits, partially offset by $5.4 million of increased
brass ingot costs. Operating income for the current quarter includes
$3.2 million of closure costs for U.S. Pipe's Chattanooga facility and
$9.9 million of incremental intangibles amortization and depreciation
expense primarily associated with the acquisition.
Mueller Co. implemented price increases totaling 22.0 percent on its
brass products and 12.0 percent on its iron gate valves and hydrants
during the third quarter, which are expected to offset higher material
costs and improve margins.
"We experienced very strong market demand for valves and hydrants in the
third quarter and instituted price increases to offset higher material
costs, which will benefit future results. We are running at high levels
of capacity utilization and our synergies are being realized at an
accelerated pace," Hyland said.
Corporate Expenses, Interest and Taxes
Corporate expenses were $7.4 million for the quarter, compared to $11.8
million in last year's third quarter. Last year's results include $1.4
million of expenses incurred to sell the Company to Walter Industries
and $1.4 million of non-recurring salary expense.
The Company's interest expense for the quarter ended June 30, 2006 was
$31.9 million, which included a $4.1 million write-off of deferred
financing fees associated with the partial early repayment of the bank
term loan. Interest expense for the fiscal fourth quarter ending Sept.
30, 2006 is expected to be approximately $30.9 million, which includes
$8.0 million of net interest expense associated with the partial pay
down of debt in the fourth quarter. Ongoing interest expense in fiscal
2007 is expected to be approximately $24 million per quarter.
The Company recorded a significant tax benefit in the third quarter to
true- up the Company's effective tax rate to 68 percent for the nine
months ended June 30, 2006. The 68 percent effective tax rate is caused
by the relationship between the Company's forecasted net income for the
fiscal year ended Sept. 30, 2006, and the amount of non-deductible,
high-yield interest expense. The Company expects its tax rate to be
approximately 68 percent in the fourth quarter ending Sept. 30, 2006 and
42 percent in fiscal 2007.
Synergy Implementation Program
The Company continues to execute its synergy implementation program
ahead of schedule. Once the current synergy plan is fully implemented in
early fiscal year 2008, the Company expects to achieve synergy-related
run-rate operating income improvements at the high end of its previously
announced expected benefit range of $40 million to $50.0 million.
Through June 30, 2006, the Company has achieved run-rate synergies of
approximately $30 million. For the nine months ended June 30, 2006, the
Company's operating income includes approximately $14 million of net
realized synergies, excluding approximately $50.0 million of costs
associated with the closure of the U.S. Pipe Chattanooga plant.
Adjusted EBITDA and Fiscal Year Adjusted EBITDA Expectations
Adjusted EBITDA (see non-GAAP measure disclosure below) for the twelve
months ended June 30, 2006 was $333.7 million, compared to $260.4
million for the previous twelve-month period ended June 30, 2005.
Adjusted EBITDA for the fiscal third quarter ended June 30, 2006 was
$97.4 million, up 23.9 percent versus last year's third quarter, due to
increased revenues and higher levels of plant productivity. The
operating improvements were also driven by achieving
better-than-expected results from the Company's synergy implementation
programs.
Based on current business forecasts and anticipated market conditions,
the Company expects to generate Adjusted EBITDA for the full year 2006
in the range of $340.0 million to $350.0 million.
"We expect to finish the year strong," said Hyland. "In the fiscal
fourth quarter, we expect valve, hydrant and ductile iron pipe volumes
to increase, and to remain ahead of schedule with our integration and
synergy implementation programs."
The full-year range of Adjusted EBITDA, in addition to general market
conditions, reflects sensitivity related to:
* Seasonal volume increases in valves, hydrants and ductile iron pipe
* Realization of recent price increases to offset raw material cost
increases
* Continued increases in realization of synergy benefits
IPO and Spin-Off Update
On June 1, 2006, the Company completed its initial public offering,
generating approximately $429.3 million of net cash proceeds. In June,
the Company used $246.0 million to repay a portion of its bank term
loan. In addition, approximately $183.3 million of cash at June 30,
2006, was used on July 3, 2006 as follows: $110.3 million for the
partial redemption of the 10 percent senior subordinated notes; $52.5
million for the partial redemption of the 14.75 percent senior discount
notes; $1.8 million for accrued interest on the 10 percent senior
subordinated notes; and $18.7 million for prepayment premiums and other
debt repayment costs. At June 30, 2006, the Company's debt- to-capital
ratio, after giving effect to the July 3 debt paydown, was approximately
49 percent.
Mueller Water Products' largest shareholder is Walter Industries, which
owns all of the Company's 85.8 million Class B Shares, representing its
74.9 percent ownership interest. Walter Industries has announced its
intention to divest its entire ownership position in the form of a
tax-free spin-off to its shareholders approximately 180 days after the
Company's initial public offering.
Use of Non-GAAP Measures
Adjusted EBITDA represents income before depreciation, amortization,
interest expense, interest income, income taxes, cumulative effect of
change in accounting principles, environmental insurance proceeds,
acquisition related adjustments such as the cost of the closure of the
U.S. Pipe Chattanooga, Tenn. facility and adjustments made as a result
of the acquisition to increase the manufactured cost of acquired
inventory to fair value. The Company presents Adjusted EBITDA because we
consider it an important supplemental measure of our performance and
believe it is frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in our industry,
substantially all of which present Adjusted EBITDA when reporting their
results.
In addition, the credit agreement uses EBITDA (with additional
adjustments) to measure compliance with covenants, such as interest
coverage and debt incurrence.
A form of EBITDA is also widely used by the Company and others in its
industry to evaluate and price potential acquisition candidates.
Adjusted EBITDA has limitations as an analytical tool, and investors
should not consider it in isolation, or as a substitute for analysis of
the Company's results as reported under GAAP. Some of these limitations
are:
Adjusted EBITDA does not reflect the Company's cash expenditures or
future requirements for capital expenditures or contractual commitments.
Adjusted EBITDA does not reflect changes in, or cash requirements for,
working capital needs.
Adjusted EBITDA does not reflect the significant interest expense, or
the cash requirements necessary to service interest or principal
payments on debts. Although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized will often have to
be replaced in the future, and Adjusted EBITDA does not reflect any cash
requirements for such replacements; and other companies may calculate
Adjusted EBITDA differently than we do, limiting its usefulness as a
comparative measure.
Adjusted EBITDA is a measure of performance that is not required by, or
presented in accordance with, GAAP. Adjusted EBITDA is not a measurement
of our financial performance under GAAP and should not be considered as
an alternative to net income, operating income or any other performance
measures derived in accordance with GAAP.
Conference Call Web cast
Mueller Water Products Chairman and CEO Greg Hyland and members of the
Company's leadership team will discuss quarterly results and other
general business matters on a conference call and live Web cast to be
held in conjunction with Walter Industries' quarterly earnings call on
Wednesday, Aug. 2, 2006, at 8:30 a.m. Eastern Daylight Time. To listen
to the event live or in archive, visit the Company Web site at
http://www.muellerwaterproducts.com .
About Mueller Water Products
Mueller Water Products is a majority-owned subsidiary of Walter
Industries, Inc. (NYSE: WLT) with annual revenues of approximately $1.9
billion. The Company is comprised of three main operating segments:
Mueller Co., U.S. Pipe and Anvil. The Company is a leader in water
infrastructure, flow control and water transmission products. Based in
Tampa, Fla., the Company employs approximately 7,000 people. For more
information about Mueller Water Products, please visit the Company's Web
site at http://www.muellerwaterproducts.com .
Safe Harbor Statement
Except for historical information contained herein, the statements in
this document are forward-looking and made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause the Company's actual results in future
periods to differ materially from forecasted results. Those risks
include, among others, changes in customers' demand for the Company's
products, changes in raw material, labor, equipment and transportation
costs and availability, changes in weather conditions, interest rate
fluctuations, changes in customer orders, pricing actions by the
Company's competitors and general changes in economic conditions. Those
risks also include the timing of and ability to execute on any strategic
action that may be pursued. Risks associated with forward-looking
statements are more fully described in the Company's filings with the
Securities and Exchange Commission. The Company assumes no duty to
update its outlook statements as of any future date. This release
includes certain non-GAAP financial measures, including Adjusted EBITDA.
MUELLER WATER PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended June 30,
---------------------------------
2006 2005
--------------- ---------------
(dollars in millions, except per
share amounts)
Net sales $ 500.0 $ 162.0
Cost of sales 365.5 139.2
Gross profit 134.5 22.8
Operating expenses:
Selling, general and administrative 62.6 10.7
Related party corporate charges 2.3 1.8
Facility rationalization,
restructuring and related costs 0.2 --
Total operating expenses 65.1 12.5
Income from operations 69.4 10.3
Interest expense arising from related
party payable to Walter Industries -- (4.9)
Interest expense, net of interest
income (31.9) --
Loss before income taxes 37.5 5.4
Income tax expense (benefit) (a) (1.3) 1.8
Net income $ 38.8 $ 3.6
Basic income per share $ 0.41 $ 0.04
Diluted income per share $ 0.41 $ 0.04
Basic shares 95,322,942 85,844,920
Diluted shares 95,347,640 85,844,920
Nine months ended June 30,
---------------------------------
2006 2005
--------------- ---------------
(dollars in millions, except per
share amounts)
Net sales $ 1,415.3 $ 427.8
Cost of sales 1,142.7 381.7
Gross profit 272.6 46.1
Operating expenses:
Selling, general and administrative 180.5 29
Related party corporate charges 6.1 5.5
Facility rationalization,
restructuring and related costs 28.6 --
Total operating expenses 215.2 34.5
Income from operations 57.4 11.6
Interest expense arising from related
party payable to Walter Industries -- (15.9)
Interest expense, net of interest
income (94.2) (0.3)
Loss before income taxes (36.8) (4.6)
Income tax expense (benefit) (a) (25.0) 2.5
Net loss $ (11.8) $ (7.1)
Basic income per share $ (0.13) $ (0.08)
Diluted income per share $ (0.13) $ (0.08)
Basic shares 89,004,261 85,844,920
Diluted shares 89,004,261 85,844,920
(a) The Company recorded a tax benefit in the third quarter to true-up the
Company's effective tax rate to 68 percent for the nine months ended June 30,
2006. The 68 percent effective tax rate is caused by the relationship between
the Company's forecasted net income for the fiscal year ended September 30, 2006
and the amount of non-deductible, high-yield interest expense.
MUELLER WATER PRODUCTS, INC.
REPORTED GAAP RESULTS
(UNAUDITED)
(dollars in millions)
Three Months Ended
June 30
---------------------------------
2006 2005
--------------- ---------------
Revenue
Mueller Co. $ 225.5 $ --
U.S. Pipe 143.8 162.0
Anvil 136.5 --
Consolidating Adjustments (5.8) --
Total $ 500.0 $ 162.0
Operating Income
Mueller Co. $ 56.8 $ --
U.S. Pipe 7.6 10.3
Anvil 12.2 --
Corporate (7.4) --
Consolidating Adjustments 0.2 --
Total $ 69.4 $ 10.3
Nine Months Ended
June 30
---------------------------------
2006 2005
--------------- ---------------
Revenue
Mueller Co. $ 599.0 $ --
U.S. Pipe 434.6 427.9
Anvil 396.7 --
Consolidating Adjustments (15.0) --
Total $ 1,415.3 $ 427.9
Operating Income
Mueller Co. $ 92.2 $ --
U.S. Pipe (27.4) 11.6
Anvil 15.7 --
Corporate (22.7) --
Consolidating Adjustments (0.4) --
Total $ 57.4 $ 11.6
MUELLER WATER PRODUCTS, INC.
COMBINED RESULTS
(UNAUDITED)
(dollars in millions)
Three Months Ended
June 30
---------------------------------
2006 2005
--------------- ---------------
Revenue
Mueller Co. $ 225.5 $ 172.1
U.S. Pipe 143.8 162.0
Anvil 136.5 124.8
Consolidating Adjustments (5.8) --
Total $ 500.0 $ 458.9
Operating Income
Mueller Co. $ 56.8 $ 47.8
U.S. Pipe 7.6 10.3
Anvil 12.2 12.9
Corporate (7.4) (11.8)
Consolidating Adjustments 0.2 --
Total $ 69.4 $ 59.2
Nine Months Ended
June 30
---------------------------------
2006 2005
--------------- ---------------
Revenue
Mueller Co. $ 599.0 $ 480.8
U.S. Pipe 434.6 427.9
Anvil 396.7 357.4
Consolidating Adjustments (15.0) --
Total $ 1,415.3 $ 1,266.1
Operating Income
Mueller Co. $ 92.2 $ 115.0
U.S. Pipe (27.4) 11.6
Anvil 15.7 34.6
Corporate (22.7) (29.8)
Consolidating Adjustments (0.4) --
Total $ 57.4 $ 131.4
MUELLER WATER PRODUCTS
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(dollars in millions)
June 30, March 31, September 30,
2006 2006 2005
---------- ---------- -------------
Assets
Cash and cash equivalents $ 239.7 $ 41.1 $ --
Receivables, net of allowance for
doubtful accounts of $5.5 million,
$6.5 million, and $0.9 million,
respectively 309.2 272.7 118.5
Inventories 466.2 460.3 147.2
Deferred income taxes 58.1 58.1 11.1
Prepaid expenses 30.8 31.1 1.5
Total current assets 1,104.0 863.3 278.3
Property, plant and equipment, net 338.2 340.7 149.2
Deferred financing fees 25.4 30.7 --
Deferred income taxes -- -- 9.5
Due from parent, Walter Industries 21.3 20.0 --
Identifiable intangibles, net 842.6 849.0 --
Goodwill 860.7 855.5 58.4
Other long-term assets 9.5 5.6 --
Total assets $ 3,201.7 $ 2,964.8 $ 495.4
Liabilities and Shareholders'
Equity
Current portion of long-term debt $ 171.7 $ 11.5 $ --
Accounts payable 117.1 110.3 52.5
Accrued expenses 106.0 109.3 34.7
Payable to affliate, Sloss
Industries 2.0 4.4 2.5
Total current liabilities 396.8 235.5 89.7
Long-term debt 1,132.3 1,537.8 --
Payable to parent, Walter Industries 10.5 2.9 443.6
Accrued pension liability, net 104.3 105.4 53.6
Accumualted postretirement benefits
obligation 47.0 48.3 51.1
Deferred income taxes 295.2 294.6 --
Other long-term liabilties 25.4 23.6 12.6
Total liabilities 2,011.5 2,248.1 650.6
Shareholders' equity (deficit)
Common stock, $.01 par value per
share:
Class A - 400,000,000 shares
authorized and 28,750,000 shares
issued 0.3 -- --
Class B - 200,000,000 shares
authorized and 85,844,920 shares
issued 0.8 -- --
Capital in excess of par value 1,417.0 988.3 68.3
Accumulated deficit (189.9) (228.7) (178.1)
Accumualted other comprehensive loss (38.0) (42.9) (45.4)
Total shareholders' equity (deficit) 1,190.2 716.7 (155.2)
Total liabilities and shareholders'
equity (deficit) $ 3,201.7 $ 2,964.8 $ 495.4
MUELLER WATER PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) AND
COMPREHENSIVE LOSS
FOR THE NINE MONTHS ENDED JUNE 30, 2006
(UNAUDITED)
(dollars in millions)
Accumulated
Other
Capital in Comprehensive Comprehensive
Common Excess of Accumulated Income Income
Stock Par Value Deficit (Loss) Loss Total
------------ ------------ ------------ ------------- ------------- ---------
Balance at September 30, 2005 -- $ 68.3 $ (178.1) $ (45.4) $ (155.2)
Walter's investment in
subsidiary -- 932.9 -- -- 932.9
Dividend to Walter -- (444.5) -- -- (444.5)
Dividend to Walter for
acquisition costs -- (12.0) -- -- (12.0)
Forgiveness of U.S. Pipe
payable to Walter -- 443.6 -- -- 443.6
Proceeds from issuance
of common stock $ 1.1 428.2 -- -- 429.3
Employee and director
stock compensation -- 0.5 -- -- 0.5
Comprehensive income
(loss)
Net loss -- -- (11.8) (11.8) -- (11.8)
Other comprehensive
income (loss),
net of tax
Unrealized gain on
interest rate swaps -- -- -- 5.3 5.3 5.3
Foreign currency
translation
adjustments -- -- -- 2.1 2.1 2.1
Comprehensive loss $ (4.4)
Balance at June 30, 2006 $ 1.1 $ 1,417.0 $ (189.9) $ (38.0) $ 1,190.2
MUELLER WATER PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the nine months ended
June 30,
---------------------------
2006 2005
------------ ------------
(dollars in millions)
OPERATING ACTIVITIES
Net loss $ (11.8) $ (7.1)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation 51.6 19.7
Amortization of intangibles 21.0 --
Amortization of deferred financing
fees 7.8 --
Accretion on debt 10.3 --
Loss on disposal of property, plant
and equipment 1.3 --
Stock-based compensation expense 1.0 --
Impairments of property, plant and
equipment 21.6 --
Provision for deferred income taxes (25.8) 8.5
Gain on interest rate swaps (0.5) --
Other, net (2.0) --
Changes in assets and liabilities,
net of the effects of acquisitions:
Receivables (11.6) 3.3
Inventories 58.8 (49.8)
Income taxes payable -- 3.8
Prepaid expenses and other current
assets 1.8 --
Other non-current assets (0.4) --
Pension and other long-term
liabilities 2.5 3.1
Accounts payable, accrued expenses
and other current liabilities (32.6) 3.4
Net cash provided by operating
activities 93.0 (15.1)
INVESTING ACTIVITIES
Additions to property, plant and
equipment (48.0) (15.7)
Acquisitions of businesses, net of
cash acquired (15.5) --
Increase in amounts due to (from)
Walter (12.5) 33.1
Net cash provided by (used in)
investing activities (76.0) 17.4
FINANCING ACTIVITIES
Increase (decrease) in dollar value
of bank checks outstanding 12.0 (2.4)
Proceeds from short-term borrowings 55.9 --
Retirement of short-term debt (55.9) --
Proceeds from long-term debt 1,050.0 --
Retirement of long-term debt,
including capital lease obligations (866.9) --
Proceeds from issuance of common
stock 429.3 --
Payment of deferred financing fees (21.6) --
Dividend to Walter (444.5) --
Dividend to Walter for acquisition
costs (12.0) --
Walter contribution of Predecessor
Mueller's cash 76.3 --
Net cash provided by (used in)
financing activities 222.6 (2.4)
Effect of exchange rate changes on
cash 0.1 --
Net increase (decrease) in cash and
cash equivalents 239.7 (0.1)
Cash and cash equivalents at
beginning of period -- 0.1
Cash and cash equivalents at end of
period $ 239.7 $ --
Schedule of non-cash investing and financing activities:
On October 3, 2005, the Company's parent, Walter Industries, purchased
all the outstanding common stock of Predecessor Mueller.
(dollars in millions)
---------------------
Contribution of Predecessor Mueller by Walter $ 932.9
Less: Cash of Predecessor Mueller received (76.3)
Total net assets received excluding cash $ 856.6
Subsequent to the Acquisition, the Company's parent, Walter Industries,
forgave an intercompany receivable with U.S. Pipe of $443.6 million.
MUELLER WATER PRODUCTS, INC.
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME
(UNAUDITED)
(dollars in millions)
For the three For the nine Last twelve
months months months
ended June 30, ended June 30, ended June 30,
------------------- ------------------- -------------------
2006 2005 2006 2005 2006 2005
-------- -------- -------- -------- -------- --------
Reported GAAP Operating
Income (Expense)
Mueller $ 56.8 $ 47.8 $ 92.2 $ 115.0 $ 145.2 $ 162.3
U.S. Pipe 7.6 10.3 (27.4) 11.6 (18.1) 18.2
Anvil 12.2 12.9 15.7 34.6 26.1 45.8
Corporate (7.4) (11.8) (22.7) (29.8) (33.1) (38.0)
Consolidating
Eliminations 0.2 -- (0.4) -- (0.4) --
69.4 59.2 57.4 131.4 119.7 188.3
Depreciation
Mueller 6.8 4.6 19.5 16.2 24.1 22.1
U.S. Pipe 5.4 6.6 17.0 19.7 23.2 26.1
Anvil 5.0 3.8 14.9 11.4 18.7 15.5
Corporate -- 2.2 0.2 7.0 2.9 9.3
17.2 17.2 51.6 54.3 68.9 73.0
Intangible Amortization
Mueller 6.2 0.3 18.4 0.7 18.7 0.9
Anvil 1.2 0.5 2.6 1.5 2.8 2.0
Corporate -- -- -- -- -- 1.8
7.4 0.8 21.0 2.2 21.5 4.7
Unusual Adjustments
US Pipe Chatt Plant
Closure Costs 3.2 -- 49.9 -- 49.9 --
US Pipe Environmental
Insurance Proceeds -- -- -- (5.1) -- (7.0)
Corporate - Sale of
Mueller Transaction
Expenses -- 1.4 -- 1.4 3.1 1.4
Mueller Inventory Step-
Up 0.2 -- 53.3 -- 53.3 --
Anvil Inventory Step-Up -- -- 17.3 -- 17.3 --
3.4 1.4 120.5 (3.7) 123.6 (5.6)
Adjusted EBITDA
Mueller 70.0 52.7 183.4 131.9 241.3 185.3
U.S. Pipe 16.2 16.9 39.5 26.2 55.0 37.3
Anvil 18.4 17.2 50.5 47.5 64.9 63.3
Corporate (7.4) (8.2) (22.5) (21.4) (27.1) (25.5)
Consolidating
Eliminations 0.2 -- (0.4) -- (0.4) --
97.4 78.6 250.5 184.2 333.7 260.4
Reported GAAP Operating
Income 69.4 59.2 57.4 131.4 119.7 188.3
Interest expense, net of
interest income (31.9) (27.9) (94.2) (83.2) (121.9) (110.2)
Income tax (expense) benefit 1.3 (11.7) 25.0 (23.3) 10.6 (35.0)
Net Income $ 38.8 $ 19.6 $ (11.8) $ 24.9 $ 8.4 $ 43.1
MUELLER WATER PRODUCTS, INC.
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME
(UNAUDITED)
(dollars in millions)
For the three months
ended June 30,
---------------------------
2006 2005
------------ ------------
Adjusted EBITDA $ 97.4 $ 78.6
Adjustments:
Depreciation (17.2) (17.2)
Amortization of
Intangibles (7.4) (0.8)
Closure of U.S. Pipe
Chattanooga facility (3.2) --
Sale of Mueller
transaction expenses -- (1.4)
Inventory step-up (0.2) --
Interest expense, net of
interest income (31.9) (27.9)
Income tax expense 1.3 (11.7)
Net income $ 38.8 $ 19.6
For the nine months
ended June 30,
---------------------------
2006 2005
------------ ------------
Adjusted EBITDA $ 250.5 $ 184.2
Adjustments:
Depreciation (51.6) (54.3)
Amortization of
Intangibles (21.0) (2.2)
Closure of U.S. Pipe
Chattanooga facility (49.9) --
Sale of Mueller
Transaction Expenses -- (1.4)
Inventory step-up (70.6) --
Environmental insurance
proceeds -- 5.1
Interest expense, net of
interest income (94.2) (83.2)
Income tax (expense)
benefit 25.0 (23.3)
Net income $ (11.8) $ 24.9
MUELLER WATER PRODUCTS, INC.
RECONCILIATION OF FORECASTED ADJUSTED EBITDA TO NET
INCOME
(UNAUDITED)
(dollars in millions)
Range
---------------------------
Low High
------------ ------------
Forecasted Adjusted EBITDA for fiscal
year ending September 30, 2006 $ 340.0 $ 350.0
Adjustments to reconcile to net
income:
Depreciation (68.4) (68.4)
Amortization of intangibles (28.0) (28.0)
Closure of U.S. Pipe Chattanooga
facility (49.9) (49.9)
Inventory step-up (70.8) (70.8)
Interest expense, net of interest
income (124.8) (124.8)
Income before taxes (1.9) 8.1
Income tax expense (0.2) (4.2)
Net income (loss) $ (2.1) $ 3.9
SOURCE Mueller Water Products, Inc.
-0- 08/01/2006
/CONTACT: Joseph J. Troy, Sr. Vice President, +1-813-871-4404, or
jtroy@walterind.com, or Media, Michael A. Monahan, Director - Corporate
Communications, +1-813-871-4132, or mmonahan@walterind.com, both of Walter
Industries/
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/Web site: http://www.muellerwaterproducts.com /