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, 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 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, risks resulting from possible future cybersecurity incidents, 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 higher interest rates; 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 goals and commitments in environmental and sustainability programs; and other factors that are described in the section entitled “RISK FACTORS” in Item 1A. Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 216.2 $ 148.1 $ — $ 364.3 Gross profit(1) $ 77.0 $ 51.0 $ — $ 128.0 Selling, general and administrative expenses 21.9 19.6 14.2 55.7 Strategic reorganization and other charges(2) 1.0 0.1 1.3 2.4 Operating income (loss) $ 54.1 $ 31.3 $ (15.5 ) $ 69.9 Operating margin 25.0 % 21.1 % 19.2 % Capital expenditures $ 4.8 $ 4.4 $ — $ 9.2 Net income $ 51.3 Net income margin 14.1 % Reconciliation of non-GAAP to GAAP performance measures: Net income $ 51.3 Strategic reorganization and other charges(2) 2.4 Other asset restructuring write-down 0.8 Income tax expense of adjusting items(3) (0.8 ) Adjusted net income $ 53.7 Weighted average diluted shares outstanding 157.5 Net income per diluted share $ 0.33 Strategic reorganization and other charges per diluted share(2) 0.02 Other asset restructuring write-down per diluted share 0.01 Income tax expense of adjusting items per diluted share(3) (0.02 ) Adjusted net income per diluted share $ 0.34 Net income $ 51.3 Income tax expense(4) 16.4 Interest expense, net(4) 2.3 Pension benefit other than service(4) (0.1 ) Operating income (loss) $ 54.1 $ 31.3 $ (15.5 ) 69.9 Strategic reorganization and other charges(2) 1.0 0.1 1.3 2.4 Other asset restructuring write-down 0.8 — — 0.8 Adjusted operating income (loss) 55.9 31.4 (14.2 ) 73.1 Pension benefit other than service(4) — — 0.1 0.1 Depreciation and amortization 6.3 5.0 — 11.3 Adjusted EBITDA $ 62.2 $ 36.4 $ (14.1 ) $ 84.5 Adjusted operating margin 25.9 % 21.2 % 20.1 % Adjusted EBITDA margin 28.8 % 24.6 % 23.2 % Adjusted EBITDA $ 62.2 $ 36.4 $ (14.1 ) $ 84.5 Three prior quarters' adjusted EBITDA 163.3 103.3 (45.4 ) 221.2 Trailing twelve months' adjusted EBITDA $ 225.5 $ 139.7 $ (59.5 ) $ 305.7 Reconciliation of net debt to total debt (end of period): Current portion of long-term debt $ 1.0 Long-term debt 449.5 Total debt 450.5 Less cash and cash equivalents 329.2 Net debt $ 121.3 Debt leverage (debt divided by trailing twelve months' adjusted EBITDA) 1.5x Net debt leverage (net debt divided by trailing twelve months' adjusted EBITDA) 0.4x Reconciliation of free cash flow to net cash provided by operating activities: Net cash provided by operating activities $ 14.3 Less capital expenditures 9.2 Free cash flow $ 5.1 (1)Gross profit includes $0.8 million in other asset write-downs associated with the closure of our legacy brass foundry in Decatur, Illinois. Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 205.8 $ 147.6 $ — $ 353.4 Gross profit $ 77.2 $ 53.2 $ — $ 130.4 Selling, general and administrative expenses 24.6 24.2 14.9 63.7 Strategic reorganization and other charges(1) — — 3.2 3.2 Operating income (loss) $ 52.6 $ 29.0 $ (18.1 ) $ 63.5 Operating margin 25.6 % 19.6 % 18.0 % Capital expenditures $ 6.0 $ 4.1 $ — $ 10.1 Net income $ 44.3 Net income margin 12.5 % Reconciliation of non-GAAP to GAAP performance measures: Net income $ 44.3 Strategic reorganization and other charges(1) 3.2 Income tax expense of adjusting items(2) (1.2 ) Adjusted net income $ 46.3 Weighted average diluted shares outstanding 156.7 Net income per diluted share $ 0.28 Strategic reorganization and other charges per diluted share(1) 0.02 Income tax expense of adjusting items per diluted share(2) — Adjusted net income per diluted share $ 0.30 Net income $ 44.3 Income tax expense(3) 14.6 Interest expense, net(3) 3.6 Pension expense other than service(3) 1.0 Operating income (loss) $ 52.6 $ 29.0 $ (18.1 ) 63.5 Strategic reorganization and other charges(1) — — 3.2 3.2 Adjusted operating income (loss) 52.6 29.0 (14.9 ) 66.7 Pension expense other than service(3) — — (1.0 ) (1.0 ) Depreciation and amortization 9.8 6.7 — 16.5 Adjusted EBITDA $ 62.4 $ 35.7 $ (15.9 ) $ 82.2 Adjusted operating margin 25.6 % 19.6 % 18.9 % Adjusted EBITDA margin 30.3 % 24.2 % 23.3 % Adjusted EBITDA $ 62.4 $ 35.7 $ (15.9 ) $ 82.2 Three prior quarters' adjusted EBITDA 94.2 98.8 (38.4 ) 154.6 Trailing twelve months' adjusted EBITDA $ 156.6 $ 134.5 $ (54.3 ) $ 236.8 Reconciliation of net debt to total debt (end of period): Current portion of long-term debt $ 0.7 Long-term debt 448.0 Total debt 448.7 Less cash and cash equivalents 179.2 Net debt $ 269.5 Debt leverage (debt divided by trailing twelve months' adjusted EBITDA) 1.9x Net debt leverage (net debt divided by trailing twelve months' adjusted EBITDA) 1.1x Reconciliation of free cash flow to net cash used in operating activities: Net cash used in operating activities $ (5.7 ) Less capital expenditures 10.1 Free cash flow $ (15.8 ) (1)Strategic reorganization and other charges primarily relate to expenses associated with our leadership transition, severance and certain transaction-related expenses.
Author: Mueller Water Products Inc
Published at: 2025-05-05 21:00:00
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