mwa-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-32892

MUELLER WATER PRODUCTS, INC.

(Exact name of registrant as specified in its charter)


Delaware						20-3547095
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

1200 Abernathy Road N.E.

Suite 1200

Atlanta, GA 30328

(Address of principal executive offices)

(770) 206-4200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01	MWA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

There were 156,485,455 shares of common stock of the registrant outstanding at July 31, 2023.

TABLE OF CONTENTS



ITEM		PAGE
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets - June 30, 2023 and September 30, 2022	3
	Unaudited Condensed Consolidated Statements of Operations - Three and Nine Months Ended June 30, 2023 and 2022	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended June 30, 2023 and 2022	5
	Unaudited Condensed Consolidated Statements of Stockholders' Equity - Three and Nine Months Ended June 30, 2023 and 2022	6
	Unaudited Condensed Consolidated Statements of Cash Flows - Nine Months Ended June 30, 2023 and 2022	8
	Notes to the Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	35
	Signatures	35

Table of Contents

PART I

Item 1. FINANCIAL STATEMENTS

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	June 30,		September 30,
	2023		2022
	(in millions, except share amounts)
Assets:
Cash and cash equivalents	$	141.2	$	146.5
Receivables, net of allowance for credit losses of $6.4 million and $5.6 million	210.3		228.0
Inventories, net	312.7		278.7
Other current assets	27.2		26.8
Total current assets	691.4		680.0
Property, plant and equipment, net	306.9		301.6
Intangible assets, net	341.9		361.2
Goodwill, net	97.0		98.6
Other noncurrent assets	56.1		56.7
Total assets	$	1,493.3	$	1,498.1

Liabilities and stockholders’ equity:
Current portion of long-term debt	$	0.8	$	0.8
Accounts payable	101.0		122.8
Other current liabilities	98.1		117.4
Total current liabilities	199.9		241.0
Long-term debt	446.7		446.1
Deferred income taxes	80.0		86.3
Other noncurrent liabilities	52.5		55.4
Total liabilities	779.1		828.8

Commitments and contingencies (Note 10.)

Preferred stock: par value $0.01 per share; 60,000,000 shares authorized; none outstanding at June 30, 2023, and September 30, 2022	—		—
Common stock: par value $0.01 per share; 600,000,000 shares authorized; 156,424,123 and 155,844,138 shares outstanding at June 30, 2023, and September 30, 2022, respectively	1.6		1.6
Additional paid-in capital	1,257.2		1,279.6
Accumulated deficit	(499.0)		(567.3)
Accumulated other comprehensive loss	(45.6)		(44.6)
Total stockholders' equity	714.2		669.3
Total liabilities and stockholders' equity	$	1,493.3	$	1,498.1

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022

	(in millions, except per share amounts)
Net sales	$	326.6	$	333.2	$	974.3	$	916.0
Cost of sales	226.5		234.9		683.2		637.3
Gross profit	100.1		98.3		291.1		278.7
Operating expenses:
Selling, general and administrative	60.6		60.8		187.7		175.1
Strategic reorganization and other charges	3.9		0.6		0.9		3.6
Total operating expenses	64.5		61.4		188.6		178.7
Operating income	35.6		36.9		102.5		100.0
Other expenses (income):
Pension expense (benefit) other than service	0.9		(0.9)		2.8		(2.9)
Interest expense, net	3.8		4.2		11.4		13.0
Net other expenses	4.7		3.3		14.2		10.1
Income before income taxes	30.9		33.6		88.3		89.9
Income tax expense	6.4		7.1		20.0		20.4
Net income	$	24.5	$	26.5	$	68.3	$	69.5

Net income per share:
Basic	$	0.16	$	0.17	$	0.44	$	0.44
Diluted	$	0.16	$	0.17	$	0.44	$	0.44

Weighted average shares outstanding:
Basic	156.4		157.0		156.2		157.6
Diluted	157.2		157.6		156.8		158.3

Dividends declared per share	$	0.061	$	0.058	$	0.183	$	0.174

The accompanying notes are an integral part of the condensed consolidated financial statements.

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MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022

	(in millions)
Net income	$	24.5	$	26.5	$	68.3	$	69.5
Other comprehensive income (loss), net of income tax:
Pension actuarial amortization	0.8		0.3		2.0		1.0
Foreign currency translation	(4.9)		(17.6)		(3.0)		(15.5)
Total other comprehensive loss	(4.1)		(17.3)		(1.0)		(14.5)
Comprehensive income	$	20.4	$	9.2	$	67.3	$	55.0

The accompanying notes are an integral part of the condensed consolidated financial statements.

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MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)


	Common stock		Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive (loss) income		Total
	(in millions)
Balance at September 30, 2022	$	1.6	$	1,279.6	$	(567.3)	$	(44.6)	$	669.3
Net income	—		—		22.5		—		22.5
Dividends declared	—		(9.5)		—		—		(9.5)
Stock-based compensation	—		1.8		—		—		1.8
Shares retained for employee taxes	—		(1.5)		—		—		(1.5)
Common stock issued	—		0.6		—		—		0.6

Other comprehensive income, net of tax	—		—		—		4.6		4.6
Balance at December 31, 2022	$	1.6	$	1,271.0	$	(544.8)	$	(40.0)	$	687.8
Net income	—		—		21.3		—		21.3
Dividends declared	—		(9.5)		—		—		(9.5)
Stock-based compensation	—		2.4		—		—		2.4

Common stock issued	—		0.4		—		—		0.4

Other comprehensive loss, net of tax	—		—		—		(1.5)		(1.5)
Balance at March 31, 2023	$	1.6	$	1,264.3	$	(523.5)	$	(41.5)	$	700.9
Net income	—		—		24.5		—		24.5
Dividends declared	—		(9.6)		—		—		(9.6)
Stock-based compensation	—		1.7		—		—		1.7
Shares retained for employee taxes	—		(0.1)		—		—		(0.1)
Common stock issued	—		0.9		—		—		0.9

Other comprehensive loss, net of tax	—		—		—		(4.1)		(4.1)
Balance at June 30, 2023	$	1.6	$	1,257.2	$	(499.0)	$	(45.6)	$	714.2

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)


	Common stock		Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive (loss) income		Total
	(in millions)
Balance at September 30, 2021	$	1.6	$	1,342.2	$	(643.9)	$	(5.0)	$	694.9
Net income	—		—		19.4		—		19.4
Dividends declared	—		(9.2)		—		—		(9.2)
Stock-based compensation	—		2.0		—		—		2.0
Shares retained for employee taxes	—		(1.9)		—		—		(1.9)
Stock repurchased under buyback program	—		(20.0)		—		—		(20.0)
Common stock issued	—		0.7		—		—		0.7
Other comprehensive income, net of tax	—		—		—		6.0		6.0
Balance at December 31, 2021	$	1.6	$	1,313.8	$	(624.5)	$	1.0	$	691.9
Net income	—		—		23.6		—		23.6
Dividends declared	—		(9.1)		—		—		(9.1)
Stock-based compensation	—		2.4		—		—		2.4
Shares retained for employee taxes	—		0.1		—		—		0.1

Common stock issued	—		0.4		—		—		0.4
Other comprehensive loss, net of tax	—		—		—		(3.2)		(3.2)
Balance at March 31, 2022	$	1.6	$	1,307.6	$	(600.9)	$	(2.2)	$	706.1
Net income	—

SEC Form 10-Q filed by MUELLER WATER PRODUCTS