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MWA Video Chart 8/30/10
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Mueller Water Products, Inc. (NYSE: MWA - News) announced that its Board of Directors declared a quarterly dividend of 1.75 cents ($0.0175) per share, payable on May 20, 2009 to stockholders of record at the close of business on May 8, 2009
http://finance.yahoo.com/news/Mueller-Water-Products-prnews-15076039.html?.v=1
I fund it surreal that more folks arent aware of what this company is about...
oh well, more for us
interested to see if the 3.63 holds.....If it really retraces hard, i'm loading back up
so far so good
LOOKIN TO SEE IF THE MA20 HOLDS,
DOUBT IT THOUGH
What I like about them is the product diversification. Pipe valves etc. everything needed to get A to B. Not only are their products necessary for Water distribution, they can also supply infrastructure for Natural Gas transmission. NG is a topic I know plenty about, so for now MWA is on my radar. Sometime towards the end of 1st Q O&G along with the credit crunch is going to turn around. If Obama is serious about developing our Infrastructure, MWA will be making hand over fist for the next 10 years.
We got thru 2008 alright hoping 2009 would be better, lol so far its not but the years still young. This is one company that appears to have its ducks in order waiting for the market to catch up.
Short Percent of Float 3.90 %
shorts almost done...should eb time to fly
10K was bad plus with the overall market conditions crappy, they have been heavily shorted.
In addition although they have announced various layoffs etc, the volume of business is not expected to pick-up until 3rd quarter.
The reason you have seen a lot of coverage is because they will benefit greatly from the stimulus plan...
I like company and they are well integrated into the American Landscape
I was looking for that site to do some DD on MWA, Thanks. Motley Fool just had a write up on these guys, thats what caught my eye. I just posted up a yahoo link on my XTXI board for them as well.
So whats going on, why the drastic drop in sp, bad 10K?
PU another 1,000 shares today....1.76
MWA:US
Mueller Water Products Inc
Mueller Water Products Takes Additional Cost-Reduction Actions
Mueller Water Products Takes Additional Cost-Reduction Actions to Address Impact
of Recession
PR Newswire
ATLANTA, Feb. 6
ATLANTA, Feb. 6 /PRNewswire-FirstCall/ -- Mueller Water Products, Inc.
(NYSE: MWA) announced today that it is continuing to address the impact of
the recession.
"On our quarterly earnings conference call earlier this week, I mentioned
that we would be taking additional actions to address the impact the
recession has had on our business," said Gregory E. Hyland, chairman,
president and chief executive officer of Mueller Water Products. "I also
said that, since these actions would be directly impacting our employees,
we wanted to communicate the actions we were taking to them first."
Included in the actions being implemented are temporary plant shutdowns to
match production with market demand and to reduce costs. In addition, the
Company has announced pay reductions of 20% for members of the Company's
board of directors and most of its executive officers for the next three
months. The Company also announced lesser reductions in base pay and/or
reduced workweeks for other salaried employees.
"Meeting our customers' needs remains our top priority," said Hyland. "The
actions we are taking will help us manage through this difficult economic
environment, and we are confident of our ability to do so while
maintaining our high levels of safety, quality and service. We continue to
believe that the long-term prospects for our industry and the Company
remain promising."
Safe HarborStatement
Except for historical information contained herein, the statements in this
release 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 actual results in future periods of
Mueller Water Products to differ materially from forecasted results. Those
risks include, among others, changes in customer orders and demand for our
products; changes in raw material prices, labor, equipment and
transportation costs; pricing actions by the Company and its competitors;
changes in law; the ability to attract and retain management and
employees; the inability to successfully execute management strategies
with respect to cost reductions, production increases or decreases,
inventory control, and the integration of acquired businesses; and general
changes in economic and financial conditions, residential and
non-residential construction, and municipal spending. Risks associated
with forward-looking statements are more fully described in our filings
with the Securities and Exchange Commission. Mueller Water Products
assumes no duty to update its forward-looking statements as of any future
date.
About Mueller Water Products
Mueller Water Products is a leading North American manufacturer and
marketer of infrastructure and flow control products for use in water
distribution networks and treatment facilities. Its broad product
portfolio includes engineered valves, hydrants, ductile iron pipe and pipe
fittings, which are used by municipalities, as well as the residential and
non-residential construction, oil and gas, HVAC and fire protection
industries. With latest 12 months net sales of $1.8 billion, the Company
is comprised of three operating segments: Mueller Co., U.S. Pipe and
Anvil. Based in Atlanta, Georgia, the Company employs approximately 6,000
people. Mueller Water Products Series A common stock trades on the New
York Stock Exchange under the ticker symbol MWA. For more information
about Mueller Water Products, please visit the Company's Web site at
www.muellerwaterproducts.com.
Investor Contact: Martie Edmunds Zakas
Sr. Vice President - Strategic Planning & Investor Relations
770-206-4237
mzakas@muellerwp.com
Media Contact: John Pensec
Director - Corporate Communications & Public Affairs
770-206-4240
jpensec@muellerwp.com
SOURCE Mueller Water Products, Inc.
Website: http://www.muellerwaterproducts.com
Contact: Investors: Martie Edmunds Zakas, Sr. Vice President - Strategic
Planning & Investor Relations, +1-770-206-4237, mzakas@muellerwp.com,
Media: John Pensec, Director - Corporate Communications & Public Affairs,
+1-770-206-4240, jpensec@muellerwp.com, both of Mueller Water Products,
Inc.
MUELLER WATER PRODUCTS, INC.
Filed by
STATE STREET BANK & TRUST CO
FORM SC 13G
(Statement of Ownership)
Filed 02/18/09
Address 1200 ABERNATHY RD
SUITE 1200
ATLANTA, GA 30328
Telephone 770-206-4200
CIK 0001350593
Symbol MWA
SIC Code 0000 - Unknown
Fiscal Year 09/30
http://www.edgar-online.com
© Copyright 2009, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13G
UNDER THE SECURITIES EXCHANGE ACT OF 1934
EXIT FILING
MUELLER WATER PRODUCTS INC.
(NAME OF ISSUER)
COMMON
(TITLE CLASS OF SECURITIES)
624758108
(CUSIP NUMBER)
12/31/2008
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
CHECK THE APPROPRIATE BOX TO DESIGNATE THE RULE PURSUANT TO WHICH THIS
SCHEDULE IS FILED:
(X) RULE 13D-1(B)
( ) RULE 13D-1(C)
( ) RULE 13D-1(D)
*THE REMAINDER OF THIS COVER PAGE SHALL BE FILLED OUT FOR A REPORTING PERSON'S INITIAL FILING ON THIS
FORM WITH RESPECT TO THE SUBJECT CLASS OF SECURITIES, AND FOR ANY SUBSEQUENT AMENDMENT CONTAINING
INFORMATION WHICH WOULD ALTER THE DISCLOSURES PROVIDED IN A PRIOR COVER PAGE.
THE INFORMATION REQUIRED IN THE REMAINDER OF THIS COVER PAGE SHALL NOT BE DEEMED TO BE "FILED" FOR
THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF 1934 ("ACT") OR OTHERWISE SUBJECT TO THE
LIABILITIES OF THAT SECTION OF THE ACT BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT
(HOWEVER, SEE THE NOTES).
CUSIP NO. 624758108 13G PAGE 2 OF 5 PAGES
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF PERSON
STATE STREET BANK AND TRUST COMPANY, ACTING IN VARIOUS FIDUCIARY
CAPACITIES. 04-1867445
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP.*
NOT APPLICABLE A __
B __
3. SEC USE ONLY
4. CITIZENSHIP OR PLACE OF ORGANIZATION
BOSTON, MASSACHUSETTS
5. SOLE VOTING POWER
2,022,124 SHARES
6. SHARED VOTING POWER
0 SHARES
7. SOLE DISPOSITIVE POWER
0 SHARES
8. SHARED DISPOSITIVE POWER
2,022,124 SHARES
9. AGGREGATED AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,022,124 SHARES
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES*
NOT APPLICABLE
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
1.7%
12. TYPE OF REPORTING PERSON*
BK
13G PAGE 3 OF 5 PAGES
ITEM 1.
(A) NAME OF ISSUER
MUELLER WATER PRODUCTS INC
(B) ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES
1200 ABERNATHY ROAD
SUITE 1200
ATLANTA, GA 30328
ITEM 2.
(A) NAME OF PERSON FILING
STATE STREET BANK AND TRUST COMPANY, TRUSTEE
(B) ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE,
RESIDENCE
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
(C) CITIZENSHIP
BOSTON, MASSACHUSETTS
(D) TITLE CLASS OF SECURITIES
COMMON
(E) CUSIP NUMBER
624758108
ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO RULE 13D-1(B), OR
13D-2(B), CHECK WHETHER THE PERSON FILING IS A:
(B) _X_ BANK AS DEFINED IN SECTION 3(A)(6) OF THE ACT
13G PAGE 4 OF 5 PAGES
ITEM 4. OWNERSHIP
(A) AMOUNT BENEFICIALLY OWNED
2,022,124 SHARES
(B) PERCENT OF CLASS
1.7%
(C) NUMBER OF SHARES AS TO WHICH SUCH PERSON HAS:
(I) SOLE POWER TO VOTE OR TO DIRECT THE VOTE OF
2,022,124 SHARES
(II) SHARED POWER TO VOTE OR TO DIRECT THE VOTE OF
0 SHARES
(III) SOLE POWER TO DISPOSE OR TO DIRECT THE DISPOSITION OF
0 SHARES
(IV) SHARED POWER TO DISPOSE OR TO DIRECT THE DISPOSITION OF
2,022,124 SHARES
ITEM 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS _X_
ITEM 6. OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER
PERSON.
NOT APPLICABLE
ITEM 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH
ACQUIRED THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING
COMPANY
NOT APPLICABLE
ITEM 8. IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP
NOT APPLICABLE
ITEM 9. NOTICE OF DISSOLUTION OF GROUP
NOT APPLICABLE
13G PAGE 5 OF 5 PAGES
ITEM 10. CERTIFICATION
THE FOLLOWING CERTIFICATION SHALL BE INCLUDED IF THE
STATEMENT IS FILED PURSUANT TO RULE 13D-1(B):
BY SIGNING BELOW I CERTIFY THAT, TO THE BEST OF MY
KNOWLEDGE AND BELIEF, THE SECURITIES REFERRED TO ABOVE WERE
ACQUIRED IN THE ORDINARY COURSE OF BUSINESS AND WERE NOT ACQUIRED
FOR THE PURPOSE OF AND DO NOT HAVE THE EFFECT OF CHANGING OR
INFLUENCING THE CONTROL OF THE ISSUER OF SUCH SECURITIES AND WERE
NOT ACQUIRED IN CONNECTION WITH OR AS A PARTICIPANT IN ANY
TRANSACTION HAVING SUCH PURPOSES OR EFFECT.
THIS REPORT IS NOT AN ADMISSION THAT STATE STREET BANK AND
TRUST COMPANY IS THE BENEFICIAL OWNER OF ANY SECURITIES COVERED BY
THIS REPORT, AND STATE STREET BANK AND TRUST COMPANY EXPRESSLY
DISCLAIMS BENEFICIAL OWNERSHIP OF ALL SHARES REPORTED HEREIN
PURSUANT TO RULE 13D-4.
SIGNATURE
AFTER REASONABLE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND
BELIEF, I CERTIFY THAT THE INFORMATION SET FORTH IN THIS STATEMENT
IS TRUE, COMPLETE AND CORRECT.
17 FEBRUARY 2009
STATE STREET CORPORATION
STATE STREET BANK AND TRUST COMPANY,
TRUSTEE
/s/ JAYNE DONAHUE
EXECUTIVE VICE PRESIDENT
MWA
turning into quite the pincher
Found a bottom possibly
The trend, dear Fools, is …
It's infrastructure, and over the past few months, we've seen the United States commit hundreds of billions of dollars to building it. That sum joins China's $586 billion, India's $4 billion, and Mexico's $44 billion. And that's mostly new spending since June, when Merrill Lynch announced that it was raising its emerging-markets infrastructure spending forecast from $1.25 trillion per year to $2.25 trillion!
That's a heckuva lot of money, and it's being spent not only because governments fear a prolonged economic downturn, but also because many of them look at their countries and see that they're plagued by decades of underinvestment in roads, ports, railroads, electrical grids, sewer and water lines, and many more. They simply cannot continue their rapid economic growth until they put better infrastructure in place. Get stuck in a traffic jam in Bombay or Jakarta, or look at the quality of life in western China, and you'll readily agree.
There are clear beneficiaries of this spending, including public companies that can help you benefit as well. Some of the names, such as Ameron (NYSE: AMN), Perini (NYSE: PCR), Cemex, Siemens (NYSE: SI), POSCO, and Caterpillar, are obvious. Others, such as General Steel (NYSE: GSI), KHD Humboldt Wedag (NYSE: KHD), Mueller Water (NYSE: MWA), and Matrix Service (Nasdaq: MTRX), are not.
Agree..........The cities, and the firemans best friend, or the dogs that live there?......:)))
Yes this is true, trillions being siphoned out...
However, Mueller is positioned strongly in the American landscape.
Their hydrants are not only requested by many municipalities, they are the only ones accepted in many. They position themselves whereby the municipalities have their products n use for many years and will not switch to another brand, regardless of cost.
Why? Because parts, castings, service have enabled them to be THE hydrant. Much the same way with their valves. Mueller has control over their castings, stems, packings, not replying on offshore inferior products, but by making a continually killer quality product.
Anvil fittings, same thing, USA made, casted here, used by a variety of industry where only USA spec'd products will do. Shipbuilding, municipal, factory, oil etc....
These guys are not going anywhere, just need to kick off some debt, tighten the purse strings and get on with the show
Could be but I cannot even begin to believe we are even close to any kind of market recovery...............the money that has been siphoned out of the market, in the last 2.5 years is estimated at approx $15 trillion, and either went abroad or landed in some of the Cayman banks. The bulk of this money is gone, been coverted etc and not coming back.........it will find a home but not in the US.
This isn't the first time. The Hedgies, and Wall Street Firms, and banks have layed waste to many of these companies, and the owners/insiders have added to this money grab, and guilty of it for years. The money got extracted and the mega controllers, the mega rich who have controlled this market took it out and left with it in fear of another Depression maybe heading our way...............there are some 40 countries that are tax havens, but hedgies who operate in the Caymans, all 10,000 of them are private, offshore, and non registered with the SEC, who answer to no one.............with 250 or so banking institutions, outside of US jurisdiction.
The rich had their money elsewhere in the 20's or they to would have lost it, no one escaped. Same ole stuff today.
I like the company. It has alot to offer to the industry it serves, no one can argue that they are at the top of their game, but when it comes to money, as we have witnessed comes first. Its not just here its widespread, and runs into the hundreds of billions if not trillions annually.
None of these companies insiders could ever conclude that they could take multi-million dollar comp pkgs, and bonuses if they were private.........the argument is that the shareholders pay for this, and many lose their capital caused by it, and none have a voice. Like servants to the king. Most if not all would be in the less than million dollar range, and most in the $100k to $250k salary range.
Until the Congress with regulators reform this we will continue to see this. Owners/Insiders who control the highest percentage of stock ownership should have to keep these restricted until the company is sold, acquired, merge, and then and only then be given the options to sell to the open market or to the new owners, who would then have to keep these restricted, same for a merger.............all of their salaries should be based on a percentage of revenues generated, like any private company, and these issues would go away......if the want to buy stock in the open market they should have to like the rest of us, but need to use good judgement and not be buying or selling from insider information.
if nothing changes nothing changes and if this would ever reoccur or if we are to ever get out from under this corruption so it doesn't happen again things need to change, and without question many of these public run companies should return to the private sector.
Short selling banned, and the Brits Parliment should impose regulations on the Hedgefund industry in the Caymans, like their own London exchange, and make them pay capital and corporate taxes, England is suffering badly.................our country is in debt up to its ears, retailers have lost unbelievable capital and many their homes, and jobs, and this is not the 20's and the SEC was created by FDR to protect the US from this ever happening again........
The corruption began to blossom in during the Kennedy years, and then we got into the 70's and the S&L scandals, which led to the birth of these CDO's, and these CDS's............its all been one big ponzi scheme, and the stockholders, homeowners, workers who really work and pay their taxes, are in fact bailing out all these very same people who enriched themselves even if it brought down their banks and companies.
Fearful Stocks for Greedy Investors
By Rich Smith (TMF Ditty)
February 10, 2009 | Comments (0)
Recs
15
MWA
Mueller Water Pr
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CAPS Rating 5/5 Stars
Down $3.46 $-0.32 (-8.47%)
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"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." -- Warren Buffett
Of all the Oracle of Omaha's orations, this one holds a special place in Foolish investors' hearts. When looking to bag a bargain, a panicked sell-off by jittery investors offers you a great chance to snap up stocks on the cheap.
In the short term, professional traders' pessimism can become a self-fulfilling prophecy. Desperate institutions lower their asking prices to get rid of a stock, prompting buyers' bid prices to fall in tandem, creating the very price decline that both sides feared in the first place -- until the selling stops.
Until it does, savvy investors can "get greedy," snapping up bargains from these fearful sellers. (Assuming they really are bargains.) In today's column, we'll see which stocks Wall Street's motivated sellers are most frantic to unload. Once we've compiled this shopping list of potential picks, we'll check them against the collective intelligence of Motley Fool CAPS.
Today's contenders include:
Company
Recent Price
CAPS Rating
(5 stars max.)
Mueller Water Products (NYSE: MWA)
$3.92
*****
DryShips (Nasdaq: DRYS)
$6.50
**
Las Vegas Sands (NYSE: LVS)
$4.43
**
US Airways (NYSE: LCC)
$5.41
*
Delta Air Lines (NYSE: DAL)
$7.30
*
Companies are selected from the "Institutional Ownership Down Last Month" list published on MSN Money on the Saturday following close of trading last week. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.
Wall Street is dumping these stocks like the proverbial hot potato. And Main Street investors? "Thanks, but no thanks," we say. "We're on Atkins."
But water's got no carbs, right? So Mueller Water Products should be a safe place for dieters and investors frightened by a recession alike, right? Well, let's find out.
The bull case for Mueller Water Products
Wijilly introduces us to the company, which counts Home Depot (NYSE: HD) and American Water Works among its customers:
Mueller is a well known quality water fixture supplier. As long as buildings are going up, Mueller will be cashin in. Certainly there is less construction at the moment, but soon we are going to see more as our new stimulus plans are put into action.
Maybe. But maybe may be good enough for All-Star CAPS member TSIF, who lays out the bull thesis for Mueller thusly:
The US plumbing, piping, buildings, all need 'fixed' even if the 'give it away' package doesn't keep the municipal parts of the package. Mueller ... made a profit [last] quarter and is aggressively 'right sizing'. Large inventory is available when recovery does start. Cash position is better than it has been. Debt is manageable.
Possibly. It's worth noting that the firm is more than twice as heavily leveraged as larger, better-funded rival Tyco (NYSE: TYC). Chiming in with the rest of the chorus is fellow CAPS All-Star HansHauge, who agrees that Mueller's in the right business at close to the right time: "Being tied to construction is not exactly the most favorable thing right now, but water is always a basic need. No amount of recession will put the plumbing industry out of work."
Keeping the big picture in mind, I'd say I agree with our CAPS contributors this week. We do need water. We do need the infrastructure to pipe it into our homes, and the fixtures to release it from the tap. And if the government's new stimulus package floods Mueller Water with new business, that could be very good indeed for shareholders.
But what if it doesn't?
Then -- to paraphrase a certain ex-secretary of defense -- we've got to go to market with the numbers we've got, not the numbers we wish we had. And Fools, Mueller's numbers just don't look very good to me right now. The company just closed out a miserable calendar year in which the last quarter's impairment charge erased many years' worth of historical profit, and plunged Mueller into a $387 million bath of red ink.
Nor does the cash-flow picture look much better. Although Mueller generated positive free cash flow in the last 12 months, this still amounted to less than $27 million, giving the firm a trailing enterprise value-to-free cash flow ratio of 52. Call me a hydrophobe if you like, but that valuation just doesn't seem sustainable in light of analyst expectations of 9% long-term profits growth at Mueller. With a massive debt load, minimal and weakening cash flows to support it, and limited growth prospects in its future, Mueller looks like pretty weak tea to me.
Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Mueller Water Products -- or even what other CAPS players are saying. We really want to hear your thoughts. Is there more to Mueller's business than meets the eye? Or even if there isn't, will the stimulus package ride to Muller's rescue? Click on over to Motley Fool CAPS and tell us what you think.
Motley Fool CAPS : It's fun, it's free, and it just might make you famous.
Gregory E. Hyland
Chief Executive Officer
Mueller Water Products Inc.
The proxy statement for Mueller Water Products Inc. uses the new SEC executive compensation rules.
In 2007, Gregory E. Hyland raked in $4,455,053 in total compensation according to the SEC. According to the AFL-CIO's calculation method*, this CEO raked in $6,812,878 in total 2007 compensation.
kewl...I like PHO too.
Go in MWA at 3.83 thios morning and sitting bid on May 5.00 calls trying for .50/each
negative--I'm in PHO instead--
#board-14763
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Options Get Options for:
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Frenchee, you still watching this one?
this one got its butt kicked today, should be a bouncer in a couple days imo.
Mueller Water Products Reports Fiscal 2008 First Quarter Results
ATLANTA, Feb. 5 /PRNewswire-FirstCall/ -- Mueller Water Products, Inc. (NYSE: MWA.B, MWA) today reported net sales of $412.3 million, income from operations of $16.4 million, and net loss of $1.6 million, or $0.01 per diluted share in its first quarter ended December 31, 2007. These results include restructuring charges of $16.2 million ($9.5 million after tax, or $0.08 per diluted share) in connection with the previously announced closure of the U.S. Pipe segment's ductile iron pipe manufacturing operations in Burlington, N.J. These charges are comprised of $14.8 million of asset impairments and $1.4 million of accrued employee-related costs. Excluding these charges, adjusted income from operations was $32.6 million and adjusted net income was $7.9 million, or $0.07 per diluted share. Summarized consolidated 2008 first quarter results compared to consolidated 2007 first quarter results are as follows:
-- Net sales for the 2008 first quarter were $412.3 million compared to
$411.9 million for the 2007 first quarter.
-- Income from operations for the 2008 first quarter was $16.4 million
compared to $49.0 million in the 2007 first quarter. Operating income
margin was 4.0 percent in the 2008 first quarter and was 11.9 percent
in the 2007 first quarter. Excluding the restructuring charges,
adjusted income from operations for the 2008 first quarter was
$32.6 million and adjusted operating income margin was 7.9 percent.
-- Adjusted EBITDA was $56.2 million in the 2008 first quarter compared to
$73.4 million in the 2007 first quarter. Adjusted EBITDA margin for the
2008 first quarter was 13.6 percent compared to 17.8 percent in the
2007 first quarter.
-- Net loss per diluted share was $0.01 for the 2008 first quarter and net
income per diluted share was $0.15 in the 2007 first quarter.
Excluding the restructuring charges, adjusted net income per diluted
share was $0.07 for the 2008 first quarter.
-- Cash and cash equivalents increased $38.0 million in the 2008 first
quarter compared to a decline of $9.9 million in the 2007 first
quarter.
"Our first-quarter results were essentially as we expected. Margins were principally impacted by both under-absorbed overhead costs associated with our inventory reduction plan and higher raw material costs," said Gregory E. Hyland, chairman, president and chief executive officer of Mueller Water Products. "In the near-term, the Burlington closure remains on track, and we expect to realize the benefits of it in the second half of the year; our inventory reduction plan is essentially complete, and we are pleased with the free cash flow we have generated. The actions we are taking today help strengthen our current position and will make us even more competitive in the future, especially as we expect to continue to see an increase in public spending to repair and replace water infrastructure."
First Quarter Consolidated Operating Results
Net sales increased slightly year-over-year due to higher sales pricing in the Mueller Co. and Anvil segments, a favorable impact of Canadian currency exchange rates, and net sales from Fast Fabricators, which was acquired in January 2007. Volume declined, principally caused by the continued downturn in residential construction-related demand. While we believe volume related to repair and replacement work in the municipal sector increased year-over-year, it did not offset the ongoing weakness in residential construction.
The declines in operating income and related margin were attributable to higher raw material costs, which generally exceeded sales price increases, and to under-absorbed overhead and volume declines. Under-absorbed overhead was due to reduced plant production levels associated with inventory reductions and lower shipments. These factors were partially mitigated by cost savings.
First Quarter Segment Results
Mueller Co. Segment
Net sales for the Mueller Co. segment were $161.6 million in the 2008 first quarter compared to $162.1 million in the 2007 first quarter. Volume declines of $7.6 million in the quarter were partially offset by sales price increases of $7.1 million. Brass service products declined sharply as the sale of these products is directly impacted by residential construction. Unit shipment volumes for iron gate valves and hydrants were essentially flat.
Income from operations of $24.8 million and EBITDA of $37.4 million in the 2008 first quarter compared to income from operations of $35.7 million and EBITDA of $48.4 million in the 2007 first quarter. Volume declines reduced operating income by approximately $3.0 million. Higher sales pricing of $7.1 million more than offset a $5.6 million increase in the cost of raw materials and purchased components. But, we were burdened with under-absorbed overhead costs of approximately $9.0 million in the 2008 first quarter, which resulted from reduced production in the 2007 fourth quarter due to the inventory reduction plan and lower market demand. Approximately $5 million of the under-absorbed overhead costs was caused by the inventory reduction plan.
U.S. Pipe Segment
Net sales for the U.S. Pipe segment were $110.7 million in the 2008 first quarter compared to $116.4 million in the 2007 first quarter. Lower ductile iron pipe shipments were partially offset by the added net sales from the acquisition of Fast Fabricators.
Loss from operations of $15.3 million in the 2008 first quarter includes restructuring charges of $16.2 million of plant closure costs related to the closure of the Burlington ductile iron pipe manufacturing operations. Excluding the restructuring charges, adjusted income from operations was $0.9 million and adjusted EBITDA was $6.8 million. These results compare to income from operations of $7.2 million and EBITDA of $12.7 million in the 2007 first quarter. The 2008 first quarter results were negatively impacted by a $9.9 million increase in the cost of raw materials, lower shipment volumes of ductile iron pipe and a less favorable product mix.
Anvil Segment
Net sales for the Anvil segment were $140.0 million in the 2008 first quarter compared to $133.4 million in the 2007 first quarter. This increase was driven primarily by the favorable impact of Canadian currency exchange rates and higher sales pricing. Income from operations of $15.9 million and EBITDA of $20.9 million in the 2008 first quarter compares to income from operations of $13.0 million and EBITDA of $18.9 million in the 2007 first quarter.
Burlington Closure Restructuring Charges
In November 2007, the Company announced its intention to close the U.S. Pipe manufacturing operations in Burlington, N.J. while retaining the facility as a full-service distribution center for customers in the Northeast. In connection with this action, the Company also announced its intention to record restructuring charges of $19.0 million, of which approximately $4.0 million is expected to be cash expenditures. In the 2008 first quarter, the Company recorded $16.2 million of restructuring charges and expects to incur the remaining expenses throughout the balance of fiscal 2008.
Interest Expense, Net
Interest expense, net of interest income, was $19.2 million in the 2008 first quarter compared to $20.4 million in the 2007 first quarter. Interest expense declined as a result of the Company's debt refinancing in May 2007.
Income Tax Expense
The effective income tax rate was 41.5 percent in the 2008 first quarter compared to 40.5 percent in the 2007 first quarter.
Use of Non-GAAP Measures
The Company presents certain non-GAAP measures, including adjusted EBITDA, adjusted income from operations, adjusted net income and adjusted operating income margin. Adjusted EBITDA represents income before depreciation, amortization, interest expense, interest income, income taxes, and restructuring charges relating to the announced closing of U.S. Pipe's manufacturing operations in Burlington, N.J. The Company presents adjusted EBITDA because it is an important supplemental measure of performance and management believes it is frequently used by securities analysts, investors and interested parties in the evaluation of financial performance. Adjusted income from operations, adjusted net income and adjusted operating income margin exclude the restructuring charges.
In addition, the Company's credit agreement uses its definition of EBITDA to measure compliance with covenants, such as interest coverage and debt incurrence. A form of EBITDA also is 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 debt. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will 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 the Company, 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 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.
A reconciliation of non-GAAP to GAAP results is included as an attachment to this press release and has been posted at www.muellerwaterproducts.com.
Mueller basing between 9-11...
Mueller is both intermediate and short-term down trends. Look for a sign of a short-term trend change on the decisive break of the blue trend line on the daily charts in the iBox.
Mueller H2O on a short-term buy. In addition, the weekly charts look constructive as well...
Mueller is looking big-time bearish. Maybe we get luckly with a double bottom?
Water is a bigger issue. US News & World Report, MarketWatch and Newsweek are sporting cover stories on the global water crisis this week. And the big Asian bank CLSA Capital Partners recently released the Clean Water Asia fund.
“China alone,” said fund manager Andrew Pidden, “has allocated $132 billion to water infrastructure, wastewater treatment and irrigation over the current 2006-2010 five-year plan. Traditionally, governments have been the drivers in water management, and to date, there has been limited private-sector involvement. This is changing, and we are seeing China and India encouraging the interest of small listed companies and large multinationals.”
Value Player Pipes Up for Mueller Water
By NAUREEN S. MALIK
MUELLER WATER PRODUCTS is facing pressure amid the housing market fallout, but value investor Bruce Berkowitz is pumped up for long-term growth at the manufacturer of water pipes, valves and fire hydrants.
On Feb. 1 through March 30, Berkowitz, the founder and president of Fairholme Capital Management, plunked down $20.5 million for 1.49 million class B Mueller shares on the open market on behalf of the Miami-based investment firm, according to a Securities and Exchange Commission filing Tuesday. Shares were priced from $13.42 to $14.64.
These purchases raised Fairholme's stake to 9.52 million class B shares, or 8.31% of the 114.6 million outstanding shares (including classes A and B) Mueller had outstanding as of Dec. 31. The investment firm had an initial stake of 6.68% with nearly 7.66 million class B shares at the end of 2006, and then raised that stake to 7.97% with 9.14 million shares by the end of February.
Fairholme declined to comment on these transactions.
The investment firm filed as a passive investor with the SEC earlier this year but switched to an activist stance this week. But in its 13D filing, Fairholme only reserved the right to consult with management from time to time with the right to take other action.
Ben Silverman, director of research at InsiderScore.com, notes that Fairholme is a "value investor buying on weakness, which is what you expect and look for."
It is unclear at what prices or precisely when Fairholme purchased the first 9.14 million class B shares, but class B shares of Mueller only started trading in December 2006.
Class B shares have eight votes per share while class A shares have one vote per share.
Mueller shares went public at $16 last May with 25 million class A shares while parent company Walter Industries held on to a 75% stake. Walter distributed the remaining 85.8 million class B shares it held to shareholders in a tax-exempt offering in December. At the same time, Gregory Hyland, chairman and chief executive of both companies, stepped down from those positions at Walter to focus on Mueller.
So either Fairholme purchased 7.66 million Mueller class B shares on the open market in the last two weeks of December or it had purchased Walter shares to receive the Mueller distribution. Fairholme reported no Walter holdings in its fourth-quarter report.
A slew of Mueller executives and directors were buying class A shares last June. (See Inside Scoop, "Mueller Water Buyers Get Their Feet Wet," June 13, 2006.)
At $13.76, class B Mueller shares are trading down 9% so far this year and a slight discount to class A shares. That class B stock touched a high of $16.20 on Dec. 7 and sank to a low of $13.09 this past Monday.
Given the stock's rather lackluster debut, Silverman says, "It would be interesting to see if Berkowitz and Fairholme turn up the heat," particularly because they do not have a history of activism.
For the fiscal first quarter ending on Dec. 21, 2006, Mueller's earnings fell shy of the consensus estimate amid the breakdown in the residential construction market, which made up 40% of the company's revenues in 2006.
A Mueller spokeswoman declined to speak directly about Fairholme's purchase but noted that Mueller is poised to take advantage of an upgrade spending cycle for water pipes and valves.
Joshua Hong, director of research at OwnershipAnalyzer.com, notes that Fairholme's recent purchases are "positive" after some institutional selling pressure weighed on the stock in the fourth quarter.
Activist hedge fund Pirate Capital last week cut its holdings in Mueller to 4.05 million shares, or a 4.7% stake, from 4.79 million shares, or a 5.6% stake, held in December.
But Anthony Fritz, analyst at sell-side broker dealer Gabelli & Co., sees room for further weakness over the next couple of quarters. "I think if you buy it at today's price, in a couple years you will be a happy person," he says.
Fritz maintains a Buy rating and sees Mueller's private-market value at $21 for 2008.
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Recent Insider Activity
BUYERS:
COMPANY NAME INSIDERS NAME TITLE $ VALUE NO. OF SHARES IN TRANS. RANGE OF VALUES TRANSACTIONS DATES
Gray Television J. Robinson CEO $2,969,727 274,301 10.2-11.12 March 30, 2007
Corcept Therapeutics J. Cook D 600,000 600,000 1.00 March 30, 2007
Corcept Therapeutics J. Wilson D 360,000 360,000 1.00 March 30, 2007
GSC Investment D. Castro O 300,000 20,000 15.00 March 23, 2007
Cadence Financial J. Dowdle D 201,933 10,000 20.11-20.31 March 27-29, 2007
GSC Investment T. Inglesby CEO 180,000 12,000 15.00 March 23, 2007
Local.com H. Clarke CEO 178,733 37,136 4.78-4.84 March 30, 2007
GSC Investment G. Williams D 150,000 10,000 15.00 March 23, 2007
DSW P. Miller D 105,500 2,500 42.20 April 2, 2007
Mexico Fund E. Reyes Retana D 81,200 2,000 40.60 April 2, 2007
(Source: Thomson Financial/Baseline)
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SELLERS:
COMPANY NAME INSIDERS NAME TITLE $ VALUE NO. OF SHARES IN TRANS. RANGE OF VALUES TRANSACTIONS DATES
Dominion Resources T. Farrell CEO $9,003,800 100,000 90.04 April 2, 2007
Salesforce.com C. Ramsey D 8,538,100 200,000 42.6-42.89 March 30, 2007
NBTY S. Rudolph CEO 5,821,996 111,400 51.9-52.39 April 2, 2007
Steelcase P. Welch D 4,320,690 215,748 20.02-20.03 April 3, 2007
NBTY S. Rudolph CEO 3,372,718 64,200 52.4-52.71 April 2, 2007
Dominion Resources M. McGettrick EVP 3,001,237 33,333 90.04 April 2, 2007
HealthExtras M. Donovan CFO 2,678,770 93,703 28.44-28.72 April 2, 2007
NeuStar J. Ganek CEO 2,483,536 88,800 27.8-28.3 April 2, 2007
Dominion Resources J. Johnson O 2,423,733 26,919 90.04 April 2, 2007
Men's Wearhouse J. Zimmer O 2,367,195 50,000 47.34 April 2, 2007
(Source: Thomson Financial/Baseline)
Time to short MWA again if it gets to 16.50 on 21 Feb. See chart in iBox...
Got out of the short at the close today. Probably too soon but cannot go broke taking a profit!
MWA currently looks like a good short candidate based on the chart in the ibox.
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