Delaware | 20-3547095 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
Item 1. | FINANCIAL STATEMENTS |
June 30, | September 30, | ||||||
2013 | 2012 | ||||||
(in millions) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | 69.2 | $ | 83.0 | |||
Receivables, net | 167.5 | 166.1 | |||||
Inventories | 201.4 | 183.2 | |||||
Deferred income taxes | 29.2 | 19.6 | |||||
Other current assets | 48.5 | 38.0 | |||||
Total current assets | 515.8 | 489.9 | |||||
Property, plant and equipment, net | 144.9 | 144.7 | |||||
Identifiable intangible assets | 552.5 | 573.7 | |||||
Other noncurrent assets | 17.2 | 32.6 | |||||
Total assets | $ | 1,230.4 | $ | 1,240.9 | |||
Liabilities and stockholders’ equity: | |||||||
Current portion of long-term debt | $ | 1.3 | $ | 1.1 | |||
Accounts payable | 80.6 | 84.5 | |||||
Other current liabilities | 68.7 | 82.8 | |||||
Total current liabilities | 150.6 | 168.4 | |||||
Long-term debt | 599.6 | 621.7 | |||||
Deferred income taxes | 139.4 | 132.8 | |||||
Other noncurrent liabilities | 80.3 | 86.8 | |||||
Total liabilities | 969.9 | 1,009.7 | |||||
Commitments and contingencies (Note 11) | |||||||
Common stock: 600,000,000 shares authorized; 158,037,679 and 156,840,648 shares outstanding at June 30, 2013 and September 30, 2012, respectively | 1.6 | 1.6 | |||||
Additional paid-in capital | 1,585.1 | 1,587.3 | |||||
Accumulated deficit | (1,242.7 | ) | (1,270.0 | ) | |||
Accumulated other comprehensive loss | (83.5 | ) | (87.7 | ) | |||
Total stockholders’ equity | 260.5 | 231.2 | |||||
Total liabilities and stockholders’ equity | $ | 1,230.4 | $ | 1,240.9 |
Three months ended | Nine months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(in millions, except per share amounts) | |||||||||||||||
Net sales | $ | 299.4 | $ | 275.9 | $ | 827.6 | $ | 742.8 | |||||||
Cost of sales | 209.4 | 196.3 | 603.2 | 548.3 | |||||||||||
Gross profit | 90.0 | 79.6 | 224.4 | 194.5 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 56.9 | 53.2 | 159.0 | 150.3 | |||||||||||
Restructuring | 0.2 | 0.7 | 1.3 | 2.0 | |||||||||||
Total operating expenses | 57.1 | 53.9 | 160.3 | 152.3 | |||||||||||
Operating income | 32.9 | 25.7 | 64.1 | 42.2 | |||||||||||
Interest expense, net | 12.7 | 14.9 | 39.0 | 46.1 | |||||||||||
Loss on early extinguishment of debt | — | 1.5 | 1.4 | 1.5 | |||||||||||
Income (loss) before income taxes | 20.2 | 9.3 | 23.7 | (5.4 | ) | ||||||||||
Income tax expense | 4.2 | 3.4 | 5.1 | 4.1 | |||||||||||
Income (loss) from continuing operations | 16.0 | 5.9 | 18.6 | (9.5 | ) | ||||||||||
Income (loss) from discontinued operations, net of tax | (1.9 | ) | 3.9 | 8.7 | (102.4 | ) | |||||||||
Net income (loss) | $ | 14.1 | $ | 9.8 | $ | 27.3 | $ | (111.9 | ) | ||||||
Net income (loss) per basic share: | |||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.04 | $ | 0.12 | $ | (0.06 | ) | ||||||
Discontinued operations | (0.01 | ) | 0.02 | 0.05 | (0.66 | ) | |||||||||
Net income (loss) | $ | 0.09 | $ | 0.06 | $ | 0.17 | $ | (0.72 | ) | ||||||
Net income (loss) per diluted share: | |||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.04 | $ | 0.12 | $ | (0.06 | ) | ||||||
Discontinued operations | (0.01 | ) | 0.02 | 0.05 | (0.66 | ) | |||||||||
Net income (loss) | $ | 0.09 | $ | 0.06 | $ | 0.17 | $ | (0.72 | ) | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 158.0 | 156.7 | 157.6 | 156.4 | |||||||||||
Diluted | 160.7 | 158.0 | 160.0 | 156.4 | |||||||||||
Dividends declared per share | $ | 0.0175 | $ | 0.0175 | $ | 0.0525 | $ | 0.0525 |
Three months ended | Nine months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(in millions) | |||||||||||||||
Net income (loss) | $ | 14.1 | $ | 9.8 | $ | 27.3 | $ | (111.9 | ) | ||||||
Other comprehensive income (loss): | |||||||||||||||
Natural gas hedges | — | 0.3 | — | — | |||||||||||
Income tax effects | — | (0.1 | ) | — | — | ||||||||||
Interest rate swap contracts | — | 1.3 | — | 4.3 | |||||||||||
Income tax effects | — | (0.5 | ) | — | (1.7 | ) | |||||||||
Foreign currency translation | (1.9 | ) | (1.6 | ) | (3.7 | ) | 0.4 | ||||||||
Minimum pension liability | 2.3 | (1.0 | ) | 1.2 | 0.3 | ||||||||||
Income tax effects | — | 0.2 | 6.7 | (0.2 | ) | ||||||||||
0.4 | (1.4 | ) | 4.2 | 3.1 | |||||||||||
Comprehensive income (loss) | $ | 14.5 | $ | 8.4 | $ | 31.5 | $ | (108.8 | ) |
Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Balance at September 30, 2012 | $ | 1.6 | $ | 1,587.3 | $ | (1,270.0 | ) | $ | (87.7 | ) | $ | 231.2 | |||||||
Net income | — | — | 27.3 | — | 27.3 | ||||||||||||||
Dividends declared | — | (8.3 | ) | — | — | (8.3 | ) | ||||||||||||
Stock-based compensation | — | 5.3 | — | — | 5.3 | ||||||||||||||
Shares retained for employee taxes | — | (1.5 | ) | — | — | (1.5 | ) | ||||||||||||
Stock issued under stock compensation plans | — | 2.3 | — | — | 2.3 | ||||||||||||||
Foreign currency translation | — | — | — | (3.7 | ) | (3.7 | ) | ||||||||||||
Minimum pension liability | — | — | — | 7.9 | 7.9 | ||||||||||||||
Balance at June 30, 2013 | $ | 1.6 | $ | 1,585.1 | $ | (1,242.7 | ) | $ | (83.5 | ) | $ | 260.5 |
Nine months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(in millions) | |||||||
Operating activities: | |||||||
Net income (loss) | $ | 27.3 | $ | (111.9 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
(Income) loss from discontinued operations | (8.7 | ) | 102.4 | ||||
Income (loss) from continuing operations | 18.6 | (9.5 | ) | ||||
Depreciation | 22.3 | 23.2 | |||||
Amortization | 22.1 | 22.0 | |||||
Stock-based compensation | 5.6 | 3.8 | |||||
Deferred income taxes | 3.5 | 12.9 | |||||
Retirement plans | 3.1 | 4.1 | |||||
Early extinguishment of debt | 1.4 | 1.5 | |||||
Interest rate swap contracts | — | 4.3 | |||||
Other, net | 1.8 | 2.1 | |||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Receivables | (2.4 | ) | (9.2 | ) | |||
Inventories | (19.0 | ) | (21.0 | ) | |||
Other assets | (0.1 | ) | (0.7 | ) | |||
Liabilities | (14.1 | ) | (9.0 | ) | |||
Net cash provided by operating activities from continuing operations | 42.8 | 24.5 | |||||
Investing activities: | |||||||
Capital expenditures | (23.0 | ) | (19.5 | ) | |||
Acquisitions, net of cash acquired | (1.1 | ) | 0.5 | ||||
Proceeds from sales of assets | 0.1 | 0.4 | |||||
Net cash used in investing activities from continuing operations | (24.0 | ) | (18.6 | ) | |||
Financing activities: | |||||||
Debt paid | — | (34.0 | ) | ||||
Early repayment of debt | (23.2 | ) | (23.2 | ) | |||
Dividends paid | (8.3 | ) | (8.2 | ) | |||
Common stock issued | 2.3 | 0.7 | |||||
Shares retained for employee taxes | (1.5 | ) | (0.4 | ) | |||
Payment of deferred financing fees | (0.7 | ) | — | ||||
Other | 0.2 | 0.7 | |||||
Net cash used in financing activities from continuing operations | (31.2 | ) | (64.4 | ) | |||
Net cash flows from discontinued operations: | |||||||
Operating activities | (4.1 | ) | (36.6 | ) | |||
Investing activities | 4.5 | 87.4 | |||||
Net cash provided by discontinued operations | 0.4 | 50.8 | |||||
Effect of currency exchange rate changes on cash | (1.8 | ) | 0.4 | ||||
Net change in cash and cash equivalents | (13.8 | ) | (7.3 | ) | |||
Cash and cash equivalents at beginning of period | 83.0 | 61.0 | |||||
Cash and cash equivalents at end of period | $ | 69.2 | $ | 53.7 |
Note 1. | Organization |
Note 2. | Discontinued Operations |
Three months ended | Nine months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(in millions) | |||||||||||||||
Net sales | $ | — | $ | — | $ | — | $ | 197.0 | |||||||
Cost of sales | — | — | — | 197.9 | |||||||||||
Gross loss | — | — | — | (0.9 | ) | ||||||||||
Operating expenses (benefits) | 1.9 | (1.8 | ) | (3.7 | ) | 8.9 | |||||||||
Operating income (loss) | (1.9 | ) | 1.8 | 3.7 | (9.8 | ) | |||||||||
Interest expense | — | — | — | 0.3 | |||||||||||
Loss (gain) on sale of discontinued operations | — | 2.2 | (5.0 | ) | 118.7 | ||||||||||
Income tax benefit | — | (4.3 | ) | — | (26.4 | ) | |||||||||
Income (loss) from discontinued operations, net of tax | $ | (1.9 | ) | $ | 3.9 | $ | 8.7 | $ | (102.4 | ) |
Note 3. | Income Taxes |
Three months ended | Nine months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(in millions) | |||||||||||||||
Expense (benefit) from pre-tax operating income (loss) | $ | 8.1 | $ | 3.8 | $ | 9.6 | $ | (2.4 | ) | ||||||
Deferred tax asset valuation allowance adjustment | (4.0 | ) | — | (4.5 | ) | 5.9 | |||||||||
Other discrete items | 0.1 | (0.4 | ) | — | 0.6 | ||||||||||
$ | 4.2 | $ | 3.4 | $ | 5.1 | $ | 4.1 |
Note 4. | Borrowing Arrangements |
June 30, | September 30, | ||||||
2013 | 2012 | ||||||
(in millions) | |||||||
ABL Agreement | $ | — | $ | — | |||
8.75% Senior Unsecured Notes | 177.9 | 199.9 | |||||
7.375% Senior Subordinated Notes | 420.0 | 420.0 | |||||
Other | 3.0 | 2.9 | |||||
600.9 | 622.8 | ||||||
Less current portion | (1.3 | ) | (1.1 | ) | |||
$ | 599.6 | $ | 621.7 |
Note 5. | Derivative Financial Instruments |
Note 6. | Retirement Plans |
Three months ended | Nine months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(in millions) | |||||||||||||||
Service cost | $ | 0.5 | $ | 0.7 | $ | 1.5 | $ | 1.3 | |||||||
Interest cost | 1.6 | 7.5 | 4.8 | 12.7 | |||||||||||
Expected return on plan assets | (2.2 | ) | (7.7 | ) | (6.5 | ) | (13.5 | ) | |||||||
Amortization of prior service cost | — | 0.2 | — | 0.4 | |||||||||||
Amortization of actuarial net loss | 0.8 | 0.2 | 2.3 | 1.8 | |||||||||||
Net periodic benefit cost | $ | 0.7 | $ | 0.9 | $ | 2.1 | $ | 2.7 |
Note 7. | Stock-based Compensation Plans |
Number granted | Weighted average grant date fair value per instrument | Total grant date fair value (in millions) | ||||||||
Quarter ended December 31, 2012: | ||||||||||
Restricted stock units | 406,658 | $ | 5.22 | $ | 2.1 | |||||
Employee stock purchase plan instruments | 87,390 | 1.28 | 0.1 | |||||||
Phantom Plan awards | 382,605 | 5.22 | 2.0 | |||||||
Cash-settled performance shares | 243,992 | 5.22 | 1.3 | |||||||
Stock-settled performance shares | 406,658 | 5.22 | 2.1 | |||||||
Quarter ended March 31, 2013: | ||||||||||
Restricted stock units | 102,680 | 5.97 | 0.6 | |||||||
Non-qualified stock options | 125,780 | 3.23 | 0.4 | |||||||
Employee stock purchase plan instruments | 69,221 | 1.38 | 0.1 | |||||||
Quarter ended June 30, 2013: | ||||||||||
Restricted stock units | — | — | — | |||||||
Non-qualified stock options | — | — | — | |||||||
Employee stock purchase plan instruments | 63,757 | 1.20 | 0.1 | |||||||
1,888,741 | $ | 8.8 |
Note 8. | Supplemental Balance Sheet Information |
June 30, | September 30, | ||||||
2013 | 2012 | ||||||
(in millions) | |||||||
Inventories: | |||||||
Purchased components and raw materials | $ | 77.2 | $ | 69.7 | |||
Work in process | 31.5 | 27.5 | |||||
Finished goods | 92.7 | 86.0 | |||||
$ | 201.4 | $ | 183.2 | ||||
Other current assets: | |||||||
Maintenance and repair tooling | $ | 22.7 | $ | 22.9 | |||
Income taxes | 14.1 | 3.9 | |||||
U.S. Pipe-related workers compensation and other reimbursements | 3.2 | 4.3 | |||||
Other | 8.5 | 6.9 | |||||
$ | 48.5 | $ | 38.0 | ||||
Property, plant and equipment, net: | |||||||
Land | $ | 10.6 | $ | 10.6 | |||
Buildings | 75.2 | 73.0 | |||||
Machinery and equipment | 306.1 | 292.4 | |||||
Construction in progress | 20.1 | 15.3 | |||||
412.0 | 391.3 | ||||||
Accumulated depreciation and amortization | (267.1 | ) | (246.6 | ) | |||
$ | 144.9 | $ | 144.7 | ||||
Other current liabilities: | |||||||
Compensation and benefits | $ | 33.4 | $ | 41.0 | |||
Customer rebates | 11.9 | 13.7 | |||||
Interest | 8.2 | 12.2 | |||||
Taxes other than income taxes | 4.8 | 5.6 | |||||
Warranty | 2.2 | 1.6 | |||||
Income taxes | 1.3 | 0.9 | |||||
Restructuring | — | 0.6 | |||||
Environmental | 0.2 | 0.2 | |||||
Other | 6.7 | 7.0 | |||||
$ | 68.7 | $ | 82.8 |
Note 9. | Segment Information |
Three months ended | Nine months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(in millions) | |||||||||||||||
Net sales, excluding intersegment sales: | |||||||||||||||
Mueller Co. | $ | 199.3 | $ | 182.6 | $ | 538.5 | $ | 465.2 | |||||||
Anvil | 100.1 | 93.3 | 289.1 | 277.6 | |||||||||||
$ | 299.4 | $ | 275.9 | $ | 827.6 | $ | 742.8 | ||||||||
Intersegment sales: | |||||||||||||||
Mueller Co. | $ | 2.2 | $ | 1.5 | $ | 5.4 | $ | 5.3 | |||||||
Anvil | — | 0.1 | 0.1 | 0.1 | |||||||||||
$ | 2.2 | $ | 1.6 | $ | 5.5 | $ | 5.4 | ||||||||
Operating income (loss): | |||||||||||||||
Mueller Co. | $ | 30.2 | $ | 23.9 | $ | 61.5 | $ | 36.8 | |||||||
Anvil | 12.3 | 9.9 | 27.3 | 27.5 | |||||||||||
Corporate | (9.6 | ) | (8.1 | ) | (24.7 | ) | (22.1 | ) | |||||||
$ | 32.9 | $ | 25.7 | $ | 64.1 | $ | 42.2 | ||||||||
Depreciation and amortization: | |||||||||||||||
Mueller Co. | $ | 10.9 | $ | 11.3 | $ | 33.5 | $ | 34.1 | |||||||
Anvil | 3.6 | 3.6 | 10.6 | 10.7 | |||||||||||
Corporate | 0.1 | 0.1 | 0.3 | 0.4 | |||||||||||
$ | 14.6 | $ | 15.0 | $ | 44.4 | $ | 45.2 | ||||||||
Restructuring: | |||||||||||||||
Mueller Co. | $ | 0.2 | $ | 0.7 | $ | 1.2 | $ | 1.9 | |||||||
Anvil | — | — | 0.1 | 0.2 | |||||||||||
Corporate | — | — | — | (0.1 | ) | ||||||||||
$ | 0.2 | $ | 0.7 | $ | 1.3 | $ | 2.0 | ||||||||
Capital expenditures: | |||||||||||||||
Mueller Co. | $ | 6.3 | $ | 4.8 | $ | 14.6 | $ | 12.0 | |||||||
Anvil | 2.3 | 2.6 | 8.3 | 7.5 | |||||||||||
Corporate | 0.1 | — | 0.1 | — | |||||||||||
$ | 8.7 | $ | 7.4 | $ | 23.0 | $ | 19.5 |
Note 10. | Changes in Accumulated Other Comprehensive Loss by Component |
Foreign currency translation | Minimum pension liability, net of tax | Total | |||||||||
(in millions) | |||||||||||
Balance at September 30, 2012 | $ | 9.2 | $ | (96.9 | ) | $ | (87.7 | ) | |||
Current period other comprehensive income (loss) | (3.7 | ) | 7.9 | 4.2 | |||||||
Balance at June 30, 2013 | $ | 5.5 | $ | (89.0 | ) | $ | (83.5 | ) |
Note 11. | Commitments and Contingencies |
Note 12. | Subsequent Events |
State of incorporation or organization | ||
Anvil International, LLC | Delaware | |
AnvilStar, LLC | Delaware | |
Echologics, LLC | Delaware | |
Henry Pratt Company, LLC | Delaware | |
Henry Pratt International, LLC | Delaware | |
Hunt Industries, LLC | Delaware | |
Hydro Gate, LLC | Delaware | |
J.B. Smith Mfg. Co., LLC | Delaware | |
James Jones Company, LLC | Delaware | |
Milliken Valve, LLC | Delaware | |
Mueller Co. LLC | Delaware | |
Mueller Financial Services, LLC | Delaware | |
Mueller Group, LLC | Delaware | |
Mueller Group Co-Issuer, Inc. | Delaware | |
Mueller International, L.L.C. | Delaware | |
Mueller Property Holdings, LLC | Delaware | |
Mueller Co. International Holdings, LLC | Delaware | |
Mueller Service California, Inc. | Delaware | |
Mueller Service Co., LLC | Delaware | |
Mueller Systems, LLC | Delaware | |
OSP, LLC | Delaware | |
U.S. Pipe Valve & Hydrant, LLC | Delaware |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 38.5 | $ | (4.7 | ) | $ | 35.4 | $ | — | $ | 69.2 | ||||||||
Receivables, net | 0.2 | 150.3 | 17.0 | — | 167.5 | ||||||||||||||
Inventories | — | 188.2 | 13.2 | — | 201.4 | ||||||||||||||
Deferred income taxes | 28.8 | — | 0.4 | — | 29.2 | ||||||||||||||
Other current assets | 19.7 | 26.9 | 1.9 | — | 48.5 | ||||||||||||||
Total current assets | 87.2 | 360.7 | 67.9 | — | 515.8 | ||||||||||||||
Property, plant and equipment, net | 1.5 | 135.2 | 8.2 | — | 144.9 | ||||||||||||||
Identifiable intangible assets | — | 551.0 | 1.5 | — | 552.5 | ||||||||||||||
Other noncurrent assets | 15.8 | 0.5 | 0.9 | — | 17.2 | ||||||||||||||
Investment in subsidiaries | 110.5 | 38.9 | — | (149.4 | ) | — | |||||||||||||
Total assets | $ | 215.0 | $ | 1,086.3 | $ | 78.5 | $ | (149.4 | ) | $ | 1,230.4 | ||||||||
Liabilities and stockholders' equity: | |||||||||||||||||||
Current portion of long-term debt | $ | — | $ | 1.3 | $ | — | $ | — | $ | 1.3 | |||||||||
Accounts payable | 7.0 | 67.5 | 6.1 | — | 80.6 | ||||||||||||||
Other current liabilities | 22.3 | 42.0 | 4.4 | — | 68.7 | ||||||||||||||
Total current liabilities | 29.3 | 110.8 | 10.5 | — | 150.6 | ||||||||||||||
Long-term debt | 597.9 | 1.7 | — | — | 599.6 | ||||||||||||||
Deferred income taxes | 139.2 | — | 0.2 | — | 139.4 | ||||||||||||||
Other noncurrent liabilities | 70.8 | 7.6 | 1.9 | — | 80.3 | ||||||||||||||
Intercompany accounts | (882.7 | ) | 855.7 | 27.0 | — | — | |||||||||||||
Total liabilities | (45.5 | ) | 975.8 | 39.6 | — | 969.9 | |||||||||||||
Stockholders' equity | 260.5 | 110.5 | 38.9 | (149.4 | ) | 260.5 | |||||||||||||
Total liabilities and stockholders' equity | $ | 215.0 | $ | 1,086.3 | $ | 78.5 | $ | (149.4 | ) | $ | 1,230.4 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 53.3 | $ | (3.7 | ) | $ | 33.4 | $ | — | $ | 83.0 | ||||||||
Receivables, net | — | 146.9 | 19.2 | — | 166.1 | ||||||||||||||
Inventories | — | 169.3 | 13.9 | — | 183.2 | ||||||||||||||
Deferred income taxes | 18.5 | — | 1.1 | — | 19.6 | ||||||||||||||
Other current assets | 10.5 | 26.3 | 1.2 | — | 38.0 | ||||||||||||||
Total current assets | 82.3 | 338.8 | 68.8 | — | 489.9 | ||||||||||||||
Property, plant and equipment, net | 1.8 | 134.2 | 8.7 | — | 144.7 | ||||||||||||||
Identifiable intangible assets | — | 572.2 | 1.5 | — | 573.7 | ||||||||||||||
Other noncurrent assets | 30.5 | 0.7 | 1.4 | — | 32.6 | ||||||||||||||
Investment in subsidiaries | 27.2 | 37.9 | — | (65.1 | ) | — | |||||||||||||
Total assets | $ | 141.8 | $ | 1,083.8 | $ | 80.4 | $ | (65.1 | ) | $ | 1,240.9 | ||||||||
Liabilities and stockholders' equity: | |||||||||||||||||||
Current portion of long-term debt | $ | — | $ | 1.1 | $ | — | $ | — | $ | 1.1 | |||||||||
Accounts payable | 8.3 | 68.7 | 7.5 | — | 84.5 | ||||||||||||||
Other current liabilities | 29.9 | 49.0 | 3.9 | — | 82.8 | ||||||||||||||
Total current liabilities | 38.2 | 118.8 | 11.4 | — | 168.4 | ||||||||||||||
Long-term debt | 619.9 | 1.8 | — | — | 621.7 | ||||||||||||||
Deferred income taxes | 132.0 | — | 0.8 | — | 132.8 | ||||||||||||||
Other noncurrent liabilities | 77.2 | 7.6 | 2.0 | — | 86.8 | ||||||||||||||
Intercompany accounts | (956.7 | ) | 928.4 | 28.3 | — | — | |||||||||||||
Total liabilities | (89.4 | ) | 1,056.6 | 42.5 | — | 1,009.7 | |||||||||||||
Stockholders' equity | 231.2 | 27.2 | 37.9 | (65.1 | ) | 231.2 | |||||||||||||
Total liabilities and stockholders' equity | $ | 141.8 | $ | 1,083.8 | $ | 80.4 | $ | (65.1 | ) | $ | 1,240.9 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net sales | $ | — | $ | 263.6 | $ | 35.8 | $ | — | $ | 299.4 | |||||||||
Cost of sales | — | 181.0 | 28.4 | — | 209.4 | ||||||||||||||
Gross profit | — | 82.6 | 7.4 | — | 90.0 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 9.5 | 43.7 | 3.7 | — | 56.9 | ||||||||||||||
Restructuring | — | 0.2 | — | — | 0.2 | ||||||||||||||
Total operating expenses | 9.5 | 43.9 | 3.7 | — | 57.1 | ||||||||||||||
Operating income (loss) | (9.5 | ) | 38.7 | 3.7 | — | 32.9 | |||||||||||||
Interest expense, net | 12.7 | 0.1 | (0.1 | ) | — | 12.7 | |||||||||||||
Income (loss) before income taxes | (22.2 | ) | 38.6 | 3.8 | — | 20.2 | |||||||||||||
Income tax expense (benefit) | (4.1 | ) | 6.6 | 1.7 | — | 4.2 | |||||||||||||
Equity in income of subsidiaries | 34.1 | 2.1 | — | (36.2 | ) | — | |||||||||||||
Income from continuing operations | 16.0 | 34.1 | 2.1 | (36.2 | ) | 16.0 | |||||||||||||
Loss from discontinued operations, net of tax | (1.9 | ) | — | — | — | (1.9 | ) | ||||||||||||
Net income | $ | 14.1 | $ | 34.1 | $ | 2.1 | $ | (36.2 | ) | $ | 14.1 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net sales | $ | — | $ | 238.7 | $ | 37.2 | $ | — | $ | 275.9 | |||||||||
Cost of sales | — | 167.7 | 28.6 | — | 196.3 | ||||||||||||||
Gross profit | — | 71.0 | 8.6 | — | 79.6 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 8.1 | 40.9 | 4.2 | — | 53.2 | ||||||||||||||
Restructuring | — | 0.6 | 0.1 | — | 0.7 | ||||||||||||||
Total operating expenses | 8.1 | 41.5 | 4.3 | — | 53.9 | ||||||||||||||
Operating income (loss) | (8.1 | ) | 29.5 | 4.3 | — | 25.7 | |||||||||||||
Interest expense, net | 14.8 | 0.1 | — | — | 14.9 | ||||||||||||||
Loss on early extinguishment of debt | 1.5 | — | — | — | 1.5 | ||||||||||||||
Income (loss) before income taxes | (24.4 | ) | 29.4 | 4.3 | — | 9.3 | |||||||||||||
Income tax expense (benefit) | (9.0 | ) | 10.7 | 1.7 | — | 3.4 | |||||||||||||
Equity in income of subsidiaries | 21.3 | 2.6 | — | (23.9 | ) | — | |||||||||||||
Income from continuing operations | 5.9 | 21.3 | 2.6 | (23.9 | ) | 5.9 | |||||||||||||
Income from discontinued operations, net of tax | 3.9 | — | — | — | 3.9 | ||||||||||||||
Net income | $ | 9.8 | $ | 21.3 | $ | 2.6 | $ | (23.9 | ) | $ | 9.8 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net sales | $ | — | $ | 743.4 | $ | 84.2 | $ | — | $ | 827.6 | |||||||||
Cost of sales | — | 534.2 | 69.0 | — | 603.2 | ||||||||||||||
Gross profit | — | 209.2 | 15.2 | — | 224.4 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 24.6 | 124.5 | 9.9 | — | 159.0 | ||||||||||||||
Restructuring | — | 1.3 | — | — | 1.3 | ||||||||||||||
Total operating expenses | 24.6 | 125.8 | 9.9 | — | 160.3 | ||||||||||||||
Operating income (loss) | (24.6 | ) | 83.4 | 5.3 | — | 64.1 | |||||||||||||
Interest expense, net | 39.0 | 0.2 | (0.2 | ) | — | 39.0 | |||||||||||||
Loss on early extinguishment of debt | 1.4 | — | — | — | 1.4 | ||||||||||||||
Income (loss) before income taxes | (65.0 | ) | 83.2 | 5.5 | — | 23.7 | |||||||||||||
Income tax expense (benefit) | (14.5 | ) | 17.8 | 1.8 | — | 5.1 | |||||||||||||
Equity in income of subsidiaries | 69.1 | 3.7 | — | (72.8 | ) | — | |||||||||||||
Income from continuing operations | 18.6 | 69.1 | 3.7 | (72.8 | ) | 18.6 | |||||||||||||
Income from discontinued operations, net of tax | 8.7 | — | — | — | 8.7 | ||||||||||||||
Net income | $ | 27.3 | $ | 69.1 | $ | 3.7 | $ | (72.8 | ) | $ | 27.3 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net sales | $ | — | $ | 660.8 | $ | 82.0 | $ | — | $ | 742.8 | |||||||||
Cost of sales | — | 483.1 | 65.2 | — | 548.3 | ||||||||||||||
Gross profit | — | 177.7 | 16.8 | — | 194.5 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 21.8 | 117.7 | 10.8 | — | 150.3 | ||||||||||||||
Restructuring | (0.1 | ) | 2.0 | 0.1 | — | 2.0 | |||||||||||||
Total operating expenses | 21.7 | 119.7 | 10.9 | — | 152.3 | ||||||||||||||
Operating income (loss) | (21.7 | ) | 58.0 | 5.9 | — | 42.2 | |||||||||||||
Interest expense, net | 46.1 | 0.2 | (0.2 | ) | — | 46.1 | |||||||||||||
Loss on early extinguishment of debt | 1.5 | — | — | — | 1.5 | ||||||||||||||
Income (loss) before income taxes | (69.3 | ) | 57.8 | 6.1 | — | (5.4 | ) | ||||||||||||
Income tax expense (benefit) | (17.2 | ) | 19.3 | 2.0 | — | 4.1 | |||||||||||||
Equity in income of subsidiaries | 42.6 | 4.1 | — | (46.7 | ) | — | |||||||||||||
Income (loss) from continuing operations | (9.5 | ) | 42.6 | 4.1 | (46.7 | ) | (9.5 | ) | |||||||||||
Loss from discontinued operations, net of tax | (102.4 | ) | — | — | — | (102.4 | ) | ||||||||||||
Net income (loss) | $ | (111.9 | ) | $ | 42.6 | $ | 4.1 | $ | (46.7 | ) | $ | (111.9 | ) |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net income | $ | 14.1 | $ | 34.1 | $ | 2.1 | $ | (36.2 | ) | $ | 14.1 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Equity in other comprehensive loss of subsidiaries | (1.9 | ) | (1.9 | ) | — | 3.8 | — | ||||||||||||
Foreign currency translation | — | — | (1.9 | ) | — | (1.9 | ) | ||||||||||||
Minimum pension liability, net of tax | 2.3 | — | — | — | 2.3 | ||||||||||||||
0.4 | (1.9 | ) | (1.9 | ) | 3.8 | 0.4 | |||||||||||||
Comprehensive income | $ | 14.5 | $ | 32.2 | $ | 0.2 | $ | (32.4 | ) | $ | 14.5 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net income | $ | 9.8 | $ | 21.3 | $ | 2.6 | $ | (23.9 | ) | $ | 9.8 | ||||||||
Other comprehensive loss: | |||||||||||||||||||
Equity in other comprehensive loss of subsidiaries | (1.6 | ) | (1.6 | ) | — | 3.2 | — | ||||||||||||
Natural gas hedges, net of tax | 0.2 | — | — | — | 0.2 | ||||||||||||||
Interest rate swap contracts, net of tax | 0.8 | — | — | — | 0.8 | ||||||||||||||
Foreign currency translation | — | — | (1.6 | ) | — | (1.6 | ) | ||||||||||||
Minimum pension liability, net of tax | (0.8 | ) | — | — | — | (0.8 | ) | ||||||||||||
(1.4 | ) | (1.6 | ) | (1.6 | ) | 3.2 | (1.4 | ) | |||||||||||
Comprehensive income | $ | 8.4 | $ | 19.7 | $ | 1.0 | $ | (20.7 | ) | $ | 8.4 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net income | $ | 27.3 | $ | 69.1 | $ | 3.7 | $ | (72.8 | ) | $ | 27.3 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Equity in other comprehensive loss of subsidiaries | (3.7 | ) | (3.7 | ) | — | 7.4 | — | ||||||||||||
Foreign currency translation | — | — | (3.7 | ) | — | (3.7 | ) | ||||||||||||
Minimum pension liability, net of tax | 7.9 | — | — | — | 7.9 | ||||||||||||||
4.2 | (3.7 | ) | (3.7 | ) | 7.4 | 4.2 | |||||||||||||
Comprehensive income | $ | 31.5 | $ | 65.4 | $ | — | $ | (65.4 | ) | $ | 31.5 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Net income (loss) | $ | (111.9 | ) | $ | 42.6 | $ | 4.1 | $ | (46.7 | ) | $ | (111.9 | ) | ||||||
Other comprehensive income: | |||||||||||||||||||
Equity in other comprehensive income of subsidiaries | 0.4 | 0.4 | — | (0.8 | ) | — | |||||||||||||
Interest rate swap contracts, net of tax | 2.6 | — | — | — | 2.6 | ||||||||||||||
Foreign currency translation | — | — | 0.4 | — | 0.4 | ||||||||||||||
Minimum pension liability, net of tax | 0.1 | — | — | — | 0.1 | ||||||||||||||
3.1 | 0.4 | 0.4 | (0.8 | ) | 3.1 | ||||||||||||||
Comprehensive income (loss) | $ | (108.8 | ) | $ | 43.0 | $ | 4.5 | $ | (47.5 | ) | $ | (108.8 | ) |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Operating activities: | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 16.3 | $ | 21.8 | $ | 4.7 | $ | — | $ | 42.8 | |||||||||
Investing activities: | |||||||||||||||||||
Capital expenditures | (0.1 | ) | (22.0 | ) | (0.9 | ) | — | (23.0 | ) | ||||||||||
Acquisitions, net of cash acquired | — | (1.1 | ) | — | — | (1.1 | ) | ||||||||||||
Proceeds from sales of assets | — | 0.1 | — | — | 0.1 | ||||||||||||||
Net cash used in investing activities from continuing operations | (0.1 | ) | (23.0 | ) | (0.9 | ) | — | (24.0 | ) | ||||||||||
Financing activities: | |||||||||||||||||||
Early repayment of debt | (23.2 | ) | — | — | — | (23.2 | ) | ||||||||||||
Dividends paid | (8.3 | ) | — | — | — | (8.3 | ) | ||||||||||||
Common stock issued | 2.3 | — | — | — | 2.3 | ||||||||||||||
Shares retained for employee taxes | (1.5 | ) | — | — | — | (1.5 | ) | ||||||||||||
Payment of deferred financing fees | (0.7 | ) | — | — | — | (0.7 | ) | ||||||||||||
Other | — | 0.2 | — | — | 0.2 | ||||||||||||||
Net cash provided by (used in) financing activities from continuing operations | (31.4 | ) | 0.2 | — | — | (31.2 | ) | ||||||||||||
Net cash flows from discontinued operations: | |||||||||||||||||||
Operating activities | (4.1 | ) | — | — | — | (4.1 | ) | ||||||||||||
Investing activities | 4.5 | — | — | — | 4.5 | ||||||||||||||
Net cash provided by discontinued operations | 0.4 | — | — | — | 0.4 | ||||||||||||||
Effect of currency exchange rate changes on cash | — | — | (1.8 | ) | — | (1.8 | ) | ||||||||||||
Net change in cash and cash equivalents | (14.8 | ) | (1.0 | ) | 2.0 | — | (13.8 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 53.3 | (3.7 | ) | 33.4 | — | 83.0 | |||||||||||||
Cash and cash equivalents at end of period | $ | 38.5 | $ | (4.7 | ) | $ | 35.4 | $ | — | $ | 69.2 |
Issuer | Guarantor companies | Non- guarantor companies | Eliminations | Total | |||||||||||||||
(in millions) | |||||||||||||||||||
Operating activities: | |||||||||||||||||||
Net cash provided by (used in) operating activities from continuing operations | $ | 9.5 | $ | 16.0 | $ | (1.0 | ) | $ | — | $ | 24.5 | ||||||||
Investing activities: | |||||||||||||||||||
Capital expenditures | (0.5 | ) | (18.5 | ) | (0.5 | ) | — | (19.5 | ) | ||||||||||
Acquisitions, net of cash acquired | — | 0.5 | — | — | 0.5 | ||||||||||||||
Proceeds from sales of assets | — | 0.4 | — | — | 0.4 | ||||||||||||||
Net cash used in investing activities from continuing operations | (0.5 | ) | (17.6 | ) | (0.5 | ) | — | (18.6 | ) | ||||||||||
Financing activities: | |||||||||||||||||||
Debt paid | (34.0 | ) | — | — | — | (34.0 | ) | ||||||||||||
Early repayment of debt | (23.2 | ) | — | — | — | (23.2 | ) | ||||||||||||
Dividends paid | (8.2 | ) | — | — | — | (8.2 | ) | ||||||||||||
Common stock issued | 0.7 | — | — | — | 0.7 | ||||||||||||||
Shares retained for employee taxes | (0.4 | ) | — | — | — | (0.4 | ) | ||||||||||||
Other | — | 0.7 | — | — | 0.7 | ||||||||||||||
Net cash provided by (used in) financing activities from continuing operations | (65.1 | ) | 0.7 | — | — | (64.4 | ) | ||||||||||||
Net cash flows from discontinued operations: | |||||||||||||||||||
Operating activities | (36.6 | ) | — | — | — | (36.6 | ) | ||||||||||||
Investing activities | 87.4 | — | — | — | 87.4 | ||||||||||||||
Net cash used in discontinued operations | 50.8 | — | — | — | 50.8 | ||||||||||||||
Effect of currency exchange rate changes on cash | — | — | 0.4 | — | 0.4 | ||||||||||||||
Net change in cash and cash equivalents | (5.3 | ) | (0.9 | ) | (1.1 | ) | — | (7.3 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 36.2 | (3.8 | ) | 28.6 | — | 61.0 | |||||||||||||
Cash and cash equivalents at end of period | $ | 30.9 | $ | (4.7 | ) | $ | 27.5 | $ | — | $ | 53.7 |
Item 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
2013 | |||||||||||||||
Mueller Co. | Anvil | Corporate | Total | ||||||||||||
(in millions) | |||||||||||||||
Net sales | $ | 199.3 | $ | 100.1 | $ | — | $ | 299.4 | |||||||
Gross profit | $ | 59.4 | $ | 30.6 | $ | — | $ | 90.0 | |||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 29.0 | 18.3 | 9.6 | 56.9 | |||||||||||
Restructuring | 0.2 | — | — | 0.2 | |||||||||||
Total operating expenses | 29.2 | 18.3 | 9.6 | 57.1 | |||||||||||
Operating income (loss) | $ | 30.2 | $ | 12.3 | $ | (9.6 | ) | 32.9 | |||||||
Interest expense, net | 12.7 | ||||||||||||||
Income before income taxes | 20.2 | ||||||||||||||
Income tax expense | 4.2 | ||||||||||||||
Income from continuing operations | 16.0 | ||||||||||||||
Loss from discontinued operations, net of tax | (1.9 | ) | |||||||||||||
Net income | $ | 14.1 | |||||||||||||
2012 | |||||||||||||||
Mueller Co. | Anvil | Corporate | Total | ||||||||||||
(in millions) | |||||||||||||||
Net sales | $ | 182.6 | $ | 93.3 | $ | — | $ | 275.9 | |||||||
Gross profit | $ | 51.6 | $ | 28.0 | $ | — | $ | 79.6 | |||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 27.0 | 18.1 | 8.1 | 53.2 | |||||||||||
Restructuring | 0.7 | — | — | 0.7 | |||||||||||
Total operating expenses | 27.7 | 18.1 | 8.1 | 53.9 | |||||||||||
Operating income (loss) | $ | 23.9 | $ | 9.9 | $ | (8.1 | ) | 25.7 | |||||||
Interest expense, net | 14.9 | ||||||||||||||
Loss on early extinguishment of debt | 1.5 | ||||||||||||||
Income before income taxes | 9.3 | ||||||||||||||
Income tax expense | 3.4 | ||||||||||||||
Loss from continuing operations | 5.9 | ||||||||||||||
Loss from discontinued operations, net of tax | 3.9 | ||||||||||||||
Net income | $ | 9.8 |
Three months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(in millions) | |||||||
7.375% Senior Subordinated Notes | $ | 7.7 | $ | 7.7 | |||
8.75% Senior Unsecured Notes | 4.0 | 4.8 | |||||
Deferred financing fees amortization | 0.5 | 0.6 | |||||
ABL Agreement | 0.3 | 0.1 | |||||
Interest rate swap contracts | — | 1.3 | |||||
Other interest expense | 0.2 | 0.4 | |||||
$ | 12.7 | $ | 14.9 |
Three months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(in millions) | |||||||
Expense from pre-tax operating income | $ | 8.1 | $ | 3.8 | |||
Deferred tax asset valuation allowance adjustment | (4.0 | ) | — | ||||
Other discrete items | 0.1 | (0.4 | ) | ||||
$ | 4.2 | $ | 3.4 |
2013 | |||||||||||||||
Mueller Co. | Anvil | Corporate | Total | ||||||||||||
(in millions) | |||||||||||||||
Net sales | $ | 538.5 | $ | 289.1 | $ | — | $ | 827.6 | |||||||
Gross profit | $ | 142.8 | $ | 81.6 | $ | — | $ | 224.4 | |||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 80.1 | 54.2 | 24.7 | 159.0 | |||||||||||
Restructuring | 1.2 | 0.1 | — | 1.3 | |||||||||||
Total operating expenses | 81.3 | 54.3 | 24.7 | 160.3 | |||||||||||
Operating income (loss) | $ | 61.5 | $ | 27.3 | $ | (24.7 | ) | 64.1 | |||||||
Interest expense, net | 39.0 | ||||||||||||||
Loss on early extinguishment of debt | 1.4 | ||||||||||||||
Income before income taxes | 23.7 | ||||||||||||||
Income tax expense | 5.1 | ||||||||||||||
Income from continuing operations | 18.6 | ||||||||||||||
Income from discontinued operations, net of tax | 8.7 | ||||||||||||||
Net income | $ | 27.3 | |||||||||||||
2012 | |||||||||||||||
Mueller Co. | Anvil | Corporate | Total | ||||||||||||
(in millions) | |||||||||||||||
Net sales | $ | 465.2 | $ | 277.6 | $ | — | $ | 742.8 | |||||||
Gross profit | $ | 113.7 | $ | 80.8 | $ | — | $ | 194.5 | |||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 75.0 | 53.1 | 22.2 | 150.3 | |||||||||||
Restructuring | 1.9 | 0.2 | (0.1 | ) | 2.0 | ||||||||||
Total operating expenses | 76.9 | 53.3 | 22.1 | 152.3 | |||||||||||
Operating income (loss) | $ | 36.8 | $ | 27.5 | $ | (22.1 | ) | 42.2 | |||||||
Interest expense, net | 46.1 | ||||||||||||||
Loss on early extinguishment of debt | 1.5 | ||||||||||||||
Loss before income taxes | (5.4 | ) | |||||||||||||
Income tax expense | 4.1 | ||||||||||||||
Loss from continuing operations | (9.5 | ) | |||||||||||||
Loss from discontinued operations, net of tax | (102.4 | ) | |||||||||||||
Net loss | $ | (111.9 | ) |
Nine months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(in millions) | |||||||
7.375% Senior Subordinated Notes | $ | 23.2 | $ | 23.2 | |||
8.75% Senior Unsecured Notes | 12.8 | 14.8 | |||||
Deferred financing fees amortization | 1.6 | 1.8 | |||||
ABL Agreement | 1.2 | 1.0 | |||||
Interest rate swap contracts | — | 4.3 | |||||
Other interest expense | 0.4 | 1.2 | |||||
39.2 | 46.3 | ||||||
Interest income | (0.2 | ) | (0.2 | ) | |||
$ | 39.0 | $ | 46.1 |
Nine months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(in millions) | |||||||
Expense (benefit) from pre-tax operating income (loss) | $ | 9.6 | $ | (2.4 | ) | ||
Deferred tax asset valuation allowance adjustment | (4.5 | ) | 5.9 | ||||
Other discrete items | — | 0.6 | |||||
$ | 5.1 | $ | 4.1 |
Nine months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(in millions) | |||||||
Collections from customers | $ | 825.3 | $ | 733.3 | |||
Disbursements other than interest and income taxes | (740.9 | ) | (672.2 | ) | |||
Interest payments, net | (40.9 | ) | (43.8 | ) | |||
Income tax refunds (payments), net | (0.7 | ) | 7.2 | ||||
$ | 42.8 | $ | 24.5 |
• | limitations on other debt, liens, investments and guarantees; |
• | restrictions on dividends and redemptions of our capital stock and prepayments and redemptions of debt; and |
• | restrictions on mergers and acquisition, sales of assets and transactions with affiliates. |
Moody’s | Standard & Poor's | ||||||
June 30, | September 30, | June 30, | September 30, | ||||
2013 | 2012 | 2013 | 2012 | ||||
Corporate credit rating | B3 | B3 | BB- | B | |||
ABL Agreement | Not rated | Not rated | Not rated | Not rated | |||
8.75% Senior Unsecured Notes | B2 | B2 | BB- | B+ | |||
7.375% Senior Subordinated Notes | Caa2 | Caa2 | B | CCC+ | |||
Outlook | Positive | Positive | Stable | Stable |
Item 4. | CONTROLS AND PROCEDURES |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total number of shares purchased(1) | Average price paid per share | Total number of shares purchased as part of publically announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | |||||||||
April 1-30, 2013 | 129 | $ | 5.74 | — | — | ||||||||
May 1-31, 2013 | 2,495 | 7.40 | — | — | |||||||||
June 1-30, 2013 | — | — | — | — | |||||||||
Total | 2,624 | $ | 7.32 | — | — |
Item 6. | EXHIBITS |
Exhibit No. | Document | |
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | The following financial information from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (Extensible Business Reporting Language), (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Other Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements. |
MUELLER WATER PRODUCTS, INC. | |||
Date: | August 7, 2013 | By: | /s/ Evan L. Hart |
Evan L. Hart | |||
Chief Financial Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Mueller Water Products, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Gregory E. Hyland |
Gregory E. Hyland |
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Mueller Water Products, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Evan L. Hart |
Evan L. Hart, |
Senior Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Mueller Water Products, Inc.. |
/s/ Gregory E. Hyland |
Gregory E. Hyland, |
Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Mueller Water Products, Inc. |
/s/ Evan L. Hart |
Evan L. Hart, |
Senior Vice President and Chief Financial Officer |
Changes in Accumulated Other Comprehensive Loss by Component (Notes)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Statement of Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss by Component | Changes in Accumulated Other Comprehensive Loss by Component The components of the changes in accumulated other comprehensive loss are presented below.
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Condensed Consolidated Statements Of Operations (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Income Statement [Abstract] | ||||
Net sales | $ 299.4 | $ 275.9 | $ 827.6 | $ 742.8 |
Cost of sales | 209.4 | 196.3 | 603.2 | 548.3 |
Gross profit | 90.0 | 79.6 | 224.4 | 194.5 |
Operating expenses: | ||||
Selling, general and administrative | 56.9 | 53.2 | 159.0 | 150.3 |
Restructuring | 0.2 | 0.7 | 1.3 | 2.0 |
Total operating expenses | 57.1 | 53.9 | 160.3 | 152.3 |
Operating income | 32.9 | 25.7 | 64.1 | 42.2 |
Interest expense, net | 12.7 | 14.9 | 39.0 | 46.1 |
Loss on early extinguishment of debt | 0 | 1.5 | 1.4 | 1.5 |
Income (loss) before income taxes | 20.2 | 9.3 | 23.7 | (5.4) |
Income tax expense | 4.2 | 3.4 | 5.1 | 4.1 |
Income (loss) from continuing operations | 16.0 | 5.9 | 18.6 | (9.5) |
Income (loss) from discontinued operations, net of tax | (1.9) | 3.9 | 8.7 | (102.4) |
Net income (loss) | $ 14.1 | $ 9.8 | $ 27.3 | $ (111.9) |
Net income (loss) per basic share: | ||||
Continuing operations (usd per share) | $ 0.10 | $ 0.04 | $ 0.12 | $ (0.06) |
Discontinued operations (usd per share) | $ (0.01) | $ 0.02 | $ 0.05 | $ (0.66) |
Net income (loss) (usd per share) | $ 0.09 | $ 0.06 | $ 0.17 | $ (0.72) |
Continuing operations (usd per share) | $ 0.10 | $ 0.04 | $ 0.12 | $ (0.06) |
Discontinued operations (usd per share) | $ (0.01) | $ 0.02 | $ 0.05 | $ (0.66) |
Net income (loss) (usd per share) | $ 0.09 | $ 0.06 | $ 0.17 | $ (0.72) |
Weighted average shares outstanding: | ||||
Basic (shares) | 158.0 | 156.7 | 157.6 | 156.4 |
Diluted (shares) | 160.7 | 158.0 | 160.0 | 156.4 |
Dividends declared per share (usd per share) | $ 0.0175 | $ 0.0175 | $ 0.0525 | $ 0.0525 |
Income Taxes
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Income Tax Expense (Benefit) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes After including the tax effect of the loss on the sale of U.S. Pipe, our U.S. deferred tax liabilities are insufficient to fully support our U.S. deferred tax assets, which include net operating loss carryforwards. Accordingly, we initially recorded income tax expense to establish valuation allowances related to our overall deferred tax assets during the quarter ended June 30, 2012. We reevaluate the need for a valuation allowance against the U.S. deferred tax assets each quarter, considering results to date, projections of taxable income, tax planning strategies and reversing taxable temporary differences. During the nine months ended June 30, 2013, we decreased our U.S. deferred tax valuation allowance by $15.1 million, including $7.1 million included in other comprehensive income and $3.5 million in discontinued operations. Notwithstanding the valuation allowance, our net operating loss carryforwards remain available to offset future taxable earnings. The components of income tax expense on continuing operations are provided below.
We did not allocate any income tax expense to discontinued operations in the three or nine months ended June 30, 2013. We allocated $4.3 million and $26.4 million of income tax benefit to discontinued operations in the three and nine months ended June 30, 2012, respectively. For the three months ended June 30, 2012, the allocation consisted of benefits from operations of $0.1 million and valuation allowance-related benefits of $4.2 million. For the nine months ended June 30, 2012, the allocation consisted of a benefit from operations of $50.7 million offset by valuation allowance-related expenses of $24.3 million. At June 30, 2013 and September 30, 2012, the gross liabilities for unrecognized income tax benefits were $3.2 million and $4.3 million, respectively. We recognize interest related to uncertain income tax positions as interest expense and would recognize any penalties that may be incurred as selling, general and administrative expense. At June 30, 2013 and September 30, 2012, we had $0.8 million and $0.9 million, respectively, of accrued interest liabilities related to uncertain tax positions. Generally, our state income tax returns are closed for years prior to 2006, except to the extent of our state net operating loss carryforwards, and our Canadian income tax returns are closed for years prior to 2006. During 2012, we concluded an audit by the IRS for the years 2007 through 2010 with no adverse changes. We are also under audit by several states at various levels of completion. We do not have any material unpaid assessments. |
Retirement Plans (Tables)
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Jun. 30, 2013
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic benefit cost allocated to continuing operations for defined benefit pension plans are as follows.
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Commitments and Contingencies
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9 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are involved in various legal proceedings that have arisen in the normal course of operations, including the proceedings summarized below. The effect of the outcome of these matters on our financial statements cannot be predicted with certainty as any such effect depends on the amount and timing of the resolution of such matters. Other than the litigation described below, we do not believe that any of our outstanding litigation would have a material adverse effect on our business or prospects. Environmental. We are subject to a wide variety of laws and regulations concerning the protection of the environment, both with respect to the operations at many of our properties and with respect to remediating environmental conditions that may exist at our own or other properties. We strive to comply with federal, state and local environmental laws and regulations. We accrue for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and reasonably estimable. In the acquisition agreement pursuant to which a predecessor to Tyco sold our Mueller Co. and Anvil businesses to the prior owners of these businesses in August 1999, Tyco agreed to indemnify us and our affiliates, among other things, for all “Excluded Liabilities.” Excluded Liabilities include, among other things, substantially all liabilities relating to the time prior to August 1999, including environmental liabilities. The indemnity survives indefinitely. Tyco's indemnity does not cover liabilities to the extent caused by us or the operation of our businesses after August 1999, nor does it cover liabilities arising with respect to businesses or sites acquired after August 1999. Since 2007, Tyco has engaged in multiple corporate restructurings, split-offs and divestitures. While none of these transactions directly affects the indemnification obligations of the Tyco indemnitors under the 1999 acquisition agreement, the result of such transactions is that the assets of, and control over, such Tyco indemnitors has changed. Should any of these Tyco indemnitors become financially unable or fail to comply with the terms of the indemnity, we may be responsible for such obligations or liabilities. In September 1987, we implemented an Administrative Consent Order (“ACO”) for our Burlington, New Jersey property, which was required under the New Jersey Environmental Cleanup Responsibility Act (now known as the Industrial Site Recovery Act). The ACO required soil and ground-water cleanup, and we completed, and received final approval on, the soil cleanup required by the ACO. We retained this property related to the sale of our former U.S. Pipe segment. We expect ground-water issues as well as issues associated with the demolition of former manufacturing facilities at this site will continue and remediation by us could be required. Long-term ground-water monitoring may also be required, but we do not know how long such monitoring would be required and do not believe monitoring or further remediation costs, if any, will have a material adverse effect on any of our financial statements. On July 13, 2010, Rohcan Investments Limited, the former owner of property leased by Mueller Canada Ltd. and located in Milton, Ontario, filed suit against Mueller Canada Ltd. and its directors seeking C$10.0 million in damages arising from the defendants' alleged environmental contamination of the property and breach of lease. Mueller Canada Ltd. leased the property from 1988 through 2008. We are pursuing indemnification from a former owner for certain potential liabilities that are alleged in this lawsuit, and we have accrued for other liabilities not covered by indemnification. On December 7, 2011, the Court denied the plaintiff's motion for summary judgment. Walter Energy-related Income Taxes. Each member of a consolidated group for federal income tax purposes is severally liable for the federal income tax liability of each other member of the consolidated group for any year in which it is a member of the group at any time during such year. Each member of the Walter Energy consolidated group, which included us through December 14, 2006, is also jointly and severally liable for pension and benefit funding and termination liabilities of other group members, as well as certain benefit plan taxes. Accordingly, we could be liable under such provisions in the event any such liability is incurred, and not discharged, by any other member of the Walter Energy consolidated group for any period during which we were included in the Walter Energy consolidated group. A dispute exists with regard to federal income taxes for 1980 through 1994 allegedly owed by the Walter Energy consolidated group. According to Walter Energy's last available public filing on the matter, Walter Energy's management estimated that the amount of tax claimed by the IRS was approximately $34.0 million for issues currently in dispute in bankruptcy court for matters unrelated to us. This amount is subject to interest and penalties. Of the $34.0 million in claimed tax, $21.0 million represents issues in which the IRS is not challenging the deductibility of the particular expense but only whether such expense is deductible in a particular year. Walter Energy's management believes that Walter Energy's financial exposure should be limited to interest and possible penalties and the amount of any tax claimed will be offset by favorable adjustments in other years. In addition, the IRS previously issued a Notice of Proposed Deficiency assessing additional tax of $82.2 million for the fiscal years ended May 31, 2000 through December 31, 2005. Walter Energy filed a formal protest with the IRS, but had not reached a final resolution with the Appeals Division at June 30, 2013. The unresolved issues relate primarily to Walter Energy's method of recognizing revenue on the sale of homes and related interest on the installment notes receivable. The items at issue relate primarily to the timing of revenue recognition and consequently, should the IRS prevail on its positions, Walter Energy's financial exposure should be limited to interest and penalties. As a matter of law, we are jointly and severally liable for any final tax determination for any year in which any of our subsidiaries were members of the Walter Energy consolidated group, which means that we would be liable in the event Walter Energy is unable to pay any amounts owed. Walter Energy has disclosed that it believes its filing positions have substantial merit and that it intends to defend vigorously any claims asserted. Walter Energy effectively controlled all of our tax decisions for periods during which we were a member of the Walter Energy consolidated group for federal income tax purposes and certain combined, consolidated or unitary state and local income tax groups. Under the terms of the income tax allocation agreement between us and Walter Energy dated May 26, 2006, we generally compute our tax liability on a stand-alone basis, but Walter Energy has sole authority to respond to and conduct all tax proceedings (including tax audits) relating to our federal income and combined state returns, to file all such returns on our behalf and to determine the amount of our liability to (or entitlement to payment from) Walter Energy for such previous periods. This arrangement may result in conflicts between Walter Energy and us. Our separation from Walter Energy on December 14, 2006 was intended to qualify as a tax-free spin-off under Section 355 of the Internal Revenue Code. In addition, the tax allocation agreement provides that if the spin-off is determined not to be tax-free pursuant to Section 355, we generally will be responsible for any taxes incurred by Walter Energy or its shareholders if such taxes result from certain of our actions or omissions and for a percentage of any such taxes that are not a result of our actions or omissions or Walter Energy's actions or omissions or taxes based upon our market value relative to Walter Energy's market value. Additionally, to the extent that Walter Energy was unable to pay taxes, if any, attributable to the spin-off and for which it is responsible under the tax allocation agreement, we could be liable for those taxes as a result of being a member of the Walter Energy consolidated group for the year in which the spin-off occurred. In accordance with the income tax allocation agreement, Walter Energy used certain tax assets of one of our predecessors in its calendar 2006 tax return for which payment to us is required. The income tax allocation agreement only requires Walter Energy to make the payment upon realization of the tax benefit by receiving a refund or otherwise offsetting taxes due. Walter Energy currently owes us $11.6 million, which includes recent tax audit and amended tax return adjustments, that is payable pending completion of an IRS audit of Walter Energy's 2006 tax year and the related refund of tax from that year. This receivable is included in other current assets at June 30, 2013. Indemnifications. We are a party to contracts in which it is common for us to agree to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by gross negligence or willful misconduct. We cannot estimate the potential amount of future payments under these indemnities until events arise that would trigger a liability under the indemnities. Additionally, in connection with the sale of assets and the divestiture of businesses, such as the divestiture of our U.S. Pipe segment, we may agree to indemnify buyers and related parties for certain losses or liabilities incurred by these parties with respect to: (i) the representations and warranties made by us to these parties in connection with the sale and (ii) liabilities related to the pre-closing operations of the assets or business sold. Indemnities related to pre-closing operations generally include certain environmental and tax liabilities and other liabilities not assumed by these parties in the transaction. Indemnities related to the pre-closing operations of sold assets or businesses normally do not represent additional liabilities to us, but simply serve to protect these parties from potential liability associated with our obligations existing at the time of the sale. As with any liability, we have accrued for those pre-closing obligations that are considered probable and reasonably estimable. Should circumstances change, increasing the likelihood of payments related to a specific indemnity, we will accrue a liability when future payment is probable and the amount is reasonably estimable. Other Matters. We are party to a number of other lawsuits arising in the ordinary course of business, including product liability cases for products manufactured by us or third parties. We provide for costs relating to these matters when a loss is probable and the amount is reasonably estimable. Administrative costs related to these matters are expensed as incurred. The effect of the outcome of these matters on our future financial statements cannot be predicted with certainty as any such effect depends on the amount and timing of the resolution of such matters. While the results of litigation cannot be predicted with certainty, we believe that the final outcome of such other litigation is not likely to have a materially adverse effect on our business or prospects. |
Stock-based Compensation Plans (Schedule of Share-based Payment Award, by Share-based Payment Award) (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
9 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||
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Jun. 30, 2013
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Jun. 30, 2013
Restricted stock units
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Mar. 31, 2013
Restricted stock units
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Dec. 31, 2012
Restricted stock units
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Jun. 30, 2013
Employee stock purchase plan instruments
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Mar. 31, 2013
Employee stock purchase plan instruments
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Dec. 31, 2012
Employee stock purchase plan instruments
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Dec. 31, 2012
Phantom Plan awards
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Dec. 31, 2012
Cash-settled performance shares
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Jun. 30, 2013
Cash-settled performance shares
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Dec. 31, 2012
Stock-settled performance shares
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Jun. 30, 2013
Non-qualified stock options
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Mar. 31, 2013
Non-qualified stock options
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Jun. 30, 2012
Non-qualified stock options
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Outstanding Phantom Plan awards | $ 6.91 | |||||||||||||
Number granted | 0 | 102,680 | 406,658 | 63,757 | 69,221 | 87,390 | 382,605 | 243,992 | 406,658 | 125,780 | 0 | |||
Weighted average grant date fair value per instrument | $ 0.00 | $ 5.97 | $ 5.22 | $ 1.20 | $ 1.38 | $ 1.28 | $ 5.22 | $ 5.22 | $ 5.22 | $ 0.00 | $ 3.23 | |||
Total grant date fair value (in millions) | $ 8.8 | $ 0 | $ 0.6 | $ 2.1 | $ 0.1 | $ 0.1 | $ 0.1 | $ 2.0 | $ 1.3 | $ 2.1 | $ 0 | $ 0.4 |
Segment Information (Tables)
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Jun. 30, 2013
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Segment Reporting, Measurement Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Summarized financial information for our segments is presented below.
|
Supplemental Balance Sheet Information (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Supplemental Balance Sheet Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Selected Supplemental Balance Sheet Information | Selected supplemental balance sheet information is presented below.
|
Borrowing Arrangements (Narrative) (Details) (USD $)
|
3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Aug. 14, 2013
ABL Agreement [Member]
|
Jun. 30, 2013
ABL Agreement [Member]
|
Jun. 30, 2013
ABL Agreement [Member]
LIBOR Plus Margin [Member]
|
Aug. 14, 2013
ABL Agreement [Member]
Maximum [Member]
|
Jun. 30, 2013
ABL Agreement [Member]
Maximum [Member]
LIBOR Plus Margin [Member]
|
Jun. 30, 2013
ABL Agreement [Member]
Maximum [Member]
Unspecified Base Rate Plus Margin [Member]
|
Aug. 14, 2013
ABL Agreement [Member]
Minimum [Member]
|
Jun. 30, 2013
ABL Agreement [Member]
Minimum [Member]
LIBOR Plus Margin [Member]
|
Jun. 30, 2013
ABL Agreement [Member]
Minimum [Member]
Unspecified Base Rate Plus Margin [Member]
|
Jun. 30, 2013
Swing Line Loans [Member]
|
Jun. 30, 2013
Letters Of Credit Outstanding [Member]
|
Jun. 30, 2013
8.75% Senior Unsecured Notes [Member]
|
Aug. 14, 2013
8.75% Senior Unsecured Notes [Member]
|
Sep. 30, 2012
8.75% Senior Unsecured Notes [Member]
|
Jun. 30, 2013
8.75% Senior Unsecured Notes [Member]
Redemption Prior To September 2013 [Member]
|
Jun. 30, 2013
7.375% Senior Subordinated Notes [Member]
|
Sep. 30, 2012
7.375% Senior Subordinated Notes [Member]
|
|
Revolving credit facility amount | $ 225,000,000 | $ 25,000,000 | $ 60,000,000 | ||||||||||||||||||
Reduction in variable rate margin | 1.00% | ||||||||||||||||||||
Potential increase in borrowing base availability | 150,000,000 | ||||||||||||||||||||
Margin on variable rate in addition to LIBOR | 2.00% | 2.25% | 1.25% | 1.75% | 0.75% | ||||||||||||||||
Agreement termination date | Dec. 18, 2017 | ||||||||||||||||||||
Agreement termination date, alternate | 60 days prior to the final maturity of our 7.375% Senior Subordinated Notes | ||||||||||||||||||||
Unused borrowing capacity fee, percent | 0.375% | 0.25% | |||||||||||||||||||
Maximum excess availability level at which financial maintenance covenants would apply | 22,500,000.0 | ||||||||||||||||||||
Maximum excess availability level at which financial maintenance covenants would apply, as a percentage of aggregate commitments | 10.00% | ||||||||||||||||||||
Outstanding letter of credit accrued fees and expense | 33,400,000 | ||||||||||||||||||||
Excess availability reduced by outstanding borrowings, outstanding letters of credit and accrued fees and expenses | 157,800,000 | ||||||||||||||||||||
Senior subordinated notes bear interest | 8.75% | 8.75% | 7.375% | 7.375% | |||||||||||||||||
Subordinated notes fair value | 196,700,000 | 426,300,000 | |||||||||||||||||||
Debt Instrument, Notice of Redemption | 22,500,000 | ||||||||||||||||||||
Redemption Price Applicable to Prepayments of Debt | 103.00% | 108.75% | 101.00% | ||||||||||||||||||
Loss on early extinguishment of debt | 0 | 1,500,000 | 1,400,000 | 1,500,000 | |||||||||||||||||
Redeemable debt by specified dates or upon specified events | $ 33,800,000 | ||||||||||||||||||||
Purchase price | 101.00% |
Segment Information (Schedule Of Selected Supplemental Balance Sheet Information) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Net sales, excluding intersegment sales | $ 299.4 | $ 275.9 | $ 827.6 | $ 742.8 |
Intersegment sales | 2.2 | 1.6 | 5.5 | 5.4 |
Operating income (loss) | 32.9 | 25.7 | 64.1 | 42.2 |
Depreciation and amortization | 14.6 | 15.0 | 44.4 | 45.2 |
Restructuring | 0.2 | 0.7 | 1.3 | 2.0 |
Capital expenditures | 8.7 | 7.4 | 23.0 | 19.5 |
Mueller Co. [Member]
|
||||
Net sales, excluding intersegment sales | 199.3 | 182.6 | 538.5 | 465.2 |
Intersegment sales | 2.2 | 1.5 | 5.4 | 5.3 |
Operating income (loss) | 30.2 | 23.9 | 61.5 | 36.8 |
Depreciation and amortization | 10.9 | 11.3 | 33.5 | 34.1 |
Restructuring | 0.2 | 0.7 | 1.2 | 1.9 |
Capital expenditures | 6.3 | 4.8 | 14.6 | 12.0 |
Anvil [Member]
|
||||
Net sales, excluding intersegment sales | 100.1 | 93.3 | 289.1 | 277.6 |
Intersegment sales | 0 | 0.1 | 0.1 | 0.1 |
Operating income (loss) | 12.3 | 9.9 | 27.3 | 27.5 |
Depreciation and amortization | 3.6 | 3.6 | 10.6 | 10.7 |
Restructuring | 0 | 0 | 0.1 | 0.2 |
Capital expenditures | 2.3 | 2.6 | 8.3 | 7.5 |
Corporate [Member]
|
||||
Operating income (loss) | (9.6) | (8.1) | (24.7) | (22.1) |
Depreciation and amortization | 0.1 | 0.1 | 0.3 | 0.4 |
Restructuring | 0 | 0 | 0 | (0.1) |
Capital expenditures | $ 0.1 | $ 0 | $ 0.1 | $ 0 |
Subsequent Events (Details) (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Subsequent Event [Line Items] | ||||
Dividends declared per share (usd per share) | $ 0.0175 | $ 0.0175 | $ 0.0525 | $ 0.0525 |
Subsequent Event [Member]
|
||||
Subsequent Event [Line Items] | ||||
Dividends declared per share (usd per share) | $ 0.0175 |
Stock-based Compensation Plans (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Plans | We granted stock-based compensation awards under the 2006 Stock Plan, Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan and Phantom Plan during the nine months ended June 30, 2013 as follows.
|
Condensed Consolidated Statement Of Stockholders' Equity (Unaudited) (USD $)
In Millions, unless otherwise specified |
Total
|
Common stock
|
Additional paid-in capital
|
Accumulated deficit
|
Accumulated Other Comprehensive Income (Loss) [Member]
|
---|---|---|---|---|---|
Beginning Balance at Sep. 30, 2012 | $ 231.2 | $ 1.6 | $ 1,587.3 | $ (1,270.0) | $ (87.7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 27.3 | 27.3 | |||
Dividends declared | (8.3) | (8.3) | |||
Stock-based compensation | 5.3 | 5.3 | |||
Shares retained for employee taxes | (1.5) | 0 | 2.3 | 0 | 0 |
Stock issued under stock compensation plans | 2.3 | 0 | (1.5) | 0 | 0 |
Foreign currency translation | (3.7) | (3.7) | |||
Minimum pension liability | 7.9 | 7.9 | |||
Ending Balance at Jun. 30, 2013 | $ 260.5 | $ 1.6 | $ 1,585.1 | $ (1,242.7) | $ (83.5) |
Organization
|
9 Months Ended |
---|---|
Jun. 30, 2013
|
|
Organization And Basis Of Presentation [Abstract] | |
Organization | Organization Mueller Water Products, Inc., a Delaware corporation, together with its consolidated subsidiaries, operates in two business segments: Mueller Co. and Anvil. Mueller Co. manufactures valves for water and gas systems, including butterfly, iron gate, tapping, check, plug and ball valves, as well as dry-barrel and wet-barrel fire hydrants and a broad range of metering, leak detection and pipe condition assessment products and services for the water infrastructure industry. Anvil manufactures and sources a broad range of products, including a variety of fittings, couplings, hangers and related products. The “Company,” “we,” “us” or “our” refer to Mueller Water Products, Inc. and its subsidiaries or their management. With regard to the Company's segments, “we,” “us” or “our” may also refer to the segment being discussed or its management. On April 1, 2012, we sold the businesses comprising our former U.S. Pipe segment to USP Holdings Inc., an affiliate of Wynnchurch Capital, Ltd. U.S. Pipe's results of operations have been reclassified as discontinued operations, and its assets and liabilities reclassified as held for sale, for all prior periods. Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses and the disclosure of contingent assets and liabilities for the reporting periods. Actual results could differ from those estimates. All significant intercompany balances and transactions have been eliminated. In our opinion, all normal and recurring adjustments that we consider necessary for a fair financial statement presentation have been made. Certain reclassifications may have been made to previously reported amounts to conform to the current presentation. The condensed consolidated balance sheet data at September 30, 2012 was derived from audited financial statements, but does not include all disclosures required by GAAP. Unless the context indicates otherwise, whenever we refer to a particular year, we mean the fiscal year ended or ending September 30 in that particular calendar year. |
Borrowing Arrangements
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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Long-term Debt and Capital Lease Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowing Arrangements | Borrowing Arrangements The components of long-term debt are presented below.
ABL Agreement. At June 30, 2013, our asset based lending agreement (the “ABL Agreement”) consisted of a revolving credit facility for up to $225 million of revolving credit borrowings, swing line loans and letters of credit. The ABL Agreement also permits us to increase the size of the credit facility by an additional $150 million in certain circumstances subject to adequate borrowing base availability. We may borrow up to $25 million through swing line loans and may have up to $60 million of letters of credit outstanding. Borrowings under the ABL Agreement bear interest at a floating rate equal to LIBOR plus a margin ranging from 175 to 225 basis points, or a base rate, as defined in the ABL Agreement, plus a margin ranging from 75 to 125 basis points. At June 30, 2013, the applicable LIBOR-based margin was 200 basis points. The ABL Agreement terminates on the earlier of (1) December 18, 2017 and (2) 60 days prior to the final maturity of our 7.375% Senior Subordinated Notes. We pay a commitment fee for any unused borrowing capacity under the ABL Agreement of either 0.375% per annum or 0.25% per annum, based on daily average availability during the previous calendar quarter. Our obligations under the ABL Agreement are secured by a first-priority perfected lien on all of our U.S. receivables and inventory, certain cash and other supporting obligations. Borrowings are not subject to any financial maintenance covenants unless excess availability is less than the greater of $22.5 million and 10% of the aggregate commitments under the ABL Agreement. Excess availability based on June 30, 2013 data, as reduced by outstanding letters of credit and accrued fees and expenses of $33.4 million, was $157.8 million. 8.75% Senior Unsecured Notes. The 8.75% Senior Unsecured Notes (the “Senior Unsecured Notes”) mature in September 2020 and bear interest at 8.75%, paid semi-annually. Based on quoted market prices, the outstanding Senior Unsecured Notes had a fair value of $196.7 million at June 30, 2013. During the quarters ended March 31, 2013 and June 30, 2012, we redeemed $22.5 million aggregate principal amount of the Senior Unsecured Notes at a redemption price of 103%, plus accrued and unpaid interest and recorded losses on early extinguishment of debt of $1.4 million and $1.5 million, respectively. We may also redeem up to $33.8 million of the Senior Unsecured Notes at a redemption price of 108.75%, plus accrued and unpaid interest, with the net cash proceeds from certain equity offerings prior to September 2013. After August 2015, we may redeem the Senior Unsecured Notes at specified redemption prices, plus accrued and unpaid interest. Upon a Change of Control (as defined in the indenture securing the Senior Unsecured Notes), we are required to offer to purchase the outstanding Senior Unsecured Notes at a purchase price of 101%, plus accrued and unpaid interest. The Senior Unsecured Notes are subordinate to borrowings under the ABL Agreement. The indenture securing the Senior Unsecured Notes contains customary covenants and events of default, including covenants that limit our ability to incur debt, pay dividends and make investments. Substantially all of our U.S. subsidiaries guarantee the Senior Unsecured Notes. We believe we were compliant with these covenants at June 30, 2013 and expect to remain in compliance through June 30, 2014. 7.375% Senior Subordinated Notes. The 7.375% Senior Subordinated Notes (the “Senior Subordinated Notes”) mature in June 2017 and bear interest at 7.375%, paid semi-annually. Based on quoted market prices, the outstanding Senior Subordinated Notes had a fair value of $426.3 million at June 30, 2013. We may redeem any portion of the Senior Subordinated Notes at specified redemption prices plus accrued and unpaid interest, subject to restrictions in the indenture securing the Senior Unsecured Notes. Upon a Change of Control (as defined in the indenture securing the Senior Subordinated Notes), we are required to offer to purchase the outstanding Senior Subordinated Notes at a purchase price of 101%, plus accrued and unpaid interest. The Senior Subordinated Notes are subordinate to borrowings under the ABL Agreement and the Senior Unsecured Notes. The indenture securing the Senior Subordinated Notes contains customary covenants and events of default, including covenants that limit our ability to incur debt, pay dividends and make investments. Substantially all of our U.S. subsidiaries guarantee the Senior Subordinated Notes. We believe we were compliant with these covenants at June 30, 2013 and expect to remain in compliance through June 30, 2014. |
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