Loading...
•
Mar 31, 2020
Mueller Q2 2020 Earnings Report
Increased net sales and net income compared to the prior year quarter.
Key Takeaways
Mueller Water Products reported a strong second quarter in fiscal year 2020, with a 10.1% increase in net sales and a significant rise in net income compared to the same quarter of the previous year. The company's performance was driven by increased shipment volumes and higher pricing, despite challenges posed by the COVID-19 pandemic.
Net sales increased by 10.1% to $257.7 million compared to the prior year quarter.
Operating income improved to $35.8 million, compared to $22.2 million in the prior year quarter.
Net income increased to $23.8 million, compared to $10.9 million in the prior year quarter.
Adjusted EBITDA increased by 15.9% to $51.8 million compared to the prior year quarter.
Mueller
Mueller
Forward Guidance
Due to the slowdown in orders, Mueller Water Products expects a material slowdown in end markets for the second half of the fiscal year as a result of the economic effects of COVID-19, especially in residential construction. The company expects the third quarter to be the most challenging quarter of fiscal 2020.
Positive Outlook
- Approximately 60 to 65 percent of core products go to utilities where they are critical in maintaining their networks.
- Teams are concentrating on maximizing cash flow from operations.
- The company can continue to invest in its business and return cash to shareholders through the quarterly dividend.
- The company has a very solid and flexible balance sheet and a more focused business.
- The company is a leader in water infrastructure products and services.
Challenges Ahead
- The COVID-19 pandemic has created significant challenges.
- The company expects a material slowdown in end markets for the second half of the fiscal year.
- Municipal customers should fare better, but the timing and magnitude of the recovery remain highly uncertain.
- The company has seen a slowdown in orders in April.
- The company is temporarily suspending the share repurchase program for additional financial flexibility.