 Achieved Net Sales of 228.5 million Reported Net Income per Diluted Share of 0.07 and Adjusted Net Income per Diluted Share of 0.11Generated 77.8 million of Net Cash from Operating Activities for the Nine Month Period ATLANTA, Aug. 05, 2020 GLOBE NEWSWIRE -- Mueller Water Products, Inc. NYSE: MWA announced today that for its fiscal 2020 third quarter ended June 30, 2020, net sales were 228.5 million and net income was 11.2 million.In the 2020 third quarter, the Company: Achieved net sales of 228.5 million, a decrease of 16.7 percent as compared with 274.3 million in the prior year quarter. Generated operating income of 20.0 million as compared with 47.2 million in the prior year quarter. Adjusted operating income was 28.6 million, a decrease of 45.0 percent as compared with 52.0 million in the prior year quarter. Earned net income of 11.2 million as compared with net income of 33.7 million in the prior year quarter. Adjusted net income was 17.8 million, a decrease of 53.0 percent as compared with 37.9 million in the prior year quarter. Reported net income per diluted share of 0.07 as compared with 0.21 in the prior year quarter. Achieved adjusted net income per diluted share of 0.11 as compared with 0.24 in the prior year quarter. Generated adjusted EBITDA of 43.8 million, a decrease of 33.0 percent as compared with 65.4 million in the prior year quarter. Increased net cash provided by operating activities for the nine month period by 60.0 million to 77.8 million as compared with 17.8 million in the prior year period.Overall, I am extremely proud of our employees as they continue to respond impressively to the disruption from the COVID-19 pandemic and to adapt to the new environment. During the third quarter, net sales were better than our expectations for a year-over-year decrease between 20 and 30 percent, as we worked closely with our customers and channel partners to reduce the effects of the pandemic on our business. We were pleased to see a smaller-than-expected downturn in residential construction activity during the quarter, along with an increase in order activity by our customers after they quickly adjusted their inventory levels earlier in the quarter. We realized a 16.7 percent decrease in consolidated net sales and incurred additional expenses related to the pandemic, which resulted in a 33.0 percent decrease in adjusted EBITDA. However, with the teams focused execution, we generated strong free cash flow during the quarter and have positioned ourselves well to face additional uncertainty from the pandemic as markets continue to recover, said Scott Hall, President and Chief Executive Officer of Mueller Water Products.During the quarter, we immediately took actions to mitigate the effects on our business of the decrease in volumes, and we executed initiatives to reduce operating expenses and prepare for continued uncertainty. We recently announced the closure of our Woodland, Washington operations, which will be relocated to our new facility in Kimball, Tennessee. We will continue to focus on balancing our actions to reduce costs with the pace and magnitude of the recovery.Although there is a high level of uncertainty regarding the pandemic, we remain hopeful that our end markets will continue to improve in the fourth quarter. We saw a significant sequential growth in sales and orders in June, as construction activity and economic activity increased after the initial shelter-in-place orders. Our expectation for fourth quarter sales to be between flat and 5 percent lower than the prior year reflects our updated views on the end markets and inventory positions in the channel.Although the pandemic continues to create significant challenges for our team members, our customers and our communities, I am confident that Mueller Water Products has taken the right steps to operate effectively in this new environment. Given our strong and flexible balance sheet and improved operations, we are well positioned to strengthen our position in water infrastructure products and services. In the near-term, we will continue to prioritize returning cash to shareholders through our quarterly dividend and executing on our key capital projects. In addition to modernizing our manufacturing facilities and operations, we are executing our strategies to further incorporate technology into our Infrastructure products. As we navigate challenging times ahead, we will maintain our focus on keeping our employees safe, protecting our communities, delivering exceptional products and support to our customers and increasing cash flow.Consolidated ResultsNet sales for the 2020 third quarter of 228.5 million decreased 16.7 percent, or 45.8 million, as compared with 274.3 million in the 2019 third quarter.Operating income of 20.0 million for the 2020 third quarter declined 57.6 percent, as compared with 47.2 million in the prior year quarter.Expenses associated with addressing the COVID-19 pandemic reduced operating income by approximately 5.7 million in the quarter, which were partially offset by an estimated 3.2 million of lower SGA expenses primarily due to reduced travel, trade shows and events.During the quarter, the Company incurred 8.6 million of strategic reorganization and other charges, which have been excluded from adjusted operating income and adjusted EBITDA, that primarily relate to an accrual for a potential settlement with Siemens, facility relocation expenses and senior executive severance costs.Adjusted operating income of 28.6 million for the 2020 third quarter decreased 45.0 percent, as compared with 52.0 million in the prior year quarter.Segment ResultsInfrastructureNet sales for the 2020 third quarter of 209.9 million decreased 16.1 percent, or 40.3 million, as compared with 250.2 million in the 2019 third quarter. This decrease was primarily due to reduced shipment volumes related to the pandemic, which was partially offset by higher pricing.Operating income and adjusted operating income were each 43.8 million. Adjusted operating income decreased 19.1 million, or 30.4 percent, to 43.8 million, primarily due to lower shipment volumes and 4.5 million of expenses related to the pandemic, partially offset by higher pricing and lower SGA expenses from temporary cost savings initiatives related to the pandemic.Adjusted EBITDA of 56.0 million decreased 24.5 percent, or 18.2 million, as compared with 74.2 million in the prior year quarter.TechnologiesNet sales for the 2020 third quarter decreased 22.8 percent to 18.6 million primarily due to lower volumes related to the pandemic, which was partially offset by higher pricing.Operating loss and adjusted operating loss were each 3.8 million. Adjusted operating loss was 1.6 million higher as compared with a 2.2 million operating loss in the prior year quarter, primarily due to lower volumes and 0.7 million of expenses related to the pandemic, partially offset by lower SGA expenses and higher pricing.Adjusted EBITDA decreased 1.3 million to a loss of 1.5 million as compared with a loss of 0.2 million in the prior year quarter.Interest Expense, NetInterest expense, net for the 2020 third quarter was 6.1 million as compared with 4.2 million in the prior year quarter. The increase in net interest expense in the quarter resulted from lower capitalized interest and a decrease in interest income.Income TaxesIncome tax expense for the 2020 third quarter was 3.4 million, or 23.3 percent of income before tax, and for the prior year quarter was 8.9 million, or 20.9 percent of income before tax. Cash Flow and Balance SheetNet cash provided by operating activities for the nine month period ended June 30, 2020 improved 60.0 million to 77.8 million as compared with 17.8 million in the comparable prior year period, primarily driven by improvements in working capital management and the timing of tax payments. Net cash provided by operating activities was adversely affected by the 22.2 million payment associated with the Walter Tax settlement in the first quarter of this year.The Company invested 13.9 million in capital expenditures during the third quarter as compared with 22.4 million in the prior year quarter. The year-to-date total of capital expenditures of 51.2 million decreased 1.7 million compared with the 2019 year-to-date total of 52.9 million.Free cash flow defined as net cash provided by operating activities less capital expenditures for the nine month period ended June 30, 2020 increased 61.7 million to 26.6 million as compared with negative free cash flow of 35.1 million in the comparable prior year period.As of June 30, 2020, Mueller Water Products had 447.6 million of total debt outstanding and 170.7 million of cash and cash equivalents, and the Companys net debt leverage ratio was 1.5 times. There are no maturities on this debt until June 2026 and the Companys 5.5 senior unsecured notes have no financial maintenance covenants. On July 30, 2020, the Company renewed and extended its asset based lending agreement ABL Agreement, which was set to expire in 2021. The new ABL Agreement has similar terms and terminates on July 29, 2025. As of June 30, 2020, the Company did not have any amounts borrowed under the ABL Agreement. Based on June 30, 2020 data, the Company had approximately 116.1 million of excess availability under its ABL Agreement, bringing its total liquidity to 286.8 million. Fourth Quarter and Full-Year 2020 OutlookAs expected, during the third quarter the majority of Mueller Water Products customers focused on maintaining essential services and completing existing projects, where possible. 