Mueller Water Products, Inc. (NYSE:MWA) Q4 2019 Earnings Conference Call - Final Transcript

Nov 06, 2019 • 09:00 am ET


Mueller Water Products, Inc. (NYSE:MWA) Q4 2019 Earnings Conference Call - Final Transcript


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Welcome, and thank you for standing by. [Operator Instructions] Today's call is also being recorded. If anyone has any objections, you may disconnect at this time. I would now like to turn the call over to Mr. Whit Kincaid. Thank you. You may begin.

Whit Kincaid

Good morning, everyone. Welcome to Mueller Water Products' fourth quarter and fiscal year-end 2019 conference call. We issued our press release reporting results of operations for the quarter and year ended September 30, 2019, yesterday afternoon. A copy of it is available on our website, Discussing our fourth quarter and full-year results and the outlook for 2020 are Scott Hall, our President and CEO; and Martie Zakas, our CFO.

This morning's call is being recorded and webcast live on the Internet. We have also posted slides on our website to help illustrate the quarter's results as well as to address forward-looking statements and our non-GAAP disclosure requirements. At this time, please refer to Slide 2. This slide identifies non-GAAP financial measures referenced in our press release, on our slides and on this call and discloses the reasons why we believe that these measures provide useful information to investors. Reconciliations between non-GAAP and GAAP financial measures are included in the supplemental information within our press release and on our website.

Slide 3 addresses forward-looking statements made on this call. This slide includes cautionary information identifying important factors that could cause actual results to differ materially from those included in forward-looking statements. Please review Slides 2 and 3 in their entirety.

During this call, all references to a specific year, unless specified otherwise, refer to our fiscal year, which ended September 30. A replay of this morning's call will be available for 30 days at 1-888-566-0638. The archived webcast and corresponding slides will be available for at least 90 days in the Investor Relations section of our website. In addition, we will furnish a copy of our prepared remarks on Form 8-K later this morning.

I'll now turn the call over to Scott.

J. Scott Hall

Thanks Whit. Thank you for joining us today to discuss our fourth quarter and full-year results for 2019. Our teams finished the year well, despite a more challenging operating environment relative to the prior year. We continued to grow the business in the fourth quarter, as we increased both net sales and adjusted EBITDA. Our consolidated net sales growth of 5% in the quarter was driven by the benefit of the Krausz acquisition and higher pricing. However, due to the slower-than-expected recovery in residential construction, lowered inventory levels in the channel, and a decrease in Canadian sales, our organic net sales decreased slightly compared with strong sales in the prior year fourth quarter.

We continue to improve our gross margin as we delivered a 50 basis point increase in the quarter, excluding the impact of the inventory step-up at Krausz. Additionally, our adjusted EBITDA increased 6% in the quarter with a 20 basis point improvement in margin. I am pleased with how we responded to