News Column

Decatur keeps Mueller earnings flowing

August 6, 2014

By Tony Reid, Herald & Review, Decatur, Ill.

Aug. 06--ATLANTA -- Mueller Water Products surged ahead in its third quarter numbers announced Tuesday, and a big part of that success story was the Mueller Co. division which runs major factory and foundry operations in Decatur.

Operating income -- income minus costs of goods sold -- jumped 27.1 percent to $41.8 million, compared to $32.9 million at this time last year. Net sales rose 6.4 percent to $318.5 million over the same period and income per share rose a penny to 11 cents from 10 cents in the 2013 third quarter. Gross profit rose 8.1 percent to $97.3 million in the latest quarter, compared to $90 million for the 2013 third quarter.

And the Mueller Co. division led the way for Atlanta-based Mueller Water Products, with adjusted operating income flooding up 39.5 percent to $42.4 million in the latest quarter, contrasting with $30.4 million in the previous third quarter. Adjusted operating margin (revnue left after deducting costs like wages and raw materials) rose 4.5 percent to 19.8 percent compared to 15.3 percent in the 2013 third quarter.

Mueller Co saw net sales for the 2014 third quarter increase 7.4 percent to $214 million compared to $199.3 million over this time last year. Crunching the numbers in a conference call with industry analysts, Evan Hart, Mueller Water Products' chief financial officer, said Mueller Co. sales had gone well across the board.

"Adjusted operating income improved $12 million due primarily to higher domestic shipments of valves, hydrants and brass products and higher sales prices," Hart said Tuesday.

Looking ahead, Mueller Water Products predicts its Mueller Co. division will grow net sales by 10 percent in the fourth quarter and, overall, Mueller Water Products will achieve net sales percentage growth in the high single digits.

Mueller Co. has been doing well selling replacement parts to fix the nation's sagging water infratructure and now has advanced products and services like leak detection and monitoring technology. The recent catastrophic main failure in Los Angeles, leaving a damage bill in the millions of dollars, prompted one analyst to ask if the company was seeing any new interest in its leak detection technology.

Greg Hyland, company chairman, president and CEO, said they hadn't seen any fresh interest yet, but the company was ready.

"That (Los Angeles main burst) is exactly the type of situation that we designed this technology for," he said. "Los Angeles got so much publicity we wouldn't be surprised if it heightened the interest in our leak detection technolgy."

One expert estimate says fixing all of America's worn out water mains would cost $950 billion.

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Source: Herald & Review (Decatur, IL)

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