Summary • F2Q10 results below expectations due to operating margins. EPS of ($0.11) was below our ($0.09) estimate and ($0.10) consensus. - GAAP EPS was ($0.15); includes $0.06 in restructuring partially offset by $0.01 in one-time benefits. • Revenue was ahead of our expectations. Revenue increased 2.3% internally yoy and was 5% above our estimate. - Mueller Co. revenue increased 23% yoy (6% sequentially), and was 6.5% above our estimate as shipments of all core products increased. - U.S. Pipe revenue decreased 11% yoy, but increased 4% sequentially and was 2% above our estimate. - Anvil revenue decreased approximately 8% internally yoy, but was 6% above our estimate. • Bookings are encouraging. Bookings increased 40% at Mueller Co. during the quarter and 50% at U.S. Pipe as the positive trends experienced in F1Q strengthened throughout F2Q likely due in part to stimulus-funded projects. • However, operating margin was disappointing. Operating margin of -4.1% was 250 bps below our estimate and prior year despite yoy revenue growth. - Mueller Co. operating margin of 6.9% was 460 bps higher YOY but 340 bps below our estimate. Volume leverage was partially offset by higher SG&A and underabsorption. - U.S. Pipe operating margin was -23.6%, well below -11.7% last year and our -15.3% estimate as pricing remains challenging, though not materially worse than we had modeled. • Our price target is $7 and assumes forward multiples of 7.1x EV/EBITDA and 13.4x earnings versus historical averages of 7.7x and 17.7x, respectively.
I once did a little job for mueller and there was girl at mueller who had the best body I have ever seen she called me last night and said I guess you saw those good numbers I know you like my muellers why don't ........... Oh my what a time she was right a plastic surgeon couldn't done a better job and they are just like you said and all natural farm fresh muellers all you have to do is pull them. Totally overpowering at this level. Gosh I could have been stuck with a 52 year old with droopy boopies me sticking to Miss Mueller Glove tell death due us part.