Lost 7 cents for quarter. However, management expressed optimism. First time in the past 3 years see improvement and market stabilizing.
Forward looking is better (paraphrasing per mgmt. statements)....
According to the company, they have been cash flow positive for the past five years. I don't know what they were before that time period. The positive cash flow has been in a downtrend for the past four years, but it is still positive. There is a positive cash flow chart for the Gabelli Pump, Valve & Motor Symposium that MWA attended. The chart is on page 26, upper left hand of the page.
Here is the link: http://files.shareholder.com/downloads/ABEA-4SDD76/1514999717x0x541335/e22382af-0ae8-44bd-8fea-a7c103798b57/Investor%20Presentation%20-%20Gabelli%2022nd%20Annual%20Pump,%20Valve,%20and%20Motor%20Symposium_February%209%202012.pdf
EBITDA - earnings before income Taxes Depreciation and amortization...
Adjusted EBITDA for the 2012 first quarter of $17.8 million was essentially flat with adjusted EBITDA for the first quarter last year.
Interest Expense, Net
Interest expense, net for the 2012 first quarter was $15.7 million, which included $1.4 million of non-cash costs for terminated interest rate swap contracts, compared to $15.9 million for the 2011 first quarter, which included $1.9 million for such contracts. Although these contracts were terminated prior to 2011, the related costs are being amortized over the original term of the swap contracts.
22 M increase in sales for the quarter at pipe but only 1.4 M improvement in EBITA. That is a 29% increase in sales! Where are the earnings on those sales? How much did they sell to the middle east at variable cost? And they claim 11% increase in selling price? Again, where are the earnings? Seems to be a disconnect like...they are giving away pipe?
And that debt at 7.7 and 8% roughly is a concern.
Bottom line: I keep adding shares. Purchased some more on Friday. MWA is not a large position for me. I am optimistic, however, and will keep adding as opportunities present themselves. Will BUY on weakness....and the dividend is a sweet incentive.
No, in 2011, their worst year, 40mm in operating cash flow after interest which they used for 30mm in cap ex and 10mm in dividends. Out of cash they made a 10mm acquisition and paid down 15mm in debt to reduce cash balance by 25mm roughly.