MUELLER WATER PRODUCTS

Welcome and thank you for standing by. At this time, all participants are in a listen-only mode until the question and answer session. Today's call is being recorded. If you have any objections, you may disconnect at this time. I will now introduce your conference host, Mr. Whit Kincaid. Sir, you may begin.

Good morning. I hope everyone is safe and healthy. Thank you for joining us on Muir Water Products' second quarter 2020 conference call. We issued our press release reporting results of operations for the quarter ended March 31, 2020, yesterday afternoon. A copy of it is available on our website, MuellerWaterProducts.com. Scott Hall, our President and CEO, and Marty Zakas, our CFO, will be discussing the COVID-19 pandemic, our second quarter's results, and current market conditions. This morning's call is being recorded and webcast live on the Internet. We have also posted slides on our website to accompany today's discussion as well as to address forward-looking statements and our non-GAAP disclosure requirements. At this time, please refer to slide two. 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 or quarter, unless specified otherwise, refer to our fiscal year, which ends on September 30th. A replay of this morning's call will be available for 30 days at 1-800-835-8069. 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 8K later this morning. I'll now turn the call over to Scott.

Thanks, Whit. Thank you for joining us today. I hope everyone in the audience is doing well and is staying safe and healthy during this challenging time. Before we discuss our second quarter results for 2020, I will discuss the ongoing COVID-19 pandemic, which is affecting cities and countries around the world. Today's call is a little different given we have participants located in a number of locations. So I apologize in advance for any technical difficulties we may encounter. The COVID-19 pandemic has created significant challenges for our customers, communities, and employees. I am incredibly proud of how our employees have responded to the challenges. Our team members quickly stepped up to the challenge and our COVID-19 response team meets daily to share information and make quick decisions. Our most important priorities are keeping our employees safe, Protecting our communities and providing support to our customers. We eliminated nonessential travel for all employees and executed remote work procedures for support staff. With a focus on employee safety and engagement, we enhanced procedures for disinfection including reinforcing hand washing at all facilities, established processes for physical distancing, and increased frequency of communication to employees. We continue to operate as an essential business providing products and services to customers which are needed to manage and maintain our nation's critical water infrastructure. We implemented preparedness plans to keep teens safe while they work. These plans include operating our manufacturing plants and distribution centers with new physical distancing measures focused on safe distancing procedures and processes and usage of additional personal protective equipment. All of our facilities are operational We continue to proactively monitor our supply chain and have not experienced any material supply chain issues since the temporary closure of our Jingman facility, which is located near Wuhan in the Hubei province. Our commercial teams are focused on providing customer service, maintaining contact with our direct customers, and working closely with our distributors. We have adjusted our approach to leverage digital channels and processes to fill orders as required for physical distancing. I am inspired by how our teams are looking for ways to support their communities. Our Albertville, Alabama product engineering team is producing 3D printed face shields for frontline medical professionals caring for patients. The first round of face shields produced are in support of the Marshall Medical Center South in Boaz, Alabama. This contribution is important work that is providing much needed personal protective equipment for medical professionals who continue to risk their own lives to save others and battle the COVID-19 virus. I will now touch on our second quarter performance. I was really pleased with our strong performance in the quarter as we generated consolidated net sales growth of 10.1%. The increase was driven by increased shipment volumes across most of our product lines and pricing. In addition, It was a significant sequential improvement versus the 3.1% organic net sales growth in the first quarter of this year. The higher volumes were driven by strength in our end markets, especially residential construction. In addition, we believe customers increased orders in anticipation of price increases announced during the quarter. We improved our gross margin in the quarter, despite the startup costs associated with our large casting foundry expansion in Chattanooga. and expenses associated with addressing the COVID-19 pandemic. Excluding the Krause acquisition costs in the prior year quarter, our gross margin increased by 50 basis points. This improvement led to a 15.9% increase in adjusted EBITDA and 100 basis point improvement in adjusted EBITDA margins. Our strong second quarter results are a testament to the growth and performance we are delivering, as well as our team's ability to execute in an increasingly challenging environment. I will discuss current market conditions given the COVID-19 pandemic later in the call. Although we have delivered strong sales growth through the first half of the year, we expect a material slowdown in our end markets for the rest of our fiscal year, especially residential construction. However, our municipal customers are providing critical water, energy, and public works infrastructure services and continue to operate at reduced levels during this crisis. Due to the slowdown in orders we have seen in April, We are reviewing all aspects of our business and taking difficult but necessary steps including adjusting our production capacity to preserve liquidity and cash flow during this challenging period. Before I turn the call over to Marty who will provide more detail on our second quarter, I want to discuss why we believe that Mueller Water Products is in a much stronger position versus the last major recession. We have impressive longevity as we have been working with our customers for over a century We have a strong balance sheet with ample liquidity and a net debt leverage ratio of 1.6 times at the end of the second quarter versus 3.5 times at the end of fiscal 2008. We are a more focused company after selling U.S. pipe and anvil with a leading position in the water infrastructure market. Today, our end market exposure is more focused on municipal repair and replacement versus residential construction. Residential construction made up about 25 to 30 percent of our consolidated net sales in fiscal 2019, compared with approximately 50 percent in fiscal 2007. We estimate 60 to 65 percent of our core products are critical to utilities to maintain their networks. This gives us a strong base of business with additional sales coming from residential construction and project-related work. As a result, we have solid cash flow generation evidenced by consistently paying a quarterly dividend, even during the Great Recession. Finally, we have addressed legacy liabilities, including exiting multi-employer pension plans and settling the Walter tax liability with no future obligations. In summary, despite the near-term headwinds, I am confident in the long-term prospects for Mural Water Products as a leader in water infrastructure products and services. With that, I'll turn the call over to Margie.