Business Context and Reporting Period
Mueller Water Products, Inc. filed this Form 8-K on March 14, 2006, to announce a restatement of its consolidated financial statements for the quarter ended December 31, 2004. The restatement addresses the classification of prior-period shipping and handling costs in compliance with EITF 00-10.
Key Financial Metrics and Restatement Impact
The filing details adjustments to the quarter ended December 31, 2004, and pro forma figures for the year ended December 31, 2004. The restatement increases both sales and cost of sales by $10.9 million but has no effect on operating income or net income.
| Metric | As Reported (Q4 2004) | As Restated (Q4 2004) | Pro Forma As Reported (FY 2004) | Pro Forma As Restated (FY 2004) |
|---|---|---|---|---|
| Net Sales ($ millions) | $130.3 | $141.2 | $386.4 | $397.3 |
| Cost of Sales ($ millions) | $117.6 | $128.5 | N/A | N/A |
| Operating Income | No Change | No Change | No Change | No Change |
| Net Income | No Change | No Change | No Change | No Change |
The filing does not provide current period revenue, cash flow, debt, or liquidity metrics for 2006.
Material Changes Versus Prior Period
The primary material change is the reclassification of shipping and handling costs. Previously reported as a reduction of revenue, these costs are now included in cost of sales. This adjustment increases reported net sales and cost of sales by $10.9 million for the quarter ended December 31, 2004. The filing notes that the previously filed Form 10-Q for the quarter ended December 31, 2005, should no longer be relied upon.
Management Commentary, Risks, and Contingencies
- Internal Controls: Management determined that this restatement is not the result of a new material weakness in internal control over financial reporting. Instead, it stems from a material weakness previously reported in the Form 10-Q as of December 31, 2005, regarding the preparation, review, and presentation of consolidated financial statements.
- Future Filings: The Company intends to file a Form 10-Q/A as soon as practical to include the corrected consolidated financial statements.
- Accounting Firm: Management discussed the conclusion with PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm.
Key Facts for Investor Verification
- Verify the upcoming Form 10-Q/A filing for the corrected financial statements for the quarter ended December 31, 2004.
- Confirm that the restatement does not alter operating income or net income figures.
- Review the previously reported material weakness in internal controls related to financial statement preparation to assess ongoing remediation efforts.
- Note that the filing does not provide updated liquidity, debt, or cash flow data for the current period.