Mueller Water Products, Inc. (NYSE: MWA) reported net sales of $346.7 million and a net loss of $7.0 million for the quarter ended September 30, 2010. Summarized consolidated fiscal 2010 fourth quarter results compared to 2009 fourth quarter results are as follows:

* Net sales for the 2010 fourth quarter were $346.7 million, down 7.5 percent compared to $374.8 million for the 2009 fourth quarter. Excluding the 2009 fourth quarter net sales of two divested Anvil businesses, net sales for the 2010 fourth quarter increased 1.1 percent year-over-year.
* Income from operations for the 2010 fourth quarter was $14.1 million compared to income from operations of $12.9 million for the 2009 fourth quarter. Adjusted income from operations for the 2010 fourth quarter was $15.4 million compared to adjusted income from operations of $14.8 million for the 2009 fourth quarter.
* Net loss per share was $0.05 for the 2010 fourth quarter compared to a net loss per share of $0.09 for the 2009 fourth quarter. Adjusted net income per share was $0.00 for the 2010 fourth quarter compared to an adjusted net loss per share of $0.03 for the 2009 fourth quarter.
* Adjusted EBITDA for both the 2010 and 2009 fourth quarters was $36.7 million.
* Net debt decreased $70.2 million to $608.5 million at September 30, 2010 from $678.7 million at September 30, 2009.

Fourth Quarter Consolidated Results

Net sales for the 2010 fourth quarter of $346.7 million decreased $28.1 million from $374.8 million for the 2009 fourth quarter. Excluding net sales from two divested Anvil businesses that had net sales of $31.9 million in the 2009 fourth quarter, sales increased 1.1 percent. Net sales increased due to $11.2 million in higher pricing across all three businesses and $1.6 million of favorable Canadian currency exchange rates. These items were offset, in part, by $9.0 million in net lower shipment volumes.

Adjusted income from operations for the 2010 fourth quarter was $15.4 million, up $0.6 million from adjusted income from operations of $14.8 million for the 2009 fourth quarter. This increase was driven by $11.2 million in higher sales pricing and $6.8 million in lower operating costs, but was offset by $18.0 million in higher raw material costs.

Fourth Quarter Segment Results

Mueller Co.

Net sales for Mueller Co. were $163.7 million for the 2010 fourth quarter, up 3.5 percent, or $5.6 million, from $158.1 million for the 2009 fourth quarter due to $4.0 million in higher pricing, $1.5 million of favorable Canadian currency exchange rates and higher shipment volumes.

Adjusted income from operations of $26.6 million and adjusted EBITDA of $39.1 million for the 2010 fourth quarter compare to adjusted income from operations of $25.4 million and adjusted EBITDA of $38.1 million for the 2009 fourth quarter. Adjusted income from operations, as a percent of net sales, was 16.2 percent, and adjusted EBITDA as a percent of net sales was 23.9 percent for the 2010 fourth quarter. Income from operations increased $1.2 million primarily due to $6.2 million of lower per-unit overhead costs on products sold, $4.0 million in higher sales pricing and $3.6 million of higher manufacturing and other cost savings. These items were partially offset by $9.2 million of higher raw material costs and $2.9 million of higher selling, general and administrative expenses.

U.S. Pipe

Net sales of U.S. Pipe were $94.9 million for the 2010 fourth quarter, down $10.4 million from $105.3 million for the 2009 fourth quarter. This decrease was driven by $16.0 million in lower shipment volumes, partially offset by $5.6 million in higher pricing.

Adjusted loss from operations of $11.3 million and an adjusted EBITDA loss of $6.4 million for the 2010 fourth quarter compare to adjusted loss from operations of $7.1 million and an adjusted EBITDA loss of $2.6 million for the 2009 fourth quarter. The 2010 fourth quarter results were negatively impacted by $7.8 million of higher raw material costs, $5.7 million of higher per-unit overhead costs on products sold and $3.3 million of lower shipment volumes. These items were partially offset by $8.4 million of higher manufacturing and other cost savings and $5.6 million in higher sales pricing.

Anvil

Net sales for Anvil were $88.1 million for the 2010 fourth quarter, down $23.3 million from $111.4 million for the 2009 fourth quarter, which included $31.9 million of net sales associated with two businesses that were divested earlier this year. Net sales at Anvil increased 10.8%, or $8.6 million, year-over-year excluding net sales associated with these divestitures. The increase was driven by $6.9 million in higher shipment volumes and $1.6 million in higher pricing.

Income from operations of $7.6 million and adjusted EBITDA of $11.5 million for the 2010 fourth quarter compare to adjusted income from operations of $3.2 million and adjusted EBITDA of $7.8 million for the 2009 fourth quarter. Adjusted income from operations increased $4.4 million primarily due to $3.4 million of higher shipment volumes and a more profitable mix, $1.9 million of higher manufacturing and other cost savings, and $1.6 million in higher sales pricing. These items were partially offset by $1.0 million of higher raw material costs.

Refinancing and Interest Expense

On August 26, 2010, the Company issued $225 million aggregate principal amount of 8¾% senior notes due 2020 and entered into a $275 million asset-based credit agreement (the “ABL Agreement”) that matures in 2015. Net proceeds from the senior notes, $49.0 million borrowed under the ABL Agreement and $26.3 million of cash were used to repay all of the existing debt under the 2007 Credit Agreement, settle certain interest rate swap contracts for $14.8 million, and pay fees and expenses related to the credit agreements.

Net interest expense of $20.6 million for the 2010 fourth quarter decreased $6.6 million from $27.2 million for the 2009 fourth quarter. Net interest expense for the 2010 fourth quarter included $6.1 million related to settling interest rate swap contracts, and net interest expense for the 2009 fourth quarter included $6.3 million related to swap contracts settled during that quarter. Excluding swap contract settlement costs, net interest expense declined $6.4 million in the 2010 fourth quarter compared to the 2009 fourth quarter primarily due to lower debt levels during the 2010 fourth quarter and a lower effective interest rate.

Income Tax

The effective income tax rate for the 2010 fourth quarter was a benefit of 34.0% compared to the 2009 fourth quarter benefit of 37.0%.