Mueller seeks waiver from bank group on financial reporting delay

By Sara Rosenberg

New York, Jan. 28 - Mueller Group Inc. is seeking a waiver until March 31 under its credit facility regarding a delay in providing financial statements to lenders, according to a company news release.

The financial statements in question are the 2004 audited financial statements and the restatement and quarterly financials for the quarter ended Jan. 1. Financial statements for fiscal years 2002 and 2003 and interim periods of fiscal year 2004 are all in the process of being restated.

Failure to file its 10-K by Jan. 13 constituted defaults under the Mueller Water Products Inc. (parent company) and Mueller Group indentures, but waivers from bondholders are not being sought at this time, the release said.

As previously announced, an independent investigation of alleged accounting improprieties at Mueller Water Products was concluded and a report identified several areas requiring financial review, principally concerning the excess and obsolete inventory reserves, the capitalization of costs relating to a project that should have been expensed in prior periods, the accrual of reserves for this project without identifying support for such accruals and the timing of recognition of revenue with regard to full truckload shipments that were not immediately dispatched to customers by certain freight carriers.

Mueller is a Decatur, Ill., manufacturer of flow control products for use in water distribution, water and wastewater treatment facilities, gas distribution systems and piping systems.

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