Mueller Water Products, Inc.

On April 27, 2017, Mueller Water Products issued a press release entitled “Mueller Water Products Reports 2017 Second Quarter Results.” Therein, the Company disclosed that certain of Mueller Technologies’ products had been failing prematurely, resulting in a $9.8 million warranty charge.   

On this news, the Company’s share price fell $1.43 per share, more than 11%, to close at $11.25 per share on April 28, 2017, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company lacked adequate testing for product quality; (2) that certain products with radio components were susceptible to fail prematurely; (3) that, as a result, the Company was reasonably likely to incur increased expenses, including warranty costs; (4) that these costs would materially impact the Company’s financial statements; (5) that the Company lacked adequate internal controls over warranty costs and estimates; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.