Mueller Water Products(US:MWA)2025-11-19 17:38Sales Performance - Water Flow Solutions accounted for approximately 58% of fiscal 2025 consolidated net sales, with net sales recognized at $824.9 million, $755.5 million, and $634.4 million for fiscal years 2025, 2024, and 2023 respectively[25][35] - Water Management Solutions represented about 42% of fiscal 2025 consolidated net sales, with net sales of $604.8 million, $559.2 million, and $641.3 million for fiscal years 2025, 2024, and 2023 respectively[26][37] - The company’s two largest distributors accounted for approximately 37%, 38%, and 35% of gross sales in fiscal years 2025, 2024, and 2023, respectively[48] - Seasonal demand affects net sales and operating income, with historically lower performance in the first and second fiscal quarters due to weather conditions impacting construction activity[47] - Approximately 5% of Water Flow Solutions' net sales were to Canadian customers in fiscal year 2025, compared to 6% in the previous two fiscal years[49] Operational Investments - The company plans to make disciplined investments to improve operational excellence and expand capabilities, aiming to drive sales growth and improve product margins[27] - Capital investments since 2018 have focused on modernizing manufacturing facilities, expanding domestic manufacturing capabilities, and accelerating new product development[28] - The new brass foundry in Decatur, Illinois is operational, replacing a legacy foundry built in the early 1900s, which is expected to enhance domestic manufacturing capabilities[28][43] - The company operates ten manufacturing facilities across the United States, Israel, and China, with plans to increase capital investments to expand production capacity[43][44] Backlog and Future Sales - Water Flow Solutions' backlog at the end of 2025 was $208.0 million, an increase from $199.0 million in 2024, while Water Management Solutions' backlog increased from $103.5 million in 2024 to $112.7 million in 2025[51] - Approximately 22% of Water Flow Solutions' backlog is expected to be shipped after 2026, while 4% of Water Management Solutions' backlog is anticipated to be shipped after 2026[51] - The company experienced an increase in overall backlog due to heightened demand for specialty valve and hydrant products compared to the prior year[51] Research and Development - R&D expenses were $19.9 million, $20.5 million, and $25.9 million during fiscal years 2025, 2024, and 2023, respectively[55] Workforce and Diversity - As of September 30, 2025, the company employed approximately 3,500 people, with 83% based in the United States[72] - The employee turnover rate in the United States for fiscal year 2025 was approximately 20%[72] - Approximately 42% of the United States workforce was represented by collective bargaining agreements as of September 30, 2025[72] - The company has successfully negotiated and extended several collective bargaining agreements, with expirations ranging from December 2025 to October 2027[74] - As of September 30, 2025, women and minorities represented 33% and 44% of the Board of Directors, respectively[65] Financial Management - Purchased components and raw materials accounted for approximately 35% and 8% of the cost of sales in 2025, respectively[45] - The company experienced approximately 3% inflation in 2025 compared to 2024, impacting product margins and profitability[239] - The principal financial instruments are cash and cash equivalents, which are not subject to material potential near-term losses[238] - The company manages market risks through established policies and procedures, including the use of foreign exchange contracts when appropriate[237] - The company monitors commodity price fluctuations and may adjust selling prices or implement supplier pricing agreements to manage risks[239] Environmental and Social Responsibility - The company’s environmental strategy includes reduction targets for key performance indicators such as GHG emissions and waste to landfill[59] - The company prioritizes employee engagement through programs like employee experience surveys and global quarterly town halls[71] Competitive Landscape - The competitive environment for water infrastructure products is mature, with strong brand recognition among established competitors[52] - The company will continue to seek acquisitions and investments in businesses and technologies to strengthen its competitive position and expand into new markets[33]