Mueller Water Products Reports 2025 Third Quarter Results

Core Insights - Mueller Water Products, Inc. reported a 6.6% increase in net sales to $380.3 million for the third quarter of fiscal 2025, compared to $356.7 million in the same quarter of the previous year [4][6] - The company achieved a net income of $52.5 million, up 11.0% from $47.3 million in the prior year quarter, with a net income margin improvement to 13.8% from 13.3% [11][41] - Adjusted EBITDA increased by 1.4% to $86.4 million, with an adjusted EBITDA margin of 22.7%, down from 23.9% in the prior year [12][41] - The company raised its annual guidance for fiscal 2025 net sales to between $1,405 million and $1,415 million, reflecting an increase of 6.9% to 7.6% compared to the previous year [25] Financial Performance - Gross profit for the third quarter increased by 10.9% to $145.7 million, with a gross margin of 38.3%, up from 36.8% in the prior year [7][41] - Operating income rose by 10.0% to $73.7 million, with an operating margin of 19.4%, compared to 18.8% in the prior year [9][41] - Selling, general and administrative expenses increased by 15.4% to $71.0 million, primarily due to unfavorable foreign currency impacts and inflationary pressures [8][41] Segment Results - Water Flow Solutions segment net sales increased by 4.1% to $216.6 million, driven by higher volumes of iron gate and specialty valves [13][45] - Water Management Solutions segment net sales rose by 10.2% to $163.7 million, primarily due to increased volumes of repair products and hydrants [16][45] Cash Flow and Balance Sheet - Net cash provided by operating activities for the nine-month period was $135.8 million, down from $149.5 million in the prior year [21][43] - Free cash flow for the nine-month period was $103.0 million, a decrease from $121.5 million in the previous year [23][43] - As of June 30, 2025, total debt outstanding was $450.8 million, with cash and cash equivalents of $372.0 million, resulting in a debt leverage ratio of 1.5 times [24][45] Outlook - The company expects adjusted EBITDA for fiscal 2025 to be between $318 million and $322 million, reflecting an increase of 11.7% to 13.1% compared to the prior year [25][26] - Total SG&A expenses are projected to be between $245 million and $247 million for fiscal 2025 [26]