Mueller Water Products Reports Record Fourth Quarter and Full Year 2025 Results; Introduces Fiscal 2026 Guidance

Core Insights - Mueller Water Products, Inc. reported a strong financial performance for the fourth quarter and fiscal year ended September 30, 2025, with significant increases in net sales, net income, and adjusted EBITDA, reflecting operational excellence and effective market strategies [1][3][4]. Financial Performance - Net sales for the fourth quarter increased by 9.4% to $380.8 million compared to $348.2 million in the prior year quarter [2][5]. - For the fiscal year, net sales rose by 8.7% to $1,429.7 million from $1,314.7 million in the previous year [2]. - The company reported operating income of $69.6 million for the fourth quarter, a substantial increase from $28.4 million in the prior year quarter [2][8]. - Adjusted operating income for the fourth quarter increased by 39.6% to $78.9 million compared to $56.5 million in the prior year quarter [2][9]. - Net income for the fourth quarter surged to $52.6 million, up from $10.0 million in the prior year quarter, resulting in a net income margin of 13.8% [2][10]. - Adjusted net income for the fourth quarter increased by 76.1% to $59.7 million compared to $33.9 million in the prior year quarter [2][10]. - Adjusted EBITDA for the fourth quarter was $91.8 million, reflecting a 26.6% increase from $72.5 million in the prior year quarter [2][11]. Operational Efficiency - Gross profit for the fourth quarter increased by 26.2% to $140.0 million, driven by manufacturing efficiencies and volume growth [6]. - The gross margin improved by 500 basis points to 36.8% compared to 31.8% in the prior year quarter [6]. - Selling, general and administrative expenses rose by 5.7% to $66.7 million, primarily due to higher personnel costs and inflationary pressures [7]. Segment Performance - In the Water Flow Solutions segment, net sales increased by 8.6% to $217.5 million, driven by higher volumes and pricing [13]. - The Water Management Solutions segment saw net sales rise by 10.4% to $163.3 million, attributed to increased volumes of hydrants and repair products [16]. Cash Flow and Shareholder Returns - The company generated net cash provided by operating activities of $219.3 million for the fiscal year, although this was a decrease from $238.8 million in the prior year [21]. - Free cash flow for the fiscal year was $172.0 million, down from $191.4 million in the previous year [22]. - Mueller Water Products returned $56.9 million to shareholders through dividends and stock repurchases [2]. Future Outlook - The company anticipates fiscal 2026 consolidated net sales to be between $1,450 million and $1,470 million, representing an increase of 1.4% to 2.8% compared to the prior year [24]. - Adjusted EBITDA for fiscal 2026 is expected to be between $345 million and $350 million, indicating a growth of 5.8% to 7.3% compared to the previous year [25].