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- **Record financials**: Q4 2025 net sales $380.8M (+9.4% YoY), full-year $1.4B (+8.7% YoY). Adjusted EBITDA $326M (+14.6% YoY), EPS $1.31 (+37% YoY).
- **Margin expansion**: Q4 gross margin 36.8% (+500bps YoY), full-year 36.1% (+120bps YoY). 2026 EBITDA margin target 23.8% (+100bps YoY).
- **Strategic investments**: 2026 capex 4%-5% of sales for domestic capacity; new hydrant renewal product with leak detection tech to launch in 2026.
- **Leadership transition**: CEO Martie Zakas retiring in Feb 2026; Paul McAndrew to succeed, with Zakas as special advisor until end-2026.
- **Key risks**: Residential construction decline (high single-digits YoY), tariffs (3% cost impact), and warranty charges ($5.6M Q4).

**【CEO Summary Section】**
- **Record-breaking performance**: Q4 2025 net sales grew 9.4% YoY to $380.8M, with full-year sales reaching $1.4B (8.7% YoY). Adjusted EBITDA hit $326M (14.6% YoY), and adjusted EPS rose 37% to $1.31.
- **Gross margin expansion**: Q4 gross margin expanded 500bps to 36.8%, driven by manufacturing efficiencies and price-cost dynamics. Full-year gross margin was 36.1%, up 120bps YoY.
- **Transition announcement**: CEO Martie Zakas will retire in Feb 2026, with Paul McAndrew succeeding as CEO. Zakas will serve as special advisor until end-2026.

**【CFO Financial Commentary】**
- **Q4 financial highlights**: Adjusted EBITDA of $91.8M (26.6% YoY), margin 24.1%. Full-year free cash flow $172M (84% of adjusted net income). Net debt leverage below 1x, with $452M total debt and $432M cash.
- **2026 guidance**: Net sales $1.45B-$1.47B (1.4%-2.8% YoY), adjusted EBITDA $345M-$350M (5.8%-7.3% YoY). Capital expenditures 4%-5% of net sales for capacity expansion.
- **Tariff impact**: 3% of cost of sales, partially offset by pricing actions. 2026 guidance excludes new price actions, which will be announced pre-public disclosure.

**【Q&A Highlights】**
- **Market trends**: Residential construction expected to decline high single-digits YoY, offset by mid-single-digit growth in repair/replacement and specialty valves. Municipal market remains resilient.
- **Investments**: $47M in 2025 capex for foundry upgrades; 2026 capex 4%-5% of sales for domestic capacity. WMS segment to benefit from new hydrant renewal product with leak detection tech.
- **Acquisition strategy**: Focus on water infrastructure, leveraging existing channels. Recent Krausz acquisition (repair products) exemplifies successful integration.
- **Risks**: Tariffs, residential construction slowdown, and supply chain uncertainties. Warranty charge ($5.6M) related to metering products, reflecting long warranty periods.


Mueller Water Products, Inc.(MWA)-20251107-2025 Q4 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

MWA

MWA fundamentals

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