Mueller Water Products(MWA) - 2025 Q2 - Quarterly Results

Financial Performance - Net sales increased by 3.1 percent to $364.3 million compared to$353.4 million in the prior year quarter[2]. - Reported net income of $51.3 million, a 15.8 percent increase from$44.3 million in the prior year quarter, with a net income margin of 14.1 percent[9]. - Adjusted EBITDA rose by 2.8 percent to $84.5 million, achieving an adjusted EBITDA margin of 23.2 percent[10]. - Adjusted net income increased by 16.0 percent to$53.7 million compared to $46.3 million in the prior year quarter[9]. - Operating income increased by 10.1 percent to$69.9 million, with an operating margin of 19.2 percent[6]. - Net income for the six months ended March 31, 2025, was $86.6 million, a significant increase of 48$58.6 million in the same period in 2024[43]. - Net sales for the six months ended March 31, 2025, reached $668.6 million, a 9.6$609.8 million in the same period of 2024[49][50]. - Gross profit for the six months ended March 31, 2025, was $231.0 million, compared to$216.7 million in the prior year, reflecting a gross profit margin of 34.5%[49][50]. - Operating income for the six months ended March 31, 2025, was $117.3 million, with an operating margin of 17.5$86.3 million and a margin of 14.2% in the previous year[49][50]. - Net income for the six months ended March 31, 2025, was $86.6 million, resulting in a net income margin of 13.0$92.9 million, translating to an adjusted net income per diluted share of $0.59[49]. Guidance and Projections - The company raised its fiscal 2025 net sales guidance to between$1,390 million and $1,400 million, reflecting a 5.7 percent to 6.5 percent increase compared to the prior year[23]. Cash Flow and Capital Expenditures - Free cash flow for the six-month period increased by$0.9 million to $47.3 million compared to$46.4 million in the prior year period[21]. - Capital expenditures for the first six months of fiscal 2025 were $21.1 million, up from$15.8 million in the prior year period[20]. - Free cash flow for Q1 2025 was $5.1 million, compared to a negative free cash flow of$15.8 million in Q1 2024[46][48]. - Capital expenditures for Q1 2025 totaled $9.2 million, a decrease from$10.1 million in Q1 2024[45][47]. - Capital expenditures for the six months ended March 31, 2025, totaled $21.1 million, consistent with the previous year's expenditures[49][50]. Debt and Leverage - The company reported a total debt of$450.5 million and cash and cash equivalents of $329.2 million, resulting in a debt leverage ratio of 1.5 times[22]. - Net debt at the end of Q1 2025 was$121.3 million, with total debt of $450.5 million and cash and cash equivalents of$329.2 million[45][46]. - Debt leverage ratio was 1.5x based on trailing twelve months' adjusted EBITDA, while net debt leverage ratio was 0.4x[46]. Tax and Other Charges - The effective income tax rate for the second quarter was 24.2 percent, slightly down from 24.8 percent in the prior year quarter[18]. - The effective tax rate for adjusting items was 23.7% for the six months ended March 31, 2025[49]. - Strategic reorganization and other charges amounted to $4.1 million for the six months ended March 31, 2025, impacting net income[49]. Assets and Liabilities - Cash and cash equivalents at the end of the period were$329.2 million, up from $179.2 million at the end of March 31, 2024[43]. - Total assets increased to$1,670.6 million as of March 31, 2025, compared to $1,635.9 million as of September 30, 2024[39]. - The company reported a decrease in total current liabilities to$235.3 million as of March 31, 2025, from $258.0 million as of September 30, 2024[39]. Quarterly Performance - Net sales for the three months ended March 31, 2025, were$364.3 million, an increase of 3% compared to $353.4 million for the same period in 2024[41]. - Gross profit for Q1 2025 was$128.0 million, with a gross profit margin of 35.1%, compared to $130.4 million and a margin of 36.9$69.9 million, with an operating margin of 19.2%, compared to an operating income of $63.5 million and a margin of 18.0$51.3 million, resulting in a net income margin of 14.1%, compared to $44.3 million and a margin of 12.5$84.5 million, with an adjusted EBITDA margin of 23.2%, compared to $82.2 million and a margin of 23.3$305.7 million for Q1 2025, compared to $236.8 million for the same period in 2024[45][47].