Company: MWA
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001350593-25-000012
Chunk: 35

Company: Mueller Water Products, Inc.
Filing Date: 2025-02-05
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 any impact as a result of the recently announced tariffs. The external operating environment remains dynamic as we face uncertainties and challenges emanating from changes in government policies, the interest rate environment, the Israel-Hamas war and unrest in the Middle East, as well as labor inflation and availability. We expect these challenges to continue during the remainder of fiscal 2025. After our short-cycle channel and customer inventory levels largely normalized during the first quarter of 2024, our orders and shipments reflected a more typical operating environment compared with the high backlog environment we experienced during and after the COVID-19 pandemic. For the remainder of fiscal 2025, we assume that we will continue to experience a more normalized operating environment leading to normalized seasonality for consolidated net sales. Therefore, we anticipate quarterly consolidated net sales as a percentage of fiscal year 2025 consolidated net sales to be the highest in the third quarter and lowest in the first quarter, with a sequential increase in consolidated net sales in the second quarter as the construction season ramps up for the spring season.  In January 2025, Blue Chip Economic Indicators forecasted a 0.7% increase in housing starts for the calendar year 2025 as compared to the calendar year 2024.  We anticipate resilient demand in the municipal repair and replacement end market driven by the aging water infrastructure albeit moderated by budgetary and operational pressures on municipalities.  

Additionally, we anticipate that new residential construction activity and new lot and land development will be relatively constrained by the interest rate environment, depending on the geographic region. For the remainder of fiscal 2025, we anticipate that inflation will continue to modestly impact manufacturing costs, primarily due to wage inflation, as well as raw materials and purchased parts.  We will continue to monitor the market and economic conditions impacting our business and take appropriate actions to address inflationary and other cost pressures, including new tariffs, by implementing price increases, cost containment measures and supplier management measures, among other mitigating actions.

24

Results of Operations

Three Months Ended December 31, 2024 Compared to Three Months Ended December 31, 2023 

 Three months ended December 31, 2024 Water Flow SolutionsWater Management SolutionsCorporate  Total     (in millions)Net sales$174.6 $129.7 $— $304.3 Gross profit$55.1 $47.9 $— $103.0 Operating expenses:Selling, general and administrative19.8 20.3 13