Company: MWA
Filing Date: 2025-11-19
Form Type: 10-K
Source: 0001350593-25-000066
Chunk: 285

Company: Mueller Water Products, Inc.
Filing Date: 2025-11-19
Form: 10-K
Item: Item 1A
Chunk 285
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 production or sales activity.

Transportation costs are relatively high for most of our products.

Transportation costs can be an important factor in a customer’s purchasing decision.  Many of our products are big, bulky and heavy, which tends to increase transportation costs.  We also have relatively few manufacturing sites, which tends to increase transportation distances to our customers and consequently increases our transportation costs.  Additionally, energy and fuel costs can fluctuate markedly, which may result in significant cost increases particularly for the price of oil and gasoline.  High transportation costs could make our products less competitive compared to similar or alternative products offered by competitors.

Our business, financial condition and results of operations may be adversely impacted by the effects of inflation.

Inflation has recently adversely affected and has the potential to continue to adversely affect our business, financial condition and results of operations by increasing our overall cost structure, including purchased parts, commodity and raw material costs and labor.  In an inflationary environment, we may be unable to raise the prices of our products sufficiently to keep up with the rate of inflation, which would reduce our profit margins and cash flows.  Other inflationary pressures could affect wages, the cost and availability of components and raw materials and other inputs and our ability to meet customer demand. Inflation may further exacerbate other risk factors, including supply chain disruptions, risks related to international operations and the recruitment and retention of qualified employees.

Our high fixed costs may make it more difficult for us to respond to economic cycles.

A significant portion of our cost structure is fixed, including manufacturing overhead, capital equipment and research and development costs.  In a prolonged economic downturn, these fixed costs may cause our gross margins to erode and our earnings to decline.

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Table of ContentsIndex to Financial Statements

We may experience difficulties implementing upgrades to our software systems. 

We engage in implementations and upgrades to our software systems, including to our Enterprise Resource Planning (“ERP”) system.  The ERP is designed to accurately maintain the Company’s books and records and provide information important to the operation of the business to the Company’s management team.  Any software implementation or upgrade requires significant investment of human and financial resources, and we may experience significant delays, increased costs and other difficulties.  Any significant disruption or deficiency in the design and implementation of our software systems, including our ERP, could adversely affect our ability to process orders, ship product, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.  While we invest significant resources in planning and project management, significant issues may arise