Company: MWA
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001350593-25-000012
Chunk: 70

Company: Mueller Water Products, Inc.
Filing Date: 2025-02-05
Form: 10-Q
Item: Part I, Item 8
Chunk 70
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 legacy brass foundry in Decatur, Illinois, which ceased production in January 2025.  The Israel-Hamas war negatively impacted Gross profit by less than 5%.  As a result, Gross margin was 33.8% in the three months ended December 31, 2024 as compared with 33.7% in the prior year period.

Selling, general and administrative expenses (“SG&A”) for the three months ended December 31, 2024 were $53.9 million as compared with $56.9 million in the prior year period, a decrease of $3.0 million or 5.3%, primarily due to lower amortization and favorable foreign exchange impacts, partially offset by approximately 3% inflation, higher third-party fees and personnel-related expense.  SG&A as a percentage of net sales was 17.7% and 22.2% for the three months ended December 31, 2024 and December 31, 2023, respectively.

Strategic reorganization and other charges for the three months ended December 31, 2024 were $1.7 million and consisted of expenses associated with our leadership transition and severance.  Strategic reorganization and other charges for the three months ended December 31, 2023 were $6.6 million and consisted of expenses associated with our leadership transition, cybersecurity incidents and certain transaction-related expenses. 

Net interest expense for the three months ended December 31, 2024 was $1.6 million as compared with $3.3 million in the prior year period, a decrease of $1.7 million or 51.5%, primarily due to higher interest income.  The components of net interest expense are as shown below: 

Three months endedDecember 31,20242023 (in millions)4.0% Senior Notes$4.5 $4.5 Deferred financing costs amortization0.3 0.3 ABL Agreement0.2 0.2 Capitalized interest(0.1)(0.1)Other interest expense0.1 0.2 Total interest expense5.0 5.1 Interest income(3.4)(1.8)Interest expense, net$1.6 $3.3 

26

The reconciliation between the U.S. federal statutory income tax rate and the effective income tax rate is presented below:

 Three months endedDecember 31,20242023U.S. federal statutory income tax rate