Inferra AI / Company / MWA / Slides
Mueller Water Products, Inc. — View presentation (company IR deck)
Mueller Water Products, Inc. (MWA) · 0 slides · Filed Oct 23, 2026
Every slide of this earnings presentation, with the text as published. Open the original deck ↗ · All MWA deck slides
Slide 1
Slide 2 — Non-GAAP Measures
2 Non-GAAP Measures In an effort to provide investors with additional information regarding the Company’s results as determined by accounting principles generally accepted in the United States (“GAAP”), the Company also provides non-GAAP information that management believes is useful to investors. These non-GAAP measures have limitations as analytical tools, and securities analysts, investors and other interested parties should not consider any of these non-GAAP measures in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. Adjusted net income, adjusted net income per diluted share, adjusted operating income, adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin are non- GAAP measures that the Company presents as performance measures because management uses these measures to evaluate the Company’s underlying performance on a consistent basis across periods and to make decisions about operational strategies. Management also believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of the Company’s recurring performance. Net debt and net debt leverage are non-GAAP measures that the Company presents as liquidity measures because management uses them to evaluate its capital management and financial position, and the investment community commonly uses them as measures of indebtedness. Free cash flow is a non-GAAP liquidity measure used to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The calculations of these non-GAAP measures and reconciliations to GAAP results are included as an attachment to this presentation, which has been posted online at www.muellerwaterproducts.com. The Company does not reconcile forward-looking non-GAAP measures to the comparable GAAP measures, as permitted by Regulation S-K, as certain items, e.g., expenses related to corporate development activities, transactions, pension expenses/(benefits), corporate restructuring and non-cash asset impairment, may have not yet occurred, are out of the Company’s control or cannot be reasonably predicted without unreasonable efforts. Additionally, such reconciliation would imply a degree of precision and certainty regarding relevant items that may be confusing to investors. Such items could have a substantial impact on GAAP measures of the Company's financial performance.
Slide 3 — Forward-Looking Statements
3 Forward-Looking Statements This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements that address activities, events or developments that the Company intends, expects, plans, projects, believes or anticipates will or may occur in the future are forward-looking statements, including, without limitation, statements regarding outlooks, projections, forecasts, expectations, commitments, trend descriptions and the ability to capitalize on trends, value creation, long-term strategies and the execution or acceleration thereof, operational improvements, inventory positions, the benefits of capital investments, financial or operating performance, including driving increased margins, operational and commercial initiatives, capital allocation and growth strategy plans, and the demand for the Company’s products. Forward-looking statements are based on certain assumptions and assessments made by the Company in light of the Company’s experience and perception of historical trends, current conditions and expected future developments. Actual results and the timing of events may differ materially from those contemplated by the forward-looking statements due to a number of factors, including, without limitation, changing regulatory, trade and tariff conditions; logistical challenges and supply chain disruptions, geopolitical conditions, including the Israel-Hamas war, public health crises, or other events; inventory and in-stock positions of our distributors and end customers; an inability to realize the anticipated benefits from our operational initiatives, including our large capital investments in Decatur, Illinois, plant closures, and reorganization and related strategic realignment activities; an inability to attract or retain a skilled and diverse workforce, increased competition related to the workforce and labor markets; an inability to protect the Company’s information systems against service interruption, risks resulting from possible future cybersecurity incidents, misappropriation of data or breaches of security; failure to comply with personal data protection and privacy laws; cyclical and changing demand in core markets such as municipal spending, residential construction and natural gas distribution; government monetary or fiscal policies; the impact of adverse weather conditions; the impact of manufacturing and product performance; the impact of wage, commodity and materials price inflation; foreign exchange rate fluctuations; the impact of higher interest rates; the impact of warranty charges and claims, and related accommodations; the strength of our brands and reputation; an inability to successfully resolve significant legal proceedings or government investigations; compliance with environmental, trade and anti- corruption laws and regulations; climate change and legal or regulatory responses thereto; the failure to integrate and/or realize any of the anticipated benefits of acquisitions or divestitures; an inability to achieve our goals and commitments in environmental and sustainability programs; and other factors that are described in the section entitled “RISK FACTORS” in Item 1A. of the Company’s most recent Annual Report on Form 10-K and later filings on Form 10-Q, as applicable. Forward-looking statements do not guarantee future performance and are only as of the date they are made. The Company undertakes no duty to update its forward- looking statements except as required by law. Undue reliance should not be placed on any forward-looking statements. You are advised to review any further disclosures the Company makes on related subjects in subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the United States Securities and Exchange Commission.
Slide 4 — Fourth Quarter and Full Year Highlights
4 • Delivered another record-breaking performance to close the year with Q4 net sales and adj. EBITDA exceeding high-end of expectations − Grew net sales 9.4% y/y reflecting strong volume gains and improved price realization, demonstrating enhanced commercial execution and resilient end market demand − Expanded gross margin 500 bps. y/y with relentless focus on operational excellence and customer service − Set new benchmarks for quarterly adj. EBITDA and adj. EBITDA margin with adj. EBITDA margin exceeding 24% • Achieved record levels in FY2025 for net sales, gross margin, adj. EBITDA and adj. net income per diluted share, exceeding expectations − Increased net sales 8.7% y/y in FY2025, reflecting strong demand and effective execution − Grew adj. EBITDA 14.6% y/y and expanded adj. EBITDA margin 110 bps. y/y to 22.8% − Generated $172M of Free Cash Flow and returned $57M to shareholders (dividends and repurchases) • Delivered remarkable results through transformation over past 2 years − Expanded gross margin >600 bps. reinforcing commitment to drive further improvements and leverage favorable market trends in infrastructure spending. − Expect to deliver continued net sales growth and margin expansion in FY2026 Fourth Quarter and Full Year Highlights (1) See Appendix for reconciliation of non-GAAP measures (Adjusted EBITDA, Adjusted Net Income per Diluted Share, Free Cash Flow) to their corresponding GAAP measures. Q4 Fiscal 2025 (1) (y/y or bps. vs. Fiscal 2024) Net Sales $380.8M +9.4% Gross Margin Adjusted EBITDA $91.8M +26.6% Free Cash Flow $69.0M -$0.9M Adjusted Net Income per Diluted Share $0.38 +72.7% FY $1,429.7M +8.7% $326.2M +14.6% $1.31 +36.5% $172.0M -$19.4M 36.8% +500 bps. 36.1% +120 bps. Record for Quarter/FY
Slide 5 — Commercial and Operational Highlights
5 • Delivered another year of gross margin improvement and double-digit net sales growth for iron gate and specialty valves, hydrants and repair products − Exceptional execution, despite challenging external environment, through discipline, dedication and teamwork − Commercial investments, which enhanced customer service and expanded market penetration, contributed to mid-single-digit volume growth this year • Completed transition to state-of-the-art brass foundry − Expect to continue to achieve remaining y/y gross margin benefit from the closure of legacy foundry in first half of 2026, while unlocking significant multi-year opportunities for volume and margin expansion as we scale production and drive efficiencies at the new foundry • Strengthened foundation to achieve greater productivity across our facilities and lowest TRIR (Total Recordable Incident Rate) in history − Elevating operational standards, delivering outstanding customer service, optimizing supply chain processes and advancing manufacturing capabilities • Continue to make disciplined investments in commercial and operational capabilities to deliver sustained margin expansion and long-term value creation − Accelerating capital investments to expand capacity and drive efficiencies, including increasing our domestic capabilities, and increasing capital expenditures to 4% to 5% of net sales over next 3 years Commercial and Operational Highlights
Slide 6 — Consolidated GAAP Results (Q4 FY2025)
6 $348.2 $380.8 Q4 FY2024 Q4 FY2025 $28.4 $69.6 Q4 FY2024 Q4 FY2025 $63.1 $66.7 Q4 FY2024 Q4 FY2025 $110.9 $140.0 Q4 FY2024 Q4 FY2025 Net Sales ($M) SG&A ($M) % of Net Sales Gross Profit ($M) % of Net Sales Operating Income ($M) % of Net Sales +26.2% y/y +500 bps. +5.7% y/y -60 bps. 36.8% 17.5% 18.1% 8.2% 18.3% +145.1% y/y +1,010 bps. 31.8% Consolidated GAAP Results (Q4 FY2025) +9.4% y/y • Achieved new quarterly record for net sales • 9.4% y/y increase primarily driven by increased volumes and higher pricing across most product lines • Increased net sales at both segments with WFS +8.6% y/y and WMS +10.4% y/y • Increased 500 bps. y/y driven by manufacturing efficiencies, volume growth and favorable price/cost, including expected benefits from pricing actions taken to offset higher tariffs • Achieved new record annual gross margin in FY2025 with 120 bps. y/y increase to 36.1%, which was driven by manufacturing efficiencies and increased volumes, which more than offset the impact from higher tariffs • Increased $3.6M y/y due to higher personnel costs, inflationary pressures and unfavorable foreign currency fluctuations, partially offset by lower amortization expense • Increased $41.2M y/y primarily due to higher gross profit and goodwill impairment in prior year quarter, partially offset by higher strategic reorganization and other charges and SG&A expenses • Q4FY2025 of $69.6M includes $5.6M warranty charge at WMS and $3.7M of strategic reorganization and other charges
Slide 7 — Consolidated Non-GAAP Results (Q4 FY2025) (1)
7 $72.5 $91.8 Q4 FY2024 Q4 FY2025 $56.5 $78.9 Q4 FY2024 Q4 FY2025 Adj. Operating Income ($M) % of Net Sales Adj. Net Income per Diluted Share Adj. EBITDA ($M) % of Net Sales +26.6% y/y +330 bps. +39.6% y/y +450 bps. 16.2% 20.7% 20.8% 24.1% Consolidated Non-GAAP Results (Q4 FY2025) (1) (1) See Appendix for reconciliation of non-GAAP measures to their corresponding GAAP measures. $0.22 $0.38 Q4 FY2024 Q4 FY2025 • Increased $22.4M y/y driven by manufacturing efficiencies, volume growth, lower amortization expense and favorable price/cost, partially offset by higher SG&A expenses • Adj. operating margin increased 450 bps. y/y to 20.7%, setting a new quarterly record • Adj. EBITDA increased $19.3M y/y and adj. EBITDA margin increased 330 bps. y/y to 24.1%, setting new quarterly records for adj. EBITDA and adj. EBITDA margin • Increased FY2025 adj. EBITDA $41.5M y/y to $326.2M with 22.8% margin (+110 bps. y/y), setting new annual records • Increased adj. net income per diluted share by 72.7% y/y to $0.38, setting a new quarterly record • Increased FY2025 adj. net income per diluted share by 36.5% y/y to $1.31, setting a new annual record +72.7% y/y +$0.16
Slide 8 — Water Flow Solutions (WFS) Segment Results (Q4 FY2025)
8 $41.6 $55.1 Q4 FY2024 Q4 FY2025 20.8% 25.3% $51.7 $62.7 Q4 FY2024 Q4 FY2025 Net Sales ($M) Adj. EBITDA ($M) (1) % of Net Sales Adj. Operating Income ($M) (1) % of Net Sales +32.5% y/y +450 bps. Water Flow Solutions (WFS) Segment Results (Q4 FY2025) +21.3% y/y +300 bps. 25.8% 28.8% $200.3 $217.5 Q4 FY2024 Q4 FY2025 • Increased $17.2M y/y driven by volume growth in iron gate and specialty valves, and higher pricing across most product lines • Increased $13.5M y/resulting from benefits from manufacturing efficiencies, volume growth and lower amortization expense, which more than offset higher SG&A expenses • Generated $210.1M of adj. operating income in FY2025 with 25.5% adj. operating income margin (+180 bps. y/y) • Increased $11.0M y/y due to manufacturing efficiencies and volume growth, which more than offset higher SG&A expenses • Achieved $236.7M of adj. EBITDA in FY2025 with 28.7% adj. EBITDA margin, which was similar to the prior year +8.6% y/y (1) See Appendix for reconciliation of non-GAAP measures to their corresponding GAAP measures.
Slide 9 — Water Management Solutions (WMS) Segment Results (Q4 FY2025)
9 $36.7 $45.0 Q4 FY2024 Q4 FY2025 $29.8 $39.8 Q4 FY2024 Q4 FY2025 $147.9 $163.3 Q4 FY2024 Q4 FY2025 +33.6% y/y +430 bps. +10.4% y/y +22.6% y/y +280 bps. Net Sales ($M) Adj. EBITDA ($M) (1) % of Net Sales Adj. Operating Income ($M) (1) % of Net Sales 24.4% 20.1% 24.8% 27.6% • Increased $15.4M y/y driven by volume growth of hydrants and repair products, as well as higher pricing • Increased $10.0M y/y reflecting benefits from manufacturing efficiencies, favorable price/cost, volume growth and lower amortization expense, which more than offset higher SG&A expenses • Generated $129.1M of adj. operating income in FY2025 with 21.3% adj. operating income margin (+330 bps. y/y) • Increased $8.3M y/y due to manufacturing efficiencies, favorable price/cost and volume growth, partially offset by higher SG&A expenses • Achieved $149.3M of adj. EBITDA in FY2025 with 24.7% adj. EBITDA margin (+170 bps. y/y) • Set new fourth quarter and annual records for adj. EBITDA and adj. EBITDA margin Water Management Solutions (WMS) Segment Results (Q4 FY2025) (1) See Appendix for reconciliation of non-GAAP measures to their corresponding GAAP measures.
Slide 10 — Free Cash Flow (FY2025)
10 Free Cash Flow (FY2025) • Generated $219.3M of net cash provided by operating activities in FY2025, $19.5M below prior year − Decrease primarily driven by changes in working capital, including decreases in other current liabilities, partially offset by higher net income compared with the prior year • Invested $47.3M in capital expenditures in FY2025, similar to the prior year • Generated $172.0M of free cash flow in FY2025 at 84% of adj. net income, which exceeded expectations (1) See Appendix for reconciliation of non-GAAP measures to their corresponding GAAP measures. ($54.7) ($47.6) ($47.4) ($47.3) $52.3 $109.0 $238.8 $219.3 ($2.4) $61.4 $191.4 $172.0 FY2022 FY2023 FY2024 FY2025 $ in Millions Cash provided by operating activities Capital expenditures Free cash flow
Slide 11 — Strong Balance Sheet and Liquidity
11 Credit Rating Debt Structure Debt Maturities Financial Covenants • $450M of 4.0% Senior Notes (mature June 2029) • Asset based lending agreement (“ABL”) provides up to $175M revolving credit facility subject to borrowing base (SOFR + 10 bps. + 150 to 175 bps.) with none outstanding (matures March 2029) • No financial maintenance covenants on 4.0% Senior Notes • ABL not subject to any financial maintenance covenants unless excess availability is less than the greater of $17.5M and 10% of the Loan Cap; consolidated Fixed Charge Ratio permitted to be <1x unless threshold is triggered Net Debt Leverage & Liquidity • $20.1M net debt with total debt of $451.6M and total cash of $431.5M as of September 30, 2025 (1) • Net debt leverage at 0.1x as of September 30, 2025 • No debt financing repayments prior to June 2029 • $595.2M of total liquidity, including $163.7M of availability under the ABL as of September 30, 2025 (1) 4.0% Senior Notes include $2.5M of deferred financing costs. $0 $0 $0 $0 $450 $0 $100 $200 $300 $400 $500 FY2025 FY2026 FY2027 FY2028 FY2029 FYE $ in millions No debt financing repayments prior to June 2029 Ample capacity, liquidity and flexibility to support our strategic priorities, including acquisitions • Moody’s: Ba1 Corporate and Notes Ratings, Stable Outlook • S&P: BB Corporate and Notes Ratings, Positive Outlook Strong Balance Sheet and Liquidity
Slide 12 — FY2026 Outlook (1)
12 FY2026 Outlook (1) • Net sales expected to be between $1,450M and $1,470M (+1.4% to +2.8% y/y) − Expect seasonality to be normalized with quarterly consolidated net Sales highest in Q3 and lowest in Q1 with a sequential increase in consolidated net Sales in Q2 as the construction season begins to ramp up for the Spring − Includes expected benefit from price actions in FY2025 • Adjusted EBITDA expected to be between $345M and $350M (+5.8% to +7.1% y/y) − Achieves 23.8% adj. EBITDA margin, at the midpoint of the range, reflecting 100 bps. y/y improvement − Expect second half FY2026 Adj. EBITDA margin to be higher than the first half, primarily driven by the seasonality of net sales − Estimate for annualized tariff impact at approximately 3% of cost of sales* • Free cash flow expected to be >85% of adjusted net income − Included increase in annual capital expenditures to $60M to $65M, as we invest in growth, operational efficiencies and domestic capacity with a focus on our iron foundries (1) Provided with Q4FY25 earnings on November 6, 2025. (2) Pension expense other than service expected to be a $0.1M expense to adj. EBITDA in FY2026 vs. $0.2M benefit in FY2025. (3) Total SG&A expenses for FY2026 assume no impact from foreign currency fluctuations which were a $7.1M year-over-year unfavorable impact in FY2025. Fiscal 2026 Metrics (1) Consolidated Net Sales (y/y Growth) $1,450M to $1,470M (+1.4% to +2.8%) Adjusted EBITDA (2) (y/y Growth) $345M to $350M (+5.8% to +7.3%) Total SG&A Expenses (3) $243M to $247M Net Interest Expense $6M to $7M Effective Income Tax Rate 25% to 27% Depreciation and Amortization (3) $47M to $49M Capital Expenditures $60M to $65M Free Cash Flow % of Adjusted Net Income >85% * NOTE: Estimated tariff exposure as of November 6, 2025.
Slide 13 — Strategic Priorities to Drive Growth and Margin Improvement Supported
13 Strategic Priorities to Drive Growth and Margin Improvement Supported by Purpose-driven Organization STRATEGIC PRIORITIES CONNECTING COMMUNITIES TO WATER, LIFE’S MOST ESSENTIAL RESOURCE, WITH EXCEPTIONAL PEOPLE, SOLUTIONS AND PRODUCTS IMPROVE OPERATIONAL EXCELLENCE AND EXPAND CAPABILITIES ACCELERATE SALES GROWTH THROUGH CUSTOMER EXPERIENCE AND INNOVATION FOSTER CULTURE THROUGH PURPOSE, COLLABORATION, INCLUSION AND EFFECTIVENESS INCREASE MARGINS AND FREE CASH FLOW TO SUPPORT FUTURE INVESTMENTS AND GROWTH PURPOSE CORE VALUES EXECUTE DIGITAL TRANSFORMATION TO DRIVE RESULTS RESPECT SAFETY TRUST INCLUSION INTEGRITY
Slide 14 — Q&A
Q&A
Slide 15 — Supplemental
Supplemental Data
Slide 16 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
16 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $5.6 million in connection with warranty obligations in Water Management Solutions. (2) Strategic reorganization and other charges primarily relate to certain transaction-related expenses, severance, and expenses associated with our leadership transition. (3) The income tax expense of adjusting items reflects an effective tax rate of 23.4%, and may be subject to rounding. Quarter ended September 30, 2025 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 217.5 $ 163.3 $ — $ 380.8 Gross profit (1) $ 80.4 $ 59.6 $ — $ 140.0 Selling, general and administrative expenses 25.3 25.4 16.0 66.7 Strategic reorganization and other charges (2) — 0.1 3.6 3.7 Operating income (loss) $ 55.1 $ 34.1 $ (19.6) $ 69.6 Operating margin 25.3 % 20.9 % 18.3 % Capital expenditures $ 8.3 $ 6.2 $ — $ 14.5 Net income $ 52.6 Net income margin 13.8 % Reconciliation of non-GAAP to GAAP performance measures: Net income $ 52.6 Warranty charge (1) 5.6 Strategic reorganization and other charges (2) 3.7 Income tax expense of adjusting items (3) (2.2) Adjusted net income $ 59.7 Weighted average diluted shares outstanding 157.4 Net income per diluted share $ 0.33 Warranty charge per diluted share 0.04 Strategic reorganization and other charges per diluted share 0.02 Income tax expense of adjusting items per diluted share (0.01) Adjusted net income per diluted share $ 0.38
Slide 17 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
17 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $5.6 million in connection with warranty obligations in Water Management Solutions. (2) Strategic reorganization and other charges primarily relate to certain transaction-related expenses, severance, and expenses associated with our leadership transition. (3) The income tax expense of adjusting items reflects an effective tax rate of 23.4%, and may be subject to rounding. (4) The Company does not allocate interest, income taxes or pension benefit other than service to its segments. Quarter ended September 30, 2025 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 52.6 Income tax expense (4) 16.1 Interest expense, net (4) 1.0 Pension benefit other than service (4) (0.1) Operating income (loss) $ 55.1 $ 34.1 $ (19.6) 69.6 Warranty charge (1) — 5.6 — 5.6 Strategic reorganization and other charges (2) — 0.1 3.6 3.7 Adjusted operating income (loss) 55.1 39.8 (16.0) 78.9 Pension benefit other than service (4) — — 0.1 0.1 Depreciation and amortization 7.6 5.2 — 12.8 Adjusted EBITDA $ 62.7 $ 45.0 $ (15.9) $ 91.8 Adjusted operating margin 25.3 % 24.4 % 20.7 % Adjusted EBITDA margin 28.8 % 27.6 % 24.1 % Reconciliation of free cash flow to net cash provided by operating activities: Net cash provided by operating activities $ 83.5 Less capital expenditures 14.5 Free cash flow $ 69.0
Slide 18 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
18 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $8.7 million in connection with warranty obligations in Water Management Solutions. (2) Strategic reorganization and other charges primarily relate to expenses associated with our leadership transition and non-cash asset impairment. (3) The income tax expense of adjusting items reflects an effective tax rate of 35.4%, excludes goodwill impairment, and may be subject to rounding. Quarter ended September 30, 2024 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 200.3 $ 147.9 $ — $ 348.2 Gross profit (1) $ 66.2 $ 44.7 $ — $ 110.9 Selling, general and administrative expenses 24.6 23.6 14.9 63.1 Strategic reorganization and other charges (2) — 0.4 2.7 3.1 Goodwill impairment — 16.3 — 16.3 Operating income (loss) $ 41.6 $ 4.4 $ (17.6) $ 28.4 Operating margin 20.8 % 3.0 % 8.2 % Capital expenditures $ 15.0 $ 4.4 $ — $ 19.4 Net income $ 10.0 Net income margin 2.9 % Reconciliation of non-GAAP to GAAP performance measures: Net income $ 10.0 Warranty charge (1) 8.7 Strategic reorganization and other charges (2) 3.1 Goodwill impairment 16.3 Income tax expense of adjusting items (3) (4.2) Adjusted net income $ 33.9 Weighted average diluted shares outstanding 157.5 Net income per diluted share $ 0.06 Warranty charge per diluted share (1) 0.06 Strategic reorganization and other charges per diluted share (2) 0.02 Goodwill impairment per diluted share 0.10 Income tax expense of adjusting items per diluted share (3) (0.02) Adjusted net income per diluted share $ 0.22
Slide 19 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
19 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $8.7 million in connection with warranty obligations in Water Management Solutions. (2) Strategic reorganization and other charges primarily relate to expenses associated with our leadership transition and non-cash asset impairment. (3) The income tax expense of adjusting items reflects an effective tax rate of 35.4%, excludes goodwill impairment, and may be subject to rounding. (4) The Company does not allocate interest, income taxes or pension expense other than service to its segments. Quarter ended September 30, 2024 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 10.0 Income tax expense (4) 14.4 Interest expense, net (4) 3.0 Pension expense other than service (4) 1.0 Operating income (loss) $ 41.6 $ 4.4 $ (17.6) 28.4 Warranty charge (1) — 8.7 — 8.7 Strategic reorganization and other charges (2) — 0.4 2.7 3.1 Goodwill impairment — 16.3 — 16.3 Adjusted operating income (loss) 41.6 29.8 (14.9) 56.5 Pension expense other than service (4) — — (1.0) (1.0) Depreciation and amortization 10.1 6.9 — 17.0 Adjusted EBITDA $ 51.7 $ 36.7 $ (15.9) $ 72.5 Adjusted operating margin 20.8 % 20.1 % 16.2 % Adjusted EBITDA margin 25.8 % 24.8 % 20.8 % Reconciliation of free cash flow to net cash provided by operating activities: Net cash provided by operating activities $ 89.3 Less capital expenditures 19.4 Free cash flow $ 69.9
Slide 20 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
20 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $5.6 million in connection with warranty obligations in Water Management Solutions and $4.1 million in Inventory and other asset write-downs associated with the closure of our legacy brass foundry in Decatur, Illinois. (2) Strategic reorganization and other charges primarily relate to expenses associated with our leadership transition, certain transaction-related expenses, severance, and non-cash asset impairment. (3) The income tax expense of adjusting items reflects an effective tax rate of 24.6%, and may be subject to rounding. Year ended September 30, 2025 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 824.9 $ 604.8 $ — $ 1,429.7 Gross profit (1) $ 296.3 $ 220.4 $ — $ 516.7 Selling, general and administrative expenses 90.3 96.9 60.1 247.3 Strategic reorganization and other charges (2) 1.0 0.7 7.1 8.8 Operating income (loss) $ 205.0 $ 122.8 $ (67.2) $ 260.6 Operating margin 24.9 % 20.3 % 18.2 % Capital expenditures $ 24.1 $ 23.2 $ — $ 47.3 Net income $ 191.7 Net income margin 13.4 % Reconciliation of non-GAAP to GAAP performance measures: Net income $ 191.7 Warranty charge (1) 5.6 Strategic reorganization and other charges (2) 8.8 Inventory and other asset restructuring write-down 4.1 Income tax expense of adjusting items (3) (4.6) Adjusted net income $ 205.6 Weighted average diluted shares outstanding 157.5 Net income per diluted share $ 1.22 Warranty charge per diluted share (1) 0.04 Strategic reorganization and other charges per diluted share (2) 0.06 Inventory and other asset restructuring write-down per diluted share 0.03 Income tax expense of adjusting items per diluted share (3) (0.04) Adjusted net income per diluted share $ 1.31
Slide 21 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
21 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $5.6 million in connection with warranty obligations in Water Management Solutions and $4.1 million in Inventory and other asset write-downs associated with the closure of our legacy brass foundry in Decatur, Illinois. (2) Strategic reorganization and other charges primarily relate to expenses associated with our leadership transition, certain transaction-related expenses, severance, and non-cash asset impairment. (3) The income tax expense of adjusting items reflects an effective tax rate of 24.6%, and may be subject to rounding. (4) The Company does not allocate interest, income taxes or pension benefit other than service to its segments. Year ended September 30, 2025 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 191.7 Income tax expense (4) 62.5 Interest expense, net (4) 6.6 Pension benefit other than service (4) (0.2) Operating income (loss) $ 205.0 $ 122.8 $ (67.2) 260.6 Warranty charge (1) — 5.6 — 5.6 Strategic reorganization and other charges (2) 1.0 0.7 7.1 8.8 Inventory and other asset restructuring write-down 4.1 — — 4.1 Adjusted operating income (loss) 210.1 129.1 (60.1) 279.1 Pension benefit other than service (4) — — 0.2 0.2 Depreciation and amortization 26.6 20.2 0.1 46.9 Adjusted EBITDA $ 236.7 $ 149.3 $ (59.8) $ 326.2 Adjusted operating margin 25.5 % 21.3 % 19.5 % Adjusted EBITDA margin 28.7 % 24.7 % 22.8 % Reconciliation of net debt to total debt (end of period): Current portion of long-term debt $ 1.2 Long-term debt 450.4 Total debt $ 451.6 Less cash and cash equivalents 431.5 Net debt $ 20.1 Debt leverage (debt divided by trailing twelve months’ adjusted EBITDA) 1.4x Net debt leverage (net debt divided by trailing twelve months’ adjusted EBITDA) 0.1x Reconciliation of free cash flow to net cash provided by operating activities: Net cash provided by operating activities $ 219.3 Less capital expenditures 47.3 Free cash flow $ 172.0
Slide 22 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
22 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $8.7 million in connection with warranty obligations in Water Management Solutions. (2) Strategic reorganization and other charges primarily relate to expenses associated with our leadership transition, certain transaction-related expenses, non-cash asset impairment, cybersecurity incidents expense and severance. (3) The income tax expense of adjusting items reflects an effective tax rate of 26.4%, excludes goodwill impairment, and may be subject to rounding. Year ended September 30, 2024 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 755.5 $ 559.2 $ — $ 1,314.7 Gross profit (1) $ 271.9 $ 187.1 $ — $ 459.0 Selling, general and administrative expenses 92.5 95.0 57.7 245.2 Strategic reorganization and other charges (2) 0.2 1.8 13.8 15.8 Goodwill impairment — 16.3 — 16.3 Operating income (loss) $ 179.2 $ 74.0 $ (71.5) $ 181.7 Operating margin 23.7 % 13.2 % 13.8 % Capital expenditures $ 31.1 $ 16.3 $ — $ 47.4 Net income $ 115.9 Net income margin 8.8 % Reconciliation of non-GAAP to GAAP performance measures: Net income $ 115.9 Warranty charge (1) 8.7 Strategic reorganization and other charges (2) 15.8 Goodwill impairment 16.3 Income tax expense of adjusting items (3) (6.5) Adjusted net income $ 150.2 Weighted average diluted shares outstanding 156.9 Net income per diluted share $ 0.74 Warranty charge per diluted share (1) 0.06 Strategic reorganization and other charges per diluted share (2) 0.10 Goodwill impairment per diluted share 0.10 Income tax expense of adjusting items per diluted share (3) (0.04) Adjusted net income per diluted share $ 0.96
Slide 23 — Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
23 Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) (1) Gross profit includes a charge of $8.7 million in connection with warranty obligations in Water Management Solutions. (2) Strategic reorganization and other charges primarily relate to expenses associated with our leadership transition, certain transaction-related expenses, non-cash asset impairment, cybersecurity incidents expense and severance. (3) The income tax expense of adjusting items reflects an effective tax rate of 26.4%, excludes goodwill impairment, and may be subject to rounding. (4) The Company does not allocate interest, income taxes or pension expense other than service to its segments. Year ended September 30, 2024 Water Flow Solutions Water Management Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 115.9 Income tax expense (4) 47.5 Other expense 1.6 Interest expense, net (4) 12.7 Pension expense other than service (4) 4.0 Operating income (loss) $ 179.2 $ 74.0 $ (71.5) 181.7 Warranty charge (1) — 8.7 — 8.7 Strategic reorganization and other charges (2) 0.2 1.8 13.8 15.8 Goodwill impairment — 16.3 — 16.3 Adjusted operating income (loss) 179.4 100.8 (57.7) 222.5 Pension expense other than service (4) — — (4.0) (4.0) Depreciation and amortization 38.3 27.7 0.2 66.2 Adjusted EBITDA $ 217.7 $ 128.5 $ (61.5) $ 284.7 Adjusted operating margin 23.7 % 18.0 % 16.9 % Adjusted EBITDA margin 28.8 % 23.0 % 21.7 % Reconciliation of net debt to total debt (end of period): Current portion of long-term debt $ 0.8 Long-term debt 448.7 Total debt 449.5 Less cash and cash equivalents 309.9 Net debt $ 139.6 Debt leverage (debt divided by trailing twelve months’ adjusted EBITDA) 1.6x Net debt leverage (net debt divided by trailing twelve months’ adjusted EBITDA) 0.5x Reconciliation of free cash flow to net cash provided by operating activities: Net cash provided by operating activities $ 238.8 Less capital expenditures 47.4 Free cash flow $ 191.4