Mueller Water Products, Inc.

Mueller Water Products, Inc. makes equipment used to move, control and monitor water. Its products include valves, hydrants, pipe connections and repair equipment, serving municipalities and other infrastructure customers. The Atlanta-based company trades on the New York Stock Exchange as MWA.

Annual financial record

Free cash flow is operating cash less capital spending. Adjusted EBITDA excludes interest, taxes, depreciation, amortization and selected other costs. Current-year adjustments include reorganization, foundry closure and portfolio costs.

FY2026 sales matched the midpoint of the $1.47 billion to $1.48 billion range given in August. Adjusted EBITDA finished near the top of the earlier $367 million to $372 million forecast. Capital spending was below the earlier $60 million to $65 million expectation.

Free cash flow equaled 84.2% of adjusted net profit, above the August expectation of more than 70%. Higher profit and lower cash taxes supported operating cash; cash taxes paid fell to $48.7 million from $69.1 million. A tax benefit on a foreign-subsidiary investment loss was already disclosed in August.

The closing quarter

Q4 sales were $376.5 million versus $380.8 million a year earlier. Adjusted EBITDA rose to $95.5 million from $91.8 million, and its margin increased to 25.4% from 24.1%. Lower overhead and manufacturing improvements helped offset lower volumes, inflation and tariffs. GAAP net profit was $52.3 million versus $52.6 million; adjusted diluted EPS stayed at $0.38.

Water Flow Solutions produced $210.9 million in sales and $67.1 million in adjusted EBITDA. Water Management Solutions had $165.6 million in sales and $41.2 million in adjusted EBITDA, compared with $163.3 million and $45.0 million a year earlier. Q4 free cash flow rose to $96.7 million from $69.0 million.

Metering exit and customer commitments

In November 2026, Mueller announced signed agreements to transition its metering business to ZENNER USA. Software customers are expected to move to ZENNER. Mueller retains existing hardware contracts and warranty obligations, which it expects to meet using inventory or ZENNER products.

Expected one-time pretax charges are approximately $26 million, mostly in Q1 FY2027. They include warranties, operating and customer-service costs, transaction costs, severance and asset write-offs. The cash portion has not yet been estimated. Transition should be substantially complete in fiscal 2027, with some activity potentially continuing later.

The company expects an annualized 1.0 to 1.4 percentage-point adjusted EBITDA margin benefit, mainly beginning in Q2 FY2027.

FY2027 expectations

Fiscal 2027 runs from October 1, 2026, through September 30, 2027. Guidance excludes all metering-related financial results, compared with approximately $40 million of metering sales in FY2026.

The 26.3% midpoint margin compares with 25.2% in FY2026. Management describes the improvement as about 1.1 percentage points, or 1.5 points after removing the prior year's approximately $6 million tariff-refund benefit. That refund came in Q3 FY2026, before the latest quarter.

Pricing, manufacturing and overhead improvements also support the plan. Price assumptions include increases not yet announced. The company's flat-volume midpoint assumption excludes the headwind from last year's hydrant-backlog benefit. It expects sales and margins to be stronger in the second half, with Q1 margin below Q2.

Liquidity and capital returns

At September 30, cash was $566.0 million and total debt carrying value was $453.8 million, including applicable finance-lease obligations. Available borrowing under the undrawn asset-based facility was $164.7 million, bringing cash plus availability to $730.7 million.

The $450 million senior notes carry a 4% coupon and mature in June 2029. The asset-based credit commitment expires in March 2029, with an earlier March date if those notes remain outstanding.

On October 22, Mueller added $300 million to its share-repurchase authority, taking the total to $334.5 million. It also raised the quarterly dividend to $0.08 a share, payable November 19 to November 9 record holders. FY2026 dividends and share repurchases totaled $74.3 million.