Mueller Water Products Inc (MWA) 2025 Q1 法說會逐字稿

Good morning everyone. Thank you for joining us on Mueller Water Products. First quarter conference call. Yesterday afternoon, we issued our press release, reporting results of operations for the quarter ended December 31st 2024. A copy of the press release is available on our website muellerwaterproducts.com. I'm joined this morning by Martie Zakas, our Chief Executive Officer, Paul McAndrew, our President and Chief Operating Officer and Steve Heinrichs, our Chief Financial Officer and Chief Legal Officer.

大家早安。感謝您關注 Mueller Water Products。第一季電話會議。昨天下午，我們發布了新聞稿，報告了截至 2024 年 12 月 31 日的季度經營業績。新聞稿的副本可在我們的網站 muellerwaterproducts.com 上找到。今天早上與我一起參加會議的還有我們的執行長 Martie Zakas、我們的總裁兼營運長 Paul McAndrew 以及我們的財務長兼首席法律長 Steve Heinrichs。

Following our prepared remarks. We will address questions related to the information covered on the call. As a reminder, please keep to one question and a follow up and then return to the queue. This morning's call is being recorded and webcast live on the internet. We have also posted slides on our website to accompany today's discussion.

以下是我們準備好的發言。我們將解答與通話中涉及的資訊相關的問題。提醒一下，請只提出一個問題並跟進，然後返回佇列。今天早上的電話會議正在錄音並在網路上直播。我們也在我們的網站上發布了幻燈片來配合今天的討論。

They also address forward-looking statements and our non-GAAP disclosure requirements at this time. Please refer to slide 2. This slide identifies non-GAAP financial measures referenced in our press release on our slides and on this call. It discloses the reasons why we believe that these measures provide useful information to investors, reconciliations between Non-GAAP and GAAP Financial measures are included in the supplemental information within our press release and on our website.

它們還涉及前瞻性陳述和我們目前的非 GAAP 披露要求。請參閱投影片 2。本投影片列出了我們幻燈片新聞稿和本次電話會議中引用的非 GAAP 財務指標。它揭露了我們認為這些指標為投資者提供有用資訊的原因，非公認會計準則和公認會計準則財務指標之間的對帳包含在我們的新聞稿和網站上的補充資訊中。

Slide 3, addresses forward-looking statements made on this call. This slide includes cautionary information, identifying important factors that could cause actual results to differ materially from those included in forward-looking statements. Please review Slides 2 and 3 in their entirety.

投影片 3 討論了本次電話會議中所做的前瞻性陳述。本投影片包含警告訊息，指出了可能導致實際結果與前瞻性陳述中的結果有重大差異的重要因素。請完整查看投影片 2 和 3。

During this call all references to a specific year or quarter unless specified otherwise refer to our fiscal year which ends the 30 September. A replay of this morning's call will be available for 30 days at 18665111891. The archive webcast and corresponding slides will be available for at least 90 days on the investor relations section of our website. I'll now turn the call over to Marty.

在本次電話會議中，所有對特定年份或季度的提及，除非另有說明，均指截至 9 月 30 日的財政年度。今早電話會議的重播可在 18665111891 上收聽 30 天。存檔網路廣播和相應的幻燈片將在我們網站的投資者關係部分提供至少 90 天。我現在將電話轉給馬蒂。

Thanks Whit. Good morning everyone. Thank you for joining our quarterly earnings call. I'll start with a brief overview of our first quarter performance. We are very pleased with our strong start to the year. We achieved record first quarter results for adjusted EBITDA and adjusted net income per diluted share.

謝謝 Whit。大家早安。感謝您參加我們的季度財報電話會議。我將先簡要介紹我們第一季的業績。我們對今年的良好開局感到非常高興。我們第一季的調整後 EBITDA 和調整後每股攤薄淨利潤均創下了歷史新高。

Our net sales growth of 18.7% exceeded expectations as we experienced healthy order levels supported by resilient and market demand and our focus on delivering outstanding customer service. Our disciplined execution higher volumes led to a record first quarter adjusted EBITDA and a 340 basis points year over year improvement in our adjusted EBITDA margin.

我們的淨銷售額成長 18.7%，超出了預期，因為我們在彈性和市場需求的支持下獲得了健康的訂單水平，並且我們專注於提供卓越的客戶服務。我們嚴格的執行和更高的交易量使得第一季調整後 EBITDA 創下歷史新高，調整後 EBITDA 利潤率較上年同期提高了 340 個基點。

We achieved a record first quarter adjusted net income per diluted share of $0.25, an increase of 92% compared to the prior year. We generated $42 million of free cash flow in the quarter after allocating $12 million towards capital expenditures.

我們第一季調整後每股攤薄淨利潤達到創紀錄的 0.25 美元，比上年增長 92%。在分配 1,200 萬美元用於資本支出後，我們在本季產生了 4,200 萬美元的自由現金流。

These results were due to great execution from our teams as we lapped an abnormally strong first quarter of free cash flow generation last year. We are increasing our guidance for 2025 net sales and adjusted EBITDA primarily to reflect our strong first quarter results and benefits from recent price actions.

這些結果歸功於我們團隊的出色執行，因為我們去年第一季的自由現金流產生了異常強勁的勢頭。我們上調了 2025 年淨銷售額和調整後 EBITDA 的預期，主要是為了反映我們強勁的第一季業績和近期價格走勢帶來的好處。

Our guidance delivers gross and adjusted EBITDA margin gains this year supported by our operational and commercial initiatives including the anticipated benefits from the recent closure of our legacy Brass boundary. Our updated guidance does not include any potential cost increases or impacts associated with the recently announced tariffs.

我們的預期是，今年的毛利率和調整後 EBITDA 利潤率將實現成長，這得益於我們的營運和商業舉措，包括最近關閉我們原有的黃銅邊界所帶來的預期收益。我們更新後的指引不包括與最近宣布的關稅相關的任何潛在成本增加或影響。

Our latest price actions were communicated prior to the recently announced tariffs as a reminder, more than 90% of our annual sales are in the US and we are largely vertically integrated from many of our major product categories. We believe the proposed new tariffs would be a headwind that we could manage through with a combination of price actions and efficiencies as needed with our teams continuing to execute at a high level including delivering benefits from our manufacturing and supply chain efficiencies.

我們最新的價格行動是在最近宣布的關稅之前傳達的，提醒一下，我們每年 90% 以上的銷售額來自美國，而且我們許多主要產品類別基本上都是垂直整合的。我們認為，擬議的新關稅將是一個阻力，我們可以根據需要透過價格行動和效率相結合的方式來應對，我們的團隊將繼續高水準執行，包括從我們的製造和供應鏈效率中獲益。

I am confident that we can execute our key strategies while managing external challenges. I am excited that our new CFO Melissa Rasmussen will join Mueller early next month after a comprehensive search, we are confident that she will help deliver long term value to shareholders. As a reminder upon Melissa's arrival, Steve will transition to a consulting role through the end of fiscal 2025 to help ensure a smooth transition.

我相信，我們能夠在應對外部挑戰的同時執行我們的關鍵策略。我很高興我們的新任財務長梅麗莎·拉斯穆森 (Melissa Rasmussen) 將在經過全面搜尋後於下個月初加入穆勒，我們相信她將幫助為股東帶來長期價值。提醒一下，在梅麗莎到來後，史蒂夫將在 2025 財年結束前轉任顧問職位，以確保順利過渡。

Since this is Steve's last earnings call. I want to take the time to thank him for his tremendous contributions over the years. He has provided strong leadership and counsel throughout his tenure, we all wish him the best in his future endeavors with that. I'll now turn it over to Paul to address some of our commercial and operational insights.

因為這是史蒂夫最後一次召開財報電話會議。我想藉此機會感謝他多年來的巨大貢獻。在他的整個任期內，他提供了強有力的領導和建議，我們都祝福他在未來的工作中一切順利。現在我將把主題交給保羅，讓他談談我們的一些商業和營運見解。

Thanks Marty. Good morning, everyone. It's great to be with you. I'm excited about how we started the year. Order levels exceeded our expectations mainly for our short cycle, iron gate valves and hydrants with normalized lead times. The strong execution of our commercial and operations teams enabled us to do a great job fulfilling these orders during the quarter.

謝謝馬蒂。大家早安。很高興和你在一起。我對我們新的一年的開始感到很興奮。訂單量超出了我們的預期，主要是因為我們的短週期、鐵閘閥和消防栓具有正常交貨時間。我們的商業和營運團隊的強大執行力使我們能夠在本季度出色地完成這些訂單。

We achieved an exciting milestone at the end of the first quarter when we ceased melting and casting operations at our legacy Brass Foundry and transitioned production to our state of the art foundry. Our teams are working to decommission the foundry site which drove the inventory and other write downs at water flow solutions.

當我們停止傳統黃銅鑄造廠的熔煉和鑄造業務並將生產轉移到我們最先進的鑄造廠時，我們在第一季末實現了一個令人興奮的里程碑。我們的團隊正在努力關閉導致水流解決方案庫存和其他減記的鑄造廠。

In the first quarter, we continue to expect the closure of the legacy foundry to generate an 80 to 100 basis point analyzed improvement in our gross margin starting in the second half of 2025. Thanks to our team's great execution. We largely work through our elevated backlog of service brass products in the first quarter with normalized lead times for these products going forward. We anticipate that we experience year over year volume headwinds over the next few quarters as channel and customer inventory levels normalize.

在第一季度，我們繼續預計傳統代工廠的關閉將從 2025 年下半年開始為我們的毛利率帶來 80 到 100 個基點的改善。感謝我們團隊的出色執行力。我們在第一季基本上解決了大量積壓的服務黃銅產品問題，並將這些產品的交貨時間標準化。我們預計，隨著通路和客戶庫存水準恢復正常，未來幾季我們的銷售量將比去年同期遭遇阻力。

We remain excited about the multiyear volume and margin expansion opportunity in front of us as we ramp up our capabilities and efficiencies at the new foundry. As expected. During the first quarter, we continued to experience headwinds for our Krausz repair products relative to the prior year quarter. As a result of the Israel Hamas war, our team's focus on improving our supply chain partnerships and ramping up production levels has helped us to decrease our lead times and we are beginning to reduce elevated backlog levels.

隨著我們提升新鑄造廠的能力和效率，我們對眼前的多年產量和利潤擴張機會仍然感到興奮。正如預期的那樣。在第一季度，與去年同期相比，我們的 Krausz 修復產品持續遭遇阻力。由於以色列哈馬斯戰爭，我們的團隊專注於改善我們的供應鏈合作夥伴關係和提高生產水平，這幫助我們縮短了交貨時間，我們開始減少積壓訂單量。

With our customers and employees as our main priorities, we expect to continue to experience margin headwinds throughout the year as we reduce backlog through increased production with a focus on delivering outstanding customer service. Our teams are improving operational excellence, increasing supply chain efficiencies and developing advanced manufacturing capabilities to drive productivity across our facilities.

我們將客戶和員工視為首要任務，透過增加產量來減少積壓訂單並專注於提供卓越的客戶服務，我們預計全年利潤率將繼續面臨阻力。我們的團隊正在提高卓越營運水準、提升供應鏈效率並開發先進的製造能力，以提高整個工廠的生產力。

We are poised to benefit from disciplined investments in our commercial and operations capabilities along with the closure of the legacy Brass Foundry. For 2025, our increased expectations imply more than a 200 basis point year over year improvement in gross margin at the midpoint of our annual guidance. With that, I'll turn it over to Steve so he can take you through the financials.

隨著傳統黃銅鑄造廠的關閉，我們將從對商業和營運能力的嚴格投資中獲益。對於 2025 年，我們提高的預期意味著毛利率將比我們年度指導中位數提高 200 個基點以上。說完這些，我會把話題交給史蒂夫，讓他帶你了解財務狀況。

Thanks Paul and good morning, everyone for the first quarter, consolidated net sales increased 18.7% to $304.3 million compared with the prior year. This increase was primarily due to higher volumes mainly for iron gate valves, hydrants and specialty valves. As well as higher pricing across most of our product lines. As we've mentioned in previous quarters, our lead times and backlogs for iron gate 1,000 hydrants have normalized.

謝謝保羅，大家早安，第一季度，綜合淨銷售額與上年相比增長 18.7%，達到 3.043 億美元。這一增長主要歸因於鐵閘閥、消防栓和特殊閥門的銷售增加。我們大多數產品線的定價也提高了。正如我們在前幾個季度提到的，我們的鐵門 1,000 個消防栓的交貨時間和積壓訂單已經正常化。

So year over year volume increases at water flow solutions and water management solutions include the benefit from lapping the channel and customer destocking. In the prior year. The increase in specialty valve volumes benefited from lapping the production challenges we experienced in the prior year. In the first quarter, gross profit of $103 million increased 19.4% compared with the prior year and gross margin of 33.8% increased 10 basis points year over year benefits from higher volumes favorable price/cost and improved manufacturing performance.

因此，水流解決方案和水管理解決方案的產量逐年增加，其中包括了水道搭接和客戶去庫存的好處。在上一年。特種閥門產量的增加得益於我們克服了前一年所遇到的生產挑戰。第一季度，毛利為 1.03 億美元，比上年同期成長 19.4%，毛利率為 33.8%，比去年同期增加 10 個基點，這得益於銷量增加、有利的價格/成本以及製造績效的提高。

More than offset write downs associated with the closure of our legacy Brass Foundry at water flow solutions as well as impacts of the Israel Hamas War on repair products and water management solutions. Excluding $3.3 million in write downs associated with our legacy Brass Foundry closure. Our gross margin was 34.9%, a 120 basis point improvement compared with the prior year for the quarter total SG&A expenses of $53.9 million were $3 million lower than the prior year.

超過抵消了與我們水流解決方案的傳統黃銅鑄造廠關閉相關的減記，以及以色列哈馬斯戰爭對修復產品和水管理解決方案的影響。不包括與我們原有的黃銅鑄造廠關閉相關的 330 萬美元減損。我們的毛利率為 34.9%，比去年同期提高了 120 個基點，本季總銷售、一般及行政開支為 5,390 萬美元，比去年同期降低了 300 萬美元。

This decrease was primarily driven by lower amortization expense and favorable foreign exchange partially offset by inflationary pressures. Higher third party fees and personnel related costs. Operating income increased 107.9% in the quarter to $47.4 million compared with the prior year. Operating income includes $1.7 million of strategic reorganization and other charges primarily related to the leadership transition and severance.

這一下降主要歸因於攤銷費用降低和外匯優惠，但被通膨壓力部分抵消。更高的第三方費用和人員相關成本。本季營業收入較上年同期成長 107.9%，達到 4,740 萬美元。營業收入包括 170 萬美元的策略重組費用以及其他主要與領導階層過渡和遣散費相關的費用。

Additionally, we incurred $3.3 million in inventory and other asset write downs associated with the closure of our legacy Brass Foundry. Both of these items have been excluded from adjusted results. Turning now to our consolidated non-GAAP results for the quarter adjusted operating income in the first quarter was $52.4 million. An increase of 78.2% compared with the prior year.

此外，由於我們原有的黃銅鑄造廠的關閉，我們還產生了 330 萬美元的庫存和其他資產減記。這兩項均已從調整後的結果中排除。現在來看看我們第一季的綜合非 GAAP 業績，調整後的營業收入為 5,240 萬美元。較上年增長78.2%。

The increase was primarily due to higher gross profit and lower total SG&A expenses. Our adjusted operating margin improved 570 basis points to 17.2% compared with the prior year adjusted EBITDA came in at $63.5 million. An increase of 41.7% in the quarter. We achieved an adjusted EBITDA margin of 20.9% in the quarter which was 340 basis points higher than the prior year and slightly better on a sequential basis.

成長的主要原因是毛利增加以及銷售、一般及行政開支總額下降。我們的調整後營業利潤率較上年同期的 6,350 萬美元提高了 570 個基點，達到 17.2%。本季成長41.7%。本季度，我們實現了 20.9% 的調整後 EBITDA 利潤率，比上年高出 340 個基點，且比上一季略有好轉。

These are first quarter record levels for adjusted EBITDA and adjusted EBITDA margin. For the last 12 months adjusted EBITDA was $303.4 million or 22.3% of net sales, a 560 basis point improvement compared with the prior 12 month period, net interest expense in the first quarter declined $1.7 million year over year to $1.6 million. Primarily due to higher interest income.

這是第一季調整後 EBITDA 和調整後 EBITDA 利潤率的記錄水準。過去 12 個月的調整後 EBITDA 為 3.034 億美元，佔淨銷售額的 22.3%，與前 12 個月相比提高了 560 個基點，第一季的淨利息支出年減 170 萬美元至 160 萬美元。主要是由於利息收入增加。

Our effective tax rate increased for the quarter to 22.9% as compared with 15.4% in the prior year. As a reminder, our income tax rate in the prior year benefited from a $1.6 million income tax benefit associated with the exploration of an uncertain tax position. This tax benefit was offset by the release of a $1.6 million indemnification receivable in other expense excluding the tax benefit.

本季我們的有效稅率從去年同期的 15.4% 上升至 22.9%。提醒一下，我們上一年的所得稅率受益於與探索不確定的稅收狀況相關的 160 萬美元的所得稅優惠。該稅收優惠被除稅收優惠外的其他費用中 160 萬美元的應收賠償款抵消。

Our effective tax rate, this quarter was comparable to the prior year quarter for the quarter. We increased adjusted net income per diluted share by 92.3% to $0.25 compared with the prior year. This is a record for our first quarter turning out a quarterly segment performance starting with water flow solutions, net sales increased 23.6% to $174.6 million compared with the prior year, primarily due to higher volumes of iron gate and specialty valves.

本季我們的有效稅率與去年同期相當。與前一年相比，調整後每股攤薄淨利潤成長 92.3%，至 0.25 美元。這是我們第一季創下的季度分部業績記錄，以水流解決方案為首，淨銷售額較上年同期增長 23.6% 至 1.746 億美元，這主要歸功於鐵閘閥和特種閥門的銷量增加。

As well as higher pricing across most product lines with normalized lead times strong net sales growth for iron gate valves have benefited from healthy order levels as well as lapping low orders and shipments in the prior year which were primarily due to channel and customer inventory destocking especially [available] benefited from lapping the production challenges we experienced in the prior year adjusted operating income increased to 40.9% to $38.6 million in the quarter.

除了大多數產品線的定價更高且交貨時間正常化之外，鐵閘閥的淨銷售額強勁增長還受益於健康的訂單水平以及彌補了上年同期的低訂單和出貨量，這主要是由於渠道和客戶庫存去庫存，尤其是[可用]受益於彌補了上年同期遇到的生產挑戰，本季度調整後的營業收入增長 40.9%，達到 3860 萬美元。

The benefits from higher volumes lower amortization and favorable price/cost more than offset higher SG&A expenses and unfavorable manufacturing performance. Manufacturing performance included the inefficiencies associated with operating two brass foundries and prior year benefits associated with serving an elevated backlog for service brass products.

產量增加、攤銷減少和成本價格優惠的好處足以抵銷較高的銷售、一般和行政費用以及不利的製造業績。製造績效包括與營運兩個黃銅鑄造廠相關的效率低下，以及與服務黃銅產品積壓量增加相關的上一年收益。

During the first quarter of last year. Adjusted EBITDA increased 21.8% to $44.7 million and adjusted EBITDA margin was 25.6% compared with 26% in the prior year. Turning to quarterly results for water management solutions. Net sales increased to 12.7% to $129.7 million compared with the prior year. But this increase was primarily due to higher volumes of hydrantsw as well as higher pricing across most product lines.

去年第一季。調整後 EBITDA 成長 21.8% 至 4,470 萬美元，調整後 EBITDA 利潤率為 25.6%，而去年同期為 26%。轉向水管理解決方案的季度業績。淨銷售額較上年同期成長 12.7%，達到 1.297 億美元。但這種成長主要是由於消防栓銷售量增加以及大多數產品線價格上漲。

Similar to iron gate valves. Strong net sales growth for hydrants benefited from normalized lead times and healthy order levels as well as lapping low orders and shipments in the prior year which were primarily due to channel and customer inventory destocking adjusted operating income increased 82.8% to $27.6 million in the quarter due to benefits from higher volumes, favorable manufacturing performance, lower SG&A and a expenses including benefits from amortization and foreign exchange and favorable price/cost which more than offset the impacts of the Israel Hamas war on repair products.

類似鐵閘閥。消防栓淨銷售額強勁增長，得益於正常化的交貨時間和健康的訂單水平，以及彌補了上年同期的低訂單和出貨量，這主要是由於渠道和客戶庫存減少，調整後營業收入在本季度增長 82.8% 至 2,760 萬美元，這得益於銷量增加、製造業績良好、銷售、一般和行政費用降低以及包括攤銷和外匯收益在內的費用以及優惠的價格/成本，這些都足以抵消以色列哈馬斯戰爭對維修產品的影響。

Adjusted EBITDA for the quarter increased 47.5% to $32.6 million with adjusted EBITDA margin. Improving 590 basis points to 25.1%. Moving on to cash flow. Net cash provided by operating activities for the quarter was $54.1 million. A decrease of $13.8 million compared with the prior year period.

本季調整後 EBITDA 成長 47.5% 至 3,260 萬美元，調整後 EBITDA 利潤率。提高590個基點至25.1%。繼續討論現金流。本季經營活動產生的淨現金為 5,410 萬美元。與去年同期相比減少1,380萬美元。

The decrease was primarily driven by changes in working capital including other current liabilities such as incentive compensation, partially offset by higher net income. As a reminder, our payables increased in the first quarter of last year, largely related to delays caused by the cybersecurity incident. We invested $11.9 million in capital expenditures in the first quarter as compared with $5.7 million in the prior year.

下降的主要原因是營運資本的變化，包括激勵薪酬等其他流動負債，但淨收入的增加部分抵消了這一變化。提醒一下，去年第一季我們的應付款項有所增加，這主要與網路安全事件造成的延誤有關。我們第一季的資本支出為 1,190 萬美元，而去年同期為 570 萬美元。

This increase was primarily driven by increased expenditures in our foundries and timing and spending in the prior year. Our free cash flow for the first quarter decreased $20 million to $42.2 million compared with the prior year due to the decrease in net cash provided by operating activities and higher capital expenditures for the first quarter, free cash flow as a percent of adjusted net income was 108%.

這一增長主要歸因於我們代工廠的支出增加以及去年的時間和支出。由於第一季經營活動提供的淨現金減少和資本支出增加，我們第一季的自由現金流與前一年相比減少了 2,000 萬美元至 4,220 萬美元，自由現金流佔調整後淨收入的百分比為 108%。

At the end of the first quarter, our total debt outstanding was $449.5 million and we had cash and cash equivalents of $338.2 million. We continue to have a strong and flexible balance sheet with a net debt leverage ratio below one no debt maturities until June 2029 and $450 million senior notes at a 4% fixed interest rate.

截至第一季末，我們的未償還債務總額為 4.495 億美元，現金和現金等價物為 3.382 億美元。我們繼續擁有強勁且靈活的資產負債表，淨債務槓桿率低於 1，直到 2029 年 6 月沒有債務到期，並以 4% 的固定利率持有 4.5 億美元的優先票據。

We did not have any borrowings under our ABL at quarter end. Nor did we borrow any amounts under our ABL during the quarter. We ended the quarter with a half a billion dollars of total liquidity including $163 million of excess availability under the ABL. I will now review our increased outlook for 2025.

季度末時我們並沒有任何資產負債表項下的借款。本季我們也沒有根據 ABL 借入任何款項。截至本季末，我們的總流動資金為 5 億美元，其中包括 ABL 項下的 1.63 億美元的超額可用資金。現在，我將回顧我們對 2025 年的展望。

We're increasing our guidance for both consolidated net sales and adjusted EBITDA. We now expect consolidated net sales to be between $1.37 billion and $1.39 billion which represents a year over year increase between 4.2% and 5.7%. This guidance takes into account our first quarter performance expected benefits from recent price actions for many of our products and current expectations for end market demand.

我們正在上調合併淨銷售額和調整後 EBITDA 的預期。我們現在預計合併淨銷售額將在 13.7 億美元至 13.9 億美元之間，年增 4.2% 至 5.7%。該指引考慮了我們第一季的業績預期，該預期受益於我們許多產品的近期價格走勢以及對終端市場需求的當前預期。

In addition to raising our net sales expectations, we are increasing our guidance for adjusted EBITDA to reflect our first quarter performance and updated expectations for net sales and total SG&A expenses. We now expect that our adjusted I do will range between $310 million and $315 million. Reflecting year over year growth of 8.9% to 10.6%.

除了提高我們的淨銷售額預期之外，我們還提高了調整後 EBITDA 的指導，以反映我們第一季的業績以及對淨銷售額和總銷售、一般及行政費用 (SG&A) 費用的最新預期。我們現在預計調整後的預期利潤將在 3.1 億美元至 3.15 億美元之間。反映出年增8.9%至10.6%。

This achieves a 22.6% adjusted EBITDA margin for the year at the midpoint of our guidance range, reflecting a 90 basis point year over year improvement. We continue to expect our second half adjusted EBITDA margin to be significantly higher than the first half.

這使得今年的調整後 EBITDA 利潤率達到 22.6%，處於我們指導範圍的中點，較上年同期提高了 90 個基點。我們仍預期下半年調整後的 EBITDA 利潤率將大幅高於上半年。

This is primarily driven by the seasonality of net sales and continuing manufacturing performance improvements including anticipated benefits from the closure of our legacy Brass Foundry along with operational and supply chain efficiencies. We are maintaining our free cash flow expectations to be more than 80% of adjusted net income in 2025.

這主要是受淨銷售額的季節性和持續的製造績效改進所驅動，包括關閉我們的傳統黃銅鑄造廠以及營運和供應鏈效率的預期收益。我們維持自由現金流預期，到 2025 年將達到調整後淨收入的 80% 以上。

This outlook continues to assume our capital expenditures are between $45 million and $50 million for the year. As Martie mentioned, our updated guidance does not include any potential impacts from the recently announced tariffs. While the tariffs may impact our supply chain and increased costs. We would seek to secure alternative sourcing to mitigate costs or increase pricing as necessary. With that. I'll turn it back to Martie for closing comments.

這一前景繼續假設我們今年的資本支出在 4500 萬美元至 5000 萬美元之間。正如 Martie 所提到的，我們更新後的指引不包括最近宣布的關稅的任何潛在影響。雖然關稅可能會影響我們的供應鏈並增加成本。我們將尋求確保替代來源以降低成本或在必要時提高價格。就這樣。我將把主題轉回給 Martie 來做最後的評論。

Thanks, Steve. I want to provide a few closing comments before opening it up for Q&A. Thank you to all our employees around the world for their focused execution to start the year. Their continued dedication and passion for helping our customers and communities is the engine for our future success.

謝謝，史蒂夫。在開始問答環節之前，我想做幾點結束語。感謝我們遍佈全球的所有員工在新年伊始所展現的專注與執行力。他們對幫助我們的客戶和社區的持續奉獻和熱情是我們未來成功的動力。

While we are pleased to be increasing our annual guidance for 2025. We are mindful of the uncertain external environment including potential policy changes. Thanks to our team's disciplined focus on serving our customers and delivering on our key strategic priorities. We are poised to drive net sales growth and future margin improvements beyond 2025.

我們很高興能夠提高 2025 年的年度指導價。我們注意到不確定的外部環境，包括潛在的政策變化。感謝我們團隊專注於服務客戶和實現我們的關鍵策略重點。我們準備在 2025 年後推動淨銷售額成長和未來利潤率提高。

We have positioned ourselves to accelerate sales growth and capture the benefits from favorable long term and market growth, trends through product innovation and service. We believe we can capture the benefits from the investments needed to address the aging North American water infrastructure and the expected incremental spending associated with federal infrastructure bill, particularly with lead service line replacement projects.

我們的定位是，透過產品創新和服務，加速銷售成長，並從有利的長期市場成長趨勢中獲益。我們相信，我們可以從解決北美水利基礎設施老化問題所需的投資以及與聯邦基礎設施法案相關的預期增量支出（特別是鉛服務線更換項目）中獲得收益。

We are continuing to drive operational improvements to deliver the benefits from our capital investments and expand our capabilities. We are increasing collaboration and teamwork throughout the organization to create a culture of talent development, enabling us to execute on our strategic opportunities and make Mueller a preferred place to work.

我們將繼續推動營運改進，以從資本投資中獲得收益並擴展我們的能力。我們正在加強整個組織的協作和團隊合作，以創造人才發展的文化，使我們能夠執行策略機遇，並使 Mueller 成為首選的工作場所。

With these strategies, I am confident that the actions we are taking will further strengthen Mueller for the long term. This concludes our comments. Operator, please open the line for questions.

有了這些策略，我相信我們所採取的行動將進一步加強穆勒的長期影響力。我們的評論到此結束。接線員，請打開電話線以回答問題。

We will now begin the question and answer session. (Operator Instructions). For our first question, I think our first question comes from Joseph Giordano with TD Cowen. Your line is open and may I ask you a question?

我們現在開始問答環節。（操作員指令）。對於我們的第一個問題，我認為我們的第一個問題來自 TD Cowen 的 Joseph Giordano。您的電話已開通，我可以問您一個問題嗎？

Hey Guys, Morning. I'm just curious like, how are you thinking about, well, one, what's the price embedded in the guidance? And then like, how are you thinking about volumes from here? Because the comps get very, very different now that the lead times have normalized and you kind of get past those, those big declines from prior.

大家好，早安。我只是很好奇，你是怎麼考慮的，嗯，第一，指導中嵌入的價格是多少？然後，您如何看待現在的銷售量？因為現在交貨時間已經正常化，並且你可以克服之前的那些大幅下滑，因此競爭對手的情況已經變得非常非常不同了。

Let me start off. So as we look at the guidance that we have given for sales through the balance of 2025 our sales guidance does assume benefits from both volume as well as price as we look at our 2025. We think we'll have normal seasonality and that normal seasonality as a reminder sort of between the construction and the non construction seasons tend to see lowest sales in Q1 sequential increase in Q2 and then higher again Q3 with respect to carryover pricing, which certainly benefited our first quarter as well as the price actions that we just announced.

讓我先開始吧。因此，當我們回顧我們給出的 2025 年銷售平衡預測時，我們的銷售預測確實假設了 2025 年銷售和價格都會帶來的好處。我們認為我們將經歷正常的季節性，正常的季節性提醒我們，在建築季節和非建築季節之間，往往第一季度的銷售額最低，第二季度的連續增長，然後在第三季度的結轉價格方面再次走高，這無疑有利於我們的第一季度以及我們剛剛宣布的價格行動。

We do think that we'll benefit from price realization probably somewhere in the low to mid single digit range in and around volumes. With respect to our guidance. We expect growth from both iron gate valves and hydrants. As we said, we're back to normalized lead times which helps us convert any order level activity into shipments that said we do expect some headwinds as we're lapping a record consolidated sales in second quarter.

我們確實認為，我們將從價格實現中受益，價格可能在成交量低至中等個位數範圍內。關於我們的指導。我們預計鐵閘閥和消防栓的銷量都會成長。正如我們所說，我們已恢復正常化的交貨時間，這有助於我們將任何訂單級別的活動轉化為出貨量，這意味著我們確實預計會遇到一些阻力，因為我們在第二季度創下了創紀錄的綜合銷售額。

Additionally, we benefited from some of the elevated service brass backlog in the prior year and expect that will be a headwind. We think overall as we look at our end markets, looking at residential construction as well as the municipal end market. We think that they they'll be primarily resilient, but I will note that there's a lot of uncertainty in and around the external environment.

此外，我們從上一年增加的服務黃銅積壓中受益，並預計這將是一個阻力。我們從整體上看我們的終端市場，包括住宅建築和市政終端市場。我們認為它們將主要具有彈性，但我要指出的是，外部環境內外存在著許多不確定性。

Certainly with what we see in and around mortgage rates, tariffs, inflation, global tensions, labor availability and any potential policy changes. I think the last comment I want to give you in and around the guidance is just a reminder that in the guidance, we have not assumed any meaningful impact from funding from the infrastructure bill.

當然，我們看到抵押貸款利率、關稅、通貨膨脹、全球緊張局勢、勞動力供應以及任何潛在的政策變化。我認為我在指導中給出的最後一條評論只是提醒您，在指導中，我們並未假設基礎設施法案的資金會產生任何有意義的影響。

Interesting that was going to be my follow up on the infrastructure funding. Like even though that how do you get a read on your customers? Like for projects are, are things moving or there is there fear that like, I don't even know some stuff can be changed.

有趣的是，這將是我對基礎設施融資的後續。儘管如此，您如何了解您的客戶呢？就像專案一樣，事情是否在進展，或者是否存在擔心，我什至不知道有些東西可以改變。

But like the thought of maybe we go in there and we change like we stop funding for, lead pipe removal or we change implementation dates. Is it impacting the timing of you know, breaking ground on certain new projects that your customers?

但一想到我們可能會進入那裡並做出改變，例如我們停止資助拆除鉛管，或者我們改變實施日期。這是否會影響您客戶的某些新專案的開工時間？

Good morning, Joe and Paul, we continue to monitor the infrastructure bill and how many RFPs continue to come through that avenue then? And we do see a trend of increasing of infrastructure bill activity, but it's not that meaningful or material change from the prior quarters that we've discussed.

早安，喬和保羅，我們將繼續關注基礎設施法案，那麼有多少 RFP 會繼續透過這種方式發出？我們確實看到基礎設施法案活動呈現增加趨勢，但與我們討論的前幾季相比，並沒有發生那麼有意義或實質的變化。

I think the positive here is we were we are very well positioned to supply from being a us vertically integrated company and we don't anticipate any changes from the administration and around the infrastructure bill.

我認為積極的一面是，作為一家美國垂直整合公司，我們處於非常有利的供應地位，而且我們預計政府和基礎設施法案不會發生任何變化。

Great. Thanks guys.

偉大的。謝謝大家。

Thank you. Our next question comes from Brian lee with Goldman Sachs. Your line is open. You may ask your question.

謝謝。我們的下一個問題來自高盛的 Brian Lee。您的線路已開通。你可以提出你的問題。

Hey, good morning, everyone. Thanks for taking the questions. Maybe just to follow up on the previous question just you said at the outset Marty that order levels exceeded expectations. Sounds like the outlook obviously appearing to be more robust given the guidance increase. And you know, specifically called out short cycle iron gate valves hydrants.

嘿，大家早安。感謝您回答這些問題。也許只是為了跟進上一個問題，正如您一開始所說，馬蒂，訂單水平超出了預期。鑑於指導值的增加，前景顯然看起來更加強勁。你知道，專門叫短循環鐵閘閥消防栓。

Can you kind of talk about, what you're seeing there in the ordering environment? How much of this is just the inventory cycle playing through how much of this is just, new organic demand, upside to whatever expectations you might have been anticipating coming into the year.

您能否談談您在訂購環境中看到了什麼？這其中有多少只是庫存週期的影響，又有多少只是新的有機需求，以及對今年可能預期的任何預期的上行空間。

Yes. So I think, importantly, and if we look at what have been our excuse me, which are our short cycle products, largely, we'll note that we have been back to normalized delivery patterns with respect or lead times. I should say, with respect to our iron gate valves and hydrants and to dimension that, that really is sort of that turnaround primarily of, I'll say sort of 2 to 4 weeks between orders and shipments.

是的。因此，我認為，重要的是，如果我們看看我們的短週期產品，我們會注意到，我們已經恢復到正常的交貨模式或交貨時間。我應該說，就我們的鐵閘閥和消防栓而言，就其尺寸而言，這實際上是一種主要的周轉時間，我會說訂單和發貨之間大約需要 2 到 4 週的時間。

So we've had that in place for a while looking at the service brass products that we have, which are a short cycle product. We certainly throughout our 2024 we knew we had elevated backlog levels but worked throughout our 2024 to improve the lead times and bring down those backlog levels with respect to our service brass products and have pretty much moved back those backlog levels to being more normalized.

因此，我們已經實施了一段時間，專注於我們擁有的服務黃銅產品，它們是一種短週期產品。當然，在整個 2024 年，我們都知道我們的積壓訂單水平有所提高，但我們在整個 2024 年都致力於縮短交貨時間，降低服務黃銅產品的積壓訂單水平，並且已將這些積壓訂單水平基本恢復到更正常化的狀態。

That said as we look out at our 2025 given that we were servicing orders from our backlog in 2024 we could see that as being an impact for us in 2025. A little bit similar to the impact that we have discussed with you all with respect to iron gate valves and hydrants when we were still working through that piece of it in and around, sort of, overall, I'd say stocking levels from our distributors. I'm going to let Paul step in and comment on that.

這就是說，當我們展望 2025 年時，考慮到我們正在處理 2024 年積壓的訂單，我們可以看到這對我們 2025 年產生了影響。這有點類似於我們與大家討論過的有關鐵閘閥和消防栓的影響，當時我們仍在研究這部分問題，總的來說，我想說的是我們的分銷商的庫存水平。我將讓保羅介入並對此發表評論。

Yeah, just to before I go to that, just to add some color, we took 60 million of service Brass backlog out in the prior year and that's predominantly to get back to the normalized lead times that both our customers and our end customers anticipate where we should be at in terms of channel inventory and stocking levels, we believe they are back to normalized levels, but there may be a short term headwind in terms of lapping from the service. Brass backlog reduction.

是的，在我講這個之前，為了補充一些信息，我們在上一年清理了 6000 萬的服務黃銅積壓訂單，這主要是為了回到正常化的交貨時間，我們的客戶和最終客戶都預計我們應該在渠道庫存和備貨水平方面處於這個水平，我們相信它們已經恢復到正常水平，但在服務方面可能存在短期阻力。減少黃銅積壓。

Okay, great. Super helpful. I appreciate the context. May maybe a quick follow up on, you know, Marty, your comments around pricing. I think you said you're embedding a low single digit to mid single digit pricing in the outlook here. And part of the commentary on, the improved outlook for the full year was on pricing.

好的，太好了。超有幫助。我很欣賞這個背景。馬蒂，也許我可以快速跟進你關於定價的評論。我覺得你說過，你在展望中嵌入了一個低個位數到中等個位數的定價。關於全年前景改善的部分評論是關於定價的。

So if I recall, I think pricing typically you're more in the low single digit range historically, So has something changed in the mix or is there something happening on the pricing strategy or are you just getting, more price realization, I guess heading into this year than, than you might have been anticipating. And historically, I've seen just trying to understand that a little bit better. Thank you.

所以如果我沒記錯的話，我認為從歷史上看，定價通常處於低個位數範圍，那麼組合中是否發生了一些變化，或者定價策略是否發生了一些變化，或者你只是獲得了更多的價格實現，我想今年的價格實現會比你預期的要多。從歷史上看，我只是試著更好地理解這一點。謝謝。

Yes, certainly. So in and around the pricing, I would say that in terms of price realization, I would say no, we are not rejecting anything different from what we have experienced in the past. Now, I'm certainly going to call out the period where we were in the rapidly rising inflation, the very high levels of inflation. Certainly all the challenges in and around, COVID delivery times, et cetera.

是的，當然。因此，在定價方面，我想說，就價格實現而言，我會說不，我們不會拒絕任何與我們過去經歷不同的東西。現在，我當然要指出我們所處的通貨膨脹迅速上升、通貨膨脹水準非常高的時期。當然還包括周圍所有的挑戰，例如 COVID 交付時間等等。

And you know, certainly we'll remind you that we implemented a series of price increases a few years back as we were in essence catching up to what we were seeing in and around inflation. But no, with the commentary that I have just given, I would say in terms of what we have seen in and around price realization and what we have built in as that sort of low mid single. I would say that is fairly comparable to what we've seen outside of that unusual period.

你知道，我們當然會提醒你，幾年前我們實施了一系列價格上漲，因為我們本質上是在追趕我們所看到的通貨膨脹的水平。但是不，根據我剛才給出的評論，我想說的是，就我們在價格實現方面看到的情況，以及我們所構建的那種中低單品而言。我想說，這與我們在那段不尋常時期之外所看到的情況相當。

Okay. Fair enough. I'll pass it on. Thank you.

好的。很公平。我會傳達的。謝謝。

Thank you. Our next question comes from Bryan Blair with Oppenheimer. Your line is open to me. Ask your question.

謝謝。下一個問題來自奧本海默公司的布萊恩布萊爾。您的線路對我開放。提出你的問題。

Thank you. Good morning, everyone.

謝謝。大家早安。

Good. Morning, Brian is, your team has framed the, 80 to 100 basis points, gross margin benefit from ramping the new grass foundry and closing the Legacy plant. At least, run rate, looking to the back half of this fiscal year, maybe touch on the commercial benefits of the new foundry. It seems like you're gaining share or perhaps furthering pricing power, is that the case? And if so, what role might the new founder be playing in those dynamics?

好的。早上好，布萊恩，您的團隊已經確定了擴大新草坪鑄造廠並關閉傳統工廠來獲得 80 到 100 個基點的毛利率收益。至少，展望本財年下半年，運轉率可能觸及新代工廠的商業利益。看起來你們的市佔率正在增加，或者可能正在增強定價權，是這樣嗎？如果是這樣，新創辦人將在這種動態中扮演什麼角色？

Good morning, Brian, you're right. We kind of quantified the 80 to 100 basis points in terms of operational improvement. Then from closing the Legacy Brass Foundry, I think from a commercial perspective, the advantages of the of the eco Brass and how that translates into a much more efficient foundry and our ability to service the customers in a much more improved manner.

早安，布萊恩，你說得對。我們從營運改善的角度量化了 80 到 100 個基點。然後，從關閉傳統黃銅鑄造廠的角度來看，我認為從商業角度來看，生態黃銅的優勢以及如何轉化為更高效的鑄造廠以及我們以更好的方式為客戶提供服務的能力。

Those two things going together is going to allow us to be well positioned particularly for the lead service line replacement as that rolls out in the future.

這兩件事結合在一起將使我們在未來推出的鉛服務線更換中處於有利地位。

This is to color and just to level set, understand that day by day, hour by hour, even you know, things change in terms of the you know, tariff backdrop and dynamics, but just a little prior to mitigation, be that pricing or otherwise, what would the potential impact of announced or threatened tariffs be at this point?

這只是著色和水平設置，要明白日復一日，時復一小時，甚至你知道，事情在關稅背景和動態方面都在發生變化，但在緩解之前，無論是定價還是其他方面，宣布或威脅徵收關稅的潛在影響會是什麼？

Yeah. So let me address sort of how we are viewing tariffs and what we would see. First of all, I think to level set, we remind you that in 2024, 92% of our net sales were in the US and we are largely vertically integrated for most of our major product categories. And that includes iron gate valves, hydrants, and service brass products.

是的。所以讓我來談談我們如何看待關稅以及我們會看到什麼。首先，我認為從水平上講，我們提醒您，到 2024 年，我們 92% 的淨銷售額來自美國，並且我們對大多數主要產品類別進行了基本垂直整合。其中包括鐵閘閥、消防栓和服務黃銅產品。

As we look at sourcing, we do have a facility in China. The facility in China supports our specialty valve business and we do have a small amount of supply chain exposure to Mexico in Canada. I think importantly, with a lot of the discussion and announcements in and around tariffs. Our teams are working diligently through various scenarios and that includes the most recently announced 10% tariff on Chinese goods.

從採購角度來看，我們在中國確實有一個工廠。中國的工廠為我們的專業閥門業務提供支持，而且我們在加拿大與墨西哥之間也有少量的供應鏈接觸。我認為重要的是，圍繞關稅有很多討論和公告。我們的團隊正在努力研究各種情況，其中包括最近宣布的對中國商品徵收 10% 的關稅。

Again, specifically addressing Canada, Canada from a net sales perspective was about 6% of our 2024 net sales. So I want to emphasize again that with the timing of the tariff announcement, the guidance that we have just provided does not include any potential cost increases or impact associated with those tariffs. We'll also reference that the price announcement that we just made that was communicated prior to the announced tariffs.

再次具體談到加拿大，從淨銷售額的角度來看，加拿大約占我們 2024 年淨銷售額的 6%。因此，我想再次強調，考慮到關稅公告的時間，我們剛剛提供的指導並不包括與這些關稅相關的任何潛在成本增加或影響。我們還將參考我們剛剛發布的價格公告，該公告是在宣布關稅之前發布的。

While we believe that any tariffs could increase costs, we think that our exposure is manageable and we certainly think our competitors would certainly have feel some impact as well. I will tell you, we have experienced this before. Certainly, if we go previously when there were, the Chinese tariffs were implemented during the previous Trump administration, we did see elevated costs associated with those prior tariffs. And as part of the mitigation efforts, we increased prices for certain of our products, particularly specialty valves.

雖然我們認為任何關稅都可能增加成本，但我們認為我們的風險敞口是可控的，我們當然認為我們的競爭對手肯定也會感受到一些影響。我告訴你，我們以前也經歷過這樣的事。當然，如果我們回顧一下以前的情況，當時中國在上一屆川普政府期間實施了關稅，我們確實看到與先前的關稅相關的成本上升。作為緩解措施的一部分，我們提高了某些產品的價格，特別是特殊閥門的價格。

We also executed some strategic sourcing initiatives. Our Kimball facility which I know we have talked about has been one of our recent capital investments. That facility has been open for a number of years. It has focused largely on our specialty valve product and that does increase our domestic manufacturing capabilities.

我們也執行了一些策略採購計劃。我知道我們已經討論過的金博爾工廠是我們最近的資本投資之一。該設施已開放多年。它主要專注於我們的專業閥門產品，這確實提高了我們的國內製造能力。

We're going to continue to monitor what we see from our channel partners and end use customers to see what impact that there is. But I think overall our sectors had an industry of passing on cost increases over a period of time. And although we do see any potential tariffs as being a headwind, we will certainly work to and are working through to manage them through a combination of pricing actions as well as strategic sourcing initiatives as we need to as we need them.

我們將繼續監控我們的通路合作夥伴和最終用戶的情況，看看會產生什麼影響。但我認為，總體而言，我們的產業在一段時間內會轉嫁成本上漲。儘管我們確實將任何潛在的關稅視為阻力，但我們肯定會努力並正在努力透過結合定價行動以及策略性採購舉措來管理它們。

Appreciate all the color I'll pass on.

感謝我傳遞的所有色彩。

Thank you. Our next question. Thank you. Our next question comes from Deane Dray with RBC capital markets. Your line is open. You may ask your question.

謝謝。下一個問題。謝謝。下一個問題來自加拿大皇家銀行資本市場的 Deane Dray。您的線路已開通。你可以提出你的問題。

Thank you. Good morning, everyone.

謝謝。大家早安。

Good morning, Dan.

早上好，丹。

Hey, I like to talk about the impact of the closure of the old foundry and I don't know if you had a closing ceremony but you probably should have because it's a big deal. It's a big accomplishment to have gotten that done on the timing that you said? And can you just clarify for the quarter?

嘿，我喜歡談論舊鑄造廠關閉的影響，我不知道你是否舉行了閉幕式，但你應該舉行，因為這是一件大事。按照您說的時間完成這件事是一項很大的成就嗎？您能否澄清一下本季的情況？

Was there any outsourcing that was still done? And as that rolls off, can you just directionally tell us how much of that expense goes away and then related to the closure of that facility? I mean, it was operating for so many years.

還有什麼外包業務仍在進行嗎？隨著這筆支出的減少，您能否直接告訴我們其中有多少費用消失了，以及與該設施關閉相關的費用？我的意思是，它已經運行了很多年了。

Are there any remediation risks that, that you have, have you taken any reserves for that? Is there any reason that that might be a concern? So kind of near term price/cost relief and then longer term. Are there any liabilities that we should be aware of?

您是否有任何補救風險？是否有理由認為這可能值得擔憂？因此，短期內價格/成本會有所緩解，而長期來看則不會。有哪些責任是我們該注意的？

Hey, good morning Dean, this is Paul and in terms of the outsourcing, if I take that question first, we've been reducing that throughout the last 12 to 18 months as we've been ramping up the new foundry. So that, that in essence, has all been eradicated over the last two or three quarters, which is part of the margin improvement we've seen there. So there's no real outsourcing going on now from a service price perspective, the ability of closing the South Foundry, there were some inventory bills during that period in our last quarter.

嘿，早上好，Dean，我是 Paul，關於外包，如果我先回答這個問題的話，在過去的 12 到 18 個月裡，我們一直在減少外包，因為我們一直在加大新鑄造廠的建設。所以，從本質上講，這種情況在過去兩三個季度已經全部消除，這是我們看到的利潤率提高的一部分。因此，從服務價格的角度來看，現在並沒有真正的外包，關閉南方鑄造廠的能力，在我們上個季度的那段時期有一些庫存賬單。

Then in terms of some products, as we transition to the to the new foundry, as we spoke about some of the lower running parts as we transitioned all that tooling in terms of legacy costs or outstanding liabilities. We took about $3.3 million of costs in the quarter around inventory and asset write downs and we are going to be starting and working on the decommissioning of that old legacy facility.

然後就某些產品而言，隨著我們過渡到新的鑄造廠，我們談到了一些運作較低的零件，因為我們在遺留成本或未償負債方面轉換了所有工具。本季我們在庫存和資產減記方面花費了約 330 萬美元，我們將開始並致力於該舊設施的退役。

And right now, we don't have a specific estimate for any future one time cost at this point, remediation expenses, decommission and possible demolition, but we are not estimating them at this point.

目前，我們還沒有對未來一次性成本、補救費用、退役和可能的拆除的具體估計，但我們目前不會對其進行估計。

Will be, provided as incur. So they'll the expense that we recognize when we incur the expense.

將會，提供為產生。因此，當我們發生費用時，我們就會確認這些費用。

Got it. All right. That's helpful. And then second question and Marty, I really appreciate all the details you've given around the tariffs and in the scheme of things you guys are really well positioned there and you've already done all the kind of thinking of where there might be some very modest exposure.

知道了。好的。這很有幫助。然後是第二個問題，馬蒂，我非常感謝您提供的有關關稅的所有細節，並且在整個計劃中，你們的位置非常有利，並且已經對可能存在非常適度風險的地方進行了充分的思考。

So I appreciate how you calibrated that and just related with the new administration, the doge focus on government spending. You know, most of the municipal world is exactly that it's not federal, but there is some federal, most of it is, is county and state. But just if there's pressure on government spending, how or how not is water infrastructure impacted.

因此，我很欣賞你如何調整這一點，並將其與新政府聯繫起來，總督專注於政府支出。您知道，世界上大多數市政當局都不是聯邦的，但也有一些是聯邦的，大多數是縣和州的。但是，如果政府支出面臨壓力，水利基礎建設又會受到什麼樣的影響呢？

So, very good question, certainly. And I think overall, we do have, as we all know, the infrastructure bill that was passed a few years back. And I think importantly that bill had bipartisan support and in and around aging infrastructure and in and around specifically water. I think just the growing awareness challenges in a number of cities have faced, continues to emphasize the importance of the investment with respect to that.

所以，這確實是個好問題。我認為總的來說，眾所周知，我們幾年前就通過了基礎設施法案。我認為重要的是，該法案得到了兩黨的支持，特別是在老化基礎設施和水資源方面。我認為許多城市面臨的意識挑戰日益增強，這不斷強調了相關投資的重要性。

You know, the GAAP has been there, the GAAP is widening and so I think that certainly does lend support for the continued need. On top of that, I know the lead service line replacements again, I think it continues to be an area where there is at least near term focus. And that's largely because consumers and communities really appreciate the health risks associated with that.

您知道，GAAP 一直存在，並且 GAAP 的範圍正在擴大，因此我認為這肯定會為持續的需求提供支援。最重要的是，我再次了解了鉛服務線的更換，我認為這仍然是至少在短期內關注的領域。這主要是因為消費者和社區確實意識到了與此相關的健康風險。

You know, I think given the new administration and certainly given a number of the policy changes. Certainly a great question to ask. I think our belief is that overall that municipal will continue to be resilient. As you know, we have not, our guidance doesn't assume a meaningful impact from the infrastructure bill funding. We are continuing to watch it. I know Paul shared earlier on a call today that as we look at the number of projects and the, documentation and support they're seeking around this.

你知道，我認為考慮到新政府以及一些政策變化。這確實是一個很好的問題。我認為，我們相信，總體而言，市政債市場將繼續保持韌性。如您所知，我們的指導並未假設基礎設施法案資金會產生有意義的影響。我們將繼續關注。我知道保羅今天早些時候在電話會議上分享過，我們正在研究專案數量以及他們為此尋求的文件和支援。

So I think, is there a near term impact hard to tell if there will be. But as I said, we don't have any specific infrastructure spending. And I think when you assess the bipartisan support as well as the need due to the impact on water and importantly, health risks. I think that even if there are a few short term bumps over the longer term, we think this will still be an area where we will see investment.

所以我認為，短期內是否會產生影響很難判斷。但正如我所說，我們沒有任何特定的基礎設施支出。我認為當你評估兩黨支持以及由於對水的影響以及重要的健康風險而產生的需要時。我認為，即使長期來看會出現一些短期波動，我們仍認為這將會是一個值得投資的領域。

That's great. Thanks for all that color.

那太棒了。感謝所有這些色彩。

Thank you. And this question comes from Michael Halloran with Baird. Your line is open. You may ask your question.

謝謝。這個問題來自貝爾德公司的麥可‧哈洛蘭 (Michael Halloran)。您的線路已開通。你可以提出你的問題。

Hey, good morning everyone. So two questions first, we need to front half, back, half in your comments made earlier about margin and acceleration in the back half is the equation here, just simply seasonality plus timing of the cost benefits from the facility closure. And then you know any sense for the magnitude front half versus back half on that margin ramp that you expect.

嘿，大家早安。所以首先有兩個問題，我們需要前半部分，後半部分，您之前關於利潤和加速度的評論中的後半部分是這裡的等式，只是簡單的季節性加上設施關閉帶來的成本效益的時間。然後，您就能知道您預期的邊緣坡道上前半部與後半部的幅度有何差異。

We do expect. Good morning Mike. We do expect the backup margins to be better than the first half in terms of for seasonal reasons, as you mentioned. And we do expect the water flow to benefit from the closure of the Legacy Brass boundaries as we've already referenced.

我們確實期待。早上好，麥克。正如您所說，由於季節性原因，我們確實預計備份利潤率將比上半年更好。我們確實預計，正如我們已經提到的，Legacy Brass 邊界的關閉將有利於水流的改善。

And in water management, we expect year over year improvements in our repair products business, which is the one impacted by the Israel Hamas war. Even though we anticipate some elevated costs, there will continue the performance. There is incrementally better.

在水管理方面，我們預計修復產品業務將逐年改善，該業務受到了以色列哈馬斯戰爭的影響。儘管我們預計成本會增加，但我們仍將繼續這種表現。情況逐漸好轉。

And then second one then is just, could you give some thoughts on how you're looking at the land development side of your business? What are your customers saying? You know, certainly heard the prepared remarks but, but any nuance from a customer level and, and how that, what the prospect for development is, Is rates kind of stay where they are.

那麼第二個問題是，您能否談談您如何看待您業務的土地開發方面？您的顧客怎麼說？您知道，當然聽到了準備好的發言，但是，從客戶層面來看任何細微差別，以及發展前景如何，利率是否會保持在原位。

I missed the start of that question. Did you, did you pick it up?

我錯過了這個問題的開頭。你、你撿到它了嗎？

I think the question was around land development, residential construction.

我認為問題在於土地開發和住宅建設。

Correct.

正確的。

Is that your question?

這是你的問題嗎？

Yeah. Yeah. The question was just the outlook in general around land development and in a nuance from customer conversations. Anything along that line?

是的。是的。問題只是有關土地開發的整體前景以及與客戶對話的細微差別。有什麼類似的事情嗎？

Yeah, we see demand for new homes as being resilient. You know, despite the elevated mortgage rates and other factors including low inventory on his existing homes.

是的，我們認為新房需求具有彈性。您知道，儘管抵押貸款利率上升，且存在其他因素，包括現有房屋庫存較低。

And we still believe and as we talk to our customers, homebuilders have strong balance sheets and they continue to manage their large investments and inventory levels at a disciplined pace.

我們仍然相信，正如我們與客戶交談時所說，房屋建築商擁有強勁的資產負債表，他們繼續以有紀律的速度管理其大量投資和庫存水準。

So for our sales guidance, we assume a lot of land development growth, the level modest growth in terms of how that's anticipated into our guidance going forward.

因此，對於我們的銷售指導，我們假設土地開發將大幅成長，就未來指導預期而言，成長水準將保持適度。

Thank you.

謝謝。

Thank you again. If you'd like to ask a thank you again. (Operator Instructions)

再次感謝您。如果您想再次詢問，謝謝。（操作員指令）

Our next question comes from Walt Liptak with Seaport research. You may ask your question. Your line is open.

我們的下一個問題來自 Seaport 研究機構的 Walt Liptak。你可以提出你的問題。您的線路已開通。

Hi, thanks. Good morning and thanks for the good color so far. Let me just ask a follow up on the tariffs issue and just your I recall from the last time around was supply chain that there was issues with some of the material that goes into the foundries with some of the pig irons and some of the other things that you know, was impacted by international pricing.

嗨，謝謝。早上好，感謝您迄今為止的好顏色。讓我就關稅問題進行一個跟進問，我記得上次是供應鏈問題，進入鑄造廠的一些材料存在問題，比如一些生鐵和其他一些東西，你知道，受到了國際定價的影響。

I wonder if you can just review for us kind of in advance of these tariffs like you know, your supplier, raw materials and you know how the pricing works, from your suppliers.

我想知道您是否可以提前為我們審查一下這些關稅，例如您的供應商、原材料，以及您知道供應商的定價是如何運作的。

Hey, good morning Walt. Our supply of raw materials is predominantly domestic. So we don't anticipate any issues from the tariffs, from the from a raw material supply. Basically what Martie anticipated and shared earlier around where we may have some other components that may be impacted by these future tariffs.

嘿，早上好，沃特。我們的原料供應主要來自國內。因此，我們預計關稅和原材料供應不會有任何問題。基本上，Martie 先前預測和分享的內容是，我們可能會發現一些其他因素可能會受到未來關稅的影響。

And I think in and around that wall, it's sort of the specific on, the cost for imports and exports and how that is impacted directly by tariffs. And then just are there other more general impacts in the economy as a result of the tariffs?

我認為，在這堵牆的內部和周圍，具體來說是進出口成本，以及關稅如何直接對其產生影響。那麼關稅是否會對經濟產生其他更普遍的影響呢？

Okay. Got it. So you're saying not an issue.

好的。知道了。所以您說這不是問題。

Overall more, as you hear discussed, could there be overall more inflationary pressure as a result of implementation of the of the tariffs? But.

總體而言，正如您所聽到的，實施關稅是否會導致整體通膨壓力增加？但。

Yeah, because our total material costs are influenced by purchase parts that suffer from potential labor, inflation and other inflationary pressures. It's not just raw materials.

是的，因為我們的總材料成本受到採購零件的影響，而這些零件受到潛在勞動力、通貨膨脹和其他通膨壓力的影響。這不僅僅是原材料。

Okay. So okay. Got it. So it's not supply chain, just pricing. So is the, are the projects developing right now for the spring construction season or are the projects kind of already, coming in with bids and things like that? You know, like, what's your, it sounds like you've got pricing power, but you know, what's the timing on, these tariffs hitting and you kind of inflation in some of the raw material markets.

好的。好吧。知道了。所以這不是供應鏈，只是定價。那麼，現在這些項目是否正在為春季施工季節做準備，還是這些項目已經開始投標等了？你知道，聽起來你有定價權，但你知道，這些關稅的打擊時機是什麼，以及一些原料市場的通貨膨脹。

So let me dimension that a couple of different ways. So just as a reminder with the short cycle products, which is the certainly the largest percentage across our portfolio is that includes iron gate valves, hydrants, service, brass repair and other. That is where there tends to be a very short, shorter lead delivery time under normal conditions.

讓我用幾種不同的方式來表示這一點。因此，需要提醒的是，短週期產品絕對是我們產品組合中佔比最大的產品，其中包括鐵閘閥、消防栓、服務、黃銅修理等。在正常情況下，這往往意味著交貨時間非常短。

And as we said, we're pretty much back to the normal delivery times for most of those products, outside of repair that Paul addressed earlier. So with that, we generally see with respect to orders 2 to 4 weeks, between order and delivery in and around some of the comments that we've made with respect to what we're seeing on projects that could receive funding from the infrastructure bill. I think that's where we are seeing.

正如我們所說的，除了保羅之前提到的維修之外，大多數產品的交貨時間基本上已經恢復正常。因此，我們通常會看到訂單與交貨之間間隔 2 到 4 週的時間，這與我們對可以從基礎設施法案中獲得資助的項目所發表的一些評論相吻合。我想這就是我們所看到的。

We wanted to comment that we are seeing some of the projects that are going through the requirements needed to qualify for the funding and verify that it meets the requirements designated by the different agencies for funding coming from the infrastructure bill. But as a reminder, we are not assuming a lot of those dollar expenditures in the guidance we provided. Does that address your question?

我們想評論一下，我們看到一些項目正在滿足獲得資金所需的要求，並驗證其是否符合不同機構為基礎設施法案提供的資金指定的要求。但需要提醒的是，我們在提供的指導上並沒有假設大量的美元支出。這回答了你的問題嗎？

I think it does. I think it does. Thank you very much.

我認為是的。我認為是的。非常感謝。

Well, I would just add, I think in terms of the investments we've made around operational excellence and service levels and lead times coming back to normalized levels, we are well positioned and as the construction season starts, particularly in the northern part of the country as it comes up in the winter period. Okay, great. Thank you.

嗯，我只想補充一點，我認為就我們在卓越運營和服務水平以及交貨時間恢復到正常水平方面所做的投資而言，我們處於有利地位，而且隨著施工季節的開始，特別是在該國北部地區，隨著冬季的到來。好的，太好了。謝謝。

Thank you. I turn the call over to Martie Zakas.

謝謝。我把電話轉給 Martie Zakas。

Very good. Thank you operator. We certainly appreciate everyone taking the time to join our call today. We look forward to speaking with you again when we announce our second quarter results and that will be in early May. Hope everyone has a great day and operated with that if you would please conclude our call.

非常好。謝謝接線生。我們非常感謝大家今天抽出時間參加我們的電話會議。我們期待在五月初公佈第二季業績時再次與您交談。希望大家度過愉快的一天，並以此結束我們的通話。

Thank you. This concludes today's conference. You may disconnect your lines at this time.

謝謝。今天的會議到此結束。現在您可以斷開您的線路。