Mueller Water Products Inc (MWA) 2025 Q2 法說會逐字稿

Good morning and thank you for standing by. (Operator Instructions)

早安，感謝您的支持。（操作員指示）

Today's conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to Mr. Whit Kincaid. Sir, you may begin.

今天的會議正在錄製中。如果您有任何異議，您可以立即斷開連接。現在我很高興將電話轉給惠特金凱德先生。先生，您可以開始了。

Good morning, everyone. Thank you for joining us for Mueller Water Products second-quarter conference call. Yesterday afternoon, we issued our press release reporting results of operations for the quarter ended March 30, 2025. A copy of the press release is available on our website merwaterproducts.com. I'm joined this morning by Martie Zakas, our Chief Executive Officer; Paul McAndrew, our President and Chief Operating Officer; and Melissa Rasmussen, our Chief Financial Officer. Following our prepared remarks, we will address questions related to the information covered on the call.

大家早安。感謝您參加 Mueller Water Products 第二季電話會議。昨天下午，我們發布了新聞稿，報告了截至 2025 年 3 月 30 日的季度經營業績。新聞稿副本可在我們的網站 merwaterproducts.com 上查閱。今天早上和我一起參加的是我們的執行長 Martie Zakas；我們的總裁兼營運長 Paul McAndrew；以及我們的財務長梅麗莎·拉斯穆森 (Melissa Rasmussen)。在我們準備好發言之後，我們將解答與電話會議中涉及的資訊相關的問題。

As a reminder, please keep the 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.

提醒一下，請保留一個問題和後續問題，然後返回佇列。今天早上的電話會議正在錄音，並在網路上進行現場直播。我們也在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的非公認會計準則揭露要求。此時，請參閱投影片 2。本投影片列出了我們的新聞稿、投影片和本次電話會議中引用的非 GAAP 財務指標。它揭示了我們認為這些措施為投資者提供有用資訊的原因。非公認會計準則 (non-GAAP) 和公認會計準則 (GAAP) 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 闡述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，指出可能導致實際結果與前瞻性陳述中的結果大不相同的重要因素。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 September 30. A replay of this morning's call will be available for 30 days at 1-800-568-3652. The archived webcasts, 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 Martie.

在本次電話會議中，所有提及特定年份或季度的事項，除非另有說明，均指截至 9 月 30 日的財政年度。您可以在 1-800-568-3652 上重播今天早上的通話，重播有效期為 30 天。存檔的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 Martie。

Thanks, Whit. Good morning, everyone. Thank you for joining our second-quarter earnings call. I'll start with a brief overview of our performance and then turn it over to Paul. We delivered a solid performance this quarter where we achieved second quarter records for consolidated net sales, adjusted EBITDA, and adjusted net income per share. Healthy order levels and resilient end market demand supported net sales growth of 3.1%. We exceeded our strong results from the prior year quarter, which included benefits from elevated backlogs for service brass and natural gas distribution products.

謝謝，惠特。大家早安。感謝您參加我們的第二季財報電話會議。我將首先簡要概述我們的表現，然後將其交給保羅。本季我們表現穩健，綜合淨銷售額、調整後 EBITDA 和調整後每股淨收入均創下第二季紀錄。健康的訂單水準和強勁的終端市場需求支撐淨銷售額成長 3.1%。我們的業績超越了去年同期的強勁水平，這得益於服務黃銅和天然氣分銷產品積壓訂單的增加。

This quarter, we were pleased to see a sequential increase in net sales of repair products thanks to everyone's efforts over the past year. Our focus on delivering exceptional customer service, improving operational excellence, and maintaining cost discipline enabled us to increase both our gross margin and adjusted EBITDA margin compared with our first quarter. Our teams are diligently working through the challenging external environment as we maintain our focus on providing outstanding customer service while closely managing our supply chain.

本季度，我們很高興看到修復產品的淨銷售額環比成長，這要歸功於大家過去一年的努力。我們專注於提供卓越的客戶服務、提高卓越營運水平和維持成本紀律，這使得我們與第一季相比提高了毛利率和調整後的 EBITDA 利潤率。我們的團隊正在努力應對充滿挑戰的外部環境，同時我們密切管理我們的供應鏈，專注於提供卓越的客戶服務。

We expect that the recently enacted tariffs will increase costs for many of our products to varying degrees. We are taking appropriate steps to mitigate the higher costs through pricing actions, supply chain mitigation plans, operational initiatives, and cost discipline. We are pleased to be increasing our annual guidance range for 2025 net sales and are maintaining our adjusted EBITDA guidance range due to the higher costs associated with the recently enacted tariffs.

我們預計最近實施的關稅將不同程度地增加我們許多產品的成本。我們正在採取適當措施，透過定價行動、供應鏈緩解計畫、營運措施和成本紀律來降低更高的成本。我們很高興能夠提高 2025 年淨銷售額的年度指引範圍，並且由於最近實施的關稅導致成本增加，我們維持調整後的 EBITDA 指導範圍。

Before Paul provides details regarding tariffs and our work to mitigate the impacts for Mueller and our customers, I want to express my continued confidence in our ability to adapt and overcome external challenges. Mueller has been a leading supplier of infrastructure products and solutions for more than 165 years. Approximately 92% of our net sales are in the US, and we are largely vertically integrated for our major product categories like iron gate valves, hydrants, and brass products. We estimate that 60% to 65% of our net sales are used for the repair and replacement of municipal water infrastructure.

在保羅提供有關關稅以及我們為減輕穆勒和客戶的影響所做的工作的細節之前，我想表達我對我們適應和克服外部挑戰的能力的持續信心。165 多年來，Mueller 一直是基礎設施產品和解決方案的領先供應商。我們的淨銷售額約有 92% 來自美國，我們的主要產品類別（如鐵閘閥、消防栓和黃銅產品）基本上是垂直整合的。我們估計，我們淨銷售額的 60% 至 65% 用於市政水基礎設施的修復和更換。

We have leading brands, a large installed base, and a comprehensive distribution network which gives us a strong foundation. While we are operating in a significantly more volatile external environment, we have teams that have been tested with many challenges before and after the pandemic. With that, I'll turn it over to Paul.

我們擁有領先的品牌、龐大的安裝基礎和全面的分銷網絡，這些為我們奠定了堅實的基礎。雖然我們面臨的外部環境更加動盪，但我們的團隊在疫情前後經受住了諸多挑戰的考驗。說完這些，我就把麥克風交給保羅。

Thanks, Martie. Good morning, everyone. I was pleased with our second quarter performance. This quarter, we saw a strong sequential increase in order activity across most product lines reflecting our customer experience investments. Also, our improved execution enabled us to benefit from healthy order levels which were supported by continued resilience and market demand. While facing increased external challenges, we delivered sequential improvements in margins supported by our focus on improving operational excellence, increasing supply chain efficiencies and developing advanced manufacturing capabilities to drive productivity.

謝謝，瑪蒂。大家早安。我對我們第二季的表現感到滿意。本季度，我們看到大多數產品線的訂單活動均出現強勁的環比增長，這反映了我們對客戶體驗的投資。此外，我們改進的執行力使我們能夠從健康的訂單水準中受益，而這得益於持續的彈性和市場需求。儘管面臨日益增加的外部挑戰，我們仍透過專注於改善卓越營運、提高供應鏈效率和開發先進製造能力來提高生產力，實現了利潤率的連續提高。

Over the past few years, we have invested in our supply chain and operational teams to enhance our team's skills and resources. Our team has continued to work diligently through the rapidly changing tariff situation. Our manufacturing facilities and vendors are mainly in the US and we are largely vertically integrated for our major product categories.

過去幾年來，我們對供應鏈和營運團隊進行了投資，以增強團隊的技能和資源。在快速變化的關稅情況下，我們的團隊一直在努力工作。我們的製造設施和供應商主要位於美國，我們的主要產品類別基本上是垂直整合的。

Our core products, including iron gate valves, hydrants, and brass products are primarily supported by five manufacturing facilities in the US, including two iron foundries and the new brass foundry. In addition, we have a facility in Israel for most of our repair products, and one in China for some of our specialty valve products. Therefore, China and Israel account for a substantial portion of our supply chain exposure.

我們的核心產品包括鐵閘閥、消防栓和黃銅產品，主要由美國的五家製造工廠提供支持，其中包括兩家鑄鐵廠和一家新的黃銅鑄造廠。此外，我們在以色列設有工廠，生產大部分維修產品，在中國設有工廠，生產部分特殊閥門產品。因此，中國和以色列佔據了我們供應鏈的很大一部分。

From a cost of sales perspective, approximately 15% of our total cost of sales is exposed to the newly enacted tariffs. We estimate that the analyzed impact of the recently enacted tariffs is approximately 8% to 9% of our cost of sales with the China-related tariffs accounting for approximately 75% of our analyzed tariff exposure. This estimate excludes any benefits from our price or cost mitigation actions.

從銷售成本的角度來看，我們總銷售成本的約 15% 受到新頒布的關稅影響。我們估計，最近實施的關稅的分析影響約占我們銷售成本的 8% 至 9%，其中與中國相關的關稅約占我們分析的關稅風險的 75%。此估算不包括我們的價格或成本緩解措施所帶來的任何收益。

Due to the magnitude of the enacted tariffs, we have recently implemented targeted pricing actions for specially valve and repair products. We expect to see a lag between the higher tariffs and the associated price actions. While we anticipate tariffs will start to phase in later during the third quarter, we don't expect to see the benefits from the higher pricing until the fourth quarter.

由於實施的關稅金額龐大，我們最近針對閥門和維修產品實施了有針對性的定價措施。我們預期關稅上調與相關價格行動之間會出現滯後。雖然我們預計關稅將在第三季後期開始逐步實施，但我們預計要到第四季才能看到更高價格帶來的好處。

Given the uncertainty associated with tariffs and the potential impact on broader inflation and end market demand, we will closely monitor the situation and take additional price actions as needed. In addition to implementing targeted price and actions, our teams are taking steps to mitigate the tariffs through supply chain and operational initiatives including shifting sourcing geographies, implementing supplier cost sharing, and driving productivity at our facilities.

鑑於關稅的不確定性以及對更廣泛的通膨和終端市場需求的潛在影響，我們將密切關注情況並根據需要採取額外的價格行動。除了實施有針對性的價格和行動外，我們的團隊還採取措施透過供應鏈和營運措施來降低關稅，包括轉移採購地區、實施供應商成本分攤以及提高我們工廠的生產力。

Over the past few years, we have worked to expand our international sourcing options outside of China including opening a specialty valve manufacturing facility in Kimble, Tennessee. Given our recent investments and experience with the post-pandemic inflationary cycle, I am confident in our team's capabilities as we continue to strengthen our presence in the market. We remain vigilant and are monitoring our channel partners and end customers closely to evaluate impacts on all the patterns to remain nimble and adjust quickly as patterns evolve. With that, I'll turn it over to Melissa so she can take you through the financials.

在過去幾年裡，我們一直致力於擴大中國以外的國際採購選擇，包括在田納西州金布爾開設一家專業閥門製造工廠。鑑於我們最近的投資以及在疫情後通膨週期中的經驗，隨著我們繼續加強在市場上的地位，我對我們團隊的能力充滿信心。我們保持警惕，密切監控我們的通路合作夥伴和最終客戶，以評估對所有模式的影響，從而保持靈活並隨著模式的發展快速調整。說完這些，我將把它交給梅麗莎，以便她可以帶您了解財務狀況。

Thanks, Paul, and good morning, everyone. Before reviewing the financials, I want to express my gratitude to the Mueller team for their warm welcome. I am thrilled to be part of such an iconic company which plays a vital role in our critical water and natural gas infrastructures throughout North America. I am quickly getting up to speed and have had the opportunity to see some of our facilities and interact with many team members across the organization. I look forward to continuing this collaboration as well as working with the investment community. Now turning to the second quarter.

謝謝，保羅，大家早安。在審查財務狀況之前，我想對穆勒團隊的熱情歡迎表示感謝。我很高興能成為這樣一家標誌性公司的一員，該公司在北美各地的關鍵水和天然氣基礎設施中發揮著至關重要的作用。我很快就熟悉了情況，並有機會參觀我們的一些設施並與整個組織的許多團隊成員互動。我期待繼續這種合作以及與投資界的合作。現在轉向第二季。

Consolidated net sales increased 3.1% to $364.3 million, surpassing the strong second quarter net sales delivered last year. The growth was primarily due to the higher pricing and increased volumes across most of the product lines. We saw growth in net sales at both segments.

綜合淨銷售額成長 3.1% 至 3.643 億美元，超過了去年第二季強勁的淨銷售額。成長主要歸因於大多數產品線的定價上漲和銷售增加。我們看到兩個部門的淨銷售額均有所成長。

In the second quarter, gross profit of $128 million decreased 1.8% compared with the prior year, and gross margin of 35.1% decreased 180 basis points year over year. Though benefits from the increased volumes were notable, they were more than offset by manufacturing inefficiencies, most of which were expected as a result of the brass foundry transition. Excluding asset write downs of $800,000 associated with the legacy brass foundry, our gross margin was 35.4%. We remain excited about the efficiencies we are gaining as the new brass foundry ramps up, and we continue to expect margin benefits in the second half from the legacy brass foundry closure.

第二季毛利1.28億美元，年減1.8%；毛利率35.1%，年減180個基點。儘管產量增加的好處顯而易見，但卻被製造效率低下所抵消，而這大部分是黃銅鑄造廠轉型的預期結果。不包括與傳統黃銅鑄造廠相關的 80 萬美元資產減值，我們的毛利率為 35.4%。隨著新黃銅鑄造廠的產能提升，我們對所獲得的效率感到興奮，並且我們繼續預計下半年舊黃銅鑄造廠的關閉將帶來利潤收益。

For the quarter, total SG&A expenses of $55.7 million were $8 million lower than the prior year. This reduction was primarily driven by lower amortization expense, favorable foreign currency fluctuation, and diligent expense management of third-party fees and personnel related costs, partially offset by inflationary pressures.

本季度，銷售、一般及行政費用總額為 5,570 萬美元，較上年減少 800 萬美元。這一減少主要歸因於攤銷費用降低、有利的外匯波動以及第三方費用和人員相關成本的勤勉費用管理，但通膨壓力部分抵消了這一影響。

Operating income increased 10.1% in the quarter to $69.9 million compared with the prior year. Operating income includes $2.4 million of strategic reorganization and other charges primarily related to the leadership transition and fixed asset impairment, as well as other asset write downs which have been excluded from adjusted results. Turning now to our consolidated non-GAAP results for the quarter.

本季營業收入較上年同期成長 10.1%，達到 6,990 萬美元。營業收入包括 240 萬美元的策略重組和其他費用，主要與領導層過渡和固定資產減損有關，以及已從調整後結果中排除的其他資產減記。現在來看看本季的綜合非公認會計準則業績。

Adjusted operating income in the second quarter was $73.1 million an increase of 9.6% compared to the prior year. This improvement was primarily due to lower SG&A expenses, including lower amortization and increased volumes, which were partially offset by manufacturing inefficiencies. Our adjusted operating margin improved 120 basis points to 20.1% compared to the prior year.

第二季調整後營業收入為 7,310 萬美元，較上年成長 9.6%。這項改善主要歸因於銷售、一般及行政費用的降低，包括攤銷費用的降低和銷售的增加，但部分被製造效率低下所抵銷。我們的調整後營業利潤率較上年同期提高了 120 個基點，達到 20.1%。

Adjusted EBITDA came in at $84.5 million, an increase of 2.8% versus the prior year quarter, which was a record second quarter adjusted EBITDA. We achieved an adjusted EBITDA margin of 23.2% in the quarter, which was 230 basis points higher on a sequential basis and down 10 basis points from the prior year. For the last 12 months, adjusted EBITDA was $305.7 million or 22.3% of net sales, a 320 basis point improvement compared with the prior twelve-month period.

調整後的 EBITDA 達到 8,450 萬美元，較去年同期成長 2.8%，創下第二季調整後 EBITDA 的新高。本季度，我們實現了 23.2% 的調整後 EBITDA 利潤率，比上一季高出 230 個基點，比上年下降 10 個基點。過去 12 個月，調整後的 EBITDA 為 3.057 億美元，佔淨銷售額的 22.3%，與前 12 個月相比提高了 320 個基點。

Net interest expense in the second quarter declined $1.3 million year over year to $2.3 million primarily due to higher interest income. For the quarter, we increased adjusted net income per diluted share by 13.3% to $0.34 per share compared with the prior year, setting a new second quarter record. Moving on to quarterly segment performance, starting with WFS.

第二季淨利息支出較去年同期下降 130 萬美元至 230 萬美元，主要原因是利息收入增加。本季度，我們調整後的每股攤薄淨收益較上年同期成長 13.3%，達到每股 0.34 美元，創下第二季新高。從 WFS 開始，繼續討論季度分部業績。

Net sales increased 5.1% to $216.2 million compared with the prior year, primarily due to increased volumes of iron gate and specialty valves and higher pricing across most product lines. While we experience lower volumes of service brass products due to the timing of backlog normalization and customer and channel destocking, we remain optimistic about future volume growth. As a reminder, our prior year shipments benefited from serving an elevated backlog which was down more than 50% compared with the prior year.

淨銷售額較上年同期成長 5.1% 至 2.162 億美元，主要原因是鐵閘閥和特種閥門的產量增加以及大多數產品線的價格上漲。雖然由於積壓訂單正常化以及客戶和通路去庫存的時間安排，我們的服務黃銅產品銷售下降，但我們對未來的銷售成長仍然持樂觀態度。提醒一下，我們去年的出貨量受惠於積壓訂單的增加，與前一年相比，積壓訂單下降了 50% 以上。

Adjusted operating income increased 6.3% to $55.9 million in the quarter. The benefits from increased volumes and lower SG&A expenses, including lower amortization, more than offset manufacturing inefficiencies primarily associated with the lower volumes of service brass products. We are excited about the transition to our new brass foundry and the efficiencies it will bring, especially as volumes normalize. Adjusted EBITDA decreased 0.3% to $62.2 million and adjusted EBITDA margin was 28.8% compared with 30.3% in the prior year. I'll now move on to quarterly results for WMS.

本季調整後營業收入成長 6.3% 至 5,590 萬美元。產量增加及銷售、一般及行政費用（SG&A）降低（包括攤銷費用降低）帶來的好處足以抵銷主要與服務黃銅產品產量較低相關的製造效率低下的影響。我們對向新黃銅鑄造廠的過渡及其帶來的效率感到非常興奮，特別是在產量恢復正常的情況下。調整後的 EBITDA 下降 0.3% 至 6,220 萬美元，調整後的 EBITDA 利潤率為 28.8%，而去年同期為 30.3%。現在我將介紹 WMS 的季度業績。

Net sales increased 0.3% to $148.1 million compared with the prior year. The growth was primarily driven by increased volumes of repair products and higher pricing across most product lines. We saw lower volumes of natural gas distribution products due to similar factors as service brass products at WFS. Adjusted operating income increased 8.3% to $31.4 million in the quarter. The benefits from lower SG&A expenses, including lower amortization in favorable price/cost more than offset lower volumes in manufacturing inefficiencies. Adjusted EBITDA in the quarter increased 2% to $36.4 million with adjusted EBITDA margin improving 40 basis points to 24.6%. Moving on to cash flow.

淨銷售額較上年同期成長 0.3%，達到 1.481 億美元。成長主要得益於維修產品數量的增加和大多數產品線價格的上漲。由於與 WFS 的服務黃銅產品類似的因素，我們發現天然氣分銷產品的銷售量有所下降。本季調整後營業收入成長 8.3% 至 3,140 萬美元。銷售、一般及行政費用 (SG&A) 降低的好處（包括以優惠的價格/成本實現的較低攤銷）足以抵消製造效率低下造成的產量下降。本季調整後 EBITDA 成長 2% 至 3,640 萬美元，調整後 EBITDA 利潤率提高 40 個基點至 24.6%。繼續討論現金流。

Net cash provided by operating activities for the six-month period was $68.4 million, an increase of $6.2 million compared with the prior year period. The increase was primarily driven by higher net income, partially offset by changes in working capital, including decreases in other current liabilities such as incentive compensation.

六個月期間經營活動產生的淨現金為 6,840 萬美元，較去年同期增加 620 萬美元。成長主要得益於淨收入增加，但部分被營運資本變動（包括激勵薪酬等其他流動負債的減少）所抵銷。

Through the first six months of the year, we invested $21.1 million in capital expenditures compared with $15.8 million in the prior year. This increase was primarily driven by investments in our foundries. Our free cash flow for the first half of the year was $47.3 million which was $900,000 higher than the prior year period and was 51% of adjusted net income, which is in line with expectations.

今年前六個月，我們的資本支出為 2,110 萬美元，而去年同期為 1,580 萬美元。這一增長主要得益於我們對鑄造廠的投資。我們上半年的自由現金流為 4,730 萬美元，比去年同期高出 90 萬美元，佔調整後淨收入的 51%，符合預期。

At the end of the second quarter, our total debt outstanding was $451 million, and we had cash in cash equivalents of $329 million. We continued to have a strong and flexible balance sheet with a net debt leverage ratio below 1. No debt maturities until June 2029 and a 4% fixed interest rate on the $450 million senior notes. We did not have any borrowings under our AVL at quarter end, nor did we borrow any amounts under our AVL during the quarter. We ended the quarter with $492 million of liquidity, including $163 million of excess availability under the AVL. Now, turning to our outlook for 2025.

截至第二季末，我們的未償還債務總額為 4.51 億美元，現金等價物為 3.29 億美元。我們的資產負債表持續保持強勁和靈活，淨債務槓桿率低於 1。2029 年 6 月之前無債務到期，4.5 億美元優先票據的固定利率為 4%。我們在季度末沒有根據 AVL 進行任何借款，在本季也沒有根據 AVL 借入任何金額。本季末，我們的流動資金為 4.92 億美元，其中包括 AVL 下的 1.63 億美元超額可用資金。現在，我們來展望一下 2025 年。

We updated our fiscal 2025 outlook and are increasing our guidance for consolidated net sales by $15 million at the midpoint of the range, which is between $1.39 billion and $1.4 billion. This increase reflects our second quarter performance, expected benefits from new price actions being implemented to help mitigate tariff impacts and current expectations for end market demand.

我們更新了 2025 財年展望，並將合併淨銷售額預期上調 1,500 萬美元，中位數為 13.9 億美元至 14 億美元之間。這一增長反映了我們第二季度的業績、為幫助減輕關稅影響而實施的新價格行動的預期收益以及對終端市場需求的當前預期。

We are maintaining our adjusted EBITDA range between $310 million and $315 million. This guidance reflects our second quarter performance and expected benefits from higher net sales and lower total SG&A expenses, which are offset by the increased costs related to the newly enacted tariffs. For clarity, our guidance reflects the anticipated cost from the recently enacted tariffs as of May 5. We continue to expect benefits to the second half margins from the closure of our legacy brass foundry. At the midpoint of our guidance range, the suggested EBITDA range achieves a 22.4% margin for the year, reflecting a 70 basis point year-over-year improvement.

我們將調整後的 EBITDA 維持在 3.1 億美元至 3.15 億美元之間。該指引反映了我們第二季度的業績以及淨銷售額增加和銷售、一般及行政費用總額減少帶來的預期收益，但這些收益被新實施關稅相關的成本增加所抵消。為了清楚起見，我們的指導反映了截至 5 月 5 日最近頒布的關稅的預期成本。我們繼續預計，關閉原有的黃銅鑄造廠將為下半年的利潤帶來好處。在我們的指導範圍的中點，建議的 EBITDA 範圍實現了全年 22.4% 的利潤率，年增 70 個基點。

We are maintaining our free cash flow expectations to be more than 80% of adjusted net income in 2025. This outlook continues to assume our capital expenditures are between $45 million and $50 million for the year as we continue investing in our future growth, operational efficiencies, and domestic facilities. With that, I'll turn it back to Martie for closing comments.

我們維持自由現金流預期，也就是到 2025 年，自由現金流將佔調整後淨收入的 80% 以上。由於我們將繼續投資於未來的成長、營運效率和國內設施，這一前景繼續假設我們今年的資本支出在 4,500 萬美元至 5,000 萬美元之間。好了，現在我將把主題轉回給 Martie 來做最後的總結發言。

Thanks, Melissa. I want to provide a few closing comments before opening it up for Q&A.

謝謝，梅麗莎。在開始問答環節之前，我想做幾點總結性的評論。

We and others continue to believe municipalities will prioritize upgrading and expanding the aging North American water infrastructure to be more resilient and efficient for future generations. The American Society of Civil Engineers' most recent assessment of America's infrastructure maintained a C minus grade for drinking water in the US and a D plus grade for wastewater in the US. With a broad range of products and solutions, Mueller is uniquely positioned to capture the benefits from the investments needed to address the aging North American water infrastructure. The external environment is rapidly changing and leading to increased uncertainty for our customers, channel partners, and vendors.

我們和其他人仍然相信，市政當局將優先升級和擴大老化的北美水利基礎設施，以便為子孫後代提供更具彈性和更有效率的服務。美國土木工程師學會最近對美國基礎設施的評估顯示，美國飲用水的等級為 C 減，美國廢水的等級為 D 加。憑藉廣泛的產品和解決方案，Mueller 擁有獨特的優勢，可從解決北美水利基礎設施老化問題所需的投資中獲益。外部環境正在迅速變化，導致我們的客戶、通路合作夥伴和供應商的不確定性增加。

Over the past few years, we have made significant personnel and capital investments to strengthen our supply chain and operational capabilities and enhance our domestic manufacturing presence. I am confident in our team's ability to adapt and maintain our focus on delivering the critical products and solutions valued by our customers. Our teams will continue to focus on executing our key strategic priorities and serving our customers to drive continued net sales growth and future margin improvements which are supported by our purpose-driven organization.

過去幾年，我們進行了大量的人力和資本投資，以加強我們的供應鏈和營運能力，並增強我們的國內製造影響力。我相信我們團隊有能力適應並專注於提供客戶重視的關鍵產品和解決方案。我們的團隊將繼續專注於執行我們的關鍵策略重點並服務我們的客戶，以推動持續的淨銷售額成長和未來的利潤率提高，這得益於我們目標驅動的組織。

We have a strong financial foundation with very low net debt leverage and a flexible balance sheet which continues to provide ample capacity to support our strategic priorities, including capital investments and acquisitions, as well as returning cash to shareholders. That concludes our comments. Operator, please open the line for questions.

我們擁有強大的財務基礎，淨債務槓桿率非常低，資產負債表靈活，這將繼續提供充足的能力來支持我們的策略重點，包括資本投資和收購，以及向股東返還現金。我們的評論到此結束。接線員，請打開熱線以回答問題。

(Operator Instructions)

（操作員指示）

Deane Dray, RBC Capital Markets.

加拿大皇家銀行資本市場 (RBC Capital Markets) 的 Deane Dray。

Thank you. Good morning and welcome to Melissa.

謝謝。早上好，歡迎來到梅麗莎。

Good morning, Jane.

早上好，簡。

Hey, just a couple of clarifications, please. And first of all, slide 5 is really helpful, lots of detail there, and I appreciate how you broke it out for China and Israel. So that that squares a lot of the perspectives that we were looking or specifics that we were looking for, so thank you for that. And can you clarify on -- was there any pre-buy? I mean, you talked about in the slides in channel destocking. I was thinking you might have had it flip where distributors were adding some product to avoid some of the tariff commotion, but if you just clarify if you did see any pre-buying.

嘿，請您澄清幾點。首先，第 5 張投影片非常有用，其中有很多細節，我很欣賞您對中國和以色列的詳細解釋。因此，這與我們所尋找的許多觀點或細節相符，所以對此表示感謝。您能否澄清一下—是否有預購？我的意思是，您在幻燈片中談到了渠道去庫存。我在想，你可能會發現情況發生了變化，分銷商正在增加一些產品，以避免一些關稅騷動，但如果你只是澄清一下，你是否確實看到任何預購。

Yeah, good morning, Deane. This is Paul. That's something we analyze closely, and we know there's a number of drivers in the second quarter, typically, one of our strongest orders quarter as we move into the construction season alongside our price increase. So nothing has stood out to us yet from any kind of pre-buy perspective, but it's something we're analyzing closely.

是的，早上好，迪恩。這是保羅。我們對此進行了仔細的分析，我們知道第二季度有許多驅動因素，通常情況下，隨著我們進入建築季節，價格上漲，第二季度是我們訂單最強勁的季度之一。因此，從任何購買前的角度來看，我們還沒有發現任何特別之處，但我們正在對其進行密切分析。

Great, I appreciate that. And then can you just give us a sense of the new foundry? Is it fully operational? Are all the products certified, any other kind of milestones? And just the impairment that was taken, was that related to the old foundry, and you can decide that, please?

太好了，我很感激。那麼，您能向我們簡單介紹一下新鑄造廠嗎？它能完全投入運作嗎？所有產品都經過認證了嗎？還有其他里程碑嗎？那麼，剛才提到的減損是否與舊鑄造廠有關，您能判斷嗎？

Yeah, I'll take the first half of that, and I'll pass the impairment over to Melissa. So in terms of the new foundry, it's fully operational. The old South foundry is no longer producing any product. We have all products transferred to the new foundry that we want to transfer at this point. We'll obviously continue to evaluate that as new products come online. In terms of the impairment, Melissa?

是的，我會承擔前半部分，並將損害轉交給梅麗莎。因此，就新鑄造廠而言，它已全面投入運作。舊的南鑄造廠不再生產任何產品。我們已將所有想要轉移的產品轉移到新的代工廠。隨著新產品的上線，我們顯然會繼續評估這一點。就損傷而言，梅麗莎？

Yes, in terms of the impairment, we took an impairment charge during the quarter of $800,000 and that was related to the legacy foundry. As we continue to decommission the foundry, we'll incur other costs and write downs. However, we don't have an estimate of what that overall amount will be at this point, and we'll continue to update you all as that information unfolds.

是的，就減損而言，我們在本季提列了 80 萬美元的減損費用，這與傳統代工廠有關。隨著我們繼續關閉鑄造廠，我們將產生其他成本和減損。但是，我們目前還沒有估計總金額是多少，隨著資訊的不斷披露，我們將持續向大家更新資訊。

Brian Lee, Goldman Sachs.

高盛的 Brian Lee。

Hi, everyone. This is actually Nick on for Brian Lee. How's everybody doing today?

大家好。這實際上是 Nick 為 Brian Lee 所做的。大家今天過得怎麼樣？

Hey, good morning, Nick.

嘿，早上好，尼克。

Good morning.

早安.

I just had a quick question on, I guess, your CapEx, given that now the new foundry is up and running, I think, CapEx guide is relatively similar to what it was last year, but we kind of saw a decrease or a step down into 2Q. I guess what is going to be requiring further CapEx commitments for the remainder of the year and now the new foundry online and I guess, why should or shouldn't we be expecting a step down in the back half of the year.

我只是想快速問一下您的資本支出，考慮到現在新代工廠已經投入運營，我認為資本支出指南與去年相對相似，但我們在第二季度看到了下降或下降。我想，今年剩餘時間將需要進一步的資本支出承諾，現在新的代工廠已經上線，我想，我們為什麼應該或不應該期待今年下半年的支出下降。

Hey, good morning. This is Paul. Most of the capital for the new foundry had already been spent in the prior years. We are a vertically integrated company with foundries, so the anticipated CapEx spend is the main driver there in terms of ensuring that we are keeping those coal iron foundries running efficiently. Obviously, we have operational improvement projects as well. So we anticipate our capital remaining at that 3% to 4% of sales range.

嘿，早安。這是保羅。新鑄造廠的大部分資金已在前幾年用完。我們是一家擁有鑄造廠的垂直整合公司，因此預期的資本支出是確保煤鐵鑄造廠高效運作的主要驅動力。顯然，我們也有營運改善項目。因此，我們預計我們的資本將保持在銷售額的 3% 到 4% 範圍內。

Awesome, no, that's helpful. If I could just follow up with one more on and market demand. I mean, as you know, there are all these puts and takes with new tariffs and what seem to be changing day by day, have you heard anything from customers either not looking or looking to put projects on hold or push them out as they try to get a better understanding of what total costs could be for a project or just any other commentary that you guys have heard from the customer level would be great. Thank you.

太棒了，不，這很有幫助。如果我可以再跟進一個關於市場需求的問題。我的意思是，正如你所知，新關稅有各種各樣的利弊，而且這些似乎每天都在變化，你是否聽到客戶表示他們沒有考慮或希望暫停項目或推遲項目，因為他們試圖更好地了解項目的總成本，或者你們從客戶層面聽到的任何其他評論都很棒。謝謝。

Yeah, no, certainly, thanks. So as we take our views and looking out really to the second half of our year, I think, as we said, we've seen a strong start to the year. And I think that's reflected not only in the net sales performance but as well with what we described with our order activity and certainly the order activity looking through April.

是的，不，當然，謝謝。因此，當我們提出我們的觀點並真正展望今年下半年時，我認為，正如我們所說的，我們已經看到了今年強勁的開局。我認為這不僅反映在淨銷售業績上，也反映在我們所描述的訂單活動以及整個四月份的訂單活動中。

We are moving now into the portion of our fiscal year whereas the construction season commences we typically see greater activity. And I think certainly, as we look out to our third quarter, we do expect to continue to see resiliency with the municipal market which we think will continue through the year. I think where we probably see more ahead of baked in some uncertainty level is really in and around the residential construction market, specifically as we look out to our fourth quarter, I would say that's where we see there could be some greater uncertainty with respect to the end markets, largely due to some of the overall uncertainty and inflation concerns in the marketplace.

我們現在正進入財政年度的某個階段，隨著建築季節的開始，我們通常會看到更多的活動。我認為，展望第三季度，我們確實預期市政市場將繼續保持彈性，並且我們認為這種彈性將持續全年。我認為，我們可能會在住宅建築市場及其周邊地區看到更多超出一定程度的不確定性，特別是當我們展望第四季度時，我想說，我們看到終端市場可能會存在更大的不確定性，這主要是由於市場上的一些整體不確定性和通膨擔憂。

(Operator Instructions)

（操作員指示）

Mike Halloran, Baird.

麥克·哈洛倫，貝爾德。

Hey, good morning, everybody. This is (inaudible) for Mike.

嘿，大家早安。這是（聽不清楚）給麥克的。

Good morning.

早安.

So I believe previously we were thinking about pricing in the range of low single to mid-single digits, kind of given the updated tariff discussion and given the raise sales guide and help EBITDA but are are we implying the expectation to offset tariffs one for one on a dollar basis? Is that a fair way to think about it?

因此，我相信之前我們考慮的定價範圍是低個位數到中個位數，考慮到更新後的關稅討論，以及提高銷售指南和幫助 EBITDA，但我們是否暗示預期以美元為單位一對一抵消關稅？這是一種公平的思考方式嗎？

So let me jump in on price and I'm going to sort of break it into two different buckets. I think first of all, as we referenced on our first quarter call, we did announce price increases the most across most of our products. And that was sort of the typical timing that we expect in and around that, and at that time, those price increases did not reflect any expectation in and around tariffs.

那麼讓我來談談價格，我將把它分成兩個不同的類別。我認為首先，正如我們在第一季電話會議上提到的，我們確實宣布了大多數產品價格的最大漲幅。這是我們預期的典型時間，當時的價格上漲並未反映出對關稅的任何預期。

With what we have most recently announced, it is focused largely on our specialty valve and repair products that are most impacted by the recent tariff announcements and with that, we have announced double-digit targeted price increases for those product lines. With the price increases that have been implemented, we expect it just to mitigate some of our expected higher costs with the tariffs, not to fully cover the expected impact of the tariffs. I think as Paul has outlined in our prepared remarks, we have a number of other mitigation actions that are underway to help offset the expected impact of the most recently announced tariffs.

我們最近宣布的消息主要集中在受最近關稅公告影響最大的專業閥門和維修產品上，同時，我們宣布對這些產品線進行兩位數的目標價格上漲。隨著價格上漲，我們預期它只能減輕關稅帶來的部分預期成本上升，而無法完全彌補關稅的預期影響。我認為，正如保羅在我們準備好的演講中所概述的那樣，我們正在採取許多其他緩解措施，以幫助抵消最近宣布的關稅的預期影響。

I think the other area that I want to highlight for you as we expect the tariff impact to hit our results that is most likely to hit later in our third quarter, we do not expect to get any of the benefit of the most recently announced price increases until our fourth quarter, and that's just due to the expected lag.

我想向您強調的另一個領域是我們預計關稅影響將會影響我們的業績，最有可能在第三季度後期達到，我們預計直到第四季度才能獲得最近宣布的價格上漲的任何好處，這只是由於預期的滯後。

Got it, Martie. That color is.. Sure, sorry, Paul, go ahead.

明白了，瑪蒂。那個顏色是..當然，對不起，保羅，請說吧。

Yeah, just to add on to that. Obviously, the supply chain activities had started well before tariffs, the team that we put in place and the resources. So we're already on that journey of becoming less exposed to products coming out of China, which will help mitigate these tariffs going forward.

是的，只是想補充一下。顯然，供應鏈活動早在關稅、我們組成的團隊和資源之前就已經開始。因此，我們已經開始減少對中國產品的依賴，這將有助於減輕未來的關稅。

Thank you, that's super helpful. Obviously, balance sheets in a great shape and you know, Mueller is starting to position itself more on OpEx. Maybe you could talk a little bit about how the pipeline form formation is coming. I know that we were more focused on product expansion, maybe talk a little bit about how some of those early pipeline formations are going and what the state of the funnel looks like today, action ability and whether those conversations have changed in light of all the tariffs.

謝謝，這非常有幫助。顯然，資產負債表狀況良好，而且你知道，穆勒開始更專注於營運支出。也許您可以稍微談談管道形成的過程。我知道我們更注重產品擴展，也許可以稍微談談一些早期管道形成的進展、漏斗的現狀、行動能力以及這些對話是否因所有關稅而發生了變化。

Yeah, so I think overall, just addressing capital deployment and certainly, as we've expressed, we look to have a very balanced approach, which is the investment from a capital expenditure perspective as well as returning cash to stockholders both through dividends and share repurchase. But I think importantly, acquisitions, as we said, do remain an important priority for us to enhance our growth.

是的，所以我認為總的來說，只是解決資本部署問題，當然，正如我們所表達的，我們希望採取一種非常平衡的方法，即從資本支出的角度進行投資，以及透過股息和股票回購向股東返還現金。但我認為重要的是，正如我們所說，收購仍然是我們促進成長的重要優先事項。

I would say overall, with our large capital investments behind us that we are more active today and we are looking to find the acquisitions that we think will best allow us to expand our product portfolio, leverage the distribution, leverage our customer relationships and/or enhance our manufacturing capabilities. I think certainly, the challenge that we have certainly does focus in and around the actionability of items and we also always intent on where the valuation is to ensure that we get an appropriate return for our shareholders. So I would say yes, overall, with where we are, we do remain more active in terms of what we are looking for in the marketplace.

我想說，總的來說，由於我們已經進行了大量的資本投資，因此我們今天更加活躍，我們正在尋找我們認為最能讓我們擴大產品組合、利用分銷、利用客戶關係和/或增強製造能力的收購。我認為，我們面臨的挑戰確實集中在專案的可操作性上，我們也始終關注估值，以確保為股東獲得適當的回報。所以我想說是的，總的來說，就我們現在的情況而言，我們確實在市場上尋找的東西方面更加積極。

Walter Liptak, Seaport Research.

沃爾特·利普塔克（Walter Liptak），海港研究。

Hi, thanks. Good morning, everyone. Yeah, I wanted to ask sort of a, I guess, a follow up or more detail about just the pricing going up. And it sounds like -- double-digit price increases, it sounds like they're happening now. Does that cause any of the municipal customers or other kind of infras larger projects to have to go through a redo on pricing and potentially causing delays, like how do they absorb that without any sorts of delays?

你好，謝謝。大家早安。是的，我想問一些關於價格上漲的後續問題或更多細節。聽起來——兩位數的價格上漲，聽起來就像是現在正在發生的事。這是否會導致任何市政客戶或其他類型的大型基礎設施項目必須重新制定定價並可能導致延誤，例如他們如何在不出現任何延誤的情況下吸收這些費用？

Good morning, Walter. This is Paul. I think as we spoke about, we've been targeted on our price increases for especially valve and repair products. Repair products are typically a very fast turn products, so that's not really going to be baked into a project. And most of the specialty valve projects -- products, sorry, that we are talking about here would not be impacted the municipality from a project perspective. So we don't anticipate any concerns there.

早上好，沃特。這是保羅。我想正如我們所說的，我們的目標是提高閥門和維修產品的價格。修復產品通常是一種週轉速度非常快的產品，因此實際上不會被納入專案中。而且，我們在此討論的大多數專業閥門項目（抱歉，產品）從項目角度來看不會受到市政當局的影響。因此我們預計不會有任何問題。

Oh, okay. Thanks for pointing that out. I appreciate that. The -- you talked about the lag to it, sounds like there might be a lag effect from the third quarter price increases, and then the catch up into the fourth, is that right? I wonder if you could just help me understand that a little bit better.

哦好的。感謝您指出這一點。我很感激。您談到了滯後問題，聽起來好像第三季價格上漲可能會產生滯後效應，然後到第四季才會趕上，對嗎？我想知道您是否可以幫助我更好地理解這一點。

Yeah. Just to help you understand, so the reason that we have an expectation that the most recently enacted targeted price increases in and around specialty and repair will have a lag is largely due to the backlog levels. Specialty valve, just as Paul just talked through, tends to be more customized. Projects and/or valves and therefore given the backlog levels, we would not we don't expect to see any benefit from those most recent price increases until later in our fiscal year.

是的。只是為了幫助您理解，我們預計最近在專業和維修領域實施的針對性價格上漲將出現滯後，這主要是由於積壓水平。正如保羅剛才談到的，專用閥門往往更加客製化。項目和/或閥門，因此考慮到積壓水平，我們預計直到本財政年度晚些時候才會從最近的價格上漲中看到任何好處。

Additionally, just as a reminder with respect to repair products, given the challenges associated with the Israel-Hamas war, we do have higher backlog levels for the repair products than we typically see, as Paul said, that's generally a short cycle product. We have been working to lower the backlog levels, but given the backlog levels where we currently are, that's why we don't anticipate seeing the benefits of the most recently announced price increase until our fourth quarter.

此外，關於維修產品，需要提醒的是，考慮到以色列與哈馬斯戰爭帶來的挑戰，我們的維修產品積壓量確實比通常看到的要高，正如保羅所說，這通常是一種短週期產品。我們一直在努力降低積壓訂單水平，但考慮到目前的積壓訂單水平，我們預計直到第四季度才能看到最近宣布的漲價帶來的好處。

Okay, great. And maybe just the last one, I wonder if you could help us with gross margin in the coming quarter, like what kind of assumption do you have in for the next quarter gross margin?

好的，太好了。也許只是最後一個問題，我想知道您是否可以幫助我們了解下一季的毛利率，例如您對下一季的毛利率有什麼樣的假設？

Sure, as we think about gross margin in the coming quarter and actually for the back half of the year, we're expecting that we'll see improvements in gross margin as the year progresses. We had anticipated that we would have challenged gross margin in the second quarter as we were running the two foundries. And the new foundry continues to ramp, we'll expect to see those improvements throughout the back half of the year, as well as the improvements in the repair side of our business now that we're lapping the Israel-Hamas headwind that we encountered last year in the second quarter.

當然，當我們考慮下一季以及今年下半年的毛利率時，我們預計隨著時間的推移，毛利率會增加。由於我們同時營運兩家代工廠，因此我們預計第二季的毛利率將面臨挑戰。新鑄造廠將繼續擴大生產，我們預計今年下半年將會看到這些改進，同時，由於我們正在克服去年第二季度遇到的以色列-哈馬斯逆風，我們業務的維修方面也將有所改善。

We're expecting in the back half of the year about a implied 37% gross margin range for the back half of the year at the midpoint of our updated guidance. And we'll continue to expect, as Martie said, to have a lag related to the benefits of the pricing, that'll show in fourth quarter and the tariffs will start to impact third quarter. So third quarter will look a little more challenged than fourth quarter will.

我們預計，今年下半年的隱含毛利率約為 37%，這是我們更新後的指引的中點。正如 Martie 所說，我們將繼續預期定價效益將出現滯後，這將在第四季度顯現，而關稅將開始對第三季產生影響。因此，第三季面臨的挑戰將比第四季更大一些。

Joseph Giordano, TD Cowen.

約瑟夫·喬達諾（Joseph Giordano），TD Cowen。

Good morning. This is Michael on for Joe. So second margins in the quarter were some positive progression here every year, though, probably came in a little bit lighter than most for modeling, but then the consolidated performance came out ahead due to the lower corporate cost. So can you just elaborate any puts and takes when it comes to margin in the segments and then how should we be thinking about corporate expense on the go forward? Thank you.

早安.這是麥可為喬表演的。因此，第二季的利潤率每年都有一定的積極進展，儘管可能比大多數建模的利潤率要低一些，但由於企業成本較低，綜合業績表現領先。那麼，您能否詳細說明各部分利潤方面的利弊，以及我們該如何考慮未來的企業開支？謝謝。

Sure, for gross margin in the second quarter, we had expected to see a little bit of a dip in the second quarter. And while we did have some favorable volumes and price/cost benefits, we did, however, have manufacturing inefficiencies as we had talked about with the running of the two foundries. Now, that we have moved past the legacy foundry, we should be past the one-time manufacturing inefficiencies that we experienced in the prior quarter related to that foundry. We'll expect to see that the improvements in the back half of the year that we had talked about previously as that new foundry continues to ramp. And again, we expect that we'll see an implied guidance range of 37% in the back half of the year versus the 34.5% that we saw in the in the beginning of the year.

當然，對於第二季的毛利率，我們預計會略有下降。儘管我們確實獲得了一些有利的產量和價格/成本效益，但正如我們在運營兩家代工廠時所討論的那樣，我們確實存在製造效率低下的問題。現在，我們已經擺脫了傳統的代工廠，我們應該已經擺脫了上一季與該代工廠相關的一次性製造效率低下的問題。隨著新鑄造廠的持續發展，我們預計會看到我們之前談到的下半年的改進。我們再次預計，今年下半年的隱含指導範圍將達到 37%，而年初為 34.5%。

And as far as overall SG&A, we had expected that we would see a benefit related to the prior year as the amortization from the customer relationship intangible had fully been amortized. With that, we did continue to see in addition to that benefit, we saw some favorable foreign currency exchange in addition to some diligent expense management. So overall, we had reduced our SG&A expense expectation for the year by $4 million at the midpoint. We do expect to see a step up in the back half of the year, which is typical per our seasonality, and we're also investing in some decisions that we have made as far as IT investments and commercial investments as well as some personnel investments in the back half of the year so you'll see in a step up versus the first half of the year.

就整體銷售、一般及行政費用而言，我們預期會看到與前一年相關的收益，因為客戶關係無形資產的攤銷已全部攤提。有了它，我們確實繼續看到除了這一好處之外，我們還看到了一些有利的外匯兌換以及一些勤勉的費用管理。因此，總體而言，我們將今年的銷售、一般及行政費用預期中位數降低了 400 萬美元。我們確實預計下半年會出現成長，這符合我們的季節性特點，而且我們也正在對 IT 投資、商業投資以及下半年的一些人員投資做出一些決定，因此與上半年相比，你會看到成長。

Great, thanks. And just one more if I may, earlier, you mentioned about two-thirds of the business is tied to many water infrastructure. Can you just elaborate how much of that is actually tied to new lot development versus just repair and replacement business? And then are there any like mixed considerations that you would like to highlight to expect over time? Thank you.

太好了，謝謝。如果可以的話，我再問一句，之前您提到大約三分之二的業務與許多水利基礎設施有關。您能否詳細說明其中有多少實際上與新地塊開發有關，而不是僅僅與維修和更換業務有關？那麼，您是否希望強調一下隨著時間的推移會出現哪些類似的混合考慮因素？謝謝。

And and let me just clarify, when we give the end market estimates for our business, the roughly we'll call it two-thirds that we call repair and replace, that is all looking at existing municipalities where there already is the built out infrastructure, and generally, that's where you would be seeing any of the maintenance or the upgrades over time. When we look at what we call the residential construction piece, that is where the new lot development and/or new construction comes into play. So think of that as when you've got the raw land, you historically have not had the water distribution systems, and due to the development of the new communities, we -- they are putting in the underground infrastructure associated with it. Does that address your question?

讓我澄清一下，當我們給出我們業務的最終市場估計時，我們大致將其稱為三分之二的修復和更換，這都是針對已經建成基礎設施的現有城市，一般來說，隨著時間的推移，您將在那裡看到任何維護或升級。當我們審視所謂的住宅建築部分時，這就是新地塊開發和/或新建築發揮作用的地方。所以想像一下，當你擁有未開發的土地時，你歷史上並沒有供水系統，並且由於新社區的發展，我們 - 他們正在投入與之相關的地下基礎設施。這能解答你的問題嗎？

Yeah, I'm sorry if I might have missed this earlier in the call. You might just maybe breaking out a percentage basis or just generalize percentage was the exposures of those two things you just mentioned. I don't think it was necessarily clear. Thank you.

是的，如果我之前在通話中錯過了這一點，我很抱歉。您可能只是按百分比來劃分，或者只是概括百分比，這就是您剛才提到的那兩件事的暴露情況。我認為這不一定很清楚。謝謝。

Certainly, so as we -- when we estimate for 2024 overall where we stood, we estimate that roughly about 60% to 65% of our revenue was associated with what we call repair and replacement, which really is in and around the municipal business. And when we think about the residential construction component of our business, that probably falls right around, we'll call it sort of 20%, 25%, and then we also have an end market exposure which is in and around the natural gas distribution products which runs a little less than 10%.

當然，當我們對 2024 年的整體情況進行估計時，我們估計大約 60% 到 65% 的收入與我們所謂的維修和更換有關，這實際上與市政業務有關。當我們考慮到我們業務的住宅建築部分時，這個比例可能正好在 20% 到 25% 左右，然後我們還有一個終端市場敞口，即天然氣分銷產品及其周邊市場，這個比例略低於 10%。

Thank you. At this time, I am showing no further questions.

謝謝。目前，我沒有其他問題。

Very good. Well, look, thank you, operator. We thank everyone for taking the time to join our call today. We certainly welcome Melissa to the team and are delighted to have her here. Overall, we think we delivered a very solid performance with some new records in our second quarter. The healthy order levels and resilient and market demand, I think specifically in and around municipal support the guidance that we gave where we did increase our expectations for our 2025 net sales, maintaining our adjusted EBITDA guidance range, and that really is largely due to the higher cost from the recently enacted tariffs.

非常好。好吧，看，謝謝你，接線生。我們感謝大家今天抽出時間參加我們的電話會議。我們非常歡迎梅麗莎加入團隊，並且很高興她能來到這裡。總體而言，我們認為我們第二季的表現非常穩健，創下了一些新紀錄。健康的訂單水準和彈性以及市場需求，我認為特別是在市政支持方面，我們給出的指導確實提高了對 2025 年淨銷售額的預期，維持了調整後的 EBITDA 指導範圍，而這在很大程度上是由於最近實施的關稅導致成本增加。

I think with respect to the tariff environment that we are all addressing and certainly the uncertainty that that brings, I think with the enhanced investments and enhanced operational and supply chain team talent that we have, actions we're taking with respect to pricing, supply chain mitigation, operational initiatives, and cost discipline. We are putting ourselves in the best position that we can to address that. So thank you very much and we look forward to speaking with you again when our third-quarter results are announced in in August. And with that, please conclude the call. Thank you, operator.

我認為，就我們正在應對的關稅環境及其帶來的不確定性而言，我認為隨著我們增加投資、增強營運和供應鏈團隊人才，我們正在採取與定價、供應鏈緩解、營運措施和成本紀律相關的行動。我們正在盡最大努力解決這個問題。非常感謝您，我們期待在八月公佈第三季業績時再次與您交談。請結束本次通話。謝謝您，接線生。

Thank you. This concludes today's conference call. Have a nice day. You may now disconnect.

謝謝。今天的電話會議到此結束。祝你今天過得愉快。您現在可以斷開連線。