Mueller Water Products (MWA) Q1 2026 earnings summary

Executive summary

• Achieved record first-quarter net sales of $318.2 million, up 4.6% year-over-year, driven by higher pricing and manufacturing efficiencies, with adjusted EBITDA and margin also reaching new highs.

• Leadership transition underway, with a new CEO effective February 2026 and outgoing CEO remaining as senior advisor through year-end.

• Raised full-year 2026 guidance for both net sales and adjusted EBITDA, reflecting strong Q1 performance and positive market outlook.

• Continued strategic investments in capacity, operational efficiencies, and foundry upgrades to drive sustained margin expansion.

Financial highlights

• Net sales reached $318.2 million, up 4.6% year-over-year, with gross profit rising 16.3% to $119.8 million and gross margin expanding 380 bps to 37.6%.

• Adjusted EBITDA grew 13.5% to $72.1 million, with margin expanding to 22.7%.

• Adjusted net income per diluted share increased 16% to $0.29; reported net income per diluted share was $0.27.

• Operating income increased 19.6% to $56.7 million; free cash flow was $44.0 million, representing 96% of adjusted net income.

• Cash and cash equivalents at quarter-end were $459.6 million, with total debt of $452.3 million and total liquidity of $623.3 million.

Outlook and guidance

• Fiscal 2026 net sales guidance raised to $1,470–$1,490 million, up 2.8%–4.2% year-over-year.

• Adjusted EBITDA guidance increased to $355–$360 million, up 8.8%–10.4% year-over-year, with margin improvement of 140 bps.

• Free cash flow as a percentage of adjusted net income expected to exceed 85% for fiscal 2026; capital expenditures projected at $60–$65 million.

• H2 Adjusted EBITDA margin expected to exceed H1, driven by seasonality and price actions.

• SG&A expenses projected at $243–$247 million; net interest expense at $5–$6 million; effective tax rate at 25%–27%.