Atlanta-based Mueller Water Products Inc. has announced net income of $10.3 million on net sales of $212.6 million in the first quarter of its 2020 fiscal year, which ended Dec. 31, 2019. That compares with a net loss of $21 million in the first quarter of its 2019 fiscal year on net sales of $192.8 million.
Scott Hall, the company’s president and CEO, points to improved numbers compared with the previous quarter (ending Sept. 30, 2019) as an encouraging sign for the firm. “We had a very good start to 2020. Our net sales increased 10.3 percent with organic net sales increasing 3.1 percent” compared with the previous quarter, he comments.
“We benefited from both higher pricing and increased shipment volumes of our core Infrastructure products,” continues Scott. “Higher pricing, favorable product mix and the addition of [plumbing products maker] Krausz Industries more than offset increased costs from tariffs and inflation during the quarter.”
Looking ahead, he comments, “For fiscal 2020, we expect to see continued favorable demand in our end markets driven by healthy municipal spending and improved residential construction. Despite continued uncertainty from global and domestic matters, we are increasing our expectations for growth both in net sales and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] for fiscal 2020.”
Scott adds, “We expect that the large capital investment projects, which we previously announced, will both accelerate our sales growth by broadening our product capabilities and expand gross margins by modernizing our facilities, equipment and processes.”
Among those infrastructure investments is a new brass foundry being built in Decatur, Illinois. That foundry, part of a larger existing Mueller Water Products complex in Decatur, is expected to employ about 250 people and will be “one of the largest state-of-the-art, finished goods brass foundries in the world,” according to the firm.
The company has not disclosed whether the proposed new foundry will replace any of its existing foundry capacity in Chattanooga and Kimball, Tennessee.
In a December 2019 presentation to investors, Mueller Water Products indicated it expects heightened demand for its water system products since municipalities need to repair and upgrade their infrastructure tied to the delivery of safe drinking water.