Mueller Water Products Inc.

Overview Key strengths Key risks Strong brand recognition among waterworks customers. Considerably smaller than similarly rated peers with a more limited operational focus. Exposed to favorable trends in the municipal utilities market. High customer and geographic concentration. Large installed base across the U.S. Exposed to cyclical residential and nonresidential construction end markets. Mueller generated record revenue of $1.25 billion during fiscal 2022 primarily driven by higher pricing across most product lines and healthy demand across its municipal, utility, and residential end-markets. While we expect continued strong demand in 2023 from both its municipal and utility end-markets, an ever-increasing risk of a recession in the U.S. within the next 12 months will likely translate into a materially weaker residential market. As

...Municipal and utility demand will drive performance over the next 12-24 months as recession concerns loom. Mueller generated record revenue of $1.25 billion during fiscal 2022 primarily driven by higher pricing across most product lines and healthy demand across its municipal, utility, and residential end-markets. While we expect continued strong demand in 2023 from both its municipal and utility end-markets, an ever-increasing risk of a recession in the U.S. within the next 12 months will likely translate into a materially weaker residential market. As of October month-end, the company began to see a slowdown in order activity, which we believe will continue, specifically within its residential end-market. The U.S. Federal Reserve continues to raise interest rates, making homes and development projects more expensive for buyers and developers, thereby curbing demand for Mueller's residential products and offerings and depressing sales volume. Nevertheless, we believe Mueller's record backlog...

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