What changed in this filing

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Item 1. Business

2020-11-19 compared with 2019-11-20 · 56 added, 31 removed, 221 unchanged (28% of the section changed)

1 unchanged sentence

is a Delaware corporation that was incorporated on September 22, 2005 under the name Mueller Holding Company, Inc.

On June 1, 2006, we completed an initial public offering of 28,750,000 shares of our common stock, and on December 14, 2006, Walter Industries, Inc., our parent company at that time, distributed to its shareholders 85,844,920 shares of our common stock to complete a spin-off of the Company.

On September 23, 2009, we completed a public offering of 37,122,000 shares of common stock.

On April 1, 2012, we sold U.S.

On January 6, 2017, we sold Anvil.

Anvil’s results of operations and the gain from its sale have been classified as discontinued operations.

We are a leading manufacturer and marketer of products and services used in the transmission, distribution and measurement of water in North America.

Our products and services are used by municipalities and the residential and non-residential construction industries.

Certain of our products have leading positions due to their strong brand recognition and reputation for quality, service and innovation.

Some of our products have leading positions due to their strong brand recognition and reputation for quality, service and innovation.

We believe we have one of the largest installed bases of iron gate valves and fire hydrants in the United States.

17 unchanged sentences

Technologies is comprised of the Mueller Systems and Echologics businesses.

Mueller Systems sells water metering systems, products and services directly to municipalities and to waterworks distributors.

Mueller Systems sells water metering systems, products, services and software directly to municipalities and to waterworks distributors.

Echologics sells water leak detection and pipe condition assessment products and services primarily to municipalities.

Index to Financial Statements

Business Strategy

5 unchanged sentences

We expect this expansion to come through internal investments as well as acquisitions.

Develop a fully-integrated technology platform for infrastructure monitoring.

Develop and implement fully-integrated intelligent technology platform for infrastructure testing, monitoring and control.

We have introduced a new software platform, Sentryx, that provides data intelligence to help water utilities make strategic and operational decisions.

1 unchanged sentence

This data includes leak detection, pressure monitoring, advanced metering and water quality, which are aggregated and consolidated within the Sentryx platform, providing utilities with critical information regarding their distribution systems.

Index to Financial Statements

Drive operational excellence.

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We believe this modernization will improve product quality, drive non-price margin expansion and expand our product portfolio.

We expect our large valve manufacturing expansion in Chattanooga will begin full-scale production in 2020, and at the end of 2019 we acquired a property in Kimball, Tennessee to further expand our capabilities in the Chattanooga area and allow us to insource more products and operations.

Our large valve manufacturing expansion in Chattanooga began ramping up production in 2020 and we expect to enter full-scale production in early 2021.

We are in the process of building out our new facility in Kimball, Tennessee to expand our machining and assembly capabilities in the Chattanooga area.

We expect these investments will allow us to capitalize on the growing need for large valves due to the migration to more densely populated, urban areas and an increased focus by customers on products made in America.

1 unchanged sentence

Continue to seek to acquire and invest in businesses and technologies that expand our existing portfolio of businesses or allow us to enter new markets.

We will continue to evaluate the acquisition of strategic businesses, technologies and product lines that have the potential to strengthen our competitive positions, enhance or expand our existing product and service offerings, expand our technological capabilities, provide synergistic opportunities or allow us to enter new markets.

We will continue to evaluate the acquisition of strategic businesses, technologies and product lines that have the potential to strengthen our competitive positions, enhance or expand our existing product and service offerings, expand our technological capabilities, leverage our manufacturing capabilities, provide synergistic opportunities or allow us to enter new markets.

As part of this strategy, we may pursue international opportunities, including acquisitions, joint ventures and partnerships, that allow us to expand product or service offerings or enter new markets.

9 unchanged sentences

These products are typically specified by a water utility for use in its system.

Index to Financial Statements

Water and Gas Valves and Related Products.

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Infrastructure sells fire hydrants for new water infrastructure development, fire protection systems and water infrastructure repair and replacement projects.

Index to Financial Statements

These fire hydrants consist of an upper barrel and nozzle section and a lower barrel and valve section that connects to a water main.

7 unchanged sentences

This large installed base also leads to recurring sales of replacement hydrants and hydrant parts.

Other Products and Services.

Repair Products and Services.

Infrastructure also sells pipe repair products, such as couplings, grips and clamps used to repair leaks, under the HYMAX, Mueller and Krausz brand names.

14 unchanged sentences

Sales of water metering products and systems accounted for 79%, 81% and 79% of Technologies’ net sales in 2020, 2019 and 2018, respectively.

Index to Financial Statements

Water Leak Detection and Pipe Condition Assessment Products and Services .

6 unchanged sentences

We will continue to expand the use of Lean manufacturing and Six Sigma business improvement methodologies where appropriate to safely capture higher levels of quality, service and operational efficiency in our manufacturing facilities in both segments.

Index to Financial Statements

Infrastructure

Infrastructure operates thirteen manufacturing facilities located in the United States, Canada, Israel and China.

Infrastructure operates fourteen manufacturing facilities located in the United States, Canada, Israel and China.

These manufacturing operations include foundry, machining, fabrication, assembly, testing and painting operations.

1 unchanged sentence

Infrastructure’s existing manufacturing capacity is sufficient for anticipated near-term requirements.

However, in order to meet longer-term capacity requirements and modernize some production facilities, Infrastructure is currently expanding its large valve casting capabilities at its foundry location in Chattanooga, Tennessee has acquired a property in nearby Kimball, Tennessee to insource certain activities and assemble certain large valves, and has announced plans to build a new brass foundry in Decatur, Illinois that will replace our existing foundry there upon completion.

However, in order to meet longer-term capacity requirements and modernize some production facilities, Infrastructure has expanded its large valve casting capabilities at its foundry location in Chattanooga, Tennessee, is currently building out its new manufacturing facility in nearby Kimball, Tennessee to insource certain activities and assemble certain large valves, and has started construction of a new brass foundry in Decatur, Illinois that will replace our existing brass foundry located nearby in Decatur.

Infrastructure foundries use both lost foam and green sand casting techniques.

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The table below highlights selected brand names by segment.

Infrastructure

Canada Valve™

LeakFinderRT®

LeakFinderST™

LeakListener®

Mueller Systems®

Infrastructure Technologies

Canada Valve™ Echologics®

Centurion® Echoshore®

Ez-Max® ePulse®

Hydro Gate® Hersey™

Hydro-Guard® LeakFinderRT®

HYMAX® LeakFinderST™

HYMAX VERSA® LeakListener®

Jones® LeakTuner®

Krausz® Mi.Echo®

Milliken™ Mi.Data®

Mueller® Mi.Hydrant™

Pratt® Mi.Net®

Pratt Industrial® Mueller Systems®

Repamax® Sentryx™

Pipe Valve and Hydrant, LLC

See “Item 1A.

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RISK FACTORS-Our business depends on a small group of key customers for a significant portion of our sales.”

Index to Financial Statements

Technologies sells its water metering systems, products and services directly to municipalities and to waterworks distributors and sells water leak detection and pipe condition assessment products and services primarily to municipalities and to utilities.

3 unchanged sentences

RISK FACTORS-Our business depends on a small group of key customers for a significant portion of our sales.”

Index to Financial Statements

We consider backlog to represent orders placed by customers for which goods or services have yet to be delivered.

1 unchanged sentence

Pratt products consist of valves and other parts for large projects that typically require design and build specifications.

The delivery lead time for parts used for these projects can be as long as nine months, and we expect approximately 15% of Pratt’s backlog at the end of 2019 will not be shipped until beyond 2020 .

The delivery lead time for these projects can be longer than one year, and we expect approximately 16% of Pratt’s backlog at the end of 2020 will not be shipped until beyond 2021.

Mueller Systems manufactures or sources water meter systems that are sometimes ordered in large quantities with delivery dates over several years, and we expect approximately 52% of Mueller Systems’ backlog will not be shipped until beyond 2021.

2 unchanged sentences

(in millions)

Pratt $ 87.1 $ 81.6

Mueller Systems 48.2 8.9

15 unchanged sentences

With respect to our specialty valve products such as butterfly, plug, and check valves, our principal competitors are mainly DeZURIK, Val-Matic and McWane, Inc.

We believe the market for many of Infrastructure’s repair products is open to product innovation.

Our current marketing is primarily focused on repair, joining and restraining of water infrastructure piping systems.

The majority of this infrastructure consists of cast iron, ductile iron and plastic pipe, and our repair solutions work well with all of these.

We believe our brand names are generally associated with premium products due to our patented technology and features.

Our primary competitors in the repair market are:

Romac Industries, Smith Blair, Viking Johnson, AVK Group, JCM Industries, and Georg Fisher Ltd..

Index to Financial Statements

The markets for products and services sold by Technologies are very competitive.

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Research and Development

Our primary research and development (“R&D”) facilities are located in Chattanooga, Tennessee and Tel Aviv, Israel for Infrastructure and in Atlanta, Georgia and Toronto, Ontario for Technologies.

Our primary research and development (“R&D”) facilities are located in Chattanooga, Tennessee and in Ariel, Israel for Infrastructure and in Atlanta, Georgia and Toronto, Ontario for Technologies.

The primary focus of these operations is to develop new products, improve and refine existing products and obtain and assure compliance with industry approval certifications or standards (such as AWWA, UL, FM, NSF and The Public Health and Safety Company).

1 unchanged sentence

R&D expenses were $15.0 million, $14.3 million and $11.6 million during 2020, 2019 and 2018, respectively.

Index to Financial Statements

Regulatory and Environmental Matters

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of the Notes to Consolidated Financial Statements.

Human Capital

We believe our employees are our greatest asset.

To ensure their health and well-being, we provide access to benefits and offer programs that support work-life balance and overall well-being including financial, physical and mental health resources.

We also provide maternity and paternity benefits for biological and adoptive parents.

Our core values of respect, integrity, trust, safety and inclusion shape our culture and define who we are.

They are guiding principles that we live by every day and are evident in everything we do.

We strive to attract, develop and retain high performing talent and we support and reward employee performance.

Index to Financial Statements

We are committed to upholding fundamental human rights and believe that all human beings should be treated with dignity, fairness, and respect.

We strive to promote inclusion in the workplace, engage with communities to build upon our understanding of potential human rights issues, and encourage our suppliers to treat their employees — and to interact with their communities — in a manner that respects human rights.

We condemn human rights abuses and do not condone the use of slave or forced labor, human trafficking, child labor, the degrading treatment of individuals, physical punishment, or unsafe working conditions.

All employees are required to understand and obey local laws, to report any suspected violations, and to act in accordance with our Core Values and Code of Conduct.

At September 30, 2020, we employed approximately 3,100 people, of whom 84% work in the United States.

1 unchanged sentence

Our locations with employees covered by such agreements are presented below.

Expiration of current agreement(s)

Chattanooga, TN

November 2019, January 2020 and October 2021

Albertville, AL

September 2021

Location Expiration of current agreement(s)

Chattanooga, TN October 2022, January 2023

Decatur, IL June 2025

Albertville, AL October 2025

Aurora, IL September 2021

We believe relations with our employees, including those represented by collective bargaining agreements, are good.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business