What changed in this filing

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Item 1. Business

2022-11-18 compared with 2021-11-19 · 171 added, 169 removed, 168 unchanged (67% of the section changed)

Mueller Water Products, Inc.

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

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

(“Mueller,” “we” or the “Company”) is a 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.

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Our consolidated net sales were $1,247.4 million in 2022.

We operate our business through two segments, Infrastructure and Technologies.

We operate our business through two segments, Water Flow Solutions and Water Management Solutions.

Segment sales, operating results and additional financial data and commentary are provided in the Segment Analysis section in Part II, Item 7.

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Organization Updates

On December 3, 2018, we completed our acquisition of Krausz Industries Development Ltd.

and subsidiaries (“Krausz”), a manufacturer of pipe couplings, grips and clamps with operations in the United States and Israel, for $140.7 million, net of cash acquired, including the assumption and simultaneous repayment of certain debt of $13.2 million.

The acquisition of Krausz was financed with cash on hand.

The results of Krausz are included within our Infrastructure segment for all periods following the acquisition date.

In October 2019, we acquired the remaining 51% noncontrolling ownership interest of our previously existing joint venture operation.

In October 2019, we acquired the remaining 51% noncontrolling ownership interest of our previously existing industrial valve joint venture, which we originally entered into in July 2014.

On June 14, 2021, we acquired all the outstanding capital stock of i2O Water Ltd (“i2O’), a provider of pressure management solutions to more than 100 water companies in 45 countries.

i2O is organized under the laws of the United Kingdom.

The consolidated balance sheet at September 30, 2021 includes the preliminary estimated fair values of the net assets of i2O.

The results of i2O’s operations and cash flows for the period subsequent to the acquisition are included in the consolidated statement of operations and consolidated statement of cash flows, respectively, since the acquisition date.

Infrastructure

Infrastructure manufactures valves for water and gas systems, including iron gate, butterfly, tapping, check, knife, plug, automatic control and ball valves, as well as dry-barrel and wet-barrel fire hydrants, service brass products and a broad line of pipe repair products, such as clamps and couplings used to repair leaks.

Infrastructure’s net sales were $1,022.0 million in 2021.

Sales of Infrastructure products are driven principally by spending on water and wastewater infrastructure upgrade, repair and replacement, and by construction of new water and wastewater infrastructure, which is typically associated with construction of new residential communities.

Infrastructure sells its products primarily through waterworks distributors.

We believe a majority of Infrastructure’s 2021 net sales were for infrastructure upgrade, repair and replacement.

Infrastructure also sells products for pipe repair to natural gas utilities.

Technologies offers residential and commercial water metering, water leak detection and pipe condition assessment products, systems and services.

Technologies’ net sales were $89.0 million in 2021.

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

i2O, which we acquired during our fiscal third quarter of 2021, sells pressure management intelligent water network solutions and software.

Effective October 1, 2021, we implemented a new management structure designed to increase revenue growth, drive operational excellence, accelerate new product development and enhance profitability.

We believe the reorganization has and will continue to strengthen the alignment of products, solutions and services with customer needs, accelerate new product introductions and improve product life cycle management.

Our two operating segments, Water Flow Solutions and Water Management Solutions, align with this new management structure.

Water Flow Solutions

The Water Flow Solutions product portfolio includes iron gate valves, specialty valves and service brass products.

Net sales of products in the Water Flow Solutions business unit were approximately 57% of fiscal 2022 consolidated net sales.

Water Management Solutions

The Water Management Solutions product and service portfolio includes fire hydrants, repair and installation, natural gas, metering, leak detection, pressure control and software products.

Net sales of products and services in the Water Management Solutions business unit were approximately 43% of fiscal 2022 consolidated net sales.

Index to Financial Statements

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Accelerate development of new products.

We plan to continue to increase investments in our product development capabilities, including expanding our engineering staff, to develop and market new products and services.

We plan to continue to invest in our product development capabilities, including expanding our research and development staff, to develop and market new products and services.

We expect to add new products to our portfolio and offer new products into different end markets.

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

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.

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

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

As our customers seek to use real-time data and analytics to manage and repair their aging infrastructures more efficiently, we believe we are uniquely positioned to provide solutions given our expertise and the large installed base of our products.

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Drive operational excellence.

We seek to bring best practices focused on Lean manufacturing with an investment mindset to deliver manufacturing productivity improvements.

We expect these efforts will facilitate innovation and new product development, helping us drive sales growth and improve product margins.

We seek to bring best practices focused on Lean manufacturing and Six Sigma business process improvement methodologi es, with an investment mindset to deliver manufacturing productivity improvements.

We expect these efforts will facilitate innovation and new product development, drive sales growth and improve product margins.

Productivity improvements at our facilities should allow us to lower costs, which can fund additional manufacturing initiatives and continued investment in product development.

Modernize manufacturing facilities.

We are prioritizing capital investments through 2023 to modernize our manufacturing facilities and processes.

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

Our large valve manufacturing expansion in Chattanooga, Tennessee continued to ramp up production in 2021, and we expect to enter full-scale production in 2022.

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

In March 2021, we announced plans to consolidate our facilities in Aurora, Illinois and Surrey, British Columbia into the Kimball facility.

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

In addition, we are building a new brass foundry in Decatur, Illinois, scheduled to begin production late in 2022, to replace our nearby, existing brass foundry.

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 are prioritizing capital investments throug h 2023 to modernize our manufacturing facilities and processes.

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

Our large valve manufacturing expansion in Chattanooga, Tennessee entered near full-scale production during the fiscal year 2022 .

We have completed the build out of our new facility in Kimball, Tennessee to support our machining and assembly capabilities in the Chattanooga area.

During the f iscal year ended September 30, 2022, we completed the consolidation of our facilities in Aurora, Illinois and Surrey, British Columbia into the Kimball, Tennessee facility.

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

In addition, we are building a new brass foundry in Decatur, Illinois, scheduled to start-up initial production in 2023, although we do not expect full production until 2024 when it replaces our nearby, existing brass foundry.

Continue to seek, acquire, and invest in businesses and technologies that expand our existing portfolio 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 position, enhance or expand our existing product and service offerings, expand our technological capabilities, leverage our manufacturing capabilities, provide synergistic opportunities, enhance our customer relationships or allow us to enter new markets.

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Description of Products and Services

We offer a broad line of water infrastructure, flow control, metrology and leak detection products and services primarily in the United States and Canada.

Infrastructure sells water and gas valves, service brass, fire hydrants and pipe repair products.

Technologies sells water metering products and systems as well as leak detection and pipe condition assessment products and services.

We offer a broad line of water infrastructure, flow control, metering and leak detection products and services primarily in the United States and Canada.

Water Flow Solutions sells iron gate and specialty valves, and service brass products.

Water Management Solutions sells hydrants, repair and installation, natural gas, metering, leak detection and pressure control products and solutions.

Our products are designed, manufactured and tested in compliance with relevant industry standards.

Infrastructure

Our water distribution products are manufactured to meet or exceed American Water Works Association (“AWWA”) Standards and, where applicable, certified to National Science Foundation (“NSF”)/American National Standards Institute (“ANSI”) Standard

Index to Financial Statements

Infrastructure manufactures valves for water and gas systems, as well as fire hydrants, service brass and pipe repair products for water distribution.

Infrastructure’s water distribution products are manufactured to meet or exceed American Water Works Association (“AWWA”) Standards and, where applicable, certified to NSF/ANSI Standard 61 for potable water conveyance.

In addition, Underwriters Laboratory (“UL”) and FM Approvals (“FM”) have approved many of these products.

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

Water and Gas Valves and Related Products.

Infrastructure manufactures valves for water and gas systems, including iron gate, butterfly, tapping, check, knife, plug, automatic control and ball valves, and sells these products under a variety of brand names, including Mueller, Pratt, U.S.

Pipe Valve and Hydrant, and Singer Valve.

Water and gas valves and related products, generally made of iron or brass, accounted for $681.1 million, $583.2 million and $576.4 million of our gross sales in our 2021, 2020 and 2019 fiscal years, respectively.

These valve products are used to control distribution and transmission of potable water, non-potable water or gas.

61 for potable water conveyance.

Underwriters Laboratory (“UL”) and FM Approvals (“FM”) have approved many of these products.

Additionally, our products are typically specified by a water utility for use in its infrastructure system.

, leak detection and pressure control products

Water Flow Solutions

Water Flow Solutions’ product portfolio includes iron gate valves, specialty valves and service brass products.

We recognized $714.1 million, $617.8 million and $532.2 million of net sales in our 2022, 2021 and 2020 fiscal years, respectively, for Water Flow Solutions products.

Water Valves and Related Products.

Water Flow Solutions manufactures valves for water systems, including iron gate, butterfly, tapping, check, knife, plug, and ball valves, and sells these products under a variety of brand names, including Mueller ® , Pratt ® , and U.S.

Pipe Valve and Hydrant.

These valve products are used to control distribution and transmission of potable water and non-potable water.

Water valve products typically range in size from ¾ inch to 36 inches in diameter.

Infrastructure also manufactures significantly larger valves as custom orders through some of its product lines.

Water Flow Solutions also manufactures significantly larger valves as custom orders through some of its product lines.

Most of these valves are used in water transmission or distribution, water treatment facilities or industrial applications.

Infrastructure also produces machines and tools for tapping, drilling, extracting, installing and stopping-off, which are designed to work with its water and gas fittings and valves as an integrated system.

Water Management Solutions

Water Management Solutions’ product and service portfolio includes fire hydrants, repair and installation, natural gas, metering, leak detection, pressure control and software products.

We recognized $533.3 million, $493.2 million and $431.9 million of net sales in our 2022, 2021, and 2020 fiscal years respectively, for Water Management Solutions products.

Fire Hydrants.

Infrastructure manufactures dry-barrel and wet-barrel fire hydrants.

Sales of fire hydrants and fire hydrant parts accounted for $236.7 million, $201.4 million and $199.7 million of our gross sales in our 2021, 2020 and 2019 fiscal years, respectively.

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

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

Water Management Solutions manufactures dry-barrel and wet-barrel fire hydrants.

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

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

In dry-barrel hydrants, the valve connecting the barrel of the hydrant to the water main is located below ground at or below the frost line, which keeps the upper barrel dry.

Infrastructure sells dry-barrel fire hydrants under the Mueller and U.S.

Pipe Valve and Hydrant brand names in the United States and the Canada Valve brand name in Canada.

Infrastructure also makes wet-barrel hydrants, where the valves are located in the hydrant nozzles and the barrel contains water at all times.

Water Management Solutions sells dry-barrel fire hydrants under the Mueller and U.S.

Pipe Valve and Hydrant brand names in the United States and Mueller and the Canada Valve™ brand names in Canada.

Water Management Solutions also makes wet-barrel hydrants, where the valves are located in the hydrant nozzles and the barrel contains water at all times.

Wet-barrel hydrants are made for warm weather climates, such as in California and Hawaii, and are sold under the Jones ® brand name.

Most municipalities have approved a limited number of fire hydrant brands for installation within their systems as a result of their desire to use the same tools and operating instructions across their systems and to minimize inventories of spare parts.

We believe Infrastructure’s large installed base of fire hydrants throughout the United States and Canada, reputation for superior quality and performance as well as specification positions have contributed to the leading market position of its fire hydrants.

Most municipalities have approved a limited number of fire hydrant brands for installation as a result of their desire to use the same tools and operating instructions across their systems and to minimize inventories of spare parts.

We believe the large installed base of Mueller fire hydrants throughout the United States and Canada, reputation for superior quality and performance as well as specification positions have contributed to the leading market position of its fire hydrants.

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

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.

Technologies provides innovative technology-based solutions, products and services that actively diagnose, measure and monitor the delivery of water.

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

Water Metering Products and Systems .

In Technologies, we manufacture and source a variety of water technology products under the Mueller and Hersey brand names that are designed to help water providers accurately measure and control water usage.

Technologies offers a complete line of residential, fire line and commercial metering solutions.

Water Management Solutions manufactures and sources a variety of water technology products under the Mueller ® brand name that are designed to help water providers accurately measure and control water usage.

Water Management Solutions offers a complete lin e of residential, fire line and commercial metering solutions.

Residential and commercial water meters are generally classified as either manually read meters or remotely read meters via radio technology.

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These systems provide the utilities with more frequent and diverse data at specified intervals from the utilities’ meters and allow for two-way communication.

Technologies sells both AMR and AMI

Index to Financial Statements

systems and related products.

Water Management Solutions sells both AMR and AMI systems and related products.

Our remote disconnect water meter enables the water flow to be stopped and started remotely via handheld devices or from a central operating facility.

Sales of water metering products and systems accounted for 78%, 79% and 81% of Technologies’ net sales in our 2021, 2020 and 2019 fiscal years, respectively.

Index to Financial Statements

Water Leak Detection and Pipe Condition Assessment Products and Services .

Technologies develops technologies and offers products and services under the Echologics brand name that can non-invasively (without disrupting service or introducing a foreign object into the water system) detect underground leaks and assess the condition of water mains comprised of a variety of materials.

Water Management Solutions develops technologies and offers products and services under the Echologics ® brand name that can non-invasively (i.e., without disrupting service or introducing a foreign object into the water system) detect underground leaks and assess the condition of water mains comprised of a variety of materials.

We leverage our proprietary acoustic technology to offer leak detection and condition assessment surveys.

We also offer fixed leak detection systems that allow customers to continuously monitor and detect leaks on water distribution and transmission mains.

We believe Technologies’ ability to offer non-invasive leak detection and pipe condition assessment services is a key competitive advantage.

Intelligent Water Network Solutions.

i2O, which was acquired in June of 2021, develops and provides a range of intelligent water solutions including advanced pressure management, network analytics, event management and data logging.

We believe Water Management Solutions’ ability to offer non-invasive leak detection and pipe condition assessment services is a key competitive advantage.

Additionally, Water Management Solutions produces machines and tools for tapping, drilling, extracting, installing and stopping-off, which are designed to work with its water and gas fittings and valves as an integrated system.

We also provide gas valve products primarily for use in gas distribution systems.

With our Singer valve and i2O products, we provide a range of intelligent water solutions including pressure control valves, advanced pressure management, network analytics, event management and date logging.

Manufacturing

PROPERTIES” for a description of our principal manufacturing facilities.

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.

Infrastructure

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

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

Mueller Water Products operates ten manufacturing facilities located in the United States, Israel and China.

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

Not all facilities perform each of these operations.

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 has expanded its large valve casting capabilities at its foundry located in Chattanooga, Tennessee, and is currently building out its new manufacturing facility in nearby Kimball, Tennessee to insource certain activities and assemble certain large valves.

Additionally, Infrastructure is constructing 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.

Infrastructure uses the lost foam technique for fire hydrant production in its Albertville, Alabama facility and for iron gate valve production in its Chattanooga, Tennessee facility.

Our existing manufacturing capacity is sufficient for anticipated near-term requirements.

In order to meet longer-term capacity requirements and modernize some production facilities, however, we have expanded the large valve casting capabilities at the foundry located in Chattanooga, Tennessee, and are currently building out our new manufacturing facility in nearby Kimball, Tennessee to expa nd certain activities and assemble some of our large valves.

Additionally, we have under construction a new brass foundry in Decatur, Illinois, that will replace our existing brass foundry located nearby in Decatur.

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

We use the lost foam technique for fire hydrant production in our Albertville, Alabama, facility and for iron gate valve production in our Chattanooga, Tennessee, facility.

The lost foam technique has several advantages over the green sand technique for high-volume products, including a reduction in the number of manual finishing operations, lower scrap levels and the ability to reuse some of the materials.

Technologies designs, manufactures, and assembles water metering products in Cleveland, North Carolina.

Certain Technologies products are also manufactured in facilities primarily dedicated to Infrastructure products.

Technologies designs and supports AMR and AMI systems in our research and development center of excellence for software and electronics in Atlanta, Georgia, designs leak detection and condition assessment products in Toronto, Ontario and designs and supports intelligent water solutions products and services in Southampton, United Kingdom.

Additionally, we design, manufacture, and assemble water metering products in Cleveland, North Carolina.

In Atlanta, Georgia, we design and support AMR and AMI systems in our research and development center of excellence for software and electronics.

Our research and development center in Toronto, Ontario, Canada, designs and supports leak detection and condition assessment.

Product design and support for our intelligent water solutions products and services for pressure management are in Southampton, United Kingdom.

Purchased Components and Raw Materials

Our products are made using various purchased components and several basic raw materials, including brass ingot, scrap steel, sand and resin.

Purchased parts and raw materials represented approximately 36% and 20%, respectively, of Cost of sales in 2021.

Our products are made using various purchased components and seve ral basic raw materials, including brass ingot, scrap steel, sand and resin.

Purchased parts and raw materials represented approximately 34% and 18%, r espectively, of Cost of sales in 2022.

Patents, Licenses and Trademarks

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We have filed and continue to file when appropriate, patent applications used in connection with our business and products.

Index to Financial Statements

patents for technology underlying the majority of our products have been in the public domain for many years, and we do not believe third-party patents individually or in the aggregate are material to our business.

Many of the patents for technology underlying the majority of our products have been in the public domain for many years, and we do not believe third-party patents individually or in the aggregate are material to our business.

However, we consider the pool of proprietary information, consisting of expertise and trade secrets relating to the design, manufacture and operation of our products to be particularly important and valuable.

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See “Item 1A.

RISK FACTORS-Any inability to protect our intellectual property or our failure to effectively defend against intellectual property infringement claims could adversely affect our competitive position.”

The table below highlights selected brand names by segment.

Infrastructure Technologies

Canada Valve™ Echologics®

Centurion® Echoshore®

Ez-Max® ePulse®

Hydro Gate® Hersey™

Hydro-Guard® i2O Water Ltd

RISK FACTORS-Any

Index to Financial Statements

inability to protect our intellectual property or our failure to effectively defend against intellectual property infringement claims could adversely affect our competitive position.”

Our brand names include:

Canada Valve ™

Hydro-Guard ®

i2O Water Ltd

HYMAX® LeakFinderRT ®

HYMAX VERSA® LeakFinderST™

Jones® LeakListener®

Krausz® LeakTuner®

Milliken™ Mi.Echo®

Mueller® Mi.Data®

Pratt® Mi.Hydrant™

Pratt Industrial® Mi.Net®

Repamax® Mueller Systems®

Repaflex® Sentryx™

HYMAX VERSA ®

LeakFinderST ™

LeakListener ®

Pratt Industrial ®

Mueller Systems ®

Pipe Valve and Hydrant, LLC

Our water infrastructure business depends upon construction activity, which is seasonal in many areas as a result of the impact of cold weather conditions on construction.

Parts of our business depends upon construction activity, which is seasonal in many areas as a result of the impact of cold weather conditions on construction.

Net sales and operating income have historically been lowest in the quarters ending December 31 and March 31 when the northern United States and all of Canada generally face weather conditions that restrict significant construction and other field crew activity.

Generally speaking, for Infrastructure, approximately 45% of a fiscal year’s net sales occurs in the first half of the fiscal year with 55% occurring in the second half of the fiscal year, though this pattern was disrupted by the pandemic in 2020.

See “Item 1A.

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Sales, Marketing and Distribution

We sell primarily to distributors.

We sell primarily to national and regional waterworks distributors in the U.S.

Our distributor relationships are generally non-exclusive, but we attempt to align ourselves with key distributors in the principal markets we serve.

We believe “Mueller” is the most recognized brand in the United States water infrastructure industry.

Infrastructure

Infrastructure sells its products primarily through waterworks distributors to a wide variety of end user customers, including municipalities, water and wastewater utilities, gas utilities, and fire protection and construction contractors.

Sales of our products are heavily influenced by the specifications for the underlying projects.

Approximately 8%, 7% and 8% of Infrastructure’s net sales were to Canadian customers in our 2021, 2020 and 2019 fiscal years, respectively.

Index to Financial Statements

Infrastructure’s extensive installed base, broad product range and well-known brands have led to many long-standing relationships with the key distributors in the principal markets we serve.

Our extensive installed base, broad product range and well-known brands have led to many long-standing relationships with the key distributors in the principal markets we serve.

Our distribution network covers all of the major locations for our principal products in the United States and Canada.

Although we have long-standing relationships with most of our key distributors, we typically do not have long-term contracts with them, including our two largest distributors, which together accounted for approximately 38%, 35% and 34% of Infrastructure’s gross sales in our 2021, 2020 and 2019 fiscal years, respectively.

The loss of either of these distributors would have a material adverse effect on our business.

See “Item 1A.

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

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, and intelligent water network solutions primarily to municipalities and to utility companies.

Technologies’ five largest customers accounted for approximately 48%, 45% and 50% of its gross sales in our 2021, 2020 and 2019 fiscal years, respectively.

The loss of any of these customers would have a material adverse effect on our business.

Although we have long-standing relationships with most of our key distributors, we typically do not have long-term contracts with them, including our two largest distributors, which together accounted for approximately 40%, 39% and 34% of our gross sales in 2022, 2021 and 2020 fiscal years, respectively.

See “Item 1A.

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

Water Flow Solutions

Water Flow Solutions sells its products primarily through waterworks distributors to a wide variety of end user customers, including water and wastewater utilities, and fire protection and constructi on contractors.

Sales of the products are heavily influenced by the specifications for the underlying projects.

Approximately 8% of Water Flow Solutions’ net sales were to Canadian customers in our fiscal year 2022, and approximately 7% in fiscal years 2021 and 2020.

Water Management Solutions

Water Management Solutions sells its products primarily through waterworks distributors to a wide variety of end user customers, including water and wastewater utilities, gas utilities, integrated suppliers, as well as fire protection and construction contractors.

Sales of our products are heavily influenced by the specifications for the underlying projects.

Approximately 7% of Water Management Solutions’ net sales were to Canadian customers in fiscal year 2022, and 8% in fiscal years 2021 and 2020.

Index to Financial Statements

Water Management Solutions also sells its water metering systems, products and services directly to municipalities and to waterworks distributors, and sells water leak detection, pressure monitoring, and pipe condition assessment products and services, and intelligent water network solutions primarily to municipalities and utility companies.

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

Backlog is a meaningful indicator for several of our product lines in Infrastructure and in our metering business in Technologies.

The delivery lead time for these product lines can be longer than one year, and we expect approximately 6% of Infrastructure’s backlog at the end of 2021 will not be shipped until beyond 2022.

Technologies manufactures or sources water meter systems that are sometimes ordered in large quantities with delivery dates over several years, and we expect approximately 23% of Technologies’ backlog will not be shipped until beyond 2022.

Backlogs for Infrastructure and Technologies are as follows.

Backlog is a meaningful indicator for many of our product lines.

The delivery lead time for certain product lines can be longer than one year, and we expect approximately 7% of Water Flow Solutions’ backlog at the end of 2022 will not be shipped until beyond 2023.

Water Management Solutions manufactures or sources water meter systems that are sometimes ordered in large quantities with delivery dates over several years.

We expect approximatel y 1% of W ater Management Solutions’ backlog will not be shipped until beyond 2023.

Due to demand levels in our end markets, we have experienced record levels of short-cycle backlog, primarily for our iron gate, service brass and hydrant products.

Backlog for Water Management Solutions and Water Flow Solutions are as follows:

September 30,

(in millions)

Infrastructure $ 391.2 $ 147.6

Technologies 49.0 72.8

Water Flow Solutions $ 419.1 $ 287.9

Water Management Solutions 309.8 152.3

Total backlog $ 728.9 $ 440.2

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We consider our installed base, product quality, customer service level, brand recognition, innovation, distribution and technical support to be competitive strengths.

The competitive environment for most of Infrastructure’s valve and hydrant products is mature and many end users are slow to transition to brands other than their historically preferred brand making it difficult to increase market share in this environment.

We believe our fire hydrants and valves enjoy strong competitive positions based primarily on the extent of their installed base, product quality, specified position and brand recognition.

Our principal competitors for fire hydrants and iron gate valves are McWane, Inc.

The competitive environment for most of Water Flow Solutions’ valve products is mature and many end users are slow to transition to brands other than their historically preferred brands making it difficult to increase market share in this environment.

We believe our valves enjoy strong competitive positions based primarily on the extent of their installed base, product quality, specified position and brand recognition.

Our principal competitors for iron gate valves are McWane, Inc.

and American Cast Iron Pipe Company.

The primary competitors for our brass products are The Ford Meter Box Company, Inc.

The primary competitors for our service brass products are The Ford Meter Box Company, Inc.

McDonald Mfg.

Many brass valves are interchangeable among different manufacturers.

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 markets for many of Infrastructure’s repair products are 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

Index to Financial Statements

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 as a result of our patented technology and features.

Many service brass valves are interchangeable among different manufacturers.

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

The markets for products and services sold by Water Management Solutions are very competitive, with some mature products, and many end users are slow to transition to brands other than their historically preferred brands.

We believe that our hydrants enjoy a strong competitive position based primarily on the extent of their installed base, product quality, specified position and brand recognition.

Our principal competitors for hydrants are McWane, Inc.

and American Cast Iron Pipe Company.

We believe the markets for many of our repair products are open to product innovation.

For our pipe repair products, we believe our brand names, including Krausz ® , are generally associated with premium products as a result of our patented technology and superior features.

Our current marketing strategy 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.

Our repair solutions work well with all of these.

Our primary competitors in the repair market are:

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

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

Technologies sells water metering products and systems, primarily in the United States.

We believe a substantial portion of this market is in the process of transitioning from manually read meters to electronically read meters, but we also expect this transition to be relatively slow and that many end users will be reluctant to adopt brands other than their historically preferred brand.

Although Technologies’ market position is relatively small, we believe our electronically read meters and associated technology are well positioned to gain a greater share of these markets.

Our principal competitors are Sensus, Itron, Inc., Neptune Technology Group Inc., Badger Meter, Inc., and Master Meter, Inc.

Technologies also sells water leak detection and pipe condition assessment products and services in North America, the United Kingdom and select countries in Europe, Asia and the Middle East, with our primary markets being the United States and Canada.

Index to Financial Statements

Within Water Management Solutions, we also sell water metering products and systems, primarily in the United States.

We believe a substantial portion of this market is in the process of transitioning from manually read meters to electronically read meters;

however, we expect this transition to be relatively slow and that many end users will be reluctant to adopt brands other than their historically preferred brand.

Although Water Management Solutions’ market position is relatively small, we believe our electronically read meters and associated technology are well positioned to gain a greater share of these markets.

Our principal competitors are Sensus, Neptune Technology Group Inc., Badger Meter, Inc., Itron, Inc., and Master Meter, Inc.

We also sell pressure control valves and pressure loggers through our Singer Valve and i2O products.

The primary competitors for these products are Cla-Val, Watts, OCV, Ross Valve, Bermad and Halma.

Water Management Solutions also sells water leak detection and pipe condition assessment products and services in North America, the United Kingdom and select countries in Europe, Asia and the Middle East, with our primary markets being the United States and Canada.

The worldwide market for leak detection and pipe condition assessment is highly fragmented with numerous competitors.

Our more significant competitors are Pure Technologies Ltd., Gutermann AG and Syrinix Ltd.

Additionally, we sell gas repair products which are primarily used on distribution lines.

Our primary competitors for these products are Smith Blair, T.D.

Williamson, and A.Y.

Research and Development

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

Our primary research and development (“R&D”) facilities are located in Chattanooga, Tennessee;

Ariel, Israel;

Atlanta, Georgia;

Toronto, Ontario;

and Southampton, United Kingdom.

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.

At September 30, 2021, we employed 46 people dedicated to R&D activities.

R&D expenses were $24.5 million, $17.1 million and $15.0 million during 2022, 2021 and 2020, respectively.

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Under CERCLA, joint and several liability may be imposed on operators, generators, site owners, lessees and others regardless of fault or the legality of the original activity that caused or resulted in the release of the hazardous substances.

Thus, we may be subject to liability under CERCLA and similar state laws for properties that (1) we currently own, lease or operate, (2) we, our predecessors, or former subsidiaries previously owned, leased or operated, (3) sites to which we, our predecessors or former subsidiaries sent waste materials, and (4) sites at which hazardous substances from our facilities’ operations have otherwise come to be located.

Thus, we may be subject to liability under CERCLA and similar state laws for properties that:

(1) we currently own, lease or operate;

(2) we, our predecessors, or former subsidiaries previously owned, leased or operated;

(3) sites to which we, our predecessors or former subsidiaries sent waste materials;

and (4) sites at which hazardous substances from our facilities’ operations have otherwise come to be located.

The purchaser of U.S.

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of the Notes to Consolidated Financial Statements.

Index to Financial Statements

Our operations are subject to federal, state and local laws, regulations and ordinances relating to various environmental, health and safety matters.

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Except for certain orders issued by environmental, health and safety regulatory agencies, with which we believe we are in compliance and which we believe are immaterial to our financial condition, results of operations and liquidity, we are not currently named as a party in any judicial or administrative proceeding relating to environmental, health and safety matters.

Index to Financial Statements

Greenhouse gas ("GHG") emissions have increasingly become the subject of political and regulatory focus.

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It is likely that additional climate change related mandates will be forthcoming, and it is expected that they may adversely impact our costs by increasing energy costs and raw material prices, requiring operational or equipment modifications to reduce emissions and creating costs to comply with regulations or to mitigate the financial consequences of such compliance.

We work to minimize the amount of water we use at our manufacturing facilities and maintain stringent water quality standards.

Our environmental strategy focuses on responsible sourcing and manufacturing sustainable products that address numerous water infrastructure challenges.

We have established reduction targets for key environmental performance indicators such as GHG emissions, internal water withdrawal intensity and waste to landfill, as well as targets for increased use of recycled materials in our products.

In connection with these efforts, we work to minimize the amount of water we use at our manufacturing facilities and maintain stringent water quality standards.

Our processes are designed to return the water used in manufacturing at a quality level that does not negatively impact the receiving environment.

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Our anticipated capital expenditures for environmental projects are not expected to have a material effect on our financial condition, results of operations or liquidity.

Index to Financial Statements

Human Capital

We believe our employees are our greatest asset and we strive to provide a safe, inclusive, high-performance culture where our people thrive.

We believe our employees are our greatest asset and we strive to provide a safe, inclusive, high-performance culture where our people can thrive.

We strive to recruit, develop, engage, train and protect our workforce.

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

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

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

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Living wage is defined as the minimum necessary income for a worker to meet the worker’s basic needs, which can fluctuate based on physical location and other local factors.

We based our calculations on a single worker with no children.

We are dedicated to our employees and their health and well-being.

We base our calculations on a single worker with no children.

We are dedicated to our employees’ 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, such as those listed below.

Index to Financial Statements

Financial Health and Wellness Work-Life Balance

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Commitment to Diversity and Inclusion.

We strive to promote inclusion in the workplace, engage with communities to build on 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 strive to promote inclusion in the workplace, to build on our understanding of potential human rights issues by engaging with appropriate communities, and to interact with our employees and all communities in a manner that respects human rights.

We encourage our suppliers to follow these practices as well.

As of November 18, 2022, women represented 27% and minorities represented 36% of our Board of Directors.

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.

We have recently completed a pay equity study for all employees and job grades based on gender and race.

We believe we addressed any anomalies identified through appropriate pay adjustments.

We also strive to ensure all new employee offers and internal promotions are aligned with the market and are equitable on an internal basis.

We launched a Diversity and Inclusion (“D&I”) Council during our 2021 fiscal year that is governed by executive sponsors and includes representatives from each United States plant location, as well as our Headquarters.

Our D&I Council is working to establish an overall diversity and inclusion framework for the Company.

We recognize the importance of having diverse perspectives on our Board of Directors and aspire to promote diversity.

Our diversity and inclusion framework includes Board of Directors and leadership development.

As of September 30, 2021, women represented 27% and minorities represented 36% of our Board of Directors.

Recently, we completed a pay equity study for all employees and job grades based on gender and race, and believe we addressed identified anomalies with appropriate pay adjustments.

We also strive to ensure all offers to new employees or to employees being promoted internally are aligned with the market and equitable on an internal basis.

In addition, we expanded our Diversity and Inclusion (“D&I”) Council framework during our 2022 fiscal year.

The framework is now comprised of a series of councils including an executive council, a company-wide employee council and local employee councils at each plant as well as a corporate and sales team council.

Talent Acquisition and Retention.

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We prioritize employee engagement and transparency by implementing programs and processes to ensure our employees have opportunities to ask questions, voice concerns, and share feedback.

This is accomplished in part by conducting an annual employee satisfaction survey, through quarterly town hall meetings, and regular video messages from our executives.

Our fiscal year 2021 turnover rate was approximately 25%.

This is accomplished in part by conducting an annual employee satisfaction survey, and quarterly town hall meetings.

Our fiscal year 2022 employee turnover rate was approximately 28%.

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Leadership and Culture Development.

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The Mueller Development Program (“MDP”) is designed to provide a pipeline for future talent.

During 2021, we also launched our Frontline Leader training program at all of our plant locations to offer tools in time management, communication, and team building, along with personal coaching.

Index to Financial Statements

During 2022, we continued our Frontline Leader training program to offer tools in time management, communication, and team building, along with personal coaching.

At September 30, 2022, we employed approximately 3,600 people, of whom 82% work in the United States.

At September 30, 2022, 64% of our hourly workforce was represented by collective bargaining agreements.

Additionally, certain foreign countries where we have employees, such as China, provide by law for employee rights which include requirements similar to collective bargaining agreements.

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

We successfully negotiated and extended several of our collective bargaining agreements in the past two years.

We have successfully negotiated and extended several of our collective bargaining agreeme nts in the past.

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

Location Expiration of current agreement(s)

Chattanooga, TN October 2022, January 2023

Chattanooga, TN January 2023

Chattanooga, TN October 2025

Decatur, IL June 2027

Albertville, AL October 2027

Aurora, IL August 2022

Securities Exchange Act Reports

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You may call the SEC at 1-800-SEC-0330 for further information on the public reference room.

In addition, certain of our SEC filings, including our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, our proxy statements and any amendments to them can be viewed and printed free of charge from the investor information section of our website at www.muellerwaterproducts.com .

In addition, certain of our SEC filings, including our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, our proxy statements and any amendments thereto can be viewed and printed free of charge from the investor information section of our website at www.muellerwaterproducts.com .

Copies of our filings, specified exhibits and corporate governance materials are also available free of charge by writing us using the address on the cover of this Annual Report.

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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