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Operator: Good morning, and thank you for standing by. [Operator Instructions] Today’s conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to Whit Kincaid. Thank you, sir. You may begin.

Whit Kincaid: Good morning, everyone. Thank you for joining us for Mueller Water Products Fourth Quarter and Fiscal 2025 Conference Call. Yesterday afternoon, we issued our press release reporting results of operations for the quarter and year-ended September 30, 2025. A copy of the press release is available on our website muellerwaterproducts.com. I am joined this morning by Martie Zakas, our Chief Executive Officer; Paul McAndrew, our President and Chief Operating Officer; and Melissa Rasmussen, our Chief Financial Officer. Following our prepared remarks, we will address questions related to the information covered on the call. As a reminder, please keep to one question and a follow-up and then return to the queue. This morning’s call is being recorded and webcast live on the Internet.

We have also posted slides on our website to accompany today’s discussion. They also address forward-looking statements and our non-GAAP disclosure requirements. At this time, please refer to Slide 2. This slide identifies non-GAAP financial measures referenced in our press release, on our slides and on this call. It discloses the reasons why we believe that these measures provide useful information to investors. Reconciliations between non-GAAP and GAAP financial measures are included in the supplemental information within our press release and on our website. Slide 3 addresses forward-looking statements made on this call. This slide includes cautionary information identifying important factors that could cause actual results to differ materially from those included in forward-looking statements.

Please review Slides 2 and 3 in their entirety. During this call, all references to a specific year or quarter, unless specified otherwise, refer to our fiscal year, which ends on the 30th of September. A replay of this morning’s call will be available for 30 days at 1-866-388-5360. The archive of the webcast and corresponding slides will be available for at least 90 days on the Investor Relations section of our website. I’ll now turn the call over to Martie.

Marietta Zakas: Thanks, Whit, and good morning, everyone. Thank you for joining our fourth quarter and fiscal 2025 earnings call. Before we discuss our results, I would like to briefly address the announcement made yesterday. After almost 2 decades at Mueller, I will be retiring as Chief Executive Officer and member of the Board of Directors effective February 9, 2026. It has been the highlight of my career to lead this talented team and company with such a rich legacy and heritage. Since winning Mueller in 2006, we’ve driven growth, delivered innovative and sustainable solutions and strengthened our commitment to customers and the communities we serve. Paul has played an important role in these achievements. His deep understanding of our industry, portfolio of products and solutions, operations and customer relationships combined with his leadership positions Mueller for continued success.

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The transition will be effective February 9, 2026, and I will serve as a special adviser through the end of calendar 2026 to ensure a smooth handover. With that, I’ll recap our fourth quarter and full year performance and then turn it over to Paul. We closed the year on an exceptional note, delivering another record-breaking performance with our fourth quarter net sales and adjusted EBITDA exceeding the high end of our expectations. Net sales growth of 9.4% in the quarter reflected strong volume gains and improved price realization demonstrating enhanced commercial execution and resilient end market demand. Our team’s unwavering commitment and relentless focus on operational excellence and customer service enabled consolidated gross margin expansion of 500 basis points in the fourth quarter.

Record results set new benchmarks for quarterly adjusted EBITDA and adjusted EBITDA margin with adjusted EBITDA margin exceeding 24%. Adjusted net income per share grew 73% year-over-year to $0.38 per share which exceeded the record level from last quarter. I’m incredibly proud of how our organization continues to execute our strategy and deliver value for all stakeholders. In 2025, even as we navigated a complex external operating environment, we achieved record levels for net sales, gross margin, adjusted EBITDA and adjusted net income per diluted share. Our annual performance significantly exceeded the initial annual expectations for net sales and adjusted EBITDA, which we provided a year ago. This year was marked by exceptional achievements and continued progress.

We increased net sales by 8.7% to over $1.4 billion, reflecting strong demand and effective execution. Adjusted EBITDA grew 14.6% year-over-year to a record $326 million, with our adjusted EBITDA margin expanding 110 basis points year-over-year to 22.8%. For the year, we delivered record adjusted net income per share of $1.31, an increase of approximately 37% year-over-year. We generated $172 million of free cash flow and returned $57 million to shareholders through dividends and common stock repurchases. We recently increased our quarterly dividend for the 11th time since 2014, underscoring our commitment to delivering long-term value. Our transformation over the past 2 years has delivered remarkable results, including expanding our gross margin by more than 600 basis points.

We are energized by the progress we’ve made and the opportunities ahead as we continue to invest across all aspects of our business. Our performance over the past few years reinforces our team’s commitment to driving further improvements and leveraging favorable market trends in infrastructure spending. Looking ahead, we expect to deliver continued net sales growth and margin expansion in 2026, which Melissa will describe later in the call. I’ll now turn it over to Paul to address some of our commercial and operational insights and highlights.

Paul McAndrew: Thanks, Martie. Good morning, everyone. It’s great to be with you. I am extremely pleased with how we closed out the year and the strong foundation we have built for the future. Our teams delivered exceptional execution despite a challenging external environment. Through discipline, dedication and teamwork, we delivered another year of gross margin improvement, expanding by more than 100 basis points year-over-year. This improvement was primarily driven by higher volumes and manufacturing efficiencies, partially offset by the newer tariffs. Our commercial investments, which enhanced customer service and expanded market penetration, contributed to mid-single-digit volume growth this year. We delivered double-digit net sales growth for iron gate valves and specialty valves, hydrants and repair products.

Our specialty valve portfolio continues to perform exceptionally well since transitioning to the new facility in Kimball. With the benefits of our capital investments, improved operational execution and enhanced product and commercial strategies, we have tremendous position into this year. I am confident that we will build on this success and unlock even greater opportunities ahead. Earlier this year, we completed the transition to our state-of-the-art brass foundry, which in addition to service brass products manufactures critical components for our iron gate valves and hydrants. In the first half of 2026, we expect to continue to achieve the remaining year-over-year gross margin benefit from the closure of the legacy foundry, while unlocking significant multiyear opportunities for volume and margin expansion as we scale production and drive efficiencies at the new foundry.

Over the last several years, we have strengthened our foundation by elevating operational standards, delivering outstanding customer service, optimizing supply chain processes and advancing manufacturing capabilities to achieve greater productivity across our facilities. Additionally, we have fostered collaboration and teamwork throughout the organization as we build a culture of performance and accountability. I am especially proud of our safety performance this year, where we achieved the lowest TRIR in our history. This safety improvement reflects the tremendous progress our teams have made. This year, we will continue to make disciplined investments in both commercial and operational capabilities to drive additional performance improvements.

Commercially, we are making investments to enhance our digital customer experience, launching new product offerings and optimizing processes to improve delivery times. Operationally, we are focused on driving margin expansion through productivity gains and strategic price/cost management. We continue to look for ways to position Mueller for the future by growing and strengthening our talent, especially in the commercial and operation areas. These efforts will continue to support the business with leaders having extensive experience and a proven history of success. I am confident that our current future leadership will accelerate our efforts to improve our operational and commercial strategies while positioning Mueller for future growth. We believe that now is the time to accelerate our capital investments to expand capacity and drive efficiencies, including increasing our domestic capabilities.

With 2 mature iron foundries, we are committed to maintaining the appropriate level of investment in our facilities to increase efficiencies and expand innovation to support sales growth and margin expansion. As a reminder, our 2 iron foundries are mainly focused on supporting our iron gate valve and hydrant products. Planned equipment upgrades of these foundries, along with other key projects, are expected to increase capital expenditures to 4% to 5% of net sales over the next 3 years. We anticipate that these strategic investments, along with our commercial and operational initiatives, will position us to expand our capacity, deliver sustained gross margin expansion and promote long-term value creation. With that, I’ll turn it over to Melissa so she can provide you with a deeper dive into the financials.

Melissa Rasmussen: Thanks, Paul, and good morning, everyone. We are delighted to close another record-breaking year with strong fourth quarter performance. Net sales grew 9.4% to $380.8 million, setting a new quarterly record. This growth was primarily driven by increased volumes and higher pricing across most product lines, with both segments delivering an exceptional finish to the year. For the full year, net sales increased 8.7% and exceeded $1.4 billion, reflecting robust growth fueled by increased volumes and favorable pricing in both segments. In the quarter, gross profit of $140 million increased 26.2% year-over-year and gross margin expanded 500 basis points to 36.8%. The improvement in gross profit was driven by manufacturing efficiencies, volume growth and favorable price/cost dynamics, including the expected benefits from pricing actions taken to offset higher tariffs.

For the full year, gross margin was 36.1%, an increase of 120 basis points compared with the prior year, which is a record level for Mueller. The improvement was driven by manufacturing efficiencies and increased volumes, which more than offset the impact from higher tariffs. Excluding tariffs implemented in 2025, which were primarily associated with specialty valves and repair products, price/cost was favorable for the year. For the quarter, total SG&A expenses of $66.7 million were $3.6 million higher than the prior year, primarily due to higher personnel costs, inflationary pressures and unfavorable foreign currency fluctuations, partially offset by lower amortization expense. Operating income increased 145.1% in the quarter to $69.6 million compared with the prior year.

Operating income includes $3.7 million of strategic reorganization and other charges as well as a $5.6 million warranty charge at Water Management Solutions. These items have been excluded from adjusted results. Turning now to our consolidated net GAAP results for the quarter. Adjusted operating income increased 39.6% in the quarter to $78.9 million, driven by manufacturing efficiencies, volume growth, lower amortization expense and favorable price cost, partially offset by higher SG&A expenses. Adjusted operating margin expanded 450 basis points year-over-year to 20.7%, which is a record level for Mueller. Adjusted EBITDA and adjusted EBITDA margin reached new records in the quarter and year. For the quarter, adjusted EBITDA of $91.8 million increased 26.6% year-over-year and adjusted EBITDA margin expanded 330 basis points year-over-year to 24.1%.

For the full year, adjusted EBITDA grew 14.6% year-over-year to $326.2 million or 22.8% of net sales. Adjusted net income per share increased 72.7% year-over-year to $0.38 per share, and for the full year rose 36.5% year-over-year to $1.31 per share, both are new records for Mueller. Moving on to quarterly segment performance, starting with WFS. Net sales increased 8.6% year-over-year to $217.5 million, driven by volume growth in iron gate and specialty valves and higher pricing across most product lines. Adjusted operating income increased 32.5% year-over-year to $55.1 million, resulting from benefits from manufacturing efficiencies, volume growth and lower amortization expense, which more than offset higher SG&A expenses. Adjusted EBITDA increased 21.3% year-over-year to $62.7 million, and adjusted EBITDA margin improved 300 basis points year-over-year to 28.8%.

For the full year, adjusted EBITDA margin of 28.7% was similar to the prior year. I’ll now move on to quarterly results for WMS. Net sales increased 10.4% year-over-year to $163.3 million, led by volume growth of hydrants and repair products as well as higher pricing. Adjusted operating income increased 33.6% year-over-year to $39.8 million, reflecting benefits from manufacturing efficiencies, favorable price/cost, volume growth and lower amortization expense, which more than offset higher SG&A expenses. WMS set new records for fourth quarter and full year for adjusted EBITDA and adjusted EBITDA margin. For the quarter, adjusted EBITDA increased 22.6% year-over-year to $45 million and adjusted EBITDA margin of 27.6% improved 280 basis points.

For the full year, adjusted EBITDA margin of 24.7% improved 170 basis points. Moving on to cash flow. Net cash provided by operating activities for the full year was $219.3 million, a decrease of $19.5 million compared with the prior year. The decrease was primarily driven by changes in working capital, including decreases in other current liabilities, partially offset by higher net income compared with the prior year. Capital expenditures of $47.3 million for the year was similar to the prior year. Free cash flow exceeded our expectations at $172 million and 84% of adjusted net income. We ended the year with $452 million in total debt and $432 million of cash and cash equivalents. We have a strong and flexible balance sheet, with a net debt leverage ratio below 1.

No debt maturities until June 2029 and $450 million in senior notes at a fixed 4% interest rate. We had no borrowings under our ABL and ended the year with $595 million of total liquidity, including $164 million of availability under the ABL. As a result, we continue to have ample liquidity, capacity and flexibility to support our strategic priorities, including acquisitions. I will now review our outlook for fiscal 2026. We expect consolidated net sales between $1.45 billion and $1.47 billion, representing year-over-year growth between 1.4% and 2.8%. Consolidated net sales seasonality is anticipated to be normalized with quarterly consolidated net sales highest in the third quarter and lowest in the first quarter. We also expect a sequential increase in consolidated net sales in the second quarter as the construction season begins to ramp up for the spring.

Our net sales guidance includes the expected benefit from last year’s pricing actions and does not contemplate potential future pricing actions. As a reminder, our practice is to announce price increases to customers before disclosing them to the public. We expect our adjusted EBITDA will range from $345 million to $350 million, reflecting year-over-year growth of 5.8% to 7.3%. At the midpoint of our guidance range, adjusted EBITDA achieved a 23.8% margin for the year, reflecting a 100 basis point year-over-year improvement. We expect our second half adjusted EBITDA margin to be higher than the first half of the year, primarily driven by seasonality of net sales. Our estimate for annualized tariff impact is approximately 3% of cost of sales based on tariff announcements through November 6.

We have taken actions to offset the annualized tariff impact through targeted pricing actions as well as supply chain and operational initiatives. Free cash flow is expected to exceed 85% of adjusted net income. This includes a higher level of capital expenditures expected to be between 4% and 5% of net sales as we invest in growth, operational efficiencies and domestic capacity with a focus on our iron foundries. Our strong financial position ensures we can continue executing on our strategic initiatives and driving long-term value. With that, I’ll turn it back to Martie for closing comments.

Marietta Zakas: Thanks, Melissa. Before we open it up for Q&A, I want to share some final thoughts. We are proud to celebrate our second consecutive year of record results, reflecting significant momentum behind our transformation. This achievement is a direct result of the hard work, dedication and commitment of our employees. Our team members are passionate about being leaders in water infrastructure solutions, solving challenges, enriching lives and safeguarding the future. We are connecting communities to water, life’s most essential resource with exceptional people, solutions and products. I am confident in our future because of how Mueller’s team members differentiate us in the market. While the external landscape remains uncertain, we are leaning in and increasing investments in our facilities and employees to enhance operational efficiencies and expand our domestic capabilities and capacity.

Fueled by our improving commercial and operational execution, we will continue to build on our momentum to accelerate net sales growth and expand margins. Additionally, our strong flexible balance sheet gives us capacity to advance our strategic priorities, including capital investments and acquisitions while continuing to return cash to shareholders. That concludes our comments. Operator, please open the call for questions.

Operator: [Operator Instructions] Bryan Blair with Oppenheimer.

Bryan Blair: Martie and Paul, congratulations to you both.

Paul McAndrew: Thank you, Bryan.

Marietta Zakas: Thank you.

Bryan Blair: To level set a bit on your initial fiscal ’26 outlook, how did muni and residential market sales shake out in fiscal ’25? And what’s contemplated on each side in FY ’26 revenue guidance of 1.4% to 2.8% growth?

Melissa Rasmussen: Bryan, as it relates to our ’26 sales guidance, we have contemplated slightly positive volumes, and that’s predicated on expecting a slowdown that we started to see in the fourth quarter with residential construction. We’re contemplating that residential construction will be down in the high single-digit range and muni repair and replacement growth will be in the low single-digit to mid-single-digit range and project-based specialty valves will be in the mid-single-digit to high single-digit range. We think — we’re expecting that both the muni repair and replacement in the specialty valves will more than offset the slowdown that will be seen in the residential construction.

Marietta Zakas: And just to hit a little bit on what we saw coming in, in ’25 with our results, we did see very solid volume growth through our 2025 results, and that was certainly reflective of a very resilient and continuing healthy municipal market. We had indicated probably back in the May time frame that we had expected to start seeing the residential construction markets slow down, particularly with respect to single-family housing starts. And I would say we did see some of that in our fourth quarter. But I think as you heard earlier, with that, we did have good volume growth overall, with strong volume growth, particularly across our iron gate valves, hydrants, specialty and repair products.

Bryan Blair: Understood. Very helpful color. And as a follow-up, Paul, you were walking through a number of initiatives and investments that will take place going forward? And maybe provide a bit more detail on those if there are any anticipated benefits, whether that’s fiscal ’26 or beyond? And then in terms of capital deployment, also touch on how your team is thinking about the M&A environment and potential actionability in fiscal ’26?

Paul McAndrew: Yes, Bryan, I’ll take you through the actual capital in the facilities, and then I’ll ask Martie to take you through the M&A. In terms of the benefit in the short term in ’26, the capital we will deploy in our 2 50-year-old iron foundries, which make our iron gate valves and hydrants, they will be multiyear investments to add capacity, more dramatic capabilities and upgrade those facilities. So there’s no anticipated margin benefit in ’26 as we continue to roll out the additional equipment and new equipment that we’re going to be installing. But what it will position us for is a lot more growth in the future, a lot more capacity, and there will be margin expansion in the future from these investments, but not in the short term.

Marietta Zakas: Yes. And then just to hit your question in and around acquisitions, I think as Melissa walked through it, I think as we continue to see, we are very well positioned with the flexibility and capacity that our balance sheet structure affords us. Additionally, we have a strong cash position. And I would say we continue to look across capital allocation, thinking about the dividend, which was just increased, share repurchase. Paul just talked through the opportunities we see to reinvest in our business, which we think continue to position us well for the future. And I would say we also are more active today in terms of looking for acquisitions that we think will be beneficial to our long-term growth. The types of acquisitions that we are interested in, I would say, anything that we think could either expand or deepen the product portfolio that we have largely within water infrastructure.

We continue to talk about the strength of our customer relationships, the investments we have from a commercial perspective. And if there are opportunities for us to leverage those distribution channels and customer relationships, we certainly will look for that with our acquisition opportunities. And certainly manufacturing and operations are core capabilities of ours, and that could also represent an opportunity. We do focus on the drinking water and wastewater primarily. We like well-established brands and/or opportunities where Mueller brand could position us even stronger. We’re going to look for good sales and profitability and organic growth as well as identifying revenue and cost synergies. I’ll tell you the challenge that we have is really relates to a lot of the actionability of some of the targets that we think are interesting.

You tend to find a lot of private and/or family-owned businesses in our space. But we think that we are certainly very well positioned today with a lot of our transformation behind us with the operational improvements. I think as a team, we feel that we are much better positioned as we look for the acquisition opportunities. And I can always go back and certainly give the Krausz acquisition with the repair products, I think, is very representative of the type of acquisition that can be meaningful for us and for our shareholders from a long-term growth perspective.

Operator: Our next caller is Brian Lee with Goldman Sachs.

Brian Lee: Congrats on a great career at Mueller, Martie. I guess the first question I had was around just the margin trajectory. You guys did a great job this year and have really started to execute on that strategy of margin expansion. Kind of what’s the — what sort of the cadence and trajectory we should think about as we look across the 2 segments in ’26 given all the success you’ve had throughout ’25. Just how should we think about the margin expansion cadence across the segments for this year?

Melissa Rasmussen: As we think about the segment cadence for 2026, we’re expecting that the net sales growth will be in the similar guidance range that we put forward for the consolidated view. With that, we’re expecting that we’ll see margin expansion in both segments. And expect that, that will be greater in the second half, similar to what we saw in 2025. We do still anticipate that we’ll see the benefit from the closure of the legacy brass foundry in the first half in the WFS segment. And we expect that we will see — that we will not see the same impact related to foreign current repeat in 2026 that we saw in 2025. So we would expect gross margin to be higher in WFS and we would expect EBITDA margin to be higher in WMS.

We do expect both segments to be impacted by tariffs. We had anticipated that 3% of total cost of sales would be the impact of 2026 tariffs. And in the WFS segment, that is mostly focused on our — or I guess, related to our specialty valves in WMS, that’s related to our repair products. We do still anticipate that we’ll have some benefits from the 2025 price actions that were put in place. But 2026, potential price actions are not factored in as we typically expect to announce to our customers any price actions we plan to take before announcing those to the public.

Brian Lee: That’s super helpful color. Maybe just a quick follow-up on the pricing actions. I know you’re not prepared to announce anything on this call, just given that needs to go to customers first. But when we think about the revenue guidance of 1.4% to 2.8% up for fiscal ’26, it sounds like there’s some spillover from the ’25 pricing actions. Is there I guess, potential upside to the revenue growth targets for fiscal ’26 if you implement what has historically been kind of your systematic pricing actions each year if maybe low single digits and non-tariff, non-supply chain impacted environments. Is that kind of the way to think about it?

Paul McAndrew: Yes, Brian, I think that’s a fair way to think about it. We implemented our pricing in Q2 of fiscal year ’25. We also implemented the target pricing as we spoke about, really sort of phased in, in Q4 of fiscal year ’25. And you are correct, our current guidance does not include any new pricing. And so your way of thinking about it is fair, how you laid that out.

Operator: Our next caller is Mike Halloran with Baird.

Michael Halloran: Congratulations, Martie. We’ve worked together a long time. I wish you nothing about the best moving forward. And same for you, Paul, congratulations on the job title change and the new responsibilities. So a couple of questions. First question, just how should we think about inventory in the channel, where your backlog stands? And any kind of those puts and takes? Are we at the point where we’re seeing normalization across those types of threads? Or is there a little bit more to do in the channel or with your backlog or whatever it might look like?

Paul McAndrew: We’ve kind of monitor all the time, and I don’t think there’s any kind of change in that channel inventory there. We think it’s normalized from most product lines. We are continuing to watch if there’s been any buy ahead, particularly around any tariff-related buy ahead from a supply chain perspective. Where we are right now, we — from a seasonality perspective, as things slowdown in the construction season, we believe that channel inventory is at a normal level.

Michael Halloran: Got it. That makes sense. And then just to follow up on the first question that was asked. Just when you think about the expectations that you laid out by the end markets for this year, is the expectation that you just run at a relatively normal seasonal pattern from, call it, the run rate entering the year or the run rate exiting fiscal ’25? Is there any assumption for improvement or deceleration from what that current run rate looks like? And just maybe how you think about the trajectory underlying those assumptions.

Melissa Rasmussen: Yes. We expect that for 2026 that we’ll see our — see the typical seasonality where we would expect our highest period to be in third quarter, and we would expect that to just follow the typical seasonality for the entire 2026 period.

Michael Halloran: So there’s implicitly no acceleration or deceleration from an assumption of what the end markets are going to give you relative to what you’re seeing today?

Marietta Zakas: No, not as we’ve looked out for the full year. I think basically sort of with the expectation that you got a fairly resilient, healthy municipal market. And then I think importantly, resi is where we are anticipating that we will see lower levels on a year-over-year basis. But I think as we had indicated, I think we started to see that in our fourth quarter. And that’s what we expect with the view that we have right now into 2026.

Operator: Our next caller is Deane Dray with RBC Capital Markets.

Deane Dray: Martie, I start with you, fabulous run, congratulations and you really are leaving the company in great shape. But I will note you’ve had back-to-back record quarters and you’re really going to make it a tough act to follow for Paul.

Marietta Zakas: There is a great team at Mueller.

Deane Dray: Of course. Congrats to everyone. And Paul, wishing you the best year. And you and I overlapped when I was covering Emerson, so we’ve had lots of interaction and wishing you hit the ground running in February. So for the questions here, maybe just — anything on the government shutdown? I know most of all spending is state and local, it’s not federal government, but there’s some funding of programs potentially. Have you seen any of that ripple into your business?

Marietta Zakas: Yes. No, look, it’s an important question and certainly a very current question. Look, we do — from what we have seen with the government shutdown, certainly, most of the spending that we see in our area does come at the municipal level, as you know, with very little coming from the federal level. So I would say, at this point, we don’t think we have seen any noticeable impacts from a government shutdown. Federal funding, if you go back to the infrastructure bill, certainly, as we shared, it is always slow for that to actually roll out into projects. And I think as you’ve heard with the guidance that we’ve given, we are not anticipating really any material impact in our 2026 as well from all of that. I think more what I would say, the government shutdown is it’s just that overall sentiment of uncertainty, I think that comes with the government shutdown that we’ve seen, but specifically, I would — I can’t say that we’ve had any direct impact.

Deane Dray: Great. That’s good color there. And then just a quick follow-up for Melissa. Any color around the warranty charge that was taken, what product line and any other reserve changes that you could talk about today?

Melissa Rasmussen: Deane, the overall warranty charge, as similar with past adjustments with warranty, that’s related to our metering products. So the WMS segment is where you’re seeing that warranty impact. We monitor and analyze our warranty accruals periodically and over — excuse me, at an annual basis, we leverage a third party to look at the historical failure rates and help forecast the projected replacement rates. With that, we make adjustments as necessary based on information that’s available at that point in time. Now that said, I also want to remind you that the metering products by the industry standards have a very long warranty period.

Operator: Our next call is Joseph Giordano with TD Cowen.

Christopher Grenga: This is Chris on for Joe. You’ve addressed most of my question, so maybe just one from me. In the recent past, you’ve highlighted achieving the leak detection goal ahead of schedule. And just curious if you could update us on how any of these initiatives or products are translating into commercial opportunities for you as you look to the next year? Any recent wins or partnerships or developments that are — that you see accelerating adoption or contributing to growth in ’26 in that area?

Marietta Zakas: Yes. No, look, thank you for the question in and around leak detection and importantly, you’re citing one of the important metrics that is part of the — our annual sustainability report. So certainly, as you look at not the particular product and solution that we have in and around leak detection, but importantly, how it’s addressing overall the challenges of non-revenue water and water loss when you see so many challenges with aging infrastructure. So we continue to believe that the product solution that we have through Echologics that uses a noninvasive methodology for leak detection is a terrific offering for the market. And importantly, what we have continued to work to do is to find ways to integrate the benefits of that solution into the infrastructure products that we are largely known for.

We did introduce a new product at ACE in Denver. And it was a hydrant renewal. To give a quick description of what that is, it basically is offering a municipality to replace an aged hydrant but the installation process is substantially easier because it’s primarily replacing the top part, the upper portion of the hydrant such that the construction costs and time required are substantially easier, but the benefits through to the municipality is they’ve got a brand-new hydrant, new parts and a new 10-year warranty. To further differentiate this and really make it even more meaningful to that local municipality, we are also including the Echologics’ monitoring technology that will also be offered with that product. And I think it’s important because you’re replacing an older hydrant and it’s allowing that municipality to begin to see the benefits of leak detection with that.

So we think it really does help to solve some of the challenges that communities and municipalities are seeing with aging infrastructure, and it further differentiates us from our competition. We are still in the pilot phase with this new product introduction. We expect to roll it out more in 2026. We’ve got customer field trials underway, but I think it is, I think, a good example reflective of the question that you asked.

Operator: [Operator Instructions] Our next caller is Walt Liptak with Seaport Research.

Walter Liptak: Congratulations, Martie, and the 600 basis points of gross margin are — have really been something. I wonder if you could tell us, based on your kind of feel for where we are in the transformation, do we have more to go? Or is it just a continuation kind of into the future with these CapEx programs?

Marietta Zakas: Yes. So look, I think, certainly, as we look at the results that we just posted for the fourth quarter and the full year, very pleased with that and pleased with what we have delivered with the transformation that has been underway. I think the team has worked hard, and I think we’re really energized by the progress that we’ve seen. But I think importantly, as you look out to the guidance that we’ve just given for 2026, implicit in there, it does look at continued margin expansion from an adjusted EBITDA and from a gross margin perspective. As we look at our end markets over the longer term, we certainly continue to see opportunities. Municipality have always been a fairly resilient and healthy end market. And although we do expect to see low — a downturn on the residential construction side, that’s just the outlook that we have for 2026.

Paul talked about, we have been making disciplined investments both on the commercial side and on the operational side. And I think commercially with the investments that we’re making, not only in our sales team, but also looking for ways to enhance the customer experience with the investments that we have on our digital offerings and ways for us to better work with and deliver through to our customers, I think that over the longer term can continue to yield benefits. Paul and Melissa both talked through our expectations, and importantly, I think the opportunities we see to invest in our facilities that will give us more capacity as well as can create further opportunities for operational improvements. So as we look forward, I would say we do see continued opportunities for growth over the longer term.

Certainly, in 2025, and with our outlook for ’26, the tariffs have certainly provided challenges. But when we look at the teams that we have, they have worked diligently to mitigate the impact of the tariffs both through the targeted pricing actions that we’ve talked about as well as the initiatives from our supply chain and operational teams.

Walter Liptak: Okay. Great. And maybe a follow-on to that one for Paul is, as we think about you doing the job as CEO, is it the CapEx programs you think that are sort of the top priority at this point? Or what would your top priority be?

Paul McAndrew: Walt, I think just to expand on what Martie spoke about there, the capital is one priority in terms of how we reinvest in our core iron foundries. We already started in terms of our broader commercial and operational investments and how they are going to position us from a top line growth perspective, and importantly, from a margin expansion — year-over-year margin expansion. The investments we’ve made is not just in equipment, but we’ve also in the people that we brought into the organization. So from my priority, from that perspective is how we drive long-term value creation for the organization.

Walter Liptak: Okay. Great. Okay. And maybe just the last one for me. The special charge that you guys announced, not the warranty, the other operational one, what was that expense for?

Melissa Rasmussen: The other item was related to strategic reorganization and other charges.

Walter Liptak: Okay. So is that part of the people investment?

Marietta Zakas: Some of it goes back as we look at it with respect to some of the leadership transition that has — that we have undertaken, and that’s largely what you’re seeing under that with the restructuring and other charges line. And then there are also just some other transaction-related expenses. Great. Thank you for all the participants. Thank you, operator. Certainly appreciate everyone who joined us on the call today. As we said, we are very pleased with how we finished our 2025 with record net sales and adjusted EBITDA, especially given the uncertainty and complexity in the external environment. We are very excited about the progress we have made in just a few years. With the annual guidance we’ve given for 2026, we are on track for another year of net sales growth and margin expansion.

I want to once again thank our dedicated employees. They have been and always will be the driving force behind our success. While this isn’t my last earnings call, I want to thank everyone in the investment community who have gotten to know over the years. I so enjoy sharing the Mueller story with you. Thank you all, and we look forward to speaking with you again on our first quarter results when they are announced in February. And with that, we’ll conclude our call, operator.

Operator: Thank you. This concludes today’s conference call. You may go ahead and disconnect at this time.

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