Good morning, everyone. Welcome to day four of the 21st Annual Oppenheimer Industrial Growth Conference. Next up, we have outperformed rated Mueller Water. It looks like we have the whole band here. CEO Paul McAndrew, CFO Melissa Rasmussen, and VP of IR Whit Kincaid. Good morning, everyone. Thanks for joining us. Paul, I think you wanted to kick things off, recapping your fiscal Q2. Obviously very recent, but set the stage that way, and then we'll dive into questions from there. Yeah. Thanks, Bryan. Introduction, my name's Paul McAndrew, CEO of Mueller. I've been with the company now for three and a half years. Look, we just, done our quarter, Q2 yesterday, a record quarter from a sales and adjusted EBITDA and EPS. I think that's just the trajectory that we've been on as an organization over the last three years of we've really made strong commercial and operational investments. As I think of the company from a longer-term perspective, the algorithm is really strong. From a muni and repair perspective, the aging infrastructure in the U.S. positions us really well to capture that growth. We are highly vertically integrated in North America. We have three of our own foundries, which positions us from an infrastructure bill to be suited then for the Buy America, Build America requirements of being domestic manufacturing. We all recognize that the resi market is soft right now, but that's really gonna be a short-term macro down situation. The longer term is that we know there's a pent-up demand from the housing perspective, and that's a piece of our business where we expect to see further growth in the future. For those who don't know us, then we are nearly 170 years old. We are known for fire hydrants and gate valves, which is just over half the business. We have the service brass business, which kind of connects a service line to a distribution line. We have the specialty valve business, where we've made a lot more strategic investments of how we grow these highly engineered valves, and diversify our end markets a lot more than just potable water. As Bryan Blair, I'll kind of open that up to questions from your perspective. All right. Thanks, Paul. I guess let's start with the quarter and outlook, just a few level setting kind of questions. You did lift the EBITDA guide for the year but maintained revenue guidance. There are some moving parts therein. Maybe, you know, walk through the assumptions by end market or major product category and what shifted quarter-over-quarter. Sure, Bryan. With the revenue guidance, we maintained the revenue guidance, as you said. Really the reasoning behind that was due to the softening, resi position. When we talked last in February, we were anticipating that resi was going to be down in the high single-digit range. This quarter, as we were putting out guidance, we now expect that resi will be in the high single-digit to low double-digit range of pressure. With that, we still expect strong repair, municipal repair and replacement products, and we're expecting that to be up in the low to mid-single-digit range. The specialty valve project work, we're expecting to be in the mid to high single-digit range for the year. Based on the, I guess, softness in resi, we decided to maintain our revenue guidance. We also anticipate that that offset is largely going to be in price realization. We had a bit higher price realization in second quarter than what we saw in first quarter. As you recall, we put in place some price actions in February. We saw some of those price actions. We saw benefits from that earlier in second quarter than what we typically see, and that was due to strong execution from our commercial teams. We expect that we'll have price realization in the third quarter in the mid-single digit range as well, and then in the fourth quarter in the low single digit range. The reason that fourth quarter is going to be slightly lower in price realization is because the targeted tariff pricing actions that were put in place last year, we started to see the benefits of those in fourth quarter of last year. We'll be lapping that in the fourth quarter, thus realizing the low single digit price realization. Maybe just to add to that, Bryan, obviously we don't from a short cycle business, you know, service brass, hydrants, gate valves, we only have a kind of a low-ish backlog. Typically, lead time is four or five weeks. Not really understanding how this residential is gonna play out right now is why we've taken that approach. From a margin perspective, we introduced the Operating System in these earnings call in terms of what we've been operating as an organization. That's why we still believe we got margin expansion, and that would be another 170 basis points of EBITDA this year on top of 600 over the last two years. A part of that then was how we simplify the business going forward. Okay. Understood. I do wanna circle back to the Mueller Operating System shortly. One more level-setting question. Melissa, what is, you know, what do the moving parts imply for net price cost? What was fiscal 2Q experience, and how are you thinking about the, you know, back half impact on that front? Sure. In second quarter, we had positive price cost. We expect that in the back half, we will also have positive price cost. The first half has been positive price cost on a dollar for dollar basis. In the second half, we expect that we will be positive to margins slightly. The reason for that is because the tariffs really started to impact us in third and fourth quarter last year. We'll be lapping that headwind. We would expect that this third and fourth quarter will see a little bit more positive from a margin accretion perspective. Okay. Understood. You mentioned tariffs. I guess I'd be remiss if I didn't, you know, ask. What is the net influence of the revised framework for your team, at least as it stands currently? Right now the pieces moving, hasn't changed the net number significantly. The way I think about it, EPA going away, Section 122 stepping in place, which is a lower impact to us. Not sure what's gonna happen come July when Section 122 expires. We are considering it's gonna continue at the same rate right now. That should have been a net positive, then we have the change on the Section 232, which really impacts our repair product line coming from Israel. They more or less offset each other. Okay. That's fair. I guess, a higher level with tariffs, everyone knows the, you know, frictional inefficiencies that were introduced with tariff implementation, and it's been a volatile path, you know, along the way. For your team, I would think there would be some competitive advantages. Is that a fair assumption? Yeah. I think being vertically integrated is a competitive advantage twofold. One with the tariffs, and two then with the infrastructure bill, where a high percentage of the content there needs to be domestically manufactured, which from our perspective, strategically positions us why we make these investments in our domestic manufacturing, because I think it's a critical advantage of ours. Absolutely. Okay. So we walked through, you know, kind of the key points of fiscal 2026. I guess moving a little higher level, Paul, you're new to the CEO seat. Obviously, you've been deeply involved with Mueller operations for a while, you very recently took the reins. That in mind, in what way should we expect kind of more of the same from the Mueller team? You know, what do you think can or should be changed? You know, what may we see on that front going forward? Perhaps that's a decent segue to discussing the Mueller Operating System. Yeah. Perfect, Bryan. You know, the Mueller Operating System is something that we've been introducing in pieces. You know, my experience with large industrials like Emerson as an example, bringing a formalized set of tools that helps keep the whole organization focused on what is the true north. We made the difficult decision to exit the i2O business as an example, when we think about simplification to drive margin expansion. That's gonna drive 20 to 30 basis points of EBITDA improvement for the company. It's not that we're leaving the technology. We still believe technology is a big piece of the water network in the future, slowly adopting, of course. We are gonna take that pressure management and move that to North America, where we believe integrating pressure leak or temperature into our hardware is the advantage. Bryan, From my perspective, we are been significantly improving margin over the last few years, and we still believe there's further headroom to go there. How we accelerate growth and what adjacencies and what markets we wanna play in is my focus. Obviously, we have a strong balance sheet. We wanna make the right acquisition where we can get commercial, particularly commercial synergies. You know, we'd be looking for synergies across the whole organization, but we have a strong North American sales force. We have great relationships with both municipalities and channel partners. That opportunity to grow inorganically from that perspective is a focus of ours. We also believe from a specialty valve business is a prime example where we can grow organically. There's adjacent markets in industrial water, wastewater, where we still have a lot more headroom to grow as an organization. All that to say, we step back, we wanna drive further above margin, top-line growth perspective, above market growth, and further expand our margins over the next two or three years. Understood. I suspect you just covered some of this, but where do you see the greatest opportunities for, you know, share gain or outgrowth if we take kind of that medium-term perspective? You know, how can or should M&A play a role in that, whether it's, you know, technology related channel position or otherwise? Yeah. I will kind of split that to two halves. organically first, I think, you know, some of the products that we are launching, the Hydrant Renewal is a prime example of trying to untap a market that doesn't exist today. which we have the opportunity to provide a solution to municipalities where they can basically replace an aged hydrant without having to dig that hydrant up. At the same time, we will be giving leak detection as part of that solution. Having the municipality have the option to really use and understand how leak detection can really help manage their network. We have the U.S. Pipe branded launch of the hydrants and gate valves. It's a good time to really launch that this year, particularly with the 250th birthday of the country then. There's a patriotism around that fire hydrant. When we think about our specialty valve business, that's our core where we can really expand into markets from an industrial and wastewater. From an inorganic perspective, obviously it's trying to find the right target, but where we see that commercial. We're really good at valves. There's a big TAM for valves. There's adjacencies that we don't play in too strongly today. Finding a business which would allow us to kind of expand our TAM perspective from a valve would be a really good fit for us. Understood. In terms of the infrastructure bill, you know, there's been, I guess, some consternation on that front. You know, with funding throughout last year, a lot of noise with, you know, brief impoundment of funding and, you know, then the government shutdown. The flow of funds was obviously affected by that. Seems we're back underway, there's a lot of capital remaining, obviously. What should, you know, IIJA money mean for the Mueller story, you know, over the next few years? Exactly where can investors think about your team playing within that flow of funds? Yeah, I think I'll take that first and Whit can give some more color. We think it's meaningful from a municipal spend perspective. We are really well positioned to address the domestic manufacturing. We know from a CapEx and OpEx in the water network, as they replace those pipes, it's gonna be replacing valves, replacing hydrants. The lead service line, although the amount of miles of lead service line to be replaced has been decreased, the investment has continued to be put there for what we believe now is 4 to 5 million miles of lead service line. Just as a reminder for everybody on the call, we don't actually participate in the service line itself with the copper. We do have all the service brass, the valves and couplings which go along that lead service line replacement. The real, I guess, bottleneck is what is the labor availability for the municipalities then to actually implement this work at a meaningful pace? That's still the unknown for us. Anything you wanna add further, Whit? Yeah. One thing I'll add, Bryan, is I think it's IIJA or the federal impact over call it multiple decades has really been relatively small. I think any dollars and kind of visibility that it's given, kind of, or awareness you could add in terms of the need for water infrastructure investment has been very positive in general. I think it's interesting to see how states, especially some of the larger states, are raising their own kind of dedicated water infrastructure funds. I think what Texas did, you know, in November, what they voted in, you know, California obviously already, you know, has mechanism, and I think other states are. I think that really speaks to the long-term need for more work, whether it's repair, replacement, treatment related, or it's moving water across large distances from a supply chain, you know, includes desal, includes lead service line, PFAS, and all of the future work that needs to be done, you know, across the country. Good points, Whit. Thank you. Circling back on M&A strategy for a second. Paul, you had made a comment on there being some difficulty unlocking opportunities yesterday. You know, how should we think about that? You know, the, current seller expectations, the activity in the funnel, you know, just potential actionability over the near term. Yeah. Firstly, we've, you know, made more investments now in our corporate development team than we've had in the past. We are building a much stronger funnel. In terms of unlocking them, Bryan, as you know, there's not many that play in the public space that would be a fit for us. A lot of private or family-owned organizations. It's always about a timing perspective. It's fostering those relationships. Now that we've got a much stronger funnel, how I personally foster relationships with the family or the leadership of those organizations and trying to find the right timing then are they willing to sell those businesses. Yeah. Understood. Takes two to tango or, you know, pick your cliche on that front. Yeah. All right. Another, you know, big picture question. The operational cadence of Mueller has been kind of night and day over the last few years, kudos to your team on that. You know, growth has been strong. Margin expansion has been, you know, extremely notable. Looking forward, how do you think about normalized growth for the business? You mentioned some of the, you know, kind of newer or expanded growth vectors that you're pursuing. You know, Excuse me. How should we think about that reading through, at least assuming we don't have a really extended, prolonged, you know, resi downturn? It sounds like your team is not, you know, forecasting that. Normalized growth rates, then in terms of margin, there's been such a significant step up to date. Do you have a goal in mind for EBITDA margin over a few years, medium term, however you would frame it? Yeah, that's one of the things we are working on internally, Bryan, what is that medium margin story? I personally believe we still have more headroom there in terms of some of the activities we're going to continue to do. Obviously, there's a mix element within our organization that plays a piece of that. In terms of the growth, you know, in terms of if it's resi kind of starts to grow, we believe it's really in that probably low to high single digit type of growth. You know, maybe in the 5%-8% is through the cycle year would be a meaningful impact from an organic perspective. It's really, I wish I could predict when we think the resi is gonna have a more meaningful impact of growing where we are well positioned to capture that. It's just a little bit unknown right now when that bottom's gonna come and we're gonna start to see what is a pent-up demand. We know the housing inventory is low in North America, so we know it's something that needs to happen. It's just what's that stimulus to kick that going again. On that front, do you think it is-- I'm going to hugely oversimplify this, do you think it really just boils down to affordability? I do. Obviously, having really low interest rates probably locked some people for not thinking about moving as much now. Affordability from an interest rate reduction would help people twofold. One, make affordability easier, and two, stimulate people to maybe more willing to move, kind of create that cycle of a lot more activity in the housing market. All makes sense. I realize you don't have fiscal 2027 guidance out, and the tea leaves are difficult to read right now. Do you think there's a realistic chance that resi returns to growth your next fiscal year? Obviously, you'll have the, I guess it would be easy stacked comp strategy on that side going into next year. We really don't have any Based on what the data points, particularly what Whit uses to help us from land development, builders, housing starts, et cetera, I think the forecast is fairly flat right now. The experts, yep, from a starts perspective. I don't know how inflation's gonna play out, how long this, where we are from the war perspective. This is gonna be a blip on inflation. I think that's obviously gonna drive affordability of the housing starts a little bit more, plus that may play into where we think about price in fiscal year 2027 as well. Okay. Understood. That was a somewhat unfair question I thought I had to slip in there, so. All right. You know, we've covered quite a bit. Is there any message you'd like to leave the audience with today? Yeah, look, I think, Bryan, you commented on the, you know, it was night and day over the last few years. We believe that's still a lot more opportunity for us. We've brought in a lot more operational and commercial people. You know, recently bringing in Darin Harvey as an example, who was the EVP of Ops at ADS. We believe there's still the capital investments we are making in our operations is still gonna drive margin expansion. The simplification will drive margin expansion. We are well-positioned from a domestic perspective for the Infrastructure Bill money. It gives us a competitive advantage against tariffs, as you said. We have a strong balance sheet to really focus on what would be the right acquisition when it's available. We are doing a lot more groundwork right now in preparation for an acquisition. Historically, our integration was not the strongest, and I think we're gonna take a playbook and get that in place where we can capitalize on those synergies early. There's been a lot of kind of turmoil over the last few years. I feel like we've stabilized and really drove meaningful profitability change with decent top-line growth over the last few years. We are positioning ourselves to be in a lot stronger position to capture what we think will be good organic growth, plus trying to get that inorganic opportunity. All very encouraging. Paul, Melissa, Whit, thank you very much for your time today. Thank you, Bryan. Thanks, Bryan. Thanks, Bryan.