Consolidated Net Sales

FY 2025

$1.39B to $1.4B "

$1.405B to $1.415B "

raised

Adjusted EBITDA

FY 2025

$310M to $315M "

$318M to $322M "

raised

Free Cash Flow

FY 2025

more than 80% of adjusted net income "

more than 80% of adjusted net income "

no change

Capital Expenditures

FY 2025

$45M to $50M "

$50M to $52M "

raised

Adjusted EBITDA Margin

FY 2025

22.4% "

22.7% "

raised

Municipal Demand Resilience

Municipal demand was consistently highlighted as strong and resilient – with Q1 emphasizing the long‐term need fueled by infrastructure investment " and Q2 noting resiliency amid construction season uncertainties. " Q4 2024 discussions reflected normalized, robust municipal market expectations contributing to volume growth. " "

In Q3 2025, executives reinforced that the municipal repair and replacement market remains strong and resilient, further underpinned by ongoing aging infrastructure needs despite higher interest rates. "

The sentiment remains consistently positive with a reaffirmation of strength in the municipal market.

Residential Construction Trends

Earlier periods showed a mixed view: Q1 highlighted resilient demand for new homes and modest growth in lot development " , while Q2 cited uncertainty driven by inflation. " " Q4 2024 noted normalized lead times and healthy order levels despite broader challenges. " "

In Q3 2025, the company expected a slowdown in residential construction activity as macroeconomic uncertainty, high mortgage rates, and buyer hesitancy began to exert pressure, particularly on new residential and community projects. "

While the topic is consistently discussed, the sentiment has shifted more negatively in Q3 as headwinds in the residential market emerge.

Margin Improvement and Pricing Strategies

Previous calls focused on margin improvement through efficiency gains and pricing adjustments. Q1 discussed benefits from the legacy foundry closure and modest pricing increases. " " " Q2 addressed current dual-foundry challenges with expectations for improvement via targeted pricing actions. " " Q4 2024 celebrated substantial margin gains driven by higher pricing and operational excellence. " " "

In Q3 2025, record quarterly gross margins were achieved – including a 300 basis point sequential improvement – attributed to manufacturing efficiencies, the foundry transition, and targeted pricing strategies to mitigate tariff impacts. " " " "

Overall, margin and pricing initiatives have shown progressive improvement, with current results reflecting successful execution of operational and pricing strategies.

Legacy Foundry Transition

The transition was a key theme in previous periods. Q1 reported completion of the legacy foundry closure with noted write‐downs and forecasted margin improvements. " " " Q2 highlighted operating inefficiencies during dual-run operations but anticipated benefits once the legacy facility was phased out. " " Q4 2024 outlined the expected 80–100 basis point margin improvement once the transition was complete. " "

In Q3 2025, benefits from the legacy brass foundry closure are beginning to materialize, leading to improved manufacturing efficiencies and a resultant boost in gross margins, with continued positive impact expected into Q4 2025 and beyond. " " " "

The transition is now yielding measurable benefits; earlier concerns over dual operations have largely resolved, leading to a more positive outlook.

Tariff Impacts and Cost Pressures

Earlier quarters discussed tariffs as a manageable cost factor. Q1 acknowledged potential cost increases with strategies in place to offset them. " " Q2 provided detailed estimates on tariff exposure and outlined mitigation measures via pricing and sourcing shifts. " " " Q4 2024 did not emphasize tariffs, focusing instead on broader cost pressures.

Q3 2025 reflected that the tariff impact was lower than initially expected – with targeted price actions mitigating the adverse cost effects – ensuring that the annualized impact was contained at approximately 3–4% of cost of sales. " "

Although cost pressures from tariffs persist, improved mitigation strategies have resulted in a more favorable sentiment in the current period compared to earlier uncertainty.

Foreign Exchange Volatility

In Q1 and Q2, favorable foreign exchange movements helped reduce SG&A expenses, contributing positively to overall cost management. " " " " Q4 2024 did not address FX impacts.

In Q3 2025, FX volatility became a negative factor as the USD depreciated by about 10% against the Israeli shekel, leading to an unfavorable expense impact, particularly in SG&A. " "

The sentiment has shifted from being a cost benefit in earlier periods to a notable headwind in Q3 2025.

Backlog Normalization and Order Flow Stability

Across Q1, Q2, and Q4 2024, the company reported normalized lead times, healthy order flow and a resolution of previously elevated backlogs. Q1 detailed normalized delivery for iron gate valves and hydrants " " " , Q2 cited robust order activity " " " " , and Q4 2024 saw clear evidence of normalized lead times contributing to strong net sales. " " "

In Q3 2025, discussions continued to underline backlog normalization and stable order flow, with some mention of channel destocking and a normalized short-cycle backlog – especially in the specialty valve and service brass segments. " "

The trend remains stable, as normalization continues despite short-term adjustments in backlog levels, suggesting effective market realignment.

Manufacturing Inefficiencies and Dual-Foundry Operations

In previous reports, dual-foundry operations and associated inefficiencies were a concern. Q1 highlighted challenges during the overlapping phase and associated write-downs. " " Q2 identified lower margins due to dual operations and expected improvement as the new foundry ramped up. " Q4 2024 discussed the upcoming elimination of duplicative costs once the legacy foundry was closed. " " "

Q3 2025 features a marked improvement as the legacy foundry closure drives enhanced manufacturing efficiencies, leading to a significant sequential gross margin improvement and positive operational impact, confirming the benefits of completed dual-foundry transition. " " " "

The operational sentiment has shifted positively from prior inefficiencies, with the elimination of dual-foundry costs now delivering clear benefits.

Capital Allocation and Liquidity Strategies

All prior periods consistently emphasized a strong balance sheet, robust free cash flow, and disciplined capital allocation through dividends, share repurchases, and strategic acquisitions. Q1 and Q2 noted strong liquidity with low net debt " " " , and Q4 2024 reiterated financial flexibility and healthy liquidity metrics. " "

In Q3 2025, the company continued to generate strong free cash flow and maintained a balanced allocation strategy, with robust liquidity levels and a low net-debt ratio supporting ongoing shareholder returns and strategic investments. " "

The company’s financial discipline remains a cornerstone, with consistently strong liquidity and capital allocation strategies underpinning long-term stability and growth.

Metering Business Impairment and Warranty Concerns

In Q4 2024, the discussion included a $16.3 million goodwill impairment charge tied to the metering business and an increased warranty accrual driven by long-tail warranty obligations for meter products. "

There is no mention of metering business impairment or warranty concerns in Q3 2025 (nor in Q1 or Q2 2025), suggesting that this topic is no longer a focus in the recent period.

The absence of discussion in current calls implies either resolution, deprioritization, or a reduced impact of these issues compared to Q4 2024, indicating a significant shift.