Mueller Water Products (MWA) risk factors, FY2024 10-K

Risks related to our industries

1. 01A significant portion of our business depends on spending for water and wastewater infrastructure construction activity
2. 02Residential construction activity is important to our business and adverse conditions or sustained uncertainty within this market could adversely affect our financial results
3. 03Our business depends on a small group of key customers for a significant portion of our sales
4. 04Index to Financial Statements
5. 05Strong competition could adversely affect prices and demand for our products and services, which would adversely affect our operating results and financial condition
6. 06The long-term success of our newer systems and solutions, including the related products, software and services, such as smart metering, leak detection, pressure monitoring and pipe condition assessment, depends on market acceptance

Risks related to our business strategy

1. 07We may not be able to adequately manage the risks associated with our products and systems, including increased warranty costs
2. 08Our products and services may be affected from time to time by design and manufacturing defects that could materially adversely affect the business and result in harm to our reputation
3. 09Inefficient or ineffective capital allocation, along with increased capital expenditures to modernize our aging facilities and expand our capabilities, could adversely affect, among other things, our operating results, cash availability, strategic opportunities and/or stockholder value
4. 10Our business strategy includes developing, acquiring and investing in companies and technologies that broaden our product portfolio or complement our existing business, which could be unsuccessful or consume significant resources and adversely affect our operating results
5. 11Potential international business opportunities may expose us to additional risks, including foreign currency exchange rate fluctuations

Risks related to our operations

1. 12Our reliance on vendors for certain products, some of which are single-source or limited-source suppliers, could harm our business by adversely affecting product availability, reliability or cost
2. 13A disruption in our supply chain or other factors impacting the distribution of our products could adversely affect our business
3. 14Seasonal demand for certain of our products and services may adversely affect our financial results
4. 15Transportation costs are relatively high for most of our products
5. 16Our business, financial condition and results of operations may be adversely impacted by the effects of inflation
6. 17Our high fixed costs may make it more difficult for us to respond to economic cycles
7. 18We may experience difficulties implementing upgrades to our software systems
8. 19Normal operations at our key manufacturing facilities may be interrupted
9. 20Any inability to protect our intellectual property or our failure to effectively defend against intellectual property infringement claims could adversely affect our competitive position
10. 21If we do not successfully maintain our information and technology networks, including the security of those networks, our operations could be disrupted and unanticipated increases in costs and/or decreases in sales could result
11. 22We may fail to effectively manage confidential data, which could harm our reputation, result in substantial additional costs and subject us to litigation
12. 23Cyberattacks and security vulnerabilities could lead to reduced sales, increased costs, liability claims, unauthorized access to customer data or harm to our reputation
13. 24Misuse of our technology-enabled products, services and solutions could lead to reduced sales, increased costs, liability claims or harm to our reputation
14. 25We are subject to a variety of claims, investigations and litigation that could adversely affect our results of operations and harm our reputation
15. 26We are subject to stringent environmental, health and safety laws and regulations that impose significant compliance costs. Any failure to comply with these laws and regulations may adversely affect us
16. 27Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations
17. 28We rely on successors to Tyco to indemnify us for certain liabilities and they may become financially unable or fail to comply with the terms of the indemnity

Risks related to our human capital

1. 29We depend on qualified personnel and if we are unable to retain or hire executive officers, key employees and skilled personnel, we may not be able to achieve our strategic objectives and our business may be adversely affected
2. 30If we are unable to negotiate collective bargaining agreements on satisfactory terms or we experience strikes, work stoppages, labor unrest or higher than normal absenteeism, our business could suffer
3. 31Our expenditures for pension obligations could be materially higher than we have predicted
4. 32The funded status of our pension plans may also be influenced by regulatory requirements, which can change unexpectedly and impose higher costs if funding levels are below certain thresholds. We may increase contributions to our pension plans to avoid or reduce these higher costs
5. 33The Israel-Hamas war may continue to adversely affect our ability to staff and operate our Ariel, Israel facility

Risks related to our international operations

1. 34Any failure to satisfy international trade laws and regulations or to otherwise comply with changes or other trade developments may adversely affect us
2. 35If significant tariffs or other restrictions continue to be placed on foreign imports by the United States and related countermeasures are taken by impacted foreign countries, our sales and results of operations may be harmed
3. 36The prices of our purchased components and raw materials can be volatile
4. 37Our business, operating results and financial condition may be negatively impacted by geopolitical events, including wars, terrorism, industrial accidents and other business interruptions
5. 38Our business, operations and markets, and those of our suppliers, business partners and customers, may be adversely affected by current and future outbreaks of infectious diseases or other health crises