Adjusted EBITDA was $3.9 million, an improvement of $6.6 million year-over-year, reflecting strong operating leverage.
CapEx was $6.9 million, primarily software-related, with expected quarterly CapEx of approximately $7 million for the remainder of 2025.
Cash and cash equivalents and marketable securities totaled $226 million at quarter end, down $5 million from Q1 due to CapEx investments.
Completed convertible debt refinancing with $250 million of new 0.75% convertible notes due 2030, improving terms and reducing dilution risk.
Gross profit was $65.2 million with a record gross margin of 40.1%, marketplace gross margin reached 35.4%, up 190 basis points year-over-year.
Marketplace revenue was $148 million, up 26% year-over-year, while supplier services revenue was $14.3 million, declining slightly.
Q2 2025 revenue increased 23% year-over-year to $163 million, driven by strong marketplace growth.
U.S. segment adjusted EBITDA was $6.9 million with a 5.1% margin, improving $6.6 million year-over-year; International segment loss was $2.9 million, flat year-over-year.
Portfolio Restructuring and Debt Reduction Achievements
Hillenbrand completed the divestiture of MIME, generating approximately $265 million in net proceeds, which was a key part of their portfolio simplification strategy.
The company also sold its minority interest in TerraSource, raising about $115 million, further strengthening its balance sheet.
Proceeds from these transactions were used to reduce total debt by over $300 million during fiscal 2025, significantly improving financial stability.
Management emphasized that these moves are part of a broader effort to focus on higher-margin, higher-growth businesses in Performance Materials and Food, Health and Nutrition markets.
The company highlighted that these strategic divestitures have contributed to a lower net leverage ratio, moving from 3.9x to approximately 3.7x after the TerraSource sale.
Consumer & Specialties sales were $278 million, up 4% sequentially; Household & Personal Care sales were $127 million, up 3% sequentially.
Engineered Solutions sales were $251 million, up 12% sequentially; High-Temperature Technologies sales were $178 million, 3% below prior year but up 5% sequentially.
Free cash flow was $34 million in Q2; CapEx was $29 million with full-year projection of approximately $100 million.
Liquidity stood at nearly $700 million with net leverage ratio at 1.7x EBITDA, below the 2x target.
Operating income for Consumer & Specialties was $37 million, up 24% sequentially with margin at 13.4%.
Operating income for Engineered Solutions was $44 million, with margin improving 200 basis points sequentially to 17.4%, matching last year's record.
Operating income was $79 million, up 25% sequentially, with operating margin at 14.9%, up 200 basis points from Q1.
Sales reached $529 million, an 8% sequential increase driven by higher volumes and favorable pricing.
Second quarter EPS was $1.55, up 36% sequentially and second only to last year's stronger Q2.
Strong cash conversion maintained at around 7% of sales, consistent with historical averages.
Adjusted EBITDA reached a record $86.4 million, up 1.4% year-over-year, with an adjusted EBITDA margin of 22.7%, down 120 basis points but 24.7% excluding unfavorable foreign currency.
Free cash flow for the quarter was $56 million after $12 million in capital expenditures; for the first 9 months, free cash flow was $103 million, 71% of adjusted net income.
Gross profit increased 10.9% year-over-year to $145.7 million, with gross margin expanding 150 basis points to 38.3%.
Mueller Water Products reported a 6.6% increase in consolidated net sales to $380.3 million for Q3 2025, setting a new quarterly record.
Net income per diluted share increased 6.3% to $0.34, also a third quarter record.
Operating income increased 10% to $73.7 million, including $1 million of strategic reorganization charges excluded from adjusted results.
Segment-wise, WFS net sales increased 4.1% to $216.6 million, with adjusted operating income up 4.7%. WMS net sales increased 10.2% to $163.7 million, with adjusted operating income up 12.6%.
Total debt stood at $451 million with $372 million in cash and equivalents, net debt leverage ratio below 1, and $535 million total liquidity.
Dafinchi