Subject: EARNINGS
Mueller Industries, Inc. Reports Third Quarter 2021 Earnings
Mueller Industries, Inc. (NYSE: MLI) announces results for the third quarter of 2021. (All comparisons are to the prior year quarter.)
- $233.4 million in operating income versus $69.2 million
- $171.0 million in net income versus $42.7 million
- $982.2 million in net sales versus $619.1 million
- EPS of $3.01 versus $0.76 per share
Third Quarter Financial and Operating Highlights:
- COMEX copper averaged $4.30 per pound versus $2.93 per pound in the third quarter of last year, a 47% increase.
- Unit sales growth across all segments, the influence of the higher copper prices and contributions from the first quarter acquisition of the Hart & Cooley Flex duct business all contributed to the increase in net sales.
- The results include a gain of $50.1 million from the sale of the Fabricated Tube Products and Shoals Tubular businesses.
- We recorded income of $2.8 million on our investment in Tecumseh Products Company as its restructuring efforts progress, compared to a $5.5 million loss recorded during the prior year period.
- We reduced our debt by $230.0 million, ending the quarter with a debt to total capitalization below 10 percent and a current ratio of 2.7 to 1.
Regarding the quarter performance and outlook, Greg Christopher, Mueller's CEO said,
"Our strong financial results were driven by continued favorable market demand and our teams' exceptional operating performance in the face of industry wide labor and supply constraints and rising costs. Building construction demand remains solid, and backlogs in most businesses continue to build."
He added, "During the quarter, we also completed the sale of two of our smaller manufacturing businesses, Fabricated Tube Products and Shoals Tubular, and divested of a majority interest in Die-Mold Tool. Although growth remains a key priority, we also continually evaluate our portfolio and pursue opportunities to exit businesses that we do not believe provide the up-side growth potential and returns necessary to achieve our long-term strategic goals.
We anticipate that current market conditions will continue for the foreseeable future."
Mueller Industries, Inc. (NYSE: MLI) is an industrial corporation whose holdings manufacture vital goods for important markets such as air, water, oil and gas distribution; climate comfort; food preservation; energy transmission; medical; aerospace; and automotive. It includes a network of companies and brands throughout North America, Europe, Asia, and the Middle East.
Statements in this release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties. These include economic and currency conditions, continued availability of raw materials and energy, market demand, pricing, competitive and technological factors, and the availability of financing, among others, as set forth in the Company's SEC filings. The words "outlook," "estimate," "project," "intend," "expect," "believe," "target," "encourage," "anticipate," "appear," and similar expressions are intended to identify forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report. The Company has no obligation to publicly update or revise any forward-looking statements to reflect events after the date of this report.
MUELLER INDUSTRIES, INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
For the Quarter Ended |
|
For the Nine Months Ended |
||||||||||||
(In thousands, except per share data) |
|
September 25,
|
|
September 26,
|
|
September 25,
|
|
September 26,
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
$ |
982,248 |
|
|
$ |
619,105 |
|
|
$ |
2,812,988 |
|
|
$ |
1,722,192 |
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
744,265 |
|
|
500,780 |
|
|
2,212,395 |
|
|
1,412,654 |
|
||||
Depreciation and amortization |
|
10,868 |
|
|
10,752 |
|
|
33,757 |
|
|
32,888 |
|
||||
Selling, general, and administrative expense |
|
48,524 |
|
|
38,346 |
|
|
137,891 |
|
|
117,749 |
|
||||
Gain on sale of businesses |
|
(54,759 |
) |
|
? |
|
|
(54,759 |
) |
|
? |
|
||||
Litigation settlement, net |
|
? |
|
|
? |
|
|
? |
|
|
(21,933 |
) |
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
233,350 |
|
|
69,227 |
|
|
483,704 |
|
|
180,834 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(1,116 |
) |
|
(4,885 |
) |
|
(7,451 |
) |
|
(15,237 |
) |
||||
Redemption premium |
|
? |
|
|
? |
|
|
(5,674 |
) |
|
? |
|
||||
Other (expense) income, net |
|
(2,548 |
) |
|
522 |
|
|
(1,288 |
) |
|
3,634 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes |
|
229,686 |
|
|
64,864 |
|
|
469,291 |
|
|
169,231 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense |
|
(60,229 |
) |
|
(15,450 |
) |
|
(120,996 |
) |
|
(42,623 |
) |
||||
Income (loss) from unconsolidated affiliates, net of foreign tax |
|
2,799 |
|
|
(5,457 |
) |
|
131 |
|
|
(20,213 |
) |
||||
|
|
|
|
|
|
|
|
|
||||||||
Consolidated net income |
|
172,256 |
|
|
43,957 |
|
|
348,426 |
|
|
106,395 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling interests |
|
(1,276 |
) |
|
(1,255 |
) |
|
(5,507 |
) |
|
(3,322 |
) |
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Mueller Industries, Inc. |
|
$ |
170,980 |
|
|
$ |
42,702 |
|
|
$ |
342,919 |
|
|
$ |
103,073 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares for basic earnings per share |
|
56,077 |
|
|
55,816 |
|
|
55,979 |
|
|
55,805 |
|
||||
Effect of dilutive stock-based awards |
|
731 |
|
|
550 |
|
|
784 |
|
|
534 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjusted weighted average shares for diluted earnings per share |
|
56,808 |
|
|
56,366 |
|
|
56,763 |
|
|
56,339 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share |
|
$ |
3.05 |
|
|
$ |
0.77 |
|
|
$ |
6.13 |
|
|
$ |
1.85 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share |
|
$ |
3.01 |
|
|
$ |
0.76 |
|
|
$ |
6.04 |
|
|
$ |
1.83 |
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per share |
|
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.39 |
|
|
$ |
0.30 |
|
|
||||||||||||||||
Summary Segment Data: |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net sales: |
|
|
|
|
|
|
|
|
||||||||
Piping Systems Segment |
|
$ |
688,200 |
|
|
$ |
409,414 |
|
|
$ |
1,947,564 |
|
|
$ |
1,128,467 |
|
Industrial Metals Segment |
|
182,245 |
|
|
118,831 |
|
|
527,137 |
|
|
338,652 |
|
||||
Climate Segment |
|
122,252 |
|
|
97,604 |
|
|
364,986 |
|
|
276,983 |
|
||||
Elimination of intersegment sales |
|
(10,449 |
) |
|
(6,744 |
) |
|
(26,699 |
) |
|
(21,910 |
) |
||||
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
$ |
982,248 |
|
|
$ |
619,105 |
|
|
$ |
2,812,988 |
|
|
$ |
1,722,192 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income: |
|
|
|
|
|
|
|
|
||||||||
Piping Systems Segment |
|
$ |
152,199 |
|
|
$ |
44,863 |
|
|
$ |
343,805 |
|
|
$ |
122,613 |
|
Industrial Metals Segment |
|
19,052 |
|
|
18,348 |
|
|
58,398 |
|
|
38,403 |
|
||||
Climate Segment |
|
21,072 |
|
|
18,156 |
|
|
63,779 |
|
|
43,523 |
|
||||
Unallocated income (expenses) |
|
41,027 |
|
|
(12,140 |
) |
|
17,722 |
|
|
(23,705 |
) |
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
$ |
233,350 |
|
|
$ |
69,227 |
|
|
$ |
483,704 |
|
|
$ |
180,834 |
|
MUELLER INDUSTRIES, INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
|
|
||||||
|
(Unaudited) |
|
|
||||
(In thousands) |
September 25,
|
|
December 26,
|
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
104,789 |
|
|
$ |
119,075 |
|
Accounts receivable, net |
493,960 |
|
357,532 |
||||
Inventories |
405,590 |
|
315,002 |
||||
Other current assets |
33,604 |
|
33,752 |
||||
|
|
|
|
||||
Total current assets |
1,037,943 |
|
825,361 |
||||
|
|
|
|
||||
Property, plant, and equipment, net |
370,222 |
|
376,572 |
||||
Operating lease right-of-use assets |
24,147 |
|
29,301 |
|
|||
Other assets |
296,225 |
|
297,334 |
||||
|
|
|
|
||||
Total assets |
$ |
1,728,537 |
|
|
$ |
1,528,568 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current portion of debt |
$ |
1,110 |
|
|
$ |
41,283 |
|
Accounts payable |
180,509 |
|
147,741 |
||||
Current portion of operating lease liabilities |
6,193 |
|
|
6,259 |
|
||
Other current liabilities |
192,286 |
|
144,360 |
||||
|
|
|
|
||||
Total current liabilities |
380,098 |
|
339,643 |
||||
|
|
|
|
||||
Long-term debt |
121,012 |
|
286,593 |
||||
Pension and postretirement liabilities |
24,132 |
|
26,841 |
||||
Environmental reserves |
20,902 |
|
21,256 |
||||
Deferred income taxes |
13,393 |
|
16,842 |
||||
Noncurrent operating lease liabilities |
17,399 |
|
21,602 |
|
|||
Other noncurrent liabilities |
25,369 |
|
14,731 |
||||
|
|
|
|
||||
Total liabilities |
602,305 |
|
727,508 |
||||
|
|
|
|
||||
Total Mueller Industries, Inc. stockholders' equity |
1,107,562 |
|
|
776,745 |
|||
Noncontrolling interests |
18,670 |
|
|
24,315 |
|||
|
|
|
|
||||
Total equity |
1,126,232 |
|
|
801,060 |
|||
|
|
|
|
||||
Total liabilities and equity |
$ |
1,728,537 |
|
|
$ |
1,528,568 |
|
MUELLER INDUSTRIES, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
||||||||
|
|
For the Nine Months Ended |
||||||
(In thousands) |
|
September 25,
|
|
September 26,
|
||||
|
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
|
||||
Consolidated net income |
|
$ |
348,426 |
|
|
$ |
106,395 |
|
Reconciliation of consolidated net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
33,932 |
|
|
33,127 |
|
||
Stock-based compensation expense |
|
7,228 |
|
|
6,332 |
|
||
Provision for doubtful accounts receivable |
|
1,310 |
|
|
953 |
|
||
(Income) loss from unconsolidated affiliates |
|
(131 |
) |
|
20,213 |
|
||
Redemption premium |
|
5,674 |
|
|
? |
|
||
(Gain) loss on disposals of properties |
|
(1,135 |
) |
|
144 |
|
||
Gain on sale of businesses |
|
(54,759 |
) |
|
? |
|
||
Impairment charges |
|
2,568 |
|
|
3,035 |
|
||
Deferred income tax expense (benefit) |
|
6,304 |
|
|
(836 |
) |
||
Changes in assets and liabilities, net of effects of businesses acquired and sold: |
|
|
|
|
||||
Receivables |
|
(155,103 |
) |
|
(45,530 |
) |
||
Inventories |
|
(96,505 |
) |
|
41,598 |
|
||
Other assets |
|
(9,335 |
) |
|
9,053 |
|
||
Current liabilities |
|
85,523 |
|
|
25,913 |
|
||
Other liabilities |
|
8,335 |
|
|
(5,813 |
) |
||
Other, net |
|
(851 |
) |
|
2,294 |
|
||
|
|
|
|
|
||||
Net cash provided by operating activities |
|
181,481 |
|
|
196,878 |
|
||
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Capital expenditures |
|
(25,547 |
) |
|
(29,204 |
) |
||
Acquisition of businesses, net of cash acquired |
|
(13,935 |
) |
|
(72,648 |
) |
||
Proceeds from sale of businesses, net of cash sold |
|
74,250 |
|
|
? |
|
||
Investments in unconsolidated affiliates |
|
(1,613 |
) |
|
? |
|
||
Payment received for (issuance of) notes receivable |
|
8,539 |
|
|
(9,155 |
) |
||
Proceeds from sales of properties |
|
2,124 |
|
|
12 |
|
||
|
|
|
|
|
||||
Net cash provided by (used in) investing activities |
|
43,818 |
|
|
(110,995 |
) |
||
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Dividends paid to stockholders of Mueller Industries, Inc. |
|
(21,846 |
) |
|
(16,754 |
) |
||
Repurchase of common stock |
|
? |
|
|
(5,574 |
) |
||
Payment of contingent consideration |
|
(1,250 |
) |
|
(7,000 |
) |
||
Issuance of debt |
|
475,000 |
|
|
150,027 |
|
||
Repayments of debt |
|
(680,572 |
) |
|
(186,492 |
) |
||
Repayment of debt by consolidated joint ventures, net |
|
(4,865 |
) |
|
(299 |
) |
||
Net cash received (used) to settle stock-based awards |
|
219 |
|
|
(160 |
) |
||
Debt issuance costs |
|
(1,111 |
) |
|
? |
|
||
Dividends paid to noncontrolling interests |
|
(9,722 |
) |
|
? |
|
||
|
|
|
|
|
||||
Net cash used in financing activities |
|
(244,147 |
) |
|
(66,252 |
) |
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
(377 |
) |
|
(3,294 |
) |
||
|
|
|
|
|
||||
(Decrease) increase in cash, cash equivalents, and restricted cash |
|
(19,225 |
) |
|
16,337 |
|
||
Cash, cash equivalents, and restricted cash at the beginning of the period |
|
127,376 |
|
|
98,042 |
|
||
|
|
|
|
|
||||
Cash, cash equivalents, and restricted cash at the end of the period |
|
$ |
108,151 |
|
|
$ |
114,379 |
|
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