Paul Mueller Company Announces Its First Quarter Earnings of 2024

SPRINGFIELD, Mo., April 26, 2024 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended March 31, 2024.

PAUL MUELLER COMPANY
THREE-MONTH REPORT
(In thousands)
CONSOLIDATED STATEMENTS OF INCOME
		Three Months Ended						Twelve Months Ended
		March 31						March 31
		2024			2023			2024			2023
Net Sales		$	50,356		$	56,351		$	223,161		$	207,096
Cost of Sales		34,560			39,554			153,631			159,979
Gross Profit		$	15,796		$	16,797		$	69,530		$	47,117
Selling, General and Administrative Expense		10,358			12,587			86,040			37,358
Operating Income (Loss)		$	5,438		$	4,210		$	(16,510)		$	9,759
Interest Expense		(1,248)			(97)			(1,501)			(406)
Other Income		1,544			720			3,491			1,571
Income (Loss) before Provision (Benefit) for Income Taxes		$	5,734		$	4,833		$	(14,520)		$	10,924
Provision (Benefit) for Income Taxes		1,285			1,166			(5,413)			2,526
Net Income (Loss)		$	4,449		$	3,667		$	(9,107)		$	8,398
Earnings (Loss) per Common Share ––	Basic and Diluted	$4.10			$3.38			$(8.39)			$7.74

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
							Three Months Ended
							March 31
							2024			2023
Net Income							$	4,449		$	3,667
Other Comprehensive Income (Loss), Net of Tax:
Foreign Currency Translation Adjustment							(239)			164
Comprehensive Income							$	4,210		$	3,831

CONSOLIDATED BALANCE SHEETS
							March 31			December 31
							2024			2023
Cash							$	5,644		$	1,883
Marketable Securities							31,687			32,042
Accounts Receivable							25,209			25,166
Inventories (FIFO)							47,689			45,910
LIFO Reserve							(21,557)			(21,774)
Inventories (LIFO)							26,132			24,136
Current Net Investments in Sales-Type Leases							28			27
Other Current Assets							7,344			3,537
Current Assets							$	96,044		$	86,791
Net Property, Plant, and Equipment							42,854			42,011
Right of Use Assets							2,322			2,421
Other Assets							2,372			2,590
Long-Term Net Investments in Sales-Type Leases							480			456
Total Assets							$	144,072		$	134,269
Accounts Payable							$	11,993		$	11,041
Current Maturities and Short-Term debt							632			640
Current Lease Liabilities							364			402
Advance Billings							33,434			27,383
Pension Liabilities							32			32
Other Current Liabilities							18,722			19,599
Current Liabilities							$	65,177		$	59,097
Long-Term Debt							8,616			8,880
Long-Term Pension Liabilities							225			233
Other Long-Term Liabilities							1,775			1,768
Lease Liabilities							722			775
Total Liabilities							$	76,515		$	70,753
Shareholders' Investment							67,557			63,516
Total Liabilities and Shareholders' Investment							$	144,072		$	134,269

SELECTED FINANCIAL DATA
								March 31			December 31
								2024			2023
Book Value per Common Share								$62.22			$58.50
Total Shares Outstanding								1,085,711			1,085,711
Backlog								$	95,196		$	97,350

CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT
																		Accumulated Other Comprehensive Income (Loss)
						Common Stock			Paid-in Surplus			Retained Earnings			Treasury Stock
																					Total
Balance, December 31, 2023						$	1,508		$	9,708		$	67,181		$	(10,787)		$	(4,094)		$	63,516
Add (Deduct):
	Net Income											4,449									4,449
	Other Comprehensive (Loss) Net of Tax																	(239)			(239)
	Dividends, $.60 per Common Share											(163)									(163)
	Other											$	(6)								(6)
Balance, March 31, 2024						$	1,508		$	9,708		$	71,461		$	(10,787)		$	(4,333)		$	67,557

CONSOLIDATED STATEMENT OF CASH FLOWS
	Three Months Ended March 31, 2024			Three Months Ended March 31, 2023
Operating Activities:
Net Income	$	4,449		$	3,667
Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities:
Pension Contributions (Greater) Less than Expense	(8)			(409)
Bad Debt Expense	-			15
Depreciation & Amortization	1,736			1,560
Loss (Gain) on Disposal of Equipment	18			9
Change in Assets and Liabilities
(Inc) in Accts and Notes Receivable	(42)			(2,634)
(Inc) in Cost in Excess of Estimated Earnings and Billings	(35)			-
(Inc) in Inventories	(1,901)			-
(Inc) in Prepayments	(3,772)			(2,937)
(Inc) in Net Investment in Sales-Type Leases	(25)			(1,122)
Dec (Inc) in Other Assets	469			(46)
Dec in Deferred Taxes	-			240
(Dec) Inc in Accounts Payable	952			(204)
Inc in Accrued Income Tax	1,501			430
Inc (Dec) in Accrued Expenses	(654)			3,622
(Dec) Inc in Advanced Billings	6,051			(1,088)
(Dec) in Billings in Excess of Costs and Estimated Earnings	(1,730)			(736)
Inc in Lease Liability for Operating	24			-
Inc in Lease Liability for Financing	-			131
Principal payments on Lease Liability for Operating	(41)			(65)
(Dec) in Long Term Liabilities	(12)			(58)
(Dec) in Long Term Deferred Tax Liabilities	(82)			-
Net Cash Provided by Operating Activities	$	6,898		$	375
Investing Activities
Intangibles	-			(62)
Proceeds from Sales of Equipment	15			2
Purchases in Marketable Securities	(12,221)			(5,676)
Proceeds from Sales of Marketable Securities	12,575			8,496
Additions to Property, Plant, and Equipment	(3,064)			(1,589)
Net Cash (Required) for Investing Activities	$	(2,695)		$	1,171
Financing Activities
Principal payments on Lease Liability for Financing	(52)			(46)
Proceeds from Short-Term Borrowings	277			1,407
(Repayment) of Short-Term Borrowings	(277)			(1,407)
(Repayment) of Long-Term Debt	(158)			(158)
Dividends paid	(163)			(163)
Net Cash (Required) for Financing Activities	$	(373)		$	(367)
Effect of Exchange Rate Changes	(69)			64
Net Increase in Cash	$	3,761		$	1,243
Cash at Beginning of Year	1,883			679
Cash at End of Quarter	$	5,644		$	1,922

 

PAUL MUELLER COMPANY
SUMMARIZED NOTES TO THE FINANCIAL STATEMENTS
(In thousands)

A. The chart below depicts the net revenue on a consolidating basis for the three months ended March 31.

Three Months Ended March 31
Revenue		2024			2023
Domestic	$	38,877		$	45,585
Mueller BV	$	11,825		$	11,304
Eliminations	$	(346	)	$	(538	)
Net Revenue	$	50,356		$	56,351

The chart below depicts the net revenue on a consolidating basis for the twelve months ended March 31.

Twelve Months Ended March 31
Revenue		2024			2023
Domestic	$	176,298		$	162,662
Mueller BV	$	48,231		$	45,680
Eliminations	$	(1,368	)	$	(1,246	)
Net Revenue	$	223,161		$	207,096

The chart below depicts the net income (loss) on a consolidating basis for the three months ended March 31.

Three Months Ended March 31
Net Income		2024			2023
Domestic	$	4,048		$	4,450
Mueller BV	$	374		$	(770	)
Eliminations	$	27		$	(13	)
Net Income	$	4,449		$	3,667

The chart below depicts the net income on a consolidating basis for the twelve months ended March 31.

Twelve Months Ended March 31
Net Income		2024			2023
Domestic	$	(11,730	)	$	9,852
Mueller BV	$	2,621		$	(1,435	)
Eliminations	$	2		$	(19	)
Net Income (Loss)	$	(9,107	)	$	8,398

B.  March 31, 2024 backlog is $95.2 million compared to $122.8 million at March 31, 2023. The majority of this backlog is in the U.S. where the backlog is $87.8 million at March 31, 2024 compared to $115.4 million at March 31, 2023. The $27.6 million reduction in U.S. backlog is from all segments but primarily from the pharmaceutical, food and beverage, and component divisions coming off of record high backlogs. In the Netherlands, the backlog is relatively flat -- $7.9 million at March 31, 2024 versus $8.2 million on March 31, 2023.

C.  Revenue is down from the previous year by $6 million on a three-month basis but up $16.1 million on trailing twelve months. The lower first quarter revenue from last year is primarily from the timing of revenue recognition on the larger pharmaceutical projects and lower revenue from the components division coming off record revenue in late 2022 and early 2023. In the Netherlands, revenue is above last year by $0.5 million and $2.1 million on a three-month and twelve-month basis, respectively. The Dutch market is improving.

Net Income is up $0.8 million on a three-month and down $17.5 million on a twelve-month basis before removing the pension settlement charges. In the Netherlands, earnings are up year over year by $1.1 million for three months and $4.1 million over twelve months. One-time restructuring charges accrued in March 2023 and the subsequent efficiencies achieved from the restructuring along with a price increase taken in the first quarter of 2023 on slightly higher volumes led to the improved earnings.

We manage our business in the U.S. looking at earnings before tax (EBT) and excluding the effects of LIFO and non-reoccurring events such as the pension settlement. This non-GAAP adjusted EBT (as shown in the table below) is down $0.7 million for the three months but up $9.7 million for the trailing twelve months primarily from strong results in the pharmaceutical, food and beverage, and components divisions.

	Three Months Ended March 31							Twelve Months Ended March 31
(In Thousands)		2024			2023				2024			2023
Domestic Net Income	$	4,048		$	4,450			$	(11,730	)	$	9,852
Income Tax Expense	$	1,171		$	1,405			$	(4,991	)	$	3,020
Domestic EBT - GAAP	$	5,219		$	5,855			$	(16,721	)	$	12,872
LIFO Adjustment	$	(217	)	$	(185	)		$	51		$	2,577
Pension Adjustment	$	-		$	-			$	41,774		$	-
Domestic EBT - Non-GAAP	$	5,002		$	5,670			$	25,104		$	15,449

D.   On March 12, 2024, the Board of Directors authorized a tender offer effective from March 15, 2024, through May 7, 2024, for up to $10 million with the option to go to $15 million of the Company’s common stock at a price of $80. As of April 26, 2024, $5.88 million in shares are tendered to the Company’s depository agent. On April 26, 2024, the Company announced that the limit was increased to $15 million.

E.   Effective March 14, 2024, the Company amended its domestic bank borrowing facility to extend the agreement until March 31, 2025, with the following changes:

1. Capacity was reduced from $15 million to $10 million.
2. Interest rate spread was changed from “SOFR+10” plus 1.15% to “SOFR+10” plus 1.35%.
3. Financial leverage test of trailing twelve-month Debt/EBITDA was eliminated.

F.   The pre-tax results for the three months ended March 31, 2024, were favorably affected by $0.2 million decrease in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2024, were unfavorably affected by $0.1 million increase in the LIFO reserve. The pre-tax results for the three months ended March 31, 2023, were favorably affected by $0.2 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2023 were unfavorably affected by $2.6 million increase in the LIFO reserve.

G.   The consolidated financials are affected by the euro to dollar exchange rate when consolidating Mueller B.V., the Dutch subsidiary. The month-end euro to dollar exchange rate was 1.09 for March 2023, 1.10 for December 2023, and 1.08 for March 2024, respectively.

This press release contains forward-looking statements that provide current expectations of future events based on certain assumptions. All statements regarding future performance growth, conditions, or developments are forward-looking statements. Actual future results may differ materially from those described in the forward-looking statements due to a variety of factors, including, but not limited to, the factors described in the Company’s Annual Report under “Safe Harbor for Forward-Looking Statements”, which is available at paulmueller.com. The Company expressly disclaims any obligation or undertaking to update these forward-looking statements to reflect any future events or circumstances.

The accounting policies related to this report and additional management discussion and analysis are provided in the 2023 annual report, available at
www.paulmueller.com.

Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | [phone]
[e-mail] | http://paulmueller.com