Mueller Industries, Inc. Reports Second Quarter 2020 Earnings

Nachrichtenquelle: Business Wire (engl.)
21.07.2020, 13:00  |  122   |   |   

Mueller Industries, Inc. (NYSE: MLI) announced second quarter operating income of $52.3 million, compared with $51.5 million for the prior year period.

Net income for the second quarter was $28.0 million, or 50 cents per diluted share, the same as reported for 2019. Net sales were $500.2 million, compared with $666.4 million in the second quarter of 2019.

Second Quarter Financial and Operating Highlights:

  • On average, COMEX copper traded 13 percent lower during the quarter versus the same period of 2019.
  • Approximately $29.0 million of the quarter-over-quarter decline in sales was due to lower copper prices, with the balance attributable to lower volumes, which stemmed in large part from the COVID-19 shutdowns.
  • Mark-to-market recovery on open hedge positions improved earnings by $3.3 million.
  • We recorded an $8.6 million loss on our investment in Tecumseh Products Company, compared to the $5.3 million loss recorded during the prior year period. Included in the $8.6 million loss was $1.7 million of pre-tax restructuring charges and $3.0 million in foreign currency losses. Our restructuring efforts will continue.
  • The effective tax rate for the quarter was 26 percent, compared with 23 percent in the prior year period.
  • During the quarter, we generated $114.7 million in cash from operations and repaid $145.0 million on our revolving credit facility.
  • Cash on hand was $123.6 million at quarter-end, with only $35.0 million drawn on our revolving credit facility.

Regarding the state of the Company and outlook, Greg Christopher, Mueller CEO said:

“Our proactive response to the COVID-19 pandemic, combined with timely cost controls, was critical to our continued profitability, notwithstanding volume declines. We anticipate that our businesses will strengthen as global economies continue to reopen. Given our low cost platform, we believe we are well positioned to remain solidly profitable, even at reduced demand levels.”

Mueller Industries, Inc. is an industrial manufacturer that specializes in copper and copper alloy manufacturing while also producing goods made from aluminum, steel, and plastics. It is headquartered in Collierville, Tennessee and comprises a network of operations in the United States, Canada, Mexico, Great Britain, South Korea, the Middle East, and China. Its products include tubing, fittings, valves, vessels, and related items for plumbing and HVACR related piping systems, as well as rod, forgings, extrusions, and various components for OEM applications. Products are distributed into sectors such as building construction, appliance, defense, energy, and automotive.

*********************

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 Six Months Ended

(In thousands, except per share data)

 

June 27, 2020

 

June 29, 2019

 

June 27, 2020

 

June 29, 2019

 

 

 

 

 

 

 

 

 

Net sales

 

$

500,168

 

 

$

666,394

 

 

$

1,103,087

 

 

$

1,278,175

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

403,159

 

 

563,948

 

 

911,874

 

 

1,075,341

 

Depreciation and amortization

 

11,097

 

 

10,478

 

 

22,136

 

 

21,033

 

Selling, general, and administrative expense

 

33,616

 

 

40,446

 

 

76,368

 

 

81,099

 

Asset impairments

 

 

 

 

 

3,035

 

 

 

Litigation settlement, net

 

 

 

 

 

(21,933

)

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

52,296

 

 

51,522

 

 

111,607

 

 

100,702

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(4,973

)

 

(7,033

)

 

(10,352

)

 

(13,987

)

Other income, net

 

2,834

 

 

462

 

 

3,112

 

 

290

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

50,157

 

 

44,951

 

 

104,367

 

 

87,005

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

(13,029

)

 

(10,432

)

 

(27,173

)

 

(19,978

)

Loss from unconsolidated affiliates, net of foreign tax

 

(8,641

)

 

(5,843

)

 

(14,756

)

 

(21,212

)

 

 

 

 

 

 

 

 

 

Consolidated net income

 

28,487

 

 

28,676

 

 

62,438

 

 

45,815

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

(531

)

 

(690

)

 

(2,067

)

 

(2,106

)

 

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

 

$

27,956

 

 

$

27,986

 

 

$

60,371

 

 

$

43,709

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

55,723

 

 

55,753

 

 

55,799

 

 

55,741

 

Effect of dilutive stock-based awards

 

471

 

 

561

 

 

527

 

 

543

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

56,194

 

 

56,314

 

 

56,326

 

 

56,284

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.50

 

 

$

0.50

 

 

$

1.08

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.50

 

 

$

0.50

 

 

$

1.07

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.10

 

 

$

0.10

 

 

$

0.20

 

 

$

0.20

 

 

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

334,040

 

 

$

425,865

 

 

$

719,053

 

 

$

802,357

 

Industrial Metals Segment

 

88,619

 

 

147,719

 

 

219,821

 

 

298,594

 

Climate Segment

 

86,107

 

 

96,081

 

 

179,379

 

 

185,915

 

Elimination of intersegment sales

 

(8,598

)

 

(3,271

)

 

(15,166

)

 

(8,691

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

500,168

 

 

$

666,394

 

 

$

1,103,087

 

 

$

1,278,175

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

41,074

 

 

$

35,896

 

 

$

77,750

 

 

$

64,145

 

Industrial Metals Segment

 

8,873

 

 

14,911

 

 

20,055

 

 

34,098

 

Climate Segment

 

12,353

 

 

13,035

 

 

25,367

 

 

25,421

 

Unallocated expenses

 

(10,004

)

 

(12,320

)

 

(11,565

)

 

(22,962

)

 

 

 

 

 

 

 

 

 

Operating income

 

$

52,296

 

 

$

51,522

 

 

$

111,607

 

 

$

100,702

 

 

     

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

     

 

 

(Unaudited)

 

 

(In thousands)

 

June 27,
2020

 

December 28,
2019

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

123,610

 

$

97,944

Accounts receivable, net

 

273,710

 

269,943

Inventories

 

244,414

 

292,107

Other current assets

 

28,957

 

33,778

 

 

 

 

 

Total current assets

 

670,691

 

693,772

 

 

 

 

 

Property, plant, and equipment, net

 

362,785

 

363,128

Operating lease right-of-use assets

 

17,172

 

26,922

Other assets

 

272,742

 

287,118

 

 

 

 

 

 

 

$

1,323,390

 

$

1,370,940

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current portion of debt

 

$

6,543

 

$

7,530

Accounts payable

 

93,579

 

85,644

Current portion of operating lease liabilities

 

4,623

 

5,250

Other current liabilities

 

124,519

 

135,863

 

 

 

 

 

Total current liabilities

 

229,264

 

234,287

 

 

 

 

 

Long-term debt

 

323,114

 

378,724

Pension and postretirement liabilities

 

17,998

 

22,208

Environmental reserves

 

19,776

 

19,972

Deferred income taxes

 

19,635

 

21,094

Noncurrent operating lease liabilities

 

13,009

 

22,388

Other noncurrent liabilities

 

10,390

 

10,131

 

 

 

 

 

Total liabilities

 

633,186

 

708,804

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

670,681

 

643,468

Noncontrolling interests

 

19,523

 

18,668

 

 

 

 

 

Total equity

 

690,204

 

662,136

 

 

 

 

 

 

 

$

1,323,390

 

$

1,370,940

 

   

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

   

 

 

For the Six Months Ended

(In thousands)

 

June 27, 2020

 

June 29, 2019

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Consolidated net income

 

$

62,438

 

 

$

45,815

 

Reconciliation of consolidated net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

22,296

 

 

21,192

 

Stock-based compensation expense

 

4,198

 

 

4,302

 

Provision for doubtful accounts receivable

 

1,850

 

 

(100

)

Loss from unconsolidated affiliates

 

14,756

 

 

21,212

 

Gain on disposals of properties

 

(9

)

 

(37

)

Impairment charges

 

3,035

 

 

 

Deferred income tax expense (benefit)

 

764

 

 

(67

)

Changes in assets and liabilities, net of effects of business acquired:

 

 

 

 

Receivables

 

(11,212

)

 

(42,045

)

Inventories

 

43,263

 

 

30,080

 

Other assets

 

3,967

 

 

(4,617

)

Current liabilities

 

(277

)

 

(9,735

)

Other liabilities

 

(5,369

)

 

(1,485

)

Other, net

 

3,082

 

 

(532

)

 

 

 

 

 

Net cash provided by operating activities

 

142,782

 

 

63,983

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Capital expenditures

 

(22,215

)

 

(13,034

)

Acquisition of business, net of cash acquired

 

(15,415

)

 

3,465

 

Investments in unconsolidated affiliates

 

 

 

(10,500

)

Proceeds from sales of properties

 

1

 

 

351

 

 

 

 

 

 

Net cash used in investing activities

 

(37,629

)

 

(19,718

)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

(11,168

)

 

(11,151

)

Repurchase of common stock

 

(5,574

)

 

(1,763

)

Issuance of long-term debt

 

110,015

 

 

100,638

 

Repayments of long-term debt

 

(166,021

)

 

(110,914

)

Repayment of debt by consolidated joint ventures, net

 

(471

)

 

(4,132

)

Net cash received (used) to settle stock-based awards

 

696

 

 

(127

)

 

 

 

 

 

Net cash used in financing activities

 

(72,523

)

 

(27,449

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

(6,160

)

 

118

 

 

 

 

 

 

Increase in cash, cash equivalents, and restricted cash

 

26,470

 

 

16,934

 

Cash, cash equivalents, and restricted cash at the beginning of the period

 

98,042

 

 

77,138

 

 

 

 

 

 

Cash, cash equivalents, and restricted cash at the end of the period

 

$

124,512

 

 

$

94,072

 

 

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