Paul Mueller Company Announces Its Third Quarter Earnings of 2020

SPRINGFIELD, Mo., Oct. 30, 2020 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended September 30, 2020.

PAUL MUELLER COMPANY
NINE-MONTH REPORT
Unaudited
(In thousands)
CONSOLIDATED STATEMENTS OF INCOME
						Three Months Ended				Nine Months Ended				Twelve Months Ended
						September 30				September 30				September 30
						2020		2019		2020		2019		2020		2019
Net Sales						$ 51,607		$ 45,968		$ 146,990		$ 141,911		$ 202,256		$ 187,529
Cost of Sales						35,504		33,117		102,405		103,883		140,957		137,825
Gross Profit						$ 16,103		$ 12,851		$ 44,585		$ 38,028		$ 61,299		$ 49,704
Selling, General and Administrative Expense						11,167		11,205		33,156		33,701		45,127		45,666
Operating Income						$ 4,936		$ 1,646		$ 11,429		$ 4,327		$ 16,172		$ 4,038
Interest Expense						(110)		(213)		(819)		(808)		(838)		(995)
Other Income						427		81		869		366		854		365
Income before Provision for Income Taxes						$ 5,253		$ 1,514		$ 11,479		$ 3,885		$ 16,188		$ 3,408
Provision for Income Taxes						1,258		374		2,761		861		3,905		524
Net Income						$ 3,995		$ 1,140		$ 8,718		$ 3,024		$ 12,283		$ 2,884
Earnings per Common Share ––				Basic		$3.34		$0.95		$7.29		$2.53		$10.27		$2.41
				Diluted		$3.34		$0.95		$7.29		$2.53		$10.27		$2.41
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
										Nine Months Ended
										September 30
										2020		2019
			Net Income							$ 8,718		$ 3,024
			Other Comprehensive Income (Loss), Net of Tax:
			Foreign Currency Translation Adjustment							1,590		(1,216)
			Comprehensive Income							$ 10,308		$ 1,808
CONSOLIDATED BALANCE SHEETS
										September 30		December 31
										2020		2019
			Cash and Short-Term Investments							$ 21,583		$ 1,072
			Accounts Receivable							20,273		28,509
			Inventories							21,042		20,552
			Current Net Investments in Sales-Type Leases							56		47
			Other Current Assets							1,654		3,763
			Current Assets							$ 64,608		$ 53,943
			Net Property, Plant, and Equipment							45,668		47,406
			Right of Use Assets							1,459		1,421
			Other Assets							23,477		21,355
			Long-Term Net Investments in Sales-Type Leases							840		769
			Total Assets							$ 136,052		$ 124,894
			Accounts Payable							$ 10,513		$ 10,534
			Current Maturities and Short-Term debt							1,370		6,208
			Current Lease Liabilities							466		485
			Other Current Liabilities							31,209		27,021
			Current Liabilities							$ 43,558		$ 44,248
			Long-Term Debt							18,805		15,334
			Long-Term Pension Liabilities							27,288		30,395
			Other Long-Term Liabilities							2,688		1,566
			Lease Liabilities							993		936
			Total Liabilities							$ 93,332		$ 92,479
			Shareholders' Investment							42,720		32,415
			Total Liabilities and Shareholders' Investment							$ 136,052		$ 124,894
SELECTED FINANCIAL DATA
												September 30		December 31
												2020		2019
				Book Value per Common Share								$35.73		$27.11
				Total Shares Outstanding								1,195,747		1,195,866
				Backlog								$ 75,287		$ 79,791
CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT
														Accumulated Other Comprehensive Income (Loss)
						Common Stock		Paid-in Surplus		Retained Earnings		Treasury Stock
																Total
Balance, December 31, 2019						$ 1,508		$ 9,708		$ 68,484		$ (6,341)		$ (40,944)		$ 32,415
Add (Deduct):
	Net Income									8,718						8,718
	Other Comprehensive Income, Net of Tax													1,590		1,590
	Treasury Stock Acquisition											(3)				(3)
Balance, September 30, 2020						$ 1,508		$ 9,708		$ 77,202		$ (6,344)		$ (39,354)		$ 42,720
CONSOLIDATED STATEMENT OF CASH FLOWS
										Nine Months Ended   September 30, 2020				Nine Months Ended September 30, 2019
			Operating Activities:
			Net Income							$ 8,718				$ 3,024
			Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities:
			Pension Contributions (Greater) Less than Expense							(3,107)				(2,631)
			Bad Debt Expense (Recovery)							(15)				(210)
			Depreciation & Amortization							4,855				4,919
			Loss (Gain) on Sales of Equipment							1				(18)
			Change in Assets and Liabilities
			Dec in Accts and Notes Receivable							8,251				2,426
			Dec (Inc) in Cost in Excess of Estimated Earnings and Billings							939				(180)
			(Inc) in Inventories							(490)				(546)
			Dec (Inc) in Prepayments							1,170				(643)
			(Inc) in Net Investment in Sales-type leases							(79)				-
			Dec (Inc) in Intangibles							-				(118)
			(Inc) in Other LT Assets							(338)				(48)
			(Dec) Inc in Accounts Payable							(21)				2,012
			Inc (Dec) in Other Accrued Expenses							7,389				(948)
			Inc in Advanced Billings							1,241				7,295
			(Dec) Inc in Billings in Excess of Costs and Estimated Earnings							(4,441)				1,633
			Inc in Lease Liability for operating							36				-
			Inc in Lease Liability for financing							27				-
			Inc (Dec) In Other Liabilities							108				(198)
			Net Cash Provided by Operating Activities							$ 24,244				$ 15,769
			Investing Activities
			Proceeds from Sales of Equipment							4				31
			Additions to Property, Plant, and Equipment							(3,128)				(1,062)
			Net Cash (Required) for Investing Activities							$ (3,124)				$ (1,031)
			Financing Activities
			(Repayment) of principal portion of lease liability for operating							(26)				-
			(Repayment) of Short-Term Borrowings, Net							(4,826)				(7,692)
			Proceeds (Repayment) of Long-Term Debt							2,640				(5,553)
			Treasury Stock Acquisitions							(3)				-
			Net Cash (Required) for Financing Activities							$ (2,215)				$ (13,245)
			Effect of Exchange Rate Changes							1,606				(1,215)
			Net Increase in Cash and Cash Equivalents							$ 20,511				$ 278
			Cash and Cash Equivalents at Beginning of Year							1,072				715
			Cash and Cash Equivalents at End of Quarter							$ 21,583				$ 993

 

 

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 September 30.

	Three Months Ended September 30
	Revenue		2020			2019
	Domestic	$41,453			$36,168
	Mueller BV	$10,518			$10,310
	Eliminations	($364		)	($510		)
	Net Revenue	$51,607			$45,968

 

The chart below depicts the net revenue on a consolidating basis for the nine months ended September 30.

	Nine Months Ended September 30
	Revenue		2020			2019
	Domestic	$112,979			$104,190
	Mueller BV	$34,907			$39,393
	Eliminations	($896		)	($1,672		)
	Net Revenue	$146,990			$141,911

The chart below depicts the net revenue on a consolidating basis for the twelve months ended September 30.

	Twelve Months Ended September 30
	Revenue		2020			2019
	Domestic	$153,289			$135,378
	Mueller BV	$49,950			$54,123
	Eliminations	($983		)	($1,972		)
	Net Revenue	$202,256			$187,529

The chart below depicts the net income on a consolidating basis for the three months ended September 30.

	Three Months Ended September 30
	Net Income		2020			2019
	Domestic	$3,773			$2,273
	Mueller BV	$169			($1,085		)
	Eliminations	$53			($48		)
	Net Income	$3,995			$1,140

The chart below depicts the net income on a consolidating basis for the nine months ended September 30.

	Nine Months Ended September 30
	Net Income		2020			2019
	Domestic	$8,224			$4,093
	Mueller BV	$431			($997		)
	Eliminations	$63			($72		)
	Net Income	$8,718			$3,024

The chart below depicts the net income on a consolidating basis for the twelve months ended September 30.

	Twelve Months Ended September 30
	Net Income		2020			2019
	Domestic	$11,543			$5,090
	Mueller BV	$623			($2,149		)
	Eliminations	$117			($57		)
	Net Income	$12,283			$2,884

 

B.	The strong beginning of the year backlog in the U.S. and reduced spending has mitigated the initial financial impact of the pandemic resulting in strong earnings for the first nine months. However, the uncertainty in the economy has slowed order entry as well as the increase in COVID-19 cases in the US and Europe is causing concern as countries begin to lock back down. Looking forward, we face the uncertainty of lower pharmaceutical and field backlog, the increasing risk of COVID-19 related disruptions, and increased costs after the aggressive cost-cutting during the beginning of the pandemic.
C.	September 30, 2020 backlog was $75.3 million which is $4.5 million lower than the $79.8 million at December 31, 2019. In the U.S., backlog is $64.2 million which is down $5.5 million from December 31, 2019. Two thirds of the U.S. backlog is in the Pharmaceutical groups and Mueller Field Operations which is working on the large juice storage facility. Mueller BV backlog has been relatively flat but still at recent historic lows.
D.	Revenue for the three, nine and twelve months are higher in the US driven by the large pharmaceutical backlog in the U.S. that went into production in mid-2019. Mueller Field Operations showed increased revenue from the previous year’s quarter from a large juice facility project. Dairy Farm Equipment revenues showed signs of rebounding with a 25% increase in quarterly revenue from the second quarter. In The Netherlands, the business conditions continue to be soft with trailing revenues flat to last year for the quarter but down to last year at nine and twelve months. However, The Netherlands continues to save in expenses.
	Net Income was favorable from the prior year at three, nine and twelve month trailing results. In the US, pharmaceutical and field operations work continue to drive overall profitability and the dairy farm equipment segment experienced its best quarterly results in over a year. In the Netherlands, better margins and expense savings are more than offsetting the reduced revenue.
E.	September 30, 2020, total debt was $20.2 million compared to $21.5 million as of December 31, 2019. Cash and cash equivalents were $21.6 million at September 30, 2020 compared to $1.1 million at December 31, 2019. Advanced Billings for the Company which is a liability representing deposits received from customers on large projects was $10.1 million at September 30th compared to $8.9 million at December 31, 2019.
	All bank covenants were in compliance as of September 30, 2020.
F.	The pre-tax results for the three months ended September 30, 2020, were favorably affected by $0.2 million decrease in the LIFO reserve. The pre-tax results for the nine months ended September 30, 2020, were favorably affected by $0.3 million decrease in the LIFO reserve. The pre-tax results for the twelve months ended September 30, 2020, were favorably affected by $0.8 million decrease in the LIFO reserve. The pre-tax results for the three months ended September 30, 2019, were unfavorably affected by $0.1 million increase in the LIFO reserve. The pre-tax results for the nine months ended September 30, 2019, were unfavorably affected by $0.4 million increase in the LIFO reserve. The pre-tax results for the twelve months ended September 30, 2019, were unfavorably affected by $0.3 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 1.10 for September 2019; 1.12 for December 2019; and 1.17 for September 2020.

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 2019 annual report, available at
www.paulmueller.com.

 

 

Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | [phone]

[e-mail] | http://paulmueller.com