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, 2021				September 26, 2020				September 25, 2021				September 26, 2020
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, 2021				December 26, 2020
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, 2021				September 26, 2020
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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