Mueller Industries, Inc. Reports First Quarter 2017 Earnings

MEMPHIS, Tenn., April 25, 2017 -- Mueller Industries, Inc. (NYSE: MLI) announced today operating income of $45.6 million for the first quarter of 2017, a 10 percent increase over the same period in 2016. Net income for the period was $30.0 million, or 52 cents per diluted share, compared with net income of $28.6 million, or 50 cents per diluted share in the prior year. Net sales for the first quarter of 2017 were $577.9 million compared with $532.8 million in the same quarter of 2016.

Financial and Operating Highlights for the first quarter of 2017:

The first quarter of 2017 contained one less week compared with the first quarter of 2016, a 7 percent decrease in shipping days.

 

Net sales impacts:

 

The average price of copper rose 26 percent, or 55 cents per pound, compared with the same period of 2016. This positively influenced net sales to the tune of $66.8 million.

 

The aforementioned shorter period in 2017 resulted in a reduction in net sales of approximately $31.0 million.

 

The period included a loss of $1.2 million from Tecumseh Products Co., an unconsolidated affiliate, versus net income of $2.9 million in the same period of 2016.

 

At quarter end, cash totaled $146.9 million, equal to $2.55 per share, after the $179.8 million in cash dividends distributed during the quarter.

 

On March 9, 2017, the Company distributed a special dividend of $8.00 per share, consisting of $3.00 in cash and $5.00 in principal amount of the Company’s 6% Subordinated Debentures due in 2027. The effect of the special dividend was a decrease in stockholders’ equity of approximately $458.7 million, an increase in long-term debt of approximately $284.5 million, and a decrease in cash of approximately $174.2 million.

 

The Company also paid a regular quarterly cash dividend of 10 cents per share.

Regarding the outlook, Greg Christopher, Mueller CEO, said, “The year started where 2016 left off. The primary drivers of the U.S. businesses continue on a path of steady improvement and we remain optimistic that the international markets will improve over time.” 

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 Memphis, Tennessee and comprises a network of operations in the United States, Canada, Mexico, Great Britain, South Korea, 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.

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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.

CONTACT
Jeffrey A. Martin
(901)753-3226

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

For the Quarter Ended

(In thousands, except per share data)

 

April 1, 2017

 

April 2, 2016

 

 

 

 

 

Net sales

 

$

577,920

 

 

$

532,809

 

 

 

 

 

 

Cost of goods sold

 

488,427

 

446,642

Depreciation and amortization

 

8,355

 

8,920

Selling, general, and administrative expense

 

35,531

 

35,780

 

 

 

 

 

Operating income

 

45,607

 

41,467

 

 

 

 

 

Interest expense

 

(2,531

)

 

(1,848

)

Other income, net

 

551

 

 

245

 

 

 

 

 

 

Income before income taxes

 

43,627

 

39,864

 

 

 

 

 

 

Income tax expense

 

(11,929

)

 

(14,121

)

(Loss) income from unconsolidated affiliates, net of tax

 

(1,243

)

 

2,922

 

 

 

 

 

 

Consolidated net income

 

30,455

 

 

28,665

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

(468

)

 

(35

)

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

 

$

29,987

 

 

$

28,630

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

56,780

 

56,467

Effect of dilutive stock-based awards

 

658

 

495

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

57,438

 

56,962

 

 

 

 

 

Basic earnings per share

 

$

0.53

 

 

$

0.51

 

 

 

 

 

 

Diluted earnings per share

 

$

0.52

 

 

$

0.50

 

 

 

 

 

 

Dividends per share

 

$

8.100

 

 

$

0.075

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

    Piping Systems Segment

 

$

398,775

 

 

$

368,890

 

    Industrial Metals Segment

 

149,837

 

134,521

    Climate Segment

 

34,279

 

30,706

    Elimination of intersegment sales

 

(4,971

)

 

(1,308

)

 

 

 

 

 

Net sales

 

$

577,920

 

 

$

532,809

 

 

 

 

 

 

Operating income:

 

 

 

 

    Piping Systems Segment

 

$

30,366

 

 

$

31,159

 

    Industrial Metals Segment

 

20,666

 

19,912

    Climate Segment

 

5,610

 

3,879

    Unallocated expenses

 

(11,035

)

 

(13,483

)

 

 

 

 

 

Operating income

 

$

45,607

 

 

$

41,467

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(In thousands)

April 1, 2017

 

December 31, 2016

ASSETS

 

 

 

Cash and cash equivalents

$

146,891

 

 

$

351,317

 

Accounts receivable, net

312,095

 

256,291

Inventories

251,958

 

242,013

Other current assets

45,141

 

44,702

 

 

 

 

    Total current assets

756,085

 

894,323

 

 

 

 

Property, plant, and equipment, net

296,360

 

295,231

Other assets

252,476

 

257,922

 

 

 

 

 

$

1,304,921

 

 

$

1,447,476

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current portion of debt

$

14,939

 

 

$

13,655

 

Accounts payable

117,251

 

103,175

Other current liabilities

99,498

 

102,162

 

 

 

 

    Total current liabilities

231,688

 

218,992

 

 

 

 

Long-term debt

489,787

 

213,709

Pension and postretirement liabilities

31,012

 

31,273

Environmental reserves

20,993

 

21,208

Deferred income taxes

18,249

 

19,573

Other noncurrent liabilities

6,447

 

6,284

 

 

 

 

    Total liabilities

798,176

 

511,039

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

467,875

 

 

898,684

Noncontrolling interests

38,870

 

 

37,753

 

 

 

 

    Total equity

506,745

 

 

936,437

 

 

 

 

 

$

1,304,921

 

 

$

1,447,476

 

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

For the Quarter Ended

 (In thousands)

April 1, 2017

 

April 2, 2016

 

 

 

 

Cash flows from operating activities

 

 

 

Consolidated net income

$

30,455

 

 

$

28,665

 

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

 

 

 

Depreciation and amortization

8,419

 

 

9,011

 

Stock-based compensation expense

1,736

 

 

1,236

 

Loss (income) from unconsolidated affiliates

1,243

 

 

(2,922

)

Gain on disposals of assets

(16

)

 

(23

)

Gain on sales of securities

(254

)

 

 

Deferred income taxes

(80

)

 

1,895

 

Income tax benefit from exercise of stock options

 

 

(96

)

Changes in assets and liabilities, net of businesses acquired:

 

 

 

Receivables

(53,756

)

 

(25,089

)

Inventories

(6,991

)

 

(1,631

)

Other assets

1,205

 

 

(370

)

Current liabilities

8,215

 

 

655

 

Other liabilities

(668

)

 

(704

)

Other, net

(930

)

 

(291

)

 

 

 

 

Net cash (used in) provided by operating activities

(11,422

)

 

10,336

 

 

 

 

 

Cash flows from investing activities

 

 

 

Capital expenditures

(7,345

)

 

(5,892

)

Net (deposits in) withdrawals from restricted cash balances

(1,403

)

 

84

 

Proceeds from sales of assets

192

 

 

1

 

Proceeds from sales of securities

1,444

 

 

 

 

 

 

 

Net cash used in investing activities

(7,112

)

 

(5,807

)

 

 

 

 

Cash flows from financing activities

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

(179,848

)

 

(4,236

)

Issuance of long-term debt

 

 

2,000

 

Repayment of debt by consolidated joint ventures, net

(7,367

)

 

(7,024

)

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

(870

)

 

361

 

Repayments of long-term debt

(306

)

 

(250

)

Income tax benefit from exercise of stock options

 

 

96

 

 

 

 

 

Net cash used in financing activities

(188,391

)

 

(9,053

)

 

 

 

 

Effect of exchange rate changes on cash

2,499

 

 

(171

)

 

 

 

 

Decrease in cash and cash equivalents

(204,426

)

 

(4,695

)

Cash and cash equivalents at the beginning of the period

351,317

 

 

274,844

 

 

 

 

 

Cash and cash equivalents at the end of the period

$

146,891

 

 

$

270,149