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:
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• |
The first quarter of 2017 contained one less week compared with the first quarter of 2016, a 7 percent decrease in shipping days. |
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Net sales impacts: |
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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. |
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The aforementioned shorter period in 2017 resulted in a reduction in net sales of approximately $31.0 million. |
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• |
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. |
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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. |
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• |
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. |
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• |
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)
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|
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For the Quarter Ended |
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(In thousands, except per share data) |
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April 1, 2017 |
|
April 2, 2016 |
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|
|
|
|
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Net sales |
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$ |
577,920 |
|
|
$ |
532,809 |
|
|
|
|
|
|
|
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Cost of goods sold |
|
488,427 |
|
446,642 |
||||
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Depreciation and amortization |
|
8,355 |
|
8,920 |
||||
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Selling, general, and administrative expense |
|
35,531 |
|
35,780 |
||||
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|
|
|
|
|
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Operating income |
|
45,607 |
|
41,467 |
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|
|
|
|
|
||||
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Interest expense |
|
(2,531 |
) |
|
(1,848 |
) |
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Other income, net |
|
551 |
|
|
245 |
|
||
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|
|
|
|
|
||||
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Income before income taxes |
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43,627 |
|
39,864 |
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|||
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|
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|
|
|
||||
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Income tax expense |
|
(11,929 |
) |
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(14,121 |
) |
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(Loss) income from unconsolidated affiliates, net of tax |
|
(1,243 |
) |
|
2,922 |
|
||
|
|
|
|
|
|
||||
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Consolidated net income |
|
30,455 |
|
|
28,665 |
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||
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|
|
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Net income attributable to noncontrolling interests |
|
(468 |
) |
|
(35 |
) |
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|
|
|
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Net income attributable to Mueller Industries, Inc. |
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$ |
29,987 |
|
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$ |
28,630 |
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|
|
|
|
|
|
||||
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Weighted average shares for basic earnings per share |
|
56,780 |
|
56,467 |
||||
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Effect of dilutive stock-based awards |
|
658 |
|
495 |
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|
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|
||||
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Adjusted weighted average shares for diluted earnings per share |
|
57,438 |
|
56,962 |
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|
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Basic earnings per share |
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$ |
0.53 |
|
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$ |
0.51 |
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Diluted earnings per share |
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$ |
0.52 |
|
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$ |
0.50 |
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|
|
|
|
|
||||
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Dividends per share |
|
$ |
8.100 |
|
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$ |
0.075 |
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Summary Segment Data: |
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Net sales: |
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|
|
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Piping Systems Segment |
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$ |
398,775 |
|
|
$ |
368,890 |
|
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Industrial Metals Segment |
|
149,837 |
|
134,521 |
||||
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Climate Segment |
|
34,279 |
|
30,706 |
||||
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Elimination of intersegment sales |
|
(4,971 |
) |
|
(1,308 |
) |
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|
|
|
|
|
|
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Net sales |
|
$ |
577,920 |
|
|
$ |
532,809 |
|
|
|
|
|
|
|
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Operating income: |
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|
|
|
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Piping Systems Segment |
|
$ |
30,366 |
|
|
$ |
31,159 |
|
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Industrial Metals Segment |
|
20,666 |
|
19,912 |
||||
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Climate Segment |
|
5,610 |
|
3,879 |
||||
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Unallocated expenses |
|
(11,035 |
) |
|
(13,483 |
) |
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|
|
|
|
|
|
||||
|
Operating income |
|
$ |
45,607 |
|
|
$ |
41,467 |
|
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
(In thousands) |
April 1, 2017 |
|
December 31, 2016 |
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ASSETS |
|
|
|
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Cash and cash equivalents |
$ |
146,891 |
|
|
$ |
351,317 |
|
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Accounts receivable, net |
312,095 |
|
256,291 |
||||
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Inventories |
251,958 |
|
242,013 |
||||
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Other current assets |
45,141 |
|
44,702 |
||||
|
|
|
|
|
||||
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Total current assets |
756,085 |
|
894,323 |
||||
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|
|
|
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Property, plant, and equipment, net |
296,360 |
|
295,231 |
||||
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Other assets |
252,476 |
|
257,922 |
||||
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|
|
|
|
||||
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$ |
1,304,921 |
|
|
$ |
1,447,476 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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|
|
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Current portion of debt |
$ |
14,939 |
|
|
$ |
13,655 |
|
|
Accounts payable |
117,251 |
|
103,175 |
||||
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Other current liabilities |
99,498 |
|
102,162 |
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|
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Total current liabilities |
231,688 |
|
218,992 |
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|
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Long-term debt |
489,787 |
|
213,709 |
||||
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Pension and postretirement liabilities |
31,012 |
|
31,273 |
||||
|
Environmental reserves |
20,993 |
|
21,208 |
||||
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Deferred income taxes |
18,249 |
|
19,573 |
||||
|
Other noncurrent liabilities |
6,447 |
|
6,284 |
||||
|
|
|
|
|
||||
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Total liabilities |
798,176 |
|
511,039 |
||||
|
|
|
|
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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 |
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|
(In thousands) |
April 1, 2017 |
|
April 2, 2016 |
||||
|
|
|
|
|
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Cash flows from operating activities |
|
|
|
||||
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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 |
|
||
|
|
|
|
|
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|
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 |
|
Released April 25, 2017