Mueller Industries, Inc. Reports Third Quarter 2016 Earnings
MEMPHIS, Tenn., October 24, 2016 -- Mueller Industries, Inc. (NYSE: MLI) announced today net income of $26.0 million, or 45 cents per diluted share, for the third quarter of 2016. This compares with net income of $17.8 million, or 31 cents per diluted share, for the third quarter of 2015, a 46 percent increase.
Increased unit volume in the quarter was offset by lower copper prices, resulting in net sales of $506.6 million compared with $535.2 million for the same quarter in 2015.
Financial and Operating Highlights:
|
- |
The Company recognized a pre-tax impairment charge of $3.0 million during the third quarter of 2016 related to certain manufacturing assets. |
|
- |
The COMEX average price of copper was down 10 percent, or 24 cents per pound, during the period which reduced sales by an estimated $43.4 million. |
|
- |
The third quarter of 2016 results include net income of $1.1 million from Tecumseh Products Co., an unconsolidated affiliate. |
|
- |
At quarter end, cash totaled $297.8 million equal to $5.19 per share. |
|
- |
Debt to total capitalization was 19.8 percent and the current ratio was 4.3 to 1. |
Regarding the outlook Greg Christopher, Mueller CEO, said, "The U.S. construction markets continue to grind upward. Low interest rates, lean inventories of new homes and a high level of builders' confidence support a continued upward trend for residential construction spending. The non-residential construction sector remains healthy despite continued declines in the public construction sector. An aging and deteriorating U.S. infrastructure base and the commitment to promote reinvestment and job creation by both presidential candidates should eventually lead to a positive boost."
He adds, "As noted before, softness in the U.S. industrial sector and the slump in our international markets continues. Improvement in these markets will have a positive influence on our businesses."
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.
|
********************* |
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 |
|
|
For the Nine Months Ended |
|
||||||||||
|
(In thousands, except per share data) |
|
October 1, 2016 |
|
|
September 26, 2015 |
|
|
October 1, 2016 |
|
|
September 26, 2015 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
506,584 |
|
|
$ |
535,184 |
|
|
$ |
1,583,464 |
|
|
$ |
1,628,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
424,668 |
|
|
|
467,167 |
|
|
|
1,327,370 |
|
|
|
1,398,366 |
|
|
Depreciation and amortization |
|
|
9,016 |
|
|
|
8,749 |
|
|
|
26,997 |
|
|
|
24,790 |
|
|
Selling, general, and administrative expense |
|
|
32,413 |
|
|
|
32,241 |
|
|
|
102,707 |
|
|
|
97,922 |
|
|
Asset impairments |
|
|
3,000 |
|
|
|
— |
|
|
|
3,000 |
|
|
|
570 |
|
|
Gain on sale of assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15,376 |
) |
|
Severance |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
37,487 |
|
|
|
27,027 |
|
|
|
123,390 |
|
|
|
118,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,830 |
) |
|
|
(1,682 |
) |
|
|
(5,370 |
) |
|
|
(5,977 |
) |
|
Other income, net |
|
|
120 |
|
|
|
164 |
|
|
|
880 |
|
|
|
534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
35,777 |
|
|
|
25,509 |
|
|
|
118,900 |
|
|
|
112,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(10,837 |
) |
|
|
(5,223 |
) |
|
|
(38,963 |
) |
|
|
(36,374 |
) |
|
Income (loss) from unconsolidated affiliates, net of tax |
|
|
1,122 |
|
|
|
(2,191 |
) |
|
|
3,049 |
|
|
|
(2,191 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
|
26,062 |
|
|
|
18,095 |
|
|
|
82,986 |
|
|
|
74,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests |
|
|
(84 |
) |
|
|
(295 |
) |
|
|
(581 |
) |
|
|
(868 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Mueller Industries, Inc. |
|
$ |
25,978 |
|
|
$ |
17,800 |
|
|
$ |
82,405 |
|
|
$ |
73,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares for basic earnings per share |
|
|
56,631 |
|
|
|
56,375 |
|
|
|
56,536 |
|
|
|
56,272 |
|
|
Effect of dilutive stock-based awards |
|
|
586 |
|
|
|
598 |
|
|
|
589 |
|
|
|
690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average shares for diluted earnings per share |
|
|
57,217 |
|
|
|
56,973 |
|
|
|
57,125 |
|
|
|
56,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.46 |
|
|
$ |
0.32 |
|
|
$ |
1.46 |
|
|
$ |
1.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.45 |
|
|
$ |
0.31 |
|
|
$ |
1.44 |
|
|
$ |
1.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
|
$ |
0.100 |
|
|
$ |
0.075 |
|
|
$ |
0.275 |
|
|
$ |
0.225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Segment Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Piping Systems Segment |
|
$ |
351,557 |
|
|
$ |
367,892 |
|
|
$ |
1,109,109 |
|
|
$ |
1,109,124 |
|
|
Industrial Metals Segment |
|
|
131,350 |
|
|
|
139,472 |
|
|
|
393,608 |
|
|
|
435,736 |
|
|
Climate Segment |
|
|
30,003 |
|
|
|
28,494 |
|
|
|
92,068 |
|
|
|
85,803 |
|
|
Elimination of intersegment sales |
|
|
(6,326 |
) |
|
|
(674 |
) |
|
|
(11,321 |
) |
|
|
(2,644 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
506,584 |
|
|
$ |
535,184 |
|
|
$ |
1,583,464 |
|
|
$ |
1,628,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Piping Systems Segment |
|
$ |
24,138 |
|
|
$ |
25,422 |
|
|
$ |
88,256 |
|
|
$ |
94,916 |
|
|
Industrial Metals Segment |
|
|
18,749 |
|
|
|
9,128 |
|
|
|
55,785 |
|
|
|
48,562 |
|
|
Climate Segment |
|
|
4,824 |
|
|
|
3,443 |
|
|
|
14,540 |
|
|
|
9,958 |
|
|
Unallocated expenses |
|
|
(10,224 |
) |
|
|
(10,966 |
) |
|
|
(35,191 |
) |
|
|
(35,131 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
37,487 |
|
|
$ |
27,027 |
|
|
$ |
123,390 |
|
|
$ |
118,305 |
|
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
(In thousands) |
|
October 1, 2016 |
|
|
December 26, 2015 |
|
||
|
ASSETS |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
297,793 |
|
|
$ |
274,844 |
|
|
Accounts receivable, net |
|
|
295,672 |
|
|
|
251,571 |
|
|
Inventories |
|
|
251,130 |
|
|
|
239,378 |
|
|
Other current assets |
|
|
28,999 |
|
|
|
34,608 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
873,594 |
|
|
|
800,401 |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant, and equipment, net |
|
|
289,074 |
|
|
|
280,224 |
|
|
Other assets |
|
|
263,453 |
|
|
|
258,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,426,121 |
|
|
$ |
1,338,801 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
|
Current portion of debt |
|
$ |
16,907 |
|
|
$ |
11,760 |
|
|
Accounts payable |
|
|
92,451 |
|
|
|
88,051 |
|
|
Other current liabilities |
|
|
92,842 |
|
|
|
109,618 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
202,200 |
|
|
|
209,429 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
213,847 |
|
|
|
204,250 |
|
|
Pension and postretirement liabilities |
|
|
31,538 |
|
|
|
34,876 |
|
|
Environmental reserves |
|
|
20,708 |
|
|
|
20,943 |
|
|
Deferred income taxes |
|
|
19,106 |
|
|
|
7,161 |
|
|
Other noncurrent liabilities |
|
|
2,118 |
|
|
|
2,440 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
489,517 |
|
|
|
479,099 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Mueller Industries, Inc. stockholders’ equity |
|
|
893,772 |
|
|
|
827,285 |
|
|
Noncontrolling interests |
|
|
42,832 |
|
|
|
32,417 |
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
936,604 |
|
|
|
859,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,426,121 |
|
|
$ |
1,338,801 |
|
|
|
|
|
|
|
|
|
|
|
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
For the Nine Months Ended |
|
|||||
|
(In thousands) |
|
October 1, 2016 |
|
|
September 26, 2015 |
|
||
|
|
|
|
|
|
||||
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
$ |
82,986 |
|
|
$ |
74,297 |
|
|
Reconciliation of consolidated
net income to net cash |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
27,267 |
|
|
|
25,132 |
|
|
Stock-based compensation expense |
|
|
4,553 |
|
|
|
4,611 |
|
|
Equity in (earnings) losses of unconsolidated affiliates |
|
|
(3,049 |
) |
|
|
2,191 |
|
|
Gain on disposal of assets |
|
|
(747 |
) |
|
|
(14,875 |
) |
|
Impairment charges |
|
|
3,000 |
|
|
|
570 |
|
|
Deferred income taxes |
|
|
6,491 |
|
|
|
(8,262 |
) |
|
Income tax benefit from exercise of stock options |
|
|
— |
|
|
|
(953 |
) |
|
Changes in assets and liabilities, net of businesses acquired: |
|
|
|
|
|
|
|
|
|
Receivables |
|
|
(45,780 |
) |
|
|
5,249 |
|
|
Inventories |
|
|
(914 |
) |
|
|
29,901 |
|
|
Other assets |
|
|
14,428 |
|
|
|
4,302 |
|
|
Current liabilities |
|
|
(15,998 |
) |
|
|
(27,580 |
) |
|
Other liabilities |
|
|
(2,101 |
) |
|
|
740 |
|
|
Other, net |
|
|
450 |
|
|
|
145 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
70,586 |
|
|
|
95,468 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(15,632 |
) |
|
|
(22,502 |
) |
|
Businesses acquired, net of cash acquired |
|
|
(20,533 |
) |
|
|
(107,405 |
) |
|
Net withdrawals from restricted cash balances |
|
|
1,177 |
|
|
|
1,822 |
|
|
Investment in unconsolidated affiliates |
|
|
— |
|
|
|
(65,900 |
) |
|
Proceeds from the sales of assets |
|
|
5,301 |
|
|
|
5,521 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(29,687 |
) |
|
|
(188,464 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Dividends paid to stockholders of Mueller Industries, Inc. |
|
|
(15,555 |
) |
|
|
(12,669 |
) |
|
Dividends paid to noncontrolling interests |
|
|
(3,765 |
) |
|
|
— |
|
|
Repayment of debt by joint ventures, net |
|
|
5,006 |
|
|
|
(21,597 |
) |
|
Issuance of long-term debt |
|
|
2,000 |
|
|
|
— |
|
|
Net cash used to settle stock-based awards |
|
|
(1,356 |
) |
|
|
(718 |
) |
|
Repayments of long-term debt |
|
|
(769 |
) |
|
|
(750 |
) |
|
Income tax benefit from exercise of stock options |
|
|
— |
|
|
|
953 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(14,439 |
) |
|
|
(34,781 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
(3,511 |
) |
|
|
(3,612 |
) |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
|
22,949 |
|
|
|
(131,389 |
) |
|
Cash and cash equivalents at the beginning of the period |
|
|
274,844 |
|
|
|
352,134 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period |
|
$ |
297,793 |
|
|
$ |
220,745 |
|
|
|
|
|
|
|
|
|
|
|
Released October 24, 2016