Mueller Industries, Inc. Reports First Quarter 2016 Results
MEMPHIS, Tenn., April 26, 2016 -- Mueller Industries, Inc. (NYSE: MLI) announced that net income for the first quarter of 2016 was $28.6 million, or 50 cents per diluted share, compared with net income of $22.0 million, or 39 cents per diluted share, for the same period of 2015.
Revenues for the first quarter of 2016 were $532.8 million compared with $537.2 million for the same quarter last year. Revenue related to higher unit volume was muted by a decline of approximately $75.2 million in overall selling prices.
Financial and Operating Highlights for the first quarter of 2016:
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· |
Copper prices were down approximately 21% in the first quarter versus the same period last year, resulting in the lower selling prices. |
|
· |
The first quarter of 2016 comprised four more work days than the first quarter of 2015. |
|
· |
Included in the results is $2.9 million of net income from Tecumseh Products Co., an unconsolidated affiliate, which includes effects from purchase accounting. |
|
· |
Ending cash for the period was $270 million or $4.73 per share and our current ratio remains strong at 4.1 to 1. |
Greg Christopher, CEO, said "Business conditions remain consistent with what we saw at the end of 2015 and our view of the future remains steady."
In addition, he commented, "Today, we expect to close on our announced agreement to acquire a 60 percent equity interest in Jungwoo Metal Ind. Co., Ltd, a manufacturer of copper-based joining products. We are pleased to bring this transaction to close, and excited to begin working together."
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, 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 |
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|||||
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(In thousands, except per share data) |
|
April 2, 2016 |
|
|
March 28, 2015 |
|
||
|
|
|
|
|
|
|
|
||
|
Net sales |
|
$ |
532,809 |
|
|
$ |
537,242 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
446,642 |
|
|
|
460,834 |
|
|
Depreciation and amortization |
|
|
8,920 |
|
|
|
7,853 |
|
|
Selling, general, and administrative expense |
|
|
35,780 |
|
|
|
32,831 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
41,467 |
|
|
|
35,724 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,848 |
) |
|
|
(2,076 |
) |
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Other income, net |
|
|
245 |
|
|
|
105 |
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
39,864 |
|
|
|
33,753 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(14,121 |
) |
|
|
(11,413 |
) |
|
Income from unconsolidated affiliate, net of tax |
|
|
2,922 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
|
28,665 |
|
|
|
22,340 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest |
|
|
(35 |
) |
|
|
(362 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Mueller Industries, Inc. |
|
$ |
28,630 |
|
|
$ |
21,978 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares for basic earnings per share |
|
|
56,467 |
|
|
|
56,193 |
|
|
Effect of dilutive stock-based awards |
|
|
495 |
|
|
|
731 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average shares for diluted earnings per share |
|
|
56,962 |
|
|
|
56,924 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.51 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.50 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
|
$ |
0.075 |
|
|
$ |
0.075 |
|
|
|
|
|
|
|
|
|
|
|
|
Summary Segment Data: |
|
|
|
|
|
|
|
|
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Net sales: |
|
|
|
|
|
|
|
|
|
Piping Systems Segment |
|
$ |
368,890 |
|
|
$ |
361,482 |
|
|
Industrial Metals Segment |
|
|
134,521 |
|
|
|
151,036 |
|
|
Climate Segment |
|
|
30,706 |
|
|
|
25,811 |
|
|
Elimination of intersegment sales |
|
|
(1,308 |
) |
|
|
(1,087 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
532,809 |
|
|
$ |
537,242 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
|
Piping Systems Segment |
|
$ |
31,159 |
|
|
$ |
26,259 |
|
|
Industrial Metals Segment |
|
|
19,912 |
|
|
|
18,959 |
|
|
Climate Segment |
|
|
3,879 |
|
|
|
2,265 |
|
|
Unallocated expenses |
|
|
(13,483 |
) |
|
|
(11,759 |
) |
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
41,467 |
|
|
$ |
35,724 |
|
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
(In thousands) |
|
April 2, 2016 |
|
|
December 26, 2015 |
|
||
|
ASSETS |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
270,149 |
|
|
$ |
274,844 |
|
|
Accounts receivable, net |
|
|
275,881 |
|
|
|
251,571 |
|
|
Inventories |
|
|
240,608 |
|
|
|
239,378 |
|
|
Other current assets |
|
|
34,123 |
|
|
|
34,608 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
820,761 |
|
|
|
800,401 |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant, and equipment, net |
|
|
278,481 |
|
|
|
280,224 |
|
|
Other assets |
|
|
261,778 |
|
|
|
258,176 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,361,020 |
|
|
$ |
1,338,801 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
|
Current portion of debt |
|
$ |
4,583 |
|
|
$ |
11,760 |
|
|
Accounts payable |
|
|
98,324 |
|
|
|
88,051 |
|
|
Other current liabilities |
|
|
99,701 |
|
|
|
109,618 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
202,608 |
|
|
|
209,429 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
206,000 |
|
|
|
204,250 |
|
|
Pension and postretirement liabilities |
|
|
33,715 |
|
|
|
34,876 |
|
|
Environmental reserves |
|
|
20,932 |
|
|
|
20,943 |
|
|
Deferred income taxes |
|
|
8,310 |
|
|
|
7,161 |
|
|
Other noncurrent liabilities |
|
|
2,973 |
|
|
|
2,440 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
474,538 |
|
|
|
479,099 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Mueller Industries, Inc. stockholders’ equity |
|
|
854,804 |
|
|
|
827,285 |
|
|
Noncontrolling interest |
|
|
31,678 |
|
|
|
32,417 |
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
886,482 |
|
|
|
859,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,361,020 |
|
|
$ |
1,338,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
For the Quarter Ended |
|
|||||
|
(In thousands) |
|
April 2, 2016 |
|
|
March 28, 2015 |
|
||
|
|
|
|
|
|
||||
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Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
$ |
28,665 |
|
|
$ |
22,340 |
|
|
Reconciliation of consolidated net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
9,011 |
|
|
|
8,015 |
|
|
Equity in earnings of unconsolidated affiliate |
|
|
(2,922 |
) |
|
|
— |
|
|
Stock-based compensation expense |
|
|
1,236 |
|
|
|
1,349 |
|
|
(Gain) loss on disposal of properties |
|
|
(23 |
) |
|
|
1 |
|
|
Deferred income taxes |
|
|
1,895 |
|
|
|
(570 |
) |
|
Income tax benefit from exercise of stock options |
|
|
(96 |
) |
|
|
(69 |
) |
|
Changes in assets and liabilities, net of business acquired: |
|
|
|
|
|
|
|
|
|
Receivables |
|
|
(25,089 |
) |
|
|
(36,692 |
) |
|
Inventories |
|
|
(1,631 |
) |
|
|
7,534 |
|
|
Other assets |
|
|
(370 |
) |
|
|
9,257 |
|
|
Current liabilities |
|
|
655 |
|
|
|
(7,389 |
) |
|
Other liabilities |
|
|
(704 |
) |
|
|
(131 |
) |
|
Other, net |
|
|
(291 |
) |
|
|
245 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
10,336 |
|
|
|
3,890 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(5,892 |
) |
|
|
(7,392 |
) |
|
Net withdrawals from (deposits into) restricted cash balances |
|
|
84 |
|
|
|
(12,593 |
) |
|
Proceeds from sale of assets |
|
|
1 |
|
|
|
492 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(5,807 |
) |
|
|
(19,493 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Dividends paid to stockholders of Mueller Industries, Inc. |
|
|
(4,236 |
) |
|
|
(4,216 |
) |
|
Repayment of debt by joint venture, net |
|
|
(7,024 |
) |
|
|
(3,817 |
) |
|
Repayment of long-term debt |
|
|
(250 |
) |
|
|
(250 |
) |
|
Issuance of long-term debt |
|
|
2,000 |
|
|
|
— |
|
|
Net cash received to settle stock-based awards |
|
|
361 |
|
|
|
93 |
|
|
Income tax benefit from exercise of stock options |
|
|
96 |
|
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(9,053 |
) |
|
|
(8,121 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
(171 |
) |
|
|
(1,516 |
) |
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents |
|
|
(4,695 |
) |
|
|
(25,240 |
) |
|
Cash and cash equivalents at the beginning of the period |
|
|
274,844 |
|
|
|
352,134 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period |
|
$ |
270,149 |
|
|
$ |
326,894 |
|
Released April 26, 2016