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:

·

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

 

(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

)

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:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 


 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Quarter Ended

 

 (In thousands)

 

April 2, 2016

 

 

March 28, 2015

 

 

 

 

 

 

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