Mueller Industries, Inc. Reports Fourth Quarter and Fiscal 2015 Earnings
MEMPHIS, Tenn., February 2, 2016-- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the fourth quarter ending December 26, 2015 was $14.4 million, or 25 cents per diluted share. This compares with net income of $18.0 million, or 32 cents per diluted share in the fourth quarter of 2014. Net sales for the fourth quarter of 2015 were $472.0 million compared with $537.3 million in the same quarter of the prior year.
For the 2015 fiscal year, net income was $87.9 million, or $1.54 per diluted share, on net sales of $2.1 billion. This compares with net income of $101.6 million, or $1.79 per diluted share, on net sales of $2.4 billion for 2014. The decline in net sales for both the fourth quarter and full year was primarily attributable to lower copper prices, the principal raw material for the Company's manufactured products. COMEX copper was down 26% and 20% respectively for those periods.
Financial and Operating Highlights for the fourth quarter of 2015:
|
· |
The Company ended the year with $274.8 million of cash on hand or $4.81 per share. |
|
· |
Debt to total capitalization was 20% at year-end and the current ratio was 3.8 to 1. |
Regarding the outlook, Greg Christopher, CEO of Mueller Industries, said, "The decline in copper prices in 2015 negatively impacted our pre-tax earnings in excess of $25 million. We do not expect this to reoccur in 2016, as copper prices appear to be stabilizing. Our mill modernization programs are progressing towards completion, and the costs incurred in these programs in 2015 should bestow advantages in 2016 and beyond.
"We anticipate that construction activity in 2016 will continue its steady growth. The consensus view is that non-residential spending will increase by 8.2% and residential spending even more. Overall, we expect construction spending to grow substantially more rapidly than the U.S. economy as a whole."
Mueller Industries, Inc. is a 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.
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 Year Ended |
|
||||||||||
|
(In thousands, except per share data) |
|
December 26, 2015 |
|
|
December 27, 2014 |
|
|
December 26, 2015 |
|
|
December 27, 2014 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
471,983 |
|
|
$ |
537,342 |
|
|
$ |
2,100,002 |
|
|
$ |
2,364,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
411,336 |
|
|
|
468,889 |
|
|
|
1,809,702 |
|
|
|
2,043,719 |
|
|
Depreciation and amortization |
|
|
9,818 |
|
|
|
8,084 |
|
|
|
34,608 |
|
|
|
33,735 |
|
|
Selling, general, and administrative expense |
|
|
31,866 |
|
|
|
31,228 |
|
|
|
130,358 |
|
|
|
131,740 |
|
|
Gain on sale of assets |
|
|
— |
|
|
|
(4,842 |
) |
|
|
(15,376 |
) |
|
|
(6,259 |
) |
|
Severance |
|
|
— |
|
|
|
4,224 |
|
|
|
3,442 |
|
|
|
7,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
18,963 |
|
|
|
29,759 |
|
|
|
137,268 |
|
|
|
153,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,690 |
) |
|
|
(1,827 |
) |
|
|
(7,667 |
) |
|
|
(5,740 |
) |
|
Other income (expense), net |
|
|
1,654 |
|
|
|
(683 |
) |
|
|
2,188 |
|
|
|
(243 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
18,927 |
|
|
|
27,249 |
|
|
|
131,789 |
|
|
|
148,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(7,008 |
) |
|
|
(9,200 |
) |
|
|
(43,382 |
) |
|
|
(45,479 |
) |
|
Income from unconsolidated affiliate, net of tax |
|
|
2,191 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
|
14,110 |
|
|
|
18,049 |
|
|
|
88,407 |
|
|
|
102,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (income) attributable to noncontrolling interest |
|
|
325 |
|
|
|
(62 |
) |
|
|
(543 |
) |
|
|
(974 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Mueller Industries, Inc. |
|
$ |
14,435 |
|
|
$ |
17,987 |
|
|
$ |
87,864 |
|
|
$ |
101,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares for basic earnings per share |
|
|
56,450 |
|
|
|
56,169 |
|
|
|
56,316 |
|
|
|
56,042 |
|
|
Effect of dilutive stock-based awards |
|
|
537 |
|
|
|
668 |
|
|
|
652 |
|
|
|
726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average shares for diluted earnings per share |
|
|
56,987 |
|
|
|
56,837 |
|
|
|
56,968 |
|
|
|
56,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.26 |
|
|
$ |
0.32 |
|
|
$ |
1.56 |
|
|
$ |
1.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.25 |
|
|
$ |
0.32 |
|
|
$ |
1.54 |
|
|
$ |
1.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
|
$ |
0.075 |
|
|
$ |
0.075 |
|
|
$ |
0.300 |
|
|
$ |
0.300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Segment Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plumbing & Refrigeration Segment |
|
$ |
302,898 |
|
|
$ |
323,641 |
|
|
$ |
1,260,273 |
|
|
$ |
1,416,701 |
|
|
OEM Segment |
|
|
171,245 |
|
|
|
216,592 |
|
|
|
849,538 |
|
|
|
959,914 |
|
|
Elimination of intersegment sales |
|
|
(2,160 |
) |
|
|
(2,891 |
) |
|
|
(9,809 |
) |
|
|
(12,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
471,983 |
|
|
$ |
537,342 |
|
|
$ |
2,100,002 |
|
|
$ |
2,364,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plumbing & Refrigeration Segment |
|
$ |
15,039 |
|
|
$ |
16,859 |
|
|
$ |
90,072 |
|
|
$ |
93,230 |
|
|
OEM Segment |
|
|
10,021 |
|
|
|
17,235 |
|
|
|
72,648 |
|
|
|
85,714 |
|
|
Unallocated expenses |
|
|
(6,097 |
) |
|
|
(4,335 |
) |
|
|
(25,452 |
) |
|
|
(24,948 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
18,963 |
|
|
$ |
29,759 |
|
|
$ |
137,268 |
|
|
$ |
153,996 |
|
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
(In thousands) |
|
December 26, 2015 |
|
|
December 27, 2014 |
|
||
|
ASSETS |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
274,844 |
|
|
$ |
352,134 |
|
|
Accounts receivable, net |
|
|
251,571 |
|
|
|
275,065 |
|
|
Inventories |
|
|
239,378 |
|
|
|
256,585 |
|
|
Other current assets |
|
|
34,608 |
|
|
|
57,429 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
800,401 |
|
|
|
941,213 |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant, and equipment, net |
|
|
280,224 |
|
|
|
245,910 |
|
|
Other assets |
|
|
258,176 |
|
|
|
140,973 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,338,801 |
|
|
$ |
1,328,096 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
|
Current portion of debt |
|
$ |
11,760 |
|
|
$ |
36,194 |
|
|
Accounts payable |
|
|
88,051 |
|
|
|
100,735 |
|
|
Other current liabilities |
|
|
109,618 |
|
|
|
101,140 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
209,429 |
|
|
|
238,069 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
204,250 |
|
|
|
205,250 |
|
|
Pension and postretirement liabilities |
|
|
34,876 |
|
|
|
41,556 |
|
|
Environmental reserves |
|
|
20,943 |
|
|
|
21,842 |
|
|
Deferred income taxes |
|
|
7,161 |
|
|
|
24,556 |
|
|
Other noncurrent liabilities |
|
|
2,440 |
|
|
|
1,389 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
479,099 |
|
|
|
532,662 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Mueller Industries, Inc. stockholders’ equity |
|
|
827,285 |
|
|
|
762,150 |
|
|
Noncontrolling interest |
|
|
32,417 |
|
|
|
33,284 |
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
859,702 |
|
|
|
795,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,338,801 |
|
|
$ |
1,328,096 |
|
|
|
|
|
|
|
|
|
|
|
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
For the Year Ended |
|
|||||
|
(In thousands) |
|
December 26, 2015 |
|
|
December 27, 2014 |
|
||
|
|
|
|
|
|
||||
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
$ |
88,407 |
|
|
$ |
102,534 |
|
|
Reconciliation of consolidated net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
35,040 |
|
|
|
34,076 |
|
|
Stock-based compensation expense |
|
|
6,244 |
|
|
|
6,265 |
|
|
Gain on disposal of assets |
|
|
(14,815 |
) |
|
|
(5,405 |
) |
|
Deferred income taxes |
|
|
(7,209 |
) |
|
|
(6,495 |
) |
|
Income tax benefit from exercise of stock options |
|
|
(972 |
) |
|
|
(837 |
) |
|
Changes in assets and liabilities, net of businesses acquired: |
|
|
|
|
|
|
|
|
|
Receivables |
|
|
51,530 |
|
|
|
(21,932 |
) |
|
Inventories |
|
|
41,086 |
|
|
|
1,381 |
|
|
Other assets |
|
|
12,449 |
|
|
|
(23,652 |
) |
|
Current liabilities |
|
|
(54,194 |
) |
|
|
5,849 |
|
|
Other liabilities |
|
|
436 |
|
|
|
(2,223 |
) |
|
Other, net |
|
|
1,607 |
|
|
|
1,044 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
159,609 |
|
|
|
90,605 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(28,834 |
) |
|
|
(39,173 |
) |
|
Acquisition of business, net of cash acquired |
|
|
(105,944 |
) |
|
|
(30,137 |
) |
|
Proceeds from sale of assets, net of cash transferred |
|
|
5,538 |
|
|
|
33,788 |
|
|
Investment in unconsolidated affiliate |
|
|
(65,900 |
) |
|
|
— |
|
|
Net withdrawals from (deposits) into restricted cash balances |
|
|
4,333 |
|
|
|
(2,902 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(190,807 |
) |
|
|
(38,424 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Dividends paid to stockholders of Mueller Industries, Inc. |
|
|
(16,903 |
) |
|
|
(16,819 |
) |
|
(Repayment) issuance of debt by joint venture, net |
|
|
(23,567 |
) |
|
|
7,258 |
|
|
Net cash used to settle stock-based awards |
|
|
(760 |
) |
|
|
(719 |
) |
|
Repurchase of common stock |
|
|
— |
|
|
|
(58 |
) |
|
Repayments of long-term debt |
|
|
(1,000 |
) |
|
|
(1,050 |
) |
|
Income tax benefit from exercise of stock options |
|
|
972 |
|
|
|
837 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(41,258 |
) |
|
|
(10,551 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
(4,834 |
) |
|
|
(1,296 |
) |
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents |
|
|
(77,290 |
) |
|
|
40,334 |
|
|
Cash and cash equivalents at the beginning of the period |
|
|
352,134 |
|
|
|
311,800 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period |
|
$ |
274,844 |
|
|
$ |
352,134 |
|
|
|
|
|
|
|
|
|
|
|
Released February 2, 2016