Mueller Industries, Inc. Reports First Quarter 2015 Results

MEMPHIS, Tenn., April 21, 2015 -- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the first quarter of 2015 was $22.0 million, or 39 cents per diluted share, compared with net income of $24.7 million, or 44 cents per diluted share, for the same period of 2014.

Net sales for the first quarter of 2015 were $537.2 million compared with $574.4 million for the same quarter of the prior year.  Despite unit volume increase of 3.6 percent over the same period in 2014, net sales decreased due primarily to lower copper costs that impacted the selling prices of the Company’s core products. Copper prices decreased 18 percent from the prior year averaging $2.66 per pound in the first quarter of 2015 compared with $3.24 per pound in the first quarter of 2014.

Financial and Operating Impacts/Highlights:

First quarter of 2014 operating income benefited from $4.5 million of unusual items.  There were no such items in the first quarter of 2015.

 

Our US Copper Tube and Fittings operations as well as our Port Huron Brass Mill were adversely impacted by the severe winter weather that lingered into March.  In addition to lost production days, roughly four days in the Copper operations and two days in the Brass operation, we also incurred higher than normal repair and maintenance costs due to the harsh weather.

 

On March 30, 2015 we acquired the stock of Turbotec Products, Inc., a company that specializes in heat transfer technologies, for $14.2 million.  This acquisition complements our HVACR growth strategy.

 

Ending cash for the period was $327 million or $5.74 per share and our current ratio remained strong at 4.2 to 1.

Regarding the outlook for 2015, Greg Christopher, CEO, said, “As we head into the second quarter, demand remains healthy as the economy continues its upward trend.  We expect to fully catch up production and service in the second quarter for the businesses hindered by the aforementioned weather related challenges.”

Mueller Industries, Inc. is a leading manufacturer of copper tube and fittings; brass and copper alloy rod, bar and shapes; aluminum and brass forgings; aluminum and copper impact extrusions; plastic fittings and valves; refrigeration valves and fittings; and fabricated tubular products.  Mueller’s operations are located throughout the United States and in Canada, Mexico, Great Britain, and China.  Mueller’s business is importantly linked to: (i) the construction of new homes; (ii) the improvement and reconditioning of existing homes and structures; and (iii) the commercial construction market which includes office buildings, factories, hotels, hospitals, etc.

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 “pro forma,” “outlook,” “estimate,” “project,” “intend,” “expect,” “believe,” “target,” 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)

 

March 28, 2015

 

 

March 29, 2014

 

 

 

 

 

 

 

 

Net sales

 

$

537,242

 

 

$

574,374

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

460,834

 

 

 

495,777

 

Depreciation and amortization

 

 

7,853

 

 

 

8,107

 

Selling, general, and administrative expense

 

 

32,831

 

 

 

32,183

 

 

 

 

 

 

 

 

 

 

     Operating income

 

 

35,724

 

 

 

38,307

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,076

)

 

 

(1,026

)

Other income, net

 

 

105

 

 

 

88

 

 

 

 

 

 

 

 

 

 

     Income before income taxes

 

 

33,753

 

 

 

37,369

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(11,413

)

 

 

(12,415

)

 

 

 

 

 

 

 

 

 

     Consolidated net income

 

 

22,340

 

 

 

24,954

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

 

 

(362

)

 

 

(248

)

 

 

 

 

 

 

 

 

 

     Net income attributable to Mueller Industries, Inc.

 

$

21,978

 

 

$

24,706

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

 

56,193

 

 

 

55,918

 

Effect of dilutive stock-based awards

 

 

731

 

 

 

853

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

 

56,924

 

 

 

56,771

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.39

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.39

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.075

 

 

$

0.075

 

 

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

   Plumbing & Refrigeration Segment

 

$

305,017

 

 

$

338,027

 

   OEM Segment

 

 

235,317

 

 

 

240,030

 

   Elimination of intersegment sales

 

 

(3,092

)

 

 

(3,683

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

537,242

 

 

$

574,374

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

   Plumbing & Refrigeration Segment

 

$

19,491

 

 

$

23,885

 

   OEM Segment

 

 

22,548

 

 

 

21,286

 

   Unallocated expenses

 

 

(6,315

)

 

 

(6,864

)

 

 

 

 

 

 

 

 

 

Operating income

 

$

35,724

 

 

$

38,307

 

 

 

 

 

 

 

 

 

 

 

 


 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

(In thousands)

 

March 28, 2015

 

 

December 27, 2014

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

326,894

 

 

$

352,134

 

Accounts receivable, net

 

 

307,984

 

 

 

275,065

 

Inventories

 

 

246,395

 

 

 

256,585

 

Other current assets

 

 

59,858

 

 

 

57,429

 

 

 

 

 

 

 

 

 

 

     Total current assets

 

 

941,131

 

 

 

941,213

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

244,909

 

 

 

245,910

 

Other assets

 

 

138,790

 

 

 

140,973

 

 

 

 

 

 

 

 

 

 

 

 

$

1,324,830

 

 

$

1,328,096

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current portion of debt

 

$

31,676

 

 

$

36,194

 

Accounts payable

 

 

100,813

 

 

 

100,735

 

Other current liabilities

 

 

91,671

 

 

 

101,140

 

 

 

 

 

 

 

 

 

 

     Total current liabilities

 

 

224,160

 

 

 

238,069

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

205,000

 

 

 

205,250

 

Pension and postretirement liabilities

 

 

39,829

 

 

 

41,556

 

Environmental reserves

 

 

21,832

 

 

 

21,842

 

Deferred income taxes

 

 

23,100

 

 

 

24,556

 

Other noncurrent liabilities

 

 

3,107

 

 

 

1,389

 

 

 

 

 

 

 

 

 

 

     Total liabilities

 

 

517,028

 

 

 

532,662

 

 

 

 

 

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

 

774,863

 

 

 

762,150

 

Noncontrolling interest

 

 

32,939

 

 

 

33,284

 

 

 

 

 

 

 

 

 

 

     Total equity

 

 

807,802

 

 

 

795,434

 

 

 

 

 

 

 

 

 

 

 

 

$

1,324,830

 

 

$

1,328,096

 

 

 

 

 

 

 

 

 

 

 

 

 


 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Quarter Ended

 

 (In thousands)

 

March 28, 2015

 

 

March 29, 2014

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Consolidated net income

 

$

22,340

 

 

$

24,954

 

Reconciliation of consolidated net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

     Depreciation and amortization

 

 

8,015

 

 

 

8,165

 

     Stock-based compensation expense

 

 

1,349

 

 

 

1,194

 

     Loss (gain) on disposal of properties

 

 

1

 

 

 

(1,413

)

     Deferred income taxes

 

 

(570

)

 

 

(1,484

)

     Income tax benefit from exercise of stock options

 

 

(69

)

 

 

(156

)

     Changes in assets and liabilities, net of business acquired:

 

 

 

 

 

 

 

 

          Receivables

 

 

(36,692

)

 

 

(49,482

)

          Inventories

 

 

7,534

 

 

 

(10,055

)

          Other assets

 

 

9,257

 

 

 

(14,467

)

          Current liabilities

 

 

(7,389

)

 

 

(1,337

)

          Other liabilities

 

 

(131

)

 

 

(989

)

          Other, net

 

 

245

 

 

 

398

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

 

3,890

 

 

 

(44,672

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Business acquired

 

 

 

 

 

(30,137

)

Capital expenditures

 

 

(7,392

)

 

 

(9,199

)

Net (deposits into) withdrawals from restricted cash balances

 

 

(12,593

)

 

 

1,771

 

Proceeds from sale of assets

 

 

492

 

 

 

4,833

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(19,493

)

 

 

(32,732

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

 

(4,216

)

 

 

(4,196

)

Repayment of debt by joint venture, net

 

 

(3,817

)

 

 

(1,407

)

Repayment of long-term debt

 

 

(250

)

 

 

(250

)

Issuance of debt

 

 

 

 

 

4,373

 

Net cash received to settle stock-based awards

 

 

93

 

 

 

224

 

Income tax benefit from exercise of stock options

 

 

69

 

 

 

156

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(8,121

)

 

 

(1,100

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(1,516

)

 

 

179

 

 

 

 

 

 

 

 

 

 

Decrease in cash and cash equivalents

 

 

(25,240

)

 

 

(78,325

)

Cash and cash equivalents at the beginning of the period

 

 

352,134

 

 

 

311,800

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

$

326,894

 

 

$

233,475