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 |
|
|
|
|
|
|
|
|
|
|
|
Released April 21, 2015