Mueller Industries, Inc. Reports Fiscal 2022 Fourth Quarter and Full Year Results

COLLIERVILLE, Tenn.--(BUSINESS WIRE)-- Mueller Industries, Inc. (NYSE: MLI) today reported 2022 fourth quarter and full year results.

For the Fourth Quarter 2022 versus Fourth Quarter 2021:

Operating income: $190.4 million vs $172.1 million, up 10.6%.
Net sales: $877.6 million vs $956.4 million, down 8.2%.
Net income: $138.9 million vs $125.6 million, up 10.6%.
Diluted EPS: $2.46 vs $2.21, up 11.3%.

For the Full Year 2022 versus the Full Year 2021:

Operating income: $877.1 million vs $655.8 million, up 33.7%.
Net sales: $4.0 billion vs $3.8 billion, up 5.7%.
Net income: $658.3 million vs $468.5 million, up 40.5%.
Diluted EPS: $11.64 vs $8.25, up 41.1%.

Fourth Quarter Financial and Operating Commentary

The average price of copper was $3.66 per pound, a 16.4 percent decline as compared with the fourth quarter of 2021.
Net sales declined $78.8 million, reflecting the impact of lower copper prices as well as an 11 percent reduction in unit volumes across our mill businesses, the largest of which emanated from our international operations. These reductions were offset by a 22 percent increase in net sales from our higher value added businesses, particularly in our climate segment.
The Company recognized a $13.1 million expense related to its complete withdrawal from a multi-employer pension plan, thereby eliminating a significant long term financial risk.
The Company generated $207 million of cash from operations in the fourth quarter, $723.9 million for the year and cash and short-term investments totaled $678.9 million at year end. The Company’s current ratio is 4 to 1.

Operating Highlights and Outlook:

Greg Christopher, CEO, commented, “We concluded 2022 by delivering the best fourth quarter of operating and net income in the Company’s history. Not only have we reinvested to be a low cost producer, but we have also pursued acquisitions that both strengthen our market leading positions in core products and expand our portfolio into higher value added content. In tandem, these strategic actions have improved our gross margins to levels we believe are more appropriate for the industries we serve.

Economic activity as a whole began to temper during the second half of 2022 amidst rising interest rates, inflationary pressures, and global instability. Beyond that, the destocking of inventories and normalization of supply chains exerted downward impacts.

Notwithstanding, we head into 2023 with an optimistic outlook. Although we anticipate some decline in U.S. residential building markets as compared with 2022, we also believe that household formations will remain underserved by the housing supply. As such, demand levels should remain at healthy levels relative to industry capacity. At the same time, we maintain continued backlogs in other critical markets including commercial construction, refrigeration, HVAC and transportation. Internationally, we believe that following a difficult 2022, market conditions may be bottoming out, thereby positioning our businesses for a rebound.

This was another record year of financial performance for our Company, but we still see many opportunities ahead of us. Importantly, our strong performance has enabled us to build a war chest to fund continued investments to improve our low cost position and support our bold plans for growth.”

Mueller Industries, Inc. (NYSE: MLI) is an industrial corporation whose holdings manufacture vital goods for important markets such as air, water, oil and gas distribution; climate comfort; food preservation; energy transmission; medical; aerospace and automotive. It includes a network of companies and brands throughout North America, Europe, Asia, and the Middle East.

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.

MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	For the Quarter Ended						For the Year Ended
(In thousands, except per share data)	December 31, 2022			December 25, 2021			December 31, 2022			December 25, 2021

Net sales	$	877,581		$	956,357		$	3,982,455		$	3,769,345

Cost of goods sold		620,800			726,594			2,864,862			2,938,989
Depreciation and amortization		10,738			11,633			43,731			45,390
Selling, general, and administrative expense		55,630			48,729			203,086			184,052
Gain on sale of businesses		—			(3,001	)		—			(57,760	)
Gain on sale of assets, net		—			—			(6,373	)		—
Impairment charges		—			261			—			2,829

Operating income		190,413			172,141			877,149			655,845

Interest expense		(144	)		(258	)		(810	)		(7,709	)
Environmental expense		349			(982	)		(1,298	)		(5,053	)
Redemption premium		—			—			—			(5,674	)
Pension plan termination expense		(13,100	)		—			(13,100	)		—
Other income, net		8,430			947			14,090			3,730

Income before income taxes		185,948			171,848			876,031			641,139

Income tax expense		(49,798	)		(44,862	)		(223,322	)		(165,858	)
Income (loss) from unconsolidated affiliates, net of foreign tax		4,085			(288	)		10,111			(157	)

Consolidated net income		140,235			126,698			662,820			475,124

Net income attributable to noncontrolling interests		(1,329	)		(1,097	)		(4,504	)		(6,604	)

Net income attributable to Mueller Industries, Inc.	$	138,906		$	125,601		$	658,316		$	468,520

Weighted average shares for basic earnings per share		55,642			56,104			55,779			56,011
Effect of dilutive stock-based awards		717			796			776			787

Adjusted weighted average shares for diluted earnings per share		56,359			56,900			56,555			56,798

Basic earnings per share	$	2.50		$	2.24		$	11.80		$	8.36

Diluted earnings per share	$	2.46		$	2.21		$	11.64		$	8.25

Dividends per share	$	0.25		$	0.13		$	1.00		$	0.52



	For the Quarter Ended						For the Year Ended
(In thousands)	December 31, 2022			December 25, 2021			December 31, 2022			December 25, 2021

Summary Segment Data:

Net sales:
Piping Systems Segment	$	567,039		$	652,466		$	2,730,084		$	2,600,030
Industrial Metals Segment		146,322			176,226			644,689			703,363
Climate Segment		170,551			130,428			650,307			495,414
Elimination of intersegment sales		(6,331	)		(2,763	)		(42,625	)		(29,462	)

Net sales	$	877,581		$	956,357		$	3,982,455		$	3,769,345

Operating income:
Piping Systems Segment	$	131,056		$	142,482		$	671,062		$	486,287
Industrial Metals Segment		22,960			27,077			82,464			85,475
Climate Segment		53,158			21,757			188,067			85,536
Unallocated expenses		(16,761	)		(19,175	)		(64,444	)		(1,453	)

Operating income	$	190,413		$	172,141		$	877,149		$	655,845

MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)	December 31, 2022		December 25 2021
ASSETS
Cash and cash equivalents	$	461,018	$	87,924
Short-term investments		217,863		—
Accounts receivable, net		380,352		471,859
Inventories		448,919		430,244
Other current assets		26,501		28,976

Total current assets		1,534,653		1,019,003

Property, plant, and equipment, net		379,950		385,562
Operating lease right-of-use assets		22,892		23,510
Other assets		304,904		300,861

	$	2,242,399	$	1,728,936

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of debt	$	811	$	811
Accounts payable		128,000		180,793
Current portion of operating lease liabilities		4,942		6,015
Other current liabilities		214,542		194,820

Total current liabilities		348,295		382,439

Long-term debt		1,218		1,064
Pension and postretirement liabilities		13,055		17,533
Environmental reserves		16,380		17,678
Deferred income taxes		16,258		14,347
Noncurrent operating lease liabilities		16,880		17,099
Other noncurrent liabilities		16,349		21,813

Total liabilities		428,435		471,973

Total Mueller Industries, Inc. stockholders’ equity		1,790,914		1,222,118
Noncontrolling interests		23,050		34,845

Total equity		1,813,964		1,256,963

	$	2,242,399	$	1,728,936

MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	For the Year Ended
(In thousands)	December 31, 2022			December 25, 2021

Cash flows from operating activities
Consolidated net income	$	662,820		$	475,124
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization		44,088			45,655
Stock-based compensation expense		17,801			9,822
Provision for doubtful accounts receivable		323			1,216
(Income) loss from unconsolidated affiliates		(10,111	)		157
Gain on sale of businesses		—			(57,760	)
(Gain) loss on disposals of assets		(6,373	)		(769	)
Redemption premium		—			5,674
Insurance proceeds - noncapital related		1,646			—
Impairment charges		—			2,829
Deferred income tax (benefit) expense		(3,880	)		7,413
Changes in assets and liabilities, net of effects of businesses acquired and sold:
Receivables		82,713			(124,708	)
Inventories		(24,189	)		(119,514	)
Other assets		(8,971	)		919
Current liabilities		(26,633	)		73,755
Other liabilities		(7,564	)		(5,467	)
Other, net		2,273			(2,645	)

Net cash provided by operating activities		723,943			311,701

Cash flows from investing activities
Proceeds from sale of assets, net of cash transferred		7,850			2,302
Purchase of short-term investments		(217,863	)		—
Proceeds from sale of business, net of cash sold		—			81,884
Acquisition of businesses, net of cash acquired		—			(30,206	)
Capital expenditures		(37,639	)		(31,833	)
Insurance proceeds - capital related		3,354			—
Dividends from unconsolidated affiliates		2,295			—
Payment received for (issuance of) notes receivable		—			8,539
Investments in unconsolidated affiliates		—			(1,613	)

Net cash (used in) provided by investing activities		(242,003	)		29,073



	For the Year Ended
(In thousands)	December 31, 2022			December 25, 2021

Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.		(55,787	)		(29,137	)
Dividends paid to noncontrolling interests		(7,248	)		(9,722	)
Issuance of long-term debt		—			595,000
Repayments of long-term debt		(204	)		(920,610	)
Issuance (repayment) of debt by consolidated joint ventures, net		67			(5,113	)
Repurchase of common stock		(38,054	)		(4,864	)
Payment of contingent consideration		—			(1,250	)
Net cash (used) received to settle stock-based awards		(1,429	)		85
Debt issuance costs		—			(1,111	)

Net cash used in financing activities		(102,655	)		(376,722	)

Effect of exchange rate changes on cash		(4,365	)		(1,052	)

Increase (decrease) in cash, cash equivalents, and restricted cash		374,920			(37,000	)
Cash, cash equivalents, and restricted cash at the beginning of the year		90,376			127,376

Cash, cash equivalents, and restricted cash at the end of the year	$	465,296		$	90,376

View source version on businesswire.com: https://www.businesswire.com/news/home/20230207005332/en/

Jeffrey A. Martin
(901) 753-3226

Source: Mueller Industries, Inc.

Released February 7, 2023

Mueller Industries, Inc. Reports Fiscal 2022 Fourth Quarter and Full Year Results

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