Mueller Industries, Inc. Reports First Quarter 2020 Earnings

COLLIERVILLE, Tenn.--(BUSINESS WIRE)-- Mueller Industries, Inc. (NYSE: MLI) announces first quarter 2020 earnings results. Operating income for the first quarter was $59.3 million versus $49.2 million for the prior year period.

Net income for the first quarter was $32.4 million, or 57 cents per diluted share, on $602.9 million in net sales, versus prior year net income of $15.7 million, or 28 cents per diluted share, on $611.8 million in net sales.

Period Financial and Operating Highlights:

• Average COMEX copper traded 9 percent lower in the first quarter of 2020 versus the prior year period. During the quarter, COMEX copper declined 64 cents per pound, or 22 percent, with 40 cents of that decline occurring in March.
• The 1.4 percent decline in net sales was attributable to the lower copper prices and lower sales volumes in our Industrial Metals segment; partially offset by higher sales volumes in our Piping Systems and Climate segments.
• Unusual impacts during the quarter included the following:
  • A $21.9 million gain from our claim under the Deepwater Horizon Economic and Property Damage Settlement Program;
  • A $3.0 million impairment charge on certain idled manufacturing equipment during the quarter; and
  • Mark-to-market losses on open hedge positions, which reduced earnings $9.6 million.
• We recorded a $6.3 million loss on our investment in Tecumseh Products Company in the quarter, compared to a $14.6 million loss in the prior year period.
• The effective tax rate for the quarter was 26 percent, compared with 23 percent in 2019.
• At quarter-end, cash on hand was $154.3 million. Debt to total capitalization was 42 percent, and the current ratio was 3.4 to 1.

Regarding the state of the Company and outlook, Greg Christopher, Mueller CEO said:

“The COVID-19 pandemic has had widespread effects around the world, and our Company is no exception. Our efforts to mitigate the health and safety risk to our employees and facilities began in February, and we have continually adapted our approach as guided by the public health experts. Amidst this turbulence, 67 of our 68 locations across three continents have remained open to support the critical infrastructure industries we serve, and we have had just one temporary closure due to a confirmed case of COVID-19. Our employees have truly stepped up to the plate by adopting the precautionary measures designed to protect them and their families while our Company does its part during this crisis.

Our primary market, the construction industry, while generally deemed essential, has seen reduced activity due largely to government orders and public health risk mitigation measures. We have, however, seen above normal demand levels in other segments for more niche products used for oxygen service in hospitals, the delivery of medical gases and medical equipment components.

These are tough times, but our balance sheet and liquidity position are solid. We have an established record of prudent financial management, and we began to prepare for a potential correction in the economy during the fourth quarter of 2019. We have further bolstered our position by implementing even more cash conservation measures, including the deferral of non-essential capital expenditures. Our committed credit facility provides for additional liquidity if needed to support our operations and seize potential opportunities, as we are well within our covenants.

2020 was off to a strong start, with softening in demand related to the virus hitting us during the latter half of March. Although the impact on the first quarter was mild, we currently anticipate that April and May could be off 30 percent - 40 percent, with any reversal depending upon the timing and progress of the reopening of the economy. We will continue to adapt as required. As a result, we do not intend to suspend or reduce our second quarter dividend.

Like all others, we look forward to the conclusion of this public health crisis, but in the meantime, are working actively as ever to capitalize on a number of opportunities we see on the horizon.”

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 Collierville, Tennessee and comprises a network of operations in the United States, Canada, Mexico, Great Britain, South Korea, the Middle East, 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. 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200421005131/en/

Jeffrey A. Martin
(901) 753-3226

Source: Mueller Industries, Inc.

Released April 21, 2020