Mueller Industries, Inc. Reports Second Quarter 2018 Earnings
MEMPHIS, Tenn.--(BUSINESS WIRE)-- Mueller Industries, Inc. (NYSE: MLI) announced today second quarter operating income of $51.9 million, compared with $46.7 million in the same quarter of 2017, an increase of 11 percent.
Net income for the period was $33.2 million, or 58 cents per diluted share, on $662.8 million in net sales, compared with net income of $27.6 million, or 48 cents per diluted share, on $614.3 million in net sales for the same quarter of 2017.
Financial and Operating Highlights for the second quarter of 2018:
- The average price of COMEX copper was 51 cents per pound higher compared with the same period of 2017.
- Net sales were impacted by higher selling prices resulting from these higher copper prices, and were partially offset by the absence of $41.3 million of net sales recorded in the second quarter of 2017 by MXR, a business the Company exited in June 2017.
- During the quarter, the Company generated $62.7 million in cash from operations.
Regarding the outlook, Greg Christopher, Mueller CEO said, “Our outlook remains positive as economic conditions remain supportive of our businesses. As performance gradually improves in our Fulton and Cedar City copper tube mills, we continue to recover volume and share of market lost during our modernization efforts.”
In addition, Mr. Christopher commented, “We are excited about our most recent acquisition, ATCO Flex. ATCO is an excellent addition to our Climate Products portfolio, and will contribute to our goal of becoming a more valuable resource to our HVAC and refrigeration customer base. Customer support of the acquisition has been extremely favorable.”
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 Memphis, 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.
| MUELLER INDUSTRIES, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| For the Quarter Ended | For the Six Months Ended | |||||||||||||||
| (In thousands, except per share data) | June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | ||||||||||||
| Net sales | $ | 662,773 | $ | 614,266 | $ | 1,302,833 | $ | 1,192,186 | ||||||||
| Cost of goods sold | 563,820 | 524,311 | 1,109,490 | 1,012,738 | ||||||||||||
| Depreciation and amortization | 9,006 | 8,595 | 18,462 | 16,950 | ||||||||||||
| Selling, general, and administrative expense | 38,428 | 36,299 | 72,485 | 71,873 | ||||||||||||
| (Gain) loss on sale of assets | (409 | ) | (1,631 | ) | 3,060 | (1,631 | ) | |||||||||
| Operating income | 51,928 | 46,692 | 99,336 | 92,256 | ||||||||||||
| Interest expense | (6,073 | ) | (6,442 | ) | (11,982 | ) | (8,973 | ) | ||||||||
| Other income, net | 586 | 342 | 1,146 | 936 | ||||||||||||
| Income before income taxes | 46,441 | 40,592 | 88,500 | 84,219 | ||||||||||||
| Income tax expense | (12,411 | ) | (12,650 | ) | (19,806 | ) | (24,579 | ) | ||||||||
| Loss from unconsolidated affiliates, net of foreign tax | (148 | ) | (109 | ) | (10,468 | ) | (1,352 | ) | ||||||||
| Consolidated net income | 33,882 | 27,833 | 58,226 | 58,288 | ||||||||||||
| Net income attributable to noncontrolling interests | (700 | ) | (200 | ) | (916 | ) | (668 | ) | ||||||||
| Net income attributable to Mueller Industries, Inc. | $ | 33,182 | $ | 27,633 | $ | 57,310 | $ | 57,620 | ||||||||
| Weighted average shares for basic earnings per share | 56,797 | 56,906 | 56,848 | 56,843 | ||||||||||||
| Effect of dilutive stock-based awards | 514 | 511 | 516 | 585 | ||||||||||||
| Adjusted weighted average shares for diluted earnings per share | 57,311 | 57,417 | 57,364 | 57,428 | ||||||||||||
| Basic earnings per share | $ | 0.58 | $ | 0.49 | $ | 1.01 | $ | 1.01 | ||||||||
| Diluted earnings per share | $ | 0.58 | $ | 0.48 | $ | 1.00 | $ | 1.00 | ||||||||
| Dividends per share | $ | 0.100 | $ | 0.100 | $ | 0.200 | $ | 8.200 | ||||||||
| Summary Segment Data: | ||||||||||||||||
| Net sales: | ||||||||||||||||
| Piping Systems Segment | $ | 453,183 | $ | 422,844 | $ | 884,147 | $ | 821,619 | ||||||||
| Industrial Metals Segment | 175,891 | 154,504 | 353,223 | 304,341 | ||||||||||||
| Climate Segment | 39,172 | 36,636 | 75,235 | 70,915 | ||||||||||||
| Elimination of intersegment sales | (5,473 | ) | 282 | (9,772 | ) | (4,689 | ) | |||||||||
| Net sales | $ | 662,773 | $ | 614,266 | $ | 1,302,833 | $ | 1,192,186 | ||||||||
| Operating income: | ||||||||||||||||
| Piping Systems Segment | $ | 42,019 | $ | 34,792 | $ | 74,968 | $ | 65,382 | ||||||||
| Industrial Metals Segment | 16,093 | 16,389 | 38,726 | 36,736 | ||||||||||||
| Climate Segment | 5,347 | 6,116 | 10,894 | 11,726 | ||||||||||||
| Unallocated expenses | (11,531 | ) | (10,605 | ) | (25,252 | ) | (21,588 | ) | ||||||||
| Operating income | $ | 51,928 | $ | 46,692 | $ | 99,336 | $ | 92,256 | ||||||||
| MUELLER INDUSTRIES, INC. | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| (In thousands) |
June 30, 2018 |
December 30, |
||||
| ASSETS | ||||||
| Cash and cash equivalents | $ | 281,445 | $ | 120,269 | ||
| Accounts receivable, net | 333,903 | 244,795 | ||||
| Inventories | 294,540 | 327,901 | ||||
| Other current assets | 27,625 | 46,150 | ||||
| Total current assets | 937,513 | 739,115 | ||||
| Property, plant, and equipment, net | 284,836 | 304,321 | ||||
| Other assets | 274,035 | 276,737 | ||||
| $ | 1,496,384 | $ | 1,320,173 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current portion of debt | $ | 59,952 | $ | 16,480 | ||
| Accounts payable | 112,090 | 102,503 | ||||
| Other current liabilities | 101,432 | 123,269 | ||||
| Total current liabilities | 273,474 | 242,252 | ||||
| Long-term debt | 558,534 | 448,592 | ||||
| Pension and postretirement liabilities | 26,999 | 28,713 | ||||
| Environmental reserves | 22,984 | 23,699 | ||||
| Deferred income taxes | 19,650 | 19,403 | ||||
| Other noncurrent liabilities | 22,654 | 21,486 | ||||
| Total liabilities | 924,295 | 784,145 | ||||
| Total Mueller Industries, Inc. stockholders’ equity | 557,701 | 522,111 | ||||
| Noncontrolling interests | 14,388 | 13,917 | ||||
| Total equity | 572,089 | 536,028 | ||||
| $ | 1,496,384 | $ | 1,320,173 | |||
| MUELLER INDUSTRIES, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| For the Six Months Ended | ||||||||
| (In thousands) | June 30, 2018 | July 1, 2017 | ||||||
| Cash flows from operating activities | ||||||||
| Consolidated net income | $ | 58,226 | $ | 58,288 | ||||
| Reconciliation of consolidated net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 18,622 | 17,093 | ||||||
| Stock-based compensation expense | 3,906 | 3,692 | ||||||
| Loss from unconsolidated affiliates | 10,468 | 1,352 | ||||||
| Gain on sale of business | — | (1,631 | ) | |||||
| Loss on disposals of properties | 2,646 | 81 | ||||||
| Gain on sales of securities | — | (611 | ) | |||||
| Impairment charge | — | 411 | ||||||
| Deferred income taxes | (1,260 | ) | 3 | |||||
| Changes in assets and liabilities: | ||||||||
| Receivables | (90,345 | ) | (47,108 | ) | ||||
| Inventories | 33,357 | (10,874 | ) | |||||
| Other assets | 12,405 | (4,723 | ) | |||||
| Current liabilities | (11,566 | ) | (1,262 | ) | ||||
| Other liabilities | (1,361 | ) | (1,086 | ) | ||||
| Other, net | 1,121 | (1,078 | ) | |||||
| Net cash provided by operating activities | 36,219 | 12,547 | ||||||
| Cash flows from investing activities | ||||||||
| Capital expenditures | (10,882 | ) | (11,908 | ) | ||||
| Acquisition of businesses, net of cash acquired | (12,467 | ) | (18,419 | ) | ||||
| Proceeds from sale of business, net of cash sold | — | 17,483 | ||||||
| Investment in unconsolidated affiliates | (609 | ) | (1,617 | ) | ||||
| Proceeds from sales of properties | 11,376 | 1,363 | ||||||
| Proceeds from sales of securities | — | 1,787 | ||||||
| Net cash used in investing activities | (12,582 | ) | (11,311 | ) | ||||
| Cash flows from financing activities | ||||||||
| Dividends paid to stockholders of Mueller Industries, Inc. | (11,360 | ) | (185,539 | ) | ||||
| Repurchase of common stock | (6,575 | ) | — | |||||
| Issuance of long-term debt | 193,247 | — | ||||||
| Repayments of long-term debt | (37,107 | ) | (611 | ) | ||||
| Repayment of debt by consolidated joint ventures, net | (3,100 | ) | (3,320 | ) | ||||
| Net cash received (used) to settle stock-based awards | 103 | (785 | ) | |||||
| Dividends paid to noncontrolling interests | (592 | ) | (2,909 | ) | ||||
| Net cash provided by (used in) financing activities | 134,616 | (193,164 | ) | |||||
| Effect of exchange rate changes on cash | (368 | ) | 3,516 | |||||
| Increase (decrease) in cash, cash equivalents, and restricted cash | 157,885 | (188,412 | ) | |||||
| Cash, cash equivalents, and restricted cash at the beginning of the period | 126,563 | 360,469 | ||||||
| Cash, cash equivalents, and restricted cash at the end of the period | $ | 284,448 | $ | 172,057 | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180724005097/en/
Mueller Industries, Inc.
Jeffrey A. Martin, 901-753-3226
Source: Mueller Industries, Inc.
Released July 24, 2018