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Mueller Industries, Inc. Reports Second Quarter 2018 Earnings

MEMPHIS, Tenn., July 24, 2018 -- 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.”















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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.

CONTACT
Jeffrey A. Martin
(901) 753-3226


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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


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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(In thousands)
June 30,
2018
 
December 30, 2017
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













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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



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