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Mueller Industries, Inc. Reports Fiscal 2020 Fourth Quarter and Full Year Results

COLLIERVILLE, Tenn., February 2, 2021 -- Mueller Industries, Inc. (NYSE: MLI) today reported 2020 fourth quarter and full year results.

Fourth Quarter:
Operating income of $65.0 million versus $44.4 million
Net sales of $675.9 million versus $543.8 million
Net income of $36.4 million versus $28.2 million
EPS of $0.64 versus $0.50

Full Year:
Operating income of $245.8 million versus $191.4 million
Adjusted operating income of $227.5 million versus $191.4 million (adjustments include $3.8 million for asset impairments and a $22.1 million gain for the Deepwater Horizon settlement)
Net sales of $2.4 billion versus $2.4 billion
Net income of $139.5 million versus $101.0 million
EPS of $2.47 versus $1.79
*Comparisons to prior year periods

Quarter Commentary
The average price of copper was 21.9 percent higher during the quarter compared with the prior year quarter.
Net sales growth of $132.0 million was largely influenced by the higher copper prices ($61.8 million), with the balance attributable to recently acquired businesses and higher unit sales volumes.
The Company recognized a $17.8 million expense to terminate its U.S. defined benefit pension plan, which consisted of an $11.6 million non-cash charge and $6.2 million in federal excise tax on surplus assets returned to the Company.
The Company recorded income of $10.0 million on its investment in Tecumseh in the quarter, including a pre-tax gain of $11.6 million from a land sale and $1.1 million of expense related to Tecumseh’s ongoing restructuring activities.
The effective tax rate of 31.8 percent reflects the accounting for several discrete items in the quarter. The effective tax rate of 19.8 percent for the prior year quarter reflects a favorable impact from the recognition of foreign net operating losses.
Cash generated from operations was $48.2 million.

Full Year Commentary
The average price of copper was 2.8 percent higher than in 2019. COMEX copper hit a low of $2.12 per pound in March and a high of $3.63 per pound in December.
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Net sales were flat as compared to the prior year, with volume from acquisitions offsetting declines stemming from the COVID-19 pandemic.
Our Tecumseh investment showed improvement in 2020 reflecting early impacts of the ongoing restructuring.
Our operating cash flow exceeded $245.1 million. The Company’s liquidity position remained strong, with cash and cash equivalents of $119.1 million, total debt of $327.9 million and approximately $300.0 million currently available under the Company’s existing credit facility. Total debt to total capitalization was a modest 29.0 percent.
The 2020 effective tax rate was 26.4 percent compared with 21.2 percent in 2019.

Operating Highlights and Outlook:
Greg Christopher, CEO, commented, “Mueller delivered a solid fourth quarter and anticipates a continuation of this positive trend into 2021. This was our third consecutive year of double digit earnings growth. Our teams managed the challenges presented by the COVID-19 pandemic, and we expect to reap ongoing benefits from our more efficient and controlled operating environment.
Although pandemic related public health regulations are likely to remain in place, we are hopeful that the limitations such measures may exert on demand will subside as we approach the second half of the year. On January 29, 2021, we closed on our previously announced acquisition of the Hart & Cooley Flexible Duct business, which expands our presence in the air quality and climate control systems markets.
Our diversified portfolio of businesses is well balanced and capitalized, and we are optimistic that 2021 will bring continued strong cash generation. We believe we are well positioned for the reopening of global economies.”


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.

















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NON-GAAP MEASURES
This press release contains a reference to a non-GAAP measure (adjusted operating income). We believe this financial measure, which is used by management to monitor and evaluate performance, allows investors to better evaluate changes in operating income on a comparable basis from period to period.

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 EndedFor the Year Ended
(In thousands, except per share data)December 26, 2020December 28, 2019December 26, 2020December 28, 2019
Net sales$675,851 $543,839 $2,398,043 $2,430,616 
Cost of goods sold553,507449,4811,966,1612,035,610
Depreciation and amortization11,95510,83744,84342,693
Selling, general, and administrative expense44,64939,072159,483160,910
Litigation settlement. net— — (22,053)— 
Impairment charges736 — 3,771 — 
Operating income65,00444,449245,838191,403
Interest expense(4,010)(5,548)(19,247)(25,683)
Environmental expense(3,488)(440)(4,454)(1,321)
Pension plan termination costs(17,835)— (17,835)— 
Other income, net287 (20)4,887 1,684 
Income before income taxes39,95838,441 209,189166,083 
Income tax expense(12,698)(7,614)(55,321)(35,257)
Income (loss) from unconsolidated affiliates, net of foreign tax9,994 (854)(10,219)(24,594)
Consolidated net income37,254 29,973 143,649 106,232 
Net income attributable to noncontrolling interests(834)(1,803)(4,156)(5,260)
Net income attributable to Mueller Industries, Inc.$36,420 $28,170 $139,493 $100,972 
Weighted average shares for basic earnings per share55,86955,86955,82155,798
Effect of dilutive stock-based awards673611569545
Adjusted weighted average shares for diluted earnings per share56,54256,48056,39056,343
Basic earnings per share$0.65 $0.50 $2.50 $1.81 
Diluted earnings per share$0.64 $0.50 $2.47 $1.79 
Dividends per share$0.10 $0.10 $0.40 $0.40 
Summary Segment Data:
Net sales:
    Piping Systems Segment$454,535 $349,182 $1,583,002 $1,542,456 
    Industrial Metals Segment133,507120,336472,159554,372
    Climate Segment93,14879,362370,131356,216
    Elimination of intersegment sales(5,339)(5,041)(27,249)(22,428)
Net sales
$675,851 $543,839 $2,398,043 $2,430,616 
Operating income:
    Piping Systems Segment$43,106 $31,724 $165,719 $131,879 
    Industrial Metals Segment15,66215,02654,06561,724
    Climate Segment13,2799,34356,80242,727
    Unallocated expenses(7,043)(11,644)(30,748)(44,927)
Operating income$65,004 $44,449 $245,838 $191,403 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(In thousands)
December 26, 2020December 28, 2019
ASSETS
Cash and cash equivalents$119,075 $97,944 
Accounts receivable, net
357,532269,943
Inventories315,002292,107
Other current assets
33,75233,778
    Total current assets825,361693,772
Property, plant, and equipment, net376,572363,128
Operating lease right-of-use assets
29,30126,922 
Other assets
297,334287,118
$1,528,568 $1,370,940 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of debt$41,283 $7,530 
Accounts payable147,74185,644
Current portion of operating lease liabilities
6,2595,250 
Other current liabilities
144,360135,863
    Total current liabilities339,643234,287
Long-term debt286,593378,724
Pension and postretirement liabilities26,84122,208
Environmental reserves21,25619,972
Deferred income taxes16,84221,094
Noncurrent operating lease liabilities
21,60222,388 
Other noncurrent liabilities
14,73110,131
    Total liabilities
727,508708,804
Total Mueller Industries, Inc. stockholders’ equity776,745 643,468
Noncontrolling interests
24,315 18,668
    Total equity
801,060 662,136
$1,528,568 $1,370,940 








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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Year Ended
 (In thousands)
December 26, 2020December 28, 2019
Cash flows from operating activities
Consolidated net income$143,649 $106,232 
Reconciliation of consolidated net income to net cash provided by operating activities:  
Depreciation and amortization45,162 43,011 
Stock-based compensation expense8,570 8,744 
Provision for doubtful accounts receivable1,208 (80)
Loss from unconsolidated affiliates10,219 24,594 
Non-cash pension plan termination charge11,642 — 
Loss (gain) on disposals of assets132 (963)
Change in the fair value of contingent consideration— 3,625 
Impairment charges3,771 — 
Deferred income tax benefit(4,046)(428)
Changes in assets and liabilities, net of effects of businesses acquired:
Receivables(76,404)6,585 
Inventories5,207 39,561 
Other assets20,609 (15,639)
Current liabilities74,097 (7,076)
Other liabilities(1,142)(7,944)
Other, net2,399 322 
Net cash provided by operating activities245,073 200,544 
Cash flows from investing activities
Proceeds from sale of assets, net of cash transferred181 3,240 
Acquisition of businesses, net of cash acquired(72,648)3,465 
Capital expenditures(43,885)(31,162)
Issuance of notes receivable(9,270)— 
Investments in unconsolidated affiliates— (16,000)
Net cash used in investing activities(125,622)(40,457)
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.(22,341)(22,325)
Dividends paid to noncontrolling interests— (846)
Issuance of long-term debt190,038 100,658 
Repayments of long-term debt(246,898)(206,718)
Repayment of debt by consolidated joint ventures, net(259)(4,305)
Repurchase of common stock(5,574)(1,763)
Payment of contingent consideration(7,000)(3,170)
Net cash used to settle stock-based awards(230)(1,225)
Net cash used in financing activities(92,264)(139,694)
Effect of exchange rate changes on cash2,147 511 
Increase in cash, cash equivalents, and restricted cash29,334 20,904 
Cash, cash equivalents, and restricted cash at the beginning of the year98,042 77,138 
Cash, cash equivalents, and restricted cash at the end of the year$127,376 $98,042 
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