Mueller Industries, Inc. Reports Second Quarter 2022 Earnings

COLLIERVILLE, Tenn., July 19, 2022 -- Mueller Industries, Inc. (NYSE: MLI) announces results for the second quarter of 2022. (All comparisons are to the prior year quarter.)

•Operating Income of $268.9 million versus $157.8 million

•Net Income of $206.6 million versus $108.8 million

•EPS of $3.65 versus $1.92

•Net Sales of $1.15 billion versus $1.01 billion

Second Quarter Financial and Operating Highlights:

•The 13.6 percent increase in net sales was driven by strong growth in our value added businesses, combined with higher selling prices across all businesses.

◦COMEX copper averaged $4.34 per pound during the quarter, two percent lower than the second quarter of 2021.

◦Our Industrials Metals group volume, measured in pounds, declined 4 percent, largely attributable to customer inventory re-balancing as lead times improved.

◦Our U.S. copper tube volume was up slightly and remains solid; however, influenced largely by economic softening outside of the U.S., our international tube sales declined 17 percent, against a very strong second quarter in 2021.

◦Our value added businesses grew 33 percent.

◦Divestitures in 2021 reduced net sales by $31 million as compared with the prior year quarter.

•Cash at quarter end was $202.5 million, up 114.6 million year to date.

◦Cash generated from operations was $142 million.

◦Net debt was zero.

◦The current ratio at quarter end was 3.2 to 1.

Regarding the quarter performance and outlook, Greg Christopher, Mueller’s CEO said, “At the mid-way point in the year, our businesses continue to deliver excellent results. The second quarter was our twelfth consecutive quarter in which operating income grew over the prior year period. Rising interest rates, inflationary pressures and continued geopolitical disruptions will create short term challenges, but notwithstanding, we believe that Mueller is well positioned for continued long term growth.

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“The majority of our businesses remain at capacity along with healthy backlogs. We anticipate that some tempering in our primary market segment, building construction, will occur, but that underlying demand will nevertheless remain at levels we consider very healthy for our businesses.

“Our cash generation is strong, and we have zero net debt along with a committed, untapped credit facility. Reinvestment in our businesses to be the lowest cost producer remains a top priority, and we are well equipped to take advantage of strategic acquisition opportunities as they arise.”

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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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 25, 2022						June 26, 2021						June 25, 2022						June 26, 2021
Net sales						$	1,150,042					$	1,012,592					$	2,160,044					$	1,830,740
Cost of goods sold						820,914						799,712						1,565,425						1,468,130
Depreciation and amortization						11,302						11,134						22,143						22,889
Selling, general, and administrative expense						48,956						43,932						96,412						89,367
Gain on sale of assets						—						—						(5,507)						—
Operating income						268,870						157,814						481,571						250,354
Interest expense						(147)						(1,866)						(305)						(6,335)
Redemption premium						—						(5,674)						—						(5,674)
Other income, net						2,203						683						2,983						1,260
Income before income taxes						270,926						150,957						484,249						239,605
Income tax expense						(68,290)						(39,006)						(122,489)						(60,767)
Income (loss) from unconsolidated affiliates, net of foreign tax						4,888						(1,019)						5,012						(2,668)
Consolidated net income						207,524						110,932						366,772						176,170
Net income attributable to noncontrolling interests						(972)						(2,100)						(1,904)						(4,231)
Net income attributable to Mueller Industries, Inc.						$	206,552					$	108,832					$	364,868					$	171,939
Weighted average shares for basic earnings per share						55,787						55,946						55,943						55,931
Effect of dilutive stock-based awards						741						866						776						811
Adjusted weighted average shares for diluted earnings per share						56,528						56,812						56,719						56,742
Basic earnings per share						$	3.70					$	1.95					$	6.52					$	3.07
Diluted earnings per share						$	3.65					$	1.92					$	6.43					$	3.03
Dividends per share						$	0.25					$	0.13					$	0.50					$	0.26

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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME, CONTINUED
(Unaudited)
						For the Quarter Ended												For the Six Months Ended
(In thousands)						June 25, 2022						June 26, 2021						June 25, 2022						June 26, 2021
Summary Segment Data:
Net sales:
Piping Systems Segment						$	824,807					$	711,616					$	1,528,237					$	1,259,364
Industrial Metals Segment						179,175						180,040						353,487						344,892
Climate Segment						164,484						131,708						305,106						242,734
Elimination of intersegment sales						(18,424)						(10,772)						(26,786)						(16,250)
Net sales						$	1,150,042					$	1,012,592					$	2,160,044					$	1,830,740
Operating income:
Piping Systems Segment						$	211,579					$	124,508					$	372,067					$	191,606
Industrial Metals Segment						24,168						20,499						47,427						39,346
Climate Segment						50,747						25,372						87,447						42,707
Unallocated income (expenses)						(17,624)						(12,565)						(25,370)						(23,305)
Operating income						$	268,870					$	157,814					$	481,571					$	250,354

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

						(Unaudited)
(In thousands)						June 25, 2022						December 25, 2021
ASSETS
Cash and cash equivalents						$	202,501					$	87,924
Accounts receivable, net						611,578						471,859
Inventories						475,951						430,244
Other current assets						45,726						28,976
Total current assets						1,335,756						1,019,003
Property, plant, and equipment, net						388,139						385,562
Operating lease right-of-use assets						22,870						23,510
Other assets						300,207						300,861
Total assets						$	2,046,972					$	1,728,936
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of debt						$	1,112					$	811
Accounts payable						208,869						180,793
Current portion of operating lease liabilities						5,725						6,015
Other current liabilities						203,065						194,820
Total current liabilities						418,771						382,439
Long-term debt						1,131						1,064
Pension and postretirement liabilities						16,608						17,533
Environmental reserves						16,300						17,678
Deferred income taxes						11,712						14,347
Noncurrent operating lease liabilities						15,899						17,099
Other noncurrent liabilities						20,928						21,813
Total liabilities						501,349						471,973
Total Mueller Industries, Inc. stockholders’ equity						1,510,463						1,222,118
Noncontrolling interests						35,160						34,845
Total equity						1,545,623						1,256,963
Total liabilities and equity						$	2,046,972					$	1,728,936

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

						For the Six Months Ended
(In thousands)						June 25, 2022						June 26, 2021
Cash flows from operating activities
Consolidated net income						$	366,772					$	176,170
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization						22,322						22,975
Stock-based compensation expense						5,171						4,817
Provision for doubtful accounts receivable						151						1,280
(Income) loss from unconsolidated affiliates						(5,012)						2,668
Redemption premium						—						5,674
Gain on disposals of properties						(6,800)						(819)
Deferred income tax (benefit) expense						(373)						3,252
Changes in assets and liabilities, net of effects of businesses acquired and sold:
Receivables						(146,438)						(190,944)
Inventories						(49,354)						(63,949)
Other assets						(6,095)						(5,482)
Current liabilities						28,906						50,456
Other liabilities						(4,283)						3,429
Other, net						(433)						(247)
Net cash provided by operating activities						204,534						9,280
Cash flows from investing activities
Capital expenditures						(23,248)						(17,978)
Acquisition of businesses, net of cash acquired						—						(13,935)
Payment received for (issuance of) notes receivable						—						8,539
Proceeds from sales of properties						7,561						1,730
Dividends from unconsolidated affiliates						1,609						—
Net cash used in investing activities						(14,078)						(21,644)
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.						(27,968)						(14,546)
Repurchase of common stock						(33,469)						—
Issuance of debt						—						425,000
Repayments of debt						(111)						(400,497)
Issuance of debt by consolidated joint ventures, net						360						463
Net cash (used) received to settle stock-based awards						(95)						414
Debt issuance costs						—						(1,111)
Net cash (used in) provided by financing activities						(61,283)						9,723
Effect of exchange rate changes on cash						(2,234)						987
Increase (decrease) in cash, cash equivalents, and restricted cash						126,939						(1,654)
Cash, cash equivalents, and restricted cash at the beginning of the period						90,376						127,376
Cash, cash equivalents, and restricted cash at the end of the period						$	217,315					$	125,722

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