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Mueller Industries, Inc. Reports First Quarter 2021 Earnings

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·6 min read
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Mueller Industries, Inc. (NYSE: MLI) announces 2021 first quarter results. (All comparisons are to the prior year quarter.)

  • Operating income of $92.5 million versus $59.3 million

  • Net income of $63.1 million versus $32.4 million

  • Net sales of $818.1 million versus $602.9 million

  • EPS of $1.11 versus $0.57 per share

Financial and Operating Highlights:

  • Average COMEX copper for the first quarter was $3.86 per pound, a 50 percent increase over the first quarter of last year.

  • The increase in net sales was attributable to unit sales growth across most of our businesses, recent acquisitions and the influence of the higher copper prices. The price of copper is largely passed through and as such, impacts selling prices in many of our businesses.

  • Selling, general, and administrative expense was $45.4 million for the quarter, which included $2.7 million of incremental expense from recently acquired businesses, compared to $42.8 million in the prior year quarter.

  • We recorded a $1.6 million loss on our investment in Tecumseh Products Company for the quarter, compared to a $6.3 million loss recorded during the prior year period.

  • During the quarter, we closed on our previously announced acquisition of the Hart & Cooley Flexible Duct business.

  • At quarter-end, cash on hand was $129.9 million, our debt to total capitalization was 31 percent, and the current ratio was 2.2 to 1.

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

"Our performance in the first quarter falls in line with our 2020 year-end expectations. Most economies in which we operate continue to improve, as restrictions imposed in response to the pandemic are being lifted. The increased availability of vaccines, the significant flow of money into global economies, and the potential of a U.S. infrastructure bill, strengthen this positive outlook."

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.

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

(In thousands, except per share data)

March 27,
2021

March 28,
2020

Net sales

$

818,148

$

602,919

Cost of goods sold

668,418

508,715

Depreciation and amortization

11,755

11,039

Selling, general, and administrative expense

45,435

42,752

Asset impairments

3,035

Litigation settlement, net

(21,933)

Operating income

92,540

59,311

Interest expense

(4,469)

(5,379)

Other income, net

577

278

Income before income taxes

88,648

54,210

Income tax expense

(21,761)

(14,144)

Loss from unconsolidated affiliates, net of foreign tax

(1,649)

(6,115)

Consolidated net income

65,238

33,951

Net income attributable to noncontrolling interests

(2,131)

(1,536)

Net income attributable to Mueller Industries, Inc.

$

63,107

$

32,415

Weighted average shares for basic earnings per share

55,916

55,875

Effect of dilutive stock-based awards

756

583

Adjusted weighted average shares for diluted earnings per share

56,672

56,458

Basic earnings per share

$

1.13

$

0.58

Diluted earnings per share

$

1.11

$

0.57

Dividends per share

$

0.13

$

0.10

Summary Segment Data:

Net sales:

Piping Systems Segment

$

547,748

$

385,013

Industrial Metals Segment

164,852

131,202

Climate Segment

111,026

93,272

Elimination of intersegment sales

(5,478)

(6,568)

Net sales

$

818,148

$

602,919

Operating income:

Piping Systems Segment

$

67,098

$

36,676

Industrial Metals Segment

18,847

11,182

Climate Segment

17,335

13,014

Unallocated expenses

(10,740)

(1,561)

Operating income

$

92,540

$

59,311

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

March 27,
2021

December 26,
2020

ASSETS

Cash and cash equivalents

$

129,876

$

119,075

Accounts receivable, net

447,492

357,532

Inventories

365,457

315,002

Other current assets

43,710

33,752

Total current assets

986,535

825,361

Property, plant, and equipment, net

384,853

376,572

Operating lease right-of-use assets

28,494

29,301

Other assets

298,447

297,334

Total assets

$

1,698,329

$

1,528,568

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current portion of debt

$

106,164

$

41,283

Accounts payable

177,174

147,741

Current portion of operating lease liabilities

6,567

6,259

Other current liabilities

154,583

144,360

Total current liabilities

444,488

339,643

Long-term debt

286,576

286,593

Pension and postretirement liabilities

25,468

26,841

Environmental reserves

21,322

21,256

Deferred income taxes

17,127

16,842

Noncurrent operating lease liabilities

20,832

21,602

Other noncurrent liabilities

14,503

14,731

Total liabilities

830,316

727,508

Total Mueller Industries, Inc. stockholders’ equity

841,146

776,745

Noncontrolling interests

26,867

24,315

Total equity

868,013

801,060

Total liabilities and equity

$

1,698,329

$

1,528,568

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Quarter Ended

(In thousands)

March 27,
2021

March 28,
2020

Cash flows from operating activities

Consolidated net income

$

65,238

$

33,951

Reconciliation of consolidated net income to net cash (used in) provided by operating activities:

Depreciation and amortization

11,775

11,119

Stock-based compensation expense

2,109

1,985

Provision for doubtful accounts receivable

1,631

1,100

Loss from unconsolidated affiliates

1,649

6,115

(Gain) loss on disposals of properties

(936)

32

Impairment charges

3,035

Deferred income tax expense

142

213

Changes in assets and liabilities, net of effects of businesses acquired:

Receivables

(89,972)

(46,291)

Inventories

(45,590)

17,450

Other assets

1,230

8,010

Current liabilities

33,941

(10,821)

Other liabilities

(3,703)

(1,643)

Other, net

(95)

3,796

Net cash (used in) provided by operating activities

(22,581)

28,051

Cash flows from investing activities

Capital expenditures

(9,227)

(17,094)

Acquisition of businesses, net of cash acquired

(14,029)

(15,407)

Proceeds from sales of properties

1,730

Net cash used in investing activities

(21,526)

(32,501)

Cash flows from financing activities

Repurchase of common stock

(5,574)

Issuance of debt

100,000

110,000

Repayments of debt

(35,288)

(20,572)

Issuance of debt by consolidated joint ventures, net

45

189

Net cash received to settle stock-based awards

221

464

Net cash provided by financing activities

64,978

84,507

Effect of exchange rate changes on cash

784

(6,135)

Increase in cash, cash equivalents, and restricted cash

21,655

73,922

Cash, cash equivalents, and restricted cash at the beginning of the period

127,376

98,042

Cash, cash equivalents, and restricted cash at the end of the period

$

149,031

$

171,964

View source version on businesswire.com: https://www.businesswire.com/news/home/20210420005226/en/

Contacts

Jeffrey A. Martin
(901) 753-3226