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Mueller Industries, Inc. Reports Third Quarter 2021 Earnings

Mueller Industries, Inc. (NYSE: MLI) announces results for the third quarter of 2021. (All comparisons are to the prior year quarter.)

  • $233.4 million in operating income versus $69.2 million
  • $171.0 million in net income versus $42.7 million
  • $982.2 million in net sales versus $619.1 million
  • EPS of $3.01 versus $0.76 per share

Third Quarter Financial and Operating Highlights:

  • COMEX copper averaged $4.30 per pound versus $2.93 per pound in the third quarter of last year, a 47% increase.
  • Unit sales growth across all segments, the influence of the higher copper prices and contributions from the first quarter acquisition of the Hart & Cooley Flex duct business all contributed to the increase in net sales.
  • The results include a gain of $50.1 million from the sale of the Fabricated Tube Products and Shoals Tubular businesses.
  • We recorded income of $2.8 million on our investment in Tecumseh Products Company as its restructuring efforts progress, compared to a $5.5 million loss recorded during the prior year period.
  • We reduced our debt by $230.0 million, ending the quarter with a debt to total capitalization below 10 percent and a current ratio of 2.7 to 1.

Regarding the quarter performance and outlook, Greg Christopher, Mueller’s CEO said,

“Our strong financial results were driven by continued favorable market demand and our teams’ exceptional operating performance in the face of industry wide labor and supply constraints and rising costs. Building construction demand remains solid, and backlogs in most businesses continue to build.”

He added, “During the quarter, we also completed the sale of two of our smaller manufacturing businesses, Fabricated Tube Products and Shoals Tubular, and divested of a majority interest in Die-Mold Tool. Although growth remains a key priority, we also continually evaluate our portfolio and pursue opportunities to exit businesses that we do not believe provide the up-side growth potential and returns necessary to achieve our long-term strategic goals.

We anticipate that current market conditions will continue for the foreseeable future.”

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

 

For the Nine Months Ended

(In thousands, except per share data)

 

September 25,

2021

 

September 26,

2020

 

September 25,

2021

 

September 26,

2020

 

 

 

 

 

 

 

 

 

Net sales

 

$

982,248

 

 

$

619,105

 

 

$

2,812,988

 

 

$

1,722,192

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

744,265

 

 

500,780

 

 

2,212,395

 

 

1,412,654

 

Depreciation and amortization

 

10,868

 

 

10,752

 

 

33,757

 

 

32,888

 

Selling, general, and administrative expense

 

48,524

 

 

38,346

 

 

137,891

 

 

117,749

 

Gain on sale of businesses

 

(54,759

)

 

 

 

(54,759

)

 

 

Litigation settlement, net

 

 

 

 

 

 

 

(21,933

)

 

 

 

 

 

 

 

 

 

Operating income

 

233,350

 

 

69,227

 

 

483,704

 

 

180,834

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(1,116

)

 

(4,885

)

 

(7,451

)

 

(15,237

)

Redemption premium

 

 

 

 

 

(5,674

)

 

 

Other (expense) income, net

 

(2,548

)

 

522

 

 

(1,288

)

 

3,634

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

229,686

 

 

64,864

 

 

469,291

 

 

169,231

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

(60,229

)

 

(15,450

)

 

(120,996

)

 

(42,623

)

Income (loss) from unconsolidated affiliates, net of foreign tax

 

2,799

 

 

(5,457

)

 

131

 

 

(20,213

)

 

 

 

 

 

 

 

 

 

Consolidated net income

 

172,256

 

 

43,957

 

 

348,426

 

 

106,395

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

(1,276

)

 

(1,255

)

 

(5,507

)

 

(3,322

)

 

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

 

$

170,980

 

 

$

42,702

 

 

$

342,919

 

 

$

103,073

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

56,077

 

 

55,816

 

 

55,979

 

 

55,805

 

Effect of dilutive stock-based awards

 

731

 

 

550

 

 

784

 

 

534

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

56,808

 

 

56,366

 

 

56,763

 

 

56,339

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

3.05

 

 

$

0.77

 

 

$

6.13

 

 

$

1.85

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

3.01

 

 

$

0.76

 

 

$

6.04

 

 

$

1.83

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.13

 

 

$

0.10

 

 

$

0.39

 

 

$

0.30

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

688,200

 

 

$

409,414

 

 

$

1,947,564

 

 

$

1,128,467

 

Industrial Metals Segment

 

182,245

 

 

118,831

 

 

527,137

 

 

338,652

 

Climate Segment

 

122,252

 

 

97,604

 

 

364,986

 

 

276,983

 

Elimination of intersegment sales

 

(10,449

)

 

(6,744

)

 

(26,699

)

 

(21,910

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

982,248

 

 

$

619,105

 

 

$

2,812,988

 

 

$

1,722,192

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

152,199

 

 

$

44,863

 

 

$

343,805

 

 

$

122,613

 

Industrial Metals Segment

 

19,052

 

 

18,348

 

 

58,398

 

 

38,403

 

Climate Segment

 

21,072

 

 

18,156

 

 

63,779

 

 

43,523

 

Unallocated income (expenses)

 

41,027

 

 

(12,140

)

 

17,722

 

 

(23,705

)

 

 

 

 

 

 

 

 

 

Operating income

 

$

233,350

 

 

$

69,227

 

 

$

483,704

 

 

$

180,834

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

(In thousands)

September 25,

2021

 

December 26,

2020

ASSETS

 

 

 

Cash and cash equivalents

$

104,789

 

 

$

119,075

 

Accounts receivable, net

493,960

 

357,532

Inventories

405,590

 

315,002

Other current assets

33,604

 

33,752

 

 

 

 

Total current assets

1,037,943

 

825,361

 

 

 

 

Property, plant, and equipment, net

370,222

 

376,572

Operating lease right-of-use assets

24,147

 

29,301

 

Other assets

296,225

 

297,334

 

 

 

 

Total assets

$

1,728,537

 

 

$

1,528,568

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current portion of debt

$

1,110

 

 

$

41,283

 

Accounts payable

180,509

 

147,741

Current portion of operating lease liabilities

6,193

 

 

6,259

 

Other current liabilities

192,286

 

144,360

 

 

 

 

Total current liabilities

380,098

 

339,643

 

 

 

 

Long-term debt

121,012

 

286,593

Pension and postretirement liabilities

24,132

 

26,841

Environmental reserves

20,902

 

21,256

Deferred income taxes

13,393

 

16,842

Noncurrent operating lease liabilities

17,399

 

21,602

 

Other noncurrent liabilities

25,369

 

14,731

 

 

 

 

Total liabilities

602,305

 

727,508

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

1,107,562

 

 

776,745

Noncontrolling interests

18,670

 

 

24,315

 

 

 

 

Total equity

1,126,232

 

 

801,060

 

 

 

 

Total liabilities and equity

$

1,728,537

 

 

$

1,528,568

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended

(In thousands)

 

September 25,

2021

 

September 26,

2020

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Consolidated net income

 

$

348,426

 

 

$

106,395

 

Reconciliation of consolidated net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

33,932

 

 

33,127

 

Stock-based compensation expense

 

7,228

 

 

6,332

 

Provision for doubtful accounts receivable

 

1,310

 

 

953

 

(Income) loss from unconsolidated affiliates

 

(131

)

 

20,213

 

Redemption premium

 

5,674

 

 

 

(Gain) loss on disposals of properties

 

(1,135

)

 

144

 

Gain on sale of businesses

 

(54,759

)

 

 

Impairment charges

 

2,568

 

 

3,035

 

Deferred income tax expense (benefit)

 

6,304

 

 

(836

)

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

 

 

 

 

Receivables

 

(155,103

)

 

(45,530

)

Inventories

 

(96,505

)

 

41,598

 

Other assets

 

(9,335

)

 

9,053

 

Current liabilities

 

85,523

 

 

25,913

 

Other liabilities

 

8,335

 

 

(5,813

)

Other, net

 

(851

)

 

2,294

 

 

 

 

 

 

Net cash provided by operating activities

 

181,481

 

 

196,878

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Capital expenditures

 

(25,547

)

 

(29,204

)

Acquisition of businesses, net of cash acquired

 

(13,935

)

 

(72,648

)

Proceeds from sale of businesses, net of cash sold

 

74,250

 

 

 

Investments in unconsolidated affiliates

 

(1,613

)

 

 

Payment received for (issuance of) notes receivable

 

8,539

 

 

(9,155

)

Proceeds from sales of properties

 

2,124

 

 

12

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

43,818

 

 

(110,995

)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

(21,846

)

 

(16,754

)

Repurchase of common stock

 

 

 

(5,574

)

Payment of contingent consideration

 

(1,250

)

 

(7,000

)

Issuance of debt

 

475,000

 

 

150,027

 

Repayments of debt

 

(680,572

)

 

(186,492

)

Repayment of debt by consolidated joint ventures, net

 

(4,865

)

 

(299

)

Net cash received (used) to settle stock-based awards

 

219

 

 

(160

)

Debt issuance costs

 

(1,111

)

 

 

Dividends paid to noncontrolling interests

 

(9,722

)

 

 

 

 

 

 

 

Net cash used in financing activities

 

(244,147

)

 

(66,252

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

(377

)

 

(3,294

)

 

 

 

 

 

(Decrease) increase in cash, cash equivalents, and restricted cash

 

(19,225

)

 

16,337

 

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

 

$

108,151

 

 

$

114,379

 

 

Contacts

Jeffrey A. Martin

(901) 753-3226

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