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Mueller Industries, Inc. Reports Second Quarter 2021 Earnings

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

  • Operating income of $157.8 million versus $52.3 million
  • Net income of $108.8 million versus $28.0 million
  • Net sales of $1.01 billion versus $500.2 million
  • EPS of $1.92 versus $0.50 per share

Financial and Operating Highlights:

  • Average COMEX copper for the second quarter was $4.43 per pound, an 82 percent increase over the second quarter of last year.
  • The increase in net sales was attributable to unit sales growth across all segments, contributions from 2020 acquisitions, and the influence of higher copper prices.
  • During the quarter, we retired our Subordinated Debentures ($284.4 million) and recognized an expense of $5.7 million for a redemption premium.
  • We recorded a $1.0 million loss on our investment in Tecumseh Products Company for the quarter, compared to an $8.6 million loss recorded during the prior year period.
  • At quarter-end, cash on hand was $110.7 million, our debt to total capitalization was 27 percent, and the current ratio was 3.0 to 1.

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

“During the second quarter, our team delivered excellent operating performance while confronting highly inflated demand and widespread industry supply constraints. Extended lead times and abnormally high backlogs are expected to continue well into the third quarter, as many of these conditions persist.

Mueller’s operations remain well positioned for the current market conditions due to our operational investments and acquisitions that enhance capacity, increase yields and lower costs. In addition, we continue to benefit from the prudent cost controls we implemented during the height of the pandemic.

We anticipate that strong demand in the building construction sectors will continue through the remainder of the year."

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 Six Months Ended

(In thousands, except per share data)

 

June 26, 2021

 

June 27, 2020

 

June 26, 2021

 

June 27, 2020

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,012,592

 

 

$

500,168

 

 

$

1,830,740

 

 

$

1,103,087

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

799,712

 

 

403,159

 

 

1,468,130

 

 

911,874

 

Depreciation and amortization

 

11,134

 

 

11,097

 

 

22,889

 

 

22,136

 

Selling, general, and administrative expense

 

43,932

 

 

33,616

 

 

89,367

 

 

76,368

 

Asset impairments

 

 

 

 

 

 

 

3,035

 

Litigation settlement, net

 

 

 

 

 

 

 

(21,933

)

 

 

 

 

 

 

 

 

 

Operating income

 

157,814

 

 

52,296

 

 

250,354

 

 

111,607

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(1,866

)

 

(4,973

)

 

(6,335

)

 

(10,352

)

Redemption premium

 

(5,674

)

 

 

 

(5,674

)

 

 

Other income, net

 

683

 

 

2,834

 

 

1,260

 

 

3,112

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

150,957

 

 

50,157

 

 

239,605

 

 

104,367

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

(39,006

)

 

(13,029

)

 

(60,767

)

 

(27,173

)

Loss from unconsolidated affiliates, net of foreign tax

 

(1,019

)

 

(8,641

)

 

(2,668

)

 

(14,756

)

 

 

 

 

 

 

 

 

 

Consolidated net income

 

110,932

 

 

28,487

 

 

176,170

 

 

62,438

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

(2,100

)

 

(531

)

 

(4,231

)

 

(2,067

)

 

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

 

$

108,832

 

 

$

27,956

 

 

$

171,939

 

 

$

60,371

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

55,946

 

 

55,723

 

 

55,931

 

 

55,799

 

Effect of dilutive stock-based awards

 

866

 

 

471

 

 

811

 

 

527

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

56,812

 

 

56,194

 

 

56,742

 

 

56,326

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.95

 

 

$

0.50

 

 

$

3.07

 

 

$

1.08

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

1.92

 

 

$

0.50

 

 

$

3.03

 

 

$

1.07

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.13

 

 

$

0.10

 

 

$

0.26

 

 

$

0.20

 

 

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

711,616

 

 

$

334,040

 

 

$

1,259,364

 

 

$

719,053

 

Industrial Metals Segment

 

180,040

 

 

88,619

 

 

344,892

 

 

219,821

 

Climate Segment

 

131,708

 

 

86,107

 

 

242,734

 

 

179,379

 

Elimination of intersegment sales

 

(10,772

)

 

(8,598

)

 

(16,250

)

 

(15,166

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,012,592

 

 

$

500,168

 

 

$

1,830,740

 

 

$

1,103,087

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

124,508

 

 

$

41,074

 

 

$

191,606

 

 

$

77,750

 

Industrial Metals Segment

 

20,499

 

 

8,873

 

 

39,346

 

 

20,055

 

Climate Segment

 

25,372

 

 

12,353

 

 

42,707

 

 

25,367

 

Unallocated expenses

 

(12,565

)

 

(10,004

)

 

(23,305

)

 

(11,565

)

 

 

 

 

 

 

 

 

 

Operating income

 

$

157,814

 

 

$

52,296

 

 

$

250,354

 

 

$

111,607

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

     

 

 

(Unaudited)

 

 

(In thousands)

 

June 26,

2021

 

December 26,

2020

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

110,681

 

$

119,075

Accounts receivable, net

 

542,044

 

357,532

Inventories

 

384,982

 

315,002

Other current assets

 

44,288

 

33,752

 

 

 

 

 

Total current assets

 

1,081,995

 

825,361

 

 

 

 

 

Property, plant, and equipment, net

 

385,246

 

376,572

Operating lease right-of-use assets

 

26,871

 

29,301

Other assets

 

295,325

 

297,334

 

 

 

 

 

Total assets

 

$

1,789,437

 

$

1,528,568

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current portion of debt

 

$

6,428

 

$

41,283

Accounts payable

 

190,403

 

147,741

Current portion of operating lease liabilities

 

6,546

 

6,259

Other current liabilities

 

159,052

 

144,360

 

 

 

 

 

Total current liabilities

 

362,429

 

339,643

 

 

 

 

 

Long-term debt

 

350,996

 

286,593

Pension and postretirement liabilities

 

25,167

 

26,841

Environmental reserves

 

21,020

 

21,256

Deferred income taxes

 

16,363

 

16,842

Noncurrent operating lease liabilities

 

19,433

 

21,602

Other noncurrent liabilities

 

20,113

 

14,731

 

 

 

 

 

Total liabilities

 

815,521

 

727,508

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

945,716

 

776,745

Noncontrolling interests

 

28,200

 

24,315

 

 

 

 

 

Total equity

 

973,916

 

801,060

 

 

 

 

 

Total liabilities and equity

 

$

1,789,437

 

$

1,528,568

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

For the Six Months Ended

(In thousands)

 

June 26, 2021

 

June 27, 2020

Cash flows from operating activities

 

 

 

 

 

 

 

 

Consolidated net income

 

$

176,170

 

 

$

62,438

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

22,975

 

 

22,296

 

Stock-based compensation expense

 

4,817

 

 

4,198

 

Provision for doubtful accounts receivable

 

1,280

 

 

1,850

 

Loss from unconsolidated affiliates

 

2,668

 

 

14,756

 

Redemption premium

 

5,674

 

 

 

Gain on disposals of properties

 

(819

)

 

(9

)

Impairment charges

 

 

 

3,035

 

Deferred income tax expense

 

3,252

 

 

764

 

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

 

 

 

 

 

 

 

 

Receivables

 

(190,944

)

 

(11,212

)

Inventories

 

(63,949

)

 

43,263

 

Other assets

 

(5,482

)

 

3,967

 

Current liabilities

 

50,456

 

 

(277

)

Other liabilities

 

3,429

 

 

(5,369

)

Other, net

 

(247

)

 

3,082

 

Net cash provided by operating activities

 

9,280

 

 

142,782

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures

 

(17,978

)

 

(22,215

)

Acquisition of businesses, net of cash acquired

 

(13,935

)

 

(15,415

)

Payment received for notes receivable

 

8,539

 

 

 

Proceeds from sales of properties

 

1,730

 

 

1

 

Net cash used in investing activities

 

(21,644

)

 

(37,629

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

(14,546

)

 

(11,168

)

Repurchase of common stock

 

 

 

(5,574

)

Issuance of debt

 

425,000

 

 

110,015

 

Repayments of debt

 

(400,497

)

 

(166,021

)

Issuance (repayment) of debt by consolidated joint ventures, net

 

463

 

 

(471

)

Net cash received to settle stock-based awards

 

414

 

 

696

 

Debt issuance costs

 

(1,111

)

 

 

Net cash provided by (used in) financing activities

 

9,723

 

 

(72,523

)

Effect of exchange rate changes on cash

 

987

 

 

(6,160

)

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

 

(1,654

)

 

26,470

 

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

 

$

125,722

 

 

$

124,512

 

 

Contacts

Jeffrey A. Martin

(901) 753-3226

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