Business Wire | Jul 20, 2021 07:03AM EDT

Mueller Industries, Inc. Reports Second Quarter 2021 Earnings

Jul. 20, 2021

COLLIERVILLE, Tenn.--(BUSINESS WIRE)--Jul. 20, 2021--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, June 27,except per share June 26, 2021 2020 June 26, 2021 June 27, 2020data)



Net sales $ 1,012,592 $ 500,168 $ 1,830,740 $ 1,103,087



Cost of goods 799,712 403,159 1,468,130 911,874 sold

Depreciation and 11,134 11,097 22,889 22,136 amortization

Selling, general,and 43,932 33,616 89,367 76,368 administrative expense

Asset impairments - - - 3,035

Litigation - - - (21,933 )settlement, net



Operating income 157,814 52,296 250,354 111,607



Interest expense (1,866 ) (4,973 ) (6,335 ) (10,352 )

Redemption (5,674 ) - (5,674 ) - premium

Other income, net 683 2,834 1,260 3,112



Income before 150,957 50,157 239,605 104,367 income taxes



Income tax (39,006 ) (13,029 ) (60,767 ) (27,173 )expense

Loss fromunconsolidated (1,019 ) (8,641 ) (2,668 ) (14,756 )affiliates, net of foreign tax



Consolidated net 110,932 28,487 176,170 62,438 income



Net incomeattributable to (2,100 ) (531 ) (4,231 ) (2,067 )noncontrolling interests



Net incomeattributable to $ 108,832 $ 27,956 $ 171,939 $ 60,371 Mueller Industries, Inc.



Weighted averageshares for basic 55,946 55,723 55,931 55,799 earnings per share

Effect ofdilutive 866 471 811 527 stock-based awards



Adjusted weightedaverage sharesfor diluted 56,812 56,194 56,742 56,326 earnings pershare



Basic earnings $ 1.95 $ 0.50 $ 3.07 $ 1.08 per share



Diluted earnings $ 1.92 $ 0.50 $ 3.03 $ 1.07 per share



Dividends per $ 0.13 $ 0.10 $ 0.26 $ 0.20 share



Summary Segment Data:



Net sales:

Piping Systems $ 711,616 $ 334,040 $ 1,259,364 $ 719,053 Segment

Industrial Metals 180,040 88,619 344,892 219,821 Segment

Climate Segment 131,708 86,107 242,734 179,379

Elimination ofintersegment (10,772 ) (8,598 ) (16,250 ) (15,166 )sales



Net sales $ 1,012,592 $ 500,168 $ 1,830,740 $ 1,103,087



Operating income:

Piping Systems $ 124,508 $ 41,074 $ 191,606 $ 77,750 Segment

Industrial Metals 20,499 8,873 39,346 20,055 Segment

Climate Segment 25,372 12,353 42,707 25,367

Unallocated (12,565 ) (10,004 ) (23,305 ) (11,565 )expenses



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 BALANCE SHEETS

(Unaudited)

(In thousands) June 26, December 26, 2021 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' 945,716 776,745equity

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

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CONTACT: Jeffrey A. Martin (901) 753-3226