Business Wire | Oct 19, 2021 07:02AM EDT

Mueller Industries, Inc. Reports Third Quarter 2021 Earnings

Oct. 19, 2021

COLLIERVILLE, Tenn.--(BUSINESS WIRE)--Oct. 19, 2021--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, September September September 25, September 26,except per share 25, 26, 2021 2020data) 2021 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 10,868 10,752 33,757 32,888 amortization

Selling, general,and administrative 48,524 38,346 137,891 117,749 expense

Gain on sale of (54,759 ) - (54,759 ) - businesses

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



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) (2,548 ) 522 (1,288 ) 3,634 income, net



Income before 229,686 64,864 469,291 169,231 income taxes



Income tax expense (60,229 ) (15,450 ) (120,996 ) (42,623 )

Income (loss) fromunconsolidated 2,799 (5,457 ) 131 (20,213 )affiliates, net offoreign tax



Consolidated net 172,256 43,957 348,426 106,395 income



Net incomeattributable to (1,276 ) (1,255 ) (5,507 ) (3,322 )noncontrollinginterests



Net incomeattributable to $ 170,980 $ 42,702 $ 342,919 $ 103,073 Mueller Industries,Inc.



Weighted averageshares for basic 56,077 55,816 55,979 55,805 earnings per share

Effect of dilutive 731 550 784 534 stock-based awards



Adjusted weightedaverage shares for 56,808 56,366 56,763 56,339 diluted earningsper share



Basic earnings per $ 3.05 $ 0.77 $ 6.13 $ 1.85 share



Diluted earnings $ 3.01 $ 0.76 $ 6.04 $ 1.83 per share



Dividends per share $ 0.13 $ 0.10 $ 0.39 $ 0.30



Summary Segment Data:



Net sales:

Piping Systems $ 688,200 $ 409,414 $ 1,947,564 $ 1,128,467 Segment

Industrial Metals 182,245 118,831 527,137 338,652 Segment

Climate Segment 122,252 97,604 364,986 276,983

Elimination of (10,449 ) (6,744 ) (26,699 ) (21,910 )intersegment sales



Net sales $ 982,248 $ 619,105 $ 2,812,988 $ 1,722,192



Operating income:

Piping Systems $ 152,199 $ 44,863 $ 343,805 $ 122,613 Segment

Industrial Metals 19,052 18,348 58,398 38,403 Segment

Climate Segment 21,072 18,156 63,779 43,523

Unallocated income 41,027 (12,140 ) 17,722 (23,705 )(expenses)



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 BALANCE SHEETS



(Unaudited)

(In thousands) September 25, December 26, 2021 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' 1,107,562 776,745equity

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

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