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Mueller Industries, Inc. Reports Third Quarter 2022 Earnings

Mueller Industries, Inc. (NYSE: MLI) announces results for the third quarter of 2022. All comparisons are to the prior year quarter (which included a $54.8 million pre-tax gain from divestitures).

  • Operating Income of $205.2 million versus $233.4 million. Adjusting for the aforementioned gain, this reflects a 15 percent increase versus the prior year period.
  • Net Income of $154.5 million versus $171.0 million
  • EPS of $2.74 versus $3.01
  • Net Sales of $944.8 million versus $982.2 million

Third Quarter Financial and Operating Highlights:

  • The absence of businesses divested in 2021, combined with lower copper prices, reduced volumes due largely to inventory rebalancing, and the impacts of localized recessionary pressures on our international businesses, contributed to a 3.8 percent quarter over quarter decrease in net sales. That decrease was offset by continued strength and growth in our value added businesses. Specifically:
    • Divestitures in 2021 reduced net sales by $20.4 million as compared with the prior year quarter.
    • COMEX copper averaged $3.50 per pound during the quarter, 19 percent lower than the third quarter of 2021.
    • Copper tube and brass rod volumes declined 14 percent.
    • Net Sales from our value added businesses grew 22 percent.
  • Cash at quarter end was $483.5 million, an increase of $395.6 million from 2021 year-end.
    • Cash generated from operations during the period was $312.4 million.
    • Net debt remains at zero.
    • The current ratio at quarter end was 3.8 to 1.

Regarding the quarter performance and outlook, Greg Christopher, Mueller’s CEO said, “We delivered another strong quarter despite ongoing macroeconomic challenges, and ended the quarter with many of our businesses operating at capacity and with healthy backlogs.

Our business outlook remains positive. Building construction, a key market for many of our businesses, has been exceptionally strong in recent years. Although we anticipate some tempering in the building industry on the horizon, we nonetheless expect overall demand to remain at healthy levels for our Company.

Our financial position is solid, and positions us well for future opportunities.”

Additional information about the Company, including its recently published investor presentation, can be found at www.muellerindustries.com.

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 24,

2022

 

September 25,

2021

 

September 24,

2022

 

September 25,

2021

 

 

 

 

 

 

 

 

 

Net sales

 

$

944,830

 

 

$

982,248

 

 

$

3,104,874

 

 

$

2,812,988

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

678,637

 

 

 

744,265

 

 

 

2,244,062

 

 

 

2,212,395

 

Depreciation and amortization

 

 

10,850

 

 

 

10,868

 

 

 

32,993

 

 

 

33,757

 

Selling, general, and administrative expense

 

 

50,178

 

 

 

48,524

 

 

 

146,590

 

 

 

137,891

 

Gain on sale of assets

 

 

 

 

 

 

 

 

(5,507

)

 

 

 

Gain on sale of businesses

 

 

 

 

 

(54,759

)

 

 

 

 

 

(54,759

)

 

 

 

 

 

 

 

 

 

Operating income

 

 

205,165

 

 

 

233,350

 

 

 

686,736

 

 

 

483,704

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(361

)

 

 

(1,116

)

 

 

(666

)

 

 

(7,451

)

Redemption premium

 

 

 

 

 

 

 

 

 

 

 

(5,674

)

Other income (expense), net

 

 

1,030

 

 

 

(2,548

)

 

 

4,013

 

 

 

(1,288

)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

205,834

 

 

 

229,686

 

 

 

690,083

 

 

 

469,291

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(51,035

)

 

 

(60,229

)

 

 

(173,524

)

 

 

(120,996

)

Income from unconsolidated affiliates, net of foreign tax

 

 

1,014

 

 

 

2,799

 

 

 

6,026

 

 

 

131

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

 

155,813

 

 

 

172,256

 

 

 

522,585

 

 

 

348,426

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

(1,271

)

 

 

(1,276

)

 

 

(3,175

)

 

 

(5,507

)

 

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

 

$

154,542

 

 

$

170,980

 

 

$

519,410

 

 

$

342,919

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

 

55,589

 

 

 

56,077

 

 

 

55,825

 

 

 

55,979

 

Effect of dilutive stock-based awards

 

 

835

 

 

 

731

 

 

 

796

 

 

 

784

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

 

56,424

 

 

 

56,808

 

 

 

56,621

 

 

 

56,763

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

2.78

 

 

$

3.05

 

 

$

9.30

 

 

$

6.13

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

2.74

 

 

$

3.01

 

 

$

9.17

 

 

$

6.04

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.25

 

 

$

0.13

 

 

$

0.75

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended

 

For the Nine Months Ended

(In thousands)

 

September 24,

2022

 

September 25,

2021

 

September 24,

2022

 

September 25,

2021

 

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

634,808

 

 

$

688,200

 

 

$

2,163,045

 

 

$

1,947,564

 

Industrial Metals Segment

 

 

144,880

 

 

 

182,245

 

 

 

498,367

 

 

 

527,137

 

Climate Segment

 

 

174,650

 

 

 

122,252

 

 

 

479,756

 

 

 

364,986

 

Elimination of intersegment sales

 

 

(9,508

)

 

 

(10,449

)

 

 

(36,294

)

 

 

(26,699

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

944,830

 

 

$

982,248

 

 

$

3,104,874

 

 

$

2,812,988

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

167,939

 

 

$

152,199

 

 

$

540,006

 

 

$

343,805

 

Industrial Metals Segment

 

 

12,077

 

 

 

19,052

 

 

 

59,504

 

 

 

58,398

 

Climate Segment

 

 

47,462

 

 

 

21,072

 

 

 

134,909

 

 

 

63,779

 

Unallocated income (expenses)

 

 

(22,313

)

 

 

41,027

 

 

 

(47,683

)

 

 

17,722

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

205,165

 

 

$

233,350

 

 

$

686,736

 

 

$

483,704

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

(In thousands)

 

September 24,

2022

 

December 25,

2021

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

483,496

 

$

87,924

Accounts receivable, net

 

 

441,287

 

 

471,859

Inventories

 

 

454,511

 

 

430,244

Other current assets

 

 

41,630

 

 

28,976

 

 

 

 

 

Total current assets

 

 

1,420,924

 

 

1,019,003

 

 

 

 

 

Property, plant, and equipment, net

 

 

374,160

 

 

385,562

Operating lease right-of-use assets

 

 

24,297

 

 

23,510

Other assets

 

 

290,370

 

 

300,861

 

 

 

 

 

Total assets

 

$

2,109,751

 

$

1,728,936

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current portion of debt

 

$

1,123

 

$

811

Accounts payable

 

 

166,978

 

 

180,793

Current portion of operating lease liabilities

 

 

5,271

 

 

6,015

Other current liabilities

 

 

201,575

 

 

194,820

 

 

 

 

 

Total current liabilities

 

 

374,947

 

 

382,439

 

 

 

 

 

Long-term debt

 

 

1,184

 

 

1,064

Pension and postretirement liabilities

 

 

17,205

 

 

17,533

Environmental reserves

 

 

15,612

 

 

17,678

Deferred income taxes

 

 

11,428

 

 

14,347

Noncurrent operating lease liabilities

 

 

18,431

 

 

17,099

Other noncurrent liabilities

 

 

16,295

 

 

21,813

 

 

 

 

 

Total liabilities

 

 

455,102

 

 

471,973

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

 

1,625,242

 

 

1,222,118

Noncontrolling interests

 

 

29,407

 

 

34,845

 

 

 

 

 

Total equity

 

 

1,654,649

 

 

1,256,963

 

 

 

 

 

Total liabilities and equity

 

$

2,109,751

 

$

1,728,936

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended

(In thousands)

 

September 24,

2022

 

September 25,

2021

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Consolidated net income

 

$

522,585

 

 

$

348,426

 

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

 

 

 

 

Depreciation and amortization

 

 

33,261

 

 

 

33,932

 

Stock-based compensation expense

 

 

12,254

 

 

 

7,228

 

Provision for doubtful accounts receivable

 

 

327

 

 

 

1,310

 

Income from unconsolidated affiliates

 

 

(6,026

)

 

 

(131

)

Redemption premium

 

 

 

 

 

5,674

 

Gain on disposals of properties

 

 

(7,107

)

 

 

(1,135

)

Gain on sale of businesses

 

 

 

 

 

(54,759

)

Impairment charges

 

 

 

 

 

2,568

 

Insurance proceeds - non-capital related

 

 

1,646

 

 

 

 

Deferred income tax expense

 

 

226

 

 

 

6,304

 

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

 

 

 

 

Receivables

 

 

15,741

 

 

 

(155,103

)

Inventories

 

 

(33,768

)

 

 

(96,505

)

Other assets

 

 

(8,574

)

 

 

(9,335

)

Current liabilities

 

 

(5,331

)

 

 

85,523

 

Other liabilities

 

 

(7,399

)

 

 

8,335

 

Other, net

 

 

(923

)

 

 

(851

)

 

 

 

 

 

Net cash provided by operating activities

 

 

516,912

 

 

 

181,481

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Capital expenditures

 

 

(29,555

)

 

 

(25,547

)

Insurance proceeds - capital related

 

 

3,354

 

 

 

 

Acquisition of businesses, net of cash acquired

 

 

 

 

 

(13,935

)

Proceeds from sale of businesses, net of cash sold

 

 

 

 

 

74,250

 

Investments in unconsolidated affiliates

 

 

 

 

 

(1,613

)

Payment received for notes receivable

 

 

 

 

 

8,539

 

Proceeds from sales of properties

 

 

7,841

 

 

 

2,124

 

Dividends from unconsolidated affiliates

 

 

2,091

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(16,269

)

 

 

43,818

 

 

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

For the Nine Months Ended

(In thousands)

 

September 24,

2022

 

September 25,

2021

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

 

(41,876

)

 

 

(21,846

)

Repurchase of common stock

 

 

(38,054

)

 

 

 

Payment of contingent consideration

 

 

 

 

 

(1,250

)

Issuance of debt

 

 

 

 

 

475,000

 

Repayments of debt

 

 

(148

)

 

 

(680,572

)

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

 

 

406

 

 

 

(4,865

)

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

 

 

(1,619

)

 

 

219

 

Debt issuance costs

 

 

 

 

 

(1,111

)

Dividends paid to noncontrolling interests

 

 

 

 

 

(9,722

)

 

 

 

 

 

Net cash used in financing activities

 

 

(81,291

)

 

 

(244,147

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(10,310

)

 

 

(377

)

 

 

 

 

 

Increase (decrease) in cash, cash equivalents, and restricted cash

 

 

409,042

 

 

 

(19,225

)

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

 

 

90,376

 

 

 

127,376

 

 

 

 

 

 

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

 

$

499,418

 

 

$

108,151

 

 

Contacts

Jeffrey A. Martin

(901) 753-3226

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