Mueller Industries, Inc. Reports Second Quarter 2022 Earnings

Mueller Industries, Inc. (NYSE: MLI) announces results for the second quarter of 2022. (All comparisons are to the prior year quarter.)

  • Operating Income of $268.9 million versus $157.8 million
  • Net Income of $206.6 million versus $108.8 million
  • EPS of $3.65 versus $1.92
  • Net Sales of $1.15 billion versus $1.01 billion

Second Quarter Financial and Operating Highlights:

  • The 13.6 percent increase in net sales was driven by strong growth in our value added businesses, combined with higher selling prices across all businesses.
    • COMEX copper averaged $4.34 per pound during the quarter, two percent lower than the second quarter of 2021.
    • Our Industrials Metals group volume, measured in pounds, declined 4 percent, largely attributable to customer inventory re-balancing as lead times improved.
    • Our U.S. copper tube volume was up slightly and remains solid; however, influenced largely by economic softening outside of the U.S., our international tube sales declined 17 percent, against a very strong second quarter in 2021.
    • Our value added businesses grew 33 percent.
    • Divestitures in 2021 reduced net sales by $31 million as compared with the prior year quarter.
  • Cash at quarter end was $202.5 million, up $114.6 million year to date.
    • Cash generated from operations during the period was $142 million.
    • Net debt was zero.
    • The current ratio at quarter end was 3.2 to 1.

Regarding the quarter performance and outlook, Greg Christopher, Mueller’s CEO said, “At the mid-way point in the year, our businesses continue to deliver excellent results. The second quarter was our twelfth consecutive quarter in which operating income grew over the prior year period. Rising interest rates, inflationary pressures and continued geopolitical disruptions will create short term challenges, but notwithstanding, we believe that Mueller is well positioned for continued long term growth.

"The majority of our businesses remain at capacity along with healthy backlogs. We anticipate that some tempering in our primary market segment, building construction, will occur, but that underlying demand will nevertheless remain at levels we consider very healthy for our businesses.

"Our cash generation is strong, and we have zero net debt along with a committed, untapped credit facility. Reinvestment in our businesses to be the lowest cost producer remains a top priority, and we are well equipped to take advantage of strategic acquisition opportunities as they arise.”

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 25, 2022

 

June 26, 2021

 

June 25, 2022

 

June 26, 2021

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,150,042

 

 

$

1,012,592

 

 

$

2,160,044

 

 

$

1,830,740

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

820,914

 

 

 

799,712

 

 

 

1,565,425

 

 

 

1,468,130

 

Depreciation and amortization

 

 

11,302

 

 

 

11,134

 

 

 

22,143

 

 

 

22,889

 

Selling, general, and administrative expense

 

 

48,956

 

 

 

43,932

 

 

 

96,412

 

 

 

89,367

 

Gain on sale of assets

 

 

 

 

 

 

 

 

(5,507

)

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

268,870

 

 

 

157,814

 

 

 

481,571

 

 

 

250,354

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(147

)

 

 

(1,866

)

 

 

(305

)

 

 

(6,335

)

Redemption premium

 

 

 

 

 

(5,674

)

 

 

 

 

 

(5,674

)

Other income, net

 

 

2,203

 

 

 

683

 

 

 

2,983

 

 

 

1,260

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

270,926

 

 

 

150,957

 

 

 

484,249

 

 

 

239,605

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(68,290

)

 

 

(39,006

)

 

 

(122,489

)

 

 

(60,767

)

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

 

 

4,888

 

 

 

(1,019

)

 

 

5,012

 

 

 

(2,668

)

 

 

 

 

 

 

 

 

 

Consolidated net income

 

 

207,524

 

 

 

110,932

 

 

 

366,772

 

 

 

176,170

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

(972

)

 

 

(2,100

)

 

 

(1,904

)

 

 

(4,231

)

 

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

 

$

206,552

 

 

$

108,832

 

 

$

364,868

 

 

$

171,939

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

 

55,787

 

 

 

55,946

 

 

 

55,943

 

 

 

55,931

 

Effect of dilutive stock-based awards

 

 

741

 

 

 

866

 

 

 

776

 

 

 

811

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

 

56,528

 

 

 

56,812

 

 

 

56,719

 

 

 

56,742

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

3.70

 

 

$

1.95

 

 

$

6.52

 

 

$

3.07

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

3.65

 

 

$

1.92

 

 

$

6.43

 

 

$

3.03

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.25

 

 

$

0.13

 

 

$

0.50

 

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME, CONTINUED

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended

 

For the Six Months Ended

(In thousands)

 

June 25, 2022

 

June 26, 2021

 

June 25, 2022

 

June 26, 2021

 

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

824,807

 

 

$

711,616

 

 

$

1,528,237

 

 

$

1,259,364

 

Industrial Metals Segment

 

 

179,175

 

 

 

180,040

 

 

 

353,487

 

 

 

344,892

 

Climate Segment

 

 

164,484

 

 

 

131,708

 

 

 

305,106

 

 

 

242,734

 

Elimination of intersegment sales

 

 

(18,424

)

 

 

(10,772

)

 

 

(26,786

)

 

 

(16,250

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,150,042

 

 

$

1,012,592

 

 

$

2,160,044

 

 

$

1,830,740

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

211,579

 

 

$

124,508

 

 

$

372,067

 

 

$

191,606

 

Industrial Metals Segment

 

 

24,168

 

 

 

20,499

 

 

 

47,427

 

 

 

39,346

 

Climate Segment

 

 

50,747

 

 

 

25,372

 

 

 

87,447

 

 

 

42,707

 

Unallocated income (expenses)

 

 

(17,624

)

 

 

(12,565

)

 

 

(25,370

)

 

 

(23,305

)

 

 

 

 

 

 

 

 

 

Operating income

 

$

268,870

 

 

$

157,814

 

 

$

481,571

 

 

$

250,354

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

(In thousands)

 

June 25,

2022

 

December 25,

2021

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

202,501

 

$

87,924

Accounts receivable, net

 

 

611,578

 

 

471,859

Inventories

 

 

475,951

 

 

430,244

Other current assets

 

 

45,726

 

 

28,976

 

 

 

 

 

Total current assets

 

 

1,335,756

 

 

1,019,003

 

 

 

 

 

Property, plant, and equipment, net

 

 

388,139

 

 

385,562

Operating lease right-of-use assets

 

 

22,870

 

 

23,510

Other assets

 

 

300,207

 

 

300,861

 

 

 

 

 

Total assets

 

$

2,046,972

 

$

1,728,936

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current portion of debt

 

$

1,112

 

$

811

Accounts payable

 

 

208,869

 

 

180,793

Current portion of operating lease liabilities

 

 

5,725

 

 

6,015

Other current liabilities

 

 

203,065

 

 

194,820

 

 

 

 

 

Total current liabilities

 

 

418,771

 

 

382,439

 

 

 

 

 

Long-term debt

 

 

1,131

 

 

1,064

Pension and postretirement liabilities

 

 

16,608

 

 

17,533

Environmental reserves

 

 

16,300

 

 

17,678

Deferred income taxes

 

 

11,712

 

 

14,347

Noncurrent operating lease liabilities

 

 

15,899

 

 

17,099

Other noncurrent liabilities

 

 

20,928

 

 

21,813

 

 

 

 

 

Total liabilities

 

 

501,349

 

 

471,973

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

 

1,510,463

 

 

1,222,118

Noncontrolling interests

 

 

35,160

 

 

34,845

 

 

 

 

 

Total equity

 

 

1,545,623

 

 

1,256,963

 

 

 

 

 

Total liabilities and equity

 

$

2,046,972

 

$

1,728,936

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

For the Six Months Ended

(In thousands)

 

June 25, 2022

 

June 26, 2021

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Consolidated net income

 

$

366,772

 

 

$

176,170

 

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

 

 

 

 

Depreciation and amortization

 

 

22,322

 

 

 

22,975

 

Stock-based compensation expense

 

 

5,171

 

 

 

4,817

 

Provision for doubtful accounts receivable

 

 

151

 

 

 

1,280

 

(Income) loss from unconsolidated affiliates

 

 

(5,012

)

 

 

2,668

 

Redemption premium

 

 

 

 

 

5,674

 

Gain on disposals of properties

 

 

(6,800

)

 

 

(819

)

Deferred income tax (benefit) expense

 

 

(373

)

 

 

3,252

 

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

 

 

 

 

Receivables

 

 

(146,438

)

 

 

(190,944

)

Inventories

 

 

(49,354

)

 

 

(63,949

)

Other assets

 

 

(6,095

)

 

 

(5,482

)

Current liabilities

 

 

28,906

 

 

 

50,456

 

Other liabilities

 

 

(4,283

)

 

 

3,429

 

Other, net

 

 

(433

)

 

 

(247

)

 

 

 

 

 

Net cash provided by operating activities

 

 

204,534

 

 

 

9,280

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Capital expenditures

 

 

(23,248

)

 

 

(17,978

)

Acquisition of businesses, net of cash acquired

 

 

 

 

 

(13,935

)

Payment received for (issuance of) notes receivable

 

 

 

 

 

8,539

 

Proceeds from sales of properties

 

 

7,561

 

 

 

1,730

 

Dividends from unconsolidated affiliates

 

 

1,609

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(14,078

)

 

 

(21,644

)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

 

(27,968

)

 

 

(14,546

)

Repurchase of common stock

 

 

(33,469

)

 

 

 

Issuance of debt

 

 

 

 

 

425,000

 

Repayments of debt

 

 

(111

)

 

 

(400,497

)

Issuance of debt by consolidated joint ventures, net

 

 

360

 

 

 

463

 

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

 

 

(95

)

 

 

414

 

Debt issuance costs

 

 

 

 

 

(1,111

)

 

 

 

 

 

Net cash (used in) provided by financing activities

 

 

(61,283

)

 

 

9,723

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(2,234

)

 

 

987

 

 

 

 

 

 

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

 

 

126,939

 

 

 

(1,654

)

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

 

$

217,315

 

 

$

125,722

 

 

Contacts

Jeffrey A. Martin

(901) 753-3226

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