Mueller Industries, Inc. Reports First Quarter 2023 Earnings

Rhea-AI Summary

Mueller Industries, Inc. (NYSE: MLI) reported its Q1 2023 results, demonstrating growth in key areas despite a decrease in net sales. Operating income increased to $229.1 million, up 7.7% year-over-year, while net income rose to $173.2 million, a 9.4% increase. EPS reached $3.07, reflecting a 10.4% rise. However, net sales fell by 3.8% to $971.2 million, primarily due to lower copper prices and reduced international mill unit volume. The average COMEX copper price was $4.09 per pound, down 10% from last year. Cash from operations was robust at $111.6 million, with no net debt and a current ratio of 4.3:1. The company increased its quarterly dividend by 20% to $.30 per share. Despite a tornado damaging a factory, Mueller anticipates minimal impact on financial results due to insurance coverage.

Positive

• Operating income increased to $229.1 million (up 7.7%).
• Net income rose to $173.2 million (up 9.4%).
• EPS improved to $3.07 (up 10.4%).
• Cash generated from operations totaled $111.6 million.
• The company has no net debt and a current ratio of 4.3:1.
• Increased quarterly dividend by 20% to $0.30 per share.

Negative

• Net sales decreased by 3.8% to $971.2 million.
• Lower copper prices negatively impacted sales performance.

COLLIERVILLE, Tenn.--(BUSINESS WIRE)-- Mueller Industries, Inc. (NYSE: MLI) announces results for the first quarter of 2023. Results as compared with the first quarter of 2022 include:

• Operating Income of $229.1 million versus $212.7 million, an increase of 7.7%.
• Net Income of $173.2 million versus $158.3 million, an increase of 9.4%.
• EPS of $3.07 versus $2.78, an increase of 10.4%.
• Net Sales of $971.2 million versus $1.01 billion, a decrease of 3.8%.

First Quarter Highlights:

• The decrease in net sales was due to lower copper prices along with lower unit volume in our international mill businesses, partially offset by increased net sales in our downstream businesses that have a higher value add content. COMEX copper averaged $4.09 per pound, 10% lower than the first quarter of 2022.
• Adjusting for a $5.5 million gain on property the Company disposed of in 2022, operating income increased 10.6%.
• Cash generated from operations was $111.6 million, resulting in quarter end cash and short-term investments totaling $782.4 million. The Company has no net debt, and a current ratio of 4.3 to 1.
• Increased the quarterly dividend by 20% to $.30 per share.

Regarding the Company’s first quarter performance and outlook, Greg Christopher, Mueller’s CEO said, “Our first quarter results were in line with our 2022 year-end expectations, as reported. We entered the year anticipating that more challenging economic times were likely ahead and have adjusted accordingly. Our strong cash generation and solid balance sheet will enable us to continue delivering value to our shareholders and to pursue new growth opportunities that may arise.”

Mr. Christopher continued, “Subsequent to the end of the quarter, we reported that our factory in Covington, TN was severely damaged by a tornado. Most importantly, we are grateful that all of our employees were safe and without injury. As we rebuild, we have executed contingency plans, including the use of other Mueller production facilities and third party sourcing arrangements, to ensure a continuing reliable supply of products to our customers.

“The losses, both to property and resultant business interruption, are expected to be covered by existing insurance policies. Therefore, we believe the impact of this event on our financial results will be immaterial.”

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
(In thousands, except per share data)		April 1, 2023				March 26, 2022
Net sales		$	971,192			$	1,010,002
Cost of goods sold			678,798				744,511
Depreciation and amortization			10,657				10,841
Selling, general, and administrative expense			52,631				47,456
Gain on sale of assets			—				(5,507	)
Operating income			229,106				212,701
Interest expense			(143	)			(158	)
Interest income			6,235				160
Other income, net			2,236				620
Income before income taxes			237,434				213,323
Income tax expense			(61,357	)			(54,199	)
(Loss) income from unconsolidated affiliates, net of foreign tax			(984	)			124
Consolidated net income			175,093				159,248
Net income attributable to noncontrolling interests			(1,854	)			(932	)
Net income attributable to Mueller Industries, Inc.		$	173,239			$	158,316
Weighted average shares for basic earnings per share			55,693				56,100
Effect of dilutive stock-based awards			707				810
Adjusted weighted average shares for diluted earnings per share			56,400				56,910
Basic earnings per share		$	3.11			$	2.82
Diluted earnings per share		$	3.07			$	2.78
Dividends per share		$	0.30			$	0.25
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME, CONTINUED
(Unaudited)
		For the Quarter Ended
(In thousands)		April 1, 2023				March 26, 2022
Summary Segment Data:
Net sales:
Piping Systems Segment		$	662,479			$	703,430
Industrial Metals Segment			165,234				174,312
Climate Segment			152,954				140,622
Elimination of intersegment sales			(9,475	)			(8,362	)
Net sales		$	971,192			$	1,010,002
Operating income:
Piping Systems Segment		$	163,854			$	160,488
Industrial Metals Segment			27,215				23,259
Climate Segment			53,988				36,700
Unallocated income (expenses)			(15,951	)			(7,746	)
Operating income		$	229,106			$	212,701

MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
		(Unaudited)
(In thousands)		April 1, 2023			December 31, 2022
ASSETS
Cash and cash equivalents		$	611,399		$	461,018
Short-term investments			170,997			217,863
Accounts receivable, net			503,369			380,352
Inventories			452,826			448,919
Other current assets			28,420			26,501
Total current assets			1,767,011			1,534,653
Property, plant, and equipment, net			377,324			379,950
Operating lease right-of-use assets			29,897			22,892
Other assets			305,389			304,904
Total assets		$	2,479,621		$	2,242,399
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of debt		$	1,108		$	811
Accounts payable			179,244			128,000
Current portion of operating lease liabilities			6,249			4,942
Other current liabilities			220,144			214,542
Total current liabilities			406,745			348,295
Long-term debt			1,251			1,218
Pension and postretirement liabilities			11,260			13,055
Environmental reserves			16,060			16,380
Deferred income taxes			17,561			16,258
Noncurrent operating lease liabilities			22,773			16,880
Other noncurrent liabilities			16,502			16,349
Total liabilities			492,152			428,435
Total Mueller Industries, Inc. stockholders’ equity			1,962,307			1,790,914
Noncontrolling interests			25,162			23,050
Total equity			1,987,469			1,813,964
Total liabilities and equity		$	2,479,621		$	2,242,399

MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		For the Quarter Ended
(In thousands)		April 1, 2023				March 26, 2022
Cash flows from operating activities
Consolidated net income		$	175,093			$	159,248
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization			10,746				10,930
Stock-based compensation expense			5,637				2,573
Provision for doubtful accounts receivable			(15	)			125
Loss (income) from unconsolidated affiliates			984				(124	)
Gain on disposals of properties			(115	)			(5,507	)
Deferred income tax expense			372				258
Changes in assets and liabilities:
Receivables			(111,547	)			(116,610	)
Inventories			(581	)			(40,803	)
Other assets			(17,950	)			314
Current liabilities			50,842				54,344
Other liabilities			(2,275	)			(1,752	)
Other, net			427				(137	)
Net cash provided by operating activities			111,618				62,859
Cash flows from investing activities
Capital expenditures			(7,556	)			(5,259	)
Insurance proceeds - capital related			8,000				—
Proceeds from the maturity of short term investments			50,000				—
Proceeds from sales of properties			118				6,219
Dividends from unconsolidated affiliates			644				959
Net cash provided by investing activities			51,206				1,919
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.			(16,729	)			—
Repurchase of common stock			—				(3,972	)
Repayments of debt			(56	)			(56	)
Issuance of debt by consolidated joint ventures, net			297				—
Net cash used to settle stock-based awards			(2,611	)			(230	)
Net cash used in financing activities			(19,099	)			(4,258	)
Effect of exchange rate changes on cash			2,573				301
Increase in cash, cash equivalents, and restricted cash			146,298				60,821
Cash, cash equivalents, and restricted cash at the beginning of the period			465,296				90,376
Cash, cash equivalents, and restricted cash at the end of the period		$	611,594			$	151,197

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230425005244/en/

Jeffrey A. Martin

(901) 753-3226

Source: Mueller Industries, Inc.

FAQ

What were Mueller Industries' Q1 2023 earnings results?

In Q1 2023, Mueller Industries reported operating income of $229.1 million, net income of $173.2 million, and EPS of $3.07.

How did net sales perform in Q1 2023 for MLI?

Net sales for Q1 2023 were $971.2 million, representing a decline of 3.8% compared to the previous year.

What factors contributed to the decrease in net sales for MLI?

The decrease in net sales was largely due to lower copper prices and reduced unit volume in international mill businesses.

What is the current dividend for Mueller Industries?

Mueller Industries has increased its quarterly dividend by 20% to $0.30 per share.

Did Mueller Industries experience any operational disruptions in Q1 2023?

Yes, a tornado severely damaged their Covington, TN factory, but the company expects the impact on financial results to be immaterial due to insurance coverage.