Mueller Industries, Inc. Reports First Quarter 2024 Earnings

Rhea-AI Summary

Mueller Industries, Inc. (NYSE: MLI) reports first quarter 2024 earnings, with net income of $138.4 million, earnings before taxes of $201.6 million, net sales of $849.7 million, and diluted EPS of $1.21. The company experienced lower demand due to residential building products and lower copper prices. Despite a loss on investment in Tecumseh Products Company, Mueller generated $173.6 million in cash from operations.

Insights

Financial Analyst

Mueller Industries' financial performance in the first quarter of 2024 indicates a notable decline in net income and sales compared to the same period the previous year. A detailed examination of the figures reveals that net income has decreased by $34.8 million and net sales have fallen by $121.5 million. While earnings before taxes have also decreased, it's worth considering the earnings per share (EPS), adjusted for the stock split, which is a critical metric for stock valuation. The reported decrease in EPS from $1.54 to $1.21 could influence investor perception, potentially impacting the company's share price.

Moreover, the operating cash flow remains robust at $173.6 million, contributing to a healthy cash balance of $1.36 billion at quarter-end. This financial health could provide Mueller Industries with the flexibility to navigate market conditions and pursue growth opportunities. Investors should also consider the company's current ratio of 6.0 to 1, which indicates a strong liquidity position. However, it's important to assess whether such a high ratio may suggest inefficient use of resources or a very conservative approach to asset management.

Market Analyst

From a market perspective, the decrease in product demand, especially in the residential building sector, reflects broader economic challenges such as inflation and high interest rates. These factors are significant as they directly affect consumer spending and the housing market, which are critical to Mueller Industries. The reduced demand for residential construction materials indicates a potential slowdown in the construction industry, which could have ramifications for Mueller Industries' future performance.

Conversely, the acquisition of Nehring Electrical Works is positioned as a strategic move to enhance Mueller Industries' presence in the electrical transmission infrastructure market. This move suggests a long-term strategy aimed at diversifying and strengthening the company's portfolio amidst current market volatility. Investors should weigh these future growth plans against the present market downturn and consider how these decisions might balance short-term challenges with long-term prospects.

COLLIERVILLE, Tenn.--(BUSINESS WIRE)-- Mueller Industries, Inc. (NYSE: MLI) announces results for the first quarter of 2024. Comparisons are to the first quarter of 2023.

• Net Income of $138.4 million versus $173.2 million
• Earnings Before Taxes of $201.6 million versus $237.4 million
• Net Sales of $849.7 million versus $971.2 million
• Diluted EPS* of $1.21 versus $1.54

(*adjusted retroactively to reflect the two-for-one stock split that took effect on October 20, 2023)

First Quarter Financial and Operating Highlights:

• COMEX copper averaged $3.86 per pound during the quarter, 5.6% lower than in the first quarter of 2023.
• The decrease in net sales was attributable to lower demand for our products that are primarily consumed in residential building, as well as lower selling prices as a result of the lower copper prices.
• We recorded a $10.3 million loss on our investment in Tecumseh Products Company, largely driven by restructuring charges in its international operations.
• Net cash generated from operations was $173.6 million, and our cash balance was $1.36 billion at quarter end.
• Our current ratio was 6.0 to 1.

Regarding the quarter performance, Greg Christopher, Mueller’s CEO said, “The first quarter of 2023 represented the tail end of the period of robust demand we experienced stemming from the market’s overreaction to the 2022 supply chain crisis. Given this normalization of demand, as well as the effects persistent inflation and high interest rates have had on business conditions, our 2024 first quarter performance was in line with our expectations. The rationalization actions we took in 2023 had their intended impact and contributed to the sustained margins.”

Regarding the outlook, Mr. Christopher continued, “As reported in our annual report, our long-term outlook for our business remains positive and we are well positioned for the expected rebound in demand. Additionally, we anticipate another strong year of cash flow from operations. Our capital allocation priorities remain reinvestment in our operations to be a low cost producer and growth through acquisition. As previously reported, we are excited to complete our acquisition of Nehring Electrical Works, and look forward to capitalizing on the strong growth and expansion platform it will provide to us in the critical electrical transmission infrastructure market.”

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.

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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)		March 30, 2024				April 1, 2023
Net sales		$	849,654			$	971,192
Cost of goods sold			608,703				678,798
Depreciation and amortization			9,169				10,657
Selling, general, and administrative expense			48,357				52,631
Operating income			183,425				229,106
Interest expense			(115	)			(143	)
Interest income			17,245				6,235
Realized gains on short-term investments			365				1,910
Other income, net			630				326
Income before income taxes			201,550				237,434
Income tax expense			(51,834	)			(61,357	)
Loss from unconsolidated affiliates, net of foreign tax			(8,007	)			(984	)
Consolidated net income			141,709				175,093
Net income attributable to noncontrolling interests			(3,346	)			(1,854	)
Net income attributable to Mueller Industries, Inc.		$	138,363			$	173,239
Weighted average shares for basic earnings per share (1)			111,416				111,386
Effect of dilutive stock-based awards (1)			2,729				1414
Adjusted weighted average shares for diluted earnings per share (1)			114,145				112,800
Basic earnings per share (1)		$	1.24			$	1.56
Diluted earnings per share (1)		$	1.21			$	1.54
Dividends per share (1)		$	0.20			$	0.15
(1) Adjusted retroactively to reflect the two-for-one stock split that occurred on October 20, 2023.
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME, CONTINUED
(Unaudited)
		For the Quarter Ended
(In thousands)		March 30, 2024				April 1, 2023
Summary Segment Data:
Net sales:
Piping Systems Segment		$	590,168			$	662,479
Industrial Metals Segment			156,067				165,234
Climate Segment			116,810				152,954
Elimination of intersegment sales			(13,391	)			(9,475	)
Net sales		$	849,654			$	971,192
Operating income:
Piping Systems Segment		$	142,680			$	163,854
Industrial Metals Segment			24,271				27,215
Climate Segment			32,575				53,988
Unallocated income (expenses)			(16,101	)			(15,951	)
Operating income		$	183,425			$	229,106

MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
		(Unaudited)
(In thousands)		March 30, 2024			December 30, 2023
ASSETS
Cash and cash equivalents		$	1,357,952		$	1,170,893
Short-term investments			—			98,146
Accounts receivable, net			424,406			351,561
Inventories			356,869			380,248
Other current assets			45,379			39,173
Total current assets			2,184,606			2,040,021
Property, plant, and equipment, net			390,517			385,165
Operating lease right-of-use assets			33,819			35,170
Other assets			285,300			298,945
Total assets		$	2,894,242		$	2,759,301
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of debt		$	705		$	796
Accounts payable			160,133			120,485
Current portion of operating lease liabilities			8,072			7,893
Other current liabilities			192,371			187,964
Total current liabilities			361,281			317,138
Long-term debt			130			185
Pension and postretirement liabilities			11,361			12,062
Environmental reserves			14,919			15,030
Deferred income taxes			22,687			19,134
Noncurrent operating lease liabilities			25,451			26,683
Other noncurrent liabilities			10,043			10,353
Total liabilities			445,872			400,585
Total Mueller Industries, Inc. stockholders’ equity			2,424,374			2,337,445
Noncontrolling interests			23,996			21,271
Total equity			2,448,370			2,358,716
Total liabilities and equity		$	2,894,242		$	2,759,301

MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		For the Quarter Ended
(In thousands)		March 30, 2024				April 1, 2023
Cash flows from operating activities
Consolidated net income		$	141,709			$	175,093
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization			9,250				10,746
Stock-based compensation expense			6,231				5,637
Provision for doubtful accounts receivable			1				(15	)
Loss from unconsolidated affiliates			8,007				984
Dividends from unconsolidated affiliates			2,024				—
Insurance proceeds - noncapital related			15,000				—
Gain on disposals of properties			(1,567	)			(115	)
Gain on sales of securities			(365	)			—
Deferred income tax expense			940				372
Changes in assets and liabilities, net of effects of business sold:
Receivables			(75,200	)			(111,547	)
Inventories			22,502				(581	)
Other assets			11,984				(17,950	)
Current liabilities			33,948				50,842
Other liabilities			(907	)			(2,275	)
Other, net			68				427
Net cash provided by operating activities		$	173,625			$	111,618
Cash flows from investing activities
Capital expenditures		$	(16,406	)		$	(7,556	)
Insurance proceeds - capital related			—				8,000
Purchase of short-term investments			—				50,000
Proceeds from the sale of securities			96,465				—
Issuance of notes receivable			(12,500	)			—
Proceeds from sales of properties			2,878				118
Dividends from unconsolidated affiliates			—				644
Net cash provided by investing activities		$	70,437			$	51,206
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		For the Quarter Ended
(In thousands)		March 30, 2024				April 1, 2023
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.		$	(22,255	)		$	(16,729	)
Repurchase of common stock			(27,930	)			—
Repayments of debt			(56	)			(56	)
(Repayment) issuance of debt by consolidated joint ventures, net			(77	)			297
Net cash used to settle stock-based awards			(2,489	)			(2,611	)
Net cash used in financing activities		$	(52,807	)		$	(19,099	)
Effect of exchange rate changes on cash			(670	)			2,573
Increase in cash, cash equivalents, and restricted cash			190,585				146,298
Cash, cash equivalents, and restricted cash at the beginning of the period			1,174,223				465,296
Cash, cash equivalents, and restricted cash at the end of the period		$	1,364,808			$	611,594

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240422090496/en/

Jeffrey A. Martin

(901) 753-3226

Source: Mueller Industries, Inc.

FAQ

What are Mueller Industries, Inc.'s (NYSE: MLI) first quarter 2024 earnings results?

Mueller Industries, Inc. (NYSE: MLI) reported first quarter 2024 earnings with net income of $138.4 million, earnings before taxes of $201.6 million, net sales of $849.7 million, and diluted EPS of $1.21.

What factors contributed to the decrease in net sales for Mueller Industries, Inc. (NYSE: MLI) in the first quarter of 2024?

The decrease in net sales for Mueller Industries, Inc. (NYSE: MLI) in the first quarter of 2024 was due to lower demand for products primarily used in residential building and lower selling prices resulting from decreased copper prices.

How much cash did Mueller Industries, Inc. (NYSE: MLI) generate from operations in the first quarter of 2024?

Mueller Industries, Inc. (NYSE: MLI) generated $173.6 million in cash from operations in the first quarter of 2024.

What was Mueller Industries, Inc.'s (NYSE: MLI) CEO Greg Christopher's comment on the company's first quarter 2024 performance?

Mueller Industries, Inc.'s (NYSE: MLI) CEO Greg Christopher mentioned that the first quarter of 2024 performance was in line with expectations due to the normalization of demand, effects of inflation, and high interest rates, with rationalization actions from 2023 contributing to sustained margins.

What is Mueller Industries, Inc.'s (NYSE: MLI) CEO Greg Christopher's outlook for the business?

Mueller Industries, Inc.'s (NYSE: MLI) CEO Greg Christopher expressed a positive long-term outlook for the business, expecting a rebound in demand and strong cash flow from operations. The company's capital allocation priorities include reinvestment in operations for cost efficiency and growth through acquisition.