Mueller Industries, Inc. Reports Second Quarter 2022 Earnings

Rhea-AI Summary

Mueller Industries, Inc. (NYSE: MLI) reported a strong second quarter in 2022, achieving net sales of $1.15 billion, up 13.6% from the previous year. Operating income rose to $268.9 million, while net income reached $206.6 million, indicating significant growth. EPS improved to $3.65 compared to $1.92 a year ago. Despite a 4% decline in industrial metals volume and a 17% drop in international tube sales, the company’s value-added businesses surged 33%. Strong cash generation of $142 million and zero net debt position Mueller for future growth.

Positive

• Net sales increased 13.6% year-over-year to $1.15 billion.
• Operating income rose to $268.9 million, compared to $157.8 million last year.
• Net income doubled to $206.6 million from $108.8 million.
• Earnings per share (EPS) improved to $3.65 from $1.92.
• Value-added businesses grew significantly by 33%.
• Strong cash generation of $142 million and zero net debt.

Negative

• Industrial metals group volume declined 4% due to customer inventory re-balancing.
• International tube sales decreased by 17%, impacted by economic softening outside the U.S.

COLLIERVILLE, Tenn.--(BUSINESS WIRE)-- 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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220719005377/en/

Jeffrey A. Martin

(901) 753-3226

Source: Mueller Industries, Inc.

FAQ

What were the second quarter earnings for Mueller Industries (MLI) in 2022?

Mueller Industries reported net sales of $1.15 billion, operating income of $268.9 million, and net income of $206.6 million in the second quarter of 2022.

How much did Mueller Industries (MLI) increase its EPS in the second quarter of 2022?

The earnings per share (EPS) for Mueller Industries rose to $3.65, up from $1.92 in the same quarter last year.

What challenges did Mueller Industries (MLI) face in the second quarter of 2022?

Mueller Industries noted a decline in industrial metals volume and a decrease in international tube sales due to economic softening, in addition to rising interest rates and inflationary pressures.

What growth did Mueller Industries (MLI) see in value-added businesses in Q2 2022?

Value-added businesses for Mueller Industries increased by 33% compared to the second quarter of the prior year.