Mueller Industries, Inc. Reports Third Quarter 2022 Earnings

Rhea-AI Summary

Mueller Industries (NYSE: MLI) reported Q3 2022 results, showing net sales of $944.8 million, down 3.8% from the prior year, due to lower copper prices and divestitures. Operating Income was $205.2 million, down from $233.4 million, but adjusted for divestitures reflects a 15% increase. Net Income decreased to $154.5 million from $171.0 million, with EPS at $2.74 compared to $3.01. Despite challenges, the company noted strong performance in value-added businesses, with a 22% growth in that segment. Cash reserves increased significantly, positioning the company for future opportunities.

Positive

• Net sales from value-added businesses grew 22%.
• Cash at quarter end increased to $483.5 million from $87.9 million in 2021.
• Net debt remains at zero.
• Healthy backlog reported across many businesses.

Negative

• Overall net sales decreased by 3.8% year-over-year.
• Operating income decreased to $205.2 million from $233.4 million.

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

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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								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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221018005284/en/

Jeffrey A. Martin

(901) 753-3226

Source: Mueller Industries, Inc.

FAQ

What were Mueller Industries' Q3 2022 earnings results?

Mueller Industries reported net income of $154.5 million and earnings per share of $2.74 for Q3 2022.

How did the revenue of Mueller Industries change in Q3 2022?

Net sales decreased to $944.8 million in Q3 2022, down 3.8% compared to the same quarter last year.

What is the outlook for Mueller Industries following Q3 2022 results?

The outlook remains positive, with continued demand expected in the building construction sector despite some anticipated tempering.

How much cash did Mueller Industries have at the end of Q3 2022?

Mueller Industries reported cash reserves of $483.5 million at the end of Q3 2022.