Paul Mueller Company Announces Its First Quarter Earnings of 2021

Rhea-AI Summary

Paul Mueller Company (OTC: MUEL) reported Q1 2021 earnings, ending March 31, with net sales of $45.3 million, a 7.4% increase from Q1 2020. Gross profit rose to $13.4 million, up from $11.9 million. However, net income improved to $1.3 million compared to $875,000 last year. The company faced a $2.1 million loss for the trailing twelve months, largely due to a $15.4 million goodwill impairment. The backlog increased to $69 million but decreased 35.7% year-over-year. Cash and short-term investments fell to $15.6 million from $22.9 million.

Positive

• 7.4% increase in net sales year-over-year.
• Gross profit improved to $13.4 million.
• Net income for Q1 2021 was $1.3 million, up from $875,000.

Negative

• Trailing twelve months net income showed a $2.1 million loss.
• Goodwill impairment of $15.4 million significantly affected net income.
• Backlog decreased 35.7% compared to March 2020.

SPRINGFIELD, Mo., April 30, 2021 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended March 31, 2021.

	PAUL MUELLER COMPANY
	THREE-MONTH REPORT
	Unaudited
							(In thousands)
	CONSOLIDATED STATEMENTS OF INCOME
							Three Months Ended				Twelve Months Ended
							March 31				March 31
							2021		2020		2021		2020
	Net Sales						$ 45,279		$ 42,160		$ 204,235		$ 197,455
	Cost of Sales						31,838		30,299		141,852		140,908
	Gross Profit						$ 13,441		$ 11,861		$ 62,383		$ 56,547
	Selling, General and Administrative Expense						11,308		10,505		44,958		44,678
	Goodwill Impairment Expense						-		-		15,397		-
	Operating Income						$ 2,133		$ 1,356		$ 2,028		$ 11,869
	Interest Expense						(451)		(615)		(828)		(1,034)
	Other Income						38		437		809		511
	Income before Provision for Income Taxes						$ 1,720		$ 1,178		$ 2,009		$ 11,346
	Provision for Income Taxes						419		303		4,140		2,802
	Net Income (Loss)						$ 1,301		$ 875		$ (2,131)		$ 8,544
	Earnings (Loss) per Common Share ––				Basic		$1.19		$0.73		($1.94)		$7.15
					Diluted		$1.19		$0.73		($1.94)		$7.15
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
											Three Months Ended
											March 31
											2021		2020
				Net Income							$ 1,301		$ 875
				Other Comprehensive Income, Net of Tax:
				Foreign Currency Translation Adjustment							(1,275)		(647)
				Comprehensive Income							$ 26		$ 228
	CONSOLIDATED BALANCE SHEETS
											March 31		December 31
											2021		2020
				Cash and Short-Term Investments							$ 15,559		$ 22,943
				Accounts Receivable							21,954		20,462
				Inventories							21,612		17,926
				Current Net Investments in Sales-Type Leases							3		3
				Other Current Assets							2,368		1,771
				Current Assets							$ 61,496		$ 63,105
				Net Property, Plant, and Equipment							43,908		46,570
				Right of Use Assets							2,379		2,448
				Other Assets							9,285		8,732
				Long-Term Net Investments in Sales-Type Leases							98		83
				Total Assets							$ 117,166		$ 120,938
				Accounts Payable							$ 13,541		$ 11,316
				Current Maturities and Short-Term debt							1,510		2,115
				Current Lease Liabilities							492		519
				Other Current Liabilities							24,898		24,656
				Current Liabilities							$ 40,441		$ 38,606
				Long-Term Debt							17,465		18,440
				Long-Term Pension Liabilities							29,087		30,047
				Other Long-Term Liabilities							2,647		2,226
				Lease Liabilities							957		1,075
				Total Liabilities							$ 90,597		$ 90,394
				Shareholders' Investment							26,569		30,544
				Total Liabilities and Shareholders' Investment							$ 117,166		$ 120,938
	SELECTED FINANCIAL DATA
													March 31		December 31
													2021		2020
					Book Value per Common Share								$24.25		$25.54
					Total Shares Outstanding								1,095,718		1,195,747
					Backlog								$ 69,013		$ 61,563
	CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT
															Accumulated Other Comprehensive Income (Loss)
							Common Stock		Paid-in Surplus		Retained Earnings		Treasury Stock
																	Total
	Balance, December 31, 2020						$ 1,508		$ 9,708		$ 65,927		$ (6,344)		$ (40,255)		$ 30,544
	Add (Deduct):
		Net Income									1,301						1,301
		Other Comprehensive Income, Net of Tax													(1,275)		(1,275)
		Treasury Stock Acquisition											(4,001)				(4,001)
	Balance, March 31, 2021						$ 1,508		$ 9,708		$ 67,228		$ (10,345)		$ (41,530)		$ 26,569
	CONSOLIDATED STATEMENT OF CASH FLOWS
													Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
				Operating Activities:
				Net Income									$ 1,301		$ 875
				Adjustment to Reconcile Net Income to Net Cash (Required) Provided by Operating Activities:
				Pension Contributions (Greater) Less than Expense									(960)		(903)
				Bad Debt Expense (Recovery)									(32)		(10)
				Depreciation & Amortization									1,652		1,604
				(Gain) Loss on Sales of Equipment									(3)		(2)
				Change in Assets and Liabilities
				(Inc) Dec in Accts and Notes Receivable									(1,460)		5,572
				(Inc) Dec in Cost in Excess of Estimated Earnings and Billings									(478)		274
				(Inc) in Inventories									(3,213)		(4,728)
				(Inc) Dec in Prepayments									(118)		154
				(Inc) in Net Investment in Sales-type leases									(15)		(26)
				(Inc) Dec in Other LT Assets									(72)		52
				Inc in Accounts Payable									2,225		2,215
				(Dec) Inc in Other Accrued Expenses									(4,131)		1,387
				Inc in Advanced Billings									5,580		7,871
				(Dec) Inc in Billings in Excess of Costs and Estimated Earnings									(1,204)		1,941
				Inc (Dec) in Lease Liability for Operating									24		(14)
				Inc (Dec) in Lease Liability for Financing									43		(11)
				Principal payments of Lease Liability for Operating									(69)		(25)
				(Dec) Inc in Long Term Liabilities									(72)		58
				Net Cash (Required) Provided by Operating Activities									$ (1,002)		$ 16,284
				Investing Activities
				Proceeds from Sales of Equipment									9		2
				Additions to Property, Plant, and Equipment									(812)		216
				Net Cash (Required) Provided for Investing Activities									$ (803)		$ 218
				Financing Activities
				Principal payments of Lease Liability for Financing									(69)		-
				(Repayment) of Short-Term Borrowings, Net									(605)		(4,896)
				(Repayment) Proceeds of Long-Term Debt									(353)		1,112
				Treasury Stock Acquisitions									(4,001)		(3)
				Net Cash (Required) for Financing Activities									$ (5,028)		$ (3,787)
				Effect of Exchange Rate Changes									(551)		(765)
				Net (Decrease) Increase in Cash and Cash Equivalents									$ (7,384)		$ 11,950
				Cash and Cash Equivalents at Beginning of Year									22,943		1,072
				Cash and Cash Equivalents at End of Quarter									$ 15,559		$ 13,022

 

PAUL MUELLER COMPANY
SUMMARIZED NOTES TO THE FINANCIAL STATEMENTS
(In thousands)

A.   The chart below depicts the net revenue on a consolidating basis for the three
months ended March 31.

	Three Months Ended March 31
	Revenue		2021			2020
	Domestic	$	33,497		$	29,624
	Mueller BV	$	12,027		$	12,801
	Eliminations	$	(245	)	$	(265	)
	Net Revenue	$	45,279		$	42,160

The chart below depicts the net revenue on a consolidating basis for the twelve   
months ended March 31.

	Twelve Months Ended March 31
	Revenue		2021			2020
	Domestic	$	158,761		$	146,212
	Mueller BV	$	46,439		$	52,574
	Eliminations	$	(965	)	$	(1,331	)
	Net Revenue	$	204,235		$	197,455

The chart below depicts the net income on a consolidating basis for the three months     
ended March 31.

	Three Months Ended March 31
	Net Income		2021			2020
	Domestic	$	1,683		$	925
	Mueller BV	$	(394	)	$	(54	)
	Eliminations	$	12		$	4
	Net Income	$	1,301		$	875

The chart below depicts the net income on a consolidating basis for the twelve months ended March 31.

	Twelve Months Ended March 31
	Net Income		2021			2020
	Domestic	$	12,942		$	9,393
	Mueller BV	$	(15,098	)	$	(865	)
	Eliminations	$	25		$	16
	Net Income	$	(2,131	)	$	8,544

B.   March 31, 2021 backlog is $69.0 million compared to $61.6 million at December 31, 2020. However, when comparing current backlog to the March 31, 2020 backlog, it has dropped 35.7% from $107.3 million. Of this $38.3 million reduction, $17.7 million is the pharmaceutical divisions finishing up the large pharmaceutical orders and $29.1 million as Mueller Field Operations (MFO) made significant progress on the large juice storage facility project. The backlog in the other U.S. business units is up $11.0 million (48.7%) led by Dairy Farm Equipment (DFE), and the other Industrial Equipment business units. Mueller BV backlog is down $2.2 million from a year ago to $8.5 million.

C.   Revenue for the three months is up 7.4% from a year ago led by a rebound in DFE and MFO’s continued work on the juice storage facility. Revenue for the trailing twelve months is up 3.4% driven by the large juice facility project. In the Netherlands, revenue is down slightly from the year before for three months and down 11.7% for the trailing twelve months as the general economy and Covid-19 continue to have a negative effect.

D.   Net income for the three months was $1.3 million which is an improvement of $0.4 million over the first quarter of last year even after a negative $0.7 million after tax LIFO effect. The largest contributor to the improvement in the U.S. is the rebound of DFE from historical lows. In the Netherlands, net income is down $0.3 million primarily from lower revenues.

Net income for the trailing twelve months is a $2.1 million loss. However, when the $15.4 million goodwill impairment for the Mueller BV acquisition is excluded, net income would be $13.3 million, a $4.7 million (55.3%) improvement over the previous trailing twelve months’ net income even after absorbing a $0.9 million after tax negative impact from the LIFO reserve. Almost every business segment had improved profits, led by the pharmaceutical groups, DFE and MFO. In the Netherlands, net income would be $0.3 million when excluding the goodwill impairment. This is an improvement over the $0.9 million loss in the prior twelve months even with lower revenue.

E.   The Company was granted a loan in the amount of $1.9 million, pursuant to the Paycheck Protection Program under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The loan, which was in the form of a note dated June 12, 2020, issued to the Company, matures on June 11, 2025, and bears interest at a rate of 1% per annum, with a deferral of payments for the first six months. The note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, utilities, and maintains its payroll levels. The Company filed for forgiveness of the loan on November 17, 2020, and is waiting for a response.

F.   On February 5, 2021, the Company repurchased 100,000 shares of stock at $40 a share from a shareholder in a private transaction. In addition, as of March 31, 2021, the Company purchased 29 shares under the buyback program announced on March 19, 2021.

G.   The pre-tax results for three months ended March 31, 2021, were unfavorably affected by $0.9 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2021, were unfavorably affected by $0.5 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2020, were favorably affected by a $0.7 million decrease in the LIFO reserve.

H.   The consolidated financials are affected by the euro to dollar exchange rate when consolidating Mueller B.V., the Dutch subsidiary. The month-end euro to dollar exchange rate was 1.10 for March, 2020; 1.23 for December, 2020 and 1.17 for March, 2021, respectively.

This press release contains forward-looking statements that provide current expectations of future events based on certain assumptions. All statements regarding future performance growth, conditions, or developments are forward-looking statements. Actual future results may differ materially from those described in the forward-looking statements due to a variety of factors, including, but not limited to, the factors described in the Company’s Annual Report under “Safe Harbor for Forward-Looking Statements”, which is available at paulmueller.com. The Company expressly disclaims any obligation or undertaking to update these forward-looking statements to reflect any future events or circumstances.

The accounting policies related to this report and additional management discussion and
analysis are provided in the 2020 annual report, available at
www.paulmueller.com.

 

Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9346
kjeffries@paulmueller.com | http://paulmueller.com

 

FAQ

What were Paul Mueller Company's earnings for Q1 2021?

Paul Mueller Company reported earnings of $1.3 million for Q1 2021.

How much did net sales increase in Q1 2021 for MUEL?

Net sales increased by 7.4% to $45.3 million in Q1 2021.

What was the backlog for Paul Mueller Company as of March 31, 2021?

The backlog was $69 million as of March 31, 2021.

How did Paul Mueller Company's net income change in 2021?

Net income for the trailing twelve months showed a loss of $2.1 million.

What was the gross profit for Paul Mueller Company in Q1 2021?

The gross profit for Q1 2021 was $13.4 million.