Paul Mueller Company Announces Its Second Quarter Earnings of 2023
- Net sales for the quarter increased by 30% compared to the same period last year.
- Gross profit increased by 78%.
- Operating income improved from a loss to $5,838,000.
- Net income for the quarter was $4,813,000, compared to a loss of $149,000 last year.
- None.
SPRINGFIELD, Mo., July 28, 2023 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended June 30, 2023.
| PAUL MUELLER COMPANY | ||||||||||||||||||||
| SIX-MONTH REPORT | ||||||||||||||||||||
| Unaudited | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | Twelve Months Ended | ||||||||||||||||||
| June 30 | June 30 | June 30 | ||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Net Sales | $ | 59,931 | $ | 45,977 | $ | 116,282 | $ | 86,752 | $ | 221,050 | $ | 176,808 | ||||||||
| Cost of Sales | 41,379 | 35,542 | 80,933 | 67,403 | 165,816 | 137,823 | ||||||||||||||
| Gross Profit | $ | 18,552 | $ | 10,435 | $ | 35,349 | $ | 19,349 | $ | 55,234 | $ | 38,985 | ||||||||
| Selling, General and Administrative Expense | 12,714 | 10,397 | 25,301 | 20,637 | 39,675 | 41,660 | ||||||||||||||
| Operating Income (Loss) | $ | 5,838 | $ | 38 | $ | 10,048 | $ | (1,288 | ) | $ | 15,559 | $ | (2,675 | ) | ||||||
| Interest Expense | (80 | ) | (117 | ) | (177 | ) | (505 | ) | (369 | ) | (705 | ) | ||||||||
| PPP Loan Forgiveness | - | - | - | - | - | 1,884 | ||||||||||||||
| Other Income (Expense) | 613 | (126 | ) | 1,333 | 138 | 2,310 | 940 | |||||||||||||
| Income (Loss) before Provision (Benefit) for Income Taxes | $ | 6,371 | $ | (205 | ) | $ | 11,204 | $ | (1,655 | ) | $ | 17,500 | $ | (556 | ) | |||||
| Provision (Benefit) for Income Taxes | 1,558 | (56 | ) | 2,724 | (384 | ) | 4,140 | (205 | ) | |||||||||||
| Net Income (Loss) | $ | 4,813 | $ | (149 | ) | $ | 8,480 | $ | (1,271 | ) | $ | 13,360 | $ | (351 | ) | |||||
| Earnings (Loss) per Common Share ––Basic and Diluted | $ | 4.43 | ( | ) | $ | 7.81 | ( | ) | $ | 12.31 | ( | ) | ||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||
| Six Months Ended | ||||||
| June 30 | ||||||
| 2023 | 2022 | |||||
| Net Income (Loss) | $ | 8,480 | $ | (1,271 | ) | |
| Other Comprehensive Income (Loss), Net of Tax: | ||||||
| Foreign Currency Translation Adjustment | 441 | (2,292 | ) | |||
| Comprehensive Income (Loss) | $ | 8,921 | $ | (3,563 | ) | |
| CONSOLIDATED BALANCE SHEETS | ||||||
| June 30 | December 31 | |||||
| 2023 | 2022 | |||||
| Cash and Short-Term Investments | $ | 38,907 | $ | 38,176 | ||
| Accounts Receivable | 24,453 | 20,580 | ||||
| Inventories (FIFO) | 52,198 | 48,515 | ||||
| LIFO Reserve | (21,930 | ) | (21,691 | ) | ||
| Inventories (LIFO) | 30,268 | 26,824 | ||||
| Current Net Investments in Sales-Type Leases | 25 | 24 | ||||
| Other Current Assets | 3,799 | 3,156 | ||||
| Current Assets | $ | 97,452 | $ | 88,760 | ||
| Net Property, Plant, and Equipment | 41,572 | 41,511 | ||||
| Right of Use Assets | 2,455 | 2,304 | ||||
| Other Assets | 5,385 | 5,041 | ||||
| Long-Term Net Investments in Sales-Type Leases | 380 | 312 | ||||
| Total Assets | $ | 147,244 | $ | 137,928 | ||
| Accounts Payable | $ | 13,132 | $ | 11,802 | ||
| Current Maturities and Short-Term Debt | 636 | 628 | ||||
| Current Lease Liabilities | 433 | 448 | ||||
| Advance Billings | 36,641 | 41,288 | ||||
| Pension Liabilities | 10,740 | 11,558 | ||||
| Other Current Liabilities | 23,965 | 20,062 | ||||
| Current Liabilities | $ | 85,547 | $ | 85,786 | ||
| Long-Term Debt | 9,145 | 9,349 | ||||
| Long-Term Pension Liabilities | 236 | 236 | ||||
| Other Long-Term Liabilities | 2,965 | 1,737 | ||||
| Lease Liabilities | 698 | 762 | ||||
| Total Liabilities | $ | 98,591 | $ | 97,870 | ||
| Shareholders' Investment | 48,653 | 40,058 | ||||
| Total Liabilities and Shareholders' Investment | $ | 147,244 | $ | 137,928 | ||
| SELECTED FINANCIAL DATA | |||||
| June 30 | December 31 | ||||
| 2023 | 2022 | ||||
| Book Value per Common Share | $ | 44.81 | $ | 36.90 | |
| Total Shares Outstanding | 1,085,711 | 1,085,711 | |||
| Backlog | $ | 106,016 | $ | 132,829 | |
| CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT | |||||||||||||||||||
| Common Stock | Paid-in Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||
| Balance, December 31, 2022 | $ | 1,508 | $ | 9,708 | $ | 75,721 | $ | (10,787 | ) | $ | (36,092 | ) | $ | 40,058 | |||||
| Add (Deduct): | |||||||||||||||||||
| Net Income | 8,480 | 8,480 | |||||||||||||||||
| Other Comprehensive Income, Net of Tax | 441 | 441 | |||||||||||||||||
| Dividends, $.30 per Common Share | (326 | ) | (3260 | ) | |||||||||||||||
| Treasury Stock Acquisition | |||||||||||||||||||
| Balance, June 30, 2023 | $ | 1,508 | $ | 9,708 | $ | 83,875 | $ | (10,787 | ) | $ | (35,651 | ) | $ | 4,653 | |||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||
| Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |||||
| Operating Activities: | ||||||
| Net Income (Loss) | $ | 8,480 | $ | (1,271 | ) | |
| Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||
| Pension Contributions (Greater) Less than Expense | (818 | ) | (1,451 | ) | ||
| Bad Debt (Recovery) Expense | (19 | ) | 15 | |||
| Depreciation & Amortization | 3,027 | 3,028 | ||||
| (Gain) on Sales of Equipment | (33 | ) | (3 | ) | ||
| Change in Assets and Liabilities | ||||||
| (Inc) Dec in Accts and Notes Receivable | (3,854 | ) | 4,313 | |||
| (Inc) in Inventories | (3,444 | ) | (8,925 | ) | ||
| (Inc) in Prepayments | (643 | ) | (1,400 | ) | ||
| (Inc) in Net Investment in Sales-type leases | (69 | ) | (25 | ) | ||
| Dec in Other Assets | 307 | 251 | ||||
| Inc (Dec) in Accounts Payable | 1,330 | (441 | ) | |||
| Inc (Dec) in Accrued Income Tax | 1,911 | (1 | ) | |||
| Inc in Other Accrued Expenses | 4,919 | 1,689 | ||||
| (Dec) Inc in Advanced Billings | (4,647 | ) | 15,444 | |||
| (Dec) in Billings in Excess of Costs and Estimated Earnings | (2,927 | ) | (281 | ) | ||
| Inc in Lease Liability for Operating | - | 238 | ||||
| Inc in Lease Liability for Financing | 133 | - | ||||
| Principal payments of Lease Liability for Operating | (137 | ) | (218 | ) | ||
| Inc (Dec) in Other Long-Term Liabilities | 607 | (108 | ) | |||
| Net Cash Provided by Operating Activities | $ | 4,123 | $ | 10,854 | ||
| Investing Activities | ||||||
| Intangibles | (62 | ) | - | |||
| Proceeds from Sales of Equipment | 67 | 3 | ||||
| Additions to Property, Plant, and Equipment | (3,190 | ) | (3,828 | ) | ||
| Net Cash (Required) for Investing Activities | $ | (3,185 | ) | $ | (3,825 | ) |
| Financing Activities | ||||||
| Principal payments of Lease Liability for Financing | (98 | ) | (106 | ) | ||
| (Repayment) Proceeds of Short-Term Borrowings, Net | - | - | ||||
| (Repayment) of Long-Term Debt | (318 | ) | (760 | ) | ||
| Dividends Paid | (326 | ) | (326 | ) | ||
| Treasury Stock Acquisitions | - | (38 | ) | |||
| Net Cash (Required) for Financing Activities | $ | (742 | ) | $ | (1,230 | ) |
| Effect of Exchange Rate Changes | 535 | (990 | ) | |||
| Net Increase in Cash and Cash Equivalents | $ | 731 | $ | 4,809 | ||
| Cash and Cash Equivalents at Beginning of Year | 38,176 | 11,281 | ||||
| Cash and Cash Equivalents at End of Quarter | $ | 38,907 | $ | 16,090 | ||
PAUL MUELLER COMPANY
SUMMARIZED NOTES TO THE FINANCIAL STATEMENTS
(1) Results of Operations: (In thousands)
A. The chart below depicts the net revenue on a consolidating basis for the three months ended June 30.
| Three Months Ended June 30 | ||||
| Revenue | 2023 | 2022 | ||
| Domestic | ||||
| Mueller BV | ||||
| Eliminations | ( | ) | ( | ) |
| Net Revenue | ||||
The chart below depicts the net revenue on a consolidating basis for the six months ended June 30.
| Six Months Ended June 30 | ||||
| Revenue | 2023 | 2022 | ||
| Domestic | ||||
| Mueller BV | ||||
| Eliminations | ( | ) | ( | ) |
| Net Revenue | ||||
The chart below depicts the net revenue on a consolidating basis for the twelve months ended June 30.
| Twelve Months Ended June 30 | ||||
| Revenue | 2023 | 2022 | ||
| Domestic | ||||
| Mueller BV | ||||
| Eliminations | ( | ) | ( | ) |
| Net Revenue | ||||
The chart below depicts the net income (loss) on a consolidating basis for the three months ended June 30.
| Three Months Ended June 30 | ||||
| Net Income | 2023 | 2022 | ||
| Domestic | ||||
| Mueller BV | ( | ) | ||
| Eliminations | ( | ) | ||
| Net Income (Loss) | ( | ) | ||
The chart below depicts the net income (loss) on a consolidating basis for the six months ended June 30.
| Six Months Ended June 30 | ||||
| Net Income | 2023 | 2022 | ||
| Domestic | ( | ) | ||
| Mueller BV | ( | ) | ( | ) |
| Eliminations | ( | ) | ||
| Net Income (Loss) | ( | ) | ||
The chart below depicts the net income (loss) on a consolidating basis for the twelve months ended June 30.
| Twelve Months Ended June 30 | ||||
| Net Income | 2023 | 2022 | ||
| Domestic | ||||
| Mueller BV | ( | ) | ( | ) |
| Eliminations | ( | ) | ||
| Net Income Loss | ( | ) | ||
B. Key headlines for the quarter:
- In the US, the Company has performed well against a strong backlog which has contributed to excellent results for the first six months of the year.
- After Mueller B.V. announced organizational changes aimed to improve future results, Earnings Before Tax for May and June were improved with the second quarter of 2023 showing a profit of
$110,000 compared to a$386,000 loss the year before. - The standard plan terminations of the Company’s two domestic pension plans are moving forward. The Company is awaiting responses from the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC).
C. June 30, 2023 backlog is
D. Revenue is up from the previous year by
Net Income is up from the previous year by
E. The Company has pension plans covering domestic employees represented by a bargaining unit (Contract Plan) and employees not represented by a bargaining unit (Noncontract Plan). The participants discontinued accruing benefits in these plans in 2011. On November 1, 2022, and December 1, 2022, the Company announced that it had initiated a standard plan termination of the Contract Plan and Noncontract Plan, respectively. The Company applied to the IRS for its approval of the terminations on December 15, 2022. The Company gave notice of intent to terminate to the PBGC for the Contract Plan on June 27, 2023 and the Noncontract Plan on July 14, 2023. Assuming no questions or concerns from the PBGC, the Company has until the end of February 2024 to terminate the plans. The Company is still waiting on a response from the IRS. The Company is still hopeful to complete the termination process by the end of 2023, culminating in the affected participants receiving either a lump sum payment or a monthly annuity payment provided by an insurance company.
The underfunded status of the two plans combined as of December 31, 2022, was
F. The pre-tax results for the three months ended June 30, 2023, were unfavorably affected by a
G. The consolidated financials are affected by the euro to the dollar exchange rate when consolidating Mueller B.V., the Dutch subsidiary. The month-end euro to dollar exchange rate was 1.04 for June 2022, 1.07 for December 2022, and 1.09 for June 2023.
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 2022 annual report, available at www.paulmueller.com.
Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9346
kjeffries@paulmueller.com | https://paulmueller.com
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