MLI Mueller Industries Inc

Mueller Industries, Inc. (NYSE: MLI) today reported 2023 fourth quarter and full year results.

For the Fourth Quarter 2023 versus Fourth Quarter 2022:

• Net income:

 

$119.2 million vs $138.9 million, down 14.2%.

• Earnings before taxes:

 

$177.9 million vs $185.9 million, down 4.3%.

• Net sales:

 

$732.4 million vs $877.6 million, down 16.5%.

• Diluted EPS:

 

$1.05 vs $1.23, down 14.6%.

For the Full Year 2023 versus the Full Year 2022:

• Net income:

 

$602.9 million vs $658.3 million, down 8.4%.

• Earnings before taxes:

 

$845.2 million vs $876.0 million, down 3.5%.

• Net sales:

 

$3.4 billion vs $4.0 billion, down 14.1%.

• Diluted EPS:

 

$5.30 vs $5.82, down 8.9%.

Fourth Quarter*/Year-End Financial and Operating Commentary:

• The net sales decline of $145.2 million in the fourth quarter was primarily attributable to lower demand in most segments and markets, particularly those products that are predominantly used in new residential construction. Fluctuations in COMEX copper prices had a nominal impact on the change in net sales.
• The Company generated $174.3 million of cash from operations in the fourth quarter, and $672.8 million for the year.
• Year-end cash and short-term investments totaled $1.3 billion, and our current ratio is 6.4 to 1.
• During the quarter, we recorded a reserve of $11.6 million related to a pending legal matter at unconsolidated affiliate, Tecumseh Products Company, which is currently under appeal.
• We have yet to recognize any insurance recovery for the significant losses we have incurred as a result of the tornado that destroyed our copper fittings operations in Covington, Tennessee. We anticipate doing so sometime during the latter half of 2024, once the business is back and operational.

* For context, the Company’s current fourth quarter includes 13 weeks of results, as compared to the 14 weeks reported for the fourth quarter of 2022, the business’ most profitable fourth quarter on record.

Regarding the quarter performance and outlook, Greg Christopher, Mueller’s CEO said, “Our team performed exceptionally well on all fronts and delivered another quarter of excellent earnings and cash generation, despite reduced demand. Importantly, the structural changes we have made to improve gross margins are showing durability, and our manufacturing platform is well balanced for both current demand levels, as well as higher levels of demand when conditions improve.

Our business outlook is positive. There continues to be pent up demand for residential housing and needed investment in U.S. infrastructure. As rising interest rates and inflation begin to recede, demand will return as building construction activity is reignited.

Our strong cash flows and tremendous cash balance provide us the resources to execute on our strategic plans. Our top priorities are ensuring our operations are well capitalized to remain a low-cost producer, and pursuing acquisitions that strengthen our core and create greater growth avenues.

We are well positioned for long-term growth and to deliver superior returns to our shareholders.”

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 Year Ended

(In thousands, except per share data)

December 30, 2023

 

December 31, 2022

 

December 30, 2023

 

December 31, 2022

 

 

 

 

 

 

 

 

Net sales

$

732,377

 

 

$

877,581

 

 

$

3,420,345

 

 

$

3,982,455

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

536,383

 

 

 

620,800

 

 

 

2,433,511

 

 

 

2,864,862

 

Depreciation and amortization

 

9,250

 

 

 

10,738

 

 

 

39,954

 

 

 

43,731

 

Selling, general, and administrative expense

 

51,184

 

 

 

55,630

 

 

 

208,172

 

 

 

196,713

 

Gain on sale of businesses

 

—

 

 

 

—

 

 

 

(4,137

)

 

 

—

 

Impairment charges

 

324

 

 

 

—

 

 

 

6,258

 

 

 

—

 

Gain on insurance settlement

 

—

 

 

 

—

 

 

 

(19,466

)

 

 

—

 

 

 

 

 

 

 

 

 

Operating income

 

135,236

 

 

 

190,413

 

 

 

756,053

 

 

 

877,149

 

 

 

 

 

 

 

 

 

Interest expense

 

(713

)

 

 

(144

)

 

 

(1,221

)

 

 

(810

)

Interest income

 

13,642

 

 

 

4,838

 

 

 

38,208

 

 

 

6,457

 

Realized and unrealized gains on short-term investments

 

21,503

 

 

 

—

 

 

 

41,865

 

 

 

2,918

 

Gain on extinguishment of NMTC liability

 

7,534

 

 

 

—

 

 

 

7,534

 

 

 

—

 

Environmental income (expense)

 

202

 

 

 

349

 

 

 

(825

)

 

 

(1,298

)

Pension plan termination expense

 

—

 

 

 

(13,100

)

 

 

—

 

 

 

(13,100

)

Other income, net

 

471

 

 

 

3,592

 

 

 

3,618

 

 

 

4,715

 

 

 

 

 

 

 

 

 

Income before income taxes

 

177,875

 

 

 

185,948

 

 

 

845,232

 

 

 

876,031

 

 

 

 

 

 

 

 

 

Income tax expense

 

(46,440

)

 

 

(49,798

)

 

 

(220,762

)

 

 

(223,322

)

(Loss) income from unconsolidated affiliates, net of foreign tax

 

(12,139

)

 

 

4,085

 

 

 

(14,821

)

 

 

10,111

 

 

 

 

 

 

 

 

 

Consolidated net income

 

119,296

 

 

 

140,235

 

 

 

609,649

 

 

 

662,820

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

(58

)

 

 

(1,329

)

 

 

(6,752

)

 

 

(4,504

)

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

$

119,238

 

 

$

138,906

 

 

$

602,897

 

 

$

658,316

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

111,556

 

 

 

111,284

 

 

 

111,420

 

 

 

111,558

 

Effect of dilutive stock-based awards

 

2,425

 

 

 

1,434

 

 

 

2,242

 

 

 

1,552

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

113,981

 

 

 

112,718

 

 

 

113,662

 

 

 

113,110

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.07

 

 

$

1.25

 

 

$

5.41

 

 

$

5.90

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

1.05

 

 

$

1.23

 

 

$

5.30

 

 

$

5.82

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.150

 

 

$

0.125

 

 

$

0.600

 

 

$

0.500

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME, CONTINUED

(Unaudited)

 

 

For the Quarter Ended

 

For the Year Ended

(In thousands)

December 30, 2023

 

December 31, 2022

 

December 30, 2023

 

December 31, 2022

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

Piping Systems Segment

$

513,938

 

 

$

567,039

 

 

$

2,382,573

 

 

$

2,730,084

 

Industrial Metals Segment

 

125,363

 

 

 

146,322

 

 

 

577,875

 

 

 

644,689

 

Climate Segment

 

103,933

 

 

 

170,551

 

 

 

500,790

 

 

 

650,307

 

Elimination of intersegment sales

 

(10,857

)

 

 

(6,331

)

 

 

(40,893

)

 

 

(42,625

)

 

 

 

 

 

 

 

 

Net sales

$

732,377

 

 

$

877,581

 

 

$

3,420,345

 

 

$

3,982,455

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

Piping Systems Segment

$

113,634

 

 

$

131,056

 

 

$

569,239

 

 

$

671,062

 

Industrial Metals Segment

 

14,972

 

 

 

22,960

 

 

 

76,379

 

 

 

82,464

 

Climate Segment

 

25,963

 

 

 

53,158

 

 

 

171,864

 

 

 

188,067

 

Unallocated expenses

 

(19,333

)

 

 

(16,761

)

 

 

(61,429

)

 

 

(64,444

)

 

 

 

 

 

 

 

 

Operating income

$

135,236

 

 

$

190,413

 

 

$

756,053

 

 

$

877,149

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(In thousands)

December 30, 2023

 

December 31, 2022

ASSETS

 

 

 

Cash and cash equivalents

$

1,170,893

 

$

461,018

Short-term investments

 

98,146

 

 

 

217,863

 

Accounts receivable, net

 

351,561

 

 

 

380,352

 

Inventories

 

380,248

 

 

 

448,919

 

Other current assets

 

39,173

 

 

 

26,501

 

 

 

 

 

Total current assets

 

2,040,021

 

 

 

1,534,653

 

 

 

 

 

Property, plant, and equipment, net

 

385,165

 

 

 

379,950

 

Operating lease right-of-use assets

 

35,170

 

 

 

22,892

 

Other assets

 

298,945

 

 

 

304,904

 

 

 

 

 

 

$

2,759,301

 

 

$

2,242,399

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current portion of debt

$

796

 

 

$

811

 

Accounts payable

 

120,485

 

 

 

128,000

 

Current portion of operating lease liabilities

 

7,893

 

 

 

4,942

 

Other current liabilities

 

187,964

 

 

 

214,542

 

 

 

 

 

Total current liabilities

 

317,138

 

 

 

348,295

 

 

 

 

 

Long-term debt

 

185

 

 

 

1,218

 

Pension and postretirement liabilities

 

12,062

 

 

 

13,055

 

Environmental reserves

 

15,030

 

 

 

16,380

 

Deferred income taxes

 

19,134

 

 

 

16,258

 

Noncurrent operating lease liabilities

 

26,683

 

 

 

16,880

 

Other noncurrent liabilities

 

10,353

 

 

 

16,349

 

 

 

 

 

Total liabilities

 

400,585

 

 

 

428,435

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

2,337,445

 

 

 

1,790,914

 

Noncontrolling interests

 

21,271

 

 

 

23,050

 

 

 

 

 

Total equity

 

2,358,716

 

 

 

1,813,964

 

 

 

 

 

 

$

2,759,301

 

 

$

2,242,399

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

For the Year Ended

(In thousands)

December 30, 2023

 

December 31, 2022

 

 

 

 

Cash flows from operating activities

 

 

 

Consolidated net income

$

609,649

 

 

$

662,820

 

Reconciliation of consolidated net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

40,824

 

 

 

44,088

 

Stock-based compensation expense

 

23,131

 

 

 

17,801

 

Provision for doubtful accounts receivable

 

(84

)

 

 

323

 

Loss (income) from unconsolidated affiliates

 

14,821

 

 

 

(10,111

)

Gain on sale of businesses

 

(4,137

)

 

 

—

 

Unrealized gain on short-term investments

 

(24,765

)

 

 

—

 

Gain on disposals of assets

 

(1

)

 

 

(6,373

)

Insurance proceeds - noncapital related

 

9,854

 

 

 

1,646

 

Gain on sale of securities

 

(17,100

)

 

 

—

 

Gain on insurance settlement

 

(19,466

)

 

 

—

 

Impairment charges

 

6,258

 

 

 

—

 

Gain on extinguishment of NMTC liability

 

(7,534

)

 

 

—

 

Deferred income tax expense (benefit)

 

4,790

 

 

 

(3,880

)

Changes in assets and liabilities, net of effects of businesses acquired and sold:

 

 

 

Receivables

 

30,915

 

 

 

82,713

 

Inventories

 

67,903

 

 

 

(24,189

)

Other assets

 

(20,700

)

 

 

(8,971

)

Current liabilities

 

(40,606

)

 

 

(26,633

)

Other liabilities

 

(3,497

)

 

 

(7,564

)

Other, net

 

2,511

 

 

 

2,273

 

 

 

 

 

Net cash provided by operating activities

 

672,766

 

 

 

723,943

 

 

 

 

 

Cash flows from investing activities

 

 

 

Proceeds from sale of assets, net of cash transferred

 

279

 

 

 

7,850

 

Purchase of short-term investments

 

(106,231

)

 

 

(217,863

)

Proceeds from the sale of securities

 

55,454

 

 

 

—

 

Proceeds from the maturity of short-term investments

 

217,863

 

 

 

—

 

Capital expenditures

 

(54,025

)

 

 

(37,639

)

Insurance proceeds - capital related

 

24,646

 

 

 

3,354

 

Dividends from unconsolidated affiliates

 

1,093

 

 

 

2,295

 

Investments in unconsolidated affiliates

 

(3,999

)

 

 

—

 

 

 

 

 

Net cash provided by (used in) investing activities

 

135,080

 

 

 

(242,003

)

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(Unaudited)

 

 

For the Year Ended

(In thousands)

December 30, 2023

 

December 31, 2022

 

 

 

 

Cash flows from financing activities

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

(66,868

)

 

 

(55,787

)

Dividends paid to noncontrolling interests

 

(9,312

)

 

 

(7,248

)

Repayments of long-term debt

 

(241

)

 

 

(204

)

(Repayment) issuance of debt by consolidated joint ventures, net

 

(30

)

 

 

67

 

Repurchase of common stock

 

(19,303

)

 

 

(38,054

)

Net cash (used) received to settle stock-based awards

 

(8,755

)

 

 

(1,429

)

 

 

 

 

Net cash used in financing activities

 

(104,509

)

 

 

(102,655

)

 

 

 

 

Effect of exchange rate changes on cash

 

5,590

 

 

 

(4,365

)

 

 

 

 

Increase in cash, cash equivalents, and restricted cash

 

708,927

 

 

 

374,920

 

Cash, cash equivalents, and restricted cash at the beginning of the year

 

465,296

 

 

 

90,376

 

 

 

 

 

Cash, cash equivalents, and restricted cash at the end of the year

$

1,174,223

 

 

$

465,296

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240205683564/en/

Jeffrey A. Martin (901) 753-3226