COLLIERVILLE, Tenn.--(BUSINESS WIRE)--Mueller Industries, Inc. (NYSE: MLI) today reported 2022 fourth quarter and full year results.
For the Fourth Quarter 2022 versus Fourth Quarter 2021:
- Operating income: $190.4 million vs $172.1 million, up 10.6%.
- Net sales: $877.6 million vs $956.4 million, down 8.2%.
- Net income: $138.9 million vs $125.6 million, up 10.6%.
- Diluted EPS: $2.46 vs $2.21, up 11.3%.
For the Full Year 2022 versus the Full Year 2021:
- Operating income: $877.1 million vs $655.8 million, up 33.7%.
- Net sales: $4.0 billion vs $3.8 billion, up 5.7%.
- Net income: $658.3 million vs $468.5 million, up 40.5%.
- Diluted EPS: $11.64 vs $8.25, up 41.1%.
Fourth Quarter Financial and Operating Commentary
- The average price of copper was $3.66 per pound, a 16.4 percent decline as compared with the fourth quarter of 2021.
- Net sales declined $78.8 million, reflecting the impact of lower copper prices as well as an 11 percent reduction in unit volumes across our mill businesses, the largest of which emanated from our international operations. These reductions were offset by a 22 percent increase in net sales from our higher value added businesses, particularly in our climate segment.
- The Company recognized a $13.1 million expense related to its complete withdrawal from a multi-employer pension plan, thereby eliminating a significant long term financial risk.
- The Company generated $207 million of cash from operations in the fourth quarter, $723.9 million for the year and cash and short-term investments totaled $678.9 million at year end. The Company’s current ratio is 4 to 1.
Operating Highlights and Outlook:
Greg Christopher, CEO, commented, “We concluded 2022 by delivering the best fourth quarter of operating and net income in the Company’s history. Not only have we reinvested to be a low cost producer, but we have also pursued acquisitions that both strengthen our market leading positions in core products and expand our portfolio into higher value added content. In tandem, these strategic actions have improved our gross margins to levels we believe are more appropriate for the industries we serve.
Economic activity as a whole began to temper during the second half of 2022 amidst rising interest rates, inflationary pressures, and global instability. Beyond that, the destocking of inventories and normalization of supply chains exerted downward impacts.
Notwithstanding, we head into 2023 with an optimistic outlook. Although we anticipate some decline in U.S. residential building markets as compared with 2022, we also believe that household formations will remain underserved by the housing supply. As such, demand levels should remain at healthy levels relative to industry capacity. At the same time, we maintain continued backlogs in other critical markets including commercial construction, refrigeration, HVAC and transportation. Internationally, we believe that following a difficult 2022, market conditions may be bottoming out, thereby positioning our businesses for a rebound.
This was another record year of financial performance for our Company, but we still see many opportunities ahead of us. Importantly, our strong performance has enabled us to build a war chest to fund continued investments to improve our low cost position and support our bold plans for growth.”
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 31,
|
|
December 25,
|
|
December 31,
|
|
December 25,
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
877,581 |
|
|
$ |
956,357 |
|
|
$ |
3,982,455 |
|
|
$ |
3,769,345 |
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
620,800 |
|
|
|
726,594 |
|
|
|
2,864,862 |
|
|
|
2,938,989 |
|
Depreciation and amortization |
|
10,738 |
|
|
|
11,633 |
|
|
|
43,731 |
|
|
|
45,390 |
|
Selling, general, and administrative expense |
|
55,630 |
|
|
|
48,729 |
|
|
|
203,086 |
|
|
|
184,052 |
|
Gain on sale of businesses |
|
— |
|
|
|
(3,001 |
) |
|
|
— |
|
|
|
(57,760 |
) |
Gain on sale of assets, net |
|
— |
|
|
|
— |
|
|
|
(6,373 |
) |
|
|
— |
|
Impairment charges |
|
— |
|
|
|
261 |
|
|
|
— |
|
|
|
2,829 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
190,413 |
|
|
|
172,141 |
|
|
|
877,149 |
|
|
|
655,845 |
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(144 |
) |
|
|
(258 |
) |
|
|
(810 |
) |
|
|
(7,709 |
) |
Environmental expense |
|
349 |
|
|
|
(982 |
) |
|
|
(1,298 |
) |
|
|
(5,053 |
) |
Redemption premium |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,674 |
) |
Pension plan termination expense |
|
(13,100 |
) |
|
|
— |
|
|
|
(13,100 |
) |
|
|
— |
|
Other income, net |
|
8,430 |
|
|
|
947 |
|
|
|
14,090 |
|
|
|
3,730 |
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes |
|
185,948 |
|
|
|
171,848 |
|
|
|
876,031 |
|
|
|
641,139 |
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense |
|
(49,798 |
) |
|
|
(44,862 |
) |
|
|
(223,322 |
) |
|
|
(165,858 |
) |
Income (loss) from unconsolidated affiliates, net of foreign tax |
|
4,085 |
|
|
|
(288 |
) |
|
|
10,111 |
|
|
|
(157 |
) |
|
|
|
|
|
|
|
|
||||||||
Consolidated net income |
|
140,235 |
|
|
|
126,698 |
|
|
|
662,820 |
|
|
|
475,124 |
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling interests |
|
(1,329 |
) |
|
|
(1,097 |
) |
|
|
(4,504 |
) |
|
|
(6,604 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Mueller Industries, Inc. |
$ |
138,906 |
|
|
$ |
125,601 |
|
|
$ |
658,316 |
|
|
$ |
468,520 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares for basic earnings per share |
|
55,642 |
|
|
|
56,104 |
|
|
|
55,779 |
|
|
|
56,011 |
|
Effect of dilutive stock-based awards |
|
717 |
|
|
|
796 |
|
|
|
776 |
|
|
|
787 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted weighted average shares for diluted earnings per share |
|
56,359 |
|
|
|
56,900 |
|
|
|
56,555 |
|
|
|
56,798 |
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share |
$ |
2.50 |
|
|
$ |
2.24 |
|
|
$ |
11.80 |
|
|
$ |
8.36 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share |
$ |
2.46 |
|
|
$ |
2.21 |
|
|
$ |
11.64 |
|
|
$ |
8.25 |
|
|
|
|
|
|
|
|
|
||||||||
Dividends per share |
$ |
0.25 |
|
|
$ |
0.13 |
|
|
$ |
1.00 |
|
|
$ |
0.52 |
|
|
For the Quarter Ended |
|
For the Year Ended |
||||||||||||
(In thousands) |
December 31,
|
|
December 25,
|
|
December 31,
|
|
December 25,
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Summary Segment Data: |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net sales: |
|
|
|
|
|
|
|
||||||||
Piping Systems Segment |
$ |
567,039 |
|
|
$ |
652,466 |
|
|
$ |
2,730,084 |
|
|
$ |
2,600,030 |
|
Industrial Metals Segment |
|
146,322 |
|
|
|
176,226 |
|
|
|
644,689 |
|
|
|
703,363 |
|
Climate Segment |
|
170,551 |
|
|
|
130,428 |
|
|
|
650,307 |
|
|
|
495,414 |
|
Elimination of intersegment sales |
|
(6,331 |
) |
|
|
(2,763 |
) |
|
|
(42,625 |
) |
|
|
(29,462 |
) |
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
877,581 |
|
|
$ |
956,357 |
|
|
$ |
3,982,455 |
|
|
$ |
3,769,345 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income: |
|
|
|
|
|
|
|
||||||||
Piping Systems Segment |
$ |
131,056 |
|
|
$ |
142,482 |
|
|
$ |
671,062 |
|
|
$ |
486,287 |
|
Industrial Metals Segment |
|
22,960 |
|
|
|
27,077 |
|
|
|
82,464 |
|
|
|
85,475 |
|
Climate Segment |
|
53,158 |
|
|
|
21,757 |
|
|
|
188,067 |
|
|
|
85,536 |
|
Unallocated expenses |
|
(16,761 |
) |
|
|
(19,175 |
) |
|
|
(64,444 |
) |
|
|
(1,453 |
) |
|
|
|
|
|
|
|
|
||||||||
Operating income |
$ |
190,413 |
|
|
$ |
172,141 |
|
|
$ |
877,149 |
|
|
$ |
655,845 |
|
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||
(In thousands) |
December 31,
|
|
December 25
|
||
ASSETS |
|
|
|
||
Cash and cash equivalents |
$ |
461,018 |
|
$ |
87,924 |
Short-term investments |
|
217,863 |
|
|
— |
Accounts receivable, net |
|
380,352 |
|
|
471,859 |
Inventories |
|
448,919 |
|
|
430,244 |
Other current assets |
|
26,501 |
|
|
28,976 |
|
|
|
|
||
Total current assets |
|
1,534,653 |
|
|
1,019,003 |
|
|
|
|
||
Property, plant, and equipment, net |
|
379,950 |
|
|
385,562 |
Operating lease right-of-use assets |
|
22,892 |
|
|
23,510 |
Other assets |
|
304,904 |
|
|
300,861 |
|
|
|
|
||
|
$ |
2,242,399 |
|
$ |
1,728,936 |
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
Current portion of debt |
$ |
811 |
|
$ |
811 |
Accounts payable |
|
128,000 |
|
|
180,793 |
Current portion of operating lease liabilities |
|
4,942 |
|
|
6,015 |
Other current liabilities |
|
214,542 |
|
|
194,820 |
|
|
|
|
||
Total current liabilities |
|
348,295 |
|
|
382,439 |
|
|
|
|
||
Long-term debt |
|
1,218 |
|
|
1,064 |
Pension and postretirement liabilities |
|
13,055 |
|
|
17,533 |
Environmental reserves |
|
16,380 |
|
|
17,678 |
Deferred income taxes |
|
16,258 |
|
|
14,347 |
Noncurrent operating lease liabilities |
|
16,880 |
|
|
17,099 |
Other noncurrent liabilities |
|
16,349 |
|
|
21,813 |
|
|
|
|
||
Total liabilities |
|
428,435 |
|
|
471,973 |
|
|
|
|
||
Total Mueller Industries, Inc. stockholders’ equity |
|
1,790,914 |
|
|
1,222,118 |
Noncontrolling interests |
|
23,050 |
|
|
34,845 |
|
|
|
|
||
Total equity |
|
1,813,964 |
|
|
1,256,963 |
|
|
|
|
||
|
$ |
2,242,399 |
|
$ |
1,728,936 |
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||
|
For the Year Ended |
||||||
(In thousands) |
December 31,
|
|
December 25,
|
||||
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
||||
Consolidated net income |
$ |
662,820 |
|
|
$ |
475,124 |
|
Reconciliation of consolidated net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
44,088 |
|
|
|
45,655 |
|
Stock-based compensation expense |
|
17,801 |
|
|
|
9,822 |
|
Provision for doubtful accounts receivable |
|
323 |
|
|
|
1,216 |
|
(Income) loss from unconsolidated affiliates |
|
(10,111 |
) |
|
|
157 |
|
Gain on sale of businesses |
|
— |
|
|
|
(57,760 |
) |
(Gain) loss on disposals of assets |
|
(6,373 |
) |
|
|
(769 |
) |
Redemption premium |
|
— |
|
|
|
5,674 |
|
Insurance proceeds - noncapital related |
|
1,646 |
|
|
|
— |
|
Impairment charges |
|
— |
|
|
|
2,829 |
|
Deferred income tax (benefit) expense |
|
(3,880 |
) |
|
|
7,413 |
|
Changes in assets and liabilities, net of effects of businesses acquired and sold: |
|
|
|
||||
Receivables |
|
82,713 |
|
|
|
(124,708 |
) |
Inventories |
|
(24,189 |
) |
|
|
(119,514 |
) |
Other assets |
|
(8,971 |
) |
|
|
919 |
|
Current liabilities |
|
(26,633 |
) |
|
|
73,755 |
|
Other liabilities |
|
(7,564 |
) |
|
|
(5,467 |
) |
Other, net |
|
2,273 |
|
|
|
(2,645 |
) |
|
|
|
|
||||
Net cash provided by operating activities |
|
723,943 |
|
|
|
311,701 |
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
||||
Proceeds from sale of assets, net of cash transferred |
|
7,850 |
|
|
|
2,302 |
|
Purchase of short-term investments |
|
(217,863 |
) |
|
|
— |
|
Proceeds from sale of business, net of cash sold |
|
— |
|
|
|
81,884 |
|
Acquisition of businesses, net of cash acquired |
|
— |
|
|
|
(30,206 |
) |
Capital expenditures |
|
(37,639 |
) |
|
|
(31,833 |
) |
Insurance proceeds - capital related |
|
3,354 |
|
|
|
— |
|
Dividends from unconsolidated affiliates |
|
2,295 |
|
|
|
— |
|
Payment received for (issuance of) notes receivable |
|
— |
|
|
|
8,539 |
|
Investments in unconsolidated affiliates |
|
— |
|
|
|
(1,613 |
) |
|
|
|
|
||||
Net cash (used in) provided by investing activities |
|
(242,003 |
) |
|
|
29,073 |
|
|
|||||||
|
For the Year Ended |
||||||
(In thousands) |
December 31,
|
|
December 25,
|
||||
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
||||
Dividends paid to stockholders of Mueller Industries, Inc. |
|
(55,787 |
) |
|
|
(29,137 |
) |
Dividends paid to noncontrolling interests |
|
(7,248 |
) |
|
|
(9,722 |
) |
Issuance of long-term debt |
|
— |
|
|
|
595,000 |
|
Repayments of long-term debt |
|
(204 |
) |
|
|
(920,610 |
) |
Issuance (repayment) of debt by consolidated joint ventures, net |
|
67 |
|
|
|
(5,113 |
) |
Repurchase of common stock |
|
(38,054 |
) |
|
|
(4,864 |
) |
Payment of contingent consideration |
|
— |
|
|
|
(1,250 |
) |
Net cash (used) received to settle stock-based awards |
|
(1,429 |
) |
|
|
85 |
|
Debt issuance costs |
|
— |
|
|
|
(1,111 |
) |
|
|
|
|
||||
Net cash used in financing activities |
|
(102,655 |
) |
|
|
(376,722 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
(4,365 |
) |
|
|
(1,052 |
) |
|
|
|
|
||||
Increase (decrease) in cash, cash equivalents, and restricted cash |
|
374,920 |
|
|
|
(37,000 |
) |
Cash, cash equivalents, and restricted cash at the beginning of the year |
|
90,376 |
|
|
|
127,376 |
|
|
|
|
|
||||
Cash, cash equivalents, and restricted cash at the end of the year |
$ |
465,296 |
|
|
$ |
90,376 |
|
