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Mueller Industries, Inc. Reports Third Quarter 2023 Earnings

Mueller Industries, Inc. (NYSE: MLI) announces results for the third quarter of 2023. Comparisons are to the third quarter of 2022.

  • Operating Income of $181.0 million versus $205.2 million
  • Net Income of $132.7 million versus $154.5 million
  • Diluted EPS* of $1.17 versus $1.37
  • Net Sales of $819.8 million versus $944.8 million

(*adjusted retroactively to reflect the two-for-one stock split that took effect on October 20, 2023)

Third Quarter Financial and Operating Highlights:

  • The decrease in net sales was primarily attributable to reduced demand in our wholesale channel as distributors continued to rebalance inventory levels, particularly for products utilized in residential construction.
  • We sold a majority interest in our PEX plastic piping business on July 3, 2023. In the prior year quarter, this business contributed $11.2 million in net sales.
  • Net cash provided by operations was $247.7 million, and cash plus short-term investments were $1.10 billion at quarter end.
  • Our current ratio increased to 6.0 to 1.
  • On September 26, 2023, the Company’s Board of Directors declared a two-for-one stock split in the form of a 100% stock dividend. The record date for the stock split was October 6, 2023, and the dividend was distributed on stockholders on October 20, 2023.

Regarding the quarter performance and outlook, Greg Christopher, Mueller’s CEO said, “Our businesses have aptly adjusted to the expected tempering of demand in 2023 following the unrestrained demand levels that occurred in 2022. Nonetheless, business conditions at these levels are historically favorable. In addition, we are executing on a number of strategic investments and capacity rationalizations that we expect will continue to yield favorable cost improvements.”

Mr. Christopher continued, “We remain focused on growth and continue to actively identify, evaluate and pursue opportunities that will expand and strengthen our portfolio. Our balance sheet, particularly our cash position, is an excellent resource to support these initiatives.”

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 Nine Months Ended

(In thousands, except per share data)

 

September 30,

2023

 

September 24,

2022

 

September 30,

2023

 

September 24,

2022

 

 

 

 

 

 

 

 

 

Net sales

 

$

819,792

 

 

$

944,830

 

 

$

2,687,968

 

 

$

3,104,874

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

579,058

 

 

 

678,637

 

 

 

1,897,128

 

 

 

2,244,062

 

Depreciation and amortization

 

 

9,631

 

 

 

10,850

 

 

 

30,704

 

 

 

32,993

 

Selling, general, and administrative expense

 

 

48,295

 

 

 

50,178

 

 

 

156,988

 

 

 

146,590

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

(5,507

)

Gain on sale of business

 

 

(4,137

)

 

 

 

 

 

(4,137

)

 

 

 

Asset impairments

 

 

5,934

 

 

 

 

 

 

5,934

 

 

 

 

Gain on insurance settlement

 

 

 

 

 

 

 

 

(19,466

)

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

181,011

 

 

 

205,165

 

 

 

620,817

 

 

 

686,736

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(230

)

 

 

(361

)

 

 

(508

)

 

 

(666

)

Interest income

 

 

10,599

 

 

 

1,356

 

 

 

24,566

 

 

 

1,619

 

Unrealized (loss) gain on short-term investments

 

 

(2,371

)

 

 

 

 

 

18,449

 

 

 

 

Other (expense) income, net

 

 

(44

)

 

 

(326

)

 

 

4,033

 

 

 

2,394

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

188,965

 

 

 

205,834

 

 

 

667,357

 

 

 

690,083

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(50,843

)

 

 

(51,035

)

 

 

(174,322

)

 

 

(173,524

)

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

 

 

(2,413

)

 

 

1,014

 

 

 

(2,682

)

 

 

6,026

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

 

135,709

 

 

 

155,813

 

 

 

490,353

 

 

 

522,585

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

(3,000

)

 

 

(1,271

)

 

 

(6,694

)

 

 

(3,175

)

 

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

 

$

132,709

 

 

$

154,542

 

 

$

483,659

 

 

$

519,410

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share (1)

 

 

111,416

 

 

 

111,178

 

 

 

111,374

 

 

 

111,650

 

Effect of dilutive stock-based awards (1)

 

 

2,452

 

 

 

1670

 

 

 

2,182

 

 

 

1592

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share (1)

 

 

113,868

 

 

 

112,848

 

 

 

113,556

 

 

 

113,242

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (1)

 

$

1.19

 

 

$

1.39

 

 

$

4.34

 

 

$

4.65

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (1)

 

$

1.17

 

 

$

1.37

 

 

$

4.26

 

 

$

4.59

 

 

 

 

 

 

 

 

 

 

Dividends per share (1)

 

$

0.150

 

 

$

0.125

 

 

$

0.450

 

 

$

0.375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Adjusted retroactively to reflect the two-for-one stock split that occurred on October 6, 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME, CONTINUED

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended

 

For the Nine Months Ended

(In thousands)

 

September 30,

2023

 

September 24,

2022

 

September 30,

2023

 

September 24,

2022

 

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

568,151

 

 

$

634,808

 

 

$

1,868,635

 

 

$

2,163,045

 

Industrial Metals Segment

 

 

141,012

 

 

 

144,880

 

 

 

452,512

 

 

 

498,367

 

Climate Segment

 

 

119,949

 

 

 

174,650

 

 

 

396,857

 

 

 

479,756

 

Elimination of intersegment sales

 

 

(9,320

)

 

 

(9,508

)

 

 

(30,036

)

 

 

(36,294

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

819,792

 

 

$

944,830

 

 

$

2,687,968

 

 

$

3,104,874

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Piping Systems Segment

 

$

140,609

 

 

$

167,939

 

 

$

455,605

 

 

$

540,006

 

Industrial Metals Segment

 

 

16,221

 

 

 

12,077

 

 

 

61,407

 

 

 

59,504

 

Climate Segment

 

 

34,846

 

 

 

47,462

 

 

 

145,901

 

 

 

134,909

 

Unallocated income (expenses)

 

 

(10,665

)

 

 

(22,313

)

 

 

(42,096

)

 

 

(47,683

)

 

 

 

 

 

 

 

 

 

Operating income

 

$

181,011

 

 

$

205,165

 

 

$

620,817

 

 

$

686,736

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

(Unaudited)

 

 

(In thousands)

 

September 30,

2023

 

December 31,

2022

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

979,790

 

$

461,018

Short-term investments

 

 

124,680

 

 

217,863

Accounts receivable, net

 

 

409,187

 

 

380,352

Inventories

 

 

391,740

 

 

448,919

Other current assets

 

 

31,373

 

 

26,501

 

 

 

 

 

Total current assets

 

 

1,936,770

 

 

1,534,653

 

 

 

 

 

Property, plant, and equipment, net

 

 

376,678

 

 

379,950

Operating lease right-of-use assets

 

 

33,898

 

 

22,892

Other assets

 

 

316,395

 

 

304,904

 

 

 

 

 

Total assets

 

$

2,663,741

 

$

2,242,399

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current portion of debt

 

$

556

 

$

811

Accounts payable

 

 

141,930

 

 

128,000

Current portion of operating lease liabilities

 

 

7,431

 

 

4,942

Other current liabilities

 

 

172,588

 

 

214,542

 

 

 

 

 

Total current liabilities

 

 

322,505

 

 

348,295

 

 

 

 

 

Long-term debt

 

 

1,301

 

 

1,218

Pension and postretirement liabilities

 

 

12,928

 

 

13,055

Environmental reserves

 

 

15,420

 

 

16,380

Deferred income taxes

 

 

18,502

 

 

16,258

Noncurrent operating lease liabilities

 

 

25,793

 

 

16,880

Other noncurrent liabilities

 

 

16,063

 

 

16,349

 

 

 

 

 

Total liabilities

 

 

412,512

 

 

428,435

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

 

2,221,241

 

 

1,790,914

Noncontrolling interests

 

 

29,988

 

 

23,050

 

 

 

 

 

Total equity

 

 

2,251,229

 

 

1,813,964

 

 

 

 

 

Total liabilities and equity

 

$

2,663,741

 

$

2,242,399

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

For the Nine Months Ended

(In thousands)

 

September 30,

2023

 

September 24,

2022

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Consolidated net income

 

$

490,353

 

 

$

522,585

 

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

 

 

 

 

Depreciation and amortization

 

 

31,053

 

 

 

33,261

 

Stock-based compensation expense

 

 

17,268

 

 

 

12,254

 

Provision for doubtful accounts receivable

 

 

(63

)

 

 

327

 

Loss (income) from unconsolidated affiliates

 

 

2,682

 

 

 

(6,026

)

Insurance proceeds - noncapital related

 

 

9,854

 

 

 

1,646

 

Gain on disposals of properties

 

 

(106

)

 

 

(7,107

)

Gain on sale of business

 

 

(4,137

)

 

 

 

Unrealized gain on short-term investments

 

 

(18,449

)

 

 

 

Impairment charges

 

 

5,934

 

 

 

 

Gain on insurance settlement

 

 

(19,466

)

 

 

 

Deferred income tax expense

 

 

3,803

 

 

 

226

 

Changes in assets and liabilities, net of effects of business sold:

 

 

 

 

Receivables

 

 

(36,855

)

 

 

15,741

 

Inventories

 

 

53,372

 

 

 

(33,768

)

Other assets

 

 

(12,897

)

 

 

(8,574

)

Current liabilities

 

 

(25,503

)

 

 

(5,331

)

Other liabilities

 

 

(1,828

)

 

 

(7,399

)

Other, net

 

 

3,475

 

 

 

(923

)

 

 

 

 

 

Net cash provided by operating activities

 

 

498,490

 

 

 

516,912

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Capital expenditures

 

 

(39,469

)

 

 

(29,555

)

Investments in unconsolidated affiliates

 

 

(3,999

)

 

 

 

Insurance proceeds - capital related

 

 

24,646

 

 

 

3,354

 

Purchase of short-term investments

 

 

(106,231

)

 

 

 

Proceeds from the maturity of short-term investments

 

 

217,863

 

 

 

 

Proceeds from sales of properties

 

 

214

 

 

 

7,841

 

Dividends from unconsolidated affiliates

 

 

1,093

 

 

 

2,091

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

 

94,117

 

 

 

(16,269

)

 

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

For the Nine Months Ended

(In thousands)

 

September 30,

2023

 

September 24,

2022

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

 

(50,133

)

 

 

(41,876

)

Repurchase of common stock

 

 

(19,303

)

 

 

(38,054

)

Repayments of debt

 

 

(185

)

 

 

(148

)

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

 

 

(265

)

 

 

406

 

Net cash used to settle stock-based awards

 

 

(9,113

)

 

 

(1,619

)

 

 

 

 

 

Net cash used in financing activities

 

 

(78,999

)

 

 

(81,291

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

2,312

 

 

 

(10,310

)

 

 

 

 

 

Increase in cash, cash equivalents, and restricted cash

 

 

515,920

 

 

 

409,042

 

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

 

 

465,296

 

 

 

90,376

 

 

 

 

 

 

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

 

$

981,216

 

 

$

499,418

 

 

Contacts

Jeffrey A. Martin

(901) 753-3226

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