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Mueller Industries, Inc. Reports Fiscal 2021 Fourth Quarter and Full Year Results

Mueller Industries, Inc. (NYSE: MLI) today reported 2021 fourth quarter and full year results.

Fourth Quarter metrics:

  • Operating income was $172.1 million, up 165%.
  • Net sales were $956.4 million, up 42%.
  • Net income was $125.6 million versus $36.4 million.
  • Diluted EPS was $2.21 versus $0.64.
  • Cash provided by operations was $130.2 million.

Full Year metrics:

  • Operating income was $655.8 million, up 167%.
  • Net sales were $3.8 billion, up 57%.
  • Net income was $468.5 million versus $139.5 million.
  • Diluted EPS was $8.25 versus $2.47.
  • Cash provided by operations was $311.7 million.

*Comparisons to prior year periods

Quarter Commentary

  • The average price of copper was 34.3 percent higher than in the fourth quarter of 2020.
  • Net sales growth was driven by volume growth in our US businesses, higher prices primarily attributable to the rise in COMEX copper, and the contributions of our recently acquired H&C Flex business, which is recorded under our Climate segment.
  • The Company recorded a loss of $1.8 million on its investment in Tecumseh during the quarter, compared to income of $10.0 million in the previous year quarter, which included a pre-tax gain of $11.6 million from a land sale.
  • During the quarter we acquired the majority ownership of the Mueller Middle East copper tube mill in Bahrain. This mill is geographically well positioned to serve markets in the Middle East and Northern Africa.

Full Year Commentary

  • The results included $57.8 million of gains from the sale of businesses.
  • The average price of copper was 51.6 percent higher than in 2020.
  • Net sales growth of $1.4 billion was driven by volume growth in almost every business, higher selling prices primarily resulting from the rise in COMEX copper, and full year reported sales of acquired businesses.
  • During the year, $330.7 million of debt was repaid leaving a balance of $1.9 million at year-end. The Company’s $400.0 million credit facility is undrawn and cash and cash equivalents totaled $87.9 million.

Operating Highlights and Outlook:

Greg Christopher, CEO, commented, “Our exceptional results in the fourth quarter capped our second consecutive year of record earnings. The strength our businesses exhibited throughout the year was fueled by solid demand and outstanding operational execution by our team in the face of significant inflationary pressures, supply chain disruptions, and extensive labor shortages.”

With regard to the outlook, he added, “We anticipate continued momentum in the building construction and industrial markets in 2022, both important end markets for our businesses. Mueller is well positioned to build upon its success as we start the new year with healthy order books and our manufacturing facilities operating at highly efficient levels.”

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 25,

2021

 

December 26,

2020

 

December 25,

2021

 

December 26,

2020

 

 

 

 

 

 

 

 

Net sales

$

956,357

 

 

$

675,851

 

 

$

3,769,345

 

 

$

2,398,043

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

726,594

 

 

 

553,507

 

 

 

2,938,989

 

 

 

1,966,161

 

Depreciation and amortization

 

11,633

 

 

 

11,955

 

 

 

45,390

 

 

 

44,843

 

Selling, general, and administrative expense

 

48,729

 

 

 

44,649

 

 

 

184,052

 

 

 

159,483

 

Gain on sale of businesses

 

(3,001

)

 

 

 

 

 

(57,760

)

 

 

 

Litigation settlement, net

 

 

 

 

 

 

 

 

 

 

(22,053

)

Impairment charges

 

261

 

 

 

736

 

 

 

2,829

 

 

 

3,771

 

 

 

 

 

 

 

 

 

Operating income

 

172,141

 

 

 

65,004

 

 

 

655,845

 

 

 

245,838

 

 

 

 

 

 

 

 

 

Interest expense

 

(258

)

 

 

(4,010

)

 

 

(7,709

)

 

 

(19,247

)

Environmental expense

 

(982

)

 

 

(3,488

)

 

 

(5,053

)

 

 

(4,454

)

Redemption premium

 

 

 

 

 

 

 

(5,674

)

 

 

 

Pension plan termination expense

 

 

 

 

(17,835

)

 

 

 

 

 

(17,835

)

Other income, net

 

947

 

 

 

287

 

 

 

3,730

 

 

 

4,887

 

 

 

 

 

 

 

 

 

Income before income taxes

 

171,848

 

 

 

39,958

 

 

 

641,139

 

 

 

209,189

 

 

 

 

 

 

 

 

 

Income tax expense

 

(44,862

)

 

 

(12,698

)

 

 

(165,858

)

 

 

(55,321

)

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

 

(288

)

 

 

9,994

 

 

 

(157

)

 

 

(10,219

)

 

 

 

 

 

 

 

 

Consolidated net income

 

126,698

 

 

 

37,254

 

 

 

475,124

 

 

 

143,649

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

(1,097

)

 

 

(834

)

 

 

(6,604

)

 

 

(4,156

)

 

 

 

 

 

 

 

 

Net income attributable to Mueller Industries, Inc.

$

125,601

 

 

$

36,420

 

 

$

468,520

 

 

$

139,493

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

56,104

 

 

 

55,869

 

 

 

56,011

 

 

 

55,821

 

Effect of dilutive stock-based awards

 

796

 

 

 

673

 

 

 

787

 

 

 

569

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

56,900

 

 

 

56,542

 

 

 

56,798

 

 

 

56,390

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

2.24

 

 

$

0.65

 

 

$

8.36

 

 

$

2.50

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

2.21

 

 

$

0.64

 

 

$

8.25

 

 

$

2.47

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.13

 

 

$

0.10

 

 

$

0.52

 

 

$

0.40

 

 

 

 

 

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME, CONTINUED

(Unaudited)

 

 

For the Quarter Ended

 

For the Year Ended

(In thousands)

December 25,

2021

 

December 26,

2020

 

December 25,

2021

 

December 26,

2020

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

Piping Systems Segment

$

652,466

 

 

$

454,535

 

 

$

2,600,030

 

 

$

1,583,002

 

Industrial Metals Segment

 

176,226

 

 

 

133,507

 

 

 

703,363

 

 

 

472,159

 

Climate Segment

 

130,428

 

 

 

93,148

 

 

 

495,414

 

 

 

370,131

 

Elimination of intersegment sales

 

(2,763

)

 

 

(5,339

)

 

 

(29,462

)

 

 

(27,249

)

 

 

 

 

 

 

 

 

Net sales

$

956,357

 

 

$

675,851

 

 

$

3,769,345

 

 

$

2,398,043

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

Piping Systems Segment

$

142,482

 

 

$

43,106

 

 

$

486,287

 

 

$

165,719

 

Industrial Metals Segment

 

27,077

 

 

 

15,662

 

 

 

85,475

 

 

 

54,065

 

Climate Segment

 

21,757

 

 

 

13,279

 

 

 

85,536

 

 

 

56,802

 

Unallocated expenses

 

(19,175

)

 

 

(7,043

)

 

 

(1,453

)

 

 

(30,748

)

 

 

 

 

 

 

 

 

Operating income

$

172,141

 

 

$

65,004

 

 

$

655,845

 

 

$

245,838

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

December 25,

2021

 

December 26,

2020

ASSETS

 

 

 

Cash and cash equivalents

$

87,924

 

$

119,075

Accounts receivable, net

 

471,859

 

 

357,532

Inventories

 

430,244

 

 

315,002

Other current assets

 

28,976

 

 

33,752

 

 

 

 

Total current assets

 

1,019,003

 

 

825,361

 

 

 

 

Property, plant, and equipment, net

 

385,562

 

 

376,572

Operating lease right-of-use assets

 

23,510

 

 

29,301

Other assets

 

300,861

 

 

297,334

 

 

 

 

 

$

1,728,936

 

$

1,528,568

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current portion of debt

$

811

 

$

41,283

Accounts payable

 

180,793

 

 

147,741

Current portion of operating lease liabilities

 

6,015

 

 

6,259

Other current liabilities

 

194,820

 

 

144,360

 

 

 

 

Total current liabilities

 

382,439

 

 

339,643

 

 

 

 

Long-term debt

 

1,064

 

 

286,593

Pension and postretirement liabilities

 

17,533

 

 

26,841

Environmental reserves

 

17,678

 

 

21,256

Deferred income taxes

 

14,347

 

 

16,842

Noncurrent operating lease liabilities

 

17,099

 

 

21,602

Other noncurrent liabilities

 

21,813

 

 

14,731

 

 

 

 

Total liabilities

 

471,973

 

 

727,508

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

1,222,118

 

 

776,745

Noncontrolling interests

 

34,845

 

 

24,315

 

 

 

 

Total equity

 

1,256,963

 

 

801,060

 

 

 

 

 

$

1,728,936

 

$

1,528,568

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

For the Year Ended

(In thousands)

December 25,

2021

 

December 26,

2020

 

 

 

 

Cash flows from operating activities

 

 

 

Consolidated net income

$

475,124

 

 

$

143,649

 

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

 

 

 

Depreciation and amortization

 

45,655

 

 

 

45,162

 

Stock-based compensation expense

 

9,822

 

 

 

8,570

 

Provision for doubtful accounts receivable

 

1,216

 

 

 

1,208

 

Loss from unconsolidated affiliates

 

157

 

 

 

10,219

 

Non-cash pension plan termination expense

 

 

 

 

11,642

 

Gain on sale of businesses

 

(57,760

)

 

 

 

(Gain) loss on disposals of assets

 

(769

)

 

 

132

 

Redemption premium

 

5,674

 

 

 

 

Impairment charges

 

2,829

 

 

 

3,771

 

Deferred income tax expense (benefit)

 

7,413

 

 

 

(4,046

)

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

 

 

 

Receivables

 

(124,708

)

 

 

(76,404

)

Inventories

 

(119,514

)

 

 

5,207

 

Other assets

 

919

 

 

 

20,609

 

Current liabilities

 

73,755

 

 

 

74,097

 

Other liabilities

 

(5,467

)

 

 

(1,142

)

Other, net

 

(2,645

)

 

 

2,399

 

 

 

 

 

Net cash provided by operating activities

 

311,701

 

 

 

245,073

 

 

 

 

 

Cash flows from investing activities

 

 

 

Proceeds from sale of assets, net of cash transferred

 

2,302

 

 

 

181

 

Proceeds from sale of business, net of cash sold

 

81,884

 

 

 

 

Acquisition of businesses, net of cash acquired

 

(30,206

)

 

 

(72,648

)

Capital expenditures

 

(31,833

)

 

 

(43,885

)

Payment received for (issuance of) notes receivable

 

8,539

 

 

 

(9,270

)

Investments in unconsolidated affiliates

 

(1,613

)

 

 

 

Net cash provided by (used in) investing activities

 

29,073

 

 

 

(125,622

)

 

 

 

 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(Unaudited)

 

For the Year Ended

(In thousands)

December 25,

2021

 

December 26,

2020

 

 

 

 

Cash flows from financing activities

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

(29,137

)

 

 

(22,341

)

Dividends paid to noncontrolling interests

 

(9,722

)

 

 

 

Issuance of long-term debt

 

595,000

 

 

 

190,038

 

Repayments of long-term debt

 

(920,610

)

 

 

(246,898

)

Repayment of debt by consolidated joint ventures, net

 

(5,113

)

 

 

(259

)

Repurchase of common stock

 

(4,864

)

 

 

(5,574

)

Payment of contingent consideration

 

(1,250

)

 

 

(7,000

)

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

 

85

 

 

 

(230

)

Debt issuance costs

 

(1,111

)

 

 

 

 

 

 

 

Net cash used in financing activities

 

(376,722

)

 

 

(92,264

)

 

 

 

 

Effect of exchange rate changes on cash

 

(1,052

)

 

 

2,147

 

 

 

 

 

(Decrease) increase in cash, cash equivalents, and restricted cash

 

(37,000

)

 

 

29,334

 

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

 

127,376

 

 

 

98,042

 

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

$

90,376

 

 

$

127,376

 

 

 

Contacts

Jeffrey A. Martin

(901) 753-3226

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