MLI

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, 2022

 

December 25, 2021

 

December 31, 2022

 

December 25, 2021

 

 

 

 

 

 

 

 

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, 2022

 

December 25, 2021

 

December 31, 2022

 

December 25, 2021

 

 

 

 

 

 

 

 

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, 2022

 

December 25 2021

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, 2022

 

December 25, 2021

 

 

 

 

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, 2022

 

December 25, 2021

 

 

 

 

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

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230207005332/en/

Jeffrey A. Martin (901) 753-3226