Date of Report (Date of earliest event reported): | July 25, 2017 |
Delaware | 1-6770 | 25-0790410 |
(State or other | (Commission File | (IRS Employer |
jurisdiction of | Number) | Identification No.) |
incorporation) |
8285 Tournament Drive, Suite 150 Memphis, Tennessee | 38125 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: | (901) 753-3200 |
Registrant’s Former Name or Address, if changed since last report: | N/A |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
99.1 | Press release, dated July 25, 2017 reporting second quarter 2017 earnings. |
MUELLER INDUSTRIES, INC. | |||
By: | /s/ JEFFREY A. MARTIN | ||
Name: | Jeffrey A. Martin | ||
Title: | Chief Financial Officer and Treasurer | ||
Date: July 25, 2017 |
Exhibit No. | Description |
99.1 | Press release, dated July 25, 2017. |
• | The average price of copper was 21 percent (45 cents per pound) higher compared with the same period of 2016. |
• | During the quarter, Mueller sold its 50.5% share of the MXR China tube mill. The gain from the sale was more than offset by one-time expenses related to startup costs at the Cedar City, Utah tube mill and the press relocation to the Fulton, Mississippi tube mill. |
• | Interest expense for the quarter was $6.4 million compared with $1.7 million in the same quarter of 2016. The increase was primarily due to interest on the Company’s 6% Subordinated Debentures distributed on March 9, 2017 as part of a special dividend. |
• | At quarter end, cash totaled $167.6 million. |
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For the Quarter Ended | For the Six Months Ended | ||||||||||||||
(In thousands, except per share data) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Net sales | $ | 614,266 | $ | 544,071 | $ | 1,192,186 | $ | 1,076,880 | |||||||
Cost of goods sold | 524,311 | 456,060 | 1,012,738 | 902,702 | |||||||||||
Depreciation and amortization | 8,595 | 9,061 | 16,950 | 17,981 | |||||||||||
Selling, general, and administrative expense | 34,557 | 34,514 | 70,088 | 70,294 | |||||||||||
Operating income | 46,803 | 44,436 | 92,410 | 85,903 | |||||||||||
Interest expense | (6,442 | ) | (1,692 | ) | (8,973 | ) | (3,540 | ) | |||||||
Other income, net | 231 | 515 | 782 | 760 | |||||||||||
Income before income taxes | 40,592 | 43,259 | 84,219 | 83,123 | |||||||||||
Income tax expense | (12,650 | ) | (14,005 | ) | (24,579 | ) | (28,126 | ) | |||||||
(Loss) income from unconsolidated affiliates, net of tax | (109 | ) | (995 | ) | (1,352 | ) | 1,927 | ||||||||
Consolidated net income | 27,833 | 28,259 | 58,288 | 56,924 | |||||||||||
Net income attributable to noncontrolling interests | (200 | ) | (462 | ) | (668 | ) | (497 | ) | |||||||
Net income attributable to Mueller Industries, Inc. | $ | 27,633 | $ | 27,797 | $ | 57,620 | $ | 56,427 | |||||||
Weighted average shares for basic earnings per share | 56,906 | 56,511 | 56,843 | 56,489 | |||||||||||
Effect of dilutive stock-based awards | 511 | 418 | 585 | 456 | |||||||||||
Adjusted weighted average shares for diluted earnings per share | 57,417 | 56,929 | 57,428 | 56,945 | |||||||||||
Basic earnings per share | $ | 0.49 | $ | 0.49 | $ | 1.01 | $ | 1.00 | |||||||
Diluted earnings per share | $ | 0.48 | $ | 0.49 | $ | 1.00 | $ | 0.99 | |||||||
Dividends per share | $ | 0.100 | $ | 0.100 | $ | 8.200 | $ | 0.175 | |||||||
Summary Segment Data: | |||||||||||||||
Net sales: | |||||||||||||||
Piping Systems Segment | $ | 422,844 | $ | 388,662 | $ | 821,619 | $ | 757,552 | |||||||
Industrial Metals Segment | 154,504 | 127,737 | 304,341 | 262,258 | |||||||||||
Climate Segment | 36,636 | 31,359 | 70,915 | 62,065 | |||||||||||
Elimination of intersegment sales | 282 | (3,687 | ) | (4,689 | ) | (4,995 | ) | ||||||||
Net sales | $ | 614,266 | $ | 544,071 | $ | 1,192,186 | $ | 1,076,880 | |||||||
Operating income: | |||||||||||||||
Piping Systems Segment | $ | 34,582 | $ | 32,959 | $ | 64,948 | $ | 64,118 | |||||||
Industrial Metals Segment | 16,764 | 17,124 | 37,430 | 37,036 | |||||||||||
Climate Segment | 6,116 | 5,837 | 11,726 | 9,716 | |||||||||||
Unallocated expenses | (10,659 | ) | (11,484 | ) | (21,694 | ) | (24,967 | ) | |||||||
Operating income | $ | 46,803 | $ | 44,436 | $ | 92,410 | $ | 85,903 |
(In thousands) | July 1, 2017 | December 31, 2016 | |||||
ASSETS | |||||||
Cash and cash equivalents | $ | 167,555 | $ | 351,317 | |||
Accounts receivable, net | 287,829 | 256,291 | |||||
Inventories | 252,799 | 242,013 | |||||
Other current assets | 35,568 | 44,702 | |||||
Total current assets | 743,751 | 894,323 | |||||
Property, plant, and equipment, net | 284,594 | 295,231 | |||||
Other assets | 268,919 | 257,922 | |||||
$ | 1,297,264 | $ | 1,447,476 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current portion of debt | $ | 14,583 | $ | 13,655 | |||
Accounts payable | 105,880 | 103,175 | |||||
Other current liabilities | 98,735 | 102,162 | |||||
Total current liabilities | 219,198 | 218,992 | |||||
Long-term debt | 489,043 | 213,709 | |||||
Pension and postretirement liabilities | 31,616 | 31,273 | |||||
Environmental reserves | 20,859 | 21,208 | |||||
Deferred income taxes | 19,351 | 19,573 | |||||
Other noncurrent liabilities | 11,191 | 6,284 | |||||
Total liabilities | 791,258 | 511,039 | |||||
Total Mueller Industries, Inc. stockholders’ equity | 493,371 | 898,684 | |||||
Noncontrolling interests | 12,635 | 37,753 | |||||
Total equity | 506,006 | 936,437 | |||||
$ | 1,297,264 | $ | 1,447,476 |
For the Six Months Ended | |||||||
(In thousands) | July 1, 2017 | July 2, 2016 | |||||
Cash flows from operating activities | |||||||
Consolidated net income | $ | 58,288 | $ | 56,924 | |||
Reconciliation of consolidated net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 17,093 | 18,162 | |||||
Stock-based compensation expense | 3,692 | 2,874 | |||||
Loss (income) from unconsolidated affiliates | 1,352 | (1,927 | ) | ||||
Gain on sale of business | (1,631 | ) | — | ||||
Loss (gain) on disposals of assets | 81 | (555 | ) | ||||
Gain on sales of securities | (611 | ) | — | ||||
Impairment charges | 411 | — | |||||
Deferred income taxes | 3 | 3,548 | |||||
Income tax benefit from exercise of stock options | — | (186 | ) | ||||
Changes in assets and liabilities, net of businesses acquired and sold: | |||||||
Receivables | (47,108 | ) | (52,334 | ) | |||
Inventories | (10,874 | ) | 1,176 | ||||
Other assets | (4,723 | ) | 17,009 | ||||
Current liabilities | (1,262 | ) | (1,314 | ) | |||
Other liabilities | (1,086 | ) | (1,440 | ) | |||
Other, net | (1,078 | ) | (72 | ) | |||
Net cash provided by operating activities | 12,547 | 41,865 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (11,908 | ) | (10,248 | ) | |||
Acquisition of businesses, net of cash acquired | (18,419 | ) | (20,533 | ) | |||
Proceeds from sale of business, net of cash sold | 17,483 | — | |||||
Net withdrawals from restricted cash balances | 4,650 | 1,508 | |||||
Investment in unconsolidated affiliates | (1,617 | ) | — | ||||
Proceeds from sales of assets | 1,363 | 1,482 | |||||
Proceeds from sales of securities | 1,787 | — | |||||
Net cash used in investing activities | (6,661 | ) | (27,791 | ) | |||
Cash flows from financing activities | |||||||
Dividends paid to stockholders of Mueller Industries, Inc. | (185,539 | ) | (9,887 | ) | |||
Dividends paid to noncontrolling interests | (2,909 | ) | — | ||||
Issuance of long-term debt | — | 2,000 | |||||
(Repayment) issuance of debt by consolidated joint ventures, net | (3,320 | ) | 4,426 | ||||
Net cash (used) received to settle stock-based awards | (785 | ) | 326 | ||||
Repayments of long-term debt | (611 | ) | (500 | ) | |||
Income tax benefit from exercise of stock options | — | 186 | |||||
Net cash used in financing activities | (193,164 | ) | (3,449 | ) | |||
Effect of exchange rate changes on cash | 3,516 | (2,308 | ) | ||||
(Decrease) increase in cash and cash equivalents | (183,762 | ) | 8,317 | ||||
Cash and cash equivalents at the beginning of the period | 351,317 | 274,844 | |||||
Cash and cash equivalents at the end of the period | $ | 167,555 | $ | 283,161 |