Date of Report (Date of earliest event reported): | October 24, 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 October 24, 2017 reporting third quarter 2017 earnings. |
MUELLER INDUSTRIES, INC. | |||
By: | /s/ JEFFREY A. MARTIN | ||
Name: | Jeffrey A. Martin | ||
Title: | Chief Financial Officer and Treasurer | ||
Date: October 24, 2017 |
Exhibit No. | Description |
99.1 |
• | The average price of copper was 34 percent (73 cents per pound) higher compared with the same period of 2016. |
• | The increase in net sales was primarily attributable to higher selling prices, offset by the absence of $28.3 million of sales recorded by MXR, a business the Company exited in June 2017. |
• | Interest expense for the quarter was $5.2 million compared with $1.8 million in the same quarter of 2016. The increase was primarily due to interest on the Company’s 6% Subordinated Debentures. |
• | During the quarter, the Company paid down $100.0 million of debt. |
• | At quarter-end, cash totaled $106.3 million. |
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For the Quarter Ended | For the Nine Months Ended | ||||||||||||||
(In thousands, except per share data) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||||
Net sales | $ | 550,363 | $ | 506,584 | $ | 1,742,549 | $ | 1,583,464 | |||||||
Cost of goods sold | 471,262 | 424,668 | 1,484,000 | 1,327,370 | |||||||||||
Depreciation and amortization | 8,266 | 9,016 | 25,216 | 26,997 | |||||||||||
Selling, general, and administrative expense | 33,276 | 32,413 | 102,953 | 102,707 | |||||||||||
Asset impairments | — | 3,000 | 411 | 3,000 | |||||||||||
Operating income | 37,559 | 37,487 | 129,969 | 123,390 | |||||||||||
Interest expense | (5,237 | ) | (1,830 | ) | (14,210 | ) | (5,370 | ) | |||||||
Other (expense) income, net | (458 | ) | 120 | 324 | 880 | ||||||||||
Income before income taxes | 31,864 | 35,777 | 116,083 | 118,900 | |||||||||||
Income tax expense | (8,716 | ) | (10,837 | ) | (33,295 | ) | (38,963 | ) | |||||||
(Loss) income from unconsolidated affiliates, net of tax | (394 | ) | 1,122 | (1,746 | ) | 3,049 | |||||||||
Consolidated net income | 22,754 | 26,062 | 81,042 | 82,986 | |||||||||||
Net income attributable to noncontrolling interests | (496 | ) | (84 | ) | (1,164 | ) | (581 | ) | |||||||
Net income attributable to Mueller Industries, Inc. | $ | 22,258 | $ | 25,978 | $ | 79,878 | $ | 82,405 | |||||||
Weighted average shares for basic earnings per share | 56,987 | 56,631 | 56,891 | 56,536 | |||||||||||
Effect of dilutive stock-based awards | 456 | 586 | 542 | 589 | |||||||||||
Adjusted weighted average shares for diluted earnings per share | 57,443 | 57,217 | 57,433 | 57,125 | |||||||||||
Basic earnings per share | $ | 0.39 | $ | 0.46 | $ | 1.40 | $ | 1.46 | |||||||
Diluted earnings per share | $ | 0.39 | $ | 0.45 | $ | 1.39 | $ | 1.44 | |||||||
Dividends per share | $ | 0.100 | $ | 0.100 | $ | 8.300 | $ | 0.275 | |||||||
Summary Segment Data: | |||||||||||||||
Net sales: | |||||||||||||||
Piping Systems Segment | $ | 384,078 | $ | 351,557 | $ | 1,205,697 | $ | 1,109,109 | |||||||
Industrial Metals Segment | 147,578 | 131,350 | 451,919 | 393,608 | |||||||||||
Climate Segment | 32,488 | 30,003 | 103,403 | 92,068 | |||||||||||
Elimination of intersegment sales | (13,781 | ) | (6,326 | ) | (18,470 | ) | (11,321 | ) | |||||||
Net sales | $ | 550,363 | $ | 506,584 | $ | 1,742,549 | $ | 1,583,464 | |||||||
Operating income: | |||||||||||||||
Piping Systems Segment | $ | 20,724 | $ | 24,138 | $ | 85,672 | $ | 88,256 | |||||||
Industrial Metals Segment | 23,045 | 18,749 | 60,475 | 55,785 | |||||||||||
Climate Segment | 5,429 | 4,824 | 17,155 | 14,540 | |||||||||||
Unallocated expenses | (11,639 | ) | (10,224 | ) | (33,333 | ) | (35,191 | ) | |||||||
Operating income | $ | 37,559 | $ | 37,487 | $ | 129,969 | $ | 123,390 |
(In thousands) | September 30, 2017 | December 31, 2016 | |||||
ASSETS | |||||||
Cash and cash equivalents | $ | 106,344 | $ | 351,317 | |||
Accounts receivable, net | 276,678 | 256,291 | |||||
Inventories | 284,114 | 242,013 | |||||
Other current assets | 25,692 | 44,702 | |||||
Total current assets | 692,828 | 894,323 | |||||
Property, plant, and equipment, net | 283,845 | 295,231 | |||||
Other assets | 272,551 | 257,922 | |||||
$ | 1,249,224 | $ | 1,447,476 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current portion of debt | $ | 14,450 | $ | 13,655 | |||
Accounts payable | 125,032 | 103,175 | |||||
Other current liabilities | 105,677 | 102,162 | |||||
Total current liabilities | 245,159 | 218,992 | |||||
Long-term debt | 388,818 | 213,709 | |||||
Pension and postretirement liabilities | 31,877 | 31,273 | |||||
Environmental reserves | 21,365 | 21,208 | |||||
Deferred income taxes | 19,963 | 19,573 | |||||
Other noncurrent liabilities | 12,005 | 6,284 | |||||
Total liabilities | 719,187 | 511,039 | |||||
Total Mueller Industries, Inc. stockholders’ equity | 516,903 | 898,684 | |||||
Noncontrolling interests | 13,134 | 37,753 | |||||
Total equity | 530,037 | 936,437 | |||||
$ | 1,249,224 | $ | 1,447,476 |
For the Nine Months Ended | |||||||
(In thousands) | September 30, 2017 | October 1, 2016 | |||||
Cash flows from operating activities | |||||||
Consolidated net income | $ | 81,042 | $ | 82,986 | |||
Reconciliation of consolidated net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 25,439 | 27,267 | |||||
Stock-based compensation expense | 5,555 | 4,553 | |||||
Loss (income) from unconsolidated affiliates | 1,746 | (3,049 | ) | ||||
Gain on sale of business | (1,491 | ) | — | ||||
Gain on disposals of properties | (26 | ) | (747 | ) | |||
Gain on sales of securities | (611 | ) | — | ||||
Impairment charges | 411 | 3,000 | |||||
Deferred income taxes | 624 | 6,491 | |||||
Changes in assets and liabilities, net of businesses acquired and sold: | |||||||
Receivables | (33,359 | ) | (45,780 | ) | |||
Inventories | (40,920 | ) | (914 | ) | |||
Other assets | (3,372 | ) | 14,428 | ||||
Current liabilities | 20,967 | (15,998 | ) | ||||
Other liabilities | (1,498 | ) | (2,101 | ) | |||
Other, net | (973 | ) | 450 | ||||
Net cash provided by operating activities | 53,534 | 70,586 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (17,297 | ) | (15,632 | ) | |||
Acquisition of businesses, net of cash acquired | (18,396 | ) | (20,533 | ) | |||
Proceeds from sale of business, net of cash sold | 17,483 | — | |||||
Net withdrawals from restricted cash balances | 5,197 | 1,177 | |||||
Investment in unconsolidated affiliates | (3,317 | ) | — | ||||
Proceeds from sales of properties | 11,732 | 5,301 | |||||
Proceeds from sales of securities | 1,787 | — | |||||
Net cash used in investing activities | (2,811 | ) | (29,687 | ) | |||
Cash flows from financing activities | |||||||
Dividends paid to stockholders of Mueller Industries, Inc. | (191,241 | ) | (15,555 | ) | |||
Dividends paid to noncontrolling interests | (2,909 | ) | (3,765 | ) | |||
Issuance of long-term debt | — | 2,000 | |||||
(Repayment) issuance of debt by consolidated joint ventures, net | (3,451 | ) | 5,006 | ||||
Net cash used to settle stock-based awards | (1,644 | ) | (1,356 | ) | |||
Repayments of long-term debt | (100,917 | ) | (769 | ) | |||
Net cash used in financing activities | (300,162 | ) | (14,439 | ) | |||
Effect of exchange rate changes on cash | 4,466 | (3,511 | ) | ||||
(Decrease) increase in cash and cash equivalents | (244,973 | ) | 22,949 | ||||
Cash and cash equivalents at the beginning of the period | 351,317 | 274,844 | |||||
Cash and cash equivalents at the end of the period | $ | 106,344 | $ | 297,793 |