Paul Mueller Company Announces Its Second Quarter Earnings of 2023
Paul Mueller Company (OTC: MUEL) announced earnings for the quarter ended June 30, 2023. Net sales for the quarter were $59,931,000, an increase of 30% compared to the same period last year. Gross profit was $18,552,000, a 78% increase. Operating income was $5,838,000, compared to a loss of $38,000 in the previous year. Net income for the quarter was $4,813,000, compared to a loss of $149,000 last year.
Positive
Net sales for the quarter increased by 30% compared to the same period last year.
Gross profit increased by 78%.
Operating income improved from a loss to $5,838,000.
Net income for the quarter was $4,813,000, compared to a loss of $149,000 last year.
07/28/2023 - 04:16 PM
SPRINGFIELD, Mo., July 28, 2023 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended June 30, 2023.
PAUL MUELLER COMPANY SIX-MONTH REPORT Unaudited (In thousands) CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 2023 2022 2023 2022 2023 2022 Net Sales $ 59,931 $ 45,977 $ 116,282 $ 86,752 $ 221,050 $ 176,808 Cost of Sales 41,379 35,542 80,933 67,403 165,816 137,823 Gross Profit $ 18,552 $ 10,435 $ 35,349 $ 19,349 $ 55,234 $ 38,985 Selling, General and Administrative Expense 12,714 10,397 25,301 20,637 39,675 41,660 Operating Income (Loss) $ 5,838 $ 38 $ 10,048 $ (1,288 ) $ 15,559 $ (2,675 ) Interest Expense (80 ) (117 ) (177 ) (505 ) (369 ) (705 ) PPP Loan Forgiveness - - - - - 1,884 Other Income (Expense) 613 (126 ) 1,333 138 2,310 940 Income (Loss) before Provision (Benefit) for Income Taxes $ 6,371 $ (205 ) $ 11,204 $ (1,655 ) $ 17,500 $ (556 ) Provision (Benefit) for Income Taxes 1,558 (56 ) 2,724 (384 ) 4,140 (205 ) Net Income (Loss) $ 4,813 $ (149 ) $ 8,480 $ (1,271 ) $ 13,360 $ (351 ) Earnings (Loss) per Common Share ––Basic and Diluted $ 4.43 ($0.14 ) $ 7.81 ($1.17 ) $ 12.31 ($0.32 )
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended June 30 2023 2022 Net Income (Loss) $ 8,480 $ (1,271 ) Other Comprehensive Income (Loss), Net of Tax: Foreign Currency Translation Adjustment 441 (2,292 ) Comprehensive Income (Loss) $ 8,921 $ (3,563 )
CONSOLIDATED BALANCE SHEETS June 30 December 31 2023 2022 Cash and Short-Term Investments $ 38,907 $ 38,176 Accounts Receivable 24,453 20,580 Inventories (FIFO) 52,198 48,515 LIFO Reserve (21,930 ) (21,691 ) Inventories (LIFO) 30,268 26,824 Current Net Investments in Sales-Type Leases 25 24 Other Current Assets 3,799 3,156 Current Assets $ 97,452 $ 88,760 Net Property, Plant, and Equipment 41,572 41,511 Right of Use Assets 2,455 2,304 Other Assets 5,385 5,041 Long-Term Net Investments in Sales-Type Leases 380 312 Total Assets $ 147,244 $ 137,928 Accounts Payable $ 13,132 $ 11,802 Current Maturities and Short-Term Debt 636 628 Current Lease Liabilities 433 448 Advance Billings 36,641 41,288 Pension Liabilities 10,740 11,558 Other Current Liabilities 23,965 20,062 Current Liabilities $ 85,547 $ 85,786 Long-Term Debt 9,145 9,349 Long-Term Pension Liabilities 236 236 Other Long-Term Liabilities 2,965 1,737 Lease Liabilities 698 762 Total Liabilities $ 98,591 $ 97,870 Shareholders' Investment 48,653 40,058 Total Liabilities and Shareholders' Investment $ 147,244 $ 137,928
SELECTED FINANCIAL DATA June 30 December 31 2023 2022 Book Value per Common Share $ 44.81 $ 36.90 Total Shares Outstanding 1,085,711 1,085,711 Backlog $ 106,016 $ 132,829
CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT Common Paid-in Surplus Retained Treasury Stock Total Balance, December 31, 2022 $ 1,508 $ 9,708 $ 75,721 $ (10,787 ) $ (36,092 ) $ 40,058 Add (Deduct): Net Income 8,480 8,480 Other Comprehensive Income, Net of Tax 441 441 Dividends, $.30 per Common Share (326 ) (3260 ) Treasury Stock Acquisition Balance, June 30, 2023 $ 1,508 $ 9,708 $ 83,875 $ (10,787 ) $ (35,651 ) $ 4,653
CONSOLIDATED STATEMENT OF CASH FLOWS Six Months Six Months Operating Activities: Net Income (Loss) $ 8,480 $ (1,271 ) Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: Pension Contributions (Greater) Less than Expense (818 ) (1,451 ) Bad Debt (Recovery) Expense (19 ) 15 Depreciation & Amortization 3,027 3,028 (Gain) on Sales of Equipment (33 ) (3 ) Change in Assets and Liabilities (Inc) Dec in Accts and Notes Receivable (3,854 ) 4,313 (Inc) in Inventories (3,444 ) (8,925 ) (Inc) in Prepayments (643 ) (1,400 ) (Inc) in Net Investment in Sales-type leases (69 ) (25 ) Dec in Other Assets 307 251 Inc (Dec) in Accounts Payable 1,330 (441 ) Inc (Dec) in Accrued Income Tax 1,911 (1 ) Inc in Other Accrued Expenses 4,919 1,689 (Dec) Inc in Advanced Billings (4,647 ) 15,444 (Dec) in Billings in Excess of Costs and Estimated Earnings (2,927 ) (281 ) Inc in Lease Liability for Operating - 238 Inc in Lease Liability for Financing 133 - Principal payments of Lease Liability for Operating (137 ) (218 ) Inc (Dec) in Other Long-Term Liabilities 607 (108 ) Net Cash Provided by Operating Activities $ 4,123 $ 10,854 Investing Activities Intangibles (62 ) - Proceeds from Sales of Equipment 67 3 Additions to Property, Plant, and Equipment (3,190 ) (3,828 ) Net Cash (Required) for Investing Activities $ (3,185 ) $ (3,825 ) Financing Activities Principal payments of Lease Liability for Financing (98 ) (106 ) (Repayment) Proceeds of Short-Term Borrowings, Net - - (Repayment) of Long-Term Debt (318 ) (760 ) Dividends Paid (326 ) (326 ) Treasury Stock Acquisitions - (38 ) Net Cash (Required) for Financing Activities $ (742 ) $ (1,230 ) Effect of Exchange Rate Changes 535 (990 ) Net Increase in Cash and Cash Equivalents $ 731 $ 4,809 Cash and Cash Equivalents at Beginning of Year 38,176 11,281 Cash and Cash Equivalents at End of Quarter $ 38,907 $ 16,090
PAUL MUELLER COMPANY
(1) Results of Operations: (In thousands)
A. The chart below depicts the net revenue on a consolidating basis for the three months ended June 30.
Three Months Ended June 30 Revenue 2023 2022 Domestic $48,295 $34,315 Mueller BV $12,073 $12,058 Eliminations ($437 ) ($396 ) Net Revenue $59,931 $45,977
The chart below depicts the net revenue on a consolidating basis for the six months ended June 30.
Six Months Ended June 30 Revenue 2023 2022 Domestic $93,880 $62,431 Mueller BV $23,377 $25,038 Eliminations ($975 ) ($717 ) Net Revenue $116,282 $86,752
The chart below depicts the net revenue on a consolidating basis for the twelve months ended June 30.
Twelve Months Ended June 30 Revenue 2023 2022 Domestic $176,642 $128,519 Mueller BV $45,695 $49,637 Eliminations ($1,287 ) ($1,348 ) Net Revenue $221,050 $176,808
The chart below depicts the net income (loss) on a consolidating basis for the three months ended June 30.
Three Months Ended June 30 Net Income 2023 2022 Domestic $4,705 $237 Mueller BV $110 ($386 ) Eliminations ($2 ) $0 Net Income (Loss) $4,813 ($149 )
The chart below depicts the net income (loss) on a consolidating basis for the six months ended June 30.
Six Months Ended June 30 Net Income 2023 2022 Domestic $9,155 ($650 ) Mueller BV ($660 ) ($622 ) Eliminations ($15 ) $1 Net Income (Loss) $8,480 ($1,271 )
The chart below depicts the net income (loss) on a consolidating basis for the twelve months ended June 30.
Twelve Months Ended June 30 Net Income 2023 2022 Domestic $14,322 $230 Mueller BV ($941 ) ($604 ) Eliminations ($21 ) $23 Net Income Loss $13,360 ($351 )
B. Key headlines for the quarter:
In the US, the Company has performed well against a strong backlog which has contributed to excellent results for the first six months of the year. After Mueller B.V. announced organizational changes aimed to improve future results, Earnings Before Tax for May and June were improved with the second quarter of 2023 showing a profit of $110,000 compared to a $386,000 loss the year before. The standard plan terminations of the Company’s two domestic pension plans are moving forward. The Company is awaiting responses from the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC). C. June 30, 2023 backlog is $106.0 million compared to $141.7 million at June 30, 2022. The majority of this backlog is in the U.S. where the backlog is $98.7 million at June 30, 2023 compared to $131.0 million at June 30, 2022. The $32.3 million reduction in U.S. backlog is mainly from the BioPharm division working through a large pharmaceutical project with its backlog reduced $27.9 million year over year. In the Netherlands, the backlog is $7.7 million at June 30, 2023 versus $11.0 million June 20, 2022. Part of this shortfall is from the shutdown of DEG.
D. Revenue is up from the previous year by $13.9 million , $29.5 million and $44.2 million on a three-month, six-month and twelve-month basis. Most every business segment in the U.S. has an increase led by the pharmaceutical, food and beverage, and component groups. In the Netherlands, revenue is flat for the quarter and down for the six-month and twelve-month periods compared to last year. The shortfall is primarily from milk tanks sold to Great Britain and Ireland, serving beer tanks and the shutdown of DEG.
Net Income is up from the previous year by $5.0 million , $9.8 million and $13.7 million on a three-month, six-month and twelve-month basis. This improvement is partially driven by the US operations where profits were less negatively affected by the change in the LIFO reserve as outlined in footnote F. However, the greater impact has been an increased focus on improving margins. Gross profit in the US (excluding the effects of LIFO) as a percentage of revenue is 29.8% as June 30, 2023. This compares to 20.9% for the first six months of 2022. This improved margin coupled with the $31.4 million increase in revenue has led to the excellent results for the first six months.
E. The Company has pension plans covering domestic employees represented by a bargaining unit (Contract Plan) and employees not represented by a bargaining unit (Noncontract Plan). The participants discontinued accruing benefits in these plans in 2011. On November 1, 2022, and December 1, 2022, the Company announced that it had initiated a standard plan termination of the Contract Plan and Noncontract Plan, respectively. The Company applied to the IRS for its approval of the terminations on December 15, 2022. The Company gave notice of intent to terminate to the PBGC for the Contract Plan on June 27, 2023 and the Noncontract Plan on July 14, 2023. Assuming no questions or concerns from the PBGC, the Company has until the end of February 2024 to terminate the plans. The Company is still waiting on a response from the IRS. The Company is still hopeful to complete the termination process by the end of 2023, culminating in the affected participants receiving either a lump sum payment or a monthly annuity payment provided by an insurance company.
The underfunded status of the two plans combined as of December 31, 2022, was $11.8 million . These terminations will require approximately this amount of cash from the Company, adjusted for any further changes to the plans’ funded status. The terminations will end future requirements for Company contributions to the plans, which have averaged $4.2 million per year in the previous three years. The Company expects to complete the terminations in late 2023 or early 2024, at which time the accumulated actuarial losses will be recognized as a non-cash reduction of pretax earnings. The accumulated actuarial loss related to these plans is $44,874,302 as of December 31, 2022.
F. The pre-tax results for the three months ended June 30, 2023, were unfavorably affected by a $0.4 million increase in the LIFO reserve. The pre-tax results for the six months ended June 30, 2023, were unfavorably affected by a $0.2 million increase in the LIFO reserve. The pre-tax results for the twelve months ended June 30, 2023, were unfavorably affected by a $1.5 million increase in the LIFO reserve. The pre-tax results for the three months ended June 30, 2022, were unfavorably affected by a $1.5 million increase in the LIFO reserve. The pre-tax results for the six months ended June 30, 2022, were unfavorably affected by a $3.5 million increase in the LIFO reserve. The pre-tax results for the twelve months ended June 30, 2022, were unfavorably affected by a $6.4 million increase in the LIFO reserve.
G. The consolidated financials are affected by the euro to the dollar exchange rate when consolidating Mueller B.V., the Dutch subsidiary. The month-end euro to dollar exchange rate was 1.04 for June 2022, 1.07 for December 2022, and 1.09 for June 2023.
This press release contains forward-looking statements that provide current expectations of future events based on certain assumptions. All statements regarding future performance growth, conditions, or developments are forward-looking statements. Actual future results may differ materially from those described in the forward-looking statements due to a variety of factors, including, but not limited to, the factors described in the Company’s Annual Report under “Safe Harbor for Forward-Looking Statements,” which is available at paulmueller.com. The Company expressly disclaims any obligation or undertaking to update these forward-looking statements to reflect any future events or circumstances.
The accounting policies related to this report and additional management discussion and analysis are provided in the 2022 annual report, available at www.paulmueller.com .
Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9346
kjeffries@paulmueller.com | https://paulmueller.com
What is the stock symbol for Paul Mueller Company?
The stock symbol for Paul Mueller Company is MUEL.
What were the net sales for the quarter ended June 30, 2023?
The net sales for the quarter ended June 30, 2023, were $59,931,000.
What was the gross profit for the quarter?
The gross profit for the quarter was $18,552,000.
What was the operating income for the quarter?
The operating income for the quarter was $5,838,000.
What was the net income for the quarter?
The net income for the quarter was $4,813,000.
