Paul Mueller Company Announces Its Third Quarter Earnings of 2022
SPRINGFIELD, Mo., Oct. 28, 2022 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended September 30, 2022.
| PAUL MUELLER COMPANY NINE-MONTH REPORT Unaudited (In thousands) | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Twelve Months Ended | ||||||||||||||||||
| September 30 | September 30 | September 30 | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Net Sales | $ | 45,766 | $ | 43,063 | $ | 132,518 | $ | 137,620 | $ | 179,511 | $ | 191,746 | ||||||||
| Cost of Sales | 34,801 | 32,959 | 102,204 | 98,706 | 139,665 | 136,614 | ||||||||||||||
| Gross Profit | $ | 10,965 | $ | 10,104 | $ | 30,314 | $ | 38,914 | $ | 39,846 | $ | 55,132 | ||||||||
| Selling, General and Administrative Expense | 9,695 | 11,267 | 30,332 | 34,128 | 40,088 | 45,127 | ||||||||||||||
| Goodwill Impairment Expense | - | - | - | - | - | 15,397 | ||||||||||||||
| Operating Income (Loss) | $ | 1,270 | $ | (1,163) | $ | (18) | $ | 4,786 | $ | (242) | $ | (5,392) | ||||||||
| Interest Expense | (105) | (102) | (610) | (644) | (708) | (817) | ||||||||||||||
| PPP Loan Forgiveness | - | - | - | 1,884 | - | 1,884 | ||||||||||||||
| Other Income (Expense) | 38 | (94) | 176 | 64 | 2,956 | 403 | ||||||||||||||
| Income (Loss) before Provision (Benefit) for Income Taxes | $ | 1,203 | $ | (1,359) | $ | (452) | $ | 6,090 | $ | 2,006 | $ | (3,922) | ||||||||
| Provision (Benefit) for Income Taxes | 223 | (317) | (161) | 1,051 | 335 | 2,314 | ||||||||||||||
| Net Income (Loss) | $ | 980 | $ | (1,042) | $ | (291) | $ | 5,039 | $ | 1,671 | $ | (6,236) | ||||||||
| Earnings (Loss) per Common Share - | Basic and Diluted | $ | 0.90 | ( | $ | (0.27) | $ | 4.61 | $ | 1.54 | $ | (5.58) | ||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||
| Nine Months Ended | ||||||
| September 30 | ||||||
| 2022 | 2021 | |||||
| Net Income (Loss) | $ | (291) | $ | 5,039 | ||
| Other Comprehensive Income (Loss), Net of Tax: | ||||||
| Foreign Currency Translation Adjustment | (3,292) | (1,048) | ||||
| Comprehensive Income (Loss) | $ | (3,583) | $ | 3,991 | ||
| CONSOLIDATED BALANCE SHEETS | ||||||
| September 30 | December 31 | |||||
| 2022 | 2021 | |||||
| Cash and Short-Term Investments | $ | 20,871 | $ | 11,281 | ||
| Accounts Receivable | 20,509 | 25,774 | ||||
| Inventories (FIFO) | 55,120 | 43,309 | ||||
| LIFO Reserve | (21,308) | (16,855) | ||||
| Inventories (LIFO) | 33,812 | 26,454 | ||||
| Current Net Investments in Sales-Type Leases | 22 | 23 | ||||
| Other Current Assets | 4,556 | 1,814 | ||||
| Current Assets | $ | 79,770 | $ | 65,346 | ||
| Net Property, Plant, and Equipment | 38,649 | 41,250 | ||||
| Right of Use Assets | 2,074 | 2,526 | ||||
| Other Assets | 7,290 | 7,003 | ||||
| Long-Term Net Investments in Sales-Type Leases | 251 | 164 | ||||
| Total Assets | $ | 128,034 | $ | 116,289 | ||
| Accounts Payable | $ | 11,186 | $ | 14,470 | ||
| Current Maturities and Short-Term debt | 1,180 | 1,330 | ||||
| Current Lease Liabilities | 389 | 483 | ||||
| Advance Billings | 34,089 | 18,595 | ||||
| Other Current Liabilities | 18,117 | 9,096 | ||||
| Current Liabilities | $ | 64,961 | $ | 43,974 | ||
| Long-Term Debt | 11,924 | 14,241 | ||||
| Long-Term Pension Liabilities | 15,087 | 18,036 | ||||
| Other Long-Term Liabilities | 2,225 | 1,848 | ||||
| Lease Liabilities | 654 | 897 | ||||
| Total Liabilities | $ | 94,851 | $ | 78,996 | ||
| Shareholders' Investment | 33,183 | 37,293 | ||||
| Total Liabilities and Shareholders' Investment | $ | 128,034 | $ | 116,289 | ||
| SELECTED FINANCIAL DATA | ||||||
| September 30 | December 31 | |||||
| 2022 | 2021 | |||||
| Book Value per Common Share | $ | 30.56 | $ | 34.32 | ||
| Total Shares Outstanding | 1,085,711 | 1,086,661 | ||||
| Backlog | $ | 139,177 | $ | 78,357 | ||
| CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT | |||||||||||||||||||
| Common Stock | Paid-in Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||
| Balance, December 31, 2021 | $ | 1,508 | $ | 9,708 | $ | 72,764 | $ | (10,749) | $ | (35,938) | $ | 37,293 | |||||||
| Add (Deduct): | |||||||||||||||||||
| Net Income (Loss) | (291) | (291) | |||||||||||||||||
| Other Comprehensive Income (Loss), Net of Tax | (3,292) | (3,292) | |||||||||||||||||
| Dividends, $.15 per Common Share | (489) | (489) | |||||||||||||||||
| Treasury Stock Acquisition | (38) | (38) | |||||||||||||||||
| Balance, September 30, 2022 | $ | 1,508 | $ | 9,708 | $ | 71,984 | $ | (10,787) | $ | (39,230) | $ | 33,183 | |||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||
| Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | |||||
| Operating Activities: | ||||||
| Net Income (Loss) | $ | (291) | $ | 5,039 | ||
| Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||
| Pension Contributions (Greater) Less than Expense | (2,950) | (2,882) | ||||
| Bad Debt Expense (Recovery) | (1) | (58) | ||||
| Depreciation & Amortization | 4,549 | 4,896 | ||||
| (Gain) Loss on Sales of Equipment | (4) | (43) | ||||
| PPP Loan Forgiveness | - | (1,884) | ||||
| Change in Assets and Liabilities | ||||||
| Dec (Inc) in Accts and Notes Receivable | 5,266 | (1,658) | ||||
| (Inc) in Cost in Excess of Estimated Earnings and Billings | - | (1,655) | ||||
| (Inc) in Inventories | (7,358) | (8,571) | ||||
| (Inc) in Prepayments | (2,742) | (152) | ||||
| (Inc) in Net Investment in Sales-type leases | (86) | (101) | ||||
| Dec in Other LT Assets | 218 | 677 | ||||
| (Dec) Inc in Accounts Payable | (3,284) | 3,156 | ||||
| (Dec) in Accrued Income Tax | (1) | - | ||||
| Inc (Dec) in Other Accrued Expenses | 1,468 | (3,271) | ||||
| Inc in Advanced Billings | 15,494 | 9,012 | ||||
| Inc (Dec) in Billings in Excess of Costs and Estimated Earnings | 7,554 | (1,208) | ||||
| Inc in Lease Liability for Operating | 220 | 193 | ||||
| Inc in Lease Liability for Financing | - | 152 | ||||
| Principal payments of Lease Liability for Operating | (231) | (202) | ||||
| (Dec) In Other Long-Term Liabilities | (175) | (90) | ||||
| Net Cash Provided by Operating Activities | $ | 17,646 | $ | 1,350 | ||
| Investing Activities | ||||||
| Intangibles | - | (105) | ||||
| Proceeds from Sales of Equipment | 11 | 67 | ||||
| Additions to Property, Plant, and Equipment | (5,838) | (3,588) | ||||
| Net Cash (Required) for Investing Activities | $ | (5,827) | $ | (3,626) | ||
| Financing Activities | ||||||
| Principal payments of Lease Liability for Financing | (144) | (197) | ||||
| (Repayment) of Short-Term Borrowings, Net | - | (595) | ||||
| (Repayment) of Long-Term Debt | (957) | (1,250) | ||||
| Dividends Paid | (489) | - | ||||
| Treasury Stock Acquisitions | (38) | (4,216) | ||||
| Net Cash (Required) for Financing Activities | $ | (1,628) | $ | (6,258) | ||
| Effect of Exchange Rate Changes | (601) | (140) | ||||
| Net Increase (Decrease) in Cash and Cash Equivalents | $ | 9,590 | $ | (8,674) | ||
| Cash and Cash Equivalents at Beginning of Year | 11,281 | 22,943 | ||||
| Cash and Cash Equivalents at End of Quarter | $ | 20,871 | $ | 14,269 | ||
PAUL MUELLER COMPANY
SUMMARIZED NOTES TO THE FINANCIAL STATEMENTS
(In thousands)
A. The chart below depicts the net revenue on a consolidating basis for the three months ended September 30.
| Three Months Ended September 30 | ||||||
| Revenue | 2022 | 2021 | ||||
| Domestic | $ | 35,464 | $ | 33,192 | ||
| Mueller BV | $ | 10,316 | $ | 10,148 | ||
| Eliminations | $ | (14 | ) | $ | (277 | ) |
| Net Revenue | $ | 45,766 | $ | 43,063 | ||
The chart below depicts the net revenue on a consolidating basis for the nine months ended September 30.
| Nine Months Ended September 30 | ||||||
| Revenue | 2022 | 2021 | ||||
| Domestic | $ | 97,895 | $ | 104,183 | ||
| Mueller BV | $ | 35,354 | $ | 34,369 | ||
| Eliminations | $ | (731 | ) | $ | (932 | ) |
| Net Revenue | $ | 132,518 | $ | 137,620 | ||
The chart below depicts the net revenue on a consolidating basis for the twelve months ended September 30.
| Twelve Months Ended September 30 | ||||||
| Revenue | 2022 | 2021 | ||||
| Domestic | $ | 130,791 | $ | 146,092 | ||
| Mueller BV | $ | 49,805 | $ | 46,675 | ||
| Eliminations | $ | (1,085 | ) | $ | (1,021 | ) |
| Net Revenue | $ | 179,511 | $ | 191,746 | ||
The chart below depicts the net income on a consolidating basis for the three months ended September 30.
| Three Months Ended September 30 | ||||||
| Net Income | 2022 | 2021 | ||||
| Domestic | $ | 1,308 | $ | (81 | ) | |
| Mueller BV | $ | (333 | ) | $ | (942 | ) |
| Eliminations | $ | 5 | $ | (19 | ) | |
| Net Income (Loss) | $ | 980 | $ | (1,042 | ) | |
The chart below depicts the net income on a consolidating basis for the nine months ended September 30.
| Nine Months Ended September 30 | ||||||
| Net Income | 2022 | 2021 | ||||
| Domestic | $ | 658 | $ | 6,367 | ||
| Mueller BV | $ | (955 | ) | $ | (1,326 | ) |
| Eliminations | $ | 6 | $ | (2 | ) | |
| Net Income (Loss) | $ | (291 | ) | $ | 5,039 | |
The chart below depicts the net income on a consolidating basis for the twelve months ended September 30.
| Twelve Months Ended September 30 | ||||||
| Net Income | 2022 | 2021 | ||||
| Domestic | $ | 1,619 | $ | 10,327 | ||
| Mueller BV | $ | 6 | $ | (16,515 | ) | |
| Eliminations | $ | 46 | $ | (48 | ) | |
| Net Income (Loss) | $ | 1,671 | $ | (6,236 | ) | |
B. Key headlines for the quarter,
- September 30, 2022 backlog, excluding Mueller Field Operations which was sold on December 31, 2021, held steady at a very solid
$139.2 million compared to$141.7 million at June 30, 2022 and$78.4 million at December 31, 2021. Most business unit backlogs are higher led by the pharmaceutical group which has begun another large project that will continue through 2023. - With the higher backlog, the company initiated a more aggressive referral and bonus program in the U.S. during the summer to attract new workers in this tight employment environment. As of September 30th, the company employed 39 additional workers from the beginning of the year with 18 in production, a
5% increase. Additionally, wages have been increased to remain competitive in the market.
- Cash has increased
$9.6 million in the first nine months to$20.9 million . Advanced deposits from customers in line with the increased backlog, grew$15.5 million . Major uses of cash include$7.4 million increase in inventories and capital expenditures of$5.8 million .
- Revenue and profits for the first nine months of the year were lower than expected as the Company worked through the older backlog that was not adequately priced for the current inflation. Production continues to be slowed by the shortage or delay of key components.
- The Company’s pre-tax earnings have been negatively affected by an increase in the LIFO reserve. Pre-tax earnings were reduced by
$4.5 million year-to-date and$5.6 million for trailing twelve months. Since January 1, 2021, pre-tax earnings have been negatively affected by$8.5 million . This increase in the reserve is due to inflation and an increase in inventory to produce the larger backlog.
C. Revenue for the trailing three months is up slightly. Revenue in the U.S. was down at nine months and twelve months from the sale of MFO and lower pharmaceutical revenue since the prior year had revenue from the pharmaceutical project that ended in early 2022. In the Netherlands, revenue strengthened slightly but was diminished on the consolidated statements by the strong dollar.
D. Similar to revenue, net income is up at three months but lower at nine months and on twelve months when excluding the goodwill impairment of
E. On August 17, 2022, the Company renewed its U.S. loan agreement with the bank for another year and changed the basis of calculating interest from LIBOR to SOFR+10.
On August 22, 2022, Mueller B.V. amended its loan agreement with the bank by agreeing to pay
F. The pre-tax results for the three months ended September 30, 2022, were unfavorably affected by
G. The consolidated financials are affected by the euro to dollar exchange rate when consolidating Mueller B.V., the Dutch subsidiary. The month end euro to dollar exchange rate was 1.16 for September 2021; 1.13 for December 2021; and 0.98 for September 2022.
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 2021 annual report, available at
www.paulmueller.com.
Contact Info:
Ken Jeffries (417) 575-9346 kjeffries@paulmueller.com | https://paulmueller.com
