Paul Mueller Company Announces Its Third Quarter Earnings of 2023
Paul Mueller Company (OTC: MUEL) announced earnings for the quarter ended September 30, 2023. Net sales increased by 24.8% to $57.1 million compared to the same quarter last year. Gross profit also increased by 65.3% to $18.1 million. Operating income increased to $6.9 million from $1.3 million in the previous year. Net income increased to $5.5 million from $0.98 million. The backlog as of September 30, 2023, is $99.4 million, down from $132.8 million in the previous year. The Company's pension plan termination is progressing well.
Positive
Net sales increased by 24.8% to $57.1 million compared to the same quarter last year.
Gross profit increased by 65.3% to $18.1 million.
Operating income increased to $6.9 million from $1.3 million in the previous year.
Net income increased to $5.5 million from $0.98 million.
The backlog as of September 30, 2023, is $99.4 million, down from $132.8 million in the previous year.
10/27/2023 - 04:08 PM
SPRINGFIELD, Mo., Oct. 27, 2023 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended September 30, 2023.
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 2023 2022 2023 2022 2023 2022 Net Sales $ 57,088 $ 45,766 $ 173,370 $ 132,518 $ 232,372 $ 179,511 Cost of Sales 38,948 34,801 119,881 102,204 169,963 139,665 Gross Profit $ 18,140 $ 10,965 $ 53,489 $ 30,314 $ 62,409 $ 39,846 Selling, General and Administrative Expense 11,245 9,695 36,546 30,332 41,225 40,088 Operating Income (Loss) $ 6,895 $ 1,270 $ 16,943 $ (18) $ 21,184 $ (242) Interest Expense (82) (105) (259) (610) (346) (708) Other Income 477 38 1,810 176 2,749 2,956 Income (Loss) before Provision (Benefit) for Income Taxes $ 7,290 $ 1,203 $ 18,494 $ (452) $ 23,587 $ 2,006 Provision (Benefit) for Income Taxes 1,786 223 4,510 (161) 5,703 335 Net Income (Loss) $ 5,504 $ 980 $ 13,984 $ (291) $ 17,884 $ 1,671 Earnings (Loss) per Common Share - Basic and Diluted $5.07 $0.90 $12.88 ($0.27) $16.47 $1.54 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended September 30 2023 2022 Net Income (Loss) $ 13,984 $ (291) Other Comprehensive Income (Loss), Net of Tax: Foreign Currency Translation Adjustment (275) (3,292) Comprehensive Income (Loss) $ 13,709 $ (3,583) CONSOLIDATED BALANCE SHEETS September 30 December 31 2023 2022 Cash and Short-Term Investments $ 41,527 $ 38,176 Accounts Receivable 24,126 20,580 Inventories (FIFO) 51,042 48,515 LIFO Reserve (22,233) (21,691) Inventories (LIFO) 28,809 26,824 Current Net Investments in Sales-Type Leases 25 24 Other Current Assets 3,721 3,156 Current Assets $ 98,208 $ 88,760 Net Property, Plant, and Equipment 40,689 41,511 Right of Use Assets 2,147 2,304 Other Assets 5,283 5,041 Long-Term Net Investments in Sales-Type Leases 391 312 Total Assets $ 146,718 $ 137,928 Accounts Payable $ 11,654 $ 11,802 Current Maturities and Short-Term debt 624 628 Current Lease Liabilities 376 448 Advance Billings 36,551 41,288 Pension Liabilities 9,972 11,558 Other Current Liabilities 22,023 20,062 Current Liabilities $ 81,200 $ 85,786 Long-Term Debt 8,824 9,349 Long-Term Pension Liabilities 236 236 Other Long-Term Liabilities 2,537 1,737 Lease Liabilities 643 762 Total Liabilities $ 93,440 $ 97,870 Shareholders' Investment 53,278 40,058 Total Liabilities and Shareholders' Investment $ 146,718 $ 137,928 SELECTED FINANCIAL DATA September 30 December 31 2023 2022 Book Value per Common Share $49.07 $36.90 Total Shares Outstanding 1,085,711 1,085,711 Backlog $ 99,441 $ 132,829 CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT Common Paid-in Surplus Retained Treasury Stock Accumulated Other Total Balance, December 31, 2022 $ 1,508 $ 9,708 $ 75,721 $ (10,787) $ (36,092) $ 40,058 Add (Deduct): Net Income 13,984 13,984 Other Comprehensive Income (Loss), Net of Tax (275) (275) Dividends, $.45 per Common Share (489) (489) Treasury Stock Acquisition - Balance, September 30, 2023 $ 1,508 $ 9,708 $ 89,216 $ (10,787) $ (36,367) $ 53,278 CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Nine Months Operating Activities: Net Income (Loss) $ 13,984 $ (291) Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: Pension Contributions (Greater) Less than Expense (1,586) (2,950) Bad Debt Expense (Recovery) 112 (1) Depreciation & Amortization 4,718 4,549 (Gain) on Sales of Equipment (48) (4) Change in Assets and Liabilities (Inc) Dec in Accts and Notes Receivable (3,658) 5,266 (Inc) in Cost in Excess of Estimated Earnings and Billings (109) - (Inc) in Inventories (1,985) (7,358) (Inc) in Prepayments (456) (2,742) (Inc) in Net Investment in Sales-type leases (80) (86) Dec in Other LT Assets 373 218 (Dec) in Accounts Payable (148) (3,284) Inc (Dec) in Accrued Income Tax 3,519 (1) Inc in Other Accrued Expenses 5,515 1,468 (Dec) Inc in Advanced Billings (4,737) 15,494 (Dec) Inc in Billings in Excess of Costs and Estimated Earnings (7,073) 7,554 Inc in Lease Liability for Operating - 220 Inc in Lease Liability for Financing 130 - Principal payments of Lease Liability for Operating (163) (231) Inc (Dec) In Other Long-Term Liabilities 197 (175) Net Cash Provided by Operating Activities $ 8,505 $ 17,646 Investing Activities Intangibles (62) - Proceeds from Sales of Equipment 83 11 Additions to Property, Plant, and Equipment (4,351) (5,838) Net Cash (Required) for Investing Activities $ (4,330) $ (5,827) Financing Activities Principal payments of Lease Liability for Financing (146) (144) (Repayment) of Short-Term Borrowings, Net - - (Repayment) of Long-Term Debt (479) (957) Dividends Paid (489) (489) Treasury Stock Acquisitions - (38) Net Cash (Required) for Financing Activities $ (1,114) $ (1,628) Effect of Exchange Rate Changes 290 (601) Net Increase in Cash and Cash Equivalents $ 3,351 $ 9,590 Cash and Cash Equivalents at Beginning of Year 38,176 11,281 Cash and Cash Equivalents at End of Quarter $ 41,527 $ 20,871
PAUL MUELLER COMPANY
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 2023 2022 Domestic $46,044 $35,464 Mueller BV $11,366 $10,316 Eliminations ($322) ($14) Net Revenue $57,088 $45,766 The chart below depicts the net revenue on a consolidating basis for the nine months ended September 30. Nine Months Ended September 30 Revenue 2023 2022 Domestic $139,924 $97,895 Mueller BV $34,743 $35,354 Eliminations ($1,297) ($731) Net Revenue $173,370 $132,518 The chart below depicts the net revenue on a consolidating basis for the twelve months ended September 30. Twelve Months Ended September 30 Revenue 2023 2022 Domestic $187,222 $130,791 Mueller BV $46,745 $49,805 Eliminations ($1,595) ($1,085) Net Revenue $232,372 $179,511 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 2023 2022 Domestic $5,078 $1,308 Mueller BV $426 ($333) Eliminations $0 $5 Net Income $5,504 $980 The chart below depicts the net income (loss) on a consolidating basis for the nine months ended September 30. Nine Months Ended September 30 Net Income 2023 2022 Domestic $14,233 $658 Mueller BV ($234) ($955) Eliminations ($15) $6 Net Income (Loss) $13,984 ($291) 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 2023 2022 Domestic $18,092 $1,619 Mueller BV ($182) $6 Eliminations ($26) $46 Net Income $17,884 $1,671
B. Key headlines for the quarter:
In the US, the Company continues to perform well against a strong backlog which has contributed to excellent results for the first nine months of the year. In April, 2023, Mueller B.V. announced organizational changes aimed to improve earnings which can be seen in recent results. The Net Loss for the 1st Quarter of 2023 was $(770) thousand . The YTD Net Loss as of September 30, 2023 is $(234) thousand , a $536 thousand improvement. The standard plan termination of the Company’s two domestic pension plans is progressing well with an anticipated completion before December 31, 2023. C. September 30, 2023 backlog is $99.4 million compared to $139.2 million at September 30, 2022. Although down from the previous year, the backlog is still healthy from a historical perspective. The September 30th backlog in the U.S. is $90.3 million as compared to $130.4 million at September 30, 2022. The reduction in U.S. backlog occurred primarily in the pharmaceutical activities of the Company. In the Netherlands, the backlog is $9.7 million at September 30, 2023 compared to $9.4 million September 20, 2022.
D. Revenue is up from the previous year by $11.3 million , $40.9 million and $52.9 million on a three-month, nine-month and twelve-month basis. Most every business segment in the U.S. has an increase led by the pharmaceutical and food and beverage groups. In the Netherlands, revenue is up $1.0 million for the quarter and down for the nine-month and twelve-month periods compared to last year.
Net Income is up from the previous year by $4.5 million , $14.3 million and $16.2 million on a three-month, nine-month and twelve-month basis. This improvement is partially driven by the US operations where the 2023 profits are 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 30.2% as September 30, 2023. This compares to 21.2% for the first nine months of 2022. This improved margin coupled with the $42.0 million increase in revenue has led to the excellent results for the first nine 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. The Company has received no questions from the PBGC and on September 28, 2023, the Company received a favorable determination letter from the IRS.
In September, plan termination election packets were mailed to current employees and former employees who are vested but are not receiving pension payments. The Company plans to complete the termination 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. Participants have until October 31st to make their election.
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 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 was $44,874,302 as of December 31, 2022.
F. The pre-tax results for the three months ended September 30, 2023, were unfavorably affected by $0.3 million increase in the LIFO reserve. The pre-tax results for the nine months ended September 30, 2023, were unfavorably affected by $0.5 million increase in the LIFO reserve. The pre-tax results for the twelve month ended September 30, 2023 were unfavorably affected by $0.9 million increase in the LIFO reserve. The pre-tax results for the three months ended September 30, 2022, were unfavorably affected by $0.9 million increase in the LIFO reserve. The pre-tax results for the nine months ended September 30, 2022, were unfavorably affected by $4.5 million increase in the LIFO reserve. The pre-tax results for the twelve months ended September 30, 2022, were unfavorably affected by $5.6 million increase in the LIFO reserve.
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 .98 for September 2022; 1.07 for December 2022; and 1.06 for September 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 was the percentage increase in net sales compared to the same quarter last year?
Net sales increased by 24.8% compared to the same quarter last year.
What was the increase in gross profit?
Gross profit increased by 65.3% to $18.1 million.
What was the operating income for the quarter?
Operating income increased to $6.9 million from $1.3 million in the previous year.
What was the net income for the quarter?
Net income increased to $5.5 million from $0.98 million.
What is the backlog as of September 30, 2023?
The backlog is $99.4 million, down from $132.8 million in the previous year.
How is the Company's pension plan termination progressing?
The Company's pension plan termination is progressing well.
