Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 25, 2017
mlia03.jpg
   MUELLER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
  
  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
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐
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)) 
 
 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new of revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 


Item 2.02.
Results of Operations and Financial Condition.

On July 25, 2017, the Registrant issued a press release announcing earnings for the quarter ended July 1, 2017. A copy of the press release announcing the second quarter 2017 earnings is attached as Exhibit 99.1.

Item 9.01.
Financial Statements and Exhibits.
 
(d) Exhibits
 
 
99.1
Press release, dated July 25, 2017 reporting second quarter 2017 earnings.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




















2

 SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
MUELLER INDUSTRIES, INC.
 
 
 
By:
/s/ JEFFREY A. MARTIN
 
 
Name:
Jeffrey A. Martin
 
Title:
Chief Financial Officer and Treasurer
 
 
 
Date:  July 25, 2017
 
 


 


 






















3

Exhibit Index
 
Exhibit No.
Description 
 
 
99.1
Press release, dated July 25, 2017.



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
























4

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Mueller Industries, Inc. Reports Second Quarter 2017 Earnings

MEMPHIS, Tenn., July 25, 2017 -- Mueller Industries, Inc. (NYSE: MLI) announced today operating income of $46.8 million for the second quarter of 2017, compared with $44.4 million in the same quarter last year. Net income for the period was $27.6 million, or 48 cents per diluted share, on net sales of $614.3 million. This compares with net income of $27.8 million, or 49 cents per diluted share, on net sales of $544.1 million in the same quarter of 2016. The increase in net sales was primarily attributable to higher selling prices and higher overall unit volumes.

Financial and Operating Highlights for the second quarter of 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.


Regarding the outlook, Greg Christopher, Mueller CEO, said, “Business conditions in the markets we serve are on track with our expectations for 2017. Construction activity in the U.S. continues to provide steady demand for many of our products, and improvement in industrial demand after several years of softness is encouraging.”

In addition, Mr. Christopher commented, “On May 31, 2017, we acquired the PexCor and HeatLink companies, which support our strategy to grow in the area of pressure plastic piping systems. Further, on June 21, 2017, we made a strategic decision to exit our joint venture in China after years of mediocre performance and increasingly challenging business conditions. We believe that reallocating cash and resources to other initiatives, such as the plastic acquisition and our new mills in Bahrain and Utah, will provide better returns in the future.”







5


Mueller Industries, Inc. is an industrial manufacturer that specializes in copper and copper alloy manufacturing while also producing goods made from aluminum, steel, and plastics. It is headquartered in Memphis, Tennessee and comprises a network of operations in the United States, Canada, Mexico, Great Britain, South Korea, and China. Its products include tubing, fittings, valves, vessels, and related items for plumbing and HVACR related piping systems, as well as rod, forgings, extrusions, and various components for OEM applications. Products are distributed into sectors such as building construction, appliance, defense, energy, and automotive.

*********************

Statements in this release that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties. These include economic and currency conditions, continued availability of raw materials and energy, market demand, pricing, competitive and technological factors, and the availability of financing, among others, as set forth in the Company’s SEC filings. The words “outlook,” “estimate,” “project,” “intend,” “expect,” “believe,” “target,” “encourage,” “anticipate,” “appear,” and similar expressions are intended to identify forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report. The Company has no obligation to publicly update or revise any forward-looking statements to reflect events after the date of this report.

CONTACT
Jeffrey A. Martin
(901) 753-3226


6

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
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


7

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(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













8

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
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


9