SPRINGFIELD, Mo., April 29, 2022 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended March 31, 2022.
| PAUL MUELLER COMPANY |
| THREE-MONTH REPORT |
| Unaudited |
| (In thousands) |
| CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
March 31 |
|
March 31 |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
| Net Sales |
|
$ |
40,775 |
|
|
$ |
45,279 |
|
|
$ |
180,109 |
|
|
$ |
204,235 |
|
| Cost of Sales |
|
|
31,861 |
|
|
|
31,838 |
|
|
|
136,190 |
|
|
|
141,852 |
|
| Gross Profit |
|
$ |
8,914 |
|
|
$ |
13,441 |
|
|
$ |
43,919 |
|
|
$ |
62,383 |
|
| Selling, General and Administrative Expense |
|
|
10,240 |
|
|
|
11,308 |
|
|
|
42,816 |
|
|
|
44,958 |
|
| Goodwill Impairment Expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
15,397 |
|
| Operating Income (Loss) |
|
$ |
(1,326 |
) |
|
$ |
2,133 |
|
|
$ |
1,103 |
|
|
$ |
2,028 |
|
| Interest Expense |
|
|
(388 |
) |
|
|
(451 |
) |
|
|
(679 |
) |
|
|
(828 |
) |
| PPP Loan Forgiveness |
|
|
- |
|
|
|
- |
|
|
|
1,884 |
|
|
|
- |
|
| Other Income |
|
|
264 |
|
|
|
38 |
|
|
|
3,070 |
|
|
|
809 |
|
| Income (Loss) before Provision (Benefit) for Income Taxes |
$ |
(1,450 |
) |
|
$ |
1,720 |
|
|
$ |
5,378 |
|
|
$ |
2,009 |
|
| Provision (Benefit) for Income Taxes |
|
|
(328 |
) |
|
|
419 |
|
|
|
800 |
|
|
|
4,140 |
|
| Net Income (Loss) |
|
$ |
(1,122 |
) |
|
$ |
1,301 |
|
|
$ |
4,578 |
|
|
$ |
(2,131 |
) |
|
|
|
|
|
|
|
|
|
|
| Earnings (Loss) per Common Share –– |
Basic |
|
$ |
(1.03 |
) |
|
$ |
1.19 |
|
|
$ |
4.22 |
|
|
$ |
(1.94 |
) |
|
Diluted |
|
$ |
(1.03 |
) |
|
$ |
1.19 |
|
|
$ |
4.22 |
|
|
$ |
(1.94 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|
|
|
|
|
Three Months Ended |
|
March 31 |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
| Net Income (Loss) |
$ |
(1,122 |
) |
|
$ |
1,301 |
|
| Other Comprehensive Income (Loss), Net of Tax: |
|
|
|
| Foreign Currency Translation Adjustment |
|
(482 |
) |
|
|
(1,275 |
) |
| Comprehensive Income (Loss) |
$ |
(1,604 |
) |
|
$ |
26 |
|
|
|
|
|
|
|
|
|
| CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
March 31 |
|
December 31 |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
| Cash and Short-Term Investments |
$ |
12,513 |
|
|
$ |
11,281 |
|
| Accounts Receivable |
|
23,747 |
|
|
|
25,774 |
|
| Inventories |
|
32,427 |
|
|
|
26,454 |
|
| Current Net Investments in Sales-Type Leases |
|
22 |
|
|
|
23 |
|
| Other Current Assets |
|
2,474 |
|
|
|
1,814 |
|
| Current Assets |
$ |
71,183 |
|
|
$ |
65,346 |
|
|
|
|
|
| Net Property, Plant, and Equipment |
|
40,913 |
|
|
|
41,250 |
|
| Right of Use Assets |
|
2,481 |
|
|
|
2,526 |
|
| Other Assets |
|
7,650 |
|
|
|
7,003 |
|
| Long-Term Net Investments in Sales-Type Leases |
|
193 |
|
|
|
164 |
|
| Total Assets |
$ |
122,420 |
|
|
$ |
116,289 |
|
|
|
|
|
| Accounts Payable |
$ |
14,137 |
|
|
$ |
14,470 |
|
| Current Maturities and Short-Term debt |
|
1,310 |
|
|
|
1,330 |
|
| Current Lease Liabilities |
|
471 |
|
|
|
483 |
|
| Other Current Liabilities |
|
36,914 |
|
|
|
27,691 |
|
| Current Liabilities |
$ |
52,832 |
|
|
$ |
43,974 |
|
|
|
|
|
| Long-Term Debt |
|
13,723 |
|
|
|
14,241 |
|
| Long-Term Pension Liabilities |
|
17,083 |
|
|
|
18,036 |
|
| Other Long-Term Liabilities |
|
2,450 |
|
|
|
1,848 |
|
| Lease Liabilities |
|
844 |
|
|
|
897 |
|
| Total Liabilities |
$ |
86,932 |
|
|
$ |
78,996 |
|
| Shareholders' Investment |
|
35,488 |
|
|
|
37,293 |
|
| Total Liabilities and Shareholders' Investment |
$ |
122,420 |
|
|
$ |
116,289 |
|
|
|
|
|
|
|
|
|
| SELECTED FINANCIAL DATA |
|
|
March 31 |
|
December 31 |
|
|
2022 |
|
|
|
2021 |
|
| Book Value per Common Share |
$ |
32.69 |
|
|
$ |
34.32 |
|
| Total Shares Outstanding |
|
1,085,711 |
|
|
|
1,086,661 |
|
| Backlog |
$ |
130,763 |
|
|
$ |
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) |
|
|
|
|
|
(1,122 |
) |
|
|
|
|
|
|
|
(1,122 |
) |
| Other Comprehensive Income (Loss), Net of Tax |
|
|
|
|
|
|
|
|
|
|
|
(482 |
) |
|
|
|
(482 |
) |
| Dividends, $.15 per Common Share |
|
|
|
|
|
(163 |
) |
|
|
|
|
|
|
|
(163 |
) |
| Treasury Stock Acquisition |
|
|
|
|
|
|
|
|
|
(38 |
) |
|
|
|
|
|
(38 |
) |
| Balance, March 31, 2022 |
$ |
1,508 |
|
|
$ |
9,708 |
|
|
$ |
71,479 |
|
|
$ |
(10,787 |
) |
|
$ |
(36,420 |
) |
|
$ |
35,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED STATEMENT OF CASH FLOWS |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022
|
|
Three Months Ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Activities: |
|
|
|
|
|
|
|
| Net Income (Loss) |
$ |
(1,122 |
) |
|
$ |
1,301 |
|
|
|
|
|
| Adjustment to Reconcile Net Income to Net Cash Provided (Required) by Operating Activities: |
|
|
|
| Pension Contributions (Greater) Less than Expense |
|
(953 |
) |
|
|
(960 |
) |
| Bad Debt Expense (Recovery) |
|
(4 |
) |
|
|
(32 |
) |
| Depreciation & Amortization |
|
1,503 |
|
|
|
1,652 |
|
| (Gain) Loss on Sales of Equipment |
|
(1 |
) |
|
|
(3 |
) |
| Change in Assets and Liabilities |
|
|
|
| Dec (Inc) in Accts and Notes Receivable |
|
2,031 |
|
|
|
(1,460 |
) |
| (Inc) Dec in Cost in Excess of Estimated Earnings and Billings |
|
- |
|
|
|
(478 |
) |
| (Inc) in Inventories |
|
(5,129 |
) |
|
|
(3,213 |
) |
| (Inc) in Prepayments |
|
(660 |
) |
|
|
(118 |
) |
| (Inc) in Net Investment in Sales-type leases |
|
(28 |
) |
|
|
(15 |
) |
| Dec (Inc) in Other LT Assets |
|
13 |
|
|
|
(72 |
) |
| (Dec) Inc in Accounts Payable |
|
(152 |
) |
|
|
2,225 |
|
| (Dec) in Accrued Income Tax |
|
(1 |
) |
|
|
- |
|
| Inc (Dec) in Other Accrued Expenses |
|
705 |
|
|
|
(4,131 |
) |
| Inc in Advanced Billings |
|
8,142 |
|
|
|
5,580 |
|
| Inc (Dec) in Billings in Excess of Costs and Estimated Earnings |
|
377 |
|
|
|
(1,204 |
) |
| Inc in Lease Liability for Operating |
|
90 |
|
|
|
24 |
|
| Inc in Lease Liability for Financing |
|
- |
|
|
|
43 |
|
| Principal payments of Lease Liability for Operating |
|
(73 |
) |
|
|
(69 |
) |
| (Dec) in Long Term Liabilities |
|
(24 |
) |
|
|
(72 |
) |
| Net Cash Provided (Required) by Operating Activities |
$ |
4,714 |
|
|
$ |
(1,002 |
) |
|
|
|
|
| Investing Activities |
|
|
|
| Proceeds from Sales of Equipment |
|
1 |
|
|
|
9 |
|
| Additions to Property, Plant, and Equipment |
|
(1,935 |
) |
|
|
(812 |
) |
| Net Cash (Required) for Investing Activities |
$ |
(1,934 |
) |
|
$ |
(803 |
) |
|
|
|
|
| Financing Activities |
|
|
|
| Principal payments of Lease Liability for Financing |
|
(57 |
) |
|
|
(69 |
) |
| (Repayment) of Short-Term Borrowings, Net |
|
- |
|
|
|
(605 |
) |
| (Repayment) of Long-Term Debt |
|
(380 |
) |
|
|
(353 |
) |
| Dividends Paid |
|
(163 |
) |
|
|
- |
|
| Treasury Stock Acquisitions |
|
(38 |
) |
|
|
(4,001 |
) |
| Net Cash (Required) for Financing Activities |
$ |
(638 |
) |
|
$ |
(5,028 |
) |
|
|
|
|
| Effect of Exchange Rate Changes |
|
(910 |
) |
|
|
(551 |
) |
|
|
|
|
| Net Increase (Decrease) in Cash and Cash Equivalents |
$ |
1,232 |
|
|
$ |
(7,384 |
) |
|
|
|
|
| Cash and Cash Equivalents at Beginning of Year |
|
11,281 |
|
|
|
22,943 |
|
|
|
|
|
| Cash and Cash Equivalents at End of Quarter |
$ |
12,513 |
|
|
$ |
15,559 |
|
|
|
|
|
|
|
|
|
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 March 31.
| Three Months Ended March 31 |
| Revenue |
|
2022 |
|
|
|
2021 |
|
| Domestic |
$ |
28,116 |
|
|
$ |
33,497 |
|
| Mueller BV |
$ |
12,980 |
|
|
$ |
12,027 |
|
| Eliminations |
$ |
(321 |
) |
|
$ |
(245 |
) |
| Net Revenue |
$ |
40,775 |
|
|
$ |
45,279 |
|
|
|
|
|
|
|
|
|
The chart below depicts the net revenue on a consolidating basis for the twelve months ended March 31.
| Twelve Months Ended March 31 |
| Revenue |
|
2022 |
|
|
|
2021 |
|
| Domestic |
$ |
131,698 |
|
|
$ |
158,761 |
|
| Mueller BV |
$ |
49,773 |
|
|
$ |
46,439 |
|
| Eliminations |
$ |
(1,362 |
) |
|
$ |
(965 |
) |
| Net Revenue |
$ |
180,109 |
|
|
$ |
204,235 |
|
|
|
|
|
|
|
|
|
The chart below depicts the net income on a consolidating basis for the three months ended March 31.
| Three Months Ended March 31 |
| Net Income |
|
2022 |
|
|
|
2021 |
|
| Domestic |
$ |
(885 |
) |
|
$ |
1,683 |
|
| Mueller BV |
$ |
(238 |
) |
|
$ |
(394 |
) |
| Eliminations |
$ |
1 |
|
|
$ |
12 |
|
| Net Income |
$ |
(1,122 |
) |
|
$ |
1,301 |
|
|
|
|
|
|
|
|
|
The chart below depicts the net income on a consolidating basis for the twelve months ended March 31.
| Twelve Months Ended March 31 |
| Net Income |
|
2022 |
|
|
|
2021 |
|
| Domestic |
$ |
4,760 |
|
|
$ |
12,942 |
|
| Mueller BV |
$ |
(209 |
) |
|
$ |
(15,098 |
) |
| Eliminations |
$ |
27 |
|
|
$ |
25 |
|
| Net Income |
$ |
4,578 |
|
|
$ |
(2,131 |
) |
|
|
|
|
|
|
|
|
B. Key headlines for the quarter,
- Backlog is at an all-time high with much of this increase to be realized in the last half of this year and the first part of 2023.
- The year has started out slower than expected. Shortage or delay of key components and cost increases against older backlog have contributed to this slow start and lower margins.
- Earnings were dampened by a $2.1 million increase in the LIFO reserve from general inflation and an increase in inventory from planned early purchases to protect margin.
- Finding enough qualified workers to meet our backlog is our greatest challenge.
C. The following backlog comparisons exclude Mueller Field Operations which was sold on December 31, 2021. March 31, 2022 backlog is $130.8 million compared to $78.4 million at December 31, 2021 and $59.3 million at March 31, 2021. All business segments have higher backlogs than a year ago especially the pharmaceutical group in the U.S. which received a large order in February, 2022. The U.S. backlog is up 130% from a year ago to $118.4 million, the largest in our history. In the Netherlands, the backlog is up 54% from March 31, 2021, to $13.0 million.
D. Revenue is down to last year at three months and twelve months primarily from Mueller Field Operations no longer being part of the Company and from the pharmaceutical group which was finishing a large project in the first quarter of 2021. We anticipate the revenue shortfall from the slow start in 2022 to be reduced later in the year as the current large backlog is being produced.
E. Similar to revenue, net income is down $2.4 million for the three months primarily from lower earnings from the pharmaceutical groups and a greater negative affect by the increase in the LIFO reserve by $1.2 million (pretax).
Net Income was improved for the trailing twelve months by $6.7 million. In the U.S., earnings were down by $8.2 million. The pretax effect of LIFO was $4.7 million of this negative variance but was offset by the pretax gain of $1.9 million from the forgiveness of the PPP loan and $2.9 million pretax gain on the sale of Mueller Field Operations. The remainder of the negative variance is primarily from the large pharmaceutical order manufactured in 2020 and finishing in early 2021 and the large juice storage facility project for Mueller Field Operations which was profitable for the first part of the project in 2020, but had warranty issues as the job was nearing completion in 2021. Mueller BV was favorable by $15.3 million due to the goodwill impairment of $15.4 million at the end of 2020.
F. The pre-tax results for the three months ended March 31, 2022, were unfavorably affected by $2.1 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2022 were unfavorably affected by $5.2 million increase in the LIFO reserve. The pre-tax results for three months ended March 31, 2021, were unfavorably affected by $0.9 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2021, were unfavorably affected by $0.5 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 1.17 for March, 2021; 1.13 for December, 2021 and 1.11 for March, 2022, respectively.
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.
Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9346
kjeffries@paulmueller.com | https://paulmueller.com
