Mueller Industries Inc 10-Q for FY2024 Q1

Mueller Industries Inc (MLI)

10-Q 2024-04-24 For: 2024-03-30

Added on April 09, 2026

About this 10-Q

Mueller Industries Inc filed this 10-Q on April 24, 2024, covering the quarter ended March 30, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $849.65M; down 12.5% from $971.19M a year earlier
Net income: $138.36M; down 20.1% from net income of $173.24M a year earlier
Diluted EPS: $1.21; down 21.4% from $1.54 a year earlier

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☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly report ended March 30, 2024
			OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ______ to ______
			Commission file number 1-6770


Delaware			25-0790410
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


150 Schilling Boulevard	Suite 100
Collierville	Tennessee	38017
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock	MLI	NYSE


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


		Page Number
Part I. Financial Information

	Item 1. – Financial Statements (Unaudited)

	a.) Condensed Consolidated Statements of Income	3

	b.) Condensed Consolidated Statements of Comprehensive Income	4

	c.) Condensed Consolidated Balance Sheets	5

	d.) Condensed Consolidated Statements of Cash Flows	7

	e.) Condensed Consolidated Statements of Changes in Equity	9

	f.) Notes to Condensed Consolidated Financial Statements	11

	Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations	24

	Item 3. – Quantitative and Qualitative Disclosures About Market Risk	32

	Item 4. – Controls and Procedures	33

Part II. Other Information

	Item 1. – Legal Proceedings	34

	Item 1A. – Risk Factors	34

	Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds	35

	Item 5. – Other Information	35

	Item 6. – Exhibits	36

Signatures		37


	For the Quarter Ended
(In thousands, except per share data)		March 30, 2024		April 1, 2023

Net sales		$	849,654	$	971,192

Cost of goods sold		608,703		678,798
Depreciation and amortization		9,169		10,657
Selling, general, and administrative expense		48,357		52,631






Operating income		183,425		229,106

Interest expense		(115)		(143)
Interest income		17,245		6,235
Realized gains on short-term investments		365		1,910
Other income, net		630		326

Income before income taxes		201,550		237,434

Income tax expense		(51,834)		(61,357)
Loss from unconsolidated affiliates, net of foreign tax		(8,007)		(984)

Consolidated net income		141,709		175,093
Net income attributable to noncontrolling interests		(3,346)		(1,854)

Net income attributable to Mueller Industries, Inc.		$	138,363	$	173,239

Weighted average shares for basic earnings per share (1)		111,416		111,386
Effect of dilutive stock-based awards (1)		2,729		1,414

Adjusted weighted average shares for diluted earnings per share (1)		114,145		112,800

Basic earnings per share (1)		$	1.24	$	1.56

Diluted earnings per share (1)		$	1.21	$	1.54

Dividends per share (1)		$	0.20	$	0.15


	For the Quarter Ended
(In thousands)		March 30, 2024		April 1, 2023

Consolidated net income		$	141,709	$	175,093

Other comprehensive (loss) income, net of tax:
Foreign currency translation		(4,155)		10,251
Net change with respect to derivative instruments and hedging activities, net of tax of $(93) and $(272)		327		954
Net change in pension and postretirement obligation adjustments, net of tax of $(17) and $11		36		(8)
Attributable to unconsolidated affiliates, net of tax of $395 and $(373)		(1,362)		1,285

Total other comprehensive (loss) income, net		(5,154)		12,482

Consolidated comprehensive income		136,555		187,575
Comprehensive income attributable to noncontrolling interests		(2,725)		(2,112)

Comprehensive income attributable to Mueller Industries, Inc.		$	133,830	$	185,463


	(Unaudited)
(In thousands, except share data)	March 30, 2024		December 30, 2023

Assets

Current assets:
Cash and cash equivalents	$	1,357,952	$	1,170,893
Short-term investments	—		98,146
Accounts receivable, less allowance for doubtful accounts of $2,698 in 2024 and $2,830 in 2023	424,406		351,561
Inventories	356,869		380,248
Other current assets	45,379		39,173

Total current assets	2,184,606		2,040,021

Property, plant, and equipment, net	390,517		385,165
Operating lease right-of-use assets	33,819		35,170
Goodwill, net	151,246		151,820
Intangible assets, net	44,721		46,208
Investments in unconsolidated affiliates	71,648		83,436
Other assets	17,685		17,481

Total assets	$	2,894,242	$	2,759,301


MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
(In thousands, except share data)	March 30, 2024		December 30, 2023

Liabilities

Current liabilities:
Current portion of debt	$	705	$	796
Accounts payable	160,133		120,485
Accrued wages and other employee costs	29,954		55,644
Current portion of operating lease liabilities	8,072		7,893
Other current liabilities	162,417		132,320

Total current liabilities	361,281		317,138

Long-term debt, less current portion	130		185
Pension liabilities	2,144		2,832
Postretirement benefits other than pensions	9,217		9,230
Environmental reserves	14,919		15,030
Deferred income taxes	22,687		19,134
Noncurrent operating lease liabilities	25,451		26,683
Other noncurrent liabilities	10,043		10,353

Total liabilities	445,872		400,585

Equity

Mueller Industries, Inc. stockholders' equity:
Preferred stock - $1.00 par value; shares authorized 5,000,000; none outstanding	—		—
Common stock - $.01 par value; shares authorized 250,000,000; issued 160,366,008; outstanding 113,597,003 in 2024 and 114,157,918 in 2023	1,604		1,604
Additional paid-in capital	318,684		312,171
Retained earnings	2,709,950		2,594,300
Accumulated other comprehensive loss	(51,754)		(47,221)
Treasury common stock, at cost	(554,110)		(523,409)

Total Mueller Industries, Inc. stockholders' equity	2,424,374		2,337,445
Noncontrolling interests	23,996		21,271

Total equity	2,448,370		2,358,716

Commitments and contingencies	—		—

Total liabilities and equity	$	2,894,242	$	2,759,301


	For the Quarter Ended March 30, 2024
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	590,168	$	156,067	$	116,810	$	(13,391)	$	849,654

Cost of goods sold	420,941		126,604		75,591		(14,433)		608,703
Depreciation and amortization	4,560		1,920		1,595		1,094		9,169
Selling, general, and administrative expense	21,987		3,272		7,049		16,049		48,357






Operating income	142,680		24,271		32,575		(16,101)		183,425

Interest expense									(115)
Interest income									17,245
Realized gains on short-term investments									365
Other income, net									630

Income before income taxes									$	201,550


	For the Quarter Ended April 1, 2023
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	662,479	$	165,234	$	152,954	$	(9,475)	$	971,192

Cost of goods sold	467,610		133,170		88,812		(10,794)		678,798
Depreciation and amortization	5,558		1,772		2,153		1,174		10,657
Selling, general, and administrative expense	25,457		3,077		8,001		16,096		52,631





Operating income	163,854		27,215		53,988		(15,951)		229,106

Interest expense									(143)
Interest income									6,235
Realized gains on short-term investments									1,910
Other income, net									326

Income before income taxes									$	237,434


(In thousands)	March 30, 2024		December 30, 2023

Segment assets:
Piping Systems	$	1,057,983	$	1,029,821
Industrial Metals	178,903		157,761
Climate	255,798		252,561
General Corporate	1,401,558		1,319,158

	$	2,894,242	$	2,759,301


	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
(In thousands)	Balance Sheet Location	March 30, 2024		December 30, 2023		Balance Sheet Location	March 30, 2024		December 30, 2023

Commodity contracts - gains	Other current assets	$	588	$	589	Other current liabilities	$	53	$	16
Commodity contracts - losses	Other current assets	(6)		(281)		Other current liabilities	(2,423)		(383)

Total derivatives (1)		$	582	$	308		$	(2,370)	$	(367)


	For the Quarter Ended March 30, 2024
(In thousands)	Gain Recognized in AOCI (Effective Portion), Net of Tax		Classification Gains (Losses)	Gain Reclassified from AOCI (Effective Portion), Net of Tax

Cash flow hedges:
Commodity contracts	$	667	Cost of goods sold	$	(373)
Other	33		Other	—

Total	$	700	Total	$	(373)


	For the Quarter Ended
(In thousands)	March 30, 2024		April 1, 2023

Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.	$	(22,255)	$	(16,729)

Repurchase of common stock	(27,930)		—


Repayments of debt	(56)		(56)
(Repayment) issuance of debt by consolidated joint ventures, net	(77)		297
Net cash used to settle stock-based awards	(2,489)		(2,611)


Net cash used in financing activities	$	(52,807)	$	(19,099)

Effect of exchange rate changes on cash	(670)		2,573

Increase in cash, cash equivalents, and restricted cash	190,585		146,298
Cash, cash equivalents, and restricted cash at the beginning of the period	1,174,223		465,296

Cash, cash equivalents, and restricted cash at the end of the period	$	1,364,808	$	611,594


(In thousands)	March 30, 2024		December 30, 2023

Raw materials and supplies	$	101,540	$	111,843
Work-in-process	62,956		61,793
Finished goods	205,410		220,629
Valuation reserves	(13,037)		(14,017)

Inventories	$	356,869	$	380,248


	Quarter-to- Date
Net selling price in core product lines	(3.8)	%
Unit sales volume in core product lines	(4.1)

Dispositions	(0.8)
Other	(3.8)

	(12.5)	%


	Quarter-to- Date
Net selling price in core product lines	(4.6)	%
Unit sales volume in core product lines	(6.1)

Dispositions	(1.2)
Other	1.0

	(10.9)	%


	For the Quarter Ended April 1, 2023
(In thousands)	Gain (Loss) Recognized in AOCI (Effective Portion), Net of Tax		Classification Gains (Losses)	Gain Reclassified from AOCI (Effective Portion), Net of Tax

Cash flow hedges:
Commodity contracts	$	2,969	Cost of goods sold	$	(1,989)
Other	(26)		Other	—

Total	$	2,943	Total	$	(1,989)


	For the Quarter Ended March 30, 2024
(In thousands)	Cumulative Translation Adjustment		Unrealized Gain (Loss) on Derivatives		Pension/OPEB Liability Adjustment		Attributable to Unconsol. Affiliates		Total

Balance as of December 30, 2023	$	(48,076)	$	213	$	(2,630)	$	3,272	$	(47,221)

Other comprehensive (loss) income before reclassifications	(3,534)		700		82		(1,362)		(4,114)
Amounts reclassified from AOCI	—		(373)		(46)		—		(419)

Net current-period other comprehensive (loss) income	(3,534)		327		36		(1,362)		(4,533)


Balance as of March 30, 2024	$	(51,610)	$	540	$	(2,594)	$	1,910	$	(51,754)


		Amount reclassified from AOCI
	For the Quarter Ended
(In thousands)			March 30, 2024		April 1, 2023		Affected line item

Unrealized gains on derivative commodity contracts			$	(393)	$	(2,551)	Cost of goods sold

			20		562		Income tax expense

			$	(373)	$	(1,989)	Net of tax and noncontrolling interests

Amortization of net (gain) loss and prior service (credit) cost on employee benefit plans			$	(65)	$	(98)	Other income, net
			19		25		Income tax expense

			$	(46)	$	(73)	Net of tax and noncontrolling interests


	For the Quarter Ended			Percent Change
(In thousands)		March 30, 2024		April 1, 2023		2024 vs. 2023

Net sales		$	849,654	$	971,192	(12.5)	%
Operating income		183,425		229,106		(19.9)
Net income		138,363		173,239		(20.1)


	Quarter-to- Date
Net selling price in core product lines	(3.9)	%
Unit sales volume in core product lines	0.2


Other	(1.8)

	(5.5)	%


(In thousands)	2024		2023

Increase (decrease) in:
Cash, cash equivalents, and restricted cash	$	190,585	$	146,298
Short-term investments	(98,146)		(46,866)
Property, plant, and equipment, net	5,352		(2,626)
Total debt	(146)		330
Working capital, net of cash and current debt	(86,708)		23,824

Net cash provided by operating activities	173,625		111,618
Net cash provided by investing activities	70,437		51,206
Net cash used in financing activities	(52,807)		(19,099)



•			delays in completing the acquisition within the expected time period and the risk that the acquisition may not be completed at all;
•			diversion of management's attention to complete the acquisition and integrate Nehring’s operations thereafter;
•			disruption to our existing operations and plans or inability to effectively manage our expanded operations after the closing of the acquisition;
•			potential loss of key Nehring employees, suppliers or customers, or other adverse effects on existing business relationships with suppliers or customers; and
•			our expanded operations may not achieve the growth prospects, synergies or other financial results that we have projected for the acquisition.


	(a) Total Number of Shares Purchased (1)	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (2)


December 31, 2023 - January 27, 2024	15,398	$	37.51	—	25,003,808
January 28, 2024 - February 24, 2024	574,343	$	48.99	570,000	24,433,808
February 25, 2024 - March 30, 2024	58,337	$	51.16	—	24,433,808
Total	648,078			570,000


31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase

101.INS			Inline XBRL Instance Document

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase

101.PRE			Inline XBRL Presentation Linkbase Document

101.SCH			Inline XBRL Taxonomy Extension Schema

104			Cover Page Interactive Data File (embedded within the Inline XBRL document and included in exhibit 101)


			MUELLER INDUSTRIES, INC.


			/s/ Jeffrey A. Martin
			Jeffrey A. Martin
April 24, 2024			Chief Financial Officer and Treasurer
Date			(Principal Financial and Accounting Officer)


			/s/ Anthony J. Steinriede
April 24, 2024			Anthony J. Steinriede
Date			Vice President – Corporate Controller


1.	I have reviewed this quarterly report on Form 10-Q of Mueller Industries, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: April 24, 2024
			/s/ Gregory L. Christopher
			Gregory L. Christopher
			Chief Executive Officer


(1)			The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ JEFFREY A. MARTIN
Jeffrey A. Martin
Chief Financial Officer
April 24, 2024