Mueller Industries Inc 10-Q for FY2022 Q1

Mueller Industries Inc (MLI)

10-Q 2022-04-20 For: 2022-03-26

Added on April 09, 2026

About this 10-Q

Mueller Industries Inc filed this 10-Q on April 20, 2022, covering the quarter ended March 26, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 26, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.01B; up 23.4% from $818.15M a year earlier
Net income: $158.32M; up 150.9% from net income of $63.11M a year earlier
Diluted EPS: $2.78; up 150.5% from $1.11 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 26, 2022
			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	6

	e.) Condensed Consolidated Statements of Changes in Equity	8

	f.) Notes to Condensed Consolidated Financial Statements	10

	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 6. – Exhibits	36

Signatures		37


	For the Quarter Ended
(In thousands, except per share data)	March 26, 2022		March 27, 2021

Net sales	$	1,010,002	$	818,148

Cost of goods sold	744,511		668,418
Depreciation and amortization	10,841		11,755
Selling, general, and administrative expense	47,456		45,435
Gain on sale of assets	(5,507)		—





Operating income	212,701		92,540

Interest expense	(158)		(4,469)

Other income, net	780		577

Income before income taxes	213,323		88,648

Income tax expense	(54,199)		(21,761)
Income (loss) from unconsolidated affiliates, net of foreign tax	124		(1,649)

Consolidated net income	159,248		65,238

Net income attributable to noncontrolling interests	(932)		(2,131)

Net income attributable to Mueller Industries, Inc.	$	158,316	$	63,107

Weighted average shares for basic earnings per share	56,100		55,916
Effect of dilutive stock-based awards	810		756

Adjusted weighted average shares for diluted earnings per share	56,910		56,672

Basic earnings per share	$	2.82	$	1.13

Diluted earnings per share	$	2.78	$	1.11

Dividends per share	$	0.25	$	0.13


	For the Quarter Ended
(In thousands)	March 26, 2022		March 27, 2021

Consolidated net income	$	159,248	$	65,238

Other comprehensive income, net of tax:
Foreign currency translation	1,213		4,387
Net change with respect to derivative instruments and hedging activities, net of tax of $(604), $(147)	2,091		493
Net change in pension and postretirement obligation adjustments, net of tax of $(134), $56	420		(91)
Attributable to unconsolidated affiliates, net of tax of $(624), $(577)	2,148		1,987

Total other comprehensive income, net	5,872		6,776

Consolidated comprehensive income	165,120		72,014
Comprehensive income attributable to noncontrolling interests	(899)		(2,552)

Comprehensive income attributable to Mueller Industries, Inc.	$	164,221	$	69,462


	(Unaudited)
(In thousands, except share data)	March 26, 2022		December 25, 2021
Assets
Current assets:
Cash and cash equivalents	$	139,255	$	87,924
Accounts receivable, less allowance for doubtful accounts of $2,564 in 2022 and $2,590 in 2021	588,397		471,859
Inventories	471,949		430,244
Other current assets	40,947		28,976

Total current assets	1,240,548		1,019,003

Property, plant, and equipment, net	380,711		385,562
Operating lease right-of-use assets	21,965		23,510
Goodwill, net	172,072		171,330
Intangible assets, net	60,794		61,714
Investments in unconsolidated affiliates	63,069		61,133
Other assets	6,791		6,684

Total assets	$	1,945,950	$	1,728,936

Liabilities
Current liabilities:
Current portion of debt	$	812	$	811
Accounts payable	226,712		180,793
Accrued wages and other employee costs	35,001		49,629
Current portion of operating lease liabilities	5,650		6,015
Other current liabilities	183,421		145,191

Total current liabilities	451,596		382,439

Long-term debt, less current portion	1,098		1,064
Pension liabilities	4,408		5,572
Postretirement benefits other than pensions	12,110		11,961
Environmental reserves	17,137		17,678
Deferred income taxes	15,861		14,347
Noncurrent operating lease liabilities	16,010		17,099
Other noncurrent liabilities	21,586		21,813

Total liabilities	539,806		471,973

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 100,000,000; issued 80,183,004; outstanding 57,239,030 in 2022 and 57,295,961 in 2021	802		802
Additional paid-in capital	288,802		286,208
Retained earnings	1,602,496		1,458,489
Accumulated other comprehensive loss	(47,442)		(53,347)
Treasury common stock, at cost	(474,258)		(470,034)

Total Mueller Industries, Inc. stockholders' equity	1,370,400		1,222,118
Noncontrolling interests	35,744		34,845

Total equity	1,406,144		1,256,963

Commitments and contingencies	—		—

Total liabilities and equity	$	1,945,950	$	1,728,936


	For the Quarter Ended March 26, 2022
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	703,430	$	174,312	$	140,622	$	(8,362)	$	1,010,002

Cost of goods sold	514,187		145,710		93,957		(9,343)		744,511
Depreciation and amortization	5,400		1,944		2,352		1,145		10,841
Selling, general, and administrative expense	23,355		3,399		7,613		13,089		47,456
Gain on sale of assets	—		—		—		(5,507)		(5,507)





Operating income	160,488		23,259		36,700		(7,746)		212,701

Interest expense									(158)

Other income, net									780

Income before income taxes									$	213,323


	For the Quarter Ended March 27, 2021
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	547,748	$	164,852	$	111,026	$	(5,478)	$	818,148

Cost of goods sold	450,354		140,891		84,082		(6,909)		668,418
Depreciation and amortization	6,210		1,743		2,629		1,173		11,755
Selling, general, and administrative expense	24,086		3,371		6,980		10,998		45,435




Operating income	67,098		18,847		17,335		(10,740)		92,540

Interest expense									(4,469)
Other income, net									577

Income before income taxes									$	88,648


(In thousands)	March 26, 2022		December 25, 2021

Segment assets:
Piping Systems	$	1,275,856	$	1,160,272
Industrial Metals	199,157		173,290
Climate	272,308		250,107
General Corporate	198,629		145,267

	$	1,945,950	$	1,728,936


	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
(In thousands)	Balance Sheet Location	March 26, 2022		December 25, 2021		Balance Sheet Location	March 26, 2022		December 25, 2021

Commodity contracts - gains	Other current assets	$	4,471	$	1,150	Other current liabilities	$	466	$	—
Commodity contracts - losses	Other current assets	(41)		(46)		Other current liabilities	(4,798)		(353)

Total derivatives (1)		$	4,430	$	1,104		$	(4,332)	$	(353)


	For the Quarter Ended March 26, 2022
(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	$	3,781	Cost of goods sold	$	(1,722)
Other	32		Other	—

Total	$	3,813	Total	$	(1,722)


	For the Quarter Ended March 27, 2021
(In thousands)	Gain (Loss) Recognized in AOCI (Effective Portion), Net of Tax		Classification Gains (Losses)	(Gain) Loss Reclassified from AOCI (Effective Portion), Net of Tax

Cash flow hedges:
Commodity contracts	$	1,491	Cost of goods sold	$	(996)
Other	(3)		Other	1

Total	$	1,488	Total	$	(995)


	For the Quarter Ended
(In thousands)	March 26, 2022		March 27, 2021

Cash flows from financing activities


Repurchase of common stock	(3,972)		—

Issuance of debt	—		100,000
Repayments of debt	(56)		(35,288)
Issuance of debt by consolidated joint ventures, net	—		45
Net cash (used) received to settle stock-based awards	(230)		221


Net cash (used in) provided by financing activities	(4,258)		64,978

Effect of exchange rate changes on cash	301		784

Increase in cash, cash equivalents, and restricted cash	60,821		21,655
Cash, cash equivalents, and restricted cash at the beginning of the period	90,376		127,376

Cash, cash equivalents, and restricted cash at the end of the period	$	151,197	$	149,031


(In thousands)	March 26, 2022		December 25, 2021

Raw materials and supplies	$	162,623	$	130,133
Work-in-process	64,130		64,989
Finished goods	255,061		245,226
Valuation reserves	(9,865)		(10,104)

Inventories	$	471,949	$	430,244


	For the Quarter Ended
(In thousands)	March 26, 2022		March 27, 2021

Pension benefits:

Interest cost	$	394	$	313
Expected return on plan assets	(967)		(904)
Amortization of net loss	244		378

Net periodic benefit income	$	(329)	$	(213)

Other benefits:
Service cost	$	72	$	65
Interest cost	103		87
Amortization of prior service credit	(118)		(118)
Amortization of net gain	(58)		(31)


Net periodic benefit (income) cost	$	(1)	$	3


	Quarter-to- Date
Net selling price in core product lines	20.4	%
Unit sales volume in core product lines	(2.3)
Acquisitions	2.5
Dispositions	(3.3)
Other	6.1

	23.4	%


	For the Quarter Ended March 26, 2022
(In thousands)	Cumulative Translation Adjustment		Unrealized Gain (Loss) on Derivatives		Pension/OPEB Liability Adjustment		Attributable to Unconsol. Affiliates		Total

Balance as of December 25, 2021	$	(42,303)	$	803	$	(11,500)	$	(347)	$	(53,347)

Other comprehensive income before reclassifications	1,246		3,813		357		2,148		7,564
Amounts reclassified from AOCI	—		(1,722)		63		—		(1,659)

Net current-period other comprehensive income	1,246		2,091		420		2,148		5,905


Balance as of March 26, 2022	$	(41,057)	$	2,894	$	(11,080)	$	1,801	$	(47,442)


	Amount reclassified from AOCI
	For the Quarter Ended
(In thousands)	March 26, 2022		March 27, 2021		Affected line item

Unrealized gains on derivative commodity contracts	$	(2,224)	$	(248)	Cost of goods sold

	502		68		Income tax expense

	$	(1,722)	$	(180)	Net of tax and noncontrolling interests

Amortization of net loss and prior service cost on employee benefit plans	$	68	$	229	Other income, net
	(5)		(37)		Income tax benefit

	$	63	$	192	Net of tax and noncontrolling interests


	For the Quarter Ended				Percent Change
(In thousands)	March 26, 2022		March 27, 2021		2022 vs. 2021

Net sales	$	1,010,002	$	818,148	23.4	%
Operating income	212,701		92,540		129.8
Net income	158,316		63,107		150.9


	Quarter-to- Date
Net selling price in core product lines	26.8	%
Unit sales volume in core product lines	(1.3)
Acquisitions	1.9
Dispositions	(0.7)
Other	1.7

	28.4	%


	Quarter-to- Date
Net selling price in core product lines	12.9	%
Unit sales volume in core product lines	(7.2)

Dispositions	(5.4)
Other	5.4

	5.7	%


(In thousands)	2022		2021

Increase (decrease) in:
Cash, cash equivalents, and restricted cash	$	60,821	$	21,655
Property, plant, and equipment, net	(4,851)		8,281
Total debt	35		64,864
Working capital, net of cash and current debt	101,058		110,409

Net cash provided by (used in) operating activities	62,859		(22,581)
Net cash provided by (used in) investing activities	1,919		(21,526)
Net cash (used in) provided by financing activities	(4,258)		64,978


	(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 26, 2021 - January 22, 2022	—	$	—	—	13,478,744
January 23, 2022 - February 19, 2022	1,599	$	57.97	—	13,478,744
February 20, 2022 - March 26, 2022	86,097	$	55.34	72,273	13,406,471
Total	87,696			72,273


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 20, 2022			Chief Financial Officer and Treasurer
Date			(Principal Financial and Accounting Officer)


			/s/ Anthony J. Steinriede
April 20, 2022			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 20, 2022
			/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 20, 2022