Mueller Industries Inc 10-Q for FY2023 Q1

Mueller Industries Inc (MLI)

10-Q 2023-04-26 For: 2023-04-01

Added on April 09, 2026

About this 10-Q

Mueller Industries Inc filed this 10-Q on April 26, 2023, covering the quarter ended April 1, 2023 (FY2023 Q1).

Headline figures

Quarter ended April 1, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $971.19M; down 3.8% from $1.01B a year earlier
Net income: $173.24M; up 9.4% from net income of $158.32M a year earlier
Diluted EPS: $3.07; up 10.4% from $2.78 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 April 1, 2023
			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	23

	Item 3. – Quantitative and Qualitative Disclosures About Market Risk	31

	Item 4. – Controls and Procedures	32

Part II. Other Information

	Item 1. – Legal Proceedings	33

	Item 1A – Risk Factors	33

	Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds	34

	Item 6. – Exhibits	35

Signatures		36


	For the Quarter Ended
(In thousands, except per share data)	April 1, 2023		March 26, 2022

Net sales	$	971,192	$	1,010,002

Cost of goods sold	678,798		744,511
Depreciation and amortization	10,657		10,841
Selling, general, and administrative expense	52,631		47,456
Gain on sale of assets	—		(5,507)





Operating income	229,106		212,701

Interest expense	(143)		(158)
Interest income	6,235		160

Other income, net	2,236		620

Income before income taxes	237,434		213,323

Income tax expense	(61,357)		(54,199)
(Loss) income from unconsolidated affiliates, net of foreign tax	(984)		124

Consolidated net income	175,093		159,248

Net income attributable to noncontrolling interests	(1,854)		(932)

Net income attributable to Mueller Industries, Inc.	$	173,239	$	158,316

Weighted average shares for basic earnings per share	55,693		56,100
Effect of dilutive stock-based awards	707		810

Adjusted weighted average shares for diluted earnings per share	56,400		56,910

Basic earnings per share	$	3.11	$	2.82

Diluted earnings per share	$	3.07	$	2.78

Dividends per share	$	0.30	$	0.25


	For the Quarter Ended
(In thousands)	April 1, 2023		March 26, 2022

Consolidated net income	$	175,093	$	159,248

Other comprehensive income, net of tax:
Foreign currency translation	10,251		1,213
Net change with respect to derivative instruments and hedging activities, net of tax of $(272) and $(604)	954		2,091
Net change in pension and postretirement obligation adjustments, net of tax of $11 and $(134)	(8)		420
Attributable to unconsolidated affiliates, net of tax of $(373) and $(624)	1,285		2,148

Total other comprehensive income, net	12,482		5,872

Consolidated comprehensive income	187,575		165,120
Comprehensive income attributable to noncontrolling interests	(2,112)		(899)

Comprehensive income attributable to Mueller Industries, Inc.	$	185,463	$	164,221


	(Unaudited)
(In thousands, except share data)	April 1, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	611,399	$	461,018
Short-term investments	170,997		217,863
Accounts receivable, less allowance for doubtful accounts of $2,972 in 2023 and $2,687 in 2022	503,369		380,352
Inventories	452,826		448,919
Other current assets	28,420		26,501

Total current assets	1,767,011		1,534,653

Property, plant, and equipment, net	377,324		379,950
Operating lease right-of-use assets	29,897		22,892
Goodwill, net	158,172		157,588
Intangible assets, net	53,859		54,785
Investments in unconsolidated affiliates	72,395		72,364
Other assets	20,963		20,167

Total assets	$	2,479,621	$	2,242,399

Liabilities
Current liabilities:
Current portion of debt	$	1,108	$	811
Accounts payable	179,244		128,000
Accrued wages and other employee costs	36,689		61,915
Current portion of operating lease liabilities	6,249		4,942
Other current liabilities	183,455		152,627

Total current liabilities	406,745		348,295

Long-term debt, less current portion	1,251		1,218
Pension liabilities	2,115		4,078
Postretirement benefits other than pensions	9,145		8,977
Environmental reserves	16,060		16,380
Deferred income taxes	17,561		16,258
Noncurrent operating lease liabilities	22,773		16,880
Other noncurrent liabilities	16,502		16,349

Total liabilities	492,152		428,435

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 56,990,798 in 2023 and 57,001,617 in 2022	802		802
Additional paid-in capital	303,133		297,270
Retained earnings	2,215,939		2,059,796
Accumulated other comprehensive loss	(51,951)		(64,175)
Treasury common stock, at cost	(505,616)		(502,779)

Total Mueller Industries, Inc. stockholders' equity	1,962,307		1,790,914
Noncontrolling interests	25,162		23,050

Total equity	1,987,469		1,813,964

Commitments and contingencies	—		—

Total liabilities and equity	$	2,479,621	$	2,242,399


	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

Other income, net									2,236

Income before income taxes									$	237,434


	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)
Interest income									160
Other income, net									620

Income before income taxes									$	213,323


(In thousands)	April 1, 2023		December 31, 2022

Segment assets:
Piping Systems	$	1,196,717	$	1,088,940
Industrial Metals	173,429		160,702
Climate	270,993		279,940
General Corporate	838,482		712,817

	$	2,479,621	$	2,242,399


	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
(In thousands)	Balance Sheet Location	April 1, 2023		December 31, 2022		Balance Sheet Location	April 1, 2023		December 31, 2022

Commodity contracts - gains	Other current assets	$	3,070	$	3,746	Other current liabilities	$	5	$	—
Commodity contracts - losses	Other current assets	(68)		(1,483)		Other current liabilities	(30)		—

Total derivatives (1)		$	3,002	$	2,263		$	(25)	$	—


	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 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)


(In thousands)	April 1, 2023		December 31, 2022

Raw materials and supplies	$	135,231	$	133,189
Work-in-process	69,937		64,177
Finished goods	262,315		265,842
Valuation reserves	(14,657)		(14,289)

Inventories	$	452,826	$	448,919


	For the Quarter Ended
(In thousands)	April 1, 2023		March 26, 2022

Pension benefits:

Interest cost	$	594	$	394
Expected return on plan assets	(841)		(967)
Amortization of net loss	—		244

Net periodic benefit income	$	(247)	$	(329)

Other benefits:
Service cost	$	51	$	72
Interest cost	128		103
Amortization of prior service credit	(1)		(118)
Amortization of net gain	(97)		(58)


Net periodic benefit cost (income)	$	81	$	(1)


	Quarter-to- Date
Net selling price in core product lines	(1.3)	%
Unit sales volume in core product lines	(4.0)


Other	1.5

	(3.8)	%


	Quarter-to- Date
Net selling price in core product lines	(1.2)	%
Unit sales volume in core product lines	(5.4)


Other	0.8

	(5.8)	%


	For the Quarter Ended April 1, 2023
(In thousands)	Cumulative Translation Adjustment		Unrealized Gain (Loss) on Derivatives		Pension/OPEB Liability Adjustment		Attributable to Unconsol. Affiliates		Total

Balance as of December 31, 2022	$	(69,238)	$	1,486	$	1,222	$	2,355	$	(64,175)

Other comprehensive income before reclassifications	9,993		2,943		65		1,285		14,286
Amounts reclassified from AOCI	—		(1,989)		(73)		—		(2,062)

Net current-period other comprehensive income (loss)	9,993		954		(8)		1,285		12,224


Balance as of April 1, 2023	$	(59,245)	$	2,440	$	1,214	$	3,640	$	(51,951)


	Amount reclassified from AOCI
	For the Quarter Ended
(In thousands)	April 1, 2023		March 26, 2022		Affected line item

Unrealized gains on derivative commodity contracts	$	(2,551)	$	(2,224)	Cost of goods sold

	562		502		Income tax expense

	$	(1,989)	$	(1,722)	Net of tax and noncontrolling interests

Amortization of net loss and prior service cost on employee benefit plans	$	(98)	$	68	Other income, net
	25		(5)		Income tax expense (benefit)

	$	(73)	$	63	Net of tax and noncontrolling interests


	For the Quarter Ended				Percent Change
(In thousands)	April 1, 2023		March 26, 2022		2023 vs. 2022

Net sales	$	971,192	$	1,010,002	(3.8)	%
Operating income	229,106		212,701		7.7
Net income	173,239		158,316		9.4


	Quarter-to- Date
Net selling price in core product lines	(2.9)	%
Unit sales volume in core product lines	(1.3)


Other	(1.0)

	(5.2)	%


(In thousands)	2023		2022

Increase (decrease) in:
Cash, cash equivalents, and restricted cash	$	146,298	$	60,821
Short-term investments	(46,866)		—
Property, plant, and equipment, net	(2,626)		(4,851)
Total debt	330		35
Working capital, net of cash and current debt	23,824		101,058

Net cash provided by operating activities	111,618		62,859
Net cash provided by investing activities	51,206		1,919
Net cash used in financing activities	(19,099)		(4,258)


	(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)


January 1 - January 28, 2023	—	$	—	—	12,759,795
January 29 - February 25, 2023	6,150	$	72.74	—	12,759,795
February 26 - April 1, 2023	43,570	$	74.25	—	12,759,795
Total	49,720			—


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 26, 2023			Chief Financial Officer and Treasurer
Date			(Principal Financial and Accounting Officer)


			/s/ Anthony J. Steinriede
April 26, 2023			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 26, 2023
			/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 26, 2023