Paul Mueller Company Announces Its First Quarter Earnings of 2024
SPRINGFIELD, Mo., April 26, 2024 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended March 31, 2024. PAUL MUELLER COMPANYTHREE-MONTH REPORT(In thousands) CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Twelve Months Ended March 31 March 31 2024 2023 2024 2023 Net Sales $50,356 $56,351 $223,161 $207,096Cost of Sales 34,560 39,554 153,631 159,979Gross Profit $15,796 $16,797 $69,530 $47,117Selling, General and Administrative Expense10,358 12,587 86,040 37,358Operating Income (Loss) $5,438 $4,210 $(16,510) $9,759Interest Expense (1,248) (97) (1,501) (406)Other Income 1,544 720 3,491 1,571Income (Loss) before Provision (Benefit) for Income Taxes$5,734 $4,833 $(14,520) $10,924Provision (Benefit) for Income Taxes 1,285 1,166 (5,413) 2,526Net Income (Loss) $4,449 $3,667 $(9,107) $8,398 Earnings (Loss) per Common Share ––Basic and Diluted$4.10 $3.38 $(8.39) $7.74 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended March 31 2024 2023 Net Income $4,449 $3,667Other Comprehensive Income (Loss), Net of Tax: Foreign Currency Translation Adjustment (239) 164Comprehensive Income $4,210 $3,831 CONSOLIDATED BALANCE SHEETS March 31 December 31 2024 2023 Cash $5,644 $1,883Marketable Securities 31,687 32,042Accounts Receivable 25,209 25,166Inventories (FIFO) 47,689 45,910LIFO Reserve (21,557) (21,774)Inventories (LIFO) 26,132 24,136Current Net Investments in Sales-Type Leases 28 27Other Current Assets 7,344 3,537Current Assets $96,044 $86,791 Net Property, Plant, and Equipment 42,854 42,011Right of Use Assets 2,322 2,421Other Assets 2,372 2,590Long-Term Net Investments in Sales-Type Leases 480 456Total Assets $144,072 $134,269 Accounts Payable $11,993 $11,041Current Maturities and Short-Term debt 632 640Current Lease Liabilities 364 402Advance Billings 33,434 27,383Pension Liabilities 32 32Other Current Liabilities 18,722 19,599Current Liabilities $65,177 $59,097 Long-Term Debt 8,616 8,880Long-Term Pension Liabilities 225 233Other Long-Term Liabilities 1,775 1,768Lease Liabilities 722 775Total Liabilities $76,515 $70,753Shareholders' Investment 67,557 63,516Total Liabilities and Shareholders' Investment $144,072 $134,269 SELECTED FINANCIAL DATA March 31 December 31 2024 2023Book Value per Common Share $62.22 $58.50Total Shares Outstanding 1,085,711 1,085,711Backlog $95,196 $97,350 CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT Accumulated Other Comprehensive Income (Loss) Common Stock Paid-in Surplus Retained Earnings Treasury Stock TotalBalance, December 31, 2023 $1,508 $9,708 $67,181 $(10,787) $(4,094) $63,516Add (Deduct): Net Income 4,449 4,449 Other Comprehensive (Loss) Net of Tax (239) (239) Dividends, $.60 per Common Share (163) (163) Other $(6) (6)Balance, March 31, 2024 $1,508 $9,708 $71,461 $(10,787) $(4,333) $67,557 CONSOLIDATED STATEMENT OF CASH FLOWS Three MonthsEndedMarch 31, 2024 Three MonthsEnded March 31,2023 Operating Activities: Net Income$4,449 $3,667 Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: Pension Contributions (Greater) Less than Expense(8) (409)Bad Debt Expense- 15Depreciation & Amortization1,736 1,560Loss (Gain) on Disposal of Equipment18 9Change in Assets and Liabilities (Inc) in Accts and Notes Receivable(42) (2,634)(Inc) in Cost in Excess of Estimated Earnings and Billings(35) -(Inc) in Inventories(1,901) -(Inc) in Prepayments(3,772) (2,937)(Inc) in Net Investment in Sales-Type Leases(25) (1,122)Dec (Inc) in Other Assets469 (46)Dec in Deferred Taxes- 240(Dec) Inc in Accounts Payable952 (204)Inc in Accrued Income Tax1,501 430Inc (Dec) in Accrued Expenses(654) 3,622(Dec) Inc in Advanced Billings6,051 (1,088)(Dec) in Billings in Excess of Costs and Estimated Earnings(1,730) (736)Inc in Lease Liability for Operating24 -Inc in Lease Liability for Financing- 131Principal payments on Lease Liability for Operating(41) (65)(Dec) in Long Term Liabilities(12) (58)(Dec) in Long Term Deferred Tax Liabilities(82) - Net Cash Provided by Operating Activities$6,898 $375 Investing Activities Intangibles- (62)Proceeds from Sales of Equipment15 2Purchases in Marketable Securities(12,221) (5,676)Proceeds from Sales of Marketable Securities12,575 8,496Additions to Property, Plant, and Equipment(3,064) (1,589) Net Cash (Required) for Investing Activities$(2,695) $1,171 Financing Activities Principal payments on Lease Liability for Financing(52) (46)Proceeds from Short-Term Borrowings277 1,407(Repayment) of Short-Term Borrowings(277) (1,407)(Repayment) of Long-Term Debt(158) (158)Dividends paid(163) (163) Net Cash (Required) for Financing Activities$(373) $(367) Effect of Exchange Rate Changes (69) 64 Net Increase in Cash $3,761 $1,243 Cash at Beginning of Year1,883 679 Cash at End of Quarter$5,644 $1,922 PAUL MUELLER COMPANYSUMMARIZED 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 31Revenue 2024 2023 Domestic$38,877 $45,585 Mueller BV$11,825 $11,304 Eliminations$(346)$(538)Net Revenue$50,356 $56,351 The chart below depicts the net revenue on a consolidating basis for the twelve months ended March 31. Twelve Months Ended March 31Revenue 2024 2023 Domestic$176,298 $162,662 Mueller BV$48,231 $45,680 Eliminations$(1,368)$(1,246)Net Revenue$223,161 $207,096 The chart below depicts the net income (loss) on a consolidating basis for the three months ended March 31. Three Months Ended March 31Net Income 2024 2023 Domestic$4,048 $4,450 Mueller BV$374 $(770)Eliminations$27 $(13)Net Income$4,449 $3,667 The chart below depicts the net income on a consolidating basis for the twelve months ended March 31. Twelve Months Ended March 31Net Income 2024 2023 Domestic$(11,730)$9,852 Mueller BV$2,621 $(1,435)Eliminations$2 $(19)Net Income (Loss)$(9,107)$8,398 B. March 31, 2024 backlog is $95.2 million compared to $122.8 million at March 31, 2023. The majority of this backlog is in the U.S. where the backlog is $87.8 million at March 31, 2024 compared to $115.4 million at March 31, 2023. The $27.6 million reduction in U.S. backlog is from all segments but primarily from the pharmaceutical, food and beverage, and component divisions coming off of record high backlogs. In the Netherlands, the backlog is relatively flat -- $7.9 million at March 31, 2024 versus $8.2 million on March 31, 2023. C. Revenue is down from the previous year by $6 million on a three-month basis but up $16.1 million on trailing twelve months. The lower first quarter revenue from last year is primarily from the timing of revenue recognition on the larger pharmaceutical projects and lower revenue from the components division coming off record revenue in late 2022 and early 2023. In the Netherlands, revenue is above last year by $0.5 million and $2.1 million on a three-month and twelve-month basis, respectively. The Dutch market is improving. Net Income is up $0.8 million on a three-month and down $17.5 million on a twelve-month basis before removing the pension settlement charges. In the Netherlands, earnings are up year over year by $1.1 million for three months and $4.1 million over twelve months. One-time restructuring charges accrued in March 2023 and the subsequent efficiencies achieved from the restructuring along with a price increase taken in the first quarter of 2023 on slightly higher volumes led to the improved earnings. We manage our business in the U.S. looking at earnings before tax (EBT) and excluding the effects of LIFO and non-reoccurring events such as the pension settlement. This non-GAAP adjusted EBT (as shown in the table below) is down $0.7 million for the three months but up $9.7 million for the trailing twelve months primarily from strong results in the pharmaceutical, food and beverage, and components divisions. Three Months Ended March 31 Twelve Months Ended March 31(In Thousands) 2024 2023 2024 2023 Domestic Net Income$4,048 $4,450 $(11,730)$9,852 Income Tax Expense$1,171 $1,405 $(4,991)$3,020 Domestic EBT - GAAP$5,219 $5,855 $(16,721)$12,872 LIFO Adjustment$(217)$(185) $51 $2,577 Pension Adjustment$- $- $41,774 $- Domestic EBT - Non-GAAP$5,002 $5,670 $25,104 $15,449 D. On March 12, 2024, the Board of Directors authorized a tender offer effective from March 15, 2024, through May 7, 2024, for up to $10 million with the option to go to $15 million of the Company’s common stock at a price of $80. As of April 26, 2024, $5.88 million in shares are tendered to the Company’s depository agent. On April 26, 2024, the Company announced that the limit was increased to $15 million. E. Effective March 14, 2024, the Company amended its domestic bank borrowing facility to extend the agreement until March 31, 2025, with the following changes: Capacity was reduced from $15 million to $10 million.Interest rate spread was changed from “SOFR+10” plus 1.15% to “SOFR+10” plus 1.35%.Financial leverage test of trailing twelve-month Debt/EBITDA was eliminated. F. The pre-tax results for the three months ended March 31, 2024, were favorably affected by $0.2 million decrease in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2024, were unfavorably affected by $0.1 million increase in the LIFO reserve. The pre-tax results for the three months ended March 31, 2023, were favorably affected by $0.2 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2023 were unfavorably affected by $2.6 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 1.09 for March 2023, 1.10 for December 2023, and 1.08 for March 2024, 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 2023 annual report, available at www.paulmueller.com. Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) [email protected] | http://paulmueller.com
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