SPRINGFIELD, Mo., March 20, 2019 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended December 31, 2018.
| PAUL MUELLER COMPANY | ||||||||||||||||||||||||||||||
| TWELVE-MONTH REPORT | ||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||
| December 31 | December 31 | |||||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||
| Net Sales | $ | 45,618 | $ | 42,445 | $ | 201,210 | $ | 167,957 | ||||||||||||||||||||||
| Cost of Sales | 33,942 | 29,762 | 150,260 | 118,987 | ||||||||||||||||||||||||||
| Gross Profit | $ | 11,676 | $ | 12,683 | $ | 50,950 | $ | 48,970 | ||||||||||||||||||||||
| Selling, General and Administrative Expense | 11,965 | 11,843 | 47,137 | 44,046 | ||||||||||||||||||||||||||
| Operating Income (Loss) | $ | (289 | ) | $ | 840 | $ | 3,813 | $ | 4,924 | |||||||||||||||||||||
| Interest Expense | (187 | ) | (82 | ) | (920 | ) | (330 | ) | ||||||||||||||||||||||
| Other Income (Expense) | (1 | ) | (1,345 | ) | 218 | (1,247 | ) | |||||||||||||||||||||||
| Income (Loss) before Provision (Benefit) for Income Taxes | $ | (477 | ) | $ | (587 | ) | $ | 3,111 | $ | 3,347 | ||||||||||||||||||||
| Provision (Benefit) for Income Taxes | (337 | ) | 4,055 | 472 | 5,673 | |||||||||||||||||||||||||
| Net Income (Loss) | $ | (140 | ) | $ | (4,642 | ) | $ | 2,639 | $ | (2,326 | ) | |||||||||||||||||||
| Earnings (Loss) per Common Share –– | Basic | ($0.12 | ) | ($3.88 | ) | $2.21 | ($1.94 | ) | ||||||||||||||||||||||
| Diluted | ($0.12 | ) | ($3.88 | ) | $2.21 | ($1.94 | ) | |||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||||||||||||||
| Twelve Months Ended | ||||||||||||||||||||||||||||||
| December 31 | ||||||||||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||||||||||
| Net Income (Loss) | $ | 2,639 | $ | (2,326 | ) | |||||||||||||||||||||||||
| Other Comprehensive Income (Loss), Net of Tax: | ||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | (1,659 | ) | 4,061 | |||||||||||||||||||||||||||
| Change in Pension Liability | (1,330 | ) | (4,121 | ) | ||||||||||||||||||||||||||
| Amortization of De-Designated Hedges | - | 3 | ||||||||||||||||||||||||||||
| Comprehensive Income (Loss) | $ | (350 | ) | $ | (2,383 | ) | ||||||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||||||
| December 31 | December 31 | |||||||||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||||||||||
| Cash and Short-Term Investments | $ | 715 | $ | 6,571 | ||||||||||||||||||||||||||
| Accounts Receivable | 27,533 | 22,680 | ||||||||||||||||||||||||||||
| Inventories | 26,678 | 31,080 | ||||||||||||||||||||||||||||
| Other Current Assets | 2,066 | 2,519 | ||||||||||||||||||||||||||||
| Current Assets | $ | 56,992 | $ | 62,850 | ||||||||||||||||||||||||||
| Net Property, Plant, and Equipment | 50,699 | 51,586 | ||||||||||||||||||||||||||||
| Other Assets | 22,497 | 25,458 | ||||||||||||||||||||||||||||
| Total Assets | $ | 130,188 | $ | 139,894 | ||||||||||||||||||||||||||
| Accounts Payable | $ | 11,177 | $ | 14,242 | ||||||||||||||||||||||||||
| Current Maturities and Short-Term debt | 10,332 | 4,021 | ||||||||||||||||||||||||||||
| Other Current Liabilities | 26,131 | 31,966 | ||||||||||||||||||||||||||||
| Current Liabilities | $ | 47,640 | $ | 50,229 | ||||||||||||||||||||||||||
| Long-Term Debt | 21,478 | 23,562 | ||||||||||||||||||||||||||||
| Long-Term Pension Liabilities | 32,081 | 34,766 | ||||||||||||||||||||||||||||
| Other Long-Term Liabilities | 1,361 | 3,356 | ||||||||||||||||||||||||||||
| Total Liabilities | 102,560 | 111,913 | ||||||||||||||||||||||||||||
| Shareholders' Investment | 27,628 | 27,981 | ||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Investment | $ | 130,188 | $ | 139,894 | ||||||||||||||||||||||||||
| SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||||
| December 31 | December 31 | |||||||||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||||||||||
| Book Value per Common Share | $ | 23.10 | $ | 23.39 | ||||||||||||||||||||||||||
| Total Shares Outstanding | 1,196,187 | 1,196,261 | ||||||||||||||||||||||||||||
| Backlog | $ | 97,354 | $ | 94,043 | ||||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT | ||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||
| Common Stock | Paid-in Surplus | Retained Earnings | Treasury Stock | |||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||
| Balance, December 31, 2017 | $ | 1,508 | $ | 9,708 | $ | 59,256 | $ | (6,329 | ) | $ | (36,162 | ) | $ | 27,981 | ||||||||||||||||
| Add (Deduct): | ||||||||||||||||||||||||||||||
| Net Income | 2,639 | 2,639 | ||||||||||||||||||||||||||||
| Other Comprehensive Income, Net of Tax | (2,989 | ) | (2,989 | ) | ||||||||||||||||||||||||||
| Treasury Stock Acquisition | (3 | ) | (3 | ) | ||||||||||||||||||||||||||
| Balance, December 31, 2018 | $ | 1,508 | $ | 9,708 | $ | 61,895 | $ | (6,332 | ) | $ | (39,151 | ) | $ | 27,628 | ||||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||||||||||||||||
| Twelve Months Ended December 31, 2018 | Twelve Months Ended December 31, 2017 | |||||||||||||||||||||||||||||
| Operating Activities: | ||||||||||||||||||||||||||||||
| Net Income (Loss) | $ | 2,639 | $ | (2,326 | ) | |||||||||||||||||||||||||
| Adjustment to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | ||||||||||||||||||||||||||||||
| Pension Contributions (Greater) than Expense | (4,015 | ) | (984 | ) | ||||||||||||||||||||||||||
| Bad Debt Expense (Recovery) | 161 | 28 | ||||||||||||||||||||||||||||
| Depreciation & Amortization | 5,794 | 5,747 | ||||||||||||||||||||||||||||
| Deferred Tax (Benefit) Expense | 1,182 | 5,389 | ||||||||||||||||||||||||||||
| (Gain) Loss on Sales of Equipment | (164 | ) | (46 | ) | ||||||||||||||||||||||||||
| Other | - | (20 | ) | |||||||||||||||||||||||||||
| Change in Assets and Liabilities | ||||||||||||||||||||||||||||||
| (Inc) Dec in Accts and Notes Receivable | (4,856 | ) | (4,405 | ) | ||||||||||||||||||||||||||
| (Inc) Dec in Cost in Excess of Estimated Earnings and Billings | (182 | ) | 97 | |||||||||||||||||||||||||||
| (Inc) Dec in Inventories | 4,402 | (6,953 | ) | |||||||||||||||||||||||||||
| (Inc) Dec in Prepayments | 2,000 | (375 | ) | |||||||||||||||||||||||||||
| (Inc) Dec Other Assets | (57 | ) | 23 | |||||||||||||||||||||||||||
| (Inc) Dec in Deferred Taxes | (422 | ) | (1,315 | ) | ||||||||||||||||||||||||||
| Inc (Dec) in Accounts Payable | (3,065 | ) | 5,797 | |||||||||||||||||||||||||||
| Inc (Dec) Other Accrued Expenses | (1,805 | ) | 5,119 | |||||||||||||||||||||||||||
| Inc (Dec) Advanced Billings | (2,500 | ) | 5,444 | |||||||||||||||||||||||||||
| Inc (Dec) in Billings in Excess of Costs and Estimated Earnings | (1,529 | ) | 674 | |||||||||||||||||||||||||||
| Inc (Dec) In Long Term Liabilities | (1,997 | ) | 394 | |||||||||||||||||||||||||||
| Net Cash (Required) Provided by Operating Activities | $ | (4,414 | ) | $ | 12,288 | |||||||||||||||||||||||||
| Investing Activities | ||||||||||||||||||||||||||||||
| Proceeds from Sales of Equipment | 173 | 172 | ||||||||||||||||||||||||||||
| Additions to Property, Plant, and Equipment | (4,838 | ) | (23,750 | ) | ||||||||||||||||||||||||||
| Net Cash (Required) for Investing Activities | $ | (4,665 | ) | $ | (23,578 | ) | ||||||||||||||||||||||||
| Financing Activities | ||||||||||||||||||||||||||||||
| Proceeds (Repayment) of Short-Term Borrowings, Net | 6,313 | (4,747 | ) | |||||||||||||||||||||||||||
| (Repayment) Proceeds of Long-Term Debt | (922 | ) | 19,004 | |||||||||||||||||||||||||||
| Treasury Stock Acquisitions | (3 | ) | (102 | ) | ||||||||||||||||||||||||||
| Net Cash Provided for Financing Activities | $ | 5,388 | $ | 14,155 | ||||||||||||||||||||||||||
| Effect of Exchange Rate Changes | (2,165 | ) | 3,349 | |||||||||||||||||||||||||||
| Net (Decrease) Increase in Cash and Cash Equivalents | $ | (5,856 | ) | $ | 6,214 | |||||||||||||||||||||||||
| Cash and Cash Equivalents at Beginning of Year | 6,571 | 357 | ||||||||||||||||||||||||||||
| Cash and Cash Equivalents at End of Year | $ | 715 | $ | 6,571 | ||||||||||||||||||||||||||
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 December 31.
| Three Months Ended December 31 | ||||||||||
| Revenue | 2018 | 2017 | ||||||||
| Domestic | $31,188 | $30,926 | ||||||||
| Mueller BV | $14,730 | $11,607 | ||||||||
| Eliminations | ($300 | ) | ($88 | ) | ||||||
| Net Revenue | $45,618 | $42,445 | ||||||||
The chart below depicts the net revenue on a consolidating basis for the twelve months ended December 31.
| Twelve Months Ended December 31 | ||||||||||
| Revenue | 2018 | 2017 | ||||||||
| Domestic | $137,090 | $120,307 | ||||||||
| Mueller BV | $65,341 | $48,162 | ||||||||
| Eliminations | ($1,221 | ) | ($512 | ) | ||||||
| Net Revenue | $201,210 | $167,957 | ||||||||
The chart below depicts the net income on a consolidating basis for the three months ended December 31.
| Three Months Ended December 31 | ||||||||||
| Net Income | 2018 | 2017 | ||||||||
| Domestic | $995 | ($2,994 | ) | |||||||
| Mueller BV | ($1,150 | ) | ($1,748 | ) | ||||||
| Eliminations | $15 | $100 | ||||||||
| Net Income | ($140 | ) | ($4,642 | ) | ||||||
The chart below depicts the net income on a consolidating basis for the twelve months ended December 31.
| Twelve Months Ended December 31 | ||||||||||
| Net Income | 2018 | 2017 | ||||||||
| Domestic | $4,686 | ($143 | ) | |||||||
| Mueller BV | ($2,083 | ) | ($2,350 | ) | ||||||
| Eliminations | $36 | $167 | ||||||||
| Net Income | $2,639 | ($2,326 | ) | |||||||
- Backlog is at $97.4 million; up slightly from the $94.0 million at the end of 2017. Domestic backlog has increased $13.5 million to $83.6 million, primarily from a large pharmaceutical order. Backlog in The Netherlands is at $13.8 million; down $10.2 million after shipping a large heat transfer order to India.
- Tax expense of approximately $4.2 million was recognized in December 2017 due to new United States federal tax legislation under the Tax Cuts and Jobs Act (TCJA). This includes a $0.9 million transition tax expense estimate and $3.3 million tax expense due to the revaluation of the deferred tax asset due to a decrease in the tax rate. In certain cases, the Company recorded for 2017 a reasonable estimate of the effects of the TCJA, and accordingly such amounts are provisional. In September 2018, tax expense was increased by $0.2 million to finalize the transition tax for 2017.
- The pre-tax results for the three months ended December 31, 2018, were favorably affected by a $0.1 million decrease in the LIFO reserve. The pre-tax results for the twelve months ended December 31, 2018, were unfavorably affected by a $2.1 million increase in the LIFO reserve. The pre-tax results for the three months ended December 31, 2017, were unfavorably affected by a $0.2 million increase in the LIFO reserve. The pre-tax results for the twelve months ended December 31, 2017, were unfavorably affected by a $0.7 million increase in the LIFO reserve.
- Mueller B.V. was in violation of certain financial covenants in its bank borrowing facility and its notes payable for the construction of the new building. On March 4, 2019, the Company loaned Mueller B.V. $3.4 million in subordinated debt from the Company’s available cash and borrowing on its domestic facility. This amount plus an additional $1.1 million of subordinated debt loaned to Mueller B.V. in November 2018 was used to pay down on the variable rate note payable on March 8, 2019. In return, the bank waived the loan covenant violations as of December 31, 2018, and any possible future violations through March 31, 2020. In addition, Mueller B.V. agreed to reduce their capacity of the bank borrowing facility from $8.0 million to $6.8 million.
- 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 1.20 for December, 2017 and 1.14 for December, 2018, 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 on page 31 of the Company’s 2018 Annual Report, 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 2018 annual report, available at www.paulmueller.com.
Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9346