SPRINGFIELD, Mo., April 27, 2018 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC:MUEL) today announced earnings for the quarter ended March 31, 2018.
| PAUL MUELLER COMPANY | |||||||||||||||||||||||||||||
| THREE-MONTH REPORT | |||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||||||||||
| (In thousands) | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| March 31 | March 31 | ||||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
| Net Sales | $ | 46,078 | $ | 37,611 | $ | 176,424 | $ | 164,471 | |||||||||||||||||||||
| Cost of Sales | 33,802 | 27,017 | 125,772 | 121,463 | |||||||||||||||||||||||||
| Gross Profit | $ | 12,276 | $ | 10,594 | $ | 50,652 | $ | 43,008 | |||||||||||||||||||||
| Selling, General and Administrative Expense | 11,422 | 10,483 | 44,049 | 47,506 | |||||||||||||||||||||||||
| Operating Income (Loss) | $ | 854 | $ | 111 | $ | 6,603 | $ | (4,498 | ) | ||||||||||||||||||||
| Interest Expense | (346 | ) | (50 | ) | (626 | ) | (308 | ) | |||||||||||||||||||||
| Other Income (Expense) | 48 | (90 | ) | (2,045 | ) | 167 | |||||||||||||||||||||||
| Income (Loss) before Provision (Benefit) for Income Taxes | $ | 556 | $ | (29 | ) | $ | 3,932 | $ | (4,639 | ) | |||||||||||||||||||
| Provision (Benefit) for Income Taxes | 174 | 114 | 5,733 | (1,304 | ) | ||||||||||||||||||||||||
| Net Income (Loss) | $ | 382 | $ | (143 | ) | $ | (1,801 | ) | $ | (3,335 | ) | ||||||||||||||||||
| Earnings (Loss) per Common Share –– | Basic | $ | 0.32 | ($0.12 | ) | ($1.51 | ) | ($2.78 | ) | ||||||||||||||||||||
| Diluted | $ | 0.32 | ($0.12 | ) | ($1.51 | ) | ($2.78 | ) | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| March 31 | |||||||||||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||||||||||
| Net Income (Loss) | $ | 382 | $ | (143 | ) | ||||||||||||||||||||||||
| Other Comprehensive Income, Net of Tax: | |||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | 727 | 556 | |||||||||||||||||||||||||||
| Amortization of De-Designated Hedges | - | 3 | |||||||||||||||||||||||||||
| Comprehensive Income | $ | 1,109 | $ | 416 | |||||||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||||||||||
| March 31 | December 31 | ||||||||||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||||||||||
| Cash and Short-Term Investments | $ | 2,266 | $ | 6,571 | |||||||||||||||||||||||||
| Accounts Receivable | 27,424 | 22,680 | |||||||||||||||||||||||||||
| Inventories | 34,943 | 31,080 | |||||||||||||||||||||||||||
| Other Current Assets | 3,047 | 2,519 | |||||||||||||||||||||||||||
| Current Assets | $ | 67,680 | $ | 62,850 | |||||||||||||||||||||||||
| Net Property, Plant, and Equipment | 57,725 | 51,586 | |||||||||||||||||||||||||||
| Other Assets | 25,772 | 25,458 | |||||||||||||||||||||||||||
| Total Assets | $ | 151,177 | $ | 139,894 | |||||||||||||||||||||||||
| Accounts Payable | $ | 16,337 | $ | 14,242 | |||||||||||||||||||||||||
| Current Maturities and Short-Term debt | 9,509 | 4,021 | |||||||||||||||||||||||||||
| Other Current Liabilities | 33,996 | 31,966 | |||||||||||||||||||||||||||
| Current Liabilities | $ | 59,842 | $ | 50,229 | |||||||||||||||||||||||||
| Long-Term Debt | 28,131 | 23,562 | |||||||||||||||||||||||||||
| Long-Term Pension Liabilities | 30,708 | 34,766 | |||||||||||||||||||||||||||
| Other Long-Term Liabilities | 3,408 | 3,356 | |||||||||||||||||||||||||||
| Total Liabilities | $ | 122,089 | $ | 111,913 | |||||||||||||||||||||||||
| Shareholders' Investment | 29,088 | 27,981 | |||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Investment | $ | 151,177 | $ | 139,894 | |||||||||||||||||||||||||
| SELECTED FINANCIAL DATA | |||||||||||||||||||||||||||||
| March 31 | December 31 | ||||||||||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||||||||||
| Book Value per Common Share | $ | 24.32 | $ | 23.39 | |||||||||||||||||||||||||
| Total Shares Outstanding | 1,196,216 | 1,196,261 | |||||||||||||||||||||||||||
| Backlog | $ | 93,951 | $ | 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 | 382 | 382 | |||||||||||||||||||||||||||
| Other Comprehensive Income, Net of Tax | 727 | 727 | |||||||||||||||||||||||||||
| Treasury Stock Acquisition | (2 | ) | (2 | ) | |||||||||||||||||||||||||
| Balance, March 31, 2018 | $ | 1,508 | $ | 9,708 | $ | 59,638 | $ | (6,331 | ) | $ | (35,435 | ) | $ | 29,088 | |||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||||||||||||||||
| Three Months Ended March 31, 2018 | Three Months Ended March 31, 2017 | ||||||||||||||||||||||||||||
| Operating Activities: | |||||||||||||||||||||||||||||
| Net Income (Loss) | $ | 382 | $ | (143 | ) | ||||||||||||||||||||||||
| Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: | |||||||||||||||||||||||||||||
| Pension Contributions (Greater) Less than Expense | (4,058 | ) | 27 | ||||||||||||||||||||||||||
| Bad Debt Expense (Recovery) | 5 | - | |||||||||||||||||||||||||||
| Depreciation & Amortization | 1,329 | 1,432 | |||||||||||||||||||||||||||
| (Gain) Loss on Sales of Equipment | (152 | ) | (12 | ) | |||||||||||||||||||||||||
| Other | - | (20 | ) | ||||||||||||||||||||||||||
| Change in Assets and Liabilities | |||||||||||||||||||||||||||||
| (Inc) Dec in Accts and Notes Receivable | (4,748 | ) | (2,115 | ) | |||||||||||||||||||||||||
| (Inc) Dec in Cost in Excess of Estimated Earnings and Billings | (53 | ) | (597 | ) | |||||||||||||||||||||||||
| (Inc) Dec in Inventories | (3,865 | ) | (1,104 | ) | |||||||||||||||||||||||||
| (Inc) Dec in Prepayments | (474 | ) | (566 | ) | |||||||||||||||||||||||||
| (Inc) Dec Other Assets | (1 | ) | - | ||||||||||||||||||||||||||
| Inc (Dec) in Accounts Payable | 3,084 | 1,084 | |||||||||||||||||||||||||||
| Inc (Dec) Other Accrued Expenses | (3,859 | ) | 2,067 | ||||||||||||||||||||||||||
| Inc (Dec) Advanced Billings | 3,804 | 1,425 | |||||||||||||||||||||||||||
| Inc (Dec) in Billings in Excess of Costs and Estimated Earnings | 1,096 | 1,483 | |||||||||||||||||||||||||||
| Inc (Dec) In Other Liabilities | 51 | 17 | |||||||||||||||||||||||||||
| Net Cash (Required) Provided by Operating Activities | $ | (7,459 | ) | $ | 2,978 | ||||||||||||||||||||||||
| Investing Activities | |||||||||||||||||||||||||||||
| Proceeds from Sales of Equipment | 152 | 80 | |||||||||||||||||||||||||||
| Additions to Property and Equipment | (7,452 | ) | (857 | ) | |||||||||||||||||||||||||
| Net Cash (Required) for Investing Activities | $ | (7,300 | ) | $ | (777 | ) | |||||||||||||||||||||||
| Financing Activities | |||||||||||||||||||||||||||||
| Proceeds (Repayment) of Short-Term Borrowings, Net | 5,488 | (1,828 | ) | ||||||||||||||||||||||||||
| Proceeds (Repayment) of Long-Term Debt | 4,569 | (101 | ) | ||||||||||||||||||||||||||
| Treasury Stock Acquisitions | (2 | ) | (102 | ) | |||||||||||||||||||||||||
| Net Cash Provided (Required) for Financing Activities | $ | 10,055 | $ | (2,031 | ) | ||||||||||||||||||||||||
| Effect of Exchange Rate Changes | 399 | (31 | ) | ||||||||||||||||||||||||||
| Net (Decrease) Increase in Cash and Cash Equivalents | $ | (4,305 | ) | $ | 139 | ||||||||||||||||||||||||
| Cash and Cash Equivalents at Beginning of Year | 6,571 | 357 | |||||||||||||||||||||||||||
| Cash and Cash Equivalents at End of Quarter | $ | 2,266 | $ | 496 | |||||||||||||||||||||||||
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 March 31.
| Three Months Ended March 31 | ||||||
| Revenue | 2018 | 2017 | ||||
| Domestic | $ | 32,633 | $ | 27,419 | ||
| Mueller BV | $ | 13,608 | $ | 10,253 | ||
| Eliminations | $ | (163 | ) | $ | (61 | ) |
| Net Revenue | $ | 46,078 | $ | 37,611 | ||
The chart below depicts the net revenue on a consolidating basis for the twelve months ended March 31.
| Twelve Months Ended March 31 | ||||||
| Revenue | 2018 | 2017 | ||||
| Domestic | $ | 125,521 | $ | 111,591 | ||
| Mueller BV | $ | 51,516 | $ | 53,786 | ||
| Eliminations | $ | (613 | ) | $ | (906 | ) |
| Net Revenue | $ | 176,424 | $ | 164,471 | ||
The chart below depicts the net income on a consolidating basis for the three months ended March 31.
| Three Months Ended March 31 | ||||||
| Net Income | 2018 | 2017 | ||||
| Domestic | $ | 854 | $ | 528 | ||
| Mueller BV | $ | (497 | ) | $ | (727 | ) |
| Eliminations | $ | 25 | $ | 56 | ||
| Net Income | $ | 382 | $ | (143 | ) | |
The chart below depicts the net income on a consolidating basis for the twelve months ended March 31.
| Twelve Months Ended March 31 | ||||||
| Net Income | 2018 | 2017 | ||||
| Domestic | $ | 184 | $ | (4,076 | ) | |
| Mueller BV | $ | (2,121 | ) | $ | 598 | |
| Eliminations | $ | 136 | $ | 143 | ||
| Net Income | $ | (1,801 | ) | $ | (3,335 | ) |
B. Revenue for the 1st quarter of $46.1 million was up $8.5 million (22.5%) over the 1st quarter of 2017. Revenue for the trailing 12 months of $176.4 million was up $12.0 million (7.3%) over the 12 months ending March 31, 2017. Our pharmaceutical group led the way with a quarter over quarter increase of $6.6 million as the large pharmaceutical order that was being worked on for most of 2017 began to ship.
Net income for the 1st quarter was $0.4 million compared to a slight loss for the first quarter of 2017. The first quarter 2018 results were dampened by an increase in the LIFO reserve of $0.6 million before tax.
Net loss for the trailing twelve months was $1.8 million. These results were impacted by a pretax increase in the LIFO reserve of $1.3 million; one-time tax expense from the new tax legislation of $4.2 million; and approximately $2.0 million in non-reoccurring costs related to the consolidation in The Netherlands.
The net loss of $3.3 million for the twelve months ending March 31, 2017 was affected by a pretax impact of $0.5 increase in LIFO reserve and the $6.7 million in settlement charges from the lump sum pension payments.
C. Backlog remained nearly unchanged for the quarter and is a robust $94.0 million at March 31st. Domestic backlog has decreased by $3.1 million for the quarter to end at $67.1 million. Backlog in The Netherlands continued to grow and was up $3.6 million to $28.5 million.
D. Tax expense of approximately $4.2 million was recognized in December due to new United States federal tax legislation under the Tax Cuts and Jobs Act (TCJA) enacted in December 2017. 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 has recorded for 2017 a reasonable estimate of the effects of the TCJA, and accordingly such amounts are provisional. Final adjustments, if necessary, will be determined in 2018 and recorded as a measurement period adjustment through 2018 tax expense.
E. Production started in the new facility in Groenlo as scheduled on April 9th. Total debt on the new building is $25.9 million as of March 31st.
F. The pre-tax results for the three months ended March 31, 2018, were unfavorably affected by a $559,000 increase in the LIFO reserve. The pre-tax results for the twelve months ended December 31, 2018, were unfavorably affected by a $1,256,000 increase in the LIFO reserve. The pre-tax results for the twelve months ended December 31, 2017, were unfavorably affected by a $500,000 increase in the LIFO reserve.
G. The Company completed the lump sum pension payments to participants who elected to take the settlement. These payments, paid from the assets of the plans, were available for participants who were no longer employed by the company as of May 6, 2016, but who had not yet begun receiving their benefit. The eligible participants represented about a quarter of the obligations of the plans and just over 50% of those eligible elected the settlement. The payments, totaling $13.8 million to 218 participants, were made on or about September 26, 2016. The results for twelve months ended December 31, 2016 contained a negative noncash effect on the pre-tax earnings of the Company of $6.7 million ($4.2 million net of tax).
H. 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 1.07 for March, 2017; 1.20 for December, 2017 and 1.23 for March, 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 29 of the Company’s 2017 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 2017 annual report, available at www.paulmueller.com.
Press Contact: Jay Holden | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9422
jholden@paulmueller.com | http://paulmueller.com