Paul Mueller Company Announces Its First Quarter Earnings of 2021

Springfield, Missouri, UNITED STATES


SPRINGFIELD, Mo., April 30, 2021 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended March 31, 2021.

 PAUL MUELLER COMPANY     
 THREE-MONTH REPORT     
 Unaudited     
       (In thousands)          
 CONSOLIDATED STATEMENTS OF INCOME     
                   
       Three Months Ended Twelve Months Ended     
       March 31 March 31     
       2021 2020 2021 2020     
                   
 Net Sales    $ 45,279 $ 42,160 $ 204,235 $ 197,455     
 Cost of Sales    31,838 30,299 141,852 140,908     
         Gross Profit  $ 13,441 $ 11,861 $ 62,383 $ 56,547     
 Selling, General and Administrative Expense 11,308 10,505 44,958 44,678     
 Goodwill Impairment Expense  - - 15,397 -     
         Operating Income  $ 2,133 $ 1,356 $ 2,028 $ 11,869     
 Interest Expense  (451) (615) (828) (1,034)     
 Other Income    38 437 809 511     
 Income before Provision for Income Taxes $ 1,720 $ 1,178 $ 2,009 $ 11,346     
 Provision for Income Taxes  419 303 4,140 2,802     
 Net Income (Loss)  $ 1,301 $ 875 $ (2,131) $ 8,544     
                   
 Earnings (Loss) per Common Share ––Basic $1.19 $0.73 ($1.94) $7.15     
     Diluted $1.19 $0.73 ($1.94) $7.15     
                   
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME     
                   
           Three Months Ended     
           March 31     
           2021 2020     
                   
    Net Income     $ 1,301 $ 875     
    Other Comprehensive Income, Net of Tax:           
    Foreign Currency Translation Adjustment   (1,275) (647)     
    Comprehensive Income   $ 26 $ 228     
                   
 CONSOLIDATED BALANCE SHEETS     
                   
           March 31 December 31     
           2021 2020     
                   
    Cash and Short-Term Investments     $ 15,559 $ 22,943     
    Accounts Receivable     21,954 20,462     
    Inventories      21,612 17,926     
    Current Net Investments in Sales-Type Leases   3 3     
    Other Current Assets     2,368 1,771     
            Current Assets $ 61,496 $ 63,105     
                   
    Net Property, Plant, and Equipment 43,908 46,570     
    Right of Use Assets     2,379 2,448     
    Other Assets 9,285 8,732     
    Long-Term Net Investments in Sales-Type Leases   98 83     
            Total Assets $ 117,166 $ 120,938     
                   
    Accounts Payable     $ 13,541 $ 11,316     
    Current Maturities and Short-Term debt    1,510 2,115     
    Current Lease Liabilities     492 519     
    Other Current Liabilities     24,898 24,656     
            Current Liabilities $ 40,441 $ 38,606     
                   
    Long-Term Debt 17,465 18,440      
    Long-Term Pension Liabilities     29,087 30,047     
    Other Long-Term Liabilities 2,647 2,226     
    Lease Liabilities      957 1,075     
            Total Liabilities     $ 90,597 $ 90,394     
    Shareholders' Investment 26,569 30,544     
            Total Liabilities and Shareholders' Investment $ 117,166 $ 120,938     
                   
  
 SELECTED FINANCIAL DATA 
                   
             March 31 December 31   
             2021 2020   
     Book Value per Common Share     $24.25 $25.54   
     Total Shares Outstanding     1,095,718 1,195,747   
     Backlog       $ 69,013 $ 61,563   
                   
  CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT  
               Accumulated
Other
Comprehensive
Income (Loss)
   
                  
       Common Stock Paid-in Surplus Retained Earnings Treasury Stock    
            Total 
 Balance, December 31, 2020
 $ 1,508 $ 9,708 $ 65,927 $ (6,344) $ (40,255) $ 30,544 
 Add (Deduct):
              
  Net Income      1,301     1,301 
  Other Comprehensive Income, Net of Tax         (1,275) (1,275) 
  Treasury Stock Acquisition        (4,001)   (4,001) 
 Balance, March 31, 2021  $ 1,508 $ 9,708 $ 67,228 $ (10,345) $ (41,530) $ 26,569 
                   
  CONSOLIDATED STATEMENT OF CASH FLOWS 
             Three Months Ended
March 31, 2021
 Three Months Ended
March 31, 2020
   
                 
                 
                 
    Operating Activities:         
              
      Net Income   $ 1,301 $ 875   
              
      Adjustment to Reconcile Net Income to Net Cash (Required) Provided by Operating Activities:     
        Pension Contributions (Greater) Less than Expense   (960) (903)   
        Bad Debt Expense (Recovery)   (32) (10)   
        Depreciation & Amortization   1,652 1,604   
       (Gain) Loss on Sales of Equipment   (3) (2)   
      Change in Assets and Liabilities         
         (Inc) Dec in Accts and Notes Receivable   (1,460) 5,572   
         (Inc) Dec in Cost in Excess of Estimated Earnings and Billings   (478) 274   
         (Inc) in Inventories   (3,213) (4,728)   
         (Inc) Dec in Prepayments   (118) 154   
         (Inc) in Net Investment in Sales-type leases     (15) (26)   
         (Inc) Dec in Other LT Assets   (72) 52   
         Inc in Accounts Payable   2,225 2,215   
         (Dec) Inc in Other Accrued Expenses   (4,131) 1,387   
         Inc in Advanced Billings   5,580 7,871   
         (Dec) Inc in Billings in Excess of Costs and Estimated Earnings   (1,204) 1,941   
         Inc (Dec) in Lease Liability for Operating     24 (14)   
         Inc (Dec) in Lease Liability for Financing     43 (11)   
         Principal payments of Lease Liability for Operating     (69) (25)   
         (Dec) Inc in Long Term Liabilities   (72) 58   
            Net Cash (Required) Provided by Operating Activities   $ (1,002) $ 16,284   
              
    Investing Activities         
         Proceeds from Sales of Equipment   9 2   
         Additions to Property, Plant, and Equipment   (812) 216   
           Net Cash (Required) Provided for Investing Activities   $ (803) $ 218   
              
    Financing Activities         
         Principal payments of Lease Liability for Financing     (69) -   
        (Repayment) of Short-Term Borrowings, Net   (605) (4,896)   
        (Repayment) Proceeds of Long-Term Debt   (353) 1,112   
         Treasury Stock Acquisitions   (4,001) (3)   
           Net Cash (Required) for Financing Activities   $ (5,028) $ (3,787)   
              
    Effect of Exchange Rate Changes    (551) (765)   
              
    Net (Decrease) Increase in Cash and Cash Equivalents   $ (7,384) $ 11,950   
              
    Cash and Cash Equivalents at Beginning of Year   22,943 1,072   
              
    Cash and Cash Equivalents at End of Quarter   $ 15,559 $ 13,022   

 

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 2021  2020  
 Domestic$33,497 $29,624  
 Mueller BV$12,027 $12,801  
 Eliminations$(245)$(265) 
 Net Revenue$45,279 $42,160  
     

The chart below depicts the net revenue on a consolidating basis for the twelve   
months ended March 31.

  Twelve Months Ended March 31 
 Revenue 2021  2020  
 Domestic$158,761 $146,212  
 Mueller BV$46,439 $52,574  
 Eliminations$(965)$(1,331) 
 Net Revenue$204,235 $197,455  
     


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 2021  2020  
 Domestic$1,683 $925  
 Mueller BV$(394)$(54) 
 Eliminations$12 $4  
 Net Income$1,301 $875  
     


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 2021  2020  
 Domestic$12,942 $9,393  
 Mueller BV$(15,098)$(865) 
 Eliminations$25 $16  
 Net Income$(2,131)$8,544  
     

B.   March 31, 2021 backlog is $69.0 million compared to $61.6 million at December 31, 2020. However, when comparing current backlog to the March 31, 2020 backlog, it has dropped 35.7% from $107.3 million. Of this $38.3 million reduction, $17.7 million is the pharmaceutical divisions finishing up the large pharmaceutical orders and $29.1 million as Mueller Field Operations (MFO) made significant progress on the large juice storage facility project. The backlog in the other U.S. business units is up $11.0 million (48.7%) led by Dairy Farm Equipment (DFE), and the other Industrial Equipment business units. Mueller BV backlog is down $2.2 million from a year ago to $8.5 million.

C.   Revenue for the three months is up 7.4% from a year ago led by a rebound in DFE and MFO’s continued work on the juice storage facility. Revenue for the trailing twelve months is up 3.4% driven by the large juice facility project. In the Netherlands, revenue is down slightly from the year before for three months and down 11.7% for the trailing twelve months as the general economy and Covid-19 continue to have a negative effect.

D.   Net income for the three months was $1.3 million which is an improvement of $0.4 million over the first quarter of last year even after a negative $0.7 million after tax LIFO effect. The largest contributor to the improvement in the U.S. is the rebound of DFE from historical lows. In the Netherlands, net income is down $0.3 million primarily from lower revenues.

Net income for the trailing twelve months is a $2.1 million loss. However, when the $15.4 million goodwill impairment for the Mueller BV acquisition is excluded, net income would be $13.3 million, a $4.7 million (55.3%) improvement over the previous trailing twelve months’ net income even after absorbing a $0.9 million after tax negative impact from the LIFO reserve. Almost every business segment had improved profits, led by the pharmaceutical groups, DFE and MFO. In the Netherlands, net income would be $0.3 million when excluding the goodwill impairment. This is an improvement over the $0.9 million loss in the prior twelve months even with lower revenue.

E.   The Company was granted a loan in the amount of $1.9 million, pursuant to the Paycheck Protection Program under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The loan, which was in the form of a note dated June 12, 2020, issued to the Company, matures on June 11, 2025, and bears interest at a rate of 1% per annum, with a deferral of payments for the first six months. The note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, utilities, and maintains its payroll levels. The Company filed for forgiveness of the loan on November 17, 2020, and is waiting for a response.

F.   On February 5, 2021, the Company repurchased 100,000 shares of stock at $40 a share from a shareholder in a private transaction. In addition, as of March 31, 2021, the Company purchased 29 shares under the buyback program announced on March 19, 2021.

G.   The pre-tax results for three months ended March 31, 2021, were unfavorably affected by $0.9 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2021, were unfavorably affected by $0.5 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2020, were favorably affected by a $0.7 million decrease in the LIFO reserve.

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 1.10 for March, 2020; 1.23 for December, 2020 and 1.17 for March, 2021, 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 2020 annual report, available at

www.paulmueller.com.

 

Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9346
kjeffries@paulmueller.com | http://paulmueller.com