SPRINGFIELD, Mo., Oct. 30, 2020 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC: MUEL) today announced earnings for the quarter ended September 30, 2020.
| PAUL MUELLER COMPANY | ||||||||||||||||||||
| NINE-MONTH REPORT | ||||||||||||||||||||
| Unaudited | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Twelve Months Ended | ||||||||||||||||||
| September 30 | September 30 | September 30 | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
| Net Sales | $ 51,607 | $ 45,968 | $ 146,990 | $ 141,911 | $ 202,256 | $ 187,529 | ||||||||||||||
| Cost of Sales | 35,504 | 33,117 | 102,405 | 103,883 | 140,957 | 137,825 | ||||||||||||||
| Gross Profit | $ 16,103 | $ 12,851 | $ 44,585 | $ 38,028 | $ 61,299 | $ 49,704 | ||||||||||||||
| Selling, General and Administrative Expense | 11,167 | 11,205 | 33,156 | 33,701 | 45,127 | 45,666 | ||||||||||||||
| Operating Income | $ 4,936 | $ 1,646 | $ 11,429 | $ 4,327 | $ 16,172 | $ 4,038 | ||||||||||||||
| Interest Expense | (110) | (213) | (819) | (808) | (838) | (995) | ||||||||||||||
| Other Income | 427 | 81 | 869 | 366 | 854 | 365 | ||||||||||||||
| Income before Provision for Income Taxes | $ 5,253 | $ 1,514 | $ 11,479 | $ 3,885 | $ 16,188 | $ 3,408 | ||||||||||||||
| Provision for Income Taxes | 1,258 | 374 | 2,761 | 861 | 3,905 | 524 | ||||||||||||||
| Net Income | $ 3,995 | $ 1,140 | $ 8,718 | $ 3,024 | $ 12,283 | $ 2,884 | ||||||||||||||
| Earnings per Common Share –– | Basic | $3.34 | $0.95 | $7.29 | $2.53 | $10.27 | $2.41 | |||||||||||||
| Diluted | $3.34 | $0.95 | $7.29 | $2.53 | $10.27 | $2.41 | ||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||||
| Nine Months Ended | ||||||||||||||||||||
| September 30 | ||||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||
| Net Income | $ 8,718 | $ 3,024 | ||||||||||||||||||
| Other Comprehensive Income (Loss), Net of Tax: | ||||||||||||||||||||
| Foreign Currency Translation Adjustment | 1,590 | (1,216) | ||||||||||||||||||
| Comprehensive Income | $ 10,308 | $ 1,808 | ||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| September 30 | December 31 | |||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||
| Cash and Short-Term Investments | $ 21,583 | $ 1,072 | ||||||||||||||||||
| Accounts Receivable | 20,273 | 28,509 | ||||||||||||||||||
| Inventories | 21,042 | 20,552 | ||||||||||||||||||
| Current Net Investments in Sales-Type Leases | 56 | 47 | ||||||||||||||||||
| Other Current Assets | 1,654 | 3,763 | ||||||||||||||||||
| Current Assets | $ 64,608 | $ 53,943 | ||||||||||||||||||
| Net Property, Plant, and Equipment | 45,668 | 47,406 | ||||||||||||||||||
| Right of Use Assets | 1,459 | 1,421 | ||||||||||||||||||
| Other Assets | 23,477 | 21,355 | ||||||||||||||||||
| Long-Term Net Investments in Sales-Type Leases | 840 | 769 | ||||||||||||||||||
| Total Assets | $ 136,052 | $ 124,894 | ||||||||||||||||||
| Accounts Payable | $ 10,513 | $ 10,534 | ||||||||||||||||||
| Current Maturities and Short-Term debt | 1,370 | 6,208 | ||||||||||||||||||
| Current Lease Liabilities | 466 | 485 | ||||||||||||||||||
| Other Current Liabilities | 31,209 | 27,021 | ||||||||||||||||||
| Current Liabilities | $ 43,558 | $ 44,248 | ||||||||||||||||||
| Long-Term Debt | 18,805 | 15,334 | ||||||||||||||||||
| Long-Term Pension Liabilities | 27,288 | 30,395 | ||||||||||||||||||
| Other Long-Term Liabilities | 2,688 | 1,566 | ||||||||||||||||||
| Lease Liabilities | 993 | 936 | ||||||||||||||||||
| Total Liabilities | $ 93,332 | $ 92,479 | ||||||||||||||||||
| Shareholders' Investment | 42,720 | 32,415 | ||||||||||||||||||
| Total Liabilities and Shareholders' Investment | $ 136,052 | $ 124,894 | ||||||||||||||||||
| SELECTED FINANCIAL DATA | ||||||||||||||||||||
| September 30 | December 31 | |||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||
| Book Value per Common Share | $35.73 | $27.11 | ||||||||||||||||||
| Total Shares Outstanding | 1,195,747 | 1,195,866 | ||||||||||||||||||
| Backlog | $ 75,287 | $ 79,791 | ||||||||||||||||||
| CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT | ||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
| Common Stock | Paid-in Surplus | Retained Earnings | Treasury Stock | |||||||||||||||||
| Total | ||||||||||||||||||||
| Balance, December 31, 2019 | $ 1,508 | $ 9,708 | $ 68,484 | $ (6,341) | $ (40,944) | $ 32,415 | ||||||||||||||
| Add (Deduct): | ||||||||||||||||||||
| Net Income | 8,718 | 8,718 | ||||||||||||||||||
| Other Comprehensive Income, Net of Tax | 1,590 | 1,590 | ||||||||||||||||||
| Treasury Stock Acquisition | (3) | (3) | ||||||||||||||||||
| Balance, September 30, 2020 | $ 1,508 | $ 9,708 | $ 77,202 | $ (6,344) | $ (39,354) | $ 42,720 | ||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||||||
| Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | |||||||||||||||||||
| Operating Activities: | ||||||||||||||||||||
| Net Income | $ 8,718 | $ 3,024 | ||||||||||||||||||
| Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||||||||||||||
| Pension Contributions (Greater) Less than Expense | (3,107) | (2,631) | ||||||||||||||||||
| Bad Debt Expense (Recovery) | (15) | (210) | ||||||||||||||||||
| Depreciation & Amortization | 4,855 | 4,919 | ||||||||||||||||||
| Loss (Gain) on Sales of Equipment | 1 | (18) | ||||||||||||||||||
| Change in Assets and Liabilities | ||||||||||||||||||||
| Dec in Accts and Notes Receivable | 8,251 | 2,426 | ||||||||||||||||||
| Dec (Inc) in Cost in Excess of Estimated Earnings and Billings | 939 | (180) | ||||||||||||||||||
| (Inc) in Inventories | (490) | (546) | ||||||||||||||||||
| Dec (Inc) in Prepayments | 1,170 | (643) | ||||||||||||||||||
| (Inc) in Net Investment in Sales-type leases | (79) | - | ||||||||||||||||||
| Dec (Inc) in Intangibles | - | (118) | ||||||||||||||||||
| (Inc) in Other LT Assets | (338) | (48) | ||||||||||||||||||
| (Dec) Inc in Accounts Payable | (21) | 2,012 | ||||||||||||||||||
| Inc (Dec) in Other Accrued Expenses | 7,389 | (948) | ||||||||||||||||||
| Inc in Advanced Billings | 1,241 | 7,295 | ||||||||||||||||||
| (Dec) Inc in Billings in Excess of Costs and Estimated Earnings | (4,441) | 1,633 | ||||||||||||||||||
| Inc in Lease Liability for operating | 36 | - | ||||||||||||||||||
| Inc in Lease Liability for financing | 27 | - | ||||||||||||||||||
| Inc (Dec) In Other Liabilities | 108 | (198) | ||||||||||||||||||
| Net Cash Provided by Operating Activities | $ 24,244 | $ 15,769 | ||||||||||||||||||
| Investing Activities | ||||||||||||||||||||
| Proceeds from Sales of Equipment | 4 | 31 | ||||||||||||||||||
| Additions to Property, Plant, and Equipment | (3,128) | (1,062) | ||||||||||||||||||
| Net Cash (Required) for Investing Activities | $ (3,124) | $ (1,031) | ||||||||||||||||||
| Financing Activities | ||||||||||||||||||||
| (Repayment) of principal portion of lease liability for operating | (26) | - | ||||||||||||||||||
| (Repayment) of Short-Term Borrowings, Net | (4,826) | (7,692) | ||||||||||||||||||
| Proceeds (Repayment) of Long-Term Debt | 2,640 | (5,553) | ||||||||||||||||||
| Treasury Stock Acquisitions | (3) | - | ||||||||||||||||||
| Net Cash (Required) for Financing Activities | $ (2,215) | $ (13,245) | ||||||||||||||||||
| Effect of Exchange Rate Changes | 1,606 | (1,215) | ||||||||||||||||||
| Net Increase in Cash and Cash Equivalents | $ 20,511 | $ 278 | ||||||||||||||||||
| Cash and Cash Equivalents at Beginning of Year | 1,072 | 715 | ||||||||||||||||||
| Cash and Cash Equivalents at End of Quarter | $ 21,583 | $ 993 | ||||||||||||||||||
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 September 30.
| Three Months Ended September 30 | ||||||||
| Revenue | 2020 | 2019 | ||||||
| Domestic | $41,453 | $36,168 | ||||||
| Mueller BV | $10,518 | $10,310 | ||||||
| Eliminations | ($364 | ) | ($510 | ) | ||||
| Net Revenue | $51,607 | $45,968 | ||||||
The chart below depicts the net revenue on a consolidating basis for the nine months ended September 30.
| Nine Months Ended September 30 | ||||||||
| Revenue | 2020 | 2019 | ||||||
| Domestic | $112,979 | $104,190 | ||||||
| Mueller BV | $34,907 | $39,393 | ||||||
| Eliminations | ($896 | ) | ($1,672 | ) | ||||
| Net Revenue | $146,990 | $141,911 | ||||||
The chart below depicts the net revenue on a consolidating basis for the twelve months ended September 30.
| Twelve Months Ended September 30 | ||||||||
| Revenue | 2020 | 2019 | ||||||
| Domestic | $153,289 | $135,378 | ||||||
| Mueller BV | $49,950 | $54,123 | ||||||
| Eliminations | ($983 | ) | ($1,972 | ) | ||||
| Net Revenue | $202,256 | $187,529 | ||||||
The chart below depicts the net income on a consolidating basis for the three months ended September 30.
| Three Months Ended September 30 | ||||||||
| Net Income | 2020 | 2019 | ||||||
| Domestic | $3,773 | $2,273 | ||||||
| Mueller BV | $169 | ($1,085 | ) | |||||
| Eliminations | $53 | ($48 | ) | |||||
| Net Income | $3,995 | $1,140 | ||||||
The chart below depicts the net income on a consolidating basis for the nine months ended September 30.
| Nine Months Ended September 30 | ||||||||
| Net Income | 2020 | 2019 | ||||||
| Domestic | $8,224 | $4,093 | ||||||
| Mueller BV | $431 | ($997 | ) | |||||
| Eliminations | $63 | ($72 | ) | |||||
| Net Income | $8,718 | $3,024 | ||||||
The chart below depicts the net income on a consolidating basis for the twelve months ended September 30.
| Twelve Months Ended September 30 | ||||||||
| Net Income | 2020 | 2019 | ||||||
| Domestic | $11,543 | $5,090 | ||||||
| Mueller BV | $623 | ($2,149 | ) | |||||
| Eliminations | $117 | ($57 | ) | |||||
| Net Income | $12,283 | $2,884 | ||||||
| B. | The strong beginning of the year backlog in the U.S. and reduced spending has mitigated the initial financial impact of the pandemic resulting in strong earnings for the first nine months. However, the uncertainty in the economy has slowed order entry as well as the increase in COVID-19 cases in the US and Europe is causing concern as countries begin to lock back down. Looking forward, we face the uncertainty of lower pharmaceutical and field backlog, the increasing risk of COVID-19 related disruptions, and increased costs after the aggressive cost-cutting during the beginning of the pandemic. |
| C. | September 30, 2020 backlog was $75.3 million which is $4.5 million lower than the $79.8 million at December 31, 2019. In the U.S., backlog is $64.2 million which is down $5.5 million from December 31, 2019. Two thirds of the U.S. backlog is in the Pharmaceutical groups and Mueller Field Operations which is working on the large juice storage facility. Mueller BV backlog has been relatively flat but still at recent historic lows. |
| D. | Revenue for the three, nine and twelve months are higher in the US driven by the large pharmaceutical backlog in the U.S. that went into production in mid-2019. Mueller Field Operations showed increased revenue from the previous year’s quarter from a large juice facility project. Dairy Farm Equipment revenues showed signs of rebounding with a 25% increase in quarterly revenue from the second quarter. In The Netherlands, the business conditions continue to be soft with trailing revenues flat to last year for the quarter but down to last year at nine and twelve months. However, The Netherlands continues to save in expenses. |
| Net Income was favorable from the prior year at three, nine and twelve month trailing results. In the US, pharmaceutical and field operations work continue to drive overall profitability and the dairy farm equipment segment experienced its best quarterly results in over a year. In the Netherlands, better margins and expense savings are more than offsetting the reduced revenue. | |
| E. | September 30, 2020, total debt was $20.2 million compared to $21.5 million as of December 31, 2019. Cash and cash equivalents were $21.6 million at September 30, 2020 compared to $1.1 million at December 31, 2019. Advanced Billings for the Company which is a liability representing deposits received from customers on large projects was $10.1 million at September 30th compared to $8.9 million at December 31, 2019. |
| All bank covenants were in compliance as of September 30, 2020. | |
| F. | The pre-tax results for the three months ended September 30, 2020, were favorably affected by $0.2 million decrease in the LIFO reserve. The pre-tax results for the nine months ended September 30, 2020, were favorably affected by $0.3 million decrease in the LIFO reserve. The pre-tax results for the twelve months ended September 30, 2020, were favorably affected by $0.8 million decrease in the LIFO reserve. The pre-tax results for the three months ended September 30, 2019, were unfavorably affected by $0.1 million increase in the LIFO reserve. The pre-tax results for the nine months ended September 30, 2019, were unfavorably affected by $0.4 million increase in the LIFO reserve. The pre-tax results for the twelve months ended September 30, 2019, were unfavorably affected by $0.3 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 1.10 for September 2019; 1.12 for December 2019; and 1.17 for September 2020. |
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 2019 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