SPRINGFIELD, Mo., July 28, 2017 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC:MUEL) today announced earnings for the quarter ended June 30, 2017.
| PAUL MUELLER COMPANY | ||||||||||||||||||||||||||||||
| SIX-MONTH REPORT | ||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||||
| (In thousands) | Three Months Ended | Six Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| June 30 | June 30 | June 30 | ||||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
| Net Sales | $ | 39,630 | $ | 45,524 | $ | 77,241 | $ | 86,685 | $ | 158,577 | $ | 170,927 | ||||||||||||||||||
| Cost of Sales | 27,934 | 32,720 | 54,951 | 61,565 | 116,677 | 120,794 | ||||||||||||||||||||||||
| Gross Profit | $ | 11,696 | $ | 12,804 | $ | 22,290 | $ | 25,120 | $ | 41,900 | $ | 50,133 | ||||||||||||||||||
| Selling, General and Administrative Expense | 10,532 | 11,856 | 21,015 | 22,721 | 46,182 | 41,728 | ||||||||||||||||||||||||
| Operating Income (Loss) | $ | 1,164 | $ | 948 | $ | 1,275 | $ | 2,399 | $ | (4,282 | ) | $ | 8,405 | |||||||||||||||||
| Interest Expense | (61 | ) | (63 | ) | (111 | ) | (99 | ) | (306 | ) | (240 | ) | ||||||||||||||||||
| Other Income (Expense) | (117 | ) | (63 | ) | (207 | ) | (111 | ) | 113 | (8 | ) | |||||||||||||||||||
| Income (Loss) before Provision (Benefit) for Income Taxes | $ | 986 | $ | 822 | $ | 957 | $ | 2,189 | $ | (4,475 | ) | $ | 8,157 | |||||||||||||||||
| Provision (Benefit) for Income Taxes | 333 | 60 | 447 | 516 | (1,031 | ) | 2,513 | |||||||||||||||||||||||
| Net Income (Loss) | $ | 653 | $ | 762 | $ | 510 | $ | 1,673 | $ | (3,444 | ) | $ | 5,644 | |||||||||||||||||
| Earnings per Common Share –– | Basic | $0.55 | $0.63 | $0.43 | $1.37 | ($ | 2.87 | ) | $4.59 | |||||||||||||||||||||
| Diluted | $0.55 | $0.63 | $0.43 | $1.37 | ($ | 2.87 | ) | $4.59 | ||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||||||||||||||
| Six Months Ended | ||||||||||||||||||||||||||||||
| June 30 | ||||||||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||||||||
| Net Income | $ | 510 | $ | 1,673 | ||||||||||||||||||||||||||
| Other Comprehensive Income, Net of Tax: | ||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | 2,477 | 554 | ||||||||||||||||||||||||||||
| Change in Pension Liability | - | 1,000 | ||||||||||||||||||||||||||||
| Amortization of De-Designated Hedges | 3 | 10 | ||||||||||||||||||||||||||||
| Comprehensive Income | $ | 2,990 | $ | 3,237 | ||||||||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||||||
| June 30 | December 31 | |||||||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||||||||
| Accounts Receivable | $ | 22,449 | $ | 18,083 | ||||||||||||||||||||||||||
| Inventories | 28,592 | 24,126 | ||||||||||||||||||||||||||||
| Other Current Assets | 3,010 | 2,514 | ||||||||||||||||||||||||||||
| Current Assets | $ | 54,051 | $ | 44,723 | ||||||||||||||||||||||||||
| Net Property, Plant, and Equipment | 40,202 | 33,545 | ||||||||||||||||||||||||||||
| Other Assets | 29,502 | 26,397 | ||||||||||||||||||||||||||||
| Total Assets | $ | 123,755 | $ | 104,665 | ||||||||||||||||||||||||||
| Accounts Payable | $ | 11,607 | $ | 8,165 | ||||||||||||||||||||||||||
| Current Maturities and Short-Term debt | 7,771 | 8,243 | ||||||||||||||||||||||||||||
| Other Current Liabilities | 26,972 | 20,777 | ||||||||||||||||||||||||||||
| Current Liabilities | $ | 46,350 | $ | 37,185 | ||||||||||||||||||||||||||
| Long-Term Debt | 10,619 | 4,558 | ||||||||||||||||||||||||||||
| Long-Term Pension Liabilities | 30,660 | 31,628 | ||||||||||||||||||||||||||||
| Other Long-Term Liabilities | 2,772 | 828 | ||||||||||||||||||||||||||||
| Total Liabilities | 90,401 | 74,199 | ||||||||||||||||||||||||||||
| Shareholders' Investment | 33,354 | 30,466 | ||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Investment | $ | 123,755 | $ | 104,665 | ||||||||||||||||||||||||||
| SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||||
| June 30 | December 31 | |||||||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||||||||
| Book Value per Common Share | $27.88 | $25.39 | ||||||||||||||||||||||||||||
| Total Shares Outstanding | 1,196,261 | 1,200,021 | ||||||||||||||||||||||||||||
| Backlog | $ | 79,509 | $ | 44,241 | ||||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT | ||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||
| Common Stock | Paid-in Surplus | Retained Earnings | Treasury Stock | |||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||
| Balance, December 31, 2016 | $ | 1,508 | $ | 9,708 | $ | 61,582 | $ | (6,227 | ) | $ | (36,105 | ) | $ | 30,466 | ||||||||||||||||
| Add (Deduct): | ||||||||||||||||||||||||||||||
| Net Income | 510 | 510 | ||||||||||||||||||||||||||||
| Other Comprehensive Income, Net of Tax | 2,480 | 2,480 | ||||||||||||||||||||||||||||
| Treasury Stock Acquisition | (102 | ) | (102 | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2017 | $ | 1,508 | $ | 9,708 | $ | 62,092 | $ | (6,329 | ) | $ | (33,625 | ) | $ | 33,354 | ||||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2017 | Six Months Ended June 30,2016 | |||||||||||||||||||||||||||||
| Operating Activities: | ||||||||||||||||||||||||||||||
| Net Income | $ | 510 | $ | 1,673 | ||||||||||||||||||||||||||
| Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||||||||||||||||||||||||
| Pension Contributions (Greater) Less than Expense | (969 | ) | (713 | ) | ||||||||||||||||||||||||||
| Bad Debt Expense (Recovery) | 73 | 12 | ||||||||||||||||||||||||||||
| Depreciation & Amortization | 2,878 | 3,008 | ||||||||||||||||||||||||||||
| (Gain) Loss on Sales of Equipment | (59 | ) | (12 | ) | ||||||||||||||||||||||||||
| Other | (19 | ) | (43 | ) | ||||||||||||||||||||||||||
| Change in Assets and Liabilities | ||||||||||||||||||||||||||||||
| (Inc) Dec in Accts and Notes Receivable | (3,491 | ) | (1,861 | ) | ||||||||||||||||||||||||||
| (Inc) Dec in Cost in Excess of Estimated Earnings and Billings | 126 | (38 | ) | |||||||||||||||||||||||||||
| (Inc) Dec in Inventories | (3,261 | ) | 1,831 | |||||||||||||||||||||||||||
| (Inc) Dec in Prepayments | (619 | ) | 811 | |||||||||||||||||||||||||||
| (Inc) Dec Other Assets | (314 | ) | - | |||||||||||||||||||||||||||
| Inc (Dec) in Accounts Payable | 2,124 | (339 | ) | |||||||||||||||||||||||||||
| Inc (Dec) Other Accrued Expenses | 2,368 | (759 | ) | |||||||||||||||||||||||||||
| Inc (Dec) Advanced Billings | 3,545 | (2,440 | ) | |||||||||||||||||||||||||||
| Inc (Dec) in Billings in Excess of Costs and Estimated Earnings | (66 | ) | (367 | ) | ||||||||||||||||||||||||||
| Inc (Dec) In Other Long-Term Liabilities | 19 | (485 | ) | |||||||||||||||||||||||||||
| Net Cash Provided by Operating Activities | $ | 2,845 | $ | 278 | ||||||||||||||||||||||||||
| Investing Activities | ||||||||||||||||||||||||||||||
| Proceeds from Sales of Equipment | 139 | 27 | ||||||||||||||||||||||||||||
| Additions to Property and Equipment | (7,168 | ) | (2,708 | ) | ||||||||||||||||||||||||||
| Net Cash Required for Investing Activities | $ | (7,029 | ) | $ | (2,681 | ) | ||||||||||||||||||||||||
| Financing Activities | ||||||||||||||||||||||||||||||
| (Repayment) Proceeds of Short-Term Borrowings, Net | (1,456 | ) | 3,182 | |||||||||||||||||||||||||||
| Proceeds (Repayment) of Long-Term Debt | 6,097 | (208 | ) | |||||||||||||||||||||||||||
| Treasury Stock Acquisitions | (102 | ) | (867 | ) | ||||||||||||||||||||||||||
| Net Cash Provided for Financing Activities | $ | 4,539 | $ | 2,107 | ||||||||||||||||||||||||||
| Effect of Exchange Rate Changes | (137 | ) | 16 | |||||||||||||||||||||||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | $ | 218 | $ | (280 | ) | |||||||||||||||||||||||||
| Cash and Cash Equivalents at Beginning of Year | 357 | 545 | ||||||||||||||||||||||||||||
| Cash and Cash Equivalents at End of Quarter | $ | 575 | $ | 265 | ||||||||||||||||||||||||||
PAUL MUELLER COMPANY
SUMMARIZED NOTES TO THE FINANCIAL STATEMENTS
(1) Results of Operations (in thousands):
A. The chart below depicts the net revenue on a consolidating basis for the three months ended June 30.
| Three Months Ended June 30 | ||||||||
| Revenue | 2017 | 2016 | ||||||
| Domestic | $ | 27,065 | $ | 27,815 | ||||
| Mueller BV | $ | 12,761 | $ | 18,021 | ||||
| Eliminations | $ | (196 | ) | $ | (312 | ) | ||
| Net Revenue | $ | 39,630 | $ | 45,524 | ||||
The chart below depicts the net revenue on a consolidating basis for the six months ended June 30.
| Six Months Ended June 30 | ||||||||
| Revenue | 2017 | 2016 | ||||||
| Domestic | $ | 54,484 | $ | 54,672 | ||||
| Mueller BV | $ | 23,014 | $ | 32,589 | ||||
| Eliminations | $ | (257 | ) | $ | (576 | ) | ||
| Net Revenue | $ | 77,241 | $ | 86,685 | ||||
The chart below depicts the net revenue on a consolidating basis for the twelve months ended June 30.
| Twelve Months Ended June 30 | ||||||||
| Revenue | 2017 | 2016 | ||||||
| Domestic | $ | 110,841 | $ | 109,576 | ||||
| Mueller BV | $ | 48,526 | $ | 62,771 | ||||
| Eliminations | $ | (790 | ) | $ | (1,420 | ) | ||
| Net Revenue | $ | 158,577 | $ | 170,927 | ||||
The chart below depicts the net income on a consolidating basis for the three months ended June 30.
| Three Months Ended June 30 | |||||||
| Net Income | 2017 | 2016 | |||||
| Domestic | $ | 325 | $ | (637 | ) | ||
| Mueller BV | $ | 313 | $ | 1,351 | |||
| Eliminations | $ | 15 | $ | 48 | |||
| Net Income | $ | 653 | $ | 762 | |||
The chart below depicts the net income on a consolidating basis for the six months ended June 30.
| Six Months Ended June 30 | ||||||||
| Net Income | 2017 | 2016 | ||||||
| Domestic | $ | 851 | $ | 11 | ||||
| Mueller BV | $ | (411 | ) | $ | 1,580 | |||
| Eliminations | $ | 70 | $ | 82 | ||||
| Net Income | $ | 510 | $ | 1,673 | ||||
The chart below depicts the net income on a consolidating basis for the twelve months ended June 30.
| Twelve Months Ended June 30 | |||||||
| Net Income | 2017 | 2016 | |||||
| Domestic | $ | (3,115 | ) | $ | 2,829 | ||
| Mueller BV | $ | (436 | ) | $ | 2,712 | ||
| Eliminations | $ | 107 | $ | 103 | |||
| Net Income | $ | (3,444 | ) | $ | 5,644 | ||
B. 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. This settlement had a negative noncash effect on the pre-tax earnings of the Company of $6.72 million caused by pension deficits, previously recorded in accumulated other comprehensive income, moving through net income.
C. The pre-tax results for the three and six months ended June 30, 2017, were unfavorably affected by a $476,000 increase in the LIFO reserve. The pre-tax results for the twelve months ended June 30, 2017, were favorably affected by a $24,000 decrease in the LIFO reserve. The pre-tax results for the three and six months ended June 30, 2016, were unfavorably affected by a $1,000,000 increase in the LIFO reserve. The pre-tax results for the twelve months ended June 30, 2016, were favorably affected by a $50,000 decrease in the LIFO reserve.
D. On March 17, 2017, the Company announced plans to build a new facility in Groenlo, a town in the east-central portion of The Netherlands. The new facility will be located 10 kilometers (approximately 6 miles) from one of Paul Mueller Company’s current Dutch manufacturing facilities in Lichtenvoorde.
Groenlo was chosen because of its close proximity to the current Lichtenvoorde location, easing the transition for the majority of the production employees. Working together in one location, employees can better develop common goals and address customer needs.
The new facility will consolidate four locations the Company currently operates in The Netherlands, including the Lichtenvoorde location. The €20 million project is expected to have a positive return based on reducing the costs of operating four separate facilities, the rent paid on three of the facilities, and the sale of the primary manufacturing location in Lichtenvoorde. It will also combine the companies acquired in 2008 into one location, creating a stronger culture and improving collaboration and efficiencies.
Construction of the facility is underway and $6,255,000 of the long-term debt at June 30, 2017, is for this construction.
E. 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 1.11 for June 2016; 1.05 for December 2016; 1.14 for June 2017, 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 30 of the Company’s 2016 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 2016 annual report, available at
www.paulmueller.com.