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CST: 22/11/2019 11:55:43   

Paul Mueller Company Announces Its Fourth Quarter Earnings of 2018

246 Days ago

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 )    
 
  1. 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.
     
  2. 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.  
     
  3. 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. 
     
  4. 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.
     
  5. 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

kjeffries@paulmueller.com | http://paulmueller.com 

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