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Paul Mueller Company Announces Its Second Quarter Earnings for the Year 2015

SPRINGFIELD, Mo., Oct. 30, 2015 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC:MUEL) today announced earnings for the quarter ended June 30, 2015.

PAUL MUELLER COMPANY
NINE-MONTH REPORT
Unaudited
CONSOLIDATED STATEMENTS OF INCOME
Three Months EndedNine Months EndedTwelve Months Ended
September 30September 30September 30
2015 2014 2015 2014 2015 2014
Net Sales $40,102,000 $51,320,000 $134,456,000 $150,158,000 $185,011,000 $199,911,000
Cost of Sales 27,133,000 39,525,000 94,266,000 109,904,000 131,551,000 143,928,000
Gross Profit $12,969,000 $11,795,000 $40,190,000 $40,254,000 $53,460,000 $55,983,000
Selling, General and Administrative Expense 10,295,000 9,988,000 30,324,000 31,334,000 41,606,000 41,903,000
Operating Income $2,674,000 $1,807,000 $9,866,000 $8,920,000 $11,854,000 $14,080,000
Other Income (Expense) (63,000) (173,000) (610,000) (535,000) (969,000) (752,000)
Income before Provision for Income Taxes$2,611,000 $1,634,000 $9,256,000 $8,385,000 $10,885,000 $13,328,000
Provision (Benefit) for Income Taxes 318,000 333,000 2,330,000 2,494,000 2,973,000 (4,402,000)
Net Income $2,293,000 $1,301,000 $6,926,000 $5,891,000 $7,912,000 $17,730,000
Earnings per Common Share ––Basic$1.85 $1.06 $5.61 $4.80 $6.41 $14.44
Diluted$1.85 $1.05 $5.60 $4.77 $6.39 $14.34
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Nine Months Ended
September 30
2015 2014
Net Income $6,926,000 $5,891,000
Other Comprehensive Income, Net of Tax:
Foreign Currency Translation Adjustment (2,108,000) (2,107,000)
Amortization of De-Designated Hedges (1,000) 25,000
Comprehensive Income $4,817,000 $3,809,000
CONSOLIDATED BALANCE SHEETS
September 30December 31
2015 2014
Accounts Receivable $26,709,000 $24,289,000
Inventories 34,409,000 26,517,000
Other Current Assets 7,411,000 10,132,000
Current Assets $68,529,000 $60,938,000
Net Property, Plant, and Equipment 35,320,000 34,646,000
Other Assets 23,581,000 24,438,000
Total Assets $127,430,000 $120,022,000
Accounts Payable $13,414,000 $10,843,000
Current Maturities and Short-Term debt 16,646,000 23,136,000
Other Current Liabilities 26,821,000 22,548,000
Current Liabilities $56,881,000 $56,527,000
Long-Term Debt 5,146,000 1,991,000
Long-Term Pension Liabilities 35,384,000 36,004,000
Other Long-Term Liabilities 1,055,000 1,361,000
Total Liabilities 98,466,000 95,883,000
Shareholders' Investment 28,964,000 24,139,000
Total Liabilities and Shareholders' Investment $127,430,000 $120,022,000
SELECTED FINANCIAL DATA
September 30December 31
2015 2014
Book Value per Common Share $23.41 $19.51
Total Shares Outstanding 1,237,220 1,237,379
Backlog $54,955,000 $53,953,000
CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT
Accumulated
Other
Comprehensive
Income (Loss)
Common StockPaid-in SurplusRetained
Earnings
Treasury Stock
Total
Balance, December 31, 2014$1,508,000 $9,695,000 $55,259,000 $(5,109,000)$(37,214,000)$24,139,000
Add (Deduct):
Net Income 6,926,000 6,926,000
Other Comprehensive Income, Net of Tax (2,109,000) (2,109,000)
Treasury Stock Acquisition (5,000) (5,000)
Deferred Compensation 13,000 13,000
Balance, September 30, 2015$1,508,000 $9,708,000 $62,185,000 $(5,114,000)$(39,323,000)$28,964,000
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months
Ended
September 30,
2015
Nine Months
Ended
September 30,
2014
Operating Activities:
Net Income $6,926,000 $5,891,000
Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities:
Pension Contributions (Greater) Less than Expense (621,000) (3,432,000)
Bad Debt Expense (Recovery) 36,000 (46,000)
Depreciation & Amortization 4,094,000 4,284,000
Deferred Tax (Benefit) Expense (596,000) 16,000
(Gain) Loss on Sales of Equipment 48,000 (15,000)
Other (65,000) 50,000
Change in Assets and Liabilities
(Inc) Dec in Accts and Notes Receivable (3,335,000) (1,577,000)
(Inc) Dec in Cost in Excess of Estimated Earnings and Billings (1,000) (188,000)
(Inc) Dec in Inventories (8,827,000) (2,683,000)
(Inc) Dec in Prepayments 1,844,000 (2,101,000)
(Inc) Dec Other Assets (1,691,000) 1,290,000
Inc (Dec) in Accounts Payable 4,285,000 4,983,000
Inc (Dec) Other Accrued Expenses (2,736,000) 1,594,000
Inc (Dec) Advanced Billings 6,091,000 1,205,000
Inc (Dec) in Billings in Excess of Costs and Estimated Earnings 241,000 (1,957,000)
Inc (Dec) In Other Liabilities (176,000) (11,000)
Net Cash Provided by Operating Activities $5,517,000 $7,303,000
Investing Activities
Proceeds from Sales of Equipment 48,000 39,000
Additions to Property and Equipment (6,483,000) (3,459,000)
Net Cash Required for Investing Activities $(6,435,000)$(3,420,000)
Financing Activities
Proceeds (Repayment) of Short-Term Borrowings, Net (5,444,000) 147,000
Proceeds (Repayment) of Long-Term Debt 5,526,000 (3,829,000)
Treasury Stock Acquisitions (5,000) (8,000)
Net Cash Required for Financing Activities $77,000 $(3,690,000)
Effect of Exchange Rate Changes 18,000 (102,000)
Net Increase (Decrease) in Cash and Cash Equivalents $(823,000)$91,000
Cash and Cash Equivalents at Beginning of Year 1,402,000 179,000
Cash and Cash Equivalents at End of Quarter $579,000 $270,000

PAUL MUELLER COMPANY
SUMMARIZED NOTES TO THE FINANCIAL STATEMENTS

(1) Results of Operations:

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 2015 2014
Domestic$28,308,000 $35,135,000
Mueller BV$12,201,000 $16,861,000
Eliminations($407,000)($676,000)
Net Revenue$40,102,000 $51,320,000

The chart below depicts the net revenue on a consolidating basis for the nine months ended September 30.

Nine Months Ended September 30
Revenue 2015 2014
Domestic$90,784,000 $98,874,000
Mueller BV$45,597,000 $53,268,000
Eliminations($1,925,000)($1,984,000)
Net Revenue$134,456,000 $150,158,000

The chart below depicts the net revenue on a consolidating basis for the twelve months ended September 30.

Twelve Months Ended September 30
Revenue 2015 2014
Domestic$124,756,000 $130,341,000
Mueller BV$63,245,000 $71,920,000
Eliminations($2,990,000)($2,350,000)
Net Revenue$185,011,000 $199,911,000

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 2015 2014
Domestic$1,471,000 $268,000
Mueller BV$825,000 $1,025,000
Eliminations($3,000)$8,000
Net Income$2,293,000 $1,301,000

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 2015 2014
Domestic$3,239,000 $2,419,000
Mueller BV$3,764,000 $3,366,000
Eliminations($77,000)$106,000
Net Income$6,926,000 $5,891,000

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 2015 2014
Domestic$3,165,000 $12,808,000
Mueller BV$4,933,000 $4,731,000
Eliminations($186,000)$191,000
Net Income$7,912,000 $17,730,000

B. The results for the three and nine months ended September 30, 2014, were unfavorably affected by a $500,000 increase in LIFO reserve. The results for the twelve months ended September 30, 2014, were favorably affected by a $165,000 decrease in the LIFO reserve. The results for the three and nine months ended September 30, 2015, were favorably affected by a $500,000 decrease in the LIFO reserve. The results for the twelve months ended September 30, 2015, were unfavorably affected by a $16,000 increase in the LIFO reserve.

C. The results for the twelve months ended September 30, 2014, were favorably affected by a $10,120,000 reduction in the valuation allowance against the net deferred tax assets.

D. The results for the three, nine, and twelve months ended September 30, 2014 were adversely affected by an accident on September 14, 2014 involving the construction of a field fabricated tank. A reserve of $2,900,000 was established for the full contract value of the original order and certain insurance deductibles. While various contractual and insurance issues are still uncertain, and now subject to a lawsuit brought against Mueller Field Operations and its insurers, the $2,900,000 impact is still management’s best estimate. The Company has completed the fabrication of a new tank which is now in operation.

E. The results for the twelve months ended September 30, 2015, included an $11,531,000 non-cash, pre-tax adjustment to Other Comprehensive Income which reduced shareholders’ investment. The adjustment was caused by an increase in the pensions’ underfunded status due to market conditions and actuarial assumptions. The results for the twelve months ended September 30, 2014, included a non-cash, pre-tax adjustment to Other Comprehensive Income of $13,230,000 which increased shareholders’ investment. The adjustment was caused by a decrease in the pensions’ underfunded status due to market conditions and actuarial assumptions.

F. 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 1.27 for September, 2014, 1.22 for December, 2014 and 1.12 for September, 2015, respectively.

(2) Summary of Accounting Policies:

Principles of Consolidation and Lines of Business–The financial statements include the accounts of Paul Mueller Company and its wholly owned subsidiaries: Mueller Transportation, Inc.; Mueller Field Operations, Inc.; and Mueller B.V. and its subsidiaries (collectively “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The Company provides manufactured equipment and components for the food, dairy, beverage, transportation, chemical, pharmaceutical, and other industries, as well as the dairy farm market. The Company also provides field fabrication, service and repair, and construction services in these industries.

For all other relevant accounting policies, please see the annual report, which is available at www.paulmueller.com.

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 34 of the Company’s 2014 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.

Press Contact: Jay Holden | Paul Mueller Company | SPRINGFIELD, Mo. 65802 | (417) 575-9422 jholden@paulmueller.com | http://paulmueller.com

Source:Paul Mueller Company