Paul Mueller Company Announces its Earnings for the year 2015

SPRINGFIELD, Mo., March 18, 2016 (GLOBE NEWSWIRE) -- Paul Mueller Company (OTC:MUEL) today announced earnings for the year ended December 31, 2015. The 2015 Annual Report is available at: www.paulmueller.com.

PAUL MUELLER COMPANY
TWELVE-MONTH REPORT
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Twelve Months Ended
December 31 December 31
2015 2014 2015 2014
Net Sales $44,140,000 $50,555,000 $178,595,000 $ 200,713,000
Cost of Sales 32,096,000 37,285,000 126,362,000 147,189,000
Gross Profit $12,044,000 $ 13,270,000 $ 52,233,000 $53,524,000
Selling, General and Administrative Expense 8,712,000 11,283,000 39,035,000 42,616,000
Operating Income $ 3,332,000 $ 1,987,000 $ 13,198,000 $ 10,908,000
Other Income (Expense) 26,000 (358,000) (585,000) (894,000)
Income before Provision for Income Taxes $ 3,358,000 $ 1,629,000 $ 12,613,000 $ 10,014,000
Provision (Benefit) for Income Taxes 1,680,000 643,000 4,009,000 3,137,000
Net Income $ 1,678,000 $ 986,000 $ 8,604,000 $ 6,877,000
Earnings per Common Share ––Basic $1.36 $0.80 $6.97 $5.60
Diluted $1.36 $0.80 $6.95 $5.56
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Twelve Months Ended
December 31
2015 2014
Net Income $ 8,604,000 $ 6,877,000
Other Comprehensive Income, Net of Tax:
Foreign Currency Translation Adjustment (2,774,000) (3,019,000)
Change in Pension Liability 1,744,000 (11,531,000)
Amortization of De-Designated Hedges 26,000 33,000
Comprehensive Income $ 7,600,000 $ (7,640,000)
CONSOLIDATED BALANCE SHEETS
December 31 December 31
2015 2014
Accounts Receivable $ 22,587,000 $ 24,289,000
Inventories 31,941,000 26,517,000
Other Current Assets 8,312,000 10,132,000
Current Assets $ 62,840,000 $ 60,938,000
Net Property, Plant, and Equipment 35,718,000 34,646,000
Other Assets 20,038,000 24,438,000
Total Assets $ 118,596,000 $ 120,022,000
Accounts Payable $ 11,672,000 $ 10,843,000
Current Maturities and Short-Term debt 10,868,000 23,136,000
Other Current Liabilities 25,775,000 22,548,000
Current Liabilities $ 48,315,000 $ 56,527,000
Long-Term Debt 5,003,000 1,991,000
Long-Term Pension Liabilities 32,527,000 36,004,000
Other Long-Term Liabilities 1,004,000 1,361,000
Total Liabilities 86,849,000 95,883,000
Shareholders' Investment 31,747,000 24,139,000
Total Liabilities and Shareholders' Investment $ 118,596,000 $ 120,022,000
SELECTED FINANCIAL DATA
December 31 December 31
2015 2014
Book Value per Common Share $25.66 $19.51
Total Shares Outstanding 1,237,220 1,237,379
Backlog $ 58,385,000 $ 53,953,000
CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT
Accumulated
Other
Comprehensive
Income (Loss)
Common Stock Paid-in Surplus Retained 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 8,604,000 8,604,000
Other Comprehensive Income, Net of Tax (1,004,000) (1,004,000)
Treasury Stock Acquisition (5,000) (5,000)
Deferred Compensation 13,000 13,000
Balance, December 31, 2015 $ 1,508,000 $ 9,708,000 $ 63,863,000 $ (5,114,000) $ (38,218,000) $ 31,747,000
CONSOLIDATED STATEMENT OF CASH FLOWS
Twelve Months
Ended
December 31,
2015
Twelve Months
Ended
December 31,
2014
Operating Activities:
Net Income $ 8,604,000 $ 6,877,000
Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities:
Pension Contributions (Greater) Less than Expense (1,734,000) 3,890,000
Bad Debt Expense (Recovery) 102,000 (57,000)
Depreciation & Amortization 5,665,000 6,009,000
Deferred Tax (Benefit) Expense 2,463,000 1,439,000
Deferred Tax Valuation Allowance - Change (7,000) (28,000)
(Gain) Loss on Sales of Equipment 22,000 (17,000)
Other (84,000) 75,000
Change in Assets and Liabilities
(Inc) Dec in Accts and Notes Receivable (112,000) (1,681,000)
(Inc) Dec in Cost in Excess of Estimated Earnings and Billings (30,000) (6,000)
(Inc) Dec in Inventories (6,769,000) (1,775,000)
(Inc) Dec in Prepayments 868,000 (1,348,000)
(Inc) Dec Other Assets 408,000 356,000
(Inc) Dec Deferred Tax Assets 905,000 (7,236,000)
Inc (Dec) in Accounts Payable 3,466,000 4,697,000
Inc (Dec) Other Accrued Expenses (5,326,000) 950,000
Inc (Dec) Advanced Billings 5,441,000 (1,953,000)
Inc (Dec) in Billings in Excess of Costs and Estimated Earnings 1,952,000 (1,538,000)
Inc (Dec) In Other Liabilities (156,000) 13,000
Net Cash Provided by Operating Activities $ 15,678,000 $ 8,667,000
Investing Activities
Proceeds from Sales of Equipment 79,000 55,000
Additions to Property and Equipment (8,767,000) (6,983,000)
Net Cash Required for Investing Activities $ (8,688,000) $ (6,928,000)
Financing Activities
Proceeds (Repayment) of Short-Term Borrowings, Net (8,624,000) 6,605,000
Proceeds (Repayment) of Long-Term Debt 379,000 (7,501,000)
Treasury Stock Acquisitions (5,000) (7,000)
Net Cash Required for Financing Activities $ (8,250,000) $ (903,000)
Effect of Exchange Rate Changes 403,000 387,000
Net Increase (Decrease) in Cash and Cash Equivalents $ (857,000) $ 1,223,000
Cash and Cash Equivalents at Beginning of Year 1,402,000 179,000
Cash and Cash Equivalents at End of Year $ 545,000 $ 1,402,000

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 December 31.

Three Months Ended December 31
Revenue 2015 2014
Domestic$26,597,000 $33,972,000
Mueller BV$17,980,000 $17,648,000
Eliminations($437,000)($1,065,000)
Net Revenue$44,140,000 $50,555,000

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

Twelve Months Ended December 31
Revenue 2015 2014
Domestic$117,381,000 $132,846,000
Mueller BV$63,577,000 $70,915,000
Eliminations($2,363,000)($3,048,000)
Net Revenue$178,595,000 $200,713,000

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 2015 2014
Domestic$1,346,000 ($74,000)
Mueller BV$307,000 $1,168,000
Eliminations$25,000 ($108,000)
Net Income$1,678,000 $986,000

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 2015 2014
Domestic$4,586,000 $2,345,000
Mueller BV$4,071,000 $4,534,000
Eliminations($53,000)($2,000)
Net Income$8,604,000 $6,877,000

B. The pre-tax results for the three months ended December 31, 2015, were favorably affected by a $550,000 decrease in the LIFO reserve. The pre-tax results for the twelve months ended December 31, 2015, were favorably affected by a $1,050,000 decrease in the LIFO reserve. The pre-tax results for the three months ended December 31, 2014, were unfavorably affected by a $516,000 increase in LIFO reserve. The pre-tax results for the twelve months ended December 31, 2014, were unfavorably affected by a $1,016,000 increase in the LIFO reserve.

C. The Company’s subsidiary, Mueller Field Operations, Inc. was involved in an accident involving a field fabricated tank on September 14, 2014. A $2.9 million pre-tax reserve was established for the full contract value of the original order and certain insurance deductibles. In 2015, the Company completed the fabrication of the new tank which is now in operation with $0.5 million recognized into pretax income. All efforts to recover insurance related to this claim have been resolved except for on-going litigation with the manufacturer’s error and omissions carrier.

D. On February 25, 2016, the Company amended the domestic bank borrowing agreement to extend the agreement until February 28, 2019, and added an additional financial leverage covenant of Total Debt to EBITDA which shall not exceed 3 to 1 at the end of each quarter for the trailing twelve months.

E. On March 18, 2016, the Company announced their intent to offer voluntary one-time lump-sum payments to former employees who have not yet begun drawing a benefit from one of the pension plans covering employees who are represented by a bargaining unit and employees who are not represented by a bargaining unit. Those eligible to receive the voluntary offer are any participants in the plans who are no longer employed by the company by May 6, 2016, and have not yet begun drawing a benefit from the plan. The lump sum payments will be distributed on or about October 1, 2016.

F. On March 18, 2016, the Company announced a repurchase program of up to $3 million of the Company’s common stock. The stock repurchases may be made from time to time in the open market, in compliance with a Rule 10b5-1 share repurchase plan adopted by the Company, or in privately negotiated transactions in compliance with applicable state and federal securities laws. The timing and amounts of any repurchases will be based on market conditions and other factors including price, regulatory requirements, and capital availability. The program does not require the repurchase of any minimum number of shares and may be suspended, modified, or discontinued at any time, without prior notice.

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 1.22 for December, 2014 and 1.09 for December, 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.

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 2015 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.

For all other relevant accounting policies and management discussion and analysis,
please see the 2015 annual report, which is available at
www.paulmueller.com.

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

Source:Paul Mueller Company