Paul Mueller Company Announces Its Second Quarter Earnings of 2017

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
Revenue2017
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
Revenue2017
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
Revenue20172016
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.


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

Source:Paul Mueller Company