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 Ended Nine Months Ended Twelve Months Ended
    September 30 September 30 September 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 30 December 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 30 December 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 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         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.

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

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