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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Paul Mueller Company Announces Its Fourth Quarter Earnings of 2018

March 20, 2019

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 11,965 11,843 47,137 44,046 Administrative Expense - ------ - - ------ - - ------- - - --------- - Operating Income $ (289 ) $ 840 $ 3,813 $ 4,924 (Loss) Interest (187 ) (82 ) (920 ) (330 ) Expense Other Income (Expense) (1 ) (1,345 ) 218 (1,247 ) - ------ - - ------ - - ------- - - --------- - Income (Loss) before Provision $ (477 ) $ (587 ) $ 3,111 $ 3,347 (Benefit) for Income Taxes Provision (Benefit) (337 ) 4,055 472 5,673 for Income Taxes - ------ - - ------ - - ------- - - --------- - Net Income (Loss) $ (140 ) $ (4,642 ) $ 2,639 $ (2,326 ) - ------ - - ------ - - ------- - - --------- - Earnings (Loss) per Basic ($0.12 ) ($3.88 ) $2.21 ($1.94 ) Common Share –– 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 (1,659 ) 4,061 Adjustment Change in Pension (1,330 ) (4,121 ) Liability Amortization of De-Designated - 3 Hedges - ------- - - --------- - Comprehensive Income (Loss) $ (350 ) $ (2,383 ) - ------- - - --------- - CONSOLIDATED BALANCE SHEETS ---------------------------------------------------------------------------------- December 31 December 31 2018 2017 ----------- ------------- Cash and Short-Term $ 715 $ 6,571 Investments Accounts Receivable 27,533 22,680 Inventories 26,678 31,080 Other Current 2,066 2,519 Assets - ------- - - --------- - 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 10,332 4,021 and Short-Term debt Other Current 26,131 31,966 Liabilities - ------- - - --------- - Current Liabilities $ 47,640 $ 50,229 Long-Term Debt 21,478 23,562 Long-Term Pension 32,081 34,766 Liabilities Other Long-Term Liabilities 1,361 3,356 - ------- - - --------- - Total Liabilities 102,560 111,913 - ------- - - --------- - Shareholders’ Investment 27,628 27,981 - ------- - - --------- - Total Liabilities and Shareholders’ $ 130,188 $ 139,894 Investment - ------- - - --------- - SELECTED FINANCIAL DATA ------------------------------------------------------------------------------------------------------------- December 31 December 31 2018 2017 - --------- - - --------- - Book Value per $ 23.10 $ 23.39 Common Share Total Shares 1,196,187 1,196,261 Outstanding Backlog $ 97,354 $ 94,043 CONSOLIDATED STATEMENT OF SHAREHOLDERS’ INVESTMENT ------------------------------------------------------------------------------------------------------------- Accumulated Common Paid-in Retained Treasury OtTotal Stock Surplus Earnings Stock Co ensive Income (Loss) ---------- ---------- ----------- ------------- -------------- Balance, December 31, $ 1,508 $ 9,708 $ 59,256 $ (6,329 ) $ (36,162 ) $ 27,981 2017 - ------ - - ------ - - ------- - - --------- - - --------- - - ------ - Add (Deduct): Net Income 2,639 2,639 Other Comprehensive Income, (2,989 ) (2,989 ) Net of Tax Treasury Stock (3 ) (3 ) Acquisition ---------- ---------- ----------- - --------- - ------------- - ------ - Balance,December 31, $ 1,508 $ 9,708 $ 61,895 $ (6,332 ) $ (39,151 ) $ 27,628 2018 - ------ - - ------ - - ------- - - --------- - - --------- - - ------ - CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------------------------------------------------------------------------------- Twelve Months Twelve Months Ended Ended December 31, December 31, 2018 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 (4,015 ) (984 ) Expense Bad Debt Expense (Recovery) 161 28 Depreciation & Amortization 5,794 5,747 Deferred Tax 1,182 5,389 (Benefit) Expense (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 (182 ) 97 Earnings and Billings (Inc) Dec in Inventories 4,402 (6,953 ) (Inc) Dec in Prepayments 2,000 (375 ) (Inc) Dec Other Assets (57 ) 23 (Inc) Dec in (422 ) (1,315 ) Deferred Taxes 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 (1,529 ) 674 and Estimated Earnings Inc (Dec) In Long Term Liabilities (1,997 ) 394 Net Cash (Required) Provided by Operating $ (4,414 ) $ 12,288 Activities Investing Activities Proceeds from Sales of Equipment 173 172 Additions to Property, Plant, and Equipment (4,838 ) (23,750 ) Net Cash (Required) for Investing $ (4,665 ) $ (23,578 ) Activities Financing Activities Proceeds (Repayment) of Short-Term 6,313 (4,747 ) Borrowings, Net (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 $ (5,856 ) $ 6,214 Equivalents Cash and Cash Equivalents at Beginning of 6,571 357 Year - --------- - - --------- - Cash and Cash Equivalents at End of Year $ 715 $ 6,571 - --------- - - --------- -

PAUL MUELLER COMPANYSUMMARIZED 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 $31,18 $30,92 8 6 Mueller BV $14,73 $11,60 0 7 Eliminations ($300 ) ($88 ) ------------ ----- - ----- - Net Revenue $45,61 $42,44 8 5

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 $137,0 $120,3 90 07 Mueller BV $65,34 $48,16 1 2 Eliminations ($1,22) ($512 ) 1 ------------ ----- - ----- - Net Revenue $201,2 $167,9 10 57

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 ($2,99) 4 Mueller BV ($1,15) ($1,74) 0 8 Eliminations $15 $100 ------------ ----- - ----- - Net Income ($140 ) ($4,64) 2

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 ($2,08) ($2,35) 3 0 Eliminations $36 $167 ------------ ----- - ----- - Net Income $2,639 ($2,32) 6

a. 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. b. 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. c. 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. d. 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. 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 1.20 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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