Mueller Industries (MLI) has reported a 40.24 percent plunge in profit for the quarter ended Sep. 27, 2014. The company has earned $23.82 million, or $0.42 a share in the quarter, compared with $39.86 million, or $0.71 a share for the same period last year.
Revenue during the quarter grew 13.99 percent to $602.82 million from $528.85 million in the previous year period. Gross margin for the quarter contracted 19 basis points over the previous year period to 13.53 percent. Total expenses were 93.74 percent of quarterly revenues, up from 87.29 percent for the same period last year. That has resulted in a contraction of 645 basis points in operating margin to 6.26 percent.
Operating income for the quarter was $37.73 million, compared with $67.21 million in the previous year period.
Regarding the outlook, Greg Christopher, CEO said, "In the third quarter, continued signs of increased activity in the private non-residential construction segment are encouraging. This is a welcome development as past experience shows that once this segment gains momentum, it tends to persist."
"Furthermore the residential segment of our business continues to idle along while improving at a modest pace, with housing starts likely to remain under one million units in 2014. A ramp-up in starts will accompany further gains in the U.S. economy."
Cash Flow
Mueller Industries has generated cash of $4.20 million from operating activities during the nine month period, down 93.99 percent or $65.79 million, when compared with the last year period.
The company has spent $51.12 million cash to meet investing activities during the nine month period as against cash inflow of $59 million in the last year period It has incurred net capital expenditure of $33.33 million on net basis during the nine month period, down 74.02 percent or $94.95 million from year ago period.
The company has spent $4.68 million cash to carry out financing activities during the nine month period as against cash outgo of $5.98 million in the last year period.
Cash and cash equivalents stood at $259.86 million as on Sep. 27, 2014, down 19.34 percent or $62.32 million from $322.18 million on Sep. 28, 2013.
Working Capital
Mueller Industries has recorded an increase in the working capital over the last year. It stood at $690.86 million as at Sep. 27, 2014, up 1.57 percent or $10.68 million from $680.17 million on Sep. 28, 2013. Current ratio was at 3.96 as on Sep. 27, 2014, up from 3.79 on Sep. 28, 2013.
Cash conversion cycle (CCC) has decreased to 42 days for the quarter from 83 days for the last year period. Days sales outstanding went down to 25 days for the quarter compared with 53 days for the same period last year.
Days inventory outstanding has decreased to 25 days for the quarter compared with 46 days for the previous year period. At the same time, days payable outstanding went down to 8 days for the quarter from 15 for the same period last year.
Debt Level
Mueller Industries has recorded a decline in total debt over the last one year. It stood at $242.71 million as on Sep. 27, 2014, down 7.37 percent or $19.31 million from $262.02 million on Sep. 28, 2013.
Total debt was 18.28 percent of total assets as on Sep. 27, 2014, compared with 20.79 percent on Sep. 28, 2013. Debt to equity ratio was at 0.38 as on Sep. 28, 2013. Interest coverage ratio decreased to 26.38 for the quarter from 54.07 for the same period last year.
