PAUL MUELLER COMPANY
SUMMARIZED NOTES TO THE FINANCIAL STATEMENTS
(In thousands)

A. The chart below depicts the net revenue on a consolidating basis for the three months ended March 31.

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

The chart below depicts the net income (loss) on a consolidating basis for the three months ended March 31.

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

B.  March 31, 2024 backlog is $95.2 million compared to $122.8 million at March 31, 2023. The majority of this backlog is in the U.S. where the backlog is $87.8 million at March 31, 2024 compared to $115.4 million at March 31, 2023. The $27.6 million reduction in U.S. backlog is from all segments but primarily from the pharmaceutical, food and beverage, and component divisions coming off of record high backlogs. In the Netherlands, the backlog is relatively flat -- $7.9 million at March 31, 2024 versus $8.2 million on March 31, 2023.

C.  Revenue is down from the previous year by $6 million on a three-month basis but up $16.1 million on trailing twelve months. The lower first quarter revenue from last year is primarily from the timing of revenue recognition on the larger pharmaceutical projects and lower revenue from the components division coming off record revenue in late 2022 and early 2023. In the Netherlands, revenue is above last year by $0.5 million and $2.1 million on a three-month and twelve-month basis, respectively. The Dutch market is improving.

Net Income is up $0.8 million on a three-month and down $17.5 million on a twelve-month basis before removing the pension settlement charges. In the Netherlands, earnings are up year over year by $1.1 million for three months and $4.1 million over twelve months. One-time restructuring charges accrued in March 2023 and the subsequent efficiencies achieved from the restructuring along with a price increase taken in the first quarter of 2023 on slightly higher volumes led to the improved earnings.

We manage our business in the U.S. looking at earnings before tax (EBT) and excluding the effects of LIFO and non-reoccurring events such as the pension settlement. This non-GAAP adjusted EBT (as shown in the table below) is down $0.7 million for the three months but up $9.7 million for the trailing twelve months primarily from strong results in the pharmaceutical, food and beverage, and components divisions.

D.   On March 12, 2024, the Board of Directors authorized a tender offer effective from March 15, 2024, through May 7, 2024, for up to $10 million with the option to go to $15 million of the Company’s common stock at a price of $80. As of April 26, 2024, $5.88 million in shares are tendered to the Company’s depository agent. On April 26, 2024, the Company announced that the limit was increased to $15 million.

E.   Effective March 14, 2024, the Company amended its domestic bank borrowing facility to extend the agreement until March 31, 2025, with the following changes:

1. Capacity was reduced from $15 million to $10 million.

2. Interest rate spread was changed from “SOFR+10” plus 1.15% to “SOFR+10” plus 1.35%.

3. Financial leverage test of trailing twelve-month Debt/EBITDA was eliminated.

F.   The pre-tax results for the three months ended March 31, 2024, were favorably affected by $0.2 million decrease in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2024, were unfavorably affected by $0.1 million increase in the LIFO reserve. The pre-tax results for the three months ended March 31, 2023, were favorably affected by $0.2 million increase in the LIFO reserve. The pre-tax results for the twelve months ended March 31, 2023 were unfavorably affected by $2.6 million increase in the LIFO reserve.

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 1.09 for March 2023, 1.10 for December 2023, and 1.08 for March 2024, 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 in the Company’s Annual Report under “Safe Harbor for Forward-Looking Statements”, 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 2023 annual report, available at
www.paulmueller.com.

Press Contact: Ken Jeffries | Paul Mueller Company | Springfield, MO 65802 | (417) 575-9346
[email protected] | https://paulmueller.com