Core Insights - The Lazard US Systematic Small Cap Equity ETF (SYZ) has an annualized total return of 3.56% since its inception, outperforming the benchmark Russell 2000 Index, which has a return of -0.04% [1] - The ETF was converted from a mutual fund on September 12, 2023, and has been trading for 17 days as an ETF [1] - The ETF's portfolio consists of 427 small-cap stocks selected through a proprietary automated process, with market caps ranging from $54.5 million to $15.9 billion [6] Investment Opportunities - The ETF's valuation metrics show an average price-to-cash flow ratio of 9.93x, significantly lower than the Russell 2000's 15.07x, and a free cash flow yield of 6.57%, compared to the index's 1.98% [7] - Notable holdings in the ETF include Mueller Industries (MLI), which has nearly doubled its market cap from $5.5 billion to $10.9 billion in 22 months, and is trading at 14.6 times its 2025 earnings per share estimate of $6.75 [9] - Perimeter Solutions (PRM), the ETF's seventh-largest holding, has seen a 73% increase in its stock price in 2025, with sales growth of 26% to $234.7 million in the first half of 2025 [10][11] - Willdan Group (WLDN) has a market cap of $1.4 billion and reported a 27.5% increase in net revenues to $180.3 million in the first half of 2025, with a full-year revenue guidance of $345 million [17][19] Market Context - The ETF's recent performance is set against a backdrop where U.S. stocks experienced a decline for the first time in eight trading sessions, while gold prices reached a record high of over $4,000 [5] - The small-cap sector is gaining attention as large-cap stocks have become expensive, prompting a shift in focus towards smaller companies [4]

Core Viewpoint - Mueller Industries is positioned to benefit from three significant catalysts in the copper market, particularly due to the recent imposition of 50% tariffs on copper imports by the United States [1]. Group 1: Company Overview - Mueller Industries is a leading manufacturer of semi-finished copper products in the United States [1]. Group 2: Market Impact - The 50% tariffs on copper imports are expected to create a favorable environment for domestic producers like Mueller Industries, potentially enhancing their market position and profitability [1].

Core Viewpoint - Mueller Industries is positioned to benefit from three significant catalysts in the copper market, particularly due to the recent imposition of 50% tariffs on copper imports by the United States [1]. Group 1: Company Overview - Mueller Industries is a leading manufacturer of semi-finished copper products in the United States [1]. Group 2: Market Impact - The 50% tariffs on copper imports are expected to create a favorable environment for domestic producers like Mueller Industries [1].

Core Viewpoint - Mueller Industries (NYSE: MLI) shares are currently undervalued, leading to a Buy rating for the stock [1] Company Analysis - The company operates in markets that are experiencing challenges, yet it remains a strong investment opportunity [1] Investment Thesis - The analysis suggests that despite market difficulties, the intrinsic value of Mueller Industries is not reflected in its current stock price, indicating potential for growth [1]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Introduction and Key Adjustments](index=1&type=section&id=Introduction%20and%20Key%20Adjustments) Mueller Industries reported Q2 2025 earnings, including a **$36.3 million pre-tax gain** from a March 2023 tornado insurance claim, with partial proceeds received and more expected - Mueller Industries, Inc. (NYSE: MLI) announced its second quarter 2025 results, with comparisons made to the second quarter of 2024[2](index=2&type=chunk) - The results include a **$36.3 million gain** (**$28.1 million net of tax**) from an insurance claim related to a March 2023 tornado, with **$15.0 million received in 2025** and additional insurance recovery amounts expected[3](index=3&type=chunk) [Second Quarter Financial and Operating Highlights](index=1&type=section&id=Second%20Quarter%20Financial%20and%20Operating%20Highlights) Mueller Industries achieved a record quarter, excluding insurance recovery, with **net sales up 14.1%** from acquisitions and higher prices, maintaining a strong cash position Q2 2025 Financial Highlights (vs Q2 2024) | Metric | Q2 2025 (GAAP) | Q2 2024 | Change | Q2 2025 (Excl. Insurance Gain) | | :-------------------------------- | :------------- | :-------- | :----- | :----------------------------- | | Net Income | $245.9 million | $160.2 million | +53.5% | $217.9 million | | Operating Income | $304.2 million | $210.0 million | +44.9% | $267.9 million | | Net Sales | $1.14 billion | $997.7 million | +14.1% | N/A | | Diluted EPS | $2.22 | $1.41 | +57.4% | $1.96 | - The quarter-over-quarter increase in net sales was largely attributable to sales from the two businesses acquired in 2024 (Nehring and EPC) and to higher selling prices related to a rise in raw material costs across all businesses[5](index=5&type=chunk)[6](index=6&type=chunk) - COMEX copper averaged **$4.72 per pound** during the quarter, representing a **3.7% increase** over the prior period[6](index=6&type=chunk) - Net cash generated from operations was **$190.6 million**, with a cash balance net of debt of **$1.0 billion** at quarter end, and a strong current ratio of **4.9 to 1**[6](index=6&type=chunk) [CEO Commentary and Business Outlook](index=1&type=section&id=CEO%20Commentary%20and%20Business%20Outlook) CEO Greg Christopher praised a record quarter, noting acquisition benefits and optimism for future growth despite market uncertainties - CEO Greg Christopher stated that, excluding the tornado-related insurance recovery, the company delivered a record quarter, crediting manufacturing operations and commercial teams for outstanding execution[5](index=5&type=chunk) - Positive progress and contributions were observed from the 2024 acquisitions, Nehring and EPC, with expectations for continued improvement[5](index=5&type=chunk) - Business conditions are unsettled, with U.S. residential construction subdued; demand is expected to increase when interest rates are reduced, and trade protections are believed to ultimately benefit most portfolio companies[7](index=7&type=chunk) - The company is optimistic about its future, focusing on a growth platform in water infrastructure, HVAC/R, and electrical transmission, and continues to invest in efficiency and capabilities while actively seeking strategic acquisitions[7](index=7&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) Mueller Industries is an industrial corporation manufacturing vital goods for diverse markets globally - Mueller Industries, Inc. (NYSE: MLI) is an industrial corporation whose holdings manufacture vital goods for important markets such as air, water, oil and gas distribution; climate comfort; food preservation; energy transmission; medical; aerospace; and automotive[7](index=7&type=chunk) - The company includes a network of companies and brands throughout North America, Europe, Asia, and the Middle East[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section outlines potential risks and uncertainties associated with forward-looking statements, advising caution - Statements in this release that are not strictly historical may be 'forward-looking' statements, involving risks and uncertainties such as economic and currency conditions, raw material availability, market demand, pricing, competitive and technological factors, and financing availability[8](index=8&type=chunk) - Readers should not place undue reliance on forward-looking statements, which speak only as of the report date, and the Company has no obligation to publicly update or revise these statements[8](index=8&type=chunk) [Contact Information](index=2&type=section&id=Contact%20Information) For inquiries, please contact Jeffrey A. Martin - For inquiries, contact Jeffrey A. Martin at (901) 753-3226[9](index=9&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The consolidated income statement for Q2 2025 and YTD 2025 shows significant increases in net sales, operating income, and net income, driven by higher sales and operating performance, including an insurance proceeds gain Consolidated Income Statement Condensed Consolidated Statements of Income (Q2 2025 vs Q2 2024) | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------------------------- | :-------- | :-------- | :--------- | :--------- | | Net sales | $1,138,173 | $997,745 | $2,138,338 | $1,847,399 | | Cost of goods sold | $785,194 | $724,990 | $1,513,379 | $1,333,693 | | Operating income | $304,168 | $210,006 | $510,430 | $393,431 | | Income before income taxes | $324,443 | $222,926 | $535,663 | $424,476 | | Net income attributable to Mueller Industries, Inc. | $245,924 | $160,165 | $403,356 | $298,528 | | Diluted earnings per share | $2.22 | $1.41 | $3.60 | $2.62 | | Dividends per share | $0.25 | $0.20 | $0.50 | $0.40 | - The Q2 2025 income statement includes a **$36,278 thousand gain** on insurance proceeds, which contributed to the reported operating income and net income[11](index=11&type=chunk) Summary Segment Data Net Sales by Segment (Q2 2025 vs Q2 2024) | Segment (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------- | :-------- | :-------- | :--------- | :--------- | | Piping Systems Segment | $743,475 | $688,469 | $1,383,158 | $1,278,637 | | Industrial Metals Segment | $270,598 | $195,341 | $522,511 | $351,408 | | Climate Segment | $137,515 | $130,532 | $260,622 | $247,342 | | Total Net Sales | $1,138,173 | $997,745 | $2,138,338 | $1,847,399 | Operating Income by Segment (Q2 2025 vs Q2 2024) | Segment (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------- | :-------- | :-------- | :--------- | :--------- | | Piping Systems Segment | $250,296 | $162,258 | $408,460 | $304,938 | | Industrial Metals Segment | $30,610 | $29,693 | $60,694 | $53,964 | | Climate Segment | $42,628 | $38,993 | $78,252 | $71,568 | | Total Operating Income | $304,168 | $210,006 | $510,430 | $393,431 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2025, total assets increased due to higher accounts receivable and inventories, while total liabilities and stockholders' equity also saw healthy rises Condensed Consolidated Balance Sheets (as of June 28, 2025 vs Dec 28, 2024) | Metric (in thousands) | June 28, 2025 | December 28, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total current assets | $2,214,134 | $2,012,229 | | Total assets | $3,487,442 | $3,290,906 | | Total current liabilities | $455,965 | $397,987 | | Total liabilities | $546,819 | $486,498 | | Total Mueller Industries, Inc. stockholders' equity | $2,916,560 | $2,773,165 | - Cash and cash equivalents decreased slightly from

Core Insights - Mueller Streamline Co. is investing over $7 million to expand its manufacturing facility in Wynne, Arkansas, which is expected to create 60 new jobs over the next two years [1][4]. Company Expansion - The investment will enhance distribution and packaging operations, initially adding 40 jobs, increasing total employment at the Wynne campus to approximately 170 [3]. - The company has a history of supporting local economies since acquiring Halstead Industries in 1998, including building a new distribution center and acquiring operations in Springdale and Fayetteville [2]. Economic Impact - The expansion aligns with the Arkansas government's commitment to community support and economic recovery following a tornado in 2023 [4]. - Local officials, including the Mayor of Wynne and the executive director of the Arkansas Economic Development Commission, emphasize the importance of this investment for economic growth and job creation in eastern Arkansas [5][6]. Job Opportunities - Mueller will be hiring for various positions in Wynne, with applications currently open [6].

Financial Performance - Net income for the first quarter of 2025 was $157.4 million, an increase of 13.5% compared to $138.4 million in the same quarter of 2024[5] - Operating income rose to $206.3 million, up from $183.4 million, reflecting a growth of 12.5% year-over-year[5] - Net sales reached $1.0 billion, a significant increase of 17.7% from $849.7 million in the first quarter of 2024[5] - Diluted earnings per share (EPS) improved to $1.39, compared to $1.21 in the prior year, marking a 14.9% increase[5] - The Piping Systems segment reported net sales of $639.7 million, up from $590.2 million, indicating a growth of 8.4% year-over-year[13] Operational Highlights - Cash generated from operations was $113.6 million, while the company repurchased over 3 million shares for $243.6 million during the quarter[5] - The cash balance at the end of the quarter was $830.1 million, with a strong current ratio of 4.3 to 1[5] Market Conditions - The average price of COMEX copper was $4.57 per pound, which is 18.4% higher than the average price of $3.86 per pound in the first quarter of 2024[5] - The increase in net sales was driven by acquisitions and higher selling prices due to rising raw material costs and tariffs[5] - The company faced challenges from tariff and trade policies but remains confident in its ability to navigate the current economic environment[4]

Company Overview - Mueller Industries, Inc. operates in multiple segments including Piping Systems, Industrial Metals, and Climate, with a broad range of products such as copper tubes, fittings, and valves[14]. - The company acquired Kessler Sales and Distribution on August 2, 2020, and Elkhart Products Corporation on August 2, 2024, enhancing its Piping Systems segment[20]. - As of December 28, 2024, the company employed approximately 5,168 employees, with 1,793 represented by various unions[36]. - The company disposed of Die-Mold on September 2, 2021, and Heatlink Group on July 3, 2023, as part of its strategic realignment[21]. - The company has made strategic acquisitions in Europe, Canada, South Korea, the Middle East, and the United States, which are expected to enhance long-term profitability[61]. Financial Performance - Net sales for 2024 increased by 10.2% to $3,768.8 million compared to $3,420.3 million in 2023, driven by acquisitions and higher selling prices[147]. - Operating income rose by 1.9% to $770.4 million in 2024, up from $756.1 million in 2023[147]. - Net income for 2024 was $604.9 million, a slight increase of 0.3% from $602.9 million in 2023[147]. - The cost of goods sold increased to $2,724.3 million in 2024, representing 72.3% of net sales, compared to 71.1% in 2023[149]. - Gross margin as a percentage of sales decreased to 27.7% in 2024 from 28.9% in the prior year[149]. - Selling, general, and administrative expenses rose to $226.7 million in 2024, primarily due to acquisition-related costs and higher employment expenses[151]. - Piping Systems segment net sales increased by 5.5% to $2,514.1 million in 2024, with operating income rising by 8.5% to $617.5 million[160]. - Industrial Metals segment net sales surged by 41.6% to $818.4 million in 2024, with operating income increasing by 21.2% to $92.6 million[165]. - Climate segment net sales decreased by 2.5% to $488.4 million in 2024, with operating income declining by 15.0% to $146.1 million[168]. Cash Flow and Investments - Cash provided by operating activities in 2024 was $645.9 million, down from $672.8 million in 2023[173]. - Net cash used in investing activities in 2024 totaled $606.9 million, primarily for acquisitions of Nehring and Elkhart[175]. - Net cash used in financing activities in 2024 was $160.5 million, including $89.1 million for dividends and $48.7 million for stock repurchases[177]. - Capital expenditures for 2024 were $80.2 million, with anticipated investments of approximately $70.0 million to $80.0 million in 2025[186]. Shareholder Returns - The company paid a quarterly cash dividend of $0.15 per share for fiscal year 2023 and increased it to $0.20 per share for fiscal year 2024[81]. - The company declared a quarterly cash dividend of 20.0 cents per common share in 2024, up from 15.0 cents in 2023 and 12.5 cents in 2022, reflecting a commitment to returning value to shareholders[185]. - The Board of Directors authorized the repurchase of up to 40 million shares of common stock, with approximately 15.9 million shares repurchased since the initial authorization in 1999[83]. Risks and Challenges - The company faces significant risks related to the volatility of raw material costs, including copper, brass, zinc, and aluminum, which could adversely impact operating margins[49]. - Economic conditions in the housing and commercial construction industries are sensitive to inflation and interest rate changes, potentially leading to a material adverse impact on the company's financial condition[50]. - The company is exposed to competitive pressures from imports and substitute products, which could negatively affect demand and profitability[56]. - Recent and pending climate change regulations may require capital expenditures for environmental control facilities, impacting future financial performance[58]. - Labor costs may increase due to collective bargaining agreements, potentially impacting profitability if negotiations do not yield favorable terms[59]. Environmental and Compliance - The company expects to make expenditures of approximately $5.1 million for compliance activities related to existing environmental matters over the next three fiscal years[43]. - The company’s provision for environmental matters was $1.8 million for 2024, compared to $0.7 million for 2023[43]. - The company spent approximately $2.3 million on environmental remediation in 2024 and expects to spend $3.2 million in 2025, with ongoing obligations totaling $11.7 million thereafter[183]. Internal Controls and Governance - The company maintains effective internal control over financial reporting as of December 28, 2024, according to the assessment by management and the independent auditor[102]. - The company has no changes in internal control over financial reporting that materially affected its effectiveness during the fiscal quarter ended December 28, 2024[99]. - The company’s internal controls did not include the controls of the acquired companies, which were excluded from the assessment of internal controls[103]. - The Company has adopted a Code of Business Conduct and Ethics applicable to its chief executive officer, chief financial officer, and other financial executives[115]. - The Company’s Insider Trading Policy is designed to promote compliance with insider trading laws and New York Stock Exchange listing standards[116]. Market Conditions - The value of private nonresidential construction in the U.S. was $743.8 billion in 2024, up from $706.1 billion in 2023, indicating a positive market trend[144]. - The average 30-year fixed mortgage rate was approximately 6.72% in 2024, slightly down from 6.81% in 2023, which may influence housing starts[143]. Currency and Foreign Operations - The strengthening of the U.S. dollar could lead to unfavorable translation effects on reported results from foreign operations[55]. - The net investment in foreign subsidiaries translated into U.S. dollars was $326.4 million as of December 28, 2024, with potential losses from a 10 percent adverse change in foreign currency rates amounting to $32.6 million[201]. - As of December 28, 2024, $183.0 million of cash and cash equivalents were held by foreign subsidiaries, with no taxes accrued on undistributed earnings considered permanently reinvested[180]. Debt and Obligations - Total debt as of December 28, 2024, was $1.1 million, representing less than 1 percent of total capitalization, indicating a strong balance sheet[189]. - Contractual cash obligations total $1.207 billion, including $1.05 billion in supply commitments for raw materials, primarily copper cathode and brass scrap[193]. - The Company has a long-term debt agreement with Bank of America, N.A., dated March 31, 2021[126].

Financial Performance - Q4 2024 net sales reached $923.5 million, a 26.1% increase from $732.4 million in Q4 2023[1] - Q4 2024 operating income was $170.3 million, up 26.0% from $135.2 million in Q4 2023[1] - Full year 2024 net sales totaled $3.8 billion, reflecting a 10.2% increase compared to $3.4 billion in 2023[1] - Full year 2024 operating income was $770.4 million, a slight increase of 1.9% from $756.1 million in 2023[1] - Consolidated net income for the year ended December 28, 2024, was $617,542, compared to $609,649 for the previous year, reflecting an increase of approximately 1.5%[15] Cash Flow and Investments - The company generated $140.1 million in cash from operations in Q4 2024, totaling $645.9 million for the year[1] - Year-end cash and short-term investments amounted to $1.06 billion, with a current ratio of 5.1 to 1[1] - Net cash provided by operating activities decreased to $645,908 from $672,766, a decline of about 4.0% year-over-year[15] - Cash flows from investing activities showed a significant outflow of $606,935, compared to a net inflow of $135,080 in the previous year[16] - Cash, cash equivalents, and restricted cash at the end of the year totaled $1,038,895, down from $1,174,223, a decrease of about 11.5%[16] - The company reported a net cash used in financing activities of $160,478, compared to $104,509 in the previous year, indicating increased cash outflows[16] Shareholder Returns - Dividends paid to stockholders increased to $89,107 from $66,868, representing a rise of approximately 33.3%[16] - The company repurchased common stock amounting to $48,681, up from $19,303, indicating a substantial increase in share buybacks[16] Operational Highlights - The increase in Q4 net sales by $191.2 million was primarily due to acquisitions and improved unit volume in U.S. construction-related products[1] - The company completed the integration of Nehring Electrical Works and Elkhart Products acquisitions by year-end 2024[1] - Mueller Industries maintains a positive outlook for 2025, focusing on reinvestment and expansion opportunities in nonferrous metals manufacturing[2] Expenses and Working Capital - Depreciation and amortization expenses rose to $53,376 from $40,824, an increase of approximately 30.7%[15] - The company experienced a decrease in receivables by $56,565, compared to an increase of $30,915 in the previous year, indicating a shift in working capital management[15] Market Conditions - COMEX copper prices averaged $4.22 per pound in Q4 2024, which is 13% higher than the prior year period[1] Currency Impact - The effect of exchange rate changes on cash resulted in a loss of $13,823, contrasting with a gain of $5,590 in the prior year[16]

Earnings Announcement - Mueller Industries Inc (NYSE: MLI) is scheduled to report Q4 and full-year 2024 results on February 4th before the market opens [1] Analyst Background - The analyst holds a Master of Science in Finance and focuses on long-term investments with a 5-10 year horizon [1] - The analyst prefers a portfolio mix of growth, value, and dividend-paying stocks, with a particular emphasis on value stocks [1] - The analyst occasionally engages in selling options as part of their investment strategy [1] Disclosure Information - The analyst has no stock, option, or derivative positions in the mentioned companies and no plans to initiate any within the next 72 hours [2] - The article represents the analyst's personal opinions and is not influenced by any compensation or business relationships with the mentioned companies [2]