Paul Mueller profits fall nearly 48% after increased expenses

With higher expenses in the third quarter, Paul Mueller Co. (OTC: MUEL) posted a 47.6 percent decrease in net income to $1.3 million compared to $2.5 million a year earlier.

The Springfield-based stainless steel equipment manufacturer produced diluted share earnings of $1.05, down from $2.01 in third-quarter 2013, according to a news release.

While sales improved to $51.3 million from $44.4 million a year earlier, it wasn’t enough to offset an increase in sales costs to $39.5 million from $31.3 million last year. Gross profit decreased 9.8 percent to $11.8 million for the three months ended Sept. 30.

Third-quarter financial notes:

• Financial results for the last three, nine and 12 months ended Sept. 30 also were affected because of an accident involving a field fabricated tank. A reserve of $2.9 million was put in place as the company sorts out plans whether to replace the tank.
• For the year ended in the third quarter, financials were adversely affected by $1.3 million in expenses related to an arbitration settlement Dec. 19, 2012.
• Within total sales, domestic sales were $268,000 in the third quarter, down from $2.1 million a year earlier. European sales rose to $1 million from $515,000.
• Company backlog was $67.7 million as of Sept. 30, roughly flat from the end of 2013.

As of Sept. 30, Mueller Co.’s assets were $114 million, according to the release.

Mueller Co.’s over-the-counter stock closed Nov. 5 at $48, compared to a 52-week range of $30 to $54.