Mestek : 2021 Annual Report

SELECTED FINANCIAL DATA (unaudited)

Selected financial data for Mestek, Inc. and its subsidiaries, (the "Company") for each of the last five years is shown in the following table, which is derived from and should be read in conjunction with the Consolidated Financial Statements included elsewhere in this report.

SUMMARY OF FINANCIAL POSITION as of December 31,
		2021			2020			2019			2018			2017
					(Dollars in	thousands except per share data)
Total Assets	$	407,993		$	385,849	$	326,003	$	279,320	$	265,811
Working Capital		214,605			242,487			196,543			167,127			144,365
Total Debt		8,767			10,163			10,163			10,163			10,163
Mestek Inc. Shareholders' Equity		299,358			287,406			241,569			208,906			192,279
Shareholders' Equity Per Common Share (1)	$	39.50		$	38.29	$	32.18	$	27.88	$	25.67

1. Shareholders' Equity per common share amounts, a non-GAAP measure, are computed using the common shares outstanding as of December 31, 2021, 2020, 2019, 2018, and 2017.

SUMMARY OF OPERATIONS for the years ended December 31,
		2021			2020			2019			2018			2017
					(Dollars in	thousands except	per	share data)
Revenues	$	350,795	$	310,922	$	341,734	$	350,675	$	329,283
Net Income Attributable to Mestek, Inc.	$	12,408	$	44,983	$	31,968	$	18,525	$	15,026
Earnings per Common Share:
Basic Earnings per Common Share:				$	5.99		$	4.26		$	2.47		$	2.01
Net Income	$	1.65
Diluted Earnings per Common Share:			$	5.93	$	4.21	$	2.44	$	1.99
Net Income	$	1.65

Page 1 of 26

6/20/2022 4:04 PM

Independent Accountant's Review Report

Board of Directors and Shareholders

Mestek, Inc.

We have reviewed the accompanying consolidated financial statements of Mestek, Inc. and its subsidiaries (the Company), which comprise the consolidated balance sheet as of December 31, 2021, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). A review includes primarily applying analytical procedures to management's financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Accountant's Responsibility

Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.

We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our review.

Accountant's Conclusion

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America.

Report on 2020 Financial Statements.

The 2020 financial statements of Mestek, Inc. and its subsidiaries were audited by us, and we expressed an unmodified opinion on them in our report, dated August 11, 2021. We have not performed any auditing procedures since that date.

Boston, Massachusetts

June 21, 2022

2

MESTEK, INC.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2021 and 2020

				December 31,				December 31,
				2021				2020
ASSETS				(Dollars	in thousands)
Current Assets
Cash and Cash Equivalents			$	71,684	$	71,793
Short-Term Investments				-				24,994
Accounts Receivable - less allowances of $1,690 and $1,804, respectively		54,354				57,103
Inventories - net				79,254				58,813
Property Held for Sale				2,327				4,826
Commodity Investments				73,153				84,253
Other Current Assets				14,693				11,262
Total Current Assets				295,465				313,044
Property and Equipment - net				48,859				34,450
Right-of-use Assets - net				12,949				10,931
Deferred Tax Assets				-				1,431
Other Assets - net				8,342				4,053
Goodwill				42,378				21,940
Total Assets			$	407,993			$	385,849
LIABILITIES
Current Liabilities
Accounts Payable			$	14,226	$	13,577
Accrued Payroll and Related Expenses		19,635				20,001
Customer Deposits				28,145				15,558
Current Portion of Environmental Reserves		116				119
Current Portion of Operating Lease Obligations		4,187				3,917
Warranty Reserve				2,757				2,755
Other Accrued Liabilities				11,794				14,630
Total Current Liabilities				80,860				70,557
Environmental Reserves - long term		3,320				3,432
Operating Lease Obligations - long term		8,763				7,014
Deferred Tax Liabilities				1,276				-
Long-Term Debt				8,767				10,163
Other Liabilities				4,796				6,516
Total Liabilities				107,782				97,682
SHAREHOLDERS' EQUITY
Common Stock, no par, stated value $0.05 per share, 20,000,000 shares
authorized, 8,473,288 and 8,384,726 shares issued, respectively		422				418
Paid in Capital				5,788				5,792
Retained Earnings				305,325				292,917
Treasury Shares, at cost (894,720 and 878,010		(11,932)				(11,293)
common shares, respectively)
Accumulated Other Comprehensive Loss		(245)				(428)
Total Mestek, Inc. Shareholders' Equity		299,358				287,406
Non-controlling Interests				853				761
Total Shareholders' Equity				300,211				288,167
Total Liabilities and Shareholders' Equity		$	407,993		$	385,849
See Accompanying Notes to the Consolidated Financial Statements.
Page 3 of 26	6/20/2022 4:04 PM

MESTEK, INC.

CONSOLIDATED STATEMENTS OF INCOME

For the years ended December 31, 2021 and 2020

		2021	shares		2020
		(Dollars and	in thousands,
		except earnings per common share)
Net Sales	$	350,795	$	310,922
Cost of Goods Sold		253,305			214,624
Gross Profit		97,490			96,298
Selling Expense		37,943			34,736
General and Administrative Expense		25,966			26,691
Engineering Expense		16,626			16,766
Hedging and Other Income - net		(737)			(43,253)
Operating Profit		17,692			61,358
Interest (Expense) Income - net		(120)			605
Other Expense - net		(273)			(197)
Income Before Income Taxes		17,299			61,766
Provision for Income Taxes		4,799			16,776
Net Income		12,500			44,990
Less: Net Income - Non-controlling Interests		92			7
Net Income Attributable to Mestek, Inc.	$	12,408		$	44,983
Basic Earnings Per Common Share
$	1.65	$	5.99
Basic Weighted Average Shares Outstanding		7,534			7,507
Diluted Earnings Per Common Share	$	1.65	$	5.93
Diluted Weighted Average Shares Outstanding		7,534			7,588

See Accompanying Notes to the Consolidated Financial Statements.

Page 4 of 26

6/20/2022 4:04 PM

MESTEK, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2021 and 2020

		2021			2020
		(Dollars in thousands)
Net Income	$	12,500	$	44,990
Other Comprehensive Income
Cumulative Translation Adjustments		183			854
Other Comprehensive Income		183			854
Comprehensive Income		12,683			45,844
Less: Comprehensive Income-Non-controlling Interests		92			7
Comprehensive Income Attributable to Mestek, Inc.	$	12,591		$	45,837

See Accompanying Notes to the Consolidated Financial Statements.

Page 5 of 26

6/20/2022 4:04 PM