Mestek : 2021 Third Quarter Report

THIRD QUARTER REPORT

TO SHAREHOLDERS

For the quarter ended

September 30, 2021

MESTEK, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended		Nine Months Ended
September 30,		September 30,
2021		2020		2021		2020

(Dollars and Shares in

thousands, except

Earnings per common share)

Net Sales	$	93,592			$	84,118	$	257,571			$	231,354
Cost of Goods Sold		68,758					59,239			186,100					164,337
Gross Profit		24,834					24,879			71,471					67,017
Selling Expense		9,918					8,555			27,852					25,878
General and Administrative Expense		5,271					5,142			15,504					15,342
Engineering Expense		4,237					4,099			12,488					12,526
Hedging and Other - net		12,568					(3,381)			7,563					(33,958)
Operating Profit		(7,160)					10,464			8,064					47,229
Interest Income (Expense) - net		(27)					56			(85)					589
Other Income (Expense) - net		(68)					40			(212)					(7)
Income Before Income Taxes		(7,255)					10,560			7,767					47,811
Provision for Income Tax		(1,996)					2,831			2,087					12,925
Net Income		(5,259)					7,729			5,680					34,886
Less: Net Income - Non-controlling Interests		95					23			127					2
Net Income Attributable to Mestek, Inc.	$	(5,354)			$	7,706		$	5,553			$	34,884
Basic Earnings Per Common Share	$	(0.71)			$	1.03	$	0.74			$	4.65
Basic Weighted Average Shares Outstanding		7,541					7,507			7,518					7,507
Diluted Earnings Per Common Share	$	(0.71)			$	1.02	$	0.74			$	4.60
Diluted Weighted Average Shares Outstanding		7,541					7,589			7,518					7,588

MESTEK, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

September 30,		December 31,
2021		2020

(Dollars in thousands)

ASSETS Current Assets

Cash and Cash Equivalents Short-Term Investments

Accounts Receivable - less allowances of $1,762 and $1,837, respectively Inventories - net

Property Held for Sale Other Current Assets

Total Current Assets

Property and Equipment - net

Right-of-use Assets - net

Deferred Tax Assets

Other Assets - net

Goodwill

Total Assets

LIABILITIES

Current Liabilities

Accounts Payable

Accrued Payroll and Related Expenses

Customer Deposits

Current Portion of Environmental Reserves

Current Portion of Operating Lease Obligations

Warranty Reserve

Other Accrued Liabilities

Total Current Liabilities

Environmental Reserves - long term

Operating Lease Obligations - long term

Long-Term Debt, net of current portion

Other Liabilities

Total Liabilities

• 106,500
  -

65,184

75,945

2,327

38,424

288,380

57,210

9,823

1,432

5,539

35,659

• 398,043

• 13,743
  23,813
  26,812
  119
  3,700
  2,757
  9,890
  80,834

3,352

6,123

7,738

6,376

104,423

• 71,793
  24,994
  57,103
  58,813
  4,826
  95,515

313,044

34,450

10,931

1,431

4,053

21,940

• 385,849

• 13,577
  20,001
  15,558
  119
  3,917
  2,755
  14,630
  70,557

3,432

7,014

10,163

6,516

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
Paid in Capital		5,788
Retained Earnings		298,467
Treasury Shares, at cost (886,365 and 878,010 common shares, respectively		(11,613)
Accumulated Other Comprehensive Loss			(332)
Total Mestek, Inc. Shareholders' Equity		292,732
Non-controlling Interest			888
Total Shareholders' Equity			293,620
Total Liabilities and Shareholders' Equity		$	398,043

418

5,792

292,917

(11,293)

(428)

287,406

761

288,167

• 385,849

MESTEK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30,

(Unaudited)

		2021			2020
		(Dollars in thousands)
Cash Flows from Operating Activities:
Net Income	$	5,680	$	34,886
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization of Intangibles		4,237			3,430
Operating Lease Amortization		3,195			3,264
Unrealized Loss on Trading Securities		15,703			6,080
Provision for Losses on Accounts Receivable, net of
write offs and recoveries		(44)			(21)
Gain on Sale of Property and Equipment		(1,715)			(9)
Change in Assets and Liabilities:
Accounts Receivable		(8,004)			(10,089)
Inventory		(14,831)			(3,924)
Accounts Payable		161			(298)
Customer Deposits		11,247			2,555
Environmental Reserves		(79)			(69)
Operating Leases		(3,195)			(3,264)
Other Assets and Liabilities, net		(3,595)			(5,721)
Net Cash Provided by Operating Activities		8,760			26,820
Cash Flows from Investing Activities:
Proceeds (Purchases) from Trading Securities, net		43,144			(24,496)
Maturities of Short-Term Investments		24,994			23,648
Acquisition		(40,518)			-
Capital Expenditures		(3,413)			(701)
Proceeds from Sale of Fixed Assets		4,215			10
Net Cash Provided by (Used in) Investing Activities		28,422			(1,539)
Cash Flows from Financing Activities:
Payoff of Notes Payable		(2,425)			-
Net Cash Used in Financing Activities		(2,425)			-
Net Increase in Cash and Cash Equivalents		34,757			25,281
Exchange Rate Effect on Cash and Cash Equivalents		(50)			(88)
Cash and Cash Equivalents - Beginning of Period		71,793			63,552
Cash and Cash Equivalents - End of Period	$	106,500		$	88,745