Mueller Industries, Inc. Reports Fourth Quarter and Fiscal 2009 Results
By Mueller Industries Inc., PRNEMonday, February 1, 2010
MEMPHIS, Tennessee, February 2 - Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI),
announced today that Mueller recognized non-cash impairment charges that, in
aggregate, decreased pre-tax income by US$29.8 million, and net income by 74
cents per diluted share for the fourth quarter of 2009. Primarily, the
impairment charges reduce the carrying value of goodwill. The impairment
charges resulted in a net loss for the fourth quarter of 2009 of US$17.5
million, or 47 cents per diluted share. Without the impairment charges, the
Company's net earnings for the fourth quarter would have been US$10.4
million, or 28 cents per diluted share.
For the fiscal year ended December 26, 2009, Mueller earned US$4.7
million, or 12 cents per diluted share. For fiscal 2008, the Company earned
US$80.8 million, or US$2.17 per diluted share. Net sales for 2009 were
US$1.55 billion compared with US$2.56 billion in 2008.
Financial and Operating Highlights
Mr. Karp said:
- "The decrease in net sales in 2009 was primarily due to lower unit shipments as well as the lower average cost of copper, the Company's principal raw material, which is generally passed through to customers by changes in selling prices. - "For the full year, our Plumbing & Refrigeration segment posted operating earnings of US$27.0 million on net sales of US$892.1 million, which compares with operating earnings of US$106.8 million on net sales of US$1.40 billion in 2008. During the fourth quarter of 2009, non-cash impairment charges totaling US$19.5 million reduced operating earnings. - "Our OEM segment posted operating earnings of US$28.7 million during 2009 on net sales of US$664.1 million, which compares with operating earnings of US$45.3 million on net sales of US$1.18 billion for 2008. During the fourth quarter of 2009, non-cash impairment charges totalling US$10.3 million reduced operating earnings. - "Cash provided by operating activities was US$77.4 million in 2009 compared with US$180.9 million during 2008. Our focus on cash flow continues to be a bedrock characteristic of our management. - "Our current ratio was 4.4 to 1 and our working capital was US$625.5 million, of which US$346.0 million was cash on hand, equal to US$9.19 per share. - "As of year end, our financial leverage was modest with a debt to total capitalization ratio of less than 20 percent. Our financial position is strong. If we repaid all outstanding indebtedness, we would still have in excess of US$150 million in cash. - "Stockholders' equity was US$713.2 million which equates to a book value per share of US$18.94. - "Capital expenditures during 2009 totaled US$13.9 million. Capital expenditures will likely rise in 2010."
Business Outlook for 2010
Regarding the outlook for 2010, Mr. Karp said, "The recovery of the U.S.
economy appears to be well underway. We believe the residential construction
sector has hit bottom and is moving up, after almost four years of deep
declines. We expect the recovery in residential construction to be modest due
to the continuing high rates of unemployment, the impact of mounting
foreclosures, the tightening of lending terms and the phase out of
governmental stimulus spending. Even so, housing starts are likely to rise
more than 20 percent in 2010 to 700,000 units, up from the extraordinarily
low 550,000 units started in 2009.
"The private non-residential construction sector, which includes offices,
industrial and retail projects, declined by over 20 percent in 2009, and the
outlook is for a further decline in 2010, with recovery commencing in 2011.
Most of the other markets Mueller sells to will likely improve in 2010, in
pace with the overall economy. We expect business conditions will strengthen
and improve as the year 2010 progresses.
"Our strategy for 2010 is to maintain and enhance our operational
excellence. We will continue to promptly adjust our operations to the
on-going flow of business. We are committed to making the capital investments
that advance our strong competitive position in our marketplace. Acquisitions
have helped our Company grow over the past 20 years. We are keenly interested
in acquisitions that would expand our product lines and make us a more
valuable resource for our customers."
Mueller Industries, Inc. is a leading manufacturer of copper tube and
fittings; brass and copper alloy rod, bar and shapes; aluminum and brass
forgings; aluminum and copper impact extrusions; plastic fittings and valves;
refrigeration valves and fittings; and fabricated tubular products. Mueller's
operations are located throughout the United States and in Canada, Mexico,
Great Britain, and China. Mueller's business is importantly linked to: (1)
the construction of new homes; (2) the improvement and reconditioning of
existing homes and structures; and (3) the commercial construction market
which includes office buildings, factories, hotels, hospitals, etc.
* * * * * * * * * *
Statements in this release that are not strictly historical may be
"forward-looking" statements, which involve risks and uncertainties. These
include economic and currency conditions, continued availability of raw
materials and energy, market demand, pricing, competitive and technological
factors, and the availability of financing, among others, as set forth in the
Company's SEC filings. The words "outlook," "estimate," "project," "intend,"
"expect," "believe," "target," and similar expressions are intended to
identify forward-looking statements. The reader should not place undue
reliance on forward-looking statements, which speak only as of the date of
this report. The Company has no obligation to publicly update or revise any
forward-looking statements to reflect events after the date of this report.
(All amounts in U.S. dollars unless otherwise stated.) MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) For the Quarter Ended For the Year Ended --------------------- ------------------ December 26, December 27, December 26, December 27, 2009 2008 2009 2008 ---- ---- ---- ---- (Unaudited) (Unaudited) Net sales $432,977 $435,373 $1,547,225 $2,558,448 Cost of goods sold 372,247 371,648 1,327,022 2,233,123 Depreciation and amortization 10,292 10,828 41,568 44,345 Selling, general, and administrative expense 27,593 28,301 116,660 136,884 Impairment charge 29,755 18,000 29,755 18,000 ------ ------ ------ ------ Operating (loss) income (6,910) 6,596 32,220 126,096 Interest expense (2,410) (3,295) (9,963) (19,050) Other income, net 184 4,793 872 13,896 --- ----- --- ------ (Loss) income before income taxes (9,136) 8,094 23,129 120,942 Income tax expense (7,996) (340) (17,792) (38,332) ------ ---- ------- ------- Consolidated net (loss) income (17,132) 7,754 5,337 82,610 Less: net (income) loss attributable to noncontrolling interest (395) 20 (662) (1,796) ---- -- ---- ------ Net (loss) income attributable to Mueller Industries, Inc. $(17,527) $7,774 $4,675 $80,814 ======== ====== ====== ======= Weighted average shares for basic (loss) earnings per share 37,584 37,142 37,336 37,123 Effect of dilutive stock options - 28 88 186 --- --- --- --- Adjusted weighted average shares for diluted (loss) earnings per share 37,584 37,170 37,424 37,309 ------ ------ ------ ------ Basic (loss) earnings per share $(0.47) $0.21 $0.13 $2.18 ====== ===== ===== ===== Diluted (loss) earnings per share $(0.47) $0.21 $0.12 $2.17 ====== ===== ===== ===== Dividends per share $0.10 $0.10 $0.40 $0.40 ===== ===== ===== ===== Summary Segment Data: --------------------- Net sales: Plumbing & Refrigeration segment $231,036 $241,069 $892,071 $1,400,682 OEM segment 204,190 197,227 664,088 1,176,892 Elimination of intersegment sales (2,249) (2,923) (8,934) (19,126) ------ ------ ------ ------- Net sales $432,977 $435,373 $1,547,225 $2,558,448 ======== ======== ========== ========== Operating (loss) income: Plumbing & Refrigeration segment $(11,156) $20,882 $27,043 $106,785 OEM segment 10,410 (9,902) 28,725 45,278 Unallocated expenses (6,164) (4,384) (23,548) (25,967) ------ ------ ------- ------- Operating (loss) income $(6,910) $6,596 $32,220 $126,096 ======= ====== ======= ========
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 26, December 27, 2009 2008 ---- ---- (Unaudited) ASSETS Cash and cash equivalents $346,001 $278,860 Accounts receivable, net 228,739 219,035 Inventories 191,262 210,609 Other current assets 42,841 46,322 ------ ------ Total current assets 808,843 754,826 Property, plant, and equipment, net 250,395 276,927 Other assets 120,903 151,160 ------- ------- $1,180,141 $1,182,913 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $24,325 $24,184 Accounts payable 73,837 63,732 Other current liabilities 85,208 113,668 ------ ------- Total current liabilities 183,370 201,584 Long-term debt 158,226 158,726 Pension and postretirement liabilities 44,320 38,452 Environmental reserves 23,268 23,248 Deferred income taxes 31,128 33,940 Other noncurrent liabilities 887 1,698 --- ----- Total liabilities 441,199 457,648 Total Mueller Industries, Inc. stockholders' equity 713,167 700,683 Noncontrolling interest 25,775 24,582 ------ ------ Total equity 738,942 725,265 ------- ------- $1,180,141 $1,182,913 ========== ==========
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year Ended ------------------ December 26, December 27, 2009 2008 ---- ---- (Unaudited) Operating activities: Net income attributable to Mueller Industries, Inc. $4,675 $80,814 Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization 41,758 44,884 Gain on early retirement of debt (128) (21,575) Deferred income taxes (2,554) (4,465) Stock-based compensation expense 2,633 2,915 Loss on disposal of properties 683 598 Net income attributable to noncontrolling interest 662 1,796 Income tax benefit from exercise of stock options (203) (92) Impairment charge 29,755 18,000 Changes in assets and liabilities Receivables (6,482) 91,705 Inventories 22,699 44,591 Other assets (505) (7,855) Current liabilities (13,823) (84,584) Other liabilities (1,808) 12,741 Other, net 26 1,459 -- ----- Net cash provided by operating activities 77,388 180,932 ------ ------- Investing activities: Capital expenditures (13,942) (22,261) Proceeds from sales of properties 611 81 Net withdrawals from (deposits into) restricted cash balances 7,013 (6,117) ----- ------ Net cash used in investing activities (6,318) (28,297) ------ ------- Financing activities: Repayments of long-term debt (370) (126,877) Dividends paid to stockholders of Mueller Industries, Inc. (14,944) (14,847) Dividends paid to noncontrolling interest (1,449) - Issuance of shares under incentive stock option plans from treasury 9,145 1,167 Issuance (repayment) of debt by joint venture, net 131 (25,564) Acquisition of treasury stock (870) (32) Income tax benefit from exercise of stock options 203 92 --- -- Net cash used in financing activities (8,154) (166,061) ------ -------- Effect of exchange rate changes on cash 4,225 (16,332) ----- ------- Increase (decrease) in cash and cash equivalents 67,141 (29,758) Cash and cash equivalents at the beginning of the year 278,860 308,618 ------- ------- Cash and cash equivalents at the end of the year $346,001 $278,860 ======== ========
MUELLER INDUSTRIES, INC. RECONCILIATION OF NET (LOSS) INCOME AS REPORTED TO NET INCOME BEFORE IMPAIRMENT CHARGES (In thousands, except per share data) Earnings without impairment charges is a measurement not derived in accordance with generally accepted accounting principles (GAAP). Excluding non-cash impairment charges is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business. Impairments reflect the impact of long-term decisions and investments that were made in prior periods. Reconciliation of earnings without impairment charges to net loss as reported is as follows: For the Quarter Ended December 26, 2009 --------------------------------------- Pro forma Impact of Without As Impairment Impairment Reported Charges (A) Charges -------- ----------- ------- (Unaudited) Operating (loss) income $(6,910) $29,755 $22,845 Interest expense (2,410) - (2,410) Other income, net 184 - 184 --- --- --- (Loss) income before income taxes (9,136) 29,755 20,619 Income tax expense (7,996) (1,807) (9,803) ------ ------ ------ Consolidated net (loss) income (17,132) 27,948 10,816 Less: net income attributable to noncontrolling interest (395) - (395) ---- --- ---- Net (loss) income attributable to Mueller Industries, Inc. $(17,527) $27,948 $10,421 ======== ======= ======= Diluted (loss) earnings per share $(0.47) $0.74 $0.28 ====== ===== ===== (A) The impairment charges, primarily goodwill, are estimates that will be adjusted, if necessary, after certain valuation procedures are completed as required by GAAP.
Kent A. McKee of Mueller Industries, +1-901-753-3208
Tags: Memphis, Mueller Industries Inc., Tennessee, United Kingdom