Mueller Industries, Inc. Reports Second Quarter 2010 Earnings
By Mueller Industries Inc., PRNEMonday, July 19, 2010
MEMPHIS, Tennessee, July 20, 2010 - Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI),
announced today that Mueller's net income in the second quarter of 2010 was
US$15.6 million, or 41 cents per diluted share. This compares with net income
of US$6.0 million, or 16 cents per diluted share, for the same period of
2009. Net sales for the second quarter of 2010 were US$540.4 million compared
with US$367.8 million in 2009. For the first half of 2010, net income was
US$49.5 million, or US$1.31 per diluted share, on net sales of US$1.03
billion. This compares with net income of US$3.5 million, or 9 cents per
diluted share, on net sales of US$694.4 million for the first half of 2009.
Net sales of the Company's core product lines increased substantially due
to the higher market values of copper and brass, the Company's principal raw
materials, which are largely passed through to customers. In the second
quarter of 2010, the Comex average price of copper was 48 percent higher than
in the second quarter of 2009.
Financial and Operating Highlights
Regarding the second quarter of 2010, Mr. Karp said:
- "Our Plumbing & Refrigeration segment posted operating earnings of
US$19.7 million on net sales of US$285.7 million which compares with
Prior year earnings of US$11.9 million on net sales of US$229.8
million. Improved results were due to better spreads partially offset
by lower unit shipments.
- "Our OEM segment posted operating earnings of US$16.9 million during
the second quarter of 2010 on net sales of US$257.8 million, which
compares with operating earnings of US$8.1 million on net sales of
US$139.9 million for the same period in 2009. Much of the improvement
was due to higher unit shipments.
- "Our financial condition remains strong. We ended the quarter with
US$397.2 million in cash equal to US$10.53 per share.
- "Total stockholders' equity was US$755.4 million which equates to a
book value of US$20.03 per share.
- "Our current ratio remains solid at 4.0 to 1, and our financial
leverage is conservative with a debt to total capitalization ratio of
20.3 percent.
- "The Comex average price of copper was US$3.19 per pound in the second
quarter of 2010, which compares with US$2.15 in the second quarter of
2009. Higher selling prices due to rising material values accounted
for approximately US$111 million of the increase in net sales
primarily in the Plumbing & Refrigeration segment. Approximately US$50
million of the increase in net sales was attributable to increased
unit volume primarily in the OEM segment.
- "We recognized a charge of US$2.5 million for environmental matters
related to Eureka Mills, a non-operating site. "
Business Outlook
Regarding the outlook, Mr. Karp said, "Uncertainty seems to be the
underlying theme. Looming foreclosures, weak jobs reports, an environment of
higher taxes, and rising federal deficits are causing widespread anxiety.
However, we believe Mueller's financial strength and industry leadership
positions us to pursue opportunities as they arise."
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
that 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.
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter For the Six Months
Ended Ended
--------------- ------------------
June 26, June 27, June 26, June 27,
2010 2009 2010 2009
---- ---- ---- ----
(Unaudited) (Unaudited)
Net sales $540,388 $367,800 $1,025,656 $694,358
Cost of goods sold 466,645 313,353 879,693 600,736
Depreciation and
amortization 10,090 10,355 20,438 20,835
Selling, general,
and administrative
expense 33,468 30,316 70,791 61,474
Insurance
settlement 1,210 - (21,296) -
----- --- ------- ---
Operating income 28,975 13,776 76,030 11,313
Interest expense (2,964) (2,482) (5,496) (5,118)
Other (expense)
income, net (2,518) 385 (2,378) 1,012
------ --- ------ -----
Income before
income taxes 23,493 11,679 68,156 7,207
Income tax expense (7,456) (5,512) (17,320) (3,550)
------ ------ ------- ------
Consolidated net
income 16,037 6,167 50,836 3,657
Less: net income
attributable to
noncontrolling
interest (479) (139) (1,320) (121)
---- ---- ------ ----
Net income
attributable to
Mueller
Industries, Inc. $15,558 $6,028 $49,516 $3,536
======= ====== ======= ======
Weighted average
shares for basic
earnings per share 37,674 37,143 37,631 37,143
Effect of dilutive
stock-based
awards 43 120 69 97
--- --- --- ---
Adjusted weighted
average shares for
diluted earnings
per share 37,717 37,263 37,700 37,240
------ ------ ------ ------
Basic earnings per
share $0.41 $0.16 $1.32 $0.10
===== ===== ===== =====
Diluted earnings
per share $0.41 $0.16 $1.31 $0.09
===== ===== ===== =====
Dividends per share $0.10 $0.10 $0.20 $0.20
===== ===== ===== =====
Summary Segment
Data:
---------------
Net sales:
Plumbing &
Refrigeration
Segment $285,717 $229,763 $542,379 $420,156
OEM Segment 257,780 139,885 489,984 278,277
Elimination of
intersegment sales (3,109) (1,848) (6,707) (4,075)
------ ------ ------ ------
Net sales $540,388 $367,800 $1,025,656 $694,358
======== ======== ========== ========
Operating income:
Plumbing &
Refrigeration
Segment $19,740 $11,882 $60,199 $22,213
OEM Segment 16,932 8,052 33,063 1,786
Unallocated
expenses (7,697) (6,158) (17,232) (12,686)
------ ------ ------- -------
Operating income $28,975 $13,776 $76,030 $11,313
======= ======= ======= =======
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 26, December 26,
2010 2009
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $397,155 $346,001
Accounts receivable, net 286,578 228,739
Inventories 185,054 191,262
Other current assets 35,181 42,841
------ ------
Total current assets 903,968 808,843
Property, plant, and equipment, net 237,743 250,395
Other assets 122,491 120,903
------- -------
$1,264,202 $1,180,141
========== ==========
LIABILITIES AND EQUITY
Current portion of debt $40,765 $24,325
Accounts payable 98,336 73,837
Other current liabilities 86,453 85,208
------ ------
Total current liabilities 225,554 183,370
Long-term debt, less current portion 158,226 158,226
Pension and postretirement liabilities 43,082 44,320
Environmental reserves 25,630 23,268
Deferred income taxes 28,364 31,128
Other noncurrent liabilities 860 887
--- ---
Total liabilities 481,716 441,199
------- -------
Total Mueller Industries, Inc.
stockholders' equity 755,436 713,167
Noncontrolling interest 27,050 25,775
------ ------
Total equity 782,486 738,942
------- -------
$1,264,202 $1,180,141
========== ==========
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Six Months
Ended
------------------
June 26, June 27,
2010 2009
---- ----
(Unaudited)
Operating activities:
Consolidated net income $50,836 $3,657
Reconciliation of consolidated net
income to net cash provided by
operating activities:
Depreciation and amortization 20,554 20,946
Stock-based compensation expense 1,435 1,220
Insurance settlement (21,296) -
Insurance proceeds -noncapital
related 5,561 -
Loss on disposal of properties 164 260
Deferred income taxes (4,370) (136)
Income tax benefit from exercise of
stock options (88) -
Gain on early retirement of debt - (128)
Changes in assets and liabilities:
Receivables (60,819) 16,831
Inventories 4,796 45,209
Other assets 6,979 1,059
Current liabilities 26,129 (21,741)
Other liabilities 2,870 (546)
Other, net (363) (101)
---- ----
Net cash provided by operating
activities 32,388 66,530
------ ------
Investing activities:
Capital expenditures (9,286) (8,725)
Insurance proceeds for property and
equipment 17,703 -
Net withdrawals from restricted cash
balances 11 13,039
Proceeds from sales of properties 23 606
--- ---
Net cash provided by investing
activities 8,451 4,920
----- -----
Financing activities:
Dividends paid (7,529) (7,428)
Issuance (repayment) of debt by joint
venture, net 16,431 (14,567)
Repayments of long-term debt - (370)
Dividends paid to noncontrolling
interest - (1,449)
Acquisition of treasury stock (75) -
Issuance of shares under incentive
stock option plans from treasury 2,465 -
Income tax benefit from exercise of
stock options 88 -
--- ---
Net cash provided by (used in)
financing activities 11,380 (23,814)
------ -------
Effect of exchange rate changes on
cash (1,065) 7,463
------ -----
Increase in cash and cash equivalents 51,154 55,099
Cash and cash equivalents at the
beginning of the period 346,001 278,860
------- -------
Cash and cash equivalents at the end
of the period $397,155 $333,959
======== ========
MUELLER INDUSTRIES, INC.
RECONCILIATION OF NET INCOME AS REPORTED
TO NET INCOME BEFORE INSURANCE SETTLEMENT
(In thousands, except per share data)
Earnings without insurance settlement is a measurement not derived in
accordance with generally accepted accounting principles (GAAP). Excluding
the insurance settlement is useful as it measures the operating results that
are the outcome of daily operating decisions made in the normal course of
business. The insurance settlement resulted from reimbursement for losses
claimed as a result of a fire at our U.K. subsidiary in November 2008, the
results of which are not impacted by daily operations and are not expected
to recur in future periods. Reconciliation of earnings without insurance
settlement to net income as reported is as follows:
For the Six Months Ended June 26, 2010
----------------------------------
Pro forma
Impact of Without
As Insurance Insurance
Reported Settlement Settlement
-------- ---------- ----------
(Unaudited)
Operating income $76,030 $(21,296) $54,734
Interest expense (5,496) - (5,496)
Other income, net (2,378) - (2,378)
------ --- ------
Income before income taxes 68,156 (21,296) 46,860
Income tax expense (Note A) (17,320) (618) (17,938)
------- ---- -------
Consolidated net income 50,836 (21,914) 28,922
Less net income attributable
to noncontrolling interest (1,320) - (1,320)
------ --- ------
Net income attributable to
Mueller Industries, Inc. $49,516 $(21,914) $27,602
======= ======== =======
Diluted earnings per share $1.31 $(0.58) $0.73
===== ====== =====
(A) Realization of this insurance settlement resulted in a tax
benefit primarily from the utilization of U.K. net operating
losses that were previously reserved.
Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208
Tags: July 20, Memphis, Mueller Industries Inc., Tennessee, United Kingdom
