Mueller Industries, Inc. Reports Third Quarter Results
By Mueller Industries Inc., PRNEMonday, October 18, 2010
MEMPHIS, Tennessee, October 19, 2010 - Quarterly and Year-to-Date Earnings
Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI),
announced today that Mueller's net income in the third quarter was US$18.9
million, or 50 cents per diluted share, on net sales of US$507.2 million.
This compares with net income of US$18.7 million, or 50 cents per diluted
share, on net sales of US$419.9 million in the third quarter of 2009.
Year-to-date, the Company earned US$68.4 million, or US$1.81 per diluted
share, which includes an insurance settlement gain of 59 cents per diluted
share. This compares with net income of US$22.2 million, or 59 cents per
diluted share, for the same period of 2009. Net sales for the first nine
months of 2010 were US$1.53 billion compared with net sales of US$1.11
billion for the same period a year ago.
Financial and Operating Highlights
Regarding the third quarter of 2010, Mr. Karp said:
- "Our Plumbing & Refrigeration segment posted operating earnings of
US$11.5 million on net sales of US$282.7 million compared with
operating earnings of US$16.0 million on net sales of US$240.9 million
in the third quarter of 2009. The benefit of slightly higher shipments
was offset by lower margins.
- "Our OEM segment posted operating earnings of US$23.0 million during
the third quarter of 2010 on net sales of US$229.0 million, which
compared with operating earnings of US$16.5 million on net sales of
US$181.6 million for the same period in 2009. Operating income improved
in most product lines on better volumes.
- "The Comex average price of copper was US$3.30 per pound in the third
quarter of 2010, which compares with US$2.67 per pound in the third
quarter of 2009. Higher selling prices due to rising raw material
values accounted for approximately US$57 million of the increase in net
sales primarily in the Plumbing & Refrigeration segment. Approximately
US$20 million of the increase in net sales was attributable to
increased unit volume primarily in the OEM segment.
- "Mueller ended the quarter with US$400.1 million in cash, or US$10.57
per share.
- "Total stockholders' equity was US$777.0 million which equates to a
book value per share of US$20.54.
- "Mueller's current ratio remains excellent at 4.4 to 1 and our working
capital is US$699.0 million. Leverage is conservative with a ratio of
debt to total capitalization at 18.4 percent."
Business Outlook
Regarding the outlook, Mr. Karp said, "Housing starts continue to
stagnate at near the lowest levels of the past 50 years. However, we believe
starts are unlikely to decline further. Also, the drop in non-residential
construction appears to be bottoming out. We expect to see improving business
conditions in 2011, although the recovery in our industry will probably be
uneven. We are encouraged by Mueller's solid performance in 2010 and we are
well prepared for an upturn in the economy."
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 noted.)
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
---------------------
September 25, September 26,
2010 2009
---- ----
(Unaudited)
Net sales $507,240 $419,890
Cost of goods sold 437,597 354,039
Depreciation and
amortization 9,934 10,441
Selling, general,
and administrative
expense 28,810 27,593
Insurance
settlement 12 -
--- ---
Operating income 30,887 27,817
Interest expense (3,072) (2,435)
Other income
(expense), net 30 (324)
--- ----
Income before
income taxes 27,845 25,058
Income tax expense (9,098) (6,246)
------ ------
Consolidated net
income 18,747 18,812
Less net loss
(income)
attributable to
noncontrolling
interest 162 (146)
--- ----
Net income
attributable to
Mueller
Industries, Inc. $18,909 $18,666
======= =======
Weighted average
shares
for basic earnings
per share 37,710 37,474
Effect of dilutive
stock-based
awards 92 72
--- ---
Adjusted weighted
average shares
for diluted
earnings per share 37,802 37,546
------ ------
Basic earnings per
share $0.50 $0.50
===== =====
Diluted earnings
per share $0.50 $0.50
===== =====
Dividends per share $0.10 $0.10
===== =====
Summary Segment
Data:
---------------
Net sales:
Plumbing &
Refrigeration
Segment $282,735 $240,878
OEM Segment 228,981 181,621
Elimination of
intersegment sales (4,476) (2,609)
------ ------
Net sales $507,240 $419,890
======== ========
Operating income:
Plumbing &
Refrigeration
Segment $11,511 $15,986
OEM Segment 22,994 16,530
Unallocated
expenses (3,618) (4,699)
------ ------
Operating income $30,887 $27,817
======= =======
For the Nine Months Ended
-------------------------
September 25, September 26,
2010 2009
---- ----
(Unaudited)
Net sales $1,532,896 $1,114,248
Cost of goods sold 1,317,290 954,775
Depreciation and
amortization 30,372 31,276
Selling, general,
and administrative
expense 99,601 89,067
Insurance
settlement (21,284) -
------- ---
Operating income 106,917 39,130
Interest expense (8,568) (7,553)
Other income
(expense), net (2,348) 688
------ ---
Income before
income taxes 96,001 32,265
Income tax expense (26,418) (9,796)
------- ------
Consolidated net
income 69,583 22,469
Less net loss
(income)
attributable to
noncontrolling
interest (1,158) (267)
------ ----
Net income
attributable to
Mueller
Industries, Inc. $68,425 $22,202
======= =======
Weighted average
shares
for basic earnings
per share 37,657 37,253
Effect of dilutive
stock-based
awards 77 89
--- ---
Adjusted weighted
average shares
for diluted
earnings per share 37,734 37,342
------ ------
Basic earnings per
share $1.82 $0.60
===== =====
Diluted earnings
per share $1.81 $0.59
===== =====
Dividends per share $0.30 $0.30
===== =====
Summary Segment
Data:
---------------
Net sales:
Plumbing &
Refrigeration
Segment $825,114 $661,035
OEM Segment 718,965 459,898
Elimination of
intersegment sales (11,183) (6,685)
------- ------
Net sales $1,532,896 $1,114,248
========== ==========
Operating income:
Plumbing &
Refrigeration
Segment $71,710 $38,199
OEM Segment 56,057 18,315
Unallocated
expenses (20,850) (17,384)
------- -------
Operating income $106,917 $39,130
======== =======
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 25, December 26,
2010 2009
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $400,116 $346,001
Accounts receivable, net 278,891 228,739
Inventories 190,243 191,262
Other current assets 34,631 42,841
------ ------
Total current assets 903,881 808,843
Property, plant, and
equipment, net 235,079 250,395
Other assets 123,781 120,903
------- -------
$1,262,741 $1,180,141
========== ==========
LIABILITIES AND EQUITY
Current portion of debt $23,437 $24,325
Accounts payable 80,140 73,837
Other current liabilities 101,395 85,208
------- ------
Total current liabilities 204,972 183,370
Long-term debt, less current
portion 158,226 158,226
Pension and postretirement
liabilities 43,589 44,320
Environmental reserves 25,671 23,268
Deferred income taxes 25,283 31,128
Other noncurrent liabilities 891 887
--- ---
Total liabilities 458,632 441,199
------- -------
Total Mueller Industries, Inc.
stockholders' equity 777,025 713,167
Noncontrolling interest 27,084 25,775
------ ------
Total equity 804,109 738,942
------- -------
$1,262,741 $1,180,141
========== ==========
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Nine Months
Ended
-------------------
September 25, September 26,
2010 2009
---- ----
(Unaudited)
Operating activities:
Consolidated net income $69,583 $22,469
Reconciliation of consolidated net
income
to net cash provided by operating
activities:
Depreciation and amortization 30,550 31,440
Stock-based compensation expense 2,185 1,892
Insurance settlement (21,284) -
Insurance proceeds -noncapital
related 5,561 -
Loss on disposal of properties 252 975
Deferred income taxes (8,386) (2,012)
Income tax benefit from exercise
of stock options (89) (189)
Gain on early retirement of debt - (128)
Changes in assets and liabilities:
Receivables (50,810) (3,030)
Inventories 2,800 35,339
Other assets 6,158 4,152
Current liabilities 21,562 (6,229)
Other liabilities 2,839 (337)
Other, net (225) 17
---- ---
Net cash provided by operating
activities 60,696 84,359
------ ------
Investing activities:
Capital expenditures (14,210) (11,002)
Business acquired (2,021) -
Insurance proceeds for property
and equipment 17,703 -
Net withdrawals from restricted
cash balances 1,649 12,806
Proceeds from sales of properties 26 611
-- ---
Net cash provided by investing
activities 3,147 2,415
----- -----
Financing activities:
Dividends paid (11,300) (11,186)
Repayment of debt by joint
venture, net (1,097) (11,813)
Repayments of long-term debt - (370)
Dividends paid to noncontrolling
interest - (1,449)
Acquisition of treasury stock (85) (416)
Issuance of shares under incentive
stock option plans
from treasury 2,463 8,678
Income tax benefit from exercise
of stock options 89 189
-- ---
Net cash used in financing
activities (9,930) (16,367)
------ -------
Effect of exchange rate changes on
cash 202 4,607
--- -----
Increase in cash and cash
equivalents 54,115 75,014
Cash and cash equivalents at the
beginning of the period 346,001 278,860
------- -------
Cash and cash equivalents at the
end of the period $400,116 $353,874
======== ========
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 Nine Months Ended September 25, 2010
--------------------------------------------
Pro forma
Impact of Without
As Insurance Insurance
Reported Settlement Settlement
-------- ---------- ----------
(Unaudited)
Operating income $106,917 $(21,284) $85,633
Interest expense (8,568) - (8,568)
Other income, net (2,348) - (2,348)
------ --- ------
Income before income
taxes 96,001 (21,284) 74,717
Income tax expense
(Note A) (26,418) (1,090) (27,508)
------- ------ -------
Consolidated net
income 69,583 (22,374) 47,209
Less net income
attributable to
noncontrolling
interest (1,158) - (1,158)
------ --- ------
Net income
attributable to
Mueller Industries,
Inc. $68,425 $(22,374) $46,051
======= ======== =======
Diluted earnings per
share $1.81 $(0.59) $1.22
===== ====== =====
(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, +1-901-753-3208
Tags: Memphis, Mueller Industries Inc., October 19, Tennessee, United Kingdom
