Mueller Industries, Inc. Reports Second Quarter Results

    MEMPHIS, Tenn., July 24 /PRNewswire-FirstCall/ --

    Quarterly and Year-to-Date Earnings

Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), today announced the Company's results for the second quarter of 2007. Net income for the second quarter was $36.4 million, or 98 cents per diluted share, constituting the third highest quarter in the Company's history. This compares with $58.8 million, or $1.57 per diluted share, for the extraordinary second quarter of fiscal 2006, which was the Company's best quarter ever. Net sales for the three months ended June 30, 2007 were $772.6 million, compared with net sales of $779.7 million for the second quarter of 2006.

Year-to-date, the Company earned $55.3 million, or $1.49 per diluted share, on net sales of $1.38 billion. This compares with net income of $92.1 million, or $2.48 per diluted share, on net sales of $1.33 billion for the first half of 2006.

Earnings and sales for the second quarter were affected by the decline in the residential construction sector, which saw housing starts down approximately 25 percent compared with last year.

However, the commercial construction market continues to strengthen and has increased by approximately 18 percent over last year. The Company's profit margins in the commercial construction sector have historically been better than in the other markets the Company serves.

    Financial and Operating Highlights

    Regarding the second quarter of 2007, Mr. Karp said:
    --  "Mueller ended the quarter with almost $250 million in cash; our
        current ratio remains excellent at 2.48 to 1 and our working capital
        is $557.3 million.
    --  "The COMEX average price of copper was $3.46 per pound in the second
        quarter of 2007, which compares with $3.37 per pound in the second
        quarter of 2006.
    --  "Our Plumbing & Refrigeration segment posted operating earnings of
        $51.7 million on net sales of $455.5 million which compares with
        operating earnings of $78.3 million on net sales of $551.2 million in
        the second quarter of 2006.  Our European businesses were profitable
        on the strength of our trading activities.
    --  "Our OEM segment posted operating earnings of $18.0 million during the
        second quarter of 2007 on net sales of $322.2 million, which compared
        with operating earnings of $21.5 million on net sales of $242.1
        million for the same period in 2006.
    --  "Selling, general, and administrative expense was $39.0 million in the
        second quarter of 2007 which is comparable to the same period of 2006.
    --  "Capital expenditures during the first half of 2007 totaled $15.6
        million.  We expect to invest between $30 and $40 million for capital
        expenditures during 2007."

    Business Outlook for 2007

Regarding the outlook for 2007, Mr. Karp said, "The residential construction sector remains weak, although the rate of decline has subsided. We believe the housing market is near the bottom, and will begin to improve in the first half of 2008. Positive factors include low mortgage rates, high employment, an expanding economy, and population growth. Also, we expect the commercial construction market to remain strong."

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.



                           MUELLER INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share data)


                               For the Quarter Ended  For the Six Months Ended
                                  June 30,   July 1,    June 30,     July 1,
                                    2007      2006        2007        2006
                                     (Unaudited)           (Unaudited)

    Net sales                     $772,647  $779,663  $1,382,429  $1,330,702
    Cost of goods sold             661,746   637,038   1,198,324   1,094,107

    Gross profit                   110,901   142,625     184,105     236,595

    Depreciation and amortization   11,306    10,376      22,272      20,571
    Selling, general, and
     administrative expense         38,971    39,689      73,898      74,648

    Operating income                60,624    92,560      87,935     141,376
    Interest expense                (5,689)   (5,214)    (11,183)    (10,076)
    Other income (expense), net      1,925       (67)      6,878       1,946

    Income before income taxes      56,860    87,279      83,630     133,246
    Income tax expense             (20,462)  (28,529)    (28,319)    (41,131)

    Net income                     $36,398   $58,750     $55,311     $92,115


    Weighted average shares
     for basic earnings per
     share                          37,060    36,891      37,044      36,791
    Effect of dilutive stock
     options                           204       421         160         405

    Adjusted weighted average
     shares for diluted earnings
     per share                      37,264    37,312      37,204      37,196


    Basic earnings per share         $0.98     $1.59       $1.49       $2.50


    Diluted earnings per share       $0.98     $1.57       $1.49       $2.48

    Summary Segment Data:
    Net sales:
    Plumbing & Refrigeration
     Segment                      $455,486  $551,158    $825,482    $938,099
    OEM Segment                    322,201   242,128     565,931     410,100
    Elimination of intersegment
     sales                          (5,040)  (13,623)     (8,984)    (17,497)

    Net sales                     $772,647  $779,663  $1,382,429  $1,330,702

    Operating income:
    Plumbing & Refrigeration
     Segment                       $51,746   $78,328     $78,600    $122,521
    OEM Segment                     17,999    21,511      23,493      32,464
    Unallocated expenses            (9,121)   (7,279)    (14,158)    (13,609)

    Operating income               $60,624   $92,560     $87,935    $141,376



                           MUELLER INDUSTRIES, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)


                                                 June 30,         December 30,
                                                    2007               2006
                                                          (Unaudited)
        ASSETS
        Cash and cash equivalents                 $247,916           $200,471
        Accounts receivable, net                   392,326            281,679
        Inventories                                251,544            258,647
        Other current assets                        41,497             35,397
            Total current assets                   933,283            776,194

        Property, plant, and equipment,
         net                                       325,822            315,064
        Other assets                               194,199            177,649

                                                $1,453,304         $1,268,907



        LIABILITIES AND STOCKHOLDERS' EQUITY
        Current portion of long-term
         debt                                      $48,037            $35,998
        Accounts payable                           181,136             96,095
        Other current liabilities                  146,804            123,426
            Total current liabilities              375,977            255,519

        Long-term debt                             308,084            308,154
        Pension and postretirement
         liabilities                                48,919             36,599
        Environmental reserves                       9,186              8,907
        Deferred income taxes                       42,398             46,408
        Other noncurrent liabilities                 2,015              2,206

            Total liabilities                      786,579            657,793

        Minority interest in
         subsidiaries                               22,783             22,300

        Stockholders' equity                       643,942            588,814

                                                $1,453,304         $1,268,907



                           MUELLER INDUSTRIES, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)

                                                   For the Six Months Ended
                                                   June 30,          July 1,
                                                     2007              2006
                                                          (Unaudited)
    Operating activities:
    Net income                                     $55,311           $92,115
    Reconciliation of net income to net
     cash provided by (used in) operating
     activities:
        Depreciation and amortization               22,465            20,719
        Deferred income taxes                       (6,140)           (4,946)
        (Gain) loss on disposal of
         properties                                 (3,137)            1,905
        Stock-based compensation expense             1,273             1,308
        Income tax benefit from exercise
         of stock options                             (124)           (1,042)
        Minority interest in
         subsidiaries, net of dividend
         paid                                          (18)            1,805
        Gain on sale of equity investment                -            (1,876)
        Equity in earnings of
         unconsolidated subsidiary                       -              (964)
        Gain on early retirement of debt                 -               (97)
        Changes in assets and
         liabilities, net of businesses
         acquired:
          Receivables                              (78,521)         (161,990)
          Inventories                               35,467           (51,127)
          Other assets                             (10,948)           (4,642)
          Current liabilities                       78,376            93,142
          Other liabilities                            773             4,439
          Other, net                                 2,144            (3,657)

    Net cash provided by (used in)
     operating activities                           96,921           (14,908)

    Investing activities:
    Capital expenditures                           (15,638)          (20,918)
    Acquisition of businesses, net of
     cash received                                 (31,970)            3,632
    Proceeds from sales of properties and
     equity investment                               3,032            23,218

    Net cash (used in) provided by
     investing activities                          (44,576)            5,932

    Financing activities:
    Proceeds from issuance of long-term
     debt                                           19,054            22,425
    Repayments of long-term debt                   (18,116)           (3,413)
    Dividends paid                                  (7,410)           (7,373)
    Issuance of shares under incentive
     stock option plans from treasury                  977             5,823
    Income tax benefit from exercise of
     stock options                                     124             1,042
    Acquisition of treasury stock                      (54)             (396)

    Net cash (used in) provided by
     financing activities                           (5,425)           18,108

    Effect of exchange rate changes on
     cash                                              525                70

    Increase in cash and cash equivalents           47,445             9,202
    Cash and cash equivalents at the
     beginning of the period                       200,471           129,685

    Cash and cash equivalents at the end
     of the period                                $247,916          $138,887

SOURCE Mueller Industries, Inc.