Mueller Industries, Inc. Reports First Quarter 2007 Earnings

MEMPHIS, Tenn., April 24 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income in the first quarter of 2007 was $18.9 million, or 51 cents per diluted share, which compares with $33.4 million, or 90 cents per diluted share, for the same period of 2006. First quarter net sales for 2007 were $609.8 million compared with $551.0 million in 2006. The increase in net sales was primarily attributable to acquired businesses. The change in net sales was also affected by the increased cost of copper, the Company's principal raw material, which was largely passed through to customers, offset by lower unit volume.

   Financial and Operating Highlights
   Regarding the first quarter of 2007, Mr. Karp said:

    -- "Our Plumbing & Refrigeration segment posted operating earnings of
       $26.9 million on net sales of $370.0 million which compares with prior
       year earnings of $44.2 million on net sales of $386.9 million.
       Operating margins were affected by higher unit costs on lower
       production volume.  Net sales for the Trading Group trended up but
       operating income was off slightly.  European results overall were
       profitable on the strength of our trading businesses which continue to
       perform well.

    -- "Our OEM segment posted operating earnings of $5.5 million during the
       first quarter of 2007 on net sales of $243.7 million, which compares
       with operating earnings of $11.0 million on net sales of $168.0 million
       for the same period in 2006.  Our Chinese joint venture reported total
       operating income of $1.7 million.

    -- "We completed the acquisition of Extruded Metals, a brass rod mill, at
       the end of February; their results are included in the OEM segment.  We
       are presently rationalizing production with particular emphasis on
       casting operations.  Operations have already been accretive to
       earnings; however, there are opportunities for additional improvement
       as we integrate the brass mill operations.

    -- "Other income includes a gain of $3.1 million related to the sale of
       mineral royalty interests.

    -- "During the first quarter of 2007, capital expenditures totaled $8.7
       million.  We expect to invest between $30 and $40 million for capital
       expenditures during 2007.

    -- "Cash provided by operating activities was $47.1 million in the first
       quarter of 2007.

    -- "The COMEX average price of copper was $2.70 per pound in the first
       quarter of 2007, which compares with $2.25 in the first quarter of

    -- "Our current ratio remains solid at 2.8 to 1.  We ended the quarter
       with $194.5 million in cash and $521.6 million in working capital."

Business Outlook for 2007

Regarding the outlook for 2007, Mr. Karp said, "The housing construction market is undergoing a much anticipated correction which has dampened demand for certain of our products. However, we believe this market will improve later this year or early next year. On the other hand, the commercial construction market remains 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.
                    (In thousands, except per share data)

                                                    For the Quarter Ended
                                                 March 31,          April 1,
                                                    2007              2006

    Net sales                                     $609,782          $551,039
    Cost of goods sold                             536,578           457,069

    Gross profit                                    73,204            93,970

    Depreciation and amortization                   10,966            10,195
    Selling, general, and administrative
     expense                                        34,927            34,959

    Operating income                                27,311            48,816

    Interest expense                                (5,494)           (4,862)
    Other income, net                                4,953             2,013

    Income before income taxes                      26,770            45,967

    Income tax expense                              (7,857)          (12,602)

    Net income                                     $18,913           $33,365

    Weighted average shares
     for basic earnings per share                   37,027            36,691
    Effect of dilutive stock options                   117               390

    Adjusted weighted average shares
     for diluted earnings per share                 37,144            37,081

    Basic earnings per share                         $0.51             $0.91

    Diluted earnings per share                       $0.51             $0.90

    Dividends per share                              $0.10             $0.10

    Summary Segment Data:
    Net sales:
     Plumbing & Refrigeration Segment             $369,996          $386,941
     OEM Segment                                   243,730           167,972
     Elimination of intersegment sales              (3,944)           (3,874)

    Net sales                                     $609,782          $551,039

    Operating income:
     Plumbing & Refrigeration Segment              $26,854           $44,193
     OEM Segment                                     5,494            10,953
     Unallocated expenses                           (5,037)           (6,330)

    Operating income                               $27,311           $48,816

                           MUELLER INDUSTRIES, INC.
                                (In thousands)

                                                 March 31,        December 30,
                                                   2007               2006
        Cash and cash equivalents                 $194,489           $200,471
        Accounts receivable, net                   370,957            281,679
        Inventories                                218,980            258,647
        Other current assets                        32,981             35,397
            Total current assets                   817,407            776,194

        Property, plant, and equipment, net        328,742            315,064
        Other assets                               187,438            177,649

                                                $1,333,587         $1,268,907

        Current portion of long-term debt          $34,555            $35,998
        Accounts payable                           136,888             96,095
        Other current liabilities                  124,386            123,426
            Total current liabilities              295,829            255,519

        Long-term debt                             308,130            308,154
        Pension and postretirement liabilities      47,447             36,599
        Environmental reserves                       9,197              8,907
        Deferred income taxes                       43,716             46,408
        Other noncurrent liabilities                 2,007              2,206

            Total liabilities                      706,326            657,793

        Minority interest in
         subsidiaries                               22,994             22,300

        Stockholders' equity                       604,267            588,814

                                                $1,333,587         $1,268,907

                           MUELLER INDUSTRIES, INC.
                                (In thousands)

                                                     For the Quarter Ended
                                                  March 31,          April 1,
                                                    2007               2006
    Operating activities:
    Net income                                     $18,913           $33,365
    Reconciliation of net income to net
     cash provided by (used in) operating
        Depreciation and amortization               11,012            10,240
        Stock-based compensation expense               628               607
        Equity in earnings of
         unconsolidated subsidiary                       -              (964)
        Gain on disposals of properties             (3,132)             (121)
        Deferred income taxes                       (1,156)           (3,891)
        Income tax benefit
         from exercise of stock options                (66)             (228)
        Minority interest in subsidiaries              402               393
        Changes in assets and liabilities,
        net of businesses acquired:
         Receivables                               (59,857)          (55,022)
         Inventories                                66,512           (14,813)
         Other assets                                 (314)           (4,676)
         Current liabilities                        13,445           (14,579)
         Other liabilities                              23              (175)
         Other, net                                    719               104

    Net cash provided by (used in)
     operating activities                           47,129           (49,760)

    Investing activities:
    Capital expenditures                            (8,725)          (12,015)
    Acquisition of business, net of cash
     received                                      (31,970)            3,632
    Proceeds from sales of properties                3,032               253

    Net cash used in investing activities          (37,663)           (8,130)

    Financing activities:
    Dividends paid                                  (3,703)           (3,684)
    Acquisition of treasury stock                        -              (388)
    Issuance of shares under incentive
     stock option plans from treasury                  155             4,200
    Proceeds from issuance of long-term debt         5,434            11,164
    Repayments of long-term debt                   (17,429)             (162)
    Income tax benefit from exercise
     of stock options                                   66               228

    Net cash (used in) provided by
     financing activities                          (15,477)           11,358

    Effect of exchange rate changes on
     cash                                               29                69

    Decrease in cash and cash equivalents           (5,982)          (46,463)

    Cash and cash equivalents at the
     beginning of the period                       200,471           129,685

    Cash and cash equivalents at the end
     of the period                                $194,489           $83,222

SOURCE Mueller Industries, Inc.