Mueller Industries, Inc. Reports First Quarter 2014 Results

MEMPHIS, Tenn., April 22, 2014 -- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the first quarter of 2014 was $24.7 million, or 44 cents per diluted share, compared with net income of $26.2 million, or 46 cents per diluted share, for the same period of 2013.  Diluted earnings per share for 2013 have been adjusted to reflect a 2-for-1 stock split that was effected during the first quarter of 2014.

Net sales for the first quarter of 2014 were $574.4 million compared with $559.7 million for the same quarter of the prior year.  The increase in net sales was principally due to an overall increase in unit volumes of 8.6 percent, of which 6.4 percent was contributed by acquired businesses, partially offset by lower copper costs that impacted the selling prices of the Company’s products.  Copper prices decreased 10 percent from the prior year averaging $3.24 per pound in the first quarter of 2014 compared with $3.60 per pound in the first quarter of 2013. 

In addition, on February 28, 2014 the Company completed the previously announced acquisition of Yorkshire Copper Tube for approximately $30.1 million.

Regarding the outlook for 2014, Greg Christopher, CEO, said, “Construction activity got off to a slow start in 2014, principally due to this year’s harsh winter weather.  We anticipate better business conditions as spring arrives.”

He also added, “The acquisitions of Yorkshire Copper Tube and Howell Metal Company contributed favorably to the growth in unit volume, but as is typical with acquisitions of this nature, they follow a pattern where substantial changes occur that are costly.  We are happy with our progress and we expect both businesses to be accretive to our earnings by year end.”

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: (i) the construction of new homes; (ii) the improvement and reconditioning of existing homes and structures; and (iii) 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 “pro forma,” “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.

CONTACT: Jeffrey A. Martin, (901) 753-3226

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

For the Quarter Ended

 

(In thousands, except per share data)

 

March 29, 2014

 

 

March 30, 2013

 

 

 

 

 

 

 

 

Net sales

 

$

574,374

 

 

$

559,690

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

495,777

 

 

 

482,850

 

Depreciation and amortization

 

 

8,107

 

 

 

8,154

 

Selling, general, and administrative expense

 

 

32,183

 

 

 

31,343

 

 

 

 

 

 

 

 

 

 

     Operating income

 

 

38,307

 

 

 

37,343

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,026

)

 

 

(596

)

Other income, net

 

 

88

 

 

 

3,163

 

 

 

 

 

 

 

 

 

 

     Income before income taxes

 

 

37,369

 

 

 

39,910

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(12,415

)

 

 

(13,476

)

 

 

 

 

 

 

 

 

 

     Consolidated net income

 

 

24,954

 

 

 

26,434

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

 

 

(248

)

 

 

(232

)

 

 

 

 

 

 

 

 

 

     Net income attributable to Mueller Industries, Inc.

 

$

24,706

 

 

$

26,202

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per share

 

 

55,918

 

 

 

55,645

 

Effect of dilutive stock-based awards

 

 

853

 

 

 

747

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares for diluted earnings per share

 

 

56,771

 

 

 

56,392

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.44

 

 

$

0.47

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.44

 

 

$

0.46

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.075

 

 

$

0.0625

 

 

 

 

 

 

 

 

 

 

Summary Segment Data:

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

   Plumbing & Refrigeration Segment

 

$

338,027

 

 

$

311,814

 

   OEM Segment

 

 

240,030

 

 

 

253,787

 

   Elimination of intersegment sales

 

 

(3,683

)

 

 

(5,911

)

 

 

 

 

 

 

 

 

 

Net sales

 

$

574,374

 

 

$

559,690

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

   Plumbing & Refrigeration Segment

 

$

23,885

 

 

$

22,625

 

   OEM Segment

 

 

21,286

 

 

 

20,323

 

   Unallocated expenses

 

 

(6,864

)

 

 

(5,605

)

 

 

 

 

 

 

 

 

 

Operating income

 

$

38,307

 

 

$

37,343

 

 

 

 

 

 

 

 

 

 

 

 


 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

(In thousands)

 

March 29, 2014

 

 

December 28, 2013

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

233,475

 

 

$

311,800

 

Accounts receivable, net

 

 

319,902

 

 

 

271,847

 

Inventories

 

 

279,465

 

 

 

251,716

 

Other current assets

 

 

52,371

 

 

 

39,354

 

 

 

 

 

 

 

 

 

 

     Total current assets

 

 

885,213

 

 

 

874,717

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

243,905

 

 

 

244,457

 

Other assets

 

 

153,711

 

 

 

128,593

 

 

 

 

 

 

 

 

 

 

 

 

$

1,282,829

 

 

$

1,247,767

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current portion of debt

 

$

32,085

 

 

$

29,083

 

Accounts payable

 

 

109,452

 

 

 

80,897

 

Other current liabilities

 

 

93,894

 

 

 

109,276

 

 

 

 

 

 

 

 

 

 

     Total current liabilities

 

 

235,431

 

 

 

219,256

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

206,000

 

 

 

206,250

 

Pension and postretirement liabilities

 

 

26,554

 

 

 

27,426

 

Environmental reserves

 

 

22,005

 

 

 

22,144

 

Deferred income taxes

 

 

34,039

 

 

 

35,975

 

Other noncurrent liabilities

 

 

618

 

 

 

849

 

 

 

 

 

 

 

 

 

 

     Total liabilities

 

 

524,647

 

 

 

511,900

 

 

 

 

 

 

 

 

 

 

Total Mueller Industries, Inc. stockholders’ equity

 

 

725,469

 

 

 

703,405

 

Noncontrolling interest

 

 

32,713

 

 

 

32,462

 

 

 

 

 

 

 

 

 

 

     Total equity

 

 

758,182

 

 

 

735,867

 

 

 

 

 

 

 

 

 

 

 

 

$

1,282,829

 

 

$

1,247,767

 

 

 

 

 

 

 

 

 

 

 

 

 


 

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Quarter Ended

 

 (In thousands)

 

March 29, 2014

 

 

March 30, 2013

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Consolidated net income

 

$

24,954

 

 

$

26,434

 

Reconciliation of consolidated net income to net cash used in operating activities:

 

 

 

 

 

 

 

 

     Depreciation and amortization

 

 

8,165

 

 

 

8,250

 

     Stock-based compensation expense

 

 

1,194

 

 

 

946

 

     Gain on disposal of properties

 

 

(1,413

)

 

 

(3,003

)

     Deferred income taxes

 

 

(1,484

)

 

 

(1,313

)

     Income tax benefit from exercise of stock options

 

 

(156

)

 

 

(30

)

     Changes in assets and liabilities, net of business acquired:

 

 

 

 

 

 

 

 

          Receivables

 

 

(49,482

)

 

 

(42,680

)

          Inventories

 

 

(10,055

)

 

 

212

 

          Other assets

 

 

(14,467

)

 

 

2,585

 

          Current liabilities

 

 

(1,337

)

 

 

(5,365

)

          Other liabilities

 

 

(989

)

 

 

(753

)

          Other, net

 

 

398

 

 

 

(198

)

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

(44,672

)

 

 

(14,915

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Business acquired

 

 

(30,137

)

 

 

 

Capital expenditures

 

 

(9,199

)

 

 

(9,835

)

Net withdrawals from (deposits into) restricted cash balances

 

 

1,771

 

 

 

(14,800

)

Proceeds from the sales of properties

 

 

4,833

 

 

 

3,002

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(32,732

)

 

 

(21,633

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Dividends paid to stockholders of Mueller Industries, Inc.

 

 

(4,196

)

 

 

(3,479

)

Debt issuance cost

 

 

 

 

 

(50

)

(Repayment) issuance of debt by joint venture, net

 

 

(1,407

)

 

 

26,060

 

Repayment of long-term debt

 

 

(250

)

 

 

(250

)

Issuance of debt

 

 

4,373

 

 

 

 

Net cash received to settle stock-based awards

 

 

224

 

 

 

65

 

Income tax benefit from exercise of stock options

 

 

156

 

 

 

30

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

 

(1,100

)

 

 

22,376

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

179

 

 

 

(896

)

 

 

 

 

 

 

 

 

 

Decrease in cash and cash equivalents

 

 

(78,325

)

 

 

(15,068

)

Cash and cash equivalents at the beginning of the period

 

 

311,800

 

 

 

198,934

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

$

233,475

 

 

$

183,866