Mueller Industries, Inc. Reports Second Quarter 2010 Earnings

MEMPHIS, Tenn., July 20 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income in the second quarter of 2010 was $15.6 million, or 41 cents per diluted share.  This compares with net income of $6.0 million, or 16 cents per diluted share, for the same period of 2009.  Net sales for the second quarter of 2010 were $540.4 million compared with $367.8 million in 2009.  For the first half of 2010, net income was $49.5 million, or $1.31 per diluted share, on net sales of $1.03 billion.  This compares with net income of $3.5 million, or 9 cents per diluted share, on net sales of $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 $19.7
        million on net sales of $285.7 million which compares with prior year
        earnings of $11.9 million on net sales of $229.8 million. Improved
        results were due to better spreads partially offset by lower unit
        shipments.
    --  "Our OEM segment posted operating earnings of $16.9 million during the
        second quarter of 2010 on net sales of $257.8 million, which compares
        with operating earnings of $8.1 million on net sales of $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
        $397.2 million in cash equal to $10.53 per share.
    --  "Total stockholders' equity was $755.4 million which equates to a book
        value of $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 $3.19 per pound in the second
        quarter of 2010, which compares with $2.15 in the second quarter of
        2009. Higher selling prices due to rising material values accounted for
        approximately $111 million of the increase in net sales primarily in the
        Plumbing & Refrigeration segment. Approximately $50 million of the
        increase in net sales was attributable to increased unit volume
        primarily in the OEM segment.
    --  "We recognized a charge of $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.




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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 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.





SOURCE Mueller Industries, Inc.