Mueller Industries, Inc. Reports First Quarter 2010 Results
MEMPHIS, Tenn., April 20 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income was $34.0 million, or 90 cents per diluted share, for the first quarter of 2010. This compares with a net loss of $2.5 million, or 7 cents per diluted share, for the same period of 2009. First quarter net sales for 2010 were $485.3 million compared with $326.6 million in 2009.
During the first quarter of 2010, the Company recognized a gain of $22.5 million (or 62 cents per diluted share after tax) on the settlement of an insurance claim pertaining to the 2008 fire at its U.K. copper tube operation. Further, the realization of this gain resulted in a tax benefit primarily from the utilization of U.K. net operating losses that were previously reserved.
Financial and Operating Highlights
Regarding the first quarter of 2010, Mr. Karp said:
-- "Net sales increased to $485.3 million primarily due to higher selling
prices that reflect increased raw material costs. The Comex average
price of copper was $3.28 per pound in the first quarter of 2010, which
compares with $1.57 in the first quarter of 2009. Gross profit was $72.2
million in the first quarter which is the best of the last six
consecutive quarters.
-- "Our Plumbing & Refrigeration segment posted operating earnings of $40.5
million that includes a $22.5 million gain on the settlement of an
insurance claim as discussed above. Net sales for the first quarter of
2010 were $256.7 million. In the same period a year ago, segment
earnings were $10.3 million on net sales of $190.4 million. Volumes were
mixed; tube volumes were lower, while fittings volume improved slightly.
-- "Our OEM segment posted operating earnings of $16.1 million during the
first quarter of 2010 on net sales of $232.2 million, which compares
with an operating loss of $6.3 million on net sales of $138.4 million
for the same period in 2009. The increase in earnings was primarily due
to higher volume and better spreads as demand improved.
-- "Stockholders' equity was $740.8 million which equates to a book value
per share of $19.66 of which $10.54 per share was cash.
-- "Our current ratio remained solid at 4.0 to 1. We ended the quarter with
$397.2 million in cash and $657.3 million in working capital.
-- "As of quarter end, our financial leverage was modest with a debt to
total capitalization ratio of 19.5 percent."
Business Outlook for 2010
Regarding the outlook for 2010, Mr. Karp said, "Business conditions have shown signs of improvement as the economic recovery in the United States takes hold. Although the commercial construction sector remains sluggish, residential construction has improved somewhat from the trough. We expect that residential construction gains will be modest for the remainder of the year, while meaningful improvement in commercial construction is unlikely to occur before 2011."
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.
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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 OPERATIONS
(In thousands, except per share data)
For the Quarter Ended
March 27, March 28,
2010 2009
(Unaudited)
Net sales $ 485,268 $ 326,558
Cost of goods sold 413,048 287,383
Depreciation and amortization 10,348 10,480
Selling, general, and administrative expense 37,323 31,158
Insurance gain (22,506) -
Operating income (loss) 47,055 (2,463)
Interest expense (2,532) (2,636)
Other income, net 140 627
Income (loss) before income taxes 44,663 (4,472)
Income tax (expense) benefit (9,864) 1,962
Consolidated net income (loss) 34,799 (2,510)
Less net (income) loss attributable to noncontrolling
interest (841) 18
Net income (loss) attributable to Mueller Industries,
Inc. $ 33,958 $ (2,492)
Weighted average shares
for basic earnings (loss) per share 37,588 37,143
Effect of dilutive stock-based awards 94 -
Adjusted weighted average shares
for diluted earnings (loss) per share 37,682 37,143
Basic earnings (loss) per share $ 0.90 $ (0.07)
Diluted earnings (loss) per share $ 0.90 $ (0.07)
Dividends per share $ 0.10 $ 0.10
Summary Segment Data:
Net sales:
Plumbing & Refrigeration Segment $ 256,662 $ 190,393
OEM Segment 232,204 138,392
Elimination of intersegment sales (3,598) (2,227)
Net sales $ 485,268 $ 326,558
Operating income (loss):
Plumbing & Refrigeration Segment $ 40,459 $ 10,331
OEM Segment 16,131 (6,266)
Unallocated expenses (9,535) (6,528)
Operating income (loss) $ 47,055 $ (2,463)
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 27, December 26,
2010 2009
(Unaudited)
ASSETS
Cash and cash equivalents $ 397,180 $ 346,001
Accounts receivable, net 256,950 228,739
Inventories 185,828 191,262
Other current assets 33,478 42,841
Total current assets 873,436 808,843
Property, plant, and equipment, net 242,796 250,395
Other assets 121,902 120,903
$ 1,238,134 $ 1,180,141
LIABILITIES AND EQUITY
Current portion of debt $ 27,739 $ 24,325
Accounts payable 89,061 73,837
Other current liabilities 99,306 85,208
Total current liabilities 216,106 183,370
Long-term debt, less current portion 158,226 158,226
Pension and postretirement liabilities 42,843 44,320
Environmental reserves 23,862 23,268
Deferred income taxes 28,675 31,128
Other noncurrent liabilities 923 887
Total liabilities 470,635 441,199
Total Mueller Industries, Inc.
stockholders' equity 740,815 713,167
Noncontrolling interest 26,684 25,775
Total equity 767,499 738,942
$ 1,238,134 $ 1,180,141
____________________________________________________________________________ |||MUELLER INDUSTRIES, INC. || |||_________________________________________________________________________|| |CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS || |___________________________________________________________________________|| |(In thousands) || |___________________________________________________________________________|| ||| | || || |||___________________________________________________|_________||__________|| ||| |For the Quarter Ended|| |||___________________________________________________|_____________________|| ||| |March 27,||March 28, || |||___________________________________________________|_________||__________|| ||| |2010 ||2009 || |||___________________________________________________|_________||__________|| ||| |(Unaudited) || |||___________________________________________________|_____________________|| |Operating activities: | || || |_____________________________________________________|_________||__________|| |Net income (loss) attributable to Mueller Industries,| || || |Inc. |$ 33,958 ||$ (2,492) || |_____________________________________________________|_________||__________|| |Reconciliation of net income (loss) attributable to | || || |Mueller Industries, | || || |_____________________________________________________|_________||__________|| ||Inc. to net cash provided by operating activities: | || || ||____________________________________________________|_________||__________|| |||Depreciation and amortization |10,389 ||10,521 || |||___________________________________________________|_________||__________|| |||Stock-based compensation expense |704 ||607 || |||___________________________________________________|_________||__________|| |||Gain on disposal of properties |(6) ||(87) || |||___________________________________________________|_________||__________|| |||Insurance gain |(22,506) ||- || |||___________________________________________________|_________||__________|| |||Insurance proceeds - noncapital related |5,561 ||- || |||___________________________________________________|_________||__________|| |||Deferred income taxes |(3,623) ||(248) || |||___________________________________________________|_________||__________|| |||Income tax benefit from exercise of stock options |(11) ||- || |||___________________________________________________|_________||__________|| |||Net income (loss) attributable to noncontrolling | || || |||interest |841 ||(18) || |||___________________________________________________|_________||__________|| |||Changes in assets and liabilities: | || || |||___________________________________________________|_________||__________|| |||Receivables |(30,689) ||28,010 || |||___________________________________________________|_________||__________|| |||Inventories |3,748 ||38,657 || |||___________________________________________________|_________||__________|| |||Other assets |6,938 ||3,070 || |||___________________________________________________|_________||__________|| |||Current liabilities |30,899 ||(42,167) || |||___________________________________________________|_________||__________|| |||Other liabilities |155 ||(620) || |||___________________________________________________|_________||__________|| |||Other, net |280 ||(261) || |||___________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Net cash provided by operating activities |36,638 ||34,972 || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Investing activities: | || || |_____________________________________________________|_________||__________|| |Capital expenditures |(4,479) ||(4,842) || |_____________________________________________________|_________||__________|| |Insurance proceeds for property and equipment |17,703 ||- || |_____________________________________________________|_________||__________|| |Proceeds from sales of properties |8 ||402 || |_____________________________________________________|_________||__________|| |Net withdrawals from restricted cash balances |2,524 ||5,852 || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Net cash provided by investing activities |15,756 ||1,412 || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Financing activities: | || || |_____________________________________________________|_________||__________|| |Dividends paid |(3,759) ||(3,714) || |_____________________________________________________|_________||__________|| |Issuance of shares under incentive stock option plans| || || |_____________________________________________________|_________||__________|| ||from treasury |720 ||- || ||____________________________________________________|_________||__________|| |Income tax benefit from exercise of stock options |11 ||- || |_____________________________________________________|_________||__________|| |Issuance (repayment) of debt by joint venture, net |3,436 ||(10,152) || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Net cash provided by (used in) financing activities |408 ||(13,866) || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Effect of exchange rate changes on cash |(1,623) ||(1,042) || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Increase in cash and cash equivalents |51,179 ||21,476 || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Cash and cash equivalents at the beginning of the | || || |period |346,001 ||278,860 || |_____________________________________________________|_________||__________|| ||| | || || |||___________________________________________________|_________||__________|| |Cash and cash equivalents at the end of the period |$ 397,180||$ 300,336 || |_____________________________________________________|_________||__________||
_________________________________________________________________________ |MUELLER INDUSTRIES, INC. || |________________________________________________________________________|| |RECONCILIATION OF NET INCOME AS REPORTED || |________________________________________________________________________|| |TO NET INCOME BEFORE INSURANCE GAIN || |________________________________________________________________________|| |(In thousands, except per share data) || |________________________________________________________________________|| | | || || || |_______________________________|________||___________||_________________|| |Earnings without insurance gain is a measurement not derived in || |accordance with generally accepted accounting || |________________________________________________________________________|| |principles (GAAP). Excluding the insurance gain 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 gain resulted from final settlement || |________________________________________________________________________|| |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 gain || |________________________________________________________________________|| |to net income as reported is as follows: || |________________________________________________________________________|| | | || || || |_______________________________|________||___________||_________________|| | |For the Quarter Ended March 27, 2010 || |_______________________________|________________________________________|| | | || ||Pro forma || |_______________________________|________||___________||_________________|| | | ||Impact of ||Without || |_______________________________|________||___________||_________________|| | |As ||Insurance ||Insurance || |_______________________________|________||___________||_________________|| | |Reported||Gain ||Gain || |_______________________________|________||___________||_________________|| | | ||(Unaudited)|| || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |Operating income |$ 47,055||$ (22,506) ||$ 24,549 || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |Interest expense |(2,532) ||- ||(2,532) || |_______________________________|________||___________||_________________|| |Other income, net |140 ||- ||140 || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |Income before income taxes |44,663 ||(22,506) ||22,157 || |_______________________________|________||___________||_________________|| |Income tax expense (Note A) |(9,864) ||(819) ||(10,683) || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |Consolidated net income |34,799 ||(23,325) ||11,474 || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |Less net income attributable to| || || || | | || || || |noncontrolling interest |(841) ||- ||(841) || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |Net income attributable to | || || || | | || || || |Mueller Industries, Inc. |$ 33,958||$ (23,325) ||$ 10,633 || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |Diluted earnings per share |$ 0.90 ||$ (0.62) ||$ 0.28 || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| | | || || || |_______________________________|________||___________||_________________|| |(A) Realization of this insurance gain resulted in a tax benefit || |primarily from the utilization of U.K. net operating losses || |________________________________________________________________________|| |that were previously reserved. || |________________________________________________________________________||
SOURCE Mueller Industries, Inc.
Released April 20, 2010