Mueller Industries, Inc. Reports Third Quarter Results
MEMPHIS, Tenn., Oct. 20 /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 third quarter of 2009. For the three months ended September 26, 2009, net income was $18.7 million, or 50 cents per diluted share, on net sales of $419.9 million. For the third quarter of 2008, the Company posted net income of $18.7 million, or 50 cents per diluted share, on net sales of $665.5 million.
Year-to-date, the Company earned $22.2 million, or 59 cents per diluted share, compared with net income of $73.0 million, or $1.96 per diluted share, for the same period of 2008. Net sales for the first nine months of 2009 were $1.11 billion which compares with net sales of $2.12 billion for the same period a year ago.
Net sales of the Company's core product lines including copper tube, fittings, brass rod and forgings were substantially affected by the lower market values of copper and brass, the Company's principal raw materials, which are largely passed through to customers. In the third quarter of 2009, the Comex average price of copper was 23 percent lower than in the third quarter of 2008. In addition, unit volumes of most of the Company's core product lines were well below year ago levels.
Mr. Karp said, "Our cost control initiatives have helped to mitigate the impact of weak demand in the residential and commercial construction sectors. We expect challenging market conditions will continue into next year."
Financial and Operating Highlights
Regarding the third quarter of 2009, Mr. Karp said:
-- "We continue to generate cash by intensively managing working capital
and monitoring capital expenditures. Mueller ended the quarter with
$353.9 million in cash, or $9.40 per share. Our financial position
remains strong.
-- "Total stockholders' equity was $737.8 million which equates to a book
value per share of $19.60.
-- "Mueller's current ratio remains excellent at 4.4 to 1 and our working
capital is $608.8 million. Leverage is conservative with a ratio of
debt to total capitalization at 18.8 percent.
-- "The Comex average price of copper was $2.67 per pound in the third
quarter of 2009, which compares with $3.45 per pound in the third
quarter of 2008.
-- "Our Plumbing & Refrigeration segment posted operating earnings of $16.0
million on net sales of $240.9 million compared with operating earnings
of $25.4 million on net sales of $371.3 million in the third quarter of
2008. Due to lower throughput volumes, we experienced higher per unit
conversion costs.
-- "Our OEM segment posted operating earnings of $16.5 million during the
third quarter of 2009 on net sales of $181.6 million, which compared
with operating earnings of $10.6 million on net sales of $299.5 million
for the same period in 2008."
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 INCOME
(In thousands, except per share data)
For the Quarter Ended For the Nine Months Ended
--------------------- -------------------------
September 26, September 27, September 26, September 27,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Net sales $419,890 $665,496 $1,114,248 $2,123,075
Cost of goods sold 354,039 588,469 954,775 1,861,475
Depreciation and
amortization 10,441 11,529 31,276 33,517
Selling, general,
and administrative
expense 27,593 35,674 89,067 108,583
------ ------ ------ -------
Operating income 27,817 29,824 39,130 119,500
Interest expense (2,435) (5,050) (7,553) (15,755)
Other (expense)
income, net (324) 2,573 688 9,103
---- ----- --- -----
Income before income
taxes 25,058 27,347 32,265 112,848
Income tax expense (6,246) (8,422) (9,796) (37,992)
------ ------ ------ -------
Consolidated net
income 18,812 18,925 22,469 74,856
Less: net income
attributable to
noncontrolling
interest (146) (254) (267) (1,816)
---- ---- ---- ------
Net income
attributable to
Mueller Industries,
Inc. $18,666 $18,671 $22,202 $73,040
======= ======= ======= =======
Weighted average shares
for basic earnings
per share 37,474 37,136 37,253 37,117
Effect of dilutive
stock options 72 176 89 238
-- --- -- ---
Adjusted weighted
average shares
for diluted
earnings per
share 37,546 37,312 37,342 37,355
------ ------ ------ ------
Basic earnings
per share $0.50 $0.50 $0.60 $1.97
===== ===== ===== =====
Diluted earnings
per share $0.50 $0.50 $0.59 $1.96
===== ===== ===== =====
Dividends per share $0.10 $0.10 $0.30 $0.30
===== ===== ===== =====
Summary Segment Data:
---------------------
Net sales:
Plumbing &
Refrigeration
Segment $240,878 $371,315 $661,035 $1,159,613
OEM Segment 181,621 299,470 459,898 979,665
Elimination of
intersegment
sales (2,609) (5,289) (6,685) (16,203)
------ ------ ------ -------
Net sales $419,890 $665,496 $1,114,248 $2,123,075
======== ======== ========== ==========
Operating income:
Plumbing &
Refrigeration
Segment $15,986 $25,449 $38,199 $85,903
OEM Segment 16,530 10,643 18,315 55,180
Unallocated
expenses (4,699) (6,268) (17,384) (21,583)
------ ------ ------- -------
Operating income $27,817 $29,824 $39,130 $119,500
======= ======= ======= ========
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 26, December 27,
2009 2008
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $353,874 $278,860
Accounts receivable, net 225,316 219,035
Inventories 178,372 210,609
Other current assets 30,327 46,322
------ ------
Total current assets 787,889 754,826
Property, plant, and equipment, net 258,278 276,927
Other assets 151,429 151,160
------- -------
$1,197,596 $1,182,913
========== ==========
LIABILITIES AND EQUITY
Current portion of debt $12,372 $24,184
Accounts payable 70,380 63,732
Other current liabilities 96,346 113,668
------ -------
Total current liabilities 179,098 201,584
Long-term debt, less
current portion 158,226 158,726
Pension and postretirement
liabilities 39,180 38,452
Environmental reserves 23,090 23,248
Deferred income taxes 33,435 33,940
Other noncurrent liabilities 1,401 1,698
----- -----
Total liabilities 434,430 457,648
------- -------
Total Mueller Industries, Inc.
stockholders' equity 737,799 700,683
Noncontrolling interest 25,367 24,582
------ ------
Total equity 763,166 725,265
------- -------
$1,197,596 $1,182,913
========== ==========
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Nine Months Ended
----------------------------
September 26, September 27,
2009 2008
---- ----
(Unaudited)
Operating activities:
Net income attributable to
Mueller Industries, Inc. $22,202 $73,040
Reconciliation of net income attributable
to Mueller Industries, Inc. to net cash
provided by operating activities:
Depreciation and amortization 31,440 33,984
Gain on early
retirement of debt (128) (2,482)
Net income attributable to
noncontrolling interest 267 1,816
Stock-based
compensation expense 1,892 2,238
Loss on disposal of properties 975 306
Deferred income taxes (2,012) (515)
Income tax benefit from exercise
of stock options (189) (92)
Changes in assets and
liabilities:
Receivables (3,030) (29,130)
Inventories 35,339 6,635
Other assets 4,152 (5,350)
Current liabilities (6,229) (16,027)
Other liabilities (337) 784
Other, net 17 (719)
-- ----
Net cash provided by operating
activities 84,359 64,488
------ ------
Investing activities:
Capital expenditures (11,002) (17,871)
Net withdrawals from
restricted cash balances 12,806 678
Proceeds from sales of properties 611 77
--- --
Net cash provided by (used in)
investing activities 2,415 (17,116)
----- -------
Financing activities:
Repayments of long-term debt (370) (23,650)
Dividends paid to stockholders of
Mueller Industries, Inc. (11,186) (11,133)
Dividends paid to
noncontrolling interests (1,449) -
Repayment of debt by joint venture,
net (11,813) (12,491)
Issuance of shares under incentive
stock option plans from treasury 8,678 1,074
Income tax benefit from exercise
of stock options 189 92
Acquisition of treasury stock (416) (31)
---- ---
Net cash used in financing activities (16,367) (46,139)
------- -------
Effect of exchange rate changes on
cash 4,607 (1,500)
----- ------
Increase (decrease) in cash and
cash equivalents 75,014 (267)
Cash and cash equivalents at the
beginning of the period 278,860 308,618
------- -------
Cash and cash equivalents at the
end of the period $353,874 $308,351
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SOURCE Mueller Industries, Inc.
Released October 20, 2009