Mueller Industries, Inc. Reports Second Quarter 2008 Earnings
MEMPHIS, Tenn., July 22 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income in the second quarter of 2008 was $27.0 million, or 72 cents per diluted share. This compares with $36.4 million, or 98 cents per diluted share, for the same period of 2007. Net sales for the second quarter of 2008 were $753.5 million compared with $772.6 million in 2007. For the first half, net income was $54.4 million, or $1.45 per diluted share on net sales of $1.46 billion. This compares with net income of $55.3 million, or $1.49 per diluted share, on net sales of $1.38 billion for the first half of 2007.
Mr. Karp said, "Mueller's earnings for the first half of 2008 were achieved despite the continuing decline in the housing industry, the sub-prime mortgage melt down, the turbulence in the financial markets, rising metal costs, sky-high energy prices and a slowing national economy. Considering these adverse circumstances, we are pleased with our results.
"Obviously, we cannot predict how long these difficult circumstances will persist. However, we are confident that Mueller's excellent balance sheet, strong cash flows and experienced management team will allow us to maximize our competitiveness and take advantage of opportunities."
Financial and Operating Highlights
Regarding the second quarter of 2008, Mr. Karp said:
-- "Our Plumbing & Refrigeration segment posted operating earnings of $35.4 million on net sales of $404.4 million which compares with prior year earnings of $51.7 million on net sales of $455.5 million. Operating results were affected by lower spreads and unit shipments in most product lines.
-- "Our OEM segment posted operating earnings of $19.0 million during the second quarter of 2008 on net sales of $354.0 million, which compares with operating earnings of $18.0 million on net sales of $322.2 million for the same period in 2007.
-- "During the second quarter of 2008, capital expenditures totaled $6.3 million. We expect to invest between $30 and $40 million for capital expenditures during 2008.
-- "The COMEX average price of copper was $3.80 per pound in the second quarter of 2008, which compares with $3.46 in the second quarter of 2007.
-- "Our current ratio remains solid at 3.16 to 1. We ended the quarter with $273.6 million in cash and $661.0 million in working capital.
-- "Our return on average equity was 16.3 percent for the four quarters ended June, 2008.
-- "As of quarter end, our financial leverage was modest with a debt to total capitalization ratio of 30.6 percent.
-- "Total stockholders' equity was $765.0 million which equates to a book value per share of $20.60 of which $7.37 per share is in cash."
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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter For the Six Months
Ended Ended
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
(Unaudited) (Unaudited)
Net sales $753,471 $772,647 $1,457,579 $1,382,429
Cost of goods sold 661,209 661,746 1,273,006 1,198,324
Depreciation and amortization 11,004 11,306 21,988 22,272
Selling, general, and
administrative expense 34,618 38,971 72,909 73,898
Operating income 46,640 60,624 89,676 87,935
Interest expense (5,238) (5,689) (10,705) (11,183)
Other income (expense), net 951 1,925 4,968 6,878
Income before income taxes 42,353 56,860 83,939 83,630
Income tax expense (15,339) (20,462) (29,570) (28,319)
Net income $27,014 $36,398 $54,369 $55,311
Weighted average shares
for basic earnings per share 37,119 37,060 37,108 37,044
Effect of dilutive stock
options 340 204 269 160
Adjusted weighted average
shares for diluted earnings per
share 37,459 37,264 37,377 37,204
Basic earnings per share $0.73 $0.98 $1.47 $1.49
Diluted earnings per share $0.72 $0.98 $1.45 $1.49
Dividends per share $0.10 $0.10 $0.20 $0.20
Summary Segment Data:
Net sales:
Plumbing & Refrigeration
Segment $404,414 $455,486 $788,298 $825,482
OEM Segment 353,988 322,201 680,195 565,931
Elimination of intersegment
sales (4,931) (5,040) (10,914) (8,984)
Net sales $753,471 $772,647 $1,457,579 $1,382,429
Operating income:
Plumbing & Refrigeration
Segment $35,370 $51,746 $60,454 $78,600
OEM Segment 18,963 17,999 44,537 23,493
Unallocated expenses (7,693) (9,121) (15,315) (14,158)
Operating income $46,640 $60,624 $89,676 $87,935
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 28, December 29,
2008 2007
(Unaudited)
ASSETS
Cash and cash equivalents $273,620 $308,618
Accounts receivable, net 392,826 323,003
Inventories 263,752 269,032
Other current assets 36,789 39,694
Total current assets 966,987 940,347
Property, plant, and equipment,
net 303,453 308,383
Other assets 201,361 200,474
$1,471,801 $1,449,204
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current portion of long-term
debt $55,365 $72,743
Accounts payable 130,182 140,497
Other current liabilities 120,478 121,813
Total current liabilities 306,025 335,053
Long-term debt 281,586 281,738
Pension and postretirement
liabilities 36,001 36,071
Environmental reserves 8,873 8,897
Deferred income taxes 46,197 52,156
Other noncurrent liabilities 2,197 2,029
Total liabilities 680,879 715,944
Minority interest in subsidiary 25,895 22,765
Stockholders' equity 765,027 710,495
$1,471,801 $1,449,204
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Six Months Ended
June 28, June 30,
2008 2007
(Unaudited)
Operating activities:
Net income $54,369 $55,311
Reconciliation of net income to net
cash provided by operating activities:
Depreciation and amortization 22,323 22,465
Gain on early retirement of debt (2,482) -
Minority interest in subsidiary,
net of dividend paid 1,562 (18)
Stock-based compensation expense 1,479 1,273
Loss (gain) on disposal of
properties 341 (3,137)
Deferred income taxes 130 (6,140)
Income tax benefit from exercise
of stock options (69) (124)
Changes in assets and
liabilities, net of business
acquired:
Receivables (66,599) (78,521)
Inventories 7,489 35,467
Other assets (2,321) (10,948)
Current liabilities (12,757) 78,376
Other liabilities 1,342 773
Other, net (1,167) 2,144
Net cash provided by operating
activities 3,640 96,921
Investing activities:
Capital expenditures (14,833) (15,638)
Net deposits into restricted cash
balances (632) -
Acquisition of business, net of cash
received - (31,970)
Proceeds from sales of properties - 3,032
Net cash used in investing activities (15,465) (44,576)
Financing activities:
Repayments of long-term debt (23,605) (18,116)
Dividends paid (7,421) (7,410)
Issuance of debt by joint venture,
net 5,411 19,054
Issuance of shares under incentive
stock option plans
from treasury 1,055 977
Income tax benefit from exercise of
stock options 69 124
Acquisition of treasury stock (13) (54)
Net cash used in financing activities (24,504) (5,425)
Effect of exchange rate changes on
cash 1,331 525
(Decrease) increase in cash and cash
equivalents (34,998) 47,445
Cash and cash equivalents at the
beginning of the period 308,618 200,471
Cash and cash equivalents at the end
of the period $273,620 $247,916
SOURCE Mueller Industries, Inc.
Released July 22, 2008