TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES Mueller's business during the first quarter of 2002 showed clear signs of rebounding from the economic slowdown which affected the year 2001. Net earnings rose 16 percent to $17.9 million, or 48 cents per diluted share, compared with 42 cents per diluted share for the same quarter last year. More significantly, earnings rose 53 percent over the preceding quarter (the fourth quarter of 2001). Net sales for the first quarter of 2002 were $268.0 million or 3 percent less than the same quarter of 2001, due primarily to a 12 percent decrease in the price of copper. However, the volume of product sold rose to 195 million pounds from 176 million pounds in the same quarter last year. We believe that during the first quarter of 2002, our customers began restocking their inventories, which had declined substantially during 2001. This restocking process should provide Mueller with an added increment of business as the year progresses. We are gratified to report that Mueller's European copper tube operations turned profitable in the first quarter. Although the profit was modest, it convincingly demonstrated that the modernization of our Bilston copper tube mill was successful. As production refinements are implemented, our European operations will be well-positioned to make a growing contribution to Mueller's bottom line. Our Company's business outlook has improved over the past 60 to 90 days. The national economy is strengthening, and the housing and construction industry continues to benefit from low mortgage rates. The result is a high level of new building permits, and that is a good indicator of future business. Significantly, even though many financial assets have declined in value over the past several years, home prices continue to surge, rising 6.9 percent in 2001 and 9.2 percent in 2000. This supports our belief that an investment in a home is both financially wise and personally desirable. Our Annual Stockholders' Meeting will be held at Mueller's headquarters in Memphis, Tennessee on May 9, 2002. You should have already received the notice of meeting, as well as proxy material and the 2001 Annual Report. We hope you can attend, but if you cannot, we urge you to sign and return your proxy card. You may also vote via the internet by following the instructions contained on the proxy card. Sincerely, /S/HARVEY L. KARP /S/WILLIAM D. O'HAGAN Harvey L. Karp William D. O'Hagan Chairman of the Board President and Chief Executive Officer April 16, 2002 -1- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share data)
For the Quarter Ended March 30, 2002 March 31, 2001 Net sales $ 268,024 $ 276,578 Cost of goods sold 208,490 218,116 Depreciation and amortization 9,759 10,527 Selling, general, and administrative expense 22,717 22,556 ---------- ---------- Operating income 27,058 25,379 Interest expense (493) (1,424) Environmental expense (175) (761) Other income, net 1,636 1,766 ---------- ---------- Income before income taxes 28,026 24,960 Income tax expense (10,090) (9,491) ---------- ---------- Net income $ 17,936 $ 15,469 ========== ========== Earnings per share: Basic $ 0.54 $ 0.46 ========== ========== Diluted $ 0.48 $ 0.42 ========== ==========
-2- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
March 30, 2002 December 29, 2001 Assets Cash and cash equivalents $ 107,410 $ 121,862 Accounts receivable, net 172,422 148,808 Inventories 123,471 126,629 Other current assets 5,851 6,614 ---------- ---------- Total current assets 409,154 403,913 Property, plant, and equipment, net 385,441 387,533 Other assets 124,246 124,619 ---------- ---------- $ 918,841 $ 916,065 ========== ========== Liabilities and Stockholders' Equity Current portion of long-term debt $ 3,986 $ 3,996 Accounts payable 45,808 34,209 Other current liabilities 65,300 63,283 ---------- ---------- Total current liabilities 115,094 101,488 Long-term debt 15,955 46,977 Other noncurrent liabilities 92,663 94,396 ---------- ---------- Total liabilities 223,712 242,861 Minority interest in subsidiaries 271 271 Stockholders' equity 694,858 672,933 ---------- ---------- $ 918,841 $ 916,065 ========== ==========
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