Exhibit 19.1
To Our Stockholders, Customers, and Employees
The first quarter of 2003 was adversely effected by exceptionally cold
weather conditions, which slowed product deliveries. In addition, margins in
our copper tube business remained depressed. The combination of these
factors, together with market pressures, resulted in a disappointing
quarter. However, we believe volume will pick up in the second quarter as
the prime construction season gets underway.
Net earnings for the first quarter of 2003 were $3.9 million, or 11
cents per diluted share, compared to $17.9 million, or 48 cents per diluted
share, for the first quarter of 2002.
Net sales for the first quarter were $232.0 million, a decrease of 6.9
percent from sales of $249.1 for the same quarter of 2002. We shipped 166.6
million pounds of product, compared with 181.5 million pounds for the same
quarter last year.
Mueller's financial condition is strong. At the end of the quarter, our
cash position is $194.9 million, which is more than $5.00 per outstanding
share. Our debt-to-total capitalization is virtually nil and, in fact, we
currently have no net debt as cash on hand substantially exceeds total debt.
Moreover, our current ratio is an impressive 5.1 to 1. In these uncertain
times, Mueller's financial strength allows us to focus on our business, and
make decisions based on merit rather than expediency.
During the first quarter of 2003, Mueller acquired additional shares of
Conbraco Industries, Inc., and we are now its largest shareholder at 34
percent. Conbraco manufactures flow control products, including Apollo ball
valves, butterfly valves, and other products for commercial and industrial
applications. We are working with Conbraco's management to achieve mutual
benefits for our companies.
The housing industry continues to be a bright spot in our national
economy. Building permits, which are an excellent indicator of future
business, remain high and are tracking the pace of 2002. Recently, consumer
confidence dipped and the national job market was noticeably weaker. We are
carefully monitoring these and other factors; but, it is significant that
mortgage rates remain very attractive and that may enable the housing
industry to have another good year in 2003.
Our Annual Stockholders' Meeting will be held at Mueller's headquarters
in Memphis, Tennessee on May 1, 2003. You should have already received the
notice of the meeting as well as proxy material and the 2002 Annual Report.
We hope you can attend but, if you cannot, we urge you to sign and return
your proxy card.
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Sincerely,
/s/Harvey L. Karp
Harvey L. Karp
Chairman of the Board
/s/William D. O'Hagan
William D. O'Hagan
President and Chief Executive Officer
April 15, 2003
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, market demand, pricing, and
competitive and technological factors, among others, as set forth in the
Company's SEC filings.
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
March 29, 2003 March 30, 2002
(Unaudited)
Net sales $ 232,022 $ 249,053
Cost of goods sold 191,915 191,806
Depreciation and amortization 9,740 9,076
Selling, general, and
administrative expense 23,296 21,981
---------- ----------
Operating income 7,071 26,190
Nonoperating income, net 39 958
---------- ----------
Income from continuing operations
before income taxes 7,110 27,148
Income tax expense (2,650) (9,283)
---------- ----------
Income from continuing operations 4,460 17,865
(Loss) income from discontinued
operations, net of tax (539) 71
---------- ----------
Net income $ 3,921 $ 17,936
========== ==========
Basic earnings (loss) per share:
Weighted average shares
outstanding 34,257 33,506
========== ==========
From continuing operations $ 0.13 $ 0.54
From discontinued operations (0.02) -
---------- ----------
Basic earnings per share $ 0.11 $ 0.54
========== ==========
Diluted earnings (loss) per share:
Weighted average shares
outstanding plus assumed
conversions 36,771 37,329
========== ==========
From continuing operations $ 0.12 $ 0.48
From discontinued operations (0.01) -
---------- ----------
Diluted earnings per share $ 0.11 $ 0.48
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 29, 2003 December 28, 2002
(Unaudited)
Assets
Cash and cash equivalents $ 194,915 $ 217,601
Accounts receivable, net 142,397 132,427
Inventories 144,890 142,953
Other current assets 6,744 7,366
---------- ----------
Total current assets 488,946 500,347
Property, plant, and equipment, net 348,356 352,469
Other assets 143,336 135,131
---------- ----------
$ 980,638 $ 987,947
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 3,711 $ 4,161
Accounts payable 35,950 41,004
Other current liabilities 55,580 61,186
---------- ----------
Total current liabilities 95,241 106,351
Long-term debt 13,333 14,005
Other noncurrent liabilities 113,783 113,647
---------- ----------
Total liabilities 222,357 234,003
Minority interest in subsidiaries 459 421
Stockholders' equity 757,822 753,523
---------- ----------
$ 980,638 $ 987,947
========== ==========
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