Exhibit 19.1 To Our Stockholders, Customers, and Employees Mueller's second quarter of 2004 clearly demonstrated our Company's ability to leverage the benefits of favorable market conditions. Net income for the quarter was $27.0 million, or 73 cents per diluted share compared with $9.0 million, or 24 cents per diluted share for the same quarter last year. Net sales for the second quarter of 2004 were $380.8 million compared with $248.2 million in the second quarter of 2003. We shipped 198.5 million pounds of product versus 175.5 million pounds in the same quarter last year. The three-fold increase in our earnings was due to a combination of higher profit margins and an increase in volume. Particularly important was the improvement in copper tube spreads which returned to year 2000 levels. Also, our European operations and brass rod businesses contributed to the increased earnings as margins and volumes rose. The increased volume had the additional benefit of reducing our per unit costs. These favorable conditions came together in what has historically been our busiest quarter, the second quarter of the year, and resulted in our best quarter since the second quarter of 2000. Our financial position is excellent. Mueller ended the quarter with $263.7 million cash on hand, and total debt of only $12.4 million. The business outlook remains good. Housing starts for 2004 will likely exceed the robust level of 1,853,000 starts achieved in 2003. Moreover commercial construction, an important market for our products, is improving along with our national economy. Interest rates have recently ticked up, but by historical standards are quite low. And the National Association of Home Builders has forecasted that 2005 will be another outstanding year for the housing industry. Our Annual Stockholders' Meeting was held at Mueller's headquarters in Memphis, Tennessee on April 29, 2004. The stockholders elected Messrs. Fulvio, Gladstein, Hermanson, Hodes, Karp and O'Hagan as directors, and approved the appointment of Ernst & Young LLP as our independent auditors. 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 July 13, 2004 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, market demand, pricing, and competitive and technological factors, among others, as set forth in the Company's SEC filings. -1- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data)
For the Quarter Ended June 26, 2004 June 28, 2003 (Unaudited) Net sales $ 380,822 $ 248,221 Cost of goods sold 303,720 203,461 Depreciation and amortization 10,159 9,722 Selling, general, and administrative expense 28,199 23,575 Impairment charge - - ---------- ---------- Operating income 38,744 11,463 Nonoperating income, net 981 1,633 ---------- ---------- Income from continuing operations before income taxes 39,725 13,096 Income tax expense (12,677) (4,117) ---------- ---------- Income from continuing operations 27,048 8,979 Discontinued operations, net of tax - - ---------- ---------- Net income $ 27,048 $ 8,979 ========== ========== Basic earnings (loss) per share: Weighted average shares outstanding 34,978 34,263 ========== ========== From continuing operations $ 0.77 $ 0.26 From discontinued operations - - ---------- ---------- Basic earnings per share $ 0.77 $ 0.26 ========== ========== Diluted earnings (loss) per share: Weighted average shares outstanding plus assumed conversions 36,892 36,803 ========== ========== From continuing operations $ 0.73 $ 0.24 From discontinued operations - - ---------- ---------- Diluted earnings per share $ 0.73 $ 0.24 ========== ==========
-2- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued) (In thousands, except per share data)
For the Six Months Ended June 26, 2004 June 28, 2003 (Unaudited) Net sales $ 726,781 $ 480,243 Cost of goods sold 584,749 395,376 Depreciation and amortization 20,124 19,462 Selling, general, and administrative expense 54,881 46,871 Impairment charge 3,941 - ---------- ---------- Operating income 63,086 18,534 Nonoperating income, net 3,381 1,672 ---------- ---------- Income from continuing operations before income taxes 66,467 20,206 Income tax expense (21,459) (6,767) ---------- ---------- Income from continuing operations 45,008 13,439 Discontinued operations, net of tax - (539) ---------- ---------- Net income $ 45,008 $ 12,900 ========== ========== Basic earnings (loss) per share: Weighted average shares outstanding 34,818 34,260 ========== ========== From continuing operations $ 1.29 $ 0.40 From discontinued operations - (0.02) ---------- ---------- Basic earnings per share $ 1.29 $ 0.38 ========== ========== Diluted earnings (loss) per share: Weighted average shares outstanding plus assumed conversions 36,900 36,787 ========== ========== From continuing operations $ 1.22 $ 0.36 From discontinued operations - (0.01) ---------- ---------- Diluted earnings per share $ 1.22 $ 0.35 ========== ==========
-3- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
June 26, 2004 December 27, 2003 (Unaudited) Assets Cash and cash equivalents $ 263,687 $ 255,088 Accounts receivable, net 223,111 163,006 Inventories 171,685 140,548 Other current assets 15,293 11,713 ---------- ---------- Total current assets 673,776 570,355 Property, plant, and equipment, net 334,093 345,537 Other assets 134,633 139,292 ---------- ---------- $ 1,142,502 $ 1,055,184 ========== ========== Liabilities and Stockholders' Equity Current portion of long-term debt $ 1,085 $ 2,835 Accounts payable 63,856 42,081 Other current liabilities 88,976 68,590 ---------- ---------- Total current liabilities 153,917 113,506 Long-term debt 11,334 11,437 Pension and postretirement liabilities 32,508 31,643 Environmental reserves 9,822 9,560 Deferred income taxes 65,894 63,734 Other noncurrent liabilities 10,211 10,238 ---------- ---------- Total liabilities 283,686 240,118 Minority interest in subsidiaries 24 208 Stockholders' equity 858,792 814,858 ---------- ---------- $ 1,142,502 $ 1,055,184 ========== ==========
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