Exhibit 19.1
To Our Stockholders, Customers, and Employees
Mueller's net income for the second quarter was $17.2 million, or 46
cents per diluted share, compared with $27.0 million, or 73 cents per
diluted share for the same quarter of 2004. Our current period results
include $4.8 million of interest expense due primarily to the Subordinated
Debentures that we issued late last year.
Second quarter net sales were $410.5 million, compared with net sales
of $380.8 million for the second quarter of 2004. This increase in sales
was attributable to rising raw material costs as well as the contribution of
recently acquired businesses (Vemco and Mueller Comercial SA), offset by
lower volumes. Margins in our copper tube and brass rod businesses were
effected by the significant rise in the cost of copper. The increase
averaged approximately 30 cents per pound for the quarter compared with the
same quarter last year. Competitive market conditions did not allow us to
recoup much of this increase. In addition, the volatile copper market
caused some of our customers to scale back their purchases. Despite the
above, the tube and rod businesses remained profitable. Thus far, in July,
we have seen a recovery in copper tube margins to more normal levels, and
consequently our business outlook is positive.
Mueller's financial position remains sound. We ended the quarter with
$69 million of cash on hand. Also, the Company declared and paid its
regular quarterly cash dividend of ten cents per common share during the
second quarter.
Our Annual Stockholders' Meeting was held at Mueller's headquarters in
Memphis, Tennessee on May 5, 2005. The stockholders elected Messrs.
Federbush, Fulvio, Gladstein, Hermanson, Hodes, Karp, and O'Hagan as
directors, and approved the appointment of Ernst & Young LLP as our
independent registered public accounting firm.
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 22, 2005
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 financing, market demand, pricing, and competitive and
technological factors, among others, as set forth in the Company's SEC
filings. These filings are available through our website at
www.muellerindustries.com.
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
July 2, 2005 June 26, 2004
(Unaudited)
Net sales $ 410,506 $ 380,822
Cost of goods sold 345,663 303,720
Depreciation and amortization 10,411 10,159
Selling, general, and
administrative expense 29,136 28,199
---------- ----------
Operating income 25,296 38,744
Interest expense (4,752) (199)
Other income, net 3,973 1,180
---------- ----------
Income before income taxes 24,517 39,725
Income tax expense (7,334) (12,677)
---------- ----------
Net income $ 17,183 $ 27,048
========== ==========
Weighted average shares for basic
earnings per share 36,599 34,978
Effect of dilutive stock options 466 1,914
---------- ----------
Adjusted weighted average shares
for diluted earnings per share 37,065 36,892
---------- ----------
Basic earnings per share $ 0.47 $ 0.77
========== ==========
Diluted earnings per share $ 0.46 $ 0.73
========== ==========
Dividends per share $ 0.10 $ 0.10
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued)
(In thousands, except per share data)
For the Six Months Ended
July 2, 2005 June 26, 2004
(Unaudited)
Net sales $ 812,169 $ 726,781
Cost of goods sold 679,687 584,749
Depreciation and amortization 20,489 20,124
Selling, general, and
administrative expense 59,491 54,881
Impairment charge - 3,941
---------- ----------
Operating income 52,502 63,086
Interest expense (9,936) (423)
Other income, net 4,767 3,804
---------- ----------
Income before income taxes 47,333 66,467
Income tax expense (14,942) (21,459)
---------- ----------
Net income $ 32,391 $ 45,008
========== ==========
Weighted average shares for basic
earnings per share 36,552 34,818
Effect of dilutive stock options 556 2,082
---------- ----------
Adjusted weighted average shares
for diluted earnings per share 37,108 36,900
---------- ----------
Basic earnings per share $ 0.89 $ 1.29
========== ==========
Diluted earnings per share $ 0.87 $ 1.22
========== ==========
Dividends per share $ 0.20 $ 0.20
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 2, 2005 December 25, 2004
(Unaudited)
Assets
Cash and cash equivalents $ 69,140 $ 47,449
Accounts receivable, net 229,431 201,396
Inventories 189,637 187,853
Other current assets 18,830 18,633
---------- ----------
Total current assets 507,038 455,331
Property, plant, and equipment, net 319,375 335,610
Other assets 175,769 172,790
---------- ----------
$ 1,002,182 $ 963,731
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 4,589 $ 5,328
Accounts payable 99,179 79,723
Other current liabilities 95,459 95,767
---------- ----------
Total current liabilities 199,227 180,818
Long-term debt 310,603 310,650
Pension and postretirement liabilities 32,285 33,167
Environmental reserves 9,221 9,503
Deferred income taxes 65,364 67,479
Other noncurrent liabilities 10,022 10,361
---------- ----------
Total liabilities 626,722 611,978
Minority interest in subsidiaries 74 67
Stockholders' equity 375,386 351,686
---------- ----------
$ 1,002,182 $ 963,731
========== ==========
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