For
the quarterly period ended September 26, 2009
|
Commission
file number 1–6770
|
Delaware
|
25-0790410
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
of
incorporation or organization)
|
Identification
No.)
|
8285
Tournament Drive, Suite 150
|
|
Memphis,
Tennessee
|
38125
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer x
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company o
|
|
|
Page
Number
|
|
||
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
18
|
|
|
|
|
|
23
|
|
|
|
|
|
24
|
|
|
|
|
|
||
|
|
|
|
25
|
|
|
|
|
|
29
|
|
29
|
||
|
|
|
|
30
|
|
|
|
|
31
|
|
|
For
the Quarter Ended
|
|
|
For
the Nine Months Ended
|
|
||||||||||
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
||||
(In
thousands, except per share data)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
$
|
419,890
|
|
|
$
|
665,496
|
|
|
$
|
1,114,248
|
|
|
$
|
2,123,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost
of goods sold
|
|
|
354,039
|
|
|
|
588,469
|
|
|
954,775
|
|
|
|
1,861,475
|
|
|
Depreciation
and amortization
|
|
|
10,441
|
|
|
|
11,529
|
|
|
|
31,276
|
|
|
|
33,517
|
|
Selling,
general, and administrative expense
|
27,593
|
35,674
|
89,067
|
108,583
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating
income
|
|
|
27,817
|
|
|
|
29,824
|
|
|
|
39,130
|
|
|
|
119,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest
expense
|
|
|
(2,435
|
)
|
|
|
(5,050
|
)
|
|
|
(7,553
|
)
|
|
|
(15,755
|
)
|
Other
(expense) income, net
|
|
|
(324
|
)
|
|
|
2,573
|
|
|
|
688
|
|
|
|
9,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income
before income taxes
|
|
|
25,058
|
|
|
|
27,347
|
|
|
|
32,265
|
|
|
|
112,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income
tax expense
|
|
|
(6,246
|
)
|
|
|
(8,422
|
)
|
|
|
(9,796
|
)
|
|
|
(37,992
|
)
|
Consolidated
net income
|
18,812
|
18,925
|
22,469
|
74,856
|
||||||||||||
Less:
net income attributable to noncontrolling interest
|
(146
|
)
|
(254
|
)
|
(267
|
)
|
(1,816
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
income attributable to Mueller Industries, Inc.
|
|
$
|
18,666
|
$
|
18,671
|
$
|
22,202
|
$
|
73,040
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted
average shares for basic earnings per share
|
|
|
37,474
|
|
|
37,136
|
|
|
|
37,253
|
|
|
|
37,117
|
||
Effect
of dilutive stock-based awards
|
|
|
72
|
|
|
176
|
|
|
|
89
|
|
|
|
238
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted
weighted average shares for diluted earnings per share
|
|
|
37,546
|
|
|
37,312
|
|
|
|
37,342
|
|
|
|
37,355
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
earnings per share
|
|
$
|
0.50
|
|
$
|
0.50
|
|
|
$
|
0.60
|
|
|
$
|
1.97
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted
earnings per share
|
|
$
|
0.50
|
|
$
|
0.50
|
|
|
$
|
0.59
|
|
|
$
|
1.96
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends
per share
|
|
$
|
0.10
|
|
$
|
0.10
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to condensed consolidated financial
statements.
|
|
September
26, 2009
|
|
|
December
27, 2008
|
|
|||
(In
thousands, except share data)
|
||||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
353,874
|
$
|
278,860
|
||||
Accounts receivable, less allowance of doubtful accounts of $6,734 in 2009
and $6,690 in 2008
|
225,316
|
219,035
|
||||||
Inventories
|
178,372
|
210,609
|
||||||
Other current assets
|
30,327
|
46,322
|
||||||
Total current assets
|
787,889
|
754,826
|
||||||
Property,
plant, and equipment, net
|
258,278
|
276,927
|
||||||
Goodwill
|
130,899
|
129,186
|
||||||
Other
assets
|
20,530
|
21,974
|
||||||
Total
Assets
|
$
|
1,197,596
|
$
|
1,182,913
|
||||
Liabilities
|
||||||||
Current
liabilities:
|
||||||||
Current
portion of debt
|
$
|
12,372
|
$
|
24,184
|
||||
Accounts
payable
|
70,380
|
63,732
|
||||||
Accrued
wages and other employee costs
|
27,284
|
35,079
|
||||||
Other
current liabilities
|
69,062
|
78,589
|
||||||
Total
current liabilities
|
179,098
|
201,584
|
||||||
Long-term
debt, less current portion
|
158,226
|
158,726
|
||||||
Pension
and postretirement liabilities
|
39,180
|
38,452
|
||||||
Environmental
reserves
|
23,090
|
23,248
|
||||||
Deferred
income taxes
|
33,435
|
33,940
|
||||||
Other
noncurrent liabilities
|
1,401
|
1,698
|
||||||
Total
liabilities
|
434,430
|
457,648
|
||||||
Equity
|
||||||||
Mueller
Industries, Inc. stockholders’ equity:
|
||||||||
Preferred stock - $1.00 par value; shares authorized 5,000,000; none
outstanding
|
—
|
—
|
||||||
Common stock - $.01 par value; shares authorized 100,000,000; issued
40,091,502; outstanding 37,646,408 in 2009 and 37,143,163 in
2008
|
401
|
401
|
||||||
Additional paid-in capital
|
261,407
|
262,378
|
||||||
Retained earnings
|
561,510
|
550,501
|
||||||
Accumulated other comprehensive loss
|
(31,996
|
)
|
(48,113
|
)
|
||||
Treasury common stock, at cost
|
(53,523
|
)
|
(64,484
|
)
|
||||
Total
Mueller Industries, Inc. stockholders’ equity
|
737,799
|
700,683
|
||||||
Noncontrolling interest
|
25,367
|
24,582
|
||||||
Total
equity
|
763,166
|
725,265
|
||||||
Commitments
and contingencies
|
—
|
—
|
||||||
Total
Liabilities and Equity
|
$
|
1,197,596
|
$
|
1,182,913
|
||||
See
accompanying notes to condensed consolidated financial
statements.
|
|
For
the Nine Months Ended
|
|
|||||
|
September
26, 2009
|
|
|
September
27, 2008
|
|
||
(In
thousands)
|
|
||||||
Cash
flows from operating activities
|
|
|
|
|
|
||
Net income attributable to Mueller Industries, Inc.
|
$
|
22,202
|
|
$
|
73,040
|
||
Reconciliation
of net income attributable to Mueller Industries, Inc. to net cash
provided by operating activities:
|
|||||||
Depreciation and amortization
|
|
31,440
|
|
|
33,984
|
||
Gain on early retirement of debt
|
(128
|
)
|
(2,482
|
)
|
|||
Net
income attributable to noncontrolling interest
|
|
267
|
|
|
1,816
|
||
Stock-based
compensation expense
|
1,892
|
2,238
|
|||||
Loss
on disposal of properties
|
|
975
|
|
|
306
|
||
Deferred
income taxes
|
(2,012
|
)
|
(515
|
)
|
|||
Income
tax benefit from exercise of stock options
|
(189
|
)
|
(92
|
)
|
|||
Changes
in assets and liabilities:
|
|||||||
Receivables
|
|
(3,030
|
)
|
|
|
(29,130
|
)
|
Inventories
|
35,339
|
6,635
|
|||||
Other
assets
|
|
4,152
|
|
|
(5,350
|
)
|
|
Current
liabilities
|
(6,229
|
)
|
(16,027
|
)
|
|||
Other
liabilities
|
|
(337
|
)
|
|
|
784
|
|
Other,
net
|
17
|
(719
|
)
|
||||
|
|
|
|
||||
Net
cash provided by operating activities
|
84,359
|
64,488
|
|||||
|
|
|
|
||||
Cash
flows from investing activities
|
|||||||
Capital
expenditures
|
|
(11,002
|
)
|
|
|
(17,871
|
)
|
Net
withdrawals from restricted cash balances
|
12,806
|
678
|
|||||
Proceeds
from sales of properties
|
|
611
|
|
|
77
|
||
|
|
|
|
||||
Net
cash provided by (used in) investing activities
|
2,415
|
(17,116
|
)
|
||||
|
|
|
|
||||
Cash
flows from financing activities
|
|||||||
Repayments
of long-term debt
|
|
(370
|
)
|
|
|
(23,650
|
)
|
Dividends
paid to stockholders of Mueller Industries, Inc.
|
(11,186
|
)
|
(11,133
|
)
|
|||
Dividends
paid to noncontrolling interest
|
(1,449
|
)
|
—
|
||||
Repayment
of debt by joint venture, net
|
|
(11,813
|
)
|
|
|
(12,491
|
)
|
Issuance of shares under incentive stock option plans from
treasury
|
8,678
|
1,074
|
|||||
Income tax benefit from exercise of stock options
|
189
|
92
|
|||||
Acquisition of treasury stock
|
(416
|
)
|
(31
|
)
|
|||
|
|
|
|
||||
Net
cash used in financing activities
|
(16,367
|
)
|
(46,139
|
)
|
|||
|
|
|
|
||||
Effect
of exchange rate changes on cash
|
4,607
|
(1,500
|
)
|
||||
|
|
|
|
||||
Increase
(decrease) in cash and cash equivalents
|
75,014
|
(267
|
)
|
||||
Cash
and cash equivalents at the beginning of the period
|
|
278,860
|
|
|
308,618
|
||
Cash
and cash equivalents at the end of the period
|
$
|
353,874
|
|
$
|
308,351
|
||
|
|
|
|
|
|
|
|
See
accompanying notes to condensed consolidated financial
statements.
|
|
September
26, 2009
|
|
|
December
27, 2008
|
|
|||
(In
thousands)
|
||||||||
Raw
materials and supplies
|
$
|
23,647
|
$
|
57,536
|
||||
Work-in-process
|
33,035
|
39,018
|
||||||
Finished
goods
|
127,525
|
122,756
|
||||||
Valuation
reserves
|
(5,835
|
)
|
(8,701
|
)
|
||||
Inventories
|
$
|
178,372
|
$
|
210,609
|
||||
(In
thousands)
|
|
For
the Quarter Ended September 26, 2009
|
|
|||||||||||||
|
|
Plumbing
& Refrigeration Segment
|
|
|
OEM
Segment
|
|
|
Corporate
and Eliminations
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
$
|
240,878
|
$
|
181,621
|
$
|
(2,609
|
)
|
$
|
419,890
|
|
|||||
Cost
of goods sold
|
199,979
|
156,366
|
(2,306
|
)
|
354,039
|
|||||||||||
Depreciation
and amortization
|
|
|
6,623
|
3,553
|
265
|
10,441
|
|
|||||||||
Selling,
general, and administrative expense
|
|
|
18,290
|
5,172
|
4,131
|
27,593
|
|
|||||||||
|
|
|
||||||||||||||
Operating income
|
15,986
|
16,530
|
(4,699
|
)
|
27,817
|
|||||||||||
Interest
expense
|
|
|
(2,435
|
)
|
||||||||||||
Other
expense, net
|
(324
|
)
|
||||||||||||||
|
|
|
|
|||||||||||||
Income
before income taxes
|
$
|
25,058
|
||||||||||||||
|
|
|
|
(In
thousands)
|
|
For
the Quarter Ended September 27, 2008
|
|
|||||||||||||
|
|
Plumbing
& Refrigeration Segment
|
|
|
OEM
Segment
|
|
|
Corporate
and Eliminations
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
$
|
371,315
|
|
|
$
|
299,470
|
|
|
$
|
(5,289
|
)
|
|
$
|
665,496
|
|
Cost
of goods sold
|
313,760
|
279,696
|
(4,987
|
)
|
588,469
|
|||||||||||
Depreciation
and amortization
|
|
|
7,287
|
|
|
|
3,966
|
|
|
|
276
|
|
|
|
11,529
|
|
Selling,
general, and administrative expense
|
|
|
24,819
|
|
|
|
5,165
|
|
|
|
5,690
|
|
|
|
35,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating income
|
25,449
|
10,643
|
(6,268
|
)
|
29,824
|
|||||||||||
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
(5,050
|
)
|
|||
Other
income, net
|
2,573
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Income
before income taxes
|
$
|
27,347
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
For
the Nine Months Ended September 26, 2009
|
|
|||||||||||||
|
|
Plumbing
& Refrigeration Segment
|
|
|
OEM
Segment
|
|
|
Corporate
and Eliminations
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
$
|
661,035
|
|
|
$
|
459,898
|
|
|
$
|
(6,685
|
)
|
|
$
|
1,114,248
|
|
Cost
of goods sold
|
545,332
|
415,227
|
(5,784
|
)
|
954,775
|
|||||||||||
Depreciation
and amortization
|
|
|
19,829
|
|
|
|
10,641
|
|
|
|
806
|
|
|
|
31,276
|
|
Selling,
general, and administrative expense
|
|
|
57,675
|
|
|
|
15,715
|
|
|
|
15,677
|
|
|
|
89,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating income
|
38,199
|
18,315
|
(17,384
|
)
|
39,130
|
|||||||||||
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
(7,553
|
)
|
|||
Other
income, net
|
688
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
$
|
32,265
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
For
the Nine Months Ended September 27, 2008
|
|
|||||||||||||
|
|
Plumbing
& Refrigeration Segment
|
|
|
OEM
Segment
|
|
|
Corporate
and Eliminations
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
$
|
1,159,613
|
|
|
$
|
979,665
|
|
|
$
|
(16,203
|
)
|
|
$
|
2,123,075
|
|
Cost
of goods sold
|
981,905
|
894,872
|
(15,302
|
)
|
1,861,475
|
|||||||||||
Depreciation
and amortization
|
|
|
21,806
|
|
|
|
10,884
|
|
|
|
827
|
|
|
|
33,517
|
|
Selling,
general, and administrative expense
|
|
|
69,999
|
|
|
|
18,729
|
|
|
|
19,855
|
|
|
|
108,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating income
|
85,903
|
55,180
|
(21,583
|
)
|
119,500
|
|||||||||||
Interest
expense
|
|
|
|
|
|
|
|
|
(15,755
|
)
|
||||||
Other
income, net
|
9,103
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
$
|
112,848
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Quarter Ended
|
|
|
For
the Nine Months Ended
|
|
||||||||||
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
||||
(In
thousands)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated
net income
|
|
$
|
18,812
|
|
|
$
|
18,925
|
|
|
$
|
22,469
|
|
|
$
|
74,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||
Foreign
currency translation
|
(6,079
|
)
|
(15,438
|
)
|
12,011
|
(9,571
|
)
|
|||||||||
Net
change with respect to derivative instruments and hedging
activities
|
331
|
(831
|
)
|
6,152
|
(453
|
)
|
||||||||||
Other,
net
|
552
|
868
|
(79
|
)
|
1,185
|
|||||||||||
Total
other comprehensive (loss) income
|
(5,196
|
)
|
(15,401
|
)
|
18,084
|
(8,839
|
)
|
|||||||||
Comprehensive
income
|
13,616
|
3,524
|
40,553
|
66,017
|
||||||||||||
Less:
comprehensive income attributable to noncontrolling
interest
|
(161
|
)
|
(663
|
)
|
(2,234
|
)
|
(3,793
|
)
|
||||||||
Comprehensive
income attributable to Mueller Industries, Inc.
|
$
|
13,455
|
$
|
2,861
|
$
|
38,319
|
$
|
62,224
|
||||||||
|
|
For
the Quarter Ended
|
|
|
For
the Nine Months Ended
|
|
||||||||||
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
||||
(In
thousands)
|
||||||||||||||||
Pension
benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service
cost
|
|
$
|
274
|
|
|
$
|
529
|
|
|
$
|
835
|
|
|
$
|
1,776
|
|
Interest
cost
|
2,221
|
2,548
|
6,881
|
8,515
|
||||||||||||
Expected
return on plan assets
|
(2,878
|
)
|
(3,744
|
)
|
(8,622
|
)
|
(12,499
|
)
|
||||||||
Amortization
of prior service cost
|
76
|
77
|
229
|
256
|
||||||||||||
Amortization
of net loss
|
122
|
51
|
658
|
180
|
||||||||||||
Net
periodic benefit income
|
$
|
(185
|
) |
$
|
(539
|
)
|
$
|
(19
|
)
|
$
|
(1,772
|
)
|
||||
Other
benefits:
|
||||||||||||||||
Service
cost
|
$
|
59
|
$
|
74
|
$
|
176
|
$
|
237
|
||||||||
Interest
cost
|
302
|
326
|
905
|
1,081
|
||||||||||||
Amortization
of prior service cost
|
1
|
1
|
2
|
2
|
||||||||||||
Amortization
of net loss
|
41
|
54
|
125
|
180
|
||||||||||||
Net
periodic benefit cost
|
$
|
403
|
$
|
455
|
$
|
1,208
|
$
|
1,500
|
||||||||
|
|
For
the Quarter Ended
|
|
|
For
the Nine Months Ended
|
|
||||||||||
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
|
September
26, 2009
|
|
|
September
27, 2008
|
|
||||
(In
thousands)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest
income
|
|
$
|
242
|
|
|
$
|
2,023
|
|
|
$
|
1,023
|
|
|
$
|
6,116
|
|
Gain
on early retirement of debt
|
—
|
—
|
128
|
2,482
|
||||||||||||
(Loss)
gain on disposal of properties, net
|
(715
|
)
|
35
|
(975
|
)
|
(306
|
)
|
|||||||||
Environmental
expense, non-operating properties
|
(32
|
)
|
(126
|
)
|
(360
|
)
|
(396
|
)
|
||||||||
Other
|
181
|
641
|
872
|
1,207
|
||||||||||||
Other
(expense) income, net
|
$
|
(324
|
)
|
$
|
2,573
|
$
|
688
|
$
|
9,103
|
|||||||
September
26, 2009
|
||||||
Location
|
|
Fair
value
|
|
|||
(In
thousands)
|
||||||
Commodity
contracts
|
Other
current assets:
|
Gain
positions
|
$
|
649
|
||
Commodity
contracts
|
Loss
positions
|
48
|
||||
Commodity
contracts
|
Other
current liabilities:
|
Gain
positions
|
2
|
|||
Commodity
contracts
|
Loss
positions
|
2
|
||||
Gain
(Loss) Recognized in Accumulated OCI (Effective Portion), Net of
Tax
|
||||||||
For
the Quarter Ended
|
For
the Nine Months Ended
|
|||||||
|
|
September
26, 2009
|
|
|
September
26, 2009
|
|
||
(In
thousands)
|
||||||||
|
|
|
|
|
|
|||
Commodity
contracts (1)
|
$
|
1,357
|
$
|
3,732
|
||||
(1)
Includes $345 thousand and $968 thousand attributable to noncontrolling
interest for the quarter and nine months ended September 26, 2009,
respectively.
|
(Gain)
Loss Reclassified from Accumulated OCI into Income (Effective Portion),
Net of Tax
|
|||||||||
For
the Quarter Ended
|
For
the Nine Months Ended
|
||||||||
|
Location
|
|
September
26, 2009
|
|
|
September
26, 2009
|
|
||
(In
thousands)
|
|||||||||
|
|
|
|
|
|
|
|||
Commodity
contracts
|
Cost
of goods sold
|
$
|
(1,026
|
)
|
$
|
2,420
|
|||