Exhibit 99.1
Mueller Industries, Inc. Reports Third Quarter 2013 Earnings
 
MEMPHIS, Tenn., October 22, 2013 -- Mueller Industries, Inc. (NYSE: MLI) announced today that Mueller’s net income attributable to normal operations in the third quarter of 2013 was $19.5 million, or 69 cents per diluted share.  This compares with net income of $15.5 million, or 41 cents per diluted share, for the same period of 2012.
 
In addition, during the third quarter of 2013, the Company recognized an after-tax gain of $22.9 million (or 81 cents per diluted share) on the sale of its Schedule 40 pressure plastics fittings business along with the sale of certain other plastic fittings manufacturing assets.  Also during the third quarter of 2013, the Company recognized an after-tax asset impairment charge of $2.6 million (or 9 cents per diluted share) primarily related to real property associated with the aforementioned plastics sale transaction.  Including these non-recurring items, the Company’s net income in the third quarter of 2013 was $39.9 million, or $1.41 per diluted share.
 
Net sales for the third quarter of 2013 were $528.9 million compared with $514.2 million in the third quarter of 2012.  The increase in net sales was principally due to a 6.6 percent overall increase in unit volumes offset somewhat by lower copper costs that impacted the selling prices of the Company’s products.  Copper prices decreased to an average of $3.23 per pound in the third quarter of 2013 compared with $3.53 per pound in the third quarter of 2012.
 
Excluding the aforementioned non-recurring items, the Plumbing & Refrigeration and OEM segments reported an increase in third quarter income from normal operations of $1.1 million and $5.6 million, respectively, compared to the same period in 2012 due notably to the improvement in volumes.
 
At the end of the third quarter of 2013, the Company’s net book value per share was $23.41, of which $11.40 per share was cash. The Company ended the quarter with $322.2 million of cash on hand and a current ratio of 3.8 to 1.
 
Regarding the outlook, Greg Christopher, Mueller’s CEO said, “Mueller’s businesses perform best when unit volumes increase.  This is because, once our fixed costs are covered, each added increment of volume tends to generate higher margins.  This was well illustrated by our results for the quarter just ended.  We are on track to increase volumes as the construction industry improves.
 
“In addition, subsequent to the end of the third quarter of 2013, Mueller closed on the acquisition of Howell Metal Company and entered into a definitive agreement to acquire KME’s Yorkshire Copper Tube business, subject to regulatory approval in the United Kingdom.  Howell manufactures copper tube and linesets for U.S. distribution while Yorkshire Copper Tube produces European standard copper distribution tubes.  These acquisitions complement our strategy to grow and strengthen our core businesses.”
 
Mueller Industries, Inc. is a leading manufacturer of copper tube and fittings; brass and copper alloy rod, bar and shapes; aluminum and brass forgings; aluminum and copper impact extrusions; plastic fittings and valves; refrigeration valves and fittings; and fabricated tubular products.  Mueller’s operations are located throughout the United States and in Canada, Mexico, Great Britain, and China.  Mueller’s business is importantly linked to: (1) the construction of new homes; (2) the improvement and reconditioning of existing homes and structures; and (3) the commercial construction market that includes office buildings, factories, hotels, hospitals, etc.
 

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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 energy, market demand, pricing, competitive and technological factors, and the availability of financing, among others, as set forth in the Company’s SEC filings.  The words “outlook,” “estimate,” “project,” “intend,” “expect,” “believe,” “target,” “pro forma,” and similar expressions are intended to identify forward-looking statements.  The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report.  The Company has no obligation to publicly update or revise any forward-looking statements to reflect events after the date of this report.
 

 
CONTACT
Jeffrey A. Martin
(901)753-3226
 
 
 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

   
For the Quarter Ended
    
For the Nine Months Ended
  
(In thousands, except per share data)
  
September 28, 2013
    
September 29, 2012
    
September 28, 2013
    
September 29, 2012
  
                         
Net sales
  
$
528,854
    
$
514,165
    
$
1,670,826
    
$
1,685,932
  
                                 
Cost of goods sold
    
456,302
      
449,718
      
1,440,277
      
1,465,744
  
Depreciation and amortization
    
7,882
      
7,870
      
24,364
      
23,318
  
Selling, general, and administrative expense
    
32,921
      
32,120
      
99,078
      
97,209
  
Gain on sale of plastic fittings manufacturing assets
    
(39,765
)
    
—
      
(39,765
)
    
—
  
Impairment charges
    
4,304
      
—
      
4,304
      
—
  
Insurance settlements
    
—
      
—
      
(106,332
)
    
(1,500
)
                                 
    Operating income
    
67,210
      
24,457
      
248,900
      
101,161
  
                                 
Interest expense
    
(1,243
)
    
(353
)
    
(2,940
)
    
(5,711
)
Other income, net
    
842
      
219
      
4,324
      
963
  
                                 
    Income before income taxes
    
66,809
      
24,323
      
250,284
      
96,413
  
                                 
Income tax expense
    
(26,816
)
    
(8,753
)
    
(92,015
)
    
(29,486
)
                                 
    Consolidated net income
    
39,993
      
15,570
      
158,269
      
66,927
  
                                 
Net income attributable to noncontrolling interest
    
(129
)
    
(59
)
    
(1,053
)
    
(900
)
                                 
    Net income attributable to Mueller Industries, Inc.
  
$
39,864
    
$
15,511
    
$
157,216
    
$
66,027
  
                                 
Weighted average shares for basic earnings per share
    
27,894
      
37,505
      
27,852
      
37,849
  
Effect of dilutive stock-based awards
    
361
      
452
      
369
      
444
  
                                 
Adjusted weighted average shares for diluted earnings per share
    
28,255
      
37,957
      
28,221
      
38,293
  
                                 
Basic earnings per share
  
$
1.43
    
$
0.41
    
$
5.64
    
$
1.74
  
                                 
Diluted earnings per share
  
$
1.41
    
$
0.41
    
$
5.57
    
$
1.72
  
                                 
Dividends per share
  
$
0.125
    
$
0.10
    
$
0.375
    
$
0.30
  
                                 
Summary Segment Data:
                                
                                 
Net sales:
                                
    Plumbing & Refrigeration Segment
  
$
301,622
    
$
297,913
    
$
942,109
    
$
944,955
  
    OEM Segment
    
230,396
      
221,468
      
741,227
      
760,995
  
    Elimination of intersegment sales
    
(3,164
)
    
(5,216
)
    
(12,510
)
    
(20,018
)
                                 
Net sales
  
$
528,854
    
$
514,165
    
$
1,670,826
    
$
1,685,932
  
                                 
Operating income:
                                
    Plumbing & Refrigeration Segment
  
$
54,271
    
$
17,593
    
$
206,708
    
$
68,456
  
    OEM Segment
    
19,937
      
14,421
      
61,199
      
54,203
  
    Unallocated expenses
    
(6,998
)
    
(7,557
)
    
(19,007
)
    
(21,498
)
                                 
Operating income
  
$
67,210
    
$
24,457
    
$
248,900
    
$
101,161
  

 
 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(In thousands)
  
September 28, 2013
    
December 29, 2012
  
ASSETS
            
Cash and cash equivalents
  
$
322,177
    
$
198,934
  
Accounts receivable, net
    
312,919
      
271,093
  
Inventories
    
234,081
      
229,434
  
Other current assets
    
55,166
      
47,733
  
                 
    Total current assets
    
924,343
      
747,194
  
                 
Property, plant, and equipment, net
    
222,751
      
233,263
  
Other assets
    
113,527
      
123,698
  
                 
   
$
1,260,621
    
$
1,104,155
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
            
Current portion of debt
  
$
33,036
    
$
27,570
  
Accounts payable
    
76,725
      
87,574
  
Other current liabilities
    
134,411
      
143,552
  
                 
    Total current liabilities
    
244,172
      
258,696
  
                 
Long-term debt
    
206,550
      
207,300
  
Pension and postretirement liabilities
    
52,205
      
55,019
  
Environmental reserves
    
22,435
      
22,597
  
Deferred income taxes
    
39,698
      
20,910
  
Other noncurrent liabilities
    
1,141
      
1,667
  
                 
    Total liabilities
    
566,201
      
566,189
  
                 
Total Mueller Industries, Inc. stockholders’ equity
    
661,749
      
506,908
  
Noncontrolling interest
    
32,671
      
31,058
  
                 
    Total equity
    
694,420
      
537,966
  
                 
   
$
1,260,621
    
$
1,104,155
  
                 
 
 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
For the Nine Months Ended
  
 (In thousands)
  
September 28, 2013
    
September 29, 2012
  
         
Cash flows from operating activities
                
  Consolidated net income
  
$
158,269
    
$
66,927
  
  Reconciliation of consolidated net income to net cash provided by operating activities:
                
      Depreciation and amortization
    
24,583
      
23,713
  
      Stock-based compensation expense
    
4,560
      
3,042
  
      Insurance settlements
    
(106,332
)
    
(1,500
)
      Insurance proceeds – noncapital related
    
32,395
      
14,250
  
      Gain on sale of plastic fittings manufacturing assets
    
(39,765
)
    
—
  
      (Gain) loss on disposal of properties
    
(3,316
)
    
175
  
      Impairment charges
    
4,304
      
—
  
      Deferred income taxes
    
14,152
      
2,319
  
      Income tax benefit from exercise of stock options
    
(670
)
    
(517
)
      Changes in assets and liabilities, net of business acquired:
                
        Receivables
    
(38,370
)
    
(15,779
)
        Inventories
    
(4,566
)
    
585
  
        Other assets
    
4,886
      
(8,434
)
        Current liabilities
    
19,649
      
(21,120
)
        Other liabilities
    
(297
)
    
7,834
  
        Other, net
    
508
      
1,271
  
                 
Net cash provided by operating activities
    
69,990
      
72,766
  
                 
Cash flows from investing activities
                
  Capital expenditures
    
(33,402
)
    
(43,841
)
  Acquisition of business
    
—
      
(11,503
)
  Insurance proceeds for property and equipment
    
29,910
      
42,250
  
  Net (deposits into) withdrawals from restricted cash balances
    
(2,473
)
    
6,908
  
  Proceeds from the sales of assets
    
64,966
      
502
  
                 
Net cash provided by (used in) investing activities
    
59,001
      
(5,684
)
                 
Cash flows from financing activities
                
  Dividends paid to stockholders of Mueller Industries, Inc.
    
(10,449
)
    
(11,415
)
  Debt issuance cost
    
(50
)
    
—
  
  Issuance of long-term debt
    
—
      
200,000
  
  Issuance (repayment) of debt by joint venture, net
    
4,940
      
(28,955
)
  Net cash used to settle stock-based awards
    
(337
)
    
(740
)
  Repurchase of common stock
    
—
      
(427,448
)
  Repayments of long-term debt
    
(750
)
    
(148,926
)
  Income tax benefit from exercise of stock options
    
670
      
517
  
                 
Net cash used in financing activities
    
(5,976
)
    
(416,967
)
                 
Effect of exchange rate changes on cash
    
228
      
1,478
  
                 
Increase (decrease) in cash and cash equivalents
    
123,243
      
(348,407
)
Cash and cash equivalents at the beginning of the period
    
198,934
      
514,162
  
                 
Cash and cash equivalents at the end of the period
  
$
322,177
    
$
165,755
  
                 
 
 
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MUELLER INDUSTRIES, INC.
Reconciliation of Net Income as Reported to Pro Forma Without Gain on Sale of
Plastic Fittings Manufacturing Assets and Impairment Charges
(Unaudited)

Earnings attributable to normal operations without the gain on sale of plastic fittings manufacturing assets and impairment charges is a measurement not derived in accordance with generally accepted accounting principles (GAAP).  Excluding the gain on sale of plastic fittings manufacturing assets and impairment charges is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business.  Reconciliation of earnings attributable to normal operations without the gain on sale of plastic fittings manufacturing assets and impairment charges to net income as reported is as follows:


   
For the Quarter Ended September 28, 2013
  
         
Impact of
        
(In thousands, except per share data)
  
As Reported
    
Gain on Sale of
Plastic Fittings
Manufacturing
Assets
    
Impairment
Charges
    
Pro Forma
  
                         
Operating income
  
$
67,210
    
$
39,765
    
$
(4,304
)
  
$
31,749
  
                                 
Interest expense
    
(1,243
)
    
—
      
—
      
(1,243
)
Other income, net
    
842
      
—
      
—
      
842
  
                                 
    Income before income taxes
    
66,809
      
39,765
      
(4,304
)
    
31,348
  
Income tax expense
    
(26,816
)
    
(16,845
)
    
1,719
      
(11,690
)
                                 
    Consolidated net income
    
39,993
      
22,920
      
(2,585
)
    
19,658
  
                                 
Net income attributable to noncontrolling interest
    
(129
)
    
—
      
—
      
(129
)
                                 
    Net income attributable to Mueller Industries, Inc.
  
$
39,864
    
$
22,920
    
$
(2,585
)
  
$
19,529
  
                                 
Diluted earnings per share
  
$
1.41
    
$
0.81
    
$
(0.09
)
  
$
0.69
  
                                 
 
 
 
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