Exhibit 99.1
 
Mueller Industries, Inc. Reports Fourth Quarter Results and Fiscal 2013 Earnings
 
MEMPHIS, Tenn., February 5, 2014-- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the fiscal year ended December 28, 2013 was $172.6 million, or $6.11  per diluted share, on net sales of $2.16 billion.  This compares to fiscal 2012 net income of $82.4 million, or $2.31 per diluted share, on net sales of $2.19 billion.
 
Net income for the fiscal years of 2013 and 2012 include several unusual items.  Excluding these unusual items, the Company’s net income for fiscal 2013 was $86.4 million, or $3.06 per diluted share, compared with $75.9 million, or $2.12 per diluted share, for fiscal 2012.  Consequently, the Company’s earnings attributable to normal operations in 2013 increased by 13.8 percent, and earnings per diluted share attributable to normal operations increased 44.3 percent, which was also affected by the repurchase of 10.4 million outstanding shares in September 2012.  A reconciliation of reported net income and earnings per diluted share to net income and earnings per diluted share excluding unusual items is included with the financial tables attached to this earnings release.
 
For the fourth quarter of 2013, the Company recorded net income of $15.4 million, or 54 cents per diluted share, on net sales of $487.7 million, compared with net income of $16.4 million, or 58 cents per diluted share, on net sales of $504.0 million in the fourth quarter of 2012.
 
Unit volumes for the quarter and for the year increased.  The decline in net sales for both periods was caused by decreases in copper prices.  The average price of copper was 27 cents per pound lower for the year and 32 cents per pound lower for the fourth quarter.
 
For the fourth quarter of 2013, cash generated from operations was $58.5 million, ending the year with $311.8 million of cash on hand and a current ratio of 3.8 to 1.  Year ending net book value per share was $24.85, of which $11.02 per share was cash.
 
During the fourth quarter of 2013, the Company completed the acquisition of Howell Metal Company and entered into a definitive agreement to acquire KME’s Yorkshire Copper Tube business, which is subject to regulatory approval.  Both Howell and Yorkshire are well established manufacturers of copper tube with strong brands.  These acquisitions support the Company’s strategy to grow its core businesses.
 
Regarding the outlook, Greg Christopher, Mueller’s CEO said, “The recovery in the housing market continues to advance but at an uneven pace.  Higher mortgage rates in mid-2013 caused turbulence in the market, but for the year as a whole, approximately 923,000 homes and apartments were started, 18 percent more than in 2012.  We still have a way to go to reach the housing construction levels of 2007 and before.
 
“Non-residential building activity in 2013 showed little change from 2012.  However, activity in this sector is starting to improve which may result in increased revenues.”
 
 
Page 1 of 6
 
 
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.
 

*********************
 


 
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
 
 
Page 2 of 6
 
 
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 
 
For the Quarter Ended
 
 
For the Year Ended
 
(In thousands, except per share data)
 
December 28, 2013
 
 
December 29, 2012
 
 
December 28, 2013
 
 
December 29, 2012
 
 
 
 
 
 
 
 
 
  
 
 
 
 
Net sales
 
$
487,715
  
 
$
504,006
 
 
$
2,158,541
  
 
$
2,189,938
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Cost of goods sold
 
 
421,812
  
 
 
438,719
 
 
 
1,862,089
  
 
 
1,904,463
 
Depreciation and amortization
 
 
8,030
  
 
 
8,177
 
 
 
32,394
  
 
 
31,495
 
Selling, general, and administrative expense
 
 
35,836
  
 
 
32,247
 
 
 
134,914
  
 
 
129,456
 
Insurance settlements
    
—
      
—
      
(106,332
)
    
(1,500
)
Gain on sale of plastic fittings manufacturing assets
 
 
—
  
 
 
—
 
 
 
(39,765
)
 
 
—
 
Impairment charges
 
 
—
  
 
 
—
 
 
 
4,304
  
 
 
—
 
Litigation settlements
    
—
      
(4,050
)
    
—
      
(4,050
)
Severance
 
 
—
  
 
 
3,369
 
 
 
—
  
 
 
3,369
  
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Operating income
 
 
22,037
  
 
 
25,544
 
 
 
270,937
  
 
 
126,705
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Interest expense
 
 
(1,050
)
 
 
(1,179
)
 
 
(3,990
)
 
 
(6,890
)
Other income (expense), net
 
 
127
  
 
 
(424
)
 
 
4,451
  
 
 
539
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Income before income taxes
 
 
21,114
  
 
 
23,941
 
 
 
271,398
  
 
 
120,354
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Income tax expense
 
 
(6,094
)
 
 
(7,195
)
 
 
(98,109
)
 
 
(36,681
)
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Consolidated net income
 
 
15,020
  
 
 
16,746
 
 
 
173,289
  
 
 
83,673
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Net loss (income) attributable to noncontrolling interest
 
 
364
  
 
 
(378
)
 
 
(689
)
 
 
(1,278
)
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Net income attributable to Mueller Industries, Inc.
 
$
15,384
  
 
$
16,368
 
 
$
172,600
  
 
$
82,395
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Weighted average shares for basic earnings per share
 
 
27,927
  
 
 
27,782
 
 
 
27,871
  
 
 
35,332
 
Effect of dilutive stock-based awards
 
 
380
  
 
 
324
 
 
 
371
  
 
 
414
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Adjusted weighted average shares for diluted earnings per share
 
 
28,307
  
 
 
28,106
 
 
 
28,242
  
 
 
35,746
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Basic earnings per share
 
$
0.55
  
 
$
0.59
 
 
$
6.19
  
 
$
2.33
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Diluted earnings per share
 
$
0.54
  
 
$
0.58
 
 
$
6.11
  
 
$
2.31
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Dividends per share
 
$
0.125
  
 
$
0.125
 
 
$
0.50
  
 
$
0.425
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Summary Segment Data:
 
 
    
 
 
 
 
 
 
    
 
 
 
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Net sales:
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Plumbing & Refrigeration Segment
 
$
283,197
  
 
$
293,275
 
 
$
1,225,306
  
 
$
1,238,230
 
OEM Segment
 
 
206,557
  
 
 
213,610
 
 
 
947,784
  
 
 
974,606
 
Elimination of intersegment sales
 
 
(2,039
)
 
 
(2,879
)
 
 
(14,549
)
 
 
(22,898
)
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Net sales
 
$
487,715
  
 
$
504,006
 
 
$
2,158,541
  
 
$
2,189,938
 
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Operating income:
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Plumbing & Refrigeration Segment
 
$
12,438
  
 
$
18,558
 
 
$
219,146
  
 
$
87,014
 
OEM Segment
 
 
15,432
  
 
 
12,884
 
 
 
76,631
  
 
 
67,087
 
Unallocated expenses
 
 
(5,833
)
 
 
(5,898
)
 
 
(24,840
)
 
 
(27,396
)
 
 
 
    
 
 
 
 
 
 
    
 
 
 
 
Operating income
 
$
22,037
  
 
$
25,544
 
 
$
270,937
  
 
$
126,705
 
 
 
Page 3 of 6
 
 
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands)
 
December 28, 2013
 
 
December 29, 2012
 
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
311,800
 
 
$
198,934
 
Accounts receivable, net
 
 
271,847
 
 
 
271,093
 
Inventories
 
 
251,716
 
 
 
229,434
 
Other current assets
 
 
52,809
 
 
 
47,733
 
 
 
 
  
 
 
 
 
 
Total current assets
 
 
888,172
 
 
 
747,194
 
 
 
 
  
 
 
 
 
 
Property, plant, and equipment, net
 
 
244,457
 
 
 
233,263
 
Other assets
 
 
152,097
 
 
 
123,698
 
 
 
 
  
 
 
 
 
 
 
 
$
1,284,726
 
 
$
1,104,155
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
Current portion of debt
 
$
29,083
 
 
$
27,570
 
Accounts payable
 
 
80,897
 
 
 
87,574
 
Other current liabilities
 
 
122,731
 
 
 
143,552
 
 
 
 
  
 
 
 
 
 
Total current liabilities
 
 
232,711
 
 
 
258,696
 
 
 
 
  
 
 
 
 
 
Long-term debt
 
 
206,250
 
 
 
207,300
 
Pension and postretirement liabilities
 
 
27,426
 
 
 
55,019
 
Environmental reserves
 
 
22,144
 
 
 
22,597
 
Deferred income taxes
 
 
59,478
 
 
 
20,910
 
Other noncurrent liabilities
 
 
850
 
 
 
1,667
 
 
 
 
  
 
 
 
 
 
Total liabilities
 
 
548,859
 
 
 
566,189
 
 
 
 
  
 
 
 
 
 
Total Mueller Industries, Inc. stockholders’ equity
 
 
703,405
 
 
 
506,908
 
Noncontrolling interest
 
 
32,462
 
 
 
31,058
 
 
 
 
  
 
 
 
 
 
Total equity
 
 
735,867
 
 
 
537,966
 
 
 
 
  
 
 
 
 
 
 
 
$
1,284,726
 
 
$
1,104,155
 
 
 
 
 
 
 
 
 
 
 
 
Page 4 of 6
 
 
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 
 
For the Year Ended
 
(In thousands)
 
December 28, 2013
 
 
December 29, 2012
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
 
 
Consolidated net income
 
$
173,289
  
 
$
83,673
 
Reconciliation of consolidated net income to net cash
provided by operating activities:
 
 
    
 
 
 
 
Depreciation and amortization
 
 
32,693
  
 
 
31,933
 
Stock-based compensation expense
 
 
5,704
  
 
 
6,136
 
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
 
 
(2,535
)
 
 
1,411
 
Impairment charges
 
 
4,304
  
 
 
—
 
Deferred income taxes
 
 
19,213
  
 
 
(1,284
)
Income tax benefit from exercise of stock options
 
 
(719
)
 
 
(2,528
)
Changes in assets and liabilities, net of businesses acquired:
 
 
    
 
 
 
 
Receivables
 
 
19,110
  
 
 
(22,853
)
Inventories
 
 
5,963
  
 
 
(4,834
)
Other assets
 
 
562
  
 
 
(14,985
)
Current liabilities
 
 
(14,139
)
 
 
8,368
  
Other liabilities
 
 
(1,935
)
 
 
9,345
 
Other, net
 
 
705
  
 
 
1,165
 
 
 
 
    
 
 
 
 
Net cash provided by operating activities
 
 
128,513
  
 
 
108,297
 
 
 
 
    
 
 
 
 
Cash flows from investing activities
 
 
    
 
 
 
 
Capital expenditures
 
 
(41,349
)
 
 
(56,825
)
Acquisition of businesses
 
 
(55,276
)
 
 
(11,561
)
Insurance proceeds for property and equipment
 
 
29,910
  
 
 
42,250
 
Net (deposits into) withdrawals from restricted cash balances
 
 
(1,417
)
 
 
9,243
 
Proceeds from the sales of assets
 
 
65,147
  
 
 
517
 
 
 
 
    
 
 
 
 
Net cash used in investing activities
 
 
(2,985
)
 
 
(16,376
)
 
 
 
    
 
 
 
 
Cash flows from financing activities
 
 
    
 
 
 
 
Dividends paid to stockholders of Mueller Industries, Inc.
 
 
(13,941
)
 
 
(14,891
)
Debt issuance cost
 
 
(50
)
 
 
(1,053
)
Issuance of long-term debt
 
 
—
  
 
 
200,000
 
Issuance (repayment) of debt by joint venture, net
 
 
857
  
 
 
(14,429
)
Net cash used to settle stock-based awards
 
 
(228
)
 
 
(4,181
)
Repurchase of common stock
 
 
—
  
 
 
(427,446
)
Repayments of long-term debt
 
 
(1,000
)
 
 
(149,176
)
Income tax benefit from exercise of stock options
 
 
719
  
 
 
2,528
 
 
 
 
    
 
 
 
 
Net cash used in financing activities
 
 
(13,643
)
 
 
(408,648
)
 
 
 
    
 
 
 
 
Effect of exchange rate changes on cash
 
 
981
  
 
 
1,499
 
 
 
 
    
 
 
 
 
Increase (decrease) in cash and cash equivalents
 
 
112,866
  
 
 
(315,228
)
Cash and cash equivalents at the beginning of the period
 
 
198,934
  
 
 
514,162
 
 
 
 
    
 
 
 
 
Cash and cash equivalents at the end of the period
 
$
311,800
  
 
$
198,934
 
 
 
 
 
 
 
 
 
 
 
 
Page 5 of 6
 
 
MUELLER INDUSTRIES, INC.
Reconciliation of Net Income as Reported to Pro Forma Without Unusual Items
(Unaudited)

Earnings attributable to normal operations without the impact of the following unusual items is a measurement not derived in accordance with generally accepted accounting principles (GAAP).  Excluding the unusual items 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 unusual items to net income as reported is as follows:

 
 
For the Year Ended December 28, 2013
 
 
 
  
 
 
Impact of
 
 
  
 
 
 
As
Reported
 
 
Insurance
Settlement
 
 
Gain on
Plastic Sale
 
 
  
 
 
Other
 
 
  
 
(In thousands, except per share data)
 
 
 
 
 
 
Impairments
 
 
 
Pro forma
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
Operating income
 
$
270,937
 
 
$
(106,332
)
 
$
(39,765
)
 
$
4,304
 
 
$
2,290
 
 
$
131,434
 
                                                 
Interest expense
 
 
(3,990
)
 
 
—
  
 
 
—
  
 
 
—
  
 
 
—
  
 
 
(3,990
)
Other income, net
 
 
4,451
 
 
 
—
  
 
 
—
  
 
 
—
  
 
 
(3,000
)
 
 
1,451
 
                                                 
Income before income taxes
 
 
271,398
 
 
 
(106,332
)
 
 
(39,765
)
 
 
4,304
 
 
 
(710
)
 
 
128,895
 
Income tax expense
 
 
(98,109
)
 
 
40,723
 
 
 
16,845
 
 
 
(1,719
)
 
 
481
  
 
 
(41,779
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated net income
 
 
173,289
 
 
 
(65,609
)
 
 
(22,920
)
 
 
2,585
 
 
 
(229
)
 
 
87,116
 
Net income attributable to non-controlling interest
 
 
(689
)
 
 
—
  
 
 
—
  
 
 
—
  
 
 
—
  
 
 
(689
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Mueller Industries, Inc.
 
$
172,600
 
 
$
(65,609
)
 
$
(22,920
)
 
$
2,585
 
 
$
(229
)
 
$
86,427
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per share
 
$
6.11
 
 
$
(2.32
)
 
$
(0.81
)
 
$
0.09
 
 
$
(0.01
)
 
$
3.06
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 29, 2012
 
 
 
 
 
 
 
Impact of
 
 
 
 
 
                       
(In thousands, except per share data)
 
As Reported
 
 
LIFO
Gain
 
 
Insurance Settlement
 
 
Litigation Settlement
 
 
Severance
 
 
Pro forma
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
126,705
 
 
$
(7,979
)
 
$
(1,500
)
 
$
(4,050
)
 
$
3,369
 
 
$
116,545
 
                                                 
Interest expense
 
 
(6,890
)
 
 
—
  
 
 
—
  
 
 
—
  
 
 
—
  
 
 
(6,890
)
Other income, net
 
 
539
 
 
 
—
  
 
 
—
  
 
 
—
  
 
 
—
  
 
 
539
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
 
120,354
 
 
 
(7,979
)
 
 
(1,500
)
 
 
(4,050
)
 
 
3,369
 
 
 
110,194
 
Income tax expense
 
 
(36,681
)
 
 
2,872
 
 
 
585
 
 
 
1,478
 
 
 
(1,230
)
 
 
(32,976
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated net income
 
 
83,673
 
 
 
(5,107
)
 
 
(915
)
 
 
(2,572
)
 
 
2,139
 
 
 
77,218
 
Net income attributable to non-controlling interest
 
 
(1,278
)
 
 
—
  
 
 
—
  
 
 
—
  
 
 
—
  
 
 
(1,278
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Mueller Industries, Inc.
 
$
82,395
 
 
$
(5,107
)
 
$
(915
)
 
$
(2,572
)
 
$
2,139
 
 
$
75,940
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per share
 
$
2.31
 
 
$
(0.14
)
 
$
(0.03
)
 
$
(0.07
)
 
$
0.06
 
 
$
2.12
 
 
 
Page 6 of 6