Mueller Industries, Inc. Reports First Quarter 2014 Results
 
MEMPHIS, Tenn., April 22, 2014 -- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the first quarter of 2014 was $24.7 million, or 44 cents per diluted share, compared with net income of $26.2 million, or 46 cents per diluted share, for the same period of 2013.  Diluted earnings per share for 2013 have been adjusted to reflect a 2-for-1 stock split that was effected during the first quarter of 2014.

Net sales for the first quarter of 2014 were $574.4 million compared with $559.7 million for the same quarter of the prior year.  The increase in net sales was principally due to an overall increase in unit volumes of 8.6 percent, of which 6.4 percent was contributed by acquired businesses, partially offset by lower copper costs that impacted the selling prices of the Company’s products.  Copper prices decreased 10 percent from the prior year averaging $3.24 per pound in the first quarter of 2014 compared with $3.60 per pound in the first quarter of 2013.

In addition, on February 28, 2014 the Company completed the previously announced acquisition of Yorkshire Copper Tube for approximately $30.1 million.

Regarding the outlook for 2014, Greg Christopher, CEO, said, “Construction activity got off to a slow start in 2014, principally due to this year’s harsh winter weather.  We anticipate better business conditions as spring arrives.”

He also added, “The acquisitions of Yorkshire Copper Tube and Howell Metal Company contributed favorably to the growth in unit volume, but as is typical with acquisitions of this nature, they follow a pattern where substantial changes occur that are costly.  We are happy with our progress and we expect both businesses to be accretive to our earnings by year end.”

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: (i) the construction of new homes; (ii) the improvement and reconditioning of existing homes and structures; and (iii) the commercial construction market which 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 “pro forma,” “outlook,” “estimate,” “project,” “intend,” “expect,” “believe,” “target,” 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
  
(In thousands, except per share data)
  
March 29, 2014
    
March 30, 2013
  
             
Net sales
  
$
574,374
    
$
559,690
  
                 
Cost of goods sold
    
495,777
      
482,850
  
Depreciation and amortization
    
8,107
      
8,154
  
Selling, general, and administrative expense
    
32,183
      
31,343
  
                 
     Operating income
    
38,307
      
37,343
  
                 
Interest expense
    
(1,026
)
    
(596
)
Other income, net
    
88
      
3,163
  
                 
     Income before income taxes
    
37,369
      
39,910
  
                 
Income tax expense
    
(12,415
)
    
(13,476
)
                 
     Consolidated net income
    
24,954
      
26,434
  
                 
Net income attributable to noncontrolling interest
    
(248
)
    
(232
)
                 
     Net income attributable to Mueller Industries, Inc.
  
$
24,706
    
$
26,202
  
                 
Weighted average shares for basic earnings per share
    
55,918
      
55,645
  
Effect of dilutive stock-based awards
    
853
      
747
  
                 
Adjusted weighted average shares for diluted earnings per share
    
56,771
      
56,392
  
                 
Basic earnings per share
  
$
0.44
    
$
0.47
  
                 
Diluted earnings per share
  
$
0.44
    
$
0.46
  
                 
Dividends per share
  
$
0.075
    
$
0.0625
  
                 
Summary Segment Data:
                
Net sales:
                
   Plumbing & Refrigeration Segment
  
$
338,027
    
$
311,814
  
   OEM Segment
    
240,030
      
253,787
  
   Elimination of intersegment sales
    
(3,683
)
    
(5,911
)
                 
Net sales
  
$
574,374
    
$
559,690
  
                 
Operating income:
                
   Plumbing & Refrigeration Segment
  
$
23,885
    
$
22,625
  
   OEM Segment
    
21,286
      
20,323
  
   Unallocated expenses
    
(6,864
)
    
(5,605
)
                 
Operating income
  
$
38,307
    
$
37,343
  
                 
 
 

 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


(In thousands)
  
March 29, 2014
    
December 28, 2013
  
ASSETS
            
Cash and cash equivalents
  
$
233,475
    
$
311,800
  
Accounts receivable, net
    
319,902
      
271,847
  
Inventories
    
279,465
      
251,716
  
Other current assets
    
52,371
      
39,354
  
                 
     Total current assets
    
885,213
      
874,717
  
                 
Property, plant, and equipment, net
    
243,905
      
244,457
  
Other assets
    
153,711
      
128,593
  
                 
   
$
1,282,829
    
$
1,247,767
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
            
Current portion of debt
  
$
32,085
    
$
29,083
  
Accounts payable
    
109,452
      
80,897
  
Other current liabilities
    
93,894
      
109,276
  
                 
     Total current liabilities
    
235,431
      
219,256
  
                 
Long-term debt
    
206,000
      
206,250
  
Pension and postretirement liabilities
    
26,554
      
27,426
  
Environmental reserves
    
22,005
      
22,144
  
Deferred income taxes
    
34,039
      
35,975
  
Other noncurrent liabilities
    
618
      
849
  
                 
     Total liabilities
    
524,647
      
511,900
  
                 
Total Mueller Industries, Inc. stockholders’ equity
    
725,469
      
703,405
  
Noncontrolling interest
    
32,713
      
32,462
  
                 
     Total equity
    
758,182
      
735,867
  
                 
   
$
1,282,829
    
$
1,247,767
  
                 
   

 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
For the Quarter Ended
  
 (In thousands)
  
March 29, 2014
    
March 30, 2013
  
         
Cash flows from operating activities
                
Consolidated net income
  
$
24,954
    
$
26,434
  
Reconciliation of consolidated net income to net cash used in operating activities:
                
     Depreciation and amortization
    
8,165
      
8,250
  
     Stock-based compensation expense
    
1,194
      
946
  
     Gain on disposal of properties
    
(1,413
)
    
(3,003
)
     Deferred income taxes
    
(1,484
)
    
(1,313
)
     Income tax benefit from exercise of stock options
    
(156
)
    
(30
)
     Changes in assets and liabilities, net of business acquired:
                
          Receivables
    
(49,482
)
    
(42,680
)
          Inventories
    
(10,055
)
    
212
  
          Other assets
    
(14,467
)
    
2,585
  
          Current liabilities
    
(1,337
)
    
(5,365
)
          Other liabilities
    
(989
)
    
(753
)
          Other, net
    
398
      
(198
)
                 
Net cash used in operating activities
    
(44,672
)
    
(14,915
)
                 
Cash flows from investing activities
                
Business acquired
    
(30,137
)
    
—
  
Capital expenditures
    
(9,199
)
    
(9,835
)
Net withdrawals from (deposits into) restricted cash balances
    
1,771
      
(14,800
)
Proceeds from the sales of properties
    
4,833
      
3,002
  
                 
Net cash used in investing activities
    
(32,732
)
    
(21,633
)
                 
Cash flows from financing activities
                
Dividends paid to stockholders of Mueller Industries, Inc.
    
(4,196
)
    
(3,479
)
Debt issuance cost
    
—
      
(50
)
(Repayment) issuance of debt by joint venture, net
    
(1,407
)
    
26,060
  
Repayment of long-term debt
    
(250
)
    
(250
)
Issuance of debt
    
4,373
      
—
  
Net cash received to settle stock-based awards
    
224
      
65
  
Income tax benefit from exercise of stock options
    
156
      
30
  
                 
Net cash (used in) provided by financing activities
    
(1,100
)
    
22,376
  
                 
Effect of exchange rate changes on cash
    
179
      
(896
)
                 
Decrease in cash and cash equivalents
    
(78,325
)
    
(15,068
)
Cash and cash equivalents at the beginning of the period
    
311,800
      
198,934
  
                 
Cash and cash equivalents at the end of the period
  
$
233,475
    
$
183,866
  
                 

 
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