Exhibit 99.1
 
Mueller Industries, Inc. Reports Second Quarter 2014 Earnings
 
MEMPHIS, Tenn., July 22, 2014 -- Mueller Industries, Inc. (NYSE: MLI) announced today net income of $35.0 million, or 62 cents per diluted share, for the second quarter of 2014.  This compares with net income from normal operations in the second quarter of 2013 of $25.5 million, or 45 cents per diluted share.  During the second quarter of 2013, the Company also recognized an after-tax gain of $65.6 million, or $1.17 per diluted share, on the settlement of an insurance claim.  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 second quarter were $649.7 million compared with $582.3 million for the same quarter of the prior year representing an increase of 11.6 percent.  Sales were positively impacted by a 15.9 percent increase in unit volumes, partially offset by a 4.6 percent reduction in copper prices in the second quarter of 2014 compared with the same period of the prior year.  Copper prices averaged $3.10 per pound in the second quarter of 2014 compared with $3.25 per pound in the same period of 2013.
 
Financial highlights for the second quarter of 2014:
-  
Acquired businesses contributed 10.8 percent of the overall 15.9 percent increase in unit volumes.
 
-  
The effective tax rate for the quarter reflects a reduction in valuation allowances previously recorded against certain state tax credits.
 
-  
Results include $2.4 million of severance and other charges related to the U.K. copper tube business acquired in the first quarter of 2014.
 
-  
Quarter end cash totaled $242.2 million equal to $4.27 per share.
 
-  
Stockholders’ equity was $760.8 million, which equates to a book value per share of $13.42.
 
-  
Debt to total capitalization ratio was 25.1 percent and the current ratio was 3.5 to 1.
 
 
Regarding the outlook, Greg Christopher, CEO said, “Despite the lack of supportive market conditions, we are pleased with how our businesses continue to improve.  Although there are fluctuations in building construction metrics the overall direction seems to be improving and we anticipate the same will continue into the second half of the year.”
 
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,” 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 Six Months Ended
  
(In thousands, except per share data)
  
June 28,
2014
    
June 29,
2013
    
June 28,
2014
    
June 29,
2013
  
                         
Net sales
  
$
649,691
    
$
582,282
    
$
1,224,065
    
$
1,141,972
  
                                 
Cost of goods sold
    
557,775
      
501,125
      
1,053,552
      
983,975
  
Depreciation and amortization
    
8,592
      
8,328
      
16,699
      
16,482
  
Selling, general, and administrative expense
    
35,120
      
34,814
      
67,303
      
66,157
  
Insurance settlement
    
—
      
(106,332
)
    
—
      
(106,332
)
                                 
Operating income
    
48,204
      
144,347
      
86,511
      
181,690
  
Interest expense
    
(1,457
)
    
(1,101
)
    
(2,483
)
    
(1,697
)
Other income, net
    
127
      
319
      
215
      
3,482
  
                                 
Income before income taxes
    
46,874
      
143,565
      
84,243
      
183,475
  
Income tax expense
    
(11,665
)
    
(51,723
)
    
(24,080
)
    
(65,199
)
                                 
Consolidated net income
    
35,209
      
91,842
      
60,163
      
118,276
  
Net income attributable to
  noncontrolling interest
    
(164
)
    
(692
)
    
(412
)
    
(924
)
                                 
Net income attributable to
  Mueller Industries, Inc.
  
$
35,045
    
$
91,150
    
$
59,751
    
$
117,352
  
                                 
Weighted average shares for basic
  earnings per share
    
55,973
      
55,681
      
55,946
      
55,663
  
Effect of dilutive stock-based awards
    
747
      
740
      
800
      
744
  
                                 
Adjusted weighted average shares for diluted
  earnings per share
    
56,720
      
56,421
      
56,746
      
56,407
  
                                 
Basic earnings per share
  
$
0.63
    
$
1.64
    
$
1.07
    
$
2.11
  
                                 
Diluted earnings per share
  
$
0.62
    
$
1.62
    
$
1.05
    
$
2.08
  
                                 
Dividends per share
  
$
0.075
    
$
0.0625
    
$
0.150
    
$
0.125
  
                                 
Summary Segment Data:
                                
                                 
Net sales:
                                
    Plumbing & Refrigeration Segment
  
$
397,190
    
$
328,673
    
$
735,217
    
$
640,487
  
    OEM Segment
    
255,409
      
257,044
      
495,439
      
510,831
  
    Elimination of intersegment sales
    
(2,908
)
    
(3,435
)
    
(6,591
)
    
(9,346
)
                                 
Net sales
  
$
649,691
    
$
582,282
    
$
1,224,065
    
$
1,141,972
  
                                 
Operating income:
                                
    Plumbing & Refrigeration Segment
  
$
32,330
    
$
129,810
    
$
56,215
    
$
152,437
  
    OEM Segment
    
23,216
      
20,939
      
44,502
      
41,262
  
    Unallocated expenses
    
(7,342
)
    
(6,402
)
    
(14,206
)
    
(12,009
)
                                 
Operating income
  
$
48,204
    
$
144,347
    
$
86,511
    
$
181,690
  
 
 
 
 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(In thousands)
  
June 28,
2014
    
December 28,
 2013
  
ASSETS
            
Cash and cash equivalents
  
$
242,199
    
$
311,800
  
Accounts receivable, net
    
367,299
      
271,847
  
Inventories
    
291,138
      
251,716
  
Other current assets
    
45,410
      
39,354
  
                 
    Total current assets
    
946,046
      
874,717
  
                 
Property, plant, and equipment, net
    
245,441
      
244,457
  
Other assets
    
158,371
      
128,593
  
                 
   
$
1,349,858
    
$
1,247,767
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
            
Current portion of debt
  
$
60,328
    
$
29,083
  
Accounts payable
    
101,671
      
80,897
  
Other current liabilities
    
106,154
      
109,276
  
                 
    Total current liabilities
    
268,153
      
219,256
  
                 
Long-term debt
    
205,750
      
206,250
  
Pension and postretirement liabilities
    
26,818
      
27,426
  
Environmental reserves
    
21,661
      
22,144
  
Deferred income taxes
    
33,226
      
35,975
  
Other noncurrent liabilities
    
1,306
      
849
  
                 
    Total liabilities
    
556,914
      
511,900
  
                 
Total Mueller Industries, Inc. stockholders’ equity
    
760,823
      
703,405
  
Noncontrolling interest
    
32,121
      
32,462
  
                 
    Total equity
    
792,944
      
735,867
  
                 
   
$
1,349,858
    
$
1,247,767
  
                 
 
 
 
 
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
For the Six Months Ended
  
 (In thousands)
  
June 28,
2014
    
June 29,
2013
  
         
Cash flows from operating activities
                
Consolidated net income
  
$
60,163
    
$
118,276
  
Reconciliation of consolidated net income to net cash (used in) provided by operating activities:
                
      Depreciation and amortization
    
16,840
      
16,649
  
      Stock-based compensation expense
    
3,526
      
3,326
  
      Insurance settlement
    
—
      
(106,332
)
      Insurance proceeds – noncapital related
    
—
      
32,395
  
      Gain on disposal of properties
    
(1,225
)
    
(2,984
)
      Deferred income taxes
    
(6,523
)
    
12,468
  
      Income tax benefit from exercise of stock options
    
(316
)
    
(95
)
      Changes in assets and liabilities, net of business acquired
                
        Receivables
    
(100,413
)
    
(35,095
)
        Inventories
    
(20,619
)
    
4,705
  
        Other assets
    
(8,886
)
    
(306
)
        Current liabilities
    
7,373
      
6,150
  
        Other liabilities
    
(893
)
    
(423
)
        Other, net
    
92
      
420
  
                 
Net cash (used in) provided by operating activities
    
(50,881
)
    
49,154
  
                 
Cash flows from investing activities
                
Capital expenditures
    
(18,833
)
    
(21,687
)
Business acquired, net of cash acquired
    
(30,137
)
    
—
  
Insurance proceeds for property and equipment
    
—
      
29,910
  
Net withdrawals from (deposits into) restricted cash balances
    
1,815
      
(4,721
)
Proceeds from the sales of properties
    
4,874
      
3,016
  
                 
Net cash (used in) provided by investing activities
    
(42,281
)
    
6,518
  
                 
Cash flows from financing activities
                
Repayments of long-term debt
    
(500
)
    
(500
)
Dividends paid to stockholders of Mueller Industries, Inc.
    
(8,394
)
    
(6,960
)
Debt issuance cost
    
—
      
(50
)
Issuance of debt
    
22,635
      
—
  
Issuance (repayment) of debt by joint venture, net
    
8,903
      
15,544
  
Net cash received to settle stock-based awards
    
296
      
260
  
Repurchase of common stock
    
(58
)
    
—
  
Income tax benefit from exercise of stock options
    
316
      
95
  
                 
Net cash provided by financing activities
    
23,198
      
8,389
  
                 
Effect of exchange rate changes on cash
    
363
      
(1,328
)
                 
(Decrease) increase in cash and cash equivalents
    
(69,601
)
    
62,733
  
Cash and cash equivalents at the beginning of the period
    
311,800
      
198,934
  
                 
Cash and cash equivalents at the end of the period
  
$
242,199
    
$
261,667
  
                 
 
 
 
 
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MUELLER INDUSTRIES, INC.
Reconciliation of Net Income as Reported to Pro forma Without Insurance Settlement
(Unaudited)

Earnings attributable to normal operations without the insurance settlement is a measurement not derived in accordance with generally accepted accounting principles (GAAP).  Excluding the insurance settlement is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business.  The insurance settlement was related to a 2011 claim at the Company's Wynne, Arkansas, manufacturing operations.  Reconciliation of earnings attributable to normal operations without the insurance settlement to net income as reported is as follows:

   
For the Quarter Ended
June 29, 2013
  
(In thousands, except per share data)
  
As
Reported
    
Impact of
Insurance
Settlement
    
Pro forma
Without
Insurance
Settlement
  
                         
Operating income
  
$
144,347
    
$
106,332
    
$
38,015
  
                         
Interest expense
    
(1,101
)
    
—
      
(1,101
)
Other income, net
    
319
      
—
      
319
  
                         
Income before income taxes
    
143,565
      
106,332
      
37,233
  
Income tax expense
    
(51,723
)
    
(40,723
)
    
(11,000
)
                         
Consolidated net income
    
91,842
      
65,609
      
26,233
  
Net income attributable to noncontrolling interest
    
(692
)
    
—
      
(692
)
                         
Net income attributable to Mueller Industries, Inc.
  
$
91,150
    
$
65,609
    
$
25,541
  
                         
Diluted earnings per share
  
$
1.62
    
$
1.17
    
$
0.45
  


 

 
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