Mueller Industries, Inc. Reports Fourth Quarter and Fiscal 2016 Earnings
MEMPHIS, Tenn., February 7, 2017 -- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the fourth quarter ending December 31, 2016 was $17.3 million, or 30 cents per diluted share compared with net income of $14.4 million, or 25 cents per diluted share in 2015.  Net sales for the fourth quarter were $472.2 million compared with $472.0 million in the same quarter in 2015.
On a full year basis net income was $99.7 million, or $1.74 per diluted share on net sales of $2.1 billion, compared with net income of $87.9 million, or $1.54 per diluted share on net sales of $2.1 billion for 2015.

Financial and operating highlights for the fourth quarter:
·
The average comex copper price rose 8.6 percent, or 19 cents per pound versus the same period in 2015.  This resulted in an increase in net sales during the quarter of $19.2 million from higher selling prices, which was largely offset by the impact of translating net sales of the Company's foreign operations to U.S. dollars.
·
The Company recognized a pre-tax impairment charge of $3.8 million related to certain manufacturing assets.
·
The results include a net loss of $1.2 million from Tecumseh Products, Co., an unconsolidated affiliate.
·
The Company ended the year with $351.3 million of cash on hand or $6.12 per share.
·
At year end debt to total capitalization was 19.5 percent and the current ratio was 4.1 to 1.

On January 4, 2017, the Company announced a special dividend of $8.00 per share.  The distribution, payable on March 9, 2017, will return to the Company's stockholders significant value that has accumulated from recent years' operations.

Regarding the outlook, Greg Christopher, CEO of Mueller Industries said, "As we turn the corner to 2017 we are well positioned for growth.  Of particular importance are the benefits we began to realize in the fourth quarter in our brass rod business from the completion of our multi-year modernization investment.  This investment positions us well for the recovery of the industrial markets.

He added, "The new administration seems resolute in growing the economy by increasing manufacturing jobs and rebuilding our nation's infrastructure.  This should bode well for overall growth in the U.S. GDP, and in particular should help maintain the positive momentum in the building construction markets.  On the international front, demand remained weak in the fourth quarter and the strengthening of the dollar had an adverse translation effect on our earnings.  We anticipate that conditions in our international markets will improve over time."




Mueller Industries, Inc. is an industrial manufacturer that specializes in copper and copper alloy manufacturing while also producing goods made from aluminum, steel, and plastics.  It is headquartered in Memphis, Tennessee and comprises a network of operations in the United States, Canada, Mexico, Great Britain, South Korea, and China.  Its products include tubing, fittings, valves, vessels, and related items for plumbing and HVACR related piping systems, as well as rod, forgings, extrusions, and various components for OEM applications.  Products are distributed into sectors such as building construction, appliance, defense, energy, and automotive.

*********************

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," "encourage," "anticipate," "appear," 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
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 
  
For the Quarter Ended
    
For the Year Ended
  
(In thousands, except per share data)
  
December 31,
 2016
    
December 26,
 2015
    
December 31,
 2016
    
December 26,
 2015
  
 
                        
Net sales
  
$
472,158
    
$
471,983
    
$
2,055,622
    
$
2,100,002
  
 
                                
Cost of goods sold
    
396,129
      
411,336
      
1,723,499
      
1,809,702
  
Depreciation and amortization
    
8,136
      
9,818
      
35,133
      
34,608
  
Selling, general, and administrative expense
    
34,792
      
31,866
      
137,499
      
130,358
  
Impairment charges
    
3,778
      
—
      
6,778
      
—
  
Gain on sale of assets
    
—
      
—
      
—
      
(15,376
)
Severance
    
—
      
—
      
—
      
3,442
  
 
                                
    Operating income
    
29,323
      
18,963
      
152,713
      
137,268
  
 
                                
Interest expense
    
(2,017
)
    
(1,690
)
    
(7,387
)
    
(7,667
)
Other (expense) income, net
    
(176
)
    
1,654
      
704
      
2,188
  
 
                                
    Income before income taxes
    
27,130
      
18,927
      
146,030
      
131,789
  
 
                                
Income tax expense
    
(9,174
)
    
(7,008
)
    
(48,137
)
    
(43,382
)
(Loss) income from unconsolidated affiliates, net of tax
    
(1,188
)
    
2,191
      
1,861
      
—
  
 
                                
    Consolidated net income
    
16,768
      
14,110
      
99,754
      
88,407
  
 
                                
Net loss (income) attributable to noncontrolling interests
    
554
      
325
      
(27
)
    
(543
)
 
                                
    Net income attributable to Mueller Industries, Inc.
  
$
17,322
    
$
14,435
    
$
99,727
    
$
87,864
  
 
                                
Weighted average shares for basic earnings per share
    
56,680
      
56,450
      
56,572
      
56,316
  
Effect of dilutive stock-based awards
    
620
      
537
      
597
      
652
  
 
                                
Adjusted weighted average shares for diluted earnings per share
    
57,300
      
56,987
      
57,169
      
56,968
  
 
                                
Basic earnings per share
  
$
0.31
    
$
0.26
    
$
1.76
    
$
1.56
  
 
                                
Diluted earnings per share
  
$
0.30
    
$
0.25
    
$
1.74
    
$
1.54
  
 
                                
Dividends per share
  
$
0.100
    
$
0.075
    
$
0.375
    
$
0.300
  
 
                                
Summary Segment Data:
                                
 
                                
Net sales:
                                
    Piping Systems
  
$
320,480
    
$
327,565
    
$
1,429,589
    
$
1,436,689
  
    Industrial Metals
    
127,452
      
131,731
      
521,060
      
567,467
  
    Climate
    
27,690
      
24,924
      
119,758
      
110,727
  
    Elimination of intersegment sales
    
(3,464
)
    
(12,237
)
    
(14,785
)
    
(14,881
)
 
                                
Net sales
  
$
472,158
    
$
471,983
    
$
2,055,622
    
$
2,100,002
  
 
                                
Operating income:
                                
    Piping Systems
  
$
15,630
    
$
18,316
    
$
103,886
    
$
113,232
  
    Industrial Metals
    
22,383
      
8,880
      
78,168
      
57,442
  
    Climate
    
3,193
      
2,501
      
17,733
      
12,459
  
    Unallocated expenses
    
(11,883
)
    
(10,734
)
    
(47,074
)
    
(45,865
)
 
                                
Operating income
  
$
29,323
    
$
18,963
    
$
152,713
    
$
137,268
  


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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(In thousands)
December 31, 2016
  
December 26, 2015
  
ASSETS
        
Cash and cash equivalents
 
  
$
351,317
  
 
  
$
274,844
  
Accounts receivable, net
      
256,291
        
251,571
  
Inventories
      
242,013
        
239,378
  
Other current assets
      
44,702
        
34,608
  
 
                    
    Total current assets
      
894,323
        
800,401
  
 
                    
Property, plant, and equipment, net
      
295,231
        
280,224
  
Other assets
      
257,922
        
258,176
  
 
                    
 
 
  
$
1,447,476
  
 
  
$
1,338,801
  
 
                    
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Current portion of debt
 
  
$
13,655
  
 
  
$
11,760
  
Accounts payable
      
103,175
        
88,051
  
Other current liabilities
      
102,162
        
109,618
  
 
                    
    Total current liabilities
      
218,992
        
209,429
  
 
                    
Long-term debt
      
213,709
        
204,250
  
Pension and postretirement liabilities
      
31,273
        
34,876
  
Environmental reserves
      
21,208
        
20,943
  
Deferred income taxes
      
19,573
        
7,161
  
Other noncurrent liabilities
      
6,284
        
2,440
  
 
                    
    Total liabilities
      
511,039
        
479,099
  
 
                    
Total Mueller Industries, Inc. stockholders' equity
      
898,684
        
827,285
  
Noncontrolling interests
      
37,753
        
32,417
  
 
                    
    Total equity
      
936,437
        
859,702
  
 
                    
 
 
  
$
1,447,476
  
 
  
$
1,338,801
  
 
                    

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

 
  
For the Year Ended
  
 (In thousands)
  
December 31, 2016
    
December 26, 2015
  
 
      
Cash flows from operating activities
            
  Consolidated net income
  
$
99,754
    
$
88,407
  
  Reconciliation of consolidated net income to net cash
    provided by operating activities:
                
      Depreciation and amortization
    
35,702
      
35,040
  
      Stock-based compensation expense
    
6,387
      
6,244
  
      Equity in earnings of unconsolidated affiliates
    
(1,861
)
    
—
  
      Gain on disposal of assets
    
(651
)
    
(14,815
)
      Deferred income taxes
    
6,998
      
(15,818
)
      Income tax benefit from exercise of stock options
    
—
      
(972
)
      Impairment charges
    
6,778
      
—
  
      Changes in assets and liabilities, net of businesses acquired:
                
        Receivables
    
(16,552
)
    
51,530
  
        Inventories
    
6,662
      
41,086
  
        Other assets
    
5,808
      
12,449
  
        Current liabilities
    
5,646
      
(45,585
)
        Other liabilities
    
1,518
      
436
  
        Other, net
    
1,588
      
1,607
  
 
                
Net cash provided by operating activities
    
157,777
      
159,609
  
 
                
Cash flows from investing activities
                
  Capital expenditures
    
(37,497
)
    
(28,834
)
  Acquisition of businesses, net of cash acquired
    
(20,533
)
    
(105,944
)
  Proceeds from sale of assets, net of cash transferred
    
10,304
      
5,538
  
  Investment in unconsolidated affiliates
    
—
      
(65,900
)
  Net (deposits into) withdrawals from restricted cash balances
    
(5,331
)
    
4,333
  
 
                
Net cash used in investing activities
    
(53,057
)
    
(190,807
)
 
                
Cash flows from financing activities
                
  Dividends paid to stockholders of Mueller Industries, Inc.
    
(21,224
)
    
(16,903
)
  Dividends paid to noncontrolling interests
    
(3,765
)
    
—
  
  Issuance (repayment) of debt by joint venture, net
    
2,265
      
(23,567
)
  Net cash used to settle stock-based awards
    
(1,306
)
    
(760
)
  Issuance of long-term debt
    
3,500
      
—
  
  Repayments of long-term debt
    
(1,074
)
    
(1,000
)
  Debt issuance costs
    
(957
)
    
—
  
  Income tax benefit from exercise of stock options
    
—
      
972
  
 
                
Net cash used in financing activities
    
(22,561
)
    
(41,258
)
 
                
Effect of exchange rate changes on cash
    
(5,686
)
    
(4,834
)
 
                
Increase (decrease) in cash and cash equivalents
    
76,473
      
(77,290
)
Cash and cash equivalents at the beginning of the period
    
274,844
      
352,134
  
 
                
Cash and cash equivalents at the end of the period
  
$
351,317
    
$
274,844
  
 
                



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