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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