1994
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended September 24, 1994 Commissions file number 1-569
MUELLER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 25-0790410
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2959 N. ROCK ROAD
WICHITA, KANSAS 67226-1191
(Address of principal executive offices)
Registrant's telephone number, including area code: (316) 636-6300
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $ 0.01 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes /X/ No / /
The number of shares of the Registrant's common stock outstanding as of
October 10, 1994 was 8,697,530.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes /X/ No / /
MUELLER INDUSTRIES, INC.
FORM 10-Q
For the Period Ended September 24, 1994
INDEX
Part I. Financial Information Page
Item 1. Financial Statements (Unaudited)
a.) Consolidated Statements of Income
for the nine-months and quarters ended
September 24, 1994 and September 25, 1993 3
b.) Consolidated Balance Sheets
as of September 24, 1994 and December 25, 1993 4
c.) Consolidated Statements of Cash Flows
for the nine-months ended September 24, 1994
and September 25, 1993 6
d.) Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II. Other Information
Item 5. Other information 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share data)
For the Quarter Ended For the Nine-months Ended
Sep. 24, Sep. 25, Sep. 24, Sep. 25,
1994 1993 1994 1993
Net sales $137,975 $122,106 $395,363 $380,464
Cost of goods sold 113,253 96,329 325,483 308,008
Depreciation, depletion, and
amortization 3,227 4,846 9,102 11,063
Selling, general, and
administrative expense 10,497 11,427 32,411 34,061
------- ------- ------- -------
Operating income 10,998 9,504 28,367 27,332
Interest expense (1,988) (1,434) (5,300) (4,379)
Environmental reserves - - (412) -
Unusual items - - (1,406) (637)
Other income, net 3,023 940 6,566 2,388
------- ------- ------- -------
Income before income taxes 12,033 9,010 27,815 24,704
Current income tax expense (3,221) (825) (5,342) (2,573)
Deferred income tax expense (294) (2,550) (3,995) (6,971)
------- ------- ------- -------
Total income tax expense (3,515) (3,375) (9,337) (9,544)
------- ------- ------- -------
Net income $ 8,518 $ 5,635 $ 18,478 $ 15,160
======= ======= ======= =======
Net income per share:
Primary:
Average shares outstanding 9,499 10,473 10,036 10,437
Net income $ .90 $ .54 $ 1.84 $ 1.45
======= ======= ======= =======
Fully diluted:
Average shares outstanding 9,515 10,490 10,039 10,493
Net income $ .90 $ .54 $ 1.84 $ 1.44
======= ======= ======= =======
See accompanying notes to consolidated financial statements.
MUELLER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
Sep. 24, 1994 Dec. 25, 1993
Assets
Current assets:
Cash and cash equivalents $ 39,832 $ 77,336
Accounts receivable, less allowance
for doubtful accounts of $3,594 in
1994 and $3,495 in 1993 69,303 59,197
Inventories 64,656 53,118
Current deferred income taxes 2,007 3,242
Other current assets 2,706 1,518
------- -------
Total current assets 178,504 194,411
Property, plant and equipment, net 173,869 154,403
Deferred income taxes 27,778 12,751
Other assets 48,233 8,178
------- -------
$ 428,384 $ 369,743
======= =======
See accompanying notes to consolidated financial statements.
MUELLER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
Sep. 24, 1994 Dec. 25, 1993
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 17,817 $ 8,391
Accounts payable 22,025 15,637
Accrued wages and other employee costs 13,277 11,787
Restructuring reserves 4,250 5,305
Current deferred income taxes 446 446
Other current liabilities 13,766 9,340
------- -------
Total current liabilities 71,581 50,906
Long-term debt 83,657 54,320
Pension and post retirement liabilities 18,267 18,834
Deferred income taxes 3,678 3,810
Other noncurrent liabilities 17,928 19,759
------- -------
Total liabilities 195,111 147,629
Stockholders' equity:
Preferred stock-shares authorized
5,000,000; none outstanding - -
Common stock - $.01 par value; shares
authorized 20,000,000; issued and
outstanding 10,000,000 100 100
Paid-in capital, common 254,275 236,406
Retained earnings (accumulated deficit)
Since January 1, 1991 12,539 (5,939)
Cumulative translation adjustment (2,048) (1,944)
Treasury common stock at cost,
1,302,470 shares in 1994 and 416,807
shares in 1993 (31,593) (6,509)
------- -------
Total stockholders' equity 233,273 222,114
Commitments and contingencies (Note 5) - -
------- -------
$ 428,384 $ 369,743
======= =======
See accompanying notes to consolidated financial statements.
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Nine-months Ended
Sep. 24, 1994 Sep. 25, 1993
Cash flows from operating activities
Net income $ 18,478 $ 15,160
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for unusual items 1,406 -
Depreciation, depletion and
amortization of intangibles 8,509 8,344
Amortization of deferred preparation costs 593 2,719
Provision for doubtful accounts receivable 146 -
Deferred income taxes 3,995 6,971
Gain on disposal of properties (2,804) (246)
Changes in assets and liabilities:
Receivables (10,252) (1,942)
Inventories (11,538) 10,071
Other assets (1,344) 2,323
Current liabilities 10,107 (10,921)
Other liabilities (2,662) (776)
Other, net 291 69
------- -------
Net cash provided by operating activities 14,925 31,772
------- -------
Cash flows from investing activities
Capital expenditures (30,161) (7,595)
Business acquired (temporarily included
in other assets) (12,964) -
Proceeds from sales of properties 4,759 2,021
Escrowed IRB proceeds included
in other assets (27,695) -
------- -------
Net cash used by investing activities (66,061) (5,574)
------- -------
Cash flows from financing activities
Repayments of long-term debt (6,581) (4,585)
Acquisition of treasury stock (25,897) -
Issuance of long-term debt 45,344 386
Proceeds from issuance of treasury stock 766 494
------- -------
Net cash provided (used) by financing activities 13,632 (3,705)
------- -------
Increase (decrease) in cash and cash equivalents (37,504) 22,493
Cash and cash equivalents at the
beginning of the period 77,336 44,459
------- -------
Cash and cash equivalents at the
end of the period $ 39,832 $ 66,952
======= =======
See accompanying notes to consolidated financial statements.
MUELLER INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
General
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Results of operations for the
interim periods presented are not necessarily indicative of results which may
be expected for any other interim period or for the year as a whole. This
quarterly report on Form 10-Q should be read in conjunction with the Company's
Annual Report on Form 10-K, including the annual financial statements
incorporated therein by reference.
The accompanying unaudited interim financial statements include all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented. Certain amounts
in the 1993 financial statements have been reclassified to conform with
current period presentation.
Note 1 - Accounting Change - Inventory Method
Inventories are valued at the lower-of-cost-or-market on a last-in, first-out
(LIFO) basis in 1994 and a first-in, first-out (FIFO) basis in 1993 as
follows:
September 24, 1994 December 25, 1993
Raw materials and supplies $ 16,680 $ 5,704
Work-in-progress 14,455 16,501
Finished goods 33,521 30,913
------- -------
Total $ 64,656 $ 53,118
======= =======
During the third quarter of 1994, the Company changed its method of valuing
the material component of its copper tube and fittings inventories from the
FIFO method to the LIFO method. This change in accounting principle was
applied retroactively to the beginning of fiscal 1994. Management believes
the LIFO method results in a better matching of current costs with current
revenues. Additionally, the LIFO method is widely used within the copper tube
and fittings industry. This change reduced net income for the three and nine
months ended September 24, 1994 by $3.4 million (or 36 cents per share), and
$6.4 million (or 64 cents per share), respectively.
The effect of the change on the first and second quarters of 1994 follows:
First Quarter Second Quarter
Gross profit (1) as
previously reported $ 23,339 $ 26,536
Adjustment for adoption of LIFO (2,312) (2,405)
------- -------
Gross profit restated $ 21,027 $ 24,131
======= =======
Net income as previously reported $ 5,637 $ 7,300
Adjustment for adoption of LIFO (1,455) (1,522)
------- -------
Net income restated $ 4,182 $ 5,778
======= =======
Net income per share as
previously reported $ 0.54 $ 0.72
Adjustment for adoption of LIFO (.14) (.15)
------- -------
Net income per share restated $ .40 $ .57
======= =======
(1) Gross profit is net sales less cost of goods sold, which excludes
depreciation, depletion, and amortization.
The cumulative effect of this accounting change and the pro forma effects on
prior years' earnings have not been included because such effects are not
reasonably determinable.
At September 24, 1994, $21.8 million of inventories were valued using the LIFO
method. Approximate replacement cost of inventories valued using the LIFO
method totaled $31.4 million at September 24, 1994.
Note 2 - Income Taxes
As discussed more fully in Note 6 of Notes to Consolidated Financial
Statements included in the Company's 1993 Annual Report, the Company has
substantial Net Operating Loss Carryforwards (NOLs). Use of these NOLs is
generally limited to an annual amount of $14.4 million by Section 382 of the
Internal Revenue Code of 1986, as amended (the Code), as a result of the
"change in ownership" that occurred on December 28, 1990. Section 382
limitations are, among other things, based upon the Company's value and
certain statutory interest rates in effect at the time a "change in ownership"
occurs. Based on information available to the Company, a "change of
ownership" occurred in June, 1994. Nevertheless, the annual limitation of
$14.4 million will remain available under Section 382. A future "change in
ownership" could result in further limitations under certain circumstances.
The Internal Revenue Service (IRS) audit for 1992 and prior years was
concluded in the third quarter of 1994 and resulted in no material changes.
Following the conclusion of that audit, in September of 1994, the Company
entered into a Closing Agreement with the IRS. This agreement is a definitive
determination on certain tax attributes, including NOLs. Following execution
of this agreement, the Company revised its estimates with respect to financial
statement recognition of these tax attributes. In the third quarter, the
Company recognized $51.2 million of these tax attributes, which resulted in a
tax effected direct addition to paid-in capital of $17.9 million. As
additional NOLs are utilized, the Company expects to recognize additional tax
attributes over the next several years. The tax effect of future recognition
of the remaining approximately $47.8 million of tax attributes will reduce the
deferred income tax provision in the periods recognized.
Note 3 - Earnings Per Common Share
Primary earnings per common share are based upon the weighted average number
of common and common equivalent shares outstanding during the period. Fully
diluted earnings per share are based upon the weighted average number of
common shares outstanding plus the dilutive effects of all outstanding stock
options.
Note 4 - Long-Term Debt
On December 28, 1993, the Company, through a wholly owned subsidiary, issued
$20.0 million of 6.95% taxable Industrial Development Revenue Bonds due
December 15, 2000 (the 1993 Series IRBs). The 1993 Series IRBs are due in
quarterly installments of $0.7 million plus interest beginning March 15, 1994
through December 15, 2000. Proceeds of the 1993 Series IRBs will be used to
fund a modernization project at the Company's Fulton, Mississippi facility.
On June 28, 1994, the Company entered into agreement with a syndicate of six
banks to provide for (i) an unsecured line-of-credit facility (Credit
Facility) and (ii) the issuance of unsecured taxable Industrial Revenue Bonds
(the 1994 Series IRBs).
The Credit Facility provides availability of up to $30 million which expires
on June 30, 1996, but each year may be extended for up to 12 months.
Borrowings under the Credit Facility bear interest, at the Company's option,
at (i) prime rate less 1/2 of one percent, (ii) LIBOR plus .8%, (iii)
certificate of deposit rate plus 1.35%, or (iv) Federal Funds Rate plus 1.8%.
An annual commitment fee of 1/4 of one percent per annum on the unused portion
of the Credit Facility is payable quarterly. Currently, the Company has no
outstanding borrowings under the Credit Facility. Availability of funds under
the Credit Facility is reduced by the amount of certain outstanding letters of
credit, which currently total approximately $3.5 million.
On June 28, 1994, the Company, through a wholly owned subsidiary, issued an
aggregate of $18.0 million of the 1994 Series IRBs which bear interest at
8.825%. The 1994 Series IRBs are due in quarterly installments of $0.6
million plus interest beginning September, 1994 through June, 2001. Proceeds
of the 1994 Series IRBs will be used to fund a new high volume copper fittings
plant that will be located adjacent to the Company's existing copper tube mill
in Fulton, Mississippi.
Borrowings under the above agreements require the Company, among other things,
to maintain certain minimum levels of net worth and meet certain minimum
financial ratios. The Company is in compliance with all covenants.
Note 5 - Commitments and Contingencies
The Company is subject to normal environmental standards imposed by federal,
state and local environmental laws and regulations. Management believes that
the outcome of pending environmental matters will not materially affect the
overall financial position of the Company.
In addition, the Company is involved in certain litigation as either plaintiff
or defendant as a result of claims that arise in the ordinary course of
business which management believes will not have a material effect on the
Company's financial condition.
Purchase Commitments
For three major projects, the Company has committed approximately $55.0
million for capital expenditures to (i) modernize the copper tube mill in
Fulton, Mississippi, (ii) modernize the brass rod mill in Port Huron,
Michigan, and (iii) construct a high volume copper fittings plant in Fulton,
Mississippi. These approved major projects should become operational in the
latter half of 1995.
Canco Litigation Settlement
On March 25, 1994, the Company's Canco Oil & Gas Ltd. (Canco) subsidiary
settled all litigation against the Government of Saskatchewan and Scurry
Rainbow Oil Limited in which Canco asserted, among other things, that its
royalty interests continued against mineral titles transferred to the
government as well as other expropriated properties. The Company recognized a
gain of approximately $0.6 million as a result of the settlement.
Note 6 - Stockholders' Equity
On June 3, 1994, the Company purchased 924,875 shares of its common stock, for
an aggregate purchase price of approximately $25.9 million, from the Quantum
Fund N.V. These shares were placed in treasury and may be used for general
Corporate purposes, such as requirements for future exercises of options under
various option plans.
At the Company's Annual Meeting of Stockholders on May 12, 1994, the
stockholders approved the adoption of two stock option plans, the 1994 Stock
Option Plan and the 1994 Non-Employee Director Stock Option Plan. Under the
1994 Stock Option Plan, the Company may issue a maximum of 200,000 shares of
common stock; under the 1994 Non-Employee Director Stock Option Plan, the
Company may issue a maximum of 25,000 shares of common stock.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General Overview
The Company's principal business is the manufacture and sale of copper tube,
brass rod, fittings and other products made of copper, brass, bronze, plastic
and aluminum. These core manufacturing businesses have been in operation for
over 75 years. New housing starts and commercial construction are important
determinants of the Company's sales to the air-conditioning, refrigeration and
plumbing markets because the principal end use of a significant portion of the
Company's products is in the construction of single and multi-family housing
units and commercial buildings.
Profitability of certain of the Company's product lines is dependent upon the
"spreads" between the cost of metal and the gross selling prices of its
products. The open market price for grade A copper cathode, for example,
directly influences the selling price for copper tubing, a principal product
manufactured by the Company. The Company attempts to minimize the effects of
changes in copper prices by passing through to its customers base metal costs.
In the third quarter of 1994, the Company adopted the LIFO method of
accounting for the copper component of its copper tube and fittings
inventories retroactive to the beginning of fiscal 1994. Management believes
the LIFO method results in a better matching of current costs with current
revenues. The market price of copper does, however, indirectly effect the
carrying value (FIFO basis) of the Company's brass inventories. The Company's
copper and brass inventories customarily total between 30 to 35 million
pounds. "Spreads" fluctuate based upon competitive market conditions.
The Company also owns various natural resource properties in the Western
United States and Canada. It operates a short line railroad in Utah and a
placer gold mining company in Alaska. Additionally, certain other natural
resource properties produce royalty income or are available for sale.
Results of Operations
Net income was $8.5 million, or 90 cents per common share, for the third
quarter of 1994, which compares with net income of $5.6 million, or 54 cents
per common share, for the same period of 1993. Year-to-date, net income was
$18.5 million, or $1.84 per common share, which compares to net income of
$15.2 million, or $1.45 per common share, for 1993.
During the third quarter of 1994 the Company's net sales were $138.0 million,
which compares to net sales of $122.1 million, or a 13 percent increase over
the same period of 1993. Net sales were $395.4 million in the first nine-
months of 1994, which compares to net sales of $380.5 million in the same
period of 1993. The change in net sales was primarily attributable to: (i)
volume increases of eight percent in the third quarter and six percent in the
first nine-months; and (ii) pricing increases due to higher average raw
material costs (price of copper) in 1994 which, generally, are passed through
to customers in certain product lines. The Company's core manufacturing
businesses shipped 92.3 million pounds of product in the third quarter of 1994
which compares to 85.2 million pounds in the same quarter of 1993; year-to-
date, volumes were 281.3 million pounds in 1994 and 266.1 million pounds in
1993. Third quarter operating income increased primarily due to: (i)
productivity improvements at its manufacturing plants; (ii) selective price
increases in fittings; (iii) cost reductions in the areas of selling, general
and administrative expenses; and (iv) offset by lower margins on copper tube.
With the adoption of the LIFO method, Management believes the Company's
operating results will better reflect operating performance by removing
inventory gains and losses that result from wide fluctuations in copper
prices. Nevertheless, comparisons of operating results to pre-LIFO periods
must be analyzed carefully as the pro forma effects on those prior periods are
not reasonably determinable. Had the Company not adopted LIFO effective at
the beginning of fiscal 1994, operating income would have been $15.9 million
in the third quarter of 1994 and $38.0 million for the first nine months.
Prior to 1994, the Company used the first-in, first-out (FIFO) method of
accounting for the copper component of its inventories. Under this method,
the inventory items acquired first are assumed to be sold first, thereby
matching earliest costs with current selling prices. In two of the principal
product line markets in which the Company competes, selling prices are
influenced by the current price of metal (primarily copper as well as base
metals used in the formation of brass alloys). Therefore, when metal prices
change on the open market, the Company adjusts its selling prices, to the
extent competitive pressures allow, to reflect such changes. Nonetheless,
financial reporting, under the FIFO method, matches historical inventory costs
with current selling prices, rather than current replacement costs with
current selling prices. While the impact of metal price volatility is
moderated by rapid inventory turns, upward and downward trends of longer
duration may impact operating income under the FIFO method.
Interest expense increased approximately $.6 million for the quarter and $.9
million year-to-date due to (i) the 1993 Series IRBs issued early in the first
quarter of 1994 for the purpose of financing a capital improvement program at
the copper tube mill and (ii) the 1994 Series IRBs issued in June, 1994 for
the purpose of financing a new high volume copper fittings plant. Year-to-
date, other non-operating items included (i) a gain of $.6 million related to
the settlement of litigation as discussed in Note 5, (ii) a provision for
environmental reserves of $.4 million related to a site in which Mueller Brass
Co., a subsidiary of the Company, was notified it was a potentially
responsible party, (iii) a provision to further reduce the carrying cost of a
note receivable from Sharon Specialty Steel Company, Inc., and (iv) gains of
$2.8 million primarily related to sales of natural resource properties.
Additionally, the Company recorded an unusual item of $1.1 million for
outstanding insurance matters primarily related to estimated workers
compensation claims for years prior to 1993.
During 1994, the effective income tax rate declined to approximately 29.2
percent for the third quarter and 33.6 percent year-to-date, primarily as a
result of recognizing certain tax attributes as discussed in Note 2 and
favorable tax credits in certain jurisdictions related to incentive
financings.
Liquidity and Capital Resources
Cash provided by operating activities in the first nine months of 1994 totaled
$14.9 million which is primarily attributable to net income, depreciation, and
deferred income taxes, offset by increases in receivables and inventories.
During the first nine months of 1994, the Company's capital expenditures
totaled $30.2 million which was provided for by cash from operations and
financings, including that portion related to the copper tube mill project and
the copper fittings high volume plant which were funded by IRB financings as
discussed in Note 4. Investing activities also included approximately $13.0
million for the acquisition of certain DWV plastic fittings manufacturing
operations of Colonial Engineering, Inc. (Colonial).
During the first nine months, the Company issued the 1993 Series IRBs and the
1994 Series IRBs as described in Note 4. The proceeds from both IRB issues
are escrowed until required for the respective projects. The escrowed funds
as well as approximately $13.0 million for the acquisition of Colonial
(pending final classifications based upon asset appraisals and valuations) are
included in other assets. At September 24, 1994, the Company's total debt was
$101.5 million or 30 percent of its capitalization.
The Company's financing obligations contain various covenants which require,
among other things, the maintenance of minimum levels of tangible net worth,
and certain minimum financial ratios. Additionally, certain notes issued by
its wholly-owned subsidiary restrict the amount of cash that may be loaned or
dividended by that subsidiary. The Company is in compliance with all debt
covenants.
Management believes that cash provided by operations and currently available
cash of $39.8 million will be adequate to meet the Company's normal future
capital expenditure and operational needs. The Company's current ratio
remains strong at 2.5 to 1.
As part of its ongoing strategic planning process, the Company has approved
three major capital expenditure projects for the following operations: (i)
Fulton, Mississippi copper tube mill; (ii) Port Huron, Michigan brass rod
mill; and (iii) a high volume copper fittings plant to be located adjacent to
the Company's existing copper tube mill in Fulton, Mississippi. These
projects will require capital of approximately $15.0 to $20.0 million each.
The primary objective of these projects is to improve efficiency and
productivity as well as add some capacity. As discussed above, both of the
Fulton projects were financed by IRBs which were issued during fiscal 1994.
During the first nine months, the Company purchased treasury stock for an
aggregate purchase price of $25.9 million. The purchase was funded with
existing cash balances and should not impair the Company's ability to finance
operational requirements.
Part II. OTHER INFORMATION
Item 5. Other Information
The following discussion updates the disclosures in Item 1, Business, in the
Company's Annual Report on Form 10-K, for the year ended December 25, 1993.
Environmental Matters
Alaska Gold Company (Alaska Gold)
During the third quarter, Alaska Gold substantially completed its plan for
cleanup and removal of non-hazardous contaminated soil located at its gold
house property in Fairbanks, Alaska. The soil was removed and placed in the
existing Fairbanks North Star Borough landfill in accordance with a plan
approved by the State of Alaska Department of Environmental Conservation.
Costs associated with disposal approximated $400,000.
Mining Remedial Recovery Company (MRRC)
1. Cleveland Mill Site
During the third quarter, MRRC and Bayard Mining Company, along with an
unaffiliated third party, executed a consent decree relating to the Cleveland
Mill Site some five miles northeast of Silver City, New Mexico. The consent
decree has yet to be executed by the governmental entities or entered by the
federal district court, which is anticipated to occur by around year end.
2. Bullfrog Site
By the end of the third quarter, MRRC had substantially completed its
voluntary plan to regrade and cap the soil at the Bullfrog Site located in
Grant County, New Mexico. Costs associated with capping and regrading at the
site will be approximately $.9 million.
Miscellaneous
On August 26, 1993, the Environmental Protection Agency (EPA) served notice to
Mueller Brass Co. (MBCo) that it was one of 70 potentially responsible parties
(PRPs) in the Stoller Chemical Company Site investigation in Jericho, South
Carolina. The PRP steering committee which was formed to coordinate response
activities retained a consultant to provide investigation and remediation
alternatives on behalf of the PRPs. Total estimated cost of remediation at
this site is $5 million, and the Company does not anticipate that MBCo's
allocated share of costs will be material.
On March 7, 1994, the Company received notice from the EPA that MBCo was a PRP
at the Jack's Creek/Sitkin Smelting Superfund Site in Eastern Pennsylvania.
MBCo is one of seventy-five de maximus PRPs and is alleged to have contributed
less than one percent of the hazardous wastes at this site. The EPA has
preliminarily estimated that total cleanup and remediation costs at the site
could be $43 million, including response costs. A PRP group has been formed,
and MBCo is represented on the steering committee. The PRP group has retained
an environmental consultant to make alternative recommendations for cleanup
and remediation. It is anticipated that the EPA will issue its Record of
Decision at this site within the next few months, which should result in more
definitive cost estimates.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
18.1 Letter of Preferability from Ernst & Young, dated October 12, 1994
regarding the Company's change in accounting principle.
19.1 Mueller Industries, Inc.'s Quarterly Report to Stockholders for the
quarter ended September 24, 1994. Such report is being furnished for the
information of the Securities and Exchange Commission only and is not to be
deemed filed as part of this Quarterly Report on Form 10-Q.
27.1 Financial Data Schedule
99.1 Press Release issued by Mueller Industries, Inc. on October 14, 1994.
(b) During the quarter ended September 24, 1994, the Registrant filed no
Current Reports on Form 8-K.
Items 1, 2, 3 and 4 are not applicable and have been omitted.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on October 14, 1994.
MUELLER INDUSTRIES, INC.
/s/ Earl W. Bunkers
Earl W. Bunkers, Executive Vice President,
and Chief Financial Officer
/s/ Roy C. Harris
Roy C. Harris
Corporate Controller
/s/ Kent A. McKee
Kent A. McKee
Treasurer and Assistant Secretary