TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES Mueller's net earnings increased 39 percent for the third quarter of 1996 compared with the same quarter of 1995. Gross profit, operating income, net earnings, and earnings per share all reached record levels. This is our ninth record quarter in a row and the 19th consecutive quarter of strong earnings performance. Earnings for the third quarter of 1996 were $16.2 million, or 83 cents per share, compared to earnings of $11.6 million, or 60 cents per share, for the same quarter of 1995. Our pretax earnings this quarter are after a charge of $1.9 million to increase environmental reserves. Net sales in the third quarter of 1996 totaled $176.0 million, compared to net sales of $171.5 million for the third quarter of 1995. Furthermore, we shipped 113.1 million pounds of product in the third quarter, or 24 percent more than in the same period the year before. The selling price of a majority of our products is significantly related to the cost of raw materials, particularly copper products. COMEX copper prices averaged 91 cents per pound in the third quarter of 1996 compared with $1.36 per pound in the same quarter of 1995. This reduction affected the dollar amount of net sales; however, as noted above, unit sales substantially increased. Mueller's manufacturing operations continue to show excellent improvement. Our production increased 29 percent over the same quarter of 1995. The improvement, in part, reflects increased yield and productivity at our plants as we continue to realize incremental benefits from our $100 million investment in major capital improvements. Further implementation and refinement of these capital programs should result in additional benefits for the future. The demand in the marketplace for Mueller's products remains strong. This is due to several factors which have favorably impacted the housing market. These factors include: low mortgage rates; high levels of consumer confidence; continued improvement in the home buyer affordability indices; and rising home valuation trends. Sincerely, /s/ Harvey L. Karp Harvey L. Karp Chairman of the Board /s/ William D. O'Hagan William D. O'Hagan President and Chief Executive Officer October 16, 1996 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except share data)
For the Quarter Ended September 28, September 30, 1996 1995 Net sales $ 175,991 $ 171,549 Costs of goods sold 133,204 137,410 Depreciation and amortization 4,697 4,098 Selling, general, and administrative expense 12,809 13,011 ----------- ----------- Operating income 25,281 17,030 Interest expense (1,400) (820) Environmental reserves (1,945) (955) Other income, net 1,424 1,736 ----------- ----------- Income before income taxes 23,360 16,991 Income tax expense (7,178) (5,386) ----------- ----------- Net income $ 16,182 $ 11,605 =========== =========== Net income per share: Primary: Average shares outstanding 19,520 19,263 Net income $ 0.83 $ 0.60 =========== =========== Fully diluted: Average shares outstanding 19,550 19,263 Net income $ 0.83 $ 0.60 =========== ===========
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except share data)
For the Nine-Months Ended September 28, September 30, 1996 1995 Net sales $ 546,063 $ 524,699 Costs of goods sold 426,272 427,557 Depreciation and amortization 13,718 11,507 Selling, general, and administrative expense 41,632 38,387 ----------- ----------- Operating income 64,441 47,248 Interest expense (4,113) (3,331) Environmental reserves (1,945) (955) Other income (expense), net 4,364 4,311 ----------- ----------- Income before income taxes 62,747 47,273 Income tax expense (19,376) (14,955) ----------- ----------- Net income $ 43,371 $ 32,318 =========== =========== Net income per share: Primary: Average shares outstanding 19,477 19,115 Net income $ 2.23 $ 1.69 =========== =========== Fully diluted: Average shares outstanding 19,534 19,256 Net income $ 2.22 $ 1.68 =========== ===========
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data)
September 28, 1996 December 30, 1995 ASSETS Cash and cash equivalents $ 77,528 $ 48,357 Accounts receivable, net 104,468 83,712 Inventories 69,692 66,360 Other current assets 12,882 12,609 --------- --------- Total current assets 264,570 211,038 Property, plant and equipment, net 221,171 221,012 Other assets 16,681 18,785 --------- --------- $ 502,422 $ 450,835 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 15,234 $ 16,249 Accounts payable 22,069 16,931 Other current liabilities 45,032 34,704 --------- --------- Total current liabilities 82,335 67,884 Long-term debt 51,327 59,653 Other noncurrent liabilities 37,800 37,423 --------- --------- Total liabilities 171,462 164,960 Minority interest in subsidiaries 459 - Stockholders' equity 330,501 285,875 --------- --------- $ 502,422 $ 450,835 ========= ========= Book value per share $ 18.96 $ 16.48 ========= =========
DIRECTORS AND OFFICERS BOARD OF DIRECTORS Harvey L. Karp Chairman of the Board Mueller Industries, Inc. Robert B. Hodes (1) (3) Counsel, Willkie Farr & Gallagher Allan Mactier (1) (2) (3) Private Investor William D. O'Hagan President and Chief Executive Officer Mueller Industries, Inc. Robert J. Pasquarelli (1) (2) Steel Industry Consultant CORPORATE OFFICERS Harvey L. Karp Chairman of the Board William D. O'Hagan President and Chief Executive Officer Earl W. Bunkers Executive Vice President and Chief Financial Officer William H. Hensley Vice President General Counsel and Secretary Lowell J. Hill Vice President Human Resources Kent A. McKee Vice President Business Development/Investor Relations Richard G. Miller Vice President and Chief Information Officer Lee R. Nyman Vice President Manufacturing/ Management Engineering James H. Rourke Group Vice President Industrial Products Division [FN] (1) Member of the Audit Committee (2) Member of the Compensation Committee (3) Member of the Nominating Committee EX-27.1 3 EXHIBIT 27.1 ARTICLE 5 FINANCIAL DATA SCHEDULES
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FORM 10-Q FOR THE FISCAL PERIOD ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000089439 MUELLER INDUSTRIES, INC. 1,000 9-MOS DEC-28-1996 SEP-28-1996 77,528 0 107,312 2,844 69,692 264,570 287,834 66,663 502,422 82,335 51,327 200 0 0 330,301 502,422 546,063 546,063 426,272 426,272 55,350 0 4,113 62,747 19,376 43,371 0 0 0 43,371 2.23 2.22