Mueller Industries, Inc. Reports First Quarter 2007 Earnings MEMPHIS, Tenn., April 24 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income in the first quarter of 2007 was $18.9 million, or 51 cents per diluted share, which compares with $33.4 million, or 90 cents per diluted share, for the same period of 2006. First quarter net sales for 2007 were $609.8 million compared with $551.0 million in 2006. The increase in net sales was primarily attributable to acquired businesses. The change in net sales was also affected by the increased cost of copper, the Company's principal raw material, which was largely passed through to customers, offset by lower unit volume. Financial and Operating Highlights Regarding the first quarter of 2007, Mr. Karp said: - -- "Our Plumbing & Refrigeration segment posted operating earnings of $26.9 million on net sales of $370.0 million which compares with prior year earnings of $44.2 million on net sales of $386.9 million. Operating margins were affected by higher unit costs on lower production volume. Net sales for the Trading Group trended up but operating income was off slightly. European results overall were profitable on the strength of our trading businesses which continue to perform well. - -- "Our OEM segment posted operating earnings of $5.5 million during the first quarter of 2007 on net sales of $243.7 million, which compares with operating earnings of $11.0 million on net sales of $168.0 million for the same period in 2006. Our Chinese joint venture reported total operating income of $1.7 million. - -- "We completed the acquisition of Extruded Metals, a brass rod mill, at the end of February; their results are included in the OEM segment. We are presently rationalizing production with particular emphasis on casting operations. Operations have already been accretive to earnings; however, there are opportunities for additional improvement as we integrate the brass mill operations. - -- "Other income includes a gain of $3.1 million related to the sale of mineral royalty interests. - -- "During the first quarter of 2007, capital expenditures totaled $8.7 million. We expect to invest between $30 and $40 million for capital expenditures during 2007. - -- "Cash provided by operating activities was $47.1 million in the first quarter of 2007. - -- "The COMEX average price of copper was $2.70 per pound in the first quarter of 2007, which compares with $2.25 in the first quarter of 2006. - -- "Our current ratio remains solid at 2.8 to 1. We ended the quarter with $194.5 million in cash and $521.6 million in working capital." Business Outlook for 2007 Regarding the outlook for 2007, Mr. Karp said, "The housing construction market is undergoing a much anticipated correction which has dampened demand for certain of our products. However, we believe this market will improve later this year or early next year. On the other hand, the commercial construction market remains strong." 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 which 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. MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) For the Quarter Ended March 31, April 1, 2007 2006 (Unaudited) --------- --------- Net sales $ 609,782 $ 551,039 Cost of goods sold 536,578 457,069 Gross profit 73,204 93,970 Depreciation and amortization 10,966 10,195 Selling, general, and administrative expense 34,927 34,959 Operating income 27,311 48,816 Interest expense (5,494) (4,862) Other income, net 4,953 2,013 Income before income taxes 26,770 45,967 Income tax expense (7,857) (12,602) Net income $ 18,913 $ 33,365 Weighted average shares for basic earnings per share 37,027 36,691 Effect of dilutive stock options 117 390 Adjusted weighted average shares for diluted earnings per share 37,144 37,081 Basic earnings per share $ 0.51 $ 0.91 Diluted earnings per share $ 0.51 $ 0.90 Dividends per share $ 0.10 $ 0.10 Summary Segment Data: Net sales: Plumbing & Refrigeration Segment $ 369,996 $ 386,941 OEM Segment 243,730 167,972 Elimination of intersegment sales (3,944) (3,874) Net sales $ 609,782 $ 551,039 Operating income: Plumbing & Refrigeration Segment $ 26,854 $ 44,193 OEM Segment 5,494 10,953 Unallocated expenses (5,037) (6,330) Operating income $ 27,311 $ 48,816 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 30, 2007 2006 (Unaudited) ------------ ------------ ASSETS Cash and cash equivalents $ 194,489 $ 200,471 Accounts receivable, net 370,957 281,679 Inventories 218,980 258,647 Other current assets 32,981 35,397 Total current assets 817,407 776,194 Property, plant, and equipment, net 328,742 315,064 Other assets 187,438 177,649 $ 1,333,587 $ 1,268,907 LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 34,555 $ 35,998 Accounts payable 136,888 96,095 Other current liabilities 124,386 123,426 Total current liabilities 295,829 255,519 Long-term debt 308,130 308,154 Pension and postretirement liabilities 47,447 36,599 Environmental reserves 9,197 8,907 Deferred income taxes 43,716 46,408 Other noncurrent liabilities 2,007 2,206 Total liabilities 706,326 657,793 Minority interest in subsidiaries 22,994 22,300 Stockholders' equity 604,267 588,814 $ 1,333,587 $ 1,268,907 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Quarter Ended March 31, April 1, 2007 2006 ---------- --------- (Unaudited) Operating activities: Net income $ 18,913 $ 33,365 Reconciliation of net income to net cash provided by (used in) operating activities: Depreciation and amortization 11,012 10,240 Stock-based compensation expense 628 607 Equity in earnings of unconsolidated subsidiary -- (964) Gain on disposals of properties (3,132) (121) Deferred income taxes (1,156) (3,891) Income tax benefit from exercise of stock options (66) (228) Minority interest in subsidiaries 402 393 Changes in assets and liabilities, net of businesses acquired: Receivables (59,857) (55,022) Inventories 66,512 (14,813) Other assets (314) (4,676) Current liabilities 13,445 (14,579) Other liabilities 23 (175) Other, net 719 104 Net cash provided by (used in) operating activities 47,129 (49,760) Investing activities: Capital expenditures (8,725) (12,015) Acquisition of business, net of cash received (31,970) 3,632 Proceeds from sales of properties 3,032 253 Net cash used in investing activities (37,663) (8,130) Financing activities: Dividends paid (3,703) (3,684) Acquisition of treasury stock -- (388) Issuance of shares under incentive stock option plans from treasury 155 4,200 Proceeds from issuance of long-term debt 5,434 11,164 Repayments of long-term debt (17,429) (162) Income tax benefit from exercise of stock options 66 228 Net cash (used in) provided by financing activities (15,477) 11,358 Effect of exchange rate changes on cash 29 69 Decrease in cash and cash equivalents (5,982) (46,463) Cash and cash equivalents at the beginning of the period 200,471 129,685 Cash and cash equivalents at the end of the period $ 194,489 $ 83,222 SOURCE Mueller Industries, Inc. -0- 04/24/2007 /CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208 / (MLI)