FOR IMMEDIATE RELEASE Contact: Kent A. McKee Memphis, TN--April 22, 2008 (901) 753-3208 MUELLER INDUSTRIES, INC. REPORTS 45 PERCENT INCREASE IN FIRST QUARTER 2008 EARNINGS Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income increased 45 percent in the first quarter of 2008 to $27.4 million, or 73 cents per diluted share. This compares with $18.9 million, or 51 cents per diluted share, for the same period of 2007. First quarter net sales for 2008 were $704.1 million compared with $609.8 million in 2007. 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 2008, Mr. Karp said: o "Our Plumbing & Refrigeration segment posted operating earnings of $25.1 million on net sales of $383.9 million which compares with prior year earnings of $26.9 million on net sales of $370.0 million. Operating results were affected by lower spreads and unit shipments in copper tube and DWV plastic fittings. Other key product lines performed well. o "Our OEM segment posted operating earnings of $25.6 million during the first quarter of 2008 on net sales of $326.2 million, which compares with operating earnings of $5.5 million on net sales of $243.7 million for the same period in 2007. The acquisition of Extruded Metals, a brass rod mill, at the end of February 2007 was an important contributor to the improvement in our operating income during the quarter. We believe there are additional opportunities to rationalize production as we integrate our brass rod mill operations. Page 1 of 6 o "Other income includes a gain of $2.4 million related to the early retirement of debt. o "During the first quarter of 2008, capital expenditures totaled $8.6 million. We expect to invest between $30 and $40 million for capital expenditures during 2008. o "The COMEX average price of copper was $3.53 per pound in the first quarter of 2008, which compares with $2.70 in the first quarter of 2007. o "Our current ratio remains solid at 2.8 to 1. We ended the quarter with $274.3 million in cash and $634.9 million in working capital. o "Our return on average equity was 18.5 percent for the four quarters ended March, 2008. o "As of year end, our financial leverage was modest with a debt to total capitalization ratio of 32.3 percent. o "Total stockholders' equity was $737.8 million which equates to a book value per share of $19.89 of which $7.39 per share is in cash." Business Outlook for 2008 Regarding the outlook for 2008, Mr. Karp said, "The housing construction market continues to contract. Housing starts have already declined almost 60 percent over the past 2 1/2 years. However, we believe the market is close to a bottom, and that it will soon commence a gradual, but perhaps fitful, improvement. Mortgage rates remain at historically low levels and will provide an incentive for buyers to return to the housing market. "On the other hand, the private non-residential construction market, an important market for Mueller, continues to show strength. So far this year it has grown at an annualized rate of 13 percent. "Economists are divided over whether our nation has entered into a recession. If, in fact, we are in a recession, our goal is to emerge from the downturn, a stronger and more formidable competitor." 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. Page 2 of 6 ********************* 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. Page 3 of 6 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) For the Quarter Ended ------------------------ March 29, March 31, 2008 2007 --------- --------- (Unaudited) Net sales $ 704,108 $ 609,782 Cost of goods sold 611,797 536,578 --------- --------- Gross profit 92,311 73,204 Depreciation and amortization 10,984 10,966 Selling, general, and administrative expense 38,291 34,927 --------- --------- Operating income 43,036 27,311 Interest expense (5,467) (5,494) Other income, net 4,017 4,953 --------- --------- Income before income taxes 41,586 26,770 Income tax expense (14,231) (7,857) --------- --------- Net income $ 27,355 $ 18,913 ========= ========= Weighted average shares for basic earnings per share 37,089 37,027 Effect of dilutive stock options 192 117 --------- --------- Adjusted weighted average shares for diluted earnings per share 37,281 37,144 --------- --------- Basic earnings per share $ 0.74 $ 0.51 ========= ========= Diluted earnings per share $ 0.73 $ 0.51 ========= ========= Dividends per share $ 0.10 $ 0.10 ========= ========= Summary Segment Data: Net sales: Plumbing & Refrigeration Segment $ 383,884 $ 369,996 OEM Segment 326,207 243,730 Elimination of intersegment sales (5,983) (3,944) --------- --------- Net sales $ 704,108 $ 609,782 ========= ========= Operating income: Plumbing & Refrigeration Segment $ 25,084 $ 26,854 OEM Segment 25,574 5,494 Unallocated expenses (7,622) (5,037) --------- --------- Operating income $ 43,036 $ 27,311 ========= ========= Page 4 of 6 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 29, December 29, 2008 2007 ------------ ------------ (Unaudited) ASSETS Cash and cash equivalents $ 274,280 $ 308,618 Accounts receivable, net 386,607 323,003 Inventories 273,596 269,032 Other current assets 47,256 39,694 ------------ ------------ Total current assets 981,739 940,347 Property, plant, and equipment, net 306,982 308,383 Other assets 201,250 200,474 ------------ ------------ $ 1,489,971 $ 1,449,204 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 69,885 $ 72,743 Accounts payable 151,840 140,497 Other current liabilities 125,113 121,813 ------------ ------------ Total current liabilities 346,838 335,053 Long-term debt, less current portion 282,242 281,738 Pension and postretirement liabilities 35,803 36,071 Environmental reserves 8,893 8,897 Deferred income taxes 52,287 52,156 Other noncurrent liabilities 1,949 2,029 ------------ ------------ Total liabilities 728,012 715,944 Minority interest in subsidiaries 24,171 22,765 Stockholders' equity 737,788 710,495 ------------ ------------ $ 1,489,971 $ 1,449,204 ============ ============ Page 5 of 6 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
For the Quarter Ended ---------------------- March 29, March 31, 2008 2007 --------- --------- (Unaudited) Operating activities: Net income $ 27,355 $ 18,913 Reconciliation of net income to net cash (used in) provided by operating activities: Depreciation and amortization 11,110 11,012 Stock-based compensation expense 731 628 Gain on early retirement of debt (2,408) -- Loss (gain) on disposals of properties 339 (3,132) Deferred income taxes (429) (1,156) Income tax benefit from exercise of stock options -- (66) Minority interest in subsidiaries 552 402 Changes in assets and liabilities, net of business acquired: Receivables (62,218) (59,857) Inventories (3,664) 66,512 Other assets (6,780) (314) Current liabilities 14,264 13,445 Other liabilities 2,566 23 Other, net (2,708) 719 --------- --------- Net cash (used in) provided by operating activities (21,290) 47,129 --------- --------- Investing activities: Capital expenditures (8,573) (8,725) Acquisition of business, net of cash received -- (31,970) Proceeds from sales of properties -- 3,032 Net withdrawals from restricted cash balances 85 -- --------- --------- Net cash used in investing activities (8,488) (37,663) --------- --------- Financing activities: Dividends paid (3,709) (3,703) Issuance of shares under incentive stock option plans from treasury 266 155 Issuance of debt by joint venture 21,032 5,434 Repayments of long-term debt (22,979) (17,429) Income tax benefit from exercise of stock options -- 66 --------- --------- Net cash used in financing activities (5,390) (15,477) --------- --------- Effect of exchange rate changes on cash 830 29 --------- --------- Decrease in cash and cash equivalents (34,338) (5,982) Cash and cash equivalents at the beginning of the period 308,618 200,471 --------- --------- Cash and cash equivalents at the end of the period $ 274,280 $ 194,489 ========= =========
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