EXHIBIT 99.1

 

 

 

 

 

 

 

FOR IMMEDIATE RELEASEContact: Kent A. McKee
 Memphis, TN—September 24, 2012 (901) 753 3208

 

Mueller Industries, Inc. Announces Agreement to

Repurchase 27.2% of Its Outstanding Shares

 

Mueller Industries, Inc. (NYSE: MLI) announced today that it has entered into an agreement to repurchase 10,422,859 shares of Mueller common stock owned by Leucadia National Corporation (and its subsidiaries) (NYSE: LUK) at a negotiated price per share of $41.00, for an aggregate purchase price of $427,337,219. The shares to be purchased in the repurchase transaction equate to approximately 27.2% of Mueller’s common shares currently outstanding and constitute Leucadia’s entire ownership stake in Mueller. Ian M. Cumming and Joseph S. Steinberg, Leucadia’s designees to the Company’s Board of Directors, will resign from the Board upon the closing of the repurchase, which is expected to occur on or before September 26, 2012, subject to customary closing conditions. The repurchase was approved by the Board following the recommendation of the directors not affiliated with Leucadia and will be funded using a combination of the Company’s available cash on hand and borrowings under the Company’s existing line of credit.

 

Gregory L. Christopher, Mueller’s CEO said, “We are pleased to announce this repurchase transaction. We believe that a repurchase transaction of this magnitude represents a highly attractive opportunity to achieve immediate and significant accretion to our earnings, while still maintaining prudent levels of leverage and liquidity.”

 

For the second quarter of 2012, the Company previously reported income of 47 cents per diluted share which compares with pro forma basis income of 59 cents per diluted share. The appended unaudited condensed balance sheet and income statement illustrate the impact of the transaction on a pro forma basis.

 

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.

 

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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 “pro forma,” “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.
PRO FORMA CONDENSED BALANCE SHEET
AS OF JUNE 30, 2012
(in thousands)
                 
The following table illustrates the effects of the stock repurchase transaction (10,422,859 shares at $41.00 per share) on the reported balance sheet as if it had occurred on June 30, 2012.  Cash and cash equivalents, long-term debt, and stockholders' equity including the effects of the stock repurchase transaction are measurements not derived in accordance with generally accepted accounting principles.  Including the effects of the stock repurchase transaction is useful as it measures the effects of increased borrowings and decreased available cash on hand on the financial position of the Company.  The reconciliation of the balance sheet information including the effects of the stock repurchase transaction to the balance sheet as reported for June 30, 2012 is as follows:
                 

 

   As of June 30, 2012
      Effect of   
   As  Stock   
   Reported  Repurchase  Pro forma
   (Unaudited)
ASSETS               
Cash and cash equivalents  $373,680   $(227,337)(a)  $146,343 
Other current assets   570,370    —      570,370 
                
   Total current assets   944,050    (227,337)   716,713 
                
Other assets   328,390    —      328,390 
                
   $1,272,440   $(227,337)  $1,045,103 
                
LIABILITIES AND STOCKHOLDERS' EQUITY               
Total current liabilities   240,386    —      240,386 
                
Long-term debt   7,800    200,000(b)   207,800 
Other noncurrent liabilities   89,807    —      89,807 
                
   Total liabilities   337,993    200,000    537,993 
                
Total Mueller Industries, Inc. stockholders' equity   904,343    (427,337)(c)   477,006 
Noncontrolling interest   30,104    —      30,104 
                
   Total equity   934,447    (427,337)   507,110 
                
   $1,272,440   $(227,337)  $1,045,103 
                

 

 (a)  Represents the amount of the purchase price for the stock repurchase transaction that will be funded with available cash on hand.
               
 (b)  Represents the amount of the purchase price for the stock repurchase transaction that will initially be funded with borrowings under the Company's existing line of credit.
               
 (c)  Represents the total purchase price for the stock repurchase transaction.          

 

 
 

 

MUELLER INDUSTRIES, INC.
PRO FORMA CONDENSED STATEMENTS OF INCOME
QUARTER ENDED JUNE 30, 2012
(In thousands, except per share data)
               
The following table illustrates the effects of the stock repurchase transaction (10,422,859 shares at $41.00 per share) on reported earnings as if it had occurred on the first day of the second quarter of 2012.  Earnings including the effects of the stock repurchase transaction is a measurement not derived in accordance with generally accepted accounting principles.  Including the effects of the stock repurchase transaction is useful as it measures the effects of increased borrowings and decreased available cash on hand to the operating results, and measures the impact of the decreased share count in the weighted average shares computation.  These adjustments are helpful in illustrating the impact of these transactions on the reported earnings and diluted earnings per share.  The reconciliation of earnings including the effects of the stock repurchase transaction to net income as reported is as follows:

 

   For the Quarter Ended June 30, 2012 
             
       Effect of     
   As   Stock     
   Reported   Repurchase   Pro forma 
   (Unaudited) 
             
Operating income  $29,842   $-   $29,842 
                
Interest expense   (2,721)   (1,875)(d)   (4,596)
Other income, net   490    (121)(e)   369 
                
Income before income taxes   27,611    (1,996)   25,615 
Income tax expense   (9,071)   699    (8,372)
                
Consolidated net income   18,540    (1,297)   17,243 
                
Net income attributable to noncontrolling interest   (623)   -    (623)
                
Net income attributable to Mueller Industries, Inc.  $17,917   $(1,297)  $16,620 
                
Weighted average shares for basic earnings per share   38,029    (10,423)   27,606 
Effect of dilutive stock-based awards   436    -    436 
                
Adjusted weighted average shares for diluted earnings per share   38,465    (10,423)   28,042 
                
Diluted earnings per share  $0.47   $0.12   $0.59 

 

  (d)  Represents the estimated increase in interest expense for the quarter, assuming an all-in borrowing rate of 3.75% applied to the amount borrowed to fund the stock repurchase transaction.

 

  (e)  Represents the estimated decrease in interest income for the quarter, assuming a weighted average return of 0.21% on the amount of the cash portion of the repurchase transaction.