Exhibit 99.1
MUELLER INDUSTRIES, INC. REPORTS FOURTH QUARTER AND FISCAL 2005 EARNINGS
MEMPHIS, Tenn., Feb. 14 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman
of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's
earnings from continuing operations for fiscal 2005 were $89.2 million, or
$2.40 per diluted share, which compares with $79.4 million, or $2.15 per
diluted share, for 2004. Net sales for 2005 were $1.7 billion compared with
$1.4 billion in 2004.
Mr. Karp said, "The fourth quarter of 2005 was our best quarter of the year,
with net earnings reaching an all-time high. For the quarter ended December 31,
2005, net income was $35.8 million, or 97 cents per diluted share, compared with
$15.7 million, or 42 cents per diluted share in the same period last year. The
principal reason for the excellent quarterly results was the improvement in
margins in our core product lines, due to the incorporation of increased raw
material and other costs into our pricing format.
"We also benefited from our recent Mexican and UK acquisitions which
strengthened our trading businesses. In addition, we saw continued improvement
in our Refrigeration, Gas Products and Precision Tube businesses. And
importantly, our provision for income taxes reflects the benefit of tax
strategies and the reduction of estimated tax liabilities and reserves."
Financial and Operating Highlights
Regarding 2005, Mr. Karp said:
- "The COMEX average price of copper was $2.03 per pound in the fourth
quarter of 2005 and $1.68 per pound for the full year, which compares
with $1.41 in the fourth quarter of 2004 and $1.29 for the full year
2004.
- "Cash provided by operating activities was $106.1 million in 2005
compared with $154.8 million during 2004 despite additional funding of
accounts receivable and inventories required by continued increases in
our raw material costs.
- "Our Standard Products Division posted operating earnings of $125.5
million, compared to $108.3 million in 2004. Standard Products Division's
net sales were $1.3 billion for the year, compared with $1.0 billion for
2004.
- "Our Industrial Products Division posted operating earnings of $27.0
million during the year on net sales of $460.3 million, which compares
with operating earnings of $20.6 million on net sales of $392.6 million
for 2004.
- "European results continued to be profitable and our trading businesses
there are performing well.
- "During the third quarter, the Company acquired KX Group, Ltd. for
approximately $12.8 million. KX Group's net sales are approximately $48
million annually. Late in the fourth quarter, the Company acquired a 50.5
percent joint venture interest in China to manufacture copper tube. The
joint venture is expected to produce approximately 80 million pounds of
product in 2006 and approximately 110 million pounds of product by 2007.
By early 2006, Mueller fully contributed its initial cash investment of
approximately $19.4 million with cash on hand.
- "Capital expenditures during 2005 totaled $18.4 million. We expect to
invest between $25 and $30 million for capital expenditures during 2006.
- "Selling, general and administrative expense increased to $127.4 million
due primarily to acquired businesses and increased sales.
- "Interest expense increased $15.6 million to $19.6 million for 2005 which
reflects a full year of outstanding subordinated debentures that we
issued late in 2004 as part of our special dividend.
- "The effective tax rate of 28.2 percent is primarily due to the
recognition of (i) foreign NOLs in the UK, (ii) tax planning strategies
and structure related to a business acquired in Mexico during 2004, and
(iii) reduction of estimated tax liabilities and reserves."
Business Outlook for 2006
Regarding the outlook for 2006, Mr. Karp said, "For more than the past five
years, the new housing and home improvement markets have been vibrant due to
historically low mortgage rates and positive demographic factors. On the other
hand, the commercial construction market lagged behind.
"Our outlook for 2006 assumes there will be a decline in new home
construction, due to rising mortgage rates coupled with higher home prices.
However, new housing starts will likely remain at the high end of historical
levels. Any decline in housing starts may very well be offset by the continued
strength of the home improvement market and growth in the commercial
construction sector. Should this scenario occur, Mueller will be well-
positioned to benefit. Many of our better business opportunities lie in the
commercial construction market. Overall, we believe 2006 will be another good
year for our Company."
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 For the Year
Ended Ended
------------------------------ ------------------------------
Dec. 31, Dec. 25, Dec. 31, Dec. 25,
2005 2004 2005 2004
------------- ------------- ------------- -------------
(Unaudited) (Unaudited)
Net sales $ 483,624 $ 329,763 $ 1,729,923 $ 1,379,056
Cost of goods sold 389,874 267,675 1,430,075 1,115,612
Gross profit 93,750 62,088 299,848 263,444
Depreciation and amortization 10,125 10,211 40,696 40,613
Selling, general, and
administrative expense 34,606 26,990 127,394 106,400
Impairment charge - - - 3,941
Operating income 49,019 24,887 131,758 112,490
Interest expense (4,820) (3,315) (19,550) (3,974)
Other income, net 1,809 1,681 11,997 6,842
Income from continuing
operations before income taxes 46,008 23,253 124,205 115,358
Income tax expense (10,197) (7,599) (34,987) (35,942)
Income from continuing
operations 35,811 15,654 89,218 79,416
Gain from discontinued
operations, net of income
taxes - - 3,324 -
Net income $ 35,811 $ 15,654 $ 92,542 $ 79,416
Earnings per share:
Basic earnings per share:
Weighted average shares
outstanding 36,634 36,365 36,590 35,321
From continuing
operations $ 0.98 $ 0.43 $ 2.44 $ 2.25
From discontinued
operations - - 0.09 -
Basic earnings per share $ 0.98 $ 0.43 $ 2.53 $ 2.25
Diluted earnings per share:
Weighted average
shares outstanding
plus assumed
conversions 37,080 36,931 37,103 36,911
From continuing
operations $ 0.97 $ 0.42 $ 2.40 $ 2.15
From discontinued
operations - - 0.09 -
Diluted earnings per
share $ 0.97 $ 0.42 $ 2.49 $ 2.15
Summary Segment Data:
Net sales:
Standard Products Division $ 362,849 $ 239,876 $ 1,281,688 $ 1,002,086
Industrial Products Division 123,693 94,399 460,301 392,645
Elimination of intersegment
sales (2,918) (4,512) (12,066) (15,675)
Net sales $ 483,624 $ 329,763 $ 1,729,923 $ 1,379,056
Operating income:
Standard Products Division $ 46,770 $ 23,889 $ 125,502 $ 108,265
Industrial Products Division 7,445 4,863 26,985 20,562
Unallocated expenses (5,196) (3,865) (20,729) (16,337)
Operating income $ 49,019 $ 24,887 $ 131,758 $ 112,490
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 25,
2005 2004
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 129,685 $ 47,449
Accounts receivable, net 248,395 196,762
Inventories 196,987 187,853
Other current assets 36,919 23,267
Total current assets 611,986 455,331
Property, plant, and equipment, net 307,046 335,610
Other assets 185,606 172,790
$ 1,104,638 $ 963,731
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 4,120 $ 5,328
Accounts payable 124,216 79,723
Other current liabilities 123,056 95,767
Total current liabilities 251,392 180,818
Long-term debt 312,070 310,650
Pension and postretirement liabilities 35,236 33,167
Environmental reserves 9,073 9,503
Deferred income taxes 63,944 67,479
Other noncurrent liabilities 3,078 10,361
Total liabilities 674,793 611,978
Minority interest in subsidiaries 6,937 67
Stockholders' equity 422,908 351,686
$ 1,104,638 $ 963,731
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Year Ended
----------------------------
December 31, December 25,
2005 2004
------------ ------------
(Unaudited)
Operating activities:
Net income from continuing operations $ 89,218 $ 79,416
Reconciliation of net income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 40,858 40,639
Income tax benefit from exercise
of stock options 991 31,778
Impairment charge - 3,941
Equity in (income) loss of
unconsolidated subsidiaries (4,480) 2,026
Provision for doubtful accounts 1,911 1,404
Gain on disposal of properties (3,665) (5,729)
Deferred income taxes (9,556) 2,711
Minority interest in subsidiaries,
net of dividend paid 9 (141)
Changes in assets and liabilities,
net of business acquired:
Receivables (55,577) (17,995)
Inventories (5,979) (26,208)
Other assets (2,870) (2,055)
Current liabilities 61,741 42,913
Other liabilities (5,894) 296
Other, net (590) 1,765
Net cash provided by operating activities 106,117 154,761
Investing activities:
Capital expenditures (18,449) (19,980)
Businesses acquired, net of cash received (6,937) (56,946)
Proceeds from sales of properties 10,112 6,334
Net cash used in investing activities (15,274) (70,592)
Financing activities:
Dividends paid (14,647) (259,882)
Acquisition of treasury stock (551) (42,641)
Proceeds from stock options exercised 4,819 18,978
Subordinated debenture issuance costs - (2,187)
Repayments of long-term debt (1,090) (6,608)
Net cash used in financing activities (11,469) (292,340)
Effect of exchange rate changes on cash (462) 532
Increase in cash and cash equivalents 78,912 (207,639)
Cash provided by discontinued operations 3,324 -
Cash and cash equivalents at the
beginning of the period 47,449 255,088
Cash and cash equivalents at the end
of the period $ 129,685 $ 47,449
SOURCE Mueller Industries, Inc.
-0- 02/14/2006
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/-