Exhibit 99.1 MUELLER INDUSTRIES, INC. REPORTS FOURTH QUARTER AND FISCAL 2006 EARNINGS MEMPHIS, Tenn., Feb. 6 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's income from continuing operations for fiscal 2006 was $148.9 million, or $4.00 per diluted share, which compares with $89.2 million, or $2.40 per diluted share, for 2005. Net sales for 2006 were $2.51 billion compared with $1.73 billion in 2005. The increase in net sales is primarily due to the increased cost of copper, the Company's principal raw material, which is generally passed through to customers by changes in selling prices. For the fourth quarter of 2006, the Company's net income was $5.2 million, or 14 cents per diluted share, on net sales of $544.2 million. This compares with net income of $35.8 million, or 97 cents per diluted share, on net sales of $483.6 million for the quarter ended December 31, 2005. The fourth quarter of 2006 includes a pre-tax charge of approximately $14.2 million (or 26 cents per diluted share after tax) to write-down inventories to the lower-of-cost- or-market that resulted from falling copper prices. Additionally, the fourth quarter results were adversely impacted by lower unit volumes due to the much anticipated "correction" in the residential construction market. Financial and Operating Highlights Mr. Karp said: * "The COMEX average price of copper was $3.19 per pound in the fourth quarter of 2006 and closed the year at $2.85 per pound. During 2006, copper had reached the price of $4.08 per pound, which is a historic high. * "Our current ratio remains strong at 3.0 to 1 and our working capital is $520.7 million, of which $200.5 million is cash on hand. * "Cash provided by operating activities was $64.5 million in 2006 compared with $106.1 million during 2005. Additional investments in accounts receivable and inventories were required because of higher raw material costs. * "For the full year, our Plumbing & Refrigeration segment posted operating earnings of $197.4 million on net sales of $1.72 billion which compares with operating earnings of $125.5 million on net sales of $1.28 billion in 2005. During the fourth quarter of 2006, market conditions for our core product lines remained challenging; unit volumes, particularly copper tube, were down substantially compared with the fourth quarter of 2005. Operating margins were curtailed during the fourth quarter due to weakness in demand, price reductions, and higher unit costs on lower production volume. * "Our OEM segment posted operating earnings of $44.8 million during the year on net sales of $835.3 million, which compares with operating earnings of $27.0 million on net sales of $460.3 million for 2005. Included in the OEM segment is our Chinese joint venture which reported total operating income of $6.4 million for 2006. * "Of the $14.2 million inventory write-down, $11.2 million occurred in Europe where FIFO inventory accounting is employed. In the U.S., LIFO inventory accounting is primarily used for the cost of the copper component in inventory, which moderates swings in inventory valuations. * "Capital expenditures during 2006 totaled $41.2 million of which $17.9 million relates to our Chinese joint venture." Business Outlook for 2007 Regarding the outlook for 2007, Mr. Karp said, "After more than five years of vigorous growth, the housing industry is experiencing the widely predicted 'correction.' The 'correction' is underway but may have already bottomed-out. "We note that the inventory of unsold new homes is declining, while building permits, the key indicator of future business, increased at the end of 2006. Also, mortgage rates are near historical lows and demographic factors are positive for the housing market. "We expect the commercial and retail sectors of Mueller's business will perform well during the year." 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 For the Year Ended ---------------------------- ---------------------------- Dec. 30, Dec. 31, Dec. 30, Dec. 31, 2006 2005 2006 2005 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) Net sales $ 544,212 $ 483,624 $ 2,510,912 $ 1,729,923 Cost of goods sold 486,383 389,874 2,109,436 1,430,075 Gross profit 57,829 93,750 401,476 299,848 Depreciation and amortization 10,586 10,125 41,619 40,696 Selling, general, and administrative expense 31,537 34,606 140,972 127,394 Operating income 15,706 49,019 218,885 131,758 Interest expense (5,316) (4,820) (20,477) (19,550) Other income, net 1,773 1,809 5,171 11,997 Income from continuing operations before income taxes 12,163 46,008 203,579 124,205 Income tax expense (6,988) (10,197) (54,710) (34,987) Income from continuing operations 5,175 35,811 148,869 89,218 Gain from discontinued operations, net of income taxes - - - 3,324 Net income $ 5,175 $ 35,811 $ 148,869 $ 92,542 Earnings per share: Basic earnings per share: Weighted average shares outstanding 37,016 36,634 36,893 36,590 From continuing operations $ 0.14 $ 0.98 $ 4.04 $ 2.44 From discontinued operations - - - 0.09 Basic earnings per share $ 0.14 $ 0.98 $ 4.04 $ 2.53 Diluted earnings per share: Weighted average shares outstanding plus assumed conversions 37,236 37,080 37,246 37,103 From continuing operations $ 0.14 $ 0.97 $ 4.00 $ 2.40 From discontinued operations - - - 0.09 Diluted earnings per share $ 0.14 $ 0.97 $ 4.00 $ 2.49 Summary Segment Data: Net sales: Plumbing & Refrigeration segment $ 352,253 $ 362,849 $ 1,716,613 $ 1,281,688 OEM segment 206,867 123,693 835,339 460,301 Elimination of intersegment sales (14,908) (2,918) (41,040) (12,066) Net sales $ 544,212 $ 483,624 $ 2,510,912 $ 1,729,923 Operating income: Plumbing & Refrigeration segment $ 18,018 $ 46,770 $ 197,402 $ 125,502 OEM segment 2,438 7,445 44,764 26,985 Unallocated expenses (4,750) (5,196) (23,281) (20,729) Operating income $ 15,706 $ 49,019 $ 218,885 $ 131,758
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 30, December 31, 2006 2005 ------------ ------------ (Unaudited) ASSETS Cash and cash equivalents $ 200,471 $ 129,685 Accounts receivable, net 281,679 260,685 Inventories 258,647 196,987 Other current assets 35,397 36,919 Total current assets 776,194 624,276 Property, plant, and equipment, net 315,064 307,046 Other assets 177,649 185,606 $ 1,268,907 $ 1,116,928 LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 35,998 $ 4,120 Accounts payable 96,095 124,216 Other current liabilities 123,426 135,346 Total current liabilities 255,519 263,682 Long-term debt 308,154 312,070 Pension and postretirement liabilities 36,599 35,236 Environmental reserves 8,907 9,073 Deferred income taxes 46,408 63,944 Other noncurrent liabilities 2,206 3,078 Total liabilities 657,793 687,083 Minority interest in subsidiaries 22,300 6,937 Stockholders' equity 588,814 422,908 $ 1,268,907 $ 1,116,928 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year Ended ---------------------------- December 30, December 31, 2006 2005 ------------ ------------ (Unaudited) Operating activities: Net income from continuing operations $ 148,869 $ 89,218 Reconciliation of net income from continuing operations to net cash provided by operating activities: Depreciation and amortization 41,855 40,858 Deferred income taxes (19,339) (9,556) Share-based compensation expense 2,789 - Loss (gain) on disposal of properties 2,620 (3,665) Minority interest in subsidiaries 2,610 9 Gain on sale of equity investment (1,876) - Provision for doubtful accounts 1,109 1,911 Income tax benefit from exercise of stock options (1,065) 991 Equity in income of unconsolidated subsidiary (964) (4,480) Gain on early retirement of debt (97) - Changes in assets and liabilities, net of business acquired: Receivables (15,459) (64,905) Inventories (56,786) (5,979) Other assets 1,449 1,764 Current liabilities (41,357) 66,435 Other liabilities (2,578) (5,894) Other, net 2,759 (590) Net cash provided by operating activities 64,539 106,117 Investing activities: Capital expenditures (41,206) (18,449) Proceeds from sales of properties and equity investment 23,528 10,112 Business acquired, net of cash received 3,632 (6,937) Net cash used in investing activities (14,046) (15,274) Financing activities: Issuance of long-term debt 28,759 - Dividends paid (14,775) (14,647) Proceeds from stock options exercised 7,701 4,819 Repayments of long-term debt (2,059) (1,090) Acquisition of treasury stock (1,092) (551) Income tax benefit from exercise of stock options 1,065 - Net cash provided by (used in) financing activities 19,599 (11,469) Effect of exchange rate changes on cash 694 (462) Net cash provided by operating activities of discontinued operations - 3,324 Increase in cash and cash equivalents 70,786 82,236 Cash and cash equivalents at the beginning of the period 129,685 47,449 Cash and cash equivalents at the end of the period $ 200,471 $ 129,685 SOURCE Mueller Industries, Inc. -0- 02/06/2007 /CONTACT: Kent A. McKee, +1-901-753-3208/ (MLI)