Mueller Industries (MLI) 10-Q 2008 Q3 Quarterly report

Exhibit 19.1

TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES

Mueller’s financial condition is strong.  At the end of the third quarter we had $308.4 million in cash on hand, amounting to $8.30 per share.  Our ratio of debt to total capitalization is a modest 29.4 percent.  We have a bank credit line of $200 million that is fully available.  We expect to fund our operating requirements, including capital expenditures, from internal sources.

Net income for the third quarter was $18.7 million, or 50 cents per diluted share, which compares with net income of $31.3 million, or 84 cents per diluted share, for the third quarter of fiscal 2007.  The third quarter of 2008 includes a pre-tax charge of $3.3 million to write-down certain inventories to the lower-of-cost-or-market that resulted from falling copper prices.  Net sales for the three months ended September 27, 2008 were $665.5 million, compared with net sales of $693.7 million for the third quarter of 2007.  The third quarter of 2007 included a one-time gain of approximately $8.9 million (pre-tax) pertaining to a favorable copper antitrust litigation settlement.

Mueller’s earnings for the first nine months of 2008 were achieved despite the adverse conditions in the housing industry and the turbulence in the financial markets.  We remain focused on enhancing our operations and providing our customers with superior service.

We believe that our financial and operating strengths will allow us to take advantage of opportunities, which are likely to arise in the current economic environment.  One such opportunity arose on October 9, 2008 when we repurchased $122.9 million of our outstanding 6% Subordinated Debentures at 84 percent of face value.  This transaction will result in a fourth quarter gain of $19.1 million.

Very Truly Yours,

/s/ Harvey L. Karp	/s/ William D. O’Hagan
Harvey L. Karp	William D. O’Hagan
Chairman of the Board	President and Chief Executive Officer
October 21, 2008

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, market demand, pricing, and competitive and technological factors, among others, as set forth in the Company’s SEC filings.  These filings are available through our website at www.muellerindustries.com.

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Quarter Ended						For the Nine Months Ended
	September 27, 2008			September 29, 2007			September 27, 2008			September 29, 2007
	(In thousands, except per share data)
Net sales	$	665,496		$	693,682		$	2,123,075		$	2,076,111
Cost of goods sold		588,469			603,219			1,861,475			1,801,543
Depreciation and amortization		11,529			11,582			33,517			33,854
Selling, general, and administrative expense		35,674			36,246			108,583			110,144
Copper antitrust litigation settlement		—			(8,865	)		—			(8,865	)
Operating income		29,824			51,500			119,500			139,435
Interest expense		(5,050	)		(5,384	)		(15,755	)		(16,567	)
Other income, net		2,319			4,060			7,287			10,938
Income before income taxes		27,093			50,176			111,032			133,806
Income tax expense		(8,422	)		(18,852	)		(37,992	)		(47,171	)
Net income	$	18,671		$	31,324		$	73,040		$	86,635
Weighted average shares for basic earnings per share		37,136			37,075			37,117			37,054
Effect of dilutive stock options		176			234			238			185
Adjusted weighted average shares for diluted earnings per share		37,312			37,309			37,355			37,239
Basic earnings per share	$	0.50		$	0.84		$	1.97		$	2.34
Diluted earnings per share	$	0.50		$	0.84		$	1.96		$	2.33
Dividends per share	$	0.10		$	0.10		$	0.30		$	0.30

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 27, 2008		December 29, 2007
		(In thousands)
Assets
Cash and cash equivalents	$	308,351	$	308,618
Accounts receivable, net		350,290		323,003
Inventories		260,937		269,032
Other current assets		38,849		39,694
Total current assets		958,427		940,347
Property, plant, and equipment, net		294,530		308,383
Other assets		203,399		200,474
	$	1,456,356	$	1,449,204
Liabilities and Stockholders’ Equity
Current portion of long-term debt (Note 1)	$	160,453	$	72,743
Accounts payable		125,239		140,497
Other current liabilities		120,439		121,813
Total current liabilities		406,131		335,053
Long-term debt		158,726		281,738
Pension and postretirement liabilities		34,980		36,071
Environmental reserves		8,853		8,897
Deferred income taxes		52,784		52,156
Other noncurrent liabilities		3,041		2,029
Total liabilities		664,515		715,944
Minority interest in subsidiary		26,558		22,765
Stockholders’ equity		765,283		710,495
	$	1,456,356	$	1,449,204
Note 1 - September 27, 2008 balance includes $122.9 million principal of 6% Subordinated Debentures repurchased on October 9, 2008.

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