Mueller Industries (MLI) 10-Q 2009 Q1 Quarterly report

Exhibit 19.1

TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES

 Mueller posted a net loss of $2.5 million, or 7 cents per diluted share, for the first quarter of 2009.  This is the first operating loss our Company has reported since 1991.  Business conditions were exceptionally difficult during the first quarter, but improved as the quarter progressed.  These results compare with net income of $27.4 million, or 73 cents per diluted share, for the same period of 2008.

 Mueller’s financial condition remains strong.  We ended the quarter with $300.3 million in cash and $554.3 million in working capital.  Total stockholders’ equity was $694.5 million, which equates to a book value per share of $18.70 of which $8.09 per share was cash.  Our current ratio remained solid at 4.8 to 1, and at quarter end, our financial leverage was modest with a debt to total capitalization ratio of 19.9 percent.

 Net sales of the Company's core product lines including copper tube, fittings, brass rod and forgings were substantially affected by the lower market values of copper and brass, the Company's principal raw materials, which are largely passed through to customers.  In the first quarter of 2009, the Comex average price of copper was 55.5 percent lower than in the first quarter of 2008.  Approximately $225 million of the decrease in net sales was attributable to lower unit volumes primarily in the OEM segment.  Lower selling prices, primarily in the Plumbing & Refrigeration segment, accounted for approximately $130 million of the decrease in net sales.

 Our Plumbing & Refrigeration segment posted operating earnings of $10.3 million on net sales of $190.4 million, which compares with prior year earnings of $25.1 million on net sales of $383.9 million.  The decline in operating income was primarily due to lower unit shipments across most product lines and higher per unit conversion costs due to lower production volume.

 Our OEM segment posted an operating loss of $6.3 million during the first quarter of 2009 on net sales of $ 138.4 million, which compares with operating earnings of $25.6 million on net sales of $326.2 million for the same period in 2008.  The loss was primarily due to lower volume and spreads and higher per unit conversion costs due to weak demand in the industrial and automotive markets.

 Our Annual Stockholders’ Meeting will be held at Mueller’s headquarters in Memphis, Tennessee on May 7, 2009.  We hope you can attend, but if you cannot, we urge you to sign and return your proxy card.

Very Truly Yours,

/S/ Harvey L. Karp	/S/ Gregory L. Christopher
Harvey L. Karp	Gregory L. Christopher
Chairman of the Board	Chief Executive Officer

April 21, 2009

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.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
	For the Quarter Ended
	March 28,			March 29,
	2009			2008
	(Unaudited)
Net sales	$	326,558		$	704,108
Cost of goods sold		287,383			611,797
Depreciation and amortization		10,480			10,984
Selling, general, and administrative expense		31,158			38,291
Operating (loss) income		(2,463	)		43,036
Interest expense		(2,636	)		(5,467	)
Other income, net		627			4,569
(Loss) income before income taxes		(4,472	)		42,138
Income tax benefit (expense)		1,962			(14,231	)
Consolidated net (loss) income		(2,510	)		27,907
Less: net loss (income) attributable to noncontrolling interest		18			(552	)
Net (loss) income attributable to the Company	$	(2,492	)	$	27,355
Basic (loss) earnings per share:
Weighted average shares outstanding		37,143			37,089
Basic (loss) earnings per share	$	(0.07	)	$	0.74
Diluted (loss) earnings per share:
Weighted average shares outstanding plus assumed conversions		37,143			37,281
Diluted (loss) earnings per share	$	(0.07	)	$	0.73
Dividends per share	$	0.10		$	0.10

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CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
	March 28,		December 27,
	2009		2008
	(Unaudited)
ASSETS
Cash and cash equivalents	$	300,336	$	278,860
Accounts receivable, net		190,172		219,035
Inventories		170,968		210,609
Other current assets		37,596		46,322
Total current assets		699,072		754,826
Property, plant, and equipment, net		270,626		276,927
Other assets		148,487		151,160
	$	1,118,185	$	1,182,913
LIABILITIES AND EQUITY
Current portion of long-term debt	$	14,022	$	24,184
Accounts payable		52,476		63,732
Other current liabilities		78,262		113,668
Total current liabilities		144,760		201,584
Long-term debt, less current portion		158,726		158,726
Pension and postretirement liabilities		37,692		38,452
Environmental reserves		23,184		23,248
Deferred income taxes		32,663		33,940
Other noncurrent liabilities		1,441		1,698
Total liabilities		398,466		457,648
Stockholders' equity		694,458		700,683
Noncontrolling interest		25,261		24,582
Total equity		719,719		725,265
	$	1,118,185	$	1,182,913

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