Mueller Industries (MLI) 10-Q 2009 Q2 Quarterly report

EXHIBIT 19.1

TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES

Mueller was profitable in the second quarter of 2009, after reporting a small loss in the first quarter of the year.  Net income in the second quarter of 2009 was $6.0 million, or 16 cents per diluted share.  This compares with $27.0 million, or 72 cents per diluted share, for the same period of 2008.  Net sales for the second quarter of 2009 were $367.8 million compared with $753.5 million in 2008.  For the first half, net income was $3.5 million, or 9 cents per diluted share, on net sales of $694.4 million.  This compares with net income of $54.4 million, or $1.45 per diluted share, on net sales of $1.46 billion for the first half of 2008.

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 second quarter of 2009, the Comex average price of copper was 43 percent lower than in the second quarter of 2008.  Approximately $206 million of the decrease in net sales was attributable to lower unit volume in our core product lines primarily in the OEM segment.  Lower selling prices, primarily in the Plumbing & Refrigeration segment, accounted for approximately $146 million of the decrease in net sales.

Our financial condition remains strong, and, in fact, improved in the second quarter.  We ended the quarter with $334.0 million in cash and $581.2 million in working capital.  Our current ratio remains solid at 4.6 to 1, and our financial leverage is conservative with a debt to total capitalization ratio of 18.9 percent.

We believe the construction industry is at, or near, a "bottom," although the pace and the extent of recovery remain uncertain.  Mueller made rapid and extensive adjustments to its businesses as unit volumes declined, as a result of the national economic downturn.  We expect Mueller to emerge from the current economic malaise a stronger, more efficient and more competitive company.

Very Truly Yours,

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

July 21, 2009

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Quarter Ended						For the Six Months Ended
	June 27, 2009			June 28, 2008			June 27, 2009			June 28, 2008
	(In thousands, except per share data)
Net sales	$	367,800		$	753,471		$	694,358		$	1,457,579
Cost of goods sold		313,353			661,209			600,736			1,273,006
Depreciation and amortization		10,355			11,004			20,835			21,988
Selling, general, and administrative expense		30,316			34,618			61,474			72,909
Operating income		13,776			46,640			11,313			89,676
Interest expense		(2,482	)		(5,238	)		(5,118	)		(10,705	)
Other income, net		385			1,961			1,012			6,530
Income before income taxes		11,679			43,363			7,207			85,501
Income tax expense		(5,512	)		(15,339	)		(3,550	)		(29,570	)
Consolidated net income		6,167			28,024			3,657			55,931
Less: net income attributable to noncontrolling interest		(139	)		(1,010	)		(121	)		(1,562	)
Net income attributable to Mueller Industries, Inc.	$	6,028		$	27,014		$	3,536		$	54,369
Weighted average shares for basic earnings per share		37,143			37,119			37,143			37,108
Effect of dilutive stock options		120			340			97			269
Adjusted weighted average shares for diluted earnings per share		37,263			37,459			37,240			37,377
Basic earnings per share	$	0.16		$	0.73		$	0.10		$	1.47
Diluted earnings per share	$	0.16		$	0.72		$	0.09		$	1.45
Dividends per share	$	0.10		$	0.10		$	0.20		$	0.20
				��

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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
	June 27,		December 27,			June 27,		December 27,
	2009		2008			2009		2008
	(In thousands)					(In thousands)
ASSETS					LIABILITIES AND STOCKHOLDERS' EQUITY
Cash and cash equivalents	$	333,959	$	278,860	Current portion of long-term debt	$	9,629	$	24,184
Accounts receivable, net		207,238		219,035	Accounts payable		59,871		63,732
Inventories		169,118		210,609	Other current liabilities		91,678		113,668
Other current assets		32,033		46,322
Total current assets		742,348		754,826	Total current liabilities		161,178		201,584
					Long-term debt		158,226		158,726
					Pension and postretirement liabilities		39,688		38,452
					Environmental reserves		23,352		23,248
Property, plant, and equipment, net		268,017		276,927	Deferred income taxes		33,496		33,940
Other assets		152,131		151,160	Other noncurrent liabilities		1,417		1,698
					Total liabilities		417,357		457,648
					Stockholders' equity		719,933		700,683
					Noncontrolling interest		25,206		24,582
					Total equity		745,139		725,265
	$	1,162,496	$	1,182,913		$	1,162,496	$	1,182,913

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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