Mueller Industries (MLI) 10-Q 2011 Q3 Quarterly report

EXHIBIT 19.1

TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES

Mueller’s net income in the third quarter was $18.9 million, or 50 cents per diluted share, on net sales of $507.2 million.  This compares with net income of $18.7 million, or 50 cents per diluted share, on net sales of $419.9 million in the third quarter of 2009.  Year-to-date, the Company earned $68.4 million, or $1.81 per diluted share, which includes an insurance settlement gain of 59 cents per diluted share. This compares with net income of $22.2 million, or 59 cents per diluted share, for the same period of 2009.  Net sales for the first nine months of 2010 were $1.53 billion compared with net sales of $1.11 billion for the same period a year ago.

Our Plumbing & Refrigeration segment posted operating earnings of $11.5 million on net sales of $282.7 million compared with operating earnings of $16.0 million on net sales of $240.9 million in the third quarter of 2009.  The benefit of slightly higher shipments was offset by lower margins.  Our OEM segment posted operating earnings of $23.0 million during the third quarter of 2010 on net sales of $229.0 million, which compared with operating earnings of $16.5 million on net sales of $181.6 million for the same period in 2009.  Operating income improved in most product lines on better volumes.

Housing starts continue to stagnate at near the lowest levels of the past 50 years.  However, we believe starts are unlikely to decline further.  Also, the drop in non-residential construction appears to be bottoming out.  We expect to see improving business conditions in 2011, although the recovery in our industry will probably be uneven.  We are encouraged by Mueller’s solid performance in 2010 and we are well prepared for an upturn in the economy.

Very Truly Yours,

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

October 19, 2010

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Quarter Ended						For the Nine Months Ended
	September 25, 2010			September 26, 2009			September 25, 2010			September 26, 2009
	(In thousands, except per share data)
Net sales	$	507,240		$	419,890		$	1,532,896		$	1,114,248
Cost of goods sold		437,597			354,039			1,317,290			954,775
Depreciation and amortization		9,934			10,441			30,372			31,276
Selling, general, and administrative expense		28,810			27,593			99,601			89,067
Insurance settlement		12			—			(21,284	)		—
Operating income		30,887			27,817			106,917			39,130
Interest expense		(3,072	)		(2,435	)		(8,568	)		(7,553	)
Other income (expense), net		30			(324	)		(2,348	)		688
Income before income taxes		27,845			25,058			96,001			32,265
Income tax expense		(9,098	)		(6,246	)		(26,418	)		(9,796	)
Consolidated net income		18,747			18,812			69,583			22,469
Less net loss (income) attributable to noncontrolling interest		162			(146	)		(1,158	)		(267	)
Net income attributable to Mueller Industries, Inc.	$	18,909		$	18,666		$	68,425		$	22,202
Weighted average shares for basic earnings per share		37,710			37,474			37,657			37,253
Effect of dilutive stock-based awards		92			72			77			89
Adjusted weighted average shares for diluted earnings per share		37,802			37,546			37,734			37,342
Basic earnings per share	$	0.50		$	0.50		$	1.82		$	0.60
Diluted earnings per share	$	0.50		$	0.50		$	1.81		$	0.59
Dividends per share	$	0.10		$	0.10		$	0.30		$	0.30

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 25,		December 26,			September 25,		December 26,
	2010		2009			2010		2009
	(In thousands)					(In thousands)
ASSETS					LIABILITIES AND STOCKHOLDERS' EQUITY
Cash and cash equivalents	$	400,116	$	346,001	Current portion of long-term debt	$	23,437	$	24,325
Accounts receivable, net		278,891		228,739	Accounts payable		80,140		73,837
Inventories		190,243		191,262	Other current liabilities		101,395		85,208
Other current assets		34,631		42,841
Total current assets		903,881		808,843	Total current liabilities		204,972		183,370
					Long-term debt		158,226		158,226
					Pension and postretirement liabilities		43,589		44,320
					Environmental reserves		25,671		23,268
Property, plant, and equipment, net		235,079		250,395	Deferred income taxes		25,283		31,128
Other assets		123,781		120,903	Other noncurrent liabilities		891		887
					Total liabilities		458,632		441,199
					Stockholders' equity		777,025		713,167
					Noncontrolling interest		27,084		25,775
					Total equity		804,109		738,942
	$	1,262,741	$	1,180,141		$	1,262,741	$	1,180,141

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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