Mueller Industries (MLI) 10-Q 2011 Q1 Quarterly report

Exhibit 19.1

To Our Stockholders, Customers, and Employees

Mueller’s net income was $40.6 million, or $1.07 per diluted share, for the first quarter of 2011.  This compares with net income of $34.0 million, or 90 cents per diluted share, for the same period of 2010.

Both the first quarters of 2011 and 2010 had unusual items which were included in net income.  In 2011, income of 18 cents per diluted share was included, resulting from the favorable settlement of a legal action.  And, in the first quarter of 2010, income of 62 cents per diluted share was included in net income, resulting from an insurance claim.  Excluding these unusual items, Mueller’s net income for the first quarter of 2011 was $33.8 million, or 89 cents per diluted share, compared with $10.6 million, or 28 cents per diluted share, for the first quarter of 2010.  On this basis, net income more than tripled.

Net sales in the first quarter of 2011 amounted to $687.7 million, a 42 percent increase over net sales in the same quarter a year ago.  The first quarter of 2011 was a 14-week period while the first quarter of 2010 was a 13-week period.

Our Plumbing & Refrigeration segment posted operating earnings of $29.7 million.  Net sales for the first quarter of 2011 totaled $380.6 million.  In the same period a year ago, comparable segment earnings were $18.0 million (plus a $22.5 million gain on the settlement of an insurance claim as discussed above) on net sales of $256.7 million.  Volumes and margins were better across most product lines contributing to the improved earnings.

Our OEM segment posted operating earnings of $29.6 million during the first quarter of 2011 on net sales of $319.3 million, which compares with operating income of $16.1 million on net sales of $232.2 million for the same period in 2010.  The increase in earnings was primarily due to higher volume and lower costs.

The construction sector remains anemic.  On the residential side, foreclosures and the threats thereof weigh on weak demand caused by poor jobs growth, even though mortgage rates are low and favorable affordability conditions exist.  As for commercial construction, private nonresidential activity suffers from high vacancy rates.  Despite these difficult conditions, Mueller achieved a very good first quarter and we remain positive about the outlook for the year.

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 26, 2011

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 INCOME
(In thousands, except per share data)
	For the Quarter Ended
	April 2,			March 27,
	2011			2010
	(Unaudited)
Net sales	$	687,681		$	485,268
Cost of goods sold		589,874			413,048
Depreciation and amortization		9,699			10,348
Selling, general, and administrative expense		35,369			37,323
Litigation settlement		(10,500	)		--
Insurance gain		--			(22,506	)
Operating income		63,239			47,055
Interest expense		(3,348	)		(2,532	)
Other income, net		1,059			140
Income  before income taxes		60,950			44,663
Income tax expense		(20,408	)		(9,864	)
Consolidated net income		40,542			34,799
Net loss (income) attributable to noncontrolling interest		45			(841	)
Net income attributable to the Company	$	40,587		$	33,958
Basic earnings per share:
Weighted average shares outstanding		37,723			37,588
Basic earnings  per share	$	1.08		$	0.90
Diluted earnings per share:
Weighted average shares outstanding plus assumed conversions		37,986			37,682
Diluted earnings per share	$	1.07		$	0.90
Dividends per share	$	0.10		$	0.10

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CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
	April 2,		December 25,
	2011		2010
	(Unaudited)
ASSETS
Cash and cash equivalents	$	413,922	$	394,139
Accounts receivable, net		353,321		269,258
Inventories		231,270		209,892
Other current assets		36,583		39,025
Total current assets		1,035,096		912,314
Property, plant, and equipment, net		227,890		229,498
Other assets		119,026		117,184
	$	1,382,012	$	1,258,996
LIABILITIES AND EQUITY
Current portion of long-term debt	$	43,117	$	32,020
Accounts payable		123,031		67,849
Other current liabilities		111,982		95,258
Total current liabilities		278,130		195,127
Long-term debt, less current portion		157,226		158,226
Pension and postretirement liabilities		40,995		40,939
Environmental reserves		23,263		23,902
Deferred income taxes		21,915		24,081
Other noncurrent liabilities		808		824
Total liabilities		522,337		443,099
Stockholders' equity		832,299		788,736
Noncontrolling interest		27,376		27,161
Total equity		859,675		815,897
	$	1,382,012	$	1,258,996

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