Mueller Industries (MLI) 10-Q 2011 Q2 Quarterly report

EXHIBIT 19.1

To Our Stockholders, Customers, and Employees

Mueller’s net income in the second quarter of 2011 was $22.3 million, or 59 cents per diluted share.  This compares with net income of $15.6 million, or 41 cents per diluted share, for the same period of 2010.  Net sales for the second quarter of 2011 were $652.9 million compared with $540.4 million in the second quarter of 2010.  The Comex average price of copper was $4.16 per pound in the second quarter of 2011, which compares with $3.19 in the second quarter of 2010.  Higher selling prices due to rising material values accounted for approximately $90 million of the increase in net sales.

For the first half of 2011, net income was $62.9 million, or $1.65 per diluted share, on net sales of $1.34 billion.  This compares with net income of $49.5 million, or $1.31 per diluted share, on net sales of $1.03 billion for the first half of 2010.  The year-to-date results of both 2011 and 2010 include unusual items in net income.  For the 2011 period, income of 18 cents per diluted share was included, resulting from the favorable settlement of a legal action.  And, in 2010, income of 58 cents per diluted share was included in net income, resulting from an insurance claim.

Our financial condition remains strong.  We ended the quarter with $345.0 million in cash equal to $9.11 per share.  In preparation for a major maintenance program at our Fulton, Mississippi, copper tube mill, we increased inventory by more than 15 million pounds to ensure uninterrupted supply for our customers; accordingly, we used in excess of $60 million cash to fund this temporary bulge in inventory quantities.

The construction industry continues to struggle in the face of high unemployment, foreclosures, and a weak economic recovery.  Nonetheless, we believe we are at or near the cyclical lows.  We are well prepared to ramp-up production when the recovery gains momentum.  Mueller’s performance in the first half was gratifying.

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 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 and energy, market demand, pricing, competitive and technological factors, and the availability of financing, 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 Six Months Ended
	July 2, 2011			June 26, 2010			July 2, 2011			June 26, 2010
	(In thousands, except per share data)
Net sales	$	652,923		$	540,388		$	1,340,604		$	1,025,656
Cost of goods sold		573,877			466,645			1,163,751			879,693
Depreciation and amortization		9,166			10,090			18,865			20,438
Selling, general, and administrative expense		33,330			33,468			68,699			70,791
Litigation settlement		—			—			(10,500	)		—
Insurance settlement		—			1,210			—			(21,296	)
Operating income		36,550			28,975			99,789			76,030
Interest expense		(2,834	)		(2,964	)		(6,182	)		(5,496	)
Other income (expense), net		264			(2,518	)		1,323			(2,378	)
Income before income taxes		33,980			23,493			94,930			68,156
Income tax expense		(11,249	)		(7,456	)		(31,657	)		(17,320	)
Consolidated net income		22,731			16,037			63,273			50,836
Net income attributable to noncontrolling interest		(400	)		(479	)		(355	)		(1,320	)
Net income attributable to Mueller Industries, Inc.	$	22,331		$	15,558		$	62,918		$	49,516
Weighted average shares for basic earnings per share		37,737			37,674			37,730			37,631
Effect of dilutive stock-based rewards		356			43			309			69
Adjusted weighted average shares for diluted earnings per share		38,093			37,717			38,039			37,700
Basic earnings per share	$	0.59		$	0.41		$	1.67		$	1.32
Diluted earnings per share	$	0.59		$	0.41		$	1.65		$	1.31
Dividends per share	$	0.10		$	0.10		$	0.20		$	0.20

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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
	July 2,		December 25,
	2011		2010
	(In thousands)
ASSETS
Cash and cash equivalents	$	345,039	$	394,139
Accounts receivable, net		327,381		269,258
Inventories		296,999		209,892
Other current assets		47,144		39,025
Total current assets		1,016,563		912,314
Property, plant, and equipment, net		223,234		229,498
Other assets		118,747		117,184
	$	1,358,544	$	1,258,996
LIABILITIES AND EQUITY
Current portion of long-term debt	$	50,582	$	32,020
Accounts payable		86,574		67,849
Other current liabilities		94,496		95,258
Total current liabilities		231,652		195,127
Long-term debt, less current portion		156,976		158,226
Pension and postretirement liabilities		40,558		40,939
Environmental reserves		23,232		23,902
Deferred income taxes		21,813		24,081
Other noncurrent liabilities		1,877		824
Total liabilities		476,108		443,099
Stockholders' equity		854,305		788,736
Noncontrolling interest		28,131		27,161
Total equity		882,436		815,897
	$	1,358,544	$	1,258,996

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