EXHIBIT 19.1
TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES
Mueller’s net income in the third quarter was $10.5 million, or 27 cents per diluted share, on net sales of $585.8 million. This compares with net income of $18.9 million, or 50 cents per diluted share, on net sales of $507.2 million in the third quarter of 2010. The third quarter 2011 results were affected by the precipitous decline in copper prices, resulting in a pretax charge of $6.8 million (or approximately 12 cents per diluted share after tax). Without these charges, earnings would have been 39 cents per diluted share.
Year-to-date, the Company earned $73.4 million, or $1.92 per diluted share, which includes a gain of 18 cents per diluted share related to a favorable litigation settlement. For the same period of 2010, net income was $68.4 million, or $1.81 per diluted share, which includes an insurance settlement gain of 59 cents per diluted share. Net sales for the first nine months of 2011 were $1.93 billion compared with net sales of $1.53 billion for the same period a year ago.
Our Plumbing & Refrigeration segment posted operating earnings of $13.9 million on net sales of $325.8 million compared with operating earnings of $11.5 million on net sales of $282.7 million in the third quarter of 2010. The increase in net sales was due to higher selling prices on 5.1 percent lower unit volume. Our OEM segment posted operating earnings of $12.2 million during the third quarter of 2011 on net sales of $266.6 million, which compared with operating earnings of $23.0 million on net sales of $229.0 million for the same period in 2010. The increase in net sales was attributable to higher selling prices on 8.1 percent lower unit volume.
In September, a portion of our Wynne, Arkansas, manufacturing operations was damaged by fire. Fortunately, no one was injured. Our efforts in providing our customers with the full range of products required have been successful.
The near-term outlook for the housing sector continues to be subdued; however, the construction of multi-family housing is improving. Commercial construction is also showing glimmers of better times ahead. We believe that the employment picture must brighten as a prerequisite for improvement in the housing market.
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 25, 2011 |
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Quarter Ended | For the Nine Months Ended | |||||||||||||||
October 1, 2011 | September 25, 2010 | October 1, 2011 | September 25, 2010 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net sales | $ | 585,809 | $ | 507,240 | $ | 1,926,413 | $ | 1,532,896 | ||||||||
Cost of goods sold | 523,984 | 437,597 | 1,687,735 | 1,317,290 | ||||||||||||
Depreciation and amortization | 8,716 | 9,934 | 27,581 | 30,372 | ||||||||||||
Selling, general, and administrative expense | 34,245 | 28,810 | 102,944 | 99,601 | ||||||||||||
Litigation settlement | — | — | (10,500 | ) | — | |||||||||||
Insurance settlement | — | 12 | — | (21,284 | ) | |||||||||||
Operating income | 18,864 | 30,887 | 118,653 | 106,917 | ||||||||||||
Interest expense | (2,822 | ) | (3,072 | ) | (9,004 | ) | (8,568 | ) | ||||||||
Other income (expense), net | 102 | 30 | 1,425 | (2,348 | ) | |||||||||||
Income before income taxes | 16,144 | 27,845 | 111,074 | 96,001 | ||||||||||||
Income tax expense | (5,403 | ) | (9,098 | ) | (37,060 | ) | (26,418 | ) | ||||||||
Consolidated net income | 10,741 | 18,747 | 74,014 | 69,583 | ||||||||||||
Net (income) loss attributable to noncontrolling interest | (266 | ) | 162 | (621 | ) | (1,158 | ) | |||||||||
Net income attributable to Mueller Industries, Inc. | $ | 10,475 | $ | 18,909 | $ | 73,393 | $ | 68,425 | ||||||||
Weighted average shares for basic earnings per share | 37,878 | 37,710 | 37,779 | 37,657 | ||||||||||||
Effect of dilutive stock-based awards | 483 | 92 | 367 | 77 | ||||||||||||
Adjusted weighted average shares for diluted earnings per share | 38,361 | 37,802 | 38,146 | 37,734 | ||||||||||||
Basic earnings per share | $ | 0.28 | $ | 0.50 | $ | 1.94 | $ | 1.82 | ||||||||
Diluted earnings per share | $ | 0.27 | $ | 0.50 | $ | 1.92 | $ | 1.81 | ||||||||
Dividends per share | $ | 0.10 | $ | 0.10 | $ | 0.30 | $ | 0.30 |
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
October 1, | December 25, | October 1, | December 25, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||
ASSETS | LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Cash and cash equivalents | $ | 448,853 | $ | 394,139 | Current portion of debt | $ | 52,827 | $ | 32,020 | ||||||||
Accounts receivable, net | 315,709 | 269,258 | Accounts payable | 65,743 | 67,849 | ||||||||||||
Inventories | 214,868 | 209,892 | Other current liabilities | 113,823 | 95,258 | ||||||||||||
Other current assets | 53,366 | 39,025 | |||||||||||||||
Total current assets | 1,032,796 | 912,314 | Total current liabilities | 232,393 | 195,127 | ||||||||||||
Long-term debt | 156,726 | 158,226 | |||||||||||||||
Pension and postretirement liabilities | 39,649 | 40,939 | |||||||||||||||
Environmental reserves | 23,111 | 23,902 | |||||||||||||||
Property, plant, and equipment, net | 207,761 | 229,498 | Deferred income taxes | 19,788 | 24,081 | ||||||||||||
Other assets | 118,353 | 117,184 | Other noncurrent liabilities | 2,187 | 824 | ||||||||||||
Total liabilities | 473,854 | 443,099 | |||||||||||||||
Stockholders' equity | 856,189 | 788,736 | |||||||||||||||
Noncontrolling interest | 28,867 | 27,161 | |||||||||||||||
Total equity | 885,056 | 815,897 | |||||||||||||||
$ | 1,358,910 | $ | 1,258,996 | $ | 1,358,910 | $ | 1,258,996 |
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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