TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES
Mueller's business during the first quarter of 2002 showed clear signs
of rebounding from the economic slowdown which affected the year 2001. Net
earnings rose 16 percent to $17.9 million, or 48 cents per diluted share,
compared with 42 cents per diluted share for the same quarter last year.
More significantly, earnings rose 53 percent over the preceding quarter (the
fourth quarter of 2001).
Net sales for the first quarter of 2002 were $268.0 million or 3 percent
less than the same quarter of 2001, due primarily to a 12 percent decrease in
the price of copper. However, the volume of product sold rose to 195 million
pounds from 176 million pounds in the same quarter last year.
We believe that during the first quarter of 2002, our customers began
restocking their inventories, which had declined substantially during 2001.
This restocking process should provide Mueller with an added increment of
business as the year progresses.
We are gratified to report that Mueller's European copper tube
operations turned profitable in the first quarter. Although the profit was
modest, it convincingly demonstrated that the modernization of our Bilston
copper tube mill was successful. As production refinements are implemented,
our European operations will be well-positioned to make a growing
contribution to Mueller's bottom line.
Our Company's business outlook has improved over the past 60 to 90 days.
The national economy is strengthening, and the housing and construction
industry continues to benefit from low mortgage rates. The result is a high
level of new building permits, and that is a good indicator of future
business. Significantly, even though many financial assets have declined in
value over the past several years, home prices continue to surge, rising 6.9
percent in 2001 and 9.2 percent in 2000. This supports our belief that an
investment in a home is both financially wise and personally desirable.
Our Annual Stockholders' Meeting will be held at Mueller's headquarters
in Memphis, Tennessee on May 9, 2002. You should have already received the
notice of meeting, as well as proxy material and the 2001 Annual Report. We
hope you can attend, but if you cannot, we urge you to sign and return your
proxy card. You may also vote via the internet by following the instructions
contained on the proxy card.
Sincerely,
/S/HARVEY L. KARP /S/WILLIAM D. O'HAGAN
Harvey L. Karp William D. O'Hagan
Chairman of the Board President and Chief Executive Officer
April 16, 2002
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
For the Quarter Ended
March 30, 2002 March 31, 2001
Net sales $ 268,024 $ 276,578
Cost of goods sold 208,490 218,116
Depreciation and amortization 9,759 10,527
Selling, general, and
administrative expense 22,717 22,556
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Operating income 27,058 25,379
Interest expense (493) (1,424)
Environmental expense (175) (761)
Other income, net 1,636 1,766
---------- ----------
Income before income taxes 28,026 24,960
Income tax expense (10,090) (9,491)
---------- ----------
Net income $ 17,936 $ 15,469
========== ==========
Earnings per share:
Basic $ 0.54 $ 0.46
========== ==========
Diluted $ 0.48 $ 0.42
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 30, 2002 December 29, 2001
Assets
Cash and cash equivalents $ 107,410 $ 121,862
Accounts receivable, net 172,422 148,808
Inventories 123,471 126,629
Other current assets 5,851 6,614
---------- ----------
Total current assets 409,154 403,913
Property, plant, and equipment, net 385,441 387,533
Other assets 124,246 124,619
---------- ----------
$ 918,841 $ 916,065
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 3,986 $ 3,996
Accounts payable 45,808 34,209
Other current liabilities 65,300 63,283
---------- ----------
Total current liabilities 115,094 101,488
Long-term debt 15,955 46,977
Other noncurrent liabilities 92,663 94,396
---------- ----------
Total liabilities 223,712 242,861
Minority interest in subsidiaries 271 271
Stockholders' equity 694,858 672,933
---------- ----------
$ 918,841 $ 916,065
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