FOR IMMEDIATE RELEASE Contact: Kent A. McKee
Memphis, TN-April 15, 2003 (901) 753-3208
MUELLER INDUSTRIES, INC. REPORTS
FIRST QUARTER RESULTS
Quarterly Earnings
Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), today
announced the Company's results for the first quarter of 2003. Net income
was $3.9 million, or 11 cents per diluted share, which compares with $17.9
million, or 48 cents per diluted share, for the first quarter of 2002. Net
sales for the three months ended March 29, 2003 declined to $232.0 million,
from $249.1 million for the comparable 2002 period. Income from continuing
operations was $4.5 million, or 12 cents per diluted share, which compares
with income from continuing operations in the first quarter of 2002 of $17.9
million, or 48 cents per diluted share. The decline in sales volume was
partly due to exceptionally cold weather conditions that slowed product
shipments. In addition, depressed copper tube margins and market pressures
adversely affected profitability.
Financial Highlights
Regarding the first quarter financial results, Mr. Karp said,
"Mueller ended the quarter with $194.9 million in cash, which is more
than $5.00 per outstanding share.
"Our debt-to-total-capitalization is virtually nil and, in fact, we
currently have no net debt as cash on hand substantially exceeds total
debt.
"Our current ratio is an impressive 5.1 to 1 with total working capital
of $393.7 million.
"We invested $10.8 million increasing to 34 percent our interest in
Conbraco Industries, Inc. We are working with Conbraco's management
to achieve mutual benefits for our companies.
"Capital expenditures were $6.6 million in the quarter. For 2003, we
expect that our capital expenditure requirements will be less than
depreciation"
Operating Highlights
With regard to operations, Mr. Karp noted the following:
"We shipped 166.6 million pounds of product, versus 181.5 million
pounds in the first quarter of 2002.
"Operating income was $7.1 million compared with $26.2 million in the
same period a year ago. The decline is due primarily to lower volumes
and margins in our copper tube business.
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"Our European business operated near break even, despite the lowest
margins we've experienced since our entry into the European market in
1997.
"Our Standard Products Division posted operating earnings of $7.1
million, compared with $25.2 million in the first quarter of 2002.
Standard Products Division's net sales were $159.4 million for the
quarter, compared with $180.1 million for the same period a year ago.
"Our Industrial Products Division posted operating earnings of $4.1
million during the first quarter on sales of $74.9 million which
compares with operating earnings of $5.7 million from sales of $70.0
million during the first quarter of 2002."
Business Outlook
Discussing the business outlook, Mr. Karp said, "The housing industry
continues to be a bright spot in our national economy. Building permits,
which are an excellent indicator of future business, remain high, and are
tracking the pace of 2002. Recently, consumer confidence dipped and the
national job market was noticeably weaker. We are carefully monitoring
these and other factors; but, it is significant that mortgage rates remain
very attractive and that may enable the housing industry to have another
good year in 2003."
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, market demand, pricing, and
competitive and technological factors, among others, as set forth in the
company's SEC filings.
Mueller Industries, Inc. is a leading manufacturer of copper tube and
fittings; brass and copper alloy rod, bar and shapes; aluminum and brass
forgings; aluminum and copper impact extrusions; plastic fittings and
valves; refrigeration valves and fittings; and fabricated tubular products.
Mueller's operations are located throughout the United States and in Canada,
Mexico, and Great Britain.
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
March 29, 2003 March 30, 2002
(Unaudited)
Net sales $ 232,022 $ 249,053
Cost of goods sold 191,915 191,806
Depreciation and amortization 9,740 9,076
Selling, general, and
administrative expense 23,296 21,981
---------- ----------
Operating income 7,071 26,190
Interest expense (311) (493)
Environmental expense (207) (175)
Other income, net 557 1,626
---------- ----------
Income from continuing operations
before income taxes 7,110 27,148
Income tax expense (2,650) (9,283)
---------- ----------
Income from continuing operations 4,460 17,865
(Loss) income from operation of
discontinued operations, net of tax (539) 71
---------- ----------
Net income $ 3,921 $ 17,936
========== ==========
Earnings (loss) per share:
Basic earnings (loss) per share:
Weighted average shares
outstanding 34,257 33,506
========== ==========
From continuing operations $ 0.13 $ 0.54
From discontinued operations (0.02) -
---------- ----------
Basic earnings per share $ 0.11 $ 0.54
========== ==========
Diluted earnings (loss) per share:
Weighted average shares
outstanding plus assumed
conversions 36,771 37,329
========== ==========
From continuing operations $ 0.12 $ 0.48
From discontinued operations (0.01) -
---------- ----------
Diluted earnings per share $ 0.11 $ 0.48
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 29, 2003 December 28, 2002
(Unaudited)
Assets
Cash and cash equivalents $ 194,915 $ 217,601
Accounts receivable, net 142,397 132,427
Inventories 144,890 142,953
Other current assets 6,744 7,366
---------- ----------
Total current assets 488,946 500,347
Property, plant, and equipment, net 348,356 352,469
Other assets 143,336 135,131
---------- ----------
$ 980,638 $ 987,947
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 3,711 $ 4,161
Accounts payable 35,950 41,004
Other current liabilities 55,580 61,186
---------- ----------
Total current liabilities 95,241 106,351
Long-term debt 13,333 14,005
Other noncurrent liabilities 113,783 113,647
---------- ----------
Total liabilities 222,357 234,003
Minority interest in subsidiaries 459 421
Stockholders' equity 757,822 753,523
---------- ----------
$ 980,638 $ 987,947
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Quarter Ended
March 29, 2003 March 30, 2002
(Unaudited)
Operating activities:
Net income from continuing operations $ 4,460 $ 17,865
Reconciliation of net income from
continuing operations to net
cash (used in) provided by
operating activities:
Depreciation and amortization 9,740 9,076
Deferred income taxes 783 2,613
Loss (gain) on disposal
of properties 212 (497)
Minority interest in subsidiaries 38 -
Income tax benefit from exercise
of stock options - 2,245
Changes in assets and
liabilities, net (21,277) (6,170)
---------- ----------
Net cash (used in) provided by
operating activities (6,044) 25,132
---------- ----------
Investing activities:
Purchase of Conbraco Industries, Inc.
common stock (10,806) -
Capital expenditures (6,599) (8,511)
Other, net 476 1,091
---------- ----------
Net cash used in investing activities (16,929) (7,420)
---------- ----------
Financing activities:
Repayments of long-term debt (1,122) (31,032)
Acquisition of treasury stock - (2,283)
Proceeds from the sale of
treasury stock - 756
---------- ----------
Net cash used in financing activities (1,122) (32,559)
---------- ----------
Effect of exchange rate changes on cash 1,157 (45)
---------- ----------
Decrease in cash
and cash equivalents (22,938) (14,892)
Cash provided by discontinued operations 252 440
Cash and cash equivalents at the
beginning of the period 217,601 121,862
---------- ----------
Cash and cash equivalents at the
end of the period $ 194,915 $ 107,410
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