Exhibit 19.1
To Our Stockholders, Customers, and Employees
Mueller's second quarter of 2004 clearly demonstrated our Company's
ability to leverage the benefits of favorable market conditions.
Net income for the quarter was $27.0 million, or 73 cents per diluted
share compared with $9.0 million, or 24 cents per diluted share for the same
quarter last year.
Net sales for the second quarter of 2004 were $380.8 million compared with
$248.2 million in the second quarter of 2003. We shipped 198.5 million pounds
of product versus 175.5 million pounds in the same quarter last year.
The three-fold increase in our earnings was due to a combination of higher
profit margins and an increase in volume. Particularly important was the
improvement in copper tube spreads which returned to year 2000 levels. Also,
our European operations and brass rod businesses contributed to the increased
earnings as margins and volumes rose. The increased volume had the additional
benefit of reducing our per unit costs.
These favorable conditions came together in what has historically been our
busiest quarter, the second quarter of the year, and resulted in our best
quarter since the second quarter of 2000.
Our financial position is excellent. Mueller ended the quarter with
$263.7 million cash on hand, and total debt of only $12.4 million.
The business outlook remains good. Housing starts for 2004 will likely
exceed the robust level of 1,853,000 starts achieved in 2003. Moreover
commercial construction, an important market for our products, is improving
along with our national economy. Interest rates have recently ticked up, but
by historical standards are quite low. And the National Association of Home
Builders has forecasted that 2005 will be another outstanding year for the
housing industry.
Our Annual Stockholders' Meeting was held at Mueller's headquarters in
Memphis, Tennessee on April 29, 2004. The stockholders elected Messrs. Fulvio,
Gladstein, Hermanson, Hodes, Karp and O'Hagan as directors, and approved the
appointment of Ernst & Young LLP as our independent auditors.
Sincerely,
/s/Harvey L. Karp
Harvey L. Karp
Chairman of the Board
/s/William D. O'Hagan
William D. O'Hagan
President and Chief Executive Officer
July 13, 2004
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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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
June 26, 2004 June 28, 2003
(Unaudited)
Net sales $ 380,822 $ 248,221
Cost of goods sold 303,720 203,461
Depreciation and amortization 10,159 9,722
Selling, general, and
administrative expense 28,199 23,575
Impairment charge - -
---------- ----------
Operating income 38,744 11,463
Nonoperating income, net 981 1,633
---------- ----------
Income from continuing operations
before income taxes 39,725 13,096
Income tax expense (12,677) (4,117)
---------- ----------
Income from continuing operations 27,048 8,979
Discontinued operations, net of tax - -
---------- ----------
Net income $ 27,048 $ 8,979
========== ==========
Basic earnings (loss) per share:
Weighted average shares
outstanding 34,978 34,263
========== ==========
From continuing operations $ 0.77 $ 0.26
From discontinued operations - -
---------- ----------
Basic earnings per share $ 0.77 $ 0.26
========== ==========
Diluted earnings (loss) per share:
Weighted average shares
outstanding plus assumed
conversions 36,892 36,803
========== ==========
From continuing operations $ 0.73 $ 0.24
From discontinued operations - -
---------- ----------
Diluted earnings per share $ 0.73 $ 0.24
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued)
(In thousands, except per share data)
For the Six Months Ended
June 26, 2004 June 28, 2003
(Unaudited)
Net sales $ 726,781 $ 480,243
Cost of goods sold 584,749 395,376
Depreciation and amortization 20,124 19,462
Selling, general, and
administrative expense 54,881 46,871
Impairment charge 3,941 -
---------- ----------
Operating income 63,086 18,534
Nonoperating income, net 3,381 1,672
---------- ----------
Income from continuing operations
before income taxes 66,467 20,206
Income tax expense (21,459) (6,767)
---------- ----------
Income from continuing operations 45,008 13,439
Discontinued operations, net of tax - (539)
---------- ----------
Net income $ 45,008 $ 12,900
========== ==========
Basic earnings (loss) per share:
Weighted average shares
outstanding 34,818 34,260
========== ==========
From continuing operations $ 1.29 $ 0.40
From discontinued operations - (0.02)
---------- ----------
Basic earnings per share $ 1.29 $ 0.38
========== ==========
Diluted earnings (loss) per share:
Weighted average shares
outstanding plus assumed
conversions 36,900 36,787
========== ==========
From continuing operations $ 1.22 $ 0.36
From discontinued operations - (0.01)
---------- ----------
Diluted earnings per share $ 1.22 $ 0.35
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 26, 2004 December 27, 2003
(Unaudited)
Assets
Cash and cash equivalents $ 263,687 $ 255,088
Accounts receivable, net 223,111 163,006
Inventories 171,685 140,548
Other current assets 15,293 11,713
---------- ----------
Total current assets 673,776 570,355
Property, plant, and equipment, net 334,093 345,537
Other assets 134,633 139,292
---------- ----------
$ 1,142,502 $ 1,055,184
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 1,085 $ 2,835
Accounts payable 63,856 42,081
Other current liabilities 88,976 68,590
---------- ----------
Total current liabilities 153,917 113,506
Long-term debt 11,334 11,437
Pension and postretirement liabilities 32,508 31,643
Environmental reserves 9,822 9,560
Deferred income taxes 65,894 63,734
Other noncurrent liabilities 10,211 10,238
---------- ----------
Total liabilities 283,686 240,118
Minority interest in subsidiaries 24 208
Stockholders' equity 858,792 814,858
---------- ----------
$ 1,142,502 $ 1,055,184
========== ==========
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