Exhibit 19.1
To Our Stockholders, Customers, and Employees
Mueller's net income for the first quarter was $15.2 million, or 41 cents
per diluted share, compared with $18.0 million, or 49 cents per diluted share
for the same quarter of 2004. Operating income and gross profit improved
compared with the first quarter of 2004. Our current period results include
$5.0 million of additional interest expense due primarily to the Subordinated
Debentures that we issued late last year.
First quarter net sales were $401.7 million, compared with net sales of
$346.0 million for the first quarter of 2004. This increase in sales was
partially attributable to rising raw material costs, particularly the price of
copper, as well as the contribution of recently acquired businesses (Vemco and
Mueller Comercial SA). Spreads in our copper tube and brass rod businesses
narrowed as demand softened from the high levels we enjoyed in the first half
last year.
Our copper and plastic fittings businesses reported improvements as did
B&K. Acquired businesses contributed as expected and we are optimistic about
additional opportunities.
Mueller's financial position remains sound after the distribution of the
Special Dividend late last year. We ended the quarter with almost $70 million
of cash on hand. Also, the Company declared and paid its regular quarterly
cash dividend of ten cents per common share during the first quarter.
We are carefully assessing business conditions with a view toward reacting
promptly as need arises. Recently, interest rates have risen; nonetheless, 30-
year fixed rate mortgages are still very attractive and housing starts and
permits are at a historically high level of 2 million units (seasonally
adjusted annual rate). Importantly, commercial construction is rising and GDP
and employment remain relatively strong.
Our Annual Stockholders' Meeting will be held at Mueller's headquarters in
Memphis, Tennessee on May 5, 2005. We hope you can attend, but if you cannot,
we urge you to sign and return your proxy card.
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
April 22, 2005
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 financing, 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
April 2, 2005 March 27, 2004
(Unaudited)
Net sales $ 401,663 $ 345,959
Cost of goods sold 334,024 281,029
Depreciation and amortization 10,078 9,965
Selling, general, and
administrative expense 30,355 26,682
Impairment charge - 3,941
---------- ----------
Operating income 27,206 24,342
Interest expense (5,184) (224)
Other income, net 794 2,624
---------- ----------
Income before taxes 22,816 26,742
Income tax expense (7,608) (8,782)
---------- ----------
Net income $ 15,208 $ 17,960
========== ==========
Basic earnings per share:
Weighted average shares
outstanding 36,505 34,658
========== ==========
Basic earnings per share $ 0.42 $ 0.52
========== ==========
Diluted earnings per share:
Weighted average shares
outstanding plus assumed
conversions 37,151 36,908
========== ==========
Diluted earnings per share $ 0.41 $ 0.49
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 2, 2005 December 25, 2004
(Unaudited)
Assets
Cash and cash equivalents $ 69,720 $ 47,449
Accounts receivable, net 219,838 201,396
Inventories 193,577 187,853
Other current assets 18,977 18,633
---------- ----------
Total current assets 502,112 455,331
Property, plant, and equipment, net 329,043 335,610
Other assets 174,948 172,790
---------- ----------
$ 1,006,103 $ 963,731
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 2,346 $ 5,328
Accounts payable 115,872 79,723
Other current liabilities 92,973 95,767
---------- ----------
Total current liabilities 211,191 180,818
Long-term debt 310,595 310,650
Pension and postretirement liabilities 33,114 33,167
Environmental reserves 9,435 9,503
Deferred income taxes 66,367 67,479
Other noncurrent liabilities 10,141 10,361
---------- ----------
Total liabilities 640,843 611,978
Minority interest in subsidiaries 67 67
Stockholders' equity 365,193 351,686
---------- ----------
$ 1,006,103 $ 963,731
========== ==========
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