Exhibit 19.1
TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES
Mueller's income from continuing operations for the third quarter was
$21.0 million, or 57 cents per diluted share, which compares with $18.8
million, or 51 cents per diluted share, for the third quarter of fiscal 2004.
Year-to-date, the Company earned $53.4 million from continuing operations,
or $1.44 per diluted share compared with $63.8 million, or $1.73 per diluted
share, for the first nine months of 2004. The current period includes
approximately $4.8 million of interest expense (approximately 9 cents per
diluted share net of tax) related primarily to the Subordinated Debentures
issued in the fourth quarter of 2004.
Net sales for the three months ended October 1, 2005 were $434.1
million, compared with net sales of $322.5 million for the third quarter of
2004. For the first nine months of 2005 net sales were $1.25 billion
compared with net sales of $1.05 billion in 2004. The increase in third
quarter sales was attributable to increased volumes as well as increased
prices as a result of higher raw material costs. We continued to realize
solid results from our copper and plastic fittings businesses and earnings
were benefited by businesses acquired during the latter half of 2004.
During the third quarter of 2005 we settled a business interruption
claim related to operations sold in 2002. This $3.3 million after-tax gain
was classified as discontinued operations.
Mueller's financial position remains sound. We ended the quarter with
$108.0 million of cash on hand. Also, the Company declared and paid its
regular quarterly cash dividend of ten cents per common share during the
third quarter.
Over the next twelve months we believe the housing industry will be
adjusting to higher prices, higher mortgage rates, and more restrictive
lending standards. This may result in a modest decline in housing starts,
but overall, starts for 2006 will likely remain at the high end of
historical levels. At the same time, non-housing construction activity is
trending upward and this is an important sector for Mueller's business.
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
October 21, 2005
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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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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
October 1, 2005 September 25, 2004
(Unaudited)
Net sales $ 434,130 $ 322,512
Cost of goods sold 360,514 263,188
Depreciation and amortization 10,082 10,278
Selling, general, and
administrative expense 33,297 24,529
Impairment charge - -
---------- ----------
Operating income 30,237 24,517
Interest expense (4,794) (236)
Other income, net 5,421 1,357
---------- ----------
Income from continuing operations
before income taxes 30,864 25,638
Income tax expense (9,848) (6,884)
---------- ----------
Income from continuing operations 21,016 18,754
Discontinued operations, net of tax 3,324 -
---------- ----------
Net income $ 24,340 $ 18,754
=========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued)
(In thousands, except per share data)
For the Quarter Ended
October 1, 2005 September 25, 2004
(Unaudited)
Basic earnings per share:
Weighted average shares outstanding 36,625 35,283
=========== ==========
From continuing operations $ 0.57 $ 0.53
From discontinued operations 0.09 -
----------- ----------
Basic earnings per share $ 0.66 $ 0.53
=========== ==========
Diluted earnings per share:
Weighted average shares outstanding
plus assumed conversions 37,120 36,914
=========== ==========
From continuing operations $ 0.57 $ 0.51
From discontinued operations 0.09 -
----------- ----------
Diluted earnings per share $ 0.66 $ 0.51
=========== ==========
Dividends per share $ 0.10 $ 0.10
=========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued)
(In thousands, except per share data)
For the Nine Months Ended
October 1, 2005 September 25, 2004
(Unaudited)
Net sales $ 1,246,299 $ 1,049,293
Cost of goods sold 1,040,201 847,937
Depreciation and amortization 30,571 30,402
Selling, general, and
administrative expense 92,788 79,410
Impairment charge - 3,941
---------- ----------
Operating income 82,739 87,603
Interest expense (14,730) (659)
Other income, net 10,188 5,161
---------- ----------
Income from continuing operations
before income taxes 78,197 92,105
Income tax expense (24,790) (28,343)
---------- ----------
Income from continuing operations 53,407 63,762
Discontinued operations, net of tax 3,324 -
---------- ----------
Net income $ 56,731 $ 63,762
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued)
(In thousands, except per share data)
For the Nine Months Ended
October 1, 2005 September 25, 2004
(Unaudited)
Basic earnings per share:
Weighted average shares outstanding 36,576 34,973
=========== ==========
From continuing operations $ 1.46 $ 1.82
From discontinued operations 0.09 -
----------- ----------
Basic earnings per share $ 1.55 $ 1.82
=========== ==========
Diluted earnings per share:
Weighted average shares outstanding
plus assumed conversions 37,112 36,905
=========== ==========
From continuing operations $ 1.44 $ 1.73
From discontinued operations 0.09 -
----------- ----------
Diluted earnings per share $ 1.53 $ 1.73
=========== ==========
Dividends per share $ 0.30 $ 0.30
=========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 1, 2005 December 25, 2004
(Unaudited)
Assets
Cash and cash equivalents $ 108,012 $ 47,449
Accounts receivable, net 251,406 201,396
Inventories 183,205 187,853
Other current assets 19,985 18,633
---------- ----------
Total current assets 562,608 455,331
Property, plant, and equipment, net 309,962 335,610
Other assets 188,916 172,790
---------- ----------
$ 1,061,486 $ 963,731
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 887 $ 5,328
Accounts payable 117,282 79,723
Other current liabilities 117,922 95,767
---------- ----------
Total current liabilities 236,091 180,818
Long-term debt 312,940 310,650
Pension and postretirement liabilities 32,272 33,167
Environmental reserves 9,183 9,503
Deferred income taxes 64,033 67,479
Other noncurrent liabilities 10,122 10,361
---------- ----------
Total liabilities 664,641 611,978
Minority interest in subsidiaries 74 67
Stockholders' equity 396,771 351,686
---------- ----------
$ 1,061,486 $ 963,731
========== ==========
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