Exhibit 19.1
Mueller's First Quarter Earnings Per Share
More Than Doubles Over Same Quarter Last Year
To Our Stockholders, Customers, and Employees
The first quarter of 2006 was Mueller's best first quarter ever. Net
income was $33.4 million, or 90 cents per diluted share, compared with $15.2
million, or 41 cents per diluted share, for the same quarter last year.
Sales for the first quarter of 2006 were $551.0 million, a 37 percent
increase over sales of $401.7 million for the first quarter of 2005. The sales
increase was largely due to the increased cost of copper, our principal raw
material, which is reflected in the price of our finished products. The Comex
average price of copper was $2.25 per pound in the first quarter of 2006 versus
$1.47 per pound in the first quarter of 2005.
Margins in our core product lines remained on a good track, which
continued the positive trend reflected in the fourth quarter of last year.
We also benefited from our operations in Europe and Asia, which performed well.
We ended the first quarter with $83.2 million in cash on hand, despite
additional funding of accounts receivables and inventories caused by continued
rising raw material costs.
The residential construction sector will likely slow in 2006; however, the
number of housing starts will remain at the high end of historical levels. On
the other hand, commercial construction activity has picked up and it appears
that it will continue to grow in 2006. If this scenario develops, Mueller is
well-positioned, as our commercial business significantly contributes to our
results.
Our Annual Stockholders' Meeting will be held at Mueller's headquarters in
Memphis, Tennessee on May 4, 2006. We hope you can attend, but if you cannot,
we urge you to sign and return your proxy card.
Very Truly Yours,
/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 25, 2006
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.
-1-
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
April 1, 2006 April 2, 2005
(Unaudited)
Net sales $ 551,039 $ 401,663
Cost of goods sold 457,069 334,024
Depreciation and amortization 10,195 10,078
Selling, general, and
administrative expense 34,959 30,355
---------- ----------
Operating income 48,816 27,206
Interest expense (4,862) (5,184)
Other income, net 2,013 794
---------- ----------
Income before taxes 45,967 22,816
Income tax expense (12,602) (7,608)
---------- ----------
Net income $ 33,365 $ 15,208
========== ==========
Basic earnings per share:
Weighted average shares
outstanding 36,691 36,505
========== ==========
Basic earnings per share $ 0.91 $ 0.42
========== ==========
Diluted earnings per share:
Weighted average shares
outstanding plus assumed
conversions 37,081 37,151
========== ==========
Diluted earnings per share $ 0.90 $ 0.41
========== ==========
Dividends per share $ 0.10 $ 0.10
========== ==========
-2-
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 1, 2006 December 31, 2005
(Unaudited)
Assets
Cash and cash equivalents $ 83,222 $ 129,685
Accounts receivable, net 302,944 248,395
Inventories 211,708 196,987
Other current assets 40,835 36,919
---------- ----------
Total current assets 638,709 611,986
Property, plant, and equipment, net 313,974 307,046
Other assets 190,619 185,606
---------- ----------
$ 1,143,302 $ 1,104,638
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 16,978 $ 4,120
Accounts payable 114,510 124,216
Other current liabilities 117,299 123,056
---------- ----------
Total current liabilities 248,787 251,392
Long-term debt 310,287 312,070
Pension and postretirement liabilities 35,026 35,236
Environmental reserves 9,063 9,073
Deferred income taxes 59,916 63,944
Other noncurrent liabilities 3,011 3,078
---------- ----------
Total liabilities 666,090 674,793
Minority interest in subsidiaries 19,564 6,937
Stockholders' equity 457,648 422,908
---------- ----------
$ 1,143,302 $ 1,104,638
========== ==========
-3-