Exhibit 19.1
TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES
Mueller's Second Quarter Earnings
Mueller's second quarter of 2006 was our best quarter ever. Records
were set for sales, net income and earnings per share.
Net income for the quarter was $58.8 million, or $1.57 per diluted
share, compared with $17.2 million, or 46 cents per diluted share for the
same quarter of 2005.
Second quarter net sales were $779.7 million, compared with net sales
of $410.5 million for the second quarter of 2005. Mueller's financial
strength and flexibility played an important role in our success during the
quarter. The price of copper, our principal raw material, gyrated widely.
On average, the price of copper more than doubled compared with the same
quarter last year. Nonetheless, we were able to secure copper supplies
which enabled us to service our customers' orders on a timely basis. In all,
Mueller committed over $85.0 million in new working capital to our business
during the quarter.
All of our businesses performed well during the quarter, with
particular emphasis on the Plumbing & Refrigeration segment. Our
manufacturing operations in Europe, China and Mexico also continued to meet
or exceed their goals.
Mueller's financial position remains sound. We ended the quarter with
$138.9 million of cash on-hand. Also, the Company declared and paid its
regular quarterly cash dividend of ten cents per common share during the
second quarter.
Our Annual Stockholders' Meeting was held at Mueller's headquarters in
Memphis, Tennessee on May 4, 2006. The stockholders reelected our seven
directors, approved the appointment of Ernst & Young LLP as our independent
registered public accounting firm and approved the amendment and restatement
of the Company's 2002 Stock Option Plan.
Our business outlook for the third quarter of 2006 remains positive.
Sincerely,
/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
July 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.
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
July 1, 2006 July 2, 2005
(Unaudited)
Net sales $ 779,663 $ 410,506
Cost of goods sold 637,038 345,663
Depreciation and amortization 10,376 10,411
Selling, general, and
administrative expense 39,689 29,136
---------- ----------
Operating income 92,560 25,296
Interest expense (5,214) (4,752)
Other (expense) income, net (67) 3,973
---------- ----------
Income before income taxes 87,279 24,517
Income tax expense (28,529) (7,334)
---------- ----------
Net income $ 58,750 $ 17,183
========== ==========
Weighted average shares for basic
earnings per share 36,891 36,599
Effect of dilutive stock options 421 466
---------- ----------
Adjusted weighted average shares
for diluted earnings per share 37,312 37,065
---------- ----------
Basic earnings per share $ 1.59 $ 0.47
========== ==========
Diluted earnings per share $ 1.57 $ 0.46
========== ==========
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 Six Months Ended
July 1, 2006 July 2, 2005
(Unaudited)
Net sales $ 1,330,702 $ 812,169
Cost of goods sold 1,094,107 679,687
Depreciation and amortization 20,571 20,489
Selling, general, and
administrative expense 74,648 59,491
---------- ----------
Operating income 141,376 52,502
Interest expense (10,076) (9,936)
Other (expense) income, net 1,946 4,767
---------- ----------
Income before income taxes 133,246 47,333
Income tax expense (41,131) (14,942)
---------- ----------
Net income $ 92,115 $ 32,391
========== ==========
Weighted average shares for basic
earnings per share 36,791 36,552
Effect of dilutive stock options 405 556
---------- ----------
Adjusted weighted average shares
for diluted earnings per share 37,196 37,108
---------- ----------
Basic earnings per share $ 2.50 $ 0.89
========== ==========
Diluted earnings per share $ 2.48 $ 0.87
========== ==========
Dividends per share $ 0.20 $ 0.20
========== ==========
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MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 1, 2006 December 31, 2005
(Unaudited)
Assets
Cash and cash equivalents $ 138,887 $ 129,685
Accounts receivable, net 408,666 248,395
Inventories 248,668 196,987
Other current assets 40,308 36,919
---------- ----------
Total current assets 836,529 611,986
Property, plant, and equipment, net 313,248 307,046
Other assets 169,724 185,606
---------- ----------
$ 1,319,501 $ 1,104,638
========== ==========
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 26,961 $ 4,120
Accounts payable 206,171 124,216
Other current liabilities 132,068 123,056
---------- ----------
Total current liabilities 365,200 251,392
Long-term debt 308,483 312,070
Pension and postretirement liabilities 35,834 35,236
Environmental reserves 8,997 9,073
Deferred income taxes 51,341 63,944
Other noncurrent liabilities 2,884 3,078
---------- ----------
Total liabilities 772,739 674,793
Minority interest in subsidiaries 21,017 6,937
Stockholders' equity 525,745 422,908
---------- ----------
$ 1,319,501 $ 1,104,638
========== ==========
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