TO OUR STOCKHOLDERS:
Mueller's earnings rose 36 percent for the third quarter of 1995 compared
with the same quarter of 1994. This is the fifth record quarter in a row and
the 15th consecutive quarter of strong earnings performance.
Earnings for the third quarter of 1995 were $11.6 million, or 60 cents per
share, compared to earnings of $8.5 million or 45 cents per share for the same
quarter of 1994. Net sales for the third quarter of 1995 totaled $171.5
million compared with sales of $138.0 million for the same quarter of 1994.
Mueller's sales and earnings for the first three quarters of 1995 were the
best ever in our Company's history. However, this reflects only part of the
important developments taking place at our Company. Over the past 18 months,
we have not only acquired plastic fittings manufacturing operations located in
California and Michigan, but we have made significant progress toward
implementation of three major internal capital improvement programs. Most
companies our size would probably have undertaken only one, or perhaps two
such programs at a time. We decided to tackle all of these simultaneously, in
order to reduce our costs, accelerate our growth, and provide our customers
with the best possible product, availability, and service. We are pleased to
report that our copper tube modernization project and our new high-volume
copper fittings plant, both in Fulton, Mississippi, should be substantially
completed by the end of 1995. The Port Huron, Michigan indirect extrusion
press project should be completed shortly thereafter. In addition, the
ongoing modernization program at our copper fittings plant in Covington,
Tennessee, is on schedule and we should see increasing benefits from this
program by mid-1996. Needless to say, we expect to harvest substantial
benefits from these capital programs in the years ahead.
Last month, Mueller declared a two-for-one stock split of our common stock.
The stock commenced trading on a post-split basis on October 2, 1995.
Accordingly, all per share amounts in this report have been adjusted to
reflect the results of this split.
Also, we recently announced to our employees that our corporate
headquarters will be relocated from Wichita, Kansas to Memphis, Tennessee by
next spring. This move will place our corporate offices in closer proximity
to our manufacturing facilities in Tennessee and Northern Mississippi. To
achieve our desired results, our corporate management and staff must be
positioned and structured to provide the fullest level of leadership and
support to our operating businesses.
2
We continue to be optimistic regarding the outlook for future business
conditions in the housing industry. Long-term mortgage rates are low by
historical standards and this generally translates into increased demand for
housing.
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 18, 1995
3
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share data)
For the Quarter Ended
September 30, September 24,
1995 1994
Net sales $ 171,549 $ 137,975
Costs and expenses 154,519 126,977
----------- -----------
Operating income 17,030 10,998
Non operating income (expense), net (39) 1,035
----------- -----------
Income before taxes 16,991 12,033
Income tax expense 5,386 3,515
----------- -----------
Net income $ 11,605 $ 8,518
=========== ===========
Earnings per common
and common equivalent share:
Primary $ 0.60 $ 0.45
=========== ===========
Fully diluted $ 0.60 $ 0.45
=========== ===========
For the Nine-Months Ended
September 30, September 24,
1995 1994
Net sales $ 524,699 $ 395,363
Costs and expenses 477,451 366,996
----------- -----------
Operating income 47,248 28,367
Non operating income (expense), net 25 (552)
----------- -----------
Income before taxes 47,273 27,815
Income tax expense 14,955 9,337
----------- -----------
Net income $ 32,318 $ 18,478
=========== ===========
Earnings per common
and common equivalent share:
Primary $ 1.69 $ 0.92
=========== ===========
Fully diluted $ 1.68 $ 0.92
=========== ===========
4
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
September 30, December 31,
1995 1994
Assets
Current assets $ 206,332 $ 183,551
Property, plant and equipment, net 220,315 196,772
Other assets 33,372 50,432
----------- -----------
$ 460,019 $ 430,755
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities $ 81,214 $ 67,221
Long-term debt 62,727 76,125
Other noncurrent liabilities 42,576 45,461
----------- -----------
Total liabilities 186,517 188,807
----------- -----------
Stockholders' equity:
Common stock 200 100
Paid-in capital, common 254,056 254,251
Retained earnings since January, 1991 54,305 21,987
Cumulative translation adjustments (2,322) (2,832)
Treasury common stock at cost (32,737) (31,558)
----------- -----------
Total stockholders' equity 273,502 241,948
----------- -----------
$ 460,019 $ 430,755
=========== ===========
Book value per share $ 15.78 $ 13.91
=========== ===========
5
DIRECTORS AND OFFICERS
DIRECTORS
Harvey L. Karp Chairman of the Board
Mueller Industries, Inc.
Robert B. Hodes (1) (3) Partner
Willkie Farr & Gallagher
Allan Mactier (1) (2) (3) Private Investor
William D. O'Hagan President and Chief Executive Officer
Mueller Industries, Inc.
Robert J. Pasquarelli (1) (2) Chief Executive Officer of
New Jersey Steel Corporation
OFFICERS
Harvey L. Karp Chairman of the Board
William D. O'Hagan President and Chief Executive Officer
Earl W. Bunkers Executive Vice President and
Chief Financial Officer
Harvey W. Clements Vice President and General Manager -
Tube Division
John B. Hansen Vice President and General Manager-
Fittings Division
William H. Hensley Vice President, General Counsel
and Secretary
Richard G. Miller Vice President and
Chief Information Officer
Lee R. Nyman Vice President - Manufacturing/
Management Engineering
James H. Rourke Vice President and General Manager -
Industrial Division
Roy C. Harris Corporate Controller
Kent A. McKee Treasurer and Assistant Secretary
Mueller Industries, Inc./2959 N. Rock Road/Wichita, KS 67226/(316)636-6300
[FN]
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Nominating Committee