TO OUR STOCKHOLDERS, CUSTOMERS AND EMPLOYEES
Mueller's earnings rose 32 percent for the first quarter of 1996 compared
with the same quarter of 1995. Gross profit, net earnings, pounds of product
produced and shipped, and earnings per share all reached record levels. This
is our seventh record quarter in a row and the 17th consecutive quarter of
strong earnings performance.
Earnings for the first quarter of 1996 were $13.3 million, or 69 cents
per share, compared to earnings of $10.1 million or 53 cents per share for the
same quarter of 1995.
Net sales for the first quarter of 1996 totaled $180.5 million, an
increase of 5.1 percent over sales of $171.8 million for the first quarter of
1995. Furthermore, we shipped 109.3 million pounds of product in the first
quarter, or 5.6 percent more than the same period the year before.
Mueller's manufacturing operations performed very well during the first
quarter. The brass rod mill operated at full capacity and the same was true
of our copper tube mill. Our copper fittings business showed continued
strength and margins were good. However, our plastic fittings business was
once again disappointing as competitive pressure kept margins at depressed
levels.
Over the past 24 months, our Company has invested approximately $100
million in capital improvement programs. The purpose was to reduce costs,
update technology, and increase productivity and yield. In the first quarter
of 1996, we realized the initial increment of benefits these programs were
designed to achieve. We believe that additional benefits will accrue as the
year progresses. By year-end, we expect to fully benefit from these programs.
In March 1996, Mueller acquired the minority interest in Alaska Gold
Company, thereby making it a wholly owned subsidiary. Alaska Gold mines gold
in Nome, Alaska and as a wholly owned subsidiary, we will have greater
flexibility in planning for its future.
We are optimistic that business will remain strong for the balance of
1996, provided interest rates do not escalate. Currently, long-term mortgage
rates are low by historical standards. This usually signals good demand for
housing and consequently for the products we manufacture.
2
Our Annual Stockholders' meeting will be held in Memphis, Tennessee on
May 8, 1996. By now, you should have received the notice of the meeting as
well as the proxy material and the 1995 Annual Report. We welcome your
attendance, but if you cannot attend, 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 18, 1996
CORPORATE NEWS
O'HAGAN RECOGNIZED IN CEO OF THE YEAR COMPETITION
William D. O'Hagan, Chief Executive Officer of Mueller Industries, Inc., was
the bronze award winner in the Industrial: Metals category of Financial World
magazine's CEO of the Year competition. The annual competition begins with
more than 3,000 CEOs in a wide variety of industry groups. The winners are
determined by an exhaustive peer evaluation process.
3
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
For the Quarter Ended
March 30, 1996 April 1, 1995
Net sales $ 180,515 $ 171,770
Cost of goods sold 143,532 140,560
Depreciation and amortization 4,450 3,646
Selling, general, and
administrative expense 13,904 12,967
------- -------
Operating income 18,629 14,597
Interest expense (1,240) (1,377)
Other income, net 1,880 1,473
------- -------
Income before taxes 19,269 14,693
Income tax expense 5,977 4,643
------- -------
Net income $ 13,292 $ 10,050
======= =======
Net income per share:
Primary:
Average shares outstanding 19,368 18,898
Net income $ 0.69 $ 0.53
======= =======
Fully Diluted:
Average shares outstanding 19,464 18,956
Net income $ 0.68 $ 0.53
======= =======
4
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data)
March 30, 1996 December 30, 1995
ASSETS
Cash and cash equivalents $ 45,471 $ 48,357
Accounts receivable, net 99,328 83,712
Inventories 64,731 66,360
Other current assets 15,180 12,609
------- -------
Total current assets 224,710 211,038
Property, plant and equipment, net 224,116 221,012
Other assets 18,352 18,785
------- -------
$ 467,178 $ 450,835
======= =======
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 16,837 $ 16,249
Accounts payable 23,159 16,931
Other current liabilities 35,823 34,704
------- -------
Total current liabilities 75,819 67,884
Long-term debt 55,792 59,653
Other noncurrent liabilities 35,891 37,423
------- -------
Total liabilities 167,502 164,960
Minority interest in subsidiaries 325 -
Stockholders' equity 299,351 285,875
------- -------
$ 467,178 $ 450,835
======= =======
Book value per share $ 17.23 $ 16.48
======= =======