Mueller Industries, Inc. Reports Second Quarter Earnings
MEMPHIS, Tenn., July 15 /PRNewswire-FirstCall/ --
Quarterly and Year-to-Date Earnings
Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), today
announced the Company's results for the second quarter and first-half period
ended June 28, 2003. For the second quarter ended June 28, 2003, earnings per
diluted share from continuing operations were 24 cents compared with 11 cents
in the first quarter of 2003 and 50 cents for the second quarter of 2002.
Income from continuing operations for the second quarter was $9.0 million
compared with $18.7 million for the second quarter of fiscal 2002. Net sales
for the three months ended June 28, 2003, were $248.2 million compared with
net sales of $260.5 million for the second quarter of 2002.
Net sales in the first half of 2003 were $480.2 million compared with net
sales of $509.6 million in the 2002 period. Year-to-date, income from
continuing operations was $13.4 million compared with $36.6 million for the
same period of 2002. Earnings per diluted share from continuing operations
were 36 cents for the first half of 2003 compared with 98 cents reported a
year ago. Net income was $12.9 million year-to-date compared with
$36.4 million for the same period last year.
Financial Highlights
Regarding the financial results, Mr. Karp said, "Mueller's financial
position is excellent.
* "Mueller ended the quarter with $207.4 million of cash on hand. Our
cash position significantly exceeds our total debt of $16.1 million.
* "Our current ratio is nearly 5 to 1 and our working capital is $410.8
million.
* "In the first half, we funded $10.8 million for acquisitions and
investments and $16.0 million for capital expenditures. Capital
expenditures for the current fiscal year should be less than
depreciation."
Operating Highlights
With regard to second quarter 2003 operations, Mr. Karp noted the
following:
* "We shipped approximately 175.5 million pounds of product versus 186.6
million pounds in the second quarter of 2002.
* "Gross profit was down to $44.8 million in the second quarter of 2003
which is significantly less than the second quarter of 2002, but a 12
percent rebound from the first quarter of 2003.
* "Our Standard Products Division posted operating earnings of $11.9
million, compared with $25.4 million in the second quarter of 2002.
Standard Products Division's net sales were $178.9 million for the
quarter, compared with $187.2 million for the same period a year ago.
Results were less than expected due primarily to weak volume and margins
in copper tube. Copper tube spreads continue to be under pressure,
although they appear to have bottomed out.
* "Mueller's Industrial Products Division posted operating earnings of
$3.6 million during the second quarter on sales of $71.6 million, which
compares with operating earnings of $5.8 million from sales of $74.9
million during the second quarter of 2002.
* "We are pleased with our performance in Europe as operations returned to
profitability. Volumes are up over last year as well as the first
quarter of 2003, although margins remain below last year's level."
Business Outlook
Discussing the business outlook, Mr. Karp said, "Housing fundamentals
remain positive. Low mortgage rates continue to stimulate new home
construction and purchasing. Also, building permits, an excellent indicator
of future housing activity, remain at a high level. Household growth, the
primary driver of housing demand, projected at 12 million for the decade,
combined with demand for replacements and second homes, could result in
another strong decade of demand for our products. A rebound in the commercial
construction sector could result in an additional upswing in demand.
"As our copper tube competitors continue to report losses, we have
remained profitable, although significantly less than previous levels. We
remain cautiously optimistic based upon our belief that housing fundamentals
will remain strong and pricing will improve with continued improvements in
demand."
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, market demand, pricing, and
competitive and technological factors, among others, as set forth in the
Company's SEC filings.
Mueller Industries, Inc. is a leading manufacturer of copper tube and
fittings; brass and copper alloy rod, bar and shapes; aluminum and brass
forgings; aluminum and copper impact extrusions; plastic fittings and valves;
refrigeration valves and fittings; and fabricated tubular products. Mueller's
operations are located throughout the United States and in Canada, Mexico, and
Great Britain.
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the Quarter For the Six Months
Ended Ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
(Unaudited) (Unaudited)
Net sales $248,221 $260,507 $480,243 $509,560
Cost of goods sold 203,461 201,351 395,376 393,157
Depreciation and
amortization 9,722 9,163 19,462 18,239
Selling, general, and
administrative expense 23,575 22,374 46,871 44,355
Operating income 11,463 27,619 18,534 53,809
Interest expense (292) (343) (603) (836)
Environmental expense (257) (230) (464) (405)
Other income, net 2,182 1,414 2,739 3,040
Income from continuing
operations before
before income taxes 13,096 28,460 20,206 55,608
Income tax expense (4,117) (9,744) (6,767) (19,027)
Income from continuing
operations 8,979 18,716 13,439 36,581
Loss from operation of
discontinued
operations, net of tax -- (251) (539) (180)
Net income $8,979 $18,465 $12,900 $36,401
Earnings (loss) per share:
Basic earnings per
share:
Weighted average
shares outstanding 34,263 33,940 34,260 33,724
From continuing
operations $0.26 $0.55 $0.40 $1.09
From discontinued
operations -- (0.01) (0.02) (0.01)
Basic earnings per
share $0.26 $0.54 $0.38 $1.08
Diluted earnings per
share:
Weighted average
shares outstanding
plus assumed
conversions 36,803 37,198 36,787 37,267
From continuing
operations $0.24 $0.50 $0.36 $0.98
From discontinued
operations -- -- (0.01) --
Diluted earnings
per share $0.24 $0.50 $0.35 $0.98
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 28, December 28,
2003 2002
(Unaudited)
ASSETS
Cash and cash equivalents $207,354 $217,601
Accounts receivable, net 160,105 132,427
Inventories 139,586 142,953
Other current assets 6,759 7,366
Total current assets 513,804 500,347
Property, plant, and equipment,
net 350,970 352,469
Other assets 141,189 135,131
$1,005,963 $987,947
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current portion of long-term
debt $3,711 $4,161
Accounts payable 37,717 41,004
Other current liabilities 61,606 61,186
Total current liabilities 103,034 106,351
Long-term debt 12,410 14,005
Other noncurrent liabilities 118,584 113,647
Total liabilities 234,028 234,003
Minority interest in
subsidiaries 248 421
Stockholders' equity 771,687 753,523
$1,005,963 $987,947
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Six Months Ended
June 28, June 29,
2003 2002
(Unaudited)
Operating activities:
Net income from continuing operations $13,439 $36,581
Reconciliation of net income from
continuing operations
to net cash provided by operating
activities:
Depreciation and amortization 19,462 18,239
Deferred income taxes 4,030 6,854
Loss (gain) on disposal of
properties 193 (962)
Minority interest in
subsidiaries, net of dividend
paid (173) 66
Income tax benefit from exercise
of stock options -- 10,252
Changes in assets and
liabilities, net (22,814) (15,117)
Net cash provided by operating
activities 14,137 55,913
Investing activities:
Purchase of Conbraco Industries, Inc.
common stock (10,806) --
Capital expenditures (15,982) (13,121)
Other, net 659 3,691
Net cash used in investing activities (26,129) (9,430)
Financing activities:
Repayments of long-term debt (2,045) (32,066)
Acquisition of treasury stock -- (10,450)
Proceeds from the sale of treasury
stock 244 2,587
Net cash used in financing activities (1,801) (39,929)
Effect of exchange rate changes on
cash 3,294 1,066
(Decrease) increase in cash and cash
equivalents (10,499) 7,620
Cash provided by (used in)
discontinued operations 252 (304)
Cash and cash equivalents at the
beginning of the period 217,601 121,862
Cash and cash equivalents at the end
of the period $207,354 $129,178