Exhibit 99.1
Mueller Industries, Inc. Reports Fourth Quarter and Fiscal 2003 Earnings
MEMPHIS, Tenn., Feb. 3 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman
of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's earnings
from continuing operations for fiscal 2003 were $1.19 per diluted share,
compared with the $1.92 reported a year ago. Income from continuing operations
for the year was $44.2 million, compared with $71.2 million for the prior year.
Net sales for the twelve-month period were $999.1 million, versus $953.0 million
in 2002. Net income for 2003 was $45.4 million. For 2002, net income of $78.0
million includes a gain on the disposition of Utah Railway Company of $21.1
million and a loss on the disposition of French manufacturing operations of
$13.4 million, both net of income taxes.
For the quarter ended December 27, 2003, income from continuing operations
was $11.0 million, or 30 cents per diluted share, which compares with $8.8
million, or 24 cents per diluted share for the same period a year ago. Net sales
for the three months ended December 27, 2003, were $267.8 million, compared with
net sales of $216.1 million for the 2002 period.
Financial and Operating Highlights
Regarding the 2003 results, Mr. Karp said:
* "Mueller ended the year with $255.1 million in cash.
* "We're virtually debt free, as cash-on-hand significantly exceeds total
debt of $14.3 million.
* "Our current ratio remains excellent at 5 to 1 and our working capital is
$456.8 million.
* "Cash from continuing operations was $73.4 million during 2003. We
continue to generate positive cash flow; should our operating results
improve in 2004, we expect cash flow to increase significantly.
* "Capital expenditures totaled $27.2 million during 2003. For the fiscal
year 2004, we expect capital expenditures to be approximately $25
million, which is less than depreciation.
* "We invested $10.8 million in acquisitions in early 2003, increasing our
interest in Conbraco Industries, Inc.
* "Stockholders' equity has grown to $814.9 million, or $23.77 per share.
* "Pounds of product shipped were 695.8 million in 2003 compared with 694.0
million for 2002.
* "As core product line spreads narrowed early in the year, gross profit
and operating income bottomed out in the first quarter, then steadily
improved throughout the year. Selling, general, and administrative
expenses increased over 2002 primarily due to higher distribution costs,
employee benefit plan costs, and increased provision for doubtful
accounts.
* "Our Standard Products Division posted operating earnings of $54.1
million, compared to $79.0 million in 2002. Standard Products Division's
net sales were $717.6 million for the year, compared with $679.3 million
for 2002. Operating results were negatively impacted by lower spreads in
copper tube. Spreads bottomed out in the first quarter of 2003 and
improved modestly throughout the balance of the year.
* "Our Industrial Products Division posted operating earnings of $11.7
million during the year on net sales of $292.0 million, which compares
with operating earnings of $20.4 million on net sales of $279.6 million
for 2002."
Discussion of Income Taxes
During 2003, the Company recognized a deferred income tax benefit related to
a 1999 tax operating loss that resulted from the sale of a subsidiary in that
tax year. Without this deferred income tax benefit, the Company's income from
continuing operations for 2003 would have been approximately $34.9 million, or
95 cents per diluted share.
During 2002, the Company sold the Utah Railway Company. This transaction
generated a capital gain for income tax purposes. Without the income tax
benefits related to the transaction, the Company's income from continuing
operations for 2002 would have been approximately $58.5 million, or $1.58 per
diluted share.
Business Outlook for 2004
Discussing the outlook for the next fiscal year, Mr. Karp said, "The U.S.
housing industry is poised for another strong year in 2004. Housing starts in
2003 totaled 1.8 million units, and housing economists are predicting a
similarly high number for 2004. In addition, mortgage rates remain
extraordinarily attractive and housing affordability statistics show that more
people than ever can afford to buy homes.
"Moreover, commercial construction, which for the past several years has
been lagging, is expected to rebound in 2004. This is an important market for
Mueller, as it absorbs many of our high value-added products.
"All of the above is in the context of an improving national economy, which,
in the third quarter of 2003, experienced the highest quarterly growth rate in
the past 20 years."
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 Ended For the Year Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2003 2002 2003 2002
(Unaudited) (Unaudited)
Net sales $267,782 $216,129 $999,078 $952,983
Cost of goods sold 218,513 175,322 815,849 744,781
Depreciation and amortization 9,715 9,924 38,954 37,440
Selling, general, and
administrative expense 23,719 19,371 94,891 85,006
Operating income 15,835 11,512 49,384 85,756
Interest expense (298) (304) (1,168) (1,460)
Environmental expense (395) (751) (1,165) (1,639)
Other income, net 820 1,666 4,385 5,810
Income from continuing
operations before
income taxes 15,962 12,123 51,436 88,467
Income tax expense (4,917) (3,349) (7,215) (17,290)
Income from continuing
operations 11,045 8,774 44,221 71,177
Loss from operation of
discontinued operations,
net of income taxes - (393) (539) (886)
Gain (loss) on disposition
of discontinued operations,
net of income taxes - (13,422) 1,699 7,701
Net income $11,045 $(5,041) $45,381 $77,992
Earnings (loss) per share:
Basic earnings (loss) per share:
Weighted average
shares outstanding 34,269 34,255 34,264 33,993
From continuing
operations $0.32 $0.25 $1.29 $2.09
From discontinued
operations - (0.01) (0.02) (0.03)
From disposition
of discontinued
operations - (0.39) 0.05 0.23
Basic earnings
(loss) per share $0.32 $(0.15) $1.32 $2.29
Diluted earnings (loss) per share:
Weighted average shares
outstanding plus
assumed conversions 37,000 36,825 36,861 37,048
From continuing
operations $0.30 $0.24 $1.19 $1.92
From discontinued
operations - (0.01) (0.01) (0.02)
From disposition
of discontinued
operations - (0.37) 0.05 0.21
Diluted earnings
(loss) per share $0.30 $(0.14) $1.23 $2.11
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 27, December 28,
2003 2002
(Unaudited)
ASSETS
Cash and cash equivalents $255,088 $217,601
Accounts receivable, net 163,006 132,427
Inventories 140,548 142,953
Other current assets 11,713 7,366
Total current assets 570,355 500,347
Property, plant, and equipment, net 345,537 352,469
Other assets 139,292 135,131
$1,055,184 $987,947
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $2,835 $4,161
Accounts payable 42,081 41,004
Accrued wages and other employee costs 25,631 26,199
Other current liabilities 42,959 34,987
Total current liabilities 113,506 106,351
Long-term debt 11,437 14,005
Pension and postretirement liabilities 31,643 35,550
Environmental reserves 9,560 9,110
Deferred income taxes 63,734 59,269
Other noncurrent liabilities 10,238 9,718
Total liabilities 240,118 234,003
Minority interest in subsidiaries 208 421
Stockholders' equity 814,858 753,523
$1,055,184 $987,947
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Year Ended
December 27, December 28,
2003 2002
(Unaudited)
Operating activities:
Net income from continuing operations $44,221 $71,177
Reconciliation of net income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization 38,954 37,440
Deferred income taxes (287) 9,686
Loss (gain) on disposal of properties 290 (485)
Minority interest in subsidiaries,
net of dividend paid (213) 150
Income tax benefit from exercise
of stock options 18 13,243
Changes in assets and liabilities, net (9,567) (6,994)
Net cash provided by operating activities 73,416 124,217
Investing activities:
Capital expenditures (27,236) (23,265)
Acquisition of businesses (10,806) (27,777)
Proceeds from sale of discontinued operations - 55,403
Other, net 1,861 10,610
Net cash (used in) provided by
investing activities (36,181) 14,971
Financing activities:
Repayments of long-term debt (3,894) (34,119)
Proceeds from the sale of treasury stock 389 3,204
Acquisition of treasury stock - (14,754)
Net cash used in financing activities (3,505) (45,669)
Effect of exchange rate changes on cash 3,505 719
Increase in cash and cash equivalents 37,235 94,238
Cash provided by discontinued operations 252 1,501
Cash and cash equivalents at the
beginning of the year 217,601 121,862
Cash and cash equivalents at the end
of the year $255,088 $217,601
SOURCE Mueller Industries, Inc.
-0- 02/03/2004
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/
(MLI)
CO: Mueller Industries, Inc.
ST: Tennessee
IN: MNG CST
SU: ERN