Exhibit 99.1
Mueller Industries, Inc. Reports Third Quarter Earnings
MEMPHIS, Tenn., Oct. 14 /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 third quarter and nine-months ended
September 25, 2004. Operating income increased more than sixty percent to
$24.5 million for the third quarter of 2004 which compares with $15.0 million
in the third quarter of 2003. For the third quarter of 2004, earnings per
diluted share were 51 cents compared with 58 cents in the third quarter of
2003. Income from continuing operations was $18.8 million for the third
quarter of 2004 compared with $19.7 million for the third quarter of fiscal
2003. Net sales for the three months ended September 25, 2004, were $322.5
million compared with net sales of $251.1 million for the same quarter of last
year.
During the third quarter of 2003, the Company recognized a deferred income
tax benefit of $9.3 million 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 would have been
approximately $10.4 million, or 28 cents per diluted share, in the third
quarter of 2003.
Net sales in the first nine months of 2004 were $1.05 billion compared
with net sales of $731.3 million for the same period of 2003. For the nine-
month period of 2004, operating income increased to $87.6 million compared
with $33.5 million in 2003. Year-to-date, net income was $63.8 million, or
$1.73 per diluted share, compared with $34.3 million, or 93 cents per diluted
share, for the same period last year.
Financial Highlights
Regarding the results, Mr. Karp said, "Mueller's third quarter was solid
and our financial position remains excellent."
* "Pounds of product shipped were 170.8 million in the third quarter of
2004 compared with 175.0 million for 2003. Third quarter 2004 volume
decreased from second quarter levels as customers adjusted their
inventory levels. First half demand may have been influenced by
concerns of availability and rapidly rising material costs.
* "Our Standard Products Division posted operating earnings of $22.2
million in the third quarter, compared with $15.6 million in the third
quarter of 2003. Standard Products Division's net sales were $233.7
million for third quarter, compared with $184.3 million for 2003.
Operating results increased on the strength of higher margins,
particularly copper tube and fittings, offset by lower volumes.
* "Results at our European operations continue to improve.
* "Our Industrial Products Division posted operating earnings of $6.0
million during the quarter on net sales of $92.6 million, which
compares with operating income of $2.9 million and net sales of $70.1
million for the same period a year ago.
* "Capital expenditures totaled $13.1 million during the first nine
months of 2004. For the fiscal year 2004, we expect capital
expenditures to be approximately $20 million.
* "We invested $14.6 million during the quarter to acquire Vemco
Brasscapri, Ltd. which distributes plumbing products in the United
Kingdom. Vemco's net sales are approximately $26 million annually.
This acquisition will broaden our product line in the United Kingdom
and should provide opportunities to leverage our manufacturing
operations."
Special Dividend
The Company's previously announced special dividend will be paid on
October 26, 2004 to stockholders of record on October 12, 2004. In declaring
the special dividend, the Board of Directors considered many factors,
including that Mueller was over-capitalized. By recapitalizing Mueller
through this special dividend, the Company is returning to its stockholders
the significant value that has accumulated from recent years' operations.
Further, the Company's return on equity should improve substantially by
reducing the capital employed. Upon distribution of the special dividend,
stockholders' equity will be approximately $333 million, cash will decrease by
approximately $240 million, long-term debt will increase by approximately $305
million, and interest expense will increase by approximately $18 million
annually. After the distribution, the Company expects to have adequate
financial resources to meet ordinary capital expenditure, working capital and
operating requirements, although from time to time additional borrowings may
be necessary. The Company has posted on its website ( muellerindustries.com )
additional information about the special dividend in the form of questions and
answers.
Business Outlook
Discussing the business outlook, Mr. Karp said, "Our national economy is
growing, capital investment is rising, and housing starts and permits remain
positive. Thirty-year fixed rate mortgages are below 6 percent. These
conditions are consistent with a strong continuing demand for Mueller's
products."
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.
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, competitive and technological factors, and
the availability of financing, among others, as set forth in the Company's SEC
filings.
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended For the Nine Months Ended
Sept. 25, Sept. 27, Sept. 25, Sept. 27,
2004 2003 2004 2003
(Unaudited) (Unaudited)
Net sales $322,512 $251,053 $1,049,293 $731,296
Cost of goods sold 263,188 201,960 847,937 597,336
Depreciation and
amortization 10,278 9,777 30,402 29,239
Selling, general, and
administrative expense 24,529 24,301 79,410 71,172
Impairment charge - - 3,941 -
Operating income 24,517 15,015 87,603 33,549
Interest expense (236) (267) (659) (870)
Environmental expense (240) (306) (678) (770)
Other income, net 1,597 826 5,839 3,565
Income from continuing
operations before
before income taxes 25,638 15,268 92,105 35,474
Income tax (expense)
benefit (6,884) 4,469 (28,343) (2,298)
Income from continuing
operations 18,754 19,737 63,762 33,176
Loss from operation of
discontinued
operations, net of tax - - - (539)
Gain on disposition of
discontinued operations - 1,699 - 1,699
Net income $18,754 $21,436 $63,762 $34,336
Earnings (loss) per share:
Basic earnings (loss)
per share:
Weighted average
shares outstanding 35,283 34,267 34,973 34,262
From continuing
operations $0.53 $0.58 $1.82 $0.97
From discontinued
operations - - - (0.02)
From gain on
disposition of
discontinued
operations - 0.05 - 0.05
Basic earnings per
share $0.53 $0.63 $1.82 $1.00
Diluted earnings
(loss) per share:
Weighted average
shares outstanding
plus assumed
conversions 36,914 36,857 36,905 36,812
From continuing
operations $0.51 $0.53 $1.73 $0.89
From discontinued
operations - - - (0.01)
From gain on
disposition of
discontinued
operations - 0.05 - 0.05
Diluted earnings
per share $0.51 $0.58 $1.73 $0.93
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 25, December 27,
2004 2003
(Unaudited)
ASSETS
Cash and cash equivalents $291,915 $255,088
Accounts receivable, net 183,957 163,006
Inventories 182,564 140,548
Other current assets 17,746 11,713
Total current assets 676,182 570,355
Property, plant, and equipment, net 328,636 345,537
Other assets 145,425 139,292
$1,150,243 $1,055,184
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $260 $2,835
Accounts payable 56,478 42,081
Other current liabilities 83,559 68,590
Total current liabilities 140,297 113,506
Long-term debt 11,236 11,437
Pension and postretirement liabilities 32,437 31,643
Environmental reserves 9,734 9,560
Deferred income taxes 68,418 63,734
Other noncurrent liabilities 10,182 10,238
Total liabilities 272,304 240,118
Minority interest in subsidiaries 57 208
Stockholders' equity 877,882 814,858
$1,150,243 $1,055,184
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Nine Months Ended
September 25, September 27,
2004 2003
(Unaudited)
Operating activities:
Net income from continuing operations $63,762 $33,176
Reconciliation of net income from
continuing operations
to net cash provided by operating
activities:
Depreciation and amortization 30,402 29,239
Income tax benefit from exercise
of stock options 29,252 -
Impairment charge 3,941 -
Equity in loss of unconsolidated
subsidiaries 2,376 336
(Gain) loss on disposal of
properties (5,156) 349
Deferred income taxes (395) (1,295)
Minority interest in
subsidiaries, net of dividend paid (151) (173)
Changes in assets and
liabilities, net of business acquired:
Receivables (14,742) (32,666)
Inventories (33,969) (2,658)
Current liabilities 18,671 6,343
Other, net (554) 1,450
Net cash provided by operating
activities 93,437 34,101
Investing activities:
Capital expenditures (13,073) (24,100)
Proceeds from sales of properties 5,493 1,350
Acquisition of business (14,583) -
Purchase of Conbraco Industries, Inc.
common stock - (10,806)
Other, net - 449
Net cash used in investing activities (22,163) (33,107)
Financing activities:
Dividends paid (10,591) -
Acquisition of treasury stock (28,409) -
Proceeds from the sale of
treasury stock 7,344 244
Repayments of long-term debt (2,776) (2,969)
Net cash used in financing activities (34,432) (2,725)
Effect of exchange rate changes on
cash (15) 3,158
Increase in cash and cash equivalents 36,827 1,427
Cash provided by discontinued
operations - 252
Cash and cash equivalents at the
beginning of the period 255,088 217,601
Cash and cash equivalents at the end
of the period $291,915 $219,280
SOURCE Mueller Industries, Inc.
-0- 10/14/2004
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/
(MLI)