Mueller Industries, Inc. Reports First Quarter 2007 Earnings
MEMPHIS, Tenn., April 24 /PRNewswire-FirstCall/ -- Harvey L. Karp,
Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's
net income in the first quarter of 2007 was $18.9 million, or 51 cents per
diluted share, which compares with $33.4 million, or 90 cents per diluted share,
for the same period of 2006. First quarter net sales for 2007 were $609.8
million compared with $551.0 million in 2006. The increase in net sales was
primarily attributable to acquired businesses. The change in net sales was also
affected by the increased cost of copper, the Company's principal raw material,
which was largely passed through to customers, offset by lower unit volume.
Financial and Operating Highlights
Regarding the first quarter of 2007, Mr. Karp said:
- -- "Our Plumbing & Refrigeration segment posted operating earnings of $26.9
million on net sales of $370.0 million which compares with prior year
earnings of $44.2 million on net sales of $386.9 million. Operating
margins were affected by higher unit costs on lower production volume. Net
sales for the Trading Group trended up but operating income was off
slightly. European results overall were profitable on the strength of our
trading businesses which continue to perform well.
- -- "Our OEM segment posted operating earnings of $5.5 million during the
first quarter of 2007 on net sales of $243.7 million, which compares with
operating earnings of $11.0 million on net sales of $168.0 million for the
same period in 2006. Our Chinese joint venture reported total operating
income of $1.7 million.
- -- "We completed the acquisition of Extruded Metals, a brass rod mill, at the
end of February; their results are included in the OEM segment. We are
presently rationalizing production with particular emphasis on casting
operations. Operations have already been accretive to earnings; however,
there are opportunities for additional improvement as we integrate the
brass mill operations.
- -- "Other income includes a gain of $3.1 million related to the sale of
mineral royalty interests.
- -- "During the first quarter of 2007, capital expenditures totaled $8.7
million. We expect to invest between $30 and $40 million for capital
expenditures during 2007.
- -- "Cash provided by operating activities was $47.1 million in the first
quarter of 2007.
- -- "The COMEX average price of copper was $2.70 per pound in the first
quarter of 2007, which compares with $2.25 in the first quarter of 2006.
- -- "Our current ratio remains solid at 2.8 to 1. We ended the quarter with
$194.5 million in cash and $521.6 million in working capital."
Business Outlook for 2007
Regarding the outlook for 2007, Mr. Karp said, "The housing construction
market is undergoing a much anticipated correction which has dampened demand for
certain of our products. However, we believe this market will improve later this
year or early next year. On the other hand, the commercial construction market
remains strong."
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, Great
Britain, and China. Mueller's business is importantly linked to: (1) the
construction of new homes; (2) the improvement and reconditioning of existing
homes and structures; and (3) the commercial construction market which includes
office buildings, factories, hotels, hospitals, etc.
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 and energy, market demand, pricing, competitive and technological
factors, and the availability of financing, among others, as set forth in the
Company's SEC filings. The words "outlook," "estimate," "project," "intend,"
"expect," "believe," "target," and similar expressions are intended to identify
forward-looking statements. The reader should not place undue reliance on
forward-looking statements, which speak only as of the date of this report. The
Company has no obligation to publicly update or revise any forward-looking
statements to reflect events after the date of this report.
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the Quarter Ended
March 31, April 1,
2007 2006
(Unaudited)
--------- ---------
Net sales $ 609,782 $ 551,039
Cost of goods sold 536,578 457,069
Gross profit 73,204 93,970
Depreciation and amortization 10,966 10,195
Selling, general, and administrative
expense 34,927 34,959
Operating income 27,311 48,816
Interest expense (5,494) (4,862)
Other income, net 4,953 2,013
Income before income taxes 26,770 45,967
Income tax expense (7,857) (12,602)
Net income $ 18,913 $ 33,365
Weighted average shares
for basic earnings per share 37,027 36,691
Effect of dilutive stock options 117 390
Adjusted weighted average shares
for diluted earnings per share 37,144 37,081
Basic earnings per share $ 0.51 $ 0.91
Diluted earnings per share $ 0.51 $ 0.90
Dividends per share $ 0.10 $ 0.10
Summary Segment Data:
Net sales:
Plumbing & Refrigeration Segment $ 369,996 $ 386,941
OEM Segment 243,730 167,972
Elimination of intersegment sales (3,944) (3,874)
Net sales $ 609,782 $ 551,039
Operating income:
Plumbing & Refrigeration Segment $ 26,854 $ 44,193
OEM Segment 5,494 10,953
Unallocated expenses (5,037) (6,330)
Operating income $ 27,311 $ 48,816
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 30,
2007 2006
(Unaudited)
------------ ------------
ASSETS
Cash and cash equivalents $ 194,489 $ 200,471
Accounts receivable, net 370,957 281,679
Inventories 218,980 258,647
Other current assets 32,981 35,397
Total current assets 817,407 776,194
Property, plant, and equipment, net 328,742 315,064
Other assets 187,438 177,649
$ 1,333,587 $ 1,268,907
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 34,555 $ 35,998
Accounts payable 136,888 96,095
Other current liabilities 124,386 123,426
Total current liabilities 295,829 255,519
Long-term debt 308,130 308,154
Pension and postretirement liabilities 47,447 36,599
Environmental reserves 9,197 8,907
Deferred income taxes 43,716 46,408
Other noncurrent liabilities 2,007 2,206
Total liabilities 706,326 657,793
Minority interest in
subsidiaries 22,994 22,300
Stockholders' equity 604,267 588,814
$ 1,333,587 $ 1,268,907
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Quarter Ended
March 31, April 1,
2007 2006
---------- ---------
(Unaudited)
Operating activities:
Net income $ 18,913 $ 33,365
Reconciliation of net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 11,012 10,240
Stock-based compensation expense 628 607
Equity in earnings of
unconsolidated subsidiary -- (964)
Gain on disposals of properties (3,132) (121)
Deferred income taxes (1,156) (3,891)
Income tax benefit
from exercise of stock options (66) (228)
Minority interest in subsidiaries 402 393
Changes in assets and liabilities,
net of businesses acquired:
Receivables (59,857) (55,022)
Inventories 66,512 (14,813)
Other assets (314) (4,676)
Current liabilities 13,445 (14,579)
Other liabilities 23 (175)
Other, net 719 104
Net cash provided by (used in)
operating activities 47,129 (49,760)
Investing activities:
Capital expenditures (8,725) (12,015)
Acquisition of business, net of cash
received (31,970) 3,632
Proceeds from sales of properties 3,032 253
Net cash used in investing activities (37,663) (8,130)
Financing activities:
Dividends paid (3,703) (3,684)
Acquisition of treasury stock -- (388)
Issuance of shares under incentive
stock option plans from treasury 155 4,200
Proceeds from issuance of long-term debt 5,434 11,164
Repayments of long-term debt (17,429) (162)
Income tax benefit from exercise
of stock options 66 228
Net cash (used in) provided by
financing activities (15,477) 11,358
Effect of exchange rate changes on
cash 29 69
Decrease in cash and cash equivalents (5,982) (46,463)
Cash and cash equivalents at the
beginning of the period 200,471 129,685
Cash and cash equivalents at the end
of the period $ 194,489 $ 83,222
SOURCE Mueller Industries, Inc.
-0- 04/24/2007
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208 /
(MLI)