TO BUSINESS EDITOR:
Mueller Industries, Inc. Reports Second Quarter Results
MEMPHIS, Tenn., July 24 /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 of 2007. Net income for
the second quarter was $36.4 million, or 98 cents per diluted share,
constituting the third highest quarter in the Company's history. This compares
with $58.8 million, or $1.57 per diluted share, for the extraordinary second
quarter of fiscal 2006, which was the Company's best quarter ever. Net sales for
the three months ended June 30, 2007 were $772.6 million, compared with net
sales of $779.7 million for the second quarter of 2006.
Year-to-date, the Company earned $55.3 million, or $1.49 per diluted
share, on net sales of $1.38 billion. This compares with net income of $92.1
million, or $2.48 per diluted share, on net sales of $1.33 billion for the first
half of 2006.
Earnings and sales for the second quarter were affected by the decline in
the residential construction sector, which saw housing starts down approximately
25 percent compared with last year.
However, the commercial construction market continues to strengthen and
has increased by approximately 18 percent over last year. The Company's profit
margins in the commercial construction sector have historically been better than
in the other markets the Company serves.
Financial and Operating Highlights
Regarding the second quarter of 2007, Mr. Karp said:
-- "Mueller ended the quarter with almost $250 million in cash; our
current ratio remains excellent at 2.48 to 1 and our working capital
is $557.3 million.
-- "The COMEX average price of copper was $3.46 per pound in the second
quarter of 2007, which compares with $3.37 per pound in the second
quarter of 2006.
-- "Our Plumbing & Refrigeration segment posted operating earnings of
$51.7 million on net sales of $455.5 million which compares with
operating earnings of $78.3 million on net sales of $551.2 million
in the second quarter of 2006. Our European businesses were
profitable on the strength of our trading activities.
-- "Our OEM segment posted operating earnings of $18.0 million during
the second quarter of 2007 on net sales of $322.2 million, which
compared with operating earnings of $21.5 million on net sales of
$242.1 million for the same period in 2006.
-- "Selling, general, and administrative expense was $39.0 million in
the second quarter of 2007 which is comparable to the same period of
2006.
-- "Capital expenditures during the first half of 2007 totaled $15.6
million. We expect to invest between $30 and $40 million for capital
expenditures during 2007."
Business Outlook for 2007
Regarding the outlook for 2007, Mr. Karp said, "The residential
construction sector remains weak, although the rate of decline has subsided. We
believe the housing market is near the bottom, and will begin to improve in the
first half of 2008. Positive factors include low mortgage rates, high
employment, an expanding economy, and population growth. Also, we expect the
commercial construction market to remain 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 For the Six Months Ended
June 30, July 1, June 30, July 1,
2007 2006 2007 2006
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Net sales $ 772,647 $ 779,663 $ 1,382,429 $ 1,330,702
Cost of goods sold 661,746 637,038 1,198,324 1,094,107
Gross profit 110,901 142,625 184,105 236,595
Depreciation and amortization 11,306 10,376 22,272 20,571
Selling, general, and
administrative expense 38,971 39,689 73,898 74,648
Operating income 60,624 92,560 87,935 141,376
Interest expense (5,689) (5,214) (11,183) (10,076)
Other income (expense), net 1,925 (67) 6,878 1,946
Income before income taxes 56,860 87,279 83,630 133,246
Income tax expense (20,462) (28,529) (28,319) (41,131)
Net income $ 36,398 $ 58,750 $ 55,311 $ 92,115
Weighted average shares
for basic earnings per
share 37,060 36,891 37,044 36,791
Effect of dilutive stock
options 204 421 160 405
Adjusted weighted average
shares for diluted earnings
per share 37,264 37,312 37,204 37,196
Basic earnings per share $ 0.98 $ 1.59 $ 1.49 $ 2.50
Diluted earnings per share $ 0.98 $ 1.57 $ 1.49 $ 2.48
Summary Segment Data:
Net sales:
Plumbing & Refrigeration
Segment $ 455,486 $ 551,158 $ 825,482 $ 938,099
OEM Segment 322,201 242,128 565,931 410,100
Elimination of intersegment
sales (5,040) (13,623) (8,984) (17,497)
Net sales $ 772,647 $ 779,663 $ 1,382,429 $ 1,330,702
Operating income:
Plumbing & Refrigeration
Segment $ 51,746 $ 78,328 $ 78,600 $ 122,521
OEM Segment 17,999 21,511 23,493 32,464
Unallocated expenses (9,121) (7,279) (14,158) (13,609)
Operating income $ 60,624 $ 92,560 $ 87,935 $ 141,376
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 30,
2007 2006
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 247,916 $ 200,471
Accounts receivable, net 392,326 281,679
Inventories 251,544 258,647
Other current assets 41,497 35,397
Total current assets 933,283 776,194
Property, plant, and equipment,
net 325,822 315,064
Other assets 194,199 177,649
$ 1,453,304 $ 1,268,907
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term
debt $ 48,037 $ 35,998
Accounts payable 181,136 96,095
Other current liabilities 146,804 123,426
Total current liabilities 375,977 255,519
Long-term debt 308,084 308,154
Pension and postretirement
liabilities 48,919 36,599
Environmental reserves 9,186 8,907
Deferred income taxes 42,398 46,408
Other noncurrent liabilities 2,015 2,206
Total liabilities 786,579 657,793
Minority interest in
subsidiaries 22,783 22,300
Stockholders' equity 643,942 588,814
$ 1,453,304 $ 1,268,907
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Six Months Ended
June 30, July 1,
2007 2006
----------- -----------
(Unaudited)
Operating activities:
Net income $ 55,311 $ 92,115
Reconciliation of net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 22,465 20,719
Deferred income taxes (6,140) (4,946)
(Gain) loss on disposal of
properties (3,137) 1,905
Stock-based compensation expense 1,273 1,308
Income tax benefit from exercise
of stock options (124) (1,042)
Minority interest in
subsidiaries, net of dividend
paid (18) 1,805
Gain on sale of equity investment -- (1,876)
Equity in earnings of
unconsolidated subsidiary -- (964)
Gain on early retirement of debt -- (97)
Changes in assets and
liabilities, net of businesses
acquired:
Receivables (78,521) (161,990)
Inventories 35,467 (51,127)
Other assets (10,948) (4,642)
Current liabilities 78,376 93,142
Other liabilities 773 4,439
Other, net 2,144 (3,657)
Net cash provided by (used in)
operating activities 96,921 (14,908)
Investing activities:
Capital expenditures (15,638) (20,918)
Acquisition of businesses, net of
cash received (31,970) 3,632
Proceeds from sales of properties and
equity investment 3,032 23,218
Net cash (used in) provided by
investing activities (44,576) 5,932
Financing activities:
Proceeds from issuance of long-term
debt 19,054 22,425
Repayments of long-term debt (18,116) (3,413)
Dividends paid (7,410) (7,373)
Issuance of shares under incentive
stock option plans from treasury 977 5,823
Income tax benefit from exercise of
stock options 124 1,042
Acquisition of treasury stock (54) (396)
Net cash (used in) provided by
financing activities (5,425) 18,108
Effect of exchange rate changes on
cash 525 70
Increase in cash and cash equivalents 47,445 9,202
Cash and cash equivalents at the
beginning of the period 200,471 129,685
Cash and cash equivalents at the end
of the period $ 247,916 $ 138,887