Exhibit 99.1
MUELLER INDUSTRIES, INC. REPORTS FOURTH QUARTER AND FISCAL 2004 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 2004 were $2.15 per diluted share,
compared with the $1.19 reported a year ago. Income from continuing operations
for the year was $79.4 million, compared with $44.2 million for the prior year.
Net sales for the twelve-month period were $1.4 billion, versus $1.0 billion in
2003. Net income for 2004 was $79.4 million compared with $45.4 million in 2003.
For the quarter ended December 25, 2004, income from continuing operations
was $15.7 million, or 42 cents per diluted share, which compares with $11.0
million, or 30 cents per diluted share, for the same period a year ago. Net
sales for the three months ended December 25, 2004, were $329.8 million,
compared with net sales of $267.8 million for the 2003 period.
Financial and Operating Highlights
Regarding 2004, Mr. Karp said:
- "Overall, we enjoyed a strong year, particularly the first half. Net
sales for the year were at record levels while operating income more
than doubled to $112.5 million in 2004.
- "Pounds of product shipped reached 734.7 million pounds compared with
695.8 million in 2003. The Comex average price of copper was $1.41 per
pound in the fourth quarter of 2004 and $1.29 per pound for the full
year, which compares with 94 cents in the fourth quarter of 2003 and 81
cents year-to-date in 2003.
- "Rising raw material costs caused the Company to fund higher balances of
accounts receivable and inventories, its two principal components of
working capital.
- "Cash from operating activities was $154.8 million in 2004 compared with
$73.4 million during 2003.
- "Our Standard Products Division posted operating earnings of $108.3
million, compared to $54.1 million in 2003. Standard Products Division's
net sales were $1.0 billion for the year, compared with $717.6 million
for 2003. Operating results improved on the strength of higher margins,
particularly copper tube and copper fittings in the first half of 2004;
both volume and margins weakened during the second half.
- "Our Industrial Products Division posted operating earnings of $20.6
million during the year on net sales of $392.6 million, which compares
with operating earnings of $11.7 million on net sales of $292.0 million
for 2003.
- "European results continued to be profitable.
- "The significant changes in our balance sheet reflect the successful
recapitalization that we effectuated in the fourth quarter. The
recapitalization was the result of a $15.00 per share special dividend,
paid in cash ($6.50 per common share) and a 6% Subordinated Debenture
($8.50 per common share).
- "The Company amended and extended to November 2007 its $150 million
Credit Facility with its commercial bank syndicate during the fourth
quarter. At year-end, there were no borrowings outstanding under this
facility.
- "We invested $56.9 million in acquisitions during 2004. During the third
quarter, the Company acquired Vemco Brasscapri, Ltd. for approximately
$14.6 million. Vemco's net sales are approximately $26 million annually.
Late in the fourth quarter, the Company acquired shares in seven
companies and inventory of another (collectively Mueller Comercial S.A.)
for an aggregate of $42.3 million, subject to closing adjustments,
including $3.0 million for a contingent earn-out payment. These
operations include pipe nipple manufacturing in Mexico and import
distribution businesses which product lines include malleable iron
fittings and other plumbing specialties. The combined sales of Mueller
Comercial S.A. are approximately $60 million annually."
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.
Business Outlook for 2005
Discussing the outlook for the next fiscal year, Mr. Karp said, "The
housing and construction markets are positioned to have another solid year in
2005. The fundamentals underlying these markets are encouraging. Mortgage rates
are at near historic lows, the demand for new and existing homes continues to be
vibrant, there is a modest inventory of new homes available for sale (4.1 months
supply), job growth over the past 12 months was the best in five years, and
household income continues to rise. Moreover, non- residential building
construction is likely to grow by perhaps three to five percent in 2005 as
capital projects of all sorts are funded.
"On the other hand, the Federal Reserve is clearly in the process of
monetary tightening, which will likely cause mortgage rates to increase. In
addition, rapidly escalating home prices will at some point engender buyer
resistance.
"Evaluating these contrary trends is difficult at best, however, on balance
we believe 2005 will be another good year for Mueller."
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. 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 INCOME
(In thousands, except per share data)
For the Quarter Ended For the Year Ended
---------------------------- ----------------------------
Dec. 25, Dec. 27, Dec. 25, Dec. 27,
2004 2003 2004 2003
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
Net sales $ 329,763 $ 267,782 $ 1,379,056 $ 999,078
Cost of goods sold 267,675 218,513 1,115,612 815,849
Depreciation and
amortization 10,211 9,715 40,613 38,954
Selling, general, and
administrative expense 26,990 23,719 106,400 94,891
Impairment charge - - 3,941 -
Operating income 24,887 15,835 112,490 49,384
Interest expense (3,315) (298) (3,974) (1,168)
Environmental expense (298) (395) (976) (1,165)
Other income, net 1,979 820 7,818 4,385
Income from continuing
operations before
income taxes 23,253 15,962 115,358 51,436
Income tax expense (7,599) (4,917) (35,942) (7,215)
Income from continuing
operations 15,654 11,045 79,416 44,221
Loss from operation of
discontinued operations,
net of tax - - - (539)
Gain on disposition of
discontinued operations - - - 1,699
Net income $ 15,654 $ 11,045 $ 79,416 $ 45,381
Earnings (loss) per share:
Basic earnings (loss)
per share:
Weighted average
shares outstanding 36,365 34,269 35,321 34,264
From continuing
operations $ 0.43 $ 0.32 $ 2.25 $ 1.29
From discontinued
operations - - - (0.02)
From gain on
disposition of
discontinued
operations - - - 0.05
Basic earnings
per share $ 0.43 $ 0.32 $ 2.25 $ 1.32
Diluted earnings
(loss) per share:
Weighted average
shares outstanding
plus assumed
conversions 36,931 37,000 36,911 36,861
From continuing
operations $ 0.42 $ 0.30 $ 2.15 $ 1.19
From discontinued
operations - - - (0.01)
From gain on
disposition of
discontinued
operations - - - 0.05
Diluted earnings
per share $ 0.42 $ 0.30 $ 2.15 $ 1.23
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 25, December 27,
2004 2003
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 47,449 $ 255,088
Accounts receivable, net 201,396 163,006
Inventories 187,853 140,548
Other current assets 18,633 11,713
Total current assets 455,331 570,355
Property, plant, and equipment,
net 335,610 345,537
Other assets 172,790 139,292
$ 963,731 $ 1,055,184
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 5,328 $ 2,835
Accounts payable 79,723 42,081
Other current liabilities 95,767 73,945
Total current liabilities 180,818 118,861
Long-term debt 310,650 11,437
Pension and postretirement
liabilities 33,167 31,643
Environmental reserves 9,503 9,560
Deferred income taxes 67,479 58,379
Other noncurrent liabilities 10,361 10,238
Total liabilities 611,978 240,118
Minority interest in subsidiaries 67 208
Stockholders' equity 351,686 814,858
$ 963,731 $ 1,055,184
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Year Ended
----------------------------
December 25, December 27,
2004 2003
------------ ------------
(Unaudited)
Operating activities:
Net income from continuing operations $ 79,416 $ 44,221
Reconciliation of net income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 40,639 38,954
Income tax benefit from exercise
of stock options 31,778 18
Impairment charge 3,941 -
Equity in loss of unconsolidated
subsidiaries 2,026 460
Provision for doubtful accounts
receivable 1,404 3,172
(Gain) loss on disposal of
properties (5,729) 290
Deferred income taxes 2,711 (287)
Minority interest in
subsidiaries, net of dividend paid (141) (213)
Changes in assets and
liabilities, net of
business acquired:
Receivables (17,995) (35,129)
Inventories (26,208) 2,948
Other assets (2,055) 3,240
Current liabilities 42,913 14,620
Other liabilities 296 (54)
Other, net 1,765 1,176
Net cash provided by operating activities 154,761 73,416
Investing activities:
Capital expenditures (19,980) (27,236)
Proceeds from sales of properties 6,334 1,412
Acquisition of businesses (56,946) (10,806)
Escrowed IRB proceeds - 449
Net cash used in investing activities (70,592) (36,181)
Financing activities:
Dividends paid (259,882) -
Acquisition of treasury stock (42,641) -
Proceeds from stock options exercised 18,978 389
Subordinated debenture issuance costs (2,187) -
Repayments of long-term debt (6,608) (3,894)
Net cash used in financing activities (292,340) (3,505)
Effect of exchange rate changes on cash 532 3,505
(Decrease) increase in cash and cash
equivalents (207,639) 37,235
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 $ 47,449 $ 255,088
SOURCE Mueller Industries, Inc.
-0- 02/03/2005
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/
(MLI)