Exhibit 99.1
MUELLER INDUSTRIES, INC. REPORTS RECORD FIRST QUARTER 2006 EARNINGS
MEMPHIS, Tenn., April 25 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman
of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net
income in the first quarter of 2006 was $33.4 million, or 90 cents per diluted
share, which compares with $15.2 million, or 41 cents per diluted share, for the
same period of 2005. First quarter net sales for 2006 were $551.0 million
compared with $401.7 million in 2005. This increase in net sales is primarily
due to the increased cost of copper, the Company's principal raw material, which
is generally passed through to customers by changes in selling prices.
Approximately $28.8 million of the increase in net sales was attributable to
businesses acquired late in 2005.
Mr. Karp said, "Margins in our core product lines remained on a good track,
which continued the positive trend reflected in the fourth quarter of last year.
We also benefited from our operations in Europe and Asia, which performed well."
Financial and Operating Highlights
Regarding the first quarter of 2006, Mr. Karp said:
- "Gross profit was a record at almost $94 million due to better margins
and conversion costs in our core product lines, as well as contributions
from acquired businesses.
- "The COMEX average price of copper was $2.25 per pound in the first
quarter of 2006, which compares with $1.47 in the first quarter of 2005.
The price of copper continued to rise subsequent to the end of the
quarter, trading above $3.00 per pound. This will require additional
investments in working capital that should be readily funded with cash
on-hand.
- "Cash used in operating activities was $49.8 million in the first quarter
of 2006 primarily due to additional funding of accounts receivable and
inventories caused by continued rising raw material costs.
- "Our Plumbing & Refrigeration segment posted operating earnings of $44.2
million on net sales of $386.9 million which compares with prior year
earnings of $24.6 million on net sales of $293.9 million. Results
improved on better margins and lower conversion costs in our core product
lines. Net sales for the Trading Group were somewhat sluggish and,
consequently, operating income was off slightly. European results
continued to be profitable as our trading businesses there continue to
perform well as volume and margins are meeting our expectations.
- "Our OEM segment posted operating earnings of $11.0 million during the
first quarter of 2006 on net sales of $168.0 million, which compares with
operating earnings of $6.5 million on net sales of $111.3 million for the
same period in 2005. All product lines reported improved results. Also,
our Chinese joint venture reported total operating income of $0.8
million.
- "The $12.9 million increase in current portion of long-term debt relates
primarily to a working capital facility obligation of our Chinese joint
venture.
- "Capital expenditures during the first quarter of 2006 totaled $12.0
million of which $5.2 million relates to our Chinese joint venture. We
expect to invest between $25 and $30 million for capital expenditures
during 2006; additionally, our Chinese joint venture expects to invest
approximately $15 million to fund its capital expenditures.
- "Selling, general and administrative expense increased to $35.0 million
in the first quarter of 2006 due primarily to acquired businesses and
compensation expense of $0.6 million associated with stock options.
- "The effective tax rate of 27 percent is less than an expected rate of 35
percent primarily due to the recognition of foreign NOLs in the United
Kingdom."
Business Outlook for 2006
Regarding the outlook for 2006, Mr. Karp said, "The residential construction
sector will likely slow in 2006; however, the number of housing starts will
remain at the high end of historical levels. On the other hand, commercial
construction activity has picked up and it appears that it will continue to grow
in 2006. If this scenario develops, we believe Mueller is well-positioned, as
our commercial business significantly contributes to our results."
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
----------------------------
April 1, April 2,
2006 2005
------------ ------------
(Unaudited)
Net sales $ 551,039 $ 401,663
Cost of goods sold 457,069 334,024
Gross profit 93,970 67,639
Depreciation and amortization 10,195 10,078
Selling, general, and administrative expense 34,959 30,355
Operating income 48,816 27,206
Interest expense (4,862) (5,184)
Other income, net 2,013 794
Income before income taxes 45,967 22,816
Income tax expense (12,602) (7,608)
Net income $ 33,365 $ 15,208
Weighted average shares
for basic earnings per share 36,691 36,505
Effect of dilutive stock options 390 646
Adjusted weighted average shares
for diluted earnings per share 37,081 37,151
Basic earnings per share $ 0.91 $ 0.42
Diluted earnings per share $ 0.90 $ 0.41
Dividends per share $ 0.10 $ 0.10
Summary Segment Data:
Net sales:
Plumbing & Refrigeration Segment $ 386,941 $ 293,897
OEM Segment 167,972 111,325
Elimination of intersegment sales (3,874) (3,559)
Net sales $ 551,039 $ 401,663
Operating income:
Plumbing & Refrigeration Segment $ 44,193 $ 24,627
OEM Segment 10,953 6,534
Unallocated expenses (6,330) (3,955)
Operating income $ 48,816 $ 27,206
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 1, December 31,
2006 2005
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 83,222 $ 129,685
Accounts receivable, net 302,944 248,395
Inventories 211,708 196,987
Other current assets 40,835 36,919
Total current assets 638,709 611,986
Property, plant, and equipment, net 313,974 307,046
Other assets 190,619 185,606
$ 1,143,302 $ 1,104,638
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 16,978 $ 4,120
Accounts payable 114,510 124,216
Other current liabilities 117,299 123,056
Total current liabilities 248,787 251,392
Long-term debt 310,287 312,070
Pension and postretirement liabilities 35,026 35,236
Environmental reserves 9,063 9,073
Deferred income taxes 59,916 63,944
Other noncurrent liabilities 3,011 3,078
Total liabilities 666,090 674,793
Minority interest in subsidiaries 19,564 6,937
Stockholders' equity 457,648 422,908
$ 1,143,302 $ 1,104,638
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Quarter Ended
----------------------------
April 1, April 2,
2006 2005
------------ ------------
(Unaudited)
Operating activities:
Net income $ 33,365 $ 15,208
Reconciliation of net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 10,240 10,118
Equity in earnings of
unconsolidated subsidiary (964) (266)
(Gain) loss on disposals of properties (121) 94
Deferred income taxes (3,891) (828)
Share-based compensation expense 607 -
Income tax benefit from exercise
of stock options - 529
Minority interest in subsidiaries 393 -
Changes in assets and liabilities:
Receivables (55,022) (19,189)
Inventories (14,813) (6,393)
Other assets (4,676) (3,130)
Current liabilities (14,807) 33,973
Other liabilities (175) 282
Other, net 104 (211)
Net cash (used in) provided by
operating activities (49,760) 30,187
Investing activities:
Capital expenditures (12,015) (4,814)
Business acquired, net of cash received 3,632 -
Proceeds from sales of properties 253 25
Net cash used in investing activities (8,130) (4,789)
Financing activities:
Dividends paid (3,684) (3,659)
Acquisition of treasury stock (388) (168)
Proceeds from the sale of treasury stock 4,200 3,778
Issuance of debt by joint venture 11,164 -
Repayments of long-term debt (162) (2,972)
Income tax benefit from exercise of
stock options 228 -
Net cash provided by (used in)
financing activities 11,358 (3,021)
Effect of exchange rate changes on cash 69 (106)
(Decrease) increase in cash and cash
equivalents (46,463) 22,271
Cash and cash equivalents at the
beginning of the period 129,685 47,449
Cash and cash equivalents at the end
of the period $ 83,222 $ 69,720
SOURCE Mueller Industries, Inc.
-0- 04/25/2006
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/