Exhibit 99.1
MUELLER INDUSTRIES, INC. REPORTS RECORD SECOND QUARTER RESULTS
MEMPHIS, Tenn., July 25 /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 2006. Net income for
the second quarter was $58.8 million, or $1.57 per diluted share, which compares
with $17.2 million, or 46 cents per diluted share, for the second quarter of
fiscal 2005. Net sales for the three months ended July 1, 2006 were $779.7
million, compared with net sales of $410.5 million for the second quarter of
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.
Year-to-date, the Company earned $92.1 million, or $2.48 per diluted share,
on net sales of $1.33 billion. This compares with net income of $32.4 million,
or 87 cents per diluted share, on net sales of $812.2 million for the first half
of 2005. Approximately $92.3 million of the increase in first half net sales was
attributable to businesses acquired late in 2005.
Financial and Operating Highlights
Regarding the second quarter of 2006, Mr. Karp said, "Market conditions
remained vibrant throughout the second quarter on the fundamentals of strong
demand and product availability. The majority of the increase in operating
income is attributable to core product lines. The impact of rising raw material
costs also significantly contributed to the earnings improvement.
"Mueller's financial strength and flexibility played an important role in
our success during the quarter. The price of copper gyrated widely and on
average more than doubled compared with the same quarter last year. Nonetheless,
we were able to secure copper supplies which enabled us to service our
customers' orders on a timely basis. In all, Mueller committed over $85 million
in net working capital to our business during the quarter.
- "The COMEX average price of copper was $3.37 per pound in the second
quarter of 2006, which compares with $1.53 per pound in the second
quarter of 2005.
- "Mueller ended the quarter with $138.9 million in cash; the higher
balances of accounts receivable and inventories caused by rising copper
prices were readily funded with cash on-hand.
- "Our current ratio remains excellent at 2.3 to 1 and our working capital
is $471.3 million.
- "Our Plumbing & Refrigeration segment posted operating earnings of $78.3
million on net sales of $551.2 million which compares with operating
earnings of $23.2 million on net sales of $302.4 million in the second
quarter of 2005.
- "Our OEM segment posted operating earnings of $21.5 million during the
second quarter of 2006 on net sales of $242.1 million, which compared
with operating earnings of $7.3 million on net sales of $111.0 million
for the same period in 2005. Included in the OEM segment is our Chinese
joint venture which reported total operating income of $3.3 million.
- "Capital expenditures during the first half of 2006 totaled $20.9 million
of which $9.1 million relates to our Chinese joint venture. We expect to
invest between $40 and $45 million for capital expenditures during 2006.
- "Selling, general and administrative expense increased to $39.7 million
in the second quarter of 2006 due primarily to acquired businesses and
compensation expense."
Business Outlook for 2006
Regarding the outlook for 2006, Mr. Karp said, "Housing starts have remained
at high levels even though mortgage rates have continued to rise. Importantly,
commercial construction has markedly improved and the value of private
nonresidential construction put in place this year is on track to exceed the
peak year of 2000. This trend is favorable for Mueller and could very well
offset a slowing in the residential construction markets. Our business outlook
for the third quarter of 2006 remains positive."
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 For the Six Months
Ended Ended
-------------------------- --------------------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Net sales $ 779,663 $ 410,506 $ 1,330,702 $ 812,169
Cost of goods sold 637,038 345,663 1,094,107 679,687
Gross profit 142,625 64,843 236,595 132,482
Depreciation and
amortization 10,376 10,411 20,571 20,489
Selling, general, and
administrative expense 39,689 29,136 74,648 59,491
Operating income 92,560 25,296 141,376 52,502
Interest expense (5,214) (4,752) (10,076) (9,936)
Other (expense) income,
net (67) 3,973 1,946 4,767
Income before income
taxes 87,279 24,517 133,246 47,333
Income tax expense (28,529) (7,334) (41,131) (14,942)
Net income $ 58,750 $ 17,183 $ 92,115 $ 32,391
Weighted average shares
for basic earnings
per share 36,891 36,599 36,791 36,552
Effect of dilutive stock
options 421 466 405 556
Adjusted weighted average
shares for diluted
earnings per share 37,312 37,065 37,196 37,108
Basic earnings per share $ 1.59 $ 0.47 $ 2.50 $ 0.89
Diluted earnings per share $ 1.57 $ 0.46 $ 2.48 $ 0.87
Summary Segment Data:
Net sales:
Plumbing &
Refrigeration
Segment $ 551,158 $ 302,435 $ 938,099 $ 596,332
OEM Segment 242,128 110,958 410,100 222,283
Elimination of
intersegment sales (13,623) (2,887) (17,497) (6,446)
Net sales $ 779,663 $ 410,506 $ 1,330,702 $ 812,169
Operating income:
Plumbing &
Refrigeration
Segment $ 78,328 $ 23,150 $ 122,521 $ 47,777
OEM Segment 21,511 7,306 32,464 13,840
Unallocated expenses (7,279) (5,160) (13,609) (9,115)
Operating income $ 92,560 $ 25,296 $ 141,376 $ 52,502
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 1, December 31,
2006 2005
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 138,887 $ 129,685
Accounts receivable, net 408,666 248,395
Inventories 248,668 196,987
Other current assets 40,308 36,919
Total current assets 836,529 611,986
Property, plant, and equipment,
net 313,248 307,046
Other assets 169,724 185,606
$ 1,319,501 $ 1,104,638
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 26,961 $ 4,120
Accounts payable 206,171 124,216
Other current liabilities 132,068 123,056
Total current liabilities 365,200 251,392
Long-term debt 308,483 312,070
Pension and postretirement liabilities 35,834 35,236
Environmental reserves 8,997 9,073
Deferred income taxes 51,341 63,944
Other noncurrent liabilities 2,884 3,078
Total liabilities 772,739 674,793
Minority interest in subsidiaries 21,017 6,937
Stockholders' equity 525,745 422,908
$ 1,319,501 $ 1,104,638
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Six Months Ended
---------------------------
July 1, July 2,
2006 2005
------------ ------------
(Unaudited)
Operating activities:
Net income $ 92,115 $ 32,391
Reconciliation of net income to net cash
(used in) provided by operating
activities:
Depreciation and amortization 20,719 20,568
Deferred income taxes (4,946) (1,039)
Minority interest in subsidiaries 1,805 7
Share-based compensation expense 1,308 -
Equity in earnings of
unconsolidated subsidiary (964) (3,471)
Gain on early retirement of debt (97) -
Loss on disposal of properties 29 457
Income tax benefit from exercise
of stock options (1,042) 529
Changes in assets and liabilities:
Receivables (162,602) (30,347)
Inventories (51,127) (3,823)
Other assets (4,642) (1,305)
Current liabilities 93,754 20,058
Other liabilities 4,439 161
Other, net (3,657) 304
Net cash (used in) provided by
operating activities (14,908) 34,490
Investing activities:
Capital expenditures (20,918) (8,876)
Business acquired, net of cash received 3,632 -
Proceeds from sales of properties
and equity investment 23,218 559
Net cash provided by (used in)
investing activities 5,932 (8,317)
Financing activities:
Issuance of debt by joint venture 22,425 -
Dividends paid (7,373) (7,320)
Proceeds from the sale of treasury stock 5,823 3,911
Repayments of long-term debt (3,413) (396)
Income tax benefit from exercise of
stock options 1,042 -
Acquisition of treasury stock (396) (168)
Net cash provided by (used in)
financing activities 18,108 (3,973)
Effect of exchange rate changes on cash 70 (509)
Increase in cash and cash equivalents 9,202 21,691
Cash and cash equivalents at the
beginning of the period 129,685 47,449
Cash and cash equivalents at the end
of the period $ 138,887 $ 69,140
SOURCE Mueller Industries, Inc.
-0- 07/25/2006
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/