Exhibit 99.1
MUELLER INDUSTRIES, INC. REPORTS RECORD THIRD QUARTER RESULTS
MEMPHIS, Tenn., Oct. 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 third quarter of 2006. Net income for
the third quarter was $51.6 million, or $1.38 per diluted share, which compares
with income from continuing operations of $21.0 million, or 57 cents per diluted
share, for the third quarter of fiscal 2005. Net sales for the three months
ended September 30, 2006 were $636.0 million, compared with net sales of $434.1
million for the third 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.
During the third quarter of 2006, the Company recorded additional state
income tax benefits, the majority of which relate to certain state income tax
credit carryforwards that were previously unrecognized. The total benefit
related to these matters was $10.4 million, or 28 cents per diluted share, and
resulted in reducing the overall effective tax rate to 11.3 percent for the
third quarter of 2006.
Year-to-date, the Company earned $143.7 million, or $3.86 per diluted share,
on net sales of $1.97 billion. This compares with net income from continuing
operations of $53.4 million, or $1.44 per diluted share, on net sales of $1.25
billion for the same period of 2005.
Financial and Operating Highlights
Regarding the third quarter of 2006, Mr. Karp said:
- "The COMEX average price of copper was $3.54 per pound in the third
quarter of 2006, which compares with $1.70 per pound in the third
quarter of 2005.
- "Mueller ended the quarter with $170.5 million in cash.
- "Our current ratio remains excellent at 2.7 to 1 and our working capital
is $513.6 million.
- "Our Plumbing & Refrigeration segment posted operating earnings of $56.9
million on net sales of $426.3 million which compares with operating
earnings of $31.0 million on net sales of $322.5 million in the third
quarter of 2005. Unit volumes in our core product lines, particularly
copper tube, were down substantially compared with the preceding quarter
and the third quarter of 2005. The impact of these volume decreases on
net sales was offset by rising copper prices. Overall, operating results
remained strong despite lower volumes and margin pressures on our
Trading Group.
- "Our OEM segment posted operating earnings of $9.9 million during the
third quarter of 2006 on net sales of $218.4 million, which compared
with operating earnings of $5.7 million on net sales of $114.3 million
for the same period in 2005. Included in the OEM segment is our Chinese
joint venture which reported total operating income of $1.8 million. The
OEM segment also was impacted by lower unit volumes.
- "Capital expenditures during the first nine months of 2006 totaled $33.0
million of which $15.8 million relates to our Chinese joint venture. We
expect to invest between $40 and $45 million for capital expenditures
during 2006."
Business Outlook
Mr. Karp said, "The housing market is in the midst of a much anticipated
'correction'. Housing starts for the third quarter of 2006 were 18.7 percent
less than for the same quarter last year. Also, the inventory of new unsold
homes has risen to a 6.6 months supply. The downturn in housing is likely to
continue into next year, but may be moderated by prevailing low mortgage rates
and positive demographic factors. The non-residential construction market
continues to strengthen and the home improvement sector has shown steady growth.
"Mueller will continue to react to changing market conditions which present
opportunities as well as challenges."
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 Nine Months Ended
-------------------------- --------------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2006 2005 2006 2005
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Net sales $ 635,998 $ 434,130 $ 1,966,700 $ 1,246,299
Cost of goods sold 528,946 360,514 1,623,053 1,040,201
Gross profit 107,052 73,616 343,647 206,098
Depreciation and amortization 10,462 10,082 31,033 30,571
Selling, general, and
administrative expense 34,787 33,297 109,435 92,788
Operating income 61,803 30,237 203,179 82,739
Interest expense (5,085) (4,794) (15,161) (14,730)
Other income, net 1,452 5,421 3,398 10,188
Income from continuing operations
before income taxes 58,170 30,864 191,416 78,197
Income tax expense (6,591) (9,848) (47,722) (24,790)
Income from continuing operations 51,579 21,016 143,694 53,407
Income from discontinued operations,
net of income taxes - 3,324 - 3,324
Net income $ 51,579 $ 24,340 $ 143,694 $ 56,731
Earnings per share:
Weighted average shares for basic
earnings per share 36,976 36,625 36,853 36,576
Effect of dilutive stock options 379 495 396 536
Adjusted weighted average shares
for diluted earnings per share 37,355 37,120 37,249 37,112
Basic earnings per share:
From continuing operations $ 1.39 $ 0.57 $ 3.90 $ 1.46
From discontinued operations - 0.09 - 0.09
Basic earnings per share $ 1.39 $ 0.66 $ 3.90 $ 1.55
Diluted earnings per share:
From continuing operations $ 1.38 $ 0.57 $ 3.86 $ 1.44
From discontinued operations - 0.09 - 0.09
Diluted earnings per share $ 1.38 $ 0.66 $ 3.86 $ 1.53
Summary Segment Data:
Net sales:
Plumbing & Refrigeration Segment $ 426,261 $ 322,507 $ 1,364,360 $ 918,839
OEM Segment 218,372 114,325 628,472 336,608
Elimination of intersegment sales (8,635) (2,702) (26,132) (9,148)
Net sales $ 635,998 $ 434,130 $ 1,966,700 $ 1,246,299
Operating income:
Plumbing & Refrigeration Segment $ 56,863 $ 30,955 $ 179,384 $ 78,732
OEM Segment 9,862 5,700 42,326 19,540
Unallocated expenses (4,922) (6,418) (18,531) (15,533)
Operating income $ 61,803 $ 30,237 $ 203,179 $ 82,739
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2006 2005
------------- -------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 170,463 $ 129,685
Accounts receivable, net 309,153 248,395
Inventories 298,140 196,987
Other current assets 43,294 36,919
Total current assets 821,050 611,986
Property, plant, and equipment, net 315,649 307,046
Other assets 170,699 185,606
$ 1,307,398 $ 1,104,638
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 33,255 $ 4,120
Accounts payable 142,577 124,216
Other current liabilities 131,569 123,056
Total current liabilities 307,401 251,392
Long-term debt 308,273 312,070
Pension and postretirement liabilities 35,939 35,236
Environmental reserves 8,965 9,073
Deferred income taxes 44,662 63,944
Other noncurrent liabilities 3,062 3,078
Total liabilities 708,302 674,793
Minority interest in subsidiaries 21,738 6,937
Stockholders' equity 577,358 422,908
$ 1,307,398 $ 1,104,638
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Nine Months Ended
------------------------------
September 30, October 1,
2006 2005
------------- -------------
(Unaudited)
Operating activities:
Net income from continuing operations $ 143,694 $ 53,407
Reconciliation of net income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization 31,225 30,691
Deferred income taxes (11,193) (1,813)
Minority interest in subsidiaries 2,526 7
Share-based compensation expense 2,041 -
Loss (gain) on disposal of properties 1,913 (3,713)
Gain on sale of equity investment (1,876) -
Income tax benefit from exercise of
stock options (1,217) 529
Equity in earnings of unconsolidated
subsidiary (964) (4,005)
Gain on early retirement of debt (97) -
Changes in assets and liabilities, net of
business acquired:
Receivables (63,791) (49,665)
Inventories (96,979) 8,703
Current liabilities 25,319 50,639
Other, net (5,557) (1,629)
Net cash provided by operating activities 25,044 83,151
Investing activities:
Capital expenditures (32,975) (13,425)
Proceeds from sales of properties and
equity investment 23,227 10,059
Business acquired, net of cash received 3,632 (10,891)
Net cash used in investing activities (6,116) (14,257)
Financing activities:
Issuance of debt by joint venture 24,918 -
Dividends paid (11,073) (10,983)
Proceeds from the sale of treasury stock 7,116 4,346
Repayments of long-term debt (1,922) (4,355)
Proceeds from the issuance of debt 1,902 -
Income tax benefit from exercise of
stock options 1,217 -
Acquisition of treasury stock (570) (168)
Net cash provided by (used in) financing
activities 21,588 (11,160)
Effect of exchange rate changes on cash 262 (495)
Net cash provided by operating activities of
discontinued operations - 3,324
Increase in cash and cash equivalents 40,778 60,563
Cash and cash equivalents at the beginning of
the period 129,685 47,449
Cash and cash equivalents at the end
of the period $ 170,463 $ 108,012
SOURCE Mueller Industries, Inc.
-0- 10/24/2006
/CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/