EX-19 2 ex191.txt QUARTERLY REPORT TO STOCKHOLDERS Exhibit 19.1 TO OUR STOCKHOLDERS, CUSTOMERS, AND EMPLOYEES Mueller's Second Quarter Earnings Mueller's second quarter of 2006 was our best quarter ever. Records were set for sales, net income and earnings per share. Net income for the quarter was $58.8 million, or $1.57 per diluted share, compared with $17.2 million, or 46 cents per diluted share for the same quarter of 2005. Second quarter net sales were $779.7 million, compared with net sales of $410.5 million for the second quarter of 2005. Mueller's financial strength and flexibility played an important role in our success during the quarter. The price of copper, our principal raw material, gyrated widely. On average, the price of copper 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 $85.0 million in new working capital to our business during the quarter. All of our businesses performed well during the quarter, with particular emphasis on the Plumbing & Refrigeration segment. Our manufacturing operations in Europe, China and Mexico also continued to meet or exceed their goals. Mueller's financial position remains sound. We ended the quarter with $138.9 million of cash on-hand. Also, the Company declared and paid its regular quarterly cash dividend of ten cents per common share during the second quarter. Our Annual Stockholders' Meeting was held at Mueller's headquarters in Memphis, Tennessee on May 4, 2006. The stockholders reelected our seven directors, approved the appointment of Ernst & Young LLP as our independent registered public accounting firm and approved the amendment and restatement of the Company's 2002 Stock Option Plan. Our business outlook for the third quarter of 2006 remains positive. Sincerely, /s/Harvey L. Karp /s/William D. O'Hagan Harvey L. Karp William D. O'Hagan Chairman of the Board President and Chief Executive Officer July 25, 2006 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, and competitive and technological factors, among others, as set forth in the Company's SEC filings. These filings are available through our website at www.muellerindustries.com. -1- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data)
For the Quarter Ended July 1, 2006 July 2, 2005 (Unaudited) Net sales $ 779,663 $ 410,506 Cost of goods sold 637,038 345,663 Depreciation and amortization 10,376 10,411 Selling, general, and administrative expense 39,689 29,136 ---------- ---------- Operating income 92,560 25,296 Interest expense (5,214) (4,752) Other (expense) income, net (67) 3,973 ---------- ---------- Income before income taxes 87,279 24,517 Income tax expense (28,529) (7,334) ---------- ---------- Net income $ 58,750 $ 17,183 ========== ========== Weighted average shares for basic earnings per share 36,891 36,599 Effect of dilutive stock options 421 466 ---------- ---------- Adjusted weighted average shares for diluted earnings per share 37,312 37,065 ---------- ---------- Basic earnings per share $ 1.59 $ 0.47 ========== ========== Diluted earnings per share $ 1.57 $ 0.46 ========== ========== Dividends per share $ 0.10 $ 0.10 ========== ==========
-2- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued) (In thousands, except per share data)
For the Six Months Ended July 1, 2006 July 2, 2005 (Unaudited) Net sales $ 1,330,702 $ 812,169 Cost of goods sold 1,094,107 679,687 Depreciation and amortization 20,571 20,489 Selling, general, and administrative expense 74,648 59,491 ---------- ---------- Operating income 141,376 52,502 Interest expense (10,076) (9,936) Other (expense) income, net 1,946 4,767 ---------- ---------- Income before income taxes 133,246 47,333 Income tax expense (41,131) (14,942) ---------- ---------- Net income $ 92,115 $ 32,391 ========== ========== Weighted average shares for basic earnings per share 36,791 36,552 Effect of dilutive stock options 405 556 ---------- ---------- Adjusted weighted average shares for diluted earnings per share 37,196 37,108 ---------- ---------- Basic earnings per share $ 2.50 $ 0.89 ========== ========== Diluted earnings per share $ 2.48 $ 0.87 ========== ========== Dividends per share $ 0.20 $ 0.20 ========== ==========
-3- MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
July 1, 2006 December 31, 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 ========== ==========
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