For the quarterly period ended March 30, 2013
|
Commission file number 1–6770
|
Delaware
|
25-0790410
|
(State or other jurisdiction
|
(I.R.S. Employer
|
of incorporation or organization)
|
Identification No.)
|
8285 Tournament Drive, Suite 150
|
|
Memphis, Tennessee
|
38125
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer x
|
Accelerated filer o
|
Non-accelerated filer o
|
Smaller reporting company o
|
Page
Number
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
17
|
||
21
|
||
22
|
||
23
|
||
24
|
||
24
|
||
25
|
||
26
|
PART I
|
|
Financial Statements
|
For the Quarter Ended
|
||||||||
(In thousands, except per share data)
|
March 30, 2013
|
March 31, 2012
|
||||||
Net sales
|
$
|
559,690
|
$
|
577,668
|
||||
Cost of goods sold
|
482,850
|
493,175
|
||||||
Depreciation and amortization
|
8,154
|
7,529
|
||||||
Selling, general, and administrative expense
|
31,343
|
31,602
|
||||||
Insurance settlement
|
—
|
(1,500
|
)
|
|||||
Operating income
|
37,343
|
46,862
|
||||||
Interest expense
|
(596
|
)
|
(2,637
|
)
|
||||
Other income, net
|
3,163
|
254
|
||||||
Income before income taxes
|
39,910
|
44,479
|
||||||
Income tax expense
|
(13,476
|
)
|
(11,662
|
)
|
||||
Consolidated net income
|
26,434
|
32,817
|
||||||
Net income attributable to noncontrolling interest
|
(232
|
)
|
(218
|
)
|
||||
Net income attributable to Mueller Industries, Inc.
|
$
|
26,202
|
$
|
32,599
|
||||
Weighted average shares for basic earnings per share
|
27,822
|
38,014
|
||||||
Effect of dilutive stock-based awards
|
374
|
444
|
||||||
Adjusted weighted average shares for diluted earnings per share
|
28,196
|
38,458
|
||||||
Basic earnings per share
|
$
|
0.94
|
$
|
0.86
|
||||
Diluted earnings per share
|
$
|
0.93
|
$
|
0.85
|
||||
Dividends per share
|
$
|
0.125
|
$
|
0.10
|
||||
See accompanying notes to condensed consolidated financial statements.
|
For the Quarter Ended
|
||||||||
(In thousands)
|
March 30, 2013
|
March 31, 2012
|
||||||
Consolidated net income
|
$
|
26,434
|
$
|
32,817
|
||||
Other comprehensive (loss) income, net of tax:
|
||||||||
Foreign currency translation
|
(5,324
|
)
|
6,744
|
|||||
Net change with respect to derivative instruments and hedging activities, net of tax of $980 in 2013 and $(581) in 2012
|
(1,724
|
)
|
967
|
|||||
Net actuarial loss on pension and postretirement obligations, net of tax of $(652) in 2013 and $(166) in 2012
|
1,539
|
221
|
||||||
Other, net
|
41
|
39
|
||||||
Total other comprehensive (loss) income
|
(5,468
|
)
|
7,971
|
|||||
Comprehensive income
|
20,966
|
40,788
|
||||||
Less comprehensive income attributable to noncontrolling interest
|
(199
|
)
|
(579
|
)
|
||||
Comprehensive income attributable to Mueller Industries, Inc.
|
$
|
20,767
|
$
|
40,209
|
||||
See accompanying notes to condensed consolidated financial statements.
|
(In thousands, except share data)
|
March 30, 2013
|
December 29, 2012
|
||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
183,866
|
$
|
198,934
|
||||
Accounts receivable, less allowance for doubtful accounts of $1,432 in 2013 and $1,644 in 2012
|
311,601
|
271,093
|
||||||
Inventories
|
228,211
|
229,434
|
||||||
Current deferred income taxes
|
27,989
|
26,438
|
||||||
Other current assets
|
33,490
|
21,295
|
||||||
Total current assets
|
785,157
|
747,194
|
||||||
Property, plant, and equipment, net
|
233,959
|
233,263
|
||||||
Goodwill
|
104,579
|
104,579
|
||||||
Other assets
|
19,218
|
19,119
|
||||||
Total assets
|
$
|
1,142,913
|
$
|
1,104,155
|
||||
Liabilities
|
||||||||
Current liabilities:
|
||||||||
Current portion of debt
|
$
|
53,575
|
$
|
27,570
|
||||
Accounts payable
|
82,140
|
87,574
|
||||||
Accrued wages and other employee costs
|
25,781
|
34,378
|
||||||
Other current liabilities
|
120,004
|
109,174
|
||||||
Total current liabilities
|
281,500
|
258,696
|
||||||
Long-term debt, less current portion
|
207,050
|
207,300
|
||||||
Pension liabilities
|
33,474
|
35,187
|
||||||
Postretirement benefits other than pensions
|
19,819
|
19,832
|
||||||
Environmental reserves
|
22,438
|
22,597
|
||||||
Deferred income taxes
|
21,228
|
20,910
|
||||||
Other noncurrent liabilities
|
945
|
1,667
|
||||||
Total liabilities
|
586,454
|
566,189
|
||||||
Equity
|
||||||||
Mueller Industries, Inc. stockholders’ equity:
|
||||||||
Preferred stock - $1.00 par value; shares authorized 5,000,000; none outstanding
|
—
|
—
|
||||||
Common stock - $.01 par value; shares authorized 100,000,000; issued 40,091,502; outstanding 28,114,779 in 2013 and 28,099,635 in 2012
|
401
|
401
|
||||||
Additional paid-in capital
|
268,491
|
267,826
|
||||||
Retained earnings
|
772,465
|
749,777
|
||||||
Accumulated other comprehensive loss
|
(48,057
|
)
|
(42,623
|
)
|
||||
Treasury common stock, at cost
|
(468,098
|
)
|
(468,473
|
)
|
||||
Total Mueller Industries, Inc. stockholders’ equity
|
525,202
|
506,908
|
||||||
Noncontrolling interest
|
31,257
|
31,058
|
||||||
Total equity
|
556,459
|
537,966
|
||||||
Commitments and contingencies
|
—
|
—
|
||||||
Total liabilities and equity
|
$
|
1,142,913
|
$
|
1,104,155
|
||||
See accompanying notes to condensed consolidated financial statements.
|
For the Quarter Ended
|
||||||||
(In thousands)
|
March 30, 2013
|
March 31, 2012
|
||||||
Cash flows from operating activities
|
||||||||
Consolidated net income
|
$
|
26,434
|
$
|
32,817
|
||||
Reconciliation of consolidated net income to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
8,250
|
7,621
|
||||||
Stock-based compensation expense
|
946
|
898
|
||||||
Insurance settlement
|
—
|
(1,500
|
)
|
|||||
Insurance proceeds – noncapital related
|
—
|
9,000
|
||||||
(Gain) loss on disposal of properties
|
(3,003
|
)
|
26
|
|||||
Deferred income taxes
|
(1,313
|
)
|
(2,470
|
)
|
||||
Income tax benefit from exercise of stock options
|
(30
|
)
|
(21
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Receivables
|
(42,680
|
)
|
(66,992
|
)
|
||||
Inventories
|
212
|
(13,744
|
)
|
|||||
Other assets
|
2,585
|
(1,294
|
)
|
|||||
Current liabilities
|
(5,365
|
)
|
24,688
|
|||||
Other liabilities
|
(753
|
)
|
151
|
|||||
Other, net
|
(198
|
)
|
38
|
|||||
Net cash used in operating activities
|
(14,915
|
)
|
(10,782
|
)
|
||||
Cash flows from investing activities
|
||||||||
Capital expenditures
|
(9,835
|
)
|
(9,340
|
)
|
||||
Insurance proceeds for property and equipment
|
—
|
32,500
|
||||||
Net (deposits into) withdrawals from restricted cash balances
|
(14,800
|
)
|
2,166
|
|||||
Proceeds from the sales of properties
|
3,002
|
87
|
||||||
Net cash (used in) provided by investing activities
|
(21,633
|
)
|
25,413
|
|||||
Cash flows from financing activities
|
||||||||
Repayments of long-term debt
|
(250
|
)
|
(250
|
)
|
||||
Dividends paid to stockholders of Mueller Industries, Inc.
|
(3,479
|
)
|
(3,802
|
)
|
||||
Debt issuance cost
|
(50
|
)
|
—
|
|||||
Issuance of debt by joint venture, net
|
26,060
|
899
|
||||||
Net cash received to settle stock-based awards
|
65
|
73
|
||||||
Income tax benefit from exercise of stock options
|
30
|
21
|
||||||
Net cash provided by (used in) financing activities
|
22,376
|
(3,059
|
)
|
|||||
Effect of exchange rate changes on cash
|
(896
|
)
|
1,151
|
|||||
(Decrease) increase in cash and cash equivalents
|
(15,068
|
)
|
12,723
|
|||||
Cash and cash equivalents at the beginning of the period
|
198,934
|
514,162
|
||||||
Cash and cash equivalents at the end of the period
|
$
|
183,866
|
$
|
526,885
|
||||
See accompanying notes to condensed consolidated financial statements.
|
(In thousands)
|
March 30, 2013
|
December 29, 2012
|
||||||
Raw materials and supplies
|
$
|
28,957
|
$
|
46,114
|
||||
Work-in-process
|
39,184
|
40,951
|
||||||
Finished goods
|
167,334
|
148,014
|
||||||
Valuation reserves
|
(7,264
|
)
|
(5,645
|
)
|
||||
Inventories
|
$
|
228,211
|
$
|
229,434
|
||||
For the Quarter Ended March 30, 2013
|
||||||||||||||||
(In thousands)
|
Plumbing & Refrigeration Segment
|
OEM
Segment
|
Corporate and Eliminations
|
Total
|
||||||||||||
Net sales
|
$
|
311,814
|
$
|
253,787
|
$
|
(5,911
|
)
|
$
|
559,690
|
|||||||
Cost of goods sold
|
264,814
|
223,880
|
(5,844
|
)
|
482,850
|
|||||||||||
Depreciation and amortization
|
4,247
|
3,362
|
545
|
8,154
|
||||||||||||
Selling, general, and administrative expense
|
20,128
|
6,222
|
4,993
|
31,343
|
||||||||||||
Operating income
|
22,625
|
20,323
|
(5,605
|
)
|
37,343
|
|||||||||||
Interest expense
|
(596
|
)
|
||||||||||||||
Other income, net
|
3,163
|
|||||||||||||||
Income before income taxes
|
$
|
39,910
|
||||||||||||||
For the Quarter Ended March 31, 2012
|
||||||||||||||||
(In thousands)
|
Plumbing & Refrigeration Segment
|
OEM
Segment
|
Corporate and Eliminations
|
Total
|
||||||||||||
Net sales
|
$
|
315,354
|
$
|
270,976
|
$
|
(8,662
|
)
|
$
|
577,668
|
|||||||
Cost of goods sold
|
265,471
|
236,200
|
(8,496
|
)
|
493,175
|
|||||||||||
Depreciation and amortization
|
4,145
|
3,059
|
325
|
7,529
|
||||||||||||
Selling, general, and administrative expense
|
18,980
|
6,992
|
5,630
|
31,602
|
||||||||||||
Insurance settlement
|
(1,500
|
)
|
—
|
—
|
(1,500
|
)
|
||||||||||
Operating income
|
28,258
|
24,725
|
(6,121
|
)
|
46,862
|
|||||||||||
Interest expense
|
(2,637
|
)
|
||||||||||||||
Other income, net
|
254
|
|||||||||||||||
Income before income taxes
|
$
|
44,479
|
||||||||||||||
For the Quarter Ended
|
||||||||
(In thousands)
|
March 30, 2013
|
March 31, 2012
|
||||||
Pension benefits:
|
||||||||
Service cost
|
$
|
375
|
$
|
360
|
||||
Interest cost
|
2,030
|
2,219
|
||||||
Expected return on plan assets
|
(2,798
|
)
|
(2,713
|
)
|
||||
Amortization of net loss
|
992
|
943
|
||||||
Net periodic benefit cost
|
$
|
599
|
$
|
809
|
||||
Other benefits:
|
||||||||
Service cost
|
$
|
68
|
$
|
75
|
||||
Interest cost
|
280
|
309
|
||||||
Amortization of prior service cost
|
2
|
—
|
||||||
Amortization of net (gain) loss
|
(26
|
)
|
3
|
|||||
Net periodic benefit cost
|
$
|
324
|
$
|
387
|
||||
March 30, 2013
|
||||||
(In thousands)
|
Location
|
Fair value
|
||||
Commodity contracts
|
Other current liabilities:
|
Loss positions
|
$
|
(1,371
|
)
|
December 29, 2012
|
||||||
(In thousands)
|
Location
|
Fair value
|
||||
Commodity contracts
|
Other current liabilities:
|
Gain positions
|
$
|
172
|
||
Loss positions
|
(420
|
)
|
(Loss) Gain Recognized in Accumulated OCI (Effective Portion), Net of Tax
|
||||||||
For the Quarter Ended
|
||||||||
(In thousands)
|
March 30, 2013
|
March 31, 2012
|
||||||
Commodity contracts
|
$
|
(657
|
)
|
$
|
1,287
|
(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion), Net of Tax
|
||||||||
For the Quarter Ended
|
||||||||
(In thousands)
|
March 30, 2013
|
March 31, 2012
|
||||||
Commodity contracts:
|
||||||||
Cost of goods sold
|
$
|
(78
|
)
|
$
|
(374
|
)
|
Gains (Losses) on Fair Value Hedges for the Quarter Ended March 30, 2013
|
|||||
(In thousands)
|
Location
|
Amount
|
|||
Gain on the derivatives designated and qualifying fair value hedges:
|
|||||
Commodity Contracts
|
Cost of goods sold
|
$
|
3,333
|
||
(Loss) on the hedged item designated and qualifying fair value hedges:
|
|||||
Inventory
|
Cost of goods sold
|
$
|
(2,885
|
)
|
March 30, 2013
|
||||||
(In thousands)
|
Location
|
Fair value
|
||||
Firm commitment
|
Other current assets:
|
Gain positions
|
$
|
53
|
||
Foreign currency contracts
|
Other current liabilities:
|
Loss positions
|
(53
|
)
|
||
December 29, 2012
|
||||||
(In thousands)
|
Location
|
Fair value
|
||||
Foreign currency contracts
|
Other current assets:
|
Gain positions
|
$
|
307
|
||
Firm commitment
|
Other current liabilities:
|
Loss positions
|
(307
|
)
|
(Loss) Gain Recognized in Accumulated OCI (Effective Portion), Net of Tax
|
||||||||
For the Quarter Ended
|
||||||||
(In thousands)
|
March 30, 2013
|
March 31, 2012
|
||||||
Interest rate swap
|
$
|
(999
|
)
|
$
|
—
|
For the Quarter Ended March 30, 2013
|
||||||||||||||||||||
(In thousands)
|
Cumulative translation adjustment
|
Unrealized (losses)/gains on derivatives
|
Minimum pension/OPEB liability adjustment
|
Unrealized gains on equity investments
|
Total
|
|||||||||||||||
Beginning balance
|
$
|
(3,033
|
)
|
$
|
(166
|
)
|
$
|
(39,527
|
)
|
$
|
103
|
$
|
(42,623
|
)
|
||||||
Other comprehensive income before reclassifications
|
(5,290
|
)
|
(1,650
|
)
|
890
|
41
|
(6,009
|
)
|
||||||||||||
Amounts reclassified from accumulated OCI
|
—
|
(74
|
)
|
649
|
—
|
575
|
||||||||||||||
Net current-period other comprehensive income
|
(5,290
|
)
|
(1,724
|
)
|
1,539
|
41
|
(5,434
|
)
|
||||||||||||
Ending balance
|
$
|
(8,323
|
)
|
$
|
(1,890
|
)
|
$
|
(37,988
|
)
|
$
|
144
|
$
|
(48,057
|
)
|
For the Quarter Ended March 30, 2013
|
|||||
(In thousands)
|
Amount reclassified from Accumulated OCI
|
Affected line item
|
|||
Unrealized gains on derivatives:
|
|||||
Closed positions, commodity contracts
|
$
|
(90
|
)
|
Cost of goods sold
|
|
16
|
|
Income tax expense
|
|||
(74
|
)
|
Net of tax
|
|||
—
|
Noncontrolling interest
|
||||
$
|
(74
|
)
|
Net of tax and noncontrolling interest
|
||
Amortization of employee benefit items:
|
|||||
Amortization of net loss
|
$
|
968
|
|
Selling, general, and administrative expense
|
|
(319
|
)
|
Income tax expense
|
|||
649
|
Net of tax
|
||||
—
|
Noncontrolling interest
|
||||
$
|
649
|
|
Net of tax and noncontrolling interest
|
||
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Quantitative and Qualitative Disclosures About Market Risk
|
Controls and Procedures
|
Risk Factors
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
(a)
|
(b)
|
(c)
|
(d)
|
|||||||||||
Total Number
of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
|
|||||||||||
7,647,030
|
(1)
|
|||||||||||||
December 30, 2012 – January 26, 2013
|
894
|
(2)
|
$
|
50.54
|
—
|
|||||||||
January 27 – February 23, 2013
|
2,724
|
(2)
|
$
|
54.02
|
—
|
|||||||||
February 24 – March 30, 2013
|
12,079
|
(2)
|
$
|
52.80
|
—
|
|||||||||
(1) Shares available to be purchased under the Company’s ten million share repurchase authorization until October 2013. The extension of the authorization was announced on October 26, 2012.
|
||||||||||||||
(2) Shares tendered to the Company by holders of stock-based awards in payment of the purchase price and/or withholding taxes upon exercise and/or vesting.
|
Exhibits
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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||
32.1
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Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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||
32.2
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Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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||
101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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||
101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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||
101.INS
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XBRL Instance Document
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||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
||
101.PRE
|
XBRL Presentation Linkbase Document
|
||
101.SCH
|
XBRL Taxonomy Extension Schema
|
MUELLER INDUSTRIES, INC.
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|
/s/ Jeffrey A. Martin
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Jeffrey A. Martin
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April 26, 2013
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Chief Financial Officer and Treasurer
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Date
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(Principal Financial and Accounting Officer)
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/s/ Richard W. Corman
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April 26, 2013
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Richard W. Corman
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Date
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Vice President – Controller
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EXHIBIT INDEX
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|
Exhibits
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Description
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31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.INS
|
XBRL Instance Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Presentation Linkbase Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
1.
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I have reviewed this quarterly report on Form 10-Q of Mueller Industries, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: April 26, 2013
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/s/ Gregory L. Christopher
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Gregory L. Christopher
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Mueller Industries, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: April 26, 2013
|
||
/s/ Jeffrey A. Martin
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||
Jeffrey A. Martin
|
||
Chief Financial Officer and Treasurer
|
||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Gregory L Christopher
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Gregory L. Christopher
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Chief Executive Officer
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|
April 26, 2013
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|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Jeffrey A. Martin
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|
Jeffrey A. Martin
|
|
Chief Financial Officer
|
|
April 26, 2013
|
|
Insurance Claims (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 30, 2013
|
Mar. 31, 2012
|
Dec. 25, 2010
|
|
Fulton, Mississippi, Copper Tube Facility [Abstract] | |||
Gain recognized on settlement of insurance claim | $ 1.5 | $ 1.5 | |
Wynne, Arkansas, Copper Tube Facility [Abstract] | |||
Advances received from insurance company | 65.0 | ||
Insurance advances classified as other current liabilities | $ 44.3 |
Commitments and Contingencies
|
3 Months Ended |
---|---|
Mar. 30, 2013
|
|
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 2 – Commitments and Contingencies The Company is involved in certain litigation as a result of claims that arose in the ordinary course of business, which management believes will not have a material adverse effect on the Company's financial position, results of operations, or cash flows. The Company may also realize the benefit of certain legal claims and litigation in the future; these gain contingencies are not recognized in the Condensed Consolidated Financial Statements. Extruded Metals Class Action A purported class action was filed in Michigan Circuit Court by Gaylord L. Miller, and all others similarly situated, against Extruded Metals, Inc. (Extruded) in March 2012 under nuisance, negligence, and gross negligence theories. It is brought on behalf of all persons in the City of Belding, Michigan, whose property rights have allegedly been interfered with by fallout and/or dust and/or noxious odors, allegedly attributable to Extruded's operations. Plaintiffs allege that they have suffered interference with the use and enjoyment of their properties. They seek compensatory and exemplary damages and injunctive relief. The court has not yet been asked to certify a class. The Company has reached a settlement in principle that, if approved by the court, will result in the dismissal of the action. The Company and Plaintiffs are preparing documents that will embody the settlement. It is expected that Plaintiffs will file a motion for court approval of the settlement in the near future. Should the settlement not be consummated or approved, the Company will complete its discovery, oppose Plaintiffs' expected class certification motion, and seek dismissal of Plaintiffs' claims. Until the settlement is consummated and approved, or until the court rules on key motions (should the settlement not be consummated or approved), the Company is unable to determine the impact, if any, that this matter will have on its financial position, results of operations, or cash flows. U.K. Actions Relating to the European Commission's 2004 Copper Tube Decision and 2006 Copper Fittings Decision Mueller Industries, Inc., WTC Holding Company, Inc., DENO Holding Company, Inc., Mueller Europe, Limited, and DENO Acquisition EURL (the Mueller entities) have received letters from counsel for IMI plc and IMI Kynoch Limited (IMI) and from counsel for Boliden AB (Boliden) concerning contribution proceedings by IMI and Boliden against the Mueller entities regarding copper tube. In the Competition Appeal Tribunal (the CAT) in the United Kingdom, IMI and Boliden have been served with claims by 21 claimants, all companies within the Travis Perkins Group (TP and the TP Claimants). The TP Claimants are seeking follow-on damages arising out conduct described in the European Commission's September 3, 2004, decision regarding copper tube. The claims purport to arise from the findings of the European Commission as set forth in that decision. Mueller Industries, Inc., Mueller Europe, Limited, and WTC Holding Company, Inc. also have received a letter from counsel for IMI concerning contribution proceedings by IMI against those three Mueller entities regarding copper fittings. In the High Court, IMI has been served with claims by 21 TP Claimants. The TP Claimants are seeking follow-on damages arising out of conduct described in the European Commission's September 20, 2006, decision regarding copper fittings. The claims similarly purport to arise from the findings of the European Commission as set forth in that decision. The letters confirm that IMI and Boliden have commenced legal proceedings against the Mueller entities, and in those proceedings are claiming a contribution for any follow-on damages. IMI and Boliden have formally served their claims on the Mueller entities. While the TP Claimants have provided their preliminary calculations of aggregate claimed damages for the copper tube claim and the copper fittings claim, Mueller does not believe this matter will have a material affect on the Consolidated Financial Statements for the contribution claims. As to the claims arising from the Copper Tube Decision brought in the CAT, following the CAT's grant of approval, the case has now been transferred to the High Court. Mueller's defenses in response to the contribution claims brought by IMI and Boliden were served on March 15, 2013. A case management conference is to be held on the first available date after March 25, 2013. As to the claims arising from the Copper Fittings Decision, these proceedings have been stayed until the next case management conference which is to take place on the first available date after May 31, 2013. At this time, the Company is unable to estimate the impact, if any, that this matter will have on its financial position, results of operations, or cash flows. United States Department of Commerce Antidumping Review On December 24, 2008, the United States Department of Commerce (DOC) initiated an antidumping administrative review of the antidumping duty order covering circular welded non-alloy steel pipe and tube from Mexico to determine the final antidumping duties owed on U.S. imports during the period November 1, 2007 through October 31, 2008, by certain subsidiaries of the Company. On April 19, 2010, the DOC published the final results of this review and assigned Mueller Comercial de Mexico, S. de R.L. de C.V. (Mueller Comercial) an antidumping duty rate of 48.3 percent. The Company appealed the final determination to the U.S. Court of International Trade (CIT). The Company and the United States have reached an agreement to settle the appeal. As a result, the DOC published on March 22, 2013 the amended final results of the review and assigned Mueller Comercial an antidumping duty rate of 40.5 percent. U.S. Customs and Border Protection will now assess final antidumping duties on subject imports during the period of review. The Company has established a reserve of approximately $3.8 million for these duties. On December 23, 2009, the DOC initiated an antidumping administrative review of the antidumping duty order covering circular welded non-alloy steel pipe and tube from Mexico for the November 1, 2008 through October 31, 2009 period of review. The DOC selected Mueller Comercial as a respondent in the review. On June 21, 2011, the DOC published the final results of the review and assigned Mueller Comercial an antidumping duty rate of 19.8 percent. On August 22, 2011, the Company appealed the final results to the CIT. On December 21, 2012, the CIT issued a decision upholding the Department's final results in part. The ruling is not yet final. Once a final ruling is issued, it may be appealed by the Company. The Company anticipates that certain of its subsidiaries will incur antidumping duties on subject imports made during the period of review and, as such, established a reserve of approximately $1.1 million for this matter. On December 28, 2010, the DOC initiated an antidumping administrative review of the antidumping duty order covering circular welded non-allow steel pipe and tube from Mexico for the November 1, 2009 through October 31, 2010 period of review. The DOC selected Mueller Comercial as a respondent for this period of review. On December 14, 2011, the DOC issued a final determination that Mueller Comercial did not ship subject merchandise to the United States during the relevant period of review. Therefore, there is zero antidumping duty liability for the Company and its subsidiaries for imports made during the November 1, 2009 through October 31, 2010 period of review. On December 30, 2011, the DOC initiated an antidumping administrative review of the antidumping duty order covering circular welded non-alloy steel pipe and tube from Mexico for the November 1, 2010, through October 31, 2011 period of review. The DOC selected Mueller Comercial as a respondent for this period of review. On December 11, 2012, the DOC issued a preliminary determination to rescind the review with regard to Mueller Comercial. Following the preliminary determination, Mueller Comercial certified to the DOC that it did not have any shipments of the subject merchandise during the period of review. By June 10, 2013, the DOC should issue its final determination confirming Mueller Comercial's claim of no shipments. On December 31, 2012, the DOC initiated an antidumping administrative review of the antidumping duty order covering circular welded non-alloy steel pipe and tube from Mexico for the November 1, 2011, through October 31, 2012, period of review. The DOC selected Mueller Comercial as a respondent for this period of review. On April 3, 2013, Mueller Comercial certified that it had no shipments of the subject merchandise to the United States during the period of review. By the end of 2013, the DOC should issue its final determination finding that Mueller Comercial did not have any shipments of the subject merchandise. Lead Refinery Site U.S.S. Lead Refinery, Inc. (Lead Refinery), a non-operating wholly owned subsidiary of Mining Remedial Recovery Company (MRRC), has conducted corrective action and interim remedial activities and studies (collectively, Site Activities) at Lead Refinery's East Chicago, Indiana site pursuant to the Resource Conservation and Recovery Act. Site Activities, which began in December 1996, have been substantially concluded. Lead Refinery is required to perform monitoring and maintenance activities with respect to Site Activities pursuant to a post-closure permit issued by the Indiana Department of Environmental Management (IDEM) effective as of March 2, 2013. Lead Refinery spent approximately $0.1 million annually in 2012, 2011 and 2010 with respect to this site. Approximate costs to comply with the post-closure permit, including associated general and administrative costs, are between $2.4 million and $3.6 million over the next 20 years. On April 9, 2009, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Environmental Protection Agency (EPA) added the Lead Refinery site, and properties surrounding the Lead Refinery site, to the National Priorities List (NPL). The NPL is a list of priority sites where the Environmental Protection Agency (EPA) has determined that there has been a release or threatened release of hazardous substances that warrant investigation and, if appropriate, remedial action. The NPL does not assign liability to any party including the owner or operator of a property placed on the NPL. The placement of a site on the NPL does not necessarily mean that remedial action must be taken. On July 17, 2009, Lead Refinery received a written notice from the EPA that the agency is of the view that Lead Refinery may be a PRP under CERCLA in connection with the release or threat of release of hazardous substances including lead into properties surrounding the Lead Refinery site. The EPA has identified two other PRPs in connection with the release or threat of release of hazardous substances into properties surrounding the Lead Refinery site. PRPs under CERCLA include current and former owners and operators of a site, persons who arranged for disposal or treatment of hazardous substances at a site, or persons who accepted hazardous substances for transport to a site. In November 2012, the EPA adopted a remedy in connection with properties surrounding the Lead Refinery site. The EPA has estimated that the cost to implement the November 2012 remedy will be $29.9 million. The Company monitors EPA releases and periodically communicates with the EPA to inquire of the status of the investigation and cleanup of the Lead Refinery site. As of March 30, 2013, the EPA has not conducted an investigation of the Lead Refinery site, proposed remedies for the Lead Refinery site, or informed Lead Refinery that it is a PRP at the Lead Refinery site. Until the extent of remedial action is determined for the Lead Refinery site, the Company is unable to determine the likelihood of a material adverse outcome or the amount or range of a potential loss with respect to placement of the Lead Refinery site and adjacent properties on the NPL. Lead Refinery lacks the financial resources needed to undertake any investigations or remedial action that may be required by the EPA pursuant to CERCLA. Other Guarantees, in the form of letters of credit, are issued by the Company generally to assure the payment of insurance deductibles and certain retiree health benefits. The terms of the Company's guarantees are generally one year but are renewable annually as required. These letters are primarily backed by the Company's revolving credit facility. The maximum payments that the Company could be required to make under its guarantees at March 30, 2013 were $10.9 million. |
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