8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 6, 2018

   MUELLER INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-6770	25-0790410
(State or other	(Commission File	(IRS Employer
jurisdiction of	Number)	Identification No.)
incorporation)

8285 Tournament Drive, Suite 150   Memphis, Tennessee	38125
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (901) 753-3200

Registrant’s Former Name or Address, if changed since last report:   N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new of revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On February 6, 2018, the Registrant issued a press release announcing earnings for the quarter and year ended December 30, 2017. A copy of the press release announcing the fourth quarter and fiscal 2017 earnings is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release, dated February 6, 2018 reporting fourth quarter and fiscal 2017 earnings.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	MUELLER INDUSTRIES, INC.
	By:	/s/JEFFREY A. MARTIN
	Name:	Jeffrey A. Martin
	Title:	Chief Financial Officer and Treasurer
Date:  February 6, 2018

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Exhibit Index

Exhibit No.	Description
99.1	Press release, dated February 6, 2018.

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EX-99.1

Mueller Industries, Inc. Reports Fourth Quarter and Fiscal 2017 Earnings

MEMPHIS, Tenn., February 6, 2018 -- Mueller Industries, Inc. (NYSE: MLI) announced today operating income of $22.0 million for the fourth quarter of 2017, compared with $29.3 million in the same quarter of 2016. Net income for the quarter was $5.7 million, or 10 cents per diluted share, on net sales of $523.5 million, compared with net income of $17.3 million, or 30 cents per diluted share, on net sales of $472.2 million in the fourth quarter of 2016.

On a full year basis, the Company reported operating income of $152.0 million, compared with $152.7 million in fiscal year 2016. Net income for the year was $85.6 million, or $1.49 per diluted share, on net sales of $2.3 billion, compared with net income of $99.7 million, or $1.74 per diluted share, on net sales of $2.1 billion in fiscal year 2016.

Financial and Operating Highlights:

• During the fourth quarter of 2017, copper prices rose 4 percent and averaged $3.10 per pound. During the fourth quarter of 2016, copper prices rose 20 percent and averaged $2.39 per pound.

• The effect of changes in copper prices during the quarter on inventory valuations and hedging positions compared with the prior year quarter, along with physical inventory adjustments, resulted in a $12.0 million negative swing in operating income in the fourth quarter of 2017 compared with the fourth quarter of 2016. Both the Piping Systems and Industrial Metals segments were impacted.

• A casting outage in our brass rod mill impaired our ability to melt scrap returns in the fourth quarter of 2017 causing an excess build of $38.9 million in inventory. The line is now operating, and inventory levels are expected to normalize in 2018.

• A $6.5 million pre-tax environmental charge was recorded in the quarter related to ongoing remediation activities at U.S.S. Lead, a non-operating property.

• Interest expense for the quarter was $5.3 million, compared with $2.0 million in the same quarter of 2016. The increase was primarily due to interest on the Company’s 6% Subordinated Debentures.

• The effective tax rate for the quarter of 42 percent reflects the net impact of the 2017 Tax Cuts and Jobs Act.

Regarding the business, Greg Christopher, Mueller CEO, said, “Our fourth quarter earnings were adversely affected by inventory impacts and, to a lesser but still important degree, the ongoing challenges in our U.S. copper tube business as previously reported. The modernization of our Fulton, Mississippi copper tube mill, combined with the costs associated with the startup of our new Cedar City, Utah mill, hampered our fourth quarter results. On a full year basis, cost overruns, start-up costs, throughput constraints, quality and yield challenges, along with an associated decline in market share, impacted our copper tube earnings by over $25.0 million.”

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In conclusion, he added “The international markets we serve remained stable and better than anticipated in 2017, and demand in the U.S. markets continued to remain positive. We anticipate these conditions will continue in 2018. We will be aggressive in regaining our market share positions and avoiding the same operational issues experienced in 2017, as we remain steadfast in our commitment to grow.”

Mueller Industries, Inc. is an industrial manufacturer that specializes in copper and copper alloy manufacturing while also producing goods made from aluminum, steel, and plastics. It is headquartered in Memphis, Tennessee and comprises a network of operations in the United States, Canada, Mexico, Great Britain, South Korea, and China. Its products include tubing, fittings, valves, vessels, and related items for plumbing and HVACR related piping systems, as well as rod, forgings, extrusions, and various components for OEM applications. Products are distributed into sectors such as building construction, appliance, defense, energy, and automotive.

*********************

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,” “encourage,” “anticipate,” “appear,” 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.

CONTACT
Jeffrey A. Martin
(901) 753-3226

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Quarter Ended						For the Year Ended
(In thousands, except per share data)	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016
Net sales	$	523,524		$	472,158		$	2,266,073		$	2,055,622
Cost of goods sold	456,617			396,129			1,940,617			1,723,499
Depreciation and amortization	8,728			8,136			33,944			35,133
Selling, general, and administrative expense	35,136			34,792			139,580			137,499
Gain on sale of assets	—			—			(1,491		)	—
Impairment charges	1,055			3,778			1,466			6,778
Operating income	21,988			29,323			151,957			152,713
Interest expense	(5,292		)	(2,017		)	(19,502		)	(7,387		)
Environmental expense	(6,221		)	(668		)	(7,284		)	(1,279		)
Other income, net	414			492			1,801			1,983
Income before income taxes	10,889			27,130			126,972			146,030
Income tax expense	(4,589		)	(9,174		)	(37,884		)	(48,137		)
(Loss) income from unconsolidated affiliates, net of tax	(331		)	(1,188		)	(2,077		)	1,861
Consolidated net income	5,969			16,768			87,011			99,754
Net (income) loss attributable to noncontrolling interests	(249		)	554			(1,413		)	(27		)
Net income attributable to Mueller Industries, Inc.	$	5,720		$	17,322		$	85,598		$	99,727
Weighted average shares for basic earnings per share	57,026			56,680			56,925			56,572
Effect of dilutive stock-based awards	612			620			559			597
Adjusted weighted average shares for diluted earnings per share	57,638			57,300			57,484			57,169
Basic earnings per share	$	0.10		$	0.31		$	1.50		$	1.76
Diluted earnings per share	$	0.10		$	0.30		$	1.49		$	1.74
Dividends per share	$	0.100		$	0.100		$	8.400		$	0.375
Summary Segment Data:
Net sales:
Piping Systems Segment	$	359,253		$	320,480		$	1,564,950		$	1,429,589
Industrial Metals Segment	150,212			127,452			602,131			521,060
Climate Segment	28,045			27,690			131,448			119,758
Elimination of intersegment sales	(13,986		)	(3,464		)	(32,456		)	(14,785		)
Net sales	$	523,524		$	472,158		$	2,266,073		$	2,055,622
Operating income:
Piping Systems Segment	$	13,886		$	15,630		$	99,558		$	103,886
Industrial Metals Segment	15,277			22,383			75,752			78,168
Climate Segment	3,170			3,193			20,325			17,733
Unallocated expenses	(10,345		)	(11,883		)	(43,678		)	(47,074		)
Operating income	$	21,988		$	29,323		$	151,957		$	152,713

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)	December 30, 2017		December 31, 2016
ASSETS
Cash and cash equivalents	$	120,269	$	351,317
Accounts receivable, net	244,795		256,291
Inventories	327,901		242,013
Other current assets	46,150		44,702
Total current assets	739,115		894,323
Property, plant, and equipment, net	304,321		295,231
Other assets	276,737		257,922
	$	1,320,173	$	1,447,476
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of debt	$	16,480	$	13,655
Accounts payable	102,503		103,175
Other current liabilities	123,269		102,162
Total current liabilities	242,252		218,992
Long-term debt	448,592		213,709
Pension and postretirement liabilities	28,713		31,273
Environmental reserves	23,699		21,208
Deferred income taxes	19,403		19,573
Other noncurrent liabilities	21,486		6,284
Total liabilities	784,145		511,039
Total Mueller Industries, Inc. stockholders’ equity	522,111		898,684
Noncontrolling interests	13,917		37,753
Total equity	536,028		936,437
	$	1,320,173	$	1,447,476

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MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Year Ended
(In thousands)	December 30, 2017			December 31, 2016
Cash flows from operating activities
Consolidated net income	$	87,011		$	99,754
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization	34,247			35,702
Stock-based compensation expense	7,450			6,387
Loss (income) from unconsolidated affiliates	2,077			(1,861		)
Gain on disposal of assets	(2,115		)	(651		)
Insurance proceeds - noncapital related	500			—
Impairment charges	1,466			6,778
Deferred income taxes	(3,160		)	6,998
Changes in assets and liabilities, net of businesses acquired and sold:
Receivables	(1,779		)	(16,552		)
Inventories	(86,286		)	6,662
Other assets	(5,325		)	5,808
Current liabilities	10,678			5,646
Other liabilities	64			1,518
Other, net	(833		)	1,588
Net cash provided by operating activities	43,995			157,777
Cash flows from investing activities
Proceeds from sale of assets, net of cash transferred	31,564			10,304
Acquisition of businesses, net of cash acquired	(18,396		)	(20,533		)
Capital expenditures	(46,131		)	(37,497		)
Investment in unconsolidated affiliates	(3,317		)	—
Net withdrawals from (deposits to) restricted cash balances	2,858			(5,331		)
Net cash used in investing activities	(33,422		)	(53,057		)
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.	(196,944		)	(21,224		)
Dividends paid to noncontrolling interests	(2,909		)	(3,765		)
Issuance of long-term debt	71,475			3,500
Repayments of long-term debt	(111,224		)	(1,074		)
(Repayment) issuance of debt by consolidated joint ventures, net	(3,369		)	2,265
Net cash used to settle stock-based awards	(1,595		)	(1,306		)
Debt issuance costs	—			(957		)
Net cash used in financing activities	(244,566		)	(22,561		)
Effect of exchange rate changes on cash	2,945			(5,686		)
(Decrease) increase in cash and cash equivalents	(231,048		)	76,473
Cash and cash equivalents at the beginning of the year	351,317			274,844
Cash and cash equivalents at the end of the year	$	120,269		$	351,317

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