Delaware
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1-6770
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25-0790410
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(State or other
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(Commission File
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(IRS Employer
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jurisdiction
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Number)
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Identification No.)
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of incorporation)
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8285 Tournament Drive
Suite 150
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Memphis, Tennessee
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38125
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(Address of principal
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Zip Code
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executive offices)
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MUELLER INDUSTRIES, INC. | |||
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By:
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/s/ Kent A. McKee | |
Name: | Kent A. McKee | ||
Title: | Executive Vice President and Chief Financial Officer | ||
Exhibit No.
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Description
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99.1
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Press release, dated October 25, 2011.
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Mueller Industries, Inc. Reports Third Quarter Results
Quarterly and Year-to-Date Earnings
MEMPHIS, Tenn., Oct. 25, 2011 /PRNewswire/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income in the third quarter was $10.5 million, or 27 cents per diluted share, on net sales of $585.8 million. This compares with net income of $18.9 million, or 50 cents per diluted share, on net sales of $507.2 million in the third quarter of 2010. The third quarter 2011 results were affected by the precipitous decline in copper prices, resulting in a pretax charge of $6.8 million (or approximately 12 cents per diluted share after tax). Without these charges, earnings would have been 39 cents per diluted share.
Year-to-date, the Company earned $73.4 million, or $1.92 per diluted share, which includes a gain of 18 cents per diluted share related to a favorable litigation settlement. For the same period of 2010, net income was $68.4 million, or $1.81 per diluted share, which includes an insurance settlement gain of 59 cents per diluted share.
Net sales for the first nine months of 2011 were $1.93 billion compared with net sales of $1.53 billion for the same period a year ago.
Financial and Operating Highlights
Regarding the third quarter of 2011, Mr. Karp said:
Business Outlook
Regarding the outlook, Mr. Karp said, "The near-term outlook for the housing sector continues to be subdued; however, the construction of multi-family housing is improving. Commercial construction is also showing glimmers of better times ahead.
"We believe that the employment picture must brighten as a prerequisite for improvement in the housing market."
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 | ||||||||
October 1, | September 25, | October 1, | September 25, | ||||||
2011 | 2010 | 2011 | 2010 | ||||||
(Unaudited) | (Unaudited) | ||||||||
Net sales | $ 585,809 | $ 507,240 | $ 1,926,413 | $ 1,532,896 | |||||
Cost of goods sold | 523,984 | 437,597 | 1,687,735 | 1,317,290 | |||||
Depreciation and amortization | 8,716 | 9,934 | 27,581 | 30,372 | |||||
Selling, general, and administrative expense | 34,245 | 28,810 | 102,944 | 99,601 | |||||
Litigation settlement | - | - | (10,500) | - | |||||
Insurance settlement | - | 12 | - | (21,284) | |||||
Operating income | 18,864 | 30,887 | 118,653 | 106,917 | |||||
Interest expense | (2,822) | (3,072) | (9,004) | (8,568) | |||||
Other income (expense), net | 102 | 30 | 1,425 | (2,348) | |||||
Income before income taxes | 16,144 | 27,845 | 111,074 | 96,001 | |||||
Income tax expense | (5,403) | (9,098) | (37,060) | (26,418) | |||||
Consolidated net income | 10,741 | 18,747 | 74,014 | 69,583 | |||||
Net (income) loss attributable to noncontrolling interest | (266) | 162 | (621) | (1,158) | |||||
Net income attributable to Mueller Industries, Inc. | $ 10,475 | $ 18,909 | $ 73,393 | $ 68,425 | |||||
Weighted average shares | |||||||||
for basic earnings per share | 37,878 | 37,710 | 37,779 | 37,657 | |||||
Effect of dilutive stock-based awards | 483 | 92 | 367 | 77 | |||||
Adjusted weighted average shares | |||||||||
for diluted earnings per share | 38,361 | 37,802 | 38,146 | 37,734 | |||||
Basic earnings per share | $ 0.28 | $ 0.50 | $ 1.94 | $ 1.82 | |||||
Diluted earnings per share | $ 0.27 | $ 0.50 | $ 1.92 | $ 1.81 | |||||
Dividends per share | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 | |||||
Summary Segment Data: | |||||||||
Net sales: | |||||||||
Plumbing & Refrigeration Segment | $ 325,776 | $ 282,735 | $ 1,053,434 | $ 825,114 | |||||
OEM Segment | 266,560 | 228,981 | 899,982 | 718,965 | |||||
Elimination of intersegment sales | (6,527) | (4,476) | (27,003) | (11,183) | |||||
Net sales | $ 585,809 | $ 507,240 | $ 1,926,413 | $ 1,532,896 | |||||
Operating income: | |||||||||
Plumbing & Refrigeration Segment | $ 13,884 | $ 11,511 | $ 68,357 | $ 71,710 | |||||
OEM Segment | 12,172 | 22,994 | 60,634 | 56,057 | |||||
Unallocated expenses | (7,192) | (3,618) | (10,338) | (20,850) | |||||
Operating income | $ 18,864 | $ 30,887 | $ 118,653 | $ 106,917 | |||||
MUELLER INDUSTRIES, INC. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(In thousands) | |||||
October 1, | December 25, | ||||
2011 | 2010 | ||||
(Unaudited) | |||||
ASSETS | |||||
Cash and cash equivalents | $ 448,853 | $ 394,139 | |||
Accounts receivable, net | 315,709 | 269,258 | |||
Inventories | 214,868 | 209,892 | |||
Other current assets | 53,366 | 39,025 | |||
Total current assets | 1,032,796 | 912,314 | |||
Property, plant, and equipment, net | 207,761 | 229,498 | |||
Other assets | 118,353 | 117,184 | |||
$ 1,358,910 | $ 1,258,996 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current portion of debt | $ 52,827 | $ 32,020 | |||
Accounts payable | 65,743 | 67,849 | |||
Other current liabilities | 113,823 | 95,258 | |||
Total current liabilities | 232,393 | 195,127 | |||
Long-term debt | 156,726 | 158,226 | |||
Pension and postretirement liabilities | 39,649 | 40,939 | |||
Environmental reserves | 23,111 | 23,902 | |||
Deferred income taxes | 19,788 | 24,081 | |||
Other noncurrent liabilities | 2,187 | 824 | |||
Total liabilities | 473,854 | 443,099 | |||
Total Mueller Industries, Inc. stockholders' equity | 856,189 | 788,736 | |||
Noncontrolling interest | 28,867 | 27,161 | |||
Total equity | 885,056 | 815,897 | |||
$ 1,358,910 | $ 1,258,996 | ||||
MUELLER INDUSTRIES, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
For the Nine Months Ended | |||||||
October 1, | September 25, | ||||||
2011 | 2010 | ||||||
(Unaudited) | |||||||
Operating activities: | |||||||
Consolidated net income | $ 74,014 | $ 69,583 | |||||
Reconciliation of net income to net cash provided by | |||||||
operating activities: | |||||||
Depreciation and amortization | 27,844 | 30,550 | |||||
Stock-based compensation expense | 2,583 | 2,185 | |||||
(Gain) loss on disposal of properties | (99) | 252 | |||||
Insurance settlement | - | (21,284) | |||||
Insurance proceeds - noncapital related | 10,000 | 5,561 | |||||
Deferred income taxes | (2,785) | (8,386) | |||||
Income tax benefit from exercise of stock options | (867) | (89) | |||||
Changes in assets and liabilities, net of business acquired: | |||||||
Receivables | (38,480) | (50,810) | |||||
Inventories | (10,432) | 2,800 | |||||
Other assets | (9,263) | 6,158 | |||||
Current liabilities | 13,703 | 21,562 | |||||
Other liabilities | 1,907 | 2,839 | |||||
Other, net | 759 | (225) | |||||
Net cash provided by operating activities | 68,884 | 60,696 | |||||
Investing activities: | |||||||
Capital expenditures | (13,128) | (14,210) | |||||
Acquisition of business | (6,882) | (2,021) | |||||
Insurance proceeds | - | 17,703 | |||||
Proceeds from sales of properties | 1,745 | 26 | |||||
Net (deposits into) withdrawals from restricted cash balances | (5,120) | 1,649 | |||||
Net cash (used in) provided by investing activities | (23,385) | 3,147 | |||||
Financing activities: | |||||||
Dividends paid | (11,345) | (11,300) | |||||
Debt issuance costs | (1,942) | - | |||||
Issuance of shares under stock-based incentive plans | |||||||
from treasury | 11,885 | 2,463 | |||||
Income tax benefit from exercise of stock options | 867 | 89 | |||||
Acquisition of treasury stock | (8,211) | (85) | |||||
Repayments of long-term debt | (1,902) | - | |||||
Issuance (repayment) of debt by joint venture, net | 19,316 | (1,097) | |||||
Net cash provided by (used in) financing activities | 8,668 | (9,930) | |||||
Effect of exchange rate changes on cash | 547 | 202 | |||||
Increase in cash and cash equivalents | 54,714 | 54,115 | |||||
Cash and cash equivalents at the beginning of the period | 394,139 | 346,001 | |||||
Cash and cash equivalents at the end of the period | $ 448,853 | $ 400,116 | |||||
MUELLER INDUSTRIES, INC. | ||||||||
RECONCILIATION OF NET INCOME AS REPORTED | ||||||||
TO NET INCOME BEFORE LOWER-OF-COST-OR-MARKET RESERVE | ||||||||
(In thousands, except per share data) | ||||||||
Earnings without the lower-of-cost-or-market (LCM) reserve in the third quarter of 2011 is a measurement not derived in accordance with generally accepted accounting principles (GAAP). Excluding the LCM reserve is useful as it assists in comparing our results to competitors. The LCM reserve resulted from the decrease in copper prices experienced near the end of the quarter, causing the Company to write-down approximately $6.8 million of certain inventories valued using the first-in, first-out (FIFO) and average cost methods to the lower-of-cost-or-market. Reconciliation of net income as reported to earnings without the LCM reserve is as follows: | ||||||||
For the Three Months Ended October 1, 2011 | ||||||||
Impact of | Pro forma | |||||||
As | LCM | Without | ||||||
Reported | Reserve | LCM Reserve | ||||||
(Unaudited) | ||||||||
Operating income | $ 18,864 | $ 6,796 | $ 25,660 | |||||
Interest expense | (2,822) | - | (2,822) | |||||
Other income, net | 102 | - | 102 | |||||
Income before income taxes | 16,144 | 6,796 | 22,940 | |||||
Income tax expense | (5,403) | (2,379) | (7,782) | |||||
Consolidated net income | 10,741 | 4,417 | 15,158 | |||||
Net income attributable to noncontrolling interest | (266) | - | (266) | |||||
Net income attributable to Mueller Industries, Inc. | $ 10,475 | $ 4,417 | $ 14,892 | |||||
Diluted earnings per share | $ 0.27 | $ 0.12 | $ 0.39 | |||||
MUELLER INDUSTRIES, INC. | |||||||||
RECONCILIATION OF NET INCOME AS REPORTED | |||||||||
TO NET INCOME BEFORE LITIGATION SETTLEMENT, LOWER-OF-COST-OR-MARKET RESERVE, | |||||||||
AND INSURANCE SETTLEMENT | |||||||||
(In thousands, except per share data) | |||||||||
Earnings without the litigation settlement and lower-of-cost-or-market (LCM) reserve in 2011 and without the insurance settlement in 2010 is a measurement not derived in accordance with generally accepted accounting principles (GAAP). Excluding the LCM reserve is useful as it assists in comparing our results to competitors. Excluding the litigation settlement and insurance settlement is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business. The LCM reserve resulted from the decrease in copper prices experienced near the end of the quarter, causing the Company to write-down approximately $6.8 million of certain inventories valued using the first-in, first-out (FIFO) and average cost methods to the lower-of-cost-or-market. The litigation settlement resulted from the collection of proceeds from the lawsuit against Peter Berkman, Jeffrey Berkman, and Homewerks Worldwide LLC. The insurance settlement resulted from the final settlement for losses claimed as a result of a fire at our U.K. subsidiary in November 2008, the results of which are not impacted by daily operations and are not expected to recur in future periods. Reconciliations of net income as reported to earnings without the litigation settlement, LCM reserve, and insurance settlement are as follows: | |||||||||
For the Nine Months Ended October 1, 2011 | |||||||||
Pro forma | |||||||||
Without | |||||||||
Impact of | Impact of | Litigation | |||||||
As | Litigation | LCM | Settlement | ||||||
Reported | Settlement | Reserve | & LCM | ||||||
(Unaudited) | |||||||||
Operating income | $ 118,653 | $ (10,500) | $ 6,796 | $ 114,949 | |||||
Interest expense | (9,004) | - | - | (9,004) | |||||
Other income, net | 1,425 | - | - | 1,425 | |||||
Income before income taxes | 111,074 | (10,500) | 6,796 | 107,370 | |||||
Income tax expense | (37,060) | 3,675 | (2,379) | (35,764) | |||||
Consolidated net income | 74,014 | (6,825) | 4,417 | 71,606 | |||||
Net income attributable to noncontrolling interest | (621) | - | - | (621) | |||||
Net income attributable to Mueller Industries, Inc. | $ 73,393 | $ (6,825) | $ 4,417 | $ 70,985 | |||||
Diluted earnings per share | $ 1.92 | $ (0.18) | $ 0.12 | $ 1.86 | |||||
For the Nine Months Ended September 25, 2010 | |||||||||
Pro forma | |||||||||
Impact of | Without | ||||||||
As | Insurance | Insurance | |||||||
Reported | Settlement | Settlement | |||||||
(Unaudited) | |||||||||
Operating income | $ 106,917 | $ (21,284) | $ 85,633 | ||||||
Interest expense | (8,568) | - | (8,568) | ||||||
Other expense, net | (2,348) | - | (2,348) | ||||||
Income before income taxes | 96,001 | (21,284) | 74,717 | ||||||
Income tax expense (Note A) | (26,418) | (1,090) | (27,508) | ||||||
Consolidated net income | 69,583 | (22,374) | 47,209 | ||||||
Net income attributable to noncontrolling interest | (1,158) | - | (1,158) | ||||||
Net income attributable to Mueller Industries, Inc. | $ 68,425 | $ (22,374) | $ 46,051 | ||||||
Diluted earnings per share | $ 1.81 | $ (0.59) | $ 1.22 | ||||||
(A) Realization of this insurance settlement resulted in a tax benefit primarily from the utilization of U.K. net operating losses that were previously reserved. | |||||||||
CONTACT: Kent A. McKee, +1-901-753-3208