EX-99.1 2 mi1964ex991.txt Exhibit 99.1 MUELLER INDUSTRIES, INC. REPORTS FOURTH QUARTER AND FISCAL 2004 EARNINGS MEMPHIS, Tenn., Feb. 3 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's earnings from continuing operations for fiscal 2004 were $2.15 per diluted share, compared with the $1.19 reported a year ago. Income from continuing operations for the year was $79.4 million, compared with $44.2 million for the prior year. Net sales for the twelve-month period were $1.4 billion, versus $1.0 billion in 2003. Net income for 2004 was $79.4 million compared with $45.4 million in 2003. For the quarter ended December 25, 2004, income from continuing operations was $15.7 million, or 42 cents per diluted share, which compares with $11.0 million, or 30 cents per diluted share, for the same period a year ago. Net sales for the three months ended December 25, 2004, were $329.8 million, compared with net sales of $267.8 million for the 2003 period. Financial and Operating Highlights Regarding 2004, Mr. Karp said: - "Overall, we enjoyed a strong year, particularly the first half. Net sales for the year were at record levels while operating income more than doubled to $112.5 million in 2004. - "Pounds of product shipped reached 734.7 million pounds compared with 695.8 million in 2003. The Comex average price of copper was $1.41 per pound in the fourth quarter of 2004 and $1.29 per pound for the full year, which compares with 94 cents in the fourth quarter of 2003 and 81 cents year-to-date in 2003. - "Rising raw material costs caused the Company to fund higher balances of accounts receivable and inventories, its two principal components of working capital. - "Cash from operating activities was $154.8 million in 2004 compared with $73.4 million during 2003. - "Our Standard Products Division posted operating earnings of $108.3 million, compared to $54.1 million in 2003. Standard Products Division's net sales were $1.0 billion for the year, compared with $717.6 million for 2003. Operating results improved on the strength of higher margins, particularly copper tube and copper fittings in the first half of 2004; both volume and margins weakened during the second half. - "Our Industrial Products Division posted operating earnings of $20.6 million during the year on net sales of $392.6 million, which compares with operating earnings of $11.7 million on net sales of $292.0 million for 2003. - "European results continued to be profitable. - "The significant changes in our balance sheet reflect the successful recapitalization that we effectuated in the fourth quarter. The recapitalization was the result of a $15.00 per share special dividend, paid in cash ($6.50 per common share) and a 6% Subordinated Debenture ($8.50 per common share). - "The Company amended and extended to November 2007 its $150 million Credit Facility with its commercial bank syndicate during the fourth quarter. At year-end, there were no borrowings outstanding under this facility. - "We invested $56.9 million in acquisitions during 2004. During the third quarter, the Company acquired Vemco Brasscapri, Ltd. for approximately $14.6 million. Vemco's net sales are approximately $26 million annually. Late in the fourth quarter, the Company acquired shares in seven companies and inventory of another (collectively Mueller Comercial S.A.) for an aggregate of $42.3 million, subject to closing adjustments, including $3.0 million for a contingent earn-out payment. These operations include pipe nipple manufacturing in Mexico and import distribution businesses which product lines include malleable iron fittings and other plumbing specialties. The combined sales of Mueller Comercial S.A. are approximately $60 million annually." Discussion of Income Taxes During 2003, the Company recognized a deferred income tax benefit related to a 1999 tax operating loss that resulted from the sale of a subsidiary in that tax year. Without this deferred income tax benefit, the Company's income from continuing operations for 2003 would have been approximately $34.9 million, or 95 cents per diluted share. Business Outlook for 2005 Discussing the outlook for the next fiscal year, Mr. Karp said, "The housing and construction markets are positioned to have another solid year in 2005. The fundamentals underlying these markets are encouraging. Mortgage rates are at near historic lows, the demand for new and existing homes continues to be vibrant, there is a modest inventory of new homes available for sale (4.1 months supply), job growth over the past 12 months was the best in five years, and household income continues to rise. Moreover, non- residential building construction is likely to grow by perhaps three to five percent in 2005 as capital projects of all sorts are funded. "On the other hand, the Federal Reserve is clearly in the process of monetary tightening, which will likely cause mortgage rates to increase. In addition, rapidly escalating home prices will at some point engender buyer resistance. "Evaluating these contrary trends is difficult at best, however, on balance we believe 2005 will be another good year for Mueller." 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, competitive and technological factors, and the availability of financing, among others, as set forth in the company's SEC filings. 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, and Great Britain.
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) For the Quarter Ended For the Year Ended ---------------------------- ---------------------------- Dec. 25, Dec. 27, Dec. 25, Dec. 27, 2004 2003 2004 2003 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) Net sales $ 329,763 $ 267,782 $ 1,379,056 $ 999,078 Cost of goods sold 267,675 218,513 1,115,612 815,849 Depreciation and amortization 10,211 9,715 40,613 38,954 Selling, general, and administrative expense 26,990 23,719 106,400 94,891 Impairment charge - - 3,941 - Operating income 24,887 15,835 112,490 49,384 Interest expense (3,315) (298) (3,974) (1,168) Environmental expense (298) (395) (976) (1,165) Other income, net 1,979 820 7,818 4,385 Income from continuing operations before income taxes 23,253 15,962 115,358 51,436 Income tax expense (7,599) (4,917) (35,942) (7,215) Income from continuing operations 15,654 11,045 79,416 44,221 Loss from operation of discontinued operations, net of tax - - - (539) Gain on disposition of discontinued operations - - - 1,699 Net income $ 15,654 $ 11,045 $ 79,416 $ 45,381 Earnings (loss) per share: Basic earnings (loss) per share: Weighted average shares outstanding 36,365 34,269 35,321 34,264 From continuing operations $ 0.43 $ 0.32 $ 2.25 $ 1.29 From discontinued operations - - - (0.02) From gain on disposition of discontinued operations - - - 0.05 Basic earnings per share $ 0.43 $ 0.32 $ 2.25 $ 1.32 Diluted earnings (loss) per share: Weighted average shares outstanding plus assumed conversions 36,931 37,000 36,911 36,861 From continuing operations $ 0.42 $ 0.30 $ 2.15 $ 1.19 From discontinued operations - - - (0.01) From gain on disposition of discontinued operations - - - 0.05 Diluted earnings per share $ 0.42 $ 0.30 $ 2.15 $ 1.23
MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 25, December 27, 2004 2003 ------------ ------------ (Unaudited) ASSETS Cash and cash equivalents $ 47,449 $ 255,088 Accounts receivable, net 201,396 163,006 Inventories 187,853 140,548 Other current assets 18,633 11,713 Total current assets 455,331 570,355 Property, plant, and equipment, net 335,610 345,537 Other assets 172,790 139,292 $ 963,731 $ 1,055,184 LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 5,328 $ 2,835 Accounts payable 79,723 42,081 Other current liabilities 95,767 73,945 Total current liabilities 180,818 118,861 Long-term debt 310,650 11,437 Pension and postretirement liabilities 33,167 31,643 Environmental reserves 9,503 9,560 Deferred income taxes 67,479 58,379 Other noncurrent liabilities 10,361 10,238 Total liabilities 611,978 240,118 Minority interest in subsidiaries 67 208 Stockholders' equity 351,686 814,858 $ 963,731 $ 1,055,184 MUELLER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year Ended ---------------------------- December 25, December 27, 2004 2003 ------------ ------------ (Unaudited) Operating activities: Net income from continuing operations $ 79,416 $ 44,221 Reconciliation of net income from continuing operations to net cash provided by operating activities: Depreciation and amortization 40,639 38,954 Income tax benefit from exercise of stock options 31,778 18 Impairment charge 3,941 - Equity in loss of unconsolidated subsidiaries 2,026 460 Provision for doubtful accounts receivable 1,404 3,172 (Gain) loss on disposal of properties (5,729) 290 Deferred income taxes 2,711 (287) Minority interest in subsidiaries, net of dividend paid (141) (213) Changes in assets and liabilities, net of business acquired: Receivables (17,995) (35,129) Inventories (26,208) 2,948 Other assets (2,055) 3,240 Current liabilities 42,913 14,620 Other liabilities 296 (54) Other, net 1,765 1,176 Net cash provided by operating activities 154,761 73,416 Investing activities: Capital expenditures (19,980) (27,236) Proceeds from sales of properties 6,334 1,412 Acquisition of businesses (56,946) (10,806) Escrowed IRB proceeds - 449 Net cash used in investing activities (70,592) (36,181) Financing activities: Dividends paid (259,882) - Acquisition of treasury stock (42,641) - Proceeds from stock options exercised 18,978 389 Subordinated debenture issuance costs (2,187) - Repayments of long-term debt (6,608) (3,894) Net cash used in financing activities (292,340) (3,505) Effect of exchange rate changes on cash 532 3,505 (Decrease) increase in cash and cash equivalents (207,639) 37,235 Cash provided by discontinued operations - 252 Cash and cash equivalents at the beginning of the period 255,088 217,601 Cash and cash equivalents at the end of the period $ 47,449 $ 255,088 SOURCE Mueller Industries, Inc. -0- 02/03/2005 /CONTACT: Kent A. McKee of Mueller Industries, Inc., +1-901-753-3208/ (MLI)