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Net sales of the Company's core product lines including copper tube, fittings, brass rod and forgings were substantially affected by the lower market values of copper and brass, the Company's principal raw materials, which are largely passed through to customers. In the first quarter of 2009, the Comex average price of copper was 55.5 percent lower than in the first quarter of 2008. Approximately $225 million of the decrease in net sales was attributable to lower unit volume primarily in the OEM segment. Lower selling prices, primarily in the Plumbing & Refrigeration segment, accounted for approximately $130 million of the decrease in net sales.
Financial and Operating Highlights
Regarding the first quarter of 2009, Mr. Karp said:
-- "This is the first operating loss our Company has reported since
1991. Business conditions were exceptionally difficult during the first
quarter, but improved as the quarter progressed. We do not know if the
improvement will persist, but we are hopeful that it will.
-- "Our Plumbing & Refrigeration segment posted operating earnings
of $10.3 million on net sales of $190.4 million which compares with
prior year earnings of $25.1 million on net sales of $383.9 million.
The decline in operating income was primarily due to lower unit
shipments across most product lines and higher per unit conversion costs
due to lower production volume.
-- "Our OEM segment posted an operating loss of $6.3 million during
the first quarter of 2009 on net sales of $138.4 million, which compares
with operating earnings of $25.6 million on net sales of $326.2 million
for the same period in 2008. The loss was primarily due to lower volume
and spreads and higher per unit conversion costs due to weak demand in
the industrial and automotive markets.
-- "Total stockholders' equity was $694.5 million which equates
to a book value per share of $18.70 of which $8.09 per share was cash.
-- "Our current ratio remained solid at 4.8 to 1. We ended the
quarter with $300.3 million in cash and $554.3 million in working
capital.
-- "As of quarter end, our financial leverage was modest with a debt
to total capitalization ratio of 19.9 percent.
-- "The Comex average price of copper was $1.57 per pound in the first
quarter of 2009, which compares with $3.53 in the first quarter of 2008.
-- "During the first quarter of 2009, capital expenditures totaled
$4.8 million. We expect to invest approximately $20 million for capital
expenditures during 2009."
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 OPERATIONS
(In thousands, except per share data)
For the Quarter Ended
---------------------
March 28, March 29,
2009 2008
------ ------
(Unaudited)
Net sales $326,558 $704,108
Cost of goods sold 287,383 611,797
Depreciation and amortization 10,480 10,984
Selling, general, and administrative expense 31,158 38,291
------ ------
Operating (loss) income (2,463) 43,036
Interest expense (2,636) (5,467)
Other income, net 627 4,569
------ ------
(Loss) income before income taxes (4,472) 42,138
Income tax benefit (expense) 1,962 (14,231)
------ ------
Consolidated net (loss) income (2,510) 27,907
Less: net loss (income) attributable to
noncontrolling interest 18 (552)
------ ------
Net (loss) income attributable to Mueller
Industries, Inc. $(2,492) $27,355
====== ======
Weighted average shares
for basic (loss) earnings per share 37,143 37,089
Effect of dilutive stock options - 192
------ ------
Adjusted weighted average shares
for diluted (loss) earnings per share 37,143 37,281
------ ------
Basic (loss) earnings per share $(0.07) $0.74
------ ------
Diluted (loss) earnings per share $(0.07) $0.73
====== ======
Dividends per share $0.10 $0.10
====== ======
Summary Segment Data:
---------------------
Net sales:
Plumbing & Refrigeration Segment $190,393 $383,884
OEM Segment 138,392 326,207
Elimination of intersegment sales (2,227) (5,983)
------- -------
Net sales $326,558 $704,108
======= =======
Operating (loss) income:
Plumbing & Refrigeration Segment $10,331 $25,084
OEM Segment (6,266) 25,574
Unallocated expenses (6,528) (7,622)
------- -------
Operating (loss) income $(2,463) $43,036
======= =======
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 28, December 27,
2009 2008
--------- ---------
(Unaudited)
ASSETS
Cash and cash equivalents $300,336 $278,860
Accounts receivable, net 190,172 219,035
Inventories 170,968 210,609
Other current assets 37,596 46,322
--------- ---------
Total current assets 699,072 754,826
Property, plant, and equipment, net 270,626 276,927
Other assets 148,487 151,160
--------- ---------
$1,118,185 $1,182,913
========= =========
LIABILITIES AND EQUITY
Current portion of debt $14,022 $24,184
Accounts payable 52,476 63,732
Other current liabilities 78,262 113,668
--------- ---------
Total current liabilities 144,760 201,584
Long-term debt, less current portion 158,726 158,726
Pension and postretirement liabilities 37,692 38,452
Environmental reserves 23,184 23,248
Deferred income taxes 32,663 33,940
Other noncurrent liabilities 1,441 1,698
--------- ---------
Total liabilities 398,466 457,648
--------- ---------
Total Mueller Industries, Inc. stockholders'
equity 694,458 700,683
Noncontrolling interest 25,261 24,582
--------- ---------
Total equity 719,719 725,265
--------- ---------
$1,118,185 $1,182,913
========= =========
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Quarter Ended
---------------------
March 28, March 29,
2009 2008
-------- --------
(Unaudited)
Operating activities:
Net (loss) income attributable to Mueller
Industries, Inc. $(2,492) $27,355
Reconciliation of net (loss) income
attributable to Mueller Industries,
Inc. to net cash provided by (used in)
operating activities:
Depreciation and amortization 10,521 11,110
Stock-based compensation expense 607 731
Gain on early retirement of debt - (2,408)
(Gain) loss on disposals of properties (87) 339
Deferred income taxes (248) (429)
Net (loss) income attributable to
noncontrolling interest (18) 552
Changes in assets and liabilities:
Receivables 28,010 (62,218)
Inventories 38,657 (3,664)
Other assets 3,070 (6,780)
Current liabilities (42,167) 14,264
Other liabilities (620) 2,566
Other, net (261) (2,708)
------- -------
Net cash provided by (used in)
operating activities 34,972 (21,290)
------- -------
Investing activities:
Capital expenditures (4,842) (8,573)
Proceeds from sales of properties 402 -
Net withdrawals from restricted cash
balances 5,852 85
------- -------
Net cash provided by (used in)
investing activities 1,412 (8,488)
------- -------
Financing activities:
Dividends paid (3,714) (3,709)
Issuance of shares under incentive
stock option plans from treasury - 266
(Repayment) issuance of debt by
joint venture, net (10,152) 21,032
Repayments of long-term debt - (22,979)
------- -------
Net cash used in financing activities (13,866) (5,390)
------- -------
Effect of exchange rate changes on cash (1,042) 830
------- -------
Increase (decrease) in cash and cash
equivalents 21,476 (34,338)
Cash and cash equivalents at the
beginning of the period 278,860 308,618
------- -------
Cash and cash equivalents at the
end of the period $300,336 $274,280
======= =======
SOURCE Mueller Industries, Inc.
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