<PAGE> 1
1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended June 29, 1996 Commissions file number 1-6770
MUELLER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 25-0790410
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6799 GREAT OAKS ROAD
MEMPHIS, TN 38138-2572
(Address of principal executive offices)
Registrant's telephone number, including area code: (901) 753-3200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $ 0.01 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes /X/ No / /
The number of shares of the Registrant's common stock outstanding as of
July 15, 1996 was 17,386,898.
<PAGE> 2
MUELLER INDUSTRIES, INC.
FORM 10-Q
For the Period Ended June 29, 1996
INDEX
Part I. Financial Information Page
Item 1. Financial Statements (Unaudited)
a.) Consolidated Statements of Income
for the six-months and quarters ended
June 29, 1996 and July 1, 1995.......................3
b.) Consolidated Balance Sheets
as of June 29, 1996 and December 30, 1995............4
c.) Consolidated Statements of Cash Flows
for the six-months ended June 29, 1996
and July 1, 1995.....................................6
d.) Notes to Consolidated Financial Statements...........7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................7
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders......10
Item 5. Other Information........................................10
Item 6. Exhibits and Reports on Form 8-K.........................11
Signatures...........................................................12
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
<CAPTION>
For the Quarter Ended For the Six-Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $189,557 $181,380 $370,072 $353,150
Cost of goods sold 149,536 149,587 293,068 290,147
------- ------- ------- -------
Gross profit 40,021 31,793 77,004 63,003
Depreciation and amortization 4,571 3,763 9,021 7,409
Selling, general, and
administrative expense 14,919 12,409 28,823 25,376
------- ------- ------- -------
Operating income 20,531 15,621 39,160 30,218
Interest expense (1,473) (1,134) (2,713) (2,511)
Other income, net 1,060 1,102 2,940 2,575
------- ------- ------- -------
Income before income taxes 20,118 15,589 39,387 30,282
Current income tax expense (3,294) (4,419) (8,555) (8,687)
Deferred income tax expense (2,927) (507) (3,643) (882)
------- ------- ------- -------
Total income tax expense (6,221) (4,926) (12,198) (9,569)
------- ------- ------- -------
Net income $ 13,897 $ 10,663 $ 27,189 $ 20,713
======= ======= ======= =======
Net income per share:
Primary:
Average shares outstanding 19,525 19,099 19,457 19,012
Net income $ 0.71 $ 0.56 $ 1.40 $ 1.09
======= ======= ======= =======
Fully diluted:
Average shares outstanding 19,550 19,201 19,550 19,227
Net income $ 0.71 $ 0.56 $ 1.39 $ 1.08
======= ======= ======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 4
<TABLE>
MUELLER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
<CAPTION>
June 29, 1996 December 30, 1995
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 52,804 $ 48,357
Accounts receivable, less allowance
for doubtful accounts of $2,821 in
1996 and $2,986 in 1995 107,218 83,712
Inventories:
Raw material and supplies 14,752 14,538
Work-in-process 18,586 17,133
Finished goods 35,041 34,689
------- -------
Total inventories 68,379 66,360
Current deferred income taxes 6,570 7,354
Other current assets 9,386 5,255
------- -------
Total current assets 244,357 211,038
Property, plant and equipment, net 223,699 221,012
Deferred income taxes 10,467 13,174
Other assets 5,617 5,611
------- -------
$ 484,140 $ 450,835
======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 5
<TABLE>
MUELLER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
<CAPTION>
June 29, 1996 December 30, 1995
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 16,177 $ 16,249
Accounts payable 24,479 16,931
Accrued wages and other employee costs 16,268 14,499
Other current liabilities 25,192 20,205
------- -------
Total current liabilities 82,116 67,884
Long-term debt 52,900 59,653
Pension and postretirement liabilities 14,742 15,976
Environmental reserves 8,629 9,585
Deferred income taxes 2,886 2,734
Other noncurrent liabilities 9,238 9,128
------- -------
Total liabilities 170,511 164,960
------- -------
Minority interest in subsidiaries 325 -
Stockholders' equity:
Preferred stock-shares authorized
4,985,000; none outstanding - -
Series A junior participating preferred
stock-$1.00 par value; shares
authorized 15,000; none outstanding - -
Common stock - $.01 par value; shares
authorized 50,000,000; issued
20,000,000; outstanding 17,385,898
in 1996 and 17,349,498 in 1995 200 200
Additional paid-in capital, common 253,750 253,969
Retained earnings
(Since January 1, 1991) 93,999 66,810
Cumulative translation adjustment (2,534) (2,545)
Treasury common stock, at cost (32,111) (32,559)
------- -------
Total stockholders' equity 313,304 285,875
Commitments and contingencies (Note 2) - -
------- -------
$ 484,140 $ 450,835
======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 6
<TABLE>
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
For the Six-Months Ended
June 29, 1996 July 1, 1995
<S> <C> <C>
Operating activities
Net income $ 27,189 $ 20,713
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 9,021 7,409
Minority interest in subsidaries 325 -
Deferred income taxes 3,643 882
Gain on disposal of properties (1,366) (584)
Changes in assets and liabilities:
Receivables (23,506) (32,383)
Inventories (2,019) 1,024
Other assets (4,812) (2,320)
Current liabilities 14,304 12,676
Other liabilities (2,080) (699)
Other, net 9 138
------- -------
Net cash provided by operating activities 20,708 6,856
------- -------
Investing activities
Capital expenditures (11,031) (23,682)
Proceeds from sales of properties 1,366 834
Escrowed IRB financing - 10,484
------- -------
Net cash used by investing activities (9,665) (12,364)
------- -------
Financing activities
Repayments of long-term debt (6,825) (7,506)
Proceeds from sale of treasury stock 229 98
Acquisition of treasury stock - (2,055)
------- -------
Net cash used by financing activities (6,596) (9,463)
------- -------
Increase (decrease) in cash and cash equivalents 4,447 (14,971)
Cash and cash equivalents at the
beginning of the period 48,357 34,492
------- -------
Cash and cash equivalents at the
end of the period $ 52,804 $ 19,521
======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 7
MUELLER INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
General
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Results of operations for the
interim periods presented are not necessarily indicative of results which may
be expected for any other interim period or for the year as a whole. This
quarterly report on Form 10-Q should be read in conjunction with the Company's
Annual Report on Form 10-K, including the annual financial statements
incorporated therein by reference.
The accompanying unaudited interim financial statements include all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented.
Note 1 - Earnings Per Common Share
Primary earnings per common share are based upon the weighted average number
of common and common equivalent shares outstanding during the period. Fully
diluted earnings per share are based upon the weighted average number of
common shares outstanding plus the dilutive effects of all outstanding stock
options.
In 1995, the Company declared and effected a two-for-one stock split in
the form of a 100 percent stock dividend. All presentations of share data
herein, including earnings per share, have been restated to reflect the split
for all periods presented.
Note 2 - Commitments and Contingencies
The Company is subject to normal environmental standards imposed by
federal, state and local environmental laws and regulations. Based upon
information currently available, management believes that the outcome of
pending environmental matters will not materially affect the overall financial
position and results of operations of the Company.
In addition, the Company is involved in certain litigation as either
plaintiff or defendant as a result of claims that arise in the ordinary course
of business which management believes will not have a material effect on the
Company's financial condition.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General Overview
The Company's principal business is the manufacture and sale of copper
tube, brass rod, fittings and other products made of copper, brass, bronze,
plastic and aluminum. These core manufacturing businesses have been in
operation for over 75 years. New housing starts and commercial construction
are important determinants of the Company's sales to the air-conditioning,
refrigeration and plumbing markets because the principal end use of a
significant portion of the Company's products is in the construction of single
and multi-family housing units and commercial buildings.
<PAGE> 8
Profitability of certain of the Company's product lines is dependent upon
the "spreads" between the cost of material and the selling prices of its
completed products. The open market price for copper cathode, for example,
directly influences the selling price of copper tubing, a principal product
manufactured by the Company. The Company attempts to minimize the effects of
changes in copper prices by passing base metal costs through to its customers.
The Company uses the LIFO method of accounting for the copper component
of certain of its copper tube and fittings inventories. Management believes
the LIFO method results in a better matching of current costs with current
revenues. The market price of copper does, however, indirectly affect the
carrying value (FIFO basis) of the Company's brass and other inventories. The
Company's copper and brass inventories customarily total between 30 to 40
million pounds. "Spreads" fluctuate based upon competitive market conditions.
The Company also owns various natural resource properties in the Western
United States and Canada. It operates a short line railroad in Utah and a
placer gold mining operation in Alaska. Additionally, certain other natural
resource properties produce rental or royalty income.
Results of Operations
Net income was $13.9 million, or 71 cents per common share, for the
second quarter of 1996, which compares with net income of $10.7 million, or 56
cents per common share, for the same period of 1995. Year-to-date, net income
was $27.2 million, or $1.40 per common share, which compares to net income of
$20.7 million or $1.09 per common share, for 1995.
During the second quarter of 1996, the Company's net sales were $189.6
million, which compares to net sales of $181.4 million, or a 4.5 percent
increase over the same period of 1995. Net sales were $370.1 million in the
first-half of 1996 versus $353.2 million in 1995. The increase in first-half
net sales was primarily attributable to a 6.6 percent increase in pounds of
product shipped. The Company's manufacturing businesses shipped 114.3 million
pounds of product in the second quarter of 1996 which compares to 106.3
million pounds in the same quarter of 1995. Second quarter and first-half
gross profit increased primarily due to: (i) price improvements in certain
product lines; (ii) yield and productivity improvements of manufacturing
operations; and (iii) higher sales volumes. Selling, general and
administrative expenses increased due to higher sales activity and expenses
associated with relocating the corporate offices.
Interest expense for the second quarter and first-half of 1996 increased
approximately $0.3 million and $0.2 million, respectively. In 1995, interest
expense was lower due to capitalized interest related to capital improvement
programs at the copper tube mill, the brass rod mill, and the high-volume
copper fittings factory. The effective tax rate of 30.9 percent in the second
quarter and first-half of 1996 reflects the benefits of lower federal
provisions relating to the recognition of net operating loss carry forwards
and lower state provisions associated with incentive IRB financings.
Liquidity and Capital Resources
Cash provided by operating activities in the first-half of 1996 totaled
$20.7 million which is primarily attributable to net income and depreciation
and amortization, offset by changes in other assets and liabilities.
During the first-half of 1996, the Company's capital expenditures totaled
$11.0 million which was provided for primarily by cash from operations.
<PAGE> 9
The Company has a $50.0 million unsecured line-of-credit agreement (the
Credit Facility) which expires on June 30, 1997, but may be extended for
successive one year periods by agreement of the parties. At the Company's
option, borrowings bear interest at prime less 1/2 of one percent or at other
options. There are no outstanding borrowings under the Credit Facility. At
June 29, 1996, the Company's total debt was $69.1 million or 18.1 percent of
its capitalization.
The Company's financing obligations contain various covenants which
require, among other things, the maintenance of minimum levels of working
capital, tangible net worth, and debt service coverage ratios. The Company is
in compliance with all debt covenants.
Management believes that cash provided by operations and currently
available cash of $52.8 million will be adequate to meet the Company's normal
future capital expenditure and operational needs. The Company's current ratio
remains strong at 3.0 to 1.
The Company's modernization of its low-volume copper fittings plant in
Covington, Tennessee will require approximately $7.1 million. The Company,
through its wholly-owned subsidiary, Utah Railway Company, also committed
approximately $2.7 million for the construction of trackage to serve a new coal
loadout facility. This commitment, which is contingent upon completion of the
merger between the Southern Pacific and Union Pacific railroads (see Item 5,
Other Matters), secures exclusive access to a new customer for Utah Railway
Company. These commitments will be funded with cash generated by operations.
Update on Major Capital Improvement Programs
Mueller has substantially completed the upgrade of its brass rod mill
manufacturing processes with an expansion that includes the installation of a
new, state-of-the-art indirect extrusion press, new billet heating furnaces,
and new material handling systems. Production on the new equipment commenced
during the first quarter of 1996, and production transition should be
completed during the summer.
Mueller's capital improvement project at its Fulton copper tube mill to
upgrade technology and install state-of-the-art copper tube drawing and
handling equipment became operational in the fourth quarter of 1995. The
Company expects continued refinements which should further improve operational
performance in the mill during 1996.
The Company's new, high-volume copper fittings plant at Fulton,
Mississippi also became operational in the second and third quarters of 1995
and most production lines in this new plant are running today. Yield and
productivity continue to improve.
Another important ongoing program is the modernization of the Company's
low-volume copper fittings plant in Covington, Tennessee. Modernization of
this facility, which produces a broad range of low-volume copper fittings, is
estimated to require approximately $7.1 million in capital improvements and
will be completed in 1997.
<PAGE> 10
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 8, 1996, the Company held its Annual Meeting of Stockholders at
which three proposals were voted upon: (i) election of directors;
(ii) increase the number of authorized shares of common stock from 20,000,000
to 50,000,000; and (iii) the appointment of auditors.
The following persons were duly elected to serve, subject to the
Company's Bylaws, as Directors of the Company until the next Annual Meeting,
or until election and qualification of their successors:
Votes in Favor Votes Withheld
Robert B. Hodes 13,363,069 783,065
Harvey L. Karp 13,358,455 787,679
Allan Mactier 13,597,843 548,291
William D. O'Hagan 13,365,167 780,967
Robert J. Pasquarelli 13,598,623 547,511
The proposal to increase the number of authorized shares of common stock
to 50,000,000 was approved by 10,496,897 votes in favor, 3,595,739 votes
against, with 53,498 votes abstaining.
The proposal to approve the appointment of Ernst & Young LLP as the
Company's auditors was ratified by 14,122,987 votes in favor, 8,966 votes
against and 14,181 votes abstaining.
There were no broker non-votes pertaining to these proposals.
Item 5. Other Information
The following discussion updates the disclosure in Item 1, Business, in
the Company's Annual Report on Form 10-K, for the year ended
December 30, 1995.
Environmental Matters
The following matters relate to the Company's wholly-owned subsidiary,
Mining Remedial Recovery Company (MRRC).
1. Cleveland Mill Site
Bids to process the Cleveland Mill tailings were solicited from potential
processors; however, no bids were received from processors acceptable to
the Environmental Protection Agency (EPA). MRRC, Bayard and a third
party have proposed to the regulatory agencies to move the tailings to
permanent storage at MRRC's Hanover site in Grant County, New Mexico, and
be included as part of MRRC's ongoing plan to regrade and cap tailings at
the Hanover site.
2. Hanover and Bullfrog Sites
MRRC has now delayed completion of its regrading and capping project at
its Hanover site, pending a decision on storage of the tailings from the
nearby Cleveland Mill site.
<PAGE> 11
3. Mammoth Mine Site
In April, 1996, MRRC settled its lawsuit with Alta Gold. MRRC paid Alta
Gold $380,000 and acquired all of Alta Gold's patented mining claims and
other property located in Shasta County (approximately 4,000 acres).
MRRC intends to remediate the mine sites on this acquired property as
part of its overall efforts at Mammoth.
4. U.S.S. Lead
In May, 1996, U.S.S. Lead Refinery, Inc.'s plan for interim cleanup
measures at its East Chicago, Indiana site was approved and
implementation is pending EPA's response to public comments.
Other Matters
In January, 1996, the Utah Railway entered into an agreement with Union
Pacific Railroad (UP) whereby Utah Railway granted UP rights to allow a third
party railroad to operate over a portion of Utah Railway track. In exchange,
UP granted limited rights to Utah Railway for operations over Southern Pacific
(SP) tracks to Grand Junction, Colorado and access to additional customers.
The agreement is contingent on the regulatory approval of the UP/SP merger,
which in July, 1996, was unanimously approved by the Federal Surface
Transportation Board (the STB). The STB's final order of regulatory approval
is expected later in 1996.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
19.1 Mueller Industries, Inc.'s Quarterly Report to
Stockholders for the quarter ended June 29, 1996. Such report is
being furnished for the information of the Securities and
Exchange Commission only and is not to be deemed filed as part of
this Quarterly Report on Form 10-Q.
27.1 Financial data schedules.
99.1 Press Release issued by Mueller Industries, Inc. on
July 18, 1996.
(b) During the quarter ended June 29, 1996, the Registrant filed no
Current Reports on Form 8-K.
Items 1, 2, and 3 are not applicable and have been omitted.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on July 22, 1996.
MUELLER INDUSTRIES, INC.
/S/ EARL W. BUNKERS
Earl W. Bunkers, Executive Vice
President and Chief Financial Officer
/S/ KENT A. MCKEE
Kent A. McKee
Vice President Business
Development/Investor Relations
/S/ RICHARD W. CORMAN
Richard W. Corman
Director of Corporate Accounting
TO OUR STOCKHOLDERS, CUSTOMERS AND EMPLOYEES
We are pleased to report that Mueller's earnings rose 30 percent for the
second quarter of 1996 compared with the same quarter of 1995. Gross profit,
net earnings, pounds of product produced and shipped, and earnings per share
all reached record levels. This is our eighth record quarter in a row and the
18th consecutive quarter of strong earnings performance.
Earnings for the second quarter of 1996 were $13.9 million, or 71 cents
per share compared to earnings of $10.7 million or 56 cents per share for the
same quarter of 1995.
Net sales for the second quarter of 1996 totaled $189.6 million, an
increase of 4.5 percent over net sales of $181.4 million for the second
quarter of 1995. Also, we shipped 114.3 million pounds of product in the
second quarter, or 7.5 percent more than in the same period the year before.
Our manufacturing operations showed excellent improvement during the
second quarter. We were particularly pleased with the results of our plastic
products business. We continue to refine the implementation of our major
capital improvement programs which should result in increased productivity,
efficiency, and yield.
The price of copper, our principal raw material, gyrated widely during
the quarter, reaching a high of $1.30 per pound in May and a low of 91 cents
per pound at the end of the quarter. The LIFO method of inventory valuation
insulated our earnings from an inventory write-down related to this decline.
Our practice is to limit our exposure to the fluctuations in the price of
copper by largely tying our copper purchases to pounds of product sold. In
essence, we endeavor to lock in a spread between the selling prices of our
products less the cost of metal.
Mueller's business is currently strong, and we believe it will remain so
provided interest rates do not spike upwards. Although long-term mortgage
rates have recently moved up, they are still quite attractive by historical
standards.
Our Annual Stockholders' meeting was held in Memphis, Tennessee on
May 8, 1996 and our stockholders reelected all Board members, approved an
increase in the number of authorized shares of common stock to 50,000,000 from
20,000,000, and approved the reappointment of our independent auditors.
Sincerely,
/S/HARVEY L. KARP
Harvey L. Karp
Chairman of the Board
/S/WILLIAM D. O'HAGAN
William D. O'Hagan
President and Chief
Executive Officer
July 18, 1996
<PAGE> 2
<TABLE>
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
<CAPTION>
For the Quarter Ended For the Six-Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $189,557 $181,380 $370,072 $353,150
Cost of goods sold 149,536 149,587 293,068 290,147
Depreciation and amortization 4,571 3,763 9,021 7,409
Selling, general, and
administrative expense 14,919 12,409 28,823 25,376
------- ------- ------- -------
Operating income 20,531 15,621 39,160 30,218
Interest expense (1,473) (1,134) (2,713) (2,511)
Other income, net 1,060 1,102 2,940 2,575
------- ------- ------- -------
Income before taxes 20,118 15,589 39,387 30,282
Income tax expense (6,221) (4,926) (12,198) (9,569)
------- ------- ------- -------
Net income $ 13,897 $ 10,663 $ 27,189 $ 20,713
======= ======= ======= =======
Net income per share:
Primary:
Average shares outstanding 19,525 19,099 19,457 19,012
======= ======= ======= =======
Net income $ 0.71 $ 0.56 $ 1.40 $ 1.09
======= ======= ======= =======
Fully diluted:
Average shares outstanding 19,550 19,201 19,550 19,227
======= ======= ======= =======
Net income $ 0.71 $ 0.56 $ 1.39 $ 1.08
======= ======= ======= =======
</TABLE>
<PAGE> 3
<TABLE>
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data)
<CAPTION>
June 29, 1996 December 30, 1995
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 52,804 $ 48,357
Accounts receivable, net 107,218 83,712
Inventories 68,379 66,360
Other current assets 15,956 12,609
------- -------
Total current assets 244,357 211,038
Property, plant and equipment, net 223,699 221,012
Other assets 16,084 18,785
------- -------
$ 484,140 $ 450,835
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 16,177 $ 16,249
Accounts payable 24,479 16,931
Other current liabilities 41,460 34,704
------- -------
Total current liabilities 82,116 67,884
Long-term debt 52,900 59,653
Other noncurrent liabilities 35,495 37,423
------- -------
Total liabilities 170,511 164,960
Minority interest in subsidiares 325 -
Stockholders' equity 313,304 285,875
------- -------
$ 484,140 $ 450,835
======= =======
Book value per share $ 18.02 $ 16.48
======= =======
</TABLE>
<PAGE> 4
CORPORATE NEWS
Mueller Adds "Line Sets" to Product Line
The Company entered the line sets business during the second quarter by
acquiring the assets of Vanguard Industries, Inc. This product, which is used
for controlling the flow of refrigerant gases, is sold to both OEMs and
wholesalers. Line sets are a logical extension of our product line as they
utilize copper tube and can be distributed by our present sales organization.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FORM 10-Q FOR THE FISCAL PERIOD ENDED JUNE 29, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000089439
<NAME> MUELLER INDUSTRIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 52,804
<SECURITIES> 0
<RECEIVABLES> 110,039
<ALLOWANCES> 2,821
<INVENTORY> 68,379
<CURRENT-ASSETS> 244,357
<PP&E> 286,275
<DEPRECIATION> 62,576
<TOTAL-ASSETS> 484,140
<CURRENT-LIABILITIES> 82,116
<BONDS> 52,900
<COMMON> 200
0
0
<OTHER-SE> 313,104
<TOTAL-LIABILITY-AND-EQUITY> 484,140
<SALES> 370,072
<TOTAL-REVENUES> 370,072
<CGS> 293,068
<TOTAL-COSTS> 293,068
<OTHER-EXPENSES> 37,844
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,713
<INCOME-PRETAX> 39,387
<INCOME-TAX> 12,198
<INCOME-CONTINUING> 27,189
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,189
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.39
FOR IMMEDIATE RELEASE Contact: Kent A. McKee
July 18, 1996 (901) 753-3208
MUELLER INDUSTRIES, INC. ANNOUNCES
A 30 PERCENT INCREASE IN SECOND QUARTER EARNINGS
Memphis, TN - Mueller Industries, Inc. (NYSE: MLI) today reported net
income for the quarter ended June 29, 1996 of $13.9 million or 71 cents per
share, on 19,525,000 weighted average shares outstanding. This compared with
net income for the second quarter of 1995 of $10.7 million, or 56 cents per
share on 19,099,000 weighted average shares outstanding. Net sales for the
second quarter of 1996 were $189.6 million compared with net sales of $181.4
million for the same quarter of 1995.
For the first six months of 1996, net income was $27.2 million, or $1.40
per share, on net sales of $370.1 million. This compared with net income of
$20.7 million, or $1.09 per share, on net sales of $353.2 million for the
same period of 1995.
Harvey L. Karp, Chairman, stated, "Our manufacturing operations showed
excellent improvement during the second quarter. We were particularly
pleased with the results of our plastic products business. We continue to
refine the implementation of our major capital improvement programs which
should result in increased productivity, efficiency, and yield. Mueller's
business is currently strong, and we believe it will remain so provided
interest rates do not spike upwards. Although long-term mortgage rates have
recently moved up, they are still quite attractive by historical standards."
Mueller Industries, Inc. is a leading and diversified fabricator whose
products include copper tube and fittings; brass and copper alloy rods, bars
and shapes; aluminum and brass forgings; aluminum and copper impact
extrusions; plastic fittings and valves; and refrigeration valves, driers and
flare fittings. The Company also owns a short line railroad in Utah, a placer
gold mining operation in Alaska, and other natural resource properties.
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<TABLE>
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
<CAPTION>
For the Quarter Ended For the Six-Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $189,557 $181,380 $370,072 $353,150
Cost of goods sold 149,536 149,587 293,068 290,147
Depreciation and amortization 4,571 3,763 9,021 7,409
Selling, general, and
administrative expense 14,919 12,409 28,823 25,376
------- ------- ------- -------
Operating income 20,531 15,621 39,160 30,218
Interest expense (1,473) (1,134) (2,713) (2,511)
Other income, net 1,060 1,102 2,940 2,575
------- ------- ------- -------
Income before taxes 20,118 15,589 39,387 30,282
Income tax expense (6,221) (4,926) (12,198) (9,569)
------- ------- ------- -------
Net income $ 13,897 $ 10,663 $ 27,189 $ 20,713
======= ======= ======= =======
Net income per share:
Primary:
Average shares outstanding 19,525 19,099 19,457 19,012
======= ======= ======= =======
Net income $ 0.71 $ 0.56 $ 1.40 $ 1.09
======= ======= ======= =======
Fully diluted:
Average shares outstanding 19,550 19,201 19,550 19,227
======= ======= ======= =======
Net income $ 0.71 $ 0.56 $ 1.39 $ 1.08
======= ======= ======= =======
</TABLE>
<PAGE> 3
<TABLE>
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data)
<CAPTION>
June 29, 1996 December 30, 1995
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 52,804 $ 48,357
Accounts receivable, net 107,218 83,712
Inventories 68,379 66,360
Other current assets 15,956 12,609
------- -------
Total current assets 244,357 211,038
Property, plant and equipment, net 223,699 221,012
Other assets 16,084 18,785
------- -------
$ 484,140 $ 450,835
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 16,177 $ 16,249
Accounts payable 24,479 16,931
Other current liabilities 41,460 34,704
------- -------
Total current liabilities 82,116 67,884
Long-term debt 52,900 59,653
Other noncurrent liabilities 35,495 37,423
------- -------
Total liabilities 170,511 164,960
Minority interest in subsidiares 325 -
Stockholders' equity 313,304 285,875
------- -------
$ 484,140 $ 450,835
======= =======
Book value per share $ 18.02 $ 16.48
======= =======
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