Mueller Industries, Inc. Reports Fourth Quarter Results and Fiscal 2013 Earnings

GlobeNewswire Europe

MEMPHIS, Tenn., February 5, 2014-- Mueller Industries, Inc. ( MLI ) announced today that net income for the fiscal year ended December 28, 2013 was $172.6 million, or $6.11  per diluted share, on net sales of $2.16 billion.  This compares to fiscal 2012 net income of $82.4 million, or $2.31 per diluted share, on net sales of $2.19 billion.  

Net income for the fiscal years of 2013 and 2012 include several unusual items.  Excluding these unusual items, the Company`s net income for fiscal 2013 was $86.4 million, or $3.06 per diluted share, compared with $75.9 million, or $2.12 per diluted share, for fiscal 2012.  Consequently, the Company`s earnings attributable to normal operations in 2013 increased by 13.8 percent, and earnings per diluted share attributable to normal operations increased 44.3 percent, which was also affected by the repurchase of 10.4 million outstanding shares in September 2012.  A reconciliation of reported net income and earnings per diluted share to net income and earnings per diluted share excluding unusual items is included with the financial tables attached to this earnings release.

For the fourth quarter of 2013, the Company recorded net income of $15.4 million, or 54 cents per diluted share, on net sales of $487.7 million, compared with net income of $16.4 million, or 58 cents per diluted share, on net sales of $504.0 million in the fourth quarter of 2012.  

Unit volumes for the quarter and for the year increased.  The decline in net sales for both periods was caused by decreases in copper prices.  The average price of copper was 27 cents per pound lower for the year and 32 cents per pound lower for the fourth quarter.

For the fourth quarter of 2013, cash generated from operations was $58.5 million, ending the year with $311.8 million of cash on hand and a current ratio of 3.8 to 1.  Year ending net book value per share was $24.85, of which $11.02 per share was cash.

During the fourth quarter of 2013, the Company completed the acquisition of Howell Metal Company and entered into a definitive agreement to acquire KME`s Yorkshire Copper Tube business, which is subject to regulatory approval.  Both Howell and Yorkshire are well established manufacturers of copper tube with strong brands.  These acquisitions support the Company`s strategy to grow its core businesses.

Regarding the outlook, Greg Christopher, Mueller`s CEO said, "The recovery in the housing market continues to advance but at an uneven pace.  Higher mortgage rates in mid-2013 caused turbulence in the market, but for the year as a whole, approximately 923,000 homes and apartments were started, 18 percent more than in 2012.  We still have a way to go to reach the housing construction levels of 2007 and before.

"Non-residential building activity in 2013 showed little change from 2012.  However, activity in this sector is starting to improve which may result in increased revenues."  

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 that includes office buildings, factories, hotels, hospitals, etc.

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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," "pro forma," 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

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

For the Quarter Ended For the Year Ended
(In thousands, except per share data) December 28, 2013 December 29, 2012 December 28, 2013 December 29, 2012
Net sales $ 487,715 $ 504,006 $ 2,158,541 $ 2,189,938
Cost of goods sold 421,812 438,719 1,862,089 1,904,463
Depreciation and amortization 8,030 8,177 32,394 31,495
Selling, general, and administrative expense 35,836 32,247 134,914 129,456
Insurance settlements - - (106,332 ) (1,500 )
Gain on sale of plastic fittings manufacturing assets - - (39,765 ) -
Impairment charges - - 4,304 -
Litigation settlements - (4,050 ) - (4,050 )
Severance - 3,369 - 3,369
Operating income 22,037 25,544 270,937 126,705
Interest expense (1,050 ) (1,179 ) (3,990 ) (6,890 )
Other income (expense), net 127 (424 ) 4,451 539
Income before income taxes 21,114 23,941 271,398 120,354
Income tax expense (6,094 ) (7,195 ) (98,109 ) (36,681 )
Consolidated net income 15,020 16,746 173,289 83,673
Net loss (income) attributable to noncontrolling interest 364 (378 ) (689 ) (1,278 )
Net income attributable to Mueller Industries, Inc. $ 15,384 $ 16,368 $ 172,600 $ 82,395
Weighted average shares for basic earnings per share 27,927 27,782 27,871 35,332
Effect of dilutive stock-based awards 380 324 371 414
Adjusted weighted average shares for diluted earnings per share 28,307 28,106 28,242 35,746
Basic earnings per share $ 0.55 $ 0.59 $ 6.19 $ 2.33
Diluted earnings per share $ 0.54 $ 0.58 $ 6.11 $ 2.31
Dividends per share $ 0.125 $ 0.125 $ 0.50 $ 0.425
Summary Segment Data:
Net sales:
Plumbing & Refrigeration Segment $ 283,197 $ 293,275 $ 1,225,306 $ 1,238,230
OEM Segment 206,557 213,610 947,784 974,606
Elimination of intersegment sales (2,039 ) (2,879 ) (14,549 ) (22,898 )
Net sales $ 487,715 $ 504,006 $ 2,158,541 $ 2,189,938
Operating income:
Plumbing & Refrigeration Segment $ 12,438 $ 18,558 $ 219,146 $ 87,014
OEM Segment 15,432 12,884 76,631 67,087
Unallocated expenses (5,833 ) (5,898 ) (24,840 ) (27,396 )
Operating income $ 22,037 $ 25,544 $ 270,937 $ 126,705

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands) December 28, 2013 December 29, 2012
ASSETS
Cash and cash equivalents $ 311,800 $ 198,934
Accounts receivable, net 271,847 271,093
Inventories 251,716 229,434
Other current assets 52,809 47,733
Total current assets 888,172 747,194
Property, plant, and equipment, net 244,457 233,263
Other assets 152,097 123,698
$ 1,284,726 $ 1,104,155
LIABILITIES AND STOCKHOLDERS` EQUITY
Current portion of debt $ 29,083 $ 27,570
Accounts payable 80,897 87,574
Other current liabilities 122,731 143,552
Total current liabilities 232,711 258,696
Long-term debt 206,250 207,300
Pension and postretirement liabilities 27,426 55,019
Environmental reserves 22,144 22,597
Deferred income taxes 59,478 20,910
Other noncurrent liabilities 850 1,667
Total liabilities 548,859 566,189
Total Mueller Industries, Inc. stockholders` equity 703,405 506,908
Noncontrolling interest 32,462 31,058
Total equity 735,867 537,966
$ 1,284,726 $ 1,104,155

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

...
For the Year Ended
(In thousands) December 28, 2013 December 29, 2012
Cash flows from operating activities
Consolidated net income $ 173,289 $ 83,673
Reconciliation of consolidated net income to net cash
provided by operating activities:
Depreciation and amortization 32,693 31,933
Stock-based compensation expense 5,704 6,136
Insurance settlements (106,332 ) (1,500 )
Insurance proceeds - noncapital related 32,395 14,250
Gain on sale of plastic fittings manufacturing assets (39,765 ) -
(Gain) loss on disposal of properties (2,535 ) 1,411
Impairment charges 4,304 -
Deferred income taxes 19,213 (1,284 )
Income tax benefit from exercise of stock options (719 ) (2,528 )
Changes in assets and liabilities, net of businesses acquired:
Receivables 19,110 (22,853 )
Inventories 5,963 (4,834 )
Other assets 562 (14,985 )
Current liabilities (14,139 ) 8,368
Other liabilities (1,935 ) 9,345
Other, net 705 1,165
Net cash provided by operating activities 128,513 108,297
Cash flows from investing activities
Capital expenditures (41,349 ) (56,825 )
Acquisition of businesses (55,276 ) (11,561 )
Insurance proceeds for property and equipment 29,910 42,250
Net (deposits into) withdrawals from restricted cash balances (1,417 ) 9,243
Proceeds from the sales of assets 65,147 517
Net cash used in investing activities (2,985 ) (16,376 )
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc. (13,941 ) (14,891 )
Debt issuance cost (50 ) (1,053 )
Issuance of long-term debt - 200,000
Issuance (repayment) of debt by joint venture, net 857 (14,429 )
Net cash used to settle stock-based awards (228 ) (4,181 )
Repurchase of common stock - (427,446 )
Repayments of long-term debt (1,000 ) (149,176 )
Income tax benefit from exercise of stock options 719 2,528
Net cash used in financing activities (13,643 ) (408,648 )
Effect of exchange rate changes on cash 981 1,499
Increase (decrease) in cash and cash equivalents 112,866 (315,228 )
Cash and cash equivalents at the beginning of the period 198,934 514,162
Cash and cash equivalents at the end of the period $ 311,800 $ 198,934

MUELLER INDUSTRIES, INC.
Reconciliation of Net Income as Reported to Pro Forma Without Unusual Items
(Unaudited)

Earnings attributable to normal operations without the impact of the following unusual items is a measurement not derived in accordance with generally accepted accounting principles (GAAP).  Excluding the unusual items is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business.  Reconciliation of earnings attributable to normal operations without unusual items to net income as reported is as follows:

For the Year Ended December 28, 2013
Impact of
As
Reported
Insurance
Settlement
Gain on
Plastic Sale
Other
(In thousands, except per share data) Impairments Pro forma
Operating income $ 270,937 $ (106,332 ) $ (39,765 ) $ 4,304 $ 2,290 $ 131,434
Interest expense (3,990 ) - - - - (3,990 )
Other income, net 4,451 - - - (3,000 ) 1,451
Income before income taxes 271,398 (106,332 ) (39,765 ) 4,304 (710 ) 128,895
Income tax expense (98,109 ) 40,723 16,845 (1,719 ) 481 (41,779 )
Consolidated net income 173,289 (65,609 ) (22,920 ) 2,585 (229 ) 87,116
Net income attributable to non-controlling interest (689 ) - - - - (689 )
Net income attributable to Mueller Industries, Inc. $ 172,600 $ (65,609 ) $ (22,920 ) $ 2,585 $ (229 ) $ 86,427
Diluted earnings per share $ 6.11 $ (2.32 ) $ (0.81 ) $ 0.09 $ (0.01 ) $ 3.06
For the Year Ended December 29, 2012
Impact of
(In thousands, except per share data) As Reported LIFO
Gain
Insurance Settlement Litigation Settlement Severance Pro forma
Operating income $ 126,705 $ (7,979 ) $ (1,500 ) $ (4,050 ) $ 3,369 $ 116,545
Interest expense (6,890 ) - - - - (6,890 )
Other income, net 539 - - - - 539
Income before income taxes 120,354 (7,979 ) (1,500 ) (4,050 ) 3,369 110,194
Income tax expense (36,681 ) 2,872 585 1,478 (1,230 ) (32,976 )
Consolidated net income 83,673 (5,107 ) (915 ) (2,572 ) 2,139 77,218
Net income attributable to non-controlling interest (1,278 ) - - - - (1,278 )
Net income attributable to Mueller Industries, Inc. $ 82,395 $ (5,107 ) $ (915 ) $ (2,572 ) $ 2,139 $ 75,940
Diluted earnings per share $ 2.31 $ (0.14 ) $ (0.03 ) $ (0.07 ) $ 0.06 $ 2.12



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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Mueller Industries Inc. via GlobeNewswire

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