Mueller Industries, Inc. Reports Fourth Quarter And Fiscal 2012 Results

News provided by

Mueller Industries, Inc.

05 Feb, 2013, 12:00 GMT

MEMPHIS, Tennessee, Feb. 5, 2013 /PRNewswire/ -- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the fourth quarter ending December 29, 2012 was $16.4 million, or 58 cents per diluted share, compared with net income of $12.9 million, or 34 cents per diluted share in the fourth quarter of 2011.

This 71 percent increase in per share earnings for the fourth quarter was principally due to the decrease in our outstanding shares. In September of 2012, Mueller repurchased 10.4 million of its outstanding common shares at $41 per share. There remain 28.1 million shares currently outstanding. Net sales for the fourth quarter of 2012 totaled $504.0 million compared with $491.4 million in the fourth quarter of the prior year.

Net income for the fiscal year totaled $82.4 million, or $2.31 per diluted share, on net sales of $2.19 billion. This compares to $86.3 million, or $2.26 per diluted share, on net sales of $2.42 billion in 2011. Included in net income was a favorable litigation settlement gain in the first quarter of 2011 of $10.5 million, or 18 cents per diluted share. The decrease in net sales was predominantly attributable to lower copper costs that impact the selling prices of our products. Copper prices decreased to an average of $3.61 per pound in 2012 compared with $4.01 per pound in 2011.

Financial and Operating Highlights

  • For the fourth quarter of 2012, the Plumbing & Refrigeration segment posted operating income of $18.6 million on net sales of $293.3 million, which compares with operating income of $16.4 million on net sales of $277.0 million in the fourth quarter of 2011. 
  • The OEM segment reported operating income of $12.9 million on net sales of $213.6 million for the fourth quarter of 2012.  This compares with operating income of $12.0 million on net sales of $219.8 million in the fourth quarter of 2011. 
  • For 2012, net cash provided by operating activities was $108.3 million, ending the year with $198.9 million of cash on hand, equal to $7.08 per share.   
  • Capital expenditures during 2012 totaled $56.8 million.  The Company has additional improvement projects underway in its core manufacturing operations, which will reduce costs and increase capacity.

Business Outlook for 2013

Regarding the outlook for 2013, Greg Christopher, CEO said, "Mueller's business is significantly dependent on the housing and commercial construction industry. After more than five years of decline and stagnation, the industry finally appears to be gaining positive momentum.

"We note that Mueller was able to earn more than $100 million in operating income per year (except for 2009) during the difficult years following the housing bust and financial meltdown of 2007. We look forward to the anticipated recovery years with optimism."

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.

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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 "pro forma", "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 Year Ended


December 29,


December 31,


December 29,


December 31,


2012


2011


2012


2011


(Unaudited)


(Unaudited)









Net sales

$    504,006


$    491,384


$   2,189,938


$   2,417,797









Cost of goods sold

438,719


427,942


1,904,463


2,115,677

Depreciation and amortization

8,177


9,284


31,495


36,865

Selling, general, and administrative expense

32,247


33,009


129,456


135,953

Insurance settlement

-


-


(1,500)


-

Litigation settlements

(4,050)


-


(4,050)


(10,500)

Severance

3,369


-


3,369


-









Operating income

25,544


21,149


126,705


139,802









Interest expense

(1,179)


(2,549)


(6,890)


(11,553)

Other (expense) income, net

(424)


487


539


1,912









Income before income taxes

23,941


19,087


120,354


130,161

Income tax expense

(7,195)


(6,015)


(36,681)


(43,075)









Consolidated net income

16,746


13,072


83,673


87,086









Less net income attributable to noncontrolling interest

(378)


(144)


(1,278)


(765)









Net income attributable to Mueller Industries, Inc.

$     16,368


$     12,928


$     82,395


$     86,321

























Weighted average shares








     for basic earnings per share

27,782


38,001


35,332


37,835

Effect of dilutive stock-based awards

324


341


414


361









Adjusted weighted average shares








     for diluted earnings per share

28,106


38,342


35,746


38,196

















Basic earnings per share

$       0.59


$       0.34


$       2.33


$       2.28

















Diluted earnings per share

$       0.58


$       0.34


$       2.31


$       2.26

















Dividends per share

$      0.125


$      0.100


$      0.425


$      0.400

















Summary Segment Data:








Net sales:








Plumbing & Refrigeration segment

$    293,275


$    277,001


$   1,238,230


$   1,330,435

OEM segment

213,610


219,813


974,606


1,119,795

Elimination of intersegment sales

(2,879)


(5,430)


(22,898)


(32,433)









Net sales

$    504,006


$    491,384


$   2,189,938


$   2,417,797









Operating income:








Plumbing & Refrigeration segment

$     18,558


$     16,404


$     87,014


$     84,761

OEM segment

12,884


12,036


67,087


72,670

Unallocated expenses

(5,898)


(7,291)


(27,396)


(17,629)









Operating income

$     25,544


$     21,149


$    126,705


$    139,802





















MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)














December 29,


December 31,


2012


2011


(Unaudited)

ASSETS




Cash and cash equivalents

$    198,934


$    514,162

Accounts receivable, net

271,093


250,027

Inventories

229,434


219,193

Other current assets

47,733


43,317

    Total current assets

747,194


1,026,699





Property, plant, and equipment, net

233,263


203,744

Other assets

123,698


117,161






$  1,104,155


$  1,347,604













LIABILITIES AND STOCKHOLDERS' EQUITY




Current portion of long-term debt

$     27,570


$     41,265

Accounts payable

87,574


65,545

Other current liabilities

143,552


106,434

    Total current liabilities

258,696


213,244





Long-term debt

207,300


156,476

Pension and postretirement liabilities

55,019


54,244

Environmental reserves

22,597


22,892

Deferred income taxes

20,910


14,856

Other noncurrent liabilities

1,667


1,130





    Total liabilities

566,189


462,842





Total Mueller Industries, Inc. stockholders' equity

506,908


855,688

Noncontrolling interest

31,058


29,074





    Total equity

537,966


884,762






$  1,104,155


$  1,347,604













MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)












For the Year Ended





December 29,


December 31,





2012


2011





(Unaudited)

Operating activities:




Consolidated net income

$    83,673


$    87,086

Reconciliation of consolidated net income





to net cash provided by operating activities:






Depreciation and amortization

31,932


37,262



Stock-based compensation expense

6,136


3,482



Insurance settlement

(1,500)


-



Insurance proceeds - noncapital related

14,250


10,000



Loss (gain) on disposal of properties

1,411


(202)



Deferred income taxes

(1,284)


(4,190)



Income tax benefit from exercise of stock options

(2,528)


(853)



Changes in assets and liabilities, net of
businesses acquired:







Receivables

(22,853)


28,487




Inventories

(4,834)


(15,678)




Other assets

(14,985)


460




Current liabilities

8,368


7,966




Other liabilities

9,345


(1,593)




Other, net

1,166


1,522








Net cash provided by operating activities

108,297


153,749








Investing activities:




Capital expenditures

(56,825)


(18,751)

Businesses acquired

(11,561)


(6,882)

Insurance proceeds for property and equipment

42,250


-

Net withdrawals from (deposits in) restricted cash balances

9,243


(3,055)

Proceeds from sales of properties

517


1,984








Net cash used in investing activities

(16,376)


(26,704)








Financing activities:




Dividends paid to stockholders of Mueller Industries, Inc.

(14,891)


(15,146)

(Repayment) issuance of debt by joint venture, net

(14,429)


6,162

Repayment of long-term debt

(149,176)


(750)

Issuance of long-term debt

200,000


-

Net cash (used) received to settle stock-based awards

(4,181)


3,880

Income tax benefit from the exercise of stock options

2,528


853

Repurchase of common stock

(427,448)


-

Debt issuance costs

(1,051)


(1,943)








Net cash used in financing activities

(408,648)


(6,944)








Effect of exchange rate changes on cash

1,499


(78)








(Decrease) increase in cash and cash equivalents

(315,228)


120,023








Cash and cash equivalents at the beginning of the period

514,162


394,139








Cash and cash equivalents at the end of the period

$   198,934


$   514,162