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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 25, 1999 Commission 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.)
8285 TOURNAMENT DRIVE, SUITE 150
MEMPHIS, TENNESSEE 38125
(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 / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.[_X_]
The number of shares of the Registrant's common stock outstanding as of March
16, 2000 was 34,469,796, excluding 5,621,706 treasury shares. The aggregate
market value of the 33,819,432 shares of common stock held by non-affiliates
of the Registrant was $978,469,814 at March 16, 2000 (based on the closing
price on the consolidated transaction reporting system on that date).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference into this
Report: (1) Registrant's Annual Report to Stockholders for the year ended
December 25, 1999 (Part I and II); Registrant's Definitive Proxy Statement for
the 2000 Annual Meeting of Stockholders, scheduled to be mailed on or about
March 17, 2000 (Part III).
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MUELLER INDUSTRIES, INC.
As used in this report, the terms "Company", "Mueller" and "Registrant" mean
Mueller Industries, Inc. and its consolidated subsidiaries taken as a whole,
unless the context indicates otherwise.
TABLE OF CONTENTS
Page
Part I
Item 1. Business 3
Item 2. Properties 9
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of
Security Holders 11
Part II
Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters 11
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
Item 7A. Quantitative and Qualitative Disclosures
About Market Risk 12
Item 8. Financial Statements and Supplementary Data 12
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 12
Part III
Item 10. Directors and Executive Officers of
the Registrant 12
Item 11. Executive Compensation 12
Item 12. Security Ownership of Certain Beneficial
Owners and Management 12
Item 13. Certain Relationships and Related Transactions 13
Part IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 13
Signatures 17
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PART I
ITEM 1. BUSINESS
Introduction
The Company is a leading manufacturer of copper, brass, plastic, and
aluminum products. The range of these products is broad: 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 plants are located throughout the United States, and in Canada,
France, and Great Britain. The Company also owns a short line railroad in
Utah and natural resource properties in the Western U.S.
The Company's businesses are managed and organized into three segments:
(i) Standard Products Division ("SPD"); (ii) Industrial Products Division
("IPD"); and (iii) Other Businesses. SPD manufactures and sells copper
tube, copper and plastic fittings, and valves. Outside of the United
States, SPD manufactures copper tube in Europe and copper fittings in
Canada. SPD sells these products to wholesalers in the HVAC (heating,
ventilation, and air-conditioning), plumbing, and refrigeration markets, and
to distributors to the manufactured housing and recreational vehicle
industries. IPD manufactures and sells brass and copper alloy rod, bar, and
shapes; aluminum and brass forgings; aluminum and copper impact extrusions;
refrigeration valves and fittings; fabricated tubular products; and gas
valves and assemblies. IPD sells its products primarily to original
equipment manufacturers ("OEMs"), many of which are in the HVAC, plumbing,
and refrigeration markets. Other Businesses include Utah Railway Company
and other natural resource properties and interests. SPD and IPD account
for more than 98 percent of consolidated net sales and more than 81 percent
of consolidated net assets. The majority of the Company's manufacturing
facilities operated at high levels during 1999, 1998, and 1997.
Information concerning segments appears under "Note 13 - Industry
Segments" in the Notes to Consolidated Financial Statements in Mueller's
Annual Report to Stockholders for the year ended December 25, 1999. Such
information is incorporated herein by reference.
Standard Products Division
Mueller's Standard Products Division includes a broad line of copper
tube, which ranges in size from 1/8 inch to 8 inch diameter, and is sold in
various straight lengths and coils. Mueller is a market leader in the air-
conditioning and refrigeration tube markets. Additionally, Mueller supplies
a variety of water tube in straight lengths and coils used for plumbing
applications in virtually every type of construction project.
SPD also includes copper and plastic fittings and related components
for the plumbing and heating industry that are used in water distribution
systems, heating systems, air-conditioning, and refrigeration applications,
and drainage, waste, and vent systems. A major portion of Mueller's
products are ultimately used in the domestic residential and commercial
construction markets and, to a lesser extent, in the automotive and heavy on
and off-the-road vehicle markets.
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During the fourth quarter of 1998, the Company acquired Halstead
Industries, Inc. ("Halstead"). Halstead operates a tube mill in Wynne,
Arkansas, and a line sets factory in Clinton, Tennessee. This acquisition
expanded the Company's copper tube and line sets businesses and created
opportunities for improved production and distribution efficiency.
Following the acquisition, Halstead's name was changed to Mueller Copper
Tube Products, Inc. In addition, in August 1998, the Company acquired B&K
Industries, Inc. ("B&K"), an importer and distributor of residential and
commercial plumbing products. The acquisition of B&K facilitated the sale
of Mueller's manufactured products in the large, and growing, retail
marketplace. In 1997, the Company acquired copper tube manufacturing
operations in England and France. These acquisitions established a
significant manufacturing and sales presence in Europe for the Company's
operations.
SPD markets primarily through its own sales and distribution
organization, which maintains sales offices and distribution centers
throughout the United States and in Canada, Great Britain, and France.
Additionally, products are sold and marketed through a network of agents,
which, when combined with the Company's sales organization, provide the
Company broad geographic market representation.
The businesses in which SPD is engaged are highly competitive. The
principal methods of competition for Mueller's products are customer
service, availability, and price. No material portion of Mueller's business
is dependent upon a single customer or a small group of related customers.
The total amount of order backlog for SPD as of December 25, 1999 was not
significant.
The Company competes with various companies depending on the product
line. In the U.S. copper tubing business, the domestic competition includes
Cerro Copper Products Co., Inc., Reading Tube Corporation, and Wolverine
Tube, Inc., as well as many actual and potential foreign competitors. In the
European copper tubing business, Mueller competes with more than ten
European-based manufacturers of copper tubing as well as foreign-based
manufacturers. Additionally, the Company's copper tube businesses compete
with a large number of manufacturers of substitute products made from
plastic, iron, and steel. In the copper fittings market, competitors
include Elkhart Products, a division of Amcast Industrial Corporation, and
NIBCO, Inc., as well as several foreign manufacturers. The plastic fittings
competitors include NIBCO, Inc., Charlotte Pipe & Foundry, and other
companies. No single competitor offers such a wide-ranging product line;
management believes that this is a competitive advantage in some markets.
Industrial Products Division
Mueller's Industrial Products Division includes brass rod, nonferrous
forgings, and impact extrusions that are sold primarily to OEMs in the
plumbing, refrigeration, fluid power, and automotive industries, as well as
to other manufacturers and distributors. The Port Huron, Michigan mill
extrudes brass, bronze, and copper alloy rod in sizes ranging from 3/8
inches to 4 inches in diameter. These alloys are used in applications that
require a high degree of machinability, wear and corrosion resistance, and
electrical conductivity. IPD also manufactures brass and aluminum forgings
which are used in a wide variety of end products, including automotive
components, brass fittings, industrial machinery, valve bodies, gear blanks,
and computer hardware. The Company also serves the automotive, military
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ordnance, aerospace, and general manufacturing industries with cold-formed
aluminum and copper impact extrusions. Typical applications for impacts are
high strength ordnance, high-conductivity electrical components, builders'
hardware, hydraulic systems, automotive parts, and other uses where
toughness must be combined with varying complexities of design and finish.
Other products include valves and custom OEM products for refrigeration and
air-conditioning applications, and shaped and formed tube, produced to tight
tolerances, for baseboard heating, appliances, medical instruments, etc.
The total amount of order backlog for IPD as of December 25, 1999 was not
significant.
In September 1998, the Company acquired Lincoln Brass Works, Inc.
("Lincoln"), which operates manufacturing facilities in Jacksboro, Tennessee
and Waynesboro, Tennessee. Lincoln produces custom control valve
assemblies, custom metal assemblies, gas delivery systems and tubular
products primarily for the gas appliance market. Lincoln is a large
consumer of the Company's brass rod and forgings.
IPD primarily sells direct to OEM customers. Competitors, primarily in
the brass rod market, include Cerro Metal Products Company, Inc., Chase
Industries, Inc., Extruded Metals Inc., and others both domestic and
foreign. Outside of North America, IPD sells products through various
channels.
Other Businesses
Mueller, through its subsidiary Arava Natural Resources Company, Inc.
("Arava"), is engaged in the operation of a short line railroad in Utah. It
also owns interests in other natural resource properties.
Short Line Railroad
Utah Railway Company ("Utah Railway"), a wholly-owned subsidiary of
Arava, operates on approximately 100 miles of railroad track in Utah. Utah
Railway serves four major customers pursuant to long-term contracts which
account for more than 75 percent of coal tonnage hauled. The Utah Railway
transports coal to an interchange point at Provo, Utah. Although annual
tonnage may vary significantly due to fluctuations in the production from
the coal mines on the Utah Railway's lines and the demand for export coal,
in recent years, annual tonnage ranged between four and six million tons.
From Provo, Utah, the coal is transported by connecting railroads to various
customers including electric utilities, cement plants, west coast export
facilities and others at destinations throughout the West.
On September 30, 1999, Utah Railway purchased the stock of the Salt
Lake City Southern Railroad Company, Inc. (SLCS). SLCS operates pursuant to
an easement on approximately 25 miles of track, owned by the Utah Transit
Authority, from downtown Salt Lake City to near Draper, Utah.
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In addition to railway operations discussed above, Union Pacific
Railroad granted limited rights to Utah Railway for operations over Union
Pacific tracks to Grand Junction, Colorado and access to additional coal
customers. Also, Utah Railway conducts switching operations primarily in
the Salt Lake City, Ogden and Provo, Utah, metropolitan areas. Switching
operations consist of accepting freight from other railroad carriers for
delivery to customers and/or accepting loads of freight from such customers
for delivery to long haul railroad carriers to be transported to final
destinations.
In late 1998, there was a fire at one of the coal mines served by Utah
Railway. The mine reopened in late 1999, and its shipments on Utah Railway
have resumed.
Other Properties
In early 1998, Ruby Hill Mining Company ("Ruby Hill") received a final
$1.0 million installment payment from Homestake Mining Company of California
("Homestake") for Ruby Hill's mining property near Eureka, Nevada. Prior to
1999, the Company received and recognized as gains $4.0 million from this
transaction. If Homestake produces a total of 500,000 ounces of gold or
"gold equivalents" of other metals from this property, Ruby Hill is
thereafter entitled to a three percent net smelter return royalty, after
deduction for certain taxes and transportation.
Labor Relations
At December 25, 1999, the Company employed approximately 4,400
employees of which approximately 2,200 were represented by various unions.
The union contracts that cover production and maintenance employees at the
Company's Port Huron facilities and the contract that covers employees at
the Company's Wynne copper tube mill were renewed for five-year periods
during 1999. Union contracts at the Company's European operations are
renewed annually. Other contracts expire on various dates from April 2000
to August 2002.
Raw Material and Energy Availability
The major portion of Mueller's base metal requirements (primarily
copper) is normally obtained through short-term supply contracts with
competitive pricing provisions (for cathode) and the open market (for
scrap). Other raw materials used in the production of brass, including
brass scrap, zinc, tin, and lead, are obtained from zinc and lead producers,
open-market dealers, and customers with brass process scrap. Raw materials
used in the fabrication of aluminum and plastic products are purchased in
the open market from major producers.
Adequate supplies of raw material are available to the Company.
Sufficient energy in the form of natural gas, fuel oils, and electricity is
available to operate the Company's production facilities. While temporary
shortages of raw material and fuels may occur occasionally, they have not
materially hampered the Company's operations.
-6-
Environmental Matters
Compliance with environmental laws and regulations is a matter of high
priority. Mueller's provision for environmental compliance includes charges
of $2.1 million in 1998 and $3.1 million in 1997. There was no provision
for 1999. Except as discussed below, the Company does not anticipate that
it will need to make material expenditures for such compliance activities
during the remainder of the 2000 fiscal year, or for the next two fiscal
years.
In 1998 and 1997, in connection with acquisitions, the Company
established environmental reserves to fund the cost of remediation at sites
currently or formerly owned by various acquired entities. The Company,
through its acquired subsidiaries, is engaged in ongoing remediation and
site characterization studies.
Mining Remedial Recovery Company ("MRRC"), a wholly-owned subsidiary of
Arava, was formed for the purpose of managing the remediation of certain
properties and the appropriate disposition thereof.
1. Mammoth Mine Site
MRRC owns title to certain inactive mines in Shasta County, California.
MRRC has continued a program, begun in the late 1980s, of sealing mine
portals with concrete plugs in mine adits which were discharging water. The
sealing program has achieved a reduction in the metal load in discharges
from these adits; however, additional reductions are being required. In
response to a 1996 Order issued by the California Regional Water Quality
Control Board ("QCB"), MRRC completed a feasibility study in 1997 describing
measures designed to mitigate the effects of acid rock drainage. In
December 1998, the QCB issued a new order extending MRRC's time to comply
with water quality standards until December 1, 2003. MRRC agreed to
continue remedial activities to reduce or prevent discharge of acid mine
drainage and submit a use attainability analysis for review by July 1, 2000.
MRRC estimates it will spend between $1.0 and $2.0 million on planned
remedial activities and the use attainability analysis. Further remediation
may be required depending on how effective MRRC's remedial options are in
reducing acid rock drainage.
2. U.S.S. Lead
In 1991, U.S.S. Lead Refinery, Inc. ("Lead Refinery"), responded to an
information request from EPA under Superfund for information on whether Lead
Refinery arranged for the disposal of hazardous substances in the vicinity
of the Grand Calumet River/Indiana Harbor Ship Canal. By letter dated
February 4, 1997, the Indiana Department of Environmental Management
("IDEM") notified Lead Refinery that a preassessment screening of the Grand
Calumet River and the Indiana Harbor Canal conducted pursuant to Superfund
had identified releases of hazardous substances from Lead Refinery and other
potentially responsible parties ("PRPs") that had adversely impacted natural
resources. Based on the prescreening assessment, IDEM has requested that
Lead Refinery agree to fund the preparation of an assessment plan which
will, in part, quantify the loss of natural resources. By letter dated
March 11, 1997, Lead Refinery responded to the February 4 letter and without
waiving its affirmative defenses, stated its willingness to participate in
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the preparation of an assessment plan. In 1991, Lead Refinery also
responded to an information request under Superfund regarding the Lead
Refinery site in East Chicago, Indiana. In 1992, EPA advised Lead Refinery
of its intent to list the property as a Superfund site; however, as of March
17, 2000, EPA has deferred such listing.
In 1993, Lead Refinery entered into a Consent Order with the EPA
pursuant to Section 3008(h) of the Resource Conservation and Recovery Act
("RCRA"). The Consent Order covers remediation activities at the East
Chicago, Indiana site and provides for Lead Refinery to complete certain on-
site interim remedial activities and studies that extend off-site. In
November 1996, the EPA approved, with modifications, the Interim
Stabilization Measures Workplan and designated a Corrective Action
Management Unit ("CAMU") at the Lead Refinery site. Site activities, based
on the approval, began in December 1996. Costs for remaining cleanup
efforts are estimated to be between $2.0 and $3.0 million. In the process
of remediating the site, Lead Refinery subsequently identified suspected
petroleum contamination on site. As a result, Lead Refinery installed a
slurry wall around the CAMU and initiated characterization of areas
suspected to have petroleum contamination. Lead Refinery has recently
submitted plans to the EPA and IDEM to address this contamination and is
currently awaiting approvals. Additionally, Lead Refinery has submitted
several other plans for approval to investigate to determine if other
contamination exists that is not addressed by the Consent Order. Lead
Refinery, without additional assistance from MRRC, lacks the financial
resources needed to complete the additional remediation and intends to seek
financial assistance from other PRPs to permit Lead Refinery to conduct a
private-party cleanup under RCRA.
Lead Refinery has been informed by the former owner and operator of a
Superfund site located in Pedricktown, New Jersey that it intends to seek
CERCLA response costs for alleged shipments of hazardous substances to the
site. Lead Refinery has executed an agreement regarding that site, which
indefinitely extends the statute of limitations. By letter dated January
26, 1996, Lead Refinery and other PRPs received from EPA a proposed
Administrative Order on Consent to perform the remedial design for operable
Unit 1 of the Pedricktown Superfund Site. Lead Refinery determined not to
execute the Administrative Order on Consent. Several other PRPs, however,
executed the agreement and are conducting the remedial design.
3. Mueller Copper Tube Products, Inc.
Mueller Copper Tube Products, Inc. (MCTP), (formerly known as Halstead)
has commenced a cleanup and remediation of soil and groundwater at its
Wynne, Arkansas plant. MCTP is currently removing trichloroethene (TCE), a
cleaning solvent formerly used by MCTP, from the soil and groundwater. An
Initial Interim Remediation Measures work plan and air discharge permit(s)
addressing the treatment of soils and groundwater were submitted and
approved by the Arkansas Department of Environmental Quality (ADEQ). MCTP
has installed monitoring wells offsite to determine the extent of the TCE
contamination and is collecting data to be reviewed by ADEQ. Following
review of the information, ADEQ will decide whether to require additional
investigation and/or remediation activities. The Company anticipates that
MCTP will spend up to an estimated five million dollars over the next
several years on these activities and established a reserve for this project
in connection with the acquisition of MTCP.
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Other Business Factors
The Registrant's business is not materially dependent on patents,
trademarks, licenses, franchises, or concessions held. In addition,
expenditures for company-sponsored research and development activities were
not material during 1999, 1998, or 1997. No material portion of the
Registrant's business involves governmental contracts.
ITEM 2. PROPERTIES
Information pertaining to the Registrant's major operating facilities
is included below. Except as noted, the Registrant owns all of its
principal properties. The Registrant's plants are in satisfactory condition
and are suitable for the purpose for which they were designed and are now
being used.
Approximate
Location Property Size Description
Fulton, MS 418,000 sq. ft. Copper tube mill. Facility includes
52.37 acres casting, extruding, and finishing
equipment to produce copper tubing,
including tube feed stock for the
Company's copper fittings plants, Line
sets plant, and Precision Tube factory.
Fulton, MS 103,000 sq. ft. Casting facility. Facility includes
11.9 acres casting equipment to produce copper
billets used in the adjoining copper
tube mill.
Wynne, AR 682,000 sq. ft.(1) Copper tube mill. Facility includes
39.2 acres extrusion and finishing equipment to
produce copper tubing, including feed
stock for the Clinton, TN line sets
plant.
Clinton, TN 166,000 sq. ft.(2) Line sets plant. Produces copper tube
8.5 acres line sets using tube feed stock from
the Company's copper tube mills and
other mills.
Fulton, MS 58,500 sq. ft. Packaging and bar coding facility for
15.53 acres retail channel sales.
Fulton, MS 70,000 sq. ft.(3) Copper fittings plant. High-volume
7.68 acres facility that produces copper fittings
using tube feed stock from the
Company's adjacent copper tube mill.
Covington, TN 159,500 sq. ft. Copper fittings plant. Facility
40.88 acres produces copper fittings using tube
feed stock from the Company's copper
tube mills.
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Port Huron, MI 40,000 sq. ft. Formed tube plant. Produces copper
5.11 acres fittings using cold heading equipment.
Strathroy, 54,000 sq. ft. Copper fittings plant. Facility
Ontario 4.67 acres produces copper fittings for export to
Canada European and other metric markets.
Kalamazoo, MI 205,000 sq. ft. Plastic fittings plant. Produces DWV
18 acres fittings using injection molding
equipment.
Cerritos, CA 115,000 sq. ft. Plastic fittings plant. Produces DWV
5.1 acres fittings using injection molding
equipment.
Upper 82,000 sq. ft. Plastic fittings plant. Produces DWV
Sandusky, OH 7.52 acres fittings using injection molding
equipment.
Bilston, 402,500 sq. ft. Copper tube mill. Facility includes
England 14.95 acres casting, extruding, and finishing
United Kingdom equipment to produce copper tubing.
Longueville, 332,500 sq. ft. Copper tube mill. Facility includes
France 16.3 acres extrusion and finishing equipment to
produce copper tubing.
Port Huron, MI 322,500 sq. ft. Brass rod mill. Facility includes
71.5 acres casting, extruding, and finishing
equipment to produce brass rods and
bars, in various shapes and sizes.
Port Huron, MI 127,500 sq. ft. Forgings plant. Produces brass and
aluminum forgings.
Marysville, MI 81,500 sq. ft. Aluminum and copper impacts plant.
6.72 acres Produces made-to-order parts using cold
impact processes.
Hartsville, TN 78,000 sq. ft. Refrigeration products plant.
4.51 acres Produces products used in
refrigeration applications such as
ball valves, line valves, and
compressor valves.
Jacksboro, TN 65,066 sq. ft. Bending and fabricating facility.
11.78 acres Produces gas burners, supply tubes,
and manifolds for the gas appliance
industry.
Waynesboro, TN 57,000 sq. ft.(4) Gas valve plant. Facility produces
5.0 acres brass valves and assemblies for the
gas appliance industry.
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North Wales, PA 174,000 sq. ft. Precision Tube factory. Facility
18.9 acres fabricates copper tubing, copper
alloy tubing, aluminum tubing, and
fabricated tubular products.
Salisbury, MD 12,000 sq. ft.(5) Coaxial cable plant. Facility
manufactures semi-rigid coaxial cable
and high-performance cable assemblies.
In addition, the Company owns and/or leases other properties used as
distribution centers and corporate offices.
(1) Facility is located on land leased from a local municipality, with an
option to purchase at nominal cost.
(2) Facility is leased under an operating lease, with an option to purchase.
(3) Facility is leased under a long-term lease agreement, with an option
to purchase at nominal cost.
(4) Facility is leased from a local municipality for a nominal amount.
(5) Facility is leased under an operating lease.
ITEM 3. LEGAL PROCEEDINGS
Environmental Proceedings
Reference is made to "Environmental Matters" in Item 1 of this Report,
which is incorporated herein by reference, for a description of
environmental proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The information required by Item 5 of this Report is included under the
caption "Capital Stock Information" in the Registrant's Annual Report to
Stockholders for the year ended December 25, 1999, which information is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data are included under the caption "Selected
Financial Data" in the Registrant's Annual Report to Stockholders for the
year ended December 25, 1999, which selected financial data is incorporated
herein by reference.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results
of operations is contained under the caption "Financial Review" in the
Registrant's Annual Report to Stockholders for the year ended December 25,
1999, and is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and qualitative disclosures about market risk are
contained in the caption "Financial Review" in the Registrant's Annual
Report to Stockholders for the year ended December 25, 1999, and is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedules of
this Annual Report on Form 10-K which is included on page 18.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 is contained under the caption
"Ownership of Common Stock by Directors and Executive Officers and
Information about Director Nominees" in the Company's Proxy Statement for
its 2000 Annual Meeting of Stockholders to be filed with the Securities and
Exchange Commission on or about March 17, 2000 and is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is contained under the caption
"Executive Compensation" in the Company's Proxy Statement for its 2000
Annual Meeting of Stockholders to be filed with the Securities and Exchange
Commission on or about March 17, 2000 and is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is contained under the captions
"Principal Stockholders" and "Ownership of Common Stock by Directors and
Executive Officers and Information about Director Nominees" in the Company's
Proxy Statement for its 2000 Annual Meeting of Stockholders to be filed with
the Securities and Exchange Commission on or about March 17, 2000 and is
incorporated herein by reference.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is contained under the caption
"Certain Relationships and Transactions with Management" in the Company's
Proxy Statement for its 2000 Annual Meeting of Stockholders to be filed with
the Securities and Exchange Commission on or about March 17, 2000 and is
incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements: the financial statements, notes, and report of
independent auditors described in Item 8 of this report, which are
incorporated by reference.
2. Financial Statement Schedule: the financial statement schedule
described in Item 8 of this report which is indexed on page 18.
3. Exhibits:
2.1 Amended and Restated Agreement and Plan of Merger among Mueller
Industries, Inc., Mueller Acquisition Corp. and Halstead
Industries, Inc., dated as of October 30, 1998 (Incorporated
herein by reference to Exhibit 2.1 of the Registrant's Report on
Form 10-Q, dated November 6, 1998 for the quarter ended
September 26, 1998).
2.2 Form of Stock Purchase Agreement with William B. Halstead
(Incorporated herein by reference to Exhibit 2.2 of the
Registrant's Report on Form 10-Q, dated November 6, 1998 for the
quarter ended September 26, 1998).
2.3 Form of Stock Purchase Agreement with remaining Halstead
stockholders (Incorporated herein by reference to Exhibit 2.3 of
the Registrant's Report on Form 10-Q, dated November 6, 1998 for
the quarter ended September 26, 1998).
3.1 Certificate of Incorporation of Mueller Industries, Inc. and
all amendments thereto (Incorporated herein by reference to
Exhibit 3.1 of the Registrant's Report on Form 10-K, dated March
23, 1999, for the fiscal year ended December 26, 1998).
3.2 By-laws of Mueller Industries, Inc., as amended and restated,
effective November 10, 1994 (Incorporated herein by reference to
Exhibit 3 (ii) of the Registrant's Current Report on Form 8-K,
dated November 14, 1994).
4.1 Common Stock Specimen (Incorporated herein by reference to
Exhibit 4.1 of the Registrant's Current Report on Form 8-K dated
December 28, 1990).
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4.2 Rights Agreement, dated as of November 10, 1994, between the
Registrant and Continental Stock Transfer and Trust Company, as
Rights Agent, which includes the Form of Certificate of
Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of the Registrant, as Exhibit A,
the Form of Rights Certificate, as Exhibit B, and the Summary of
Rights to Purchase Preferred Stock, as Exhibit C (Incorporated
by reference to Exhibit 99.1 of the Registrant's Current Report
on Form 8-K, dated November 14, 1994).
10.1 Credit Agreement among Mueller Industries, Inc. (as Borrower)
and Michigan National Bank and other banking institutions and
Michigan National Bank (as Agent) dated as of June 1, 1994
(Incorporated herein by reference to Exhibit 4.3 of the
Registrant's Report on Form 10-K, dated March 20, 1997, for the
fiscal year ended December 28, 1996).
10.2 First Amendment to Credit Agreement among Mueller Industries,
Inc. (as Borrower) and Michigan National Bank and other banking
institutions and Michigan National Bank (as Agent) dated as of
December 14, 1994 (Incorporated herein by reference to Exhibit
4.4 of the Registrant's Report on Form 10-K, dated March 20,
1997, for the fiscal year ended December 28, 1996).
10.3 Second Amendment to Credit Agreement among Mueller
Industries, Inc. (as Borrower) and Michigan National Bank and
other banking institutions and Michigan National Bank (as Agent)
dated as of June 1, 1995 (Incorporated herein by reference to
Exhibit 4.5 of the Registrant's Report on Form 10-K, dated March
20, 1997, for the fiscal year ended December 28, 1996).
10.4 Third Amendment to Credit Agreement among Mueller Industries,
Inc. (as Borrower) and Michigan National Bank and other banking
institutions and Michigan National Bank (as Agent) dated as of
December 18, 1996 (Incorporated herein by reference to Exhibit
4.6 of the Registrant's Report on Form 10-K, dated March 20,
1997, for the fiscal year ended December 28, 1996).
10.5 Fourth Amendment to Credit Agreement among Mueller Industries,
Inc. (as Borrower) and Michigan National Bank and other banking
institutions and Michigan National Bank (as Agent) dated
December 31, 1997 (Incorporated herein by reference to Exhibit
4.7 of the Registrant's Report on Form 10-K, dated March 19,
1998, for the fiscal year ended December 27, 1997).
10.6 Fifth Amendment to Credit Agreement among Mueller Industries,
Inc. (as Borrower) and Michigan National Bank and other banking
institutions and Michigan National Bank (as Agent) dated
November 20, 1998 (Incorporated herein by reference to Exhibit
10.6 of the Registrant's Report on Form 10-K, dated March 23,
1999, for the fiscal year ended December 26, 1998).
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10.7 Amended and Restated Credit Agreement among Mueller
Industries, Inc. (as Borrower) and Michigan National Bank and
other banking institutions and Michigan National Bank (as Agent)
dated December 30, 1998 (Incorporated herein by reference to
Exhibit 10.7 of the Registrant's Report on Form 10-K, dated
March 23, 1999, for the fiscal year ended December 26, 1998).
10.8 Certain instruments with respect to long-term debt of the
Company have not been filed as Exhibits to the Report since the
total amount of securities authorized under any such instrument
does not exceed 10 percent of the total assets of the Company
and its subsidiaries on a consolidated basis. The Company
agrees to furnish a copy of each such instrument upon request of
the Securities and Exchange Commission.
10.9 Employment Agreement, effective October 1, 1991 by and
between Mueller Industries, Inc. and Harvey L. Karp
(Incorporated herein by reference to Exhibit 10.3 of the
Registrant's Current Report on Form 8-K dated November 22,
1991).
10.10 Stock Option Agreement, dated December 4, 1991 by and between
Mueller Industries, Inc. and Harvey L. Karp (Incorporated herein
by reference to Exhibit 10.4 of the Registrant's Current Report
on Form 8-K dated November 22, 1991).
10.11 Stock Option Agreement, dated March 3, 1992 by and between
Mueller Industries, Inc. and Harvey L. Karp (Incorporated herein
by reference to Exhibit 2 of the Registrant's Current Report on
Form 8-K dated March 11, 1992).
10.12 Mueller Industries, Inc. 1991 Incentive Stock Option Plan
(Incorporated herein by reference to Exhibit 4(a) of the
Registrant's Registration Statement on Form S-8 dated April 17,
1992).
10.13 Summary description of the Registrant's 2000 bonus plan for
certain key employees.
10.14 Amended and Restated Employment Agreement, effective as of
September 17, 1997, by and between Mueller Industries, Inc. and
Harvey L. Karp (Incorporated herein by reference to Exhibit 10.1
of the Registrant's Report on Form 10-Q, dated October 21, 1997,
for the quarter ended September 27, 1997).
10.15 Amended and Restated Employment Agreement, effective as of
September 17, 1997, by and between Mueller Industries, Inc. and
William D. O'Hagan (Incorporated herein by reference to Exhibit
10.2 of the Registrant's Report on Form 10-Q, dated October 21,
1997, for the quarter ended September 27, 1997).
10.16 Mueller Industries, Inc. 1994 Stock Option Plan (Incorporated
herein by reference to Exhibit 10.13 of the Registrant's Report
on Form 10-K, dated March 17, 1995, for the fiscal year ended
December 31, 1994).
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10.17 Mueller Industries, Inc. 1994 Non-Employee Director Stock Option
Plan (Incorporated herein by reference to Exhibit 10.14 of the
Registrant's Report on Form 10-K, dated March 17, 1995, for the
fiscal year ended December 31, 1994).
10.18 Mueller Industries, Inc. Deferred Compensation Plan, effective
January 1, 1997 (Incorporated herein by reference to Exhibit
10.12 of the Registrant's Report on Form 10-K, dated March 20,
1997, for the fiscal year ended December 28, 1996).
10.19 Amendment No. 1 to Mueller Industries, Inc. Deferred
Compensation Plan as amended and restated January 1, 1997.
10.20 Mueller Industries, Inc. 1998 Stock Option Plan
(Incorporated herein by reference to Exhibit A of the
Registrant's Definitive Proxy Statement, dated March 18, 1998).
10.21 Stock Option Agreement, dated May 7, 1997 by and between Mueller
Industries, Inc. and William D. O'Hagan (Incorporated herein by
reference to Exhibit 10.19 of the Registrant's Report on Form
10-K, dated March 23, 1999, for the fiscal year ended December
26, 1998).
10.22 Stock Option Agreement, dated October 9, 1998 by and between
Mueller Industries, Inc. and William D. O'Hagan (Incorporated
herein by reference to Exhibit 10.20 of the Registrant's Report
on Form 10-K, dated March 23, 1999, for the fiscal year ended
December 26, 1998).
13.0 Mueller Industries, Inc.'s Annual Report to Stockholders for
the year ended December 25, 1999. Such report, except to the
extent incorporated herein by reference, is being furnished for
the information of the Securities and Exchange Commission only
and is not to be deemed filed as a part of this Annual Report on
Form 10-K.
21.0 Subsidiaries of the Registrant.
23.0 Consent of Independent Auditor (Includes report on Financial
Statement Schedule).
(b) During the three months ended December 25, 1999, no Current Reports
on Form 8-K were filed.
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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 March
23, 2000.
MUELLER INDUSTRIES, INC.
/S/ HARVEY L. KARP
Harvey L. Karp, Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Title Date
/S/ HARVEY L. KARP Chairman of the Board, and Director March 23, 2000
Harvey L. Karp
/S/ ROBERT B. HODES Director March 23, 2000
Robert B. Hodes
/S/ G.E. MANOLOVICI Director March 23, 2000
G.E. Manolovici
/S/ WILLIAM D. O'HAGAN President, Chief Executive Officer, March 23, 2000
William D. O'Hagan Director
/S/ ROBERT J. PASQUARELLI Director March 23, 2000
Robert J. Pasquarelli
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person on behalf of the
Registrant and in the capacities and on the date indicated.
Signature and Title Date
/S/ KENT A. MCKEE March 23, 2000
Kent A. McKee
Vice President and
Chief Financial Officer
(Principal Accounting Officer)
/S/ RICHARD W. CORMAN March 23, 2000
Richard W. Corman
Corporate Controller
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INDEX TO FINANCIAL STATEMENTS
The consolidated financial statements, together with the report thereon
of Ernst & Young LLP dated February 4, 2000, appearing on page 24 through
and including 54, of the Company's 1999 Annual Report to Stockholders are
incorporated by reference in this Annual Report on Form 10-K. With the
exception of the aforementioned information, no other information appearing
in the 1999 Annual Report to Stockholders is deemed to be filed as part of
this Annual Report on Form 10-K under Item 8. The following Consolidated
Financial Statement Schedule should be read in conjunction with the
consolidated financial statements in such 1999 Annual Report to
Stockholders. Consolidated Financial Statement Schedules not included with
this Annual Report on Form 10-K have been omitted because they are not
applicable or the required information is shown in the consolidated
financial statements or notes thereto.
FINANCIAL STATEMENT SCHEDULE
Page
Schedule for the fiscal years ended December 25, 1999,
December 26, 1998, and December 27, 1997.
Valuation and Qualifying Accounts (Schedule II) 19
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MUELLER INDUSTRIES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 25, 1999, December 26, 1998, and December 27, 1997
(In thousands)
Additions
-------------------------------
Balance at Charged to Balance
beginning costs and Other at end
of year expenses additions Deductions of year
------------ ------------ ----------- ----------- -----------
1999
Allowance for doubtful accounts $ 4,929 $ 1,503 $ - $ 1,065 $ 5,637
Environmental reserves $ 16,321 $ - $ - $ 3,356 $ 12,965
Severance and related $ 9,266 $ - $ - $ 7,708 $ 1,558
Other reserves (3) $ 15,748 $ - $ - $ 5,714 $ 10,034
Valuation allowance for deferred
tax assets $ 46,592 $ - $ 10,280 (1) $ 8,220 $ 48,652
1998
Allowance for doubtful accounts $ 3,680 $ 556 $ 1,197 (2) $ 504 $ 4,929
Environmental reserves $ 10,368 $ 2,133 $ 7,472 (2) $ 3,652 $ 16,321
Severance and related $ - $ - $ 9,464 (2) $ 198 $ 9,266
Other reserves (3) $ 10,448 $ 200 $ 6,838 (2) $ 1,738 $ 15,748
Valuation allowance for deferred
tax assets $ 52,073 $ - $ - $ 5,481 $ 46,592
1997
Allowance for doubtful accounts $ 3,188 $ 107 $ 677 (2) $ 292 $ 3,680
Environmental reserves $ 9,105 $ 3,100 $ 3,949 (2) $ 5,786 $ 10,368
Other reserves (3) $ 10,368 $ 250 $ 2,089 (2) $ 2,259 $ 10,448
Valuation allowance for deferred
tax assets $ 56,299 $ - $ - $ 4,226 $ 52,073
(1) Other additions to the valuation allowance for deferred tax assets
relate to foreign net operating loss carryforwards.
(2) Resulted from acquisitions during 1998 and 1997.
(3) Other reserves are included in the balance sheet captions "Other
current liabilities" and "Other noncurrent liabilities".
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EXHIBIT INDEX
Exhibits Description Page
10.13 Summary description of the Registrant's 2000 bonus plan
for certain key employees.
10.20 Amendment No. 1 to Mueller Industries, Inc. Deferred
Compensation Plan as amended and restated January 1, 1997.
13.0 Mueller Industries, Inc.'s Annual Report to
Stockholders for the year ended December 25, 1999.
Such report, except to the extent incorporated
herein by reference, is being furnished for the
information of the Securities and Exchange
Commission only and is not to be deemed filed as a
part of this Annual Report on Form 10-K.
21.0 Subsidiaries of the Registrant.
23.0 Consent of Independent Auditor (Includes report
on Financial Statement Schedule).
27.0 Financial Data Schedule (EDGAR filing only)
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