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UNITED STATES
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 28, 2003 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) (Zip Code)
(901) 753-3200
(Registrant's telephone number, including area code)
Indicate by 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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes /X/ No / /
The number of shares of the registrant's common stock outstanding as of
July 25, 2003, was 34,267,384.
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MUELLER INDUSTRIES, INC.
FORM 10-Q
For the Period Ended June 28, 2003
INDEX
Part I. Financial Information Page
Item 1. Financial Statements (Unaudited)
a.) Consolidated Statements of Income
for the quarters and six months ended
June 28, 2003 and June 29, 2002 3
b.) Consolidated Balance Sheets
as of June 28, 2003 and December 28, 2002 7
c.) Consolidated Statements of Cash Flows
for the six months ended June 28, 2003
and June 29, 2002 9
d.) Notes to Consolidated Financial Statements 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4. Controls and Procedures 18
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 19
Signatures 20
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Quarter Ended
June 28, 2003 June 29, 2002
(In thousands, except per share data)
Net sales $ 248,221 $ 260,507
Cost of goods sold 203,461 201,351
---------- ----------
Gross profit 44,760 59,156
Depreciation and amortization 9,722 9,163
Selling, general, and
administrative expense 23,575 22,374
---------- ----------
Operating income 11,463 27,619
Interest expense (292) (343)
Environmental expense (257) (230)
Other income, net 2,182 1,414
---------- ----------
Income from continuing operations
before income taxes 13,096 28,460
Current income tax expense (870) (5,483)
Deferred income tax expense (3,247) (4,261)
---------- ----------
Total income tax expense (4,117) (9,744)
---------- ----------
Income from continuing operations 8,979 18,716
Loss from operation of
discontinued operations, net
of income taxes - (251)
---------- ----------
Net income $ 8,979 $ 18,465
========== ==========
See accompanying notes to consolidated financial statements.
-3-
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (continued)
(Unaudited)
For the Quarter Ended
June 28, 2003 June 29, 2002
(In thousands, except per share data)
Weighted average shares
for basic earnings per share 34,263 33,940
Effect of dilutive stock options 2,540 3,258
---------- ----------
Adjusted weighted average shares
for diluted earnings per share 36,803 37,198
---------- ----------
Basic earnings (loss) per share:
From continuing operations $ 0.26 $ 0.55
From discontinued operations - (0.01)
---------- ----------
Basic earnings per share $ 0.26 $ 0.54
========== ==========
Diluted earnings (loss) per share:
From continuing operations $ 0.24 $ 0.50
From discontinued operations - -
---------- ----------
Diluted earnings per share $ 0.24 $ 0.50
========== ==========
See accompanying notes to consolidated financial statements.
-4-
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (continued)
(Unaudited)
For the Six Months Ended
June 28, 2003 June 29, 2002
(In thousands, except per share data)
Net sales $ 480,243 $ 509,560
Cost of goods sold 395,376 393,157
---------- ----------
Gross profit 84,867 116,403
Depreciation and amortization 19,462 18,239
Selling, general, and
administrative expense 46,871 44,355
---------- ----------
Operating income 18,534 53,809
Interest expense (603) (836)
Environmental expense (464) (405)
Other income, net 2,739 3,040
---------- ----------
Income from continuing operations
before income taxes 20,206 55,608
Current income tax expense (2,737) (12,173)
Deferred income tax expense (4,030) (6,854)
---------- ----------
Total income tax expense (6,767) (19,027)
---------- ----------
Income from continuing operations 13,439 36,581
Loss from operation of
discontinued operations, net
of income taxes (539) (180)
---------- ----------
Net income $ 12,900 $ 36,401
========== ==========
See accompanying notes to consolidated financial statements.
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MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (continued)
(Unaudited)
For the Six Months Ended
June 28, 2003 June 29, 2002
(In thousands, except per share data)
Weighted average shares
for basic earnings per share 34,260 33,724
Effect of dilutive stock options 2,527 3,543
---------- ----------
Adjusted weighted average shares
for diluted earnings per share 36,787 37,267
---------- ----------
Basic earnings (loss) per share:
From continuing operations $ 0.40 $ 1.09
From discontinued operations (0.02) (0.01)
---------- ----------
Basic earnings per share $ 0.38 $ 1.08
========== ==========
Diluted earnings (loss) per share:
From continuing operations $ 0.36 $ 0.98
From discontinued operations (0.01) -
---------- ----------
Diluted earnings per share $ 0.35 $ 0.98
========== ==========
See accompanying notes to consolidated financial statements.
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MUELLER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 28, 2003 December 28, 2002
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 207,354 $ 217,601
Accounts receivable, less allowance
for doubtful accounts of $4,881 in
2003 and $5,196 in 2002 160,105 132,427
Inventories:
Raw material and supplies 21,616 22,692
Work-in-process 22,777 21,477
Finished goods 95,193 98,784
---------- ----------
Total inventories 139,586 142,953
Other current assets 6,759 7,366
---------- ----------
Total current assets 513,804 500,347
Property, plant, and equipment, net 350,970 352,469
Goodwill, net 104,822 105,551
Other assets 36,367 29,580
---------- ----------
$ 1,005,963 $ 987,947
========== ==========
See accompanying notes to consolidated financial statements.
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MUELLER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 28, 2003 December 28, 2002
(In thousands, except share data)
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 3,711 $ 4,161
Accounts payable 37,717 41,004
Accrued wages and other employee costs 23,088 26,199
Other current liabilities 38,518 34,987
---------- ----------
Total current liabilities 103,034 106,351
Long-term debt 12,410 14,005
Pension and postretirement liabilities 34,598 35,550
Environmental reserves 9,994 9,110
Deferred income taxes 62,352 59,269
Other noncurrent liabilities 11,640 9,718
---------- ----------
Total liabilities 234,028 234,003
---------- ----------
Minority interest in subsidiaries 248 421
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 100,000,000; issued
40,091,502; outstanding 34,267,384
in 2003 and 34,257,419 in 2002 401 401
Additional paid-in capital, common 259,030 258,939
Retained earnings 623,014 610,114
Accumulated other comprehensive loss (16,111) (21,133)
Treasury common stock, at cost (94,647) (94,798)
---------- ----------
Total stockholders' equity 771,687 753,523
Commitments and contingencies (Note 2) - -
---------- ----------
$ 1,005,963 $ 987,947
========== ==========
See accompanying notes to consolidated financial statements.
-8-
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
June 28, 2003 June 29, 2002
(In thousands)
Cash flows from operating activities
Net income from continuing operations $ 13,439 $ 36,581
Reconciliation of net income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 19,462 18,239
Deferred income taxes 4,030 6,854
Loss (gain) on disposal
of properties 193 (962)
Income tax benefit from exercise
of stock options - 10,252
Minority interest in subsidiaries,
net of dividends paid (173) 66
Changes in assets and liabilities:
Receivables (30,341) (32,461)
Inventories 3,073 (3,920)
Other assets 1,314 (857)
Current liabilities 3,293 21,479
Other liabilities (505) 574
Other, net 352 68
---------- ----------
Net cash provided by
operating activities 14,137 55,913
---------- ----------
Cash flows from investing activities
Capital expenditures (15,982) (13,121)
Purchase of Conbraco Industries, Inc.
common stock (10,806) -
Escrowed IRB proceeds 449 2,206
Proceeds from sales of properties 210 1,485
---------- ----------
Net cash used in investing activities (26,129) (9,430)
---------- ----------
Cash flows from financing activities
Repayments of long-term debt (2,045) (32,066)
Proceeds from the sale of
treasury stock 244 2,587
Acquisition of treasury stock - (10,450)
---------- ----------
Net cash used in financing activities (1,801) (39,929)
---------- ----------
See accompanying notes to consolidated financial statements.
-9-
MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
For the Six Months Ended
June 28, 2003 June 29, 2002
(In thousands)
Effect of exchange rate changes on cash $ 3,294 $ 1,066
---------- ----------
(Decrease) increase in cash
and cash equivalents (10,499) 7,620
Cash provided by (used in)
discontinued operations 252 (304)
Cash and cash equivalents at the
beginning of the period 217,601 121,862
---------- ----------
Cash and cash equivalents at the
end of the period $ 207,354 $ 129,178
========== ==========
See accompanying notes to consolidated financial statements.
-10-
MUELLER INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
General
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States 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
Basic per share amounts have been computed based on the average number
of common shares outstanding. Diluted per share amounts reflect the increase
in average common shares outstanding that would result from the assumed
exercise of outstanding stock options, computed using the treasury stock
method.
Note 2 - Commitments and Contingencies
The Company is subject to normal environmental standards imposed by
federal, state, local, and foreign 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 have arisen in the ordinary
course of business which management believes will not have a material effect
on the Company's financial condition or results of operations.
The Company has guarantees which are letters of credit issued by the
Company generally to guarantee the payment of insurance deductibles, retiree
health benefits, and certain operating costs of a foreign subsidiary. The
terms of the Company's guarantees are generally one year but are renewable
annually as required. The maximum potential amount of future payments the
Company could have been required to make under its guarantees at June 28,
2003 was $14.1 million.
Note 3 - Recently Issued Accounting Standards
In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46).
FIN 46 provides accounting requirements for business enterprises to
consolidate related entities in which they are determined to be the primary
beneficiary as a result of their variable economic interests. The
interpretation provides guidance in judging multiple economic interests in an
-11-
entity and in determining the primary beneficiary. The interpretation
outlines disclosure requirements for variable interest entities (VIEs) in
existence prior to January 31, 2003, and provides consolidation requirements
for VIEs created after January 31, 2003. The Company is currently evaluating
the impact of FIN 46 and does not expect the adoption of FIN 46 to have a
material effect on its earnings or its financial position.
Note 4 - Industry Segments
Summarized segment information is as follows:
For the Quarter Ended
June 28, 2003 June 29, 2002
(In thousands)
Net sales:
Standard Products Division $ 178,939 $ 187,187
Industrial Products Division 71,585 74,937
Elimination of intersegment sales (2,303) (1,617)
---------- ----------
$ 248,221 $ 260,507
========== ==========
Operating income:
Standard Products Division $ 11,877 $ 25,409
Industrial Products Division 3,597 5,803
Unallocated expenses (4,011) (3,593)
---------- ----------
$ 11,463 $ 27,619
========== ==========
For the Six Months Ended
June 28, 2003 June 29, 2002
(In thousands)
Net sales:
Standard Products Division $ 338,319 $ 367,285
Industrial Products Division 146,532 144,924
Elimination of intersegment sales (4,608) (2,649)
---------- ----------
$ 480,243 $ 509,560
========== ==========
Operating income:
Standard Products Division $ 18,958 $ 50,567
Industrial Products Division 7,648 11,471
Unallocated expenses (8,072) (8,229)
---------- ----------
$ 18,534 $ 53,809
========== ==========
-12-
Note 5 - Comprehensive Income
Comprehensive income is as follows:
For the Quarter Ended
June 28, 2003 June 29, 2002
(In thousands)
Comprehensive income:
Net income $ 8,979 $ 18,465
Other comprehensive income (loss):
Cumulative translation adjustments 4,797 7,947
Minimum pension liability
adjustment - 110
Change in the fair value
of derivatives (153) (110)
---------- ----------
$ 13,623 $ 26,412
========== ==========
For the Six Months Ended
June 28, 2003 June 29, 2002
(In thousands)
Comprehensive income:
Net income $ 12,900 $ 36,401
Other comprehensive income (loss):
Cumulative translation adjustments 5,148 7,122
Minimum pension liability
adjustment - 3,017
Change in the fair value
of derivatives (126) 1,080
---------- ----------
$ 17,922 $ 47,620
========== ==========
Note 6 - Stock-Based Compensation
The Company accounts for its stock-based compensation plans using the
intrinsic value method prescribed in Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees", and related Interpretations.
No stock-based employee compensation expense is reflected in net income
because the exercise price of the Company's incentive employee stock options
equals the market price of the underlying stock on the date of grant. The
following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123), to stock-based employee compensation.
-13-
For the Quarter Ended
June 28, 2003 June 29, 2002
(In thousands, except per share data)
Net income $ 8,979 $ 18,465
SFAS No. 123 compensation
expense, net of income taxes (455) (716)
---------- ----------
SFAS No. 123 pro forma
net income $ 8,524 $ 17,749
========== ==========
Pro forma earnings per share:
Basic $ 0.25 $ 0.52
Diluted $ 0.23 $ 0.48
Earnings per share, as reported:
Basic $ 0.26 $ 0.54
Diluted $ 0.24 $ 0.50
For the Six Months Ended
June 28, 2003 June 29, 2002
(In thousands, except per share data)
Net income $ 12,900 $ 36,401
SFAS No. 123 compensation
expense, net of income taxes (898) (1,332)
---------- ----------
SFAS No. 123 pro forma
net income $ 12,002 $ 35,069
========== ==========
Pro forma earnings per share:
Basic $ 0.35 $ 1.04
Diluted $ 0.33 $ 0.94
Earnings per share, as reported:
Basic $ 0.38 $ 1.08
Diluted $ 0.35 $ 0.98
-14-
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General Overview
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, and Great Britain.
The Company's businesses are managed and organized into two segments:
Standard Products Division (SPD) and Industrial Products Division (IPD). SPD
manufactures and sells copper tube, copper and plastic fittings, and valves.
Outside of the United States, SPD manufactures and sells copper tube in
Europe. SPD sells these products to wholesalers in the HVAC (heating,
ventilation, and air-conditioning), plumbing, and refrigeration markets, to
distributors to the manufactured housing and recreational vehicle industries,
and to building material retailers. 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.
New housing starts and commercial construction are important
determinants of the Company's sales to the HVAC, 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
and commercial buildings. Profitability of certain of the Company's product
lines depends upon the "spreads" between the cost of raw material and the
selling prices of its completed products. The open market prices for copper
cathode and scrap, for example, influence the selling price of copper tubing,
a principal product manufactured by the Company. The Company attempts to
minimize the effects of fluctuations in material costs by passing through
these costs to its customers. Spreads fluctuate based upon market
conditions.
Results of Operations
Net income was $9.0 million, or 24 cents per diluted share, for the
second quarter of 2003, compared with net income of $18.5 million, or 50
cents per diluted share, for the same period of 2002. Year-to-date, net
income was $12.9 million, or 35 cents per diluted share, compared with net
income of $36.4 million, or 98 cents per diluted share, for 2002.
During the second quarter of 2003, the Company's net sales were $248.2
million, which compares with net sales of $260.5 million over the same period
of 2002, or a five percent decrease. Net sales were $480.2 million in the
first half of 2003 compared with $509.6 million in the same period of 2002.
The average price of copper was approximately three percent higher in the
first half of 2003 compared with the same period of 2002. During the second
-15-
quarter of 2003, the Company's manufacturing businesses shipped 175 million
pounds of product compared to 187 million pounds in the same quarter of 2002.
The Company shipped 342 million pounds of product in the first half of 2003
compared with 368 million in the same period of 2002. This decline in volume
as well as decreased selling prices in certain product lines, primarily
copper tube, resulted in the reduction in net sales.
Cost of goods sold increased from $201.4 million in the second quarter
of 2002 to $203.5 million in the same period of 2003. This increase was
attributable to higher material costs and increases in certain manufacturing
costs including health care benefit costs and packaging costs. Selling,
general, and administrative expense increased from $22.4 million in the
second quarter of 2002 to $23.6 million in the second quarter of 2003. This
increase relates primarily to components of the Company's pension cost,
including interest cost, expected return on plan assets, and amortization of
plan gains and losses, and increased professional fees. Depreciation and
amortization expense increased to $9.7 million and $19.5 million for the
second quarter and first half of 2003, respectively, compared with $9.2
million in the second quarter and $18.2 million in the first half of 2002.
The increase was due to recent capital expenditures and businesses acquired
during the second half of 2002.
Second quarter and first half operating income decreased from the
comparable periods in the prior year primarily due to reduced spreads in
certain product lines, primarily domestic and European copper tube. The
Company's European operations showed a modest profit for the second quarter
of 2003.
Interest expense for the second quarter of 2003 totaled $0.3 million,
even with the same period of 2002. For the first six months of 2003,
interest expense was $0.6 million compared with $0.8 million for the same
period of 2002. No interest was capitalized in the first half of 2003 or the
first half of 2002. Total interest in the second quarter and first half of
2003 decreased due to debt reductions.
The Company's effective income tax rate for the first half of 2003 was
33.5 percent compared with 34.2 percent for the first half of 2002.
Liquidity and Capital Resources
Cash provided by operating activities in the first half of 2003 totaled
$14.1 million, which was primarily attributable to net income from continuing
operations, depreciation and amortization, deferred income taxes, decreased
inventories, and increased current liabilities partially offset by increased
receivables. Fluctuations in the cost of copper and other raw materials
affect the Company's liquidity. Changes in material costs directly impact
components of working capital, primarily inventories and accounts receivable.
During the first six months of 2003, the Company used $26.1 million for
investing activities, consisting primarily of $10.8 million for the purchase
of Conbraco Industries, Inc common stock, plus $16.0 million for capital
expenditures. The Company also used $1.8 million for financing activities
during the six-month period, consisting primarily of repayments of long-term
debt. Existing cash balances and escrowed IRB proceeds were used to fund the
first half investing and financing activities.
-16-
During 1999, the Company's Board of Directors authorized the repurchase
of up to four million shares of the Company's common stock through open
market transactions or through privately negotiated transactions. This
authorization was expanded up to a total of ten million shares, and was
extended through October 2003. The Company has no obligation to purchase any
shares and may cancel, suspend, or extend the time period for the purchase of
shares at any time. Any purchases will be funded primarily through existing
cash and cash from operations. The Company may hold any shares purchased in
treasury or use a portion of the repurchased shares for employee benefit
plans, as well as for other corporate purposes. Through June 28, 2003, the
Company had repurchased approximately 2.4 million shares under this
authorization.
The Company has an unsecured $200 million revolving credit facility (the
Credit Facility), which matures in November 2003. At June 28, 2003, there
were no outstanding borrowings under the Credit Facility. Borrowings under
the Credit Facility bear interest, at the Company's option, at (i) LIBOR plus
a variable premium or (ii) the greater of Prime, or the Federal Funds rate
plus .50 percent. LIBOR advances may be based upon the one, two, three, or
six-month LIBOR. The variable premium over LIBOR is based on certain
financial ratios, and can range from 25 to 40 basis points. Additionally, a
facility fee is payable quarterly on the total commitment and varies from
12.5 to 22.5 basis points based upon the Company's capitalization ratios.
When funded debt is 50 percent or more of the commitment, a utilization fee
is payable quarterly on the average loan balance outstanding and varies from
0 to 20 basis points based upon the capitalization ratio. Availability of
funds under the Credit Facility is reduced by the amount of certain
outstanding letters of credit, which totaled approximately $6.9 million at
June 28, 2003.
Under the Credit Facility the Company is required, among other things,
to maintain certain minimum levels of net worth and meet certain minimum
financial ratios. At June 28, 2003 the Company was in compliance with all
debt covenants.
The Company expects to invest between $35 and $40 million for capital
projects during 2003. Management believes that cash provided by operations
and currently available cash of $207.4 million will be adequate to meet the
Company's normal future capital expenditure and operational needs. The
Company's current ratio was 5 to 1 at June 28, 2003.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosures about market risk are
incorporated herein by reference to Part II, Item 7A, of the Company's Report
on Form 10-K for the year ended December 28, 2002.
-17-
Item 4. Controls and Procedures
An evaluation was performed, under the supervision and with the
participation of the Company's management, including the Chief Executive
Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the
design and operation of the Company's disclosure controls and procedures,
within 90 days before the filing date of this quarterly report. Based on
that evaluation, the Company's management, including the CEO and CFO,
concluded that the Company's disclosure controls and procedures were
effective in timely alerting them to material information relating to the
Company (including its consolidated subsidiaries) required to be included in
the Company's periodic SEC filings. There have been no significant changes
in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to their evaluation.
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 1, 2003, the Company held its Annual Meeting of Stockholders at
which two proposals were voted upon: (i) election of directors and (ii) the
approval of 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
Gennaro J. Fulvio 31,109,893 405,684
Gary S. Gladstein 31,111,257 404,320
Terry Hermanson 31,383,789 131,788
Robert B. Hodes 24,127,090 7,388,486
Harvey L. Karp 31,035,087 480,490
William D. O'Hagan 31,028,745 486,832
The proposal to approve the appointment of Ernst & Young LLP as the
Company's auditors was ratified by 30,481,522 votes in favor, 1,010,796 votes
against, and 23,259 votes abstaining.
There were no broker non-votes pertaining to these proposals.
Item 5. Other Information
The Company is aware of investigations of competition in markets in
which it participates, or has participated in the past, in Europe, Canada,
and the United States. No charges or allegations have been filed against the
Company, which is cooperating with the investigations. The Company does not
anticipate any material adverse effect on its business or financial condition
as a result of the investigations.
-18-
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 28, 2003. 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.
99.1 Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
(b) During the quarter ended June 28, 2003, the registrant filed
one Current Report on Form 8-K dated April 16, 2003 providing
its first quarter 2003 earnings release.
Items 1, 2, and 3 are not applicable and have been omitted.
-19-
SIGNATURES
Pursuant to the requirements 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 28, 2003.
MUELLER INDUSTRIES, INC.
/s/ Kent A. McKee
Kent A. McKee
Vice President and
Chief Financial Officer
/s/ Richard W. Corman
Richard W. Corman
Corporate Controller
-20-
CERTIFICATION
I, William D. O'Hagan, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Mueller Industries,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
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6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date July 28, 2003
/s/ William D. O'Hagan
Chief Executive Officer
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CERTIFICATION
I, Kent A. McKee, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Mueller Industries,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
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6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date July 28, 2003
/s/ Kent A. McKee
Chief Financial Officer
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EXHIBIT INDEX
Exhibits Description
19.1 Mueller Industries, Inc.'s Quarterly Report to
Stockholders for the quarter ended June 28, 2003.
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.
99.1 Certification of Chief Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
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