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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 27, 1997 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.)
6799 GREAT OAKS ROAD, SUITE 200
MEMPHIS, TENNESSEE 38138
(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
10, 1998 was 17,569,737, excluding 2,430,263 treasury shares. The aggregate
market value of the 17,024,628 shares of common stock held by non-affiliates
of the Registrant was $936,354,540 at March 10, 1998 (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 27, 1997 (Part I and II); Registrant's Definitive Proxy Statement for
the 1998 Annual Meeting of Stockholders, scheduled to be mailed on or about
March 18, 1998 (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...................11
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...........12
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K...........................................12
Signatures..............................................................16
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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, driers and flare fittings; and copper alloy
tubing, aluminum tubing and fabricated tubular products. These operations
("Manufacturing Segment") accounted for approximately 96 percent of the
Company's total net sales and 80 percent of total identifiable assets on a
consolidated basis in 1997. The Company markets its products to the
heating and air-conditioning, refrigeration, plumbing, hardware and other
industries. Mueller operates eighteen factories in the United States,
Canada, the United Kingdom, and France and has distribution facilities in
each of these countries and sales representation worldwide.
The Company also has operations which are conducted through its
wholly-owned subsidiaries Arava Natural Resources Company, Inc. ("Arava")
and Alaska Gold Company ("Alaska Gold"). These operations consist
principally of the operation of a short line railroad in Utah and a placer
gold mining operation in Alaska.
Information concerning net sales, operating income, and identifiable
assets of each segment 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 27, 1997. Such information is
incorporated herein by reference.
Manufacturing Segment
Products and Manufacturing Operations
Mueller's Standard Products include 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.
In 1997, the Company acquired copper tube manufacturing operations in
England and France. On February 28, 1997, the Company acquired certain
assets of Wednesbury Tube Company ("Wednesbury") for approximately $21.3
million. Wednesbury is located in Bilston, West Midlands, England. On May
15, 1997, the Company acquired Desnoyers S.A., a copper tube manufacturer
which operates two factories near Paris in Laigneville and Longueville,
France. The Company acquired Desnoyers for approximately $13.5 million
which includes certain assumed debt obligations. These acquisitions
established a significant manufacturing and sales presence in Europe for
the Company's manufacturing operations.
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Standard Products 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.
Additionally, valves, wrot copper and brass fittings, filter driers and
other related assemblies are manufactured for commercial air-conditioning
and refrigeration applications such as vending machines, ice machines,
walk-in coolers, and numerous refrigeration applications. The
refrigeration product line also includes products for the refrigeration and
air-conditioning installation and service markets. 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.
On December 30, 1996, the Company acquired the assets and certain
liabilities of Precision Tube Company, Inc. ("Precision") for approximately
$6.6 million. Precision fabricates tubing and coaxial cables and
assemblies.
Mueller's Industrial Products include brass rod, nonferrous forgings
and impact extrusions that are sold primarily to Original Equipment
Manufacturers ("OEM") 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. Mueller brass and
aluminum forgings are used in a wide variety of end products, including
automotive components, brass fittings, industrial machinery, valve bodies,
gear blanks, computer hardware, and fire fighting equipment. The Company
also serves the automotive, military ordnance, aerospace and general
manufacturing industries with cold-formed aluminum and copper impact
extrusions. Typical applications for impacts are automotive parts, high-
strength ordnance, high-conductivity electrical components, builders'
hardware, hydraulic systems, and other uses where toughness must be
combined with varying complexities of design and finish.
The Company's manufacturing facilities have operated at high levels
during 1997, 1996, and 1995.
Marketing and Distribution
Mueller's Standard Products are marketed primarily through its own
sales and distribution organization, which maintains sales offices and
distribution centers throughout the United States and in Canada, the United
Kingdom, and France. Additionally, these 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.
Industrial Products are sold, primarily, direct to OEM customers.
Outside of North America, the Company sells its products through various
channels including exclusive distributors, agents and direct sales channels
in over 65 countries, primarily in Europe, the Far East, and the Middle
East.
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Competition
The businesses in which Mueller is engaged are highly competitive.
The principal methods of competition for Mueller's products are customer
service and availability. 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 Mueller's products on December 27,
1997 and December 28, 1996 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., Halstead Industries, Inc.,
Reading Tube Corporation, Wolverine Tube, Inc., and Howell Metal Company,
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. The
plastic fittings competitors include more than a dozen companies. The
brass rod competitors include Cerro Metal Products Company, Inc., Chase
Brass Industries, Inc., Extruded Metals Inc., and others both domestic and
foreign. As illustrated above, no other single competitor offers such a
wide ranging product line; management believes that this is a competitive
advantage in some markets.
Raw Materials and Supplies
The major portion of Mueller's base metal requirements (primarily
copper) are normally obtained through short-term supply contracts with
competitive pricing provisions. 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.
Other Businesses
Mueller, through its subsidiaries Arava and Alaska Gold, is engaged in
the operation of a short line railroad in Utah and placer gold mining in
Alaska. It also owns interests in other natural resource properties.
Short Line Railroad
Utah Railway Company ("Utah Railway"), a wholly-owned subsidiary of
Arava, operates over 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% of coal tonnage hauled. The Utah Railway
transports coal to an interchange point at Provo, Utah. 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 the
past five years, annual tonnage has ranged between 3.9 and 6.2 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.
-5-
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, in 1997, Utah Railway began a switching operation
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 rail served customers and/or accepting
loads of freight from such customers for delivery to long haul railroad
carriers to be transported to final destinations.
Gold Mining
Alaska Gold mines placer gold in Nome, Alaska. Alaska Gold produced
28,154 net ounces of gold in 1997, 22,918 net ounces of gold in 1996,
18,731 net ounces of gold in 1995, 14,173 net ounces of gold in 1994, and
22,440 net ounces of gold in 1993, at a net production cost of $316 per
ounce in 1997, $352 per ounce in 1996, $307 per ounce in 1995, $376 per
ounce in 1994, and $280 per ounce in 1993. Based on the results of past
exploratory drilling, Alaska Gold believes there may be various areas
available on its properties to sustain open pit mining for ten years.
Continued operations, however, depend upon the economic feasibility.
Properties consist of approximately 14,500 acres in and adjacent to
Nome. In addition, Alaska Gold owns or has patented claims on
approximately 10,400 acres in the Fairbanks, Alaska area, and approximately
3,000 acres in the Hogatza, Alaska area.
Other Properties
In 1997, United States Fuel Company ("U.S. Fuel"), a wholly-owned
subsidiary of Arava, sold its coal properties. Until coal production
ceased in March 1993, U.S. Fuel mined steam coal by the deep-mine process
at these 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. As of December 27, 1997, the Company has received and recognized
as gains $3.0 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 27, 1997, the Company employed approximately 3,400
employees of which approximately 1,900 were represented by various unions.
A majority of the unionized employees are under contracts which expire in
1999. Substantially all of the 1997 increase in employment relates to
businesses acquired during the year.
Raw Material and Energy Availability
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
The Company is subject to various laws and regulations relating to
environmental quality. Compliance with these laws and regulations is a
matter of high priority. Mueller's provision for environmental compliance
includes charges of $3.1 million in 1997, $2.0 million in 1996, $1.4
million in 1995, $2.9 million in 1994, and $1.1 million in 1993. 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 1998 fiscal year, or for the next two fiscal years.
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. Cleveland Mill Site
In 1993, the EPA issued special notice letters to all known
potentially responsible parties ("PRPs") regarding the Cleveland Mill
Superfund Site in Grant County, New Mexico. In response, MRRC, Bayard
Mining Corp. ("Bayard"), a wholly-owned subsidiary of Arava, and a third
party filed a good faith offer to implement the remedy set forth in the
EPA's Record of Decision ("ROD"). Total future costs for remediating the
site were estimated by the EPA in the ROD at approximately $6.2 million.
MRRC and Bayard, along with said third party, have entered into a consent
decree relating to the site and have agreed to an allocation formula
requiring Bayard and MRRC to pay 29 percent of future costs. The third
party has agreed to pay the balance. Work at this site has commenced and
is anticipated to be substantially completed in 1998.
2. 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, MRRC completed a feasibility study in
1997 describing measures designed to mitigate the effects of acid rock
drainage. MRRC has agreed to implement additional remedial options at an
estimated cost of approximately $1.7 million. Further remediation may be
required depending on how effective MRRC's remedial options are in reducing
acid rock drainage.
In April 1996, MRRC settled a lawsuit from an adjoining landowner. As
part of the settlement, MRRC acquired approximately 4,000 acres of patented
mining claims and other property located in Shasta County. MRRC intends to
remediate the mine sites on this acquired property as part of its overall
efforts at Mammoth.
-7-
3. 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 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 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, 1998,
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 at the Lead Refinery site. Site activities, based on the
approval, began during December 1996. Costs for studies and interim clean
up efforts were estimated at approximately $4.5 million in the first
quarter of 1997. In the process of remediating the site, Lead Refinery
subsequently identified suspected petroleum contamination on site. Lead
Refinery is evaluating whether and how to address remediation of this
contamination as part of the Corrective Action Management Unit. Once these
activities are completed, additional work would likely be needed to
investigate and remediate any contamination 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.
-8-
Miscellaneous
In 1994, the Company received notice from the EPA that Mueller Brass
Co. was a PRP at the Jack's Creek/Sitkin Smelting Superfund Site in Eastern
Pennsylvania. Mueller Brass Co. is alleged to have contributed less than 1
percent of the hazardous wastes at this site. Based upon its estimated
allocation ranking, its share of the EPA's estimated cleanup costs would be
less than $400,000. Cleanup will commence in 1998.
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 1997, 1996, or 1995. 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
____________ _____________ _________________________________
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.
Port Huron, MI 40,000 sq. ft. Formed tube plant. Produces
5.11 acres copper fittings using cold heading
equipment.
Fulton, MS 418,000 sq. ft. Copper tube mill. Facility
64.27 acres includes 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.
-9-
Fulton, MS 70,000 sq. ft.(1) Copper fittings plant. High-
7.68 acres volume facility that produces
copper fittings using tube feed
stock from the Company's copper
tube mill.
Fulton, MS 58,500 sq. ft.(1) Line sets plant. Produces copper
15.53 acres tube line sets using tube feed
stock from the Company's 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 mill.
Strathroy, 54,000 sq. ft. Copper fittings plant. Facility
Ontario Canada 4.67 acres produces copper fittings for the
Canadian domestic markets and for
export to European markets.
Upper Sandusky, 82,000 sq. ft. Plastic fittings plant. Produces
OH 7.52 acres DWV fittings using injection
molding equipment.
Kalamazoo, MI 205,000 sq. ft. Plastic fittings plant. Produces
18 acres DWV fittings using injection
molding equipment.
Cerritos, CA 115,000 sq. ft. Plastic fittings plant. Produces
5.1 acres DWV fittings using injection
molding equipment.
Hartsville, TN 78,000 sq. ft. Refrigeration products plant.
4.51 acres Produces products used in
refrigeration applications such as
ball valves, line valves,
compressor valves, and filter
driers.
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.(2) Coaxial cable plant. Facility
manufactures semi-rigid coaxial
cable and high-performance cable
assemblies.
Bilston, England 402,500 sq. ft. Copper tube mill. Facility
United Kingdom 14.95 acres includes casting, extruding and
finishing equipment to produce
copper tubing.
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Longueville 332,500 sq. ft. Copper tube mill. Facility
France 16.3 acres includes extrusion and finishing
equipment to produce copper
tubing.
Laigneville 387,500 sq. ft. Copper tube mill. Facility
France 18.8 acres includes drawing and finishing
equipment to produce copper
tubing.
In addition, the Company owns and/or leases other properties used as
distribution centers and corporate offices.
(1) Facility is leased under long-term lease agreement, with option to
purchase at nominal cost.
(2) Facility is leased under 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 27, 1997, 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 27, 1997, which selected financial data is incorporated
herein by reference.
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
27, 1997 and is incorporated herein by reference.
-11-
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Supplemental Financial
Information of this Annual Report on Form 10-K which is incorporated herein
by reference.
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 Officers and Information about
Director Nominees" in the Company's Proxy Statement for its 1998 Annual
Meeting of Stockholders to be filed with the Securities and Exchange
Commission on or about March 18, 1998 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 1998
Annual Meeting of Stockholders to be filed with the Securities and Exchange
Commission on or about March 18, 1998 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
Officers and Information about Director Nominees" in the Company's Proxy
Statement for its 1998 Annual Meeting of Stockholders to be filed with the
Securities and Exchange Commission on or about March 18, 1998 and is
incorporated herein by reference.
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 1998 Annual Meeting of Stockholders to be filed
with the Securities and Exchange Commission on or about March 18, 1998 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.
-12-
2. Financial Statement Schedule: the financial statement schedule
described in Item 8 of this report which is incorporated herein by
reference.
3. Exhibits:
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 Current Report on Form 8-K
dated December 28, 1990).
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).
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).
4.3 Credit Agreement among Mueller Industries, Inc. (as
Borrower) and Michigan National Bank (as a Bank) 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).
4.4 First Amendment to Credit Agreement among Mueller
Industries, Inc. (as Borrower) and Michigan National Bank
(as a Bank) 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).
4.5 Second Amendment to Credit Agreement among Mueller
Industries, Inc. (as Borrower) and Michigan National Bank
(as a Bank) 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).
4.6 Third Amendment to Credit Agreement among Mueller
Industries, Inc. (as Borrower) and Michigan National Bank
(as a Bank) 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).
-13-
4.7 Fourth Amendment to Credit Agreement among Mueller
Industries, Inc. (as Borrower) and Michigan National Bank
(as a Bank) and Michigan National Bank (as Agent) dated
December 31, 1997.
4.8 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.
10.1 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).
10.2 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).
10.3 Mueller Industries, Inc. 1991 Employee Stock Purchase Plan
(Incorporated herein by reference to Exhibit 4(a) of the
Registrant's Registration Statement on Form S-8 dated June
28, 1991).
10.4 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).
10.5 Summary description of the Registrant's 1998 bonus plan for
certain key employees.
10.6 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).
10.7 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).
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10.8 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).
10.9 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).
10.10 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).
13.0 Mueller Industries, Inc.'s Annual Report to Stockholders for
the year ended December 27, 1997. 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
Supplemental Financial Information).
(b) During the three months ended December 27, 1997, 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 19, 1998.
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 19, 1998
Harvey L. Karp
/S/ROBERT B. HODES Director March 19, 1998
Robert B. Hodes
/S/ALLAN MACTIER Director March 19, 1998
Allan Mactier
/S/WILLIAM D. O'HAGAN President, Chief Executive Officer, March 19, 1998
William D. O'Hagan Director
/S/ROBERT J. PASQUARELLI Director March 19, 1998
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/ EARL W. BUNKERS March 19, 1998
Earl W. Bunkers
Executive Vice President
Chief Financial Officer
(Principal Accounting Officer)
/S/ KENT A. MCKEE March 19, 1998
Kent A. McKee
Vice President Business Development/
Investor Relations
/S/ RICHARD W. CORMAN March 19, 1998
Richard W. Corman
Director of Corporate Accounting
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INDEX TO FINANCIAL STATEMENTS
The consolidated financial statements, together with the report
thereon of Ernst & Young LLP dated February 6, 1998, appearing
on page 18 through and including 46, of the Company's 1997 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 1997 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 1997 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.
SUPPLEMENTAL FINANCIAL INFORMATION
Page
Schedule for the fiscal years ended December 27, 1997,
December 28, 1996, and December 30, 1995.
Valuation and Qualifying Accounts (Schedule II) 18
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MUELLER INDUSTRIES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 27, 1997, December 28, 1996, and December 30, 1995
(In thousands)
Additions
-------------------------------
Balance at Charged to Balance
beginning costs and Other at end
of year expenses additions Deductions of year
------------ ------------ ----------- ----------- -----------
1997
Allowance for doubtful accounts $ 3,188 $ 107 $ 677 (1) $ 292 $ 3,680
Environmental reserves $ 9,105 $ 3,100 $ 3,949 (1) $ 5,786 $ 10,368
Other reserves (2) $ 10,368 $ 250 $ 2,089 (1) $ 2,259 $ 10,448
Valuation allowance for deferred
tax assets $ 56,299 $ - $ - $ 4,226 $ 52,073
1996
Allowance for doubtful accounts $ 2,986 $ 435 $ - $ 233 $ 3,188
Environmental reserves $ 9,585 $ 2,045 $ - $ 2,525 $ 9,105
Other reserves (2) $ 10,051 $ 828 $ - $ 511 $ 10,368
Valuation allowance for deferred
tax assets $ 60,921 $ - $ - $ 4,622 $ 56,299
1995
Allowance for doubtful accounts $ 3,336 $ 75 $ - $ 425 $ 2,986
Environmental reserves $ 11,178 $ 1,421 $ - $ 3,014 $ 9,585
Other reserves (2) $ 16,150 $ (1,157) $ - $ 4,942 $ 10,051
Valuation allowance for deferred
tax assets $ 65,927 $ - $ - $ 5,006 $ 60,921
(1) Resulted from acquisitions during 1997.
(2) 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
4.7 Fourth Amendment to Credit Agreement among Mueller
Industries, Inc. (as Borrower) and Michigan
National Bank (as a Bank) and Michigan National
Bank (as Agent) dated December 31, 1997.
10.5 Summary description of the Registrant's 1998 bonus
plan for certain key employees.
13.0 Mueller Industries, Inc.'s Annual Report to
Stockholders for the year ended December 27, 1997.
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 Supplemental Financial Information).
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