Attached files
| file | filename |
|---|---|
| 8-K - MUELLER INDUSTRIES INC | v209574_8k.htm |
Mueller Industries, Inc. Reports Fourth Quarter and Fiscal 2010 Results
MEMPHIS, Tenn., Feb. 1, 2011 /PRNewswire/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller's net income in the fourth quarter was $17.7 million, or 47 cents per diluted share, on net sales of $526.9 million. This compares with a net loss of $17.5 million, or a loss of 47 cents per diluted share, on net sales of $433.0 million in the fourth quarter of 2009. The fourth quarter of 2009 included non-cash impairment charges of 74 cents per diluted share primarily related to goodwill.
For the fiscal year ended December 25, 2010, Mueller earned $86.2 million, or $2.28 per diluted share, which includes insurance settlement gains of $23.3 million, or 62 cents per diluted share. For fiscal 2009, the Company earned $4.7 million, or 12 cents per diluted share. Net sales for 2010 were $2.06 billion compared with $1.55 billion in 2009.
Financial and Operating Highlights
Regarding the fourth quarter and 2010 results, Mr. Karp said:
- "The increase in net sales in 2010 was largely due to the higher average cost of copper. The Comex average price of copper was $3.93 per pound in the fourth quarter of 2010, which compares with $3.03 per pound in the fourth quarter of 2009. Higher selling prices due to rising raw material values accounted for approximately $358 million of the increase in net sales primarily in the Plumbing & Refrigeration segment. Approximately $116 million of the increase in net sales was attributable to increased unit volume primarily in the OEM segment.
- "For the full year, our Plumbing & Refrigeration segment posted net sales of $1.12 billion and generated operating earnings of $83.7 million, which includes insurance settlement gains of $22.7 million. This compares with operating earnings of $27.0 million on net sales of $892.1 million in 2009. For the fourth quarter of 2010, operating income was $12.0 million on net sales of $290.5 million, which compares with an operating loss of $11.2 million on net sales of $231.0 million in the fourth quarter of 2009. The fourth quarter of 2009 included non-cash impairment charges totaling $19.5 million that reduced operating earnings.
- "Our OEM segment posted operating earnings of $80.1 million during 2010 on net sales of $958.9 million, which compares with operating earnings of $28.7 million on net sales of $664.1 million for 2009. For the fourth quarter of 2010, operating income was $24.1 million on net sales of $239.9 million, which compares with operating income of $10.4 million on net sales of $204.2 million in the fourth quarter of 2009. The fourth quarter of 2009 included non-cash impairment charges totaling $10.3 million that reduced operating earnings.
- "Our current ratio was 4.7 to 1 and our working capital was $717.2 million, of which almost $400 million was cash on hand, equal to $10.41 per share.
- "As of year end, our financial leverage was modest with a debt to total capitalization ratio of 18.9 percent.
- "Stockholders' equity was $788.7 million which equates to a book value of $20.84 per share.
- "Capital expenditures during 2010 totaled $18.7 million. We expect to increase our funding of capital expenditures in 2011 due to operating improvement opportunities."
Business Outlook for 2011
Regarding the outlook for 2011, Mr. Karp said, "Overall, we are positive about Mueller's business outlook for 2011. We have weathered two difficult years and have remained solidly profitable while gaining in financial strength.
"We do not underestimate the challenges. We recognize that the residential construction industry continues to struggle, as job growth remains sluggish while home prices have declined. However, on the positive side, the U.S. economy is growing again, mortgage rates are low, and consumer confidence has improved. On balance, we believe housing starts will commence rising in 2011.
"The private non-residential construction sector, which includes offices, industrial and retail projects, declined by almost 25 percent in 2010 and over 15 percent in 2009. This market is likely at or near a bottom, and we anticipate better times ahead. All in all, we expect that most of the conditions that affect our businesses will gradually improve as 2011 progresses."
Mueller Industries, Inc. is a leading manufacturer of copper tube and fittings; brass and copper alloy rod, bar and shapes; aluminum and brass forgings; aluminum and copper impact extrusions; plastic fittings and valves; refrigeration valves and fittings; and fabricated tubular products. Mueller's operations are located throughout the United States and in Canada, Mexico, Great Britain, and China. Mueller's business is importantly linked to: (1) the construction of new homes; (2) the improvement and reconditioning of existing homes and structures; and (3) the commercial construction market which includes office buildings, factories, hotels, hospitals, etc.
***************************** | |
Statements in this release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties. These include economic and currency conditions, continued availability of raw materials and energy, market demand, pricing, competitive and technological factors, and the availability of financing, among others, as set forth in the Company's SEC filings. The words "outlook," "estimate," "project," "intend," "expect," "believe," "target," and similar expressions are intended to identify forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report. The Company has no obligation to publicly update or revise any forward-looking statements to reflect events after the date of this report.
MUELLER INDUSTRIES, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(In thousands, except per share data) | ||||||||
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
| For the Quarter Ended |
| For the Year Ended | |||||
|
| December 25, |
| December 26, |
| December 25, |
| December 26, | |
|
| 2010 |
| 2009 |
| 2010 |
| 2009 | |
|
| (Unaudited) |
| (Unaudited) | |||||
|
|
|
|
|
|
|
|
| |
Net sales | $ 526,901 |
| $ 432,977 |
| $ 2,059,797 |
| $ 1,547,225 | |
|
|
|
|
|
|
|
|
| |
Cost of goods sold | 457,521 |
| 372,247 |
| 1,774,811 |
| 1,327,022 | |
Depreciation and amortization | 9,992 |
| 10,292 |
| 40,364 |
| 41,568 | |
Selling, general, and administrative expense | 31,610 |
| 27,593 |
| 131,211 |
| 116,660 | |
Insurance settlements | (1,452) |
| - |
| (22,736) |
| - | |
Impairment charges | - |
| 29,755 |
| - |
| 29,755 | |
|
|
|
|
|
|
|
|
| |
Operating income (loss) | 29,230 |
| (6,910) |
| 136,147 |
| 32,220 | |
|
|
|
|
|
|
|
|
| |
Interest expense | (3,079) |
| (2,410) |
| (11,647) |
| (9,963) | |
Other (expense) income, net | (302) |
| 184 |
| (2,650) |
| 872 | |
|
|
|
|
|
|
|
|
| |
Income (loss) before income taxes | 25,849 |
| (9,136) |
| 121,850 |
| 23,129 | |
Income tax expense | (7,897) |
| (7,996) |
| (34,315) |
| (17,792) | |
|
|
|
|
|
|
|
|
| |
Consolidated net income (loss) | 17,952 |
| (17,132) |
| 87,535 |
| 5,337 | |
|
|
|
|
|
|
|
|
| |
Less net income attributable to noncontrolling interest | (206) |
| (395) |
| (1,364) |
| (662) | |
|
|
|
|
|
|
|
|
| |
Net income (loss) attributable to Mueller Industries, Inc. | $ 17,746 |
| $ (17,527) |
| $ 86,171 |
| $ 4,675 | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Weighted average shares |
|
|
|
|
|
|
| |
for basic earnings (loss) per share | 37,717 |
| 37,584 |
| 37,672 |
| 37,336 | |
Effect of dilutive stock options | 157 |
| - |
| 97 |
| 88 | |
|
|
|
|
|
|
|
|
| |
Adjusted weighted average shares |
|
|
|
|
|
|
| |
for diluted earnings (loss) per share | 37,874 |
| 37,584 |
| 37,769 |
| 37,424 | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Basic earnings (loss) per share | $ 0.47 |
| $ (0.47) |
| $ 2.29 |
| $ 0.13 | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Diluted earnings (loss) per share | $ 0.47 |
| $ (0.47) |
| $ 2.28 |
| $ 0.12 | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Dividends per share | $ 0.10 |
| $ 0.10 |
| $ 0.40 |
| $ 0.40 | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Summary Segment Data: |
|
|
|
|
|
|
| |
Net sales: |
|
|
|
|
|
|
| |
Plumbing & Refrigeration segment | $ 290,500 |
| $ 231,036 |
| $ 1,115,614 |
| $ 892,071 | |
OEM segment | 239,890 |
| 204,190 |
| 958,855 |
| 664,088 | |
Elimination of intersegment sales | (3,489) |
| (2,249) |
| (14,672) |
| (8,934) | |
|
|
|
|
|
|
|
|
| |
Net sales | $ 526,901 |
| $ 432,977 |
| $ 2,059,797 |
| $ 1,547,225 | |
|
|
|
|
|
|
|
|
| |
Operating income (loss): |
|
|
|
|
|
|
| |
Plumbing & Refrigeration segment | $ 11,957 |
| $ (11,156) |
| $ 83,667 |
| $ 27,043 | |
OEM segment | 24,060 |
| 10,410 |
| 80,117 |
| 28,725 | |
Unallocated expenses | (6,787) |
| (6,164) |
| (27,637) |
| (23,548) | |
|
|
|
|
|
|
|
|
| |
Operating income (loss) | $ 29,230 |
| $ (6,910) |
| $ 136,147 |
| $ 32,220 | |
MUELLER INDUSTRIES, INC. | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(In thousands) | ||||
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
| December 25, |
| December 26, | |
|
| 2010 |
| 2009 | |
|
| (Unaudited) | |||
ASSETS |
|
|
| |
Cash and cash equivalents | $ 394,139 |
| $ 346,001 | |
Accounts receivable, net | 269,258 |
| 228,739 | |
Inventories | 209,892 |
| 191,262 | |
Other current assets | 39,025 |
| 42,841 | |
Total current assets | 912,314 |
| 808,843 | |
|
|
|
|
| |
Property, plant, and equipment, net | 229,498 |
| 250,395 | |
Other assets | 117,184 |
| 120,903 | |
|
|
|
|
| |
|
| $ 1,258,996 |
| $ 1,180,141 | |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
| |
Current portion of long-term debt | $ 32,020 |
| $ 24,325 | |
Accounts payable | 67,849 |
| 73,837 | |
Other current liabilities | 95,258 |
| 85,208 | |
Total current liabilities | 195,127 |
| 183,370 | |
|
|
|
|
| |
Long-term debt | 158,226 |
| 158,226 | |
Pension and postretirement liabilities | 40,939 |
| 44,320 | |
Environmental reserves | 23,902 |
| 23,268 | |
Deferred income taxes | 24,081 |
| 31,128 | |
Other noncurrent liabilities | 824 |
| 887 | |
|
|
|
|
| |
Total liabilities | 443,099 |
| 441,199 | |
|
|
|
|
| |
Total Mueller Industries, Inc. stockholders' equity | 788,736 |
| 713,167 | |
Noncontrolling interest | 27,161 |
| 25,775 | |
|
|
|
|
| |
Total equity | 815,897 |
| 738,942 | |
|
|
|
|
| |
|
| $ 1,258,996 |
| $ 1,180,141 | |
MUELLER INDUSTRIES, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
|
|
|
|
|
|
|
| |
|
|
|
|
| For the Year Ended | |||
|
|
|
|
| December 25, |
| December 26, | |
|
|
|
|
| 2010 |
| 2009 | |
|
|
|
|
| (Unaudited) | |||
Operating activities: |
|
|
| ||||
Consolidated net income | $ 87,535 |
| $ 5,337 | ||||
Reconciliation of consolidated net income |
|
|
| ||||
|
| to net cash provided by operating activities: |
|
|
| |||
|
|
| Depreciation and amortization | 40,652 |
| 41,758 | ||
|
|
| Stock-based compensation expense | 2,877 |
| 2,633 | ||
|
|
| Insurance settlements | (22,736) |
| - | ||
|
|
| Insurance proceeds - noncapital related | 5,561 |
| 7,338 | ||
|
|
| Loss on disposal of properties | 756 |
| 683 | ||
|
|
| Deferred income taxes | (6,627) |
| (2,554) | ||
|
|
| Income tax benefit from exercise of stock options | (145) |
| (203) | ||
|
|
| Impairment charges | - |
| 29,755 | ||
|
|
| Gain on early retirement of debt | - |
| (128) | ||
|
|
| Changes in assets and liabilities, net of business acquired: |
|
|
| ||
|
|
|
| Receivables | (41,731) |
| (6,482) | |
|
|
|
| Inventories | (17,248) |
| 22,699 | |
|
|
|
| Other assets | 2,974 |
| (505) | |
|
|
|
| Current liabilities | 4,913 |
| (21,161) | |
|
|
|
| Other liabilities | (623) |
| (1,808) | |
|
|
|
| Other, net | 199 |
| 26 | |
|
|
|
|
|
|
|
| |
Net cash provided by operating activities | 56,357 |
| 77,388 | ||||
|
|
|
|
|
|
|
| |
Investing activities: |
|
|
| ||||
Capital expenditures | (18,678) |
| (13,942) | ||||
Business acquired | (2,021) |
| - | ||||
Insurance proceeds for property and equipment | 18,798 |
| - | ||||
Net (deposits in) withdrawals from restricted cash balances | (156) |
| 7,013 | ||||
Proceeds from sales of properties | 71 |
| 611 | ||||
|
|
|
|
|
|
|
| |
Net cash used in investing activities | (1,986) |
| (6,318) | ||||
|
|
|
|
|
|
|
| |
Financing activities: |
|
|
| ||||
Dividends paid |
| (15,074) |
| (14,944) | |||
Repayment of debt by joint venture, net | 6,848 |
| 131 | ||||
Repayments of long-term debt | - |
| (370) | ||||
Dividends paid to noncontrolling interest | (741) |
| (1,449) | ||||
Acquisition of treasury stock | (418) |
| (870) | ||||
Issuance of shares under incentive stock option plans |
|
|
| ||||
|
| from treasury | 2,846 |
| 9,145 | |||
Income tax benefit from exercise of stock options | 145 |
| 203 | ||||
|
|
|
|
|
|
|
| |
Net cash used in financing activities | (6,394) |
| (8,154) | ||||
|
|
|
|
|
|
|
| |
Effect of exchange rate changes on cash | 161 |
| 4,225 | ||||
|
|
|
|
|
|
|
| |
Increase in cash and cash equivalents | 48,138 |
| 67,141 | ||||
|
|
|
|
|
|
|
| |
Cash and cash equivalents at the beginning of the period | 346,001 |
| 278,860 | ||||
|
|
|
|
|
|
|
| |
Cash and cash equivalents at the end of the period | $ 394,139 |
| $ 346,001 | ||||
MUELLER INDUSTRIES, INC. | ||||||
RECONCILIATION OF NET INCOME (LOSS) AS REPORTED TO NET INCOME | ||||||
BEFORE INSURANCE SETTLEMENT AND IMPAIRMENT CHARGES | ||||||
(In thousands, except per share data) | ||||||
|
|
|
|
|
|
| |
Earnings without insurance settlement and impairment charges is a measurement not derived in accordance with generally accepted accounting principles (GAAP). Excluding the insurance settlement and impairment charges is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business. The insurance settlement resulted from reimbursement for losses claimed as a result of a fire at our Fulton, Mississippi copper tube mill in July 2009, the results of which are not impacted by daily operations and are not expected to recur in future periods. Impairments reflect the impact of long-term decisions and investments that were made in prior periods. Reconciliation of earnings without insurance settlement and impairment charges to net income as reported is as follows: | ||||||
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
| For the Quarter Ended December 25, 2010 | |||||
|
|
|
|
|
| Pro forma | |
|
|
|
| Impact of |
| Without | |
|
| As |
| Insurance |
| Insurance | |
|
| Reported |
| Settlement |
| Settlement | |
|
| (Unaudited) | |||||
|
|
|
|
|
|
| |
Operating income | $ 29,230 |
| $ (1,452) |
| $ 27,778 | |
|
|
|
|
|
|
| |
Interest expense | (3,079) |
| - |
| (3,079) | |
Other expense, net | (302) |
| - |
| (302) | |
|
|
|
|
|
|
| |
Income before income taxes | 25,849 |
| (1,452) |
| 24,397 | |
Income tax expense | (7,897) |
| 555 |
| (7,342) | |
|
|
|
|
|
|
| |
Consolidated net income | 17,952 |
| (897) |
| 17,055 | |
|
|
|
|
|
|
| |
Less net income attributable to noncontrolling interest | (206) |
| - |
| (206) | |
|
|
|
|
|
|
| |
Net income attributable to Mueller Industries, Inc. | $ 17,746 |
| $ (897) |
| $ 16,849 | |
|
|
|
|
|
|
| |
Diluted earnings per share | $ 0.47 |
| $ (0.02) |
| $ 0.45 | |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
| For the Quarter Ended December 26, 2009 | |||||
|
|
|
|
|
| Pro forma | |
|
|
|
| Impact of |
| Without | |
|
| As |
| Impairment |
| Impairment | |
|
| Reported |
| Charges |
| Charges | |
|
| (Unaudited) | |||||
|
|
|
|
|
|
| |
Operating (loss) income | $ (6,910) |
| $ 29,755 |
| $ 22,845 | |
|
|
|
|
|
|
| |
Interest expense | (2,410) |
| - |
| (2,410) | |
Other income, net | 184 |
| - |
| 184 | |
|
|
|
|
|
|
| |
(Loss) income before income taxes | (9,136) |
| 29,755 |
| 20,619 | |
Income tax expense | (7,996) |
| (1,807) |
| (9,803) | |
|
|
|
|
|
|
| |
Consolidated net (loss) income | (17,132) |
| 27,948 |
| 10,816 | |
|
|
|
|
|
|
| |
Less net income attributable to noncontrolling interest | (395) |
| - |
| (395) | |
|
|
|
|
|
|
| |
Net (loss) income attributable to Mueller Industries, Inc. | $ (17,527) |
| $ 27,948 |
| $ 10,421 | |
|
|
|
|
|
|
| |
Diluted (loss) earnings per share | $ (0.47) |
| $ 0.74 |
| $ 0.27 | |
MUELLER INDUSTRIES, INC. | ||||||
RECONCILIATION OF NET INCOME AS REPORTED TO NET INCOME | ||||||
BEFORE INSURANCE SETTLEMENTS AND IMPAIRMENT CHARGES | ||||||
(In thousands, except per share data) | ||||||
|
|
|
|
|
|
| |
Earnings without insurance settlements and impairment charges is a measurement not derived in accordance with generally accepted accounting principles (GAAP). Excluding the insurance settlements and impairment charges is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business. The insurance settlements resulted from reimbursement for losses claimed as a result of fires at our U.K. copper tube mill in November 2008, and our Fulton, Mississippi copper tube mill in July 2009, the results of which are not impacted by daily operations and are not expected to recur in future periods. Impairments reflect the impact of long-term decisions and investments that were made in prior periods. Reconciliation of earnings without insurance settlements and impairment charges to net income as reported is as follows: | ||||||
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
| For the Year Ended December 25, 2010 | |||||
|
|
|
|
|
| Pro forma | |
|
|
|
| Impact of |
| Without | |
|
| As |
| Insurance |
| Insurance | |
|
| Reported |
| Settlements (A) |
| Settlements | |
|
| (Unaudited) | |||||
|
|
|
|
|
|
| |
Operating income | $ 136,147 |
| $ (22,736) |
| $ 113,411 | |
|
|
|
|
|
|
| |
Interest expense | (11,647) |
| - |
| (11,647) | |
Other expense, net | (2,650) |
| - |
| (2,650) | |
|
|
|
|
|
|
| |
Income before income taxes | 121,850 |
| (22,736) |
| 99,114 | |
Income tax expense | (34,315) |
| (535) |
| (34,850) | |
|
|
|
|
|
|
| |
Consolidated net income | 87,535 |
| (23,271) |
| 64,264 | |
|
|
|
|
|
|
| |
Less net income attributable to noncontrolling interest | (1,364) |
| - |
| (1,364) | |
|
|
|
|
|
|
| |
Net income attributable to Mueller Industries, Inc. | $ 86,171 |
| $ (23,271) |
| $ 62,900 | |
|
|
|
|
|
|
| |
Diluted earnings per share | $ 2.28 |
| $ (0.62) |
| $ 1.66 | |
|
|
|
|
|
|
| |
(A) Realization of this insurance settlement resulted in a tax benefit primarily from the utilization of U.K. net operating losses that were previously reserved. |
| |||||
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
| For the Year Ended December 26, 2009 | |||||
|
|
|
|
|
| Pro forma | |
|
|
|
| Impact of |
| Without | |
|
| As |
| Impairment |
| Impairment | |
|
| Reported |
| Charges |
| Charges | |
|
| (Unaudited) | |||||
|
|
|
|
|
|
| |
Operating income | $ 32,220 |
| $ 29,755 |
| $ 61,975 | |
|
|
|
|
|
|
| |
Interest expense | (9,963) |
| - |
| (9,963) | |
Other expense, net | 872 |
| - |
| 872 | |
|
|
|
|
|
|
| |
Income before income taxes | 23,129 |
| 29,755 |
| 52,884 | |
Income tax expense | (17,792) |
| (1,807) |
| (19,599) | |
|
|
|
|
|
|
| |
Consolidated net income | 5,337 |
| 27,948 |
| 33,285 | |
|
|
|
|
|
|
| |
Less net income attributable to noncontrolling interest | (662) |
| - |
| (662) | |
|
|
|
|
|
|
| |
Net income attributable to Mueller Industries, Inc. | $ 4,675 |
| $ 27,948 |
| $ 32,623 | |
|
|
|
|
|
|
| |
Diluted earnings per share | $ 0.12 |
| $ 0.75 |
| $ 0.87 | |
CONTACT: Kent A. McKee, +1-901-753-3208