Mueller Industries, Inc. Reports Second Quarter 2015 Earnings

MEMPHIS, Tenn., July 21, 2015 -- Mueller Industries, Inc. (NYSE: MLI) announced today net income of $33.7 million, or 59 cents per diluted share, for the second quarter of 2015.  This compares to net income of $35.0 million, or 62 cents per diluted share during the second quarter of 2014.  Excluding unusual items, net income from normal operations for the second quarter of 2015 was $26.9 million, or 47 cents per diluted share, compared with $31.6 million, or 56 cents per diluted share for the second quarter of 2014.

Net sales for the second quarter of 2015 were $555.6 million compared with $649.7 million for the same quarter of the prior year.  Approximately $44.1 million of the decline was due to lower unit volumes, $36.6 million was due to lower selling prices as a result of lower copper prices, and $17.7 million of the decrease was due to divestitures of businesses during 2014.

The unit volume decline was largely impacted by an 8.5 percent reduction in shipments from our Copper Tube and Brass Rod businesses.  U.S. Copper Tube was hindered by production shortfalls caused by challenges associated with the commissioning of the new mill equipment that is being installed and Brass Rod felt the impact of increased competition from imports helped by the weakened Euro. 

Financial and Related Highlights for the second quarter:

• The average price of copper was $2.77 per pound in the second quarter of 2015 compared with $3.10 per pound in the second quarter of 2014.
• Results for the second quarter of 2015 include final severance charges of $3.4 million related to the rationalization of the U.K. Copper Tube business acquired in the first quarter of 2014.
• Quarter end cash totaled $299.1 million, or $5.25 per share.
• Debt to total capitalization ratio was 20.9 percent and the current ratio was 4.4 to 1.

Regarding the outlook Greg Christopher, CEO, said, "We are pleased to see the steady improvement in market conditions continuing.  Our major reinvestment projects have hit critical periods where operating our plants and simultaneously installing and commissioning the new processes pose some disruptive stresses but we continue to progress forward."

In addition he added, "During the second quarter of 2015, we made two acquisitions to support our long term growth strategy in the climate control sector.  On March 30, 2015 we acquired Turbotec Products, Inc., a company that specializes in heat transfer technologies for $14.2 million, and on June 18, 2015 we acquired Sherwood Valve, LLC, a manufacturer of valves for the refrigeration and compressed gas markets for approximately $21.8 million."

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 that 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.

CONTACT
Jeffrey A. Martin
(901)753-3226

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		For the Quarter Ended								For the Six Months Ended
(In thousands, except per share data)		June 27, 2015				June 28, 2014				June 27, 2015				June 28, 2014
Net sales		$	555,593			$	649,691			$	1,092,835			$	1,224,065
Cost of goods sold			470,365				557,775				931,199				1,053,552
Depreciation and amortization			8,188				8,592				16,041				16,699
Selling, general, and administrative expense			33,420				33,367				66,251				66,508
Gain on sale of assets			(15,376	)			-				(15,376	)			(1,417	)
Severance			3,442				1,753				3,442				2,212
Operating income			55,554				48,204				91,278				86,511
Interest expense			(2,219	)			(1,457	)			(4,295	)			(2,483	)
Other income, net			265				127				370				215
Income before income taxes			53,600				46,874				87,353				84,243
Income tax expense			(19,738	)			(11,665	)			(31,151	)			(24,080	)
Consolidated net income			33,862				35,209				56,202				60,163
Net income attributable to noncontrolling interest			(211	)			(164	)			(573	)			(412	)
Net income attributable to Mueller Industries, Inc.		$	33,651			$	35,045			$	55,629			$	59,751
Weighted average shares for basic earnings per share			56,247				55,973				56,220				55,946
Effect of dilutive stock-based awards			743				747				737				800
Adjusted weighted average shares for diluted earnings per share			56,990				56,720				56,957				56,746
Basic earnings per share		$	0.60			$	0.63			$	0.99			$	1.07
Diluted earnings per share		$	0.59			$	0.62			$	0.98			$	1.05
Dividends per share		$	0.075			$	0.075			$	0.150			$	0.150
Summary Segment Data:
Net sales:
Plumbing & Refrigeration Segment		$	327,336			$	397,190			$	632,353			$	735,217
OEM Segment			230,380				255,409				465,697				495,439
Elimination of intersegment sales			(2,123	)			(2,908	)			(5,215	)			(6,591	)
Net sales		$	555,593			$	649,691			$	1,092,835			$	1,224,065
Operating income:
Plumbing & Refrigeration Segment		$	35,983			$	32,330			$	55,474			$	56,215
OEM Segment			26,801				23,216				49,349				44,502
Unallocated expenses			(7,230	)			(7,342	)			(13,545	)			(14,206	)
Operating income		$	55,554			$	48,204			$	91,278			$	86,511

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands)		June 27, 2015				December 27, 2014
ASSETS
Cash and cash equivalents		$	299,147			$	352,134
Accounts receivable, net			307,008				275,065
Inventories			278,937				256,585
Other current assets			45,680				57,429
Total current assets			930,772				941,213
Property, plant, and equipment, net			261,149				245,910
Other assets			153,037				140,973
		$	1,344,958			$	1,328,096
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of debt		$	18,014			$	36,194
Accounts payable			89,715				100,735
Other current liabilities			101,772				101,140
Total current liabilities			209,501				238,069
Long-term debt			204,750				205,250
Pension and postretirement liabilities			40,059				41,556
Environmental reserves			21,657				21,842
Deferred income taxes			21,542				24,556
Other noncurrent liabilities			2,790				1,389
Total liabilities			500,299				532,662
Total Mueller Industries, Inc. stockholders' equity			811,200				762,150
Noncontrolling interest			33,459				33,284
Total equity			844,659				795,434
		$	1,344,958			$	1,328,096

MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		For the Six Months Ended
(In thousands)		June 27, 2015				June 28, 2014
Cash flows from operating activities
Consolidated net income		$	56,202			$	60,163
Reconciliation of consolidated net income to net cash provided by (used in) operating activities:
Depreciation and amortization			16,293				16,840
Stock-based compensation expense			2,966				3,526
Gain on disposal of assets			(15,392	)			(1,225	)
Impairment charges			570				-
Deferred income taxes			(1,445	)			(6,523	)
Income tax benefit from exercise of stock options			(146	)			(316	)
Changes in assets and liabilities, net of businesses acquired
Receivables			(24,304	)			(100,413	)
Inventories			(5,252	)			(20,619	)
Other assets			6,963				(8,886	)
Current liabilities			(19,629	)			7,373
Other liabilities			(415	)			(893	)
Other, net			739				92
Net cash provided by (used in) operating activities			17,150				(50,881	)
Cash flows from investing activities
Capital expenditures			(15,969	)			(18,833	)
Businesses acquired, net of cash acquired			(35,978	)			(30,137	)
Net withdrawals from restricted cash balances			3,486				1,815
Proceeds from the sale of assets			5,518				4,874
Net cash used in investing activities			(42,943	)			(42,281	)
Cash flows from financing activities
Repayments of long-term debt			(500	)			(500	)
Dividends paid to stockholders of Mueller Industries, Inc.			(8,435	)			(8,394	)
Issuance of debt			-				22,635
(Repayment) issuance of debt by joint venture, net			(17,750	)			8,903
Net cash received to settle stock-based awards			125				296
Repurchase of common stock			-				(58	)
Income tax benefit from exercise of stock options			146				316
Net cash (used in) provided by financing activities			(26,414	)			23,198
Effect of exchange rate changes on cash			(780	)			363
Decrease in cash and cash equivalents			(52,987	)			(69,601	)
Cash and cash equivalents at the beginning of the period			352,134				311,800
Cash and cash equivalents at the end of the period		$	299,147			$	242,199

MUELLER INDUSTRIES, INC.
Reconciliation of Net Income as Reported to Pro forma without Unusual Items
(Unaudited)

Earnings attributable to normal operations without the gain on sale of assets, severance, and reduction of a valuation allowance is a measurement not derived in accordance with generally accepted accounting principles (GAAP).  Excluding these items is useful as it measures the operating results that are the outcome of daily operating decisions made in the normal course of business.  Reconciliation of earnings attributable to normal operations without these items to net income as reported is as follows:

		For the Quarter Ended June 27, 2015
						Impact of
(In thousands, except per share data)		As Reported				Yorkshire Copper Tube Severance				Gain on Sale of Assets				Pro forma
Operating income		$	55,554			$	3,442			$	(15,376	)		$	43,620
Interest expense			(2,219	)			-				-				(2,219	)
Other income, net			265				-				-				265
Income before income taxes			53,600				3,442				(15,376	)			41,666
Income tax expense			(19,738	)			(697	)			5,905				(14,530	)
Consolidated net income			33,862				2,745				(9,471	)			27,136
Net income attributable to non-controlling interest			(211	)			-				-				(211	)
Net income attributable to Mueller Industries, Inc.		$	33,651			$	2,745			$	(9,471	)		$	26,925
Diluted earnings per share		$	0.59			$	0.05			$	(0.17	)		$	0.47

		For the Quarter Ended June 28, 2014
						Impact of
(In thousands, except per share data)		As Reported				Yorkshire Copper Tube Severance				Reduction of Valuation Allowance				Pro forma
Operating income		$	48,204			$	1,753			$	-			$	49,957
Interest expense			(1,457	)			-				-				(1,457	)
Other income, net			127				-				-				127
Income before income taxes			46,874				1,753				-				48,627
Income tax expense			(11,665	)			(377	)			(4,822	)			(16,864	)
Consolidated net income			35,209				1,376				(4,822	)			31,763
Net income attributable to non-controlling interest			(164	)			-				-				(164	)
Net income attributable to Mueller Industries, Inc.		$	35,045			$	1,376			$	(4,822	)		$	31,599
Diluted earnings per share		$	0.62			$	0.02			$	(0.08	)		$	0.56

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