Mueller Industries, Inc. Reports Third Quarter Results

MEMPHIS, Tenn., Oct. 23, 2012

Quarterly and Year-to-Date Earnings

Mueller Industries, Inc. (NYSE: MLI), announced today that net income in the third quarter was $15.5 million, or 41 cents per diluted share, on net sales of $514.2 million.  This compares with net income of $10.5 million, or 27 cents per diluted share, on net sales of $585.8 million in the third quarter of 2011.

Year-to-date, the Company earned $66.0 million, or $1.72 per diluted share.  For the same period of 2011, net income was $73.4 million, or $1.92 per diluted share, which includes a favorable litigation settlement gain of 18 cents per diluted share.  Net sales for the first nine months of 2012 were $1.69 billion compared with net sales of $1.93 billion for the same period a year ago.   

In the third quarter, the Company repurchased 10,422,859 shares of its outstanding common stock for an aggregate purchase price of $427.4 million, or $41.00 per share.  As of the end of the third quarter, the total common stock outstanding was 27,970,180 shares (excluding dilutive equity awards).  The privately negotiated transaction significantly reduced the outstanding shares which should result in significant accretion to earnings per share in future periods.  On a pro forma basis (assuming the repurchase occurred at the beginning of the period), net income for the third quarter of 2012 would have been 51 cents per diluted share.

Financial and Operating Highlights

• The net sales decrease of $71.6 million was primarily due to lower selling prices. The average price of copper, the principal raw material of the Company, was $3.53 per pound in the third quarter of 2012, which compares with $4.07 per pound in the third quarter of 2011.
• The Plumbing & Refrigeration segment posted operating earnings of $17.6 million on net sales of $297.9 million compared with operating earnings of $13.9 million on net sales of $325.8 million in the third quarter of 2011.  The decrease in net sales was primarily due to lower selling prices.   
• The OEM segment posted operating earnings of $14.4 million during the third quarter of 2012 on net sales of $221.5 million, which compared with operating earnings of $12.2 million on net sales of $266.6 million for the same period in 2011.  The decrease in net sales was attributable to lower selling prices on 6.9 percent lower unit volumes.    
• The Company's total equity and cash balance decreased due to the share repurchase transaction noted above.  At the end of the third quarter, cash was $165.8 million and total stockholders' equity was $495.0 million.
• The ratio of debt to total capitalization was 29.5 percent at the end of the third quarter of 2012.  The increased leverage was due primarily to the borrowings under the Company's credit facility related to the share repurchase transaction.
• As of the end of the third quarter, the current ratio was 3.3 to 1.

Business Outlook