Mueller Industries, Inc. Reports Fourth Quarter And Fiscal 2009 Results

MEMPHIS, Tenn., Feb. 2 /PRNewswire-FirstCall/ -- Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI), announced today that Mueller recognized non-cash impairment charges that, in aggregate, decreased pre-tax income by $29.8 million, and net income by 74 cents per diluted share for the fourth quarter of 2009.  Primarily, the impairment charges reduce the carrying value of goodwill.  The impairment charges resulted in a net loss for the fourth quarter of 2009 of $17.5 million, or 47 cents per diluted share.  Without the impairment charges, the Company's net earnings for the fourth quarter would have been $10.4 million, or 28 cents per diluted share.  

For the fiscal year ended December 26, 2009, Mueller earned $4.7 million, or 12 cents per diluted share.  For fiscal 2008, the Company earned $80.8 million, or $2.17 per diluted share.  Net sales for 2009 were $1.55 billion compared with $2.56 billion in 2008.  

Financial and Operating Highlights

Mr. Karp said:

• "The decrease in net sales in 2009 was primarily due to lower unit shipments as well as the lower average cost of copper, the Company's principal raw material, which is generally passed through to customers by changes in selling prices.  
• "For the full year, our Plumbing & Refrigeration segment posted operating earnings of $27.0 million on net sales of $892.1 million, which compares with operating earnings of $106.8 million on net sales of $1.40 billion in 2008.  During the fourth quarter of 2009, non-cash impairment charges totaling $19.5 million reduced operating earnings.  
• "Our OEM segment posted operating earnings of $28.7 million during 2009 on net sales of $664.1 million, which compares with operating earnings of $45.3 million on net sales of $1.18 billion for 2008.  During the fourth quarter of 2009, non-cash impairment charges totaling $10.3 million reduced operating earnings.    
• "Cash provided by operating activities was $77.4 million in 2009 compared with $180.9 million during 2008.  Our focus on cash flow continues to be a bedrock characteristic of our management.
• "Our current ratio was 4.4 to 1 and our working capital was $625.5 million, of which $346.0 million was cash on hand, equal to $9.19 per share.
• "As of year end, our financial leverage was modest with a debt to total capitalization ratio of less than 20 percent.  Our financial position is strong.  If we repaid all outstanding indebtedness, we would still have in excess of $150 million in cash.
• "Stockholders' equity was $713.2 million which equates to a book value per share of $18.94.
• "Capital expenditures during 2009 totaled $13.9 million.  Capital expenditures will likely rise in 2010."

Business Outlook for 2010

Regarding the outlook for 2010, Mr. Karp said, "The recovery of the U.S. economy appears to be well underway.  We believe the residential construction sector has hit bottom and is moving up, after almost four years of deep declines.  We expect the recovery in residential construction to be modest due to the continuing high rates of unemployment, the impact of mounting foreclosures, the tightening of lending terms and the phase out of governmental stimulus spending.  Even so, housing starts are likely to rise more than 20 percent in 2010 to 700,000 units, up from the extraordinarily low 550,000 units started in 2009.