Mueller Industries, Inc. Reports Fourth Quarter and Fiscal 2016 Earnings

MEMPHIS, Tenn., February 7, 2017 -- Mueller Industries, Inc. (NYSE: MLI) announced today that net income for the fourth quarter ending December 31, 2016 was $17.3 million, or 30 cents per diluted share compared with net income of $14.4 million, or 25 cents per diluted share in 2015.  Net sales for the fourth quarter were $472.2 million compared with $472.0 million in the same quarter in 2015.

On a full year basis net income was $99.7 million, or $1.74 per diluted share on net sales of $2.1 billion, compared with net income of $87.9 million, or $1.54 per diluted share on net sales of $2.1 billion for 2015. 

Financial and operating highlights for the fourth quarter:

• The average comex copper price rose 8.6 percent, or 19 cents per pound versus the same period in 2015.  This resulted in an increase in net sales during the quarter of $19.2 million from higher selling prices, which was largely offset by the impact of translating net sales of the Company's foreign operations to U.S. dollars.
• The Company recognized a pre-tax impairment charge of $3.8 million related to certain manufacturing assets.  
• The results include a net loss of $1.2 million from Tecumseh Products, Co., an unconsolidated affiliate.
• The Company ended the year with $351.3 million of cash on hand or $6.12 per share.
• At year end debt to total capitalization was 19.5 percent and the current ratio was 4.1 to 1. 

On January 4, 2017, the Company announced a special dividend of $8.00 per share.  The distribution, payable on March 9, 2017, will return to the Company's stockholders significant value that has accumulated from recent years' operations.

Regarding the outlook, Greg Christopher, CEO of Mueller Industries said, "As we turn the corner to 2017 we are well positioned for growth.  Of particular importance are the benefits we began to realize in the fourth quarter in our brass rod business from the completion of our multi-year modernization investment.  This investment positions us well for the recovery of the industrial markets.

He added, "The new administration seems resolute in growing the economy by increasing manufacturing jobs and rebuilding our nation's infrastructure.  This should bode well for overall growth in the U.S. GDP, and in particular should help maintain the positive momentum in the building construction markets.  On the international front, demand remained weak in the fourth quarter and the strengthening of the dollar had an adverse translation effect on our earnings.  We anticipate that conditions in our international markets will improve over time."

Mueller Industries, Inc. is an industrial manufacturer that specializes in copper and copper alloy manufacturing while also producing goods made from aluminum, steel, and plastics.  It is headquartered in Memphis, Tennessee and comprises a network of operations in the United States, Canada, Mexico, Great Britain, South Korea, and China.  Its products include tubing, fittings, valves, vessels, and related items for plumbing and HVACR related piping systems, as well as rod, forgings, extrusions, and various components for OEM applications.  Products are distributed into sectors such as building construction, appliance, defense, energy, and automotive.

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," "encourage," "anticipate," "appear," 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 Year Ended
(In thousands, except per share data)		December 31, 2016				December 26, 2015				December 31, 2016				December 26, 2015
Net sales		$	472,158			$	471,983			$	2,055,622			$	2,100,002
Cost of goods sold			396,129				411,336				1,723,499				1,809,702
Depreciation and amortization			8,136				9,818				35,133				34,608
Selling, general, and administrative expense			34,792				31,866				137,499				130,358
Impairment charges			3,778				-				6,778				-
Gain on sale of assets			-				-				-				(15,376	)
Severance			-				-				-				3,442
Operating income			29,323				18,963				152,713				137,268
Interest expense			(2,017	)			(1,690	)			(7,387	)			(7,667	)
Other (expense) income, net			(176	)			1,654				704				2,188
Income before income taxes			27,130				18,927				146,030				131,789
Income tax expense			(9,174	)			(7,008	)			(48,137	)			(43,382	)
(Loss) income from unconsolidated affiliates, net of tax			(1,188	)			2,191				1,861				-
Consolidated net income			16,768				14,110				99,754				88,407
Net loss (income) attributable to noncontrolling interests			554				325				(27	)			(543	)
Net income attributable to Mueller              Industries, Inc.		$	17,322			$	14,435			$	99,727			$	87,864
Weighted average shares for                                basic earnings per share			56,680				56,450				56,572				56,316
Effect of dilutive stock-based awards			620				537				597				652
Adjusted weighted average shares for diluted earnings per share			57,300				56,987				57,169				56,968
Basic earnings per share		$	0.31			$	0.26			$	1.76			$	1.56
Diluted earnings per share		$	0.30			$	0.25			$	1.74			$	1.54
Dividends per share		$	0.100			$	0.075			$	0.375			$	0.300
Summary Segment Data:
Net sales:
Piping Systems		$	320,480			$	327,565			$	1,429,589			$	1,436,689
Industrial Metals			127,452				131,731				521,060				567,467
Climate			27,690				24,924				119,758				110,727
Elimination of intersegment sales			(3,464	)			(12,237	)			(14,785	)			(14,881	)
Net sales		$	472,158			$	471,983			$	2,055,622			$	2,100,002
Operating income:
Piping Systems		$	15,630			$	18,316			$	103,886			$	113,232
Industrial Metals			22,383				8,880				78,168				57,442
Climate			3,193				2,501				17,733				12,459
Unallocated expenses			(11,883	)			(10,734	)			(47,074	)			(45,865	)
Operating income		$	29,323			$	18,963			$	152,713			$	137,268

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

(In thousands)		December 31, 2016				December 26, 2015
ASSETS
Cash and cash equivalents		$	351,317			$	274,844
Accounts receivable, net			256,291				251,571
Inventories			242,013				239,378
Other current assets			44,702				34,608
Total current assets			894,323				800,401
Property, plant, and equipment, net			295,231				280,224
Other assets			257,922				258,176
		$	1,447,476			$	1,338,801
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of debt		$	13,655			$	11,760
Accounts payable			103,175				88,051
Other current liabilities			102,162				109,618
Total current liabilities			218,992				209,429
Long-term debt			213,709				204,250
Pension and postretirement liabilities			31,273				34,876
Environmental reserves			21,208				20,943
Deferred income taxes			19,573				7,161
Other noncurrent liabilities			6,284				2,440
Total liabilities			511,039				479,099
Total Mueller Industries, Inc. stockholders' equity			898,684				827,285
Noncontrolling interests			37,753				32,417
Total equity			936,437				859,702
		$	1,447,476			$	1,338,801

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

		For the Year Ended
(In thousands)		December 31, 2016				December 26, 2015
Cash flows from operating activities
Consolidated net income		$	99,754			$	88,407
Reconciliation of consolidated net income to net cash  provided by operating activities:
Depreciation and amortization			35,702				35,040
Stock-based compensation expense			6,387				6,244
Equity in earnings of unconsolidated affiliates			(1,861	)			-
Gain on disposal of assets			(651	)			(14,815	)
Deferred income taxes			6,998				(15,818	)
Income tax benefit from exercise of stock options			-				(972	)
Impairment charges			6,778				-
Changes in assets and liabilities, net of businesses acquired:
Receivables			(16,552	)			51,530
Inventories			6,662				41,086
Other assets			5,808				12,449
Current liabilities			5,646				(45,585	)
Other liabilities			1,518				436
Other, net			1,588				1,607
Net cash provided by operating activities			157,777				159,609
Cash flows from investing activities
Capital expenditures			(37,497	)			(28,834	)
Acquisition of businesses, net of cash acquired			(20,533	)			(105,944	)
Proceeds from sale of assets, net of cash transferred			10,304				5,538
Investment in unconsolidated affiliates			-				(65,900	)
Net (deposits into) withdrawals from restricted cash balances			(5,331	)			4,333
Net cash used in investing activities			(53,057	)			(190,807	)
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.			(21,224	)			(16,903	)
Dividends paid to noncontrolling interests			(3,765	)			-
Issuance (repayment) of debt by joint venture, net			2,265				(23,567	)
Net cash used to settle stock-based awards			(1,306	)			(760	)
Issuance of long-term debt			3,500				-
Repayments of long-term debt			(1,074	)			(1,000	)
Debt issuance costs			(957	)			-
Income tax benefit from exercise of stock options			-				972
Net cash used in financing activities			(22,561	)			(41,258	)
Effect of exchange rate changes on cash			(5,686	)			(4,834	)
Increase (decrease) in cash and cash equivalents			76,473				(77,290	)
Cash and cash equivalents at the beginning of the period			274,844				352,134
Cash and cash equivalents at the end of the period		$	351,317			$	274,844

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