Mueller Industries Inc. Reports Second Quarter 2017 Earnings

Mueller Industries, Inc. Reports Second Quarter 2017 Earnings

MEMPHIS, Tenn., July 25, 2017 -- Mueller Industries, Inc. (NYSE: MLI) announced today operating income of $46.8 million for the second quarter of 2017, compared with $44.4 million in the same quarter last year.  Net income for the period was $27.6 million, or 48 cents per diluted share, on net sales of $614.3 million.  This compares with net income of $27.8 million, or 49 cents per diluted share, on net sales of $544.1 million in the same quarter of 2016.  The increase in net sales was primarily attributable to higher selling prices and higher overall unit volumes.

Financial and Operating Highlights for the second quarter of 2017:

• The average price of copper was 21 percent (45 cents per pound) higher compared with the same period of 2016.
• During the quarter, Mueller sold its 50.5% share of the MXR China tube mill.  The gain from the sale was more than offset by one-time expenses related to startup costs at the Cedar City, Utah tube mill and the press relocation to the Fulton, Mississippi tube mill.
• Interest expense for the quarter was $6.4 million compared with $1.7 million in the same quarter of 2016.  The increase was primarily due to interest on the Company's 6% Subordinated Debentures distributed on March 9, 2017 as part of a special dividend. 
• At quarter end, cash totaled $167.6 million.

Regarding the outlook, Greg Christopher, Mueller CEO, said, "Business conditions in the markets we serve are on track with our expectations for 2017.  Construction activity in the U.S. continues to provide steady demand for many of our products, and improvement in industrial demand after several years of softness is encouraging."

In addition, Mr. Christopher commented, "On May 31, 2017, we acquired the PexCor and HeatLink companies, which support our strategy to grow in the area of pressure plastic piping systems.  Further, on June 21, 2017, we made a strategic decision to exit our joint venture in China after years of mediocre performance and increasingly challenging business conditions.  We believe that reallocating cash and resources to other initiatives, such as the plastic acquisition and our new mills in Bahrain and Utah, will provide better returns in the future."

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 Six Months Ended
(In thousands, except per share data)	July 1, 2017				July 2, 2016				July 1, 2017				July 2, 2016
Net sales	$	614,266			$	544,071			$	1,192,186			$	1,076,880
Cost of goods sold	524,311				456,060				1,012,738				902,702
Depreciation and amortization	8,595				9,061				16,950				17,981
Selling, general, and administrative expense	34,557				34,514				70,088				70,294
Operating income	46,803				44,436				92,410				85,903
Interest expense	(6,442		)		(1,692		)		(8,973		)		(3,540		)
Other income, net	231				515				782				760
Income before income taxes	40,592				43,259				84,219				83,123
Income tax expense	(12,650		)		(14,005		)		(24,579		)		(28,126		)
(Loss) income from unconsolidated affiliates, net of tax	(109		)		(995		)		(1,352		)		1,927
Consolidated net income	27,833				28,259				58,288				56,924
Net income attributable to noncontrolling interests	(200		)		(462		)		(668		)		(497		)
Net income attributable to Mueller Industries, Inc.	$	27,633			$	27,797			$	57,620			$	56,427
Weighted average shares for basic earnings per share	56,906				56,511				56,843				56,489
Effect of dilutive stock-based awards	511				418				585				456
Adjusted weighted average shares for diluted earnings per share	57,417				56,929				57,428				56,945
Basic earnings per share	$	0.49			$	0.49			$	1.01			$	1.00
Diluted earnings per share	$	0.48			$	0.49			$	1.00			$	0.99
Dividends per share	$	0.100			$	0.100			$	8.200			$	0.175
Summary Segment Data:
Net sales:
Piping Systems Segment	$	422,844			$	388,662			$	821,619			$	757,552
Industrial Metals Segment	154,504				127,737				304,341				262,258
Climate Segment	36,636				31,359				70,915				62,065
Elimination of intersegment sales	282				(3,687		)		(4,689		)		(4,995		)
Net sales	$	614,266			$	544,071			$	1,192,186			$	1,076,880
Operating income:
Piping Systems Segment	$	34,582			$	32,959			$	64,948			$	64,118
Industrial Metals Segment	16,764				17,124				37,430				37,036
Climate Segment	6,116				5,837				11,726				9,716
Unallocated expenses	(10,659		)		(11,484		)		(21,694		)		(24,967		)
Operating income	$	46,803			$	44,436			$	92,410			$	85,903

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

(In thousands)	July 1,  2017				December 31, 2016
ASSETS
Cash and cash equivalents	$	167,555			$	351,317
Accounts receivable, net	287,829				256,291
Inventories	252,799				242,013
Other current assets	35,568				44,702
Total current assets	743,751				894,323
Property, plant, and equipment, net	284,594				295,231
Other assets	268,919				257,922
	$	1,297,264			$	1,447,476
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of debt	$	14,583			$	13,655
Accounts payable	105,880				103,175
Other current liabilities	98,735				102,162
Total current liabilities	219,198				218,992
Long-term debt	489,043				213,709
Pension and postretirement liabilities	31,616				31,273
Environmental reserves	20,859				21,208
Deferred income taxes	19,351				19,573
Other noncurrent liabilities	11,191				6,284
Total liabilities	791,258				511,039
Total Mueller Industries, Inc. stockholders' equity	493,371				898,684
Noncontrolling interests	12,635				37,753
Total equity	506,006				936,437
	$	1,297,264			$	1,447,476

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

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