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Mueller Industries Inc. Reports Operating Results (10-Q)

October 26, 2012 | About:
10qk

10qk

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Mueller Industries Inc. (MLI) filed Quarterly Report for the period ended 2012-09-29.

Mueller Industries Inc has a market cap of $1.95 billion; its shares were traded at around $45.8 with a P/E ratio of 26.9 and P/S ratio of 0.8. The dividend yield of Mueller Industries Inc stocks is 0.8%. Mueller Industries Inc had an annual average earning growth of 0.7% over the past 10 years.
This is the annual revenues and earnings per share of MLI over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of MLI.


Highlight of Business Operations:

During the nine months ended September 29, 2012, the Company s net sales were $1.69 billion, which compares with net sales of $1.93 billion over the same period of 2011. The decrease was primarily attributable to decreased selling prices, which are a result of the decrease in base metal prices, primarily copper, and lower unit sales volume in most of the Company s core product lines. Of the $240.5 million decrease in net sales, approximately $153.6 million was due to lower net selling prices in the Company s core product lines and approximately $79.2 million was attributable to lower unit volume in the Company s core product lines. The Comex average copper price in the first nine months of 2012 was approximately $3.62 per pound, or 14 percent lower than the 2011 average of $4.20 per pound.

Cost of goods sold was $1.47 billion in the first nine months of 2012 compared with $1.69 billion in the same period of 2011. The year-over-year decrease was due primarily to the decrease in the cost of copper, the Company s principal raw material, and decreased sales volume in core product lines. During the nine months ended October 1, 2011, the Company recorded provisions of approximately $6.8 million to write-down certain inventories valued using the FIFO and average cost methods to the lower-of-cost-or-market.

Net sales by the Plumbing & Refrigeration segment decreased 10 percent to $945.0 million in the nine months ended September 29, 2012, from $1.05 billion in 2011. Of the $108.5 million decrease in net sales, approximately $91.3 million was due to lower net selling prices in the segment s core product lines consisting primarily of copper tube, line sets, and fittings, and approximately $17.1 million was attributable to lower unit volume. Cost of goods sold decreased from $904.5 million in the first nine months of 2011 to $808.6 million in the same period of 2012, which was also due to decreasing raw material costs, primarily copper and to lower sales volume. During the nine months ended October 1, 2011, the Company recorded provisions of approximately $3.5 million to write-down certain inventories valued using the FIFO and average cost methods to the lower-of-cost-or-market. Depreciation and amortization decreased from $16.0 million in 2011 to $12.3 million in 2012 resulting from certain assets becoming fully depreciated. Selling, general, and administrative expenses decreased $7.5 million primarily due to decreased compensation including incentive compensation of $4.7 million, foreign currency transaction gains of $1.2 million, and professional fees of $600 thousand. Operating income for the segment remained consistent at $68.4 million in the first nine months of 2012 and 2011.

The OEM segment s net sales were $761.0 million for the nine months ended September 29, 2012, compared with $900.0 million in 2011. Of the $139.0 million decrease in net sales, approximately $62.2 million was attributable to lower net selling prices in the segment s core product lines of brass rod, forgings, impacts, and commercial tube and approximately $62.1 million was due to lower unit volume. Cost of goods sold decreased to $676.6 million in the first nine months of 2012 from $810.0 million in the same period of 2011, which was also due to the decrease in average cost of raw materials and decreases in sales volume. During the nine months ended October 1, 2011, the Company recorded provisions of approximately $3.3 million to write-down certain inventories valued using the FIFO cost method to the lower-of-cost-or-market. Depreciation and amortization in the first nine months of 2012 decreased from $10.6 million in 2011 to $9.9 million in 2012 resulting from certain assets becoming fully depreciated. Selling, general, and administrative expenses were $20.2 million in the first nine months of 2012 compared with $18.8 million in the first nine months of 2011. The $1.4 million increase was due primarily to increased pension expense of $327 thousand, bad debt expense of $770 thousand and foreign currency transactions losses of $233 thousand. Operating income decreased from $60.6 million in the first nine months of 2011 to $54.2 million in the same period of 2012, due primarily to lower spreads.

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