Mueller Industries Inc. (MLI, Financial) filed Quarterly Report for the period ended 2009-09-26.
Mueller Industries Inc. is a leading manufacturer of copper tube and fittings; brass and copper alloy rod bar and shapes; aluminum and brass forgings; aluminum and copper impact extrusions; plastic fittings and valves; refrigeration valves and fittings; and fabricated tubular products. Mueller's operations are located throughout the United States and in Canada Mexico Great Britain and China. Mueller's business is importantly linked to the construction of new homes; the improvement and reconditioning of existing homes and structures; and the commercial construction market which includes office buildings factories hotels hospitals etc. Mueller Industries Inc. has a market cap of $918.5 million; its shares were traded at around $26.2 with a P/E ratio of 29 and P/S ratio of 0.4. The dividend yield of Mueller Industries Inc. stocks is 1.6%. Mueller Industries Inc. had an annual average earning growth of 3.7% over the past 10 years.
Net sales for the OEM segment declined approximately 39 percent to $181.6 million in the third quarter of 2009 from $299.5 million in the third quarter of 2008. The decrease was due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $117.9 million decrease in net sales, approximately $64.1 million was attributable to lower unit volume and $43.3 million was due to lower selling prices in the segment s core product lines consisting primarily of brass rod, forgings, and commercial tube. Cost of goods sold decreased from $279.7 million in the third quarter 2008 to $156.4 million in the third quarter of 2009. The decrease was due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production levels. Also included in cost of goods sold for the third quarter of 2008 was a charge of $0.9 million to write down certain inventories to the lower of cost or market. Depreciation and amortization in the third quarter of 2009 remained relatively consistent with the same period in 2008. Selling, general, and administrative expense also remained consistent in the third quarter of 2009 compared with the same period in 2008; however, this was a function of lower employment costs from reduced headcounts offset by increased pension costs resulting from reduced investment returns. Operating income for the segment increased from $10.6 million in the third quarter of 2008 to $16.5 million in the third quarter of 2009 due primarily to improved unit spreads, especially in the segment s brass rod operations, and decreased employment costs, partially offset by reduced sales volumes.
The Company s effective tax rate for the first nine months of 2009 was 30 percent compared with 34 percent for the same period last year. Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the first nine months of 2009 were changes to tax contingencies of $1.3 million, the U.S. production activities deduction of $0.5 million, return-to-provision adjustments of $0.4 million, the effect of foreign statutory rates different from U.S. and other foreign adjustments of $0.4 million, and other adjustments of $0.7 million. These items were partially offset by the provision for state income taxes, net of the federal benefit, of $1.5 million and valuation allowance changes of $0.3 million. The change in the valuation allowance for the first nine months of 2009 included the addition of a valuation allowance of $3.0 million, or 8 cents per diluted share, due to the expectation that a foreign deferred tax asset will not be realized. This expense was partially offset by the reduction of a valuation allowance of $2.3 million, or 6 cents per diluted share, due to an increase in the expected future realization of a state deferred tax asset, and the net reduction of a valuation allowance of $0.4 million related to a federal deferred tax asset.
Net sales by the Plumbing and Refrigeration segment were $661.0 million in the first nine months of 2009, which is approximately a 43 percent decrease from $1.16 billion for the same period in 2008. The decrease was due to decreased sales volume in the majority of the segment s product lines as a result of weak demand stemming from current economic conditions and decreased selling prices resulting from lower average raw material costs. Other factors adversely affecting the segment s sales volumes include production losses resulting from a fire at the European copper tube operation in November 2008 and an explosion at the Fulton, Mississippi copper tube mill in July 2009. Of the $498.6 million decrease in net sales, approximately $213.2 million was attributable to lower unit volume and $231.6 million was due to lower selling prices in the segment s core product lines consisting primarily of copper tube, line sets, and fittings. Cost of goods sold decreased from $981.9 million in the first nine months of 2008 to $545.3 million in the first nine months of 2009. This decrease resulted from lower sales volume, decreased raw material costs, and reduced aggregate conversion costs from reductions in production levels. This decrease was partially offset by a provision of $2.4 million, or 4 cents per diluted share after tax, as a result of additional loss contingencies that management deemed to become probable and estimable during the first nine months of 2009. Also included in cost of goods sold for the nine months ended September 27, 2008 was a charge of $2.4 million to write down certain inventories to the lower of cost or market. Depreciation and amortization decreased to $19.8 million in the nine months ended September 26, 2009 from $21.8 million in the same period of 2008 due to several production assets becoming fully depreciated during 2008. Selling, general, and administrative expense decreased to $57.7 million in the first nine months of 2009 from $70.0 million in the same period of 2008. This decrease was primarily due to decreased employment costs from headcount reductions and lower aggregate sales and distribution expense resulting from lower unit sales volume. Operating income for the segment decreased from $85.9 million in the first nine months of 2008 to $38.2 million in the first nine months of 2009 due primarily to lower sales volume and decreased unit spreads in copper tube, partially offset by improved unit spreads in other core products and reduced employment costs.
Net sales for the OEM segment declined approximately 53 percent to $459.9 million in the nine months ended September 26, 2009 from $979.7 million in same period of 2008. The decrease was due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $519.8 million decrease in net sales, approximately $351.7 million was attributable to lower unit volume and $134.3 million was due to lower selling prices in the segment s core product lines consisting primarily of brass rod, forgings, and commercial tube. Cost of goods sold decreased from $894.9 million in the first nine months of 2008 to $415.2 million in the same period of 2009. The decrease was due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production levels. Also included in cost of goods sold for the nine months ended September 27, 2008 was a charge of $0.9 million to write down certain inventories to the lower of cost or market. Depreciation and amortization remained relatively consistent. Selling, general, and administrative expense decreased from $18.7 million for the nine months ended September 27, 2008 to $15.7 million in same period of 2009 due primarily to reduced bad debt expense and decreased employment costs associated with headcount reductions. Operating income for the segment decreased from $55.2 million in the first nine months of 2008 to $18.3 million in the first nine months of 2009 due primarily to lower sales volumes partially offset by improved unit spreads at our brass rod operations and reduced employment costs.
During the first nine months of 2009, cash provided by investing activities totaled $2.4 million, which consisted of net reductions to restricted cash deposits of $12.8 million and proceeds from sales of properties of $0.6 million, partially offset by capital expenditures of $11.0 million. Cash used in financing activities during the first nine months of 2009 totaled $16.4 million, which primarily consisted of (i) the net reduction in Mueller-Xingrong s working capital debt facility of $11.8 million, (ii) dividends paid to the Company s stockholdRead the The complete ReportMLI is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
Mueller Industries Inc. is a leading manufacturer of copper tube and fittings; brass and copper alloy rod bar and shapes; aluminum and brass forgings; aluminum and copper impact extrusions; plastic fittings and valves; refrigeration valves and fittings; and fabricated tubular products. Mueller's operations are located throughout the United States and in Canada Mexico Great Britain and China. Mueller's business is importantly linked to the construction of new homes; the improvement and reconditioning of existing homes and structures; and the commercial construction market which includes office buildings factories hotels hospitals etc. Mueller Industries Inc. has a market cap of $918.5 million; its shares were traded at around $26.2 with a P/E ratio of 29 and P/S ratio of 0.4. The dividend yield of Mueller Industries Inc. stocks is 1.6%. Mueller Industries Inc. had an annual average earning growth of 3.7% over the past 10 years.
Highlight of Business Operations:
Net sales by the Plumbing and Refrigeration segment were $240.9 million in the third quarter of 2009 which is approximately a 35 percent decrease from $371.3 million for the same period in 2008. The decrease was due to decreased sales volume in the majority of the segment s product lines as a result of weak demand arising from general economic conditions and decreased selling prices resulting from lower average raw material costs. Other factors adversely affecting the segment s sales volumes included production losses resulting from a fire at the European copper tube operation in November 2008 and an explosion at the Fulton, Mississippi copper tube mill in July 2009. Of the $130.4 million decrease in net sales, approximately $73.9 million was attributable to lower unit volume and $41.2 million was due to lower selling prices in the segment s core product lines consisting primarily of copper tube, line sets, and fittings. Cost of goods sold decreased from $313.8 million in the third quarter of 2008 to $200.0 million in the third quarter of 2009. This decrease resulted from lower sales volume, decreased raw material costs, and reduced aggregate conversion costs from reductions in production levels. Also included in cost of goods sold for the third quarter of 2008 was a charge of $2.4 million to write down certain inventories to the lower of cost or market. Depreciation and amortization decreased to $6.6 million in the third quarter of 2009 from $7.3 million in the same period of 2008 due to several production assets becoming fully depreciated during 2008. Selling, general, and administrative expense decreased to $18.3 million in the third quarter of 2009 from $24.8 million in the third quarter of 2008. This decrease was primarily due to decreased employment costs from headcount reductions and lower aggregate sales and distribution expense resulting from lower unit sales volume. Operating income for the segment decreased from $25.4 million in the third quarter of 2008 to $16.0 million in the third quarter of 2009 due primarily to lower sales volume and decreased unit spreads in copper tube, partially offset by savings from reduced employment costs.Net sales for the OEM segment declined approximately 39 percent to $181.6 million in the third quarter of 2009 from $299.5 million in the third quarter of 2008. The decrease was due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $117.9 million decrease in net sales, approximately $64.1 million was attributable to lower unit volume and $43.3 million was due to lower selling prices in the segment s core product lines consisting primarily of brass rod, forgings, and commercial tube. Cost of goods sold decreased from $279.7 million in the third quarter 2008 to $156.4 million in the third quarter of 2009. The decrease was due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production levels. Also included in cost of goods sold for the third quarter of 2008 was a charge of $0.9 million to write down certain inventories to the lower of cost or market. Depreciation and amortization in the third quarter of 2009 remained relatively consistent with the same period in 2008. Selling, general, and administrative expense also remained consistent in the third quarter of 2009 compared with the same period in 2008; however, this was a function of lower employment costs from reduced headcounts offset by increased pension costs resulting from reduced investment returns. Operating income for the segment increased from $10.6 million in the third quarter of 2008 to $16.5 million in the third quarter of 2009 due primarily to improved unit spreads, especially in the segment s brass rod operations, and decreased employment costs, partially offset by reduced sales volumes.
The Company s effective tax rate for the first nine months of 2009 was 30 percent compared with 34 percent for the same period last year. Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the first nine months of 2009 were changes to tax contingencies of $1.3 million, the U.S. production activities deduction of $0.5 million, return-to-provision adjustments of $0.4 million, the effect of foreign statutory rates different from U.S. and other foreign adjustments of $0.4 million, and other adjustments of $0.7 million. These items were partially offset by the provision for state income taxes, net of the federal benefit, of $1.5 million and valuation allowance changes of $0.3 million. The change in the valuation allowance for the first nine months of 2009 included the addition of a valuation allowance of $3.0 million, or 8 cents per diluted share, due to the expectation that a foreign deferred tax asset will not be realized. This expense was partially offset by the reduction of a valuation allowance of $2.3 million, or 6 cents per diluted share, due to an increase in the expected future realization of a state deferred tax asset, and the net reduction of a valuation allowance of $0.4 million related to a federal deferred tax asset.
Net sales by the Plumbing and Refrigeration segment were $661.0 million in the first nine months of 2009, which is approximately a 43 percent decrease from $1.16 billion for the same period in 2008. The decrease was due to decreased sales volume in the majority of the segment s product lines as a result of weak demand stemming from current economic conditions and decreased selling prices resulting from lower average raw material costs. Other factors adversely affecting the segment s sales volumes include production losses resulting from a fire at the European copper tube operation in November 2008 and an explosion at the Fulton, Mississippi copper tube mill in July 2009. Of the $498.6 million decrease in net sales, approximately $213.2 million was attributable to lower unit volume and $231.6 million was due to lower selling prices in the segment s core product lines consisting primarily of copper tube, line sets, and fittings. Cost of goods sold decreased from $981.9 million in the first nine months of 2008 to $545.3 million in the first nine months of 2009. This decrease resulted from lower sales volume, decreased raw material costs, and reduced aggregate conversion costs from reductions in production levels. This decrease was partially offset by a provision of $2.4 million, or 4 cents per diluted share after tax, as a result of additional loss contingencies that management deemed to become probable and estimable during the first nine months of 2009. Also included in cost of goods sold for the nine months ended September 27, 2008 was a charge of $2.4 million to write down certain inventories to the lower of cost or market. Depreciation and amortization decreased to $19.8 million in the nine months ended September 26, 2009 from $21.8 million in the same period of 2008 due to several production assets becoming fully depreciated during 2008. Selling, general, and administrative expense decreased to $57.7 million in the first nine months of 2009 from $70.0 million in the same period of 2008. This decrease was primarily due to decreased employment costs from headcount reductions and lower aggregate sales and distribution expense resulting from lower unit sales volume. Operating income for the segment decreased from $85.9 million in the first nine months of 2008 to $38.2 million in the first nine months of 2009 due primarily to lower sales volume and decreased unit spreads in copper tube, partially offset by improved unit spreads in other core products and reduced employment costs.
Net sales for the OEM segment declined approximately 53 percent to $459.9 million in the nine months ended September 26, 2009 from $979.7 million in same period of 2008. The decrease was due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $519.8 million decrease in net sales, approximately $351.7 million was attributable to lower unit volume and $134.3 million was due to lower selling prices in the segment s core product lines consisting primarily of brass rod, forgings, and commercial tube. Cost of goods sold decreased from $894.9 million in the first nine months of 2008 to $415.2 million in the same period of 2009. The decrease was due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production levels. Also included in cost of goods sold for the nine months ended September 27, 2008 was a charge of $0.9 million to write down certain inventories to the lower of cost or market. Depreciation and amortization remained relatively consistent. Selling, general, and administrative expense decreased from $18.7 million for the nine months ended September 27, 2008 to $15.7 million in same period of 2009 due primarily to reduced bad debt expense and decreased employment costs associated with headcount reductions. Operating income for the segment decreased from $55.2 million in the first nine months of 2008 to $18.3 million in the first nine months of 2009 due primarily to lower sales volumes partially offset by improved unit spreads at our brass rod operations and reduced employment costs.
During the first nine months of 2009, cash provided by investing activities totaled $2.4 million, which consisted of net reductions to restricted cash deposits of $12.8 million and proceeds from sales of properties of $0.6 million, partially offset by capital expenditures of $11.0 million. Cash used in financing activities during the first nine months of 2009 totaled $16.4 million, which primarily consisted of (i) the net reduction in Mueller-Xingrong s working capital debt facility of $11.8 million, (ii) dividends paid to the Company s stockholdRead the The complete ReportMLI is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
