Mueller Industries Inc. (MLI, Financial) filed Quarterly Report for the period ended 2009-06-27.
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 $803.8 million; its shares were traded at around $21.64 with a P/E ratio of 15.3 and P/S ratio of 0.3. The dividend yield of Mueller Industries Inc. stocks is 1.9%. 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 60 percent to $139.9 million in the second quarter of 2009 from $354.0 million in the second quarter of 2008. The decrease is due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $214.1 million decrease in net sales, approximately $154.2 million is attributable to lower unit volume and $47.1 million is 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 $325.7 million in the second quarter 2008 to $122.8 million in the second quarter of 2009. The decrease is due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production employees and lower energy costs. Depreciation and amortization remained consistent. Selling, general, and administrative expense decreased $0.4 million to $5.5 million in the second quarter of 2009 due primarily to decreased employment costs associated with headcount reductions. Operating income for the segment decreased from $19.0 million in the second quarter of 2008 to $8.1 million in the second quarter of 2009 due primarily to lower sales volumes, partially offset by improved unit spreads, especially in the segment s brass rod operations.
The Company s effective tax rate for the first half of 2009 was 49 percent compared with 35 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 half of 2009 were state income taxes of $0.6 million, the effect of foreign statutory rates different from U.S. and other foreign adjustments of $0.4 million, changes to tax contingencies of $0.2 million, and valuation allowance changes of $0.2 million. These items were partially offset by the U.S. production activities deduction of $0.1 million. The expense from valuation allowance changes for the first half of 2009 includes the addition of a valuation allowance of $3.3 million, or 9 cents per diluted share, due to the expectation that a foreign deferred tax asset will not be realized, partially offset by the reduction of a valuation allowance of $3.1 million, or 8 cents per diluted share, due to an increase in the expected future realization of a state deferred tax asset.
Net sales by the Plumbing and Refrigeration segment were $420.2 million in the first half of 2009 which is approximately a 47 percent decrease from $788.3 million for the same period in 2008. The decrease is due to decreased sales volume in the majority of the segment s product lines as a result of weak demand and decreased selling prices resulting from lower average raw material costs. Of the $368.1 million decrease in net sales, approximately $159.7 million is attributable to lower unit volume and $170.0 million is due to lower selling prices in the segment s core product lines consisting primarily of copper tube, line sets, and fittings. Additionally, the European copper tube operation has suffered lower sales volume following a fire in November 2008. Cost of goods sold decreased from $668.1 million in the first half of 2008 to $345.4 million in the first half of 2009. This decrease resulted from lower sales volume, decreased raw material costs, and reduced aggregate conversion costs from reductions in production workforce and lower utility costs. This decrease was partially offset by a provision of $2.2 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 period. Depreciation and amortization decreased to $13.2 million in the six months ended June 27, 2009 from $14.5 million in the same period of 2008 due to several production assets becoming fully depreciated during 2008. Selling, general, and administrative expense decreased to $39.4 million in the first half of 2009 from $45.2 million in the same period of 2008. These decreases are 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 $60.5 million in the first half of 2008 to $22.2 million in the first half 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.
Net sales for the OEM segment declined approximately 59 percent to $278.3 million in the first half of 2009 from $680.2 million in same period of 2008. The decrease is due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $401.9 million decrease in net sales, approximately $286.7 million is attributable to lower unit volume and $92.0 million is 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 $615.2 million in the first half 2008 to $258.9 million in the same period of 2009. The decrease is due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production employees and lower energy costs. Depreciation and amortization remained consistent. Selling, general, and administrative expense decreased from $13.6 million for the six months ended June 28, 2008 to $10.5 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 $44.5 million in the first half of 2008 to $1.8 million in the first half of 2009 due primarily to lower sales volumes and decreased unit spreads, primarily in brass rod and Mueller-Xingrong.
During the first half of 2009, cash provided by investing activities totaled $4.9 million, which consisted of net reductions to restricted cash deposits of $13.0 million and proceeds from sales of properties of $0.6 million, partially offset by capital expenditures of $8.7 million. Cash used in financing activities during the first half of 2009 totaled $23.8 million, which consisted of the net reduction in Mueller-Xingrong s working capital debt facility of $14.6 million, dividends paid to the Company s stockholders of $7.4 million, and dividends paid by Mueller-Xingrong to its noncontrolling stockholders of $1.4 million.
Read 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 $803.8 million; its shares were traded at around $21.64 with a P/E ratio of 15.3 and P/S ratio of 0.3. The dividend yield of Mueller Industries Inc. stocks is 1.9%. 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 $229.8 million in the second quarter of 2009 which is approximately a 43 percent decrease from $404.4 million for the same period in 2008. The decrease is due to decreased sales volume in the majority of the segment s product lines as a result of weak demand and decreased selling prices resulting from lower average raw material costs. Of the $174.6 million decrease in net sales, approximately $52.1 million is attributable to lower unit volume and $99.2 million is due to lower selling prices in the segment s core product lines consisting primarily of copper tube, line sets, and fittings. Additionally, the European copper tube operation has suffered lower sales volume following a fire in November 2008. Cost of goods sold decreased from $340.1 million in the second quarter of 2008 to $192.1 million in the second quarter of 2009. This decrease resulted from lower sales volume, decreased raw material costs, and reduced aggregate conversion costs from reductions in production workforce and lower utility costs. This decrease was partially offset by a provision of $2.2 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 period. Depreciation and amortization decreased to $6.6 million in the second 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 $19.2 million in the second quarter of 2009 from $21.6 million in the second quarter of 2008. These decreases are 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 $35.4 million in the second quarter of 2008 to $11.9 million in the second quarter of 2009 due primarily to lower sales volume and decreased unit spreads in many of SPD s product lines.Net sales for the OEM segment declined approximately 60 percent to $139.9 million in the second quarter of 2009 from $354.0 million in the second quarter of 2008. The decrease is due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $214.1 million decrease in net sales, approximately $154.2 million is attributable to lower unit volume and $47.1 million is 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 $325.7 million in the second quarter 2008 to $122.8 million in the second quarter of 2009. The decrease is due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production employees and lower energy costs. Depreciation and amortization remained consistent. Selling, general, and administrative expense decreased $0.4 million to $5.5 million in the second quarter of 2009 due primarily to decreased employment costs associated with headcount reductions. Operating income for the segment decreased from $19.0 million in the second quarter of 2008 to $8.1 million in the second quarter of 2009 due primarily to lower sales volumes, partially offset by improved unit spreads, especially in the segment s brass rod operations.
The Company s effective tax rate for the first half of 2009 was 49 percent compared with 35 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 half of 2009 were state income taxes of $0.6 million, the effect of foreign statutory rates different from U.S. and other foreign adjustments of $0.4 million, changes to tax contingencies of $0.2 million, and valuation allowance changes of $0.2 million. These items were partially offset by the U.S. production activities deduction of $0.1 million. The expense from valuation allowance changes for the first half of 2009 includes the addition of a valuation allowance of $3.3 million, or 9 cents per diluted share, due to the expectation that a foreign deferred tax asset will not be realized, partially offset by the reduction of a valuation allowance of $3.1 million, or 8 cents per diluted share, due to an increase in the expected future realization of a state deferred tax asset.
Net sales by the Plumbing and Refrigeration segment were $420.2 million in the first half of 2009 which is approximately a 47 percent decrease from $788.3 million for the same period in 2008. The decrease is due to decreased sales volume in the majority of the segment s product lines as a result of weak demand and decreased selling prices resulting from lower average raw material costs. Of the $368.1 million decrease in net sales, approximately $159.7 million is attributable to lower unit volume and $170.0 million is due to lower selling prices in the segment s core product lines consisting primarily of copper tube, line sets, and fittings. Additionally, the European copper tube operation has suffered lower sales volume following a fire in November 2008. Cost of goods sold decreased from $668.1 million in the first half of 2008 to $345.4 million in the first half of 2009. This decrease resulted from lower sales volume, decreased raw material costs, and reduced aggregate conversion costs from reductions in production workforce and lower utility costs. This decrease was partially offset by a provision of $2.2 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 period. Depreciation and amortization decreased to $13.2 million in the six months ended June 27, 2009 from $14.5 million in the same period of 2008 due to several production assets becoming fully depreciated during 2008. Selling, general, and administrative expense decreased to $39.4 million in the first half of 2009 from $45.2 million in the same period of 2008. These decreases are 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 $60.5 million in the first half of 2008 to $22.2 million in the first half 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.
Net sales for the OEM segment declined approximately 59 percent to $278.3 million in the first half of 2009 from $680.2 million in same period of 2008. The decrease is due primarily to lower sales volume and lower selling prices resulting from lower average costs of raw materials. Of the $401.9 million decrease in net sales, approximately $286.7 million is attributable to lower unit volume and $92.0 million is 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 $615.2 million in the first half 2008 to $258.9 million in the same period of 2009. The decrease is due primarily to lower sales volume, lower raw material costs, and lower aggregate conversion costs resulting from reductions in production employees and lower energy costs. Depreciation and amortization remained consistent. Selling, general, and administrative expense decreased from $13.6 million for the six months ended June 28, 2008 to $10.5 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 $44.5 million in the first half of 2008 to $1.8 million in the first half of 2009 due primarily to lower sales volumes and decreased unit spreads, primarily in brass rod and Mueller-Xingrong.
During the first half of 2009, cash provided by investing activities totaled $4.9 million, which consisted of net reductions to restricted cash deposits of $13.0 million and proceeds from sales of properties of $0.6 million, partially offset by capital expenditures of $8.7 million. Cash used in financing activities during the first half of 2009 totaled $23.8 million, which consisted of the net reduction in Mueller-Xingrong s working capital debt facility of $14.6 million, dividends paid to the Company s stockholders of $7.4 million, and dividends paid by Mueller-Xingrong to its noncontrolling stockholders of $1.4 million.
Read the The complete ReportMLI is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
