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Housing Slowdown Affects Mueller's Q4 Bottom Line

Feb. 6, 2007
Correction may have bottomed out, official opines

February 6, 2007 -- Mueller Industries Inc. reported net sales of $544.2 million for the fourth quarter ending Dec. 30, 2006, a 12.5 percent increase compared to $483.6 million for the year-ago quarter.

Memphis-based Mueller is a manufacturer of aluminum and brass forgings, copper tube and fittings; brass and copper alloy rod, bar and shapes; aluminum and copper impact extrusions; plastic fittings and valves; refrigeration valves and fittings; and fabricated tubular products. The company's products are marketed to the construction industry.

"After more than five years of vigorous growth, the housing industry is experiencing the widely predicted 'correction,'" Mueller Chairman Harvey L. Karp said in a statement. "The 'correction' is underway but may have already bottomed out. We note that the inventory of unsold new homes is declining, while building permits, the key indicator of future business, increased at the end of 2006. Also, mortgage rates are near historical lows and demographic factors are positive for the housing market."

For the full year 2006, the company reported net sales of $2.51 billion, a 45 percent increase compared to $1.72 billion for full year 2005.

The increase in net sales is primarily due to the increased cost of copper, Mueller's principal raw material, which is generally passed through to customers by changes in selling prices, according to a company release.

For the fourth quarter, Mueller reported net income of $5.2 million, or 14 cents per diluted share, compared to net income of $35.8 million, or 97 cents per diluted share, for the year-ago quarter.

For the full year 2006, the company reported net income of $148.8 million, a 60.8 percent increase compared to a net income of $92.5 million for the full year 2005.