Industry Segments

6 Months Ended

Jul. 02, 2011

Industry Segments [Abstract]

Industry Segments

Note 5 – Industry Segments

The Company’s reportable segments are Plumbing & Refrigeration and Original Equipment Manufacturers (OEM).  For disclosure purposes, as permitted under Accounting Standards Codification (ASC) 280, Segment Reporting, certain operating segments are aggregated into reportable segments.  The Plumbing & Refrigeration segment is composed of Standard Products (SPD), European Operations, and Mexican Operations.  The OEM segment is composed of Industrial Products (IPD), Engineered Products (EPD), and Mueller-Xingrong.  These segments are classified primarily by the markets for their products.  Performance of segments is generally evaluated by their operating income.  Intersegment transactions are generally conducted on an arms-length basis.

SPD manufactures copper tube and fittings, plastic fittings, plastic pipe, and line sets.  These products are manufactured in the U.S.  Outside the U.S., the Company’s European Operations manufacture copper tube, which is sold in Europe and the Middle East.  SPD also imports and resells brass and plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products.  Mexican Operations consist of pipe nipple manufacturing and import distribution businesses including product lines of malleable iron fittings and other plumbing specialties.  The European Operations consist of copper tube manufacturing and the import distribution of fittings, valves, and plumbing specialties primarily in the U.K. and Ireland.  The Plumbing & Refrigeration segment’s products are sold primarily to plumbing, refrigeration, and air-conditioning wholesalers, hardware wholesalers and co-ops, and building product retailers.

IPD manufactures brass rod, impact extrusions, and forgings which are used in a wide variety of end products including plumbing brass, automotive components, valves, and fittings.  EPD manufactures and fabricates valves and assemblies for the refrigeration, air-conditioning, gas appliance, and barbecue grill markets and specialty copper, copper-alloy, and aluminum tubing.  Mueller-Xingrong manufactures engineered copper tube primarily for air-conditioning applications.  These products are sold primarily to OEM customers.

Summarized segment information is as follows:

	For the Quarter Ended July 2, 2011
	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	347,069	$	314,086	$	(8,232	)	$	652,923
Cost of goods sold		296,033		285,944		(8,100	)		573,877
Depreciation and amortization		5,349		3,479		338			9,166
Selling, general, and administrative expense		20,897		5,847		6,586			33,330
Operating income		24,790		18,816		(7,056	)		36,550
Interest expense									(2,834	)
Other income, net									264
Income before income taxes								$	33,980

	For the Quarter Ended June 26, 2010
	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	285,717	$	257,780	$	(3,109	)	$	540,388
Cost of goods sold		238,105		231,482		(2,942	)		466,645
Depreciation and amortization		6,300		3,535		255			10,090
Selling, general, and administrative expense		20,362		5,831		7,275			33,468
Insurance settlement		1,210		—		—			1,210
Operating income		19,740		16,932		(7,697	)		28,975
Interest expense									(2,964	)
Other expense, net									(2,518	)
Income before income taxes								$	23,493

Segment information (continued):

	For the Six Months Ended July 2, 2011
	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	727,658	$	633,422	$	(20,476	)	$	1,340,604
Cost of goods sold		619,228		564,736		(20,213	)		1,163,751
Depreciation and amortization		11,183		7,071		611			18,865
Selling, general, and administrative expense		42,774		13,153		12,772			68,699
Litigation settlement		—		—		(10,500	)		(10,500	)
Operating income		54,473		48,462		(3,146	)		99,789
Interest expense									(6,182	)
Other income, net									1,323
Income before income taxes								$	94,930

	For the Six Months Ended June 26, 2010
	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	542,379		$	489,984	$	(6,707	)	$	1,025,656
Cost of goods sold		450,974			435,094		(6,375	)		879,693
Depreciation and amortization		12,813			7,106		519			20,438
Selling, general, and administrative expense		39,689			14,721		16,381			70,791
Insurance settlement		(21,296	)		—		—			(21,296	)
Operating income		60,199			33,063		(17,232	)		76,030
Interest expense										(5,496	)
Other expense, net										(2,378	)
Income before income taxes									$	68,156