Industry Segments

9 Months Ended

Oct. 01, 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 October 1, 2011
	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	325,776	$	266,560	$	(6,527	)	$	585,809
Cost of goods sold		285,242		245,223		(6,481	)		523,984
Depreciation and amortization		4,859		3,519		338			8,716
Selling, general, and administrative expense		21,791		5,646		6,808			34,245
Operating income	$	13,884	$	12,172	$	(7,192	)		18,864
Interest expense									(2,822	)
Other income, net									102
Income before income taxes								$	16,144

Segment information (continued):

	For the Quarter Ended September 25, 2010
	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	282,735	$	228,981	$	(4,476	)	$	507,240
Cost of goods sold		245,013		196,894		(4,310	)		437,597
Depreciation and amortization		6,082		3,594		258			9,934
Selling, general, and administrative expense		20,117		5,499		3,194			28,810
Insurance settlement		12		—		—			12
Operating income	$	11,511	$	22,994	$	(3,618	)		30,887
Interest expense									(3,072	)
Other income, net									30
Income before income taxes								$	27,845

	For the Nine Months Ended October 1, 2011
	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	1,053,434	$	899,982	$	(27,003	)	$	1,926,413
Cost of goods sold		904,470		809,959		(26,694	)		1,687,735
Depreciation and amortization		16,042		10,590		949			27,581
Selling, general, and administrative expense		64,565		18,799		19,580			102,944
Litigation settlement		—		—		(10,500	)		(10,500	)
Operating income	$	68,357	$	60,634	$	(10,338	)		118,653
Interest expense									(9,004	)
Other income, net									1,425
Income before income taxes								$	111,074

Segment information (continued):

	For the Nine Months Ended September 25, 2010
	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
(In thousands)
Net sales	$	825,114		$	718,965	$	(11,183	)	$	1,532,896
Cost of goods sold		695,987			631,988		(10,685	)		1,317,290
Depreciation and amortization		18,895			10,700		777			30,372
Selling, general, and administrative expense		59,806			20,220		19,575			99,601
Insurance settlement		(21,284	)		—		—			(21,284	)
Operating income	$	71,710		$	56,057	$	(20,850	)		106,917
Interest expense										(8,568	)
Other expense, net										(2,348	)
Income before income taxes									$	96,001