Industry Segments

6 Months Ended

Jun. 28, 2014

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 Jiangsu Mueller–Xingrong Copper Industries Limited (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 primarily in Europe.  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 also includes 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.  For the six months ended June 28, 2014, cost of goods sold included a decrease in accruals related to import duties of $3.1 million.

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 primarily for the refrigeration, air-conditioning, and gas appliance 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 original equipment manufacturers.

	For the Quarter Ended June 28, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	397,190	$	255,409	$	(2,908	)	$	649,691
Cost of goods sold		336,256		224,392		(2,873	)		557,775
Depreciation and amortization		5,096		2,892		604			8,592
Selling, general, and administrative expense		23,508		4,909		6,703			35,120
Operating income		32,330		23,216		(7,342	)		48,204
Interest expense									(1,457	)
Other income, net									127
Income before income taxes								$	46,874

	For the Quarter Ended June 29, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	328,673		$	257,044	$	(3,435	)	$	582,282
Cost of goods sold		277,933			226,596		(3,404	)		501,125
Depreciation and amortization		4,443			3,342		543			8,328
Selling, general, and administrative expense		20,382			6,167		8,265			34,814
Insurance settlement		(103,895	)		—		(2,437	)		(106,332	)
Operating income		129,810			20,939		(6,402	)		144,347
Interest expense										(1,101	)
Other income, net										319
Income before income taxes									$	143,565

	For the Six Months Ended June 28, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	735,217	$	495,439	$	(6,591	)	$	1,224,065
Cost of goods sold		625,281		434,795		(6,524	)		1,053,552
Depreciation and amortization		9,516		5,975		1,208			16,699
Selling, general, and administrative expense		44,205		10,167		12,931			67,303
Operating income		56,215		44,502		(14,206	)		86,511
Interest expense									(2,483	)
Other income, net									215
Income before income taxes								$	84,243

	For the Six Months Ended June 29, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	640,487		$	510,831	$	(9,346	)	$	1,141,972
Cost of goods sold		542,747			450,476		(9,248	)		983,975
Depreciation and amortization		8,689			6,704		1,089			16,482
Selling, general, and administrative expense		40,509			12,389		13,259			66,157
Insurance settlement		(103,895	)		—		(2,437	)		(106,332	)
Operating income		152,437			41,262		(12,009	)		181,690
Interest expense										(1,697	)
Other income, net										3,482
Income before income taxes									$	183,475