Industry Segments

9 Months Ended

Sep. 27, 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 nine months ended September 27, 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.

Summarized segment information is as follows:

	For the Quarter Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	357,843	$	247,883	$	(2,906	)	$	602,820
Cost of goods sold		308,927		215,225		(2,874	)		521,278
Depreciation and amortization		5,287		3,148		517			8,952
Selling, general, and administrative expense		23,473		5,533		5,858			34,864
Operating income	$	20,156	$	23,977	$	(6,407	)		37,726
Interest expense									(1,430	)
Other income, net									225
Income before income taxes								$	36,521

	For the Quarter Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	301,622		$	230,396	$	(3,164	)	$	528,854
Cost of goods sold		258,035			201,399		(3,132	)		456,302
Depreciation and amortization		4,172			3,150		560			7,882
Selling, general, and administrative expense		20,736			5,779		6,406			32,921
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Operating income	$	54,271		$	19,937	$	(6,998	)		67,210
Interest expense										(1,243	)
Other income, net										842
Income before income taxes									$	66,809

	For the Nine Months Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	1,093,060	$	743,322	$	(9,497	)	$	1,826,885
Cost of goods sold		934,208		650,020		(9,398	)		1,574,830
Depreciation and amortization		14,803		9,123		1,725			25,651
Selling, general, and administrative expense		67,678		15,700		18,789			102,167
Operating income	$	76,371	$	68,479	$	(20,613	)		124,237
Interest expense									(3,913	)
Other income, net									440
Income before income taxes								$	120,764

	For the Nine Months Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	942,109		$	741,227	$	(12,510	)	$	1,670,826
Cost of goods sold		800,782			651,875		(12,380	)		1,440,277
Depreciation and amortization		12,861			9,854		1,649			24,364
Selling, general, and administrative expense		61,245			18,168		19,665			99,078
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Insurance settlement		(103,895	)		—		(2,437	)		(106,332	)
Operating income	$	206,708		$	61,199	$	(19,007	)		248,900
Interest expense										(2,940	)
Other income, net										4,324
Income before income taxes									$	250,284