Segment Information

9 Months Ended

Oct. 01, 2016

Segment Information [Abstract]

Segment Information

Note 3 –Segment Information

During the first quarter of 2016, the Company made changes to its management reporting structure as a result of a change in the way the Chief Executive Officer, who serves as the Chief Operating Decision Maker, manages and evaluates the business, makes key operating decisions, and allocates resources.  Previously, the Company had two reportable segments: Plumbing & Refrigeration and OEM.  During the first quarter, the Company realigned its operating segments into three reportable segments: Piping Systems, Industrial Metals, and Climate.  Management has recast certain prior period amounts to conform to the current period presentation. Each of the reportable segments is composed of certain operating segments that are aggregated primarily by the nature of products offered as follows:

Piping Systems

Piping Systems is composed of the following operating segments: Domestic Piping Systems Group, Canadian Operations, European Operations, Trading Group, Mueller-Xingrong (the Company's Chinese joint venture), and Jungwoo-Mueller (the Company's South Korean joint venture).  The Domestic Piping Systems Group manufactures copper tube and fittings, plastic fittings, and line sets.  These products are manufactured in the U.S. and sold in North America.   Outside the U.S., the Canadian Operations manufacture copper tube and line sets and sell the products primarily in the U.S. and Canada, and the European Operations manufacture copper tube in the U.K. which is sold primarily in Europe.  The Trading Group manufactures pipe nipples and imports and resells brass and plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products in the U.S. and Mexico.  Mueller-Xingrong manufactures engineered copper tube primarily for air-conditioning applications in China.  Jungwoo-Mueller manufactures copper-based joining products that are sold worldwide.  The Piping Systems segment's products are sold primarily to plumbing, refrigeration, and air-conditioning wholesalers, hardware wholesalers and co-ops, building product retailers, and air-conditioning original equipment manufacturers (OEMs).

During the third quarter of 2016, the segment recognized impairment charges of $3.0 million on fixed assets used for product development.   During the second quarter of 2015, the segment recognized approximately $3.4 millon of severance costs related to the reorganization of Yorkshire Copper Tube, acquired in 2014.

Industrial Metals

Industrial Metals is composed of the following operating segments: Brass Rod & Copper Bar Products, Impacts & Micro Gauge, and Brass Value-Added Products.  These businesses manufacture brass rod, impact extrusions, and forgings, as well as a wide variety of end products including plumbing brass, automotive components, valves, fittings, and gas assemblies.  These products are manufactured in the U.S. and sold primarily to OEMs in the U.S., many of which are in the industrial, construction, heating, ventilation, and air-conditioning, plumbing, and refrigeration markets.

Climate

Climate is composed of the following operating segments: Refrigeration Products, Fabricated Tube Products, Westermeyer, and Turbotec.  These domestic businesses manufacture and fabricate valves and assemblies primarily for the heating, ventilation, air-conditioning, and refrigeration markets in the U.S.

Summarized segment information is as follows:

	For the Quarter Ended October 1, 2016
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations			Total
Net sales	$	351,557	$	131,350	$	30,003	$	(6,326	)	$	506,584
Cost of goods sold		301,867		107,512		22,210		(6,921	)		424,668
Depreciation and amortization		5,905		1,964		612		535			9,016
Selling, general, and administrative expense		16,647		3,125		2,357		10,284			32,413
Asset impairments		3,000		—		—		—			3,000
Operating income		24,138		18,749		4,824		(10,224	)		37,487
Interest expense											(1,830	)
Other income, net											120
Income before income taxes										$	35,777

	For the Quarter Ended September 26, 2015
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations			Total
Net sales	$	367,892	$	139,472	$	28,494	$	(674	)	$	535,184
Cost of goods sold		320,571		125,146		22,160		(710	)		467,167
Depreciation and amortization		5,430		2,154		608		557			8,749
Selling, general, and administrative expense		16,469		3,044		2,283		10,445			32,241
Operating income		25,422		9,128		3,443		(10,966	)		27,027
Interest expense											(1,682	)
Other income, net											164
Income before income taxes										$	25,509

	For the Nine Months Ended October 1, 2016
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations			Total
Net sales	$	1,109,109	$	393,608	$	92,068	$	(11,321	)	$	1,583,464
Cost of goods sold		949,015		321,615		68,363		(11,623	)		1,327,370
Depreciation and amortization		17,341		6,219		1,829		1,608			26,997
Selling, general, and administrative expense		51,497		9,989		7,336		33,885			102,707
Asset impairments		3,000		—		—		—			3,000
Operating income		88,256		55,785		14,540		(35,191	)		123,390
Interest expense											(5,370	)
Other income, net											880
Income before income taxes										$	118,900

	For the Nine Months Ended September 26, 2015
(In thousands)	Piping Systems			Industrial Metals		Climate		Corporate and Eliminations			Total
Net sales	$	1,109,124		$	435,736	$	85,803	$	(2,644	)	$	1,628,019
Cost of goods sold		959,599			373,678		67,561		(2,472	)		1,398,366
Depreciation and amortization		15,952			5,452		1,647		1,739			24,790
Selling, general, and administrative expense		50,021			8,044		6,637		33,220			97,922
Asset impairments		570			—		—		—			570
Gain on sale of assets		(15,376	)		—		—		—			(15,376	)
Severance		3,442			—		—		—			3,442
Operating income		94,916			48,562		9,958		(35,131	)		118,305
Interest expense												(5,977	)
Other income, net												534
Income before income taxes											$	112,862

(In thousands)	October 1, 2016		December 26, 2015
Segment assets:
Piping Systems	$	855,036	$	811,343
Industrial Metals		160,413		153,102
Climate		61,713		61,672
General Corporate		348,959		312,684
	$	1,426,121	$	1,338,801