Segment Information

Each of the Company’s 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, Great Lakes Copper, Heatlink Group, Die-Mold, European Operations, Trading Group, and Jungwoo-Mueller (the Company’s South Korean joint venture). The Domestic Piping Systems Group manufactures copper tube, fittings, and line sets. These products are manufactured in the U.S., sold in the U.S., and exported to markets worldwide. Outside the U.S., Great Lakes Copper manufactures copper tube and line sets in Canada and sells the products primarily in the U.S. and Canada, Heatlink Group produces a complete line of products for PEX plumbing and radiant systems in Canada and sells these products in Canada and the U.S., Die-Mold manufactures PEX and other plumbing-related fittings and plastic injection tooling in Canada and sells these products in Canada and the U.S., 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. 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).

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, transportation, construction, heating, ventilation, and air-conditioning, plumbing, refrigeration, and energy 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, assemblies, high pressure components, and coaxial heat exchangers primarily for the heating, ventilation, air-conditioning, and refrigeration markets in the U.S.

Summarized segment information is as follows:



	For the Quarter Ended June 30, 2018
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations			Total

Net sales	$	453,183	$	175,891	$	39,172	$	(5,473	)	$	662,773

Cost of goods sold	384,821		154,401		30,688		(6,090		)	563,820
Depreciation and amortization	5,744		1,948		627		687			9,006
Selling, general, and administrative expense	20,599		3,449		2,510		11,870			38,428
(Gain) loss on sale of assets	—		—		—		(409		)	(409		)

Operating income	42,019		16,093		5,347		(11,531		)	51,928

Interest expense										(6,073		)
Other income, net										586

Income before income taxes										$	46,441



	For the Quarter Ended July 1, 2017
(In thousands)	Piping Systems			Industrial Metals		Climate		Corporate and Eliminations			Total

Net sales	$	422,844		$	154,504	$	36,636	$	282		$	614,266

Cost of goods sold	364,261			132,972		27,449		(371		)	524,311
Depreciation and amortization	5,591			1,904		615		485			8,595
Selling, general, and administrative expense	19,831			3,239		2,456		10,773			36,299
(Gain) loss on sale of assets	(1,631		)	—		—		—			(1,631		)

Operating income	34,792			16,389		6,116		(10,605		)	46,692

Interest expense											(6,442		)
Other income, net											342

Income before income taxes											$	40,592

Segment information (continued):



	For the Six Months Ended June 30, 2018
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations			Total

Net sales	$	884,147	$	353,223	$	75,235	$	(9,772	)	$	1,302,833

Cost of goods sold	757,716		303,824		57,974		(10,024		)	1,109,490
Depreciation and amortization	11,622		3,851		1,248		1,741			18,462
Selling, general, and administrative expense	39,841		6,822		5,119		20,703			72,485
(Gain) loss on sale of assets	—		—		—		3,060			3,060

Operating income	74,968		38,726		10,894		(25,252		)	99,336

Interest expense										(11,982		)
Other income, net										1,146

Income before income taxes										$	88,500



	For the Six Months Ended July 1, 2017
(In thousands)	Piping Systems			Industrial Metals		Climate		Corporate and Eliminations			Total

Net sales	$	821,619		$	304,341	$	70,915	$	(4,689	)	$	1,192,186

Cost of goods sold	708,907			257,015		53,013		(6,197		)	1,012,738
Depreciation and amortization	10,933			3,802		1,244		971			16,950
Selling, general, and administrative expense	38,028			6,788		4,932		22,125			71,873
(Gain) loss on sale of assets	(1,631		)	—		—		—			(1,631		)

Operating income	65,382			36,736		11,726		(21,588		)	92,256

Interest expense											(8,973		)
Other income, net											936

Income before income taxes											$	84,219

The following tables represent a disaggregation of revenue from contracts with customers, along with the reportable segment for each category:



	For the Quarter Ended June 30, 2018
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	379,165	$	—	$	—	$	379,165
Brass rod and forgings	—		135,921		—		135,921
OEM components, tube & assemblies	7,448		14,597		39,172		61,217
Valves and plumbing specialties	66,570		—		—		66,570
Other	—		25,373		—		25,373

	453,183		175,891		39,172		668,246

Intersegment sales							(5,473		)

Net sales							$	662,773



	For the Quarter Ended July 1, 2017
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	318,433	$	—	$	—	$	318,433
Brass rod and forgings	—		119,783		—		119,783
OEM components, tube & assemblies	47,709		12,887		36,636		97,232
Valves and plumbing specialties	56,702		—		—		56,702
Other	—		21,834		—		21,834

	422,844		154,504		36,636		613,984

Intersegment sales							282

Net sales							$	614,266

Disaggregation of revenue from contracts with customers (continued):



	For the Six Months Ended June 30, 2018
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	737,256	$	—	$	—	$	737,256
Brass rod and forgings	—		272,469		—		272,469
OEM components, tube & assemblies	14,510		29,664		75,235		119,409
Valves and plumbing specialties	132,381		—		—		132,381
Other	—		51,090		—		51,090

	884,147		353,223		75,235		1,312,605

Intersegment sales							(9,772		)

Net sales							$	1,302,833



	For the Six Months Ended July 1, 2017
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	626,799	$	—	$	—	$	626,799
Brass rod and forgings	—		233,963		—		233,963
OEM components, tube & assemblies	79,680		26,102		70,915		176,697
Valves and plumbing specialties	115,140		—		—		115,140
Other	—		44,276		—		44,276

	821,619		304,341		70,915		1,196,875

Intersegment sales							(4,689		)

Net sales							$	1,192,186