Segment Information

12 Months Ended

Dec. 28, 2019

The Company’s reportable segments are Piping Systems, Industrial Metals, and Climate. 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, 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. European Operations manufacture copper tube in the U.K. which is sold primarily in Europe. The Trading Group manufactures pipe nipples 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 OEMs.

During 2019, the segment recognized a gain of $1.2 million on the sale of real property.

During 2018, the segment recognized a gain of $1.4 million on the sale of real property and a gain of $0.7 million on the sale of manufacturing equipment.

During 2017, the segment recognized a gain of $1.5 million on the sale of the Company’s interest in Mueller-Xingrong and impairment charges of $1.5 million on certain copper fittings manufacturing equipment.

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.

During 2019, the segment recognized a loss of $0.3 million on the sale of real property and an insurance recovery gain of $0.5 million related to the losses incurred due to the 2017 fire at the brass rod mill in Port Huron, Michigan.

During 2018, the segment recognized a gain of $1.3 million on the sale of real property and an insurance recovery gain of $3.7 million related to the losses incurred due to the 2017 fire at the brass rod mill in Port Huron, Michigan.

Climate

Climate is composed of the following operating segments: Refrigeration Products, Fabricated Tube Products, Westermeyer, Turbotec, ATCO, and Linesets, Inc. These domestic businesses manufacture and fabricate valves, assemblies, high pressure components, coaxial heat exchangers, insulated HVAC flexible duct systems, and line sets primarily for the heating, ventilation, air-conditioning, and refrigeration markets in the U.S.

Performance of segments is generally evaluated by their operating income. Summarized product line, geographic, and segment information is shown in the following tables. Geographic sales data indicates the location from which products are shipped. Unallocated expenses include general corporate expenses, plus certain charges or credits not included in segment activity.

During 2019, 2018, and 2017, no single customer exceeded 10 percent of worldwide sales.

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



	For the Year Ended December 28, 2019
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	1,271,558	$	—	$	—	$	1,271,558
Brass rod and forgings	—		425,573		—		425,573
OEM components, tube & assemblies	29,103		48,104		133,651		210,858
Valves and plumbing specialties	241,795		—		—		241,795
Other	—		80,695		222,565		303,260

	$	1,542,456	$	554,372	$	356,216	$	2,453,044

Intersegment sales							(22,428		)

Net sales							$	2,430,616



	For the Year Ended December 29, 2018
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	1,352,875	$	—	$	—	$	1,352,875
Brass rod and forgings	—		501,472		—		501,472
OEM components, tube & assemblies	29,578		53,581		139,113		222,272
Valves and plumbing specialties	263,180		—		—		263,180
Other	—		96,008		89,956		185,964

	$	1,645,633	$	651,061	$	229,069	$	2,525,763

Intersegment sales							(17,885		)

Net sales							$	2,507,878

Disaggregation of revenue from contracts with customers (continued):



	For the Year Ended December 30, 2017
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	1,238,258	$	—	$	—	$	1,238,258
Brass rod and forgings	—		461,603		—		461,603
OEM components, tube & assemblies	94,383		51,707		131,448		277,538
Valves and plumbing specialties	232,309		—		—		232,309
Other	—		88,821		—		88,821

	$	1,564,950	$	602,131	$	131,448	$	2,298,529

Intersegment sales							(32,456		)

Net sales							$	2,266,073

Summarized geographic information is as follows:



(In thousands)	2019		2018		2017

Net sales:
United States	$	1,775,321	$	1,820,857	$	1,556,825
United Kingdom	230,791		245,458		231,039
Canada	285,720		292,798		280,140
Asia	64,363		59,730		121,295
Mexico	74,421		89,035		76,774

	$	2,430,616	$	2,507,878	$	2,266,073



(In thousands)	2019		2018		2017

Long-lived assets:
United States	$	286,727	$	295,735	$	238,752
United Kingdom	18,776		16,313		17,661
Canada	31,429		33,144		21,327
Asia	25,637		24,930		25,973
Mexico	559		511		608

	$	363,128	$	370,633	$	304,321

Summarized segment information is as follows:



	For the Year Ended December 28, 2019
(In thousands)	Piping Systems			Industrial Metals			Climate			Corporate and Eliminations			Total

Net sales	$	1,542,456		$	554,372		$	356,216		$	(22,428	)	$	2,430,616

Cost of goods sold	1,313,980			473,010			273,850			(25,230		)	2,035,610
Depreciation and amortization	22,621			7,489			9,298			3,285			42,693
Selling, general, and administrative expense	75,170			12,359			30,385			44,444			162,358
(Gain) loss on sale of assets, net	(1,194		)	275			(44		)	—			(963		)
Insurance recovery	—			(485		)	—			—			(485		)

Operating income	131,879			61,724			42,727			(44,927		)	191,403

Interest expense													(25,683		)
Environmental expense													(1,321		)
Other income, net													1,684

Income before income taxes													$	166,083



	For the Year Ended December 29, 2018
(In thousands)	Piping Systems			Industrial Metals			Climate		Corporate and Eliminations			Total

Net sales	$	1,645,633		$	651,061		$	229,069	$	(17,885	)	$	2,507,878

Cost of goods sold	1,426,729			559,367			182,456		(18,152		)	2,150,400
Depreciation and amortization	23,304			7,568			5,569		3,114			39,555
Selling, general, and administrative expense	74,864			13,501			16,926		43,597			148,888
(Gain) loss on sale of assets, net	(2,093		)	(1,301		)	—		3,141			(253		)
Insurance recovery	—			(3,681		)	—		—			(3,681		)

Operating income	122,829			75,607			24,118		(49,585		)	172,969

Interest expense												(25,199		)
Environmental expense												(1,320		)
Other income, net												3,967

Income before income taxes												$	150,417

Segment information (continued):



	For the Year Ended December 30, 2017
(In thousands)	Piping Systems			Industrial Metals		Climate		Corporate and Eliminations			Total

Net sales	$	1,564,950		$	602,131	$	131,448	$	(32,456	)	$	2,266,073

Cost of goods sold	1,369,161			506,973		98,851		(34,368		)	1,940,617
Depreciation and amortization	21,777			7,516		2,513		2,138			33,944
Selling, general, and administrative expense	74,441			13,278		9,759		43,252			140,730
Gain on sale of assets, net	(1,491		)	—		—		—			(1,491		)
Impairment charges	1,466			—		—		—			1,466

Operating income	99,596			74,364		20,325		(43,478		)	150,807

Interest expense											(19,502		)
Environmental expense											(7,284		)
Other income, net											2,951

Income before income taxes											$	126,972



(In thousands)	2019		2018		2017
Expenditures for long-lived assets (including those resulting from business acquisitions):
Piping Systems	$	15,505	$	31,362	$	18,124
Industrial Metals	9,101		8,066		5,322
Climate	3,845		85,471		2,191
General Corporate	2,711		37		22,518

	$	31,162	$	124,936	$	48,155



Segment assets:
Piping Systems	$	796,262	$	818,303	$	801,468
Industrial Metals	161,904		173,725		212,638
Climate	249,853		246,851		73,458
General Corporate	162,921		130,670		232,609

	$	1,370,940	$	1,369,549	$	1,320,173