mli-20220625

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly report ended June 25, 2022
			OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ______ to ______
			Commission file number 1-6770

MUELLER INDUSTRIES INC.

(Exact name of registrant as specified in its charter)


Delaware			25-0790410
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


150 Schilling Boulevard	Suite 100
Collierville	Tennessee	38017
(Address of principal executive offices)		(Zip Code)

(901) 753-3200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock	MLI	NYSE

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of the Registrant’s common stock outstanding as of July 15, 2022 was 56,683,718.

MUELLER INDUSTRIES, INC.

FORM 10-Q

For the Quarterly Period Ended June 25, 2022

As used in this report, the terms “Company,” “Mueller,” and “Registrant” mean Mueller Industries, Inc. and its consolidated subsidiaries taken as a whole, unless the context indicates otherwise.

INDEX


		Page Number
Part I. Financial Information

	Item 1. – Financial Statements (Unaudited)

	a.) Condensed Consolidated Statements of Income	3

	b.) Condensed Consolidated Statements of Comprehensive Income	4

	c.) Condensed Consolidated Balance Sheets	5

	d.) Condensed Consolidated Statements of Cash Flows	6

	e.) Condensed Consolidated Statements of Changes in Equity	8

	f.) Notes to Condensed Consolidated Financial Statements	10

	Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations	26

	Item 3. – Quantitative and Qualitative Disclosures About Market Risk	36

	Item 4. – Controls and Procedures	38

Part II. Other Information

	Item 1. – Legal Proceedings	38

	Item 1A – Risk Factors	38

	Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds	39

	Item 6. – Exhibits	40

Signatures		41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	For the Quarter Ended				For the Six Months Ended
(In thousands, except per share data)	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021

Net sales	$	1,150,042	$	1,012,592	$	2,160,044	$	1,830,740

Cost of goods sold	820,914		799,712		1,565,425		1,468,130
Depreciation and amortization	11,302		11,134		22,143		22,889
Selling, general, and administrative expense	48,956		43,932		96,412		89,367
Gain on sale of assets	—		—		(5,507)		—





Operating income	268,870		157,814		481,571		250,354

Interest expense	(147)		(1,866)		(305)		(6,335)
Redemption premium	—		(5,674)		—		(5,674)
Other income, net	2,203		683		2,983		1,260

Income before income taxes	270,926		150,957		484,249		239,605

Income tax expense	(68,290)		(39,006)		(122,489)		(60,767)
Income (loss) from unconsolidated affiliates, net of foreign tax	4,888		(1,019)		5,012		(2,668)

Consolidated net income	207,524		110,932		366,772		176,170

Net income attributable to noncontrolling interests	(972)		(2,100)		(1,904)		(4,231)

Net income attributable to Mueller Industries, Inc.	$	206,552	$	108,832	$	364,868	$	171,939

Weighted average shares for basic earnings per share	55,787		55,946		55,943		55,931
Effect of dilutive stock-based awards	741		866		776		811

Adjusted weighted average shares for diluted earnings per share	56,528		56,812		56,719		56,742

Basic earnings per share	$	3.70	$	1.95	$	6.52	$	3.07

Diluted earnings per share	$	3.65	$	1.92	$	6.43	$	3.03

Dividends per share	$	0.25	$	0.13	$	0.50	$	0.26

See accompanying notes to condensed consolidated financial statements.

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	For the Quarter Ended				For the Six Months Ended
(In thousands)	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021

Consolidated net income	$	207,524	$	110,932	$	366,772	$	176,170

Other comprehensive (loss) income, net of tax:
Foreign currency translation	(17,120)		3,515		(15,907)		7,902
Net change with respect to derivative instruments and hedging activities, net of tax of $3,450, $961, $2,846, and $814	(11,886)		(3,337)		(9,795)		(2,844)
Net change in pension and postretirement obligation adjustments, net of tax of $31, $1, $(103), and $57	(299)		74		121		(17)
Attributable to unconsolidated affiliates, net of tax of $(656), $219, $(1,280), and $(358)	2,261		(753)		4,409		1,234

Total other comprehensive (loss) income, net	(27,044)		(501)		(21,172)		6,275

Consolidated comprehensive income	180,480		110,431		345,600		182,445
Comprehensive loss (income) attributable to noncontrolling interests	584		(1,333)		(315)		(3,885)

Comprehensive income attributable to Mueller Industries, Inc.	$	181,064	$	109,098	$	345,285	$	178,560

See accompanying notes to condensed consolidated financial statements.

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	(Unaudited)
(In thousands, except share data)	June 25, 2022		December 25, 2021
Assets
Current assets:
Cash and cash equivalents	$	202,501	$	87,924
Accounts receivable, less allowance for doubtful accounts of $2,577 in 2022 and $2,590 in 2021	611,578		471,859
Inventories	475,951		430,244
Other current assets	45,726		28,976

Total current assets	1,335,756		1,019,003

Property, plant, and equipment, net	388,139		385,562
Operating lease right-of-use assets	22,870		23,510
Goodwill, net	162,630		171,330
Intangible assets, net	60,508		61,714
Investments in unconsolidated affiliates	70,225		61,133
Other assets	6,844		6,684

Total assets	$	2,046,972	$	1,728,936

Liabilities
Current liabilities:
Current portion of debt	$	1,112	$	811
Accounts payable	208,869		180,793
Accrued wages and other employee costs	43,586		49,629
Current portion of operating lease liabilities	5,725		6,015
Other current liabilities	159,479		145,191

Total current liabilities	418,771		382,439

Long-term debt, less current portion	1,131		1,064
Pension liabilities	4,684		5,572
Postretirement benefits other than pensions	11,924		11,961
Environmental reserves	16,300		17,678
Deferred income taxes	11,712		14,347
Noncurrent operating lease liabilities	15,899		17,099
Other noncurrent liabilities	20,928		21,813

Total liabilities	501,349		471,973

Equity
Mueller Industries, Inc. stockholders' equity:
Preferred stock - $1.00 par value; shares authorized 5,000,000; none outstanding	—		—
Common stock - $.01 par value; shares authorized 100,000,000; issued 80,183,004; outstanding 56,730,133 in 2022 and 57,295,961 in 2021	802		802
Additional paid-in capital	291,228		286,208
Retained earnings	1,794,811		1,458,489
Accumulated other comprehensive loss	(72,930)		(53,347)
Treasury common stock, at cost	(503,448)		(470,034)

Total Mueller Industries, Inc. stockholders' equity	1,510,463		1,222,118
Noncontrolling interests	35,160		34,845

Total equity	1,545,623		1,256,963

Commitments and contingencies	—		—

Total liabilities and equity	$	2,046,972	$	1,728,936

See accompanying notes to condensed consolidated financial statements.

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Six Months Ended
(In thousands)	June 25, 2022		June 26, 2021

Cash flows from operating activities
Consolidated net income	$	366,772	$	176,170
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization	22,322		22,975
Stock-based compensation expense	5,171		4,817
Provision for doubtful accounts receivable	151		1,280
(Income) loss from unconsolidated affiliates	(5,012)		2,668
Redemption premium	—		5,674
Gain on disposals of properties	(6,800)		(819)






Deferred income tax (benefit) expense	(373)		3,252
Changes in assets and liabilities, net of effects of businesses acquired and sold:
Receivables	(146,438)		(190,944)
Inventories	(49,354)		(63,949)
Other assets	(6,095)		(5,482)
Current liabilities	28,906		50,456
Other liabilities	(4,283)		3,429
Other, net	(433)		(247)

Net cash provided by operating activities	204,534		9,280

Cash flows from investing activities
Capital expenditures	(23,248)		(17,978)
Acquisition of businesses, net of cash acquired	—		(13,935)


Payment received for (issuance of) notes receivable	—		8,539
Proceeds from sales of assets	7,561		1,730
Dividends from unconsolidated affiliates	1,609		—

Net cash used in investing activities	(14,078)		(21,644)

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Six Months Ended
(In thousands)	June 25, 2022		June 26, 2021

Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.	(27,968)		(14,546)

Repurchase of common stock	(33,469)		—

Issuance of debt	—		425,000
Repayments of debt	(111)		(400,497)
Issuance of debt by consolidated joint ventures, net	360		463
Net cash (used) received to settle stock-based awards	(95)		414
Debt issuance costs	—		(1,111)

Net cash (used in) provided by financing activities	(61,283)		9,723

Effect of exchange rate changes on cash	(2,234)		987

Increase (decrease) in cash, cash equivalents, and restricted cash	126,939		(1,654)
Cash, cash equivalents, and restricted cash at the beginning of the period	90,376		127,376

Cash, cash equivalents, and restricted cash at the end of the period	$	217,315	$	125,722

See accompanying notes to condensed consolidated financial statements.

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


	For the Quarter Ended				For the Six Months Ended
(In thousands)	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021

Common stock:
Balance at beginning of period	$	802	$	802	$	802	$	802

Balance at end of period	$	802	$	802	$	802	$	802

Additional paid-in capital:
Balance at beginning of period	$	288,802	$	282,713	$	286,208	$	280,051
Acquisition (issuance) of shares under incentive stock option plans	272		12		293		565
Stock-based compensation expense	2,598		2,708		5,171		4,817
Issuance of restricted stock	(444)		(285)		(444)		(285)

Balance at end of period	$	291,228	$	285,148	$	291,228	$	285,148

Retained earnings:
Balance at beginning of period	$	1,602,496	$	1,075,410	$	1,458,489	$	1,019,694
Net income attributable to Mueller Industries, Inc.	206,552		108,832		364,868		171,939
Dividends paid or payable to stockholders of Mueller Industries, Inc.	(14,237)		(7,430)		(28,546)		(14,821)



Balance at end of period	$	1,794,811	$	1,176,812	$	1,794,811	$	1,176,812

Accumulated other comprehensive loss:
Balance at beginning of period	$	(47,442)	$	(48,528)	$	(53,347)	$	(54,883)
Total other comprehensive (loss) income attributable to Mueller Industries, Inc.	(25,488)		266		(19,583)		6,621


Balance at end of period	$	(72,930)	$	(48,262)	$	(72,930)	$	(48,262)

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


	For the Quarter Ended				For the Six Months Ended
(In thousands)	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021

Treasury stock:
Balance at beginning of period	$	(474,258)	$	(469,251)	$	(470,034)	$	(468,919)
(Acquisition) issuance of shares under incentive stock option plans	(137)		182		(389)		(124)
Repurchase of common stock	(29,497)		—		(33,469)		(26)
Issuance of restricted stock	444		285		444		285

Balance at end of period	$	(503,448)	$	(468,784)	$	(503,448)	$	(468,784)

Noncontrolling interests:
Balance at beginning of period	$	35,744	$	26,867	$	34,845	$	24,315


Net income attributable to noncontrolling interests	972		2,100		1,904		4,231
Foreign currency translation	(1,556)		(767)		(1,589)		(346)

Balance at end of period	$	35,160	$	28,200	$	35,160	$	28,200

See accompanying notes to condensed consolidated financial statements.

MUELLER INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

General

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. Results of operations for the interim periods presented are not necessarily indicative of results which may be expected for any other interim period or for the year as a whole. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K, including the annual financial statements incorporated therein.

The accompanying unaudited interim financial statements include all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented herein.

Note 1 – Recent Accounting Standards

Adopted

In January 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2021-01, Reference Rate Reform (Topic 848): An Amendment of the FASB Accounting Standards Codification. The new guidance was issued in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR). Regulators in numerous jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The Company adopted the ASU during the first quarter of 2022. The adoption of the ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Issued

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): An Amendment of the FASB Accounting Standards Codification. The new guidance was issued to improve accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the (i) recognition of an acquired contract liability, and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU is effective for fiscal years beginning after December 5, 2022 for public entities. The updated guidance requires prospective adoption, and early adoption is permitted. The Company does not expect the adoption of the ASU to have a material impact on its Condensed Consolidated Financial Statements.

Note 2 – Earnings per Common Share

Basic per share amounts have been computed based on the average number of common shares outstanding. Diluted per share amounts reflect the increase in average common shares outstanding that would result from the assumed exercise of outstanding stock options and vesting of restricted stock awards, computed using the treasury stock method. Approximately eight thousand and five thousand stock-based awards were excluded from the computation of diluted earnings per share for the quarters ended June 25, 2022 and June 26, 2021, respectively, because they were antidilutive.

Note 3 – Acquisitions and Dispositions

Acquisitions

Mueller Middle East

On December 7, 2021 the Company entered into an agreement providing for the purchase of an additional 15 percent equity interest in Mueller Middle East for a total of 55 percent, for approximately $20.1 million. The total purchase price consisted of $15.8 million in cash paid at closing (net of cash acquired), a gain recognized on the settlement of preexisting relationships of $2.6 million, a contingent consideration arrangement of $1.0 million, and the fair value of the Company’s existing investment in the joint venture of $0.7 million. Mueller Middle East, which manufactures copper tube, is headquartered in Bahrain. This business complements the company’s existing copper tube business in the Piping Systems segment. Prior to entering into this agreement, the Company was the technical and marketing lead with a 40 percent ownership in a joint venture with Cayan Ventures and Bahrain Mumtalakat Holding Company and accounted for this investment under the equity method of accounting. The Company began consolidating this business for financial reporting purposes in December 2021. Mueller Middle East manufactures and sells copper coils to certain Mueller subsidiaries.

The provisional fair value of the assets acquired totaled $44.8 million, consisting primarily of property, plant, and equipment of $26.7 million, accounts receivable of $10.7 million, inventories of $4.7 million, and other assets of $2.7 million. The provisional fair value of the liabilities assumed totaled $15.6 million, consisting primarily of other liabilities of $11.0 million and accounts payable of $4.6 million. Of the remaining purchase price, $6.3 million was allocated to non-deductible goodwill and intangible assets. The noncontrolling interest in Mueller Middle East is $15.4 million. The purchase price allocation is provisional as of June 25, 2022 and subject to change upon completion of the final valuation of the long-lived assets and noncontrolling interest during the measurement period.

H&C Flex

On December 20, 2020, the Company entered into an asset purchase agreement with Hart & Cooley LLC. The transaction closed on January 29, 2021, whereby the Company purchased the Hart & Cooley flexible duct business, which included inventory, manufacturing equipment, and related assets for approximately $15.3 million. The total purchase price consisted of $14.0 million in cash paid at closing and a contingent consideration arrangement of $1.3 million. The Company treated this as a business combination. The acquired business, H&C Flex, is a manufacturer and distributor of insulated HVAC flexible duct systems. It is reported within and complements the Company’s existing businesses in the Climate segment.

The fair value of tangible assets acquired totaled $15.3 million, consisting primarily of property, plant, and equipment of $10.8 million and inventories of $4.5 million. The valuation of the business has been finalized. There were no material changes to the purchase price allocation from the amounts presented in the Company’s 2021 Annual Report on Form 10-K.

Dispositions

Copper Bar

On October 25, 2021, the Company sold its Copper Bar business for approximately $10.1 million. This business manufactured copper bar products used primarily by original equipment manufacturers (OEMs) in the U.S. and was included in the Industrial Metals segment. The carrying value of the assets disposed totaled $3.6 million, consisting primarily of inventories and long-lived assets. Copper Bar reported net sales of $13.4 million and an operating loss of $0.1 million in the second quarter of 2021 and net sales of $24.8 million and an operating loss of $0.2 million in the first half of 2021.

Die-Mold

On September 2, 2021, the Company entered into a contribution agreement with a limited liability company in the retail distribution business, pursuant to which the Company exchanged the outstanding common stock of Die-Mold for a 17 percent equity interest in the limited liability company. 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 was included in the Piping Systems Segment. Die-Mold reported net sales of $4.0 million and operating income of $0.8 million in the second quarter of 2021 and net sales of $7.9 million and operating income of $1.4 million in the first half of 2021. As a result of the transaction, the Company recognized a gain of $4.7 million in the third quarter of 2021 based on the excess of the fair value of the consideration received (the 17 percent equity interest) over the carrying value of Die-Mold. The Company utilized a market comparable companies approach using an EBITDA multiple to determine the fair value of the consideration received of $22.8 million, which is

recognized within the Investments in unconsolidated affiliates line of the Condensed Consolidated Balance Sheet. The excess of the fair value of the deconsolidated subsidiary over its carrying value resulted in the gain.

Fabricated Tube Products and Shoals Tubular, Inc.

On July 28, 2021, the Company entered into a purchase agreement with J.W. Harris Co., Inc. and Lincoln Electric Holdings, Inc., pursuant to which the Company sold the assets of Fabricated Tube Products (FTP) and all of the outstanding stock of Shoals Tubular, Inc. (STI) for approximately $75.7 million. These businesses manufacture and fabricate valves and assemblies, brazed manifolds, headers, and distributor assemblies used primarily by manufacturers of residential heating and air conditioning units in the U.S. and were included in the Climate segment. They reported combined net sales of $17.1 million and operating income of $2.8 million in the second quarter of 2021 and net sales of $31.8 million and operating income of $5.0 million in the first half of 2021. The carrying value of the assets disposed totaled $32.7 million, consisting primarily of accounts receivable, inventories, and long-lived assets. The carrying value of the liabilities disposed totaled $3.6 million, consisting primarily of accounts payable. As a result of the transaction, the Company recognized a pre-tax gain of $46.6 million during the third quarter of 2021 on the sale of these businesses in the Condensed Consolidated Financial Statements.

Note 4 – 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, European Operations, Trading Group, Jungwoo-Mueller (the Company’s South Korean joint venture), and Mueller Middle East (the Company’s Bahraini joint venture). The Domestic Piping Systems Group manufactures and distributes 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. European Operations manufactures 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. Mueller Middle East manufactures copper tube and serves markets in the Middle East and Northern Africa. 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.

Beginning in fiscal year 2022, the results of Precision Tube are included in the Industrial Metals segment prospectively as the impact to prior periods was not material. The business was previously reported in the Piping Systems segment. This change was made to reflect the Company’s internal management reporting structure.

Industrial Metals

Industrial Metals is composed of the following operating segments: Brass Rod, Impacts & Micro Gauge, Brass Value-Added Products, and Precision Tube. These businesses manufacture brass rod, impact extrusions, and forgings, specialty copper, copper alloy, and aluminum tube, 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, Westermeyer, Turbotec, Flex Duct, and Linesets, Inc. These domestic businesses manufacture refrigeration valves and fittings, 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.

Summarized segment information is as follows:


	For the Quarter Ended June 25, 2022
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	824,807	$	179,175	$	164,484	$	(18,424)	$	1,150,042

Cost of goods sold	585,090		150,940		103,110		(18,226)		820,914
Depreciation and amortization	5,930		1,846		2,348		1,178		11,302
Selling, general, and administrative expense	22,208		2,221		8,279		16,248		48,956






Operating income	211,579		24,168		50,747		(17,624)		268,870

Interest expense									(147)

Other income, net									2,203

Income before income taxes									$	270,926


	For the Quarter Ended June 26, 2021
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	711,616	$	180,040	$	131,708	$	(10,772)	$	1,012,592

Cost of goods sold	558,278		155,399		96,303		(10,268)		799,712
Depreciation and amortization	5,515		1,694		2,753		1,172		11,134
Selling, general, and administrative expense	23,315		2,448		7,280		10,889		43,932




Operating income	124,508		20,499		25,372		(12,565)		157,814

Interest expense									(1,866)
Redemption premium									(5,674)
Other income, net									683

Income before income taxes									$	150,957

Segment information (continued):


	For the Six Months Ended June 25, 2022
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	1,528,237	$	353,487	$	305,106	$	(26,786)	$	2,160,044

Cost of goods sold	1,099,277		296,650		197,067		(27,569)		1,565,425
Depreciation and amortization	11,330		3,790		4,700		2,323		22,143
Selling, general, and administrative expense	45,563		5,620		15,892		29,337		96,412
Gain on sale of assets	—		—		—		(5,507)		(5,507)





Operating income	372,067		47,427		87,447		(25,370)		481,571

Interest expense									(305)

Other income, net									2,983

Income before income taxes									$	484,249


	For the Six Months Ended June 26, 2021
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations		Total

Net sales	$	1,259,364	$	344,892	$	242,734	$	(16,250)	$	1,830,740

Cost of goods sold	1,008,632		296,290		180,385		(17,177)		1,468,130
Depreciation and amortization	11,725		3,437		5,382		2,345		22,889
Selling, general, and administrative expense	47,401		5,819		14,260		21,887		89,367




Operating income	191,606		39,346		42,707		(23,305)		250,354

Interest expense									(6,335)
Redemption premium									(5,674)
Other income, net									1,260

Income before income taxes									$	239,605

The following table presents total assets attributable to each segment:


(In thousands)	June 25, 2022		December 25, 2021

Segment assets:
Piping Systems	$	1,298,116	$	1,160,272
Industrial Metals	195,907		173,290
Climate	288,776		250,107
General Corporate	264,173		145,267

	$	2,046,972	$	1,728,936

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 25, 2022
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	674,579	$	—	$	—	$	674,579
Brass rod and forgings	—		142,788		—		142,788
OEM components, tube & assemblies	—		20,254		32,526		52,780
Valves and plumbing specialties	150,228		—		—		150,228
Flex duct and other HVAC components	—		—		131,958		131,958
Other	—		16,133		—		16,133

	824,807		179,175		164,484		1,168,466

Intersegment sales							(18,424)

Net sales							$	1,150,042


	For the Quarter Ended June 26, 2021
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	567,092	$	—	$	—	$	567,092
Brass rod and forgings	—