Only top brass make it in Mueller Industries' business. That and copper, aluminum, and plastic -- materials used to make Mueller tubes and fittings, bars and rods, forgings, extrusions, pipes, and valves. Mueller also resells a myriad of products, from brass and plastic plumbing valves to faucets and malleable iron fittings. Its work is divided between two segments: Plumbing & Refrigeration (a Standard Products Division, and European and Mexican Operations) and OEM (Industrial and Engineered Products Divisions, and Chinese joint venture Mueller-Xingrong). Mueller sells to HVAC, plumbing, and refrigeration wholesalers and OEMs, housing construction and RV distributors, and building material retailers worldwide.
Sales, largely in the US, are supported by manufacturing operations in the US, as well as in Canada, China, Mexico, and the UK. The plants make products for the housing starts, commercial construction, and repair and remodeling markets -- all of which are taking longer to recuperate from the economic downturn. Commercial construction in the US declined 25% between 2009 and 2010, and new housing starts were thwarted by high unemployment rate, as well as the expiration of the homebuyer tax incentives in spring 2010.
Despite its established presence, Mueller was not exempt to the economic recession, since the company's core business segments for HVAC, refrigeration, and plumbing-related products were all affected. Still, both of Mueller's divisions managed to realize sales increases of about 33% each. This is the first gain the company has experienced in four years, and it comes on the heels of a 40% loss in sales revenue in 2009 compared to 2008.
Mueller cites an increase in volume in its primary product lines and an increase in metal prices (especially copper), for bumping up its revenue. The company's 2010 bottom line skyrocketed from less than $5 million to $86 million. Some of the reasons for this include the receipt of a $23 million insurance settlement for a fire at one of Mueller's plants, $46 million in accounts receivable, and a $17 million increase in inventory.
To weather the economic tough times, Mueller implemented a number of measures to help realign production with demand; it cut its workforce by more than 15%, as well as streamlined operating processes. On the bright side, adverse economic conditions triggered a string of bargain-priced acquisition opportunities. Among them was Texas-based Tube Forming (TFI), a subsidiary of rival Wolverine Tube. Mueller acquired the assets for almost $7 million in 2011. TFI manufactures return bends and crossovers, and tube components and brazed assemblies for the HVAC and refrigeration market. The deal, which is part of Wolverine Tube's reorganization plan, strengthens Mueller's position for capitalizing on an economic recovery. – less