MUELLER INDUSTRIES INC
For the period ended Dec 28, 2024. Filed Feb 26, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 26, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Report of Independent Registered Public Accounting Firm F-
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Mueller Industries, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Mueller Industries, Inc. (the Company) as of December 28, 2024 and December 30, 2023, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 28, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 28, 2024 and December 30, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 28, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
| Valuation of the Customer Relationships and Trade Name Intangible Assets in the Acquisition of Nehring Electrical Works Company | |
| Description of the Matter | As disclosed in Notes 1 and 2 to the consolidated financial statements, on May 28, 2024, the Company completed the acquisition of Nehring Electrical Works Company and certain of its affiliated companies (collectively, “Nehring”). The total purchase consideration in connection with the acquisition was $569.2 million, net of working capital adjustments, of which $208.1 million was allocated to customer relationships and $54.5 million was allocated to a trade name. The excess of the purchase price over the estimated fair value of the net assets acquired, including identifiable intangible assets, at the acquisitions date was allocated to goodwill. The Company accounted for this acquisition as a business combination.Auditing the Company's accounting for its acquisition of Nehring was complex due to the significant estimation uncertainty in determining the fair value of identified intangible assets, which principally consisted of customer relationships and a trade name. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to certain underlying assumptions. These significant assumptions used to estimate the value of the customer relationships intangible asset included projected revenue growth rates, EBITA, discount rate, and the pre-tax return on the trade name. Related to the trade name intangible asset, the significant assumption was the royalty rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions. |
|---|---|
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the Company’s accounting for acquisitions. For example, we tested controls over the estimation process supporting the recognition and measurement of the identified intangible assets, including the customer relationships and trade name intangible assets, which encompassed testing controls over management’s review of assumptions used in the valuation model as well as the completeness and accuracy of the data used in these fair value estimates. To test the estimated fair value of the customer relationships and trade name intangible assets, our audit procedures included, among others, evaluating the valuation methodologies used, evaluating the significant assumptions discussed above and testing the completeness and accuracy of the underlying data. As it pertains to projected revenue growth rates and EBITA related to the customer relationship asset, we compared the assumptions used by management to past performance of Nehring and forecasted performance of the guideline public companies. We also performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the customer relationships and trade name intangible assets that would result from changes in the significant assumptions. In addition, we involved our valuation specialists to assist with our evaluation of the methodology used by the Company and certain significant assumptions, including the pre-tax return on trade name and discount rate used to value the customer relationship asset and the royalty rate used to value the trade name asset. |
We have served as the Company’s auditor since 1991.
Memphis, Tennessee
February 26, 2025
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.