WLV Wolverine Tube

Wolverine Tube Announces Second Quarter Earnings Strongest Operating Profit In Twelve Quarters HUNTSVILLE, Ala., July 29 /PRNewswire-FirstCall/ -- Wolverine Tube, Inc. (NYSE:WLV) today reports results for the second quarter and six months ended July 4, 2004. Net income for the second quarter of 2004 was $3.0 million, or $0.23 per diluted share, compared with net income of $100 thousand, or $0.01 per diluted share in the second quarter of 2003. Income from continuing operations was $3.3 million or $0.25 per diluted share. The second quarter results include $615 thousand in charges, which is comprised of $420 thousand relating to the repurchase of $4.1 million of our 101/2 percent notes and $195 thousand in restructuring charges primarily relating to the previously announced Booneville closure. Income from continuing operations, excluding these charges was $3.9 million or $0.30 per diluted share. Net sales for the second quarter of 2004 were $214.1 million compared with $153.0 million in the year-earlier period. Average COMEX copper prices for the second quarter of 2004 were $1.23 per pound compared to $0.75 per pound in the same quarter of the prior year. Total pounds of product shipped were 91.4 million pounds, an increase of 6.6 percent over the prior year. Gross profit for the second quarter of 2004 increased to $21.6 million from $12.6 million in the second quarter of 2003, a 71 percent increase. Results for the first half of fiscal 2004 are outlined in the accompanying tables. Commenting on the announcement, Dennis Horowitz, Chairman, President and Chief Executive Officer said, "The overall industrial economy, which has impacted our results for quite sometime, is recovering. This has translated into increased demand for almost all Wolverine products, which in turn has resulted in a level of earnings not achieved in twelve quarters. The commercial products segment enjoyed growth, not only due to stronger markets, but also due to market share gains." Horowitz continued, "In addition, the wholesale products segment experienced strong demand, customer gains and markedly stronger pricing. Furthermore, profits were positively impacted by our manufacturing facilities operating at improved levels and efficiencies. Also, on a very positive note, cash generated from operations reached $16.0 million versus a use of cash of $2.8 million in the second quarter of 2003. Our cash balance after fully paying off our outstanding short term borrowings was $42.6 million, including approximately $18.5 million cash generated from our private equity transaction, previously announced." Second Quarter Results by Segment Shipments of commercial products totaled 62.3 million pounds, a 7.4 percent increase from last year's second quarter shipments of 58.0 million pounds. Net sales were $155.0 million, up 34.0 percent from last year's second quarter sales of $115.7 million. Gross profit was $16.1 million, up 32.9 percent from last year's second quarter gross profit of $12.1 million. The second quarter has benefited from continued strength in HVAC/R markets, continued growth in commercial construction and favorable outsourcing trends by our customers to our fabricated products facilities. Shipments of wholesale products totaled 22.9 million pounds, a 2.6 percent decrease over last year's second quarter shipments of 23.5 million pounds. Net sales were $43.1 million, up 51.4 percent from last year's second quarter sales of $28.5 million. Gross profit was $3.5 million, as compared to last year's second quarter of $400 thousand. This substantial improvement is principally due to higher prices, in both the United States and Canadian markets. Shipments of rod, bar and other products totaled 6.2 million pounds, a 46.5 percent increase from last year's second quarter shipments of 4.2 million pounds. Net sales were $15.9 million, up 80.6 percent from the second quarter of the year-earlier period. Gross profit was $2.0 million, up from last year's $100 thousand. Increased volumes and pricing were the major drivers of improvement. Outlook Commenting on the outlook for the Company, Horowitz said, "We continue to be optimistic about new products and their applications. Demand and pricing in our Wholesale and Rod and Bar business segments have improved. While pricing can be erratic in Wholesale, we see no current adverse trends and do not expect prices to plunge to levels of 2003." "Historically," added Horowitz, "in terms of earnings, our second quarter is our strongest, the first and third quarter earnings are about the same and the fourth quarter is the slowest. This was not the case in recent years, as business was impacted by the erratic economy. While we do not give specific earnings guidance, we expect 2004 to return to more normal patterns." Second Quarter Conference Call The Company will hold a conference call this morning at 9:30 a.m. Central Time (10:30 a.m. ET) to discuss the contents of this release. Dial in to the conference call line at (800) 311-9402 Access Code: Wolverine, ten minutes prior to the scheduled start time. A link to the broadcast can be found on the Company's website at http://www.wlv.com/ , in the Investor Relations section under "Conference Calls" link. If you are unable to participate at this time, a replay will be available through August 12, 2004, on this website or by calling (800) 858-5309 (access code 40179, pass code 40179). Should you have any problems accessing the call or the replay, please contact the Company at (256) 890-0460. The tables following the text of this press release provide financial details that are included in this press release and that will be discussed on the conference call. This includes a reconciliation of income from continuing operations to earnings before interests, taxes, depreciation and amortization. This press release, including these financial details, is now available on the Wolverine website at http://www.wlv.com/ in the Investor Relations section under the heading Press Releases. About Wolverine Tube, Inc. Wolverine Tube, Inc. is a world-class quality partner, providing its customers with copper and copper alloy tube, fabricated products, metal joining products as well as copper and copper alloy rod, bar and other products. Internet addresses http://www.wlv.com/ and http://www.silvaloy.com/ . Forward-looking statements in this press release are made pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements use such words as "may", "will", "expect", "believe", "plan", "anticipate" and other similar terminologies. This press release contains forward-looking statements regarding factors affecting the Company's expectations of future sales, earnings and cash flows. Such statements are based on current expectations, estimates and projections about the industry and markets in which the Company operates, as well as management's beliefs and assumptions and information currently available. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements. The Company undertakes no obligation to publicly release any revision of any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. With respect to expectations of future sales, earnings and cash flows, factors that could affect actual results include, without limitation, the effect of currency fluctuations, raw material costs and our ability to effectively hedge these costs, the magnitude of recovery in the economy, costs and cost savings related to the Booneville closing, the levels of U.S. commercial construction activity, competitive products and pricing, environmental contingencies, regulatory pressures, technology, the mix of geographic and product revenues, and any inability to achieve or delays in achieving anticipated results from our cost reduction initiatives (including our workforce reduction program), product and process development activities, productivity and efficiency initiatives, global expansion activities, market share penetration efforts and working capital management programs. A discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, can be found in the Company's Annual Report on Form 10-K for the most recently ended fiscal year and reports filed from time to time with the Securities and Exchange Commission. WOLVERINE TUBE, INC. FINANCIAL DATA Consolidated Statements of Operations (Unaudited) Three-month period Six-month period In thousands, except ended ended per share data 07/04/2004 06/29/2003 07/04/2004 06/29/2003 Pounds shipped 91,352 85,727 184,704 166,765 Net sales $214,080 $152,978 $419,885 $296,475 Cost of goods sold 192,499 140,373 380,819 269,248 Gross profit 21,581 12,605 39,066 27,227 Selling, general and administrative expenses 10,062 7,565 19,499 15,707 Restructuring charges 294 - 865 - Operating income from continuing operations 11,225 5,040 18,702 11,520 Interest expense, net 5,760 5,292 10,830 10,470 Amortization and other, net 1,106 492 1,774 1,034 Income (loss) from continuing operations before income taxes 4,359 (744) 6,098 16 Income tax provision (benefits) 1,059 (843) 1,430 (721) Income from continuing operations 3,300 99 4,668 737 Loss from discontinued operations, net of income tax (252) - (252) - Net income $3,048 $99 $4,416 $737 Basic earnings per share: Continuing operations $0.26 $0.01 $0.37 $0.06 Discontinued operations (0.02) - (0.02) - Net income $0.24 $0.01 $0.35 $0.06 Diluted earnings per share: Continuing operations $0.25 $0.01 $0.37 $0.06 Discontinued operations $(0.02) $- $(0.02) $- Net income $0.23 $0.01 $0.35 $0.06 Basic shares 12,648 12,277 12,469 12,270 Diluted shares 13,063 12,489 12,764 12,426 Segment Information (Unaudited) Three-month period Six-month period ended ended In thousands 07/04/2004 06/29/2003 07/04/2004 06/29/2003 Pounds: Commercial 62,302 58,017 123,372 114,254 Wholesale 22,886 23,502 48,817 43,482 Rod, bar, and other 6,164 4,208 12,515 9,029 Total pounds 91,352 85,727 184,704 166,765 Net sales: Commercial $155,024 $115,681 $299,951 $226,001 Wholesale 43,109 28,468 88,683 52,405 Rod, bar, and other 15,947 8,829 31,251 18,069 Total net sales $214,080 $152,978 $419,885 $296,475 Gross Profit: Commercial $16,081 $12,097 $30,998 $25,875 Wholesale 3,501 398 5,248 462 Rod, bar, and other 1,999 110 2,820 890 Total gross profit $21,581 $12,605 $39,066 $27,227 WOLVERINE TUBE, INC. Condensed Consolidated Balance Sheets (Unaudited) In thousands 07/04/2004 06/29/2003 12/31/2003 Assets Cash and cash equivalents $42,649 $32,305 $46,089 Accounts receivable 117,300 88,599 86,825 Inventory 112,490 93,003 108,005 Other current assets 17,827 17,583 12,782 Property, plant and equipment, net 193,108 208,342 198,542 Other assets 99,331 127,194 101,015 Total assets $582,705 $567,026 $553,258 Liabilities and Stockholders' Equity Accounts payables and other accrued expenses $84,530 $49,014 $77,290 Short-term borrowings 529 1,783 1,502 Deferred income taxes 1,666 9,518 359 Pension liabilities 23,647 17,541 22,316 Long-term debt 249,670 257,325 254,284 Other liabilities 18,233 17,683 18,156 Total liabilities 378,275 352,864 373,907 Stockholders' equity 204,430 214,162 179,351 Total liabilities and stockholders' equity $582,705 $567,026 $553,258 Reconciliation of Income from Continuing Operations to Earnings Before Interest, Taxes, Depreciation and Amortization (1) (Unaudited) Three-month period Six-month period ended ended 07/04/2004 06/29/2003 07/04/2004 06/29/2003 In thousands Income from continuing operations $3,300 $99 $4,668 $737 Interest expense, net 5,760 5,292 10,830 10,470 Income tax provision (benefit) 1,059 (843) 1,430 (721) Depreciation and amortization 4,365 4,757 9,033 9,374 Earnings before interest, taxes, depreciation and amortization $14,484 $9,305 $25,961 $19,860 (1) This statement reconciles income from continuing operations to earnings before interest, taxes, depreciation and amortization (EBITDA), which is a non-GAAP financial measure. Management believes EBITDA is a meaningful measure of financial performance. Contact: James E. Deason Executive Vice President Chief Financial Officer (256) 580-3500 DATASOURCE: Wolverine Tube, Inc. CONTACT: James E. Deason, Executive Vice President, Chief Financial Officer of Wolverine Tube, Inc., +1-256-580-3500 Web site: http://www.wlv.com/ http://www.silvaloy.com/

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