HUNTSVILLE, Ala., May 15, 2008 (PRIME NEWSWIRE) -- Wolverine Tube, Inc. (OTCBB:WLVT) today reported results for the first quarter 2008. Net income for the first quarter of 2008 was $3.8 million compared to a net loss of $2.2 million in the same period of 2007. The 2008 results include $4.5 million in pre-tax charges relating primarily to restructuring, advisory fees and severance expenses and $7.4 million in gains from the sale of 30% interest in a subsidiary and the sale of the Company's small tube products business.
First Quarter Highlights
* Established a joint venture with the Wieland Group through the sale
of 30% of Wolverine Shanghai for $9.5 million cash and $2.1 million
of other consideration. The venture will focus on rapidly growing
Asia-Pacific markets and demand for high performance technical
tubes.
* Completed the sale of our small tube products business resulting in
net proceeds of $22.5 million plus a future working capital
adjustment;
* The Alpine Group, Inc. purchased an additional $14.6 million in
Convertible Preferred Stock, convertible at $1.10 per share;
* Plainfield Asset Management, LLC ("Plainfield") refinanced and
exchanged $38.3 million of the Company's 7.375% Senior Notes for a
10.5% Note maturing on March 28, 2009;
* Extended the maturity dates of our $35.0 million secured revolving
credit facility and our $75.0 million receivables sales facility to
April 28, 2009 and February 19, 2009, respectively;
* All global tube manufacturing operations demonstrated improved
technical tube productivity in first quarter 2008 with Shawnee,
Oklahoma having the largest gain at 115% compared to 2007 levels;
* Wolverine Tube Shanghai achieved record shipments and
profitability; Asia-Pacific technical tube sales increased 144%
over prior year;
* Global tube business total inventory turns increased by 23% over
prior year;
* Tube operations achieved reductions of 4.3% of ex-material cost.
Net sales for the first quarter of 2008 were $255.8 million, as compared to $263.9 million for the first quarter of 2007. Total pounds shipped in the first quarter of 2008 were 53.8 million pounds compared to 65.1 million pounds shipped in the first quarter of 2006. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") was $7.4 million for the first quarter of 2008 compared to $9.1 million for the quarter ended April 1, 2007. The year over year decline in adjusted EBITDA is primarily due to strong EBITDA contribution in 2007 from the U.S. plumbing tube business, which was discontinued at December 31, 2007. 2007 domestic plumbing tube margins benefited from strong demand in residential markets, which was substantially softer by the second half of 2007.
Mr. Harold Karp, President and Chief Operating Officer, commented, "The transactions accomplished in the first quarter are in support of our new strategic business model. The sale of the small tube products business was in line with our focus on value added, heat transfer tubing products, fabricated products and joining technology products. The partnership established with the Wieland Group in China will strengthen Wolverine's technology and enhance service to our customers in the high growth Asia-Pacific region."
Mr. Karp further commented that "shipment volume in Wolverine's fabricated products and joining technologies operations was down 9% as a result of softness in the residential and light commercial HVAC and appliance markets. In spite of the slow HVAC market, overall commercial products gross profits increased, driven by strong global technical tube shipments, cost reductions and productivity improvements."
ABOUT WOLVERINE TUBE, INC.
Wolverine Tube, Inc. is a world-class quality partner, providing its customers with copper and copper alloy tube, fabricated products, and metal joining products. Internet addresses http://www.wlv.com and http://www.silvaloy.com.
FORWARD-LOOKING STATEMENTS
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", "should", "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 operating and financial results and liquidity. 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 about the Company's business and other 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. 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
In thousands, except per share data ended
3/30/2008 4/1/2007
--------- ---------
Net sales $ 255,837 $ 263,938
Cost of goods sold 243,156 250,037
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Gross profit 12,681 13,901
Selling, general and administrative expenses 7,560 7,317
Advisory fees and severance expenses 524 3,680
Restructuring charges 3,938 2,923
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Operating income (loss) 659 (19)
Loss on sale of receivables 104 507
Interest and amortization expense, net 5,568 5,932
Embedded derivatives mark to fair value -- (4,090)
Gain on sale of minority interest in Chinese
subsidiary (5,383) --
Other (income) expense, net (1,110) 418
----------------------------------------------- --------------------
Income (loss) from continuing operations before
minority interest in Chinese subsidiary and
income taxes 1,480 (2,786)
Minority interest in Chinese subsidiary 81 --
Income tax provision 1,101 896
--------- ---------
Net income (loss) from continuing operations 298 (3,682)
Income from discontinued operations, net of
income taxes 3,519 1,532
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Net income (loss) 3,817 (2,150)
Less: Accretion of convertible preferred stock
to redemption value 1,255 852
Less: Preferred stock dividends, including
$9,618 million non-cash deemed dividends
recognized in the first quarter of 2007 1,191 10,118
----------------------------------------------- --------------------
Net income (loss) applicable to common shares $ 1,371 $ (13,120)
========= =========
----------------------------------------------- --------------------
Net income (loss) income per share (1):
Basic:
Continuing operations $ (0.05) $ (0.97)
Discontinued operations 0.04 0.10
----------------------------------------------- --------------------
Net income (loss) per common share - Basic $ (0.01) $ (0.87)
Diluted:
Continuing operations $ (0.05) $ (0.97)
Discontinued operations 0.04 0.10
----------------------------------------------- --------------------
Net income (loss) per common share - Diluted $ (0.01) $ (0.87)
Common shares outstanding:
Basic 40,624 15,132
Diluted 40,812 15,132
----------------------------------------------- --------------------
(1) For both quarters ended March 30, 2008 and April 1, 2007 basic and
diluted EPS are calculated, in accordance with General Accepted
Accounting Principles ("GAAP"), by using the two-class method.
Segment Information (Unaudited)
The Company currently operates in Commercial Products and Wholesale
Products segments. Commercial Products include technical, industrial
and copper alloy tubes, fabricated products, and metal joining
products. Wholesale Products include plumbing and refrigeration tube.
Prior to 2007, the Company's business also included a Rod, Bar and
Other Products segment comprising a broad range of copper and copper
alloy solid products as well as a distribution business in the
Netherlands. As a result of the closing of our Montreal, Quebec rod
and bar facility, we exited the rod, bar and other products segment at
the end of 2006. The Netherlands distribution business, which was
historically included in the Rod, Bar and Other Products segment, is
now included in the Commercial Products segment for the current
quarter and the comparable period in 2007.
Three-month period
ended
In thousands 3/30/2008 4/1/2007
--------- ---------
Pounds Shipped:
Commercial 45,814 46,247
Wholesale 7,946 18,836
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Total pounds shipped 53,760 65,083
=============================================== ========= =========
Net sales:
Commercial $ 219,704 $ 198,421
Wholesale 36,133 65,517
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Total net sales $ 255,837 $ 263,938
=============================================== ========= =========
Gross Profit:
Commercial $ 10,417 $ 10,075
Wholesale 2,264 3,826
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Total gross profit $ 12,681 $ 13,901
=============================================== ========= =========
WOLVERINE TUBE, INC.
Condensed Consolidated Balance Sheet (Unaudited)
In thousands 3/30/2008 12/31/2007
----------------------------------------------- --------- ----------
Assets
Cash and cash equivalents $ 75,436 $ 63,303
Restricted cash 7,591 2,126
Accounts receivable, net 134,544 107,375
Inventory 123,551 110,768
Assets held for sale 16,996 43,001
Other current assets 16,447 12,536
Property, plant and equipment, net 66,104 65,762
Other assets 54,824 51,802
----------------------------------------------- --------- ---------
Total assets $ 495,493 $ 456,673
=============================================== ========= =========
Liabilities and Stockholders' Equity
Accounts payables and accrued expenses $ 111,785 $ 82,858
Short-term borrowings 125,499 90,939
Liabilities held for sale -- 1,853
Deferred income taxes 671 677
Pension liabilities 16,804 17,616
Long-term debt 99,229 146,021
Other liabilities 42,196 43,410
----------------------------------------------- --------- ---------
Total liabilities 396,184 383,374
----------------------------------------------- --------- ---------
Minority interest in Chinese subsidiary 6,298 --
Preferred stock 19,843 4,393
Total stockholders' equity 73,168 68,906
----------------------------------------------- --------- ---------
Total liabilities, minority interest in Chinese
subsidiary and stockholders' equity $ 495,493 $ 456,673
=============================================== ========= =========
This press release contains references to adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA), a non-GAAP
financial measure. The following table provides a reconciliation of
adjusted EBITDA to net income (loss). Management believes adjusted
EBITDA is a meaningful measure of liquidity and the Company's ability
to service debt because it provides a measure of cash available for
such purposes. Additionally, management provides an adjusted EBITDA
measure so that investors will have the same financial information
that management uses with the belief that it will assist investors in
properly assessing the Company's performance on a year-over-year and
quarter-over-quarter basis.
Reconciliation of Net Income (Loss) to Adjusted Earnings Before
Interest, Taxes, Depreciation, Amortization,Restructuring and
One-time Events (Unaudited)
Three-month period
ended
In thousands 3/30/2008 4/1/2007
--------- ---------
Net income (loss) $ 3,817 $ (2,150)
Depreciation and amortization 2,558 3,581
Interest expense, net (including loss on sale of
receivables) 4,975 5,832
Impairment of assets and non-cash portion of
restructuring charges (57) 1,328
Income tax provision 1,101 896
--------- ---------
Earnings before interest, taxes, depreciation
and amortization 12,394 9,487
Advisory fees and severance expenses 524 3,680
Non-cash expense (gain) on embedded derivative
(mark to fair value) -- (4,090)
Other restructuring charges 3,995 1,595
Income from discontinued operations (3,519) (1,532)
Gain on sale of minority interest in Chinese
subsidiary (5,383) 0
Gain on early extinguishment of debt (600) 0
---------------------------------------------------------- ---------
Adjusted earnings before interest, taxes,
depreciation and amortization and one-time
events $ 7,411 $ 9,140
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