WLV Wolverine Tube

Wolverine Tube Reports First Quarter 2004 Results Earnings Per Share Increases 120 Percent HUNTSVILLE, Ala., April 27 /PRNewswire-FirstCall/ -- Wolverine Tube, Inc. today reported results for the first quarter ending April 4, 2004. Net income for the first quarter of 2004 was $1.4 million, or $0.11 per diluted share, versus net income of $0.6 million or $0.05 per diluted share, in the first quarter of 2003, a 120 percent improvement. Included in net income was a $0.4 million, or $0.03 per diluted share, restructuring charge primarily related to the previously announced Booneville closure. Excluding this charge, net income would have been $1.8 million or $0.14 per diluted share, a 180 percent improvement. Net sales for the first quarter of 2004 were $205.8 million, a 43.4 percent increase over the first quarter of 2003. This growth in sales is due to increased volumes, improved pricing with a richer mix of product, and rising copper prices. In the first quarter of 2004 Comex copper prices averaged $1.23 per pound compared to $0.76 per pound in the first quarter of 2003. Total pounds of product shipped were 93.4 million, up 15 percent over the prior year. Gross profit for the first quarter of 2004 increased 19.9 percent to $17.5 million as compared to $14.6 million in the first quarter of 2003. Commenting on the results, Dennis Horowitz, Chairman, President and Chief Executive Officer, said, "Several favorable factors, some external to Wolverine and some internal to the Company, were the main drivers for this improvement. A strengthening business environment translated into stronger results. Our newest products are being increasingly accepted by our customers and will play an important role going forward. Our wholesale market strategy has resulted in expanded distribution channels and volumes. The continuing trend to outsource non-core manufacturing, by our customers, is spurring growth in fabricated products. Finally, our geographic expansion has resulted in increased sales not only to North American based customers, but also customers indigenous to the Asian and European markets." First Quarter Results by Segment Shipments of commercial products totaled 61.1 million pounds, an 8.7 percent increase over the first quarter 2003 of 56.2 million pounds. Net sales improved 31.4 percent to $144.9 million. The growth in sales reflects volume increases, improved pricing with a richer mix of products and a sharp rise in metal prices. In our commercial segment, Comex copper prices are generally a pass through to our customers. Gross profit increased 8.0 percent to $14.9 million from the prior year's first quarter of $13.8 million. Gross profit growth reflects higher volumes, improved selling price and slightly higher manufacturing costs, due to richer mix and Canadian currency translation impacts. Shipments of wholesale products totaled 25.9 million pounds, as compared to last year's first quarter of 20.0 million pounds. Net sales increased 90.4 percent to $45.6 million from the prior year's first quarter. Gross profit was $1.7 million compared to last year's first quarter of $64 thousand. The improvement in gross profit is due to gains in both volumes and pricing spurred by the general economy and commercial construction. Shipments of rod, bar and other totaled 6.4 million pounds, a 33.3 percent increase from the first quarter of 2003. Net sales reached $15.3 million, a 66.3 percent increase from the first quarter in the prior year. These results reflect the increase in metal pricing, as well as a 4.7 percent or three cents per pound increase in fabrication revenues, due to better pricing and a richer mix of products. Earnings Outlook Commenting on the outlook for the Company, Horowitz said, "In the first quarter we enjoyed improvements in all of our product groups. We see these improvements continuing into the second quarter. This reflects not only a recovering U.S. economy, the benefits of our strong global market presence, but also includes: continued market penetration in many of our product segments, operations running well and in several instances at record paces, and renewed customer focus on technology and desire for newer products." "Having said that," Horowitz added, "we continue to face challenges. Metal markets continue to be volatile resulting in higher prices for scrap material and higher premiums for cathode. Our Canadian operations continue to be challenged by the impact of currency translation. Considering these factors, coupled with the seasonal strength of the second quarter, we expect income from operations will show a sharp improvement over the second quarter of last year, as well as, an improvement versus the first quarter of this year." First 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 May 4, 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 net cash provided (used) by operating activities to free cash flow and net cash provided (used) by operating activities to adjusted 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. -tables to follow- Consolidated Statements of Income (Unaudited) Three-month period ended 04/04/04 03/30/03 In thousands, except per share data Pounds shipped 93,352 81,038 Net sales $205,805 $143,497 Cost of goods sold 188,320 128,875 Gross profit 17,485 14,622 Selling, general and administrative expenses 9,437 8,142 Restructuring charges 571 - Income from operations 7,477 6,480 Other expenses: Interest expense, net 5,070 5,178 Amortization and other, net 668 542 Income before income taxes 1,739 760 Income tax provision 371 122 Net income $1,368 $638 Net income per common share-basic $ 0.11 $0.05 Net income per common share-diluted $ 0.11 $0.05 Basic shares 12,289 12,262 Diluted shares 12,534 12,398 Segment Information (Unaudited) Three-month period ended 04/04/04 03/30/03 In thousands Pounds: Commercial 61,070 56,237 Wholesale 25,932 19,980 Rod, bar and other 6,350 4,821 Total pounds 93,352 81,038 Net sales: Commercial $ 144,926 $110,320 Wholesale 45,574 23,937 Rod, bar and other 15,305 9,240 Total net sales $ 205,805 $143,497 Gross profit: Commercial $14,903 $13,778 Wholesale 1,746 64 Rod, bar and other 836 780 Total gross profit $17,485 $14,622 Condensed Consolidated Balance Sheets (Unaudited) 04/04/04 03/30/03 12/31/03 In thousands Assets Cash and cash equivalents $31,606 $35,166 $46,089 Accounts receivable 119,101 85,524 86,825 Inventory 118,361 94,974 108,005 Other current assets 16,467 15,677 12,782 Property, plant and equipment, net 194,904 207,907 198,542 Other assets 100,956 123,611 101,015 Total assets $581,395 $562,859 $553,258 Liabilities and Stockholders' Equity Accounts payable and other accrued expenses $81,872 $54,584 $77,290 Short-term borrowings 1,315 1,401 1,502 Deferred income taxes 538 11,308 359 Pension liabilities 23,307 15,913 22,316 Long-term debt 274,474 255,290 254,278 Other liabilities 18,109 17,418 18,156 Total liabilities 399,615 355,914 373,907 Stockholders' equity 181,780 206,945 179,351 Total liabilities and stockholders' equity $581,395 $562,859 $553,258 Reconciliation of Net Cash Used by Operating Activities to Free Cash Flow (1) (Unaudited) Three-month period ended 04/04/04 03/30/03 In thousands Net income $1,368 $638 Depreciation and amortization 4,668 4,617 Changes in operating assets and liabilities (41,671) (24,241) Other 4,445 121 Net cash used by operating activities (31,190) (18,865) Additions to property, plant and equipment (2,520) (872) Free cash flow $(33,710) $(19,737) (1) This statement reconciles cash used by operations to free cash flow, which is a non-GAAP financial measure. Management believes free cash flow is a meaningful measure of financial performance and liquidity. Reconciliation of Net Income to Earnings Before Interest, Taxes, Depreciation and Amortization (2) (Unauditied) Three-month period ended 04/04/04 03/30/03 In thousands Net income $1,368 $638 Interest expense, net 5,070 5,178 Income tax provision 371 122 Depreciation and amortization 4,668 4,617 Earnings before interest, taxes, depreciation and amortization $11,477 $10,555 (2) This statement reconciles net income 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 and the Company's ability to service debt. Contact: James E. Deason Executive Vice President Chief Financial Officer (256) 580-3510 DATASOURCE: Wolverine Tube, Inc. CONTACT: James E. Deason, Executive Vice President, Chief Financial Officer of Wolverine Tube, Inc., +1-256-580-3510 Web site: http://www.wlv.com/ http://www.silvaloy.com/

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