1
Exhibit 99.1
WOLVERINE TUBE, INC.
P R E S S R E L E A S E
Contact: Thomas D. Johnson, Jr.
Director, Investor Relations & Communications
(256) 580-3969
================================================================================
WOLVERINE TUBE REPORTS 2000 FOURTH QUARTER AND FULL YEAR RESULTS
Fourth Quarter Earnings Per Share Increased 26 Percent
HUNTSVILLE, ALABAMA, FEBRUARY 26, 2001--Wolverine Tube, Inc. (NYSE: WLV) today
reported results for the fourth quarter and full year ended December 31, 2000.
Net income for the fourth quarter of 2000 was $3.6 million, or $0.29 per diluted
share, a 26 percent increase over last year on a per share basis, and in line
with the street's consensus estimate. Net sales for the fourth quarter of 2000
were $171.7 million, a 10 percent increase over the comparable year-ago quarter.
Total pounds of product shipped was 93.4 million, up three percent over the
prior year. Gross profit for the fourth quarter was $17.2 million, representing
the fifth consecutive quarter on a year-over-year basis that the Company
experienced improvement in gross profit.
For the year ended December 31, 2000, net income was $23.5 million, or $1.88 per
diluted share, compared with a net income (before non-recurring, restructuring
and other charges and the cumulative effect of an accounting change) of $23.2
million, or $1.73 per diluted share for 1999. Net sales were a record $700.2
million, an eight percent increase over 1999. Total pounds of product shipped in
2000 increased 5.6 million pounds to 392.8 million pounds. Gross profit for 2000
was $84.2 million, a four percent increase over 1999 gross profit before
non-recurring charges of $14.4 million recorded in 1999.
Commenting on the results, Dennis Horowitz, Chairman, President and Chief
Executive Officer, said, "I am pleased to report that we delivered financial
results ahead of the 2000 targets we announced a year ago. We achieved solid
growth, even in the midst of a slowing economy and in the face of higher
interest rates, both of which contributed to price and volume pressure.
Additionally, sharply higher energy and transportation prices, as well as higher
employee health care costs, increased operating expenses. These types of issues
are exactly why we implemented our War on Waste ("WOW") program and embarked
upon our capital improvement program - Project 21. As a result, we were able to
absorb and offset the majority of these cost increases and deliver solid results
for 2000."
Horowitz added, "In 2001 we look forward to another good year for Wolverine,
targeting five to seven percent volume growth and an 8 to 13 percent increase in
earnings per share. While we, like others, expect the U.S. economy to show
little growth in the first half of 2001, we do anticipate improving conditions
throughout the balance of the year. This economic outlook, coupled with our
productivity actions, asset utilization and WOW initiatives, gives us confidence
in delivering these results."
Corporate Headquarters
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
2
WOLVERINE TUBE, INC.
Page 2 of 5
FOURTH QUARTER RESULTS BY SEGMENT
Shipments of commercial products totaled 53.9 million pounds, a four percent
increase over last year's fourth quarter of 51.7 million pounds. Net sales were
$118.9 million, up 16 percent over last year's fourth quarter of $102.7 million.
Gross profit was $14.2 million, a five percent improvement over last year's
fourth quarter of $13.5 million. These results reflect the increase in demand
for technical tube and the addition of Wolverine Joining Technologies. The
Company's cost containment programs also contributed to the improvements in
gross profit.
Shipments of wholesale products totaled 16.7 million pounds, a seven percent
decrease over last year's fourth quarter of 17.9 million pounds. Net sales were
$22.9 million, down 13 percent from last year's fourth quarter of $26.3 million.
Gross profit was $1.3 million, down 31 percent from last year's fourth quarter.
Management believes that on a year-over-year basis, wholesale products have been
negatively impacted by rising interest rates, which have in turn caused a
slowdown in the residential construction markets in both the U.S. and Canada.
This has adversely affected both demand and pricing for wholesale products.
Compounding this macroeconomic issue, shipments in Canada have also been
impacted by offshore competition entering the marketplace. To a large extent,
management has been able to stem this inflow with an enhanced customer incentive
sales program.
Shipments of rod, bar and strip totaled 22.8 million pounds, an eight percent
increase over last year's fourth quarter of 21.0 million pounds. Net sales were
$29.9 million, up 11 percent over last year's fourth quarter of $26.9 million
pounds. These results primarily reflect the positive impact of higher shipments
of strip from the Wolverine Ratcliffs, Inc. ("WRI") joint venture. To a lesser
extent, higher shipments of rod and bar products from the Company's Montreal
facility also contributed to this increase. Gross profit was $1.6 million, down
slightly from last year's fourth quarter. This result reflects the costs
associated with expanding the production capacity and product offering
capabilities at WRI's Fergus facility.
EARNINGS OUTLOOK
Based on current market conditions and looking at the Company as a whole, our
core businesses are solid. We continue to expect productivity and profit
improvements and ongoing benefits from Wolverine Joining Technologies. The
combination of these elements lead us to expect positive earnings per share
growth in 2001. At the same time, we, like most companies, are facing abnormally
high energy and transportation costs, as well as accelerating employee health
care costs. Netting the upsides and the downsides, we expect 2001 earnings per
share to be in the range of $2.02 to $2.12, or an 8 to 13 percent increase over
last year.
FOURTH QUARTER CONFERENCE CALL
The Company will hold a conference call at 9:30 a.m. Central (10:30 a.m. EST)
this morning to discuss the contents of this release. Please visit Wolverine's
website at www.wlv.com to access the call. Alternatively, you can call the
conference call line at (800) 680-9685 ten minutes prior
3
WOLVERINE TUBE, INC.
Page 3 of 5
to the scheduled start time and use access code "Wolverine". The number of
connections for this call is limited to 100.
A replay will be available through March 11, 2001 at Wolverine's website or
through March 5, 2001 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.
ABOUT WOLVERINE TUBE, INC.
Wolverine Tube, Inc. is a world-class quality partner, providing its customers
with copper and copper alloy tube, fabricated products, brazing alloys, fluxes
and lead-free solder, as well as copper and copper alloy rod, bar and strip
products. Internet addresses: www.wlv.com and 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" and other similar terminologies. This press release contains
forward-looking statements regarding the expectations of future sales and
earnings of the Company. 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 earnings, factors that could effect actual
results include, without limitation, global and local economic and political
environments, weather conditions, environmental contingencies, regulatory
pressures, labor costs, raw material costs, fuel and energy costs, the mix of
geographic and product revenues, the effect of currency fluctuations,
competitive products and pricing, assumptions made as to customer retention,
costs associated with attracting new customers, costs of integrating Wolverine
Joining Technologies and Wolverine Ratcliffs, Inc., as well as future operating
costs of Wolverine Joining Technologies and Wolverine Ratcliffs, Inc. A
discussion of such 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--
4
WOLVERINE TUBE, INC.
Page 4 of 5
Consolidated Statements of Income (Unaudited)
Three-month period ended Twelve-month period ended
12/31/2000 12/31/1999 12/31/2000 12/31/1999
- ----------------------------------------------------------------------------------------------------------------------
In thousands, except per share data
Pounds shipped 93,366 90,593 392,763 387,156
======================================================================================================================
Net sales $171,746 $155,846 $700,176 $645,774
Cost of goods sold 154,586 138,821 615,948 579,030
- ----------------------------------------------------------------------------------------------------------------------
Gross profit 17,160 17,025 84,228 66,744
Selling, general and administrative expenses 8,771 8,241 34,411 30,777
Restructuring and other non-recurring charges - - - 19,938
- ----------------------------------------------------------------------------------------------------------------------
Income from operations 8,389 8,784 49,817 16,029
Interest expense, net 3,757 2,991 13,098 12,608
Amortization and other, net (520) 1,029 (34) 1,941
- ----------------------------------------------------------------------------------------------------------------------
Income before income taxes and cumulative
effect of accounting change 5,152 4,764 36,753 1,480
Income tax provision (benefit) 1,528 1,702 13,278 (289)
Cumulative effect of accounting change, net
of tax benefit of $2,211 (Note 1) - - - 5,754
- ----------------------------------------------------------------------------------------------------------------------
Net income (loss) $3,624 $3,062 $23,475 ($3,985)
======================================================================================================================
Net income before restructuring charge,
non-recurring charge and cumulative effect of
accounting change $3,624 $3,062 $23,475 $23,186
======================================================================================================================
Basic earnings (loss) per share $0.30 $0.24 $1.91 ($0.33)
Diluted earnings (loss) per share $0.29 $0.23 $1.88 ($0.32)
- ----------------------------------------------------------------------------------------------------------------------
Diluted earnings per share before restructuring
charge, non-recurring charge and cumulative
effect of accounting change $0.29 $0.23 $1.88 $1.73
- ----------------------------------------------------------------------------------------------------------------------
Basic shares 12,034 12,683 12,153 13,106
Diluted shares 12,221 12,787 12,344 13,243
======================================================================================================================
Note 1: In the first quarter of 1999, the Company adopted the American
Institute of Certified Public Accounting Statement of Position 98-5,
Reporting on the Costs of Start-Up Activities. In accordance with this
Statement of Position, the Company recognized a cumulative effect of a
change in accounting principle of $8 million pre-tax ($5.8 million
after-tax). The Statement of Position provides specific guidance on the
financial reporting of start-up costs and organizational costs, and
requires these costs to be expensed as incurred.
5
WOLVERINE TUBE, INC.
Page 5 of 5
Segment Information (Unaudited)
Three-month period ended Twelve-month period ended
12/31/2000 12/31/1999 12/31/2000 12/31/1999
- --------------------------------------------------------------------------------------------------------------------
Average COMEX price of copper $0.86 $0.80 $0.84 $0.72
====================================================================================================================
In thousands
Pounds:
Commercial 53,914 51,714 237,701 224,685
Wholesale 16,673 17,859 67,849 87,487
Rod, bar and strip 22,779 21,020 87,213 74,984
- --------------------------------------------------------------------------------------------------------------------
Total pounds 93,366 90,593 392,763 387,156
====================================================================================================================
Net sales:
Commercial $118,941 $102,740 $486,871 $436,738
Wholesale 22,929 26,250 96,993 118,809
Rod, bar and strip 29,876 26,856 116,312 90,227
- --------------------------------------------------------------------------------------------------------------------
Total net sales $171,746 $155,846 $700,176 $645,774
====================================================================================================================
Gross profit:
Commercial $14,199 $13,463 $67,003 $60,856
Wholesale 1,344 1,935 10,517 15,168
Rod, bar and strip 1,617 1,627 6,708 5,134
- --------------------------------------------------------------------------------------------------------------------
Total gross profit $17,160 $17,025 $84,228 $81,158
====================================================================================================================
Condensed Consolidated Balance Sheets (Unaudited)
12/31/2000 12/31/1999
- --------------------------------------------------------------------------------------------------------------------
In thousands
Assets
Cash and cash equivalents $23,458 $26,894
Accounts receivable 105,025 84,440
Inventory 108,164 95,368
Other current assets 13,360 10,926
Property, plant and equipment, net 215,491 190,774
Other assets 124,857 98,287
- --------------------------------------------------------------------------------------------------------------------
Total assets $590,355 $506,689
====================================================================================================================
Liabilities and Stockholders' Equity
Accounts payable and other accrued expenses $71,626 $50,236
Short-term borrowings 10,057 12,948
Deferred income taxes 21,190 19,225
Long-term debt 231,163 180,718
Other liabilities 19,437 19,543
- --------------------------------------------------------------------------------------------------------------------
Total liabilities 353,473 282,670
- --------------------------------------------------------------------------------------------------------------------
Minority interest 2,508 2,381
Redeemable cumulative preferred stock 2,000 2,000
Stockholders' equity 232,374 219,638
- --------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest, redeemable cumulative preferred
stock and stockholders' equity $590,355 $506,689
====================================================================================================================
###