EXHIBIT 99.1
WOLVERINE TUBE, INC.
PRESS RELEASE
Contact: James E. Deason
Executive Vice President
Chief Financial Officer
(256) 580-3510
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WOLVERINE TUBE REPORTS FIRST QUARTER 2004 RESULTS
EARNINGS PER SHARE INCREASES 120 PERCENT
HUNTSVILLE, ALABAMA, APRIL 27, 2004--Wolverine Tube, Inc. (NYSE: WLV) 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.
Corporate Headquarters
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
WOLVERINE TUBE, INC.
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 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.
2
WOLVERINE TUBE, INC.
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 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: 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", "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--
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WOLVERINE TUBE, INC.
Page 4 of 6
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
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Net sales $ 205,805 $ 143,497
Cost of goods sold 188,320 128,875
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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
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Income before income taxes 1,739 760
Income tax provision 371 122
- ----------------------------------------------------------------------------------------------------------------
Net income $ 1,368 $ 638
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- ----------------------------------------------------------------------------------------------------------------
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
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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
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Total pounds 93,352 81,038
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Net sales:
Commercial $ 144,926 $ 110,320
Wholesale 45,574 23,937
Rod, bar and other 15,305 9,240
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Total net sales $ 205,805 $ 143,497
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Gross profit:
Commercial $ 14,903 $ 13,778
Wholesale 1,746 64
Rod, bar and other 836 780
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Total gross profit $ 17,485 $ 14,622
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WOLVERINE TUBE, INC.
Page 5 of 6
Condensed Consolidated Balance Sheets
(Unaudited)
04/04/04 03/30/03 12/31/03
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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
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Total assets $ 581,395 $ 562,859 $ 553,258
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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
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Total liabilities 399,615 355,914 373,907
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Stockholders' equity 181,780 206,945 179,351
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Total liabilities and stockholders' equity $ 581,395 $ 562,859 $ 553,258
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WOLVERINE TUBE, INC.
Page 6 of 6
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)
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Free cash flow $ (33,710) $ (19,737)
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(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) (Unaudited)
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.
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