Exhibit 99.1
WOLVERINE TUBE, INC.
PRESS RELEASE
Contact: James E. Deason
Executive Vice President
Chief Financial Officer
(256) 580-3500
WOLVERINE TUBE ANNOUNCES SECOND QUARTER EARNINGS
STRONGEST OPERATING PROFIT IN TWELVE QUARTERS
HUNTSVILLE, ALABAMA, (JULY 29, 2004) - 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 10 1/2 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.
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Corporate Headquarters
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
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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.
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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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WLV Reports Second Quarter Results
Page 4
July 29, 2004
WOLVERINE TUBE, INC. FINANCIAL DATA
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three-month period ended Six-month period ended
In thousands, except per share data 7/4/2004 6/29/2003 7/4/2004 6/29/2003
--------- --------- --------- ---------
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 ended Six-month period ended
In thousands 7/4/2004 6/29/2003 7/4/2004 6/29/2003
--------- --------- --------- ---------
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
========= ========= ========= =========
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WLV Reports Second Quarter Results
Page 5
July 29, 2004
WOLVERINE TUBE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In thousands 7/4/2004 6/29/2003 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 ended Six-month period ended
In thousands 7/4/2004 6/29/2003 7/4/2004 6/29/2003
-------- --------- -------- ---------
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.
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