Wolverine Tube (NYSE:WLV)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Wolverine Tube Charts. Click Here for more Wolverine Tube Charts.](/p.php?pid=staticchart&s=NY%5EWLV&p=8&t=15)
Wolverine Tube Reports 2003 Fourth Quarter and Full Year Results
Operating Results Improved Over Third Quarter
HUNTSVILLE, Ala., Feb. 19 /PRNewswire-FirstCall/ -- Wolverine Tube, Inc. today
reported results for the fourth quarter and full year ended December 31, 2003.
Loss from continuing operations for the fourth quarter of 2003 was $8.0 million,
or $0.65 per diluted share. Included in the loss was a $5.7 million after-tax
restructuring charges, principally related to the previously announced closing
of the Company's Booneville, MS manufacturing plant. Excluding the
restructuring charges, the loss from continuing operations would have been $2.3
million, or $0.19 per share. Operating results were also negatively impacted by
$3.4 million after-tax, as a result of the relative strengthening of the
Canadian dollar versus the U.S. dollar and a sharp spike in copper prices,
especially in December. This rise in copper prices resulted in a loss on the
Company's copper hedge position, which should be offset in subsequent periods.
In the fourth quarter of 2002, income from continuing operations was $169,000,
or $0.01 per share. Total pounds of product shipped in the fourth quarter of
2003 were 80.1 million, an increase of 11.4 percent compared to 71.9 million
pounds in 2002. Net sales for the fourth quarter of 2003 were $155.8 million
compared to $125.6 million, a 24 percent increase. Gross profit for the fourth
quarter of 2003 decreased to $7.4 million from $10.4 million in the fourth
quarter of 2002. Included in gross profit was the aforementioned impact of
currency and the loss on the Company's copper hedge, which was $5.4 million
before tax. In 2001 the Company discontinued its WRI operations in Ontario,
Canada. In the fourth quarter of 2003, the Company recognized $1.6 million
net-of-tax losses in discontinued operations to reflect changes in the carrying
value of the assets and additional pensions and post retirement obligations as
we prepare to dispose of this facility.
Forthe year ended December 31, 2003, loss from continuing operations was $39.0
million or $3.18 per share compared with income from continuing operations of
$7.2 million, or $0.58 per share for 2002. The 2003 loss included a $23.2
million goodwill impairment charge and restructuring charges, totaling $15.1
million ($10.0 million after-tax) relating principally to the closure of the
Booneville plant and a corporate-wide workforce reduction program. Excluding
goodwill impairment and the restructuring charges, loss from continuing
operations would have been $6.9 million or $0.56 per share. Total pounds of
product shipped in 2003 were 327.4 million pounds compared to 310.2 million
pounds in 2002. Net sales were $596.3 million, an 8.3 percent increase from
2002. Gross profit for 2003 was $40.8 million compared to $58.4 million in
2002.
Commenting on the results, Dennis Horowitz, Chairman, President and Chief
Executive Officer, said, "The combined impacts of sharply rising copper prices
and the weakening U.S. dollar had a very significant negative effect on our
fourth quarter earnings. However, excluding these impacts, fourth quarter
operating results was much improved from the third quarter of 2003 and
encouraging for several reasons, including improved demand for our value added
commercial products, improved demand and pricing in wholesale and rod and bar
products, and improved operational performance at our facilities."
Horowitz added, "That while our cash position at $46.1 million was belowwhat we
expected at year-end, it was principally due to copper price increases, which
affected inventory dollar values. At the same time, inventory turns, as well as
receivable and payable days outstanding, improved and capital expenditures were
within expectations."
Fourth Quarter Results by Segment
Shipments of commercial products totaled 49.8 million pounds, a 4.8 percent
increase over the fourth quarter 2002 of 47.5 million pounds. Net sales
increased approximately 16.2 percent to $110.4 million. These results reflect
increased shipments of industrial tube, technical tube and fabricated products.
Gross profit decreased to $7.3 million from the prior year's fourth quarter of
$10.5 million. Gross profit gains due to increased demand and improved
operating efficiencies were more than offset by the losses on the Company's
copper hedge and currency translation.
Shipments of wholesale products totaled 24.1 million pounds, as compared to last
year's fourth quarter of 19.5 million pounds. Net sales increased 52.6 percent
to $34.2 million from the prior year's fourth quarter. Gross profit was a loss
of $800 thousand compared to last year's fourth quarter loss of $500 thousand.
Again, increased demand and pricing gains in this segment weremore than offset
by the losses on the Company's copper hedge.
Shipments of rod, bar and other totaled 6.2 million pounds, a 27.6 percent
increase from the fourth quarter of 2002. Net sales increased to $11.2 million,
a 36.4 percent increase from the fourth quarter in the prior year. These
results reflect increased volume and price in rod and bar. Gross profit in rod,
bar and other in the quarter was $900 thousand compared to $400 thousand in the
prior year's fourth quarter. Gains in our Europeandistribution business and
improvements in rod and bar demand in North America offset copper hedge and
currency translation losses.
Earnings Outlook
Commenting on the outlook for the Company, Horowitz said, "In the second half of
the fourth quarter, we began to see tangible improvement in demand across all
our product segments and stabilizing in wholesale pricing. This has carried
over into the first quarter of 2004 and reflects a recovering U.S. economy. In
addition, operations are running well with increasing productivity. Market
shares remain strong, and in many cases, are improving, and customer contracts
that were up for renewal are essentially completed with only moderate price
concessions."
Horowitz continued, "Several identifiable challenges that we continue to face
are related to copper price volatility and currency translation impacts. On the
other hand, natural gas costs are hedged for all of 2004 at levels below 2003,
especially in the first quarter. Pension and retirement costs are expected to be
relatively stable year-over-year, and our healthcare costs will increase
moderately. With this in mind, coupled with seasonal strengthening in the first
quarter, operating income from continuing operations should show both a sharp
increase both sequentially from the fourth quarter of 2003, as well as in
comparison to the first quarter of 2003."
Fourth 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 March 4, 2004, on this website or by calling
(800) 858-5309 (access code 40179, pass code 40179). Should you haveany
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 qualitypartner, 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, estimatesand 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 cost, the timing and magnitude
of recovery from the current economic downturn, costs and cost savings related
to the Booneville closing, the levels of U.S. commercialconstruction activity,
competitive products and pricing, environmental contingencies, regulatory
pressures, labor cost (including healthcare and pension expense), , technology,
fuel and energy costs, 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 effort, working capital
management programs and completion of the extension and modification of our
credit facility. 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 Twelve-month
In thousands, period ended period ended
except per share data12/31/2003 12/31/2002 12/31/2003 12/31/2002
Pounds shipped 80,069 71,898 327,354 310,240
Net sales $155,750 $125,616 $596,324 $550,523
Cost of goods sold 148,393 115,180 555,498 492,082
Gross profit 7,357 10,436 40,826 58,441
Selling, general and
administrative expenses 8,291 7,401 32,103 30,616
Restructuring charges 8,619 -- 15,057 --
Operating income (loss) from
continuing operations (9,553) 3,035 (6,334) 27,825
Interest expense, net 5,479 4,760 21,218 19,681
Gain on extinguishment of debt -- (275) -- (1,349)
Amortization and other, net 578 (49) 1,856 1,008
Goodwill impairment -- -- 23,153 --
Income (loss) from continuing
operations before income taxes (15,610) (1,401) (52,561) 8,485
Income tax provision (benefits) (7,611) (1,570) (13,577) 1,315
Income (loss) from continuing
operations (7,999) 169 (38,984) 7,170
Loss from discontinued
operations, net of income tax (1,637) (1,610) (1,637) (1,610)
Net income (loss) $(9,636) $(1,441) $(40,621) $5,560
Basic (loss) earnings per share:
Continuing operations $(0.65) $0.01 $(3.18) $0.58
Discontinued operations (0.13) (0.13) (0.13) (0.13)
Net income (loss) $(0.78) $(0.12) $(3.31) $0.45
Diluted (loss) earnings per share:
Continuing operations $(0.65) $0.01 $(3.18) $0.58
Discontinued operations $(0.13) $(0.13) $(0.13) $(0.13)
Net income (loss) $(0.78) $(0.12) $(3.31) $0.45
Basic shares 12,280 12,262 12,275 12,231
Diluted shares 12,280 12,406 12,275 12,362
Segment Information (Unaudited)
Three-month Twelve-month
period ended period ended
In thousands 12/31/2003 12/31/2002 12/31/2003 12/31/2002
Pounds:
Commercial 49,776 47,502 217,499 209,590
Wholesale 24,108 19,548 90,005 79,064
Rod, bar, and other 6,185 4,848 19,850 21,586
Total pounds 80,069 71,898 327,354 310,240
Net sales:
Commercial $110,372 $95,017 $442,471 $421,234
Wholesale 34,195 22,401 115,112 93,938
Rod, bar, and other 11,183 8,198 38,741 35,351
Total net sales $155,750 $125,616 $596,324 $550,523
Gross Profit:
Commercial $7,248 $10,536 $38,997 $51,736
Wholesale (771) (492) (271) 4,352
Rod, bar, and other 880 392 2,100 2,353
Total gross profit $7,357 $10,436 $40,826 $58,441
WOLVERINE TUBE, INC.
Condensed Consolidated Balance Sheets (Unaudited)
In thousands 12/31/2003 12/31/2002
Assets
Cash and cash equivalents $46,089 $53,920
Accounts receivable 86,825 65,212
Inventory 108,005 85,485
Other current assets 12,782 14,402
Property, plant and equipment, net 198,542 208,999
Other assets 101,015 122,702
Total assets $553,258 $550,720
Liabilities and Stockholders' Equity
Accounts payables and other accrued expenses $77,290 $49,583
Short-term borrowings 1,208 1,217
Deferred income taxes 359 11,902
Pension liabilities 22,316 14,540
Long-term debt 254,578 255,712
Other liabilities 18,156 17,131
Total liabilities 373,907 350,085
Stockholders' equity 179,351 200,635
Total liabilities and stockholders' equity $553,258 $550,720
WOLVERINE TUBE, INC.
Reconciliation of Net Cash Provided (Used) by Operating
Activities to Free Cash Flow (1) (Unaudited)
Three-month Twelve-month
period ended period ended
In thousands 12/31/2003 12/31/2002 12/31/2003 12/31/2003
Income (loss) from
continuing operations ($7,999) $169 ($38,984) $7,170
Depreciation and amortization 4,892 5,090 19,009 18,416
Changes in operating assets
and liabilities 2,834 9,196 (7,021) 17,509
Goodwill impairment -- -- 23,154 --
Non-cashportion of
restructuring charge 6,939 -- 12,016 --
Deferred taxes (8,585) (931) (12,541) (937)
Other 128 (145) 367 (722)
Net cash provided (used)
by operating activities (1,791) 13,379 (4,000) 41,436
Additions to property,
plant and equipment (1,639) (2,338) (5,969) (7,747)
Free cash flow ($3,430) $11,041 ($9,969)$33,689
Reconciliation of Net Cash Provided (Used) by Operating Activities to
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (2)
(Unaudited)
Three-month Twelve-month
period ended period ended
In thousands 12/31/2003 12/31/2002 12/31/2003 12/31/2002
Net cash provided (used) by
operating activities ($1,791) $13,379 ($4,000) $41,436
Changes in operating assets
and liabilities (2,834) (9,196) 7,021 (17,509)
Deferred taxes 8,585 931 12,541 937
Other (128) 145 (367) 722
Non-cash portion of
restructuring charge (6,939) -- (12,016) --
Restructuring charges 8,619 -- 15,057 --
Interest expense, net 5,479 4,760 21,218 19,681
Income tax provision (benefit) (7,611) (1,570) (13,577) 1,315
Adjusted earnings before
interest, taxes, depreciation
and amortization $3,380 $8,449 $25,877 $46,582
(1) This statement reconciles net cash provided (used) by operating
activities 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 and provides investors with a
measure of cash that may be used for debt service and for other
purposes.
(2) This statement reconciles net cash provided (used) by operating
activities to adjusted earnings before interest, taxes, depreciation
and amortization (Adjusted EBITDA), which is a non-GAAP financial
measure. Management believes Adjusted EBITDA is a meaningful
measure of liquidity 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, +1-256-580-3510
Web site: http://www.wlv.com/
http://www.silvaloy.com/