PRNewswire
HUNTSVILLE, Ala.
HUNTSVILLE, Ala., June 12 /PRNewswire-FirstCall/ -- Wolverine Tube, Inc. (WLVT) today reported results for the full year of 2008. The net loss for the year ended December 31, 2008 was $48.5 million or $1.49 per common share compared to a net loss of $98.2 million or $6.10 per common share for 2007. Included in the 2008 results were $26.3 million of gains on divestitures and $52.4 million of goodwill impairment and pre-tax restructuring charges. 2007 included $105.9 million of restructuring and goodwill impairment charges and a $15.8 million non-cash gain from the adjustment to fair value of the conversion price embedded in a Preferred Stock Purchase Agreement.
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FULL YEAR HIGHLIGHTS
- Established a strategic joint venture with the Wieland-Werke AG through the sale of 50% of Wolverine Tube Shanghai for approximately $20 million and recorded a gain of approximately $12 million. The venture will focus on rapidly growing Asia-Pacific markets and demand for high performance technical tubes;
- Completed the sale of our small tube products business for $25 million cash;
- Retired the balance of $98 million of our 7.375% Senior Notes at maturity;
- Sold our Canadian residential plumbing tube business for approximately $41 million in cash and completed the Company's exit from all North American residential plumbing tube markets;
- Reduced debt by approximately $100 million during 2008.
FULL YEAR 2008 RESULTS
Net sales in 2008 declined 19% to $816 million from $1.0 billion in 2007, primarily due to the discontinuance of manufacturing residential plumbing tube and other products at our Decatur, Alabama facility in December 2007.
Total pounds shipped in 2008 were 160 million pounds, a 28.2% decrease from 222 million pounds in 2007. Of the total pounds shipped, approximately 96 million pounds in 2008 and 165 million pounds in 2007 were manufactured by the Company. The balance of the pounds shipped by the Company in 2007 and 2008 was attributable to products imported and resold to customers. The decrease in pounds shipped in 2008 was due to the discontinuance of manufacturing residential plumbing tube and other products in Decatur, Alabama and the impact of the overall economy on the residential and commercial markets that we serve.
Gross profit for 2008 was $27 million as compared to $50 million in 2007, a 46% decrease to $23 million. Gross profit was adversely affected by the downturn in the HVAC and appliance markets.
The 2008 results reflect gains on divestitures of $26 million and a non-cash goodwill impairment charge of $47 million which eliminated the goodwill recorded on the Company's balance sheet. These actions are consistent with the restructuring of the Company's business model.
Mr. Harold Karp, President and Chief Operating Officer, commented that, "current global economic conditions have weakened demand for our tube products and fabricated assemblies; however, there are encouraging new product opportunities for heat transfer applications in new markets."
Mr. Karp further commented that, "we continue to focus on operational improvements despite lower production and shipment volumes. Our lean and continuous improvement initiatives have resulted in approximately $5 million in year-over-year cost reductions or approximately 4% of total non-metal costs. Comparative inventory turns increased 14%. In 2008 we reduced our North American operating footprint from 9 manufacturing facilities to 5, enabling a 43% workforce reduction. We are realizing significant product quality improvements, further enhancing our customer partnerships. Our restructuring of our North American operations designed to optimize profitability is on track as we continue to make significant progress in key areas of our business."
REFINANCING:
On February 26, 2009, we announced the commencement of an offer (the "Exchange Offer") to each of the holders of our 10.5% Senior Exchange Notes and our 10.5% Senior Notes due March 28, 2009 and April 1, 2009, respectively, to exchange these notes for new Senior Secured Notes in order to refinance those maturities. The Exchange Offer was successfully consummated on April 28, 2009, when we issued $121.6 million aggregate principal amount of our 15% Senior Secured Notes due 2012. As part of the Exchange Offer, holders of approximately $83.3 million in principal amount of our 10.5% Senior Notes due 2009 and the $38.3 million in principal amount of our 10.5% Senior Exchange Notes due 2009 exchanged such notes for our Senior Secured Notes. As a result of the successful completion of the Exchange Offer, we have approximately $121.6 million in aggregate principal amount of Senior Secured Notes outstanding and all of our 10.5% Senior Notes and 10.5% Senior Exchange Notes due 2009 have been exchanged or retired. The Senior Secured Notes will mature on March 31, 2012.
David A. Owen, Wolverine's Chief Financial Officer, stated, "The successful Exchange Offer extended the maturities of 88% of our debt to 2012. Since we do not have any debt currently due, this will greatly assist the Company in managing through the challenging economic downturn."
ABOUT WOLVERINE TUBE, INC.
Wolverine Tube, Inc. provides its customers with copper and copper alloy tube, fabricated products and metal joining products. Internet addresses: www.wlv.com and www.silvaloy.com.
FORWARD-LOOKING STATEMENTS
All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectation and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in this press release. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligations to release publicly any update or revision to any forward-looking statement contained herein if there are any changes in conditions or circumstances on which any such forward-looking statement is based.
Contact:
Dave Owen
256-580-3976
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SOURCE: Wolverine Tube, Inc.
Web site: http://www.wlv.com/
ABOUT US
Today’s Wolverine Tube reflects the demands of new opportunities in a global market. This quick video highlights the rich past and exciting future of Wolverine:
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