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Quarterly Results
Wolverine Tube Reports 2008 First Quarter Results
HUNTSVILLE, Ala. - Wolverine Tube, Inc. reported results for the first quarter 2008. Net income for the first quarter of 2008 was $3.8 million compared to a net loss of $2.2 million in the same period of 2007. The 2008 results include $4.5 million in pre-tax charges relating primarily to restructuring, advisory fees and severance expenses and $7.4 million in gains from the sale of 30% interest in a subsidiary and the sale of the Company's small tube products business.
First Quarter Highlights
* Established a joint venture with the Wieland Group through the sale
of 30% of Wolverine Shanghai for $9.5 million cash and $2.1 million
of other consideration. 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 resulting in
net proceeds of $22.5 million plus a future working capital
adjustment;
* The Alpine Group, Inc. purchased an additional $14.6 million in
Convertible Preferred Stock, convertible at $1.10 per share;
* Plainfield Asset Management, LLC ("Plainfield") refinanced and
exchanged $38.3 million of the Company's 7.375% Senior Notes for a
10.5% Note maturing on March 28, 2009;
* Extended the maturity dates of our $35.0 million secured revolving
credit facility and our $75.0 million receivables sales facility to
April 28, 2009 and February 19, 2009, respectively;
* All global tube manufacturing operations demonstrated improved
technical tube productivity in first quarter 2008 with Shawnee,
Oklahoma having the largest gain at 115% compared to 2007 levels;
* Wolverine Tube Shanghai achieved record shipments and
profitability; Asia-Pacific technical tube sales increased 144%
over prior year;
* Global tube business total inventory turns increased by 23% over
prior year;
* Tube operations achieved reductions of 4.3% of ex-material cost.
Net sales for the first quarter of 2008 were $255.8 million, as
compared to $263.9 million for the first quarter of 2007. Total pounds
shipped in the first quarter of 2008 were 53.8 million pounds compared
to 65.1 million pounds shipped in the first quarter of 2006. Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") was $7.4 million for the first quarter of 2008 compared to
$9.1 million for the quarter ended April 1, 2007. The year over year
decline in adjusted EBITDA is primarily due to strong EBITDA
contribution in 2007 from the U.S. plumbing tube business, which was
discontinued at December 31, 2007. 2007 domestic plumbing tube margins
benefited from strong demand in residential markets, which was
substantially softer by the second half of 2007.
Mr. Harold Karp, President and Chief Operating Officer, commented, "The
transactions accomplished in the first quarter are in support of our
new strategic business model. The sale of the small tube products
business was in line with our focus on value added, heat transfer
tubing products, fabricated products and joining technology products.
The partnership established with the Wieland Group in China will
strengthen Wolverine's technology and enhance service to our customers
in the high growth Asia-Pacific region."
Mr. Karp further commented that "shipment volume in Wolverine's
fabricated products and joining technologies operations was down 9% as
a result of softness in the residential and light commercial HVAC and
appliance markets. In spite of the slow HVAC market, overall commercial
products gross profits increased, driven by strong global technical
tube shipments, cost reductions and productivity improvements."
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