Wolverine Tube Reports Full Year and Fourth Quarter Results


HUNTSVILLE, Ala., March 14, 2007 (PRIME NEWSWIRE) -- Wolverine Tube, Inc. (Pink Sheets:WLVT) today reported results for the full year and fourth quarter of 2006. Net loss for the year ended December 31, 2006 was $79.2 million or $5.26 per share compared to a net loss of $38.6 million or $2.57 per share for 2005.

Included in these results were after tax restructuring and other charges of $75.3 million and $17.2 million in 2006 and 2005, respectively. The charges in 2006 related to providing a $23.9 million, non-cash allowance to reflect an adjustment to the valuation of our Canadian Company's deferred tax assets, $44.0 million in restructuring and other charges in conjunction with the closing of the Montreal, Ontario and Jackson, Tennessee facilities, as well as the consolidation of our U.S. distribution facility into the Decatur, Alabama plant site and $7.4 million for advisory fees and expenses for professional services incurred in conjunction with our balance sheet restructuring. In 2005, the restructuring and other charges of $17.2 million related to a $12.6 million, non-cash charge to provide a partial adjustment to the valuation allowance for deferred tax assets, charges associated with the termination and freezing of our U.S. defined benefit plants, employee costs associated with restructuring of our corporate organization and a loss on the sale of the Jackson facility's real estate as well as the corporate airplane. Excluding these restructuring and other charges, the net loss would have been $3.9 million or $0.26 per share in 2006 compared with a net loss of $21.4 million or $1.42 per share in 2005.

Gross profit for 2006 was $54.5 million as compared to $21.6 million in 2005, an improvement of $32.9 million. Total pounds shipped in 2006 were 343.5 million pounds compared to 320.6 million pounds in 2005. Of the total pounds shipped, approximately 294.7 million pounds and 275.0 million pounds were manufactured by the Company in 2006 and 2005, respectively. The balance of the pounds shipped came from inventory reduction and from the Value Added Strategic Sourcing (VASS) arrangement the Company has whereby we source products from a Chinese tube manufacturer under an exclusive agreement and resell those products to our customers.

Net sales were $1.4 billion in 2006, compared to $873.5 million in 2005. This 61 percent increase in net sales reflects the 84 percent, year over year, increase in the average COMEX price of copper, which is a direct pass through to our commercial products customers. Additionally, a 7.2 percent volume improvement and a 9.4 percent increase in unit fabrication revenues contributed to the improved net sales.

For the fourth quarter of 2006, which historically is our weakest, the net loss was $34.0 million or $2.25 per share, as compared to a net loss of $19.2 million or $1.28 per share in the same period of 2005. Included in the 2006 and 2005 results were $25.0 million and $16.0 million in after tax charges, relating primarily to the deferred tax valuation allowance, restructuring charges and advisory fees and expenses. Excluding these charges in both periods, the net loss would have been $9.0 million or $0.60 per share in the fourth quarter of 2006 and a net loss of $3.3 million or $0.22 per share in the fourth quarter of 2005.

Gross profit for the fourth quarter of 2006 decreased to $4.7 million from $7.8 million in 2005. Total pounds shipped in the fourth quarter of 2006 were 64.6 million pounds, a 19.3 percent decrease. Of these pounds shipped, approximately 84 percent were manufactured by Wolverine and the balance came from our VASS program. Net sales for the fourth quarter were $290.6 million, as compared to $238.0 million for the fourth quarter of 2005 primarily due to the increase in copper prices quarter over quarter.

Commenting on the results, Jed Deason, Chief Financial Officer, said, "The year of 2006 was a year of change and restructuring for Wolverine. We began the year with two major initiatives. First we began a robust and continuing strategic planning process and secondly we commenced our balance sheet restructuring efforts. We have accomplished much in both of these areas. In September 2006, we implemented the first phase of our strategic plan with the announced closure of both our Montreal, Quebec and Jackson, Tennessee facilities. Since performance at both of these facilities was unacceptable, we stepped away from these operations, and certain unprofitable product lines while at the same time continuing to serve our customers through our London, Ontario, Decatur, Alabama facilities and our VASS program. We will focus on improving 2007 profitability with our lean manufacturing and six sigma initiatives and will continue to evaluate further product and plant rationalization opportunities. In mid February 2007 we completed the first phase of our recapitalization plan, a sale of $50 million in preferred stock to The Alpine Group, Inc. and a fund managed by Plainfield Asset Management LLC. Our recapitalization plan will ultimately provide at least $75 million, and could provide up to approximately $135 million, in total equity proceeds to Wolverine. The investment by these two organizations with proven track records speaks well for the future of Wolverine."

"Further," stated Deason, "2006 was an unusual year from an operating perspective. The year began with the residential air conditioning OEMs transitioning to the manufacturing of 13 SEER units which increased demand in the first half of the year, followed by a weaker third and fourth quarter as the OEMs adjusted their levels of inventory. Demand and pricing in the wholesale markets were extremely robust in the second quarter and while pricing remained above average in the last half of the year, demand dropped by almost 446 percent with the slowing in residential construction and the continuing substitution effect of plastic in the market. Additionally, in 2006 we were able to manage our working capital and cash requirements through improved inventory turns and decreasing days sales outstanding as required to respond to the historically high copper prices."

FOURTH QUARTER RESULTS BY SEGMENT

Commercial products gross profit was $2.8 million in 2006 compared to the prior year's fourth quarter of $5.8 million. Shipments decreased 5.7 percent to 48.8 million pounds. Net sales increased 37.3 percent to $220.7 million. These results reflect the significant rise in copper prices from an average of $2.02 per pound in the fourth quarter of 2005, versus $3.19 per pound in the fourth quarter of 2006. The lower shipments in 2006 reflect a slowing demand from the residential air conditioner, and home appliance OEMs as they adjusted their year end inventories. Commercial products pricing improved slightly in the quarter compared to the fourth quarter of 2005 with the improvement coming from the industrial tube, copper alloy tube, and joining product groups. Pricing in fabricated products and technical tube was lower due to a shift in mix to lower valued products. The unit cost of goods sold for commercial products was down slightly, even with the reduced volumes.

Gross profit for wholesale products was $554 thousand in 2006 compared to $2.4 million in the fourth quarter of 2005. Shipments totaled 12.5 million pounds as compared to the prior year's fourth quarter of 22.8 million pounds, a 45.4 percent decrease. Net sales decreased to $49.2 million from $60.3 million in the prior year. Higher copper prices and improved fabrication revenue did not, however, offset the significant decrease in demand. Additionally, with lower product demand, our cost to manufacture increased in the quarter compared to the fourth quarter of 2005 due to fixed costs absorption.

Gross profit in rod, bar and other products was $1.4 million, compared to a loss in 2005 of $296 thousand. Pounds shipped of rod and bar totaled 3.3 million pounds in 2006, as compared to 5.4 million pounds in 2005. Net sales increased to $20.7 million in 2006 from $16.9 million in 2005. These results reflect the ramp down and closing of the Montreal facility where rod and bar products were produced. With the announced closing of the facility we experienced improved pricing in the quarter and our cost to manufacture improved. Additionally, our European distribution operations had substantially improved results in the fourth quarter of 2006 compared to the prior year on both improved demand and pricing.

LIQUIDITY

We have completed the initial phase of our balance sheet restructuring with the preferred equity investment of $50.0 million by The Alpine Group, Inc. and a fund managed by Plainfield Asset Management LLC. We are now working on phases two and three of the capitalization plan which will include a $51.1 million common stock rights offering and the potential exchange offer to exchange and modify the terms of our 7.375% Senior Notes, due in August 2008. (Our recapitalization plan is described in more detail in the Forms 8-K that we filed with the Securities and Exchange Commission on February 5, 2007 and February 23, 2007). We utilized the initial $50 million of proceeds from our recapitalization plan to reduce the amounts outstanding on our liquidity facilities. Thus, as of March 2, 2007, total North American cash and availability under the receivables sales facility and the secured revolving credit facility was approximately $101.7 million, of which $23.3 million is utilized, leaving total North American cash and liquidity facility availability of $78.4 million. This $78.4 million is made up of (1) $11.7 million in cash on hand in North America, (2) $55.0 million in availability under the receivables sales facility (currently, there is no utilization of this facility), and (3) $11.7 million in additional borrowing availability under the secured revolving credit facility (current utilization under this facility is $23.3 million in outstanding letters of credit).

The tables following the text of this press release provide financial details that are included in this press release. This includes a reconciliation of net income (loss) to earnings before interest, 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, and metal joining products. Internet addresses: http://www.wlv.com and http://www.silvaloy.com.

ADDITIONAL INFORMATION REGARDING OUR RECAPITALIZATION PLAN

In connection with the proposed rights offering and exchange offer transactions described in this press release, Wolverine will file with the Securities and Exchange Commission (SEC) one or more registration statements, and/or amendments thereto, each of which will include a prospectus related to the applicable transaction. This press release does not constitute an offer of any securities for sale; no securities may be sold nor may offers to buy be accepted prior to the time the relevant registration statement (containing the applicable prospectus) becomes effective. Investors and security holders are urged to read the relevant prospectus regarding the applicable proposed transaction when it becomes available because it will contain important information. You may obtain a free copy of the relevant registration statement and prospectus (when available) and other related documents filed by Wolverine with the SEC at the SEC's website at www.sec.gov. The relevant registration statement and prospectus (when it is available) and the other documents may also be obtained for free by accessing Wolverine's website at www.wlv.com under the "Investor Relations" link and then under the heading "SEC Filings."

FORWARD-LOOKING STATEMENTS

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", "should", "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 operating and financial results and liquidity. 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 about the Company's business and other 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 operating and financial results, liquidity and our recapitalization plan, factors that could affect actual results include, without limitation, the effect of currency fluctuation; energy and raw material costs and our ability to effectively hedge these costs; fluctuation in COMEX copper, silver and other metals pricing; continuation of historical trends in customer inventory levels and expected demand for our products; outsourcing levels of OEMs; the effect of the seasonality of our business; competitive products and pricing; environmental contingencies; regulatory matters; changes in technology and our ability to maintain technologically competitive products; the mix of geographic and product revenues; the success of our product and process development activities, productivity and efficiency initiatives, including and related to transportation and natural gas, electricity and other utilities; global expansion activities, market share penetration efforts; working capital management programs and capital spending initiatives whether or not we can successfully implement our lean manufacturing and six sigma initiatives in 2007 to improve profitability; if we can achieve anticipated cost savings from any additional product and plant rationalization opportunities that arise; our ability to continue de-levering our balance sheet and to pursue alternative sources of financing, including the completion of the rights offering dependent on our stockholders approving the charter amendment to increase the number of authorized shares of common stock; the level of stockholder participation in the proposed rights offering; the level of participation by our note holders in the proposed exchange offer and generally our ability to complete the recapitalization within the expected timeframe. A discussion of these and other 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, except       period ended            period ended
 per share data        12/31/2006  12/31/2005  12/31/2006  12/31/2005
                       ----------  ----------  ----------  ----------
 Total pounds shipped      64,560      80,031     343,551     320,568
 ===================== ==========  ==========  ==========  ==========

 Net sales             $  290,646  $  237,998  $1,403,042  $  873,505
 Cost of goods sold       285,902     230,158   1,348,508     851,862
 --------------------- ----------  ----------  ----------  ----------
 Gross profit               4,744       7,840      54,534      21,643

 Selling, general and
  administrative
  expenses                  7,245      11,327      31,173      37,074
 Advisory fees and
  expenses                  3,528          --       7,434          --
 Restructuring charges      2,031        (487)     57,602       1,416
 --------------------- ----------  ----------  ----------  ----------
 Operating income
  (loss)                   (8,060)     (3,000)    (41,675)    (16,847)

 Interest expense, net      6,050       4,926      25,570      20,727
 Amortization and
  other, net                1,109       2,037       2,595       2,802
 --------------------- ----------  ----------  ----------  ----------
 (Loss) before income
  taxes                   (15,219)     (9,963)    (69,840)    (40,376)

 Income tax provision
  (benefits)               18,777       9,291       9,384      (1,760)
 --------------------- ----------  ----------  ----------  ----------
 Net (loss)            $  (33,996) $  (19,254) $  (79,224) $  (38,616)
 ===================== ==========  ==========  ==========  ==========

 --------------------- ----------  ----------  ----------  ----------
 Basic earnings per
  share:               $    (2.25) $    (1.28) $    (5.26) $    (2.57)

 Diluted earnings per
  share:               $    (2.25) $    (1.28) $    (5.26) $    (2.57)
 --------------------- ----------  ----------  ----------  ----------
 Basic shares              15,081      15,041      15,071      15,022
 Diluted shares            15,081      15,041      15,071      15,022
 --------------------- ----------  ----------  ----------  ----------

                               Segment Information (Unaudited)

                            Three-month             Twelve-month 
                            period ended            period ended
 In thousands          12/31/2006  12/31/2005  12/31/2006  12/31/2005
                       ----------  ----------  ----------  ----------
 Pounds Shipped:
 Commercial                48,838      51,788     247,437     213,962
 Wholesale                 12,454      22,827      79,114      88,455
 Rod, bar, and other        3,268       5,416      17,000      18,151
 --------------------- ----------  ----------  ----------  ----------
 Total pounds shipped      64,560      80,031     343,551     320,568
 ===================== ==========  ==========  ==========  ==========

 Net sales:
 Commercial            $  220,710  $  160,784  $1,009,343  $  619,159
 Wholesale                 49,250      60,281     310,993     195,325
 Rod, bar, and other       20,686      16,933      82,706      59,021
 --------------------- ----------  ----------  ----------  ----------
 Total net sales       $  290,646  $  237,998  $1,403,042  $  873,505
 ===================== ==========  ==========  ==========  ========== 

 Gross Profit:
 Commercial            $    2,831  $    5,760  $   30,912  $   19,422
 Wholesale                    554       2,376      22,656         650
 Rod, bar, and other        1,359        (296)        966       1,571
 --------------------- ----------  ----------  ----------  ----------
 Total gross profit    $    4,744  $    7,840  $   54,534  $   21,643
 ===================== ==========  ==========  ==========  ==========

                    WOLVERINE TUBE, INC.
       Condensed Consolidated Balance Sheet (Unaudited)

 In thousands                                 12/31/2006  12/31/2005
 -------------------------------------------  ----------  ----------
 Assets
 Cash and cash equivalents                    $   23,733  $   27,329
 Accounts receivable                              62,529     104,186
 Inventory                                       122,943     146,705
 Other current assets                             11,417      10,209
 Property, plant and equipment, net              133,259     181,238
 Other assets                                    101,449      99,098
 -------------------------------------------  ----------  ----------
 Total assets                                 $  455,330  $  568,765
 ===========================================  ==========  ==========

 Liabilities and Stockholders' Equity
 Accounts payables and other accrued 
  expenses                                    $   68,379  $  106,754
 Short-term borrowings                             1,638         248
 Pension liabilities                              28,504      42,889
 Long-term debt                                  238,362     234,920
 Other liabilities                                29,271      20,652
 -------------------------------------------  ----------  ----------
 Total liabilities                               366,154     405,463
 -------------------------------------------  ----------  ----------

 Stockholders' equity                             89,176     163,302
 -------------------------------------------  ----------  ----------

 Total liabilities and stockholders' equity   $  455,330  $  568,765
 ===========================================  ==========  ==========

 This press release contains references to adjusted earning's 
 before interest, taxes, depreciation and amortization (EBITDA), a 
 non-GAAP financial measure. The following table provides a 
 reconciliation of EBITDA to net income (loss). Management believes 
 EBITDA is a meaningful measure of liquidity and the Company's 
 ability to service debt because it provides a measure of cash 
 available for such purposes. Additionally, management provides an 
 EBITDA measure so that investors will have the same financial 
 information that management uses with the belief that it will assist 
 investors in properly assessing the Company's performance on a 
 year-over-year and quarter-over-quarter basis.

         Reconciliation of Net Income to Earnings Before Interest, 
            Taxes, Depreciation and Amortization (Unaudited)

                             Three-month             Twelve-month 
                             period ended            period ended
 In thousands          12/31/2006  12/31/2005  12/31/2006  12/31/2005
                       ----------------------  ----------------------
 Net income (loss)     $  (33,996) $  (19,254) $  (79,224) $  (38,616)
 Depreciation and
  amortization              3,995       4,246      16,977      17,048
 Interest expense, net      6,050       4,926      25,571      20,727
 Impairment of assets          89          --      34,291          --
 Non-cash portion of
  restructuring and
  non recurring
  advisory charges            533          --      14,235         661
 Income tax
  provision/(benefit)      18,777       9,291       9,384      (1,760)
 --------------------------------------------  ----------------------
 Adjusted earnings/
  (loss) before
  interest, taxes,
  depreciation and
  amortization         $   (4,552) $     (791) $   21,234  $   (1,940)
 ============================================  ======================


            

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