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International Wire Announces Strong Second Quarter and First Six Months 2010 Results

^{Published on 2010-08-05 16:05:52 - Market Wire}
 

CAMDEN, N.Y.--([ BUSINESS WIRE ])--International Wire Group, Inc. (Pink Sheets: ITWG) today announced its results for the second quarter and first six months ended June 30, 2010. Both second quarter and first six months 2010 results were strong and significantly greater than the comparable 2009 levels. As a result, operating income and net income for the three months and six months ended June 30, 2010 were well ahead of second quarter and first six months 2009 levels.

aOur sales and operating results were again favorably impacted by increased customer demand across all major products and markets in the second quarter of 2010. Our operating income for the quarter was also driven by greater plant utilization and various cost reduction initiatives in all three business segments as well as other positive factors. We are also pleased to have completed the refinancing of the Companya™s debt and made the payment of a $5.46 per share dividend to our shareholders,a said Rodney D. Kent, Chief Executive Officer of International Wire Group, Inc.

Second Quarter Results

Net sales for the quarter ended June 30, 2010 were $166.9 million, an increase of $64.9 million, or 63.6%, compared to $102.0 million for the same period in 2009. This increase was primarily due to a higher selling price of copper, increased sales volume, higher customer pricing/mix (including silver, nickel and tin prices), and a lower proportion of tolled copper (customer-owned copper, the value of which is excluded from net sales and cost of sales), partially offset by an unfavorable currency exchange rate. Excluding the effects of higher copper prices and a lower proportion of tolled copper, net sales increased $30.6 million, or 30.0%, versus the 2009 period. This increase resulted from $29.9 million of increased volume, $1.4 million of higher customer pricing/mix, partially offset by $0.7 million of unfavorable currency effect in Europe. Total pounds of product sold in the second quarter of 2010 increased by 25.1% compared to the second quarter of 2009.

Operating income for the three months ended June 30, 2010 was $11.1 million compared to $1.3 million for the three months ended June 30, 2009, an increase of $9.8 million, or over 700%, primarily due to higher sales levels, greater plant utilization and cost reduction initiatives in all three business segments and increased metal profits and lower medical claims in one of the Companya™s segments.

Net income of $3.6 million, or $0.36 per basic and diluted share, for the three months ended June 30, 2010 increased by $4.5 million, or $0.45 per basic and diluted share, from the prior year period level of a $0.9 million net loss, or $0.09 loss per basic and diluted share. The increase was due primarily to higher operating income, which was partially offset by higher interest expense and a loss on early extinguishment of debt, both related to the Companya™s refinancing of debt in April 2010.

Six Months Results

Net sales for the six months ended June 30, 2010 were $334.7 million, an increase of $131.4 million, or 64.6%, above comparable 2009 levels of $203.3 million. This increase was primarily due to a higher selling price of copper, increased sales volume, higher customer pricing/mix (including silver, nickel and tin prices) and a lower proportion of tolled copper shipped in the 2010 period compared to the 2009 period. Excluding the effects of higher copper prices and a lower proportion of tolled copper, net sales increased by $45.1 million, or 22.2%, versus the prior year. This increase resulted from $39.8 million of increased volume and $5.3 million of higher customer pricing/mix. Total pounds of product sold in the first six months of 2010 increased by 17.2% compared to the first six months of 2009.

Operating income for the six months ended June 30, 2010 was $22.3 million compared to $5.0 million for the 2009 period, or an increase of $17.3 million, or 346%, primarily from higher sales levels, greater plant utilization and cost reduction initiatives in all three business segments and higher metal profits and lower medical claims in one of the Companya™s segments.

Net income of $9.4 million, or $0.95 per basic and diluted share, for the six months ended June 30, 2010 was greater than net income in the 2009 period of $0.1 million, or $0.01 per basic and diluted share, primarily from increased operating income partially offset by higher interest expense and loss on early extinguishment of debt, both related to the Companya™s refinancing of debt in April 2010.

Net debt (total debt less cash) was $152.1 million as of June 30, 2010, representing a $82.8 million increase from December 31, 2009 primarily from the $59.9 million dividend payment and increased working capital requirements related to the increased sales levels in the first six months of 2010.

Additional financial information is available through the Companya™s investor website ([ http://itwg.client.shareholder.com ]) in the section titled aAdditional Financial Information.a

About International Wire Group, Inc.

International Wire Group, Inc. is a manufacturer and marketer of wire products, including bare, silver-plated, nickel-plated and tin-plated copper wire, for other wire suppliers, distributors and original equipment manufacturers. Its products include a broad spectrum of copper wire configurations and gauges with a variety of electrical and conductive characteristics and are utilized by a wide variety of customers primarily in the aerospace, appliance, automotive, electronics/data communications, industrial/energy and medical device industries. The Company manufactures its products currently at 16 facilities located in the United States, France and Italy.

Forward-Looking Information is Subject to Risk and Uncertainty

Certain statements in this release may constitute aforward-lookinga statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words abelieves,a aexpects,a amay,a awill,a ashould,a aseeks,a apro forma,a aanticipates,a aintends,a aplans,a aestimates,a or the negative of any thereof or other variations thereof or comparable terminology, or by discussions of strategy or intentions. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Many important factors could cause our results to differ materially from those expressed in forward-looking statements. These factors include, but are not limited to, fluctuations in our operating results and customer orders, unexpected decreases in demand or increases in inventory levels, changes in the price of copper, tin, nickel and silver, the failure of our acquisitions and expansion plans to perform as expected, the competitive environment, our reliance on our significant customers, lack of long-term contracts, substantial dependence on business outside of the U.S. and risks associated with our international operations, limitations due to our indebtedness, loss of key employees or the deterioration in our relationship with employees, litigation, claims, liability from environmental laws and regulations and other factors.

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