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International Wire Announces Strong Third Quarter and First Nine Months 2010 Results

^{Published on 2010-11-05 20:41:24 - Market Wire}
 

CAMDEN, N.Y.--([ BUSINESS WIRE ])--International Wire Group, Inc. (Pink Sheets: ITWG) today announced its results for the third quarter and first nine months ended September 30, 2010. Both third quarter and first nine months 2010 results were strong and significantly above the comparable 2009 levels. Operating income results for the three and nine months ended September 30, 2010 were well ahead of third quarter and first nine months 2009 levels and at record levels.

"Increased customer demand across all major products and markets in the third quarter of 2010 resulted in continued strong sales and operating results. Greater plant utilization and various cost reduction initiatives in all three business segments also contributed to the record operating results"

aIncreased customer demand across all major products and markets in the third quarter of 2010 resulted in continued strong sales and operating results. Greater plant utilization and various cost reduction initiatives in all three business segments also contributed to the record operating results," said Rodney D. Kent, Chief Executive Officer of International Wire Group, Inc.

Third Quarter Results

Net sales for the quarter ended September 30, 2010 were $174.9 million, an increase of $59.7 million, or 51.8%, compared to $115.2 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 $28.0 million, or 24.3%, versus the 2009 period. This increase resulted from $27.2 million of increased volume and $1.8 million of higher customer pricing/mix, partially offset by $1.0 million of unfavorable currency effect in Europe. Total pounds of product sold in the third quarter of 2010 increased by 24.0% compared to the third quarter of 2009.

Operating income for the three months ended September 30, 2010 was $12.5 million compared to $6.0 million for the three months ended September 30, 2009, an increase of $6.5 million, or 108.3%, primarily due to higher sales levels, greater plant utilization and cost reduction initiatives in all three business segments and increased metal profits in one of the Companya™s segments.

Net income of $4.8 million, or $0.49 per basic and diluted share, for the three months ended September 30, 2010 increased by $2.0 million, or $0.21 per basic and diluted share, from the prior year period level of $2.8 million, or $0.28 per basic and diluted share. The increase was due primarily to higher operating income, which was partially offset by higher interest expense related to the Companya™s refinancing of debt in April 2010 and a higher income tax provision.

Nine Months Results

Net sales for the nine months ended September 30, 2010 were $509.6 million, an increase of $191.1 million, or 60.0%, above comparable 2009 levels of $318.5 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 $73.3 million, or 23.0%, versus the prior year. This increase resulted from $67.1 million of increased volume and $7.1 million of higher customer pricing/mix partially offset by $0.9 million of unfavorable currency effect in Europe. Total pounds of product sold in the first nine months of 2010 increased by 19.5% compared to the first nine months of 2009.

Operating income for the nine months ended September 30, 2010 was $34.8 million compared to $11.1 million for the 2009 period, an increase of $23.7 million, or 213.5%, 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 $14.2 million, or $1.44 per basic and diluted share, for the nine months ended September 30, 2010 was greater than net income in the 2009 period of $2.9 million, or $0.29 per basic and diluted share, primarily from increased operating income partially offset by higher interest expense and loss on early extinguishment of debt, both primarily related to the Companya™s refinancing of debt in April 2010, and a higher income tax provision.

Net debt (total debt less cash) was $140.0 million as of September 30, 2010, representing a $70.7 million increase from December 31, 2009 primarily from the $59.9 million dividend payment in the second quarter and increased working capital requirements related to the increased sales levels in the third quarter 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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