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International Wire Announces Record Second Quarter and First Six Months 2011 Results

^{Published on 2011-08-12 05:25:54 - Market Wire}
 

CAMDEN, N.Y.--([ BUSINESS WIRE ])--International Wire Group Holdings, Inc. (athe Companya) (Pink Sheets: ITWG) today announced record results for the second quarter and first six months ended June 30, 2011, with operating income and net income at all-time highs and well above comparable 2010 results.

aContinued higher customer demand in all three segments and across all major markets was the main contributing factor to the record second quarter and first six months results. With our strong operating results and liquidity, we are pleased to have completed the recent refinancing and the payment of a special distribution to our stock and option holders of $9.14 per share or option,a said Rodney D. Kent, Chief Executive Officer of International Wire Group Holdings, Inc.

Second Quarter Results

Net sales for the quarter ended June 30, 2011 were $237.9 million, an increase of $71.0 million, or 42.5%, compared to $166.9 million for the same period in 2010. 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 favorable foreign currency exchange effect, partially offset by a higher proportion of tolled copper (customer-owned copper, the value of which is excluded from net sales and cost of sales). Excluding the effects of higher copper prices and a higher proportion of tolled copper, net sales increased $39.4 million, or 19.8%, versus the same period in 2010. Increased volume of $26.6 million, $10.9 million of improved customer pricing/mix, and $1.9 million from favorable currency exchange rates in Europe contributed to this increase. Total pounds of product sold in the second quarter of 2011 increased by 21.6% compared to the second quarter of 2010.

Operating income for the three months ended June 30, 2011 was $16.9 million, a record second quarter and an all-time high quarter, compared to $11.1 million for the three months ended June 30, 2010, an increase of $5.8 million, or 52.3%, primarily due to higher sales in all three business segments. Operating income increased in all three business segments for the 2011 period compared to the 2010 period.

Net income of $7.6 million, or $0.78 per basic share and $0.75 per diluted share, for the three months ended June 30, 2011 increased by $4.0 million, or $0.42 per basic share and $0.39 per diluted share, from the prior year results of $3.6 million, or $0.36 per basic and diluted share. The increase was due primarily to higher operating income in the 2011 period and the loss associated with the early extinguishment of debt in the 2010 period, partially offset by higher interest expense related to the Companya™s debt refinancings in April 2010 and June 2011.

Six Months Results

Net sales for the six months ended June 30, 2011 were $458.4 million, an increase of $123.7 million, or 37.0%, compared to 2010 period sales of $334.7 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 favorable foreign currency exchange rate, partially offset by a higher proportion of tolled copper in the 2011 period. Excluding the effects of higher copper prices and a higher proportion of tolled copper, net sales increased $77.8 million, or 20.4%, versus the prior year. This increase resulted from $56.1 million of increased volume, $20.0 million of higher customer pricing/mix and $1.7 million from the effects of favorable foreign currency exchange rates. Total pounds of product sold in the first six months of 2011 increased by 20.6% compared to the first six months of 2010.

Operating income for the six months ended June 30, 2011 was $31.3 million compared to $22.3 million for the 2010 period, an increase of $9.0 million, or 40.4%, primarily from increased sales in all three business segments. Operating income increased in all three business segments for the six months ended June 30, 2011 compared to the six months ended June 30, 2010.

Net income of $14.3 million, or $1.46 per basic share and $1.43 per diluted share was greater than net income in the 2010 period of $9.4 million, or $0.95 per basic and diluted share, primarily from increased operating income and a lower loss on early extinguishment of debt, partially offset by higher interest expense from the Companya™s April 2010 and June 2011 debt refinancings.

Net debt (total debt less cash) was $247.2 million as of June 30, 2011, a $123.6 million increase from December 31, 2010 primarily from the $100.0 million PIK Note offering in June 2011 (the proceeds of which were used to fund a special distribution to stock and option holders) and increased working capital requirements related to higher sales levels in the first six months of 2011.

Non-GAAP Results and Net Debt

In an effort to better assist investors and noteholders in understanding the Companya™s financial results, as part of this release, the Company is also providing Adjusted EBITDA which is a measure not defined under accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA is net income excluding interest expense, income taxes, depreciation and amortization expense, impairment charges, stock compensation expense, gain/loss on sale of property, plant and equipment and assets held for sale, amortization of deferred financing fees and loss on early extinguishment of debt. Management uses Adjusted EBITDA as a measure in evaluating the performance of our business. Other companies may define Adjusted EBITDA differently. As a result, our measures of Adjusted EBITDA may not be directly comparable to measures used by other companies. Below is a reconciliation of this non-GAAP financial measure to the most directly comparable financial measures calculated and presented in accordance with GAAP. Net debt as of June 30, 2011 and December 31, 2010 is also presented below. In $ millions:

Additional financial information will be made available on or about August 12, 2011 through the Companya™s investor website ([ http://itwg.client.shareholder.com ] or [ http://www.internationalwiregroup.com ]) in the section titled aAdditional Financial Information.a

About International Wire Group Holdings, Inc.

International Wire Group Holdings, Inc., through its wholly-owned subsidiary 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 currently manufactures and distributes its products at 18 facilities located in the United States, Belgium, 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.

For additional information regarding the factors that may cause our actual results to differ from those expected by our forward-looking statements, see aRisk Factorsa in International Wire Groupa™s 2010 year-end financial report. This report is accessible on the aAdditional Financial Informationa page on the Investor Relations portion of the Companya™s website under the tab aFourth Quarter 2010a, available at [ http://itwg.client.shareholder.com ] or [ http://www.internationalwiregroup.com ].

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