HUNTSVILLE, Ala., Aug. 19 /PRNewswire-FirstCall/ -- Wolverine Tube, Inc. yesterday reported results for the second quarter 2009. The net loss for the second quarter of 2009 was $11.1 million compared to a net loss of $11.9 million in the same period of 2008. The 2009 results include a $3.6 million loss on the extinguishment of our Senior Notes resulting from the payment of an exchange fee for the conversion to our new Senior Secured Notes.
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The net loss for the first half of 2009 was $18.3 million compared to $7.7 million for the same period in 2008. The 2008 results include a $5.0 million gain on the sale of a minority interest in our China subsidiary.
Net sales for the second quarter of 2009 were $113.6 million, as compared to $245.5 million for the second quarter of 2008. A total of 32.9 million pounds of copper tubing was shipped in the second quarter of 2009 compared to 46.5 million pounds in the 2008 second quarter. The comparative decrease in shipments was due primarily to decreased demand in the HVAC and appliance markets. In addition to the decline in pounds shipped, the 53% decrease in net sales was also due to the 44% decrease in the year over year price of copper, our primary raw material. Gross margin was 4.0% for the second quarter of 2009 compared to 3.2% for the second quarter of 2008.
Net sales for the first half of 2009 were $223.2 million compared to $447.0 million for the same period in 2008. A total of 63.6 million pounds of copper tubing was shipped in the first half of 2009 compared to 87.1 million in the 2008 first half. The decrease in net sales was due to lower demand in the HVAC and appliance markets and a 50% decrease in the year over year price of copper.
On April 28, 2009 we successfully completed an Exchange Offer when we issued $121.6 million aggregate principal amount of our 15% Senior Secured Notes. As part of the Exchange Offer, holders of our $38.3 million 10.5% Senior Exchange Notes and approximately $83.3 million in principal amount of our 10.5% Senior Notes due 2009 exchanged such notes for our 15% Senior Secured Notes. As a result of the successful completion of the Exchange Offer, we have approximately $121.6 million in aggregate principal amount of Senior Secured Notes
outstanding and all of our 10.5% Senior Notes and 10.5% Senior Exchange Notes due 2009 have been exchanged or retired. The Senior Secured Notes will mature on March 31, 2012.
Mr. Harold Karp, President and Chief Operating Officer, commented that "We continue to execute strategic initiatives and operational improvements critical to achieving a focused business model even though global economic conditions continue to be weak. Commodity tubing products were divested in 2008 and our balance sheet was refinanced in the first half of 2009. Manufacturing process improvement efforts yielded a 2.8% reduction in manufacturing operating costs during the first half of 2009. Working capital management improved first half 2009 inventory turns by 19% over the same period last year. We continue to make progress in advancing development of new heat transfer technology products and markets."
ABOUT WOLVERINE TUBE, INC.
Wolverine Tube, Inc. provides its customers with copper and copper alloy tube, fabricated products and metal joining products. Internet addresses: http://www.wlv.com/ and http://www.silvalloy.com/.
FORWARD-LOOKING STATEMENTS
All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectation and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in this press release. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligations to release publicly any update or revision to any forward-looking statement contained herein if there are any changes in conditions or circumstances on which any such forward-looking statement is based.
Contact: Dave Owen 256-580-3976
Wolverine Tube, Inc.
CONTACT: Dave Owen, +1-256-580-3976, for Wolverine Tube, Inc.
Web Site: http://www.wlv.com/
