International Wire Announces Third Quarter and First Nine Months 2009 Results

November 11, 2009 4:06 PM EST

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, 2009. Third quarter operating income for 2009 was well above the second quarter 2009 level due to improved plant utilization and operating efficiencies and a slight increase in pounds shipped, but was below the third quarter 2008 level due to continuing recessionary conditions in the U.S. and Europe. Net income for the third quarter 2009 exceeded the comparable 2008 level as a result of a lower effective income tax rate. Results for the first nine months of 2009 decreased from the comparable period of 2008, driven primarily by lower sales volume throughout the nine months and reduced plant utilization in the first six months.

"In the third quarter, our operating results improved and exceeded the second quarter level, but weak end user demand and industry-wide conditions continued. We achieved significant cost reduction initiatives and operating efficiencies which reduced the impact of weak customer demand," said Rodney D. Kent, Chief Executive Officer of International Wire Group, Inc. "Our cost structure and capacity has been adjusted for the lower sales levels. Our balance sheet remains strong and we have over $90 million of liquidity as of September 30, 2009."

Third Quarter Results

Net sales for the quarter ended September 30, 2009 were $115.2 million, an $88.2 million, or 43.4%, decrease from net sales of $203.4 million for the same period in 2008. This decrease was primarily due to a lower selling price of copper, decreased volume, lower customer pricing/mix (including silver, nickel and tin prices), and the impact of a stronger U.S. dollar versus the Euro. The sales decrease was partially offset by a lower proportion of tolled copper (customer-owned copper, the value of which is excluded from net sales and cost of sales) shipped in the 2009 period compared to the 2008 period. Excluding the effects of lower copper prices and a lower proportion of tolled copper shipped, net sales decreased $64.8 million, or 36.0%, versus the prior year. This decrease resulted from $62.0 million of lower volume, $1.9 million of lower customer pricing/mix and $0.9 million of unfavorable currency effect in Europe. Total pounds of product sold in the third quarter of 2009 declined by 32.6% compared to the third quarter of 2008.

Operating income for the three months ended September 30, 2009 was $6.0 million compared to $7.8 million for the three months ended September 30, 2008, a decrease of $1.8 million, or 23.1%, primarily due to lower sales volume partially offset by operating cost reductions and lower selling, general and administrative expenses.

Net income was $2.8 million, or $0.28 per basic and diluted share for the three months ended September 30, 2009 compared to net income of $2.4 million, or $0.24 per basic share and diluted share, for the three months ended September 30, 2008 due primarily to a lower effective tax rate.

Nine Month Results

Net sales for the nine months ended September 30, 2009 were $318.5 million, a decrease of $291.2 million, or 47.8%, from the comparable 2008 level of $609.7 million. Sales declined due to a decrease in the selling price of copper, reduced volume, lower customer pricing/mix (including silver, nickel and tin prices) and an unfavorable currency exchange rate. These factors were partially offset by a lower proportion of tolled copper shipped in the 2009 period compared to the 2008 period. Excluding the effects of lower copper prices and a lower proportion of tolled copper business, net sales decreased $192.0 million, or 37.6%, versus the prior year. This decrease resulted from $179.4 million of reduced volume (despite nine months of sales in the 2009 period from the Global Wire acquisition versus three months in the 2008 period), $6.5 million of lower customer pricing/mix and $6.1 million of unfavorable currency effect in Europe. Total pounds of product sold in the first nine months of 2009 declined by 32.4% compared to the first nine months of 2008.

Operating income for the nine months ended September 30, 2009 was $11.1 million compared to $32.1 million for the 2008 period, or a decrease of $21.0 million, or 65.4%, primarily from lower sales volume and reduced plant utilization in the first six months partially offset by operating cost reductions and lower selling, general and administrative expenses.

Net income of $2.9 million, or $0.29 per basic and diluted share, for the nine months ended September 30, 2009 was lower than net income in the 2008 period of $15.2 million, or $1.53 per basic share and $1.48 per diluted share, primarily due to lower operating income.

Net debt (total debt less cash) was $72.7 million as of September 30, 2009 representing a $0.3 million decrease in the third quarter and an $8.3 million decrease from the December 31, 2008 level primarily as the result of lower working capital requirements.

Additional financial information is available through the Company's investor relations website (http://itwg.client.shareholder.com) in the section titled "Additional Financial Information."

Conference Call

International Wire Group, Inc. will hold a conference call to discuss its third quarter and first nine months 2009 results on November 18, 2009 at 9:00 a.m. Eastern Time. To participate in the call, please call 1-866-688-5698 (U.S. and Canada callers) or 1-816-650-2865 (international callers) at least 10 minutes prior to the scheduled start of the call and reference the Conference ID number 40658499. For those unavailable to participate in the live teleconference, a replay can be accessed by calling 1-800-642-1687 and referencing Conference ID number 40658499 until 11:59 p.m. Eastern Time on November 25, 2009.

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 and distributes its products currently at 17 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 "forward-looking" statements. 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 "believes," "expects," "may," "will," "should," "seeks," "pro forma," "anticipates," "intends," "plans," "estimates," 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 risk factors, see our discussion in Part I, Item 1A of our latest Annual Report on Form 10-K that we filed with the Securities and Exchange Commission on March 12, 2009 available at (http://www.sec.gov/Archives/edgar/data/947429/000095013409005133/0000950134-09-005133-index.htm).

ITWG-G

    Source: International Wire Group, Inc.

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