Wolverine Tube Reports 2008 Second Quarter Results


HUNTSVILLE, Ala., Sept. 2, 2008 (GLOBE NEWSWIRE) -- Wolverine Tube, Inc. (OTCBB:WLVT) today reported results for the second quarter 2008. The net loss for the second quarter of 2008 was $3.2 million compared to net income of $13.3 million in the same period of 2007. The 2007 results include $7.1 million of non-cash income from the adjustment to fair value of the conversion price embedded in a Preferred Stock Purchase Agreement.

Net income for the first half of 2008 was $1.8 million compared to $10.9 million for the same period in 2007. The 2008 results include a $5.0 million gain on the sale of a minority interest in our China subsidiary. The 2007 six month period results included an $11.2 million non-cash gain from adjustment to fair value of the Preferred Stock described above.

Net sales for the second quarter of 2008 were $245.5 million, as compared to $297.6 million for the second quarter of 2007. A total of 46.5 million pounds of copper tubing was shipped in the second quarter of 2008 compared to 66.4 million in the 2007 quarter. The comparative decrease in shipments was due primarily to the Company's withdrawal from the domestic wholesale plumbing tube business and closure of its Decatur, Alabama manufacturing facility in late 2007. The gross margin was 3.2% for the second quarter of 2008 compared to 5.1% for the second quarter of 2007, for the comparable remaining commercial products segment. Gross margin was adversely affected in 2008 by lower production and shipping volumes, resulting from declines in the residential housing market and related demand weakness for HVAC and appliance products.

Net sales for the first half of 2008 were $447 million compared to $518.9 million for the same period in 2007. A total of 87.1 million pounds of copper tubing was shipped in the first half of 2008 compared to 119.2 million in the 2007 half. Eighty-percent of the comparative decrease is due to the withdrawal from the domestic wholesale plumbing tube business, and the balance due to the reduction in demand for HVAC and appliance products used in residential markets.

As previously reported, the Company recently discovered certain errors associated with valuing and accounting for inventory and cost of sales at its fabricated products' plant in Carrollton, Texas. In addition, the Company recorded an adjustment to certain foreign currency accounts in the first quarter of 2008 that related to translation adjustments errors recorded in prior periods. This item was unrelated to the aforementioned errors in inventory accounting. Correction of these errors has resulted in revisions to the previously issued financial statements for 2007 and the first quarter of 2008. The Company's Audit Committee has completed an independent investigation of these matters. Appropriate, corrective action has been taken and management is in the process of enhancing internal accounting procedures and controls to prevent any recurrence.

Recent Accomplishments



 * On July 8, 2008, we sold our Canadian plumbing tube business for
   approximately $41 million in cash.

 * On August 1, 2008, we retired the balance of $61 million of our
   7.38% Senior Notes.  Earlier in the year, we repurchased
   $37 million of these notes at a discount to face value.

 * Proforma net debt (net of cash and cash equivalents) is
   approximately $132 million on June 30, 2008 after giving effect to
   the sale of the Canadian plumbing tube business, down from
   approximately $264 million on June 30, 2007.

 * The Asia Pacific region's technical tube shipments for the first
   half of 2008 were up 14% and regional profitability was up 32%
   over the same prior year period.

 * Gross spread per pound for the second quarter of 2008 was up 11%
   compared to same time period in 2007, reflecting the strategic
   focus on high performance tubes and engineered heat transfer
   products.

Mr. Harold Karp, President and Chief Operating Officer, commented that, "we continue to make commercial and operational progress despite lower shipment volumes. Customer confidence has grown in our fabricated products' lines as new business represented approximately 20% of second quarter 2008 shipments. Our lean process and quality improvement initiatives have resulted in significant operational cost reductions, as second quarter results showed a 5% increase in yields and productivity in Monterrey, Mexico, and a 4% reduction in value-added cost per pound in our Shawnee, Oklahoma facility. These initiatives will continue to reduce costs and to increase productivity throughout all of Wolverine's locations."

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.silvaloy.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 expectations 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.



                  WOLVERINE TUBE, INC. FINANCIAL DATA
          Consolidated Statements of Operations (Unaudited)

                             Three months ended     Six months ended
 In thousands, except                   7/1/2007              7/1/2007
  per share data            6/29/2008  (revised)  6/29/2008  (revised)
                            ---------  ---------  ---------  ---------

 Net sales                  $ 245,511  $ 297,557  $ 446,970  $ 518,931
 Cost of goods sold           237,569    275,320    427,205    486,002
 -------------------------  ---------  ---------  ---------  ---------
 Gross profit                   7,942     22,237     19,765     32,929

 Selling, general and
  administrative expenses       6,246      7,741     13,181     14,576
 Advisory fees and expenses        27      2,405        552      6,085
 Restructuring and
  impairment charges            1,123        779      5,060      3,446
 -------------------------  ---------  ---------  ---------  ---------
 Operating income (loss)          546     11,312        972      8,822

 Loss on sale of receivables      103        810        207      1,318
 Interest and amortization
  expense, net                  5,433      5,937     11,071     11,915
 Embedded derivatives mark
  to fair value                    (3)    (7,086)        (3)   (11,177)
 Gain (loss) on sale of
  minority interest in
  Chinese subsidiary              378         --     (5,004)        --
 Other (income) expense,
  net                            (456)       188       (737)       (27)
 -------------------------  ---------  ---------  ---------  ---------
 Income (loss) from
  continuing operations
  before minority interest
  in Chinese subsidiary and
  income taxes                 (4,909)    11,463     (4,562)     6,793
 Minority interest in
  Chinese subsidiary              194         --        275         --
 Income tax expense               787        252      1,888        671
                            --------------------  --------------------
 Net income (loss) from
  continuing operations        (5,890)    11,211     (6,725)     6,122
 Income from discontinued
  operations, net of income
  taxes                         2,717      2,088      8,564      4,822
 -------------------------  --------------------  --------------------
 Net income (loss)             (3,173)    13,299      1,839     10,944

 Less: Accretion of
  convertible preferred
  stock and beneficial
  conversion feature            1,255      1,255      2,511      2,107

 Less: Preferred stock
  dividends, including
  $9,618 million non-cash
  deemed dividends
  recognized in the first
  quarter of 2007               1,625      1,000      2,816     11,118
 -------------------------  ---------  ---------  ---------  ---------
 Net income (loss)
  applicable to common
  shares                    $  (6,053) $  11,044  $  (3,488) $  (2,281)
                            =========  =========  =========  =========
 -------------------------  ---------  ---------  ---------  ---------
 Income (loss) per common
  share - Basic
  Continuing operations     $   (0.22) $    0.15  $   (0.30) $   (0.47)
  Discontinued operations        0.03       0.03       0.09       0.08
 -------------------------  ---------  ---------  ---------  ---------
 Net income (loss) per
  common share              $   (0.19) $    0.18  $   (0.21) $   (0.39)

 Income (loss) per common
  share - Diluted
  Continuing operations     $   (0.22) $    0.15  $   (0.30) $   (0.47)
  Discontinued operations        0.03       0.03       0.09       0.08
 -------------------------  ---------  ---------  ---------  ---------
 Net income (loss) per
  common share              $   (0.19) $    0.18  $   (0.21) $   (0.39)

 Common shares outstanding:
 Basic                         40,624     15,176     40,624     15,155
 Diluted                       40,624     15,176     40,624     15,155
 -------------------------  ---------  ---------  ---------  ---------
 (1) For both quarters ended June 29, 2008 and July 1, 2007 basic and
 diluted EPS are calculated, in accordance with General Accepted
 Accounting Principles ("GAAP"), by using the two-class method.


                   Segment Information (Unaudited)

 The Company currently operates in Commercial Products and Wholesale
 Products segments. Commercial Products include technical, industrial
 and copper alloy tubes, fabricated products, and metal joining
 products. Wholesale Products include plumbing and refrigeration tube.

                             Three months ended     Six months ended
                                        7/1/2007              7/1/2007
 In thousands               6/29/2008  (revised)  6/29/2008  (revised)
                            ---------  ---------  ---------  ---------

 Pounds Shipped:
 Commercial                    46,480     53,744     86,890     95,216
 Wholesale                        (12)    12,607        252     24,009


                        WOLVERINE TUBE, INC.
          Condensed Consolidated Balance Sheet (Unaudited)

                                                            12/31/2007
 In thousands                                    6/29/2008   (revised)
 ---------------------------------------------  ----------  ----------

 Assets
 Cash and cash equivalents                      $   26,363  $   63,303
 Restricted cash                                     6,957       2,126
 Accounts receivable, net                          113,131     108,398
 Inventory                                          97,400     107,238
 Assets held for sale                               75,621      43,001
 Other current assets                                9,901      12,536
 Property, plant and equipment, net                 54,645      65,762
 Other assets                                       54,262      51,802
 ---------------------------------------------  ----------  ----------
 Total assets                                   $  438,280  $  454,166
 =============================================  ==========  ==========

 Liabilities and Stockholders' Equity
 Accounts payables and accrued expenses         $   77,011  $   82,858
 Short-term borrowings                             199,526      90,939
 Liabilities held for sale                          20,992       1,853
 Deferred income taxes                                 605         677
 Pension liabilities                                14,326      17,616
 Long-term debt                                         --     146,021
 Other liabilities                                  32,447      43,410
 ---------------------------------------------  ----------  ----------
 Total liabilities                                 344,907     383,374
 ---------------------------------------------  ----------  ----------
 Minority interest in Chinese subsidiary             5,207          --
 Convertible Preferred stock                        21,098       4,393
 Total stockholders' equity                         67,068      66,399
 ---------------------------------------------  ----------  ----------

 Total liabilities, minority interest in
  Chinese subsidiary, convertible preferred
  stock and stockholders' equity                $  438,280  $  454,166
 =============================================  ==========  ==========

            

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