International Wire Announces First Quarter 2013 Operating Results
CAMDEN, N.Y.--(BUSINESS WIRE)-- International Wire Group Holdings, Inc. (the "Company") (Pink Sheets: ITWG) today announced its results for the first quarter ended March 31, 2013. First quarter 2013 operating income was lower than in the first quarter of 2012.
"Sales demand weakened in the fourth quarter of 2012 and remained soft in the first quarter of 2013 in most major markets. Sales demand continued strong in the automotive/specialty vehicles and medical device markets. Our operating results were impacted by the reduced sales volumes, lower plant utilization and higher medical costs," said Rodney D. Kent, Chief Executive Officer of International Wire Group Holdings, Inc.
First Quarter Results
Net sales for the quarter ended March 31, 2013 were $201.1 million, a decrease of $7.1 million, or 3.4%, compared to $208.2 million for the same period in 2012. Excluding the effects of lower copper prices and a lower proportion of tolled copper processed (customer-owned copper, the value of which is not included in net sales and cost of sales), net sales decreased $10.3 million, or 4.9%, versus the 2012 period. This decrease was due to reduced sales volume of $12.9 million from decreased demand in all major markets except automotive/specialty vehicles, medical electronics and medical devices, partially offset by $2.5 million of higher customer pricing/mix and $0.1 million from favorable currency exchange rates in Europe. Total pounds of product sold in the first quarter of 2013 decreased by 4.8% compared to the first quarter of 2012.
Operating income for the three months ended March 31, 2013 was $13.1 million compared to $16.3 million for the three months ended March 31, 2012, a decrease of $3.2 million, or 19.6%, primarily due to reduced sales volume (including silver-plated products), lower plant utilization and higher medical costs. Operating income decreased in all three of our business segments.
Net income of $4.7 million for the three months ended March 31, 2013 decreased by $1.8 million from the prior year period level of $6.5 million. The decrease in net income was due primarily to lower operating income partially offset by reduced interest expense as the result of lower interest rates from our October 2012 refinancing.
Net income per basic share and net income per diluted share of $0.76 and $0.75, respectively, for the three months ended March 31, 2013 increased by $0.09 per basic share and $0.08 per diluted share from the prior year period level of $0.67 per basic and diluted share. The increase in net income per basic and diluted share resulted from a decrease in outstanding shares in the 2013 period compared to the 2012 period following the repurchase of common stock in our Dutch auction tender offer in November 2012.
Net debt (total debt less cash) was $277.9 million as of March 31, 2013, representing a $24.3 million increase from December 31, 2012 primarily due to higher accounts receivable and the payment of certain accrued expenses, partially offset by higher accounts payable.
Non-GAAP Results and Net Debt
In an effort to better assist investors and debt holders in understanding the Company'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. For reconciliations of the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, see the financial information set forth below. Net debt as of March 31, 2013 and December 31, 2012 are also presented below. In $ millions:
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Income tax expense
Depreciation & amortization
Additional financial information available through the Company's investor website (http://itwg.client.shareholder.com or http://www.internationalwiregroup.com) in the section titled "Financial Information."
About International Wire Group Holdings, Inc.
International Wire Group Holdings, Inc., through its subsidiaries, 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, automotive/specialty vehicles, consumer and appliance, electronics and data communications, industrial and energy, medical device and medical electronics industries. The Company has eighteen manufacturing and two distribution facilities located in the United States, Belgium, France, Italy and Poland.
Forward-Looking Information is Subject to Risk and Uncertainty
Certain statements in this release may constitute "forward-looking" 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 "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 the factors that may cause our actual results to differ from those expected by our forward-looking statements, see "Risk Factors" in the Company's 2012 financial report. This report is accessible on the "Financial Information" page on the Investor Relations portion of the Company's website, available at http://itwg.client.shareholder.com or http://www.internationalwiregroup.com.
International Wire Group Holdings, Inc.
Glenn J. Holler, 314-238-1322
Senior Vice-President, Chief Financial Officer and Secretary
KEYWORDS: United States North America New York
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