International Wire Group, Inc. Reports Results for the Third Quarter and First Nine Months of 2001

    ST. LOUIS--Nov. 19, 2001--International Wire Group, Inc. reported its financial results for the third quarter and nine months ended September 30, 2001. During the quarter, earnings before interest, taxes, depreciation, amortization and other unusual charges (EBITDA) were $12.6 million, a decrease of $11.1 million, or 46.9%, from the third quarter of 2000. EBITDA for the first nine months of 2001 was $48.5 million, a decrease of $26.5 million, or 35.3%. These declines in EBITDA were primarily due to the weak general economic conditions in the United States and the corresponding reduction in demand for the Company's products.
    Net sales for the quarter were $96.9 million, a decrease of $41.2 million, or 29.8%, compared to the three months ended September 30, 2000. This decrease was primarily the result of lower volume from weak general economic conditions in the United States, including reduced demand from customers supplying the automotive, electronics and data communications and industrial markets and the result of a lower cost and selling price of copper. In general, the Company prices its wire products based on a spread over the cost of copper, which results in a decreased dollar value of sales when copper costs decrease. The average price of copper based on the New York Mercantile Exchange, Inc. ("COMEX") declined from $0.87 per pound during the three months ended September 30, 2000 to $0.67 per pound during the three months ended September 30, 2001.
    The company's income (loss) from continuing operations before income tax provision and extraordinary item was ($10.5) million and $4.0 million for the third quarters of 2001 and 2000, respectively. The 2001 results include an unusual one-time charge of $4.8 million, before tax benefit, related to the realignment of production capacity, including certain plant closings, and other selling, general and administrative headcount reductions. There was no such charge in the third quarter of 2000.
    The net loss for the third quarter of 2001 was $6.0 million compared to net income of $0.2 million during the third quarter of 2000.
    Net sales for the nine months ended September 30, 2001 were $337.3 million, a decrease of $90.9 million, or 21.2%, compared to the nine months ended September 30, 2000. This decrease was primarily the result of lower volume from weak general economic conditions in the United States, including reduced demand from customers supplying the automotive, electronics and data communications and industrial markets and the result of a lower average cost and selling price of copper. The average price of copper based on COMEX declined from $0.83 per pound during the nine months ended September 30, 2000 to $0.75 per pound during the nine months ended September 30, 2001.
    EBITDA as a percentage of sales decreased to 14.4% during the nine-month period ended September 30, 2001 from 17.5% for the comparable 2000 period. This change was due primarily to lower pricing under new agreements with customers who supply the automotive industry and operating inefficiencies associated with lower production levels. These operating inefficiencies have been partially offset by headcount reductions, plant closures and other cost reduction and containment actions taken by the Company and the impact of lower copper prices.
    The company's income (loss) from continuing operations before income tax provision and extraordinary item was ($16.3) million and $13.5 million for the first nine months of 2001 and 2000, respectively. The 2001 results include an unusual one-time charge of $10.4 million, before tax benefit, related to the realignment of production capacity, including certain plant closings, and other selling, general and administrative headcount reductions.
    The net (loss) for the nine months ended September 30, 2001 was ($9.3) million compared to net income of $5.8 million during the comparable period of 2000. The 2000 net income included income from discontinued operations of $1.6 million, net of tax provision, and an extraordinary charge of $2.7 million, net of tax benefit, related to the early retirement of debt.
    The Company is in the process of refinancing its current credit agreement and has received a commitment letter from a leading commercial bank to provide the new credit facility. Based on the terms included in the commitment letter, if obtained, the new bank facility will provide a revolving loan and letter of credit facility of $70.0 million subject to certain borrowing base requirements and will mature on January 15, 2005. The Company anticipates that the proceeds from the new bank facility will be used to repay the balance outstanding under the current credit agreement and to finance on-going working capital and other operating needs of the Company. Although there can be no assurances that the new bank facility will be obtained, the new bank facility is expected to close on December 10, 2001.
    David M. Sindelar, Chief Executive Officer, said, "International Wire has been impacted by the weak U.S. economy, which will likely continue through the remainder of 2001. We have taken actions to mitigate the effects of the reduced sales volume, including reductions of variable and fixed costs. The realignment of our production capacity which started earlier in 2001 is nearly complete and will better position the Company when economic conditions improve and for the long-term."
    International Wire Group, Inc., headquartered in St. Louis, Missouri is a leading designer, manufacturer and marketer of wire products, including bare and tin-plated copper wire and insulated copper wire. The Company's products include a broad spectrum of copper wire configurations and gauges with a variety of electrical and conductive characteristics that are utilized by a wide variety of customers primarily in the appliance, automotive, electronics/data communications and general industrial industries. The Company manufactures and distributes its products in 26 facilities strategically located in the United States, Italy, France, Mexico and the Philippines.
    This press release contains forward-looking statements as defined by the federal securities laws and such statements are based on International Wire Group, Inc.'s current expectations and assumptions, which are inherently subject to various risks and uncertainties that could cause actual results to differ from those anticipated, projected or implied. Certain factors that could cause actual results to differ are indicated in International Wire Group, Inc.'s filings with the Securities and Exchange Commission.