International Wire Group, Inc. Reports Results for the Year Ended December 31, 2001
ST. LOUIS--March 19, 2002--International Wire Group, Inc. today reported its financial results for the fourth quarter and year ended December 31, 2001. During the fourth quarter, earnings before interest, taxes, depreciation, amortization and other unusual charges ("EBITDA") was $9.2 million, a $13.8 million decrease, or 60.0%, from EBITDA of $23.1 million in the fourth quarter of 2000. For the full year, EBITDA was $57.7 million, a decrease of $40.3 million, or 41.1%, from the year ended December 31, 2000. These declines in EBITDA were the result of the weak general economic conditions in the United States, the corresponding reduction in demand for the Company's products and operating inefficiencies from lower production levels.Sales for the fourth quarter of $87.8 million were 35.4% below 2000 fourth quarter sales of $136.0 million, primarily from the result of lower volume from weak economic conditions in the United States and the impact of a decrease in the average cost and sales price of copper. The average price of copper, based upon the New York Mercantile Exchange, Inc. ("COMEX"), decreased to $0.66 per pound during the fourth quarter of 2001 from $0.86 per pound in the 2000 period.
Net sales for the year ended December 31, 2001 were $425.1 million, representing a $139.1 million, or 24.7%, decrease compared to 2000. This decrease was primarily the result of lower volume from weak economic conditions in the United States, including reduced demand from customers supplying the automotive, electronics and data communications, and industrial markets and the impact of a decrease in the average cost and selling price of copper. The average price of copper based upon COMEX decreased to $0.73 per pound during 2001 from $0.84 per pound during 2000.
EBITDA as a percentage of sales decreased to 13.6% for the year ended December 31, 2001, from 17.4% for the same period in 2000. This decrease was primarily the result of operating inefficiencies associated with reduced production levels in 2001 and lower pricing under new agreements with customers who supply the automotive industry. These operating inefficiencies were partially offset by plant closures, headcount reductions, corporate and other administrative reorganizations and other cost reduction and containment actions taken by the Company.
The discussion above reports EBITDA. Please refer to the attached schedule that reconciles EBITDA to GAAP net income (loss) and to our Form 10-K, filed March 19, 2002.
The net loss for the fourth quarter of 2001 was $8.2 million compared to net income of $0.9 million during the fourth quarter of 2000. The net loss for the year ended December 31, 2001 was $17.5 million compared to net income of $6.7 million for 2000.
David M. Sindelar, Chief Executive Officer, said, "International Wire had a challenging year in 2001 with the weak U.S. economy. Weak end-user demand and inventory reductions throughout most of our major markets served contributed to lower sales demand. Many cost reduction actions were taken to mitigate the effects of the reduced sales volume. We also realigned and consolidated our production capacity and our new plant start-up in Mexico is well underway. We are now better positioned to capitalize on new opportunities and serve our customers. In late 2001, we extended the Company's credit agreement to provide sufficient liquidity. This extension lasts through January 2005."
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.
International Wire Group, Inc., headquartered in St. Louis, Missouri is a leading 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/energy industries. The Company manufactures and distributes its products in 23 facilities strategically located in the United States, Italy, France, and the Philippines. The Company will begin operations in a new facility in Mexico during 2002.
Reconciliation of EBITDA to net income (loss) per GAAP
Three Months Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
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(In Thousands)
EBITDA $ 9,228 $ 23,057 $ 57,703 $ 98,035
Unusual charges related
to plant consolidations (2,016) -- (5,758) --
Non-cash compensation
income (expense) 10,393 (80) 10,393 (80)
Depreciation
and amortization (9,335) (8,508) (36,475) (36,206)
Impairment, unusual and
plant closing charges (6,158) -- (12,855) (650)
Inventory valuation
adjustment (10,000) -- (10,000) --
Gain/(loss) on sale of property,
plant and equipment 344 (543) 344 (543)
Interest expense (9,012) (9,326) (35,237) (40,804)
Amortization of deferred
financing costs (333) (472) (1,346) (2,097)
Other, net (318) (222) (318) (222)
Income tax (provision)
benefit 11,857 (1,284) 18,895 (7,799)
Loss from discontinued operations,
net of income taxes (2,850) (1,710) (2,850) (157)
Extraordinary (loss) -- -- -- (2,747)
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Net income (loss)
per GAAP $ (8,200) $ 912 $(17,504) $ 6,730
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