International Wire Group, Inc. Reports Results for the Third Quarter and Nine Months Ended September 30, 2003
ST. LOUIS--Nov. 1, 20034, 2003--| Rothschild Inc. hired to advise on recapitalization strategy |
International Wire Group, Inc. today reported its consolidated financial results for the third quarter and nine months ended September 30, 2003.
International Wire also announced today that it has retained Rothschild Inc. to assist the Company in evaluating recapitalization alternatives in an effort to reduce debt and strengthen the Company's balance sheet.
Net sales for the third quarter ended September 30, 2003 were $94.1 million and increased over net sales for the second quarter ended June 30, 2003 by $2.8 million, or 3.0%. This increase in the sequential quarter sales growth was primarily the result of higher sales to customers supplying the automotive and appliance industries. Net sales for the third quarter ended September 30, 2003 decreased by $5.5 million, or 5.6%, compared to the same period 2002. This decrease was primarily from lower sales to customers supplying the automotive and appliance industries and a higher proportion of tolled copper, partially offset by an increase in the average cost and selling price of copper. The average price of copper based on the COMEX increased to $0.80 per pound for the quarter ended September 30, 2003 from $0.69 per pound for the quarter ended September 30, 2002.
The Company's operating income was $1.9 million and $5.0 million for the third quarter ended September 30, 2003 and 2002, respectively. Included in the quarter ended September 30, 2003 were charges of $1.0 million for severance, $0.5 million for reorganization expense and $0.3 million for impairment and plant closing. The year-over-year decrease in the third quarter's operating income was the result of the volume shortfall, competitive pricing pressures, increased insulating compound material costs and the previously mentioned charges in the 2003 third quarter. The net loss for the third quarter ended September 30, 2003 was $11.6 million compared to a net loss of $1.7 million for the third quarter ended September 30, 2002. The net loss for the three months ended September 30, 2003 included a $1.5 million loss from discontinued operations.
Net sales were $285.5 million and $307.7 million for the nine months ended September 30, 2003 and 2002, respectively. Sales for the nine months ended September 30, 2003 were $22.2 million, or 7.2%, below comparable 2002 levels primarily from lower sales to customers supplying the automotive and appliance industries, partially offset by an increase in the average cost and selling price of copper. The average price of copper based upon COMEX increased to $0.77 per pound for the nine months ended September 30, 2003 from $0.72 per pound for the nine months ended September 30, 2002.
The Company's operating income for the nine months ended September 30, 2003 was $9.1 million compared to $17.5 million in 2002. The 2003 period included charges of $1.0 million for severance, $0.5 million for reorganization expense and $0.8 million for impairment and plant closing. The decrease in the nine month's operating income was primarily due to the volume shortfall, competitive pricing pressures, increased insulating compound material costs and the previously mentioned charges in the 2003 period. These factors were partially offset by ongoing cost reduction actions, including lower selling, general and administrative expenses. The net loss for the nine months ended September 30, 2003 was $29.7 million compared to $59.3 million in the 2002 period. The net loss for the nine months ended September 30, 2003 included a $4.5 million loss from discontinued operations. The net loss for the first nine months of 2002 included a $54.5 million non-cash impairment charge, net of $19.4 million tax benefit, related to a change in accounting principle for the adoption of Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
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 22 facilities strategically located in the United States, Mexico, France, Italy and the Philippines.
For further information, please contact Glenn Holler, Senior Vice President and Chief Financial Officer, or David Webster, Chief Restructuring Officer, at (314) 719-1000.