CAMDEN, N.Y.--([ BUSINESS WIRE ])--International Wire Group Holdings, Inc. (the aCompanya) (Pink Sheets: ITWG) today announced its results for the first quarter ended March 31, 2012. First quarter 2012 operating income was at a record level, and well above first quarter 2011 results.
aAfter a very successful 2011, 2012 started strong driven by continued higher sales volume in our bare wire business, primarily from higher automotive and industrial/energy customer demand. Our operating margins have increased as our plants are operating more efficiently than last year and we are also increasing production rates at our new plants in New Mexico and Poland,a said Rodney D. Kent, Chief Executive Officer of International Wire Group Holdings, Inc.
First Quarter Results
Net sales for the quarter ended March 31, 2012 were $208.2 million, a decrease of $12.3 million, or 5.6%, compared to $220.5 million for the same period in 2011. This decrease was primarily due to a lower selling price of copper, a higher proportion of tolled copper (customer-owned copper, the value of which is excluded from net sales and cost of sales), lower customer pricing/mix and unfavorable currency exchange rates in Europe. These factors were partially offset by higher sales volume from increased customer demand in the automotive, consumer and appliance and industrial/energy markets. There were sales volume declines in the aerospace, electronics/data communications and European markets. Excluding the effects of lower copper prices and a higher proportion of tolled copper, net sales increased $12.0 million, or 6.1%, versus the 2011 period. Increased sales volume of $14.8 million contributed to this increase, partially offset by $2.0 million of lower customer pricing/mix and by $0.8 million from unfavorable currency rates in Europe. Total pounds of product sold in the first quarter of 2012 increased by 12.6% compared to the first quarter of 2011.
Operating income for the three months ended March 31, 2012 was $16.3 million, a record first quarter, compared to $14.4 million for the three months ended March 31, 2011, an increase of $1.9 million, or 13.2%, primarily due to higher sales in the bare wire segment and higher plant utilization and other cost reductions in all three business segments. Operating income increased in all of our U.S.-based businesses but declined somewhat in Europe.
Net income of $6.5 million, or $0.67 per basic and diluted share, for the three months ended March 31, 2012 decreased by $0.2 million, or $0.01 per basic and $0.00 per diluted share, from the prior year period level of $6.7 million, or $0.68 per basic share and $0.67 per diluted share. The decrease was due primarily to higher interest expense related to the Companyas debt issuance in June 2011, partially offset by higher operating income.
Net debt (total debt less cash) was $232.8 million as of March 31, 2012, representing a $9.8 million increase from December 31, 2011 primarily due to the $10.0 million special distribution to stockholders and option holders on March 5, 2012.
Non-GAAP Results and Net Debt
In an effort to better assist investors and debt holders in understanding the Companyas 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, 2012 and December 31, 2011 are also presented below. In $ millions:
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA | ||||||||||
1Q 2012 | 1Q 2011 | |||||||||
Net income | $ | 6.5 | $ | 6.7 | ||||||
Interest expense | 6.1 | 3.3 | ||||||||
Income tax expense | 3.4 | 3.6 | ||||||||
Depreciation & amortization | 4.4 | 4.0 | ||||||||
Other adjustments | 0.6 | 0.9 | ||||||||
Adjusted EBITDA | $ | 21.0 | $ | 18.5 | ||||||
Net Debt | ||||||||||
March 31, | December 31, | |||||||||
2012 | 2011 | |||||||||
Cash | $ | 15.2 | $ | 14.5 | ||||||
Total debt | 248.0 | 237.5 | ||||||||
Net debt | $ | 232.8 | $ | 223.0 | ||||||
Additional financial information is available through the Companyas investor website ([ http://itwg.client.shareholder.com ] or [ http://www.internationalwiregroup.com ]) in the section titled aAdditional Financial Information.a
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, appliance, automotive, electronics/data communications, industrial/energy and medical device industries. The Company currently manufactures and distributes its products at 20 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 aforward-lookinga 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 abelieves,a aexpects,a amay,a awill,a ashould,a aseeks,a apro forma,a aanticipates,a aintends,a aplans,a aestimates,a 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 aRisk Factorsa in the Companyas 2011 financial report. This report is accessible on the aAdditional Financial Informationa page on the Investor Relations portion of the Companyas website, available at [ http://itwg.client.shareholder.com ] or [ http://www.internationalwiregroup.com ].
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