CAMDEN, N.Y.--(BUSINESS WIRE)--International Wire Group Holdings, Inc. (“the Company”) (OTC Pink: ITWG) today announced results for the fourth quarter and full year ended December 31, 2013. Operating income for the fourth quarter and full year 2013 were both below comparable 2012 results.
“Total 2013 pounds sold increased by 2.3% over 2012 levels but results were mixed for our major markets. Sales were higher in the automotive/specialty vehicles, consumer and appliance, electronics/data communications and medical device markets, but declined in the aerospace, medical electronics, industrial/energy and European markets. Demand for our silver-plated and tin-plated products, as well as those used in mining applications, remained soft,” said Rodney D. Kent, Chief Executive Officer of International Wire Group Holdings, Inc.
Fourth Quarter Results
Net sales for the quarter ended December 31, 2013 were $191.8 million, an increase of $30.1 million, or 18.6%, compared to $161.7 million for the same period in 2012. Excluding the effects of lower copper prices and a lower proportion of tolled copper, net sales increased $8.3 million, or 4.5%, versus the same period in 2012. Total pounds of product sold in the fourth quarter of 2013 increased by 11.3% compared to the fourth quarter of 2012.
Operating income for the three months ended December 31, 2013 was $10.6 million compared to $12.6 million for the three months ended December 31, 2012, a decrease of $2.0 million, or 15.9%, primarily due to the effects of a less favorable sales mix and lower silver prices.
Net income of $3.3 million for the three months ended December 31, 2013 increased by $10.4 million from the prior year net loss of $7.1 million. The increase was due primarily to the loss on early extinguishment of debt in the 2012 period, partially offset by a higher income tax provision in the 2013 period.
Net income per basic and diluted share of $0.55 and $0.52, respectively, for the three months ended December 31, 2013 increased by $1.31 per basic share and $1.28 per diluted share from the 2012 period loss of $0.77 per basic share and $0.76 per diluted share. The increase in net income per basic and diluted share resulted from higher net income and 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.
Full Year Results
Net sales for the year ended December 31, 2013 were $774.2 million, an increase of $40.3 million, or 5.5%, compared to 2012 period sales of $733.9 million. Excluding the effects of lower copper prices and a lower proportion of tolled copper, net sales decreased $3.0 million, or 0.4%, versus the prior year. This decrease resulted from $2.5 million of reduced sales volume and $2.4 million of lower customer pricing/mix, primarily silver, nickel and tin-plated products, partially offset by $1.9 million from the effects of favorable foreign currency exchange rates. Total pounds of product sold for the year ended December 31, 2013 increased by 2.3% compared to the year ended December 31, 2012.
Operating income for the year ended December 31, 2013 was $48.4 million compared to $57.5 million for the year ended December 31, 2012, a decrease of $9.1 million, or 15.8%, primarily from lower silver pricing, unfavorable sales mix and higher depreciation and amortization, partially offset by a favorable LIFO impact and lower selling, general and administrative expenses.
Net income of $16.7 million was higher than net income in the 2012 period of $10.8 million, primarily from reduced interest expense as the result of lower interest rates from our October 2012 refinancing and a loss on early extinguishment of debt in the 2012 period, partially offset by lower operating income and a higher income tax provision in the 2013 period.
Net income per basic share of $2.73 for the year ended December 31, 2013 increased by $1.61 from the prior year level of $1.12. Net income per diluted share of $2.61 for the year ended December 31, 2013 increased by $1.50 from the 2012 period of $1.11. The increase in net income per basic and diluted share resulted from higher net income and 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 $263.2 million as of December 31, 2013, a $9.6 million increase from December 31, 2012 primarily from higher working capital requirements to support increased sales levels in the fourth quarter of 2013 as compared to the fourth quarter of 2012.
Non-GAAP Results and Net Debt
In an effort to better assist investors and noteholders 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 tax expense, 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 costs 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. Below is a reconciliation of this non-GAAP financial measure to the most directly comparable financial measures calculated and presented in accordance with GAAP. Net debt as of December 31, 2013 and December 31, 2012 is also presented below. In $ millions:
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
|4Q 2013||4Q 2012|
|Income tax expense||1.2||(3.8||)|
|Loss on early extinguishment of debt||—||17.2|
|Depreciation & amortization||5.0||4.8|
|Amortization of deferred financing costs||0.4||0.4|
|Income tax expense||7.0||3.6|
|Loss on early extinguishment of debt||—||17.2|
|Depreciation & amortization||19.0||18.0|
|Amortization of deferred financing costs||1.7||2.0|
|December 31,||December 31,|
Additional financial information will be made available on or about March 21, 2014 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 markets. 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 changes in exchange rates 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 2013 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.