CAMDEN, N.Y.--(BUSINESS WIRE)--International Wire Group Holdings, Inc. (the “Company”) (OTC Pink: ITWG) today announced results for the first quarter ended March 31, 2016. First quarter 2016 operating income was lower than in the first quarter of 2015.
“First quarter results reflect a stabilization of demand in our largest markets served. In particular, U.S. industrial, energy, and specialty cable markets steadied and demand in this segment met our expectations. Electronics and data communications market revenues improved, driven by improved end market demand and the ongoing benefit of customer de-integration and projects to recapture market share carried over from late 2015. Our automotive business benefited from the strength of light vehicle market demand coupled with a market share recapture project offset by a challenging commercial vehicle market. Aerospace demand held firm,” said Edwin J. Flynn, Chief Executive Officer of International Wire Group Holdings, Inc.
First Quarter Results
Net sales for the quarter ended March 31, 2016 were $139.6 million, a decrease of $38.0 million, or 21.4%, compared to $177.6 million for the same period in 2015. This decrease was partly due to a lower selling price of copper, partially offset by a lower proportion of tolled copper. Tolled copper is customer-owned copper. The value of tolled copper is not included in net sales and costs of sales. Excluding the effects of lower copper prices and a lower proportion of tolled copper, net sales decreased $18.7 million, or 11.8%, versus the same period in 2015. This decrease resulted from $15.7 million of lower sales volume, $2.7 million of lower customer pricing/mix and $0.3 million from the effects of unfavorable foreign currency exchange rates. Total pounds of product sold in the first quarter of 2016 decreased by 11.7% compared to the first quarter of 2015.
Operating income for the three months ended March 31, 2016 was $9.7 million compared to $12.6 million for the three months ended March 31, 2015, a decrease of $2.9 million, or 23.0%, primarily from lower sales volume and less favorable customer pricing/mix, partially offset by higher LIFO/copper profits and more favorable plant utilization.
Net income of $2.0 million for the three months ended March 31, 2016 decreased by $2.3 million from net income of $4.3 million for the three months ended March 31, 2015. The decrease was due primarily to lower operating income partially offset by a lower income tax provision.
Net income per basic share of $0.44 for the three months ended March 31, 2016 decreased by $0.36 from the 2015 period net income of $0.80 per basic share. Net income per diluted share of $0.44 for the three months ended March 31, 2016 decreased by $0.35 from the 2015 period net income of $0.79 per diluted share.
The decrease in net income per basic share resulted from lower net income, partially offset by a decrease in outstanding shares in the 2016 period compared to the 2015 period due to the repurchase of common stock since the 2015 period. The decrease in net income per diluted share resulted from lower net income, partially offset by a decrease in the number of outstanding shares and stock options in the 2016 period compared to the 2015.
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 (benefit)/provision, depreciation and amortization expense, amortization of deferred financing costs, stock-based compensation expense, impairment charges, gain/loss on sale of property, plant and equipment, loss on early extinguishment of debt and extraordinary non-recurring gains and losses. 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 March 31, 2016 and December 31, 2015 is also presented below. In $ millions:
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Reconciliation of Net Income to Non-GAAP Adjusted EBITDA |
||||||||
| 1Q 2016 | 1Q 2015 | |||||||
| Net income | $ | 2.0 | $ | 4.3 | ||||
| Interest expense | 6.0 | 5.7 | ||||||
| Income tax provision | 1.1 | 2.2 | ||||||
| Depreciation & amortization | 4.5 | 4.3 | ||||||
| Amortization of deferred financing costs | 0.5 | 0.5 | ||||||
| Other adjustments | 0.3 | 0.2 | ||||||
| Adjusted EBITDA | $ | 14.4 | $ | 17.2 | ||||
|
Net Debt |
||||||||
| March 31, | December 31, | |||||||
| 2016 | 2015 | |||||||
| Total debt | $ | 263.1 | $ | 263.1 | ||||
| less cash | 6.6 | 9.6 | ||||||
| Net debt | $ | 256.5 | $ | 253.5 | ||||
Additional financial information will be made available on or about May 6, 2016 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, engineered wire products and high performance conductors, 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 industries. The Company has eighteen manufacturing facilities and one distribution facility located in the United States, 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 “expect”, “may,” “will,” 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. These statements are based on management’s beliefs and assumptions and on information currently available to management 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, except as required by law. 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 2015 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.
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