##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 000-51043
 (Commission File Number)
 International Wire Group, Inc.
  Delaware
    
    43-1705942(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 12 Masonic Ave.
Camden, NY 13316  (315) 245-3800
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  YES þ NO o




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##### 



INTERNATIONAL WIRE GROUP, INC.
 INDEX
 PART I.  FINANCIAL INFORMATION
    
    
    1ITEM 1. FINANCIAL STATEMENTS
    
    
    1ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    
    
    12ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    21ITEM 4. CONTROLS AND PROCEDURES
    
    
    22PART II.  OTHER INFORMATION
    
    
    23ITEM 1. LEGAL PROCEEDINGS
    
    
    23ITEM 1A. RISK FACTORS
    
    
    23ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    23ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    23ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    23ITEM 5. OTHER INFORMATION
    
    
    23ITEM 6. EXHIBITS
    
    
    24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   i




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 INTERNATIONAL WIRE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 June 30,
    
    
    December 31,2009
    
    
    2008(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    6,432
    
    
    $
    7,372Accounts receivable, less allowances of $3,527 and $2,979
    
    
    63,031
    
    
    
    66,404Refundable income taxes
    
    
    1,377
    
    
    
    6,632Inventories
    
    
    48,610
    
    
    
    62,602Prepaid expenses and other
    
    
    8,208
    
    
    
    7,526Deferred income taxes
    
    
    11,258
    
    
    
    11,258Total current assets
    
    
    138,916
    
    
    
    161,794Property, plant and equipment, net
    
    
    107,798
    
    
    
    112,950Goodwill
    
    
    62,133
    
    
    
    62,133Identifiable intangibles, net
    
    
    24,232
    
    
    
    26,168Deferred financing costs, net
    
    
    1,433
    
    
    
    1,768Restricted cash
    
    
    1,366
    
    
    
    1,387Other assets
    
    
    4,100
    
    
    
    3,899Total assets
    
    $
    339,978
    
    
    $
    370,099LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current maturities of long-term debt
    
    $
    
    
    
    $
    595Accounts payable
    
    
    16,630
    
    
    
    22,254Accrued and other liabilities
    
    
    9,213
    
    
    
    10,971Accrued workers compensation costs
    
    
    7,256
    
    
    
    7,596Accrued payroll and payroll related items
    
    
    6,530
    
    
    
    7,472Customers deposits
    
    
    12,118
    
    
    
    13,348Accrued interest
    
    
    1,648
    
    
    
    1,723Dividend payable
    
    
    
    
    
    
    12,010Total current liabilities
    
    
    53,395
    
    
    
    75,969Long-term debt, less current maturities
    
    
    79,394
    
    
    
    87,792Other long-term liabilities
    
    
    8,624
    
    
    
    8,452Deferred income taxes
    
    
    16,145
    
    
    
    16,282Total liabilities
    
    
    157,558
    
    
    
    188,495Stockholders equity:Common stock, $.01 par value, 20,000,000 shares authorized, 10,130,202 issued
    
    
    102
    
    
    
    102Contributed capital
    
    
    187,441
    
    
    
    187,061Accumulated deficit
    
    
    (4,419
    )
    
    
    (4,515
    )Treasury stock at cost, 144,000 shares
    
    
    (3,036
    )
    
    
    (3,036
    )Accumulated other comprehensive income
    
    
    2,332
    
    
    
    1,992Total stockholders equity
    
    
    182,420
    
    
    
    181,604Total liabilities and stockholders equity
    
    $
    339,978
    
    
    $
    370,099
   1




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##### Table of Contents



INTERNATIONAL WIRE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except share data)Net sales
    
    $
    102,007
    
    
    $
    199,863
    
    
    $
    203,271
    
    
    $
    406,369Operating expenses:Cost of goods sold, exclusive of depreciation and
amortization expense shown below
    
    
    86,976
    
    
    
    172,976
    
    
    
    170,534
    
    
    
    350,123Selling, general and administrative expenses
    
    
    8,778
    
    
    
    11,497
    
    
    
    17,941
    
    
    
    23,085Depreciation
    
    
    4,197
    
    
    
    3,773
    
    
    
    8,267
    
    
    
    7,492Amortization
    
    
    730
    
    
    
    749
    
    
    
    1,526
    
    
    
    1,340(Gain)/loss on sale of property, plant and equipment
    
    
    
    
    
    
    (25
    )
    
    
    
    
    
    
    12Operating income
    
    
    1,326
    
    
    
    10,893
    
    
    
    5,003
    
    
    
    24,317Other income/(expense):Interest expense
    
    
    (2,263
    )
    
    
    (2,504
    )
    
    
    (4,456
    )
    
    
    (4,857
    )Amortization of deferred financing costs
    
    
    (166
    )
    
    
    (159
    )
    
    
    (335
    )
    
    
    (318
    )Other, net
    
    
    5
    
    
    
    (13
    )
    
    
    22
    
    
    
    (76
    )Income/(loss) from continuing operations before income
tax (benefit)/provision
    
    
    (1,098
    )
    
    
    8,217
    
    
    
    234
    
    
    
    19,066Income tax (benefit)/provision from continuing operations
    
    
    (224
    )
    
    
    2,666
    
    
    
    138
    
    
    
    6,400Income/(loss) from continuing operations
    
    
    (874
    )
    
    
    5,551
    
    
    
    96
    
    
    
    12,666Income from discontinued operations, net of income tax
provision of $0, $0, $0 and $63
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    125Net income/(loss)
    
    $
    (874
    )
    
    $
    5,557
    
    
    $
    96
    
    
    $
    12,791Basic net income/(loss) per share:Income/(loss) from continuing operations
    
    $
    (0.09
    )
    
    $
    0.56
    
    
    $
    0.01
    
    
    $
    1.28Income from discontinued operations
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    0.01Net income/(loss)
    
    $
    (0.09
    )
    
    $
    0.56
    
    
    $
    0.01
    
    
    $
    1.29Diluted net
income/(loss) per share:Income/(loss) from continuing operations
    
    $
    (0.09
    )
    
    $
    0.54
    
    
    $
    0.01
    
    
    $
    1.24Income from discontinued operations
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    0.01Net income/(loss)
    
    $
    (0.09
    )
    
    $
    0.54
    
    
    $
    0.01
    
    
    $
    1.25Weighted  average basic shares outstanding
    
    
    9,986,202
    
    
    
    9,937,972
    
    
    
    9,986,202
    
    
    
    9,929,620Weighted  average diluted shares outstanding
    
    
    9,986,202
    
    
    
    10,238,162
    
    
    
    9,986,202
    
    
    
    10,227,846
   2




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##### Table of Contents



INTERNATIONAL WIRE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Six Months EndedJune 30, 2009
    
    
    June 30, 2008(In thousands)Cash flows provided by operating activities:Net income
    
    $
    96
    
    
    $
    12,791Adjustments to reconcile net income to net cash provided by operating activities:Depreciation
    
    
    8,267
    
    
    
    7,492Amortization
    
    
    1,526
    
    
    
    1,340Amortization of deferred financing costs
    
    
    335
    
    
    
    318Accounts receivable allowances provision
    
    
    561
    
    
    
    91Stock-based compensation expense
    
    
    380
    
    
    
    436Loss on sale of property, plant and equipment
    
    
    
    
    
    
    12Deferred income taxes
    
    
    (137
    )
    
    
    35Change in operating assets and liabilities, net of acquisitions:Accounts receivable
    
    
    2,657
    
    
    
    (22,900
    )Inventories
    
    
    13,936
    
    
    
    (12,236
    )Prepaid expenses and other assets
    
    
    (639
    )
    
    
    (2,054
    )Accounts payable
    
    
    (4,564
    )
    
    
    28,783Accrued and other liabilities and workers compensation costs
    
    
    (2,074
    )
    
    
    4,322Accrued payroll and payroll related items
    
    
    (984
    )
    
    
    (2,116
    )Customers deposits
    
    
    (1,230
    )
    
    
    (366
    )Accrued interest
    
    
    (75
    )
    
    
    (90
    )Accrued/refundable income taxes
    
    
    5,248
    
    
    
    3,777Other long-term liabilities
    
    
    159
    
    
    
    171Net cash provided by operating activities
    
    
    23,462
    
    
    
    19,806Cash flows used in investing activities:Capital expenditures
    
    
    (3,001
    )
    
    
    (5,647
    )Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    58Restricted cash
    
    
    21
    
    
    
    99Investment in short-term securities
    
    
    (729
    )
    
    
    Acquisition of Hamilton Products, net of $293 cash received
    
    
    
    
    
    
    (9,117
    )Net cash used in investing activities
    
    
    (3,709
    )
    
    
    (14,607
    )Cash flows used in financing activities:Borrowings of long-term obligations
    
    
    61,814
    
    
    
    139,079Repayment of
long-term obligations
    
    
    (70,787
    )
    
    
    (144,029
    )Proceeds from the issuance of common stock
    
    
    
    
    
    
    902Dividend payment
    
    
    (12,010
    )
    
    
    Net cash used in financing activities
    
    
    (20,983
    )
    
    
    (4,048
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    290
    
    
    
    232Net change in cash and cash equivalents
    
    
    (940
    )
    
    
    1,383Cash and cash equivalents at beginning of the period
    
    
    7,372
    
    
    
    3,991Cash and cash equivalents at end of the period
    
    $
    6,432
    
    
    $
    5,374Supplemental disclosure of cash flow information:Interest paid
    
    $
    4,531
    
    
    $
    4,947Income taxes (refunded)/paid
    
    $
    (5,110
    )
    
    $
    2,520Amount included in accounts payable for acquisition and capital expenditures
    
    $
    194
    
    
    $
    415
   3




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##### Table of Contents



INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)
(Unaudited)
 1.
    
    Business Organization and Basis of Presentation
 Unaudited Interim Consolidated Financial Statements
  2.
    
    Acquisition
     Purchase of assets and operations
    
    $
    32,000Working capital adjustment
    
    
    (1,176
    )Fees and costs
    
    
    1,303$
    32,127
  Current assets
    
    $
    23,719Property, plant and equipment
    
    
    7,988Identifiable intangibles
    
    
    6,290Current liabilities
    
    
    (5,870
    )$
    32,127
  4




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##### Table of Contents



Business Combinations
    Pro FormaFor the Three Months Ended
    
    
    For the Six Months EndedJune 30, 2008
    
    
    June 30, 2008Net sales
    
    $
    227,872
    
    
    $
    463,403Income from continuing operations
    
    
    5,940
    
    
    
    13,571Net income
    
    
    5,934
    
    
    
    13,696Basic net income per share
    
    
    0.60
    
    
    
    1.38Diluted net income per share
    
    
    0.58
    
    
    
    1.34
 3.
    
    Recently Issued Accounting Standards
 Fair Value Measurements
 1 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities Earnings Per Share
 Interim Disclosures about Fair
Value of Financial Instruments. Disclosures
about Fair Value of Financial Instruments, Interim Financial Reporting
  5




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##### Table of Contents



Subsequent Events
 The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles  a replacement of
FASB Statement No. 162 The Hierarchy of Generally Accepted
Accounting Principles
 4.
    
    Inventories
  June 30,
    
    
    December 31,2009
    
    
    2008Raw materials
    
    $
    7,651
    
    
    $
    22,034Work-in-process
    
    
    13,633
    
    
    
    13,402Finished goods
    
    
    27,326
    
    
    
    27,166Total inventories
    
    $
    48,610
    
    
    $
    62,602
  5.
    
    Goodwill and Intangible Assets
 The carrying amounts of goodwill are as follows:
 June 30,
    
    
    December 31,2009
    
    
    2008Balance, beginning of period
    
    $
    62,133
    
    
    $
    61,560Reduction of deferred income tax valuation allowance
    
    
    
    
    
    
    (211
    )Purchase of Hamilton Products
    
    
    
    
    
    
    784Balance, end of period
    
    $
    62,133
    
    
    $
    62,133
   6




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##### Table of Contents



June 30, 2009
    
    
    December 31, 2008Accumulated
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Cost
    
    
    AmortizationCustomer contracts and relationships
    
    $
    19,597
    
    
    $
    3,792
    
    
    $
    20,510
    
    
    $
    3,171Trade names and trademarks
    
    
    10,858
    
    
    
    2,552
    
    
    
    10,908
    
    
    
    2,249Leases
    
    
    137
    
    
    
    92
    
    
    
    137
    
    
    
    46Alloys
    
    
    92
    
    
    
    16
    
    
    
    92
    
    
    
    13Total identifiable intangibles
    
    $
    30,684
    
    
    $
    6,452
    
    
    $
    31,647
    
    
    $
    5,479
  Amount2009 (remaining six months)
    
    $
    1,0152010
    
    
    1,9372011
    
    
    1,8882012
    
    
    1,8402013
    
    
    1,840Thereafter
    
    
    15,712
 6.
    
    Stock Option Plans and Compensation Expense
   For the Six Months EndedJune 30, 2009
    
    
    June 30, 2008Stock Options and Awards:Expected life  employees
    
    6 years
    
    6 yearsExpected life  non-employee directors
    
    5.5 years
    
    5.5 yearsExpected volatility
    
    50.0%
    
    50.0%Dividend yield
    
    0%
    
    0%Risk-free interest rate
    
    2.9%
    
    3.5%
   Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateOptions
    
    
    Exercise
    
    
    Remaining
    
    
    IntrinsicOutstanding
    
    
    Price
    
    
    Term in Years
    
    
    Value   (1)Outstanding at January 1, 2009
    
    
    1,072,300
    
    
    $
    15.71Granted
    
    
    Exercised
    
    
    Outstanding at June 30, 2009
    
    
    1,072,300
    
    
    $
    15.71
    
    
    
    7.4
    
    
    $
    Vested or expected to vest at June 30, 2009
    
    
    1,018,685
    
    
    $
    15.71
    
    
    
    7.4
    
    
    $
    Exercisable at June 30, 2009
    
    
    1,005,200
    
    
    $
    15.35
    
    
    
    7.1
    
    
    $
    
 (1)
    
    The aggregate intrinsic value was calculated using the difference between the market
price of the Companys common stock at June 30 and the grant price for only those awards that
have a grant price less than the market price of the Companys common stock at June 30.  7




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##### Table of Contents



7.
    
    Comprehensive Income
  For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income/(loss)
    
    $
    (874
    )
    
    $
    5,557
    
    
    $
    96
    
    
    $
    12,791Foreign currency translation adjustment
    
    
    1,843
    
    
    
    (288
    )
    
    
    340
    
    
    
    2,126Total comprehensive income
    
    $
    969
    
    
    $
    5,269
    
    
    $
    436
    
    
    $
    14,917
 8.
    
    Net Income /(Loss) Per Share
 Net income/(loss) per share is calculated using the weighted average number of common shares
outstanding during the period. For purposes of computing weighted average dilutive shares
outstanding, the Company uses the treasury stock method as required by SFAS No. 128, Earnings
Per Share (as amended). The following table provides a reconciliation of the number of shares
outstanding for basic and dilutive earnings per share:
 For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Weighted  average shares
outstanding-basic
    
    
    9,986,202
    
    
    
    9,937,972
    
    
    
    9,986,202
    
    
    
    9,929,620Dilutive effect of stock options
    
    
    
    
    
    
    300,190
    
    
    
    
    
    
    
    298,226Weighted  average shares
outstanding-dilutive
    
    
    9,986,202
    
    
    
    10,238,162
    
    
    
    9,986,202
    
    
    
    10,227,846
  9.
    
    Long-Term Debt
  June 30,
    
    
    December 31,2009
    
    
    2008Senior Revolving Credit Facility
    
    $
    4,394
    
    
    $
    12,79210% Secured Senior Subordinated Notes
    
    
    75,000
    
    
    
    75,000Other
    
    
    
    
    
    
    595Total long-term debt
    
    
    79,394
    
    
    
    88,387Less current maturities
    
    
    
    
    
    
    595Long-term portion of long-term debt
    
    $
    79,394
    
    
    $
    87,792
  8




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##### Table of Contents



Senior
Revolving Credit Facility
         
    
    An amount equal to 100 percent of the net proceeds of any incurrence of indebtedness by
the Company or any of its subsidiaries; and
    
    An amount equal to 100 percent of the net proceeds of any non-ordinary course sale or
other disposition by the Company or any of its subsidiaries of any assets, except for
certain exceptions.
  9




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##### Table of Contents



Secured Senior Subordinated Notes
    10.
    
    Income Taxes
   11.
    
    Business Segment and Geographic Information
      10




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##### Table of Contents



EngineeredWire
    
    
    HighProducts-
    
    
    PerformanceBare Wire
    
    
    Europe
    
    
    Conductors
    
    
    Corporate
    
    
    Eliminations
    
    
    TotalNet salesThree months
ended June 30,
2009
    
    $
    69,982
    
    
    $
    10,179
    
    
    $
    22,041
    
    
    $
    
    
    
    $
    (195
    )
    
    $
    102,007Three months
ended June 30,
2008
    
    
    145,524
    
    
    
    20,844
    
    
    
    34,036
    
    
    
    
    
    
    
    (541
    )
    
    
    199,863Six months ended
June 30, 2009
    
    
    135,866
    
    
    
    21,519
    
    
    
    46,437
    
    
    
    
    
    
    
    (551
    )
    
    
    203,271Six months ended
June 30, 2008
    
    
    295,501
    
    
    
    41,500
    
    
    
    70,306
    
    
    
    
    
    
    
    (938
    )
    
    
    406,369Operating income/(loss)Three months
ended June 30,
2009
    
    
    2,575
    
    
    
    (195
    )
    
    
    (830
    )
    
    
    (224
    )
    
    
    
    
    
    
    1,326Three months
ended June 30,
2008
    
    
    5,513
    
    
    
    1,814
    
    
    
    3,784
    
    
    
    (218
    )
    
    
    
    
    
    
    10,893Six months ended
June 30, 2009
    
    
    4,809
    
    
    
    (279
    )
    
    
    969
    
    
    
    (496
    )
    
    
    
    
    
    
    5,003Six months ended
June 30, 2008
    
    
    12,923
    
    
    
    3,629
    
    
    
    8,201
    
    
    
    (436
    )
    
    
    
    
    
    
    24,317GoodwillJune 30, 2009
    
    
    62,133
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,133December 31, 2008
    
    
    62,133
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,133Total assetsJune 30, 2009
    
    
    223,159
    
    
    
    34,128
    
    
    
    65,315
    
    
    
    25,736
    
    
    
    (8,360
    )
    
    
    339,978December 31, 2008
    
    
    235,688
    
    
    
    41,463
    
    
    
    70,861
    
    
    
    25,509
    
    
    
    (3,422
    )
    
    
    370,099
  For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008United States
    
    $
    90,660
    
    
    $
    177,151
    
    
    $
    179,124
    
    
    $
    359,767Europe
    
    
    11,347
    
    
    
    22,712
    
    
    
    24,147
    
    
    
    46,602Total
    
    $
    102,007
    
    
    $
    199,863
    
    
    $
    203,271
    
    
    $
    406,369
  June 30,
    
    
    December 31,2009
    
    
    2008United States
    
    $
    98,452
    
    
    $
    103,623Europe
    
    
    9,346
    
    
    
    9,327Total
    
    $
    107,798
    
    
    $
    112,950
 12.
    
    Related Party Transactions
 The Company sells a portion of its production scrap to Prime Materials Recovery, Inc. (Prime)
and Prime also performs certain scrap processing services for the Company. Prime is a closely
held company and its major shareholder, chairman and director is the Chief Executive Officer of
the Company. In addition, the Vice President of Finance of the Company holds a minority
ownership interest and is a director. The Company had sales to Prime of $2,855 and $5,953 for
the three months ended June 30, 2009 and 2008, respectively, and $4,954 and $13,451 for the six
months ended June 30, 2009 and 2008, respectively. The outstanding trade receivables were
$1,879 and $765 at June 30, 2009 and December 31, 2008, respectively. The Company incurred scrap
conversion costs from Prime of $13 and $45 for the three months ended June 30, 2009 and 2008,
respectively, and $49 and $81 for the six months ended June 30, 2009 and 2008, respectively. The
outstanding payables were $0 at both June 30, 2009 and December 31, 2008.
 13.
    
    Litigation
 The Company is subject to legal proceedings and claims that arise in the normal course of
business. In the opinion of management, the ultimate liabilities with respect to these actions
will not have a material adverse effect on the Companys financial condition, results of
operations or cash flows.
  11




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  believes, expects, may will, should, seeks, pro forma, anticipates, intends, plans, estimates,
   Overview
  
    
    Bare Wire. Our bare and tin-plated copper wire products (or conductors) are used to
transmit digital, video and audio signals or conduct electricity and are sold to a
diverse customer base of over 1,000 insulated wire manufacturers and various industrial
OEMs for use in electronics and data communications, general
industrial, energy, appliances, and automotive markets.
  12




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##### Table of Contents




    
    Engineered Wire Products  Europe. Our bare copper wire products are engineered and
used to conduct electricity either for power or for grounding purposes and are sold to
a diverse customer base of various OEMs for use in electrical appliances, power supply,
aircraft, railway and automotive markets.
    
    High Performance Conductors. Our High Performance Conductors segment manufactures
specialty high performance conductors which include tin, nickel and silver-plated
copper and copper alloy conductors including standard and
customized high and low temperature conductors as well as specialty film insulated conductors and miniature
tubing products. These products are used by a variety of customers in
the commercial and military aerospace and defense, electronics and
data communication, industrial, automotive and medical electronics and
device markets.
  
    
    Demand for the end products in which our products are incorporated.
    
    Our abilities to compete with other suppliers in the industry served.
  
    
    Electronics/data communications and industrial/energy  while the end user
applications are very diverse, some of the contributing factors of demand in the
markets include technology spending and major industrial and/or infrastructure
projects, including build-out of computer networks, mining development, oil exploration
and production projects, mass transit and general commercial and industrial real estate
development.
    
    Automobiles  For the first
six months of 2009, North American automotive industry production volumes decreased 49.3% compared to
the same period for 2008 (based on data from Automotive News). In addition, the impact of the financial restructuring and
emergence from bankruptcy of certain domestic OEMs on the supplier base can result in
changes in demand for component parts that differ from customer demand for vehicles.
    
    Additional factors relevant to the High Performance Conductors segment include
commercial aircraft deliveries and spending levels in the military defense and
electronics market as well as demand in the electro-medical equipment, medical device,
consumer electronics and industrial/energy markets. Demand for high performance wire
across all segments was negatively impacted by the weak global economy and high
customer inventory levels in the first six months of 2009. Deliveries of commercial
aircraft by Boeing tracked to forecast during the second quarter however demand for
wire was impacted by higher than anticipated inventories in the supply chain and the
continued announcements of delays in the production of the 787 Dreamliner. Incoming
order demand for aerospace products began to improve somewhat late in the second
quarter. Demand for medical device components remained strong due to the continuing
trend in acceptance and products available for minimally invasive procedures and
increased product development.
    13




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##### Table of Contents



Strategic Alternatives
   14




---



##### Table of Contents



Current Outlook
  Results of Operations
  For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    102.0
    
    
    
    100.0
    %
    
    $
    199.9
    
    
    
    100.0
    %
    
    $
    203.3
    
    
    
    100.0
    %
    
    $
    406.4
    
    
    
    100.0
    %Operating expenses:Cost of goods sold, exclusive
of depreciation and
amortization expense shown
below
    
    
    87.0
    
    
    
    85.3
    
    
    
    173.0
    
    
    
    86.5
    
    
    
    170.6
    
    
    
    83.9
    
    
    
    350.1
    
    
    
    86.1Selling, general and
administrative expenses
    
    
    8.8
    
    
    
    8.6
    
    
    
    11.5
    
    
    
    5.8
    
    
    
    17.9
    
    
    
    8.8
    
    
    
    23.1
    
    
    
    5.7Depreciation and amortization
    
    
    4.9
    
    
    
    4.8
    
    
    
    4.5
    
    
    
    2.2
    
    
    
    9.8
    
    
    
    4.8
    
    
    
    8.9
    
    
    
    2.2Operating income
    
    
    1.3
    
    
    
    1.3
    
    
    
    10.9
    
    
    
    5.5
    
    
    
    5.0
    
    
    
    2.5
    
    
    
    24.3
    
    
    
    6.0Other income/(expense):Interest expense
    
    
    (2.2
    )
    
    
    (2.2
    )
    
    
    (2.5
    )
    
    
    (1.3
    )
    
    
    (4.5
    )
    
    
    (2.2
    )
    
    
    (4.9
    )
    
    
    (1.2
    )Amortization of deferred
financing costs
    
    
    (0.2
    )
    
    
    (0.2
    )
    
    
    (0.2
    )
    
    
    (0.1
    )
    
    
    (0.3
    )
    
    
    (0.2
    )
    
    
    (0.3
    )
    
    
    (0.1
    )Income/(loss) from continuing
operations before income tax
(benefit)/provision
    
    
    (1.1
    )
    
    
    (1.1
    )
    
    
    8.2
    
    
    
    4.1
    
    
    
    0.2
    
    
    
    0.1
    
    
    
    19.1
    
    
    
    4.7Income tax (benefit)/provision
    
    
    (0.2
    )
    
    
    (0.2
    )
    
    
    2.6
    
    
    
    1.3
    
    
    
    0.1
    
    
    
    0.0
    
    
    
    6.4
    
    
    
    1.6Income/(loss) from continuing
operations
    
    
    (0.9
    )
    
    
    (0.9
    )
    
    
    5.6
    
    
    
    2.8
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    12.7
    
    
    
    3.1Income from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    Net income/(loss)
    
    $
    (0.9
    )
    
    
    (0.9
    )%
    
    $
    5.6
    
    
    
    2.8
    %
    
    $
    0.1
    
    
    
    0.1
    %
    
    $
    12.8
    
    
    
    3.1
    %
  For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales:Bare Wire
    
    $
    70.0
    
    
    
    69
    %
    
    $
    145.5
    
    
    
    73
    %
    
    $
    135.9
    
    
    
    67
    %
    
    $
    295.5
    
    
    
    73
    %Engineered Wire
Products  Europe
    
    
    10.2
    
    
    
    10
    
    
    
    20.9
    
    
    
    10
    
    
    
    21.5
    
    
    
    10
    
    
    
    41.5
    
    
    
    10High Performance
Conductors
    
    
    22.0
    
    
    
    21
    
    
    
    34.0
    
    
    
    17
    
    
    
    46.4
    
    
    
    23
    
    
    
    70.3
    
    
    
    17Eliminations
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.9
    )
    
    
    Total
    
    $
    102.0
    
    
    
    100
    %
    
    $
    199.9
    
    
    
    100
    %
    
    $
    203.3
    
    
    
    100
    %
    
    $
    406.4
    
    
    
    100
    %Operating income/(loss):Bare Wire
    
    $
    2.5
    
    
    
    166
    %
    
    $
    5.5
    
    
    
    50
    %
    
    $
    4.8
    
    
    
    87
    %
    
    $
    12.9
    
    
    
    52
    %Engineered Wire
Products  Europe
    
    
    (0.2
    )
    
    
    (13
    )
    
    
    1.8
    
    
    
    16
    
    
    
    (0.3
    )
    
    
    (5
    )
    
    
    3.6
    
    
    
    15High Performance
Conductors
    
    
    (0.8
    )
    
    
    (53
    )
    
    
    3.8
    
    
    
    34
    
    
    
    1.0
    
    
    
    18
    
    
    
    8.2
    
    
    
    33Subtotal
    
    
    1.5
    
    
    
    100
    %
    
    
    11.1
    
    
    
    100
    %
    
    
    5.5
    
    
    
    100
    %
    
    
    24.7
    
    
    
    100
    %Corporate
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.4
    )Total
    
    $
    1.3
    
    
    
    
    
    
    $
    10.9
    
    
    
    
    
    
    $
    5.0
    
    
    
    
    
    
    $
    24.3
  15




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##### Table of Contents



Three Months Ended June 30, 2009 versus Three Months Ended June 30, 2008
          16




---



##### Table of Contents



Six Months Ended June 30, 2009 versus Six Months Ended June 30, 2008
      17




---



##### Table of Contents



18




---



##### Table of Contents



Financial Condition
     Liquidity and Capital Resources
 Working Capital and Cash Flows
    Financing Arrangements
    19




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##### Table of Contents



Liquidity
     Stock Repurchase Program
   Off-Balance Sheet Arrangements
  Recently Issued Accounting Standards
 Fair Value Measurements
 1 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities Earnings Per Share
  20




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##### Table of Contents



Interim Disclosures about Fair
Value of Financial Instruments. Disclosures
about Fair Value of Financial Instruments, Interim Financial Reporting
 Subsequent Events
 The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles  a replacement of
FASB Statement No. 162 The Hierarchy of Generally Accepted
Accounting Principles
 
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Risk
     21




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##### Table of Contents



Commodity Price Risk
     
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   22




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  
 ITEM 1A.
    
    RISK FACTORS
  
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 Our Annual Meeting of Stockholders was held on June 18, 2009. At the Annual Meeting,
stockholders voted on two matters and each matter was approved. The number of shares voted
with respect to each matter required to be reported herein are as follows:
  Rodney D. Kent
    
    For: 7,934,201
    
    Withheld: 55,667Mark K. Holdsworth
    
    For: 7,989,868
    
    Withheld: 0William Lane Pennington
    
    For: 7,934,201
    
    Withheld: 55,667Peter Blum
    
    For: 7,989,868
    
    Withheld: 0David M. Gilchrist, Jr.
    
    For: 7,989,868
    
    Withheld: 0David H. Robbins
    
    For: 7,989,868
    
    Withheld: 0Lowell W. Robinson
    
    For: 7,989,868
    
    Withheld: 0John T. Walsh
    
    For: 7,989,868
    
    Withheld: 0
   
 ITEM 5.
    
    OTHER INFORMATION
   23




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##### Table of Contents



ITEM 6.
    
    EXHIBITS
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Principal Executive Officer Required by
Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.31.2
    
    
    Certification of Principal Financial Officer Required by
Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.32.1
    
    
    Certification of Principal Executive Officer Required by
Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,
and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Principal Financial Officer Required by
Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,
and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
  24




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##### Table of Contents



SIGNATURES
  INTERNATIONAL WIRE GROUP, INC.Dated: August 7, 2009
    By:
    /s/ GLENN J.  HOLLERName:
    Glenn J.  HollerTitle:
    Senior Vice
President, Chief
Financial Officer
(Principal
Financial and
Accounting Officer)
and Secretary  25




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Principal Executive Officer Required by
Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.31.2
    
    
    Certification of Principal Financial Officer Required by
Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.32.1
    
    
    Certification of Principal Executive Officer Required by
Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,
and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Principal Financial Officer Required by
Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,
and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
  26