##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549FORM 10-K

|    |  |                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------
|[X] |  | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2002,

OR

|      |  |                                                                                                                                
|----- |  | -------------------------------------------------------------------------------------------------------------------------------
|[   ] |  | Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from      to

Commission file number 1-12164

WOLVERINE TUBE, INC.

---

(Exact name of registrant as specified in its charter)


|                                         |  |                                  
|---------------------------------------- |  | ---------------------------------
|Delaware                                 |  | 63-0970812                       
|                                         |  |                                  
|(State of Incorporation)                 |  | (IRS Employer Identification No.)
|                                         |  |                                  
|200 Clinton Avenue West, 10th Floor      |  |                                  
|Huntsville, Alabama                      |  | 35801                            
|                                         |  |                                  
|(Address of principle executive offices) |  | (Zip Code)                       

(256) 353-1310

---

(Registrants Telephone Number, including Area Code)


Securities registered pursuant to Section 12(b) of the Act:

|                              |  |                                      
|----------------------------- |  | -------------------------------------
|Title of each class:          |  | Name of exchange on which registered:
|Common Stock, $0.01 Par Value |  | New York Stock Exchange              
|                              |  |                                      

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   YES   [X]      NO   [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.   [   ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).   YES   [X]      NO   [   ]

The aggregate market value of the voting and non-voting common equity held by
nonaffiliates of the registrant as of June 28, 2002, was approximately
$91,200,000 based upon the closing price reported for such date on the New York
Stock Exchange. For purposes of this disclosure, shares of Common Stock held
by executive officers and directors of the registrant have been excluded
because such persons may be deemed to be affiliates.

Indicate the number of shares outstanding of each class of Common Stock, as of
the latest practicable date:

|                              |  |                                
|----------------------------- |  | -------------------------------
|Class                         |  | Outstanding as of March 7, 2003
|                              |  |                                
|Common Stock, $0.01 Par Value |  | 12,262,439 Shares              

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for the annual stockholders meeting
to be held May 14, 2003, are incorporated by reference into Part III.



---



---

TABLE OF CONTENTS



|                                          |                                                                                                        |  |  |  |  |  |  | 
|----------------------------------------- | ------------------------------------------------------------------------------------------------------ |  |  |  |  |  |  | 
|PART I                                   
|                                          | ITEM 1 BUSINESS                                                                                       
|                                          | ITEM 2 PROPERTIES                                                                                     
|                                          | ITEM 3 LEGAL PROCEEDINGS                                                                              
|                                          | ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                            
|PART II                                  
|                                          | ITEM 5 MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                          
|                                          | ITEM 6 SELECTED FINANCIAL DATA                                                                        
|                                          | ITEM 7 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS          
|                                          | ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                    
|                                          | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                    
|                                          | ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES          
|PART III                                 
|                                          | ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                            
|                                          | ITEM 11 EXECUTIVE COMPENSATION                                                                        
|                                          | ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|                                          | ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                
|                                          | ITEM 14 CONTROLS AND PROCEDURES                                                                       
|PART IV                                  
|                                          | ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                               
|2002 CHANGE IN CONTROL DATED JULY 12 2002
|AMENDMENT NO.2 DATED MARCH 25 2002       
|2003 ANNUAL PERFORMANCE INCENTIVE PLAN   
|LIST OF SUBSIDIARIES                     
|CONSENT OF ERNST AND YOUNG               
|CERTIFICATE OF CEO PURSUANT TO 18 U.S.C  
|SECTION 906 OF THE SARBANES OXLEY ACT    



---



##### Table of Contents



FORM 10-K

YEAR ENDED DECEMBER 31, 2002

TABLE OF CONTENTS

|         |  |                                                                                                |  |         
|-------- |  | ---------------------------------------------------------------------------------------------- |  | --------
|         |  |                                                                                                |  | Page No.
|         |  |                                                                                                |  |         
|         |  | PART I                                                                                         |  |         
|         |  |                                                                                                |  |         
|Item 1.  |  | Business                                                                                       |  | 1       
|Item 2.  |  | Properties                                                                                     |  | 13      
|Item 3.  |  | Legal Proceedings                                                                              |  | 15      
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                            |  | 16      
|         |  |                                                                                                |  |         
|         |  | PART II                                                                                        |  |         
|         |  |                                                                                                |  |         
|Item 5.  |  | Market for Registrants Common Equity and
Related Stockholder Matters                          |  | 17      
|Item 6.  |  | Selected Financial Data                                                                        |  | 18      
|Item 7.  |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations          |  | 20      
|Item 7A  |  | Quantitative and Qualitative Disclosures About
Market Risk                                     |  | 40      
|Item 8.  |  | Financial Statements and Supplementary Data                                                    |  | 41      
|Item 9.  |  | Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures          |  | 42      
|         |  |                                                                                                |  |         
|         |  | PART III                                                                                       |  |         
|         |  |                                                                                                |  |         
|Item 10. |  | Directors and Executive Officers of the Registrant                                             |  | 43      
|Item 11. |  | Executive Compensation                                                                         |  | 44      
|Item 12. |  | Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters |  | 45      
|Item 13. |  | Certain Relationships and Related Transactions                                                 |  | 46      
|Item 14. |  | Controls and Procedures                                                                        |  | 47      
|         |  |                                                                                                |  |         
|         |  | PART IV                                                                                        |  |         
|         |  |                                                                                                |  |         
|Item 15. |  | Exhibits, Financial Statement Schedules and
Reports on Form 8-K                                |  | 48      



---



---



##### Table of Contents






PART I




|       |  |          |  | 
|------ |  | -------- |  | 
|ITEM 1 |  | BUSINESS |  | 

Introduction

We are a world-class quality manufacturer of copper and copper alloy tube,
fabricated and metal joining products and copper and copper alloy rod and bar
products. We focus on custom-engineered, higher value-added tubular,
fabricated and metal joining products which enhance performance and energy
efficiency in many applications, including commercial and residential heating,
ventilation and air conditioning, refrigeration, home appliances, automotive,
industrial equipment, power generation, petrochemicals and chemical processing.
We believe that we have the broadest product offering of any North American
manufacturer of copper and copper alloy tube, which allows us to offer packaged
solutions and pursue cross-selling opportunities. Our technological expertise
has helped us to establish strong and long-standing relationships with many of
the leading users of higher value-added copper tube in North America and
enables us to maintain leading market shares in our most important product and
geographic markets.

We make available on our website, free of charge, http://www.wlv.com/, our

annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports as soon as reasonably practicable
after electronically filing or furnishing such material to the Securities and
Exchange Commission.

History and Structure

We are a Delaware corporation organized in 1987. We are the successor to a
business founded in Detroit in 1916. In August 1993, we and certain
stockholders engaged in an initial public offering of 6,555,000 shares of
common stock and the net proceeds to us were approximately $46.4 million. In
September 1995, we completed a secondary public offering of 4,882,700 shares of
common stock. No additional shares of common stock were issued by us in
conjunction with this secondary stock offering.

We have expanded our operations through
acquisitions and international growth over
the past five years. In May 1998, we acquired a 240,000 square foot welded
tube manufacturing facility in Jackson, Tennessee, and the related equipment
and technology, from Korea-based Poongsan Corporation, for approximately $35.4
million in cash. In July 1998, we opened our Shanghai, China facility. This
60,000 square foot plant specializes in the manufacture of higher value added
copper and copper alloy technical tube as well as brazed assemblies.

In September 2000, we acquired from Engelhard Corporation its joining products
business, a leading manufacturer of brazing alloys and fluxes, as well as a
supplier of lead-free solder, based in Warwick, Rhode Island, for approximately
$41.8 million in cash.

In December 2001, we completed construction of our 33,000 square foot technical
tube manufacturing facility in Esposende, Portugal. We invested approximately
$9.0 million to complete the facility, which began commercial production in
January 2002.

1

---



---



##### Table of Contents



Industry

The industry in which we operate is multi-faceted. Several of our competitors
produce tube products of a single type. In contrast, we produce a broad array
of products, such as technical tube for large commercial air conditioners used
in high-rise buildings, industrial tube and fabricated products used in
residential and light commercial air conditioning units, wholesale tube used in
commercial and residential construction, and copper and copper alloy tube used
in power generation, petrochemical and marine applications. Moreover, our
metal joining products are used in almost all of these applications.

Competition

While no single company competes with us in all of our product lines, we face
significant competition in each of our product lines. Cerro Copper Products
Co., Inc., Industrias Nacobre S.A. de C.V., Kobe Copper Products Inc., Wieland
- Werke AG, Mueller Industries Inc., Olin Corporation, Outokumpu American Brass
Company, J.W. Harris Company, Inc. and others compete with us in one or more
product lines. Minimal product differentiation among competitors in our
wholesale and rod and bar product lines creates a pricing structure that
enables customers to differentiate products almost exclusively on price. In
these product areas, certain of our competitors have significantly larger
market shares than us, and tend to be the industry pricing leaders. If our
competitors in these product lines were to significantly reduce prices, our
business, operating results or financial condition could be adversely affected.

For certain of our higher value-added commercial products, which have higher
margins, we compete primarily on the basis of the technical advantages of these
products. Technical improvements by competitors could reduce our competitive
advantage in these product lines and thereby adversely affect our business,
operating results or financial condition. We could also be adversely affected
if new technologies emerge in the air conditioning, refrigeration or other
consumer industries that reduce or eliminate the need for copper and copper
alloy tube, fabricated products and metal joining products. Certain of our
products, such as plumbing tube, compete with products made of alternative
substances, such as polybutylene plastic. A substantial increase in the price
of copper could decrease the relative attractiveness of copper products in
cases where an alternative exists and thereby adversely affect our business,
operating results or financial condition.

Products

We classify our products as commercial products, wholesale products or rod, bar
and other products.

Commercial Products

Commercial products consist of several types of technically enhanced tube and
fabricated products made to customer specifications, as well as our metal
joining products. We believe that we are the primary supplier of one or more
commercial products to some of the worlds largest and best known
manufacturers, particularly in the commercial and residential heating,
ventilation and air-conditioning, refrigeration and home appliance industries.
Generally, our technical tube

2

---



---



##### Table of Contents



and fabricated products are custom designed for specific customer applications
and manufactured and sold directly to customers. Because of the higher level
of added value, profitability tends to be higher for commercial products than
for our other products.

Our commercial products include:

Industrial Tube.Small (as small as .01) and medium diameter copper tube used
primarily by residential air conditioning, appliance and refrigeration
equipment manufacturers is known as industrial tube. Industrial tube is made
to customer specifications for equipment manufacturing. Our industrial tube
products include coils in lengths of up to one mile (to permit economical
transport to customers for further processing), smooth straight tube,
internally enhanced tube with internal surface ridges to increase heat transfer
in air conditioning coils, and very small diameter capillary tube (for control
valve applications).

Technical Tube.Technical tube is used to increase heat transfer in large
commercial air conditioners, heat exchangers for power generating and chemical
processing plants, water heaters, swimming pool and spa heaters and large
industrial equipment oil coolers. Small, wedge-like grooves (fins) on the
outer surface, together with internal enhancements of technical tube, increase
surface area and refrigerant agitation, thereby increasing heat transfer
efficiency. We were the first to commercially develop integral finned tube, in
which the fins are formed directly from the wall of the tube, and we hold
patents in this area.

Copper Alloy Tube.Copper alloy tube (principally copper mixed with nickel) is
manufactured for certain severe uses and corrosive environments such as
condenser tubes and heat exchangers in power generating plants, chemical
plants, refineries and ships. Our copper alloy tube products include smooth
and surface enhanced tube produced from a variety of alloys. Also included in
the alloy tube category are surface enhanced titanium, brass and steel tube we
produce from smooth tube supplied by outside sources.

Fabricated Products.Fabricated products encompass a wide variety of copper,
copper alloy, steel and aluminum tube products and subassemblies for a number
of different applications. Precision drawn tube can be supplied in exact
tolerance cut lengths or coils. Specialty fabricated parts, sub-assemblies and
components (such as return bends and manifolds) are also produced.
Capabilities which include cutting, bending/swaging, end spinning, hole
piercing/drilling, specialized coiling and brazing, can be applied to a wide
range of products.

Metal Joining Products.Metal joining products include brazing alloys, fluxes
and lead-free solder used in the air conditioning, plumbing, electronic,
lighting, shipbuilding, aerospace, general industrial and other metal-joining
industries. There are over 2,000 product variations in this category, marketed
under such brand names as Silvaloy®, Silvabrite®,
Silvabrite 100®, Black FluxTM and Ultra Flux®.

Commercial product sales accounted for 77%, 76% and 78% of the Companys net
sales in 2002, 2001 and 2000, respectively.

Wholesale Products

Wholesale products consist of plumbing and refrigeration service tube produced
in standard sizes and lengths primarily for plumbing, air conditioning and
refrigeration service applications.

3

---



---



##### Table of Contents



Many major competitors manufacture the most common 3/4 and 1/2 diameter
plumbing tube. These products are considered commodity products because price
and delivery are the primary competitive factors. Plumbing tube and
refrigeration service tube are sold primarily through master distributors and
wholesalers.

Wholesale product sales accounted for 17%, 17% and 16% of the Companys sales
in 2002, 2001 and 2000, respectively.

Rod, Bar and Other Products

Rod, bar and other products consist of a broad range of copper and copper alloy
solid products, including round, rectangular, hexagonal and specialized shapes.
Brass rod and bar are used by industrial equipment and machinery manufacturers
for valves, fittings and plumbing goods. Copper bars are used in electrical
distribution systems and switchgear. Copper and copper alloy rod and bar
products are sold directly to manufacturers and to service centers that keep an
inventory of standard sizes. Other products consist of various tube, rod, bar
and other items sold by our product distribution facility in The Netherlands.

Rod, bar and other products accounted for 6%, 7% and 6% of the Companys sales
in 2002, 2001 and 2000, respectively.

Sales and Marketing

We use a direct sales force augmented by independently contracted sales agents
to pursue global sales opportunities. In addition, we employ customer service
representatives responsible for responding to customer questions and
undertaking or initiating any required customer service response. We believe
our sales structure forms a critical link in communicating with our customers.
Our sales and marketing employees are particularly important in the higher
value-added product segments, in which we often work with customers in their
product enhancement and new product development efforts. The sales function is
coordinated through key senior executives responsible for our sales and
marketing efforts.

North America.Our sales structure in North America consists of sales officers
and managers, field marketing representatives, customer service representatives
and independent sales agents who are responsible for selling and servicing
accounts.

International.Our overseas export sales are carried out both directly with
major overseas customers and through foreign sales agents. We have sales,
marketing and business development offices in Apeldoorn, The Netherlands and
Shanghai, China.

For information concerning the amount of sales, gross profit and certain other
financial information about foreign and domestic operations see Note 20 of the
Notes to Consolidated Financial Statements.

Energy Efficiency and Governmental Regulations

We expect that demand for our higher value-added, energy efficient tubes will
continue as manufacturers continue to seek ways to produce more energy
efficient and lower operating cost units and as existing commercial air
conditioners continue to be replaced in response to the ban on production of
chlorofluorocarbons. Government regulations at local, state and federal levels

4

---



---



##### Table of Contents



periodically provide various incentives for more energy efficient products,
such as air conditioners, refrigerators and similar appliances, which may also
increase demand for our products. However, there can be no assurance that this
anticipated demand will materialize, or that we will not face increased
competition, with an adverse effect on profitability, from other manufacturers
in this higher value-added segment.

Markets

Major markets for each of our product lines are set forth below:

|                    |                        |                                                             |                                                                                                                                                                                                                                                              
|------------------- | ---------------------- | ----------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Products            |                        | Major Markets                                              
|                    |                        |                                                            
|Commercial Products |                        |                                                            
|                    | Technical Tube         |                                                             | Commercial air
conditioning manufacturers, power and process industry, heat
exchanger manufacturers, water, swimming pool and spa heater
manufacturers and oil cooler manufacturers.                                                                         
|                    |                        |                                                            
|                    | Industrial Tube        |                                                             | Residential and small
commercial air conditioning manufacturers, appliance
manufacturers, automotive manufacturers, industrial equipment
manufacturers, refrigeration equipment manufacturers and redraw
mills (which further process the tube).             
|                    |                        |                                                            
|                    | Copper Alloy Tube      |                                                             | Utilities and other power
generating companies, refining and chemical processing companies,
heat exchanger manufacturers and shipbuilders.                                                                                                                   
|                    |                        |                                                            
|                    | Fabricated Products    |                                                             | Commercial and
residential air conditioning manufacturers, refrigeration
manufacturers and consumer appliance manufacturers. Automotive,
controls, welding, electrical, marine, building, heat transfer
industries and other general industrial applications.
|                    |                        |                                                            
|                    | Metal Joining Products |                                                             | Residential and
commercial air conditioning manufacturers, plumbing, electronic,
lighting, shipbuilding, aerospace, catalysts and other metal
joining industries.                                                                                            
|                    |                        |                                                            
|Wholesale Products  |                        | Plumbing wholesalers and
refrigeration service wholesalers.

5

---



---



##### Table of Contents



|                            |  |                                                                                                                                                               
|--------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Rod, Bar and Other Products |  | Electrical equipment and
automotive parts manufacturers, locomotive, aluminum smelting and
other industrial equipment manufacturers and metal service centers.

Key Customers

In 2002, 2001 and 2000 our 10 largest customers accounted for approximately
47%, 44%, and 45%, respectively, of our consolidated net sales. No customer
accounted for 10% or more of our consolidated net sales in 2002, 2001 or 2000.

Backlog

A significant part of our sales are based on short-term purchase orders. For
this reason, we do not maintain a backlog and we believe that backlog is not
necessarily a meaningful indicator of future results. A significant amount of
our sales result from customer relationships wherein we provide a high degree
of specialized service and generally become the largest supplier of a
customers copper and copper alloy requirements. Under these arrangements, our
customers provide forecasts of their requirements, against which purchase
orders are periodically released. In several cases we have entered into
multi-year arrangements with major customers to continue to serve as the
predominant supplier and in many cases the exclusive supplier on a global
basis.

Manufacturing

The manufacture of copper and copper alloy tube, fabricated products and metal
joining products consists of casting, extruding, drawing, forming, joining and
finishing processes. In most cases, the raw material is first cast into a
solid cylindrical shape or billet. The billet is then heated to a high
temperature, a hole is pierced through the center of the cylinder, and the
cylinder is then extruded under high pressure. The material is either drawn to
smaller sizes or reduced on a forging machine and then drawn to smaller sizes.
The outside and/or inside surface may be enhanced to achieve the desired heat
transfer qualities. Depending on customer needs, bending, shaping, precision
cutting, forming, annealing (heating to restore flexibility), coiling or other
operations may be required to finish the product.

Virtually all of our tube products are seamless as opposed to welded tube, with
the exception of the tube manufactured at our Jackson, Tennessee location.
Welded tube is made from a flat strip that is rolled and welded together at the
edges.

Raw Materials, Suppliers and Pricing

Our principal raw materials are copper, nickel, zinc, tin and silver. In 2002,
we purchased approximately 327 million pounds of metal, approximately 90% of
which was copper. We contract for our copper requirements with a variety of
sources, including producers, merchants, brokers, dealers and industrial
suppliers. Our raw materials are available from a variety of sources, and we
do not believe that the loss of any one source would materially affect our
business, operating results or financial condition.

6

---



---



##### Table of Contents



The key elements of our copper procurement and product pricing strategies are
the assurance of a stable supply and the avoidance of exposure to metal price
fluctuations. The price of copper we purchase is based on fluctuating market
prices, usually with the Commodities Exchange (COMEX) price as a benchmark. We
generally have an open pricing option under which we may set the price of
all or a portion of the metal subject to a purchase contract at any time up to
the last COMEX trading day (usually two days before the end of the month) of
the last month in the contract period.

In the majority of cases, the price of our products to our customers contains
two components: (i) a metal charge based on the market value of the metal
content on the date of shipment of the product to the customer; and (ii) a
fixed fabrication charge. In other cases, we quote a firm price to the
customer, which covers both the metal price and the fabrication charge. In
either case, we minimize our exposure to metal price fluctuations through
various strategies. Generally, at the time the metal price for the customer is
established, we either price an equivalent amount of metal under our open
pricing arrangements with our suppliers or purchase a copper forward contract
for the equivalent amount of metal. It is not our policy to attempt to profit
from fluctuations in copper prices by taking commodity risks or speculative
commodity positions.

Research and Development

Our research and development efforts are primarily conducted in our Technology
Center located in Decatur, Alabama and are devoted to new product development,
manufacturing process improvements, new manufacturing process developments and
new applications. While developing new products for general use, we work very
closely with certain major customers to develop specific new products for their
applications. To compliment our research and development capabilities, we
engage with universities as well as governmental and private research
organizations. Through our Technology Center we support the engineering and
testing of specialized products and enhancements of our custom-engineered
processes through which we tailor products to the specifications of each
customer.

In 2002, we announced the introduction of the new, innovative Micro-Deformation
Technology MDT. This technology was used in developing highly enhanced new
heat transfer products for large chiller manufacturers. Additionally, this
technology may enable us to develop products for non-tube applications
including electronic cooling, filtration, catalyst and others. We have
continued our participation in several industrial, university and governmental
research projects relating to more efficient heat transfer tubes for
industrial, commercial and residential heating and cooling applications as well
as refrigeration, power generation, chemical and petrochemical industries. Our
research and development expense was $3.1 million in 2002, $3.7 million in 2001
and $3.7 million in 2000 and it is anticipated that a similar level of
expenditure will be maintained in 2003. In addition to our Technology Center,
we utilize our manufacturing facilities and technical personnel to assist in
manufacturing process improvements as well as new product development as it
relates to those manufacturing facilities.

Environmental Matters

Our facilities and operations are subject to extensive environmental
regulations imposed by federal, state, provincial and local authorities in the
United States, Canada, China and Portugal with respect to emissions to air,
discharges to waterways, and the generation, handling, storage, transportation,
treatment and disposal of waste materials. In addition, we have incurred, and
in

7

---



---



##### Table of Contents



the future may incur, liability under environmental statutes and regulations
with respect to the contamination of sites we own or operate (including
contamination caused by prior owners and operators of such sites, abutters or
other persons) and the off-site disposal of hazardous substances.

We believe our operations are in substantial compliance with the terms of all
applicable environmental laws and regulations as currently interpreted. We
utilize an active environmental auditing and evaluation process to facilitate
compliance with applicable environmental laws and regulations. However, we
expect that future regulations and changes in the text or interpretation of
existing regulations may subject our operations to increasingly stringent
standards. While the precise effect of these changes on our business cannot be
estimated, compliance with such requirements may make it necessary, at costs
which may be substantial, to retrofit existing facilities with additional
pollution-control equipment and to undertake new measures in connection with
the storage, transportation, treatment and disposal of by-products and wastes.

We had a reserve of approximately $1.5 million for environmental remediation
costs at December 31, 2002. The total cost of environmental assessment and
remediation depends on a variety of regulatory, technical and factual issues,
some of which cannot be anticipated. While we believe that the reserve, under
existing laws and regulations, is adequate to cover presently identified
environmental remediation liabilities, there can be no assurance that such
amount will be adequate to cover the ultimate costs of these liabilities, or
the costs of environmental remediation liabilities that may be identified in
the future.

Employees

As of December 31, 2002, we had a total of 3,199 employees. Our employees are
not represented by a union except for a majority of the hourly employees at our
Montreal, Quebec plant, representing approximately 10% of our total employees,
which is unionized and covered by a collective bargaining agreement that
expires on March 22, 2005. In February 2003, we received a petition by the
Arkansas Regional Council of Carpenters/United Brotherhood of Carpenters and
Joiners of America requesting certification of representation of 45 employees
comprising generally the engineering department of our Shawnee, Oklahoma
facility. We objected to the bargaining unit size and received a ruling from
the National Labor Relations Board on March 20, 2003 increasing the unit size
to 56 employees. At this time, we are appealing this ruling. Otherwise, an
election vote by the employees in this bargaining unit is probable within 45
days from March 20, 2003. In accordance with the above comments and, as a
whole, we believe our relations with our employees are satisfactory.

Patents and Trademarks

We own a number of trademarks and patents (in the United States and other
jurisdictions) on our products and related manufacturing processes, and we have
granted licenses with respect to some of our trademarks and patents. While we
believe that our patents and trademarks have competitive value, we do not
consider our success as a whole to be primarily dependent on our patents,
patent rights or trademarks.

8

---



---



##### Table of Contents



Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain of the statements and subject areas contained herein in Business and
Managements Discussion and Analysis of Financial Condition and Results of
Operations are made pursuant to the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward looking statements include
statements regarding our goals, beliefs, plans or current expectations, taking
into account the information currently available to our management.
Forward-looking statements include all statements that do not relate solely to
current or historical fact. For example, when we use such words as
anticipate, intend, expect, believe, plan, may, should, would
or other words that convey uncertainty of future events or outcome, we are
making forward looking statements. All statements which address operating
performance, events or developments that we expect or anticipate will occur in
the future, including statements relating to operating performance,
restructuring strategies, property, plant and equipment expenditures and
sources and uses of cash, are forward-looking statements. These
forward-looking statements are subject to various risks and uncertainties that
could cause actual results to differ materially from those stated or implied by
such forward-looking statements. We undertake no obligation to publicly
release any revision of any forward-looking statements contained herein to
reflect events or circumstances occurring after the date hereof or to reflect
the occurrence of unanticipated events.

With respect to expectations of future earnings, operating performance,
restructuring strategies, property, plant and equipment expenditures and
sources and uses of cash, factors that could affect actual results include,
without limitation:



| |  | our ability to dispose of our properties held for sale and realize their carrying values;                                                    
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | our ability to achieve growth rates and profit projections assumed in the valuation of our goodwill;                                         
| 
| |  | the impact of interest rates on the valuations of our pension liabilities and goodwill;                                                      
| 
| |  | cyclicality, seasonality and weather conditions, which affect the sales of our products;                                                     
| 
| |  | the impact of competitive factors in our industry, including the effect of pricing, product lines and other actions taken
by our competitors;
| 
| |  | our ability to maintain our relationships with our major customers;                                                                          
| 
| |  | a reduction in demand for our products;                                                                                                      
| 
| |  | our significant amount of debt and the restrictive covenants contained in our debt agreements;                                               
| 
| |  | our ability to service our debt and incur additional debt;                                                                                   
| 
| |  | our potential exposure to environmental liabilities;                                                                                         

9

---



---



##### Table of Contents





| |  | economic, political and currency risks relating to our international operations;                     
|- |  | -----------------------------------------------------------------------------------------------------
| 
| |  | our ability and the ability of our customers to maintain satisfactory relations with union employees;
| 
| |  | business risks that may arise if we undertake strategic acquisitions in the future;                  
| 
| |  | extraordinary fluctuations in the markets for raw materials;                                         
| 
| |  | risks to our competitive position from changing technology or the loss of our intellectual property; 
| 
| |  | business and economic risks relating to government regulations that impact our industry;             
| 
| |  | the mix of our geographic and product revenues;                                                      

and various other factors, many of which are beyond our ability to control or
predict.

Executive Officers of the Registrant

The following table sets forth certain information with respect to each of our
executive officers:

|                       |  |     |    |                            |  |                                                                          
|---------------------- |  | --- | -- | -------------------------- |  | -------------------------------------------------------------------------
|Name                   |  | Age |    | Positions with the Company
|                       |  |     |    |                           
|Dennis J. Horowitz     |  |     | 56 |                            |  | Chairman, President, Chief Executive Officer and Director                
|James E. Deason        |  |     | 55 |                            |  | Executive Vice President, Chief Financial Officer, Secretary and Director
|Keith I. Weil          |  |     | 45 |                            |  | Senior Vice President, Tubing Products                                   
|Johann R. Manning, Jr. |  |     | 42 |                            |  | Senior Vice President, Fabricated Products and General Counsel           
|Massoud Neshan         |  |     | 49 |                            |  | Senior Vice President, Technology                                        
|Garry K. Johnson       |  |     | 47 |                            |  | Senior Vice President, Sales                                             
|Thomas A. Morton       |  |     | 49 |                            |  | Vice President of Purchasing and Logistics                               
|Samuel A. Patterson    |  |     | 36 |                            |  | Corporate Controller                                                     
|Allen E. Dillard       |  |     | 43 |                            |  | Treasurer and Director of Corporate Communications                       

Dennis J. Horowitz has been the President and Chief Executive Officer and a
director of our company since March 1998, and in January of 2001 he also became
Chairman of the Board of Directors. Prior to joining our company, Mr. Horowitz
served as Corporate Vice President and President of the Americas of AMP
Incorporated, a high technology electric connector and

10

---



---



##### Table of Contents



interconnection systems company, since September 1994. Mr. Horowitz also
serves as a director of Aerovox Incorporated and Superconductor Technologies,
Inc.

James E. Deason has been a director of our company since October 1995. Mr.
Deason has been the Executive Vice President, Chief Financial Officer and
Secretary of our company since September 1994. Prior to joining our company,
Mr. Deason, a Certified Public Accountant, spent 19 years with Ernst & Young
LLP and was a partner from 1988 until he joined our company.

Keith I. Weil has been the Senior Vice President, Tubing Products, of our
company since December 1998. Prior to joining our company, Mr. Weil had been a
Global Business Executive and General Manager Consumer/Commercial for AMP
Incorporated since 1996. Prior to 1996, Mr. Weil was employed by Philips
Electronics NV for fourteen years in positions that included President of
Graner Company (a division of Philips), General Manager of Philips Circuit
Assemblies and Vice President of Marketing for Philips Broadband.

Johann R. Manning, Jr. has been the Senior Vice President, Fabricated Products
and General Counsel of our company since October 2001. He previously held the
position of Senior Vice President of Human Resources and General Counsel from
May 2000 until September 2001 and Vice President of Human Resources and General
Counsel from May 1998 until April 2000. Prior to joining our company, Mr.
Manning had served as Senior Counsel for Mercedes-Benz U.S. International,
Inc., a vehicle manufacturer, since March 1998. Prior to joining
Mercedes-Benz, Mr. Manning was employed for over eight years with Genuine Parts
Company, a diversified wholesale distribution company, where he held various
positions including Vice President of Human Resources and Corporate Counsel for
its Motion Industries, Inc. subsidiary.

Massoud Neshan has been the Senior Vice President, Technology of our company
since August 1999. Prior to joining our company, Mr. Neshan had served as Vice
President of Engineering and Research and Development for Hill Phoenix, a
subsidiary of The Dover Corporation, since March 1996. Prior to joining Hill
Phoenix, Mr. Neshan was employed for six years with Nax Corporation where he
held the position of Executive Vice President. Mr. Neshan has spent his entire
career in the heating, ventilation, air conditioning/refrigeration industry.

Garry K. Johnson has been the Senior Vice President, Sales of our company since
2002. He previously held the positions of Vice President, Sales from 1998
until 2002, Industrial Marketing Manager from 1990 until 1998, Field Sales
Representative from 1981 until 1990 and Production Supervisor from 1979 until
1981. Mr. Johnson has been employed by our company for twenty-four years.

Thomas A. Morton has been the Vice President of Purchasing and Logistics since
February 1999. He previously held the positions for our Canadian operations of
Metal Manager from January 1996 until January 1999 and Corporate Controller
from May 1989 to December 1996. Prior to joining our company, Mr. Morton, a
Certified Public Accountant, was employed for ten years with Ernst & Young in
Canada.

Samuel A. Patterson has been the Corporate Controller of our company since
September 2000. He previously held the position of Director of Corporate
Accounting from August 1999 until August 2000 and Corporate Accounting Manager
from January 1998 until July 1999. Prior to joining our company, Mr.
Patterson, a Certified Public Accountant, had served as Accounting

11

---



---



##### Table of Contents



Manager and Division Controller for United Chair Company, a subsidiary of
Haworth, Inc., since May 1997.

Allen E. Dillard has been the Treasurer and Director of Corporate
Communications of our company since April 2002. Prior to joining our company,
Mr. Dillard, a Certified Public Accountant, had served as a consultant to our
company from January 2002 to March 2002. Prior to that time, Mr. Dillard was
employed from March 2000 to December 2001 with Phyve Corporation where he held
the position of Executive Vice President and Chief Financial Officer. From
March 1994 to February 2000, Mr. Dillard was employed with Nichols Research
Corporation, where he held the positions of Corporate Vice President, Treasurer
and Chief Financial Officer.

12

---



---



##### Table of Contents






|       |  |            |  | 
|------ |  | ---------- |  | 
|ITEM 2 |  | PROPERTIES |  | 

United States Facilities

We own and operate each of the U.S. facilities described below, with the
exception of our Altoona, Pennsylvania facility that is partially owned and
partially leased from a local industrial development agency for $3,500 per year
in perpetuity:

|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|-------------- |  | -------- | --- | ------------- |  | ------ | ------- | ------------- |  | ----------- | ---- |  |  |  | --- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  | Property |     |               |  |        |         |               |  | Number of   |      | 
|               |  | Size     |     | Plant Size    |  | Year   |         | Employees at  |  |            
|Location       |  | (acres)  |     | (square feet) |  | Opened |         | Dec. 31, 2002 |  | Description
|               |  |          |     |               |  |        |         |               |  |            
|Decatur, AL    |  |          | 166 |               |  |        | 620,000 |               |  |             | 1948 |  |  |  | 850 |  |  | Produces a majority
of our copper tube
product lines. A
significant portion
of production is
industrial and
technical tube.
Produces smooth
feedstock tube for
the Ardmore,
Altoona and
Booneville
facilities. Also
houses a portion of
our corporate
staff.
|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|Shawnee, OK    |  |          | 51  |               |  |        | 309,000 |               |  |             | 1974 |  |  |  | 465 |  |  | Produces a majority
of our copper tube
product lines.
Capable of
producing feedstock
tube for the
Ardmore and
Carrollton
facilities.                                                                                                                        
|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|Jackson, TN    |  |          | 35  |               |  |        | 240,000 |               |  |             | 1998 |  |  |  | 64  |  |  | Produces welded
copper enhanced
surface tube. Also
houses a U.S.
wholesale product
distribution
center.                                                                                                                                                     
|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|Altoona, PA    |  |          | 32  |               |  |        | 210,000 |               |  |             | 1956 |  |  |  | 282 |  |  | A redraw facility
that produces
higher value added
commercial products
and specialty
fabricated
components.                                                                                                                                                 
|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|Carrollton, TX |  |          | 9   |               |  |        | 165,000 |               |  |             | 1999 |  |  |  | 295 |  |  | A fabrication
facility that
produces
higher-margin
commercial products
such as specialty
fabricated parts,
return bends and
manifolds.                                                                                                                      
|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|Booneville, MS |  |          | 30  |               |  |        | 152,000 |               |  |             | 1989 |  |  |  | 143 |  |  | Processes feedstock
tube from the
Decatur facility
into enhanced
surface industrial
tube and technical
copper tube.
Produces feedstock
for the Carrollton
facility.                                                                                         
|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|Warwick, RI    |  |          | 3   |               |  |        | 70,000  |               |  |             | 1978 |  |  |  | 145 |  |  | Produces brazing
filler metals,
fluxes and other
specialty alloys.                                                                                                                                                                                          
|               |  |          |     |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                                                                                                             
|Ardmore, TN    |  |          | 6   |               |  |        | 65,000  |               |  |             | 1974 |  |  |  | 81  |  |  | A redraw facility
that produces
higher margin
commercial products
such as capillary
tube and specialty
fabricated
components, as well
as aluminum tubing.                                                                                                   

13

---



---



##### Table of Contents



In addition to the manufacturing facilities described above, we also have a
232,000 square foot facility in Roxboro, North Carolina that is not being used
for production and is currently held for sale. Our corporate offices, with 32
employees at December 31, 2002, are comprised of approximately 15,000 square
feet in a leased facility in Huntsville, Alabama.

Canadian Facilities

We own and operate the following Canadian manufacturing facilities:

|                 |  |              |    |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                       
|---------------- |  | ------------ | -- | ------------- |  | ------ | ------- | ------------- |  | ----------- | ---- |  |  |  | --- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |  |              |    |               |  |        |         |               |  | Number of   |      | 
|                 |  | Property     |    | Plant Size    |  | Year   |         | Employees at  |  |            
|Location         |  | Size (acres) |    | (square feet) |  | Opened |         | Dec. 31, 2002 |  | Description
|                 |  |              |    |               |  |        |         |               |  |            
|Montreal, Quebec |  |              | 25 |               |  |        | 424,000 |               |  |             | 1942 |  |  |  | 377 |  |  | Produces plumbing
tube and
refrigeration
service tube,
copper and copper
alloy tube and
copper and copper
alloy rod and bar,
wire and extruded
shapes.
|                 |  |              |    |               |  |        |         |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                       
|London, Ontario  |  |              | 45 |               |  |        | 195,000 |               |  |             | 1958 |  |  |  | 292 |  |  | Produces plumbing
tube, refrigeration
service tube and
industrial tube.
Also houses
corporate offices
for Wolverine Tube
(Canada) Inc.                

We lease a 45,000 square foot warehouse in London, Ontario. Additionally, we
have a 150,000 square foot facility in Fergus, Ontario whose operations are
discontinued and that is currently held for sale.

Other Facilities

We own a 33,000 square foot technical tube facility in Esposende, Portugal.
Our Shanghai, China facility is leased from the Shanghai Waigaoqiao Free Trade
Zone 3-U Development Co., Ltd. for a twelve-year term. The following table
describes our facilities in China and Portugal:

|                    |  |              |   |               |  |        |        |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                       
|------------------- |  | ------------ | - | ------------- |  | ------ | ------ | ------------- |  | ----------- | ---- |  |  |  | --- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |  |              |   |               |  |        |        |               |  | Number of   |      | 
|                    |  | Property     |   | Plant Size    |  | Year   |        | Employees at  |  |            
|Location            |  | Size (acres) |   | (square feet) |  | Opened |        | Dec. 31, 2002 |  | Description
|                    |  |              |   |               |  |        |        |               |  |            
|Shanghai, China     |  |              | 3 |               |  |        | 60,000 |               |  |             | 1998 |  |  |  | 107 |  |  | Produces technical
copper tube from
feedstock supplied
by local copper
tube manufacturers
and brazed
assemblies from
components supplied
from the Carrollton
facility.
|                    |  |              |   |               |  |        |        |               |  |             |      |  |  |  |     |  |  |                                                                                                                                                                       
|Esposende, Portugal |  |              | 3 |               |  |        | 33,000 |               |  |             | 2001 |  |  |  | 56  |  |  | Produces technical
copper tube from
feedstock supplied
by the Decatur
facility and local
copper tube
manufacturers.                                                   

We also lease a facility in Apeldoorn, The Netherlands, comprised of a 16,000
square foot warehouse and 3,000 square feet of office space. There were ten
employees at the Apeldoorn facility at December 31, 2002.

14

---



---



##### Table of Contents






|       |  |                   |  | 
|------ |  | ----------------- |  | 
|ITEM 3 |  | LEGAL PROCEEDINGS |  | 

Our facilities and operations are subject to extensive environmental laws and
regulations, and we are currently involved in various proceedings relating to
environmental matters as described under Managements Discussion and Analysis
of Financial Condition and Results of Operations  Environmental. We are not
involved in any legal proceeding that we believe could have a material adverse
effect upon our business, operating results or financial condition.

In 2001, we became aware of three competition-related investigations involving
the copper fittings industry and the copper tube industry. The European
Commission initiated an investigation of producers of copper fittings and tubes
in the European Union, contending that certain companies participated in mutual
agreements and/or common procedures. In addition, the Commission of
Competition for Canada issued a court order for the production of records to a
number of producers and distributors of copper fittings. We have not been
contacted in respect of, or otherwise received any information that would
indicate that we are involved in, either of these investigations.

In the United States, a Grand Jury in the Northern District of Indiana has
undertaken an investigation into possible violations of U.S. antitrust laws in
the copper fittings industry and the copper tube industry. In March 2001, we
received a subpoena for documents in connection with this investigation. In
the first quarter of 2002, we completed production of documents we believed to
be responsive to this subpoena. We understand this to be an industry-wide
investigation and that most U.S. manufacturers of copper fittings and most of
our competition in the copper tube industry in the United States have also
received subpoenas relating to this investigation.

To our knowledge, no allegations or claims have been made against us and we are
neither a target nor the subject of any investigation relating to these
matters. With respect to any matters relating to the copper fittings industry,
we do not participate in that industry. We believe that our operations,
policies and practices are in compliance with the requirements of the U.S.
antitrust laws and competition laws in other jurisdictions where we do
business. However, we are unable to predict the scope or outcome of the
investigations or the extent, if any, to which our business, financial
condition or operations may be affected by these matters.

15

---



---



##### Table of Contents






|       |  |                                                    |  | 
|------ |  | -------------------------------------------------- |  | 
|ITEM 4 |  | SUBMISSION OF MATTERS TO A VOTEOF SECURITY HOLDERS |  | 

No matters were submitted to a vote of security holders by the Company during
the final quarter of the fiscal year covered by this report.

16

---



---



##### Table of Contents






PART II




|       |  |                                                                      |  | 
|------ |  | -------------------------------------------------------------------- |  | 
|ITEM 5 |  | MARKET FOR REGISTRANTS COMMON EQUITYAND RELATED STOCKHOLDER MATTERS |  | 

Our Common Stock is traded on the New York Stock Exchange under the symbol
WLV. As of March 7, 2003, there were 12,262,439 shares of common stock
outstanding, held by 290 shareholders of record.

The following table sets forth, for the periods indicated, the range of high
and low reported sale prices for our Common Stock on the New York Stock
Exchange:

|               |  |      |       |      |  |      |      |     |  |   |       |  |  |   |       | 
|-------------- |  | ---- | ----- | ---- |  | ---- | ---- | --- |  | - | ----- |  |  | - | ----- | 
|               |  | 2002 |       | 2001
|               |  |      |       |     
|Period         |  | High |       | Low  |  | High |      | Low
|               |  |      |       |      |  |      |      |    
|First Quarter  |  | $    | 12.15 |      |  | $    | 6.20 |     |  | $ | 14.35 |  |  | $ | 10.80 | 
|Second Quarter |  |      | 9.61  |      |  |      | 7.20 |     |  |   | 17.65 |  |  |   | 12.25 | 
|Third Quarter  |  |      | 7.60  |      |  |      | 5.30 |     |  |   | 17.65 |  |  |   | 9.84  | 
|Fourth Quarter |  |      | 6.15  |      |  |      | 4.90 |     |  |   | 13.50 |  |  |   | 9.86  | 

We did not declare or pay cash dividends on our Common Stock during the years
ended December 31, 2002, 2001 or 2000. We do not currently plan to pay cash
dividends on our Common Stock. In the foreseeable future, any future
determination to pay cash dividends will depend on our results of operations,
financial condition, contractual restrictions and other factors deemed relevant
by the Board of Directors. We intend to retain earnings to support the growth
of our business. In addition, our credit agreement and note indentures permit
us to pay dividends on the Common Stock only if certain financial and other
tests are met.

17

---



---



##### Table of Contents






|       |  |                         |  | 
|------ |  | ----------------------- |  | 
|ITEM 6 |  | SELECTED FINANCIAL DATA |  | 

The historical consolidated financial data presented below should be read in
conjunction with the information set forth under Item 7  Managements
Discussion and Analysis of Financial Condition and Results of Operations and
the Consolidated Financial Statements of our company beginning on page F-1.

The balance sheet data presented below as of December 31, 2002 and 2001 and the
income statement data presented below for each of the years in the three-year
period ended December 31, 2002, are derived from the audited Consolidated
Financial Statements of our company beginning on page F-1. The other balance
sheet and income statement data presented below are derived from audited
Consolidated Financial Statements of our company, which are not presented
herein.

|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |       | 
|--------------------------------------------------------------------- | ------------------------------ | ---- | ----------------------- | ------ | - | ---- | -------- | ------ | - | ---- | ------- | ------ |  | - | ------- | ------ |  | - | ------- | ----- | 
|                                                                      |                                |      | Year Ended December 31,
|                                                                      |                                |      |                        
|Statement of Operations Data:                                         |                                | 2002 |                         | 2001   |   | 2000 |          | 1999   |   | 1998
|                                                                      |                                |      |                         |        |   |      |          |        |   |     
|(In thousands, except per share amounts)                              |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Net sales                                                             |                                | $    | 550,523                 |        |   | $    | 583,114  |        |   | $    | 621,464 |        |  | $ | 586,202 |        |  | $ | 579,234 |      
|Cost of goods sold (a)                                                |                                |      | 492,082                 |        |   |      | 520,874  |        |   |      | 536,351 |        |  |   | 522,589 |        |  |   | 508,222 |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Gross profit                                                          |                                |      | 58,441                  |        |   |      | 62,240   |        |   |      | 85,113  |        |  |   | 63,613  |        |  |   | 71,012  |      
|Selling, general and administrative expenses                          |                                |      | 30,616                  |        |   |      | 32,254   |        |   |      | 31,961  |        |  |   | 30,314  |        |  |   | 25,453  |      
|Restructuring and other charges (b)                                   |                                |      |                        |        |   |      | 1,546    |        |   |      |        |        |  |   | 19,938  |        |  |   | 11,867  |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Operating income from continuing operations                           |                                |      | 27,825                  |        |   |      | 28,440   |        |   |      | 53,152  |        |  |   | 13,361  |        |  |   | 33,692  |      
|Other (income) expenses:                                              |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|                                                                      | Interest expense, net          |      |                         | 19,681 |   |      |          | 13,100 |   |      |         | 12,168 |  |   |         | 12,237 |  |   |         | 6,566 | 
|                                                                      | Gain on extinguishment of debt |      |                         | (1,349 | ) |      |          |       |   |      |         |       |  |   |         |       |  |   |         |      | 
|                                                                      | Amortization and other, net    |      |                         | 1,008  |   |      |          | (447   | ) |      |         | 417    |  |   |         | 1,705  |  |   |         | 838   | 
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Income (loss) from continuing operations before income taxes          |                                |      | 8,485                   |        |   |      | 15,787   |        |   |      | 40,567  |        |  |   | (581    | )      |  |   | 26,288  |      
|Income tax provision (benefit)                                        |                                |      | 1,315                   |        |   |      | 4,345    |        |   |      | 14,660  |        |  |   | (988    | )      |  |   | 9,092   |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Income from continuing operations (c)                                 |                                |      | 7,170                   |        |   |      | 11,442   |        |   |      | 25,907  |        |  |   | 407     |        |  |   | 17,196  |      
|Income (loss) from discontinued operations, net of tax (d)            |                                |      | (1,610                  | )      |   |      | (31,240  | )      |   |      | 782     |        |  |   | 1,362   |        |  |   | 1,314   |      
|Cumulative effect of accounting change, net of income tax benefit (e) |                                |      |                        |        |   |      |         |        |   |      |        |        |  |   | (5,754  | )      |  |   |        |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Net income (loss) (f)                                                 |                                | $    | 5,560                   |        |   |      | ($19,798 | )      |   | $    | 26,689  |        |  |   | ($3,985 | )      |  | $ | 18,510  |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Net income (loss) applicable to common shares (g)                     |                                | $    | 5,502                   |        |   |      | ($20,078 | )      |   | $    | 26,409  |        |  |   | ($4,265 | )      |  | $ | 18,230  |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Earnings per common share-basic:                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Income from continuing operations                                     |                                | $    | 0.58                    |        |   | $    | 0.92     |        |   | $    | 2.11    |        |  | $ | 0.01    |        |  | $ | 1.21    |      
|Income (loss) from discontinued operations, net of tax                |                                |      | (0.13                   | )      |   |      | (2.58    | )      |   |      | 0.06    |        |  |   | 0.10    |        |  |   | 0.09    |      
|Cumulative effect of accounting change                                |                                |      |                        |        |   |      |         |        |   |      |        |        |  |   | (0.44   | )      |  |   |        |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Net income (loss) per share                                           |                                | $    | 0.45                    |        |   |      | ($1.66   | )      |   | $    | 2.17    |        |  |   | ($0.33  | )      |  | $ | 1.30    |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Basic weighted average common shares                                  |                                |      | 12,231                  |        |   |      | 12,077   |        |   |      | 12,153  |        |  |   | 13,106  |        |  |   | 14,025  |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Earnings per common share-diluted:                                    |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Income from continuing operations                                     |                                | $    | 0.58                    |        |   | $    | 0.91     |        |   | $    | 2.08    |        |  | $ | 0.01    |        |  | $ | 1.19    |      
|Income (loss) from discontinued operations, net of tax                |                                |      | (0.13                   | )      |   |      | (2.54    | )      |   |      | 0.06    |        |  |   | 0.10    |        |  |   | 0.09    |      
|Cumulative effect of accounting change                                |                                |      |                        |        |   |      |         |        |   |      |        |        |  |   | (0.43   | )      |  |   |        |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Net income (loss) per share                                           |                                | $    | 0.45                    |        |   |      | ($1.63   | )      |   | $    | 2.14    |        |  |   | ($0.32  | )      |  | $ | 1.28    |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      
|Diluted weighted average common and common equivalent shares          |                                |      | 12,362                  |        |   |      | 12,307   |        |   |      | 12,344  |        |  |   | 13,243  |        |  |   | 14,186  |      
|                                                                      |                                |      |                         |        |   |      |          |        |   |      |         |        |  |   |         |        |  |   |         |      

|                                            |  |                         |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                            |  | Year Ended December 31,
|                                            |  |                        
|Other Data:                                 |  | 2002                    |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                                            |  |                         |         |      |  |      |         |      |  |     
|(In thousands, except per pound amounts)    |  |                         |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Pounds shipped                              |  |                         | 310,240 |      |  |      | 308,177 |      |  |      | 334,846 |  |  |   | 338,559 |  |  |   | 326,569 | 
|Depreciation and amortization               |  |                         | 18,416  |      |  | $    | 18,679  |      |  | $    | 17,040  |  |  | $ | 15,773  |  |  | $ | 16,665  | 
|Capital expenditures                        |  |                         | 7,747   |      |  |      | 27,612  |      |  |      | 31,676  |  |  |   | 23,092  |  |  |   | 34,293  | 
|Average COMEX price of copper per pound (h) |  |                         | 0.72    |      |  |      | 0.73    |      |  |      | 0.84    |  |  |   | 0.72    |  |  |   | 0.75    | 
|                                            |  |                         |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 

18

---



---



##### Table of Contents



|                                      |  |              |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|------------------------------------- |  | ------------ | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                      |  | December 31,
|                                      |  |             
|Balance Sheet Data:                   |  | 2002         |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                                      |  |              |         |      |  |      |         |      |  |     
|(In thousands)                        |  |              |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Total assets                          |  | $            | 550,720 |      |  | $    | 539,427 |      |  | $    | 584,937 |  |  | $ | 499,550 |  |  | $ | 541,510 | 
|Total long-term debt                  |  |              | 255,712 |      |  |      | 247,698 |      |  |      | 231,163 |  |  |   | 180,197 |  |  |   | 217,871 | 
|Redeemable cumulative preferred stock |  |              |        |      |  |      | 2,000   |      |  |      | 2,000   |  |  |   | 2,000   |  |  |   | 2,000   | 
|Stockholders equity                  |  | $            | 200,635 |      |  | $    | 201,412 |      |  | $    | 228,449 |  |  | $ | 212,499 |  |  | $ | 226,512 | 
|                                      |  |              |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 



---

|(a) |  | During 2001, 1999 and 1998, we incurred unusual charges that are included
in cost of goods sold of approximately $1.4 million, $5.4 million and $2.1
million, respectively. The 2001 charge of $1.4 million was related to
realized and anticipated reductions in demand for our product and was for
the write-down of slow moving or obsolete inventory. The 1999 charge was
$5.4 million and included $3.7 million related to obsolete inventory, $0.8
million net book value of idled and obsolete machinery and equipment and
$0.9 million of other charges related to the realignment of our
manufacturing operations. The 1998 charge included $0.5 million of
obsolete inventory and $0.9 million of other costs associated with the
closing of our Greenville, Mississippi facility and $0.7 million of costs
associated with the discontinuation of casting at our Roxboro, North
Carolina facility.                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | We recognized restructuring and other charges of approximately $1.5
million ($1.0 million after tax) in 2001. See Note 21 of the Notes to
Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | During 1999, we recognized restructuring and other charges of
approximately $19.9 million ($12.5 million after tax). This charge
included $10.0 million in expenses relating to the announced closing of
our Roxboro, North Carolina facility, of which $8.6 million in expenses
related to the write-down of impaired assets; $2.8 million in expenses
related to the implementation of an indirect workforce reduction program;
$3.6 million in expenses related to impaired assets as a result of
relocating the Roxboro machinery and equipment to our other facilities
and thereby displacing existing equipment; $1.9 million in expenses
related to previously closed facilities, of which $1.8 million related to
the write-down of impaired assets; $0.8 million in expenses related to
the termination of an interest rate swap; and $0.8 million in
professional fees and other costs primarily associated with acquisitions
that were not completed.
|   
|    |  | During 1998, we recorded restructuring and other charges of approximately
$11.9 million ($7.5 million after tax). This charge included $7.4
million in expenses related to the closing of our Greenville, Mississippi
facility, of which $5.6 million in expenses related to the write-down of
impaired assets resulting primarily from the closing of this facility;
$2.3 million in expenses for the write-down of impaired assets related to
the discontinuation of casting at our North Carolina facility; $0.4
million of other costs related to the discontinuation of the casting
process at the North Carolina facility; $0.9 million in expenses related
to the implementation of a salaried workforce reduction program; and $0.9
million in professional fees and other costs primarily associated with an
acquisition that was not completed.                                                                                                       
|   
|(c) |  | Income from continuing operations for 2001, 2000, 1999 and 1998, adjusted
to exclude amortization of expense recognized related to goodwill would
have been $14.1 million, $28.2 million, $2.6 million and $18.7 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(d) |  | We have classified the operating results of Wolverine Ratcliffs, Inc.,
equal to ($1.6) million, ($7.3) million, $0.8 million, $1.4 million and
$1.3 million (in each case net of tax) for the years ended 2002, 2001,
2000, 1999 and 1998, respectively, as discontinued operations and, in
addition, we recorded an estimated $23.9 million (net of tax) loss on the
disposal of the Wolverine Ratcliffs operations in 2001. See Note 2 of the
Notes to Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(e) |  | Effective January 1, 1999, we adopted Statement of Position 98-5,
Reporting on the Costs of Start-Up Activities, or SOP 98-5, which
requires that costs related to start-up activities be expensed as
incurred. The cumulative effect of adopting SOP 98-5 as of the beginning
of 1999 was a charge of $5.8 million, net of tax.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(f) |  | Net income (loss) for 2001, 2000, 1999 and 1998 adjusted to exclude
amortization expense related to goodwill would have been $(16.9) million,
$29.2 million, $(1.7) million and $20.0 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(g) |  | Reflects the payment of preferred stock dividends and accretion of
preferred stock redemption requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(h) |  | Source: Metals Week.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

19

---



---



##### Table of Contents






|       |  |                                                                                      |  | 
|------ |  | ------------------------------------------------------------------------------------ |  | 
|ITEM 7 |  | MANAGEMENTS DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 

The following is a discussion of our results of operations and financial
condition. This discussion should be read in conjunction with our Consolidated
Financial Statements and notes thereto.

General

The following general factors should be considered in analyzing our results of
operations:

Critical Accounting Policies and Estimates

We base this discussion and analysis of results of operations, cash flow and
financial condition on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. When we prepare these financial statements, we make estimates
and judgments that affect the amounts of assets, liabilities, revenues and
expenses and related disclosure of contingent assets and liabilities that we
report. On an on-going basis, we evaluate our estimates, including but not
limited to those affecting allowances for doubtful accounts, inventories,
intangible assets, long-lived assets, income taxes, restructuring reserves,
medical, dental and workers compensation benefits, pensions and other
post-retirement benefits, environmental and other contingencies and litigation.
We consider market conditions, customers demand for our products, historical
trends and various other factors when we make judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ materially from these estimates when
different assumptions or conditions are considered. We believe the accounting
policies critical to the presentation and understanding of our financial
condition and results of operations and involving the more significant
judgments and estimates relate to inventory, long-lived assets, income taxes
and retirement and pension plans.

Inventory

We state our raw materials, work-in-process and finished goods inventories at
the lower of first-in, first-out cost or market. In assessing the ultimate
realization of inventories, we are required to make judgments as to future
demand requirements and compare these with our current inventory levels. We
reduce the inventory that we report on our financial statements for estimated
obsolescence or unmarketable inventory as our projected demand requirements
decrease due to market conditions, technological and product life cycle changes
and longer than previously expected usage periods. The amount of this
reduction is equal to the cost of our inventory less the estimated market value
of our inventory. We estimate market value based on assumptions about future
demand and market conditions.

Long-lived assets

We periodically review the values assigned to long-lived assets such as
property, plant and equipment, assets held for sale and goodwill. We estimate
the depreciable lives of property, plant and equipment and review the assets
for impairment if events or changes in circumstances indicate that we may not
recover the carrying amount of an asset.

20

---



---



##### Table of Contents



Assets held for sale include the net assets of our unoccupied Roxboro, North
Carolina facility and the net property, plant and equipment of Wolverine
Ratcliffs, Inc., whose operations we decided to discontinue in 2001. These
assets have been written down to estimated fair value less estimated cost to sell. We
have estimated the carrying value for these assets based on our projections of
the net realizable value from the sale of these assets and in light of their
appraised values. Although we believe we have appropriately reduced the
carrying values of all assets held for sale to their estimated recoverable
amounts, net of disposal costs where appropriate, actual results could be
different and our results of operations in future periods could reflect gains
or losses on these assets.

On January 1, 2002, we adopted Statement of Financial Accounting Standards,
(SFAS) No. 142, Goodwill and Other Intangible Assets. Accordingly, we ceased
amortizing all previously recorded goodwill as of that date. A transitional
impairment test of all goodwill was required within six months of adopting SFAS
No. 142. We completed the transitional impairment test of goodwill (as of
January 1, 2002) required by the new rules during the second quarter of 2002.
Based on the results of these tests, the fair value of the tested business
units exceeded the carrying value of those business units and thus no
transitional impairment charge was recorded. We conducted the required annual
goodwill impairment review during the fourth quarter of 2002. Updated
valuations were computed using a discounted cash flow approach based on
forward-looking information regarding market share, revenues and costs for each
business unit. Our valuation was based on a 4% to 5% long-term growth rate, a
discount rate of 12% and two reporting units, The Tube Group and The Non-Tube
Group. The Tube Group consists of our Decatur, Shawnee, Jackson, Booneville,
Montreal, London, Shanghai and Esposende facilities for which we have $23.2
million of goodwill. The Non-Tube Group consists of our Altoona, Carrollton,
Warwick, Ardmore and Apeldoorn facilities for which we have $76.9 million of
goodwill. Based on the results of this review, the fair value of the tested
business units exceeded the carrying value of those business units and thus no
impairment charge was recorded. If we are unable to achieve our estimated
growth rates and profit projections, if interest rates increase or if our other
estimates or their related assumptions change in the future, we may be required
to record impairment charges for goodwill in the future.

Income taxes

We record the estimated future tax effects of temporary differences between the
tax bases of assets and liabilities and the amounts reported in our
consolidated balance sheets, as well as operating loss and tax credit
carryforwards. The carrying value of our net deferred tax liability reflects
our assumption that we will be able to generate sufficient future taxable
income to realize our deferred tax assets. As of December 31, 2002, we have
$5.6 million of deferred tax assets resulting from state operating loss and tax
credit carryforwards that are available to reduce taxable income in future
periods, net of a $2.4 million valuation allowance that we recorded in the
fourth quarter of 2002. Under the provisions of SFAS No. 109, we considered
the realization of these state carryforwards in light of our cumulative
operating results for the current and preceding years in determining the
valuation allowance, as well as reversing taxable temporary differences, future
taxable income and ongoing prudent and feasible tax planning strategies. If
our estimates and related assumptions regarding these factors change in the
future, we may be required to record an additional valuation allowance against
our deferred tax assets. This would result in additional income tax expense in
our consolidated statement of operations.

21

---



---



##### Table of Contents



In addition, we operate within multiple taxing jurisdictions and are subject to
audit in these jurisdictions. These audits can involve complex issues, which
may require an extended period of time to resolve. We believe adequate
provision for income taxes has been made for any potential audits.

Pension and Postretirement Benefit Costs

We have significant pension and postretirement benefit costs and credits that
are developed from actuarial valuations.Inherent in these valuations are key
assumptions including discount rates and expected long-term rates of return on
plan assets. Material changes in our pension and postretirement benefit costs
may occur in the future due to changes in these assumptions, changes in the
number of plan participants and changes in the level of benefits provided.

The discount rate is subject to change each year, consistent with changes in
applicable high-quality, long-term corporate bond indices. Based on bond
indices as of December 31, 2002, we used discount rates of 7.0% and 6.75% at
December 31, 2002 for our U.S. and Canadian based plans, respectively, compared
to 7.25% and 7.0% at December 31, 2001 for our U.S. and Canadian based plans,
respectively. This had the effect of increasing our accumulated pension
benefit obligation by approximately $4.2 million for the year ended December
31, 2002 and increasing our estimated pension expense for 2003 by $0.5 million.

The expected long-term rate of return on pension plan assets is selected by
taking into account the expected duration of the projected benefit obligation
for the plans, the asset mix of the plans and the fact that the plan assets are
actively managed to mitigate downside risk. Based on these factors, our
expected long-term rates of return are 9.0% and 7.5% at December 31, 2002 for
our U.S. and Canadian based plans, respectively, compared to 9.5% and 8.5% at
December 31, 2001 for our U.S. and Canadian based plans, respectively. This
had the effect of increasing our estimated pension expense for 2003 by $0.7
million.

Total estimated pension expense is expected to increase $3.4 million in 2003 as
compared to 2002 primarily due to the impact of the decline in fair value of
plan assets as well as to the aforementioned changes in the discount rate and
expected long-term rate of return.

On December 31, 2002, the accumulated benefit obligation related to our pension
plans exceeded the fair value of pension plan assets. This difference is
attributed to: (1) an increase in the accumulated benefit obligation that
resulted from the decrease in the interest rate used to discount the projected
benefit obligation to its present settlement amount; (2) an increase in the
accumulated benefit obligation that resulted from the decrease in the expected
long-term rate of return on pension plan assets; and (3) a decline in the fair
value of the plan assets at December 31, 2002 due to a sharp overall decline in
the equity markets. As a result, and in accordance with SFAS 87, we recognized
an additional minimum pension liability of $21.9 million, recorded a charge to
accumulated other comprehensive loss before taxes of $18.7 million and
recognized an intangible asset of $3.2 million up to the amount of unrecognized
prior service cost.

Components of Cost of Goods Sold

The cost of raw materials, principally copper, is a substantial portion of our
cost of goods sold. The rise and fall of copper prices and other metals
affects the levels of our net sales, costs of goods sold and the carrying value
of inventory, even in the absence of increases or decreases in

22

---



---



##### Table of Contents



business activity. While we have entered into commodity forward contracts to
sell copper in an effort to mitigate the impact of the rise and fall of copper
prices on the valuation of our inventory, these forward contracts are not
accounted for as effective hedges. Thus, the rise and fall of copper prices
may impact our gross margin and may have a material impact on our levels of
gross profit for a particular reporting period. However, across reporting
periods, we believe that the cost of raw materials is generally passed along to
our customers.

Variability of Wholesale Product Gross Profit

Gross profit attributable to sales of our wholesale products has fluctuated and
may continue to fluctuate substantially from period to period. Gross profit
from sales of these products was $4.4 million in 2002, $9.3 million in 2001 and
$12.6 million in 2000. Gross profit derived from the sale of wholesale
products is mainly affected by changes in selling prices. Selling prices for
these products are affected principally by general economic conditions,
especially the rate of housing starts, general commercial building activity,
industry competition and manufacturing capacity, industry production levels and
other market factors. All of these factors are beyond our control.

Impact of Product Mix

Our products range from higher value-added and higher margin commercial
products to commodity-type products such as wholesale tube products and rod and
bar products. Our overall profitability from period to period is affected by
the mix of sales within these categories. We have substantial sales in Canada,
and our product mix in that market, as compared to the U.S. market, reflects a
much higher percentage of our commodity-type products.

Cyclical and Seasonal Nature of Demand

Demand for our products, particularly our wholesale products, is cyclical and
is significantly affected by changes in general economic conditions that affect
our customers markets. Demand in some industries to which we sell, including
the residential air conditioning industry and, to a lesser extent, the
commercial air conditioning industry, is also seasonal. Our sales to the
residential air conditioning market are generally greater in the first and
second quarters of the year and lower in the third and fourth quarters because
manufacturers typically increase inventories in the early part of the year in
anticipation of summer air conditioning sales and housing starts. In addition,
sales of industrial tube are adversely affected in years with unusually cool
summers.

Discontinued Operations

During the year ended December 31, 2001, we decided to discontinue the
operations of Wolverine Ratcliffs, Inc. (WRI), which were previously included
in the rod, bar and other products segment. As of December 31, 2001, we held a
74.5% ownership interest in this business. We subsequently acquired the
remaining 25.5% interest in WRI and in July 2002, we merged WRI into Wolverine
Tube (Canada), Inc. to facilitate the liquidation of the business. Accordingly,
the operating results of WRI have been reported in discontinued operations in
the consolidated financial statements. In the fourth quarter of 2001, we
recorded a $31.5 million ($23.9 million after tax) estimated loss on the
disposal of the WRI operations, which included a $2.5 million ($1.6 million
after tax) provision for estimated losses during the expected phase-out period.
In 2002, we engaged a financial advisor to pursue opportunities to dispose of the

23

---



---



##### Table of Contents



business as a going concern but were not able to do so and thus commenced
liquidation of the business. As of June 30, 2002, all manufacturing operations
of WRI were stopped and its inventory was substantially liquidated. As of
September 29, 2002 we had liquidated substantially all of the net receivables,
and had begun the equipment liquidation process. We are continuing to pursue
opportunities to dispose of the remainder of the equipment and the building.
In the fourth quarter of 2002, we recorded a $2.5 million ($1.6 million after
tax) loss from discontinued operations for remaining estimated closing costs in
excess of the provision for losses recorded in the fourth quarter of 2001. We
have realized approximately $10 million of pretax proceeds from the realization
or sale of the assets of the business, net of our cash payments to settle the
liabilities of the discontinued operations during the twelve months ended
December 31, 2002, the majority of which is recorded in continuing operations
in that certain accounts receivable and inventories were transferred to
continuing operations. As is reflected on the Consolidated Statements of Cash
Flows, discontinued operations used $2.0 million of cash, consisting of a $1.5
million net use of cash from operations and the sale of assets and $0.5 million
of additions to property, plant and equipment. To the extent actual results
should differ from our estimates, the difference will be reported in
discontinued operations in future periods.

Operating results of the discontinued WRI operations for 2002, which were
charged to previously established reserves, 2001 and 2000 are as follows:

|                                        |  |      |        |      |  |      |         |   |  |   |        | 
|--------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------- | - |  | - | ------ | 
|                                        |  | 2002 |        | 2001 |  | 2000
|                                        |  |      |        |      |  |     
|(In thousands)                          |  |      |        |      |  |      |         |   |  |   |        | 
|Net sales                               |  | $    | 12,063 |      |  | $    | 48,886  |   |  | $ | 79,875 | 
|Income (loss) before income tax benefit |  | $    | (3,209 | )    |  | $    | (11,882 | ) |  | $ | 1,289  | 
|Income tax provision (benefit)          |  |      | (851   | )    |  |      | (4,507  | ) |  |   | 507    | 
|                                        |  |      |        |      |  |      |         |   |  |   |        | 
|Net income (loss)                       |  | $    | (2,358 | )    |  | $    | (7,375  | ) |  | $ | 782    | 
|                                        |  |      |        |      |  |      |         |   |  |   |        | 

Assets and liabilities of the discontinued WRI operations have been reflected
in the consolidated balance sheets as current or non-current based on the
original classification of these accounts, net of any necessary valuation
allowances, except that property, plant and equipment to be disposed in the
amount of $3.4 million, net of a necessary valuation allowance, have been
included in assets held for sale. Although we believe we have appropriately
reduced the carrying value of the assets to their estimated recoverable
amounts, net of disposal costs where appropriate, actual results could be
different and the difference will be reported in discontinued operations in
future periods.

24

---



---



##### Table of Contents



Net assets (liabilities) of the discontinued WRI operations are as follows:

|                                                    |  |                   |        |                   |  |   |         |  
|--------------------------------------------------- |  | ----------------- | ------ | ----------------- |  | - | ------- | -
|                                                    |  | December 31, 2002 |        | December 31, 2001
|                                                    |  |                   |        |                  
|(In thousands)                                      |  |                   |        |                   |  |   |         |  
|Cash and equivalents                                |  | $                 | 44     |                   |  | $ | 2,165   |  
|Other current assets                                |  |                   | 880    |                   |  |   | 11,996  |  
|Assets held for sale                                |  |                   | 3,363  |                   |  |   | 3,691   |  
|Deferred income taxes                               |  |                   |       |                   |  |   | 11,935  |  
|Other assets                                        |  |                   | 122    |                   |  |   | 192     |  
|Current liabilities                                 |  |                   | (5,218 | )                 |  |   | (12,626 | )
|Other liabilities                                   |  |                   |       |                   |  |   | (75     | )
|                                                    |  |                   |        |                   |  |   |         |  
|Net
assets (liabilities) of discontinued operations |  | $                 | (809   | )                 |  | $ | 17,278  |  
|                                                    |  |                   |        |                   |  |   |         |  

Results of Continuing Operations

Year-Ended December 31, 2002, Compared with Year-Ended December 31, 2001

Consolidated net sales from continuing operations decreased by $32.6 million,
or 5.6%, to $550.5 million for the year ended December 31, 2002 from $583.1
million for the year ended December 31, 2001. Pounds shipped increased by 2.1
million pounds, or 0.7%, to 310.2 million in 2002 from 308.2 million in 2001.
The average COMEX copper price for 2002 was $0.72 per pound, as compared to
$0.73 per pound in 2001.

Pounds of commercial products shipped decreased by 0.7 million pounds, or 0.3%,
to 209.6 million in 2002 from 210.3 million in 2001. This decrease in
shipments was primarily due to decreased shipments of technical tube and to a
much lesser extent, decreased shipments of alloy tube. Shipments of industrial
tube and fabricated products increased in 2002 as compared to 2001. Sales of
commercial products decreased $23.0 million, or 5.2%, to $421.2 million in 2002
from $444.2 million in 2001. This decrease in sales was attributable to
decreased fabrication revenues, primarily related to lower volumes of technical
tube, modest selling price decreases and a decrease in average COMEX copper
prices in 2002. Gross profit from commercial products increased by $1.6
million, or 3.2%, to $51.7 million in 2002 from $50.1 million in 2001. The
improvement in gross profit for commercial products, despite lower volumes and
modest selling price decreases, is primarily attributable to cost reductions
and improved manufacturing efficiencies.

Pounds of wholesale products shipped increased by 2.7 million pounds, or 3.6%,
to 79.1 million in 2002 from 76.3 million in 2001. Sales of wholesale products
decreased by $3.6 million, or 3.7%, to $93.9 million in 2002 from $97.6 million
in 2001, due to a reduction in selling prices in excess of 20% in this highly
competitive commodity market, as well as a decrease in average COMEX copper
prices in 2002. Gross profit from wholesale products decreased $5.0 million,
or 53.3%, to $4.4 million in 2002 from $9.3 million in 2001, due primarily to
the reduction in selling prices.

25

---



---



##### Table of Contents



Pounds of rod, bar and other products shipped remained basically flat in 2002
as compared to 2001, increasing by 0.1 million pounds, or 0.2%, to 21.6 million
in 2002 from 21.5 million in 2001. Sales of rod, bar and other products
decreased $6.0 million, or 14.5%, to $35.4 million in 2002 from $41.3 million
in 2001, primarily reflecting a reduction in sales from our distribution center
in The Netherlands. Gross profit from rod, bar and other products decreased
$0.4 million, or 15.2%, to $2.4 million in 2002 from $2.8 million in 2001, due
to the reduction in sales from our Netherlands distribution center.

Consolidated gross profit decreased $3.8 million, or 6.1%, to $58.4 million in
2002 from $62.2 million in 2001. Gross profit in 2002 decreased primarily due
to selling price reductions related to wholesale products and to a lesser
extent commercial products, as well as lower shipments of technical tube, the
impact of which was somewhat mitigated by our cost reduction initiatives and
efficiency gains.

Consolidated selling, general and administrative expenses for the year ended
December 31, 2002 decreased by $1.6 million, or 5.1%, to $30.6 million, from
$32.3 million in 2001. Consolidated selling, general and administrative
expenses were approximately five percent of sales for both 2002 and 2001.
Excluding $2.3 million of amortization of goodwill in 2001, selling, general
and administrative expenses in 2001 were $30.0 million. Selling, general and
administrative expenses increased approximately 2.0% or $0.6 million in 2002,
primarily due to an $0.8 million increase in charges for legal and other
professional fees associated with various tax strategies and corporate
structures and environmental consulting, net of recoveries from an insurance
settlement.

Operating income from continuing operations decreased by $0.6 million, or 2.0%
to $27.8 million for the year ended December 31, 2002, from $28.4 million in
2001 primarily due to selling price reductions related to wholesale products
and to a lesser extent commercial products, as well as lower shipments of
technical tube, the impact of which was somewhat mitigated by our cost
reduction initiatives and efficiency gains and a reduction in selling, general
and administrative expenses. In 2001, restructuring and other charges of $1.5
million were recognized, as described in the Restructuring and Other Charges
section below.

Consolidated net interest expense increased $6.6 million to $19.7 million in
2002 from $13.1 million in 2001. On March 27, 2002, we obtained new financing
to replace our old revolving credit facility. We issued $120 million in
principal amount of 10.5% Senior Notes and concurrently, we entered into a new
secured revolving credit facility. There was an average of $24.9 million in
outstanding borrowings under our revolving credit facilities during 2002 as
compared to an average of $86.7 million in outstanding borrowings under our old
revolving credit facility during 2001. The average interest rate under our new
and old revolving credit facilities was 4.8% for 2002 versus 5.5% under our old
revolving credit facility in 2001. Interest expense in 2002 is net of interest
income of $0.5 million and capitalized interest of $0.7 million, and interest
expense in 2001 is net of interest income of $0.6 million and capitalized
interest of $1.1 million. Interest expense is also net of interest income from
loans to the discontinued operations of Wolverine Ratcliffs, Inc., which was
$0.8 million in 2002 and $1.3 million in 2001. Interest expense was reduced
$0.3 million in 2002 as compared to 2001 from the benefit of our interest rate
swap on $50 million notional amount of our 7.375% Senior Notes which we entered
into in the fourth quarter of 2002.

26

---



---



##### Table of Contents



During the third and fourth quarters of 2002, we purchased $13.2 million of our
7.375% Senior Notes in the open market at an average of 90% of face value and
with an effective yield of 9.6% and $2.0 million of our 10.5% Senior Notes at
95% of face value with an effective yield of 11.6%. We recorded a $1.3 million
gain from the extinguishment of these Senior Notes and will realize a $1.2
million reduction in annualized interest expense in future years.

Amortization and other, net was $1.0 million of expense in 2002, as compared to
$0.4 million of income in 2001. Amortization and other, net in 2001 included
$0.5 million of foreign currency gains. These foreign currency gains were
largely attributable to fluctuations in the Canadian to U.S. dollar exchange
rate. Amortization and other, net in 2002 included $0.3 million of income
related to the administration and collection of receivables sold to us by our
discontinued operations as compared to $0.6 million in 2001. Amortization
expense in 2002 increased $0.6 million to $1.3 million compared to $0.7 million
in 2001 due to the deferred financing fees incurred when we obtained our new
financing in March 2002.

The effective tax rate for continuing operations for 2002 was 15.5%, as
compared to 27.5% in 2001. The substantially lower effective tax rate in 2002
reflects the favorable outcome of a tax audit in Canada that had been provided
for and was concluded in 2002 as well as the situation wherein we generated tax
benefits in higher effective tax rate jurisdictions, in which we had pre-tax
losses, and accrued tax provisions in jurisdictions where the effective tax
rates were lower due to tax incentives.

Consolidated income from continuing operations in 2002 decreased by $4.3
million to $7.2 million, or $0.58 per diluted share, from $11.4 million, or
$0.91 per diluted share, in 2001. Consolidated income from continuing
operations for 2001 adjusted to exclude amortization expense recognized related
to goodwill would have been $14.1 million or $1.13 per diluted share.

Year-Ended December 31, 2001, Compared with Year-Ended December 31, 2000

Consolidated net sales from continuing operations decreased by $38.4 million,
or 6.2%, to $583.1 million for the year ended December 31, 2001 from $621.5
million for the year ended December 31, 2000. Pounds shipped decreased by 26.7
million pounds, or 8.0%, to 308.2 million in 2001 from 334.8 million in 2000.
The average COMEX copper price for 2001 was $0.73 per pound, as compared to
$0.84 per pound in 2000.

Pounds of commercial products shipped decreased by 27.7 million pounds, or
11.6%, to 210.3 million in 2001 from 238.0 million in 2000. This decrease in
shipments was primarily due to decreased demand for industrial tube used in the
residential air conditioning industry, as well as decreased shipments of
fabricated products and technical tube, reflecting a weak economy and a
relatively cool summer in North America. Lower alloy tube shipments primarily
resulted from our product rationalization efforts to enhance the operating
results of this product by discontinuing some of our lower margin products.
Sales of commercial products decreased $43.2 million, or 8.9%, to $444.2
million in 2001 from $487.4 million in 2000. This decrease in sales was
attributable to decreased fabrication revenues, primarily related to lower
volumes of fabricated products, industrial tube, technical tube and alloy tube
and lower average COMEX copper prices in 2001. The decrease in sales was
partially offset by the addition of sales of metal

27

---



---



##### Table of Contents



joining products for the full year of 2001 as compared to sales of metal
joining products for only the last quarter of 2000. Gross profit from
commercial products decreased by $19.8 million, or 28.4%, to $50.1 million in
2001 from $70.0 million in 2000. The decrease in gross profit for commercial
products was primarily attributable to decreased shipments of fabricated
products, technical tube and industrial tube.

Pounds of wholesale products shipped increased by 8.5 million pounds, or 12.5%,
to 76.3 million in 2001 from 67.8 million in 2000. We believe that shipments
were positively impacted by an increase in housing starts and lower interest
rates. Sales of wholesale products remained basically flat, increasing $0.6
million, or 0.6%, to $97.6 million in 2001 from $97.0 million in 2000,
reflecting aggressive and competitive pricing as well as lower average COMEX
copper pricing in 2001. Gross profit from wholesale products decreased $3.3
million, or 26.2%, to $9.3 million in 2001 from $12.6 million in 2000, due to
an increase in the relative amount of our fixed costs attributed to this
segment as sales volumes in other segments declined.

Pounds of rod, bar and other products shipped decreased by 7.4 million pounds,
or 25.7%, to 21.5 million in 2001 from 29.0 million in 2000, primarily due to
the weak economy which had a particularly negative impact on the heavy
industrial applications of rod and bar products. Sales of rod, bar and other
products increased $4.3 million, or 11.6%, to $41.3 million in 2001 from $37.1
million in 2000. Sales increased approximately $15.0 million due to sales
generated by our distribution center in The Netherlands. This increase in
sales was partially offset by a decrease in fabrication revenues for rod and
bar products due to competitive pricing and a decrease in average COMEX copper
pricing in 2001. Gross profit from rod, bar and other products increased $0.3
million, or 11.5%, to $2.8 million in 2001 from $2.5 million in 2000, due to
the operating results of the distribution center in The Netherlands offset by a
decline in the volume of rod and bar products shipped.

Consolidated gross profit decreased $22.9 million, or 26.9%, to $62.2 million
in 2001 from $85.1 million in 2000. Gross profit in 2001 decreased primarily
due to lower shipments of fabricated products, technical tube and industrial
tube. Additionally, gross profit was negatively impacted by approximately $3.4
million of higher healthcare costs and by approximately $3.4 million in higher
energy costs for 2001.

Consolidated selling, general and administrative expenses for the year ended
December 31, 2001 remained relatively flat, increasing by $0.3 million, or
0.9%, to $32.3 million, from $32.0 million in 2000. Consolidated selling,
general and administrative expenses were approximately five percent of sales
for both 2001 and 2000 and include $2.8 million in 2001 and
$0.6 million in 2000 of the selling, general and administrative
expenses of Wolverine Joining Technologies and the distribution center in The
Netherlands, both of which we acquired in September 2000. Selling, general and
administrative expenses in 2001 also include a $1.5 million reduction in incentive compensation, partially offset by
a $1.0 million increase in legal expenses.

Operating income from continuing operations decreased $24.8 million to $28.4
million for the year ended December 31, 2001, from $53.2 million in 2000. In
2001, restructuring and other charges of $1.5 million were recognized, as
described in the Restructuring and Other Charges section below.

Consolidated net interest expense increased $0.9 million to $13.1 million in
2001 from $12.2 million in 2000. There was an average of $86.7 million in
outstanding borrowings and

28

---



---



##### Table of Contents



obligations under our existing revolving credit facility during 2001 as
compared to an average of $46.7 million during 2000. This increase was
attributable to the funding of our capital programs as well as our acquisition
of Wolverine Joining Technologies in September 2000. The average interest rate
under our existing revolving credit facility was 5.5% for 2001 versus 7.0% for
2000. Interest expense in 2001 is net of interest income of $0.6 million and
capitalized interest of $1.1 million, and interest expense in 2000 is net of
interest income of $1.2 million and capitalized interest of $1.3 million.
Interest expense also is net of interest income from loans to the discontinued
operations of Wolverine Ratcliffs, Inc., which was $1.3 million in 2001 and
$0.5 million in 2000.

Amortization and other, net was $0.4 million of income in 2001, as compared to
$0.4 million of expense in 2000. Amortization and other, net in 2001 included
$0.5 million of foreign currency gains, as compared to $0.1 million of foreign
currency gains in 2000. These foreign currency gains are largely attributable
to fluctuations in the Canadian to U.S. dollar exchange rate. Amortization and
other, net in 2001 also included $0.6 million of income related to the
administration and collection of receivables sold to us by our discontinued
operations. Amortization expense was $0.7 million in 2001, as compared to $0.4
million in 2000.

The effective tax rate for continuing operations for 2001 was 27.5%, as
compared to 36.1% in 2000. The decrease in the effective tax rate in 2001
resulted from more income from foreign tax jurisdictions, which had lower
statutory tax rates. In particular, the tax rate for our operations in China
was 0% in 2001 and 2000 reflecting our contractual tax holiday agreement with
the Chinese government. Under this agreement, the tax rate will be increased
to 7.5% beginning January 1, 2002 and will remain at this rate for the next
three years, increasing in 2005 to a 15% maximum rate.

Consolidated income from continuing operations in 2001 decreased by $14.5
million to $11.4 million, or $0.91 per diluted share, from $25.9 million, or
$2.08 per diluted share, in 2000. Consolidated income from continuing
operations in 2001 and 2000, adjusted to exclude amortization expense
recognized related to goodwill would have been $14.1 million, or $1.13 per
diluted share and $28.2 million or $2.27 per diluted share, respectively.

Restructuring and Other Charges

During the third quarter of 2001, we recognized restructuring and other charges
of $1.5 million ($1.0 million net of tax). We accrued and charged to expense
$1.1 million for severance benefits for approximately 40 salaried and hourly
employees. We offered a voluntary separation program to employees at several
of our facilities due to lack of demand for these facilities products, the
criteria for which was dependent on the employees age, job duties and years of
service. We separated these employees in order to reduce costs for anticipated
continued weakness in sales volumes and mix and anticipated reductions of
capacity utilization. We also accrued and charged to expense a $0.2 million
write-off of impaired assets and $0.2 million related to a previously closed
facility. As of December 31, 2001, we had separated 40 employees. We paid
approximately $0.8 million and $0.3 million in 2001 and 2002 respectively,
related to this restructuring, and we anticipate no further obligations. We
expect to realize approximately $2.1 million or $1.3 million after taxes in
reduced salary and related expenses per year as a result of the restructuring.

29

---



---



##### Table of Contents



Liquidity and Capital Resources

The primary sources of our liquidity for the years ended December 31, 2002,
2001 and 2000 were cash provided from continuing operating activities, net
borrowings under our revolving credit facilities in 2001 and 2000, cash on hand
at the beginning of each year, and $118.5 million from the issuance of our
10.5% Senior Notes in 2002. The primary uses of our funds were $98.4 million
to repay our revolving credit facilities in 2002, investments in our property,
plant and equipment in each year, the discontinued operations of Wolverine
Ratcliffs, Inc. in each year, $13.9 million to purchase our Senior Notes in the
open market in 2002, $8.7 million of financing fees related to the issuance of
our 10.5% Senior Notes and new revolving credit facility in 2002, a
$5.0 million voluntary contribution to our U.S. pension plans and $1.0 million related to
the mandatory redemption of our preferred stock both in 2002, $7.5 million to
repurchase 0.5 million shares of our common stock in 2000 and $43.9 million to
acquire Wolverine Joining Technologies in 2000.

Net cash provided by continuing operating activities totaled $41.4 million for
2002, $26.6 million for 2001 and $46.6 million for 2000. The net increase in
operating cash flows in 2002 was primarily the result of a decrease in
inventory in 2002 relative to 2001 due to the liquidation of the WRI inventory
in 2002 and generally lower levels of business in 2002 as compared to 2001.
The net reduction in operating cash flows in 2001 was primarily the result of
less income in 2001 as compared to 2000 as well as the net reduction in
accounts receivable and accounts payable in 2001 relative to 2000.

Capital expenditures for continuing operations were $7.7 million in 2002, $27.6
million in 2001 and $31.7 million in 2000. The significant amount of capital
expenditures in 2001 and 2000 for our Project 21 capital program temporarily
reduced our requirements in 2002 for maintenance capital expenditures. We
currently expect to spend approximately $13 to $17 million in 2003. Our
capital expenditures include asset replacement, environmental compliance and
asset improvement items.

In 2000, we purchased 537,600 shares of our outstanding common stock in the
open market for $7.5 million. The impact on diluted earnings per share of
purchasing 2.2 million of our treasury shares over a three year period from
1998 to 2000, based on the weighted average borrowing rate under our applicable
revolving credit facility and the effective U.S. tax rate of each year, is a
favorable per share impact of $0.03 for 2002, $0.04 for 2001 and $0.20 for
2000.

The ratio of current assets to current liabilities was 4.3 in 2002, 3.3 in 2001
and 3.1 in 2000, in each case calculated as of December 31. Our cash and cash
equivalent balances as of December 31, 2002 and December 31, 2001 were $53.9
million and $22.7 million, respectively, of which $31.5 million and $22.7
million, respectively, were held by our facilities located outside of the
United States. We believe that we would have to pay the differential between
foreign taxes and U.S. taxes on funds located outside of the United States upon
repatriating these funds to the United States. However, we do not anticipate
having a need in the foreseeable future to repatriate these funds and
accordingly have not accrued the differential tax liability.

With the borrowing availability under our secured revolving credit facility,
our cash balances and anticipated cash flow from our continuing operations, we
believe that we will be able to satisfy our existing working capital needs,
interest obligations and capital expenditure requirements in 2003 and beyond.
We will continue to monitor our cash balances and forecasted cash flows and

30

---



---



##### Table of Contents



evaluate opportunities to purchase our Senior Notes in the open market. We
will also evaluate in 2003 making non-mandatory cash contributions to our
pension plans. In February of 2003, we transferred $4.3 million to a rabbi
trust to partially fund the vested benefit obligations to certain executives
under our Supplemental Executive Retirement Plan.

We have summarized below our contractual obligations and commercial commitments
as of December 31, 2002:

|                                     |  |                                                 |       |      |  |      |       |      |  |      |       |            |  |       |       |  |  |   |     |  |  |   |         |  |  |   |         | 
|------------------------------------ |  | ----------------------------------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---------- |  | ----- | ----- |  |  | - | --- |  |  | - | ------- |  |  | - | ------- | 
|                                     |  | Payments Due or Commitments Expiring In Period:
|                                     |  |                                                
|(In thousands)                       |  | 2003                                            |       | 2004 |  | 2005 |       | 2006 |  | 2007 |       | After 2007 |  | Total
|                                     |  |                                                 |       |      |  |      |       |      |  |      |       |            |  |      
|Contractual
obligations:             |  |                                                 |       |      |  |      |       |      |  |      |       |            |  |       |       |  |  |   |     |  |  |   |         |  |  |   |         | 
|Short-term debt                      |  | $                                               | 1,217 |      |  | $    |      |      |  | $    |      |            |  | $     |      |  |  | $ |    |  |  | $ |        |  |  | $ | 1,217   | 
|Long-term debt                       |  |                                                 |      |      |  |      | 405   |      |  |      | 405   |            |  |       | 405   |  |  |   | 405 |  |  |   | 254,092 |  |  |   | 255,712 | 
|Operating leases                     |  |                                                 | 3,505 |      |  |      | 2,846 |      |  |      | 2,057 |            |  |       | 934   |  |  |   | 583 |  |  |   | 1,600   |  |  |   | 11,525  | 
|Commitments for
capital expenditures |  |                                                 | 1,157 |      |  |      |      |      |  |      |      |            |  |       |      |  |  |   |    |  |  |   |        |  |  |   | 1,157   | 
|                                     |  |                                                 |       |      |  |      |       |      |  |      |       |            |  |       |       |  |  |   |     |  |  |   |         |  |  |   |         | 
|Total contractual
obligations        |  | $                                               | 5,879 |      |  | $    | 3,251 |      |  | $    | 2,462 |            |  | $     | 1,339 |  |  | $ | 988 |  |  | $ | 255,692 |  |  | $ | 269,611 | 
|                                     |  |                                                 |       |      |  |      |       |      |  |      |       |            |  |       |       |  |  |   |     |  |  |   |         |  |  |   |         | 
|Other commercial
commitments:        |  |                                                 |       |      |  |      |       |      |  |      |       |            |  |       |       |  |  |   |     |  |  |   |         |  |  |   |         | 
|Standby letters of
credit            |  | $                                               | 5,553 |      |  |      |      |      |  |      |      |            |  |       |      |  |  |   |    |  |  |   |        |  |  | $ | 5,553   | 
|                                     |  |                                                 |       |      |  |      |       |      |  |      |       |            |  |       |       |  |  |   |     |  |  |   |         |  |  |   |         | 

We have a precious metal leasing program for silver that is essentially a
consignment inventory arrangement under which banks provide us with precious
metals for a specified period for which we pay a fee. As of December 31, 2002,
we had consigned 1.5 million troy ounces of silver approximating a market value
of $7.1 million based upon current silver prices. The associated fee for this
arrangement is included in the operating lease amounts above.

New Financing Agreements

On March 27, 2002, we obtained new financing agreements to replace our old
revolving credit facility which was scheduled to mature on April 30, 2002. We
issued $120 million in principal amount of 10.5% Senior Notes that will mature
in 2009. We also entered into a new secured revolving credit facility
concurrently with the closing of the 10.5% Senior Notes offering. The new
revolving credit facility provides for up to a $37.5 million line of credit
dependent on the levels of and secured by our eligible accounts receivable and
inventory. The new revolving credit facility provides for interest at the
Eurodollar rate plus 2.5% or the U.S. base rate plus 1%. Commitment fees on
the unused available portion of the facility are 0.5%. The new revolving
credit facility matures on March 27, 2005.

Because we used proceeds from our new long-term financing agreements to
refinance the current maturities on our old revolving credit facility, we have
reclassified all outstanding borrowings

31

---



---



##### Table of Contents



under our old facility as non-current in our consolidated balance sheet as of
December 31, 2001. See Note 10 of the Notes to Consolidated Financial
Statements.

As of December 31, 2002, we had no outstanding obligations under our secured
revolving credit facility. We had approximately $5.6 million of standby
letters of credit outstanding that are collateralized with the secured
revolving credit facility and approximately $31.9 million (subject to a $2
million excess availability requirement) in additional borrowing availability
thereunder.

In the first quarter of 2003, we and our lenders executed an amendment to the
secured revolving credit facility to change the minimum consolidated EBITDA
requirement on a rolling four-quarter basis for each quarter of 2003
from $50.0 million, to $40.0 million for the first
three quarters of 2003 and $42.0 million for the fourth quarter
of 2003. The need for the amendment is due to a lack of
improvement in market and economic conditions from what had been expected and
in anticipation that violations of the minimum consolidated EBITDA covenant
would occur. The minimum consolidated EBITDA requirement on a rolling
four-quarter basis for each quarter of 2004 of $55.0 million
remains unchanged.

As of December 31, 2001 and 2000, we had $97.9 million and $81.4 million of
outstanding obligations under our old revolving credit facility, approximately
$5.4 million and $3.7 million of standby letters of credit outstanding that
were collateralized with the old revolving credit facility, and approximately
$27.0 million and $115.0 million in additional borrowing capacity available
under our old revolving credit facility, respectively.

Interest Rate Swap Agreement

In October 2002, we completed an interest rate swap on $50.0 million notional
amount of our 7.375% Senior Notes. The terms of the interest rate swap are a
semi-annual payment date of February 1 and August 1, a floating rate option of
the six-month LIBOR rate plus a spread of 3.76% and a termination date of
August 1, 2008.

The interest rate swap is accounted for in accordance with SFAS No. 133
(subsequently amended by SFAS No. 137 and 138) Accounting For Derivative
Instruments and Hedging Activitiesas a fair value hedge and because the terms
of the debt and the payments to be received on the swap coincide, the hedge is
considered perfectly effective against the changes in the fair value of the
debt over its term. The swap agreement was executed in order to (i) convert a
portion of the Senior Notes fixed-rate debt into floating-rate debt; (ii)
maintain a capital structure containing appropriate amounts of fixed and
floating-rate debt; and (iii) reduce net interest payments and expense in the
near-term. As of December 31, 2002, we recorded the fair market value of the
interest rate swap of $0.4 million as other assets with a corresponding
increase to the hedged debt, with equal and offsetting unrealized gains and
losses included in other income (expense), net. Interest payments are
recognized through interest expense and are made and received on the first day
of each February and August, commencing February 1, 2003 and ending on the
maturity date. Since the interest rate is not known until the end of each
semi-annual interest period, estimates are used during such period based upon
published forward-looking LIBOR rates. Any differences between the estimated
interest expense and the actual interest payment are recorded to interest
expense at the end of each semi-annual interest period. The interest rate swap
resulted in a reduction to interest expense in 2002 of $0.3 million. We
anticipate that the terms of the swap will reduce our interest expense in 2003
by approximately $1.2 million assuming current rates as of December 31, 2002.
Our obligations under this swap agreement are secured on the same basis as our
obligations under our three-year revolving credit facility.

32

---



---



##### Table of Contents



Purchase of Senior Notes in the Open Market

During the third and fourth quarters of 2002, we purchased $13.2 million of our
7.375% Senior Notes in the open market at an average of 90% of face value and
with an effective yield of 9.6% and $2.0 million of our 10.5% Senior Notes at
95% of face value with an effective yield of 11.6%. We recorded a $1.3 million
gain from the extinguishment of these Senior Notes and will realize a $1.2
million reduction in annualized interest expense in future years.

Senior Notes Due 2009

In March 2002, we issued $120.0 million in principal amount of our 10.5% Senior
Notes. Our 10.5% Senior Notes were issued pursuant to an indenture, dated as
of March 27, 2002, between us and Wachovia Bank, National Association
(successor to First Union National Bank), as trustee. We used the net proceeds
from the sale of our 10.5% Senior Notes to repay indebtedness under our old
revolving credit facility that was terminated in March 2002. Our 10.5% Senior
Notes:



| |  |  | have interest payment dates on April 1 and October 1 of each year,
which commenced October 1, 2002;                                        
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | are redeemable after the dates and at the prices (expressed in
percentages of principal amount on the redemption date), as set forth
below:

|                             |  |            |         |  
|---------------------------- |  | ---------- | ------- | -
|Year                         |  | Percentage
|                             |  |           
|April 1, 2006                |  |            | 105.250 | %
|April 1, 2007                |  |            | 102.625 | %
|April 1, 2008 and thereafter |  |            | 100.000 | %



| |  |  | are senior unsecured obligations and are equal priority in right of
payment with any of our existing and future senior unsecured
indebtedness;                                                                                                
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | are guaranteed by certain of our subsidiaries; and                                                                                                                                                                                            
|
| |  |  | are subject to the terms of the indenture governing our 10.5%
Senior Notes, which contain certain covenants, including covenants that
limit our ability to incur indebtedness, make certain restricted
payments and dispose of certain assets.

Senior Notes Due 2008

In August 1998, we issued $150.0 million in principal amount of our 7.375%
Senior Notes. Our 7.375% Senior Notes were issued pursuant to an indenture,
dated as of August 4, 1998, between us and Wachovia Bank, National Association
(successor to First Union National Bank), as trustee. Our 7.375% Senior Notes:



| |  |  | have interest payment dates on February 1 and August 1 of each
year, which commenced February 1, 1999;
| | - |  | ------------------------------------------------------------------------------------------------------

33

---



---



##### Table of Contents





| |  |  | are redeemable at our option at a redemption price equal to the
greater of (a) 100% of the principal amount of our 7.375% Senior Notes
to be redeemed, or (b) the sum of the present value of the remaining
scheduled payments of principal and interest thereon from the
redemption date to the maturity date, discounted to the redemption date
on a semiannual basis at the Treasury Rate plus 25 basis points, plus,
in each case, accrued interest thereon to the date of redemption;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | are senior unsecured obligations and are equal priority in right of
payment with any of our existing and future senior unsecured
indebtedness;                                                                                                                                                                                                                                                                                                                                            
|
| |  |  | are guaranteed by certain of our subsidiaries, all of which are
also guarantors under the 10.5% Senior Notes issued in March 2002;                                                                                                                                                                                                                                                                                                                                                        
|
| |  |  | are subject to the terms of the indenture governing our 7.375%
Senior Notes, which contains certain covenants that limit our ability
to incur indebtedness secured by certain liens and to engage in
sale/leaseback transactions.                                                                                                                                                                                                                                                         

Market Risks

We are exposed to various market risks, including changes in interest rates,
commodity prices and foreign currency rates. Market risk is the potential loss
arising from adverse changes in market rates and prices. We do not enter into
derivatives or other financial instruments for trading or speculative purposes.
In the ordinary course of business, we enter into various types of
transactions involving financial instruments to manage and reduce the impact of
changes in interest rates, commodity prices and foreign exchange rates.

Interest Rate Risk

The fair market value of long-term fixed interest rate debt is subject to
interest rate risk. Generally, the fair market value of fixed interest rate
debt will increase as interest rates fall and decrease as interest rates rise.
The estimated fair value of our total long-term fixed interest rate debt as of
December 31, 2002 was $246.2 million, versus a carrying value of $253.3
million. The estimated fair value of our total long-term fixed interest rate
debt as of December 31, 2001 was $127.5 million versus a carrying value of
$149.8 million. A 1% increase from prevailing interest rates would result in a
decrease in fair value of this debt by approximately $10.4 million as of
December 31, 2002 and $6.1 million as of December 31, 2001. The estimated fair
market value of our debt is based upon the indicative bid price for our Senior
Notes which approximates their trade value. The yield implicit in the value of
the 7.375% Senior Notes is 9.24% and 9.99% for the 10.5% Senior Notes as of
December 31, 2002.

In October 2002, we completed an interest rate swap on $50 million notional
amount of our 7.375% Senior Notes. The terms of the interest rate swap are
semi-annual payment dates of February 1 and August 1, a floating rate option of
the six-month LIBOR rate plus a spread of 3.76% and a termination date of
August 1, 2008. As of December 31, 2002, we recorded the fair market value of
the interest rate swap of $0.4 million as other assets with a corresponding
increase to the hedged debt, with equal and offsetting unrealized gains and
losses included in other income (expense), net.

34

---



---



##### Table of Contents



Commodity Price Risk

In connection with the sale of some raw materials, principally copper, we have
entered into commodity forward contracts as we deemed appropriate to reduce the
risk of price increases with respect to both firm-price sale commitments and
anticipated sales. These forward contracts are accounted for in accordance with
SFAS No.133 (subsequently amended by SFAS No.137 and 138) Accounting For
Derivative Instruments and Hedging Activities.As of December 31, 2002, we had
entered into contracts hedging the raw material requirements for committed and
anticipated future sales through March 2004 having a notional value of $33.3
million. As of December 31, 2001, we had entered into contracts hedging the
raw material requirements for committed and anticipated future sales through
December 2003 having a notional value of $46.1 million. The estimated fair
value of these outstanding contracts was a liability of approximately ($0.5)
million as of December 31, 2002 and ($2.7) million as of December 31, 2001. A
10.0% adverse change in commodity prices would decrease the estimated fair
value of these outstanding contracts by $3.3 million and $4.2 million at
December 31, 2002 and December 31, 2001, respectively.

In 2002, we entered into commodity forward contracts to sell copper in March
2003 with a notional value of $24.4 million and in December 2003 with a
notional value of $10.6 million. We entered into these forward contracts in
order to mitigate the impact of fluctuating copper prices with regard to the
valuation of our inventory balances. These forward contracts were not
designated as effective hedges and therefore they are marked to market each
month with gains and losses recorded in cost of goods sold. The estimated fair
value of these outstanding contracts was a gain of approximately $0.8 million
as of December 31, 2002. A 10.0% increase in commodity prices would decrease
the estimated fair value of these outstanding contracts by $3.6 million at
December 31, 2002.

In connection with the purchase of natural gas, we have entered into commodity
futures contracts for natural gas to reduce our risk of future price increases.
These contracts are accounted for in accordance with SFAS No.133 and
accordingly, realized gains and losses are recognized when the hedged natural
gas purchases occur and are recognized in cost of goods sold. Gains and losses
on natural gas futures contracts that are designated as cash flow hedges are
recognized in comprehensive income until the anticipated natural gas purchase
occurs or is no longer probable. As of December 31, 2002, we had commodity
futures contracts to purchase natural gas for the period February 2003 through
March 2003 with a notional amount of $0.5 million and an unrealized gain of
$0.1 million, based on futures prices as of December 31, 2002. As of December
31, 2001, we had commodity futures contracts to purchase natural gas for the
period February 2002 through October 2002 with a notional amount of $1.4
million and an unrealized loss of $0.2 million, based on futures prices as of
December 31, 2001. The effect of a 10.0% adverse change in commodity prices as
of December 31, 2002 for these futures contracts would result in a potential
loss in fair value of approximately $0.1 million.

Foreign Currency Risk

Some of our operations use foreign exchange forward contracts to hedge fixed
purchase and sales commitments denominated in a foreign currency. Our foreign
currency exposures relate primarily to nonfunctional currency assets and
liabilities denominated in Euros and British Pound Sterling.

35

---



---



##### Table of Contents



We do not enter into forward exchange contracts for trading purposes. These
forward contracts and the underlying hedged receivables and payables are
carried at their fair values with any associated gains and losses recognized in
current period earnings. We mitigate the risk that the parties with whom we
enter into these over-the-counter agreements will fail to perform by only
entering into agreements with major international financial institutions.

As of December 31, 2002, we had forward exchange contracts outstanding to
purchase foreign currency with a notional amount of $1.1 million and to sell
foreign currency with a notional amount of $1.2 million. As of December 31,
2002, we had an unrealized loss of $0.1 million associated with these forward
contracts. The potential loss in fair value for these forward contracts from a
hypothetical 10.0% adverse change in quoted foreign currency exchange rates
would be approximately $0.2 million.

As of December 31, 2001, we had forward exchange contracts outstanding to
purchase foreign currency with a notional amount of $1.4 million and to sell
foreign currency with a notional amount of $1.0 million. As of December 31,
2001, we had an unrealized loss of $9,334 associated with these forward
contracts. The potential loss in fair value for these forward contracts from a
hypothetical 10.0% adverse change in quoted foreign currency exchange rates
would be approximately $0.2 million.

Environmental

Our facilities and operations are subject to extensive environmental laws and
regulations. During the year ended December 31, 2002, we spent approximately
$1.2 million on environmental matters, which include remediation costs,
monitoring costs, legal and other costs. We had a reserve of $1.5 million at
December 31, 2002 for undiscounted environmental remediation costs which is
reflected in our Condensed Consolidated Balance Sheet. We intend to spend
approximately $1.2 million for capital expenditures relating to environmental
matters during 2003. Based upon currently available information, we believe
that the costs of the environmental matters described below are not reasonably
likely to have a material adverse effect on our business, financial condition
or results of operations. However, actual costs related to environmental
matters could differ materially from the amounts we estimated and accrued at
December 31, 2002 and could result in additional exposure if these
environmental matters are not resolved as anticipated.

Decatur, Alabama

In 1999, we negotiated a new Consent Order under Section 3008(h) of the
Resource Conservation and Recovery Act. This order incorporated the Corrective
Measures Study, commonly referred to as the CMS, submitted to the EPA regarding
a waste burial site at the Decatur, Alabama facility. The order also included
an upgrade to an existing chrome ground water remediation system. The CMS
proposed current monitoring and site maintenance. The 2002 Annual Groundwater
Monitoring and Effectiveness Report submitted to the EPA shows that the area of
groundwater plume has receded significantly. The report also shows continued
reductions in the concentration level of contamination. Both of these are
attributed to the effectiveness of the vacuum enhancement modifications made to
the groundwater recovery system.

36

---



---



##### Table of Contents



Part of the ground water contamination plume had previously been detected
underneath a section of property not owned by us. There are monitoring wells
and recovery wells on this property. However, these wells have not been
activated because the level of contamination currently is below regulated
levels. To date, we have not received or been threatened by any claim from the
owner of this property. In December 2002, we took a sample from this property
that indicated there were no longer detectable levels of chrome beyond our
property boundary. If the owner of this property does make a claim, we could
incur additional costs.

On May 31, 2001, the EPA ordered modifications to the previously approved CMS
and operations and maintenance plan to include continued monitoring of the
burial site and the development of a contingency plan if contamination is
detected. In addition, the EPA requested that we have a deed restriction
placed on the burial site area to restrict any future development. We filed a
deed restriction on 4.35 acres of the 165 acre manufacturing facility site in
February 2002. The cost to us to comply with the CMS, as currently approved,
is not expected to have a material adverse effect on our business, financial
condition or results of operations.

In July of 2000, we notified the Alabama Department of Environmental Management
that we detected low levels of volatile organic compounds and petroleum
hydrocarbons in the ground water at the Decatur, Alabama facility during the
expansion of the facility. On June 13, 2001, we received a letter from the
department stating that a preliminary assessment would be forthcoming which we
have yet to receive from the department. We expect to further define the
extent of any contamination and execute any necessary remedies in conjunction
with the departments assessment. We may voluntarily institute a pump and
treat system in order to begin remediation of the contamination.

The estimated remaining investigative, monitoring, remedial, legal and other
costs related to the environmental matters of our Decatur, Alabama facility are
$0.6 million as of December 31, 2002.

Ardmore, Tennessee

On December 28, 1995, we entered into a Consent Order and Agreement with the
Tennessee Division of Superfund, or Tennessee Division, relating to the
Ardmore, Tennessee facility, under which we agreed to conduct a preliminary
investigation on whether volatile organic compounds detected in and near the
municipal drinking water supply are related to the Ardmore facility and, if
necessary, to undertake an appropriate response. That investigation revealed
contamination, including elevated concentrations of volatile organic compounds,
in the soil in areas of the Ardmore facility and also revealed elevated levels
of certain volatile organic compounds in the shallow residuum ground water zone
at the Ardmore facility.

Under the terms of the order, we submitted a Remedial Investigation and
Feasibility Study work plan, which was accepted by the Tennessee Division, and
we have initiated this work plan. The Tennessee Division approved the
Groundwater Assessment Plan as a supplement to the work plan, and additional
groundwater sampling to determine the lateral and vertical extent of possible
contamination began in July 2000. The data from the ground water assessment,
the subsequent risk assessment and a preliminary review of remedial
alternatives completed the work plan portion of the project which was submitted
to the Tennessee Division on April 26, 2002. The Tennessee Division responded
with comments on the Remedial Investigation and Feasibility Study on November
8, 2002. We and our consultant are evaluating the comments and we

37

---



---



##### Table of Contents



anticipate responding to the Tennessee Divisions comments by April 17, 2003.
We continue the monitoring and analysis program in compliance with the consent
agreement.

On June 13, 2001, we purchased 22 acres immediately north of the Ardmore
facility because of the potential migration of ground water contamination to
this property. We believe that owning the property will reduce both potential
liability and long-term remediation costs. We are proposing to the Tennessee
Division that an interim corrective measure be implemented at the facility.
The interim measure will consist of a system to extract water and vapors from
the areas of highest concentration. The system can be expanded to conduct
additional remediation if required. Based on recent testing efforts at the
facility and the available information, we preliminarily estimate as of
December 31, 2002 that it will cost between $0.5 million and $3.0 million to
complete the investigation and develop the remediation plans for this site.

The water currently delivered to residents by the municipality is treated prior
to human consumption, and thus does not contain volatile organic compounds
above acceptable drinking water standards. We do not know whether the
municipality may have delivered untreated water to its water consumers.
However, due to dilution with non-contaminated water, which we believe occurs
in the operation of the municipal well system, we believe that it is unlikely
that any consumer was exposed in the past to volatile organic compounds above
acceptable drinking water standards. To date, we have not received or been
threatened by any claim from the municipality or its residents with respect to
the drinking water.

A report of a 1995 EPA site inspection of the Ardmore facility recommended
further action for the site. We believe, however, that because the Tennessee
Division is actively supervising an ongoing investigation of the Ardmore
facility, it is unlikely that the EPA will intervene and take additional
action. If the EPA should intervene, however, we could incur additional costs
for any further investigation or remedial action required.

Greenville, Mississippi

Following our acquisition of the Greenville, Mississippi facility, a
preliminary investigation disclosed certain volatile organic compounds in soil
and ground water at the site. We entered into a consent agreement with the
Mississippi Department of Environmental Quality on July 15, 1997. We began
remediation efforts in the third quarter of 1997 and expected these efforts to
last approximately three years. In February 2000, we submitted a report of
remediation activities and were granted approval by the Mississippi department
to cease active remediation and begin post-closure monitoring. However, there
can be no assurance that the department will allow us to permanently
discontinue remediation efforts, and operations, maintenance and other expenses
of the remediation system may continue for a longer period of time. Through
October 3, 1998, applicable costs of testing and remediation required at the
Greenville facility had been shared with the former owners of the facility
pursuant to the terms of an escrow agreement established at the time the
facility was acquired. Subsequent to October 3, 1998, we released the former
owners of the facility from liability related to the remediation of the
Greenville facility after receiving a $145,000 settlement payment. We estimate
as of December 31, 2002 that the remaining investigative and remedial costs
could total $44,000 under the remediation plan we adopted, but these costs
could increase if additional remediation is required.

On November 21, 2002, the Mississippi Commission on Environmental Quality
approved a Brownfield agreement order with us. We believe that this program
will provide for the most

38

---



---



##### Table of Contents



regulatory flexibility in reaching a site closure and will assist in eventual
disposal of the facility. On December 11, 2002, we donated the property to
Washington County, Mississippi to be used for economic development. We
maintain the environmental liability as defined in the Brownfield agreement.
We anticipate long-term monitoring of the site to continue until the
concentration of contaminants reach the Mississippi departments target goals.

Altoona, Pennsylvania

We have entered our Altoona, Pennsylvania facility into the State of
Pennsylvania Department of Environmental Protection Act II Program. The
program addresses contamination issues related to closed hazardous waste
lagoons and oil contamination of soil at this facility. The hazardous waste
lagoons were closed in 1982 by the previous owner. The program is a voluntary
site remediation program, which allows us to direct the site evaluation and any
eventual remediation. Remaining costs to complete the investigation phase of
the program are estimated to be $58,000. Once the investigation phase is
completed, a decision on remediation, if any, will be made. Based upon our
preliminary report to the Pennsylvania Department of Environmental Protection
no active remediation is anticipated at this site; however, some additional
testing and modeling will be required. The additional testing and modeling are
included in the estimated cost. It was our belief that the previous owner had
indemnified us for any liability in the matter. In November 2002, we reached
an out of court settlement concerning the indemnification with Millennium
Chemicals, formerly National Distillers. As part of the agreement Millennium
Chemicals has been released from all claims.

In 1998, we entered into a consent agreement with the municipality with regard
to its wastewater discharge limits. We anticipate that we will be able to
resolve the violation of the wastewater discharge limits through the use of
wastewater discharge credits from the municipality. However, if this method is
unsuccessful, we may have to install equipment that is estimated to cost
approximately $0.3 million.

Impact of Recently Issued Accounting Standards

See Note 1, Summary of Significant Accounting Policies-Recent Accounting
Pronouncements, of the Notes to Consolidated Financial Statements.

39

---



---



##### Table of Contents






|        |  |                                                           |  | 
|------- |  | --------------------------------------------------------- |  | 
|ITEM 7A |  | QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK |  | 

The information required by this item is contained in Item 7Managements
Discussion and Analysis of Financial Condition and Results of Operations and
is incorporated herein by reference.

40

---



---



##### Table of Contents






ITEM 8
        
        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


PageConsolidated Statements of OperationsFor the years ended December
31, 2002, 2001 and 2000
        
        
        F-1Consolidated Balance SheetsDecember 31, 2002 and 2001
        
        
        F-2Consolidated Statements of Stockholders EquityFor the years ended
December 31, 2002, 2001 and 2000
        
        
        F-3Consolidated Statements of Cash FlowsFor the years ended December
31, 2002, 2001 and 2000
        
        
        F-4Notes to Consolidated Financial Statements
        
        
        F-5Report of Ernst & Young LLP, Independent Auditors
        
        
        F-44


41

---



---



##### Table of Contents






ITEM 9
        
        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES


No changes in or disagreements with accountants on accounting and financial
disclosure matters existed during the most recent two years.

42

---



---



##### Table of Contents






PART III




ITEM 10
        
        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


The information required by this item with respect to directors is incorporated
by reference from the information under the caption Election of Directors
contained in our definitive proxy statement for the 2003 Annual Meeting of
Stockholders. The required information concerning our executive officers is
contained in Part I of this report. The required information concerning
compliance with Section 16(a) of the Exchange Act is incorporated by reference
from the information under the caption Compliance With Section 16(a) of the
Securities Exchange Act of 1934 contained in our definitive proxy statement
for the 2003 Annual Meeting of Stockholders.

43

---



---



##### Table of Contents






ITEM 11
        
        EXECUTIVE COMPENSATION


The information required by this item is incorporated by reference from the
information under the caption Executive Compensation in our definitive proxy
statement for the 2003 Annual Meeting of Stockholders.

44

---



---



##### Table of Contents






ITEM 12
        
        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


The information required by this item is incorporated by reference from the
information under the caption Stock Ownership of Certain Beneficial Owners and
Management and Executive Compensation-Equity Compensation Plan Information
in our definitive proxy statement for the 2003 Annual Meeting of Stockholders.

45

---



---



##### Table of Contents






ITEM 13
        
        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


The information required by this item is incorporated by reference from the
information contained under the caption Certain Relationships and Related
Transactions in our definitive proxy statement for the 2003 Annual Meeting of
Stockholders.

46

---



---



##### Table of Contents






ITEM 14
        
        CONTROLS AND PROCEDURES




| | (a) |  | Within the 90 days preceding the filing of this report on Form
10-K, we carried out an evaluation, under the supervision and with the
participation of management, including the Chief Executive Officer,
Dennis J. Horowitz, and the Chief Financial Officer, James E. Deason,
of the effectiveness of our disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934). Based upon that evaluation, Messrs. Horowitz
and Deason have concluded that our disclosure controls and procedures
are functioning effectively to provide reasonable assurance that we are
meeting our disclosure obligations.
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | There have been no significant changes in our internal controls or
in other factors that could significantly affect internal controls
since the date of Messrs. Horowitzs and Deasons most recent review of
our internal control systems. The design of any system of internal
controls and procedures is based in part upon certain assumptions about
the likelihood of future events. There can be no assurance that any
design will succeed in achieving its stated goal under all potential
future conditions, regardless of how remote.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

47

---



---



##### Table of Contents






PART IV




ITEM 15
        
        EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


(a) Index to exhibits, financial statements and schedules.



| | (1) |  | The following consolidated financial statements for the Company and
Report of Independent Auditors are included beginning on page F-1
hereof:
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Consolidated Statements of OperationsFor the years ended December 31,
2002, 2001, and 2000.
| |  |  | --------------------------------------------------------------------------------------------



| |  |  | Consolidated Balance SheetsDecember 31, 2002 and 2001.
| |  |  | -------------------------------------------------------



| |  |  | Consolidated Statements of Stockholders EquityFor the years ended
December 31, 2002, 2001 and 2000.
| |  |  | -----------------------------------------------------------------------------------------------------



| |  |  | Consolidated Statements of Cash FlowsFor the years ended December 31,
2002, 2001 and 2000.
| |  |  | -------------------------------------------------------------------------------------------



| |  |  | Notes to Consolidated Financial Statements.
| |  |  | -------------------------------------------



| |  |  | Report of Ernst & Young LLP, Independent Auditors.
| |  |  | --------------------------------------------------



| | (2) |  | The following consolidated financial statement schedule of the
Company is included on page S-1 hereof:
| | --- |  | ------------------------------------------------------------------------------------------------------



| |  |  | SCHEDULE II Valuation and Qualifying Accounts                                                                                                                                                                        
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | All other financial statements and schedules not listed have been omitted since the required information
is included in the consolidated financial statements or the notes thereto, or is not applicable or required.



| | (3) |  | Exhibits required by Item 601 of Regulation S-K:
| | --- |  | ------------------------------------------------



| |  |  | The following exhibits are included in this Form 10-K:
| |  |  | ------------------------------------------------------

10.20
        
        2002 Change in Control, Severance and
Non-Competition Agreement by and between Wolverine Tube, Inc.
and Massoud Neshan dated as of July 12, 2002.10.21
        
        Amendment No. 2 to Credit Agreement dated as of
March 25, 2003 by and among the Company, its U.S. and Canadian
Subsidiaries and the lenders named therein.10.22*
        
        2003 Annual Performance Incentive Plan21
        
        List of Subsidiaries23
        
        Consent of Ernst & Young LLP, Independent
Auditors99.1
        
        Certification of the Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002


48

---



---



##### Table of Contents



99.2
        
        Certification of the Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.


The following exhibits are incorporated by reference:

Exhibit No.
        
        Description3.1
        
        Restated Certificate of Incorporation as amended through May 1, 1998 (incorporated by reference to Exhibit 3.1 to
Wolverine Tube, Inc.s Quarterly Report on Form 10-Q for the period ended July 4, 1998)3.2
        
        By-laws of the Company, as amended (incorporated by reference to Exhibit 3.2 to Wolverine Tube, Inc.s Quarterly
Report on Form 10-Q for the period ended September 27, 1997)4.1
        
        Rights Agreement, dated as of February 13, 1996, between the Company and Society National Bank, as Rights Agent
(incorporated by reference to Exhibit 4.0 to Wolverine Tube, Inc.s Registration Statement on Form 8-A, filed on
February 22, 1996)4.2
        
        Indenture, dated as of August 4, 1998, between the Company and Wachovia Bank, NA (successor to First Union National
Bank) as Trustee (incorporated by reference to Exhibit 4.1 to Wolverine Tube, Inc.s Quarterly Report on Form 10-Q
for the period ended July 4, 1998)4.3
        
        Indenture, dated as of March 27, 2002, between the Company, certain of the Companys subsidiaries and Wachovia Bank,
NA (successor to First Union National Bank), as Trustee (incorporated by reference to Exhibit 4.3 to Wolverine Tube,
Inc.s Annual Report on Form 10-K for the period ended December 31, 2001)10.1
        
        Credit Agreement, dated as of March 27,
2002, among the Company, certain of the
Companys subsidiaries, the lenders
named therein, Wachovia Bank, N.A. as
Administrative Agent and Congress
Financial Corporation (Canada), as
Canadian Agent (incorporated by
reference to Exhibit 10.29 to Wolverine
Tube, Inc.s Annual Report on Form 10-K
for the period ended December 31, 2001)10.2
        
        Amendment No. 1 to Credit Agreement dated as of September 27, 2002 by and among the Company, its U.S. and Canadian
Subsidiaries and the lenders named therein (incorporated by reference to Exhibit 10.1 to Wolverine Tube, Inc.s
Quarterly Report on Form 10-Q for the period ended September 29, 2002)


49

---



---



##### Table of Contents



10.3
        
        First Amendment to Pledge Agreement dated as of August 30, 2002 by and among the Company, its U.S. Subsidiaries,
Wolverine Tube (Shanghai) Co., Ltd and Wachovia Bank, N.A. (incorporated by reference to Exhibit 10.2 to Wolverine
Tube, Inc.s Quarterly Report on Form 10-Q for the period ended September 29, 2002)10.4
        
        Joinder Agreement dated as of September 27, 2002 by and among Wolverine Joining Technologies, LLC, Small Tube
Manufacturing, LLC, Wolverine Finance, LLC, the Company and Wachovia Bank, N.A. (incorporated by reference to Exhibit
10.3 to Wolverine Tube, Incs Quarterly Report on Form 10-Q for the period ended September 29, 2002)10.5*
        
        The Companys 1991 Stock Option Plan (incorporated by reference to Exhibit 10.4 to Wolverine Tube, Inc.s
Registration Statement on Form S-1 (File No. 33-65148))10.6*
        
        Form of Non-Qualified Stock Option Agreement under the Companys 1991 Stock Option Plan (incorporated by reference
to Exhibit 10.5 to Wolverine Tube, Inc.s Registration
Statement on Form S-1 (File No. 33-65148))10.7*
        
        The Companys 1993 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 to Wolverine Tube, Inc.s
Registration Statement on Form S-1 (File No. 33-65148))10.8*
        
        The Companys 1993 Stock Option Plan for Outside Directors (incorporated by reference to Exhibit 10.8 to Wolverine
Tube, Inc.s Registration Statement on Form S-1 (File No. 33-65148))10.9*
        
        First Amendment to Amended and Restated 1993 Stock Option Plan for Outside Directors of Wolverine Tube, Inc.
(incorporated by reference to Exhibit 10.1 to Wolverine Tube, Inc.s Quarterly Report on Form 10-Q for the period
ended April 1, 2001)10.10*
        
        The Companys 2001 Stock Option Plan for Outside Directors (incorporated by reference to Appendix B to Wolverine
Tube, Inc.s Proxy Statement dated April 12, 2001)10.11*
        
        Form of Non-Qualified Stock Option
Agreement under the Companys 1993
Equity Incentive Plan (incorporated by
reference to Exhibit 10.15 to Wolverine
Tube, Inc.s Quarterly Report on Form
10-Q for the period ended July 2, 1994)


50

---



---



##### Table of Contents



10.12*
        
        Form of Indemnity Agreement (incorporated by reference to Exhibit 10.13 to Wolverine Tube, Inc.s Annual Report on
Form 10-K for the period ended December 31, 1994)10.13*
        
        Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to Wolverine Tube, Inc.s Quarterly Report on
Form 10-Q for the period ended April 3, 1999)10.14*
        
        Wolverine Tube, Inc. Supplemental Benefit Restoration Plan (Amended and Restated Effective as of January 1, 2002).
(incorporated by reference to Exhibit 10.1 to Wolverine Tube, Inc.s Quarterly Report on Form 10-Q for the period
ended June 30, 2002)10.15*
        
        Wolverine Tube, Inc. 2002 Supplemental Executive Retirement Plan (Effective as of January 1, 2002) (incorporated by
reference to Exhibit 10.2 to Wolverine Tube, Inc.s Quarterly Report on Form 10-Q for the period ended June 30, 2002)10.16*
        
        2002 Change in Control, Severance and Non-Competition Agreement by and between Wolverine Tube, Inc. and Dennis J.
Horowitz dated as of July 12, 2002 (incorporated by reference to Exhibit 10.3 to Wolverine Tube, Inc.s Quarterly
Report on Form 10-Q for the period ended June 30, 2002)10.17*
        
        2002 Change in Control, Severance and Non-Competition Agreement by and between Wolverine Tube, Inc. and James E.
Deason dated as of July 12, 2002 (incorporated by reference to Exhibit 10.4 to Wolverine Tube, Inc.s Quarterly
Report on Form 10-Q for the period ended June 30, 2002)10.18*
        
        2002 Change in Control, Severance and Non-Competition Agreement by and between Wolverine Tube, Inc. and Johann R.
Manning, Jr. dated as of July 12, 2002 (incorporated by reference to Exhibit 10.5 to Wolverine Tube, Incs Quarterly
Report on Form 10-Q for the period ended June 30, 2002)10.19*
        
        2002 Change in Control, Severance and Non-Competition Agreement by and between Wolverine Tube, Inc. and Keith Weil
dated as of July 12, 2002 (incorporated by reference to Exhibit 10.6 to Wolverine Tube, Inc.s Quarterly Report on
Form 10-Q for the period ended June 30, 2002)18.1
        
        Letter dated March 11, 2002 from Ernst & Young LLP regarding preference of a change in method of accounting for
inventories. (incorporated by reference to Exhibit 18.1 to Wolverine Tube, Inc.s Annual Report on Form 10-K for the
period ended December 31, 2001)


51

---



---



##### Table of Contents





| | * |  | Identifies each exhibit that is a
management contract or compensatory plan or arrangement
required to be included as an exhibit to this Form 10-K
pursuant to Item 14(c) of Form 10-K.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b) Reports on Form 8-K. None.

52

---



---



##### Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Huntsville, State of Alabama, on the 26th day of March 2003.

WOLVERINE TUBE, INC.

By:
        
        /s/ James E. DeasonName:   James E. Deason
Title:     Executive Vice President,
Chief Financial Officer,
Secretary and Director


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated.

Signature
        
        Title
        
        DateBy:
        
        /s/ Dennis J. HorowitzDennis J. Horowitz
        
        Chairman, President, Chief
Executive Officer and Director
(Principal Executive Officer)
        
        March 26, 2003By:
        
        /s/ James E. DeasonJames E. Deason
        
        Executive Vice President, Chief
Financial Officer, Secretary and
Director (Principal Financial Officer
and Principal Accounting Officer)
        
        March 26, 2003By:
        
        /s/ Jan K. Ver HagenJan K. Ver Hagen
        
        Director
        
        March 28, 2003By:
        
        /s/ W. Barnes HauptfuhrerW. Barnes Hauptfuhrer
        
        Director
        
        March 25, 2003By:
        
        /s/ Thomas P. EvansThomas P. Evans
        
        Director
        
        March 25, 2003By:
        
        /s/ John L. DuncanJohn L. Duncan
        
        Director
        
        March 26, 2003By:
        
        /s/ Chris A. DavisChris A. Davis
        
        Director
        
        March 28, 2003By:
        
        /s/ Gail O. NeumanGail O. Neuman
        
        Director
        
        March 25, 2003


53

---



---



##### Table of Contents



Chief Executive Officer Certification

I, Dennis J. Horowitz, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Wolverine Tube,
Inc.;
| | -- |  | ------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in
all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this annual report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing equivalent functions):
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

54

---



---



##### Table of Contents





| | 6. |  | The registrants other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 26, 2003

/s/ Dennis J. HorowitzDennis J. HorowitzChairman, President, Chief
Executive Officer and Director


55

---



---



##### Table of Contents



Chief Financial Officer Certification

I, James E. Deason, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Wolverine Tube,
Inc.;
| | -- |  | ------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in
all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this annual report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing equivalent functions):
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

56

---



---



##### Table of Contents





| | 6. |  | The registrants other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 26, 2003

/s/ James E. DeasonJames E. DeasonExecutive Vice President, Chief Financial Officer,
Secretary and Director


57

---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidated Statements of Operations

Year ended December 31,2002
        
        2001
        
        2000(In thousands except per share amounts)Net sales
        
        $
        550,523
        
        
        $
        583,114
        
        
        $
        621,464Cost of goods sold
        
        
        492,082
        
        
        
        520,874
        
        
        
        536,351Gross profit
        
        
        58,441
        
        
        
        62,240
        
        
        
        85,113Selling, general and administrative expenses
        
        
        30,616
        
        
        
        32,254
        
        
        
        31,961Restructuring and other charges
        
        
        
        
        
        
        1,546
        
        
        
        Operating income from continuing operations
        
        
        27,825
        
        
        
        28,440
        
        
        
        53,152Other (income) expenses:Interest expense, net
        
        
        19,681
        
        
        
        13,100
        
        
        
        12,168Gain on extinguishment of debt
        
        
        (1,349
        )
        
        
        
        
        
        
        Amortization and other, net
        
        
        1,008
        
        
        
        (447
        )
        
        
        417Income from continuing operations before income taxes
        
        
        8,485
        
        
        
        15,787
        
        
        
        40,567Income tax provision
        
        
        1,315
        
        
        
        4,345
        
        
        
        14,660Income from continuing operations
        
        
        7,170
        
        
        
        11,442
        
        
        
        25,907Income (loss) from discontinued operations, net of
income tax provision (benefit) of ($0.9) million,
($12.1) million and $0.5 million for 2002, 2001,
2000, respectively
        
        
        (1,610
        )
        
        
        (31,240
        )
        
        
        782Net income (loss)
        
        
        5,560
        
        
        
        (19,798
        )
        
        
        26,689Less preferred stock dividends
        
        
        (58
        )
        
        
        (280
        )
        
        
        (280
        )Net income (loss) applicable to common shares
        
        $
        5,502
        
        
        
        ($20,078
        )
        
        $
        26,409Earnings
per common share  basic:Income from continuing operations
        
        $
        0.58
        
        
        $
        0.92
        
        
        $
        2.11Income (loss) from discontinued operations
        
        
        (0.13
        )
        
        
        (2.58
        )
        
        
        0.06Net income (loss) per common share-basic
        
        $
        0.45
        
        
        
        ($1.66
        )
        
        $
        2.17Basic weighted average number of common shares
        
        
        12,231
        
        
        
        12,077
        
        
        
        12,153Earnings
per common share  diluted:Income from continuing operations
        
        $
        0.58
        
        
        $
        0.91
        
        
        $
        2.08Income (loss) from discontinued operations
        
        
        (0.13
        )
        
        
        (2.54
        )
        
        
        0.06Net income (loss) per common share-diluted
        
        $
        0.45
        
        
        
        ($1.63
        )
        
        $
        2.14Diluted weighted average number of common and common
equivalent shares
        
        
        12,362
        
        
        
        12,307
        
        
        
        12,344


See accompanying notes.

F-1

---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidated Balance Sheets

December 31,2002
        
        2001(In thousands except share and per share amounts)AssetsCurrent assetsCash and equivalents
        
        $
        53,920
        
        
        $
        22,739Accounts receivable, net
        
        
        65,212
        
        
        
        67,164Inventories
        
        
        85,485
        
        
        
        103,360Refundable income taxes
        
        
        6,347
        
        
        
        2,410Prepaid expenses and other
        
        
        8,055
        
        
        
        7,230Total current assets
        
        
        219,019
        
        
        
        202,903Property, plant and equipment, net
        
        
        208,999
        
        
        
        218,476Deferred charges, net
        
        
        13,811
        
        
        
        3,125Goodwill, net
        
        
        100,100
        
        
        
        99,870Assets held for sale
        
        
        8,791
        
        
        
        9,072Prepaid pensions
        
        
        
        
        
        
        5,981Total assets
        
        $
        550,720
        
        
        $
        539,427Liabilities, Redeemable Preferred Stock and Stockholders EquityCurrent liabilitiesAccounts payable
        
        $
        30,290
        
        
        $
        34,137Accrued liabilities
        
        
        19,293
        
        
        
        25,689Short-term borrowings
        
        
        1,217
        
        
        
        1,684Total current liabilities
        
        
        50,800
        
        
        
        61,510Deferred income taxes
        
        
        11,902
        
        
        
        9,225Long-term debt
        
        
        255,712
        
        
        
        247,698Pension liabilities
        
        
        14,540
        
        
        
        Postretirement benefit obligation
        
        
        15,666
        
        
        
        15,720Accrued environmental remediation
        
        
        1,465
        
        
        
        1,862Total liabilities
        
        
        350,085
        
        
        
        336,015Redeemable cumulative preferred stock, par value $1 per share;
500,000 shares authorized; 20,000 shares issued and outstanding at
December 31, 2001
        
        
        
        
        
        
        2,000Stockholders equityCommon stock, par value $0.01 per share; 40,000,000 shares
authorized, 14,326,239 and 14,276,831 shares issued as of
December 31, 2002 and 2001, respectively
        
        
        143
        
        
        
        143Additional paid-in capital
        
        
        103,213
        
        
        
        103,759Retained earnings
        
        
        164,547
        
        
        
        159,045Unearned compensation
        
        
        (302
        )
        
        
        (165
        )Accumulated other comprehensive loss
        
        
        (29,591
        )
        
        
        (21,898
        )Treasury stock, at cost (2,063,800 shares and 2,179,900 shares as
of December 31, 2002 and 2001, respectively)
        
        
        (37,375
        )
        
        
        (39,472
        )Total stockholders equity
        
        
        200,635
        
        
        
        201,412Total liabilities, redeemable preferred stock and stockholders equity
        
        $
        550,720
        
        
        $
        539,427


See accompanying notes.

F-2

---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidated Statements of Redeemable Preferred Stock and Stockholders Equity

Accumu-lated OtherCompre-
        
        
        
        TotalRedeemable
        
        
        
        Additional
        
        
        
        Unearned
        
        hensive
        
        
        
        Stock-Preferred Stock
        
        Common Stock
        
        Paid-In
        
        Retained
        
        Compen-
        
        Income
        
        Treasury
        
        holdersShares
        
        Amount
        
        Shares
        
        Amount
        
        Capital
        
        Earnings
        
        sation
        
        (Loss)
        
        Stock
        
        EquityIn thousands except number of shares)Balance at December 31, 1999
        
        
        20,000
        
        
        $
        2,000
        
        
        
        14,196,289
        
        
        $
        142
        
        
        $
        102,654
        
        
        $
        152,714
        
        
        $
        (309
        )
        
        $
        (10,688
        )
        
        
        ($32,014
        )
        
        $
        212,499Comprehensive income:Net income
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        26,689
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        26,689Translation adjustments
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (3,632
        )
        
        
        
        
        
        
        (3,632
        )Comprehensive income
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        23,057Common stock issued
        
        
        
        
        
        
        
        
        
        
        18,029
        
        
        
        
        
        
        
        58
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        58Tax benefit from stock
options exercised
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        3
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        3Preferred stock dividends
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (280
        )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (280
        )Issuance of restricted
stock award and
amortization of unearned
compensation
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        874
        
        
        
        
        
        
        
        (304
        )
        
        
        
        
        
        
        
        
        
        
        570Purchase of treasury stock
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (7,458
        )
        
        
        (7,458
        )Balance at December 31, 2000
        
        
        20,000
        
        
        
        2,000
        
        
        
        14,214,318
        
        
        
        142
        
        
        
        103,589
        
        
        
        179,123
        
        
        
        (613
        )
        
        
        (14,320
        )
        
        
        (39,472
        )
        
        
        228,449Comprehensive loss:Net loss
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (19,798
        )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (19,798
        )Translation adjustments
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (5,681
        )
        
        
        
        
        
        
        (5,681
        )Change in fair value of
derivatives, net of tax
benefit of $1,021
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (1,897
        )
        
        
        
        
        
        
        (1,897
        )Comprehensive loss
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (27,376
        )Common stock issued
        
        
        
        
        
        
        
        
        
        
        62,513
        
        
        
        1
        
        
        
        70
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        71Tax benefit from stock
options exercised
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        78
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        78Preferred stock dividends
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (280
        )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (280
        )Issuance of restricted
stock award and
amortization of unearned
compensation
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        22
        
        
        
        
        
        
        
        448
        
        
        
        
        
        
        
        
        
        
        
        470Balance at December 31, 2001
        
        
        20,000
        
        
        
        2,000
        
        
        
        14,276,831
        
        
        
        143
        
        
        
        103,759
        
        
        
        159,045
        
        
        
        (165
        )
        
        
        (21,898
        )
        
        
        (39,472
        )
        
        
        201,412Comprehensive income:Net income
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        5,560
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        5,560Translation adjustments
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        2,201
        
        
        
        
        
        
        
        2,201Change in fair value of
derivatives, net of tax of
$884
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        1,641
        
        
        
        
        
        
        
        1,641Minimum pension liability,
net of tax benefit of
$7,166
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (11,535
        )
        
        
        
        
        
        
        (11,535
        )Comprehensive loss
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (2,133
        )Common stock issued
        
        
        
        
        
        
        
        
        
        
        49,408
        
        
        
        
        
        
        
        89
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        89Tax benefit from stock
options exercised
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        39
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        39Redemption of preferred
stock
        
        
        (20,000
        )
        
        
        (2,000
        )
        
        
        
        
        
        
        
        
        
        
        (1,097
        )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        2,097
        
        
        
        1,000Preferred stock dividends
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (58
        )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (58
        )Issuance of restricted
stock award and
amortization of unearned
compensation
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        423
        
        
        
        
        
        
        
        (137
        )
        
        
        
        
        
        
        
        
        
        
        286Balance at December 31, 2002
        
        
        
        
        
        $
        
        
        
        
        14,326,239
        
        
        $
        143
        
        
        $
        103,213
        
        
        $
        164,547
        
        
        $
        (302
        )
        
        $
        (29,591
        )
        
        $
        (37,375
        )
        
        $
        200,635


See accompanying notes.

F-3

---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

Year ended December 31,2002
        
        2001
        
        2000(In thousands)Operating ActivitiesIncome from continuing operations
        
        $
        7,170
        
        
        $
        11,442
        
        
        $
        25,907Adjustments to reconcile income from continuing
operations to net cash provided by operating activities:Depreciation
        
        
        17,060
        
        
        
        15,022
        
        
        
        14,109Amortization
        
        
        1,356
        
        
        
        3,657
        
        
        
        2,931Deferred income taxes
        
        
        (937
        )
        
        
        (1,635
        )
        
        
        5,353Non-cash portion of restructuring and other charges
        
        
        
        
        
        
        1,531
        
        
        
        Gain on retirement of senior notes
        
        
        (1,349
        )
        
        
        
        
        
        
        Other non-cash items
        
        
        627
        
        
        
        140
        
        
        
        570Changes in operating assets and liabilities:Accounts receivable, net
        
        
        797
        
        
        
        15,873
        
        
        
        (6,072
        )Inventories
        
        
        10,564
        
        
        
        (9,956
        )
        
        
        (11,453
        )Refundable income taxes
        
        
        (15
        )
        
        
        8,530
        
        
        
        (1,415
        )Prepaid expenses and other
        
        
        (2,078
        )
        
        
        (368
        )
        
        
        1,155Accounts payable
        
        
        (702
        )
        
        
        (16,291
        )
        
        
        15,750Accrued liabilities, including pension,
postretirement benefit and environmental
        
        
        8,943
        
        
        
        (1,298
        )
        
        
        (193
        )Net cash provided by operating activities
        
        
        41,436
        
        
        
        26,647
        
        
        
        46,642Investing ActivitiesAdditions to property, plant and equipment
        
        
        (7,747
        )
        
        
        (27,612
        )
        
        
        (31,676
        )Acquisition of business assets
        
        
        
        
        
        
        
        
        
        
        (43,948
        )Other
        
        
        
        
        
        
        (1,601
        )
        
        
        16Net cash used for investing activities
        
        
        (7,747
        )
        
        
        (29,213
        )
        
        
        (75,608
        )Financing ActivitiesNet decrease in note payable
        
        
        
        
        
        
        (320
        )
        
        
        Financing fees and expenses paid
        
        
        (8,687
        )
        
        
        
        
        
        
        Net borrowing (repayment) from revolving credit facilities
        
        
        (98,372
        )
        
        
        16,724
        
        
        
        48,671Proceeds from issuance of senior notes
        
        
        118,546
        
        
        
        
        
        
        
        Retirement of senior notes
        
        
        (13,901
        )
        
        
        
        
        
        
        Principal borrowing (repayment) on long-term debt
        
        
        2,021
        
        
        
        
        
        
        
        (338
        )Issuance of common stock
        
        
        89
        
        
        
        130
        
        
        
        58Redemption of preferred stock
        
        
        (1,000
        )
        
        
        
        
        
        
        Purchase of treasury stock
        
        
        
        
        
        
        
        
        
        
        (7,458
        )Dividends paid on preferred stock
        
        
        (58
        )
        
        
        (280
        )
        
        
        (280
        )Net cash provided by (used for) financing activities
        
        
        (1,362
        )
        
        
        16,254
        
        
        
        40,653Effect of exchange rate on cash and equivalents
        
        
        874
        
        
        
        (1,139
        )
        
        
        (709
        )Net cash provided by continuing operations
        
        
        33,201
        
        
        
        12,549
        
        
        
        10,978Net cash used for discontinued operations
        
        
        (2,020
        )
        
        
        (13,268
        )
        
        
        (14,414
        )Net increase (decrease) in cash and equivalents
        
        
        31,181
        
        
        
        (719
        )
        
        
        (3,436
        )Cash and equivalents at beginning of year
        
        
        22,739
        
        
        
        23,458
        
        
        
        26,894Cash and equivalents at end of year
        
        $
        53,920
        
        
        $
        22,739
        
        
        $
        23,458Supplemental disclosure of cash flow:Interest paid
        
        $
        19,074
        
        
        $
        15,500
        
        
        $
        15,163Income taxes paid (refunded)
        
        
        ($7,359
        )
        
        
        ($2,331
        )
        
        $
        10,767


See accompanying notes.

F-4

---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Organization and Business

The accompanying consolidated financial statements include the accounts of
Wolverine Tube, Inc. (the Company) and its majority-owned subsidiaries after
elimination of significant intercompany accounts and transactions. References
to the Company, we or us refer to Wolverine Tube, Inc. and its
consolidated subsidiaries, unless the context otherwise requires.

We are engaged in the manufacturing and distribution of copper and copper alloy
tubular products, fabricated and metal joining products, as well as rod and bar
products. Our focus is developing and manufacturing high value added products
used in engineered applications that require tubular products having superior
heat transfer capability. Our major customers are primarily located in North
America and include commercial and residential air conditioning and
refrigeration equipment manufacturers, appliance manufacturers, automotive
manufacturers, industrial equipment manufacturers, utilities and other power
generating companies, refining and chemical processing companies and plumbing
wholesalers.

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires our management to
make certain estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Actual results could
differ from those estimates.

Revenue Recognition Policy

Revenues are recognized when title to our finished products transfers to an
unaffiliated customer and the risks and rewards of ownership are transferred
pursuant to shipping terms. Sales are made under normal terms and generally do
not require collateral. Appropriate provision is made for uncollectible
accounts.

Cash and Equivalents

We consider all highly liquid financial instruments with maturity of three
months or less at the time of purchase to be cash equivalents.

Inventories

Our raw materials, work-in-process and finished products inventories are
carried at the lower of FIFO cost or market. We determine market value based
upon assumptions about future demand and market conditions. The remaining
inventories, which primarily include maintenance and operating supplies, are
valued using various methods across our facilities. We write down our
inventories for estimated obsolescence and unmarketable inventory equal to the
difference between the cost of inventory and the estimated market value.

F-5

---



---



##### Table of Contents



Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is provided
using the straight-line method over the following periods:

Furniture and fixtures
        
        2-9 yearsSoftware
        
        3-5 yearsTooling
        
        3-10 yearsBuilding and improvements
        
        3-39 yearsMachinery and equipment
        
        5-30 years


Impairment of Long-Lived Assets

We recognize impairment losses on long-lived assets under the provisions of
Financial Accounting Standards Board (FASB) Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. When facts and circumstances indicate that long-lived
assets used in operations may be impaired and the undiscounted cash flows
estimated to be generated from those assets are less than their carrying
values, we record an impairment loss equal to the excess of the carrying value
over fair value. Long-lived assets held for disposal are valued at the lower
of the carrying amount or estimated fair value less cost to sell.

Income Taxes

Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of our assets and liabilities.
Property, plant and equipment, inventories, prepaid pension, postretirement
benefit obligations, and certain other accrued liabilities are the primary
sources of these temporary differences. Deferred income tax also includes
operating loss and tax credit carryforwards.

Deferred Charges

Debt issuance costs are deferred and amortized over the terms of the debt to
which they relate using the interest method. At December 31, 2002, we had
$10.6 million of debt issuance costs, net of $1.7 million of accumulated
amortization.

Goodwill

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and
Other Intangible Assets. This statement addresses financial accounting and
reporting for acquired goodwill and other intangible assets. SFAS No. 142
eliminates amortization of goodwill and requires an impairment-only model for
recording the value of goodwill. SFAS No. 142 presumes that goodwill has an
indefinite useful life and thus should not be amortized, but rather tested at
least annually for impairment using a lower of cost or fair value approach.

On January 1, 2002, we adopted SFAS No. 142. Accordingly, we ceased amortizing
all previously recorded goodwill as of that date. A transitional impairment
test of all goodwill was required within six months of adopting SFAS No. 142.
We completed the transitional impairment test of goodwill (as of January 1,
2002) required by the new rules during the second

F-6

---



---



##### Table of Contents



quarter of 2002. Based on the results of these tests, the fair value of the
tested business units exceeded the carrying value of those business units and
thus no transitional impairment charge was recorded. During the fourth quarter
of 2002, we conducted the required annual goodwill impairment review. Updated
valuations were computed using a discounted cash flow approach based on
forward-looking information regarding market share, revenues and costs for each
business unit. Our valuation was based on a 4% to 5% long-term growth rate, a
discount rate of 12% and two reporting units, The Tube Group and The Non-Tube
Group. The Tube Group consists of our Decatur, Shawnee, Jackson, Booneville,
Montreal, London, Shanghai and Esposende facilities for which we have $23.2
million of goodwill. The Non-Tube Group consists of our Altoona, Carrollton,
Warwick, Ardmore and Apeldoorn facilities for which we have $76.9 million of
goodwill. Based on the results of this review, the fair value of the tested
business units exceeded the carrying value of those business units and thus no
impairment charge was recorded. If we are unable to achieve our estimated
growth rates and profit projections, if interest rates increase or if our other
estimates or their related assumptions change in the future, we may be required
to record impairment charges for these assets in the future.

At December 31, 2002, we had $100.1 million of goodwill, net of $18.6 million
of accumulated amortization. The increase in goodwill during 2002 results from
the translation of the goodwill of our distribution center in The Netherlands
whose functional currency is the Euro.

Income from continuing operations for 2001 and 2000, adjusted to exclude
amortization expense recognized related to goodwill would have been $14.1
million, or $1.13 per diluted share and $28.2 million or $2.27 per diluted
share, respectively. Including the loss from discontinued operations, the net
loss for 2001 adjusted to exclude amortization expense related to goodwill
would have been $(16.9) million, or $(1.39) per diluted share. Net income for
2000 adjusted to exclude amortization expense related to goodwill would have
been $29.2 million, or $2.34 per diluted share.

Earnings Per Common Share

Basic income from continuing operations and basic net income per share is based
on the weighted average number of common shares outstanding and income reduced
by preferred dividends. Diluted income from continuing operations and diluted
net income per share is based on the weighted average number of common shares
outstanding plus the effect of dilutive stock options and income reduced by
preferred dividends.

Derivatives and Hedging Activities

We utilize derivative financial instruments to manage risk exposure to
movements in interest, commodity and foreign exchange rates. We do not hold or
issue derivative financial instruments for trading or speculative purposes. In
June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities, which was amended in June 2000 by SFAS Nos. 137 and
138. SFAS No. 133, as amended, establishes accounting and reporting standards
for derivative instruments and hedging activities. Initially, upon adoption of
the new derivative accounting requirements, and prospectively, on the date we
enter into a derivative contract, we designate derivatives as either a hedge of
a recognized asset or liability or an unrecognized firm commitment (fair value
hedge) or a hedge of a forecasted transaction (cash flow hedge). For fair
value hedges, both the effective and ineffective portion of the changes in the
fair value of the

F-7

---



---



##### Table of Contents



derivative, along with the gain or loss on the hedged item that is attributable
to the hedged risk, are recorded in earnings. The effective portion of changes
in fair value of a derivative that is designated as a cash flow hedge is
recorded in accumulated other comprehensive income or loss. When the hedged
item is realized, the gain or loss included in accumulated other comprehensive
income or loss is relieved. Any ineffective portion of the changes in the fair
values of derivatives used as cash flow hedges are reported in the consolidated
statements of operations. We document hedge relationships, including
identification of the hedging instruments and the hedged item, as well as our
risk management objectives and strategies for undertaking the hedge
transactions at the inception of each hedge transaction. Derivatives are
recorded in the consolidated balance sheet at fair value. We formally assess,
at inception and at least quarterly thereafter, whether the derivatives that
are used in hedging transactions are highly effective in offsetting change in
either the fair values or cash flows of the hedged item.

Fair Values of Financial Instruments

We use the following methods in estimating fair value disclosures for financial
instruments:

Cash and equivalents, accounts receivable and accounts payable:The carrying
amount reported in the consolidated balance sheets for these assets
approximates their fair value.

Revolving credit facility, long-term debt and redeemable cumulative preferred
stock: The carrying amount of our borrowings under our revolving credit
facilities approximates fair value. The fair value of our 7.375% Senior Notes
and our 10.5% Senior Notes and any derivative financial instruments are based
upon quoted market prices. The fair value of our redeemable cumulative
preferred stock is based upon its dividend rate and call provisions.

Derivatives:The fair value of our interest rate, foreign currency and
commodity derivative instruments are determined by reference to quoted market
prices.

The following table summarizes fair value information for our financial
instruments:

2002
        
        2002
        
        2001
        
        2001Assets (liabilities)
        
        Carrying value
        
        Fair value
        
        Carrying value
        
        Fair value(In thousands)Revolving credit facilities
        
        $
        
        
        
        $
        
        
        
        $
        (97,906
        )
        
        $
        (97,906
        )Senior notes
        
        
        (253,317
        )
        
        
        (246,200
        )
        
        
        (149,792
        )
        
        
        (127,500
        )Other debt
        
        
        (3,239
        )
        
        
        (3,239
        
        
        
        (1,684
        )
        
        
        (1,684
        )Redeemable cumulative preferred stock
        
        
        
        
        
        
        
        
        
        
        (2,000
        )
        
        
        (2,019
        )Interest rate swap
        
        
        373
        
        
        
        373
        
        
        
        
        
        
        
        Foreign currency exchange contracts
        
        
        (80
        )
        
        
        (80
        )
        
        
        (9
        )
        
        
        (9
        )Commodity futures contracts
        
        
        416
        
        
        
        416
        
        
        
        (2,918
        )
        
        
        (2,918
        )


F-8

---



---



##### Table of Contents



Environmental Expenditures

Environmental expenditures that pertain to our current operations and relate to
future revenues are expensed or capitalized consistent with our capitalization
policy. Expenditures that result from the remediation of an existing condition
caused by past operations, that do not contribute to future revenues, are
expensed. Liabilities, which are undiscounted, are recognized for remedial
activities when the cleanup is probable and the cost can be reasonably
estimated.

Stock Options

At December 31, 2002, we had stock-based employee and outside director
compensation plans, which are described more fully in Note 18. We account for
these plans under the recognition and measurement principles of APB Opinion No.
25, Accounting for Stock Issued to Employees, and related interpretations. No
stock-based employee or outside director compensation cost is reflected in net
income, as all options granted under those plans had an exercise price equal to
the market value of the underlying common stock on the date of grant.

Net income and earnings per share as if we had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation, to stock-based employee and outside director compensation are as
follows:

2002
        
        2001
        
        2000(In thousands, except per share amounts)Net income applicable to common shares, as reported
        
        $
        5,502
        
        
        $
        (20,078
        )
        
        $
        26,409Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects
        
        
        (2,246
        )
        
        
        (2,833
        )
        
        
        (3,228
        )Pro forma net income applicable to common shares
        
        $
        3,256
        
        
        $
        (22,911
        )
        
        $
        23,181Earnings per share:Basic  as reported
        
        $
        0.45
        
        
        $
        (1.66
        )
        
        $
        2.17Basic  pro forma
        
        $
        0.27
        
        
        $
        (1.90
        )
        
        $
        1.91Diluted  as reported
        
        $
        0.45
        
        
        $
        (1.63
        )
        
        $
        2.14Diluted  pro forma
        
        $
        0.27
        
        
        $
        (1.89
        )
        
        $
        1.91


Translation to U.S. Dollars

Our assets and liabilities denominated in foreign currency are translated to
U.S. dollars at rates of exchange at the balance sheet date. Income statement
items are translated at average exchange rates during the period. Translation
adjustments arising from changes in exchange rates are included in the
accumulated other comprehensive loss component of stockholders equity.
Realized exchange gains and losses are included in Amortization and other,
net in the consolidated statements of operations. Exchange (gains) losses
netted to zero in 2002, $(0.5) million in 2001 and $(0.1) million in 2000.

F-9

---



---



##### Table of Contents



Research and Development Costs

Expenditures relating to the development of new products and processes,
including significant improvements and refinements to existing products, are
expensed as incurred. The amounts charged to expense were $3.1 million in
2002, $3.7 million in 2001 and $3.7 million in 2000.

Recent Accounting Pronouncements

In June 2002, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard (SFAS) No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 nullifies Emerging
Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)and requires that a liability for a
cost associated with an exit or disposal activity be recognized and measured
initially at fair value in the period in which the liability is incurred.
Under EITF No. 94-3, a liability for an exit cost was recognized at the date of
an entitys commitment to an exit plan. The adoption of SFAS No. 146 is
expected to result in delayed recognition for certain types of costs as
compared to the provisions of EITF 94-3. SFAS No. 146 is effective for new
exit or disposal activities that are initiated after December 31, 2002, and
does not affect amounts currently reported in our consolidated financial
statements. SFAS No. 146 will affect the types and timing of costs included in
future restructuring programs, if any, but is not expected to have a material
impact on our financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44 and No. 64, Amendment of FASB Statement No. 13, and Technical
Corrections, which updates, clarifies and simplifies existing accounting
pronouncements. SFAS No. 4, which required all gains and losses from the
extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of related tax effect, was rescinded. The FASB
encouraged early adoption of the provisions of SFAS No. 145 related to the
rescission of SFAS No. 4 and thus we adopted these provisions in the third
quarter of 2002 and for the year 2002 are reporting a $1.3 million gain on
extinguishment of debt as a separate line item in income from continuing
operations.

2. Discontinued Operations

In December 2001, the Executive Committee of the Board of Directors authorized
management to discontinue the operations of Wolverine Ratcliffs, Inc. (WRI),
which was a 74.5% owned strip business that was jointly formed in 1999 with
Ratcliffs-Severn, Ltd. In 2002, we acquired the remaining 25.5% interest in
WRI and merged WRI into Wolverine Tube (Canada), Inc. to facilitate the
liquidation of the business. WRI, which was previously included in the rod,
bar, and other reportable segment, produced both heavy-gauge and light-gauge
copper and copper alloy strip used primarily by automotive, hardware and
electrical equipment manufacturers. Our decision to discontinue the WRI
operations was due to adverse changes in market conditions that made it
unlikely for us to produce an acceptable return on investment that would
enhance shareholder value. We engaged a financial advisor to pursue
opportunities to dispose of the business but we were not able to dispose of the
business as a going concern and subsequently commenced liquidation of the
business during 2002. As of December 31, 2002, substantially all

F-10

---



---



##### Table of Contents



of the inventory and net receivables were liquidated as well as some of the
equipment. We are continuing to pursue opportunities to dispose of the
remainder of the equipment and the building.

Accordingly, as required by Accounting Principles Board Opinion, (APB) 30,
Reporting the Results of Operations, Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions, the operating results of WRI for all periods presented
herein are reported in discontinued operations in the consolidated financial
statements. In addition, in the fourth quarter of 2001 we recorded a $31.5
million ($23.9 million after tax) estimated loss on the disposal of the WRI
operations, which included a $2.5 million ($1.6 million after tax) provision
for estimated losses during the expected phase-out period. The expected loss
on disposal of the WRI operations and the expected operating losses during the
phase-out period were based on our best estimates of the most likely outcome,
considering, among other things, our knowledge of valuations of strip
production assets. In the fourth quarter of 2002, we recorded a $2.5 million
($1.6 million after tax) loss from discontinued operations for remaining
estimated closing costs in excess of the provision for losses recorded in the
fourth quarter of 2001. We have realized approximately $10 million of pretax
proceeds from the realization or sale of the assets of the business, net of our
cash payments to settle the liabilities of the discontinued operations during
the twelve months ended December 31, 2002, the majority of which is recorded in
continuing operations in that certain accounts receivable and inventories were
transferred to continuing operations. As is reflected on the Consolidated
Statements of Cash Flows, discontinued operations used $2.0 million of cash,
consisting of a $1.5 million net use of cash from operations and the sale of
assets and $0.5 million of additions to property, plant and equipment.

Operating results of the discontinued WRI operations for 2002, which were
charged to previously established reserves, 2001 and 2000 are as follows:

2002
        
        2001
        
        2000(In thousands)Net sales
        
        $
        12,063
        
        
        $
        48,886
        
        
        $
        79,875Income (loss) before income tax benefit
        
        $
        (3,209
        )
        
        $
        (11,882
        )
        
        $
        1,289Income tax provision (benefit)
        
        
        (851
        )
        
        
        (4,507
        )
        
        
        507Net income (loss)
        
        $
        (2,358
        )
        
        $
        (7,375
        )
        
        $
        782


Assets and liabilities of the discontinued WRI operations have been reflected
in the consolidated balance sheets as current or non-current based on the
original classification of these accounts, net of any necessary valuation
allowances, except that property, plant and equipment of the WRI operations to
be disposed in the amount of $3.4 million, net of a necessary valuation
allowance, have been included in assets held for sale. The accrual at
December 31, 2002 for the estimated losses to be incurred of $2.5 million
(pre-tax) is presented in accrued liabilities in the consolidated balance
sheets.

F-11

---



---



##### Table of Contents



Net assets (liabilities) of the discontinued WRI operations are as follows:

December 31, 2002
        
        December 31, 2001(In thousands)Cash and equivalents
        
        $
        44
        
        
        $
        2,165Other current assets
        
        
        880
        
        
        
        11,996Assets held for sale
        
        
        3,363
        
        
        
        3,691Deferred income taxes
        
        
        
        
        
        
        11,935Other assets
        
        
        122
        
        
        
        192Current liabilities
        
        
        (5,218
        )
        
        
        (12,626
        )Other liabilities
        
        
        
        
        
        
        (75
        )Net
assets (liabilities) of discontinued operations
        
        $
        (809
        )
        
        $
        17,278


We do not believe that there are any material contingent liabilities related to
discontinued operations, such as product or environmental liabilities or
litigation, that are expected to remain with us after the disposal of the WRI
operations.

3. Inventories

Inventories are as follows at December 31:

2002
        
        2001(In thousands)Finished products
        
        $
        25,750
        
        
        $
        22,565Work-in-process
        
        
        16,027
        
        
        
        20,850Raw materials and supplies
        
        
        43,708
        
        
        
        59,945Totals
        
        $
        85,485
        
        
        $
        103,360


4. Prepaid Expenses and Other

Prepaid expenses and other are as follows at December 31:

2002
        
        2001(In thousands)Prepaid expenses
        
        $
        4,556
        
        
        $
        3,195Deferred tax assets
        
        
        2,886
        
        
        
        2,932Other assets recording
the fair value of hedging
instruments
        
        
        613
        
        
        
        1,103Totals
        
        $
        8,055
        
        
        $
        7,230


5. Derivatives

We adopted Statement of Financial Accounting Standard (SFAS) No. 133
(subsequently amended by SFAS Nos. 137 and 138), Accounting for Derivative
Instruments and Hedging Activities, on January 1, 2001. The adoption of SFAS
No. 133 resulted in an insignificant impact

F-12

---



---



##### Table of Contents



on reported earnings and accumulated other comprehensive loss. At December 31,
2002 and 2001, we reported an unrealized loss of $0.4 million ($0.3 million,
net of tax) and $2.9 million ($1.9 million, net of tax), respectively, in
accumulated other comprehensive loss for our outstanding commodity hedge
contracts.

We have entered into commodity forward contracts through March 2004 to hedge
against the risk of copper price increases with respect to firm price sales
commitments. The notional amount of these forward contracts, which were
designated as fair value hedging instruments, was $12.4 million at December 31,
2002. In comparison, at December 31, 2001, we had entered into commodity
forward contracts through December 31, 2003 that were designated as fair value
hedging instruments and had a notional amount of $17.3 million. For the twelve
months ended December 31, 2002 and 2001, an insignificant impact to cost of
goods sold was recorded for the ineffective portion of these derivative
instruments.

Also, we have entered into commodity forward contracts through December 31,
2003 to reduce our risk of future copper price increases on anticipated sales.
The notional amount of these forward contracts, which were designated as cash
flow hedging instruments, was $20.9 million at December 31, 2002. At December
31, 2002, we recorded the fair value of these forward contracts of $0.5 million
($0.3 million, net of tax) in accrued liabilities and in accumulated other
comprehensive loss. We expect that $0.5 million ($0.3 million, net of tax) of
the unrealized loss on our outstanding forward contracts will be reclassified
to earnings during the next twelve months when the anticipated transactions
occur. In comparison, at December 31, 2001, we had entered into commodity
forward contracts through December 31, 2003 that were designated as cash flow
hedging instruments and had a notional amount of $28.8 million. At December
31, 2001, we recorded the fair value of these forward contracts of $2.7 million
($1.7 million, net of tax) in accrued liabilities and in accumulated other
comprehensive loss. For the twelve months ended December 31, 2002 and 2001, an
insignificant impact to cost of goods sold was recorded for the ineffective
portion of these derivative instruments.

Additionally, we have entered into commodity forward contracts to sell copper
in March 2003 with a notional value of $24.4 million and in December 2003 with
a notional value of $10.6 million. We entered these forward contracts in
order to mitigate the impact of fluctuating copper prices with regard to the
valuation of our inventory balances. These forward contracts were not
designated as effective hedges and therefore they are marked to market each
month and the gains and losses are recorded in cost of goods sold. At December
31, 2002, we recorded the fair value of these forward contracts of $0.8 million
($0.5 million, net of tax) as a reduction to accrued expense and cost of sales.

At December 31, 2002, we had commodity futures to purchase natural gas for the
period of February 2003 through March 2003 with a notional value of $0.5
million. These futures contracts were designated as cash flow hedging
instruments and there was no ineffective portion of the change in fair value of
these future contracts for the period ended December 31, 2002. At December 31,
2002, we recorded the fair value of these instruments of $0.1 million ($0.1
million, net of tax) in other assets and as accumulated other comprehensive
income. In comparison, at December 31, 2001, we had commodity futures to
purchase natural gas for the period of February 2002 through October 2002 that
were designated as cash flow hedging instruments and had a notional value of
$1.4 million. At December 31, 2001, we recorded the

F-13

---



---



##### Table of Contents



fair value of these instruments of $0.2 million ($0.2 million, net of tax) in
accrued liabilities and accumulated other comprehensive loss and there was no
ineffective portion of the change in fair value of these futures contracts.

At December 31, 2002, we had forward exchange contracts outstanding to purchase
foreign currency with a notional value of $1.1 million and to sell foreign
currency with a notional value of $1.2 million. At December 31, 2001, we had
forward exchange contracts outstanding to purchase foreign currency with a
notional value of $1.4 million and to sell foreign currency with a notional
value of $1.0 million. These forward contracts and the underlying hedged
receivables and payables are carried at their fair values with any associated
gains and losses recognized in current period earnings. The impact on reported
earnings of recording the fair value of these hedging instruments and the
underlying hedged receivables and payables for the period ended December 31,
2002 and December 31, 2001 was not significant.

In October 2002, we completed an interest rate swap on $50.0 million notional
amount of our 7.375% Senior Notes. The terms of the interest rate swap are a
semi-annual payment date of February 1 and August 1, a floating rate option of
the six-month LIBOR rate plus a spread of 3.76% and a termination date of
August 1, 2008. The interest rate swap is accounted for in accordance with
SFAS No. 133 (subsequently amended by SFAS No. 137 and 138) Accounting For
Derivative Instruments and Hedging Activitiesas a fair value hedge and because
the terms of the debt and the payments to be received on the swap coincide, the
hedge is considered perfectly effective against the changes in the fair value
of the debt over its term. The swap agreement was executed in order to (i)
convert a portion of the Senior Notes fixed-rate debt into floating-rate debt;
(ii) maintain a capital structure containing appropriate amounts of fixed and
floating-rate debt; and (iii) reduce net interest payments and expense in the
near-term. As of December 31, 2002, we recorded the fair market value of the
interest rate swap of $0.4 million as other assets with a corresponding
increase to the hedged debt, with equal and offsetting unrealized gains and
losses included in other income (expense), net. Interest payments are
recognized through interest expense and are made and received on the first day
of each February and August, commencing February 1, 2003 and ending on the
maturity date. Since the interest rate is not known until the end of each
semi-annual interest period, estimates are used during such period based upon
published forward-looking LIBOR rates. Any differences between the estimated
interest expense and the actual interest payment are recorded to interest
expense at the end of each semi-annual interest period. The interest rate swap
resulted in a reduction of interest expense in 2002 of $0.3 million.

6. Assets Held for Sale

Assets held for sale at December 31, 2002 and 2001 include the net assets of
our unoccupied Roxboro, North Carolina facility and the discontinued operations
of WRI, both of which have been written down to their estimated fair value less
cost to sell ($8.8 million) based on our knowledge of the valuations of these
assets and in light of their appraised value. The net assets of our
unoccupied Greenville, Mississippi facility were fully reserved at December 31,
2001 and in December 2002 we donated these assets to Washington County,
Mississippi. Although we believe we have appropriately reduced the carrying
values of all assets held for sale to their estimated recoverable amounts, net
of disposal costs where appropriate, actual results could be

F-14

---



---



##### Table of Contents



different and our result of operations in future periods could reflect gains or
losses on these assets.

7. Property, Plant and Equipment

Property, plant and equipment are as follows at December 31:

2002
        
        2001(In thousands)Land and improvements
        
        $
        11,573
        
        
        $
        11,537Building and improvements
        
        
        49,096
        
        
        
        48,820Machinery and equipment
        
        
        276,200
        
        
        
        268,587Construction-in-progress
        
        
        3,207
        
        
        
        6,430340,076
        
        
        
        335,374Less accumulated depreciation
        
        
        (131,077
        )
        
        
        (116,898
        )Totals
        
        $
        208,999
        
        
        $
        218,476


8. Deferred Charges

Deferred charges are as follows at December 31:

2002
        
        2001(In thousands)Deferred debt issuance cost
        
        $
        10,616
        
        
        $
        2,130Patents and other
        
        
        3,800
        
        
        
        3,685Unrecognized prior service cost for pensions
        
        
        3,250
        
        
        
        17,666
        
        
        
        5,815Less accumulated amortization
        
        
        (3,855
        )
        
        
        (2,690
        )Totals
        
        $
        13,811
        
        
        $
        3,125


Deferred charges other than unrecognized prior service cost for pensions are
subject to amortization. Deferred debt issuance cost increased in 2002 due to
the issuance of $120 million in principal amount of 10.5% Senior Notes. Net
deferred debt issuance cost of $8.9 million will be amortized over a weighted
average of 6.2 years resulting in $1.4 million of amortization expense in each
of the five succeeding years beginning in 2003. In 2002, 2001 and 2000, we
recorded $1.4 million, $0.6 million and $0.4 million of amortization expense
related to deferred charges.

F-15

---



---



##### Table of Contents



9. Accrued Liabilities

Accrued liabilities are as follows at December 31:

|                                                |  |      |        |      |  |   |        | 
|----------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                                |  | 2002 |        | 2001
|                                                |  |      |        |     
|(In thousands)                                  |  |      |        |      |  |   |        | 
|Interest                                        |  | $    | 7,232  |      |  | $ | 4,780  | 
|Accrued liabilities for discontinued operations |  |      | 2,900  |      |  |   | 9,280  | 
|Other                                           |  |      | 9,161  |      |  |   | 11,629 | 
|                                                |  |      |        |      |  |   |        | 
|Totals                                          |  | $    | 19,293 |      |  | $ | 25,689 | 
|                                                |  |      |        |      |  |   |        | 

10. Financing Arrangements and Debt

Long-term debt consists of the following at December 31:

|                                                                                                                                                                                                                             |  |   |  |  |  |      |         |      |  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - |  |  |  | ---- | ------- | ---- |  | - | ------- | -
|                                                                                                                                                                                                                             |  |   |  |  |  | 2002 |         | 2001
|                                                                                                                                                                                                                             |  |   |  |  |  |      |         |     
|(In thousands)                                                                                                                                                                                                               |  |   |  |  |  |      |         |      |  |   |         |  
|Revolving Credit facility, interest tied
to banks base rate or alternative rates,
averaged 5.5% in 2001, due April 2002
(refinanced on March 27, 2002 from the
proceeds of $120 million 10.5% Senior
Notes described below) |  | $ |  |  |  |      |        |      |  | $ | 97,906  |  
|Senior Notes, 10.5%, due April 2009                                                                                                                                                                                          |  |   |  |  |  |      | 118,000 |      |  |   |        |  
|Discount on 10.5% Senior Notes, original
issue discount amortized over 7 years                                                                                                                                               |  |   |  |  |  |      | (1,272  | )    |  |   |        |  
|Senior Notes, 7.375%, due August 2008                                                                                                                                                                                        |  |   |  |  |  |      | 137,123 |      |  |   | 150,000 |  
|Discount on 7.375% Senior Notes, original
issue discount amortized over 10 years                                                                                                                                             |  |   |  |  |  |      | (161    | )    |  |   | (208    | )
|Netherlands facility, 5.13%, due on demand                                                                                                                                                                                   |  |   |  |  |  |      | 1,205   |      |  |   | 1,671   |  
|Other foreign facilities                                                                                                                                                                                                     |  |   |  |  |  |      | 2,034   |      |  |   | 13      |  
|                                                                                                                                                                                                                             |  |   |  |  |  |      |         |      |  |   |         |  
|                                                                                                                                                                                                                             |  |   |  |  |  |      | 256,929 |      |  |   | 249,382 |  
|Less short-term borrowings                                                                                                                                                                                                   |  |   |  |  |  |      | (1,217  | )    |  |   | (1,684  | )
|                                                                                                                                                                                                                             |  |   |  |  |  |      |         |      |  |   |         |  
|Totals                                                                                                                                                                                                                       |  |   |  |  |  | $    | 255,712 |      |  | $ | 247,698 |  
|                                                                                                                                                                                                                             |  |   |  |  |  |      |         |      |  |   |         |  

Aggregate maturities of long-term debt are as follows:

|               |  |   |         | 
|-------------- |  | - | ------- | 
|(In thousands)
|2003           |  | $ | 1,217   | 
|2004           |  |   | 405     | 
|2005           |  |   | 405     | 
|2006           |  |   | 405     | 
|After 2006     |  |   | 254,497 | 
|               |  |   |         | 
|Totals         |  | $ | 256,929 | 
|               |  |   |         | 

On March 27, 2002, we obtained new financing agreements to replace our old
revolving credit facility which was scheduled to mature on April 30, 2002. We
issued $120 million in principal amount of 10.5% Senior Notes that will mature
in 2009. The 10.5% Senior Notes were issued pursuant to an Indenture, dated as
of March 27, 2002, between us and First Union National Bank, as Trustee. The
10.5% Senior Notes (i) have interest payment dates of April 1 and October 1 of
each year; (ii) are redeemable after the dates and at the prices (expressed in
percentages of principal amount on the redemption date), as set forth below:

F-16



---



---



##### Table of Contents



|                             |  |            |         |  
|---------------------------- |  | ---------- | ------- | -
|Year                         |  | Percentage
|                             |  |           
|April 1, 2006                |  |            | 105.250 | %
|April 1, 2007                |  |            | 102.625 | %
|April 1, 2008 and thereafter |  |            | 100.000 | %

(iii)  are senior unsecured obligations and are senior in right of payment to
any of our future subordinated obligations, (iv) are guaranteed by certain of
our subsidiaries and (v) are subject to the terms of the indenture governing
our 10.5% Senior Notes, which contain certain covenants, including covenants
that limit our ability to incur indebtedness, make certain restricted payments
and dispose of certain assets.

We also entered into a new secured revolving credit facility concurrently with
the closing of the 10.5% Senior Notes offering. The new revolving credit
facility provides for up to a $37.5 million line of credit dependent on the
levels of and secured by our eligible accounts receivable and inventory. The
new revolving credit facility provides for interest at the Eurodollar rate plus
2.5% or the U.S. base rate plus 1%. Commitment fees on the unused available
portion of the facility are 0.5%. The new revolving credit facility matures on
March 27, 2005.

As of December 31, 2002, we had no outstanding obligations under our secured
revolving credit facility. We had approximately $5.6 million of standby
letters of credit outstanding that are collateralized with the secured
revolving credit facility and approximately $31.9 million (subject to a $2
million excess availability requirement) in additional borrowing availability
thereunder.

Because we used proceeds from our new long-term financing agreements to
refinance the 2002 maturities on our old revolving credit facility, we have
reclassified all outstanding borrowings under our old facility as non-current
in our consolidated balance sheet as of December 31, 2001.

In August 1998, we issued $150 million in principal amount of 7.375% Senior
Notes due August 1, 2008. The 7.375% Senior Notes were issued pursuant to an
Indenture, dated as of August 4, 1998, between us and First Union National
Bank, as Trustee. The 7.375% Senior Notes (i) have interest payment dates of
February 1 and August 1 of each year (ii) are redeemable at our option at a
redemption price equal to the greater of (a) 100% of the principal amount of
the Senior Notes to be redeemed, or (b) the sum of the present value of the
remaining scheduled payments of principal and interest thereon from the
redemption date to the maturity date, discounted to the redemption date on a
semiannual basis at a rate based upon the yield of the specified treasury
securities plus 25 basis points, plus, in each case, accrued interest thereon
to the date of redemption; (iii) are senior unsecured obligations and are pari
passuin right of payment with any of our existing and future senior unsecured
indebtedness, including borrowings under the Facility; (iv) are guaranteed by
certain of our subsidiaries; and (v) are subject to the terms of the Indenture,
which contain certain covenants that limit our ability to incur indebtedness
secured by certain liens and to engage in sale/leaseback transactions.

Our financing agreements contain covenants that include requirements to
maintain certain financial ratios and other restrictions and limitations,
including the restrictions on our payment of

F-17



---



---



##### Table of Contents



dividends, limitations on the issuance of additional debt, limitations on
investments and contingent obligations, the redemption of capital stock and the
sale or transfer of assets.

We have a credit facility with a Netherlands bank, payable on demand and
providing for available credit up to 1.8 million euros (approximately U.S. $1.8
million). At December 31, 2002 and December 31, 2001, we had outstanding
borrowings of $1.2 million and $1.7 million, respectively, under this facility.

In 2002, we obtained an interest free loan from the Portuguese Government in
the amount of $1.9 million euros which equates to $2.0 million U.S. dollars at
December 31, 2002. The loan provides for repayment beginning in 2004 in
installments approximating $405,000 U.S. dollars annually based on current
exchange rates. The loan matures in July 2008 and, depending on certain
performance criteria of our Portugal facility, the Portuguese Government could
provide a cash grant to fund the repayment of a portion of the loan.

Interest expense is net of interest income and capitalized interest of $0.5
million and $0.7 million in 2002, $0.6 million and $1.1 million in 2001 and
$1.2 million and $1.3 million in 2000. Interest expense is also net of
interest income from loans to the discontinued operations of WRI of $0.8
million in 2002, $1.3 million in 2001 and $0.5 million in 2000.

In October 2002, we completed an interest rate swap on $50.0 million notional
amount of our 7.375% Senior Notes. The terms of the interest rate swap are a
semi-annual payment date of February 1 and August 1, a floating rate option of
the six-month LIBOR rate plus a spread of 3.76% and a termination date of
August 1, 2008. The interest rate swap resulted in a reduction to interest
expense in 2002 of $0.3 million.

11. Retirement and Pension Plans

U.S. Qualified Retirement Plan

We have a U.S. Retirement Plan that is a trusteed, noncontributory defined
benefit pension plan covering the majority of all our U.S. employees fulfilling
minimum age and service requirements. Benefits are based upon years of service
and a prescribed formula based upon the employees compensation. We contribute
annual amounts that fall within the range determined to be deductible for
federal income tax purposes.

On December 31, 2002, our annual measurement date, the accumulated benefit
obligation for our U.S. Retirement Plan exceeded the fair value of pension plan
assets. This difference is primarily due to a decline in the fair value of the
plan assets due to a sharp decrease in the equity markets at December 31, 2002.
As a result and in accordance with SFAS No. 87, we recognized an additional
minimum pension liability of $17.7 million, recorded a charge to accumulated
other comprehensive loss of $16.6 million which decreased stockholders equity
and recognized an intangible asset of $1.1 million included in deferred
charges, net equal to the amount of unrecognized prior service cost. To record
the $17.7 million additional minimum pension liability, we decreased prepaid
pension assets by $9.9 million and recorded a $7.8 million pension liability.
In conjunction with the recognition of the additional minimum pension
liability, we also recorded a deferred tax asset and accumulated other
comprehensive income of $6.5 million.

F-18



---



---



##### Table of Contents



The accumulated benefit obligation at December 31, 2002 was $122.7 million.
The amounts recognized in the Consolidated Balance Sheets before taxes are as
follows:

|                                     |  |      |        |      |  |   |       | 
|------------------------------------ |  | ---- | ------ | ---- |  | - | ----- | 
|                                     |  | 2002 |        | 2001
|                                     |  |      |        |     
|(In thousands)                       |  |      |        |      |  |   |       | 
|Prepaid benefit cost                 |  | $    |       |      |  | $ | 6,242 | 
|Accrued benefit liability            |  |      | (7,843 | )    |  |   |      | 
|Intangible asset                     |  |      | 1,123  |      |  |   |      | 
|Accumulated other comprehensive loss |  |      | 16,582 |      |  |   |      | 
|                                     |  |      |        |      |  |   |       | 
|Net amount recognized                |  | $    | 9,862  |      |  | $ | 6,242 | 
|                                     |  |      |        |      |  |   |       | 

Certain assumptions utilized in accounting for the U.S. Retirement Plan for the
years ended December 31 are as follows:

|                                 |  |      |      |      |  |      |      |   |  |  |      |  
|-------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                 |  | 2002 |      | 2001 |  | 2000
|                                 |  |      |      |      |  |     
|Discount rate                    |  |      | 7.00 | %    |  |      | 7.25 | % |  |  | 7.75 | %
|Rate of increase in compensation |  |      | 3.5  |      |  |      | 4.0  |   |  |  | 4.0  |  
|Expected return on plan assets   |  |      | 9.0  |      |  |      | 9.5  |   |  |  | 9.5  |  

A summary of the components of net periodic pension cost for the U.S.
Retirement Plan for the years ended December 31 is as follows:

|                                    |  |      |         |      |  |      |         |   |  |   |         |  
|----------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                    |  | 2002 |         | 2001 |  | 2000
|                                    |  |      |         |      |  |     
|(In thousands)                      |  |      |         |      |  |      |         |   |  |   |         |  
|Service cost                        |  | $    | 3,991   |      |  | $    | 3,859   |   |  | $ | 3,324   |  
|Interest cost                       |  |      | 9,087   |      |  |      | 9,045   |   |  |   | 8,494   |  
|Expected return on plan assets      |  |      | (11,835 | )    |  |      | (12,613 | ) |  |   | (12,817 | )
|Amortization of prior service cost  |  |      | 136     |      |  |      | 134     |   |  |   | 134     |  
|Amortization of net actuarial gain  |  |      |        |      |  |      |        |   |  |   | (602    | )
|                                    |  |      |         |      |  |      |         |   |  |   |         |  
|Net periodic pension cost (benefit) |  | $    | 1,379   |      |  | $    | 425     |   |  |   | ($1,467 | )
|                                    |  |      |         |      |  |      |         |   |  |   |         |  

The following table sets forth a reconciliation of the projected benefit
obligation for the years ended December 31:

|                                                |  |      |         |      |  |   |         |  
|----------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                |  | 2002 |         | 2001
|                                                |  |      |         |     
|(In thousands)                                  |  |      |         |      |  |   |         |  
|Benefit obligation at the beginning of the year |  | $    | 134,387 |      |  | $ | 118,177 |  
|Service costs                                   |  |      | 3,991   |      |  |   | 3,859   |  
|Interest costs                                  |  |      | 9,087   |      |  |   | 9,045   |  
|Amendments                                      |  |      | 33      |      |  |   |        |  
|Actuarial loss (gain)                           |  |      | (8,526  | )    |  |   | 9,628   |  
|Benefits paid                                   |  |      | (6,840  | )    |  |   | (6,322  | )
|                                                |  |      |         |      |  |   |         |  
|Benefit obligation at the end of the year       |  | $    | 132,132 |      |  | $ | 134,387 |  
|                                                |  |      |         |      |  |   |         |  

The actuarial gain for the year ended December 31, 2002 was comprised of three
components: (i) $10.0 million gain attributable to actual salary and
personnel experience that is mostly related to a 10% pay decrease for salaried
participants for six months during 2001 and 2002; (ii) $3.0

F-19



---



---



##### Table of Contents



million gain due to the change in the rate of compensation increases from 4.0%
to 3.5%; and (iii) $4.5 million loss due to the change in the discount rate
from 7.25% to 7.0%. For the year ended December 31, 2001, the effect of the
change in our assumed discount rate from 7.75% to 7.25% contributed $8.2
million of the $9.6 million actuarial loss.

The following table sets forth a reconciliation of the plan assets for the
years ended December 31:

|                                                       |  |      |         |      |  |   |         |  
|------------------------------------------------------ |  | ---- | ------- | ---- |  | - | ------- | -
|                                                       |  | 2002 |         | 2001
|                                                       |  |      |         |     
|(In thousands)                                         |  |      |         |      |  |   |         |  
|Fair value of plan assets at the beginning of the year |  | $    | 127,726 |      |  | $ | 135,700 |  
|Actual return on plan assets                           |  |      | (10,987 | )    |  |   | (1,652  | )
|Company contributions                                  |  |      | 5,000   |      |  |   |        |  
|Benefits paid                                          |  |      | (6,840  | )    |  |   | (6,322  | )
|                                                       |  |      |         |      |  |   |         |  
|Fair value of plan assets at the end of the year       |  | $    | 114,899 |      |  | $ | 127,726 |  
|                                                       |  |      |         |      |  |   |         |  

The following table sets forth the funded status of the plan and the amounts
recognized in our consolidated balance sheets at December 31:

|                                   |  |      |         |      |  |   |         |  
|---------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                   |  | 2002 |         | 2001
|                                   |  |      |         |     
|(In thousands)                     |  |      |         |      |  |   |         |  
|Unfunded status                    |  | $    | (17,232 | )    |  |   | ($6,661 | )
|Unrecognized net actuarial loss    |  |      | 25,971  |      |  |   | 11,675  |  
|Unrecognized pension service costs |  |      | 1,123   |      |  |   | 1,228   |  
|                                   |  |      |         |      |  |   |         |  
|Prepaid pensions                   |  | $    | 9,862   |      |  | $ | 6,242   |  
|                                   |  |      |         |      |  |   |         |  

U.S. Nonqualified Pension Plans

We have two nonqualified pension plans in the United States. The Supplemental
Benefit Restoration Plan (the Restoration Plan) was established as of January
1, 1994 and is a non-funded, defined benefit pension plan that provides
benefits to employees identical to the benefits provided by the U.S. Retirement
Plan, except that under the U.S. Retirement Plan final average annual
compensation for purposes of determining plan benefits is currently capped at
$200,000. Benefits under the Restoration Plan are not subject to this
limitation. However, Restoration Plan benefits are offset by any benefits
payable from the U.S. Retirement Plan.

On January 1, 2002, the Supplemental Executive Retirement Plan (the Executive
Plan) was established to provide retirement benefits to executives who are
employed at the level of senior vice president or above and who are approved
for participation by the Compensation Committee upon the recommendation of the
Chief Executive Officer. In general, the Executive Plan provides a monthly
benefit to a participant at the normal retirement age of 65 of 55% of average
pay reduced by benefits under the U.S. Retirement Plan, the Restoration Plan
and Social Security. The annual benefit payable to the Chief Executive Officer
is increased by $6,000 for each year of service. Benefits become fully vested
upon a change in control and are immediately payable in the event of a
termination of employment following the change in control. Prior to 2002,
there was an Agreement for Special Executive Retirement Benefits for the Chief
Executive Officer (the Agreement). The Agreement was replaced by the
Executive Plan.

F-20



---



---



##### Table of Contents



On December 31, 2002, the accumulated benefit obligation for our nonqualified
pension plans of $3.5 million exceeded the plans accrued liability of $2.3
million. The plan had unrecognized prior service cost of $1.4 million and thus
an intangible asset equal to the additional minimum liability of $1.2 million
was established. The amounts recognized in the Consolidated Balance Sheets
before taxes are as follows:

|                          |  |      |        |      |  |   |        |  
|------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                          |  | 2002 |        | 2001
|                          |  |      |        |     
|(In thousands)            |  |      |        |      |  |   |        |  
|Accrued Benefit Liability |  | $    | (3,464 | )    |  | $ | (1,376 | )
|Intangible Asset          |  |      | 1,181  |      |  |   |       |  
|                          |  |      |        |      |  |   |        |  
|Net Amount Recognized     |  | $    | (2,283 | )    |  | $ | (1,376 | )
|                          |  |      |        |      |  |   |        |  

Certain assumptions utilized in accounting for the nonqualified pension plans
for the years ended December 31 are as follows:

|                                 |  |      |      |      |  |      |      |   |  |  |      |  
|-------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                 |  | 2002 |      | 2001 |  | 2000
|                                 |  |      |      |      |  |     
|Discount rate                    |  |      | 7.00 | %    |  |      | 7.25 | % |  |  | 7.75 | %
|Rate of increase in compensation |  |      | 3.5  |      |  |      | 4.0  |   |  |  | 4.76 |  
|Expected return on plan assets   |  |      | N/A  |      |  |      | N/A  |   |  |  | N/A  |  

A summary of the components of net periodic pension cost for the nonqualified
pension plans for the years ended December 31 is as follows:

|                                   |  |      |     |      |  |      |     |  |  |   |     | 
|---------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                   |  | 2002 |     | 2001 |  | 2000
|                                   |  |      |     |      |  |     
|(In thousands)                     |  |      |     |      |  |      |     |  |  |   |     | 
|Service cost                       |  | $    | 566 |      |  | $    | 195 |  |  | $ | 144 | 
|Interest cost                      |  |      | 230 |      |  |      | 110 |  |  |   | 91  | 
|Amortization of prior service cost |  |      | 173 |      |  |      | 31  |  |  |   | 76  | 
|Amortization of net actuarial gain |  |      | 13  |      |  |      | 7   |  |  |   | 6   | 
|                                   |  |      |     |      |  |      |     |  |  |   |     | 
|Net periodic pension cost          |  | $    | 982 |      |  | $    | 343 |  |  | $ | 317 | 
|                                   |  |      |     |      |  |      |     |  |  |   |     | 

The following table sets forth a reconciliation of the projected benefit
obligation for the years ended December 31:

|                                                |  |      |       |      |  |   |       |  
|----------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                                                |  | 2002 |       | 2001
|                                                |  |      |       |     
|(In thousands)                                  |  |      |       |      |  |   |       |  
|Benefit obligation at the beginning of the year |  | $    | 1,867 |      |  | $ | 1,353 |  
|Service costs                                   |  |      | 566   |      |  |   | 195   |  
|Interest costs                                  |  |      | 230   |      |  |   | 110   |  
|Amendments                                      |  |      | 1,409 |      |  |   | 139   |  
|Actuarial loss (gain)                           |  |      | (99   | )    |  |   | 144   |  
|Benefits paid                                   |  |      | (74   | )    |  |   | (74   | )
|                                                |  |      |       |      |  |   |       |  
|Benefit obligation at the end of the year       |  | $    | 3,899 |      |  | $ | 1,867 |  
|                                                |  |      |       |      |  |   |       |  

F-21



---



---



##### Table of Contents



The following table sets forth a reconciliation of the plan assets for the
years ended December 31:

|                                                       |  |      |     |      |  |   |     |   |  |  |  | 
|------------------------------------------------------ |  | ---- | --- | ---- |  | - | --- | - |  |  |  | 
|                                                       |  | 2002 |     | 2001
|                                                       |  |      |     |     
|(In thousands)                                         |  |      |     |      |  |   |     |   |  |  |  | 
|Fair value of plan assets at the beginning of the year |  | $    |    |      |  | $ |    |  
|Company contributions                                  |  |      | 74  |      |  |   | 74  |  
|Benefits paid                                          |  |      | (74 | )    |  |   | (74 | )
|                                                       |  |      |     |      |  |   |     |  
|Fair value of plan assets at the end of the year       |  | $    |    |      |  | $ |    |  
|                                                       |  |      |     |      |  |   |     |  

The following table sets forth the funded status of the plan and the amounts
recognized in our consolidated balance sheets at December 31:

|                                   |  |      |        |      |  |   |        |  
|---------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                   |  | 2002 |        | 2001
|                                   |  |      |        |     
|(In thousands)                     |  |      |        |      |  |   |        |  
|Unfunded status                    |  | $    | (3,899 | )    |  | $ | (1,867 | )
|Unrecognized net actuarial loss    |  |      | 200    |      |  |   | 312    |  
|Unrecognized pension service costs |  |      | 1,415  |      |  |   | 179    |  
|                                   |  |      |        |      |  |   |        |  
|Accrued Benefit Cost               |  | $    | (2,284 | )    |  | $ | (1,376 | )
|                                   |  |      |        |      |  |   |        |  

We also have 401(k) plans covering substantially all of our U.S. employees. We
provide at our discretion a match of employee salaries contributed to the
plans. We recorded expense with respect to these plans of $0.3 million in
2002, $1.3 million in 2001 and $2.0 million in 2000. Beginning in September
2001 and continuing in 2002 we eliminated our match for all highly compensated
individuals and reduced our match for all other employees.

Canadian Plans

We sponsor a defined contribution profit-sharing retirement plan for our
London, Ontario facility employees who are required to contribute 4% of regular
wages, subject to a maximum contribution limit specified by Canadian income tax
regulations. Employer contributions were $0.5 million in 2002, $0.5 million in
2001 and $0.6 million in 2000.

We have established three noncontributory defined benefit pension plans
covering substantially all our employees at the Fergus, Montreal and Quebec,
Ontario facilities. The three plans are the Wolverine Ratcliffs Inc. Pension
Plan for Operational Employees (the WRI Plan), the Wolverine Tube (Canada)
Inc. Pension Plan for Salaried Employees (the Salaried Plan) and the
Wolverine Tube (Canada) Inc. Pension Plan for Operational Employees (the
Canada Operational Plan). We contribute the actuarially determined amounts
annually into the plans. Benefits for the hourly employees at the Montreal,
Quebec and Fergus, Ontario facilities are based on years of service and a
negotiated rate. Benefits for salaried employees are based on years of service
and the employees highest annual average compensation over five consecutive
years.

The WRI Plan covering hourly employees at our Fergus facility whose operations
were discontinued was wound-up as of July 1, 2002 and a wind-up actuarial
valuation was prepared as of that date. The Salaried Plan was partially
wound-up as of July 1, 2002 with regard to the termination of the salaried
employees who were working at the Fergus facility. The benefits payable under
these plans for our Fergus employees were not settled as of December 31, 2002,
but we have estimated in our December 31, 2002 valuation the impact of the
settlement that is

F-22



---



---



##### Table of Contents



expected to occur as of September 1, 2003. The pension liability recorded for
the WRI Plan is $0.9 million at December 31, 2002.

On December 31, 2002, the accumulated benefit obligation for the Salaried Plan
and the Canada Operational Plan exceeded the fair value of pension plan assets,
primarily due to a decline in the fair value of the plan assets due to a sharp
decrease in the equity markets at December 31, 2002. As a result and in
accordance with SFAS No. 87, we recognized an additional minimum pension
liability of $3.0 million, recorded a charge to accumulated other comprehensive
loss of $2.1 million and recognized an intangible asset of $0.9 million
included in deferred charges, net equal to the amount of unrecognized prior
service cost. To record the $3.0 million additional minimum pension liability,
we decreased prepaid pension assets by $0.7 million and recorded a $2.3 million
pension liability. In conjunction with the recognition of the additional
minimum pension liability, we also recorded a deferred tax asset and
accumulated other comprehensive income of $0.7 million.

The accumulated benefit obligation at December 31, 2002 for the Salaried Plan
and the Canada Operational Plan was $16.4 million. The amounts recognized in
the Consolidated Balance Sheets before taxes are as follows:

|                                     |  |      |        |      |  |   |       | 
|------------------------------------ |  | ---- | ------ | ---- |  | - | ----- | 
|                                     |  | 2002 |        | 2001
|                                     |  |      |        |     
|(In thousands)                       |  |      |        |      |  |   |       | 
|Prepaid Benefit Cost                 |  | $    |       |      |  | $ | 2,377 | 
|Accrued Benefit Liability            |  |      | (3,234 | )    |  |   |      | 
|Intangible Asset                     |  |      | 946    |      |  |   |      | 
|Accumulated Other Comprehensive Loss |  |      | 2,120  |      |  |   |      | 
|                                     |  |      |        |      |  |   |       | 
|Net Amount Recognized                |  | $    | (168   | )    |  | $ | 2,377 | 
|                                     |  |      |        |      |  |   |       | 

Certain assumptions utilized in accounting for the Canadian pension plans for
the years ended December 31 are as follows:

|                                                 |  |      |      |      |  |      |     |   |  |  |     |  
|------------------------------------------------ |  | ---- | ---- | ---- |  | ---- | --- | - |  |  | --- | -
|                                                 |  | 2002 |      | 2001 |  | 2000
|                                                 |  |      |      |      |  |     
|Discount rate                                    |  |      | 6.75 | %    |  |      | 7.0 | % |  |  | 7.5 | %
|Expected long-term rate of return on plan assets |  |      | 7.5  |      |  |      | 8.5 |   |  |  | 8.5 |  

The expected rate of increase in compensation used in accounting for the
Salaried Plan was 3.0% for the years ended December 31, 2002, 2001 and 2000,
and is not applicable in accounting for the Canada Operational Plan and the WRI
Plan for the same periods.

A summary of the components of net periodic pension cost for the three pension
plans for the years ended December 31 are as follows:

|                                    |  |      |        |      |  |      |        |   |  |   |        |  
|----------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                    |  | 2002 |        | 2001 |  | 2000
|                                    |  |      |        |      |  |     
|(In thousands)                      |  |      |        |      |  |      |        |   |  |   |        |  
|Service cost                        |  | $    | 486    |      |  | $    | 498    |   |  | $ | 522    |  
|Interest cost                       |  |      | 1,257  |      |  |      | 1,240  |   |  |   | 1,317  |  
|Expected return on plan assets      |  |      | (1,603 | )    |  |      | (1,793 | ) |  |   | (1,748 | )
|Effect of Settlement                |  |      | 2,471  |      |  |      |       |   |  |   |       |  
|Amortization of prior service cost  |  |      | 91     |      |  |      | 73     |   |  |   | 77     |  
|Amortization of net actuarial gain  |  |      | (3     | )    |  |      | (118   | ) |  |   | (62    | )
|                                    |  |      |        |      |  |      |        |   |  |   |        |  
|Net periodic pension cost (benefit) |  | $    | 2,699  |      |  |      | ($100  | ) |  | $ | 106    |  
|                                    |  |      |        |      |  |      |        |   |  |   |        |  

F-23



---



---



##### Table of Contents



The following table sets forth a reconciliation of the benefit obligation for
the years ended December 31:

|                                                |  |      |        |      |  |   |        |  
|----------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                                |  | 2002 |        | 2001
|                                                |  |      |        |     
|(In thousands)                                  |  |      |        |      |  |   |        |  
|Benefit obligation at the beginning of the year |  | $    | 18,465 |      |  | $ | 17,007 |  
|Service costs                                   |  |      | 486    |      |  |   | 497    |  
|Interest costs                                  |  |      | 1,257  |      |  |   | 1,240  |  
|Amendments                                      |  |      | 291    |      |  |   |       |  
|Actuarial loss (gain)                           |  |      | (207   | )    |  |   | 1,736  |  
|Benefits paid                                   |  |      | (1,146 | )    |  |   | (921   | )
|Estimated settlement of benefits                |  |      | (2,393 | )    |  |   |       |  
|Foreign currency exchange rate changes          |  |      | 175    |      |  |   | (1,094 | )
|                                                |  |      |        |      |  |   |        |  
|Benefit obligation at the end of the year       |  | $    | 16,928 |      |  | $ | 18,465 |  
|                                                |  |      |        |      |  |   |        |  

The following table sets forth a reconciliation of the plans assets for the
years ended December 31:

|                                                       |  |      |        |      |  |   |        |  
|------------------------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                                                       |  | 2002 |        | 2001
|                                                       |  |      |        |     
|(In thousands)                                         |  |      |        |      |  |   |        |  
|Fair value of plan assets at the beginning of the year |  | $    | 19,259 |      |  | $ | 22,123 |  
|Actual return on plan assets                           |  |      | (1,611 | )    |  |   | (850   | )
|Company contribution                                   |  |      | 143    |      |  |   | 179    |  
|Benefits paid                                          |  |      | (1,146 | )    |  |   | (921   | )
|Estimated Settlement of Benefits                       |  |      | (3,647 | )    |  |   |       |  
|Foreign currency exchange rate changes                 |  |      | 160    |      |  |   | (1,272 | )
|                                                       |  |      |        |      |  |   |        |  
|Fair value of plan assets at the end of the year       |  | $    | 13,158 |      |  | $ | 19,259 |  
|                                                       |  |      |        |      |  |   |        |  

The following table sets forth the funded status of the plans and the amounts
recognized in our consolidated balance sheets at December 31:

|                                   |  |      |        |      |  |   |       | 
|---------------------------------- |  | ---- | ------ | ---- |  | - | ----- | 
|                                   |  | 2002 |        | 2001
|                                   |  |      |        |     
|(In thousands)                     |  |      |        |      |  |   |       | 
|Funded status                      |  | $    | (3,770 | )    |  | $ | 794   | 
|Unrecognized net actuarial loss    |  |      | 2,656  |      |  |   | 548   | 
|Unrecognized pension service costs |  |      | 946    |      |  |   | 1,035 | 
|                                   |  |      |        |      |  |   |       | 
|Prepaid (Accrued) benefit cost     |  | $    | (168   | )    |  | $ | 2,377 | 
|                                   |  |      |        |      |  |   |       | 

The schedules for the Canadian plans include the following amounts for the
discontinued operations of WRI (see Note 2): a ($2.3) million decrease in
benefit obligation; a ($3.7) million decrease in plan assets; an accrued
liability of $0.9 million; and $2.5 million in net periodic benefit costs.

12. Postretirement Benefit Obligation

We sponsor a defined benefit health care plan and life insurance plan that
provides postretirement medical benefits and life insurance to substantially
all our full-time employees who have worked ten years after age 50 to 52, and
spouses of employees who die while employed after age 55 and have at least five
years of service. This plan is contributory, with retiree contributions being
adjusted annually.

F-24



---



---



##### Table of Contents



Net periodic postretirement benefit cost for the years ended December 31
includes the following components:

|                                         |  |      |       |      |  |      |       |   |  |   |      |  
|---------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ---- | -
|                                         |  | 2002 |       | 2001 |  | 2000
|                                         |  |      |       |      |  |     
|(In thousands)                           |  |      |       |      |  |      |       |   |  |   |      |  
|Service cost                             |  | $    | 613   |      |  | $    | 431   |   |  | $ | 384  |  
|Interest cost                            |  |      | 1,034 |      |  |      | 685   |   |  |   | 687  |  
|Amortization of prior service cost       |  |      | 126   |      |  |      | 126   |   |  |   | 85   |  
|Amortization of deferred gain            |  |      | (126  | )    |  |      | (411  | ) |  |   | (284 | )
|Effect of special termination benefits   |  |      | (386  | )    |  |      | 199   |   |  |   | 55   |  
|                                         |  |      |       |      |  |      |       |   |  |   |      |  
|Net periodic postretirement benefit cost |  | $    | 1,261 |      |  | $    | 1,030 |   |  | $ | 927  |  
|                                         |  |      |       |      |  |      |       |   |  |   |      |  

The change in benefit obligation for the years ended December 31 includes the
following components:

|                                                |  |      |        |      |  |   |        |  
|----------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                                |  | 2002 |        | 2001
|                                                |  |      |        |     
|(In thousands)                                  |  |      |        |      |  |   |        |  
|Benefit obligation at the beginning of the year |  | $    | 15,032 |      |  | $ | 14,486 |  
|Service cost                                    |  |      | 613    |      |  |   | 431    |  
|Interest cost                                   |  |      | 1,034  |      |  |   | 685    |  
|Participants contributions                     |  |      | 504    |      |  |   | 227    |  
|Amendments                                      |  |      |       |      |  |   | 37     |  
|Actuarial loss                                  |  |      | 21     |      |  |   | 1,670  |  
|Benefits paid                                   |  |      | (2,030 | )    |  |   | (2,703 | )
|Special termination benefits                    |  |      | (401   | )    |  |   | 199    |  
|Foreign currency exchange rate changes          |  |      | 315    |      |  |   | -      |  
|                                                |  |      |        |      |  |   |        |  
|Benefit obligation at the end of the year       |  | $    | 15,088 |      |  | $ | 15,032 |  
|                                                |  |      |        |      |  |   |        |  

The following table sets forth the status of the plan and the amounts
recognized in our consolidated balance sheets at December 31:

|                                      |  |      |        |      |  |   |        |  
|------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                      |  | 2002 |        | 2001
|                                      |  |      |        |     
|(In thousands)                        |  |      |        |      |  |   |        |  
|Benefit obligation at end of year     |  | $    | 15,088 |      |  | $ | 15,032 |  
|Unrecognized net actuarial gain       |  |      | 1,135  |      |  |   | 1,371  |  
|Unrecognized prior service cost       |  |      | (557   | )    |  |   | (683   | )
|                                      |  |      |        |      |  |   |        |  
|Net postretirement benefit obligation |  | $    | 15,666 |      |  | $ | 15,720 |  
|                                      |  |      |        |      |  |   |        |  

The weighted average discount rate used in determining the postretirement
benefit obligation was 7.0% at December 31, 2002 and 7.25% at December 31,
2001.

For purposes of determining the cost and obligation for postretirement medical
benefits, a 5% annual rate of increase in the per capita cost of covered
benefits (i.e. health care trend rate) was assumed, and is expected to remain
at that level thereafter. Assumed health care cost trend rates have a
significant effect on the amounts reported for health care plans. A one
percent change in the assumed health care cost trend rate would have had the
following effects:

|                                                        |  |             |     |             |  |   |      |  
|------------------------------------------------------- |  | ----------- | --- | ----------- |  | - | ---- | -
|                                                        |  | 1% Increase |     | 1% Decrease
|                                                        |  |             |     |            
|(In thousands)                                          |  |             |     |             |  |   |      |  
|Effect on total of service and interest cost components |  | $           | 10  |             |  | $ | (9   | )
|Effect on postretirement benefit obligation             |  | $           | 149 |             |  | $ | (133 | )
|                                                        |  |             |     |             |  |   |      |  

F-25



---



---



##### Table of Contents



13. Environmental Remediation

We are subject to extensive environmental regulations imposed by federal,
state, provincial and local authorities in the U.S., Canada, China and Portugal
with respect to emissions to air, discharges to waterways, and the generation,
handling, storage, transportation, treatment and disposal of waste materials.
We have received various communications from regulatory authorities concerning
certain environmental matters.

We have accrued undiscounted estimated environmental remediation costs of $1.5
million at December 31, 2002, consisting of $0.6 million for the Decatur
facility, $44,000 for the Greenville facility, $58,000 for the Altoona facility
and $0.8 million for the Ardmore facility. Based on information currently
available, we believe that the costs of these matters are not reasonably likely
to have a material effect on our business, financial condition or results of
operations. However, actual costs related to environmental matters could
differ materially from the amounts we estimated and accrued at December 31,
2002 and could result in additional exposure if these environmental matters are
not resolved as anticipated.

14. Income Taxes

The components of income from continuing operations before income taxes for the
years ended December 31 are as follows:

|               |  |      |        |      |  |      |        |   |  |   |        | 
|-------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | 
|               |  | 2002 |        | 2001 |  | 2000
|               |  |      |        |      |  |     
|(In thousands) |  |      |        |      |  |      |        |  
|U.S            |  | $    | (6,933 | )    |  | $    | (170   | ) |  | $ | 17,103 | 
|Foreign        |  |      | 15,418 |      |  |      | 15,957 |   |  |   | 23,464 | 
|               |  |      |        |      |  |      |        |   |  |   |        | 
|Total          |  | $    | 8,485  |      |  | $    | 15,787 |   |  | $ | 40,567 | 
|               |  |      |        |      |  |      |        |   |  |   |        | 

The provision for income taxes for the years ended December 31 consists of the
following:

|                                                          |                            |              |       |        |        |      |         |       |       |   |        |       |       | 
|--------------------------------------------------------- | -------------------------- | ------------ | ----- | ------ | ------ | ---- | ------- | ----- | ----- | - | ------ | ----- | ----- | 
|                                                          |                            |              |       | 2002   |        | 2001 |         | 2000 
|                                                          |                            |              |       |        |        |      |         |      
|(In thousands)                                            |                            |              |       |        |        |      |         |       |       |   |        |      
|Continuing operations                                     |                            |              |       |        |        |      |         |       |       |   |        |      
|                                                          | Current (benefit) expense: |              |       |        |        |      |         |       |       |   |        |       |      
|                                                          |                            | U.S. Federal |       | $      | (5,308 | )    |         | $     | 2,675 |   |        | $     | 1,696 | 
|                                                          |                            | Foreign      |       |        | 2,185  |      |         |       | 4,387 |   |        |       | 7,354 | 
|                                                          |                            | State        |       |        | 693    |      |         |       | (732  | ) |        |       | 95    | 
|                                                          |                            |              |       |        |        |      |         |       |       |   |        |       |       | 
|                                                          | Total current              |              |       | (2,430 | )      |      |         | 6,330 |       |   |        | 9,145 |      
|                                                          |                            |              |       |        |        |      |         |       |       |   |        |       |       | 
|Deferred (benefit) expense:                               |                            |              |       |        |        |      |         |       |       |   |        |      
|U.S                                                       |                            |              | 2,547 |        |        |      | (1,741  | )     |       |   | 5,745  |      
|Foreign                                                   |                            |              | 1,198 |        |        |      | (244    | )     |       |   | (230   | )    
|                                                          |                            |              |       |        |        |      |         |       |       |   |        |      
|Total deferred                                            |                            |              | 3,745 |        |        |      | (1,985  | )     |       |   | 5,515  |      
|                                                          |                            |              |       |        |        |      |         |       |       |   |        |      
|Total income tax expense (benefit) continuing
operations |                            | $            | 1,315 |        |        | $    | 4,345   |       |       | $ | 14,660 |      
|Income tax expense (benefit)  discontinued operations    |                            |              | (936  | )      |        |      | (12,100 | )     |       |   | 506    |      
|                                                          |                            |              |       |        |        |      |         |       |       |   |        |      
|Total income tax expense (benefit)                        |                            | $            | 379   |        |        | $    | (7,755  | )     |       | $ | 15,166 |      
|                                                          |                            |              |       |        |        |      |         |       |       |   |        |      

Deferred income taxes included in our balance sheets reflect the net tax
effects of temporary differences between the carrying amount of assets and
liabilities for financial reporting purposes and the carrying amount for income
tax return purposes. Significant components of our deferred tax assets and
liabilities are as follows:

F-26



---



---



##### Table of Contents



|                                                     |  |      |        |      |  |   |        | 
|---------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                                     |  | 2002 |        | 2001
|                                                     |  |      |        |     
|(In thousands)                                       |  |      |        |      |  |   |        | 
|Deferred tax liabilities:                            |  |      |        |      |  |   |        | 
|Basis of property, plant and equipment               |  | $    | 31,522 |      |  | $ | 30,012 | 
|Prepaid pension                                      |  |      | 4,034  |      |  |   | 2,746  | 
|Other                                                |  |      | 2,540  |      |  |   | 833    | 
|                                                     |  |      |        |      |  |   |        | 
|Total deferred tax liabilities                       |  |      | 38,096 |      |  |   | 33,591 | 
|                                                     |  |      |        |      |  |   |        | 
|Deferred tax assets:                                 |  |      |        |      |  |   |        | 
|Environmental remediation                            |  |      | 554    |      |  |   | 704    | 
|Net operating loss carryforward                      |  |      | 12,281 |      |  |   | 15,127 | 
|Restructuring reserves                               |  |      | 627    |      |  |   | 1,935  | 
|Inventory valuations                                 |  |      | 315    |      |  |   | 270    | 
|Pension obligation                                   |  |      | 12,988 |      |  |   | 6,269  | 
|Other                                                |  |      | 4,700  |      |  |   | 2,992  | 
|                                                     |  |      |        |      |  |   |        | 
|Total deferred tax assets                            |  |      | 31,465 |      |  |   | 27,297 | 
|Valuation allowance                                  |  |      | (2,385 | )    |  |   |       | 
|                                                     |  |      |        |      |  |   |        | 
|Total deferred tax assets net of valuation allowance |  |      | 29,080 |      |  |   | 27,297 | 
|                                                     |  |      |        |      |  |   |        | 
|Net deferred tax liability                           |  | $    | 9,016  |      |  | $ | 6,294  | 
|                                                     |  |      |        |      |  |   |        | 

Reconciliation of differences between the statutory U.S. federal income tax
rate and our effective tax rate follows:

|                                               |  |      |        |      |  |      |        |   |  |   |        |  
|---------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                               |  | 2002 |        | 2001 |  | 2000
|                                               |  |      |        |      |  |     
|(In thousands)                                 |  |      |        |      |  |      |        |   |  |   |        |  
|Income tax expense at federal statutory rate   |  | $    | 2,885  |      |  | $    | 5,525  |   |  | $ | 14,198 |  
|Increase (decrease) in taxes resulting from:   |  |      |        |      |  |      |        |   |  |   |        |  
|State and local taxes, net of federal benefit  |  |      | 443    |      |  |      | 185    |   |  |   | 369    |  
|Effect of difference in U.S. and foreign rates |  |      | (1,858 | )    |  |      | (1,363 | ) |  |   | (894   | )
|Permanent differences                          |  |      | 21     |      |  |      | 12     |   |  |   | 523    |  
|Other                                          |  |      | (176   | )    |  |      | (14    | ) |  |   | 464    |  
|                                               |  |      |        |      |  |      |        |   |  |   |        |  
|Income tax expense continuing operations      |  | $    | 1,315  |      |  | $    | 4,345  |   |  | $ | 14,660 |  
|                                               |  |      |        |      |  |      |        |   |  |   |        |  

At December 31, 2002, we have state and foreign net operating loss
carryforwards of $89 million and $21 million, respectively. These net
operating loss carryforwards expire at various times beginning in 2016 through
2022. A valuation allowance of $2.4 million was established in the current
year to offset a portion of the deferred tax amount relating to state net
operating losses.

The tax rate for our operations in China was 0% in 2001 and 2000, reflecting
our contractual tax holiday agreement with the Chinese government. Under this
agreement, the tax rate was increased to 7.5% beginning January 1, 2002 and
will remain at this rate for the next three years, increasing in 2005 to a 15%
maximum rate.

F-27



---



---



##### Table of Contents



15. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss at December 31, are as
follows:

|                             |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |        |  
|---------------------------- | --------------------------------------------------------------- | - | ----------- | ------ | -------------- | - | ----------- | ------ | ------------- | - | ------- | ------- | - | - | ------- | ------ | -
|                             |                                                                 |   |             |        |                |   | Unrealized  |        | Minimum       |   |         |         |  
|                             |                                                                 |   | Foreign     |        | Gain (Loss) on |   | Pension     |        | Accumulated  
|                             |                                                                 |   | Currency    |        | Cash Flow      |   | Liability   |        | Other        
|                             |                                                                 |   | Translation |        | Hedges, Net of |   | Adjustment, |        | Comprehensive
|                             |                                                                 |   | Adjustment  |        | Tax            |   | Net of Tax  |        | Loss         
|                             |                                                                 |   |             |        |                |   |             |        |              
|(In thousands)               |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |       
|Balance at December 31, 1999 |                                                                 | $ | (10,688     | )      |                | $ |            |        |               | $ |        |         |   | $ | (10,688 | )     
|                             | Activity in 2000                                                |   |             | (3,632 | )              |   |             |       |               |   |         |        |   |   |         | (3,632 | )
|                             |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |       
|Balance at December 31, 2000 |                                                                 |   | (14,320     | )      |                |   |            |        |               |   |        |         |   |   | (14,320 | )     
|                             | Activity in 2001                                                |   |             | (5,681 | )              |   |             | (1,897 | )             |   |         |        |   |   |         | (7,578 | )
|                             |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |       
|Balance at December 31, 2001 |                                                                 |   | (20,001     | )      |                |   | (1,897      | )      |               |   |        |         |   |   | (21,898 | )     
|                             | Activity in 2002                                                |   |             | 2,201  |                |   |             | (140   | )             |   |         | (11,535 | ) |   |         | (9,474 | )
|                             | Reclassification
adjustment for realized
cash flow hedge losses |   |             |       |                |   |             | 1,781  |               |   |         |        |   |   |         | 1,781  |  
|                             |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |       
|Balance at December 31, 2002 |                                                                 | $ | (17,800     | )      |                | $ | (256        | )      |               | $ | (11,535 | )       |   | $ | (29,591 | )     
|                             |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |       

16. Redeemable Cumulative Preferred Stock

We have 500,000 shares authorized for issuance of $1 par value cumulative
preferred stock. At December 31, 2002, there are no shares of cumulative
preferred stock issued and outstanding. As of December 31, 2001, there were
20,000 shares of cumulative preferred stock issued and outstanding that we
redeemed on March 1, 2002 by paying $1.0 million in cash and issuing 116,100
shares of our common stock at a share price of $8.61.

The cumulative preferred stock provided for annual dividends at the rate of $14
per share. The dividends accrued quarterly whether declared or not, and
compounded quarterly at 14% per annum to the extent unpaid. At December 31,
2002 and 2001, all dividends had been paid. The cumulative preferred stock is
entitled to a preference, in liquidation, in the amount of $100 per share, plus
any accrued and unpaid dividends and any related interest.

17. Common Stock

All holders of Common Stock are entitled to receive dividends when and if
declared by our Board of Directors (the Board), provided that all dividend
requirements of the cumulative preferred stock have been paid. Additionally,
the payment of dividends on our Common Stock is restricted under the terms of
our various financing agreements. To date, no dividends have been paid to the
holders of the Common Stock and there are no immediate plans to institute a
dividend.

The Board has adopted a Stockholder Rights Plan designed to protect the Company
and its stockholders from coercive, unfair or inadequate takeover bids.
Pursuant to the Stockholder

F-28



---



---



##### Table of Contents



Rights Plan, a dividend of one Preferred Share Purchase Right (a Right) was
declared for each share of Common Stock outstanding at the close of business on
February 23, 1996. The Rights are generally not exercisable until ten days
after a person or group acquires, or commences a tender offer that could result
in the party acquiring, 15% of the outstanding shares of Common Stock. Each
Right, should it become exercisable, will enable the owner to buy one
one-thousandth of a share of newly created Series A Junior Participating
Preferred Stock at an exercise price of $175, and, in certain circumstances, to
purchase shares of Common Stock at a substantially reduced price. The Board is
generally entitled to redeem the Rights at $0.01 per Right at any time prior to
the date they become exercisable. The Rights will expire on February 23, 2006.

Beginning in September 1998, the Board of Directors authorized management to
purchase shares of our outstanding Common Stock in the open market under common
stock repurchase programs. These common stock repurchase programs concluded
March 31, 2002. Under the common stock repurchase programs, we purchased
537,600 shares, 858,100 shares and 784,200 shares of our Common Stock for $7.5
million, $15.4 million and $16.6 million for the years ended December 31, 2000,
1999 and 1998, respectively. We did not purchase any shares of our Common
Stock in the years ended December 31, 2002 or 2001.

18. Stock-Based Compensation Plans

We have elected to follow APB 25, Accounting for Stock Options Issued to
Employeesand related interpretations in accounting for our employee and
outside director stock options because, as discussed below, the alternative
fair value accounting provided for under SFAS No. 123 (Statement 123),
Accounting for Stock-Based Compensation, requires use of option valuation
models that were not developed for use in valuing employee and outside director
stock options. Under APB 25, no compensation expense is recognized because the
exercise price of our employee and outside director stock options equals the
market price of the underlying stock on the date of the grant.

Pro forma information regarding net income and earnings per share is required
by Statement 123, and has been determined as if we had accounted for our
employee and outside director stock options under the fair value method of that
statement. The weighted average fair value of options granted during 2002
estimated on the date of grant using the Black-Scholes pricing model was $3.58.
The fair value for these options was estimated at the date of grant using the
following weighted average assumptions for 2002, 2001 and 2000, respectively:
risk free interest rates of 3.67%, 4.41% and 6.12%, volatility factors of the
expected market price of our Common Stock of 0.385, 0.352 and 0.339; and a
weighted average expected life of the option of 5.6, 7.0 and 7.0 years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions, including the expected stock price volatility.
Because our employee and outside director stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value estimate,
in our opinion, the

F-29



---



---



##### Table of Contents



existing models do not necessarily provide a reliable single measure of the
fair value of our employee and outside director stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options vesting period. The effects of
applying Statement 123 for pro forma disclosure may not be representative of
the effects on reported pro forma net income in future years. Our pro forma
information for the years ended December 31 follows:

|                                                     |  |      |       |      |  |      |          |   |  |   |        | 
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | -------- | - |  | - | ------ | 
|                                                     |  | 2002 |       | 2001 |  | 2000
|                                                     |  |      |       |      |  |     
|(In thousands, except per share amounts)             |  |      |       |      |  |      |          |   |  |   |        | 
|Basic earnings (loss) applicable to common shares:   |  |      |       |      |  |      |          |   |  |   |        | 
|As reported                                          |  | $    | 5,502 |      |  |      | ($20,078 | ) |  | $ | 26,409 | 
|Pro forma                                            |  |      | 3,256 |      |  |      | (22,911  | ) |  |   | 23,181 | 
|Diluted earnings (loss) applicable to common shares: |  |      |       |      |  |      |          |   |  |   |        | 
|As reported                                          |  | $    | 0.45  |      |  |      | ($1.63   | ) |  | $ | 2.14   | 
|Pro forma                                            |  | $    | 0.27  |      |  |      | ($1.89   | ) |  |   | 1.91   | 
|                                                     |  |      |       |      |  |      |          |   |  |   |        | 

The 1993 Equity Incentive Plan (the 1993 Equity Plan) provides for the
issuance of stock options, restricted shares, stock appreciation rights, and
other additional awards to key executives and employees. The maximum number of
shares issuable under the 1993 Equity Plan is 2,075,000 at a price as
determined by our Compensation Committee. All options granted to date have
been issued at the market value at the date of the grant. Options granted
prior to 1999 under the 1993 Equity Plan vest 20% on each anniversary
thereafter and terminate on the tenth anniversary of the date of grant.
Options granted in 1999 and subsequent years under the 1993 Equity Plan vest
333% on each anniversary thereafter and terminate on the tenth anniversary of
the date of grant. Options granted under prior plans remain outstanding but
are governed by the provisions of the 1993 Equity Plan. The 1993 Equity Plan
will terminate by its terms in 2003.

The 1993 Stock Option Plan for Outside Directors (the 1993 Directors Plan)
provides for the issuance of stock options to outside directors at the fair
market value on the date of grant. A maximum of 185,000 shares are issuable
under the 1993 Directors Plan. The initial options granted at the time the
Director joins the Board vest at 333% per year but must be held one year before
being exercised. All subsequent options granted vest immediately. All options
terminate on the tenth anniversary of the date of grant. The 1993 Directors
Plan terminates in 2003.

On March 22, 2001, the Board of Directors adopted the 2001 Stock Option Plan
for Outside Directors (the 2001 Directors Plan) providing for the issuance
of options for the purchase of up to 250,000 shares of our common stock. The
2001 Directors Plan will allow us to continue to compensate and reward our
directors upon the termination of the 1993 Directors Plan. The terms of the
2001 Directors Plan are substantially the same as the terms of the 1993
Directors Plan.

In the third quarter of 2001, we made available to our U.S. and Canadian stock
option holders under the 1993 Equity Plan and the 1993 Directors Plan the
right to exchange options whose exercise price was $20.00 per share or greater,
for new options to purchase one share for every two shares exchanged. We made the exchange offer available because a
large number of stock options had exercise prices that were
significantly higher than current trading prices of our Common Stock,
 and thus the stock options did not provide our employees and outside directors the incentive to acquire and maintain stock
ownership in the Company and to participate in the Companys long-term growth and success. As a
result of this exchange of options, 836,860 shares with an average option price
of $30.48 were canceled, 38,000 of which were under the 1993 Directors Plan.
On April 11, 2002, six months and six business days after the date the options
were exchanged, we

F-30



---



---



##### Table of Contents



granted 383,075 stock options, 19,000 of which were under the 1993 Directors
Plan. New options granted under the 1993 Equity Plan have an exercise price of
$8.60 per share, which was the closing price of our common stock on April 11,
2002. New options granted under the 1993 Directors Plan have an exercise
price of $8.84 per share which was determined by the average market price of
our stock on April 11, 2002 and the four preceding trading days. A stock
option holder must have continued to have been employed by us or provide
service to us through April 11, 2002 in order to have been eligible to receive
the new options granted.

Our stock option plans are summarized as follows:

|                                 |  |                    |        |            |  |                |         |              |  |       |           |          |  |         |              |  |  |           |       | 
|-------------------------------- |  | ------------------ | ------ | ---------- |  | -------------- | ------- | ------------ |  | ----- | --------- | -------- |  | ------- | ------------ |  |  | --------- | ----- | 
|                                 |  |                    |        |            |  |                |         |              |  |       |           |          |  |         |              |  |  | Weighted-
|                                 |  | 2001               |        | 1993       |  |                |         |              |  |       |           |          |  | Average
|                                 |  | Directors         |        | Directors |  | 1993 Equity    |         |              |  |       |           | Exercise
|                                 |  | Plan               |        | Plan       |  | Incentive Plan |         | Option Price |  | Price
|                                 |  |                    |        |            |  |                |         |              |  |      
|                                 |  | (Number of Shares)
|Outstanding at December 31, 1999 |  |                    |       |            |  |                | 53,000  |              |  |       | 1,076,358 |          |  | $       | 4.44-$40.25  |  |  | $         | 28.04 | 
|Granted                          |  |                    |       |            |  |                | 50,200  |              |  |       | 343,950   |          |  | $       | 11.95-$17.01 |  |  | $         | 13.90 | 
|Exercised                        |  |                    |       |            |  |                |        |              |  |       | (4,680    | )        |  | $       | 4.44 - $7.39 |  |  | $         | 6.24  | 
|Forfeited                        |  |                    |       |            |  |                |        |              |  |       | (108,386  | )        |  | $       | 12.31-$38.44 |  |  | $         | 26.79 | 
|                                 |  |                    |        |            |  |                |         |              |  |       |           |          |  |         |              |  |  |           |       | 
|Outstanding at December 31, 2000 |  |                    |       |            |  |                | 103,200 |              |  |       | 1,307,242 |          |  | $       | 4.44-$40.25  |  |  | $         | 24.25 | 
|Granted                          |  |                    |       |            |  |                | 51,465  |              |  |       | 394,650   |          |  | $       | 11.84-$16.57 |  |  | $         | 11.93 | 
|Exercised                        |  |                    |       |            |  |                |        |              |  |       | (24,261   | )        |  | $       | 4.44-$13.69  |  |  | $         | 5.42  | 
|Forfeited                        |  |                    |       |            |  |                | (38,000 | )            |  |       | (841,957  | )        |  | $       | 7.39-$40.25  |  |  | $         | 30.20 | 
|                                 |  |                    |        |            |  |                |         |              |  |       |           |          |  |         |              |  |  |           |       | 
|Outstanding at December 31, 2001 |  |                    |       |            |  |                | 116,665 |              |  |       | 835,674   |          |  | $       | 5.28-$37.68  |  |  | $         | 13.46 | 
|Granted                          |  |                    | 26,362 |            |  |                | 59,724  |              |  |       | 570,638   |          |  | $       | 6.13-$11.35  |  |  | $         | 8.63  | 
|Exercised                        |  |                    |       |            |  |                |        |              |  |       | (27,990   | )        |  | $       | 5.28-$7.39   |  |  | $         | 6.01  | 
|Forfeited                        |  |                    |       |            |  |                | (16,205 | )            |  |       | (89,400   | )        |  | $       | 8.60-$37.68  |  |  | $         | 19.19 | 
|                                 |  |                    |        |            |  |                |         |              |  |       |           |          |  |         |              |  |  |           |       | 
|Outstanding at December 31, 2002 |  |                    | 26,362 |            |  |                | 160,184 |              |  |       | 1,288,922 |          |  | $       | 6.13-$25.25  |  |  | $         | 11.04 | 
|Exercisable at:                  |  |                    |        |            |  |                |         |              |  |       |           |          |  |         |              |  |  |           |       | 
|December 31, 2000                |  |                    |       |            |  |                | 99,866  |              |  |       | 574,600   |          |  | $       | 4.44-$40.25  |  |  | $         | 26.12 | 
|December 31, 2001                |  |                    |       |            |  |                | 116,665 |              |  |       | 223,961   |          |  | $       | 5.28-$37.68  |  |  | $         | 14.78 | 
|December 31, 2002                |  |                    | 26,362 |            |  |                | 160,184 |              |  |       | 723,813   |          |  | $       | 7.39-$25.25  |  |  | $         | 11.12 | 
|                                 |  |                    |        |            |  |                |         |              |  |       |           |          |  |         |              |  |  |           |       | 

The number of options outstanding, weighted average exercise price, weighted
average remaining contractual life, vested options and the weighted average
exercise price of vested options outstanding at December 31, 2002, which were
issued prior to August 1993, were 31,518, $7.39, 0.2 years, 31,518 and $7.39,
respectively. The number of options outstanding, weighted average exercise
price, weighted average remaining contractual life, vested options and the
weighted average exercise price of vested options outstanding at December 31,
2002, which were issued after August 1993, were 1,443,950, $11.12, 7.2 years,
878,841 and $11.25, respectively. The weighted average remaining life for all
options outstanding at December 31, 2002 is 7.1 years.

F-31



---



---



##### Table of Contents



The range of exercise prices of the outstanding options and exercisable options
at December 31, 2002 are as follows:

|                                |  |                    |         |                    |  |                  |           |  |  |  |      | 
|------------------------------- |  | ------------------ | ------- | ------------------ |  | ---------------- | --------- |  |  |  | ---- | 
|                                |  | Number of          |         | Number of          |  | Weighted Average
|Weighted Average Exercise Price |  | Exercisable Shares |         | Outstanding Shares |  | Remaining Life  
|                                |  |                    |         |                    |  |                 
|$6.13 - $14.99                  |  |                    | 850,610 |                    |  |                  | 1,406,068 |  |  |  | 7.06 | 
|$15.00 - $24.99                 |  |                    | 58,599  |                    |  |                  | 68,250    |  |  |  | 6.40 | 
|$25.00 - $25.25                 |  |                    | 1,150   |                    |  |                  | 1,150     |  |  |  | 2.20 | 
|                                |  |                    |         |                    |  |                  |           |  |  |  |      | 
|Totals                          |  |                    | 910,359 |                    |  |                  | 1,475,468 |  |  |  | 7.03 | 
|                                |  |                    |         |                    |  |                  |           |  |  |  |      | 

In 2002, we awarded 50,619 shares of restricted stock under the 1993 Equity
Plan, with a fair value at the date of grant of $8.57 per share. These
restricted shares vest 50% annually at the anniversary date of the grant. We
recorded compensation expense with respect to restricted stock awards of
approximately $0.3 million in 2002 which is recognized on a straight-line basis
over the two year vesting period of the restricted stock grants. In addition,
selected senior executives as designated by the CEO and approved by the
Compensation Committee are eligible for restricted stock awards under the
Long-Term Incentive Program (LTIP) based on our return on total capital
measured over a three-year period. Performance objectives under the LTIP are
based upon an incremental scale depending on achieving the specified target
return rate. No compensation expense was recorded in 2002, 2001 or 2000 with
respect to these awards and there are no outstanding grants under the program.

19. Commitments

Minimum future rental commitments under operating leases having non-cancelable
lease terms in excess of one year totaled approximately $11.5 million as of
December 31, 2002 and are payable as follows: $3.5 million in 2003, $2.9
million in 2004, $2.0 million in 2005, $0.9 million in 2006, $0.6 million in
2007 and $1.6 million thereafter. Rental expense for operating leases was $4.9
million in 2002, $2.9 million in 2001 and $3.3 million in 2000.

At December 31, 2002, we had commitments of $1.2 million for capital
expenditures.

20. Industry Segments and Foreign Operations

Our reportable segments are based on our three product lines: commercial
products, wholesale products and rod, bar and other products. Commercial
products consist primarily of high value-added products sold directly to
original equipment manufacturers. Wholesale products are commodity-type
plumbing tube products, which are primarily sold to plumbing wholesalers and distributors. Rod, bar and
other consists of products sold to a variety of customers and includes our European distribution business.

The accounting policies for each of the reportable segments are the same as
those described in Note 1. We evaluate the performance of our operating
segments based on sales and gross profit; however, we do not allocate asset
amounts and items of income and expense below gross profit or depreciation and
amortization.

F-32



---



---



##### Table of Contents



Summarized financial information concerning our reportable segments is shown in
the following table:

|                              |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 
|----------------------------- |  | ---------- | ------- | --------- |  | ------- | ------ | ------------ |  | -------- | ------ |  |  | - | ------- | 
|                              |  |            |         |           |  |         |        |              |  | Rod, Bar |        |  |  |  
|                              |  | Commercial |         | Wholesale |  | & Other |        | Consolidated
|                              |  |            |         |           |  |         |        |             
|(In thousands)                |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 
|Year ended December 31, 2002: |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 
|Sales                         |  | $          | 421,234 |           |  | $       | 93,938 |              |  | $        | 35,351 |  |  | $ | 550,523 | 
|Gross profit                  |  |            | 51,736  |           |  |         | 4,352  |              |  |          | 2,353  |  |  |   | 58,441  | 
|                              |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 
|Year ended December 31, 2001: |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 
|Sales                         |  | $          | 444,209 |           |  | $       | 97,570 |              |  | $        | 41,335 |  |  | $ | 583,114 | 
|Gross profit                  |  |            | 50,140  |           |  |         | 9,326  |              |  |          | 2,774  |  |  |   | 62,240  | 
|                              |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 
|Year ended December 31, 2000: |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 
|Sales                         |  | $          | 487,416 |           |  | $       | 96,993 |              |  | $        | 37,055 |  |  | $ | 621,464 | 
|Gross profit                  |  |            | 69,987  |           |  |         | 12,639 |              |  |          | 2,487  |  |  |   | 85,113  | 
|                              |  |            |         |           |  |         |        |              |  |          |        |  |  |   |         | 

Our manufacturing operations are primarily conducted in the U.S. and Canada.
We also have a manufacturing facility in Shanghai, China and in 2001, we opened
a manufacturing facility in Esposende, Portugal. In 2002, 2001 and 2000, no
customer accounted for as much as 10% of our net sales.

Sales by customer location and long-lived assets by geographic location of our
facilities is as follows:

|                              |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|----------------------------- |  | ---- | ------- | ------ |  | ---------- | ------ | ------------ |  | ------------- | ------ |  |  | - | ------- | 
|                              |  |      |         |        |  |            |        |              |  | Other Foreign |        |  |  |  
|                              |  | U.S. |         | Canada |  | Operations |        | Consolidated
|                              |  |      |         |        |  |            |        |             
|(In thousands)                |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Year ended December 31, 2002: |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Sales                         |  | $    | 417,000 |        |  | $          | 78,000 |              |  | $             | 56,000 |  |  | $ | 551,000 | 
|Long-lived assets             |  |      | 288,459 |        |  |            | 30,563 |              |  |               | 12,679 |  |  |   | 331,701 | 
|                              |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Year ended December 31, 2001: |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Sales                         |  | $    | 434,000 |        |  | $          | 81,000 |              |  | $             | 68,000 |  |  | $ | 583,000 | 
|Long-lived assets             |  |      | 294,413 |        |  |            | 31,820 |              |  |               | 10,291 |  |  |   | 336,524 | 
|                              |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Year ended December 31, 2000: |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Sales                         |  | $    | 478,000 |        |  | $          | 92,000 |              |  | $             | 51,000 |  |  | $ | 621,000 | 
|Long-lived assets             |  |      | 294,267 |        |  |            | 43,649 |              |  |               | 2,432  |  |  |   | 340,348 | 
|                              |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 

21. Restructuring and Other Charges

During the third quarter of 2001, we recognized restructuring and other charges
of $1.5 million ($1.0 million net of tax). We accrued and charged to expense
$1.1 million for severance benefits for approximately 40 salaried and hourly
employees. We offered a voluntary separation program to employees at several
of our facilities due to lack of demand for these facilities products, the
criteria for which was dependent on the employees age, job duties and years of
service. We separated these employees in order to reduce costs for anticipated
continued weakness in sales volumes and mix and anticipated reductions of
capacity utilization. We also accrued and charged to expense a $0.2 million
write-off of impaired assets and $0.2 million related to a previously closed
facility. As of December 31, 2001, we had separated 40 employees and had
accrued $0.3 million of restructuring cost representing our remaining cash
obligations. In 2002

F-33



---



---



##### Table of Contents



we paid approximately $0.3 million in cash related to the restructuring and
anticipate no further obligations.

22. Earnings Per Share

The following table sets forth the computation of earnings per share for the
years ended December 31:

|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|---------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | -------- | - |  | - | ------ | -
|                                                                 |  | 2002 |        | 2001 |  | 2000
|(In thousands, except per share amounts)                         |  |      |        |      |  |     
|Income from continuing operations                                |  | $    | 7,170  |      |  | $    | 11,442   |   |  | $ | 25,907 |  
|Income (loss) from discontinued operations, net of tax           |  |      | (1,610 | )    |  |      | (31,240  | ) |  |   | 782    |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Net income (loss)                                                |  |      | 5,560  |      |  |      | (19,798  | ) |  |   | 26,689 |  
|Dividends on preferred stock                                     |  |      | (58    | )    |  |      | (280     | ) |  |   | (280   | )
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Net income (loss) available to common shares                     |  | $    | 5,502  |      |  |      | ($20,078 | ) |  | $ | 26,409 |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Basic weighted average common shares                             |  |      | 12,231 |      |  |      | 12,077   |   |  |   | 12,153 |  
|Stock options                                                    |  |      | 131    |      |  |      | 230      |   |  |   | 191    |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Diluted weighted average common and common equivalent
shares (1) |  |      | 12,362 |      |  |      | 12,307   |   |  |   | 12,344 |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Earnings per common sharebasic:                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Income from continuing operations                                |  | $    | 0.58   |      |  | $    | 0.92     |   |  | $ | 2.11   |  
|Income (loss) from discontinued operations                       |  |      | (0.13  | )    |  |      | (2.58    | ) |  |   | 0.06   |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Net income (loss) per common sharebasic                         |  | $    | 0.45   |      |  |      | ($1.66   | ) |  | $ | 2.17   |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Earnings per common sharediluted:                               |  |      |        |      |  |      |          |   |  |   |        |  
|Income from continuing operations                                |  | $    | 0.58   |      |  | $    | 0.91     |   |  | $ | 2.08   |  
|Income (loss) from discontinued operations                       |  |      | (0.13  | )    |  |      | (2.54    | ) |  |   | 0.06   |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  
|Net
income (loss) per common sharediluted                       |  | $    | 0.45   |      |  |      | ($1.63   | ) |  | $ | 2.14   |  
|                                                                 |  |      |        |      |  |      |          |   |  |   |        |  



---

|(1) |  | For the year ended December 31, 2002, 2001 and 2000, there were 1.5
million, 0.4 million and 1.0 million anti-dilutive or out-of-the-money stock
options that were excluded from the calculation of diluted weighted average
common and common equivalent shares.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-34



---



---



##### Table of Contents



23. Quarterly Results of Operations (Unaudited)

The following is a summary of the unaudited quarterly results of operations for
the years ended December 31, 2002 and 2001.

|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|--------------------------------------------- |  | -------- | ------- | ------- |  | ------------ | ------- | ----------- |  | - | ------- |  |  | - | ------- | -
|2002                                          |  | March 31 |         | June 30 |  | September 29 |         | December 31
|                                              |  |          |         |         |  |              |         |            
|(In thousands, except per share amounts)      |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Net sales                                     |  | $        | 137,543 |         |  | $            | 152,547 |             |  | $ | 134,817 |  |  | $ | 125,616 |  
|Gross profit                                  |  |          | 14,323  |         |  |              | 19,212  |             |  |   | 14,470  |  |  |   | 10,436  |  
|Income from continuing operations             |  |          | 1,688   |         |  |              | 3,486   |             |  |   | 1,827   |  |  |   | 169     |  
|Loss from discontinued operations, net of tax |  |          |        |         |  |              |        |             |  |   |        |  |  |   | (1,610  | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Net income (loss)                             |  | $        | 1,688   |         |  | $            | 3,486   |             |  | $ | 1,827   |  |  | $ | (1,441  | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Basic earnings per common share:              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Income from continuing operations             |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | 0.01    |  
|Loss from discontinued operations             |  |          |        |         |  |              |        |             |  |   |        |  |  |   | (0.13   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Net income (loss)                             |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | (0.12   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Diluted earnings per common share:            |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Income from continuing operations             |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | 0.01    |  
|Loss from discontinued operations             |  |          |        |         |  |              |        |             |  |   |        |  |  |   | (0.13   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Net income (loss)                             |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | (0.12   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  

|                                              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|--------------------------------------------- |  | ------- | ------- | ------ |  | ------------ | ------- | ----------- |  | - | ------- | - |  | - | ------- | -
|2001                                          |  | April 1 |         | July 1 |  | September 30 |         | December 31
|                                              |  |         |         |        |  |              |         |            
|(In thousands, except per share amounts)      |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Net sales                                     |  | $       | 172,437 |        |  | $            | 161,517 |             |  | $ | 136,103 |   |  | $ | 113,057 |  
|Gross profit                                  |  |         | 21,766  |        |  |              | 15,792  |             |  |   | 14,912  |   |  |   | 9,770   |  
|Restructuring and other charges               |  |         |        |        |  |              |        |             |  |   | 1,546   |   |  |   |        |  
|Income (loss) from continuing operations      |  |         | 6,975   |        |  |              | 3,082   |             |  |   | 2,137   |   |  |   | (752    | )
|Loss from discontinued operations, net of tax |  |         | (848    | )      |  |              | (3,643  | )           |  |   | (938    | ) |  |   | (25,811 | )
|                                              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Net income (loss)                             |  | $       | 6,127   |        |  | $            | (561    | )           |  | $ | 1,199   |   |  | $ | (26,563 | )
|                                              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Basic earnings per common share:              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Income (loss) from continuing operations      |  | $       | 0.57    |        |  | $            | 0.25    |             |  | $ | 0.17    |   |  | $ | (0.07   | )
|Loss from discontinued operations             |  |         | (0.07   | )      |  |              | (0.30   | )           |  |   | (0.08   | ) |  |   | (2.13   | )
|                                              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Net income (loss)                             |  | $       | 0.50    |        |  | $            | (0.05   | )           |  | $ | 0.09    |   |  | $ | (2.20   | )
|                                              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Diluted earnings per common share:            |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Income (loss) from continuing operations      |  | $       | 0.56    |        |  | $            | 0.24    |             |  | $ | 0.17    |   |  | $ | (0.07   | )
|Loss from discontinued operations             |  |         | (0.07   | )      |  |              | (0.29   | )           |  |   | (0.08   | ) |  |   | (2.13   | )
|                                              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  
|Net income (loss)                             |  | $       | 0.49    |        |  | $            | (0.05   | )           |  | $ | 0.09    |   |  | $ | (2.20   | )
|                                              |  |         |         |        |  |              |         |             |  |   |         |   |  |   |         |  

F-35



---



---



##### Table of Contents



24. Condensed Consolidating Financial Information

The following tables present condensed consolidating financial information for:
(a) Wolverine Tube, Inc. (the Parent) on a stand-alone basis; (b) on a
combined basis, the guarantors of the 10.5% Senior Notes (Subsidiary
Guarantors), which include TF Investor, Inc.; Tube Forming, L.P.; Wolverine
Finance, LLC; Wolverine China Investments, LLC; STPC Holding, Inc.; Small Tube
Manufacturing, LLC; Wolverine Joining Technologies, LLC; and Tube Forming
Holdings, Inc.; and (c) on a combined basis, the Non-Guarantor Subsidiaries,
which include Wolverine Tube (Canada) Inc.; 1263143 Ontario, Inc.; 1158909
Ontario, Inc.; 1105836 Ontario, Inc.; Wolverine Tube (Shanghai) Co., Limited;
Wolverine European Holdings BV; Wolverine Tube Europe BV; Wolverine Tube,
BV; Wolverine Tubagem (Portugal), Lda; Wolverine Joining Technologies Canada,
Inc.; Ratcliffs Copper and Brass Sales, Ltd.; Wolverine Europe; Wolverine Asia,
Limited; and Small Tube Europe NV. Each of the Subsidiary Guarantors is
wholly-owned by Wolverine Tube, Inc. The guarantees issued by each of the
Subsidiary Guarantors are full, unconditional, joint and several. Accordingly,
separate financial statements of the wholly-owned Subsidiary Guarantors are not
presented because the Subsidiary Guarantors are jointly, severally and
unconditionally liable under the guarantees, and we believe separate financial
statements and other disclosures regarding the Subsidiary Guarantors are not
material to investors. Furthermore, there are no significant legal
restrictions on the Parents ability to obtain funds from its subsidiaries by
dividend or loan.

The parent is comprised of Alabama, Oklahoma, Tennessee, and Mississippi
manufacturing operations and certain corporate management, sales and marketing,
information services and finance functions.

F-36



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
For the Year Ended December 31, 2002

|                                                             |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |        |  
|------------------------------------------------------------ | ------------------------------ | - | ------- | ------ | ---------- | - | ------------ | ------ | ------------- | - | ------------ | ----- | - | - | ------- | - |  | - | ------- | ------ | -
|                                                             |                                |   |         |        |            |   | Subsidiary   |        | Non-Guarantor |   |              |       |   |   |         |   | 
|                                                             |                                |   | Parent  |        | Guarantors |   | Subsidiaries |        | Eliminations  |   | Consolidated
|                                                             |                                |   |         |        |            |   |              |        |               |   |             
|(In thousands)                                               |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       
|Net sales                                                    |                                | $ | 293,035 |        |            | $ | 119,340      |        |               | $ | 177,766      |       |   | $ | (39,618 | ) |  | $ | 550,523 |       
|Cost of goods sold                                           |                                |   | 271,871 |        |            |   | 102,591      |        |               |   | 157,238      |       |   |   | (39,618 | ) |  |   | 492,082 |       
|                                                             |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       
|Gross profit                                                 |                                |   | 21,164  |        |            |   | 16,749       |        |               |   | 20,528       |       |   |   |        |   |  |   | 58,441  |       
|Selling, general and administrative expenses                 |                                |   | 24,137  |        |            |   | 2,904        |        |               |   | 3,575        |       |   |   |        |   |  |   | 30,616  |       
|                                                             |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       
|Operating income (loss) from continuing
operations           |                                |   | (2,973  | )      |            |   | 13,845       |        |               |   | 16,953       |       |   |   |        |   |  |   | 27,825  |       
|Other (income) expenses:                                     |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       
|                                                             | Interest expense, net          |   |         | 20,489 |            |   |              | (24    | )             |   |              | (784  | ) |   |         |  |  |   |         | 19,681 |  
|                                                             | Gain on extinguishment of debt |   |         | (1,349 | )          |   |              |       |               |   |              |      |   |   |         |  |  |   |         | (1,349 | )
|                                                             | Amortization and other, net    |   |         | 4,145  |            |   |              | (5,041 | )             |   |              | 1,904 |   |   |         |  |  |   |         | 1,008  |  
|                                                             |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       
|Income (loss) from continuing operations
before income taxes |                                |   | (26,258 | )      |            |   | 18,910       |        |               |   | 15,833       |       |   |   |        |   |  |   | 8,485   |       
|Income tax provision (benefit)                               |                                |   | (9,530  | )      |            |   | 7,461        |        |               |   | 3,384        |       |   |   |        |   |  |   | 1,315   |       
|                                                             |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       
|Income (loss) from continuing operations                     |                                |   | (16,728 | )      |            |   | 11,449       |        |               |   | 12,449       |       |   |   |        |   |  |   | 7,170   |       
|Loss from discontinued operations, net of tax                |                                |   | (1,117  | )      |            |   | (801         | )      |               |   | 308          |       |   |   |        |   |  |   | (1,610  | )     
|Equity in earnings of subsidiaries                           |                                |   | 23,405  |        |            |   |             |        |               |   |             |       |   |   | (23,405 | ) |  |   |        |       
|                                                             |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       
|Net income                                                   |                                | $ | 5,560   |        |            | $ | 10,648       |        |               | $ | 12,757       |       |   | $ | (23,405 | ) |  | $ | 5,560   |       
|                                                             |                                |   |         |        |            |   |              |        |               |   |              |       |   |   |         |   |  |   |         |       

Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
For the Year Ended December 31, 2001

|                                                             |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |        |  
|------------------------------------------------------------ | --------------------------- | - | ------- | ------ | ---------- | - | ------------ | ------ | ------------- | - | ------------ | ------ | - | - | ------- | - |  | - | ------- | ------ | -
|                                                             |                             |   |         |        |            |   | Subsidiary   |        | Non-Guarantor |   |              |        |   |   |         |   | 
|                                                             |                             |   | Parent  |        | Guarantors |   | Subsidiaries |        | Eliminations  |   | Consolidated
|                                                             |                             |   |         |        |            |   |              |        |               |   |             
|(In thousands)                                               |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Net sales                                                    |                             | $ | 307,498 |        |            | $ | 126,716      |        |               | $ | 178,544      |        |   | $ | (29,644 | ) |  | $ | 583,114 |       
|Cost of goods sold                                           |                             |   | 276,764 |        |            |   | 114,237      |        |               |   | 159,517      |        |   |   | (29,644 | ) |  |   | 520,874 |       
|                                                             |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Gross profit                                                 |                             |   | 30,734  |        |            |   | 12,479       |        |               |   | 19,027       |        |   |   |        |   |  |   | 62,240  |       
|Selling, general and administrative expenses                 |                             |   | 23,755  |        |            |   | 4,853        |        |               |   | 3,646        |        |   |   |        |   |  |   | 32,254  |       
|Restructuring and other charges                              |                             |   | 1,089   |        |            |   | 397          |        |               |   | 60           |        |   |   |        |   |  |   | 1,546   |       
|                                                             |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Operating income from continuing operations                  |                             |   | 5,890   |        |            |   | 7,229        |        |               |   | 15,321       |        |   |   |        |   |  |   | 28,440  |       
|Other (income) expenses:                                     |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|                                                             | Interest expense, net       |   |         | 14,895 |            |   |              | (153   | )             |   |              | (1,642 | ) |   |         |  |  |   |         | 13,100 |  
|                                                             | Amortization and other, net |   |         | 2,515  |            |   |              | (4,483 | )             |   |              | 1,521  |   |   |         |  |  |   |         | (447   | )
|                                                             |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Income (loss) from continuing operations
before income taxes |                             |   | (11,520 | )      |            |   | 11,865       |        |               |   | 15,442       |        |   |   |        |   |  |   | 15,787  |       
|Income tax provision (benefit)                               |                             |   | (4,674  | )      |            |   | 4,893        |        |               |   | 4,126        |        |   |   |        |   |  |   | 4,345   |       
|                                                             |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Income (loss) from continuing operations                     |                             |   | (6,846  | )      |            |   | 6,972        |        |               |   | 11,316       |        |   |   |        |   |  |   | 11,442  |       
|Loss from discontinued operations, net of tax                |                             |   |        |        |            |   |             |        |               |   | (31,240      | )      |   |   |        |   |  |   | (31,240 | )     
|Equity in losses of subsidiaries                             |                             |   | (12,952 | )      |            |   |             |        |               |   |             |        |   |   | 12,952  |   |  |   |        |       
|                                                             |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Net income (loss)                                            |                             | $ | (19,798 | )      |            | $ | 6,972        |        |               | $ | (19,924      | )      |   | $ | 12,952  |   |  | $ | (19,798 | )     
|                                                             |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       

F-37



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
For the Year Ended December 31, 2000

|                                                      |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |        | 
|----------------------------------------------------- | --------------------------- | - | ------- | ------ | ---------- | - | ------------ | ------ | ------------- | - | ------------ | ------ | - | - | ------- | - |  | - | ------- | ------ | 
|                                                      |                             |   |         |        |            |   | Subsidiary   |        | Non-Guarantor |   |              |        |   |   |         |   | 
|                                                      |                             |   | Parent  |        | Guarantors |   | Subsidiaries |        | Eliminations  |   | Consolidated
|                                                      |                             |   |         |        |            |   |              |        |               |   |             
|(In thousands)                                        |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Net sales                                             |                             | $ | 356,101 |        |            | $ | 112,865      |        |               | $ | 182,130      |        |   | $ | (29,632 | ) |  | $ | 621,464 |       
|Cost of goods sold                                    |                             |   | 303,888 |        |            |   | 98,811       |        |               |   | 163,284      |        |   |   | (29,632 | ) |  |   | 536,351 |       
|                                                      |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Gross profit                                          |                             |   | 52,213  |        |            |   | 14,054       |        |               |   | 18,846       |        |   |   |        |   |  |   | 85,113  |       
|Selling, general and administrative expenses          |                             |   | 25,397  |        |            |   | 3,924        |        |               |   | 2,640        |        |   |   |        |   |  |   | 31,961  |       
|                                                      |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Operating income from continuing operations           |                             |   | 26,816  |        |            |   | 10,130       |        |               |   | 16,206       |        |   |   |        |   |  |   | 53,152  |       
|Other (income) expenses:                              |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|                                                      | Interest expense, net       |   |         | 14,596 |            |   |              | (399   | )             |   |              | (2,029 | ) |   |         |  |  |   |         | 12,168 | 
|                                                      | Amortization and other, net |   |         | 11,691 |            |   |              | (6,651 | )             |   |              | (4,623 | ) |   |         |  |  |   |         | 417    | 
|                                                      |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Income from continuing operations before
income taxes |                             |   | 529     |        |            |   | 17,180       |        |               |   | 22,858       |        |   |   |        |   |  |   | 40,567  |       
|Income tax provision                                  |                             |   | 263     |        |            |   | 7,274        |        |               |   | 7,123        |        |   |   |        |   |  |   | 14,660  |       
|                                                      |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Income from continuing operations                     |                             |   | 266     |        |            |   | 9,906        |        |               |   | 15,735       |        |   |   |        |   |  |   | 25,907  |       
|Income from discontinued operations, net of tax       |                             |   |        |        |            |   |             |        |               |   | 782          |        |   |   |        |   |  |   | 782     |       
|Equity in earnings of subsidiaries                    |                             |   | 26,423  |        |            |   |             |        |               |   |             |        |   |   | (26,423 | ) |  |   |        |       
|                                                      |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       
|Net income                                            |                             | $ | 26,689  |        |            | $ | 9,906        |        |               | $ | 16,517       |        |   | $ | (26,423 | ) |  | $ | 26,689  |       
|                                                      |                             |   |         |        |            |   |              |        |               |   |              |        |   |   |         |   |  |   |         |       

F-38



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 2002

|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |        |        | 
|------------------------------------------ | -------------------- | -------------------------- | ------- | ------ | ------- | ---------- | -------- | ------------ | -------- | ------------- | ------- | ------------ | ------ | - | -------- | - | -- | - | ------- | ------ | ------ | 
|                                           |                      |                            |         |        |         |            |          | Subsidiary   |          | Non-Guarantor |         |              |        |   |          |   |    |  
|                                           |                      |                            |         | Parent |         | Guarantors |          | Subsidiaries |          | Eliminations  |         | Consolidated
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |             
|(In thousands)                             |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Assets                                     |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Current assets                             |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|                                           | Cash and equivalents |                            | $       | 22,461 |         |            | $        |             |          |               | $       | 31,459       |        |   | $        |  |    |   | $       | 53,920 |       
|                                           |                      | Accounts receivable, net   |         |        | 275     |            |          |              | 43,027   |               |         |              | 21,910 |   |          |   |   |   |         |        | 65,212 | 
|                                           |                      | Inventories                |         |        | 47,731  |            |          |              | 15,964   |               |         |              | 21,790 |   |          |   |   |   |         |        | 85,485 | 
|                                           |                      | Refundable income taxes    |         |        | 10,796  |            |          |              | (2,703   | )             |         |              | (1,746 | ) |          |   |   |   |         |        | 6,347  | 
|                                           |                      | Prepaid expenses and other |         |        | 5,032   |            |          |              | 2,496    |               |         |              | 527    |   |          |   |   |   |         |        | 8,055  | 
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Total current assets                       |                      |                            | 86,295  |        |         |            | 58,784   |              |          |               | 73,940  |              |        |   |         |   |    |   | 219,019 |       
|Property, plant and equipment, net         |                      |                            | 140,036 |        |         |            | 33,727   |              |          |               | 35,236  |              |        |   |         |   |    |   | 208,999 |       
|Deferred charges, net                      |                      |                            | 12,411  |        |         |            | 23       |              |          |               | 1,377   |              |        |   |         |   |    |   | 13,811  |       
|Goodwill, net                              |                      |                            | 23,154  |        |         |            | 75,521   |              |          |               | 1,425   |              |        |   |         |   |    |   | 100,100 |       
|Assets held for sale                       |                      |                            | 5,428   |        |         |            |         |              |          |               | 3,363   |              |        |   |         |   |    |   | 8,791   |       
|Investments in subsidiaries                |                      |                            | 368,585 |        |         |            | 302      |              |          |               |        |              |        |   | (368,887 | ) |    |   |        |       
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Total assets                               |                      | $                          | 635,909 |        |         | $          | 168,357  |              |          | $             | 115,341 |              |        | $ | (368,887 | ) |    | $ | 550,720 |       
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Liabilities and Stockholders Equity       |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Current liabilities                        |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|                                           |                      | Accounts payable           |         | $      | 18,310  |            |          | $            | 2,714    |               |         | $            | 9,267  |   |          | $ | (1 | ) |         | $      | 30,290 | 
|                                           |                      | Accrued liabilities        |         |        | 10,831  |            |          |              | 1,001    |               |         |              | 7,461  |   |          |   |   |   |         |        | 19,293 | 
|                                           |                      | Short-term borrowings      |         |        |        |            |          |              |         |               |         |              | 1,217  |   |          |   |   |   |         |        | 1,217  | 
|                                           |                      | Intercompany balances      |         |        | 116,757 |            |          |              | (118,477 | )             |         |              | 1,720  |   |          |   |   |   |         |        |       | 
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Total current liabilities                  |                      |                            | 145,898 |        |         |            | (114,762 | )            |          |               | 19,665  |              |        |   | (1       | ) |    |   | 50,800  |       
|Deferred income taxes                      |                      |                            | 12,321  |        |         |            | 7,385    |              |          |               | (7,804  | )            |        |   |         |   |    |   | 11,902  |       
|Long-term debt                             |                      |                            | 253,689 |        |         |            |         |              |          |               | 2,023   |              |        |   |         |   |    |   | 255,712 |       
|Pension liabilities                        |                      |                            | 11,307  |        |         |            |         |              |          |               | 3,233   |              |        |   |         |   |    |   | 14,540  |       
|Postretirement benefit obligation          |                      |                            | 10,602  |        |         |            |         |              |          |               | 5,064   |              |        |   |         |   |    |   | 15,666  |       
|Accrued environmental remediation          |                      |                            | 1,457   |        |         |            |         |              |          |               | 8       |              |        |   |         |   |    |   | 1,465   |       
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Total liabilities                          |                      |                            | 435,274 |        |         |            | (107,377 | )            |          |               | 22,189  |              |        |   | (1       | ) |    |   | 350,085 |       
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Stockholders equity                       |                      |                            | 200,635 |        |         |            | 275,734  |              |          |               | 93,152  |              |        |   | (368,886 | ) |    |   | 200,635 |       
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       
|Total liabilities and stockholders equity |                      | $                          | 635,909 |        |         | $          | 168,357  |              |          | $             | 115,341 |              |        | $ | (368,887 | ) |    | $ | 550,720 |       
|                                           |                      |                            |         |        |         |            |          |              |          |               |         |              |        |   |          |   |    |   |         |       

F-39



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 2001

|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |        |         | 
|---------------------------------------------------------------------- | -------------------- | -------------------------- | ------- | ------ | ------ | ---------- | ------- | ------------ | -------- | ------------- | ------- | ------------ | ------ | - | -------- | - | ---- | - | ------- | ------ | ------- | 
|                                                                       |                      |                            |         |        |        |            |         | Subsidiary   |          | Non-Guarantor |         |              |        |   |          |   |      |  
|                                                                       |                      |                            |         | Parent |        | Guarantors |         | Subsidiaries |          | Eliminations  |         | Consolidated
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |             
|(In thousands)                                                         |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Assets                                                                 |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Current assets                                                         |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|                                                                       | Cash and equivalents |                            | $       |       |        |            | $       |             |          |               | $       | 22,739       |        |   | $        |  |      |   | $       | 22,739 |        
|                                                                       |                      | Accounts receivable, net   |         |        | (6     | )          |         |              | 43,786   |               |         |              | 23,384 |   |          |   |     |   |         |        | 67,164  | 
|                                                                       |                      | Inventories                |         |        | 57,849 |            |         |              | 17,266   |               |         |              | 28,245 |   |          |   |     |   |         |        | 103,360 | 
|                                                                       |                      | Refundable income taxes    |         |        | 2,823  |            |         |              | (808     | )             |         |              | 395    |   |          |   |     |   |         |        | 2,410   | 
|                                                                       |                      | Prepaid expenses and other |         |        | 3,327  |            |         |              | 3,291    |               |         |              | 612    |   |          |   |     |   |         |        | 7,230   | 
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Total current assets                                                   |                      |                            | 63,993  |        |        |            | 63,535  |              |          |               | 75,375  |              |        |   |         |   |      |   | 202,903 |       
|Property, plant and equipment, net                                     |                      |                            | 148,041 |        |        |            | 36,018  |              |          |               | 34,417  |              |        |   |         |   |      |   | 218,476 |       
|Deferred charges, net                                                  |                      |                            | 2,613   |        |        |            | 61      |              |          |               | 451     |              |        |   |         |   |      |   | 3,125   |       
|Goodwill, net                                                          |                      |                            | 23,154  |        |        |            | 75,521  |              |          |               | 1,195   |              |        |   |          |   |      |   | 99,870  |       
|Assets held for sale                                                   |                      |                            | 5,381   |        |        |            |        |              |          |               | 3,691   |              |        |   |         |   |      |   | 9,072   |       
|Prepaid pensions                                                       |                      |                            | 4,866   |        |        |            |        |              |          |               | 1,115   |              |        |   |         |   |      |   | 5,981   |       
|Investments in subsidiaries                                            |                      |                            | 344,412 |        |        |            | 302     |              |          |               |        |              |        |   | (344,714 | ) |      |   |        |       
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Total assets                                                           |                      | $                          | 592,460 |        |        | $          | 175,437 |              |          | $             | 116,244 |              |        | $ | (344,714 | ) |      | $ | 539,427 |       
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Liabilities, Redeemable Preferred
Stock and Stockholders Equity       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Current liabilities                                                    |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|                                                                       |                      | Accounts payable           |         | $      | 17,274 |            |         | $            | 3,523    |               |         | $            | 14,236 |   |          | $ | (896 | ) |         | $      | 34,137  | 
|                                                                       |                      | Accrued liabilities        |         |        | 10,960 |            |         |              | 884      |               |         |              | 13,845 |   |          |   |     |   |         |        | 25,689  | 
|                                                                       |                      | Short-term borrowings      |         |        |       |            |         |              |         |               |         |              | 1,684  |   |          |   |     |   |         |        | 1,684   | 
|                                                                       |                      | Intercompany balances      |         |        | 89,383 |            |         |              | (100,200 | )             |         |              | 9,922  |   |          |   | 895  |   |         |        |        | 
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Total current liabilities                                              |                      |                            | 117,617 |        |        |            | (95,793 | )            |          |               | 39,687  |              |        |   | (1       | ) |      |   | 61,510  |       
|Deferred income taxes                                                  |                      |                            | 11,070  |        |        |            | 6,144   |              |          |               | (7,989  | )            |        |   |         |   |      |   | 9,225   |       
|Long-term debt                                                         |                      |                            | 247,698 |        |        |            |        |              |          |               |        |              |        |   |         |   |      |   | 247,698 |       
|Postretirement benefit obligation                                      |                      |                            | 10,809  |        |        |            |        |              |          |               | 4,911   |              |        |   |         |   |      |   | 15,720  |       
|Accrued environmental remediation                                      |                      |                            | 1,854   |        |        |            |        |              |          |               | 8       |              |        |   |         |   |      |   | 1,862   |       
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Total liabilities                                                      |                      |                            | 389,048 |        |        |            | (89,649 | )            |          |               | 36,617  |              |        |   | (1       | ) |      |   | 336,015 |       
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Redeemable preferred stock                                             |                      |                            | 2,000   |        |        |            |        |              |          |               |        |              |        |   |         |   |      |   | 2,000   |       
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Stockholders equity                                                   |                      |                            | 201,412 |        |        |            | 265,086 |              |          |               | 79,627  |              |        |   | (344,713 | ) |      |   | 201,412 |       
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       
|Total liabilities, redeemable
preferred stock and stockholders
equity |                      | $                          | 592,460 |        |        | $          | 175,437 |              |          | $             | 116,244 |              |        | $ | (344,714 | ) |      | $ | 539,427 |       
|                                                                       |                      |                            |         |        |        |            |         |              |          |               |         |              |        |   |          |   |      |   |         |       

F-40



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2002

|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ------- | ---------- |  | ------------ | ------- | ------------- |  | ------------ | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                     |  |        |         |            |  | Subsidiary   |         | Non-Guarantor |  |              |        |   |  |   |         |  
|                                                     |  | Parent |         | Guarantors |  | Subsidiaries |         | Eliminations  |  | Consolidated
|                                                     |  |        |         |            |  |              |         |               |  |             
|(In thousands)                                       |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Operating Activities                                 |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Income from continuing operations                    |  | $      | 6,677   |            |  | $            | 11,449  |               |  | $            | 12,449 |   |  | $ | (23,405 | ) |  | $ | 7,170   |  
|Depreciation and amortization                        |  |        | 12,392  |            |  |              | 3,381   |               |  |              | 2,643  |   |  |   |        |   |  |   | 18,416  |  
|Other non-cash items                                 |  |        | (4,623  | )          |  |              | 2,720   |               |  |              | 244    |   |  |   |        |   |  |   | (1,659  | )
|Equity in earnings of subsidiaries                   |  |        | (23,405 | )          |  |              |        |               |  |              |       |   |  |   | 23,405  |   |  |   | -       |  
|Changes in operating assets and liabilities          |  |        | 13,267  |            |  |              | 2,638   |               |  |              | 1,604  |   |  |   |        |   |  |   | 17,509  |  
|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash provided by operating activities            |  |        | 4,308   |            |  |              | 20,188  |               |  |              | 16,940 |   |  |   |        |   |  |   | 41,436  |  
|Investing Activities                                 |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Additions to property, plant and equipment           |  |        | (5,120  | )          |  |              | (986    | )             |  |              | (1,641 | ) |  |   |        |   |  |   | (7,747  | )
|Other                                                |  |        | (1      | )          |  |              |        |               |  |              | 1      |   |  |   |        |   |  |   | -       |  
|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash used for investing activities               |  |        | (5,121  | )          |  |              | (986    | )             |  |              | (1,640 | ) |  |   |        |   |  |   | (7,747  | )
|Financing Activities                                 |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Financing fees and expenses paid                     |  |        | (8,687  | )          |  |              |        |               |  |              |       |   |  |   |        |   |  |   | (8,687  | )
|Net payments on revolving credit facilities          |  |        | (97,907 | )          |  |              |        |               |  |              | (465   | ) |  |   |        |   |  |   | (98,372 | )
|Intercompany borrowings (payments)                   |  |        | 27,309  |            |  |              | (18,351 | )             |  |              | (8,958 | ) |  |   |        |   |  |   | -       |  
|Net increase in note payable                         |  |        |        |            |  |              |        |               |  |              | 2,021  |   |  |   |        |   |  |   | 2,021   |  
|Proceeds from issuance of senior notes               |  |        | 118,546 |            |  |              |        |               |  |              |       |   |  |   |        |   |  |   | 118,546 |  
|Retirement of senior notes                           |  |        | (13,901 | )          |  |              |        |               |  |              |       |   |  |   |        |   |  |   | (13,901 | )
|Issuance of common stock                             |  |        | 89      |            |  |              |        |               |  |              |       |   |  |   |        |   |  |   | 89      |  
|Redemption of preferred stock                        |  |        | (1,000  | )          |  |              |        |               |  |              |       |   |  |   |        |   |  |   | (1,000  | )
|Dividends paid on preferred stock                    |  |        | (58     | )          |  |              |        |               |  |              |       |   |  |   |        |   |  |   | (58     | )
|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash provided by (used for) financing
activities |  |        | 24,391  |            |  |              | (18,351 | )             |  |              | (7,402 | ) |  |   |        |   |  |   | (1,362  | )
|Effect of exchange rate on cash and equivalents      |  |        |        |            |  |              | (50     | )             |  |              | 924    |   |  |   |        |   |  |   | 874     |  
|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash provided by continuing operations           |  |        | 23,578  |            |  |              | 801     |               |  |              | 8,822  |   |  |   |        |   |  |   | 33,201  |  
|Net cash used for discontinued operations            |  |        | (1,117  | )          |  |              | (801    | )             |  |              | (102   | ) |  |   |        |   |  |   | (2,020  | )
|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Net increase in cash and equivalents                 |  |        | 22,461  |            |  |              |        |               |  |              | 8,720  |   |  |   |        |   |  |   | 31,181  |  
|Cash and equivalents at beginning of period          |  |        |        |            |  |              |        |               |  |              | 22,739 |   |  |   |        |   |  |   | 22,739  |  
|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  
|Cash and equivalents at end of period                |  | $      | 22,461  |            |  | $            |        |               |  | $            | 31,459 |   |  | $ |        |   |  | $ | 53,920  |  
|                                                     |  |        |         |            |  |              |         |               |  |              |        |   |  |   |         |   |  |   |         |  

F-41



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2001

|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ------- | ---------- |  | ------------ | ------ | ------------- |  | ------------ | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                     |  |        |         |            |  | Subsidiary   |        | Non-Guarantor |  |              |         |   |  |   |         |  
|                                                     |  | Parent |         | Guarantors |  | Subsidiaries |        | Eliminations  |  | Consolidated
|                                                     |  |        |         |            |  |              |        |               |  |             
|(In thousands)                                       |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Operating Activities                                 |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Income (loss) from continuing operations             |  | $      | (19,798 | )          |  | $            | 6,972  |               |  | $            | 11,316  |   |  | $ | 12,952  |   |  | $ | 11,442  |  
|Depreciation and amortization                        |  |        | 11,029  |            |  |              | 5,393  |               |  |              | 2,257   |   |  |   |        |   |  |   | 18,679  |  
|Non-cash portion of restructuring and other charges  |  |        | 889     |            |  |              | 642    |               |  |              |        |   |  |   |        |   |  |   | 1,531   |  
|Other non-cash items                                 |  |        | (735    | )          |  |              | (2,583 | )             |  |              | 1,823   |   |  |   |        |   |  |   | (1,495  | )
|Equity in earnings of subsidiaries                   |  |        | 12,952  |            |  |              |       |               |  |              |        |   |  |   | (12,952 | ) |  |   |        |  
|Changes in operating assets and liabilities          |  |        | 5,937   |            |  |              | (7,849 | )             |  |              | (1,598  | ) |  |   |        |   |  |   | (3,510  | )
|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash provided by operating activities            |  |        | 10,274  |            |  |              | 2,575  |               |  |              | 13,798  |   |  |   |        |   |  |   | 26,647  |  
|Investing Activities                                 |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Additions to property, plant and equipment           |  |        | (19,441 | )          |  |              | (1,447 | )             |  |              | (6,724  | ) |  |   |        |   |  |   | (27,612 | )
|Other                                                |  |        | (1,530  | )          |  |              | 3      |               |  |              | (74     | ) |  |   |        |   |  |   | (1,601  | )
|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash used for investing activities               |  |        | (20,971 | )          |  |              | (1,444 | )             |  |              | (6,798  | ) |  |   |        |   |  |   | (29,213 | )
|Financing Activities                                 |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net borrowings on revolving credit facilities        |  |        | 16,505  |            |  |              |       |               |  |              | 219     |   |  |   |        |   |  |   | 16,724  |  
|Intercompany borrowings (payments)                   |  |        | (5,658  | )          |  |              | (1,131 | )             |  |              | 6,789   |   |  |   |        |   |  |   |        |  
|Net decrease in note payable                         |  |        |        |            |  |              |       |               |  |              | (320    | ) |  |   |        |   |  |   | (320    | )
|Issuance of common stock                             |  |        | 130     |            |  |              |       |               |  |              |        |   |  |   |        |   |  |   | 130     |  
|Dividends paid on preferred stock                    |  |        | (280    | )          |  |              |       |               |  |              |        |   |  |   |        |   |  |   | (280    | )
|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash provided by (used for) financing activities |  |        | 10,697  |            |  |              | (1,131 | )             |  |              | 6,688   |   |  |   |        |   |  |   | 16,254  |  
|Effect of exchange rate on cash and equivalents      |  |        |        |            |  |              |       |               |  |              | (1,139  | ) |  |   |        |   |  |   | (1,139  | )
|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash provided by continuing operations           |  |        |        |            |  |              |       |               |  |              | 12,549  |   |  |   |        |   |  |   | 12,549  |  
|Net cash used for discontinued operations            |  |        |        |            |  |              |       |               |  |              | (13,268 | ) |  |   |        |   |  |   | (13,268 | )
|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net decrease in cash and equivalents                 |  |        |        |            |  |              |       |               |  |              | (719    | ) |  |   |        |   |  |   | (719    | )
|Cash and equivalents at beginning of period          |  |        |        |            |  |              |       |               |  |              | 23,458  |   |  |   |        |   |  |   | 23,458  |  
|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Cash and equivalents at end of period                |  | $      |        |            |  | $            |       |               |  | $            | 22,739  |   |  | $ |        |   |  | $ | 22,739  |  
|                                                     |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  

F-42



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2000

|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|--------------------------------------------------------- |  | ------ | ------- | ---------- |  | ------------ | ------ | ------------- |  | ------------ | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                          |  |        |         |            |  | Subsidiary   |        | Non-Guarantor |  |              |         |   |  |   |         |  
|                                                          |  | Parent |         | Guarantors |  | Subsidiaries |        | Eliminations  |  | Consolidated
|                                                          |  |        |         |            |  |              |        |               |  |             
|(In thousands)                                            |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Operating Activities                                      |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Income (loss) from continuing operations                  |  | $      | 26,689  |            |  | $            | 9,906  |               |  | $            | 15,735  |   |  | $ | (26,423 | ) |  | $ | 25,907  |  
|Depreciation and amortization                             |  |        | 10,916  |            |  |              | 3,916  |               |  |              | 2,208   |   |  |   |        |   |  |   | 17,040  |  
|Other non-cash items                                      |  |        | 5,937   |            |  |              | 380    |               |  |              | (394    | ) |  |   |        |   |  |   | 5,923   |  
|Equity in earnings of subsidiaries                        |  |        | (26,423 | )          |  |              |        |               |  |              |         |   |  |   | 26,423  |   |  |   |        |  
|Changes in operating assets and liabilities               |  |        | (1,385  | )          |  |              | (3,509 | )             |  |              | 2,666   |   |  |   |        |   |  |   | (2,228  | )
|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash provided by operating activities                 |  |        | 15,734  |            |  |              | 10,693 |               |  |              | 20,215  |   |  |   |        |   |  |   | 46,642  |  
|Investing Activities                                      |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Additions to property, plant and equipment                |  |        | (24,336 | )          |  |              | (2,635 | )             |  |              | (4,705  | ) |  |   |         |   |  |   | (31,676 | )
|Acquisition of business assets                            |  |        | (42,346 | )          |  |              | (252   | )             |  |              | (1,350  | ) |  |   |         |   |  |   | (43,948 | )
|Other                                                     |  |        |         |            |  |              |        |               |  |              | 2       |   |  |   | 14      |   |  |   | 16      |  
|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash provided by (used for) investing activities      |  |        | (66,682 | )          |  |              | (2,887 | )             |  |              | (6,053  | ) |  |   | 14      |   |  |   | (75,608 | )
|Financing Activities                                      |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net borrowings (repayment) on revolving credit
facilities |  |        | 51,508  |            |  |              | (761   | )             |  |              | (2,076  | ) |  |   |         |   |  |   | 48,671  |  
|Intercompany borrowings (payments)                        |  |        | 7,120   |            |  |              | (7,045 | )             |  |              | (75     | ) |  |   |         |   |  |   |        |  
|Net decrease in note payable                              |  |        |        |            |  |              |       |               |  |              | (338    | ) |  |   |         |   |  |   | (338    | )
|Issuance of common stock                                  |  |        | 58      |            |  |              |       |               |  |              | 14      |   |  |   | (14     | ) |  |   | 58      |  
|Purchase of treasury stock                                |  |        | (7,458  | )          |  |              |       |               |  |              |        |   |  |   |         |   |  |   | (7,458  | )
|Dividends paid on preferred stock                         |  |        | (280    | )          |  |              |       |               |  |              |        |   |  |   |         |   |  |   | (280    | )
|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash provided by (used for) financing activities      |  |        | 50,948  |            |  |              | (7,806 | )             |  |              | (2,475  | ) |  |   |         |   |  |   | 40,653  |  
|Effect of exchange rate on cash and equivalents           |  |        |        |            |  |              |       |               |  |              | (709    | ) |  |   |         |   |  |   | (709    | )
|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net cash provided by continuing operations                |  |        |        |            |  |              |       |               |  |              | 10,978  |   |  |   |         |   |  |   | 10,978  |  
|Net cash used for discontinued operations                 |  |        |        |            |  |              |       |               |  |              | (14,414 | ) |  |   |         |   |  |   | (14,414 | )
|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Net decrease in cash and equivalents                      |  |        |        |            |  |              |       |               |  |              | (3,436  | ) |  |   |         |   |  |   | (3,436  | )
|Cash and equivalents at beginning of period               |  |        |        |            |  |              |       |               |  |              | 26,894  |   |  |   |         |   |  |   | 26,894  |  
|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  
|Cash and equivalents at end of period                     |  | $      |        |            |  | $            |       |               |  | $            | 23,458  |   |  | $ |        |   |  | $ | 23,458  |  
|                                                          |  |        |         |            |  |              |        |               |  |              |         |   |  |   |         |   |  |   |         |  

F-43



---



---



##### Table of Contents



Report of Independent Auditors

The Board of Directors
Wolverine Tube, Inc.

We have audited the accompanying consolidated balance sheets of Wolverine Tube,
Inc. and Subsidiaries as of December 31, 2002 and 2001, and the related
consolidated statements of operations, redeemable preferred stock and
stockholders equity and cash flows for each of the three years in the period
ended December 31, 2002. Our audits also included the financial statement
schedule listed in the index at Item 15(a) (2). These financial statements and
schedule are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Wolverine Tube,
Inc. and Subsidiaries at December 31, 2002 and 2001, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

As discussed in Note 1, in 2002 the Company changed its method of accounting
for goodwill.

|                    |  |                      
|------------------- |  | ---------------------
|                    |  | /s/ Ernst & Young LLP
|                   
|February 14, 2003   |  |                      
|                   
|Birmingham, Alabama |  |                      

F-44



---



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Schedule IIValuation and Qualifying Accounts

|                               |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |       | 
|------------------------------ | ---------------------------------------- | ------ | ------------ | -------- | ---------- | -------- | ---------- | ---------- |  | ------ | ---- | ---- | ---------- | - | ------ | ------ | ---- | - | ----- | ----- | 
|                               |                                          |        | Balance      |          | Charged to |          | Charged to |            |  |        |      |      | Balance at
|                               |                                          |        | Beginning of |          | Cost and   |          | Other      |            |  |        |      |      | End of    
|Description                    |                                          | Period |              | Expenses |            | Accounts |            | Deductions |  | Period
|                               |                                          |        |              |          |            |          |            |            |  |       
|(In thousands)                 |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Year ended December 31, 2002:  |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Deducted from assets accounts: |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|                               | Reserve for sales returns and allowances |        | $            | 699      |            |          | $          | 249        |  |        | $    | (187 | )          |   | $      | (253   | )(1) |   | $     | 508   | 
|                               | Allowances for doubtful accounts         |        |              | 1,823    |            |          |            | 492        |  |        |      |     |            |   |        | (1,834 | )(2) |   |       | 481   | 
|                               |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Totals                         |                                          | $      | 2,522        |          |            | $        | 741        |            |  | $      | (187 | )    |            | $ | (2,087 | )      |      | $ | 989   |      
|                               |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Year ended December 31, 2001:  |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Deducted from assets accounts: |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|                               | Reserve for sales returns and allowances |        | $            | 494      |            |          | $          | 358        |  |        | $    | (153 | )          |   |        |       |      |   | $     | 699   | 
|                               | Allowances for doubtful accounts         |        |              | 439      |            |          |            | 1,697      |  |        |      | (112 | )          |   | $      | (201   | )(2) |   |       | 1,823 | 
|                               |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Totals                         |                                          | $      | 933          |          |            | $        | 2,055      |            |  | $      | (265 | )    |            | $ | (201   | )      |      | $ | 2,522 |      
|                               |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Year ended December 31, 2000:  |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Deducted from assets accounts: |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|                               | Reserve for sales returns and allowances |        | $            | 500      |            |          | $          | 989        |  |        |      |     |            |   | $      | (995   | )(1) |   | $     | 494   | 
|                               | Allowances for doubtful accounts         |        |              | 293      |            |          |            | 558        |  |        |      |     |            |   |        | (412   | )(2) |   |       | 439   | 
|                               |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      
|Totals                         |                                          | $      | 793          |          |            | $        | 1,547      |            |  |        |     |      |            | $ | (1,407 | )      |      | $ | 933   |      
|                               |                                          |        |              |          |            |          |            |            |  |        |      |      |            |   |        |        |      |   |       |      



---

|(1) |  | Reduction of reserve, net of translation adjustments, for actual sales returns and allowances.                                     
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Uncollectable accounts written off from both continuing and discontinued
operations, net of translation adjustments and recoveries.

S-1



---



---



##### Table of Contents



Exhibit Index

|               |  |                                                                                                                                                             
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                             
|Exhibit Number |  | Description                                                                                                                                                 
|10.20          |  | 2002 Change in Control, Severance and Non-Competition
Agreement by and between Wolverine Tube, Inc. and
Massoud Neshan dated as of July 12, 2002.           
|              
|10.21          |  | Amendment No. 2 to Credit Agreement, dated as of March 25, 2003, by and among the Company, its U.S. and
Canadian Subsidiaries and the lenders named therein.
|              
|10.22          |  | 2003 Annual Performance Incentive Plan                                                                                                                      
|              
|21             |  | List of Subsidiaries                                                                                                                                        
|              
|23             |  | Consent of Ernst & Young LLP, Independent Auditors                                                                                                          
|              
|99.1           |  | Certification of the Chief Executive Officer pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       
|              
|99.2           |  | Section 906 of the Sarbanes-Oxley Act of 2002 Certification of the Chief Financial Officer pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to       



---