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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  FORM 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, 2003, 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. 
 Delaware
    
    63-0970812(State of Incorporation)
    
    (IRS Employer Identification No.)
 200 Clinton Avenue West, 10th FloorHuntsville, 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.  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. [X] 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 27, 2003, was approximately
$69,000,000 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 5, 2004Common Stock, $0.01 Par Value
    
    12,284,096 Shares
 DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive proxy statement for the annual stockholders meeting
to be held on May 20, 2004, are incorporated by reference into Part III.




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TABLE OF CONTENTS  PART IITEM 1 BUSINESSITEM 2 PROPERTIESITEM 3 LEGAL PROCEEDINGSITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5 MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERSITEM 6 SELECTED FINANCIAL DATAITEM 7 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A CONTROLS AND PROCEDURESITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTPART IIIITEM 11 EXECUTIVE COMPENSATIONITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICESITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-KPART IVSIGNATURESExhibit IndexEX-3.3 SECRETARY'S CERTIFICATEEX-21.1 LIST OF SUBSIDIARIESEX-23  CONSENT OF ERNST & YOUNG LLPEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 1350 CERTIFICATION OF THE CEOEX-32.2 SECTION 1350 CERTIFICATION OF THE CFO    Table of Contents  FORM 10-K YEAR ENDED DECEMBER 31, 2003 TABLE OF CONTENTS Page No.PART IItem 1.
    
    Business
    
    
    1Item 2.
    
    Properties
    
    
    13Item 3.
    
    Legal Proceedings
    
    
    15Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    16PART IIItem 5.
    
    Market for Registrants Common Equity and Related Stockholder Matters
    
    
    17Item 6.
    
    Selected Financial Data
    
    
    18Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    44Item 8.
    
    Financial Statements and Supplementary Data
    
    
    45Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    46Item 9A.
    
    Controls and Procedures
    
    
    47PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    48Item 11.
    
    Executive Compensation
    
    
    49Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    50Item 13.
    
    Certain Relationships and Related Transactions
    
    
    51Item 14.
    
    Principal Accountant Fees and Services
    
    
    52PART IVItem 15.
    
    Exhibits, Financial Statement Schedules and Reports on Form 8-K
    
    
    53




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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, at no 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. Additionally, we make available on our website and in
print upon written request, at no charge, our corporate governance guidelines,
the charters of our audit, compensation and corporate governance and nominating
committees and a copy of our code of business conduct and ethics that applies
to our directors, officers and employees, including our chief executive
officer, principal financial officer, principal accounting officer or
controller or persons performing similar functions. History and Structure We are a Delaware corporation organized in 1987. We are the successor to a
business founded in Detroit in 1916. 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. In 2003, we began producing brazed assemblies for European
customers in this facility. 1




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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 Flow Products,
Inc., Industrias Nacobre S.A. de C.V., KobeWieland Copper Products Inc.,
Wieland  Werke AG, Mueller Industries Inc., Olin Corporation, Outokumpu
American Brass Company, J.W. Harris Company, Inc., Parker Hannifin Corp. 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 and fabricated products are custom designed and
manufactured for specific customer 2




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applications and sold directly to original
equipment manufacturers. 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 inches) 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 in excess of one mile
(to permit economical transport to and use by the customers), 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 in a variety of
cross-sectional shapes and alloys can be supplied in exact tolerance cut
lengths or coils. Specialty fabricated parts, complex brazed assemblies and
components (such as return bends and manifolds) are produced for a wide range
of applications. Capabilities include cutting, bending/swaging, end spinning,
hole piercing/drilling, specialized coiling and brazing. Metal Joining Products.Metal joining products include brazing alloys, fluxes
and lead-free solder used in the air conditioning, plumbing, electronic,
electrical component, jewelry, catalyst, lighting, shipbuilding, aerospace,
general industrial and other metal-joining industries. There are over 2,000
product variations in this category. Commercial product sales accounted for 74%, 77% and 76% of the Companys net
sales in 2003, 2002 and 2001, 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




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Several major competitors manufacture
copper tube in sizes most commonly from 1/2 to 4 in diameter. These products
are considered commodity products because price, availability and
delivery are the major competitive factors. Plumbing tube and refrigeration
service tube are sold primarily through wholesalers and master distributors. Wholesale product sales accounted for 19%, 17% and 17% of the Companys sales
in 2003, 2002 and 2001, 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 7%, 6% and 7% of the Companys sales
in 2003, 2002 and 2001, 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




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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 MarketsCommercial ProductsTechnical 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




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Products
    
    Major MarketsRod, Bar and Other Products
    
    Electrical equipment,
power generation and automotive parts manufacturers, locomotive,
aluminum smelting and other industrial equipment manufacturers and
metal service centers.
 Key Customers In 2003, 2002 and 2001 our 10 largest customers accounted for approximately
46%, 47%, and 44%, respectively, of our consolidated net sales. No single
customer accounted for 10% or more of our consolidated net sales in 2003, 2002
or 2001. 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 with the exception of the
welded 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 2003,
we purchased approximately 324 million pounds of metal, approximately 98% 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




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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. Beginning in April 2002 and in conjunction with changing our method of
accounting for inventories from the last-in, first-out method to the first-in,
first-out method, we have entered into commodity forward contracts to sell
copper in order to mitigate the impact of fluctuating copper prices with regard
to the valuation of our inventory. Under generally accepted accounting
principles, these forward contracts are not designated as hedges and are marked
to market each month with gains and losses recorded in cost of goods sold. 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 MDTTM. This technology is being used to develop highly enhanced new
heat transfer products for large chiller manufacturers. Additionally, this
technology has enabled 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 $2.9 million in 2003, $3.1 million in 2002
and $3.7 million in 2001 and it is anticipated that a similar level of
expenditure will be maintained in 2004. 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. 7




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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. We have incurred, and in the future
may incur additional liabilities under environmental statutes and regulations.
These potential liabilities could relate to contamination of sites we own or
operate (including contamination caused by prior owners and operators of such
sites, abutters or other persons), or have previously owned or operated, as
well as 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 $1.2 million for undiscounted estimated
environmental remediation costs at December 31, 2003. 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, 2003, we had a total of 3,012 employees. Approximately 10%
of our employees are represented by a union comprised of a majority of the
hourly employees at our Montreal, Quebec plant who are covered by a collective
bargaining agreement that expires on March 22, 2005. The maintenance
department employees at our Shawnee, Oklahoma facility elected to be
represented by the Arkansas Regional Council of Carpenters/United Brotherhood
of Carpenters and Joiners of America in May 2003 but no first contract has been
negotiated. There are approximately 37 employees in this bargaining unit. As
a whole, we believe our relations with our employees are good. 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




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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 Certain of the statements contained in this report 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
future sales, earnings, operating performance, 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,
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 timing and magnitude of recovery from the recent economic downturn;
    
    costs and cost savings related to the closing of our Booneville, Mississippi facility;
    
    the persistence of low levels of U.S. commercial construction activity;
    
    the impact of competitive factors in our industry, including the effect of pricing, product line offerings and other
actions taken by our competitors;
    
    our ability to maintain our relationships with our major customers;
    
    demand for our products; 9




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
    
    our ability to achieve and the timeliness with which we achieve anticipated results from our capital improvement plan, cost
reduction initiatives, product and process development activities, productivity and efficiency initiatives, global
expansion activities, market share penetration efforts and working capital management programs;
    
    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 ability to complete the extension and modification of our credit facility;
    
    our potential exposure to environmental liabilities;
    
    economic and political risks relating to our international operations;
    
    currency risks relating to our international operations and our ability to hedge these risks;
    
    our ability and the ability of our customers to maintain satisfactory employee relations, especially with unionized
employees;
    
    costs for labor and benefits including healthcare and pension costs;
    
    extraordinary fluctuations in the markets and availability of raw materials and our ability to hedge the cost of raw
materials effectively;
    
    extraordinary fluctuations in the cost and availability of fuel and energy resources and our ability to hedge these costs;
    
    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. 10




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Executive Officers of the Registrant The following table sets forth certain information with respect to each of our
executive officers as of December 31, 2003: Name
    
    Age
    
    Positions with the CompanyDennis J. Horowitz
    
    
    57
    
    
    Chairman, President, Chief Executive
Officer and DirectorJames E. Deason
    
    
    56
    
    
    Executive Vice President, Chief Financial
Officer, Secretary and DirectorKeith I. Weil
    
    
    46
    
    
    Senior Vice President, Tubing ProductsJohann R. Manning, Jr.
    
    
    43
    
    
    Senior Vice President, Fabricated Products
and General CounselMassoud Neshan
    
    
    50
    
    
    Senior Vice President, TechnologyGarry K. Johnson
    
    
    48
    
    
    Senior Vice President, SalesThomas A. Morton
    
    
    50
    
    
    Vice President of Purchasing and Logistics
 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 interconnection systems
company, since September 1994. Mr. Horowitz also serves as a director of
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 11




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##### Table of Contents



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-five 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
Chartered Accountant, was employed for ten years with Ernst & Young in Canada. 12




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##### 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 ofSize
    
    Plant Size
    
    Year
    
    Employees atLocation
    
    (acres)
    
    (square feet)
    
    Opened
    
    Dec. 31, 2003
    
    DescriptionDecatur, AL
    
    
    165
    
    
    
    620,000
    
    
    
    1948
    
    
    
    733
    
    
    Produces a majority
of our copper tube
product lines. A
significant portion
of production is
industrial and
technical tube as
well as wholesale
tube products.
Produces smooth
feedstock tube for
the Ardmore and
Altoona facilities.
Also houses a
portion of our
corporate staff.Shawnee, OK
    
    
    51
    
    
    
    309,000
    
    
    
    1974
    
    
    
    478
    
    
    Produces a majority
of our copper tube
product lines. A
significant portion
of production is
industrial and
technical tube.
Also produces
wholesale tube
products. Capable
of producing
feedstock tube for
the Ardmore and
Carrollton
facilities.Jackson, TN
    
    
    35
    
    
    
    240,000
    
    
    
    1998
    
    
    
    106
    
    
    Produces welded
copper enhanced
surface tube. Also
houses a U.S.
wholesale product
distribution
center.Altoona, PA
    
    
    32
    
    
    
    210,000
    
    
    
    1956
    
    
    
    251
    
    
    A redraw facility
that produces
higher value added
commercial
products, primarily
precision drawn and
cut tubular
products.Carrollton, TX
    
    
    9
    
    
    
    165,000
    
    
    
    1999
    
    
    
    320
    
    
    Designs,
manufactures and
outsources project
management of
tubular fabricated
products and
assemblies using
various materials
including copper,
copper alloy,
aluminum and steel.
Fabrication
capabilities range
from a single
operation to
complex brazed
assemblies.Booneville, MS
    
    
    30
    
    
    
    152,000
    
    
    
    1989
    
    
    
    23
    
    
    Facility closed in
December 2003.
Production of
industrial and
technical tube from
Booneville has been
transitioned to our
Jackson, Shawnee,
and Decatur
facilities.Warwick, RI
    
    
    3
    
    
    
    70,000
    
    
    
    1978
    
    
    
    133
    
    
    Produces brazing
filler metals,
fluxes and other
specialty alloys.Ardmore, TN
    
    
    28
    
    
    
    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




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##### Table of Contents



In addition to the manufacturing facilities described above, we also own 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 29
employees at December 31, 2003, 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 ofProperty Size
    
    Plant Size
    
    Year
    
    Employees atLocation
    
    (acres)
    
    (square feet)
    
    Opened
    
    Dec. 31, 2003
    
    DescriptionMontreal, Quebec
    
    
    25
    
    
    
    424,000
    
    
    
    1942
    
    
    
    370
    
    
    Produces plumbing
tube and
refrigeration
service tube,
copper and copper
alloy tube and
copper and copper
alloy rod and bar
and extruded
shapes.London, Ontario
    
    
    45
    
    
    
    195,000
    
    
    
    1958
    
    
    
    277
    
    
    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
own a 150,000 square foot facility in Fergus, Ontario whose operations were
discontinued and which is currently held for sale. There was one employee at
the Fergus, Ontario facility at December 31, 2003. 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 seven-year term expiring December 31,
2011. The following table describes our facilities in China and Portugal: Number ofProperty Size
    
    Plant Size
    
    Year
    
    Employees atLocation
    
    (acres)
    
    (square feet)
    
    Opened
    
    Dec. 31, 2003
    
    DescriptionShanghai, China
    
    
    3
    
    
    
    60,000
    
    
    
    1998
    
    
    
    142
    
    
    Produces technical
copper tube from
feedstock supplied
by local copper
tube manufacturers
and brazed
assemblies.Esposende, Portugal
    
    
    3
    
    
    
    33,000
    
    
    
    2001
    
    
    
    57
    
    
    Produces technical
copper and copper
alloy tube from
feedstock supplied
by the Decatur
facility and by
European copper and
copper alloy tube
manufacturers and
brazed assemblies.
 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 11
employees at the Apeldoorn facility at December 31, 2003. 14




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##### 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 and
incorporated herein by reference. 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. Additionally, the Company received
notice in October 2003 from the Department of Justice that the investigation
into possible violations of U.S. antitrust laws by the Grand Jury in the
Northern District of Indiana, which the Company became aware of by the service
of a subpoena in March 2001, has been closed as it relates to the Company with
no action taken against the Company or any of our employees. 15




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##### Table of Contents



ITEM 4
    SUBMISSION OF MATTERS TO A VOTE OF 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




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##### Table of Contents



PART II  
 ITEM 5
    MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our Common Stock is traded on the New York Stock Exchange under the symbol
WLV. As of March 5, 2004, there were 12,284,096 shares of Common Stock
outstanding, held by 277 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: 2003
    
    2002Period
    
    High
    
    Low
    
    High
    
    LowFirst Quarter
    
    $
    6.30
    
    
    $
    3.61
    
    
    $
    12.15
    
    
    $
    6.20Second Quarter
    
    
    6.99
    
    
    
    4.49
    
    
    
    9.61
    
    
    
    7.20Third Quarter
    
    
    5.88
    
    
    
    4.02
    
    
    
    7.60
    
    
    
    5.30Fourth Quarter
    
    
    6.70
    
    
    
    4.19
    
    
    
    6.15
    
    
    
    4.90
 We did not declare or pay cash dividends on our Common Stock during the years
ended December 31, 2003, 2002 or 2001. 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




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##### 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, 2003 and 2002 and the
income statement data presented below for each of the years in the three-year
period ended December 31, 2003, 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 also are derived from audited
Consolidated Financial Statements of our company, which are not presented
herein. Year Ended December 31,Statement of Operations Data:
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999(In thousands, except per share amounts)Net sales
    
    $
    596,324
    
    
    $
    550,523
    
    
    $
    583,114
    
    
    $
    621,464
    
    
    $
    586,202Cost of goods sold (a)
    
    
    555,498
    
    
    
    492,082
    
    
    
    520,874
    
    
    
    536,351
    
    
    
    522,589Gross profit
    
    
    40,826
    
    
    
    58,441
    
    
    
    62,240
    
    
    
    85,113
    
    
    
    63,613Selling, general and administrative expenses
    
    
    32,103
    
    
    
    30,616

    
    
    
    32,254
    
    
    
    31,961
    
    
    
    30,314Restructuring and other charges (b)
    
    
    15,057
    
    
    
    
    
    
    
    1,546
    
    
    
    
    
    
    
    19,938Operating (loss) income from continuing operations
    
    
    (6,334
    )
    
    
    27,825
    
    
    
    28,440
    
    
    
    53,152
    
    
    
    13,361Other expenses (income):Interest expense, net
    
    
    21,218
    
    
    
    19,681
    
    
    
    13,100
    
    
    
    12,168
    
    
    
    12,237Gain on extinguishment of debt
    
    
    
    
    
    
    (1,349
    )
    
    
    
    
    
    
    
    
    
    
    Amortization and other, net
    
    
    1,856
    
    
    
    1,008
    
    
    
    (447
    )
    
    
    417
    
    
    
    1,705Goodwill impairment
    
    
    23,153
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) income from continuing operations before income taxes
    
    
    (52,561
    )
    
    
    8,485
    
    
    
    15,787
    
    
    
    40,567
    
    
    
    (581
    )Income tax (benefit) provision
    
    
    (13,577
    )
    
    
    1,315
    
    
    
    4,345
    
    
    
    14,660
    
    
    
    (988
    )(Loss) income from continuing operations (c)
    
    
    (38,984
    )
    
    
    7,170
    
    
    
    11,442
    
    
    
    25,907
    
    
    
    407(Loss) income from discontinued operations, net of tax (d)
    
    
    (1,637
    )
    
    
    (1,610
    )
    
    
    (31,240
    )
    
    
    782
    
    
    
    1,362Cumulative effect of accounting change, net of income tax benefit
(e)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,754
    )Net (loss) income (f)
    
    $
    (40,621
    )
    
    $
    5,560
    
    
    $
    (19,798
    )
    
    $
    26,689
    
    
    $
    (3,985
    )Net (loss) income applicable to common shares (g)
    
    $
    (40,621
    )
    
    $
    5,502
    
    
    $
    (20,078
    )
    
    $
    26,409
    
    
    $
    (4,265
    )(Loss) earnings per common share-basic:Continuing operations
    
    $
    (3.18
    )
    
    $
    0.58
    
    
    $
    0.92
    
    
    $
    2.11
    
    
    $
    0.01Discontinued operations, net of tax
    
    
    (0.13
    )
    
    
    (0.13
    )
    
    
    (2.58
    )
    
    
    0.06
    
    
    
    0.10Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.44
    )Net (loss) income per share
    
    $
    (3.31
    )
    
    $
    0.45
    
    
    $
    (1.66
    )
    
    $
    2.17
    
    
    $
    (0.33
    )Basic weighted average common shares
    
    
    12,275
    
    
    
    12,231
    
    
    
    12,077
    
    
    
    12,153
    
    
    
    13,106(Loss) earnings per common share-diluted:Continuing operations
    
    $
    (3.18
    )
    
    $
    0.58
    
    
    $
    0.91
    
    
    $
    2.08
    
    
    $
    0.01Discontinued operations, net of tax
    
    
    (0.13
    )
    
    
    (0.13
    )
    
    
    (2.54
    )
    
    
    0.06
    
    
    
    0.10Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.43
    )Net (loss) income per share
    
    $
    (3.31
    )
    
    $
    0.45
    
    
    $
    (1.63
    )
    
    $
    2.14
    
    
    $
    (0.32
    )Diluted weighted average common and common equivalent shares
    
    
    12,275
    
    
    
    12,362
    
    
    
    12,307
    
    
    
    12,344
    
    
    
    13,243
 Year Ended December 31,Other Data:
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999(In thousands, except per pound amounts)Pounds shipped
    
    
    327,354
    
    
    
    310,240
    
    
    
    308,177
    
    
    
    334,846
    
    
    
    338,559Depreciation and amortization
    
    $
    19,009
    
    
    $
    18,416
    
    
    $
    18,679
    
    
    $
    17,040
    
    
    $
    15,773Capital expenditures
    
    
    5,969
    
    
    
    7,747
    
    
    
    27,612
    
    
    
    31,676
    
    
    
    23,092Average COMEX price of copper per pound (h)
    
    
    0.81
    
    
    
    0.72
    
    
    
    0.73
    
    
    
    0.84
    
    
    
    0.72
 18




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##### Table of Contents



December 31,Balance Sheet Data:
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999(In thousands)Total assets
    
    $
    553,258
    
    
    $
    550,720
    
    
    $
    539,427
    
    
    $
    584,937
    
    
    $
    499,550Total long-term debt
    
    
    254,284
    
    
    
    255,712
    
    
    
    247,698
    
    
    
    231,163
    
    
    
    180,197Redeemable cumulative preferred stock
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    2,000
    
    
    
    2,000Stockholders equity
    
    $
    179,351
    
    
    $
    200,635
    
    
    $
    201,412
    
    
    $
    228,449
    
    
    $
    212,499
  (a)
    
    During 2001 and 1999, we incurred charges that are included in cost of
goods sold of approximately $1.4 million and $5.4 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.  (b)
    
    During 2003, we recognized restructuring and other charges of
approximately $15.1 million ($9.9 million after tax). See Note 21 of the
Notes to Consolidated Financial Statements.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 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.(c)
    
    Income from continuing operations for 2001, 2000 and 1999, adjusted to
exclude amortization of expense recognized related to goodwill would have
been $14.1 million, $28.2 million and $2.6 million.(d)
    
    We have classified the operating results of Wolverine Ratcliffs, Inc.,
equal to $(1.6) million, $(1.6) million, $(7.3) million, $0.8 million and
$1.4 million (in each case net of tax) for the years ended 2003, 2002,
2001, 2000 and 1999, respectively, as discontinued operations. 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 (loss) income for 2001, 2000 and 1999 adjusted to exclude
amortization expense related to goodwill would have been $(16.9) million,
$29.2 million and $(1.7) million.(g)
    
    Reflects the payment of preferred stock dividends and accretion of
preferred stock redemption requirements.(h)
    
    Source: Metals Week. 19




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##### Table of Contents



ITEM 7 MANAGEMENTS DISCUSSION AND ANALYSIS OF 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. Overview We incurred a significant loss from continuing operations in 2003 of $39.0
million or $3.18 per share compared with income from continuing operations of
$7.2 million or $0.58 per share and $11.4 million or $0.92 per share, in 2002
and 2001, respectively. The loss in 2003 included a goodwill impairment charge
of $22.2 million or $1.81 per share and a restructuring charge of $9.9 million
or $0.81 per share after tax. The goodwill impairment charge related to our
Tube Group reporting unit primarily due to historical operating performance and
projected growth assumptions for the Tube Group falling short of those
previously assumed and resulted in the carrying value of goodwill, for the Tube
Group, substantially exceeding its fair value. The $9.9 million restructuring
charge related to: (1) the closure of our Booneville, Mississippi facility;
(2) severance cost related to a reduction in our North American workforce of
approximately 200 employees; and (3) a further write down of assets held for
sale in North Carolina. The loss in 2003, exclusive of the goodwill impairment and restructuring
charges, was the result of many issues which have challenged our Company
throughout 2003, including an unfavorable mix of demand for our products, cost
escalations particularly for natural gas, healthcare and pension expenses,
selling price pressures and unfavorable currency movements. During 2003, the
U.S. dollar weakened against the Canadian dollar. Our Canadian facilities were
particularly affected because approximately fifty percent of the goods
manufactured in our Canadian operations are sold into the U.S. and the sales
are denominated in U.S. dollars. Profitability for our wholesale products, the
only significant product group for which we are not able to pass metal price
changes directly to the customer, was negatively impacted in 2003 by increasing
COMEX copper prices and a shortage in supply of recycled materials used in the
production of these products. Additionally, we incurred higher cost due to
manufacturing inefficiencies and professional expenses related to union
organizing efforts at our Decatur, Alabama and Shawnee, Oklahoma plants in
2003. The Decatur workforce voted to remain union free while the maintenance
employees at the Shawnee facility elected to be represented by the Arkansas
Regional Council of Carpenters/United Brotherhood of Carpenters and Joiners of
America. Also, we incurred manufacturing inefficiencies and a loss of
production time at our London, Ontario facility in conjunction with the
northeastern power outages in August 2003. Another contributing factor to our loss in 2003 was the impact of escalating
copper prices on our inventory hedge position. The average COMEX copper price
in December 2003 was $1.00 per pound, as compared to $0.72 per pound in
December 2002, an increase of approximately 39%. In order to mitigate the
impact of fluctuating copper prices on our metal inventory, we hedge the
valuation of our inventory by selling copper forward. An increase in the price
of copper results in a loss on our copper forward derivative contract,
offsetting gains we may otherwise incur when we sell our physical inventory at
prevailing market prices. In 2003, we recorded a $5.7 million loss on our
copper forward derivative contract that was not completely offset by increased
margins on sales of our physical inventory. Of this loss, $3.6 million was
realized in the fourth quarter of 2003. This occurred because copper prices
rose sharply in December 2003 20




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##### Table of Contents



coupled with the fact that we did not purchase a
significant amount of raw material inventory in
late December 2003 due to the curtailment of our operations during the two-week
Christmas and New Year holiday periods. As our inventories turn and copper
prices stabilize or decline, we expect to recover the losses realized in prior
periods. Looking ahead, we believe 2004 will show improvement over 2003. We have begun
to see some improvement in the industrial sector of the North American economy
and improvement in demand across all of our product segments. With the
improving economy and increased demand for wholesale products driven by
stronger non-residential construction, we have been able to increase pricing in
2004 for these products. Unlike 2003, we have hedged our natural gas costs for
all of 2004 and at prices below 2003. Further, pension and postretirement cost
are anticipated to be relatively stable in 2004 as compared to 2003. We also
expect to begin realizing approximately $8.0 million of annualized cost savings
from the reduction of our workforce and approximately $3.0 million of
annualized cost savings from the closure and reallocation of production of our
Booneville facility. However, increases in COMEX copper prices and premiums
paid in excess of COMEX for copper as well as the continuation of a strong
Canadian dollar against the U.S. dollar will likely negatively impact earnings
in 2004. 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,
retirement and pension plans and environmental remediation. Management has
discussed the development and selection of these critical accounting estimates
with the Audit Committee of the Companys Board of Directors and the Audit
Committee has reviewed the disclosures presented below relating to them. 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 21




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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. Assets held for sale include the net assets of our unoccupied Roxboro, North
Carolina and Fergus, Ontario facilities. 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. 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. This statement addresses
financial accounting and reporting for acquired goodwill and other intangible
assets. 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. During the third
quarter of 2003, we conducted the required annual goodwill impairment review
and based on the results of this review, we recorded a goodwill impairment
charge of $23.2 million. If we are unable to achieve our estimated growth
rates and profit projections, if interest rates increase or if our other
estimates or assumptions change in the future, we may be required to record
additional impairment charges for goodwill in the future. Income taxes For financial reporting purposes, we determine our current and deferred tax
liabilities in accordance with the liability method of accounting for income
taxes as specified in Statement of Financial Accounting Standards No. 109 (SFAS
No. 109) Accounting for Income Taxes. The provision for income taxes is the
sum of income taxes both currently payable and deferred. Currently payable
income taxes represent the liability related to our income tax returns for the
current year while the net deferred tax expense or benefit represents the
change in the balance of deferred tax assets or liabilities as reported on the
balance sheet. The changes in deferred tax assets and liabilities are
determined based upon the changes in differences between the basis of assets
and liabilities for financial reporting purposes and the basis of assets and
liabilities for tax purposes as measured by the enacted tax rates that we
estimate will be in effect when these differences reverse. In addition to
estimating the future tax rates applicable to the reversal of tax differences,
we also evaluate whether future tax benefits (related to future tax deductions
and net operating loss carryforwards) will be realized. In some cases, this
involves considering whether taxable income in future periods will be
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(through reduced cash
payments for income taxes). Accordingly, we believe that the estimate related
to the provision for income taxes is critical to our results of operations. As of December 31, 2003, we have $5.1 million of gross deferred tax assets
resulting from state operating loss carryforwards that are available to reduce
taxable income in future periods. As of December 31, 2003 and 2002, we
recorded valuation allowances against a portion of our state tax carryforwards
of $3.6 million and $2.4 million, respectively. Under the provisions of SFAS
No. 109, we determined our valuation allowances by considering the realization
of these state carryforwards in light of our cumulative operating results for
the current and preceding years, 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. There have been no valuation allowances recorded against our U.S. federal and
foreign net operating loss carryforwards because we believe there will be
adequate taxable income generated in the carryforward periods through
operations or reversal of timing differences to realize these operating loss
carryforwards. 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 Net pension and postretirement cost was $8.1 million, $6.3 million and $1.7
million, respectively, for the years ended December 31, 2003, 2002 and 2001.
Total estimated pension and postretirement expense in 2004 is expected to be
the same as in 2003. These expenses are primarily included in cost of goods
sold and selling, general and administrative expenses. Lesser amounts are
included in restructuring charges and discontinued operations. In 2003 and
2001 we did not make a contribution to our U.S. qualified defined benefit
pension plans. In 2002, we made a $5.0 million voluntary contribution to our
U.S. qualified defined benefit pension plans. In 2003, 2002 and 2001, we made
a $0.6 million, $0.1 million and $0.2 million contribution, respectively, to
our Canadian defined benefit pension plans. In 2003, we also transferred $4.3
million to a rabbi trust to partially fund the vested benefit obligations to
certain executives under our nonqualified supplemental executive retirement
plan. Our pension and postretirement benefit costs 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, changes in the level of benefits provided, changes to the level
of contributions to these plans and other factors. Estimates and assumptions
concerning our pension and postretirement obligations and related periodic
costs can be found in Notes 11 and 12 of the Notes to Consolidated Financial
Statements. 23




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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, 2003, we used discount rates to determine our
benefit obligations of 6.25% at December 31, 2003 for both our U.S. and
Canadian based plans, respectively, compared to 7.0% and 6.75% at December 31,
2002 and 7.25% and 7.0% at December 31, 2001 for our U.S. and Canadian based
plans,
respectively. We used discount rates to determine our net periodic benefit
cost of 7.0% and 6.75% for 2003, 7.25% and 7.0% for 2002 and 7.75% and 7.5% for
2001, for our U.S. and Canadian based plans, respectively. This had the effect
of increasing our accumulated pension benefit obligation by approximately $16.9
million for the year ended December 31, 2003 and increasing our estimated
pension expense for 2004 on a pre-tax basis by $1.6 million. A quarter
percentage point decrease in the discount rate would increase our pension
expense for 2004 by approximately $0.6 million on a pre-tax basis. The expected long-term rate of return on pension plan assets is selected by
taking into account the asset mix of the plans, the fact that the plan assets
are actively managed to mitigate downside risks, the historical performance of
the market in general and the historical performance of the plan assets over
the past ten years. Based on these factors, our expected long-term rates of
return used to determine net periodic benefit cost are 9.0% and 7.5% for 2003
and 9.5% and 8.5% for 2002 and for 2001 for our U.S. and Canadian based plans,
respectively. A quarter percentage point decrease in the expected long-term
rate of return would increase our pension expense for 2004 by approximately
$0.3 million on a pre-tax basis. The required use of the expected long-term
rate of return on plan assets may result in recognized returns that are greater
or less than the actual returns on those plan assets in any given year. Over
time, however, the expected long-term rate of return on plan assets is designed
to approximate the actual long-term returns. For the ten year periods ended
December 31, 2003 and 2002, the U.S. Retirement Plan assets have provided a
weighted rate of return of 10.8% and 9.8%, respectively, and the Canadian based
plans have provided a weighted rate of return of 7.8% and 8.7%, respectively. On December 31, 2003, the accumulated benefit obligation related to our pension
plans exceeded the fair value of pension plan assets. This difference is
primarily attributed to 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. As a result, and in
accordance with SFAS 87, we have an additional minimum pension liability of
$24.2 million, reflected as an accumulated other comprehensive loss before
taxes of $19.1 million and an intangible asset of $5.1 million (equal to
unrecognized prior service cost). Environmental Remediation Our operations are subject to extensive federal, state and local environmental
laws and regulations. The major environmental laws to which we are subject,
include, among others, the Federal Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA, also known as the Superfund law), the
Toxic Substances Control Act, the Federal Water Pollution Control Act, and the
Hazardous Materials Transportation Act. CERCLA can impose joint and several
liability for cleanup and investigation costs, without regard to fault or
legality of the original conduct, on current and predecessor owners and
operators of a site, as well as those who generate, or arrange for the disposal
of, hazardous substances. The risk of incurring environmental liability is
inherent in our industry. We own property that is, or has been, used for
industrial purposes. Use of these properties may subject us to potentially
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relating to the investigation and cleanup of contaminants,
claims alleging personal injury, or property damage as the result of exposures
to, or release of, hazardous substances. We conduct studies, as well as site surveys, to determine the extent of
environmental damage and determine the necessary requirements to remediate this
damage. These studies incorporate the analysis of our internal environmental
engineering staff, environmental engineering
consultants and legal counsel. From these studies and surveys, a range of
estimates of the costs involved is derived and a liability and related expense
for environmental remediation is recorded within this range. Our recorded
liabilities for these issues represent our best estimates (on an undiscounted
basis) of remediation and restoration costs that may be required to comply with
present laws and regulations. These estimates are based on forecasts of the
total future direct costs related to environmental remediation. These
estimates change periodically as additional or better information becomes
available as to the extent of site remediation required, if any. In addition,
advanced technologies related to the detection, appropriate remedial course of
action and anticipated cost can influence these estimates. Certain changes
could occur that would materially effect our estimates and assumptions related
to costs for environmental remediation. If we become subject to more stringent
environmental remediation costs at known sites, discover additional
contamination, discover previously unknown sites, or become subject to related
personal or property damage, we could incur material costs in connection with
our environmental remediation. Accordingly, management believes that estimates
related to the accrual of environmental remediation liabilities are critical to
our results of operations. For the years ended December 31, 2002 and 2001 the expense related to
environmental remediation was $0.8 million and $0.1 million, respectively, and
is included in cost of goods sold on the consolidated statements of income.
For the year ended December 31, 2003, we did not have any expense related to
environmental remediation. Additionally, as of December 31, 2003, we have a
total liability recorded for environmental remediation of $1.2 million. This
amount was derived from a range of reasonable estimates based upon our studies
and site surveys described above and in accordance with Statement of Financial
Accounting Standards No. 5 Accounting for Contingencies (SFAS 5). For
environmental remediation sites known as of December 31, 2003, if the highest
estimate from the range (based upon information presently available) were
recorded, the total estimated liability would have increased $0.7 million in
2003. 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 business
activity. While we have entered into commodity forward contracts to sell
copper in an effort to mitigate the impact of fluctuating 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 and except for
our wholesale products, 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 (loss)
profit from sales of these products was 25




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$(0.3) million in 2003, $4.4 million in
2002 and $9.3 million in 2001. Gross profit derived from the sale of wholesale
products is mainly affected by changes in selling prices and the cost of metal.
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.
Wholesale products are also the only significant product group for which we are
not able to pass metal price changes directly to our customers. 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. Accordingly, the operating results
of WRI are 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 stopped all manufacturing
operations of WRI and we liquidated substantially all of its inventory and net
receivables. We began liquidating the equipment of WRI in 2002 and we
anticipate finalizing the sale of the remaining equipment by April 2004. We
are currently negotiating for the sale or lease of the building. We anticipate
that the remaining liabilities which includes our pension obligation will be
settled during 2004. In the fourth quarters of 2003 and 2002, we recorded a
$2.4 million ($1.6 million after tax) and a $2.5 million ($1.6 million after
tax) loss, respectively, from discontinued operations for remaining estimated
closing costs in excess of the provision for losses recorded in the fourth
quarter of 2001. 26




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Results of Continuing Operations Year-Ended December 31, 2003, Compared with Year-Ended December 31, 2002 Consolidated net sales from continuing operations increased by $45.8 million,
or 8.3%, to $596.3 million for the year ended December 31, 2003 from $550.5
million for the year ended December 31, 2002. Pounds shipped increased by 17.1
million pounds, or 5.5%, to 327.3 million in 2003 from 310.2 million in 2002.
The average COMEX copper price for 2003 was $0.81 per pound, as compared to
$0.72 per pound in 2002, an increase of approximately 13.1%. Pounds of commercial products shipped increased by 7.9 million pounds, or 3.8%,
to 217.5 million in 2003 from 209.6 million in 2002. This increase in
shipments was primarily due to an
increase in shipments of industrial tube, partially offset by declines in
shipments of alloy products. Shipments of industrial tube have been strong due
to our success in obtaining market share penetration for this product in the
United States. Shipments of alloy products decreased due to weak industrial
demand in the current economy. Sales of commercial products increased $21.2
million, or 5.0%, to $442.5 million in 2003 from $421.2 million in 2002. This
increase in sales was attributable to increased shipments of industrial tube,
an increase in COMEX copper prices and a favorable mix of fabricated products,
partially offset by lower volumes of alloy products and modest reductions in
unit fabrication revenues for industrial tube and joining products. Gross
profit from commercial products decreased by $12.7 million, or 24.6%, to $39.0
million in 2003 from $51.7 million in 2002, attributable primarily to specific
escalations of cost that are discussed in more detail below as well as the
decline in fabrication revenues per pound. Pounds of wholesale products shipped increased by 10.9 million pounds, or
13.8%, to 90.0 million in 2003 from 79.1 million in 2002 due to the expansion
of our customer base for these products. Sales of wholesale products increased
by $21.2 million, or 22.5%, to $115.1 million in 2003 from $93.9 million in
2002, due to the increase in shipments, as well as an increase in revenue per
pound. Revenue per pound was up $0.09 to $1.28 in 2003, reflecting an increase
in COMEX copper prices. Gross profit from wholesale products decreased $4.6
million to a loss of $0.3 million in 2003 from a profit of $4.3 million in
2002, due to an increase in metal costs which we are not able to completely
pass on to our customers, as well as specific escalations of costs that are
discussed in more detail below, offset somewhat by increased volumes. Metal
costs increased due to an increase in COMEX copper prices as well as a shortage
in the available supply and higher costs of recycled metal used in the
production of wholesale products. Pounds of rod and bar products shipped decreased by 1.7 million pounds, or
8.0%, to 19.8 million in 2003 from 21.6 million in 2002 due to a weak U.S.
industrial environment. Sales of rod, bar and other products increased $3.4
million, or 9.6%, to $38.7 million in 2003 from $35.4 million in 2002. Other
products are primarily those products sold from our distribution center in The
Netherlands. Gross profit from rod, bar and other products decreased $0.3
million, or 10.8%, to $2.1 million in 2003 from $2.4 million in 2002, due to
decreased shipments of rod and bar products, partially offset by an increase in
gross profit from the activities of our distribution center in The Netherlands
which also benefited from a strong Euro. Gross profit was also impacted by
specific escalations of cost that are discussed in more detail below. Consolidated gross profit decreased $17.6 million, or 30.1%, to $40.9 million
in 2003 from $58.4 million in 2002. Gross profit in 2003 was negatively
impacted by the aforementioned increase in metal costs for wholesale products,
decreased shipments of rod and bar products, and a modest 27




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decline in
fabrication revenues per pound for commercial products. We also had
approximately $7.6 million of additional cost in 2003 compared to 2002 related
to natural gas, healthcare, pensions and workers compensation expenses. Gross
profit also declined approximately $3.7 million because of the translation
impact of the Canadian dollar to the weak U.S. dollar and the fact that
approximately fifty percent of sales from our Canadian operations are
denominated in U.S. dollars. Additionally, gross profit declined $5.7 million
due to a loss on our copper forward sales position that we have in place to
hedge against a decrease in the valuation of our copper inventory and that was
not offset by gains upon the sale of our physical inventory at prevailing
market prices. Copper prices spiked sharply, especially during the fourth
quarter of 2003, resulting in a loss on our hedge position that was not offset
by the purchase of inventory, due in part to the curtailment of our operations
for the two-week holiday period in December 2003. Gross profit in 2003 also
declined approximately $1.2 million because of manufacturing
inefficiencies and professional expenses related to union activities at our
Decatur, Alabama and Shawnee, Oklahoma plants. The Decatur workforce voted to
remain union free while approximately 37 maintenance employees at our Shawnee
facility elected to be represented by the Arkansas Regional Council of
Carpenters/United Brotherhood of Carpenters and Joiners of America. Further,
gross profit in 2003 declined because of the northeastern power outages in
August 2003 which caused our London, Ontario plant to lose approximately two
production days and normal production at the plant to be interrupted for
approximately another week due to rolling black-outs. Gross profit in 2003
benefited from a $0.8 million cash payment resulting from a class action
litigation settlement in the copper market in the second quarter of 2003. Consolidated selling, general and administrative expenses for the year ended
December 31, 2003 increased by $1.5 million, or 4.9%, to $32.1 million, from
$30.6 million in 2002. Consolidated selling, general and administrative
expenses were approximately five percent of sales for both 2003 and 2002. The
increase in selling, general and administrative expenses was mainly due to a
$0.7 million increase in salary expense and a $1.3 million increase in pension
expense, offset by a $0.9 million reduction in employee related expenses,
primarily associated with incentive pay that is tied to financial performance.
Salary expense increased due to merit and cost of living pay increases and due
to the fact that selling, general and administrative expenses in the first
quarter of 2002 included a 10% pay reduction for salaried employees which was
subsequently restored. Pension expense increased primarily due to the impact
of the decline in fair value of plan assets at January 1, 2003. Operating (loss) income from continuing operations was a loss of $(6.3) million
for the year ended December 31, 2003, as compared to income of $27.8 million in
2002. The operating loss in 2003 was primarily due to the aforementioned $17.6
reduction to gross profit, $1.5 million increase in selling, general and
administrative expenses, and $15.1 million of restructuring charges, as
described under Restructuring and Other Charges below. Consolidated net interest expense increased $1.5 million to $21.2 million in
2003 from $19.7 million in 2002. Interest expense increased $1.5 million in
2003 because on March 27, 2002, we issued $120.0 million in principal amount of
10.5% Senior Notes replacing approximately $97.3 million of borrowings under
our old revolving credit facility which had an average interest rate of 4.9% in
the first quarter of 2002. Consolidated net interest expense is net of
interest income and capitalized interest of $0.6 million and $0.1 million,
respectively, for 2003 and $0.5 million and $0.7 million, respectively, for
2002. Consolidated net interest expense in 2002 is also net of interest income
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million. Interest expense was reduced $1.1 million in 2003 and $0.3 million
in 2002 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.

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 realized a $0.5 million
reduction in interest expense in 2003.

Amortization and other, net was $1.9 million of expense in 2003, as compared to
$1.0 million of expense in 2002. Amortization and other, net in 2003 included
$0.2 million of foreign currency losses. 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. Amortization expense in
2003 increased $0.2 million to $1.5 million compared to $1.3 million in 2002
due to the deferred financing fees incurred when we obtained our new financing
in March 2002.

During the third quarter of 2003, we evaluated the carrying value of goodwill.
Updated valuations for each reporting unit were completed using a discounted
cash flow approach based on forward-looking information regarding market share,
revenues and costs. Our valuation was based on a 3% to 5% long-term growth
rate, a discount rate of 14% and two reporting units, The Tube Group and The
Fabricated Products Group. The Tube Group consists of our Decatur, Shawnee,
Jackson, Booneville, Montreal, London, Shanghai and Esposende facilities for
which we had $23.2 million of goodwill. The Fabricated Products Group consists
of our Altoona, Carrollton, Warwick, Ardmore and Apeldoorn facilities for which
we have $77.2 million of goodwill. Based on the results of this review, the
fair value of The Tube Group reporting unit was less than its carrying value
and we recorded a goodwill impairment charge of $23.2 million in the third
quarter of 2003. The fair value of The Tube Group reporting unit decreased
significantly from the value derived when we tested for impairment in 2002 due
to a decrease in the long-term growth rate from 4% to 3%, a reduction in our
projections of future profitability and an increase in the discount rate from
12% to 14%. The fair value of The Fabricated Products Group reporting unit
exceeded its carrying value assuming a 5% growth rate, 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
assumptions change in the future, we may be required to record impairment
charges for The Fabricated Products Group goodwill in the future.

A net tax benefit of $13.6 million was recorded in 2003 as compared to tax
expense of $1.3 million in 2002. The effective tax rate in 2002 was 15.5%.
The 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. We recorded a
$13.6 million tax benefit in 2003 on pretax losses from continuing operations
of $52.6 million, yielding an overall effective tax rate of 25.9%. Adjusting
our pre-tax loss to exclude $20.3 million of the $23.2 million charge for the
impairment of goodwill, which is not tax deductible, yields an adjusted
effective tax rate of 42.1% for 2003. The effective tax rate recorded in 2003
reflects federal tax benefits generated in the United States, where tax rates
are generally higher than in our foreign jurisdictions and where we had
significant pre-tax losses. The higher effective rate on adjusted pre-tax
losses also reflects lower

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foreign tax rates and tax holidays applicable to our
profitable operations in China, Portugal and
Canada. A valuation allowance was recorded against all state net operating
losses generated in 2003 and 2002 because we do not believe that there will be
adequate taxable income generated in the carryforward periods through
operations or reversal of timing differences to realize these operating loss
carryforwards.

Consolidated (loss) income from continuing operations in 2003 decreased by
$46.2 million to a loss of $(39.0) million, or $(3.18) per diluted share, from
$7.2 million, or $0.58 per diluted share, in 2002.

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.

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

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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.

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

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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.

Restructuring and Other Charges

During 2003, we recognized restructuring charges of $15.1 million ($9.9 million
net of tax). We formalized a plan to terminate approximately 200, or 6% of our
workforce. These primarily represented salaried and indirect hourly employees
and, to a lesser extent, direct hourly employees, from all of our plants in
North America and the corporate office. In conjunction with this plan, we
accrued and charged to expense $1.1 million for severance benefits for
approximately 92 of these employees. This reduction in workforce was deemed
necessary in order to reduce costs in a weak economic environment. As of
December 31, 2003, we have made approximately $0.7 million of payments against
the $1.1 million liability for severance benefits and most of the terminations
took place within the two-week period subsequent to September 28, 2003. As of
December 31, 2003, we have accrued $0.4 million of restructuring cost
representing our remaining cash obligations. This workforce reduction is
expected to result in annualized savings of approximately $8.0 million.

The 2003 restructuring charges also included: $10.4 million related to the
closure of our Booneville, Mississippi facility (discussed below); a $2.6
million write-down of assets held for sale in Roxboro, North Carolina; a $0.3
million charge related to the write-off of impaired assets at our Altoona,
Pennsylvania facility; and $0.7 million of other charges. The impairment
charge for the assets held for sale in Roxboro, North Carolina was a result of
writing down the land and building to our revised, lower estimate of fair
value. Demand for industrial facilities in this geographic area is extremely
weak due to the very slow industrial economy.

We announced in the third quarter of 2003 that we would close our Booneville,
Mississippi facility. The facility produced both smooth and enhanced
industrial tube, primarily used by residential and commercial air conditioner
manufacturers and employed approximately 140 persons. We substantially
completed the transition of production from the Booneville plant to our other
facilities as of December 31, 2003. The $10.4 million charge for our
Booneville facility includes a $8.9 million write-off of impaired assets
including $2.6 million of spare parts and supplies related to these assets,
$0.3 million of severance costs, and $1.2 million of other costs required for
the closure of the facility. In future quarters, we anticipate incurring
additional restructuring charges for the closure of this facility of
approximately $1.6 million. We anticipate

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that key decisions related to the
final disposition and relocation of the Booneville equipment will be finalized
during the first half of 2004. As of December 31, 2003, we have an accrued
balance
of $3.8 million of restructuring cost, representing $2.6 million of spare parts
and supplies, $0.2 million of impaired assets and $1.0 million of estimated
cash obligations. Annual savings from this closure and reallocation of
production are expected to be approximately $3.0 million.

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.

Liquidity and Capital Resources

The primary source of our liquidity for the year ended December 31, 2003 was
cash on hand at the beginning of the year. The primary use of our funds in
2003 was $6.0 million for investments in property, plant and equipment. We
also transferred $4.3 million to a rabbi trust in 2003 to partially fund the
vested benefit obligations to certain executives under our Supplemental
Executive Retirement Plan.

The primary sources of our liquidity for the year ended December 31, 2002 were
cash on hand at the beginning of the year, $41.4 million of cash provided by
continuing operations and $118.5 million from the issuance of our 10.5% Senior
Notes. The primary uses of our funds in 2002 were $98.4 million to repay our
revolving credit facilities, $7.7 million for investments in property, plant
and equipment, $13.9 million to purchase our Senior Notes in the open market,
$8.7 million of financing fees related to the issuance of our 10.5% Senior
Notes, $5.0 million for a voluntary contribution to our U.S. pension plans and
$1.0 million related to the mandatory redemption of our preferred stock.

The primary sources of our liquidity for the year ended December 31, 2001 were
cash on hand at the beginning of the year, $26.6 million of cash provided by
continuing operations and $16.7 million of net borrowings under our revolving
credit facility. The primary uses of our funds in 2001 were $27.6 million for
investments in property, plant and equipment and $13.3 million for the
discontinued operations of Wolverine Ratcliffs, Inc.

Net cash provided by continuing operating activities totaled $0.2 million for
2003 as compared to $41.4 million for 2002 and $26.6 million for 2001. The net
decrease in operating cash flows in 2003 compared to 2002 was primarily the
result of recording a net loss in 2003 versus net income in 2002, as well as
the net increase in accounts receivable due primarily to increased sales in the
fourth quarter of 2003 compared to the fourth quarter of 2002 and the net
increase in inventory, primarily related to rising copper prices in 2003. The
net increase in operating cash

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flows in 2002 compared to 2001 was primarily the
result of a decrease in inventory in 2002 relative to 2001 due to the
liquidation of the WRI inventory in 2002 as well as our general strategy of
reducing inventory levels.

As of December 31, 2003, we had no outstanding borrowings under our secured
revolving credit facility. We had approximately $7.9 million of standby
letters of credit issued under the secured revolving credit facility and
approximately $29.2 million (subject to a $2.0 million excess availability
requirement) in additional borrowing availability thereunder.

In the third quarter of 2003, we and our lenders executed an amendment to the
secured revolving credit facility to change the minimum fixed charge coverage
ratio for the third and fourth quarters of 2003 from 1.10 to 1.05 and the
minimum consolidated EBITDA requirement on a rolling four-quarter basis for the
third and fourth quarters of 2003 from $40.0 million and $42.0 million
respectively, to $27.0 million for each quarter. The need for the amendment
was 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 fixed charge coverage
ratio for each quarter of 2004 of 1.10 and the minimum consolidated EBITDA
requirement on a rolling four-quarter basis for each quarter of 2004 of $55.0
million remains unchanged.

Our financial performance in the fourth quarter of 2003 prevented us from
satisfying the terms of the amendment to the secured revolving credit facility
that we executed in the third quarter of 2003. On February 19, 2004, we and
our lenders executed a waiver to the secured revolving credit facility to waive
compliance with the minimum consolidated EBITDA requirement and the minimum
fixed charge coverage ratio for the quarter ended December 31, 2003. The
financial covenants of our secured revolving credit facility for 2004 have not
been amended. We are working with our lenders to amend and extend the secured
revolving credit facility prior to the end of the first quarter of 2004. Prior
to the amendment, we expect to have access to the facility as needed. Based
upon our relationship with our lenders and our progress to date, we believe
that the secured revolving credit facility will be amended as planned with
customary terms and conditions for a facility of this type. However, we give
no assurances that we will be able to amend and extend the secured revolving
credit facility in this manner.

On October 30, 2003, Standard and Poors Ratings Services lowered its rating on
our senior unsecured debt one step from BB- to B+. Standard and Poors noted
that the change in rating was a result of our recent weak earnings performance
and that the rating reflected a narrow product line, cyclical markets,
significant customer concentration, profitability at sharply depressed levels
and aggressive use of debt, slightly offset by a business profile with
defensible positions in niche segments and reasonable near term liquidity. On
November 20, 2003, Moodys Investors Service, Inc. lowered its rating on our
senior unsecured debt to B3 from B1. Moodys noted that the change in rating
reflected the Companys operating performance, which was lower than Moodys
expectations, Moodys view that the Company would be challenged to materially
improve its operating performance in the intermediate term, and Moodys
concerns about the Companys liquidity given the small size of its credit
facility and its need to amend financial covenants in its credit facility.

Capital expenditures for continuing operations were $6.0 million in 2003, $7.7
million in 2002 and $27.6 million in 2001. The significant amount of capital
expenditures in 2001 for our Project 21 capital program temporarily reduced our
requirements in 2002 and 2003 for

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maintenance capital expenditures. We
currently expect to spend approximately $10 million in 2004. Our capital
expenditures include asset replacement, environmental compliance and cost
reduction and productivity improvement items.

The ratio of current assets to current liabilities was 3.2 in 2003, 4.3 in 2002
and 3.3 in 2001, in each case calculated as of December 31. Our cash and cash
equivalent balances as of December 31, 2003 and 2002 were $46.1 million and
$53.9 million, respectively, of which $37.6 million and $31.5 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 our cash balances, anticipated cash flow from our continuing operations,
and anticipated completion of the amendment and extension of our secured
revolving credit facility in the first quarter of 2004, with satisfactory terms
and conditions, we believe that we will be able to satisfy our existing working
capital needs, interest obligations and capital expenditure requirements in
2004 and beyond. If we are unable to satisfactorily complete the amendment and
extension of the secured revolving credit facility, we would anticipate the
repatriation of cash from our foreign operations in order to meet our financial
obligations. This repatriation would result in additional tax expense and
require additional cash payments for taxes.

Off-Balance Sheet Arrangements

As of December 31, 2003, we do not have any off-balance sheet arrangements that
either have, or are reasonably likely to have, a material current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources.

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Contractual Obligations and Commercial Commitments

The following table provides a summary of our contractual obligations and
commercial commitments as of December 31, 2003. As of December 31, 2003, the
total other noncurrent liabilities included in our balance sheet not presented
below in the table were $40.8 million. Refer to Notes 11, 12, 13 and 14 of the
Notes to the Consolidated Financial Statements.

|                                                              |  |       |         |      |  |             |       |           |  |       |       |  |  |   |         |             |  |   |         | 
|------------------------------------------------------------- |  | ----- | ------- | ---- |  | ----------- | ----- | --------- |  | ----- | ----- |  |  | - | ------- | ----------- |  | - | ------- | 
|Payments due or expiring by period                           
|                                                             
|                                                              |  |       |         |      |  | Less than 1 |       |           |  |       |       |  |  |   |         | More than 5
|(In thousands)                                                |  | Total |         | year |  | 1-3 years   |       | 3-5 years |  | years
|                                                              |  |       |         |      |  |             |       |           |  |      
|Contractual
obligations:                                      |  |       |         |      |  |             |       |           |  |       |       |  |  |   |         |             |  |   |         | 
|Long-term debt                                                |  | $     | 254,284 |      |  | $           |      |           |  | $     | 588   |  |  | $ | 136,765 |             |  | $ | 116,931 | 
|Operating leases                                              |  |       | 10,333  |      |  |             | 3,268 |           |  |       | 4,240 |  |  |   | 1,261   |             |  |   | 1,564   | 
|Commitments for
capital
expenditures                          |  |       | 852     |      |  |             | 852   |           |  |       |      |  |  |   |        |             |  |   |        | 
|Other purchase
obligations                                    |  |       | 1,170   |      |  |             | 1,170 |           |  |       |      |  |  |   |        |             |  |   |        | 
|                                                              |  |       |         |      |  |             |       |           |  |       |       |  |  |   |         |             |  |   |         | 
|Total contractual
obligations                                 |  | $     | 266,639 |      |  | $           | 5,290 |           |  | $     | 4,828 |  |  | $ | 138,026 |             |  | $ | 118,495 | 
|                                                              |  |       |         |      |  |             |       |           |  |       |       |  |  |   |         |             |  |   |         | 
|Other commercial
commitments (by
scheduled
expiration dates): |  |       |         |      |  |             |       |           |  |       |       |  |  |   |         |             |  |   |         | 
|                                                              |  |       |         |      |  |             |       |           |  |       |       |  |  |   |         |             |  |   |         | 
|Standby letters of
credit                                     |  | $     | 7,940   |      |  | $           | 5,030 |           |  | $     | 2,910 |  |  |   |        |             |  |   |        | 
|                                                              |  |       |         |      |  |             |       |           |  |       |       |  |  |   |         |             |  |   |         | 

At December 31, 2003 we had commitments to purchase approximately 81.7 million
pounds of copper during 2004, to be priced when purchased at COMEX plus a fixed
spread of $0.03 per pound on average. During 2003, the monthly average COMEX
price of copper ranged from $0.72 to $1.00 per pound. These commitments were
negotiated in the normal course of business and represent a portion of our
copper requirements for 2004, which we anticipate will exceed 300 million
pounds.

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 secured
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 secured 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 secured revolving
credit facility matures on March 27, 2005.

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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 as 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, 2003, we recorded the fair market value of the
interest rate swap of $0.4 million as other liabilities with a corresponding
decrease 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, which commenced on February 1, 2003 and will end
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 2003 and 2002 of $1.1
million and $0.3 million, respectively. We anticipate that the terms of the
swap will reduce our interest expense in 2004 by approximately $1.2 million
assuming rates as of December 31, 2003. Our obligations under this swap
agreement are secured on the same basis as our obligations under our secured
revolving credit facility.

Senior Notes Due 2009

At December 31, 2003 we had outstanding $118.0 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. Our 10.5%
Senior Notes:



| |  |  | have interest payment dates on April 1 and October 1 of each year;                                                                         
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 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;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------

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| |  |  | 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

At December 31, 2003 we had outstanding $136.8 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;                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 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, 2003 and 2002 was $246.9 million and $246.2 million, respectively,
versus a carrying value of $253.5 million and $253.3 million as of December 31,
2003 and 2002, respectively. A 1% increase from prevailing interest rates
would result in a decrease in fair value

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of this debt by approximately $8.9
million as of December 31, 2003. 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 9.43% and 9.90%
for the 10.5% Senior Notes as of December 31, 2003. Generally, changes in the
market value of our fixed-rate debt do not affect us, unless we repurchase the
debt in the open market.

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, 2003, we recorded the fair market value of
the interest rate swap of $0.4 million as other liabilities with a
corresponding decrease to the hedged debt, with equal and offsetting unrealized
gains and losses included in other income (expense), net. 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. For the year ended December 31, 2003, the interest rate swap
effectively converted $50 million of fixed rate 7.375% Senior Notes to a
variable rate of 5.130%.

Commodity Price Risk

In connection with the sale of some materials, principally copper, we have
entered into commodity forward contracts as we have deemed appropriate to
reduce the risk of price increases with respect to both firm-price sale
commitments and anticipated sales. As of December 31, 2003, we had entered
into contracts hedging the raw material requirements for committed and
anticipated future sales through December 2004 having a notional value of $20.6
million. 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. The estimated fair value
of these outstanding contracts based on the forward rates at the end of the
year was an asset or (liability) of approximately $3.0 million as of December
31, 2003 and $(0.5) million as of December 31, 2002. A 10.0% decline in
commodity prices would decrease the estimated fair value of these outstanding
contracts by $2.4 million at December 31, 2003.

We also have entered into commodity forward contracts as we have deemed
appropriate to reduce the risk of price decreases with respect to firm-price
purchase commitments. As of December 31, 2003, we had entered into contracts
hedging the raw material requirements for committed future purchases through
February 2004 having a notional value of $5.5 million. The estimated fair
value of these outstanding contracts based upon forward rates at December 31,
2003 was approximately $(0.5) million as of December 31, 2003. A 10.0%
increase in commodity prices would decrease the estimated fair value of these
outstanding contracts by $0.5 million at December 31, 2003.

We also have entered into commodity forward contracts to sell copper with a
notional value of $32.7 million in March 2004. As of December 31, 2002, we had
entered into commodity forward contracts to sell copper in March 2003 with a
notional value of $18.1 million and in December 2003 with a notional value of
$7.5 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

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sold. The estimated fair value of these outstanding
contracts based upon forward rates at the end of the year was a (loss) gain of
approximately $(3.8) million and $0.8 million as of December 31, 2003 and 2002,
respectively. A 10.0% increase in commodity prices would increase the
estimated loss on these outstanding contracts by $2.9 million at December 31,
2003.

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.
As of December 31, 2003, we had commodity futures contracts to purchase
natural gas for the period February 2004 through December 2004 with a notional
amount of $6.0 million and an unrealized gain of $0.3 million, based on futures
prices as of December 31, 2003. 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. The effect of a
10.0% decline in commodity prices as of December 31, 2003 for these futures
contracts would result in a potential loss in fair value of approximately $0.6
million.

Foreign Currency Risk

Our foreign currency exposures relate primarily to changes in exchange rates
among the U.S. dollar, Canadian dollar, Euro and British Pounds Sterling. Some
of our operations use foreign exchange forward contracts to hedge fixed
purchase and sales commitments denominated in a foreign currency. 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, 2003, we had forward exchange contracts outstanding to
purchase foreign currency with a notional amount of $11.4 million and to sell
foreign currency with a notional amount of $0.9 million. As of December 31,
2003, we had an insignificant unrealized gain 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 $1.2 million.

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.

Environmental

Our facilities and operations are subject to extensive environmental laws and
regulations. During the year ended December 31, 2003, we spent approximately
$0.3 million on environmental matters, which include remediation costs,
monitoring costs, legal and other costs. We had a reserve of $1.2 million at
December 31, 2003 for undiscounted environmental remediation costs which is
reflected in our Condensed Consolidated Balance Sheet. We intend to spend
approximately $0.3 million for capital expenditures relating to environmental
matters

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during 2004. 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, 2003 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. 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 2002 Annual Groundwater Monitoring and Effectiveness Report that we
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.

Part of the ground water contamination plume had previously been detected
underneath a section of adjoining 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
the adjoining property that indicated there were no longer detectable levels of
chrome beyond our property boundary. In December 2003, we took another sample
from this adjoining property but the results of the sample have not yet been
analyzed by our consultants.

The cost to us to comply with the CMS, as currently approved, is not expected
to have an adverse effect on our business, financial condition or results of
operations. These costs include continued system operation for three
additional years, monitoring and reporting for six additional years, and
shutdown and decommissioning. Based on our estimates of the costs of these
activities, we reduced the amount previously accrued for this project by $0.1
million.

In July of 2000, we notified the EPA and 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 Alabama Department of Environmental Management
stating that a preliminary assessment would be forthcoming, but no further
action has occurred to date. Because an assessment has not been performed or
defined, we reduced the amount previously accrued for this project by $0.2
million. When an investigation is initiated,

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we will increase the reserve as
necessary for any additional costs once the extent of the investigation is
further defined.

The estimated remaining investigative, monitoring, remedial, legal and other
costs related to the environmental matters of our Decatur, Alabama facility are
$0.2 million as of December 31, 2003.

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 prepared a response to the Tennessee Divisions
comments and met with the Tennessee Division on August 13, 2003 to discuss
their comments and our response with their risk assessment team. Based on the
August 13, 2003 meeting, addressing the Tennessee Divisions comments is not
expected to have a material affect on the project. We continue the monitoring
and analysis program in compliance with the consent agreement.

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, 2003 that it will cost between $0.9
million and $1.6 million to complete the investigation and develop the
remediation plans for this site.

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.

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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 and began
remediation efforts. 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. No further active
remediation is anticipated unless plume concentrations offsite exceed
predetermined levels. 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. 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 regulatory flexibility in reaching a site
closure. 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.

We estimate as of December 31, 2003 that the remaining monitoring and reporting
costs could total $95,000 over the next 10 to 15 years, but these costs could
increase if additional remediation is required. Because of the extended period
of time that monitoring and reporting will continue on this site and the
insignificant annual costs attributable to these efforts, we will expense all
costs as we incur them and do not have a reserve for these costs as of December
31, 2003.

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 previous owner
closed the hazardous waste lagoons in 1982. 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 $28,000. 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. We anticipate submitting a final remedial
investigation report to the Pennsylvania Department of Environmental Protection
in the first quarter of 2004.

Impact of Recently Issued Accounting Standards

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

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ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT 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.

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ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|                                                                                                        |  |      |      | 
|------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                        |  | Page
|                                                                                                        |  |     
|Consolidated Statements of Operations  For the years ended December
31, 2003, 2002 and 2001.           |  |      | F-1  | 
|Consolidated Balance Sheets  December 31, 2003 and 2002.                                               |  |      | F-2  | 
|Consolidated Statements of Stockholders Equity  For the years
ended December 31, 2003, 2002 and 2001. |  |      | F-3  | 
|Consolidated Statements of Cash Flows  For the years ended December
31, 2003, 2002 and 2001.           |  |      | F-4  | 
|Notes to Consolidated Financial Statements.                                                             |  |      | F-5  | 
|Report of Ernst & Young LLP, Independent Auditors.                                                      |  |      | F-46 | 

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

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

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ITEM 9A CONTROLS AND PROCEDURES

Under the supervision and with the participation of management, including our
Chief Executive Officer, Dennis J. Horowitz, and our Chief Financial Officer,
James E. Deason, we carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as
of the end of the period covered by this report. Based upon that evaluation,
Messrs. Horowitz and Deason have concluded that, as of the end of the period
covered by this report, our disclosure controls and procedures have been
designed and are effective to provide reasonable assurance that information we
are required to disclose in the reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission.
These disclosure controls and procedures include, without limitation, controls
and procedures designed to provide reasonable assurance that information we are
required to disclose in such reports is accumulated and communicated to our
management, including Messrs. Horowitz and Deason, as appropriate to allow
timely decisions regarding required disclosure. The design of any system of
controls 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.

Based upon the evaluation performed by our management, which was conducted with
the participation of Messrs. Horowitz and Deason, there has been no change in
our internal control over financial reporting during the period covered by this
report that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

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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 2004 Annual Meeting of
Stockholders. The required information concerning our executive officers is
contained in Part I of this report. The required information concerning our
adoption of a code of ethics that applies to our chief executive officer,
principal financial officer, principal accounting officer or controller or
persons performing similar functions and the availability of this code of
ethics upon written request 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
Section 16(a) Beneficial Ownership Reporting Compliance contained in our
definitive proxy statement for the 2004 Annual Meeting of Stockholders.

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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 2004 Annual Meeting of Stockholders.

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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 2004 Annual Meeting of Stockholders.

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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 2004 Annual Meeting of
Stockholders.

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ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference from the
information under the caption Principal Accounting Firm Fees contained in our
definitive proxy statement for the 2004 Annual Meeting of Stockholders.

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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,
2003, 2002, and 2001.                                               
|
| |     |  | Consolidated Balance Sheets  December 31, 2003 and 2002.                                                                                    
|
| |     |  | Consolidated Statements of Stockholders Equity  For the years ended
December 31, 2003, 2002 and 2001.                                      
|
| |     |  | Consolidated Statements of Cash Flows  For the years ended December 31,
2003, 2002 and 2001.                                                
|
| |     |  | 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:

| |  |      |  |                                                                                                                                 
| |  | ---- |  | --------------------------------------------------------------------------------------------------------------------------------
| |  | 3.3  |  | Secretarys Certificate dated February 6, 2004
attached to a complete copy of the Bylaws of the Company
as amended May 22, 1997.
| |  |      |  |                                                                                                                                 
| |  | 21   |  | List of Subsidiaries                                                                                                            
| |  |      |  |                                                                                                                                 
| |  | 23   |  | Consent of Ernst & Young LLP, Independent
Auditors                                                                              
| |  |      |  |                                                                                                                                 
| |  | 31.1 |  | Certification of the Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                         

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| |  |      |  |                                                                                                                                                       
| |  | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 31.2 |  | Certification of the Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
| |  |      |  |                                                                                                                                                       
| |  | 32.1 |  | 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.
| |  |      |  |                                                                                                                                                       
| |  | 32.2 |  | 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. |  | Description                                                                                                                                                                                                                                                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                                                                                        
|3.1         |  | 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).                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                                                                        
|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                                                                                                                                                                                                                                                                     

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|            |  |                                                                                                                                                                                                                                                                                                                                           
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                               
|            |  |                                                                                                                                                                                                                                                                                                                                           
|            |  | 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).                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                                                                           
|10.3        |  | 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 (incorporated by
reference to Exhibit 10.21 to Wolverine Tube, Inc.s Annual
Report on Form 10-K for the period ended December 31, 2002).                                       
|            |  |                                                                                                                                                                                                                                                                                                                                           
|10.4        |  | Amendment No. 3 to Credit Agreement dated as of
September 28, 2003 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 28, 2003).                                
|            |  |                                                                                                                                                                                                                                                                                                                                           
|10.5        |  | 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).                  
|            |  |                                                                                                                                                                                                                                                                                                                                           
|10.6        |  | 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).
|            |  |                                                                                                                                                                                                                                                                                                                                           
|10.7*       |  | 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).                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                           

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|            |  |                                                                                                                                                                                                                                                                                                 
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                 
|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).                                                             
|            |  |                                                                                                                                                                                                                                                                                                 
|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                                                                                                                      

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|            |  |                                                                                                                                                                                                                                                                                            
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                
|            |  |                                                                                                                                                                                                                                                                                            
|            |  | Exhibit 10.6 to Wolverine Tube, Inc.s Quarterly Report on
Form 10-Q for the period ended June 30, 2002).                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                            
|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 (incorporated by
reference to Exhibit 10.20 to Wolverine Tube, Inc.s
Annual Report on Form 10-K for the period ended
December 31, 2002). 
|            |  |                                                                                                                                                                                                                                                                                            
|10.21*      |  | 2003 Annual Performance Incentive Plan (incorporated by
reference to Exhibit 10.22 to Wolverine Tube, Inc.s Annual
Report on Form 10-K for the period ended December 31, 2002).                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                            
|10.22*      |  | Deferred Compensation Trust Agreement by and between

Wolverine Tube, Inc. and AmSouth Bank (the Trustee) dated
February 13, 2001 (incorporated by reference to Exhibit 10.1
to Wolverine Tube, Inc.s Quarterly Report on Form 10-Q for
the period ended March 30, 2003).                 
|            |  |                                                                                                                                                                                                                                                                                            
|10.23*      |  | Amendment Number One to Deferred Compensation Trust
Agreement by and between Wolverine Tube, Inc. and AmSouth Bank
(the Trustee) dated May 7, 2003 (incorporated by reference to
Exhibit 10.2 to Wolverine Tube, Inc.s Quarterly Report on
Form 10-Q for the period ended March 30, 2003).
|            |  |                                                                                                                                                                                                                                                                                            
|10.24*      |  | Wolverine Tube, Inc. 2003 Equity Incentive Plan
(incorporated by reference to Exhibit 10.1 to Wolverine Tube,
Inc.s Quarterly Report on Form 10-Q for the period ended June
29, 2003).                                                                                                    
|            |  |                                                                                                                                                                                                                                                                                            
|10.25*      |  | First Amendment to Wolverine Tube, Inc. 2003 Equity
Incentive Plan (incorporated by reference to Exhibit 10.2 to
Wolverine Tube, Inc.s Quarterly Report on Form 10-Q for the
period ended June 29, 2003).                                                                                 
|            |  |                                                                                                                                                                                                                                                                                            
|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).                      



| | * |  | 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.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

57



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|(b) |  | Reports on Form 8-K.                                                                                                                                                                                       
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | A current report on Form 8-K related to the reporting of the Companys
results of operations and financial condition for the quarter ended
September 28, 2003 was furnished to the SEC on October 31, 2003.
|   
|    |  | A current report on Form 8-K related to the reporting of the Companys
results of operations and financial condition for the quarter ended
December 31, 2003 was furnished to the SEC on February 19, 2004.

58



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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 10th day of March 2004.

WOLVERINE TUBE, INC.

| |  |                                                                                                        
| |  | -------------------------------------------------------------------------------------------------------
| |  | By: /s/ James E. Deason                                                                                
| |  |                                                                                                        
| |  | Name: 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                     |  | Date                                 
|          |  |                           |  |                                      
|By:       |  | /s/ Dennis J. Horowitz    |  | Chairman, President, Chief            |  | March 10, 2004
|          |  |                           |  | Executive Officer and Director        |  |               
|          |  | Dennis J. Horowitz        |  | (Principal Executive Officer)         |  |               
|          |  |                           |  |                                       |  |               
|By:       |  | /s/ James E. Deason       |  | Executive Vice President, Chief       |  | March 10, 2004
|          |  |                           |  | Financial Officer, Secretary and      |  |               
|          |  | James E. Deason           |  | Director (Principal Financial Officer |  |               
|          |  |                           |  | and Principal Accounting Officer)     |  |               
|          |  |                           |  |                                       |  |               
|By:       |  | /s/ Jan K. Ver Hagen      |  | Director                              |  | March 10, 2004
|          |  |                           |  |                                       |  |               
|          |  | Jan K. Ver Hagen          |  |                                       |  |               
|          |  |                           |  |                                       |  |               
|By:       |  | /s/ W. Barnes Hauptfuhrer |  | Director                              |  | March 9, 2004 
|          |  |                           |  |                                       |  |               
|          |  | W. Barnes Hauptfuhrer     |  |                                       |  |               
|          |  |                           |  |                                       |  |               
|By:       |  | /s/ Thomas P. Evans       |  | Director                              |  | March 10, 2004
|          |  |                           |  |                                       |  |               
|          |  | Thomas P. Evans           |  |                                       |  |               
|          |  |                           |  |                                       |  |               
|By:       |  | /s/ John L. Duncan        |  | Director                              |  | March 10, 2004
|          |  |                           |  |                                       |  |               
|          |  | John L. Duncan            |  |                                       |  |               
|          |  |                           |  |                                       |  |               
|By:       |  | /s/ Chris A. Davis        |  | Director                              |  | March 10, 2004
|          |  |                           |  |                                       |  |               
|          |  | Chris A. Davis            |  |                                       |  |               
|          |  |                           |  |                                       |  |               
|By:       |  | /s/ Gail O. Neuman        |  | Director                              |  | March 5, 2004 
|          |  |                           |  |                                       |  |               
|          |  | Gail O. Neuman            |  |                                       |  |               

59



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Wolverine Tube, Inc. and Subsidiaries
Consolidated Statements of Operations

|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------ | -- | ----------------------- | ------ | ---- | - | ------- | ------ | - | -- | ------- | ------ | -
|                                                                                                                                                 |                                |    | Year ended December 31,
|                                                                                                                                                 |                                |    |                        
|                                                                                                                                                 |                                |    | 2003                    |        | 2002 |   | 2001   
|                                                                                                                                                 |                                |    |                         |        |      |   |        
|(In thousands except per share amounts)                                                                                                          |                                |    |                         |        |      |   |         |        |   |    |         |       
|Net sales                                                                                                                                        |                                | $  | 596,324                 |        |      | $ | 550,523 |        |   | $  | 583,114 |       
|Cost of goods sold                                                                                                                               |                                |    | 555,498                 |        |      |   | 492,082 |        |   |    | 520,874 |       
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Gross profit                                                                                                                                     |                                |    | 40,826                  |        |      |   | 58,441  |        |   |    | 62,240  |       
|Selling, general and administrative expenses                                                                                                     |                                |    | 32,103                  |        |      |   | 30,616  |        |   |    | 32,254  |       
|Restructuring and other charges                                                                                                                  |                                |    | 15,057                  |        |      |   |        |        |   |    | 1,546   |       
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Operating (loss) income from continuing operations                                                                                               |                                |    | (6,334                  | )      |      |   | 27,825  |        |   |    | 28,440  |       
|Other expenses (income):                                                                                                                         |                                |    |                         |        |      |   |         |        |   |    |         |       
|                                                                                                                                                 | Interest expense, net          |    |                         | 21,218 |      |   |         | 19,681 |   |    |         | 13,100 |  
|                                                                                                                                                 | Gain on extinguishment of debt |    |                         |       |      |   |         | (1,349 | ) |    |         |       |  
|                                                                                                                                                 | Amortization and other, net    |    |                         | 1,856  |      |   |         | 1,008  |   |    |         | (447   | )
|                                                                                                                                                 | Goodwill impairment            |    |                         | 23,153 |      |   |         |       |   |    |         |       |  
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|(Loss) income from continuing operations before
income taxes                                                                                     |                                |    | (52,561                 | )      |      |   | 8,485   |        |   |    | 15,787  |       
|Income tax (benefit) provision                                                                                                                   |                                |    | (13,577                 | )      |      |   | 1,315   |        |   |    | 4,345   |       
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|(Loss) income from continuing operations                                                                                                         |                                |    | (38,984                 | )      |      |   | 7,170   |        |   |    | 11,442  |       
|Loss from discontinued operations, net of income
tax benefit of $(0.8), ($0.9) million and
($12.1) million for 2003, 2002 and 2001,
respectively |                                |    | (1,637                  | )      |      |   | (1,610  | )      |   |    | (31,240 | )     
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Net (loss) income                                                                                                                                |                                |    | (40,621                 | )      |      |   | 5,560   |        |   |    | (19,798 | )     
|Less preferred stock dividends                                                                                                                   |                                |    |                        |        |      |   | (58     | )      |   |    | (280    | )     
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Net (loss) income applicable to common shares                                                                                                    |                                | ($ | 40,621                  | )      |      | $ | 5,502   |        |   | ($ | 20,078  | )     
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|(Loss) earnings per common sharebasic:                                                                                                          |                                |    |                         |        |      |   |         |        |   |    |         |       
|Continuing operations                                                                                                                            |                                | ($ | 3.18                    | )      |      | $ | 0.58    |        |   | $  | 0.92    |       
|Discontinued operations                                                                                                                          |                                |    | (0.13                   | )      |      |   | (0.13   | )      |   |    | (2.58   | )     
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Net (loss) income per common sharebasic                                                                                                         |                                | ($ | 3.31                    | )      |      | $ | 0.45    |        |   | ($ | 1.66    | )     
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Basic weighted average number of common shares                                                                                                   |                                |    | 12,275                  |        |      |   | 12,231  |        |   |    | 12,077  |       
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|(Loss) earnings per common sharediluted:                                                                                                        |                                |    |                         |        |      |   |         |        |   |    |         |       
|Continuing operations                                                                                                                            |                                | ($ | 3.18                    | )      |      | $ | 0.58    |        |   | $  | 0.91    |       
|Discontinued operations                                                                                                                          |                                |    | (0.13                   | )      |      |   | (0.13   | )      |   |    | (2.54   | )     
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Net (loss) income per common sharediluted                                                                                                       |                                | ($ | 3.31                    | )      |      | $ | 0.45    |        |   | ($ | 1.63    | )     
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       
|Diluted weighted average number of common and
common equivalent shares                                                                           |                                |    | 12,275                  |        |      |   | 12,362  |        |   |    | 12,307  |       
|                                                                                                                                                 |                                |    |                         |        |      |   |         |        |   |    |         |       

See accompanying notes.

F-1



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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidated Balance Sheets

|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ------- | ---- | - | ------- | ------- | -
|                                                  |                                                                                                                                                               |   | December 31,
|                                                  |                                                                                                                                                               |   |             
|                                                  |                                                                                                                                                               |   | 2003         |         | 2002
|                                                  |                                                                                                                                                               |   |              |         |     
|(In thousands except share and per share amounts) |                                                                                                                                                               |   |              |         |      |   |         |        
|Assets                                            |                                                                                                                                                               |   |              |         |      |   |         |        
|Current assets                                    |                                                                                                                                                               |   |              |         |      |   |         |        
|                                                  | Cash and equivalents                                                                                                                                          |   | $            | 46,089  |      |   | $       | 53,920  |  
|                                                  | Accounts receivable, net                                                                                                                                      |   |              | 86,825  |      |   |         | 65,212  |  
|                                                  | Inventories                                                                                                                                                   |   |              | 108,005 |      |   |         | 85,485  |  
|                                                  | Refundable income taxes                                                                                                                                       |   |              |        |      |   |         | 6,347   |  
|                                                  | Prepaid expenses and other                                                                                                                                    |   |              | 12,782  |      |   |         | 8,055   |  
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|Total current assets                              |                                                                                                                                                               |   | 253,701      |         |      |   | 219,019 |        
|Property, plant and equipment, net                |                                                                                                                                                               |   | 198,542      |         |      |   | 208,999 |        
|Deferred charges, net                             |                                                                                                                                                               |   | 14,770       |         |      |   | 13,811  |        
|Goodwill, net                                     |                                                                                                                                                               |   | 77,159       |         |      |   | 100,100 |        
|Assets held for sale                              |                                                                                                                                                               |   | 4,797        |         |      |   | 8,791   |        
|Investments                                       |                                                                                                                                                               |   | 4,289        |         |      |   |        |        
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|Total assets                                      |                                                                                                                                                               | $ | 553,258      |         |      | $ | 550,720 |        
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|Liabilities and Stockholders Equity              |                                                                                                                                                               |   |              |         |      |   |         |        
|Current liabilities                               |                                                                                                                                                               |   |              |         |      |   |         |        
|                                                  | Accounts payable                                                                                                                                              |   | $            | 47,503  |      |   | $       | 30,290  |  
|                                                  | Accrued liabilities                                                                                                                                           |   |              | 29,787  |      |   |         | 19,293  |  
|                                                  | Short-term borrowings                                                                                                                                         |   |              | 1,502   |      |   |         | 1,217   |  
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|Total current liabilities                         |                                                                                                                                                               |   | 78,792       |         |      |   | 50,800  |        
|Deferred income taxes                             |                                                                                                                                                               |   | 359          |         |      |   | 11,902  |        
|Long-term debt                                    |                                                                                                                                                               |   | 254,284      |         |      |   | 255,712 |        
|Pension liabilities                               |                                                                                                                                                               |   | 22,316       |         |      |   | 14,540  |        
|Postretirement benefit obligation                 |                                                                                                                                                               |   | 16,995       |         |      |   | 15,666  |        
|Accrued environmental remediation                 |                                                                                                                                                               |   | 1,161        |         |      |   | 1,465   |        
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|Total liabilities                                 |                                                                                                                                                               |   | 373,907      |         |      |   | 350,085 |        
|Stockholders equity                              |                                                                                                                                                               |   |              |         |      |   |         |        
|                                                  | Common Stock, par value $0.01 per share;
40,000,000 shares authorized, 14,344,806 and
14,326,239 shares issued as of December 31,
2003 and 2002, respectively |   |              | 143     |      |   |         | 143     |  
|                                                  | Additional paid-in capital                                                                                                                                    |   |              | 103,339 |      |   |         | 103,213 |  
|                                                  | Retained earnings                                                                                                                                             |   |              | 123,926 |      |   |         | 164,547 |  
|                                                  | Unearned compensation                                                                                                                                         |   |              | (172    | )    |   |         | (302    | )
|                                                  | Accumulated other comprehensive loss                                                                                                                          |   |              | (10,510 | )    |   |         | (29,591 | )
|                                                  | Treasury stock, at cost 2,063,800 shares as
of December 31, 2003 and 2002                                                                                     |   |              | (37,375 | )    |   |         | (37,375 | )
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|Total stockholders equity                        |                                                                                                                                                               |   | 179,351      |         |      |   | 200,635 |        
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  
|Total liabilities and stockholders equity        |                                                                                                                                                               | $ | 553,258      |         |      | $ | 550,720 |        
|                                                  |                                                                                                                                                               |   |              |         |      |   |         |         |  

See accompanying notes.

F-2



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##### Table of Contents



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

|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |         |  
|---------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------- | ---------- | ------------ |  | ------- | ------ | -------- |  | ------- | ---------- | -------- | ---------- | -------- | --- | -------- |  | ----- | -------- | ------ | ------- | - | ------- | ------- | - | - | ------ | - |  | - | ------------------ | ------- | - | - | ------- | - | ----- | - | ------- | ------- | -
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   | Accumu-lated Other |         |   |   |         |   |       |   |        
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   | Compre-            |         |   |   |         |   | Total
|                                                                             |                                                                                                    |                 | Redeemable |              |  |         |        |          |  |         |            |          | Additional |          |     |          |  |       | Unearned |        | hensive |   |         |         |   |   | Stock-
|(In thousands except number                                                  |                                                                                                    | Preferred Stock |            | Common Stock |  | Paid-In |        | Retained |  | Compen- |            | Income   |            | Treasury |     | holders
|of shares)                                                                   |                                                                                                    | Shares          |            | Amount       |  | Shares  |        | Amount   |  | Capital |            | Earnings |            | sation   |     | (Loss)   |  | Stock |          | Equity
|Balance at December 31, 2000                                                 |                                                                                                    |                 | 20,000     |              |  | $       | 2,000  |          |  |         | 14,214,318 |          |            | $        | 142 |          |  | $     | 103,589  |        |         | $ | 179,123 |         |   | $ | (613   | ) |  | $ | (14,320            | )       |   | $ | (39,472 | ) |       | $ | 228,449 |        
|                                                                             | Net loss                                                                                           |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         | (19,798 | ) |   |        |  |  |   |                    |        |   |   |         |  |       |   |         | (19,798 | )
|                                                                             | Translation adjustments                                                                            |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | (5,681  | ) |   |         |  |       |   |         | (5,681  | )
|                                                                             | Change in fair value of
derivatives and
reclassification
adjustments, net of tax
benefit of $1,021 |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | (1,897  | ) |   |         |  |       |   |         | (1,897  | )
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|                                                                             | Comprehensive loss                                                                                 |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         | (27,376 | )
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|Common Stock issued                                                          |                                                                                                    |                 |           |              |  |         |       |          |  |         | 62,513     |          |            |          | 1   |          |  |       | 70       |        |         |   |        |         |   |   |       |   |  |   |                   |         |   |   |        |   |       |   | 71      |        
|Tax benefit from stock
options exercised                                     |                                                                                                    |                 |           |              |  |         |       |          |  |         |           |          |            |          |    |          |  |       | 78       |        |         |   |        |         |   |   |       |   |  |   |                   |         |   |   |        |   |       |   | 78      |        
|Preferred stock dividends                                                    |                                                                                                    |                 |           |              |  |         |       |          |  |         |           |          |            |          |    |          |  |       |         |        |         |   | (280    | )       |   |   |       |   |  |   |                   |         |   |   |        |   |       |   | (280    | )      
|Issuance of restricted stock
award and amortization of
unearned compensation |                                                                                                    |                 |           |              |  |         |       |          |  |         |           |          |            |          |    |          |  |       | 22       |        |         |   |        |         |   |   | 448    |   |  |   |                   |         |   |   |        |   |       |   | 470     |        
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|Balance at December 31, 2001                                                 |                                                                                                    |                 | 20,000     |              |  |         | 2,000  |          |  |         | 14,276,831 |          |            |          | 143 |          |  |       | 103,759  |        |         |   | 159,045 |         |   |   | (165   | ) |  |   | (21,898            | )       |   |   | (39,472 | ) |       |   | 201,412 |        
|                                                                             | Net income                                                                                         |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         | 5,560   |   |   |        |  |  |   |                    |        |   |   |         |  |       |   |         | 5,560   |  
|                                                                             | Translation adjustments                                                                            |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | 2,201   |   |   |         |  |       |   |         | 2,201   |  
|                                                                             | Change in fair value of
derivatives and
reclassification
adjustments, net of tax
of $884           |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | 1,641   |   |   |         |  |       |   |         | 1,641   |  
|                                                                             | Minimum pension
liability, net of tax
benefit of $7,166                                            |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | (11,535 | ) |   |         |  |       |   |         | (11,535 | )
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|                                                                             | Comprehensive loss                                                                                 |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         | (2,133  | )
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|Common Stock issued                                                          |                                                                                                    |                 |           |              |  |         |       |          |  |         | 49,408     |          |            |          |    |          |  |       | 89       |        |         |   |        |         |   |   |       |   |  |   |                   |         |   |   |        |   |       |   | 89      |        
|Tax benefit from stock
options exercised                                     |                                                                                                    |                 |           |              |  |         |       |          |  |         |           |          |            |          |    |          |  |       | 39       |        |         |   |        |         |   |   |       |   |  |   |                   |         |   |   |        |   |       |   | 39      |        
|Redemption of preferred stock                                                |                                                                                                    |                 | (20,000    | )            |  |         | (2,000 | )        |  |         |           |          |            |          |    |          |  |       | (1,097   | )      |         |   |        |         |   |   |       |   |  |   |                   |         |   |   | 2,097   |   |       |   | 1,000   |        
|Preferred stock dividends                                                    |                                                                                                    |                 |           |              |  |         |       |          |  |         |           |          |            |          |    |          |  |       |         |        |         |   | (58     | )       |   |   |       |   |  |   |                   |         |   |   |        |   |       |   | (58     | )      
|Issuance of restricted stock
award and amortization of
unearned compensation |                                                                                                    |                 |           |              |  |         |       |          |  |         |           |          |            |          |    |          |  |       | 423      |        |         |   |        |         |   |   | (137   | ) |  |   |                   |         |   |   |        |   |       |   | 286     |        
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|Balance at December 31, 2002                                                 |                                                                                                    |                 |           |              |  |         |       |          |  |         | 14,326,239 |          |            |          | 143 |          |  |       | 103,213  |        |         |   | 164,547 |         |   |   | (302   | ) |  |   | (29,591            | )       |   |   | (37,375 | ) |       |   | 200,635 |        
|                                                                             | Net loss                                                                                           |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         | (40,621 | ) |   |        |  |  |   |                    |        |   |   |         |  |       |   |         | (40,621 | )
|                                                                             | Translation adjustments                                                                            |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | 17,383  |   |   |         |  |       |   |         | 17,383  |  
|                                                                             | Change in fair value of
derivatives and
reclassification
adjustments, net of tax
of $1,032         |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | 1,918   |   |   |         |  |       |   |         | 1,918   |  
|                                                                             | Minimum pension
liability, net of tax
benefit of $132                                              |                 |            |             |  |         |        |         |  |         |            |         |            |          |     |         |  |       |          |       |         |   |         |        |   |   |        |  |  |   |                    | (220    | ) |   |         |  |       |   |         | (220    | )
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|                                                                             | Comprehensive loss                                                                                 |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         | (21,540 | )
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|Issuance of restricted stock
award and amortization of
unearned compensation |                                                                                                    |                 |           |              |  |         |       |          |  |         | 18,567     |          |            |          |    |          |  |       | 126      |        |         |   |        |         |   |   | 130    |   |  |   |                   |         |   |   |        |   |       |   | 256     |        
|                                                                             |                                                                                                    |                 |            |              |  |         |        |          |  |         |            |          |            |          |     |          |  |       |          |        |         |   |         |         |   |   |        |   |  |   |                    |         |   |   |         |   |       |   |         |        
|Balance at December 31, 2003                                                 |                                                                                                    |                 |           |              |  | $       |       |          |  |         | 14,344,806 |          |            | $        | 143 |          |  | $     | 103,339  |        |         | $ | 123,926 |         |   | $ | (172   | ) |  | $ | (10,510            | )       |   | $ | (37,375 | ) |       | $ | 179,351 |        

See accompanying notes.

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

|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |        |         |  
|--------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | -------------------------------------------------------------------------------- | ------- | ----------------------- | ------- | ---- | ------- | ------ | ------ | -- | ------- | ------ | ------- | -
|                                                                                                                |                                                     |                                                                                  |         | Year ended December 31,
|                                                                                                                |                                                     |                                                                                  |         |                        
|(In thousands)                                                                                                  |                                                     | 2003                                                                             |         | 2002                    |         | 2001
|                                                                                                                |                                                     |                                                                                  |         |                         |         |     
|Operating Activities                                                                                            |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|(Loss) income from continuing operations                                                                        |                                                     | $                                                                                | (38,984 | )                       |         | $    | 7,170   |        |        | $  | 11,442  |       
|Adjustments to reconcile (loss) income from continuing
operations to net cash provided by operating activities: |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|                                                                                                                | Depreciation                                        |                                                                                  |         | 17,443                  |         |      |         | 17,060 |        |    |         | 15,022 |        
|                                                                                                                | Amortization                                        |                                                                                  |         | 1,566                   |         |      |         | 1,356  |        |    |         | 3,657  |        
|                                                                                                                | Deferred income taxes                               |                                                                                  |         | (12,541                 | )       |      |         | (937   | )      |    |         | (1,635 | )      
|                                                                                                                | Non-cash portion of restructuring and other charges |                                                                                  |         | 12,016                  |         |      |         |       |        |    |         | 1,531  |        
|                                                                                                                | Goodwill impairment                                 |                                                                                  |         | 23,153                  |         |      |         |       |        |    |         |       |        
|                                                                                                                | Gain on retirement of senior notes                  |                                                                                  |         |                        |         |      |         | (1,349 | )      |    |         |       |        
|                                                                                                                | Other non-cash items                                |                                                                                  |         | 366                     |         |      |         | 627    |        |    |         | 140    |        
|                                                                                                                | Changes in operating assets and liabilities:        |                                                                                  |         |                         |         |      |         |        |        |    |         |        |        
|                                                                                                                |                                                     | Accounts receivable, net                                                         |         |                         | (17,202 | )    |         |        | 797    |    |         |        | 15,873  |  
|                                                                                                                |                                                     | Inventories                                                                      |         |                         | (8,751  | )    |         |        | 10,564 |    |         |        | (9,956  | )
|                                                                                                                |                                                     | Refundable income taxes                                                          |         |                         | 9,077   |      |         |        | (15    | )  |         |        | 8,530   |  
|                                                                                                                |                                                     | Prepaid expenses and other                                                       |         |                         | (1,200  | )    |         |        | (2,078 | )  |         |        | (368    | )
|                                                                                                                |                                                     | Accounts payable                                                                 |         |                         | 4,334   |      |         |        | (702   | )  |         |        | (16,291 | )
|                                                                                                                |                                                     | Accrued liabilities, including pension,
postretirement benefit and environmental |         |                         | 10,972  |      |         |        | 8,943  |    |         |        | (1,298  | )
|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Net cash provided by operating activities                                                                       |                                                     |                                                                                  | 249     |                         |         |      | 41,436  |        |        |    | 26,647  |       
|Investing Activities                                                                                            |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Additions to property, plant and equipment                                                                      |                                                     |                                                                                  | (5,969  | )                       |         |      | (7,747  | )      |        |    | (27,612 | )     
|Investment in rabbi trust                                                                                       |                                                     |                                                                                  | (4,289  | )                       |         |      |        |        |        |    |        |       
|Other                                                                                                           |                                                     |                                                                                  | 12      |                         |         |      |        |        |        |    | (1,601  | )     
|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Net cash used for investing activities                                                                          |                                                     |                                                                                  | (10,246 | )                       |         |      | (7,747  | )      |        |    | (29,213 | )     
|Financing Activities                                                                                            |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Net decrease in note payable                                                                                    |                                                     |                                                                                  |        |                         |         |      |        |        |        |    | (320    | )     
|Financing fees and expenses paid                                                                                |                                                     |                                                                                  | (52     | )                       |         |      | (8,687  | )      |        |    |        |       
|Net (repayment) borrowing from revolving credit facilities                                                      |                                                     |                                                                                  | (1,122  | )                       |         |      | (98,372 | )      |        |    | 16,724  |       
|Proceeds from issuance of senior notes                                                                          |                                                     |                                                                                  |        |                         |         |      | 118,546 |        |        |    |        |       
|Retirement of senior notes                                                                                      |                                                     |                                                                                  |        |                         |         |      | (13,901 | )      |        |    |        |       
|Principal borrowing on long-term debt                                                                           |                                                     |                                                                                  |        |                         |         |      | 2,021   |        |        |    |        |       
|Issuance of common stock                                                                                        |                                                     |                                                                                  |        |                         |         |      | 89      |        |        |    | 130     |       
|Redemption of preferred stock                                                                                   |                                                     |                                                                                  |        |                         |         |      | (1,000  | )      |        |    |        |       
|Dividends paid on preferred stock                                                                               |                                                     |                                                                                  |        |                         |         |      | (58     | )      |        |    | (280    | )     
|Other financing activities                                                                                      |                                                     |                                                                                  | (6      | )                       |         |      |        |        |        |    |        |       
|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Net cash (used for) provided by financing activities                                                            |                                                     |                                                                                  | (1,180  | )                       |         |      | (1,362  | )      |        |    | 16,254  |       
|Effect of exchange rate on cash and equivalents                                                                 |                                                     |                                                                                  | 2,645   |                         |         |      | 874     |        |        |    | (1,139  | )     
|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Net cash (used for) provided by continuing operations                                                           |                                                     |                                                                                  | (8,532  | )                       |         |      | 33,201  |        |        |    | 12,549  |       
|Net cash provided by (used for) discontinued operations                                                         |                                                     |                                                                                  | 701     |                         |         |      | (2,020  | )      |        |    | (13,268 | )     
|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Net (decrease) increase in cash and equivalents                                                                 |                                                     |                                                                                  | (7,831  | )                       |         |      | 31,181  |        |        |    | (719    | )     
|Cash and equivalents at beginning of year                                                                       |                                                     |                                                                                  | 53,920  |                         |         |      | 22,739  |        |        |    | 23,458  |       
|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Cash and equivalents at end of year                                                                             |                                                     | $                                                                                | 46,089  |                         |         | $    | 53,920  |        |        | $  | 22,739  |       
|                                                                                                                |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Supplemental disclosure of cash flow:                                                                           |                                                     |                                                                                  |         |                         |         |      |         |        |        |    |         |       
|Interest paid                                                                                                   |                                                     | $                                                                                | 22,510  |                         |         | $    | 19,074  |        |        | $  | 15,500  |       
|Income taxes refunded, net                                                                                      |                                                     | ($                                                                               | 9,012   | )                       |         | ($   | 7,359   | )      |        | ($ | 2,331   | )     

See accompanying notes.

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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 manufacture and distribute 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 tubular products with
superior heat transfer capabilities used in engineered applications. 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 do not
require collateral. Revenues are recorded net of estimated returns and
allowances and volume discounts. The reserve for returns and allowances and
volume discounts is calculated as a percentage of sales based on historical
return and volume discount percentages.

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.

Allowance for Doubtful Accounts

We recognize an allowance for doubtful accounts to ensure that our trade
receivables are not overstated due to collectibility. Bad debt reserves are
maintained for our customers based on a variety of factors, including length of
time receivables are past due, macroeconomic conditions, significant one-time
events and historical experience. Specific reserves for individual accounts
are recorded when we become aware of a customers inability to meet its
financial obligations, such as in the case of bankruptcy filings or
deterioration in the customers operating results or

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financial position. As circumstances related to customers change, estimates of
the recoverability of receivables are adjusted.

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 to determine cost 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.

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 years 
|Software                  |  | 3-5 years 
|Tooling                   |  | 3-10 years
|Building and improvements |  | 3-39 years
|Machinery and equipment   |  | 5-30 years

We capitalize all long-lived assets with a useful life greater than one year,
whose productive capacity has physical substance and provides future benefits
that are easily measurable.

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

Deferred charges includes debt issuance cost, patents and an intangible pension
asset. Debt issuance costs are deferred and amortized over the terms of the
debt to which they relate using

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the interest method. At December 31, 2003, we had $7.5 million of debt
issuance costs, net of $3.2 million of accumulated amortization.

Goodwill

We evaluate goodwill utilizing Statement of Financial Accounting Standards
(SFAS) No. 142, Goodwill and Other Intangible Assets. Under this statement
goodwill is presumed to have an indefinite useful life and thus is not
amortized, but tested at least annually for impairment using a lower of cost or
fair value approach. We amortized goodwill through 2001 and ceased amortizing
goodwill at the beginning of 2002, as required by SFAS No. 142. 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. 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.

During the third quarter of 2003, we conducted the required annual goodwill
impairment review. Updated valuations for each reporting unit were computed
using a discounted cash flow approach based on forward-looking information
regarding market share, revenues and costs. Our valuation was based on a 3% to
5% long-term growth rate, a discount rate of 14% and two reporting units, The
Tube Group and The Fabricated Products Group. The Tube Group consists of our
Decatur, Shawnee, Jackson, Booneville, Montreal, London, Shanghai and Esposende
facilities for which we had $23.2 million of goodwill. The Fabricated Products
Group consists of our Altoona, Carrollton, Warwick, Ardmore and Apeldoorn
facilities for which we have $77.2 million of goodwill.

Based on the results of this review, the fair value of The Tube Group reporting
unit was less than its carrying value and we recorded a goodwill impairment
charge of $23.2 million in the third quarter of 2003. The fair value of The
Tube Group reporting unit decreased significantly from the value derived when
we tested for impairment in 2002 due to a decrease in the long-term growth rate
from 4% to 3%, a reduction in our projections of future profitability and an
increase in the discount rate from 12% to 14%.

The fair value of The Fabricated Products Group reporting unit exceeded its
carrying value assuming a 5% growth rate, 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
assumptions change in the future, we may be required to record impairment
charges for The Fabricated Products Group goodwill in the future.

At December 31, 2003, we had $77.2 million of goodwill, net of $10.6 million of
accumulated amortization.

Investments

We hold a portfolio of marketable debt securities in a Rabbi Trust to partially
fund benefit obligations to certain executives under our Supplemental Executive
Retirement Plan. We mark these securities to market through income. Realized
and unrealized gains and losses on these securities, which are designated as
trading assets, have not been significant.

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Earnings (Loss) Per Common Share

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

Derivatives and Hedging Activities

We utilize derivative financial instruments to manage risk exposure to
movements in interest rates, commodity prices and foreign currency exchange
rates. We do not hold or issue derivative financial instruments for trading or
speculative purposes. We designate some of our 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 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 derivatives that are designated
as cash flow hedges are 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.
All derivative transactions are designated and treated as hedge transactions
for income tax purposes.

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.

Investments:Assets held in our Rabbi Trust are marked to market each period
based on quoted market prices.

Revolving credit facility and long-term debt: 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.

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

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

|                                               |  |                |          |            |  |                |          |            |  |   |          |   |  |   |          |  
|---------------------------------------------- |  | -------------- | -------- | ---------- |  | -------------- | -------- | ---------- |  | - | -------- | - |  | - | -------- | -
|Assets (liabilities)                           |  | 2003           |          | 2003       |  | 2002           |          | 2002      
|                                               |  | Carrying value |          | Fair value |  | Carrying value |          | Fair value
|(In thousands)                                 |  |                |          |            |  |                |          |           
|Investments in Rabbi Trust (trading portfolio) |  | $              | 4,289    |            |  | $              | 4,289    |            |  | $ |         |   |  | $ |         |  
|Senior notes                                   |  |                | (253,549 | )          |  |                | (246,900 | )          |  |   | (253,317 | ) |  |   | (246,200 | )
|Other debt                                     |  |                | (2,679   | )          |  |                | (2,679   | )          |  |   | (3,239   | ) |  |   | (3,239   | )
|Interest rate swap                             |  |                | (442     | )          |  |                | (442     | )          |  |   | 373      |   |  |   | 373      |  
|Foreign currency exchange contracts            |  |                | 5        |            |  |                | 5        |            |  |   | (80      | ) |  |   | (80      | )
|Commodity forward contracts                    |  |                | (1,286   | )          |  |                | (1,286   | )          |  |   | 416      |   |  |   | 416      |  

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, 2003, 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.

The following table illustrates the effect on 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 our stock option
compensation plans:

|                                                                                                                                            |                       |   |         |       |      |   |        |      |  |   |         |       |  
|------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | - | ------- | ----- | ---- | - | ------ | ---- |  | - | ------- | ----- | -
|                                                                                                                                            |                       |   | 2003    |       | 2002 |   | 2001  
|                                                                                                                                            |                       |   |         |       |      |   |       
|(In thousands, except per share amounts)                                                                                                    |                       |   |         |       |      |   |        |      |  |   |         |      
|Net (loss) income applicable to
common shares, as reported                                                                                  |                       | $ | (40,621 | )     |      | $ | 5,502  |      |  | $ | (20,078 | )    
|Deduct: Total stock-based
employee compensation expense
determined under fair value
based method for all awards,
net of related tax effects |                       |   | (825    | )     |      |   | (2,246 | )    |  |   | (2,833  | )    
|                                                                                                                                            |                       |   |         |       |      |   |        |      |  |   |         |      
|Pro forma net (loss) income
applicable to common shares                                                                                     |                       | $ | (41,446 | )     |      | $ | 3,256  |      |  | $ | (22,911 | )    
|                                                                                                                                            |                       |   |         |       |      |   |        |      |  |   |         |      
|(Loss) earnings per share:                                                                                                                  |                       |   |         |       |      |   |        |      |  |   |         |      
|                                                                                                                                            | Basic  as reported   |   | $       | (3.31 | )    |   | $      | 0.45 |  |   | $       | (1.66 | )
|                                                                                                                                            | Basic  pro forma     |   | $       | (3.38 | )    |   | $      | 0.27 |  |   | $       | (1.90 | )
|                                                                                                                                            | Diluted  as reported |   | $       | (3.31 | )    |   | $      | 0.45 |  |   | $       | (1.63 | )
|                                                                                                                                            | Diluted  pro forma   |   | $       | (3.38 | )    |   | $      | 0.27 |  |   | $       | (1.89 | )

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The weighted average fair value of options granted during 2003 estimated on the
date of grant using the Black-Scholes pricing model was $1.94. The fair value
for these options was estimated at the date of grant using the following
weighted average assumptions for 2003, 2002 and 2001, respectively: risk free
interest rates of 2.98%, 3.67% and 4.41%, volatility factors of the expected
market price of our Common Stock of 0.432, 0.385 and 0.352; and a weighted
average expected life of the option of 5.9, 5.6 and 7.0 years. 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

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. Revenues and
expenses 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
were $0.2 million in 2003, netted to zero in 2002, and were ($0.5) million in
2001.

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 $2.9 million in
2003, $3.1 million in 2002 and $3.7 million in 2001.

Recent Accounting Pronouncements

In January 2003, Financial Accounting Standards Board Interpretation No. 46,
Consolidation of Variable Interest Entities, was issued requiring
consolidation of variable interest entities (VIEs) by enterprises that are
subject to a majority of the risk of loss from the variable interest entitys
activities, or entitled to receive a majority of the entitys residual returns,
or both. We have evaluated the provisions of this interpretation and have
concluded that we have no interests in VIEs or potential VIEs and that the
interpretation will have no effect on our consolidated financial statements.

2.     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. 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 are reported net of tax effects in discontinued
operations. 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 the fourth quarters of 2003 and 2002,
we recorded a $2.4 million ($1.6 million after tax) and a $2.5 million ($1.6
million after

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tax) loss from discontinued operations, respectively, for remaining estimated
closing costs in excess of the provision for losses recorded in the fourth
quarter of 2001.

Operating results of the discontinued WRI operations for 2003, 2002 and 2001
are as follows:

|                               |  |      |        |      |  |      |        |   |  |   |         |  
|------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------- | -
|                               |  | 2003 |        | 2002 |  | 2001
|                               |  |      |        |      |  |     
|(In thousands)                 |  |      |        |      |  |      |        |   |  |   |         |  
|Net sales                      |  | $    |       |      |  | $    | 12,063 |   |  | $ | 48,886  |  
|Loss before income tax benefit |  | $    | (2,406 | )    |  | $    | (2,546 | ) |  | $ | (11,882 | )
|Income tax benefit             |  |      | (769   | )    |  |      | (936   | ) |  |   | (4,507  | )
|                               |  |      |        |      |  |      |        |   |  |   |         |  
|Net loss                       |  | $    | (1,637 | )    |  | $    | (1,610 | ) |  | $ | (7,375  | )
|                               |  |      |        |      |  |      |        |   |  |   |         |  

Assets and liabilities of the discontinued WRI operations have been reflected
in the consolidated balance sheets as current or non-current based on our
expectation of the timing of realization or settlement. Property, plant and
equipment of the WRI operations (net of valuation allowances of $12.4 million
and $8.8 million in 2003 and 2002, respectively) are 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.

Net liabilities of the discontinued WRI operations are as follows:

|                                           |  |                   |        |                   |  |   |        |  
|------------------------------------------ |  | ----------------- | ------ | ----------------- |  | - | ------ | -
|                                           |  | December 31, 2003 |        | December 31, 2002
|                                           |  |                   |        |                  
|(In thousands)                             |  |                   |        |                   |  |   |        |  
|Assets held for sale                       |  |                   | 1,697  |                   |  |   | 3,363  |  
|Other assets                               |  |                   | 26     |                   |  |   | 1,168  |  
|Current liabilities                        |  |                   | (1,185 | )                 |  |   | (2,085 | )
|Other liabilities                          |  |                   | (1,096 | )                 |  |   | (897   | )
|                                           |  |                   |        |                   |  |   |        |  
|Net liabilities of discontinued operations |  | $                 | (558   | )                 |  | $ | (1,549 | )
|                                           |  |                   |        |                   |  |   |        |  

We anticipate finalizing the sale of the remaining equipment from the WRI
operations by April 2004 and are currently negotiating for the sale or lease of
the building. We anticipate that the remaining liabilities of $2.3 million
will be settled during 2004. 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:

|                  |  |      |         |      |  |   |        | 
|----------------- |  | ---- | ------- | ---- |  | - | ------ | 
|                  |  | 2003 |         | 2002
|                  |  |      |         |     
|(In thousands)    |  |      |         |      |  |   |        | 
|Finished products |  | $    | 34,082  |      |  | $ | 23,617 | 
|Work-in-process   |  |      | 27,484  |      |  |   | 15,862 | 
|Raw materials     |  |      | 17,083  |      |  |   | 14,894 | 
|Supplies          |  |      | 29,356  |      |  |   | 31,112 | 
|                  |  |      |         |      |  |   |        | 
|Totals            |  | $    | 108,005 |      |  | $ | 85,485 | 
|                  |  |      |         |      |  |   |        | 

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At December 31, 2003, we had approximately $9.1 million of silver inventory as
follows: $2.5 million raw materials; $2.9 million work-in-process; and $3.7
million finished products. This inventory, which was accounted for as an
off-balance sheet consignment arrangement at December 31, 2002, is procured
under an ongoing precious metal arrangement.

4. Prepaid Expenses and Other

Prepaid expenses and other are as follows at December 31:

|                                                             |  |      |        |      |  |   |       | 
|------------------------------------------------------------ |  | ---- | ------ | ---- |  | - | ----- | 
|                                                             |  | 2003 |        | 2002
|                                                             |  |      |        |     
|(In thousands)                                               |  |      |        |      |  |   |       | 
|Prepaid expenses                                             |  | $    | 4,345  |      |  | $ | 4,556 | 
|Deferred tax assets                                          |  |      | 5,581  |      |  |   | 2,886 | 
|Other assets recording
the fair value of hedging
instruments |  |      | 2,856  |      |  |   | 613   | 
|                                                             |  |      |        |      |  |   |       | 
|Totals                                                       |  | $    | 12,782 |      |  | $ | 8,055 | 
|                                                             |  |      |        |      |  |   |       | 

5. Derivatives

We have entered into commodity forward contracts through December 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 $3.4 million at December 31,
2003 and a fair value of $0.8 million. In comparison, at December 31, 2002, we
had entered into commodity forward contracts through March 2004 that were
designated as fair value hedging instruments and had a notional amount of $12.4
million and a fair value of $(0.2) million. For the twelve months ended
December 31, 2003 and 2002, an insignificant impact to cost of goods sold was
recorded for the ineffective portion of these derivative instruments.

We have entered into commodity forward contracts through December 2004 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 $17.2 million at December 31, 2003. At December 31,
2003, we recorded the fair value of these forward contracts of $2.3 million in
other assets and the net of tax amount ($1.5 million) in accumulated other
comprehensive income. We expect that $2.3 million ($1.5 million, net of tax)
of the unrealized gain 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, 2002, we had entered into
$20.9 million notional amount of commodity forward contracts through December
2003 that were designated as cash flow hedging instruments. At December 31,
2002, we recorded the fair value of these forward contracts of $(0.5) million
in accrued liabilities and the net of tax amount ($0.3 million) in accumulated
other comprehensive loss. For the twelve months ended December 31, 2003 and
2002, no portion of the change in fair value of these future contracts was
ineffective.

We also have entered into commodity forward contracts through February 2004 to
reduce the risk of price decreases with respect to firm-price purchase
commitments. The notional amount of these forward contracts, which were
designated as fair value hedging instruments, was $5.5

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million at December 31, 2003 and the fair value of these contracts was $(0.5).
For the twelve months ended December 31, 2003, there was no ineffective portion
of the change in fair value of these future contracts.

At December 31, 2003 we had commodity forward contracts to sell copper in March
2004 with a notional value of $32.7 million. In 2002 we entered into commodity
forward contracts to sell copper in March 2003 with a notional value of $18.1
million and in December 2003 with a notional value of $7.5 million. We entered
these forward contracts in order to mitigate the potential impact of
fluctuating copper prices on our inventory. These forward contracts were not
designated as 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, 2003, we
recorded the fair value of these forward contracts of $3.8 million ($2.5
million, net of tax) in accrued liabilities and cost of sales. 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 cost of sales.

At December 31, 2003, we had commodity futures to purchase natural gas for the
period of February 2004 through December 2004 with a notional value of $6.0
million. 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, 2003 or 2002. At
December 31, 2003 and 2002, we recorded the fair value of these instruments of
$0.3 million ($0.2 million, net of tax) and $0.1 million ($0.1 million, net of
tax), respectively, in other assets and as accumulated other comprehensive
income.

At December 31, 2003, we had forward exchange contracts outstanding to purchase
foreign currency with a notional value of $11.4 million and to sell foreign
currency with a notional value of $0.9 million. 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. 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,
2003 and December 31, 2002 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 as 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. As of December 31, 2003, we recorded
the fair market value of the interest rate swap of $0.4 million in accrued
liabilities (Note 9) with a corresponding decrease to the hedged debt, with
equal and offsetting unrealized gains and losses included in other income
(expense), net. 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

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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 reduced interest expense in 2003 and 2002 by $1.1 million and $0.3
million, respectively.

6. Assets Held for Sale

Assets held for sale at December 31, 2003 and 2002 include our unoccupied
Roxboro, North Carolina facility and our WRI property in Fergus, Ontario both
of which have been written down to their estimated fair values less cost to
sell ($4.8 million) at December 31, 2003. During 2003, we lowered our
estimates of the net realizable value of these assets by $3.9 million in
consideration of recent market conditions and new appraisals. Approximately
$2.3 million of the 2003 write-down is included in the restructuring charge
(see Note 21) and the remainder is classified in discontinued operations (see
Note 2). 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
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:

|                              |  |      |          |      |  |   |          |  
|----------------------------- |  | ---- | -------- | ---- |  | - | -------- | -
|                              |  | 2003 |          | 2002
|                              |  |      |          |     
|(In thousands)                |  |      |          |      |  |   |          |  
|Land and improvements         |  | $    | 13,806   |      |  | $ | 12,581   |  
|Building and improvements     |  |      | 53,160   |      |  |   | 50,942   |  
|Machinery and equipment       |  |      | 280,465  |      |  |   | 273,346  |  
|Construction-in-progress      |  |      | 4,276    |      |  |   | 3,207    |  
|                              |  |      |          |      |  |   |          |  
|                              |  |      | 351,707  |      |  |   | 340,076  |  
|Less accumulated depreciation |  |      | (153,165 | )    |  |   | (131,077 | )
|                              |  |      |          |      |  |   |          |  
|Totals                        |  | $    | 198,542  |      |  | $ | 208,999  |  
|                              |  |      |          |      |  |   |          |  

8. Deferred Charges

Deferred charges are as follows at December 31:

|                                             |  |      |        |      |  |   |        |  
|-------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                             |  | 2003 |        | 2002
|                                             |  |      |        |     
|(In thousands)                               |  |      |        |      |  |   |        |  
|Deferred debt issuance cost                  |  | $    | 10,668 |      |  | $ | 10,616 |  
|Patents and other                            |  |      | 2,444  |      |  |   | 3,800  |  
|Unrecognized prior service cost for pensions |  |      | 5,121  |      |  |   | 3,250  |  
|                                             |  |      |        |      |  |   |        |  
|                                             |  |      | 18,233 |      |  |   | 17,666 |  
|Less accumulated amortization                |  |      | (3,463 | )    |  |   | (3,855 | )
|                                             |  |      |        |      |  |   |        |  
|Totals                                       |  | $    | 14,770 |      |  | $ | 13,811 |  
|                                             |  |      |        |      |  |   |        |  

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Deferred charges other than unrecognized prior service cost for pensions are
subject to amortization. Net deferred debt issuance cost of $7.5 million will
be amortized over a weighted average remaining life of 5.2 years resulting in
$1.4 million of amortization expense in each of the next five succeeding years
beginning in 2004. In 2003, 2002 and 2001, we recorded $1.4 million, $1.4
million and $0.6 million of amortization expense related to deferred charges.

9. Accrued Liabilities

Accrued liabilities are as follows at December 31:

|                                              |  |      |        |      |  |   |        |  
|--------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                              |  | 2003 |        | 2002
|                                              |  |      |        |     
|(In thousands)                                |  |      |        |      |  |   |        |  
|Interest                                      |  | $    | 6,953  |      |  | $ | 7,232  |  
|Income taxes                                  |  |      | 2,842  |      |  |   |       |  
|Reserve for restructuring                     |  |      | 4,235  |      |  |   |       |  
|Fair value of derivative liabilities (Note 5) |  |      | 4,285  |      |  |   | (150   | )
|Other                                         |  |      | 11,472 |      |  |   | 12,211 |  
|                                              |  |      |        |      |  |   |        |  
|Totals                                        |  | $    | 29,787 |      |  | $ | 19,293 |  
|                                              |  |      |        |      |  |   |        |  

10. Financing Arrangements and Debt

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

|                                                                                 |  |      |         |      |  |   |         |  
|-------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                                                 |  | 2003 |         | 2002
|                                                                                 |  |      |         |     
|(In thousands)                                                                   |  |      |         |      |  |   |         |  
|Senior Notes, 10.5%, due April 2009                                              |  | $    | 118,000 |      |  | $ | 118,000 |  
|Discount on 10.5% Senior Notes, original issue
discount amortized over 7 years   |  |      | (1,069  | )    |  |   | (1,272  | )
|Senior Notes, 7.375%, due August 2008                                            |  |      | 136,308 |      |  |   | 137,123 |  
|Discount on 7.375% Senior Notes, original issue
discount amortized over 10 years |  |      | (132    | )    |  |   | (161    | )
|Netherlands facility, 5.13%, due on demand                                       |  |      | 1,201   |      |  |   | 1,205   |  
|Other foreign facilities                                                         |  |      | 1,478   |      |  |   | 2,034   |  
|                                                                                 |  |      |         |      |  |   |         |  
|                                                                                 |  |      | 255,786 |      |  |   | 256,929 |  
|Less short-term borrowings                                                       |  |      | (1,502  | )    |  |   | (1,217  | )
|                                                                                 |  |      |         |      |  |   |         |  
|Totals                                                                           |  | $    | 254,284 |      |  | $ | 255,712 |  
|                                                                                 |  |      |         |      |  |   |         |  

Aggregate maturities of long-term debt are as follows:

|               |  |   |         | 
|-------------- |  | - | ------- | 
|(In thousands)
|2004           |  | $ | 1,502   | 
|2005           |  |   | 294     | 
|2006           |  |   | 294     | 
|2007           |  |   | 294     | 
|2008           |  |   | 136,470 | 
|2009           |  |   | 116,932 | 
|               |  |   |         | 
|Totals         |  | $ | 255,786 | 
|               |  |   |         | 

On March 27, 2002, we obtained new financing agreements to replace our
revolving credit facility which was scheduled to mature on April 30, 2002. We
issued $120 million in principal

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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 Wachovia 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:

|                             |  |            |         |  
|---------------------------- |  | ---------- | ------- | -
|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 secured revolving credit facility concurrently with the
closing of the 10.5% Senior Notes offering. The secured 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
secured revolving credit facility provides for interest at the Eurodollar rate
plus 2.5% or the U.S. base rate plus 1% and matures on March 27, 2005.
Commitment fees on the unused available portion of the facility are 0.5%.

As of December 31, 2003 and December 31, 2002, we had no outstanding borrowings
under our secured revolving credit facility. As of December 31, 2003, we had
approximately $7.9 million of standby letters of credit outstanding that are
collateralized with the secured revolving credit facility and approximately
$29.2 million (subject to a $2 million excess availability requirement) in
additional borrowing availability thereunder. As of December 31, 2002, we had
approximately $5.6 million of standby letters of credit outstanding that were
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 third quarter of 2003, we and our lenders executed an amendment to the
secured revolving credit facility to change the minimum fixed charge coverage
ratio for the third and fourth quarters of 2003 from 1.10 to 1.05 and the
minimum consolidated EBITDA requirement on a rolling four-quarter basis for the
third and fourth quarters of 2003 from $40.0 million and $42.0 million
respectively, to $27.0 million for each quarter. The minimum fixed charge
coverage ratio for each quarter of 2004 of 1.10 and the minimum consolidated
EBITDA requirement on a rolling four-quarter basis for each quarter of 2004 of
$55.0 million remains unchanged.

Our financial performance in the fourth quarter of 2003 prevented us from
satisfying the terms of the amendment to the secured revolving credit facility
that we executed in the third quarter of 2003. On February 19, 2004, we and
our lenders executed a waiver to the secured revolving credit facility to waive
compliance with the minimum consolidated EBITDA requirement and the

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minimum fixed charge coverage ratio for the quarter ended December 31, 2003.
The financial covenants of our secured revolving credit facility for 2004 have
not been amended. Although we cannot make any assurances that our lenders will
agree to any modifications to our covenants in the future, we anticipate
remedying any potential financial covenant violations in 2004 by extending and
amending the secured revolving credit facility.

At December 31, 2003, we had outstanding $136.8 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 Wachovia
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 limits our ability to incur indebtedness secured by certain liens and to
engage in sale/leaseback transactions.

Our financing agreements also contain covenants that among other things,
require us to maintain certain financial ratios and place other restrictions
and limitations on us, including restrictions on our payment of dividends,
limitations on the issuance of additional debt and limitations on investments,
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. At December 31, 2003
and 2002, we had outstanding borrowings of $1.2 million under this facility.

In 2002, we obtained an interest free loan from the Portuguese Government in
the amount of 1.9 million euros. Based on the performance of our Portugal
facility and the terms of the loan, we anticipate that the Portuguese
Government will forgive 40% of the loan, or 0.7 million euros. Accordingly, we
classified 0.7 million euros of the loan as deferred income in 2003. The loan
balance at December 31, 2003 is 1.2 million euros which equates to $1.5 million
U.S. dollars. The loan provides for annual repayment beginning in June 2004
of $0.3 million (based on current exchange rates). The loan matures in July
2008.

Interest expense is net of interest income and capitalized interest of $0.6
million and $0.1 million in 2003, $0.5 million and $0.7 million in 2002 and
$0.6 million and $1.1 million in 2001. Interest expense is also net of
interest income from loans to the discontinued operations of WRI of $0.8
million in 2002 and $1.3 million in 2001.

In October 2002, we completed an interest rate swap on $50.0 million notional
amount of our 7.375% Senior Notes. The interest rate swap resulted in a
reduction to interest expense in 2003 and 2002 of $1.1 million and $0.3
million, respectively.

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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.

The weighted average asset allocations for our U.S. Retirement Plan at December
31, 2003 and 2002 are as follows:

|                     |  |      |     |      |  |  |     |  
|-------------------- |  | ---- | --- | ---- |  |  | --- | -
|                     |  | 2003 |     | 2002
|                     |  |      |     |     
|Equity securities    |  |      | 58  | %    |  |  | 51  | %
|Debt securities      |  |      | 40  |      |  |  | 44  |  
|Cash and equivalents |  |      | 2   |      |  |  | 5   |  
|                     |  |      |     |      |  |  |     |  
|Total                |  |      | 100 | %    |  |  | 100 | %
|                     |  |      |     |      |  |  |     |  

The investment policy of our U.S. Retirement Plan states that investments in
assets should be in accordance with the maximum and minimum ranges for each
asset category as follows:

|                     |  |         |    |         |  |  |    |  
|-------------------- |  | ------- | -- | ------- |  |  | -- | -
|                     |  | Minimum |    | Maximum
|                     |  |         |    |        
|Equity securities    |  |         | 30 | %       |  |  | 60 | %
|Debt securities      |  |         | 40 |         |  |  | 70 |  
|Cash and equivalents |  |         | 0  |         |  |  | 30 |  

The investment policy of our U.S. Retirement Plan states that all assets
selected for the portfolio must have a readily ascertainable market value and
must be readily marketable. The policy expressly prohibits certain types of
assets or transactions including commodities, futures, foreign securities
(other than those listed on the New York Stock Exchange), private placements,
warrants, purchasing of securities on margin, selling short, options,
derivatives, interest rate swaps, limited partnerships and real estate.

The investment policy of our U.S. Retirement Plan states that investments in
equity securities must be of good quality and diversified so as to avoid undue
exposure to any single economic sector, industry or group or individual
security. The policy states that investments in debt securities should be
rated A or better, allowing debt securities with a rating of BBB as long as
the total amount rated BBB does not exceed 10% of the debt securities
portfolio at the time of purchase and as long as the debt securities portfolio
maintains an overall rating of at least A. The investment policy limits the
debt securities of any one issuer, excluding investments in U.S. Government
guaranteed obligations, and states that no debt securities should have a
maturity of longer than thirty years at the time of purchase.

On December 31, 2003, 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 the result of changing our discount rate
assumption to 6.25% in 2003 from 7.0% in 2002. As a result and in accordance
with SFAS No. 87, we have an additional minimum pension liability of $17.7
million, reflected as an accumulated other comprehensive loss of $16.8 million
and an intangible asset of $0.9 million which is included in net deferred
charges equal to the amount of

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unrecognized prior service cost. The amount charged to accumulated other
comprehensive loss before tax during 2003 arising from the change in the
additional minimum pension liability was $0.3 million, which decreased
stockholders equity. The $17.7 million additional minimum pension liability
reflects a reduction in prepaid pension assets of $5.5 million and a $12.2
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 $6.6 million.

The accumulated benefit obligation at December 31, 2003 and 2002 was $140.0
million and $122.7 million, respectively. The amounts recognized in the
Consolidated Balance Sheets before taxes are as follows:

|                                     |  |      |         |      |  |   |        |  
|------------------------------------ |  | ---- | ------- | ---- |  | - | ------ | -
|                                     |  | 2003 |         | 2002
|                                     |  |      |         |     
|(In thousands)                       |  |      |         |      |  |   |        |  
|Prepaid benefit cost                 |  | $    |        |      |  | $ |       |  
|Accrued benefit liability            |  |      | (12,264 | )    |  |   | (7,843 | )
|Intangible asset                     |  |      | 885     |      |  |   | 1,123  |  
|Accumulated other comprehensive loss |  |      | 16,845  |      |  |   | 16,582 |  
|                                     |  |      |         |      |  |   |        |  
|Net amount recognized                |  | $    | 5,466   |      |  | $ | 9,862  |  
|                                     |  |      |         |      |  |   |        |  

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

|                                 |  |      |      |      |  |  |      |  
|-------------------------------- |  | ---- | ---- | ---- |  |  | ---- | -
|                                 |  | 2003 |      | 2002
|                                 |  |      |      |     
|Discount rate                    |  |      | 6.25 | %    |  |  | 7.00 | %
|Rate of increase in compensation |  |      | 3.5  |      |  |  | 3.5  |  

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:

|                                   |  |      |         |      |  |      |         |   |  |   |         |  
|---------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                   |  | 2003 |         | 2002 |  | 2001
|                                   |  |      |         |      |  |     
|(In thousands)                     |  |      |         |      |  |      |         |   |  |   |         |  
|Service cost                       |  | $    | 3,963   |      |  | $    | 3,991   |   |  | $ | 3,859   |  
|Interest cost                      |  |      | 9,145   |      |  |      | 9,087   |   |  |   | 9,045   |  
|Expected return on plan assets     |  |      | (10,052 | )    |  |      | (11,835 | ) |  |   | (12,613 | )
|Amortization of prior service cost |  |      | 137     |      |  |      | 136     |   |  |   | 134     |  
|Amortization of net actuarial loss |  |      | 1,102   |      |  |      |        |   |  |   |        |  
|Effect of curtailment              |  |      | 102     |      |  |      |        |   |  |   |        |  
|                                   |  |      |         |      |  |      |         |   |  |   |         |  
|Net periodic pension cost          |  | $    | 4,397   |      |  | $    | 1,379   |   |  | $ | 425     |  
|                                   |  |      |         |      |  |      |         |   |  |   |         |  

The amortization of our net actuarial loss in 2003 of $1.1 million is the
amortization of total unrecognized losses as of January 1, 2003 that exceeds
10% of our projected benefit obligation, approximately $13.4 million, and is
being amortized over the expected average remaining years of service of the
plan participants which is thirteen years.

Certain assumptions utilized in determining the net periodic benefit cost for
the years ended December 31 are as follows:

|                                                 |  |      |      |      |  |      |      |   |  |  |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                 |  | 2003 |      | 2002 |  | 2001
|                                                 |  |      |      |      |  |     
|Discount rate                                    |  |      | 7.00 | %    |  |      | 7.25 | % |  |  | 7.75 | %
|Rate of increase in compensation                 |  |      | 3.5  |      |  |      | 4.0  |   |  |  | 4.0  |  
|Expected long-term rate of return on plan assets |  |      | 9.0  |      |  |      | 9.5  |   |  |  | 9.5  |  

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The expected long-term rate of return on plan assets is selected by taking into
account the expected weighted averages of the investments of the assets, the
fact that the plan assets are actively managed to mitigate downside risks, the
historical performance of the market in general and the historical performance
of the U.S. Retirement Plan assets over the past ten years. For the ten year
period ended December 31, 2003 and 2002, the U.S. Retirement Plan assets have
provided a weighted rate of return of 10.8% and 9.8%, respectively.

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

|                                                |  |      |         |      |  |   |         |  
|----------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                |  | 2003 |         | 2002
|                                                |  |      |         |     
|(In thousands)                                  |  |      |         |      |  |   |         |  
|Benefit obligation at the beginning of the year |  | $    | 132,132 |      |  | $ | 134,387 |  
|Service costs                                   |  |      | 3,962   |      |  |   | 3,991   |  
|Interest costs                                  |  |      | 9,145   |      |  |   | 9,087   |  
|Amendments                                      |  |      |        |      |  |   | 33      |  
|Actuarial loss (gain)                           |  |      | 16,180  |      |  |   | (8,526  | )
|Benefits paid                                   |  |      | (6,906  | )    |  |   | (6,840  | )
|Curtailment                                     |  |      | (1,025  | )    |  |   |        |  
|                                                |  |      |         |      |  |   |         |  
|Benefit obligation at the end of the year       |  | $    | 153,488 |      |  | $ | 132,132 |  
|                                                |  |      |         |      |  |   |         |  

The actuarial loss for the year ended December 31, 2003 results from a $1.7
million loss due to personnel experience different than assumed and a $14.5
million loss due to the change in the discount rate to 6.25% from 7.00%.

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 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 to 7.0% from
7.25%.

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

|                                                       |  |      |         |      |  |   |         |  
|------------------------------------------------------ |  | ---- | ------- | ---- |  | - | ------- | -
|                                                       |  | 2003 |         | 2002
|                                                       |  |      |         |     
|(In thousands)                                         |  |      |         |      |  |   |         |  
|Fair value of plan assets at the beginning of the year |  | $    | 114,899 |      |  | $ | 127,726 |  
|Actual return on plan assets                           |  |      | 19,775  |      |  |   | (10,987 | )
|Company contributions                                  |  |      |        |      |  |   | 5,000   |  
|Benefits paid                                          |  |      | (6,906  | )    |  |   | (6,840  | )
|                                                       |  |      |         |      |  |   |         |  
|Fair value of plan assets at the end of the year       |  | $    | 127,768 |      |  | $ | 114,899 |  
|                                                       |  |      |         |      |  |   |         |  

In 2004 and with regard to the U.S. Retirement Plan, we do not anticipate any
mandatory contribution requirements by funding regulations or laws, and we do
not anticipate making any voluntary contributions.

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

|                                   |  |      |        |      |  |    |        |  
|---------------------------------- |  | ---- | ------ | ---- |  | -- | ------ | -
|                                   |  | 2003 |        | 2002
|                                   |  |      |        |     
|(In thousands)                     |  |      |        |      |  |    |        |  
|Unfunded status                    |  | ($   | 25,720 | )    |  | ($ | 17,233 | )
|Unrecognized net actuarial loss    |  |      | 30,301 |      |  |    | 25,972 |  
|Unrecognized pension service costs |  |      | 885    |      |  |    | 1,123  |  
|                                   |  |      |        |      |  |    |        |  
|Prepaid pensions                   |  | $    | 5,466  |      |  | $  | 9,862  |  
|                                   |  |      |        |      |  |    |        |  

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.

The U.S. nonqualified pension plans use a December 31 measurement date.

On December 31, 2003, the accumulated benefit obligation for our nonqualified
pension plans of $6.3 million exceeded the plans accrued liability of $3.2
million. The plan had unrecognized prior service cost of $3.5 million and thus
an intangible asset equal to the additional minimum liability of $3.2 million
was established. The amounts recognized in the Consolidated Balance Sheets
before taxes are as follows:

|                          |  |      |        |      |  |   |        |  
|------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                          |  | 2003 |        | 2002
|                          |  |      |        |     
|(In thousands)            |  |      |        |      |  |   |        |  
|Accrued benefit liability |  | $    | (6,330 | )    |  | $ | (3,464 | )
|Intangible asset          |  |      | 3,174  |      |  |   | 1,181  |  
|                          |  |      |        |      |  |   |        |  
|Net amount recognized     |  | $    | (3,156 | )    |  | $ | (2,283 | )
|                          |  |      |        |      |  |   |        |  

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

|                                 |  |      |      |      |  |  |      |  
|-------------------------------- |  | ---- | ---- | ---- |  |  | ---- | -
|                                 |  | 2003 |      | 2002
|                                 |  |      |      |     
|Discount rate                    |  |      | 6.25 | %    |  |  | 7.00 | %
|Rate of increase in compensation |  |      | 3.5  |      |  |  | 3.5  |  

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

|                                   |  |      |     |      |  |      |     |  |  |   |     | 
|---------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                   |  | 2003 |     | 2002 |  | 2001
|                                   |  |      |     |      |  |     
|(In thousands)                     |  |      |     |      |  |      |     |  |  |   |     | 
|Service cost                       |  | $    | 152 |      |  | $    | 566 |  |  | $ | 195 | 
|Interest cost                      |  |      | 430 |      |  |      | 230 |  |  |   | 110 | 
|Amortization of prior service cost |  |      | 368 |      |  |      | 173 |  |  |   | 31  | 
|Amortization of net actuarial loss |  |      |    |      |  |      | 13  |  |  |   | 7   | 
|                                   |  |      |     |      |  |      |     |  |  |   |     | 
|Net periodic pension cost          |  | $    | 950 |      |  | $    | 982 |  |  | $ | 343 | 
|                                   |  |      |     |      |  |      |     |  |  |   |     | 

Certain assumptions utilized in determining the net periodic benefit cost for
the years ended December 31 are as follows:

|                                                 |  |      |      |      |  |      |      |   |  |  |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                 |  | 2003 |      | 2002 |  | 2001
|                                                 |  |      |      |      |  |     
|Discount rate                                    |  |      | 7.00 | %    |  |      | 7.25 | % |  |  | 7.75 | %
|Rate of increase in compensation                 |  |      | 3.5  |      |  |      | 4.0  |   |  |  | 4.0  |  
|Expected long-term rate of return on plan assets |  |      | N/A  |      |  |      | N/A  |   |  |  | N/A  |  

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

|                                                |  |      |       |      |  |   |       |  
|----------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                                                |  | 2003 |       | 2002
|                                                |  |      |       |     
|(In thousands)                                  |  |      |       |      |  |   |       |  
|Benefit obligation at the beginning of the year |  | $    | 3,899 |      |  | $ | 1,867 |  
|Service costs                                   |  |      | 152   |      |  |   | 566   |  
|Interest costs                                  |  |      | 430   |      |  |   | 230   |  
|Amendments                                      |  |      | 2,471 |      |  |   | 1,409 |  
|Actuarial loss (gain)                           |  |      | 531   |      |  |   | (99   | )
|Benefits paid                                   |  |      | (77   | )    |  |   | (74   | )
|                                                |  |      |       |      |  |   |       |  
|Benefit obligation at the end of the year       |  | $    | 7,406 |      |  | $ | 3,899 |  
|                                                |  |      |       |      |  |   |       |  

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

|                                                       |  |      |     |      |  |   |     |  
|------------------------------------------------------ |  | ---- | --- | ---- |  | - | --- | -
|                                                       |  | 2003 |     | 2002
|                                                       |  |      |     |     
|(In thousands)                                         |  |      |     |      |  |   |     |  
|Fair value of plan assets at the beginning of the year |  | $    |    |      |  | $ |    |  
|Company contributions                                  |  |      | 77  |      |  |   | 74  |  
|Benefits paid                                          |  |      | (77 | )    |  |   | (74 | )
|                                                       |  |      |     |      |  |   |     |  
|Fair value of plan assets at the end of the year       |  | $    |    |      |  | $ |    |  
|                                                       |  |      |     |      |  |   |     |  

In 2004, we anticipate contributing $80,000 to the U.S. nonqualified pension
plans, equivalent to the amount of benefits we anticipate paying.

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

|                                   |  |      |        |      |  |   |        |  
|---------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                   |  | 2003 |        | 2002
|                                   |  |      |        |     
|(In thousands)                     |  |      |        |      |  |   |        |  
|Unfunded status                    |  | $    | (7,406 | )    |  | $ | (3,899 | )
|Unrecognized net actuarial loss    |  |      | 731    |      |  |   | 200    |  
|Unrecognized pension service costs |  |      | 3,519  |      |  |   | 1,416  |  
|                                   |  |      |        |      |  |   |        |  
|Accrued benefit cost               |  | $    | (3,156 | )    |  | $ | (2,283 | )
|                                   |  |      |        |      |  |   |        |  

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 $0.4 million in
2003, $0.3 million in 2002 and $1.3 million in 2001. Beginning in September
2001 and continuing in 2003 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 $0.4 million in 2003, $0.5 million in
2002 and $0.5 million in 2001.

We have established two noncontributory defined benefit pension plans covering
substantially all our employees at the Montreal, Quebec facility. The two
plans are 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 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 Wolverine Ratcliffs Inc. Pension Plan for Operational Employees (the WRI
Plan) covering hourly employees at our Fergus, Ontario 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 estimated in our December 31, 2002 valuation the
impact of the settlement. The benefits payable under these plans were still
not settled as of December 31, 2003 but were awaiting final approval from the
legislator. The pension liability recorded for the WRI Plan is $1.1 million
and $0.9 million at December 31, 2003 and 2002, respectively.

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The weighted average asset allocation for our Salaried Plan, Canada Operational
Plan and the WRI Plan at December 31, 2003 and 2002 are as follows:

|                           |  |      |     |      |  |  |     |  
|-------------------------- |  | ---- | --- | ---- |  |  | --- | -
|                           |  | 2003 |     | 2002
|                           |  |      |     |     
|Canadian equity securities |  |      | 30  | %    |  |  | 36  | %
|Foreign equity securities  |  |      | 27  |      |  |  | 29  |  
|Debt securities            |  |      | 33  |      |  |  | 32  |  
|Cash and equivalents       |  |      | 10  |      |  |  | 3   |  
|                           |  |      |     |      |  |  |     |  
|Total                      |  |      | 100 | %    |  |  | 100 | %
|                           |  |      |     |      |  |  |     |  

The investment policy of our three Canadian plans states that investments in
assets should be in accordance with the maximum and minimum ranges for each
asset category as follows:

|                           |  |         |    |         |  |  |    |  
|-------------------------- |  | ------- | -- | ------- |  |  | -- | -
|                           |  | Minimum |    | Maximum
|                           |  |         |    |        
|Canadian equity securities |  |         | 15 | %       |  |  | 35 | %
|Foreign equity securities  |  |         | 20 |         |  |  | 30 |  
|Debt securities            |  |         | 33 |         |  |  | 53 |  
|Cash and equivalents       |  |         | 0  |         |  |  | 15 |  

The investment policy of our Canadian plans states that all assets selected for
the portfolio must have a readily ascertainable market value and must be
readily marketable. The policy expressly limits the use of certain types of
assets or transactions including commodities, futures, private placements,
warrants, purchasing of securities on margin, selling short, options,
derivatives, interest rate swaps and limited partnerships.

The investment policy of our Canadian plans states that investments in equity
securities must be of good quality and diversified so as to avoid undue
exposure to any single economic sector, industry or group or individual
security. The policy states that investments in debt securities should be
rated BBB or better. The investment policy limits the debt securities of any
one issuer, excluding investments in federal government guaranteed obligations.

On December 31, 2003, our annual measurement date, the accumulated benefit
obligation for our Salaried Plan and the Canada Operational Plan exceeded the
fair value of pension plan assets. This difference is primarily the result of
changing our discount rate assumption to 6.25% in 2003 from 6.75% in 2002. As
a result and in accordance with SFAS No. 87, we have an additional minimum
pension liability of $3.3 million, reflected as an accumulated other
comprehensive loss of $2.2 million and an intangible asset of $1.1 million
which is included in net deferred charges equal to the amount of unrecognized
prior service cost. The amount charged to accumulated other comprehensive loss
before tax during 2003 arising from the change in the additional minimum
pension liability was $0.1 million, which decreased stockholders equity. To
record the $3.3 million additional minimum pension liability, we decreased
prepaid pension assets by $0.6 million and recorded a $2.7 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.

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The accumulated benefit obligation at December 31, 2003 and 2002 for the
Salaried Plan and the Canada Operational Plan was $21.6 million and $16.4
million, respectively. The amounts recognized in the Consolidated Balance
Sheets before taxes are as follows:

|                                     |  |      |        |      |  |   |        |  
|------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                                     |  | 2003 |        | 2002
|                                     |  |      |        |     
|(In thousands)                       |  |      |        |      |  |   |        |  
|Accrued benefit liability            |  | $    | (3,722 | )    |  | $ | (3,234 | )
|Intangible asset                     |  |      | 1,062  |      |  |   | 946    |  
|Accumulated other comprehensive loss |  |      | 2,208  |      |  |   | 2,120  |  
|                                     |  |      |        |      |  |   |        |  
|Net amount recognized                |  | $    | (452   | )    |  | $ | (168   | )
|                                     |  |      |        |      |  |   |        |  

The discount rate utilized in determining the benefit obligations for the
Canadian pension plans was 6.25% and 6.75% for the years ended December 31,
2003 and 2002, respectively.

The expected rate of increase in compensation used in accounting for the
Salaried Plan was 3.0% for the years ended December 31, 2003, 2002 and 2001,
and is not applicable in accounting for the Canada Operational Plan for the
same periods.

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

|                                          |  |      |        |      |  |      |        |   |  |    |        |  
|----------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | -- | ------ | -
|                                          |  | 2003 |        | 2002 |  | 2001
|                                          |  |      |        |      |  |     
|(In thousands)                            |  |      |        |      |  |      |        |   |  |    |        |  
|Service cost                              |  | $    | 534    |      |  | $    | 486    |   |  | $  | 498    |  
|Interest cost                             |  |      | 1,281  |      |  |      | 1,257  |   |  |    | 1,240  |  
|Expected return on plan assets            |  |      | (1,164 | )    |  |      | (1,603 | ) |  |    | (1,793 | )
|Effect of settlement                      |  |      |       |      |  |      | 2,471  |   |  |    |       |  
|Amortization of prior service cost        |  |      | 87     |      |  |      | 91     |   |  |    | 73     |  
|Amortization of net actuarial loss (gain) |  |      | 107    |      |  |      | (3     | ) |  |    | (118   | )
|                                          |  |      |        |      |  |      |        |   |  |    |        |  
|Net periodic pension cost (benefit)       |  | $    | 845    |      |  | $    | 2,699  |   |  | ($ | 100    | )
|                                          |  |      |        |      |  |      |        |   |  |    |        |  

Certain assumptions utilized in determining the net periodic benefit cost for
the years ended December 31 are as follows:

|                                                 |  |      |      |      |  |      |      |   |  |  |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                 |  | 2003 |      | 2002 |  | 2001
|                                                 |  |      |      |      |  |     
|Discount rate                                    |  |      | 6.75 | %    |  |      | 7.00 | % |  |  | 7.50 | %
|Expected long-term rate of return on plan assets |  |      | 7.50 |      |  |      | 8.50 |   |  |  | 8.50 |  

The expected long-term rate of return on plan assets is selected by taking into
account the expected weighted averages of the investments of the assets, the
fact that the plan assets are actively managed to mitigate downside risks, the
historical performance of the market in general and the historical performance
of the Canadian plans assets over the past ten years. For the ten year period
ending December 31, 2003 and 2002, the Canadian plans assets have provided a
weighted average rate of return of 7.8% and 8.7%, respectively.

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

|                                                |  |      |        |      |  |   |        |  
|----------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                                |  | 2003 |        | 2002
|                                                |  |      |        |     
|(In thousands)                                  |  |      |        |      |  |   |        |  
|Benefit obligation at the beginning of the year |  | $    | 16,928 |      |  | $ | 18,465 |  
|Service costs                                   |  |      | 534    |      |  |   | 486    |  
|Interest costs                                  |  |      | 1,281  |      |  |   | 1,257  |  
|Amendments                                      |  |      |       |      |  |   | 291    |  
|Actuarial loss (gain)                           |  |      | 1,266  |      |  |   | (207   | )
|Benefits paid                                   |  |      | (1,281 | )    |  |   | (1,146 | )
|Estimated settlement of benefits                |  |      |       |      |  |   | (2,393 | )
|Foreign currency exchange rate changes          |  |      | 3,916  |      |  |   | 175    |  
|                                                |  |      |        |      |  |   |        |  
|Benefit obligation at the end of the year       |  | $    | 22,644 |      |  | $ | 16,928 |  
|                                                |  |      |        |      |  |   |        |  

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

|                                                       |  |      |        |      |  |   |        |  
|------------------------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                                                       |  | 2003 |        | 2002
|                                                       |  |      |        |     
|(In thousands)                                         |  |      |        |      |  |   |        |  
|Fair value of plan assets at the beginning of the year |  | $    | 13,158 |      |  | $ | 19,259 |  
|Actual return on plan assets                           |  |      | 2,326  |      |  |   | (1,611 | )
|Company contribution                                   |  |      | 618    |      |  |   | 143    |  
|Benefits paid                                          |  |      | (1,281 | )    |  |   | (1,146 | )
|Estimated settlement of benefits                       |  |      |       |      |  |   | (3,647 | )
|Foreign currency exchange rate changes                 |  |      | 3,066  |      |  |   | 160    |  
|                                                       |  |      |        |      |  |   |        |  
|Fair value of plan assets at the end of the year       |  | $    | 17,887 |      |  | $ | 13,158 |  
|                                                       |  |      |        |      |  |   |        |  

In 2004, we anticipate providing approximately $0.9 million of contributions to
the combined plan assets of the Salaried Plan and the Canada Operational Plan
and $1.1 million to settle our benefit payment obligations for the WRI plan.

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

|                                   |  |      |        |      |  |   |        |  
|---------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                   |  | 2003 |        | 2002
|                                   |  |      |        |     
|(In thousands)                     |  |      |        |      |  |   |        |  
|Unfunded status                    |  | $    | (4,758 | )    |  | $ | (3,770 | )
|Unrecognized net actuarial loss    |  |      | 3,244  |      |  |   | 2,656  |  
|Unrecognized pension service costs |  |      | 1,062  |      |  |   | 946    |  
|                                   |  |      |        |      |  |   |        |  
|Accrued benefit cost               |  | $    | (452   | )    |  | $ | (168   | )
|                                   |  |      |        |      |  |   |        |  

The tables above for the Canadian plans include the following amounts for the
discontinued operations of WRI in 2002 (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.

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

|                                         |  |      |       |      |  |      |       |   |  |   |       |  
|---------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|                                         |  | 2003 |       | 2002 |  | 2001
|                                         |  |      |       |      |  |     
|(In thousands)                           |  |      |       |      |  |      |       |   |  |   |       |  
|Service cost                             |  | $    | 692   |      |  | $    | 613   |   |  | $ | 431   |  
|Interest cost                            |  |      | 1,080 |      |  |      | 1,034 |   |  |   | 685   |  
|Amortization of prior service cost       |  |      | 145   |      |  |      | 126   |   |  |   | 126   |  
|Amortization of deferred gain            |  |      | (82   | )    |  |      | (126  | ) |  |   | (411  | )
|Effect of special termination benefits   |  |      | 98    |      |  |      | (386  | ) |  |   | 199   |  
|Effect of curtailment                    |  |      | 20    |      |  |      |      |   |  |   |      |  
|                                         |  |      |       |      |  |      |       |   |  |   |       |  
|Net periodic postretirement benefit cost |  | $    | 1,953 |      |  | $    | 1,261 |   |  | $ | 1,030 |  
|                                         |  |      |       |      |  |      |       |   |  |   |       |  

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

|                                                |  |      |        |      |  |   |        |  
|----------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                                |  | 2003 |        | 2002
|                                                |  |      |        |     
|(In thousands)                                  |  |      |        |      |  |   |        |  
|Benefit obligation at the beginning of the year |  | $    | 15,088 |      |  | $ | 15,032 |  
|Service cost                                    |  |      | 692    |      |  |   | 613    |  
|Interest cost                                   |  |      | 1,080  |      |  |   | 1,034  |  
|Participants contributions                     |  |      | 633    |      |  |   | 504    |  
|Actuarial loss                                  |  |      | 1,727  |      |  |   | 21     |  
|Benefits paid                                   |  |      | (2,393 | )    |  |   | (2,030 | )
|Special termination benefits                    |  |      | 98     |      |  |   | (401   | )
|Curtailment                                     |  |      | (43    | )    |  |   |       |  
|Foreign currency exchange rate changes          |  |      | 1,243  |      |  |   | 315    |  
|                                                |  |      |        |      |  |   |        |  
|Benefit obligation at the end of the year       |  | $    | 18,125 |      |  | $ | 15,088 |  
|                                                |  |      |        |      |  |   |        |  

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

|                                       |  |      |        |      |  |   |        |  
|-------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                       |  | 2003 |        | 2002
|                                       |  |      |        |     
|(In thousands)                         |  |      |        |      |  |   |        |  
|Benefit obligation at end of year      |  | $    | 18,125 |      |  | $ | 15,088 |  
|Unrecognized net actuarial gain (loss) |  |      | (628   | )    |  |   | 1,135  |  
|Unrecognized prior service cost        |  |      | (502   | )    |  |   | (557   | )
|                                       |  |      |        |      |  |   |        |  
|Net postretirement benefit obligation  |  | $    | 16,995 |      |  | $ | 15,666 |  
|                                       |  |      |        |      |  |   |        |  

The weighted average discount rate used in determining the postretirement
benefit obligation was 6.25% at December 31, 2003 and 7.00% at December 31,
2002. The weighted average discount rate used to determine net periodic
benefit cost was 7.00% at December 31, 2003 and 7.25% at December 31, 2002.

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 for our U.S. plan. A 7.5%
annual rate of increase in the health care trend rate was assumed for our
Canadian plan, and is expected to decrease 1% per year to an ultimate rate of
4.5%. 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:

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|                                                        |  |             |       |             |  |   |      |  
|------------------------------------------------------- |  | ----------- | ----- | ----------- |  | - | ---- | -
|                                                        |  | 1% Increase |       | 1% Decrease
|                                                        |  |             |       |            
|(In thousands)                                          |  |             |       |             |  |   |      |  
|Effect on total of service and interest cost components |  | $           | 101   |             |  | $ | (79  | )
|Effect on postretirement benefit obligation             |  | $           | 1,140 |             |  | $ | (907 | )
|                                                        |  |             |       |             |  |   |      |  

On December 8, 2003, President Bush signed into law a bill that expands
Medicare, primarily adding a prescription drug benefit for Medicare-eligible
retirees starting in 2006. We anticipate that the benefits we pay after 2006
will be lower as a result of the new Medicare provisions; however, the retiree
medical obligations and costs reported above do not reflect the impact of this
legislation. Deferring the recognition of the new Medicare provisions impact
is permitted by Financial Accounting Standards Board Staff Position 106-1 due
to open questions about some of the new Medicare provisions and a lack of
authoritative accounting guidance about certain matters. The final accounting
guidance could require changes to previously reported information.

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 $1.2
million at December 31, 2003, consisting of $0.2 million for the Decatur
facility and $0.9 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, 2003 and could amount to an aggregate exposure of $1.9
million if these environmental matters are not resolved as anticipated.

14. Income Taxes

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

|               |  |      |         |      |  |      |        |   |  |   |        |  
|-------------- |  | ---- | ------- | ---- |  | ---- | ------ | - |  | - | ------ | -
|               |  | 2003 |         | 2002 |  | 2001
|               |  |      |         |      |  |     
|(In thousands) |  |      |         |      |  |      |        |   |  |   |        |  
|U.S            |  | $    | (62,579 | )    |  | $    | (6,933 | ) |  | $ | (170   | )
|Foreign        |  |      | 10,018  |      |  |      | 15,418 |   |  |   | 15,957 |  
|               |  |      |         |      |  |      |        |   |  |   |        |  
|Total          |  | $    | (52,561 | )    |  | $    | 8,485  |   |  | $ | 15,787 |  
|               |  |      |         |      |  |      |        |   |  |   |        |  

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

|                                                           |                            |              |         |      |        |      |       |        |        |   |         |       |       |  
|---------------------------------------------------------- | -------------------------- | ------------ | ------- | ---- | ------ | ---- | ----- | ------ | ------ | - | ------- | ----- | ----- | -
|                                                           |                            |              |         | 2003 |        | 2002 |       | 2001  
|                                                           |                            |              |         |      |        |      |       |       
|(In thousands)                                             |                            |              |         |      |        |      |       |        |        |   |         |      
|Continuing operations                                      |                            |              |         |      |        |      |       |        |        |   |         |      
|                                                           | Current expense (benefit): |              |         |      |        |      |       |        |        |   |         |       |      
|                                                           |                            | U.S. Federal |         | $    | (1,163 | )    |       | $      | (5,308 | ) |         | $     | 2,675 |  
|                                                           |                            | Foreign      |         |      | 1,478  |      |       |        | 2,185  |   |         |       | 4,387 |  
|                                                           |                            | State        |         |      | 446    |      |       |        | 693    |   |         |       | (732  | )
|                                                           |                            |              |         |      |        |      |       |        |        |   |         |       |       |  
|                                                           | Total current              |              |         | 761  |        |      |       | (2,430 | )      |   |         | 6,330 |      
|                                                           |                            |              |         |      |        |      |       |        |        |   |         |       |       |  
|Deferred (benefit) expense:                                |                            |              |         |      |        |      |       |        |        |   |         |      
|U.S                                                        |                            |              | (13,570 | )    |        |      | 2,547 |        |        |   | (1,741  | )    
|Foreign                                                    |                            |              | (768    | )    |        |      | 1,198 |        |        |   | (244    | )    
|                                                           |                            |              |         |      |        |      |       |        |        |   |         |       |       |  
|Total deferred                                             |                            |              | (14,338 | )    |        |      | 3,745 |        |        |   | (1,985  | )    
|                                                           |                            |              |         |      |        |      |       |        |        |   |         |       |       |  
|Total income tax (benefit) expense
 continuing operations |                            |              | (13,577 | )    |        |      | 1,315 |        |        |   | 4,345   |      
|Income tax benefit  discontinued operations               |                            |              | (800    | )    |        |      | (936  | )      |        |   | (12,100 | )    
|                                                           |                            |              |         |      |        |      |       |        |        |   |         |       |       |  
|Total income tax (benefit) expense                         |                            | $            | (14,377 | )    |        | $    | 379   |        |        | $ | (7,755  | )    
|                                                           |                            |              |         |      |        |      |       |        |        |   |         |       |       |  

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:

|                                                     |  |      |         |      |  |   |         |  
|---------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                     |  | 2003 |         | 2002
|                                                     |  |      |         |     
|(In thousands)                                       |  |      |         |      |  |   |         |  
|Deferred tax liabilities:                            |  |      |         |      |  |   |         |  
|Basis of property, plant and equipment               |  | $    | (31,653 | )    |  | $ | (31,522 | )
|Prepaid pension                                      |  |      | (4,689  | )    |  |   | (4,034  | )
|Other                                                |  |      | (2,011  | )    |  |   | (2,540  | )
|                                                     |  |      |         |      |  |   |         |  
|Total deferred tax liabilities                       |  |      | (38,353 | )    |  |   | (38,096 | )
|                                                     |  |      |         |      |  |   |         |  
|Deferred tax assets:                                 |  |      |         |      |  |   |         |  
|Environmental remediation                            |  |      | 826     |      |  |   | 554     |  
|Net operating loss carryforward                      |  |      | 25,056  |      |  |   | 12,281  |  
|Restructuring reserves                               |  |      | 2,353   |      |  |   | 627     |  
|Inventory valuations                                 |  |      | 546     |      |  |   | 315     |  
|Pension obligation                                   |  |      | 14,766  |      |  |   | 12,988  |  
|Other                                                |  |      | 3,597   |      |  |   | 4,700   |  
|                                                     |  |      |         |      |  |   |         |  
|Total deferred tax assets                            |  |      | 47,144  |      |  |   | 31,465  |  
|Valuation allowance                                  |  |      | (3,569  | )    |  |   | (2,385  | )
|                                                     |  |      |         |      |  |   |         |  
|Total deferred tax assets net of valuation allowance |  |      | 43,575  |      |  |   | 29,080  |  
|                                                     |  |      |         |      |  |   |         |  
|Net deferred tax asset (liability)                   |  | $    | 5,222   |      |  | $ | (9,016  | )
|                                                     |  |      |         |      |  |   |         |  

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

|                                                    |  |      |         |      |  |      |        |   |  |   |        |  
|--------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                    |  | 2003 |         | 2002 |  | 2001
|                                                    |  |      |         |      |  |     
|(In thousands)                                      |  |      |         |      |  |      |        |   |  |   |        |  
|Income tax expense at federal statutory rate        |  | $    | (18,397 | )    |  | $    | 2,885  |   |  | $ | 5,525  |  
|Increase (decrease) in taxes resulting from:        |  |      |         |      |  |      |        |   |  |   |        |  
|State and local taxes, net of federal benefit       |  |      | 533     |      |  |      | 443    |   |  |   | 185    |  
|Effect of difference in U.S. and foreign rates      |  |      | (1,765  | )    |  |      | (1,858 | ) |  |   | (1,363 | )
|Goodwill impairment and other permanent differences |  |      | 7,099   |      |  |      | 21     |   |  |   | 12     |  
|Other                                               |  |      | (1,047  | )    |  |      | (176   | ) |  |   | (14    | )
|                                                    |  |      |         |      |  |      |        |   |  |   |        |  
|Income tax expense  continuing operations          |  | $    | (13,577 | )    |  | $    | 1,315  |   |  | $ | 4,345  |  
|                                                    |  |      |         |      |  |      |        |   |  |   |        |  

At December 31, 2003, we have U.S. federal, state and foreign net operating
loss carryforwards of $31 million, $138 million and $28 million, respectively.
These net operating loss carryforwards expire at various times beginning in
2016 through 2023. We have established valuation allowances of $3.6 million
and $2.4 million at December 31, 2003 and 2002, respectively, to offset a
portion of the deferred tax assets relating to state net operating losses.

The tax rate for our operations in China was 0% in 2001, 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. We also have $1.5 million in government tax credits which may be
used to offset tax liabilities in Portugal through 2008. These credits are not
reflected in deferred tax assets at December 31, 2003 or 2002.

Undistributed earnings of our foreign subsidiaries amounted to approximately
$93.1 million at December 31, 2003. Those earnings are considered to be
indefinitely reinvested and, accordingly, no provision for U.S. federal and
state income taxes has been provided thereon. Upon distribution of those
earnings in the form of dividends or otherwise, we would be subject to both
U.S. income taxes (subject to an adjustment for foreign tax credits) and
withholding taxes payable to the various foreign countries. Determination of
the amount of unrecognized deferred U.S. income tax liability is not
practicable because of the complexities associated with its hypothetical
calculation. Withholding taxes of approximately $5.3 million would be payable
upon remittance of all previously unremitted earnings at December 31, 2003.

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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, 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 | )     
|                             | Activity in 2003                                                |   |             | 17,383 |                |   |             | 1,662  |               |   |         | (220    | ) |   |         | 18,825 |  
|                             | Reclassification
adjustment for realized
cash flow hedge
losses |   |             |       |                |   |             | 256    |               |   |         |        |   |   |         | 256    |  
|                             |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |       
|Balance at December 31, 2003 |                                                                 | $ | (417        | )      |                | $ | 1,662       |        |               | $ | (11,755 | )       |   | $ | (10,510 | )     
|                             |                                                                 |   |             |        |                |   |             |        |               |   |         |         |   |   |         |       

16. Redeemable Cumulative Preferred Stock

We have 500,000 shares authorized for issuance of $1 par value cumulative
preferred stock. At December 31, 2003 and 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 declare a
dividend.

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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 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.

18. Stock-Based Compensation Plans

The 2003 Equity Incentive Plan (the 2003 Equity Plan) was adopted by the
Board of Directors on March 25, 2003 and was approved by the stockholders on
May 14, 2003. The 2003 Equity Plan provides for the issuance of awards in the
form of stock options, restricted shares, stock appreciation rights and other
additional awards to key executives and employees. The maximum number of
shares of Common Stock that may be issued under the plan is limited to 850,000
shares, provided that no more than 250,000 shares may be issued in the form of
awards other than options or stock appreciation rights. The duration of the
2003 Equity Plan is ten years.

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 allows us to continue to compensate and reward our
directors upon the termination of the 1993 Directors Plan in 2003. The terms
of the 2001 Directors Plan are substantially the same as the terms of the 1993
Directors Plan.

The 1993 Equity Incentive Plan (the 1993 Equity Plan) provided 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 was 2,075,000 at a price as
determined by our Compensation Committee. All options granted under the plan
were issued at the market value at the date of the grant. Options granted
prior to 1999 under the 1993 Equity Plan vested 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 vested
33 1/3% 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
terminated by its terms in 2003.

The 1993 Stock Option Plan for Outside Directors (the 1993 Directors Plan)
provided 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 were issuable
under the 1993 Directors Plan. The initial options granted at the time the
Director joins the Board vest at 33 1/3% per year but must be held one year

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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 terminated in 2003.

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 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:

|                                 |  |             |       |            |  |            |         |           |  |                    |         |       |  |                  |           |   |  |   |              |  |  |   |       | 
|-------------------------------- |  | ----------- | ----- | ---------- |  | ---------- | ------- | --------- |  | ------------------ | ------- | ----- |  | ---------------- | --------- | - |  | - | ------------ |  |  | - | ----- | 
|                                 |  |             |       |            |  |            |         | 1993      |  |                    |         |       |  |                 
|                                 |  | 2003 Equity |       | 2001       |  | 1993       |         | Equity    |  |                    |         |       |  | Weighted-       
|                                 |  | Incentive   |       | Directors |  | Directors |         | Incentive |  |                    |         |       |  | Average Exercise
|                                 |  | Plan        |       | Plan       |  | Plan       |         | Plan      |  | Option Price       |         | Price
|                                 |  |             |       |            |  |            |         |           |  |                    |         |      
|                                 |  |             |       |            |  |            |         |           |  | (Number of Shares) |         |       |  |                  |           |   |  |  
|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 | 
|Granted                          |  |             | 2,000 |            |  |            | 101,520 |           |  |                    | 6,000   |       |  |                  | 366,026   |   |  | $ | 4.05-$5.86   |  |  | $ | 4.34  | 
|Exercised                        |  |             |      |            |  |            |        |           |  |                    |        |       |  |                  |          |   |  |   |             |  |  |   |      | 
|Forfeited                        |  |             |      |            |  |            |        |           |  |                    | (5,000  | )     |  |                  | (155,715  | ) |  | $ | 4.05-$22.25  |  |  | $ | 10.57 | 
|                                 |  |             |       |            |  |            |         |           |  |                    |         |       |  |                  |           |   |  |   |              |  |  |   |       | 
|Outstanding at
December 31, 2003 |  |             | 2,000 |            |  |            | 127,882 |           |  |                    | 161,184 |       |  |                  | 1,499,233 |   |  | $ | 4.05-$25.25  |  |  | $ | 9.30  | 
|                                 |  |             |       |            |  |            |         |           |  |                    |         |       |  |                  |           |   |  |   |              |  |  |   |       | 

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|                  |  |             |   |            |  |            |         |           |  |                    |         |       |  |                  |         |  |  |   |             |  |  |   |       | 
|----------------- |  | ----------- | - | ---------- |  | ---------- | ------- | --------- |  | ------------------ | ------- | ----- |  | ---------------- | ------- |  |  | - | ----------- |  |  | - | ----- | 
|                  |  |             |   |            |  |            |         | 1993      |  |                    |         |       |  |                 
|                  |  | 2003 Equity |   | 2001       |  | 1993       |         | Equity    |  |                    |         |       |  | Weighted-       
|                  |  | Incentive   |   | Directors |  | Directors |         | Incentive |  |                    |         |       |  | Average Exercise
|                  |  | Plan        |   | Plan       |  | Plan       |         | Plan      |  | Option Price       |         | Price
|                  |  |             |   |            |  |            |         |           |  |                    |         |      
|                  |  |             |   |            |  |            |         |           |  | (Number of Shares) |         |       |  |                  |         |  |  |  
|Exercisable at:   |  |             |   |            |  |            |         |           |  |                    |         |       |  |                  |         |  |  |   |             |  |  |   |       | 
|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 | 
|December 31, 2003 |  |             |  |            |  |            | 127,882 |           |  |                    | 161,184 |       |  |                  | 912,810 |  |  | $ | 5.28-$25.25 |  |  | $ | 10.71 | 
|                  |  |             |   |            |  |            |         |           |  |                    |         |       |  |                  |         |  |  |   |             |  |  |   |       | 

There were no options outstanding issued prior to August 1993. 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, 2003 were 1,790,299, $9.30,
6.9 years, 1,201,876 and $10.71, respectively.

The range of exercise prices of the outstanding options and exercisable options
at December 31, 2003 are as follows:

|                                |  |                    |           |                    |  |                  |           |  |  |  |     | 
|------------------------------- |  | ------------------ | --------- | ------------------ |  | ---------------- | --------- |  |  |  | --- | 
|                                |  | Number of          |           | Number of          |  | Weighted Average
|Weighted Average Exercise Price |  | Exercisable Shares |           | Outstanding Shares |  | Remaining Life  
|                                |  |                    |           |                    |  |                 
|$0.00 - $5.99                   |  |                    | 107,523   |                    |  |                  | 466,050   |  |  |  | 9.1 | 
|$6.00 - $9.99                   |  |                    | 489,591   |                    |  |                  | 615,273   |  |  |  | 5.8 | 
|$10.00 - $14.99                 |  |                    | 545,696   |                    |  |                  | 649,743   |  |  |  | 6.6 | 
|$15.00 - $19.99                 |  |                    | 43,316    |                    |  |                  | 43,483    |  |  |  | 6.3 | 
|$20.00 - $25.25                 |  |                    | 15,750    |                    |  |                  | 15,750    |  |  |  | 4.0 | 
|                                |  |                    |           |                    |  |                  |           |  |  |  |     | 
|Totals                          |  |                    | 1,201,876 |                    |  |                  | 1,790,299 |  |  |  | 6.9 | 
|                                |  |                    |           |                    |  |                  |           |  |  |  |     | 

In 2003, we awarded 39,083 shares of restricted stock under the 1993 Equity
Plan, with a fair value at the date of grant of $4.05 per share and 3,500
shares of restricted stock under the 2003 Equity Plan, with a fair value at the
date of grant of $6.30 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 2003 which
is recognized on a straight-line basis over the two year vesting period of the
restricted stock grants.

19. Commitments

We lease certain properties such as motorized vehicles, distribution and
warehousing space, computers, office equipment and production testing
equipment. Terms of the leases, including purchase options, renewals and
maintenance costs, vary by lease. Minimum future rental commitments under our
operating leases having non-cancelable lease terms in excess of one year
totaled approximately $10.3 million as of December 31, 2003 and are payable as
follows: $3.3 million in 2004, $2.7 million in 2005, $1.5 million in 2006, $0.8
million in 2007, $0.4 million in 2008 and $1.6 million thereafter. Rental
expense for operating leases was $3.3 million in 2003, $4.9 million in 2002 and
$2.9 million in 2001.

At December 31, 2003, we had commitments of $0.9 million for capital
expenditures.

At December 31, 2003, we had a commitment to purchase in 2004 from an
international supplier copper alloy tube of $1.2 million.

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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 products 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.

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, 2003: |  |            |         |           |  |         |         |              |  |          |        |  |  |   |         | 
|Sales                         |  | $          | 442,471 |           |  | $       | 115,112 |              |  | $        | 38,741 |  |  | $ | 596,324 | 
|Gross profit (loss)           |  |            | 38,997  |           |  |         | (271    | )            |  |          | 2,100  |  |  |   | 40,826  | 
|                              |  |            |         |           |  |         |         |              |  |          |        |  |  |   |         | 
|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  | 
|                              |  |            |         |           |  |         |         |              |  |          |        |  |  |   |         | 

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 2003, 2002 and 2001, no customer accounted for as much as 10% of our net
sales.

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##### Table of Contents



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

|                              |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|----------------------------- |  | ---- | ------- | ------ |  | ---------- | ------ | ------------ |  | ------------- | ------ |  |  | - | ------- | 
|                              |  |      |         |        |  |            |        |              |  | Other Foreign |        |  |  |  
|                              |  | U.S. |         | Canada |  | Operations |        | Consolidated
|                              |  |      |         |        |  |            |        |             
|(In thousands)                |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Year ended December 31, 2003: |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|Sales                         |  | $    | 436,278 |        |  | $          | 79,439 |              |  | $             | 80,607 |  |  | $ | 596,324 | 
|Long-lived assets             |  |      | 252,077 |        |  |            | 33,106 |              |  |               | 14,374 |  |  |   | 299,557 | 
|                              |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 
|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 | 
|                              |  |      |         |        |  |            |        |              |  |               |        |  |  |   |         | 

21. Restructuring and Other Charges

During 2003, we recognized a restructuring charge of $15.1 million ($9.9
million net of tax). We formalized a plan to terminate approximately 200, or
6% of our workforce. These primarily represented salaried and indirect hourly
employees and, to a lesser extent, direct hourly employees, from all of our
plants in North America. In conjunction with this plan, we accrued and charged
to expense $1.1 million for severance benefits for approximately 92 of these
employees. This reduction in workforce was deemed necessary in order to reduce
costs in a weak economic environment. As of December 31, 2003, we have made
approximately $0.7 million of payments against the $1.1 million liability for
severance benefits and most of the terminations took place within the two-week
period subsequent to September 28, 2003. As of December 31, 2003, we have
accrued $0.4 million of restructuring cost representing our remaining cash
obligations.

The 2003 restructuring charge also included: $10.4 million related to the
closure of our Booneville, Mississippi facility (discussed below); a $2.6
million write-down of assets held for sale in Roxboro, North Carolina; a $0.3
million charge related to the write-off of impaired assets at our Altoona,
Pennsylvania facility; and $0.7 million of other charges. The impairment
charge for the assets held for sale in Roxboro, North Carolina was a result of
writing down the land and building to our revised, lower estimate of fair
value. Demand for industrial facilities in this geographic area is extremely
weak due to the very slow industrial economy.

We announced in the third quarter of 2003 that we would close our Booneville,
Mississippi facility. The facility produced both smooth and enhanced
industrial tube, primarily used by residential and commercial air conditioner
manufacturers and employed approximately 140 persons. We substantially
completed the transition of production from the Booneville plant to our other
facilities as of December 31, 2003. The $10.4 million charge for our
Booneville facility includes a $8.9 million write-off of impaired assets,
including a $2.6 million write-off of spare parts and supplies related to these
assets, $0.3 million of severance costs, and $1.2 million of other costs
required for the closure of the facility. In future quarters, we anticipate
incurring additional restructuring charges for the closure of this facility of
approximately $1.6 million. We anticipate that key decisions related to the
final disposition and relocation of the Booneville

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equipment will be finalized during the first half of 2004. As of December 31,
2003, we have accrued $3.8 million of restructuring cost, representing $2.6
million of impaired inventory, $0.2 million of impaired assets and $1.0 million
of our remaining cash obligations. Annual savings from this closure and
reallocation of production are expected to be approximately $3.0 million.

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

22. (Loss) Earnings Per Share

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

|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|---------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------ | - |  | -- | ------- | -
|                                                                 |  | 2003 |         | 2002 |  | 2001
|(In thousands, except per share amounts)                         |  |      |         |      |  |     
|(Loss) income from continuing operations                         |  | ($   | 38,984  | )    |  | $    | 7,170  |   |  | $  | 11,442  |  
|Loss from discontinued operations, net of tax                    |  |      | (1,637  | )    |  |      | (1,610 | ) |  |    | (31,240 | )
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|Net (loss) income                                                |  |      | (40,621 | )    |  |      | 5,560  |   |  |    | (19,798 | )
|Dividends on preferred stock                                     |  |      |        |      |  |      | (58    | ) |  |    | (280    | )
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|Net (loss) income available to common shares                     |  | ($   | 40,621  | )    |  | $    | 5,502  |   |  | ($ | 20,078  | )
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|Basic weighted average common shares                             |  |      | 12,275  |      |  |      | 12,231 |   |  |    | 12,077  |  
|Dilutive stock options                                           |  |      |        |      |  |      | 131    |   |  |    | 230     |  
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|Diluted weighted average common and common
equivalent shares (1) |  |      | 12,275  |      |  |      | 12,362 |   |  |    | 12,307  |  
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|(Loss) earnings per common sharebasic:                          |  |      |         |      |  |      |        |   |  |    |         |  
|Continuing operations                                            |  | ($   | 3.18    | )    |  | $    | 0.58   |   |  | $  | 0.92    |  
|Discontinued operations                                          |  |      | (0.13   | )    |  |      | (0.13  | ) |  |    | (2.58   | )
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|Net (loss) income per common share  basic                       |  | ($   | 3.31    | )    |  | $    | 0.45   |   |  | ($ | 1.66    | )
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|(Loss) earnings per common sharediluted:                        |  |      |         |      |  |      |        |   |  |    |         |  
|Continuing operations                                            |  | ($   | 3.18    | )    |  | $    | 0.58   |   |  | $  | 0.91    |  
|Discontinued operations                                          |  |      | (0.13   | )    |  |      | (0.13  | ) |  |    | (2.54   | )
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  
|Net (loss) income per common share  diluted                     |  | ($   | 3.31    | )    |  | $    | 0.45   |   |  | ($ | 1.63    | )
|                                                                 |  |      |         |      |  |      |        |   |  |    |         |  

(1)  For the years ended December 31, 2003, 2002 and 2001, there were 1.4
million, 1.5 million and 0.4 million anti-dilutive or out-of-the-money stock
options, respectively, that were excluded from the calculation of diluted
weighted average common and common equivalent shares.

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23. Quarterly Results of Operations (Unaudited)

The following is a summary of the unaudited quarterly results of operations for
the years ended December 31, 2003 and 2002:

|                                              |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|--------------------------------------------- |  | -------- | ------- | ------- |  | ---------------- | ------- | --------------- |  | - | ------- | - |  | - | ------- | -
|2003                                          |  | March 30 |         | June 29 |  | September 28 (1) |         | December 31 (2)
|                                              |  |          |         |         |  |                  |         |                
|(In thousands, except per share amounts)      |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Net sales                                     |  | $        | 143,497 |         |  | $                | 152,978 |                 |  | $ | 144,099 |   |  | $ | 155,750 |  
|Gross profit                                  |  |          | 14,622  |         |  |                  | 12,605  |                 |  |   | 6,242   |   |  |   | 7,357   |  
|Income (loss) from continuing operations      |  |          | 638     |         |  |                  | 99      |                 |  |   | (31,722 | ) |  |   | (7,999  | )
|Loss from discontinued operations, net of tax |  |          |        |         |  |                  |        |                 |  |   |        |   |  |   | (1,637  | )
|                                              |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Net income (loss)                             |  | $        | 638     |         |  | $                | 99      |                 |  | $ | (31,722 | ) |  | $ | (9,636  | )
|                                              |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Basic earnings (loss) per common share:       |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Continuing operations                         |  | $        | 0.05    |         |  | $                | 0.01    |                 |  | $ | (2.58   | ) |  | $ | (0.65   | )
|Discontinued operations                       |  |          |        |         |  |                  |        |                 |  |   |        |   |  |   | (0.13   | )
|                                              |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Net income (loss)                             |  | $        | 0.05    |         |  | $                | 0.01    |                 |  | $ | (2.58   | ) |  | $ | (0.78   | )
|                                              |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Diluted earnings (loss) per common share:     |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Continuing operations                         |  | $        | 0.05    |         |  | $                | 0.01    |                 |  | $ | (2.58   | ) |  | $ | (0.65   | )
|Discontinued operations                       |  |          |        |         |  |                  |        |                 |  |   |        |   |  |   | (0.13   | )
|                                              |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  
|Net income (loss)                             |  | $        | 0.05    |         |  | $                | 0.01    |                 |  | $ | (2.58   | ) |  | $ | (0.78   | )
|                                              |  |          |         |         |  |                  |         |                 |  |   |         |   |  |   |         |  

|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|--------------------------------------------- |  | -------- | ------- | ------- |  | ------------ | ------- | ----------- |  | - | ------- |  |  | - | ------- | -
|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 (loss) per common share:       |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Continuing operations                         |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | 0.01    |  
|Discontinued operations                       |  |          |        |         |  |              |        |             |  |   |        |  |  |   | (0.13   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Net income (loss)                             |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | (0.12   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Diluted earnings (loss) per common share:     |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Continuing operations                         |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | 0.01    |  
|Discontinued operations                       |  |          |        |         |  |              |        |             |  |   |        |  |  |   | (0.13   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  
|Net income (loss)                             |  | $        | 0.13    |         |  | $            | 0.28    |             |  | $ | 0.15    |  |  | $ | (0.12   | )
|                                              |  |          |         |         |  |              |         |             |  |   |         |  |  |   |         |  

(1)  During the quarter ended September 28, 2003, we recognized restructuring
and other charges of approximately $6.4 million ($4.3 million net of tax) (see
Note 21) and a goodwill impairment charge of $23.2 million (see Note 1).

(2)  During the quarter ended December 31, 2003, we recognized restructuring and
other charges of approximately $8.7 million ($5.6 million net of tax) (see Note
21).

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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 and 7.375% Senior
Notes (Subsidiary Guarantors), which include TF Investor, Inc.; Tube Forming,
L.P.; Wolverine Finance, LLC; Wolverine China Investments, LLC; Small Tube
Manufacturing, LLC; Wolverine Joining Technologies, LLC; WT Holding Company,
Inc. and Tube Forming Holdings, Inc.; and (c) on a combined basis, the
Non-Guarantor Subsidiaries, which include Wolverine Tube (Canada) Inc.; 3072452
Nova Scotia Company; 3072453 Nova Scotia Company; 3072996 Nova Scotia Company;
Wolverine Tube Canada Limited Partnership; 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.; Wolverine Europe; and Wolverine Asia, Limited. 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.

Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
For the Year Ended December 31, 2003

|                                                             |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |        | 
|------------------------------------------------------------ | --------------------------- | - | ------- | ------ | ---------- | - | ------------ | ------- | ------------ | - | ------------ | ----- | - | - | ------- | - |  | - | ------- | ------ | 
|                                                             |                             |   |         |        |            |   |              |         |              |   | Non-         |       |   |   |         |   |  |   |        
|                                                             |                             |   |         |        |            |   | Subsidiary   |         | Guarantor    |   |              |       |   |   |         |   | 
|                                                             |                             |   | Parent  |        | Guarantors |   | Subsidiaries |         | Eliminations |   | Consolidated
|                                                             |                             |   |         |        |            |   |              |         |              |   |             
|(In thousands)                                               |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       
|Net sales                                                    |                             | $ | 318,244 |        |            | $ | 123,524      |         |              | $ | 199,438      |       |   | $ | (44,882 | ) |  | $ | 596,324 |       
|Cost of goods sold                                           |                             |   | 310,968 |        |            |   | 107,229      |         |              |   | 182,183      |       |   |   | (44,882 | ) |  |   | 555,498 |       
|                                                             |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       
|Gross profit                                                 |                             |   | 7,276   |        |            |   | 16,295       |         |              |   | 17,255       |       |   |   |        |   |  |   | 40,826  |       
|Selling, general and administrative expenses                 |                             |   | 24,318  |        |            |   | 3,296        |         |              |   | 4,489        |       |   |   |         |   |  |   | 32,103  |       
|Restructuring charges                                        |                             |   | 14,157  |        |            |   | 503          |         |              |   | 397          |       |   |   |         |   |  |   | 15,057  |       
|                                                             |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       
|Operating (loss) income from continuing
operations           |                             |   | (31,199 | )      |            |   | 12,496       |         |              |   | 12,369       |       |   |   |         |   |  |   | (6,334  | )     
|Other expenses (income):                                     |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       
|                                                             | Interest expense, net       |   |         | 21,829 |            |   |              | (13     | )            |   |              | (598  | ) |   |         |   |  |   |         | 21,218 | 
|                                                             | Amortization and other, net |   |         | 8,915  |            |   |              | (10,151 | )            |   |              | 3,092 |   |   |         |   |  |   |         | 1,856  | 
|                                                             | Goodwill impairment         |   |         | 23,153 |            |   |              |        |              |   |              |      |   |   |         |   |  |   |         | 23,153 | 
|                                                             |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       
|(Loss) income from continuing operations
before income taxes |                             |   | (85,096 | )      |            |   | 22,660       |         |              |   | 9,875        |       |   |   |         |   |  |   | (52,561 | )     
|Income tax (benefit) provision                               |                             |   | (20,589 | )      |            |   | 8,099        |         |              |   | (1,087       | )     |   |   |         |   |  |   | (13,577 | )     
|                                                             |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       
|(Loss) income from continuing operations                     |                             |   | (64,507 | )      |            |   | 14,561       |         |              |   | 10,962       |       |   |   |         |   |  |   | (38,984 | )     
|Loss from discontinued operations, net of tax                |                             |   |        |        |            |   |             |         |              |   | (1,637       | )     |   |   |         |   |  |   | (1,637  | )     
|Equity in earnings of subsidiaries                           |                             |   | 23,886  |        |            |   |             |         |              |   |             |       |   |   | (23,886 | ) |  |   |        |       
|                                                             |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       
|Net (loss) income                                            |                             | $ | (40,621 | )      |            | $ | 14,561       |         |              | $ | 9,325        |       |   | $ | (23,886 | ) |  | $ | (40,621 | )     
|                                                             |                             |   |         |        |            |   |              |         |              |   |              |       |   |   |         |   |  |   |         |       

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

|                                                             |                                |   |         |        |            |   |              |        |              |   |              |       |   |   |         |   |  |   |         |        |  
|------------------------------------------------------------ | ------------------------------ | - | ------- | ------ | ---------- | - | ------------ | ------ | ------------ | - | ------------ | ----- | - | - | ------- | - |  | - | ------- | ------ | -
|                                                             |                                |   |         |        |            |   |              |        |              |   | Non-         |       |   |   |         |   |  |   |        
|                                                             |                                |   |         |        |            |   | Subsidiary   |        | 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 (loss) income from continuing
operations           |                                |   | (2,973  | )      |            |   | 13,845       |        |              |   | 16,953       |       |   |   |        |   |  |   | 27,825  |       
|Other expenses (income):                                     |                                |   |         |        |            |   |              |        |              |   |              |       |   |   |         |   |  |   |         |       
|                                                             | 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  |  
|                                                             |                                |   |         |        |            |   |              |        |              |   |              |       |   |   |         |   |  |   |         |       
|Loss (income) from continuing operations
before income taxes |                                |   | (26,258 | )      |            |   | 18,910       |        |              |   | 15,833       |       |   |   |        |   |  |   | 8,485   |       
|Income tax (benefit) provision                               |                                |   | (9,530  | )      |            |   | 7,461        |        |              |   | 3,384        |       |   |   |        |   |  |   | 1,315   |       
|                                                             |                                |   |         |        |            |   |              |        |              |   |              |       |   |   |         |   |  |   |         |       
|(Loss) income from continuing operations                     |                                |   | (16,728 | )      |            |   | 11,449       |        |              |   | 12,449       |       |   |   |        |   |  |   | 7,170   |       
|(Loss) income 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

|                                                             |                             |   |         |        |            |   |              |        |              |   |              |        |   |   |         |   |  |   |         |        |  
|------------------------------------------------------------ | --------------------------- | - | ------- | ------ | ---------- | - | ------------ | ------ | ------------ | - | ------------ | ------ | - | - | ------- | - |  | - | ------- | ------ | -
|                                                             |                             |   |         |        |            |   |              |        |              |   | Non-         |        |   |   |         |   |  |   |        
|                                                             |                             |   |         |        |            |   | Subsidiary   |        | 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 expenses (income):                                     |                             |   |         |        |            |   |              |        |              |   |              |        |   |   |         |   |  |   |         |       
|                                                             | Interest expense, net       |   |         | 14,895 |            |   |              | (153   | )            |   |              | (1,642 | ) |   |         |  |  |   |         | 13,100 |  
|                                                             | Amortization and other, net |   |         | 2,515  |            |   |              | (4,483 | )            |   |              | 1,521  |   |   |         |  |  |   |         | (447   | )
|                                                             |                             |   |         |        |            |   |              |        |              |   |              |        |   |   |         |   |  |   |         |       
|(Loss) income from continuing operations
before income taxes |                             |   | (11,520 | )      |            |   | 11,865       |        |              |   | 15,442       |        |   |   |        |   |  |   | 15,787  |       
|Income tax (benefit) provision                               |                             |   | (4,674  | )      |            |   | 4,893        |        |              |   | 4,126        |        |   |   |        |   |  |   | 4,345   |       
|                                                             |                             |   |         |        |            |   |              |        |              |   |              |        |   |   |         |   |  |   |         |       
|(Loss) income 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 (loss) income                                            |                             | $ | (19,798 | )      |            | $ | 6,972        |        |              | $ | (19,924      | )      |   | $ | 12,952  |   |  | $ | (19,798 | )     
|                                                             |                             |   |         |        |            |   |              |        |              |   |              |        |   |   |         |   |  |   |         |       

F-40



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 2003

|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |   |         | 
|------------------------------------------ |  | -------------------------- | ------- | ------ | ------- | ---------- | -------- | ------------ | -------- | ------------ | ------- | ------------ | ------ | - | -------- | - | - | - | ------- | - | ------- | 
|                                           |  |                            |         |        |         |            |          |              |          |              |         | Non-         |        |   |          |   |   |   |         |  
|                                           |  |                            |         |        |         |            |          | Subsidiary   |          | Guarantor    |         |              |        |   |          |   |   |  
|                                           |  |                            |         | Parent |         | Guarantors |          | Subsidiaries |          | Eliminations |         | Consolidated
|                                           |  |                            |         |        |         |            |          |              |          |              |         |             
|(In thousands)                             |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Assets                                     |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Current assets                             |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|                                           |  | Cash and equivalents       |         | $      | 8,530   |            |          | $            |         |              |         | $            | 37,559 |   |          | $ |  |   |         | $ | 46,089  | 
|                                           |  | Accounts receivable, net   |         |        | 7,119   |            |          |              | 54,931   |              |         |              | 24,775 |   |          |   |  |   |         |   | 86,825  | 
|                                           |  | Inventories                |         |        | 45,833  |            |          |              | 33,139   |              |         |              | 29,033 |   |          |   |  |   |         |   | 108,005 | 
|                                           |  | Prepaid expenses and other |         |        | 12,156  |            |          |              | 408      |              |         |              | 218    |   |          |   |  |   |         |   | 12,782  | 
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Total current assets                       |  |                            | 73,638  |        |         |            | 88,478   |              |          |              | 91,585  |              |        |   |         |   |   |   | 253,701 |  
|Property, plant and equipment, net         |  |                            | 126,642 |        |         |            | 30,838   |              |          |              | 41,062  |              |        |   |         |   |   |   | 198,542 |  
|Deferred charges, net                      |  |                            | 13,087  |        |         |            | 291      |              |          |              | 1,392   |              |        |   |         |   |   |   | 14,770  |  
|Goodwill, net                              |  |                            |        |        |         |            | 75,505   |              |          |              | 1,654   |              |        |   |         |   |   |   | 77,159  |  
|Assets held for sale                       |  |                            | 3,100   |        |         |            |         |              |          |              | 1,697   |              |        |   |         |   |   |   | 4,797   |  
|Investments                                |  |                            | 4,289   |        |         |            |         |              |          |              |        |              |        |   |         |   |   |   | 4,289   |  
|Investments in subsidiaries                |  |                            | 409,796 |        |         |            | 302      |              |          |              |        |              |        |   | (410,098 | ) |   |   |        |  
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Total assets                               |  | $                          | 630,552 |        |         | $          | 195,414  |              |          | $            | 137,390 |              |        | $ | (410,098 | ) |   | $ | 553,258 |  
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Liabilities and Stockholders Equity       |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Current liabilities                        |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|                                           |  | Accounts payable           |         | $      | 17,813  |            |          | $            | 12,966   |              |         | $            | 16,724 |   |          | $ |  |   |         | $ | 47,503  | 
|                                           |  | Accrued liabilities        |         |        | 15,441  |            |          |              | 8,073    |              |         |              | 6,273  |   |          |   |  |   |         |   | 29,787  | 
|                                           |  | Short-term borrowings      |         |        |        |            |          |              |         |              |         |              | 1,502  |   |          |   |  |   |         |   | 1,502   | 
|                                           |  | Intercompany balances      |         |        | 131,590 |            |          |              | (123,304 | )            |         |              | (8,286 | ) |          |   |  |   |         |   |        | 
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Total current liabilities                  |  |                            | 164,844 |        |         |            | (102,265 | )            |          |              | 16,213  |              |        |   |         |   |   |   | 78,792  |  
|Deferred income taxes                      |  |                            | 3,098   |        |         |            | 7,385    |              |          |              | (10,124 | )            |        |   |         |   |   |   | 359     |  
|Long-term debt                             |  |                            | 253,107 |        |         |            |         |              |          |              | 1,177   |              |        |   |         |   |   |   | 254,284 |  
|Pension liabilities                        |  |                            | 18,594  |        |         |            |         |              |          |              | 3,722   |              |        |   |         |   |   |   | 22,316  |  
|Postretirement benefit obligation          |  |                            | 10,406  |        |         |            |         |              |          |              | 6,589   |              |        |   |         |   |   |   | 16,995  |  
|Accrued environmental remediation          |  |                            | 1,152   |        |         |            |         |              |          |              | 9       |              |        |   |         |   |   |   | 1,161   |  
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Total liabilities                          |  |                            | 451,201 |        |         |            | (94,880  | )            |          |              | 17,586  |              |        |   |         |   |   |   | 373,907 |  
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Stockholders equity                       |  |                            | 179,351 |        |         |            | 290,294  |              |          |              | 119,804 |              |        |   | (410,098 | ) |   |   | 179,351 |  
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |  
|Total liabilities and stockholders equity |  | $                          | 630,552 |        |         | $          | 195,414  |              |          | $            | 137,390 |              |        | $ | (410,098 | ) |   | $ | 553,258 |  
|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |   |   |         |   |        

F-41



---



##### Table of Contents



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

|                                           |  |                            |         |        |         |            |          |              |          |              |         |              |        |   |          |   |    |   |         |   |        | 
|------------------------------------------ |  | -------------------------- | ------- | ------ | ------- | ---------- | -------- | ------------ | -------- | ------------ | ------- | ------------ | ------ | - | -------- | - | -- | - | ------- | - | ------ | 
|                                           |  |                            |         |        |         |            |          |              |          |              |         | Non-         |        |   |          |   |    |   |         |  
|                                           |  |                            |         |        |         |            |          | Subsidiary   |          | 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-42



---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2003

|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|-------------------------------------------------------- |  | ------ | ------- | ---------- |  | ------------ | ------- | ------------ |  | ------------ | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                         |  |        |         |            |  |              |         |              |  | Non-         |        |   |  |   |         |   |  |  
|                                                         |  |        |         |            |  | Subsidiary   |         | Guarantor    |  |              |        |   |  |   |         |  
|                                                         |  | Parent |         | Guarantors |  | Subsidiaries |         | Eliminations |  | Consolidated
|                                                         |  |        |         |            |  |              |         |              |  |             
|(In thousands)                                           |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Operating Activities                                     |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|(Loss) income from continuing operations                 |  | $      | (40,621 | )          |  | $            | 14,561  |              |  | $            | 10,962 |   |  | $ | (23,886 | ) |  | $ | (38,984 | )
|Depreciation and amortization                            |  |        | 12,532  |            |  |              | 3,538   |              |  |              | 2,939  |   |  |   |        |   |  |   | 19,009  |  
|Deferred income taxes                                    |  |        | (11,776 | )          |  |              |        |              |  |              | (765   | ) |  |   |        |   |  |   | (12,541 | )
|Other non-cash items                                     |  |        | 316     |            |  |              | 50      |              |  |              |       |   |  |   |        |   |  |   | 366     |  
|Non-cash portion of restructuring charge                 |  |        | 11,690  |            |  |              | 326     |              |  |              |       |   |  |   |        |   |  |   | 12,016  |  
|Goodwill impairment                                      |  |        | 23,153  |            |  |              |        |              |  |              |       |   |  |   |        |   |  |   | 23,153  |  
|Equity in earnings of subsidiaries                       |  |        | (23,886 | )          |  |              |        |              |  |              |       |   |  |   | 23,886  |   |  |   |        |  
|Changes in operating assets and liabilities              |  |        | 13,889  |            |  |              | (11,217 | )            |  |              | (5,442 | ) |  |   |        |   |  |   | (2,770  | )
|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash (used for) provided by operating activities     |  |        | (14,703 | )          |  |              | 7,258   |              |  |              | 7,694  |   |  |   |        |   |  |   | 249     |  
|Investing Activities                                     |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Additions to property, plant and equipment               |  |        | (4,450  | )          |  |              | (634    | )            |  |              | (885   | ) |  |   |        |   |  |   | (5,969  | )
|Investments in rabbi trust                               |  |        | (4,289  | )          |  |              |        |              |  |              |       |   |  |   |        |   |  |   | (4,289  | )
|Other                                                    |  |        | 6       |            |  |              |        |              |  |              | 6      |   |  |   |        |   |  |   | 12      |  
|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash used for investing activities                   |  |        | (8,733  | )          |  |              | (634    | )            |  |              | (879   | ) |  |   |        |   |  |   | (10,246 | )
|Financing Activities                                     |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Financing fees and expenses paid                         |  |        | (52     | )          |  |              |        |              |  |              |       |   |  |   |        |   |  |   | (52     | )
|Net (payments) borrowings on revolving credit
facilities |  |        | (551    | )          |  |              | 551     |              |  |              | (1,122 | ) |  |   |        |   |  |   | (1,122  | )
|Intercompany borrowings (payments)                       |  |        | 9,915   |            |  |              | (7,175  | )            |  |              | (2,740 | ) |  |   |        |   |  |   |        |  
|Other financing activities                               |  |        |        |            |  |              |        |              |  |              | (6     | ) |  |   |        |   |  |   | (6      | )
|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash provided by (used for) financing activities     |  |        | 9,312   |            |  |              | (6,624  | )            |  |              | (3,868 | ) |  |   |        |   |  |   | (1,180  | )
|Effect of exchange rate on cash and equivalents          |  |        | 193     |            |  |              |        |              |  |              | 2,452  |   |  |   |        |   |  |   | 2,645   |  
|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Net cash (used for) provided by continuing
operations    |  |        | (13,931 | )          |  |              |        |              |  |              | 5,399  |   |  |   |        |   |  |   | (8,532  | )
|Net cash provided by discontinued operations             |  |        |        |            |  |              |        |              |  |              | 701    |   |  |   |        |   |  |   | 701     |  
|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Net (decrease) increase in cash and equivalents          |  |        | (13,931 | )          |  |              |        |              |  |              | 6,100  |   |  |   |        |   |  |   | (7,831  | )
|Cash and equivalents at beginning of period              |  |        | 22,461  |            |  |              |        |              |  |              | 31,459 |   |  |   |        |   |  |   | 53,920  |  
|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|Cash and equivalents at end of period                    |  | $      | 8,530   |            |  | $            |        |              |  | $            | 37,559 |   |  | $ |        |   |  | $ | 46,089  |  
|                                                         |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  

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##### Table of Contents



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

|                                                     |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ------- | ---------- |  | ------------ | ------- | ------------ |  | ------------ | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                     |  |        |         |            |  |              |         |              |  | Non-         |        |   |  |   |         |   |  |  
|                                                     |  |        |         |            |  | Subsidiary   |         | 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  |  
|                                                     |  |        |         |            |  |              |         |              |  |              |        |   |  |   |         |   |  |   |         |  

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##### Table of Contents



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

|                                                     |  |        |         |            |  |              |        |              |  |              |         |   |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ------- | ---------- |  | ------------ | ------ | ------------ |  | ------------ | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                     |  |        |         |            |  |              |        |              |  | Non-         |         |   |  |   |         |   |  |  
|                                                     |  |        |         |            |  | Subsidiary   |        | 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-45



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##### Table of Contents



Report of Ernst & Young LLP, Independent Auditors

The Board of Directors and Shareholders
Wolverine Tube, Inc.

We have audited the accompanying consolidated balance sheets of Wolverine Tube,
Inc. and Subsidiaries as of December 31, 2003 and 2002, and the related
consolidated statements of operations, stockholders equity and cash flows for
each of the three years in the period ended December 31, 2003. 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, 2003 and 2002, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2003, 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 to the consolidated financial statements, in fiscal 2002
the Company changed its method of accounting for goodwill.

|                    |  |                       |  | 
|------------------- |  | --------------------- |  | 
|                    |  | /s/ Ernst & Young LLP |  | 
|February 26, 2004   |  |                       |  | 
|Birmingham, Alabama |  |                       |  | 

F-46



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##### 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, 2003:  |                                          |        |              |          |            |          |            |            |  |        |   |      |            |  |   |        |      |  |   |      
|Deducted from assets accounts: |                                          |        |              |          |            |          |            |            |  |        |   |      |            |  |   |        |      |  |   |      
|                               | Reserve for sales returns and allowances |        | $            | 508      |            |          | $          | 327        |  |        | $ |     |            |  | $ | (177   | )(1) |  | $ | 658   | 
|                               | Allowances for doubtful accounts         |        |              | 481      |            |          |            | 238        |  |        |   | (247 | )          |  |   | (35    | )(2) |  |   | 437   | 
|                               |                                          |        |              |          |            |          |            |            |  |        |   |      |            |  |   |        |      |  |   |       | 
|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   | 
|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 | 
|                               |                                          |        |              |          |            |          |            |            |  |        |   |      |            |  |   |        |      |  |   |       | 



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

S-1



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##### Table of Contents






Exhibit Index

|        |  |                                                                                                                                                       
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  |                                                                                                                                                       
|Exhibit |  | Description                                                                                                                                           
|3.3     |  | Secretarys Certificate dated February 6, 2004 attached
to a complete copy of the Bylaws of the Company as
amended May 22, 1997.                      
|        |  |                                                                                                                                                       
|21      |  | List of Subsidiaries                                                                                                                                  
|        |  |                                                                                                                                                       
|23      |  | Consent of Ernst & Young LLP, Independent Auditors                                                                                                    
|        |  |                                                                                                                                                       
|31.1    |  | Certification of the Chief Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|        |  |                                                                                                                                                       
|31.2    |  | Certification of the Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|        |  |                                                                                                                                                       
|32.1    |  | 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.
|        |  |                                                                                                                                                       
|32.2    |  | 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.