UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





R  Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934


For the
quarterly period ended April 5, 2009


OR


 ̈ Transition report
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934


For the
transition period from______ to ______ .





COMMISSION
FILE NUMBER 1-12164





WOLVERINE
TUBE, INC.


(Exact
name of registrant as specified in its charter)





Delaware
              63-0970812(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)200
      Clinton Avenue West, Suite 1000Huntsville,
      Alabama
              35801(Address
      of principal executive offices)
              (Zip
      Code)





(256)
353-1310


(Registrant’s
telephone number, including area code)





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





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).    Yes  £    No  £




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definition of “large accelerated filer”, “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):




Large
      accelerated filer £
            Accelerated
      filer £Non-accelerated
      filer   £
            Smaller
      reporting company R(Do
      not check if smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes £    No  R





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


Class
              
              Outstanding
      as of August 14, 2009Common
      Stock, $0.01 Par Value
              
              40,623,736
      Shares





WOLVERINE
TUBE, INC.





QUARTERLY
REPORT ON FORM 10-Q


FOR THE
QUARTERLY PERIOD ENDED APRIL 5, 2009





TABLE OF
CONTENTS





Page No.PART
      IFINANCIAL
      INFORMATION
                      
                      
                      3Item
      1.
        Financial Statements
                      
                      
                      3Condensed
      Consolidated Statements of Operations
                      
                      
                      3Condensed
      Consolidated Balance Sheets
                      
                      
                      4Condensed
      Consolidated Statements of Cash Flows
                      
                      
                      5Item
      2.Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                      
                      
                      29Item
      4T.Controls and
      Procedures
                      
                      
                      37PART
      IIOTHER
      INFORMATION
                      
                      
                      37Item
      1A.Risk
      Factors
                      
                      
                      37Item
      6.
      Exhibits
                      
                      
                      37


2


PART
IFINANCIAL
INFORMATION





Item
1.             Financial
Statements





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidated Statements of Operations


(Unaudited)




Three months ended(In thousands except per share amounts)
                          
                          April 5, 2009
                          
                          
                          March 30, 2008Net
      sales
                          
                          $
                          109,602
                          
                          
                          $
                          201,458Cost
      of goods sold
                          
                          
                          106,027
                          
                          
                          
                          190,455Gross
      profit
                          
                          
                          3,575
                          
                          
                          
                          11,003Selling,
      general and administrative expenses
                          
                          
                          5,650
                          
                          
                          
                          6,935Net
      (gain) on divestitures
                          
                          
                          —
                          
                          
                          
                          (5,383
                          )Advisory
      fees and expenses
                          
                          
                          298
                          
                          
                          
                          524Restructuring
      and impairment charges
                          
                          
                          792
                          
                          
                          
                          3,938Operating
      income (loss)
                          
                          
                          (3,165
                          )
                          
                          
                          4,989Other
      (income) expense:Interest
      expense, net
                          
                          
                          3,531
                          
                          
                          
                          4,941Amortization
      expense
                          
                          
                          741
                          
                          
                          
                          697Loss
      on sale of receivables
                          
                          
                          —
                          
                          
                          
                          104Other,
      net
                          
                          
                          (221
                          )
                          
                          
                          19Income
      (loss) from continuing operations before non-controlling interest, equity
      in earningsof
      unconsolidated subsidiary and income taxes
                          
                          
                          (7,216
                          )
                          
                          
                          (772
                          )Non-controlling
      interest
                          
                          
                          —
                          
                          
                          
                          81Equity
      in earnings of unconsolidated subsidiary
                          
                          
                          (341
                          )
                          
                          
                          —Income
      tax expense
                          
                          
                          360
                          
                          
                          
                          1,101Income
      (loss) from continuing operations
                          
                          
                          (7,235
                          )
                          
                          
                          (1,954
                          )Income
      from discontinued operations, net of taxes
                          
                          
                          —
                          
                          
                          
                          6,146Net
      income (loss)
                          
                          
                          (7,235
                          )
                          
                          
                          4,192Accretion
      of convertible preferred stock
                          
                          
                          1,255
                          
                          
                          
                          1,255Preferred
      stock dividends
                          
                          
                          2,108
                          
                          
                          
                          1,191Net
      income (loss) applicable to common shares
                          
                          $
                          (10,598
                          )
                          
                          $
                          1,746Net
      income (loss) per common share—Basic and DilutedContinuing
      operations
                          
                          $
                          (0.26
                          )
                          
                          $
                          (0.11
                          )Discontinued
      operations
                          
                          
                          —
                          
                          
                          
                          0.06Net
      (loss) per common share
                          
                          $
                          (0.26
                          )
                          
                          $
                          (0.05
                          )Shares
      used in computing income (loss) per share:Basic
      and diluted
                          
                          
                          40,624
                          
                          
                          
                          40,624




See
accompanying notes to the condensed consolidated financial
statements.


3





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidated Balance Sheets


(Unaudited)




(In thousands except share and per share amounts)
                                  
                                  April 5, 2009
                                  
                                  
                                  December 31, 2008AssetsCurrent
      assetsCash
      and cash equivalents
                                  
                                  $
                                  54,193
                                  
                                  
                                  $
                                  33,537Restricted
      cash
                                  
                                  
                                  11,997
                                  
                                  
                                  
                                  37,738Accounts
      receivable, net of allowance for doubtful accounts of $407 in
      2009and
      $392 in 2008
                                  
                                  
                                  39,016
                                  
                                  
                                  
                                  38,626Inventories
                                  
                                  
                                  46,266
                                  
                                  
                                  
                                  53,284Assets
      held for sale
                                  
                                  
                                  —
                                  
                                  
                                  
                                  3,680Derivative
      assets
                                  
                                  
                                  1,614
                                  
                                  
                                  
                                  291Prepaid
      expenses and other assets
                                  
                                  
                                  4,021
                                  
                                  
                                  
                                  5,380Total
      current assets
                                  
                                  
                                  157,107
                                  
                                  
                                  
                                  172,536Property,
      plant and equipment, net
                                  
                                  
                                  55,254
                                  
                                  
                                  
                                  52,004Intangible
      assets and deferred charges, net
                                  
                                  
                                  2,567
                                  
                                  
                                  
                                  2,634Notes
      receivable
                                  
                                  
                                  562
                                  
                                  
                                  
                                  585Investment
      in unconsolidated subsidiary
                                  
                                  
                                  9,714
                                  
                                  
                                  
                                  9,373Total
      assets
                                  
                                  $
                                  225,204
                                  
                                  
                                  $
                                  237,132Liabilities
      and Accumulated DeficitCurrent
      liabilitiesAccounts
      payable
                                  
                                  $
                                  26,829
                                  
                                  
                                  $
                                  34,713Accrued
      liabilities
                                  
                                  
                                  14,811
                                  
                                  
                                  
                                  13,250Derivative
      liabilities
                                  
                                  
                                  3,030
                                  
                                  
                                  
                                  5,415Deferred
      income taxes
                                  
                                  
                                  1,253
                                  
                                  
                                  
                                  1,601Short-term
      borrowings
                                  
                                  
                                  17,496
                                  
                                  
                                  
                                  16,112Total
      current liabilities
                                  
                                  
                                  63,419
                                  
                                  
                                  
                                  71,091Long-term
      debt
                                  
                                  
                                  121,558
                                  
                                  
                                  
                                  121,558Pension
      liabilities
                                  
                                  
                                  45,755
                                  
                                  
                                  
                                  45,552Postretirement
      benefits obligation
                                  
                                  
                                  4,467
                                  
                                  
                                  
                                  4,662Accrued
      environmental remediation
                                  
                                  
                                  9,540
                                  
                                  
                                  
                                  9,628Accrued
      dividends
                                  
                                  
                                  7,584
                                  
                                  
                                  
                                  5,476Other
      liabilities
                                  
                                  
                                  3,128
                                  
                                  
                                  
                                  3,290Total
      liabilities
                                  
                                  
                                  255,451
                                  
                                  
                                  
                                  261,257Series
      A Convertible Preferred Stock, par value $1,000 per share, 90,000
      sharesauthorized;
      54,494 shares issued and outstanding as of April 5, 2009
    andDecember
      31, 2008
                                  
                                  
                                  15,163
                                  
                                  
                                  
                                  13,908Series
      B Convertible Preferred Stock, par value $1,000 per share, 25,000
      sharesauthorized;
      10,000 shares issued and outstanding as of April 5, 2009
    andDecember
      31, 2008
                                  
                                  
                                  9,700
                                  
                                  
                                  
                                  9,700Accumulated
      deficitCommon
      stock, par value $0.01 per share; 180,000,000 shares
      authorized;40,623,736
      shares issued and outstanding as of April 5, 2009 and December
      31,2008
                                  
                                  
                                  406
                                  
                                  
                                  
                                  406Additional
      paid-in capital
                                  
                                  
                                  141,420
                                  
                                  
                                  
                                  142,588Accumulated
      deficit
                                  
                                  
                                  (160,624
                                  )
                                  
                                  
                                  (151,281
                                  )Accumulated
      other comprehensive income (loss), net
                                  
                                  
                                  (36,312
                                  )
                                  
                                  
                                  (39,446
                                  )Total
      accumulated deficit
                                  
                                  
                                  (55,110
                                  )
                                  
                                  
                                  (47,733
                                  )Total
      liabilities, convertible preferred stock and accumulated
      deficit
                                  
                                  $
                                  225,204
                                  
                                  
                                  $
                                  237,132
 
 See
accompanying notes to the condensed consolidated financial
statements.


4





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidated Statements of Cash Flows


(Unaudited)


Three months ended(In thousands)
                  
                  April 5, 2009
                  
                  
                  March 30, 2008Operating
      ActivitiesLoss
      from continuing operations
                  
                  $
                  (7,235
                  )
                  
                  $
                  (1,954
                  )Income
      from discontinued operations
                  
                  
                  —
                  
                  
                  
                  6,146Net
      income (loss)
                  
                  
                  (7,235
                  )
                  
                  
                  4,192Adjustments
      to reconcile net income (loss) to net cash from operating
      activities:Depreciation
                  
                  
                  1,446
                  
                  
                  
                  1,625Amortization
                  
                  
                  778
                  
                  
                  
                  717Deferred
      income taxes
                  
                  
                  (336
                  )
                  
                  
                  (26
                  )Gain
      on sale of fixed assets
                  
                  
                  (273
                  )
                  
                  
                  —Gain
      on extinguishment of debt
                  
                  
                  —
                  
                  
                  
                  (600
                  )Non-controlling
      interest in Chinese subsidiary
                  
                  
                  —
                  
                  
                  
                  81Equity
      in earnings of unconsolidated subsidiary
                  
                  
                  (341
                  )
                  
                  
                  —Impairment
      of assets held for sale
                  
                  
                  —
                  
                  
                  
                  353Non-cash
      environmental, restructuring and other charges
                  
                  
                  110
                  
                  
                  
                  (5,534
                  )Stock
      compensation expense
                  
                  
                  85
                  
                  
                  
                  115Changes
      in operating assets and liabilities:Accounts
      receivable, net
                  
                  
                  (772
                  )
                  
                  
                  (22,796
                  )Inventories
                  
                  
                  6,564
                  
                  
                  
                  (12,352
                  )Income
      taxes
                  
                  
                  238
                  
                  
                  
                  105Prepaid
      expenses and other
                  
                  
                  (822
                  )
                  
                  
                  455Accounts
      payable
                  
                  
                  (7,790
                  )
                  
                  
                  16,450Accrued
      liabilities, including pension, postretirement benefit, and
      environmental
                  
                  
                  2,754
                  
                  
                  
                  1,195Net
      cash from continuing operating activities
                  
                  
                  (5,594
                  )
                  
                  
                  (22,166
                  )Net
      cash from discontinued operating activities
                  
                  
                  (29
                  )
                  
                  
                  7,964Net
      cash from operating activities
                  
                  
                  (5,623
                  )
                  
                  
                  (14,202
                  )Investing
      ActivitiesAdditions
      to property, plant and equipment
                  
                  
                  (1,356
                  )
                  
                  
                  (1,509
                  )Proceeds
      from sale of assets
                  
                  
                  273
                  
                  
                  
                  2,253Purchase
      of patents
                  
                  
                  (42
                  )
                  
                  
                  (226
                  )Proceeds
      from sale of interest in Chinese subsidiary
                  
                  
                  —
                  
                  
                  
                  9,500Change
      in restricted cash
                  
                  
                  25,741
                  
                  
                  
                  (5,465
                  )Net
      cash from continuing investing activities
                  
                  
                  24,616
                  
                  
                  
                  4,553Net
      cash from discontinued investing activities
                  
                  
                  1,200
                  
                  
                  
                  22,104Net
      cash from investing activities
                  
                  
                  25,816
                  
                  
                  
                  26,657Financing
      ActivitiesFinancing
      fees and expenses paid
                  
                  
                  (661
                  )
                  
                  
                  (1,597
                  )Payments
      under revolving credit facilities and other debt
                  
                  
                  (3
                  )
                  
                  
                  (300
                  )Borrowings
      from revolving credit facilities and other debt
                  
                  
                  1,325
                  
                  
                  
                  2Issuance
      of preferred stock
                  
                  
                  —
                  
                  
                  
                  14,194Purchase
      or repayment of senior notes
                  
                  
                  —
                  
                  
                  
                  (11,484
                  )Payment
      of dividends
                  
                  
                  —
                  
                  
                  
                  (1,063
                  )Net
      cash from financing activities
                  
                  
                  661
                  
                  
                  
                  (248
                  )Effect
      of exchange rate on cash and cash equivalents
                  
                  
                  (198
                  )
                  
                  
                  (74
                  )Net
      increase (decrease) in cash and cash equivalents
                  
                  
                  20,656
                  
                  
                  
                  12,133Cash
      and cash equivalents at beginning of period
                  
                  
                  33,537
                  
                  
                  
                  63,303Cash
      and cash equivalents at end of period
                  
                  $
                  54,193
                  
                  
                  $
                  75,436Supplemental
      disclosure of cash flow:Interest
      paid
                  
                  $
                  52
                  
                  
                  $
                  5,504Income
      taxes paid, net
                  
                  $
                  297
                  
                  
                  $
                  420
 
 See
accompanying notes to the condensed consolidated financial
statements.


5





Wolverine
Tube, Inc. and Subsidiaries


Notes
to Unaudited Condensed Consolidated Financial Statements





(1)
            Basis
      of Reporting for Interim Financial
Statements





The
accompanying condensed consolidated balance sheet as of December 31, 2008, which
has been derived from audited financial statements, and the unaudited interim
condensed consolidated financial statements include the accounts of Wolverine
Tube, Inc. and its subsidiaries, which are collectively referred to as
“Wolverine”,  the “Company”, “we”, “our” or “us”, unless the context
otherwise requires.  All significant intercompany transactions have
been eliminated in consolidation.





We have
prepared the audited condensed consolidated balance sheet as of December 31,
2008 and the unaudited interim condensed consolidated financial statements
included herein pursuant to the rules and regulations of the Securities and
Exchange Commission (“SEC”).  Certain information and footnote
disclosures normally included in statements prepared in accordance with
generally accepted accounting principles in the United States of America
(“GAAP”) have been omitted pursuant to such rules and regulations, although we
believe that the disclosures are adequate to make the information presented not
misleading.  These financial statements should be read in conjunction
with the financial statements and notes thereto included in our Annual Report on
Form 10-K for the year ended December 31, 2008.





The
accompanying unaudited interim condensed consolidated financial statements
presented herewith reflect all adjustments (consisting of only normal and
recurring adjustments) which, in the opinion of management, are necessary for a
fair presentation of the results of operations and cash flows for the three
month periods ended April 5, 2009 and March 30, 2008. The results for these
periods reflect certain operations as discontinued as a result of certain
facilities divestitures (see Note 5, Discontinued Operations). Our
internal operational reporting cycle (i.e. Sunday closest to quarter end) is
used for quarterly financial reporting. The results of operations for interim
periods are not necessarily indicative of results to be expected for an entire
year.





The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ materially
from those estimates.





The
Company’s financial statements have been presented on the basis that it is a
going concern, which assumes that the Company will realize its assets and
discharge its liabilities in the ordinary course of business.  These
financial statements do not include any adjustments to the amounts and
classification of assets and liabilities that may be necessary should the
Company be unable to continue as a going concern.





The
Company believes that its available cash and cash anticipated to be generated
through operations is expected to be adequate to fund the Company’s liquidity
requirements, although there can be no assurances that the Company will be able
to generate such cash. Additionally, the Company does not currently have in
effect a revolving credit agreement or other capital commitments to supplement
its existing cash and anticipated cash resources, if necessary, to meet its
liquidity requirements materially in excess of the Company’s current
expectations.  The uncertainty about the Company’s ability to achieve
its projected results, the absence of such credit or capital commitments and the
uncertainty about the future price of copper which has a substantial impact on
working capital raises substantial doubt about the Company’s ability to continue
as a going concern.  The Company expects to continue to actively
manage and optimize its cash balances and liquidity, working capital, operating
expenses and product profitability, although there can be no assurances the
Company will be able to do so.





The March
30, 2008 unaudited interim condensed consolidated financial statements and the
December 31, 2008 condensed consolidated balance sheet include reclassifications
from amounts previously presented on forms 10-Q and 10-Q(A), 10-K and
10-K(A).  The reclassifications relate to amounts included in
discontinued versus continuing operations, classifications of accrued dividends
from current to long-term and classification of certain amounts between
short-term and long-term debt.  Such reclassifications contained
herein had no impact, for any period, on previously reported, as amended, net
income (loss) or accumulated deficit.





Adoption
of New Accounting Policies





As of
April 5, 2009, the Company’s significant accounting policies, which are
described in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2008, have not materially changed  from December 31,
2008, except for the following:





On
January 1, 2009, the Company adopted the provisions of SFAS No. 161 (SFAS
161),Disclosures about
Derivative Instruments and Hedging Activities - an amendment of FASB Statement
No. 133 issued by the FASB in March 2008. This statement requires
enhanced disclosures about an entity's derivative and hedging activities and
thereby improving the transparency of financial reporting. Entities are required
to provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. The adoption of SFAS 161 did
not have a material impact on the Company’s Condensed Consolidated Financial
Statements.


6





In April
2008, the FASB issued FASB Staff Position (FSP) FAS 142-3 (FSP FAS 142-3), Determination of the Useful Life of
Intangible Assets. FSP FAS 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS 142. FSP FAS 142-3
is effective for fiscal years beginning after December 15, 2008. The
Company has evaluated the impact of adopting FSP FAS 142-3 and has found it does
not have a material impact on our results of operations, financial position or
cash flows.





In June
2008, the FASB’s Emerging Issues Task Force (EITF) reached a consensus on EITF
Issue No. 07-5 (EITF 07-5), Determining Whether an Instrument
(or Embedded Feature) is Indexed to an Entity’s Own Stock. This EITF
Issue provides guidance on the determination of whether such instruments are
classified in equity or as a derivative instrument and is effective for the
fiscal year beginning on January 1, 2009. The Company has evaluated the impact
of adopting EITF 07-5 and has found it does not have a material impact on our
results of operations, financial position or cash flows.





In
November 2008, the FASB’s EITF reached a consensus on EITF Issue No. 08-6
(EITF 08-6), Equity Method
Investment Accounting Considerations.  EITF 08-6 continues to
follow the accounting for the initial carrying value of equity method
investments in APB Opinion No. 18, The Equity Method of Accounting for
Investments in Common Stock, which is based on a cost accumulation model
and generally excludes contingent consideration. EITF 08-6 also specifies that
other-than-temporary impairment testing by the investor should be performed at
the investment level and that a separate impairment assessment of the underlying
assets is not required.  An impairment charge by the investee should
result in an adjustment of the investor’s basis of the impaired asset for the
investor’s pro-rata share of such impairment. In addition, EITF 08-6 reached a
consensus on how to account for an issuance of shares by an investee that
reduces the investor’s ownership share of the investee. An investor should
account for such transactions as if it had sold a proportionate share of its
investment with any gains or losses recorded through earnings. EITF 08-6 also
addresses the accounting for a change in an investment from the equity method to
the cost method after adoption of SFAS No. 160. EITF 08-6 affirms the existing
guidance in APB 18, which requires cessation of the equity method of accounting
and application of FASB Statement No. 115, Accounting for Certain Investments
in Debt and Equity Securities, or the cost method under APB 18, as
appropriate.  EITF 08-6 is effective for transactions occurring on or
after December 15, 2008. The Company has evaluated the impact of adopting EITF
08-6 and has found it does not have a material impact on our results of
operations, financial position or cash flows.





In
December 2008, the FASB issued FASB Staff Position (FSP) FAS 132(R)-1 (FSP FAS
132(R)-1), Employers’
Disclosures about Postretirement Benefit Plan Assets. FSP FAS 132(R)-1
provides guidance on an employer’s disclosures about plan assets of a defined
benefit pension or other postretirement plan. FSP FAS 132(R)-1 also includes a
technical amendment to FASB Statement No. 132(R), effective immediately, which
requires nonpublic entities to disclose net periodic benefit cost for each
annual period for which a statement of income is presented. The Company has
disclosed net periodic benefit cost in Note 10. The disclosures about plan
assets required by FSP FAS 132(R)-1 must be provided for fiscal years ending
after December 15, 2009. The Company has evaluated the impact of adopting
FSP FAS 132(R)-1 and has found it does not have a material impact on our results
of operations, financial position or cash flows.





In April
2009, the FASB issued FASB Staff Position (FSP) FAS 107-1 and APB 28-1 (FSP FAS
107-1), Interim Disclosures
about Fair Value of Financial Instruments.  FSP FAS 107-1
amended Statement of Financial Accounting Standards No. 107, Disclosures about Fair Value of
Financial Instruments, and APB Opinion No. 28, Interim Financial Reporting,to require disclosures about the fair value of financial instruments in
interim as well as in annual financial statements.  FSP FAS 107-1 is
effective for periods ending after June 15, 2009.  The Company has
evaluated the impact of adopting FASP FAS 107-1 and has found it does not have a
material impact on our results of operations, financial position or cash
flows.





In May
2009, the FASB issued SFAS No. 165 (SFAS 165), Subsequent Events. This
standard establishes general standards of accounting for and disclosure events
that occur after the balance sheet date but before financial statements are
issued.  SFAS 165 is effective for periods beginning after June 15,
2009.  The Company has evaluated the impact of adopting SFAS 165 and
has found it does not have a material impact on our results of operations,
financial position or cash flows.





In June
2009, the FASB issued SFAS No. 168, The “FASB Accounting Standards
Codification” and the Hierarchy of Generally Accepted Accounting Principles
(“GAAP”).This standard replaces SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles,and will become the source of authoritative,
nongovernmental GAAP, except for rules and interpretive releases of the
Securities and Exchange Commission (“SEC”), which are sources of authoritative
GAAP for SEC registrants. All other nongrandfathered, non-SEC accounting
literature not included in the Codification will become nonauthoritative. This
standard is effective for financial statements for interim or annual reporting
periods ending after September 15, 2009.  The Company will begin to
use the new guidelines and numbering system prescribed by the Codification when
referring to GAAP in its fiscal 2009 annual report.  As the
Codification was not intended to change or alter existing GAAP, it will not have
any impact on the Company’s consolidated financial results or financial
position.


7





(2)
            Recapitalization
      Plan





On
February 1, 2007, we announced a recapitalization plan which provided
significant equity proceeds to Wolverine. We completed the first phase of this
recapitalization plan, a private placement of 50,000 shares of Series A
Convertible Preferred Stock, for $50.0 million, purchased by The Alpine Group,
Inc. (“Alpine”) and a fund managed by Plainfield Asset Management LLC
(“Plainfield”) on February 16, 2007, pursuant to a Preferred Stock Purchase
Agreement (the “Preferred Stock Purchase Agreement”).  Pursuant to our
recapitalization plan, in August 2007, we commenced a common stock rights
offering which closed on October 29, 2007. Our stockholders purchased
25,444,592 shares of common stock in the rights offering, resulting in gross
proceeds of approximately $28.0 million. Additionally, under the terms of the
call option described in the Preferred Stock Purchase Agreement, Alpine
purchased an additional 4,494 shares of Series A Convertible Preferred Stock on
January 25, 2008 for $4.5 million in order to maintain the fully diluted
ownership by Alpine and Plainfield in Wolverine at 55.0%.





We also
pursued a financial restructuring plan with respect to our 10.5% and 7.375%
Senior Notes, our secured revolving credit facility and our receivables sale
facility. In light of market conditions which negatively affected our ability to
execute such a comprehensive refinancing strategy, during 2008, we took certain
actions to be in a position to retire the 7.375% Senior Notes on their maturity
date of August 1, 2008. We extended the maturity of our secured revolving credit
facility and our receivables sale facility to February 19, 2009.  In
February 2008, we sold substantially all of the assets of our Small Tube
Products (“STP”) business for net proceeds of $22.1 million plus a working
capital payment to us of approximately $2.8 million. In March 2008 we sold 30.0%
of our Wolverine Tube Shanghai Co., Ltd (“WTS”) subsidiary for $9.5 million. On
March 20, 2008, Plainfield refinanced $38.3 million of the 7.375% Senior Notes
held by it by exchanging them for 10.5% Senior Exchange Notes due March 28, 2009
and Alpine purchased 10,000 shares of our Series B Convertible Preferred Stock
for $10.0 million, under terms substantially similar to the Series A Convertible
Preferred Stock. On April 21, 2008 we sold our Booneville, Mississippi facility
which was closed in January 2008, for $1.4 million.  In July 2008, we
sold our London, Ontario wholesale and commercial tube business for net proceeds
of approximately $41.2 million.  These actions provided the liquidity
required to repurchase or repay the outstanding 7.375% Senior Notes on or before
their maturity in August 2008. On February 29, 2008, we repurchased $12.0
million in face amount of our 7.375% Senior Notes at a discount below the face
value of the notes, and on April 8, 2008 we repurchased an additional $25.0
million in face amount of our 7.375% Senior Notes, also at a discount below the
face value of the notes, leaving $61.4 million in face amount of our 7.375%
Senior Notes, which we paid at maturity on August 1, 2008.  On
September 15, 2008 we sold an additional 20% of our WTS subsidiary, raising
$10.1 million.





On
February 26, 2009, we announced the commencement of an offer (the “Exchange
Offer”) to each of the holders of our 10.5% Senior Exchange Notes and our 10.5%
Senior Notes due March 28, 2009 and April 1, 2009, respectively, to exchange
these notes for new notes in order to refinance those maturities.  The
Exchange Offer was successfully consummated on April 28, 2009.  $83.3
million of the 10.5% Senior Notes and $38.3 million of the 10.5% Senior Exchange
Notes were exchanged for new 15% Senior Secured Notes due March 2012 (the
“Senior Secured Notes”). The Senior Secured Notes mature in a lump sum on March
31, 2012. The remaining $16.1 million of 10.5% Senior Notes were repaid on April
28, 2009.  See Note 23, Subsequent Events, for a
description of the Exchange Offer and a description of the new Senior Secured
Notes. After completing this refinancing, the Company had domestic unrestricted
cash balances of approximately $15.0 million on April 28, 2009.





(3)
            Restricted
      Cash





Our
liquidity is affected by restricted cash balances, which are included in current
assets and are not available for general corporate use.  Restricted
cash as of April 5, 2009 and December 31, 2008 was $12.0 million and $37.7
million, respectively.  Restricted cash at April 5, 2009 included $5.7
million related to deposits for margin calls on our metal hedge programs, $5.8
million of deposits to cover our insurance reserves and $0.5 million of other
restricted cash deposits.  Restricted cash at December 31, 2008
included $16.9 million related to deposits for margin calls on our metal hedge
programs, $5.9 million on deposit to cover our insurance reserves, $14.0 million
of deposits to cover our silver consignment facility and $0.9 million of other
restricted cash deposits. The silver consignment facility was terminated on
February 19, 2009 (see Note 8).





(4)
            Investment
      in Unconsolidated Subsidiary





On March
14, 2008, the Company sold a 30.0% indirect equity interest in Wolverine Tube
Shanghai Co., Ltd. (“WTS”) to The Wieland Group (“Wieland”) for $9.5 million.
The agreement provided to Wieland an option to purchase between April 2011 and
April 2013 an additional 20.0% equity interest in WTS. On September 15, 2008,
the Company and Wieland entered into an agreement, which granted to Wieland the
right to immediately exercise the option to purchase the additional 20.0% equity
interest in WTS for a purchase price of $10.1 million. Following the completion
of the exercise of the 20.0% purchase option, Wieland has a 50.0% indirect
ownership in the equity of WTS. From September 15, 2008, the results of WTS are
accounted for using the equity method because neither party controls WTS. The
payment of the $10.1 million is subject to a post-closing adjustment at the end
of the first fiscal quarter of WTS in 2011 based upon the financial performance
of WTS during the period beginning March 31, 2008 through the end of the first
fiscal quarter of 2011. In no event will the Company be required to make a
post-closing adjustment payment in excess of $2.5 million to Wieland nor will
Wieland be required to make a post-closing adjustment payment in excess of $7.5
million to the Company. The $2.5 million floor has been recorded in accrued
liabilities in the Condensed Consolidated Balance Sheets. The total gain on the
sale of the 50.0% interest was $12.3 million.


8





At
September 15, 2008, the option to purchase the additional 20.0% equity interest
in WTS had a non-cash embedded derivative value of $1.3 million. With the
exercise of the purchase option, the embedded derivative has been eliminated.
Pursuant to the agreements to purchase the stock, WTS applied for approval under
Chinese law to add directors to the Board of WTS and change certain voting and
other corporate governance matters of WTS. The parties obtained these approvals
on June 29, 2009.





For the
quarter ended April 5, 2009, we recorded $0.3 million in equity earnings from
our investment in this unconsolidated subsidiary.





(5)
            Discontinued
      Operations





On
February 29, 2008, we sold substantially all of the assets and liabilities of
our STP business located in Altoona, Pennsylvania. On November 6, 2008, the
Company received a working capital settlement in the Company’s favor of
approximately $2.8 million. Operating results associated with the STP business
for the quarter ended March 30, 2008 are presented as a discontinued
operation.





On July
8, 2008, we closed on the sale of our Wolverine Tube Canada, Inc. (“WTCI”)
subsidiary located in London, Ontario, Canada. The subsidiary produced wholesale
and commercial products for sale in the North American markets. In the
transaction, we sold 100% of the issued and outstanding share capital of our
wholly owned subsidiary for $41.2 million. In addition, certain currency
translation adjustments aggregating approximately $3.6 million included in
accumulated other comprehensive income (loss) were reclassified to earnings.
Additionally, we sold certain accounts receivable of Wolverine in the amount of
$2.4 million, and we received $1.8 million owed by the Canadian subsidiary to
Wolverine for inventory purchased prior to the sale. Exiting the WTCI business
constitutes an exit of the wholesale business for
Wolverine.  Operating results associated with the WTCI business for
the period are presented as a discontinued operation.





See the
table below for the net income results for the three months ended March 30, 2008
of the discontinued operations:





Three months ended(In thousands)
                        
                        March 30, 2008Net
      Sales
                        
                        $
                        71,521Income
      (loss) before income taxes
                        
                        
                        6,146Income
      taxes
                        
                        
                        —Net
      income (loss)
                        
                        $
                        6,146Net
      income (loss) per common share - Basic
                        
                        $
                        0.06Net
      income (loss) per common share - Diluted
                        
                        $
                        0.06





For the
three months ended March 30, 2008, STP and WTCI were included in the
consolidated tax provision of Wolverine.  As a result of STP’s and
WTCI’s accumulated net operating losses, which we believed were more likely than
not, unrecoverable, and after providing appropriate valuation allowances for the
unrecoverable amounts, we recorded no income tax expense or benefit for
discontinued operations during these periods.  See Note 13, Income Taxes.





(6)
            Inventories





Inventories
are as follows:




(In thousands)
                        
                        April 5, 2009
                        
                        
                        December 31, 2008Finished
      products
                        
                        $
                        23,162
                        
                        
                        $
                        27,990Work-in-process
                        
                        
                        11,548
                        
                        
                        
                        10,646Raw
      materials
                        
                        
                        6,691
                        
                        
                        
                        9,262Supplies
                        
                        
                        4,865
                        
                        
                        
                        5,386Total
                        
                        $
                        46,266
                        
                        
                        $
                        53,284




Included
in finished products are consignment inventories of $9.9 million at April 5,
2009 and $12.3 million at December 31, 2008. These consignments are at various
locations throughout the United States.


9





(7)
            Assets
      Held for Sale





As of
December 31, 2008, we had recorded based on the estimated appraisal fair value
approximately $3.7 million in assets held for sale related to the property in
Decatur, Alabama. The Decatur, Alabama property is in an industrial area in
north central Alabama. Issues with the Decatur facility include its size, age,
and potential environmental issues depending on the use of the property. Its
location on the Tennessee River in water deep enough for mooring or docking
commercial or large private vessels has appeal to both commercial and industrial
users. We have estimated the fair value of the land net of the cost of
demolition and removal of the buildings and building material on the site. We
continue to utilize a portion of the Decatur facility for product development
and various sales and administrative functions.





During
the first quarter of 2009 the land was reclassified from assets held for sale to
property, plant and equipment due to the fact the Company has been unable to
sell the land. The land is currently on the market and the Company is actively
soliciting buyers.





(8)
            Financing
      Arrangements and Debt





Long-term
debt consists of the following:




(In thousands)
                      
                      April 5, 2009
                      
                      
                      December 31, 2008Senior
      Exchange Notes, 10.5%, due March 2009
                      
                      $
                      38,300
                      
                      
                      $
                      38,300Senior
      Notes, 10.5%, due April 2009
                      
                      
                      99,400
                      
                      
                      
                      99,400Discount
      on 10.5% Senior Notes and 10.5% Senior ExchangeNotes
                      
                      
                      —
                      
                      
                      
                      (44
                      )Other
      foreign subsidiaries
                      
                      
                      1,343
                      
                      
                      
                      —Capitalized
      leases
                      
                      
                      11
                      
                      
                      
                      14Total
      debt
                      
                      
                      139,054
                      
                      
                      
                      137,670Less
      short-term borrowings
                      
                      
                      (17,496
                      )
                      
                      
                      (16,112
                      )Total
      long-term debt
                      
                      $
                      121,558
                      
                      
                      $
                      121,558





On April
28, 2009, we refinanced the 10.5% Senior Notes and the 10.5% Senior Exchange
Notes (the “Existing Notes”) by exchanging $121.6 million of these notes for
Senior Secured Notes for an exchange fee of 3% of the principal balance of the
exchanged notes ($3.6 million).  The remaining $16.1 million of
Existing Notes were paid in full on April 28, 2009.





Liquidity
Facilities





At April
5, 2009, we had no domestic credit facilities in place as all of such facilities
expired or were terminated in February 2009. We believe cash on hand and cash
generated from operations will be sufficient to meet the Company’s financial
obligations in the short term; however, there can be no assurance that this will
be the case.  The terms and conditions of the Company’s Senior Secured
Notes have a provision that would allow the Company to secure credit facilities
under certain conditions prescribed in the Indentures thereto.





As of
December 31, 2008, our domestic liquidity facilities consisted of a receivables
sale facility of up to $35.0 million and a secured revolving credit facility of
up to $19.9 million. In addition, we maintained a silver consignment facility
under which we were able to request consignments of silver with an aggregate
value up to the lesser of $16.0 million or 85.0% of the aggregate undrawn face
amount of letters of credit required to be provided to the facility
provider.





Secured
Revolving Credit Facility





On
April 28, 2005, we entered into an amended and restated secured revolving
credit facility with Wachovia Bank. On December 9, 2008 we reduced the maximum
aggregate borrowing availability to $19.9 million.  The $19.9 million
was fully utilized by various Letters of Credit supporting our silver
consignment facility and our insurance programs.  The $19.9 million of
Letters of Credit were fully cash collateralized.  This amount is
included in our restricted cash balance in our December 31, 2008 Condensed
Consolidated Balance Sheet.   This facility matured on February
19, 2009.





Receivables
Sale Facility





On
April 28, 2005, we established a Receivables Sale Facility.  The
limit on the facility was adjusted from time to time and at December 31, 2008
was $35.0 million.  In accordance with the provisions of SFAS 140,
Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, we
included in accounts receivable in our consolidated balance sheets the portion
of receivables sold to our special purpose entity receivables finance
subsidiary, which have not been resold to the participating banks in the
Receivables Sale Facility.  Since there were no outstanding advances
under the Receivables Sale Facility at December 31, 2008, the accounts
receivable in the Condensed Consolidated Balance Sheet was not
impacted.  Availability under our Receivables Sale Facility as of
December 31, 2008 was $12.4 million.  The Receivables Sale Facility
was terminated on February 19, 2009.


10





Silver
Consignment Facility





On
February 16, 2007 we entered into a silver consignment facility with HSBC
Bank USA N.A. (HSBC). Under the consignment facility as of December 31, 2008, we
were able to from time to time request from HSBC, and HSBC could in its sole
discretion provide, consignments of silver with an aggregate value of up to the
lesser of (a) $16 million or (b) 85% of the aggregate undrawn face
amount of letters of credit required to be provided to HSBC pursuant to the
consignment facility. The consignment of silver to us by HSBC under the
consignment facility was conditioned on HSBC’s prior receipt and the continued
effectiveness of letters of credit in an aggregate amount such that the value of
all outstanding consigned silver under the consignment facility was not more
than 85% of the aggregate undrawn face amount of the letters of credit. The
silver consignment facility terminated on February 19, 2009 and HSBC drew on the
letters of credit to cover the cost of the consigned silver that we
simultaneously purchased. The balance of the letters of credit was refunded to
us by Wachovia.





Under our
silver consignment and forward contracts facility in place at December 31, 2008,
we had $10.3 million of silver in our inventory under the silver consignment
facility, with a corresponding amount included in accounts payable and $2.1
million committed to under the forward contracts facility.





Other
Credit Facilities





We have a
credit facility with a Netherlands bank, payable on demand and providing for
available credit of up to 2.9 million Euros or approximately $3.7 million.
At April 5, 2009 and December 31, 2008, we had no outstanding borrowings under
this facility.  This credit facility is secured by certain accounts
receivables and inventory.  In addition, Wolverine Tube Europe B.V.
has granted the bank a guarantee regarding a property lease agreement in the
amount of 29.8 thousand Euros.





We have a
line of credit with a Portuguese bank which provides available credit of up to
1.0 million Euros or approximately $1.3 million.  Borrowings under
this facility were $1.3 million and $0.0 million at April 5, 2009 and December
31, 2008, respectively. This line of credit expired on August 1, 2009 and we are
in the process of renewing the line of credit. The interest rate is calculated
as the EURIBOR (European Interbank Offer Rate) at the end of the month plus a
spread of 1.5%.  The interest rate as of April 5, 2009 was
3.128%.





10.5%
Senior Notes and 10.5% Senior Exchange Notes





The 10.5%
Senior Notes were issued on March 27, 2002 and the 10.5% Senior Exchange
Notes were issued on March 20, 2008.  On February 26, 2009, we
announced the commencement of an Exchange Offer to each of the holders of our
10.5% Senior Exchange Notes and our 10.5% Senior Notes due March 28, 2009 and
April 1, 2009, respectively, to exchange these notes for new notes in order to
refinance those maturities.  The Exchange Offer was successfully
consummated on April 28, 2009.  $83.3 million of the 10.5% Senior
Notes and $38.3 million of the 10.5% Senior Exchange Notes were exchanged for
Senior Secured Notes due 2012.  The remaining $16.1 million of 10.5%
Senior Notes were paid to the note holders on April 28, 2009.  See
Note 23, Subsequent
Events, for a description of the Exchange Offer and a description of the
new Senior Secured Notes.





(9)
            Interest
      Expense





The
following table summarizes interest expense, net:





Three months ended(In
      thousands)
                                  
                                  April 5, 2009
                                  
                                  
                                  March 30, 2008Interest
      expense - bonds and other
                                  
                                  $
                                  3,714
                                  
                                  
                                  $
                                  5,603Interest
      income
                                  
                                  
                                  (171
                                  )
                                  
                                  
                                  (650
                                  )Capitalized
      interest
                                  
                                  
                                  (12
                                  )
                                  
                                  
                                  (12
                                  )Interest
      expense, net
                                  
                                  $
                                  3,531
                                  
                                  
                                  $
                                  4,941





(10)
            Pension
      Plans





Defined
Contribution Plans





We have
401(k) plans covering substantially all of our U.S. employees.  We
recorded expense with respect to these plans of $0.4 million and $0.8 million
for the three months ended April 5, 2009 and March 30, 2008,
respectively.  Contributions made under our defined contribution plans
may include the following components: (i) a match, at our discretion, of
employee salaries contributed to the plans; (ii) a contribution amount equal to
3% of an employee’s annual salary; (iii) a “gain share” component dependent upon
us attaining certain financial performance targets; and (iv) a transition
provision, providing for contributions for five years, based upon an employee’s
age and years of service.


11


U.S.
Qualified Retirement Plan





The
following table summarizes the components of net periodic pension cost (benefit)
for the U.S. Qualified Retirement Plan, which was frozen on February 28, 2006,
for the three months ended April 5, 2009 and March 30, 2008:





Three months ended(In thousands)
                    
                    April 5, 2009
                    
                    
                    March 30, 2008Interest
      Cost
                    
                    $
                    2,412
                    
                    
                    $
                    2,438Expected
      return on plan assets
                    
                    
                    (1,806
                    )
                    
                    
                    (2,734
                    )Amortization
      of net actuarial loss
                    
                    
                    1,002
                    
                    
                    
                    —Net
      periodic pension cost (benefit)
                    
                    $
                    1,608
                    
                    
                    $
                    (296
                    )




U.S.
Non-qualified Retirement Plan





The
following table summarizes the components of net periodic pension cost for the
U.S. Non-Qualified Retirement Plan for the three months ended April 5, 2009 and
March 30, 2008:





Three months ended(In thousands)
                        
                        April 5, 2009
                        
                        
                        March 30, 2008Interest
      Cost
                        
                        $
                        17
                        
                        
                        $
                        17Net
      periodic pension cost
                        
                        $
                        17
                        
                        
                        $
                        17





Postretirement
Benefit Obligation





During
the fiscal year 2009, we expect the total U.S. and Canadian combined
postretirement benefit costs to be $0.6 million.  The following table
summarizes the components of the net periodic costs for the three months ended
April 5, 2009 and March 30, 2008:





Three months ended(In thousands)
                            
                            April 5, 2009
                            
                            
                            March 30, 2008Service
      Cost
                            
                            $
                            17
                            
                            
                            $
                            77Interest
      Cost
                            
                            
                            68
                            
                            
                            
                            257Amortization
      of prior service cost
                            
                            
                            (7
                            )
                            
                            
                            (8
                            )Amortization
      of net actuarial gain
                            
                            
                            (220
                            )
                            
                            
                            (159
                            )Curtailment
      gain (1)
                            
                            
                            —
                            
                            
                            
                            (410
                            )Net
      periodic cost (benefit)
                            
                            $
                            (142
                            )
                            
                            $
                            (243
                            )




(1)
            On
      February 29, 2008 we sold substantially all assets and certain liabilities
      of our STP business.  On that date, employees of the STP
      business accepted offers of employment with the acquiring
      company.  Accordingly, those employees were no longer entitled
      to receive these benefits and a curtailment gain was recorded as noted
      above.





(11)
            Commitments
      and Contingencies





We are
subject to extensive environmental regulations imposed by federal, state,
provincial and local authorities in the U.S., Canada, China, Portugal and Mexico
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 responsibilities.  There were no significant
changes to report from prior periods.





We have
accrued undiscounted estimated environmental remediation costs of $9.5 million
at April 5, 2009, consisting of $8.6 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 April 5, 2009 if these
environmental matters are not resolved as anticipated.


12





In
February 2009, the Pension Benefit Guaranty Corporation (the “PBGC”) advised the
Company that it may be required to accelerate funding of certain pension
related obligations as a result of the closure and/or sale of certain
operations of the Company.  The PBGC has not made a final
determination of the amount or timing of any payments.  Since February
2009, the Company and the PBGC have been engaged in discussions regarding this
matter. Based upon these discussions and in consultation with special counsel,
the Company believes it is reasonably possible that the matter will ultimately
be resolved through an agreement with the PBGC to fund an amount to be
determined and paid in the future.  The Company believes any such
agreement would result in accelerated funding of the already accrued pension
obligations. Accordingly, no additional pension accrual is required at April 5,
2009 or December 31, 2008 since the amount and timing of additional
contributions, if any, cannot be reasonably estimated.





(12)
            Litigation





Our
facilities and operations are subject to extensive environmental laws and
regulations, and we are currently involved in various proceedings relating to
environmental matters.  We are not involved in any legal proceedings
that we believe could have a material adverse effect upon our business,
operating results or financial condition.





(13)
            Income
      Taxes





As of
April 5, 2009, Wolverine was subject to examination in the U.S. federal tax
jurisdiction and various states for the 2004-2008 tax years. Wolverine was also
subject to examination in various foreign jurisdictions for the 2002-2008 tax
years. We believe appropriate provisions for all outstanding issues have been
made for all jurisdictions and all open years.




For the
first quarter of 2009, tax expense was $0.4 million attributable to taxable
income at our foreign locations.  The U.S. tax benefit was totally
offset by an increase in the valuation allowance attributable to the Net
Operating Losses (“NOLs”).  For the first quarter of 2008, tax expense
was $1.1 million in our U.S. and Canadian locations, however, tax expense for
those locations was totally offset by the reduction in the valuation allowance
attributable to the NOLs in those tax jurisdictions. Our foreign locations
recorded a net tax expense of $0.6 million. Further, we recorded a $0.5 million
tax expense associated with the capital gain recognized on the sale of
non-controlling in our Shanghai operation. The effective tax rate for the first
quarter of 2008 was 26.8%.





(14)
            Industry
      Segments




For
internal purposes, we prepare business unit operating statements (operating
segment level), which include net sales, metal costs, production costs,
operating income, and Earnings Before Interest Taxes Depreciation Amortization
(“EBITDA”) for one operating segment (or business unit): Wolverine Tube
Consolidated. Historically, we have reviewed the financial operations of our
business from a wholesale and commercial standpoint. In the first quarter of
2008, we closed our facility in Decatur, Alabama, which included substantially
all of our wholesale business. In July 2008 we sold the London, Canada facility,
which produced the remaining amount of our wholesale products and dissolved the
wholesale business unit at that time.  The wholesale business segment
results were previously reported within our wholesale segment reporting group.
The related revenue and expenses of the wholesale segment were at one time
material to our consolidated results, and this business unit was dissolved
rather than being merged into another business unit. Accordingly, we have
removed the historical results for the wholesale segment and its results for the
three months ended March 30, 2008 are classified as discontinued operations. In
addition, no goodwill was allocated to this business unit and no intangible
assets were on the books prior to the dissolution of the business unit.
Accordingly, there was no related write-off of goodwill or write-down of
intangible assets as a result of the dissolution of this business unit. With the
elimination of our wholesale products segment, the Company now has only one
business segment, commercial products.




(15)
            Comprehensive
      Income (Loss)





The
following table summarizes comprehensive income (loss):





Three months ended(In thousands)
                          
                          April 5, 2009
                          
                          
                          March 30, 2008Net
      income (loss)
                          
                          $
                          (7,235
                          )
                          
                          $
                          4,192Translation
      adjustment for financial statements denominated in a foreign
      currency
                          
                          
                          (1,187
                          )
                          
                          
                          2,344Unrealized
      gain (loss) on cash flow hedges
                          
                          
                          3,544
                          
                          
                          
                          (100
                          )Recognized
      gain (loss) related to pension and post-retirement benefit
      plans
                          
                          
                          782
                          
                          
                          
                          (69
                          )Comprehensive
      income (loss)
                          
                          $
                          (4,096
                          )
                          
                          $
                          6,367
  13





(16)
            Earnings
      (Loss) Per Share





For the
three months ended April 5, 2009 and March 30, 2008, we accounted for earnings
(loss) per share (“EPS”) in accordance with EITF Issue No. 03-6,Participating Securities and the
Two-Class Method under FASB Statement 128 (“EITF 03-6”), which
established standards regarding the computation of earnings (loss) per share by
companies that have securities other than common stock that contractually
entitle the holder to participate in dividends and earnings of the
company.  EITF 03-6 requires earnings available to common stockholders
for the period, after deduction of preferred stock dividends, be allocated
between the common and preferred stockholders based on their respective rights
to receive dividends.  Basic earnings (loss) per share is then
calculated by dividing the net income (loss) allocable to common stockholders by
the weighted average number of shares outstanding.  EITF 03-6 does not
require the presentation of basic and diluted earnings (loss) per share for
securities other than common stock.  Therefore, the following earnings
(loss) per share amounts only pertain to common stock.





Under the
guidance of EITF 03-6, diluted earnings (loss) per share is calculated by
dividing income (loss) allocable to common stockholders by the weighted average
common shares outstanding plus potential dilutive common stock such as stock
options, unvested restricted stock and preferred stock.  To the extent
that stock options, unvested restricted stock, and preferred stock are
anti-dilutive, they are excluded from the calculation of diluted earnings (loss)
per share in accordance with SFAS No. 128, Earnings Per Share(“SFAS
128”). For the three month periods ended April 5, 2009 and March 30, 2008, all
such potential common stock is anti-dilutive and as such there is no difference
between basic and diluted EPS.





The
calculation of net income (loss) per share for the three month periods ended
April 5, 2009 and March 30, 2008 is presented below:


14


Three months ended(In thousands except per share amounts)
                                
                                April 5, 2009
                                
                                
                                March 30,2008Basic
      Earnings (Loss) Per ShareNet
      income (loss)
                                
                                $
                                (7,235
                                )
                                
                                $
                                4,192Less:
      accretion of convertible preferred stock
                                
                                
                                1,255
                                
                                
                                
                                1,255Less:
      preferred stock dividends
                                
                                
                                2,108
                                
                                
                                
                                1,191Net
      income (loss) applicable to common stockholders
                                
                                $
                                (10,598
                                )
                                
                                $
                                1,746Income
      from discontinued operations
                                
                                
                                —
                                
                                
                                
                                6,146Net
      (loss) from continuing operations
                                
                                $
                                (10,598
                                )
                                
                                $
                                (4,400
                                )Amount
      allocable to common stockholders from continuing operations
      (1)
                                
                                
                                100
                                %
                                
                                
                                100
                                %Amount
      allocable to common stockholders from discontinued operations
      (1)
                                
                                
                                0
                                %
                                
                                
                                41
                                %Net
      loss from continuing operations allocated to common
      stockholders
                                
                                $
                                (10,598
                                )
                                
                                $
                                (4,400
                                )Net
      income (loss) from discontinued operations allocable to common
      stockholders
                                
                                $
                                —
                                
                                
                                $
                                2,515Basic
      weighted average number of common shares (2)
                                
                                
                                40,624
                                
                                
                                
                                40,624Basic
      income (loss) per share – Two-class MethodContinuing
      operations
                                
                                $
                                (0.26
                                )
                                
                                $
                                (0.11
                                )Discontinued
      operations (1)
                                
                                
                                —
                                
                                
                                
                                0.06Net
      loss per common share
                                
                                $
                                (0.26
                                )
                                
                                $
                                (0.05
                                )Diluted
      Earnings (Loss) Per ShareNet
      income (loss) available to common stockholders
                                
                                $
                                (10,598
                                )
                                
                                $
                                1,746Plus:
      accretion of convertible preferred stock
                                
                                
                                1,255
                                
                                
                                
                                1,255Plus:
      preferred stock dividends
                                
                                
                                2,108
                                
                                
                                
                                1,191Income
      (loss) available to common stockholders in addition to assumed
      conversions
                                
                                $
                                (7,235
                                )
                                
                                $
                                4,192Income
      (loss) from discontinued operations
                                
                                
                                —
                                
                                
                                
                                6,146Net
      loss from continuing operations available to common stockholders in
      addition toassumed
      conversions
                                
                                $
                                (7,235
                                )
                                
                                $
                                (1,954
                                )Amount
      allocable to common stockholders (1)
                                
                                
                                100
                                %
                                
                                
                                100
                                %Amount
      allocable to common stockholders from discontinued operations
      (1)
                                
                                
                                0
                                %
                                
                                
                                41
                                %Net
      loss from continuing operations allocable to common
      stockholders
                                
                                $
                                (10,598
                                )
                                
                                $
                                (4,400
                                )Net
      income (loss) from discontinued operations allocable to common
      stockholders
                                
                                $
                                —
                                
                                
                                $
                                2,515Diluted
      weighted average number of common shares (2)
                                
                                
                                40,624
                                
                                
                                
                                40,624Diluted
      income (loss) per share – Two-class MethodContinuing
      operations
                                
                                $
                                (0.26
                                )
                                
                                $
                                (0.11
                                )Discontinued
      operations
                                
                                
                                —
                                
                                
                                
                                0.06Net
      loss per common share
                                
                                $
                                (0.26
                                )
                                
                                $
                                (0.05
                                )




(1)
Amount allocable to common stockholders is calculated as the weighted average
number of common shares outstanding divided by the sum of common and preferred
shares outstanding for the three months ended April 5, 2009 and March 30,
2008.  In computing basic EPS using the two-class method, we have not
allocated the loss available to common stockholders for the three months ended
April 5, 2009 and March 30, 2008 between common and preferred stockholders since
the preferred stockholders do not have a contractual obligation to share in the
net losses.
  (2) Due
to their antidilutive effect, the following potential common shares have been
excluded from the computation of diluted loss per share as of April 5, 2009 and
March 30, 2008: 13.9 million and 14.1 million, respectively of stock options;
49.5 million shares of Series A Convertible Preferred Stock for each period; and
9.1 million of Series B Convertible Preferred Stock for each
period.  Also excluded from the computation of diluted loss per share
as of April 5, 2009 are restricted share awards of 40,000.


(17)
            Stock-Based
      Compensation Plans




At April
5, 2009, we had stock-based outside director, employee and non-employee
compensation plans.  Valuation of the stock based awards is calculated
in accordance with Statement of Financial Accounting Standards 123(R)Share-Based
Payment (“SFAS123(R)”). The amount of compensation expense
recorded in the three months ended April 5, 2009 and March 30, 2008 is $0.1
million and $0.8 million, respectively. The amount remaining to be expensed
through the end of the third quarter of 2013 is $0.4 million.  There
have been no grants, employee or non-employee, issued during
2009.


15





(18)
            Restructuring
      and Other Charges





During
the three months ended April 5, 2009 we continued to recognize expense
associated with the closure of our Booneville, Mississippi facility and the
significant downsizing of our Decatur, Alabama facility, as well as severance
charges in connection with our continued SG&A restructuring
effort.  During the first quarter of 2009, in order to answer economic
pressures and to remain competitive in certain markets, we reduced headcount and
realigned operations at our Monterrey, Mexico facility.





We
recognized an expense during the three months ended April 5, 2009 associated
with restructuring activities before tax totaling $0.8 million.





The
following sets forth the major types of costs associated with our active
restructuring activities:


Booneville,
Mississippi Closing
 
 CumulativeThree months ended
                    
                    
                    incurred through(In thousands)
                    
                    April 5, 2009
                    
                    
                    April 5, 2009Major
      Type CostsImpair
      and liquidate current assets
                    
                    $
                    —
                    
                    
                    $
                    915Employee
      related costs
                    
                    
                    —
                    
                    
                    
                    156Post
      closing cost
                    
                    
                    30
                    
                    
                    
                    1,625Fixed
      asset impairment
                    
                    
                    —
                    
                    
                    
                    3,049Total
                    
                    $
                    30
                    
                    
                    $
                    5,745
 
 Decatur,
Alabama Reduction
 
 CumulativeThree months ended
                    
                    
                    incurred through(In thousands)
                    
                    April 5, 2009
                    
                    
                    April 5, 2009Major
      Type CostsImpair
      and liquidate current assets
                    
                    $
                    —
                    
                    
                    $
                    6,517Employee
      related costs
                    
                    
                    96
                    
                    
                    
                    3,127Environmental
      remediation
                    
                    
                    —
                    
                    
                    
                    8,608Post
      closing cost
                    
                    
                    151
                    
                    
                    
                    4,374Other
      costs / currency
                    
                    
                    —
                    
                    
                    
                    759Fixed
      asset impairment
                    
                    
                    —
                    
                    
                    
                    40,134Total
                    
                    $
                    247
                    
                    
                    $
                    63,519
 
 Monterrey,
Mexico Reduction
 
 CumulativeThree months ended
                    
                    
                    incurred through(In thousands)
                    
                    April 5, 2009
                    
                    
                    April 5, 2009Major
      Type CostsEmployee
      related costs
                    
                    $
                    83
                    
                    
                    $
                    83Total
                    
                    $
                    83
                    
                    
                    $
                    83


16




Corporate
SG&A Reduction
 
 CumulativeThree months ended
                    
                    
                    incurred through(In thousands)
                    
                    April 5, 2009
                    
                    
                    April 5, 2009Major
      Type CostsEmployee
      related costs
                    
                    $
                    432
                    
                    
                    $
                    963Post
      retirement benefit gain
                    
                    
                    —
                    
                    
                    
                    (208
                    )Other
      costs / currency
                    
                    
                    —
                    
                    
                    
                    149Total
                    
                    $
                    432
                    
                    
                    $
                    904
 
 CumulativeThree months ended
                    
                    
                    incurred through(In thousands)
                    
                    April 5, 2009
                    
                    
                    April 5, 2009Grand
      Total
                    
                    $
                    792
                    
                    
                    $
                    70,251





At the
end of the first quarter of 2009, we had accrued $8.6 million related to the
restructuring of our North American operations for potential environmental
charges at our Decatur, Alabama facility.





(19)
            Condensed
      Consolidating Financial Information





The
following tables present condensed consolidating financial information for: (a)
Wolverine Tube, Inc. (the Parent) on a stand-alone basis; (b) on a combined
basis, the guarantors of the 10.5% Senior Notes (Subsidiary Guarantors), which
include TF Investor, Inc.; Tube Forming, L.P.; Wolverine Finance, LLC; 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 3072452 Nova Scotia Company; 3072453
Nova Scotia Company; Wolverine Tube Canada Limited Partnership; Wolverine
Shanghai Metals; Wolverine European Holdings BV; Wolverine Tube Europe BV;
Wolverine Tube, BV; Wolverine Tubagem (Portugal), Lda; Wolverine Joining
Technologies Canada, Inc.; Wolverine Asia, Limited; WLVN de Latinoamerica, S. de
R.L. de C.V.; and WLV Mexico, S. de R.L. de C.V. Each of the Subsidiary
Guarantors is 100% owned by the Parent. The guarantees issued by each of the
Subsidiary Guarantors are full, unconditional, joint and several. Accordingly,
separate financial statements of the 100% 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 Oklahoma and Tennessee manufacturing operations and
certain corporate management, sales and marketing, information services, product
development, the Precision Tool Center and finance functions located in
Alabama.


17


Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Statements of Operations


For
the Three Months Ended April 5, 2009


(Unaudited)





Non-Subsidiary
                        
                        
                        Guarantor(In thousands)
                        
                        Parent
                        
                        
                        Guarantors
                        
                        
                        Subsidiaries
                        
                        
                        Eliminations
                        
                        
                        ConsolidatedNet
      sales
                        
                        $
                        74,532
                        
                        
                        $
                        20,665
                        
                        
                        $
                        15,448
                        
                        
                        $
                        (1,043
                        )
                        
                        $
                        109,602Cost
      of goods sold
                        
                        
                        73,309
                        
                        
                        
                        19,290
                        
                        
                        
                        14,471
                        
                        
                        
                        (1,043
                        )
                        
                        
                        106,027Gross
      profit
                        
                        
                        1,223
                        
                        
                        
                        1,375
                        
                        
                        
                        977
                        
                        
                        
                        —
                        
                        
                        
                        3,575Selling,
      general and administrative expenses
                        
                        
                        4,616
                        
                        
                        
                        510
                        
                        
                        
                        524
                        
                        
                        
                        —
                        
                        
                        
                        5,650Advisory
      fees and expenses
                        
                        
                        298
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        298Restructuring
      and impairment charges
                        
                        
                        770
                        
                        
                        
                        22
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        792Operating
      income (loss)
                        
                        
                        (4,461
                        )
                        
                        
                        843
                        
                        
                        
                        453
                        
                        
                        
                        —
                        
                        
                        
                        (3,165
                        )Other
      (income) expense:Interest
      (income) expense, net
                        
                        
                        3,546
                        
                        
                        
                        (58
                        )
                        
                        
                        43
                        
                        
                        
                        —
                        
                        
                        
                        3,531Amortization
      expense
                        
                        
                        708
                        
                        
                        
                        —
                        
                        
                        
                        33
                        
                        
                        
                        —
                        
                        
                        
                        741Other,
      net
                        
                        
                        2,080
                        
                        
                        
                        24
                        
                        
                        
                        (2,325
                        )
                        
                        
                        —
                        
                        
                        
                        (221
                        )Equity
      in earnings of subsidiaries
                        
                        
                        2,938
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (2,938
                        )
                        
                        
                        —Income
      (loss) from continuing operations beforeequity
      in earnings of unconsolidated subsidiary andincome
      taxes
                        
                        
                        (7,857
                        )
                        
                        
                        877
                        
                        
                        
                        2,702
                        
                        
                        
                        (2,938
                        )
                        
                        
                        (7,216
                        )Equity
      in earnings of unconsolidated subsidiary
                        
                        
                        (341
                        )
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (341
                        )Income
      tax expense (benefit)
                        
                        
                        (281
                        )
                        
                        
                        293
                        
                        
                        
                        348
                        
                        
                        
                        —
                        
                        
                        
                        360Net
      income (loss)
                        
                        
                        (7,235
                        )
                        
                        
                        584
                        
                        
                        
                        2,354
                        
                        
                        
                        (2,938
                        )
                        
                        
                        (7,235
                        )Accretion
      of convertible preferred stock
                        
                        
                        1,255
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        1,255Preferred
      stock dividends
                        
                        
                        2,108
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        2,108Net
      income (loss) applicable to common shares
                        
                        $
                        (10,598
                        )
                        
                        $
                        584
                        
                        
                        $
                        2,354
                        
                        
                        $
                        (2,938
                        )
                        
                        $
                        (10,598
                        )


18





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Statements of Operations


For
the Three Months Ended March 30, 2008


(Unaudited)




Non-Subsidiary
                      
                      
                      Guarantor(In thousands)
                      
                      Parent
                      
                      
                      Guarantors
                      
                      
                      Subsidiaries
                      
                      
                      Eliminations
                      
                      
                      ConsolidatedNet
      sales
                      
                      $
                      137,095
                      
                      
                      $
                      34,779
                      
                      
                      $
                      34,943
                      
                      
                      $
                      (5,359
                      )
                      
                      $
                      201,458Cost
      of goods sold
                      
                      
                      132,585
                      
                      
                      
                      31,461
                      
                      
                      
                      31,768
                      
                      
                      
                      (5,359
                      )
                      
                      
                      190,455Gross
      profit
                      
                      
                      4,510
                      
                      
                      
                      3,318
                      
                      
                      
                      3,175
                      
                      
                      
                      —
                      
                      
                      
                      11,003Selling,
      general and administrative expenses
                      
                      
                      5,761
                      
                      
                      
                      612
                      
                      
                      
                      562
                      
                      
                      
                      —
                      
                      
                      
                      6,935Net
      (gain) on divestitures
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (5,383
                      )
                      
                      
                      —
                      
                      
                      
                      (5,383
                      )Advisory
      fees and expenses
                      
                      
                      524
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      524Restructuring
      and impairment charges
                      
                      
                      3,531
                      
                      
                      
                      —
                      
                      
                      
                      407
                      
                      
                      
                      —
                      
                      
                      
                      3,938Operating
      income (loss)
                      
                      
                      (5,306
                      )
                      
                      
                      2,706
                      
                      
                      
                      7,589
                      
                      
                      
                      —
                      
                      
                      
                      4,989Other
      (income) expense:Interest
      (income) expense, net
                      
                      
                      4,403
                      
                      
                      
                      (189
                      )
                      
                      
                      727
                      
                      
                      
                      —
                      
                      
                      
                      4,941Amortization
      expense
                      
                      
                      481
                      
                      
                      
                      —
                      
                      
                      
                      216
                      
                      
                      
                      —
                      
                      
                      
                      697Loss
      on sale of receivables
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      104
                      
                      
                      
                      —
                      
                      
                      
                      104Other,
      net
                      
                      
                      1,221
                      
                      
                      
                      201
                      
                      
                      
                      (1,403
                      )
                      
                      
                      —
                      
                      
                      
                      19Equity
      in earnings of subsidiaries
                      
                      
                      8,699
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (8,699
                      )
                      
                      
                      —Loss
      from continuing operations before non-controllinginterest
      and income taxes
                      
                      
                      (2,712
                      )
                      
                      
                      2,694
                      
                      
                      
                      7,945
                      
                      
                      
                      (8,699
                      )
                      
                      
                      (772
                      )Non-controlling
      interest
                      
                      
                      81
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      81Income
      tax expense (benefit)
                      
                      
                      (839
                      )
                      
                      
                      839
                      
                      
                      
                      1,101
                      
                      
                      
                      —
                      
                      
                      
                      1,101Income
      (loss) from continuing operations
                      
                      
                      (1,954
                      )
                      
                      
                      1,855
                      
                      
                      
                      6,844
                      
                      
                      
                      (8,699
                      )
                      
                      
                      (1,954
                      )Income
      (loss) from discontinued operations, net of taxes
                      
                      
                      6,146
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      6,146Net
      income (loss)
                      
                      
                      4,192
                      
                      
                      
                      1,855
                      
                      
                      
                      6,844
                      
                      
                      
                      (8,699
                      )
                      
                      
                      4,192Accretion
      of convertible preferred stock
                      
                      
                      1,255
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1,255Preferred
      stock dividends
                      
                      
                      1,191
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1,191Net
      income (loss) applicable to common shares
                      
                      $
                      1,746
                      
                      
                      $
                      1,855
                      
                      
                      $
                      6,844
                      
                      
                      $
                      (8,699
                      )
                      
                      $
                      1,746


19





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Balance Sheets


April
5, 2009


(Unaudited)





Non-Subsidiary
                      
                      
                      Guarantor(In thousands)
                      
                      Parent
                      
                      
                      Guarantors
                      
                      
                      Subsidiaries
                      
                      
                      Eliminations
                      
                      
                      ConsolidatedAssetsCurrent
      assetsCash
      and cash equivalents
                      
                      $
                      46,999
                      
                      
                      $
                      —
                      
                      
                      $
                      7,194
                      
                      
                      $
                      —
                      
                      
                      $
                      54,193Restricted
      cash
                      
                      
                      11,786
                      
                      
                      
                      1
                      
                      
                      
                      210
                      
                      
                      
                      —
                      
                      
                      
                      11,997Accounts
      receivable, net
                      
                      
                      23,489
                      
                      
                      
                      9,170
                      
                      
                      
                      6,357
                      
                      
                      
                      —
                      
                      
                      
                      39,016Inventories
                      
                      
                      18,914
                      
                      
                      
                      19,595
                      
                      
                      
                      7,757
                      
                      
                      
                      —
                      
                      
                      
                      46,266Derivative
      assets
                      
                      
                      1,614
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1,614Prepaid
      expenses and other assets
                      
                      
                      2,132
                      
                      
                      
                      1,525
                      
                      
                      
                      364
                      
                      
                      
                      —
                      
                      
                      
                      4,021Total
      current assets
                      
                      
                      104,934
                      
                      
                      
                      30,291
                      
                      
                      
                      21,882
                      
                      
                      
                      —
                      
                      
                      
                      157,107Property,
      plant and equipment, net
                      
                      
                      27,184
                      
                      
                      
                      14,304
                      
                      
                      
                      13,766
                      
                      
                      
                      —
                      
                      
                      
                      55,254Intangible
      assets and deferred charges, net
                      
                      
                      2,551
                      
                      
                      
                      5
                      
                      
                      
                      11
                      
                      
                      
                      —
                      
                      
                      
                      2,567Notes
      receivable
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      562
                      
                      
                      
                      —
                      
                      
                      
                      562Investment
      in unconsolidated subsidiary
                      
                      
                      9,714
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      9,714Investment
      in subsidiaries
                      
                      
                      327,612
                      
                      
                      
                      325
                      
                      
                      
                      —
                      
                      
                      
                      (327,937
                      )
                      
                      
                      —Total
      assets
                      
                      $
                      471,995
                      
                      
                      $
                      44,925
                      
                      
                      $
                      36,221
                      
                      
                      $
                      (327,937
                      )
                      
                      $
                      225,204Liabilities
      and Accumulated DeficitCurrent
      liabilitiesAccounts
      payable
                      
                      $
                      17,604
                      
                      
                      $
                      2,893
                      
                      
                      $
                      6,332
                      
                      
                      $
                      —
                      
                      
                      $
                      26,829Accrued
      liabilities
                      
                      
                      (7,105
                      )
                      
                      
                      20,122
                      
                      
                      
                      1,794
                      
                      
                      
                      —
                      
                      
                      
                      14,811Derivative
      liabilities
                      
                      
                      3,030
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      3,030Deferred
      income taxes
                      
                      
                      1,247
                      
                      
                      
                      (211
                      )
                      
                      
                      217
                      
                      
                      
                      —
                      
                      
                      
                      1,253Short-term
      borrowings
                      
                      
                      16,142
                      
                      
                      
                      —
                      
                      
                      
                      1,354
                      
                      
                      
                      —
                      
                      
                      
                      17,496Intercompany
      balances, net
                      
                      
                      276,919
                      
                      
                      
                      (253,244
                      )
                      
                      
                      (23,675
                      )
                      
                      
                      —
                      
                      
                      
                      —Total
      current liabilities
                      
                      
                      307,837
                      
                      
                      
                      (230,440
                      )
                      
                      
                      (13,978
                      )
                      
                      
                      —
                      
                      
                      
                      63,419Long-term
      debt
                      
                      
                      121,558
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      121,558Pension
      liabilities
                      
                      
                      45,755
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      45,755Postretirement
      benefits obligation
                      
                      
                      3,291
                      
                      
                      
                      —
                      
                      
                      
                      1,176
                      
                      
                      
                      —
                      
                      
                      
                      4,467Accrued
      environmental remediation
                      
                      
                      9,540
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      9,540Deferred
      income taxes, non-current
                      
                      
                      3,549
                      
                      
                      
                      (3,549
                      )
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —Accrued
      dividends
                      
                      
                      7,584
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      7,584Other
      liabilities
                      
                      
                      3,128
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      3,128Total
      liabilities
                      
                      
                      502,242
                      
                      
                      
                      (233,989
                      )
                      
                      
                      (12,802
                      )
                      
                      
                      —
                      
                      
                      
                      255,451Preferred
      Stock
                      
                      
                      24,863
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      24,863Accumulated
      deficit
                      
                      
                      (55,110
                      )
                      
                      
                      278,914
                      
                      
                      
                      49,023
                      
                      
                      
                      (327,937
                      )
                      
                      
                      (55,110
                      )Total
      liabilities, convertible preferred stock andaccumulated
      deficit
                      
                      $
                      471,995
                      
                      
                      $
                      44,925
                      
                      
                      $
                      36,221
                      
                      
                      $
                      (327,937
                      )
                      
                      $
                      225,204


20





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Balance Sheets


December
31, 2008


(Unaudited)





Non-Subsidiary
                          
                          
                          Guarantor(In thousands)
                          
                          Parent
                          
                          
                          Guarantors
                          
                          
                          Subsidiaries
                          
                          
                          Eliminations
                          
                          
                          ConsolidatedAssetsCurrent
      assetsCash
      and cash equivalents
                          
                          $
                          18,778
                          
                          
                          $
                          —
                          
                          
                          $
                          14,759
                          
                          
                          $
                          —
                          
                          
                          $
                          33,537Restricted
      cash
                          
                          
                          37,173
                          
                          
                          
                          1
                          
                          
                          
                          564
                          
                          
                          
                          —
                          
                          
                          
                          37,738Accounts
      receivable, net
                          
                          
                          4,362
                          
                          
                          
                          8,338
                          
                          
                          
                          25,926
                          
                          
                          
                          —
                          
                          
                          
                          38,626Inventories
                          
                          
                          18,605
                          
                          
                          
                          23,366
                          
                          
                          
                          11,313
                          
                          
                          
                          —
                          
                          
                          
                          53,284Assets
      held for sale
                          
                          
                          3,680
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          3,680Derivative
      assets
                          
                          
                          291
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          291Prepaid
      expenses and other assets
                          
                          
                          1,514
                          
                          
                          
                          3,575
                          
                          
                          
                          291
                          
                          
                          
                          —
                          
                          
                          
                          5,380Total
      current assets
                          
                          
                          84,403
                          
                          
                          
                          35,280
                          
                          
                          
                          52,853
                          
                          
                          
                          —
                          
                          
                          
                          172,536Property,
      plant and equipment, net
                          
                          
                          23,033
                          
                          
                          
                          14,644
                          
                          
                          
                          14,327
                          
                          
                          
                          —
                          
                          
                          
                          52,004Intangible
      assets and deferred charges, net
                          
                          
                          2,588
                          
                          
                          
                          5
                          
                          
                          
                          41
                          
                          
                          
                          —
                          
                          
                          
                          2,634Notes
      receivable
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          585
                          
                          
                          
                          —
                          
                          
                          
                          585Investment
      in unconsolidated subsidiary
                          
                          
                          9,373
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          
                          
                          
                          
                          9,373Investment
      in subsidiaries
                          
                          
                          357,759
                          
                          
                          
                          325
                          
                          
                          
                          —
                          
                          
                          
                          (358,084
                          )
                          
                          
                          —Total
      assets
                          
                          $
                          477,156
                          
                          
                          $
                          50,254
                          
                          
                          $
                          67,806
                          
                          
                          $
                          (358,084
                          )
                          
                          $
                          237,132Liabilities
      and Accumulated DeficitCurrent
      liabilitiesAccounts
      payable
                          
                          $
                          16,190
                          
                          
                          $
                          12,315
                          
                          
                          $
                          6,208
                          
                          
                          $
                          —
                          
                          
                          $
                          34,713Accrued
      liabilities
                          
                          
                          8,567
                          
                          
                          
                          2,684
                          
                          
                          
                          1,999
                          
                          
                          
                          —
                          
                          
                          
                          13,250Derivative
      liabilities
                          
                          
                          5,415
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          5,415Deferred
      income taxes
                          
                          
                          1,561
                          
                          
                          
                          (211
                          )
                          
                          
                          251
                          
                          
                          
                          —
                          
                          
                          
                          1,601Short-term
      borrowings
                          
                          
                          16,098
                          
                          
                          
                          —
                          
                          
                          
                          14
                          
                          
                          
                          —
                          
                          
                          
                          16,112Intercompany
      balances, net
                          
                          
                          261,022
                          
                          
                          
                          (239,316
                          )
                          
                          
                          (21,706
                          )
                          
                          
                          —
                          
                          
                          
                          —Total
      current liabilities
                          
                          
                          308,853
                          
                          
                          
                          (224,528
                          )
                          
                          
                          (13,234
                          )
                          
                          
                          —
                          
                          
                          
                          71,091Long-term
      debt
                          
                          
                          121,558
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          121,558Pension
      liabilities
                          
                          
                          45,552
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          45,552Postretirement
      benefits obligation
                          
                          
                          3,375
                          
                          
                          
                          —
                          
                          
                          
                          1,287
                          
                          
                          
                          —
                          
                          
                          
                          4,662Accrued
      environmental remediation
                          
                          
                          9,628
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          9,628Deferred
      income taxes, non-current
                          
                          
                          3,549
                          
                          
                          
                          (3,549
                          )
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Accrued
      dividends
                          
                          
                          5,476
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          5,476Other
      liabilities
                          
                          
                          3,290
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          3,290Total
      liabilities
                          
                          
                          501,281
                          
                          
                          
                          (228,077
                          )
                          
                          
                          (11,947
                          )
                          
                          
                          —
                          
                          
                          
                          261,257Preferred
      Stock
                          
                          
                          23,608
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          23,608Accumulated
      deficit
                          
                          
                          (47,733
                          )
                          
                          
                          278,331
                          
                          
                          
                          79,753
                          
                          
                          
                          (358,084
                          )
                          
                          
                          (47,733
                          )Total
      liabilities, convertible preferred stock andaccumulated
      deficit
                          
                          $
                          477,156
                          
                          
                          $
                          50,254
                          
                          
                          $
                          67,806
                          
                          
                          $
                          (358,084
                          )
                          
                          $
                          237,132


21





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Statements of Cash Flows


For
the Three Months Ended April 5, 2009


(Unaudited)




Non-Subsidiary
                            
                            
                            Guarantor(In
      thousands )
                            
                            Parent
                            
                            
                            Guarantors
                            
                            
                            Subsidiaries
                            
                            
                            Eliminations
                            
                            
                            ConsolidatedOperating
      ActivitiesNet
      income (loss)
                            
                            $
                            (7,235
                            )
                            
                            $
                            584
                            
                            
                            $
                            2,354
                            
                            
                            $
                            (2,938
                            )
                            
                            $
                            (7,235
                            )Adjustments
      to reconcile net income (loss) to net cash fromoperating
      activities:Depreciation
                            
                            
                            713
                            
                            
                            
                            499
                            
                            
                            
                            234
                            
                            
                            
                            —
                            
                            
                            
                            1,446Amortization
                            
                            
                            720
                            
                            
                            
                            —
                            
                            
                            
                            58
                            
                            
                            
                            —
                            
                            
                            
                            778Deferred
      income taxes
                            
                            
                            (314
                            )
                            
                            
                            —
                            
                            
                            
                            (22
                            )
                            
                            
                            —
                            
                            
                            
                            (336
                            )Gain
      on sale of fixed assets
                            
                            
                            (273
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (273
                            )Non-cash
      environmental, restructuring and other charges
                            
                            
                            132
                            
                            
                            
                            —
                            
                            
                            
                            (22
                            )
                            
                            
                            —
                            
                            
                            
                            110Stock
      compensation expense
                            
                            
                            85
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            85Equity
      in earnings of unconsolidated subsidiary
                            
                            
                            (341
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (341
                            )Equity
      in earnings of subsidiaries
                            
                            
                            (2,938
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            2,938
                            
                            
                            
                            —Changes
      in operating assets and liabilities
                            
                            
                            (15,680
                            )
                            
                            
                            (6,373
                            )
                            
                            
                            22,225
                            
                            
                            
                            —
                            
                            
                            
                            172Net
      cash from continuing operating activities
                            
                            
                            (25,131
                            )
                            
                            
                            (5,290
                            )
                            
                            
                            24,827
                            
                            
                            
                            —
                            
                            
                            
                            (5,594
                            )Net
      cash from discontinued operating activities
                            
                            
                            (29
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (29
                            )Net
      cash from operating activities
                            
                            
                            (25,160
                            )
                            
                            
                            (5,290
                            )
                            
                            
                            24,827
                            
                            
                            
                            —
                            
                            
                            
                            (5,623
                            )Investing
      ActivitiesAdditions
      to property, plant and equipment
                            
                            
                            (1,227
                            )
                            
                            
                            (158
                            )
                            
                            
                            29
                            
                            
                            
                            —
                            
                            
                            
                            (1,356
                            )Proceeds
      from sale of assets
                            
                            
                            273
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            273Purchase
      of patents
                            
                            
                            (42
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (42
                            )Change
      in restricted cash
                            
                            
                            25,387
                            
                            
                            
                            —
                            
                            
                            
                            354
                            
                            
                            
                            —
                            
                            
                            
                            25,741Net
      cash from continuing investing activities
                            
                            
                            24,391
                            
                            
                            
                            (158
                            )
                            
                            
                            383
                            
                            
                            
                            —
                            
                            
                            
                            24,616Net
      cash from discontinued investing operations
                            
                            
                            1,200
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            1,200Net
      cash from investing activities
                            
                            
                            25,591
                            
                            
                            
                            (158
                            )
                            
                            
                            383
                            
                            
                            
                            —
                            
                            
                            
                            25,816Financing
      ActivitiesFinancing
      fees and expenses paid
                            
                            
                            (661
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (661
                            )Payments
      under revolving credit facilities and other debt
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (3
                            )
                            
                            
                            —
                            
                            
                            
                            (3
                            )Borrowings
      from revolving credit facilities and other debt
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            1,325
                            
                            
                            
                            —
                            
                            
                            
                            1,325Intercompany
      borrowings (payments)
                            
                            
                            28,458
                            
                            
                            
                            5,448
                            
                            
                            
                            (33,906
                            )
                            
                            
                            —
                            
                            
                            
                            —Net
      cash from financing activities
                            
                            
                            27,797
                            
                            
                            
                            5,448
                            
                            
                            
                            (32,584
                            )
                            
                            
                            —
                            
                            
                            
                            661Effect
      of exchange rate changes on cash and cash equivalents
                            
                            
                            (7
                            )
                            
                            
                            —
                            
                            
                            
                            (191
                            )
                            
                            
                            —
                            
                            
                            
                            (198
                            )Net
      increase (decrease) in cash and cash equivalents
                            
                            
                            28,221
                            
                            
                            
                            —
                            
                            
                            
                            (7,565
                            )
                            
                            
                            —
                            
                            
                            
                            20,656Cash
      and cash equivalents at beginning of period
                            
                            
                            18,778
                            
                            
                            
                            —
                            
                            
                            
                            14,759
                            
                            
                            
                            —
                            
                            
                            
                            33,537Cash
      and equivalents at end of period
                            
                            $
                            46,999
                            
                            
                            $
                            —
                            
                            
                            $
                            7,194
                            
                            
                            $
                            —
                            
                            
                            $
                            54,193


22





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Statements of Cash Flows


For
the Three Months Ended March 30, 2008


(Unaudited)




Non-Subsidiary
                            
                            
                            Guarantor(In thousands )
                            
                            Parent
                            
                            
                            Guarantors
                            
                            
                            Subsidiaries
                            
                            
                            Eliminations
                            
                            
                            ConsolidatedOperating
      ActivitiesIncome
      (loss) from continuing operations
                            
                            $
                            (1,954
                            )
                            
                            $
                            1,855
                            
                            
                            $
                            6,844
                            
                            
                            $
                            (8,699
                            )
                            
                            $
                            (1,954
                            )Income
      from discontinued operations
                            
                            
                            6,146
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            6,146Net
      income (loss)
                            
                            
                            4,192
                            
                            
                            
                            1,855
                            
                            
                            
                            6,844
                            
                            
                            
                            (8,699
                            )
                            
                            
                            4,192Adjustments
      to reconcile net income (loss) to net cash fromoperating
      activities:Depreciation
                            
                            
                            731
                            
                            
                            
                            476
                            
                            
                            
                            418
                            
                            
                            
                            —
                            
                            
                            
                            1,625Amortization
                            
                            
                            492
                            
                            
                            
                            —
                            
                            
                            
                            225
                            
                            
                            
                            —
                            
                            
                            
                            717Deferred
      income taxes
                            
                            
                            (86
                            )
                            
                            
                            79
                            
                            
                            
                            (19
                            )
                            
                            
                            —
                            
                            
                            
                            (26
                            )Gain
      on extinguishment of debt
                            
                            
                            (600
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (600
                            )Non-controlling
      interest in Chinese subsidiary
                            
                            
                            81
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            81Impairment
      of assets held for sale
                            
                            
                            353
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            353Non-cash
      environmental, restructuring and other charges
                            
                            
                            (4,583
                            )
                            
                            
                            (260
                            )
                            
                            
                            (691
                            )
                            
                            
                            —
                            
                            
                            
                            (5,534
                            )Stock
      compensation expense
                            
                            
                            115
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            115Equity
      in earnings of subsidiaries
                            
                            
                            (8,699
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            8,699
                            
                            
                            
                            —Changes
      in operating assets and liabilities
                            
                            
                            16,569
                            
                            
                            
                            1,527
                            
                            
                            
                            (35,039
                            )
                            
                            
                            —
                            
                            
                            
                            (16,943
                            )Net
      cash from continuing operating activities
                            
                            
                            2,419
                            
                            
                            
                            3,677
                            
                            
                            
                            (28,262
                            )
                            
                            
                            —
                            
                            
                            
                            (22,166
                            )Net
      cash from discontinued operating activities
                            
                            
                            7,964
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            7,964Net
      cash from operating activities
                            
                            
                            10,383
                            
                            
                            
                            3,677
                            
                            
                            
                            (28,262
                            )
                            
                            
                            —
                            
                            
                            
                            (14,202
                            )Investing
      ActivitiesAdditions
      to property, plant and equipment
                            
                            
                            (611
                            )
                            
                            
                            (56
                            )
                            
                            
                            (842
                            )
                            
                            
                            —
                            
                            
                            
                            (1,509
                            )Proceeds
      from sale of assets
                            
                            
                            2,253
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            2,253Purchase
      of patents
                            
                            
                            (226
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (226
                            )Proceeds
      from sale of interest in Chinese subsidiary
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            9,500
                            
                            
                            
                            —
                            
                            
                            
                            9,500Change
      in restricted cash
                            
                            
                            (5,480
                            )
                            
                            
                            —
                            
                            
                            
                            15
                            
                            
                            
                            —
                            
                            
                            
                            (5,465
                            )Net
      cash from continuing investing activities
                            
                            
                            (4,064
                            )
                            
                            
                            (56
                            )
                            
                            
                            8,673
                            
                            
                            
                            —
                            
                            
                            
                            4,553Net
      cash from discontinued investing activities
                            
                            
                            22,104
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            22,104Net
      cash from investing activities
                            
                            
                            18,040
                            
                            
                            
                            (56
                            )
                            
                            
                            8,673
                            
                            
                            
                            —
                            
                            
                            
                            26,657Financing
      ActivitiesFinancing
      fees and expenses paid
                            
                            
                            (1,430
                            )
                            
                            
                            —
                            
                            
                            
                            (167
                            )
                            
                            
                            —
                            
                            
                            
                            (1,597
                            )Payments
      under revolving credit facilities and other debt
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (300
                            )
                            
                            
                            —
                            
                            
                            
                            (300
                            )Borrowings
      from revolving credit facilities and other debt
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            2
                            
                            
                            
                            —
                            
                            
                            
                            2Issuance
      of preferred stock
                            
                            
                            14,194
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            14,194Purchase
      or repayment of senior notes
                            
                            
                            (11,484
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (11,484
                            )Payment
      of dividends
                            
                            
                            (1,063
                            )
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (1,063
                            )Intercompany
      dividends
                            
                            
                            10,743
                            
                            
                            
                            —
                            
                            
                            
                            (10,743
                            )
                            
                            
                            —
                            
                            
                            
                            —Intercompany
      borrowings (payments)
                            
                            
                            (17,708
                            )
                            
                            
                            (3,621
                            )
                            
                            
                            21,329
                            
                            
                            
                            —
                            
                            
                            
                            —Net
      cash from financing activities
                            
                            
                            (6,748
                            )
                            
                            
                            (3,621
                            )
                            
                            
                            10,121
                            
                            
                            
                            —
                            
                            
                            
                            (248
                            )Effect
      of exchange rate changes on cash and cash equivalents
                            
                            
                            962
                            
                            
                            
                            —
                            
                            
                            
                            (1,036
                            )
                            
                            
                            —
                            
                            
                            
                            (74
                            )Net
      increase (decrease) in cash and cash equivalents
                            
                            
                            22,637
                            
                            
                            
                            —
                            
                            
                            
                            (10,504
                            )
                            
                            
                            —
                            
                            
                            
                            12,133Cash
      and cash equivalents at beginning of period
                            
                            
                            37,981
                            
                            
                            
                            —
                            
                            
                            
                            25,322
                            
                            
                            
                            —
                            
                            
                            
                            63,303Cash
      and cash equivalents at end of period
                            
                            $
                            60,618
                            
                            
                            $
                            —
                            
                            
                            $
                            14,818
                            
                            
                            $
                            —
                            
                            
                            $
                            75,436


23


(20)
            Related
      Party Transactions





On
February 16, 2007, the Company closed the Preferred Stock Purchase
Agreement with Alpine and Plainfield providing for the issuance and sale of
50,000 shares of Series A Convertible Preferred Stock of the Company, at a price
of $1,000 per share, for a total purchase price of $50.0
million.  Following the completion of our common stock rights
offering, Alpine purchased an additional 4,494 shares of Series A Convertible
Preferred Stock on January 25, 2008 for $4.5 million in order to maintain the
fully diluted ownership by Alpine and Plainfield in Wolverine at 55.0%. On March
20, 2008 Alpine purchased 10,000 shares of Series B Convertible Preferred Stock,
which have substantially the same terms and conditions as the Series A
Convertible Preferred Stock except that the initial rate of interest on the
Series B Convertible Preferred Stock is 8.5% and could increase to 10.5% if the
underlying shares of common stock into which the Series B Convertible Preferred
Stock can be converted are not successfully registered for resale. The 10,000
shares were issued at the $1.10 conversion price and are convertible into 9.1
million shares of stock.





The
Company and The Alpine Group, Inc. (“Alpine”) entered into a management
agreement at the initial closing of the Preferred Stock Purchase Agreement in
February 2007, pursuant to which Alpine agreed to provide the Company with
certain services for a two-year period in exchange for an annual fee of $1.25
million and reimbursement of reasonable and customary expenses incurred by
Alpine. Since the conclusion of the two-year period, Wolverine has continued to
utilize the Alpine management services on a month-to-month basis at the same
monthly fee rate. During the first quarters of both 2009 and 2008, we paid $0.3
million to Alpine for these services.





On
April 30, 2007, the Company entered into a consulting agreement with Keith
Weil, the Company’s former Senior Vice President, International and Strategic
Development, which was effective as of February 19, 2007, whereby
Mr. Weil agreed to provide consulting and advisory services to the Company.
Under the terms of the consulting agreement, for the quarters ended April 5,
2009 and March 30, 2008 we paid Mr. Weil $22.0 thousand and $81.6 thousand,
respectively, in consulting fees. The consulting agreement terminated in January
2009.





Effective
as of January 1, 2008, we entered into a sole source purchasing agreement
with Exeon, Inc. (“Exeon”), a wholly owned subsidiary of Alpine, whereby under
the agreement we purchase all of our scrap and cathode copper requirements for
our Shawnee, Oklahoma and London, Ontario facilities. Under the agreement, we
will purchase copper scrap and cathode at substantially the same prices paid
prior to entering into the agreement, but with enhanced terms thus improving our
working capital usage. Moreover, we believe consolidating our purchases in this
manner is more efficient and provides more opportunities to purchase materials
from secondary markets since Exeon has been in the scrap reclamation business
for a number of years. During the first quarter of 2009 we purchased 13.7
million pounds of copper cathode and scrap from Exeon at the COMEX current month
average price. These pounds represented 84.3% of our North American copper
purchases for the first quarter of 2009.  Fees charged for the
services provided in the amount of $0.1 million approximate our cost to perform
the same services in-house.  As of April 5, 2009, we had no amount
payable to Exeon and we had $2.5 million of restricted cash related to margin
deposits with Exeon. During the first quarter of 2008 we purchased 27.1 million
pounds of copper cathode and scrap from Exeon at the COMEX current month average
price. These pounds represented 76.6% of our North American copper purchases for
the first quarter of 2008.  Fees charged for the services provided in
the amount of $0.2 million approximate our cost to perform the same services
in-house. As of March 30, 2008,  we had no payable due or margin
deposits with Exeon.





(21)
            Fair
      Value Measurements





On
January 1, 2008, the Company adopted the provisions of SFAS No. 157, Fair Value Measurements(“SFAS 157”), for fair value measurements of financial assets and
financial liabilities and for fair value measurements of nonfinancial items that
are recognized or disclosed at fair value in the financial statements on a
recurring basis. SFAS 157 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. SFAS 157 also establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. FASB Staff Position FAS 157-2, Effective Date of FASB Statement No.
157, delays the effective date of SFAS 157 until fiscal years beginning
after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities
that are recognized or disclosed at fair value in the financial statements on a
nonrecurring basis.





Currently
the Company is only measuring its derivative assets and liabilities at fair
value. As required by SFAS 157, the Company has categorized its financial assets
and liabilities measured at fair value into a three-level fair value
hierarchy.  The fair-value hierarchy established in SFAS 157
prioritizes the inputs used in valuation techniques into three levels as
follows:





•
              Level
      1 – Observable inputs – quoted prices in active markets for identical
      assets and liabilities.  For the Company, level 1 financial
      assets and liabilities consist of commodity derivative
      contracts;


•
              Level
      2 – Observable inputs other than the quoted prices in active markets for
      identical assets and liabilities – includes quoted prices for similar
      instruments, quoted prices for identical or similar instruments in
      inactive markets, and amounts derived from valuation models where all
      significant inputs are observable in active markets;
  and


•
              Level
      3 – Unobservable inputs – includes amounts derived from valuation models
      where one or more significant inputs are unobservable and require us to
      develop relevant assumptions.




24




The
following table presents the Company’s fair value hierarchy for those assets and
liabilities measured at fair value on a recurring basis for the periods ended
April 5, 2009 and March 30, 2008:





April
      5, 2009
                                                                        
                                                                        December
      31, 2008($s
      in millions)
                                                                        
                                                                        Level
      1
                                                                        
                                                                        
                                                                        Level
      2
                                                                        
                                                                        
                                                                        Level
      3
                                                                        
                                                                        
                                                                        Total
                                                                        
                                                                        
                                                                        Level
      1
                                                                        
                                                                        
                                                                        Level
      2
                                                                        
                                                                        
                                                                        Level
      3
                                                                        
                                                                        
                                                                        TotalAssetsDerivative
      assets
                                                                        
                                                                        $
                                                                        1.6
                                                                        
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        1.6
                                                                        
                                                                        
                                                                        $
                                                                        0.3
                                                                        
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        0.3Liabilities:Derivative
      liabilities
                                                                        
                                                                        $
                                                                        (3.0
                                                                        )
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        (3.0
                                                                        )
                                                                        
                                                                        $
                                                                        (5.4
                                                                        )
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        $
                                                                        (5.4
                                                                        )


(22)
            Derivatives





We are
exposed to various market risks, including changes in commodity prices, foreign
currency exchange rates and interest rates.  Market risk is the
potential loss arising from adverse changes in market rates and
prices.  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 commodity prices, foreign currency exchange rates and
interest rates.  These transactions are entered into in accordance
with our Wolverine Tube, Inc. Derivative Management Policy, which outlines our
policy regarding the types of derivatives permitted, the purpose of entering
such derivatives, operating and trading limitations and approvals necessary for
entering into them.  We do not enter into derivatives or other
financial instruments for trading or speculative purposes.  The
Company has determined its hedge programs to be highly effective in offsetting
the changes in fair value or cash flows generated by the items
hedged.





Commodity
Price Risk





For the
majority of our customers, the price they pay for a product includes a metal
charge that represents the previous monthly average COMEX price for metal. For
certain other customers, the metal charge represents the market value of the
copper used in that product as of the date we ship the product to the customer.
Our prior month average COMEX pricing model is expected to serve as a natural
hedge against changes in the commodity price of copper, and allows us to better
match the cost of copper with the selling price to our customers. However, as an
accommodation to our customers, we often enter into fixed price commitments to
purchase copper on their behalf in order to fix the price of copper in advance
of shipment. We account for these transactions as cash flow hedges under
Statement of Financial Accounting Standard 133, Accounting for Derivative
Instruments and Hedging Activities, as amended by SFAS 138, Accounting for Certain Derivative Instruments and Certain
Hedging Activities, and by SFAS 149, Amendment of Statement 133 on
Derivative Instruments and
Hedging Activities, (hereinafter collectively referred to as “SFAS 133”).
In addition, beginning the first quarter of 2009, we have adopted SFAS 161,Disclosures about Derivative
Instruments and Hedging Activities - an amendment of FASB Statement No.
133. The Company assesses the effectiveness of the hedges on a monthly
basis.





The fair
values of these derivatives are recognized in derivative assets and derivative
liabilities in the Condensed Consolidated Balance Sheets. The net change in the
derivative asset and liability and the underlying amounts are recognized in OCI
and reclassified to cost of goods sold when the related inventory is
sold.  As of April 5, 2009, the Company had the following outstanding
commodity contracts related to these derivatives:





VolumeCommodity
                        
                        (net
      purchase and (sale) contracts)Copper
                        
                        2.9
      million
pounds





We have
firm-price purchase commitments with some of our copper suppliers under which we
agree to buy copper at a price set in advance of the actual delivery of that
copper to us. Under these arrangements, we assume the risk of a price decrease
in the market price of copper between the time the price is fixed and the time
the copper is delivered. In order to reduce our market exposure to price
changes, at the time we enter into a firm-price purchase commitment, we also
often enter into commodity forward contracts to sell a like amount of copper at
the then-current price for delivery to the counterparty at a later date. We
account for these transactions as cash flow hedges under SFAS
133.  The fair values of these derivatives are recognized in
derivative assets and derivative liabilities in the Condensed Consolidated
Balance Sheets. The net change in the derivative asset and liability and the
underlying amounts are recognized in OCI and reclassified to cost of goods sold
when the related inventory is sold. Amounts held in OCI are reclassified to
earnings at the point the customer commitments are realized.  As of
April 5, 2009, the Company had no outstanding commodity contracts related to
these derivatives.


25


We have
entered into commodity forward contracts to sell copper in order to hedge or
protect the value of the copper carried in our inventory from price decreases.
We account for these forward contracts as fair value hedges under SFAS 133. The
fair value of these derivatives is recognized in derivative assets and
liabilities in the Condensed Consolidated Balance Sheets. The net change in the
derivative asset and liability and the underlying hedged amounts are recognized
in the Condensed Consolidated Statements of Operations under cost of goods sold.
As of April 5, 2009, the Company had the following outstanding commodity
contracts related to these derivatives:


VolumeCommodity
                        
                        (net purchase and (sale)
      contracts)Copper
                        
                        (2.3)
      million
pounds





In
February 2009 we terminated our silver consignment arrangement with a bank and
purchased our silver on the open market.  Consequently, we must
purchase and hold in inventory our silver.  We have entered into
commodity forward contracts to sell silver in order to hedge or protect the
value of the silver carried in our inventory from future price
decreases.  We account for these forward contracts as fair value
hedges under SFAS 133. The fair value of these derivatives is recognized in
derivative assets and derivative liabilities in the Condensed Consolidated
Balance Sheets. The net change in the derivative assets and liabilities and the
underlying hedged amounts are recognized in the Condensed Consolidated
Statements of Operations under cost of goods sold. As of April 5, 2009, the
Company had the following outstanding commodity contracts related to these
derivatives:


VolumeCommodity
                      
                      (net purchase and (sale)
      contracts)Silver
                      
                      (735,000)
      troy ounces


The
Company utilizes futures contract positions for tin, nickel, zinc and copper to
protect the risk of an overall change in the fair value of theses
inventories.  Since these derivatives are not designated as hedging
instruments under SFAS No. 133, the changes in the fair value of these hedges
are recognized immediately in cost of goods sold.  As of April 5,
2009, the Company had the following outstanding commodity contracts related to
these derivatives:


VolumeCommodity
                      
                      (net purchase and (sale)
      contracts)Tin
                      
                      (55,116)
      poundsNickel
                      
                      (52,911)
      pounds


Foreign
Currency Exchange Risk





We are
subject to market risk exposure from fluctuations in foreign currencies. Foreign
currency exchange forward contracts may be used from time to time to hedge the
variability in cash flows from the forecasted payment or receipt of currencies
other than the functional currency. These forward currency exchange 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. These contracts cover periods commensurate with known or expected
exposures, generally within three months. As of April 5, 2009, we had forward
exchange contracts outstanding to sell Euros with a notional amount of $0.4
million. The estimated fair value of these forward exchange contracts to sell
foreign currency was a loss of $5.8 thousand. The effect of a 10% adverse change
in exchange rates would reduce the fair value by approximately $36.4
thousand.





The fair
values of the Company’s derivative instruments as of April 5, 2009 and December
31, 2008 were as follows:


26




Asset
      Derivatives
                                                                                
                                                                                Liability
      Derivatives($s
      in millions)
                                                                                
                                                                                April
      5, 2009
                                                                                
                                                                                April
      5, 2009Derivatives
      designated as hedging
                                                                                
                                                                                Balance
      Sheet
                                                                                
                                                                                
                                                                                
                                                                                Balance
      Sheetinstruments
                                                                                
                                                                                Location
                                                                                
                                                                                Fair
      Value
                                                                                
                                                                                Location
                                                                                
                                                                                Fair
      ValueCommodity
      Contracts:Copper
      - Customer Contracts
                                                                                
                                                                                Derivative
      Asset
                                                                                
                                                                                $
                                                                                0.3
                                                                                
                                                                                Derivative
      Liability
                                                                                
                                                                                $
                                                                                (1.7
                                                                                )Copper
      - Base Inventory
                                                                                
                                                                                Derivative
      Asset
                                                                                
                                                                                
                                                                                —
                                                                                
                                                                                Derivative
      Liability
                                                                                
                                                                                
                                                                                (0.9
                                                                                )Silver
      - Base Inventory
                                                                                
                                                                                Derivative
      Asset
                                                                                
                                                                                
                                                                                1.3
                                                                                
                                                                                Derivative
      Liability
                                                                                
                                                                                
                                                                                (0.1
                                                                                )Total
      derivatives designated ashedging
      instruments
                                                                                
                                                                                
                                                                                
                                                                                $
                                                                                1.6
                                                                                
                                                                                
                                                                                
                                                                                $
                                                                                (2.7
                                                                                )
 
 Derivatives
      not designated as hedging
                                                    
                                                    Balance
      Sheet
                                                    
                                                    
                                                    
                                                    Balance
      Sheetinstruments
                                                    
                                                    Location
                                                    
                                                    Fair
      Value
                                                    
                                                    Location
                                                    
                                                    Fair
      ValueCommodity
      ContractsNickel
                                                    
                                                    Derivative
      Asset
                                                    
                                                    $
                                                    —
                                                    
                                                    Derivative
      Liability
                                                    
                                                    $
                                                    (0.1
                                                    )Copper
                                                    
                                                    Derivative
      Asset
                                                    
                                                    
                                                    —
                                                    
                                                    Derivative
      Liability
                                                    
                                                    
                                                    (0.2
                                                    )Total
      derivatives not designated ashedging
      instruments
                                                    
                                                    
                                                    
                                                    $
                                                    —
                                                    
                                                    
                                                    
                                                    $
                                                    (0.3
                                                    )Total
      Derivatives
                                                    
                                                    
                                                    
                                                    $
                                                    1.6
                                                    
                                                    
                                                    
                                                    $
                                                    (3.0
                                                    )
 
 Asset
      Derivatives
                                                                  
                                                                  Liability
      Derivatives($s
      in millions)
                                                                  
                                                                  December
      31, 2008
                                                                  
                                                                  December
      31, 2008Derivatives
      designated as hedging
                                                                  
                                                                  Balance
      Sheet
                                                                  
                                                                  
                                                                  
                                                                  Balance
      Sheetinstruments
                                                                  
                                                                  Location
                                                                  
                                                                  Fair
      Value
                                                                  
                                                                  Location
                                                                  
                                                                  Fair
      ValueCommodity
      Contracts:Copper
      – Customer Contracts
                                                                  
                                                                  Derivative
      Asset
                                                                  
                                                                  $
                                                                  —
                                                                  
                                                                  Derivative
      Liability
                                                                  
                                                                  $
                                                                  (4.9
                                                                  )Copper
      – Base Inventory
                                                                  
                                                                  Derivative
      Asset
                                                                  
                                                                  
                                                                  0.2
                                                                  
                                                                  Derivative
      Liability
                                                                  
                                                                  
                                                                  (0.1
                                                                  )Total
      derivatives designated ashedging
      instruments
                                                                  
                                                                  
                                                                  
                                                                  $
                                                                  0.2
                                                                  
                                                                  
                                                                  
                                                                  $
                                                                  (5.0
                                                                  )
 
 Derivatives
      not designated as hedging
                                                    
                                                    Balance
      Sheet
                                                    
                                                    
                                                    
                                                    Balance
      Sheetinstruments
                                                    
                                                    Location
                                                    
                                                    Fair
      Value
                                                    
                                                    Location
                                                    
                                                    Fair
      ValueCommodity
      ContractsNickel
                                                    
                                                    Derivative
      Asset
                                                    
                                                    $
                                                    —
                                                    
                                                    Derivative
      Liability
                                                    
                                                    $
                                                    (0.1
                                                    )Tin
                                                    
                                                    Derivative
      Asset
                                                    
                                                    
                                                    0.1
                                                    
                                                    Derivative
      Liability
                                                    
                                                    
                                                    —Copper
                                                    
                                                    Derivative
      Asset
                                                    
                                                    
                                                    —
                                                    
                                                    Derivative
      Liability
                                                    
                                                    
                                                    (0.3
                                                    )Total
      derivatives not designated ashedging
      instruments
                                                    
                                                    
                                                    
                                                    $
                                                    0.1
                                                    
                                                    
                                                    
                                                    $
                                                    (0.4
                                                    )Total
      Derivatives
                                                    
                                                    
                                                    
                                                    $
                                                    0.3
                                                    
                                                    
                                                    
                                                    $
                                                    (5.4
                                                    )




The
effect of derivative instruments on the Condensed Consolidated Statements of
Operations for the quarters ended April 5, 2009 and March 30, 2008 were as
follows:





27




Cash Flow
Hedges


Amount of gain or (loss) reclassified fromAmount of gain or (loss) recognized in OCI on
                                          
                                          
                                          
                                          Accumulated OCI into earnings (effective($s in millions)
                                          
                                          derivative(effectiveportion)
                                          
                                          
                                          
                                          portion)Location of gain or (loss)reclassified fromDerivatives in cash-flow
                                          
                                          
                                          
                                          
                                          
                                          
                                          Accumulated OCI into
                                          
                                          Three months ended
                                          
                                          
                                          Three months endedhedging relationships
                                          
                                          April 5, 2009 *
                                          
                                          
                                          March 30, 2008
                                          
                                          earnings (effective portion)
                                          
                                          April 5, 2009
                                          
                                          
                                          March 30, 2008Commodity
      Contracts:Copper
      - Customer Contracts
                                          
                                          $
                                          (1.6
                                          )
                                          
                                          $
                                          0.3
                                          
                                          Cost
      of goods sold
                                          
                                          $
                                          (1.2
                                          )
                                          
                                          $
                                          0.4Copper
      - Future Receipts
                                          
                                          
                                          —
                                          
                                          
                                          
                                          (0.8
                                          )
                                          Cost
      of goods sold
                                          
                                          
                                          —
                                          
                                          
                                          
                                          (0.6
                                          )Total
                                          
                                          $
                                          (1.6
                                          )
                                          
                                          $
                                          (0.5
                                          )
                                          
                                          
                                          $
                                          (1.2
                                          )
                                          
                                          $
                                          (0.2
                                          )
  *The
company expects to recognize these losses over the next 12
months.





Amount of gain or (loss) recognized in earningson derivative (ineffective portion and amount($s in millions)
                        
                        
                        
                        excluded from effectiveness testing)Location of gain or (loss) recognizedin earnings on derivative (ineffectiveDerivatives in cash-flow
                        
                        portion and amount excluded from
                        
                        Three months ended
                        
                        
                        Three months endedhedging relationships
                        
                        effectiveness testing)
                        
                        April 5, 2009
                        
                        
                        March 30, 2008Commodity
      Contracts:Copper
      - Customer Contracts
                        
                        Cost
      of goods sold
                        
                        $
                        (0.3
                        )
                        
                        $
                        (0.2
                        )Total
                        
                        
                        
                        $
                        (0.3
                        )
                        
                        $
                        (0.2
                        )





Fair Value
Hedges





Amount
      of gain or (loss) recognized in earningsAmount
      of gain or (loss) recognized in earnings
                        
                        
                        on
      derivative (ineffective portion and amount($s
      in millions)
                        
                        
                        
                        on
      derivative
                        
                        
                        excluded
      from effectiveness testing)Location
      of gain or (loss)Derivatives in fair value
                        
                        recognized
      in earnings on
                        
                        Three
      months ended
                        
                        
                        Three
      months ended
                        
                        
                        Three
      months ended
                        
                        
                        Three
      months endedhedging
      relationships
                        
                        derivative
                        
                        April
      5, 2009
                        
                        
                        March
      30, 2008
                        
                        
                        April
      5, 2009
                        
                        
                        March
      30, 2008Commodity
      Contracts:Copper
      - Base Inventory
                        
                        Cost
      of goods sold
                        
                        $
                        0.1
                        
                        
                        $
                        (0.1
                        )
                        
                        $
                        —
                        
                        
                        $
                        0.4Silver
      - Base Inventory
                        
                        Cost
      of goods sold
                        
                        
                        —
                        
                        
                        
                        0.1
                        
                        
                        
                        0.1
                        
                        
                        
                        —Total
                        
                        
                        
                        $
                        0.1
                        
                        
                        $
                        (0.0
                        )
                        
                        $
                        0.1
                        
                        
                        $
                        0.4





Non Designated
Hedges





Amount
      of gain or (loss) recognized in earnings($'s
      in millions)
                        
                        
                        
                        on
      derivativeLocation
      of gain or (loss)Derivatives
      not designated as
                        
                        recognized
      in earnings on
                        
                        Three
      months ended
                        
                        
                        Three
      months endedhedging
      instruments
                        
                        derivative
                        
                        April
      5, 2009
                        
                        
                        March
      30, 2008Commodity
      Contracts:Tin
                        
                        Cost
      of goods sold
                        
                        $
                        0.1
                        
                        
                        $
                        —Copper
                        
                        Cost
      of goods sold
                        
                        
                        (0.1
                        )
                        
                        
                        —Total
                        
                        
                        
                        $
                        0
      .0
                        
                        
                        $
                        —





Material
Limitations





The
disclosures with respect to the above noted risks do not take into account the
underlying commitments or anticipated transactions.  If the underlying
items were included in the analysis, the gains or losses on the futures
contracts may be offset.  Actual results will be determined by a
number of factors that are not generally under our control and could vary
significantly from those factors disclosed.


28


We are
exposed to credit losses in the event of nonperformance by counterparties on the
above instruments, as well as credit or performance risk with respect to our
hedged customers’ commitments. Although nonperformance is possible, we do not
anticipate nonperformance by any of these parties.





(23)
            Subsequent
      Events




On
February 26, 2009, we announced the commencement of an offer (the “Exchange
Offer”) to each of the holders of our 10.5% Senior Notes and our 10.5% Senior
Exchange Notes due April 1, 2009 and March 28, 2009 (the “Existing Notes”),
respectively, to exchange these notes for new notes in order to refinance those
maturities. The Exchange Offer was successfully consummated on April 28, 2009,
when we issued $121.6 million aggregate principal amount of our 15% Senior
Secured Notes due 2012 (the “Senior Secured Notes”) pursuant to an indenture,
dated as of April 28, 2009, among the Company, the subsidiary guarantors named
therein and U.S. Bank National Association, as trustee and collateral agent (the
“Indenture”).  As security for the performance of our obligations
under the Indenture, we entered into a Guarantee and Collateral Agreement, dated
as of April 28, 2009, with the subsidiary guarantors and the collateral agent
(the “Guarantee and Collateral Agreement”).  As part of the Exchange
Offer, holders of approximately $83.3 million in principal amount of our 10.5%
Senior Notes due 2009 and the $38.3 million in principal amount of our 10.5%
Senior Exchange Notes due 2009 exchanged such notes for our Senior Secured
Notes.  As a result of the successful completion of the Exchange
Offer, we have approximately $121.6 million in aggregate principal amount of
Senior Secured Notes outstanding and all of the Existing Notes have been
exchanged or retired.





The terms
of the Exchange Offer and new 15% Senior Secured Notes are as
follows:





The
Senior Secured Notes will mature on March 31, 2012. We will pay interest on the
Senior Secured Notes at 15% per annum until maturity, of which 10% is payable in
cash and 5% is payable by issuing additional Senior Secured Notes (“PIK Notes”);
provided however, that (a) if the outstanding principal amount of Senior Secured
Notes at the close of business on March 31, 2010 exceeds $90 million, the
interest rate will increase to 16%, of which 10% will be payable in cash and 6%
will be payable in PIK Notes, and (b) if the outstanding principal amount of
Senior Secured Notes at the close of business on March 31, 2011 exceeds $60
million, the interest rate will increase to 17%, of which 10% will be payable in
cash and 7% will be payable in PIK Notes. We will pay interest semiannually on
March 31 and September 30 of each year, commencing September 30, 2009. Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.





The
Senior Secured Notes are secured on a first-priority basis by substantially all
of our assets and those of the subsidiary guarantors and will rank pari passu in
right of payment with all of our existing and future senior indebtedness and
senior in right of payment to all of our future subordinated indebtedness, if
any. The Guarantee and Collateral Agreement provides for the unconditional
guarantee by the subsidiary guarantors of the payment of the principal and
interest on the Senior Secured Notes and the performance by us of all other
obligations under the Indenture.





At any
time and from time to time, we may redeem all or a part of the Senior Secured
Notes upon not less than 30 nor more than 60 days’ notice, at a redemption price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, on the Senior Secured Notes redeemed to the applicable redemption date,
subject to the rights of holders on the relevant record date to receive interest
on the relevant interest payment date. Unless we default in the payment of the
redemption price, interest will cease to accrue on the Senior Secured Notes or
portions thereof called for redemption on the applicable redemption date. Under
the Indenture, we are not required to make mandatory redemption or sinking fund
payments with respect to the Senior Secured Notes; provided however, that if the
Company grants any liens to lenders under a credit agreement, we will issue a
notice of redemption to redeem an amount of Senior Secured Notes equal to 55% of
“eligible NAFTA inventory” and “eligible NAFTA accounts receivable” (in each
case as such terms are defined in such credit agreement). A notice of redemption
will be delivered immediately prior to or concurrently with the closing of such
credit agreement.





The
Indenture related to the Senior Secured Notes contains covenants that limit the
ability of the Company and our subsidiaries to incur additional indebtedness;
pay dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in transactions
with affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; consolidate,
merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in sale/leaseback transactions.





Item 2.                   Management’s
Discussion and Analysis of Financial Condition and Results of
Operations





This
report contains forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995.  Forward-looking statements include all statements that do not
relate solely to current or historical fact, but address events or developments
that we anticipate will occur in the future.  Forward-looking
statements include statements regarding our goals, beliefs, plans or current
expectations, taking into account the information currently available to our
management.  When we use words such as “anticipate”, “intend”,
“expect,”, “believe”, “plan”, “may”, “should” or “would” or other words that
convey uncertainty of future events or outcome, we are making forward-looking
statements.  Statements relating to future sales, earnings, operating
performance, restructuring strategies, capital expenditures and sources and uses
of cash, for example, are forward-looking statements.


29


These forward-looking statements are
subject to various risks and uncertainties which 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
and circumstances occurring after the date hereof, or to reflect the occurrence
of unanticipated events.  Information concerning risk factors is
contained under Item 1A “Risk Factors” in our Annual Report on Form
10-K  for the year ended December 31, 2008, as well as in the section
entitled “Risk Factors” in Part II, Item 1A of this report.  You
should carefully consider all of the risks and all other information contained
in or incorporated by reference in this report and in our filings with the
SEC.  These risks are not the only ones we face.  Additional
risks and uncertainties not presently known to us, or which we currently
consider immaterial, also may adversely affect us. If any of these risks actually occur, our
business, financial condition and results of operations could be materially and
adversely affected.





Company
Overview





Wolverine
Tube, Inc. is a global manufacturer and distributor of copper and copper alloy
tube, fabricated products, and metal joining products. We currently operate our
seven facilities in the United States, Mexico, China, and Portugal. We also have
distribution operations in the Netherlands and the United States. Our focus is
on custom-engineered, higher value-added tubular products, including fabricated
copper components 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,
industrial equipment, power generation, petrochemicals, and chemical processing.
We believe that we have the broadest product offering of packaged solutions and
cross selling opportunities.





Prior to
the decision to sell Wolverine Tube Canada Inc. (“WTCI”), the Company operated
in two business segments:  Commercial Products and Wholesale Products.
Commercial Products consist primarily of high value added products sold directly
to original equipment manufacturers and include technical, industrial, and
copper alloy tubes, fabricated products, and metal joining products. The
Commercial Products segment includes manufacturing plants in the United States,
Mexico, and Portugal and distribution centers in the Netherlands and the United
States. Wholesale Products were commodity-type plumbing and refrigeration tube
products, which were primarily sold to plumbing wholesalers and distributors.
With the sale of our London, Ontario business in July 2008, which primarily
produced wholesale products, and the discontinuance of the production of
wholesale operations at our Decatur, Alabama facility in December of 2007, the
wholesale products segment has been eliminated.





Recapitalization
Plan





On
February 1, 2007, we announced a recapitalization plan which provided
significant equity proceeds to Wolverine. We completed the first phase of this
recapitalization plan, a private placement of 50,000 shares of Series A
Convertible Preferred Stock, for $50.0 million, purchased by The Alpine Group,
Inc. (“Alpine”) and a fund managed by Plainfield Asset Management LLC
(“Plainfield”) on February 16, 2007, pursuant to a Preferred Stock Purchase
Agreement (the “Preferred Stock Purchase Agreement”).  Pursuant to our
recapitalization plan, in August 2007, we commenced a common stock rights
offering which closed on October 29, 2007. Our stockholders purchased
25,444,592 shares of common stock in the rights offering, resulting in gross
proceeds of $28.0 million. Additionally, under the terms of the call option
described in the Preferred Stock Purchase Agreement, Alpine purchased an
additional 4,494 shares of Series A Convertible Preferred Stock on January 25,
2008 for $4.5 million in order to maintain the fully diluted ownership by Alpine
and Plainfield in Wolverine at 55.0%.





We also
pursued a financial restructuring plan with respect to our 10.5% and 7.375%
Senior Notes, our secured revolving credit facility and our receivables sale
facility. In light of market conditions which negatively affected our ability to
execute such a comprehensive refinancing strategy, during 2008, we took certain
actions to be in a position to retire the 7.375% Senior Notes on their maturity
date of August 1, 2008. We extended the maturity of our secured revolving credit
facility and our receivables sale facility to February 19, 2009.  In
February 2008, we sold substantially all of the assets of our STP business for
net proceeds of $22.1 million plus a working capital payment to us of
approximately $2.8 million. In March 2008 we sold 30.0% of our WTS subsidiary
for $9.5 million. On March 20, 2008, Plainfield refinanced $38.3 million of the
7.375% Senior Notes held by it by exchanging them for 10.5% Senior Exchange
Notes due March 28, 2009 and Alpine purchased 10,000 shares of our Series B
Convertible Preferred Stock for $10.0 million, under terms substantially similar
to the Series A Convertible Preferred Stock. On April 21, 2008 we sold our
Booneville, Mississippi facility which was closed in January 2008, for $1.4
million.  In July 2008, we sold our London, Ontario wholesale and
commercial tube business for net proceeds of approximately $41.2
million.  These actions provided the liquidity required to repurchase
or repay the outstanding 7.375% Senior Notes on or before their maturity in
August 2008. On February 29, 2008, we repurchased $12.0 million in face amount
of our 7.375% Senior Notes at a discount below the face value of the notes, and
on April 8, 2008 we repurchased an additional $25.0 million in face amount of
our 7.375% Senior Notes, also at a discount below the face value of the notes,
leaving $61.4 million in face amount of our 7.375% Senior Notes, which we paid
at maturity on August 1, 2008.  On September 15, 2008 we sold an
additional 20% of our WTS subsidiary, raising $10.1 million.


30


On
February 26, 2009, we announced the commencement of an offer (the “Exchange
Offer”) to each of the holders of our 10.5% Senior Notes and our 10.5% Senior
Exchange Notes due April 1, 2009 and March 28, 2009 (the “Existing Notes”),
respectively, to exchange these notes for new notes in order to refinance those
maturities. The Exchange Offer was successfully consummated on April 28, 2009,
when we issued $121.6 million aggregate principal amount of our 15% Senior
Secured Notes due 2012 (the “Senior Secured Notes”) pursuant to an indenture,
dated as of April 28, 2009, among the Company, the subsidiary guarantors named
therein and U.S. Bank National Association, as trustee and collateral agent (the
“Indenture”).  As security for the performance of our obligations
under the Indenture, we entered into a Guarantee and Collateral Agreement, dated
as of April 28, 2009, with the subsidiary guarantors and the collateral agent
(the “Guarantee and Collateral Agreement”).  As part of the Exchange
Offer, holders of approximately $83.3 million in principal amount of our 10.5%
Senior Notes due 2009 and the $38.3 million in principal amount of our 10.5%
Senior Exchange Notes due 2009 exchanged such notes for our Senior Secured
Notes.  As a result of the successful completion of the Exchange
Offer, we have approximately $121.6 million in aggregate principal amount of
Senior Secured Notes outstanding and all of the Existing Notes have been
exchanged or retired.





The
Senior Secured Notes will mature on March 31, 2012.  We will pay
interest on the Senior Secured Notes at 15% per annum until maturity, of which
10% is payable in cash and 5% is payable by issuing additional Senior Secured
Notes (“PIK Notes”); provided however, that (a) if the outstanding principal
amount of Senior Secured Notes at the close of business on March 31, 2010
exceeds $90 million, the interest rate will increase to 16%, of which 10% will
be payable in cash and 6% will be payable in PIK Notes, and (b) if the
outstanding principal amount of Senior Secured Notes at the close of business on
March 31, 2011 exceeds $60 million, the interest rate will increase to 17%, of
which 10% will be payable in cash and 7% will be payable in PIK
Notes.  We will pay interest semiannually on March 31 and September 30
of each year, commencing September 30, 2009.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.





The
Senior Secured Notes are secured on a first-priority basis by substantially all
of our assets and those of the subsidiary guarantors and will rank pari passu in
right of payment with all of our existing and future senior indebtedness and
senior in right of payment to all of our future subordinated indebtedness, if
any.  The Guarantee and Collateral Agreement provides for the
unconditional guarantee by the subsidiary guarantors of the payment of the
principal and interest on the Senior Secured Notes and the performance by us of
all other obligations under the Indenture.





At any
time and from time to time, we may redeem all or a part of the Senior Secured
Notes upon not less than 30 nor more than 60 days’ notice, at a redemption price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, on the Senior Secured Notes redeemed to the applicable redemption date,
subject to the rights of holders on the relevant record date to receive interest
on the relevant interest payment date.  Unless we default in the
payment of the redemption price, interest will cease to accrue on the Senior
Secured Notes or portions thereof called for redemption on the applicable
redemption date.  Under the Indenture, we are not required to make
mandatory redemption or sinking fund payments with respect to the Senior Secured
Notes; provided however, that if the Company grants any liens to lenders under a
credit agreement, we will issue a notice of redemption to redeem an amount of
Senior Secured Notes equal to 55% of “eligible NAFTA inventory” and “eligible
NAFTA accounts receivable” (in each case as such terms are defined in such
credit agreement).  A notice of redemption will be delivered
immediately prior to or concurrently with the closing of such credit
agreement.





The
Indenture contains covenants that limit the ability of the Company and our
subsidiaries to incur additional indebtedness; pay dividends or distributions
on, or redeem or repurchase capital stock; make investments; issue or sell
capital stock of subsidiaries; engage in transactions with affiliates; create
liens on assets; transfer or sell assets; guarantee indebtedness; restrict
dividends or other payments of subsidiaries; consolidate, merge or transfer all
or substantially all of its assets and the assets of its subsidiaries; and
engage in sale/leaseback transactions.





Results
of Operations





The
following discussion summarizes the significant factors affecting the
consolidated operating results of the Company for the three months ended April
5, 2009 and March 30, 2008.  This discussion should be read in
conjunction with the Unaudited Condensed Consolidated Financial Statements and
Notes to the Unaudited Condensed Consolidated Financial Statements contained in
Item 1 above, and the Consolidated Financial Statements and related Notes
included in our Annual Report on Form 10-K for the year ended December 31,
2008.





Executive
Summary





·
            Net
      sales for the quarter ended April 5, 2009 were $109.6 compared to $201.5
      for the quarter ended March 30, 2008. The 45.6 % decrease in sales year
      over year was the result of a 55.7% decrease in the average COMEX price
      for copper in 2009 compared to 2008 and the impact of decreasing demand in
      the appliance markets and in the air conditioning markets, both
      domestically and internationally.




31




·
            The
      number of pounds shipped decreased to 30.7 million pounds, a 24.6%
      decrease in the first quarter of 2009 from the previous year reflecting
      the declining markets due to overall economic
    uncertainties.




·
            Our
      gross profit for the first quarter of 2009 was 3.3% of net sales as
      compared to 5.5% for the same quarter of 2008. Gross profit was adversely
      affected by lower overall volumes, including lower volumes for value-added
      products such as technical tube and tube forming products, which
      historically have higher gross
margins.




·
            The
      net loss applicable to common stockholders for quarter ended April 5, 2009
      was $10.6 million compared to income of $1.7 million for the quarter ended
      March 30, 2008.  The decrease in sales and resulting lower gross
      margins more than offset improvements in selling, general and
      administrative (“SG&A”) expenses, restructuring and impairment
      charges, interest expense, net and other operating
    expenses.




·
            On
      February 19, 2009, our receivables sale facility, secured revolving credit
      facility, and our silver consignment facility were
    terminated.




·
            On
      February 26, 2009, the Company announced the commencement of an Exchange
      Offer to each of the holders of its 10.5% Senior Notes and its 10.5%
      Senior Exchange Notes due 2009 for new notes due 2012. On April 21, 2009,
      the Company announced that it had received tenders with respect to $83.3
      million in aggregate principal amount of the 10.5% Senior Notes,
      representing 84% of the outstanding 10.5% Senior Notes of $99.4
      million.  Including the $38.3 million in principal amount of the
      10.5% Senior Exchange Notes, holders of $121.6 million, or 88%, of the
      Company’s $137.7 million 10.5% Senior Notes and 10.5% Senior Exchange
      Notes agreed to exchange their notes for the 15% Senior Secured Notes due
      2012. The Company closed the Exchange offer on April 28, 2009. The Company
      redeemed $16.1 million of the 10.5% Senior Notes and paid a 3% exchange
      fee to holders of the 10.5% Senior Notes and 10.5% Senior Exchange Notes
      that exchanged their notes for the 15% Senior Secured
    Notes.




For
the Three Months Ended April 5, 2009, Compared with the Three Months Ended March
30, 2008:





For the three months ended
                    
                    
                    Increase
                    
                    
                    %
      Increase(In
      thousands, except for percentages)
                    
                    April 5, 2009
                    
                    
                    March 30, 2008
                    
                    
                    (Decrease)
                    
                    
                    (Decrease)Total
      Pounds Shipped
                    
                    
                    30,684
                    
                    
                    
                    40,673
                    
                    
                    
                    (9,989
                    )
                    
                    
                    (24.6
                    )%


Total
pounds shipped decreased by 24.6% in 2009 compared to the same quarter of 2008
due to lower demand in domestic and international air conditioning markets and
decreased demand in domestic appliance markets.





For the three months ended
                    
                    
                    Increase
                    
                    
                    %
      Increase(In
      thousands, except for percentages)
                    
                    April 5, 2009
                    
                    
                    March 30, 2008
                    
                    
                    (Decrease)
                    
                    
                    (Decrease)Net
      Sales
                    
                    $
                    109,602
                    
                    
                    $
                    201,458
                    
                    
                    $
                    (91,856
                    )
                    
                    
                    (45.6
                    )%


The 45.6%
decrease in net sales for the first quarter of 2009 as compared to the same
quarter of 2008 resulted from the 24.6% decrease in pounds shipped, changes in
mix reflecting lower volumes of value-added products such as technical tube and
tube forming products, and a 55.7% decrease in the price of copper year over
year.  As a result, our per unit selling price for the quarter ended
April 5, 2009 was $3.57 compared to $4.95 for the quarter ended March 30,
2008.





For the three months ended
                    
                    
                    Increase
                    
                    
                    %
      Increase(In
      thousands, except for percentages)
                    
                    April 5, 2009
                    
                    
                    March 30, 2008
                    
                    
                    (Decrease)
                    
                    
                    (Decrease)Gross
      Profit
                    
                    $
                    3,575
                    
                    
                    $
                    11,003
                    
                    
                    $
                    (7,428
                    )
                    
                    
                    (67.5
                    )%





Gross
profit was adversely affected by overall lower volumes due to decreased demands
for air conditioning and appliance products which lowered our volume at several
locations and the negative impact on gross profit from lower volumes on higher
value-added products. We were also not able to fully recover our overhead at
these plants due to the reduced volume levels.





Selling,
general and administrative expenses of $5.7 million for the quarter ended April
5, 2009 were $1.3 million less than the quarter ended March 30, 2008, reflecting
the reduction of our corporate, general and administrative staff as part of the
restructuring of the Company’s North American operations in 2008.





Net gain
on divestitures recorded in the first quarter of 2008 of $5.4 million reflects
the gain on the sale of a 30.0% indirect equity interest in Wolverine Tube
Shanghai (“WTS”) to The Wieland Group (“Wieland”) on March 14,
2008.  No divestitures were recorded in the first quarter of
2009.


32


Restructuring
and impairment charges for the quarter ended April 5, 2009 were $0.8 million
compared to $3.9 million for the same quarter of 2008.  The $0.8
million expense for the 2009 quarter included $0.3 million associated with the
closure of our Booneville, Mississippi facility and the significant downsizing
of our Decatur, Alabama facility, severance charges of $0.4 million in
connection with our continued SG&A restructuring effort and $0.1 million
related to the reduced headcount due to realigning operations at our Monterrey,
Mexico facility. For the period ended March 30, 2008, the $3.9 million
restructuring expenses included $3.5 million primarily related to the actions at
our Decatur, Alabama and Booneville, Mississippi facilities and the reduction of
corporate general and administration burden, and $0.4 million resulted from the
non-cash write down of the fair value of the Booneville, Mississippi assets held
for sale to the sale price.





Net
interest expense decreased by $1.4 million to $3.5 million for the quarter ended
April 5, 2009.  Bond interest was reduced by $1.8 million due to the
7.375% Senior Notes being paid in August of 2008.  This was offset by
a $0.4 million reduction in interest income from funds invested as a result of
the influx of cash from our recapitalization plan in the first quarter of
2008.





Other
income/expense, net for first quarter of 2009 was income of $0.2 million,
primarily from the sale of certain equipment from our closed Decatur, Alabama
facility.





Non-controlling
interest for the quarter ended March 30, 2008 of $0.1 million reflects the
earnings of the 30.0% equity interest in WTS, which was purchased by Wieland
effective March 14, 2008.





Equity in
earnings of unconsolidated subsidiary for the quarter ended April 5, 2009 of
$0.3 million represents our 50.0% equity investment in WTS. Wieland purchased an
additional indirect 20.0% equity interest in WTS on September 15, 2008, at which
time we began recording our investment in WTS using the equity
method.





A net tax
expense of $0.4 million was recorded in 2009 as compared with a net tax expense
of $1.1 million in 2008.  Tax expense in 2009 reflects taxes accrued
in foreign entities where we had taxable income for the quarter. Tax expense in
2008 reflects taxes accrued in foreign entities where we had taxable income for
the quarter and capital gains taxes accrued on the sale of stock in our Shanghai
operations.





Dividends
on our Series A and Series B Convertible Preferred Stock were $2.1 million for
the quarter ended April 5, 2009 versus $1.2 million during the quarter ended
March 30, 2008.  The increase in the dividends was due in part to the
additional shares of preferred stock purchased by Alpine during the first six
months of 2008. Dividends on the preferred stock are cumulative at an initial
annual rate of 8.0% as to the Series A Convertible Preferred Stock and 8.5% as
to the Series B Convertible Preferred Stock, subject to dividend rate
adjustments as described below.





We are
entitled to defer dividends on the preferred stock to the extent that we do not
have cash or financing available to us to cover the full quarterly dividend
amount in compliance with our contractual obligations. With respect to the
Series A Convertible Preferred Stock, any deferred dividend will accrue at an
annual rate of 10.0% if the dividend payment date is before January 31, 2012 and
at an annual rate of 12.0% per annum if the dividend payment date is on or after
January 31, 2012. Any deferred dividend with respect to the Series B Convertible
Preferred Stock will accrue at an annual rate of 10.5% if the dividend payment
date is before January 31, 2012 and at an annual rate of 12.5% per annum if the
dividend payment date is on or after January 31, 2012. Furthermore, the dividend
rate on both the Series A Convertible Preferred Stock and Series B Convertible
Preferred Stock is subject to additional adjustment, as provided below, as long
as certain conditions are not satisfied. Due to restrictions on cash available
to pay preferred stock dividends imposed by the indenture governing our 10.5%
Senior Notes due 2009 and recently issued Senior Secured Notes, we have deferred
$7.7 million in preferred stock dividends that accrued through the period ended
April 5, 2009, as reflected in the Condensed Consolidated Balance Sheets in
accrued dividends.





In
addition, if at any time after June 16, 2007, with respect to the Series A
Convertible Preferred Stock, or June 30, 2008 with respect to the Series B
Convertible Preferred Stock, the shares of common stock into which the
applicable series of preferred stock is convertible are not registered for
resale under the Securities Act of 1933, then the dividend rate on the
applicable series of preferred stock will increase by 0.5% for each quarter in
which this condition remains unsatisfied, up to a maximum increase of 2.0%. Due
to certain restrictions imposed under the federal securities laws upon the
amount of our securities that may be registered for resale by the preferred
stockholders, as affiliates of Wolverine, we continue to be  unable to
satisfy the resale condition applicable to both the Series A Convertible
Preferred Stock and Series B Convertible Preferred Stock. As a result, the
maximum dividend rate on the Series A Convertible Preferred Stock could rise to
12.0% prior to January 31, 2012 or 14.0% on or after January 31, 2012 and on the
Series B Convertible Preferred Stock could rise to 12.5% prior to January 31,
2012 and 14.5% on or after January 31, 2012. As of April 5, 2009, we are
accruing dividends at the maximum rate permitted prior to January 31, 2012 on
the Series A Convertible Preferred Stock at 12.0% and the Series B Convertible
Preferred Stock at 12.5%.





The net
loss applicable to common shares in the first quarter of 2009 was $10.6 million,
or a loss of $0.26 per common share, compared with a net income of $1.7 million,
or a loss of $0.05 per common share in 2008.





33




Liquidity
and Capital Resources





The
following table presents selected information concerning our financial
condition:




(In
      thousands)
                      
                      April 5, 2009
                      
                      
                      December 31, 2008Cash
      and Cash Equivalents
                      
                      $
                      54,193
                      
                      
                      $
                      33,537Working
      Capital*
                      
                      $
                      44,994
                      
                      
                      $
                      46,282Total
      Debt
                      
                      $
                      139,054
                      
                      
                      $
                      137,670Current
      Ratio*
                      
                      
                      1.98
                      
                      
                      
                      1.84
 *
Excludes cash, restricted cash and debt




Overview
and Outlook





Strategically,
our objective is to strengthen and reposition the Company by concentrating on
improving its competitiveness, operating performance and customer service, and
by becoming a leading global supplier of value added solutions and products in
systems that require high performance and energy efficient heat transfer and
cooling. We paid our 7.375% Senior Notes when they matured on August 1, 2008 and
refinanced our 10.5% Senior Notes and 10.5% Senior Exchange Notes on April 28,
2009 through an Exchange Offer as described in Note 23, Subsequent Events, in the
Notes to the Unaudited Condensed Consolidated Financial Statements in this Form
10-Q.





See the
discussion of risks related to our liquidity under Risk Factors in our Form 10-K
for the year ended December 31, 2008 and in Part II, Item 1A of this Form
10-Q.





Sources
of Liquidity





During
the balance of 2009, our sources of liquidity are cash and cash equivalents
(approximately $15.0 million of unrestricted domestic cash as of the closing of
the Exchange Offer), cash provided by operations and amounts available from our
foreign subsidiaries. We do not currently have domestic liquidity facilities in
place as they were terminated on the maturity date of February 19, 2009. Future
funding requirements with respect to our liquidity requirements could
vary from the Company’s current estimates and could affect our ability to
generate sufficient cash flow to meet our obligations and sustain our operations
which raises substantial doubt about our ability to continue as a going concern.
Management’s plans concerning these matters are also discussed in Note 1, Basis of Reporting for Interim
Financial Statements, to the Condensed Consolidated Financial
Statements.





Cash and cash equivalents.For the three months ending April 5, 2009, we had a net increase in cash
and cash equivalents of $20.7 million from December 31, 2008.  Cash
was provided from the decrease in restricted cash of $25.7 million, cash
provided by investing activities of $0.1 million, and an increase in foreign
subsidiaries cash of $1.3 million, offset by cash used in operating activities
of $5.6 million,  cash used in financing activities of $0.6 million
and the effect of exchange rates on cash and cash equivalents of $0.2
million.





Restricted cash.Our
liquidity is affected by restricted cash balances, which are included in current
assets and are not available for general corporate use.  Restricted
cash as of April 5, 2009 and December 31, 2008 was $12.0 million and $37.7
million, respectively.  Restricted cash at April 5, 2009 included $5.7
million related to deposits for margin calls on our metal hedge programs, $5.8
million of deposits to cover our insurance reserves and $0.5 million of other
restricted cash deposits.  Restricted cash at December 31, 2008
included $16.9 million related to deposits for margin calls on our metal hedge
programs, $5.9 million on deposit to cover our insurance reserves, $14.0 million
of deposits to cover our silver consignment facility and $0.9 million of other
restricted cash deposits. The reduction in restricted cash supporting letters of
credit was used primarily to purchase silver that was previously leased through
our silver consignment facility which was terminated on February 19,
2009





Amounts available from our foreign
subsidiaries’ cash and liquidity facilities.Our credit facilities in
Portugal and the Netherlands are available for working capital needs. Our
ability to access these liquidity facilities depends on the amount of available
borrowing base and is subject to our compliance with the terms and conditions of
the facility agreements.





Uses
of Liquidity





On
February 19, 2009 we purchased our previously leased silver inventory and on
April 28, 2009 we redeemed $16.1 million of the 10.5% Senior Notes and paid
interest and fees associated with the Exchange Offer.  Our uses of
liquidity for the balance of 2009 should consist of normal operating activities,
capital and restructuring expenditures of approximately $5.3 million and
interest on our Senior Secured Notes.





Redemption of Existing
NotesOn February 26,  2009, we announced the
commencement of the Exchange Offer to each of the holders of our Existing Notes
to exchange these notes for new notes in order to refinance those
maturities.  The Exchange Offer was successfully consummated on April
28, 2009.  $83.3 million of the 10.5% Senior Notes and $38.3 million
of the 10.5% Senior Exchange Notes were exchanged for new Senior Secured
Notes.  The remaining $16.1 million of 10.5% Senior Notes were repaid
on April 28, 2009.


34


Purchase of silver from funds
securing our consignment facility.On February 16, 2007 we entered
into a silver consignment facility with HSBC Bank USA N.A. (“HSBC”). The
consignment of silver to us by HSBC under the consignment facility was
conditioned on HSBC’s prior receipt and the continued effectiveness of letters
of credit in an aggregate amount such that the value of all outstanding
consigned silver under the consignment facility is not more than 85% of the
aggregate undrawn face amount of the letters of credit. The facility terminated
on February 19, 2009 and HSBC drew $13.5 million on the letters of credit to
cover the cost of the consigned silver that we simultaneously purchased. The
$1.2 million balance of the letters of credit was refunded to us by
Wachovia.





Exchange Offer interest and fees
paid. On April 28, 2009 we paid $8.3 million in accrued interest and $3.6
million in exchange fees related to the successfully consummated Exchange
Offer.





Cash used by
operations.Cash used for operations in the first three months
of 2009 was $5.6 million compared to $14.2 million in the same period of
2008.





Capital
expenditures.  Capital
expenditures for the first quarter of 2009 totaled $1.4 million compared to $1.5
million for the first quarter of 2008. Capital expenditures include asset
replacement, environmental and safety compliance, cost reduction and
productivity improvement items. Projected capital expenditures for the remainder
of 2009 are $5.3 million.





Interest on our Senior Secured
Notes. As of July 5, 2009, we have paid interest of $2.3 million on our
10.5% Senior Exchange Notes and $6.0 million on our 10.5% Senior
Notes.  The $8.3 million interest was paid on April 28, 2009 when the
Exchange Offer was successfully consummated.  In addition, $5.3
million is scheduled to be paid on September 30, 2009, which represents the 10%
cash interest portion of the Senior Secured Notes.





Funding of pension
obligations. In February 2009, the Pension Benefit Guaranty Corporation
(the “PBGC”) advised the Company that it may be required to accelerate funding
of certain pension related obligations as a result of the closure and/or
sale of certain operations of the Company.  The PBGC has not made a
final determination of the amount or timing of any payments.  Since
February 2009, the Company and the PBGC have been engaged in discussions
regarding this matter. Based upon these discussions and in consultation with
special counsel, the Company believes it is reasonably possible that the matter
will ultimately be resolved through an agreement with the PBGC to fund an amount
to be determined and paid in the future.  The Company believes any
such agreement would result in accelerated funding of the already accrued
pension obligations. Accordingly, no additional pension accrual is required at
April 5, 2009 or December 31, 2008 since the amount and timing of additional
contributions, if any, cannot be reasonably estimated.





Off-Balance
Sheet Arrangements





We had no
off-balance sheet arrangements as of April 5, 2009 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.





Liquidity
Facilities





On
February 19, 2009, we terminated our domestic liquidity facilities (receivables
sale facility, revolving credit facility and the silver consignment facility) in
accordance with the terms and on the maturity date of those
facilities.  Currently we do not have any other liquidity facilities
in place in North America.  We do have liquidity facilities available
to use as needed in Portugal and the Netherlands.  The terms and
conditions of the Company’s Senior Secured Notes have a provision that allows
the Company to secure credit facilities under certain conditions prescribed in
the Indenture thereto.





Environmental
Matters





We are
subject to extensive environmental regulations imposed by federal, state,
provincial and local authorities in the U.S., Canada, China, Portugal and Mexico
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 responsibilities.  There were no significant or
material changes to report from prior periods.





We have
accrued undiscounted estimated environmental remediation costs of $9.5 million
at April 5, 2009, consisting of $8.6 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 April 5, 2009 and could result in
additional exposure if these environmental matters are not resolved as
anticipated.


35


Critical
Accounting Policies





As of
April 5, 2009, the Company’s significant accounting policies, which are
described in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2008, have not materially changed  from December 31,
2008, except for the following:





On
January 1, 2009, the Company adopted the provisions of SFAS No. 161 (SFAS
161),Disclosures about
Derivative Instruments and Hedging Activities - an amendment of FASB Statement
No. 133 issued by the FASB in March 2008. This statement requires
enhanced disclosures about an entity's derivative and hedging activities and
thereby improving the transparency of financial reporting. Entities are required
to provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. The adoption of SFAS 161 did
not have a material impact on the Company’s Condensed Consolidated Financial
Statements.





In April
2008, the FASB issued FASB Staff Position (FSP) FAS 142-3 (FSP FAS 142-3), Determination of the Useful Life of
Intangible Assets. FSP FAS 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS 142. FSP FAS 142-3
is effective for fiscal years beginning after December 15, 2008. The
Company has evaluated the impact of adopting FSP FAS 142-3 and has found it does
not have a material impact on our results of operations, financial position or
cash flows.





In June
2008, the FASB’s Emerging Issues Task Force (EITF) reached a consensus on EITF
Issue No. 07-5 (EITF 07-5), Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock. This EITF
Issue provides guidance on the determination of whether such instruments are
classified in equity or as a derivative instrument and is effective for the
fiscal year beginning on January 1, 2009. The Company has evaluated the impact
of adopting EITF 07-5 and has found it does not have a material impact on our
results of operations, financial position or cash flows.





In
November 2008, the FASB’s EITF reached a consensus on EITF Issue No. 08-6
(EITF 08-6), Equity Method
Investment Accounting Considerations.  EITF 08-6 continues to
follow the accounting for the initial carrying value of equity method
investments in APB Opinion No. 18, The Equity Method of Accounting for
Investments in Common Stock, which is based on a cost accumulation model
and generally excludes contingent consideration. EITF 08-6 also specifies that
other-than-temporary impairment testing by the investor should be performed at
the investment level and that a separate impairment assessment of the underlying
assets is not required.  An impairment charge by the investee should
result in an adjustment of the investor’s basis of the impaired asset for the
investor’s pro-rata share of such impairment. In addition, EITF 08-6 reached a
consensus on how to account for an issuance of shares by an investee that
reduces the investor’s ownership share of the investee. An investor should
account for such transactions as if it had sold a proportionate share of its
investment with any gains or losses recorded through earnings. EITF 08-6 also
addresses the accounting for a change in an investment from the equity method to
the cost method after adoption of SFAS No. 160. EITF 08-6 affirms the existing
guidance in APB 18, which requires cessation of the equity method of accounting
and application of FASB Statement No. 115, Accounting for Certain Investments
in Debt and Equity Securities, or the cost method under APB 18, as
appropriate.  EITF 08-6 is effective for transactions occurring on or
after December 15, 2008. The Company has evaluated the impact of adopting EITF
08-6 and has found it does not have a material impact on our results of
operations, financial position or cash flows.





In
December 2008, the FASB issued FASB Staff Position (FSP) FAS 132(R)-1 (FSP FAS
132(R)-1), Employers’
Disclosures about Postretirement Benefit Plan Assets. FSP FAS 132(R)-1
provides guidance on an employer’s disclosures about plan assets of a defined
benefit pension or other postretirement plan. FSP FAS 132(R)-1 also includes a
technical amendment to FASB Statement No. 132(R), effective immediately, which
requires nonpublic entities to disclose net periodic benefit cost for each
annual period for which a statement of income is presented. The Company has
disclosed net periodic benefit cost in Note 10. The disclosures about plan
assets required by FSP FAS 132(R)-1 must be provided for fiscal years ending
after December 15, 2009. The Company has evaluated the impact of adopting
FSP FAS 132(R)-1 and has found it does not have a material impact on our results
of operations, financial position or cash flows.





In April
2009, the FASB issued FASB Staff Position (FSP) FAS 107-1 and APB 28-1 (FSP FAS
107-1), Interim Disclosures
about Fair Value of Financial Instruments.  FSP FAS 107-1
amended Statement of Financial Accounting Standards No. 107, Disclosures about Fair Value of
Financial Instruments, and APB Opinion No. 28, Interim Financial Reporting,to require disclosures about the fair value of financial instruments in
interim as well as in annual financial statements.  FSP FAS 107-1 is
effective for periods ending after June 15, 2009.  The Company has
evaluated the impact of adopting FASP FAS 107-1 and has found it does not have a
material impact on our results of operations, financial position or cash
flows.





In May
2009, the FASB issued SFAS No. 165 (SFAS 165), Subsequent Events. This
standard establishes general standards of accounting for and disclosure events
that occur after the balance sheet date but before financial statements are
issued.  SFAS 165 is effective for periods beginning after June 15,
2009.  The Company has evaluated the impact of adopting SFAS 165 and
has found it does not have a material impact on our results of operations,
financial position or cash flows.


36


In June
2009, the FASB issued SFAS No. 168, The “FASB Accounting Standards
Codification” and the Hierarchy of Generally Accepted Accounting Principles
(“GAAP”).This standard replaces SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles,and will become the source of authoritative,
nongovernmental GAAP, except for rules and interpretive releases of the
Securities and Exchange Commission (“SEC”), which are sources of authoritative
GAAP for SEC registrants. All other nongrandfathered, non-SEC accounting
literature not included in the Codification will become nonauthoritative. This
standard is effective for financial statements for interim or annual reporting
periods ending after September 15, 2009.  The Company will begin to
use the new guidelines and numbering system prescribed by the Codification when
referring to GAAP in its fiscal 2009 annual report.  As the
Codification was not intended to change or alter existing GAAP, it will not have
any impact on the Company’s consolidated financial results or financial
position.





Item
4T.                Controls
and Procedures





Evaluation
of Disclosure Controls and Procedures





Under the
supervision and with the participation of management, including our Principal
Executive Officer (“PEO”) and our Chief Financial Officer (“CFO”), we carried
out an evaluation of the effectiveness of our disclosure controls and procedures
(as defined in Rule 13a-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, our PEO and CFO have concluded that, as of
the end of the period covered by this report, our disclosure controls and
procedures were effective.




Changes
in Internal Control over Financial Reporting





Based
upon the evaluation performed by our management, which was conducted with the
participation of our PEO and CFO, there has been no change in our internal
control over financial reporting during the first quarter of 2009 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.





PART
IIOTHER
INFORMATION





Item
1A.               Risk
Factors





The
Company has included in its Annual Report on Form 10-K for the year ended
December 31, 2008 a description of certain risks and uncertainties that could
affect the Company’s business, future performance or financial condition (“Risk
Factors”).  The Risk Factors are hereby incorporated in Part II, Item
1A of this Form 10-Q.  The information presented below updates, and
should be read in conjunction with, the Risk Factors.





Our business is
dependent upon the availability and price of raw materials, particularly
copper. Significant increases in the price of copper could materially
adversely affect our
liquidity positions.





Future
growth in demand for copper may result in copper shortages and increased prices.
Any significant increase in the price of copper could have a material adverse
effect on our cash flows.





Item
6.                   Exhibits





Item 6.
                  
                  Exhibits31.1+
                  
                  Certification
      of the Principal 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 Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.Certification
      of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the32.2+
                  
                  Sarbanes-Oxley
      Act of 2002.
 
 + Filed
herewith


37


SIGNATURE





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereto
duly authorized.





Wolverine
      Tube, Inc.Dated:  August
      17, 2009
              By:  /s/
      David A. OwenName:   David
      A. OwenTitle:     Senior Vice President, Chief Financial Officer and Secretary


38