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 July 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 July 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
                                                          
                                                          32Item 4T. Controls and
      Procedures
                                                          
                                                          41PART II OTHER INFORMATION
                                                          
                                                          41Item 1A. Risk Factors
                                                          
                                                          41Item 6. Exhibits
                                                          
                                                          41




2




PART IFINANCIAL
INFORMATION





Item1.                       
Financial Statements





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidated Statements of Operations


(Unaudited)




Three months ended
                                                    
                                                    
                                                    Six months ended(In thousands except per share amounts)
                                                    
                                                    July 5, 2009
                                                    
                                                    
                                                    June 29, 2008
                                                    
                                                    
                                                    July 5, 2009
                                                    
                                                    
                                                    June 29, 2008Net
      sales
                                                    
                                                    $
                                                    113,580
                                                    
                                                    
                                                    $
                                                    245,511
                                                    
                                                    
                                                    $
                                                    223,182
                                                    
                                                    
                                                    $
                                                    446,970Cost
      of goods sold
                                                    
                                                    
                                                    108,998
                                                    
                                                    
                                                    
                                                    237,569
                                                    
                                                    
                                                    
                                                    215,025
                                                    
                                                    
                                                    
                                                    428,025Gross
      profit
                                                    
                                                    
                                                    4,582
                                                    
                                                    
                                                    
                                                    7,942
                                                    
                                                    
                                                    
                                                    8,157
                                                    
                                                    
                                                    
                                                    18,945Selling,
      general and administrative expenses
                                                    
                                                    
                                                    6,873
                                                    
                                                    
                                                    
                                                    6,246
                                                    
                                                    
                                                    
                                                    12,523
                                                    
                                                    
                                                    
                                                    13,181Net
      (gain) loss on divestitures
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    378
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (5,004
                                                    )Advisory
      fees and expenses
                                                    
                                                    
                                                    (32
                                                    )
                                                    
                                                    
                                                    27
                                                    
                                                    
                                                    
                                                    266
                                                    
                                                    
                                                    
                                                    552Restructuring
      and impairment charges
                                                    
                                                    
                                                    717
                                                    
                                                    
                                                    
                                                    1,123
                                                    
                                                    
                                                    
                                                    1,509
                                                    
                                                    
                                                    
                                                    5,060Operating
      income (loss)
                                                    
                                                    
                                                    (2,976
                                                    )
                                                    
                                                    
                                                    168
                                                    
                                                    
                                                    
                                                    (6,141
                                                    )
                                                    
                                                    
                                                    5,156Other
      (income) expense:Interest
      expense, net
                                                    
                                                    
                                                    4,509
                                                    
                                                    
                                                    
                                                    4,859
                                                    
                                                    
                                                    
                                                    8,040
                                                    
                                                    
                                                    
                                                    9,800Amortization
      expense
                                                    
                                                    
                                                    62
                                                    
                                                    
                                                    
                                                    574
                                                    
                                                    
                                                    
                                                    803
                                                    
                                                    
                                                    
                                                    1,271Loss
      on sale of receivables
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    103
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    207Embedded
      derivatives mark to fair value
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (3
                                                    )
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (3
                                                    )Loss
      from extinguishment of debt
                                                    
                                                    
                                                    3,647
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    3,647
                                                    
                                                    
                                                    
                                                    —Other,
      net
                                                    
                                                    
                                                    (36
                                                    )
                                                    
                                                    
                                                    (256
                                                    )
                                                    
                                                    
                                                    (257
                                                    )
                                                    
                                                    
                                                    (237
                                                    )Loss
      from continuing operations before non-controlling interest, equityin earnings of unconsolidated subsidiary and income
      taxes
                                                    
                                                    
                                                    (11,158
                                                    )
                                                    
                                                    
                                                    (5,109
                                                    )
                                                    
                                                    
                                                    (18,374
                                                    )
                                                    
                                                    
                                                    (5,882
                                                    )Non-controlling
      interest
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    194
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    275Equity
      in earnings of unconsolidated subsidiary
                                                    
                                                    
                                                    (338
                                                    )
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (679
                                                    )
                                                    
                                                    
                                                    —Income
      tax expense
                                                    
                                                    
                                                    263
                                                    
                                                    
                                                    
                                                    787
                                                    
                                                    
                                                    
                                                    623
                                                    
                                                    
                                                    
                                                    1,888(Loss)
      from continuing operations
                                                    
                                                    
                                                    (11,083
                                                    )
                                                    
                                                    
                                                    (6,090
                                                    )
                                                    
                                                    
                                                    (18,318
                                                    )
                                                    
                                                    
                                                    (8,045
                                                    )Income
      (loss) from discontinued operations, net of taxes
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (5,769
                                                    )
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    378Net
      (loss)
                                                    
                                                    
                                                    (11,083
                                                    )
                                                    
                                                    
                                                    (11,859
                                                    )
                                                    
                                                    
                                                    (18,318
                                                    )
                                                    
                                                    
                                                    (7,667
                                                    )Accretion
      of convertible preferred stock
                                                    
                                                    
                                                    1,256
                                                    
                                                    
                                                    
                                                    1,255
                                                    
                                                    
                                                    
                                                    2,511
                                                    
                                                    
                                                    
                                                    2,511Preferred
      stock dividends
                                                    
                                                    
                                                    2,176
                                                    
                                                    
                                                    
                                                    1,625
                                                    
                                                    
                                                    
                                                    4,284
                                                    
                                                    
                                                    
                                                    2,816Net
      income (loss) applicable to common shares
                                                    
                                                    $
                                                    (14,515
                                                    )
                                                    
                                                    $
                                                    (14,739
                                                    )
                                                    
                                                    $
                                                    (25,113
                                                    )
                                                    
                                                    $
                                                    (12,994
                                                    )Net
      income(loss) per common share—Basic and DilutedContinuing
      operations
                                                    
                                                    $
                                                    (0.36
                                                    )
                                                    
                                                    $
                                                    (0.22
                                                    )
                                                    
                                                    $
                                                    (0.62
                                                    )
                                                    
                                                    $
                                                    (0.33
                                                    )Discontinued
      operations
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    (0.14
                                                    )
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —Net
      (loss) per common share
                                                    
                                                    $
                                                    (0.36
                                                    )
                                                    
                                                    $
                                                    (0.36
                                                    )
                                                    
                                                    $
                                                    (0.62
                                                    )
                                                    
                                                    $
                                                    (0.33
                                                    )Shares
      used in computing income (loss) per share:Basic
      and diluted
                                                    
                                                    
                                                    40,624
                                                    
                                                    
                                                    
                                                    40,624
                                                    
                                                    
                                                    
                                                    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)
                                                    
                                                    July 5, 2009
                                                    
                                                    
                                                    December 31, 2008AssetsCurrent
      assetsCash
      and cash equivalents
                                                    
                                                    $
                                                    24,462
                                                    
                                                    
                                                    $
                                                    33,537Restricted
      cash
                                                    
                                                    
                                                    9,239
                                                    
                                                    
                                                    
                                                    37,738Accounts
      receivable, net of allowance for doubtful accounts of $216 in
      2009and
      $392 in 2008
                                                    
                                                    
                                                    45,647
                                                    
                                                    
                                                    
                                                    38,626Inventories
                                                    
                                                    
                                                    49,383
                                                    
                                                    
                                                    
                                                    53,284Assets
      held for sale
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    3,680Derivative
      assets
                                                    
                                                    
                                                    858
                                                    
                                                    
                                                    
                                                    291Prepaid
      expenses and other assets
                                                    
                                                    
                                                    2,910
                                                    
                                                    
                                                    
                                                    5,380Total
      current assets
                                                    
                                                    
                                                    132,499
                                                    
                                                    
                                                    
                                                    172,536Property,
      plant and equipment, net
                                                    
                                                    
                                                    55,386
                                                    
                                                    
                                                    
                                                    52,004Intangible
      assets and deferred charges, net
                                                    
                                                    
                                                    2,591
                                                    
                                                    
                                                    
                                                    2,634Notes
      receivable
                                                    
                                                    
                                                    576
                                                    
                                                    
                                                    
                                                    585Investment
      in unconsolidated subsidiary
                                                    
                                                    
                                                    10,053
                                                    
                                                    
                                                    
                                                    9,373Total
      assets
                                                    
                                                    $
                                                    201,105
                                                    
                                                    
                                                    $
                                                    237,132Liabilities
      and Accumulated DeficitCurrent
      liabilitiesAccounts
      payable
                                                    
                                                    $
                                                    31,262
                                                    
                                                    
                                                    $
                                                    34,713Accrued
      liabilities
                                                    
                                                    
                                                    10,276
                                                    
                                                    
                                                    
                                                    13,250Derivative
      liabilities
                                                    
                                                    
                                                    2,291
                                                    
                                                    
                                                    
                                                    5,415Deferred
      income taxes
                                                    
                                                    
                                                    858
                                                    
                                                    
                                                    
                                                    1,601Short-term
      borrowings
                                                    
                                                    
                                                    1,411
                                                    
                                                    
                                                    
                                                    16,112Total
      current liabilities
                                                    
                                                    
                                                    46,098
                                                    
                                                    
                                                    
                                                    71,091Long-term
      debt
                                                    
                                                    
                                                    122,723
                                                    
                                                    
                                                    
                                                    121,558Pension
      liabilities
                                                    
                                                    
                                                    45,853
                                                    
                                                    
                                                    
                                                    45,552Postretirement
      benefits obligation
                                                    
                                                    
                                                    4,444
                                                    
                                                    
                                                    
                                                    4,662Accrued
      environmental remediation
                                                    
                                                    
                                                    9,477
                                                    
                                                    
                                                    
                                                    9,628Accrued
      dividends
                                                    
                                                    
                                                    9,760
                                                    
                                                    
                                                    
                                                    5,476Other
      liabilities
                                                    
                                                    
                                                    3,128
                                                    
                                                    
                                                    
                                                    3,290Total
      liabilities
                                                    
                                                    
                                                    241,483
                                                    
                                                    
                                                    
                                                    261,257Series
      A Convertible Preferred Stock, par value $1,000 per share, 90,000
      sharesauthorized;
      54,494 shares issued and outstanding as of July 5, 2009
andDecember
      31, 2008
                                                    
                                                    
                                                    16,419
                                                    
                                                    
                                                    
                                                    13,908Series
      B Convertible Preferred Stock, par value $1,000 per share, 25,000
      sharesauthorized;
      10,000 shares issued and outstanding as of July 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 July 5, 2009 and December
      31,2008
                                                    
                                                    
                                                    406
                                                    
                                                    
                                                    
                                                    406Additional
      paid-in capital
                                                    
                                                    
                                                    140,224
                                                    
                                                    
                                                    
                                                    142,588Accumulated
      deficit
                                                    
                                                    
                                                    (173,883
                                                    )
                                                    
                                                    
                                                    (151,281
                                                    )Accumulated
      other comprehensive income (loss), net
                                                    
                                                    
                                                    (33,244
                                                    )
                                                    
                                                    
                                                    (39,446
                                                    )Total
      accumulated deficit
                                                    
                                                    
                                                    (66,497
                                                    )
                                                    
                                                    
                                                    (47,733
                                                    )Total
      liabilities, convertible preferred stock and accumulated
      deficit
                                                    
                                                    $
                                                    201,105
                                                    
                                                    
                                                    $
                                                    237,132
 
 See
accompanying notes to the condensed consolidated financial
statements.




4




Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidated Statements of Cash Flows


(Unaudited)




Six months ended(In thousands)
                                            
                                            July 5, 2009
                                            
                                            
                                            June 29, 2008Operating
      ActivitiesLoss
      from continuing operations
                                            
                                            $
                                            (18,318
                                            )
                                            
                                            $
                                            (8,045
                                            )Income
      from discontinued operations
                                            
                                            
                                            —
                                            
                                            
                                            
                                            378Net
      (loss)
                                            
                                            
                                            (18,318
                                            )
                                            
                                            
                                            (7,667
                                            )Adjustments
      to reconcile net (loss) to net cash from operating
    activities:Depreciation
                                            
                                            
                                            3,189
                                            
                                            
                                            
                                            3,239Amortization
                                            
                                            
                                            879
                                            
                                            
                                            
                                            1,468Deferred
      income taxes
                                            
                                            
                                            (736
                                            )
                                            
                                            
                                            (164
                                            )Gain
      on sale of fixed assets
                                            
                                            
                                            (273
                                            )
                                            
                                            
                                            —(Gain)
      loss on extinguishment of debt
                                            
                                            
                                            3,647
                                            
                                            
                                            
                                            (858
                                            )Non-cash
      paid-in-kind interest
                                            
                                            
                                            1,165
                                            
                                            
                                            
                                            —Non-controlling
      interest in Chinese subsidiary
                                            
                                            
                                            —
                                            
                                            
                                            
                                            275Equity
      in earnings of unconsolidated subsidiary
                                            
                                            
                                            (679
                                            )
                                            
                                            
                                            —Impairment
      of assets held for sale
                                            
                                            
                                            —
                                            
                                            
                                            
                                            391Non-cash
      environmental, restructuring and other charges
                                            
                                            
                                            139
                                            
                                            
                                            
                                            (7,275
                                            )Embedded
      derivative mark to fair value
                                            
                                            
                                            —
                                            
                                            
                                            
                                            1,282Stock
      compensation expense
                                            
                                            
                                            144
                                            
                                            
                                            
                                            1,124Changes
      in operating assets and liabilities:Accounts
      receivable, net
                                            
                                            
                                            (7,043
                                            )
                                            
                                            
                                            (20,663
                                            )Inventories
                                            
                                            
                                            3,717
                                            
                                            
                                            
                                            (3,027
                                            )Income
      taxes
                                            
                                            
                                            281
                                            
                                            
                                            
                                            277Prepaid
      expenses and other
                                            
                                            
                                            1,252
                                            
                                            
                                            
                                            5,020Accounts
      payable
                                            
                                            
                                            (3,435
                                            )
                                            
                                            
                                            5,431Accrued
      liabilities, including pension, postretirement benefit, and
      environmental
                                            
                                            
                                            (645
                                            )
                                            
                                            
                                            (8,908
                                            )Net
      cash from continuing operating activities
                                            
                                            
                                            (16,716
                                            )
                                            
                                            
                                            (30,433
                                            )Net
      cash from discontinued operating activities
                                            
                                            
                                            (31
                                            )
                                            
                                            
                                            (10,491
                                            )Net
      cash from operating activities
                                            
                                            
                                            (16,747
                                            )
                                            
                                            
                                            (40,924
                                            )Investing
      ActivitiesAdditions
      to property, plant and equipment
                                            
                                            
                                            (2,854
                                            )
                                            
                                            
                                            (2,737
                                            )Proceeds
      from sale of assets
                                            
                                            
                                            273
                                            
                                            
                                            
                                            5,416Purchase
      of patents
                                            
                                            
                                            (103
                                            )
                                            
                                            
                                            —Proceeds
      from sale of interest in Chinese subsidiary
                                            
                                            
                                            —
                                            
                                            
                                            
                                            9,500Change
      in restricted cash
                                            
                                            
                                            28,499
                                            
                                            
                                            
                                            (4,831
                                            )Net
      cash from continuing investing activities
                                            
                                            
                                            25,815
                                            
                                            
                                            
                                            7,348Net
      cash from discontinued investing activities
                                            
                                            
                                            1,200
                                            
                                            
                                            
                                            22,201Net
      cash from investing activities
                                            
                                            
                                            27,015
                                            
                                            
                                            
                                            29,549Financing
      ActivitiesFinancing
      fees and expenses paid
                                            
                                            
                                            (4,391
                                            )
                                            
                                            
                                            (1,713
                                            )Payments
      under revolving credit facilities and other debt
                                            
                                            
                                            (79
                                            )
                                            
                                            
                                            (676
                                            )Borrowings
      from revolving credit facilities and other debt
                                            
                                            
                                            1,399
                                            
                                            
                                            
                                            158Issuance
      of preferred stock
                                            
                                            
                                            —
                                            
                                            
                                            
                                            14,194Purchase
      or repayment of senior notes
                                            
                                            
                                            (16,142
                                            )
                                            
                                            
                                            (36,347
                                            )Payment
      of dividends
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (2,042
                                            )Net
      cash from financing activities
                                            
                                            
                                            (19,213
                                            )
                                            
                                            
                                            (26,426
                                            )Effect
      of exchange rate on cash and cash equivalents
                                            
                                            
                                            (130
                                            )
                                            
                                            
                                            861Net
      increase(decrease) in cash and cash equivalents
                                            
                                            
                                            (9,075
                                            )
                                            
                                            
                                            (36,940
                                            )Cash
      and cash equivalents at beginning of period
                                            
                                            
                                            33,537
                                            
                                            
                                            
                                            63,303Cash
      and cash equivalents at end of period
                                            
                                            $
                                            24,462
                                            
                                            
                                            $
                                            26,363Supplemental
      disclosure of cash flow:Interest
      paid
                                            
                                            $
                                            8,326
                                            
                                            
                                            $
                                            11,149Income
      taxes paid, net
                                            
                                            $
                                            644
                                            
                                            
                                            $
                                            931
 
 See
accompanying notes to the condened 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 and
six month periods ended July 5, 2009 and June 29, 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
December 31, 2008 condensed consolidated balance sheet includes
reclassifications from amounts previously presented on forms 10-K and
10-K(A).  The reclassifications relate to classifications of accrued
dividends from current to long-term and of certain amounts from short-term to
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
July 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 improves 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 Emerging Issues Task Force 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.





On July
5, 2009, the Company adopted FASB Statement No. 165, Subsequent Events(SFAS 165).
The statement establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued.  Specifically, the Statement
defines: (1) the period after the balance sheet date during which management of
a reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements, (2) the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements, and (3) the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date.  Management has reviewed events
occurring through August 18, 2009, the date the financial statements were issued
and no subsequent events occurred requiring accrual or disclosure.





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 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 (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 8, Financing Arrangements and
Debt, for a description of the Exchange Offer and a description of the
new Senior Secured Notes. After completing this refinancing, the Company had
unrestricted domestic 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 July 5, 2009 and December 31, 2008 was $9.2 million and $37.7
million, respectively.  Restricted cash at July 5, 2009 included $3.5
million related to deposits for margin calls on our metal hedge programs, $5.5
million of deposits to cover our insurance reserves and $0.2 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
three and six months ended July 5, 2009, we recorded $0.3 million and $0.7
million, respectively, 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 Small Tube Products (“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 period ended June 29, 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 and six months ended June
29, 2008 of the discontinued operations:





Three months ended
                                  
                                  
                                  Six months ended(In thousands)
                                  
                                  June 29, 2008
                                  
                                  
                                  June 29, 2008Net
      Sales
                                  
                                  $
                                  67,171
                                  
                                  
                                  $
                                  138,692Income
      (loss) before income taxes
                                  
                                  $
                                  (5,679
                                  )
                                  
                                  
                                  468Income
      taxes
                                  
                                  
                                  90
                                  
                                  
                                  
                                  90Net
      income (loss)
                                  
                                  $
                                  (5,769
                                  )
                                  
                                  $
                                  378Net
      income (loss) per common share - Basic
                                  
                                  $
                                  (0.14
                                  )
                                  
                                  $
                                  —Net
      income (loss) per common share - Diluted
                                  
                                  $
                                  (0.14
                                  )
                                  
                                  $
                                  —




(6)
            Inventories





Inventories
are as follows:





(In
      thousands)
                            
                            July 5, 2009
                            
                            
                            December 31, 2008Finished
      products
                            
                            $
                            24,413
                            
                            
                            $
                            27,990Work-in-process
                            
                            
                            12,887
                            
                            
                            
                            10,646Raw
      materials
                            
                            
                            6,672
                            
                            
                            
                            9,262Supplies
                            
                            
                            5,411
                            
                            
                            
                            5,386Total
                            
                            $
                            49,383
                            
                            
                            $
                            53,284





Included
in finished products are consignment inventories of $11.1 million at July 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 property. 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)
                                          
                                          July 5, 2009
                                          
                                          
                                          December 31, 2008Senior
      Exchange Notes, 10.5%, due March 2009
                                          
                                          $
                                          —
                                          
                                          
                                          $
                                          38,300Senior
      Notes, 10.5%, due April 2009
                                          
                                          
                                          —
                                          
                                          
                                          
                                          99,400Discount
      on 10.5% Senior Notes and 10.5% SeniorExchange
      Notes
                                          
                                          
                                          —
                                          
                                          
                                          
                                          (44
                                          )Senior
      Secured Notes, 15%, due March 2012
                                          
                                          
                                          122,723
                                          
                                          
                                          
                                          —Other
      foreign subsidiaries
                                          
                                          
                                          1,401
                                          
                                          
                                          
                                          —Capitalized
      leases
                                          
                                          
                                          10
                                          
                                          
                                          
                                          14Total
      debt
                                          
                                          
                                          124,134
                                          
                                          
                                          
                                          137,670Less
      short-term borrowings
                                          
                                          
                                          (1,411
                                          )
                                          
                                          
                                          (16,112
                                          )Total
      long-term debt
                                          
                                          $
                                          122,723
                                          
                                          
                                          $
                                          121,558





15%
Senior Secured Notes





On April
28, 2009, the Company issued $121.6 million aggregate principal amount of 15%
Senior Secured Notes (the “Senior Secured Notes”) due March 2012 pursuant
to an indenture, dated April 28, 2009, among the Company, the subsidiary
guarantors named herein and U.S. Bank National Association, as trustee and
collateral agent (The “Indenture”)in exchange for $38.3 million in
principal amount of the 10.5% Senior Exchange Notes and $83.3 million in
principal amount of the 10.5% Senior Notes (The “Exchange Offer”). The Company
redeemed $16.1 million of the 10.5% Senior Notes and paid a 3% exchange fee to
holders that exchanged their notes for the Senior Secured Notes.





The terms
of the Exchange Offer and new 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. As of
July 5, 2009, we have accrued $2.3 million of interest on the Senior Secured
Notes for the 10% which is payable in cash and have increased the principal
amount of the Senior Secured Notes by $1.1 million, which represents the 5% PIK
Notes.





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 dated April 28, 2009 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.




10




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 our assets and the assets of our subsidiaries; and
engage in sale/leaseback transactions.





Liquidity
Facilities





At July
5, 2009, we had no domestic credit facilities in place as all 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 Condensed 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.





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
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.




11




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 July 5, 2009 and December 31, 2008, we had no outstanding borrowings under
this facility.  This credit facility is secured by certain accounts
receivable 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 $1.4 million.  Borrowings under
this facility were $1.4 million and $0.0 million at July 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 July 5, 2009 was
2.384%.





10.5%
Senior Notes and 10.5% Senior Exchange Notes





As a
result of the successful completion of the Exchange Offer 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.





9)
            Interest
      Expense





The
following table summarizes interest expense, net:





Three months ended
                                          
                                          
                                          Six months ended(In thousands)
                                          
                                          July 5, 2009
                                          
                                          
                                          June 29, 2008
                                          
                                          
                                          July 5, 2009
                                          
                                          
                                          June 29, 2008Interest
      expense - bonds and other
                                          
                                          $
                                          4,588
                                          
                                          
                                          $
                                          5,047
                                          
                                          
                                          $
                                          8,302
                                          
                                          
                                          $
                                          10,650Interest
      income
                                          
                                          
                                          (48
                                          )
                                          
                                          
                                          (162
                                          )
                                          
                                          
                                          (219
                                          )
                                          
                                          
                                          (812
                                          )Capitalized
      interest
                                          
                                          
                                          (31
                                          )
                                          
                                          
                                          (26
                                          )
                                          
                                          
                                          (43
                                          )
                                          
                                          
                                          (38
                                          )Interest
      expense, net
                                          
                                          $
                                          4,509
                                          
                                          
                                          $
                                          4,859
                                          
                                          
                                          $
                                          8,040
                                          
                                          
                                          $
                                          9,800





(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 and six months ended July 5, 2009, respectively and $0.3 million
and $1.1 million for the three and six months ended June 29, 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.





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 and six months ended July 5, 2009 and June 29, 2008:





Three months ended
                              
                              
                              Six months ended(In thousands)
                              
                              July 5, 2009
                              
                              
                              June 29, 2008
                              
                              
                              July 5, 2009
                              
                              
                              June 29, 2008Interest
      Cost
                              
                              $
                              2,412
                              
                              
                              $
                              2,438
                              
                              
                              $
                              4,824
                              
                              
                              $
                              4,876Expected
      return on plan assets
                              
                              
                              (1,806
                              )
                              
                              
                              (2,734
                              )
                              
                              
                              (3,612
                              )
                              
                              
                              (5,468
                              )Amortization
      of net actuarial loss
                              
                              
                              1,002
                              
                              
                              
                              —
                              
                              
                              
                              2,004
                              
                              
                              
                              —Net
      periodic pension cost (benefit)
                              
                              $
                              1,608
                              
                              
                              $
                              (296
                              )
                              
                              $
                              3,216
                              
                              
                              $
                              (592
                              )




12




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 and six months ended July 5,
2009 and June 29, 2008:





Three months ended
                                    
                                    
                                    Six months ended(In thousands)
                                    
                                    July 5, 2009
                                    
                                    
                                    June 29, 2008
                                    
                                    
                                    July 5, 2009
                                    
                                    
                                    June 29, 2008Interest
      Cost
                                    
                                    $
                                    17
                                    
                                    
                                    $
                                    17
                                    
                                    
                                    $
                                    34
                                    
                                    
                                    $
                                    34Net
      periodic pension cost
                                    
                                    $
                                    17
                                    
                                    
                                    $
                                    17
                                    
                                    
                                    $
                                    34
                                    
                                    
                                    $
                                    34





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 and six months
ended July 5, 2009 and June 29, 2008:




Three months ended
                            
                            
                            Six months ended(In thousands)
                            
                            July 5, 2009
                            
                            
                            June 29, 2008
                            
                            
                            July 5, 2009
                            
                            
                            June 29, 2008Service
      Cost
                            
                            $
                            17
                            
                            
                            $
                            77
                            
                            
                            $
                            34
                            
                            
                            $
                            154Interest
      Cost
                            
                            
                            68
                            
                            
                            
                            256
                            
                            
                            
                            136
                            
                            
                            
                            513Amortization
      of prior service cost
                            
                            
                            (7
                            )
                            
                            
                            (8
                            )
                            
                            
                            (14
                            )
                            
                            
                            (16
                            )Amortization
      of net actuarial gain
                            
                            
                            (220
                            )
                            
                            
                            (160
                            )
                            
                            
                            (440
                            )
                            
                            
                            (319
                            )Curtailment
      gain (1)
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (410
                            )Net
      periodic cost (benefit)
                            
                            $
                            (142
                            )
                            
                            $
                            165
                            
                            
                            $
                            (284
                            )
                            
                            $
                            (78
                            )




(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 July 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 July 5, 2009 if these environmental
matters are not resolved as anticipated.





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 July 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




(13)
            Income
      Taxes





As of
July 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
three and six months ended July 5, 2009, tax expense was $0.3 million and $0.6
million, respectively, 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 three and six months ended June 29, 2008, tax
expense was $0.8 million and $1.9 million, respectively, also attributable to
taxable income at our foreign locations.  Tax benefit in the U.S.
operations and tax expense in our Canadian locations were offset by adjustments
in the valuation allowance in those tax jurisdictions. For all periods, the
effective tax rate was not meaningful given tax expense divided by a pretax loss
caused by adjustments to the valuation allowance.





(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 second 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 and six months ended June 29, 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
                                
                                
                                Six months ended(In thousands)
                                
                                July 5, 2009
                                
                                
                                June 29, 2008
                                
                                
                                July 5, 2009
                                
                                
                                June 29, 2008Net
      income (loss)
                                
                                $
                                (11,083
                                )
                                
                                $
                                (11,859
                                )
                                
                                $
                                (18,318
                                )
                                
                                $
                                (7,667
                                )Translation
      adjustment for financial statements denominated in a foreign
      currency
                                
                                
                                827
                                
                                
                                
                                639
                                
                                
                                
                                (360
                                )
                                
                                
                                2,982Unrealized
      gain (loss) on cash flow hedges
                                
                                
                                1,431
                                
                                
                                
                                489
                                
                                
                                
                                4,975
                                
                                
                                
                                389Recognized
      gain (loss) related to pension and post-retirement benefit
      plans
                                
                                
                                811
                                
                                
                                
                                (205
                                )
                                
                                
                                1,593
                                
                                
                                
                                (274
                                )Comprehensive
      income (loss)
                                
                                $
                                (8,014
                                )
                                
                                $
                                (10,936
                                )
                                
                                $
                                (12,110
                                )
                                
                                $
                                (4,570
                                )





(16)
            Earnings
      (Loss) Per Share





For the
three and six months ended July 5, 2009 and June 29, 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 and six month periods ended July 5, 2009 and June 29, 2008
all such potential common stock is anti-dilutive and as such there is no
difference between basic and diluted EPS.




14




The
calculation of net income (loss) per share for the three and six month periods
ended July 5, 2009 and June 29, 2008 is presented below:


Three
      months ended
                                                            
                                                            
                                                            Six
      months ended(In
      thousands except per share amounts)
                                                            
                                                            July
      5, 2009
                                                            
                                                            
                                                            June
      29, 2008
                                                            
                                                            
                                                            July
      5, 2009
                                                            
                                                            
                                                            June
      29, 2008Basic
      Earnings (Loss) Per ShareNet
      income (loss)
                                                            
                                                            $
                                                            (11,083
                                                            )
                                                            
                                                            $
                                                            (11,859
                                                            )
                                                            
                                                            $
                                                            (18,318
                                                            )
                                                            
                                                            $
                                                            (7,667
                                                            )Less:
      accretion of convertible preferred stock
                                                            
                                                            
                                                            1,256
                                                            
                                                            
                                                            
                                                            1,255
                                                            
                                                            
                                                            
                                                            2,511
                                                            
                                                            
                                                            
                                                            2,510Less:
      preferred stock dividends
                                                            
                                                            
                                                            2,176
                                                            
                                                            
                                                            
                                                            1,625
                                                            
                                                            
                                                            
                                                            4,284
                                                            
                                                            
                                                            
                                                            2,816Net
      income (loss) applicable to common stockholders
                                                            
                                                            $
                                                            (14,515
                                                            )
                                                            
                                                            $
                                                            (14,739
                                                            )
                                                            
                                                            $
                                                            (25,113
                                                            )
                                                            
                                                            $
                                                            (12,993
                                                            )Income
      from discontinued operations
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            (5,769
                                                            )
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            377Net
      (loss) from continuing operations
                                                            
                                                            $
                                                            (14,515
                                                            )
                                                            
                                                            $
                                                            (8,970
                                                            )
                                                            
                                                            $
                                                            (25,113
                                                            )
                                                            
                                                            $
                                                            (13,370
                                                            )Amount
      allocable to common stockholders from continuing operations
      (1)
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            100
                                                            %Amount
      allocable to common stockholders from discontinued operations
      (1)
                                                            
                                                            
                                                            0
                                                            %
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            0
                                                            %
                                                            
                                                            
                                                            41
                                                            %Net
      loss from continuing operations allocated to common
      stockholders
                                                            
                                                            $
                                                            (14,515
                                                            )
                                                            
                                                            $
                                                            (8,970
                                                            )
                                                            
                                                            $
                                                            (25,113
                                                            )
                                                            
                                                            $
                                                            (13,370
                                                            )Net
      income (loss) from discontinued operations allocable to common
      stockholders
                                                            
                                                            $
                                                            —
                                                            
                                                            
                                                            $
                                                            (5,769
                                                            )
                                                            
                                                            $
                                                            —
                                                            
                                                            
                                                            $
                                                            155Basic
      weighted average number of common shares (2)
                                                            
                                                            
                                                            40,624
                                                            
                                                            
                                                            
                                                            40,624
                                                            
                                                            
                                                            
                                                            40,624
                                                            
                                                            
                                                            
                                                            40,624Basic
      income (loss) per share – Two-class MethodContinuing
      operations
                                                            
                                                            $
                                                            (0.36
                                                            )
                                                            
                                                            $
                                                            (0.22
                                                            )
                                                            
                                                            $
                                                            (0.62
                                                            )
                                                            
                                                            $
                                                            (0.33
                                                            )Discontinued
      operations (1)
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            (0.14
                                                            )
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            —Net
      loss per common share
                                                            
                                                            $
                                                            (0.36
                                                            )
                                                            
                                                            $
                                                            (0.36
                                                            )
                                                            
                                                            $
                                                            (0.62
                                                            )
                                                            
                                                            $
                                                            (0.33
                                                            )Diluted
      Earnings (Loss) Per ShareNet
      income (loss) available to common stockholders
                                                            
                                                            $
                                                            (14,515
                                                            )
                                                            
                                                            $
                                                            (14,739
                                                            )
                                                            
                                                            $
                                                            (25,113
                                                            )
                                                            
                                                            $
                                                            (12,993
                                                            )Plus:
      accretion of convertible preferred stock
                                                            
                                                            
                                                            1,256
                                                            
                                                            
                                                            
                                                            1,255
                                                            
                                                            
                                                            
                                                            2,511
                                                            
                                                            
                                                            
                                                            2,510Plus:
      preferred stock dividends
                                                            
                                                            
                                                            2,176
                                                            
                                                            
                                                            
                                                            1,625
                                                            
                                                            
                                                            
                                                            4,284
                                                            
                                                            
                                                            
                                                            2,816Income
      (loss) available to common stockholders in addition to assumed
      conversions
                                                            
                                                            $
                                                            (11,083
                                                            )
                                                            
                                                            $
                                                            (11,859
                                                            )
                                                            
                                                            $
                                                            (18,318
                                                            )
                                                            
                                                            $
                                                            (7,667
                                                            )Income
      (loss) from discontinued operations
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            (5,769
                                                            )
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            377Net
      loss from continuing operations available to common stockholders
      in additiontoassumed
      conversions
                                                            
                                                            $
                                                            (11,083
                                                            )
                                                            
                                                            $
                                                            (6,090
                                                            )
                                                            
                                                            $
                                                            (18,318
                                                            )
                                                            
                                                            $
                                                            (8,044
                                                            )Amount
      allocable to common stockholders (1)
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            100
                                                            %Amount
      allocable to common stockholders from discontinued operations
      (1)
                                                            
                                                            
                                                            0
                                                            %
                                                            
                                                            
                                                            100
                                                            %
                                                            
                                                            
                                                            0
                                                            %
                                                            
                                                            
                                                            41
                                                            %Net
      loss from continuing operations allocable to common
      stockholders
                                                            
                                                            $
                                                            (14,515
                                                            )
                                                            
                                                            $
                                                            (8,970
                                                            )
                                                            
                                                            $
                                                            (25,113
                                                            )
                                                            
                                                            $
                                                            (13,370
                                                            )Net
      income (loss) from discontinued operations allocable to common
      stockholders
                                                            
                                                            $
                                                            —
                                                            
                                                            
                                                            $
                                                            (5,769
                                                            )
                                                            
                                                            $
                                                            —
                                                            
                                                            
                                                            $
                                                            155Diluted
      weighted average number of common shares (2)
                                                            
                                                            
                                                            40,624
                                                            
                                                            
                                                            
                                                            40,624
                                                            
                                                            
                                                            
                                                            40,624
                                                            
                                                            
                                                            
                                                            40,624Diluted
      income (loss) per share – Two-class MethodContinuing
      operations
                                                            
                                                            $
                                                            (0.36
                                                            )
                                                            
                                                            $
                                                            (0.22
                                                            )
                                                            
                                                            $
                                                            (0.62
                                                            )
                                                            
                                                            $
                                                            (0.33
                                                            )Discontinued
      operations
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            (0.14
                                                            )
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            —Net
      loss per common share
                                                            
                                                            $
                                                            (0.36
                                                            )
                                                            
                                                            $
                                                            (0.36
                                                            )
                                                            
                                                            $
                                                            (0.62
                                                            )
                                                            
                                                            $
                                                            (0.33
                                                            )




(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 and six months ended July 5, 2009 and June 29,
2008.  In computing basic EPS using the two-class method, we have not
allocated the loss available to common stockholders for the three and six months
ended July 5, 2009 and June 29, 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 July 5, 2009 and
June 29, 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 July 5, 2009 are restricted share awards of 40,000.


(17)
            Stock-Based
      Compensation Plans




At July
5, 2009, we had stock-based outside director, employee and non-employee awards
associated with our 2007 Non-Qualified Stock-Based compensation
plan.  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 for the three and
six months ended July 5, 2009 is $62 thousand and $0.1 million, respectively.
The amount of compensation expense recorded for the three and six months ended
June 29, 2008 is $0.4 million and $1.2 million, respectively.  The
amount remaining to be expensed through the end of the third quarter of 2013 is
$0.1 million. There have been no grants, employee or non-employee, issued during
2009.





(18)
            Restructuring
      and Other Charges





During
the three and six months ended July 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. We also
recognized severance charges having to do with headcount reductions and the
realigned operations at our Monterrey, Mexico facility.





We
recognized an expense during the three and six months ended July 5, 2009
associated with restructuring activities before tax totaling $0.7 million and
$1.5 million, respectively.




15




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




Booneville, Mississippi Closing


CumulativeThree months ended
                              
                              
                              Six months ended
                              
                              
                              incurred through(In thousands)
                              
                              July 5, 2009
                              
                              
                              July 5, 2009
                              
                              
                              July 5, 2009Major
      Type CostsImpair
      and liquidate current assets
                              
                              $
                              —
                              
                              
                              $
                              —
                              
                              
                              $
                              915Employee
      related costs
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              156Post
      closing cost
                              
                              
                              37
                              
                              
                              
                              67
                              
                              
                              
                              1,662Fixed
      asset impairment
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              3,049Total
                              
                              $
                              37
                              
                              
                              $
                              67
                              
                              
                              $
                              5,782




Decatur, Alabama Reduction


CumulativeThree months ended
                              
                              
                              Six months ended
                              
                              
                              incurred through(In thousands)
                              
                              July 5, 2009
                              
                              
                              July 5, 2009
                              
                              
                              July 5, 2009Major
      Type CostsImpair
      and liquidate current assets
                              
                              $
                              —
                              
                              
                              $
                              —
                              
                              
                              $
                              6,517Employee
      related costs
                              
                              
                              11
                              
                              
                              
                              107
                              
                              
                              
                              3,138Environmental
      remediation
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              8,608Post
      closing cost
                              
                              
                              189
                              
                              
                              
                              340
                              
                              
                              
                              4,563Other
      costs / currency
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              759Fixed
      asset impairment
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              40,134Total
                              
                              $
                              200
                              
                              
                              $
                              447
                              
                              
                              $
                              63,719




Monterrey, Mexico Reduction


CumulativeThree months ended
                              
                              
                              Six months ended
                              
                              
                              incurred through(In thousands)
                              
                              July 5, 2009
                              
                              
                              July 5, 2009
                              
                              
                              July 5, 2009Major
      Type CostsImpair
      and liquidate current assets
                              
                              $
                              130
                              
                              
                              $
                              130
                              
                              
                              $
                              130Employee
      related costs
                              
                              
                              140
                              
                              
                              
                              223
                              
                              
                              
                              223Total
                              
                              $
                              270
                              
                              
                              $
                              353
                              
                              
                              $
                              353




Corporate SG&A Reduction
 CumulativeThree months ended
                                      
                                      
                                      Six months ended
                                      
                                      
                                      incurred through(In thousands)
                                      
                                      July 5, 2009
                                      
                                      
                                      July 5, 2009
                                      
                                      
                                      July 5, 2009Major
      Type CostsEmployee
      related costs
                                      
                                      $
                                      200
                                      
                                      
                                      $
                                      632
                                      
                                      
                                      $
                                      1,163Post
      retirement benefit gain
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (208
                                      )Other
      costs / currency
                                      
                                      
                                      10
                                      
                                      
                                      
                                      10
                                      
                                      
                                      
                                      159Total
                                      
                                      $
                                      210
                                      
                                      
                                      $
                                      642
                                      
                                      
                                      $
                                      1,114


CumulativeThree months ended
                          
                          
                          Six months ended
                          
                          
                          incurred through(In thousands)
                          
                          July 5, 2009
                          
                          
                          July 5, 2009
                          
                          
                          July 5, 2009Grand
      Total
                          
                          $
                          717
                          
                          
                          $
                          1,509
                          
                          
                          $
                          70,968




At the
end of the second 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.





16




(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 15% Senior Secured Notes (Subsidiary Guarantors),
which include TF Investor, Inc.; Tube Forming, L.P.; Wolverine Finance, LLC;
Wolverine PA, LLC; Wolverine Joining Technologies, LLC; 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 July 5, 2009
 (Unaudited)




Non-Subsidiary
                                    
                                    
                                    Guarantor(In
      thousands)
                                    
                                    Parent
                                    
                                    
                                    Guarantors
                                    
                                    
                                    Subsidiaries
                                    
                                    
                                    Eliminations
                                    
                                    
                                    ConsolidatedNet
      sales
                                    
                                    $
                                    79,494
                                    
                                    
                                    $
                                    24,684
                                    
                                    
                                    $
                                    10,954
                                    
                                    
                                    $
                                    (1,552
                                    )
                                    
                                    $
                                    113,580Cost
      of goods sold
                                    
                                    
                                    78,290
                                    
                                    
                                    
                                    22,651
                                    
                                    
                                    
                                    9,609
                                    
                                    
                                    
                                    (1,552
                                    )
                                    
                                    
                                    108,998Gross
      profit
                                    
                                    
                                    1,204
                                    
                                    
                                    
                                    2,033
                                    
                                    
                                    
                                    1,345
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    4,582Selling,
      general and administrative expenses
                                    
                                    
                                    5,920
                                    
                                    
                                    
                                    482
                                    
                                    
                                    
                                    471
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    6,873Advisory
      fees and expenses
                                    
                                    
                                    (44
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    12
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (32
                                    )Restructuring
      and impairment charges
                                    
                                    
                                    483
                                    
                                    
                                    
                                    234
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    717Operating
      income (loss)
                                    
                                    
                                    (5,155
                                    )
                                    
                                    
                                    1,317
                                    
                                    
                                    
                                    862
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (2,976
                                    )Other
      (income) expense:Interest
      (income) expense, net
                                    
                                    
                                    4,516
                                    
                                    
                                    
                                    (7
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    4,509Amortization
      expense
                                    
                                    
                                    62
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    62Loss
      on extinguishment of debt
                                    
                                    
                                    3,647
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    3,647Other,
      net
                                    
                                    
                                    2,151
                                    
                                    
                                    
                                    (85
                                    )
                                    
                                    
                                    (2,102
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (36
                                    )Equity
      in earnings of subsidiaries
                                    
                                    
                                    3,483
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (3,483
                                    )
                                    
                                    
                                    —Net
      income (loss)
                                    
                                    
                                    (12,048
                                    )
                                    
                                    
                                    1,409
                                    
                                    
                                    
                                    2,964
                                    
                                    
                                    
                                    (3,483
                                    )
                                    
                                    
                                    (11,158
                                    )Equity
      in earnings of unconsolidated subsidiary
                                    
                                    
                                    (338
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (338
                                    )Income
      tax expense (benefit)
                                    
                                    
                                    (627
                                    )
                                    
                                    
                                    606
                                    
                                    
                                    
                                    284
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    263Net
      income (loss)
                                    
                                    
                                    (11,083
                                    )
                                    
                                    
                                    803
                                    
                                    
                                    
                                    2,680
                                    
                                    
                                    
                                    (3,483
                                    )
                                    
                                    
                                    (11,083
                                    )Accretion
      of convertible preferred stock
                                    
                                    
                                    1,256
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    1,256Preferred
      stock dividends
                                    
                                    
                                    2,176
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    2,176Net
      income (loss) applicable to common shares
                                    
                                    $
                                    (14,515
                                    )
                                    
                                    $
                                    803
                                    
                                    
                                    $
                                    2,680
                                    
                                    
                                    $
                                    (3,483
                                    )
                                    
                                    $
                                    (14,515
                                    )




18




Wolverine
Tube, Inc. and Subsidiaries
 Condensed
Consolidating Statements of Operations
 For
the Three Months Ended June 29, 2008
 (Unaudited)


Non-Subsidiary
                                                
                                                
                                                Guarantor(In
      thousands)
                                                
                                                Parent
                                                
                                                
                                                Guarantors
                                                
                                                
                                                Subsidiaries
                                                
                                                
                                                Eliminations
                                                
                                                
                                                ConsolidatedNet
      sales
                                                
                                                $
                                                174,606
                                                
                                                
                                                $
                                                40,726
                                                
                                                
                                                $
                                                35,923
                                                
                                                
                                                $
                                                (5,744
                                                )
                                                
                                                $
                                                245,511Cost
      of goods sold
                                                
                                                
                                                169,812
                                                
                                                
                                                
                                                37,592
                                                
                                                
                                                
                                                35,909
                                                
                                                
                                                
                                                (5,744
                                                )
                                                
                                                
                                                237,569Gross
      profit
                                                
                                                
                                                4,794
                                                
                                                
                                                
                                                3,134
                                                
                                                
                                                
                                                14
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                7,942Selling,
      general and administrative expenses
                                                
                                                
                                                5,001
                                                
                                                
                                                
                                                592
                                                
                                                
                                                
                                                653
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                6,246Net
      loss on divestitures
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                378
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                378Advisory
      fees and expenses
                                                
                                                
                                                27
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                27Restructuring
      and impairment charges
                                                
                                                
                                                282
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                841
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                1,123Operating
      income (loss)
                                                
                                                
                                                (516
                                                )
                                                
                                                
                                                2,542
                                                
                                                
                                                
                                                (1,858
                                                )
                                                
                                                
                                                —
                                                
                                                
                                                
                                                168Other
      (income) expense:Interest
      (income) expense, net
                                                
                                                
                                                4,406
                                                
                                                
                                                
                                                (105
                                                )
                                                
                                                
                                                558
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                4,859Amortization
      expense
                                                
                                                
                                                659
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                (85
                                                )
                                                
                                                
                                                —
                                                
                                                
                                                
                                                574Loss
      on sale of receivables
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                103
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                103Embedded
      derivatives mark to fair value
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                (3
                                                )
                                                
                                                
                                                —
                                                
                                                
                                                
                                                (3
                                                )Other,
      net
                                                
                                                
                                                4,627
                                                
                                                
                                                
                                                155
                                                
                                                
                                                
                                                (5,038
                                                )
                                                
                                                
                                                —
                                                
                                                
                                                
                                                (256
                                                )Equity
      in earnings of subsidiaries
                                                
                                                
                                                4,449
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                (4,449
                                                )
                                                
                                                
                                                —Loss
      from continuing operations before non-controllinginterest and
      income taxes
                                                
                                                
                                                (5,759
                                                )
                                                
                                                
                                                2,492
                                                
                                                
                                                
                                                2,607
                                                
                                                
                                                
                                                (4,449
                                                )
                                                
                                                
                                                (5,109
                                                )Non-controlling
      interest
                                                
                                                
                                                194
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                194Income
      tax expense (benefit)
                                                
                                                
                                                137
                                                
                                                
                                                
                                                (90
                                                )
                                                
                                                
                                                740
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                787Income
      (loss) from continuing operations
                                                
                                                
                                                (6,090
                                                )
                                                
                                                
                                                2,582
                                                
                                                
                                                
                                                1,867
                                                
                                                
                                                
                                                (4,449
                                                )
                                                
                                                
                                                (6,090
                                                )Loss
      from discontinued operations, net of taxes
                                                
                                                
                                                (5,769
                                                )
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                (5,769
                                                )Net
      income (loss)
                                                
                                                
                                                (11,859
                                                )
                                                
                                                
                                                2,582
                                                
                                                
                                                
                                                1,867
                                                
                                                
                                                
                                                (4,449
                                                )
                                                
                                                
                                                (11,859
                                                )Accretion
      of convertible preferred stock
                                                
                                                
                                                1,255
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                1,255Preferred
      stock dividends
                                                
                                                
                                                1,625
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                —
                                                
                                                
                                                
                                                1,625Net
      income (loss) applicable to common shares
                                                
                                                $
                                                (14,739
                                                )
                                                
                                                $
                                                2,582
                                                
                                                
                                                $
                                                1,867
                                                
                                                
                                                $
                                                (4,449
                                                )
                                                
                                                $
                                                (14,739
                                                )




19




Wolverine
Tube, Inc. and Subsidiaries
 Condensed
Consolidating Statements of Operations
 For
the Six Months Ended July 5, 2009
 (Unaudited)
 
 Non-Subsidiary
                                              
                                              
                                              Guarantor(In
      thousands)
                                              
                                              Parent
                                              
                                              
                                              Guarantors
                                              
                                              
                                              Subsidiaries
                                              
                                              
                                              Eliminations
                                              
                                              
                                              ConsolidatedNet
      sales
                                              
                                              $
                                              154,026
                                              
                                              
                                              $
                                              45,349
                                              
                                              
                                              $
                                              26,402
                                              
                                              
                                              $
                                              (2,595
                                              )
                                              
                                              $
                                              223,182Cost
      of goods sold
                                              
                                              
                                              151,599
                                              
                                              
                                              
                                              41,941
                                              
                                              
                                              
                                              24,080
                                              
                                              
                                              
                                              (2,595
                                              )
                                              
                                              
                                              215,025Gross
      profit
                                              
                                              
                                              2,427
                                              
                                              
                                              
                                              3,408
                                              
                                              
                                              
                                              2,322
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              8,157Selling,
      general and administrative expenses
                                              
                                              
                                              10,536
                                              
                                              
                                              
                                              992
                                              
                                              
                                              
                                              995
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              12,523Advisory
      fees and expenses
                                              
                                              
                                              254
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              12
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              266Restructuring
      and impairment charges
                                              
                                              
                                              1,253
                                              
                                              
                                              
                                              256
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              1,509Operating
      income (loss)
                                              
                                              
                                              (9,616
                                              )
                                              
                                              
                                              2,160
                                              
                                              
                                              
                                              1,315
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (6,141
                                              )Other
      (income) expense:Interest
      (income) expense, net
                                              
                                              
                                              8,062
                                              
                                              
                                              
                                              (65
                                              )
                                              
                                              
                                              43
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              8,040Amortization
      expense
                                              
                                              
                                              770
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              33
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              803Loss
      on extinguishment of debt
                                              
                                              
                                              3,647
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              3,647Other,
      net
                                              
                                              
                                              4,231
                                              
                                              
                                              
                                              (61
                                              )
                                              
                                              
                                              (4,427
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (257
                                              )Equity
      in earnings of subsidiaries
                                              
                                              
                                              6,421
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (6,421
                                              )
                                              
                                              
                                              —Income
      (loss) from continuing operations beforeequity in earnings of unconsolidated subsidiary
      and income taxes
                                              
                                              
                                              (19,905
                                              )
                                              
                                              
                                              2,286
                                              
                                              
                                              
                                              5,666
                                              
                                              
                                              
                                              (6,421
                                              )
                                              
                                              
                                              (18,374
                                              )Equity
      in earnings of unconsolidated subsidiary
                                              
                                              
                                              (679
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (679
                                              )Income
      tax expense (benefit)
                                              
                                              
                                              (908
                                              )
                                              
                                              
                                              899
                                              
                                              
                                              
                                              632
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              623Net
      income (loss)
                                              
                                              
                                              (18,318
                                              )
                                              
                                              
                                              1,387
                                              
                                              
                                              
                                              5,034
                                              
                                              
                                              
                                              (6,421
                                              )
                                              
                                              
                                              (18,318
                                              )Accretion
      of convertible preferred stock
                                              
                                              
                                              2,511
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              2,511Preferred
      stock dividends
                                              
                                              
                                              4,284
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              4,284Net
      income (loss) applicable to common shares
                                              
                                              $
                                              (25,113
                                              )
                                              
                                              $
                                              1,387
                                              
                                              
                                              $
                                              5,034
                                              
                                              
                                              $
                                              (6,421
                                              )
                                              
                                              $
                                              (25,113
                                              )




20




Wolverine
Tube, Inc. and Subsidiaries
 Condensed
Consolidating Statements of Operations
 For
the Six Months Ended June 29, 2008
 (Unaudited)
 
 Non-Subsidiary
                                            
                                            
                                            Guarantor(In
      thousands)
                                            
                                            Parent
                                            
                                            
                                            Guarantors
                                            
                                            
                                            Subsidiaries
                                            
                                            
                                            Eliminations
                                            
                                            
                                            ConsolidatedNet
      sales
                                            
                                            $
                                            311,702
                                            
                                            
                                            $
                                            75,505
                                            
                                            
                                            $
                                            70,866
                                            
                                            
                                            $
                                            (11,103
                                            )
                                            
                                            $
                                            446,970Cost
      of goods sold
                                            
                                            
                                            302,397
                                            
                                            
                                            
                                            72,130
                                            
                                            
                                            
                                            64,601
                                            
                                            
                                            
                                            (11,103
                                            )
                                            
                                            
                                            428,025Gross
      profit
                                            
                                            
                                            9,305
                                            
                                            
                                            
                                            3,375
                                            
                                            
                                            
                                            6,265
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            18,945Selling,
      general and administrative expenses
                                            
                                            
                                            10,762
                                            
                                            
                                            
                                            1,204
                                            
                                            
                                            
                                            1,215
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            13,181Net
      (gain) on divestitures
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (5,004
                                            )
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (5,004
                                            )Advisory
      fees and expenses
                                            
                                            
                                            552
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            552Restructuring
      and impairment charges
                                            
                                            
                                            3,812
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            1,248
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            5,060Operating
      income (loss)
                                            
                                            
                                            (5,821
                                            )
                                            
                                            
                                            2,171
                                            
                                            
                                            
                                            8,806
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            5,156Other
      (income) expense:Interest
      (income) expense, net
                                            
                                            
                                            8,809
                                            
                                            
                                            
                                            (294
                                            )
                                            
                                            
                                            1,285
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            9,800Amortization
      expense
                                            
                                            
                                            1,140
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            131
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            1,271Loss
      on sale of receivables
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            207
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            207Embedded
      derivatives mark to fair value
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (3
                                            )
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (3
                                            )Other,
      net
                                            
                                            
                                            4,905
                                            
                                            
                                            
                                            356
                                            
                                            
                                            
                                            (5,498
                                            )
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (237
                                            )Equity
      in earnings of subsidiaries
                                            
                                            
                                            12,203
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (12,203
                                            )
                                            
                                            
                                            —Loss
      from continuing operations before non-controllinginterest and
      income taxes
                                            
                                            
                                            (8,472
                                            )
                                            
                                            
                                            2,109
                                            
                                            
                                            
                                            12,684
                                            
                                            
                                            
                                            (12,203
                                            )
                                            
                                            
                                            (5,882
                                            )Non-controlling
      interest
                                            
                                            
                                            275
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            275Income
      tax expense (benefit)
                                            
                                            
                                            (702
                                            )
                                            
                                            
                                            749
                                            
                                            
                                            
                                            1,841
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            1,888Income
      (loss) from continuing operations
                                            
                                            
                                            (8,045
                                            )
                                            
                                            
                                            1,360
                                            
                                            
                                            
                                            10,843
                                            
                                            
                                            
                                            (12,203
                                            )
                                            
                                            
                                            (8,045
                                            )Income
      from discontinued operations, net of taxes
                                            
                                            
                                            378
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            378Net
      income (loss)
                                            
                                            
                                            (7,667
                                            )
                                            
                                            
                                            1,360
                                            
                                            
                                            
                                            10,843
                                            
                                            
                                            
                                            (12,203
                                            )
                                            
                                            
                                            (7,667
                                            )Accretion
      of convertible preferred stock
                                            
                                            
                                            2,511
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            2,511Preferred
      stock dividends
                                            
                                            
                                            2,816
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            
                                            2,816Net
      income (loss) applicable to common shares
                                            
                                            $
                                            (12,994
                                            )
                                            
                                            $
                                            1,360
                                            
                                            
                                            $
                                            10,843
                                            
                                            
                                            $
                                            (12,203
                                            )
                                            
                                            $
                                            (12,994
                                            )




21




Wolverine
Tube, Inc. and Subsidiaries
 Condensed
Consolidating Balance Sheets
 July
5, 2009
 (Unaudited)
 
 Non-Subsidiary
                                          
                                          
                                          Guarantor(In
      thousands)
                                          
                                          Parent
                                          
                                          
                                          Guarantors
                                          
                                          
                                          Subsidiaries
                                          
                                          
                                          Eliminations
                                          
                                          
                                          ConsolidatedAssetsCurrent
      assetsCash
      and cash equivalents
                                          
                                          $
                                          18,534
                                          
                                          
                                          $
                                          —
                                          
                                          
                                          $
                                          5,928
                                          
                                          
                                          $
                                          —
                                          
                                          
                                          $
                                          24,462Restricted
      cash
                                          
                                          
                                          9,016
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          223
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          9,239Accounts
      receivable, net
                                          
                                          
                                          30,110
                                          
                                          
                                          
                                          9,139
                                          
                                          
                                          
                                          6,398
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          45,647Inventories
                                          
                                          
                                          20,408
                                          
                                          
                                          
                                          20,597
                                          
                                          
                                          
                                          8,378
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          49,383Derivative
      assets
                                          
                                          
                                          858
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          858Prepaid
      expenses and other assets
                                          
                                          
                                          1,265
                                          
                                          
                                          
                                          1,246
                                          
                                          
                                          
                                          399
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          2,910Total
      current assets
                                          
                                          
                                          80,191
                                          
                                          
                                          
                                          30,982
                                          
                                          
                                          
                                          21,326
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          132,499Property,
      plant and equipment, net
                                          
                                          
                                          27,670
                                          
                                          
                                          
                                          13,921
                                          
                                          
                                          
                                          13,795
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          55,386Intangible
      assets and deferred charges, net
                                          
                                          
                                          2,576
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          15
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          2,591Notes
      receivable
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          576
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          576Investment
      in unconsolidated subsidiary
                                          
                                          
                                          10,053
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          10,053Investment
      in subsidiaries
                                          
                                          
                                          333,628
                                          
                                          
                                          
                                          325
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          (333,953
                                          )
                                          
                                          
                                          —Total
      assets
                                          
                                          $
                                          454,118
                                          
                                          
                                          $
                                          45,228
                                          
                                          
                                          $
                                          35,712
                                          
                                          
                                          $
                                          (333,953
                                          )
                                          
                                          $
                                          201,105Liabilities
      and Accumulated DeficitCurrent
      liabilitiesAccounts
      payable
                                          
                                          $
                                          21,371
                                          
                                          
                                          $
                                          4,373
                                          
                                          
                                          $
                                          5,518
                                          
                                          
                                          $
                                          —
                                          
                                          
                                          $
                                          31,262Accrued
      liabilities
                                          
                                          
                                          (12,962
                                          )
                                          
                                          
                                          20,876
                                          
                                          
                                          
                                          2,362
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          10,276Derivative
      liabilities
                                          
                                          
                                          2,291
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          2,291Deferred
      income taxes
                                          
                                          
                                          932
                                          
                                          
                                          
                                          (211
                                          )
                                          
                                          
                                          137
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          858Short-term
      borrowings
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          1,411
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          1,411Intercompany
      balances, net
                                          
                                          
                                          285,124
                                          
                                          
                                          
                                          (262,279
                                          )
                                          
                                          
                                          (22,845
                                          )
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —Total
      current liabilities
                                          
                                          
                                          296,756
                                          
                                          
                                          
                                          (237,241
                                          )
                                          
                                          
                                          (13,417
                                          )
                                          
                                          
                                          —
                                          
                                          
                                          
                                          46,098Long-term
      debt
                                          
                                          
                                          122,723
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          122,723Pension
      liabilities
                                          
                                          
                                          45,853
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          45,853Postretirement
      benefits obligation
                                          
                                          
                                          3,250
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          1,194
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          4,444Accrued
      environmental remediation
                                          
                                          
                                          9,477
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          9,477Deferred
      income taxes, non-current
                                          
                                          
                                          3,549
                                          
                                          
                                          
                                          (3,549
                                          )
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —Accrued
      dividends
                                          
                                          
                                          9,760
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          9,760Other
      liabilities
                                          
                                          
                                          3,128
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          3,128Total
      liabilities
                                          
                                          
                                          494,496
                                          
                                          
                                          
                                          (240,790
                                          )
                                          
                                          
                                          (12,223
                                          )
                                          
                                          
                                          —
                                          
                                          
                                          
                                          241,483Preferred
      Stock
                                          
                                          
                                          26,119
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          —
                                          
                                          
                                          
                                          26,119Accumulated
      deficit
                                          
                                          
                                          (66,497
                                          )
                                          
                                          
                                          286,018
                                          
                                          
                                          
                                          47,935
                                          
                                          
                                          
                                          (333,953
                                          )
                                          
                                          
                                          (66,497
                                          )Total
      liabilities, convertible preferred stock andaccumulated
      deficit
                                          
                                          $
                                          454,118
                                          
                                          
                                          $
                                          45,228
                                          
                                          
                                          $
                                          35,712
                                          
                                          
                                          $
                                          (333,953
                                          )
                                          
                                          $
                                          201,105
  22


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
 
 23




Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Statements of Cash Flows


For
the Six Months Ended July 5, 2009


(Unaudited)





Non-Subsidiary
                                              
                                              
                                              Guarantor(In
      thousands )
                                              
                                              Parent
                                              
                                              
                                              Guarantors
                                              
                                              
                                              Subsidiaries
                                              
                                              
                                              Eliminations
                                              
                                              
                                              ConsolidatedOperating
      ActivitiesNet
      income (loss)
                                              
                                              $
                                              (18,318
                                              )
                                              
                                              $
                                              1,387
                                              
                                              
                                              $
                                              5,034
                                              
                                              
                                              $
                                              (6,421
                                              )
                                              
                                              $
                                              (18,318
                                              )Adjustments
      to reconcile net income (loss) to net cash fromoperating
      activities:Depreciation
                                              
                                              
                                              1,729
                                              
                                              
                                              
                                              1,005
                                              
                                              
                                              
                                              455
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              3,189Amortization
                                              
                                              
                                              794
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              85
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              879Deferred
      income taxes
                                              
                                              
                                              (630
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (106
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (736
                                              )(Gain)
      on sale of fixed assets
                                              
                                              
                                              (273
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (273
                                              )Loss
      on extinguishment of debt
                                              
                                              
                                              3,647
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              3,647Non-cash
      paid-in-kind interest
                                              
                                              
                                              1,165
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              1,165Non-cash
      environmental, restructuring and other charges
                                              
                                              
                                              (88
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              227
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              139Stock
      compensation expense
                                              
                                              
                                              144
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              144Equity
      in earnings of unconsolidated subsidiary
                                              
                                              
                                              (679
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (679
                                              )Equity
      in earnings of subsidiaries
                                              
                                              
                                              (6,421
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              6,421
                                              
                                              
                                              
                                              —Changes
      in operating assets and liabilities
                                              
                                              
                                              (22,784
                                              )
                                              
                                              
                                              (4,831
                                              )
                                              
                                              
                                              21,742
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (5,873
                                              )Net
      cash from continuing operating activities
                                              
                                              
                                              (41,714
                                              )
                                              
                                              
                                              (2,439
                                              )
                                              
                                              
                                              27,437
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (16,716
                                              )Net
      cash from discontinued operating activities
                                              
                                              
                                              (31
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (31
                                              )Net
      cash from operating activities
                                              
                                              
                                              (41,745
                                              )
                                              
                                              
                                              (2,439
                                              )
                                              
                                              
                                              27,437
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (16,747
                                              )Investing
      ActivitiesAdditions
      to property, plant and equipment
                                              
                                              
                                              (2,774
                                              )
                                              
                                              
                                              (280
                                              )
                                              
                                              
                                              200
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (2,854
                                              )Proceeds
      from sale of assets
                                              
                                              
                                              273
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              273Purchase
      of patents
                                              
                                              
                                              (103
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (103
                                              )Change
      in restricted cash
                                              
                                              
                                              28,157
                                              
                                              
                                              
                                              1
                                              
                                              
                                              
                                              341
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              28,499Net
      cash from continuing investing activities
                                              
                                              
                                              25,553
                                              
                                              
                                              
                                              (279
                                              )
                                              
                                              
                                              541
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              25,815Net
      cash from discontinued investing activities
                                              
                                              
                                              1,200
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              1,200Net
      cash from investing activities
                                              
                                              
                                              26,753
                                              
                                              
                                              
                                              (279
                                              )
                                              
                                              
                                              541
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              27,015Financing
      ActivitiesFinancing
      fees and expenses paid
                                              
                                              
                                              (4,391
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (4,391
                                              )Payments
      under revolving credit facilities and other debt
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (79
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (79
                                              )Borrowings
      from revolving credit facilities and other debt
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              1,399
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              1,399Purchase
      or repayment of senior notes
                                              
                                              
                                              (16,142
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (16,142
                                              )Intercompany
      borrowings (payments)
                                              
                                              
                                              35,293
                                              
                                              
                                              
                                              2,718
                                              
                                              
                                              
                                              (38,011
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —Net
      cash from financing activities
                                              
                                              
                                              14,760
                                              
                                              
                                              
                                              2,718
                                              
                                              
                                              
                                              (36,691
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (19,213
                                              )Effect
      of exchange rate changes on cash and cash equivalents
                                              
                                              
                                              (12
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (118
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (130
                                              )Net
      increase (decrease) in cash and cash equivalents
                                              
                                              
                                              (244
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (8,831
                                              )
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (9,075
                                              )Cash
      and cash equivalents at beginning of period
                                              
                                              
                                              18,778
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              14,759
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              33,537Cash
      and cash equivalents at end of period
                                              
                                              $
                                              18,534
                                              
                                              
                                              $
                                              —
                                              
                                              
                                              $
                                              5,928
                                              
                                              
                                              $
                                              —
                                              
                                              
                                              $
                                              24,462


24





Wolverine
Tube, Inc. and Subsidiaries


Condensed
Consolidating Statements of Cash Flows


For
the Six Months Ended June 29, 2008


(Unaudited)





Non-Subsidiary
                                      
                                      
                                      Guarantor(In
      thousands )
                                      
                                      Parent
                                      
                                      
                                      Guarantors
                                      
                                      
                                      Subsidiaries
                                      
                                      
                                      Eliminations
                                      
                                      
                                      ConsolidatedOperating
      ActivitiesIncome
      (loss) from continuing operations
                                      
                                      $
                                      (8,045
                                      )
                                      
                                      $
                                      1,360
                                      
                                      
                                      $
                                      10,843
                                      
                                      
                                      $
                                      (12,203
                                      )
                                      
                                      $
                                      (8,045
                                      )Income
      from discontinued operations
                                      
                                      
                                      378
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      378Net
      income (loss)
                                      
                                      
                                      (7,667
                                      )
                                      
                                      
                                      1,360
                                      
                                      
                                      
                                      10,843
                                      
                                      
                                      
                                      (12,203
                                      )
                                      
                                      
                                      (7,667
                                      )Adjustments
      to reconcile net income (loss) to net cash fromoperating
      activities:Depreciation
                                      
                                      
                                      1,454
                                      
                                      
                                      
                                      959
                                      
                                      
                                      
                                      826
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      3,239Amortization
                                      
                                      
                                      1,161
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      307
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      1,468Deferred
      income taxes
                                      
                                      
                                      (174
                                      )
                                      
                                      
                                      93
                                      
                                      
                                      
                                      (83
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (164
                                      )Gain
      on early extinguishment of debt
                                      
                                      
                                      (858
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (858
                                      )Non-controlling
      interest in Chinese subsidiary
                                      
                                      
                                      275
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      275Change
      in embedded derivative mark to fair value
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      1,282
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      1,282Impairment
      of assets held for sale
                                      
                                      
                                      391
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      391Non-cash
      environmental, restructuring and other charges
                                      
                                      
                                      (5,107
                                      )
                                      
                                      
                                      (68
                                      )
                                      
                                      
                                      (2,100
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (7,275
                                      )Stock
      compensation expense
                                      
                                      
                                      1,124
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      1,124Equity
      in earnings of subsidiaries
                                      
                                      
                                      (12,203
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      12,203
                                      
                                      
                                      
                                      —Changes
      in operating assets and liabilities
                                      
                                      
                                      18,093
                                      
                                      
                                      
                                      550
                                      
                                      
                                      
                                      (40,513
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (21,870
                                      )Net
      cash from continuing operating activities
                                      
                                      
                                      (3,889
                                      )
                                      
                                      
                                      2,894
                                      
                                      
                                      
                                      (29,438
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (30,433
                                      )Net
      cash from discontinued operating activities
                                      
                                      
                                      (10,491
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (10,491
                                      )Net
      cash from operating activities
                                      
                                      
                                      (14,380
                                      )
                                      
                                      
                                      2,894
                                      
                                      
                                      
                                      (29,438
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (40,924
                                      )Investing
      ActivitiesAdditions
      to property, plant and equipment
                                      
                                      
                                      (955
                                      )
                                      
                                      
                                      (409
                                      )
                                      
                                      
                                      (1,373
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (2,737
                                      )Proceeds
      from sale of assets
                                      
                                      
                                      5,416
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      5,416Proceeds
      from sale of interest in Chinese subsidiary
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      9,500
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      9,500Change
      in restricted cash
                                      
                                      
                                      (4,788
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (43
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (4,831
                                      )Net
      cash from continuing investing activities
                                      
                                      
                                      (327
                                      )
                                      
                                      
                                      (409
                                      )
                                      
                                      
                                      8,084
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      7,348Net
      cash from discontinued investing activities
                                      
                                      
                                      22,201
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      22,201Net
      cash from investing activities
                                      
                                      
                                      21,874
                                      
                                      
                                      
                                      (409
                                      )
                                      
                                      
                                      8,084
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      29,549Financing
      ActivitiesFinancing
      fees and expenses paid
                                      
                                      
                                      (1,560
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (153
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (1,713
                                      )Payments
      under revolving credit facilities and other debt
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (676
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (676
                                      )Borrowings
      from revolving credit facilities and other debt
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      158
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      158Issuance
      of preferred stock
                                      
                                      
                                      14,194
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      14,194Purchase
      or repayment of senior notes
                                      
                                      
                                      (36,347
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (36,347
                                      )Payment
      of dividends
                                      
                                      
                                      (2,042
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (2,042
                                      )Intercompany
      dividends
                                      
                                      
                                      19,644
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (19,644
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —Intercompany
      borrowings (payments)
                                      
                                      
                                      (41,047
                                      )
                                      
                                      
                                      (2,485
                                      )
                                      
                                      
                                      43,532
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —Net
      cash from continuing financing activities
                                      
                                      
                                      (47,158
                                      )
                                      
                                      
                                      (2,485
                                      )
                                      
                                      
                                      23,217
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (26,426
                                      )Effect
      of exchange rate changes on cash and cash equivalents
                                      
                                      
                                      15,646
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (14,785
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      861Net
      increase (decrease) in cash and cash equivalents
                                      
                                      
                                      (24,018
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (12,922
                                      )
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (36,940
                                      )Cash
      and cash equivalents at beginning of period
                                      
                                      
                                      37,981
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      25,322
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      63,303Cash
      and cash equivalents at end of period
                                      
                                      $
                                      13,963
                                      
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      12,400
                                      
                                      
                                      
                                      —
                                      
                                      
                                      $
                                      26,363


(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.


25


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.  For the three and six months ended July 5, 2009 and
June 29, 2008 we paid $0.3 million and $0.6 million, respectively, 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.
The consulting agreement terminated in January 2009. Under the terms of the
consulting agreement, we paid Mr. Weil $22.0 thousand in January 2009 in
consulting fees.  For the three and six months ended June 29, 2008, we
paid Mr. Weil $66.1 thousand and $147.7 thousand, respectively, in
consulting fees.





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 three and six months ended July 5, 2009, we
purchased 10.8 million and 24.5 million pounds, respectively, of copper cathode
and scrap from Exeon at the COMEX current month average price, representing
75.8% and 80.3%, respectively, of our North American copper purchases for the
periods.   Fees charged for the services provided for the three
and six month periods ended July 5, 2009 were $0.1 million and $0.2
million.  These fees approximate our cost to perform the same services
in-house. As of July 5, 2009, we had $2.8 million payable to Exeon for these
purchases. During the three and six months ended June 29, 2008, we purchased
21.6 million and 48.7 million pounds, respectively, of copper cathode and scrap
from Exeon at the COMEX current month average price, representing 66.2% and
71.6%, respectively, of our North American copper purchases for the
periods.   Fees charged for the services provided for the three
and six month periods ended June 29, 2008 were $0.1 million and $0.3
million.  These fees approximate our cost to perform the same services
in-house. We had no outstanding payable to Exeon for these purchases for the
period ended June 29, 2009.





(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.





The
following table presents the Company’s fair value hierarchy for those assets and
liabilities measured at fair value on a recurring basis as of July 5, 2009 and
December 31, 2009:


26





July
      5, 2009
                            
                            
                            December
      31, 2008($s
      in millions)
                            
                            Level
      1
                            
                            
                            Level
      2
                            
                            
                            Level
      3
                            
                            
                            Total
                            
                            
                            Level
      1
                            
                            
                            Level
      2
                            
                            
                            Level
      3
                            
                            
                            TotalAssetsDerivative
      assets
                            
                            $
                            0.9
                            
                            
                            $
                            —
                            
                            
                            $
                            —
                            
                            
                            $
                            0.9
                            
                            
                            $
                            0.3
                            
                            
                            $
                            —
                            
                            
                            $
                            —
                            
                            
                            $
                            0.3Liabilities:Derivative
      liabilities
                            
                            $
                            (2.3
                            )
                            
                            $
                            —
                            
                            
                            $
                            —
                            
                            
                            $
                            (2.3
                            )
                            
                            $
                            (5.4
                            )
                            
                            $
                            —
                            
                            
                            $
                            —
                            
                            
                            $
                            (5.4
                            )


On July
5, 2009, the Company adopted 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.





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




Cash and cash equivalents,
restricted cash, accounts receivable, and accounts payable: The carrying
amount reported in the Consolidated Balance Sheets for these assets approximates
their fair value because of the short maturity of these
instruments.




Secured revolving credit
facility and long-term debt: The carrying amount of our borrowings under
our 15% Senior Secured Notes and other debt approximates fair value. The fair
value of our 10.5% Senior Notes is based upon quoted market prices.






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




July
      5, 2009
                        
                        
                        December
      31, 2008(In
      thousands)
                        
                        Carrying
      value
                        
                        
                        Fair
      Value
                        
                        
                        Carrying
      value
                        
                        
                        Fair
      ValueCash
      and cash equivalents
                        
                        $
                        24,462
                        
                        
                        $
                        24,462
                        
                        
                        $
                        33,537
                        
                        
                        $
                        33,537Restricted
      cash
                        
                        $
                        9,239
                        
                        
                        $
                        9,239
                        
                        
                        $
                        37,738
                        
                        
                        $
                        37,738Accounts
      receivable
                        
                        $
                        45,647
                        
                        
                        $
                        45,647
                        
                        
                        $
                        38,626
                        
                        
                        $
                        38,626Accounts
      payable
                        
                        $
                        31,262
                        
                        
                        $
                        31,262
                        
                        
                        $
                        34,713
                        
                        
                        $
                        34,713Senior
      Notes
                        
                        $
                        122,723
                        
                        
                        $
                        122,723
                        
                        
                        $
                        137,656
                        
                        
                        $
                        115,629Other
      debt
                        
                        $
                        1,411
                        
                        
                        $
                        1,411
                        
                        
                        $
                        14
                        
                        
                        $
                        14




(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, 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.


27


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 July 5, 2009, the Company had the
following outstanding commodity contracts related to these
derivatives:





VolumeCommodity
                        
                        (net
      purchase and (sale) contracts)Copper
                        
                        4.1
      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 July 5, 2009, the Company had no outstanding
commodity contracts related to these derivatives.





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
derivative liabilities in the Condensed Consolidated Balance Sheets. The net
change in the derivative asset and liabilities and the underlying hedged amounts
are recognized in the Condensed Consolidated Statements of Operations under cost
of goods sold. As of July 5, 2009, the Company had the following outstanding
commodity contracts related to these derivatives:





VolumeCommodity
                        
                        (net
      purchase and (sale) contracts)Copper
                        
                        (1.2)
      million
pounds


In
February 2009 we terminated our silver consignment arrangement and purchased our
silver on the open market.  Consequently, we must purchase and hold
our silver in inventory.  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 derivative liabilities and the underlying hedged amounts are
recognized in the Condensed Consolidated Statements of Operations under cost of
goods sold. As of July 5, 2009, the Company had the following outstanding
commodity contracts related to these derivatives:





VolumeCommodity
                      
                      (net
      purchase and (sale) contracts)Silver
                      
                      (766,159)
      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 July 5, 2009,
the Company had the following outstanding commodity contracts related to these
derivatives:





VolumeCommodity
                      
                      (net
      purchase and (sale) contracts)Tin
                      
                      (44,093)
      poundsNickel
                      
                      (66,139)
      pounds


28


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 July 5, 2009, we had forward
exchange contracts outstanding to sell Euros and British Pounds with a notional
amount of $1.6 million. The estimated fair value of these forward exchange
contracts to sell foreign currency was a loss of $7.0 thousand. The effect of a
10% adverse change in exchange rates would reduce the fair value by
approximately $12.9 thousand.





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





Asset
      Derivatives
                                                                        
                                                                        Liability
      Derivatives($s
      in millions)
                                                                        
                                                                        July
      5, 2009
                                                                        
                                                                        July
      5, 2009Derivatives
      designated as hedging
                                                                        
                                                                        Balance
      Sheet
                                                                        
                                                                        
                                                                        
                                                                        Balance
      Sheetinstruments
                                                                        
                                                                        Location
                                                                        
                                                                        Fair
      Value
                                                                        
                                                                        Location
                                                                        
                                                                        Fair
      ValueCommodity
      Contracts:Copper
      - Customer Contracts
                                                                        
                                                                        Derivative
      Asset
                                                                        
                                                                        $
                                                                        0.5
                                                                        
                                                                        Derivative
      Liability
                                                                        
                                                                        $
                                                                        (0.6
                                                                        )Copper
      - Base Inventory
                                                                        
                                                                        Derivative
      Asset
                                                                        
                                                                        
                                                                        0.4
                                                                        
                                                                        Derivative
      Liability
                                                                        
                                                                        
                                                                        (1.0
                                                                        )Silver
      - Base Inventory
                                                                        
                                                                        Derivative
      Asset
                                                                        
                                                                        
                                                                        —
                                                                        
                                                                        Derivative
      Liability
                                                                        
                                                                        
                                                                        (0.5
                                                                        )Total
      derivatives designated ashedging
      instruments
                                                                        
                                                                        
                                                                        
                                                                        $
                                                                        0.9
                                                                        
                                                                        
                                                                        
                                                                        $
                                                                        (2.1
                                                                        )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
                                                                        
                                                                        
                                                                        (0.1
                                                                        )Total
      derivatives not designated ashedging
      instruments
                                                                        
                                                                        
                                                                        
                                                                        $
                                                                        —
                                                                        
                                                                        
                                                                        
                                                                        $
                                                                        (0.2
                                                                        )Total
      Derivatives
                                                                        
                                                                        
                                                                        
                                                                        $
                                                                        0.9
                                                                        
                                                                        
                                                                        
                                                                        $
                                                                        (2.3
                                                                        )


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 July 5, 2009 and June 29, 2008 were as
follows:


29


Cash Flow
Hedges





($s
      in millions)
                                
                                Amount of gain or (loss) recognized in OCI on
                                  derivative (effective portion)
                                
                                
                                
                                Amount of gain or (loss) reclassified from
                                  Accumulated OCI into earnings (effective
                                  portion)Location of gain or (loss)reclassified fromDerivatives in cash-flow
                                
                                
                                
                                
                                
                                
                                Accumulated OCI into
                                
                                Three months ended
                                
                                
                                Three months endedhedging relationships
                                
                                July 5, 2009 *
                                
                                
                                June 29, 2008
                                
                                earnings (effective portion)
                                
                                July 5, 2009
                                
                                
                                June 29, 2008Commodity
      Contracts:Copper
      - Customer Contracts
                                
                                $
                                (0.2
                                )
                                
                                $
                                —
                                
                                Cost
      of goods sold
                                
                                $
                                (0.5
                                )
                                
                                $
                                —Copper
      - Future Receipts
                                
                                
                                —
                                
                                
                                
                                0.1
                                
                                Cost
      of goods sold
                                
                                
                                —
                                
                                
                                
                                (0.7
                                )Total
                                
                                $
                                (0.2
                                )
                                
                                $
                                0.1
                                
                                
                                
                                $
                                (0.5
                                )
                                
                                $
                                (0.7
                                )


*The
company expects to recognize these amounts into earnings 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)
                                          
                                          July
      5, 2009
                                          
                                          
                                          June
      29, 2008Commodity
      Contracts:Copper
      - Customer Contracts
                                          
                                          Cost
      of goods sold
                                          
                                          $
                                          (0.2
                                          )
                                          
                                          $
                                          0.2Total
                                          
                                          
                                          
                                          $
                                          (0.2
                                          )
                                          
                                          $
                                          0.2





Amount of gain or (loss) reclassified fromAmount of gain or (loss) recognized in OCI on
                                
                                
                                
                                Accumulated OCI into earnings (effective($s in millions)
                                
                                derivative (effective portion)
                                
                                
                                
                                portion)Location of gain or (loss)reclassified fromDerivatives in cash-flow
                                
                                
                                
                                
                                
                                
                                Accumulated OCI into
                                
                                Six months ended
                                
                                
                                Six months endedhedging relationships
                                
                                July 5, 2009 *
                                
                                
                                June 29, 2008
                                
                                earnings (effective portion)
                                
                                July 5, 2009
                                
                                
                                June 29, 2008Commodity
      Contracts:Copper
      - Customer Contracts
                                
                                $
                                (0.2
                                )
                                
                                $
                                —
                                
                                Cost
      of goods sold
                                
                                $
                                (1.7
                                )
                                
                                $
                                0.4Copper
      - Future Receipts
                                
                                
                                —
                                
                                
                                
                                0.1
                                
                                Cost
      of goods sold
                                
                                
                                —
                                
                                
                                
                                (1.3
                                )Total
                                
                                $
                                (0.2
                                )
                                
                                $
                                0.1
                                
                                
                                
                                $
                                (1.7
                                )
                                
                                $
                                (0.9
                                )




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
            
            Six months ended
            
            
            Six months endedhedging relationships
            
            effectiveness testing)
            
            July 5, 2009
            
            
            June 29, 2008Commodity
      Contracts:Copper
      - Customer Contracts
            
            Cost
      of goods sold
            
            $
            (0.5
            )
            
            $
            —Total
            
            
            
            $
            (0.5
            )
            
            $
            —


30


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
                          
                          July 5, 2009
                          
                          
                          June 29, 2008
                          
                          
                          July 5, 2009
                          
                          
                          June 29, 2008Commodity
      Contracts:Copper
      - Base Inventory
                          
                          Cost
      of goods sold
                          
                          $
                          (0.7
                          )
                          
                          $
                          (1.5
                          )
                          
                          $
                          0.1
                          
                          
                          $
                          (0.2
                          )Silver
      - Base Inventory
                          
                          Cost
      of goods sold
                          
                          
                          1.0
                          
                          
                          
                          0.1
                          
                          
                          
                          (0.1
                          )
                          
                          
                          0.2Total
                          
                          
                          
                          $
                          0.3
                          
                          
                          $
                          (1.4
                          )
                          
                          $
                          —
                          
                          
                          $
                          —


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
            
            Six months ended
            
            
            Six months ended
            
            
            Six months ended
            
            
            Six months endedhedging relationships
            
            derivative
            
            July 5, 2009
            
            
            June 29, 2008
            
            
            July 5, 2009
            
            
            June 29, 2008Commodity
      Contracts:Copper
      - Base Inventory
            
            Cost
      of goods sold
            
            $
            (0.6
            )
            
            $
            (1.6
            )
            
            $
            0.1
            
            
            $
            0.2Silver
      - Base Inventory
            
            Cost
      of goods sold
            
            
            1.0
            
            
            
            0.2
            
            
            
            —
            
            
            
            0.2Total
            
            
            
            $
            0.4
            
            
            $
            (1.4
            )
            
            $
            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
              
              July 5, 2009
              
              
              June 29, 2008Commodity
      Contracts:Nickel
              
              Cost
      of goods sold
              
              $
              (0.1
              )
              
              $
              0.2Tin
              
              Cost
      of goods sold
              
              
              (0.1
              )
              
              
              (0.3
              )Copper
              
              Cost
      of goods sold
              
              
              (0.2
              )
              
              
              —Total
              
              
              
              $
              (0.4
              )
              
              $
              (0.1
              )





Amount of gain or (loss) recognized in earnings($'s in millions)
              
              
              
              on derivative</fon
      t>Location of gain or (loss)Derivatives not designated as
              
              recognized in earnings on
              
              Six months ended
              
              
              Six months ended Junehedging instruments
              
              derivative
              
              July 5, 2009
              
              
              
              29, 2008Commodity
      Contracts:Nickel
              
              Cost
      of goods sold
              
              $
              (0.1
              )
              
              $
              0.2Tin
              
              Cost
      of goods sold
              
              
              —
              
              
              
              (0.3
              )Copper
              
              Cost
      of goods sold
              
              
              (0.3
              )
              
              
              —Total
              
              
              
              $
              (0.4
              )
              
              $
              (0.1
              )





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.


31


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.





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.





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%.


32


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.





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, 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 March
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.  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 10.5% Senior Notes and 10.5% Senior Exchange
Notes due 2009 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.


33





Results
of Operations





The
following discussion summarizes the significant factors affecting the
consolidated operating results of the Company for the three and six months ended
July 5, 2009 and June 29, 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 July 5, 2009 were $113.6 compared to $245.5
      for the quarter ended June 29, 2008. The 53.7% decrease in sales year over
      year was the result of a 43.6% 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.




·
            The
      number of pounds shipped decreased to 32.9 million pounds, a 29.2%
      decrease in 2009 from the previous year reflecting the declining markets
      due to overall economic
uncertainties.




·
            Gross
      profit for the second quarter of 2009 was $4.6 million compared to $7.9
      million for the second quarter of 2008; however, gross profit as a
      percentage of sales increased to 4.0% compared to 3.2% 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. Continued improvements in efficiency and productivity
      contributed to the overall increase in gross profit percentage of
      sales.




·
            The
      net loss applicable to common stockholders for quarter ended July 5, 2009
      was $14.5 million compared to a net loss of $14.7 million for the quarter
      ended June 29, 2008.  The 53.7% decrease in sales, resulting
      lower gross margins, and a $3.6 million loss on extinguishment of debt
      more than offset improvements in selling, general and administrative
      (“SG&A”) expenses, restructuring and impairment charges and interest
      expense, net. The loss in 2008 included a $5.8 million loss from
      discontinued operations resulting from the sale of our Canadian
      operations.




·
            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 28, 2009,
      the Company successfully completed the Exchange Offer 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 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 July 5, 2009, Compared with the Three Months Ended June
29, 2008:





For
      the three months ended
                
                
                Increase
                
                
                %
      Increase(In
      thousands, except for percentages)
                
                July
      5, 2009
                
                
                June
      29, 2008
                
                
                (Decrease)
                
                
                (Decrease)Total
      Pounds Shipped
                
                
                32,877
                
                
                
                46,468
                
                
                
                (13,591
                )
                
                
                (29.2
                )%





Total
pounds shipped decrease by 29.2% in 2009 compared to the same quarter of 2008
due to overall economic uncertainties, 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)
                
                July 5, 2009
                
                
                June 29, 2008
                
                
                (Decrease)
                
                
                (Decrease)Net
      Sales
                
                $
                113,580
                
                
                $
                245,511
                
                
                $
                (131,931
                )
                
                
                (53.7
                )%





The 53.7%
decrease in net sales for the second quarter of 2009 as compared to the same
quarter of 2008 resulted from the 29.2% decrease in pounds shipped, changes in
mix reflecting lower volumes of value-added products such as technical tube and
tube forming products, and a 43.6% decrease in the price of copper year over
year.  As a result of the decrease in copper prices, our per unit
selling price for the quarter ended July 5, 2009 was $3.46 compared to $5.28 for
the quarter ended June 29, 2008.





Forthethreemonthsended
                  
                  
                  Increase
                  
                  
                  % Increase(In thousands, except for percentages)
                  
                  July 5, 2009
                  
                  
                  June 29, 2008
                  
                  
                  (Decrease)
                  
                  
                  (Decrease)Gross
      Profit
                  
                  $
                  4,582
                  
                  
                  $
                  7,942
                  
                  
                  $
                  (3,360
                  )
                  
                  
                  (42.3
                  )%


34


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. Continued improvements in manufacturing efficiency and
productivity contributed to the overall increase in gross profit as a percentage
of sales.





Selling,
general and administrative expenses of $6.9 million for the quarter ended July
5, 2009 were $0.6 million more than the quarter ended  June 29,
2008.  Increased legal fees of $1.6 million associated primarily with
our recent refinancing efforts were offset by continued reductions in the
corporate general and administration burden.





Net loss
on divestitures recorded in the second quarter of 2008 of $0.4 million reflects
additional expenses related to 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 second quarter of
2009.





Restructuring
and impairment charges for the quarter ended July 5, 2009 of $0.7 million were
$0.4 million less than the $1.1 million expense for the same quarter of
2008.  The $0.7 million expenses for the 2009 quarter included $0.2
million associated with the closure of our Booneville, Mississippi facility and
the significant downsizing of our Decatur, Alabama facility, severance charges
of $0.2 million in connection with our continued SG&A restructuring effort
and $0.3 million related to realigning operations at our Monterrey, Mexico
facility. Of the $1.1 million restructuring expenses in the second quarter of
2008, $0.3 million  related to the actions at our Decatur, Alabama and
Booneville, Mississippi facilities and the reduction of corporate general and
administration burden, and  $0.8 million related to the closure of our
Montreal, Quebec facility.





Net
interest expense for the quarter ended July 5, 2009 was $4.5 million compared to
interest expense of $4.8 million for the second quarter of
2008.  Interest expense due to the notes increased by $0.4 million due
to the 10.5% Senior Notes and 10.5% Senior Exchange Notes being exchanged for
15% Senior Secured Notes on April 28, 2009.  This was offset by a $0.1
million reduction in interest income in 2009.  During the second
quarter of 2008, interest income was generated from funds invested as a result
of the influx of cash from our recapitalization plan in 2008.





During
the second quarter of 2009, we recognized a $3.6 million loss on the
extinguishment of debt related to the Exchange Offer that was successfully
completed on April 28, 2009.  This loss represents the 3% exchange fee
that was paid to holders of the 10.5% Senior Notes and 10.5% Senior Exchange
Notes that exchanged their notes for the 15% Senior Secured Notes.





Non-controlling
interest for the quarter ended June 29, 2008 of $0.2 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 July 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, bringing
their ownership interest to 50.0%, at which time we began recording our
investment in WTS using the equity method.





A net tax
expense of $0.3 million was recorded in 2009 as compared with a net tax expense
of $0.8 million in 2008.  Tax expense in 2009 and 2008 reflects taxes
accrued in foreign entities where we had taxable income for the quarter. The net
tax expense from pre-tax income in our U.S. operations required an offsetting
decrease in our tax valuation reserve and therefore no tax expense was recorded
for these operations





Dividends
on our Series A and Series B Convertible Preferred Stock were $2.2 million for
the quarter ended July 5, 2009 versus $1.6 million during the quarter ended June
29, 2008.  The increase in the dividends was due in part to the
additional shares of preferred stock purchased by Alpine during the second 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 Indentures governing our 10.5%
Senior Notes and recently issued Senior Secured Notes, we have deferred $9.9
million in preferred stock dividends that accrued through the period ended July
5, 2009, as reflected in the Condensed Consolidated Balance Sheets in accrued
dividends.


35





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 July 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 second quarter of 2009 was $14.5
million, or a loss of $0.36 per common share, compared with a net loss of $14.7
million, or a loss of $0.36 per common share for the second quarter of
2008.





For
the Six Months Ended July 5, 2009, Compared with the Six Months Ended June 29,
2008:





For the six months ended
              
              
              Increase
              
              
              % Increase(In thousands, except for percentages)
              
              July 5, 2009
              
              
              June 29, 2008
              
              
              (Decrease)
              
              
              (Decrease)Total
      Pounds Shipped
              
              
              63,561
              
              
              
              87,142
              
              
              
              (23,581
              )
              
              
              (27.1
              )%





Total
pounds shipped decrease by 27.1% in the first six months of 2009 compared to the
same period of 2008 due to lower demand in domestic and international air
conditioning markets and decreased demand in domestic appliance
markets.





For the six months ended
              
              
              Increase
              
              
              % Increase(In thousands, except for percentages)
              
              July 5, 2009
              
              
              June 29, 2008
              
              
              (Decrease)
              
              
              (Decrease)Net
      Sales
              
              $
              223,182
              
              
              $
              446,970
              
              
              $
              (223,789
              )
              
              
              (50.1
              )%





The 50.1%
decrease in net sales for the six months ended July 5, 2009 as compared to the
same  period of 2008 resulted from the 27.1% decrease in pounds
shipped and a 49.4% decrease in the price of copper year over
year.  As a result of the decrease in copper prices, our per unit
selling price for the six months ended July 5, 2009 was $3.51 compared to $5.13
for the six months ended June 29, 2008.





For the six months ended
              
              
              Increase
              
              
              % Increase(In thousands, except for percentages)
              
              July 5, 2009
              
              
              June 29, 2008
              
              
              (Decrease)
              
              
              (Decrease)Gross
      Profit
              
              $
              8,157
              
              
              $
              18,945
              
              
              $
              (10,788
              )
              
              
              (56.9
              )%





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.





Selling,
general and administration expenses of $12.5 million for the six months ended
July 5, 2009 were $0.7 million less than the six months ended June 29, 2008,
reflecting the continued reductions in the corporate general and administration
burden offset by increased legal fees associated primarily with our recent
refinancing efforts.





Net gain
on divestitures recorded in the first six months of 2008 of $5.0 million
reflects the gain on the sale of a 30.0% indirect equity interest in Wolverine
Tube Shanghai (“WTS”) to The Weiland Group (“Weiland”) on March 14,
2008.  No divestitures were recorded in the same period of
2009.





Restructuring
and impairment charges for the six months ended July 5, 2009 of $1.5 million
were $3.6 million less than the same period of 2008.  The $1.5 million
expense for the six month period of 2009 included $0.5 million associated with
the closure of our Booneville, Mississippi facility and the significant
downsizing of our Decatur, Alabama facility, severance charges of $0.7 million
in connection with our continued SG&A restructuring effort and $0.3 million
related to realigning operations at our Monterrey, Mexico facility.
Restructuring expenses of $5.1 million for the six month period ended June 29,
2008 included a $0.4 million non-cash write down of the fair value to the sale
price of the Booneville, Mississippi  assets held for sale, $3.4
million related to the Decatur, Alabama and Booneville, Mississippi facilities
and the reduction of corporate general and administration burden, and $1.3
million related to the closure of our Jackson, Tennessee and Montreal Quebec
manufacturing facilities and the relocation our U.S wholesale warehouse into the
Decatur, Alabama facility.





Net
interest expense of $8.0 million for the six months ended July 5, 2009 decreased
by $1.8 million from the $9.8 million for the six month period of
2008.  Bond interest was reduced by $2.3 million due primarily to the
7.375% Senior Notes being paid in August of 2008.  This was offset by
a $0.5 million reduction in interest income in 2009.  During the first
six months of 2008, interest income was generated from funds invested as a
result of the influx of cash from our recapitalization plan in
2008.


36


Non-controlling
interest for the six months ended June 29, 2008 of $0.3 million reflects the
earnings of the 30.0% equity interest in WTS, which was purchased by Wieland
effective March 14, 2008.





During
the second quarter of 2009, we recognized a $3.6 million loss on the
extinguishment of debt related to the Exchange Offer that was successfully
completed on April 28, 2009.  This loss represents the 3% exchange fee
that was paid to holders of the 10.5% Senior Notes and 10.5% Senior Exchange
Notes that exchanged their notes for the 15% Senior Secured Notes.





Equity in
earnings of unconsolidated subsidiary for the six months ended July 5, 2009 of
$0.7 million represents our 50.0% equity investment in WTS. Wieland purchased an
additional indirect 20.0% equity interest in WTS on September 15, 2008, bringing
their ownership interest to 50.0%, at which time we began recording our
investment in WTS using the equity method.





A net tax
expense of $0.6 million was recorded in for the first six months of 2009 as
compared with a net tax expense of $1.9 million in 2008.  Tax expense
in 2009 reflects taxes accrued in foreign entities where we had taxable income
for the period. Tax expense in 2008 reflects taxes accrued in foreign entities
where we had taxable income for the period and alternative minimum taxes accrued
associated with our U.S. consolidated operations.  The net tax benefit
from the pretax loss in the U.S. was offset by an increase in our valuation
allowance and therefore no other tax expense beyond the alternative minimum tax
expense was recorded during the first six months of 2008.





Dividends
on our Series A and Series B Convertible Preferred Stock were $4.3 million for
the six months ended July 5, 2009 versus $2.8 million during the six months
ended June 29, 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 Indentures governing our 10.5%
Senior Notes and recently issued Senior Secured Notes, we have deferred $9.9
million in preferred stock dividends that accrued through the period ended July
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 July 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 six months of 2009 was $25.1
million, or a loss of $0.62 per common share, compared with a net loss of $13.0
million, or a loss of $0.33 per common share in for the same period of
2008.


37


Liquidity
and Capital Resources





The
following table presents selected information concerning our financial
condition:





(In thousands)
              
              July 5, 2009
              
              
              December 31, 2008Cash
      and Cash Equivalents
              
              $
              24,462
              
              
              $
              33,537Working
      Capital*
              
              $
              54,111
              
              
              $
              46,282Total
      Debt
              
              $
              124,134
              
              
              $
              137,670Current
      Ratio*
              
              
              2.21
              
              
              
              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 8, Financing Arrangements and
Debt, in the Notes to the Condensed Consolidated Financial Statements
inclueded 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 our Form 10-Q for the period ended
April 5, 2009.





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 six months ending July 5, 2009, we had a net decrease in cash and
cash equivalents of $9.0 million from December 31, 2008.  Cash was
provided primarily from the decrease in restricted cash of $28.5 million, $1.2
million refund of escrow associated with the sale of STP and an increase in
foreign subsidiaries cash of $1.3 million.  Increases in cash were
more than offset by cash used to purchase $16.1 million of 10.5% Senior Notes,
$8.3 million used to pay interest on the 10.5% Senior Notes and 10.5% Senior
Exchange Notes, $3.6 million used to pay financing fees related to the Exchange
Offer, cash used in investing activities of $2.7 million, cash used for other
financing activities of $0.8 million, the effect of exchange rates on cash and
cash equivalents of $0.1 million, and cash used in operating activities of $8.4
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 July 5, 2009 and December 31, 2008 was $9.2 million and $37.7
million, respectively.  Restricted cash at July 5, 2009 included $3.5
million related to deposits for margin calls on our metal hedge programs, $5.5
million of deposits to cover our insurance reserves and $0.2 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 10.5% Senior Notes and paid interest
and fees associated with the Exchange Offer.  Our uses of liquidity
for the balance of 2009 is expected to consist of normal operating activities,
capital and restructuring expenditures of approximately $3.9 million and
interest on our Senior Secured Notes.


38


Redemption of
notesOn February 26,  2009, we announced the
commencement of 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 Senior Secured 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.





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 six months
of 2009 was $16.7 million compared to $40.9 million in the same period of
2008.





Capital
expenditures.In the six month period ended July 5, 2009,
capital expenditures totaled $2.9 million compared to $2.7 million for the same
period 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 $3.9
million.





Interest on our notes. As of
July 5, 2009, we paid interest of $2.3 million on our 10.5% Senior Exchange
Notes and $6.0 million on our 10.5% Senior Notes.  In addition, $5.3
million is scheduled to be paid on September 30, 2009, which represents the 10%
cash interest portion of the 15% 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 July 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 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 July 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 July 5, 2009 and could result in
additional exposure if these environmental matters are not resolved as
anticipated.


39


Critical
Accounting Policies





As of
July 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 improves 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 Emerging Issues Task Force 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.


40


On July
5, 2009, the Company adopted FASB Statement No. 165, Subsequent Events(SFAS 165).
The statement establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued.  Specifically, the Statement
defines: (1) the period after the balance sheet date during which management of
a reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements, (2) the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements, and (3) the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date.  Management has reviewed events
occurring through August 18, 2009, the date the financial statements were issued
and no subsequent events occurred requiring accrual or disclosure.





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 second quarter of 2009 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting





PART
II              OTHER
INFORMATION





Item
1A.              Risk
Factors





The
Company has included in its Annual Report on Form 10-K for the year ended
December 31, 2008 and in Form10Q for the first quarter of 2009 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.





Item
6.                 Exhibits





Item 6.
              
              Exhibits10.1
              
              Indenture,
      dated as of April 28, 2009 among Wolverine Tube, Inc., the subsidiary
      guarantors named therein and U.S. Bank National Association, as trustee
      and collateral agent (incorporated by reference to Exhibit 10.15 to the
      Company's Current Report on Form 8-K filed on May 4,
  2009).10.2
              
              Guarantee
      and Collateral Agreement, dated as of April 28, 2009 among Wolverine Tube,
      Inc., the subsidiary guarantors named therein and U.S. Bank National
      Association, as collateral agent (incorporated by reference to Exhibit
      10.16 to the Company's Current Report on Form 8-K filed on May 4,
      2009).16.1
              
              Letter
      re: Change in Registrant's Certifying Accountant Letter from KPMG, LLP to
      the Securities and Exchange Commission dated July 30, 2009 (incorporated
      by reference to exhibit 16.1 to the Company's Current Report on Form 8-K,
      filed on July 27, 2009).31.1+
              
              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
      2002.32.2+
              
              Certification
      of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.







41


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
      18, 2009
            By:  /s/
      David A. OwenName:   David
      A. OwenTitle:   
      Senior Vice President, Chief Financial Officer and
    Secretary


42