##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 for the quarterly period ended October 2, 2005
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 for
the transition period from   to .
 COMMISSION FILE NUMBER 1-12164
 WOLVERINE TUBE, INC.
  Delaware
    
    63-0970812(State of Incorporation)
    
    (IRS Employer Identification No.)
  200 Clinton Avenue West, Suite 1000Huntsville, Alabama
    
    35801(Address of Principal Executive Offices)
    
    (Zip Code)
  (Registrants Telephone Number, including Area Code)
 þ o
 þ o
 o þ
  Class
    
    Outstanding as of November 10, 2005Common Stock, $0.01 Par Value
    
    15,035,718 Shares




---



FORM 10-Q
 QUARTERLY REPORT
 TABLE OF CONTENTS
 Page No.PART IItem 1. Financial StatementsCondensed Consolidated Statements of Operations (Unaudited)  Three and nine months ended October 2, 2005 and October 3, 2004
    
    
    1Condensed Consolidated Balance Sheets  October 2, 2005 (Unaudited) and December 31, 2004
    
    
    2Condensed Consolidated Statements of Cash Flows (Unaudited)  Nine months ended October 2, 2005 and October 3, 2004
    
    
    3Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    42Item 4. Controls and Procedures
    
    
    46PART IIItem 5. Other Information
    
    
    46Item 6. Exhibits
    
    
    46EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 906 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Wolverine Tube, Inc. and Subsidiaries
 
 Condensed Consolidated Statements of Operations
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands except per share amounts)Net sales
    
    $
    225,704
    
    
    $
    200,038
    
    
    $
    635,507
    
    
    $
    619,923Cost of goods sold
    
    
    227,615
    
    
    
    187,713
    
    
    
    621,704
    
    
    
    568,532Gross profit/(loss)
    
    
    (1,911
    )
    
    
    12,325
    
    
    
    13,803
    
    
    
    51,391Selling, general and administrative expenses
    
    
    8,795
    
    
    
    9,195
    
    
    
    25,747
    
    
    
    28,694Restructuring charges
    
    
    1,849
    
    
    
    862
    
    
    
    1,903
    
    
    
    1,727Operating income/(loss) from continuing operations
    
    
    (12,555
    )
    
    
    2,268
    
    
    
    (13,847
    )
    
    
    20,970Other expenses:Interest expense, net
    
    
    5,235
    
    
    
    4,922
    
    
    
    15,801
    
    
    
    15,752Amortization and other, net
    
    
    323
    
    
    
    (22
    )
    
    
    765
    
    
    
    1,115Loss on extinguishment of debt
    
    
    
    
    
    
    2,372
    
    
    
    
    
    
    
    3,009Income/(loss) from continuing operations before
income taxes
    
    
    (18,113
    )
    
    
    (5,004
    )
    
    
    (30,413
    )
    
    
    1,094Income tax provision/(benefit)
    
    
    (6,915
    )
    
    
    (2,492
    )
    
    
    (11,051
    )
    
    
    (1,062
    )Income/(loss) from continuing operations
    
    
    (11,198
    )
    
    
    (2,512
    )
    
    
    (19,362
    )
    
    
    2,156Loss from discontinued operations, net of income tax
    
    
    
    
    
    
    (73
    )
    
    
    
    
    
    
    (325
    )Net income/(loss)
    
    $
    (11,198
    )
    
    $
    (2,585
    )
    
    $
    (19,362
    )
    
    $
    1,831Per share data:Earnings/(loss) per common share  basic:Continuing operations
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.16Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )Net income /(loss)
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.14Basic weighted average number of common shares
    
    
    15,034
    
    
    
    14,835
    
    
    
    15,015
    
    
    
    13,246Earnings/(loss) per common share  diluted:Continuing operations
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.16Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )Net income /(loss)
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.14Diluted weighted average number of common and
common equivalent shares
    
    
    15,034
    
    
    
    14,835
    
    
    
    15,015
    
    
    
    13,577
 The accompanying notes are an integral part of these condensed consolidated financial
statements.
 1




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Wolverine Tube, Inc. and Subsidiaries
 
 Condensed Consolidated Balance Sheets
 October 2,
    
    December 31,2005
    
    2004(In thousands except share and per share amounts)
    
    (Unaudited)AssetsCurrent assetsCash and cash equivalents
    
    $
    25,467
    
    
    $
    35,017Accounts
receivable, net of allowances for doubtful accounts of $0.6 million in 2005 and $0.4 million in 2004
    
    
    109,475
    
    
    
    93,964Inventories
    
    
    132,479
    
    
    
    151,979Prepaid expenses and other
    
    
    11,567
    
    
    
    6,905Deferred income taxes current
    
    
    15,677
    
    
    
    7,707Total current assets
    
    
    294,665
    
    
    
    295,572Property, plant and equipment, net
    
    
    187,096
    
    
    
    194,966Deferred charges, net
    
    
    12,798
    
    
    
    11,892Goodwill, net
    
    
    77,098
    
    
    
    77,312Deferred income taxes, non-current
    
    
    1,352
    
    
    
    1,008Notes receivable
    
    
    851
    
    
    
    Assets held for sale
    
    
    2,450
    
    
    
    1,147Investments
    
    
    5,880
    
    
    
    5,561Total assets
    
    $
    582,190
    
    
    $
    587,458Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    68,848
    
    
    $
    59,912Accrued liabilities
    
    
    29,664
    
    
    
    32,476Short-term borrowings
    
    
    170
    
    
    
    1,219Total current liabilities
    
    
    98,682
    
    
    
    93,607Long-term debt
    
    
    235,192
    
    
    
    237,022Pension liabilities
    
    
    31,399
    
    
    
    27,915Postretirement benefit obligation
    
    
    19,431
    
    
    
    18,422Accrued environmental remediation
    
    
    847
    
    
    
    990Total liabilities
    
    
    385,551
    
    
    
    377,956Stockholders equityCommon stock, par value $0.01 per share; 40,000,000 shares
authorized; 15,034,719 and 14,927,577 shares issued and
outstanding as of October 2, 2005 and December 31, 2004,
respectively
    
    
    150
    
    
    
    149Additional paid-in capital
    
    
    91,639
    
    
    
    90,571Retained earnings
    
    
    104,988
    
    
    
    124,350Unearned compensation
    
    
    (618
    )
    
    
    (309
    )Accumulated other comprehensive income/(loss)
    
    
    480
    
    
    
    (5,259
    )Total stockholders equity
    
    
    196,639
    
    
    
    209,502Total liabilities and stockholders equity
    
    $
    582,190
    
    
    $
    587,458
 The accompanying notes are an integral part of these condensed consolidated financial
statements.
 2




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Wolverine Tube, Inc. and Subsidiaries
 
 Condensed Consolidated Statements of Cash Flows
  Nine months endedOctober 2,
    
    October 3,2005
    
    2004(In thousands)Operating ActivitiesIncome/(loss) from continuing operations
    
    $
    (19,362
    )
    
    $
    2,156Adjustments to reconcile net income/(loss) to net
cash used for operating activities:Depreciation and amortization
    
    
    12,803
    
    
    
    13,155Deferred income taxes
    
    
    (10,526
    )
    
    
    (1,248
    )Loss on retirement of Senior Notes, net of tax
    
    
    
    
    
    
    1,986Other non-cash items
    
    
    4,119
    
    
    
    1,153Sales of accounts receivable
    
    
    18,500
    
    
    
    Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (34,274
    )
    
    
    (21,687
    )Inventories
    
    
    19,771
    
    
    
    (18,038
    )Refundable income taxes
    
    
    (1,673
    )
    
    
    (834
    )Prepaid expenses and other
    
    
    (1,776
    )
    
    
    (300
    )Accounts payable
    
    
    9,792
    
    
    
    19,623Accrued liabilities including pension,
postretirement benefit and
environmental
    
    
    2,071
    
    
    
    (3,257
    )Net cash used for operating activities
    
    
    (555
    )
    
    
    (7,291
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (7,639
    )
    
    
    (6,266
    )Disposals of property, plant and equipment
    
    
    861
    
    
    
    258Net cash used for investing activities
    
    
    (6,778
    )
    
    
    (6,008
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (1,032
    )
    
    
    Net payments on revolving credit facilities
    
    
    (2,093
    )
    
    
    (216
    )Issuance of common stock
    
    
    430
    
    
    
    23,965Retirement of senior notes
    
    
    
    
    
    
    (20,510
    )Other financing activities
    
    
    35
    
    
    
    (839
    )Net cash provided by/(used for) financing activities
    
    
    (2,660
    )
    
    
    2,400Effect of exchange rate on cash and cash equivalents
    
    
    443
    
    
    
    15Net cash used for continuing operations
    
    
    (9,550
    )
    
    
    (10,884
    )Net cash used for discontinued operations
    
    
    
    
    
    
    (378
    )Net decrease in cash and cash equivalents
    
    
    (9,550
    )
    
    
    (11,262
    )Cash and cash equivalents at beginning of period
    
    
    35,017
    
    
    
    46,089Cash and cash equivalents at end of period
    
    $
    25,467
    
    
    $
    34,827
 The accompanying notes are an integral part of these condensed consolidated financial
statements.
 3




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Wolverine Tube, Inc. and Subsidiaries
 
 Notes to Unaudited Condensed Consolidated Financial Statements
 (1) Basis of Reporting for Interim Financial Statements
       4




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(2) Inventories
  October 2, 2005
    
    December 31, 2004(In
thousands)Finished products
    
    $
    48,445
    
    
    $
    61,376Work-in-process
    
    
    35,302
    
    
    
    35,920Raw materials
    
    
    22,387
    
    
    
    27,653Supplies
    
    
    26,345
    
    
    
    27,030Totals
    
    $
    132,479
    
    
    $
    151,979
 (3) Earnings/(Loss) Per Share
 Earnings Per Share
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands, except per share data)Income /(loss) from continuing operations
    
    $
    (11,198
    )
    
    $
    (2,512
    )
    
    $
    (19,362
    )
    
    $
    2,156Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (73
    )
    
    
    
    
    
    
    (325
    )Net income/(loss)
    
    $
    (11,198
    )
    
    $
    (2,585
    )
    
    $
    (19,362
    )
    
    $
    1,831Weighted average shares and share equivalents
outstanding:Basic shares
    
    
    15,034
    
    
    
    14,835
    
    
    
    15,015
    
    
    
    13,246Dilutive stock options and restricted shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    331Diluted weighted average shares and share equivalents
    
    
    15,034
    
    
    
    14,835
    
    
    
    15,015
    
    
    
    13,577Earnings/(loss) per common share  basic:Continuing operations
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.16Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )Net income/(loss)
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.14Earnings/(loss) per common share  diluted:Continuing operations
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.16Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )Net income/(loss)
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.14
 5




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(4) Stock-Based Compensation Plans
 Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation
 Three months ended
    


    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands, except per share amounts)Net income/(loss), as reported
    
    $
    (11,198
    )
    
    $
    (2,585
    )
    
    $
    (19,362
    )
    
    $
    1,831Deduct: Total stock-based employee
compensation expense determined under fair
value based method for all awards, net of
related tax effects
    
    
    (162
    )
    
    
    (136
    )
    
    
    (461
    )
    
    
    (408
    )Pro forma net income/(loss)
    
    $
    (11,360
    )
    
    $
    (2,721
    )
    
    $
    (19,823
    )
    
    $
    1,423Earnings/(loss) per share:Basic  as reported
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.14Basic  pro forma
    
    $
    (0.76
    )
    
    $
    (0.18
    )
    
    $
    (1.32
    )
    
    $
    0.11Diluted  as reported
    
    $
    (0.74
    )
    
    $
    (0.17
    )
    
    $
    (1.29
    )
    
    $
    0.14Diluted  pro forma
    
    $
    (0.76
    )
    
    $
    (0.18
    )
    
    $
    (1.32
    )
    
    $
    0.11
 Share-Based Payment
  6




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(5) Goodwill
  7




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(6) Interest Expense
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands)Interest expense
    
    $
    5,329
    
    
    $
    5,218
    
    
    $
    16,147
    
    
    $
    17,020Interest income
    
    
    (176
    )
    
    
    (88
    )
    
    
    (355
    )
    
    
    (524
    )Effect of interest rate swap
    
    
    143
    
    
    
    (163
    )
    
    
    214
    
    
    
    (600
    )Capitalized interest
    
    
    (61
    )
    
    
    (45
    )
    
    
    (205
    )
    
    
    (144
    )Interest expense, net
    
    $
    5,235
    
    
    $
    4,922
    
    
    $
    15,801
    
    
    $
    15,752
 (7) Debt
  October 2, 2005
    
    December 31, 2004(In thousands)Senior Notes, 7.375%, due August 2008
    
    $
    135,284
    
    
    $
    136,097Discount on 7.375% Senior Notes, original issue
discount amortized over 10 years
    
    
    (82
    )
    
    
    (103
    )Senior Notes, 10.5%, due April 2009
    
    
    99,400
    
    
    
    99,400Discount on 10.5% Senior Notes, original issue
discount amortized over 7 years
    
    
    (600
    )
    
    
    (729
    )Secured revolving credit facility, due April 2008
    
    
    
    
    
    
    1,000Capitalized leases
    
    
    88
    
    
    
    106Netherlands facility, 5.1%, due on demand
    
    
    16
    
    
    
    976Other foreign facilities
    
    
    1,256
    
    
    
    1,494235,362
    
    
    
    238,241Less short-term borrowings
    
    
    (170
    )
    
    
    (1,219
    )Total
    
    $
    235,192
    
    
    $
    237,022
   8




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Liquidity Facilities
 (8) Receivables Sale Facility
  Structure
 9




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Available Amounts
  Costs
 10




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Representations, Warranties, Covenants and Indemnities
 Termination.
  Accounting for Transfers and Servicing of Financial Assets
 11




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
    
    an amendment to the consolidated EBITDA requirement for the second fiscal quarter of
2005 in order to bring the Company into compliance with this requirement for that
period, as well as a prospective adjustment to the consolidated EBITDA test, both
consistent with the revised consolidated EBITDA covenant contained in the August
amendment to the Amended and Restated Credit Agreement;
    
    the addition or enhancement of certain financial and operational reporting
obligations, including those obligations required under the August amendment to the
Amended and Restated Credit Agreement;
    
    an adjustment to the loss reserve and dilution reserve formulas that are used in the
availability calculation; and
    
    the elimination of the obligation to comply with the $5 million excess availability
requirement under the Amended and Restated Credit Agreement.
  (9) Contingencies
  12




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(10) Comprehensive Income/(Loss)
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands)Net income/(loss)
    
    $
    (11,198
    )
    
    $
    (2,585
    )
    
    $
    (19,362
    )
    
    $
    1,831Translation adjustment for financial statements
denominated in a foreign currency
    
    
    4,995
    
    
    
    4,273
    
    
    
    1,059
    
    
    
    1,562Unrealized gain/(loss) on cash flow hedges, net of tax
    
    
    3,213
    
    
    
    (2,513
    )
    
    
    4,705
    
    
    
    (2,248
    )Minimum pension liability adjustment, net of tax
    
    
    (37
    )
    
    
    (71
    )
    
    
    (25
    )
    
    
    (34
    )Comprehensive income/(loss)
    
    $
    (3,027
    )
    
    $
    (896
    )
    
    $
    (13,623
    )
    
    $
    1,111
 (11) Restructuring Charges
   Three months ended
    
    Nine months ended(In thousands)
    
    October 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004Roxboro, NC closing
    
    $
    
    
    
    $
    800
    
    
    $
    (75
    )
    
    $
    900Booneville, MS closing
    
    
    
    
    
    
    66
    
    
    
    
    
    
    
    800Montreal restructuring
    
    
    4
    
    
    
    
    
    
    
    146
    
    
    
    Employee severance
    
    
    1,231
    
    
    
    
    
    
    
    1,218
    
    
    
    Sale of Company
aircraft
    
    
    614
    
    
    
    
    
    
    
    614
    
    
    
    Other
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    27Totals
    
    $
    1,849
    
    
    $
    862
    
    
    $
    1,903
    
    
    $
    1,727
 (12) Industry Segments
  13




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Rod, BarCommercial
    
    Wholesale
    
    & Other
    
    Consolidated(In thousands)Three months ended October
2, 2005Pounds shipped
    
    
    54,452
    
    
    
    22,846
    
    
    
    5,498
    
    
    
    82,796Net sales
    
    $
    158,424
    
    
    $
    51,017
    
    
    $
    16,263
    
    
    $
    225,704Gross profit/(loss)
    
    $
    (1,428
    )
    
    $
    (1,425
    )
    
    $
    942
    
    
    $
    (1,911
    )Three months ended October 3, 2004Pounds shipped
    
    
    58,404
    
    
    
    20,510
    
    
    
    5,563
    
    
    
    84,477Net sales
    
    $
    147,020
    
    
    $
    38,231
    
    
    $
    14,787
    
    
    $
    200,038Gross profit
    
    $
    11,292
    
    
    $
    198
    
    
    $
    835
    
    
    $
    12,325Nine months ended October 2, 2005Pounds shipped
    
    
    162,174
    
    
    
    65,628
    
    
    
    12,735
    
    
    
    240,537Net sales
    
    $
    458,375
    
    
    $
    135,044
    
    
    $
    42,088
    
    
    $
    635,507Gross profit/(loss)
    
    $
    13,663
    
    
    $
    (1,727
    )
    
    $
    1,867
    
    
    $
    13,803Nine months ended October 3, 2004Pounds shipped
    
    
    181,776
    
    
    
    69,327
    
    
    
    18,078
    
    
    
    269,181Net sales
    
    $
    446,971
    
    
    $
    126,914
    
    
    $
    46,038
    
    
    $
    619,923Gross profit
    
    $
    42,290
    
    
    $
    5,446
    
    
    $
    3,655
    
    
    $
    51,391
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands)Commercial Products:Tube Products
    
    $
    105,152
    
    
    $
    96,290
    
    
    $
    295,761
    
    
    
    282,770Fabricated Products
    
    
    35,180
    
    
    
    33,024
    
    
    
    107,764
    
    
    
    104,897Other Products
    
    
    18,092
    
    
    
    17,706
    
    
    
    54,850
    
    
    
    59,304Sub-total
    
    
    158,424
    
    
    
    147,020
    
    
    
    458,375
    
    
    
    446,971Wholesale Products
    
    
    51,017
    
    
    
    38,231
    
    
    
    135,044
    
    
    
    126,914Rod, bar and other
    
    
    16,263
    
    
    
    14,787
    
    
    
    42,088
    
    
    
    46,038Total
    
    $
    225,704
    
    
    $
    200,038
    
    
    $
    635,507
    
    
    
    619,923
 14




---



##### Table of Contents



(13) Pension Expense
 U.S. Qualified Retirement Plan
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands)Service cost
    
    $
    1,195
    
    
    $
    1,125
    
    
    $
    3,657
    
    
    $
    3,303Interest cost
    
    
    2,438
    
    
    
    2,420
    
    
    
    7,454
    
    
    
    7,104Expected return on plan assets
    
    
    (2,833
    )
    
    
    (2,891
    )
    
    
    (8,663
    )
    
    
    (8,485
    )Amortization of prior service cost
    
    
    30
    
    
    
    31
    
    
    
    90
    
    
    
    91Amortization of net actuarial loss
    
    
    434
    
    
    
    319
    
    
    
    1,327
    
    
    
    937PBGC premium (underfunded plan)
    
    
    
    
    
    
    83
    
    
    
    
    
    
    
    197Net periodic pension cost
    
    $
    1,264
    
    
    $
    1,087
    
    
    $
    3,865
    
    
    $
    3,147
 U.S. Nonqualified Retirement Plan
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands)Service cost
    
    $
    64
    
    
    $
    46
    
    
    $
    192
    
    
    $
    142Interest cost
    
    
    122
    
    
    
    114
    
    
    
    365
    
    
    
    344Amortization of prior service cost
    
    
    92
    
    
    
    95
    
    
    
    276
    
    
    
    279Amortization of loss
    
    
    19
    
    
    
    
    
    
    
    58
    
    
    
    FAS 88 settlement
    
    
    94
    
    
    
    
    
    
    
    281
    
    
    
    Net periodic pension cost
    
    $
    391
    
    
    $
    255
    
    
    $
    1,172
    
    
    $
    765
 15




---



##### Table of Contents



Canadian Plans
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands)Service cost
    
    $
    209
    
    
    $
    137
    
    
    $
    562
    
    
    $
    434Interest cost
    
    
    510
    
    
    
    327
    
    
    
    1,369
    
    
    
    1,035Expected return on plan assets
    
    
    (526
    )
    
    
    (299
    )
    
    
    (1,413
    )
    
    
    (943
    )Amortization of prior service cost
    
    
    33
    
    
    
    20
    
    
    
    89
    
    
    
    69Amortization of net actuarial loss
    
    
    28
    
    
    
    47
    
    
    
    76
    
    
    
    134Net periodic pension cost
    
    $
    254
    
    
    $
    232
    
    
    $
    683
    
    
    $
    729
 Postretirement Benefit Obligation
  Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,2005
    
    2004
    
    2005
    
    2004(In thousands)Service cost
    
    $
    184
    
    
    $
    184
    
    
    $
    553
    
    
    $
    551Interest cost
    
    
    283
    
    
    
    255
    
    
    
    848
    
    
    
    762Amortization of prior service cost
    
    
    38
    
    
    
    38
    
    
    
    115
    
    
    
    114Amortization of deferred gain
    
    
    11
    
    
    
    5
    
    
    
    33
    
    
    
    15Net periodic pension cost
    
    $
    516
    
    
    $
    482
    
    
    $
    1,549
    
    
    $
    1,442
 (14) Assets Held for Sale
  (15) Income Taxes
  16




---



##### Table of Contents



(16) Litigation
  (17) Condensed Consolidating Financial Information
   17




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Three Months Ended October 2, 2005
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)Net sales
    
    $
    131,394
    
    
    $
    40,964
    
    
    $
    73,358
    
    
    $
    (20,012
    )
    
    $
    225,704Cost of goods sold
    
    
    138,569
    
    
    
    37,401
    
    
    
    71,657
    
    
    
    (20,012
    )
    
    
    227,615Gross profit/(loss)
    
    
    (7,175
    )
    
    
    3,563
    
    
    
    1,701
    
    
    
    
    
    
    
    (1,911
    )Selling, general and administrative expenses
    
    
    6,790
    
    
    
    787
    
    
    
    1,218
    
    
    
    
    
    
    
    8,795Restructuring charges
    
    
    1,769
    
    
    
    73
    
    
    
    7
    
    
    
    
    
    
    
    1,849Operating income/(loss)
    
    
    (15,734
    )
    
    
    2,703
    
    
    
    476
    
    
    
    
    
    
    
    (12,555
    )Other expense/(income):Interest expense, net
    
    
    5,184
    
    
    
    (10
    )
    
    
    61
    
    
    
    
    
    
    
    5,235Amortization and other, net
    
    
    1,487
    
    
    
    (1,664
    )
    
    
    500
    
    
    
    
    
    
    
    323Equity in earnings of subsidiaries
    
    
    2,996
    
    
    
    
    
    
    
    
    
    
    
    (2,996
    )
    
    
    Income/(loss) before income taxes
    
    
    (19,409
    )
    
    
    4,377
    
    
    
    (85
    )
    
    
    (2,996
    )
    
    
    (18,113
    )Income tax provision/(benefit)
    
    
    (8,211
    )
    
    
    1,459
    
    
    
    (163
    )
    
    
    
    
    
    
    (6,915
    )Net income/(loss)
    
    $
    (11,198
    )
    
    $
    2,918
    
    
    $
    78
    
    
    $
    (2,996
    )
    
    $
    (11,198
    )
 Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Three Months Ended Oct 3, 2004
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)Net sales
    
    $
    113,498
    
    
    $
    39,159
    
    
    $
    63,581
    
    
    $
    (16,200
    )
    
    $
    200,038Cost of goods sold
    
    
    109,711
    
    
    
    34,563
    
    
    
    59,639
    
    
    
    (16,200
    )
    
    
    187,713Gross profit
    
    
    3,787
    
    
    
    4,596
    
    
    
    3,942
    
    
    
    
    
    
    
    12,325Selling, general and administrative expenses
    
    
    7,153
    
    
    
    883
    
    
    
    1,159
    
    
    
    
    
    
    
    9,195Restructuring charges
    
    
    889
    
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    862Operating income/(loss) from continuing operations
    
    
    (4,255
    )
    
    
    3,740
    
    
    
    2,783
    
    
    
    
    
    
    
    2,268Other expense/(income):Interest expense, net
    
    
    5,103
    
    
    
    (11
    )
    
    
    (170
    )
    
    
    
    
    
    
    4,922Amortization and other, net
    
    
    5,310
    
    
    
    (3,431
    )
    
    
    471
    
    
    
    
    
    
    
    2,350Equity in earnings of subsidiaries
    
    
    6,432
    
    
    
    
    
    
    
    
    
    
    
    (6,432
    )
    
    
    Income/(loss) from continuing operations before
income taxes
    
    
    (8,236
    )
    
    
    7,182
    
    
    
    2,482
    
    
    
    (6,432
    )
    
    
    (5,004
    )Income tax provision/(benefit)
    
    
    (5,724
    )
    
    
    2,573
    
    
    
    659
    
    
    
    
    
    
    
    (2,492
    )Income/(loss) from continuing operations
    
    
    (2,512
    )
    
    
    4,609
    
    
    
    1,823
    
    
    
    (6,432
    )
    
    
    (2,512
    )Loss from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    73Net income/(loss)
    
    $
    (2,512
    )
    
    $
    4,609
    
    
    $
    1,750
    
    
    $
    (6,432
    )
    
    $
    (2,585
    )
 18




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Nine Months Ended October 2, 2005
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)Net sales
    
    $
    366,613
    
    
    $
    126,371
    
    
    $
    199,337
    
    
    $
    (56,814
    )
    
    $
    635,507Cost of goods sold
    
    
    370,626
    
    
    
    114,429
    
    
    
    193,463
    
    
    
    (56,814
    )
    
    
    621,704Gross profit/(loss)
    
    
    (4,013
    )
    
    
    11,942
    
    
    
    5,874
    
    
    
    
    
    
    
    13,803Selling, general and administrative expenses
    
    
    19,605
    
    
    
    2,443
    
    
    
    3,699
    
    
    
    
    
    
    
    25,747Restructuring charges
    
    
    1,681
    
    
    
    73
    
    
    
    149
    
    
    
    
    
    
    
    1,903Operating income/(loss)
    
    
    (25,299
    )
    
    
    9,426
    
    
    
    2,026
    
    
    
    
    
    
    
    (13,847
    )Other expense/(income):Interest expense, net
    
    
    15,968
    
    
    
    (29
    )
    
    
    (138
    )
    
    
    
    
    
    
    15,801Amortization and other, net
    
    
    3,616
    
    
    
    (4,339
    )
    
    
    1,488
    
    
    
    
    
    
    
    765Equity in earnings of subsidiaries
    
    
    10,196
    
    
    
    
    
    
    
    
    
    
    
    (10,196
    )
    
    
    Income/(loss) before income taxes
    
    
    (34,687
    )
    
    
    13,794
    
    
    
    676
    
    
    
    (10,196
    )
    
    
    (30,413
    )Income tax provision/(benefit)
    
    
    (15,325
    )
    
    
    4,661
    
    
    
    (387
    )
    
    
    
    
    
    
    (11,051
    )Net income/(loss)
    
    $
    (19,362
    )
    
    $
    9,133
    
    
    $
    1,063
    
    
    $
    (10,196
    )
    
    $
    (19,362
    )
 Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Nine Months Ended October 3, 2004
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)Net sales
    
    $
    336,513
    
    
    $
    126,614
    
    
    $
    206,726
    
    
    $
    (49,930
    )
    
    $
    619,923Cost of goods sold
    
    
    316,647
    
    
    
    110,015
    
    
    
    191,800
    
    
    
    (49,930
    )
    
    
    568,532Gross profit
    
    
    19,866
    
    
    
    16,599
    
    
    
    14,926
    
    
    
    
    
    
    
    51,391Selling, general and administrative expenses
    
    
    22,844
    
    
    
    2,550
    
    
    
    3,300
    
    
    
    
    
    
    
    28,694Restructuring charges
    
    
    1,754
    
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    1,727Operating income/(loss) from continuing operations
    
    
    (4,732
    )
    
    
    14,076
    
    
    
    11,626
    
    
    
    
    
    
    
    20,970Other expense/(income):Interest expense, net
    
    
    16,450
    
    
    
    (30
    )
    
    
    (668
    )
    
    
    
    
    
    
    15,752Amortization and other, net
    
    
    8,140
    
    
    
    (10,094
    )
    
    
    6,078
    
    
    
    
    
    
    
    4,124Equity in earnings of subsidiaries
    
    
    20,731
    
    
    
    
    
    
    
    
    
    
    
    (20,731
    )
    
    
    Income/(loss) from continuing operations before
income taxes
    
    
    (8,591
    )
    
    
    24,200
    
    
    
    6,216
    
    
    
    (20,731
    )
    
    
    1,094Income tax provision/(benefit)
    
    
    (10,747
    )
    
    
    8,714
    
    
    
    971
    
    
    
    
    
    
    
    (1,062
    )Income/(loss) from continuing operations
    
    
    2,156
    
    
    
    15,846
    
    
    
    5,245
    
    
    
    (20,371
    )
    
    
    2,156Loss from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    325
    
    
    
    
    
    
    
    325Net income/(loss)
    
    $
    2,156
    
    
    $
    15,486
    
    
    $
    4,920
    
    
    $
    (20,731
    )
    
    $
    1,831
 19




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Balance Sheets
October 2, 2005
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    10,585
    
    
    $
    
    
    
    $
    14,882
    
    
    $
    
    
    
    $
    25,467Accounts receivable, net
    
    
    6,929
    
    
    
    7,478
    
    
    
    95,068
    
    
    
    
    
    
    
    109,475Inventories
    
    
    59,031
    
    
    
    39,488
    
    
    
    33,960
    
    
    
    
    
    
    
    132,479Prepaid expenses and other
    
    
    8,178
    
    
    
    1,705
    
    
    
    1,684
    
    
    
    
    
    
    
    11,567Deferred taxes, current
    
    
    16,090
    
    
    
    211
    
    
    
    (624
    )
    
    
    
    
    
    
    15,677Total current assets
    
    
    100,813
    
    
    
    48,882
    
    
    
    144,970
    
    
    
    
    
    
    
    294,665Property, plant and equipment, net
    
    
    113,362
    
    
    
    27,410
    
    
    
    46,324
    
    
    
    
    
    
    
    187,096Deferred charges, net
    
    
    9,470
    
    
    
    140
    
    
    
    3,188
    
    
    
    
    
    
    
    12,798Deferred taxes, non-current
    
    
    (982
    )
    
    
    (7,385
    )
    
    
    9,719
    
    
    
    
    
    
    
    1,352Goodwill, net
    
    
    
    
    
    
    75,505
    
    
    
    1,593
    
    
    
    
    
    
    
    77,098Assets held for sale
    
    
    2,450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,450Notes receivable
    
    
    
    
    
    
    
    
    
    
    851
    
    
    
    
    
    
    
    851Prepaid pension and other
    
    
    4,373
    
    
    
    
    
    
    
    1,507
    
    
    
    
    
    
    
    5,880Investments in subsidiaries
    
    
    485,850
    
    
    
    325
    
    
    
    
    
    
    
    (486,175
    )
    
    
    Total assets
    
    $
    715,336
    
    
    $
    144,877
    
    
    $
    208,152
    
    
    $
    (486,175
    )
    
    $
    582,190Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    35,670
    
    
    $
    17,874
    
    
    $
    15,304
    
    
    $
    
    
    
    $
    68,848Accrued liabilities
    
    
    7,094
    
    
    
    17,533
    
    
    
    5,037
    
    
    
    
    
    
    
    29,664Short-term borrowings
    
    
    
    
    
    
    25
    
    
    
    145
    
    
    
    
    
    
    
    170Intercompany balances
    
    
    200,926
    
    
    
    (208,703
    )
    
    
    7,777
    
    
    
    
    
    
    
    Total current liabilities
    
    
    243,690
    
    
    
    (173,271
    )
    
    
    28,263
    
    
    
    
    
    
    
    98,682Long-term debt
    
    
    234,002
    
    
    
    64
    
    
    
    1,126
    
    
    
    
    
    
    
    235,192Pension liabilities
    
    
    29,209
    
    
    
    
    
    
    
    2,190
    
    
    
    
    
    
    
    31,399Postretirement benefit obligation
    
    
    10,949
    
    
    
    
    
    
    
    8,482
    
    
    
    
    
    
    
    19,431Accrued environmental remediation
    
    
    847
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    847Total liabilities
    
    
    518,697
    
    
    
    (173,207
    )
    
    
    40,061
    
    
    
    
    
    
    
    385,551Stockholders equity
    
    
    196,639
    
    
    
    318,084
    
    
    
    168,091
    
    
    
    (486,175
    )
    
    
    196,639Total liabilities and stockholders equity
    
    $
    715,336
    
    
    $
    144,877
    
    
    $
    208,152
    
    
    $
    (486,175
    )
    
    $
    582,190
 20




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Balance Sheets
December 31, 2004
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    11,191
    
    
    $
    
    
    
    $
    23,826
    
    
    $
    
    
    
    $
    35,017Accounts receivable, net
    
    
    6,822
    
    
    
    59,750
    
    
    
    27,392
    
    
    
    
    
    
    
    93,964Inventories
    
    
    73,423
    
    
    
    39,681
    
    
    
    38,875
    
    
    
    
    
    
    
    151,979Prepaid expenses and other
    
    
    3,677
    
    
    
    1,400
    
    
    
    1,828
    
    
    
    
    
    
    
    6,905Deferred taxes, current
    
    
    8,175
    
    
    
    211
    
    
    
    (679
    )
    
    
    
    
    
    
    7,707Total current assets
    
    
    103,288
    
    
    
    101,042
    
    
    
    91,242
    
    
    
    
    
    
    
    295,572Property, plant and equipment, net
    
    
    120,889
    
    
    
    28,672
    
    
    
    45,405
    
    
    
    
    
    
    
    194,966Deferred charges, net
    
    
    9,930
    
    
    
    300
    
    
    
    1,662
    
    
    
    
    
    
    
    11,892Deferred taxes, non-current
    
    
    (982
    )
    
    
    (7,385
    )
    
    
    9,375
    
    
    
    
    
    
    
    1,008Goodwill, net
    
    
    
    
    
    
    75,390
    
    
    
    1,922
    
    
    
    
    
    
    
    77,312Assets held for sale
    
    
    
    
    
    
    
    
    
    
    1,147
    
    
    
    
    
    
    
    1,147Prepaid pension and other
    
    
    4,316
    
    
    
    
    
    
    
    1,245
    
    
    
    
    
    
    
    5,561Investments in subsidiaries
    
    
    445,423
    
    
    
    325
    
    
    
    (2,288
    )
    
    
    (443,460
    )
    
    
    Total assets
    
    $
    682,864
    
    
    $
    198,344
    
    
    $
    149,710
    
    
    $
    (443,460
    )
    
    $
    587,458Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    23,725
    
    
    $
    16,919
    
    
    $
    19,268
    
    
    $
    
    
    
    $
    59,912Accrued liabilities
    
    
    13,204
    
    
    
    13,882
    
    
    
    5,390
    
    
    
    
    
    
    
    32,476Short-term borrowings
    
    
    
    
    
    
    24
    
    
    
    1,195
    
    
    
    
    
    
    
    1,219Intercompany balances
    
    
    163,267
    
    
    
    (141,515
    )
    
    
    (21,752
    )
    
    
    
    
    
    
    Total current liabilities
    
    
    200,196
    
    
    
    (110,690
    )
    
    
    4,101
    
    
    
    
    
    
    
    93,607Long-term debt
    
    
    235,665
    
    
    
    82
    
    
    
    1,275
    
    
    
    
    
    
    
    237,022Pension liabilities
    
    
    25,705
    
    
    
    
    
    
    
    2,210
    
    
    
    
    
    
    
    27,915Postretirement benefit obligation
    
    
    10,806
    
    
    
    
    
    
    
    7,616
    
    
    
    
    
    
    
    18,422Accrued environmental remediation
    
    
    990
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    990Total liabilities
    
    
    473,362
    
    
    
    (110,608
    )
    
    
    15,202
    
    
    
    
    
    
    
    377,956Stockholders equity
    
    
    209,502
    
    
    
    308,952
    
    
    
    134,508
    
    
    
    (443,460
    )
    
    
    209,502Total liabilities and stockholders equity
    
    $
    682,864
    
    
    $
    198,344
    
    
    $
    149,710
    
    
    $
    (443,460
    )
    
    $
    587,458
 21




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Cash Flows
For the Nine Months Ended October 2, 2005
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)Operating ActivitiesIncome /(loss) from continuing operations
    
    $
    (19,362
    )
    
    $
    9,133
    
    
    $
    1,063
    
    
    $
    (10,196
    )
    
    $
    (19,362
    )Depreciation and amortization
    
    
    7,902
    
    
    
    2,287
    
    
    
    2,614
    
    
    
    
    
    
    
    12,803Deferred income taxes
    
    
    (10,339
    )
    
    
    
    
    
    
    (187
    )
    
    
    
    
    
    
    (10,526
    )Other non-cash items
    
    
    3,796
    
    
    
    118
    
    
    
    205
    
    
    
    
    
    
    
    4,119Equity in earnings of subsidiaries
    
    
    (10,196
    )
    
    
    
    
    
    
    
    
    
    
    10,196
    
    
    
    Changes in receivables sale facility
    
    
    18,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,500Changes in operating assets and liabilities
    
    
    3,926
    
    
    
    16,489
    
    
    
    (26,504
    )
    
    
    
    
    
    
    (6,089
    )Net cash provided by/(used for) operating activities
    
    
    (5,773
    )
    
    
    28,027
    
    
    
    (22,809
    )
    
    
    
    
    
    
    (555
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (3,162
    )
    
    
    (1,256
    )
    
    
    (3,221
    )
    
    
    
    
    
    
    (7,639
    )Other
    
    
    634
    
    
    
    230
    
    
    
    (3
    )
    
    
    
    
    
    
    861Net cash used for investing activities
    
    
    (2,528
    )
    
    
    (1,026
    )
    
    
    (3,224
    )
    
    
    
    
    
    
    (6,778
    )Financing ActivitiesIssuance of common stock
    
    
    430
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    430Financing fees and expenses paid
    
    
    (362
    )
    
    
    
    
    
    
    (670
    )
    
    
    
    
    
    
    (1,032
    )Net payments on revolving credit facilities
    
    
    (1,000
    )
    
    
    (18
    )
    
    
    (1,075
    )
    
    
    
    
    
    
    (2,093
    )Intercompany borrowings (payments)
    
    
    (2,307
    )
    
    
    (26,983
    )
    
    
    29,290
    
    
    
    
    
    
    
    Other financing activities
    
    
    10,225
    
    
    
    
    
    
    
    (10,190
    )
    
    
    
    
    
    
    35Net cash provided by/(used for) financing activities
    
    
    6,986
    
    
    
    (27,001
    )
    
    
    17,355
    
    
    
    
    
    
    
    (2,660
    )Effect of exchange rate on cash and cash equivalents
    
    
    709
    
    
    
    
    
    
    
    (266
    )
    
    
    
    
    
    
    443Net decrease in cash and cash equivalents
    
    
    (606
    )
    
    
    
    
    
    
    (8,944
    )
    
    
    
    
    
    
    (9,550
    )Cash and cash equivalents at beginning of period
    
    
    11,191
    
    
    
    
    
    
    
    23,826
    
    
    
    
    
    
    
    35,017Cash and cash equivalents at end of period
    
    $
    10,585
    
    
    $
    
    
    
    $
    14,882
    
    
    $
    
    
    
    $
    25,467
 22




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Cash Flows
For the Nine Months Ended October 3, 2004
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)Operating ActivitiesIncome /(loss) from continuing operations
    
    $
    2,156
    
    
    $
    15,486
    
    
    $
    5,245
    
    
    $
    (20,731
    )
    
    $
    2,156Depreciation and amortization
    
    
    8,171
    
    
    
    2,637
    
    
    
    2,347
    
    
    
    
    
    
    
    13,155Other non-cash items
    
    
    (158
    )
    
    
    40
    
    
    
    23
    
    
    
    
    
    
    
    (95
    )Loss on early retirement of debt
    
    
    1,986
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,986Equity in earnings of subsidiaries
    
    
    (20,731
    )
    
    
    
    
    
    
    
    
    
    
    20,731
    
    
    
    Changes in operating assets and liabilities
    
    
    (6,541
    )
    
    
    (9,693
    )
    
    
    (8,259
    )
    
    
    
    
    
    
    (24,493
    )Net cash used for operating activities
    
    
    (15,117
    )
    
    
    8,470
    
    
    
    (644
    )
    
    
    
    
    
    
    (7,291
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (4,133
    )
    
    
    (1,212
    )
    
    
    (921
    )
    
    
    
    
    
    
    (6,266
    )Other
    
    
    (2
    )
    
    
    273
    
    
    
    (13
    )
    
    
    
    
    
    
    258Net cash used for investing activities
    
    
    (4,135
    )
    
    
    (939
    )
    
    
    (934
    )
    
    
    
    
    
    
    (6,008
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (216
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (216
    )Net borrowings/(payments) on revolving credit
facilities
    
    
    1,068
    
    
    
    (1,067
    )
    
    
    (699
    )
    
    
    
    
    
    
    (698
    )Intercompany borrowings/(payments)
    
    
    12,515
    
    
    
    (6,458
    )
    
    
    (6,057
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    23,965
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,965Retirement of senior notes
    
    
    (20,510
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,510
    )Other financing activities
    
    
    99
    
    
    
    
    
    
    
    (240
    )
    
    
    
    
    
    
    (141
    )Net cash provided by/(used for) financing activities
    
    
    16,921
    
    
    
    (7,525
    )
    
    
    (6,996
    )
    
    
    
    
    
    
    2,400Effect of exchange rate on cash and cash equivalents
    
    
    435
    
    
    
    
    
    
    
    (420
    )
    
    
    
    
    
    
    15Net cash provided by/(used for) continuing operations
    
    
    (1,896
    )
    
    
    6
    
    
    
    (8,994
    )
    
    
    
    
    
    
    (10,884
    )Net cash used for discontinued operations
    
    
    
    
    
    
    
    
    
    
    (378
    )
    
    
    
    
    
    
    (378
    )Net increase/(decrease) in cash and cash equivalents
    
    
    (1,896
    )
    
    
    6
    
    
    
    (9,372
    )
    
    
    
    
    
    
    (11,262
    )Cash and cash equivalents at beginning of period
    
    
    8,536
    
    
    
    (6
    )
    
    
    37,559
    
    
    
    
    
    
    
    46,089Cash and cash equivalents at end of period
    
    $
    6,640
    
    
    $
    
    
    
    $
    28,187
    
    
    $
    
    
    
    $
    34,827
 23




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Company Overview
  Results of Operations
  Executive Summary
   24




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##### Table of Contents



For the Three Months Ended October 2, 2005 Compared to the Three Months Ended October 3, 2004
  Pounds ShippedFor the Three Months Ended%In thousands, except for
    
    
    
    
    
    
    
    
    
    Increase/
    
    Increase/percentages
    
    October 2, 2005
    
    October 3, 2004
    
    (Decrease)
    
    (Decrease)Commercial products
    
    
    54,452
    
    
    
    58,404
    
    
    
    (3,952
    )
    
    
    (6.8
    )%Wholesale products
    
    
    22,846
    
    
    
    20,510
    
    
    
    2,336
    
    
    
    11.4Rod, bar and other products
    
    
    5,498
    
    
    
    5,563
    
    
    
    (65
    )
    
    
    (1.2
    )Total
    
    
    82,796
    
    
    
    84,477
    
    
    
    (1,681
    )
    
    
    (2.0
    )%
   Net SalesFor the Three Months EndedIn thousands, except for
    
    
    
    
    
    
    
    
    
    $
    
    %percentages
    
    October 2, 2005
    
    October 3, 2004
    
    Increase
    
    IncreaseCommercial products
    
    $
    158,424
    
    
    $
    147,020
    
    
    $
    11,404
    
    
    
    7.8
    %Wholesale products
    
    
    51,017
    
    
    
    38,231
    
    
    
    12,786
    
    
    
    33.4Rod, bar and other products
    
    
    16,263
    
    
    
    14,787
    
    
    
    1,476
    
    
    
    10.0Total
    
    $
    225,704
    
    
    $
    200,038
    
    
    $
    25,666
    
    
    
    12.8
    %
  25




---



##### Table of Contents



Gross Profit/(Loss)For the Three Months Ended%In thousands, except for
    
    
    
    
    
    
    
    
    
    $ Increase/
    
    Increase/percentages
    
    October 2, 2005
    
    October 3, 2004
    
    (Decrease)
    
    (Decrease)Commercial products
    
    $
    (1,428
    )
    
    $
    11,292
    
    
    $
    (12,720
    )
    
    *NM%Wholesale products
    
    
    (1,425
    )
    
    
    198
    
    
    
    (1,623
    )
    
    *NMRod, bar and other products
    
    
    942
    
    
    
    835
    
    
    
    107
    
    
    
    12.8Total
    
    $
    (1,911
    )
    
    $
    12,325
    
    
    $
    (14,236
    )
    
    *NM%
 *
    
    NM  not meaningful    26




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##### Table of Contents



For the Nine Months Ended October 2, 2005 Compared to the Nine Months Ended October 3, 2004
  Pounds ShippedFor the Nine Months EndedIn thousands, except for
    
    October 2,
    
    October 3,
    
    
    
    
    
    %percentages
    
    2005
    
    2004
    
    Decrease
    
    DecreaseCommercial products
    
    
    162,174
    
    
    
    181,776
    
    
    
    (19,602
    )
    
    
    (10.8
    )%Wholesale products
    
    
    65,628
    
    
    
    69,327
    
    
    
    (3,699
    )
    
    
    (5.3
    )Rod, bar and other products
    
    
    12,735
    
    
    
    18,078
    
    
    
    (5,343
    )
    
    
    (29.6
    )Total
    
    
    240,537
    
    
    
    269,181
    
    
    
    (28,644
    )
    
    
    (10.6
    )%
  27




---



##### Table of Contents



Net SalesFor the Nine Months Ended$
    
    %In thousands, except for
    
    October 2,
    
    October 3,
    
    Increase/
    
    Increase/percentages
    
    2005
    
    2004
    
    (Decrease)
    
    (Decrease)Commercial products
    
    $
    458,375
    
    
    $
    446,971
    
    
    $
    11,404
    
    
    
    2.6
    %Wholesale products
    
    
    135,044
    
    
    
    126,914
    
    
    
    8,130
    
    
    
    6.4Rod, bar and other products
    
    
    42,088
    
    
    
    46,038
    
    
    
    (3,950
    )
    
    
    (8.6
    )Total
    
    $
    635,507
    
    
    $
    619,923
    
    
    $
    15,584
    
    
    
    2.5
    %
    Gross Profit/(Loss)For the Nine Months EndedIn thousands, except for
    
    October 2,
    
    October 3,percentages
    
    2005
    
    2004
    
    $ Decrease
    
    % DecreaseCommercial products
    
    $
    13,662
    
    
    $
    42,290
    
    
    $
    (28,628
    )
    
    
    (67.7
    )%Wholesale products
    
    
    (1,727
    )
    
    
    5,446
    
    
    
    (7,173
    )
    
    *NMRod, bar and other products
    
    
    1,867
    
    
    
    3,655
    
    
    
    (1,788
    )
    
    
    (48.9
    )Total
    
    $
    13,802
    
    
    $
    51,391
    
    
    $
    (37,589
    )
    
    
    (73.1
    )%
 *
    
    NM  not meaningful  28




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##### Table of Contents



Restructuring Charges
  29




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##### Table of Contents



Three months ended
    
    Nine months endedOctober 2,
    
    October 3,
    
    October 2,
    
    October 3,(In thousands)
    
    2005
    
    2004
    
    2005
    
    2004Roxboro, NC closing
    
    $
    
    
    
    $
    800
    
    
    $
    (75
    )
    
    $
    900Booneville, MS closing
    
    
    
    
    
    
    66
    
    
    
    
    
    
    
    800Montreal restructuring
    
    
    4
    
    
    
    
    
    
    
    146
    
    
    
    Employee severance
    
    
    1,231
    
    
    
    
    
    
    
    1,218
    
    
    
    Sale of Company
aircraft
    
    
    614
    
    
    
    
    
    
    
    614
    
    
    
    Other
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    27Totals
    
    $
    1,849
    
    
    $
    862
    
    
    $
    1,903
    
    
    $
    1,727
 Liquidity and Capital Resources
  October 2,
    
    December 31,2005
    
    2004(Unaudited)(In thousands)Cash and cash equivalents
    
    $
    25,467
    
    
    $
    35,017Working capital
    
    
    195,983
    
    
    
    201,965Total debt
    
    
    235,362
    
    
    
    238,241Current ratio
    
    
    2.99
    
    
    
    3.16
 Sources of Liquidity
  Cash and cash equivalents.
 30




---



##### Table of Contents



Uses of Liquidity
  Cash used for operations.
 Working capital needs.
 Capital expenditures.
 31




---



##### Table of Contents



Payments related to our outstanding debt.
 Outlook
   Liquidity Facilities
   32




---



##### Table of Contents



Secured Revolving Credit Facility
 Availability.
 Borrowing Base
 Interest and Fees
 33




---



##### Table of Contents



Maturity
 Security
 Covenants
   34




---



##### Table of Contents



Events of Default and Acceleration.
  Silver Consignment and Forward Contracts Facility
  Fees.
 35




---



##### Table of Contents



Security
 Representations, Warranties and Covenants
 Termination and Events of Default
 36




---



##### Table of Contents



Receivables Sale Facility
  Structure
  Available Amounts
 37




---



##### Table of Contents



Costs
 Representations, Warranties, Covenants and Indemnities
 Termination.
  38




---



##### Table of Contents



Accounting for Transfers and Servicing of Financial Assets
  
    
    an amendment to the consolidated EBITDA requirement for the second fiscal quarter of
2005 in order to bring the Company into compliance with this requirement for that
period, as well as a prospective adjustment to the consolidated EBITDA test, both
consistent with the revised consolidated EBITDA covenant contained in the August
amendment to the Amended and Restated Credit Agreement;
    
    the addition or enhancement of certain financial and operational reporting
obligations, including those obligations required under the August amendment to the
Amended and Restated Credit Agreement;
    
    an adjustment to the loss reserve and dilution reserve formulas that are used in the
availability calculation; and
    
    the elimination of the obligation to comply with the $5 million excess availability
requirement under the Amended and Restated Credit Agreement.
  Environmental Matters
  39




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##### Table of Contents



Decatur, Alabama
     Ardmore, Tennessee
  40




---



##### Table of Contents



Altoona, Pennsylvania
  Risk Factors That May Affect Future Performance
   41




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Commodity Price Risks
 Accounting for Derivative Instruments and
Hedging Activities Accounting
for Certain Derivative Instruments and Certain Hedging Activities Amendment of Statement 133 on Derivative Instruments and Hedging
Activities
 42




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##### Table of Contents



Three months
    
    Nine monthsended
    
    ended(In millions)
    
    October 2, 2005
    
    October 2, 2005Gain/(loss) arising from ineffectiveness included in earnings
    
    $
    0.8
    
    
    $
    0.8Gains/(losses) reclassed from other comprehensive income
(OCI) to earnings
    
    $
    0.6
    
    
    $
    1.6
 (In millions)
    
    October 2, 2005
    
    October 3, 2004Aggregate notional value of derivatives outstanding
    
    $
    8.4
    
    
    $
    9.0Period through which derivative positions currently exist
    
    December 2006
    
    May 2005Gain/(loss) of fair value of derivatives
    
    $
    2.0
    
    
    $
    2.1The change in fair value due to the effect of a 10%
adverse change in
commodity prices to current fair value
    
    $
    (1.0
    )
    
    $
    (1.1
    )Deferred gains/(losses) included in OCI
    
    $
    1.7
    
    
    $
    0.6Gains/(losses) included in OCI to be recognized in the
next 12 months
    
    $
    1.6
    
    
    $
    0.6Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    15
    
    
    
    8
  Three months
    
    Nine monthsended
    
    ended(In millions)
    
    October 2, 2005
    
    October 2, 2005Gain/(loss) arising from ineffectiveness included in earnings
    
    $
    0.3
    
    
    $
    (0.4
    )Gains/(losses) reclassed from other comprehensive income
(OCI) to earnings
    
    $
    (1.3
    )
    
    $
    (2.9
    )
 (In millions)
    
    October 2, 2005
    
    October 3, 2004Aggregate notional value of derivatives outstanding
    
    $
    3.9
    
    
    $
    22.8Period through which derivative positions currently exist
    
    December 2005
    
    December 2004Gain/(loss) of fair value of derivatives
    
    $
    
    
    
    $
    (1.8
    )The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (0.4
    )
    
    $
    (2.5
    )Deferred gains/(losses) included in OCI
    
    $
    (0.1
    )
    
    $
    (1.3
    )Gains/(losses) included in OCI to be recognized in the
next 12 months
    
    $
    (0.1
    )
    
    $
    (1.3
    )Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    3
    
    
    
    3
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##### Table of Contents



Three months
    
    Nine monthsended
    
    ended(In millions)
    
    October 2, 2005
    
    October 2, 2005Gain/(loss) arising from ineffectiveness included in earnings
    
    $
    (2.0
    )
    
    $
    (2.3
    )
 (In millions)
    
    October 2, 2005
    
    October 3, 2004Aggregate notional value of derivatives outstanding
    
    $
    26.0
    
    
    $
    50.3Period through which derivative positions currently exist
    
    December 2005
    
    December 2004Gain/(loss) of fair value of derivatives
    
    $
    (1.5
    )
    
    $
    (6.0
    )The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (2.7
    )
    
    $
    (5.6
    )
  Three months
    
    Nine monthsended
    
    ended(In millions)
    
    October 2, 2005
    
    October 2, 2005Gain/(loss) arising from ineffectiveness included in earnings
    
    $
    (1.5
    )
    
    $
    (1.0
    )Gains/(losses) reclassed from other comprehensive income
(OCI) to earnings
    
    
    1.2
    
    
    
    1.2
 (In millions)
    
    October 2, 2005
    
    October 3, 2004Aggregate notional value of derivatives outstanding
    
    $
    3.6
    
    
    $
    9.5Period through which derivative positions currently exist
    
    December 2006
    
    November 2006Gain/(loss) of fair value of derivatives
    
    $
    3.8
    
    
    $
    1.0The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (0.7
    )
    
    $
    (1.0
    )Deferred gains/(losses) included in OCI
    
    $
    5.8
    
    
    $
    (0.2
    )Gains/(losses) included in OCI to be recognized in the
next 12 months
    
    $
    5.0
    
    
    $
    (0.2
    )Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    15
    
    
    
    26
 Foreign Currency Exchange Risk
  44




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##### Table of Contents



Interest Rate Risk
   Material Limitations
  45




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 5. Other Information
 None
 
 Item 6. Exhibits
  10.1
    
    Amendment No. 1 to Amended and Restated Credit Agreement, dated as of August 1,
2005, among the Company, its U.S. subsidiaries, the lenders named therein and Wachovia
Bank, National Association, as administrative agent (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K filed on August 5, 2005).10.2
    
    Amendment No. 1 to Receivables Purchase Agreement, dated as of August 1, 2005,
among DEJ 98 Finance, LLC, Wolverine Finance, LLC, the Company, Blue Ridge Asset
Funding Corporation and Wachovia Bank, National Association,
 46




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##### Table of Contents



individually and as agent (incorporated by reference to Exhibit 10.2 to the
Companys Current Report on Form 8-K filed on August 5, 2005).10.3
    
    First Amendment to Amended and Restated Consignment Agreement, dated as of
August 1, 2005, among the Company, Wolverine Joining Technologies, LLC and Fleet
Precious Metals Inc., operating as Bank of America Precious Metals (incorporated by
reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on August
5, 2005).10.4
    
    Amendment No. 2 to Amended and Restated Credit Agreement, effective September
30, 2005, among the Company, its U.S. subsidiaries, the lenders named therein and
Wachovia Bank, National Association, as administrative agent (incorporated herein by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on October
31, 2005).10.5
    
    Amendment No. 2 to Receivables Purchase Agreement, effective September 30,
2005, among DEJ 98 Finance, LLC, Wolverine Finance, LLC, the Company, Blue Ridge Asset
Funding Corporation and Wachovia Bank, National Association, individually and as agent
(incorporated herein by reference to Exhibit 10.2 to the Companys Current Report on
Form 8-K filed on October 31, 2005).31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes- Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 SIGNATURE
  WOLVERINE TUBE, INC.Dated: November 14, 2005
    
    By: /s/ James E. DeasonName: James E. Deason
Title: Senior Vice President, Chief Financial
Officer and           Secretary
 47