##### 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 April 3, 2005  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)
 (256) 353-1310 
 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 þ NO o Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). YES þ NO o Indicate the number of shares outstanding of each class of Common Stock, as of the latest
practicable date: Class
    
    Outstanding as of May 9, 2005Common Stock, $0.01 Par Value
    
    15,030,869 Shares




---



FORM 10-Q QUARTERLY REPORT TABLE OF CONTENTS Page No.PART IItem 1.
    
    Financial StatementsCondensed Consolidated Statements of Operations
(Unaudited) -
Three-months ended April 3, 2005 and April 4, 2004
    
    
    1Condensed Consolidated Balance Sheets -
April 3, 2005 (Unaudited) and December 31, 2004
    
    
    2Condensed Consolidated Statements of Cash Flows
(Unaudited) -
Three-months ended April 3, 2005 and April 4, 2004
    
    
    3Notes to Unaudited Consolidated Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    17Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 4.
    
    Controls and Procedures
    
    
    38PART IIItem 5.
    
    Other Information
    
    
    38Item 6.
    
    Exhibits
    
    
    38EX-10.9  SALARIES AND BONUSES OF NAMED EXECUTIVE OFFICERSEX-10.10  NON-EMPLOYEE DIRECTOR COMPENSATIONEX-31.1  SECTION 302 CERTIFICATION OF THE CEOEX-31.2  SECTION 302 CERTIFICATION OF THE CFOEX-32.1  SECTION 906 CERTIFICATION OF THE CEOEX-32.2  SECTION 906 CERTIFICATION OF THE CFO




---



##### Table of Contents



Item 1. Financial Statements Wolverine Tube, Inc. and Subsidiaries 
 Condensed Consolidated Statements of Operations
 Three-months endedApril 3, 2005
    
    
    April 4, 2004(In thousands except per share amounts)Net sales
    
    $
    213,482
    
    
    $
    205,805Cost of goods sold
    
    
    203,422
    
    
    
    188,320Gross profit
    
    
    10,060
    
    
    
    17,485Selling, general and administrative expenses
    
    
    8,308
    
    
    
    9,437Restructuring charges/(credits)
    
    
    (82
    )
    
    
    571Operating income
    
    
    1,834
    
    
    
    7,477Other expenses:Interest expense, net
    
    
    5,322
    
    
    
    5,070Amortization and other, net
    
    
    12
    
    
    
    668Income/(loss) before income taxes
    
    
    (3,500
    )
    
    
    1,739Income tax provision/(benefit)
    
    
    (1,018
    )
    
    
    371Net income/(loss)
    
    $
    (2,482
    )
    
    $
    1,368Earnings/(loss) per share:Basic
    
    $
    (0.17
    )
    
    $
    0.11Diluted
    
    $
    (0.17
    )
    
    $
    0.11Weighted average shares and share equivalents outstanding:Basic
    
    
    14,965
    
    
    
    12,289Diluted
    
    
    14,965
    
    
    
    12,534
 The accompanying notes are an integral part of these consolidated financial statements. 1




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries 
 Condensed Consolidated Balance Sheets
 April 3,
    
    
    December 31,2005
    
    
    2004(In thousands except share and per share amounts)
    
    (Unaudited)AssetsCurrent assetsCash and cash equivalents
    
    $
    15,263
    
    
    $
    35,017Accounts receivable, net
    
    
    114,609
    
    
    
    93,964Inventories
    
    
    157,702
    
    
    
    151,979Prepaid expenses and other
    
    
    10,557
    
    
    
    6,905Deferred taxes current
    
    
    7,194
    
    
    
    7,707Total current assets
    
    
    305,325
    
    
    
    295,572Property, plant and equipment, net
    
    
    193,507
    
    
    
    194,966Deferred charges, net
    
    
    11,770
    
    
    
    11,892Goodwill, net
    
    
    77,222
    
    
    
    77,312Deferred taxes, non-current
    
    
    922
    
    
    
    1,008Assets held for sale
    
    
    1,160
    
    
    
    1,147Investments
    
    
    5,572
    
    
    
    5,561Total assets
    
    $
    595,478
    
    
    $
    587,458Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    76,485
    
    
    $
    59,912Accrued liabilities
    
    
    19,634
    
    
    
    32,476Short-term borrowings
    
    
    321
    
    
    
    1,219Total current liabilities
    
    
    96,440
    
    
    
    93,607Long-term debt
    
    
    242,401
    
    
    
    237,022Pension liabilities
    
    
    29,366
    
    
    
    27,915Postretirement benefit obligation
    
    
    18,702
    
    
    
    18,422Accrued environmental remediation
    
    
    946
    
    
    
    990Total liabilities
    
    
    387,855
    
    
    
    377,956Stockholders equityCommon stock, par value $0.01 per share;
40,000,000 shares authorized; 15,013,922 and
14,927,577 shares issued and outstanding as of
April 3, 2005 and December 31, 2004,
respectively
    
    
    150
    
    
    
    149Additional paid-in capital
    
    
    91,390
    
    
    
    90,571Retained earnings
    
    
    121,868
    
    
    
    124,350Unearned compensation
    
    
    (648
    )
    
    
    (309
    )Accumulated other comprehensive loss
    
    
    (5,137
    )
    
    
    (5,259
    )Total stockholders equity
    
    
    207,623
    
    
    
    209,502Total liabilities and stockholders equity
    
    $
    595,478
    
    
    $
    587,458
 The accompanying notes are an integral part of these consolidated financial statements 2




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries 
 Condensed Consolidated Statements of Cash Flows
 Three-months endedApril 3, 2005
    
    
    April 4, 2004(In thousands)Operating ActivitiesNet income/(loss)
    
    $
    (2,482
    )
    
    $
    1,368Adjustments to reconcile net income/(loss) to net cash
used for operating activities:Depreciation and amortization
    
    
    4,293
    
    
    
    4,668Deferred income tax benefit
    
    
    (654
    )
    
    
    9Other non-cash items
    
    
    1,395
    
    
    
    2,953Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (21,042
    )
    
    
    (32,532
    )Inventories
    
    
    (6,325
    )
    
    
    (11,335
    )Refundable income taxes
    
    
    (704
    )
    
    
    (180
    )Prepaid expenses and other
    
    
    (4,250
    )
    
    
    (4,718
    )Accounts payable
    
    
    16,747
    
    
    
    14,964Accrued liabilities including pension,
postretirement benefit and environmental
    
    
    (9,171
    )
    
    
    (7,810
    )Net cash used for operating activities
    
    
    (22,193
    )
    
    
    (32,613
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (3,406
    )
    
    
    (1,607
    )Disposal of property, plant and equipment
    
    
    51
    
    
    
    270Net cash used for investing activities
    
    
    (3,355
    )
    
    
    (1,337
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (2
    )
    
    
    (86
    )Net borrowings/(payments) on revolving credit facilities
    
    
    6,500
    
    
    
    20,000Issuance/(redemption) of Common Stock
    
    
    403
    
    
    
    (43
    )Other financing activities
    
    
    (857
    )
    
    
    (186
    )Net cash provided by financing activities
    
    
    6,044
    
    
    
    19,685Effect of exchange rate on cash and cash equivalents
    
    
    (250
    )
    
    
    (771
    )Net cash used for continuing operations
    
    
    (19,754
    )
    
    
    (15,036
    )Net cash provided by discontinued operations
    
    
    
    
    
    
    552Net decrease in cash and cash equivalents
    
    
    (19,754
    )
    
    
    (14,484
    )Cash and cash equivalents at beginning of period
    
    
    35,017
    
    
    
    46,090Cash and cash equivalents at end of period
    
    $
    15,263
    
    
    $
    31,606
 The accompanying notes are an integral part of these consolidated financial statements. 3




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries 
 Notes to Unaudited Consolidated Financial Statements
 (1) Basis of Reporting for Interim Financial Statements The accompanying unaudited 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 unaudited consolidated financial statements included herein pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in statements prepared in accordance with generally accepted
accounting principles 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, 2004. The accompanying 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 for the three-months ended April 3,
2005 and April 4, 2004. The results of operations for interim periods are not necessarily
indicative of results to be expected for an entire year. We use our internal operational reporting cycle for quarterly financial reporting. Prior
to 2005, the Company did not uniformily apply the provisions of the Emerging Issues Task Force
(EITF) Consensus 00-10 as freight amounts billed to
customers, in the aggregate, were not material to the financial
statements as a whole. Beginning in the first quarter 2005, because the Company now believes that, due to
rising fuel and other transportation costs, freight costs billed to customers may become material,
the Company began classifying freight billed to customers as revenue instead of as a reduction to
cost of goods sold in accordance with EITF 00-10. The impact of the
reclassification on the first quarter of 2005 was approximately $0.1
million. (2) Inventories Inventories are as follows: April 3, 2005
    
    
    December 31, 2004(In thousands)Finished products
    
    $
    64,862
    
    
    $
    61,376Work-in-process
    
    
    36,206
    
    
    
    35,920Raw materials
    
    
    29,390
    
    
    
    27,653Supplies
    
    
    27,244
    
    
    
    27,030Totals
    
    $
    157,702
    
    
    $
    151,979
 4




---



##### Table of Contents



(3) Earnings/(Loss) Per Share Basic earnings/(loss) per share were computed by dividing net income/(loss) by the weighted
average number of shares outstanding during each period. Where applicable, diluted earnings/(loss)
per share were calculated by including the effect of all dilutive securities, including stock
options and unvested restricted stock. To the extent that stock options and unvested restricted
stock are anti-dilutive, they are excluded from the calculation of diluted earnings/(loss) per
share in accordance with Statement of Financial Accounting No. 128 (SFAS 128), Earnings Per
Share. The following table sets forth the computation of basic and diluted earnings per share: Three-months endedApril 3, 2005
    
    
    April 4, 2004(In thousands, except per share data)Net income /(loss)
    
    $
    (2,482
    )
    
    $
    1,368Weighted average shares and share equivalents outstanding:Basic shares
    
    
    14,965
    
    
    
    12,289Dilutive stock options and restricted shares
    
    
    
    
    
    
    245Diluted weighted average shares and share equivalents
    
    
    14,965
    
    
    
    12,534Earnings/(loss) per common share:Basic
    
    
    (0.17
    )
    
    
    0.11Diluted
    
    
    (0.17
    )
    
    
    0.11
 We had additional stock options outstanding of 1,048,725 and 1,301,263 for the
three-months ended April 3, 2005 and April 4, 2004, respectively, which were not included in the
computation of potentially dilutive securities, because the options exercise prices were greater
than the average market price of the common shares, or because the options were anti-dilutive. (4) Stock-Based Compensation Plans We account for our stock option compensation plans using the intrinsic value method prescribed
in Accounting Principals Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees,
and related interpretations, under which no stock option compensation expense is reflected in net
income/(loss) because the exercise price of our stock options equals the market price of the
underlying stock on the date of grant. The following table illustrates the effect on net
income/(loss) and earnings/(loss) per share if we had applied the fair value recognition provisions
of Statement of Financial Accounting Standard No. 123 (SFAS 123), Accounting for Stock-Based
Compensation, to our stock option compensation plans. 5




---



##### Table of Contents



Three-month periods endedApril 3, 2005
    
    
    April 4, 2004(In thousands, except per share amounts)Net income/(loss), as reported
    
    $
    (2,482
    )
    
    $
    1,368Deduct: Total stock-based employee
compensation expense determined under fair
value based method for all awards, net of
related tax effects
    
    
    (135
    )
    
    
    (56
    )Pro forma net income/(loss)
    
    $
    (2,617
    )
    
    $
    1,312Earnings/(loss) per share:Basic  as reported
    
    $
    (0.17
    )
    
    $
    0.11Basic  pro forma
    
    $
    (0.17
    )
    
    $
    0.11Diluted  as reported
    
    $
    (0.17
    )
    
    $
    0.11Diluted  pro forma
    
    $
    (0.17
    )
    
    $
    0.11
 In December 2004, Statement of Financial Accounting Standard No. 123R (SFAS 123R),
Share-Based Payment, was issued. This statement amends SFAS 123, and requires companies to
recognize in their financial statements the compensation cost relating to share-based payment
transactions. The effective date of this standard is for interim and annual periods beginning
after December 15, 2005. Historically, we have elected to follow the intrinsic value method in accounting for employee
stock options as prescribed under APB 25, and its related interpretations, under which no
compensation cost has been recognized. Upon the adoption of SFAS No. 123R, we will be required to
recognize in income the cost of employee services received in exchange for equity instruments
granted as measured at grant-date fair value. The cost of the options granted would be recognized
over the requisite service period, normally the vesting period. We have not yet determined the
effects of adopting SFAS 123R, and have not determined whether the adoption will result in amounts
that are similar to the current pro forma disclosures under SFAS 123, or whether they will be
material to the consolidated financial statements. (5) Interest Expense The following table summarizes interest expense, net : Three-months endedApril 3, 2005
    
    
    April 4, 2004(in thousands)Interest expense
    
    $
    5,413
    
    
    $
    5,475Interest income
    
    
    (67
    )
    
    
    (97
    )Effect of interest rate swap
    
    
    45
    
    
    
    (284
    )Capitalized interest
    
    
    (69
    )
    
    
    (24
    )Interest expense, net
    
    $
    5,322
    
    
    $
    5,070
 6




---



##### Table of Contents



(6) Debt The following table summarizes long-term debt: April 3, 2005
    
    
    December 31, 2004(In thousands)Secured revolving credit facility, due March 2007
    
    $
    7,500
    
    
    $
    1,000Senior Notes, 10.5%, due April 2009
    
    
    99,400
    
    
    
    99,400Discount on 10.5% Senior Notes, original issue
discount amortized over 7 years
    
    
    (686
    )
    
    
    (729
    )Senior Notes, 7.375%, due August 2008
    
    
    134,988
    
    
    
    136,097Discount on 7.375% Senior Notes, original issue
discount amortized over 10 years
    
    
    (96
    )
    
    
    (103
    )Capitalized leases
    
    
    100
    
    
    
    106Netherlands facility, 5.1%, due on demand
    
    
    57
    
    
    
    976Other foreign facilities
    
    
    1,459
    
    
    
    1,494242,722
    
    
    
    238,241Less short-term borrowings
    
    
    321
    
    
    
    1,219Total
    
    $
    242,401
    
    
    $
    237,022
 Under our secured revolving credit facility in place at April 3, 2005, we had $7.5
million in outstanding borrowings. We also had approximately $9.2 million of standby letters of
credit outstanding, and approximately $21.5 million (subject to a $2.0 million excess availability
requirement) in additional borrowing capacity available thereunder. As of December 31, 2004, we had $1.0 million in outstanding borrowings under our secured
revolving credit facility. We had approximately $9.2 million of standby letters of credit
outstanding under the secured revolving facility, and approximately $26.6 million (subject to a
$2.0 million excess availability requirement) in additional borrowing capacity available
thereunder. The Companys additional borrowing capacity available in each of the periods ended April 3,
2004 and December 31, 2004 reflects a reduction in the available amount for the value of the
interest rate swap outstanding of $1.8 million and $0.7 million, respectively. Under the consignment and forward contracts arrangement with Fleet Precious Metals, Inc.,
operating as Bank of America Precious Metals (BAPM) in place at April 3, 2005, we had $12.8
million of silver in our inventory under the silver consignment facility and $2.0 million committed
to under the forward contracts arrangement. At December 31, 2004, we had $13.9 million in our
inventory under the silver consignment facility and $0.7 million outstanding under the forward
contracts arrangement. On April 28, 2005, we established a new three-year receivables sale facility of up to $45
million arranged by Wachovia Bank, National Association (Wachovia); amended and restated our
current secured revolving credit facility with Wachovia to provide for a three-year facility of up
to $35 million; and amended and restated our silver consignment and forward contracts facility with
BAPM. The amended and restated secured revolving credit agreement and amended and restated silver
consignment agreement both amended their respective EBITDA and 7




---



##### Table of Contents



other financial covenants as of April 3, 2005. The Company was in compliance with the amended
covenants as of April 3, 2005. All of the Companys new, existing and amended liquidity facilities have cross default
provisions. (7) Contingencies We are subject to extensive environmental regulations imposed by local, state, federal and
provincial authorities in the United States, Canada, China, Portugal and Mexico with respect to air
emission, discharges to waterways, and the generation, handling, storage, transportation, treatment
and disposal of waste material, and we have received various communications from regulatory
authorities concerning environmental matters. We have accrued undiscounted estimated environmental
remediation costs of $0.9 million as of April 3, 2005, consisting primarily of $0.7 million for the
Ardmore, Tennessee facility and $0.2 million for the Decatur, Alabama facility. Based upon
information currently available, we believe that the ultimate remediation costs for 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 these environmental matters could differ
materially from the amounts we estimated and have accrued at April 3, 2005, and could result in
additional exposure if these environmental matters are not resolved as anticipated. (8) Comprehensive Income/(Loss) The following table summarizes comprehensive income/(loss) : Three-months endedApril 3, 2005
    
    
    April 4, 2004(In thousands)Net income/(loss)
    
    $
    (2,482
    )
    
    $
    1,368Translation adjustment for financial statements denominated in a foreign currency
    
    
    (1,805
    )
    
    
    (1,819
    )Unrealized gain/(loss) on cash flow hedges, net of tax
    
    
    1,921
    
    
    
    2,816Minimum pension liability adjustment, net of tax
    
    
    6
    
    
    
    26Comprehensive income/(loss)
    
    $
    (2,360
    )
    
    $
    2,391
 (9) Restructuring Charges At April 3, 2005, remaining reserves for restructuring charges were $0.4 million with respect
to the Booneville, Mississippi facility closure and $0.1 million for severance costs at the
Decatur, Alabama facility related to the relocation of product lines from Decatur to Shawnee,
Oklahoma and Monterrey, Mexico. In the first quarter of 2005, we recorded a net restructuring credit of $0.1 million. This
amount includes $0.1 million in restructuring expense related to severance payments in Canada, $0.1
million of expenses related to the Booneville, Mississippi facility, offset by the forgiveness of
personal property taxes for 2004 related to the Booneville facility of $0.3 million. In the first 8




---



##### Table of Contents



quarter of 2004, we incurred restructuring expenses of $0.6 million consisting of $0.3 million for Booneville, $0.2 million for employee severance and $0.1 million related to our closed
Roxboro, NC facility and other restructuring related issues. (10) Industry Segments The Company operates in three business segments: commercial products, wholesale products and
rod, bar and other products. These segments are distinguishable by their potential end-user
application. Commercial products consist primarily of high value added products sold directly to
original equipment manufacturers. Wholesale products are commodity-type plumbing tube products,
which are primarily sold to plumbing wholesalers and distributors. Rod, bar and other products
consist of products sold to a variety of customers and includes our European distribution business.
The commercial products segment includes manufacturing plants in the U.S., Canada, China, Portugal
and Mexico. The wholesale products segment includes manufacturing facilities in the U.S. and
Canada. The rod, bar and other products segment has a manufacturing facility in the U.S. and
Canada. All product segments share a common sales, marketing and distribution effort. The
performance of our operating segments is measured on sales and gross profit, of which the level of
sales is directly impacted by the price of metal, primarily copper. We do not allocate asset
amounts and items of income and expense below gross profit or depreciation and amortization. Summarized financial information concerning our reportable segments is shown in the following
table: Rod, BarCommercial
    
    
    Wholesale
    
    
    & Other
    
    
    Consolidated(In thousands)Three-months ended April 3, 2005Pounds shipped
    
    
    55,455
    
    
    
    23,411
    
    
    
    4,893
    
    
    
    83,759Net sales
    
    $
    153,070
    
    
    $
    45,581
    
    
    $
    14,831
    
    
    $
    213,482Gross profit/(loss)
    
    
    9,619
    
    
    
    (124
    )
    
    
    565
    
    
    
    10,060Three-months ended April 4, 2004Pounds shipped
    
    
    61,070
    
    
    
    25,932
    
    
    
    6,350
    
    
    
    93,352Net sales
    
    $
    144,926
    
    
    $
    45,574
    
    
    $
    15,305
    
    
    $
    205,805Gross profit
    
    
    14,903
    
    
    
    1,746
    
    
    
    836
    
    
    
    17,485
 9




---



##### Table of Contents



(11) Pension Expense U.S. Qualified Retirement Plan The following table summarizes the components of net periodic pension cost for the U.S.
Qualified Retirement Plan: Three-months endedApril 3, 2005
    
    
    April 4, 2004(In thousands)Service cost
    
    $
    1,237
    
    
    $
    1,135Interest cost
    
    
    2,522
    
    
    
    2,393Expected return on plan assets
    
    
    (2,931
    )
    
    
    (2,799
    )Amortization of prior service cost
    
    
    31
    
    
    
    30Amortization of net actuarial loss
    
    
    449
    
    
    
    341PBGC premium (underfunded plan)
    
    
    
    
    
    
    58Net periodic pension cost
    
    $
    1,308
    
    
    $
    1,158
 U.S. Nonqualified Retirement Plan The following table summarizes the components of net periodic pension cost for the
Supplemental Benefit Restoration Plan and the Supplemental Executive Retirement Plan: Three-months endedApril 3, 2005
    
    

April 4, 2004(In thousands)Service cost
    
    $
    64
    
    
    $
    48Interest cost
    
    
    122
    
    
    
    115Amortization of prior service cost
    
    
    92
    
    
    
    92Amortization of loss
    
    
    19
    
    
    
    FAS 88 settlement
    
    
    94
    
    
    
    Net periodic pension cost
    
    $
    391
    
    
    $
    255
 Canadian Plans The following table summarizes the components of net periodic pension cost for the Canadian
pension plans: Three-months endedApril 3, 2005
    
    
    April 4, 2004(In thousands)Service cost
    
    $
    204
    
    
    $
    150Interest cost
    
    
    498
    
    
    
    357Expected return on plan assets
    
    
    (514
    )
    
    
    (325
    )Amortization of prior service cost
    
    
    32
    
    
    
    25Amortization of net actuarial loss
    
    
    28
    
    
    
    44Net periodic pension cost
    
    $
    248
    
    
    $
    251
 10




---



##### Table of Contents



Postretirement Benefit Obligation The following table summarizes the components of the net periodic costs for postretirement
benefits: Three-months endedApril 3, 2005
    
    
    April 4, 2004(In thousands)Service cost
    
    $
    184
    
    
    $
    183Interest cost
    
    
    283
    
    
    
    255Amortization of prior service cost
    
    
    38
    
    
    
    38Amortization of deferred gain
    
    
    11
    
    
    
    5Net periodic pension cost
    
    $
    516
    
    
    $
    481
 (12) Assets Held for Sale On February 16, 2005, we entered into an agreement for the sale of the WRI land and building
for $1.1 million U.S. dollars. This transaction closed on May 3, 2005. The Company incurred a
loss of approximately $0.1 million on the sale of this property. (13.) Income Taxes The income tax benefit of $1.0 million for the first quarter of 2005 is net of a $0.5 million
tax charge related to the repatriation of $10.2 million from China under the American Jobs Creation
Act of 2004 (14.) 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 (See Note 7).
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. (15.) Consolidating Financial Information The following tables present consolidating financial information for: (a) Wolverine Tube, Inc.
(the Parent) on a stand-alone basis; (b) on a combined basis, the guarantors of the 10.5% Senior
Notes and 7.375% Senior Notes (Subsidiary Guarantors), which include TF Investor, Inc.; Tube
Forming, L.P.; Wolverine Finance, LLC; Wolverine China Investments, LLC; Small Tube Manufacturing,
LLC; Wolverine Joining Technologies, LLC; WT Holding Company, Inc. and Tube Forming Holdings, Inc.;
and (c) on a combined basis, the Non-Guarantor Subsidiaries, which include Wolverine Tube (Canada)
Inc.; 3072452 Nova Scotia Company; 3072453 Nova Scotia Company; 3072996 Nova Scotia Company;
Wolverine Tube Canada Limited Partnership; Wolverine Tube (Shanghai) Limited; Wolverine European
Holdings BV; Wolverine Tube Europe BV; Wolverine Tube, BV; Wolverine Tubagem (Portugal), Lda;
Wolverine Joining Technologies Canada, Inc.; Wolverine Europe (EURL); WLVN de Latinoamerica, S. de
R.L. de C.V.; and WLV Mexico, S. de R.L. de C.V. Each Subsidiary Guarantor is wholly-owned by 11




---



##### Table of Contents



Wolverine Tube, Inc. The guarantees of each of the Subsidiary Guarantors are full, unconditional,
joint and several. Accordingly, separate financial statements of the wholly-owned Subsidiary Guarantors are not presented because the Subsidiary Guarantors are jointly,
severally and unconditionally liable under the guarantees, and the Company believes that 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 manufacturing operations located in Alabama, Oklahoma, Tennessee,
and Mississippi and certain corporate management, sales and marketing, information services and
finance functions mostly located in Alabama but in the case of sales, regionally located near our
major customers. Wolverine Tube, Inc. and Subsidiaries
Consolidating Statements of Operations
For the Three-Months Ended April 3, 2005
(Unaudited) Subsidiary
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Net sales
    
    $
    120,171
    
    
    $
    42,315
    
    
    $
    70,343
    
    
    $
    (19,347
    )
    
    $
    213,482Cost of goods sold
    
    
    117,181
    
    
    
    38,413
    
    
    
    67,175
    
    
    
    (19,347
    )
    
    
    203,422Gross profit
    
    
    2,990
    
    
    
    3,902
    
    
    
    3,168
    
    
    
    
    
    
    
    10,060Selling, general and administrative expenses
    
    
    6,259
    
    
    
    803
    
    
    
    1,246
    
    
    
    
    
    
    
    8,308Restructuring charges
    
    
    (168
    )
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    (82
    )Operating income/(loss) from continuing operations
    
    
    (3,101
    )
    
    
    3,099
    
    
    
    1,836
    
    
    
    
    
    
    
    1,834Other expense/(income):Interest expense, net
    
    
    5,479
    
    
    
    (11
    )
    
    
    (146
    )
    
    
    
    
    
    
    5,322Amortization and other, net
    
    
    3,272
    
    
    
    (3,623
    )
    
    
    363
    
    
    
    
    
    
    
    12Equity in earnings of subsidiaries
    
    
    5,765
    
    
    
    
    
    
    
    
    
    
    
    (5,765
    )
    
    
    Income/(loss) from continuing operations before
income taxes
    
    
    (6,087
    )
    
    
    6,733
    
    
    
    1,619
    
    
    
    (5,765
    )
    
    
    (3,500
    )Income tax provision/(benefit)
    
    
    (3,605
    )
    
    
    2,289
    
    
    
    298
    
    
    
    
    
    
    
    (1,018
    )Net income/(loss)
    
    $
    (2,482
    )
    
    $
    4,444
    
    
    $
    1,321
    
    
    $
    (5,765
    )
    
    $
    (2,482
    )
 12




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidating Statements of Operations
For the Three-Months Ended April 4, 2004
(Unaudited) Subsidiary
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Net sales
    
    $
    109,005
    
    
    $
    41,920
    
    
    $
    70,595
    
    
    $
    (15,715
    )
    
    $
    205,805Cost of goods sold
    
    
    102,725
    
    
    
    35,431
    
    
    
    65,879
    
    
    
    (15,715
    )
    
    
    188,320Gross profit
    
    
    6,280
    
    
    
    6,489
    
    
    
    4,716
    
    
    
    
    
    
    
    17,485Selling, general and administrative expenses
    
    
    7,549
    
    
    
    767
    
    
    
    1,121
    
    
    
    
    
    
    
    9,437Restructuring charges
    
    
    571
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    571Operating income/(loss)
    
    
    (1,840
    )
    
    
    5,722
    
    
    
    3,595
    
    
    
    
    
    
    
    7,477Other expense/(income):Interest expense, net
    
    
    5,212
    
    
    
    (10
    )
    
    
    (132
    )
    
    
    
    
    
    
    5,070Amortization and other, net
    
    
    3,030
    
    
    
    (3,294
    )
    
    
    932
    
    
    
    
    
    
    
    668Equity in earnings of subsidiaries
    
    
    8,015
    
    
    
    
    
    
    
    
    
    
    
    (8,015
    )
    
    
    Income/(loss) from continuing operations
before income taxes
    
    
    (2,067
    )
    
    
    9,026
    
    
    
    2,795
    
    
    
    
    
    
    
    1,739Income tax provision/(benefit)
    
    
    (3,435
    )
    
    
    3,255
    
    
    
    551
    
    
    
    
    
    
    
    371Net income/(loss)
    
    $
    1,368
    
    
    $
    5,771
    
    
    $
    2,244
    
    
    $
    (8,015
    )
    
    $
    1,368
 13




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidating Balance Sheets
April 3, 2005
(Unaudited) Subsidiary
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    2,901
    
    
    $
    
    
    
    $
    12,362
    
    
    $
    
    
    
    $
    15,263Accounts receivable, net
    
    
    7,397
    
    
    
    71,793
    
    
    
    35,419
    
    
    
    
    
    
    
    114,609Inventories
    
    
    81,310
    
    
    
    39,495
    
    
    
    36,897
    
    
    
    
    
    
    
    157,702Prepaid expenses and other
    
    
    5,803
    
    
    
    2,461
    
    
    
    2,293
    
    
    
    
    
    
    
    10,557Deferred taxes, current
    
    
    7,625
    
    
    
    211
    
    
    
    (642
    )
    
    
    
    
    
    
    7,194Total current assets
    
    
    105,036
    
    
    
    113,960
    
    
    
    86,329
    
    
    
    
    
    
    
    305,325Property, plant and equipment, net
    
    
    120,365
    
    
    
    28,058
    
    
    
    45,084
    
    
    
    
    
    
    
    193,507Deferred charges, net
    
    
    9,616
    
    
    
    
    
    
    
    2,154
    
    
    
    
    
    
    
    11,770Deferred taxes, non-current
    
    
    (982
    )
    
    
    (7,385
    )
    
    
    9,289
    
    
    
    
    
    
    
    922Goodwill, net
    
    
    
    
    
    
    75,674
    
    
    
    1,548
    
    
    
    
    
    
    
    77,222Assets held for sale
    
    
    
    
    
    
    
    
    
    
    1,160
    
    
    
    
    
    
    
    1,160Prepaid pension and other
    
    
    4,302
    
    
    
    
    
    
    
    1,270
    
    
    
    
    
    
    
    5,572Investments in subsidiaries
    
    
    438,424
    
    
    
    325
    
    
    
    
    
    
    
    (438,749
    )
    
    
    Total assets
    
    $
    676,761
    
    
    $
    210,632
    
    
    $
    146,834
    
    
    $
    (438,749
    )
    
    $
    595,478Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    38,755
    
    
    $
    18,674
    
    
    $
    19,056
    
    
    $
    
    
    
    $
    76,485Accrued liabilities
    
    
    (1,748
    )
    
    
    15,843
    
    
    
    5,539
    
    
    
    
    
    
    
    19,634Short-term borrowings
    
    
    
    
    
    
    18
    
    
    
    303
    
    
    
    
    
    
    
    321Intercompany balances
    
    
    151,911
    
    
    
    (137,381
    )
    
    
    (14,530
    )
    
    
    
    
    
    
    Total current liabilities
    
    
    188,918
    
    
    
    (102,846
    )
    
    
    10,368
    
    
    
    
    
    
    
    96,440Long-term debt
    
    
    241,106
    
    
    
    82
    
    
    
    1,213
    
    
    
    
    
    
    
    242,401Pension liabilities
    
    
    27,357
    
    
    
    
    
    
    
    2,009
    
    
    
    
    
    
    
    29,366Postretirement benefit obligation
    
    
    10,814
    
    
    
    
    
    
    
    7,888
    
    
    
    
    
    
    
    18,702Accrued environmental remediation
    
    
    946
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    946Total liabilities
    
    
    469,141
    
    
    
    (102,764
    )
    
    
    21,478
    
    
    
    
    
    
    
    387,855Stockholders equity
    
    
    207,620
    
    
    
    313,396
    
    
    
    125,356
    
    
    
    (438,749
    )
    
    
    207,623Total liabilities and stockholders equity
    
    $
    676,761
    
    
    $
    210,632
    
    
    $
    146,834
    
    
    $
    (438,749
    )
    
    $
    595,478
 14




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidating Balance Sheets
December 31, 2004 Subsidiary
    
    
    Non-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
    
    
    209502
    
    
    
    308,952
    
    
    
    134,508
    
    
    
    (443,460
    )
    
    
    209,502Total liabilities and stockholders equity
    
    $
    682,864
    
    
    $
    198,344
    
    
    $
    149,710
    
    
    $
    (443,460
    )
    
    $
    587,458
 15




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidating Statements of Cash Flows
For the Three-Months Ended April 3, 2005
(Unaudited) Subsidiary
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Operating ActivitiesIncome /(loss) from continuing operations
    
    $
    (2,482
    )
    
    $
    4,444
    
    
    $
    1,321
    
    
    $
    (5,765
    )
    
    $
    (2,482
    )Depreciation and amortization
    
    
    2,753
    
    
    
    762
    
    
    
    778
    
    
    
    
    
    
    
    4,293Other non-cash items
    
    
    941
    
    
    
    15
    
    
    
    (215
    )
    
    
    
    
    
    
    741Equity/(loss) in earnings of subsidiaries
    
    
    (5,765
    )
    
    
    
    
    
    
    
    
    
    
    5,765
    
    
    
    Changes in operating assets and liabilities
    
    
    (8,102
    )
    
    
    (9,473
    )
    
    
    (7,170
    )
    
    
    
    
    

    
    (24,745
    )Net used for operating activities
    
    
    (12,655
    )
    
    
    (4,252
    )
    
    
    (5,286
    )
    
    
    
    
    
    
    (22,193
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (1,990
    )
    
    
    (333
    )
    
    
    (1,083
    )
    
    
    
    
    
    
    (3,406
    )Other
    
    
    21
    
    
    
    186
    
    
    
    (156
    )
    
    
    
    
    
    
    51Net cash used for investing activities
    
    
    (1,969
    )
    
    
    (147
    )
    
    
    (1,239
    )
    
    
    
    
    
    
    (3,355
    )Financing ActivitiesIssuance of Common Stock
    
    
    403
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    403Financing fees and expenses paid
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Net payments on revolving credit facilities
    
    
    6,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,500Intercompany borrowings (payments)
    
    
    (10,610
    )
    
    
    4,399
    
    
    
    6,211
    
    
    
    
    
    
    
    Other financing activities
    
    
    10,225
    
    
    
    
    
    
    
    (11,082
    )
    
    
    
    
    
    
    (857
    )Net cash provided by/(used for) financing activities
    
    
    6,516
    
    
    
    4,399
    
    
    
    (4,871
    )
    
    
    
    
    
    
    6,044Effect of exchange rate on cash and cash equivalents
    
    
    (182
    )
    
    
    
    
    
    
    (68
    )
    
    
    
    
    
    
    (250
    )Net cash used for continuing operations
    
    
    (8,290
    )
    
    
    
    
    
    
    (11,464
    )
    
    
    
    
    
    
    (19,754
    )Net cash used for discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net decrease in cash and cash equivalents
    
    
    (8,290
    )
    
    
    
    
    
    
    (11,464
    )
    
    
    
    
    
    
    (19,754
    )Cash and cash equivalents at beginning of period
    
    
    11,191
    
    
    
    
    
    
    
    23,826
    
    
    
    
    
    
    
    35,017Cash and cash equivalents at end of period
    
    $
    2,901
    
    
    $
    
    
    
    $
    12,362
    
    
    $
    
    
    
    $
    15,263
 16




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Consolidating Statements of Cash Flows
For the Three Months Ended April 4, 2004
(Unaudited) Subsidiary
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Operating ActivitiesIncome /(loss) from continuing operations
    
    $
    1,368
    
    
    $
    5,770
    
    
    $
    2,245
    
    
    $
    (8,015
    )
    
    $
    1,368Depreciation and amortization
    
    
    2,963
    
    
    
    901
    
    
    
    804
    
    
    
    
    
    
    
    4,668Other non-cash items
    
    
    2,938
    
    
    
    15
    
    
    
    9
    
    
    
    
    
    
    
    2,962Equity in earnings of subsidiaries
    
    
    (8,015
    )
    
    
    
    
    
    
    
    
    
    
    8,015
    
    
    
    Changes in operating assets and liabilities
    
    
    (11,525
    )
    
    
    (19,031
    )
    
    
    (11,055
    )
    
    
    
    
    
    
    (41,611
    )Net cash used for operating activities
    
    
    (12,271
    )
    
    
    (12,345
    )
    
    
    (7,997
    )
    
    
    
    
    
    
    (32,613
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (1,255
    )
    
    
    (176
    )
    
    
    (176
    )
    
    
    

    
    
    
    (1,607
    )Disposals of fixed assets
    
    
    
    
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    270Net cash provided by/(used for) investing activities
    
    
    (1,255
    )
    
    
    94
    
    
    
    (176
    )
    
    
    
    
    
    
    (1,337
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (86
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (86
    )Net borrowings/(payments) on revolving credit
facilities
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000Intercompany borrowings (payments)
    
    
    (7,692
    )
    
    
    12,790
    
    
    
    (5,098
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    (43
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43
    )Other financing activities
    
    
    531
    
    
    
    (531
    )
    
    
    (186
    )
    
    
    
    
    
    
    (186
    )Net cash provided by/(used for) financing activities
    
    
    12,710
    
    
    
    12,259
    
    
    
    (5,284
    )
    
    
    
    
    
    
    19,685Effect of exchange rate on cash and cash equivalents
    
    
    (413
    )
    
    
    
    
    
    
    (358
    )
    
    
    
    
    
    
    (771
    )Net cash provided by/(used for) continuing operations
    
    
    (1,229
    )
    
    
    8
    
    
    
    (13,815
    )
    
    
    
    
    
    
    (15,036
    )Net cash provided by discontinued operations
    
    
    
    
    
    
    
    
    
    
    552
    
    
    
    
    
    
    
    552Net increase/(decrease) in cash and cash equivalents
    
    
    (1,229
    )
    
    
    8
    
    
    
    (13,263
    )
    
    
    
    
    
    
    (14,484
    )Cash and cash equivalents at beginning of period
    
    
    8,536
    
    
    
    (6

    )
    
    
    37,560
    
    
    
    
    
    
    
    46,090Cash and cash equivalents at end of period
    
    $
    7,307
    
    
    $
    2
    
    
    $
    24,297
    
    
    $
    
    
    
    $
    31,606
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations Company Overview Wolverine is a world-class quality manufacturer of copper and copper alloy tube, fabricated
and metal joining products, and copper and copper alloy rod and bar products. Our focus is on
custom-engineered, higher value-added tubular products, fabricated and metal joining products which
enhance performance and energy efficiency in many applications, including commercial and
residential heating, ventilation and air conditioning, refrigeration, home appliances, automotive,
industrial equipment, power generation, petro-chemicals and chemical processing. We believe that
we have the broadest product offering of any North American manufacturer of copper and copper alloy
tube, which allows the offering of packaged solutions and cross selling opportunities. Our
principal product lines are commercial products, wholesale products and rod, bar and other
products. 17




---



##### Table of Contents



Results of Operations The following discussion summarizes the significant factors affecting the consolidated
operating results and financial condition of the Company for the three-months ended April 3, 2005
and April 4, 2004. This discussion should be read in conjunction with the unaudited consolidated
financial statements and notes to the unaudited consolidated financial statements contained in Item
1 above, and the consolidated financial statements and related notes included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2004. Executive Summary We incurred a loss in the first quarter of 2005 of approximately $2.5 million, or $0.17 per
share. This loss included a $521 thousand tax charge related to the repatriation of $10.2 million
from China under the American Jobs Creation Act of 2004. The loss was principally the result of
reduced demand and pricing in our wholesale products business due to continued record high copper
prices, uncertainty by OEM manufacturers in regards to build schedules of 13 SEER units versus 10
SEER units coupled with a slow start to the air conditioning cooling season from unseasonably
cooler weather, reduced production and our inability to absorb fixed costs into inventory, and an
organized work slowdown by unionized employees at our Montreal, Quebec facility prior to striking
on April 4, 2005. Demand, however, continues to remain strong for our technical tube, and our customer base
continues to expand both geographically and in terms of adoption of our newest product offerings.
The transition of production to our new Monterrey, Mexico facility continues on schedule, as well
as increased outsourcing by customers of increasingly more complex assemblies and sub-components in
our fabricated products business. Our liquidity position has improved significantly, as we have subsequent to the quarter-end
entered into a new receivables sale facility of up to $45 million. In addition, we amended and
restated our previous secured revolving credit facility into a new secured revolving credit
facility of up to $35 million, and also amended our consignment and forward contracts facility for
the purchase of silver. We now have approximately $80 million of liquidity available to us,
subject to collateral, excess availability and borrowing base requirements. For the Three-Months Ended April 3, 2005 Compared to the Three-Months Ended April 4, 2004 Pounds shipped declined in the first quarter of 2005 in all business segments. Total
shipments for the first quarter 2005 decreased to 83.8 million pounds as compared to 93.4 million
pounds in the first quarter of 2004, a decrease of 9.6 million pounds or 10.3%. The change in
pounds shipped by business segment was as follows: 18




---



##### Table of Contents



Pounds ShippedFor the Three-Months Ended In thousands, except for
    
    April 3,
    
    
    April 4,
    
    
    
    
    
    
    %percentages
    
    2005
    
    
    2004
    
    
    Decrease
    
    
    DecreaseCommercial products
    
    
    55,455
    
    
    
    61,070
    
    
    
    5,615
    
    
    
    9.2
    %Wholesale products
    
    
    23,411
    
    
    
    25,932
    
    
    
    2,521
    
    
    
    9.7Rod, bar and other products
    
    
    4,893
    
    
    
    6,350
    
    
    
    1,457
    
    
    
    23.0Total
    
    
    83,759
    
    
    
    93,352
    
    
    
    9,593
    
    
    
    10.3
    %
 The decrease in pounds shipped in the commercial products segment was due primarily to
uncertainties in OEM build schedules as manufacturers of residential air conditioning products try
to balance production and inventory requirements between older 10 SEER models and the newly
mandated 13 SEER products, coupled with cooler weather and a slow start to the 2005 cooling
season. The decrease in pounds shipped in the wholesale products segment reflects the impact of
continued record high copper prices on demand and pricing. The decrease in pounds shipped in the
rod, bar and other products segment is mainly due to an organized work slow-down at the Companys
Montreal, Quebec facility by its unionized workers prior to striking on April 4, 2005. Net sales for the first quarter ended April 3, 2005 were $213.5 million compared to $205.8
million in the first quarter of 2004, an increase of $7.7 million or 3.7%. The increase/(decrease)
in sales by business segment was as follows: Net SalesFor the Three-Months Ended $
    
    
    %In thousands, except for
    
    
    
    
    
    
    
    
    
    Increase/
    
    
    Increase/percentages
    
    April 3, 2005
    
    
    April 4, 2004
    
    
    (Decrease)
    
    
    (Decrease)Commercial products
    
    $
    153,070
    
    
    $
    144,926
    
    
    $
    8,144
    
    
    
    5.6
    %Wholesale products
    
    
    45,581
    
    
    
    45,574
    
    
    
    7
    
    
    
    0.0Rod, bar and other products
    
    
    14,831
    
    
    
    15,305
    
    
    
    (474
    )
    
    
    (3.1
    )Total
    
    $
    213,482
    
    
    $
    205,805
    
    
    $
    7,677
    
    
    
    3.7
    %
 Overall, the increase in revenue is due to a combination of higher copper prices and
increased unit fabrication revenues, which were offset partly by decreased volumes. The average
COMEX copper price in the first quarter 2005 was $1.47 per pound versus $1.23 per pound in the
first quarter of 2004. Average unit fabrication revenues increased two cents per pound to $1.02
per pound in 2005, versus $1.00 per pound in 2004. Commercial product sales increased $0.39 per pound, to $2.76 per pound in 2005 versus $2.37
per pound in 2004, a 16.5% increase. The majority of the improvement is due to the rise in metal
prices. However, we also benefited in this product segment from mix and price improvement, with a
five cent per pound increase in fabrication revenues year over year. Wholesale product sales
increased $0.19 per pound, to $1.95 per pound in 2005 versus $1.76 in the first quarter of 2004, a
10.8% increase. This increase in price reflects the rising COMEX price of copper, offset by a
16.5% decrease in fabrication revenue in this product segment. Rod, bar and other product sales
decreased $0.5 million, or 3.1% as a result of a 20% decline in 19




---



##### Table of Contents



volume partly offset by an increase in unit sale price and, to a lesser extent, the impact of
currency translation. Gross profit for the first quarter of 2005 was $10.1 million versus $17.5 million for the
first quarter of 2004, a decrease of $7.4 million or 42.4%. The decrease in gross profit by
business segment was as follows: Gross ProfitFor the Three-Months Ended In thousands, except for percentages
    
    April 3, 2005
    
    
    April 4, 2004
    
    
    $ Decrease
    
    
    % DecreaseCommercial products
    
    $
    9,619
    
    
    $
    14,903
    
    
    $
    5,284
    
    
    
    35.5Wholesale products
    
    
    (124
    )
    
    
    1,746
    
    
    
    1,870
    
    
    NM
    *Rod, bar and other products
    
    
    565
    
    
    
    836
    
    
    
    271
    
    
    
    32.4Total
    
    $
    10,060
    
    
    $
    17,485
    
    
    $
    7,425
    
    
    
    42.4
  *
    
    Not Meaningful (NM) The decrease in gross profit is mainly attributable to the 10.3% decrease in pounds
shipped, combined with weak pricing in the wholesale product segment. In addition, company-wide
reductions in and curtailment of production resulted in the under absorption of fixed costs in the
first quarter of 2005. The organized work slow-down at our Montreal, Quebec facility and the
continued strengthening of the Canadian dollar versus the U.S. dollar also affected gross profit in
the first quarter of 2005. For the first quarter of 2005 and 2004, the percentage of sales made by
our Canadian facilities denominated in U.S. dollars ranged between 50%  55%. Unit manufacturing costs for the first quarter of 2005 were $0.90 cents per pound, which
includes the under absorption of overhead on lower volumes. This 2005 unit manufacturing cost also
includes $1.4 million, or $0.02 per pound, translation impact of the U.S. dollar and improved
selling prices. Manufacturing cost per pound in the first quarter of 2004 was $0.83. Gross profit for the commercial products segment declined in the first quarter of 2005 from
lower volumes, resulting in the under absorption of fixed costs. Gross profit for wholesale
products declined principally due to very weak pricing in both the U.S. and Canada and weaker
demand. Gross profit for rod, bar and other products decreased due to reduced volumes, offset by
gains in our European distribution operations. Selling, general and administrative (SG&A) expenses were $8.3 million in the first quarter
of 2005 versus $9.4 million in the first quarter of 2004, a decrease of $1.1 million or 11.7%. The
decrease in SG&A expense in the first quarter of 2005 as compared to 2004 is mainly the result of
reduced compensation expense, as well as tight controls over other discretionary spending. Interest expense (net) in the first quarter of 2005 was $5.3 million, as compared to $5.1
million in the same period in 2004, an increase of $0.2 million or 3.9%. The increase is mostly
the result of a reduction in the benefits received from our interest rate swap as interest rates
have increased. In addition, the increase in our average borrowings on our secured revolving
credit facility offset the benefits received by the $18.6 million reduction in June/July 2004 of
our 10.5% 20




---



##### Table of Contents



Senior Notes. In the first quarter of 2005, the borrowing rate on our secured revolving
credit facility averaged 6.25% as compared to 5.0% in the first quarter of 2004. A tax benefit was recorded for the first quarter of 2005 of $1.0 million, or approximately 29%
of the taxable loss, as compared to tax expense of $0.4 million, or approximately 21.3% of taxable
income, for the same quarter a year ago. This tax benefit is net of a $0.5 million tax charge
related to the repatriation of $10.2 million form China under the American Jobs Creation Act of
2004, as well a greater proportion of earnings in jurisdictions where the tax rate is lower due to
income tax holidays, and to a greater extent, from losses which were incurred in jurisdictions
where the tax rates are higher. Restructuring and Other Charges At April 3, 2005, remaining reserves for restructuring charges were $0.4 million with respect
to the Booneville, Mississippi facility closure and $0.1 million for severance costs at the
Decatur, Alabama facility related to the relocation of product lines from Decatur to Shawnee,
Oklahoma and Monterrey, Mexico. In the first quarter of 2005, we recorded a net restructuring credit of $0.1 million. This
amount includes $0.1 million in restructuring expense related to severance payments in Canada, $0.1
million of expenses related to the Booneville, Mississippi facility, offset by the forgiveness of
personal property taxes for 2004 related to the Booneville facility of $0.3 million. In the first
quarter of 2004, we incurred restructuring expenses of $0.6 million consisting of $0.3 million for
Booneville, $0.2 million for employee severance and $0.1 million related to our closed Roxboro, NC
facility and other restructuring related issues. Liquidity and Capital Resources The following table sets forth selected information concerning our financial condition: April 3, 2005
    
    
    December 31,(Unaudited)
    
    
    2004(In thousands)Cash and cash equivalents
    
    $
    15,263
    
    
    $
    35,017Working capital
    
    
    208,885
    
    
    
    201,965Total debt
    
    
    242,722
    
    
    
    238,241Current ratio
    
    
    3.17
    
    
    
    3.16
 Sources of Liquidity Our principal sources of liquidity are cash and cash equivalents, cash provided by operations,
and borrowings under our bank credit facility. Cash and cash equivalents.During the first quarter of 2005, cash and cash equivalents
decreased by $19.7 million. Cash and cash equivalents as of April 3, 2005 and December 31, 2004
were $15.3 million and $35.0 million, respectively, of which $12.4 million and $23.8 million,
respectively, were held by subsidiaries located outside the U.S. On February 28, 2005, 21




---



##### Table of Contents



the Company took advantage of the special 85% dividends received deduction on the repatriation
of certain foreign earnings offered under the American Jobs Creation Act of 2004 and repatriated
approximately $10.2 million in previously unremitted earnings from its Chinese subsidiary. These
funds had historically been considered indefinitely invested, and thus unavailable for use in the
U.S. The repatriation of these funds was used to reduce the Companys domestic borrowings. Approximately $3.6 million and $10.9 million of cash included in cash on hand was restricted
as of April 3, 2005 and December 31, 2004, respectively, and is not available for general corporate
use. Restricted cash at April 3, 2005 includes $0.3 million related to deposits for margin calls
on our metal and natural gas hedge program, $1.8 million to secure a letter of credit for the loan
made by the Portuguese government, $0.8 million as collateral to secure the Companys travel and
purchase credit card programs, $0.4 million as a deposit for the Monterrey, Mexico facility lease
and $0.3 million in escrow related to the sale of the Companys former Roxboro, NC facility.
Restricted cash at December 31, 2004 includes $7.6 million related to deposits for margin calls on
our metal and natural gas hedge program, $1.8 million to secure a letter of credit for the loan
made by the Portuguese government, $0.8 million as collateral to secure the Companys travel and
purchase credit card programs, $0.4 million as a deposit for the Monterrey, Mexico facility lease
and $0.3 million in escrow related to the sale of the Companys former Roxboro, NC facility. Cash used for operations.Cash used for operating activities in the first quarter of 2005 was
$22.2 million. Cash used for operating activities in the first quarter of 2004 was $32.6 million.
Increased working capital requirements caused by historically high copper prices continue to
negatively impact cash from operations. Generally, the primary factors affecting our ability to
generate cash from operations are our ability to market and sell our products, our ability to
maintain prices of our products, and our ability to minimize costs and realize operational
efficiencies. Borrowings under our secured revolving credit facility.As of April 3, 2005, there was $7.5
million outstanding under the secured revolving credit facility. We also had approximately $9.2
million of standby letters of credit issued under the secured revolving credit facility and
approximately $21.5 million (subject to a $2.0 million excess availability requirement) in
additional borrowing availability thereunder at April 3, 2005. As of December 31, 2004, there was
$1.0 million outstanding under the secured revolving credit facility. We also had approximately
$9.2 million of standby letters of credit issued under the secured revolving credit facility and
approximately $26.6 million (subject to a $2.0 million excess availability requirement) in
additional borrowing availability thereunder at December 31, 2004. The Companys additional
borrowing capacity available in each of the periods ended April 3, 2005 and December 31, 2004
reflects a reduction in the available amount for the value of the interest rate swap outstanding of
$1.8 million and $0.7 million, respectively. Uses of Liquidity Our principal uses of liquidity are working capital needs, capital expenditures and interest
and principal payments on our debt. 22




---



##### Table of Contents



Working capital needs.As noted above, net cash used by operating activities in the first
quarter of 2005 was $22.2 million, as compared to cash used by operating activities of $32.6
million for the first quarter of 2004. The decrease in cash used by operations during the first
quarter of 2005 is primarily the result of decreased working capital needs caused by historically
high, but more stable copper prices during the first quarter of 2005, and by the decrease in
volume. Due to seasonality, our business typically produces greater sales and requires a greater
use of cash for working capital purposes in the first half of the year, as compared to the second
half of the year when working capital is normally liquidated. Capital expenditures.In the first quarter of 2005, capital expenditures totaled $3.4 million
versus $1.3 million in the first quarter of 2004. Capital expenditures include asset replacement,
environmental and safety compliance, cost reduction, productivity improvement items, and
expenditures for our new Mexico manufacturing facility. The Monterrey, Mexico facility is expected
to contribute to both earnings and cash flow in 2005. Capital spending for Monterrey was
approximately $0.4 million in 2004 and is forecasted to be approximately $2.3 million in 2005. We
currently expect to spend between $10 to $12 million, in total, on capital expenditures in 2005. Payments related to our outstanding debt.In the first quarter of 2005, we made interest
payments on our debt totaling $10.2 million, versus payments of $11.2 million in the first quarter
of 2004. The decrease in interest payments from 2004 to 2005 results from the benefit received by
the $18.6 million buyback in June/July 2004 of our 10.5% Senior Notes. Outlook On February 2, 2005, Standard and Poors Ratings Services (S&P) lowered its rating on our
outstanding debt to B from B+, and placed us on CreditWatch with negative implications due to S&Ps
expectation for very limited liquidity during the first half of 2005. On March 9, 2005, S&P
removed the Company from CreditWatch and re-affirmed its B rating with an outlook of stable. While
the rating downgrade by S&P does not affect the amount or pricing of our existing credit
facilities, the action taken by S&P may affect our ability to obtain additional credit in the
future. With the availability under our receivables sale facility, our amended and restated secured
revolving credit facility, our current cash balances, and anticipated cash flow from continuing
operations, we believe that we will be able to satisfy existing working capital needs, interest
obligations and capital expenditure requirements. Subsequent Events. On April 28, 2005, we established a three-year receivables sale facility of up to $45 million
arranged by Wachovia Bank, National Association (Wachovia); amended and restated our current
secured revolving credit facility with Wachovia to provide for a three-year facility of up to $35
million; and amended and restated our silver consignment and forward contracts 23




---



##### Table of Contents



facility with Fleet Precious Metals Inc., operating as Bank of America Precious Metals
(BAPM). Receivables Sale Facility Structure. Under the receivables sale facility, we will sell accounts receivable in
transactions that will accelerate our receipt of cash from these receivables. Under the facility,
we will first sell certain receivables to DEJ 98 Finance, LLC (DEJ 98 Finance), a newly-formed,
bankruptcy-remote company. DEJ 98 Finance will then further sell undivided interests in these
receivables to Blue Ridge Asset Funding Corporation, an affiliate of Wachovia (Blue Ridge), or,
to the extent that Blue Ridge elects not to purchase, to Wachovia and certain other purchasers (the
Liquidity Banks). The sales of receivables to DEJ 98 Finance and the sales of receivables interests from DEJ 98
Finance to Blue Ridge or the Liquidity Banks are structured as true sales under applicable laws.
Any interests in the sold receivables which are retained by DEJ 98 Finance will not be available to
us or our creditors. Blue Ridge and the Liquidity Banks have no recourse to our assets for losses
resulting from the inability of customers to pay amounts owed on the receivables as they become
due. As long as a termination event under the receivables sale facility has not occurred, we will
conduct the servicing, administration and collection of the receivables as agent on behalf of DEJ
98 Finance, Blue Ridge and the Liquidity Banks. Prior to a termination event, DEJ 98 Finance will
use collections from receivables not otherwise required to be paid to Blue Ridge and the Liquidity
Banks to purchase newly-generated eligible receivables from us on a daily basis. Available Amounts. The amount of cash available to us from Blue Ridge or the Liquidity Banks
will be based upon the amount of eligible receivables and certain reserves required by the
facility. Accordingly, availability may fluctuate over time given changes in eligible receivables
balances and calculation of reserves, but in no case will it exceed the facilitys $45 million
purchase limit. On April 28, 2005, the Company received an initial funding of $12 million under
the facility, leaving approximately $29.8 million in additional current availability thereunder. Costs. Our costs associated with the receivables sale facility will depend on whether
purchases are funded by Blue Ridge or by the Liquidity Banks. To the extent that purchases are
funded by Blue Ridge, our costs will be based on Blue Ridges cost of funds for issuing commercial
paper plus monthly fees based on the average aggregate daily outstanding balance funded by Blue
Ridge multiplied by a per annum rate of between 0.80% to 1.75%, depending on our fixed charge
coverage ratio. To the extent that purchases are not funded by Blue Ridge, but instead are funded
directly by the Liquidity Banks, our costs, payable monthly, will generally accrue on outstanding
balances at either (i) the LIBO rate plus a margin between 1.75% to 3.00%, depending on the fixed
charge coverage ratio, or (ii) the greater of the prime rate or adjusted federal funds rate plus a
margin between 0.00% to 0.50%, depending on our fixed charge coverage ratio. Commitment fees are
payable monthly at a per annum rate of between 0.35% to 0.50%, depending on our fixed charge
coverage ratio, and will accrue on the unused portion of the facility. DEJ 98 Finance will also
pay certain fees and expenses of Wachovia and 24




---



##### Table of Contents



Blue Ridge, including an annual administration fee and audit and legal fees of Blue Ridge and
Wachovia associated with the receivables sales facility. We also paid a one-time structuring fee
to Wachovia at closing. Representations, Warranties, Covenants and Indemnities. The receivable sales facility
contains representations, warranties, covenants and indemnities customary for facilities of this
type. Termination.The receivables sale facility is scheduled to expire on April 28, 2008.
Although Blue Ridge is not committed to purchase undivided ownership interests in receivables, the
Liquidity Banks have committed to (if Blue Ridge does not) purchase receivables interests, on the
terms and subject to the conditions in the receivables sale facility, until this expiration date.
The Company can terminate the receivables sale facility upon 10 days notice without a termination
fee. Wachovia, as agent for Blue Ridge and the Liquidity Banks, can terminate purchases of
receivables interests prior to the scheduled expiration date upon the occurrence of certain events,
including, among others, non-performance by DEJ 98 Finance or us of payments or other agreements
under the receivables sale facility; inaccuracy of the representations and warranties of DEJ 98
Finance or us made in the facility documents; defaults with respect to other obligations of DEJ 98
Finance; defaults with respect to indebtedness in excess of $2.5 million of the Company or its
subsidiaries other than DEJ 98 Finance; bankruptcy or insolvency events regarding us or any of our
subsidiaries; certain statistics concerning collections of the receivables not meeting specified
criteria; certain change of control events; the rendering of judgments in excess of specified
amounts against DEJ 98 Finance, us or our subsidiaries; the termination of any of the transaction
documents, the cessation of any transfers of receivables under the Receivables Sale Agreement or
the ineffectiveness of our performance guarantee; the agents interest in the receivables ceasing
to be valid; the outstanding amount received by us exceeding the $45 million purchase limit or the
aggregate adjusted amount of outstanding receivables; certain events that materially adversely
affect the credit quality of receivables or the Company and its subsidiaries taken as a whole;
certain ERISA events; and defaults in any of the following financial requirements applicable to the
Company and its consolidated subsidiaries:  
    a minimum consolidated EBITDA test measured quarterly on a rolling four quarter
basis, with the minimum consolidated EBITDA requirement equal to $33.5 million for the
first fiscal quarter of 2005 and $27.5 million for the second fiscal quarter of 2005;
    a $15 million annual consolidated capital expenditure limitation;
    a minimum $5 million ongoing excess availability requirement under the secured
revolving credit facility (as described below);
    and at and after any time when outstanding obligations under the secured revolving
credit facility equal or exceed $18 million, a monthly minimum fixed 25




---



##### Table of Contents



charge coverage ratio requirement (which, if such requirement were applicable in
2005, would be 1.0 to 1.0). As of April 28, 2005, we were in compliance with these financial requirements. Amended and Restated Credit Facility In connection with the establishment of the receivables sale facility, we also amended and
restated our existing $40 million secured revolving credit facility pursuant to an Amended and
Restated Credit Agreement. The Amended and Restated Credit Agreement provides us with a maximum aggregate borrowing
availability of $35 million, subject to a $5 million excess availability requirement. The
aggregate amount available under the Amended and Restated Credit Agreement continues to include a
$12 million sub-limit for letters of credit. The terms of the Amended and Restated Credit
Agreement also include: Borrowing Base. At any time before the maturity of the facility, we may draw, repay and
re-borrow amounts available under the borrowing base up to the maximum aggregate availability
discussed above. Generally, the borrowing base equals the sum of (i) 85% of our eligible accounts
receivable (other than Wolverine Joining Technologies, LLC) and (ii) 60% of our eligible inventory
(eligible inventory attributable to Wolverine Joining Technologies, LLC is capped at $3 million).
The administrative agent may establish reserve requirements, and the reserve requirements and
eligibility standards may be adjusted during the term. Interest and Fees. Under the Amended and Restated Credit Agreement, borrowings generally bear
interest, at our option, at the following rates (i) the Eurodollar rate or the LMIR rate plus a
margin between 1.75% to 3.00%, depending on the fixed charge coverage ratio of the Company and its
consolidated subsidiaries, or (ii) the greater of the prime rate or adjusted federal funds rate
plus a margin between 0.00% to 0.50%, depending on the fixed charge coverage ratio. Accrued
interest is payable monthly on outstanding principal amounts, quarterly in the case of Eurodollar
loans. In addition, fees and expenses are payable based on unused borrowing availability (0.25% to
0.50% per annum, depending on the fixed charge coverage ratio), outstanding letters of credit
(1.75% to 3.00% fee, depending on the fixed charge coverage ratio) and administrative and legal
costs. Maturity. The maturity date of the secured revolving credit facility under the Amended and
Restated Credit Agreement is April 28, 2008, at which time all amounts borrowed under the facility
will be due and outstanding letters of credit must be cash collateralized. The facility may be
terminated early upon the occurrence of an event of default. Security. The obligations under the Amended and Restated Credit Agreement are secured by (i)
a first priority lien on substantially all of our assets, including inventory and accounts
receivable not sold in the receivables sale facility (but excluding real estate and equipment),
(ii) a first priority pledge of the capital stock of existing and future first-tier foreign
subsidiaries of the Company and of DEJ 98 Finance, and (iii) a springing first priority lien upon
our equipment 26




---



##### Table of Contents



which will be granted only at such time as the outstanding obligations under the Amended and
Restated Credit Agreement reach $18 million. Covenants. The Amended and Restated Credit Agreement continues to contain customary
representations and warranties, as well as covenants which, among other things, limit our ability
to incur additional indebtedness and liens; enter into transactions with affiliates; make
acquisitions; pay dividends; redeem or repurchase capital stock or senior notes; make investments
or loans; make negative pledges; consolidate, merge or effect asset sales; or change the nature of
our business. The Amended and Restated Credit Agreement adjusted the financial covenants
applicable to us at April 3, 2005 and going forward are the same as the financial requirements
under the receivables sale facility as described above. Events of Default and Acceleration.The secured revolving credit facility contains customary
events of default for credit facilities of this size and type, and includes, without limitation,
payment defaults; defaults in performance of covenants or other agreements contained in the
transaction documents; inaccuracies in representations and warranties; certain defaults,
termination events or similar events with respect to the receivables sale facility or the silver
consignment and forward contracts facility; certain defaults with respect to our outstanding senior
notes or other indebtedness in excess of $2.5 million; certain bankruptcy or insolvency events; the
rendering of certain judgments in excess of $2.5 million; certain ERISA events; certain change in
control events and the defectiveness of any liens under the secured revolving credit facility.
Obligations under the secured revolving credit facility may be accelerated upon the occurrence of
an event of default. On April 28, 2005, we repaid outstanding borrowings of $9 million under the secured revolving
credit facility using proceeds from the initial funding of the receivables sale facility. As of
April 28, 2005, $9.3 million of letters of credit were outstanding under the secured revolving
credit facility, leaving approximately $21.1 million (subject to the $5 million excess availability
requirement) in additional borrowing availability thereunder. Amended and Restated Consignment Agreement In connection with the establishment of the receivables sale facility and the amendment and
restatement of the secured revolving credit facility, we also amended and restated our existing
silver consignment and forward contracts facility with BAPM pursuant to an Amended and Restated
Consignment Agreement. Under the Amended and Restated Consignment Agreement, BAPM continues to extend to us a silver
consignment facility, pursuant to which BAPM consigns certain amounts of silver upon request, as
well as a silver forward contracts facility, pursuant to which we may contract to purchase certain
amounts of silver from BAPM in the future for a set price. The Amended and Restated Consignment
Agreement adjusts the maximum value of consigned silver available to us at any time under the
consignment facility to be the lesser of $17 million dollars or the value of 2.4 million fine troy
ounces of silver, in either case less an amount equal to 20% of the face value of all outstanding
forward contracts under the forward contract facility. The forward contract limit remains at
$700,000, which permits us to have up to $3.5 million in aggregate face value of 27




---



##### Table of Contents



forward contracts outstanding under this facility. The remaining terms of the Amended and
Restated Consignment Agreement include: Fees.We pay BAPM a market premium per troy ounce of consigned silver as well as a floating
consignment fee on consigned silver at an annual rate fixed by BAPM from time to time (currently
3.25%). We may elect, in certain circumstances, to pay a fixed consignment fee on specific
quantities and forms of consigned silver at a market rate reflective of BAPMs cost of funding.
When silver is purchased and withdrawn from consignment, whether upon election or sale to customers
in the ordinary course of business, we are obligated to either pay BAPM the purchase price of the
silver or deliver an equal amount of silver to BAPMs account. We may also enter into floating
forward contracts which bear interest payable on a monthly basis at a per annum rate equal to the
prime rate minus 1-1/2%, or hybrid forward contracts under which the purchase price includes the
carrying cost. Security. To secure our obligations under the Amended and Restated Consignment Agreement,
BAPM has a first priority security interest in the silver subject to consignment or outstanding
forward contracts and any proceeds and products thereof (other than receivables and associated
collections sold by us in connection with the receivables sale facility). We have also placed
money in escrow to cover the costs of refining, processing and recovery of the consigned silver. Representations, Warranties and Covenants. The Amended and Restated Consignment Agreement
continues to include customary representations, warranties and covenants and to incorporate by
reference all of the representations, warranties and covenants contained in the Amended and
Restated Credit Agreement, as discussed above. The Amended and Restated Consignment Agreement
adjusted the financial covenants applicable to us at April 3, 2005 and going forward are the same
as the financial requirements under the receivables sale facility as describe above. Termination and Events of Default. The consignment facility and/or the forward contracts
facility, and BAPMs obligations thereunder, may be terminated by BAPM upon thirty (30)
days prior written notice. Upon such termination, all sums outstanding under the relevant facility
will become due and payable and, upon termination of the consignment facility, any
consigned silver that has not been purchased and paid for must be returned to BAPM. In addition,
upon the occurrence of any of the events of default contained in the Amended and Restated
Consignment Agreement, BAPM may terminate its obligations under the Amended and Restated
Consignment Agreement and accelerate all of our obligations thereunder (including the return of any
outstanding consigned silver). These events of default include, among others, defaults in payment
or performance of obligations under any transaction agreement or to BAPM or Fleet National Bank or
any affiliate; inaccuracy of representations or warranties; certain defaults, termination events or
similar events with respect to the receivables sale facility, the secured revolving credit
facility, our outstanding senior notes or other indebtedness in excess of $2.5 million; certain
bankruptcy or insolvency events; certain material loss, theft or damage to, or attachment of, the
consigned silver; the determination by BAPM in good faith that we
have suffered a material adverse change; and certain change in control events. 28




---



##### Table of Contents



As of May 1, 2005, the value of consigned silver in our inventory under the
consignment facility was $12.2 million. The value of silver committed under the forward contracts
facility was $2.0 million. Environmental Matters We are subject to extensive environmental regulations imposed by local, state, federal and
provincial authorities in the United States, Canada, China, Portugal and Mexico with respect to air
emission, discharges to waterways, and the generation, handling, storage, transportation, treatment
and disposal of waste material, and we have received various communications from regulatory
authorities concerning environmental matters. We have accrued undiscounted estimated environmental
remediation costs of $0.9 million as of April 3, 2005, consisting primarily of $0.7 million for the
Ardmore, Tennessee facility and $0.2 million for the Decatur, Alabama facility. Based upon
information currently available, we believe that the ultimate remediation costs for 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 these environmental matters could differ
materially from the amounts we estimated and have accrued at April 3, 2005, and could result in
additional exposure if these environmental matters are not resolved as anticipated. Decatur, Alabama In 1999, we entered into a Consent Order under Section 3008(h) of the Resource Conservation
and Recovery Act. This order incorporated the Corrective Measures Study, commonly referred to as
the CMS, submitted to the Environmental Protection Agency (the EPA) regarding a waste burial site
at the Decatur, Alabama facility. The order also included an upgrade to an existing chrome ground
water remediation system. Part of the ground water contamination plume had previously been detected underneath a section
of property not owned by us. In December 2002, a sample taken from the adjoining property
indicated there were no longer detectable levels of chrome beyond our property. We believe that
due to our remediation efforts, this plume has retracted and will continue to do so. In July of 2000, we notified the EPA and the Alabama Department of Environmental Management
(ADEM) that low levels of volatile organic compounds and petroleum hydrocarbons had been detected
in the ground water at the Decatur, Alabama facility during an expansion of the facility. On June
13, 2001, we received a letter from ADEM stating that a preliminary assessment would be
forthcoming, but no further correspondence has been received to date. If and when the assessment
is received, we will take the necessary steps to comply with the findings of the assessment, and if
needed, to re-assess the sufficiency of our reserves. 29




---



##### Table of Contents



The estimated remaining assessment, monitoring, remedial, legal and other costs related to the
environmental matters at our Decatur, Alabama facility are $0.2 million as of April 3, 2005. Ardmore, Tennessee On December 28, 1995, we entered into a Consent Order and Agreement with the Tennessee
Division of Superfund (Tennessee Division), relating to the Ardmore, Tennessee facility, under
which we agreed to conduct an assessment on whether volatile organic compounds detected in and near
the municipal drinking water supply are related to the Ardmore facility and, if necessary, to
undertake an appropriate response. That site assessment revealed contamination, including elevated
concentrations of volatile organic compounds, in the soil in areas of the Ardmore facility, and
also revealed elevated levels of certain volatile organic compounds in the shallow residuum ground
water zone at the Ardmore facility. The water currently delivered to residents by the municipality is treated prior to human
consumption, and thus does not contain volatile organic compounds above acceptable drinking water
standards. We do not know whether the municipality may have delivered untreated water to its water
consumers prior to the installation of the water treatment process. However, due to dilution with
non-contaminated water, which we believe occurs in the operation of the municipal well system, it
is unlikely that any consumer was exposed in the past to volatile organic compounds above
acceptable drinking water standards. No notice or threat of any claim has been made from the
municipality or its residents with respect to the drinking water. We have proposed to the Tennessee Division that an interim corrective measure be implemented
at the facility. The interim measure will consist of a system to extract water and vapors from the
areas of highest concentration. The system can be expanded to conduct additional remediation
efforts, if required. Based on recent testing efforts at the facility and available information,
it is estimated that costs of between $0.7 million and $2.0 million will be incurred to complete
the investigation and develop the remediation plans for this site. Altoona, Pennsylvania On August 26, 1999, we entered our Altoona, Pennsylvania facility into the State of
Pennsylvania Department of Environmental Protection Act II Program. This program addresses
contamination issues related to closed hazardous waste lagoons and oil contamination of soil. The
previous site owner closed the hazardous waste lagoons at this site in 1982. A Remedial
Investigation/Feasibility Study (RIFS) was submitted to the Pennsylvania Department of
Environmental Protection on April 20, 2004. Remaining costs which may be needed to complete the
investigation phase of the program are estimated to be $2,000. No active remediation is
anticipated at this site. However, we are still awaiting a response from the Pennsylvania
Department of Environmental Protection to our RIFS. 30




---



##### Table of Contents



Risk Factors That May Affect Future Performance 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. Detailed information concerning risk factors is contained under Risk Factors That
May Affect Future Performance in Part I, Item 1 of our Annual Report on Form 10-K for the year ended
December 31, 2004, which information is incorporated herein by reference and which may be revised
in future Securities and Exchange Commission filings by the Company. Additional risk factors are
described below and may appear elsewhere in 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. Our significant debt levels may limit our future ability to obtain additional financing and to
pursue business opportunities. As of April 3, 2005, our total debt was $242.7 million, which represented approximately 54% of
our total capitalization. On April 28, 2005, we entered into a new receivables sale agreement,
amended and restated our secured revolving credit agreement and our consignment and forward
contracts facility to provide additional liquidity. Under these new liquidity facilities and the
indentures governing our outstanding Senior Notes, our ability to obtain additional debt and/or
obtain additional sources of financing is limited. This may hinder our future ability to pursue
additional business opportunities. Despite our significant debt levels, we and our subsidiaries may be able to incur substantially
more debt. This could further exacerbate the risks described above. We and our subsidiaries may be able to incur substantial additional indebtedness in the
future. Although the agreements governing our receivables sale facility, amended and restated
secured revolving credit facility, amended and restated consignment and forward contracts facility
and indentures governing our outstanding Senior Notes contain restrictions on the incurrence of
additional indebtedness, these restrictions are subject to a number of qualifications 31




---



##### Table of Contents



and exceptions, and the indebtedness incurred in compliance with these restrictions could be
substantial. The amended and restated credit agreement entered into on April 28, 2005 governing our secured
revolving credit facility permits us to borrow up to $35.0 million (subject to a $5.0 million
excess availability requirement) as long as we meet certain inventory levels and comply with
financial and other covenants. Further, although the covenants in the credit agreement
generally prohibit us from incurring additional indebtedness, the limited exceptions to this
restriction would permit the Company to incur specific types of indebtedness, for example, up to
$2.5 million in purchase money indebtedness to finance the purchase of fixed assets. The credit
agreement also contains a general exception to this restriction for the incurrence of up to $5.0
million in additional unsecured debt under certain conditions. The covenants contained in the indenture governing our 10.5% Senior Notes do not limit the
additional unsecured indebtedness we may incur so long as we have met the required coverage ratio, which
generally measures our ability to cover our ongoing debt service obligations with our earnings, and
no default has occurred nor is it continuing. These restrictions do not prevent us from incurring
obligations that do not constitute indebtedness. To the extent new debt is added to our and our
subsidiaries currently anticipated debt levels, the substantial leverage risks described above
would increase. We may not have access to funds under our receivables sale facility, our amended and restated
secured revolving credit facility, or our amended and restated consignment and forward contracts
facility if we are not able to meet the conditions in those facilities, or to renew on acceptable
terms upon expiration of the receivables sale and credit facilies in April 2008, or to obtain alternative financing to
satisfy working capital needs. We view our existing receivables sale facility, amended and restated secured revolving
credit facility and amended and restated consignment and forward contract facility as sources of
available liquidity. These facilities contain various conditions, covenants and representations
with which we must be in compliance in order to access funds. Should
we need access to funds under
these facilities in the future, there can be no assurances that we will be in compliance with the
conditions, covenants and representations required in these
facilities. By their terms, the receivables sale and credit facilities expire in April 2008. We anticipate renewing these facilities on terms at
least as favorable as the existing facilities, but there can be no assurances of renewal or the
terms on which we may renew. We, and some of our major customers, have unionized employees and have been and continue to be
adversely affected by labor disputes affecting us or our major customers. Some of our employees and some employees of our major customers are unionized. Our unionized
employees are hourly workers located at our Montreal, Quebec facility where various copper and
copper alloy tube products and substantially all of our rod and bar products are manufactured. The
current collective bargaining agreement with the union representing these employees expired on
March 23, 2005. Because we and the union representing employees at our Montreal facility were
unable to reach a new labor agreement, the unionized employees went on 32




---



##### Table of Contents



strike on April 4, 2005. Prior to striking, the unionized employees were engaged in an
organized work slow-down at the facility thereby disrupting shipments
to customers. The unionized employees rejected the Companys
offer on May 13. We are
currently in negotiations with this union regarding a new collective bargaining agreement.
However, while these employees are on strike, our ability to produce product in sufficient
quantities or on a timely basis may affect relationships with customers and could otherwise
negatively affect our business. Increasing competition from Chinese competitors who sell both within China and for export to other
parts of the world may negatively impact our business and adversely affect our revenue and
operating results. We face increased competition for the products we manufacture within China. Due to our relative
market share for sales within China, we are not a price leader, and therefore, we are subject to
continuing competitive pricing pressures in this country. Further, as Chinese competitors continue
to increase their exports into the U.S. and other markets we serve world-wide, our ability to
maintain price, market share and operating margins may be negatively impacted. Continued historically high copper prices are having, and may continue to have, a substantial
impact upon both demand and pricing for our wholesale products which
may continue to negatively
impact our business and adversely affect our revenues and operating margins. The historically high and unstable price of copper has reduced demand for copper wholesale
products, and has created excess capacity amongst manufacturers. We are not a market leader in
this segment. As larger competitors strive to maintain market share, we see increasing pricing
pressures which have negatively affected, and may continue to negatively affect, our business and
operating results. 33




---



##### Table of Contents



Subsequent Events. The Companys unionized employees at its Montreal Quebec facility remain on strike, having
rejected the Companys offer in a vote taken on May 13, 2005. The Companys unionized employees,
who are members of the United Steelworkers of America Local 6932 known locally in Quebec as the
FTQ-Syndicat des Metallos, have been on strike since April 4. Prior to striking, the Union engaged
in an organized work slow-down, which disrupted shipments to customers out of the Montreal facility
and impacted productivity during the first quarter of 2005. The Company and the Union continue to
meet in order to resolve the strike, but remain at an impasse over several issues, including
differences over benefit plans, outsourcing and job classifications. While the unionized employees are on strike, the Company is undertaking several initiatives to
mitigate the negative financial impact of the strike on its second quarter results. These include
utilizing non-union personnel at the plant to engage in limited production, moving production to
other Wolverine facilities at additional shipping and other costs, pushing out customer order due
dates, and purchasing finished product from outside sources. In addition, some customers have
cancelled orders. The longer the strike continues, the greater the likelihood of additional
cancellations. While the strike may have a significant effect on the Companys second quarter results, due to
the amount of time remaining in the second quarter and the uncertainty regarding when the strike
will be settled, the Company is, at this time, unable to quantify what effects the strike will have
on its second quarter results. 34




---



##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk We are exposed to various market risks, including changes in interest rates, 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. We do not enter
into derivatives or other financial instruments for trading or speculative purposes. Commodity Price Risks In most cases, the price our customers pay for a product includes a metal charge that
represents the market value of the copper used in that product as of the date we ship the product
to the customer. 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 SFAS 133. As of April 3,
2005, we had entered into contracts hedging the raw material requirements for committed and
anticipated future customer sales through December 2006 having an aggregate notional value of $9.6
million. At April 4, 2004, we had entered into contracts hedging the raw material requirements for
committed and anticipated future sales through December 2004 having an aggregate notional value of
$15.4 million. The fair value of these derivative assets is recognized in prepaid expenses and
other in the Consolidated Balance Sheet. For the first quarter of 2005, the ineffectiveness
associated with this type of cash flow hedge was a gain of $0.1 million. The hedge ineffectiveness
was recognized in the Consolidated Statement of Operations under cost of goods sold. At April 3,
2005 and April 4, 2004, the net deferred amount recognized in accumulated other comprehensive loss
was a net gain of $1.2 million and $7.0 million, respectively. The amount reclassified out of
accumulated other comprehensive loss and recognized in earnings in the first quarter of 2005 was a
gain of $0.5 million. The Company expects $1.0 million of the unrecognized gain in accumulated
other comprehensive loss to be recognized in earnings over the next 12 months. A 10% decline in
commodity prices would reduce the estimated fair value of the outstanding contracts at April 3,
2005 by $1.0 million. 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
this price is fixed, and the time the copper is delivered. In order to reduce our market exposure
to price decreases, 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 counter party at a later date. We account for these transactions as cash flow
hedges under SFAS 133. At April 3, 2005, we had entered into contracts hedging the raw material
requirements for committed future purchases through May 2005 having an aggregate notional value of
$18.2 million. At April 4, 2004, we had entered into contracts hedging the raw material
requirements for committed future purchases through June 2004 having an aggregate notional value of
$4.3 million. The fair value of these derivative liabilities is recognized in accrued liabilities
in the Consolidated Balance Sheet. For the first quarter 2005, the ineffectiveness associated with
this type of cash flow hedge was a loss of $0.5 million. The 35




---



##### Table of Contents



hedge ineffectiveness was recognized in the Consolidated Statement of Operations under cost of
goods sold. At April 3, 2005 and April 4, 2004, the net deferred amount recognized in accumulated
other comprehensive loss was a net loss of $6 thousand and $0.2 million, respectively. The amount
reclassified out of accumulated other comprehensive loss and recognized in earnings in the first
quarter of 2005 was a loss of $0.9 million. The Company expects $0.1 million of this loss to be
transferred out of accumulated other comprehensive loss and recognized in earnings over the next 2
months. A 10% increase in commodity prices would further increase the loss on the outstanding
contracts at April 3, 2005 by another $1.8 million. We have entered into commodity forward contracts to sell copper having an aggregate notional
value of $64.4 million at April 3, 2005 in order to hedge or protect the value of the copper
carried in our inventory from price decreases. At April 4, 2004, we had entered into commodity
forward contracts to sell copper having an aggregate notional value of $53.5 million. During the
first three quarters of 2004, these forward contracts were not designated as hedges, and were
marked to market each period, with the corresponding gains and losses recorded in cost of goods
sold. Beginning in the fourth quarter of 2004, we began accounting for these forward contracts as
fair value hedges under SFAS 133. The fair value of these derivative liabilities is recognized in
accrued liabilities in the Consolidated Balance Sheet. For the first quarter of 2005, the
ineffectiveness associated with this type of fair value hedge was a net loss of $0.5 million. The
hedge ineffectiveness was recognized in the Consolidated Statement of Operations under cost of
goods sold. The estimated fair value of the contracts outstanding based upon forward rates at
April 3, 2005 was a net loss of approximately $1.3 million and $0.3 million at April 4, 2004. A
10% increase in commodity prices would further increase the estimated loss on the outstanding
contracts by another $6.6 million at April 3, 2005. We have also entered into commodity futures contracts to purchase natural gas to reduce our
risk of future price increases. We account for these transactions as cash flow hedges under SFAS
133. The fair value of these derivative assets is recognized in prepaid expenses and other assets
in the Consolidated Balance Sheet. At April 3, 2005, we had commodity futures contracts to
purchase natural gas for the period May 2005 through December 2006 with an aggregate notional
amount of $7.7 million. As of April 4, 2004, we had commodity futures contracts to purchase
natural gas for the period May 2004 through December 2004 with an aggregate notional amount of $4.0
million. For the first quarter of 2005, the ineffectiveness associated with this type of cash flow
hedge was a gain of $0.7 million. At April 3, 2005 and April 4, 2004, the net deferred gain
recognized in accumulated other comprehensive loss was a net gain of $2.3 million and $1.0 million,
respectively. The Company expects $1.8 million of this net gain to be transferred out of
accumulated other comprehensive loss and recognized in earnings over the next 12 months. The
effect of a 10% decline in natural gas commodity prices at April 3, 2005 would result in the
decline in value of the futures contracts of approximately $1.0 million. Foreign Currency Exchange Risk We are subject to 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. We do not enter
into forward exchange contracts for speculative purposes. These forward currency 36




---



##### Table of Contents



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 4 months.
As of April 3, 2005, we had forward exchange contracts outstanding to sell foreign currency with a
notional amount of $1.7 million. The estimated fair value of these forward exchange contracts to
sell foreign currency was a gain in the amount of $7 thousand. The potential loss in fair value
for these forward exchange contracts from a 10% adverse change in quoted foreign currency exchange
rates would be a loss of approximately $0.3 million. We also use foreign currency forward exchange contracts to hedge our inventory currency risk
in Canada. These contracts are denominated in U.S. and Canadian dollars. As of April 3, 2005, we
had foreign currency forward exchange contracts outstanding through December 2004 to purchase
foreign currency with a notional amount of $8.1 million. As of April 3, 2005, we had an unrealized
gain of $0.2 million associated with these foreign currency forward exchange contracts. The effect
of a 10% adverse change in exchange rates would be a loss of approximately $0.8 million. Interest Rate Risk In October 2002, we entered into an interest rate swap transaction on $50.0 million of our
7.375% Senior Notes. The interest rate swap calls for semi-annual interest payments on February 1
and August 1, a floating interest rate based upon the six-month LIBOR rate plus a spread of 3.76%,
and an August 1, 2008 maturity date. The interest rate swap resulted in an increase in interest
expense for the three-months ended April 3, 2005 of $45 thousand and a reduction of interest
expense for the three-months ended April 4, 2004 of $284 thousand. As of April 3, 2005, the fair market value of the interest rate swap was $1.8 million, which
was included in other liabilities with a corresponding decrease to the hedged debt. Equal and
offsetting unrealized gains and losses are included in other income expense. For the three-months
ended April 3, 2005 and April 4, 2004, the interest rate swap effectively converted $50 million of
fixed rate 7.375% Senior Notes to variable rates of 7.74% and 6.54%, respectively. 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. 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. 37




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of management, including our Chief Executive
Officer, Dennis J. Horowitz, and our Chief Financial Officer, Thomas B. Sabol, 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, Messrs. Horowitz and Sabol 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 Messrs. Horowitz and Sabol, there has been no change in our internal control over
financial reporting during the first quarter of 2005 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting. 
 PART II. OTHER INFORMATION 
 Item 5. Other Information On February 10, 2005, our Board of Directors ratified the Compensation Committees
determination of discretionary bonuses for 2004 for each of the following named executive officers: Name and Position
    2004 Discretionary BonusDennis J. Horowitz
    
    $
    432,000Chairman and Chief Executive OfficerJohann R. Manning, Jr.
    
    $
    165,360President and Chief Operating OfficerJames E. Deason(1)
    
    $
    117,222Executive Vice President,
Chief Financial Officer and SecretaryKeith I. Weil
    
    $
    85,218Senior Vice President,
International and Strategic DevelopmentMassoud Neshan
    
    $
    38,619Senior Vice President, Technology
  (1)
    
    Mr. Deason retired effective March 31, 2005. Upon this retirement, Thomas B. Sabol assumed the
title of Senior Vice President, Chief Financial Officer and Secretary. In addition, on February 10, 2005, our Board of Directors ratified the decision of the
Compensation Committee to increase the annual base salary of Johann R. Manning. Jr., President and
Chief Operating Officer, from $226,208 to $312,000, which increase was made retroactive to October
1, 2004. This adjustment was made to reflect his then current job responsibilities and comparable
market value resulting from a compensation study conducted on behalf of the compensation committee. 
 Item 6. Exhibits (a) Exhibits 10.1
    
    Consultant Agreement, dated as of February 10, 2005, by and between Wolverine
Tube, Inc. and James E. Deason (incorporated by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K filed on February 16, 2005).10.2
    
    Form of Director Indemnification Agreement (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K filed on February 16, 2005).10.3
    
    Form of Officer Indemnification Agreement (incorporated by reference to Exhibit
10.3 to the Companys Current Report on Form 8-K filed on February 16, 2005).10.4
    
    Amendment No. 6 to Credit Agreement, dated as of February 23, 2005, by and
among Wolverine Tube, Inc., its U.S. and Canadian Subsidiaries, the lenders named
therein, Wachovia Bank, National Association, as Administrative Agent, and Congress
Financial Corporation (Canada), as Canadian Agent (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K filed on March 1, 2005).10.5
    
    Receivables Sale Agreement, dated as of April 28, 2005, among the Company,
Small Tube Manufacturing, LLC, Tube Forming, L.P. and DEJ 98 Finance,
LLC (incorporated by reference to Exhibit 10.5 to the Companys
Current Report on Form 8-K filed on May 4, 2005.)
 38




---



##### Table of Contents



(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form
8-K filed on May 4, 2005).10.6
    
    Receivables Purchase Agreement, dated as of April 28, 2005, among DEJ 98
Finance, LLC, Wolverine Finance, LLC, the Company, Blue Ridge Asset Funding
Corporation, the liquidity banks from time to time party thereto and Wachovia Bank,
National Association, as agent (incorporated by reference to Exhibit 10.2 to the
Companys Current Report on Form 8-K filed on May 4, 2005).10.7
    
    Amended and Restated Credit Agreement, dated as of April 28, 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 10.3 to the
Companys Current Report on Form 8-K filed on May 4, 2005).10.8
    
    Amended and Restated Consignment Agreement, dated as of April 28, 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 10.4
to the Companys Current Report on Form 8-K filed on May 4, 2005).10.9
    
    Salaries and Bonuses of Named
Executive Officers10.10
    
    Non-Employee Director Compensation31.1
    
    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 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:  May 13, 2005
    By:
    /s/ Thomas B. SabolName:
    
    Thomas B. SabolTitle:
    Senior Vice President, Chief
Financial Officer and Secretary 39