##### 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 2, 2006
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 for the transition period from  to.
 COMMISSION FILE NUMBER 1-12164
 WOLVERINE TUBE, INC.
  Delaware
    
    63-0970812(State of Incorporation)
    
    (IRS Employer Identification No.)200 Clinton Avenue West, Suite 1000
Huntsville, Alabama
    
    35801(Address of Principal Executive Offices)
    
    (Zip Code)
 (256) 353-1310
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
 o þ
  Class
    
    Outstanding as of May 9, 2006Common Stock, $0.01 Par Value
    
    15,068,207 Shares




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##### 



FORM 10-Q
 QUARTERLY REPORT
 TABLE OF CONTENTS
 Page No.PART IItem 1.
    
    Financial StatementsCondensed Consolidated Statements of Operations (Unaudited)  Three months ended April 2, 2006 and April 3, 2005
    
    
    1Condensed Consolidated Balance Sheets  April 2, 2006 (Unaudited) and December 31, 2005
    
    
    2Condensed Consolidated Statements of Cash Flows (Unaudited)  Three months ended April 2, 2006 and April 3, 2005
    
    
    3Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    46Item 4.
    
    Controls and Procedures
    
    
    50PART IIItem 1A
    
    Risk Factors
    
    
    50Item 2
    
    Unregistered Sales of Securities and Use of Proceeds
    
    
    51Item 6.
    
    Exhibits
    
    
    51EX-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




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##### Table of Contents



PART
I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Wolverine Tube, Inc. and Subsidiaries
 
 Condensed Consolidated Statements of Operations
  Three months ended(In thousands except per share amounts)
    
    April 2, 2006
    
    
    April 3, 2005Net sales
    
    $
    298,312
    
    
    $
    213,482Cost of goods sold
    
    
    287,430
    
    
    
    203,422Gross profit
    
    
    10,882
    
    
    
    10,060Selling, general and administrative expenses
    
    
    7,630
    
    
    
    8,308Restructuring benefit
    
    
    (14
    )
    
    
    (82
    )Operating income
    
    
    3,266
    
    
    
    1,834Other expenses:Interest expense, net
    
    
    5,833
    
    
    
    5,322Amortization and other, net
    
    
    709
    
    
    
    12(Loss) before income taxes
    
    
    (3,276
    )
    
    
    (3,500
    )Income tax benefit
    
    
    (1,159
    )
    
    
    (1,018
    )Net (loss)
    
    $
    (2,117
    )
    
    $
    (2,482
    )Per share data:(Loss) per common share  basic
    
    $
    (0.14
    )
    
    $
    (0.17
    )Basic weighted average number of common shares
    
    
    15,059
    
    
    
    14,965(Loss) per common share  diluted
    
    $
    (0.14
    )
    
    $
    (0.17
    )Diluted weighted average number of common and common equivalent shares
    
    
    15,059
    
    
    
    14,965
 The accompanying notes are an integral part of these condensed consolidated financial
statements.
 1




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Wolverine Tube, Inc. and Subsidiaries
 
 Condensed Consolidated Balance Sheets
 April 2,2006
    
    
    December 31,(In thousands except share and per share amounts)
    
    (Unaudited)
    
    
    2005AssetsCurrent assetsCash and cash equivalents
    
    $
    22,910
    
    
    $
    27,329Accounts receivable, net of allowances for doubtful accounts of
$0.6 million in 2006 and $0.4 million in 2005
    
    
    111,319
    
    
    
    104,186Inventories
    
    
    154,119
    
    
    
    146,705Prepaid expenses and other
    
    
    10,340
    
    
    
    10,209Total current assets
    
    
    298,688
    
    
    
    288,429Property, plant and equipment, net
    
    
    178,906
    
    
    
    181,238Deferred charges, net
    
    
    7,285
    
    
    
    7,726Goodwill, net
    
    
    77,107
    
    
    
    77,064Deferred income taxes
    
    
    14,060
    
    
    
    13,469Notes receivable
    
    
    813
    
    
    
    831Investments
    
    
    48
    
    
    
    8Total assets
    
    $
    576,907
    
    
    $
    568,765Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    86,786
    
    
    $
    71,802Accrued liabilities
    
    
    34,162
    
    
    
    34,952Short-term borrowings
    
    
    477
    
    
    
    248Deferred income taxes
    
    
    464
    
    
    
    Total current liabilities
    
    
    121,889
    
    
    
    107,002Long-term debt
    
    
    237,663
    
    
    
    234,920Pension liabilities
    
    
    37,813
    
    
    
    42,889Postretirement benefit obligation
    
    
    19,642
    
    
    
    19,722Accrued environmental remediation
    
    
    900
    
    
    
    930Total liabilities
    
    
    417,907
    
    
    
    405,463Stockholders equityCommon stock, par value $0.01 per share; 40,000,000 shares
authorized; 15,055,767 and 15,058,803 shares issued and
outstanding as of April 2, 2006 and December 31, 2005,
respectively
    
    
    151
    
    
    
    151Additional paid-in capital
    
    
    91,520
    
    
    
    91,711Retained earnings
    
    
    83,617
    
    
    
    85,734Unearned compensation
    
    
    
    
    
    
    (324
    )Accumulated other comprehensive (loss), net of tax
    
    
    (16,288
    )
    
    
    (13,970
    )Total stockholders equity
    
    
    159,000
    
    
    
    163,302Total liabilities and stockholders equity
    
    $
    576,907
    
    
    $
    568,765
 The accompanying notes are an integral part of these condensed consolidated financial
statements.
 2




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Wolverine Tube, Inc. and Subsidiaries
 
 Condensed Consolidated Statements of Cash Flows
  Three months ended(In thousands)
    
    April 2, 2006
    
    
    April 3, 2005Operating ActivitiesNet (loss)
    
    $
    (2,117
    )
    
    $
    (2,482
    )Adjustments to reconcile net (loss) to net cash used for operating activities:Depreciation and amortization
    
    
    4,258
    
    
    
    4,293Deferred income taxes
    
    
    23
    
    
    
    (654
    )Other non-cash items
    
    
    (1,391
    )
    
    
    1,395Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (34,276
    )
    
    
    (21,042
    )Sale of accounts receivable
    
    
    26,000
    
    
    
    Inventories
    
    
    (7,286
    )
    
    
    (6,325
    )Income taxes receivable
    
    
    (1,519
    )
    
    
    (704
    )Prepaid expenses and other
    
    
    904
    
    
    
    (4,250
    )Accounts payable
    
    
    14,708
    
    
    
    16,747Accrued liabilities including pension,
postretirement benefit and environmental
    
    
    (5,948
    )
    
    
    (9,171
    )Net cash used for operating activities
    
    
    (6,644
    )
    
    
    (22,193
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (1,236
    )
    
    
    (3,406
    )Disposals of property, plant and equipment
    
    
    17
    
    
    
    51Net cash used for investing activities
    
    
    (1,219
    )
    
    
    (3,355
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (49
    )
    
    
    (2
    )Net borrowing on revolving credit facilities
    
    
    3,221
    
    
    
    6,500Issuance of common stock
    
    
    57
    
    
    
    403Other financing activities
    
    
    (2
    )
    
    
    (857
    )Net cash provided by financing activities
    
    
    3,227
    
    
    
    6,044Effect of exchange rate on cash and cash equivalents
    
    
    217
    
    
    
    (250
    )Net decrease in cash and cash equivalents
    
    
    (4,419
    )
    
    
    (19,754
    )Cash and cash equivalents at beginning of period
    
    
    27,329
    
    
    
    35,017Cash and cash equivalents at end of period
    
    $
    22,910
    
    
    $
    15,263
 The accompanying notes are an integral part of these condensed consolidated financial
statements.
 3




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Wolverine Tube, Inc. and Subsidiaries
 
 Notes to Unaudited Condensed Consolidated Financial Statements
 ( 1) Basis of Reporting for Interim Financial Statements
     Share-Based Payment Inventory Costs, an amendment of ARB No. 43, Chapter 4
   4




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(2) Inventories
  April 2, 2006
    
    
    December 31, 2005(In thousands)Finished products
    
    $
    62,275
    
    
    $
    58,000Work-in-process
    
    
    41,019
    
    
    
    38,983Raw materials
    
    
    24,247
    
    
    
    23,545Supplies
    
    
    26,578
    
    
    
    26,177Totals
    
    $
    154,119
    
    
    $
    146,705
  (3) Loss Per Share
 Earnings Per Share
  Three months ended(In thousands, except per share data)
    
    April 2, 2006
    
    
    April 3, 2005Net loss
    
    $
    (2,117
    )
    
    $
    (2,482
    )Weighted average shares and share equivalents outstanding:Basic shares
    
    
    15,059
    
    
    
    14,965Dilutive stock options and restricted shares
    
    
    
    
    
    
    Diluted weighted average shares and share equivalents
    
    
    15,059
    
    
    
    14,965Loss per common share  basic
    
    $
    (0.14
    )
    
    $
    (0.17
    )Loss per common share  diluted
    
    $
    (0.14
    )
    
    $
    (0.17
    )
  5




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(4) Stock-Based Compensation Plans
      6




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7




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Three Months Ended(in thousands)
    
    April 2, 2006Stock-based compensation expense:Non-qualified stock options
    
    $
    57Restricted stock
    
    
    77Total stock-based compensation expense
    
    $
    134
 Accounting for Stock Issued to Employees
 Three MonthsEnded(In thousands, except per share amounts)
    
    April 3, 2005Loss, as reported
    
    $
    (2,482
    )Deduct: Total stock-based employee compensation
expense determined under fair value based method for
all awards, net of related tax effects
    
    
    (135
    )Pro forma loss
    
    $
    (2,617
    )Loss per share:Basic  as reported
    
    $
    (0.17
    )Basic  pro forma
    
    $
    (0.17
    )Diluted  as reported
    
    $
    (0.17
    )Diluted  pro forma
    
    $
    (0.17
    )
  8




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Average RemainingNon-vested
    
    
    Recognition Period(in thousands)
    
    Compensation
    
    
    (Months)Non-qualified stock options
    
    $
    238
    
    
    
    27Restricted stock awards
    
    $
    247
    
    
    
    24Total
    
    $
    485
    
    
    
    26
  For theQuarterlyPeriod EndedApril 3, 2005Expected stock price volatility
    
    
    46.15
    %Expected life (in years)
    
    
    3Risk-free interest rate
    
    
    3.42
    %Expected dividend yield
    
    
    0
    %Weighted average fair value
    
    $
    3.09
  Weighted
    
    
    IntrinsicWeighted
    
    
    Average
    
    
    Value ofAverage
    
    
    Remaining
    
    
    UnexercisedExercise
    
    
    Life
    
    
    in the MoneyShares
    
    
    Price
    
    
    (Years)
    
    
    OptionsOptions outstanding  January 1, 2006
    
    
    1,911,116
    
    
    $
    9.47
    
    
    
    5.7
    
    
    $
    216Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancelled or expired
    
    
    46,250
    
    
    
    9.53
    
    
    
    
    
    
    
    Options outstanding  April 2, 2006
    
    
    1,864,866
    
    
    $
    9.47
    
    
    
    5.5
    
    
    $
    Options
exercisable  April 2, 2006
    
    
    1,792,199
    
    
    $
    9.63
    
    
    
    5.5
    
    
    $
    
 9




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WeightedNumber of
    
    
    Number of
    
    
    AverageExercisable
    
    
    Outstanding
    
    
    RemainingWeighted Average Exercise Price
    
    Options
    
    
    Options
    
    
    Life (Years)$4.05 -
  $4.11
    
    
    206,057
    
    
    
    206,057
    
    
    
    6.9$4.12 -   $8.23
    
    
    135,353
    
    
    
    208,020
    
    
    
    6.0$8.24 -   $12.34
    
    
    1,158,823
    
    
    
    1,158,823
    
    
    
    5.7$12.35 - $16.45
    
    
    266,466
    
    
    
    266,466
    
    
    
    3.6$16.46 - $20.57
    
    
    18,500
    
    
    
    18,500
    
    
    
    3.6$20.58 - $24.68
    
    
    7,000
    
    
    
    7,000
    
    
    
    2.8Totals
    
    
    1,792,199
    
    
    
    1,864,866
    
    
    
    5.5
  WeightedAverageGrant DateShares
    
    
    Fair Value(in thousands)
    
    
    per AwardUnvested Restricted stock awards  January 1, 2006
    
    
    80,467
    
    
    $
    7.51Granted
    
    
    
    
    
    
    Vested
    
    
    15,579
    
    
    
    8.93Cancelled or expired
    
    
    
    
    
    
    Unvested Restricted stock awards  April 2, 2006
    
    
    64,888
    
    
    $
    7.17
 (5) Interest Expense
  Three months endedApril 2, 2006
    
    
    April 3, 2005(in thousands)Interest expense
    
    $
    5,807
    
    
    $
    5,413Interest income
    
    
    (147
    )
    
    
    (67
    )Effect of interest rate swap
    
    
    198
    
    
    
    45Capitalized interest
    
    
    (25
    )
    
    
    (69
    )Interest expense, net
    
    $
    5,833
    
    
    $
    5,322
 10




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(6) Debt
  April 2, 2006
    
    
    December 31, 2005(In thousands)Senior Notes, 7.375%, due August 2008
    
    $
    134,856
    
    
    $
    135,180Discount on 7.375% Senior Notes, original
issue discount amortized over 10 years
    
    
    (67
    )
    
    
    (75
    )Senior Notes, 10.5%, due April 2009
    
    
    99,400
    
    
    
    99,400Discount on 10.5% Senior Notes, original
issue discount amortized over 7 years
    
    
    (514
    )
    
    
    (557
    )Secured revolving credit facility
    
    
    3,000
    
    
    
    Other foreign facilities
    
    
    1,102
    
    
    
    1,104Capitalized leases
    
    
    135
    
    
    
    112Netherlands facility, 5.1%, due on demand
    
    
    228
    
    
    
    4238,140
    
    
    
    235,168Less short-term borrowings
    
    
    (477
    )
    
    
    (248
    )Total
    
    $
    237,663
    
    
    $
    234,920
    
    
    adjustments to the borrowing base calculation, including an increase in the book value
of eligible equipment included in the borrowing base from $8 million to $11 million, as
well as the inclusion of certain billet inventory in the borrowing base;
    
    a provision permitting the filing of certain precautionary financing statements in
connection with ordinary course tolling arrangements with customers; and
    
    adjustments to certain reporting requirements.
  
    
    an adjustment to the consignment limit decreasing the maximum value of consigned silver
available at any time under the consignment facility to the lesser of $17.0 million or the
value of 2.0 million fine troy ounces of silver (as this limit may be changed from time to
time by the parties), in either case less an amount equal to 20% of the face value of all
outstanding forward contracts under the forward contracts facility;
    
    an increase in the floating consignment fee on consigned silver from an annual rate of
4.50% to 5.25% (as this rate may be changed from time to time by BANA);
 11




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
    
    an increase in the frequency of precious metal inventory reporting to twice monthly; and
    
    an agreement that BANA will not request additional letters of credit or other collateral
for our obligations under the silver consignment and forward contracts facility until the
earlier of the termination of the consignment facility, the termination of the forward
contracts facility or the occurrence of an event of default.
     Liquidity and Capital Resources-Liquidity Facilities
 (7) Receivables Sale Facility
  Structure
 12




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Available Amounts
  Costs
 13




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Representations, Warranties, Covenants and Indemnities
 Termination.
  Accounting for Transfers and Servicing of Financial Assets
 14




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April 2006 Amendments to Receivables Sale Facility
    ,
 15




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(8) Contingencies
  (9) Comprehensive Income/(Loss)
  Three months endedApril 2, 2006
    
    
    April 3, 2005(In thousands)Net income/(loss)
    
    $
    (2,117
    )
    
    $
    (2,482
    )Translation adjustment for financial statements denominated in a foreign currency
    
    
    568
    
    
    
    (1,805
    )Unrealized gain/(loss) on cash flow hedges, net of tax
    
    
    (2,888
    )
    
    
    1,921Minimum pension liability adjustment, net of tax
    
    
    2
    
    
    
    6Comprehensive income/(loss)
    
    $
    (4,435
    )
    
    $
    (2,360
    )
 (10) Industry Segments
  16




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Rod, BarCommercial
    
    Wholesale
    
    & Other
    
    Consolidated(In thousands)Three months ended April 2, 2006Pounds shipped
    
    
    64,780
    
    
    
    22,783
    
    
    
    4,641
    
    
    
    92,204Net sales
    
    $
    214,599
    
    
    $
    65,866
    
    
    $
    17,847
    
    
    $
    298,312Gross profit
    
    $
    8,308
    
    
    $
    2,168
    
    
    $
    406
    
    
    $
    10,882Three 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
    
    
    $
    10,060
  Three months ended(In thousands)
    
    April 2, 2006
    
    
    April 3, 2005Commercial Products:Tube Products
    
    $
    145,920
    
    
    $
    97,374Fabricated Products
    
    
    44,932
    
    
    
    36,070Other Products
    
    
    23,747
    
    
    
    19,626Sub-total
    
    
    214,599
    
    
    
    153,070Wholesale Products
    
    
    65,866
    
    
    
    45,581Rod, bar and other
    
    
    17,847
    
    
    
    14,831Total
    
    $
    298,312
    
    
    $
    213,482
  (11) Pension Expense
 Defined Contribution Plans
  17




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U.S. Qualified Retirement Plan
  Three months ended(In thousands)
    
    April 2, 2006
    
    
    April 3, 2005Service cost
    
    $
    1,096
    
    
    $
    1,237Interest cost
    
    
    12,302
    
    
    
    2,522Expected return on plan assets
    
    
    (14,038
    )
    
    
    (2,931
    )Amortization of prior service cost
    
    
    
    
    
    
    31Amortization of net actuarial loss
    
    
    1,401
    
    
    
    449Net periodic pension cost
    
    $
    761
    
    
    $
    1,308
 U.S. Nonqualified Retirement Plan
   Three months ended(In thousands)
    
    April 2, 2006
    
    
    April 3, 2005Service cost
    
    $
    4
    
    
    $
    64Interest cost
    
    
    20
    
    
    
    122Amortization of prior service cost
    
    
    
    
    
    
    92Amortization of loss
    
    
    1
    
    
    
    19FAS 88 settlement
    
    
    30
    
    
    
    94Net periodic pension cost
    
    $
    55
    
    
    $
    391
 18




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Canadian Plans
  Three months ended(In thousands)
    
    April 2, 2006
    
    
    April 3, 2005Service cost
    
    $
    223
    
    
    $
    204Interest cost
    
    
    403
    
    
    
    498Expected return on plan assets
    
    
    (458
    )
    
    
    (514
    )Amortization of prior service cost
    
    
    36
    
    
    
    32Amortization of net actuarial loss
    
    
    33
    
    
    
    28Net periodic pension cost
    
    $
    237
    
    
    $
    248
 Postretirement Benefit Obligation
   Three months ended(In thousands)
    
    April 2, 2006
    
    
    April 3, 2005Service cost
    
    $
    128
    
    
    $
    184Interest cost
    
    
    282
    
    
    
    283Amortization of prior service cost
    
    
    (12
    )
    
    
    38Amortization of deferred gain
    
    
    (5
    )
    
    
    11Net periodic pension cost
    
    $
    393
    
    
    $
    516
 (12) Income Taxes
   (13) Litigation
  19




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(14) Condensed Consolidating Financial Information
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Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Three Months Ended April 2, 2006
 Non-Subsidiary
    
    GuarantorParent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(In thousands)Net sales
    
    $
    177,929
    
    
    $
    51,060
    
    
    $
    96,248
    
    
    $
    (26,925
    )
    
    $
    298,312Cost of goods sold
    
    
    171,918
    
    
    
    45,226
    
    
    
    97,211
    
    
    
    (26,925
    )
    
    
    287,430Gross profit/(loss)
    
    
    6,011
    
    
    
    5,834
    
    
    
    (963
    )
    
    
    
    
    
    
    10,882Selling, general and administrative expenses
    
    
    5,687
    
    
    
    791
    
    
    
    1,152
    
    
    
    
    
    
    
    7,630Restructuring charges/(benefit)
    
    
    (48
    )
    
    
    (7
    )
    
    
    41
    
    
    
    
    
    
    
    (14
    )Operating income/(loss)
    
    
    372
    
    
    
    5,050
    
    
    
    (2,156
    )
    
    
    
    
    
    
    3,266Other expense/(income):Interest expense, net
    
    
    5,381
    
    
    
    (4
    )
    
    
    456
    
    
    
    
    
    
    
    5,833Amortization and other, net
    
    
    1,741
    
    
    
    (1,674
    )
    
    
    642
    
    
    
    
    
    
    
    709Equity in earnings of subsidiaries
    
    
    2,418
    
    
    
    
    
    
    
    
    
    
    
    (2,418
    )
    
    
    Income/(loss) before income taxes
    
    
    (4,332
    )
    
    
    6,728
    
    
    
    (3,254
    )
    
    
    (2,418
    )
    
    
    (3,276
    )Income tax provision/(benefit)
    
    
    (2,215
    )
    
    
    2,289
    
    
    
    (1,233
    )
    
    
    
    
    
    
    (1,159
    )Net income/(loss)
    
    $
    (2,117
    )
    
    $
    4,439
    
    
    $
    (2,021
    )
    
    $
    (2,418
    )
    
    $
    (2,117
    )
 Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Three Months Ended April 3, 2005
 Non-Subsidiary
    
    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/(benefit)
    
    
    (168
    )
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    (82
    )Operating income/(loss)
    
    
    (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) 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
    )
 21




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Balance Sheets
April 2, 2006
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedAssetsCurrent assetsCash and cash equivalents
    
    $
    11,243
    
    
    $
    
    
    
    $
    11,667
    
    
    $
    
    
    
    $
    22,910Accounts receivable, net
    
    
    7,788
    
    
    
    11,653
    
    
    
    91,878
    
    
    
    
    
    
    
    111,319Inventories
    
    
    71,262
    
    
    
    47,140
    
    
    
    35,717
    
    
    
    
    
    
    
    154.119Prepaid expenses and other
    
    
    6,972
    
    
    
    1,753
    
    
    
    1,615
    
    
    
    
    
    
    
    10,340Total current assets
    
    
    97,265
    
    
    
    60,546
    
    
    
    140,877
    
    
    
    
    
    
    
    298,688Property, plant and equipment, net
    
    
    106,391
    
    
    
    26,349
    
    
    
    46,166
    
    
    
    
    
    
    
    178,906Deferred charges, net
    
    
    5,014
    
    
    
    110
    
    
    
    2,161
    
    
    
    
    
    
    
    7,285Deferred taxes, non-current
    
    
    7,386
    
    
    
    (7,385
    )
    
    
    14,059
    
    
    
    
    
    
    
    14,060Goodwill, net
    
    
    
    
    
    
    75,504
    
    
    
    1,603
    
    
    
    
    
    
    
    77,107Notes receivable
    
    
    
    
    
    
    
    
    
    
    813
    
    
    
    
    
    
    
    813Prepaid pension and other
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    
    
    
    
    48Investments in subsidiaries
    
    
    487,721
    
    
    
    325
    
    
    
    
    
    
    
    (488,046
    )
    
    
    Total assets
    
    $
    703,777
    
    
    $
    155,449
    
    
    $
    205,727
    
    
    $
    (488,046
    )
    
    $
    576,907Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    44,806
    
    
    $
    22,291
    
    
    $
    19,689
    
    
    $
    
    
    
    $
    86,786Accrued liabilities
    
    
    7,828
    
    
    
    19,958
    
    
    
    6,376
    
    
    
    
    
    
    
    34,162Short-term borrowings
    
    
    
    
    
    
    24
    
    
    
    453
    
    
    
    
    
    
    
    477Deferred income taxes
    
    
    6
    
    
    
    (211
    )
    
    
    669
    
    
    
    
    
    
    
    464Intercompany balances
    
    
    207,396
    
    
    
    (211,541
    )
    
    
    4,145
    
    
    
    
    
    
    
    Total current liabilities
    
    
    260,036
    
    
    
    (169,479
    )
    
    
    31,332
    
    
    
    
    
    
    
    121,889Long-term debt
    
    
    236,674
    
    
    
    51
    
    
    
    938
    
    
    
    
    
    
    
    237,663Pension liabilities
    
    
    36,120
    
    
    
    39
    
    
    
    1,654
    
    
    
    
    
    
    
    37,813Postretirement benefit obligation
    
    
    11,047
    
    
    
    
    
    
    
    8,595
    
    
    
    
    
    
    
    19,642Accrued environmental remediation
    
    
    900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    900Total liabilities
    
    
    544,777
    
    
    
    (169,389
    )
    
    
    42,519
    
    
    
    
    
    
    
    417,907Stockholders equity
    
    
    159,000
    
    
    
    324,838
    
    
    
    163,208
    
    
    
    (488,046
    )
    
    
    159,000Total liabilities and stockholders equity
    
    $
    703,777
    
    
    $
    155,449
    
    
    $
    205,727
    
    
    $
    (488,046
    )
    
    $
    576,907
 22




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Balance Sheets
December 31, 2005
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedAssetsCurrent assetsCash and equivalents
    
    $
    4,571
    
    
    $
    
    
    
    $
    22,758
    
    
    $
    
    
    
    $
    27,329Accounts receivable, net
    
    
    7,965
    
    
    
    6,930
    
    
    
    89,291
    
    
    
    
    
    
    
    104,186Inventories
    
    
    64,418
    
    
    
    44,631
    
    
    
    37,656
    
    
    
    
    
    
    
    146,705Prepaid expenses and other
    
    
    7,425
    
    
    
    1,528
    
    
    
    1,256
    
    
    
    
    
    
    
    10,209Total current assets
    
    
    84,379
    
    
    
    53,089
    
    
    
    150,961
    
    
    
    
    
    
    
    288,429Property, plant and equipment, net
    
    
    108,275
    
    
    
    27,001
    
    
    
    45,962
    
    
    
    
    
    
    
    181,238Goodwill, net
    
    
    
    
    
    
    75,505
    
    
    
    1,559
    
    
    
    
    
    
    
    77,064Deferred charges, net
    
    
    5,368
    
    
    
    125
    
    
    
    2,233
    
    
    
    
    
    
    
    7,726Deferred taxes, non-current
    
    
    7,174
    
    
    
    (7,174
    )
    
    
    13,469
    
    
    
    
    
    
    
    13,469Notes receivable
    
    
    
    
    
    
    
    
    
    
    831
    
    
    
    
    
    
    
    831Prepaid pension and other
    
    
    14
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    8Investments in subsidiaries
    
    
    484,383
    
    
    
    325
    
    
    
    
    
    
    
    (484,708
    )
    
    
    Total assets
    
    $
    689,593
    
    
    $
    148,871
    
    
    $
    215,009
    
    
    $
    (484,708
    )
    
    $
    568,765Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    35,364
    
    
    $
    18,635
    
    
    $
    17,803
    
    
    $
    
    
    
    $
    71,802Accrued liabilities
    
    
    9,350
    
    
    
    17,969
    
    
    
    7,633
    
    
    
    
    
    
    
    34,952Short-term borrowings
    
    
    
    
    
    
    24
    
    
    
    224
    
    
    
    
    
    
    
    248Intercompany balances
    
    
    195,247
    
    
    
    (209,227
    )
    
    
    13,980
    
    
    
    
    
    
    
    Total current liabilities
    
    
    239,961
    
    
    
    (172,599
    )
    
    
    39,640
    
    
    
    
    
    
    
    107,002Long-term debt
    
    
    233,948
    
    
    
    58
    
    
    
    914
    
    
    
    
    
    
    
    234,920Pension liabilities
    
    
    40,285
    
    
    
    
    
    
    
    2,604
    
    
    
    
    
    
    
    42,889Postretirement benefit obligation
    
    
    11,167
    
    
    
    
    
    
    
    8,555
    
    
    
    
    
    
    
    19,722Accrued environmental remediation
    
    
    930
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    930Total liabilities
    
    
    526,291
    
    
    
    (172,541
    )
    
    
    51,713
    
    
    
    
    
    
    
    405,463Stockholders equity
    
    
    163,302
    
    
    
    321,412
    
    
    
    163,296
    
    
    
    (484,708
    )
    
    
    163,302Total liabilities and stockholders equity
    
    $
    689,593
    
    
    $
    148,871
    
    
    $
    215,009
    
    
    $
    (484,708
    )
    
    $
    568,765
 23




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Cash Flows
For the Three Months Ended April 2, 2006
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedOperating ActivitiesIncome /(loss) from continuing operations
    
    $
    (2,117
    )
    
    $
    4,439
    
    
    $
    (2,021
    )
    
    $
    (2,418
    )
    
    $
    (2,117
    )Depreciation and amortization
    
    
    2,478
    
    
    
    785
    
    
    
    995
    
    
    
    
    
    
    
    4,258Deferred income taxes
    
    
    30
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    23Other non-cash items
    
    
    (1,458
    )
    
    
    7
    
    
    
    60
    
    
    
    
    
    
    
    (1,391
    )Equity in earnings of subsidiaries
    
    
    (2,418
    )
    
    
    
    
    
    
    
    
    
    
    2,418
    
    
    
    Changes in receivables sale facility
    
    
    
    
    
    
    
    
    
    
    26,000
    
    
    
    
    
    
    
    26,000Changes in operating assets and liabilities
    
    
    39,837
    
    
    
    (41,340
    )
    
    
    (31,914
    )
    
    
    
    
    
    
    (33,417
    )Net cash provided by/(used for) operating activities
    
    
    36,352
    
    
    
    (36,109
    )
    
    
    (6,887
    )
    
    
    
    
    
    
    (6,644
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (893
    )
    
    
    (162
    )
    
    
    (181
    )
    
    
    
    
    
    
    (1,236
    )Other
    
    
    659
    
    
    
    49
    
    
    
    (691
    )
    
    
    
    
    
    
    17Net cash used for investing activities
    
    
    (234
    )
    
    
    (113
    )
    
    
    (872
    )
    
    
    
    
    
    
    (1,219
    )Financing ActivitiesIssuance of common stock
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Financing fees and expenses paid
    
    
    (46
    )
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (49
    )Net borrowings on revolving credit facilities
    
    
    2,871
    
    
    
    123
    
    
    
    227
    
    
    
    
    
    
    
    3,221Intercompany borrowings (payments)
    
    
    (32,449
    )
    
    
    36,098
    
    
    
    (3,649
    )
    
    
    
    
    
    
    Other financing activities
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Net cash provided by/(used for) financing activities
    
    
    (29,567
    )
    
    
    36,221
    
    
    
    (3,427
    )
    
    
    
    
    
    
    3,227Effect of exchange rate on cash and cash equivalents
    
    
    121
    
    
    
    1
    
    
    
    95
    
    
    
    
    
    
    
    217Net decrease in cash and cash equivalents
    
    
    6,672
    
    
    
    
    
    
    
    (11,091
    )
    
    
    
    
    
    
    (4,419
    )Cash and cash equivalents at beginning of period
    
    
    4,571
    
    
    
    
    
    
    
    22,758
    
    
    
    
    
    
    
    27,329Cash and cash equivalents at end of period
    
    $
    11,243
    
    
    $
    
    
    
    $
    11,667
    
    
    $
    
    
    
    $
    22,910
 24




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidating Statements of Cash Flows
For the Three Months Ended April 3, 2005
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedOperating 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 in earnings of subsidiaries
    
    
    (5,765
    )
    
    
    
    
    
    
    
    
    
    
    5,765
    
    
    
    Changes in operating assets and liabilities
    
    
    (8,102
    )
    
    
    (9,473
    )
    
    
    (7,170
    )
    
    
    
    
    
    
    (24,745
    )Net cash 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 ActivitiesFinancing fees and expenses paid
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Net borrowings on revolving credit facilities
    
    
    6,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,500Intercompany borrowings/(payments)
    
    
    (10,610
    )
    
    
    4,399
    
    
    
    6,211
    
    
    
    
    
    
    
    Issuance of common stock
    
    
    403
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    403Other 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 increase/(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
 25




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 This report contains forward-looking statements made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all
statements that do not relate solely to current or historical fact, but address events or
developments that we anticipate will occur in the future. Forward-looking statements include
statements regarding our goals, beliefs, plans or current expectations, taking into account the
information currently available to our management. When we use words such as anticipate,
intend, expect, believe, plan, may, should or would or other words that convey
uncertainty of future events or outcome, we are making forward-looking statements. Statements
relating to future sales, earnings, operating performance, restructuring strategies, capital
expenditures and sources and uses of cash, for example, are forward-looking statements.
 These forward-looking statements are subject to various risks and uncertainties which could
cause actual results to differ materially from those stated or implied by such forward-looking
statements. We undertake no obligation to publicly release any revision of any forward-looking
statements contained herein to reflect events and circumstances occurring after the date hereof, or
to reflect the occurrence of unanticipated events. Information concerning risk factors is
contained under Item 1A Risk Factors in our Annual Report on Form 10-K for the year ended
December 31, 2005, as well as in the section entitled Risk Factors in Part II, Item 1A of this
report. You should carefully consider all of the risks and all other information contained in or
incorporated by reference in this report and in our filings with the SEC. These risks are not the
only ones we face. Additional risks and uncertainties not presently known to us, or which we
currently consider immaterial, also may adversely affect us. If any of these risks actually occur,
our business, financial condition and results of operations could be materially and adversely
affected.
 Company Overview
  Results of Operations
  26




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Executive Summary
    Share-based Compensation Expense
  27




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28




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For the Three Months Ended April 2, 2006 Compared to the Three Months Ended April 3, 2005
  Pounds ShippedFor the Three Months Ended
    
    Increase/
    
    
    % Increase/(In thousands, except for percentages)
    
    April 2, 2006
    
    
    April 3, 2005
    
    
    (Decrease)
    
    
    (Decrease)Commercial products
    
    
    64,780
    
    
    
    55,455
    
    
    
    9,325
    
    
    
    16.8
    %Wholesale products
    
    
    22,783
    
    
    
    23,411
    
    
    
    (628
    )
    
    
    (2.7
    )Rod, bar and other products
    
    
    4,641
    
    
    
    4,893
    
    
    
    (252
    )
    
    
    (5.2
    )Total
    
    
    92,204
    
    
    
    83,759
    
    
    
    8,445
    
    
    
    10.1
    %
    Net SalesFor the Three Months Ended
    
    $
    
    %(In thousands, except for percentages)
    
    April 2, 2006
    
    
    April 3, 2005
    
    
    Increase
    
    
    IncreaseCommercial products
    
    $
    214,599
    
    
    $
    153,070
    
    
    $
    61,529
    
    
    
    40.2
    %Wholesale products
    
    
    65,866
    
    
    
    45,581
    
    
    
    20,285
    
    
    
    44.5Rod, bar and other products
    
    
    17,847
    
    
    
    14,831
    
    
    
    3,016
    
    
    
    20.3Total
    
    $
    298,312
    
    
    $
    213,482
    
    
    $
    84,830
    
    
    
    39.7
    %
 29




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Gross Profit/(Loss)For the Three Months Ended
    
    $ Increase/
    
    
    % Increase/(In thousands, except for percentages)
    
    April 2, 2006
    
    
    April 3, 2005
    
    
    (Decrease)
    
    
    (Decrease)Commercial products
    
    $
    8,308
    
    
    $
    9,619
    
    
    $
    (1,311
    )
    
    
    (13.6
    )%Wholesale products
    
    
    2,168
    
    
    
    (124
    )
    
    
    2,292
    
    
    *NMRod, bar and other products
    
    
    406
    
    
    
    565
    
    
    
    (159
    )
    
    
    (28.1
    )Total
    
    $
    10,882
    
    
    $
    10,060
    
    
    $
    822
    
    
    
    8.2
    %
 *
    
    NM  not meaningful
   30




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31




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##### Table of Contents



Liquidity and Capital Resources
  April 2, 2006
    
    December 31,(Unaudited)
    
    2005(In
thousands)Cash and cash equivalents
    
    $
    22,910
    
    
    $
    27,329Working capital
    
    
    176,799
    
    
    
    181,427Total debt
    
    
    238,140
    
    
    
    235,168Current ratio
    
    
    2.45
    
    
    
    2.70
 Overview and Outlook
     32




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Sources of Liquidity
  Cash and cash equivalents.
 33




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##### Table of Contents



Cash used for operations.
 Borrowings under our secured revolving credit facility
 Cash from our receivables sale facility
 34




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##### Table of Contents



Uses of Liquidity
  Working capital needs.
 Capital expenditures.
 Payments related to our outstanding debt and other financing facilities.
 Funding of pension obligations
 35




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Off-Balance Sheet Arrangements
     36




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##### Table of Contents



Liquidity Facilities
    Secured Revolving Credit Facility
 Availability.
 Borrowing Base
 37




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##### Table of Contents



Interest and Fees
 Maturity
 Security
 Covenants
 Events of Default and Acceleration.
 38




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##### Table of Contents



Silver Consignment and Forward Contracts Facility
  Fees.
 39




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##### Table of Contents



Security
  Representations, Warranties and Covenants
 Termination and Events of Default
 40




---



##### Table of Contents



Receivables Sale Facility
 Structure
  Available Amounts
 41




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##### Table of Contents



Costs
 Representations, Warranties, Covenants and Indemnities
 Termination.
  42




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##### Table of Contents



Accounting for Transfers and Servicing of Financial Assets
 April 2006 Amendments to Receivables Sale Facility
    43




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,
 Environmental Matters
  Decatur, Alabama
   44




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Ardmore, Tennessee
    Altoona, Pennsylvania
  45




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Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Commodity Price Risks
 Accounting for Derivative Instruments and
Hedging Activities Accounting
for Certain Derivative Instruments and Certain Hedging Activities Amendment of Statement 133 on Derivative Instruments and Hedging
Activities
 Three months ended(In millions)
    
    April 2, 2006
    
    April 3, 2005Gain arising from ineffectiveness included in earnings
    
    $
    0.9
    
    
    $
    0.1Gains reclassed from other comprehensive income
(OCI) to earnings
    
    $
    1.2
    
    
    $
    0.5
 46




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##### Table of Contents



(In millions)
    
    April 2, 2006
    
    April 3, 2005Aggregate notional value of derivatives outstanding
    
    $
    6.7
    
    
    $
    9.6Period through which derivative positions currently exist
    
    February 2007
    
    
    December 2006Gain of fair value of derivatives
    
    $
    3.8
    
    
    $
    1.2The change in fair value due to the effect of a 10%
adverse change in commodity
prices to current fair value
    
    $
    (1.1
    )
    
    $
    (1.0
    )Deferred gains included in OCI
    
    $
    2.8
    
    
    $
    1.2Gains included in OCI to be recognized in the next 12 months
    
    $
    2.8
    
    
    $
    1.0Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    11
    
    
    
    21
  Three months ended(In millions)
    
    April 2, 2006
    
    April 3, 2005(Loss) arising from ineffectiveness included in earnings
    
    $
    (0.2
    )
    
    $
    (0.5
    )(Losses) reclassed from other comprehensive income
(OCI) to earnings
    
    $
    (0.3
    )
    
    $
    (0.9
    )
 (In millions)
    
    April 2, 2006
    
    April 3, 2005Aggregate notional value of derivatives outstanding
    
    $
    5.1
    
    
    $
    18.2Period through which derivative positions currently exist
    
    May 2006
    
    
    May 2005(Loss) of fair value of derivatives
    
    $
    (0.1
    )
    
    
    The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (0.5
    )
    
    $
    (1.8
    )Deferred gains/(losses) included in OCI
    
    
    
    
    
    
    Gains/(losses) included in OCI to be recognized in the
next 12 months
    
    
    
    
    
    
    Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    
    
    
    
    
  47




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Three months ended(In millions)
    
    April 2, 2006
    
    April 3, 2005(Loss) arising from ineffectiveness included in earnings
    
    $
    (2.3
    )
    
    $
    (0.5
    )
 (In millions)
    
    April 2, 2006
    
    April 3, 2005Aggregate notional value of derivatives outstanding
    
    $
    28.9
    
    
    $
    64.4Period through which derivative positions currently exist
    
    May 2006
    
    
    May 2005(Loss) of fair value of derivatives
    
    $
    (3.1
    )
    
    $
    (1.3
    )The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (3.2
    )
    
    $
    (6.6
    )
  Three months ended(In millions)
    
    April 2, 2006
    
    April 3, 2006Gain arising from ineffectiveness included in earnings
    
    $
    0.8
    
    
    $
    0.7Gains/(losses) reclassed from other comprehensive
income (OCI) to earnings
    
    
    
    
    
    
    
 (In millions)
    
    April 2, 2006
    
    April 3, 2005Aggregate notional value of derivatives outstanding
    
    $
    10.1
    
    
    $
    7.7Period through which derivative positions currently exist
    
    December 2008
    
    
    December 2006Gain/(loss) of fair value of derivatives
    
    $
    (0.4
    )
    
    $
    2.3The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (1.0
    )
    
    $
    (1.0
    )Deferred gains/(losses) included in OCI
    
    $
    (3.4
    )
    
    $
    2.3Gains/(losses) included in OCI to be recognized in the
next 12 months
    
    $
    (1.6
    )
    
    $
    1.8Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    33
    
    
    
    21
 Foreign Currency Exchange Risk
  48




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Interest Rate Risk
   Material Limitations
   49




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##### Table of Contents



Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II.
    
    OTHER INFORMATION
 
 Item 1A.
    
    Risk Factors
  Recent changes in payment terms applicable to our commercial customers may cause these customers to
move their business to competitors who, because of their greater financial resources, may offer
more generous payment terms.
  50




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  Total Number of Shares
    
    Approximate DollarTotal Number
    
    
    
    
    
    Purchased as Part of
    
    Value (in Millions) thatof Shares
    
    Average Price
    
    Publicly Announced
    
    May Yet Be PurchasedPurchased
    
    Paid Per Share
    
    Plans
    
    Under the Plans orPeriod
    
    (1)
    
    (2)
    
    or Programs
    
    Programs1/01/02
1/29/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1/30/06  2/26/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2/27/06  4/2/06
    
    
    3,036
    
    
    
    8.93
    
    
    
    
    
    
    
    Total
    
    
    3,036
    
    
    
    8.93
    
    
    
    
 (1)
    
    Shares surrendered to the Company by employees to satisfy individual tax
withholding obligations upon vesting of previously issued shares of restricted Common Stock.
Shares are not part of any Company repurchase plan.(2)
    
    Average price paid per share reflects the closing price of the Common Stock on the
business day the shares were surrendered by employee stockholders.
 
 Item 6.
    
    Exhibits
 10.1
    
    Amendment No. 3 to Amended and Restated Credit Agreement, dated as of February
22, 2006, among the Company, its U.S. subsidiaries, the lenders named therein and
Wachovia Bank, National Association, as administrative agent (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on February 28,
2006).10.2
    
    Amendment No. 3 to Receivables Purchase Agreement and Amendment No. 1 to Fee
Letter, effective as of February 22, 2006, among DEJ 98 Finance, LLC, Wolverine
Finance, LLC, the Company, Blue Ridge Asset Funding Corporation and Wachovia Bank,
National Association, individually and as agent (incorporated by reference to Exhibit
10.2 to the Companys Current Report on Form 8-K filed on February 28, 2006).10.3
    
    Second Amendment to Amended and Restated Consignment Agreement, dated as of
February 22, 2006, among the Company, Wolverine Joining Technologies, LLC and Bank of
America, N.A., as successor in interest to Fleet Precious Metals Inc. (incorporated by
reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on February
28, 2006).10.4
    
    Wolverine Tube, Inc. Annual Performance Incentive Plan (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on April
11, 2006).
 51




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31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes- Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 SIGNATURE
  WOLVERINE TUBE, INC.Dated: May 12, 2006
    
    By:
    
    /s/ James E. DeasonName:
    
    James E. DeasonTitle:
    
    Senior Vice President, ChiefFinancial Officer and Secretary
 52