UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

OR

Commission file number 1-12164

WOLVERINE TUBE, INC.

(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 x       NO o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES x       NO o

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

FORM 10-Q

QUARTERLY REPORT

TABLE OF CONTENTS

ITEM 1. FINANCIAL STATEMENTS

Wolverine Tube, Inc. and Subsidiaries

See Notes to Condensed Consolidated Financial Statements.

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Wolverine Tube, Inc. and Subsidiaries

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Wolverine Tube, Inc. and Subsidiaries

See Notes to Condensed Consolidated Financial Statements.

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Wolverine Tube, Inc. and Subsidiaries

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of Wolverine Tube, Inc. (the “Company”) and its majority-owned subsidiaries after elimination of significant intercompany accounts and transactions. References to the “Company”, “we” or “us” refer to Wolverine Tube, Inc. and its consolidated subsidiaries, unless the context otherwise requires. The accompanying condensed consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying condensed consolidated financial statements (and all information in this report) have not been examined by independent auditors; but, in the opinion of management, all adjustments, which consist of normal recurring accruals necessary for a fair presentation of the results for the periods, have been made. The results of operations for the three-month period ended April 4, 2004 is not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2004. For further information, refer to the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2003.

We use our internal operational reporting cycle for quarterly financial reporting.

NOTE 2. CONTINGENCIES

We are subject to extensive environmental regulations imposed by federal, state, provincial and local authorities in the United States, Canada, China and Portugal with respect to emissions to air, discharges to waterways, and the generation, handling, storage, transportation, treatment and disposal of waste materials, and we have received various communications from regulatory authorities concerning environmental matters. We have accrued undiscounted estimated environmental remediation costs of $1.1 million at April 4, 2004, consisting primarily of $0.2 million for the Decatur, Alabama facility and $0.9 million for the Ardmore, Tennessee facility. Based on information currently available, we believe that the ultimate 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 environmental matters could differ materially from the amounts we estimated and accrued at April 4, 2004 and could result in additional exposure if these environmental matters are not resolved as anticipated.

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NOTE 3. INVENTORIES

Inventories are as follows:

NOTE 4. CONSOLIDATED INTEREST EXPENSE, NET

Consolidated interest expense is net of interest income and capitalized interest of $97 thousand and $24 thousand, respectively, for the three-month period ended April 4, 2004, and $151 thousand and $17 thousand, respectively, for the three-month period ended March 30, 2003.

NOTE 5. DEBT

Long-term debt consists of the following:

As of April 4, 2004, we had borrowed $20.0 million under our secured revolving credit facility. We had approximately $7.9 million of standby letters of credit issued under the secured revolving credit facility and approximately $9.6 million (subject to a $2.0 million excess availability requirement) in additional borrowing availability thereunder.

In October 2002, we completed an interest rate swap on $50 million notional amount of our 7.375% Senior Notes. The interest rate swap resulted in a reduction to interest expense in the first quarters of 2004 and 2003 of $280 thousand and $250 thousand, respectively.

On March 31, 2004, the Company amended its secured revolving credit facility to extend the term for an additional two years to March of 2007. In addition, certain covenants were modified. Those covenants of significance which were modified include lowering the Fixed Charge

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Coverage Ratios and the Minimum Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and certain restrictions on the annual amount of capital expenditures.

NOTE 6. STOCK-BASED COMPENSATION PLANS

We account for our stock option compensation plans using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. No stock option compensation expense is reflected in net income 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 and earnings per share if we had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” to our stock option compensation plans.

NOTE 7. COMPREHENSIVE INCOME

Comprehensive income is as follows:

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NOTE 8. RESTRUCTURING CHARGES

In the third quarter of 2003, the Company announced its intention to close its Booneville, Mississippi facility and did so in December of 2003. Accordingly, the Company recorded a restructuring charge in the amount of $10.4 million and established a reserve for certain items associated with the write-down of impaired assets, relocation of equipment, severance and other people related costs. Given the strong start to the 2004 HVAC cooling season and normal seasonal demands, the Company is evaluating and testing the possibility of using a limited number of assets at the Booneville, Mississippi facility to provide additional capacity to meet increased demand. This is a temporary measure that, if implemented, will occur through mid to late summer 2004 and does not change the Company’s strategy regarding this facility. In the fourth quarter of 2003, we charged $6.8 million against the reserve leaving a balance in the reserve at December 31, 2003 of $3.5 million. In the first quarter of 2004, we charged $3.2 million against the reserve, related to the impaired assets, relocation of equipment, severance and other employee related costs, the cost of terminating certain operating leases and preparing the facility for sale, leaving a balance in the reserve at April 4, 2004 of $304 thousand for outstanding charges.

Further, in accordance with FAS 146, regarding the Booneville, Mississippi facility closure, the Company recognized restructuring expenses in the first quarter of 2004 of $329 thousand, mostly costs related to maintaining the facility, terminating leases and other costs associated with removing equipment and preparing the facility for eventual sale.

Also in the third quarter of 2003, the Company formalized a workforce reduction program affecting approximately 200 employees. During the first quarter of 2004, in accordance with FAS 146, the Company recognized costs of $176 thousand for severance, medical and other separation related expenditures associated with this workforce reduction program.

Finally, in the first quarter of 2004, the Company recognized charges of $46 thousand related to carrying costs and other closing related matters regarding its closed Roxboro, North Carolina facility and $20 thousand in other restructuring related issues.

In total, in the first quarter of 2004 the Company recorded restructuring expenses of $571 thousand pre-tax ($377 thousand net of tax).

NOTE 9. INDUSTRY SEGMENTS

Our reportable segments are based on our three product groups: commercial products, wholesale products and rod, bar and other products. 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. We evaluate the performance of our operating segments based on sales and gross profit; however, we do not allocate asset amounts and items of income and expense below gross profit or depreciation and amortization.

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Summarized financial information concerning our reportable segments is shown in the following table:

NOTE 10. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:

NOTE 11. DISCONTINUED OPERATIONS

During the year ended December 31, 2001, we decided to discontinue the operations of Wolverine Ratcliffs, Inc. (“WRI”), which were previously included in the rod, bar and other products segment. Accordingly, the operating results of WRI are reported in discontinued operations in the consolidated financial statements. In 2002, we stopped all manufacturing operations of WRI, liquidated substantially all of its inventory and net receivables and began liquidating the equipment. In the first quarter of 2004, we sold the remainder of the equipment for $0.8 million leaving only the land and building as assets held for resale. We are currently evaluating the sale or lease of the land and building and would like to conclude a transaction in 2004.

There were no operating results of the discontinued WRI operations in the first quarter of 2004 charged to the previously established reserves. There were charges of $25 thousand related to sales returns in operations in the first quarter of 2003.

Assets and liabilities of the discontinued WRI operations have been reflected in the consolidated balance sheets as current or non-current based on the original classification of these accounts, net of any necessary valuation allowances, except that property, plant and equipment to be disposed in the amount of $0.9 million, net of a necessary valuation allowance, have been included in

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assets held for sale. Although we believe we have appropriately reduced the carrying value of the assets to their estimated recoverable amounts, net of disposal costs where appropriate, actual results could be different and the difference will be reported in discontinued operations in future periods.

Net liabilities of the discontinued WRI operations are as follows:

Subsequent to April 4, 2004, the Other liabilities shown above, in the amount of $1.1 million and $0.6 million of the Current liabilities were satisfied by the purchase of annuity contracts equivalent to the net present value of WRI’s pension obligation for all covered employees. The total amount paid for the annuity contracts was $1.7 million.

NOTE 12. PENSION EXPENSE

U.S. Qualified Retirement Plan

A summary of the components of net periodic pension cost for the U.S. Retirement Plan for the quarters ended April 4, 2004 and March 30, 2003 is as follows:

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U.S. Nonqualified Retirement Plan

A summary of the components of net periodic pension cost for the Supplemental Benefit Restoration Plan and the Supplemental Executive Retirement Plan for the quarters ended April 4, 2004 and March 30, 2003 is as follows:

Canadian Plans

A summary of the components of net periodic pension cost for the Canadian pension plans for the years ended December 31 are as follows:

Postretirement benefit obligation

A summary of the components of net periodic expense for the postretirement benefit cost for the quarters ended April 4, 2004 and March 30, 2003 is as follows:

On December 8, 2003, a law adding a prescription drug benefit for Medicare-eligible retirees beginning in 2006 was adopted. We anticipate that the benefit we will be required to pay in 2006 will be lower as a result of the new Medicare provision. However, the retiree medical costs reported above does not reflect the impact of this legislation. Deferring the recognition of the new Medicare provision’s impact is permitted by Financial Accounting Standard Board Staff

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Position 106-1 due to open questions about certain matters. The final guidance could require changes to previously reported information.

NOTE 13. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The following tables present condensed consolidating financial information for: (a) Wolverine Tube, Inc. (the “Parent”) on a stand-alone basis; (b) on a combined basis, the guarantors of the 10.5% Senior Notes 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); and Wolverine Asia Limited. Each of the Subsidiary Guarantors is wholly-owned by Wolverine Tube, Inc. The guarantees issued by 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 we believe separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. Furthermore, there are no significant legal restrictions on the Parent’s ability to obtain funds from its subsidiaries by dividend or loan.

The Parent is comprised of Alabama, Oklahoma, Tennessee, and Mississippi manufacturing operations and certain corporate management, sales and marketing, information services and finance functions.

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Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
For the Three Months Ended April 4, 2004

(Unaudited)