International Wire Announces Record Third Quarter and First Nine Month Operating Results

  International Wire Announces Record Third Quarter and First Nine Month
  Operating Results

Business Wire

CAMDEN, N.Y. -- November 12, 2012

International Wire Group Holdings, Inc. (“the Company”) (OTC Pink: ITWG) today
announced record results for the third quarter and for the first nine months
ended September 30, 2012 with operating income and net income at all-time
highs and well above comparable 2011 results.

“Customer demand in the third quarter was solid but mixed by major market. For
the first nine months, increased sales demand in the automotive, consumer and
appliance and industrial/energy markets outpaced declines in our other markets
including Europe. Continued higher demand for our bare wire products and
increased plant utilization in our high performance conductors business were
the major contributing factors to record operating results for the third
quarter and first nine months,” said Rodney D. Kent, Chief Executive Officer
of International Wire Group Holdings, Inc.

As previously announced, on October 4, 2012 subsequent to the end of the third
quarter, the Company’s wholly owned subsidiary, International Wire Group, Inc.
(“IWG”), issued $250 million of its 8.500% Senior Secured Notes due 2017 and
amended its revolving credit facility to, among other things, increase the
maximum permitted borrowings from $150 million to $175 million. In connection
with the transactions, the Company has redeemed all of its outstanding
11.50%/12.25% Senior PIK Toggle Notes due 2015 and IWG repurchased and
redeemed all of its 9.75% Senior Secured Notes due 2015.

Third Quarter Results

Net sales for the quarter ended September 30, 2012 were $170.9 million, a
decrease of $50.0 million, or 22.6%, compared to $220.9 million for the same
period in 2011. This decrease was primarily due to the lower selling price of
copper, a higher proportion of tolled copper (customer-owned copper, the value
of which is excluded from net sales and cost of sales), lower customer
pricing/mix (including silver, nickel and tin prices) and an unfavorable
foreign currency exchange effect, partially offset by increased sales volume.
Excluding the effects of lower copper prices and a higher proportion of tolled
copper, net sales decreased $5.0 million, or 2.8%, versus the same period in
2011. Lower customer pricing/mix of $6.2 million and $1.8 million from
unfavorable currency exchange rates in Europe contributed to this decrease but
were partially offset by increased sales volume of $3.0 million. Total pounds
of product sold in the third quarter of 2012 increased by 5.7% compared to the
third quarter of 2011.

Operating income for the three months ended September 30, 2012 was $12.1
million compared to $11.3 million for the three months ended September 30,
2011, an increase of $0.8 million, or 7.1%, primarily due to higher sales in
the Bare Wire Division and increased plant utilization in the High Performance
Conductors segment partially offset by lower sales volume in both the High
Performance Conductors (primarily silver-plated products) and Engineered Wire
Products–Europe segments and higher depreciation and amortization.

Net income of $5.0 million, or $0.51 per basic and diluted share, for the
three months ended September 30, 2012 increased by $2.8 million, or $0.29 per
basic and diluted share, from the prior year results of $2.2 million, or $0.22
per basic and diluted share. The increase was due primarily to higher
operating income and a lower income tax provision.

Nine Month Results

Net sales for the nine months ended September 30, 2012 were $572.3 million, a
decrease of $107.0 million, or 15.8%, compared to 2011 period net sales of
$679.3 million. This decrease was primarily due to a lower selling price of
copper, a higher proportion of tolled copper in the 2012 period, lower
customer pricing/mix (including silver, nickel and tin prices) and an
unfavorable foreign currency exchange rate, partially offset by increased
sales volume. Excluding the effects of lower copper prices and a higher
proportion of tolled copper, net sales increased $5.5 million, or 1.0%, versus
the prior year. This increase resulted from $25.3 million of increased volume,
partially offset by $15.1 million of lower customer pricing/mix and $4.7
million from the effects of unfavorable foreign currency exchange rates. Total
pounds of product sold in the first nine months of 2012 increased by 7.8%
compared to the first nine months of 2011.

Operating income for the nine months ended September 30, 2012 was $44.9
million compared to $42.5 million for the 2011 period, an increase of $2.4
million, or 5.6%, primarily from higher sales in the Bare Wire Division and
increased plant utilization in the High Performance Conductors segment,
partially offset by lower sales volume in the High Performance Conductors and
Engineered Wire Products–Europe segments and higher depreciation and
amortization.

Net income of $17.9 million, or $1.83 per basic and diluted share for the
first nine months of 2012, was higher than net income of $16.5 million, or
$1.68 per basic share and $1.65 per diluted share in the 2011 period,
primarily from increased operating income and a lower income tax provision
partially offset by higher interest expense from the Company’s June 2011 debt
refinancing.

Net debt (total debt less cash) was $198.8 million as of September 30, 2012, a
$24.2 million decrease from December 31, 2011 primarily from strong operating
results and lower working capital requirements.

Non-GAAP Results and Net Debt

In an effort to better assist investors and noteholders in understanding the
Company’s financial results, as part of this release, the Company is also
providing Adjusted EBITDA which is a measure not defined under accounting
principles generally accepted in the United States (GAAP). Adjusted EBITDA is
net income excluding interest expense, income tax expense, depreciation and
amortization expense, impairment charges, stock compensation expense,
gain/loss on sale of property, plant and equipment and assets held for sale,
amortization of deferred financing costs and loss on early extinguishment of
debt. Management uses Adjusted EBITDA as a measure in evaluating the
performance of our business. Other companies may define Adjusted EBITDA
differently. As a result, our measures of Adjusted EBITDA may not be directly
comparable to measures used by other companies. Below is a reconciliation of
this non-GAAP financial measure to the most directly comparable financial
measures calculated and presented in accordance with GAAP. Net debt as of
September 30, 2012 and December 31, 2011 is also presented below. In $
millions:

Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
                                                          
                                             3Q 2012           3Q 2011
Net income                                   $     5.0         $    2.2
Interest expense                                   6.0              6.3
Income tax expense                                 0.7              2.0
Depreciation & amortization                        4.3              3.9
Amortization of deferred financing costs           0.5              0.5
Loss on early extinguishment of debt               —                0.1
Other adjustments                                 0.1             0.5
Adjusted EBITDA                              $     16.6        $    15.5
                                                                    
                                             First Nine        First Nine
                                             Months            Months
                                             2012              2011
Net income                                   $     17.9        $    16.5
Interest expense                                   18.1             14.0
Income tax expense                                 7.4              10.0
Depreciation & amortization                        13.2             12.1
Amortization of deferred financing costs           1.6              1.3
Loss on early extinguishment of debt               —                0.5
Other adjustments                                 0.5             0.7
Adjusted EBITDA                              $     58.7        $    55.1

Net Debt

                                             September 30,     December 31,
                                             2012              2011
Cash                                         $     15.5        $    14.5
Total debt                                        214.3           237.5
Net debt                                     $     198.8       $    223.0
                                                                    

Additional financial information will be made available on or about November
12, 2012 through the Company’s investor website
(http://itwg.client.shareholder.com or http://www.internationalwiregroup.com)
in the section titled “Financial Information.”

About International Wire Group Holdings, Inc.

International Wire Group Holdings, Inc., through its wholly-owned subsidiary
International Wire Group, Inc., is a manufacturer and marketer of wire
products, including bare, silver-plated, nickel-plated and tin-plated copper
wire, engineered wire products and high performance conductors for other wire
suppliers, original equipment manufacturers and distributors. Its products
include a broad spectrum of copper wire configurations and gauges with a
variety of electrical and conductive characteristics and are utilized by a
wide variety of customers primarily in the aerospace, automotive, consumer and
appliances, electronics and data communications, industrial/energy and medical
electronics and medical device industries. The Company currently manufactures
and distributes its products at 20 facilities located in the United States,
Belgium, France, Italy and Poland.

Forward-Looking Information is Subject to Risk and Uncertainty

Certain statements in this release may constitute “forward-looking” statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all statements that are not historical
facts and can be identified by the use of forward-looking terminology such as
the words “believes,” “expects,” “may,” “will,” “should,” “seeks,” “pro
forma,” “anticipates,” “intends,” “plans,” “estimates,” or the negative of any
thereof or other variations thereof or comparable terminology, or by
discussions of strategy or intentions. These statements are not guarantees of
future performance and involve risks, uncertainties and assumptions as to
future events that may not prove to be accurate. Actual outcomes and results
may differ materially from what is expressed or forecasted in these
forward-looking statements. As a result, these statements speak only as of the
date they were made and we undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Many important factors could cause our results to
differ materially from those expressed in forward-looking statements. These
factors include, but are not limited to, fluctuations in our operating results
and customer orders, unexpected decreases in demand or increases in inventory
levels, changes in the price of copper, tin, nickel and silver, the failure of
our acquisitions and expansion plans to perform as expected, the competitive
environment of our industry, our reliance on our significant customers, lack
of long-term contracts, substantial dependence on business outside of the U.S.
and risks associated with our international operations, limitations due to our
indebtedness, loss of key employees or the deterioration in our relationship
with employees, litigation, claims, liability from environmental laws and
regulations and other factors.

For additional information regarding the factors that may cause our actual
results to differ from those expected by our forward-looking statements, see
“Risk Factors” in the Company’s 2011 financial report. This report is
accessible on the “Additional Financial Information” page on the Investor
Relations portion of the Company’s website, available at
http://itwg.client.shareholder.com or http://www.internationalwiregroup.com.

ITWG-G

Contact:

International Wire Group Holdings, Inc.
Glenn J. Holler, 314-238-1322
Senior Vice-President, Chief Financial Officer and Secretary
 
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