UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

[X]   Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2003,

OR

[   ]   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.

(256) 353-1310

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

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.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

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

The aggregate market value of the voting and non-voting common equity held by nonaffiliates of the registrant as of June 27, 2003, was approximately $69,000,000 based upon the closing price reported for such date on the New York Stock Exchange. For purposes of this disclosure, shares of Common Stock held by executive officers and directors of the registrant have been excluded because such persons may be deemed to be affiliates.

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

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for the annual stockholders meeting to be held on May 20, 2004, are incorporated by reference into Part III.

Table of Contents

FORM 10-K

YEAR ENDED DECEMBER 31, 2003

TABLE OF CONTENTS

PART I

Introduction

We are 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. We focus on custom-engineered, higher value-added tubular, 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, petrochemicals 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 us to offer packaged solutions and pursue cross-selling opportunities. Our technological expertise has helped us to establish strong and long-standing relationships with many of the leading users of higher value-added copper tube in North America and enables us to maintain leading market shares in our most important product and geographic markets.

We make available on our website, at no charge, http://www.wlv.com/, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after electronically filing or furnishing such material to the Securities and Exchange Commission. Additionally, we make available on our website and in print upon written request, at no charge, our corporate governance guidelines, the charters of our audit, compensation and corporate governance and nominating committees and a copy of our code of business conduct and ethics that applies to our directors, officers and employees, including our chief executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

History and Structure

We are a Delaware corporation organized in 1987. We are the successor to a business founded in Detroit in 1916.

We have expanded our operations through acquisitions and international growth over the past five years. In May 1998, we acquired a 240,000 square foot welded tube manufacturing facility in Jackson, Tennessee, and the related equipment and technology, from Korea-based Poongsan Corporation, for approximately $35.4 million in cash. In July 1998, we opened our Shanghai, China facility. This 60,000 square foot plant specializes in the manufacture of higher value added copper and copper alloy technical tube as well as brazed assemblies.

In September 2000, we acquired from Engelhard Corporation its joining products business, a leading manufacturer of brazing alloys and fluxes, as well as a supplier of lead-free solder, based in Warwick, Rhode Island, for approximately $41.8 million in cash.

In December 2001, we completed construction of our 33,000 square foot technical tube manufacturing facility in Esposende, Portugal. We invested approximately $9.0 million to complete the facility, which began commercial production in January 2002. In 2003, we began producing brazed assemblies for European customers in this facility.

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Industry

The industry in which we operate is multi-faceted. Several of our competitors produce tube products of a single type. In contrast, we produce a broad array of products, such as technical tube for large commercial air conditioners used in high-rise buildings, industrial tube and fabricated products used in residential and light commercial air conditioning units, wholesale tube used in commercial and residential construction, and copper and copper alloy tube used in power generation, petrochemical and marine applications. Moreover, our metal joining products are used in almost all of these applications.

Competition

While no single company competes with us in all of our product lines, we face significant competition in each of our product lines. Cerro Flow Products, Inc., Industrias Nacobre S.A. de C.V., KobeWieland Copper Products Inc., Wieland — Werke AG, Mueller Industries Inc., Olin Corporation, Outokumpu American Brass Company, J.W. Harris Company, Inc., Parker Hannifin Corp. and others compete with us in one or more product lines. Minimal product differentiation among competitors in our wholesale and rod and bar product lines creates a pricing structure that enables customers to differentiate products almost exclusively on price. In these product areas, certain of our competitors have significantly larger market shares than us, and tend to be the industry pricing leaders. If our competitors in these product lines were to significantly reduce prices, our business, operating results or financial condition could be adversely affected.

For certain of our higher value-added commercial products, which have higher margins, we compete primarily on the basis of the technical advantages of these products. Technical improvements by competitors could reduce our competitive advantage in these product lines and thereby adversely affect our business, operating results or financial condition. We could also be adversely affected if new technologies emerge in the air conditioning, refrigeration or other consumer industries that reduce or eliminate the need for copper and copper alloy tube, fabricated products and metal joining products. Certain of our products, such as plumbing tube, compete with products made of alternative substances, such as polybutylene plastic. A substantial increase in the price of copper could decrease the relative attractiveness of copper products in cases where an alternative exists and thereby adversely affect our business, operating results or financial condition.

Products

We classify our products as commercial products, wholesale products or rod, bar and other products.

Commercial Products

Commercial products consist of several types of technically enhanced tube and fabricated products made to customer specifications, as well as our metal joining products. We believe that we are the primary supplier of one or more commercial products to some of the world’s largest and best known manufacturers, particularly in the commercial and residential heating, ventilation and air-conditioning, refrigeration and home appliance industries. Generally, our technical tube and fabricated products are custom designed and manufactured for specific customer

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applications and sold directly to original equipment manufacturers. Because of the higher level of added value, profitability tends to be higher for commercial products than for our other products.

Our commercial products include:

Industrial Tube. Small (as small as .01 inches) and medium diameter copper tube used primarily by residential air conditioning, appliance and refrigeration equipment manufacturers is known as “industrial” tube. Industrial tube is made to customer specifications for equipment manufacturing. Our industrial tube products include coils in lengths in excess of one mile (to permit economical transport to and use by the customers), smooth straight tube, internally enhanced tube with internal surface ridges to increase heat transfer in air conditioning coils, and very small diameter capillary tube (for control valve applications).

Technical Tube. Technical tube is used to increase heat transfer in large commercial air conditioners, heat exchangers for power generating and chemical processing plants, water heaters, swimming pool and spa heaters and large industrial equipment oil coolers. Small, wedge-like grooves (fins) on the outer surface, together with internal enhancements of technical tube, increase surface area and refrigerant agitation, thereby increasing heat transfer efficiency. We were the first to commercially develop integral finned tube, in which the fins are formed directly from the wall of the tube, and we hold patents in this area.

Copper Alloy Tube. Copper alloy tube (principally copper mixed with nickel) is manufactured for certain severe uses and corrosive environments such as condenser tubes and heat exchangers in power generating plants, chemical plants, refineries and ships. Our copper alloy tube products include smooth and surface enhanced tube produced from a variety of alloys. Also included in the alloy tube category are surface enhanced titanium, brass and steel tube we produce from smooth tube supplied by outside sources.

Fabricated Products. Fabricated products encompass a wide variety of copper, copper alloy, steel and aluminum tube products and subassemblies for a number of different applications. Precision drawn tube in a variety of cross-sectional shapes and alloys can be supplied in exact tolerance cut lengths or coils. Specialty fabricated parts, complex brazed assemblies and components (such as return bends and manifolds) are produced for a wide range of applications. Capabilities include cutting, bending/swaging, end spinning, hole piercing/drilling, specialized coiling and brazing.

Metal Joining Products. Metal joining products include brazing alloys, fluxes and lead-free solder used in the air conditioning, plumbing, electronic, electrical component, jewelry, catalyst, lighting, shipbuilding, aerospace, general industrial and other metal-joining industries. There are over 2,000 product variations in this category.

Commercial product sales accounted for 74%, 77% and 76% of the Company’s net sales in 2003, 2002 and 2001, respectively.

Wholesale Products

Wholesale products consist of plumbing and refrigeration service tube produced in standard sizes and lengths primarily for plumbing, air conditioning and refrigeration service applications.

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Several major competitors manufacture copper tube in sizes most commonly from 1/2” to 4” in diameter. These products are considered commodity products because price, availability and delivery are the major competitive factors. Plumbing tube and refrigeration service tube are sold primarily through wholesalers and master distributors.

Wholesale product sales accounted for 19%, 17% and 17% of the Company’s sales in 2003, 2002 and 2001, respectively.

Rod, Bar and Other Products

Rod, bar and other products consist of a broad range of copper and copper alloy solid products, including round, rectangular, hexagonal and specialized shapes. Brass rod and bar are used by industrial equipment and machinery manufacturers for valves, fittings and plumbing goods. Copper bars are used in electrical distribution systems and switchgear. Copper and copper alloy rod and bar products are sold directly to manufacturers and to service centers that keep an inventory of standard sizes. Other products consist of various tube, rod, bar and other items sold by our product distribution facility in The Netherlands.

Rod, bar and other products accounted for 7%, 6% and 7% of the Company’s sales in 2003, 2002 and 2001, respectively.

Sales and Marketing

We use a direct sales force augmented by independently contracted sales agents to pursue global sales opportunities. In addition, we employ customer service representatives responsible for responding to customer questions and undertaking or initiating any required customer service response. We believe our sales structure forms a critical link in communicating with our customers. Our sales and marketing employees are particularly important in the higher value-added product segments, in which we often work with customers in their product enhancement and new product development efforts. The sales function is coordinated through key senior executives responsible for our sales and marketing efforts.

North America. Our sales structure in North America consists of sales officers and managers, field marketing representatives, customer service representatives and independent sales agents who are responsible for selling and servicing accounts.

International. Our overseas export sales are carried out both directly with major overseas customers and through foreign sales agents. We have sales, marketing and business development offices in Apeldoorn, The Netherlands and Shanghai, China.

For information concerning the amount of sales, gross profit and certain other financial information about foreign and domestic operations see Note 20 of the Notes to Consolidated Financial Statements.

Energy Efficiency and Governmental Regulations

We expect that demand for our higher value-added, energy efficient tubes will continue as manufacturers continue to seek ways to produce more energy efficient and lower operating cost units and as existing commercial air conditioners continue to be replaced in response to the ban on production of chlorofluorocarbons. Government regulations at local, state and federal levels

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periodically provide various incentives for more energy efficient products, such as air conditioners, refrigerators and similar appliances, which may also increase demand for our products. However, there can be no assurance that this anticipated demand will materialize, or that we will not face increased competition, with an adverse effect on profitability, from other manufacturers in this higher value-added segment.

Markets

Major markets for each of our product lines are set forth below:

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Key Customers

In 2003, 2002 and 2001 our 10 largest customers accounted for approximately 46%, 47%, and 44%, respectively, of our consolidated net sales. No single customer accounted for 10% or more of our consolidated net sales in 2003, 2002 or 2001.

Backlog

A significant part of our sales are based on short-term purchase orders. For this reason, we do not maintain a backlog and we believe that backlog is not necessarily a meaningful indicator of future results. A significant amount of our sales result from customer relationships wherein we provide a high degree of specialized service and generally become the largest supplier of a customer’s copper and copper alloy requirements. Under these arrangements, our customers provide forecasts of their requirements, against which purchase orders are periodically released. In several cases we have entered into multi-year arrangements with major customers to continue to serve as the predominant supplier and in many cases the exclusive supplier on a global basis.

Manufacturing

The manufacture of copper and copper alloy tube, fabricated products and metal joining products consists of casting, extruding, drawing, forming, joining and finishing processes. In most cases, the raw material is first cast into a solid cylindrical shape or “billet.’’ The billet is then heated to a high temperature, a hole is pierced through the center of the cylinder, and the cylinder is then extruded under high pressure. The material is either drawn to smaller sizes or reduced on a forging machine and then drawn to smaller sizes. The outside and/or inside surface may be enhanced to achieve the desired heat transfer qualities. Depending on customer needs, bending, shaping, precision cutting, forming, annealing (heating to restore flexibility), coiling or other operations may be required to finish the product.

Virtually all of our tube products are seamless with the exception of the welded tube manufactured at our Jackson, Tennessee location. Welded tube is made from a flat strip that is rolled and welded together at the edges.

Raw Materials, Suppliers and Pricing

Our principal raw materials are copper, nickel, zinc, tin and silver. In 2003, we purchased approximately 324 million pounds of metal, approximately 98% of which was copper. We contract for our copper requirements with a variety of sources, including producers, merchants, brokers, dealers and industrial suppliers. Our raw materials are available from a variety of sources, and we do not believe that the loss of any one source would materially affect our business, operating results or financial condition.

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The key elements of our copper procurement and product pricing strategies are the assurance of a stable supply and the avoidance of exposure to metal price fluctuations. The price of copper we purchase is based on fluctuating market prices, usually with the Commodities Exchange (COMEX) price as a benchmark. We generally have an “open pricing” option under which we may set the price of all or a portion of the metal subject to a purchase contract at any time up to the last COMEX trading day (usually two days before the end of the month) of the last month in the contract period.

In the majority of cases, the price of our products to our customers contains two components: (i) a metal charge based on the market value of the metal content on the date of shipment of the product to the customer; and (ii) a fixed fabrication charge. In other cases, we quote a firm price to the customer, which covers both the metal price and the fabrication charge. In either case, we minimize our exposure to metal price fluctuations through various strategies. Generally, at the time the metal price for the customer is established, we either price an equivalent amount of metal under our open pricing arrangements with our suppliers or purchase a copper forward contract for the equivalent amount of metal. It is not our policy to attempt to profit from fluctuations in copper prices by taking commodity risks or speculative commodity positions.

Beginning in April 2002 and in conjunction with changing our method of accounting for inventories from the last-in, first-out method to the first-in, first-out method, we have entered into commodity forward contracts to sell copper in order to mitigate the impact of fluctuating copper prices with regard to the valuation of our inventory. Under generally accepted accounting principles, these forward contracts are not designated as hedges and are marked to market each month with gains and losses recorded in cost of goods sold.

Research and Development

Our research and development efforts are primarily conducted in our Technology Center located in Decatur, Alabama and are devoted to new product development, manufacturing process improvements, new manufacturing process developments and new applications. While developing new products for general use, we work very closely with certain major customers to develop specific new products for their applications. To compliment our research and development capabilities, we engage with universities as well as governmental and private research organizations. Through our Technology Center we support the engineering and testing of specialized products and enhancements of our custom-engineered processes through which we tailor products to the specifications of each customer.

In 2002, we announced the introduction of the new, innovative Micro-Deformation Technology MDT^TM. This technology is being used to develop highly enhanced new heat transfer products for large chiller manufacturers. Additionally, this technology has enabled us to develop products for non-tube applications including electronic cooling, filtration, catalyst and others. We have continued our participation in several industrial, university and governmental research projects relating to more efficient heat transfer tubes for industrial, commercial and residential heating and cooling applications as well as refrigeration, power generation, chemical and petrochemical industries. Our research and development expense was $2.9 million in 2003, $3.1 million in 2002 and $3.7 million in 2001 and it is anticipated that a similar level of expenditure will be maintained in 2004. In addition to our Technology Center, we utilize our manufacturing facilities and technical personnel to assist in manufacturing process improvements as well as new product development as it relates to those manufacturing facilities.

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Environmental Matters

Our facilities and operations 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. We have incurred, and in the future may incur additional liabilities under environmental statutes and regulations. These potential liabilities could relate to contamination of sites we own or operate (including contamination caused by prior owners and operators of such sites, abutters or other persons), or have previously owned or operated, as well as the off-site disposal of hazardous substances.

We believe our operations are in substantial compliance with the terms of all applicable environmental laws and regulations as currently interpreted. We utilize an active environmental auditing and evaluation process to facilitate compliance with applicable environmental laws and regulations. However, we expect that future regulations and changes in the text or interpretation of existing regulations may subject our operations to increasingly stringent standards. While the precise effect of these changes on our business cannot be estimated, compliance with such requirements may make it necessary, at costs which may be substantial, to retrofit existing facilities with additional pollution-control equipment and to undertake new measures in connection with the storage, transportation, treatment and disposal of by-products and wastes.

We had a reserve of approximately $1.2 million for undiscounted estimated environmental remediation costs at December 31, 2003. The total cost of environmental assessment and remediation depends on a variety of regulatory, technical and factual issues, some of which cannot be anticipated. While we believe that the reserve, under existing laws and regulations, is adequate to cover presently identified environmental remediation liabilities, there can be no assurance that such amount will be adequate to cover the ultimate costs of these liabilities, or the costs of environmental remediation liabilities that may be identified in the future.

Employees

As of December 31, 2003, we had a total of 3,012 employees. Approximately 10% of our employees are represented by a union comprised of a majority of the hourly employees at our Montreal, Quebec plant who are covered by a collective bargaining agreement that expires on March 22, 2005. The maintenance department employees at our Shawnee, Oklahoma facility elected to be represented by the Arkansas Regional Council of Carpenters/United Brotherhood of Carpenters and Joiners of America in May 2003 but no first contract has been negotiated. There are approximately 37 employees in this bargaining unit. As a whole, we believe our relations with our employees are good.

Patents and Trademarks

We own a number of trademarks and patents (in the United States and other jurisdictions) on our products and related manufacturing processes and we have granted licenses with respect to some of our trademarks and patents. While we believe that our patents and trademarks have competitive value, we do not consider our success as a whole to be primarily dependent on our patents, patent rights or trademarks.

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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain of the statements contained in this report are made pursuant to the “Safe Harbor’’ provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our goals, beliefs, plans or current expectations, taking into account the information currently available to our management. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, when we use such words as “anticipate,” “intend,” “expect,” “believe,” “plan,” “may,” “should,” “would” or other words that convey uncertainty of future events or outcome, we are making forward looking statements. All statements which address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating to future sales, earnings, operating performance, property, plant and equipment expenditures and sources and uses of cash, are forward-looking statements. These forward-looking statements are subject to various risks and uncertainties that 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 or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.

With respect to expectations of future earnings, operating performance, property, plant and equipment expenditures and sources and uses of cash, factors that could affect actual results include, without limitation:

•		our ability to dispose of our properties held for sale and realize their carrying values;
•		our ability to achieve growth rates and profit projections assumed in the valuation of our goodwill;
•		the impact of interest rates on the valuations of our pension liabilities and goodwill;
•		cyclicality, seasonality and weather conditions, which affect the sales of our products;
•		the timing and magnitude of recovery from the recent economic downturn;
•		costs and cost savings related to the closing of our Booneville, Mississippi facility;
•		the persistence of low levels of U.S. commercial construction activity;
•		the impact of competitive factors in our industry, including the effect of pricing, product line offerings and other actions taken by our competitors;
•		our ability to maintain our relationships with our major customers;
•		demand for our products;

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•		our ability to achieve and the timeliness with which we achieve anticipated results from our capital improvement plan, cost reduction initiatives, product and process development activities, productivity and efficiency initiatives, global expansion activities, market share penetration efforts and working capital management programs;
•		our significant amount of debt and the restrictive covenants contained in our debt agreements;
•		our ability to service our debt and incur additional debt;
•		our ability to complete the extension and modification of our credit facility;
•		our potential exposure to environmental liabilities;
•		economic and political risks relating to our international operations;
•		currency risks relating to our international operations and our ability to hedge these risks;
•		our ability and the ability of our customers to maintain satisfactory employee relations, especially with unionized employees;
•		costs for labor and benefits including healthcare and pension costs;
•		extraordinary fluctuations in the markets and availability of raw materials and our ability to hedge the cost of raw materials effectively;
•		extraordinary fluctuations in the cost and availability of fuel and energy resources and our ability to hedge these costs;
•		risks to our competitive position from changing technology or the loss of our intellectual property;
•		business and economic risks relating to government regulations that impact our industry;
•		the mix of our geographic and product revenues;

and various other factors, many of which are beyond our ability to control or predict.

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Executive Officers of the Registrant

The following table sets forth certain information with respect to each of our executive officers as of December 31, 2003:

Dennis J. Horowitz has been the President and Chief Executive Officer and a director of our company since March 1998, and in January of 2001 he also became Chairman of the Board of Directors. Prior to joining our company, Mr. Horowitz served as Corporate Vice President and President of the Americas of AMP Incorporated, a high technology electric connector and interconnection systems company, since September 1994. Mr. Horowitz also serves as a director of Superconductor Technologies, Inc.

James E. Deason has been a director of our company since October 1995. Mr. Deason has been the Executive Vice President, Chief Financial Officer and Secretary of our company since September 1994. Prior to joining our company, Mr. Deason, a Certified Public Accountant, spent 19 years with Ernst & Young LLP and was a partner from 1988 until he joined our company.

Keith I. Weil has been the Senior Vice President, Tubing Products, of our company since December 1998. Prior to joining our company, Mr. Weil had been a Global Business Executive and General Manager Consumer/Commercial for AMP Incorporated since 1996. Prior to 1996, Mr. Weil was employed by Philips Electronics NV for fourteen years in positions that included President of Graner Company (a division of Philips), General Manager of Philips Circuit Assemblies and Vice President of Marketing for Philips Broadband.

Johann R. Manning, Jr. has been the Senior Vice President, Fabricated Products and General Counsel of our company since October 2001. He previously held the position of Senior Vice President of Human Resources and General Counsel from May 2000 until September 2001 and Vice President of Human Resources and General Counsel from May 1998 until April 2000. Prior to joining our company, Mr. Manning had served as Senior Counsel for Mercedes-Benz U.S. International, Inc., a vehicle manufacturer, since March 1998. Prior to joining Mercedes-Benz, Mr. Manning was employed for over eight years with Genuine Parts Company, a

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diversified wholesale distribution company, where he held various positions including Vice President of Human Resources and Corporate Counsel for its Motion Industries, Inc. subsidiary.

Massoud Neshan has been the Senior Vice President, Technology of our company since August 1999. Prior to joining our company, Mr. Neshan had served as Vice President of Engineering and Research and Development for Hill Phoenix, a subsidiary of The Dover Corporation, since March 1996. Prior to joining Hill Phoenix, Mr. Neshan was employed for six years with Nax Corporation where he held the position of Executive Vice President. Mr. Neshan has spent his entire career in the heating, ventilation, air conditioning/refrigeration industry.

Garry K. Johnson has been the Senior Vice President, Sales of our company since 2002. He previously held the positions of Vice President, Sales from 1998 until 2002, Industrial Marketing Manager from 1990 until 1998, Field Sales Representative from 1981 until 1990 and Production Supervisor from 1979 until 1981. Mr. Johnson has been employed by our company for twenty-five years.

Thomas A. Morton has been the Vice President of Purchasing and Logistics since February 1999. He previously held the positions for our Canadian operations of Metal Manager from January 1996 until January 1999 and Corporate Controller from May 1989 to December 1996. Prior to joining our company, Mr. Morton, a Chartered Accountant, was employed for ten years with Ernst & Young in Canada.

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United States Facilities

We own and operate each of the U.S. facilities described below, with the exception of our Altoona, Pennsylvania facility that is partially owned and partially leased from a local industrial development agency for $3,500 per year in perpetuity:

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In addition to the manufacturing facilities described above, we also own a 232,000 square foot facility in Roxboro, North Carolina that is not being used for production and is currently held for sale. Our corporate offices, with 29 employees at December 31, 2003, are comprised of approximately 15,000 square feet in a leased facility in Huntsville, Alabama.

Canadian Facilities

We own and operate the following Canadian manufacturing facilities:

We lease a 45,000 square foot warehouse in London, Ontario. Additionally, we own a 150,000 square foot facility in Fergus, Ontario whose operations were discontinued and which is currently held for sale. There was one employee at the Fergus, Ontario facility at December 31, 2003.

Other Facilities

We own a 33,000 square foot technical tube facility in Esposende, Portugal. Our Shanghai, China facility is leased from the Shanghai Waigaoqiao Free Trade Zone 3-U Development Co., Ltd. for a seven-year term expiring December 31, 2011. The following table describes our facilities in China and Portugal:

We also lease a facility in Apeldoorn, The Netherlands, comprised of a 16,000 square foot warehouse and 3,000 square feet of office space. There were 11 employees at the Apeldoorn facility at December 31, 2003.

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Our facilities and operations are subject to extensive environmental laws and regulations, and we are currently involved in various proceedings relating to environmental matters as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Environmental” and incorporated herein by reference. We are not involved in any legal proceeding that we believe could have a material adverse effect upon our business, operating results or financial condition. Additionally, the Company received notice in October 2003 from the Department of Justice that the investigation into possible violations of U.S. antitrust laws by the Grand Jury in the Northern District of Indiana, which the Company became aware of by the service of a subpoena in March 2001, has been closed as it relates to the Company with no action taken against the Company or any of our employees.

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No matters were submitted to a vote of security holders by the Company during the final quarter of the fiscal year covered by this report.

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PART II

Our Common Stock is traded on the New York Stock Exchange under the symbol “WLV.” As of March 5, 2004, there were 12,284,096 shares of Common Stock outstanding, held by 277 shareholders of record.

The following table sets forth, for the periods indicated, the range of high and low reported sale prices for our Common Stock on the New York Stock Exchange:

We did not declare or pay cash dividends on our Common Stock during the years ended December 31, 2003, 2002 or 2001. We do not currently plan to pay cash dividends on our Common Stock. In the foreseeable future, any future determination to pay cash dividends will depend on our results of operations, financial condition, contractual restrictions and other factors deemed relevant by the Board of Directors. We intend to retain earnings to support the growth of our business. In addition, our credit agreement and note indentures permit us to pay dividends on the Common Stock only if certain financial and other tests are met.

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The historical consolidated financial data presented below should be read in conjunction with the information set forth under “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements of our company beginning on page F-1.

The balance sheet data presented below as of December 31, 2003 and 2002 and the income statement data presented below for each of the years in the three-year period ended December 31, 2003, are derived from the audited Consolidated Financial Statements of our company beginning on page F-1. The other balance sheet and income statement data presented below also are derived from audited Consolidated Financial Statements of our company, which are not presented herein.

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(a)

During 2001 and 1999, we incurred charges that are included in cost of goods sold of approximately $1.4 million and $5.4 million, respectively. The 2001 charge of $1.4 million was related to realized and anticipated reductions in demand for our product and was for the write-down of slow moving or obsolete inventory. The 1999 charge was $5.4 million and included $3.7 million related to obsolete inventory, $0.8 million net book value of idled and obsolete machinery and equipment and $0.9 million of other charges related to the realignment of our manufacturing operations.

(b)		During 2003, we recognized restructuring and other charges of approximately $15.1 million ($9.9 million after tax). See Note 21 of the Notes to Consolidated Financial Statements.
		We recognized restructuring and other charges of approximately $1.5 million ($1.0 million after tax) in 2001. See Note 21 of the Notes to Consolidated Financial Statements.
		During 1999, we recognized restructuring and other charges of approximately $19.9 million ($12.5 million after tax). This charge included $10.0 million in expenses relating to the closing of our Roxboro, North Carolina facility, of which $8.6 million in expenses related to the write-down of impaired assets; $2.8 million in expenses related to the implementation of an indirect workforce reduction program; $3.6 million in expenses related to impaired assets as a result of relocating the Roxboro machinery and equipment to our other facilities and thereby displacing existing equipment; $1.9 million in expenses related to previously closed facilities, of which $1.8 million related to the write-down of impaired assets; $0.8 million in expenses related to the termination of an interest rate swap; and $0.8 million in professional fees and other costs primarily associated with acquisitions that were not completed.
(c)		Income from continuing operations for 2001, 2000 and 1999, adjusted to exclude amortization of expense recognized related to goodwill would have been $14.1 million, $28.2 million and $2.6 million.
(d)		We have classified the operating results of Wolverine Ratcliffs, Inc., equal to $(1.6) million, $(1.6) million, $(7.3) million, $0.8 million and $1.4 million (in each case net of tax) for the years ended 2003, 2002, 2001, 2000 and 1999, respectively, as discontinued operations. In addition, we recorded an estimated $23.9 million (net of tax) loss on the disposal of the Wolverine Ratcliffs operations in 2001. See Note 2 of the Notes to Consolidated Financial Statements.
(e)		Effective January 1, 1999, we adopted Statement of Position 98-5, “Reporting on the Costs of Start-Up Activities”, or SOP 98-5, which requires that costs related to start-up activities be expensed as incurred. The cumulative effect of adopting SOP 98-5 as of the beginning of 1999 was a charge of $5.8 million, net of tax.
(f)		Net (loss) income for 2001, 2000 and 1999 adjusted to exclude amortization expense related to goodwill would have been $(16.9) million, $29.2 million and $(1.7) million.
(g)		Reflects the payment of preferred stock dividends and accretion of preferred stock redemption requirements.
(h)		Source: Metals Week.

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ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our results of operations and financial condition. This discussion should be read in conjunction with our Consolidated Financial Statements and notes thereto.

Overview

We incurred a significant loss from continuing operations in 2003 of $39.0 million or $3.18 per share compared with income from continuing operations of $7.2 million or $0.58 per share and $11.4 million or $0.92 per share, in 2002 and 2001, respectively. The loss in 2003 included a goodwill impairment charge of $22.2 million or $1.81 per share and a restructuring charge of $9.9 million or $0.81 per share after tax. The goodwill impairment charge related to our Tube Group reporting unit primarily due to historical operating performance and projected growth assumptions for the Tube Group falling short of those previously assumed and resulted in the carrying value of goodwill, for the Tube Group, substantially exceeding its fair value. The $9.9 million restructuring charge related to: (1) the closure of our Booneville, Mississippi facility; (2) severance cost related to a reduction in our North American workforce of approximately 200 employees; and (3) a further write down of assets held for sale in North Carolina.

The loss in 2003, exclusive of the goodwill impairment and restructuring charges, was the result of many issues which have challenged our Company throughout 2003, including an unfavorable mix of demand for our products, cost escalations particularly for natural gas, healthcare and pension expenses, selling price pressures and unfavorable currency movements. During 2003, the U.S. dollar weakened against the Canadian dollar. Our Canadian facilities were particularly affected because approximately fifty percent of the goods manufactured in our Canadian operations are sold into the U.S. and the sales are denominated in U.S. dollars. Profitability for our wholesale products, the only significant product group for which we are not able to pass metal price changes directly to the customer, was negatively impacted in 2003 by increasing COMEX copper prices and a shortage in supply of recycled materials used in the production of these products. Additionally, we incurred higher cost due to manufacturing inefficiencies and professional expenses related to union organizing efforts at our Decatur, Alabama and Shawnee, Oklahoma plants in 2003. The Decatur workforce voted to remain union free while the maintenance employees at the Shawnee facility elected to be represented by the Arkansas Regional Council of Carpenters/United Brotherhood of Carpenters and Joiners of America. Also, we incurred manufacturing inefficiencies and a loss of production time at our London, Ontario facility in conjunction with the northeastern power outages in August 2003.

Another contributing factor to our loss in 2003 was the impact of escalating copper prices on our inventory hedge position. The average COMEX copper price in December 2003 was $1.00 per pound, as compared to $0.72 per pound in December 2002, an increase of approximately 39%. In order to mitigate the impact of fluctuating copper prices on our metal inventory, we hedge the valuation of our inventory by selling copper forward. An increase in the price of copper results in a loss on our copper forward derivative contract, offsetting gains we may otherwise incur when we sell our physical inventory at prevailing market prices. In 2003, we recorded a $5.7 million loss on our copper forward derivative contract that was not completely offset by increased margins on sales of our physical inventory. Of this loss, $3.6 million was realized in the fourth quarter of 2003. This occurred because copper prices rose sharply in December 2003

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coupled with the fact that we did not purchase a significant amount of raw material inventory in late December 2003 due to the curtailment of our operations during the two-week Christmas and New Year holiday periods. As our inventories turn and copper prices stabilize or decline, we expect to recover the losses realized in prior periods.

Looking ahead, we believe 2004 will show improvement over 2003. We have begun to see some improvement in the industrial sector of the North American economy and improvement in demand across all of our product segments. With the improving economy and increased demand for wholesale products driven by stronger non-residential construction, we have been able to increase pricing in 2004 for these products. Unlike 2003, we have hedged our natural gas costs for all of 2004 and at prices below 2003. Further, pension and postretirement cost are anticipated to be relatively stable in 2004 as compared to 2003. We also expect to begin realizing approximately $8.0 million of annualized cost savings from the reduction of our workforce and approximately $3.0 million of annualized cost savings from the closure and reallocation of production of our Booneville facility. However, increases in COMEX copper prices and premiums paid in excess of COMEX for copper as well as the continuation of a strong Canadian dollar against the U.S. dollar will likely negatively impact earnings in 2004.

General

The following general factors should be considered in analyzing our results of operations:

Critical Accounting Policies and Estimates

We base this discussion and analysis of results of operations, cash flow and financial condition on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. When we prepare these financial statements, we make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities that we report. On an on-going basis, we evaluate our estimates, including but not limited to those affecting allowances for doubtful accounts, inventories, intangible assets, long-lived assets, income taxes, restructuring reserves, medical, dental and workers’ compensation benefits, pensions and other post-retirement benefits, environmental and other contingencies and litigation. We consider market conditions, customers’ demand for our products, historical trends and various other factors when we make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates when different assumptions or conditions are considered. We believe the accounting policies critical to the presentation and understanding of our financial condition and results of operations and involving the more significant judgments and estimates relate to inventory, long-lived assets, income taxes, retirement and pension plans and environmental remediation. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of the Company’s Board of Directors and the Audit Committee has reviewed the disclosures presented below relating to them.

Inventory

We state our raw materials, work-in-process and finished goods inventories at the lower of first-in, first-out cost or market. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements and compare these with our current

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inventory levels. We reduce the inventory that we report on our financial statements for estimated obsolescence or unmarketable inventory as our projected demand requirements decrease due to market conditions, technological and product life cycle changes and longer than previously expected usage periods. The amount of this reduction is equal to the cost of our inventory less the estimated market value of our inventory. We estimate market value based on assumptions about future demand and market conditions.

Long-lived assets

We periodically review the values assigned to long-lived assets such as property, plant and equipment, assets held for sale and goodwill. We estimate the depreciable lives of property, plant and equipment and review the assets for impairment if events or changes in circumstances indicate that we may not recover the carrying amount of an asset.

Assets held for sale include the net assets of our unoccupied Roxboro, North Carolina and Fergus, Ontario facilities. These assets have been written down to estimated fair value less estimated cost to sell. We have estimated the carrying value for these assets based on our projections of the net realizable value from the sale of these assets. Although we believe we have appropriately reduced the carrying values of all assets held for sale to their estimated recoverable amounts, net of disposal costs where appropriate, actual results could be different and our results of operations in future periods could reflect gains or losses on these assets.

On January 1, 2002, we adopted Statement of Financial Accounting Standards, (SFAS) No. 142, Goodwill and Other Intangible Assets. This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets. SFAS No. 142 presumes that goodwill has an indefinite useful life and thus should not be amortized, but rather tested at least annually for impairment using a lower of cost or fair value approach. During the third quarter of 2003, we conducted the required annual goodwill impairment review and based on the results of this review, we recorded a goodwill impairment charge of $23.2 million. If we are unable to achieve our estimated growth rates and profit projections, if interest rates increase or if our other estimates or assumptions change in the future, we may be required to record additional impairment charges for goodwill in the future.

Income taxes

For financial reporting purposes, we determine our current and deferred tax liabilities in accordance with the liability method of accounting for income taxes as specified in Statement of Financial Accounting Standards No. 109 (SFAS No. 109) “Accounting for Income Taxes.” The provision for income taxes is the sum of income taxes both currently payable and deferred. Currently payable income taxes represent the liability related to our income tax returns for the current year while the net deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reported on the balance sheet. The changes in deferred tax assets and liabilities are determined based upon the changes in differences between the basis of assets and liabilities for financial reporting purposes and the basis of assets and liabilities for tax purposes as measured by the enacted tax rates that we estimate will be in effect when these differences reverse. In addition to estimating the future tax rates applicable to the reversal of tax differences, we also evaluate whether future tax benefits (related to future tax deductions and net operating loss carryforwards) will be realized. In some cases, this involves considering whether taxable income in future periods will be sufficient to fully realize the deferred tax benefits

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(through reduced cash payments for income taxes). Accordingly, we believe that the estimate related to the provision for income taxes is critical to our results of operations.

As of December 31, 2003, we have $5.1 million of gross deferred tax assets resulting from state operating loss carryforwards that are available to reduce taxable income in future periods. As of December 31, 2003 and 2002, we recorded valuation allowances against a portion of our state tax carryforwards of $3.6 million and $2.4 million, respectively. Under the provisions of SFAS No. 109, we determined our valuation allowances by considering the realization of these state carryforwards in light of our cumulative operating results for the current and preceding years, reversing taxable temporary differences, future taxable income and ongoing prudent and feasible tax planning strategies. If our estimates and related assumptions regarding these factors change in the future, we may be required to record an additional valuation allowance against our deferred tax assets. This would result in additional income tax expense in our consolidated statement of operations.

There have been no valuation allowances recorded against our U.S. federal and foreign net operating loss carryforwards because we believe there will be adequate taxable income generated in the carryforward periods through operations or reversal of timing differences to realize these operating loss carryforwards.

In addition, we operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. We believe adequate provision for income taxes has been made for any potential audits.

Pension and Postretirement Benefit Costs

Net pension and postretirement cost was $8.1 million, $6.3 million and $1.7 million, respectively, for the years ended December 31, 2003, 2002 and 2001. Total estimated pension and postretirement expense in 2004 is expected to be the same as in 2003. These expenses are primarily included in cost of goods sold and selling, general and administrative expenses. Lesser amounts are included in restructuring charges and discontinued operations. In 2003 and 2001 we did not make a contribution to our U.S. qualified defined benefit pension plans. In 2002, we made a $5.0 million voluntary contribution to our U.S. qualified defined benefit pension plans. In 2003, 2002 and 2001, we made a $0.6 million, $0.1 million and $0.2 million contribution, respectively, to our Canadian defined benefit pension plans. In 2003, we also transferred $4.3 million to a rabbi trust to partially fund the vested benefit obligations to certain executives under our nonqualified supplemental executive retirement plan.

Our pension and postretirement benefit costs are developed from actuarial valuations. Inherent in these valuations are key assumptions including discount rates and expected long-term rates of return on plan assets. Material changes in our pension and postretirement benefit costs may occur in the future due to changes in these assumptions, changes in the number of plan participants, changes in the level of benefits provided, changes to the level of contributions to these plans and other factors. Estimates and assumptions concerning our pension and postretirement obligations and related periodic costs can be found in Notes 11 and 12 of the Notes to Consolidated Financial Statements.

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The discount rate is subject to change each year, consistent with changes in applicable high-quality, long-term corporate bond indices. Based on bond indices as of December 31, 2003, we used discount rates to determine our benefit obligations of 6.25% at December 31, 2003 for both our U.S. and Canadian based plans, respectively, compared to 7.0% and 6.75% at December 31, 2002 and 7.25% and 7.0% at December 31, 2001 for our U.S. and Canadian based plans, respectively. We used discount rates to determine our net periodic benefit cost of 7.0% and 6.75% for 2003, 7.25% and 7.0% for 2002 and 7.75% and 7.5% for 2001, for our U.S. and Canadian based plans, respectively. This had the effect of increasing our accumulated pension benefit obligation by approximately $16.9 million for the year ended December 31, 2003 and increasing our estimated pension expense for 2004 on a pre-tax basis by $1.6 million. A quarter percentage point decrease in the discount rate would increase our pension expense for 2004 by approximately $0.6 million on a pre-tax basis.

The expected long-term rate of return on pension plan assets is selected by taking into account the asset mix of the plans, the fact that the plan assets are actively managed to mitigate downside risks, the historical performance of the market in general and the historical performance of the plan assets over the past ten years. Based on these factors, our expected long-term rates of return used to determine net periodic benefit cost are 9.0% and 7.5% for 2003 and 9.5% and 8.5% for 2002 and for 2001 for our U.S. and Canadian based plans, respectively. A quarter percentage point decrease in the expected long-term rate of return would increase our pension expense for 2004 by approximately $0.3 million on a pre-tax basis. The required use of the expected long-term rate of return on plan assets may result in recognized returns that are greater or less than the actual returns on those plan assets in any given year. Over time, however, the expected long-term rate of return on plan assets is designed to approximate the actual long-term returns. For the ten year periods ended December 31, 2003 and 2002, the U.S. Retirement Plan assets have provided a weighted rate of return of 10.8% and 9.8%, respectively, and the Canadian based plans have provided a weighted rate of return of 7.8% and 8.7%, respectively.

On December 31, 2003, the accumulated benefit obligation related to our pension plans exceeded the fair value of pension plan assets. This difference is primarily attributed to an increase in the accumulated benefit obligation that resulted from the decrease in the interest rate used to discount the projected benefit obligation to its present settlement amount. As a result, and in accordance with SFAS 87, we have an additional minimum pension liability of $24.2 million, reflected as an accumulated other comprehensive loss before taxes of $19.1 million and an intangible asset of $5.1 million (equal to unrecognized prior service cost).

Environmental Remediation

Our operations are subject to extensive federal, state and local environmental laws and regulations. The major environmental laws to which we are subject, include, among others, the Federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA,” also known as the Superfund law), the Toxic Substances Control Act, the Federal Water Pollution Control Act, and the Hazardous Materials Transportation Act. CERCLA can impose joint and several liability for cleanup and investigation costs, without regard to fault or legality of the original conduct, on current and predecessor owners and operators of a site, as well as those who generate, or arrange for the disposal of, hazardous substances. The risk of incurring environmental liability is inherent in our industry. We own property that is, or has been, used for industrial purposes. Use of these properties may subject us to potentially material liabilities

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relating to the investigation and cleanup of contaminants, claims alleging personal injury, or property damage as the result of exposures to, or release of, hazardous substances.

We conduct studies, as well as site surveys, to determine the extent of environmental damage and determine the necessary requirements to remediate this damage. These studies incorporate the analysis of our internal environmental engineering staff, environmental engineering consultants and legal counsel. From these studies and surveys, a range of estimates of the costs involved is derived and a liability and related expense for environmental remediation is recorded within this range. Our recorded liabilities for these issues represent our best estimates (on an undiscounted basis) of remediation and restoration costs that may be required to comply with present laws and regulations. These estimates are based on forecasts of the total future direct costs related to environmental remediation. These estimates change periodically as additional or better information becomes available as to the extent of site remediation required, if any. In addition, advanced technologies related to the detection, appropriate remedial course of action and anticipated cost can influence these estimates. Certain changes could occur that would materially effect our estimates and assumptions related to costs for environmental remediation. If we become subject to more stringent environmental remediation costs at known sites, discover additional contamination, discover previously unknown sites, or become subject to related personal or property damage, we could incur material costs in connection with our environmental remediation. Accordingly, management believes that estimates related to the accrual of environmental remediation liabilities are critical to our results of operations.

For the years ended December 31, 2002 and 2001 the expense related to environmental remediation was $0.8 million and $0.1 million, respectively, and is included in cost of goods sold on the consolidated statements of income. For the year ended December 31, 2003, we did not have any expense related to environmental remediation. Additionally, as of December 31, 2003, we have a total liability recorded for environmental remediation of $1.2 million. This amount was derived from a range of reasonable estimates based upon our studies and site surveys described above and in accordance with Statement of Financial Accounting Standards No. 5 “Accounting for Contingencies” (“SFAS 5”). For environmental remediation sites known as of December 31, 2003, if the highest estimate from the range (based upon information presently available) were recorded, the total estimated liability would have increased $0.7 million in 2003.

Components of Cost of Goods Sold

The cost of raw materials, principally copper, is a substantial portion of our cost of goods sold. The rise and fall of copper prices and other metals affects the levels of our net sales, costs of goods sold and the carrying value of inventory, even in the absence of increases or decreases in business activity. While we have entered into commodity forward contracts to sell copper in an effort to mitigate the impact of fluctuating copper prices on the valuation of our inventory, these forward contracts are not accounted for as effective hedges. Thus, the rise and fall of copper prices may impact our gross margin and may have a material impact on our levels of gross profit for a particular reporting period. However, across reporting periods and except for our wholesale products, the cost of raw materials is generally passed along to our customers.

Variability of Wholesale Product Gross Profit

Gross profit attributable to sales of our wholesale products has fluctuated and may continue to fluctuate substantially from period to period. Gross (loss) profit from sales of these products was

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$(0.3) million in 2003, $4.4 million in 2002 and $9.3 million in 2001. Gross profit derived from the sale of wholesale products is mainly affected by changes in selling prices and the cost of metal. Selling prices for these products are affected principally by general economic conditions, especially the rate of housing starts, general commercial building activity, industry competition and manufacturing capacity, industry production levels and other market factors. All of these factors are beyond our control. Wholesale products are also the only significant product group for which we are not able to pass metal price changes directly to our customers.

Impact of Product Mix

Our products range from higher value-added and higher margin commercial products to commodity-type products such as wholesale tube products and rod and bar products. Our overall profitability from period to period is affected by the mix of sales within these categories. We have substantial sales in Canada, and our product mix in that market, as compared to the U.S. market, reflects a much higher percentage of our commodity-type products.

Cyclical and Seasonal Nature of Demand

Demand for our products, particularly our wholesale products, is cyclical and is significantly affected by changes in general economic conditions that affect our customers’ markets. Demand in some industries to which we sell, including the residential air conditioning industry and, to a lesser extent, the commercial air conditioning industry, is also seasonal. Our sales to the residential air conditioning market are generally greater in the first and second quarters of the year and lower in the third and fourth quarters because manufacturers typically increase inventories in the early part of the year in anticipation of summer air conditioning sales and housing starts. In addition, sales of industrial tube are adversely affected in years with unusually cool summers.

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 the fourth quarter of 2001, we recorded a $31.5 million ($23.9 million after tax) estimated loss on the disposal of the WRI operations, which included a $2.5 million ($1.6 million after tax) provision for estimated losses during the expected phase-out period. In 2002, we stopped all manufacturing operations of WRI and we liquidated substantially all of its inventory and net receivables. We began liquidating the equipment of WRI in 2002 and we anticipate finalizing the sale of the remaining equipment by April 2004. We are currently negotiating for the sale or lease of the building. We anticipate that the remaining liabilities which includes our pension obligation will be settled during 2004. In the fourth quarters of 2003 and 2002, we recorded a $2.4 million ($1.6 million after tax) and a $2.5 million ($1.6 million after tax) loss, respectively, from discontinued operations for remaining estimated closing costs in excess of the provision for losses recorded in the fourth quarter of 2001.

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Results of Continuing Operations

Year-Ended December 31, 2003, Compared with Year-Ended December 31, 2002

Consolidated net sales from continuing operations increased by $45.8 million, or 8.3%, to $596.3 million for the year ended December 31, 2003 from $550.5 million for the year ended December 31, 2002. Pounds shipped increased by 17.1 million pounds, or 5.5%, to 327.3 million in 2003 from 310.2 million in 2002. The average COMEX copper price for 2003 was $0.81 per pound, as compared to $0.72 per pound in 2002, an increase of approximately 13.1%.

Pounds of commercial products shipped increased by 7.9 million pounds, or 3.8%, to 217.5 million in 2003 from 209.6 million in 2002. This increase in shipments was primarily due to an increase in shipments of industrial tube, partially offset by declines in shipments of alloy products. Shipments of industrial tube have been strong due to our success in obtaining market share penetration for this product in the United States. Shipments of alloy products decreased due to weak industrial demand in the current economy. Sales of commercial products increased $21.2 million, or 5.0%, to $442.5 million in 2003 from $421.2 million in 2002. This increase in sales was attributable to increased shipments of industrial tube, an increase in COMEX copper prices and a favorable mix of fabricated products, partially offset by lower volumes of alloy products and modest reductions in unit fabrication revenues for industrial tube and joining products. Gross profit from commercial products decreased by $12.7 million, or 24.6%, to $39.0 million in 2003 from $51.7 million in 2002, attributable primarily to specific escalations of cost that are discussed in more detail below as well as the decline in fabrication revenues per pound.

Pounds of wholesale products shipped increased by 10.9 million pounds, or 13.8%, to 90.0 million in 2003 from 79.1 million in 2002 due to the expansion of our customer base for these products. Sales of wholesale products increased by $21.2 million, or 22.5%, to $115.1 million in 2003 from $93.9 million in 2002, due to the increase in shipments, as well as an increase in revenue per pound. Revenue per pound was up $0.09 to $1.28 in 2003, reflecting an increase in COMEX copper prices. Gross profit from wholesale products decreased $4.6 million to a loss of $0.3 million in 2003 from a profit of $4.3 million in 2002, due to an increase in metal costs which we are not able to completely pass on to our customers, as well as specific escalations of costs that are discussed in more detail below, offset somewhat by increased volumes. Metal costs increased due to an increase in COMEX copper prices as well as a shortage in the available supply and higher costs of recycled metal used in the production of wholesale products.

Pounds of rod and bar products shipped decreased by 1.7 million pounds, or 8.0%, to 19.8 million in 2003 from 21.6 million in 2002 due to a weak U.S. industrial environment. Sales of rod, bar and other products increased $3.4 million, or 9.6%, to $38.7 million in 2003 from $35.4 million in 2002. Other products are primarily those products sold from our distribution center in The Netherlands. Gross profit from rod, bar and other products decreased $0.3 million, or 10.8%, to $2.1 million in 2003 from $2.4 million in 2002, due to decreased shipments of rod and bar products, partially offset by an increase in gross profit from the activities of our distribution center in The Netherlands which also benefited from a strong Euro. Gross profit was also impacted by specific escalations of cost that are discussed in more detail below.

Consolidated gross profit decreased $17.6 million, or 30.1%, to $40.9 million in 2003 from $58.4 million in 2002. Gross profit in 2003 was negatively impacted by the aforementioned increase in metal costs for wholesale products, decreased shipments of rod and bar products, and a modest

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decline in fabrication revenues per pound for commercial products. We also had approximately $7.6 million of additional cost in 2003 compared to 2002 related to natural gas, healthcare, pensions and worker’s compensation expenses. Gross profit also declined approximately $3.7 million because of the translation impact of the Canadian dollar to the weak U.S. dollar and the fact that approximately fifty percent of sales from our Canadian operations are denominated in U.S. dollars. Additionally, gross profit declined $5.7 million due to a loss on our copper forward sales position that we have in place to hedge against a decrease in the valuation of our copper inventory and that was not offset by gains upon the sale of our physical inventory at prevailing market prices. Copper prices spiked sharply, especially during the fourth quarter of 2003, resulting in a loss on our hedge position that was not offset by the purchase of inventory, due in part to the curtailment of our operations for the two-week holiday period in December 2003. Gross profit in 2003 also declined approximately $1.2 million because of manufacturing inefficiencies and professional expenses related to union activities at our Decatur, Alabama and Shawnee, Oklahoma plants. The Decatur workforce voted to remain union free while approximately 37 maintenance employees at our Shawnee facility elected to be represented by the Arkansas Regional Council of Carpenters/United Brotherhood of Carpenters and Joiners of America. Further, gross profit in 2003 declined because of the northeastern power outages in August 2003 which caused our London, Ontario plant to lose approximately two production days and normal production at the plant to be interrupted for approximately another week due to rolling black-outs. Gross profit in 2003 benefited from a $0.8 million cash payment resulting from a class action litigation settlement in the copper market in the second quarter of 2003.

Consolidated selling, general and administrative expenses for the year ended December 31, 2003 increased by $1.5 million, or 4.9%, to $32.1 million, from $30.6 million in 2002. Consolidated selling, general and administrative expenses were approximately five percent of sales for both 2003 and 2002. The increase in selling, general and administrative expenses was mainly due to a $0.7 million increase in salary expense and a $1.3 million increase in pension expense, offset by a $0.9 million reduction in employee related expenses, primarily associated with incentive pay that is tied to financial performance. Salary expense increased due to merit and cost of living pay increases and due to the fact that selling, general and administrative expenses in the first quarter of 2002 included a 10% pay reduction for salaried employees which was subsequently restored. Pension expense increased primarily due to the impact of the decline in fair value of plan assets at January 1, 2003.

Operating (loss) income from continuing operations was a loss of $(6.3) million for the year ended December 31, 2003, as compared to income of $27.8 million in 2002. The operating loss in 2003 was primarily due to the aforementioned $17.6 reduction to gross profit, $1.5 million increase in selling, general and administrative expenses, and $15.1 million of restructuring charges, as described under “Restructuring and Other Charges” below.

Consolidated net interest expense increased $1.5 million to $21.2 million in 2003 from $19.7 million in 2002. Interest expense increased $1.5 million in 2003 because on March 27, 2002, we issued $120.0 million in principal amount of 10.5% Senior Notes replacing approximately $97.3 million of borrowings under our old revolving credit facility which had an average interest rate of 4.9% in the first quarter of 2002. Consolidated net interest expense is net of interest income and capitalized interest of $0.6 million and $0.1 million, respectively, for 2003 and $0.5 million and $0.7 million, respectively, for 2002. Consolidated net interest expense in 2002 is also net of interest income from loans to the discontinued operations of Wolverine Ratcliffs, Inc. of $0.8

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