First-Quarter 2009 Results

    * Revenue of $117.3 million  * Adjusted EBITDA of $9.0 million  * Adjusted EPS of $(0.18) per share  * Total debt (net of cash and cash equivalents) reduced by    $37.9 million on a sequential basis 

Management Comments

Commenting on the Company's results, Gary Yetman, president and CEO, said, "Our operating results were within our expected range for the quarter in spite of the ongoing difficult economic conditions. We are also encouraged by recent signs of demand stabilization in certain areas, however at this point we cannot conclude that an overall bottoming-out in volumes has occurred."

Mr. Yetman added, "Although our operating results continue to be impacted by lower volume levels, we are pleased to have generated strong operating cash flow of approximately $39.0 million during the quarter, compared to negative operating cash flow of $3.5 million in the same period last year. This strong cash generation, coupled with our focus on working capital, allowed us to reduce our total debt by $37.9 million during the quarter. This continues to demonstrate our commitment to proactively managing our business to mitigate the effects of current market conditions. In addition, at the end of March 2009, we had over $102 million in combined credit availability under our revolver and cash on hand, and we have no required long-term debt repayments until 2012."

Mr. Yetman concluded, "Taking into consideration our expectations for continued softness through the second quarter as our distributors and OEM's face reduced demand from suppliers to the automotive industry and OEM customers, we expect Adjusted EBITDA to be between $7.0 million and $10.0 million for the quarter ended June 30, 2009. Furthermore, absent any further deterioration in demand, we believe our second half results will improve from our first half results as we realize benefits from our seasonal business and the full benefit of our capacity rationalization efforts."

First-Quarter Financial Results Summary

For the first quarter of 2009, Coleman generated a net loss of $64.8 million, or $(3.85) per diluted share, as compared to net income of $3.3 million, or $0.19 per diluted share, for the same period of 2008. The 2009 results include a pre-tax, non-cash goodwill impairment charge of $69.5 million, or $(3.64) per diluted share which was recorded as the result of interim goodwill impairment tests performed during the 2009 first quarter in light of certain factors and circumstances including a significant decline in the Company's market capitalization during the quarter, as well as the continuing recessionary economic environment and weak industry conditions. The amount of the charge recorded in relation to our Distribution segment reflects the Company's current best estimate based on testing performed to date as we have not yet completed all of the analysis involved due to the complexities inherent in the required testing processes. We expect to finalize this goodwill impairment analysis during the second quarter of 2009. There could be material adjustments to the goodwill impairment charge when the related tests are finalized. Any adjustments to our preliminary estimates as a result of completing this evaluation will be recorded in our financial statements for the second quarter ended June 30, 2009. This impairment charge includes a significant amount of goodwill without corresponding tax basis, thereby reducing the associated tax benefit for the pretax charge and the Company's effective tax rate for the second quarter of 2009.

Additionally, Coleman's first-quarter 2009 results included $0.7 million, or $(0.03) per diluted share, in restructuring charges incurred in connection with severance payments to be made for headcount reductions and for costs incurred for facilities closed during 2008. Restructuring costs were $0.2 million for the same period of 2008 attributable to the integration of facilities acquired in 2007 as part of the Company's acquisition of Copperfield.

Excluding the above-noted items, first-quarter of 2009 earnings largely reflect decreased operating income within the Company's Distribution and OEM segments as a result of weakened demand and uncertain, difficult economic conditions, which have caused customers to lower their inventory levels. Somewhat offsetting reduced earnings in the 2009 first quarter was a decrease in both selling, engineering, general and administrative expense, and lower interest expense as a result of lower outstanding debt levels.

Coleman reported net sales for the 2009 first quarter of $117.3 million compared to net sales of $252.5 million in the same period last year, which represents a decrease of 53.5 percent. Volume (total pounds shipped) decreased 39.4 percent in the first quarter of 2009 compared to the prior-year period. The sharper decline in net sales relative to volume declines primarily reflects the impact of lower average copper prices in the first quarter of 2009 as compared to the same quarter last year.

The Company continues to strengthen its balance sheet. Net working capital was approximately 13.5 percent of net sales for the 2009 first quarter, and improved by 1.8 percentage points as compared to the fourth quarter of 2008. Additionally, our net debt (net of cash) was reduced by $148.1 million from $366.7 million at March 31, 2008, to $218.6 million at March 31, 2009.