Thomas & Betts (TNB) 8-K Reports Fourth Quarter and Full Year 2005 Earnings

NEWS
For Immediate Release

THOMAS & BETTS CORPORATION

REPORTS FOURTH QUARTER AND FULL YEAR 2005 EARNINGS

Fourth Quarter Sales Up 11 Percent; Earnings Per Share $0.42;

E.P.S. Includes $0.27 Charge for Repatriated Foreign Earnings

MEMPHIS, Tenn. - Feb. 6, 2006 - Thomas & Betts Corporation (NYSE:TNB) today reported fourth quarter 2005 net earnings of $25.8 million or $0.42 per diluted share. These results include an income tax charge of $16.4 million ($0.27 per share) related to the repatriation of $200 million in foreign earnings during the quarter. In 2004, fourth quarter net earnings were $24.2 million or $0.40 per diluted share.

Fourth quarter 2005 net sales rose 10.7 percent to $443.0 million, compared to $400.1 million in the prior-year period. Higher sales volume and price increases to offset higher material and energy costs contributed significantly to the sales improvement. The effect of foreign currency on sales was not significant in the quarter.

Earnings from operations were $59.2 million in the quarter, up $18.7 million or 46.0 percent compared to $40.5 million reported in the fourth quarter 2004. As a percentage of sales, fourth quarter earnings from operations improved to 13.4 percent from 10.1 percent in the prior year period. Higher sales volumes, favorable mix and operating efficiency improvements contributed to the earnings increase in 2005.

Fourth quarter 2005 gross margin was 30.4 percent of sales, compared to 28.5 percent in the prior year period. Selling, general and administrative expense was $75.4 million, or 17.0 percent of sales, compared to $73.7 million, or 18.4 percent of sales, in the fourth quarter 2004.

Income tax expense reflected favorable adjustments of $3.9 million ($0.06 per share) in the fourth quarter 2005 while the prior-year period included favorable adjustments of approximately $0.8 million ($0.01 per share).

“Each of our businesses continued to perform well in the fourth quarter, achieving robust year-over-year sales growth and double-digit segment earnings as a percent of sales,” said Dominic J. Pileggi, chairman and chief executive officer. “We are also pleased with the strong sales and earnings momentum realized for the full year. We successfully offset higher material and energy costs, further improved operating efficiencies and delivered very strong operating cash flow.”

FULL YEAR RESULTS

Net sales for the full year 2005 were $1.7 billion, up 11.8 percent from 2004 net sales of $1.5 billion. Higher sales volume and price increases to offset higher material and energy costs contributed significantly to the sales improvement while favorable foreign currency exchange accounted for approximately $22 million of the sales increase.

2005 net earnings were $113.4 million or $1.86 per diluted share. This compares to $93.3 million or $1.57 per diluted share in 2004. 2005 results include the previously noted income tax charge of $16.4 million ($0.27 per share) related to the repatriation of foreign earnings while 2004 results benefited from a $13.0 million pre-tax gain

($0.14 per share) from the sale of a minority interest in a European joint venture. Both periods reflect favorable income tax adjustments.

SEGMENT RESULTS

Electrical segment fourth quarter sales were $352.5 million, a 9.6 percent increase over the fourth quarter 2004. For the full year, electrical segment sales were $1.4 billion compared to $1.3 billion in 2004. Improved sales volume and higher selling prices contributed significantly to the sales growth. The effect of foreign currency was not significant in the quarter and accounted for approximately $21 million of the sales increase for the full year. Solid demand in industrial, light commercial construction and utility distribution markets drove the sales improvement.

Electrical segment earnings were $44.9 million in the fourth quarter, up 52.6 percent compared to the fourth quarter 2004, while full year 2005 segment earnings increased 34.5 percent to $161.8 compared to 2004. As a percent of sales, fourth quarter segment earnings were 12.7 percent in 2005 and 9.2 percent in 2004. For the full year, segment earnings were 11.7 percent of sales in 2005 compared to

9.6 percent for full year 2004. The earnings improvement reflects higher sales volumes, operating efficiencies and the company’s continued ability to offset higher material and energy costs through higher selling prices.

Sales in the Steel Structures segment were $49.5 million in the quarter, up 20.3 percent compared to the prior year period. For the full year, segment sales were $186.0 million, up 33.2 percent on a year-over-year basis. Continued strong demand by utilities and the company’s increased manufacturing capacity contributed to the sales improvement.

Steel Structures segment earnings were $8.2 million in the fourth quarter, up 24.6 percent from $6.6 million in segment earnings in the prior-year period. Full year 2005 segment earnings increased 84.7 percent to $29.0 million, compared to $15.7 million in 2004. As a percent of sales, fourth quarter 2005 segment earnings were 16.6 percent compared to 16.1 percent in the fourth quarter 2004. For the full year, segment earnings were 15.6 percent of sales compared to 11.2 percent in 2004. Higher sales volumes and favorable mix drove the year-over-year earnings improvement.

Fourth quarter 2005 HVAC segment sales increased 9.5 percent year over year to $41.0 million. For the full-year 2005, HVAC sales rose 7.7 percent to $132.1 million, compared to 2004. Segment earnings were $6.4 million, up 34.2 percent compared to the fourth quarter 2004. Full year segment earnings increased 41.4 percent to $14.6 million, compared with $10.3 million in 2004. As a percent of sales, fourth quarter segment earnings were 15.6 percent compared to 12.7 percent in the 2004 period. For the full year, segment earnings were 11.0 percent of sales compared to 8.4 percent for the prior year. The earnings improvement reflects disciplined cost controls, improved operational efficiency and higher sales.

CASH FLOW AND DEBT HIGHLIGHTS

Thomas & Betts continued to demonstrate strong cash generation and ended 2005 with approximately $509 million in cash and marketable securities. Improved profitability and a continued emphasis on tightly managing working capital contributed to the strong cash performance.

At December 31, 2005, total debt was $538 million, or 33.8 percent of total capitalization, compared to 37.7 percent of total capitalization at the end of 2004.

2006 DIRECTIONAL GUIDANCE

“We believe that we will continue to see solid underlying demand in industrial, commercial and utility markets in 2006. Given this, we expect mid-single digit sales growth driven primarily by volume and earnings per diluted share in the range of  $2.35 to $2.45 for the full year 2006,” said Pileggi.

The company’s 2006 earnings guidance includes expense of approximately $0.06 per share due to the adoption of SFAS 123 (R), “Share-Based Payment.”

CORPORATE OVERVIEW

Thomas & Betts Corporation (www.tnb.com) is a leading designer and manufacturer of electrical connectors and components used in industrial, commercial, communications and utility markets. The company is also a leading producer of commercial heating units and highly engineered steel structures used, among other things, for utility transmission. Headquartered in Memphis, Tenn., the company has manufacturing, distribution and office facilities worldwide.

###

NOTE: The attached financial tables support the information in this news release:

Consolidated Statements of Operations

Segment Information

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

CONTACT: Tricia Bergeron (901) 252-8266 or tricia.bergeron@tnb.com

CAUTIONARY STATEMENT

This press release includes forward-looking statements that are identified by terms such as "optimistic," "trend," “will,” and "believe." These statements discuss business strategies, economic outlook and future performance. These forward-looking statements make assumptions regarding the company's operations, business, economic and political environment, including, without limitation, customer demand, government regulation, terrorist acts and acts of war. The actual results may be materially different from any future results expressed or implied by such forward-looking statements. Please see the "Business Risks" section of the company's Form 10-K for the fiscal year ended December 31, 2004 for further information related to these uncertainties. The company undertakes no obligation to publicly release any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events.

CONFERENCE CALL AND WEBCAST INFORMATION

Thomas & Betts will hold a conference call/webcast to discuss the company’s fourth quarter and year-end 2005 results on Tuesday, February 7, 2006 at 11:00 a.m. EST (10:00 a.m. CST). To access the call, please call 201-689-8341. The call can also be accessed via the Thomas & Betts corporate Web site at www.tnb.com . The conference call will be recorded and available for replay through 12:00 midnight EST on Tuesday, February 14, 2006. To access the replay, please call 201-612-7415, account number 9517, pass code 188365.

THOMAS & BETTS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Quarter Ended						Year to Date
	December 31,			December 31,			December 31,			December 31,
	2005			2004			2005			2004
Net sales	$	443,036		$	400,120		$	1,695,383		$	1,516,292
Cost of sales		308,486			285,905			1,195,256			1,085,150
Gross margin		134,550			114,215			500,127			431,142
Gross margin - % of net sales		30.4	%		28.5	%		29.5	%		28.4	%
Selling, general and administrative		75,400			73,713			296,132			287,024
Selling, general and administrative - % of net sales		17.0	%		18.4	%		17.5	%		18.9	%
Earnings from operations		59,150			40,502			203,995			144,118
Earnings from operations - % of net sales		13.4	%		10.1	%		12.0	%		9.5	%
Income from unconsolidated companies		408			315			1,377			2,167
Interest expense, net		(4,890	)		(7,348	)		(25,214	)		(30,608	)
Other (expense) income, net		(798	)		(728	)		(4,298	)		(825	)
Gain on sale of equity interest		-			-			-			12,978
Earnings before income taxes		53,870			32,741			175,860			127,830
Income tax provision		28,101			8,495			62,452			34,575
Net earnings	$	25,769		$	24,246		$	113,408		$	93,255
Net earnings per share:
Basic earnings per share	$	0.42		$	0.41		$	1.89		$	1.59
Diluted earnings per share	$	0.42		$	0.40		$	1.86		$	1.57
Average shares outstanding:
Basic		60,686			58,889			60,054			58,610
Diluted		61,758			59,933			61,065			59,357

THOMAS & BETTS CORPORATION AND SUBSIDIARIES

Segment Information

(In thousands)

(Unaudited)

	Quarter Ended						Year to Date
	December 31,			December 31,			December 31,			December 31,
	2005			2004			2005			2004
Net sales:
Electrical	$	352,539		$	321,541		$	1,377,338		$	1,253,990
Steel Structures		49,494			41,129			185,995			139,633
HVAC		41,003			37,450			132,050			122,669
Total net sales	$	443,036		$	400,120		$	1,695,383		$	1,516,292
Segment earnings:
Electrical	$	44,932		$	29,443		$	161,823		$	120,289
Steel Structures		8,239			6,613			28,998			15,704
HVAC		6,387			4,761			14,551			10,292
Total reportable segment earnings		59,558			40,817			205,372			146,285
Total reportable segment earnings - % of net sales		13.4	%		10.2	%		12.1	%		9.6	%
Interest expense, net		(4,890	)		(7,348	)		(25,214	)		(30,608	)
Gain on sale of equity interest		-			-			-			12,978
Other		(798	)		(728	)		(4,298	)		(825	)
Earnings before income taxes	$	53,870		$	32,741		$	175,860		$	127,830

THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
		December 31,		December 31,
		2005		2004
ASSETS
Current assets:
Cash and marketable securities	$	508,896	$	337,717
Receivables, net		185,391		172,745
Inventories		198,107		207,158
Other current assets		57,748		61,275
Total current assets		950,142		778,895
Net property, plant and equipment		267,026		276,144
Goodwill		462,810		463,264
Investments in unconsolidated companies		115,665		114,922
Other assets		124,753		122,527
Total assets	$	1,920,396	$	1,755,752
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	150,804	$	2,830
Accounts payable		138,060		120,336
Accrued liabilities		115,547		115,243
Total current liabilities		404,411		238,409
Long-term debt		387,155		543,085
Other long-term liabilities		76,240		72,539
Shareholders' equity		1,052,590		901,719
Total liabilities and shareholders' equity	$	1,920,396	$	1,755,752

THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Year to Date
	December 31,			December 31,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	113,408		$	93,255
Adjustments:
Depreciation and amortization		50,327			54,136
Gain on sale of equity interest		-			(12,978	)
Deferred income taxes		28,159			12,523
Changes in operating assets and liabilities, net:
Receivables		(15,440	)		1,282
Inventories		11,756			(12,682	)
Accounts payable		17,837			3,250
Accrued liabilities		2,704			(3,490	)
Funding to qualified pension plans		(28,693	)		(78,187	)
Other		13,039			6,802
Net cash provided by (used in) operating activities		193,097			63,911
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses		(16,526	)		-
Purchases of property, plant and equipment		(36,455	)		(25,419	)
Marketable securities		(105,664	)		(40,304	)
Proceeds from sale of equity interest		-			20,929
Other		720			5,948
Net cash provided by (used in) investing activities		(157,925	)		(38,846	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and other borrowings		(7,291	)		(139,096	)
Stock options exercised		34,650			14,666
Net cash provided by (used in) financing activities		27,359			(124,430	)
EFFECT OF EXCHANGE RATE ON CASH		3,022			7,679
Net increase (decrease) in cash and cash equivalents		65,553			(91,686	)
Cash and cash equivalents at beginning of period		151,189			242,875
Cash and cash equivalents at end of period	$	216,742		$	151,189
Cash payments for interest	$	37,896		$	44,203
Cash payments for income taxes	$	36,470		$	12,219
Prior periods reflect a reclassification between cash and cash equivalents and marketable securities to conform to the current year presentation.