UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended January 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 1-4682
THOMAS & BETTS CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-1326940
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1555 Lynnfield Road, Memphis, Tennessee 38119
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(901) 682-7766
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, Par Value $.50 New York Stock Exchange
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. YES X NO___
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 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]
The aggregate market value of the voting stock held by
nonaffiliates of the registrant as of February 3, 1995:
$1,304,525,743
(For purposes of this filing only, the registrant classified all
executive officers and directors as affiliates).
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
Class Outstanding at February 3, 1995
Common Stock, Par Value $.50 19,631,435 Shares
DOCUMENTS OR PARTS THEREOF INCORPORATED BY REFERENCE
Form 10-K Part Into Which the
Document or Part Thereof Document is Incorporated
1994 Annual Report to Shareholders Part I, Item 1
Part II, Items 5-8
Part IV, Items 14(a)(1)
1995 Proxy Statement Part III, Items 10-13
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(Items either not applicable or not material have been
excluded.)
(a) (c) General Development and Narrative Description of
Business
Thomas & Betts Corporation ("the Corporation") designs,
manufactures and markets a broad line of electrical and
electronic connectors and components as well as other related
products for worldwide construction and original equipment
manufacturer ("OEM") markets. In North America, the Corporation
is one of the largest manufacturers of electrical connectors and
accessories for industrial, commercial and residential
construction, renovation, and maintenance applications and is a
leading supplier of transmission poles, towers and industrial
lighting products to the utility and telecommunications
industries. The Corporation is also a worldwide designer and
manufacturer of electronic connectors and flat cable, which are
sold primarily to OEMs in the automotive, computer, office
equipment, test equipment, instrumentation, industrial automation
and telecommunications industries.
The Corporation was established in 1898 as a sales agency
for electrical wires and raceways and was incorporated in New
Jersey in 1917, where it maintained its corporate headquarters
until relocated at the end of 1993 to Memphis, Tennessee, the
principal business site of the Corporation's operations. It has
expanded its business and product line through internal
development and acquisitions. The 1992 acquisition of FL
Industries Holdings, Inc., whose operating business was known as
American Electric, and ten other product line acquisitions since
then (four in 1994), represent a continuation of the
Corporation's strategy to expand its product line and markets
served and to enhance customer service. The Corporation acquired
American Electric for consideration totaling $436.8 million.
American Electric was a leading manufacturer of a broad range of
electrical products and accessories for industrial and
construction, utility and retail markets.
Since the beginning of 1994, the Corporation has
supplemented internal product development efforts with four
acquisitions: a circuit protection product line ($30 million in
annualized sales); a Canadian cable tray product package ($10
million in sales); Commander Electrical Products, Inc., a
Canadian manufacturer of electrical outlet boxes ($35 million in
sales); and Union non-metallic electrical outlet boxes ($20
million in sales). The Corporation also purchased a 29 percent
interest in privately held Leviton Manufacturing Co., Inc., the
largest U.S. manufacturer of wiring devices.
In the third quarter, the Corporation announced a major
effort to upgrade and streamline its operations. As a result, a
$79 million pre-tax restructuring charge for optimizing
operations was recorded. The funding for the acquisitions,
investment in Leviton and our initiative to improve operations
came in part from the sale of the Vitramon ceramic chip capacitor
division in July 1994.
The Corporation currently operates in three business
segments: Electrical Construction Components, Electronics/OEM
Components and Other Products and Components (principally
heaters, utility electrical components, transmission poles and
towers, and telecommunication components).
The Electrical Construction components are manufactured and
assembled at facilities located in the United States, Puerto
Rico, Canada, and Mexico and are sold primarily in North America.
The Electronics/OEM components are manufactured at facilities in
the United States, Europe, Mexico, Japan, and Singapore and are
sold in North America, Europe, and Asia. The Other Products are
manufactured in the U.S. and sold primarily in North America.
The Corporation's products are sold worldwide through
electrical and electronic distributors and directly to OEMs and
other end users. No one of the Corporation's end users or
distributors accounted for more than 4% of the Corporation's 1994
net sales.
The Corporation generally considers electrical construction
components to be those that connect, terminate, protect and
manage raceways, wires and cables for the distribution of
electrical power, and considers electronic/OEM components to be
those that carry electronic data, voice and video signals.
The Corporation's electrical components include fittings and
accessories for electrical raceways, crimp and mechanical
connectors for small wires and power cables, metal switch and
outlet boxes, wire fastening devices and markers, insulation
products, metal framing, and lighting fixtures. Acquisitions in
1994 added cable trays, circuit breakers, safety switches, meter
centers, non-metallic outlet boxes and additional metallic outlet
boxes to the Corporation's electrical product offering. The
Corporation's electrical components are used in industrial,
commercial and residential construction markets. The Corporation
also manufactures electrical components for retail consumer use.
The Corporation's electronic components include connectors
for use both inside equipment and for interconnecting equipment,
as well as related components used on printed circuit boards such
as electronic connectors. The Corporation manufactures
electronic components for the automotive, computer, office
equipment, test equipment, instrumentation, and industrial
automation industries.
The Corporation's Other Products and Components include
electrical components for the utility and heating, mechanical and
refrigeration ("HMR") markets, transmission and distribution
poles and lattice steel transmission towers, telecommunication
splice enclosures, connectors, and heaters and other components.
ELECTRICAL CONSTRUCTION COMPONENTS
The Corporation sells its electrical components to
industrial, commercial and residential construction customers.
The Corporation's electrical construction components market
includes industrial, commercial and residential construction and
renovation companies, electrical contractors, and maintenance and
repair operations. The Corporation has thousands of customers,
and no single end user, distributor or retailer accounted for
more than 4% of the Corporation's 1994 sales. Total Electrical
Construction Components sales were $526.5, $453.0, and $441.5
million and 49%, 47% and 47% of the Corporation's total sales for
1994, 1993 and 1992, respectively.
The Corporation designs, manufactures and markets thousands
of different electrical connectors, components and other products
for industrial, commercial and residential construction
applications, including (i) fittings and accessories for
electrical raceways; (ii) fastening products, such as plastic and
metallic ties for bundling wire and flexible tubing; (iii)
terminals for small wires and power cables; (iv) power
connectors, such as compression and mechanical connectors for
high current power and grounding applications; (v) indoor and
outdoor switch and outlet boxes, covers and accessories; (vi)
floor boxes; (vii) metal framing, used as structural supports for
conduits, cable trays, electrical enclosures and lighting
raceways; (viii) ground rods and clamps; (ix) products for
outdoor security, roadway and adverse and hazardous location
lighting; (x) circuit breakers, safety switches and meter
centers; and (xi) other products, including insulation products,
wire markers, multiple outlet centers and application tooling
products.
The Corporation markets its electrical components under
various brand names. These brand names and the related products
include THOMAS & BETTS and T&B electrical products and
electricians supplies products, TY-RAP and TY-FAST cable ties,
STA-KON terminals, STEEL CITY indoor switch and outlet boxes,
covers, floor boxes and conduit fittings, IBERVILLE outlet boxes,
covers, and rough-in fittings, PERFECT-LINE outdoor lampholders
and boxes and covers, BLACKBURN and COLOR-KEYED power connectors
and grounding devices, T&B wire connectors, tools and
accessories, KINDORF and SUPERSTRUT metal framing products,
AMERICAN ELECTRIC LIGHTING and HAZLUX lighting products, UNION
outlet boxes, THOMAS & BETTS and ZIMSCO circuit breakers, safety
switches and meter centers, T&B, CANSTRUT, and ELECTROTRAY cable
tray, ELECTRIPAK lighting and multiple outlet centers and certain
other electrical products.
In North America, the Corporation's components for
industrial, commercial and residential construction customers are
sold through electrical distributors and retail outlets such as
home centers and mass merchants. The Corporation has
relationships with over 2,000 national, regional and independent
distributors and buying groups with locations across North
America. The Corporation has a network of factory and independent
sales representatives who work with distributors, end users and
retail outlets to increase demand for its products.
The Corporation believes that it has strong relationships
with its distributors as a result of the breadth and quality of
its product line, innovative service programs, product
innovation, competitive pricing and brand name recognition among
its customers.
The Corporation also manufactures and distributes its
components internationally. Certain of the Corporation's
standard components are sold in countries where they conform to
the applicable local electrical requirements, while other
components are specially designed and manufactured to conform to
local standards. The Corporation also markets electrical
components through offshore sales agents and domestic exporters.
ELECTRONIC/OEM COMPONENTS
The Corporation is a worldwide designer, manufacturer and
marketer of electronic connectors, flexible interconnects, flat
cable, premises wiring management components and other
components. Total Electronic/OEM Components sales were $250.4,
$238.4 and $250.9 million and 23%, 25% and 27% of the
Corporation's total sales for 1994, 1993 and 1992, respectively.
The Corporation's electronic components are sold primarily
to OEMs in the automotive, information services, office
equipment, test equipment, instrumentation, industrial automation
and telecommunications businesses, commercial offices, with the
remainder of the components going to others such as electronic
distributors and contractors. No single end user or distributor
of the Corporation's electronic components accounted for more
than 3% of the Corporation's 1994 net sales.
The Corporation sells a variety of electronic/OEM components
including: (i) printed circuit connectors; (ii) IDC connectors
for mass termination of flat cables; (iii) custom engineered
connectors for automotive and professional electronics
applications; (iv) flexible interconnects, flat cables and
assemblies for automotive and other applications; (v) cable ties;
(vi) terminals; (vii) D-subminiature connectors, a broad group of
industry standard connectors; and (viii) modular voice and data
connectors, twinax and coax connectors, baluns, patch panels,
jack and wall plates and related components for use in mainframe-
to-terminal systems and personal computer-based local area
networks in commercial properties. These components are sold
under various brand names, including T&B electronic connectors,
ANSLEY IDC flat cable and connectors, FLEXSTRIP jumpers, TY-RAP
and TY-FAST cable ties and HOLMBERG D-subminiature and card edge
connectors, and NEVADA WESTERN, ARMIGER, OMNI and EPITOME
premises wiring brand names.
The Corporation, both in the United States and
internationally, designs and produces highly engineered
electronic components, including both standard components and
specifically designed components for end user applications. Many
of the components specifically designed for end user applications
are developed jointly with the customer. In certain instances,
the Corporation is the sole supplier for customer-specific
components which may also become standard components for similar
applications. Components sold to information service customers
enable them to use economical unshielded two-stick pair telephone
wiring instead of the more expensive alternatives.
In North America, the Corporation sells its standard
components through electronic distributors and direct, while
providing customer-specific components directly to major OEMs.
The Corporation sells through national, regional and local
distributors serving a large customer base.
The Corporation also manufactures and markets its
electronic/OEM components internationally, with design,
manufacturing and distribution capabilities in Europe and the
Pacific Region. In Europe, as in North America, electronic/OEM
components are sold primarily to automotive, computer, office
equipment, test equipment, instrumentation, industrial automation
and telecommunications markets and certain of the electronic
components are developed and manufactured for specific customer
applications.
There has been a trend on the part of OEM customers to
reduce their number of preferred suppliers, focusing on companies
that can meet quality and delivery standards and that have a
global presence, a broad product package, strong design
capability and competitive prices. The Corporation has achieved
a preferred supplier designation from many of its most important
OEM customers for electronic components and continues to seek
this preferred status from other accounts.
OTHER PRODUCTS AND COMPONENTS
The Corporation sells its other products and components,
comprised of heating products, transmission poles and towers,
telecommunication components and other components, through
distributors and end users. Total Other Products sales were
$299.2, $266.1 and $247.2 million and 28%, 28% and 26% of the
Corporation's total sales for 1994, 1993 and 1992, respectively.
Heating Products
The Corporation designs, manufactures and markets heating
products for nonresidential end uses such as commercial and
industrial buildings. There are thousands of customers for the
Corporation's heating products and no single end user or
distributor accounted for more than 1% of the Corporation's 1994
net sales.
Products include gas, oil and electric unit heaters, gas-
fired duct furnaces, indirect and direct gas-fired make-up air
heaters, and infrared heaters for the heating, ventilation and
air conditioning ("HVAC") marketplace under the REZNOR brand
name.
The Corporation's products are sold through HVAC,
mechanical, and refrigeration distributors in hundreds of
locations in North America. HVAC, mechanical and refrigeration
distributors are reducing their vendor base. The Corporation
believes that the broad array of its heating products and the
brand name recognition of REZNOR by its customers increase its
attractiveness to HVAC, mechanical, and refrigeration
distributors. The Corporation uses independent manufacturers'
representative organizations in connection with its heating sales
efforts in North America. REZNOR products are also marketed in
Europe and the Pacific Region.
Transmission and Distribution Poles and Towers
The Corporation designs, manufactures and markets
transmission and distribution poles and towers for North American
power and telecommunications companies. These products are
primarily sold to five types of end users: investor-owned
utilities; cooperatives, which purchase power from utilities and
manage its use; municipal utilities; cable television operating
companies; and telephone companies. The Corporation's utility
and telecommunications customer base includes over 300 different
companies and other entities. No single utility or
telecommunications end user accounted for more than 1% of the
Corporation's 1994 sales.
The Corporation's products include tubular steel
transmission and distribution poles and lattice steel
transmission towers. The Corporation manufactures and sells its
transmission towers and its transmission and distribution poles
under the LEHIGH, POWER STRUCTURES, MEYER, and THOMAS & BETTS
brand names. The Corporation believes that its sales of towers,
poles and related products are enhanced by its ability to design
and manufacture quality, customized products for specific
purposes or locations.
The Corporation's poles and towers are sold directly to end
users and are custom manufactured according to a particular
utility's specifications. Products must typically be pre-
approved by the end user. The Corporation utilizes
manufacturers' representative organizations throughout the United
States in conjunction with its direct sales force to gain
customer approvals. The Corporation also sells lattice towers
and steel poles internationally.
Telecommunication Components
The Corporation designs, manufactures, and markets T&B
aerial, pole, pedestal and buried splice enclosures, T&B
connectors, KOLD-N-KLOSE encapsulation and sheath repair systems,
TY-RAP cable ties, and specialty devices for cable television
companies and telephone operating companies. These components
are sold both directly to end users and through distributors. No
single end user or distributor of the Corporation's
telecommunication components accounted for more than 1% of the
Corporation's 1994 net sales.
Other Components
The Corporation designs, manufactures and markets flood,
roadway and security lighting fixtures; and connectors, grounding
systems, fastening and metal framing components for North
American power companies and HMR distributors. These products
are primarily sold to four markets: investor-owned utilities;
cooperatives, which purchase power from utilities and manage its
use; municipal utilities; and HMR distributors. No single
utility end user or distributor accounted for more than 1% of the
Corporation's 1994 sales.
The Corporation's other component products include BLACKBURN
high-voltage connectors and grounding systems, and AMERICAN
ELECTRIC LIGHTING roadway, security area lighting fixtures,
SUPERSTRUT metal framing and TY-RAP and TY-FAST cable ties.
The Corporation's other component products are sold both
directly to end users and through distributors. Direct sales
typically occur when products such as lighting fixtures are
custom manufactured according to a particular utility's
specifications. Otherwise products are usually sold through
distributors that specialize in selling to utilities or heating
contractors. The Corporation utilizes manufacturers'
representative organizations throughout the United States in
conjunction with its direct sales force to gain customer
approvals.
MANUFACTURING AND DISTRIBUTION
The Corporation employs advanced processes in order to
manufacture quality products. The Corporation's manufacturing
processes include high-speed stamping, precision molding,
machining, plating and automated assembly. The Corporation makes
extensive use of computer-aided design and computer-aided
manufacturing (CAD/CAM) software and equipment to link product
engineering with its factories.
The Corporation also utilizes other advanced equipment and
techniques in the manufacturing and distribution process,
including computer software for scheduling, material
requirements, shop floor control, capacity planning, and the
warehousing and shipment of products.
The Corporation believes that its products enjoy a
reputation for quality in the markets in which they are sold.
The Corporation has implemented quality control processes in its
design, manufacturing, delivery and other operations in order to
further improve product quality and the service level to
customers. These techniques include just-in-time manufacturing
programs for more efficient use of machine tools in manufacturing
different products, statistical process control, statistical
problem solving, and other processes related to the Corporation's
SIGNATURE SERVICE DMI (Distributor/Manufacturer Integration)
program.
From its origin as a delivery guarantee, SIGNATURE SERVICE
has evolved into a partnership for profitability that encompasses
purchasing incentives, extensive marketing support, training, and
service discounts. The number of distributor locations in the
DMI program grew to several hundred in 1994, and by the end of
1995, the Corporation expects about half of its sales to
electrical distributors will be to distributors in the SIGNATURE
SERVICE DMI program. The DMI program is capable of handling both
national and regional chains as well as the one-location
distributor. Portions of the SIGNATURE SERVICE DMI program are
being applied to another segment of the Corporation's business.
Electronic data interchange, for example, is already standard for
relationships with OEM's and electronic distributors, so DMI is
also appropriate as an enhancement in this segment.
The Corporation manufactures its products on a worldwide
basis, with manufacturing operations throughout North America, in
Europe and in the Pacific Rim.
The Corporation purchases a wide variety of raw materials
for the manufacture of its products, including metals such as
brass, copper, aluminum, zinc, steel plate, steel strip,
malleable iron castings, and resins. The Corporation's sources
of raw materials and component parts are well established and are
sufficiently numerous to avoid serious interruption of production
in the event that certain suppliers are unable to provide raw
materials and component parts.
RESEARCH AND DEVELOPMENT
The Corporation has research, development and engineering
capabilities in each of the three regions of the world in which
it operates in order to respond locally to its customers' needs
and technological requirements. The Corporation believes that it
has a reputation for innovation based upon its ability to develop
quality, new and/or improved products that meet the specific
application needs of its customers.
The Corporation allocates significant resources to its
research and development activities. The Corporation's research,
development and engineering expenditures for the creation and
application of new and improved products and processes, were
$20.8 million, $18.7 million and $17.4 million for 1994, 1993 and
1992, respectively.
The research and development activities of the Corporation
are focused on specific product areas. Certain of the
Corporation's recent new products and enhancements include
connectors and enclosures for construction markets, terminators
for high speed computer building wiring, special automotive
connectors, fine pitch connectors, a new cable tie line, outdoor
floodlights, gas-fired tubular infrared heaters and unit heaters
for European markets, and closures for telecom circuits.
PATENTS AND TRADEMARKS
The Corporation owns approximately 1,099 active patents
worldwide and has numerous patent applications currently pending.
The Corporation has over 200 trademarks, including THOMAS &
BETTS, T&B, TY-RAP, TY-FAST, STA-KON, ANSLEY, FLEXSTRIP,
BLACKBURN, STEEL CITY, KINDORF, HAZLUX, AMERICAN ELECTRIC
LIGHTING, COLOR-KEYED, SUPERSTRUT, PERFECT-LINE, REZNOR, ANCHOR
METALS, LEHIGH, MEYER, NEVADA WESTERN, ELECTRIPAK, WESTLINE,
HOLMBERG and ZINSCO. While the Corporation considers its patents
and trademarks (including trade dress) to be valuable assets, it
does not believe that its competitive position is dependent
solely on patent or trademark protection or that its operations
are dependent on any individual patent or trademark. The
Corporation does not consider any of its licenses, franchises or
concessions to be material to its business.
COMPETITION
The Corporation encounters competition in all areas of its
business. The Corporation competes primarily on the basis of
product quality, technology, price, performance and customer
service. There are many companies which manufacture a number of
products which compete with those of the Corporation. All of the
Corporation's products are in competition with products of other
manufacturers, some of which have greater financial and other
resources than the Corporation.
EMPLOYEES
As of January 1, 1995, the Corporation had approximately
7,400 full-time employees worldwide. As part of the
restructuring announced in the third quarter of 1994, a total of
approximately 350 salaried and 1,300 hourly jobs are expected to
be eliminated at facilities to be closed or reconfigured while
approximately 200 salaried and 1,250 hourly jobs are expected to
be added at current or newly-opened facilities.
(b) Financial Information About Industry Segments
The Corporation operates in three industry segments.
Financial information by industry segment follows:
In thousands 1994 1993 1992
Net Sales:
Electrical Construction Components $ 526,534 $ 453,022 $ 441,472
Electronic/OEM Components 250,419 238,363 250,893
Other Products and Components 299,212 266,124 247,183
Total 1,076,165 957,509 939,548
Earnings from Operations before Restructuring:
Electrical Construction Components (1) 84,960 75,440 77,961
Electronic/OEM Components 21,110 11,702 15,659
Other Products and Components (1) 26,644 24,268 23,683
General Corporate (29,137) (24,352) (15,956)
Total 103,577 (2) 87,058 101,347
Earnings from Operations:
Electrical Construction Components (1) 32,249 75,440 67,961
Electronic/OEM Components (2,027) 11,702 10,659
Other Products and Components (1) 24,813 24,268 23,683
General Corporate (30,469) (24,352) (15,956)
Total 24,566 (2) 87,058 86,347
Identifiable Assets:
Electrical Construction Components 474,655 386,416 363,100
Electronic/OEM Components 208,441 209,836 232,762
Other Products and Components 319,969 324,201 308,364
Discontinued Operations - 81,098 82,241
General Corporate 205,147 131,631 130,596
Total 1,208,212 1,133,182 1,117,063
Capital Expenditures:
Electrical Construction Components 29,053 14,221 19,881
Electronic/OEM Components 16,193 8,743 12,961
Other Products and Components 10,025 5,033 4,983
Discontinued Operations 7,797 10,511 9,202
General Corporate 3,838 47 407
Total 66,906 38,555 47,434
Depreciation and Amortization:
Electrical Construction Components 22,431 20,676 16,068
Electronic/OEM Components 16,621 15,234 18,082
Other Products and Components 12,459 11,993 11,399
Discontinued Operations 4,726 8,908 8,009
General Corporate 2,021 1,095 1,173
Total $ 58,258 $ 57,906 $ 54,731
<FN>
(1) Reflects the adoption of SFAS No. 109 "Accounting for Income Taxes"
in 1993 which increased depreciation expense in both 1993 and 1994
by $1,822 in Electrical Construction Components and $981 in Other
Products and Components.
(2) Includes a write down of $1,359 in Electrical Construction
Components, $2,475 in Other Products and Components and $6,798 in
General Corporate for previously vacated facilities.
Results of operations for all years have been reclassified
to reflect Vitramon as a discontinued operation because of its
sale in July 1994.
Net sales comprise sales to unaffiliated customers;
intersegment sales are immaterial.
Segment earnings from operations consist of net sales less
cost of sales and operating expenses. General corporate expenses
have not been allocated to segments.
General corporate assets not allocated to segments are
principally cash and investments, and in 1994 includes the
Corporation's investment in Leviton Manufacturing Co., Inc..
(d) Financial Information About Foreign and Domestic Operations
and Export Sales
Information relating to operations in different geographic
areas is presented in both Exhibit 13 hereto and in the
Corporation's 1994 Annual Report to Shareholders on page 31,
which is incorporated herein by reference. The risks attendant
to these sales and profits are relatively small because the
operations are in foreign countries that have relatively stable
political systems. (See reference to peso devaluation in
Financial Review presented in Exhibit 13 hereto under Item 7 and
on page 18 of Annual Report, and reference to unhedged
liabilities in Note 1 to the Consolidated Financial Statements
under Foreign Exchange presented in Exhibit 13 hereto under Item
8 and on page 25 of Annual Report.) It is expected that the
international markets will continue to provide sales growth in
the future.
ITEM 2. PROPERTIES
The Corporation has total plant, office and warehouse space
of approximately 6,377,000 square feet which is located in 72
locations in 19 states, the Commonwealth of Puerto Rico and 15
foreign countries composed of 4,090,000 square feet of
manufacturing space and 1,514,000 square feet of office and
distribution space and 773,000 sq. ft. of idle space.
The following is a list of the Corporation's manufacturing
locations by primary segment as of January 1, 1995:
Approximate area
No. of in square feet
Segment Location Facilities Leased Owned
Electrical Construction Components
Arkansas 1 245,000
California 1 36,320
Georgia 2 160,000 157,818
Mississippi 1 236,652
New Jersey 1 420,000
Ohio 1 39,680
Oklahoma 1 108,276
Pennsylvania 3 51,804 57,097
Puerto Rico 3 118,716 28,200
Tennessee 3 125,000 457,000
Canada 5 65,499 295,607
Mexico 2 206,434
Electronic/OEM Components
California 1 135,530
South Carolina 2 88,966
England 2 17,000 28,200
Luxembourg 1 26,544 43,246
Singapore 1 64,000
Japan 2 9,205 240,240
Other Products and Components
Pennsylvania 1 217,450
South Carolina 1 110,000
Texas 1 136,172
Wisconsin 1 164,360
The Corporation leases its corporate and divisional
headquarters located in Memphis, Tennessee, which contain
approximately 85,000 sq. ft. Principal sales offices and
warehouses are located in 1,429,000 sq. ft. of property, over 90
percent of which is leased. In 1995, the Corporation expects to
add 440,000 sq. ft. of distribution space.
As part of the restructuring described in Item 1,
approximately 1.4 million sq. ft. of the manufacturing and
warehouse space is being closed in North America, Puerto Rico,
Europe and the Far East with most closures occurring in North
America. Within North America, the principal closure will be the
Corporation's 420,000 sq. ft. of manufacturing space in
Elizabeth, New Jersey. Also part of this effort is the addition
of 1.1 million sq. ft. of manufacturing and warehouse space in
North America, Puerto Rico and Europe, principally in North
America, 300,000 sq. ft. of which has already been added.
The Corporation has 773,000 sq. ft. of idle manufacturing
and office space primarily in Missouri, Alabama, Pennsylvania,
New Jersey and Michigan not included in the table above. In
1994, the Corporation recorded an $11 million operating charge to
provide for losses on leases and to reduce owned facilities to
their net realizable values.
ITEM 3. LEGAL PROCEEDINGS
The Corporation is subject to federal, state and local
environmental laws and regulations, which govern the discharge of
pollutants into the air, soil and water, as well as the handling
and disposal of solid and hazardous wastes. The Corporation
believes that it is currently in substantial compliance with all
applicable environmental laws and regulations and that the costs
of maintaining or coming into compliance with such environmental
laws and regulations will not be material to the Corporation's
financial statements.
Owners and operators of sites containing hazardous
substances, as well as generators of hazardous substances, are
subject to broad liability under various federal and state
environmental laws and regulations, including liability for
cleanup costs and damages arising out of past disposal activity.
Such liability in many cases may be imposed regardless of fault
or the legality of the original disposal activity. The
Corporation is the owner or operator of various manufacturing
facilities currently being investigated or remediated, including
its closed facilities in Anniston, Alabama, and St. Louis,
Missouri, and its current facility in Hager City, Wisconsin. In
addition, the Corporation is investigating two manufacturing
plants which were sold by American Electric prior to its
acquisition by the Corporation, located in Medora, Indiana, and
Monroe, Louisiana, that may require site remediation.
The above facilities were purchased by American Electric
from other parties between the years 1985 and 1988. At the time
of these purchases, the sellers gave commitments for
indemnification for environmental liabilities that occurred prior
to the purchase of the facilities by American Electric. There
can be no assurances that such indemnities will be honored, but
the Corporation believes that the indemnities will be honored.
Subsequent to the Corporation's acquisition of American Electric,
the Corporation has entered into agreements with the sellers to
cooperate with each other in resolving obligations in connection
with the above-mentioned environmental issues.
In addition, in early February 1995, the Corporation
announced the closure of its Elizabeth, New Jersey, facility. As
part of this closure, the Corporation is required to investigate
and, if necessary, remediate contamination that may be identified
at that location in accordance with New Jersey law.
The Corporation has received notifications from the United
States Environmental Protection Agency ("EPA") or similar state
environmental regulatory agencies or private parties that the
Corporation, along with others, may be potentially responsible
for the remediation of twelve sites pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(the "Superfund" Act) or similar state environmental statutes.
Pursuant to an agreement with ITT Corporation (ITT), ITT has to
date assumed responsibility for its costs associated with pre-
June 1985 contamination at five of these sites. The Corporation
has assumed responsibility for its share of costs at six of these
sites. Both ITT and the Corporation are currently defendants in
a private cost-recovery action with respect to the one remaining
site. The Corporation believes that any recovery will not be
material.
The Corporation has also been served with an Administrative
Complaint by the EPA which alleges that the Surprenant Wire and
Cable facility in Clinton, Massachusetts, which was owned and
operated by American Electric from June 1985 until November 1988,
failed to comply with certain requirements of the Emergency
Planning and Community Right to Know Act for the 1987 reporting
year (In The Matter of FL Industries, Inc., EPA Region I Docket
No. EPCRA-I-92-1047, filed April 1, 1992). The EPA's complaint
seeks a penalty of $176,520. The Corporation is currently
contesting this matter to determine the extent of its liability,
if any.
The Corporation is not able to predict with certainty the
extent of its ultimate liability with respect to pending or
future environmental matters. However, the Corporation does not
believe that any such liability with respect to the
aforementioned environmental matters would have a material
adverse effect upon its financial statements.
The Corporation has been named as defendant in various
product liability and commercial legal actions arising from
normal business activities. Although the amount of any ultimate
liability with respect to such matters cannot be precisely
determined, the Corporation does not believe any such liability
would be material to its financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Executive Officers of the Registrant
Date
Assumed
Present
Name Position Age Position
T. Kevin Dunnigan (1) Chairman of the Board
and Chief Executive
Officer 57 January 1992
Clyde R. Moore President and Chief
Operating Officer 41 January 1994
Ronald P. Babcock (2) Vice President -
Finance and Treasurer
(Chief Financial
Officer) 59 January 1994
T. Roy Burton President - Electronics/OEM
Division 47 March 1994
Thomas A. Edmonds President -
Utility Division 45 March 1994
William A. Fredrick President -
Lighting Division 48 March 1994
Uberto Gamaggio President - European
Division 56 May 1993
Dominic J. Pileggi (3) President - Electrical
Components Division 43 March 1994
<FN>
(1) Chief Executive Officer since January 1985.
(2) Vice President - Finance (Chief Financial Officer) since May 1983.
(3) President - Electronics Division from August 1988 to February 1994.
The above have been executive officers of the Corporation for at
least the last five years except the following:
Mr. Moore was President and Chief Operating Officer of FL
Industries, Inc. from 1990 to 1992 and President of its
American Electric Division from 1985 until its acquisition
by Thomas & Betts Corporation in 1992. He was President-
Electrical Division of the Corporation from 1992 to 1994.
Mr. Burton was Vice President and General Manager of Bendix
Connector Operations (1989 to 1992), Vice President-
Information Technology Operations (1992-93), and Vice
President-Aerospace Operations (1993-94) of Amphenol
Corporation.
Mr. Edmonds was President of Thomas & Betts Limited (Canada)
(1989 to 1991); Vice President-Corporate Planning (1991 to
1992) and President-European Division (1992 to 1993) of the
Corporation; Vice President-Utility Group of Thomas & Betts
Holdings, Inc. (1993 to 1994).
Mr. Fredrick was Vice President-Commercial and Industrial
Lighting Group of the American Electric Division of FL
Industries, Inc. (1988 to 1992) and Vice President and
General Manager-Commercial and Industrial Lighting Group of
Thomas & Betts Holdings, Inc. (1992 to 1994).
Mr. Gamaggio was Managing Director of Baumann GmbH,
Lichtenstein, from 1987 to 1993.
The executive officers were elected by the Board of Directors for
a term which expires on May 3, 1995, the date of the next
organizational meeting of the Board of Directors. Normally,
officers are elected for one-year terms or until their successors
have been elected. There exists no special arrangement or
understanding regarding election to executive office other than
that described herein. See Item 11 for information relating to
Directors.
PART II
ITEMS 5 THROUGH 8.
Information required by Items 5 through 8 of Form 10-K is
included in both Exhibit 13 hereto and in the Corporation's 1994
Annual Report to Shareholders which is incorporated herein by
reference as indicated below:
Annual Report
Item No. Page
5 20 & 33
6 34&35
7 18-20
8 21-33
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEMS 10, 11, 12 and 13
Registrant, on March 17, 1995 filed with the Securities and
Exchange Commission a definitive Proxy Statement. Information
required by Items 10, 11, 12 and 13 of Form 10-K, but not
provided herein, is included in the Proxy Statement and is
incorporated herein by reference. Certain of the information
required with respect to executive officers is also set forth in
Part I of this report under the heading "Executive Officers of
the Registrant."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
(1) Financial statements.
All financial statements as set forth under Item 8.
(2) Financial statement schedules.
Page
Number
II Valuation and Qualifying Accounts 20
Independent Auditors' Report on Financial
Statement Schedule 21
All other schedules are omitted as the required
information is inapplicable or the information is
presented in the financial statements or related notes.
(3) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
(12) Statements regarding Computation of Ratios (Ratio
of earnings to fixed changes)
(13) 1994 Annual Report to Shareholders
Excerpts from the 1994 Annual Report to
Shareholders are attached to the Form 10-K in
Exhibit 13. If you have not received the Annual
Report to Shareholders, you may obtain one by
writing to the Investor Relations Department of
the Corporation.
(21) Subsidiaries of Registrant
Place of
Name Incorporation
Blackburn Electric Canada Inc. Canada
Challenger Caribbean Corporation Delaware
FL Amelec, Inc. Texas
Amelec S.A. de C.V. Mexico
American Electric de Mexico, S.A. de C.V. Mexico
Thomas & Betts Caribe, Inc. Delaware
Thomas & Betts FSC, Inc. U. S. Virgin Islands
Thomas & Betts Industries Co., Ltd. Taiwan, R.O.C.
Thomas & Betts International, Inc. Delaware
Thomas & Betts Aktiebolag Sweden
Thomas & Betts France France
Thomas & Betts GmbH Germany
Thomas & Betts GmbH & Company Kommanditgesellschaft Germany
Thomas & Betts Holdings (U.K.) Limited United Kingdom
Thomas & Betts Limited United Kingdom
Thomas & Betts Manufacturing Limited United Kingdom
Thomas & Betts Hong Kong, Limited Hong Kong
Thomas & Betts Japan, Ltd. Japan
Thomas & Betts (Luxembourg) S.A. Luxembourg
Thomas & Betts de Mexico S.A. de C.V. Mexico
Thomas & Betts Pty. Limited Australia
Thomas & Betts (S.E. Asia) Pte. Ltd. Singapore
Thomas & Betts S.p.A. Italy
Thomas & Betts S.A. Spain
Thomas & Betts Limited Canada
T&B Commander Electrical Materials Inc. Ontario, Canada
Thomas & Betts (Ontario) Ltd. Canada
All subsidiaries are included in the consolidated financial
statements.
(23) Auditors' Consent
The following exhibits are omitted as they are incorporated
by reference as indicated.
(3) Restated Certificate of Incorporation and By-Laws
- See 1993 Form 10-K.
(4) Instruments defining the rights of security
holders, including indentures.
- Stock Purchase Agreement between Thomas & Betts
Corporation and Vishay Intertechnology, Inc.,
dated July 12, 1994 - See Form 8-K filed July
29, 1994.
- Indenture, dated as of January 15, 1992,
between the Corporation and Morgan Guaranty
Trust Company of New York, as Trustee - See
1991 Form 10-K.
- Specimen of the Corporation's $125,000,000
aggregate principal amount of 8 1/4% Notes due
January 15, 2004 - See 1991 Form 10-K.
- Form of Distribution Agreement for Medium-Term
Notes between the Corporation and Merrill Lynch
& Co., dated July 28, 1992 - See Form 8-K dated
July 28, 1992.
- First Supplemental Indenture, dated as of July
28, 1992, between the Corporation and Morgan
Guaranty Trust Company of New York, as Trustee
- See Form 8-K dated July 28, 1992.
(10) Material Contracts
- 1990 Stock Option Plan - See 1990 Form 10-K
- Agreement and Plan of Merger by and among FL
Industries Holdings, Inc. and the Shareholders
thereof, the Corporation and TBC Acquisition
Corp., dated as of November 13, 1991, as
amended and restated - See Form 8-K filed
November 19, 1991.
- Credit Agreement dated as of December 19, 1991
among the Corporation, the banks listed therein
and Morgan Guaranty Trust Company of New York
as agent - See Exhibit 2.2 to Company's
Amendment No. 1 to its Form S-3 Registration
Statement No. 33-44153, as filed January 7,
1992.
- Executive Officer Employment Agreement Form -
See 1992 Form 10-K
- 1985 Stock Option Plan - See 1992 Form 10-K
- Restricted Stock Plan for Nonemployee Directors
- See 1992 Form 10-K
- 1988 Restricted Stock Incentive Plan - See 1993
Form 10-K
- 1993 Management Stock Ownership Plan - See 1993
Form 10-K
- Thomas & Betts Corporation Executive Incentive
Plan - See 1994 Proxy Statement
(b) No report on Form 8-K was filed during the last quarter of
1994.
SCHEDULE II
THOMAS & BETTS CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED JANUARY 1, 1995, JANUARY 2, 1994 AND DECEMBER 31, 1992
(IN THOUSANDS)
ADDITIONS
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COST AND OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (DEDUCTIONS) OF PERIOD
Year ended January 1, 1995:
Allowance for doubtful accounts
and cash discounts $ 5,292 $ 837(1) $ (57)(2) $ (1,516) (3) $ 4,556
Year ended January 2, 1994:
Allowance for doubtful accounts
and cash discounts $ 5,103 $ 1,291(1) $ 127 (2) $ (1,229) (3) $ 5,292
Year ended December 31, 1992:
Allowance for doubtful accounts
and cash discounts $ 4,068 $ 845(1) $ 826 (2) $ (636) (3) $ 5,103
<FN>
(1) Includes provision of $1,133 in 1994, $1,286 in 1993, and $934 in 1992 for doubtful accounts.
Remaining amounts represent net change in cash discount reserve and translation adjustments.
(2) Balance acquired in business acquisitions.
(3) Write-offs of uncollected accounts and divestiture of Vitramon balance of $655 in 1994.
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE
The Shareholders and Board of Directors
Thomas & Betts Corporation:
Under date of February 2, 1995, we reported on the
consolidated balance sheets of Thomas & Betts Corporation and
subsidiaries as of January 1, 1995 and January 2, 1994 and the
related consolidated statements of earnings, cash flows, and
shareholders' equity for each of the years in the three-year
period ended January 1, 1995 as contained in the 1994 Annual
Report to Shareholders. These consolidated financial statements
and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year 1994. In connection with
our audits of the aforementioned consolidated financial
statements, we also have audited the related financial statement
schedule as listed in the accompanying index. This financial
statement schedule is the responsibility of the Corporation's
management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits.
In our opinion, the financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
KPMG Peat Marwick LLP
Memphis, Tennessee
February 2, 1995
SIGNATURES
PURSUANT TO THE REQUIREMENTS TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS
ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED.
THOMAS & BETTS CORPORATION
Signature Title Date
/s/ T. Kevin Dunnigan Chairman of the Board, March 30, 1995
(T. Kevin Dunnigan) Chief Executive Officer
and Director
/s/ Clyde R. Moore President, Chief Operating March 30, 1995
(Clyde R. Moore) Officer and Director
/s/ Ronald P. Babcock Vice President - Finance and March 30, 1995
(Ronald P. Babcock) Treasurer (Chief Financial
Officer and Principal Accounting
Officer)
/s/ Jerry Kronenberg Vice President - General March 30, 1995
(Jerry Kronenberg) Counsel
/s/ Raymond B. Carey, Jr. Director March 31, 1995
(Raymond B. Carey, Jr.)
/s/ Ernest H. Drew Director March 31, 1995
(Ernest H. Drew)
Director March __, 1995
(Jeananne K. Hauswald)
/s/ Thomas W. Jones Director March 30, 1995
(Thomas W. Jones)
/s/ Robert A. Kenkel Director March 30, 1995
(Robert A. Kenkel)
/s/ Kenneth R. Masterson Director March 31, 1995
(Kenneth R. Masterson)
/s/ J. David Parkinson Director March 30, 1995
(J. David Parkinson)
/s/ Ian M. Ross Director March 30, 1995
(Ian M. Ross)
/s/ William H. Waltrip Director March 31, 1995
(William H. Waltrip)