Exhibit 99.1
Thomas & Betts Corporation Reports Second Quarter 2004 Results
Sales Up 14 Percent; E.P.S. $0.34
MEMPHIS, Tenn., July 26, 2004 /PRNewswire-FirstCall/ -- Thomas & Betts
Corporation (NYSE: TNB) today reported second quarter 2004 net earnings of
$20.0 million, or $0.34 per basic and diluted share, up significantly from the
$6.8 million in net earnings, or $0.12 per basic and diluted share, reported
in the second quarter 2003.
Sales in the quarter were $369.0 million, up $46.3 million, or
14.4 percent, from the prior-year period. Favorable foreign currency exchange
rates accounted for approximately $7 million of the sales increase. Earnings
from operations were $35.6 million in the second quarter 2004 or 9.7 percent
of sales. This is more than twice the $14.9 million in operating earnings
reported in the second quarter 2003.
"Our focus on running a lean, customer-focused enterprise combined with
higher sales volumes allowed our strong earnings momentum to continue in the
second quarter," said Dominic J. Pileggi, president and chief executive
officer. "Each of our business segments contributed to our strong performance
through their continued effort to effectively manage the volatility in raw
material pricing and availability, their relentless focus on improving
productivity and their strong discipline in controlling expenses."
Pileggi continued, "We are especially pleased with the improvement in
earnings from operations, as we came very close to achieving our goal of
double-digit operating earnings as a percent of sales. We remain focused on
meeting or exceeding this goal as our markets recover."
The second quarter 2004 gross margin was 29.1 percent of sales, compared
to 25.9 percent in the prior-year period. Selling, general and administrative
(SG&A) expense was $71.6 million, or 19.4 percent of sales, compared to
$68.6 million, or 21.3 percent of sales, in the prior-year period.
Pileggi noted that the net impact from rising material costs, especially
steel, was minimal in the quarter, as the company largely offset these costs
through a combination of price increases and, to a lesser extent, productivity
improvements.
The second quarter 2003 provision for income taxes reflected a benefit of
$2.0 million resulting from the favorable completion of tax audits.
SEGMENT RESULTS
During the second quarter, the company aggregated the reporting of its
Communications segment into its Electrical segment and has adjusted prior-
period results to reflect this change.
Second quarter sales in the company's Electrical segment were
$311.0 million, up $35.1 million, or 12.7 percent, compared to $275.9 million
in segment sales reported in the second quarter 2003. Favorable foreign
currency exchange rates accounted for approximately $7 million of the increase
in segment sales. Segment earnings more than doubled to $32.5 million
compared to $14.3 million last year. These results reflect higher sales
volumes, productivity improvements and the company's ability to offset higher
raw material costs.
Sales in the Steel Structures segment were $30.0 million, up significantly
from $21.3 million in second quarter 2003. Investment by U.S. electrical
utilities to complete previously scheduled network upgrades and expansion
projects drove the sales increase. Segment earnings were also up
significantly to $2.6 million, compared to $0.7 million in the same period
last year, reflecting primarily the higher sales volumes.
HVAC segment sales were $28.0 million in the second quarter 2004, compared
to $25.4 million a year ago. Segment earnings were $1.1 million compared to
$0.4 million in the second quarter last year, reflecting higher sales volumes
and lower expenses.
YEAR-TO-DATE RESULTS
For the six months ended June 30, 2004, consolidated sales rose
$87.8 million, or 13.8 percent, to $722.0 million compared to $634.1 million
in the first half of 2003. Favorable foreign currency exchange rates
accounted for approximately $21 million of the sales increase. Net earnings
for the first six months of 2004 were $35.6 million, or $0.61 per basic and
$0.60 per diluted share, compared to $11.8 million, or $0.20 per basic and
diluted share for the first six months of 2003. 2003 six-month results
include $4.0 million in tax benefits resulting from the favorable completion
of tax audits.
BALANCE SHEET HIGHLIGHTS
Thomas & Betts continues to maintain a solid cash position and ended the
second quarter 2004 with $267.5 million in cash and cash equivalents. Total
debt-to-total capitalization was 41.7 percent at June 30, 2004, compared to
48.4 percent at year-end 2003. This improvement reflects primarily first-
quarter debt repayments and year-to-date net earnings.
2004 DIRECTIONAL GUIDANCE
"Activity in the second quarter suggests that, with the exception of non-
residential construction, our end markets are beginning to turn the corner and
should continue to improve compared to 2003 in the third and fourth quarters,"
said Pileggi.
"The positive market outlook, coupled with our drive to effectively
leverage our broad portfolio of market-leading brands and provide exceptional
customer service, leads us to believe that our full-year 2004 net earnings per
share will fall within the range of $1.20 to $1.25, a substantial improvement
over the $0.73 reported in 2003," concluded Pileggi.
CORPORATE OVERVIEW
Thomas & Betts Corporation ( http://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 following financial tables support the information in this news
release:
Condensed Consolidated Statements of Operations
Segment Information
Quarterly Segment Information 2004 and 2003
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Cash Flows
Capitalization Ratios
CONFERENCE CALL AND WEBCAST INFORMATION
Thomas & Betts will hold a conference call/webcast to discuss the
company's second quarter 2004 results on Tuesday, July 27, 2004 at 11:00 am
EDT (10:00 am CDT). To access the call, please call 201-689-8037. The call
can also be accessed via the Thomas & Betts corporate website
at http://www.tnb.com . The conference call will be recorded and available
for replay through 12:00 midnight EST on Tuesday, August 3, 2004. To access
the replay, please call 201-612-7415. The recorded webcast will be available
at http://www.tnb.com .
CAUTIONARY STATEMENT
This press release includes forward-looking statements that are identified
by terms such as "expect," "believe," and "should." 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,
2003, 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.
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Quarter Ended Year to Date
June 30, June 29, June 30, June 29,
2004 2003 2004 2003
Net sales $368,973 $322,661 $721,961 $634,143
Cost of sales 261,719 239,182 515,008 465,588
Gross margin 107,254 83,479 206,953 168,555
Gross margin-% of net sales 29.1% 25.9% 28.7% 26.6%
Selling, general and
administrative 71,634 68,618 144,648 141,550
Selling, general and
administrative-% of
net sales 19.4% 21.3% 20.0% 22.3%
Earnings from operations 35,620 14,861 62,305 27,005
Income from unconsolidated
companies 556 558 1,220 1,412
Interest expense, net (7,484) (9,139) (15,098) (17,419)
Other (expense) income, net (957) 232 (1,092) (371)
Earnings before income
taxes 27,735 6,512 47,335 10,627
Income tax provision
(benefit) 7,766 (242) 11,754 (1,131)
Net earnings $19,969 $6,754 $35,581 $11,758
Net earnings per share:
Basic earnings per share $0.34 $0.12 $0.61 $0.20
Diluted earnings per share $0.34 $0.12 $0.60 $0.20
Average shares outstanding:
Basic 58,544 58,461 58,419 58,412
Diluted 59,200 58,463 58,944 58,416
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
Quarter Ended Year to Date
June 30, June 29, June 30, June 29,
2004 2003 2004 2003
Net sales:
Electrical $311,010 $275,949 $608,699 $539,254
Steel Structures 29,951 21,346 56,081 43,311
HVAC 28,012 25,366 57,181 51,578
Total net sales $368,973 $322,661 $721,961 $634,143
Segment earnings:
Electrical $32,514 $14,323 $56,681 $25,013
Steel Structures 2,571 695 3,181 1,522
HVAC 1,091 401 3,663 1,882
Total reportable segment
earnings 36,176 15,419 63,525 28,417
Total reportable segment
earnings - % of net sales 9.8% 4.8% 8.8% 4.5%
Interest expense, net (7,484) (9,139) (15,098) (17,419)
Other (957) 232 (1,092) (371)
Earnings before income taxes $27,735 $6,512 $47,335 $10,627
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Quarterly Segment Information 2004 and 2003
(In thousands)
(Unaudited)
2004
1st Quarter 2nd Quarter
Net Sales:
Electrical $297,689 $311,010
Steel Structures 26,130 29,951
HVAC 29,169 28,012
Total net sales $352,988 $368,973
Segment earnings:
Electrical $24,167 $32,514
Steel Structures 610 2,571
HVAC 2,572 1,091
Total reportable segment earnings $27,349 $36,176
2003
1st Quarter 2nd Quarter 3rd Quarter
Net Sales:
Electrical $263,305 $275,949 $289,389
Steel Structures 21,965 21,346 23,545
HVAC 26,212 25,366 25,757
Total net sales $311,482 $322,661 $338,691
Segment earnings:
Electrical $10,690 $14,323 $17,634
Steel Structures 827 695 2,680
HVAC 1,481 401 1,353
Total reportable segment earnings $12,998 $15,419 $21,667
2003
4th Quarter Total Year
Net Sales:
Electrical $286,209 $1,114,852
Steel Structures 26,678 93,534
HVAC 36,576 113,911
Total net sales $349,463 $1,322,297
Segment earnings:
Electrical $22,786 $65,433
Steel Structures 2,152 6,354
HVAC 4,991 8,226
Total reportable segment earnings $29,929 $80,013
During the second quarter 2004, the Corporation aggregated the reporting
of its Communications segment into its Electrical segment. Prior periods
have been conformed to reflect this change.
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $267,526 $387,425
Marketable securities 1,904 1,704
Receivables, net 209,947 168,542
Inventories 205,221 190,243
Other current assets 62,030 64,365
Total current assets 746,628 812,279
Net property, plant and equipment 286,226 303,710
Goodwill 454,506 455,113
Investments in unconsolidated companies 121,554 121,732
Other assets 85,582 89,791
Total assets $1,694,496 $1,782,625
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $4,484 $133,344
Accounts payable 131,858 113,724
Accrued liabilities 102,484 111,478
Income taxes payable 8,895 6,414
Total current liabilities 247,721 364,960
Long-term debt 545,761 551,972
Other long-term liabilities 131,764 134,266
Shareholders' equity 769,250 731,427
Total liabilities and
shareholders' equity $1,694,496 $1,782,625
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year to Date
June 30, June 29,
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $35,581 $11,758
Adjustments:
Depreciation and amortization 26,530 24,144
Amortization of restricted stock 1,282 1,379
Changes in operating assets and
liabilities, net:
Receivables (43,437) (16,611)
Inventories (16,596) (2,493)
Accounts payable 19,289 (2,956)
Accrued liabilities (8,354) (9,166)
Income taxes payable 2,671 (5,025)
Other (223) (4,091)
Net cash provided by (used in)
operating activities 16,743 (3,061)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (11,002) (14,289)
Proceeds from sale of property, plant
and equipment 158 234
Net proceeds from (investments in)
marketable securities (212) 48,126
Net cash provided by (used in)
investing activities (11,056) 34,071
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and
other borrowings - 125,191
Repayment of long-term debt and other
borrowings (129,306) (63,535)
Other 6,205 (3,391)
Net cash provided by (used in)
financing activities (123,101) 58,265
EFFECT OF EXCHANGE RATE ON CASH (2,485) 8,237
Net increase (decrease) in cash and
cash equivalents (119,899) 97,512
Cash and cash equivalents at
beginning of period 387,425 177,994
Cash and cash equivalents at end of
period $267,526 $275,506
Cash payments for interest $24,794 $23,018
Cash payments for income taxes $7,457 $10,710
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Capitalization Ratios
(In thousands, except ratios)
(Unaudited)
June 30, December 31,
2004 2003
Current maturities of long-term debt $4,484 $133,344
Long-term debt 545,761 551,972
Total debt 550,245 685,316
Shareholders' equity 769,250 731,427
Total capitalization $1,319,495 $1,416,743
Total debt-to-total capitalization 41.7% 48.4%
SOURCE Thomas & Betts Corporation
-0- 07/26/2004
/CONTACT: Tricia Bergeron of Thomas & Betts Corporation, +1-901-252-8266,
tricia.bergeron@tnb.com /
/Web site: http://www.tnb.com/
(TNB)
CO: Thomas & Betts Corporation
ST: Tennessee
IN: CPR CST TLS UTI
SU: ERN ERP CCA MAV