1
EXHIBIT 13
FINANCIAL HIGHLIGHTS
Thomas & Betts Corporation
======================================================================================
Dollars in thousands Percent
(except per share data) 1995 1994 Change
- --------------------------------------------------------------------------------------
Net sales $1,236,825 $1,076,165 15
Net earnings $ 80,902 $ 67,820 19
Net return on sales 6.5% 6.3%
Per common share(1) $ 2.02 $ 1.76 15
Return on average shareholders'
equity 14.0% 13.1%
Cash dividends declared per
common share(1) $ 1.12 $ 1.12
Average shares outstanding (000)(1) 39,956 38,608
Shareholders' equity $ 600,574 $ 553,043 9
Capital expenditures $ 101,760 $ 66,906 52
Employees 8,700 7,400 18
Shareholders of record 3,787 3,978
====================================================================================
(1) Amounts have been restated to reflect a two-for-one stock split effective
March 8, 1996.
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FINANCIAL REVIEW
1995 VS. 1994
Sales in 1995 rose 15 percent to a record $1,236.8 million compared to 1994
sales of $1,076.2 million. Sales growth came equally from the expansion of
existing businesses and from new acquisitions. Overall, price increases and
currency effects were not significant in 1995.
Total sales outside the U.S. represented 23 percent of consolidated sales
in 1995 and 22 percent in 1994.
The additional sales volume, coupled with savings realized from the
Corporation's restructuring initiatives announced in the third quarter of 1994,
generated record net earnings of $80.9 million, or $2.02 per share, for 1995,
up 19 percent from $67.8 million, or $1.76 per share, recorded in 1994.
On February 7, 1996, the Board of Directors approved a two-for-one stock
split to be distributed on April 9, 1996 to shareholders of record on March 8,
1996, at the rate of one additional share for each share held. All references
to number of shares, per share amounts, stock option data and market prices in
this annual report have been restated to reflect this two-for-one split.
All three of the Corporation's business segments contributed year-over-year
improvements in sales and earnings.
Electrical Construction and Maintenance Components' segment sales
increased 18 percent to $611.7 million in 1995, with solid growth generated
from existing products as well as from newly acquired businesses. Industrial,
commercial and residential construction and renovation activity was
particularly strong in the first half of the year. Restructuring-related
savings in this segment were offset in part by higher commodity costs and a
less favorable product sales mix than in the prior year, but 1995 earnings
still achieved 10 percent growth compared to 1994 earnings excluding one-time
charges.
Electronic/OEM Components' segment sales increased 15 percent to $297.9
million in 1995, with two-thirds of the increase derived from existing products
and expansion of the customer base and one-third from strengthening currencies
in Europe and the Far East. Higher demand in the automotive, computer,
industrial automation and telecommunications markets drove strong volume gains
in all regions - North America, Europe and the Far East. The volume gains,
coupled with the restructuring-related cost savings, produced 61 percent higher
earnings in 1995 compared to 1994 earnings excluding one-time charges.
The Other Products and Components' segment sales increased 9 percent to
$327.2 million in 1995, with two-thirds of the increase from existing products
and markets and one-third from acquisitions. Demand for heating products
continued strong in 1995 while demand for utility and telecommunication
products and components improved versus the prior year, resulting in 18 percent
earnings growth in 1995 compared to 1994 earnings excluding one-time charges.
Consolidated gross margin improved to 34.3% in 1995 versus 33.9% in 1994.
The 1994 margin included $3.8 million of the one-time facilities-related
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charge and the 1995 margin benefited from restructuring-related cost
reductions in North America and Europe that more than offset higher commodity
costs.
Marketing, general and administrative expenses were 20.6 percent of sales
in 1995 compared to 21.4 percent in 1994. Expenses declined as a percent of
sales due to $6.8 million of the one-time facilities-related charge recorded in
1994 and the related savings realized in 1995. Research and development
expenses increased by 9 percent in 1995 and constituted 1.8 percent of sales.
Amortization expense declined by $1.2 million in 1995 due to intangibles that
became fully amortized during 1994.
Other expense for 1995 was reduced by $3.8 million from the 1994 level
principally as a result of prior-year currency exchange losses, primarily in
Mexico, that did not recur in 1995, and a gain on the sale of certain assets of
the Electripak business. Increased interest expense, resulting from higher debt
levels to support restructuring initiatives and working capital needs to
support expanding businesses, was partially offset by higher investment income.
The effective tax rate of 31.0 percent for 1995 was four points below the
U.S. statutory tax rate primarily due to tax benefits derived from the
Corporation's operations in Puerto Rico. The rate is not comparable to the 1994
rate because of the significant impact of the restructuring charge on pretax
earnings from continuing operations in 1994.
The Corporation's net earnings as a percent of sales improved to 6.5
percent in 1995 compared to 6.3 percent in 1994. Return on average
shareholders' equity improved to 14.0 percent compared to 13.1 percent in 1994.
1994 VS. 1993
Net sales from continuing operations for 1994 were a record $1,076.2
million, up 12 percent from $957.5 million in 1993. Net earnings for 1994 were
up 20 percent to a record $67.8 million, or $1.76 per share, compared to $56.5
million, or $1.50 per share, in 1993. Net earnings for 1994 included a pretax
gain of $99.1 million from the sale of the Vitramon operation (which was
accounted for as a discontinued operation), a $79.0 million restructuring
charge and other facilities-related operating charges of $10.6 million. These
actions all occurred in the third quarter and were offsetting on an after-tax
basis. Earnings from continuing operations for 1994 were $1.9 million, or $0.05
per share, compared to $43.6 million, or $1.16 per share, in 1993, with 1994
results including the restructuring and facilities-related operating charges
and excluding the gain from the sale of Vitramon.
The 12 percent increase in sales for 1994 was primarily the result of
additional sales volume, with overall pricing and currency effects not being
significant. All three business segments contributed to the increase.
Total sales outside the U.S. represented 22 percent of consolidated sales
in 1994 and 21 percent in 1993.
Electrical Construction and Maintenance Components' segment sales
increased 16 percent over 1993's level. Continued strength throughout the year
in most electrical markets, particularly the construction market, was a
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major factor in the increase in sales of core products. Sales to lighting and
consumer markets were flat to down slightly from last year. Earnings in 1994,
before one-time charges, improved 13 percent compared to 1993 earnings.
Electronic/OEM Components' segment sales for 1994 were up 5 percent over
1993, with strong results in the fourth quarter. Gains were experienced in all
North American markets due to increased volume, while net gains in the Far East
were primarily due to currency translation. European sales improved for the
first time in several years, as the economy there began to recover. Sales in
Europe were up 7 percent over the prior year, with 14 percent volume growth and
slightly stronger currencies offsetting the effects of lower pricing. Earnings
for 1994, before one-time charges, increased 79 percent compared to 1993
earnings.
Other Products and Components' segment sales increased 12 percent over
1993. Demand for heating products was strong and sales of utility components
also increased. Earnings for 1994, before one-time charges, improved 20 percent
compared to 1993 earnings.
Consolidated gross margin on continuing operations was 33.9 percent, down
from 34.4 percent in 1993 due to $3.8 million of the one-time facilities-
related charge taken in the third quarter. Otherwise, gross margin as a percent
of sales would have remained the same as in 1993, with the positive effect of
cost reductions in the Electronic/OEM segment and improved overhead absorption
in Europe offsetting certain price reductions made in non-U. S. markets.
Marketing, general and administrative expenses for the year included $6.8
million of the one-time facilities-related charge taken in the third quarter of
1994. Including that charge, these expenses were 21.4 percent of sales compared
to 22.1 percent in 1993, and without the charge were 20.7 percent of sales. The
reduction was the result of administrative cost savings achieved in part by
consolidating headquarters and office operations in Memphis, Tennessee.
Research and development expense increased 11.4 percent and represented 1.9
percent of sales in both 1994 and 1993.
Other expense was reduced by $3.0 million, due principally to lower net
interest expense on reduced borrowings made possible in part by the sale of
Vitramon. Partially offsetting lower net interest expense was a $1.5 million
foreign currency exchange loss recorded in the fourth quarter on the
Corporation's Mexico operations as a result of the peso devaluation.
The Corporation's effective tax rate on continuing operations for 1994 was
a negative 282.0 percent compared to 27.3 percent for 1993. The negative tax
rate in 1994 resulted primarily from the tax benefits associated with
continuing operations (as Vitramon had no Puerto Rico operations). In absolute
dollar terms, however, this benefit decreased in 1994 compared to 1993 due to
recent tax law changes. The effective tax rate on earnings from discontinued
operations exceeded the statutory tax rate primarily due to higher tax rates
which applied to Vitramon's foreign operations. The effective tax rate on the
gain from the sale of discontinued operations exceeded the statutory rate
primarily as the result of state taxes on the gain.
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The Corporation's return on sales from continuing operations was 0.2
percent in 1994 compared to 4.6 percent in 1993. Net earnings as a percent of
sales were 6.3 percent in 1994 and 5.9 percent in 1993. Return on average
shareholders' equity was 13.1 percent compared to 12.0 percent in 1993.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow from operating activities for the years 1993, 1994 and 1995
was $326.7 million. Earnings from continuing operations plus depreciation and
amortization for these three years totaled $283.6 million. These funds were
used for working capital needed to support sales growth, expenditures relating
to the restructuring activities that began in 1994, capital projects, business
acquisitions and dividend payments. Working capital needs included higher
levels of accounts receivable, relating to higher sales volume, and increased
inventory levels to support sales growth and to maintain service levels during
manufacturing and warehousing facility relocations undertaken as part of the
Corporation's restructuring actions. Payables declined from their unusually
high level at the end of 1994. Short-term and long-term accrued liabilities and
the corresponding deferred taxes declined as reserves established in 1994 for
restructuring activities were used.
The Corporation has access to funds made available under a revolving
credit facility. In March 1995, this facility was renegotiated and increased
from $280.0 million to $500.0 million, making these funds available for a term
of five years from the renegotiation date. The covenants of this facility were
amended in December 1995 in anticipation of the Amerace acquisition. The
Corporation continues to fund its capital and operating needs with cash flows
from operations augmented by borrowing under this credit facility and from
other sources.
In 1992, the Corporation established a $175.0 million medium-term note
program providing for the issuance of notes with maturities ranging from 9
months to 30 years. To date, the Corporation has not issued any notes pursuant
to this program.
In January 1996, the Corporation completed the sale of $150.0 million of
10-year 6.50 percent senior notes. The net proceeds from the sale of these
securities were used to reduce borrowings under the Corporation's credit
facility incurred to finance the acquisition of Amerace.
ACQUISITIONS AND INVESTMENTS
During 1995, the Corporation completed three acquisitions and negotiated
two others which were subsequently completed in January 1996. In February 1995,
certain assets (primarily inventories and equipment) relating to the
manufacture, sale and distribution of the Anchor Electric meter center business
were acquired for $3.5 million in cash. In July 1995, E. K. Campbell Company, a
custom industrial heating and cooling equipment manufacturer, was acquired for
28,090 shares of the Corporation's common stock having a market value of $1.0
million. In October 1995, Catamount Manufacturing, Inc., a manufacturer of
cable ties, wire connectors and
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related electrical products, was acquired for approximately $35.0 million
consisting of 629,720 shares of the Corporation's common stock having a market
value of $22.0 million and the assumption of approximately $13.0 million of
Catamount's debt. The Anchor Electric acquisition was accounted for using the
purchase method of accounting and the E. K. Campbell and Catamount acquisitions
were accounted for using the pooling of interest method of accounting without
restating prior-years' results due to immateriality.
On January 2, 1996, the Corporation acquired all of the outstanding stock
of Amerace for $220.6 million in cash. Amerace is a manufacturer of electrical
products for utility and industrial markets whose 1995 sales were $215.0
million. Its most significant products are underground power and distribution
connectors sold under its Elastimold brand name. Amerace will be accounted for
using the purchase method of accounting.
On January 5, 1996, the Corporation acquired certain assets of Bowers
Manufacturing Corporation, primarily inventories and equipment relating to the
manufacture, sale and distribution of metallic and non-metallic electrical
outlet boxes and surface raceway systems, for $8.5 million in cash. Bowers will
be accounted for using the purchase method of accounting.
During 1994, the Corporation made four acquisitions. Three were purchases
from Eaton Corporation involving primarily inventories and equipment: in
January, certain circuit protection products were purchased; in August,
Commander Electrical Products, Inc., a Canadian metal outlet box and fittings
business, was purchased; and in November, a U. S. non-metallic electrical
outlet box business was purchased. Separately, in February, the Corporation
purchased certain assets from Anford, Inc. in Canada relating to the
manufacture and sale of cable tray. The total purchase price of these
acquisitions was $72.8 million. In August 1994, the Corporation also purchased
a minority interest (approximately 29%) in Leviton Manufacturing Co., Inc., the
leading U.S. manufacturer of wiring devices, for cash of $25.6 million and
common stock worth $25.0 million.
Acquisitions in 1993 totaled $3.0 million and were accounted for as
purchase transactions.
CAPITAL SPENDING
Capital spending increased significantly over the past three years, from
$38.6 million in 1993 to $66.9 million in 1994 to a record $101.8 million in
1995. Capital funds were used for restructuring projects to improve service and
reduce operating costs, to expand manufacturing capacity and produce new
products, and to increase efficiency in keeping with the Corporation's
strategic focus on core businesses and product lines. Projects in 1995 included
three new state-of-the-art warehouse facilities in Mississippi, Canada and
Belgium; the expansion of production capabilities in Puerto Rico; and new
equipment and efficiency-related improvements at facilities in Arkansas and
Mexico. In 1994, the Corporation began refurbishment of the newly leased
Arkansas manufacturing facility, completed a second expansion of its existing
Mississippi warehouse facility initiated in 1993, completed the refurbishment
and equipment upgrade at a newly leased warehouse facility
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in Nevada and began construction of the new warehouse facility in Canada.
ENVIRONMENTAL MATTERS
The Corporation believes it is substantially in compliance with all
applicable environmental laws and regulations and that the cost of maintaining
substantial compliance with such laws and regulations will not be material to
its financial statements.
With the acquisition of American Electric in 1992, the Corporation became
the owner of certain manufacturing facilities that were being remediated or
could potentially require remediation. As part of the acquisition, reserves
were provided and arrangements made with third parties to cover the cost of
remediation. In 1994, an additional $7.0 million was provided for potential
environmental remediation of a planned facility closing and was recorded as
part of the 1994 restructuring charge. The Corporation paid $1.4, $0.7 and $0.9
million for remediation and corrective matters for the years 1995, 1994 and
1993, respectively, with payments for Superfund-related matters being less than
$0.2 million in any year. The Corporation's policy is to accrue undiscounted
future remediation expenses to the extent known and determinable.
RESTRUCTURING
Activities related to the $79.0 million restructuring charge taken in
1994 generally proceeded as anticipated. The timing of forecasted spending
relating to Mexican operations was revised as a result of uncertainties related
to the peso devaluation in late 1994, and is now expected to be completed in
1996. During 1995, the Corporation expended $21.8 million of the cash portion
of the restructuring reserve primarily for severance and other employee
benefits, and $16.1 million of the non-cash portion of the reserve for disposal
of assets. Total charges applied to the restructuring reserve through year-end
1995 were $25.3 million for cash spending activities and $32.4 million for
non-cash activities.
The $13.5 million remaining reserve for cash restructuring activities is
for severance and other employee benefits and environmental clean-up and
carrying costs for closed facilities and is expected to be spent in 1996 and
thereafter. The balance of the $7.8 million reserve for non-cash restructuring
activities is expected to be consumed during 1996 to write down the carrying
values of plant, equipment and inventory at facilities to be closed or
realigned and to dispose of products to be discontinued. Anticipated total
proceeds from these disposals are not expected to be significant. The reserves
remaining at the end of 1995 are believed to be adequate for the purposes for
which they were established.
OTHER MATTERS
The Corporation manages its foreign currency exchange rate risk by
entering into foreign exchange contracts to hedge currency exposures. It does
not trade in these instruments for speculative purposes.
The Corporation maintains a portfolio of marketable securities and cash
equivalents in Puerto Rico, which at year-end 1995 was valued at $95.0
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million. Although these investments represent currently available funds, they
remain invested so the Corporation can obtain favorable, partially tax-exempt
status on earnings generated in Puerto Rico.
In March and October of 1995, the Financial Accounting Standards Board
issued Statements No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," and No. 123, "Accounting for
Stock-Based Compensation." Both Statements are effective for fiscal years
beginning after December 15, 1995, and neither is expected to have a
significant effect on the financial statements of the Corporation.
DIVIDENDS AND RELATED SECURITY HOLDER MATTERS
In 1995, the Corporation declared cash dividends of $1.12 per share, or
$44.2 million. These dividends represent 55 percent of net earnings in 1995
compared to dividends representing 64 percent of net earnings in 1994. Debt
covenants permit the Corporation to continue paying dividends at the current
rate, with increases allowed only if the dividend payout does not exceed 50
percent of earnings. Thomas & Betts has paid dividends for 62 consecutive
years.
The Corporation's common stock is traded on the New York Stock Exchange.
Thomas & Betts had 40,076,000 shares of common stock outstanding at December
31, 1995 which were held by 3,787 shareholders of record.
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CONSOLIDATED STATEMENT OF EARNINGS
Thomas & Betts Corporation
=================================================================================================
In thousands (except per share data) 1995 1994 1993
- -------------------------------------------------------------------------------------------------
NET SALES $ 1,236,825 $ 1,076,165 $ 957,509
----------- ---------- ----------
COSTS AND EXPENSES
Cost of sales 812,080 710,864 628,577
Marketing, general and administrative 254,780 229,897 211,430
Research and development 22,698 20,787 18,664
Amortization of intangibles 9,796 11,040 11,780
Provision for restructured operations - 79,011 -
----------- ---------- ----------
1,099,354 1,051,599 870,451
----------- ---------- ----------
Earnings from operations 137,471 24,566 87,058
Other expense-net 20,301 24,072 27,116
----------- ---------- ----------
Earnings from continuing operations
before income taxes 117,170 494 59,942
Income taxes(benefit) 36,268 (1,393) 16,353
----------- ---------- ----------
Earnings from continuing operations
before cumulative effect of change
in accounting for income taxes 80,902 1,887 43,589
Earnings from discontinued operations,
net of income taxes of $4,628
for 1994 and $7,180 for 1993 - 7,350 11,322
Gain on sale of discontinued
operations net of income taxes
of $40,492 - 58,583 -
----------- ---------- ----------
Earnings before cumulative effect
of change in accounting for
income taxes 80,902 67,820 54,911
Cumulative effect of change in
accounting for income taxes - - 1,628
----------- ---------- ----------
NET EARNINGS $ 80,902 $ 67,820 $ 56,539
----------- ---------- ----------
SHARE DATA(1)
Earnings from continuing operations
before cumulative effect of change
in accounting for income taxes $ 2.02 $ 0.05 $ 1.16
Earnings from discontinued operations- - 0.19 0.30
Gain on sale of discontinued operations - 1.52 -
----------- ---------- ----------
Earnings before cumulative effect
of change in accounting for
income taxes 2.02 1.76 1.46
Cumulative effect of change in
accounting for income taxes - - 0.04
----------- ---------- ----------
Net Earnings $ 2.02 $ 1.76 $ 1.50
----------- ---------- ----------
Cash dividends declared $ 1.12 1.12 $ 1.12
Average shares outstanding 39,956 38,608 37,674
=================================================================================================
(1) Amounts have been restated to reflect a two-for-one stock split effective
March 8, 1996.
See Notes to Consolidated Financial Statements
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CONSOLIDATED BALANCE SHEET
Thomas & Betts Corporation
===============================================================================
December 31, January 1,
In thousands 1995 1995
- -------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 44,411 $ 69,671
Marketable securities 60,638 52,569
Receivables, less allowance for doubtful
accounts and cash discounts of $5,942
in 1995 and $4,556 in 1994 186,585 168,077
Inventories 211,860 198,422
Deferred income taxes 19,486 40,059
Prepaid expenses 4,635 5,195
----------- -----------
Total Current Assets 527,615 533,993
PROPERTY, PLANT AND EQUIPMENT
Land 13,981 9,549
Buildings 144,194 110,435
Machinery and equipment 457,269 427,115
----------- -----------
615,444 547,099
Less accumulated depreciation 277,263 271,574
----------- -----------
338,181 275,525
INTANGIBLE ASSETS-NET 314,423 323,228
INVESTMENTS AND OTHER ASSETS 79,163 75,466
----------- -----------
TOTAL ASSETS $ 1,259,382 $ 1,208,212
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term bank borrowings $ 27,518 $ 15,355
Current maturities of long-term debt 19,840 3,304
Accounts payable 110,462 118,052
Accrued liabilities 99,180 116,875
Income taxes 14,700 15,779
Dividends payable 11,221 10,979
----------- -----------
Total Current Liabilities 282,921 280,344
LONG-TERM LIABILITIES
Long-term debt 327,812 319,519
Other long-term liabilities 35,510 40,408
Deferred income taxes 12,565 14,898
SHAREHOLDERS' EQUITY
Common stock(1) 20,086 19,644
Additional paid-in capital(1) 167,015 159,469
Retained earnings 411,984 373,011
Unrealized gain on marketable securities 786 867
Foreign currency translation adjustment 3,997 2,661
Cost of treasury stock (3,294) (2,609)
----------- -----------
Total Shareholders' Equity 600,574 553,043
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,259,382 $1,208,212
===============================================================================
(1) Amounts have been restated to reflect a two-for-one stock split effective
March 8, 1996.
See Notes to Consolidated Financial Statements
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CONSOLIDATED STATEMENT OF CASH FLOWS
Thomas & Betts Corporation
======================================================================================================
(In thousands) 1995 1994 1993
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings from continuing operations $ 80,902 $ 1,887 $ 43,589
Adjustments:
Depreciation and amortization 54,676 53,532 48,998
Provision for restructured operations - 79,011 -
Provision for facilities-related operating
charges - 10,632 -
Deferred income taxes 13,028 (38,498) 6,108
Changes in operating assets and liabilities, net:
Receivables (15,460) (13,617) (18,791)
Inventories (7,779) (20,740) (5,321)
Accounts payable (9,904) 38,637 17,286
Accrued liabilities (19,941) 2,095 419
Income taxes payable (1,057) 7,934 3,643
Cash from discontinued operations - 7,606 18,766
Other (6,542) 1,751 (6,132)
--------- --------- --------
Net cash provided by operating activities 87,923 130,230 108,565
--------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of and investments in businesses (12,066) (84,084) -
Purchases of property, plant and equipment (101,760) (59,109) (28,044)
Proceeds from sale of property, plant and
equipment 2,447 6,057 10,481
Marketable securities acquired (50,925) (30,509) (22,486)
Proceeds from matured marketable securities 49,500 19,292 50,219
Proceeds from sale of product line 4,900 - -
Proceeds from sale of Vitramon, net of tax - 144,700 -
Net investments in discontinued operations - (7,781) (10,473)
Other (398) 1,733 (1,280)
--------- --------- --------
Net cash used in investing activities (108,302) (9,701) $ (1,583)
--------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in borrowings with original
maturities less than 90 days 24,438 (9,543) 2,181
Proceeds from long-term debt and other borrowings 24,789 43,998 27,447
Repayment of long-term debt and other borrowings (18,455) (119,942) (70,295)
Stock options exercised 5,359 4,116 4,082
Cash dividends paid (43,996) (42,996) (42,158)
--------- --------- --------
Net cash used in financing activities (7,865) (124,367) (78,743)
--------- --------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 2,984 1,000 2,506
--------- --------- --------
Net increase (decrease) in cash and cash
equivalents (25,260) (2,838) 30,745
Cash and cash equivalents - beginning of year 69,671 72,509 41,764
--------- --------- --------
Cash and cash equivalents - end of year $ 44,411 $ 69,671 $ 72,509
======================================================================================================
Cash payments for interest $ 27,890 $ 27,027 $ 29,900
Cash payments for taxes $ 23,848 $ 70,561 $ 14,024
======================================================================================================
See Notes to Consolidated Financial Statements
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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Thomas & Betts Corporation
===============================================================================================
Common Stock Additional
----------------- Paid-In Retained
In thousands (except per share data) Shares Amount Capital Earnings
- -----------------------------------------------------------------------------------------------
Balance at December 31, 1992 37,612 $ 18,806 $ 109,647 $ 334,278
- -----------------------------------------------------------------------------------------------
Net earnings - - - 56,539
Dividends declared ($1.12 per share) - - - (42,220)
Stock options and incentive awards 240 120 6,290 -
Translation adjustments,
net of taxes of $1,059 - - - -
- -----------------------------------------------------------------------------------------------
Balance at January 2, 1994 37,852 18,926 115,937 348,597
- -----------------------------------------------------------------------------------------------
Net earnings - - - 67,820
Unrealized gain upon adoption of
SFAS 115, net of taxes of $839 - - - -
Unrealized loss on marketable
securities, net of taxes of ($344) - - - -
Dividends declared ($1.12 per share) - - - (43,406)
Stock options and incentive awards 190 95 4,872 -
Business acquisition and investments 1,246 623 38,660 -
Translation adjustments,
net of taxes of $915 - - - -
- -----------------------------------------------------------------------------------------------
Balance at January 1, 1995 39,288 19,644 159,469 373,011
- -----------------------------------------------------------------------------------------------
Poolings of interest 656 328 1,616 2,309
Net earnings - - - 80,902
Unrealized loss on marketable
securities, net of taxes of ($55) - - - -
Dividends declared ($1.12 per share) - - - (44,238)
Stock options and incentive awards 228 114 5,930 -
Translation adjustments,
net of taxes of $ 719 - - - -
- -----------------------------------------------------------------------------------------------
Balance at December 31, 1995 40,172 $ 20,086 $ 167,015 $ 411,984
===============================================================================================
Thomas & Betts Corporation
===================================================================================================
Unrealized
Gain (Loss) Cumulative Treasury Stock
On Marketable Translation ------------------
In thousands(except per share data) Securities Adjustment Shares Amount
- ----------------------------------------------------------------------------------------------------
Balance at December 31, 1992 $ - $ 3,054 (86) $ (2,723)
- ----------------------------------------------------------------------------------------------------
Net earnings - - - -
Dividends declared ($1.12 per share) - - - -
Stock options and incentive awards - - (20) (866)
Translation adjustments,
net of taxes of $1,059 - (2,093) - -
- ----------------------------------------------------------------------------------------------------
Balance at January 2, 1994 - 961 (106) (3,589)
- ----------------------------------------------------------------------------------------------------
Net earnings - - - -
Unrealized gain upon adoption of
SFAS 115, net of taxes of $839 1,556 - - -
Unrealized loss on marketable
securities, net of taxes of ($344) (689) - - -
Dividends declared ($1.12 per share) - - - -
Stock options and incentive awards - - 28 980
Business acquisition and investments - - - -
Translation adjustments,
net of taxes of $915 - 1,700 - -
- ----------------------------------------------------------------------------------------------------
Balance at January 1, 1995 867 2,661 (78) (2,609)
- ----------------------------------------------------------------------------------------------------
Poolings of interest - - - -
Net earnings - - - -
Unrealized loss on marketable
securities, net of taxes of ($55) (81) - - -
Dividends declared ($1.12 per share) - - - -
Stock options and incentive awards - - (18) (685)
Translation adjustments,
net of taxes of $ 719 - 1,336 - -
- ----------------------------------------------------------------------------------------------------
Balance at December 31, 1995 $ 786 $ 3,997 (96) $ (3,294)
====================================================================================================
Preferred Stock: Authorized 500,000 shares without par value. To date none of
these shares has been issued.
Common Stock: Authorized 80,000,000 shares, par value $.50 per share.
- --------------------------------------------------------------------------------
Amounts have been restated to reflect a two-for-one stock split effective
March 8, 1996.
See Notes to Consolidated Financial Statements
EX13-12
13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
Thomas and Betts Corporation designs, manufactures, and markets, on a global
basis, electrical and electronic connectors and components as well as other
related products and accessories for 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
and of products and components to the heating, mechanical and refrigeration
(HMR) markets. The Corporation is also a worldwide designer and manufacturer
of electronic connectors and flat cable, which are sold primarily to OEM's in
the automotive, computer, office equipment, test equipment, instrumentation,
industrial automation and telecommunications industries in North America,
Europe and the Far East.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Corporation
and its wholly owned domestic and foreign subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
The Corporation uses the equity method of accounting for its investments in 50
percent or less owned companies.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
FISCAL YEAR
The Corporation's fiscal year ends on the Sunday closest to the end of the
calendar year. Results for 1995, 1994 and 1993 are for the 52 weeks ended
December 31, 1995, January 1, 1995 and January 2, 1994, respectively.
MARKETABLE SECURITIES
Effective January 3, 1994, the Corporation adopted statement of Financial
Accounting Standards No. 115, and changed from accounting for its marketable
securities on an amortized cost basis to a fair market value basis. See Note 7.
EX13-13
14
FOREIGN EXCHANGE
The Corporation becomes exposed to exchange rate risk when its U.S. and
non-U.S. subsidiaries enter into transactions denominated in currencies other
than their functional currency. The Corporation enters into foreign exchange
contracts to hedge, where possible, this risk. As exchange rates change, gains
and losses recorded on the exposed transactions are offset by those on the
hedging contracts. Both the exposed transactions and the hedging contracts are
marked to market monthly with gains and losses included in earnings. A high
correlation is maintained between the transactions and the hedges to minimize
currency risk, and the high creditworthiness of the counterparties to the
hedging contracts (financial institutions having at least a single-A credit
rating) minimizes non-performance risk. The Corporation does not enter into
foreign exchange contracts for trading purposes.
At December 31, 1995 and January 1, 1995, the Corporation had outstanding
contracts to sell $76.9 and $69.5 million, respectively, of principally
Canadian and European currencies for U.S. dollars and to buy the equivalent of
$22.0 and $4.6 million, respectively, of European currencies, all maturing
within 180 days.
INVENTORIES
Inventories are stated at lower of cost or market. Cost is determined using the
last-in, first-out (LIFO) method for most domestic inventories, and the
first-in, first-out (FIFO) method for other inventories.
Inventories valued using the LIFO method represented approximately 69
percent of total inventories at December 31, 1995 and 73 percent at
January 1, 1995. The LIFO value of inventories held at December 31, 1995
approximated their current values.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Expenditures for maintenance
and repair are charged to costs and expenses as incurred. Significant renewals
and betterments that extend the lives of assets are capitalized. Depreciation
is computed principally on the straight-line method over the estimated useful
lives of the assets which range principally from 10 to 25 years for land
improvements, 10 to 45 years for buildings, and 3 to 15 years for machinery and
equipment.
INTANGIBLE ASSETS
Intangible assets consist principally of the excess of cost over the fair value
of net assets (goodwill) acquired in business combinations accounted for as
purchases. These assets are being amortized on a straight-line basis over
periods of 15 to 40 years. Goodwill is reevaluated when business events and
circumstances indicate that the carrying amount may not be recoverable.
Reevaluation is based on projections of related undiscounted future cash flows.
As of December 31, 1995 and January 1, 1995, accumulated amortization of
intangible assets was $50.4 and $40.5 million, respectively.
EX13-14
15
INCOME TAXES
Effective January 1, 1993, the Corporation changed from the deferred method of
accounting for income taxes under APB Opinion No. 11 to the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." Prior-years' financial statements were not restated. SFAS
No. 109 requires the asset and liability method of accounting for income taxes.
This method recognizes the expected future tax consequences of temporary
differences between the book and tax bases of assets and liabilities.
Deferred taxes are not provided on undistributed net earnings of foreign
subsidiaries, approximately $8.1 million at December 31, 1995, to the extent
that those earnings are expected to be permanently reinvested in the
subsidiaries. It is estimated that taxes ultimately payable on the distribution
of these earnings would not be significant.
INTEREST RATE SWAPS
The Corporation has two interest rate swap agreements to reduce the impact of
changes in interest rates on a portion of its floating-rate debt. The
differential to be paid or received under these agreements is accrued monthly
consistent with the terms of the agreements and market interest rates. These
agreements are with financial institutions having at least a double-A credit
rating, which minimizes non-performance risk.
EARNINGS PER SHARE
Earnings per share is computed by dividing net earnings by the weighted average
number of shares of common stock outstanding during the year. The effect on
earnings per share resulting from the assumed exercise of outstanding options
is not material.
CASH FLOW INFORMATION
Cash equivalents consist of investments with maturities at date of purchase of
less than 90 days that have a low risk of change in value due to interest rate
changes. Foreign currency cash flows have been converted to U.S. dollars at
appropriately weighted average exchange rates or the exchange rates in effect
at the time of the cash flows, where determinable.
3. ACQUISITIONS
On February 6, 1995, the Corporation acquired certain assets (primarily
inventories and equipment) of Anchor Electric Company, a manufacturer of
electrical meter centers, for $3.5 million in cash. On July 25, 1995, the
Corporation acquired all the outstanding stock of E. K. Campbell Company, a
custom industrial heating and cooling equipment manufacturer, in exchange for
28,090 shares of the Corporation's common stock. On October 27, 1995, the
Corporation acquired all the outstanding stock of Catamount Manufacturing,
Inc., a manufacturer of cable ties, wire connectors and related electrical
products, for 629,720 shares of the Corporation's common stock, and the
assumption of approximately $13.0 million of Catamount's debt. The Anchor
Electric acquisition was accounted for using the purchase method of accounting
and the E.K. Campbell and Catamount
EX13-15
16
acquisitions were accounted for using the pooling of interest method of
accounting without restating prior-year results due to immateriality. These
businesses represented $36.8 million of sales reported by the Corporation in
1995.
In 1994 the Corporation made three separate purchases of assets from Eaton
Corporation, primarily inventories and equipment. On January 31, 1994, the
Corporation purchased certain circuit protection products in exchange for
447,432 shares of its common stock having a market value of $14.3 million; on
August 11, 1994 it purchased all the stock of Commander Electrical Products,
Inc., a Canadian metal outlet box and fittings business for $51.2 million in
cash; and on November 30, 1994, it purchased a U. S. non-metallic electrical
outlet box business for $4.4 million in cash. Separately, on February 18, 1994,
the Corporation purchased certain Canadian assets from Anford Inc., relating to
the manufacture, sale and distribution of Canadian cable tray, for $2.9 million
in cash. All of these acquisitions were accounted for using the purchase method
of accounting; therefore, the accompanying financial statements include the
results of these businesses since the dates of their respective acquisition.
These businesses represented approximately $54.0 million of sales reported by
the Corporation in 1994.
On August 10, 1994 the Corporation completed the purchase of a minority
interest (approximately 29%) in Leviton Manufacturing Co., Inc., the leading
U.S. manufacturer of wiring devices, for common stock having a market value of
$25.0 million and for cash of $25.6 million.
Acquisitions totaling $3.0 million were made in 1993 and accounted for as
purchase transactions.
4. RESTRUCTURING
In the third quarter of 1994, the Corporation recorded a $79.0 million pretax
restructuring charge to consolidate and realign manufacturing facilities,
operations and service processes, to provide for the discontinuance of certain
products, and to reduce its overhead structure. The Corporation established a
liability of approximately $38.8 million for cash charges, primarily severance
benefits and other employee termination costs, ongoing carrying costs of closed
facilities, environmental clean-up costs at facilities to be closed, and other
related costs. In 1994 and 1995, the Corporation spent $3.5 million and $21.8
million, respectively, primarily on employee costs, with the remaining $13.5
million earmarked for environmental clean-up and facility carrying costs
expected to be spent in 1996 and thereafter. The Corporation also provided
approximately $40.2 million for non-cash restructuring charges to provide for
losses on the disposition of plant, equipment and inventory at facilities to be
closed or realigned and to dispose of products to be discontinued. In 1994 and
1995, the Corporation disposed of $16.3 million and $16.1 million worth of
assets, respectively, and it is estimated that the remaining $7.8 million
reserve will be used in 1996. Anticipated total proceeds from these disposals
are not expected to be significant.
EX13-16
17
5. DISCONTINUED OPERATIONS AND BUSINESSES SOLD
On September 28, 1995, the Corporation sold its residential lighting, multiple
outlet center and surge protection consumer product lines. Annualized sales of
these products were about $20.0 million.
On July 18, 1994, the Corporation sold its multilayer ceramic chip
capacitor subsidiary, Vitramon, Incorporated, for $184.0 million in cash
($144.7 million after tax payments) and realized a $58.6 million gain after
tax.
6. INCOME TAXES
The components of earnings from continuing operations before income taxes are
as follows:
=====================================================================================
In thousands 1995 1994 1993
- -------------------------------------------------------------------------------------
Domestic $ 85,371 $ (1,301) $ 54,036
Foreign 31,799 1,795 5,906
- -------------------------------------------------------------------------------------
Total $117,170 $ 494 $ 59,942
=====================================================================================
The components of income tax expense on continuing operations are as
follows:
=====================================================================================
In thousands 1995 1994 1993
- -------------------------------------------------------------------------------------
Current
Federal $ 10,916 $ 28,962 $ 5,759
Foreign 10,041 4,225 2,783
State and local 1,173 2,098 1,957
- -------------------------------------------------------------------------------------
Total current 22,130 35,285 10,499
- -------------------------------------------------------------------------------------
Deferred
Federal $ 12,488 (36,599) 5,561
Foreign 1,650 (79) 293
- -------------------------------------------------------------------------------------
Total deferred 14,138 (36,678) 5,854
- -------------------------------------------------------------------------------------
Income taxes (benefit) $ 36,268 $ (1,393) $ 16,353
=====================================================================================
The reconciliation between the Federal statutory tax rate and the
Corporation's effective tax rate on continuing operations is as follows:
======================================================================================
1995 1994 1993
- --------------------------------------------------------------------------------------
Federal statutory tax rate 35.0% 35.0% 35.0%
Increase (reduction) resulting from:
State tax - net of Federal tax
benefit 0.8 331.6 2.1
Partially tax-exempt income (5.3) (1,312.8) (18.0)
Goodwill and other deductions 2.6 594.6 4.7
Donation of plant facility (1.5) - -
Change in valuation allowance (1.5) 24.7 1.4
Other 0.9 44.9 2.1
- -------------------------------------------------------------------------------------
Effective tax rate 31.0% (282.0)% 27.3%
=====================================================================================
EX13-17
18
The components of the Corporation's net deferred tax asset were:
===============================================================================
December 31, January 2,
In thousands 1995 1995
- -------------------------------------------------------------------------------
Deferred tax assets:
Restructuring reserves $ 6,064 $ 22,794
Accrued employee benefits 12,567 12,494
Other accruals 16,300 15,862
Asset reserves 8,981 10,414
Foreign tax credits and loss
carryforwards 6,813 8,969
Other 8,430 5,601
Valuation allowance (6,813) (8,524)
- -------------------------------------------------------------------------------
Net deferred tax assets 52,342 67,610
- -------------------------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment (23,442) (26,009)
Pension benefits (4,174) (4,174)
Unremitted earnings of foreign subsidiaries (3,522) (3,522)
Other (10,181) (8,744)
- -------------------------------------------------------------------------------
Total deferred tax liabilities (41,319) (42,449)
- -------------------------------------------------------------------------------
Net deferred tax asset $ 11,023 $ 25,161
===============================================================================
The valuation allowance for deferred tax assets was decreased by $1.7
million due to utilization of all previously reserved loss carryforwards. The
remaining valuation allowance at December 31, 1995 relates to a foreign tax
credit carryover.
Non-U.S. deferred tax assets of $4.1 million are included in Investments
and Other Assets on the balance sheet at December 31, 1995.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Corporation's financial instruments were as
follows:
=====================================================================================
December 31, 1995 January 1, 1995
- -------------------------------------------------------------------------------------
Carrying Fair Carrying Fair
In thousands Amount Value Amount Value
- -------------------------------------------------------------------------------------
Cash and cash equivalents $ 44,411 $ 44,411 $ 69,671 $ 69,671
Marketable securities 60,638 60,638 52,569 52,569
Long-term debt (347,652) (302,574) (322,823) (318,069)
Interest rate swaps - (393) - 380
Foreign currency contracts $ 484 $ 484 $ (290) $ (290)
=====================================================================================
The fair value of marketable securities was based on quoted market
prices. The fair value of long-term debt was based on quoted market prices or
on the current market rates available to the Corporation for debt of the same
remaining maturity. The fair value of the interest rate swap agreements was
based on the current payments required for their settlement. Foreign currency
contracts are recorded at fair value, adjusted to reflect changes in exchange
rates.
EX13-18
19
The cost basis and fair market value of these available-for-sale
securities at December 31, 1995 and January 1,1995 were:
=============================================================================
Amortized Gross Gross Fair
Cost Unrealized Unrealized Market
In thousands Basis Gains Losses value
- -----------------------------------------------------------------------------
DECEMBER 31, 1995
Mortgage-Backed $44,716 $ 1,236 $ (409) $45,543
Equity and Other 14,586 509 - 15,095
- -----------------------------------------------------------------------------
Total $59,302 $ 1,745 $ (409) $60,638
- -----------------------------------------------------------------------------
JANUARY 1, 1995
Mortgage-backed $49,739 $ 1,797 $(1,612) $49,924
Equity and other 1,468 1,177 - 2,645
- -----------------------------------------------------------------------------
Total $51,207 $ 2,974 $(1,612) $52,569
=============================================================================
There were no sales of available-for-sale securities during the year. The
mortgage-backed securities held at December 31, 1995 have expected maturities
ranging from one to nine years.
8. LONG-TERM DEBT
The Corporation's long-term debt at December 31, 1995 and January 1, 1995 was
as follows:
===============================================================================
December 31, January 1,
In thousands 1995 1995
- -------------------------------------------------------------------------------
Revolving credit facility with
a weighted average interest
rate at December 31, 1995 of 6.00%(1) $ 92,500 $ 85,000
Other borrowings with
a weighted average interest
rate at December 31, 1995 of 6.03%(1)(2) 48,400 37,700
Notes payable:
5.10%, due February 23, 1996(2) 20,000 20,000
8.25%, due January 15, 2004 124,383 124,307
International borrowings with
a weighted average interest
rate of 5.61% at December 31,
1995, due through 2002 30,897 31,910
Industrial revenue bonds with a
weighted average interest rate
at December 31, 1995 of 5.31%,
due from 2001-2013 26,400 18,405
Other 5,072 5,501
- -------------------------------------------------------------------------------
347,652 322,823
Less current portion 19,840 3,304
- -------------------------------------------------------------------------------
$327,812 $319,519
===============================================================================
(1) Two interest rate swaps act to the benefit of the Corporation if
interest rates increase. The Corporation receives interest on $25.0
million at the one-month LIBOR rate in exchange for 7.09% through
April 1997 and interest on $25.0 million at the six-month LIBOR rate
in exchange for 4.48% through December 1996.
(2) Committed credit available under the revolving credit facility
provides the ability to refinance this debt on a long-term basis.
Principal payments on long-term debt in each of the five years
subsequent to December 31, 1995 are $19.8, $7.1, $5.3, $4.6 and $163.5 million,
respectively.
EX13-19
20
In March 1995, the Corporation renegotiated and increased its revolving
credit facility to $500.0 million from $280.0 million, making these funds
available for a term of five years from the renegotiation date. The covenants
of this facility were amended in December 1995 in anticipation of the Amerace
acquisition. The Corporation has the option, at the time of drawing funds under
this revised facility, of selecting an interest rate based on a number of
benchmarks including LIBOR, the certificate of deposit rate and the prime rate
of Morgan Guaranty Trust Company. This credit facility includes covenants,
among which are limitations on the amount of future indebtedness and the
maintenance of certain financial ratios. Dividends are permitted to continue at
the current rate per share and may be increased, provided the payout does not
exceed 50 percent of net earnings.
In January 1996, the Corporation completed the sale of $150.0 million of
10-year 6-1/2% senior notes. See Note 15.
9. STOCK OPTION AND INCENTIVE PLANS
The Corporation has stock option plans that provide for the purchase of the
Corporation's common stock by its key employees.
Following is a summary of the option transactions for the years 1993,
1994 and 1995:
=================================================================
Average
Per Share
Shares Option Price
- -----------------------------------------------------------------
Balance at December 31, 1992 1,102,104 $ 27.29
- -----------------------------------------------------------------
Granted 303,250 34.78
Exercised (240,266) 25.91
Terminated (17,950) 33.21
- -----------------------------------------------------------------
Balance at January 2, 1994 1,147,138 29.47
- -----------------------------------------------------------------
Granted 580,250 32.27
Exercised (189,890) 27.70
Terminated (97,350) 32.65
- -----------------------------------------------------------------
Balance at January 1, 1995 1,440,148 30.58
- -----------------------------------------------------------------
Granted (1) 376,396 28.65
Exercised (226,362) 26.90
Terminated (116,746) 32.43
- -----------------------------------------------------------------
Balance at December 31, 1995 1,473,436 30.50
- -----------------------------------------------------------------
Exercisable at December 31, 1995 833,936 $ 29.00
=================================================================
All amounts have been restated to reflect a two-for-one stock split effective
March 8, 1996.
(1) Includes Catamount stock options converted into the Corporation's stock
options.
Under the 1985 and 1990 stock option plans, no further options may be
granted and remaining options outstanding are exercisable at various dates
until 1999. The 1993 Management Stock Ownership Plan (MSOP) provides that, for
each calendar year, up to 1-1/4% of the issued and outstanding common stock of
the Corporation shall be available for issuance as grants or awards. This plan
provides for granting stock options at a price equal to the fair market value
on the date of grant with a term not to exceed ten years.
EX13-20
21
At December 31, 1995 a total of 2,563,412 shares was reserved for
issuance under stock options already granted or available for future grant.
The MSOP and, prior to 1994, the 1988 Restricted Stock Incentive Plan,
provided for the issuance of common stock as incentive compensation to key
employees. The awards are subject to certain restrictions, including one that
provides for full vesting if the recipient remains in the employ of the
Corporation three years after receipt of the award. The value of the awards is
deductible by the Corporation as compensation expense. Shares plus cash
payments for federal and state taxes awarded under these plans were 41,748
shares plus $0.6 million in 1995, 56,332 shares plus $0.9 million in 1994 and
38,154 shares plus $0.5 million in 1993.
The Corporation has a Restricted Stock Plan for Nonemployee Directors
under which each director receives 200 restricted shares of common stock
annually for a full year of service. These shares remain restricted during the
director's term. Shares issued under this plan were 1,850 shares in 1995, 1,600
shares in 1994 and 1,884 shares in 1993.
10. POSTRETIREMENT BENEFITS
PENSION PLANS
The Corporation and its subsidiaries have several noncontributory pension plans
covering substantially all employees. These plans generally provide pension
benefits that are based on compensation levels and years of service. Annual
contributions to the plans are made according to the established laws and
regulations of the applicable countries. Plan assets are primarily invested in
equity securities, fixed income securities, cash equivalents and real estate.
Net periodic pension cost for 1995, 1994 and 1993 for the Corporation's
defined benefit pension plans included the following components:
=====================================================================================
In thousands 1995 1994 1993
- -------------------------------------------------------------------------------------
Service cost--benefits earned during
the period $ 4,961 $ 5,150 $ 4,852
Interest cost on projected benefit
obligation 10,193 9,617 9,119
Actual return on assets (17,145) (2,346) (9,971)
Net amortization and deferral 4,833 (10,345) (2,398)
- -------------------------------------------------------------------------------------
Net periodic pension cost $ 2,842 $ 2,076 $ 1,602
=====================================================================================
Assumptions used in developing the net periodic pension cost were:
====================================================================================
U.S. Plans Non-U.S.Plans
- ------------------------------------------------------------------------------------
1995 1994 1993 1995 1994 1993
- ------------------------------------------------------------------------------------
Discount rate 8.0% 7.5% 8.0% 7.4% 7.6% 8.2%
Rate of increase in
compensation level 5.5% 5.0% 5.5% 5.0% 5.1% 6.0%
Expected long-term rate of
return on plan assets 8.5% 8.5% 8.5% 8.5% 8.6% 8.9%
====================================================================================
Non-U.S. rates are weighted averages.
EX13-21
22
The following table sets forth the funded status of the Corporation's
defined benefit plans as of December 31, 1995 and January 1, 1995 and amounts
recognized in the Corporation's balance sheet:
===========================================================================
December 31, January 1,
In thousands 1995 1995
- ---------------------------------------------------------------------------
Actuarial present value of projected
benefits based on employment service
to date and present pay levels:
Vested employees $ 129,380 $ 117,842
Non-vested employees 5,120 4,302
- ---------------------------------------------------------------------------
Accumulated benefit obligation 134,500 122,144
Additional amounts related to
projected pay increases 9,992 10,145
- ---------------------------------------------------------------------------
Projected benefit obligation 144,492 132,289
Plan assets at fair value 144,356 136,592
- ---------------------------------------------------------------------------
Plan assets(less than)in excess of
projected benefit obligation (136) 4,303
Unrecognized transition assets (6,450) (7,698)
Unrecognized net loss 5,439 5,231
Unrecognized prior service cost 1,784 1,732
- ---------------------------------------------------------------------------
Prepaid pension cost (included in
other assets in the balance sheet) $ 637 $ 3,568
===========================================================================
The present value of projected benefits for U.S. plans for December 1,
1995 was determined using a discount rate of 7.5% and an assumed rate of
increase in compensation of 4.5%. The present value of projected benefits for
U.S. plans for December 1, 1994 was determined using a discount rate of 8.0%
and an assumed rate of increase in compensation of 5.5%.
During 1995 the Corporation incurred a pension plan curtailment loss
of $1.2 million resulting from the closing of its Elizabeth, N.J. facility.
This loss was provided for as part of the 1994 restructuring charge.
See Note 4.
The Corporation maintains a non-qualified supplemental pension plan
covering certain key executives, which provides for benefit payments in
addition to those subject to the limitations of income tax regulations, and a
retirement plan for Nonemployee Directors, which provides benefits to those
Board members based on compensation and years of service. The projected benefit
obligation relating to these unfunded plans was $13.3 million at December 31,
1995 and $12.0 million at January 1, 1995. Pension expense for these plans was
$2.4 million in each of 1995 and 1994 and $1.6 million in 1993.
OTHER POSTRETIREMENT BENEFIT PLANS
The Corporation also sponsors defined contribution 401(k) savings plans for its
U.S. employees where the Corporation's contributions are based on a percentage
of employee contributions. The cost of these plans for continuing operations
was $3.0, $2.7 and $2.4 million in 1995, 1994, and 1993, respectively.
EX13-22
23
The Corporation provides certain health care and life insurance
benefits to retired employees and certain active employees who meet age and
length of service requirements. The Corporation is recognizing the estimated
liability for these benefits over the lives of the individuals covered. The
Corporation is not funding this liability.
The net periodic cost for postretirement health care and life
insurance benefits for continuing operations in 1995 and 1994 includes the
following components:
===========================================================================
In thousands 1995 1994
- ---------------------------------------------------------------------------
Service cost--benefits earned during the period $ 108 $ 135
Interest cost on accumulated benefit 1,377 1,582
Net amortization 590 1,066
- ---------------------------------------------------------------------------
Net cost $2,075 $2,783
===========================================================================
The following table shows the Corporation's accumulated postretirement
benefit obligation and the amount recognized in the balance sheet at December
31, 1995 and January 1, 1995:
===========================================================================
In thousands 1995 1994
- ---------------------------------------------------------------------------
Retirees $16,451 $18,756
Fully eligible active participants 424 661
Other active participants 1,585 1,832
- ---------------------------------------------------------------------------
Total 18,460 21,249
- ---------------------------------------------------------------------------
Unrecognized transition liability (16,936) (17,945)
Unrecognized net gain (loss) 1,231 (1,045)
Unrecognized prior service cost (203) (244)
- ---------------------------------------------------------------------------
Accrued postretirement benefit costs $ 2,552 $ 2,015
===========================================================================
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% in 1995 and 8.0% in 1994. An
increase in the cost of covered health care benefits of 10% was assumed for
1996 and the rate was assumed to decrease by 0.5% annually to 5.5% for 2005 and
future years. A 1% increase in the health care cost trend rate would increase
the accumulated postretirement benefit obligation by $1.8 million at December
31, 1995 and the net periodic cost by $0.2 million for the year then ended.
11. COMMITMENTS
The Corporation and its subsidiaries are parties to various leases
relating to plants, warehouses, office facilities, automobiles and other
equipment, principally data processing. All leases expire prior to the year
2022. Real estate taxes, insurance and maintenance expenses are normally
obligations of the Corporation. It is expected that in the normal course of
business the majority of the leases will be renewed or replaced by other
leases. The Corporation has certain capitalized leases consisting principally
of leases for buildings and equipment. Assets capitalized under long-term
leases were $15.4 and $8.1 million at December 31, 1995 and January 1, 1995,
respectively.
EX13-23
24
Future minimum payments under capital and noncancelable operating
leases of continuing operations consisted of the following at December 31,
1995:
=============================================================
In thousands Capital Operating
- -------------------------------------------------------------
1996 $1,336 $16,609
1997 1,697 9,128
1998 764 7,792
1999 636 6,881
2000 544 6,088
Thereafter 3,930 20,235
- -------------------------------------------------------------
Total minimum lease payments 8,907 $66,733
Less amounts representing interest 2,350
- -------------------------------------------------------------
Present value of future minimum
lease payments $6,557
=============================================================
Rent expense for operating leases of continuing operations was $23.8,
$22.1 and $21.0 million in 1995, 1994 and 1993, respectively.
12. OTHER FINANCIAL DATA
Other expense - net for continuing operations consists of the following:
===================================================================================
In thousands 1995 1994 1993
- -----------------------------------------------------------------------------------
Investment income $ 6,508 $ 6,103 $ 4,840
Interest expense (27,600) (26,852) (30,247)
Foreign currency losses (100) (1,634)(1) (1,984)
Foreign exchange contract gains(losses) (104) (1,195) 1,202
Other 995 (494) (927)
- -----------------------------------------------------------------------------------
$(20,301) $(24,072) $(27,116)
===================================================================================
(1) Includes loss on unhedged Mexican liabilities.
Interest rate swaps reduced interest expense by $0.2 million in 1995 while
increasing interest expense by $1.5 and $2.4 million in 1994 and 1993,
respectively.
The Corporation expenses the cost of advertising as it is incurred. Total
advertising expense was $15.1 million in 1995, $15.0 million in 1994 and $13.9
million in 1993.
Accrued liabilities include salaries, fringe benefits and other
compensation amounting to $29.3 and $27.0 million in 1995 and 1994,
respectively.
Inventories consisted of the following:
==================================================
December 31, January 1,
In thousands 1995 1995
- --------------------------------------------------
Finished goods $103,328 $ 96,159
Work in process 31,159 33,663
Raw materials 77,373 68,600
- --------------------------------------------------
$211,860 $198,422
==================================================
13. BUSINESS SEGMENTS
The Corporation operates in three business segments: Electrical
Construction and Maintenance Components ("Electrical"), Electronic/OEM
Components ("Electronic"), and Other Products and Components ("Other"). Net
sales comprise sales to unaffiliated customers; intersegment sales are
immaterial. Segment earnings from operations consist of net sales less
EX13-24
25
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.
==================================================================================
In thousands 1995 1994(1) 1993(1)
- ----------------------------------------------------------------------------------
NET SALES
Electrical $ 611,691 $ 516,843 $ 444,528
Electronic 297,934 260,110 246,857
Other 327,200 299,212 266,124
- ----------------------------------------------------------------------------------
Total $ 1,236,825 $ 1,076,165 $ 957,509
- ----------------------------------------------------------------------------------
EARNINGS FROM OPERATIONS(2)
Electrical $ 92,064 $ 29,862 $ 74,025
Electronic 37,875 360 13,117
Other 34,211 24,813 24,268
General Corporate (26,679) (30,469) (24,352)
- ----------------------------------------------------------------------------------
Total $ 137,471 $ 24,566 $ 87,058
- ----------------------------------------------------------------------------------
IDENTIFIABLE ASSETS
Electrical $ 491,166 $ 465,919 $ 379,171
Electronic 251,281 217,177 217,081
Other 326,128 319,969 324,201
General Corporate 190,807 205,147 131,631
Discontinued Op's - - 81,098
- ----------------------------------------------------------------------------------
Total $ 1,259,382 $ 1,208,212 $ 1,133,182
- ----------------------------------------------------------------------------------
CAPITAL EXPENDITURES
Electrical $ 53,318 $ 28,508 $ 13,954
Electronic 31,917 16,738 9,010
Other 14,285 10,025 5,033
General Corporate 2,240 3,838 47
Discontinued Op's - 7,797 10,511
- ----------------------------------------------------------------------------------
Total $ 101,760 $ 66,906 $ 38,555
- ----------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Electrical $ 24,480 $ 22,010 $ 20,287
Electronic 15,363 17,042 15,623
Other 11,937 12,459 11,993
General Corporate 2,896 2,021 1,095
Discontinued Op's - 4,726 8,908
- ----------------------------------------------------------------------------------
Total $ 54,676 $ 58,258 $ 57,906
==================================================================================
(1) Certain prior-year amounts have been reclassified to conform to
current-year presentation.
(2) 1994 includes restructuring charges of $52.7 million in Electrical, $23.1
million in Electronic, $1.8 million in Other and $1.4 million in General
Corporate and a write-down of $1.3 million in Electrical, $2.5 million in
Other and $6.8 million in General Corporate for previously vacated
facilities.
EX13-25
26
14. FINANCIAL INFORMATION RELATING TO OPERATIONS IN DIFFERENT GEOGRAPHIC AREAS
The Corporation's operations are conducted in three principal areas: Domestic,
Europe and Other-Non U.S. locations. Transfers between geographic areas were
priced on a basis that yields an appropriate rate of return based on assets
employed, risk and other factors.
===================================================================================
In thousands 1995 1994 1993
- -----------------------------------------------------------------------------------
SALES TO UNAFFILIATED CUSTOMER
Domestic $ 953,490 $ 844,066 $ 761,053
Europe 134,148 113,173 105,666
Other Non-U.S 149,187 118,926 90,790
- -----------------------------------------------------------------------------------
Total $ 1,236,825 $ 1,076,165 $ 957,509
- -----------------------------------------------------------------------------------
SALES OR TRANSFERS BETWEEN
GEOGRAPHIC AREAS
Domestic $ 52,715 $ 45,074 $ 43,146
Europe 8,186 5,285 3,600
Other Non-U.S 21,759 12,615 8,563
- -----------------------------------------------------------------------------------
Total $ 82,660 $ 62,974 $ 55,309
- -----------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES(1)(2)
Domestic $ 115,875 $ 38,653 $ 90,257
Europe 18,389 (581) 7,040
Other Non-U.S 29,886 16,963 14,113
General Corporate (26,679) (30,469) (24,352)
-----------------------------------------
Earnings from
operations 137,471 24,566 87,058
Other expense - net (20,301) (24,072) (27,116)
- -----------------------------------------------------------------------------------
Total $ 117,170 $ 494 $ 59,942
- -----------------------------------------------------------------------------------
IDENTIFIABLE ASSETS
Domestic $ 827,449 $ 787,180 $ 771,120
Europe 83,397 72,066 69,645
Other Non-U.S 162,322 149,513 85,069
Corporate assets
(principally cash
and investments) 190,807 205,147 131,631
Assets of discontinued
operations - - 81,098
Adjustments and
eliminations (4,593) (5,694) (5,381)
- -----------------------------------------------------------------------------------
TOTAL $ 1,259,382 $ 1,208,212 $ 1,133,182
===================================================================================
(1) Certain prior-year amounts have been reclassified to conform to
current-year presentation.
(2) Fiscal 1994 Domestic, European, Other Non-U.S. and General Corporate
earnings include a restructuring charge and write-down of previously
vacated facilities of $67.1, $12.2, $2.2 and $8.1 million, respectively.
EX13-26
27
15. SUBSEQUENT EVENTS
ACQUISITIONS
On January 2, 1996, the Corporation acquired all of the outstanding stock of
Amerace Corporation for $220.6 million in cash. Amerace is a manufacturer of
electrical products for utility and industrial markets; its most significant
products are underground power and distribution connectors sold under its
Elastimold brand name. This acquisition will be accounted for using the
purchase method of accounting.
The Corporation's consolidated statement of earnings will not include the
revenues and expenses of Amerace until the year 1996. The following unaudited
proforma results, however, were developed assuming Amerace had been acquired on
January 2, 1995:
========================================================================
In thousands (except per share data) 1995
- ------------------------------------------------------------------------
Net sales $1,451,719
Net earnings $ 86,077
Net earnings per share $ 2.15
========================================================================
This pro forma sales and earnings information is not necessarily
indicative of the combined results of operations that would have occurred had
the acquisition taken place on January 2, 1995, nor are they necessarily
indicative of results of operations for any future period.
The Corporation is evaluating approaches to integrating the operations of
Amerace, but such studies have not yet been finalized. The costs of integrating
Amerace operations are expected to result in an increase in the amount of the
purchase price which will be allocated to goodwill.
The acquisition of Amerace was initially financed with borrowings from the
Corporation's $500.0 million revolving credit facility. In January 1996, the
Corporation completed the sale of $150.0 million of 10-year 6-1/2% senior
notes. The net proceeds from the sale of these securities were used to reduce
bank debt incurred to finance the acquisition.
On January 5, 1996, the Corporation acquired certain assets (primarily
inventories and equipment) from Bowers Manufacturing Corporation relating to
the manufacture, sale and distribution of metallic and non-metallic electrical
outlet boxes and surface raceway systems, for $8.5 million in cash. This
acquisition will be accounted for using the purchase method of accounting.
COMMON STOCK SPLIT
In February 1996, the Board of Directors approved a two-for-one stock split
payable on April 9, 1996, to be issued to shareholders of record on March 8,
1996, at the rate of one additional share for each share held. The stock split
has been reflected as of December 31, 1995, by a transfer of $10.0 million from
additional paid-in capital to common stock, representing a $0.50 par value for
each additional share to be issued. Also in February 1996 the Board of
Directors approved an amendment to the Certificate of Incorporation to increase
the authorized shares of common stock from 40 to 80 million. All share and per
share data included in this annual report have been restated to reflect this
stock split.
EX13-27
28
COMPANY REPORT ON FINANCIAL STATEMENTS
TO THE SHAREHOLDERS OF THOMAS & BETTS CORPORATION:
The accompanying financial statements, as well as all financial data in this
annual report, have been prepared by the Corporation in accordance with
generally accepted accounting principles consistently applied. As such, they
include certain amounts that are based on the Corporation's estimates and
judgments. The Corporation has systems of internal control that are designed to
provide reasonable assurance that the financial records are reliable for
preparing financial statements and maintaining accountability for assets and
that assets are safeguarded against loss from unauthorized use or disposition.
These systems are augmented by the positive attitude of management in
maintaining a sound control environment, communication of established written
policies and procedures, the maintenance of a qualified internal auditing
group, the selection and training of qualified personnel, and an organizational
structure that provides appropriate delegation of authority, segregation of
duties, and regular review of financial performance by management. In addition
to our systems of internal control, additional safeguards are provided by our
independent auditors and the Audit Committee of our Board of Directors. The
independent auditors, whose report is set forth opposite, perform an objective,
independent audit of our financial statements taken as a whole. The Audit
Committee, composed entirely of outside directors, meets periodically with our
independent auditors, director of internal auditing, and members of management
to review matters relating to the quality of financial reporting and internal
accounting control, and the nature, extent and results of audit efforts.
EX13-28
29
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF THOMAS & BETTS CORPORATION:
We have audited the consolidated balance sheets of Thomas & Betts Corporation
and subsidiaries as of December 31, 1995 and January 1, 1995, and the related
consolidated statements of earnings, cash flows, and shareholders' equity for
each of the years in the three-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Thomas &
Betts Corporation and subsidiaries at December 31, 1995 and January 1, 1995 and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles.
KPMG PEAT MARWICK LLP
Memphis, Tennessee
February 8, 1996
EX13-29
30
QUARTERLY REVIEW
Thomas & Betts Corporation
==================================================================================================================
Dollars in thousands
(except per share data) 1995(6) 1994 1993
- ------------------------------------------------------------------------------------------------------------------
FIRST QUARTER
Net sales $310,328 $248,262 $235,193
Gross profit 103,398 81,276 80,882
Earnings (loss) from continuing
operations 16,988 10,264 10,040
Net earnings 16,988 13,877 14,848(3)
Earnings (loss) per share - continuing operations(5) .43 .27 .27
Earnings per share(5) .43 .37 .39(3)
Cash dividends declared per share(5) .28 .28 .28
Market price range(5) 34 3/8-32 3/8 34-29 1/8 35 3/4-31 1/2
SECOND QUARTER
Net sales $307,830 $261,707 $234,061
Gross profit 107,171 88,913 79,871
Earnings from continuing operations 19,359 12,772 9,362
Net earnings 19,359 16,100 12,235
Earnings per share - continuing operations(5) .48 .34 .25
Earnings per share(5) .48 .42 .33
Cash dividends declared per share(5) .28 .28 .28
Market price range(5) 34 1/4-31 3/8 33-30 5/8 36-31
THIRD QUARTER
Net sales $307,779 $277,407 $240,918
Gross profit 106,423 92,747 82,128
Earnings (loss) from continuing operations 21,263 (40,715) 10,816
Net earnings 21,263 18,277(4) 13,201
Earnings (loss) per share - continuing operations(5) .53 (1.06) .28
Earnings per share(5) .53 .47(4) .35
Cash dividends declared per share(5) .28 .28 .28
Market price range(5) 35 1/8-32 1/4 34 1/8-30 1/2 32 1/2-29 7/8
FOURTH QUARTER
Net sales $310,888 $288,789 $247,337
Gross profit 107,753 102,365 86,051
Earnings from continuing operations 23,292 19,566 13,371
Net earnings 23,292 19,566 16,255
Earnings per share - continuing operations(5) .58 .50 .36
Earnings per share(5) .58 .50 .43
Cash dividends declared per share(5) .28 .28 .28
Market price range(5) 37 5/8-31 1/4 35 5/8-32 5/8 31 3/8-28 1/2
==================================================================================================================
==================================================================================================================
Dollars in thousands
(except per share data) 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------------
FIRST QUARTER
Net sales $ 231,439 $123,856 $128,304
Gross profit 78,756 53,003 56,595
Earnings (loss) from continuing
operations (2,427)(2) 11,608 12,416
Net earnings 132 (2) 14,294 15,500
Earnings (loss) per share - continuing operations(5) (.06)(2) .34 .36
Earnings per share(5) - (2) .42 .45
Cash dividends declared per share(5) .28 .27 .25
Market price range(5) 32 5/8-27 5/8 28 1/4-22 1/2 28 3/4-23 7/8
SECOND QUARTER
Net sales $238,283 $117,571 $129,201
Gross profit 83,253 49,549 55,873
Earnings from continuing operations 13,157 10,255 11,924
Net earnings 15,026 12,275 15,006
Earnings per share - continuing operations(5) .35 .30 .35
Earnings per share(5) .40 .36 .44
Cash dividends declared per share(5) .28 .28 .26
Market price range(5) 31 1/8-27 3/8 30 1/2-26 1/4 30 3/4-26
THIRD QUARTER
Net sales $237,823 $113,346 $124,935
Gross profit 86,598 47,435 55,004
Earnings (loss) from continuing operations 14,193 9,215 1,003(1)
Net earnings 16,842 10,700 5,096(1)
Earnings (loss) per share - continuing operations(5) .38 .27 .03(1)
Earnings per share(5) .45 .31 .15(1)
Cash dividends declared per share(5) .28 .28 .27
Market price range(5) 34 1/2-29 3/4 27 7/8-25 1/4 28-20 3/8
FOURTH QUARTER
Net sales $232,003 $116,785 $124,220
Gross profit 85,424 46,655 52,847
Earnings from continuing operations 15,657 9,434 11,467
Net earnings 18,923 11,181 12,798
Earnings per share - continuing operations(5) .42 .28 .34
Earnings per share(5) .51 .33 .38
Cash dividends declared per share(5) .28 .28 .27
Market price range(5) 34 1/2-31 1/8 29 1/8-25 3/8 23 5/8-20 1/8
==================================================================================================================
Prior-year results of operations reflect Vitramon as a discontinued
operation(sold July 1994).
Includes the results of American Electric from January 2, 1992(date acquired).
Per share amounts based on average shares outstanding in each quarter.
(1) Includes a pretax charge of $9.0 for consolidating manufacturing facilities
and reducing operating expenses.
(2) Includes a pretax charge of $15.0 for restructured operations.
(3) Includes a one-time gain of $1.6 for the cumulative effect of change in
accounting for income taxes.
(4) Includes a pretax gain of $99.1 from the sale of Vitramon, Inc., a pretax
charge of $79.0 for restructuring,and a pretax operating write-down of
$10.6 for previously vacated facilities.
(5) Amounts have been restated to reflect a two-for-one stock split effective
March 8, 1996.
(6) The first three quarters of 1995 have been restated to include the results
of Catamount and E. K. Campbell,accounted for as immaterial poolings of
interest.
EX13-30
31
ELEVEN YEAR SUMMARY OF SELECTED FINANCIAL DATA
Thomas & Betts Corporation
==================================================================================================================
Dollars and shares in thousands (except per share data) 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------
OPERATIONAL DATA
Net sales $ 1,236,825 $ 1,076,165 $ 957,509
-------------------------------------------
Costs and expenses
Cost of sales 812,080 710,864 628,577
Marketing, general and administrative 254,780 229,897 211,430
Research and development 22,698 20,787 18,664
Amortization of intangibles 9,796 11,040 11,780
Provision for restructured operations - 79,011 -
-------------------------------------------
1,099,354 1,051,599 870,451
-------------------------------------------
Earnings from operations 137,471 24,566 87,058
Other income (expense) - net (20,301) (24,072) (27,116)
-------------------------------------------
Earnings from continuing operations before income taxes 117,170 494 59,942
Income taxes (benefit) 36,268 (1,393) 16,353
-------------------------------------------
Earnings from continuing operations before cumulative effect
of change in accounting for income taxes 80,902 1,887 43,589
Percent of sales 6.5% 0.2% 4.6%
Earnings from discontinued operations net of income taxes - 7,350 11,322
Gain on sale of discontinued operations, net of
income taxes of $40,492 - 58,583 -
-------------------------------------------
Earnings before cumulative effect of change in
accounting for income taxes 80,902 67,820 54,911
Cumulative effect of change in accounting for income taxes - - 1,628
-------------------------------------------
Net earnings $ 80,902 $ 67,820(1) $ 56,539
-------------------------------------------
Net return on sales 6.5% 6.3% 5.9%
Return on average shareholders' equity 14.0% 13.1% 12.0%
FINANCIAL POSITION (AT YEAR END)
Current assets $ 527,615 $ 533,933 $ 489,091
Current liabilities $ 282,921 $ 280,344 $ 205,465
Working capital $ 244,694 $ 253,649 $ 283,626
Current ratio 1.9 to 1 1.9 to 1 2.4 to 1
Property, plant and equipment - net $ 338,181 $ 275,525 $ 296,004
Long-term debt $ 327,812 $ 319,519 $ 393,502
Shareholders' equity $ 600,574 $ 553,043 $ 480,832
Total assets $ 1,259,382 $ 1,208,212 $ 1,133,182
COMMON STOCK DATA
Cash dividends declared $ 44,238 $ 43,406 $ 42,220
Percent of net earnings 55% 64% 75%
Per share(2)
Continuing operations $ 2.02 $ .05 $ 1.16
Net earnings $ 2.02 $ 1.76(1) $ 1.50
Cash dividends declared $ 1.12 $ 1.12 $ 1.12
Shareholders' equity $ 14.99 $ 14.10 $ 12.74
Market price range 37 5/8-31 1/4 35 5/8-29 1/8 36-28 1/2
OTHER DATA
Capital expenditures $ 101,760 $ 66,906 $ 38,555
Depreciation $ 44,880 $ 46,558 $ 46,126
Employees 8,700 7,400 8,000
Average shares outstanding(2) 39,956 38,608 37,674
===================================================================================================================
Includes the results of Catamount and E. K. Campbell from January 2, 1995.
Prior years reflect Vitramon as a discontinued operation (sold July, 1994).
Includes results of American Electric from January 2, 1992 (date acquired).
(1) Includes a pretax gain from the sale of Vitramon Inc. of $99.1, a pretax
charge of $79.0 for restructuring, and a pretax operating write-down of
$10.6 for previously vacated facilities.
(2) Amounts have been restated to reflect a two-for-one stock split effective
March 8, 1996.
EX13-31
32
==================================================================================================================================
1992 1991 1990 1989 1988 1987 1986 1985
- ----------------------------------------------------------------------------------------------------------------------------------
$ 939,548 $ 471,558 $ 506,660 $ 470,481 $ 446,899 $ 380,773 $ 347,400 $ 318,000
- ----------------------------------------------------------------------------------------------------------------------------------
605,517 274,916 286,341 257,751 233,194 187,358 169,290 158,921
201,818 118,028 124,553 120,441 118,257 110,806 99,795 90,591
17,368 12,499 16,613 16,764 15,929 17,082 16,589 17,574
13,498 4,154 4,106 3,075 2,627 283 273 269
15,000 - 9,000 - - 4,995 - -
- ----------------------------------------------------------------------------------------------------------------------------------
853,201 409,597 440,613 398,031 370,007 320,524 285,947 267,355
- ----------------------------------------------------------------------------------------------------------------------------------
86,347 61,961 66,047 72,450 76,892 60,249 61,453 50,645
(33,364) (6,496) (9,925) (1,590) (889) 5,870 1,869 2,336
- ----------------------------------------------------------------------------------------------------------------------------------
52,983 55,465 56,122 70,860 76,003 66,119 63,322 52,981
12 403 14,953 19,312 22,295 24,267 23,229 25,322 19,581
- ----------------------------------------------------------------------------------------------------------------------------------
40,580 40,512 36,810 48,565 51,736 42,890 38,000 33,400
4.3% 8.6% 7.3% 10.3% 11.6% 11.3% 10.9% 10.5%
10,343 7,938 11,590 5,170 6,914 5,610 2,215 862
- - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
50,923 48,450 48,400 53,735 58,650 48,500 40,215 34,262
- - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
$ 50,923 $ 48,450 $ 48,400 $ 53,735 $ 58,650 $ 48,500 $ 40,215 $ 34,262
- ----------------------------------------------------------------------------------------------------------------------------------
5.4% 10.3% 9.6% 11.4% 13.1% 12.7% 11.6% 10.8%
12.3% 13.6% 14.1% 16.5% 19.4% 17.8% 16.3% 15.0%
$ 463,463 $ 334,889 $ 337,136 $ 331,636 $ 294,675 $ 259,808 $ 240,843 $ 209,659
$ 198,659 $ 152,426 $ 167,103 $ 158,895 $ 124,335 $ 88,582 $ 80,721 $ 65,626
$ 264,804 $ 182,463 $ 170,033 $ 172,741 $ 170,340 $ 171,226 $ 160,122 $ 144,033
2.3 to l 2.2 to l 2.0 to l 2.1 to l 2.4 to l 2.9 to l 3.0 to l 3.2 to l
$ 296,138 $ 213,400 $ 206,283 $ 188,747 $ 165,630 $ 141,936 $ 114,358 $ 100,905
$ 420,345 $ 68,270 $ 48,763 $ 57,579 $ 40,590 $ 19,441 $ 16,281 $ 13,625
$ 463,062 $ 363,394 $ 350,590 $ 335,534 $ 314,819 $ 288,577 $ 257,627 $ 234,969
$ 1,117,063 $ 599,672 $ 585,527 $ 564,309 $ 492,942 $ 410,087 $ 363,453 $ 319,827
$ 41,948 $ 37,708 $ 35,601 $ 33,330 $ 30,536 $ 26,739 $ 23,073 $ 20,66
82% 78% 74% 62% 52% 55% 57% 60%
$ 1.09 $ 1.19 $ 1.08 $ 1.43 $ 1.53 $ 1.27 $ 1.14 $ 1.00
$ 1.36 $ 1.42 $ 1.42 $ 1.58 $ 1.73 $ 1.44 $ 1.20 $ 1.03
$ 1.12 $ 1.11 $ 1.05 $ .98 $ .90 $ .82 $ .74 $ .67
$ 12.34 $ 10.64 $ 10.31 $ 9.86 $ 9.29 $ 8.54 $ 7.67 $ 7.04
34 1/2-27 3/8 30 1/2-22 1/2 30 3/4-20 1/8 27 7/8-23 30 3/8-22 3/4 33 7/8-20 3/4 24 7/8-18 1/2 21 5/8-16 3/4
$ 47,434 $ 40,292 $ 47,874 $ 44,901 $ 53,899 $ 43,071 $ 27,832 $ 32,656
$ 41,233 $ 30,993 $ 30,782 $ 25,558 $ 24,156 $ 21,561 $ 16,764 $ 15,138
7,600 4,700 4,900 5,000 4,700 4,200 4,100 3,900
37,434 34,106 34,060 33,996 33,906 33,730 33,494 33,378
===================================================================================================================================
EX13-32