Exhibit 99.1
General Cable Corporation Reports Fourth Quarter Results
HIGHLAND HEIGHTS, Ky.--(BUSINESS WIRE)--Jan. 28, 2004--General
Cable Corporation (NYSE:BGC) reported a net loss for the fourth
quarter ended December 31, 2003 of $(10.6) million which was $(0.30)
on a diluted per share basis. These results were down from a net loss
of $(9.2) million or $(0.28) per diluted share in the fourth quarter
of 2002. Included in the results for the 2003 fourth quarter were
pre-tax charges of $7.6 million associated with the previously
announced rationalization of certain of its industrial cable
manufacturing facilities and $6.0 million of pre-tax charges and a
$4.4 million tax charge, both of which were related to the refinancing
of its bank debt. Those transactions reduced reported earnings per
share by $0.38 in the fourth quarter.
Net sales for the fourth quarter 2003 of $405.3 million increased
8.4% from metal-adjusted net sales of $373.8 million in the fourth
quarter of 2002, helped in part by a strengthening Euro.
Management Comments
"Our underlying results for the fourth quarter exceeded our
earlier earnings expectations. The year-over-year growth reported in
our sales confirms my belief that we are experiencing a firming in
most of our end markets. We saw favorable year-over-year sales growth
in some key areas, including telephone exchange cable sales to our
RBOC customers for the second quarter in a row and bare transmission
wire sales to our power utility customers despite delays with the
Energy bill. I am also encouraged by the growth in sales of cables
utilized in industrial construction, which was up year-over-year for
the first time in 10 quarters," said Gregory B. Kenny, President and
Chief Executive Officer of General Cable.
"During the fourth quarter we also successfully refinanced our
bank debt and implemented a plan to streamline our industrial cable
manufacturing facilities. The refinancing has allowed us to reduce
outstanding debt, substantially extend our debt maturities, increase
our liquidity and improve our interest coverage and debt to capital
ratios," added Kenny. "In light of the extraordinary decline in demand
for wire and cable products utilized in the industrial market in North
America, our plan to streamline our industrial cable manufacturing
facilities is an important step towards ensuring that we maintain our
cost competitiveness in this market. Both of these achievements have
created significant new growth and profit enhancement opportunities
for General Cable in 2004 and beyond."
Fourth Quarter Results
Net sales for the fourth quarter of 2004 were $405.3 million, an
increase of 8.4% versus metal-adjusted net sales in the 2002 fourth
quarter. The average price per pound of copper and aluminum increased
$0.22 and $0.07, respectively, from the fourth quarter 2002 to the
fourth quarter 2003. The 2002 net sales have been increased in this
comparison to put them on a consistent metal-adjusted basis with 2003
net sales. Overall net sales for the quarter compared to the same
period in the prior year were positively affected by about 6.4% as a
result of a favorable change in foreign currency exchange rates for
the Company's international operations.
Net sales in the Energy segment increased 12.8% in the fourth
quarter of 2003 versus metal-adjusted net sales in the fourth quarter
of 2002. North American sales were up 15.3% year-over-year driven
largely by strong demand from power utilities for bare transmission
wire. International sales were up 8.1%, driven by the impact of
favorable foreign currency exchange rates.
Net sales in the Industrial & Specialty segment were up 12.3%
versus metal-adjusted net sales in the fourth quarter of 2002. This
increase was driven by a 4.8% increase in North America where net
sales of ignition wire sold to the automotive after market grew 6.8%
and industrial cables utilized in maintenance, repair and plant
operations (MRO) grew 2.6% compared to the fourth quarter of 2002.
Significantly, net sales of cables utilized primarily in industrial
construction increased year-over-year for the first time since the
first half of 2001, up 2.0% versus the fourth quarter 2002.
International sales were up 22.7% versus 2002 due to the favorable
impact of foreign currency exchange rates and the roll out of a new
family of cables for contractors.
Net sales in the Communications segment decreased 1.2% in the
fourth quarter of 2003 versus metal-adjusted net sales in the same
quarter of 2002. Net sales of telephone exchange cables increased 3.6%
versus 2002, which is the second quarter in a row sales were up
year-over-year. The Company also experienced a year-over-year increase
in sales of electronic products, which grew 3.0% versus the fourth
quarter 2002 behind sustained penetration into targeted niche markets.
These increases were more than offset by an 11.7% decrease in sales of
LAN cables, as IT infrastructure spending in North America remains
constrained.
Selling, general and administrative expenses were $34.1 million in
the fourth quarter of 2003, down from $34.7 million in the fourth
quarter of 2002. The decrease in SG&A was due to $4.0 million of
charges related to severance included in the fourth quarter of 2002
partially offset by changes in foreign currency exchange rates and
increased variable selling expenses due to higher sales volumes.
The fourth quarter 2003 operating income of $4.9 million is up
from $1.5 million in the fourth quarter of 2002. The results in 2003
include $7.6 million of charges related to the rationalization of
certain industrial cable manufacturing facilities. Operating income
for the fourth quarter of 2003 benefited from the increased sales
volume and lower manufacturing costs as a result of the Company's Lean
initiatives as well as changes in foreign currency exchange rates. The
results in 2002 include $4.7 million of severance and plant closure
costs.
During the fourth quarter of 2003 the Company realized a $1.5
million gain resulting from favorable foreign currency translation
adjustments on an inter-company loan. This gain increased reported
earnings per share by $0.03 in the quarter.
Net interest expense was $16.3 million for the fourth quarter of
2003, up $3.7 million from the same period in 2002. Included in
interest expense for the fourth quarter is a $6.0 million charge
associated with the refinancing.
Included in the Company's tax provision for the fourth quarter of
2003 is a $4.4 million charge resulting from the Company's
refinancing. In conjunction with the refinancing certain of the
Company's foreign subsidiaries guaranteed the Company's senior notes,
resulting in a deemed dividend that increased the tax provision but
had no impact on cash taxes. The Company's effective tax rate for the
quarter, excluding the $4.4 million tax charge, was approximately
43.4%.
Full Year Results
The net loss for the year ended December 31, 2003 was $(5.4)
million, or $(0.16) per diluted share. These results include $15.3
million of pre-tax charges relating to the rationalization of certain
industrial cable manufacturing facilities, charges resulting from the
refinancing and severance costs related to cost cutting efforts in
Europe. Full year 2003 net income was also negatively impacted by the
$4.4 million increase in the tax provision in the fourth quarter as a
result of the refinancing. Those transactions reduced reported
earnings per share by $0.42 for the year.
Net sales for the year ended December 31, 2003 were $1,538.4
million, up 2.9% versus metal-adjusted net sales for 2002.
Contributing to this increase was a 6.3% increase in metal-adjusted
net sales of Energy cables, where North America sales increased 1.2%
and international sales were up 19.1% due to foreign currency exchange
rate changes. Metal-adjusted net sales in the Industrial & Specialty
segment increased 4.3%, with North American sales decreasing 4.9% due
to weakness in cables utilized in industrial construction and
international sales increasing 18.6% due to both the change in foreign
currency exchange rates and volume growth. Metal-adjusted net sales
fell 2.6% in the Communications segment due to a reduction in sales of
both telephone exchange and data communication cables. The Company's
overall net sales for 2003 were positively affected by about 5.6% due
to foreign currency exchange rate changes.
Selling, general and administrative expenses were $127.7 million
in 2003, down from $150.9 million in 2002. SG&A for 2003 included an
increase of $6.4 million as a result of changes in foreign currency
exchange rates. SG&A in 2002 included $27.8 million of charges related
to severance and plant closing costs.
Operating income was $45.7 million in 2003, up from $15.7 million
in 2002. The 2003 results included $9.3 million of pre-tax charges
related to the rationalization of manufacturing facilities in North
America and severance costs in Europe. Charges of $33.4 million
related to plant closures and severance were included in operating
income in 2002.
Management Comments
"I am confident we have taken the steps required to build on the
positive momentum we began to see in our markets in late 2003. Our
balance sheet is in much better condition now compared to this time
last year, our end markets continue to show some signs of recovery,
and the global awareness of the urgent need to invest in the electric
power infrastructure continues to grow," said Kenny. "Additionally,
our operations group continues to build a culture of Lean thinking.
During 2004 we will further expand our LeanSigma program, adding to
the 40 Blackbelts and 120 Greenbelts trained in 2003. We also enter
2004 with all North American manufacturing facilities upgraded to the
new ISO 9001:2000 quality standards. I believe that General Cable is
well positioned for a successful year in 2004 and to take full
advantage of any sustained rebound in our primary end-markets.
Finally, and most importantly, our General Cable team of employees
remain focused on cost, quality and customer service."
"We estimate that net sales for the first quarter of 2004,
excluding the impact of foreign currency exchange rates and adjusting
for the pass through of higher metal prices, will be flat to up
slightly versus net sales reported in the first quarter of 2003. After
giving effect to the impact of our refinancing in the fourth quarter
of 2003, earnings per diluted share will be in the range of $0.01 to
$0.03, excluding charges related to the rationalization of our
industrial cable plants. These results should compare favorably to the
breakeven results reported in the first quarter of 2003," added Kenny.
"Our continuing focus on cost control should approximately offset the
pricing pressure stemming from excess manufacturing capacity in many
of our markets. However, over the last four months we have seen a 38%
run-up in the price of copper, the primary raw material utilized in
many of our products. We continue to keep a watchful eye on copper
pricing and are aggressively pursuing opportunities to increase our
selling prices in those instances where we do not automatically adjust
selling prices for changes in copper prices. Any delay or inability
experienced in passing on higher copper prices to our customers will
have a negative impact on our reported earnings."
General Cable (NYSE:BGC), headquartered in Highland Heights,
Kentucky, is a leader in the development, design, manufacture,
marketing and distribution of copper, aluminum and fiber optic wire
and cable products for the energy, industrial, specialty and
communications markets. The Company offers competitive strengths in
such areas as breadth of product line, brand recognition, distribution
and logistics, sales and service and operating efficiency.
Energy cables include low-, medium- and high-voltage power
distribution and power transmission products. The Industrial and
Specialty segment is comprised of application-specific cables for uses
such as electrical power generation (traditional fuels, alternative
and renewable sources, and distributed generation), the oil, gas and
petrochemical industries, mining, industrial automation, marine,
military and aerospace applications, power applications in the
telecommunications industry, and other key industrial segments.
Communications wire and cable products transmit low-voltage signals
for voice, data, video and control applications. Visit our website at
www.GeneralCable.com.
Certain statements in this press release, including without
limitation, statements regarding future financial results and
performance, plans and objectives, capital expenditures and the
Company's or management's beliefs, expectations or opinions, are
forward-looking statements. Actual results may differ materially from
those statements as a result of factors, risks and uncertainties over
which the Company has no control. Such factors include economic and
political consequences resulting from the September 2001 terrorist
attack and the war with Iraq, domestic and local country price
competition, particularly in certain segments of the power cable
market and other competitive pressures; general economic conditions,
particularly in construction; changes in customer or distributor
purchasing patterns in our business segments; the Company's ability to
increase manufacturing capacity and productivity; the financial impact
of any future plant closures; the Company's ability to successfully
complete and integrate acquisitions and divestitures; the Company's
ability to negotiate extensions of labor agreements on acceptable
terms; the Company's ability to service debt requirements and maintain
adequate domestic and international credit facilities and credit
lines; the Company's ability to pay dividends on its preferred stock;
the impact of unexpected future judgments or settlements of claims and
litigation; the Company's ability to achieve target returns on
investments in its defined benefit plans; the Company's ability to
avoid limitations on utilization of net losses for income tax
purposes; the cost of raw materials, including copper; the impact of
foreign currency fluctuations; the impact of technological changes;
the Company's ability to achieve productivity improvements; and other
factors which are discussed in the Company's Report on Form 10-K filed
with the Securities and Exchange Commission on March 28, 2003, as well
as periodic reports filed with the Commission.
TABLES TO FOLLOW
General Cable Corporation and Subsidiaries
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
------------------ -------------------
Three Months Ended Twelve Months Ended
December 31 December 31
--------------------------------------
2003 2002 2003 2002
--------- -------- --------- ---------
Net sales $405.3 $351.4 $1,538.4 $1,453.9
Cost of sales 366.3 315.2 1,365.0 1,287.3
--------- -------- --------- ---------
Gross profit 39.0 36.2 173.4 166.6
Selling, general and
administrative expenses 34.1 34.7 127.7 150.9
--------- -------- --------- ---------
Operating income 4.9 1.5 45.7 15.7
Other income 1.5 - 1.5 -
Interest income (expense):
Interest expense (10.4) (11.6) (43.5) (43.5)
Interest income 0.1 0.1 0.4 0.9
Other financial costs (6.0) (1.1) (6.0) (1.1)
--------- -------- --------- ---------
(16.3) (12.6) (49.1) (43.7)
Loss before income taxes (9.9) (11.1) (1.9) (28.0)
Income tax (provision) benefit (0.1) 3.9 (2.9) 9.9
--------- -------- --------- ---------
Loss from continuing operations (10.0) (7.2) (4.8) (18.1)
Discontinued Operations
- --------------------------------
Loss on disposal of discontinued
operations (net of tax) - (2.0) - (5.9)
--------- -------- --------- ---------
Net loss (10.0) (9.2) (4.8) (24.0)
Less: preferred stock dividends (0.6) - (0.6) -
--------- -------- --------- ---------
Net loss applicable to common
shareholders $(10.6) $(9.2) $(5.4) $(24.0)
========= ======== ========= =========
EPS of Continuing Operations
- --------------------------------
Loss per common share $(0.30) $(0.22) $(0.16) $(0.55)
========= ======== ========= =========
Weighted average common shares 35.0 33.1 33.6 33.0
========= ======== ========= =========
Loss per common share-
assuming dilution $(0.30) $(0.22) $(0.16) $(0.55)
========= ======== ========= =========
Weighted average common shares-
assuming dilution 35.0 33.1 33.6 33.0
========= ======== ========= =========
EPS Including Discontinued
Operations
- --------------------------------
Loss per common share $(0.30) $(0.28) $(0.16) $(0.73)
========= ======== ========= =========
Loss per common share-
assuming dilution $(0.30) $(0.28) $(0.16) $(0.73)
========= ======== ========= =========
General Cable Corporation and Subsidiaries
Consolidated Statements of Operations (continued)
Segment Information
(in millions, except per share data)
(unaudited)
------------------ ------------------
Three Months Ended Twelve Months
December 31 Ended December 31
-------------------------------------
2003 2002 2003 2002
--------- -------- -------- ---------
Revenues (as reported)
- --------------------------------
Energy Segment $146.7 $121.5 $560.2 $510.5
Industrial & Specialty Segment 147.3 123.5 542.4 506.6
Communications Segment 111.3 106.4 435.8 436.8
--------- -------- -------- ---------
Total 405.3 351.4 1,538.4 1,453.9
========= ======== ======== =========
Revenues (metal adjusted)
- --------------------------------
Energy Segment $146.7 $130.0 $560.2 $526.8
Industrial & Specialty Segment 147.3 131.2 542.4 520.0
Communications Segment 111.3 112.6 435.8 447.6
--------- -------- -------- ---------
Total 405.3 373.8 1,538.4 1,494.4
========= ======== ======== =========
Operating Profit (Loss)
- --------------------------------
Energy Segment $8.6 $8.8 $38.0 $37.5
Industrial & Specialty Segment 2.1 2.4 9.9 9.1
Communications Segment 0.7 (5.0) 6.0 2.5
--------- -------- -------- ---------
Subtotal 11.4 6.2 53.9 49.1
Corporate (6.5) (4.7) (8.2) (33.4)
--------- -------- -------- ---------
Total 4.9 1.5 45.7 15.7
========= ======== ======== =========
Return on Metal Adjusted Sales
- ---------------------------------
Energy Segment 5.9% 6.8% 6.8% 7.1%
Industrial & Specialty Segment 1.4% 1.8% 1.8% 1.8%
Communications Segment 0.6% -4.4% 1.4% 0.6%
--------- -------- -------- ---------
Subtotal 2.8% 1.7% 3.5% 3.3%
Corporate - - - -
--------- -------- -------- ---------
Total 1.2% 0.4% 3.0% 1.1%
========= ======== ======== =========
Capital Expenditures
- --------------------------------
Energy Segment $2.8 $2.9 $6.6 $9.9
Industrial & Specialty Segment 3.2 3.2 8.7 13.4
Communications Segment 1.4 2.5 3.9 8.1
--------- -------- -------- ---------
Total 7.4 8.6 19.2 31.4
========= ======== ======== =========
Depreciation
- --------------------------------
Energy Segment $2.8 $0.9 $5.7 $3.8
Industrial & Specialty Segment 2.9 2.2 9.6 8.5
Communications Segment 3.6 3.7 14.5 15.8
--------- -------- -------- ---------
Total 9.3 6.8 29.8 28.1
========= ======== ======== =========
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in millions, except share data)
December 31, December 31,
ASSETS 2003 2002
- ------ ------------ ------------
(unaudited)
Current Assets:
Cash $25.1 $29.1
Receivables, net of allowances of
$15.6 million at December 31, 2003 and
$11.6 million at December 31, 2002 268.9 105.9
Retained interest in accounts receivable - 84.8
Inventories 256.7 258.3
Deferred income taxes 13.5 12.2
Prepaid expenses and other 24.4 42.6
------------ ------------
Total current assets 588.6 532.9
Property, plant and equipment, net 333.3 323.3
Deferred income taxes 76.5 68.3
Other non-current assets 50.6 48.8
------------ ------------
Total assets $1,049.0 $973.3
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable $250.6 $242.1
Accrued liabilities 98.7 99.2
Current portion of long-term debt 2.5 40.8
------------ ------------
Total current liabilities 351.8 382.1
Long-term debt 337.9 411.1
Other liabilities 118.8 119.2
------------ ------------
Total liabilities 808.5 912.4
------------ ------------
Shareholders' Equity:
Redeemable Convertible Preferred Stock,
2,070,000 shares at redemption value
(liquidation preference of $50.00 per
share) 103.5 -
Common stock, $0.01 par value:
Issued and outstanding shares:
December 31, 2003 - 38,908,512
(net of 4,828,225 treasury shares)
December 31, 2002 - 33,135,002
(net of 4,745,425 treasury shares) 0.4 0.4
Additional paid-in capital 140.8 100.0
Treasury stock (50.4) (50.0)
Retained earnings 54.5 59.9
Accumulated other comprehensive loss (5.1) (44.6)
Other shareholders' equity (3.2) (4.8)
------------ ------------
Total shareholders' equity 240.5 60.9
------------ ------------
Total liabilities and shareholders'
equity $1,049.0 $973.3
============ ============
CONTACT: General Cable Corporation
Paul M. Montgomery, 859-572-8684