Exhibit 99.1
General Cable Corporation Reports Fourth Quarter Results
and Declares Dividend on Preferred Stock
HIGHLAND HEIGHTS, Ky.--(BUSINESS WIRE)--Feb. 1, 2005--General
Cable Corporation (NYSE:BGC) reported net income after preferred stock
dividends for the fourth quarter ended December 31, 2004 of $3.3
million, which was $0.08 on a diluted per share basis. These results
were up from a net loss of $(10.6) million in the fourth quarter of
2003. Included in the results for the 2004 fourth quarter were pre-tax
charges of $0.7 million associated with the previously announced
rationalization of certain of the Company's manufacturing facilities
and a $4.3 million charge resulting from the unwinding of the
Company's former fiber optics joint venture. Also during the quarter,
the Company recognized a $0.4 million after-tax gain related to
discontinued operations and a $1.6 million reduction in its tax
provision primarily as a result of the elimination of prior year
income tax exposures. These net charges reduced reported earnings per
share by $0.04 in the fourth quarter.
In accordance with the terms of the Company's 5.75% Series A
Convertible Redeemable Preferred Stock, the Board of Directors has
declared a preferred stock dividend of approximately $0.72 per share
for the three-month period ending February 24, 2005. The dividend is
payable on February 24, 2005 to preferred stockholders of record as of
January 31, 2005.
Highlights
-- Net sales of $485 million were up 5% versus metal-adjusted
sales in the fourth quarter of 2003.
-- Completed rationalization of industrial cables manufacturing
facilities on time and below budget.
-- Additional price increases are being implemented in order to
offset the strong inflationary pressure on non-metal raw
materials used in cable manufacturing driven principally by
rapidly rising energy prices.
-- Earnings per share forecast for the first quarter of 2005 is
between $0.12 and $0.16 per share on approximately $525 to
$535 million in revenues.
General Cable will discuss fourth quarter results on a conference
call and webcast at 8:30 a.m. ET tomorrow, February 2. Call
information is available at www.generalcable.com.
"Despite higher raw material costs, including a ten cent per pound
increase in the price of copper over the third quarter average and
double digit increases in prices for certain insulating materials, our
earnings per share was at the higher end of our earlier guidance as we
enjoyed stronger than anticipated sales growth," commented Gregory B.
Kenny, President and Chief Executive Officer of General Cable. "We
benefited in the quarter from increased spending by electric utilities
for distribution infrastructure."
Fourth Quarter Results
Net sales for the fourth quarter of 2004 were $485.3 million, an
increase of 5% versus metal-adjusted net sales in the 2003 fourth
quarter. The average price per pound of copper and aluminum increased
$0.48 and $0.16, respectively, from the fourth quarter of 2003 to the
fourth quarter of 2004. The 2003 net sales have been increased in this
comparison to put them on a consistent metal-adjusted basis with 2004
net sales. Overall net sales for the quarter were positively affected
by about 3% as a result of favorable year-over-year changes in foreign
currency exchange rates for the Company's international operations.
Contributing to the 5% increase in metal-adjusted net sales was a
14% increase in Energy cables, where North American sales increased
due to strong demand from contract customers for primary distribution
cables. International sales were also up due to demand for
distribution cables and favorable foreign currency exchange rates.
Industrial & Specialty and Communications cables revenue were both up
1% due primarily to the favorable impact of foreign currency exchange
rates.
Selling, general and administrative expenses were $42.3 million in
the fourth quarter of 2004, up from $34.1 million in the fourth
quarter of 2003. The increase was due in part to changes in foreign
currency exchange rates, $2.8 million of costs related to the
Company's Sarbanes-Oxley compliance activities, and a change in the
reporting of the results of the Company's former fiber optics joint
venture. Additionally, SG&A in the fourth quarter of 2004 included
charges of $0.4 million related to the rationalization of certain of
the Company's manufacturing facilities and a $4.3 million charge
resulting from the unwinding of its former fiber optics joint venture.
During the quarter, the Company exchanged a note receivable from its
former joint venture partner for the partner's ownership interest in
the joint venture. As a result of these items, reported SG&A was 8.7%
of net sales in the fourth quarter of 2004, up from the 7.4% of
metal-adjusted net sales reported in the fourth quarter of 2003.
The fourth quarter 2004 operating income of $13.0 million was up
from $4.9 million in the fourth quarter of 2003. The results in 2004
include charges of $0.7 million related to the rationalization of
certain manufacturing facilities and a $4.3 million charge associated
with its former fiber optics joint venture. The 2003 results included
a $7.6 million charge related to the rationalization of certain
industrial cable manufacturing facilities. Operating income for the
fourth quarter of 2004 benefited from higher sales, lower
manufacturing costs as a result of the Company's Lean initiatives, as
well as changes in foreign currency exchange rates.
Net interest expense was $9.0 million for the fourth quarter of
2004, down $1.3 million from the same period in 2003 as a result of
the Company's refinancing in the fourth quarter of 2003. During the
fourth quarter of 2003, the Company also incurred about $6.0 million
of costs in conjunction with the refinancing of its former credit
facility. During the fourth quarter of 2004, the Company accrued
approximately $1.5 million in dividends on its preferred stock.
For the quarter, the Company recognized a credit tax provision
primarily as a result of the elimination of certain prior year income
tax exposures.
Full Year Results
Net income applicable to common shareholders for the year ended
December 31, 2004, was $9.5 million, or $0.24 per diluted share. These
results include pre-tax charges of $7.1 million relating to the
rationalization of certain manufacturing facilities, $1.5 million for
remediation costs, $4.3 million related to the unwinding of the former
fiber optics joint venture, a $0.9 million pre-tax loss resulting from
unfavorable foreign currency transactions, a $0.4 after-tax gain from
discontinued operations, and a $1.6 million reduction in its tax
provision. These net costs reduced reported earnings per share by
$0.19 for the full year.
Net sales for the year ended December 31, 2004, were $1,970.7
million, up 12% versus metal-adjusted net sales for the same period in
2003. Contributing to this increase was a 14% increase in Energy
cables, where North American sales increased due to demand from power
utilities for distribution cables and international sales which were
up largely due to demand for distribution cables, increased wind farm
projects and foreign currency exchange rate changes. Industrial &
Specialty cables were up 15%, with North America up due to a broad
based improvement in demand as the economy began to recover in 2004.
The international business experienced significant revenue growth
driven by strength in zero halogen cable sales in Europe and favorable
foreign currency exchange rate changes. Communications cables
increased 7% year-over-year due to improving conditions in North
America where the Company has benefited from the ongoing consolidation
among its competitors.
Selling, general and administrative expenses were $158.2 million
for the year ended December 31, 2004, up from $127.7 million for the
same period in 2003. The increase in SG&A was due in part to increased
variable selling expenses related to higher sales volumes, changes in
foreign currency exchange rates, $4.7 million for the Company's
Sarbanes-Oxley compliance activities and a change in the reporting of
the results of the Company's fiber optics joint venture. Additionally,
SG&A in 2004 includes $1.1 million of charges related to the
rationalization of certain of the Company's manufacturing facilities,
$1.5 million of remediation costs and a $4.3 million charge associated
with its former fiber optics joint venture. As a result of these
items, reported SG&A was 8.0% of net sales in 2004, up from 7.3% of
metal-adjusted net sales in 2003.
Management Comments
"As has been the case throughout 2004, we continue to face
inflationary pressure on most raw material costs. In addition to the
well documented increase in the cost of copper and aluminum, we have
seen increases between 5% and 65% in materials such as wooden reels,
steel, and insulating, filling and jacketing compounds," commented
Kenny. "As I communicated last quarter, we will continue to implement
price increases for all products sold into the spot market in the U.S.
and Canada. We have also made significant progress in revising
contractual language with customers that allows for material cost
recovery on materials other than metals."
"For the first quarter of 2005, we are estimating that revenue
should be in the $525 to $535 million range, up approximately 4% from
metal-adjusted revenues in the first quarter of 2004," said Kenny.
"With the expectation that copper will average between $1.40 and $1.45
per pound, diluted earnings per share should be in the $0.12 to $0.16
range."
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. 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 and aluminum;
the Company's ability to increase its selling prices during periods of
increasing raw material costs; the impact of foreign currency
fluctuations; the impact of technological changes; and other factors
which are discussed in the Company's Report on Form 10-K filed with
the Securities and Exchange Commission on March 12, 2004, 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)
------------------- -------------------
Fiscal Three Fiscal Twelve
Months Ended Months Ended
December 31 December 31
---------------------------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales $485.3 $405.3 $1,970.7 $1,538.4
Cost of sales 430.0 366.3 1,756.0 1,365.0
--------- --------- --------- ---------
Gross profit 55.3 39.0 214.7 173.4
Selling, general and
administrative expenses 42.3 34.1 158.2 127.7
--------- --------- --------- ---------
Operating income 13.0 4.9 56.5 45.7
Other income (expense) - 1.5 (0.9) 1.5
Interest expense:
Net interest expense (9.0) (10.3) (36.3) (43.1)
Other financial costs 0.0 (6.0) 0.0 (6.0)
--------- --------- --------- ---------
(9.0) (16.3) (36.3) (49.1)
--------- --------- --------- ---------
Earnings (loss) before income
taxes 4.0 (9.9) 19.3 (1.9)
Income tax (provision) benefit 0.4 (0.1) (4.2) (2.9)
--------- --------- --------- ---------
Income (loss) from continuing
operations 4.4 (10.0) 15.1 (4.8)
Discontinued Operations
- ------------------------------
Gain on disposal of
discontinued operations (net
of tax) 0.4 - 0.4 -
--------- --------- --------- ---------
Net income (loss) 4.8 (10.0) 15.5 (4.8)
Less: preferred stock
dividends (1.5) (0.6) (6.0) (0.6)
--------- --------- --------- ---------
Net income (loss) applicable
to common shareholders $3.3 $(10.6) $9.5 $(5.4)
========= ========= ========= =========
EPS of Continuing Operations
- ------------------------------
Earnings (loss) per common
share $ 0.07 $(0.30) $ 0.23 $ (0.16)
========= ========= ========= =========
Weighted average common shares 39.3 35.0 39.2 33.6
========= ========= ========= =========
Earnings (loss) per common
share- assuming dilution $ 0.07 $(0.30) $ 0.23 $ (0.16)
========= ========= ========= =========
Weighted average common
shares- assuming dilution 40.3 35.0 39.9 33.6
========= ========= ========= =========
EPS Including Discontinued
Operations
- ------------------------------
Earnings (loss) per common
share $ 0.08 $(0.30) $ 0.24 $ (0.16)
========= ========= ========= =========
Earnings (loss) per common
share- assuming dilution $ 0.08 $(0.30) $ 0.24 $ (0.16)
========= ========= ========= =========
General Cable Corporation and Subsidiaries
Consolidated Statements of Operations
Segment Information
(in millions)
(unaudited)
------------------- -------------------
Fiscal Three Fiscal Twelve
Months Ended Months Ended
December 31 December 31
---------------------------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Revenues (as reported)
- ------------------------------
Energy Segment $185.3 $146.7 $ 705.7 $ 560.2
Industrial & Specialty Segment 172.7 147.3 734.3 542.4
Communications Segment 127.3 111.3 530.7 435.8
--------- --------- --------- ---------
Total $485.3 $405.3 $1,970.7 $1,538.4
========= ========= ========= =========
Revenues (metal adjusted)
- ------------------------------
Energy Segment $185.3 $162.4 $ 705.7 $ 621.2
Industrial & Specialty Segment 172.7 171.9 734.3 637.6
Communications Segment 127.3 126.2 530.7 495.3
--------- --------- --------- ---------
Total $485.3 $460.5 $1,970.7 $1,754.1
========= ========= ========= =========
Metal Pounds Sold
- ------------------------------
Energy Segment 67.2 65.8 275.6 257.9
Industrial & Specialty Segment 47.6 51.5 226.0 197.2
Communications Segment 33.2 31.4 143.4 123.5
--------- --------- --------- ---------
Total 148.0 148.7 645.0 578.6
========= ========= ========= =========
Operating Profit (Loss)
- ------------------------------
Energy Segment $ 11.7 $ 8.6 $ 39.9 $ 38.0
Industrial & Specialty Segment 4.9 2.1 23.1 9.9
Communications Segment 1.4 0.7 6.4 6.0
--------- --------- --------- ---------
Subtotal 18.0 11.4 69.4 53.9
Corporate (5.0) (6.5) (12.9) (8.2)
--------- --------- --------- ---------
Total $ 13.0 $ 4.9 $ 56.5 $ 45.7
========= ========= ========= =========
Return on Metal Adjusted Sales
- -------------------------------
Energy Segment 6.3% 5.3% 5.7% 6.1%
Industrial & Specialty Segment 2.8% 1.2% 3.1% 1.6%
Communications Segment 1.1% 0.6% 1.2% 1.2%
Total Company 2.7% 1.1% 2.9% 2.6%
Capital Expenditures
- ------------------------------
Energy Segment $ 4.3 $ 2.8 $ 13.9 $ 6.6
Industrial & Specialty Segment 5.7 3.2 15.5 8.7
Communications Segment 3.0 1.4 7.6 3.9
--------- --------- --------- ---------
Total $ 13.0 $ 7.4 $ 37.0 $ 19.2
========= ========= ========= =========
Depreciation & Amortization
- ------------------------------
Energy Segment $ 1.6 $ 3.0 $ 6.2 $ 6.9
Industrial & Specialty Segment 2.5 3.3 9.6 10.8
Communications Segment 4.1 3.9 16.9 15.7
--------- --------- --------- ---------
Subtotal 8.2 10.2 32.7 33.4
Corporate(1) - - 2.7 -
--------- --------- --------- ---------
Total $ 8.2 $ 10.2 $ 35.4 $ 33.4
========= ========= ========= =========
(1) Relates to the rationalization of certain Industrial plant
locations.
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in millions, except share data)
December 31, December 31,
ASSETS 2004 2003
- ------ ------------- -------------
Current Assets: (unaudited)
Cash $ 36.4 $ 25.1
Receivables, net of allowances of $15.5
million at December 31, 2004 and $15.6
million at December 31, 2003 350.9 268.9
Inventories 314.6 256.7
Deferred income taxes 23.0 13.5
Prepaid expenses and other 34.2 24.9
------------- -------------
Total current assets 759.1 589.1
Property, plant and equipment, net 360.7 339.5
Deferred income taxes 77.3 76.5
Other non-current assets 30.2 44.4
------------- -------------
Total assets $1,227.3 $1,049.5
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable $ 356.5 $ 250.6
Accrued liabilities 107.9 99.6
Current portion of long-term debt 1.1 2.3
------------- -------------
Total current liabilities 465.5 352.5
Long-term debt 373.8 338.1
Deferred income taxes 15.3 9.6
Other liabilities 93.7 109.2
------------- -------------
Total liabilities 948.3 809.4
------------- -------------
Shareholders' Equity:
Redeemable convertible preferred stock,
2,070,000 shares at redemption value
(liquidation preference of $50.00
per share) 103.5 103.5
Common stock, $0.01 par value,
issued and outstanding shares:
December 31, 2004 - 39,335,754 (net
of 4,885,823 treasury shares)
December 31, 2003 - 38,908,512 (net
of 4,828,225 treasury shares) 0.4 0.4
Additional paid-in capital 144.1 140.8
Treasury stock (51.0) (50.4)
Retained earnings 64.0 54.5
Accumulated other comprehensive income
(loss) 22.4 (5.5)
Other shareholders' equity (4.4) (3.2)
------------- -------------
Total shareholders' equity 279.0 240.1
------------- -------------
Total liabilities and shareholders'
equity $1,227.3 $1,049.5
============= =============
CONTACT: General Cable Corporation
Paul M. Montgomery, 859-572-8684