Exhibit 99.1
Thomas & Betts Corporation Reports
Second Quarter 2005 Results; Sales Up 13 Percent; E.P.S. $0.47
MEMPHIS, Tenn.--(BUSINESS WIRE)--July 25, 2005--Thomas & Betts
Corporation (NYSE: TNB) today reported second quarter 2005 net
earnings of $28.4 million, or $0.47 per basic and diluted share, up
42.2 percent from the $20.0 million in net earnings, or $0.34 per
basic and diluted share, reported in the second quarter 2004.
Sales in the quarter were $418.1 million, up $49.1 million, or
13.3 percent, from the prior-year period. Higher sales volume and
price realization to offset higher material costs contributed
significantly to the sales improvement. Favorable foreign currency
exchange rates accounted for approximately $8 million of the increase.
Earnings from operations were $46.4 million or 11.1 percent of sales
in the quarter just ended. In the second quarter 2004, earnings from
operations were $35.6 million or 9.7 percent of sales.
"Higher revenue, along with productivity improvements and strong
cash flow, combined to make this a very good quarter for Thomas &
Betts," said Dominic J. Pileggi, president and chief executive
officer. "Earnings from operations were 11 percent of sales in the
second quarter, a significant improvement over last year."
Pileggi continued, "Each of our business segments improved their
year-over-year performance despite the challenge of higher costs and
modest underlying growth in many of our markets. We are especially
pleased with the excellent performance of our Steel Structures
business, which benefited from continued investment in regional
transmission grids and the additional capacity we acquired earlier
this year."
The second quarter 2005 gross margin was 28.7 percent of sales,
compared to 29.1 percent in the prior-year period. Higher material
costs in the second quarter 2005 compared to the prior-year period
were offset through a combination of price increases and, to a lesser
extent, productivity improvements.
Selling, general and administrative (SG&A) expense was $73.6
million, or 17.6 percent of sales, compared to 19.4 percent of sales,
or $71.6 million, in the prior-year period. The improvement in SG&A as
a percent of sales reflects the company's continued focus on closely
managing expenses and the effect of higher sales.
The effective tax rate in the second quarter of 2005 was 26.3
percent and included a $0.9 million tax benefit resulting from the
favorable completion of a tax audit.
SEGMENT RESULTS
Second quarter 2005 sales in the company's Electrical segment were
up 10.0 percent to $342.1 million, compared to $311.0 million in the
second quarter last year. Price realization to offset higher material
costs and higher sales volume contributed significantly to the sales
growth, while favorable foreign currency exchange rates contributed
approximately $8 million. Second quarter 2005 Electrical segment
earnings were up 14.9 percent to $37.4 million, or 10.9 percent of
sales, compared to $32.5 million, or 10.5 percent of sales in the
prior-year period. Higher sales and increased productivity contributed
to the growth in segment earnings.
Second quarter sales in the Steel Structures segment were $45.6
million, a significant increase over sales of $30.0 million in the
same period last year. Segment earnings more than doubled to $7.2
million or 15.8 percent of sales. This compares to earnings of $2.6
million, or 8.6 percent of sales, in the second quarter 2004.
Investment in regional transmission projects by U.S. electrical
utilities continues to drive the segment's improved performance.
HVAC segment sales were $30.4 million in the second quarter 2005,
up 8.6 percent from the $28.0 million in sales reported a year ago.
Second quarter 2005 segment earnings were $2.2 million, double the
$1.1 million reported in the same period last year. Improved
productivity and lower expenses drove the earnings improvement.
YEAR-TO-DATE RESULTS
For the six months ended June 30, 2005, sales rose $88.3 million,
or 12.2 percent, to $810.3 million compared to $722.0 million in the
first half of 2004. Favorable foreign currency exchange rates
accounted for approximately $15 million of the sales increase.
Net earnings for the first six months of 2005 were $52.8 million,
or $0.89 per basic and $0.87 per diluted share. This compares to net
earnings of $35.6 million, or $0.61 per basic and $0.60 per diluted
share for the first six months of 2004.
Cash flow from operations improved significantly in the first half
of 2005, driven primarily by improved operating earnings and sound
inventory management. Thomas & Betts ended the second quarter 2005
with $369.8 million in cash and cash equivalents.
2005 DIRECTIONAL GUIDANCE
"Based on our strong second quarter results, we have revised our
2005 guidance and now believe that earnings per diluted share will be
between $1.77 and $1.82 for the full year 2005," said Pileggi.
CORPORATE OVERVIEW
Thomas & Betts Corporation (www.tnb.com) is a leading designer and
manufacturer of electrical connectors and components used in
industrial, commercial, communications and utility markets. The
company is also a leading producer of commercial heating units and
highly engineered steel structures used, among other things, for
utility transmission. Headquartered in Memphis, Tenn., the company has
manufacturing, distribution and office facilities worldwide and, in
2004, reported sales of $1.5 billion.
NOTE: The following financial tables support the information in
this news release:
Condensed Consolidated Statements of Operations
Segment Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Cash Flows
CONFERENCE CALL AND WEBCAST INFORMATION
Thomas & Betts will hold a conference call/webcast to discuss the
company's second quarter 2005 results on Tuesday, July 26, 2005 at
11:00 am EST (10:00 am CST). To access the call, please call
201-689-8037. The call can also be accessed via the Thomas & Betts
corporate website at www.tnb.com. The conference call will be recorded
and available for replay through 12:00 midnight EST on Tuesday, August
2, 2005. To access the replay, please call 201-612-7415 (account
number 9517, passcode 160976). The recorded webcast will be available
at www.tnb.com.
CAUTIONARY STATEMENT
This press release includes forward-looking statements that are
identified by terms such as "achieve," "expect," "should," "believe,"
and "will" and which discuss business strategies, economic outlook and
future performance. These statements are based on certain assumptions
regarding the company's operations, business, economic and political
environment, including, without limitation, customer demand,
government regulation, terrorist acts and acts of war. Actual results
may be materially different from any future results expressed or
implied by such forward-looking statements. Please see the "Business
Risks" section of the company's Form 10-K for the fiscal year ended
December 31, 2004, for further information related to these
uncertainties. The company undertakes no obligation to publicly
release any revision to any forward-looking statements contained in
this press release to reflect events or circumstances occurring after
the date of this release or to reflect the occurrence of unanticipated
events.
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Quarter Ended Year to Date
----------------- -----------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Net sales $418,090 $368,973 $810,276 $721,961
Cost of sales 298,072 261,719 579,212 515,008
-------- -------- -------- --------
Gross margin 120,018 107,254 231,064 206,953
Gross margin - % of net sales 28.7% 29.1% 28.5% 28.7%
Selling, general and
administrative 73,628 71,634 142,978 144,648
Selling, general and
administrative - % of net sales 17.6% 19.4% 17.6% 20.1%
-------- -------- -------- --------
Earnings from Operations 46,390 35,620 88,086 62,305
Earnings from operations - % of
net sales 11.1% 9.7% 10.9% 8.6%
Income from unconsolidated
companies 360 556 669 1,220
Interest expense, net (6,868) (7,484) (14,028) (15,098)
Other (expense) income, net (1,338) (957) (1,805) (1,092)
-------- -------- -------- --------
Earnings before income taxes 38,544 27,735 72,922 47,335
Income tax provision 10,151 7,766 20,121 11,754
-------- -------- -------- --------
Net earnings $ 28,393 $ 19,969 $ 52,801 $ 35,581
======== ======== ======== ========
Net earnings per share:
Basic earnings per share $ 0.47 $ 0.34 $ 0.89 $ 0.61
======== ======== ======== ========
Diluted earnings per share $ 0.47 $ 0.34 $ 0.87 $ 0.60
======== ======== ======== ========
Average shares outstanding:
Basic 59,919 58,544 59,610 58,419
Diluted 60,800 59,200 60,556 58,944
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
Quarter Ended Year to Date
------------------ -----------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
--------- -------- -------- --------
Net sales:
Electrical $342,051 $311,010 $658,927 $608,699
Steel Structures 45,629 29,951 90,271 56,081
HVAC 30,410 28,012 61,078 57,181
--------- -------- -------- --------
Total net sales $418,090 $368,973 $810,276 $721,961
========= ======== ======== ========
Segment earnings:
Electrical $ 37,368 $ 32,514 $ 70,407 $ 56,681
Steel Structures 7,192 2,571 12,507 3,181
HVAC 2,190 1,091 5,841 3,663
--------- -------- -------- --------
Total reportable segment earnings 46,750 36,176 88,755 63,525
Total reportable segment
earnings - % of net sales 11.2% 9.8% 11.0% 8.8%
Interest expense, net (6,868) (7,484) (14,028) (15,098)
Other (1,338) (957) (1,805) (1,092)
--------- -------- -------- --------
Earnings before income taxes $ 38,544 $ 27,735 $ 72,922 $ 47,335
========= ======== ======== ========
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, December 31,
2005 2004
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 369,783 $ 336,059
Marketable securities 1,450 1,658
Receivables, net 217,514 172,745
Inventories 209,533 207,158
Other current assets 57,499 61,275
----------- ----------
Total current assets 855,779 778,895
Net property, plant and equipment 275,636 276,144
Goodwill 459,556 463,264
Investments in unconsolidated companies 115,045 114,922
Other assets 121,717 122,527
----------- ----------
Total assets $1,827,733 $1,755,752
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 152,903 $ 2,830
Accounts payable 131,451 120,336
Accrued liabilities 97,952 100,692
Income taxes payable 9,911 14,551
----------- ----------
Total current liabilities 392,217 238,409
Long-term debt 394,272 543,085
Other long-term liabilities 77,065 72,539
Shareholders' equity 964,179 901,719
----------- ----------
Total liabilities and shareholders' equity $1,827,733 $1,755,752
=========== ==========
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year to Date
--------------------
June 30, June 30,
2005 2004
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 52,801 $ 35,581
Adjustments:
Depreciation and amortization 26,389 27,812
Deferred income taxes 3,968 2,405
Changes in operating assets and liabilities,
net:
Receivables (47,522) (43,437)
Inventories (184) (16,596)
Accounts payable 11,551 19,289
Accrued liabilities (6,385) (5,521)
Pension and post-retirement plans 7,496 (6,378)
Other 5,001 3,588
--------- ---------
Net cash provided by (used in) operating
activities 53,115 16,743
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses (16,526) -
Purchases of property, plant and equipment (18,248) (11,002)
Other 614 (54)
--------- ---------
Net cash provided by (used in) investing
activities (34,160) (11,056)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and other borrowings (1,027) (129,306)
Stock options exercised 18,598 6,205
--------- ---------
Net cash provided by (used in) financing
activities 17,571 (123,101)
--------- ---------
EFFECT OF EXCHANGE RATE ON CASH (2,802) (2,485)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 33,724 (119,899)
Cash and cash equivalents at beginning of period 336,059 387,425
--------- ---------
Cash and cash equivalents at end of period $369,783 $ 267,526
========= =========
Cash payments for interest $ 19,117 $ 24,794
Cash payments for income taxes $ 22,649 $ 7,457
CONTACT: Thomas & Betts Corporation, Memphis
Tricia Bergeron, 901-252-8266
www.tnb.com