Exhibit 99.1
Thomas & Betts Corporation Reports Third Quarter 2005 Results; Sales Up 12
Percent; E.P.S. $0.57
MEMPHIS, Tenn.--(BUSINESS WIRE)--Oct. 24, 2005--Thomas & Betts
Corporation (NYSE: TNB) today reported third quarter 2005 net earnings
of $34.8 million, or $0.57 per diluted share. This compares to net
earnings of $33.4 million, or $0.56 per diluted share in the third
quarter 2004, which included a pre-tax gain of $13.0 million ($0.14
per diluted share) related to the sale of a minority interest in a
European joint venture.
Sales in the third quarter 2005 were $442.1 million, up $47.9
million or 12.1 percent from the $394.2 million reported in the third
quarter last year. Higher sales volume and price increases taken to
offset higher material and energy costs contributed significantly to
the sales improvement while favorable foreign currency exchange rates
accounted for approximately $6 million of the increase.
Earnings from operations were $56.8 million in the quarter, up
$15.5 million or 37.4 percent compared to $41.3 million reported in
the prior-year period. As a percentage of sales, earnings from
operations improved to 12.8 percent in the period just ended from 10.5
percent last year.
"Solid sales momentum in most of our markets and continued
productivity improvements combined to deliver very strong earnings
performance in the quarter," said Dominic J. Pileggi, president and
chief executive officer. "We are especially pleased that each of our
business segments achieved double-digit year-over-year earnings growth
resulting in consolidated earnings from operations of nearly 13
percent of sales in the quarter despite the challenge of higher
material and energy costs.
"We believe that the overall impact of storm-related sales in the
quarter was similar to the net $5 million of storm-related sales we
saw in the third quarter 2004," continued Pileggi. "Our Electrical
segment benefited the most from storm-related sales in 2005, primarily
due to increased sales of utility products used in above-ground
distribution of electrical power. Last year in the third quarter,
storm-related sales primarily benefited our Steel Structures segment."
Third quarter 2005 gross margin was 30.4 percent of sales,
compared to 27.9 percent in the third quarter 2004. Stronger sales, a
more favorable product mix, and operating efficiencies contributed to
this improvement. Higher year-over-year material and energy costs were
offset through higher selling prices.
Selling, general and administrative expense was $77.8 million, or
17.6 percent of sales, roughly flat as a percent of sales with the
prior-year period.
SEGMENT RESULTS
Third quarter sales in the company's Electrical segment were
$365.9 million, up $42.1 million or 13.0 percent compared to $323.8
million in sales reported in the third quarter 2004. Improved sales
volume and higher selling prices contributed significantly to the
sales growth while favorable foreign currency exchange accounted for
approximately $6 million of the increase. The sales improvement was
seen in most of the major markets served by the Electrical segment,
particularly industrial, light construction and utility distribution.
Electrical segment earnings were $46.5 million, up $12.3 million
or 36.1 percent compared to $34.2 million last year. As a percent of
sales, segment earnings were 12.7 percent compared to 10.6 percent in
the third quarter 2004. The improvement reflects higher sales volumes,
operating efficiencies and the company's continued ability to offset
higher material and energy costs through higher selling prices.
Sales in the company's Steel Structures segment -- which provides
transmission poles for utilities -- were $46.2 million, a nine percent
increase over the $42.4 million reported last year. Storm-related
sales were not significant for this segment in the quarter while 2004
third quarter Steel Structure segment sales included approximately a
net $5 million in sales attributed to storm recovery efforts. Steel
Structures segment earnings were $8.3 million, up nearly 40 percent
over the $5.9 million reported in the prior-year period. As a percent
of sales, Steel Structures segment earnings were 17.8 percent of sales
compared to 13.9 percent of sales in the third quarter 2004. The
earnings improvement is due primarily to higher sales volume and a
more favorable product mix.
HVAC segment sales rose nearly seven percent to $30.0 million
compared to $28.0 million in the third quarter last year. Segment
earnings increased 24.4 percent to $2.3 million compared to $1.9
million in the third quarter last year, largely as a result of
improved sales and operating efficiency.
YEAR-TO-DATE RESULTS
For the nine months ended September 30, 2005, net sales rose 12.2
percent to $1.3 billion, compared to $1.1 billion reported in the
prior year. Favorable foreign currency exchange accounted for
approximately $21 million of the sales increase.
Net earnings for the first nine months of 2005 were $87.6 million,
or $1.44 per diluted share. This compares to net earnings of $69.0
million, or $1.17 per diluted share for the same period in 2004.
Prior-year results include the previously mentioned $13.0 million
pre-tax gain ($0.14 per diluted share) from the sale of a minority
interest in a European joint venture.
Cash flow from operations continued to be strong, driven primarily
by improved operating earnings and solid inventory management. Cash
and cash equivalents at the end of the third quarter 2005 were $434.9
million.
2005 DIRECTIONAL GUIDANCE
"We expect underlying demand for electrical products and steel
transmission poles to remain strong in the coming months with our
Steel Structures segment also benefiting from storm-related sales in
the fourth quarter," said Pileggi. "Given this, and our strong
third-quarter results, we are revising our full-year 2005 guidance
upward. We now believe that our full-year 2005 earnings per diluted
share will fall within the range of $1.95 to $2.00, a substantial
improvement over the $1.57 per share reported for the full-year 2004."
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 for, among other things,
utility transmission. Headquartered in Memphis, Tenn., the company has
manufacturing, distribution and office facilities worldwide.
NOTE: The following financial tables support the information in
this news release:
Consolidated Statements of Operations
Segment Information
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
CONFERENCE CALL AND WEBCAST INFORMATION
Thomas & Betts will hold a conference call/webcast to discuss the
company's third quarter 2005 results on Tuesday, October 25, 2005 at
11:00 am EDT (10:00 am CDT). To access the call, please call
201-689-8341. No confirmation code is required to participate in the
conference call. The call can also be accessed via the Investor
Relations section of the Thomas & Betts corporate website. In
addition, the conference call will be available for downloading as an
MP3 file from www.tnb.com.
The conference call will be recorded and available for replay
through 12:00 midnight (Eastern) on Tuesday, November 1, 2005. To
access the replay, please call 201-612-7415, account number 9517, pass
code 170212. The recorded web cast will also be available at
www.tnb.com.
CAUTIONARY STATEMENT
This press release includes forward-looking statements that are
identified by terms such as "optimistic," "trend," "will," and
"believe." These statements discuss business strategies, economic
outlook and future performance. These forward-looking statements make
assumptions regarding the company's operations, business, economic and
political environment, including, without limitation, customer demand,
government regulation, terrorist acts and acts of war. The actual
results may be materially different from any future results expressed
or implied by such forward-looking statements. Please see the
"Business Risks" section of the company's Form 10-K for the fiscal
year ended December 31, 2004 for further information related to these
uncertainties. The company undertakes no obligation to publicly
release any revisions to any forward-looking statements contained in
this press release to reflect events or circumstances occurring after
the date of this release or to reflect the occurrence of unanticipated
events.
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Quarter Ended Year to Date
-------------------- -----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
-------- --------- ----------- -----------
Net sales $442,071 $394,211 $1,252,347 $1,116,172
Cost of sales 307,558 284,237 886,770 799,245
--------- --------- ----------- -----------
Gross margin 134,513 109,974 365,577 316,927
Gross margin - % of
net sales 30.4% 27.9% 29.2% 28.4%
Selling, general and
administrative 77,754 68,663 220,732 213,311
Selling, general and
administrative - % of
net sales 17.6% 17.4% 17.6% 19.1%
--------- --------- ----------- -----------
Earnings from operations 56,759 41,311 144,845 103,616
Earnings from
operations - % of net
sales 12.8% 10.5% 11.6% 9.3%
Income from
unconsolidated companies 300 632 969 1,852
Interest expense, net (6,296) (8,162) (20,324) (23,260)
Other (expense) income,
net (1,695) 995 (3,500) (97)
Gain on sale of equity
interest - 12,978 - 12,978
--------- --------- ----------- -----------
Earnings before income
taxes 49,068 47,754 121,990 95,089
Income tax provision 14,230 14,326 34,351 26,080
--------- --------- ----------- -----------
Net earnings $ 34,838 $ 33,428 $ 87,639 $ 69,009
========= ========= =========== ===========
Net earnings per share:
Basic earnings per share $ 0.58 $ 0.57 $ 1.46 $ 1.18
========= ========= =========== ===========
Diluted earnings per
share $ 0.57 $ 0.56 $ 1.44 $ 1.17
========= ========= =========== ===========
Average shares
outstanding:
Basic 60,330 58,724 59,848 58,513
Diluted 61,256 59,468 60,799 59,128
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
Quarter Ended Year to Date
------------------- -----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
-------- --------- ----------- -----------
Net sales:
Electrical $365,872 $323,750 $1,024,799 $ 932,449
Steel Structures 46,230 42,423 136,501 98,504
HVAC 29,969 28,038 91,047 85,219
--------- --------- ----------- -----------
Total net sales $442,071 $394,211 $1,252,347 $1,116,172
========= ========= =========== ===========
Segment earnings:
Electrical $ 46,484 $ 34,165 $ 116,891 $ 90,846
Steel Structures 8,252 5,910 20,759 9,091
HVAC 2,323 1,868 8,164 5,531
--------- --------- ----------- -----------
Total reportable segment
earnings 57,059 41,943 145,814 105,468
Total reportable segment
earnings - % of net sales 12.9% 10.6% 11.6% 9.4%
Interest expense, net (6,296) (8,162) (20,324) (23,260)
Gain on sale of equity
interest - 12,978 - 12,978
Other (1,695) 995 (3,500) (97)
--------- --------- ----------- -----------
Earnings before income
taxes $ 49,068 $ 47,754 $ 121,990 $ 95,089
========= ========= =========== ===========
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
Sept. 30, Dec. 31,
2005 2004
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 434,929 $ 336,059
Marketable securities 702 1,658
Receivables, net 230,185 172,745
Inventories 202,683 207,158
Other current assets 55,833 61,275
----------- -----------
Total current assets 924,332 778,895
Net property, plant and equipment 272,524 276,144
Goodwill 460,671 463,264
Investments in unconsolidated companies 115,234 114,922
Other assets 118,627 122,527
----------- -----------
Total assets $1,891,388 $1,755,752
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 152,737 $ 2,830
Accounts payable 138,235 120,336
Accrued liabilities 101,700 100,692
Income taxes payable 12,343 14,551
----------- -----------
Total current liabilities 405,015 238,409
Long-term debt 388,210 543,085
Other long-term liabilities 81,103 72,539
Shareholders' equity 1,017,060 901,719
----------- -----------
Total liabilities and shareholders' equity $1,891,388 $1,755,752
=========== ===========
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year to Date
--------------------
Sept. 30, Sept. 30,
2005 2004
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 87,639 $ 69,009
Adjustments:
Depreciation and amortization 38,464 41,698
Gain on sale of equity interest - (12,978)
Deferred income taxes 10,237 11,307
Changes in operating assets and liabilities,
net:
Receivables (59,401) (51,547)
Inventories 7,417 (25,018)
Accounts payable 17,825 24,311
Accrued liabilities (237) 2,206
Pension and post-retirement plans 11,203 (2,206)
Other 3,323 2,240
--------------------
Net cash provided by (used in) operating
activities 116,470 59,022
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses (16,526) -
Purchases of property, plant and equipment (26,355) (15,604)
Proceeds from sale of equity interest - 20,929
Other 1,421 4,864
--------- ---------
Net cash provided by (used in) investing
activities (41,460) 10,189
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and other borrowings (5,138) (130,791)
Stock options exercised 27,139 7,069
--------- ---------
Net cash provided by (used in) financing
activities 22,001 (123,722)
--------- ---------
EFFECT OF EXCHANGE RATE ON CASH 1,859 1,652
--------- ---------
Net increase (decrease) in cash and cash
equivalents 98,870 (52,859)
Cash and cash equivalents at beginning of period 336,059 387,425
--------- ---------
Cash and cash equivalents at end of period $434,929 $334,566
========= =========
Cash payments for interest $ 29,222 $ 35,088
Cash payments for income taxes $ 27,456 $ 10,528
CONTACT: Thomas & Betts Corporation
Tricia Bergeron, 901-252-8266
tricia.bergeron@tnb.com