Exhibit 99.1
Thomas & Betts Corporation Reports Third Quarter 2006 Earnings
Earnings Per Diluted Share $0.74, Up 30%
2006 E.P.S. Guidance Increased
MEMPHIS, Tenn.--(BUSINESS WIRE)--Oct. 24, 2006--Thomas & Betts
Corporation (NYSE: TNB) today reported third quarter 2006 net earnings
of $44.5 million, up 28 percent compared to net earnings of $34.8
million in 2005. Earnings per diluted share were $0.74, an increase of
30 percent compared to $0.57 reported in the third quarter 2005.
Net sales rose 7.1 percent to $473.4 million in the third quarter
2006 compared to $442.1 million in the prior-year period. Price
increases to offset higher material and energy costs contributed to
the sales increase. Favorable foreign currency exchange rates
benefited sales by approximately $9 million.
Gross margin improved to 31.1 percent of sales in the quarter just
ended, compared to 30.4 percent in the prior year period. Favorable
pricing and product mix contributed to the margin increase. Selling,
general and administrative (SG&A) expense was $80.8 million or 17.1
percent of sales, an improvement over the 17.6 percent of sales
achieved in the third quarter 2005.
Earnings from operations rose nearly 17 percent to $66.2 million
in the quarter, compared to $56.8 million reported in the third
quarter 2005. As a percentage of sales, third quarter 2006 earnings
from operations improved to 14.0 percent from 12.8 percent in 2005.
"We are very pleased with our third quarter results, with each of
our business segments again achieving double-digit earnings as a
percentage of sales," said Dominic J. Pileggi, chairman and chief
executive officer. "We are particularly pleased with our core
electrical segment which grew earnings nearly 20 percent and delivered
a segment operating margin of more than 14 percent."
SEGMENT RESULTS
Third quarter 2006 electrical segment sales were $389.4 million,
up 6.4 percent compared to the prior year period. Higher selling
prices taken to offset increased material and energy costs and the
favorable impact of foreign currency contributed to the sales growth.
There were no storm-recovery sales in the quarter just ended compared
to more than $8 million in storm-related sales in the third quarter
2005.
Electrical segment earnings increased nearly 20 percent to $55.4
million or 14.2 percent of sales. This compares to earnings of $46.5
million or 12.7 percent of sales in the third quarter 2005. The
earnings improvement reflects the company's continued ability to
offset higher material and energy costs through targeted price
increases and a more favorable product mix.
Sales in the Steel Structures segment increased $7.3 million to
$53.5 million in the third quarter 2006. Steel Structures segment
earnings were $7.7 million, or 14.3 percent of sales, down from 2005
reflecting a less-favorable project mix.
Sales in the HVAC segment were $30.5 million in the third quarter,
up $0.5 million from the prior year period. Segment earnings were $3.2
million, or 10.5 percent of sales, a three-percentage point
improvement over the prior year period. Improved pricing and a more
favorable product mix drove the earnings growth.
YEAR-TO-DATE RESULTS
For the nine months ended September 30, 2006, net sales rose 10.4
percent to $1.4 billion compared to the same period of 2005. Higher
sales volumes and price increases taken to offset higher material and
energy costs contributed to the sales improvement. Favorable foreign
currency exchange rates benefited sales by $14 million.
Earnings from operations increased 27 percent for the first nine
months of 2006, to $184.1 million. As a percent of sales, operating
earnings rose 1.7 percentage points to 13.3 percent of sales compared
to the same period last year. Net interest expense was approximately
$11 million, down $9 million from the prior year due to lower debt
levels and higher yields on cash investments. Net earnings for the
first nine months of 2006 were $124.3 million, up 42 percent compared
to the same period of 2005. Earnings per diluted share increased 40
percent to $2.01.
At the end of the third quarter 2006, cash and marketable
securities were $296 million. During the quarter, Thomas & Betts
completed an acquisition for approximately $33 million. The
acquisition enhances the company's utility product offering and did
not significantly impact the Electrical segment's sales and earnings.
2006 DIRECTIONAL GUIDANCE
"Our businesses have performed well in the first nine months of
2006," said Pileggi. "We expect full-year 2006 sales growth to be
around 10 percent reflecting continued favorable market conditions.
Given this, we are increasing our full-year earnings per diluted share
guidance to a range of $2.70 to $2.75. Previously, our guidance was
earnings per diluted share in the range of $2.65 to $2.70."
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 utility transmission structures. Headquartered in
Memphis, Tenn., the company has manufacturing, distribution and office
facilities worldwide.
NOTE: The attached 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 host a conference call to discuss third
quarter 2006 results on Wednesday, October 25, 2006 at 11:00 a.m.
Eastern (10:00 a.m. Central). The telephone number to participate in
the call is 201-689-8341. No confirmation code is required. The call
can also be accessed via the company's website at www.tnb.com.
The conference call will be recorded and available for replay
through 12:00 midnight (Eastern) on Wednesday, November 1, 2006. To
access the replay, please call 201-612-7415, account number 9517, pass
code 216672. 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 "Risk
Factors" section of the company's Form 10-K for the fiscal year ended
December 31, 2005 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
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Net sales $473,401 $442,071 $1,383,082 $1,252,347
Cost of sales 326,396 307,558 957,922 886,770
------------- ------------- ------------- -------------
Gross profit 147,005 134,513 425,160 365,577
Gross profit
- % of net
sales 31.1% 30.4% 30.7% 29.2%
Selling,
general and
administrative 80,780 77,754 241,080 220,732
Selling,
general and
administrative
- % of net
sales 17.1% 17.6% 17.4% 17.6%
------------- ------------- ------------- -------------
Earnings from
operations 66,225 56,759 184,080 144,845
Earnings from
operations -
% of net
sales 14.0% 12.8% 13.3% 11.6%
Income from
unconsolidated
companies 35 300 570 969
Interest
expense, net (4,122) (6,296) (11,297) (20,324)
Other (expense)
income, net 484 (1,695) 1,647 (3,500)
------------- ------------- ------------- -------------
Earnings before
income taxes 62,622 49,068 175,000 121,990
Income tax
provision 18,160 14,230 50,750 34,351
------------- ------------- ------------- -------------
Net earnings $44,462 $34,838 $124,250 $87,639
============= ============= ============= =============
Net earnings
per share:
Basic
earnings per
share $0.75 $0.58 $2.05 $1.46
============= ============= ============= =============
Diluted
earnings per
share $0.74 $0.57 $2.01 $1.44
============= ============= ============= =============
Average shares
outstanding:
Basic 59,573 60,330 60,686 59,848
Diluted 60,412 61,256 61,707 60,799
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
Quarter Ended Year to Date
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Net sales:
Electrical $389,433 $365,872 $1,130,555 $1,024,799
Steel
Structures 53,516 46,230 157,701 136,501
HVAC 30,452 29,969 94,826 91,047
------------- ------------- ------------- -------------
Total net
sales $473,401 $442,071 $1,383,082 $1,252,347
============= ============= ============= =============
Segment
earnings:
Electrical $55,411 $46,484 $154,479 $116,891
Steel
Structures 7,657 8,252 20,011 20,759
HVAC 3,192 2,323 10,160 8,164
------------- ------------- ------------- -------------
Total
reportable
segment
earnings 66,260 57,059 184,650 145,814
Interest
expense, net (4,122) (6,296) (11,297) (20,324)
Other 484 (1,695) 1,647 (3,500)
------------- ------------- ------------- -------------
Earnings before
income taxes $62,622 $49,068 $175,000 $121,990
============= ============= ============= =============
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2006 2005
------------- ------------
ASSETS
Current assets:
Cash and marketable securities $296,183 $508,896
Receivables, net 237,121 185,391
Inventories 238,523 198,107
Other current assets 58,068 57,748
------------- ------------
Total current assets 829,895 950,142
Net property, plant and equipment 266,142 267,026
Goodwill 499,428 462,810
Investments in unconsolidated companies 115,304 115,665
Other assets 120,110 124,753
------------- ------------
Total assets $1,830,879 $1,920,396
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $636 $150,804
Accounts payable 142,032 138,060
Accrued liabilities 112,222 115,547
------------- ------------
Total current liabilities 254,890 404,411
Long-term debt 386,934 387,155
Other long-term liabilities 90,871 76,240
Shareholders' equity 1,098,184 1,052,590
------------- ------------
Total liabilities and shareholders'
equity $1,830,879 $1,920,396
============= ============
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year to Date
---------------------------
September 30, September 30,
2006 2005
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $124,250 $87,639
Adjustments:
Depreciation and amortization 35,568 38,464
Share-based compensation expense 6,584 -
Deferred income taxes 18,663 10,237
Incremental tax benefits from share-based
payments (9,087) -
Changes in operating assets and
liabilities, net:
Receivables (45,182) (59,401)
Inventories (35,757) 7,417
Accounts payable 1,019 17,825
Accrued liabilities (5,448) 50
Other 17,781 14,239
------------- -------------
Net cash provided by (used in) operating
activities 108,391 116,470
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (30,498) (26,355)
Purchases of businesses (33,286) (16,526)
Marketable securities 291,714 (59,602)
Other 193 493
------------- -------------
Net cash provided by (used in) investing
activities 228,123 (101,990)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and other
borrowings (150,313) (5,138)
Stock options exercised 48,055 27,139
Incremental tax benefits from share-based
payments 9,087 -
Repurchase of common shares (166,554) -
------------- -------------
Net cash provided by (used in) financing
activities (259,725) 22,001
------------- -------------
EFFECT OF EXCHANGE RATE ON CASH 2,222 1,859
------------- -------------
Net increase (decrease) in cash and cash
equivalents 79,011 38,340
Cash and cash equivalents at beginning of
period 216,742 151,189
------------- -------------
Cash and cash equivalents at end of period $295,753 $189,529
============= =============
Cash payments for interest $23,880 $29,222
Cash payments for income taxes $34,777 $27,456
CONTACT: Thomas & Betts Corporation, Memphis
Tricia Bergeron, 901-252-8266
tricia.bergeron@tnb.com