Exhibit 99.1
Thomas & Betts Corporation Reports First
Quarter 2007 Earnings
Sales Increase 7 Percent;
Earnings per Share $0.63 Including $0.08
Charge Related to Legal Settlement
MEMPHIS, Tenn.--(BUSINESS WIRE)--April, 23, 2007--Thomas & Betts Corporation
(NYSE: TNB) today reported first quarter 2007 net earnings of $37.1
million including the negative impact of $7 million ($0.08 per share)
of pre-tax expenses related to a legal settlement. This compares to
net earnings of $38.8 million in the first quarter 2006. Including the
$0.08 per share charge, 2007 first quarter earnings were $0.63 per
diluted share. This compares to $0.62 per diluted share in the first
quarter 2006.
First quarter 2007 net sales rose 7.4 percent to $474.6 million,
compared to $441.8 million in the prior-year period. Price increases
to offset higher material and energy costs and volume improvements
contributed to the sales increase. Foreign currency benefited sales by
approximately $5 million in the quarter.
"2007 started out strong for Thomas & Betts. Demand remains
positive in industrial and utility markets and is beginning to
strengthen in commercial construction markets," said Dominic J.
Pileggi, chairman and chief executive officer. "We continue to execute
as planned and again improved operating margins in each of our
business segments."
First quarter 2007 gross margin was approximately 31 percent of
sales, in line with the prior-year period. The company continued to
successfully offset higher material and energy costs with increased
selling prices.
Including the $7 million legal charge, selling, general and
administrative (SG&A) expense was $87.3 million, or 18.4 percent of
sales, in the first quarter 2007. This compares to 17.8 percent of
sales in the prior-year period. Earnings from operations were $57.5
million in the quarter, or 12.1 percent of sales, compared to $57.8
million, or 13.1 percent of sales, last year. As a percent of sales,
both SG&A and earnings from operations were negatively impacted by 1.5
percentage points as a result of the legal settlement.
The effective tax rate increased to 31 percent in the first
quarter 2007, up from 29 percent in the prior-year period reflecting a
net increase in U.S. income taxes.
SEGMENT RESULTS
During the first quarter 2007, the company began to report
corporate expenses related to legal, finance and administrative costs
separately from business segment results. Management believes this
change provides improved transparency into the underlying operating
trends in the business segments. 2006 results have been revised to
reflect this change. First quarter 2007 corporate expense includes the
$7 million legal charge.
Electrical segment sales were $389.2 million in the first quarter,
up 8.8 percent compared to the first quarter 2006. Higher selling
prices driven by higher material and energy costs contributed
significantly to the sales growth. Solid demand in industrial,
commercial construction and utility distribution markets also
contributed to the sales improvement. Foreign currency benefited sales
by $4 million in the first quarter 2007.
Electrical segment earnings were $64.9 million in the quarter, up
11.4 percent compared to the first quarter 2006. As a percent of
sales, segment earnings were 16.7 percent, up from 16.3 percent
reflecting slightly higher sales volume.
Sales in the Steel Structures segment were $53.0 million in the
quarter, similar to the prior-year period. Steel Structures segment
earnings increased 6.8 percent to $8.9 million, or 16.8 percent of
sales, reflecting improved project mix in 2007 compared to 2006.
HVAC segment sales increased approximately four percent to $32.4
million in the first quarter 2007. Segment earnings were $4.7 million,
up 13 percent from the prior-year period. As a percent of sales,
segment earnings improved to 14.6 percent in the first quarter 2007,
compared to 13.3 percent of sales in same period last year. The
earnings improvement reflects continued cost control and higher sales.
BALANCE SHEET HIGHLIGHTS
The company ended the first quarter 2007 with approximately $310
million in cash and $388 million in total debt. During the first
quarter 2007, the company repurchased 1.8 million shares of common
stock at a cost of approximately $94 million. The share repurchase
activity had no net effect on earnings per share in the quarter.
2007 DIRECTIONAL GUIDANCE
"We saw demand strengthen as the quarter progressed and continue
to expect solid sales growth in the mid-single-digit range for 2007,"
said Pileggi. "Despite the negative impact of the $0.08 per share
legal settlement, we are reaffirming our earnings guidance of $3.05 to
$3.15 for the full year 2007."
CORPORATE OVERVIEW
Thomas & Betts Corporation (www.tnb.com) is a leading designer and
manufacturer of electrical components used in industrial, commercial,
communications and utility markets. The company is also a leading
producer of commercial heating and ventilation units and 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
Prior-Year Segment Information
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
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, 2006 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.
CONFERENCE CALL AND WEBCAST INFORMATION
Thomas & Betts will hold a conference call/webcast to discuss the
company's first quarter 2007 results on Tuesday, April 24, 2007 at
11:00 am ET (10:00 am CT). To access the call, please call
201-689-8341. 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 ET on Monday, April
30, 2007. To access the replay, please call 201-612-7415, account
number 9517, pass code 235376.
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Quarter Ended
--------------------
March 31, March 31,
2007 2006
--------- ---------
Net sales $474,552 $441,802
Cost of sales 329,717 305,519
--------- ---------
Gross profit 144,835 136,283
Gross profit - % of net sales 30.5% 30.9%
Selling, general and administrative 87,329 78,528
Selling, general and administrative - % of net
sales 18.4% 17.8%
--------- ---------
Earnings from operations 57,506 57,755
Earnings from operations - % of net sales 12.1% 13.1%
Income from unconsolidated companies 30 174
Interest expense, net (3,551) (3,467)
Other (expense) income, net (160) 186
--------- ---------
Earnings before income taxes 53,825 54,648
Income tax provision 16,685 15,848
--------- ---------
Net earnings $ 37,140 $ 38,800
========= =========
Net earnings per share:
Basic earnings per share $ 0.63 $ 0.63
========= =========
Diluted earnings per share $ 0.63 $ 0.62
========= =========
Average shares outstanding:
Basic 58,593 61,432
Diluted 59,393 62,540
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
Quarter Ended
--------------------
March 31, March 31,
2007 2006
--------- ---------
Net sales:
Electrical $389,166 $357,849
Steel Structures 53,030 52,728
HVAC 32,356 31,225
--------- ---------
Total net sales $474,552 $441,802
========= =========
Segment earnings:
Electrical $ 64,901 $ 58,239
Steel Structures 8,902 8,332
HVAC 4,709 4,151
--------- ---------
Total reportable segment earnings 78,512 70,722
Corporate expense (20,976) (12,793)
Interest expense, net (3,551) (3,467)
Other (160) 186
--------- ---------
Earnings before income taxes $ 53,825 $ 54,648
========= =========
Segment earnings - % of net sales:
Electrical 16.7% 16.3%
Steel Structures 16.8% 15.8%
HVAC 14.6% 13.3%
Total 16.5% 16.0%
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Prior-Year Segment Information
(In thousands)
(Unaudited)
2006
---------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Year
--------- --------- --------- --------- ----------
Net Sales:
Electrical $357,849 $383,273 $389,433 $381,002 $1,511,557
Steel Structures 52,728 51,457 53,516 63,970 221,671
HVAC 31,225 33,149 30,452 40,635 135,461
--------- --------- --------- --------- -----------
Total net sales $441,802 $467,879 $473,401 $485,607 $1,868,689
========= ========= ========= ========= ===========
Segment earnings:
Electrical $ 58,239 $ 63,640 $ 66,699 $ 60,289 $ 248,867
Steel Structures 8,332 7,013 9,076 10,692 35,113
HVAC 4,151 4,742 4,111 7,473 20,477
--------- --------- --------- --------- -----------
Total reportable
segment earnings $ 70,722 $ 75,395 $ 79,886 $ 78,454 $ 304,457
Corporate expense (12,793) (14,934) (13,626) (16,339) (57,692)
Interest expense,
net (3,467) (3,708) (4,122) (3,543) (14,840)
Other 186 977 484 (130) 1,517
--------- --------- --------- --------- -----------
Earnings before
income taxes $ 54,648 $ 57,730 $ 62,622 $ 58,442 $ 233,442
========= ========= ========= ========= ===========
Segment earnings -
% of net sales:
Electrical 16.3% 16.6% 17.1% 15.8% 16.5%
Steel Structures 15.8% 13.6% 17.0% 16.7% 15.8%
HVAC 13.3% 14.3% 13.5% 18.4% 15.1%
Total 16.0% 16.1% 16.9% 16.2% 16.3%
During the first quarter 2007, the Corporation discontinued the
allocation of certain corporate expenses to its reportable segments.
Corporate expense includes legal, finance and administrative costs.
Prior periods presented above have been conformed to reflect this
current period change.
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2007 2006
----------- ------------
ASSETS
Current assets:
Cash and marketable securities $ 310,180 $ 371,339
Receivables, net 236,627 204,270
Inventories 220,883 218,536
Other current assets 65,151 74,225
----------- ------------
Total current assets 832,841 868,370
Net property, plant and equipment 261,502 267,200
Goodwill 490,769 490,210
Investments in unconsolidated companies 115,708 115,726
Other assets 92,861 88,717
----------- ------------
Total assets $1,793,681 $1,830,223
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 644 $ 719
Accounts payable 152,000 144,844
Accrued liabilities 98,545 102,966
----------- ------------
Total current liabilities 251,189 248,529
Long-term debt 387,081 386,912
Other long-term liabilities 128,487 126,423
Shareholders' equity 1,026,924 1,068,359
----------- ------------
Total liabilities and shareholders' equity $1,793,681 $1,830,223
=========== ============
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year to Date
--------------------
March 31, March 31,
2007 2006
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $37,140 $38,800
Adjustments:
Depreciation and amortization 12,344 11,785
Deferred income taxes 6,232 4,528
Incremental tax benefits from share-based
payments (1,003) (2,902)
Changes in operating assets and liabilities,
net:
Receivables (32,100) (23,915)
Inventories (1,895) (19,978)
Accounts payable 7,100 19,661
Accrued liabilities (4,435) (20,056)
Other 9,790 6,227
--------- ---------
Net cash provided by (used in) operating
activities 33,173 14,150
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (6,392) (14,086)
Marketable securities 58 291,628
Other 91 118
--------- ---------
Net cash provided by (used in) investing
activities (6,243) 277,660
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and other borrowings (137) (150,112)
Stock options exercised 4,604 30,083
Repurchase of common shares (93,541) -
Other 1,003 2,902
--------- ---------
Net cash provided by (used in) financing
activities (88,071) (117,127)
--------- ---------
EFFECT OF EXCHANGE RATE ON CASH 39 299
--------- ---------
Net increase (decrease) in cash and cash
equivalents (61,102) 174,982
Cash and cash equivalents at beginning of period 370,968 216,742
--------- ---------
Cash and cash equivalents at end of period $309,866 $391,724
========= =========
Cash payments for interest $4,994 $10,003
Cash payments for income taxes $10,739 $16,371
CONTACT: Thomas & Betts Corporation
Tricia Bergeron, (901) 252-8266
tricia.bergeron@tnb.com