Exhibit 99.1
Thomas & Betts Corporation Reports Third
Quarter 2007 Earnings
Sales Increase 17 Percent, 7 Percent from Acquisitions;
E.P.S. $0.88, Up 19 Percent
MEMPHIS, Tenn.--(BUSINESS WIRE)--October 22, 2007--Thomas & Betts
Corporation (NYSE: TNB) today reported third quarter 2007 net earnings
of $51.3 million compared to net earnings of $44.5 million in the
third quarter 2006. 2007 third quarter earnings were $0.88 per diluted
share, up 18.9 percent compared to $0.74 per diluted share reported in
the third quarter 2006.
Third quarter 2007 net sales were $552.7 million, up 16.8 percent
compared to $473.4 million in the prior-year period. Net sales were
positively impacted by $33.6 million related to acquisitions completed
in July 2007. In addition, higher sales volume in the company's core
electrical products contributed significantly to the sales growth.
Foreign currency benefited sales by approximately $11.5 million in the
quarter.
"Thomas & Betts again delivered a strong performance in the third
quarter," said Dominic J. Pileggi, chairman and chief executive
officer. "Each of our segments contributed to our robust underlying
sales growth and significantly improved segment earnings. On a
consolidated basis, earnings from operations were 14.8 percent of
sales, up nearly a full percentage point over the third quarter last
year.
"In our core Electrical segment, we continue to see good activity
in commercial construction markets as well as solid demand for
industrial products. We also moved well down the path of integrating
the Power Solutions, Joslyn Hi-Voltage and DTS businesses acquired
during the quarter."
Third quarter 2007 gross margin was 30.9 percent of sales,
essentially flat with the prior-year period. Selling, general and
administrative (SG&A) expense was $88.8 million, or 16.1 percent of
sales, in the third quarter 2007, compared to $80.8 million or 17.1
percent of sales in the prior-year period.
Earnings from operations were $82.0 million in the quarter, or
14.8 percent of sales, compared to 14.0 percent of sales last year.
The previously mentioned acquisitions had a negligible net impact on
earnings due, in part, to the amortization of acquisition-related
intangible assets and other purchase accounting expenses.
Interest expense, net increased to $5.8 million compared to $4.1
million last year, reflecting less interest income on lower cash
balances due to the acquisitions completed in the quarter.
The effective tax rate was 31 percent in the third quarter 2007,
up from 29 percent in the prior-year period reflecting a net increase
in U.S. income taxes.
SEGMENT RESULTS
Total segment earnings grew 20.0 percent year over year to $95.9
million in the third quarter. As a percent of sales, total segment
earnings were 17.3 percent of sales, up from 16.9 percent in the third
quarter 2006, driven by higher earnings as a percent of sales in each
of the company's three business segments.
Third quarter Electrical segment sales increased 18.5 percent to
$461.6 million, including $33.6 million in sales related to the
acquisitions completed in July 2007. Continued solid demand in
commercial construction and industrial markets contributed
significantly to the underlying sales improvement while foreign
currency benefited the segment's sales by approximately $11.0 million
in the quarter.
Electrical segment earnings were $80.5 million in the quarter, up
20.7 percent year over year. As a percent of sales, segment earnings
were 17.4 percent compared to 17.1 percent in the prior-year period,
primarily reflecting higher sales. As previously noted, the recent
acquisitions did not contribute meaningfully to the segment's third
quarter earnings.
Sales in the Steel Structures segment were $58.0 million in the
quarter, up 8.3 percent compared to $53.5 million reported last year.
Steel Structures segment earnings increased nearly 10 percent, to
$10.0 million, reflecting the impact of higher sales volumes. As a
percent of sales, segment earnings in the quarter were 17.2 percent,
compared to 17.0 percent last year.
Year-over-year HVAC segment sales increased nearly nine percent,
to $33.2 million. Segment earnings increased nearly 32 percent to $5.4
million or 16.3 percent of sales, as a result of higher sales and
improved operating efficiencies.
YEAR-TO-DATE RESULTS
For the nine months ended September 30, 2007, net sales increased
11.0 percent to $1.5 billion compared to $1.4 billion in the first
nine months of 2006. Net sales were positively impacted by $33.6
million related to acquisitions completed in July 2007. Foreign
currency benefited sales by approximately $24 million.
Net earnings for the first nine months of 2007 were $134.9
million, or $2.30 per diluted share. This compares to net earnings of
$124.3 million, or $2.01 per diluted share, in the prior-year period.
2007 earnings include the negative impact of $7 million of pre-tax
expenses, or $0.08 per share, related to a legal settlement in the
first quarter of 2007.
BALANCE SHEET HIGHLIGHTS
During the third quarter, Thomas & Betts completed acquisitions
totaling approximately $300 million, which were funded from available
cash resources. The company ended the quarter with approximately $105
million in cash.
The company also ended the quarter with $388 million in total
debt, essentially the same level as at year end 2006.
In October 2007, Thomas & Betts increased the availability under
its revolving credit facility to $750 million from $300 million in
part to fund the company's pending acquisition of Lamson & Sessions
(NYSE:LMS). This acquisition is expected to close in the fourth
quarter.
2007 DIRECTIONAL GUIDANCE
"We are very pleased with our year-to-date performance and the
solid demand we continue to see in key markets," said Pileggi. "Given
this, we expect sales for the full year 2007 to grow in the
low-double-digit range including acquisitions and are reaffirming
guidance for 2007 earnings in the range of $3.15 to $3.20 per diluted
share. We continue to expect the earnings impact from the recently
completed acquisitions to be negligible in 2007. In addition, any
impact from our pending acquisition of Lamson & Sessions is not
included in this guidance."
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
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
CAUTIONARY STATEMENT
This press release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are not historical facts and are typically
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 third quarter 2007 results on Tuesday, October 23, 2007 at
11:00 am ET (10:00 am CT). To access the call, please call
201-689-8341. No confirmation code is required. The conference call
will be recorded and available for replay through 12:00 midnight ET on
Wednesday, October 31, 2007. To access the replay, please call
201-612-7415, account number 9517, pass code 257562. The call can also
be accessed via the Thomas & Betts corporate website at www.tnb.com.
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,
2007 2006 2007 2006
--------- --------- ----------- -----------
Net sales $552,704 $473,401 $1,534,494 $1,383,082
Cost of sales 381,991 326,396 1,064,352 957,922
--------- --------- ----------- -----------
Gross profit 170,713 147,005 470,142 425,160
Gross profit - % of
net sales 30.9% 31.1% 30.6% 30.7%
Selling, general and
administrative 88,759 80,780 260,620 241,080
Selling, general and
administrative - % of
net sales 16.1% 17.1% 16.9% 17.4%
--------- --------- ----------- -----------
Earnings from operations 81,954 66,225 209,522 184,080
Earnings from
operations - % of net
sales 14.8% 14.0% 13.7% 13.3%
Income from unconsolidated
companies 7 35 250 570
Interest expense, net (5,759) (4,122) (12,756) (11,297)
Other (expense) income,
net (1,925) 484 (1,445) 1,647
--------- --------- ----------- -----------
Earnings before income
taxes 74,277 62,622 195,571 175,000
Income tax provision 23,026 18,160 60,627 50,750
--------- --------- ----------- -----------
Net earnings $ 51,251 $ 44,462 $ 134,944 $ 124,250
========= ========= =========== ===========
Net earnings per share:
Basic earnings per
share $ 0.89 $ 0.75 $ 2.33 $ 2.05
========= ========= =========== ===========
Diluted earnings per
share $ 0.88 $ 0.74 $ 2.30 $ 2.01
========= ========= =========== ===========
Average shares
outstanding:
Basic 57,544 59,573 58,004 60,686
Diluted 58,309 60,412 58,796 61,707
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
Quarter Ended Year to Date
------------------- -----------------------
Sept. 30, Sept. 30, Sept. 30, Sept.30,
2007 2006 2007 2006
--------- --------- ----------- -----------
Net sales:
Electrical $461,585 $389,433 $1,268,784 $1,130,555
Steel Structures 57,959 53,516 168,071 157,701
HVAC 33,160 30,452 97,639 94,826
--------- --------- ----------- -----------
Total net sales $552,704 $473,401 $1,534,494 $1,383,082
========= ========= =========== ===========
Segment earnings:
Electrical $ 80,491 $ 66,699 $ 218,547 $ 188,578
Steel Structures 9,976 9,076 27,758 24,421
HVAC 5,417 4,111 14,309 13,004
--------- --------- ----------- -----------
Total reportable segment
earnings 95,884 79,886 260,614 226,003
Corporate expense (13,923) (13,626) (50,842) (41,353)
Interest expense, net (5,759) (4,122) (12,756) (11,297)
Other (1,925) 484 (1,445) 1,647
--------- --------- ----------- -----------
Earnings before income
taxes $ 74,277 $ 62,622 $ 195,571 $ 175,000
========= ========= =========== ===========
Segment earnings - % of
net sales:
Electrical 17.4% 17.1% 17.2% 16.7%
Steel Structures 17.2% 17.0% 16.5% 15.5%
HVAC 16.3% 13.5% 14.7% 13.7%
Total 17.3% 16.9% 17.0% 16.3%
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
Sept. 30, Dec. 31,
2007 2006
-------------- -------------
ASSETS
Current assets:
Cash and marketable securities $ 104,921 $ 371,339
Receivables, net 295,324 204,270
Inventories 268,509 218,536
Other current assets 64,193 74,225
-------------- -------------
Total current assets 732,947 868,370
Net property, plant and equipment 278,598 267,200
Investments in unconsolidated companies 115,178 115,726
Other assets 869,919 578,927
-------------- -------------
Total assets $1,996,642 $1,830,223
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 115,692 $ 719
Accounts payable 192,523 144,844
Accrued liabilities 137,363 102,966
-------------- -------------
Total current liabilities 445,578 248,529
Long-term debt 272,521 386,912
Other long-term liabilities 118,503 126,423
Shareholders' equity 1,160,040 1,068,359
-------------- -------------
Total liabilities and shareholders'
equity $1,996,642 $1,830,223
============== =============
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year to Date
---------------------------
Sept. 30, Sept. 30,
2007 2006
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 134,944 $ 124,250
Adjustments:
Depreciation and amortization 40,334 35,568
Deferred income taxes 15,811 18,663
Incremental tax benefits from share-
based payments (6,104) (9,087)
Changes in operating assets and
liabilities, net (a):
Receivables (53,131) (45,182)
Inventories (9,951) (35,757)
Accounts payable 11,539 1,019
Accrued liabilities 19,243 (5,448)
Other 11,706 24,365
------------- -------------
Net cash provided by (used in) operating
activities 164,391 108,391
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (26,377) (30,498)
Purchases of businesses (304,855) (33,286)
Marketable securities 133 291,714
Other 220 193
------------- -------------
Net cash provided by (used in) investing
activities (330,879) 228,123
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common shares (132,958) (166,554)
Stock options exercised 22,230 48,055
Repayment of long-term debt and other
borrowings (266) (150,313)
Incremental tax benefits from share-based
payments 6,104 9,087
------------- -------------
Net cash provided by (used in) financing
activities (104,890) (259,725)
------------- -------------
EFFECT OF EXCHANGE RATE ON CASH 5,089 2,222
------------- -------------
Net increase (decrease) in cash and cash
equivalents (266,289) 79,011
Cash and cash equivalents at beginning of
period 370,968 216,742
------------- -------------
Cash and cash equivalents at end of period $ 104,679 $ 295,753
============= =============
Cash payments for interest $ 18,803 $ 23,880
Cash payments for income taxes $ 41,511 $ 34,777
(a) Net of foreign exchange and acquisition effects
CONTACT: Thomas & Betts
Tricia Bergeron, 901-252-8266
tricia.bergeron@tnb.com