<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4682
THOMAS & BETTS CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-1326940
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification
No.)
1555 Lynnfield Road, Memphis, Tennessee 38119
(Address of principal executive offices) (Zip Code)
(901) 682-7766
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock Par Value $ .50 19,161,916
(Title of each class) (Outstanding at April 30, 1994) <PAGE>
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THOMAS & BETTS CORPORATION
INDEX
Page
PART I. Financial Information:
Consolidated Balance Sheet -
April 3, 1994 and January 2, 1994. . . . . . . . . 3
Consolidated Statement of Earnings - Quarters
Ended April 3, 1994 and April 4, 1993. . . . . . . 4
Consolidated Statement of Cash Flows - Quarters
Ended April 3, 1994 and April 4, 1993. . . . . . . 5
Notes to Consolidated Financial Statements . . . . 6
Management's Discussion and Analysis of Results
of Operations and Financial Condition. . . . . . . 8
PART II. Other Information. . . . . . . . . . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . 11
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<TABLE>
PART I. FINANCIAL INFORMATION
THOMAS & BETTS CORPORATION
Consolidated Balance Sheet
(Thousands of Dollars)
<CAPTION>
April 3, January 2,
1994 1994
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 76,509 $ 72,509
Marketable securities 31,081 31,543
Receivables, net 171,941 165,162
Inventories:
Finished goods 104,142 97,795
Work in process 37,142 34,389
Raw materials 71,158 68,118
212,442 200,302
Deferred income taxes 14,625 13,884
Prepaid expenses 8,379 5,691
Total Current Assets 514,977 489,091
Property, plant, and equipment, at cost 608,362 571,275
Less accumulated depreciation 300,560 275,271
Net property, plant and equipment 307,802 296,004
Intangible assets - net 308,042 311,059
Other assets 36,765 37,028
TOTAL ASSETS $1,167,586 $1,133,182
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term bank borrowings $ 15,522 $ 20,539
Current maturities of long-term debt 11,377 7,358
Accounts payable 85,844 81,571
Accrued liabilities 76,858 78,637
Income taxes 12,460 6,791
Dividends payable 10,729 10,569
Total Current Liabilities 212,790 205,465
Long-term debt 396,783 393,502
Other long-term liabilities 26,513 28,615
Deferred income taxes 26,909 24,768
Shareholders' Equity:
Common stock 9,597 9,463
Additional paid-in capital 142,083 125,400
Retained earnings 351,745 348,597
Valuation allow. for marketable securities 1,556 -
Foreign currency translation adjustment 1,801 961
Cost of treasury stock (2,191) (3,589)
Total Shareholders' Equity 504,591 480,832
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,167,586 $1,133,182
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
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<TABLE>
THOMAS & BETTS CORPORATION
Consolidated Statement of Earnings
(Thousands of Dollars)
(Unaudited)
<CAPTION>
Quarter Ended
April 3 April 4
1994 1993
<S> <C> <C>
Net sales $282,837 $267,124
Costs and expenses:
Cost of sales 190,729 176,264
Marketing, general and administrative 55,086 55,922
Research and development 6,148 5,727
251,963 237,913
Earnings from operations 30,874 29,211
Other expense - net 9,688 10,325
Earnings before income taxes 21,186 18,886
Income taxes 7,309 5,666
Earnings before cumulative effect of change
in accounting for income taxes 13,877 13,220
Cumulative effect of change in accounting
for income taxes - 1,628
Net earnings $ 13,877 $ 14,848
Per share data:
Earnings before cumulative effect of change
in accounting for income taxes $ .73 $ .70
Cumulative effect of change in accounting
for income taxes - .09
Earnings per share $ .73 $ .79
Dividends declared per share $ .56 $ .56
Average shares outstanding 19,019 18,788
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
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<TABLE>
THOMAS & BETTS CORPORATION
Consolidated Statement of Cash Flows
(Thousands of Dollars)
(Unaudited)
<CAPTION>
Quarter Ended
April 3 April 4
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings $13,877 $ 14,848
Adjustments:
Depreciation and amortization 14,791 14,778
Cumulative effect of change in accounting
for income taxes - (1,628)
Changes in assets and liabilities:
Receivables (3,668) (10,706)
Inventories (5,453) (4,200)
Accounts payable 3,572 11,720
Accrued liabilities (2,231) (11,341)
Other 6,484 4,814
Net cash provided by operating activities 27,372 18,285
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of businesses (1) (2,913) -
Purchases of property, plant and equipment (12,639) (10,376)
Proceeds from sale of property, plant and
equipment 137 702
Marketable securities acquired (82) (13,140)
Proceeds from matured marketable securities 2,973 3,474
Other (1,324) (287)
Net cash used in investing activities (13,848) (19,627)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in borrowings with
original maturities less than 90 days (8,746) 6,164
Proceeds from long-term debt and other
borrowings 16,089 22,433
Repayment of long-term debt and other
borrowings (7,212) (42,312)
Stock options exercised 660 1,325
Cash dividends paid (10,569) (10,507)
Net cash used in financing activities (9,778) (22,897)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 254 1,045
Net increase (decrease) in cash and cash
equivalents 4,000 (23,194)
Cash and cash equivalents at beginning of
period 72,509 41,764
Cash and cash equivalents at end of period $ 76,509 $ 18,570
Cash payments for interest $ 9,124 $ 10,989
Cash payments for taxes $ 2,297 $ 3,566
<FN>
(1) Non-cash transaction: On January 31, 1994, the Corporation
purchased certain assets (primarily inventories and
equipment) from Eaton Corporation in exchange for $16.1
million of Thomas & Betts common stock.
See accompanying notes to consolidated financial statements.
/TABLE
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THOMAS & BETTS CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
1. In the opinion of Management, the accompanying consolidated
financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary for the fair presentation of
the financial position as of April 3, 1994 and January 2, 1994,
and the results of operations and cash flows for the periods
ended April 3, 1994 and April 4, 1993.
2. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these consolidated financial
statements be read in conjunction with the financial statements
and notes thereto included in the Corporation's Annual Report to
Shareholders for the fiscal year ended January 2, 1994. The
results of operations for the period ended April 3, 1994 are not
necessarily indicative of the operating results for the full
year.
3. Earnings per share are computed by dividing net earnings by
the weighted average shares of common stock outstanding during
the reporting period. The effect on earnings per share resulting
from the assumed exercise of outstanding stock options is not
material.
4. Effective January 3, 1994, the Corporation adopted the
provisions of Statement of Financial Accounting Standards No.
112, "Employer's Accounting for Postemployment Benefits".
Statement No. 112 is intended to cover all benefit costs not
covered by other standards, specifically SFAS No. 87 on Pensions
and SFAS No. 106 on Other Postretirement Benefits. The adoption
of SFAS No. 112 had no material impact on the Corporation's
financial position, results of operations, or cash flows since
most provisions of the SFAS had been previously implemented by
the Corporation.
5. Effective January 3, 1994, the Corporation adopted the
provisions of Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity
Securities". This Statement required the Corporation to record
certain of its "available-for-sale" securities on a fair market
value basis rather than on an amortized cost basis. The impact
of this change on the Corporation's April 3, 1994 balance sheet
was to increase marketable securities by $2.4 million, to record
them at fair market value, with an offsetting decrease of $0.8
million to the current deferred income tax asset and an increase
of $1.6 million to shareholders' equity. The cost basis and fair
market value of these available-for-sale securities at April 3,
1994 is (in thousands):
<PAGE>
<TABLE>
<CAPTION>
Amortized Gross Gross Fair
Cost Unrealized Unrealized Market
April 3, 1994 Basis Gains Losses Value
<S> <C> <C> <C> <C>
Equity securities 1,765 732 (52) 2,445
Mortgage-backed
securities 26,921 1,797 (82) 28,636
Total 28,686 2,529 (134) 31,081
</TABLE>
There were no sales of available-for-sale securities during
the quarter.
6. Acquisitions. On January 31, 1994, the Corporation
purchased certain assets at book value (primarily inventories and
equipment) from Eaton Corporation relating to the manufacture,
sale and distribution of circuit breakers, safety switches, and
meter centers in exchange for $16.1 million of Thomas & Betts
common stock. On February 18, 1994, the Corporation purchased
certain assets (primarily inventories and equipment) relating to
the manufacture, sale, and distribution of the Anford Inc.
(Canada) cable tray business for $2.9 million in cash. Both of
these acquisitions were accounted for using the purchase method
of accounting, and therefore, the accompanying financial
statements include the accounts of these businesses since the
dates of acquisition.
<PAGE>
<PAGE>
THOMAS & BETTS CORPORATION
Management's Discussion and Analysis of Results
of Operations and Financial Condition
RESULTS OF OPERATIONS
QUARTERLY COMPARISON
Thomas & Betts Corporation reported higher sales and
operating income for the first quarter of 1994. Sales for the
quarter increased 6% to $282,837,000 compared to $267,124,000 for
the first quarter last year. Earnings were $13,877,000, or $.73
per share compared to last year's $14,848,000 or $.79 per share,
although last year's results included a one-time gain of $.09 per
share due to the adoption of the FASB's change in accounting for
income taxes. First quarter pre-tax earnings in 1994 were 12%
higher than in 1993, but the after-tax profit was down 7% because
of the tax accounting gain last year and an increase in the
corporation's 1994 tax rate, principally due to the tax law
changes enacted in 1993 relating to income earned in Puerto Rico.
The 6 percent increase in sales over the first quarter of
1993 resulted from a 9 percent increase in volume, offset by a 2
percent decline in pricing and a 1 percent decline in foreign
currencies versus the U.S. dollar. One third of the volume gain
compared to last year was attributable to incremental sales from
the January 31 acquisition of a line of circuit breakers, safety
switches and meter centers from Eaton Corporation in the U.S.,
and the February 18 acquisition of the Anford cable tray business
in Canada. Combined annualized sales of the two acquisitions is
expected to be about $50 million.
During the quarter the Electrical Division was divided into
five units. Total sales for these five units rose 9 percent over
last year with good gains in the Electrical Components and
Utility units. Bad weather was the main reason for a double
digit sales decline in the Lighting Division but spurred a strong
sales increase in the Heating/Mechanical/Refrigeration Division
whose primary product is commercial space heaters.
Electronic Division sales were flat with a 1% volume decline
and with a 1% price deterioration offset by a currency gain of
2%.
Sales of Vitramon ceramic chip capacitors increased 8% as a
result of significant volume growth partially offset by price
reductions and weaker European currencies.
European Division sales were off 7% with pricing and
currency offsetting a 4% volume gain.
Consolidated gross margin for the quarter, at 32.6 percent
of sales, was down 1.4 points compared to last year. Lower
pricing in Electronics markets and an unfavorable sales mix in
the U.S. were the primary causes of the margin decline.
Operating expenses for the first quarter were 21.6 percent
of sales compared to 23.1 percent last year due to reduced
general and administrative expenses, primarily as a result of the
centralization of administrative functions into the Memphis
headquarters during the fourth quarter of 1993. Non-operating
expenses decreased $0.6 million from last year due to lower
interest expense. The first quarter effective tax rate was 34.5
percent compared to 30.0 percent last year, the difference due to
the reduction in the Puerto Rico exemption.
LIQUIDITY AND CAPITAL RESOURCES
The Corporation continues to fund its capital and operating
needs with cash flows from operations, augmented by borrowings
available under its revolving credit facility and from other
sources. During the first quarter, cash provided by operating
activities of $27.4 million was used primarily to fund $12.6
million of investments in property, plant and equipment, $2.9
million for the February 18 purchase of the Anford cable tray
business in Canada, and $10.6 million for the first quarter
dividend payment. The January 31 acquisition of the circuit
breakers, safety switches and meter centers business from Eaton
Corporation was financed by the issuance of $16.1 million of
Thomas & Betts common stock.
Total debt (current and long-term) represented 45.6 percent
of total capitalization (shareholders' equity and total debt) at
April 3, 1994, compared to 46.7 percent at January 2, 1994, and
48.9 percent at April 4, 1993. The corporation maintains a
portfolio of marketable securities and cash equivalents in Puerto
Rico, which at April 3, 1994 was valued at $79.7 million compared
to $91.2 million at January 2, 1994, and $79.1 million at April
4, 1993. Although these investments represent currently
available funds, a portion is held to obtain favorable, partially
tax-exempt status on earnings generated in Puerto Rico.
<PAGE>
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PART II. OTHER INFORMATION
THOMAS & BETTS CORPORATION
Item 5. Other Information
<TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
For the
Quarter
Ended For the Years Ended
April 3 Jan 2 December 31
1994 1994 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges(1) 3.5x 3.0x 2.6x 5.0x 5.4x 6.6x
<FN>
(1) The ratio of earnings to fixed charges represents the number of
times fixed charges are covered by earnings. For purposes of
computing this ratio, earnings consist of earnings before income
taxes, plus fixed charges. Fixed charges consist of interest
expense and such portion of rental expense which the Corporation
estimates to be representative of the interest factor attributable
to such rental expense. See Exhibit 12.
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
(12) Computation of Ratio of Earnings to Fixed Charges.<PAGE>
<PAGE>
THOMAS & BETTS CORPORATION
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
THOMAS & BETTS CORPORATION
(Registrant)
DATE: May 17, 1994 /s/ Ronald P. Babcock
Ronald P. Babcock
Vice President-Finance
DATE: May 17, 1994 /s/ James D. Hay
James D. Hay
Vice President-General Counsel
<PAGE>
EXHIBIT 12
<TABLE>
THOMAS & BETTS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
<CAPTION>
Quarter
Ended Year Ended
April 3, Jan. 2 December 31
1994 1994 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Earnings before
income taxes...... $21,186 $78,444 $69,755 $67,988 $74,375 $78,925
Add:
Interest on
indebtedness..... 7,047 30,247 33,405 12,376 12,998 10,240
Amortization of
debt expense..... 130 1,062 2,538 0 0 0
Portion of rents
representative of
the interest factor 1,457 7,193 6,690 3,982 3,971 3,790
Earnings
as adjusted $29,820 $116,946 $112,388 $84,346 $91,344 $92,955
Fixed charges:
Interest on
indebtedness $7,047 $30,247 $33,405 $12,752 $12,998 $10,240
Amortization of
debt expense 130 1,062 2,538 0 0 0
Portion of rents
representative of
the interest
factor 1,457 7,193 6,690 3,982 3,971 3,790
Fixed charges $ 8,634 $38,502 $42,633 $16,734 $16,969 $14,030
Ratio of earnings
to fixed charges 3.5x 3.0x 2.6x 5.0x 5.4x 6.6x
</TABLE>
