<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 2, 1995
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 19,633,867
(Title of each class) (Outstanding at April 30, 1995)
<PAGE>
THOMAS
& BETTS CORPORATION
INDEX
Page
PART I. Financial Information:
Consolidated Balance Sheet -
April 2, 1995 and January 1, 1995 3
Consolidated Statement of Earnings
- Quarters Ended April 2,1995
and April 3, 1994 4
Consolidated Statement of Cash
Flows - Quarters Ended April 2,
1995 and April 3, 1994 5
Notes to Consolidated Financial
Statements 6
Management's Discussion and
Analysis of Results of
Operations and Financial
Condition 7
PART II. Other Information 10
Signatures 11
<PAGE>
PART I. FINANCIAL INFORMATION
THOMAS & BETTS CORPORATION
Consolidated Balance Sheet
(Thousands of Dollars)
<TABLE>
<CAPTION>
April 2, January 1,
1995 1995
(Unaudited)
(Audited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 40,669 $ 69,671
Marketable securities 64,739 52,569
Receivables, net 181,009 168,077
Inventories:
Finished goods 105,309 96,159
Work in process 30,186 33,663
Raw materials 88,716 68,600
224,211 198,422
Deferred income taxes 35,307 40,059
Prepaid expenses 6,388 5,195
Total Current Assets 552,323 533,993
Property, plant, and equipment, at cost 566,864 547,099
Less accumulated depreciation 281,640 271,574
Net property, plant and equipment 285,224 275,525
Intangible assets - net 320,921 323,228
Investments and other assets 75,513 75,466
TOTAL ASSETS $1,233,981 $1,208,212
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term bank borrowings $ 17,399 $ 15,355
Current maturities of long-term debt 2,689 3,304
Accounts payable 117,976 118,052
Accrued liabilities 105,900 116,875
Income taxes 16,507 15,779
Dividends payable 10,994 10,979
Total Current Liabilities 271,465 280,344
Long-term debt 341,993 319,519
Other long-term liabilities 40,979 40,408
Deferred income taxes 16,488 14,898
Shareholders' Equity:
Common stock 9,827 9,822
Additional paid-in capital 169,745 169,291
Retained earnings 378,692 373,011
Unrealized gain on marketable securities 1,188 867
Foreign currency translation adjustment 4,970 2,661
Cost of treasury stock (1,366) (2,609)
Total Shareholders' Equity 563,056 553,043
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 1,233,981 $1,208,212
<FN>
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
THOMAS
& BETTS CORPORATION
Consolidated Statement of Earnings
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
April 2, April 3,
1995 1994
<S> <C> <C>
Net sales $302,595 $248,262
Costs and expenses:
Cost of sales 202,000 166,986
Marketing, general and administrative 62,678 51,219
Research and development 5,484 5,056
Amortization of intangibles 2,478 2,913
272,640 226,174
Earnings from operations 29,955 22,088
Other expense - net 5,056 6,791
Earnings from continuing operations before income taxes 24,899 15,297
Income taxes 8,224 5,033
Earnings from continuing operations 16,675 10,264
Earnings from discontinued operations net of income
tax expense of $2,276 in 1994 - 3,613
Net earnings $ 16,675 $ 13,877
Per share data:
Earnings from continuing operations $ .85 $ .54
Earnings from discontinued operations - .19
Earnings per share $ .85 $ .73
Dividends declared per share $ .56 $ .56
Average shares outstanding 19,619 19,019
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
THOMAS & BETTS CORPORATION
Consolidated Statement of Cash Flows
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
April 2, April 3,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings from continuing operations $ 16,675 $ 10,264
Adjustments:
Depreciation and amortization 13,749 12,514
Deferred income taxes 6,387 1,131
Changes in operating assets
and liabilities:
Receivables (14,425) (513)
Inventories (21,318) (6,783)
Accounts payable (42) 2,193
Accrued liabilities (11,947) (3,129)
Income taxes payable 728 5,347
Cash from discontinued operations - 6,346
Other (75) 2
Net cash provided by (used in) operating activities (10,268) 27,372
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of businesses (3,452) (2,913)
Purchases of property, plant and equipment (19,184) (8,992)
Net investments in discontinued operations - (3,638)
Proceeds from sale of property, plant and
equipment 2,382 128
Marketable securities acquired (12,482) (82)
Proceeds from matured marketable securities 1,865 2,973
Other 1,147 (1,324)
Net cash provided by (used in) investing activities (29,724) (13,848)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in borrowings with
original maturities less than 90 days 16,812 (8,746)
Proceeds from long-term debt and other
borrowings 4,221 16,089
Repayment of long-term debt and other
borrowings (1,556) (7,212)
Stock options exercised 350 660
Cash dividends paid (10,979) (10,569)
Net cash provided by (used in) financing activities 8,848 (9,778)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 2,142 254
Net increase (decrease) in cash and cash
equivalents (29,002) 4,000
Cash and cash equivalents at beginning of
period 69,671 72,509
Cash and cash equivalents at end of period $40,669 $76,509
Cash payments for interest $ 9,187 $ 9,124
Cash payments for taxes $ 843 $ 2,297
Common stock issued for acquisitions $ - $ 16,100
</TABLE>
<PAGE>
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 2,1995, and January 1,
1995, and the results of operations and cash flows for the periods
ended April 2, 1995, and April 3, 1994.
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 1, 1995. The results of operations for
the period ended April 2, 1995, 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. Acquisition: On February 6, 1995, the Corporation purchased
certain assets (primarily inventories and equipment) relating to
the manufacture, sale, and distribution of the Anchor Electric
meter center business for $3.5 million in cash. This acquisition
was accounted for using the purchase method of accounting, and
therefore, the accompanying financial statements include the
accounts of this business since the date of acquisition.
<PAGE>
THOMAS & BETTS CORPORATION
Management's Discussion and Analysis of Results
of Operations and Financial Condition
RESULTS OF OPERATIONS
QUARTERLY COMPARISON
Thomas & Betts Corporation had record sales and higher
earnings for the first quarter of 1995.
Sales from continuing operations increased 22 percent to
$302,595,000 from $248,262,000 in the first quarter of 1994.
Earnings from continuing operations rose 62 percent to $16,675,000
from $10,264,000 and to $.85 per share from $.54. Net earnings of
$16,675,000 increased 20 percent from $13,877,000 in the first
quarter of 1994 and earnings per share rose to $.85 from $.73.
All three segments of the business experienced growth. Recent
acquisitions contributed to the sales and earnings growth, and the
Corporation outperformed its markets in some important sectors.
Worldwide sales of Electrical Construction Components were up
30 percent, with almost half of the increase coming from product
lines acquired since early 1994. Earnings from operations for this
segment, before recruiting and training charges of $2.6 million
related to restructuring, increased in line with sales. The strong
performance of this segment, which represents approximately half of
the Corporation s sales, was due largely to revenue gains in North
America.
Worldwide Electronic/OEM Components sales increased 18 percent
while earnings increased more significantly, with a strong
contribution from the European operations and double-digit
increases in both North America and the Pacific Region. This
segment accounts for approximately one fourth of the Corporation's
sales.
The Other Products and Components segment, serving utility,
heating and telecommunication markets, had sales growth of 13
percent with a corresponding increase in earnings, due to
especially good revenue growth from heating/mechanical/refrigeration
products. This segment represents approximately one fourth of the
Corporation' s sales.
On a consolidated basis, the 22% increase in sales from
continuing operations was due to a 14% volume increase, 1% price
increase, 1% currency gain and 6% from acquisitions.
Consolidated gross margin for the first quarter of 33.2% improved
from last year s 32.7% due to manufacturing cost reductions in
Mexico, better sales mix and improved European manufacturing costs,
partially offset by the recruiting and training costs noted above.
Marketing, General, and Administrative expenses, at 20.7% of
sales, were similar to last year s 20.6% of sales. Lower
general and administrative expenses partially offset higher shipping and
warehousing costs.
Other expenses-net were $1.7 million favorable to last year with
the Corporation s earnings from the minority ownership in Leviton
Manufacturing Co., Inc., accounted for on the equity basis
of accounting, and lower net interest expense, more than offsetting
an increase in currency and other costs.
The effective tax rate of 33.0% on continuing operations is similar to
last year' s 32.9%.
The prior year earnings from discontinued operations reflect
the earnings from the Corporation s former Vitramon division which
was sold in July 1994.
LIQUIDITY AND CAPITAL RESOURCES
In March 1995, the Corporation renegotiated and increased its
revolving term credit facility to $500 million from $280 million.
This revised facility makes funds available for a term of five
years from the renegotiation date. The Corporation has the option,
at the time of drawing funds under the facility, of selecting an
interest rate based on a number of benchmarks including LIBOR, the
certificate of deposit rate and the prime rate of Morgan Guaranty
Trust Company. This credit facility includes covenants, among
which are limitations on the amount of future indebtedness and the
maintenance of certain financial ratios. Dividends are permitted
to continue at the current rate. They may be increased, provided
the dividend payout does not exceed 50 percent of earnings.
The Corporation continues and believes it will continue 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. Total debt represented 39
percent of total capitalization (shareholders equity and total
debt) at April 2, 1995, up from 38 percent at January 1, 1995, and
down from 46 percent at April 3, 1994.
Net cash flow from operating activities for the first quarter of 1995 was
a negative $10 million, as earnings from continuing operations, adjusted for
non-cash charges, of $37 million were offset by working capital needs.
These needs were large in the first quarter due to, among other things,
increased investment required by increasing sales and geographic mix of
sales, expenditures and inventory build relating to ongoing
activities, timing and amount of volume and performance related
incentives, and working capital from the acquisition of the Anchor
Electric meter center business.
Capital spending for the quarter was $19.2 million, reflecting
expenditures related to restructuring projects, capital investments
for new products and expenditures for manufacturing and service
improvements.
Activities related to the $79 million restructuring charge
taken in 1994 are proceeding as anticipated except for those
relating to Mexico where uncertainties related to the peso
devaluation are causing some delay. During the first quarter, the
Corporation incurred $5 million of cash charges, principally
severance, and $3 million of non-cash charges, principally for
disposal of assets. Total charges applied to the restructuring
reserve to date are $28 million, $9 million of cash spending and
$19 million of non-cash principally for asset disposals.
Approximately $30 million of reserves remain to cover restructuring
activities of which $13 million for environmental clean up and
carrying costs for closed facilities is expected to be spent after
1995. Approximately $21 million of reserves remain to cover the
impairment of carrying values of plant, equipment, and inventory
which will no longer be used and which relate to facilities to be
closed or realigned and products to be discontinued. These
reserves currently are believed to be adequate and not excessive
for the purposes for which they have been established.
<PAGE>
PART
II. OTHER INFORMATION
THOMAS & BETTS CORPORATION
Item 5.
Other Information
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
For the
Quarter
Ended For the Years Ended
April 2, Jan. 1, Jan. 2, December 31
1995 1995 1994 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges(1) 3.7x .96x 2.6x 2.2x 4.3x 4.3x
<FN>
(1)
The ratio of earnings to fixed charges represents the number of
times fixed charges are covered by earnings from continuing
operations. For purposes of computing this ratio, earnings
consist of earnings from continuing operations before
income taxes, plus fixed charges less capitalized interest and less
undistributed earnings from less than 50 percent owned persons.
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.
(b) Reports on Form 8-K
Form 8-K, dated February 2, 1995, relating to the election of
Kenneth R. Masterson to Thomas & Betts Corporation s Board of
Directors.
<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, 1995 /s/ Ronald P. Babcock
Ronald P. Babcock
Vice President-Finance and Treasurer
DATE: May 17, 1995 /s/ Jerry Kronenberg
Jerry Kronenberg
Vice President-General Counsel
<PAGE>
EXHIBIT
12
THOMAS & BETTS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of
Dollars)
<TABLE>
<CAPTION>
Quarter
Ended
April 2, Jan. 1, Jan. 2, Year Ended December 31
1995 1995 1994 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Earnings from
continuing operations
before income taxes $24,899 $ 494 $59,942 $52,983 $55,465 $56,122
Add:
Interest on
indebtedness 6,633 26,852 30,247 33,405 12,752 12,998
Amortization of
debt expense 312 1,133 1,062 2,538 - -
Portion of rents
representative of
the interest factor 1,851 7,377 7,011 6,515 3,816 3,826
Deduct:
Interest capitalized
during the period - - - - (376) -
Undistributed earnings
from less than 50
percent owned persons (980) (1,863) - - - -
Earnings as adjusted $32,715 $33,993 $98,262 $95,441 $71,657 $72,946
Fixed charges:
Interest on
indebtedness 6,633 26,852 30,247 33,405 12,752 12,998
Amortization of
debt expense 312 1,133 1,062 2,538 - -
Portion of rents
representative of
the interest factor 1,851 7,377 7,011 6,515 3,816 3,826
Total fixed charges $ 8,796 $35,362 $38,320 $42,458 $16,568 $16,824
Ratio of earnings
to fixed charges 3.7x .96x 2.6x 2.2x 4.3x 4.3x
<FN>
The ratio for the year ended January 1, 1995, was .96x, inadequate to
cover fixed charges by $1,369. This is due to a provision for
restructured operations of $79,011 provided in the third quarter.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-1995
<PERIOD-END> APR-03-1995
<CASH> 40669
<SECURITIES> 64739
<RECEIVABLES> 195449
<ALLOWANCES> (14440)
<INVENTORY> 224211
<CURRENT-ASSETS> 552323
<PP&E> 566864
<DEPRECIATION> (281640)
<TOTAL-ASSETS> 1233981
<CURRENT-LIABILITIES> 271465
<BONDS> 341993
0
0
<COMMON> 9827
<OTHER-SE> 553229
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<SALES> 302595
<TOTAL-REVENUES> 302595
<CGS> 202000
<TOTAL-COSTS> 70640
<OTHER-EXPENSES> 1577
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<INTEREST-EXPENSE> (6633)
<INCOME-PRETAX> 24899
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<NET-INCOME> 16675
<EPS-PRIMARY> 0.85
<EPS-DILUTED> 0.85
</TABLE>
