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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 30, 1998
(Date of earliest event reported)
THOMAS & BETTS CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee 1-4682
(State or Other Jurisdiction (Commission File Number)
of Incorporation)
22-1326940
(IRS Employer Identification No.)
8155 T&B Boulevard
Memphis, Tennessee 38125
(Address of Principal (ZIP Code)
Executive Offices)
Registrant's Telephone Number, Including Area Code:
(901) 252-5000
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ITEM 5. OTHER EVENTS
On July 30, 1998, Thomas & Betts Corporation (the "Registrant") announced,
by the press release attached as Exhibit 20.1 to this report, and incorporated
herein by reference, its financial results for the fiscal quarter ended July 5,
1998. The registrant also issued a press release, attached as Exhibit 20.2 to
this report, and incorporated herein by reference, announcing a restructuring
charge to be recorded in its third fiscal quarter which includes plant closures
and a reduction in headcount.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
20.1 Press Release of the Registrant dated July 30, 1998.
20.2 Press Release of the Registrant dated July 30, 1998.
2
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Thomas & Betts Corporation
(Registrant)
By: /s/ Jerry Kronenberg
--------------------------------
Jerry Kronenberg
Title: Vice President-General Counsel
and Secretary
Date: July 30, 1998
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description of Exhibits
<S> <C>
20.1 Press Release of Registrant dated July 30, 1998.
20.2 Press Release of Registrant dated July 30, 1998.
</TABLE>
4
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N E W S R E L E A S E Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, TN 38125
(901) 252-5000
Contacts:
Company: Renee Johansen
901-252-5962
Media: Randy Baker
901-527-8000
FOR IMMEDIATE RELEASE
THOMAS & BETTS CORPORATION REPORTS RECORD SECOND QUARTER EARNINGS;
RESTRUCTURING ACTIONS PLANNED FOR SECOND HALF OF 1998
Memphis, Tenn., July 30, 1998 Thomas & Betts Corporation (NYSE:TNB) today
reported record net earnings and earnings per share for the quarter ended
July 5, 1998. Second-quarter 1998 net earnings of $41.5 million rose 3% over
prior-year results. Diluted earnings per share (EPS) for second quarter 1998
were $0.73, an increase of 3% from second quarter 1997 diluted EPS of $0.71.
Earnings for the first six months of 1998 grew 10%, to $78.8 million
from $71.9 million, and diluted EPS increased to $1.38 per share from $1.28
per share, compared with the same period of 1997. Results for all periods
presented here were restated to include the July 2, 1998 acquisition of
Telecommunications Devices, Inc. (TDI), accounted for as a pooling of
interests. Transaction expenses related to that acquisition diluted second
quarter EPS by $0.02. That acquisition had no impact on first half EPS.
Coincident with the earnings announcement, Thomas & Betts also said that
it will begin implementing expense-reduction programs and accelerating plant
relocations to lower-cost regions, resulting in restructuring and other
special charges of approximately $90-$110 million in the third quarter and
project costs over the next six quarters totaling approximately one-third of
the special charges. The company released additional details of its
restructuring plans in a separate press release.
"We want to approach the future conservatively, given the mixed signals
we are receiving from our markets at this time," said Clyde R. Moore,
president and chief executive officer. "Several events that affected our
financial performance in the second quarter have caused us to reconsider our
outlook for the near-term. Those events included: continued downturn in the
electronic connector
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industry, a second wave of the Asian economic crises, weakening of the
Canadian dollar and softness in that economy brought on by low world oil
prices and an Ontario construction worker strike. And while our direct
exposure to the work stoppage at General Motors was limited, we felt the
impact of that situation on the industrial markets that we serve."
"While we don't believe that we're seeing a slowdown in the economy, we
are taking immediate action to reduce our cost structure. We expect to
realize savings from our actions at an annualized rate in excess of $50
million by year-end 1999. Our plan is to use our expertise in restructuring
to bring earnings to our shareholders through margin improvement. These
efforts are meant to enhance our performance independent of what happens in
our markets in near-term," added Moore.
Moore concluded, "At this point, we have a difficult quarter in front of
us and expect our third quarter earnings before the special charges and
project costs to be similar to results of the second quarter 1998 and those
of last year's third quarter."
The deconsolidation of certain lines of automotive business, which were
contributed at year-end 1997 to the Exemplar/Thomas & Betts Electrical
Systems (ET&B) joint venture, reduced reported net sales for the second
quarter. In addition to the deconsolidation, the previously announced,
planned phase-out of a large automotive platform and $6.9 million of foreign
currency shifts negatively impacted second-quarter sales. Adjusting to
exclude the impact of those items, second-quarter sales increased 1% and
six-month sales rose 3% from the respective 1997 periods. Net sales of $553.3
million, reflecting those same three items, were 5% lower than 1997's second
quarter sales of $581.2 million. Through six months, 1998 net sales totaled
$1,098.0 million, 3% below the same period of 1997 due to the events listed
above.
Both gross margin and operating margin improved year over year as a
result of company actions to lower manufacturing costs and reduce overhead
expenses. The second-quarter 1998 gross margin was 30.8%, compared with
1997's 30.5%, and 1998's operating margin rose to 12.5%, versus 11.8% in
1997's quarter.
Thomas & Betts will adopt the provisions of Statement of Financial
Accounting Standard (SFAS) No. 131-"Disclosures about Segments of an
Enterprise and Related Information" at year-end 1998. Implementation of SFAS
No. 131 will not impact the consolidated financial position or results of
operations. Under SFAS No. 131, Thomas & Betts will group its businesses
into segments that are somewhat different from those reported under the
previous accounting standard. To assist users of its financial information,
the company included voluntary
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disclosure of sales for the reportable segments it expects to use under
SFAS No. 131.
Thomas & Betts expects to report on three segments: Electrical, Original
Equipment Manufacturers (OEMs) and Communications. The following discussion
of second-quarter sales describes each proposed reporting segment and its
quarterly sales results.
The new Electrical segment includes sales of a broad package of
electrical connectors, components and accessories--primarily fasteners,
fittings, connectors, boxes and covers, metal framing, grounding and
lighting--to worldwide customers in industrial, commercial, utility, project
and general line markets. Sales of this segment were previously reported
primarily in the Electrical Construction and Maintenance Components segment,
with the exception of sales to utility markets that were previously reported
in the Other Products and Components segment. Sales of this new Electrical
segment grew 4%, to $263.7 million, in the second quarter versus last year's
quarter on account of volume gains in the U.S. and Europe.
The OEM segment manufactures and markets electronic connectors and
components for use in high-speed automotive and professional electronics
applications involving miniaturization, surface-mounts, electro-magnetic
interference and multiplexing. This segment includes the sales of recently
acquired TDI. Sales of this segment were previously reported as part of the
Electronics/OEM Components segment. Second-quarter sales of the new OEM
segment were 1% lower than the 1997 period if results are adjusted for sales
of certain lines of business contributed to the ET&B joint venture, sales
related to the phased-out automotive platform and unfavorable currency
shifts. On a reported basis, second-quarter segment sales were $159.1
million, 17% lower year over year. Sales in the quarter were hurt by weak
demand from U.S. computer manufacturers, lower prices on connectors sold to
computer manufacturers worldwide, automotive platform delays and model
changeovers and the GM work stoppage.
The Communications segment manufactures and sells a package of drop-line
hardware, connectors, fasteners, fiber optics, grounding and accessories for
use in cable television, telecommunications and data communications network
applications. Under the previous reporting structure, sales to cable
television and data communications markets were included in the
Electronics/OEM Components segment, and sales to telecommunications customers
were accounted for in the Other Products and Components segment. Sales of
the Communications segment were
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$69.6 million, 6% below strong prior-year levels, due to lower sales of
broadband and cable- hardware products to cable TV system operators worldwide.
Some of the company's sales cannot be classified in the aforementioned
segments. These are primarily sales of steel structures for electrical
transmission and distribution, power generation and telecommunications
applications and mechanical products, primarily heating units, for heating
and ventilation applications. These sales were previously included in the
Other Products and Components segment. Other sales in the second quarter
totaled $60.9 million, 1% above 1997's level, helped by higher sales of unit
heaters in Europe.
Using the previous segment classifications employed by Thomas & Betts
sales of the Electrical Construction and Maintenance Components increased 2%
and 6% year over year in the second quarter and first half, respectively.
Sales of the Other Products and Components segment were 5% higher in the
quarter, but flat on a year-to-date basis, compared with the same 1997
periods. Electronics/OEM Components segment sales decreased 16% and 11% in
the quarter and first six months, versus the respective prior-year periods.
Thomas & Betts is a leading producer of connectors and components for
worldwide electrical and electronics markets. Visit Thomas & Betts on the
World Wide Web at www.tnb.com.
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<TABLE>
<CAPTION>
THOMAS & BETTS CORPORATION
Consolidated Statement of Earnings
(In thousands except per share amounts)
Quarter Ended Six Months Ended
----------------- --------------------
July 5, June 29, July 5, June 29,
1998 1997 1998 1997
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $553,318 $581,153 $1,097,974 $1,130,440
Costs and expenses:
Cost of sales 382,682 404,133 763,996 791,488
Marketing, general
and administrative 85,096 89,775 173,208 179,478
Research and development 12,060 14,588 24,827 27,133
Amortization of intangibles 4,115 4,205 8,497 8,621
-------- -------- ---------- ----------
Total expenses 483,953 512,701 970,528 1,006,720
Earnings from operations 69,365 68,452 127,446 123,720
Income from unconsolidated
companies 6,125 3,158 14,652 6,365
Other expense-net (16,605) (12,492) (29,461) (24,253)
-------- -------- ---------- ----------
Earnings before income
taxes 58,885 59,118 112,637 105,832
Income taxes 17,342 18,919 33,791 33,937
-------- -------- ---------- ----------
Net earnings $ 41,543 $ 40,199 $ 78,846 $ 71,895
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Net earnings per share
Basic $ 0.73 $ 0.72 $ 1.39 $ 1.29
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Diluted $ 0.73 $ 0.71 $ 1.38 $ 1.28
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Average shares outstanding
Basic 56,709 56,159 56,615 55,943
Diluted 57,191 56,516 57,091 56,270
Note: Amounts have been restated to include the July 2, 1998 acquisition of
Telecommunications Devices, Inc., accounted for as a pooling of interests.
</TABLE>
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<TABLE>
<CAPTION>
THOMAS & BETTS CORPORATION
Consolidated Balance Sheet
(In thousands)
July 5, December 28,
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
Cash and marketable securities $ 87,415 $ 97,607
Receivables - net 375,917 293,722
Inventories 436,324 402,601
Deferred income taxes 35,419 43,452
Prepaid expenses 12,289 9,090
---------- ----------
Total current assets 947,364 846,472
Property, plant and equipment - net 601,389 574,052
Intangible assets - net 558,556 506,225
Investments in unconsolidated
companies 132,520 127,706
Other assets 42,406 39,833
---------- ----------
TOTAL ASSETS $2,282,235 $2,094,288
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings and current
maturities of long-term debt $ 40,204 $ 42,639
Accounts payable 222,872 226,542
Accrued liabilities 133,219 142,974
Income taxes 36,456 45,678
Dividends payable - 15,401
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Total current liabilities 432,751 473,234
Long-term debt 692,284 503,077
Other long-term liabilities 89,051 92,206
Deferred income taxes 24,389 26,467
Shareholders' equity 1,043,760 999,304
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,282,235 $2,094,288
---------- ----------
---------- ----------
Note: 1997 amounts have been restated to include the July 2, 1998
acquisition of Telecommunications Devices, Inc., accounted for as
a pooling of interests.
</TABLE>
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<TABLE>
<CAPTION>
THOMAS & BETTS CORPORATION
Business Segment Performance
(In thousands)
Quarter ended
---------------------------
July 5,1998 June 29, 1997 Change
----------- ------------- ------
<S> <C> <C> <C>
Net Sales:
Electrical $263,693 $254,443 4%
OEM 159,095 192,571 (17)%
Communications 69,643 73,708 (6)%
Other 60,887 60,431 1%
----------- ------------- ------
Total $553,318 $581,153 (5)%
Six months ended
---------------------------
July 5,1998 June 29, 1997 Change
----------- ------------- ------
Net Sales:
Electrical $ 513,883 $ 483,319 6%
OEM 331,798 380,440 (13)%
Communications 138,125 143,768 (4)%
Other 114,168 122,913 (7)%
----------- ------------- ------
Total $1,097.974 $1,130,440 (3)%
Note: Amounts have been restated to include the July 2, 1998
acquisition of Telecommunications Devices, Inc., accounted for as
a pooling of interests.
</TABLE>
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N E W S R E L E A S E THOMAS & BETTS CORPORATION
8155 T&B Boulevard
Memphis, TN 38125
(901) 252-5000
Contacts:
Company: Renee Johansen
901-252-5962
Media: Randy Baker
901-527-8000
FOR IMMEDIATE RELEASE
THOMAS & BETTS ANNOUNCES RESTRUCTURING ACTIONS
Memphis, Tenn., July 30, 1998 Thomas & Betts Corporation (NYSE:TNB)
today announced that it will begin implementing expense reduction programs
and accelerating plant and product line relocations to lower-cost regions,
resulting in restructuring and special charges of $90-$110 million in the
third quarter of 1998.
"We are getting mixed signals from our markets at this point in time and
want to approach the future conservatively," said Clyde R. Moore, president
and chief executive officer. "We are taking immediate action to reduce our
cost structure. We expect to realize savings from our actions at an
annualized rate in excess of $50 million by year-end 1999. Our plan is to
use our expertise in restructuring to bring earnings to our shareholders
through margin improvement. These efforts are meant to enhance our
performance independent of what happens in our markets in the near term,"
concluded Moore.
As part of its plans, the company will close several plants, moving
production from those facilities to existing Thomas & Betts plants. Plants to
be closed include those in Cleveland, Ohio; Tempe, Ariz.; Tulsa, Okla.; and
Windsor, Ont. Announcements were made at those locations today and the
company expects to complete those consolidations by year-end 1998.
Additionally, Thomas & Betts will relocate selected product lines. The
company plans to move product lines at this time from its facilities in
- more -
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Bainbridge, Ga.; Lisle, Ill.; and Sanford, Me. Relocation of certain product
lines at the company's Athens, Tenn., plant are also contemplated, subject,
where required, to discussions with the union there.
The company will also immediately begin implementing expense reduction
plans in its sales and marketing and administrative functions. Early
retirement programs, decreased use of temporary employees and other personnel
reductions are expected to lower salary expense by over 10% in those areas.
Thomas & Betts is a leading producer of connectors and components for
worldwide electrical and electronics markets. Visit Thomas & Betts on the
World Wide Web at www.tnb.com.
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