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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: December 14, 1999
(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) 252-8000
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ITEM 5. OTHER EVENTS
On December 14, 1999, Thomas & Betts Corporation (the "Registrant")
announced in the press release attached as Exhibit 20 to this report and
incorporated herein by reference that it estimates its fourth-quarter
earnings per share could be as much as 40% below the current First Call
consensus earnings expectation of $0.97. Thomas & Betts believes that a
conservative estimate of its fourth-quarter 1999 net sales, given the unusual
factors described in the press release, is approximately $640 million. In
1998's fourth quarter the Registrant reported net sales of $592 million.
As described in the press release, the TOPS order entry conversion
issues and additional costs identified in an accelerated year-end accounting
close process are expected to impact the Registrant's business segments
differently. The Registrant's Electrical segment, which ships the vast
majority of its sales through the Registrant's distribution centers, will be
more heavily impacted by the TOPS conversion than the accelerated-close
issues. The Registrant expects that its Electronic OEM and Communications
segments will be more heavily impacted by the accelerated-close issues than
the TOPS conversion.
An effect of the TOPS conversion is higher-than-normal backlog of
shipments of approximately $50 million, which the Registrant is seeking to
eliminate in the fourth quarter. The Registrant expects any backlog existing
at the end of its fiscal year will ship in the first quarter of 2000. The
remainder of the TOPS impact is expected to result from cancelled orders and
freight expediting and other associated costs.
Within this conservative forecast of its fourth quarter, the
Registrant projects Electrical segment earnings at approximately $44 million
and Electronic OEM and Communications segment earnings at approximately $16
million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
20 Press Release of the Registrant dated December 14, 1999.
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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: December 14, 1999
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EXHIBIT INDEX
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EXHIBIT DESCRIPTION OF EXHIBITS
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20 Press Release of the Registrant dated December 14, 1999.
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Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, Tennessee 38125
Contact: Renee Johansen
(901) 252-5466
FOR IMMEDIATE RELEASE
Thomas & Betts Comments on Fourth Quarter
MEMPHIS, Tenn. - December 14, 1999 Thomas & Betts Corporation (NYSE:TNB)
today announced that its fourth quarter earnings per share (EPS) could be as
much as 40% below the current First Call consensus earnings expectation of
$0.97. That estimate is preliminary as the company records it highest sales of
the quarter in December, and also hopes to recover some of the current
shortfall before yearend. The unusual factors impacting the fourth-quarter
results are:
(1) On November 1, 1999, Thomas & Betts installed the final building block of
its business-to-business (B2B) E-commerce strategy, a world-wide web-enabled
order processing system (TOPS). Difficulties experienced in the start-up of
that new system have caused shipping delays, order cancellations and freight
expediting and other associated costs. The company estimates that as much as
two-thirds of its earnings shortfall will be related to the TOPS
implementation.
Despite the effect of delayed and cancelled sales, the company expects
its growth in orders to fall in line with analysts' expectations. In
commenting on recent business trends, the company said the orders for the
three months ended November 1999 were 15% higher than the year-earlier period
overall, including the impact of late 1998 and 1999 acquisitions, and 8%
greater without the impact of acquisitions and divestitures. Orders of the
company's Electrical segment in that same period were 32% higher with
acquisitions and increased 8% on a pre-acquisition basis. Orders of the
Electronic OEM segment rose 8%, while Communications segment orders decreased
24%, due to the sale of the company's cable-television amplifier
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product lines. The latter two segments had no acquisitions within the last
year.
(2) As part of an accelerated year-end accounting close process to validate
account balances, the company identified additional costs, such as
unanticipated inventory losses, that it is recognizing in the current
quarter's results. Identification of those issues was also accelerated by use
of the company's new financial reporting system, which is now being utilized
by decentralized financial management for better control of smaller, more
manageable portions of the company's business.
"While we are disappointed by the short-term impact of our systems'
conversions, we are more convinced than ever in the correctness of our
long-term vision for our company's future in the E-Commerce world," commented
Clyde R. Moore, president and chief executive officer. "Our thoughts on
E-Commerce have been confirmed in numerous discussions, including those with
Grainger and General Electric."
"We have spent the past three years converting all of our corporate
systems to enable us to lead our industry in E-commerce. The undertaking was
immense, but timing was critical as the Internet is changing the business
model at so fast a pace. Our business has gone through a radical
transformation for an industrial company and this has not been an easy
process. While our numerous conversions have caused some short-term
disruption to our business, we believe our investments in these business
systems will allow us to reward our shareholders in the future. Our analysis
indicates that these conversion issues and their impact on our earnings are
one-time in nature, and we have no reason to alter our previously budgeted
2000 earnings projection. At this time we still expect to deliver on the
current First Call consensus earnings expectation for 2000 of $3.67," concluded
Moore.
Thomas & Betts plans to release fourth quarter results on February 4,
2000. In 1998's fourth quarter, Thomas & Betts had EPS of $0.81.
Thomas & Betts will host a conference call Tuesday evening, December 14, at
7:15 EDT to discuss these comments. Interested parties should call
212-346-6380, reservation number 13862952 prior to that time to participate.
The replay number is 800-633-8284, reservation number, 13862952 available
until Thursday, December 16, 1999 at 7:00 p.m. EST.
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Forward-looking statements in this news release are subject to many
uncertainties in the company's operations and business environments. Such
uncertainties, which are discussed further in the company's quarterly filings
with the Securities and Exchange Commission, may cause the actual results of
the company to be materially different from any future results expressed or
implied by such forward-looking statements.
Thomas & Betts is a leading producer of connectors and components for
worldwide electrical and electronic markets. Visit Thomas & Betts on the
World Wide Web at www.tnb.com.
