<PAGE>
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: February 5, 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
<PAGE>
ITEM 5. OTHER EVENTS
On February 5, 1999, Thomas & Betts Corporation (the "Registrant")
announced, by the press release attached as Exhibit 20 to this report, and
incorporated herein by reference, its financial results for the fiscal year
ended January 3, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits 12, 23.1 and 23.2 are being filed in connection with, and
incorporated by reference in, the Registrant's Registration Statement on Form
S-3, No. 333-61465, which was declared effective on August 14, 1998.
<TABLE>
<CAPTION>
<S> <C> <C>
(c) Exhibits
12 Ratio of Earnings to Fixed Charges.
20 Press Release of the Registrant dated February 5, 1999.
23 Consent of Deloitte & Touche LLP, independent public accountants.
</TABLE>
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/ Fred R. Jones
--------------------------------------
Fred R. Jones
Vice President-Chief Financial Officer
Date: February 5, 1999
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
Exhibit Description of Exhibits
------- -----------------------
12 Ratio of Earnings to Fixed Charges.
20 Press Release of the Registrant dated February 5, 1999.
23 Consent of Deloitte & Touche LLP, independent public accountants
</TABLE>
4
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<TABLE>
<CAPTION>
Fiscal year 1998 1997 1996 1995 1994
Ended 1/3/99 12/28/97 12/29/96 12/31/95 1/1/95
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings from continuing operations before income taxes 124,908 233,507 106,395 148,365 54,576
Add:
Interest on indebtedness 50,958 51,431 50,131 32,625 31,252
Amortization of debt expense 177 610 1,335 1,496 1,373
Portion of rents representative of the interest factor 10,835 11,796 11,585 10,935 9,906
Deduct:
Interest capitalized and undistributed earnings
from less than 50% owned companies (12,701) (10,380) (5,259) (2,848) (1,863)
-------------------------------------------------------
Earnings as adjusted 174,177 286,964 164,187 190,573 95,244
-------------------------------------------------------
-------------------------------------------------------
Fixed charges:
Interest on indebtedness 50,958 51,431 50,131 32,625 31,252
Amortization of debt expense 177 610 1,335 1,496 1,373
Portion of rents representative of the interest factor 10,835 11,796 11,585 10,935 9,906
-------------------------------------------------------
Total fixed charges 61,970 63,837 63,051 45,056 42,531
-------------------------------------------------------
-------------------------------------------------------
Ratio of earnings to fixed charges 2.8 4.5 2.6 4.2 2.2
</TABLE>
<PAGE>
THOMAS & BETTS CORPORATION
8155 T&B Boulevard
Memphis, TN 38125
NEWS (901) 252-5962
[THOMAS & BETTS LOGO]
Contact:
Renee Johansen
901-252-5962
FOR IMMEDIATE RELEASE
THOMAS & BETTS REPORTS FOURTH-QUARTER RESULTS
MEMPHIS, Tennessee, February 5, 1999 -- Thomas & Betts Corporation
(NYSE: TNB) today reported financial results for the quarter ended
January 3, 1999. For its fourth quarter, the company reported net earnings of
$46.1 million compared with $48.2 million in the same period of 1997.
Diluted earnings per share (EPS) were $0.81 versus the $0.85 recorded in
1997's quarter, the company's highest-ever quarterly earnings per share.
"Our results for the quarter met our expectations and include the positive
results of several strategic initiatives," said Clyde R. Moore, president and
chief executive officer. "While we are disappointed to be reporting a down
quarter, we faced a difficult prior-year comparison as well as slower economic
and electronic industry conditions than in 1997."
"We finished 1998 with $20.3 million of sales of products based on our
innovative MPI technology. Our accelerated cost-reduction program begun in late
summer 1998 is on target to capture $26 million of savings for us in 1999. We
capped off the year with the November acquisition of Kaufel Group, Ltd., a
Canadian-based manufacturer that more than doubles our lighting offering to our
industrial and commercial electrical customers and increases our Canadian and
European electrical offerings," continued Moore.
"We look forward to reporting further progress on our key initiatives of a
lower cost structure, additional product breadth in our Electrical offering,
continued development of new product technologies in our Electronic OEM segment
and further international expansion in 1999. Already in 1999 we completed our
acquisition of Ocal and announced a proposed merger with AFC
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Cable Systems Inc., which is pending shareholder and regulatory approvals,"
continued Moore.
"We expect the progress on our key initiatives to translate into
significant earnings growth in 1999, but we expect to see a larger share of our
growth in the second half of the year," concluded Moore.
In the absence of special charges, Thomas & Betts had record net earnings
in 1998 of $164.5 million, or $2.89 per share, versus its 1997 performance of
$162.3 million, or $2.87 per share. The company recorded pretax special charges
of $108.5 million in the third quarter for closing and consolidating several
facilities, terminating employees at those locations, downsizing administrative
functions and writing down idle facilities. That charge had a negative after-tax
impact of $77.0 million, or $1.35 per share, on 1998 net earnings. Including the
special charge provision, the company had net earnings of $87.5 million, or
$1.54 per share on a diluted basis, in 1998.
In 1998, Thomas & Betts also incurred $6.2 million of project expenses
to begin implementing its cost-reduction plans. Actions implemented last year
netted Thomas & Betts $7.2 million of savings in the year. The company
expects to complete its cost-reduction projects by year-end 1999, and
anticipates a net pretax benefit from the cost reduction program in 1999 of
$26 million. The cost reduction actions are aimed at reducing manufacturing
and administrative costs primarily by consolidating operations and relocating
production lines to lower-cost facilities.
Fourth-quarter net sales rose 3.0% to $592.4 million from 1997's $575.1
million. Kaufel's contributions to the quarter were offset by the
deconsolidation of certain lines of automotive business contributed at year-end
1997 to the Exemplar/Thomas & Betts Electrical Systems joint venture (JV) that
reduced reported net sales for the quarter, and by foreign currency shifts that
also lowered fourth-quarter sales in U.S. dollar terms. For the full-year 1998,
the JV deconsolidation, negative foreign currency shifts and a previously
announced, planned phase-out of a large automotive platform reduced reported net
sales by $120.0 million in total. If full-year sales are adjusted for those
exceptions, Thomas & Betts' sales would have increased 4.2%. Reported 1998
sales were $2,230.4 million.
Sales of the Electrical segment increased 21.0% to $303.4 million for the
quarter and segment's earnings rose 11.8% to $49.6 million. Sales of
acquisitions, together with solid demand in construction, utility and industrial
end markets accounted for the segment's growth. The late-1998
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closing of the Kaufel transaction and higher growth in sales to commercial
customers versus industrial markets caused the segment's earnings to increase
at a lesser rate than sales. For full-year 1998, Electrical sales rose 9.8%
and segment earnings grew 8.0% compared with 1997.
Fourth-quarter sales of the Electronic OEM segment were 9.9% lower than
the 1997 period if results are adjusted to exclude sales contributed to the
ET&B joint venture. Fourth-quarter segment earnings decreased 7.2%, to $18.4
million, year over year. Manufacturer and distributor inventory adjustments
continued to hold down industry demand in the quarter, and the segment also
saw moderate price declines in commodity products. Higher volumes of TDI
mobile communications battery pack products and significant sales of the
company's new MPI microprocessor interconnect offset some of the decline and
contributed to the improved margin of the segment. On a reported basis,
fourth-quarter Electronic OEM sales were $157.2 million, 19.2% below 1997's
level. Through twelve months of 1998, Electronic OEM sales were 1.9% lower
than the prior year if adjusted to exclude the JV deconsolidation, negative
foreign currency shifts and a previously announced, planned phase-out of a
large automotive platform, and 15.4% lower than the year-earlier period as
reported. Electronic OEM 1998 segment earnings declined 5.6% from 1997's
level.
Fourth-quarter sales of the Communications segment rose 1.8% to $59.6
million from 1997's levels, as solid increases in shipments of cable television
(CATV) and data communications products continued, due to the contribution of
sales under long-term contracts. Fourth-quarter segment earnings of $1.5
million was 83.1% lower than the prior-year period due to a shift in product mix
and start-up costs associated with a three-year contract to supply CATV
amplifiers to a major CATV system operator. In 1998, Communications segment
sales remained about even with 1997 segment sales, and full-year segment
earnings declined 26.5%.
Other sales in the fourth quarter totaled $72.2 million, 1.5% above 1997's
level, as significantly higher sales of steel structures for utility
transmission line projects and wind-generation installations offset lower
volumes of heating products year over year. Earnings on other sales increased
36.5% to $10.6 million, due to enhancements in manufacturing processes. For the
full-year, other sales declined 3.1% while earnings rose 14.9%.
The consolidated gross margin declined year over year due to extra
expenses in the 1998 period related to implementing the company's cost-
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reduction efforts, as well as to a shift in the mix of product sold in
each period. The fourth-quarter 1998 gross margin was 30.9%, compared with
1997's 32.0%. Marketing, general and administrative expenses were a lower
percentage of sales in 1998 than in the year-ago period, thus lessening the
impact of the lower gross margin on operating margin.
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
Forward-looking statements in this news release are subject to many
uncertainties in the company's operations and business environment. 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.
# # # #
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THOMAS & BETTS CORPORATION
Consolidated Statement of Earnings
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Twelve Months Ended
------------------ ---------------------
Jan 3, Dec 28, Jan 3, Dec 28,
1999 1997 1999 1997
------- -------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $592,432 $575,112 $2,230,351 $2,259,508
Costs and expenses:
Cost of sales 409,616 390,954 1,581,215 1,567,286
Marketing, general
and administrative 91,543 89,623 366,463 353,029
Research and development 12,862 12,995 48,690 52,977
Amortization of
intangibles 4,751 4,449 17,364 17,355
Provisions for restructured
operations - - 62,096 -
------- ------- --------- ---------
518,772 498,021 2,075,828 1,990,647
------- ------- --------- ---------
Operating income 73,660 77,091 154,523 268,861
Income from unconsolidated
companies 6,277 3,953 26,172 13,909
Other expense, net 14,970 12,971 55,787 49,263
------- ------- --------- ---------
Earnings before
income taxes 64,967 68,073 124,908 233,507
Income taxes 18,843 19,922 37,407 71,229
------- ------- --------- ---------
NET EARNINGS $ 46,124 $ 48,151 $ 87,501 $ 162,278
======= ======= ========= =========
Net earnings per share:
Basic $ 0.81 $ 0.85 $ 1.54 $ 2.89
Diluted 0.81 $ 0.85 $ 1.54 $ 2.87
Average shares outstanding:
Basic 56,760 56,461 56,677 56,178
Diluted 56,962 56,802 56,990 56,551
Cash dividend per share $ 0.28 $ 0.28 $ 1.12 $ 1.12
</TABLE>
5
<PAGE>
THOMAS & BETTS CORPORATION
Consolidated Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
Jan 3, 1999 Dec 28,1997
----------- -----------
<S> <C> <C>
ASSETS
Cash and marketable securities $ 106,506 $ 97,607
Receivables - net 404,784 293,722
Inventories 469,641 402,601
Deferred income taxes 61,829 43,452
Other current assets 15,642 9,090
--------- ---------
Total current assets 1,058,402 846,472
--------- ---------
Property, plant and equipment - net 631,022 574,052
Intangible assets - net 621,487 506,225
Investments and other assets 188,676 167,539
--------- ---------
TOTAL ASSETS $2,499,587 $2,094,288
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings and current
maturities of long-term debt $ 97,657 $ 42,639
Accounts payable 262,483 226,542
Accrued liabilities 155,815 142,974
Income taxes 55,674 45,678
Dividends payable 15,920 15,401
-------- ---------
Total current liabilities 587,549 473,234
-------- ---------
Long-term debt 790,963 503,077
Other long-term liabilities 93,788 92,206
Deferred income taxes 12,182 26,467
Shareholders' equity 1,015,105 999,304
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,499,587 $2,094,288
========= =========
</TABLE>
6
<PAGE>
THOMAS & BETTS CORPORATION
Business Segment Performance
(In thousands)
<TABLE>
<CAPTION>
Quarter Ended
----------------------------
Jan 3, 1999 Dec 28, 1997 Change
------------- ------------ ------
<S> <C> <C> <C>
NET SALES
Electrical $ 303,444 $ 250,826 21.0%
Electronic OEM 157,245 194,669 (19.2)
Communications 59,591 58,559 1.8
Other 72,152 71,058 1.5
--------- ---------
Total $ 592,432 $ 575,112 3.0%
========= =========
Quarter Ended
----------------------------
Jan 3, 1999 Dec 28, 1997 Change
------------- ------------ ------
SEGMENT EARNINGS
Electrical $ 49,569 $ 44,346 11.8%
Electronic OEM 18,381 19,814 (7.2)
Communications 1,467 8,658 (83.1)
Other 10,585 7,753 36.5
--------- ---------
Total $ 80,002 $ 80,571 (0.7)%
========= =========
Twelve Months Ended
----------------------------
Jan 3, 1999 Dec 28, 1997 Change
------------- ------------ ------
NET SALES
Electrical $1,079,842 $ 983,594 9.8%
Electronic OEM 640,105 756,421 (15.4)
Communications 261,060 262,121 (0.4)
Other 249,344 257,372 (3.1)
--------- ---------
Total $2,230,351 $2,259,508 (1.3)%
========= =========
Twelve Months Ended
----------------------------
Jan 3, 1999 Dec 28, 1997 Change
------------- ------------ ------
SEGMENT EARNINGS
Electrical $ 181,806 $ 168,355 8.0%
Electronic OEM 66,071 70,006 (5.6)
Communications 17,224 23,440 (26.5)
Other 23,659 20,590 14.9
--------- ---------
Total $ 288,760 $ 282,391 2.3%
========= =========
</TABLE>
Segment earnings are based on earnings before interest, taxes, restructure and
special charges and certain other expenses.
7
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EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to us under the heading "Experts" in the
Prospectus dated February 5, 1999 which is part of Thomas & Betts
Corporation's Registration Statement No. 33-61465 on Form S-3.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 3, 1999
