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NEWS THOMAS & BETTS CORPORATION
8155 T&B Boulevard
Memphis, TN 38125
(901) 252-5962
[THOMAS & BETTS LOGO]
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FOR IMMEDIATE RELEASE CONTACT: Tricia Bergeron
(901) 252-8266
[email protected]
THOMAS & BETTS ISSUES SECOND QUARTER EARNINGS NOTICE
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MEMPHIS, TENN. (JUNE 19, 2000) - Thomas & Betts today said that it expects
second quarter earnings to come in significantly below the current analyst
consensus of $.74 per share, excluding an anticipated gain on the sale of the
company's electronics OEM business. The company said the expected earnings
decrease will primarily result from a likely increase in provisions for sales
and accounts receivable deductions.
"We face ongoing issues integrating our business processes and accounting
functions into our comprehensive information systems, which we have been in the
process of upgrading for the past two years," said Clyde R. Moore, chairman,
chief executive officer and president of Thomas & Betts. "At this time, we are
still quantifying the impact of these issues."
Thomas & Betts said that it had completed the Hart-Scott-Rodino process on
the sale of its electronics OEM business to Tyco International and that the sale
is now scheduled to close by the end of June. Proceeds from the sale will be
used primarily to pay down debt. The company also said it expects to use some of
the proceeds to buy back stock.
ENHANCED FINANCIAL CONTROLS BEING PUT INTO PLACE
Moore said that John P. Murphy, the company's recently appointed chief
financial officer, has been leading an effort to review processes and controls.
As appropriate, enhanced or new processes and controls to address accounts
receivables, inventory, and other functions are being developed and implemented.
Murphy has retained outside consultants to expedite this program but said
considerable work remains.
The company also said that it had hired a new Corporate Controller, Ken
Fluke, who joined the company last week. Fluke joins the company from the
Goodyear Tire & Rubber Company, where he served as controller for the North
American Tires Division.
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NEW ORGANIZATIONAL STRUCTURE; COO POSITION ESTABLISHED
Moore also announced two significant organizational changes: first, the
elimination of the matrix management structure and, second, the establishment of
a new position of chief operating officer. Moore said that the matrix structure,
which served the company effectively for a number of years, led to
less-than-optimal performance as the company integrated numerous acquisitions,
faced heightened competition in key markets, and, in particular, implemented new
business systems. With the full support of the board of directors, the company
has been moving to a structure that focuses management responsibility into
strategic business units reporting to a chief operating officer. The company has
an active search for a COO underway.
"Changing our organizational structure is critical to instilling greater
accountability throughout the organization," Moore said. "The management changes
we've announced and made thus far also support our effort to improve focus and
control. We are confident that these actions will help improve performance."
OTHER INITIATIVES UNDERWAY
Moore emphasized that other initiatives designed to aggressively address
the company's performance issues are underway. These include:
- Redefining the company's strategies to focus on its core electrical
and communications products and markets.
- Continuing to divest additional businesses that do not fit the
company's redefined strategy. In this regard, Thomas & Betts expects
to be in a position to announce the sale of its Aster-TM- product line
and a substantial portion of its data comm product lines in the near
future.
- Leveraging the company's distribution strengths and technology base to
pursue opportunities in B2B e-commerce.
"Thomas & Betts' businesses are fundamentally strong," said Moore. "Our
redefined focus on our core markets coupled with important organizational
changes and enhanced controls should significantly improve our ability to
achieve our business objectives. These steps are in the overall best interests
of our shareholders, customers, and employees."
Thomas & Betts is one of the world's leading designer and manufacturer of
electrical connectors and components for worldwide electrical and electronic
markets. Headquartered in Memphis, Tenn., the company has manufacturing,
distribution, and office facilities worldwide. In 1999, Thomas & Betts reported
sales of $2.52 billion and diluted earnings per share of $2.56.
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THIS PRESS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS THAT 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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