<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: July 2, 2000
(Date of earliest event reported)
THOMAS & BETTS CORPORATION
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(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 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 2, 2000, Thomas & Betts Corporation (the "Registrant" and the
"Corporation") completed the sale of its global Electronic OEM business to Tyco
International Ltd. for $750 million in cash. The Corporation used the proceeds
from the sale primarily to reduce debt.
The Electronic OEM segment encompasses connectors and components, including
battery packs, that transmit, store and manage electronic signals in computers,
automobiles, and such electronic devices as cellular telephones. Customers
include computer and cellular handset manufacturers, automotive and industrial
OEMs, and tier-one automotive suppliers. The Electronic OEM business, with 1999
sales of $687 million, has manufacturing facilities in the U.S., Mexico, Europe,
and Asia.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma financial information
THOMAS AND BETTS CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Effective July 2, 2000, the Corporation sold substantially all of the
operating assets and liabilities of its Electronic OEM business to Tyco
International Corporation for $750 million in cash less post closing
adjustments, if any. The unaudited pro forma condensed consolidated financial
statements which follow give effect to the sale as if it had occurred on
April 2, 2000 for balance sheet purposes and as of January 4, 1999 for
statements of earnings purposes. The estimated net gain on the sale of the
Electronic OEM business, including related transaction costs and other
directly related costs such as severance, are excluded from the pro forma
statements of earnings. The actual financial statements for the period ending
July 2, 2000 may differ materially from the pro forma estimates set forth
below.
THOMAS & BETTS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
APRIL 2, 2000
UNAUDITED
<TABLE>
<CAPTION>
(IN THOUSANDS)
PRO FORMA ADJUSTMENTS
THOMAS & --------------------------- THOMAS &
BETTS ELECTRONIC OEM BETTS
HISTORICAL HISTORICAL (1) OTHER (2) PRO FORMA
---------- ----------- ------ ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 51,490 $ 51,490
Marketable securities 12,869 12,869
Accounts receivable 563,393 (186,396) 168,889 (a) 545,886
Inventories 548,273 (165,552) 382,721
Deferred income taxes 51,548 (9,027) 42,521
Prepaid expenses and other assets 28,571 (6,517) 22,054
---------- --------- ------- ----------
Total Current Assets 1,256,144 (367,492) 168,889 1,057,541
Net property, plant, and equipment 673,422 (163,000) 510,422
Intangible assets - net 606,745 (33,114) (84) (b) 573,547
Investment in unconsolidated companies 160,824 (43,268) 117,556
Other assets 51,198 (9,865) (1,757) (c) 39,576
---------- --------- ------- ----------
TOTAL ASSETS $2,748,333 (616,739) 167,048 $2,298,642
========== ========= ======= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 46,177 $ 46,177
Current maturities of long-term bank debt 3,691 (761) 2,930
Accounts payable 309,855 (100,129) 209,726
Accrued liabilities 141,903 (15,024) (2,559) (a) 120,123
(4,197) (c)
Income taxes 18,791 (888) (3,916) (d) 13,987
Dividends payable 16,222 16,222
---------- --------- ------- ----------
Total Current Liabilities 536,639 (116,802) (10,672) 409,165
Long-term bank debt 991,653 (13,464) (446,386) (c) 531,803
Deferred income taxes 20,962 (9,866) 11,096
Other long-term liabilities 90,678 (3,915) 86,763
Shareholders' Equity 1,108,401 (472,692) 624,106 (e) 1,259,815
---------- --------- ------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,748,333 (616,739) 167,048 $2,298,642
========== ========= ======= ==========
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
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THOMAS & BETTS CORPORATION
PRO FORMA CONDENSED STATEMENT OF EARNINGS
QUARTER ENDED APRIL 2, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
PRO FORMA ADJUSTMENTS
THOMAS & --------------------------- THOMAS &
BETTS ELECTRONIC OEM BETTS
HISTORICAL HISTORICAL (1) OTHER (2) PRO FORMA
---------- ----------- ------ ---------
<S> <C> <C> <C> <C>
Net sales $ 659,681 (195,581) $ 464,100
Costs and expenses
Cost of sales 471,271 (152,613) 318,658
Marketing, general and administrative 108,100 (17,148) 90,952
Research and development 11,583 (5,364) 6,219
Amortization of intangibles 4,752 (298) 4,454
Provision (recovery) - restructured operations (449) - (449)
---------- ------- --------- ----------
595,257 (175,423) - 419,834
---------- ------- --------- ----------
Earnings from operations 64,424 (20,158) 44,266
Income from unconsolidated companies 7,073 (1,652) 5,421
Interest expense-- net 16,955 (64) (7,646) (c) 9,245
Other expense-- net 4,029 (154) (2,660) (a) 1,215
---------- ------- --------- ----------
Earnings before income taxes 50,513 (21,592) 10,306 39,227
Income taxes 14,649 (9,168) 3,916 (d) 9,397
---------- ------- --------- ----------
Net earnings $ 35,864 (12,424) 6,390 $ 29,830
========== ======== ======= ==========
Net earnings per common share:
Basic $ 0.62 $ 0.52
========== ==========
Diluted $ 0.62 $ 0.52
========== ==========
Average shares outstanding
Basic 57,884 57,884
========== ==========
Diluted 57,889 57,889
========== ==========
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
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<PAGE>
THOMAS & BETTS CORPORATION
PRO FORMA CONDENSED STATEMENT OF EARNINGS
YEAR ENDED JANUARY 2, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
PRO FORMA ADJUSTMENTS
THOMAS & --------------------------- THOMAS &
BETTS ELECTRONIC OEM BETTS
HISTORICAL HISTORICAL (1) OTHER (2) PRO FORMA
---------- ----------- ------ ---------
<S> <C> <C> <C> <C>
Net sales $2,522,008 (690,130) $1,831,878
Costs and expenses
Cost of sales 1,847,262 (552,730) 1,294,532
Marketing, general and administrative 427,192 (69,016) 358,176
Research and development 47,959 (21,333) 26,626
Amortization of intangibles 19,643 (1,419) 18,224
Provision (recovery) - restructured operations (11,632) 2,026 (9,606)
---------- -------- --------- ----------
2,330,424 (642,472) - 1,687,952
---------- -------- --------- ----------
Earnings from operations 191,584 (47,658) - 143,926
Income from unconsolidated companies 23,776 (4,645) 19,131
Interest expense-- net 60,995 (244) (28,410) (c) 32,341
Other income-- net (5,371) (634) (9,737) (c) (15,742)
---------- -------- --------- ----------
Earnings before income taxes 159,736 (51,425) 38,147 146,458
Income taxes 11,429 (24,734) 14,496 (d) 1,191
---------- -------- --------- ----------
Net earnings $ 148,307 (26,691) 23,651 $ 145,267
========== ======== ========= ==========
Net earnings per common share:
Basic $ 2.57 $ 2.52
========== ==========
Diluted $ 2.56 $ 2.51
========== ==========
Average shares outstanding:
Basic 57,690 57,690
========== ==========
Diluted 57,912 57,912
========== ==========
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Reflects the deletion of the historical financial statements of the
Corporation's Electronic OEM business. Certain administrative expenses
historically allocated to that business have not been eliminated in the
accompanying pro forma restatements of earnings. These corporate
overhead expenses include those for centralized administration, finance
and information technology departments. The Corporation expects to be
able to affect reductions in corporate overhead expenses as a result of
the sale of the Electronic OEM business.
(2) Reflects additional pro forma adjustments:
(a) Net proceeds from the sale (approximately $615 million) were
assumed to have eliminated the Corporation's asset securitization
program and re-establish trade accounts receivable sold under this
program. Reduction in related expense on sale of accounts receivable
is based on a discount rate of approximately 5.6 percent in 1999 and
6.3 percent in 2000.
(b) Reflects deferred transaction costs related to the sale of the
Corporation's Electronic OEM business.
(c) Use of the remaining net proceeds from the sale were assumed to
have reduced the Corporation's long-term debt outstanding under its
commercial paper program, revolving term credit facility and notes
payable outstanding. This reduction was also assumed to have reduced
the Corporation's deferred debt acquisition costs. Reduction in
related interest expense is based on average rates of interest of
6.2 percent in 1999 and 6.7 percent in 2000. Net proceeds equal the
estimated selling price minus estimates of transaction costs,
disposition costs, taxes and debt assumed by the buyer.
(d) Income tax payable and related provision has been adjusted to
reflect the tax deductible portion of the pro forma adjustments at
a combined federal and state income tax rate of approximately 38
percent in 1999 and 2000.
(e) Reflects the estimated proceeds from the sale net of the other
adjustments detailed in footnotes (a) thru (d). The after tax
gain from the sale of the corporation's electronic OEM business
determined as if the sale had taken place at April 2, 2000, was
estimated as approximately $125 million. The actual gain from the
sale will be based on proceeds less any post closing adjustmenst,
actual transaction and disposition costs and net assets as of July
2, 2000. Therefore, the actual gain may differ materially from the
April 2, 2000 pro forma estimated gain.
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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/ John P. Murphy
----------------------------------
John P. Murphy
Title: Senior Vice President-Chief
Financial Officer
Date: July 17, 2000
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