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Exhibit 20
NEWS [THOMAS & BETTS LETTERHEAD]
FOR IMMEDIATE RELEASE CONTACT: Tricia Bergeron
(901) 252-8266
[email protected]
THOMAS & BETTS CORPORATION COMMENTS ON CREDIT RATING
DOWNGRADE BY STANDARD & POOR'S
COMPANY CONTINUES TO MAKE PROGRESS IN ITS TURNAROUND PROGRAM
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MEMPHIS, TENN. - DECEMBER 13, 2000 - Thomas & Betts Corporation (NYSE: TNB)
today said that it is disappointed that Standard & Poor's had downgraded the
company's corporate credit rating from BBB to BBB-.
"We continue to believe that the underlying earnings power of Thomas &
Betts is comparable to our industry peers and we are comfortable with our
liquidity," said T. Kevin Dunnigan, chairman and chief executive officer of
Thomas & Betts. "The new management team has outlined, and is now implementing,
a comprehensive turnaround plan that we believe will drive improved operating
performance beginning in 2001 and provide a foundation for continued growth and
stability. We appreciate Standard & Poor's perspective that it will take time to
see the results of these efforts."
In the company's third quarter 2000 earnings release, issued on
November 14, 2000, Dunnigan commented that the company was in the early stages
of rebuilding itself into an efficient and effective competitor. He went on to
comment on the company's progress and plans in key areas such as pricing,
promotions, accounts receivable, and inventory.
"In just the last month, we have taken several important steps to help
us achieve our newly defined strategy," said Dunnigan. "We have integrated our
international operations into our strategic business units and eliminated the
overhead associated with a separate international division. This is another
important step in restructuring the company to operate as a tightly managed,
decentralized organization with minimal corporate overhead."
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"We are also pleased with our progress in correcting systemic pricing
and invoicing problems that have led to an unnecessarily complex deduction and
collection process. Also, we expect to have improved inventory accounting
practices and procedures in place early next year. This will significantly
improve our ability to effectively manage inventory and production going
forward."
The company has also revised its selling and promotional strategies.
Most notably, it has eliminated quarter-end discount programs. Thomas & Betts
said that its short-term performance would be adversely impacted by excessive
inventory that resulted from previous discount programs.
Thomas & Betts said that it significantly reduced its use of cash from
the second to third quarters. The company also said cash from operations could
possibly be slightly positive in the fourth quarter, with continued improvement
in 2001. Thomas & Betts has $420 million in credit available from a consortium
of domestic and foreign banks. The company's downgrade by Standard & Poor's does
not affect access to these facilities. While it is unlikely that Thomas & Betts
will be able to access the commercial paper market as a result of the downgrade,
the company had no plans to issue commercial paper. As of today, the company has
no debt and no commercial paper outstanding under the credit agreements.
Dunnigan said that the company's financial goals after its
transitional period are eight to nine percent sales growth, seven to eight
percent net profit, and a debt-to-capital target in the 35 to 45 percent range.
Thomas & Betts Corporation designs and manufactures connectors and
components for worldwide electrical markets. Visit Thomas & Betts on the World
Wide Web at WWW.TNB.COM.
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NOTE TO THE READER: A more complete discussion of the issues facing Thomas &
Betts can be found in the company's second and third quarter 2000 Form 10-Q on
file with the Securities and Exchange Commission.
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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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