UNITED STATES
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 (Date of earliest event reported): July 2, 2014
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General Cable Corporation |
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(Exact name of registrant as specified in its charter) |
| Delaware | 001-12983 | 06-1398235 | ||
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(State or other jurisdiction |
(Commission |
(IRS Employer |
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4 Tesseneer Drive, Highland Heights, Kentucky |
41076-9753 |
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(Address of principal executive offices) |
(Zip Code) |
| Registrant’s telephone number, including area code: |
(859) 572-8000 |
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Not Applicable |
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(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below)::
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.05 Costs Associated with Exit or Disposal Activities
On July 2, 2014, General Cable Corporation (the “Company”) committed to, and on July 9, 2014, announced, a restructuring program designed to improve profitability and return on invested capital in each of its three reportable segments. The restructuring program builds on the Company’s existing productivity and asset optimization plans. The restructuring program is focused on the closure of certain underperforming assets as well as the consolidation and realignment of other facilities. On July 9, 2014, the Company also announced that it is implementing reductions in selling, general and administrative expenses globally.
Collectively, the restructuring program is expected to generate $10 million of savings in 2014, increasing to ongoing annual savings of $75 million beginning in 2016. As a result of the restructuring, the Company expects to record pre-tax charges of approximately $200 million. The Company estimates that approximately 40% of these pre-tax charges will result in cash outlays, primarily related to separation expense and approximately 60% are expected to be non-cash charges, primarily related to accelerated depreciation and the write-off of property, plant and equipment resulting from facility closures. The Company anticipates a majority of the total charges will be incurred in 2014.
These actions are anticipated to result in the elimination of approximately 1,000 positions globally, representing nearly 7% of the Company’s workforce.
Progress on the restructuring will be communicated periodically throughout the implementation of the program which is expected to be completed over the next 12 months. The timing and costs of the restructuring program may vary from the Company’s current estimates based on certain factors, including the finalization of timetables for the transition of production, consultations with employees and other statutory severance requirements of particular legal jurisdictions as well as any other actions that may result from the Company’s ongoing evaluation of its portfolio.
The information set forth in Item 2.05 contains certain “forward-looking statements,” which include information concerning the timing and costs of the Company’s restructuring program, expected savings and benefits as a result of the Company’s restructuring program and other information that is not historical information. Actual results may differ materially from those discussed in forward-looking statements as a result of factors, risks and uncertainties over many of which the Company has no control. These factors include, but are not limited to the Company’s ability to achieve the anticipated cost savings, efficiencies and other benefits related to the restructuring program and the other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”), including but not limited to, its annual report on Form 10-K filed with the SEC on March 3, 2014, and subsequent SEC filings. The Company does not undertake, and hereby disclaims, any obligation, unless required to do so by applicable securities laws, to update any forward-looking statements as a result of new information, future events or other factors.
Item 7.01 Regulation FD Disclosure
On July 9, 2014, the registrant issued a press release announcing a restructuring program and updating its full year 2014 outlook, a copy of which is furnished as Exhibit 99 hereto and is incorporated herein by reference.
The information being furnished pursuant to Item 7.01, including Exhibit 99, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
List below the financial statements, pro forma financial information and exhibits, if any, furnished as part of this report.
(d) The Exhibit furnished in this report is listed in the Index to Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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GENERAL CABLE CORPORATION |
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Date: July 9, 2014 |
By: |
/s/ Brian J. Robinson |
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Name: |
Brian J. Robinson |
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Title: |
Executive Vice President and Chief Financial Officer |
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INDEX TO EXHIBITS
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Exhibit Number |
Description |
Method of Filing |
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99 |
General Cable Corporation Press Release dated July 9, 2014
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Furnished Herewith
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Exhibit 99
General Cable Announces Restructuring Program
Expects to Generate Approximately $75 Million in Annual Savings
Revises 2014 Adjusted Operating Income Guidance to $200-$230 Million
HIGHLAND HEIGHTS, Ky.--(BUSINESS WIRE)--July 9, 2014--General Cable Corporation (NYSE: BGC) (the “Company”) today announced it is implementing a restructuring program designed to improve profitability and return on invested capital in each of its three reportable segments. The restructuring program, which builds on the Company’s existing productivity and asset optimization plans, is expected to result in ongoing annual savings of approximately $75 million, beginning in 2014 with full realization starting in early 2016. The restructuring program is focused on the closure of certain underperforming assets as well as the consolidation and realignment of other facilities. The Company is also implementing reductions in selling, general and administrative (SG&A) expenses globally.
Gregory B. Kenny, President and Chief Executive Officer, said, “While we strongly believe our business is well positioned for the long-term, we are continuing to face ongoing challenges in certain end markets and persistently uneven global demand and pricing. We have therefore decided to expand our productivity and asset optimization plans that were communicated earlier this year by implementing a broad restructuring program focused on improving profitability and return on invested capital in all of our segments. While these are difficult decisions that affect the lives of our employees, we believe these actions are essential to improving both the near-term performance as well as assuring the long-term success of the Company. We appreciate the contributions of all of our employees, and will support those impacted during this time of transition. As we move forward, we remain confident in our strategy, competitiveness and ability to create shareholder value. Over a business cycle, our operating model continues to support substantial incremental earnings as we further strengthen the alignment of our portfolio with the long-term fundamental growth prospects for energy, infrastructure and construction investments in our key end markets around the world.”
Improving Profitability in All Three Reportable Segments
Collectively,
the restructuring program is expected to generate $10 million of savings
in 2014, increasing to ongoing annual savings of $75 million beginning
in 2016.
As a result of the restructuring, the Company expects to record pre-tax charges of approximately $200 million, which includes approximately $80 million of cash costs. The Company anticipates a majority of the total charges will be incurred in 2014.
These actions are anticipated to result in the elimination of approximately 1,000 positions globally, representing nearly 7% of the Company’s workforce.
Progress on the restructuring will be communicated periodically throughout the implementation of the program which is expected to be completed over the next 12 months.
The timing and costs of the restructuring program may vary from the Company’s current estimates based on certain factors, including the finalization of timetables for the transition of production, consultations with employees and other statutory severance requirements of particular legal jurisdictions as well as any other actions that may result from the Company’s ongoing evaluation of its portfolio.
Update on Full Year 2014 Outlook
Aside from typical
seasonality, global demand and pricing remains uneven as the tepid pace
of the recovery continues to hamper growth in key end markets. As a
result, management is tempering its expectations for the second half of
the year principally due to the lack of consistent momentum in utility
and construction spending in North America and Latin America as well as
ongoing headwinds expected in Spain and Thailand. The Company also
anticipates that certain assets are unlikely to meet key performance
improvement milestones in the second half of the year. Partially
offsetting these anticipated trends in the second half of the year are
the initial benefits of the Company’s restructuring program and recently
rising copper prices. Overall, the Company is expecting adjusted
operating income for the full year of 2014 to be in the range of $200 to
$230 million, down from its previously communicated estimate of around
$230 million. The Company’s expectation for 2014 adjusted operating
income excludes any impact from Venezuela. The Company’s outlook assumes
copper (COMEX) and aluminum (LME) prices of $3.25 and $0.85,
respectively.
Adjusted operating income for the second quarter is expected to be within management’s guidance range principally due to the seasonal improvement experienced across the portfolio including the strong execution of the Company’s submarine turnkey project business. The Company’s share repurchase authorization remains at $75 million under its current program as the Company did not repurchase any shares during the second quarter. The Company may utilize this authorization in the context of economic conditions as well as the then prevailing market price of the common stock of the Company, regulatory requirements, financial covenants and alternative deployments of capital.
Management will provide additional details on its second quarter results and full year 2014 outlook in its earnings release on July 30 and conference call on July 31.
Restructuring Program Conference Call
The Company will
host a conference call tomorrow morning (July 10, 2014) at 8:30 a.m. ET.
Investors may access the live audio webcast at www.generalcable.com.
The webcast will also be available for replay. Also available on the
website is a copy of the presentation that will be referenced throughout
the conference call.
Second Quarter Earnings Release and Conference Call
The
Company will webcast a discussion of its second quarter 2014 earnings on
Thursday, July 31, 2014 at 8:30 a.m. ET. Chief Executive Officer Gregory
B. Kenny and Chief Financial Officer Brian J. Robinson will discuss the
second quarter results. The news release detailing the results will be
issued after the market closes on Wednesday, July 30, 2014. Investors
may access the live audio webcast at www.generalcable.com
beginning at 8:30 a.m. ET on Thursday, July 31, 2014. The webcast will
also be available for replay.
General Cable (NYSE:BGC), a Fortune 500 Company, is a global leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, construction, specialty and communications markets. For more information about General Cable, visit our website at www.generalcable.com.
Non-GAAP Measures
Adjusted operating income (defined as
operating income before extraordinary, nonrecurring or unusual charges
and other certain items) is a “non-GAAP financial measure” as defined
under the rules of the Securities and Exchange Commission. Management
believes that this non-GAAP financial measure is useful in analyzing the
underlying operating performance of the business. A reconciliation of
adjusted operating income to reported operating income for the first
quarter of 2014 is provided in the investor presentation available on
the Company’s website. With respect to the Company’s expected full year
2014 adjusted operating income, the Company is not able to provide
a reconciliation of the non-GAAP financial measures to GAAP because it
does not provide specific guidance for the various extraordinary,
nonrecurring or unusual charges and other items. These items have not
yet occurred, are out of the Company’s control and/or cannot be
reasonably predicted. As a result, reconciliation of the non-GAAP
guidance measure to GAAP is not available without unreasonable effort
and the Company is unable to address the probable significance of the
unavailable information.
Cautionary Statement Regarding Forward-Looking Statements
Certain
statements in this press release are forward-looking statements that
involve risks and uncertainties, predict or describe future events or
trends and that do not relate solely to historical matters. All
statements that address expectations or projections about the future,
including statements regarding the timing and costs of the Company’s
restructuring program, expected savings and benefits as a result of the
Company’s restructuring program and the Company’s expected 2014 outlook,
are forward-looking statements. Forward- looking statements can
generally be identified by use of forward-looking terminology such as:
“believe,” “expect,” “may,” “will,” “anticipate,” “intend,” “estimate,”
“project,” “plan,” “assume,” “seek to” or other similar expressions,
although not all forward-looking statements contain these identifying
words. Actual results may differ materially from those discussed in
forward-looking statements as a result of factors, risks and
uncertainties over many of which we have no control. These factors
include, but are not limited to: the economic strength and competitive
nature of the geographic markets that the Company serves; our ability to
increase manufacturing capacity and productivity; our ability to
increase our selling prices during periods of increasing raw material
costs; our ability to service, and meet all requirements under, our
debt, and to maintain adequate domestic and international credit
facilities and credit lines; our ability to establish and maintain
internal controls; the impact of unexpected future judgments or
settlements of claims and litigation; impact of foreign currency and
exchange rate fluctuations; impact of future impairment charges;
compliance with U.S. and foreign laws, including the Foreign Corrupt
Practices Act; our ability to implement and make appropriate, timely and
beneficial decisions as to when, how and if to purchase shares under the
repurchase program, our ability to achieve the anticipated cost savings,
efficiencies and other benefits related to the restructuring program and
the other risks detailed from time to time in the Company’s filings with
the Securities and Exchange Commission (“SEC”), including but not
limited to, its annual report on Form 10-K filed with the SEC on March
3, 2014, and subsequent SEC filings. You are cautioned not to place
undue reliance on these forward-looking statements. General Cable does
not undertake, and hereby disclaims, any obligation, unless required to
do so by applicable securities laws, to update any forward-looking
statements as a result of new information, future events or other
factors.
CONTACT:
General Cable Corporation
Len Texter, 859-572-8684
Vice
President, Investor Relations