EX-99.1 2 a5672257ex99_1.htm EXHIBIT 99.1

Exhibit 99.1

Thomas & Betts Corporation Reports First Quarter 2008 Earnings

First Quarter Earnings Per Share $0.66, In Line With Company Guidance

Full-Year 2008 E.P.S. Guidance Increased To $3.93 to $4.08, Reflecting $0.13 Per Share Benefit From Second Quarter Legal Settlement

MEMPHIS, Tenn.--(BUSINESS WIRE)--Thomas & Betts Corporation (NYSE: TNB) today reported first quarter 2008 net earnings of $38.3 million, compared to $37.1 million in the first quarter 2007. First quarter 2008 earnings were $0.66 per diluted share, up approximately five percent from 2007 and in line with the guidance provided by the company in February.

First quarter 2008 net sales were $595.5 million, up $121.0 million or 25.5 percent compared to last year. Acquisitions contributed $108.6 million or 22.9 percent while foreign currency benefited sales by approximately $22 million or 4.6 percent in the quarter. Underlying sales volumes declined year over year as demand for industrial and telecommunication products did not fully offset weakness in retail, utility distribution and light commercial construction markets influenced by the continued slowdown in U.S. residential construction.

“We are pleased with our strong margin performance in the quarter, despite softer market conditions in the U.S.,” said Dominic J. Pileggi, chairman and chief executive officer. “We are also pleased with the progress we’ve made integrating our recent acquisitions. As planned, we consolidated four acquired distribution centers into our centralized distribution model during the quarter. This, combined with other actions taken to eliminate duplicative operating costs, should lead to significant savings, particularly in the second half of 2008.”

First quarter 2008 gross profit was $186.3 million or 31.3 percent of sales, up from 30.5 percent in the prior-year period. The increase reflects improved mix in the company’s Electrical and Steel Structures segments and the favorable impact of recently acquired businesses.

Selling, general and administrative (SG&A) expense was $116.3 million or 19.5 percent of sales compared to $87.3 million or 18.4 percent of sales last year. The increase as a percent of sales reflects the impact of recent acquisitions. 2008 SG&A included $8 million of depreciation and amortization expenses related to acquisitions while 2007 first quarter SG&A included a $7 million legal charge.


Earnings from operations increased 22 percent to $70.0 million in the quarter, primarily due to acquisitions and improved mix. As a percent of sales, earnings from operations were 11.8 percent compared to 12.1 percent of sales in the first quarter 2007. The decline reflects the impact of acquisitions including, as expected, $4.1 million of non-recurring amortization and integration expenses.

Net interest expense increased by $8.8 million in the first quarter 2008 primarily as a result of funding required for recent acquisitions. The effective tax rate was 32.3 percent, up from 31.0 percent last year as a result of higher U.S. income.

SEGMENT RESULTS

During the first quarter 2008, the company began to report segment earnings before depreciation, amortization and share-based compensation expenses. Management believes this change provides improved transparency into the underlying operating trends in the business segments. 2007 quarterly results have been revised to reflect this change.

Total segment earnings were up 21 percent to $111.8 million in the first quarter 2008. As a percent of sales, segment earnings were 18.8 percent compared to 19.5 percent last year. The decline as a percent of sales reflects the impact of recent acquisitions.

First quarter 2008 Electrical segment sales were $508.8 million, up $119.6 million or 30.7 percent compared to the first quarter 2007. Acquisitions contributed $108.6 million or 27.9 percent while foreign currency benefited sales by $21 million or 5.4 percent in the quarter. Demand for industrial and telecommunication products partially offset weakness in retail, utility distribution and light commercial construction markets influenced by the continued slowdown in U.S. residential construction.

Electrical segment earnings were $96.1 million in the quarter, up 25.1 percent year over year largely as a result of acquisitions. As a percent of sales, segment earnings were 18.9 percent compared to 19.7 percent last year. Segment earnings included $3.2 million of the $4.1 million of non-recurring expenses noted above.

Sales and earnings in the Steel Structures segment were $52.0 million and $10.0 million in the quarter, respectively, in line with the prior-year period. As a percent of sales, Steel Structures segment earnings were 19.3 percent of sales compared to 18.8 percent last year, reflecting improved project mix.

HVAC segment sales increased 7.5 percent to $34.8 million in the first quarter 2008, partially due to the favorable impact of foreign currency. Segment earnings were $5.6 million or 16.2 percent of sales.


BALANCE SHEET HIGHLIGHTS

The company ended the first quarter 2008 with $110 million in cash and $858 million in total debt. In the quarter, the company completed the acquisition of two previously announced businesses for a total cost of approximately $90 million. Total debt compared to year end 2007 increased by approximately $46 million to help fund these acquisitions.

2008 DIRECTIONAL GUIDANCE

“Looking forward, we continue to expect sales to increase approximately 25 percent, with acquisitions contributing approximately 20 percent to the sales growth for the full year,” said Pileggi. “We expect continued growth in industrial and international markets to help offset weakness in U.S. markets influenced by residential construction. Notably, price increases taken recently in response to sharply higher commodity costs will play a more significant role than previously anticipated in sales growth in the second half of the year.”

“Despite challenging U.S. market conditions and increased volatility in commodity costs, we remain confident in our ability to deliver strong underlying earnings with contributions coming from our recent acquisition activities,” continued Pileggi. “In addition, second quarter results will benefit by $12 million pre-tax, or $0.13 per diluted share, as a result of recently settled legacy legal claims. As a result of the settlement, we are raising our earnings guidance for the full year 2008 to a range of $3.93 to $4.08 per diluted share. Previously, our guidance was $3.80 to $3.95 per diluted share.”

CORPORATE OVERVIEW

Thomas & Betts Corporation (www.tnb.com) is a leading designer and manufacturer of electrical components used in industrial, commercial, communications and utility markets. The company is also a leading producer of commercial heating and ventilation units and highly engineered steel structures used, among other things, for utility transmission. Headquartered in Memphis, Tenn., the company has manufacturing, distribution and office facilities worldwide. In 2007, Thomas & Betts reported net sales of $2.1 billion.

NOTE: The attached financial tables support the information in this news release:

Consolidated Statements of Operations

Segment Information

Prior-Year Segment Information

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Impact of 2007 and 2008 Acquisitions


CAUTIONARY STATEMENT

This press release includes forward-looking statements that are identified by terms such as "optimistic," "trend," “will,” and "believe." These statements discuss business strategies, economic outlook and future performance. These forward-looking statements make assumptions regarding the company's operations, business, economic and political environment, including, without limitation, customer demand, government regulation, terrorist acts and acts of war. The actual results may be materially different from any future results expressed or implied by such forward-looking statements. Please see the "Risk Factors" section of the company's Form 10-K for the fiscal year ended December 31, 2007 for further information related to these uncertainties. The company undertakes no obligation to publicly release any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events.

CONFERENCE CALL AND WEBCAST INFORMATION

Thomas & Betts will hold a conference call/webcast to discuss the company’s first quarter 2008 results on Wednesday, April 30, 2008 at 11:00 am ET (10:00 am CT). To access the call, please call 201-689-8341. The call can also be accessed via the Thomas & Betts corporate website at www.tnb.com. The conference call will be recorded and available for replay through 12:00 midnight ET on Wednesday, May 7, 2008. To access the replay, please call 201-612-7415, account number 9517, pass code 281135.


 
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
    Quarter Ended
 
March 31,     March 31,
2008 2007
 
 
Net sales $ 595,504 $ 474,552
 
Cost of sales   409,243     329,687  
Gross profit 186,261 144,865
Gross profit - % of net sales 31.3 % 30.5 %
 
Selling, general and administrative 116,285 87,329
Selling, general and administrative - % of net sales 19.5 % 18.4 %
   
 
Earnings from operations 69,976 57,536
Earnings from operations - % of net sales 11.8 % 12.1 %
 
Interest expense, net (12,332 ) (3,551 )
Other (expense) income, net   (1,277 )   (160 )
 
Earnings before income taxes 56,367 53,825
 
Income tax provision 18,206 16,685
Effective tax rate   32.3 %   31.0 %
 
Net earnings from continuing operations 38,161 37,140
 
Earnings from discontinued operations, net   91     -  
 
Net earnings $ 38,252   $ 37,140  
 
Basic earnings per share:
Continuing operations $ 0.66 $ 0.63
Discontinued operations   -     -  
Net earnings $ 0.66   $ 0.63  
 
 
Diluted earnings per share:
Continuing operations $ 0.66 $ 0.63
Discontinued operations   -     -  
Net earnings $ 0.66   $ 0.63  
 
Average shares outstanding:
Basic 57,759 58,593
Diluted 58,192 59,393

 
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
 
    Quarter Ended
 
March 31,     March 31,
2008 2007
 
 
Net sales:
Electrical $ 508,770 $ 389,166
Steel Structures 51,960 53,030
HVAC   34,774     32,356  
 
Total net sales $ 595,504   $ 474,552  
 
 
Segment earnings:
Electrical $ 96,121 $ 76,844
Steel Structures 10,042 9,990
HVAC   5,635     5,689  
 
Total reportable segment earnings $ 111,798   $ 92,523  
 
Corporate expense (13,262 ) (17,442 )
Depreciation and amortization expense (22,040 ) (12,344 )
Share-based compensation expense (6,520 ) (5,201 )
Interest expense, net and other expense   (13,609 )   (3,711 )
 
Earnings before income taxes $ 56,367   $ 53,825  
 
 
 
Segment earnings - % of net sales:
Electrical 18.9 % 19.7 %
Steel Structures 19.3 % 18.8 %
HVAC 16.2 % 17.6 %
Total 18.8 % 19.5 %

 
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Prior-Year Segment Information
(In thousands)
(Unaudited)
 
  2007
 

1st

Quarter

 

2nd

Quarter

 

3rd

Quarter

 

4th

Quarter

 

Total

Year

 
 
Net Sales:
Electrical $ 389,166 $ 418,033 $ 461,585 $ 497,814 $ 1,766,598
Steel Structures 53,030 57,082 57,959 59,285 227,356
HVAC   32,356     32,123     33,160     45,295     142,934  
 
Total net sales $ 474,552   $ 507,238   $ 552,704   $ 602,394   $ 2,136,888  
 
 
Segment earnings:
Electrical $ 76,844 $ 84,892 $ 94,592 $ 96,573 $ 352,901
Steel Structures 9,990 9,955 10,954 11,724 42,623
HVAC   5,689     5,123     6,180     10,183     27,175  
 
Total reportable segment earnings $ 92,523 $ 99,970 $ 111,726 $ 118,480 $ 422,699
 
Corporate expense (17,442 ) (13,852 ) (12,261 ) (19,213 ) (62,768 )
Depreciation and amortization expense (12,344 ) (12,772 ) (15,218 ) (17,432 ) (57,766 )
Share-based compensation expense (5,201 ) (3,071 ) (2,286 ) (1,919 ) (12,477 )
Interest expense, net and other expense   (3,711 )   (2,806 )   (7,684 )   (11,596 )   (25,797 )
 
Earnings before income taxes $ 53,825   $ 67,469   $ 74,277   $ 68,320   $ 263,891  
 
Segment earnings - % of net sales:
Electrical 19.7 % 20.3 % 20.5 % 19.4 % 20.0 %
Steel Structures 18.8 % 17.4 % 18.9 % 19.8 % 18.7 %
HVAC 17.6 % 15.9 % 18.6 % 22.5 % 19.0 %
Total 19.5 % 19.7 % 20.2 % 19.7 % 19.8 %
 
During the first quarter of 2008, the Corporation began to report segment earnings before depreciation, amortization and share-based compensation expenses.
Prior periods presented above have been conformed to reflect this current period change.

 
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
    March 31,     December 31,
2008 2007
 
ASSETS
 
Current assets:
Cash and cash equivalents $ 110,180 $ 149,926
Restricted cash 16,569 16,683
Receivables, net 318,838 280,948
Inventories 321,314 271,989
Other current assets 63,820 79,891
Assets of discontinued operations   99,906   106,478
Total current assets 930,627 905,915
 
Net property, plant and equipment 316,870 305,959
Goodwill 925,927 873,574
Other intangible assets 329,093 299,370
Investments in unconsolidated companies 115,670 115,300
Other assets   66,417   67,668
 
Total assets $ 2,684,604 $ 2,567,786
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Current maturities of long-term debt $ 267,629 $ 116,157
Accounts payable 193,580 180,333
Accrued liabilities 166,237 154,337
Liabilities of discontinued operations   23,436   18,146
Total current liabilities 650,882 468,973
 
Long-term debt 590,123 695,048
Other long-term liabilities 175,450 174,831
 
Shareholders' equity   1,268,149   1,228,934
 
Total liabilities and shareholders' equity $ 2,684,604 $ 2,567,786

 
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
    Year to Date
 
March 31,     March 31,
2008 2007
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 38,252 $ 37,140
Adjustments:
Depreciation and amortization 22,040 12,344

Changes in operating assets and liabilities, net(a):

Receivables (30,605 ) (32,100 )
Inventories (32,606 ) (1,895 )
Accounts payable 14,114 7,100
Accrued liabilities (10,162 ) (3,245 )
Other   10,661     13,829  
Net cash provided by (used in) operating activities   11,694     33,173  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (8,139 ) (6,392 )
Purchases of businesses (90,583 ) -
Other   191     149  
Net cash provided by (used in) investing activities   (98,531 )   (6,243 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and other borrowings 76,510 -
Repayment of long-term debt and other borrowings (30,162 ) (137 )
Repurchase of common shares - (93,541 )
Other   956     5,607  
Net cash provided by (used in) financing activities   47,304     (88,071 )
 
EFFECT OF EXCHANGE RATE ON CASH   (213 )   39  
 
Net increase (decrease) in cash and cash equivalents (39,746 ) (61,102 )
Cash and cash equivalents at beginning of period   149,926     370,968  
Cash and cash equivalents at end of period $ 110,180   $ 309,866  
 
Cash payments for interest $ 11,346 $ 4,994
Cash payments for income taxes $ 8,871 $ 10,739
 

(a) Net of foreign exchange and acquisition effects


 
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Impact of 2007 and 2008 Acquisitions
(In thousands)
(Unaudited)
 
Impact on Earnings from Operations
 
  Quarter Ended  
March 31,
2008
 
Net sales $ 108,626
 
Cost of sales   74,094  
Gross profit 34,532
Gross profit - % of net sales 31.8 %
 
Selling, general and administrative 27,242
Selling, general and administrative - % of net sales 25.1 %
 
 
Earnings from operations $ 7,290  
Earnings from operations - % of net sales 6.7 %
 
 
Electrical Segment Earnings Impact
 
  Quarter Ended  
March 31, 2008
Base Acquisitions Total
 
 
Net sales $ 400,144 $ 108,626 $ 508,770
 
 
Segment earnings $ 79,168 $ 16,953 $ 96,121
Segment earnings - % of net sales 19.8 % 15.6 % 18.9 %
 
 
 
Additional Information
 
Quarter Ended
March 31, 2008
Included in Included in
Cost of Earnings from Segment
Sales SG&A Operations Earnings
 

Integration and related expenses(a)

$ 2,542 $ 687 $ 3,229 $ 3,229
 
Depreciation and amortization expense:
non-recurring $ - $ 912 $ 912 $ -
recurring   1,593     6,843     8,436     -
$ 1,593   $ 7,755   $ 9,348   $ -
 
Share-based compensation expense $ - $ 315 $ 315 $ -
 

(a) SG&A includes $567 of integration expenses not charged against acquisition earnings above.

 
Note: Information above does not include impact of discontinued operations.

CONTACT:
Thomas & Betts Corporation
Tricia Bergeron, 901-252-8266
tricia.bergeron@tnb.com