General Cable Reports Third Quarter Results; EPS of $0.71.HIGHLAND HEIGHTS Highland Heights is the name of several places in the United States of America:
See: New York Stock Exchange :BGC BGC General Cable Corporation (stock symbol) BGC Billy Graham Center BGC Baptist General Conference (formerly Swedish Baptist Denomination) BGC Boys & Girls Club BGC Bubblegum Crisis ) reported today revenues and earnings for the third quarter. Revenues of $948.4 million were up 15% on a metal-adjusted basis compared to the prior year. Net income for the third quarter of 2006 was $37.1 million compared to adjusted net income of $13.5 million in the third quarter of 2005. Earnings per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. per share basis for the third quarter ended September 29, 2006 was $0.71 compared to adjusted earnings per share of $0.26 in the third quarter of 2005. Third Quarter Highlights * Increased year-over-year third quarter operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: by approximately 290 basis points, on a metal-adjusted basis. * Acquired E.C.N. Cable Group; a Spanish producer of aerial high-voltage and extra-high voltage ex·tra-high voltage n. Abbr. EHV A voltage higher than 345 kilovolts. transmission cables and low and medium voltage insulated in·su·late tr.v. in·su·lat·ed, in·su·lat·ing, in·su·lates 1. To cause to be in a detached or isolated position. See Synonyms at isolate. 2. power cables. * Received IndustryWeek 's 2006 Best Plants Award. * Reported cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $89 million for the quarter. Third Quarter Results Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the third quarter of 2006 were $948.4 million, and represent an increase of $124.6 million or 15% compared to the third quarter of 2005 on a metal-adjusted basis. Metal pounds sold increased 9.2% versus the third quarter of 2005. Acquired businesses added $99.8 million of net sales during the third quarter of 2006. The average price per pound of copper in the third quarter was $3.54, an increase of $1.84, or 108% from the third quarter of 2005, and $0.17 or 5% from the second quarter of 2006. The average price per pound of aluminum in the third quarter was $1.19, an increase of $0.32, or 37% from the third quarter of 2005, and a decrease of $0.07 or 6% from the second quarter of 2006. Third quarter 2006 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $65.8 million compared to third quarter 2005 adjusted operating income of $32.9 million, an increase of $32.9 million or 100%. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before as a percent of net revenues were 6.9% in the third quarter of 2006 compared to a metal-adjusted operating earnings percentage of 4.0% in the third quarter of 2005, an increase of approximately 290 basis points. For comparison purposes, we have added back to the 2005 third quarter results pre-tax charges of $15.6 million associated with the closure of certain of the Company's manufacturing facilities. These items reduced reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of by $0.23. Operating earnings were up in each major geographic region and in six of the Company's eight reported business segments. The improvement in operating earnings was driven by increased factory utilization, and a significantly improved pricing environment across most of the Company's product lines and geographies, including a reduction in the time to recover raw material inflation. "Price increases that were put in place during the second quarter of 2006, as raw material prices were rapidly escalating, have held during the third quarter reflecting high industry capacity utilization rates Capacity utilization rate The percentage of the economy's total plant and equipment that is currently in production. Usually, a decrease in this percentage signals an economic slowdown, while an increase signals economic expansion. as well as strong end markets, particularly electric utility and electrical infrastructure markets," said Gregory B. Kenny, President and Chief Executive Officer of General Cable. Markets Discussion "The electric utility and certain electrical infrastructure market segments continue to demonstrate strong demand for cables around the world driven by increasing demand for new energy sources and renewed interest in expanding and improving the reliability of the power distribution and transmission infrastructure," Kenny said. "A recently published study by the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Electric Reliability Council (NERC NERC Natural Environment Research Council (UK) NERC North American Electric Reliability Corporation (Princeton, New Jersey, USA) NERC Northeast Recycling Council NERC National Environment Research Council ), detailed numerous findings including electric capacity margin declines, limited transmission capacity for energy from areas of surplus to areas of need, and transmission system expansion that continues to lag demand growth," Kenny continued. "The solution for many of these issues will involve increased investment in the generation, transmission and distribution of electricity, setting the stage for continued long-term growth in our businesses supporting these markets." Net sales for the Company's global electric utility business were up 33% on a metal-adjusted basis from the third quarter of 2005 with acquired revenues contributing about 21 points of the growth, or $56 million. North American transmission cable volumes, as measured by metal pounds sold, were up 22% in the third quarter of 2006 compared to 2005, reflecting our customers increasing investment in the electric utility transmission grid. Operating earnings for the Company's global electric utility businesses were up 64% to $29.2 million in the third quarter of 2006 versus 2005. As a percentage of metal adjusted revenues, operating margins grew 160 basis points to 8.2% in the third quarter of 2006 compared to 2005. "The Company continues to be successful in its efforts to further leverage its technology and global sales and marketing teams in winning high-voltage systems projects, with a major award pending. This award follows the recent completion of a 345-kv solid dielectric dielectric (dī'ĭlĕk`trĭk), material that does not conduct electricity readily, i.e., an insulator (see insulation). A good dielectric should also have other properties: It must resist breakdown under high voltages; it should not cable system on the west coast. This is the first application of this new technology in the U.S. at this voltage range. For these projects, General Cable provides not only cable connectors, but also a complete set of services including engineering, installation supervision and on-site jointing," Kenny said. Net sales for the Company's global electrical infrastructure business were up 28% on a metal-adjusted basis from the third quarter of 2005 with acquired revenues contributing about 16 points of the growth, or $40 million. The Company continues to leverage its global sales and technology teams in the high-growth mining, oil, gas and petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. markets by identifying new product opportunities for these specialized applications. Operating earnings for the Company's electrical infrastructure businesses were up seven-fold to $19.6 million in the third quarter of 2006 versus 2005. As a percentage of metal-adjusted revenue, operating margins grew 530 basis points to 6.4% in the third quarter of 2006 compared to 2005. The increase in operating margins for the Company's global electrical infrastructure business is primarily a result of improved utilization of the Company's manufacturing facilities, increasing end-market demand and increased pricing for the Company's products in these markets. The communications markets continue to show strength for high-bandwidth data networking cables and systems, while demand for outside plant telephone cable continues to decline. The decline in demand for telephone cable experienced in the third quarter is primarily a result of increasing fiber optic deployment at some customers and was possibly exacerbated by high copper costs as well as other competing voice and data networking technologies. Demand for high-bandwidth data networking cables continues to accelerate. Net sales for networking cables were up 38% in the third quarter of 2006 compared to 2005 as a result of improved end market demand, increased market prices, and the addition of specialty application networking cables acquired from Silec. Despite the lower telecommunication cable sales, operating earnings for the Company's communications businesses were $6.6 million, up 20% from the third quarter of 2005. This was primarily a result of improved market pricing and a lower fixed cost structure resulting from the closure of the Bonham, Texas ♦Bonham is a city in Fannin County, Texas, United States. The population was 9,990 at the 2000 census. It is the county seat of Fannin CountyGR6. facility in August of 2005. Selling, general and administrative expenses in the third quarter of 2006 were $56.2 million compared to $42.6 million in the third quarter of 2005. This increase is due principally to the addition of Silec, a cable manufacturer and systems integrator, and Beru, both of which were acquired in late 2005. We also saw increased variable selling expenses on higher revenues, and associate incentive expenses related to the Company's strong 2006 performance. Selling, general and administrative expenses were 5.9% and 5.2% of metal-adjusted net sales in the third quarter of 2006 and 2005, respectively. The Company's effective tax rate for the third quarter of 2006 was 35.9%; slightly lower than the expected full year rate of 36.5% due to an international deferred tax adjustment of approximately $0.3 million. E.C.N. Cable Group, S.L. During the third quarter, the Company completed the acquisition of E.C.N. Cable Group, S.L. (ECN (Electronic Communications Network) A computerized, private financial trading system. Terra Nova Trading (www.terranovatrading.com) and Instinet (www.instinet.com) are examples. ). ECN is located near Bilbao, Spain and primarily manufactures energy cables. The acquisition further expands the Company's European energy cable offering with high-voltage aerial cables and increases the Company's capacity for low and medium-voltage insulated power cable products used in electric transmission and distribution lines. ECN, with annual revenues of approximately $70 million, will be quickly integrated and managed through the Company's European headquarters in Barcelona, Spain. "This acquisition is timely as we anticipate renewed investment in the aerial high voltage The term high voltage characterizes electrical circuits, in which the voltage used is the cause of particular safety concerns and insulation requirements. High voltage is used in electrical power distribution, in cathode ray tubes, to generate X-rays and particle beams, to transmission grid in Europe coupled with strong ongoing demand for medium voltage utility products," Kenny said. Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. Dividend In accordance with the terms of the Company's 5.75% Series A Convertible Redeemable Preferred Stock, the Board of Directors has declared a regular quarterly preferred stock dividend of approximately $0.72 per share. The dividend is payable on November 24, 2006 to preferred stockholders of record as of the close of business on October 31, 2006. The Company expects the quarterly dividend payment to approximate $0.1 million. Fourth Quarter 2006 Outlook Commenting on the outlook for the fourth quarter of 2006, Kenny said "Despite increased inventories and rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting by some distributors who bought ahead of a rising copper market, demand and pricing in many of our end markets continue to be strong going into the seasonally slower winter months. In particular, we expect organic metal-adjusted double-digit revenue growth versus the prior year for our global Electric Utility business. Overall, for the fourth quarter we expect revenues between $900 and $925 million and fully diluted earnings per share of between $0.55 and $0.60, an increase of roughly 100% from the adjusted earnings per share of $0.29 in the fourth quarter of 2005," Kenny concluded. General Cable will discuss third quarter results on a conference call and webcast at 8:30 a.m. ET tomorrow, October 31. For more information please see our website at www.generalcable.com. With $3.5 billion of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues and 7,700 employees, General Cable (NYSE:BGC) 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, and communications markets. Visit our website at www.generalcable.com. Certain statements in this press release, including without limitation, statements regarding future financial results and performance, plans and objectives, capital expenditures and the Company's or management's beliefs, expectations or opinions, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Actual results may differ materially from those statements as a result of factors, risks and uncertainties over which the Company has no control. Such factors include the economic strength and competitive nature of the geographic markets that the Company serves; economic, political and other risks of maintaining facilities and selling products in foreign countries; changes in industry standards and regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. ; advancing technologies, such as fiber optic and wireless technologies; volatility in the price of copper and other raw materials, as well as fuel and energy and the Company's ability to reflect such volatility in its selling prices; interruption of supplies from the Company's key suppliers; the failure to negotiate extensions of the Company's labor agreements on acceptable terms; the Company's ability to increase manufacturing capacity and achieve productivity improvements; the Company's dependence upon distributors and retailers for non-exclusive sales of certain of the Company's products; pricing pressures in the Company's end markets; the Company's ability to maintain the uncommitted accounts payable or accounts receivable financing Accounts Receivable Financing A type of asset-financing arrangement in which a company uses its receivables - which is money owed by customers - as collateral in a financing agreement. The company receives an amount that is equal to a reduced value of the receivables pledged. arrangements in its European operations; the impact of any additional charges in connection with plant closures and the Company's inventory accounting practices; the impact of certain asbestos litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , unexpected judgments or settlements and environmental liabilities; the ability to successfully identify, finance and integrate acquisitions; the impact of terrorist attacks or acts of war Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. which may affect the markets in which the Company operates; the Company's ability to retain key employees; the Company's ability to service debt requirements and maintain adequate domestic and international credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and credit lines; the impact on the Company's operating results of its pension accounting practices; the Company's ability to avoid limitations on utilization of net losses for income tax purposes; volatility in the market price of the Company's common stock all of which are more fully discussed in the Company's Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission on March 15, 2006, as well as periodic reports filed with the Commission [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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