General Cable Reports Third Quarter Results.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 ), one of the most globally diversified industrial companies, reported today revenues and earnings for the third quarter ended October 2, 2009. 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 for the third quarter of 2009 were $0.31. Included in these results were approximately $0.09 per share of non-cash net lower of cost or market lower of cost or market A method for determining an asset's value such that either the original cost or the current replacement cost, whichever is lowest, is used for financial reporting purposes. (LCM (Liquid Crystal Monitor) A flat panel display that uses the liquid crystal (LCD) technology. See flat panel display. ) and LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack inventory accounting related charges and $0.15 per share of non-cash interest charges resulting from a change in accounting for convertible debt. Before the impact of these items, adjusted non-GAAP earnings per share for the third quarter of 2009 would have been $0.55, at the upper end of management's indicated range of $0.45 to $0.55. Highlights * Reported revenues and adjusted earnings per share within range of management's guidance * Generated $228.9 million of cash flow from operating activities; $365.1 million year-to-date * Decreased net debt by $187.3 million to $764.4 million * Named one of Fortune's 100 Fastest Growing Companies for the third consecutive year 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 2009 were $1,081.8 million, a decrease of $362.6 million, or 25.1%, compared to the third quarter of 2008 on a metal-adjusted basis. Before the impact of $5.4 million of revenues from acquired businesses and $73.9 million related to the unfavorable impact of changes in foreign currency exchange rates, net sales for the third quarter decreased 21.5%. Volume based on metal pounds sold, without the impact of incremental volume from acquired businesses, decreased 20.5% in the third quarter of 2009 compared to 2008, and was down 7.3% compared to the second quarter of 2009. 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. before items was $49.4 million in the third quarter of 2009 compared to $121.4 million in the third quarter of 2008, a decrease of $72.0 million or 59.3%. The decrease in operating income was principally the result of a significant decline in prices in response to lower overall demand in many of the Company's end markets, lower capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. , and the unfavorable impact of changes in foreign currency translation, partially offset by lower selling, general and administrative expenses resulting from continuous cost improvement efforts. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: before items was 4.6% in the third quarter of 2009, a decrease of approximately 380 basis points from the operating margin of 8.4% in the third quarter of 2008 on a metal-adjusted basis. Gregory B. Kenny, President and Chief Executive Officer of General Cable, said, "The Company is facing a demand environment in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. which is much worse than the last recession earlier this decade, while demand in Iberia is off nearly 50%. Despite the significant contraction in our end markets, the actions we have taken over the last few years to geographically diversify the business and expand our product portfolio have enabled us to continue to report positive earnings and cash flows. The strong performance of our ROW segment in the third quarter demonstrates the benefit of our strategy to grow disproportionately in countries now developing their infrastructure. We have dedicated significant resources focused on LEAN initiatives over the years which are helping the Company through this difficult period. Over the last year, we have accelerated the removal of fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). which we expect should provide strong operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. over the next cycle." Liquidity and Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Despite a substantial increase in metal prices, net debt was $764.4 million at the end of the third quarter, down $187.3 million from the end of the second quarter of 2009. This decrease is principally the result of positive earnings coupled with reductions in working capital in each of the Company's geographic segments more than offsetting capital expenditures. The Company continues to maintain adequate liquidity to fund operations, which could include increased working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. as a result of higher metal costs, internal growth, and continuing product and geographic expansion opportunities. During the third quarter of 2009, the Company made no common share repurchases. Fourth Quarter 2009 Outlook and Macro Trends Kenny continued, "As we look forward, we expect the developing economies we serve to perform relatively better than the developed economies of the world. Business conditions in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , Africa and Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. are being buoyed by commodities, mining and infrastructure investment, aided by somewhat better credit markets. In the U.S., we expect continuing declines in non-residential construction spending Construction Spending An economic indicator that measures the amount of spending towards new construction. Released monthly by the U.S. Department of Commerce's Census Bureau, it looks at residential and non-residential construction in the private sector, and state and federal at as well as a residential construction market that will recover slowly. These are direct or indirect end markets for many of our products. After over a decade of exceptional growth, Spain continues to suffer from a severe correction in their construction markets and nearly 20% unemployment. We do not expect that this market will return to growth quickly. Finally, with industrial companies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. using less electricity for the last two years, we do not expect electric utility spending on the distribution network to increase next year in any meaningful way. However, we do expect the U.S. transmission and wind farm segments to begin to improve as the Stimulus Bill begins to gain traction over the next year. The continuing impact of weak demand and rapidly increasing metal costs will further pressure earnings in the fourth quarter. As a result of these ongoing weak conditions, the Company will reduce production further in the fourth quarter. This also will negatively impact our earnings in the fourth quarter while at the same time position the Company to be able to benefit from upside earnings leverage when conditions improve in our end markets. We are encouraged, however, by early indicators of economic recovery beginning to be discussed by major industrial companies as recovery in the economy and construction markets should eventually lead to meaningful improvements in wire and cable demand. For the fourth quarter, the Company expects to report earnings before the impact of non-cash convertible interest expense in the range of $0.20 to $0.30 per share while revenues are expected to be approximately $1.05 to $1.10 billion," Kenny concluded. A reconciliation of expected GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings per share is as follows: [TABLE OMITTED] 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, 2009 to preferred stockholders of record as of the close of business on October 31, 2009. The Company expects the quarterly dividend payment to be less than $0.1 million. Reconciliation of Non-GAAP Measures In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we discuss in this earnings release earnings per share and operating income for the third quarter of 2009 and 2008 as adjusted for the impact of net last-in first-out last-in first-out - stack (LIFO) and lower of cost or market (LCM) inventory accounting related items and the non-cash interest expense impact of the change in accounting for convertible debt. These Company-defined adjusted measures are being provided because management believes they are useful in analyzing the underlying operating performance of the business. These measures may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to accounting principles generally accepted in the United States. A reconciliation of earnings per share as reported and operating income as reported to adjusted non-GAAP earnings per share and adjusted non-GAAP operating income follows: [TABLE OMITTED] General Cable will discuss third quarter results on a conference call and webcast at 8:30 a.m. ET, October 26, 2009. For more information please see our website at www.generalcable.com. General Cable Corporation (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, 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. 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 including the impact of significant fluctuations in the value of the U.S. dollar against foreign currencies; changes in industry standards and regulatory requirements; 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; compliance with foreign and U.S. laws applicable to our international operations; potential adverse impact from environmental liabilities; risks from liabilities assumed in acquisitions; substantial indebtedness could adversely affect our business and financial condition; potential cross-defaults on our financing arrangements if we fail to comply with covenants and other provisions of financing arrangements; impact of a downgrade in our financial strength; 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 and credit lines; the impact on the Company's operating results of its pension accounting practices; 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/A filed with the Securities and Exchange Commission on May 8, 2009 as well as periodic reports filed with the Commission. Release No. 0625 10/26/09 [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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