HIGHLAND HEIGHTS, Ky.–(BUSINESS WIRE)– General Cable Corporation (NYSE: BGC) heeft vandaag de resultaten over het tweede kwartaal van 2016, dat op 1 juli eindigde, bekendgemaakt. De nettowinst per aandeel uit voortgezette bedrijfsvoering was in het kwartaal $0,68 en het bedrijfsresultaat uit voortgezette bedrijfsvoering was $58 miljoen. Het bedrijf boekte in het kwartaal een gecorrigeerde winst per aandeel uit voortgezette bedrijfsvoering van $0,30 en een gecorrigeerd bedrijfsresultaat uit voortgezette bedrijfsvoering van $49 miljoen. Zie pagina 3 en 4 van deze persverklaring voor de afstemming van gerapporteerde naar aangepaste resultaten en gerelateerde vermeldingen.
Michael T. McDonnell, president en ceo, zei: ”Onze solide financiële prestatie in het kwartaal, behaald ondanks een relatief zwakke en onstuimige vraagomgeving, geeft de resultaten van onze geconcentreerde uitvoering en de significante operationele verbeteringen die we in het bedrijf hebben gemaakt.”
General Cable Reports Second Quarter 2016 Results
HIGHLAND HEIGHTS, Ky.–(BUSINESS WIRE)– General Cable Corporation (NYSE: BGC) reported today results for the second quarter ended July 1, 2016. For the quarter, reported diluted earnings per share from continuing operations was $0.68 and reported operating income from continuing operations was $58 million. The Company generated adjusted earnings per share from continuing operations for the quarter of $0.30 and adjusted operating income from continuing operations of $49 million. See page 3 and 4 of this press release for the reconciliation of reported to adjusted results and related disclosures.
Michael T. McDonnell, President and Chief Executive Officer, said, “Our solid financial performance in the quarter, generated in spite of a relatively weak and choppy demand environment, reflects the results of our focused execution and the significant operational improvements that we have made in the Company. Adjusted operating income from continuing operations was at the top of the guidance range, excluding the unfavorable metal price impact in the quarter relative to guidance assumptions. We also continued to simplify and focus our portfolio with the sale of three businesses and applied the proceeds toward reducing our outstanding borrowings.”
Second Quarter Summary
North America – excluding aerial transmission product shipments, unit volume was flat versus the first quarter of 2016 and up 4% year over year. For the second quarter, stronger demand for electric utility distribution and construction cables was partially offset by weaker demand for industrial and specialty products, particularly those tied to oil and gas applications.
Europe – unit volume was up 7% versus the first quarter of 2016 driven by demand for electric utility cables including land-based turnkey projects and energy products. Excluding the impact of restructuring activity, such as the exit from certain low value-add end markets, unit volume year over year was flat.
Latin America – excluding aerial transmission product shipments in Brazil, unit volume was up 8% versus the first quarter of 2016 as seasonal demand improved across the region. Year over year, unit volume excluding aerial transmission product shipments was down 1% as end market demand remains under pressure throughout the region due to the ongoing difficult economic conditions and reduced government spending.
Other income of $9 million for the second quarter consisted of mark-to-market gains of $4 million on derivative instruments accounted for as economic hedges and foreign currency transaction gains of $5 million, of which $3 million relates to foreign currency transaction gains in Africa.
At the end of the second quarter 2016, the first quarter of 2016 and the fourth quarter of 2015, total debt was $1,024 million, $1,147 million and $1,067 million, respectively, and cash was $63 million, $87 million and $79 million, respectively. At the end of the second quarter 2016 net debt of $961 million decreased $99 million from the first quarter of 2016 and $27 million from the end of 2015. The decrease in net debt is principally due to cash proceeds from divestitures and the efficient management of working capital including inventory levels and collections from subsea turnkey projects.
Update on CFO Transition
The Company’s Board of Directors named Chris Kreidler to serve as Interim Chief Financial Officer, effective August 12, 2016. Mr. Kreidler will replace Brian Robinson, who, as communicated in March of 2016, is leaving the company to pursue other opportunities. The Company’s search, with the assistance of Heidrick & Struggles, for a permanent replacement CFO is advancing. Mr. Kreidler most recently served as Executive Vice President and CFO at Sysco Corporation and during his 28-year career, he also held numerous leadership roles across Yum! Brands and C&S Wholesale Grocers. Mr. Kreidler holds a bachelor’s degree and an MBA from Rice University. “We are pleased to welcome Chris to General Cable as Interim CFO,” McDonnell continued “Chris brings decades of experience in supporting companies with global operations, as well as a distinctive leadership capacity to manage teams and apply financial expertise to business management. We are confident that he will be a strong asset to the company as we conclude our active search for a permanent CFO.”
We have been reviewing, with the assistance of external counsel, our use and payment of agents in connection with, and certain other transactions involving, our operations in Angola, Thailand, India, China and Egypt (the “Subject Countries”). Our review has focused upon payments and gifts made, offered, contemplated or promised by certain employees in one or more of the Subject Countries, directly and indirectly, and at various times, to employees of public utility companies and/or other officials of state owned entities that raise concerns under the FCPA and possibly under the laws of other jurisdictions. During 2015, we substantially completed our internal review in the Subject Countries and, based on our findings, we increased our outstanding FCPA-related accrual to $28 million as of December 31, 2015. At this time, we are in early stages of discussions with the SEC and DOJ regarding the terms of a potential resolution of the ongoing investigations, and based on these discussions, we believe the amount of total probable disgorgement of profits, including pre-judgment interest, required to resolve the investigations is in the range of $33 million to $59 million. As a result, we have increased our existing accrual as of July 1, 2016 by $5 million to $33 million, which represents the low-end of the range. The amount accrued solely reflects profits and pre-judgment interest that may be disgorged and does not include, and we are not able to reasonably estimate, the amount of any possible fines, civil or criminal penalties or other relief, any or all of which could be substantial. The SEC and DOJ inquiries into these matters remain ongoing, and we continue to cooperate with the DOJ and the SEC with respect to these matters. At this time, we are unable to predict the nature of any action that may be taken by the DOJ or SEC or any remedies these agencies may pursue as a result of such actions.
Third Quarter 2016 Outlook
“In the third quarter, we are encouraged by the demand trends in our electric utility distribution and non-residential construction markets, which have been up mid-single digits year-over-year so far this year, but we still expect certain end market demand to be uneven, particularly in our industrial and specialty markets. We also expect the normal seasonal slowing in our European businesses and further easing of our subsea turnkey project business. We built our strategic roadmap precisely for this weak and uneven demand environment. I am pleased to say that all of our key roadmap initiatives in portfolio optimization, leading cost position, targeted growth and highly engaged culture are in progress and on track for substantial value creation,” McDonnell concluded.
Revenues in the third quarter are expected to be in the range of $900 to $950 million. Unit volume is anticipated to be flat to up low-single digits sequentially. Reported operating income from continuing operations is anticipated to be in the range of $32 to $47 million and adjusted operating income from continuing operations is anticipated to be in the range of $35 to $50 million for the third quarter. Reported diluted earnings per share are anticipated to be in the range of $0.06 to $0.26 per share and adjusted earnings per share are expected to be in the range of $0.10 to $0.30 per share for the third quarter. The movement of metal prices is not anticipated to have a material impact on the third quarter outlook which assumes copper (COMEX) and aluminum (LME) prices of $2.20 and $0.73, respectively. Foreign currency exchange rates are assumed constant in the third quarter outlook. The third quarter outlook for adjusted operating results does not include results from Asia Pacific and Africa.
Non-GAAP Financial Measures
Adjusted operating income from continuing operations (defined as operating income from continuing operations before extraordinary, nonrecurring or unusual charges and other certain items), adjusted earnings per share from continuing operations (defined as diluted earnings per share from continuing operations before extraordinary, nonrecurring or unusual charges and other certain items) and net debt (defined as long-term debt plus current portion of long-term debt less cash and cash equivalents) are “non-GAAP financial measures” as defined under the rules of the Securities and Exchange Commission. Metal adjusted revenues, adjusted operating income and return on metal-adjusted sales on a segment basis, non-GAAP financial measures, are also provided herein. See “Segment Information.”
These Company-defined non-GAAP financial measures exclude from reported results those items that management believes are not indicative of our ongoing performance and are being provided herein because management believes they are useful in analyzing the operating performance of the business and are consistent with how management reviews our operating results and the underlying business trends. Use of these non-GAAP measures may be inconsistent with similar measures presented by other companies and should only be used in conjunction with the Company’s results reported according to GAAP. Adjusted results, for periods prior to the fourth quarter of 2015, reflect the removal of the impact of our Venezuelan operations on a standalone basis. Effective as of the end of the third quarter 2015, we deconsolidated our Venezuelan subsidiary and began accounting for our investment in our Venezuelan subsidiary using the cost method of accounting. Historical segment adjusted operating results are disclosed in the Second Quarter 2016 Investor Presentation available on the Company’s website.
A reconciliation of GAAP operating income (loss) from continuing operations and diluted earnings (loss) per share from continuing operations to adjusted operating income from continuing operations and earnings (loss) per share from continuing operations follows:
The following reconciliation of estimated operating income from continuing operations and diluted earnings per share from continuing operations to adjusted operating income from continuing operations and adjusted earnings per share from continuing operations for the third quarter of 2016 contains forward-looking information. All forward-looking information involves risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking information as a result of factors, risks and uncertainties over many of which we have no control. See “Cautionary Statement Concerning Forward-Looking Statements” at the end of this press release.
Conference Call and Investor Presentation
General Cable will discuss second quarter results on a conference call that will be broadcast live at 8:30 a.m., ET, on August 4, 2016. The live webcast of the Company’s conference call will be available in listen only mode and can be accessed through the Investor Relations page on our website atwww.generalcable.com. Also available on our website is a copy of an Investor Presentation that will be referenced throughout the conference call.
General Cable Corporation (NYSE:BGC) is a global leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products and systems for the energy, industrial, specialty, construction and communications markets. Visit our website at www.generalcable.com.
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. Forward looking statements include, among others, expressed expectations with regard to the following: “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 exchange rate fluctuations; impact of future impairment charges; compliance with U.S. and foreign laws, including the Foreign Corrupt Practices Act; our ability to achieve the anticipated cost savings, efficiencies and other benefits related to our restructuring program and other strategic initiatives, including our plan to exit all of our Asia Pacific and African operations, 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 February 29, 2016, 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.
TABLES TO FOLLOW
General Cable Corporation