HIGHLAND HEIGHTS, Ky. -- (Business Wire)
General Cable Corporation (NYSE: BGC) expects to report that its North
America and Rest of World (ROW) businesses finished the year with a
positive operating performance in the fourth quarter, excluding the
impact of certain items. The acquisitions of Alcan Cable North America,
Prestolite and Procables (Colombia) are also expected to contribute
meaningfully to the fourth quarter results. However, the Company now
expects adjusted operating income for the fourth quarter in the range of
$45 to $47 million, which includes the absorption of $12 million of
expenses related to the revised estimated profitability of certain
submarine turnkey projects. The Company expects reported operating
income in the range of $2 to $4 million for the fourth quarter. The
Company expects the following items will negatively affect its reported
fourth quarter results:
-
An equipment failure at the Company’s submarine power cable
manufacturing facility in Germany as well as submarine turnkey project
delays and deferrals are expected to result in one-time charges in the
range of $16 million
-
Other items consisting of year-end adjustments in ROW including
financial restatement and forensic investigation costs, one-off
restructuring-related tax charges, acquisition costs and
severance-related charges in Spain, which are collectively expected to
result in charges in the range of $37 million
Submarine Turnkey Projects - The Company is in the process of
finalizing the impact of the equipment failure and continued project
delays/deferrals and has initiated steps to potentially recover certain
of these costs through legal action and insurance coverage.
Other Items - During the fourth quarter, the Company expects to
record several year-end adjustments in ROW particularly as it relates to
the collectability of certain customer accounts receivable, a portion of
which are in dispute, as well as the net realizable value of certain
other assets. The Company also restructured its legal entities to
integrate the Alcan Cable Canada business, which will result in a more
tax efficient structure going forward. The Company does not expect to
experience this level of adjustments in ROW going forward nor does the
Company expect to incur restructuring-related tax charges or financial
restatement and forensic investigation costs on a regular basis as these
items relate to specific events and transactions experienced in 2012.
Initial View of 2013 Business Trends - “Despite the impact of
these items in the fourth quarter of 2012, we believe demand growth
drivers in important markets in North America and ROW are fundamentally
unchanged. We are also encouraged by the performance of recent
acquisitions including Alcan Cable, Prestolite and Procables as well as
the potential of our long-term growth investments in Brazil, India,
Mexico, Peru, and South Africa. For 2013, the Company is expecting to
generate operating income in the range of $300 - $340 million as we
focus on the integration of recent acquisitions and continuous
improvement at our manufacturing facilities around the world. Unit
volume for 2013 is expected to be in the range of 1.4 to 1.5 billion
metal pounds, including approximately 350 to 400 million metal pounds
from acquisitions completed in 2012. For 2013, we expect our recent
acquisitions along with our base business in the Americas, Africa, and
Asia Pacific to continue to show improvement. Our Europe and
Mediterranean segment is expected to contribute in the range of 3-6% of
overall operating income in 2013 driven by our businesses throughout the
region as our Iberian and submarine turnkey project businesses are
expected to operate around breakeven. While the Spanish end market is
expected to remain difficult in 2013, our actions taken in Spain over
the last four years to reduce our ongoing cost base and deliver growth
in our exports from Spain should help offset continuing weakness in the
domestic market,” said Gregory B. Kenny, President and Chief Executive
Officer of General Cable.
Summary of items excluded from adjusted results:
A summary and the Company’s current estimate of items expected to affect
fourth quarter reported results follows:
In millions
|
|
Q4 2012
Estimated Items (1) |
|
Q4 2012
Estimated
EPS Impact (2) |
Submarine turnkey project business
| | | | | | |
Equipment failure and project delays/deferrals
| |
$
|
16
| |
$
|
0.31
|
Other items
| | | | | | |
ROW year-end adjustments
| | | | | | |
Disputed accounts receivable
| | |
9
| | |
0.14
|
Other year-end adjustments
| | |
10
| | |
0.15
|
Restatement and forensic investigation costs, acquisition and
severance-related charges in Spain
| | |
8
| | |
0.12
|
| | | | | |
|
One-off tax charge in connection with the restructuring of legal
entities to integrate the Alcan Cable Canada business
| | |
10
| | |
0.20
|
Call premium for $200 million of 7.125% senior fixed rate notes and
related fee write-off (3) | | |
9
| | |
0.11
|
| |
|
| |
|
|
Total
| |
$
|
62
| |
$
|
1.03
|
| | | | | |
|
(1) |
| Items reflect the impact of specific events and transactions
experienced in the fourth quarter of 2012 |
(2) | | Computed based on the estimated effective tax rate for the
respective location/jurisdiction |
(3) | | Amount is consistent with management’s previously communicated
fourth quarter of 2012 outlook on October 29, 2012 |
| |
|
Updated fourth quarter outlook - Adjusted
operating income:
A summary of management’s updated expectations for the fourth quarter
follows:
In millions
|
|
Q4 2012 Outlook
|
Midpoint of management’s previous communication on October 29, 2012
of adjusted operating income range of $55 - $65
| |
$
|
60
|
| | |
|
Business performance(1) | | |
(1 - 3)
|
Absorption of submarine turnkey projects revised estimated
profitability
| | |
(12)
|
| |
|
|
Adjusted operating income range
| |
$
|
45- 47
|
| | |
|
(1) |
| Reflects current estimates which are subject to change due to
the normal year-end financial statement closing process to be
completed over the next two weeks |
| |
|
The Company will host a webcast tomorrow morning, February 8, 2013 at
10:00 a.m. ET. Chief Executive Officer Gregory B. Kenny and Chief
Financial Officer Brian J. Robinson will discuss the above items and the
Company’s initial view of 2013. Media and investors may access the live
audio webcast at www.generalcable.com
beginning at 10:00 a.m. ET on Friday, February 8, 2013. The webcast will
also be available for replay.
The Company will webcast a discussion of its fourth quarter 2012
earnings on Monday, February 25, 2013 at 10:00 a.m. ET. Chief Executive
Officer Gregory B. Kenny and Chief Financial Officer Brian J. Robinson
will discuss the fourth quarter results and provide additional
information on the Company’s 2013 expectations. The Company will also
provide an update on the expected timing of filing its restated
financial statements stemming from the inventory errors in Brazil and
South Africa as disclosed in previous Company filings with the
Securities and Exchange Commission. Based on the preliminary findings in
the internal review to date, the Company does not believe that its
previously disclosed estimates of the amounts of understated cost of
sales and overstated inventory will change materially. The news release
detailing the fourth quarter results will be issued before the market
opens on Monday, February 25, 2013. Media and investors may access the
live audio webcast at www.generalcable.com
beginning at 10:00 a.m. ET on Monday, February 25, 2013. The webcast
will also be available for replay.
Reconciliation of Non-GAAP Measures
In addition to reporting financial results in accordance with accounting
principles generally accepted in the United States (GAAP), we discuss
adjusted operating income for the fourth quarter of 2012 as adjusted for
certain items including charges for an equipment failure at the
Company’s submarine power cable manufacturing facility and submarine
turnkey project delays and deferrals, ROW year-end adjustments,
restatement and forensic investigation costs, acquisition costs and
severance-related charges in Spain. This Company-defined adjusted
measure is being provided because management believes it is useful in
analyzing the operating performance of the business and consistent with
how management reviews underlying business trends. This non-GAAP measure
may be inconsistent with similar measures presented by other companies
and should only be used in conjunction with our results reported
according to GAAP. A reconciliation of estimated operating income as
reported to estimated adjusted non-GAAP operating income follows:
In millions
|
|
Q4 2012
Outlook (1) |
Estimated operating income, GAAP
| |
$
|
2 - 4
|
Submarine business equipment failure and project delays/deferrals
| | |
16
|
ROW year-end adjustments
| | | |
Disputed accounts receivable
| | |
9
|
Other year-end adjustments
| | |
10
|
Restatement and forensic investigation costs, acquisition and
severance-related charges in Spain
| |
|
8
|
Estimated adjusted operating income, Non-GAAP
| |
$
|
45 - 47
|
| | |
|
(1) |
| Reflects current estimates which are subject to change due to
the year-end financial statement closing process to be completed
over the next two weeks |
| |
|
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, specialty, construction and communications
markets.For more information about General Cable products,
please contact your local sales representative or visit our Web site at www.generalcable.com.
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 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; the impact of unexpected future judgments or settlements
of claims and litigation; the impact of foreign currency fluctuations,
compliance with U.S. and foreign laws, the Company’s ability to
implement and make appropriate, timely and beneficial decisions as to
when, how and if to purchase shares under the repurchase 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 February 23,
2012, 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.
Contacts:
General Cable Corporation
Len Texter, Director, Investor Relations,
859-572-8684
Source: General Cable Corporation
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