This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

General Cable Reports Third Quarter Results; Adjusted EPS Of $0.60 Within Management’s Range Of Expectations; Operating Income Of $75.4 Million Exceeded Management’s Range Of Expectations; Announces Agreement To Acquire Prestolite Wire, LLC

General Cable Corporation (NYSE: BGC), one of the most globally diversified industrial companies, reported today results for the third quarter ended September 28, 2012. Non-GAAP adjusted earnings per share of $0.60 were within management’s range of expectations. Included in this result is $0.12 per share of additional tax expense recorded in the third quarter reflecting an increase in the Company’s estimated full year effective tax rate with the cumulative adjustment of the first half of the year being reported in the third quarter as well as other incremental discrete tax items. Operating income of $75.4 million exceeded management’s range of expectations for the third quarter as operating results in the Company’s Rest of World (ROW) segment and increased submarine and land based turnkey project activity more than offset seasonal declines in many of the businesses in the Company’s North American and Europe and Mediterranean segments. Diluted earnings per share for the third quarter of 2012 were $0.62. A reconciliation of Non-GAAP earnings per share to GAAP earnings per share and adjusted operating income to reported operating income is included on page 5 of this press release.

The Company’s reported results for the third quarter of 2012 include less than one fiscal month of incremental net sales and unit volume from the Alcan Cable North America acquisition completed on September 4, 2012. The business contributed approximately $48 million of net sales on 21 million aluminum pounds sold during this period. As expected, Alcan Cable North America earnings for this period were de minimis as purchase accounting adjustments offset the base earnings in the business. All unit volume comparisons on the Company’s base business discussed throughout this press release exclude the 21 million incremental contribution of metal pounds sold attributable to this acquisition unless otherwise noted.

Highlights

  • Adjusted EPS of $0.60 within management’s guidance and operating income of $75.4 million exceeded management’s guidance of $65 to $75 million
  • Completed the acquisition of the North American portion of Alcan Cable which further enhances the Company’s electric utility and construction product offering in North America
  • Completed the acquisition of a majority interest in Procables, S.A. of Colombia on October 1, 2012; expanding the Company’s market position in the Andean region and its geographic coverage throughout the Americas, which is one of the most extensive in the wire and cable industry
  • Signed definitive agreement to acquire Prestolite Wire, LLC which offers a broad range of wire and cable products serving predominately transportation original equipment manufacturers (OEM) and distributors
  • Amended and enlarged the Company’s U.S. and Canadian asset-based revolving credit facility by increasing the size to $700 million and extending its maturity date to 2017; enhancement principally supports the acquisition of Alcan Cable while maintaining financial flexibility and liquidity
  • Solidified the capital structure while tranching out the debt maturity profile with the issuance of $600 million of 5.75% senior notes due in 2022; completed the call of $200 million of 7.125% senior fixed rate notes due in 2017 on October 12th; retired $11 million of 1.0% senior convertible notes due in 2012 on October 15th
  • Board of Directors authorized another $125 million share repurchase program; under the existing share repurchase authorization, which expired on October 28 th , the Company repurchased $63.7 million or about 5% of its common shares over the past 12 months

Restatement

The Company has identified certain inventory related accounting errors in two facilities located in Brazil and a third facility located in South Africa within the Company’s ROW segment that were erroneously computing cost of sales over the course of several years, resulting in an understatement of cost of goods sold and an overstatement of ending inventory. All three locations were utilizing the same system and related process, which, with respect to work-in-process and finished goods, incorrectly computed cost of sales. In addition, because the erroneous process was in place at one of the Brazilian facilities prior to the Company’s acquisition of Phelps Dodge International Corporation (“PDIC”) in 2007, the Company overstated inventory in its allocation of the purchase price among assets acquired, resulting in an understatement of goodwill.

1 of 8

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs