HIGHLAND HEIGHTS, Ky.--(BUSINESS WIRE)--General Cable Corporation (NYSE: BGC) reported today results for the fourth quarter ended December 31, 2017. For the quarter, reported earnings per share was $0.31 and reported operating income was $8 million. Adjusted earnings per share and adjusted operating income were $0.03 and $20 million, respectively, for the quarter. See page two 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 fourth quarter reflects improved performance in Latin America and demand stability of key businesses in North America (electric utility, construction and automotive) and Europe (land turnkey). Although industry dynamics, especially in Europe, and business uncertainties resulting from our review of strategic alternatives did impact results, our 2018 outlook is positive based on trends we have seen since the beginning of this year.” McDonnell added, “We are also pleased to have now received our stockholders’ approval for the pending merger with Prysmian S.p.A., and we continue to expect the merger to be completed by the third quarter of 2018, subject to regulatory approvals and other customary conditions.”

Summary

• Announced, at its special meeting of common stockholders on February 16, 2018, a majority of the votes cast, which also represented a majority of the outstanding shares of the Company’s common stock, voted to approve the adoption of the previously announced definitive merger agreement under which Prysmian will acquire General Cable for $30.00 per share in cash
• Reported operating income of $8 million primarily impacted by charges of $15 million related to the review of strategic alternatives that resulted in the previously announced definitive merger agreement with Prysmian
• Adjusted operating income of $20 million decreased $7 million year over year as restructuring savings and continued performance improvement in Latin America were offset by ongoing challenging industry dynamics particularly in Europe and unfavorable product mix in North America
• Operating cash flow was a use of $39 million for the full year of 2017 including payments totaling $82 million for the resolution of FCPA related matters
• Completed the divestiture program focused on the sale or liquidation of non-core operations in Asia Pacific and Africa generating total proceeds of approximately $260 million consistent with management’s expectations
• Maintained significant liquidity with $326 million of availability on the Company’s $700 million asset-based revolving credit facility and $85 million of cash and cash equivalents
• Impact of rising metal prices was a benefit of $4 million and $5 million for the fourth quarter of 2017 and 2016, respectively

Fourth Quarter Segment Demand

North America – Unit volume as measured in metal pounds sold was up 5% versus prior year driven by stronger demand for aerial transmission cables and construction products.

Europe – Unit volume as measured in metal pounds sold was up 6% versus prior year as stronger demand for electric utility products including land turnkey projects helped to more than offset lower subsea project activity and weakness in industrial and construction markets.

Latin America – Unit volume as measured in metal pounds sold was down 6% versus prior year driven by uneven spending on electric infrastructure and construction projects throughout the region as well as the impact of the Company’s go-to-market initiatives (focused on margin improvement). Shipments of aerial transmission cables in Brazil were up sharply year over year.

Net Debt

At the end of 2017 and 2016, total debt was $1,086 million and $939 million, respectively, and cash and cash equivalents were $85 million and $101 million, respectively. The increase in net debt was principally driven by payments totaling $82 million related to the resolution of FCPA matters as well as investments in working capital (partly due to higher metal prices) and funding of restructuring actions.

Other Matters – Income Taxes

The enactment of the Tax Cuts and Jobs Act (“Tax Reform Act”) provides for a one-time deemed taxable repatriation of the Company’s off-shore accumulated earnings. This deemed repatriation resulted in a preliminary estimate of $46 million of noncash deferred tax expense in the fourth quarter of 2017 as the deemed repatriation income was offset by existing net operating losses. In addition, the Tax Reform Act provides for the reduction of the U.S. corporate income tax rate from 35% to 21%, effective for 2018. Accordingly, the Company’s deferred tax assets and liabilities were required to be remeasured in the fourth quarter of 2017 resulting in a preliminary estimated noncash deferred tax benefit of approximately $62 million. Prospectively, the Company expects its reported earnings to be favorably impacted by the reduced U.S. tax rate.

Non-GAAP Financial Measures

Adjusted operating income (defined as operating income before extraordinary, nonrecurring or unusual charges and other certain items), adjusted earnings per share (defined as diluted earnings per share 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 (“SEC”). Metal-adjusted revenues, and return on metal-adjusted sales on a segment basis, both of which are 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. Historical segment adjusted operating results are disclosed in the Fourth Quarter 2017 Investor Presentation available on the Company’s website.

A reconciliation of GAAP operating income (loss) and diluted earnings (loss) per share to adjusted operating income and earnings per share follows:

About General Cable

General Cable (NYSE:BGC), with headquarters in Highland Heights, Kentucky, is a global leader in the development, design, manufacture, marketing and distribution of aluminum, copper and fiber optic wire and cable products for the energy, communications, automotive, industrial, construction and specialty segments. General Cable is one of the largest wire and cable manufacturing companies in the world, operating manufacturing facilities in its core geographical markets, and has sales representation and distribution worldwide. For more information about General Cable visit our website at www.generalcable.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release including, without limitation, statements regarding future financial results and performance, plans and objectives, capital expenditures, understanding of competition, projected sources of cash flow, potential legal liability, proposed legislation and regulatory action, and our management’s beliefs, expectations or opinions, are forward-looking statements, and as such, we desire to take advantage of the “safe harbor” which is afforded to such statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words “believe,” “expect,” “may,” “anticipate,” “intend,” “estimate,” “project,” “plan,” “assume,” “seek to” or other similar expressions, or the negative of these 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, risks and uncertainties include, but are not limited to, the following: (1) general economic conditions, particularly those in the construction, energy and information technology sectors; (2) the volatility in the price of raw materials, particularly copper and aluminum; (3) the announced review of strategic alternatives, including a potential sale of the Company, and the decision to engage or not to engage in any strategic alternative, could cause disruptions in the business; (4) our ability to maintain or negotiate and consummate new business or strategic relationships or transactions; (5) impairment charges with respect to our long-lived assets; (6) our ability to execute our plan to exit all of our Asia Pacific and African operations; (7) our ability to achieve all of our anticipated cost savings associated with our previously announced global restructuring plan; (8) our ability to invest in product development, to improve the design and performance of our products; (9) economic, political and other risks of maintaining facilities and selling products in foreign countries; (10) domestic and local country price competition; (11) our ability to successfully integrate and identify acquisitions; (12) the impact of technology; (13) our ability to maintain relationships with our distributors and retailers; (14) the changes in tax rates and exposure to new tax laws; (15) our ability to adapt to current and changing industry standards; (16) our ability to execute large customer contracts; (17) our ability to maintain relationships with key suppliers; (18) the impact of fluctuations in foreign currency rates; (19) compliance with foreign and U.S. laws and regulations, including the Foreign Corrupt Practices Act; (20) our ability to negotiate extensions of labor agreements; (21) our ability to continue our uncommitted accounts payable confirming arrangements; (22) our exposure to counterparty risk in our hedging arrangements; (23) our ability to achieve target returns on investments in our defined benefit plans; (24) possible future environmental liabilities and asbestos litigation; (25) our ability to attract and retain key employees; (26) our ability to make payments on our indebtedness; (27) our ability to comply with covenants in our existing or future financing agreements; (28) lowering of one or more of our debt ratings; (29) our ability to maintain adequate liquidity; (30) our ability to maintain effective disclosure controls and procedures and internal control over financial reporting; (31) the trading price of our common stock; and (32) other material factors.

See Item 1A of the Company’s 2016 Annual Report on Form 10-K as filed with the SEC on February 24, 2017 and subsequent SEC filings for a more detailed discussion on some of these risks.

Forward-looking statements reflect the views and assumptions of management as of the date of this press release with respect to future events. The Company 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. The inclusion of any statement in this press release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

TABLES TO FOLLOW

Contacts

General Cable Corporation
Investor Relations, 859-572-8684