Thomas & Betts Corporation Reports Fourth Quarter and Full Year 2005 Earnings; Fourth Quarter Sales Up 11 Percent; Earnings Per Share $0.42; E.P.S. Includes $0.27 Charge for Repatriated Foreign Earnings

Business Wire, Feb 6, 2006

MEMPHIS, Tenn. -- Thomas & Betts Corporation (NYSE: TNB) today reported fourth quarter 2005 net earnings of $25.8 million or $0.42 per diluted share. These results include an income tax charge of $16.4 million ($0.27 per share) related to the repatriation of $200 million in foreign earnings during the quarter. In 2004, fourth quarter net earnings were $24.2 million or $0.40 per diluted share.

Fourth quarter 2005 net sales rose 10.7 percent to $443.0 million, compared to $400.1 million in the prior-year period. Higher sales volume and price increases to offset higher material and energy costs contributed significantly to the sales improvement. The effect of foreign currency on sales was not significant in the quarter.

Earnings from operations were $59.2 million in the quarter, up $18.7 million or 46.0 percent compared to $40.5 million reported in the fourth quarter 2004. As a percentage of sales, fourth quarter earnings from operations improved to 13.4 percent from 10.1 percent in the prior year period. Higher sales volumes, favorable mix and operating efficiency improvements contributed to the earnings increase in 2005.

Fourth quarter 2005 gross margin was 30.4 percent of sales, compared to 28.5 percent in the prior year period. Selling, general and administrative expense was $75.4 million, or 17.0 percent of sales, compared to $73.7 million, or 18.4 percent of sales, in the fourth quarter 2004.

Income tax expense reflected favorable adjustments of $3.9 million ($0.06 per share) in the fourth quarter 2005 while the prior-year period included favorable adjustments of approximately $0.8 million ($0.01 per share).

"Each of our businesses continued to perform well in the fourth quarter, achieving robust year-over-year sales growth and double-digit segment earnings as a percent of sales," said Dominic J. Pileggi, chairman and chief executive officer. "We are also pleased with the strong sales and earnings momentum realized for the full year. We successfully offset higher material and energy costs, further improved operating efficiencies and delivered very strong operating cash flow."

FULL YEAR RESULTS

Net sales for the full year 2005 were $1.7 billion, up 11.8 percent from 2004 net sales of $1.5 billion. Higher sales volume and price increases to offset higher material and energy costs contributed significantly to the sales improvement while favorable foreign currency exchange accounted for approximately $22 million of the sales increase.

2005 net earnings were $113.4 million or $1.86 per diluted share. This compares to $93.3 million or $1.57 per diluted share in 2004. 2005 results include the previously noted income tax charge of $16.4 million ($0.27 per share) related to the repatriation of foreign earnings while 2004 results benefited from a $13.0 million pre-tax gain ($0.14 per share) from the sale of a minority interest in a European joint venture. Both periods reflect favorable income tax adjustments.

SEGMENT RESULTS

Electrical segment fourth quarter sales were $352.5 million, a 9.6 percent increase over the fourth quarter 2004. For the full year, electrical segment sales were $1.4 billion compared to $1.3 billion in 2004. Improved sales volume and higher selling prices contributed significantly to the sales growth. The effect of foreign currency was not significant in the quarter and accounted for approximately $21 million of the sales increase for the full year. Solid demand in industrial, light commercial construction and utility distribution markets drove the sales improvement.

Electrical segment earnings were $44.9 million in the fourth quarter, up 52.6 percent compared to the fourth quarter 2004, while full year 2005 segment earnings increased 34.5 percent to $161.8 compared to 2004. As a percent of sales, fourth quarter segment earnings were 12.7 percent in 2005 and 9.2 percent in 2004. For the full year, segment earnings were 11.7 percent of sales in 2005 compared to 9.6 percent for full year 2004. The earnings improvement reflects higher sales volumes, operating efficiencies and the company's continued ability to offset higher material and energy costs through higher selling prices.

Sales in the Steel Structures segment were $49.5 million in the quarter, up 20.3 percent compared to the prior year period. For the full year, segment sales were $186.0 million, up 33.2 percent on a year-over-year basis. Continued strong demand by utilities and the company's increased manufacturing capacity contributed to the sales improvement.

Steel Structures segment earnings were $8.2 million in the fourth quarter, up 24.6 percent from $6.6 million in segment earnings in the prior-year period. Full year 2005 segment earnings increased 84.7 percent to $29.0 million, compared to $15.7 million in 2004. As a percent of sales, fourth quarter 2005 segment earnings were 16.6 percent compared to 16.1 percent in the fourth quarter 2004. For the full year, segment earnings were 15.6 percent of sales compared to 11.2 percent in 2004. Higher sales volumes and favorable mix drove the year-over-year earnings improvement.