General Cable Corporation (NYSE: BGC), a leader in the
development, design, manufacture, marketing and distribution of
copper, aluminum and fiber optic wire and cable products for the
energy, industrial, and communications markets, announced today
that its Board of Directors has initiated a review of strategic
alternatives to maximize shareholder value, including a potential
sale of the Company. The Company has engaged J.P. Morgan Securities
LLC as financial advisor and Sullivan & Cromwell LLP as legal
advisor to assist in the process.
John E. Welsh, III, Non-Executive Chairman of the Board, said,
“After careful consideration, our Board has determined to undertake
a review of strategic alternatives with the goal of maximizing
shareholder value. While the management team has made excellent
progress in the execution of our strategic roadmap to transform the
Company into a more focused, efficient and innovative organization,
we expect the industry to consolidate over time and believe the
review at this time is in the best interests of shareholders.”
Michael T. McDonnell, President and Chief Executive Officer,
said, “I am proud of the efforts of our people to transform our
business over the last two years, including rationalizing the asset
base and refocusing on core businesses, streamlining our supply
chain, and accelerating profitable growth in key segments. While we
are benefiting from these significant operational and financial
performance improvements, current dynamics in our industry are
masking those accomplishments, and we expect that trend to continue
through the second half of 2017 and into 2018. As the Board
conducts its review, we remain committed to executing our plan, to
competing and to continuing to deliver innovative wire and cable
solutions that exceed customer expectations.”
There can be no assurance that the Board’s strategic review will
result in any transaction, or any assurance as to its outcome or
timing. The Company does not intend to disclose or comment on
developments related to its review unless and until the Board has
approved a specific transaction or otherwise determined that
further disclosure is appropriate.
The Company also announced today preliminary financial results
for the second quarter ended June 30, 2017. The Company expects to
report revenues of approximately $923 million for North America,
Europe and Latin America. The Company also expects to report
reported operating loss and adjusted operating income for the
second quarter of approximately ($23) million and $32 million,
respectively. The expected reported operating loss primarily
reflects a one-time non-cash charge of approximately $36 million
related to the sale of the Company’s investment in Algeria, which
was divested consistent with the Company’s previously announced
divestiture program. A reconciliation of the reported operating
loss to adjusted operating income is set out below. Additionally,
as of June 30, the Company maintained availability of approximately
$360 million under its $700 million asset-based revolving credit
facility.
The Company’s interim financial statements for the three months
ended June 30, 2017 are not yet available. The preliminary,
unaudited financial information for the quarter ended June 30, 2017
presented herein is based solely on management’s estimates
reflecting currently available preliminary information and remains
subject to the Company’s customary closing and review processes.
Final adjustments and other material developments may arise between
the date of this press release and the date the Company announces
second quarter 2017 results and files its Quarterly Report on Form
10-Q with the Securities and Exchange Commission.
The Company plans to report second quarter 2017 results in a
press release on August 2, 2017.
Non-GAAP Financial
Measures
Adjusted operating income (defined as operating income before
extraordinary, nonrecurring or unusual charges and other certain
items) is a “non-GAAP financial measure” as defined under the rules
of the Securities and Exchange Commission.
This Company-defined non-GAAP financial measure excludes 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 this non-GAAP measure 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.
The following reconciliation of preliminary estimated reported
operating income to adjusted operating income for the second
quarter of 2017 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.
Second Quarter 2017
Outlook In millions Operating
Income (Loss)
Preliminary estimated reported $ (23.0 ) Adjustments to reconcile
operating income Restructuring and divestiture costs (1) 13.0 Asia
Pacific and Africa (income)/loss (2) 42.0 Total
adjustments 55.0 Preliminary estimated adjusted $
32.0 (1) Reflected preliminary estimated
restructuring and divestiture costs which represent costs
associated with the Company's announced restructuring and
divestiture programs. Examples consist of, but are not limited to,
employee separation costs, asset write-downs, accelerated
depreciation, working capital write-downs, equipment relocation,
contract terminations, consulting fees and legal costs incurred as
a result of the programs. The Company adjusts for these charges as
management believes these costs will not continue at the conclusion
of both the restructuring and divestiture programs. (2) The
expected Asia-Pacific and Africa loss of approximately $42 million
principally consists of approximately $36 million of non-cash
charges in connection with the Company’s sale of its investment in
Algeria and approximately $5 million of other one-time non-cash
charges associated with the Company’s remaining investments in
Africa and Asia Pacific.
About General Cable
General Cable (NYSE:BGC) 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,
and communications markets. 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 are forward-looking
statements that involve risks and uncertainties, predict or
describe future events or trends and that do not relate solely to
historical facts within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements include, but are not
limited to, statements regarding the Company’s process to review
strategic alternatives and its ability to maximize shareholder
value through such a process. Words such as “believe,” “expect,”
“may,” “will,” “anticipate,” “intend,” “estimate,” “project,”
“plan,” “assume,” “seek to” or other similar expressions or the
negative of these expressions, although not all forward-looking
statements, are used to identify these forward-looking statements.
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. With respect
to the Company’s review of strategic alternatives, there is no
assurance that the process will result in any transaction or other
action by the Company, that any transaction or other action will be
consummated, or that any transaction or other action will maximize
stockholder value. These factors, risks and uncertainties include,
but are not limited to: the economic strength and competitive
nature of the geographic markets that the Company serves; the
Company’s ability to increase manufacturing capacity and
productivity; the Company’s ability to increase the Company’s
selling prices during periods of increasing raw material costs; the
Company’s ability to service, and meet all requirements under, the
Company’s debt, and to maintain adequate domestic and international
credit facilities and credit lines; the Company’s ability to
establish and maintain internal controls; the impact of unexpected
future judgments or settlements of claims and litigation; the
impact of foreign currency exchange rate fluctuations; the impact
of future impairment charges; compliance with U.S. and foreign
laws, including the Foreign Corrupt Practices Act; the Company’s
ability to achieve the anticipated cost savings, efficiencies and
other benefits related to the Company’s restructuring program and
other strategic initiatives, including the Company’s plan to exit
all of the Company’s Asia Pacific and African operations; the
impact of the announcement of the review of strategic alternatives
on the Company’s business, its financial and operating results and
its employees and customers; factors affecting the feasibility and
timing of any transaction or other action; the ability to identify
and close any transaction; risks related to realization of the
expected benefits of any transaction or other action to the Company
and its stockholders; 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 24, 2017, and
subsequent SEC filings. You are cautioned not to place undue
reliance on these forward-looking statements. All forward‐looking
statements contained in this press release speak only as of the
date on which they were made, and 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170716005030/en/
General Cable CorporationInvestors:Len
Texter, 859-572-8684Senior Vice President, FinanceGlobal
Controller and Investor RelationsorMedia:Lisa Fell,
859-572-9616Director, Global Communications
Gen Cable (NYSE:BGC)
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