HIGHLAND HEIGHTS, Ky.--(BUSINESS WIRE)--Oct. 26, 2009-- General Cable Corporation (NYSE: BGC), one of the most globally diversified industrial companies, reported today revenues and earnings for the third quarter ended October 2, 2009. Diluted earnings per share for the third quarter of 2009 were $0.31. Included in these results were approximately $0.09 per share of non-cash net lower of cost or market (LCM) and LIFO inventory accounting related charges and $0.15 per share of non-cash interest charges resulting from a change in accounting for convertible debt. Before the impact of these items, adjusted non-GAAP earnings per share for the third quarter of 2009 would have been $0.55, at the upper end of management’s indicated range of $0.45 to $0.55.

Highlights

• Reported revenues and adjusted earnings per share within range of management’s guidance
• Generated $228.9 million of cash flow from operating activities; $365.1 million year-to-date
• Decreased net debt by $187.3 million to $764.4 million
• Named one of Fortune’s 100 Fastest Growing Companies for the third consecutive year

Third Quarter Results

Net sales for the third quarter of 2009 were $1,081.8 million, a decrease of $362.6 million, or 25.1%, compared to the third quarter of 2008 on a metal-adjusted basis. Before the impact of $5.4 million of revenues from acquired businesses and $73.9 million related to the unfavorable impact of changes in foreign currency exchange rates, net sales for the third quarter decreased 21.5%. Volume based on metal pounds sold, without the impact of incremental volume from acquired businesses, decreased 20.5% in the third quarter of 2009 compared to 2008, and was down 7.3% compared to the second quarter of 2009.

Operating income before items was $49.4 million in the third quarter of 2009 compared to $121.4 million in the third quarter of 2008, a decrease of $72.0 million or 59.3%. The decrease in operating income was principally the result of a significant decline in prices in response to lower overall demand in many of the Company’s end markets, lower capacity utilization, and the unfavorable impact of changes in foreign currency translation, partially offset by lower selling, general and administrative expenses resulting from continuous cost improvement efforts. Operating margin before items was 4.6% in the third quarter of 2009, a decrease of approximately 380 basis points from the operating margin of 8.4% in the third quarter of 2008 on a metal-adjusted basis.

Gregory B. Kenny, President and Chief Executive Officer of General Cable, said, “The Company is facing a demand environment in North America which is much worse than the last recession earlier this decade, while demand in Iberia is off nearly 50%. Despite the significant contraction in our end markets, the actions we have taken over the last few years to geographically diversify the business and expand our product portfolio have enabled us to continue to report positive earnings and cash flows. The strong performance of our ROW segment in the third quarter demonstrates the benefit of our strategy to grow disproportionately in countries now developing their infrastructure. We have dedicated significant resources focused on LEAN initiatives over the years which are helping the Company through this difficult period. Over the last year, we have accelerated the removal of fixed costs which we expect should provide strong operating leverage over the next cycle.”

Liquidity and Share Repurchase

Despite a substantial increase in metal prices, net debt was $764.4 million at the end of the third quarter, down $187.3 million from the end of the second quarter of 2009. This decrease is principally the result of positive earnings coupled with reductions in working capital in each of the Company’s geographic segments more than offsetting capital expenditures. The Company continues to maintain adequate liquidity to fund operations, which could include increased working capital requirements as a result of higher metal costs, internal growth, and continuing product and geographic expansion opportunities. During the third quarter of 2009, the Company made no common share repurchases.

Fourth Quarter 2009 Outlook and Macro Trends

Kenny continued, “As we look forward, we expect the developing economies we serve to perform relatively better than the developed economies of the world. Business conditions in Latin America, Africa and Southeast Asia are being buoyed by commodities, mining and infrastructure investment, aided by somewhat better credit markets. In the U.S., we expect continuing declines in non-residential construction spending as well as a residential construction market that will recover slowly. These are direct or indirect end markets for many of our products. After over a decade of exceptional growth, Spain continues to suffer from a severe correction in their construction markets and nearly 20% unemployment. We do not expect that this market will return to growth quickly. Finally, with industrial companies in the United States using less electricity for the last two years, we do not expect electric utility spending on the distribution network to increase next year in any meaningful way. However, we do expect the U.S. transmission and wind farm segments to begin to improve as the Stimulus Bill begins to gain traction over the next year. The continuing impact of weak demand and rapidly increasing metal costs will further pressure earnings in the fourth quarter. As a result of these ongoing weak conditions, the Company will reduce production further in the fourth quarter. This also will negatively impact our earnings in the fourth quarter while at the same time position the Company to be able to benefit from upside earnings leverage when conditions improve in our end markets. We are encouraged, however, by early indicators of economic recovery beginning to be discussed by major industrial companies as recovery in the economy and construction markets should eventually lead to meaningful improvements in wire and cable demand. For the fourth quarter, the Company expects to report earnings before the impact of non-cash convertible interest expense in the range of $0.20 to $0.30 per share while revenues are expected to be approximately $1.05 to $1.10 billion,” Kenny concluded. A reconciliation of expected GAAP earnings per share is as follows:

Preferred Stock Dividend

In accordance with the terms of the Company’s 5.75% Series A Convertible Redeemable Preferred Stock, the Board of Directors has declared a regular quarterly preferred stock dividend of approximately $0.72 per share. The dividend is payable on November 24, 2009 to preferred stockholders of record as of the close of business on October 31, 2009. The Company expects the quarterly dividend payment to be less than $0.1 million.

Reconciliation of Non-GAAP Measures

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we discuss in this earnings release earnings per share and operating income for the third quarter of 2009 and 2008 as adjusted for the impact of net last-in first-out (LIFO) and lower of cost or market (LCM) inventory accounting related items and the non-cash interest expense impact of the change in accounting for convertible debt. These Company-defined adjusted measures are being provided because management believes they are useful in analyzing the underlying operating performance of the business. These measures may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to accounting principles generally accepted in the United States. A reconciliation of earnings per share as reported and operating income as reported to adjusted non-GAAP earnings per share and adjusted non-GAAP operating income follows:

General Cable will discuss third quarter results on a conference call and webcast at 8:30 a.m. ET, October 26, 2009. For more information please see our website at www.generalcable.com.

General Cable Corporation (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, and communications markets. Visit our website at www.generalcable.com.

Certain statements in this press release, including, without limitation, statements regarding future financial results and performance, plans and objectives, capital expenditures and the Company’s or management’s beliefs, expectations or opinions, are forward-looking statements. Actual results may differ materially from those statements as a result of factors, risks and uncertainties over which the Company has no control. Such factors include the economic strength and competitive nature of the geographic markets that the Company serves; economic, political and other risks of maintaining facilities and selling products in foreign countries including the impact of significant fluctuations in the value of the U.S. dollar against foreign currencies; changes in industry standards and regulatory requirements; advancing technologies, such as fiber optic and wireless technologies; volatility in the price of copper and other raw materials, as well as fuel and energy and the Company’s ability to reflect such volatility in its selling prices; interruption of supplies from the Company’s key suppliers; compliance with foreign and U.S. laws applicable to our international operations; potential adverse impact from environmental liabilities; risks from liabilities assumed in acquisitions; substantial indebtedness could adversely affect our business and financial condition; potential cross-defaults on our financing arrangements if we fail to comply with covenants and other provisions of financing arrangements; impact of a downgrade in our financial strength; the failure to negotiate extensions of the Company’s labor agreements on acceptable terms; the Company’s ability to increase manufacturing capacity and achieve productivity improvements; the Company’s dependence upon distributors and retailers for non-exclusive sales of certain of the Company’s products; pricing pressures in the Company’s end markets; the Company’s ability to maintain the uncommitted accounts payable or accounts receivable financing arrangements in its European operations; the impact of any additional charges in connection with plant closures and the Company’s inventory accounting practices; the impact of certain asbestos litigation, unexpected judgments or settlements and environmental liabilities; the ability to successfully identify, finance and integrate acquisitions; the impact of terrorist attacks or acts of war which may affect the markets in which the Company operates; the Company’s ability to retain key employees; the Company’s ability to service debt requirements and maintain adequate domestic and international credit facilities and credit lines; the impact on the Company’s operating results of its pension accounting practices; volatility in the market price of the Company’s common stock all of which are more fully discussed in the Company's Report on Form 10-K/A filed with the Securities and Exchange Commission on May 8, 2009 as well as periodic reports filed with the Commission.

Source: General Cable Corporation

General Cable Corporation
Michael P. Dickerson, 859-572-8684
Vice President of Finance and Investor Relations