HIGHLAND HEIGHTS, Ky. - Saturday, August 8th 2015 [ME NewsWire]

(BUSINESS WIRE)-- General Cable Corporation (NYSE: BGC) reported today results for the second quarter ended July 3, 2015. For the quarter, the Company generated adjusted earnings per share from continuing operations of $0.36 and adjusted operating income from continuing operations of $55 million. Reported earnings per share from continuing operations for the quarter were ($0.03) and reported operating income from continuing operations was $24 million. See page 4 of this press release for the reconciliation of reported to adjusted results and related disclosures.

Highlights

    Michael T. McDonnell started as President and Chief Executive Officer effective July 1st
    Second quarter adjusted operating income from continuing operations of $55 million and adjusted EPS from continuing operations of $0.36 were driven by the performance of the submarine turnkey project business in Europe and the electric utility and communication businesses in North America as well as restructuring savings of $8 million in the quarter
    Adjusted operating income from continuing operations for the first half of 2015 was $103 million, up approximately 50% year over year and 20% sequentially
    Generated cash of $75 million through the first half of 2015 through the continued strong management of working capital in North America, Latin America and Europe
    Reduced net debt by $126 million through the first half of 2015 and maintained liquidity of $375 million as of July 3, 2015 under the Company’s North American and European based credit facility
    Announced a definitive agreement to sell Asia Pacific operations, consisting of businesses in Thailand, China, New Zealand and Australia, for cash consideration of approximately $205 million
        Upon completion of the sale in the third quarter the Company will have generated cash proceeds of approximately $293 million from its divestiture program which is at the upper end of management’s guidance range even before the divestiture of Africa

Michael T. McDonnell, President and Chief Executive Officer, said, “We are focused on operational execution despite an uneven end market demand environment. We are making significant progress in optimizing our asset and cost base, driving performance improvement in key end markets and generating cash. As a result, our strong second quarter results were driven by restructuring savings and the continued execution of our submarine turnkey project business as well as the improved performance of our North American energy infrastructure and communications businesses.”

Segment Demand

North America – unit volume was up 3% year over year principally driven by energy infrastructure products specifically transmission cables. Sequentially, unit volume declined 5% as demand tempered across most businesses during the second quarter following the strong start to the year particularly for electrical infrastructure products including industrial related products. Overall, unit volume through the first half of 2015 was up 6% year over year principally due to demand for electric utility, communications and rod and strip products.

Europe – unit volume was down 23% year over year, principally due to the impact of restructuring activity as the Company exited certain low value-add end markets. Sequentially, unit volume was flat in the second quarter as compared to the first quarter. The Company continues to execute consistently on its land and submarine turnkey project backlog which was at $225 million as of the end of the second quarter. Overall, tender activity for land and submarine turnkey projects was encouraging despite the challenging operating environment throughout Europe.

Latin America (excluding Venezuela) - excluding the metal intensive products of copper rod in Chile and aerial transmission cables in Brazil, unit volume through for first half of 2015 was down 5% year over year.

Other Expense

Other expense of $6 million for the second quarter consisted of mark-to-market losses of $4 million on derivative instruments accounted for as economic hedges and foreign currency transaction losses of $2 million.

Net Debt - Excluding Venezuela

Net debt was $1,093 million at the end of the second quarter of 2015, a decrease of $126 million from the end of 2014. The decrease in net debt is principally due to the efficient management of working capital through the first half of the year, particularly inventory, and cash proceeds generated from the sale of the Company’s interests in joint ventures in Fiji and China.

Discontinued Operations

The sale of the Company’s interests in Phelps Dodge International Philippines, Inc., Dominion Wire and Cables (Fiji) and Keystone Electric Wire and Cable (China) combined with the businesses classified as held for sale including Thailand, China, New Zealand, Australia and India (together "Discontinued Asia Pacific Operations") will result in the Company’s disposal of a major geographical area that requires separate disclosure in the Company’s financial statements. Accordingly, starting with the second quarter of 2015, the Company has reclassified the current and prior period results of the Discontinued Asia Pacific Operations as discontinued operations. As a result of this change, the Asia Pacific and Africa segment is now principally comprised of businesses located in Africa. The financial results of the Company's Africa businesses are presented as continuing operations in its financial statements, but have been excluded from management’s discussion of operations which includes North America, Latin America and Europe.

Third Quarter 2015 Outlook for continuing operations including North America, Latin America and Europe (excluding Venezuela and the continuing operations of Asia Pacific and Africa)

Revenues in the third quarter are expected to be in the range of $0.975 to $1.025 billion. Unit volume is anticipated to be flat sequentially. Adjusted operating income is anticipated to be in the range of $25 to $40 million for the third quarter which assumes a metal cost impact of $15 - $20 million as well as the impact of lower activity in the Company’s submarine turnkey project business in Europe. Partially offsetting these impacts are the anticipated savings from restructuring actions which are on track with the Company’s annual savings target of $30 - $40 million for 2015. Adjusted earnings per share are expected to be in the range of $0.02 to $0.22 per share for the third quarter. The Company’s third quarter outlook assumes copper (COMEX) and aluminum (LME) prices of $2.36 and $0.72, respectively, and constant foreign currency exchange rates. The third quarter outlook does not include operating results from Venezuela, Asia Pacific and Africa.

“We will continue our strong focus on operational execution. At the same time, we will be developing a new strategic roadmap that will drive substantial and sustainable shareholder value capitalizing on our leading market positions where we have competitive advantage and scale,” McDonnell concluded.

Non-GAAP Financial Measures

Adjusted operating income from continuing operations (defined as operating income from continuing operations before extraordinary, nonrecurring or unusual charges and other certain items), adjusted earnings per share from continuing operations (defined as diluted earnings per share from continuing operations 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. Metal adjusted revenues, adjusted operating income and return on metal-adjusted sales on a segment basis, non-GAAP financial measures, are also provided herein. See “Segment Information.”

These Company-defined non-GAAP financial measures 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 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. Adjusted results and the third quarter 2015 guidance reflect the removal of the impact of our Venezuelan operations on a standalone basis due to the ongoing economic and political uncertainty in that country, principally driven by the foreign currency exchange systems, government-imposed regulations, price controls and limited access to U.S. dollars for the import of raw materials. However, we expect ongoing operations in Venezuela to continue in a limited fashion, and we cannot predict the amounts of any future income or expenses we may incur relating to our Venezuelan operations. Net debt and certain historical results of Venezuela are disclosed in the Second Quarter 2015 Investor Presentation available on the Company’s website. Adjusted results and the third quarter 2015 guidance reflects the removal of operating results from continuing operations in Asia Pacific and Africa as we are in the process of divesting these operations and therefore cannot predict the amounts of any future operating income or expenses we may incur. For accounting purposes, the continuing operations in Asia Pacific and Africa (which consists primarily of businesses located in Africa) do not meet the requirements to be presented as discontinued operations.

With respect to the Company’s expected third quarter 2015 revenues in its core operations, adjusted operating income and adjusted earnings per share, the Company is not able to provide a reconciliation of these non-GAAP financial measures to GAAP because it does not provide specific guidance for the various extraordinary, nonrecurring or unusual charges and other certain items. These items have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. As a result, reconciliation of the non-GAAP guidance measures to GAAP is not available without unreasonable effort and the Company is unable to address the probable significance of the unavailable information.     

To view the full report and tables please click here.

View this news release online at: http://www.businesswire.com/news/home/20150805006452/en

Contacts

Len Texter, 859-572-8684

Vice President, Finance and Investor Relations     

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