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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004

Form 10-Q

     
(Mark One)
   
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1933
 
    For the quarterly period ended September 30, 2004
 
or
 
o
   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the transition period from            to

Commission file number 1-4682

Thomas & Betts Corporation

(Exact name of registrant as specified in its charter)
     
Tennessee
   22-1326940
(State or other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification No.)
 
8155 T&B Boulevard    
Memphis, Tennessee   38125
(Address of principal executive offices)   (Zip Code)

(901) 252-8000

(Registrant’s telephone number, including area code)

      Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ     No o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes þ     No o

      Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

         
Outstanding Shares
Title of Each Class at November 1, 2004
Common Stock, $.10 par value
    59,021,776  

THOMAS & BETTS CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

               
Page
 PART I. FINANCIAL INFORMATION        
         
          2  
          3  
          4  
          5  
      15  
      27  
      29  
 PART II. OTHER INFORMATION        
      30  
      30  
 SIGNATURE     31  
 EXHIBIT INDEX     32  
 Letter Agreement
 Indemnity Agreement
 Statement re Computation of Ratio of Earnings to Fixed Charges
 Certification of Principal Executive Officer
 Certification of Principal Financial Officer
 Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b)

1

Table of Contents

PART I. FINANCIAL INFORMATION

 
Item 1. Financial Statements

THOMAS & BETTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)
(Unaudited)
                                   
Quarter Ended Nine Months Ended
September 30, September 28, September 30, September 28,
2004 2003 2004 2003
Net sales
  $ 394,211     $ 338,691     $ 1,116,172     $ 972,834  
Cost of sales
    284,237       254,172       799,245       719,760  
     
     
     
     
 
 
Gross margin
    109,974       84,519       316,927       253,074  
Selling, general and administrative
    68,663       66,950       213,311       208,500  
Other operating expense (income), net
    —       (8,850 )     —       (8,850 )
     
     
     
     
 
 
Earnings from operations
    41,311       26,419       103,616       53,424  
Income from unconsolidated companies
    632       441       1,852       1,853  
Interest expense, net
    (8,162 )     (9,682 )     (23,260 )     (27,101 )
Other (expense) income, net
    995       (1,079 )     (97 )     (1,450 )
Gain on sale of equity interest
    12,978       —       12,978       —  
     
     
     
     
 
 
Earnings before income taxes
    47,754       16,099       95,089       26,726  
Income tax provision
    14,326       4,347       26,080       3,216  
     
     
     
     
 
Net earnings
  $ 33,428     $ 11,752     $ 69,009     $ 23,510  
     
     
     
     
 
Earnings per share:
                               
 
Basic
  $ 0.57     $ 0.20     $ 1.18     $ 0.40  
     
     
     
     
 
 
Diluted
  $ 0.56     $ 0.20     $ 1.17     $ 0.40  
     
     
     
     
 
Average shares outstanding:
                               
 
Basic
    58,724       58,466       58,513       58,428  
 
Diluted
    59,468       58,473       59,128       58,433  

The accompanying Notes are an integral part of these Consolidated Financial Statements.

2

Table of Contents

THOMAS & BETTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                     
September 30, December 31,
2004 2003
ASSETS
Current Assets
               
 
Cash and cash equivalents
  $ 334,566     $ 387,425  
 
Marketable securities
    1,758       1,704  
 
Receivables, net
    220,313       168,542  
 
Inventories:
               
   
Finished goods
    105,684       95,993  
   
Work-in-process
    33,048       30,904  
   
Raw materials
    76,886       63,346  
     
     
 
 
Total inventories
    215,618       190,243  
     
     
 
 
Deferred income taxes
    49,008       50,016  
 
Prepaid expenses
    9,801       14,349  
     
     
 
Total Current Assets
    831,064       812,279  
     
     
 
Property, plant and equipment
               
 
Land
    14,168       15,927  
 
Buildings
    172,247       173,985  
 
Machinery and equipment
    609,048       604,791  
 
Construction-in-progress
    11,151       9,163  
     
     
 
      806,614       803,866  
 
Less accumulated depreciation
    (530,141 )     (500,156 )
     
     
 
Net property, plant and equipment
    276,473       303,710  
     
     
 
Goodwill
    455,391       455,113  
Investments in unconsolidated companies
    114,383       121,732  
Deferred income taxes
    45,173       52,707  
Other assets
    36,017       37,084  
     
     
 
Total Assets
  $ 1,758,501     $ 1,782,625  
     
     
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
               
 
Current maturities of long-term debt
  $ 8,989     $ 133,344  
 
Accounts payable
    138,155       113,724  
 
Accrued liabilities
    109,349       111,478  
 
Income taxes payable
    11,035       6,414  
     
     
 
Total Current Liabilities
    267,528       364,960  
     
     
 
Long-Term Liabilities
               
 
Long-term debt
    546,077       551,972  
 
Other long-term liabilities
    128,892       134,266  
Shareholders’ Equity
               
 
Common stock
    5,900       5,848  
 
Additional paid-in capital
    355,872       345,646  
 
Retained earnings
    505,997       436,988  
 
Unearned compensation-restricted stock
    (2,384 )     (2,014 )
 
Accumulated other comprehensive income (loss)
    (49,381 )     (55,041 )
     
     
 
Total Shareholders’ Equity
    816,004       731,427  
     
     
 
Total Liabilities and Shareholders’ Equity
  $ 1,758,501     $ 1,782,625  
     
     
 

The accompanying Notes are an integral part of these Consolidated Financial Statements.

3

Table of Contents

THOMAS & BETTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(Unaudited)
                     
Nine Months Ended
September 30, September 28,
2004 2003
Cash Flows from Operating Activities:
               
Net earnings
  $ 69,009     $ 23,510  
Adjustments:
               
 
Depreciation and amortization
    39,739       37,455  
 
Amortization of restricted stock
    1,959       2,075  
 
Undistributed earnings from unconsolidated companies
    (1,852 )     (1,853 )
 
Mark-to-market adjustment for derivative instruments
    (436 )     (30 )
 
(Gain) Loss on sale of property, plant and equipment
    (645 )     834  
 
Gain on sale of equity interest
    (12,978 )     —  
 
Deferred income taxes
    11,307       (9,590 )
 
Changes in operating assets and liabilities — net:
               
   
Receivables
    (51,547 )     (28,288 )
   
Inventories
    (25,018 )     10,232  
   
Accounts payable
    24,311       (2,605 )
   
Accrued liabilities
    (2,273 )     (3,554 )
   
Income taxes payable
    4,420       (2,961 )
   
Other
    3,026       11,302  
     
     
 
Net cash provided by (used in) operating activities
    59,022       36,527  
     
     
 
Cash Flows from Investing Activities:
               
 
Purchases of property, plant and equipment
    (15,604 )     (19,392 )
 
Proceeds from sale of property, plant and equipment
    4,941       266  
 
Proceeds from sale of equity interest
    20,929       —  
 
Marketable securities acquired
    (523 )     (30,941 )
 
Proceeds from matured marketable securities
    446       79,277  
     
     
 
Net cash provided by (used in) investing activities
    10,189       29,210  
     
     
 
Cash Flows from Financing Activities:
               
 
Proceeds from long-term debt and other borrowings
    —       125,191  
 
Repayment of long-term debt and other borrowings
    (130,791 )     (65,341 )
 
Stock options exercised
    7,069       —  
 
Debt issuance costs on recapitalization
    —       (3,807 )
     
     
 
Net cash provided by (used in) financing activities
    (123,722 )     56,043  
     
     
 
Effect of exchange-rate changes on cash
    1,652       6,031  
     
     
 
 
Net increase (decrease) in cash and cash equivalents
    (52,859 )     127,811  
 
Cash and cash equivalents — beginning of period
    387,425       177,994  
     
     
 
 
Cash and cash equivalents — end of period
  $ 334,566     $ 305,805  
     
     
 
Cash payments for interest
  $ 35,088     $ 38,586  
Cash payments for income taxes
  $ 10,528     $ 13,231  

The accompanying Notes are an integral part of these Consolidated Financial Statements.

4

Table of Contents

THOMAS & BETTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)
 
1. Basis of Presentation

      In the opinion of management, the accompanying consolidated financial statements contain all adjustments necessary for the fair presentation of the Corporation’s financial position as of September 30, 2004, and December 31, 2003, and the results of operations and cash flows for the periods ended September 30, 2004, and September 28, 2003.

      Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s Annual Report on Form 10-K for the fiscal period ended December 31, 2003. The results of operations for the periods ended September 30, 2004, and September 28, 2003, are not necessarily indicative of the operating results for the full year.

      Certain reclassifications have been made to prior periods to conform to the current year presentation.

 
2. Basic and Diluted Earnings Per Share

      The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations:

                                   
Quarter Ended Nine Months Ended
September 30, September 28, September 30, September 28,
2004 2003 2004 2003
(In thousands, except per share data)
Net earnings
  $ 33,428     $ 11,752     $ 69,009     $ 23,510  
Basic:
                               
 
Average shares outstanding
    58,724       58,466       58,513       58,428  
     
     
     
     
 
 
Basic earnings per share
  $ 0.57     $ 0.20     $ 1.18     $ 0.40  
     
     
     
     
 
Diluted shares:
                               
 
Average shares outstanding
    58,724       58,466       58,513       58,428  
 
Additional shares from the assumed exercise of stock options and vesting of restricted stock
    744       7       615       5