SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2003
Commission File No. 1-12983
GENERAL CABLE CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 06-1398235 | |
| (State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
| incorporation or organization) |
4 Tesseneer Drive
Highland Heights, KY 41076-9753
(Address of principal executive offices)
(859) 572-8000
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(g) of the Act: None
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 X No
Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act).
Yes X No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Class | Outstanding at May 1, 2003 | |
| Common Stock, $0.01 Par Value | 33,178,977 |
1
GENERAL CABLE CORPORATION
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
| PART I | Financial Information | PAGE | ||
| Item 1. | Consolidated Financial Statements | |||
| Statements of Operations – | ||||
| For the three months ended March 31, 2003 and 2002 | 3 | |||
| Balance Sheets – | ||||
| March 31, 2003 and December 31, 2002 | 4 | |||
| Statements of Cash Flows - | ||||
| For the three months ended March 31, 2003 and 2002 | 5 | |||
| Statements of Changes in Shareholders’ Equity - | ||||
| For the three months ended March 31, 2003 and 2002 | 6 | |||
| Notes to Consolidated Financial Statements | 7 | |||
| Item 2. | Management’s Discussion and Analysis of Financial Condition | |||
| and Results of Operations | 15 | |||
| Item 4. | Controls and Procedures | 21 | ||
| PART II | Other Information | |||
| Item 6. | Exhibits and Reports on Form 8-K | 21 | ||
| Signature and Certificates | 22 | |||
2
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2003 | 2002 | ||||||||
Net sales |
$ | 352.6 | $ | 361.4 | |||||
Cost of sales |
310.2 | 313.3 | |||||||
Gross profit |
42.4 | 48.1 | |||||||
Selling, general and administrative expenses |
31.0 | 30.4 | |||||||
Operating income |
11.4 | 17.7 | |||||||
Interest income (expense): |
|||||||||
Interest expense |
(11.4 | ) | (10.4 | ) | |||||
Interest income |
0.1 | 0.3 | |||||||
| (11.3 | ) | (10.1 | ) | ||||||
Earnings before income taxes |
0.1 | 7.6 | |||||||
Income tax expense |
— | (2.7 | ) | ||||||
Net income |
$ | 0.1 | $ | 4.9 | |||||
Earnings per share |
|||||||||
Earnings per common share |
$ | — | $ | 0.15 | |||||
Weighted average common shares |
33.1 | 32.9 | |||||||
Earnings per common share-assuming dilution |
$ | — | $ | 0.15 | |||||
Weighted average common shares-assuming dilution |
33.1 | 33.2 | |||||||
See accompanying Notes to Consolidated Financial Statements.
3
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in millions, except share data)
| March 31, | December 31, | |||||||||||
| 2003 | 2002 | |||||||||||
| ASSETS | ||||||||||||
Current Assets: |
(unaudited) | |||||||||||
Cash |
$ | 16.2 | $ | 29.1 | ||||||||
Receivables, net of allowances of $13.4 million at March 31, 2003
and $11.6 million at December 31, 2002 |
129.6 | 105.9 | ||||||||||
Retained interest in accounts receivable |
78.0 | 84.8 | ||||||||||
Inventories |
264.9 | 258.3 | ||||||||||
Deferred income taxes |
12.3 | 12.2 | ||||||||||
Prepaid expenses and other |
30.1 | 42.6 | ||||||||||
Total current assets |
531.1 | 532.9 | ||||||||||
Property, plant and equipment, net |
323.4 | 323.3 | ||||||||||
Deferred income taxes |
71.7 | 68.3 | ||||||||||
Other non-current assets |
46.9 | 48.8 | ||||||||||
Total assets |
$ | 973.1 | $ | 973.3 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Current Liabilities: |
||||||||||||
Accounts payable |
$ | 257.8 | $ | 242.1 | ||||||||
Accrued liabilities |
117.3 | 118.1 | ||||||||||
Current portion of long-term debt |
23.2 | 21.9 | ||||||||||
Total current liabilities |
398.3 | 382.1 | ||||||||||
Long-term debt |
384.7 | 411.1 | ||||||||||
Deferred income taxes |
2.9 | 2.1 | ||||||||||
Other liabilities |
121.8 | 117.1 | ||||||||||
Total liabilities |
907.7 | 912.4 | ||||||||||
Shareholders’ Equity: |
||||||||||||
Common stock, $0.01 par value: |
||||||||||||
Issued and outstanding shares: |
||||||||||||
March 31, 2003 – 33,143,303 (net of 4,754,425 treasury shares) |
||||||||||||
December 31, 2002 – 33,135,002 (net of 4,754,425 treasury
shares) |
0.4 | 0.4 | ||||||||||
Additional paid-in capital |
100.2 | 100.0 | ||||||||||
Treasury stock |
(50.0 | ) | (50.0 | ) | ||||||||
Retained earnings |
60.0 | 59.9 | ||||||||||
Accumulated other comprehensive loss |
(40.4 | ) | (44.6 | ) | ||||||||
Other shareholders’ equity |
(4.8 | ) | (4.8 | ) | ||||||||
Total shareholders’ equity |
65.4 | 60.9 | ||||||||||
Total liabilities and shareholders’ equity |
$ | 973.1 | $ | 973.3 | ||||||||
See accompanying Notes to Consolidated Financial Statements.
4
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in millions, unaudited)
| Three Months Ended | ||||||||||||
| March 31, | ||||||||||||
| 2003 | 2002 | |||||||||||
Cash flows of operating activities: |
||||||||||||
Net income |
$ | 0.1 | $ | 4.9 | ||||||||
Adjustments to reconcile net income to net cash provided by
operating activities: |
||||||||||||
Depreciation and amortization |
8.2 | 8.0 | ||||||||||
Deferred income taxes |
(2.7 | ) | (0.5 | ) | ||||||||
Changes in operating assets and liabilities: |
||||||||||||
(Increase) decrease in receivables |
(12.9 | ) | 13.5 | |||||||||
Increase in inventories |
(3.2 | ) | (11.4 | ) | ||||||||
Decrease in other assets |
13.9 | 3.9 | ||||||||||
Increase (decrease) in accounts payable, accrued and other liabilities |
12.3 | (2.0 | ) | |||||||||
Net cash flows of operating activities |
15.7 | 16.4 | ||||||||||
Cash flows of investing activities: |
||||||||||||
Proceeds from properties sold |
0.3 | 0.2 | ||||||||||
Capital expenditures |
(3.3 | ) | (6.3 | ) | ||||||||
Other, net |
0.9 | (0.9 | ) | |||||||||
Net cash flows of investing activities |
(2.1 | ) | (7.0 | ) | ||||||||
Cash flows of financing activities: |
||||||||||||
Dividends paid |
— | (1.6 | ) | |||||||||
Net changes in revolving credit borrowings |
(21.2 | ) | (0.8 | ) | ||||||||
Repayment of long-term debt |
(5.3 | ) | (5.3 | ) | ||||||||
Proceeds from exercise of stock options |
— | 0.5 | ||||||||||
Net cash flows of financing activities |
(26.5 | ) | (7.2 | ) | ||||||||
Increase (decrease) in cash |
(12.9 | ) | 2.2 | |||||||||
Cash-beginning of period |
29.1 | 16.6 | ||||||||||
Cash-end of period |
$ | 16.2 | $ | 18.8 | ||||||||
SUPPLEMENTAL INFORMATION |
||||||||||||
Income taxes paid, net of (refunds) |
$ | (13.9 | ) | $ | 0.6 | |||||||
Interest paid |
$ | 6.7 | $ | 8.3 | ||||||||
See accompanying Notes to Consolidated Financial Statements.
5
GENERAL CABLE CORORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders’ Equity
(in millions, except share amounts)
(unaudited)
| Accumulated | |||||||||||||||||||||||||||||||||
| Common Stock | Additional | Other | Other | ||||||||||||||||||||||||||||||
| Paid-In | Treasury | Retained | Comprehensive | Shareholders' | |||||||||||||||||||||||||||||
| Shares | Amount | Capital | Stock | Earnings | Income(Loss) | Equity | Total | ||||||||||||||||||||||||||
Balance, December 31, 2001 |
32,838,227 | $ | 0.4 | $ | 96.4 | $ | (50.0 | ) | $ | 88.9 | $ | (25.7 | ) | $ | (5.1 | ) | $ | 104.9 | |||||||||||||||
Comprehensive income: |
|||||||||||||||||||||||||||||||||
Net income |
4.9 | 4.9 | |||||||||||||||||||||||||||||||
Foreign currency translation
adjustment |
0.8 | 0.8 | |||||||||||||||||||||||||||||||
Gain on change in fair value of
financial instruments, net of
tax |
1.7 | 1.7 | |||||||||||||||||||||||||||||||
Comprehensive income |
7.4 | ||||||||||||||||||||||||||||||||
Dividends |
(1.6 | ) | (1.6 | ) | |||||||||||||||||||||||||||||
Amortization of restricted stock
and other |
0.2 | 0.2 | 0.4 | ||||||||||||||||||||||||||||||
Exercise of stock options |
66,707 | 0.5 | 0.5 | ||||||||||||||||||||||||||||||
Other |
33,349 | (0.1 | ) | (0.2 | ) | (0.3 | ) | ||||||||||||||||||||||||||
Balance, March 31, 2002 |
32,938,283 | $ | 0.4 | $ | 97.0 | $ | (50.0 | ) | $ | 92.0 | $ | (23.2 | ) | $ | (4.9 | ) | $ | 111.3 | |||||||||||||||
Balance, December 31, 2002 |
33,135,002 | $ | 0.4 | $ | 100.0 | $ | (50.0 | ) | $ | 59.9 | $ | (44.6 | ) | $ | (4.8 | ) | $ | 60.9 | |||||||||||||||
Comprehensive income: |
|||||||||||||||||||||||||||||||||
Net income |
0.1 | 0.1 | |||||||||||||||||||||||||||||||
Foreign currency translation
adjustment |
4.6 | 4.6 | |||||||||||||||||||||||||||||||
Loss on change in fair value of
financial instruments, net of tax |
(0.4 | ) | (0.4 | ) | |||||||||||||||||||||||||||||
Comprehensive income |
4.3 | ||||||||||||||||||||||||||||||||
Amortization of restricted stock
and other |
0.2 | 0.2 | |||||||||||||||||||||||||||||||
Other |
8,301 | ||||||||||||||||||||||||||||||||
Balance, March 31, 2003 |
33,143,303 | $ | 0.4 | $ | 100.2 | &nb | |||||||||||||||||||||||||||