EX-20.1 3 a2072235zex-20_1.htm PRESS RELEASE
QuickLinks -- Click here to rapidly navigate through this document

NEWS

For Immediate Release

THOMAS & BETTS CORPORATION REPORTS 2001 RESULTS

MEMPHIS, Tenn.—February 27, 2002—Thomas & Betts Corporation (NYSE: TNB) today reported financial results for the quarter and year ended December 30, 2001.

For the fourth quarter 2001, Thomas & Betts reported sales of $342 million and a net loss of $90 million, or a $1.56 loss per diluted share, including pre-tax charges of approximately $93 million as described below. In the fourth quarter 2000, Thomas & Betts reported sales of $434 million and a net loss of $55 million, or $0.95 loss per diluted share, including pre-tax charges of approximately $60 million related to strategic decisions made in the early phases of the company's turnaround.

Sales were down 21 percent from the year-earlier period, the result of continued soft demand in North American markets and unfavorable comparisons due to previously divested product lines. Excluding revenues from previously divested product lines, consolidated sales were down 17 percent as compared to the prior year fourth quarter.

Fourth quarter 2001 results include $49 million in pre-tax charges related to previously announced manufacturing efficiency and consolidation initiatives; $27 million for the settlement of a patent infringement lawsuit; and $17 million in impairment charges to certain non-strategic assets.

"We believe that we have now put the legacy issues behind us," said T. Kevin Dunnigan, chairman and chief executive officer. "Over the past 18 months, we have literally transformed Thomas & Betts from within. Internally, we have significantly improved our processes and dramatically reduced costs in all areas. Externally, we have strengthened relations with our distributors, and have, we believe, achieved the highest service levels in the industry."

"Restructuring our manufacturing operations will complete the task of reshaping Thomas & Betts into a powerful and profitable competitor in our core electrical markets," continued Dunnigan, "We are on track with this effort, both in terms of cost and timing. When we finish later this year, we will have a more flexible and cost-effective manufacturing network that supports our continued leadership in service and product quality."

The manufacturing program announced on December 18, 2001 affects all electrical manufacturing plants in the United States, Europe and Mexico or approximately two-thirds of the company's total manufacturing operations. The company has begun the process of closing 12 facilities (primarily in the U.S.) and implementing efficiency improvements in the remaining facilities affected by the program.

Thomas & Betts expects on-going pre-tax savings of approximately $45 to $50 million annually from the manufacturing restructuring. As previously announced, pre-tax charges associated with the initiatives will total approximately $80 to $90 million, the majority of which were recorded in the fourth quarter 2001. The remaining charges are expected to be recorded primarily in the first half of 2002. (Details of the manufacturing program announced in December can be found in a company news release available at www.tnb.com).

Other Events

Fourth quarter and year 2001 results were also affected by other events, including the settlement of a patent infringement lawsuit for $27 million. ADC Telecommunications, Inc. alleged that Augat Communications, acquired by Thomas & Betts in 1996, infringed on certain bay and jack patents beginning in 1994. In the fourth quarter 2001, Thomas & Betts engaged new counsel and reassessed the strength of its defenses. Subsequently, the parties entered into mediation that resulted in a settlement.

During the fourth quarter, the company also settled a dispute with Tyco Group SARL related to the sale of its Electronics OEM business in July 2000. Under terms of the settlement agreement, Tyco will retain $35 million held for post-closing adjustments on working capital and long-term tangible assets. Thomas & Betts recorded an $8 million net-of-tax charge to gain on sale of discontinued operations in the fourth quarter to reflect this settlement.

During the fourth quarter 2001, the company changed its inventory costing method from last-in-first-out (LIFO) to first-in-first-out (FIFO) for its domestic and certain foreign inventories. The new method is expected to provide a better measure of the current value of inventory, a more accurate reflection of the company's financial position and liquidity, and a better matching of manufacturing costs with revenues. This change resulted in a $23 million reduction of previously reported cost of sales for the fourth quarter and year 2000. Prior period results presented herein have been restated to reflect this change in accounting principle.

Other Items

Thomas & Betts reported break-even earnings from unconsolidated companies in the fourth quarter 2001, compared to earnings of $3 million in the year-earlier period. The reduction was due primarily to lower domestic results related to these entities.

Other expense was $27 million in the current period compared to other income of $11 million in the fourth quarter 2000 when the company recorded a $15 million gain from the settlement of a trade secret and trade dress infringement lawsuit. The significant increase in other expense is due to the previously discussed patent lawsuit settlement with ADC Telecommunications.

Fourth-Quarter Segment Results Reflect Weak Market Conditions

Sales in the company's Electrical segment were $250 million for the fourth quarter 2001, down 25 percent from $334 million reported in the same period 2000. The segment reported a loss of $25 million in the current quarter, relatively flat with the year-ago period.

Fourth quarter 2001 electrical sales were adversely impacted by previously divested product lines (approximately $20 million) and the recession in industrial and construction markets. Segment losses reflect the impact of lower sales volumes and continued under-absorption of fixed costs in its manufacturing operations.

Despite the overall market weakness, management believes the company has strengthened its position with key electrical distributors. Service and product quality are at historically high levels and, as a result of a renewed marketing focus on end-user customers and closer partnerships with its distributors, Thomas & Betts' core products and brands have an enhanced presence at key distributors. A new pricing structure implemented in the fourth quarter and effective January 1, 2002 is expected to improve margins in the Electrical segment going forward.

Sales in the Steel Structures segment were $36 million for the fourth quarter, compared to $31 million in the year-ago period. Earnings in this segment were $5 million versus $1 million in the

fourth quarter 2000. Management said demand for these products remains solid, driven by North America's need for an expanded and improved power transmission grid.

In the company's Communications segment, fourth quarter 2001 sales were $26 million, down significantly from the $41 million reported in the same period last year. Continued weakness in North American cable TV and telecom markets are responsible for the sales decrease. This segment recorded a loss of $3 million in the quarter, compared to break-even results in the fourth quarter last year.

The HVAC segment reported sales of $30 million for the fourth quarter 2001, up slightly from the year-earlier period. Sales in this business are generally the strongest in the fourth quarter. However, seasonal demand in 2001 was adversely impacted by the recession in commercial and industrial markets. This segment reported earnings of $1 million in the quarter compared to a loss of $3 million last year in the fourth quarter.

Full Year Results

2001 sales were $1.5 billion compared to $1.8 billion in 2000. The company reported a net loss of $146 million, or $2.52 loss per share, compared with a net loss of $30 million, or $0.52 loss per share, in 2000, which included a gain on sale of discontinued operations and earnings from discontinued operations.

Turnaround Program Update and Highlights

In 2001, the company took various actions to restore a foundation for profitable growth. Most significantly, the company:

•: Comprehensively restructured pricing in the electrical products business to more strategically manage product mix and profitability. The new pricing schedule took effect January 1, 2002.
•: Significantly reduced investment in accounts receivable as days sales outstanding improved approximately 30 percent from year-end 2000.
•: Reduced investment in inventory by approximately 20 percent after adjusting for the affects of divested and impaired product lines and despite operating in the worst recession in over a decade.
•: Reduced selling, general and administrative expense to 20 percent of sales in the fourth quarter 2001.
•: Tightened capital expenditures. For the year ended December 30, 2001, investments in property, plant and equipment were $39 million, significantly lower than the amount spent in 2000.
•: Reduced net debt by $44 million (total debt less cash, cash equivalents and marketable securities) and improved its cash position versus 2000. The year 2001 ended with approximately $242 million in cash, cash equivalents and marketable securities, including $25 million in net proceeds from the sale of certain lighting product lines completed in the fourth quarter 2001.
•: Divested certain non-strategic product lines that were performing below targeted levels.
•: Consolidated certain manufacturing and warehouse facilities.
•: Initiated a comprehensive efficiency and consolidation program for electrical manufacturing facilities in the United States, Europe and Mexico.

"It has been a long and arduous task to address the deep-rooted and far-reaching issues that affected Thomas & Betts performance," said Dunnigan. "We have methodically and aggressively attacked every issue and believe that we are well positioned to show significant improvement as demand rebounds."

2002 Directional Guidance

Dunnigan also reiterated directional earnings guidance provided in December 2001 and said that, assuming a reasonable recovery in general economic conditions in the second half of the year, management believes the company can achieve double-digit operating earnings by the end of 2002. The company expects first quarter 2002 sales to be down 10 to 15 percent compared to the year-ago period, excluding sales from previously divested product lines. First quarter 2002 net results are expected to be approximately flat with the first quarter 2001, excluding the impact of the manufacturing program.

Corporate Overview

Thomas & Betts is a leading designer and manufacturer of connectors and components for worldwide electrical and communication markets. The company also manufactures steel structures for a variety of applications and industrial heating units. Headquartered in Memphis, Tenn., the company has manufacturing, distribution and office facilities worldwide. Visit Thomas & Betts on the World Wide Web at www.tnb.com.

###

NOTE: Financial Tables Attached

CONTACT: Tricia Bergeron
Vice President, Investor & Corporate Relations
(901) 252-8266
email: tricia.bergeron@tnb.com

CONFERENCE CALL/WEBCAST INFORMATION

Thomas & Betts will hold a conference call/webcast to discuss the company's fourth quarter 2001 results on February 28, 2002 at 9:00 am Central Standard Time (10:00 am Eastern Standard Time). To access the call, please call (785) 832-0201 (ID is "TNB") or visit www.tnb.com.

This press release includes forward-looking statements that are subject to many uncertainties in the company's operations and business environment. Forward-looking statements are identified by terms such as "achieve", "guidance", "expect", "believe", "anticipate" and "plan." Such uncertainties, which are discussed further in the company's annual, quarterly and current filings with the Securities and Exchange Commission, may cause the actual results of the company to be materially different from any future results expressed or implied by such forward-looking statements.

THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

		Quarter Ended						Year Ended
		December 30, 2001			December 31, 2000			December 30, 2001			December 31, 2000
					(Restated)						(Restated)
Net sales		$	341,913		$	434,129		$	1,497,491		$	1,756,083
Costs and expenses:
	Cost of sales		289,008			340,401			1,159,043			1,465,660
	Selling, general and administrative		69,552			129,090			324,504			444,248
	Research and development		4,843			5,091			20,721			22,993
	Amortization of intangibles		4,288			4,613			16,543			18,156
	Impairment charges on long-lived assets		46,644			27,648			83,281			33,371
	Provision (recovery)—restructured operations		11,666			(2,366	)		11,666			(2,815	)

			426,001			504,477			1,615,758			1,981,613

Loss from operations			(84,088	)		(70,348	)		(118,267	)		(225,530	)
Income from unconsolidated companies			62			3,309			2,199			15,001
Interest expense—net			(10,047	)		(7,408	)		(41,900	)		(47,894	)
Other (expense) income—net			(26,825	)		11,197			(29,071	)		9,035

Loss from continuing operations before income taxes			(120,898	)		(63,250	)		(187,039	)		(249,388	)
Income tax benefit			(37,963	)		(7,905	)		(48,162	)		(70,702	)

Net loss from continuing operations			(82,935	)		(55,345	)		(138,877	)		(178,686	)
Earnings from discontinued operations—net			—			—			—			14,724
Gain on sale of discontinued operations—net			(7,513	)		—			(7,513	)		134,089

Net loss		$	(90,448	)	$	(55,345	)	$	(146,390	)	$	(29,873	)

Basic earnings (loss) per share:
	Loss from continuing operations	$	(1.43	)	$	(0.95	)	$	(2.39	)	$	(3.08	)
	Earnings from discontinued operations		—			—			—			0.25
	Gain on sale of discontinued operations		(0.13	)		—			(0.13	)		2.31

	Net loss	$	(1.56	)	$	(0.95	)	$	(2.52	)	$	(0.52	)

Diluted earnings (loss) per share:
	Loss from continuing operations	$	(1.43	)	$	(0.95	)	$	(2.39	)	$	(3.08	)
	Earnings from discontinued operations		—			—			—			0.25
	Gain on sale of discontinued operations		(0.13	)		—			(0.13	)		2.31

	Net loss	$	(1.56	)	$	(0.95	)	$	(2.52	)	$	(0.52	)

Average shares outstanding:
	Basic		58,150			57,998			58,116			57,950
	Diluted		58,150			57,998			58,116			57,950

THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)

		Quarter Ended						Year Ended
		December 30, 2001			December 31, 2000			December 30, 2001			December 31, 2000
					(Restated)						(Restated)
Net sales:
	Electrical	$	249,706		$	333,973		$	1,150,393		$	1,348,833
	Steel Structures		35,860			30,509			140,572			121,900
	Communications		26,454			41,076			108,063			178,439
	HVAC		29,893			28,571			98,463			106,911

		$	341,913		$	434,129		$	1,497,491		$	1,756,083

Segment earnings (loss):
	Electrical	$	(24,541	)	$	(24,406	)	$	(27,305	)	$	(137,391	)
	Steel Structures		4,709			762			18,212			10,155
	Communications		(3,371	)		(279	)		(10,168	)		(25,644	)
	HVAC		534			(2,911	)		1,187			1,529

	Total reportable segment loss		(22,669	)		(26,834	)		(18,074	)		(151,351	)
	Restructure (provision) recovery		(11,666	)		2,366			(11,666	)		2,815
	Interest expense		(10,047	)		(7,408	)		(41,900	)		(47,894	)
	Loss on sale of receivables		—			(64	)		—			(3,255	)
	Impairment charges on long-lived assets		(46,644	)		(27,648	)		(83,281	)		(33,371	)
	Other charges		(3,047	)		(14,919	)		(3,047	)		(26,824	)
	Other		(26,825	)		11,257			(29,071	)		10,492

Loss Before Income Taxes		$	(120,898	)	$	(63,250	)	$	(187,039	)	$	(249,388	)

THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Recap of Certain Costs
(In thousands)
(Unaudited)

				4th Quarter 2001			Year 2001
Certain costs excluded from segment earnings:
	Impairment charges on long-lived assets—
		Electrical segment
			Manufacturing efficiency and consolidation initiatives	$	30,041		$	30,041
			Impairment of product lines		—			36,637
			Other		(140	)		(140	)
		Communications segment
			Impairment of product lines		16,743			16,743

				$	46,644		$	83,281

Provisions (recovery)—restructured operations—
	Electrical segment
		Manufacturing efficiency and consolidation initiatives		$	11,666		$	11,666

				$	11,666		$	11,666

Gross Margin—
	Electrical segment
		Manufacturing efficiency and consolidation initiatives		$	3,047		$	3,047

				$	3,047		$	3,047

Other expense (income)—
	Settlement of patent infringement lawsuit			$	27,000		$	27,000
	Other				(175	)		2,071

				$	26,825		$	29,071

Certain costs reflected in segment earnings:
	Gross Margin—
		Electrical segment
		Manufacturing efficiency and consolidation initiatives		$	4,321		$	4,321
		Severance and miscellaneous			—			5,914
		Communications segment
		Severance and miscellaneous			—			400
		HVAC segment
		Severance and miscellaneous			—			150

				$	4,321		$	10,785

SG&A—
	Electrical segment
		Severance and miscellaneous		$	—		$	1,450

				$	—		$	1,450

THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)

		1st Quarter 2001			2nd Quarter 2001			3rd Quarter 2001			4th Quarter 2001			Year 2001
Net Sales
	Electrical	$	309,640		$	302,040		$	289,007		$	249,706		$	1,150,393
	Steel Structures		33,392			36,270			35,050			35,860			140,572
	Communications		28,340			27,579			25,690			26,454			108,063
	HVAC		25,576			19,555			23,439			29,893			98,463

		$	396,948		$	385,444		$	373,186		$	341,913		$	1,497,491

Segment Earnings (Loss)
	Electrical	$	909		$	3,986		$	(7,659	)	$	(24,541	)	$	(27,305	)
	Steel Structures		3,542			5,126			4,835			4,709			18,212
	Communications		(3,139	)		(2,783	)		(875	)		(3,371	)		(10,168	)
	HVAC		977			(1,329	)		1,005			534			1,187

	Total reportable segment earnings (loss)		2,289			5,000			(2,694	)		(22,669	)		(18,074	)
	Restructure (provision) recovery		—			—			—			(11,666	)		(11,666	)
	Interest expense		(9,969	)		(10,529	)		(11,355	)		(10,047	)		(41,900	)
	Impairment charges on long-lived assets		—			—			(36,637	)		(46,644	)		(83,281	)
	Other charges		—			—			—			(3,047	)		(3,047	)
	Other		483			(2,246	)		(483	)		(26,825	)		(29,071	)

Earnings (Loss) Before Income Taxes		$	(7,197	)	$	(7,775	)	$	(51,169	)	$	(120,898	)	$	(187,039	)

		1st Quarter 2001			2nd Quarter 2001			3rd Quarter 2000			4th Quarter 2000			Year 2000
											(Restated)			(Restated)
Net Sales
	Electrical	$	369,923		$	303,220		$	341,717		$	333,973		$	1,348,833
	Steel Structures		29,415			32,479			29,497			30,509			121,900
	Communications		47,462			43,387			46,514			41,076			178,439
	HVAC		28,332			24,559			25,449			28,571			106,911

		$	475,132		$	403,645		$	443,177		$	434,129		$	1,756,083

Segment Earnings (Loss)
	Electrical	$	18,330		$	(114,350	)	$	(16,965	)	$	(24,406)	(a)	$	(137,391)	(a)
	Steel Structures		3,988			3,337			2,068			762	(a)		10,155	(a)
	Communications		(2,712	)		(16,566	)		(6,087	)		(279)	(a)		(25,644)	(a)
	HVAC		2,829			806			805			(2,911)	(a)		1,529	(a)

	Total reportable segment earnings (loss)		22,435			(126,773	)		(20,179	)		(26,834)	(a)		(151,351)	(a)
	Restructure (provision) recovery		449			—			—			2,366			2,815
	Interest expense		(14,287	)		(14,463	)		(11,736	)		(7,408	)		(47,894	)
	Gain (loss) on sale of receivables		(2,682	)		32			(541	)		(64	)		(3,255	)
	Impairment charges on long-lived assets		—			(5,723	)		—			(27,648	)		(33,371	)
	Other charges		—			(11,905	)		—			(14,919	)		(26,824	)
	Other		(857	)		(4,903	)		4,995			11,257			10,492

Earnings (Loss) Before Income Taxes		$	5,058		$	(163,735	)	$	(27,461	)	$	(63,250	)	$	(249,388	)

(a): Reflects favorable impact for the change from LIFO to FIFO inventory costing method as follows:
Electrical $17,051; Steel Structures $1,797; Communications $2,688; HVAC $1,306; reportable segments $22,842

THOMAS & BETTS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

				December 30, 2001		December 31, 2000
						(Restated)
			ASSETS
Current assets:
	Cash and cash equivalents			$	234,843	$	207,331
	Marketable securities				6,982		11,344
	Receivables—net				188,160		325,671
	Receivable—Electronics OEM sale				—		35,000
	Inventories—net				192,079		296,785
	Income tax receivables				5,779		—
	Deferred income taxes				79,821		83,251
	Other current assets				62,639		7,112

Total current assets					770,303		966,494
Property, plant and equipment—net					309,080		425,477
Intangible assets—net					474,830		537,502
Investments in unconsolidated companies					121,735		121,645
Deferred income taxes					50,148		—
Other assets					35,514		34,578

		Total assets		$	1,761,610	$	2,085,696

			LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Short-term debt			$	—	$	16,453
	Current maturities of long-term debt				54,002		6,025
	Accounts payable				120,688		156,840
	Accrued liabilities				176,959		209,634
	Income taxes payable				4,060		14,078
	Dividends payable				—		16,230

Total current liabilities					355,709		419,260
Long-term debt					618,035		669,983
Other long-term liabilities					104,581		80,090
Deferred income taxes					—		11,795
Shareholders' equity					683,285		904,568

		Total liabilities and shareholders' equity		$	1,761,610	$	2,085,696

QuickLinks

THOMAS & BETTS CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)
THOMAS & BETTS CORPORATION AND SUBSIDIARIES Segment Information (In thousands) (Unaudited)