BICCGeneral Reports First Quarter Results Declares Quarterly Dividend HIGHLAND HEIGHTS, Ky., April 18 /PRNewswire-AsiaNet/ -- General Cable Corporation, trading as BICCGeneral, reported proforma net income of $7.2 million for the 2000 first quarter or $0.21 per fully diluted share, adjusted to exclude results from the business units planned to be divested to Pirelli Cavi e Sistemi S.p.A. in a transaction announced February 9, 2000. For the quarter, the businesses to be divested reported a net loss of ($16.2) million or ($0.47) per fully diluted share. Including the divested operations in the first quarter results, the Company reported a net loss of ($9.0) million or ($0.26) per common share on sales of $716.8 million. Earnings for the ongoing businesses before interest, taxes, depreciation and amortization (EBITDA) were up 48% in the quarter to $34.8 million versus $23.5 million recorded in the 1999 first quarter. Key contributors to this year-over-year improvement were 11% organic revenue growth, 4% overall productivity improvement and $13.1 million of EBITDA contribution by the retained portion of the BICC businesses. Proforma cash flow (net income plus depreciation and amortization) per share for the ongoing businesses was up 29% to $0.49 per share versus the 1999 first quarter of $0.38 per share. The Company also announced that the Board of Directors declared its eleventh consecutive quarterly cash dividend of $0.05 per common share payable on May 5, 2000 to shareholders of record on April 21, 2000. "We are pleased to deliver improved quarterly earnings for our ongoing businesses compared to what we had previously forecast and are happy to report that our overall business outlook is improving," said Stephen Rabinowitz, Chairman and Chief Executive Officer of BICCGeneral. "While the conditions in the building wire business remain unsatisfactory, pricing did improve from the fourth quarter of last year and has trended up since January. Strong demand for telecommunication and utility cable supported stable-to-moderately rising prices in these markets. The New Power of One strategy continues to yield success in our North America, Iberia and Oceania regions. With regard to the businesses to be divested, the Company is ahead of schedule in the planned closure of its German energy cables joint venture and the expected net cash proceeds are currently forecasted to be slightly higher than originally anticipated. Our divestiture to Pirelli is on track for an expected summer closing. Overall, our business outlook has improved." Results of Ongoing Businesses Net sales for the first quarter for the ongoing businesses were $566.4 million, compared to $262.8 million recorded in the 1999 first quarter. After adjusting 1999 first quarter sales to reflect the $0.18 increase in the average monthly COMEX price per pound of copper, first quarter net sales increased 101% from $282.4 million in the first quarter of 1999. First quarter 2000 copper-adjusted net sales included $152.7 million of Energy Products sales related to the acquisition, a 58% increase in Electrical Products sales and a 29% increase in Communication Products sales. The increase in Electrical Products copper-adjusted net sales reflects the acquisition and sales volume growth in the pre-acquisition businesses, partially offset by lower selling prices for building wire products. Sales volume growth in Electrical Products included a 13% increase in building wire sales volume. The increase in copper-adjusted net sales for Communication Products reflects a 21% increase in sales volume for plastic insulated cables (PIC), a 14% increase in data networking cables sales volume and sales related to the acquisition. Selling, general and administrative (SG&A) expenses for the first quarter of 2000, for the ongoing operations, increased to $59.8 million from $29.5 million, primarily reflecting the acquisition from the prior year. SG&A expense as a percent of copper-adjusted net sales was down approximately 90 basis points from the first quarter of the prior year on a proforma basis. Net interest expense for the first quarter of 2000 for the ongoing operations increased to $14.1 million from $4.4 million. The increase reflects increased borrowings related to the acquisition and higher interest rates. The effective tax rate for the first quarter of 2000 was 35.5%, compared to 37.5% in the first quarter of the prior year, and reflects the impact of the addition of operations in jurisdictions with lower tax rates. Operating income for the ongoing businesses increased 46% to $25.3 million in the first quarter of 2000, from $17.3 million recorded in the year-earlier quarter. The increased operating income reflects the contribution related to the acquisition, manufacturing cost reductions, $2.5 million related to a change in inventory accounting method for the Company's North American non- metals inventory from FIFO to LIFO, and income related to sales volume growth. These contributions were partially offset by lower building wire price premiums, which reduced operating income by approximately $6.2 million in the first quarter. "Pricing in the building wire market began to improve in February and March, but was still down nine cents per pound versus the year-earlier quarter, depressing our otherwise improving operating performance. The 11% average decrease in building wire price premium from the 1999 first quarter reduced earnings by $0.11 per share," said Rabinowitz. "We are continuing aggressive cost reduction initiatives and have selectively curtailed production in certain of our building wire operations during the quarter to better balance our production with market demand at target price levels." Results of the Businesses to be Divested For the quarter ended March 31, 2000, BICCGeneral reported a proforma net loss for the businesses to be divested of ($16.2) million or ($0.47) per fully diluted share. The results from these businesses reflect the actual operating results of the businesses and proforma interest related to the estimated net divestiture proceeds of $216 million. Sales for these businesses were $150.4 million in the quarter. The results for the quarter reflect a significant loss from the European extra-high-voltage energy cable business as ongoing worldwide overcapacity continues to depress pricing. In addition, project activity for extra-high- voltage energy cable was down during the quarter, which resulted in lower- than-anticipated sales volume levels. The Company's Italian operations also suffered significant losses in the quarter as sales fell 28% from the fourth quarter level due to a drop in utility market demand. First Quarter Highlights During the first quarter, BICCGeneral: * Announced a definitive agreement to divest certain of its Pan-European, African and Asian energy cables businesses to Pirelli. In the sale of shares to Pirelli, the Company agreed to a sale price of $216 million, subject to certain closing adjustments. The Company recently received notice from the European Commission that antitrust review of the transaction will likely last an additional three months, or until late July. The Company continues to believe that at the end of the investigative phase, the Commission will approve the sale to Pirelli. * Announced the intention to sell to Draka Holding N.V. its interest in the telecommunications cable joint venture in Germany and to close the Company's energy cable joint venture and liquidate its assets. The energy cable joint venture has sustained losses for several years. The Company is ahead of schedule in the planned closure of the joint venture and the expected net cash proceeds are projected to be slightly more than originally anticipated. * Grew copper-adjusted sales with our historical top twenty customers 26% quarter-over-quarter, continuing a very positive trend that has resulted in a compound growth rate of 23% per year over the last five years to these flagship customers. * Renewed and extended a major telecommunications supply contract with a leading Regional Bell Operating Company (RBOC). This five-year contract to supply copper telecommunications cable is valued at approximately $360 million of revenue of which $50 million is incremental to the previous supply contract. The renewed telecommunications contract is in addition to the data communications and central office products the Company currently supplies to this customer. * Increased Communications Products revenues by 36% in the quarter led by sales to RBOCs, which were up a strong 33% in the first quarter. In addition, prices for PIC cables increased moderately from the prior year's first quarter as well as the 1999 fourth quarter. * Partnered with Anixter, a major global electrical and electronic distributor, and was awarded an exclusive contract to supply all of the medium- and low-voltage power, instrumentation and control cables for the construction of six new electrical power generating stations. Each new generating station represents $0.6 million to $1.0 million of cable requirements. BICCGeneral's New Power of One strategy was critical in garnering the award as the customer's decision criteria included superior service and product breadth that was unmatched by the competition. * Increased sales of enhanced data cable products to 35% of total category cable sales, up from 17% for the same period in the prior year. In addition, sales of fiber optic cable grew by 189% on the strength of very strong demand for these high performance cables and we are on track to sell approximately $30 million of fiber optic cables in 2000. * Was awarded a $5 million project over three years to supply copper and fiber shipboard cable to a major U.S. shipbuilder. Innovation in shipboard cable was a major factor for receiving the award. * Increased utility cable product sales by 21% over the fourth quarter. * Energized a utility project for Arizona Public Service (APS), a major western U.S. utility company. APS selected BICCGeneral to manufacture the cable and accessories, and to provide supervision and installation of the cable splices and terminations for the project. The 230kV, extra-high-voltage underground electrical power transmission cable was the longest route length of its type ever installed in the United States. * Grew our sales volume through our Iberian operation by 20% over the prior year in their domestic markets. Medium-voltage cable sales to the local electric utilities fueled the strong growth. Operating margins increased by one full percentage point as lean manufacturing techniques were employed to take better advantage of production capacity. * Sales in our New Zealand operations reached $14 million in the quarter, on the strength of a 60% increase in export sales to Australia, principally communication cables. * Dedicated a new manufacturing plant in the Oceania region. The new facility, which is located in Fiji, is a joint venture partnership with local investors. The plant is now fully operational and manufactures a variety of products including construction, telecommunication and low-voltage energy cables for commercial, industrial and utilities applications in local, as well as export markets. CEO Comments "While short-term performance continues to be impacted by losses from the businesses to be divested and from weak, although stable pricing conditions in our building wire business, we have renewed confidence that we are on a path to increasing our shareholders' return on investment," concluded Rabinowitz. BICCGeneral (NYSE: BGC), headquartered in Highland Heights, Kentucky, is a leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the communications, energy and electrical markets. The Company offers competitive strengths in such areas as breadth of product line, brand recognition, distribution and logistics, sales and service and operating efficiency. Communications wire and cable products transmit low-voltage signals for voice, data, video and control applications. Energy cables include low-, medium- and high-voltage power distribution and power transmission products. Electrical wire and cable products conduct electrical current for industrial, commercial and residential power and control applications. Visit our website at www.biccgeneral.com . Statements in this press release, other than historical facts, are forward-looking statements 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. Actual results may differ from those statements as a result of factors, risks and uncertainties over which the Company has no control. Such factors include domestic and local country price competition, particularly in certain segments of the power cable, building wire and cordset markets, and other competitive pressures; general economic conditions, particularly in construction; the Company's ability to increase manufacturing capacity and productivity; the Company's ability to successfully complete and integrate acquisitions and divestitures; the cost of raw materials, including copper; the impact of technological changes; the Company's ability to achieve productivity improvements; and other factors which are discussed in the Company's Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2000, as well as periodic reports filed with the Commission. TABLE TO FOLLOW BICCGeneral (General Cable Corporation and Subsidiaries) Consolidated Statements of Operations (Unaudited) (in millions, except per share data) * Ongoing Businesses Three Months Ended March 31 Net sales: 2000 1999 Fav/(Unfav) % Electrical Group $267.2 $154.9 $112.3 72% Communications Group 146.5 107.9 38.6 36% Energy Group 152.7 -- 152.7 N/A Total net sales 566.4 262.8 303.6 116% Cost of sales 481.3 216.0 (265.3) -123% Gross profit 85.1 46.8 38.3 82% Selling, general and administrative expenses 59.8 29.5 (30.3) -103% Operating income 25.3 17.3 8.0 46% Interest income (expense): Interest expense (14.5) (4.5) (10.0) -222% Interest income 0.4 0.1 0.3 300% (14.1) (4.4) (9.7) -220% Earnings (loss) before income taxes 11.2 12.9 (1.7) -13% Income tax (provision) benefit (4.0) (4.8) 0.8 17% Net income (loss) $ 7.2 $ 8.1 $ (0.9) -11% Earnings per common share $ 0.21 $ 0.22 $ (0.01) -5% Weighted average common shares 34.0 36.9 (2.9) -8% Earnings (loss) per common share- assuming dilution $ 0.21 $ 0.22 $ (0.01) -5% Weighted average common shares- assuming dilution 34.0 37.2 (3.2) -9% * Reflects the operations that will remain upon completion of the transactions announced on February 2000. Interest expense assumes that the transaction occurred on January 1, 2000. BICCGeneral (General Cable Corporation and Subsidiaries) Consolidated Statements of Operations (Unaudited) (in millions, except per share data) Total Company Three Months Ended March 31 Net sales: 2000 1999 Fav/(Unfav) % Electrical Group $345.0 $154.9 $190.1 123% Communications Group 146.5 107.9 38.6 36% Energy Group 225.3 -- 225.3 N/A Total net sales 716.8 262.8 454.0 173% Cost of sales 631.9 216.0 (415.9) -193% Gross profit 84.9 46.8 38.1 81% Selling, general and administrative expenses 79.8 29.5 (50.3) -171% Operating income 5.1 17.3 (12.2) -71% Interest income (expense): Interest expense (19.4) (4.5) (14.9) -331% Interest income 0.4 0.1 0.3 300% (19.0) (4.4) (14.6) -332% Earnings (loss) before income taxes (13.9) 12.9 (26.8) -208% Income tax (provision) benefit 4.9 (4.8) 9.7 202% Net income (loss) $ (9.0) $ 8.1 $ (17.1) -211% Earnings per common share $ (0.26) $ 0.22 $ (0.48) -218% Weighted average common shares 34.0 36.9 (2.9) -8% Earnings (loss) per common share- assuming dilution $ (0.26) $ 0.22 $ (0.48) -218% Weighted average common shares- assuming dilution 34.0 37.2 (3.2) -9% * Reflects the operations that will remain upon completion of the transactions announced on February 2000. Interest expense assumes that the transaction occurred on January 1, 2000. SOURCE BICCGeneral CONTACT: Stephen J. Smith, Vice President & Treasurer, Investor Relations of BICCGeneral, 606-572-8684 Web site: http://www.biccgeneral.com