HIGHLAND HEIGHTS, Ky. — General Cable Corporation reported results for the second quarter ended June 30, 2017. For the quarter, reported loss per share and reported operating loss were $1.42 and $23 million, respectively. The Company generated adjusted earnings per share and adjusted operating income of $0.11 and $32 million, respectively, for the quarter.
Michael T. McDonnell, President and Chief Executive Officer, said, “We are pleased with our continued strong execution. During the second quarter, we drove our strategic initiatives toward completion in North America and generated continued performance improvement in Latin America. As a result, we were within our guidance range for adjusted operating income as the positive impact of these items partially offset unfavorable industry dynamics experienced during the quarter. While we expect these dynamics to continue, we anticipate our performance over the second half of 2017 to be consistent with the first half of the year and up more than 30% as compared to the second half of 2016. We anticipate the momentum from our restructuring initiatives in North America and Latin America and project activity in our European land and subsea turn-key businesses to accelerate through the end of the year. Our entire team remains focused on operational excellence, outstanding customer service and execution of our strategic roadmap.”
Second Quarter Summary
- Board of Directors initiated review of strategic alternatives to maximize shareholder value, including a potential sale of the Company
- Reported operating loss of $23 million due to a non-cash charge of $36 million related to the sale of the Company's investment in Algeria in the second quarter of 2017, compared to a gain of $53 million on the sale of the Company's North American automotive ignition wire business in the second quarter of 2016
- Adjusted operating income of $32 million declined by $17 million period over period as restructuring savings and the continued performance improvement in Latin America were more than offset by the impact of lower subsea project activity and industry dynamics including pricing pressure in certain end markets in North America and Europe
- Maintained significant liquidity with $378 million of availability on the Company's $700 million asset-based revolving credit facility; completed the amendment of its asset-based revolving credit facility extending maturity date to 2022
- Impact of metal prices was a $2 million benefit compared to a negative $3 million impact in the prior year period
Second Quarter Segment Demand
North America – Unit volume was up 7% versus prior year driven principally by stronger demand for aerial transmission cables and industrial, construction and specialty (ICS) products.
Europe – Unit volume was down 7% versus prior year as stronger demand for electric utility products including land-based turnkey projects was more than offset by the easing performance of the subsea turnkey project business and continued weak demand for industrial and construction projects throughout the region.
Latin America – Unit volume was down 18% versus prior year driven by the impact of restructuring initiatives and uneven spending on electric infrastructure and construction projects throughout the region. The shipment of aerial transmission cables in Brazil was up 8% year over year.
Net Debt
At the end of the second quarter of 2017 and the end of the fourth quarter of 2016, total debt was $1,083 million and $939 million, respectively, and cash and cash equivalents were $97 million and $101 million, respectively. The increase in net debt was principally due to investment in working capital, partly due to higher metal prices, and payments totaling $52 million related to our FCPA resolution through the first half of 2017.
Other Matters
As a result of the Board of Directors' review of strategic alternatives, the Company has suspended its practice of issuing quarterly guidance and will not hold an earnings conference call for the second quarter of 2017.
Full results can be found here.
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