One of the largest wire and cable companies in the U.S. is taking a hard look at strategic alternatives in the face of further consolidation in the wire market. The board of General Cable, Highland Heights, KY, said in a statement this week that the alternatives to be considered include a potential sale of the company.
General Cable said it has engaged J.P. Morgan Securities LLC as financial advisor and Sullivan & Cromwell LLP as legal advisor to assist in the process.
“After careful consideration, our board has determined to undertake a review of strategic alternatives with the goal of maximizing shareholder value. While the management team has made excellent progress in the execution of our strategic roadmap to transform the company into a more focused, efficient and innovative organization, we expect the industry to consolidate over time and believe the review at this time is in the best interests of shareholders,” John E. Welsh, III, non-executive chairman of the board, said in the release.
The statement came as the company announced preliminary financial results for the second quarter ended June 30, 2017. General Cable said it expects to report revenues of approximately $923 million for North America, Europe and Latin America. The company also expects to report reported operating loss for the second quarter of approximately $23 million and adjusted operating income of $32 million. The expected reported operating loss primarily reflects a one-time non-cash charge of approximately $36 million related to the sale of the company’s investment in Algeria, which was divested as part of a divestiture program announced earlier. The company said interim financial statements for the quarter are not yet available and based its estimates on preliminary information.
“I am proud of the efforts of our people to transform our business over the last two years, including rationalizing the asset base and refocusing on core businesses, streamlining our supply chain, and accelerating profitable growth in key segments,” Michael McDonnell, president and CEO, said in the release. “While we are benefiting from these significant operational and financial performance improvements, current dynamics in our industry are masking those accomplishments, and we expect that trend to continue through the second half of 2017 and into 2018. As the board conducts its review, we remain committed to executing our plan, to competing and to continuing to deliver innovative wire and cable solutions that exceed customer expectations.”
The Company plans to report second quarter 2017 results on August 2, 2017.