SCHAFFHAUSEN, Switzerland, April 10, 2012 /PRNewswire/ -- TE Connectivity Ltd. (NYSE: TEL) today announced that it has entered into an agreement to sell its Touch Solutions business to The Gores Group for $380 million. The Company has also agreed to sell its TE Professional Services (TPS) business to BlueStream Professional Services, LLC, an affiliate ofKGP Logistics, for $23.5 million. The sale of Touch Solutions is subject to customary regulatory approvals. Both transactions are expected to close in the Company's third fiscal quarter of 2012.
Results related to these businesses will be recast for prior periods and reported as discontinued operations on the Company's financial statements beginning with its fiscal second quarter ended March 30, 2012. The Company expects to recognize in discontinued operations an after-tax loss in its fiscal second quarter of approximately $20 million related to these divestitures.
Touch Solutions, which has been reported as part of TE's Communications and Industrial Solutions segment, is a supplier of touch screens, touch monitors and all-in-one touch computers under the Elo TouchSystems brand. The business generated sales of $413 million in fiscal 2011.
TPS, acquired as part of TE's acquisition of ADC in December 2010, has been reported in the Telecom Networks business of TE's Network Solutions segment. TPS is a provider of engineering, furnishing and installation services to communication service providers. TE reported sales of $121 million in fiscal 2011 for the TPS business.
FISCAL SECOND QUARTER OUTLOOK
The results of both businesses will be recast for prior periods and reported as discontinued operations on the Company's financial statements beginning with its fiscal second quarter ended March 30, 2012. The expected impact on the outlook for the second quarter is as follows:
($ in Millions, except per share amounts)
January 25, 2012
Revised Outlook *
$3,300 to $3,400
$3,150 to $3,250
Q2 GAAP EPS
$0.57 to $0.61
$0.55 to $0.59
Q2 Adjusted EPS
$0.64 to $0.68
$0.62 to $0.66
* from Continuing Operations
The Company will report results for its fiscal second quarter and provide an updated outlook for the fiscal third quarter and full year before trading begins on April 25, 2012.
Information about TE Connectivity's use of non-GAAP financial measures is described below.
ABOUT TE CONNECTIVITY TE Connectivity is a global, $14 billion company that designs and manufactures approximately 500,000 products that connect and protect the flow of power and data inside the products that touch every aspect of our lives. Our nearly 100,000 employees partner with customers in virtually every industry—from consumer electronics, energy and healthcare, to automotive, aerospace and communication networks—enabling smarter, faster, better technologies to connect products to possibilities. Find more information about TE Connectivity at http://www.te.com.
NON-GAAP MEASURES "Adjusted Earnings Per Share" is a non-GAAP (U.S. Generally Accepted Accounting Principles) measure and should not be considered a replacement for GAAP results. We present diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. before special items, including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, other income or charges, if any, and, if applicable, related tax effects ("Adjusted Earnings Per Share"). We present Adjusted Earnings Per Share because we believe that it is appropriate for investors to consider results excluding these items in addition to results in accordance with GAAP. We believe such a measure provides a picture of our results that is more comparable among periods since it excludes the impact of special items, which may recur, but tend to be irregular as to timing, thereby making comparisons between periods more difficult. It also is a significant component in our incentive compensation plans. The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using Adjusted Earnings Per Share in combination with diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease on reported results.
Because we do not predict the amount and timing of special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, we do not provide reconciliations to GAAP of our forward-looking financial measures.
FORWARD-LOOKING STATEMENTS This release contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law. The forward-looking statements in this release include statements addressing our sale of the Touch Solutions and TPS businesses and our future financial condition and operating results. Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, the risks that the sales of the Touch Solutions and TPS businesses may not be consummated. More detailed information about these and other factors is set forth in TE Connectivity Ltd.'s Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2011 as well as in our Quarterly Report on Form 10-Q for the fiscal quarter ended Dec. 30, 2011, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.