Hubbell Reports Strong Second Quarter Results.ORANGE, Conn. -- Hubbell Hubbell may refer to: People with the surname Hubbell:
See: New York Stock Exchange : HUBA, HUBB) today reported strong results for the second quarter ended June June: see month. 30, 2004. Sales for the quarter were $502.9 million or a 12% increase over sales of $449.3 million reported for the corresponding period of 2003. Net income was 30% higher at $31.4 million and earnings per share increased by 28% to $.51 as compared to $24.2 million and $.40, respectively, reported in the prior year. Profit results in both periods included expenses under the company's continuing restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). programs of $10.4 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta in 2004 and $6.6 million pre-tax in 2003. The second quarter 2004 restructuring expense provided for a factory closure in Hubbell Wiring Systems and ongoing restructuring in Hubbell's Lighting businesses. OPERATIONS REVIEW: "Hubbell's second quarter results more than met our expectations," said Timothy H. Powers, President and Chief Executive Officer, "in both the pace of recovery in our markets, and the value of our strategic initiatives. A second consecutive quarter of double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. sales increases reflects improving conditions in our major markets. Higher volume combined with the effectiveness of the transformation of the operations yielded a 32% increase in operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. . We're we're Contraction of we are. we're we are also pleased that each of our three segments reported higher margins in the quarter with the consolidated operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: up by 140 basis points even after incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. $3.8 million pre-tax in incremental cost Incremental Cost The encompassing change that a company experiences within its balance sheet due to one additional unit of production. Notes: Incremental cost is the overall change that a company experiences by producing one additional unit of good. associated with special charges." "The cost of raw materials continued to present a significant challenge during the quarter," Powers added. "While costs have moderated on some materials, most metals, freight, and energy costs are significantly higher than one year ago. Steel costs are still volatile and show no signs of moderating. Many of our announced price increases took effect during the second quarter which partially countered rising costs, but we remain concerned about the level and volatility of these costs." Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $79.6 million compares to $90.2 million in 2003 as higher net income was more than offset by higher working capital to support sales growth. SEGMENT REVIEW Sales for the Electrical Segment rose by more than 13% with operating margin up by 150 basis points. Within the segment, Hubbell's wiring systems businesses reported higher sales due to improving factory maintenance and repair activity. Hubbell Lighting also had a strong quarter as demand increased across a broad array of markets. Residential lighting fixture An article in the nature of Personal Property which has been so annexed to the realty that it is regarded as a part of the real property. That which is fixed or attached to something permanently as an appendage and is not removable. markets remained strong and demand in commercial markets such as architectural, emergency and fluorescent fixtures Noun 1. fluorescent fixture - a lighting fixture that uses a fluorescent lamp fluorescent lighting fixture - a fixture providing artificial light continued to strengthen. Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. sales and operating profit comparisons were reported by Hubbell Electrical Products where higher sales of products for harsh and hazardous and electrical rough-in applications countered sluggishness in non-residential construction markets. Hubbell Power Systems results continue to benefit from leading positions in its core utility product markets and success in expanding into related construction markets. Domestic utility customers continued modestly higher project and maintenance investments required by the growing activity in the economy and stronger utility balance sheets. Sales for the Segment increased by 13% year-over-year and operating margin rose by 80 basis points to 9.5% as higher sales volume and productivity gains added to profitability. The Industrial Technology Segment reported a 6% decline in sales chiefly as a result of weaker demand in markets for high voltage The term high voltage characterizes electrical circuits, in which the voltage used is the cause of particular safety concerns and insulation requirements. High voltage is used in electrical power distribution, in cathode ray tubes, to generate X-rays and particle beams, to testing and instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. . However, improved results at businesses manufacturing industrial controls and equipment and internal productivity programs contributed to a 300 basis point increase in operating margin. SUMMARY AND OUTLOOK "We're particularly pleased with another confirmation of the effectiveness of our strategic initiatives," said Powers. "Even though we're still in the early stages of these efforts, our results are testimony to the progress we're making. We're expanding our lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. effort internally as well as involving suppliers and customers. Our restructuring programs continue to be executed on schedule and on budget. The Hubbell 2006 Program - a multi-year implementation of a single business system across the enterprise - - is moving forward. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , as we achieve our interim goals in these programs, we're moving toward bolder, more demanding and more rewarding objectives." "Looking ahead to the remainder of 2004, the strong results so far have raised our expectations. Revenue growth for the year should approximate 10-12% with earnings per share, excluding restructuring costs, in the range of $2.35 -- $2.50." Certain statements contained herein may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These include statements about capital resources, performance and results of operations and are based on the Company's reasonable current expectations. These statements may be identified by the use of forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. words or phrases such as "volatility", "growing", "improving", "expectations", "expanding", "moving", "toward", "forward", "progress", "continued", "continuing", "goals", "ongoing", "should", and others. Such forward-looking statements involve numerous assumptions, known and unknown risks, uncertainties and other factors which may cause actual and future performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: achieving sales levels to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. revenue expectations; unexpected costs or charges, certain of which may be outside the control of the Company; expected benefits of process improvement and other lean initiatives; the effect and costs of the ongoing Hubbell 2006 business information system initiative and restructuring programs; the availability and costs of raw materials and purchased components; realization of price increases; the ability to achieve projected levels of efficiencies and cost reduction measures; general economic and business conditions; and competition. Hubbell Incorporated is an international manufacturer of quality electrical and electronic products for commercial, industrial, residential, utility, and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. markets. With 2003 revenues of $1.8 billion, Hubbell Incorporated operates manufacturing facilities in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. , and the United Kingdom, participates in a joint venture in Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan , and maintains sales offices in Singapore, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , South Korea, People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China, and the Middle East. The corporate headquarters is located in Orange, CT.
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF EARNINGS
(in millions, except per share data)
(unaudited) (unaudited)
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30 JUNE 30
2004 2003 2004 2003
------- ------- ------- -------
Net Sales $502.9 $449.3 $968.1 $868.7
Cost of goods sold 362.7 (1) 333.6 (2) 695.2 (1) 643.2 (2)
------- ------- ------- -------
Gross Profit 140.2 115.7 272.9 225.5
Selling & administrative
expenses 83.2 75.0 163.6 149.9
Special charges 9.5 4.8 10.7 5.9
------- ------- ------- -------
Total Operating Income 47.5 35.9 98.6 69.7
Investment income 1.0 1.0 2.2 2.0
Interest expense (5.1) (5.1) (10.2) (10.3)
Other income (expense), net (0.5) 0.9 (0.5) 0.6
------- ------- ------- -------
Total Other Expense, net (4.6) (3.2) (8.5) (7.7)
Income Before Income Taxes 42.9 32.7 90.1 62.0
Provision for income taxes 11.5 8.5 24.7 16.1
------- ------- ------- -------
NET INCOME $ 31.4 $ 24.2 $ 65.4 $ 45.9
======= ======= ======= =======
Earnings Per Share -
Diluted $ 0.51 $ 0.40 $ 1.07 $ 0.76
Average Shares Outstanding -
Diluted 61.6 59.9 61.4 59.9
======= ======= ======= =======
(1) 2004 Cost of goods sold includes a special charge of $0.9 and $1.1
for Lighting business restructuring in the second quarter and year
to date, respectively.
(2) 2003 Cost of goods sold includes a special charge of $1.8 for
Lighting business restructuring in the second quarter and year to
date.
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF EARNINGS BY SEGMENT
(in millions, except per share data)
(unaudited) (unaudited)
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30 JUNE 30
2004 2003 2004 2003
------- ------- ------- -------
Net Sales
Electrical $375.3 $331.0 $720.6 $643.1
Power 96.0 84.8 183.8 163.8
Industrial Technology 31.6 33.5 63.7 61.8
------- ------- ------- -------
Total Net Sales $502.9 $449.3 $968.1 $868.7
======= ======= ======= =======
Operating Income
Electrical $ 45.4 $ 32.5 $ 84.0 $ 59.3
Special charges (10.4) (6.6) (11.8) (7.7)
------- ------- ------- -------
Total Electrical 35.0 25.9 72.2 51.6
Power 9.1 7.4 19.6 13.8
Industrial Technology 3.4 2.6 6.8 4.3
------- ------- ------- -------
Total Operating Income 47.5 35.9 98.6 69.7
------- ------- ------- -------
Other expense, net (4.6) (3.2) (8.5) (7.7)
------- ------- ------- -------
Income Before Income Taxes 42.9 32.7 90.1 62.0
Provision for income taxes 11.5 8.5 24.7 16.1
------- ------- ------- -------
NET INCOME $ 31.4 $ 24.2 $ 65.4 $ 45.9
======= ======= ======= =======
Earnings Per Share - Diluted $ 0.51 $ 0.40 $ 1.07 $ 0.76
Average Shares Outstanding -
Diluted 61.6 59.9 61.4 59.9
======= ======= ======= =======
HUBBELL INCORPORATED
CONSOLIDATED BALANCE SHEET
(in millions)
(UNAUDITED) (UNAUDITED)
JUNE 2004 MARCH 2004 DEC. 2003
----------- ---------- ----------
ASSETS
Cash and temporary cash
investments $ 261.9 $ 222.4 $ 220.8
Accounts receivable (net) 285.3 267.1 227.1
Inventories (net) 222.4 214.6 207.9
Deferred taxes and other 52.7 51.0 53.5
---------- ---------- ----------
CURRENT ASSETS 822.3 755.1 709.3
Property, plant and equipment
(net) 276.1 289.4 295.8
Investments 77.1 79.2 80.1
Goodwill 323.3 324.1 322.7
Intangible assets and other 83.7 89.7 91.5
---------- ---------- ----------
TOTAL ASSETS $ 1,582.5 $ 1,537.5 $ 1,499.4
========== ========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Accounts payable $ 133.5 $ 115.7 $ 103.6
Accrued salaries, wages and
employee benefits 60.1 49.5 51.1
Accrued income taxes 37.9 48.2 34.9
Dividends payable 20.0 19.9 19.9
Other accrued liabilities 80.7 75.3 78.9
---------- ---------- ----------
CURRENT LIABILITIES 332.2 308.6 288.4
Long-term debt 298.9 298.9 298.8
Other non-current liabilities 82.7 82.9 82.5
---------- ---------- ----------
TOTAL LIABILITIES 713.8 690.4 669.7
SHAREHOLDERS' EQUITY 868.7 847.1 829.7
---------- ---------- ----------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $ 1,582.5 $ 1,537.5 $ 1,499.4
========== ========== ==========
HUBBELL INCORPORATED
CONDENSED CONSOLIDATED CASH FLOWS
(in millions)
(unaudited)
SIX MONTHS ENDED
JUNE 30
2004 2003
---------- ----------
Operating Activities
Net Income $ 65.4 $ 45.9
Depreciation and amortization 25.7 26.4
Non-cash special charges 7.7 2.8
Changes in working capital (23.4) 11.1
Other, net 4.2 4.0
---------- ----------
Net cash provided by operating activities 79.6 90.2
Supplementary Cash Flow Information
Capital expenditures $ (14.9) $ (12.3)
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