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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Hubbell Incorporated | NYSE:HUBB | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
6.95 | 1.86% | 379.89 | 381.305 | 376.29 | 377.43 | 433,697 | 01:00:00 |
STATE OF CONNECTICUT
|
06-0397030
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(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
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40 Waterview Drive, Shelton, CT
|
06484
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(Address of principal executive offices)
|
(Zip Code)
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(475) 882-4000
|
|
(Registrant’s telephone number, including area code)
|
N/A
|
(Former name, former address and former fiscal year, if changed since last report.)
|
Table of contents
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PART I
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FINANCIAL INFORMATION
|
ITEM 1
|
Financial Statements
|
|
Three Months Ended March 31,
|
|||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
||
Net sales
|
$
|
852.3
|
|
$
|
834.8
|
|
Cost of goods sold
|
590.5
|
|
574.9
|
|
||
Gross profit
|
261.8
|
|
259.9
|
|
||
Selling & administrative expenses
|
157.7
|
|
158.0
|
|
||
Operating income
|
104.1
|
|
101.9
|
|
||
Interest expense, net
|
(11.1
|
)
|
(9.0
|
)
|
||
Other (expense) income, net
|
(2.1
|
)
|
(1.3
|
)
|
||
Total other expense
|
(13.2
|
)
|
(10.3
|
)
|
||
Income before income taxes
|
90.9
|
|
91.6
|
|
||
Provision for income taxes
|
27.0
|
|
29.6
|
|
||
Net income
|
63.9
|
|
62.0
|
|
||
Less: Net income attributable to noncontrolling interest
|
1.1
|
|
1.1
|
|
||
Net income attributable to Hubbell
|
$
|
62.8
|
|
$
|
60.9
|
|
Earnings per share
|
|
|
|
|
||
Basic
|
$
|
1.13
|
|
$
|
1.08
|
|
Diluted
|
$
|
1.13
|
|
$
|
1.08
|
|
Cash dividends per common share
|
$
|
0.70
|
|
$
|
0.63
|
|
|
Three Months Ended March 31,
|
|||||
(in millions)
|
2017
|
|
2016
|
|
||
Net income
|
$
|
63.9
|
|
$
|
62.0
|
|
Other comprehensive income (loss):
|
|
|
|
|
||
Foreign currency translation adjustments
|
11.5
|
|
0.7
|
|
||
Pension and post-retirement benefit plans’ prior service costs and net actuarial gains, net of taxes of ($0.9) and ($1.1)
|
1.7
|
|
2.0
|
|
||
Unrealized gain on investments, net of taxes of ($0.4) and ($0.2)
|
0.4
|
|
0.3
|
|
||
Unrealized loss on cash flow hedges, net of taxes of $0.1 and $0.4
|
(0.1
|
)
|
(2.3
|
)
|
||
Other comprehensive income
|
13.5
|
|
0.7
|
|
||
Total comprehensive income
|
77.4
|
|
62.7
|
|
||
Less: Comprehensive income attributable to noncontrolling interest
|
1.1
|
|
1.1
|
|
||
Comprehensive income attributable to Hubbell
|
$
|
76.3
|
|
$
|
61.6
|
|
|
|
|
(in millions)
|
March 31, 2017
|
|
December 31, 2016
|
|
||
ASSETS
|
|
|
|
|
||
Current Assets
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
381.0
|
|
$
|
437.6
|
|
Short-term investments
|
9.8
|
|
11.2
|
|
||
Accounts receivable, net
|
545.0
|
|
530.0
|
|
||
Inventories, net
|
547.8
|
|
532.4
|
|
||
Other current assets
|
34.0
|
|
40.1
|
|
||
Total Current Assets
|
1,517.6
|
|
1,551.3
|
|
||
Property, Plant, and Equipment, net
|
437.8
|
|
439.8
|
|
||
Other Assets
|
|
|
|
|
||
Investments
|
59.2
|
|
56.4
|
|
||
Goodwill
|
1,000.5
|
|
991.0
|
|
||
Intangible assets, net
|
427.3
|
|
431.5
|
|
||
Other long-term assets
|
52.2
|
|
55.0
|
|
||
TOTAL ASSETS
|
$
|
3,494.6
|
|
$
|
3,525.0
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
||
Short-term debt
|
$
|
5.1
|
|
$
|
3.2
|
|
Accounts payable
|
300.1
|
|
291.6
|
|
||
Accrued salaries, wages and employee benefits
|
65.3
|
|
82.8
|
|
||
Accrued insurance
|
60.0
|
|
55.8
|
|
||
Other accrued liabilities
|
145.5
|
|
156.2
|
|
||
Total Current Liabilities
|
576.0
|
|
589.6
|
|
||
Long-Term Debt
|
990.9
|
|
990.5
|
|
||
Other Non-Current Liabilities
|
338.9
|
|
341.7
|
|
||
TOTAL LIABILITIES
|
1,905.8
|
|
1,921.8
|
|
||
Total Hubbell Shareholders’ Equity
|
1,578.7
|
|
1,592.8
|
|
||
Noncontrolling interest
|
10.1
|
|
10.4
|
|
||
Total Equity
|
1,588.8
|
|
1,603.2
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
3,494.6
|
|
$
|
3,525.0
|
|
|
Three Months Ended March 31,
|
|||||
(in millions)
|
2017
|
2016
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
||
Net income
|
$
|
63.9
|
|
$
|
62.0
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||
Depreciation and amortization
|
24.2
|
|
22.7
|
|
||
Deferred income taxes
|
0.7
|
|
0.5
|
|
||
Stock-based compensation
|
4.2
|
|
4.6
|
|
||
Changes in assets and liabilities, excluding effects of acquisitions:
|
|
|
|
|
||
Increase in accounts receivable, net
|
(13.1
|
)
|
(27.1
|
)
|
||
Increase in inventories, net
|
(12.2
|
)
|
(6.1
|
)
|
||
Decrease in current liabilities
|
(9.8
|
)
|
(6.8
|
)
|
||
Changes in other assets and liabilities, net
|
8.3
|
|
11.9
|
|
||
Contribution to qualified defined benefit pension plans
|
(0.4
|
)
|
(0.5
|
)
|
||
Other, net
|
(2.8
|
)
|
1.1
|
|
||
Net cash provided by operating activities
|
63.0
|
|
62.3
|
|
||
Cash Flows from Investing Activities
|
|
|
|
|
||
Capital expenditures
|
(13.6
|
)
|
(15.3
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(19.2
|
)
|
(172.2
|
)
|
||
Purchases of available-for-sale investments
|
(3.3
|
)
|
(3.2
|
)
|
||
Proceeds from available-for-sale investments
|
2.4
|
|
2.2
|
|
||
Other, net
|
0.8
|
|
0.5
|
|
||
Net cash used in investing activities
|
(32.9
|
)
|
(188.0
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
|
||
Long-term debt borrowings
|
—
|
|
397.0
|
|
||
Short-term debt borrowings, net
|
2.0
|
|
(48.2
|
)
|
||
Payment of dividends
|
(38.8
|
)
|
(35.5
|
)
|
||
Payment of dividends to noncontrolling interest
|
(1.4
|
)
|
(0.7
|
)
|
||
Repurchase of common shares
|
(52.6
|
)
|
(201.8
|
)
|
||
Debt issuance costs
|
—
|
|
(3.6
|
)
|
||
Other, net
|
(3.3
|
)
|
(2.7
|
)
|
||
Net cash (used) provided by financing activities
|
(94.1
|
)
|
104.5
|
|
||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
7.4
|
|
(1.5
|
)
|
||
Decrease in cash and cash equivalents
|
(56.6
|
)
|
(22.7
|
)
|
||
Cash and cash equivalents
|
|
|
||||
Beginning of period
|
437.6
|
|
343.5
|
|
||
End of period
|
$
|
381.0
|
|
$
|
320.8
|
|
|
|
Tangible assets acquired
|
$
|
3.1
|
|
Intangible assets
|
3.4
|
|
|
Goodwill
|
4.0
|
|
|
Other liabilities assumed
|
(1.2
|
)
|
|
TOTAL CONSIDERATION, NET OF CASH RECEIVED
|
$
|
9.3
|
|
|
|
Net Sales
|
Operating Income
|
Operating Income as a % of Net Sales
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
|||||||
Electrical
|
$
|
587.5
|
|
$
|
582.7
|
|
$
|
50.0
|
|
$
|
55.4
|
|
8.5
|
%
|
9.5
|
%
|
Power
|
264.8
|
|
252.1
|
|
54.1
|
|
46.5
|
|
20.4
|
%
|
18.4
|
%
|
||||
TOTAL
|
$
|
852.3
|
|
$
|
834.8
|
|
$
|
104.1
|
|
$
|
101.9
|
|
12.2
|
%
|
12.2
|
%
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Raw material
|
$
|
169.0
|
|
$
|
162.7
|
|
Work-in-process
|
109.4
|
|
102.8
|
|
||
Finished goods
|
330.3
|
|
327.9
|
|
||
|
608.7
|
|
593.4
|
|
||
Excess of FIFO over LIFO cost basis
|
(60.9
|
)
|
(61.0
|
)
|
||
TOTAL
|
$
|
547.8
|
|
$
|
532.4
|
|
|
|
Segment
|
|
|
||||||
|
Electrical
|
|
Power
|
|
Total
|
|
|||
BALANCE DECEMBER 31, 2016
|
$
|
652.0
|
|
$
|
339.0
|
|
$
|
991.0
|
|
Current year acquisitions (Note 2 – Business Acquisitions)
|
—
|
|
4.0
|
|
4.0
|
|
|||
Foreign currency translation and prior year acquisitions
|
3.7
|
|
1.8
|
|
5.5
|
|
|||
BALANCE MARCH 31, 2017
|
$
|
655.7
|
|
$
|
344.8
|
|
$
|
1,000.5
|
|
|
March 31, 2017
|
December 31, 2016
|
||||||||||
|
Gross Amount
|
|
Accumulated
Amortization
|
|
Gross Amount
|
|
Accumulated
Amortization
|
|
||||
Definite-lived:
|
|
|
|
|
|
|
|
|
||||
Patents, tradenames and trademarks
|
$
|
146.8
|
|
$
|
(45.6
|
)
|
$
|
143.7
|
|
$
|
(43.4
|
)
|
Customer/agent relationships and other
|
407.8
|
|
(134.8
|
)
|
405.9
|
|
(128.0
|
)
|
||||
Total
|
$
|
554.6
|
|
$
|
(180.4
|
)
|
$
|
549.6
|
|
$
|
(171.4
|
)
|
Indefinite-lived:
|
|
|
|
|
|
|
|
|
||||
Tradenames and other
|
53.1
|
|
—
|
|
53.3
|
|
—
|
|
||||
TOTAL
|
$
|
607.7
|
|
$
|
(180.4
|
)
|
$
|
602.9
|
|
$
|
(171.4
|
)
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Customer program incentives
|
$
|
20.1
|
|
$
|
41.2
|
|
Accrued income taxes
|
22.3
|
|
8.4
|
|
||
Deferred revenue
|
12.3
|
|
11.8
|
|
||
Other
|
90.8
|
|
94.8
|
|
||
TOTAL
|
$
|
145.5
|
|
$
|
156.2
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Pensions
|
$
|
208.2
|
|
$
|
208.3
|
|
Other post-retirement benefits
|
24.0
|
|
24.0
|
|
||
Deferred tax liabilities
|
41.5
|
|
41.2
|
|
||
Other
|
65.2
|
|
68.2
|
|
||
TOTAL
|
$
|
338.9
|
|
$
|
341.7
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Common stock, $.01 par value:
|
|
|
|
|
||
Common Stock-- authorized 200.0 shares; issued and outstanding 55.0 and 55.5 shares
|
$
|
0.5
|
|
$
|
0.6
|
|
Additional paid-in capital
|
—
|
|
15.4
|
|
||
Retained earnings
|
1,867.2
|
|
1,879.3
|
|
||
Accumulated other comprehensive loss:
|
|
|
|
|
||
Pension and post retirement benefit plan adjustment, net of tax
|
(178.8
|
)
|
(180.5
|
)
|
||
Cumulative translation adjustment
|
(109.3
|
)
|
(120.8
|
)
|
||
Unrealized gain on investment, net of tax
|
(0.8
|
)
|
(1.2
|
)
|
||
Cash flow hedge (loss) gain, net of tax
|
(0.1
|
)
|
—
|
|
||
Total Accumulated other comprehensive loss
|
(289.0
|
)
|
(302.5
|
)
|
||
Hubbell shareholders’ equity
|
1,578.7
|
|
1,592.8
|
|
||
Noncontrolling interest
|
10.1
|
|
10.4
|
|
||
TOTAL EQUITY
|
$
|
1,588.8
|
|
$
|
1,603.2
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||
|
2017
|
2016
|
||||||||||||||||
|
Hubbell
Shareholders’
Equity
|
|
Noncontrolling
interest
|
|
Total Equity
|
|
Hubbell
Shareholders’
Equity
|
|
Noncontrolling
interest
|
|
Total Equity
|
|
||||||
EQUITY, JANUARY 1
|
$
|
1,592.8
|
|
$
|
10.4
|
|
$
|
1,603.2
|
|
$
|
1,740.6
|
|
$
|
8.4
|
|
$
|
1,749.0
|
|
Total comprehensive income
|
76.3
|
|
1.1
|
|
77.4
|
|
61.6
|
|
1.1
|
|
62.7
|
|
||||||
Stock-based compensation
|
4.2
|
|
—
|
|
4.2
|
|
4.6
|
|
—
|
|
4.6
|
|
||||||
Income tax windfall from stock-based awards, net
|
—
|
|
—
|
|
—
|
|
0.8
|
|
—
|
|
0.8
|
|
||||||
Repurchase/surrender of shares of common stock
|
(55.9
|
)
|
—
|
|
(55.9
|
)
|
(205.2
|
)
|
—
|
|
(205.2
|
)
|
||||||
Issuance of shares related to directors’ deferred compensation, net
|
0.1
|
|
—
|
|
0.1
|
|
0.1
|
|
—
|
|
0.1
|
|
||||||
Dividends to noncontrolling interest
|
—
|
|
(1.4
|
)
|
(1.4
|
)
|
—
|
|
(0.7
|
)
|
(0.7
|
)
|
||||||
Cash dividends declared
|
(38.8
|
)
|
—
|
|
(38.8
|
)
|
(35.6
|
)
|
—
|
|
(35.6
|
)
|
||||||
EQUITY, MARCH 31
|
$
|
1,578.7
|
|
$
|
10.1
|
|
$
|
1,588.8
|
|
$
|
1,566.9
|
|
$
|
8.8
|
|
$
|
1,575.7
|
|
|
(debit) credit
|
Cash flow
hedge (loss)
gain
|
|
Unrealized
gain (loss) on
available-for-
sale securities
|
|
Pension
and post
retirement
benefit plan
adjustment
|
|
Cumulative
translation
adjustment
|
|
Total
|
|
|||||
BALANCE AT DECEMBER 31, 2016
|
$
|
—
|
|
$
|
(1.2
|
)
|
$
|
(180.5
|
)
|
$
|
(120.8
|
)
|
$
|
(302.5
|
)
|
Other comprehensive income (loss) before reclassifications
|
(0.2
|
)
|
0.4
|
|
—
|
|
11.5
|
|
11.7
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
0.1
|
|
—
|
|
1.7
|
|
—
|
|
1.8
|
|
|||||
Current period other comprehensive income (loss)
|
(0.1
|
)
|
0.4
|
|
1.7
|
|
11.5
|
|
13.5
|
|
|||||
BALANCE AT MARCH 31, 2017
|
$
|
(0.1
|
)
|
$
|
(0.8
|
)
|
$
|
(178.8
|
)
|
$
|
(109.3
|
)
|
$
|
(289.0
|
)
|
Details about Accumulated Other
Comprehensive Loss Components
|
Three Months Ended March 31, 2017
|
Three Months Ended March 31, 2016
|
|
Location of Gain (Loss)
Reclassified into Income
|
||||
Cash flow hedges gain (loss):
|
|
|
|
|
|
|
||
Forward exchange contracts
|
$
|
—
|
|
$
|
0.1
|
|
|
Net sales
|
|
(0.1
|
)
|
1.0
|
|
|
Cost of goods sold
|
||
|
(0.1
|
)
|
1.1
|
|
|
Total before tax
|
||
|
—
|
|
(0.3
|
)
|
|
Tax (expense) benefit
|
||
|
$
|
(0.1
|
)
|
$
|
0.8
|
|
|
Gain (loss) net of tax
|
Amortization of defined benefit pension and post retirement benefit items:
|
|
|
|
|
|
|
||
Prior-service costs
|
$
|
0.2
|
|
$
|
0.2
|
|
(a)
|
|
Actuarial gains/(losses)
|
(2.8
|
)
|
(3.5
|
)
|
(a)
|
|
||
|
(2.6
|
)
|
(3.3
|
)
|
|
Total before tax
|
||
|
0.9
|
|
1.3
|
|
|
Tax benefit (expense)
|
||
|
$
|
(1.7
|
)
|
$
|
(2.0
|
)
|
|
(Loss) gain net of tax
|
Losses reclassified into earnings
|
$
|
(1.8
|
)
|
$
|
(1.2
|
)
|
|
(Loss) gain net of tax
|
(a)
|
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 11 - Pension and Other Benefits for additional details).
|
|
|
Three Months Ended March 31,
|
|||||
|
2017
|
|
2016
|
|
||
Numerator:
|
|
|
|
|
||
Net income attributable to Hubbell
|
$
|
62.8
|
|
$
|
60.9
|
|
Less: Earnings allocated to participating securities
|
(0.2
|
)
|
(0.2
|
)
|
||
Net income available to common shareholders
|
$
|
62.6
|
|
$
|
60.7
|
|
Denominator:
|
|
|
|
|
||
Average number of common shares outstanding
|
55.2
|
|
56.3
|
|
||
Potential dilutive common shares
|
0.4
|
|
0.2
|
|
||
Average number of diluted shares outstanding
|
55.6
|
|
56.5
|
|
||
Earnings per share:
|
|
|
|
|
||
Basic
|
$
|
1.13
|
|
$
|
1.08
|
|
Diluted
|
$
|
1.13
|
|
$
|
1.08
|
|
|
|
Pension Benefits
|
Other Benefits
|
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
||||
Service cost
|
$
|
1.5
|
|
$
|
3.5
|
|
$
|
—
|
|
$
|
—
|
|
Interest cost
|
9.2
|
|
10.5
|
|
0.3
|
|
0.3
|
|
||||
Expected return on plan assets
|
(8.5
|
)
|
(11.0
|
)
|
—
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
—
|
|
(0.2
|
)
|
(0.2
|
)
|
||||
Amortization of actuarial losses
|
2.8
|
|
3.5
|
|
—
|
|
—
|
|
||||
NET PERIODIC BENEFIT COST
|
$
|
5.0
|
|
$
|
6.5
|
|
$
|
0.1
|
|
$
|
0.1
|
|
|
|
2017
|
2016
|
||||
BALANCE AT JANUARY 1,
|
$
|
13.2
|
|
$
|
13.2
|
|
Provision
|
2.7
|
|
3.5
|
|
||
Expenditures/other
|
(1.5
|
)
|
(2.5
|
)
|
||
BALANCE AT MARCH 31,
|
$
|
14.4
|
|
$
|
14.2
|
|
|
Asset (Liability)
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Quoted Prices in
Active Markets for
Similar Assets
(Level 2)
|
Unobservable inputs for which little or no market data exists (Level 3)
|
Total
|
|
|||||||
March 31, 2017
|
|
|
|
|
||||||||
Money market funds
(a)
|
$
|
226.6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
226.6
|
|
Available for sale investments
|
—
|
|
53.1
|
|
3.9
|
|
57.0
|
|
||||
Trading securities
|
12.0
|
|
—
|
|
—
|
|
12.0
|
|
||||
Deferred compensation plan liabilities
|
(12.0
|
)
|
—
|
|
—
|
|
(12.0
|
)
|
||||
Derivatives:
|
|
|
|
|
||||||||
Forward exchange contracts-Assets
(b)
|
—
|
|
0.4
|
|
—
|
|
0.4
|
|
||||
Forward exchange contracts-(Liabilities)
(c)
|
—
|
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
||||
TOTAL
|
$
|
226.6
|
|
$
|
53.4
|
|
$
|
3.9
|
|
$
|
283.9
|
|
|
|
|
|
|
||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Quoted Prices in
Active Markets for
Similar Assets
(Level 2)
|
Unobservable inputs for which little or no market data exists (Level 3)
|
Total
|
|
|||||||
December 31, 2016
|
|
|
|
|
||||||||
Money market funds
(a)
|
$
|
263.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
263.5
|
|
Available for sale investments
|
—
|
|
53.6
|
|
3.8
|
|
57.4
|
|
||||
Trading securities
|
10.2
|
|
—
|
|
—
|
|
10.2
|
|
||||
Deferred compensation plan liabilities
|
(10.2
|
)
|
—
|
|
—
|
|
(10.2
|
)
|
||||
Derivatives:
|
|
|
|
|
||||||||
Forward exchange contracts-Assets
(b)
|
—
|
|
0.8
|
|
—
|
|
0.8
|
|
||||
Forward exchange contracts-(Liabilities)
(c)
|
—
|
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
||||
TOTAL
|
$
|
263.5
|
|
$
|
54.3
|
|
$
|
3.8
|
|
$
|
321.6
|
|
|
Derivative Gain/(Loss) Recognized in
Accumulated Other Comprehensive
Income (net of tax)
|
Location of Gain/(Loss)
Reclassified into Income
|
Gain/(Loss) Reclassified into
Earnings Effective Portion (net of tax)
|
||||||||||
Derivative Instrument
|
2017
|
|
2016
|
|
(Effective Portion)
|
2017
|
|
2016
|
|
||||
Forward exchange contract
|
$
|
(0.2
|
)
|
$
|
(1.5
|
)
|
Net sales
|
$
|
—
|
|
$
|
—
|
|
|
|
|
Cost of goods sold
|
$
|
(0.1
|
)
|
$
|
0.8
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
|
Cost of goods sold
|
Selling & administrative expense
|
Total
|
|||||||||||||||
Electrical Segment
|
$
|
3.7
|
|
$
|
1.8
|
|
$
|
1.0
|
|
$
|
3.7
|
|
$
|
4.7
|
|
$
|
5.5
|
|
Power Segment
|
0.5
|
|
—
|
|
0.3
|
|
0.3
|
|
0.8
|
|
0.3
|
|
||||||
Total Pre-Tax Restructuring Costs
|
$
|
4.2
|
|
$
|
1.8
|
|
$
|
1.3
|
|
$
|
4.0
|
|
$
|
5.5
|
|
$
|
5.8
|
|
|
|
Beginning Accrued Restructuring Balance 1/1/17
|
|
Pre-tax Restructuring Costs
|
|
Utilization and Foreign Exchange
|
|
Ending Accrued Restructuring Balance 3/31/2017
|
|
||||
2017 Restructuring Actions
|
|
|
|
|
||||||||
Severance
|
$
|
—
|
|
$
|
2.4
|
|
$
|
(0.7
|
)
|
$
|
1.7
|
|
Asset write-downs
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Facility closure and other costs
|
—
|
|
0.3
|
|
0.2
|
|
0.5
|
|
||||
Total 2017 Restructuring Actions
|
$
|
—
|
|
$
|
2.7
|
|
$
|
(0.5
|
)
|
$
|
2.2
|
|
2016 and Prior Restructuring Actions
|
|
|
|
|
||||||||
Severance
|
$
|
10.4
|
|
$
|
0.1
|
|
$
|
(3.2
|
)
|
$
|
7.3
|
|
Asset write-downs
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Facility closure and other costs
(a)
|
$
|
14.1
|
|
$
|
2.7
|
|
$
|
(2.6
|
)
|
$
|
14.2
|
|
Total 2016 and Prior Restructuring Actions
|
$
|
24.5
|
|
$
|
2.8
|
|
$
|
(5.8
|
)
|
$
|
21.5
|
|
Total Restructuring Actions
|
$
|
24.5
|
|
$
|
5.5
|
|
$
|
(6.3
|
)
|
$
|
23.7
|
|
|
Total expected costs
|
|
Costs incurred during 2016
|
|
Costs incurred during first three months of 2017
|
|
Remaining costs at 3/31/2017
|
|
||||
2017 Restructuring Actions
|
|
|
|
|
||||||||
Electrical Segment
|
$
|
2.8
|
|
$
|
—
|
|
$
|
1.9
|
|
$
|
0.9
|
|
Power Segment
|
2.9
|
|
—
|
|
0.8
|
|
2.1
|
|
||||
Total 2017 Restructuring Actions
|
$
|
5.7
|
|
$
|
—
|
|
$
|
2.7
|
|
$
|
3.0
|
|
2016 and Prior Restructuring Actions
|
|
|
|
|
||||||||
Electrical Segment
(a)
|
44.4
|
|
33.9
|
|
2.8
|
|
7.7
|
|
||||
Power Segment
|
1.5
|
|
1.1
|
|
—
|
|
0.4
|
|
||||
Total 2016 and Prior Restructuring Actions
|
$
|
45.9
|
|
$
|
35.0
|
|
$
|
2.8
|
|
$
|
8.1
|
|
Total Restructuring Actions
|
$
|
51.6
|
|
$
|
35.0
|
|
$
|
5.5
|
|
$
|
11.1
|
|
ITEM 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2017
|
|
% of Net sales
|
|
2016
|
|
% of Net sales
|
|
||
Net sales
|
$
|
852.3
|
|
|
|
$
|
834.8
|
|
|
|
Cost of goods sold
|
590.5
|
|
69.3
|
%
|
574.9
|
|
68.9
|
%
|
||
Gross profit
|
261.8
|
|
30.7
|
%
|
259.9
|
|
31.1
|
%
|
||
Selling & administrative ("S&A") expense
|
157.7
|
|
18.5
|
%
|
158.0
|
|
18.9
|
%
|
||
Operating income
|
104.1
|
|
12.2
|
%
|
101.9
|
|
12.2
|
%
|
||
Net income attributable to Hubbell
|
62.8
|
|
7.4
|
%
|
60.9
|
|
7.3
|
%
|
||
EARNINGS PER SHARE – DILUTED
|
$
|
1.13
|
|
|
|
$
|
1.08
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
||||||||||||
|
Cost of goods sold
|
|
S&A expense
|
|
Total
|
|||||||||||||||
Restructuring costs (See Note 15 - Restructuring Costs)
|
$
|
4.2
|
|
$
|
1.8
|
|
|
$
|
1.3
|
|
$
|
4.0
|
|
|
$
|
5.5
|
|
$
|
5.8
|
|
Restructuring related costs
|
0.7
|
|
0.4
|
|
|
2.1
|
|
0.5
|
|
|
2.8
|
|
0.9
|
|
||||||
Restructuring and related costs (non-GAAP measure)
|
$
|
4.9
|
|
$
|
2.2
|
|
|
$
|
3.4
|
|
$
|
4.5
|
|
|
$
|
8.3
|
|
$
|
6.7
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2017
|
|
% of Net sales
|
2016
|
|
% of Net sales
|
||||
Gross profit (GAAP measure)
|
$
|
261.8
|
|
30.7
|
%
|
$
|
259.9
|
|
31.1
|
%
|
Restructuring and related costs
|
4.9
|
|
|
2.2
|
|
|
||||
Adjusted gross profit
|
$
|
266.7
|
|
31.3
|
%
|
$
|
262.1
|
|
31.4
|
%
|
|
|
|
|
|
||||||
S&A expenses (GAAP measure)
|
$
|
157.7
|
|
18.5
|
%
|
$
|
158.0
|
|
18.9
|
%
|
Restructuring and related costs
|
3.4
|
|
|
4.5
|
|
|
||||
Adjusted S&A expenses
|
$
|
154.3
|
|
18.1
|
%
|
$
|
153.5
|
|
18.4
|
%
|
|
|
|
|
|
||||||
Operating income (GAAP measure)
|
$
|
104.1
|
|
12.2
|
%
|
$
|
101.9
|
|
12.2
|
%
|
Restructuring and related costs
|
8.3
|
|
|
6.7
|
|
|
||||
Adjusted operating income
|
$
|
112.4
|
|
13.2
|
%
|
$
|
108.6
|
|
13.0
|
%
|
|
|
|
|
|
||||||
Net income attributable to Hubbell (GAAP measure)
|
$
|
62.8
|
|
|
$
|
60.9
|
|
|
||
Restructuring and related costs, net of tax
|
5.6
|
|
|
4.5
|
|
|
||||
Adjusted net income attributable to Hubbell
|
$
|
68.4
|
|
|
$
|
65.4
|
|
|
||
Less: Earnings allocated to participating securities
|
(0.2
|
)
|
|
(0.2
|
)
|
|
||||
Adj. net income available to common shareholders
|
$
|
68.2
|
|
|
$
|
65.2
|
|
|
||
Average number of diluted shares outstanding
|
55.6
|
|
|
56.5
|
|
|
||||
ADJUSTED EARNINGS PER SHARE – DILUTED
|
$
|
1.23
|
|
|
|
$
|
1.16
|
|
|
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2017
|
|
2016
|
|
||
Net sales
|
$
|
587.5
|
|
$
|
582.7
|
|
Operating income
|
$
|
50.0
|
|
$
|
55.4
|
|
Restructuring and related costs
|
6.9
|
|
6.3
|
|
||
Adjusted operating income
|
$
|
56.9
|
|
$
|
61.7
|
|
Operating margin
|
8.5
|
%
|
9.5
|
%
|
||
Adjusted operating margin
|
9.7
|
%
|
10.6
|
%
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2017
|
|
2016
|
|
||
Net sales
|
$
|
264.8
|
|
$
|
252.1
|
|
Operating income
|
$
|
54.1
|
|
$
|
46.5
|
|
Restructuring and related costs
|
1.4
|
|
0.4
|
|
||
Adjusted operating income
|
$
|
55.5
|
|
$
|
46.9
|
|
Operating margin
|
20.4
|
%
|
18.4
|
%
|
||
Adjusted operating margin
|
21.0
|
%
|
18.6
|
%
|
|
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2017
|
|
2016
|
|
||
Net cash provided by (used in):
|
|
|
|
|
||
Operating activities
|
$
|
63.0
|
|
$
|
62.3
|
|
Investing activities
|
(32.9
|
)
|
(188.0
|
)
|
||
Financing activities
|
(94.1
|
)
|
104.5
|
|
||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
7.4
|
|
(1.5
|
)
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
$
|
(56.6
|
)
|
$
|
(22.7
|
)
|
|
Costs incurred in the three months ended March 31, 2017
|
|
Additional expected costs
|
|
Expected completion date
|
||
2017 Restructuring Actions
|
$
|
2.7
|
|
$
|
3.0
|
|
2018
|
2016 Restructuring Actions
(a)
|
2.8
|
|
8.1
|
|
2017
|
||
Total
|
$
|
5.5
|
|
$
|
11.1
|
|
|
◦
|
There were no commercial paper borrowings outstanding at
March 31, 2017
and
December 31, 2016
. In April 2017 we issued commercial paper to fund the acquisition of AEC and iDevices, and as of April 21, 2017 there was $96.0 million of commercial paper outstanding.
|
◦
|
Short-term debt at
March 31, 2017
and
December 31, 2016
also includes $5.1 million and $3.2 million, respectively of borrowings to support our international operations in China and Brazil.
|
(In millions)
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Total Debt
|
$
|
996.0
|
|
$
|
993.7
|
|
Total Hubbell Shareholders’ Equity
|
1,578.7
|
|
1,592.8
|
|
||
TOTAL CAPITAL
|
$
|
2,574.7
|
|
$
|
2,586.5
|
|
Total Debt to Total Capital
|
39
|
%
|
38
|
%
|
||
Cash and Investments
|
450.0
|
|
505.2
|
|
||
Net Debt
|
$
|
546.0
|
|
$
|
488.5
|
|
Net Debt to Total Capital
|
21
|
%
|
19
|
%
|
◦
|
In the first
three
months of 2017 cash used for the acquisition of businesses, net of cash acquired was $
19.2 million
, including the settlement of purchase price installments from prior year acquisitions, and we invested an additional approximately $90 million in acquisitions in April, 2017. Further discussion of our acquisitions can be found in Note 2 — Business Acquisitions.
|
◦
|
In the
three
months ended
March 31, 2017
, cash settlements for share repurchases were
$52.6 million
. Shareholder dividends paid in the
three
months ended
March 31, 2017
were $
38.8 million
.
|
◦
|
Cash flows from operations and existing cash resources: We continue to target free cash flow (defined as cash flows from operations less capital expenditures) equal to net income in
2017
. We also have $
381
million of cash and cash equivalents at
March 31, 2017
, of which approximately eight percent was held inside of the United States and the remainder held internationally.
|
◦
|
We have the ability to issue commercial paper for general corporate purposes and our $750 million revolving credit facility, which expires in December 2020, serves as a backup to our commercial paper program. We maintain investment grade credit ratings from the major U.S. rating agencies.
|
◦
|
In addition to our commercial paper program and existing revolving credit facility we also have the ability to obtain additional financing through the issuance of long-term debt. Considering our current credit rating, historical earnings performance, and financial position we believe that we would be able to obtain additional long-term debt financing on attractive terms.
|
|
|
•
|
Changes in demand for our products, market conditions, product quality, or product availability adversely affecting sales levels.
|
•
|
Changes in markets or competition adversely affecting realization of price increases.
|
•
|
Failure to achieve projected levels of efficiencies, cost savings and cost reduction measures, including those expected as a result of our lean initiative and strategic sourcing plans.
|
•
|
The expected benefits and the timing of other actions in connection with our Enterprise Resource Planning ("ERP") system.
|
•
|
Availability and costs of raw materials, purchased components, energy and freight.
|
•
|
Changes in expected or future levels of operating cash flow, indebtedness and capital spending.
|
•
|
General economic and business conditions in particular industries, markets or geographic regions, as well as inflationary trends.
|
•
|
Regulatory issues, changes in tax laws or changes in geographic profit mix affecting tax rates and availability of tax incentives.
|
•
|
A major disruption in one or more of our manufacturing or distribution facilities or headquarters, including the impact of plant consolidations and relocations.
|
•
|
Changes in our relationships with, or the financial condition or performance of, key distributors and other customers, agents or business partners which could adversely affect our results of operations.
|
•
|
Impact of productivity improvements on lead times, quality and delivery of product.
|
•
|
Anticipated future contributions and assumptions including changes in interest rates and plan assets with respect to pensions.
|
•
|
Adjustments to product warranty accruals in response to claims incurred, historical experiences and known costs.
|
•
|
Unexpected costs or charges, certain of which might be outside of our control.
|
•
|
Changes in strategy, economic conditions or other conditions outside of our control affecting anticipated future global product sourcing levels.
|
•
|
Ability to carry out future acquisitions and strategic investments in our core businesses as well as the acquisition related costs.
|
•
|
The ability to effectively implement ERP systems without disrupting operational and financial processes.
|
•
|
Unanticipated difficulties integrating acquisitions as well as the realization of expected synergies and benefits anticipated when we first enter into a transaction.
|
•
|
The ability of governments to meet their financial obligations.
|
•
|
Political unrest in foreign countries.
|
•
|
Natural disasters.
|
•
|
Failure of information technology systems or security breaches resulting in unauthorized disclosure of confidential information.
|
•
|
Future repurchases of common stock under our common stock repurchase program.
|
•
|
Changes in accounting principles, interpretations, or estimates.
|
•
|
The outcome of environmental, legal and tax contingencies or costs compared to amounts provided for such contingencies.
|
•
|
Adverse changes in foreign currency exchange rates and the potential use of hedging instruments to hedge the exposure to fluctuating rates of foreign currency exchange on inventory purchases.
|
•
|
Other factors described in our Securities and Exchange Commission filings, including the “Business”, “Risk Factors” and “Quantitative and Qualitative Disclosures about Market Risk” sections in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2016
.
|
ITEM 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4
|
Controls and Procedures
|
PART II
|
OTHER INFORMATION
|
ITEM 1A
|
Risk Factors
|
ITEM 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Total Number of
Shares
of Common Stock Purchased
|
|
Average Price
Paid
per share of Common Stock
|
|
Approximate Value
of Shares that
May Yet Be
Purchased Under
the Programs
|
|
||
Period
|
(000’s)
|
|
Share
|
|
(in millions)
|
|
||
BALANCE AS OF DECEMBER 31, 2016
|
|
|
|
|
$
|
153.6
|
|
|
January 2017
|
—
|
|
$
|
—
|
|
$
|
153.6
|
|
February 2017
|
91
|
|
$
|
122.52
|
|
$
|
142.5
|
|
March 2017
|
343
|
|
$
|
120.79
|
|
$
|
101.0
|
|
TOTAL FOR THE QUARTER ENDED MARCH 31, 2017
|
434
|
|
$
|
121.15
|
|
|
ITEM 6
|
Exhibits
|
|
|
Incorporated by Reference
|
|
|
||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing
Date
|
Filed/
Furnished
Herewith
|
31.1
|
Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
*
|
31.2
|
Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
*
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
**
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
**
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
*
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
*
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
*
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
*
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
*
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
*
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
HUBBELL INCORPORATED
|
|
|
|
|
|
|
|
|
|
By
|
/s/ William R. Sperry
|
By
|
/s/ Joseph A. Capozzoli
|
|
|
William R. Sperry
|
|
Joseph A. Capozzoli
|
|
|
Senior Vice President and Chief Financial Officer
|
|
Vice President, Controller (Principal Accounting Officer)
|
|
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