[HUBBELL LOGO]
Date: April 22, 2003 NEWS RELEASE
For Release: IMMEDIATELY
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Hubbell Incorporated
584 Derby-Milford Road
P. O. Box 549
Orange, CT 06477
203-799-4100
Contact: Thomas R. Conlin
HUBBELL REPORTS FIRST QUARTER RESULTS
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ORANGE, CT. (April 22, 2003) -- Hubbell Incorporated (NYSE: HUBA, HUBB) today
reported its results of operations for the first quarter ended March 31, 2003.
Sales for the quarter were $419.4 million or a 39% increase over sales of $301.7
million reported for the corresponding period of 2002. Net income was $21.7
million and diluted earnings per share were $ .36 as compared to a loss of $5.9
million or $ .10, respectively. The first quarter of 2002 included a charge of
$25.4 million or $.43 per diluted share for goodwill impairment under FAS 142
which was recorded as the cumulative effect of a change in accounting principle.
Profitability for the periods were impacted by:
* In the first quarter 2003, expenses of $1.1 million, pre-tax,
under the Company's previously announced restructuring of
Hubbell Lighting, Inc.
* In the first quarter 2002, a benefit of $0.7 million, pre-tax,
from the net of a gain on the sale of a business and special
charge expenses.
Also included in current results were contributions from recent
acquisitions: Hawke Limited completed in March, 2002, LCA Group, Inc., the
domestic lighting division of U.S. Industries, Inc., completed in April, 2002,
and the assets of the pole line hardware business of Cooper Power Systems, Inc.,
completed in November, 2002.
OPERATIONS REVIEW
"Activity in the U.S. economy was significantly slower in each successive month
of the first quarter," said Timothy H. Powers, President and Chief Executive
Officer "with concerns leading up to the conflict with Iraq causing our
customers to delay decisions to proceed on many commercial projects. Despite
overall markets turning down, a positive comparison year-over-year was gained in
earnings per share."
"We believe that these economic difficulties are temporary. Productivity
improvements within the Company are continuous. Restructuring of Hubbell
Lighting is on schedule and on budget. Our lean manufacturing initiatives are
achieving their goals with eighteen major locations now participating. Our
acquisition program has broadened our market diversification. And, we are
continuing our successful focus on working capital efficiency with further
reductions in inventories and receivables targeted in 2003."
SEGMENT REVIEW
Slowing demand in many industrial and utility markets negatively impacted
overall results for each of the Company's three business segments. Contributions
from acquisitions, strength in specialty markets, and internal profitability
improvements benefited results.
Sales for the Electrical Segment rose by 62% and operating profit by 43%. The
expansion of Hubbell Lighting, Inc., by acquisition was the primary contributor
to the higher results with Progress Lighting, the nation's leading supplier of
decorative residential and light commercial decorative lighting, reporting
strong results. Other operating units within the segment also reported positive
year-over-year sales comparisons including Hubbell's wiring device business and
the Raco/Bell operations. These joined the Killark and Chalmit units in forging
higher operating profit margins through continuing internal improvements.
Hubbell's Power Systems Segment reported a 2% decrease in sales with operating
profit 10% lower due to $0.7 million of start-up costs incurred to integrate the
newly acquired pole line hardware assets. The segment continues to contend with
depressed demand throughout the utility industry. Utilities are continuing to
react to uncertainties in the U.S. and the global economy as plant utilization
rates remain stagnant at best, and major projects have been delayed or
postponed. Liquidity constraints affecting many of the segment's utility
customers are forcing reduced capital expenditures. Even utilities in a strong
operating position are reducing current investment in favor of cash conservation
for potential acquisition of generating or transmission assets which may be sold
by distressed companies.
The Industrial Technology Segment reported a modest sales increase and higher
operating profits. The GAI-Tronics unit made the primary contribution with
strong sales and profit gains. This business continues to benefit from its
leading share in the global market for specialty communications equipment and
the emphasis on security and safety which GAI-Tronics product technology
provides. With more than half of the segment's revenues generated by customers
in the depressed industrial and high voltage instrumentation sectors, the
segment's improving profitability reflects continuing success in sizing
operations for market realities.
SUMMARY AND OUTLOOK
"The current slow pace of business overall in the first quarter is likely to
continue for the near-term," Powers said. "Even with an emerging resolution of
the situation in Iraq, conditions in utility, telecommunications, and many
commercial construction markets remain unsettled. Looking ahead, no catalyst for
an upturn in our markets in 2003 is apparent which makes forecasting even more
difficult than usual. Nonetheless, our continuing success in achieving internal
improvements through Hubbell's multiple initiatives is a powerful advantage. The
economic environment will, in time, improve. Right now we continue to focus on
the Hubbell hallmarks of responsive actions, cost containment, and building
future potential."
Certain statements contained herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. 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: achieving sales levels to
fulfill revenue expectations; unexpected costs or charges, certain of which may
be outside the control of the Company; 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 markets. With 2002 revenues of $1.6 billion, Hubbell
Incorporated operates manufacturing facilities in North America, Puerto Rico,
Mexico, Italy, Switzerland, and the United Kingdom, participates in a joint
venture in Taiwan, and maintains sales offices in Singapore, Hong Kong, South
Korea, People's Republic of China, and the Middle East. The corporate
headquarters is located in Orange, CT.
# # # # #
(Financial Schedules are Attached.)
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF EARNINGS
(in millions, except per share data) unaudited
THREE MONTHS ENDED
MARCH 31
2003 % 2002 %
--------------- -------- -------------- -------
Net Sales $ 419.4 100.0 $ 301.7 100.0
Cost of goods sold 309.7 73.8 225.3 74.7
--------------- -------- -------------- -------
Gross Profit 109.7 26.2 76.4 25.3
Selling & administrative expenses 74.8 17.8 50.8 16.8
Special charge 1.1 0.7
Gain on sale of business -- (1.4)
--------------- --------------
Total Operating Income 33.8 8.1 26.3 8.7
Investment income 1.0 1.3
Interest expense (5.2) (2.2)
Other income (expense), net (0.3) (0.1)
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Total Other Income (Expense) (4.5) (1.1) (1.0) (0.3)
Income Before Income Taxes
and Accounting Change 29.3 7.0 25.3 8.4
Provision for income taxes 7.6 5.8
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Income Before Effect of
Accounting Change 21.7 5.2 19.5 6.5
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Effect of Accounting Change
Net of Tax (SFAS 142) -- (25.4)
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NET INCOME (LOSS) $ 21.7 5.2 $ (5.9) (2.0)
=============== ==============
Earnings (loss) per share after $0.37 ($0.10)
accounting change - basic
Earnings (loss) per share after $0.36 ($0.10)
accounting change - diluted
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF EARNINGS
(in millions, except per share data) unaudited
THREE MONTHS ENDED
MARCH 31
2003 2002
---------- ----------
Net Sales
Electrical $ 312.1 $ 193.1
Power 79.0 80.4
Industrial Technology 28.3 28.2
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Total Net Sales $ 419.4 $ 301.7
========== ==========
Operating Income (Loss)
Electrical $ 26.8 $ 17.2
Special charge, net (1.1) (0.6)
Gain on sale of business -- 1.4
---------- ----------
Total Electrical 25.7 18.0
Power 6.4 7.2
Special charge, net -- (0.1)
---------- ----------
Total Power 6.4 7.1
Industrial Technology 1.7 1.2
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Total Operating Income (Loss) 33.8 26.3
---------- ----------
Other income (expense), net (4.5) (1.0)
---------- ----------
Income Before Income Taxes
and Accounting Change 29.3 25.3
Provision for income taxes 7.6 5.8
---------- ----------
Income Before Effect of
Accounting Change 21.7 19.5
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Effect of Accounting Change
Net of Tax (SFAS 142) -- (25.4)
---------- ----------
NET INCOME (LOSS) $ 21.7 $ (5.9)
========== ==========
Earnings (loss) per share after accounting $ 0.37 ($ 0.10)
change - basic
Earnings (loss) per share after accounting $ 0.36 ($ 0.10)
change - diluted
HUBBELL INCORPORATED
CONSOLIDATED BALANCE SHEET
(in millions)
(UNAUDITED)
MAR 2003 DEC 2002
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ASSETS
Cash and temporary cash investments $ 54.9 $ 40.0
Short-term investments 15.0 15.0
Accounts receivable (net) 233.3 221.2
Inventories 254.5 258.0
Deferred taxes and other 57.1 62.1
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CURRENT ASSETS 614.8 596.3
Property, plant and equipment (net) 312.0 320.6
Investments 75.3 76.5
Goodwill 317.5 314.6
Intangible assets and other 99.7 102.3
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TOTAL ASSETS $ 1,419.3 $ 1,410.3
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LIABILITIES AND SHAREHOLDERS' EQUITY
Commercial paper and notes $ -- $ --
Accounts payable 88.0 86.2
Accrued salaries, wages and employee benefits 40.3 39.8
Accrued income taxes 32.9 25.5
Dividends payable 19.5 19.5
Other accrued liabilities 79.3 83.7
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CURRENT LIABILITIES 260.0 254.7
Long-term debt 298.7 298.7
Other non-current liabilities 111.8 112.7
----------- -----------
TOTAL LIABILITIES 670.5 666.1
SHAREHOLDERS' EQUITY 748.8 744.2
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TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 1,419.3 $ 1,410.3
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