Exhibit 99.1
[Hubbble Logo]
Date: April 19, 2005 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 19, 2005) -- Hubbell Incorporated (NYSE: HUBA, HUBB) today
reported its results of operations for the first quarter ended March 31, 2005.
Sales in the quarter were $487.6 million or a 5% increase over sales of $465.2
million reported for the corresponding period of 2004. Net income was $28.8
million and fully diluted earnings per share were $.46 as compared to $34.0
million and $.56 respectively, in the prior year.
Operating profit results in the initial quarter of 2005 included $1.9 million,
pre-tax, of restructuring expenses related to lighting operations and $4.6
million, pre-tax, of transactional expenses consisting of legal, accounting, and
consulting fees in support of the Company's strategic growth initiatives.
Operating profit results in the comparative quarter of 2004 included $1.4
million, pre-tax, in restructuring expenses.
OPERATIONS REVIEW
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"The quarter's results were disappointing," said Timothy H. Powers, Chairman,
President and Chief Executive Officer, "but it's important to delineate the
factors-positive and negative-at work in the period."
"Reducing our earnings was a lower level of sales than we expected in the
Electrical Segment, specifically in our Lighting business. While sales are
marginally higher than last year, product pricing versus higher materials costs
remained difficult in very competitive lighting markets. Weakness in
non-residential
-continued-
construction markets during the quarter intensified price competition and, with
lower volume through our plants, lower overhead absorption resulted in reduced
operating margins. Many of the same factors impacted our Raco operation."
"Influences on the operating results of both Power Systems and Industrial
Technology were more positive. In utility markets served by Power Systems,
capital investment continues to improve and we were able to achieve higher
pricing as the quarter progressed. The industrial markets supplied by Industrial
Technology continue to improve with the OEM business growing nicely as capital
spending in the U.S. continues to rise."
SEGMENT REVIEW
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Sales for the Electrical Segment increased by 2% as reported year-over-year, but
on a unit volume basis sales were about the same as last year. Lighting fixtures
and rough-in electrical products showed the least favorable comparisons, while
harsh and hazardous product sales grew by double digits.
Operating margin for the Segment declined to 9.4% as lower unit volume resulted
in unabsorbed overhead concurrent with the continuing price/cost gap and higher
freight and utility costs. Process inefficiencies related to start-up of the new
business system also affected Wiring Systems' profitability, but good progress
was made during the quarter to bring order backlog to an appropriate level.
Sales for the Power Systems Segment rose by 12% with approximately 2% of
improvement resulting from the acquisition of a commercial anchor business in
January, 2005. The carry-over effect of price increases also benefited the
year-over-year sales comparison. Operating margin did decline modestly on the
same comparative basis because of unrecovered materials cost increases, but that
gap was narrowed and is being eliminated. While higher energy and freight costs
also impacted this Segment, increasing success in product sourcing from low cost
areas helped to offset those costs.
The Industrial Technology Segment reported an 11% increase in sales and a 44%
increase in operating profit. Well over half of the Segment's sales are made to
customers who benefit from higher raw materials cost and, thus, are investing in
greater capacity. The general improvement in the industrial economy evidenced by
capacity utilization rates that continue to rise also benefited the Segment.
Hubbell's specialty communications business, GAI-Tronics, also reported good
comparisons as its customers in energy, security, and safety markets increased
spending.
-continued-
Cash flow from operations in the quarter was adversely affected by the lower
earnings, higher incentive payments year-over-year, and higher inventories
primarily due to a small acquisition and a planned inventory build as production
is transitioned from plant-to-plant under the restructuring.
SUMMARY AND OUTLOOK
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"The first quarter is past," Powers concluded, "and we know what the problems
were; a lower level of sales than expected, difficult price competition at our
largest business, continued price/cost gap. These are signs of dynamic markets.
It's our job to meet those challenges and build success. Our performance in the
first quarter is unacceptable. That is changing."
"We revised our guidance for full year 2005 earnings per share to $2.55-2.80 in
a press release of April 13, and a conference call on April 14; both are
available on the website at www.hubbell.com. We remain optimistic that Hubbell
can report another year of positive growth for the full year 2005. The early
year slump in demand in non-residential construction should be replaced by
increasing activity. Our industrial markets are improving and utility spending
is higher. Materials costs, while still well above one year ago, appear to be
moderating. In all, we have some distance to go to return to our planned growth
curve, but we're confident in our ability to get there."
Certain statements contained herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These include statements about capital resources, performance and results of
operations and are based on the Company's reasonable current expectations.
-continued-
These statements may be identified by the use of forward-looking words or
phrases such as "may", "confident", "potential", "plan", "could", "expect",
"expected", "uncertain", "goal", "should", "optimistic", "probably", 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 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; and other factors described in our
Securities and Exchange Commission filings including the "Business" Section in
the Annual Report on Form 10-K for the year ended December 31, 2004.
Hubbell Incorporated is an international manufacturer of quality electrical and
electronic products for commercial, industrial, residential, utility, and
telecommunications markets. With 2004 revenues of $2.0 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)
THREE MONTHS
ENDED
MARCH 31
-------------------------------
(UNAUDITED) (UNAUDITED)
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2005 2004
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NET SALES .................................... $487.6 $465.2
COST OF GOODS SOLD ........................... 350.9 332.5(2)
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GROSS PROFIT ................................. 136.7 132.7
SELLING & ADMINISTRATIVE EXPENSES ............ 92.4(1) 80.4
SPECIAL CHARGES .............................. 1.9 1.2
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TOTAL OPERATING INCOME ....................... 42.4 51.1
INVESTMENT INCOME ............................ 2.3 1.2
INTEREST EXPENSE ............................. (5.1) (5.1)
OTHER INCOME (EXPENSE), NET .................. 0.1 -
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TOTAL OTHER EXPENSE, NET ..................... (2.7) (3.9)
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INCOME BEFORE INCOME TAXES ................... 39.7 47.2
PROVISION FOR INCOME TAXES ................... 10.9 13.2
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NET INCOME ................................... $28.8 $34.0
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EARNINGS PER SHARE - DILUTED ................. $0.46 $0.56
====== ======
AVERAGE SHARES OUTSTANDING - DILUTED ......... 62.7 61.2
(1) 2005 SELLING & ADMINISTRATIVE EXPENSES INCLUDE $4.6 OF TRANSACTIONAL
COSTS IN SUPPORT OF THE COMPANY'S STRATEGIC GROWTH INITIATIVES.
(2) 2004 COST OF GOODS SOLD INCLUDES SPECIAL CHARGES OF $0.2 FOR LIGHTING
BUSINESS RESTRUCTURING.
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF EARNINGS BY SEGMENT
(in millions, except per share data)
THREE MONTHS
ENDED
MARCH 31
--------------------------------
(UNAUDITED) (UNAUDITED)
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2005 2004
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Net Sales
Electrical ............................ $ 353.4 $ 345.3
Power ................................. 98.7 87.8
Industrial Technology ................. 35.5 32.1
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Total Net Sales .................. $ 487.6 $ 465.2
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Operating Income
Electrical ............................ $ 33.3 $ 38.6
Special charges ....................... (1.9) (1.4)
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Total Electrical ................... 31.4 37.2
Power ................................. 10.7 10.5
Industrial Technology ............ 4.9 3.4
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Subtotal ...... 47.0 51.1
Unusual item .......................... (4.6)(1) --
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Total Operating Income ........... 42.4 51.1
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Other expense, net ......................... (2.7) (3.9)
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Income Before Income Taxes ................. 39.7 47.2
Provision for income taxes ................. 10.9 13.2
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NET INCOME ................................. $ 28.8 $ 34.0
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Earnings Per Share - Diluted ............... $ 0.46 $ 0.56
======== =======
Average Shares Outstanding - Diluted ....... 62.7 61.2
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(1) 2005 Unusual item of $4.6 represents transactional costs in support of
the Company's strategic growth initiatives, included in Selling &
administrative expenses.
HUBBELL INCORPORATED
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(UNAUDITED)
MARCH 2005 DECEMBER 2004
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ASSETS
CASH AND CASH EQUIVALENTS ....................................................... $ 118.2 $ 125.9
SHORT-TERM INVESTMENTS .......................................................... 198.2 215.6
ACCOUNTS RECEIVABLE (NET) ....................................................... 299.7 288.5
INVENTORIES (NET) ............................................................... 232.3 216.1
DEFERRED TAXES AND OTHER ........................................................ 44.7 46.3
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CURRENT ASSETS .................................................................. 893.1 892.4
PROPERTY, PLANT AND EQUIPMENT (NET) ............................................. 261.5 261.8
INVESTMENTS ..................................................................... 64.0 65.7
GOODWILL ........................................................................ 325.1 326.6
INTANGIBLE ASSETS AND OTHER ..................................................... 99.5 95.9
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TOTAL ASSETS ..................................................................... $1,643.2 $1,642.4
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT PORTION OF LONG-TERM DEBT ............................................... $ 100.0 $ 99.9
ACCOUNTS PAYABLE ................................................................ 124.4 132.1
ACCRUED SALARIES, WAGES AND EMPLOYEE BENEFITS ................................... 34.9 46.8
ACCRUED INCOME TAXES ............................................................ 30.7 24.4
DIVIDENDS PAYABLE ............................................................... 20.3 20.2
OTHER ACCRUED LIABILITIES ....................................................... 78.6 85.9
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CURRENT LIABILITIES ............................................................. 388.9 409.3
LONG-TERM DEBT .................................................................. 199.1 199.1
OTHER NON-CURRENT LIABILITIES ................................................... 90.1 89.7
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TOTAL LIABILITIES ............................................................... 678.1 698.1
SHAREHOLDERS' EQUITY ............................................................ 965.1 944.3
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TOTAL LIABILITIES & SHAREHOLDERS' EQUITY ........................................ $1,643.2 $1,642.4
======== ========
HUBBELL INCORPORATED
CONDENSED CONSOLIDATED CASH FLOWS FROM OPERATING ACTIVITIES
AND SUPPLEMENTARY CASH FLOW INFORMATION
(IN MILLIONS)
(unaudited)
THREE MONTHS
ENDED
MARCH 31
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2005 2004
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Operating Activities
Net Income ..................................... $ 28.8 $ 34.0
Depreciation and amortization .................. 12.0 13.1
Changes in working capital ..................... (45.1) (23.3)
Other, net ..................................... 2.9 1.4
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Net cash provided by (used in)
operating activities ........................ (1.4) 25.2
Supplementary Cash Flow Information
Capital expenditures ........................... $ (13.0) $ (6.8)