Exhibit 99.1
[HUBBELL LOGO] Date: April 24, 2008 NEWS RELEASE
For Release: IMMEDIATELY
- --------------------------------------------------------------------------------
HUBBELL INCORPORATED
584 Derby-Milford Road
P. O. Box 549
Orange, CT 06477
203-799-4100
Contact: David G. Nord
HUBBELL REPORTS FIRST QUARTER RESULTS
NET SALES $627.9 MILLION AND EARNINGS OF $.85 PER DILUTED SHARE
ORANGE, CT. (April 24, 2008) -- Hubbell Incorporated (NYSE: HUBA, HUBB) today
reported operating results for the first quarter ended March 31, 2008.
Net sales in the first quarter of 2008 were $627.9 million compared to $625.7
million reported in the first quarter of 2007. Net income in the first quarter
2008 was 16% higher at $48.4 million versus $41.7 million reported in 2007.
Earnings per diluted share were $.85 or 23% above the $.69 reported in the first
quarter last year.
Cash flow from operations was $32.4 million compared to $33.6 million in the
first quarter of 2007 as higher earnings were more than offset by higher working
capital requirements. Capital expenditures in the quarter were $11.9 million
compared to $20.7 million last year. Also during the first quarter of 2008, the
Company invested $103.2 million on acquisitions and repurchased 1.9 million
shares of its common stock for $92.2 million.
-continued-
Page 1
OPERATIONS REVIEW
Timothy H. Powers, Chairman, President, and Chief Executive Officer said "We are
pleased with our first quarter results, particularly the continuing improvement
in operating profit margin. Overall sales were relatively flat due to weakness
in certain of our markets, particularly residential, that were offset by the
benefit of recent acquisitions and selling price increases. Despite relatively
flat sales, our strong first quarter profit performance reflects continued
execution in three areas of focus: price realization, cost management, and
productivity. Acquisitions completed in the fourth quarter of 2007 and first
quarter of 2008 added three percentage points to net sales and were modestly
accretive to earnings. Selling price increases were implemented to counter the
rising cost of materials and resulted in incremental sales of approximately 1-2%
compared to the first quarter of 2007. Despite a sharp increase in commodity
costs during the first quarter; including steel, aluminum, copper and fuel
costs, we were able to effectively manage the commodity cost price equation."
Mr. Powers noted "During the first quarter of 2008, the Company realigned its
internal organization, combining the electrical products and industrial
technology businesses into one operating segment. The combined operations are
now referred to as the electrical products business and are part of the
Electrical reporting segment. The Company's reportable segments now consist of
the Electrical and Power reporting segments."
Mr. Powers added "The economic environment is consistent with our expectations.
The U.S. economy is being negatively impacted by the credit and housing markets.
For Hubbell's Electrical segment, strength continued in our international
markets while U.S. non-residential construction and industrial maintenance and
repair have experienced early signs of slowing. Our
-continued-
Page 2
commercial and industrial ("C&I") lighting fixture business was weaker with the
exception of fluorescent products. The residential market continued to decline
as anticipated.
"Markets served by Hubbell's Power segment continue to be mixed; with growth in
transmission products and international sales offset by slower demand for
distribution voltage products sales that are being hampered by the residential
market decline."
SEGMENT REVIEW
The comments and year-over-year percentages in this segment review are based on
first quarter results in 2008 and 2007. The prior year figures have been
restated to reflect the Company's realigned reporting segments.
Electrical segment net sales improved 2% year-over-year despite weaker
residential markets due to the impact of an acquisition, selling price increases
and favorable foreign currency translation. Sales of wiring products were flat
compared to last year as favorable foreign currency translation was offset by
lower unit volume. Sales of electrical products increased due to selling price
increases, favorable foreign currency translation and strong demand for harsh
and hazardous and high voltage instrumentation products. Lighting product sales
decreased slightly due to lower residential volume largely offset by the
acquisition of Kurt Versen, higher fluorescent product volume and selling price
increases. Electrical segment operating profit increased 29% compared to the
first quarter of 2007. Operating margins declined at wiring products primarily
due to lower unit volume. Operating profit and margins rose at electrical
products due to higher sales and a favorable product mix of higher margin harsh
and hazardous products and strong
-continued-
Page 3
performance from our high voltage businesses. Lighting product margins expanded
due to selling price increases, the acquisition impact of Kurt Versen and
productivity improvements partially offset by lower margins for the residential
business due to lower volume.
Hubbell's Power segment reported 4% lower net sales compared to the first
quarter of 2007 as the impact of the PCORE acquisition, which added
approximately 5% to sales, was more than offset by lower year-over-year storm
activity and modest demand for distribution products. However, orders
strengthened as the quarter progressed and backlog has increased from year end.
Operating profit and margins were higher despite lower sales due to productivity
improvements including lower freight expenses, favorable product mix, selling
price increases and the impact of the acquisition.
SUMMARY & OUTLOOK
Mr. Powers commented "Our plan for the full year 2008 is based on a slowing U.S.
economy. Hubbell's largest served market, non-residential construction, is
forecasted to remain modestly positive for the remainder of 2008 but credit
concerns and inflationary cost pressure could have a negative impact. The
utility market is expected to expand, with much of the growth in transmission
spending while distribution spending is likely to be more modest. Hubbell sells
primarily into the distribution market. The residential market is expected to
decline at a rate comparable to 2007 and more rapidly than many had projected
even three months ago."
Mr. Powers concluded "The first quarter profitability was in line with our
expectations despite weaker market conditions. We've projected net sales growth
in 2008 to be 4-6% primarily
-continued-
Page 4
through selling price increases and the impact of acquisitions. The sales
increase combined with our continued focus on price realization, cost
management, and productivity is expected to result in a 100 basis point
improvement in operating margin, resulting in earnings per diluted share in the
range of $3.70-$3.90."
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. In
addition, all statements regarding anticipated growth or improvement in
operating results, anticipated market conditions, and economic recovery are
forward-looking. These statements may be identified by the use of
forward-looking words or phrases such as "improved", "leading", "improving",
"continuing growth", "continued", "ranging", "contributing", "primarily",
"plan", "expect", "anticipated," "expected", "expectations," "should result",
"uncertain", "goals", "projected", "on track", "likely", 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 expected benefit
and effect of the 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
-continued-
Page 5
conditions; competition; and other factors described in our Securities and
Exchange Commission filings, including the "Business" and "Risk Factors"
Sections in the Annual Report on Form 10-K for the year ended December 31, 2007.
Hubbell Incorporated is an international manufacturer of quality electrical and
electronic products for a broad range of non-residential and residential
construction, industrial and utility applications. With 2007 revenues of $2.5
billion, Hubbell Incorporated operates manufacturing facilities in the U.S.,
Canada, Puerto Rico, Mexico, Italy, Switzerland, Brazil, Australia and the
United Kingdom, participates in joint ventures in Taiwan and the People's
Republic of China, and maintains sales offices in Singapore, Hong Kong, South
Korea, the People's Republic of China, Mexico, and the Middle East. The
corporate headquarters is located in Orange, CT.
# # # # #
(Financial Schedules are Attached.)
Page 6
HUBBELL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 31
(UNAUDITED) (UNAUDITED)
2008 2007
------------ ----------
NET SALES $ 627.9 $ 625.7
COST OF GOODS SOLD 440.5 452.7
SELLING & ADMINISTRATIVE EXPENSES 112.1 109.1
------------ ----------
OPERATING INCOME 75.3 63.9
OPERATING INCOME AS A % OF NET SALES 12.0% 10.2%
INTEREST EXPENSE, NET (4.6) (4.1)
OTHER EXPENSE, NET (1.1) (0.5)
------------ ----------
INCOME BEFORE INCOME TAXES 69.6 59.3
PROVISION FOR INCOME TAXES 21.2 17.6
------------ ----------
NET INCOME $ 48.4 $ 41.7
------------ ----------
EARNINGS PER SHARE:
BASIC $ 0.86 $ 0.70
DILUTED $ 0.85 $ 0.69
AVERAGE SHARES OUTSTANDING:
BASIC 56.4 59.7
DILUTED 57.0 60.4
HUBBELL INCORPORATED
SEGMENT INFORMATION
(IN MILLIONS)
THREE MONTHS ENDED MARCH 31
(UNAUDITED) (UNAUDITED)
2008 2007
----------- -----------
NET SALES
ELECTRICAL $ 470.3 $ 461.8
POWER 157.6 163.9
----------- -----------
TOTAL NET SALES $ 627.9 $ 625.7
=========== ===========
OPERATING INCOME
ELECTRICAL $ 50.0 $ 38.7
POWER 25.3 25.2
----------- -----------
TOTAL OPERATING INCOME $ 75.3 $ 63.9
=========== ===========
OPERATING INCOME AS A % OF NET SALES
ELECTRICAL 10.6% 8.4%
POWER 16.1% 15.4%
TOTAL 12.0% 10.2%
HUBBELL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEET
(IN MILLIONS)
(UNAUDITED)
MARCH 31, 2008 DECEMBER 31, 2007
----------------- ------------------
ASSETS
CASH AND CASH EQUIVALENTS $ 100.3 $ 77.5
ACCOUNTS RECEIVABLE, NET 371.0 332.4
INVENTORIES, NET 332.9 322.9
DEFERRED TAXES AND OTHER 62.8 55.2
----------------- ------------------
TOTAL CURRENT ASSETS 867.0 788.0
PROPERTY, PLANT AND EQUIPMENT, NET 331.1 327.1
INVESTMENTS 34.5 39.2
GOODWILL 532.8 466.6
INTANGIBLE ASSETS AND OTHER 269.0 242.5
----------------- ------------------
TOTAL ASSETS $ 2,034.4 $ 1,863.4
================= ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
SHORT-TERM DEBT $ 243.5 $ 36.7
ACCOUNTS PAYABLE 166.4 154.0
ACCRUED SALARIES, WAGES AND
EMPLOYEE BENEFITS 39.2 58.6
DIVIDENDS PAYABLE 18.5 19.2
ACCRUED INSURANCE 55.9 46.7
OTHER ACCRUED LIABILITIES 111.2 104.3
----------------- ------------------
TOTAL CURRENT LIABILITIES 634.7 419.5
LONG-TERM DEBT 199.5 199.4
OTHER NON-CURRENT LIABILITIES 170.4 161.9
----------------- ------------------
TOTAL LIABILITIES 1,004.6 780.8
SHAREHOLDERS' EQUITY 1,029.8 1,082.6
----------------- ------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 2,034.4 $ 1,863.4
================= ==================
HUBBELL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN MILLIONS)
THREE MONTHS ENDED MARCH 31
(UNAUDITED) (UNAUDITED)
2008 2007
-------------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME $ 48.4 $ 41.7
DEPRECIATION AND AMORTIZATION 15.1 14.9
STOCK-BASED COMPENSATION EXPENSE 2.6 2.6
DEFERRED INCOME TAXES 1.0 (0.8)
CHANGES IN WORKING CAPITAL (22.9) (5.1)
CONTRIBUTIONS TO DEFINED BENEFIT
PENSION PLANS (1.2) (15.8)
OTHER, NET (10.6) (3.9)
-------------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 32.4 33.6
-------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
CAPITAL EXPENDITURES (11.9) (20.7)
ACQUISITION OF BUSINESSES, NET
OF CASH ACQUIRED (103.2) (2.8)
NET CHANGE IN INVESTMENTS 5.0 (0.3)
OTHER, NET 1.2 1.0
-------------- -----------
NET CASH USED IN
INVESTING ACTIVITIES (108.9) (22.8)
-------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
BORROWINGS/REPAYMENTS OF DEBT 206.8 55.2
PAYMENT OF DIVIDENDS (19.1) (19.9)
ACQUISITION OF COMMON SHARES (92.2) (31.5)
PROCEEDS FROM EXERCISE OF
STOCK OPTIONS 0.5 3.2
OTHER, NET 0.2 1.2
-------------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 96.2 8.2
-------------- -----------
EFFECT OF FOREIGN EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS 3.1 0.2
-------------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 22.8 19.2
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 77.5 45.3
-------------- -----------
END OF PERIOD $ 100.3 $ 64.5
============== ===========