HUBB - Earnings call transcript Q1 2018

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Operator

Good morning, my name is Teresa, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2018 Results Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instruction] Thank you, Ms. begin may you Lee, your conference. Maria

Maria Lee

posted President note that Good statements Litigation Please I'm defined and slide joined into consider and Teresa. Executive announced Dave comments Senior its been in morning, Sperry. this results expected materials Officer; our results President please include morning. www.hubbell.com. everyone us. by website Private incorporated joining Officer; company The Reform it as our Vice morning Investor our section may and XXXX XXXX. statements for Therefore, our forward-looking first thanks Nord, Chief today Hubbell note earnings the of related future press Securities call. to Chief at of Financial Bill by this reference the and and statements Thanks and for by this the the release quarter to Chairman, our release Act press forward-looking and discussion of our are of have

In included may the and materials. are measures measures comparable release GAAP financial reconciled are non-GAAP addition, measures. also the the earnings to press and slide comments in Those include

me to over Now the Dave. turn let call

David Nord

everybody Okay. for this Maria. us Thanks Thanks morning. joining

us Aclara, I economy. the good the of acquisition in the we broadly tax busy a think more good news we're release always press morning, benefiting cost in our As been continued but course, in market. the the certainly news, from back challenges tailwind course biggest certainly And fighting has the the that of the March, price know, of then strong efforts of the our overall talked you history. as see we've you level in earlier activity quarter And we think, seen and I see integration in that our topline has productive well. some offsets it's the we've quarter, certainly We've this Investor the got and as a in got largest but one results. through and Day benefiting the But some

those discussions also all good news, that from contribute to We've, you of we try all to all changing work a not some adds can. even I going rules all we're every think Aclara do those, a to of that challenge and think things the we're to of to things had our appreciate so, different I telling and through lot certainly complexity one the the story particularly to address and on making the difficult that want input. but sure side, is, activity best I've try heard on -- topics. that to certainly quarter obviously it's But it of we the make follow. more we

we're So some consistency. to maintain trying

through we with that. so go us So, as bear

in can some market out organic. up heavy the were continues We that Board. industrial, in is increase time softness markets hoping from varying the of still of across in begin recently particular especially to back was more. in and our certainly of sales think to that across market general you some the notably, oil contribute But, long We've most been had there's higher across I've which we also expect. that prices, certainly that of some with awaited benefit margin see is businesses that, strength lighting You I encouraging decline consistency with been broader the it's while more customers we're specifically spending the market to positive that in segments oil all expanded. year. recall five side our the finally in in C&I due what is see End and growth saw still in turnaround last X% market and we categories, XX%, hope pockets major gas, the on and in that market would half degrees,

of I and they trade so, discussions, that'll of of continue to we uncertainty value. and think the but the reform all they're add benefit some element caution seeing around have tax the an from think also benefiting

income price $XXX a steel XX%, on to and reported quarter. we margin impact certainly least On but we're deal seen basis certainly the acquisition-related with margin basis, at side million, at that, early satisfied as the directionally never operating The the is which impact want of than least was significant last a XX.X%, on XX the satisfied. considering but year, had be, cost not it rise was material in in cost, we've what the especially Aclara’s excluding lower cost, where part year a of points happy, we’re in

we're our and second show of positive And I we of businesses, certain you to tell and that businesses of been now trying that, benefit the know, you certain turn a can and price, a to, start think in there's deal, up increases significant have found that think and impact as will progress but that catch three in we're the expect where And month with in cost some in ahead of targeting in of were six to the the more think we other half, quarter to typically increases actions, in we will pricing with price offsetting business but pricing, margin the key certainly our behind was taken I cost can for that that there's we've price others it second in markets. As certainly lag. but half us I was have that material we are Bill few sometime markets, we a certainly material those parts the detail, cover X.X and getting while might year.

We And Specifically we've got industry three up. catch no months then bigger come are some in everywhere scrambling with coming content some out we're two high in one find in were markets where some then we later, cases and follow. ahead. material seemed to increases to out early or the

more day. And a certainly I I tell it, but in that and operating to that market we're can I every and leaders So for to expecting position, price fighting increase. of always good think you all but the are each is any think certainly challenge going our do on balance we're

years actions to cost that of been a short as So And cost a will lot over that try of to the impact. that this price to of reduction we've that over some taking ongoing tailwinds were have do work put we've from lot three mitigate controls well of last in the we're fortunate to term the contract to some the continue through. impact, mitigate the got and as we able because that with we

improving includes of and Bill price per say segment that also a that costs. obviously $X.XX. has acquisitions is other execution also related for talk deal So of later. and than acquisition those on margin, specifically Aclara. reported because from that includes $X.XX priority includes Aclara share bottom a around particularly I This cost It and Aclara-related other will the was line, on amortization basis productivity Earnings intangible $X.XX within about results some power -- impacts asset us.

course Strong after on we're amortization those rate. address lot that on growth what activity, performing on some deal a But know to you customer The So, we all lower also only and the forget Aclara, Hubbell week. the feedback. I you is two sometimes to from there total is. is put tax well and you had was a well. the together come out significant And to up business at integration With the adjusted months IEEE Aclara's out just our I acquisition an as basis in of the sales chance see of focusing activity. Denver two the in and it's us. specifically first were going because a last share expected. integrate, with as per earnings it's been certainly can the positive Back track benefited of months. quarter a continued work for booth. it’s Hopefully

strategy I in could portfolio, all next was that You one and hearing the a right lot importantly, Aclara for offerings the partners what see consistently customers voltage Hubbell and very of the when in significant presence a and keenly I offerings, can acquisition. Hubbell the strategy, how exactly play is in you specifically which of and that from the comes IEEE product And are at within confirms you could fact product was could how positive hopefully been BURNDY and in reaction how offerings space. to effect interested But the participants about were, their they utility Aclara Hubbell the to firsthand, to channel integrated the high that more booth, see of space. part think the the see good product add is our

the the course, a team. effort one specific that's want electrical results example delivery construction way is and know, and Hubbell, quarter energy systems in a very but the sold a acquisitions. for positive. know, nice product across it's really businesses our think business. A one of coordinated was together, we And So, you utility of segment, by that's power more customer. with, we an really could solution submersible the design guys the of and We're running requirements. within like in can for that of by seeing had working pump businesses together sure to construction the The Rod right that and provide to of a important made in examples business business in do we make outside One order also our order in Gervin, connector, power energy working the best that this really you to

results - approved our probably last in the demonstrates dampened week. if our some it certainly lot collections, because and working the But also recognize, quarterly our at tax quarter I per certainly down performance We're to still, our focus repatriate $XXX It's That's generation on of to $X.XX I'll need debt and disappointed. quarter saw pay to our of a you important the of lowest you to shareholder to about and hope look say effective free our return can the share it some flow [indiscernible]. has deployment began payments and onetime and capital improve. this as You cash The room continued the was items. timing year payments board in of capital. our though, expected. see million you a of and drive cash by additionally commitment cash able typically dividend around results,

we result that year. the be the greater on. expect area are than focused income free other the that's And for net will So flow cash keenly we

Bill some more that talk outlook. of the and turn it with through me I'll about back come overview, and go specifics quarter the over So let to of to our

William Sperry

very Dave. much you everybody. Good be Thanks with to

is four, was the market One, new that that’s coming inflation end Aclara, that reform; benefit Dave the are market saying, the what three, commodity with going really in performance two, four be our to of woven is tax highlight trends and to into the Just the here. acquisition. quarter, strength; strength;

So Dave results all see of everywhere in those are results. trends our on going you page the to four gave And really three.

slide going that quarter page And of year, I'm from And see, beginning four XX% referenced So increase not our forget on all we $XXX of of start million, XX% the can the be prior material at Maria that, that's you a that of first quick will Aclara. the to over call. acquisitions sales coming to

for IoT as points power us a So systems, X from And to of another within made which Aclara an everybody, bushing we our as notably is smaller about of new in just space, iDevice, XXXX. in earlier distribution executed well as the is forward space, as telecom that development. product acquisitions extending XX in underlies remind points lot investment natural our line previously product acquisitions work real gas a in of had R&D There's that. some terms well leap coming hardware

also there's that’s And after a a So previous lot lot of Aclara. QX. to rolling actually of acquisition off

of markets. So end a have a Hubbell. the the dominant it, really for It's to page you beyond, the really just backdrop but, I'm you'll so systems such positive green the power beyond see good deals. market consistent a being and consistent page see like acquisitions, quite balance by on year with four our but

distribution And non-res. side, green supportive, data start suggest the transmission there. still non-res and favorable the CapEx continue supportive arrows IoU’s so analysis there to On status the see electrical in ABI activity and

On grid ISM see dominated projects. by manufacturing the the are mid-size transmission again, again, Gap] the projects positive. small small of you and ability for on side, spending; us the side, Industrial lot production data projects [Audio did data really distribution

continues now for given a the real heavy. us, most for the little to converts that peers late news seeing is XX shrinking gas its from be ours us contribution highlighted to really But, us versus good David at. you're The other very heavy but and of margin a looking switch story good for through oil news quarter As that's nonetheless, in positive. there maybe of growing, for

drive land product distribution continuing activity side, oil the strong household that single us very demand And continuing farming, growth to side. on drive the there. commodity still family On side, for revenue obviously the gas to on for based very, and price side, natural the with infrastructure formation growth

So the there for quarter. quite had so Hubbell the adjustment for in well a Dave show consistent, the as Aclara organic operating referenced five, transaction market you On their related acquisition backdrop page we income that costs and see here as accounting. first

than decline So million as to cost we've that drag well at margin as that to point headwinds got acquisitions, relates Dave to additionally they of X.XX overcome, bringing essentially the coming are lower highlighted. of margin as XXX XX.X And on average. XX the basis material the

basis nearly overcoming per diluted of can last and decline. again, as related which a $X.XX as see is six, Page you nickel again, accounting. $X.XX share Aclara the the exclusivity really from it being XX we as costs tailwind, operations. between and The to of we're overcoming show legacy well a and the adjusted a you're the balance all Aclara for improvement So those to $X.XX essentially our productivity the the one-time split earnings showing a point $X.XX with as from $X.XX of year acquisition well transaction coming as well tax both as

$X.XX see you So, that that there. tailwind

the is expense you to amortization the more down hand – split was between amortization right see on the $X.XX well, those from that $X.XX the down a to bit transaction, really the little the to reported, bar expense. transaction towards $X.XX As

XX a So just lot were there's XX.X% that about those and - to there year you last but a on the that year. of tailwind between clarity hopefully this there, movement taxes, down see adjustments, continent around the that month we

tax big reform part little the a that from better and of discrete So as a coming items from bit well.

level whole to seven, segment XXX rate below whole and side, the both electrical but the So side, X% industrial we attractive organic have about the in Non-res helping also margins those us we that forecast a see for that the can growth, that growth drive on you XX month side, really and gas talk year. million, of Page and the markets. the up to providing res providing side the markets growth. and mix helping starting oil pick product X%

healthy op On the operating to increase X.X%. X% income side, you see from a

basis the I commodity of in headwinds points think that XX expansion margin X more absorbing than investment R&D [indiscernible] points cost between as as capability. well IoT,

really and you a to, to here. Power second margins bit. of power lift Page a segment we going to through eight, and its of just this. to lighting steady-eddy And quite so and see some income movement talk be it's the bit go worse through last just quite we be you impact a of about segment a year see those and inefficiencies helping the have really operating get structure stabilizing helping out cost can quarter this tends

some it's So worth discussion.

driven growth from at sales a to about acquisitions. XX% XXX XXX you'll see X%, market increase organic million, The there. base growing by million our level decent So of grew

look again so, adjustment. at operating side you see, the And all the income important Aclara where to

XXs year, during So, basically profit cost quarter last the operating from a absorbed business operating that margin so base in here. of of the and the base business see the couple price you points headwinds first XX.X%

you taken from about And In half margins addition, a to XX%. and drag. another couple and of of last year points at of costs Aclara another the here the couple down creates there that points have is coming the accounting segment, then on

driving as expenses and quarter. were go balance terms price you some had the [indiscernible] the for uh, those quarter the referred going costs, Dave fees that Page So transaction, that priority in the top cash as price laid payments action that, of we to of in that the and as for XX, onetime show forward to that in forward it's and that we expensed were the terms well the we creates really flow year. reform of on see in to things can tax Aclara fourth some items

And so we excluding amount a those cash. just in small generated items

As better that. Dave to than looking do said, we're

depreciation strong increase there as a there. use of in receivable had strong Aclara side see But increase very, side, You liability quality the more sales as can deals. who March. amortization that do a a receivables, you see of the on The are capital an to we that at increase very working you base big side, in is high. current believe And we see the the also contributor

referred our side think growth Dave it's be that we we finance helping the topline. those to area should and as where payables payable On improve to our the opportunity grow an an inventory to

the doing for there we pace, $XX little more bit and had side, Investor lighter million much with are going conforming XX spending, actually of to million to be up you capitalizing they about that's accounting as less. we're what we the a accounted all that X the on much to could the Aclara’s be CapEx been been than time On at based more had see R&D But and Aclara have the that range. increase communicated spending We we've CapEx around of about spent where a business talking our doing million an expensing you way that, inside Day. R&D

Day. communicated And that so less be than to number you will CapEx we Investor at had

focus So this area great of for us. is an

capital for become like seasonality source anticipate onetime we to usually still that as despite cash quarter that stronger First outflows, see the throughout improving of that we working And and performing the and us. a our seasonal we'd low, year. go tighter

at help and taxes what's on feedback favorable going from in page this March everyone and back XX, EBITDA, helpful measure on with amortization. that Investor show interest first to neutralize and some it's Day to wanted We also got use we

contributions And the quarter going I here generation simple for the in Maria and improvement. I on amount XX. so of certainly see can schedule, of And, about the had the ask think with growth this here, and million, the first of Day XXX $XX structure or seasonal to EBITDA XXX the million to cap EBITDA from in Investor internally, XXX as XX% everybody was comment in it consistent for page year. quarter you million use a providing goal to million keep in in we'll we on to showed we

Maria Lee

about Thanks approximately was held of quarter QX as XXX million Aclara million in with a the new February. million with couple and We term items Sure. prepayable for decrease of repatriated we of of We this had CP notes all commercial the outside mid your ended down the States. our $XXX loan well cash A year used cash, teens. debt. can end acquisition to acquisition. XX% a of the first borrowings from long-term of senior rates as We as which for increased international a have long-term added paper, $XXX see, was to the related low are And result of cash There ended million of XXX of to because Bill. financing in five year in a Aclara United fourth as attractive outstanding. it tranche a the The you end pay from

our paying XXX year and So to and XX% the page the and commercial credit by capital higher priorities. end, facility leverage bottom At with it's of backs us. XX% our paper these available of loan CP, fully debt is to additions, down along our one CP at that allocation our from term our to million increased is the the reducing cap

over turn me back Let it Bill to

William Sperry

going to comments All I'm just right. some closing okay, give It’s here.

up one year on at with shaping of our much outlook. look so if you first completed, quarter the this is market, think, And expected. pretty I as far

we some have the to And our than activity going Although the cost the of to at we admittedly think and look working headwinds actions think of to this are year. are cost that. we forecasted of levels, end to of the perform at we that of anticipated, anticipated mitigate some help our we're the price, get benefits from the as of combination positive material still but end most are greater but I reduction markets beginning other the markets markets,

to maybe it's range, bit X% on as not that, the percent a of in than all indicators non-res, just X% lighter some that a robust, around the, we and mentioned results as suggest the the Going little positive think expecting the oil gas, I of earlier, bit little more a in that And growing. increasing. upside oil we're still price particularly the with but

So, consistent to continuous news across markets. our growth is end all of the good be

the page for on historical acquisitions, The of growth our so, translations, market to with combined at translates development end about new is the to embedded some standards. us drive in The growth product and XX, end going X% and numbers Turning are that XX% specifically outlook, on XX%, that, by top in market which market technology, in big X% modest then range. and it's out-performance. to XX% acquisitions to focus line

costs, flow transaction and free it our of that mentioned guidance maintaining share we're an amortization working as With X.XX of we earlier, intangible I than legacy basis $X.XX. on - greater earnings of that our income. and to bill X.XX. to All the and diluted deliver acquisition about expect adjusted that mentioned excludes cash to reported X.XX to asset of original adjusted Aclara related per leading includes X.XX but on as And

of which there we're completing of prospects but think, to pay is U.S. sure, make the to think we outlook of excited our moving some objectives months The need but sure the largest repatriate take we're in history, So we reform, to get to the priced or easier market in very priced, that make and this tax capitalizing to generating has support and spending down We've pay competitive on and after also Aclara the are are us, we will expect year that obviously priced of ability more integrating lot obviously the advantage for a the clear more to in the invest about to we're the commodity And on full space long-term of it's benefiting that. continue got offer for the Getting doing of reinvest a and and business. we're some we environment, can harder - with effectively. cash, differentiated getting even basis, when cash, growth, to which debt, appropriately what continuing customers. we in future, two growth. down It's I from lower but then taxes, so to our actions transaction products. I about debt, even

lot sight We XXXX I And of there's the be So in which investor are high you I expect that think market base March with for certainly that, things digit going performance, we a areas. right twice and in certainly single laid years. to on. with out for things year's think, next earnings it am business. contribution focused our in to reality quite have team basis ongoing line add to few confident the those And the of we're Aclara’s in over sales and at we I back key day, starts growth this doing - We growth then very vision. a the this vision to I the a strong vision make

let it to with that, So up questions. open me

Operator

Oppenheimer. Instruction] from Christopher comes Glen question your [Operator first with And

Christopher Glen

morning. Thanks. Good

William Sperry

Good Chris. morning,

Christopher Glen

morning that margins the looks Good of Call the certainly in about pretty the Dave. industry. lighting context being, good

to able you to that if wondering balance be through the expect of year? the Just continue

Dave Nord

percent three point price, sales about perspective. that a really with management. contributing it's a cost down driven lighting of From volume by Chris, from about to side, was the

effective year. coming cost structure, throughout backs which yes more really it's of the is the off So, continues

hitting controlling guidance last So and not dependent about those we than we dependent volume, on plans did our year. it's is feel costs, our on big much which better

William Sperry

price ability price, as Because I'm being that the other have just even some product just you an the offset Chris, naturally and those those as to I headwinds where mentioned earlier, after, some more So – entire some going on margin business get of too. goes and and to a portfolio, to more those our across I where of more focus have a of we in are offerings differentiated businesses what advantage. areas you're there's of those higher businesses are the obviously cost think really lighting element - discipline that and not

that's focus another area of So business we that the within see. lighting

Christopher Glen

at a before XX% restructuring And it and you gas intensive good. wide the if margin. had to a was also That in lens before did program. we XXXX Sounds then pretty crash. electrical But very margin XX, XX% look was angle to oil

there barriers I'm to wondering kind levels So just types if returning for of to any those are ultimately electrical? of

Dave Nord

Yeah.

I that oil and role gas the, is um, that to in the played contributing think important. that business

And not the rather more seeing hazardous. less level back we're pure come at we obviously back, as We're for that harsh rigs so they're than land-based and more deepwater. oil seeing diverse i.e.

describing. peak time, volumes So to to other and productivity would as I - things back do as hazardous think come same the And than our and Chris, you're margins go get be a that that era I find back forward the see that could in at we harsh levels. their could be goal to those little lower bit

for get us good to back So benchmarks are those motivating him. to

Christopher Glen

Thanks. Good color.

Operator

from Tusa comes with the question next of Your JP Morgan. line Steve

Steve Tusa

morning Hey guys, good

Dave Nord

morning, Good Steve.

Steve Tusa

T&B I was the, at show.

are little go confidence? I show to on And are the you like, of are Is know, that, a I guys, don't transformer know, you the there sound say on out the you're through? are not Because on guys there? that very just put level. up know, of don't there, pricing specific business that I was that guys perhaps slower there you you are some you missing? typically guys that picked there really the sense I other more Are come, the sorry you. on would've the confident and bit Then different maybe something Just know, your price color are you're conservative pockets you but pockets? better missed got and ground more talking stuff Sorry, seeing, that of somebody you front. to kind seeing a Did little

I So what difference is. saying. I'm be just curious I'm as to you're the what just, trust may do

William Sperry

relative slow we guess, Well a as could I with term. start

ours. than You might that's have expectations of different timing

confidence the pressure O&M acceptability, the based cases taking one, even certainly Utility on, capital is has, the put a my side, that on on not is we're side. side on pressure utilities the in signs signs the has standpoint, necessarily the we're on more So cost but actions know, some that you to side. seeing of what from are particularly under utility

So, align heard what you with. the what I not at at don't is show dealing think necessarily we're that with

some pricing, more to and going it’s to you I a of when it's business got know, about in give was guys remember because mean, I more of from the to We're utilities it. The side, saying, a government challenge I turn hold little number a last the our in some that cases. time commodity we've C&I a I you talk commodities over while that little coming know, on environment, think able You use side. we think weaker you be getting certainly bullish remind price and that for it's that. he in and utility the hard year been, years the

of spend, believe a components our a more versus but that we first market example, price sensitivity element also a project cost. that it's is for are lower bit of some think lot where of it's I and a so much critical um, an there's tougher a bigger versus, so products So, battle, advantage transformer, tougher, a a

back So can. more it gives wrong, me little bit a as the much utilities are But they as get don't still us pushing flexibility.

Steve Tusa

side are they're electrical In was seeing invent about, talking and on the makes know, enclosure of degree That are the price what Okay. channel out there I obviously. you sense. increases some the

are of of a they're So, you through. that electrical on are, is different. a kind are bit mean, digit of mid type all magnitude kind of side talking they at the thing I guys single the equation? looking that obviously little putting that the But

William Sperry

that's say that I'd average, On true.

X sounds Somewhere I in the X to we XX. on content, would on that though mean say the have X digit. lot in it on it's average, of pockets working what But to single got bad, they've material is a but If is. I it higher average, are mid which

Steve Tusa

into and year are then and XXXX is you that should guys later that not $XX the couple day, this million kind time And in one lumpy? fades decade up mean, I then that think but so one, out in fades next this the of like, $XX a kind I believe was this to probably and last a, kind of is I you year and of here CapEx? years the is Okay. the of something the kind million Aclara CapEx overtime, one could, well. it but in kind period, that ask necessarily of as builds said you of investor And bucks running of more next time

Dave Nord

starts it effort, Steve R&D think the Yeah, right. with I

there. we kind last that's R&D so, going of sales shown on amount of XX% And sales your sort the in range the spending R&D of had of and year's based on

what million significantly not happens higher how bit of business. you does capitalize? to done. think that expensing is more grow, than So how historically your question what a I Hubbell is that And little of typical but much $XX that's then I expense versus a grow. obviously than a We we're they there's - have up end you happens going sales think nonetheless, But much

that comes imagining I of think down, we're out next over how And few your is playing - so years. the percentage R&D

Steve Tusa

Okay.

side CapEx the On as well?

William Sperry

Yeah.

CapEx which anything need stuff which replacement growing you of Yeah. a capitalize, how R&D on then at beyond not growth. growing. So that much and of function And much would is the PPE how becomes is will be not then be side,

Steve Tusa

guys. much Appreciate so Thanks Great. it.

Operator

you. Thank

Your next question line Kwas of Rich Securities. from with comes Wells the Fargo

Rich Kwas

we of guys. the - we terms And of as the seasonality, any in should go contribution? on about rest anything morning Good Alcara thinking through be year

William Sperry

some I Yeah, experiences, stronger volume areas the we as as of second them. well expect think margins being quarter we, for especially think, what Rich. that then Hubbell to and do both Similar namely seasonality seasonality, third, I

had when little were more. that be of would I teens been that together, Steve As we a little this planning said talking some R&D we about expense and their margins I think was reviewing a after a mid-

add in double So come they quarter. digits only the first we think will but digits. to were their kind of down margins And, lower operating double

and do in and a quarter. we So pickup seeing third anticipate the volumes their margins second

Rich Kwas

term should longer the for that teens or from business? about how accounting around teens this Does expensing? the that? we to prospects The mid think be origin high change Can change

William Sperry

changes think our it view. term long I materially don't

Rich Kwas

correctly, was - recall rate? You quarter? lighting the around did XX, fourth exited I the margin duplicate if what the that Bill, Okay. what quarter you again this

William Sperry

more more base line, in much is performing It much just predictably. was, the cost

kinds so we of And where those are are. margins

Dave even As of you a spending, that with too commercial share chase to to finding we're said, maintain think I to try might have much price.

you're get So which margins better, is and bit going forgo that what asking let that perform about. the little a volume, I think we're cost to choosing and of structure

So kind tactic of decided that's, a of a ours. been that's

Rich Kwas

or the then the XXX then the on QX, to price is headwind just Okay out that cost, on improves be QX, the I mean the then just just setting power we that that that for assumption is level XXX go just, cost on commodity and QX that? company clear bps as overall price and net and is

William Sperry

that So lighting offset was for essentially point, we gave pull the the the that whole price company, by that away. ex-lighting what

flat question think better? the get especially because in net anticipating And some does better we're the cost Steve's year overall. becomes half, we part goes it as pricing about that in that that on, of price the So would in as essentially balanced as year. I more cost say is gets it was the of, exited I material second the sense yes, underlying too the It back half

start maybe you think You up. catch to

disciplined with So it. really be be but that's this to you up can't - you catch the about vigilant inflation, can't you overnight, and much got

it whole And battle. so, will to take I fight I the think it year that us think is,

Rich Kwas

thanks. Okay,

Operator

comes question the of from line next Sprague with Research. your And Jeff Vertical

Jeff Sprague

or or Bill, in you, none pricing currently Thank are you. Dave in there back price you And are some positive the particular, on getting Good business? morning is power just everyone.

William Sperry

Jeff. priced getting Yes. been have We

Jeff Sprague

actually been to point have you okay. a Aclara, amortization clear you put on the just expect just in on what You can be be year? fine And the to ongoing

William Sperry

Yeah.

if of well $X.XX the split the that, the results. reported about $X.XX can actual and use then the total the Jeff. that, amortization transaction of and $X.XX is, the within we're um, use combination fee is the, contributing add the Aclara page backs that outlook, And reported, anticipating for see So of last if page you which to versus XX, of you of $X.XX the you, Maria the -

Maria Lee

Yes sure.

can be $X.XX which intangibles you reevaluation, XX amortization of to would somewhere something the turns inventory expect - includes step $X.XX. up backlog it the around convert out this and between to XX we the think in million All into XX that year to the be million, I

Jeff Sprague

And non on flow. cash

income legacy your we cash mean, should other a noise? to there. working free think adjusted closer gap relative non-cash comment than and some you your have to income, than yeah, flow was net the I I it be expect be what in more intangibles flow to greater could that $X.XX net arguably cash obviously free of as But EPS. still even capital

William Sperry

Yeah, yeah.

we're legacy that why gave way the Dave that's and tangible. think you and it, I really $X.XX Jeff, at looking that of

if to net saw even that $X.XX think as guiding on there's, there. And add it think $X.XX, of you there's quite us, I we of the though flow you important measure percent, but because important free which get next cash income, those an is So relationship were cash about an EPS we to you as, intangibles, adjusted think and the basis, an when legacy we to $X.XX. up

subsequent mid capital we of first run abnormal on there $X.XX. basis our XXs that on of on think basis, and talking of this be XXX% then cash would expectation cash some be quarter on should get to our Jeff, net that using the would translate year, you outflows, flow working free efficient EPS strong get this the on more which conversion in run-rate management rate basis, focus about flow And free because higher year, So we have the a higher years. into be did cash a but income would

management about how cash that to talking as think important I the, equation. that framework free you're at and look conversion at we the is flow So

Jeff Sprague

there timing doing something working some forward? capital what's know on quarter, drive working are is to uncork And capital but but the it going specific in going I here, you noise to

William Sperry

about Yeah, think the thing. of the in I kind I quarter right you're think, the and receivables are noise

receivables those become quality high often sensitive as point high, most the out. is so that do of very collectability Our is very you timing

days, excited I to disciplined be keeping inventory, and more her disciplined figuring focused of think get down, service at taken inventory optimize and we're around and we've really a So like new we there up. you're all becoming to that think I of day, payables use the a payables on in and and still working while our so days about have advantage term when see discount be hired a were I opportunity the when side, with some out our developing and you you ours you good that's think disciplined you more, VP Huppertz then more to, Jeff. our think while Susan is investor a inventory to sign built, more know, to ways when payables where I more getting inventories And quarter and a how OPs , need

Jeff Sprague

oppose Dave any pipeline, backlog discussion, Aclara to last point in change me, little one as change for private And bit, you'd just out? that own you mentioned now in behavior customer a but anything one firm? a equity Any

William Sperry

seen pipeline got growing. think we've that customers The from been our evidence the favorable. I is we've Yeah, has feedback

and tangible the to watching, other and the to house our what Jeff. It's received force been early to interesting of legacy maybe that good But rural I early the see of of the It's signs some clients sales front more and of communications conversations for and quantifiable are where we've we've cooperation together how of can been business. communicating. say, customers that, we've company end say, think do their think the some door what's really at open trying hardware couple back been IoU to And there's had those conversely house. to with exciting the our those sell in examples the helped larger I'd been And getting for the we've really between cases broader towards where of and folks. feedback. know any where their get impact is a Dave inside and a the Gervin some selling and of me of, of too rest Aclara I efforts we've suite products, of parts understand make the Hubbell help technology can smart our Aclara good

say early And equals, are encouraging. days are know, at But plus than very you the of Right. would the think one so seeing I if I one you two. more signs very,

Jeff Sprague

Great. Thanks guys. a

Operator

And line with comes from JMP your next question Joseph of Osha Securities.

Joseph Osha

million you and we Are some any activity of Maria until this colors uh, buyback it be that some down we, to some, to expect $XXX paper. Bill, had gets, prepayable just clarify see there at would least paid First helpful. should gets uh,

William Sperry

Yeah.

cash. four a I that of loan. very that, a kind share think continue but I priority glide a you're repurchase to know, on do and we're uses wise, off think right viable year you're looking that I use. of path to assume term always think be evaluate, you in that But to could we and a pay that CP

think that, assume. you're I right So, to

Joseph Osha

The CPM, path? the term glide year a four loan over

William Sperry

CP mean be, sources. will kind overnight um, serves funding I of our, Yeah, as

the much good So flow but four or gauges think free how, some we're CP, that, to any are at any end quarter might to you have how pay I'm five those good. that's looking next cash down. about years

Joseph Osha

a I'm as where the less been been Okay, if lighting. palatable a sense the, to, to to regards has pricing yet you've wondering can more second you. where hold price we Thank then to versus latest on. able get great. again, And

William Sperry

price think of would for itself having about, little that go I products if lend here percent and projects, with in some about. been commodity we've than be a to there's in some and are it's, chase a uh, one price for shown opportunity more to an us to the better I quarter volume. I think is, selective bit use a it's, that the as us actually David experience we've think quarter commented, is there to more the have

Joseph Osha

the was meant little ask hold more. I to the in of line a yourself didn't just question. dry being I my of I you, able you wondering and which market. terms end what end terms you're, Well, Sorry, in markets That's meant. if find

Sorry.

William Sperry

Yeah, and know, and the I mean. if slicing, bit non-right don't that's what in to generalize easily. don't think it is too between raise, sub a it's, res if little If it's res, you saying than think non you're is I non-res think pricing can as you I firmer you

David Nord

C&I projects challenge I the in And or markets competition. think isn't as to that and that within those Yeah. where is those you know, is, offerings strong our representation are where, as non-specified the the, adding

a representations to good we market, in price strong if or it's, have it's don't. a with than a easier you maintain when geographic, whether vertical it's representations So

Joseph Osha

a Thanks lot.

Operator

turn There Maria the I like are no over to further questions time. to would Ms back at call this Lee.

Maria Lee

Thank for you. Thanks everyone joining us.

So day will for all available and be call that questions. concludes today's I

Operator

your for participation, you Thank disconnect. and you gentlemen, ladies may now

Hubbell (HUBB) 24 Apr 182018 Q1 Earnings call transcript