Hubbell Reports Second Quarter Results; Net Sales of $909 Million and Earnings Per Diluted Share of $1.45, Including $0.08 of Restructuring and Related Costs
(Thomson Reuters ONE) -
* Net sales up 4% (+1% organic, +4% acquisitions, -1% FX)
* Adjusted diluted EPS((1)) of $1.53, excluding restructuring and related
costs of $0.08
* Year-to-date share repurchases of $247 million
SHELTON, CT. (July 26, 2016) - Hubbell Incorporated (NYSE: HUBB) today reported
operating results for the second quarter ended June 30, 2016.
Net sales in the second quarter of 2016 were $909 million, an increase of 4%
compared to the $874 million reported in the second quarter of 2015. Operating
income in the quarter was $132 million as compared to $127 million in the same
period of 2015. Excluding restructuring and related costs in both periods,
adjusted operating income was $138 million in the second quarter of 2016,
compared to $143 million in the second quarter of 2015 ((1)). Net income
attributable to Hubbell in the second quarter of 2016 was $81 million compared
to $80 million reported in the comparable period of 2015. Earnings per diluted
share for the second quarter of 2016 were $1.45, compared to $1.37 reported in
the second quarter of 2015. Excluding restructuring and related costs in both
periods, adjusted earnings per diluted share were $1.53 in the second quarter of
2016, compared to $1.56 of adjusted earnings per diluted share in the second
quarter of 2015( (1)). Free cash flow (defined as cash flow from operating
activities less capital expenditures) was $49 million in the second quarter of
2016 versus $55 million reported in the comparable period of 2015 ((3)).
For the first six months of 2016 net sales were $1.7 billion, an increase of
4% compared to the same period of the prior year. Operating income was $234
million compared to $232 million for the comparable period of 2015. Excluding
restructuring and related costs, adjusted operating income for the first six
months of 2016 was $247 million compared with $252 million for the comparable
period of 2015 ((1)). Net income attributable to Hubbell of $142 million in the
first six months of 2016 was flat as compared to the comparable period of 2015.
Earnings per diluted share for the first six months of 2016 were $2.53 compared
to $2.44 reported for the first six months of 2015. Excluding restructuring and
related costs, earnings per diluted share for the first six months of 2016 were
$2.69 compared with $2.68 for the comparable period of 2015( (1) ). Free cash
flow was $92 million compared to $64 million reported in the first six months of
2015 ((3)).
OPERATIONS REVIEW
"Similar to the first quarter, organic growth offset foreign exchange headwind
while acquisitions fueled higher sales," said David G. Nord, Chairman, President
and Chief Executive Officer. "End market performance continued to be mixed, with
expansion in non-residential and residential markets, declines in oil and core
industrial, and flat utility markets. While overall demand was in line with our
annual expectations, it was uneven within the months of the quarter. The lack of
steady market trends did not distract us from our focus on product innovation,
channel development, and cost reduction.
"We continued executing our restructuring and related programs and the realized
savings are on track. We made significant progress in the quarter, particularly
in business process initiatives, toward our objectives of streamlining our
operations and optimizing our cost structure," stated Mr. Nord. "In addition,
the integration of the two acquisitions completed earlier this year is going as
planned. And in July, Hubbell Power Systems closed on an acquisition of a
polymer insulator manufacturer based in China.
"As previously announced, we completed our stated share repurchases for 2016 in
the quarter, buying back $250 million of shares since completing our Common
Stock reclassification in December," added Mr. Nord.
SEGMENT REVIEW
The comments and year-over-year comparisons in this segment review are based on
second quarter results in 2016 and 2015.
Electrical segment net sales in the second quarter of 2016 increased 4% to $641
million compared to $615 million reported in the second quarter of 2015. Organic
sales increased 1% in the quarter due to higher shipments in construction-
related businesses partially offset by declines in oil and core industrial
markets. Foreign currency translation reduced sales by 1%. Acquisitions added
4% to net sales in the quarter. Operating income was $77 million, or 12.0% of
net sales, compared to $75 million, or 12.1% of net sales, in the same period of
2015. Excluding restructuring and related costs, adjusted operating income was
$83 million, or 12.9% of net sales compared to $88 million, or 14.3% of net
sales in the same period of 2015 ((1)). The decreases in adjusted operating
income and margin were primarily due to mix headwind ((1)).
Power segment net sales in the second quarter of 2016 increased 3% to $267
million compared to $259 million reported in the second quarter of 2015. Organic
sales increased 1% in the quarter and offset unfavorable foreign currency
translation of 1%. Acquisitions added 3% to net sales in the quarter. Compared
to the second quarter of 2015, operating income increased 5% to $55 million, or
40 basis points to 20.6% of net sales. Excluding restructuring and related
costs, adjusted operating income was $56 million, or 20.9% of net sales compared
to $55 million, or 21.1% of net sales in the same period of 2015 ((1)). The
impacts of favorable material costs and price contributed to the increase in
adjusted operating income, while acquisitions had an unfavorable impact on
adjusted operating margin.
SUMMARY & OUTLOOK
Mr. Nord commented, "First half financial performance reflected growing
construction-related markets partially offset by oil and core industrial
declines. We expect this dynamic to continue into the second half of 2016,
although we anticipate easier compares in our Harsh and Hazardous business.
"We continue to expect flat end markets in the aggregate for the second half of
2016, consistent with our annual expectations, and we target to outperform our
end markets," Mr. Nord added. "With half of 2016 complete, we are confident in
our ability to deliver full year diluted earnings per share in the range of
$5.20 to $5.40, including approximately $0.35 of restructuring and related costs
and $0.30 of incremental savings, and free cash flow greater than 90% of net
income."
FORWARD LOOKING STATEMENTS
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 expectations regarding our financial results and
outlook, outperforming end markets, restructuring actions, market conditions,
foreign exchange rates, shareholder value creation, and other statements that
are not strictly historic in nature. 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 "target",
"improved", "leading", "improving", "continuing growth", "continued", "ranging",
"contributing", "primarily", "plan", "expect", "anticipated", "expected",
"expectations," "should result", "uncertain", "goals", "projected", "on track",
"likely", "intend" and others. Such forward-looking statements are based on the
Company's reasonable current expectations and 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 initiatives and streamlining
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; effects of unfavorable foreign
currency exchange rates; general economic and business conditions; competition;
and 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 Annual Report on Form 10-K for
the year ended December 31, 2015.
About the Company
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 2015 revenues of $3.4
billion, Hubbell Incorporated operates manufacturing facilities in the United
States and around the world. The corporate headquarters is located in Shelton,
CT.
Contact: Steve Beers
Hubbell Incorporated
40 Waterview Drive
P.O Box 1000
Shelton, CT 06484
(475) 882-4000
#######
HUBBELL INCORPORATED
Condensed Consolidated Statement of Income
(unaudited)
(in millions, except per share amounts)
Three Months Ended
June 30, Six Months Ended June 30,
----------------------- --------------------------
2016 2015 2016 2015
----------- ----------- ------------- ------------
Net sales $ 908.8 $ 874.0 $ 1,743.6 $ 1,683.7
Cost of goods sold 615.3 590.9 1,190.2 1,148.8
----------- ----------- ------------- ------------
Gross profit 293.5 283.1 553.4 534.9
Selling & administrative
expenses 161.4 156.4 319.4 303.2
----------- ----------- ------------- ------------
Operating income 132.1 126.7 234.0 231.7
Operating income as a % of
Net sales 14.5 % 14.5 % 13.4 % 13.8 %
Interest expense, net (11.3 ) (7.4 ) (20.3 ) (15.1 )
Other income (expense), net (4.0 ) (1.3 ) (5.3 ) (3.8 )
----------- ----------- ------------- ------------
Total other expense, net (15.3 ) (8.7 ) (25.6 ) (18.9 )
Income before income taxes 116.8 118.0 208.4 212.8
Provision for income taxes 34.8 36.7 64.4 68.1
----------- ----------- ------------- ------------
Net income 82.0 81.3 144.0 144.7
Less: Net income
attributable to
noncontrolling interest 1.0 1.2 2.1 2.2
----------- ----------- ------------- ------------
Net income attributable to
Hubbell $ 81.0 $ 80.1 $ 141.9 $ 142.5
----------- ----------- ------------- ------------
Earnings Per Share:
Basic $ 1.46 $ 1.39 $ 2.54 $ 2.46
Diluted $ 1.45 $ 1.37 $ 2.53 $ 2.44
Cash dividends per common
share $ 0.63 $ 0.56 $ 1.26 $ 1.12
HUBBELL INCORPORATED
Condensed Consolidated Balance Sheet
(unaudited)
(in millions)
June December
30, 2016 31, 2015
------------- --------------
ASSETS
Cash and cash equivalents $ 338.5 $ 343.5
Short-term investments 9.9 12.2
Accounts receivable, net 516.8 466.6
Inventories, net 546.8 540.0
Other current assets 40.0 25.5
------------- --------------
TOTAL CURRENT ASSETS 1,452.0 1,387.8
Property, plant and equipment, net 431.3 419.7
Investments 55.6 49.5
Goodwill 989.2 928.5
Intangible assets, net 442.3 372.2
Other long-term assets 47.3 51.0
------------- --------------
TOTAL ASSETS $ 3,417.7 $ 3,208.7
------------- --------------
LIABILITIES AND EQUITY
Short-term debt $ 58.3 $ 48.2
Accounts payable 279.4 289.5
Accrued salaries, wages and employee benefits 57.8 75.3
Accrued insurance 54.1 50.4
Other accrued liabilities 128.4 139.7
------------- --------------
TOTAL CURRENT LIABILITIES 578.0 603.1
Long-term debt 989.7 595.9
Other non-current liabilities 270.6 260.7
------------- --------------
TOTAL LIABILITIES 1,838.3 1,459.7
Hubbell Shareholders' Equity 1,570.2 1,740.6
Noncontrolling interest 9.2 8.4
------------- --------------
TOTAL EQUITY 1,579.4 1,749.0
------------- --------------
TOTAL LIABILITIES AND EQUITY $ 3,417.7 $ 3,208.7
------------- --------------
HUBBELL INCORPORATED
Condensed Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Six Months Ended June
30,
----------------------
2016 2015
----------- ----------
Cash Flows From Operating Activities
Net income attributable to Hubbell $ 141.9 $ 142.5
Depreciation and amortization 45.9 42.9
Stock-based compensation expense 8.8 7.3
Deferred income taxes (0.8 ) (2.0 )
Changes in working capital (69.4 ) (69.9 )
Contributions to defined benefit pension plans (0.9 ) (21.7 )
Other, net (3.3 ) (0.4 )
----------- ----------
Net cash provided by operating activities 122.2 98.7
----------- ----------
Cash Flows From Investing Activities
Capital expenditures (29.9 ) (34.5 )
Acquisition of businesses, net of cash acquired (171.6 ) (127.0 )
Net change in investments - (1.5 )
Other, net 1.0 1.5
----------- ----------
Net cash used in investing activities (200.5 ) (161.5 )
----------- ----------
Cash Flows From Financing Activities
Long-term debt issuance, net 397.0 -
Short-term debt borrowings, net 10.1 (1.2 )
Payment of dividends (70.3 ) (64.9 )
Repurchase of common shares (246.8 ) (76.0 )
Proceeds from stock issuance, net - 0.2
Other, net (3.7 ) (0.1 )
----------- ----------
Net cash used in financing activities 86.3 (142.0 )
----------- ----------
Effect of foreign exchange rate changes on cash and cash
equivalents (13.0 ) (4.8 )
----------- ----------
(Decrease) increase in cash and cash equivalents (5.0 ) (209.6 )
Cash and cash equivalents
Beginning of period 343.5 653.9
----------- ----------
End of period $ 338.5 $ 444.3
----------- ----------
HUBBELL INCORPORATED
Restructuring and Related Costs Included in Consolidated Results
(unaudited)
(in millions, except per share amounts)
Three Months Ended June 30,
---------
2016 2015 2016 2015 2016 2015
------------------ ----------------- ------------------
Cost of goods
sold S&A expense Total
------------------ ----------------- ------------------
Restructuring costs $ 2.2 $ 5.4 $ 1.5 $ 3.5 $ 3.7 $ 8.9
Restructuring related
costs 1.2 4.2 1.5 2.7 2.7 6.9
----------- --- ----------------- ------------------
Restructuring and
related costs (non-GAAP
measure) ((1)) $ 3.4 $ 9.6 $ 3.0 $ 6.2 $ 6.4 $ 15.8
------------------ ----------------- ------------------
Six Months Ended June 30,
-------------------------------------------------------
2016 2015 2016 2015 2016 2015
------------------ ----------------- ------------------
Cost of goods
sold S&A expense Total
------------------ ----------------- ------------------
Restructuring costs $ 4.0 $ 8.0 $ 5.5 $ 3.6 $ 9.5 $ 11.6
Restructuring related
costs 1.6 5.5 2.0 3.1 3.6 8.6
------------------ ----------------- ------------------
Restructuring and
related costs (non-GAAP
measure) ((1)) $ 5.6 $ 13.5 $ 7.5 $ 6.7 $ 13.1 $ 20.2
------------------ ----------------- ------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
2016 2015 2016 2015
---------- ---------- ---------- ---------
Restructuring and related costs
included in Cost of goods sold
Electrical $ 3.1 $ 8.4 $ 5.3 $ 11.2
Power 0.3 1.2 0.3 2.3
---------- ---------- ---------- ---------
Total $ 3.4 $ 9.6 $ 5.6 $ 13.5
---------- ---------- ---------- ---------
Restructuring and related costs
included in Selling & administrative
expenses
Electrical $ 2.4 $ 4.9 $ 6.5 $ 5.3
Power 0.6 1.3 1.0 1.4
---------- ---------- ---------- ---------
Total $ 3.0 $ 6.2 $ 7.5 $ 6.7
---------- ---------- ---------- ---------
Impact on income before income taxes $ 6.4 $ 15.8 $ 13.1 $ 20.2
Impact on Net income available to
Hubbell common shareholders 4.3 10.9 8.9 13.8
Impact on Diluted earnings per share $ 0.08 $ 0.19 $ 0.16 $ 0.24
HUBBELL INCORPORATED
Earnings Per Share
(unaudited)
(in millions, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
------------------------------ -------------------------------
2016 2015 Change 2016 2015 Change
---------- ---------- -------- ----------- ----------- -------
Net income
attributable to
Hubbell (GAAP
measure) $ 81.0 $ 80.1 1 % $ 141.9 $ 142.5 - %
Restructuring
and related
costs, net of
tax 4.3 10.9 8.9 13.8
---------- ---------- ----------- -----------
Adjusted Net
Income ((1)) $ 85.3 $ 91.0 (6 )% $ 150.8 $ 156.3 (4 )%
---------- ---------- ----------- -----------
Numerator:
Net income
attributable to
Hubbell (GAAP
measure) $ 81.0 $ 80.1 $ 141.9 $ 142.5
Less: Earnings
allocated to
participating
securities (0.2 ) (0.2 ) (0.4 ) (0.4 )
---------- ---------- ----------- -----------
Net income
available to
common
shareholders
(GAAP measure)
[a] $ 80.8 $ 79.9 1 % $ 141.5 $ 142.1 - %
---------- ---------- ----------- -----------
Adjusted Net
Income ((1)) $ 85.3 $ 91.0 $ 150.8 $ 156.3
Less: Earnings
allocated to
participating
securities (0.3 ) (0.2 ) (0.5 ) (0.4 )
---------- ---------- ----------- -----------
Adjusted net
income available
to common
shareholders
((1)) [b] $ 85.0 $ 90.8 (6 )% 150.3 155.9 (4 )%
---------- ---------- ----------- -----------
Denominator:
Average number
of common shares
outstanding [c] 55.3 57.7 55.8 57.9
Potential
dilutive shares 0.3 0.3 0.2 0.3
---------- ---------- ----------- -----------
Average number
of diluted
shares
outstanding [d] 55.6 58.0 56.0 58.2
---------- ---------- ----------- -----------
Earnings per
share (GAAP
measure):
Basic [a] / [c] $ 1.46 $ 1.39 $ 2.54 $ 2.46
Diluted [a] /
[d] $ 1.45 $ 1.37 6 % $ 2.53 $ 2.44 4 %
Adjusted
earnings per
diluted share(
(1)) [b] / [d] $ 1.53 $ 1.56 (2 )% $ 2.69 $ 2.68 - %
Full Year 2016
------------------
Earnings per diluted share (GAAP measure) $5.20 - $5.40
Restructuring and related costs $0.35
------------------
Adjusted earnings per diluted share ((1)) $5.55 - $5.75
------------------
HUBBELL INCORPORATED
Segment Information
(unaudited)
(in millions)
Hubbell
Incorporated Three Months Ended June 30, Six Months Ended June 30,
-------------------------------- -----------------------------------
2016 2015 Change 2016 2015 Change
----------- ----------- -------- ------------- ------------- -------
Net Sales [a] $ 908.8 $ 874.0 4 % $ 1,743.6 $ 1,683.7 4 %
Operating
Income
GAAP measure
[b] $ 132.1 $ 126.7 4 % $ 234.0 $ 231.7 1 %
Restructuring
and related
costs 6.4 15.8 13.1 20.2
----------- ----------- ------------- -------------
Adjusted
operating
income ((1))
[c] $ 138.5 $ 142.5 (3 )% $ 247.1 $ 251.9 (2 )%
----------- ----------- ------------- -------------
Operating
margin
GAAP measure -40
[b] / [a] 14.5 % 14.5 % 0 bps 13.4 % 13.8 % bps
Adjusted
operating
margin ((1)) -110 -80
[c] / [a] 15.2 % 16.3 % bps 14.2 % 15.0 % bps
Electrical
segment Three Months Ended June 30, Six Months Ended June 30,
-------------------------------- -----------------------------------
2016 2015 Change 2016 2015 Change
----------- ----------- -------- ------------- ------------- -------
Net Sales [a] $ 641.4 $ 615.0 4 % $ 1,224.1 $ 1,184.8 3 %
Operating
Income
GAAP measure
[b] $ 77.1 $ 74.5 3 % $ 132.5 $ 137.8 (4 )%
Restructuring
and related
costs 5.5 13.3 11.8 16.5
----------- ----------- ------------- -------------
Adjusted
operating
income ((1))
[c] $ 82.6 $ 87.8 (6 )% $ 144.3 $ 154.3 (6 )%
----------- ----------- ------------- -------------
Operating
margin
GAAP measure -10 -80
[b] / [a] 12.0 % 12.1 % bps 10.8 % 11.6 % bps
Adjusted
operating
margin ((1)) -140 -120
[c] / [a] 12.9 % 14.3 % bps 11.8 % 13.0 % bps
Power segment Three Months Ended June 30, Six Months Ended June 30,
-------------------------------- -------------------------------
2016 2015 Change 2016 2015 Change
----------- ----------- -------- ----------- ----------- -------
Net Sales [a] $ 267.4 $ 259.0 3 % $ 519.5 $ 498.9 4 %
Operating
Income
GAAP measure
[b] $ 55.0 $ 52.2 5 % $ 101.5 $ 93.9 8 %
Restructuring
and related
costs 0.9 2.5 1.3 3.7
----------- ----------- ----------- -----------
Adjusted
operating
income ((1))
[c] $ 55.9 $ 54.7 2 % $ 102.8 $ 97.6 5 %
----------- ----------- ----------- -----------
Operating
margin
GAAP measure
[b] / [a] 20.6 % 20.2 % 40 bps 19.5 % 18.8 % 70 bps
Adjusted
operating
margin ((1)) -20
[c] / [a] 20.9 % 21.1 % bps 19.8 % 19.6 % 20 bps
HUBBELL INCORPORATED
Non-GAAP Financial Measures
(unaudited)
(in millions)
Ratios of Total Debt to Total Capital and Net Debt to Total Capital
June 30, 2016 December 31, 2015
------------------- --------------------
Total Debt $ 1,048.0 $ 644.1
Total Hubbell Shareholders' Equity 1,570.2 1,740.6
------------------- --------------------
Total Capital $ 2,618.2 $ 2,384.7
------------------- --------------------
Total Debt to Total Capital 40 % 27 %
Less: Cash and Investments $ 404.0 $ 405.2
------------------- --------------------
Net Debt ((2)) $ 644.0 $ 238.9
------------------- --------------------
Net Debt to Total Capital ((2)) 25 % 10 %
Free Cash Flow Reconciliation
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2016 2015 2016 2015
---------- ---------- ----------- ---------
Net cash provided by operating
activities $ 63.8 $ 72.9 $ 122.2 $ 98.7
Less: Capital expenditures (14.6 ) (18.2 ) (29.9 ) (34.5 )
---------- ---------- ----------- ---------
Free cash flow( (3)) $ 49.2 $ 54.7 $ 92.3 $ 64.2
---------- ---------- ----------- ---------
HUBBELL INCORPORATED
Footnotes
((1) ) In order to provide a comparison that we believe provides investors with
useful information regarding our underlying performance from period to period
and to allow investors to assess the impact of restructuring activities and
business transformation initiatives on our results of operations, the Company
refers to adjusted operating income, adjusted operating margin, adjusted net
income, adjusted net income available to common shareholders, and adjusted
earnings per diluted share, each of which exclude restructuring and related
costs. Management uses these non-GAAP measures when assessing the performance of
the business.
Restructuring costs support our cost reduction efforts involving the
consolidation of manufacturing and distribution facilities, workforce reductions
and the sale or exit of business units we determine to be non-strategic and is a
GAAP measure. Restructuring-related costs are costs associated with our business
transformation initiatives, including the consolidation of back-office functions
and streamlining our processes. We refer to these costs on a combined basis as
"restructuring and related costs", which is a non-GAAP measure. Each of the
adjusted operating measures, which exclude the impact of restructuring and
related costs, are non-GAAP measures. Reconciliations of each of these non-GAAP
measures to the most directly comparable GAAP measure can be found in the tables
within this press release.
((2)) Net debt and net debt to total capital are non-GAAP measures we believe
are useful for evaluating the Company's financial leverage and the ability to
meet its funding needs.
((3) )Free cash flow is a non-GAAP measure that we believe provides useful
information regarding the Company's ability to generate cash without reliance on
external financings. In addition, management uses free cash flow to evaluate the
resources available for investments in the business, strategic acquisitions and
further strengthening the balance sheet.
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Hubbell Inc. via GlobeNewswire
[HUG#2030554]
Unternehmensinformation / Kurzprofil:
Datum: 26.07.2016 - 13:30 Uhr
Sprache: Deutsch
News-ID 485413
Anzahl Zeichen: 38741
contact information:
Town:
Shelton
Kategorie:
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