Hubbell Reports First Quarter Results: Net Sales of $852 Million and Earnings Per Diluted Share of $1.13, Including $0.10 of Restructuring and Related Costs
(Thomson Reuters ONE) -
* Net sales up 2% (acquisitions +1%, organic +1%, FX <-1%)
* Adjusted diluted EPS((1)) up 6% to $1.23
* Share repurchases of $53 million and acquisitions of ~$110 million through
April
* FY 2017 diluted EPS expectation revised to $5.40 to $5.60
SHELTON, CT. (April 25, 2017) - Hubbell Incorporated (NYSE: HUBB) today reported
operating results for the first quarter ended March 31, 2017.
Net sales in the first quarter of 2017 were $852 million, an increase of 2%
compared to the $835 million reported in the first quarter of 2016. Operating
income in the quarter was $104 million as compared to $102 million in the same
period of 2016. Excluding restructuring and related costs in both periods,
adjusted operating income was $112 million in the first quarter of 2017,
compared to $109 million in the first quarter of 2016 ((1)). Net income
attributable to Hubbell in the first quarter of 2017 was $63 million compared to
$61 million reported in the comparable period of 2016. Earnings per diluted
share for the first quarter of 2017 were $1.13 compared to $1.08 reported in the
first quarter of 2016. Excluding restructuring and related costs in both
periods, adjusted earnings per diluted share were $1.23 in the first quarter of
2017, compared to $1.16 in the first quarter of 2016( (1)).
Net cash provided from operating activities was $63 million in the first quarter
of 2017 versus $62 million in the comparable period of 2016. Free cash flow
(defined as cash flow from operating activities less capital expenditures) was
$49 million in the first quarter of 2017 versus $47 million reported in the
comparable period of 2016 ((3)).
OPERATIONS REVIEW
"Sales growth from end markets in the quarter was complemented by our
acquisition activity," said David G. Nord, Chairman, President and Chief
Executive Officer. "While performance was more consistent across end markets
than it had been over the past several quarters, we continued to see commercial
construction and residential markets outgrow higher margin oil and core
industrial markets. Notably, global oil markets showed signs of stabilization
while the North American luminaire lighting market was soft. Electrical T&D
markets expanded in the quarter, driven by distribution.
"Acquisitions remain an important contributor to our growth strategy, and in
April, we acquired two businesses. The first is Advance Engineering Corporation
(AEC), a gas components manufacturer that complements our existing offering in
the natural gas distribution vertical. AEC joins our recent acquisitions of
GasBreaker and Lyall to bolster our leadership position in main-to-meter
mechanical solutions in this area. The second acquisition is iDevices, a
developer with embedded firmware and app development expertise with custom-built
Internet of Things Cloud infrastructure. iDevices accelerates our capabilities
and expertise in IoT technology, propelling us more quickly toward our vision of
providing Tier 3 energy management solutions via connected hardware with a
software front-end. Both acquisitions provide tremendous opportunity to
differentiate and enhance our broad base of products and solutions in growing
markets.
"Operating with discipline also continues to be a focus area," commented Mr.
Nord. "Adjusted operating margins in the quarter improved year-over-year,
despite price and material cost headwinds across the Company. Strong performance
at Power more than offset softness at Electrical. We invested $0.10 of diluted
EPS in the quarter in cost reduction actions, and while the necessary
restructuring efforts resulted in temporary inefficiencies in Lighting's
distribution and manufacturing capabilities, our realized savings are on track
with our full year outlook." Mr. Nord added, "We also repurchased $53 million of
shares in the quarter."
SEGMENT REVIEW
The comments and year-over-year comparisons in this segment review are based on
first quarter results in 2017 and 2016.
Electrical segment net sales in the first quarter of 2017 increased 1% to $588
million compared to $583 million reported in the first quarter of 2016. Organic
sales grew 1% in the quarter while acquisitions added 1% and offset foreign
currency headwind. Operating income was $50 million, or 8.5% of net sales,
compared to $55 million, or 9.5% of net sales, in the same period of 2016.
Excluding restructuring and related costs, adjusted operating income was $57
million, or 9.7% of net sales compared to $62 million, or 10.6% of net sales in
the same period of 2016 ((1)). The decreases in adjusted operating income and
adjusted operating margin were primarily due to unfavorable price, material
costs and mix, partially offset by savings from cost actions((1)).
Power segment net sales in the first quarter of 2017 increased 5% to $265
million compared to $252 million reported in the first quarter of 2016.
Acquisitions added 4% to net sales in the quarter, while organic sales grew 1%
and the impact of foreign currency translation was immaterial. Compared to the
first quarter of 2016, operating income increased 16% to $54 million, or 200
basis points to 20.4% of net sales. Excluding restructuring and related costs,
adjusted operating income was $56 million, or 21.0% of net sales compared to $47
million, or 18.6% of net sales in the same period of 2016 ((1)). Changes in
adjusted operating income and adjusted operating margin were primarily due to
productivity in excess of cost increases.
SUMMARY & OUTLOOK
For the full year 2017, Hubbell anticipates end markets will grow approximately
2% to 3% in the aggregate and acquisitions completed to date will contribute
approximately 2% to net sales. This end market outlook includes growth in the
oil and gas, as well as industrial, markets of 2% to 4%, compared with 0% to 2%
previously; expectations for the other markets are unchanged at 4% to 6% growth
for residential, 2% to 4% growth for non-residential, and flat to 2% growth for
Electrical T&D. This higher growth is expected to partially offset the
restructuring-driven inefficiencies at Lighting. In addition, the Company
expects its recent iDevices acquisition will be approximately $0.10 dilutive to
2017 EPS.
In light of the headwind at Lighting and the acquisitions completed to date,
including the investment in IoT capabilities via iDevices, the Company is
reducing its expectation for 2017 diluted earnings per share by $0.20 to $5.40
to $5.60. This expectation still anticipates approximately $0.25 of
restructuring and related costs and $0.20 of incremental savings from
restructuring and related actions. Hubbell continues to expect free cash flow to
equal net income in 2017.
"We are encouraged by the improved outlook in our end markets, while we continue
to experience softness at Lighting as we work through costs related to
restructuring initiatives, including facility consolidations and supply chain
management, over the next several months. Fixing Lighting's challenges is a
critical priority in the near-term, and we have dedicated resources working to
develop and implement action plans," Mr. Nord added. "While our recent iDevices
acquisition is expected to be dilutive to 2017 EPS, we are confident that our
investment in IoT engineering and R&D resources and know-how will drive
significant value over time. Our product innovation, customer relationships and
complementary acquisitions position us well to capitalize on expanding end
markets. Combined with savings from cost actions and effective capital
deployment, we are focused on delivering significant shareholder value over the
long-term."
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, capital deployment, 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", "believe", "continues", "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 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 productivity
improvements and cost reduction actions; pension expense; effects of unfavorable
foreign currency exchange rates; price and material costs; general economic and
business conditions; the impact of and the ability to complete strategic
acquisitions and integrate acquired companies; the ability to effectively
develop and introduce new products, expand into new markets and deploy capital;
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, 2016.
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 2016 revenues of $3.5
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
March 31,
----------------------
2017 2016
----------- ----------
Net sales $ 852.3 $ 834.8
Cost of goods sold 590.5 574.9
----------- ----------
Gross profit 261.8 259.9
Selling & administrative expenses 157.7 158.0
----------- ----------
Operating income 104.1 101.9
Operating income as a % of Net sales 12.2 % 12.2 %
Interest expense, net (11.1 ) (9.0 )
Other income (expense), net (2.1 ) (1.3 )
----------- ----------
Total other expense, net (13.2 ) (10.3 )
Income before income taxes 90.9 91.6
Provision for income taxes 27.0 29.6
----------- ----------
Net income 63.9 62.0
Less: Net income attributable to noncontrolling interest 1.1 1.1
----------- ----------
Net income attributable to Hubbell $ 62.8 $ 60.9
----------- ----------
Earnings Per Share:
Basic $ 1.13 $ 1.08
Diluted $ 1.13 $ 1.08
Cash dividends per common share $ 0.70 $ 0.63
HUBBELL INCORPORATED
Condensed Consolidated Balance Sheet
(unaudited)
(in millions)
March December
31, 2017 31, 2016
------------- --------------
ASSETS
Cash and cash equivalents $ 381.0 $ 437.6
Short-term investments 9.8 11.2
Accounts receivable, net 545.0 530.0
Inventories, net 547.8 532.4
Other current assets 34.0 40.1
------------- --------------
TOTAL CURRENT ASSETS 1,517.6 1,551.3
Property, plant and equipment, net 437.8 439.8
Investments 59.2 56.4
Goodwill 1,000.5 991.0
Intangible assets, net 427.3 431.5
Other long-term assets 52.2 55.0
------------- --------------
TOTAL ASSETS $ 3,494.6 $ 3,525.0
------------- --------------
LIABILITIES AND EQUITY
Short-term debt $ 5.1 $ 3.2
Accounts payable 300.1 291.6
Accrued salaries, wages and employee benefits 65.3 82.8
Accrued insurance 60.0 55.8
Other accrued liabilities 145.5 156.2
------------- --------------
TOTAL CURRENT LIABILITIES 576.0 589.6
Long-term debt 990.9 990.5
Other non-current liabilities 338.9 341.7
------------- --------------
TOTAL LIABILITIES 1,905.8 1,921.8
Hubbell Shareholders' Equity 1,578.7 1,592.8
Noncontrolling interest 10.1 10.4
------------- --------------
TOTAL EQUITY 1,588.8 1,603.2
------------- --------------
TOTAL LIABILITIES AND EQUITY $ 3,494.6 $ 3,525.0
------------- --------------
HUBBELL INCORPORATED
Condensed Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Three Months Ended
March 31,
----------------------
2017 2016
----------- ----------
Cash Flows From Operating Activities
Net income attributable to Hubbell $ 62.8 $ 60.9
Depreciation and amortization 24.2 22.7
Stock-based compensation expense 4.2 4.6
Deferred income taxes 0.7 0.5
Changes in working capital (35.1 ) (40.0 )
Contributions to defined benefit pension plans (0.4 ) (0.5 )
Other, net 6.6 14.1
----------- ----------
Net cash provided by operating activities 63.0 62.3
----------- ----------
Cash Flows From Investing Activities
Capital expenditures (13.6 ) (15.3 )
Acquisition of businesses, net of cash acquired (19.2 ) (172.2 )
Net change in investments (0.9 ) (1.0 )
Other, net 0.8 0.5
----------- ----------
Net cash used in investing activities (32.9 ) (188.0 )
----------- ----------
Cash Flows From Financing Activities
Long-term debt issuance, net - 397.0
Short-term debt borrowings, net 2.0 (48.2 )
Payment of dividends (38.8 ) (35.5 )
Repurchase of common shares (52.6 ) (201.8 )
Other, net (4.7 ) (7.0 )
----------- ----------
Net cash (used) provided by financing activities (94.1 ) 104.5
----------- ----------
Effect of foreign exchange rate changes on cash and cash
equivalents 7.4 (1.5 )
----------- ----------
Decrease in cash and cash equivalents (56.6 ) (22.7 )
Cash and cash equivalents
Beginning of period 437.6 343.5
----------- ----------
End of period $ 381.0 $ 320.8
----------- ----------
HUBBELL INCORPORATED
Restructuring and Related Costs Included in Consolidated Results
(unaudited)
(in millions, except per share amounts)
Three Months Ended March 31,
----------------------------------------------------
2017 2016 2017 2016 2017 2016
----------------- ----------------- ----------------
Cost of goods
sold S&A expense Total
----------------- ----------------- ----------------
Restructuring costs $ 4.2 $ 1.8 $ 1.3 $ 4.0 $ 5.5 $ 5.8
Restructuring related
costs 0.7 0.4 2.1 0.5 2.8 0.9
----------- --- ----------------- ----------------
Restructuring and related
costs (non-GAAP measure)
((1)) $ 4.9 $ 2.2 $ 3.4 $ 4.5 $ 8.3 $ 6.7
----------------- ----------------- ----------------
Three Months Ended
March 31,
--------------------
2017 2016
---------- ---------
Restructuring and related costs included in Cost of goods
sold
Electrical $ 4.4 $ 2.2
Power 0.5 -
---------- ---------
Total $ 4.9 $ 2.2
---------- ---------
Restructuring and related costs included in Selling &
administrative expenses
Electrical $ 2.5 $ 4.1
Power 0.9 0.4
---------- ---------
Total $ 3.4 $ 4.5
---------- ---------
Impact on income before income taxes $ 8.3 $ 6.7
Impact on Net income available to Hubbell common
shareholders 5.6 4.5
Impact on Diluted earnings per share $ 0.10 $ 0.08
HUBBELL INCORPORATED
Earnings Per Share
(unaudited)
(in millions, except per share amounts)
Three Months Ended March 31,
-----------------------------
2017 2016 Change
---------- ---------- -------
Net income attributable to Hubbell (GAAP measure) $ 62.8 $ 60.9 3 %
Restructuring and related costs, net of tax 5.6 4.5
---------- ----------
Adjusted Net Income ((1)) $ 68.4 $ 65.4 5 %
---------- ----------
Numerator:
Net income attributable to Hubbell (GAAP measure) $ 62.8 $ 60.9
Less: Earnings allocated to participating
securities (0.2 ) (0.2 )
---------- ----------
Net income available to common shareholders (GAAP
measure) [a] $ 62.6 $ 60.7 3 %
---------- ----------
Adjusted Net Income( (1)) $ 68.4 $ 65.4
Less: Earnings allocated to participating
securities (0.2 ) (0.2 )
---------- ----------
Adjusted net income available to common
shareholders ((1)) [b] $ 68.2 $ 65.2 5 %
---------- ----------
Denominator:
Average number of common shares outstanding [c] 55.2 56.3
Potential dilutive shares 0.4 0.2
---------- ----------
Average number of diluted shares outstanding [d] 55.6 56.5
---------- ----------
Earnings per share (GAAP measure):
Basic [a] / [c] $ 1.13 $ 1.08
Diluted [a] / [d] $ 1.13 $ 1.08 5 %
Adjusted earnings per diluted share( (1)) [b] /
[d] $ 1.23 $ 1.16 6 %
Full Year 2017
------------------
Earnings per diluted share (GAAP measure) $5.40 - $5.60
Restructuring and related costs $0.25
------------------
Adjusted earnings per diluted share ((1)) $5.65 - $5.85
------------------
HUBBELL INCORPORATED
Segment Information
(unaudited)
(in millions)
Hubbell Incorporated Three Months Ended March 31,
-------------------------------
2017 2016 Change
----------- ----------- -------
Net Sales [a] $ 852.3 $ 834.8 2 %
Operating Income
GAAP measure [b] $ 104.1 $ 101.9 2 %
Restructuring and related costs 8.3 6.7
----------- -----------
Adjusted operating income ((1)) [c] $ 112.4 $ 108.6 3 %
----------- -----------
Operating margin
GAAP measure [b] / [a] 12.2 % 12.2 % 0 bps
Adjusted operating margin ((1)) [c] / [a] +20
13.2 % 13.0 % bps
Electrical segment Three Months Ended March 31,
-------------------------------
2017 2016 Change
----------- ----------- -------
Net Sales [a] $ 587.5 $ 582.7 1 %
Operating Income
GAAP measure [b] $ 50.0 $ 55.4 (10 )%
Restructuring and related costs 6.9 6.3
----------- -----------
Adjusted operating income ((1)) [c] $ 56.9 $ 61.7 (8 )%
----------- -----------
Operating margin
GAAP measure [b] / [a] -100
8.5 % 9.5 % bps
Adjusted operating margin ((1)) [c] / [a] -90
9.7 % 10.6 % bps
Power segment Three Months Ended March 31,
-------------------------------
2017 2016 Change
----------- ----------- -------
Net Sales [a] $ 264.8 $ 252.1 5 %
Operating Income
GAAP measure [b] $ 54.1 $ 46.5 16 %
Restructuring and related costs 1.4 0.4
----------- -----------
Adjusted operating income ((1)) [c] $ 55.5 $ 46.9 18 %
----------- -----------
Operating margin
GAAP measure [b] / [a] +200
20.4 % 18.4 % bps
Adjusted operating margin ((1)) [c] / [a] +240
21.0 % 18.6 % bps
HUBBELL INCORPORATED
Additional Non-GAAP Financial Measures
(unaudited)
(in millions)
Ratios of Total Debt to Total Capital and Net Debt to Total Capital
March 31, 2017 December 31, 2016
------------------- --------------------
Total Debt $ 996.0 $ 993.7
Total Hubbell Shareholders' Equity 1,578.7 1,592.8
------------------- --------------------
Total Capital $ 2,574.7 $ 2,586.5
------------------- --------------------
Total Debt to Total Capital 39 % 38 %
Less: Cash and Investments $ 450.0 $ 505.2
------------------- --------------------
Net Debt ((2)) $ 546.0 $ 488.5
------------------- --------------------
Net Debt to Total Capital ((2)) 21 % 19 %
Free Cash Flow Reconciliation
Three Months Ended
March 31,
--------------------
2017 2016
---------- ---------
Net cash provided by operating activities((a)) $ 63.0 $ 62.3
Less: Capital expenditures (13.6 ) (15.3 )
---------- ---------
Free cash flow( (3)) $ 49.4 $ 47.0
---------- ---------
((a)) Comparable period has been recast to reflect the adoption of the new
accounting pronouncement for share-based payment (ASU 2016-09) as of January
1, 2017.
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 excludes 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 costs may include severance and employee benefits,
asset impairments, as well as facility closure, contract termination and certain
pension costs that are directly related to restructuring actions. Restructuring-
related costs are costs associated with our business transformation initiatives,
including the consolidation of back-office functions and streamlining our
processes, and certain other costs and gains associated with restructuring
actions. 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 adjusted operating measures to the most directly comparable GAAP
measure can be found in the tables within this press release.
((2)) Net debt to total capital is a non-GAAP measure and we believe is a useful
measure 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 financing. 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 Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Hubbell Inc. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 25.04.2017 - 13:22 Uhr
Sprache: Deutsch
News-ID 538172
Anzahl Zeichen: 38107
contact information:
Town:
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Kategorie:
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