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Hubbell Announces First Quarter Results, Consolidation of Segments
ORANGE, Conn.--(BUSINESS WIRE)--April 19, 2000--Hubbell
Incorporated (NYSE: HUBA, HUBB) today reported its results for the
first quarter of 2000. The Company also announced that following the
recent sale of its WavePacer DSL assets, the remaining Pulse
Communications business will be consolidated with Hubbell's Electrical
Segment.
For the three months ended March 31, 2000, sales were $360.7 million versus $367.5 million reported in the corresponding period last year. Net income was $35.1 million and fully diluted earnings per share were $.55 as compared to $39.7 million and $.60, respectively, reported for the period in 1999.
In commenting on its operating experience during the quarter the Company noted variations among its business segments as well as continuing progress in addressing recent problem areas. In the Electrical Segment, sales and operating profit declined compared to the strong first quarter of 1999. Within the segment, specification-grade wiring system products, including Hubbell operations in Canada and Mexico, reported positive sales and operating profit comparisons; Lighting operations' results slowed as compared against the exceptionally strong 30%+ improvements reported in the first quarter of 1999. Virtually all of the segment's sales and operating profit decline originated in the commodity product and Pulsecom telecommunications operations. For commodity products, markets and pricing in this sector remained soft relative to Hubbell's base industrial markets while added logistics and ramp-up costs associated with a new distribution center exacerbated the operating profit comparison. Under new management since early in 2000, these operations have successfully improved profitability through each of the first three months of 2000 and are on schedule to return to traditional profitability levels by mid-year. Pulse Communications reported lower sales year-over-year in its core legacy business and a loss for the quarter because of continued development costs for the WavePacer product line prior to its sale. Just after the close of the quarter, and as previously announced, the Company completed the sale of WavePacer to ECI Telecom for a purchase price of $61 million with a provision for additional payments depending upon WavePacer sales in 2000. Sales of Pulsecom's core multiplexing products (which are being retained by Hubbell) appear to have stabilized at an annual rate of $70-80 million and are generating strong double digit operating margins.
The Power Systems Segment also moved ahead in resolving recent problems. On a continuing operations basis, i.e. excluding first quarter 1999 contributions from the Kerite subsidiary divested in September of last year, order input improved by better than 20% year-over-year and sales rose by 8%. Total operating profit was below the prior year's level, but this segment - also under new management in 2000 - is expected to return to its traditional double-digit level of operating margin by mid-year.
Sales and operating profit comparisons for the Other Segment were strongly positive year-over-year as results at the Hipotronics unit continued to improve, the Haefely acquisition made in September of 1999 contributed to the quarter's results, and the Industrial Controls operation further improved in sales and operating profit margin.
A number of one-time events are also incorporated in the first quarter results. Reflecting estimated project costs in excess of that which was needed, Hubbell will return to earnings a portion of its current consolidation reserve which is almost wholly offset by a new charge for additional activities that are scheduled for completion in 2000. Additionally, gains on the disposal of a surplus facility and an investment are included in income.
Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as "expects", "projected", "scheduled", and "unanticipated". 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: achieving sales levels to fulfill revenue expectations; unexpected costs or charges, certain of which may be outside the control of the Company; general economic and business conditions; competition; successfully completing the Company's consolidation, streamlining, and reorganization program and other factors.
Hubbell Incorporated is an international manufacturer of quality electrical and electronic products for commercial, industrial, utility, and telecommunications markets. With $1.4 billion in annual revenues, Hubbell Incorporated operates manufacturing facilities in North America, Puerto Rico, Mexico, Switzerland, and the United Kingdom, participates in a joint ventures in Taiwan, and maintains sales offices in Malaysia, Hong King, South Korea, and the Middle East. The corporate headquarters is located in Orange, CT.
For the three months ended March 31, 2000, sales were $360.7 million versus $367.5 million reported in the corresponding period last year. Net income was $35.1 million and fully diluted earnings per share were $.55 as compared to $39.7 million and $.60, respectively, reported for the period in 1999.
In commenting on its operating experience during the quarter the Company noted variations among its business segments as well as continuing progress in addressing recent problem areas. In the Electrical Segment, sales and operating profit declined compared to the strong first quarter of 1999. Within the segment, specification-grade wiring system products, including Hubbell operations in Canada and Mexico, reported positive sales and operating profit comparisons; Lighting operations' results slowed as compared against the exceptionally strong 30%+ improvements reported in the first quarter of 1999. Virtually all of the segment's sales and operating profit decline originated in the commodity product and Pulsecom telecommunications operations. For commodity products, markets and pricing in this sector remained soft relative to Hubbell's base industrial markets while added logistics and ramp-up costs associated with a new distribution center exacerbated the operating profit comparison. Under new management since early in 2000, these operations have successfully improved profitability through each of the first three months of 2000 and are on schedule to return to traditional profitability levels by mid-year. Pulse Communications reported lower sales year-over-year in its core legacy business and a loss for the quarter because of continued development costs for the WavePacer product line prior to its sale. Just after the close of the quarter, and as previously announced, the Company completed the sale of WavePacer to ECI Telecom for a purchase price of $61 million with a provision for additional payments depending upon WavePacer sales in 2000. Sales of Pulsecom's core multiplexing products (which are being retained by Hubbell) appear to have stabilized at an annual rate of $70-80 million and are generating strong double digit operating margins.
The Power Systems Segment also moved ahead in resolving recent problems. On a continuing operations basis, i.e. excluding first quarter 1999 contributions from the Kerite subsidiary divested in September of last year, order input improved by better than 20% year-over-year and sales rose by 8%. Total operating profit was below the prior year's level, but this segment - also under new management in 2000 - is expected to return to its traditional double-digit level of operating margin by mid-year.
Sales and operating profit comparisons for the Other Segment were strongly positive year-over-year as results at the Hipotronics unit continued to improve, the Haefely acquisition made in September of 1999 contributed to the quarter's results, and the Industrial Controls operation further improved in sales and operating profit margin.
A number of one-time events are also incorporated in the first quarter results. Reflecting estimated project costs in excess of that which was needed, Hubbell will return to earnings a portion of its current consolidation reserve which is almost wholly offset by a new charge for additional activities that are scheduled for completion in 2000. Additionally, gains on the disposal of a surplus facility and an investment are included in income.
Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as "expects", "projected", "scheduled", and "unanticipated". 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: achieving sales levels to fulfill revenue expectations; unexpected costs or charges, certain of which may be outside the control of the Company; general economic and business conditions; competition; successfully completing the Company's consolidation, streamlining, and reorganization program and other factors.
Hubbell Incorporated is an international manufacturer of quality electrical and electronic products for commercial, industrial, utility, and telecommunications markets. With $1.4 billion in annual revenues, Hubbell Incorporated operates manufacturing facilities in North America, Puerto Rico, Mexico, Switzerland, and the United Kingdom, participates in a joint ventures in Taiwan, and maintains sales offices in Malaysia, Hong King, South Korea, and the Middle East. The corporate headquarters is located in Orange, CT.
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data) unaudited
THREE MONTHS ENDED
MARCH 31,
-------------- ---------------
2000 1999
-------------- ---------------
Net Sales
Electrical $ 242.9 $ 253.1
Power 92.8 97.5
Other 25.0 16.9
-------------- ---------------
Total Net Sales 360.7 367.5
-------------- ---------------
Operating Profit
Electrical 34.4 38.1
Special Charge, net (1.6) -
Power 8.4 12.5
Special Charge, net 1.4 -
Other 1.8 1.2
-------------- ---------------
Total Operating
Profit 44.4 51.8
-------------- ---------------
Other income, net 3.0 1.8
-------------- ---------------
Income before income taxes 47.4 53.6
Provision for income taxes 12.3 13.9
-------------- ---------------
Net income $ 35.1 $ 39.7
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Earnings per share - basic $0.55 $0.61
Earnings per share - diluted $0.55 $0.60
Average number of shares
outstanding - basic 63,419 65,294
Average number of shares
outstanding - diluted 63,611 66,255