|Hubbell Reports Fourth Quarter, Full Year Results|
ORANGE, Conn.--(BUSINESS WIRE)--
Net sales in the fourth quarter of 2008 were
The results for the fourth quarter of 2008 include a
In the fourth quarter of 2008, the Company invested approximately
Net sales for the full year 2008 were
Cash flow from operations in 2008 was
"In the fourth quarter, we experienced a slowdown in orders reflective of the weakening economic environment and the financial markets crisis. Our net sales increased 6% in the quarter with acquisitions and selling price increases adding 6% and 4%, respectively. Unit volume was down approximately 1% as lower incoming orders were largely offset by a reduction in backlog. Additionally, unfavorable foreign currency translation reduced net sales by approximately 3%.
"In reviewing the full year results, I am particularly pleased that we were able to expand our full year operating margins by 100 basis points compared to 2007 despite unprecedented commodity cost increases due to our focus on pricing discipline, cost containment and productivity initiatives. In addition, we finished the full year 2008 with free cash flow, defined as operating cash flow less capital expenditures, equal to 121% of net income."
The comments and year-over-year percentages in this segment review are based on fourth quarter results in 2008 and 2007. The prior year amounts have been adjusted to reflect the Company's realigned reporting segments as reported in the first quarter of 2008.
Electrical segment net sales increased 1% year-over-year as selling
price increases, acquisitions and strong shipments of high voltage
products were largely offset by weaker residential product sales and
unfavorable foreign currency translation. The selling price increases
and acquisitions added approximately 4% and 3%, respectively, to net
sales in the fourth quarter of 2008. Electrical segment operating income
Hubbell's Power segment reported a 21% increase in net sales compared to the fourth quarter of 2007 principally due to the impact of acquisitions and selling price increases. Acquisitions and selling price increases added approximately 14% and 6%, respectively, to net sales in the fourth quarter of 2008. Operating income increased 19% in the fourth quarter of 2008 versus the same period last year due to selling price increases, productivity improvements and acquisitions.
SUMMARY & OUTLOOK
Mr. Powers commented, "Turning to 2009, we anticipate significant recessionary conditions in the U.S. and a slowdown in overall global demand. Hubbell's largest served market, non-residential construction, is forecasted to be down significantly. The residential construction market is still contracting and will likely be down at comparable percentages to 2008. The utility market is expected to be lower, with many utility companies delaying capital spending on transmission and substation related projects while distribution investments will continue to be hampered by the residential market decline. We expect the industrial markets to be weaker due to a slowdown in manufacturing production. Finally, while we would anticipate some benefit from any expected energy related stimulus package from the new administration, the timing and magnitude of such benefits remain to be seen."
Mr. Powers concluded, "While we finished 2008 on a strong note, we are preparing for a decrease in net sales and earnings in 2009. The forecasted market headwinds are well documented while the commodity and pricing dynamics are expected to remain highly volatile. Nevertheless, our focus and strategy remains largely unchanged. We will continue to carefully manage the cost price equation, reduce costs across our business, including lowering staffing levels, and move forward with our successful productivity programs. In addition, we will continue with our strategy of pursuing bolt-on acquisitions to enhance our portfolio. We also expect free cash flow to exceed net income and will maintain a conservative balance sheet."
Certain statements contained herein may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These include statements about capital resources,
performance and results of operations and are based on the Company's
reasonable current expectations. In addition, all statements regarding
anticipated growth or improvement in operating results, anticipated
market conditions, and economic recovery are forward-looking. These
statements may be identified by the use of forward-looking words or
phrases such as "improved," "leading," "improving," "continuing growth,"
"continued," "ranging," "contributing," "primarily," "plan," "expect,"
"anticipated," "expected," "expectations," "should result," "uncertain,"
"goals," "projected," "on track," "likely," and others. Such
forward-looking statements involve numerous assumptions, known and
unknown risks, uncertainties and other factors which may cause actual
and future performance or achievements of the Company to be materially
different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such factors
include, but are not limited to: achieving sales levels to fulfill
revenue expectations; unexpected costs or charges, certain of which may
be outside the control of the Company; anticipated benefit from any
expected energy related stimulus package; expected benefits of process
improvement and other lean initiatives; the expected benefit and effect
of the business information system initiative and restructuring
programs; the availability and costs of raw materials and purchased
components; realization of price increases; the ability to achieve
projected levels of efficiencies and cost reduction measures; general
economic and business conditions; competition; and other factors
described in our
HUBBELL INCORPORATEDCondensed Consolidated Statement of Income (in millions, except per share data) THREE MONTHS ENDED DECEMBER 31 TWELVE MONTHS ENDED DECEMBER 31 (UNAUDITED) (UNAUDITED) (UNAUDITED) 2008 2007 2008 2007 Net Sales $ 652.1 $ 614.7 $ 2,704.4 $ 2,533.9 Cost of goods 466.2 433.8 1,901.0 1,798.1 sold Selling & administrative 113.5 112.3 457.4 436.4 expenses Total Operating 72.4 68.6 346.0 299.4 Income Operating income as a % 11.1 % 11.2 % 12.8 % 11.8 % of Net Sales Interest (7.7 ) (3.7 ) (24.6 ) (15.2 ) expense, net Other (expense) (0.6 ) (0.7 ) (3.5 ) - income, net Income Before 64.1 64.2 317.9 284.2 Income Taxes Provision for 17.8 16.2 95.2 75.9 income taxes Net Income $ 46.3 $ 48.0 $ 222.7 $ 208.3 Earnings Per Share: Basic $ 0.83 $ 0.83 $ 3.97 $ 3.54 Diluted $ 0.82 $ 0.82 $ 3.94 $ 3.50 Average Shares Outstanding: Basic 55.9 57.8 56.0 58.8 Diluted 56.2 58.6 56.5 59.5
HUBBELL INCORPORATEDSegment Information (in millions) THREE MONTHS ENDED DECEMBER 31 TWELVE MONTHS ENDED DECEMBER 31 (UNAUDITED) (UNAUDITED) (UNAUDITED) 2008 2007 2008 2007 Net Sales Electrical $ 458.2 $ 455.1 $ 1,958.2 $ 1,897.3 Power 193.9 159.6 746.2 636.6 Total Net Sales $ 652.1 $ 614.7 $ 2,704.4 $ 2,533.9 Operating Income Electrical $ 44.7 $ 45.4 $ 227.3 $ 202.1 Power 27.7 23.2 118.7 97.3 Total Operating $ 72.4 $ 68.6 $ 346.0 $ 299.4 Income Operating Income as a % of Net Sales Electrical 9.8 % 10.0 % 11.6 % 10.7 % Power 14.3 % 14.5 % 15.9 % 15.3 % Total 11.1 % 11.2 % 12.8 % 11.8 %
HUBBELL INCORPORATEDCondensed Consolidated Balance Sheet (in millions) (UNAUDITED) DECEMBER 31, 2008 DECEMBER 31, 2007 ASSETS Cash and cash equivalents $ 178.2 $ 77.5 Accounts receivable, net 357.0 332.4 Inventories, net 335.2 322.9 Deferred taxes and other 48.7 55.2 TOTAL CURRENT ASSETS 919.1 788.0 Property, plant and equipment, net 349.1 327.1 Investments 35.1 39.2 Goodwill 584.6 466.6 Intangible assets and other 227.6 242.5 TOTAL ASSETS $ 2,115.5 $ 1,863.4 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term debt $ - $ 36.7 Accounts payable 168.3 154.0 Accrued salaries, wages and employee 61.5 58.6 benefits Dividends payable 19.7 19.2 Accrued insurance 46.3 46.7 Other accrued liabilities 129.2 104.3 TOTAL CURRENT LIABILITIES 425.0 419.5 Long-term debt 497.4 199.4 Other non-current liabilities 185.0 161.9 TOTAL LIABILITIES 1,107.4 780.8 SHAREHOLDERS' EQUITY 1,008.1 1,082.6 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,115.5 $ 1,863.4
HUBBELL INCORPORATEDCondensed Consolidated Statement Of Cash Flows (in millions) TWELVE MONTHS ENDED DECEMBER 31 (UNAUDITED) 2008 2007 Cash Flows From Operating Activities Net Income $ 222.7 $ 208.3 Depreciation and amortization 63.1 60.2 Stock-based compensation expense 12.5 12.7 Deferred income taxes 0.7 (3.7 ) Changes in working capital 22.1 94.1 Contributions to defined benefit pension plans (11.2 ) (28.4 ) Other, net 9.3 (8.0 ) Net cash provided by operating activities 319.2 335.2 Cash Flows From Investing Activities Capital expenditures (49.4 ) (55.9 ) Acquisition of businesses, net of cash acquired (267.4 ) (52.9 ) Net change in investments 4.2 (2.6 ) Other, net 6.2 5.7 Net cash used in investing activities (306.4 ) (105.7 ) Cash Flows From Financing Activities Borrowings/repayments of debt (36.7 ) 15.8 Issuance of long term debt 297.7 - Payment of dividends (76.9 ) (78.4 ) Acquisition of common shares (96.6 ) (193.1 ) Proceeds from exercise of stock options 8.1 48.0 Other, net (1.9 ) 7.3 Net cash provided by (used) in financing 93.7 (200.4 ) activities Effect of foreign exchange rate changes on cash (5.8 ) 3.1 and cash equivalents Increase in cash and cash equivalents 100.7 32.2 Cash and cash equivalents Beginning of period 77.5 45.3 End of period $ 178.2 $ 77.5
Hubbell Incorporated William R. Sperry, 203-799-4100 Source: Hubbell Incorporated