Press Release
« Back
Hubbell Reports Fourth Quarter and Full Year Results
ORANGE, Conn.--(BUSINESS WIRE)--Jan. 19, 2000--Hubbell
Incorporated (NYSE: HUBA, HUBB) today reported fourth quarter and full
year 1999 results. As the Company had previously noted in press
releases on October 12 and October 21, 1999, lower income from
operations for the second half of the year due primarily to
underperformance in the Telecommunications and Power segments reduced
the full year result to a level below that of 1998.
For the fourth quarter of 1999, the Company reported net income of $27.2 million and diluted earnings per share of $.42 compared to corresponding prior year of $42.2 million and $.63, respectively. Sales in the fourth quarter of 1999 were $343.3 million versus sales of $350.8 in the corresponding quarter of the prior year.
For the full year 1999, the Company reported net income of $145.8 million and diluted earnings per share of $2.21 as compared to the prior year's totals of $169.4 and $2.50, respectively. Sales for 1999 increased 2% to $1,451.8 million versus full year 1998 sales of $1,424.6 million.
Sales and profit totals for both the fourth quarter and full year 1999 were modestly impacted by a number of recent actions taken by Hubbell. These include:
The Company's earnings per share were also affected by Hubbell's continuing share repurchase program which reduced by 1.9 million the diluted average number of shares and share equivalents outstanding in both the fourth quarter and full year versus the average numbers for the prior year periods.
The primary reason for the earnings shortfall was underperformance in two of the Company's business platforms: Power and Telecommunications. In the Power segment, underperformance resulted from a series of unanticipated delays and the consequent additional costs in implementing a complex series of changes under the Company's previously announced streamlining program. These changes included the relocation of production and distribution facilities to lower cost sites, reorganization of the segment into a feeder plant/centralized distribution structure and the implementation of integrated business systems. The added costs of the delayed implementation reduced operating profit substantially. The Company expects to have these problems resolved by mid-year 2000 and to begin achieving the originally expected operational savings in the second half of the current year.
At Telecommunications, lower sales and operating profit generated by current product lines and a continuing high level of product development expense for new Digital Subscriber Loop (DSL) products resulted in a loss for the segment in the fourth quarter and full year 1999 of $7.4 million as compared to profits in the corresponding periods of the prior year of $1.1 million and $18.8 million, respectively. In July of the past year, the Company retained Lehman Brothers to explore strategic alternatives for Hubbell's Telecommunications operations; the Company is currently involved in negotiations for a prospective sale of its assets in the DSL technology with an announcement of its resolution expected shortly.
Hubbell's Electrical segment reported slightly higher fourth quarter sales but lower operating profit as trends noted in the third quarter of 1999 continued through year-end. Within the segment's mix of products, results were varied. Year-over-year comparisons for the fourth quarter and full year were positive in sales and operating profit for specification-grade wiring systems and lighting products. Sales and operating profit were lower in the remaining third of the segment because of reduced demand from petroleum industry customers for hazardous location products, continuing volume and price pressures impacting the Company's commodity product operations, and start-up costs for a new distribution facility.
Sales and operating profit were up for the Other segment in both the fourth quarter and full year. Positive year-over-year comparisons at the Hipotronics operation combined with the Haefely acquisition to more than outweigh the impact of lower demand from customers in basic industries such as steel and petrochemicals for the Company's industrial controls and equipment products.
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," 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; resolution of the Pulse Communications transaction on terms favorable to the company; general economic and business conditions; competition; 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, Singapore, and the United Kingdom, participates in joint ventures with partners in South America and Taiwan, and maintains sales offices in Malaysia, Hong Kong, South Korea, and the Middle East. The corporate headquarters is located in Orange, CT.
For the fourth quarter of 1999, the Company reported net income of $27.2 million and diluted earnings per share of $.42 compared to corresponding prior year of $42.2 million and $.63, respectively. Sales in the fourth quarter of 1999 were $343.3 million versus sales of $350.8 in the corresponding quarter of the prior year.
For the full year 1999, the Company reported net income of $145.8 million and diluted earnings per share of $2.21 as compared to the prior year's totals of $169.4 and $2.50, respectively. Sales for 1999 increased 2% to $1,451.8 million versus full year 1998 sales of $1,424.6 million.
Sales and profit totals for both the fourth quarter and full year 1999 were modestly impacted by a number of recent actions taken by Hubbell. These include:
| -- | Acquisition of Sterner Lighting (Eden Prairie, MN) in November, 1998. |
| -- | Acquisition of Chalmit Lighting (Glasgow, Scotland) in December of 1998. |
| -- | Acquisition of Chardon Electrical Components (Greenville, TN) in February, 1999. |
| -- | Acquisition of Haefely Test AG (Basel, Switzerland) in July, 1999. |
| -- | The sale of The Kerite Company subsidiary in September, 1999, which resulted in a one-time gain of $.10 per share which was reflected in third quarter 1999 results. |
The Company's earnings per share were also affected by Hubbell's continuing share repurchase program which reduced by 1.9 million the diluted average number of shares and share equivalents outstanding in both the fourth quarter and full year versus the average numbers for the prior year periods.
The primary reason for the earnings shortfall was underperformance in two of the Company's business platforms: Power and Telecommunications. In the Power segment, underperformance resulted from a series of unanticipated delays and the consequent additional costs in implementing a complex series of changes under the Company's previously announced streamlining program. These changes included the relocation of production and distribution facilities to lower cost sites, reorganization of the segment into a feeder plant/centralized distribution structure and the implementation of integrated business systems. The added costs of the delayed implementation reduced operating profit substantially. The Company expects to have these problems resolved by mid-year 2000 and to begin achieving the originally expected operational savings in the second half of the current year.
At Telecommunications, lower sales and operating profit generated by current product lines and a continuing high level of product development expense for new Digital Subscriber Loop (DSL) products resulted in a loss for the segment in the fourth quarter and full year 1999 of $7.4 million as compared to profits in the corresponding periods of the prior year of $1.1 million and $18.8 million, respectively. In July of the past year, the Company retained Lehman Brothers to explore strategic alternatives for Hubbell's Telecommunications operations; the Company is currently involved in negotiations for a prospective sale of its assets in the DSL technology with an announcement of its resolution expected shortly.
Hubbell's Electrical segment reported slightly higher fourth quarter sales but lower operating profit as trends noted in the third quarter of 1999 continued through year-end. Within the segment's mix of products, results were varied. Year-over-year comparisons for the fourth quarter and full year were positive in sales and operating profit for specification-grade wiring systems and lighting products. Sales and operating profit were lower in the remaining third of the segment because of reduced demand from petroleum industry customers for hazardous location products, continuing volume and price pressures impacting the Company's commodity product operations, and start-up costs for a new distribution facility.
Sales and operating profit were up for the Other segment in both the fourth quarter and full year. Positive year-over-year comparisons at the Hipotronics operation combined with the Haefely acquisition to more than outweigh the impact of lower demand from customers in basic industries such as steel and petrochemicals for the Company's industrial controls and equipment products.
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," 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; resolution of the Pulse Communications transaction on terms favorable to the company; general economic and business conditions; competition; 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, Singapore, and the United Kingdom, participates in joint ventures with partners in South America and Taiwan, and maintains sales offices in Malaysia, Hong Kong, South Korea, and the Middle East. The corporate headquarters is located in Orange, CT.
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF EARNINGS
(in millions, except per share date)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
1999 1998 1999 1998
Net sales $ 343.3 $ 350.8 $ 1,451.8 $ 1,424.6
Operating costs 305.6 295.7 1,266.2 1,198.5
-------- -------- --------- --------
Operating income 37.7 55.1 185.6 226.1
Other income
(expense), net (1.0) 1.1 11.4 4.4
-------- -------- --------- --------
Income before
income taxes 36.7 56.2 197.0 230.5
Provision for
income taxes 9.5 14.0 51.2 61.1
-------- -------- --------- --------
Net income $ 27.2 $ 42.2 $ 145.8 $ 169.4
======== ======== ========= ========
Earnings per
share - basic $0.42 $0.64 $2.24 $2.56
Earnings per
share - diluted $0.42 $0.63 $2.21 $2.50
Average number of
shares outstanding
- basic 64,533 65,686 64,951 66,160
Average number of
shares outstanding
- diluted 64,891 66,795 65,829 67,704