HUBBELL REPORTS THIRD QUARTER 2020 EARNINGS PER
DILUTED SHARE OF $1.96 AND ADJUSTED EARNINGS PER DILUTED SHARE OF
$2.30
- Q3 net sales -8% (organic -8%)
- Q3 diluted EPS of $1.96; adjusted diluted EPS of $2.30
- Includes restructuring and related investment ($0.07)
- Year to date free cash flow of $404 million, up 29%
year-over-year
- Raising FY20 diluted EPS guidance to $6.30-$6.45; adjusted EPS
of $7.45-$7.60
SHELTON, CT. (October 27, 2020) – Hubbell
Incorporated (NYSE: HUBB) today reported operating results for the
third quarter ended September 30, 2020.
"Hubbell delivered another quarter of operating margin expansion
and robust free cash flow generation, with strength in Electrical
T&D driven by secular grid modernization trends partially
offsetting continued softness in most other end markets,” said
Gerben W. Bakker, President and Chief Executive Officer. “We
continue to effectively manage through significant economic
uncertainty by focusing on what we can control, and our ongoing
operational transformation is producing sustainable productivity
savings. These benefits, along with lower operating expenses and
execution on price/cost, drove margin expansion in the quarter
despite volume declines. Additionally, we again generated robust
cash flow in the quarter and expect to deliver approximately $550
million in free cash flow for the full year.”
Mr. Bakker continued, “Grid hardening and modernization
initiatives, along with ongoing renewable energy trends, drove
strength in demand for T&D components and led to high single
digit organic growth in our Power Systems business. Power Systems
volumes also benefited from increased storm activity, which we
estimate contributed approximately 4 points to year-over-year
volume growth in the third quarter. As anticipated, Aclara revenues
continued to be affected by regulatory restrictions on certain
project deployments and installations as a result of the COVID-19
pandemic, although these headwinds moderated as the third quarter
progressed. While our Electrical volumes improved sequentially
relative to the second quarter, these end markets continued to face
broad-based weakness as expected. Residential lighting markets were
a notable exception, with double-digit organic growth in the
quarter driven by strength in e-commerce and retail channels.”
Mr. Bakker concluded, “Hubbell’s third quarter results
demonstrate strong execution in an uncertain environment. While we
remain cautious in our near-term volume outlook, we see continued
runway for operational improvement ahead of us, and are confident
in Hubbell's ability to drive consistent and differentiated
performance. Our high quality portfolio of electrical and utility
solutions with strong brand value and best in class reliability
positions us well for long-term success."
Certain terms used in this release, including
"Net debt", "Free Cash Flow", "Organic net sales", "Organic
growth", "Restructuring-related costs", "EBITDA", and certain
"adjusted" measures, are defined under the section entitled
"Non-GAAP Definitions." See page 8 for more information.
THIRD QUARTER FINANCIAL HIGHLIGHTS
The comments and year-over-year comparisons in
this segment review are based on third quarter results in 2020 and
2019.
Electrical segment net sales in the third
quarter of 2020 was $591 million compared to $689 million reported
in the third quarter of 2019. Organic sales declined 14% in the
quarter while the net impact of acquisitions and divestitures was
neutral. Operating income was $71 million, or 11.9% of net sales,
compared to $90 million, or 13.1% of net sales in the same period
of 2019. Adjusted operating income was $76 million, or 12.9% of net
sales, in the third quarter of 2020 as compared to $96 million, or
13.9% of net sales in the same period of the prior year. The
decreases in operating income and operating margin were primarily
due to lower volumes, partially offset by productivity savings from
restructuring and footprint optimization initiatives, lower
operating expenses, and price realization in excess of material
costs.
Utility Solutions segment net sales in the third
quarter of 2020 increased 0.5% to $517 million compared to $515
million reported in the third quarter of 2019. Organic sales were
approximately flat compared to the third quarter of 2019, with
acquisitions contributing approximately 1% growth and foreign
exchange a modest headwind. Power Systems sales increased 9% and
Aclara sales declined by 16%. Operating income was $92 million, or
17.8% of net sales, compared to $83 million, or 16.1% of net sales
in the same period of 2019. Adjusted operating income was $105
million, or 20.3% of net sales, in the third quarter of 2020 as
compared to $95 million, or 18.4% of net sales in the same period
of the prior year. Increases in operating income and operating
margin were primarily due to price realization in excess of
material costs, lower operating expenses and positive mix.
Adjusted third quarter 2020 results exclude
$0.25 of amortization of acquisition-related intangible assets as
well as $0.09 due to a pension settlement charge. Adjusted third
quarter 2019 results exclude $0.24 of amortization of
acquisition-related intangible assets, as well as a $0.37 gain on
divestiture of our Haefely high voltage test business and a $0.09
investment loss recorded in other expense.
Net cash provided from operating activities was
$152 million in the third quarter of 2020 versus $176 million in
the comparable period of 2019. Free cash flow was $135 million in
the third quarter of 2020 versus $151 million reported in the
comparable period of 2019.
SUMMARY & OUTLOOK
For the full year 2020, Hubbell now anticipates
earnings per diluted share in the range of $6.30-$6.45 and adjusted
diluted earnings per share ("Adjusted EPS") in the range of
$7.45-$7.60. Adjusted EPS excludes amortization of
acquisition-related intangible assets, which the Company expects to
be approximately $1.00 for the full year. The Company believes
Adjusted EPS is a useful measure of underlying performance in light
of our acquisition strategy.
The earnings per share and adjusted earnings per
share ranges are based on an adjusted tax rate of 22-23% and
continue to include approximately $0.40 per share of anticipated
restructuring and related investment. The ranges also incorporate
the impact of a previously completed divestiture and previously
completed acquisitions, the net of which is expected to be a modest
tailwind to 2020 adjusted EPS. The Company expects free cash flow
to be approximately $550 million in 2020.
CONFERENCE CALL
Hubbell will conduct an earnings conference call
to discuss its third quarter 2020 financial results today, October
27, 2020 at 10:00 a.m. ET. A live audio of the conference call will
be available and can be accessed by visiting Hubbell's "Investor
Relations - Events/Presentations" section of www.hubbell.com. Audio
replays of the recorded conference call will be available after the
call and can be accessed two hours after the conclusion of the
original conference call by calling (855) 859-2056 and using
passcode 7616809. The replay will remain available until November
27, 2020 at 11:59 p.m. ET. Audio replays will also be available at
the conclusion of the call by visiting www.hubbell.com and
selecting "Investors" from the options at the bottom of the page
and then "Events/Presentations" from the drop-down menu.
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, condition and
outlook, anticipated end markets, near-term volume, continued
opportunity for operational improvement, our ability to drive
consistent and differentiated performance, the impact of our high
quality portfolio of electrical solutions and utility solutions
with strong brand value and best in class reliability, and
anticipated effects of the COVID-19 pandemic and the responses
thereto, including the pandemic’s impact on general economic and
market conditions, as well as on our business, customers, end
markets, results of operations and financial condition and
anticipated actions to be taken by management to sustain the
Company during the economic uncertainty caused by the pandemic and
related governmental and business actions, and our projected
financial results set forth in “Summary & Outlook” above, as
well as other statements that are not strictly historic in nature.
In addition, all statements regarding anticipated growth, changes
in operating results, market conditions and economic conditions are
forward-looking, including those regarding the adverse impact of
the COVID-19 pandemic on the Company’s end markets. These
statements may be identified by the use of forward-looking words or
phrases such as “believe”, “expect”, “anticipate”, “plan”,
“estimated”, “target”, “should”, “could”, “may”, "subject
to", “continues”, “growing”, “projected”, “if”,
“potential”, “will likely be”, and similar words and phrases. Such
forward-looking statements are based on our current expectations
and involve numerous assumptions, known and unknown risks,
uncertainties and other factors which may cause actual and future
performance or the Company’s achievements 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: our ability to effectively
execute our business plan in light of the COVID-19 pandemic; the
effectiveness of the actions that we take to address the effects of
the COVID-19 pandemic; the outcome of contingencies or costs
compared to amounts provided for such contingencies, including
those with respect to pension withdrawal liabilities; achieving
sales levels to meet revenue expectations; unexpected costs or
charges, certain of which may be outside the Company’s control; the
effects of tariffs and other trade actions taken by the U.S. and
other countries; changes in product sales prices and material
costs; expected benefits of productivity improvements and cost
reduction actions; effects of unfavorable foreign currency exchange
rates; the impact of U.S. tax reform legislation; general economic
and business conditions; the impact of and the ability to complete
and integrate strategic acquisitions; the impact of certain
divestitures, including the sale of the Haefely business; 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, 2019 and Quarterly
Reports on Form 10-Q.About the Company
Hubbell Incorporated is a global manufacturer of
quality electrical products and utility solutions for a broad range
of applications in the Electrical and Utility Solutions segments.
With 2019 revenues of $4.6 billion, Hubbell Incorporated operates
manufacturing facilities in the United States and around the world.
The corporate headquarters is located in Shelton, CT.
Contact:
Dan Innamorato |
Hubbell Incorporated |
40 Waterview Drive |
P.O. Box 1000 |
Shelton, CT 06484 |
(475) 882-4000 |
|
|
|
|
#######
NON-GAAP DEFINITIONS
References to "adjusted" operating measures
exclude the impact of certain costs, gains or losses. Management
believes these adjusted operating measures provide useful
information regarding our underlying performance from period to
period and an understanding of our results of operations without
regard to items we do not consider a component of our core
operating performance. Adjusted operating measures are non-GAAP
measures, and include adjusted operating income, adjusted operating
margin, adjusted net income, adjusted net income available to
common shareholders, adjusted net income attributable to Hubbell,
adjusted earnings per diluted share, and adjusted EBITDA. These
non-GAAP measures exclude, where applicable:
- Amortization of all intangible assets associated with our
business acquisitions, including inventory step-up amortization
associated with those acquisitions. The intangible assets
associated with our business acquisitions arise from the allocation
of the purchase price using the acquisition method of accounting in
accordance with Accounting Standards Codification 805, “Business
Combinations.” These assets consist primarily of customer
relationships, developed technology, trademarks and tradenames, and
patents, as reported in Note 6—Goodwill and Other Intangible
Assets, under the heading “Total Definite-Lived Intangibles,”
within the Company’s audited consolidated financial statements set
forth in its Annual Report on Form 10-K for Fiscal Year Ended
December 31, 2019. The Company excludes these non-cash expenses
because we believe it (i) enhances management’s and investors’
ability to analyze underlying business performance, (ii)
facilitates comparisons of our financial results over multiple
periods, and (iii) provides more relevant comparisons of our
results with the results of other companies as the amortization
expense associated with these assets may fluctuate significantly
from period to period based on the timing, size, nature, and number
of acquisitions. Although we exclude amortization of these acquired
intangible assets and inventory step-up from our non-GAAP results,
we believe that it is important for investors to understand that
revenue generated, in part, from such intangibles is included
within revenue in determining adjusted net income attributable to
Hubbell Incorporated.
- A gain recognized in the third quarter of 2019 from the
disposition of a business,
- An investment loss recognized in the third quarter of 2019 and
reporting within Other income (expense), net in the Condensed
Consolidated Statement of Income,
- Pension charges including a settlement charge in the third
quarter of 2020 and a multi-employer pension charge in the second
quarter of 2019 to recognize certain additional liabilities
associated with the Company's participation and withdrawal from a
multi-employer pension plan.
- Income tax effects of the above adjustments which are
calculated using the statutory tax rate, taking into consideration
the nature of the item and the relevant taxing jurisdiction, unless
otherwise noted.
Adjusted EBITDA is a non-GAAP measure that
excludes the items noted above and also excludes the Other income
(expense), net, Interest expense, net, and Provision for income
taxes captions of the Condensed Consolidated Statement of Income,
as well as depreciation and amortization expense.
Net debt (defined as total debt less cash and
investments) to total capital is a non-GAAP measure that we believe
is a useful measure for evaluating the Company's financial leverage
and the ability to meet its funding needs.
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.
In connection with our restructuring and related
actions we have incurred restructuring costs as defined by U.S.
GAAP, which are primarily severance and employee benefits, asset
impairments, accelerated depreciation, as well as facility closure,
contract termination and certain pension costs that are directly
related to restructuring actions. We also incur
restructuring-related costs, which 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.
Organic net sales, a non-GAAP measure, represent
net sales according to U.S. GAAP, less net sales from acquisitions
and divestitures during the first twelve months of ownership or
divestiture, respectively, less the effect of fluctuations in net
sales from foreign currency exchange. The period-over-period effect
of fluctuations in net sales from foreign currency exchange is
calculated as the difference between local currency net sales of
the prior period translated at the current period exchange rate as
compared to the same local currency net sales translated at the
prior period exchange rate. We believe this measure provides
management and investors with a more complete understanding of
underlying operating results and trends of established, ongoing
operations by excluding the effect of acquisitions, dispositions
and foreign currency, as these activities can obscure underlying
trends. When comparing net sales growth between periods excluding
the effects of acquisitions, business dispositions and currency
exchange rates, those effects are different when comparing results
for different periods. For example, because net sales from
acquisitions are considered inorganic from the date we complete an
acquisition through the end of the first year following the
acquisition, net sales from such acquisition are reflected as
organic net sales thereafter.
There are limitations to the use of non-GAAP
measures. Non-GAAP measures do not present complete financial
results. We compensate for this limitation by providing a
reconciliation between our non-GAAP financial measures and the
respective most directly comparable financial measure calculated
and presented in accordance with GAAP. Because non-GAAP financial
measures are not standardized, it may not be possible to compare
these financial measures with other companies’ non-GAAP financial
measures having the same or similar names. These financial measures
should not be considered in isolation from, as substitutes for, or
alternative measures of, reported GAAP financial results, and
should be viewed in conjunction with the most comparable GAAP
financial measures and the provided reconciliations thereto. We
believe, however, that these non-GAAP financial measures, when
viewed together with our GAAP results and related reconciliations,
provide a more complete understanding of our business. We strongly
encourage investors to review our consolidated financial statements
and publicly filed reports in their entirety and not rely on any
single financial measure.
Reconciliations of each of these non-GAAP
measures to the most directly comparable GAAP measure can be found
in the tables below.
HUBBELL
INCORPORATEDCondensed Consolidated Statement of
Income(unaudited)(in millions,
except per share amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net sales |
$ |
1,108.6 |
|
|
|
$ |
1,204.0 |
|
|
|
$ |
3,148.1 |
|
|
|
$ |
3,487.7 |
|
|
Cost of goods sold |
779.0 |
|
|
|
842.0 |
|
|
|
2,224.5 |
|
|
|
2,461.0 |
|
|
Gross profit |
329.6 |
|
|
|
362.0 |
|
|
|
923.6 |
|
|
|
1,026.7 |
|
|
Selling & administrative expenses |
166.7 |
|
|
|
189.1 |
|
|
|
510.4 |
|
|
|
566.0 |
|
|
Operating income |
162.9 |
|
|
|
172.9 |
|
|
|
413.2 |
|
|
|
460.7 |
|
|
Operating income as a % of Net sales |
14.7 |
|
% |
|
14.4 |
|
% |
|
13.1 |
|
% |
|
13.2 |
|
% |
Gain on disposition of business |
— |
|
|
|
21.7 |
|
|
|
— |
|
|
|
21.7 |
|
|
Pension charge |
(6.6 |
) |
|
|
— |
|
|
|
(6.6 |
) |
|
|
(22.9 |
) |
|
Interest expense, net |
(15.0 |
) |
|
|
(17.0 |
) |
|
|
(45.8 |
) |
|
|
(51.7 |
) |
|
Other income (expense), net |
(2.3 |
) |
|
|
(9.6 |
) |
|
|
(8.9 |
) |
|
|
(18.2 |
) |
|
Total other expense, net |
(23.9 |
) |
|
|
(4.9 |
) |
|
|
(61.3 |
) |
|
|
(71.1 |
) |
|
Income before income taxes |
139.0 |
|
|
|
168.0 |
|
|
|
351.9 |
|
|
|
389.6 |
|
|
Provision for income taxes |
30.4 |
|
|
|
35.4 |
|
|
|
78.5 |
|
|
|
85.3 |
|
|
Net income |
108.6 |
|
|
|
132.6 |
|
|
|
273.4 |
|
|
|
304.3 |
|
|
Less: Net income attributable to noncontrolling
interest |
1.5 |
|
|
|
1.9 |
|
|
|
3.1 |
|
|
|
5.3 |
|
|
Net income attributable to Hubbell
Incorporated |
$ |
107.1 |
|
|
|
$ |
130.7 |
|
|
|
$ |
270.3 |
|
|
|
$ |
299.0 |
|
|
Earnings Per Share: |
|
|
|
|
|
|
|
Basic |
$ |
1.97 |
|
|
|
$ |
2.40 |
|
|
|
$ |
4.97 |
|
|
|
$ |
5.48 |
|
|
Diluted |
$ |
1.96 |
|
|
|
$ |
2.38 |
|
|
|
$ |
4.95 |
|
|
|
$ |
5.45 |
|
|
Cash dividends per common share |
$ |
0.91 |
|
|
|
$ |
0.84 |
|
|
|
$ |
2.73 |
|
|
|
$ |
2.52 |
|
|
HUBBELL
INCORPORATEDCondensed Consolidated Balance
Sheet(unaudited)(in
millions)
|
September 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
269.2 |
|
|
$ |
182.0 |
|
Short-term investments |
9.0 |
|
|
14.2 |
|
Account receivable (net of allowances of $14.7 and
$7.7) |
711.4 |
|
|
683.0 |
|
Inventories, net |
584.9 |
|
|
633.0 |
|
Other current assets |
65.9 |
|
|
62.0 |
|
TOTAL CURRENT ASSETS |
1,640.4 |
|
|
1,574.2 |
|
Property, plant and equipment, net |
485.3 |
|
|
505.2 |
|
Investments |
60.4 |
|
|
55.7 |
|
Goodwill |
1,813.4 |
|
|
1,811.8 |
|
Other intangible assets, net |
724.0 |
|
|
781.5 |
|
Other long-term assets |
153.6 |
|
|
174.6 |
|
TOTAL ASSETS |
$ |
4,877.1 |
|
|
$ |
4,903.0 |
|
LIABILITIES AND EQUITY |
|
|
|
Short-term debt and current portion of long-term
debt |
$ |
21.9 |
|
|
$ |
65.4 |
|
Accounts payable |
387.6 |
|
|
347.7 |
|
Accrued salaries, wages and employee
benefits |
78.8 |
|
|
101.5 |
|
Accrued insurance |
72.2 |
|
|
68.1 |
|
Other accrued liabilities |
232.2 |
|
|
262.2 |
|
TOTAL CURRENT LIABILITIES |
792.7 |
|
|
844.9 |
|
Long-term debt |
1,436.3 |
|
|
1,506.0 |
|
Other non-current liabilities |
617.1 |
|
|
591.6 |
|
TOTAL LIABILITIES |
2,846.1 |
|
|
2,942.5 |
|
Hubbell Incorporated Shareholders’ Equity |
2,016.8 |
|
|
1,947.1 |
|
Noncontrolling interest |
14.2 |
|
|
13.4 |
|
TOTAL EQUITY |
2,031.0 |
|
|
1,960.5 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
4,877.1 |
|
|
$ |
4,903.0 |
|
HUBBELL
INCORPORATEDCondensed Consolidated Statement of
Cash Flows(unaudited)(in
millions)
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
Cash Flows From Operating Activities |
|
|
|
Net income attributable to Hubbell
Incorporated |
$ |
270.3 |
|
|
|
$ |
299.0 |
|
|
Depreciation and amortization |
117.0 |
|
|
|
111.1 |
|
|
Stock-based compensation expense |
20.0 |
|
|
|
13.5 |
|
|
Gain on disposition of business |
— |
|
|
|
(21.7 |
) |
|
Pension charge |
6.6 |
|
|
|
22.9 |
|
|
Provision for bad debt expense |
8.3 |
|
|
|
0.8 |
|
|
Deferred income taxes |
(4.3 |
) |
|
|
(2.9 |
) |
|
Accounts receivable, net |
(42.1 |
) |
|
|
(67.5 |
) |
|
Inventories, net |
45.1 |
|
|
|
(23.4 |
) |
|
Accounts payable |
45.0 |
|
|
|
30.6 |
|
|
Current liabilities |
(44.8 |
) |
|
|
(2.4 |
) |
|
Contributions to defined benefit pension
plans |
(2.8 |
) |
|
|
(0.3 |
) |
|
Other, net |
37.3 |
|
|
|
25.4 |
|
|
Net cash provided by operating activities |
455.6 |
|
|
|
385.1 |
|
|
Cash Flows From Investing Activities |
|
|
|
Capital expenditures |
(51.7 |
) |
|
|
(72.6 |
) |
|
Proceeds from disposal of business, net of
cash |
— |
|
|
|
33.4 |
|
|
Acquisition of businesses, net of cash
acquired |
(2.0 |
) |
|
|
(5.0 |
) |
|
Net change in investments |
2.2 |
|
|
|
5.9 |
|
|
Other, net |
5.1 |
|
|
|
3.8 |
|
|
Net cash used in investing activities |
(46.4 |
) |
|
|
(34.5 |
) |
|
Cash Flows From Financing Activities |
|
|
|
Long-term debt issuance (repayment), net |
(106.3 |
) |
|
|
(18.8 |
) |
|
Short-term debt borrowings (repayments), net |
(9.0 |
) |
|
|
(26.6 |
) |
|
Payment of dividends |
(148.2 |
) |
|
|
(137.1 |
) |
|
Repurchase of common stock |
(41.3 |
) |
|
|
(35.0 |
) |
|
Other, net |
(11.3 |
) |
|
|
(20.2 |
) |
|
Net cash (used) provided by financing
activities |
(316.1 |
) |
|
|
(237.7 |
) |
|
Effect of exchange rate changes on cash and cash
equivalents |
(5.9 |
) |
|
|
(1.9 |
) |
|
Increase in cash and cash equivalents |
87.2 |
|
|
|
111.0 |
|
|
Cash and cash equivalents |
|
|
|
Beginning of period |
182.0 |
|
|
|
189.0 |
|
|
End of period |
$ |
269.2 |
|
|
|
$ |
300.0 |
|
|
HUBBELL
INCORPORATEDEarnings Per Share
(unaudited)(in millions, except per share
amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
|
Change |
Net income attributable to Hubbell (GAAP
measure) |
$ |
107.1 |
|
|
|
$ |
130.7 |
|
|
|
(18 |
) |
% |
|
$ |
270.3 |
|
|
|
$ |
299.0 |
|
|
|
(10 |
) |
% |
Amortization of acquisition-related intangible
assets |
18.5 |
|
|
|
17.5 |
|
|
|
|
|
56.6 |
|
|
|
53.8 |
|
|
|
|
Gain on disposition of business |
— |
|
|
|
(21.7 |
) |
|
|
|
|
— |
|
|
|
(21.7 |
) |
|
|
|
Pension charge |
6.6 |
|
|
|
— |
|
|
|
|
|
6.6 |
|
|
|
22.9 |
|
|
|
|
Loss on investment |
— |
|
|
|
5.0 |
|
|
|
|
|
— |
|
|
|
5.0 |
|
|
|
|
Total pre-tax adjustments to net income |
$ |
25.1 |
|
|
|
$ |
0.8 |
|
|
|
|
|
$ |
63.2 |
|
|
|
$ |
60.0 |
|
|
|
|
Income tax effects |
6.3 |
|
|
|
3.2 |
|
|
|
|
|
15.9 |
|
|
|
18.2 |
|
|
|
|
Adjusted Net Income |
$ |
125.9 |
|
|
|
$ |
128.3 |
|
|
|
(2 |
) |
% |
|
$ |
317.6 |
|
|
|
$ |
340.8 |
|
|
|
(7 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Hubbell (GAAP
measure) |
$ |
107.1 |
|
|
|
$ |
130.7 |
|
|
|
|
|
$ |
270.3 |
|
|
|
$ |
299.0 |
|
|
|
|
Less: Earnings allocated to participating
securities |
(0.4 |
) |
|
|
(0.5 |
) |
|
|
|
|
(1.0 |
) |
|
|
(1.2 |
) |
|
|
|
Net income available to common shareholders (GAAP measure)
[a] |
$ |
106.7 |
|
|
|
$ |
130.2 |
|
|
|
(18 |
) |
% |
|
$ |
269.3 |
|
|
|
$ |
297.8 |
|
|
|
(10 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income |
$ |
125.9 |
|
|
|
$ |
128.3 |
|
|
|
|
|
$ |
317.6 |
|
|
|
$ |
340.8 |
|
|
|
|
Less: Earnings allocated to participating
securities |
(0.5 |
) |
|
|
(0.5 |
) |
|
|
|
|
(1.1 |
) |
|
|
(1.3 |
) |
|
|
Adjusted net income available to common shareholders
[b] |
$ |
125.4 |
|
|
|
$ |
127.8 |
|
|
|
(2 |
) |
% |
|
$ |
316.5 |
|
|
|
$ |
339.5 |
|
|
|
(7 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
Average number of common shares outstanding
[c] |
54.2 |
|
|
|
54.3 |
|
|
|
|
|
54.1 |
|
|
|
54.4 |
|
|
|
|
Potential dilutive shares |
0.3 |
|
|
|
0.3 |
|
|
|
|
|
0.3 |
|
|
|
0.3 |
|
|
|
|
Average number of diluted shares outstanding
[d] |
54.5 |
|
|
|
54.6 |
|
|
|
|
|
54.4 |
|
|
|
54.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (GAAP measure): |
|
|
|
|
|
|
|
|
|
|
|
Basic [a] / [c] |
$ |
1.97 |
|
|
|
$ |
2.40 |
|
|
|
|
|
$ |
4.97 |
|
|
|
$ |
5.48 |
|
|
|
|
Diluted [a] / [d] |
$ |
1.96 |
|
|
|
$ |
2.38 |
|
|
|
(18 |
) |
% |
|
$ |
4.95 |
|
|
|
$ |
5.45 |
|
|
|
(9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per diluted share [b] /
[d] |
$ |
2.30 |
|
|
|
$ |
2.34 |
|
|
|
(2 |
) |
% |
|
$ |
5.81 |
|
|
|
$ |
6.21 |
|
|
|
(6 |
) |
% |
HUBBELL
INCORPORATEDSegment
Information(unaudited)(in
millions)
Hubbell
Incorporated |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Net Sales
[a] |
$ |
1,108.6 |
|
|
$ |
1,204.0 |
|
|
(8 |
) |
% |
|
$ |
3,148.1 |
|
|
$ |
3,487.7 |
|
|
(10 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
162.9 |
|
|
$ |
172.9 |
|
|
(6 |
) |
% |
|
$ |
413.2 |
|
|
$ |
460.7 |
|
|
(10 |
) |
% |
Amortization of acquisition-related intangible
assets |
18.5 |
|
|
17.5 |
|
|
|
|
56.6 |
|
|
53.8 |
|
|
|
Adjusted operating income [c] |
$ |
181.4 |
|
|
$ |
190.4 |
|
|
(5 |
) |
% |
|
$ |
469.8 |
|
|
$ |
514.5 |
|
|
(9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
14.7 |
% |
|
14.4 |
% |
|
+30 bps |
|
13.1 |
% |
|
13.2 |
% |
|
-10 bps |
Adjusted operating margin [c] / [a] |
16.4 |
% |
|
15.8 |
% |
|
+60 bps |
|
14.9 |
% |
|
14.8 |
% |
|
+10 bps |
Electrical
segment |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Net Sales [a] |
$ |
591.2 |
|
|
$ |
689.3 |
|
|
(14 |
) |
% |
|
$ |
1,704.4 |
|
|
$ |
2,007.7 |
|
|
(15 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
70.6 |
|
|
$ |
90.2 |
|
|
(22 |
) |
% |
|
$ |
185.7 |
|
|
$ |
246.8 |
|
|
(25 |
) |
% |
Amortization of acquisition-related intangible
assets |
5.8 |
|
|
5.6 |
|
|
|
|
18.0 |
|
|
17.0 |
|
|
|
Adjusted operating income [c] |
$ |
76.4 |
|
|
$ |
95.8 |
|
|
(20 |
) |
% |
|
$ |
203.7 |
|
|
$ |
263.8 |
|
|
(23 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
11.9 |
% |
|
13.1 |
% |
|
-120 bps |
|
10.9 |
% |
|
12.3 |
% |
|
-140 bps |
Adjusted operating margin [c] / [a] |
12.9 |
% |
|
13.9 |
% |
|
-100 bps |
|
12.0 |
% |
|
13.1 |
% |
|
-110 bps |
Utility Solutions
segment |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Net Sales [a] |
$ |
517.4 |
|
|
$ |
514.7 |
|
|
1 |
% |
|
$ |
1,443.7 |
|
|
$ |
1,480.0 |
|
|
(2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
92.3 |
|
|
$ |
82.7 |
|
|
12 |
% |
|
$ |
227.5 |
|
|
$ |
213.9 |
|
|
6 |
|
% |
Amortization of acquisition-related intangible
assets |
12.7 |
|
|
11.9 |
|
|
|
|
38.6 |
|
|
36.8 |
|
|
|
Adjusted operating income [c] |
$ |
105.0 |
|
|
$ |
94.6 |
|
|
11 |
% |
|
$ |
266.1 |
|
|
$ |
250.7 |
|
|
6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
17.8 |
% |
|
16.1 |
% |
|
+170 bps |
|
15.8 |
% |
|
14.5 |
% |
|
+130 bps |
Adjusted operating margin [c] / [a] |
20.3 |
% |
|
18.4 |
% |
|
+190 bps |
|
18.4 |
% |
|
16.9 |
% |
|
+150 bps |
HUBBELL
INCORPORATEDOrganic Net Sales
Growth(unaudited)(in millions and
percentage change)
Hubbell
Incorporated |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
Inc/(Dec)% |
|
2019 |
|
Inc/(Dec)% |
|
2020 |
|
Inc/(Dec)% |
|
2019 |
|
Inc/(Dec)% |
Net sales growth (GAAP
measure) |
$ |
(95.4 |
) |
|
|
(7.9 |
) |
|
|
$ |
24.3 |
|
|
|
2.1 |
|
|
|
$ |
(339.6 |
) |
|
|
(9.7 |
) |
|
|
$ |
150.1 |
|
|
|
4.5 |
|
|
Impact of
acquisitions |
11.3 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
33.2 |
|
|
|
1.0 |
|
|
|
51.4 |
|
|
|
1.5 |
|
|
Impact of
divestitures |
(4.5 |
) |
|
|
(0.4 |
) |
|
|
(5.6 |
) |
|
|
(0.5 |
) |
|
|
(20.3 |
) |
|
|
(0.6 |
) |
|
|
(5.6 |
) |
|
|
(0.1 |
) |
|
Foreign currency
exchange |
(3.4 |
) |
|
|
(0.2 |
) |
|
|
(3.3 |
) |
|
|
(0.2 |
) |
|
|
(11.3 |
) |
|
|
(0.3 |
) |
|
|
(15.5 |
) |
|
|
(0.5 |
) |
|
Organic net sales
growth |
$ |
(98.8 |
) |
|
|
(8.2 |
) |
|
|
$ |
33.2 |
|
|
|
2.8 |
|
|
|
$ |
(341.2 |
) |
|
|
(9.8 |
) |
|
|
$ |
119.8 |
|
|
|
3.6 |
|
|
Electrical
segment |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
Inc/(Dec)% |
|
2019 |
|
Inc/(Dec)% |
|
2020 |
|
Inc/(Dec)% |
|
2019 |
|
Inc/(Dec)% |
Net sales growth (GAAP
measure) |
$ |
(98.1 |
) |
|
|
(14.2 |
) |
|
|
$ |
1.9 |
|
|
|
0.3 |
|
|
|
$ |
(303.3 |
) |
|
|
(15.1 |
) |
|
|
$ |
13.6 |
|
|
|
0.7 |
|
|
Impact of
acquisitions |
4.4 |
|
|
|
0.6 |
|
|
|
— |
|
|
|
— |
|
|
|
12.4 |
|
|
|
0.6 |
|
|
|
— |
|
|
|
— |
|
|
Impact of
divestitures |
(4.5 |
) |
|
|
(0.6 |
) |
|
|
(5.6 |
) |
|
|
(0.8 |
) |
|
|
(20.3 |
) |
|
|
(1.0 |
) |
|
|
(5.6 |
) |
|
|
(0.2 |
) |
|
Foreign currency
exchange |
(0.8 |
) |
|
|
(0.1 |
) |
|
|
(1.7 |
) |
|
|
(0.2 |
) |
|
|
(4.2 |
) |
|
|
(0.2 |
) |
|
|
(9.0 |
) |
|
|
(0.5 |
) |
|
Organic net sales
growth |
$ |
(97.2 |
) |
|
|
(14.1 |
) |
|
|
$ |
9.2 |
|
|
|
1.3 |
|
|
|
$ |
(291.2 |
) |
|
|
(14.5 |
) |
|
|
$ |
28.2 |
|
|
|
1.4 |
|
|
Utility Solutions
segment |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
Inc/(Dec)% |
|
2019 |
|
Inc/(Dec)% |
|
2020 |
|
Inc/(Dec)% |
|
2019 |
|
Inc/(Dec)% |
Net sales growth (GAAP
measure) |
$ |
2.7 |
|
|
|
0.5 |
|
|
|
$ |
22.4 |
|
|
|
4.6 |
|
|
|
$ |
(36.3 |
) |
|
|
(2.5 |
) |
|
|
$ |
136.5 |
|
|
|
10.2 |
|
|
Impact of
acquisitions |
6.9 |
|
|
|
1.3 |
|
|
|
— |
|
|
|
— |
|
|
|
20.8 |
|
|
|
1.4 |
|
|
|
51.4 |
|
|
|
3.8 |
|
|
Impact of
divestitures |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Foreign currency
exchange |
(2.6 |
) |
|
|
(0.5 |
) |
|
|
(1.6 |
) |
|
|
(0.3 |
) |
|
|
(7.1 |
) |
|
|
(0.5 |
) |
|
|
(6.5 |
) |
|
|
(0.4 |
) |
|
Organic net sales
growth |
$ |
(1.6 |
) |
|
|
(0.3 |
) |
|
|
$ |
24.0 |
|
|
|
4.9 |
|
|
|
$ |
(50.0 |
) |
|
|
(3.4 |
) |
|
|
$ |
91.6 |
|
|
|
6.8 |
|
|
HUBBELL
INCORPORATEDAdjusted
EBITDA(unaudited)(in
millions)
|
Three Months Ended September 30, |
|
2020 |
|
2019 |
|
Change |
Net
income |
$ |
108.6 |
|
|
$ |
132.6 |
|
|
|
(18 |
) |
% |
Provision for income
taxes |
30.4 |
|
|
35.4 |
|
|
|
|
Interest expense,
net |
15.0 |
|
|
17.0 |
|
|
|
|
Other expense,
net |
2.3 |
|
|
9.6 |
|
|
|
|
Depreciation and
amortization |
39.4 |
|
|
37.4 |
|
|
|
|
Pension
charge |
6.6 |
|
|
— |
|
|
|
|
Gain on disposition of
business |
— |
|
|
(21.7 |
) |
|
|
|
Subtotal |
93.7 |
|
|
77.7 |
|
|
|
|
Adjusted
EBITDA |
$ |
202.3 |
|
|
$ |
210.3 |
|
|
|
(4 |
) |
% |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
Change |
Net
income |
$ |
273.4 |
|
|
$ |
304.3 |
|
|
|
(10 |
) |
% |
Provision for income
taxes |
78.5 |
|
|
85.3 |
|
|
|
|
Interest expense,
net |
45.8 |
|
|
51.7 |
|
|
|
|
Other expense,
net |
8.9 |
|
|
18.2 |
|
|
|
|
Depreciation and
amortization |
117.0 |
|
|
111.1 |
|
|
|
|
Pension
charge |
6.6 |
|
|
22.9 |
|
|
|
|
Gain on disposition of
business |
— |
|
|
(21.7 |
) |
|
|
|
Subtotal |
256.8 |
|
|
267.5 |
|
|
|
|
Adjusted
EBITDA |
$ |
530.2 |
|
|
$ |
571.8 |
|
|
|
(7 |
) |
% |
HUBBELL
INCORPORATEDRestructuring and Related Costs
Included in Consolidated
Results(unaudited)(in millions,
except per share amounts)
|
Three Months Ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Costs of goods sold |
|
S&A expense |
|
Total |
Restructuring costs |
$ |
3.2 |
|
|
$ |
4.0 |
|
|
$ |
0.1 |
|
|
$ |
1.2 |
|
|
$ |
3.3 |
|
|
$ |
5.2 |
|
Restructuring related costs |
0.3 |
|
|
0.7 |
|
|
1.2 |
|
|
1.2 |
|
|
1.5 |
|
|
1.9 |
|
Restructuring and related costs (non-GAAP
measure) |
$ |
3.5 |
|
|
$ |
4.7 |
|
|
$ |
1.3 |
|
|
$ |
2.4 |
|
|
$ |
4.8 |
|
|
$ |
7.1 |
|
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Costs of goods sold |
|
S&A expense |
|
Total |
Restructuring costs |
$ |
10.2 |
|
|
$ |
11.3 |
|
|
$ |
2.3 |
|
|
$ |
4.3 |
|
|
$ |
12.5 |
|
|
$ |
15.6 |
|
Restructuring related costs |
1.6 |
|
|
0.9 |
|
|
2.5 |
|
|
1.7 |
|
|
4.1 |
|
|
2.6 |
|
Restructuring and related costs (non-GAAP
measure) |
$ |
11.8 |
|
|
$ |
12.2 |
|
|
$ |
4.8 |
|
|
$ |
6.0 |
|
|
$ |
16.6 |
|
|
$ |
18.2 |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Restructuring and related costs included in Cost of
goods sold |
|
|
|
|
|
|
|
Electrical |
$ |
2.2 |
|
|
$ |
3.4 |
|
|
$ |
7.0 |
|
|
$ |
9.3 |
|
Utility Solutions |
1.3 |
|
|
1.3 |
|
|
4.8 |
|
|
2.9 |
|
Total |
$ |
3.5 |
|
|
$ |
4.7 |
|
|
$ |
11.8 |
|
|
$ |
12.2 |
|
Restructuring and
related costs included in Selling & administrative
expenses |
|
|
|
|
|
|
|
Electrical |
$ |
0.5 |
|
|
$ |
2.4 |
|
|
$ |
3.5 |
|
|
$ |
4.4 |
|
Utility Solutions |
0.8 |
|
|
— |
|
|
1.3 |
|
|
1.6 |
|
Total |
$ |
1.3 |
|
|
$ |
2.4 |
|
|
$ |
4.8 |
|
|
$ |
6.0 |
|
|
|
|
|
|
|
|
|
Impact on income before income taxes |
$ |
4.8 |
|
|
$ |
7.1 |
|
|
$ |
16.6 |
|
|
$ |
18.2 |
|
Impact on Net income available to Hubbell common
shareholders |
3.7 |
|
|
5.3 |
|
|
12.6 |
|
|
13.7 |
|
Impact on Diluted earnings per share |
$ |
0.07 |
|
|
$ |
0.10 |
|
|
$ |
0.23 |
|
|
$ |
0.25 |
|
HUBBELL
INCORPORATEDAdditional Non-GAAP Financial
Measures(unaudited)(in
millions)
Ratios of Total Debt to Total Capital and Net Debt to
Total Capital
|
September 30, 2020 |
|
December 31, 2019 |
Total Debt |
$ |
1,458.2 |
|
|
$ |
1,571.4 |
|
Total Hubbell Shareholders’ Equity |
2,016.8 |
|
|
1,947.1 |
|
Total Capital |
$ |
3,475.0 |
|
|
$ |
3,518.5 |
|
Total Debt to Total Capital |
42 |
% |
|
45 |
% |
Less: Cash and Investments |
$ |
338.6 |
|
|
$ |
251.9 |
|
Net Debt |
$ |
1,119.6 |
|
|
$ |
1,319.5 |
|
Net Debt to Total Capital |
32 |
% |
|
38 |
% |
Free Cash Flow Reconciliation
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net cash provided by operating activities |
$ |
151.9 |
|
|
|
$ |
175.5 |
|
|
|
$ |
455.6 |
|
|
|
$ |
385.1 |
|
|
Less: Capital
expenditures |
(16.7 |
) |
|
|
(24.9 |
) |
|
|
(51.7 |
) |
|
|
(72.6 |
) |
|
Free cash flow |
$ |
135.2 |
|
|
|
$ |
150.6 |
|
|
|
$ |
403.9 |
|
|
|
$ |
312.5 |
|
|
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