-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U8XxFtnHdrJHlE1P1GeBnEHaG1se+V2lcmxqI/nTTsLfUm/WZXoKqzB1rKkB7NQu gbJ6JGoa5IogvELtDpgDmw== 0000950123-96-006270.txt : 19961108 0000950123-96-006270.hdr.sgml : 19961108 ACCESSION NUMBER: 0000950123-96-006270 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961107 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUBBELL INC CENTRAL INDEX KEY: 0000048898 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 060397030 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02958 FILM NUMBER: 96656165 BUSINESS ADDRESS: STREET 1: 584 DERBY MILFORD RD CITY: ORANGE STATE: CT ZIP: 06477-4024 BUSINESS PHONE: 2037994100 MAIL ADDRESS: STREET 2: 584 DERBY MILFORD RD CITY: ORANGE STATE: CT ZIP: 06477-4024 FORMER COMPANY: FORMER CONFORMED NAME: HUBBELL HARVEY INC DATE OF NAME CHANGE: 19860716 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ TO _______________ Commission File Number 1-2958 HUBBELL INCORPORATED (Exact name of registrant as specified in its charter) STATE OF CONNECTICUT 06-0397030 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 584 DERBY MILFORD ROAD, ORANGE, CT 06477 (Address of principal executive offices) (Zip Code) (203) 799-4100 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- The number of shares of registrant's classes of common stock outstanding as of November 4, 1996 were: Class A ($.01 par value) 11,447,000 Class B ($.01 par value) 54,541,000 2 HUBBELL INCORPORATED PART I - FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET (UNAUDITED) (IN THOUSANDS)
September 30, 1996 December 31, 1995 ------------------ ----------------- ASSETS - ------ Current Assets: Cash and temporary cash investments $ 124,833 $ 86,984 Accounts receivable (net) 181,230 140,765 Inventories 238,779 236,384 Prepaid taxes 32,608 30,958 Other 3,373 5,015 ----------- ----------- TOTAL CURRENT ASSETS 580,823 500,106 Property, Plant and Equipment (net) 212,355 204,190 Other Assets: Investments 168,238 175,656 Purchase price in excess of net assets of companies acquired (net) 158,097 137,941 Property held as investment 8,958 8,329 Other 27,185 31,023 ----------- ----------- $ 1,155,656 $ 1,057,245 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Commercial paper and notes $ 18,635 $ --- Accounts payable 46,576 34,272 Accrued salaries, wages and employee benefits 27,591 26,079 Accrued income taxes 40,184 30,711 Dividends payable 17,157 15,475 Accrued restructuring charge 11,465 10,000 Other accrued liabilities 86,386 78,401 ----------- ----------- TOTAL CURRENT LIABILITIES 247,994 194,938 Long-Term Debt 99,442 102,096 Other Non-Current Liabilities 70,104 76,766 Deferred Income Taxes 17,940 16,107 Shareholders' Equity 720,176 667,338 ----------- ----------- $ 1,155,656 $ 1,057,245 =========== ===========
See notes to consolidated financial statements 2 3 HUBBELL INCORPORATED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 1996 1995 1996 1995 ---- ---- ---- ---- NET SALES $ 332,770 $ 286,968 $ 966,297 $ 860,408 Cost of goods sold 232,984 200,573 677,305 609,530 --------- --------- ---------- ---------- GROSS PROFIT 99,786 86,395 288,992 250,878 Selling & administrative expenses 48,527 43,408 143,593 128,768 --------- --------- ---------- ---------- OPERATING INCOME 51,259 42,987 145,399 122,110 --------- --------- ---------- ---------- OTHER INCOME (EXPENSE): Investment income 4,217 3,988 12,083 12,221 Interest expense (2,123) (1,949) (6,363) (6,532) Other income (expense), net (1,270) (1,601) (4,085) (4,256) ---------- --------- ---------- ---------- TOTAL OTHER INCOME, NET 824 438 1,635 1,433 --------- --------- --------- ---------- INCOME BEFORE INCOME TAXES 52,083 43,425 147,034 123,543 Provision for income taxes 15,104 11,725 42,640 33,357 --------- --------- --------- ---------- NET INCOME $ 36,979 $ 31,700 $ 104,394 $ 90,186 ========= ========= ========= ========== EARNINGS PER SHARE $ 0.55 $ 0.47 $ 1.55 $ 1.35 ========= ========= ========= ==========
See notes to consolidated financial statements. 3 4 HUBBELL INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, -------------- CASH FLOWS FROM OPERATING ACTIVITIES 1996 1995 - ------------------------------------ ---- ---- Net income $ 104,394 $ 90,186 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 32,814 29,923 Deferred income taxes 183 2,448 Changes in assets and liabilities, net of the effect of business acquisitions: (Increase)/Decrease in accounts receivable (29,485) (2,340) (Increase)/Decrease in inventories 7,003 (9,916) (Increase)/Decrease in other current assets 1,647 2,706 Increase/(Decrease) in current operating liabilities 27,825 (4,275) Increase/(Decrease) in restructuring accruals (6,948) (7,726) (Increase)/Decrease in other, net 4,678 9,921 -------- --------- Net cash provided by operating activities 142,111 110,927 -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES - ------------------------------------ Acquisition of businesses (31,365) --- Additions to property, plant and equipment (28,483) (27,896) Purchases of investments (4,936) (6,147) Repayments and sales of investments 12,378 36,693 Other, net 1,235 1,801 -------- --------- Net cash used in investing activities (51,171) 4,451 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES - ------------------------------------ Payment of dividends (48,112) (43,157) Commercial paper and notes - borrowings (repayments) --- (31,484) Redemption of industrial development bonds (2,700) --- Exercise of stock options 2,242 2,310 Acquisition of treasury shares (4,521) (5,792) --------- ---------- Net cash provided (used) in financing activities (53,091) (78,123) --------- ---------- Increase (Decrease) in cash and temporary cash investments 37,849 37,255 CASH AND TEMPORARY CASH INVESTMENTS - ----------------------------------- Beginning of period 86,984 38,865 -------- --------- End of period $124,833 $ 76,120 ======== =========
See notes to consolidated financial statements 4 5 HUBBELL INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (UNAUDITED) 1. Inventories are classified as follows: (in thousands)
SEPTEMBER 30, DECEMBER 31, 1996 1995 ---- ---- Raw Material $ 84,608 $ 81,253 Work-in-Process 75,347 64,117 Finished Goods 128,859 140,428 --------- --------- 288,814 285,798 Excess of current Production costs over LIFO cost basis 50,035 49,414 --------- --------- $ 238,779 $ 236,384 ========= ==========
2. Shareholders' Equity comprises: (in thousands)
SEPTEMBER 30, DECEMBER 31, 1996 1995 ---- ---- Common Stock, $.01 par value: ----------------------------- Class A-authorized 50,000,000 shares, outstanding 11,467,910 and 5,831,381 shares $ 115 $ 58 Class B-authorized 150,000,000 shares outstanding 54,489,681 and 27,110,456 shares 545 271 Additional paid-in-capital 435,299 437,908 Retained earnings 292,903 238,303 Unrealized holding gains (losses) on securities 107 74 Cumulative translation adjustments (8,793) (9,276) ---------- ---------- $ 720,176 $ 667,338 ========== ==========
5 6 HUBBELL INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (UNAUDITED) 3. On January 2, 1996, the Company acquired the assets of the Anderson Electrical Connectors business ("Anderson"). Anderson manufactures electrical connectors and associated hardware and tools for the electric utility industry with manufacturing facilities in Alabama and Tennessee. On January 31, 1996, the Company acquired all the outstanding stock of Gleason Reel Corp. ("Gleason") based in Mayville, Wisconsin. Gleason manufactures electric cable management products (including cable and hose reels, protective steel and nylon cable tracks and cable festooning hardware) and a line of ergonomic tool support systems. The businesses were acquired for cash of $31,365,000 and notes of $18,635,000 that mature in one year and were recorded under the purchase method of accounting. The costs of the acquired businesses has been allocated to assets acquired and liabilities assumed based on fair values with the residual amount assigned to goodwill, which is being amortized over forty years. The businesses have been included in the financial statements as of their respective acquisition date and had no material effect on the Company's financial position and reported earnings. 4. All share data has been adjusted to reflect the 2-for-1 stock split paid on August 9, 1996, to shareholders of record on July 17, 1996. 5. In the opinion of management, the information furnished in Part I-Financial Information on Form 10-Q reflects all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial statements for the periods indicated. 6. The results of operations for the three and nine months ended September 30, 1996 and 1995 are not necessarily indicative of the results to be expected for the full year. 6 7 HUBBELL INCORPORATED ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEPTEMBER 30, 1996 FINANCIAL CONDITION At September 30, 1996, the Company's financial position remained strong with working capital of $332.8 million and a current ratio of 2.3 to 1. Total borrowings at September 30, 1996, were $118.1 million, 16.4% of shareholders equity. Cash and temporary cash investments increased $37.8 million for the nine months ended September 30, 1996, as a result of cash provided from operating activities offset by the purchase of Anderson and Gleason, redemption of industrial development bonds and quarterly dividend payments. Net cash provided by operating activities reflects higher net income, continued emphasis on working capital management and funding of working capital for the recent acquisitions. Accounts receivable increased in line with higher sales. The increase in liabilities is principally due to the higher level of business activity, increased income taxes and accrual of interest for the ten year notes. The Company believes that currently available cash, borrowing facilities, and its ability to increase its credit lines if needed, combined with internally generated funds should be more than sufficient to fund capital expenditures as well as any increase in working capital that would be required to accommodate a higher level of business activity. RESULTS OF OPERATIONS Consolidated net sales increased 16% for the third quarter and 12% year-to-date on strong growth reported by Pulse Communications, Industrial Controls, Ohio Brass, and Premise Wiring combined with the acquisition of Anderson and Gleason in early 1996. Operating income increased 19% for the quarter and nine months on higher sales volume, improved operating efficiencies from the Company's restructuring program and the impact of the acquired businesses. Low voltage segment sales increased more than 6% for the respective periods on higher shipment of industrial controls, wiring device products and inclusion of Gleason. Operating income increased by 10% and 13%, respectively, on higher sales, improved operating efficiencies and inclusion of Gleason since its acquisition. High voltage segment sales increased more than 36% for the quarter and 25% for the nine months on continued growth for surge arresters and insulators combined with the sales of Anderson products. Segment operating income increased in line with sales. Other industry segment sales increased 16% for the third quarter and 12% year-to-date as almost all units reported higher sales with particularly strong increases for telecommunications and wire management products. Operating profits increased more than 20% for the respective periods on the improved volume of higher margin telecommunications products and improved operating efficiencies. 7 8 HUBBELL INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEPTEMBER 30, 1996 (CONTINUED) Sales through the Company's International units were 12% higher in the quarter and 5% higher than last year while operating profits increased more than 50% reflecting the improved profitability of the restructured Canadian and European operations. The effective income tax rate for 1996 is 29% versus 27% in 1995. The increase in the effective tax rate reflects a higher portion of domestic source income which is due in part to the recently completed acquisitions. Net income and earnings per share increased by 17%, respectively, for the quarter while for the first nine months the increases were 16% and 15%, respectively. The Company's restructuring program is proceeding according to management's plan. At September 30, 1996, the restructuring accrual balance was $11,465,000. Through September 30, 1996, cumulative costs charged to the restructuring accrual were $38,535,000 as follows (in thousands):
Personnel Plant & Equipment Costs Costs Relocation Disposal Total ----- ---------- -------- ----- 1993 $ 4,456 $ 2,794 $ --- $ 7,250 1994 7,550 2,036 5,225 14,811 1995 3,017 5,048 1,461 9,526 1996 Y-T-D 1,732 4,220 996 6,948 -------- -------- ------- -------- Cumulative $ 16,755 $ 14,098 $ 7,682 $ 38,535 ======== ======== ======= ========
= Personnel costs include non-cash charges for early retirement programs which have been reclassified to the Company's pension liability totaling $6,203,000 since inception of the restructuring program. 8 9 HUBBELL INCORPORATED PART II -- OTHER INFORMATION ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS NUMBER DESCRIPTION - ------ ----------- 11. Computation of Earnings Per Share 27. Financial Data Schedule (Electronic filings only) REPORTS ON FORM 8-K There were no reports on Form 8-K filed for the three months ended September 30, 1996. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HUBBELL INCORPORATED Dated: November 7, 1996 /s/ Harry B. Rowell, Jr. ---------------------------- ---------------------------- Harry B. Rowell, Jr. Executive Vice President (Chief Financial and Accounting Officer) 9 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 HUBBELL INCORPORATED COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 1996 1995 1996 1995 ---- ---- ---- ---- Net Income $36,979 $31,700 $104,394 $90,186 ======= ======= ======== ======= Weighted average number of common shares outstanding during the period 65,953 65,864 65,913 65,892 Common equivalent shares 1,259 926 1,222 792 ------- ------- -------- ------- Average number of shares outstanding 67,212 66,790 67,135 66,684 ======= ======= ======== ======= Earnings per Share $ 0.55 $ 0.47 $ 1.55 $ 1.35 ======= ======= ======== =======
Share data for all periods has been adjusted to reflect the 2-for-1 stock split paid on August 9, 1996, to shareholders of record on July 17, 1996. 10 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1996 SEP-30-1996 124,833 0 187,717 6,487 238,779 580,823 449,044 (236,689) 1,155,656 247,994 0 0 0 660 719,516 1,155,656 966,297 966,297 677,305 677,305 1,635 1,394 6,363 147,034 42,640 104,394 0 0 0 104,394 1.55 1.55
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