HUBBELL REPORTS SECOND QUARTER 2023 RESULTS
- Q2 diluted EPS from
continuing operations of $3.82; adjusted diluted EPS from
continuing operations of $4.07
- Q2 net sales +9%
(organic +6%, acquisitions +3%)
- Operating margin
expansion of 590 bps; adjusted operating margin expansion of 580
bps
- Raise FY23 diluted
EPS from continuing operations to $13.75-$14.25; adjusted diluted
EPS of $14.75-$15.25
Hubbell Incorporated (NYSE: HUBB) today reported
operating results for the second quarter ended June 30,
2023.
"Hubbell delivered another quarter of strong
operating performance," said Gerben Bakker, Chairman, President and
CEO. “As grid modernization and electrification continue to drive
investment in critical infrastructure, Hubbell’s portfolio of
solutions is uniquely positioned to serve the evolving needs of our
utility and electrical customers. We continued to execute
effectively for our shareholders in the second quarter, delivering
9% sales growth and operating profit growth of approximately
50%.”
Mr. Bakker continued, “In Utility Solutions,
robust backlog supported continued growth in T&D Components,
while improved availability of semiconductors supported accelerated
growth in Communications & Controls in the quarter. Demand
remains strong across our utility businesses as utilities actively
invest to harden, upgrade and modernize grid infrastructure. In
Electrical Solutions, industrial end market growth was solid driven
by domestic manufacturing activity, along with continued strength
in renewables and datacenter verticals. Channel inventory
management continued to impact commercial facing markets as
anticipated, and residential markets remained soft.”
Mr. Bakker concluded, “Hubbell’s leading
positions in attractive markets have enabled the Company to deliver
exceptional performance through the first half of 2023. Continued
execution on price, cost and productivity provides solid visibility
to an improved full year outlook, and we intend to accelerate our
investment levels in the second half of 2023 to support long-term
customer needs while driving attractive shareholder returns.”
Certain terms used in this release, including
"net debt", "free cash flow", "organic net sales", "organic net
sales growth", "restructuring-related costs", "Adjusted EBITDA",
and certain other "adjusted" measures, are defined under the
section entitled "Non-GAAP Definitions." See page 8 for more
information.
SECOND QUARTER FINANCIAL
HIGHLIGHTS
The comments and year-over-year comparisons in
this segment review are based on second quarter results in 2023 and
2022.
Utility Solutions segment net sales in the
second quarter of 2023 increased 14% to $831 million compared to
$729 million reported in the second quarter of 2022. Organic net
sales increased 13% in the quarter while acquisitions added 1%.
Total Utility T&D Components net sales increased approximately
13% and Utility Communications and Controls net sales increased
approximately 16%. Operating income was $200 million, or 24.0% of
net sales, in the second quarter of 2023 as compared to $111
million, or 15.3% of net sales in the same period of 2022. Adjusted
operating income was $213 million, or 25.6% of net sales, in the
second quarter of 2023 as compared to $125 million, or 17.2%
of net sales in the same period of the prior year. Increases in
operating income and operating margin were primarily due to price
realization, lower raw material costs, improved productivity,
volume growth and favorable product mix, partially offset by
non-material cost inflation and increased investment.
Electrical Solutions segment net sales in the
second quarter of 2023 increased 1% to $535 million compared to the
second quarter of 2022. Organic net sales decreased 4% in the
quarter while acquisitions added 5%. Operating income was $88
million, or 16.5% of net sales, compared to $79 million, or 15.0%
of net sales in the same period of 2022. Adjusted operating income
was $93 million, or 17.3% of net sales, in the second quarter of
2023 as compared to $83 million, or 15.7% of net sales in the same
period of the prior year. Increases in operating income and
operating margin were driven primarily by price realization, lower
raw material costs and improved productivity, partially offset by
lower volume, non-material cost inflation and SKU optimization
efforts.
Adjusted diluted EPS from continuing operations
in the second quarter 2023 results exclude $0.25 of amortization of
acquisition-related intangible assets. Adjusted diluted EPS from
continuing operations in the second quarter 2022 results exclude
$0.24 of amortization of acquisition-related intangible assets and
$0.06 due to a pension settlement charge.
Net cash provided by operating activities from
continuing operations was $228 million in the second quarter of
2023 versus net cash provided by operating activities of $189
million in the comparable period of 2022. Free cash flow was $192
million in the second quarter of 2023 versus $168 million in
the comparable period of 2022.
SUMMARY & OUTLOOK
For the full year 2023, Hubbell anticipates
diluted earnings per share from continuing operations in the range
of $13.75-$14.25 and anticipates adjusted diluted earnings per
share from continuing operations ("Adjusted EPS") in the range of
$14.75-$15.25. 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.
Hubbell anticipates full year 2023 total sales
growth of 8-10% and organic net sales growth of 7-9%, as compared
to full year 2022. The Company anticipates net M&A contributing
+1% to full year sales growth.
The diluted EPS and Adjusted EPS ranges are
based on an adjusted tax rate of 22.5% to 23.0% and include
approximately $0.25 of anticipated restructuring and related
investment. The Company expects full year 2023 free cash flow to be
greater than $700 million.
CONFERENCE CALL
Hubbell will conduct an earnings conference call
to discuss its second quarter 2023 financial results today,
July 25, 2023 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 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,
expectations of demand remaining strong in the utility markets,
grid modernization and electrification continuing to drive
investment in critical infrastructure, our unique position to serve
the evolving needs of our customers, continuing to execute
effectively for our shareholders, our intention to accelerate our
investment levels in the second half of 2023 to support long-term
customer needs and drive attractive shareholder returns, robust
backlog and all statements, including our projected financial
results, set forth in the “Summary & Outlook” section 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. 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”, “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: business conditions,
geopolitical conditions (including the war in Ukraine and trade
tensions with China) and changes in general economic conditions, in
particular industries, markets or geographic regions, ongoing
softness in the residential markets, as well the potential for a
significant economic slowdown, continued inflation, stagflation or
recession, higher interest rates, higher energy costs; our ability
to offset increases in material and non-material costs through
price recovery and volume growth; effects of unfavorable foreign
currency exchange rates and the potential use of hedging
instruments to hedge the exposure to fluctuating rates of foreign
currency exchange on inventory purchases; 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 trade tariffs, import quotas and
other trade restrictions or actions taken by the U.S., U.K., and
other countries, including changes in U.S. trade policies; failure
to achieve projected levels of efficiencies, cost savings and cost
reduction measures, including those expected as a result of our
lean initiatives and strategic sourcing plans, regulatory issues,
changes in tax laws including multijurisdictional implementation of
the Organisation for Economic Co-operation and Development's
comprehensive base erosion and profit shifting plan, or changes in
geographic profit mix affecting tax rates and availability of tax
incentives; the impact of and ability to fully integrate strategic
acquisitions, including the acquisitions of PCX Holding LLC, Ripley
Tools, LLC, Nooks Hill Road, LLC, REF Automation Limited, REF
Alabama Inc. and EI Electronics LLC ; the impact of certain
divestitures, including the benefits and costs of, the sale of the
Commercial and Industrial Lighting business to GE Current; 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”, “Management’s Discussion and Analysis
of Financial Condition and Results of Operations”, “Forward-Looking
Statements” and “Quantitative and Qualitative Disclosures about
Market Risk” sections in the Annual Report on Form 10-K for the
year ended December 31, 2022 and Quarterly Reports on Form
10-Q.
About the Company
Hubbell Incorporated is a leading manufacturer
of utility and electrical solutions enabling customers to operate
critical infrastructure safely, reliably and efficiently. With 2022
revenues of $4.9 billion, Hubbell solutions energize and electrify
communities in front of and behind the meter. 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 |
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#######
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 from continuing operations attributed
to Hubbell Incorporated, adjusted net income from continuing
operations available to common shareholders, adjusted earnings per
diluted share from continuing operations, 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
7—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, 2022. 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.
- Pension charges including a
settlement charge in the second quarter of 2022.
- 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,
represents 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. When we provide our expectations for organic
net sales, adjusted effective tax rate, adjusted diluted EPS and
free cash flow on a forward-looking basis, a reconciliation of the
differences between the non-GAAP expectations and the corresponding
GAAP measures (expected net sales, effective tax rate, diluted EPS
and net cash flows provided by operating activities) generally is
not available without unreasonable effort due to potentially high
variability, complexity and low visibility as to the items that
would be excluded from the GAAP measure in the relevant future
period, such as unusual gains and losses, fluctuations in foreign
currency exchange rates, the impact and timing of potential
acquisitions and divestitures, certain financing costs, and other
structural changes or their probable significance. The variability
of the excluded items may have a significant, and potentially
unpredictable, impact on our future GAAP results.
HUBBELL
INCORPORATEDCondensed Consolidated Statement of
Income(unaudited)(in millions,
except per share amounts)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net sales |
$ |
1,365.9 |
|
|
$ |
1,256.0 |
|
|
$ |
2,651.3 |
|
|
$ |
2,412.1 |
|
Cost of goods sold |
|
869.7 |
|
|
|
872.8 |
|
|
|
1,706.8 |
|
|
|
1,705.8 |
|
Gross profit |
|
496.2 |
|
|
|
383.2 |
|
|
|
944.5 |
|
|
|
706.3 |
|
Selling & administrative expenses |
|
208.4 |
|
|
|
192.6 |
|
|
|
407.9 |
|
|
|
372.8 |
|
Operating income |
|
287.8 |
|
|
|
190.6 |
|
|
|
536.6 |
|
|
|
333.5 |
|
Operating income as a % of Net sales |
|
21.1 |
% |
|
|
15.2 |
% |
|
|
20.2 |
% |
|
|
13.8 |
% |
Pension charge |
|
— |
|
|
|
(4.4 |
) |
|
|
— |
|
|
|
(4.4 |
) |
Interest expense, net |
|
(9.2 |
) |
|
|
(12.7 |
) |
|
|
(18.9 |
) |
|
|
(25.8 |
) |
Other (expense) income, net |
|
(4.8 |
) |
|
|
2.5 |
|
|
|
(8.9 |
) |
|
|
6.1 |
|
Total other expense, net |
|
(14.0 |
) |
|
|
(14.6 |
) |
|
|
(27.8 |
) |
|
|
(24.1 |
) |
Income from continuing operations before income
taxes |
|
273.8 |
|
|
|
176.0 |
|
|
|
508.8 |
|
|
|
309.4 |
|
Provision for income taxes |
|
65.6 |
|
|
|
38.9 |
|
|
|
117.2 |
|
|
|
68.5 |
|
Net income from continuing operations |
|
208.2 |
|
|
|
137.1 |
|
|
|
391.6 |
|
|
|
240.9 |
|
Less: Net income from continuing operations attributable to
noncontrolling interest |
|
(1.4 |
) |
|
|
(1.5 |
) |
|
|
(2.9 |
) |
|
|
(2.8 |
) |
Net income from continuing operations attributable to
Hubbell Incorporated |
|
206.8 |
|
|
|
135.6 |
|
|
|
388.7 |
|
|
|
238.1 |
|
(Loss) income from discontinued operations, net of
tax |
|
— |
|
|
|
(13.6 |
) |
|
|
— |
|
|
|
64.1 |
|
Net income attributable to Hubbell
Incorporated |
$ |
206.8 |
|
|
$ |
122.0 |
|
|
$ |
388.7 |
|
|
$ |
302.2 |
|
|
|
|
|
|
|
|
|
Earnings Per Share: |
|
|
|
|
|
|
|
Basic earnings per share from continuing
operations |
$ |
3.85 |
|
|
$ |
2.52 |
|
|
$ |
7.24 |
|
|
$ |
4.41 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing
operations |
$ |
3.82 |
|
|
$ |
2.51 |
|
|
$ |
7.19 |
|
|
$ |
4.39 |
|
|
|
|
|
|
|
|
|
Cash dividends per common share |
$ |
1.12 |
|
|
$ |
1.05 |
|
|
$ |
2.24 |
|
|
$ |
2.10 |
|
HUBBELL
INCORPORATEDCondensed
Consolidated Balance
Sheet(unaudited)(in
millions)
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
492.6 |
|
$ |
440.5 |
Short-term investments |
|
16.2 |
|
|
14.3 |
Accounts receivable (net of allowances of $13.6 and
$14.3) |
|
811.2 |
|
|
741.6 |
Inventories, net |
|
794.1 |
|
|
740.7 |
Other current assets |
|
91.7 |
|
|
84.3 |
TOTAL CURRENT ASSETS |
|
2,205.8 |
|
|
2,021.4 |
Property, plant and equipment, net |
|
557.5 |
|
|
528.0 |
Investments |
|
69.6 |
|
|
65.9 |
Goodwill |
|
1,998.8 |
|
|
1,970.5 |
Other intangible assets, net |
|
664.4 |
|
|
669.9 |
Other long-term assets |
|
144.8 |
|
|
146.9 |
TOTAL ASSETS |
$ |
5,640.9 |
|
$ |
5,402.6 |
LIABILITIES AND EQUITY |
|
|
|
Short-term debt |
$ |
1.8 |
|
$ |
4.7 |
Accounts payable |
|
554.8 |
|
|
529.9 |
Accrued salaries, wages and employee benefits |
|
117.2 |
|
|
144.2 |
Accrued insurance |
|
78.9 |
|
|
75.6 |
Other accrued liabilities |
|
317.1 |
|
|
334.1 |
TOTAL CURRENT LIABILITIES |
|
1,069.8 |
|
|
1,088.5 |
Long-term debt |
|
1,439.1 |
|
|
1,437.9 |
Other non-current liabilities |
|
500.9 |
|
|
505.6 |
TOTAL LIABILITIES |
|
3,009.8 |
|
|
3,032.0 |
Hubbell Incorporated Shareholders' Equity |
|
2,620.7 |
|
|
2,360.9 |
Noncontrolling interest |
|
10.4 |
|
|
9.7 |
TOTAL EQUITY |
|
2,631.1 |
|
|
2,370.6 |
TOTAL LIABILITIES AND EQUITY |
$ |
5,640.9 |
|
$ |
5,402.6 |
HUBBELL
INCORPORATEDCondensed Consolidated Statement of
Cash Flows(unaudited)(in
millions)
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
Cash Flows From Operating Activities Of Continuing
Operations |
|
|
|
Net income from continuing operations attributable to
Hubbell |
$ |
388.7 |
|
|
$ |
238.1 |
|
Depreciation and amortization |
|
72.5 |
|
|
|
69.4 |
|
Deferred income taxes |
|
(5.2 |
) |
|
|
(38.4 |
) |
Stock-based compensation expense |
|
16.1 |
|
|
|
16.7 |
|
Provision for bad debt expense |
|
0.1 |
|
|
|
4.4 |
|
Pension charge |
|
— |
|
|
|
4.4 |
|
Loss on sale of assets |
|
0.6 |
|
|
|
1.2 |
|
Changes in assets and liabilities, net of
acquisitions |
|
|
|
Accounts receivable, net |
|
(60.4 |
) |
|
|
(107.4 |
) |
Inventories, net |
|
(45.2 |
) |
|
|
(61.0 |
) |
Accounts payable |
|
26.5 |
|
|
|
22.0 |
|
Current liabilities |
|
(50.2 |
) |
|
|
25.3 |
|
Other assets and liabilities, net |
|
(3.3 |
) |
|
|
(1.9 |
) |
Contributions to defined benefit pension
plans |
|
— |
|
|
|
(2.5 |
) |
Other, net |
|
1.2 |
|
|
|
3.9 |
|
Net cash provided by operating activities from continuing
operations |
|
341.4 |
|
|
|
174.2 |
|
Cash Flows From Investing Activities Of Continuing
Operations |
|
|
|
Capital expenditures |
|
(68.9 |
) |
|
|
(41.9 |
) |
Acquisition of businesses, net of cash
acquired |
|
(60.0 |
) |
|
|
— |
|
Proceeds from disposal of business, net of
cash |
|
— |
|
|
|
348.6 |
|
Purchases of available-for-sale investments |
|
(9.1 |
) |
|
|
(23.8 |
) |
Proceeds from sales of available-for-sale
investments |
|
10.4 |
|
|
|
9.8 |
|
Other, net |
|
(0.6 |
) |
|
|
1.1 |
|
Net cash (used in) provided by investing activities from
continuing operations |
|
(128.2 |
) |
|
|
293.8 |
|
Cash Flows From Financing Activities Of Continuing
Operations |
|
|
|
Borrowing (payments) of short-term debt, net |
|
(2.8 |
) |
|
|
(3.8 |
) |
Payment of dividends |
|
(120.1 |
) |
|
|
(113.3 |
) |
Repurchase of common shares |
|
(20.0 |
) |
|
|
(150.0 |
) |
Other, net |
|
(23.0 |
) |
|
|
(11.1 |
) |
Net cash used by financing activities from continuing
operations |
|
(165.9 |
) |
|
|
(278.2 |
) |
Cash Flows From Discontinued Operations: |
|
|
|
Cash used in operating activities |
|
— |
|
|
|
(44.7 |
) |
Cash used in investing activities |
|
— |
|
|
|
(1.7 |
) |
Net cash used in discontinued operations |
|
— |
|
|
|
(46.4 |
) |
Effect of foreign exchange rate changes on cash and cash
equivalents |
|
5.1 |
|
|
|
(6.0 |
) |
Increase in cash, cash equivalents and restricted
cash |
|
52.4 |
|
|
|
137.4 |
|
Cash and cash equivalents, beginning of year |
|
440.5 |
|
|
|
286.2 |
|
Cash and cash equivalents within assets held for sale,
beginning of year |
|
— |
|
|
|
0.7 |
|
Restricted cash, included in other assets, beginning of
year |
|
2.8 |
|
|
|
2.7 |
|
Less: Restricted cash, included in other
assets |
|
3.1 |
|
|
|
2.8 |
|
Less: Cash and cash equivalents within assets held for
sale, end of quarter |
|
— |
|
|
|
— |
|
Cash and cash equivalents, end of quarter |
$ |
492.6 |
|
|
$ |
424.2 |
|
HUBBELL
INCORPORATEDEarnings Per Share
(unaudited)(in millions, except per share
amounts)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net income from continuing operations attributable to
Hubbell (GAAP measure) |
$ |
206.8 |
|
|
$ |
135.6 |
|
|
53 |
% |
|
$ |
388.7 |
|
|
$ |
238.1 |
|
|
63 |
% |
Amortization of acquisition-related intangible
assets |
|
18.1 |
|
|
|
17.4 |
|
|
|
|
|
35.9 |
|
|
|
34.9 |
|
|
|
Pension charge |
|
— |
|
|
|
4.4 |
|
|
|
|
|
— |
|
|
|
4.4 |
|
|
|
Subtotal |
$ |
224.9 |
|
|
$ |
157.4 |
|
|
|
|
$ |
424.6 |
|
|
$ |
277.4 |
|
|
|
Income tax effects |
|
4.5 |
|
|
|
5.4 |
|
|
|
|
|
8.9 |
|
|
|
9.8 |
|
|
|
Adjusted net income from continuing
operations |
$ |
220.4 |
|
|
$ |
152.0 |
|
|
45 |
% |
|
$ |
415.7 |
|
|
$ |
267.6 |
|
|
55 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations attributable to
Hubbell (GAAP measure) |
$ |
206.8 |
|
|
$ |
135.6 |
|
|
|
|
$ |
388.7 |
|
|
$ |
238.1 |
|
|
|
Less: Earnings allocated to participating
securities |
|
(0.5 |
) |
|
|
(0.4 |
) |
|
|
|
|
(0.9 |
) |
|
|
(0.6 |
) |
|
|
Net income from continuing operations available to common
shareholders (GAAP measure) [a] |
$ |
206.3 |
|
|
$ |
135.2 |
|
|
53 |
% |
|
$ |
387.8 |
|
|
$ |
237.5 |
|
|
63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income from continuing
operations |
$ |
220.4 |
|
|
$ |
152.0 |
|
|
|
|
$ |
415.7 |
|
|
$ |
267.6 |
|
|
|
Less: Earnings allocated to participating
securities |
|
(0.5 |
) |
|
|
(0.4 |
) |
|
|
|
|
(1.0 |
) |
|
|
(0.7 |
) |
|
|
Adjusted net income from continuing operations available to
common shareholders [b] |
$ |
219.9 |
|
|
$ |
151.6 |
|
|
45 |
% |
|
$ |
414.7 |
|
|
$ |
266.9 |
|
|
55 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
Average number of common shares outstanding
[c] |
|
53.6 |
|
|
|
53.6 |
|
|
|
|
|
53.6 |
|
|
|
53.8 |
|
|
|
Potential dilutive shares |
|
0.4 |
|
|
|
0.3 |
|
|
|
|
|
0.3 |
|
|
|
0.3 |
|
|
|
Average number of diluted shares outstanding
[d] |
|
54.0 |
|
|
|
53.9 |
|
|
|
|
|
53.9 |
|
|
|
54.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share from continuing operations (GAAP
measure): |
|
|
|
|
|
|
|
|
|
|
|
Basic [a] / [c] |
$ |
3.85 |
|
|
$ |
2.52 |
|
|
|
|
$ |
7.24 |
|
|
$ |
4.41 |
|
|
|
Diluted [a] / [d] |
$ |
3.82 |
|
|
$ |
2.51 |
|
|
52 |
% |
|
$ |
7.19 |
|
|
$ |
4.39 |
|
|
64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per diluted share from continuing
operations [b] / [d] |
$ |
4.07 |
|
|
$ |
2.81 |
|
|
45 |
% |
|
$ |
7.69 |
|
|
$ |
4.93 |
|
|
56 |
% |
HUBBELL
INCORPORATEDSegment
Information(unaudited)(in
millions)
Hubbell Incorporated |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Sales [a] |
$ |
1,365.9 |
|
|
$ |
1,256.0 |
|
|
9 |
% |
|
$ |
2,651.3 |
|
|
$ |
2,412.1 |
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
287.8 |
|
|
$ |
190.6 |
|
|
51 |
% |
|
$ |
536.6 |
|
|
$ |
333.5 |
|
|
61 |
% |
Amortization of acquisition-related intangible
assets |
|
18.1 |
|
|
|
17.4 |
|
|
|
|
|
35.9 |
|
|
|
34.9 |
|
|
|
Adjusted operating income [c] |
$ |
305.9 |
|
|
$ |
208.0 |
|
|
47 |
% |
|
$ |
572.5 |
|
|
$ |
368.4 |
|
|
55 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
|
21.1 |
% |
|
|
15.2 |
% |
|
+590 bps |
|
|
20.2 |
% |
|
|
13.8 |
% |
|
+640 bps |
Adjusted operating margin [c] / [a] |
|
22.4 |
% |
|
|
16.6 |
% |
|
+580 bps |
|
|
21.6 |
% |
|
|
15.3 |
% |
|
+630 bps |
Utility Solutions |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Sales [a] |
$ |
830.8 |
|
|
$ |
728.5 |
|
|
14 |
% |
|
$ |
1,612.4 |
|
|
$ |
1,380.3 |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
199.5 |
|
|
$ |
111.4 |
|
|
79 |
% |
|
$ |
377.0 |
|
|
$ |
199.5 |
|
|
89 |
% |
Amortization of acquisition-related intangible
assets |
|
13.6 |
|
|
|
13.9 |
|
|
|
|
|
26.9 |
|
|
|
27.9 |
|
|
|
Adjusted operating income [c] |
$ |
213.1 |
|
|
$ |
125.3 |
|
|
70 |
% |
|
$ |
403.9 |
|
|
$ |
227.4 |
|
|
78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
|
24.0 |
% |
|
|
15.3 |
% |
|
+870 bps |
|
|
23.4 |
% |
|
|
14.5 |
% |
|
+890 bps |
Adjusted operating margin [c] / [a] |
|
25.6 |
% |
|
|
17.2 |
% |
|
+840 bps |
|
|
25.0 |
% |
|
|
16.5 |
% |
|
+850 bps |
Electrical Solutions |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Sales [a] |
$ |
535.1 |
|
|
$ |
527.5 |
|
|
1 |
% |
|
$ |
1,038.9 |
|
|
$ |
1,031.8 |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
88.3 |
|
|
$ |
79.2 |
|
|
11 |
% |
|
$ |
159.6 |
|
|
$ |
134.0 |
|
|
19 |
% |
Amortization of acquisition-related intangible
assets |
|
4.5 |
|
|
|
3.5 |
|
|
|
|
|
9.0 |
|
|
|
7.0 |
|
|
|
Adjusted operating income [c] |
$ |
92.8 |
|
|
$ |
82.7 |
|
|
12 |
% |
|
$ |
168.6 |
|
|
$ |
141.0 |
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
|
16.5 |
% |
|
|
15.0 |
% |
|
+150 bps |
|
|
15.4 |
% |
|
|
13.0 |
% |
|
+240 bps |
Adjusted operating margin [c] / [a] |
|
17.3 |
% |
|
|
15.7 |
% |
|
+160 bps |
|
|
16.2 |
% |
|
|
13.7 |
% |
|
+250 bps |
HUBBELL
INCORPORATEDOrganic Net Sales
Growth(unaudited)(in millions and
percentage change)
Hubbell Incorporated |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
Net sales growth (GAAP measure) |
$ |
109.9 |
|
|
8.7 |
|
|
$ |
201.7 |
|
|
19.1 |
|
|
$ |
239.2 |
|
|
9.9 |
|
|
$ |
401.5 |
|
|
20.0 |
|
Impact of acquisitions |
|
38.1 |
|
|
3.0 |
|
|
|
— |
|
|
— |
|
|
|
58.8 |
|
|
2.4 |
|
|
|
— |
|
|
— |
|
Impact of divestitures |
|
— |
|
|
— |
|
|
|
(1.3 |
) |
|
(0.1 |
) |
|
|
— |
|
|
— |
|
|
|
(4.0 |
) |
|
(0.2 |
) |
Foreign currency exchange |
|
(1.1 |
) |
|
(0.1 |
) |
|
|
(3.2 |
) |
|
(0.4 |
) |
|
|
(5.8 |
) |
|
(0.2 |
) |
|
|
(3.5 |
) |
|
(0.1 |
) |
Organic net sales growth (non-GAAP measure) |
$ |
72.9 |
|
|
5.8 |
|
|
$ |
206.2 |
|
|
19.6 |
|
|
$ |
186.2 |
|
|
7.7 |
|
|
$ |
409.0 |
|
|
20.3 |
|
Utility Solutions |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
Net sales growth (GAAP measure) |
$ |
102.3 |
|
|
14.0 |
|
|
$ |
139.7 |
|
|
23.7 |
|
|
$ |
232.1 |
|
|
16.8 |
|
|
$ |
259.3 |
|
|
23.1 |
|
Impact of acquisitions |
|
9.7 |
|
|
1.3 |
|
|
|
— |
|
|
— |
|
|
|
15.3 |
|
|
1.1 |
|
|
|
— |
|
|
— |
|
Impact of divestitures |
|
— |
|
|
— |
|
|
|
(1.3 |
) |
|
(0.3 |
) |
|
|
— |
|
|
— |
|
|
|
(4.0 |
) |
|
(0.4 |
) |
Foreign currency exchange |
|
(0.7 |
) |
|
(0.1 |
) |
|
|
0.5 |
|
|
0.1 |
|
|
|
(2.4 |
) |
|
(0.2 |
) |
|
|
1.0 |
|
|
0.1 |
|
Organic net sales growth (non-GAAP measure) |
$ |
93.3 |
|
|
12.8 |
|
|
$ |
140.5 |
|
|
23.9 |
|
|
$ |
219.2 |
|
|
15.9 |
|
|
$ |
262.3 |
|
|
23.4 |
|
Electrical Solutions |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
Net sales growth (GAAP measure) |
$ |
7.6 |
|
|
1.4 |
|
|
$ |
62.0 |
|
|
13.3 |
|
|
$ |
7.1 |
|
|
0.7 |
|
|
$ |
142.2 |
|
|
16.0 |
|
Impact of acquisitions |
|
28.4 |
|
|
5.4 |
|
|
|
— |
|
|
— |
|
|
|
43.5 |
|
|
4.2 |
|
|
|
— |
|
|
— |
|
Impact of divestitures |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Foreign currency exchange |
|
(0.4 |
) |
|
(0.1 |
) |
|
|
(3.7 |
) |
|
(0.8 |
) |
|
|
(3.4 |
) |
|
(0.3 |
) |
|
|
(4.5 |
) |
|
(0.5 |
) |
Organic net sales growth (decline) (non-GAAP
measure) |
$ |
(20.4 |
) |
|
(3.9 |
) |
|
$ |
65.7 |
|
|
14.1 |
|
|
$ |
(33.0 |
) |
|
(3.2 |
) |
|
$ |
146.7 |
|
|
16.5 |
|
HUBBELL
INCORPORATEDAdjusted EBITDA from
Continuing
Operations(unaudited)(in
millions)
|
Three Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
Change |
Net income from continuing operations |
$ |
208.2 |
|
$ |
137.1 |
|
|
52 |
% |
Provision for income taxes |
|
65.6 |
|
|
38.9 |
|
|
|
Interest expense, net |
|
9.2 |
|
|
12.7 |
|
|
|
Other expense (income), net |
|
4.8 |
|
|
(2.5 |
) |
|
|
Depreciation and amortization |
|
36.9 |
|
|
34.7 |
|
|
|
Pension charge |
|
— |
|
|
4.4 |
|
|
|
Subtotal |
|
116.5 |
|
|
88.2 |
|
|
|
Adjusted EBITDA |
$ |
324.7 |
|
$ |
225.3 |
|
|
44 |
% |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
Change |
Net income from continuing operations |
$ |
391.6 |
|
$ |
240.9 |
|
|
63 |
% |
Provision for income taxes |
|
117.2 |
|
|
68.5 |
|
|
|
Interest expense, net |
|
18.9 |
|
|
25.8 |
|
|
|
Other expense (income), net |
|
8.9 |
|
|
(6.1 |
) |
|
|
Depreciation and amortization |
|
72.5 |
|
|
69.4 |
|
|
|
Pension charge |
|
— |
|
|
4.4 |
|
|
|
Subtotal |
|
217.5 |
|
|
162.0 |
|
|
|
Adjusted EBITDA |
$ |
609.1 |
|
$ |
402.9 |
|
|
51 |
% |
HUBBELL
INCORPORATEDRestructuring and
Related Costs from Continuing Operations Included in Consolidated
Results(unaudited)(in millions,
except per share amounts)
|
Three Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Costs of goods sold |
|
S&A expense |
|
Total |
Restructuring costs (GAAP Measure) |
$ |
1.8 |
|
$ |
1.2 |
|
$ |
— |
|
$ |
0.4 |
|
$ |
1.8 |
|
$ |
1.6 |
Restructuring related costs |
|
1.6 |
|
|
1.6 |
|
|
0.2 |
|
|
0.8 |
|
|
1.8 |
|
|
2.4 |
Restructuring and related costs (non-GAAP
measure) |
$ |
3.4 |
|
$ |
2.8 |
|
$ |
0.2 |
|
$ |
1.2 |
|
$ |
3.6 |
|
$ |
4.0 |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Costs of goods sold |
|
S&A expense |
|
Total |
Restructuring costs (GAAP Measure) |
$ |
2.2 |
|
$ |
2.3 |
|
$ |
0.1 |
|
$ |
0.9 |
|
$ |
2.3 |
|
$ |
3.2 |
Restructuring related costs |
|
3.6 |
|
|
2.5 |
|
|
0.2 |
|
|
1.6 |
|
|
3.8 |
|
|
4.1 |
Restructuring and related costs (non-GAAP
measure) |
$ |
5.8 |
|
$ |
4.8 |
|
$ |
0.3 |
|
$ |
2.5 |
|
$ |
6.1 |
|
$ |
7.3 |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Restructuring and related costs included in Cost of goods
sold (non-GAAP measure) |
|
|
|
|
|
|
|
Utility Solutions |
$ |
0.8 |
|
$ |
1.9 |
|
$ |
2.9 |
|
$ |
3.4 |
Electrical Solutions |
|
2.6 |
|
|
0.9 |
|
|
2.9 |
|
|
1.4 |
Total |
$ |
3.4 |
|
$ |
2.8 |
|
$ |
5.8 |
|
$ |
4.8 |
Restructuring and related costs included in Selling &
administrative expenses (non-GAAP measure) |
|
|
|
|
|
|
|
Utility Solutions |
$ |
0.2 |
|
$ |
0.3 |
|
$ |
0.2 |
|
$ |
0.6 |
Electrical Solutions |
|
— |
|
|
0.9 |
|
|
0.1 |
|
|
1.9 |
Total |
$ |
0.2 |
|
$ |
1.2 |
|
$ |
0.3 |
|
$ |
2.5 |
|
|
|
|
|
|
|
|
Impact on Income before income taxes from continuing
operations (non-GAAP measure) |
$ |
3.6 |
|
$ |
4.0 |
|
$ |
6.1 |
|
$ |
7.3 |
Impact on Net income available to Hubbell common
shareholders - continuing operations (non-GAAP
measure) |
|
2.7 |
|
|
3.1 |
|
|
4.6 |
|
|
5.6 |
Impact on Diluted earnings per share from continuing
operations (non-GAAP measure) |
$ |
0.05 |
|
$ |
0.06 |
|
$ |
0.09 |
|
$ |
0.10 |
HUBBELL
INCORPORATEDAdditional Non-GAAP Financial
Measures(unaudited)(in
millions)
Ratios of Total Debt to Total Capital and
Net Debt to Total Capital
|
June 30, 2023 |
|
December 31, 2022 |
Total Debt (GAAP measure) |
$ |
1,440.9 |
|
|
$ |
1,442.6 |
|
Total Hubbell Shareholders’ Equity |
|
2,620.7 |
|
|
|
2,360.9 |
|
Total Capital |
$ |
4,061.6 |
|
|
$ |
3,803.5 |
|
Total Debt to Total Capital (GAAP measure) |
|
35 |
% |
|
|
38 |
% |
Less: Cash and Investments |
$ |
578.4 |
|
|
$ |
520.7 |
|
Net Debt (non-GAAP measure) |
$ |
862.5 |
|
|
$ |
921.9 |
|
Net Debt to Total Capital (non-GAAP measure) |
|
21 |
% |
|
|
24 |
% |
Free Cash Flow Reconciliation
Free Cash Flow Reconciliation
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net cash provided by operating activities from continuing
operations (GAAP measure) |
$ |
227.7 |
|
|
$ |
188.6 |
|
|
$ |
341.4 |
|
|
$ |
174.2 |
|
|
Less: Capital expenditures |
|
(35.5 |
) |
|
|
(20.5 |
) |
|
|
(68.9 |
) |
|
|
(41.9 |
) |
|
Free cash flow (non-GAAP measure) |
$ |
192.2 |
|
|
$ |
168.1 |
|
|
$ |
272.5 |
|
|
$ |
132.3 |
|
|
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