Exhibit 99.1
HUBBELL REPORTS THIRD QUARTER 2023 RESULTS
- Q3 diluted EPS from continuing
operations of $3.70; adjusted diluted EPS from continuing
operations of $3.95
- Q3 net sales +5% (organic +4%,
acquisitions +1%)
- Operating margin expansion of 460 bps;
adjusted operating margin expansion of 440 bps
- Raise FY23 diluted EPS from continuing
operations to $14.00-$14.25; adjusted diluted EPS of
$15.00-$15.25
SHELTON, CT. (October 31, 2023) – Hubbell
Incorporated (NYSE: HUBB) today reported operating results for the
third quarter ended September 30, 2023.
“Hubbell delivered strong earnings growth for
shareholders in the third quarter,” said Gerben Bakker, Chairman,
President and CEO. “We continued to drive significant margin
expansion in the quarter through effective execution on price, cost
and productivity, while also accelerating investment levels in
capacity, productivity and innovation.”
Mr. Bakker continued, “Our leading quality and service levels
supported strong price realization in the third quarter. In Utility
Solutions, improved lead times drove further channel inventory
normalization in utility distribution markets as anticipated,
though end customer demand was solid. Transmission markets remained
robust, and improved supply chain dynamics enabled accelerated
sequential growth in utility communications and controls. Telcom
markets were softer in the quarter. In Electrical Solutions,
industrial end markets were solid, with 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, “Our third quarter
performance reflects continued execution off of a strong first half
in 2023. As grid modernization and electrification drive investment
in critical infrastructure, Hubbell is uniquely positioned to serve
the evolving needs of our utility and electrical customers. We
expect to deliver attractive profitable growth for shareholders in
2024 and beyond."
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.
THIRD QUARTER FINANCIAL HIGHLIGHTS
The comments and year-over-year comparisons in
this segment review are based on third quarter results in 2023 and
2022.
Utility Solutions segment net sales in the third
quarter of 2023 increased 8% to $838 million compared to $775
million reported in the third quarter of 2022. Organic net sales
increased 7% in the quarter while acquisitions added 1%. Total
Utility T&D Components net sales increased approximately 3% and
Utility Communications and Controls net sales increased
approximately 28%. Operating income was $187 million, or 22.3% of
net sales, in the third quarter of 2023 as compared to $130
million, or 16.8% of net sales in the same period of 2022. Adjusted
operating income was $201 million, or 24.0% of net sales, in the
third quarter of 2023 as compared to $144 million, or 18.6% 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, and improved productivity,
partially offset by non-material cost inflation and increased
investment.
Electrical Solutions segment net sales in the
third quarter of 2023 decreased 1% to $538 million compared to $542
million reported in the third quarter of 2022. Organic net sales
decreased 1% in the quarter. Operating income was $90 million, or
16.6% of net sales, compared to $74 million, or 13.6% of net sales
in the same period of 2022. Adjusted operating income was $94
million, or 17.5% of net sales, in the third quarter of 2023 as
compared to $80 million, or 14.8% 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 third quarter 2023 excludes $0.25 of amortization of
acquisition-related intangible assets. Adjusted diluted EPS from
continuing operations in the third quarter 2022 results exclude
$0.28 of amortization of acquisition-related intangible assets and
$0.02 due to a pension settlement charge.
Net cash provided by operating activities from
continuing operations was $194 million in the third quarter of 2023
versus net cash provided by operating activities of $220 million in
the comparable period of 2022. Free cash flow was $159 million in
the third quarter of 2023 versus $194 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 $14.00-$14.25 and anticipates adjusted diluted earnings per
share from continuing operations ("Adjusted EPS") in the range of
$15.00-$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 approximately 8% and organic net sales growth of
approximately 7%, 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% and include
approximately $0.20 of anticipated restructuring and related
investment. The Company continues to expect full year 2023 free
cash flow to be greater than $700 million.
CONFERENCE CALL
Hubbell will conduct an earnings conference call
to discuss its third quarter 2023 financial results today,
October 31, 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,
continued Company investment to support growth and productivity
initiatives, grid modernization and electrification trends
continuing to drive investment in critical infrastructure, meeting
the needs of our customers, channel inventory normalization,
favorable price, cost and productivity trends, operating profit
growth and margin expansion, having an anticipated seasonally
strong fourth quarter and our positioning to continue delivering
attractive profitable growth for shareholders in 2024 and beyond,
statements regarding the consummation of the proposed acquisition
of the Systems Control business and the anticipated benefits to the
Company thereof, including the timing for the proposed transaction
to become accretive, the projected 2024 EDITDA multiple and Systems
Control estimated 2024 sales, 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”, “intend”, “depend”, “plan”,
“estimated”, “predict”, “target”, “should”, “could”, “may”,
“subject to”, “continues”, “growing”, “prospective”, “forecast”,
“projected”, “purport”, “might”, “if”, “contemplate”, “potential”,
“pending”, “target”, “goals”, “scheduled”, “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 wars in Ukraine and Israel, as well as trade tensions with
China) and changes in general economic conditions in particular
industries, markets or geographic regions, and ongoing softness in
the residential markets, as well the potential for a significant
economic slowdown, continued inflation, stagflation or recession,
higher interest rates, and 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 United States, United
Kingdom, 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., EI Electronics
LLC, and Indústria Eletromecânica Balestro Ltda.; 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; the ability to complete
the proposed acquisition of the Systems Control business on the
proposed terms or on the anticipated timeline, or at all; failure
to achieve the anticipated benefits from the proposed transaction;
other risks related to the completion of the proposed transaction
and actions related thereto, including transaction costs and/or
unknown or inestimable liabilities; risks related to the
integration of the Systems Control business and the future
opportunities and plans for the combined company; 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 electrify economies and
energize communities. 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
settlement charges in the nine months ended September 30,
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 September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net
sales |
$ |
1,375.8 |
|
|
$ |
1,316.2 |
|
|
$ |
4,027.1 |
|
|
$ |
3,728.3 |
|
Cost of goods
sold |
|
888.4 |
|
|
|
917.7 |
|
|
|
2,595.2 |
|
|
|
2,623.5 |
|
Gross
profit |
|
487.4 |
|
|
|
398.5 |
|
|
|
1,431.9 |
|
|
|
1,104.8 |
|
Selling &
administrative expenses |
|
211.1 |
|
|
|
194.9 |
|
|
|
619.0 |
|
|
|
567.7 |
|
Operating
income |
|
276.3 |
|
|
|
203.6 |
|
|
|
812.9 |
|
|
|
537.1 |
|
Operating income as a
% of Net sales |
|
20.1 |
% |
|
|
15.5 |
% |
|
|
20.2 |
% |
|
|
14.4 |
% |
Pension
charge |
|
— |
|
|
|
(1.5 |
) |
|
|
— |
|
|
|
(5.9 |
) |
Interest expense,
net |
|
(7.8 |
) |
|
|
(12.1 |
) |
|
|
(26.7 |
) |
|
|
(37.9 |
) |
Other (expense)
income, net |
|
(3.5 |
) |
|
|
0.8 |
|
|
|
(12.4 |
) |
|
|
6.9 |
|
Total other expense,
net |
|
(11.3 |
) |
|
|
(12.8 |
) |
|
|
(39.1 |
) |
|
|
(36.9 |
) |
Income from continuing
operations before income taxes |
|
265.0 |
|
|
|
190.8 |
|
|
|
773.8 |
|
|
|
500.2 |
|
Provision for income
taxes |
|
63.0 |
|
|
|
38.8 |
|
|
|
180.2 |
|
|
|
107.3 |
|
Net income from
continuing operations |
|
202.0 |
|
|
|
152.0 |
|
|
|
593.6 |
|
|
|
392.9 |
|
Less: Net income from
continuing operations attributable to noncontrolling
interest |
|
(1.9 |
) |
|
|
(1.7 |
) |
|
|
(4.8 |
) |
|
|
(4.5 |
) |
Net income from
continuing operations attributable to Hubbell
Incorporated |
$ |
200.1 |
|
|
$ |
150.3 |
|
|
$ |
588.8 |
|
|
$ |
388.4 |
|
|
|
|
|
|
|
|
|
Earnings Per
Share: |
|
|
|
|
|
|
|
Basic earnings per
share from continuing operations |
$ |
3.72 |
|
|
$ |
2.79 |
|
|
$ |
10.96 |
|
|
$ |
7.20 |
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations |
$ |
3.70 |
|
|
$ |
2.78 |
|
|
$ |
10.89 |
|
|
$ |
7.16 |
|
|
|
|
|
|
|
|
|
Cash dividends per
common share |
$ |
1.12 |
|
|
$ |
1.05 |
|
|
$ |
3.36 |
|
|
$ |
3.15 |
|
HUBBELL
INCORPORATEDCondensed Consolidated Balance
Sheet(unaudited)(in
millions)
|
September 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Cash and cash
equivalents |
$ |
572.8 |
|
$ |
440.5 |
Short-term
investments |
|
17.9 |
|
|
14.3 |
Accounts receivable
(net of allowances of $13.2 and $14.3) |
|
852.9 |
|
|
741.6 |
Inventories,
net |
|
788.4 |
|
|
740.7 |
Other current
assets |
|
86.4 |
|
|
84.3 |
TOTAL CURRENT ASSETS |
|
2,318.4 |
|
|
2,021.4 |
Property, plant and
equipment, net |
|
572.2 |
|
|
528.0 |
Investments |
|
61.6 |
|
|
65.9 |
Goodwill |
|
1,994.7 |
|
|
1,970.5 |
Other intangible
assets, net |
|
644.7 |
|
|
669.9 |
Other long-term
assets |
|
176.7 |
|
|
146.9 |
TOTAL
ASSETS |
$ |
5,768.3 |
|
$ |
5,402.6 |
LIABILITIES AND
EQUITY |
|
|
|
Short-term
debt |
$ |
3.3 |
|
$ |
4.7 |
Accounts
payable |
|
554.7 |
|
|
529.9 |
Accrued salaries,
wages and employee benefits |
|
129.0 |
|
|
144.2 |
Accrued
insurance |
|
80.8 |
|
|
75.6 |
Other accrued
liabilities |
|
303.6 |
|
|
334.1 |
TOTAL CURRENT LIABILITIES |
|
1,071.4 |
|
|
1,088.5 |
Long-term
debt |
|
1,439.7 |
|
|
1,437.9 |
Other non-current
liabilities |
|
506.7 |
|
|
505.6 |
TOTAL LIABILITIES |
|
3,017.8 |
|
|
3,032.0 |
Hubbell Incorporated
Shareholders' Equity |
|
2,739.1 |
|
|
2,360.9 |
Noncontrolling
interest |
|
11.4 |
|
|
9.7 |
TOTAL EQUITY |
|
2,750.5 |
|
|
2,370.6 |
TOTAL LIABILITIES AND
EQUITY |
$ |
5,768.3 |
|
$ |
5,402.6 |
HUBBELL
INCORPORATEDCondensed Consolidated Statement of
Cash Flows(unaudited)(in
millions)
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
Cash Flows From
Operating Activities Of Continuing Operations |
|
|
|
Net income from continuing operations attributable to
Hubbell |
$ |
588.8 |
|
|
$ |
388.4 |
|
Depreciation and amortization |
|
110.1 |
|
|
|
107.6 |
|
Deferred income taxes |
|
(17.1 |
) |
|
|
(41.7 |
) |
Stock-based compensation expense |
|
21.6 |
|
|
|
21.7 |
|
Provision for bad debt expense |
|
— |
|
|
|
5.7 |
|
Pension charge |
|
— |
|
|
|
5.9 |
|
Loss on sale of assets |
|
1.5 |
|
|
|
2.3 |
|
Changes in assets and
liabilities, net of acquisitions |
|
|
|
Accounts receivable, net |
|
(101.0 |
) |
|
|
(134.4 |
) |
Inventories, net |
|
(39.4 |
) |
|
|
(67.8 |
) |
Accounts payable |
|
25.1 |
|
|
|
28.4 |
|
Current liabilities |
|
(45.2 |
) |
|
|
65.4 |
|
Other assets and liabilities, net |
|
2.5 |
|
|
|
17.2 |
|
Contributions to defined benefit pension
plans |
|
(10.0 |
) |
|
|
(12.5 |
) |
Other, net |
|
(1.6 |
) |
|
|
7.6 |
|
Net cash provided by operating activities from continuing
operations |
|
535.3 |
|
|
|
393.8 |
|
Cash Flows From
Investing Activities Of Continuing Operations |
|
|
|
Capital expenditures |
|
(103.8 |
) |
|
|
(67.2 |
) |
Acquisition of businesses, net of cash
acquired |
|
(60.0 |
) |
|
|
(163.6 |
) |
Proceeds from disposal of business, net of
cash |
|
— |
|
|
|
332.8 |
|
Purchases of available-for-sale investments |
|
(13.7 |
) |
|
|
(26.5 |
) |
Proceeds from sales of available-for-sale
investments |
|
15.8 |
|
|
|
15.7 |
|
Other, net |
|
0.3 |
|
|
|
1.4 |
|
Net cash (used in) provided by investing activities from
continuing operations |
|
(161.4 |
) |
|
|
92.6 |
|
Cash Flows From
Financing Activities Of Continuing Operations |
|
|
|
Borrowing (payments) of short-term debt, net |
|
(1.4 |
) |
|
|
(5.4 |
) |
Payment of dividends |
|
(180.1 |
) |
|
|
(169.6 |
) |
Repurchase of common shares |
|
(30.0 |
) |
|
|
(150.0 |
) |
Other, net |
|
(30.2 |
) |
|
|
(15.3 |
) |
Net cash used by financing activities from continuing
operations |
|
(241.7 |
) |
|
|
(340.3 |
) |
Cash Flows From
Discontinued Operations: |
|
|
|
Cash used in operating activities |
|
— |
|
|
|
(50.1 |
) |
Cash used in investing activities |
|
— |
|
|
|
(1.7 |
) |
Net cash used in discontinued operations |
|
— |
|
|
|
(51.8 |
) |
Effect of foreign
exchange rate changes on cash and cash equivalents |
|
0.3 |
|
|
|
(14.2 |
) |
Increase in cash, cash
equivalents and restricted cash |
|
132.5 |
|
|
|
80.1 |
|
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 |
|
3.0 |
|
|
|
2.8 |
|
Cash and cash
equivalents, end of quarter |
$ |
572.8 |
|
|
$ |
366.9 |
|
HUBBELL
INCORPORATEDEarnings Per Share
(unaudited)(in millions, except per share
amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net income from
continuing operations attributable to Hubbell (GAAP
measure) |
$ |
200.1 |
|
|
$ |
150.3 |
|
|
33 |
% |
|
$ |
588.8 |
|
|
$ |
388.4 |
|
|
52 |
% |
Amortization of
acquisition-related intangible assets |
|
18.4 |
|
|
|
20.8 |
|
|
|
|
|
54.3 |
|
|
|
55.7 |
|
|
|
Pension
charge |
|
— |
|
|
|
1.5 |
|
|
|
|
|
— |
|
|
|
5.9 |
|
|
|
Subtotal |
$ |
218.5 |
|
|
$ |
172.6 |
|
|
|
|
$ |
643.1 |
|
|
$ |
450.0 |
|
|
|
Income tax
effects |
|
4.6 |
|
|
|
5.5 |
|
|
|
|
|
13.4 |
|
|
|
15.3 |
|
|
|
Adjusted net income
from continuing operations |
$ |
213.9 |
|
|
$ |
167.1 |
|
|
28 |
% |
|
$ |
629.7 |
|
|
$ |
434.7 |
|
|
45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Hubbell (GAAP
measure) |
$ |
200.1 |
|
|
$ |
150.3 |
|
|
|
|
$ |
588.8 |
|
|
$ |
388.4 |
|
|
|
Less: Earnings
allocated to participating securities |
|
(0.5 |
) |
|
|
(0.4 |
) |
|
|
|
|
(1.4 |
) |
|
|
(1.0 |
) |
|
|
Net income from
continuing operations available to common shareholders (GAAP
measure) [a] |
$ |
199.6 |
|
|
$ |
149.9 |
|
|
33 |
% |
|
$ |
587.4 |
|
|
$ |
387.4 |
|
|
52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
from continuing operations |
$ |
213.9 |
|
|
$ |
167.1 |
|
|
|
|
$ |
629.7 |
|
|
$ |
434.7 |
|
|
|
Less: Earnings
allocated to participating securities |
|
(0.5 |
) |
|
|
(0.4 |
) |
|
|
|
|
(1.5 |
) |
|
|
(1.1 |
) |
|
|
Adjusted net income
from continuing operations available to common shareholders
[b] |
$ |
213.4 |
|
|
$ |
166.7 |
|
|
28 |
% |
|
$ |
628.2 |
|
|
$ |
433.6 |
|
|
45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
Average number of
common shares outstanding [c] |
|
53.6 |
|
|
|
53.7 |
|
|
|
|
|
53.6 |
|
|
|
53.8 |
|
|
|
Potential dilutive
shares |
|
0.4 |
|
|
|
0.3 |
|
|
|
|
|
0.4 |
|
|
|
0.3 |
|
|
|
Average number of
diluted shares outstanding [d] |
|
54.0 |
|
|
|
54.0 |
|
|
|
|
|
54.0 |
|
|
|
54.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
from continuing operations (GAAP measure): |
|
|
|
|
|
|
|
|
|
|
|
Basic [a] / [c] |
$ |
3.72 |
|
|
$ |
2.79 |
|
|
|
|
$ |
10.96 |
|
|
$ |
7.20 |
|
|
|
Diluted [a] / [d] |
$ |
3.70 |
|
|
$ |
2.78 |
|
|
33 |
% |
|
$ |
10.89 |
|
|
$ |
7.16 |
|
|
52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
diluted share from continuing operations [b] /
[d] |
$ |
3.95 |
|
|
$ |
3.08 |
|
|
28 |
% |
|
$ |
11.64 |
|
|
$ |
8.01 |
|
|
45 |
% |
HUBBELL
INCORPORATEDSegment
Information(unaudited)(in
millions)
Hubbell
Incorporated |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Sales
[a] |
$ |
1,375.8 |
|
|
$ |
1,316.2 |
|
|
5 |
% |
|
$ |
4,027.1 |
|
|
$ |
3,728.3 |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
276.3 |
|
|
$ |
203.6 |
|
|
36 |
% |
|
$ |
812.9 |
|
|
$ |
537.1 |
|
|
51 |
% |
Amortization of acquisition-related intangible
assets |
|
18.4 |
|
|
|
20.8 |
|
|
|
|
|
54.3 |
|
|
|
55.7 |
|
|
|
Adjusted operating income [c] |
$ |
294.7 |
|
|
$ |
224.4 |
|
|
31 |
% |
|
$ |
867.2 |
|
|
$ |
592.8 |
|
|
46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
|
20.1 |
% |
|
|
15.5 |
% |
|
+460 bps |
|
|
20.2 |
% |
|
|
14.4 |
% |
|
+580 bps |
Adjusted operating margin [c] / [a] |
|
21.4 |
% |
|
|
17.0 |
% |
|
+440 bps |
|
|
21.5 |
% |
|
|
15.9 |
% |
|
+560 bps |
Utility
Solutions |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Sales
[a] |
$ |
837.9 |
|
|
$ |
774.5 |
|
|
8 |
% |
|
$ |
2,450.3 |
|
|
$ |
2,154.8 |
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
186.8 |
|
|
$ |
129.8 |
|
|
44 |
% |
|
$ |
563.8 |
|
|
$ |
329.3 |
|
|
71 |
% |
Amortization of acquisition-related intangible
assets |
|
13.9 |
|
|
|
14.3 |
|
|
|
|
|
40.8 |
|
|
|
42.2 |
|
|
|
Adjusted operating income [c] |
$ |
200.7 |
|
|
$ |
144.1 |
|
|
39 |
% |
|
$ |
604.6 |
|
|
$ |
371.5 |
|
|
63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
|
22.3 |
% |
|
|
16.8 |
% |
|
+550 bps |
|
|
23.0 |
% |
|
|
15.3 |
% |
|
+770 bps |
Adjusted operating margin [c] / [a] |
|
24.0 |
% |
|
|
18.6 |
% |
|
+540 bps |
|
|
24.7 |
% |
|
|
17.2 |
% |
|
+750 bps |
Electrical
Solutions |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Sales
[a] |
$ |
537.9 |
|
|
$ |
541.7 |
|
|
(1) % |
|
$ |
1,576.8 |
|
|
$ |
1,573.5 |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] |
$ |
89.5 |
|
|
$ |
73.8 |
|
|
21 |
% |
|
$ |
249.1 |
|
|
$ |
207.8 |
|
|
20 |
% |
Amortization of acquisition-related intangible
assets |
|
4.5 |
|
|
|
6.5 |
|
|
|
|
|
13.5 |
|
|
|
13.5 |
|
|
|
Adjusted operating income [c] |
$ |
94.0 |
|
|
$ |
80.3 |
|
|
17 |
% |
|
$ |
262.6 |
|
|
$ |
221.3 |
|
|
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP measure [b] / [a] |
|
16.6 |
% |
|
|
13.6 |
% |
|
+300 bps |
|
|
15.8 |
% |
|
|
13.2 |
% |
|
+260 bps |
Adjusted operating margin [c] / [a] |
|
17.5 |
% |
|
|
14.8 |
% |
|
+270 bps |
|
|
16.7 |
% |
|
|
14.1 |
% |
|
+260 bps |
HUBBELL
INCORPORATEDOrganic Net Sales
Growth(unaudited)(in millions and
percentage change)
Hubbell
Incorporated |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
Net sales growth (GAAP
measure) |
$ |
59.6 |
|
4.5 |
|
$ |
232.8 |
|
|
21.5 |
|
|
$ |
298.8 |
|
|
8.0 |
|
$ |
634.3 |
|
|
20.5 |
|
Impact of
acquisitions |
|
8.3 |
|
0.6 |
|
|
20.5 |
|
|
1.9 |
|
|
|
67.1 |
|
|
1.8 |
|
|
20.5 |
|
|
0.7 |
|
Impact of
divestitures |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
(4.0 |
) |
|
(0.1 |
) |
Foreign currency
exchange |
|
4.7 |
|
0.4 |
|
|
(6.5 |
) |
|
(0.6 |
) |
|
|
(1.1 |
) |
|
— |
|
|
(10.0 |
) |
|
(0.4 |
) |
Organic net sales
growth (non-GAAP measure) |
$ |
46.6 |
|
3.5 |
|
$ |
218.8 |
|
|
20.2 |
|
|
$ |
232.8 |
|
|
6.2 |
|
$ |
627.8 |
|
|
20.3 |
|
Utility
Solutions |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
Net sales growth (GAAP
measure) |
$ |
63.4 |
|
8.2 |
|
$ |
172.7 |
|
|
28.7 |
|
|
$ |
295.5 |
|
|
13.7 |
|
$ |
432.0 |
|
|
25.1 |
|
Impact of
acquisitions |
|
8.0 |
|
1.0 |
|
|
4.9 |
|
|
0.9 |
|
|
|
23.3 |
|
|
1.1 |
|
|
4.9 |
|
|
0.3 |
|
Impact of
divestitures |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
(4.0 |
) |
|
(0.2 |
) |
Foreign currency
exchange |
|
2.2 |
|
0.3 |
|
|
(2.8 |
) |
|
(0.5 |
) |
|
|
(0.2 |
) |
|
— |
|
|
(1.8 |
) |
|
(0.1 |
) |
Organic net sales
growth (non-GAAP measure) |
$ |
53.2 |
|
6.9 |
|
$ |
170.6 |
|
|
28.3 |
|
|
$ |
272.4 |
|
|
12.6 |
|
$ |
432.9 |
|
|
25.1 |
|
Electrical
Solutions |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
|
|
2023 |
|
|
Inc/(Dec)% |
|
|
2022 |
|
|
Inc/(Dec)% |
Net sales growth (GAAP
measure) |
$ |
(3.8 |
) |
|
(0.7 |
) |
|
$ |
60.1 |
|
|
12.5 |
|
|
$ |
3.3 |
|
|
0.2 |
|
|
$ |
202.3 |
|
|
14.8 |
|
Impact of
acquisitions |
|
0.3 |
|
|
— |
|
|
|
15.6 |
|
|
3.2 |
|
|
|
43.8 |
|
|
2.8 |
|
|
|
15.6 |
|
|
1.1 |
|
Impact of
divestitures |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Foreign currency
exchange |
|
2.5 |
|
|
0.5 |
|
|
|
(3.7 |
) |
|
(0.7 |
) |
|
|
(0.9 |
) |
|
(0.1 |
) |
|
|
(8.2 |
) |
|
(0.5 |
) |
Organic net sales
growth (decline) (non-GAAP measure) |
$ |
(6.6 |
) |
|
(1.2 |
) |
|
$ |
48.2 |
|
|
10.0 |
|
|
$ |
(39.6 |
) |
|
(2.5 |
) |
|
$ |
194.9 |
|
|
14.2 |
|
HUBBELL
INCORPORATEDAdjusted EBITDA from Continuing
Operations(unaudited)(in
millions)
|
Three Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
Change |
Net income from
continuing operations |
$ |
202.0 |
|
$ |
152.0 |
|
|
33 |
% |
Provision for income
taxes |
|
63.0 |
|
|
38.8 |
|
|
|
Interest expense,
net |
|
7.8 |
|
|
12.1 |
|
|
|
Other expense
(income), net |
|
3.5 |
|
|
(0.8 |
) |
|
|
Depreciation and
amortization |
|
37.6 |
|
|
38.2 |
|
|
|
Pension
charge |
|
— |
|
|
1.5 |
|
|
|
Subtotal |
|
111.9 |
|
|
89.8 |
|
|
|
Adjusted
EBITDA |
$ |
313.9 |
|
$ |
241.8 |
|
|
30 |
% |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
Change |
Net income from
continuing operations |
$ |
593.6 |
|
$ |
392.9 |
|
|
51 |
% |
Provision for income
taxes |
|
180.2 |
|
|
107.3 |
|
|
|
Interest expense,
net |
|
26.7 |
|
|
37.9 |
|
|
|
Other expense
(income), net |
|
12.4 |
|
|
(6.9 |
) |
|
|
Depreciation and
amortization |
|
110.1 |
|
|
107.6 |
|
|
|
Pension
charge |
|
— |
|
|
5.9 |
|
|
|
Subtotal |
|
329.4 |
|
|
251.8 |
|
|
|
Adjusted
EBITDA |
$ |
923.0 |
|
$ |
644.7 |
|
|
43 |
% |
HUBBELL
INCORPORATEDRestructuring and Related Costs from
Continuing Operations Included in Consolidated
Results(unaudited)(in millions,
except per share amounts)
|
Three Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Costs of goods sold |
|
S&A expense |
|
Total |
Restructuring costs
(GAAP Measure) |
$ |
1.0 |
|
$ |
5.4 |
|
$ |
0.1 |
|
$ |
1.1 |
|
$ |
1.1 |
|
$ |
6.5 |
Restructuring related
costs |
|
1.4 |
|
|
0.9 |
|
|
— |
|
|
0.1 |
|
|
1.4 |
|
|
1.0 |
Restructuring and
related costs (non-GAAP measure) |
$ |
2.4 |
|
$ |
6.3 |
|
$ |
0.1 |
|
$ |
1.2 |
|
$ |
2.5 |
|
$ |
7.5 |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Costs of goods sold |
|
S&A expense |
|
Total |
Restructuring costs
(GAAP Measure) |
$ |
3.2 |
|
$ |
7.7 |
|
$ |
0.2 |
|
$ |
2.0 |
|
$ |
3.4 |
|
$ |
9.7 |
Restructuring related
costs |
|
5.0 |
|
|
3.4 |
|
|
0.2 |
|
|
1.7 |
|
|
5.2 |
|
|
5.1 |
Restructuring and
related costs (non-GAAP measure) |
$ |
8.2 |
|
$ |
11.1 |
|
$ |
0.4 |
|
$ |
3.7 |
|
$ |
8.6 |
|
$ |
14.8 |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
Restructuring and
related (benefit) costs included in Cost of goods sold (non-GAAP
measure) |
|
|
|
|
|
|
|
Utility Solutions |
$ |
(0.2 |
) |
|
$ |
1.8 |
|
$ |
2.7 |
|
$ |
5.2 |
Electrical Solutions |
|
2.6 |
|
|
|
4.5 |
|
|
5.5 |
|
|
5.9 |
Total |
$ |
2.4 |
|
|
$ |
6.3 |
|
$ |
8.2 |
|
$ |
11.1 |
Restructuring and
related costs included in Selling & administrative expenses
(non-GAAP measure) |
|
|
|
|
|
|
|
Utility Solutions |
$ |
0.1 |
|
|
$ |
— |
|
$ |
0.3 |
|
$ |
0.6 |
Electrical Solutions |
|
— |
|
|
|
1.2 |
|
|
0.1 |
|
|
3.1 |
Total |
$ |
0.1 |
|
|
$ |
1.2 |
|
$ |
0.4 |
|
$ |
3.7 |
|
|
|
|
|
|
|
|
Impact on Income
before income taxes from continuing operations (non-GAAP
measure) |
$ |
2.5 |
|
|
$ |
7.5 |
|
$ |
8.6 |
|
$ |
14.8 |
Impact on Net income
available to Hubbell common shareholders - continuing operations
(non-GAAP measure) |
|
1.9 |
|
|
|
5.7 |
|
|
6.5 |
|
|
11.4 |
Impact on Diluted
earnings per share from continuing operations (non-GAAP
measure) |
$ |
0.04 |
|
|
$ |
0.11 |
|
$ |
0.12 |
|
$ |
0.21 |
HUBBELL
INCORPORATEDAdditional Non-GAAP Financial
Measures(unaudited)(in
millions)
Ratios of Total Debt to Total Capital and Net Debt to
Total Capital
|
September 30, 2023 |
|
December 31, 2022 |
Total Debt (GAAP
measure) |
$ |
1,443.0 |
|
|
$ |
1,442.6 |
|
Total Hubbell
Shareholders’ Equity |
|
2,739.1 |
|
|
|
2,360.9 |
|
Total
Capital |
$ |
4,182.1 |
|
|
$ |
3,803.5 |
|
Total Debt to Total
Capital (GAAP measure) |
|
35 |
% |
|
|
38 |
% |
Less: Cash and
Investments |
$ |
652.3 |
|
|
$ |
520.7 |
|
Net Debt (non-GAAP
measure) |
$ |
790.7 |
|
|
$ |
921.9 |
|
Net Debt to Total
Capital (non-GAAP measure) |
|
19 |
% |
|
|
24 |
% |
Free Cash Flow Reconciliation
Free Cash Flow Reconciliation
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net cash provided by
operating activities from continuing operations (GAAP
measure) |
$ |
193.9 |
|
|
$ |
219.6 |
|
|
$ |
535.3 |
|
|
$ |
393.8 |
|
|
Less: Capital
expenditures |
|
(34.9 |
) |
|
|
(25.3 |
) |
|
|
(103.8 |
) |
|
|
(67.2 |
) |
|
Free cash flow
(non-GAAP measure) |
$ |
159.0 |
|
|
$ |
194.3 |
|
|
$ |
431.5 |
|
|
$ |
326.6 |
|
|
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