-----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, LgT/9CnHjX3PwXIssMoFMMH366x7bUIBSzCJ9S9BzfWDq8f+/iABo4uKgarkF0n8 dHdA6gkCb30S/c0zLPRlXw== 0000950123-96-004295.txt : 19960813 0000950123-96-004295.hdr.sgml : 19960813 ACCESSION NUMBER: 0000950123-96-004295 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 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: 96608935 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 FOR PERIOD ENDED JUNE 30, 1966 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 JUNE 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 August 5, 1996 were: Class A ($.01 par value) 5,742,550* Class B ($.01 par value) 27,230,300* *Does not reflect the 2-for-1 stock split payable on August 9, 1996. 2 HUBBELL INCORPORATED PART I - FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET (UNAUDITED) (IN THOUSANDS)
June 30, 1996 December 31, 1995 ------------- ----------------- ASSETS Current Assets: Cash and temporary cash investments $ 102,064 $ 86,984 Accounts receivable (net) 175,666 140,765 Inventories 237,809 236,384 Prepaid taxes 31,982 30,958 Other 4,218 5,015 ---------- ---------- TOTAL CURRENT ASSETS 551,739 500,106 Property, Plant and Equipment (net) 212,970 204,190 Other Assets: Investments 167,313 175,656 Purchase price in excess of net assets of companies acquired (net) 159,429 137,941 Property held as investment 8,104 8,329 Other 27,466 31,023 ---------- ---------- $1,127,021 $1,057,245 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Commercial paper and notes $ 18,635 $ --- Accounts payable 44,071 34,272 Accrued salaries, wages and employee benefits 28,237 26,079 Accrued income taxes 34,383 30,711 Dividends payable 17,144 15,475 Accrued restructuring charge 10,000 10,000 Other accrued liabilities 82,849 78,401 ---------- ---------- TOTAL CURRENT LIABILITIES 235,319 194,938 Long-Term Debt 99,427 102,096 Other Non-Current Liabilities 73,425 76,766 Deferred Income Taxes 17,243 16,107 Shareholders' Equity 701,607 667,338 ---------- ---------- $1,127,021 $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 SIX MONTHS ENDED JUNE 30, JUNE 30, -------- -------- 1996 1995 1996 1995 ---- ---- ---- ---- NET SALES $ 328,927 $ 295,006 $ 633,527 $ 573,440 Cost of goods sold 229,881 211,024 444,321 408,958 --------- --------- --------- --------- GROSS PROFIT 99,046 83,982 189,206 164,482 Selling & administrative expenses 48,710 43,179 95,066 85,359 --------- --------- --------- --------- OPERATING INCOME 50,336 40,803 94,140 79,123 --------- --------- --------- --------- OTHER INCOME (EXPENSE): Investment income 3,990 4,230 7,866 8,233 Interest expense (2,139) (2,370) (4,240) (4,583) Other income (expense), net (1,840) (1,462) (2,815) (2,655) --------- --------- --------- --------- TOTAL OTHER INCOME, NET 11 398 811 995 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES 50,347 41,201 94,951 80,118 Provision for income taxes 14,601 11,124 27,536 21,632 --------- --------- --------- --------- NET INCOME $ 35,746 $ 30,077 $ 67,415 $ 58,486 ========= ========= ========= ========= EARNINGS PER SHARE $ 0.53 $ 0.45 $ 1.00 $ 0.88 ========= ========= ========= =========
See notes to consolidated financial statements. 3 4 HUBBELL INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
SIX MONTHS ENDED JUNE 30, -------- CASH FLOWS FROM OPERATING ACTIVITIES 1996 1995 - ------------------------------------ ---- ---- Net income $ 67,415 $ 58,486 Adjustments to reconcile net income to --- net cash provided by operating activities: Depreciation and amortization 21,923 20,071 Deferred income taxes 217 411 Changes in assets and liabilities, net of the effect of business acquisitions: (Increase)/Decrease in accounts receivable (23,921) (8,678) (Increase)/Decrease in inventories 7,973 (5,897) (Increase)/Decrease in other current assets 697 2,405 Increase/(Decrease) in current operating liabilities 16,628 (11,359) Increase/(Decrease) in restructuring accruals (4,971) (5,435) (Increase)/Decrease in other, net 4,136 8,330 --------- --------- Net cash provided by operating activities 90,097 58,334 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of businesses (31,365) --- Additions to property, plant and equipment (19,018) (18,161) Purchases of investments (417) (1,860) Repayments and sales of investments 8,821 36,635 Other, net 2,657 2,734 --------- --------- Net cash used in investing activities (39,322) 19,348 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Payment of dividends (30,968) (27,673) Commercial paper and notes - borrowings (repayments) --- (18,016) Redemption of industrial development bonds (2,700) -- Exercise of stock options 923 1,790 Acquisition of treasury shares (2,950) (3,844) --------- --------- Net cash provided (used) in financing activities (35,695) (47,743) --------- --------- Increase (Decrease) in cash and temporary cash investments 15,080 29,939 CASH AND TEMPORARY CASH INVESTMENTS Beginning of period 86,984 38,865 --------- --------- End of period $ 102,064 $ 68,804 ========= =========
See notes to consolidated financial statements 4 5 HUBBELL INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 (UNAUDITED) 1. Inventories are classified as follows: (in thousands)
JUNE 30, DECEMBER 31, 1996 1995 ---- ---- Raw Material $ 84,608 $ 81,253 Work-in-Process 67,909 64,117 Finished Goods 135,327 140,428 -------- -------- 287,844 285,798 Excess of current Production costs over LIFO cost basis 50,035 49,414 -------- -------- $237,809 $236,384 ======== ========
2. Shareholders' Equity comprises: (in thousands)
JUNE 30, DECEMBER 31, 1996 1995 ---- ---- Common Stock, $.01 par value: Class A-authorized 50,000,000 shares, outstanding 11,506,310 and 5,831,381 shares 115 58 Class B-authorized 150,000,000 shares, outstanding 54,408,122 and 27,110,456 shares 544 271 Additional paid-in-capital 435,548 437,908 Retained earnings 273,081 238,303 Unrealized holding gains (losses) on securities 130 74 Cumulative translation adjustments (7,811) (9,276) --------- --------- $ 701,607 $ 667,338 ========= =========
5 6 HUBBELL INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 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 on a proforma basis to reflect the 2-for-1 stock split payable 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 six months ended June 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 JUNE 30, 1996 FINANCIAL CONDITION At June 30, 1996, the Company's financial position remained strong with working capital of $316.4 million and a current ratio of 2.3 to 1. Total borrowings at June 30, 1996, were $118.1 million, 16.8% of shareholders equity. Cash and temporary cash investments increased $15.1 million for the six months ended June 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 more than 11% for the second quarter and 10% 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 23% for the quarter and 19% for the first six 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. Most units showed modest increases as construction related markets improved from the impact of the severe winter weather in the first quarter. Operating income increased by 17% and 14%, respectively, on higher sales, improved operating efficiencies and inclusion of Gleason since its acquisition. High voltage segment sales increased more than 21% for the quarter and first six 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 10% for the respective periods 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 JUNE 30, 1996 (CONTINUED) Sales through the Company's International units were 6% higher in the quarter and 2% higher than last year while operating profits increased more than 15% 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 at resulting higher tax rates and the impact of our recently completed acquisitions. Net income and earnings per share increased by 19% and 18%, respectively, for the quarter while for the first six months the increases were 15% and 14%, respectively. The Company's restructuring program is proceeding according to management's plan. At June 30, 1996, the restructuring accrual balance was $13,442,000 of which $10,000,000 is classified as current liability. Through June 30, 1996, cumulative costs charged to the restructuring accrual were $36,558,000 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 1,477 2,948 546 4,971 -------- -------- ------- --------- Cumulative $ 16,500 $ 12,826 $ 7,232 $ 36,558 ======== ======== ======= ========
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 ------ ----------- 3a. Hubbell Incorporated Restated Certificate of Incorporation, as amended effective May 13, 1996 (the date of filing with the Secretary of State of the State of Connecticut). Exhibit A of the registrant's proxy statement, dated March 22, 1996, filed on March 27, 1996, is incorporated by reference. 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 June 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: August 12, 1996 /s/ H. B. Rowell, Jr. ---------------------------------------- Harry B. Rowell, Jr. Executive Vice President (Chief Financial and Accounting Officer) 9 10 EXHIBIT INDEX ------------- NUMBER DESCRIPTION ------ ----------- 3a. Hubbell Incorporated Restated Certificate of Incorporation, as amended effective May 13, 1996 (the date of filing with the Secretary of State of the State of Connecticut). Exhibit A of the registrant's proxy statement, dated March 22, 1996, filed on March 27, 1996, is incorporated by reference. 11. Computation of Earnings Per Share 27. Financial Data Schedule (Electronic filings only) 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 SIX MONTHS ENDED JUNE 30, JUNE 30, -------- -------- 1996 1995 1996 1995 ---- ---- ---- ---- Net Income $ 35,746 $30,077 $67,415 $ 58,486 ======== ======= ======= ======== Weighted average number of common shares outstanding during the period 65,915 65,908 65,915 65,906 Common equivalent shares 1,188 794 1,182 726 -------- ------- ------- -------- Average number of shares outstanding 67,103 66,702 67,097 66,632 ======== ====== ======= ======== Earnings per Share $ 0.53 $ 0.45 $ 1.00 $ 0.88
Share data for all periods has been adjusted to reflect the 2-for-1 stock split payable on August 9, 1996, to shareholders of record on July 17, 1996. 10 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1996 JUN-30-1996 102,064 0 181,577 5,911 237,809 551,739 447,941 (234,971) 1,127,021 235,319 0 0 0 659 700,948 1,127,021 633,527 633,527 444,321 444,321 811 894 4,240 94,951 27,536 67,415 0 0 0 67,415 1.00 1.00
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