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<PAGE> 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 MARCH 31, 1995
------------------------------------------
/ / 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
May 3, 1995 were:
Class A ($.01 par value) 5,872,000
Class B ($.01 par value) 27,102,000
<PAGE> 2
HUBBELL INCORPORATED
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
Consolidated Balance Sheet
(Uaudited)
(in thousands)
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and temporary cash investments $ 53,091 $ 38,865
Accounts receivable (net) 147,804 143,862
Inventories 223,077 224,088
Prepaid taxes 32,116 31,666
Other 3,850 6,425
---------- ----------
TOTAL CURRENT ASSETS 459,938 444,906
Property, Plant and Equipment 200,464 201,968
Other Assets:
Investments 209,963 205,939
Purchase price in excess of net assets of companies acquired (net) 140,570 141,570
Property held as investment 8,696 10,027
Other 34,143 37,159
---------- ----------
$1,053,774 $1,041,569
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Commercial paper and bank borrowings $ 141,057 $ 139,350
Accounts payable 31,934 37,539
Accrued salaries, wages and employee benefits 25,244 26,287
Accrued income taxes 39,323 28,332
Dividends Payable 14,043 13,494
Accrued restructuring charge 14,000 14,000
Other accrued liabilities 63,609 73,071
---------- ----------
TOTAL CURRENT LIABILITIES 329,210 332,073
Long-Term Debt 2,700 2,700
Other Non-Current Liabilities 85,226 84,876
Deferred Income Taxes 12,440 12,924
Shareholders' Equity 624,198 608,996
---------- ----------
See notes to consolidated financial statements $1,053,774 $1,041,569
========== ==========
</TABLE>
2
<PAGE> 3
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH, 31
----------
1995 1994
---- ----
<S> <C> <C>
NET SALES $278,434 $207,044
Cost of goods sold 197,934 142,504
-------- --------
GROSS PROFIT 80,500 64,540
Selling & administrative expenses 42,180 34,101
-------- --------
OPERATING INCOME 38,320 30,439
-------- --------
OTHER INCOME (EXPENSE):
Investment income 4,003 3,866
Interest expense (2,213) (867)
Other income (expense), net (1,193) (562)
-------- --------
TOTAL OTHER INCOME, NET 597 2,437
-------- --------
INCOME BEFORE INCOME TAXES 38,917 32,876
Provision for income taxes 10,508 8,548
-------- --------
NET INCOME $ 28,409 $ 24,328
======== ========
EARNINGS PER SHARE $ 0.85 $ 0.73
======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH, 31
---------
CASH FLOWS FROM OPERATING ACTIVITIES 1995 1994
---- ----
<S> <C> <C>
Net income $ 28,409 $ 24,328
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 9,826 8,326
Deferred income taxes (934) 1,259
Changes in assets and liabilities, net of the effect of business acquisitions:
(Increase)/Decrease in accounts receivable (3,942) (7,032)
(Increase)/Decrease in inventories 1,011 (1,867)
(Increase)/Decrease in other current assets 2,575 5,333
Increase/(Decrease) in current liabilities (excluding dividends payable) (5,119) 3,808
Increase/(Decrease) in restructuring accruals (2,915) (3,273)
(Increase)/Decrease in other, net 6,355 84
-------- --------
Net cash provided by operating activities 35,266 30,966
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of businesses --- ---
Additions to property, plant and equipment (9,344) (8,356)
Purchase of non-current investments (1,974) (4,475)
Sale of non-current investments -- --
Other, net 2,030 555
-------- --------
Net cash used in investing activities (9,288) (12,276)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of dividends (13,494) (12,816)
Short-term borrowing 1,707 8,100
Exercise of stock options 35 1,259
-------- --------
Net cash provided (used) in financing activities (11,752) (3,457)
-------- ---------
Increase (Decrease) in cash and temporary cash investments 14,226 15,233
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 38,865 44,231
-------- --------
End of period $ 53,091 $ 59,464
======== ========
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
HUBBELL INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. Inventories are classified as follows: (in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---- ----
<S> <C> <C>
Raw Material $ 77,409 $ 79,065
Work-in-Process 57,964 59,035
Finished Goods 137,262 135,042
-------- --------
$272,635 $273,142
Excess of current
Production costs over
LIFO cost basis 49,558 49,054
-------- --------
$223,077 $224,088
======== ========
</TABLE>
2. Shareholders' Equity comprises: (in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---- ----
<S> <C> <C>
Common Stock, $.01 par value:
Class A-authorized 50,000,000 shares,
outstanding 5,874,364 and 5,895,097 shares $ 59 $ 59
Class B-authorized 150,000,000 shares,
outstanding 27,098,867 and 27,056,945 shares 271 271
Additional paid-in-capital 427,554 441,469
Retained earnings 205,403 176,994
Unrealized holding gains (losses) on securities (837) (2,147)
Cumulative translation adjustments (8,252) (7,650)
-------- --------
$624,198 $608,996
======== ========
</TABLE>
3. On April 19, 1994, the Company acquired A.B. Chance Industries, Inc.,
a manufacturer of electrical apparatus, anchors, hardware, insulators,
hot-line tools and other safety equipment. The acquisition was for
$110 million in cash and was recorded under the purchase method of
accounting. Accordingly, the results of operations for the acquired
business has been included in the consolidated statement of income
only from its acquisition date. Had the business been acquired on the
first day of 1994 unaudited proforma net sales and net income for the
period ending March 31, 1994 would have been $248,694,000 and
$25,398,000 respectively. The proforma results are not necessarily
indicative of the results that would have been obtained had the
acquisition occurred on January 1, 1994, nor are they necessarily
indicative of the results that may occur in the future.
5
<PAGE> 6
HUBBELL INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
4. 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.
5. The results of operations for the three month period ended March 31,
1995 and 1994 are not necessarily indicative of the results to be
expected for the full year.
6
<PAGE> 7
HUBBELL INCORPORATED
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1995
A) RESULTS OF OPERATIONS
Consolidated net sales increased by 34% due to the inclusion of A.B. Chance,
Inc., which was acquired in April 1994; and generally higher sales levels
throughout the Company's operating units with particularly strong growth
reported by Bryant Electric, Premise Wiring, Raco and Lighting; combined with
improved market conditions for the Pulsecom subsidiary. Operating income
increased 26% on the higher sales volume. The rate of increase was moderated
by inclusion of the A.B. Chance products which have a lower operating margin
than the average for the Company's other businesses and the strong increases
in lower margined electrical fittings and fluorescent lighting products.
Low voltage segment sales increased 14% on higher shipments of fluorescent
lighting, industrial controls and wiring devices reflecting the improved
economic conditions in the United States and Canada. Operating income
increased 10% on higher sales which included a higher mix of lower margined
products.
High voltage segment sales increased by more than 50% due to the inclusion
of A.B. Chance which was acquired in 1994 and improved sales of power cable,
test and measurement equipment, surge arresters and insulators. Profits
increased on higher volume but at a lower rate than sales reflecting the
lower-margined products of the acquired business.
Other industry segment sales increased more than 50% on higher shipments of
fittings, switch and outlet boxes and wire management products combined with
improved market conditions for telecommunication products. Operating income
increased in line with sales growth.
Interest expense increased reflecting a higher level of short-term borrowing
and higher interest rates. The effective tax rate for 1995 was 27% compared
to 26% in the first quarter of 1994. Net income and earnings per share
increased 16%, respectively, over last year.
The Company's restructuring program is proceeding according to management's
plan. During the quarter, production start-up was initiated in the new
manufacturing facility for the Kerite Company; the first phase of capacity
expansion in Puerto Rico was completed and consolidation of warehousing and
distribution operations is continuing. At March 31, 1995 the restructuring
accrual balance was $25,024,000 of which $14,000,000 is classified as a
current liability. Through March 31, 1995, cumulative costs charged to the
restructuring accrual were $24,976,000 as follows (in thousands):
<TABLE>
<CAPTION>
Personnel Plant & Equipment Total
Costs Costs
-----
Relocation Disposal
---------- --------
<S> <C> <C> <C> <C>
1993 $ 4,456 $2,794 $ -- $ 7,250
1994 7,550 2,036 5,225 14,811
1995 Y-T-D 2,122 481 312 2,915
------- ------ ------ -------
Cumulative $14,128 $5,311 $5,537 $24,976
======= ====== ====== =======
</TABLE>
7
<PAGE> 8
HUBBELL INCORPORATED
B) LIQUIDITY AND CAPITAL RESOURCES
MARCH 31, 1995
At March 31, 1995, commercial paper and bank borrowings of $141,057,000 and
long-term debt of $2,700,000 were 23% of shareholder's equity. Working
capital was $130,728,000 and the current ratio was 1.4 to 1.
8
<PAGE> 9
HUBBELL INCORPORATED
PART II -- OTHER INFORMATION
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on May 1, 1995:
1. The following nine (9) individuals were elected directors of the
Company for the ensuing year to serve until the next Annual Meeting of
Shareholders of the Company and until their respective successors may
be elected and qualified:
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL VOTES FOR VOTES WITHHELD
------------------ --------- --------------
<S> <C> <C>
E. Richard Brooks 126,036,049 479,020
George W. Edwards, Jr. 126,030,005 485,064
Andrew McNally, IV 126,110,653 404,416
Daniel J. Meyer 126,047,861 467,208
Horace G. McDonell 126,003,408 511,661
Joel S. Hoffman 125,754,140 760,929
G. Jackson Ratcliffe 126,113,444 401,625
John A. Urquhart 126,070,054 445,015
Malcolm Wallop 125,989,074 525,995
</TABLE>
2. Price Waterhouse was ratified as independent accountants to examine
the annual financial statements for the Company for the year 1995
receiving 126,181,396 affirmative votes, 120,882 negative votes and
212,824 votes abstained.
9
<PAGE> 10
HUBBELL INCORPORATED
PART II -- OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
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 March 31,
1995.
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: May 10, 1995 /s/ Harry B. Rowell, Jr.
------------ ----------------------------------------
Harry B. Rowell, Jr.
Executive Vice President
(Chief Financial and Accounting Officer)
10
<PAGE> 11
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -----------
11. Computation of Earnings Per Share
27. Financial Data Schedule (Electronic filings only)
<PAGE> 1
EXHIBIT 11
HUBBELL INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1995 1994
---- ----
<S> <C> <C>
Net Income $28,409 $24,328
======= =======
Weighted average number of common shares
outstanding during the year 32,973 32,850
Common equivalent shares 308 449
------- -------
Average number of shares outstanding 33,281 33,299
======= =======
Earnings per Share $ 0.85 $ 0.73
======= =======
</TABLE>
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 53,091
<SECURITIES> 0
<RECEIVABLES> 153,266
<ALLOWANCES> 5,462
<INVENTORY> 223,077
<CURRENT-ASSETS> 459,938
<PP&E> 411,063
<DEPRECIATION> 210,599
<TOTAL-ASSETS> 1,053,774
<CURRENT-LIABILITIES> 329,210
<BONDS> 2,700
<COMMON> 330
0
0
<OTHER-SE> 623,868
<TOTAL-LIABILITY-AND-EQUITY> 1,053,774
<SALES> 278,434
<TOTAL-REVENUES> 278,434
<CGS> 197,934
<TOTAL-COSTS> 197,934
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 414
<INTEREST-EXPENSE> 2,213
<INCOME-PRETAX> 38,917
<INCOME-TAX> 10,508
<INCOME-CONTINUING> 28,409
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,409
<EPS-PRIMARY> .85
<EPS-DILUTED> .85
</TABLE>
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