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Hubbell Annual Report, Year Ended Dec 31, 2004

Filing Date
Filed March 9, 2005
Period End
December 31, 2004
Security
HUBB
In the record · 2016–202610-K1110-Q338-K110

HUBB filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 110 current reports (8-K) between 2016 and 2026.

  1. Restructuring8-K · Jan ’17Jan ’17
  2. Leadership change8-K · Mar ’19Mar ’19
  3. Material agreement8-K · Mar ’21Mar ’21
  4. Material agreement8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed March 9, 2005. Cited figures are marked; the original filing is the authoritative source.

Hubbell Incorporated (HUBB) reported 2004 net sales of $1,993.0 milliona, up from $1,770.7 million in 2003, and net income of $154.7 million, or $2.51 diluted earnings per share, compared with $115.1 million and $1.91 in 2003.

Operating income rose to $212.6 millionb from $171.9 million, and operating margin improved to 10.7% from 9.7%. The Electrical segment, which accounted for about 74% of revenue, drove most of the growth, with net sales up 12% to $1,476.8 million. Power sales rose 16% to $386.2 million and Industrial Technology sales rose 4% to $130.0 million.

The 2004 results were helped by a $10.2 millionc tax benefit from the closing of an IRS examination, while special charges totaled $16.7 million, mainly tied to the ongoing lighting integration program and the closure of a Puerto Rico wiring device factory. Cash flow weakened in 2004, with operating cash flow of $185.0 million versus $242.2 million in 2003, driven mainly by higher accounts receivable and inventory. Debt was $299.0 million at year-end, and cash and investments of $407.2 million exceeded total debt, giving a net debt figure of $(108.2) million.

The company disclosed a $100 milliond senior note due October 2005 that it expects to repay from cash and short-term investments. Management's 2005 outlook calls for sales growth of 5%-7% excluding currency effects, an operating margin improvement of about one percentage point, an effective tax rate of 29%-30%, and lighting-related charges of $20-$30 million. The filing also discloses that Chief Financial Officer William T.

Tolley was placed on paid administrative leave on November 5, 2004, and that Gregory F. Covino serves as Corporate Controller and Interim Chief Financial Officer.

Backlog at December 31, 2004 was $137.5 million, up from $114.2 million a year earlier. The company reported a debt-to-capitalization ratio of 24%, down from 26%, and stated that it had no material off-balance sheet arrangements.

02—Key points

Key Highlights

  1. Net sales rose 13% to $1,993.0 million in 2004, with all three segments contributing to growth.
  2. Net income increased to $154.7 million, or $2.51 per diluted share, from $115.1 million, or $1.91, in 2003.
  3. Operating margin improved to 10.7% from 9.7%, aided by higher sales, improved gross margin of 28.2%, and lower selling and administrative expenses as a percentage of sales.
  4. Net income benefited from a $10.2 million tax benefit tied to the completion of IRS examinations through 2001; the effective tax rate was 21.6% versus 26% in 2003.
  5. Operating cash flow fell to $185.0 million from $242.2 million, mainly because of higher receivables and inventory.
  6. Cash and investments of $407.2 million exceeded total debt of $299.0 million; debt-to-capitalization improved to 24% from 26%.
  7. 2005 outlook calls for sales growth of 5%-7% excluding currency effects and a one-point improvement in operating margin, with lighting-related charges of $20-$30 million expected.

03—Questions

Frequently Asked Questions

  1. How did Hubbell perform financially in 2004?

    Net sales were $1,993.0 million, up 13% from $1,770.7 million in 2003. Net income was $154.7 million, or $2.51 per diluted share, compared with $115.1 million, or $1.91, a year earlier. Operating income rose to $212.6 million from $171.9 million.

  2. Which segment contributed most to growth?

    The Electrical segment, which accounted for about 74% of 2004 revenue, grew net sales 12% to $1,476.8 million, with operating income rising to $173.4 million from $136.3 million before special charges. Power segment sales grew 16% to $386.2 million, and Industrial Technology grew 4% to $130.0 million.

  3. What special items affected 2004 results?

    The company recorded pretax special charges of $16.7 million, mostly related to its lighting business integration program and the closure of a wiring device factory in Puerto Rico. A $10.2 million tax benefit from closing an IRS examination also lifted net income.

  4. What is the company's debt and liquidity position?

    Total debt was $299.0 million at December 31, 2004, while cash and investments totaled $407.2 million. The company expects to repay $100 million of senior notes due October 2005 using cash and short-term investments, and it had a $200 million unused bank credit facility expiring in October 2009.

  5. What does management expect for 2005?

    Management expects sales growth of 5%-7% excluding currency effects, operating margin to improve by about one percentage point, an effective tax rate of 29%-30%, and lighting-related charges of $20-$30 million. Capital spending is expected to be $20-$30 million higher than in 2004, and free cash flow is projected at $100-$150 million.

04—Continue

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