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Hubbell Annual Report, Year Ended Dec 31, 2005

Filing Date
Filed March 8, 2006
Period End
December 31, 2005
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 8, 2006. Cited figures are marked; the original filing is the authoritative source.

Hubbell Incorporated (HUBB) reported net sales of $2.1 billiona for 2005, up 5.6% from $1,993.0 million in 2004, led by the Power and Industrial Technology segments, which grew 18% and 17% respectively.

Operating income rose to $226.8 millionb from $212.6 million, with operating margin of 10.8% versus 10.7% in 2004. Net income was $165.1 million, or $2.67 diluted earnings per share, compared with $154.7 million and $2.51 in 2004. The Electrical segment, the largest at $1,496.8 million in sales, saw its operating margin fall to 9.5% from 10.6% as unabsorbed factory costs, commodity costs and the SAP system rollout weighed on results.

Cash flow from operating activities was $184.1 millionc in both 2005 and 2004. Hubbell repaid $100 million of senior notes at maturity in October 2005, reducing total debt to $228.8 million from $299.0 million, and debt to total capitalization fell to 19% from 24%. The company repurchased $62.7 million of common stock during 2005 and completed five small acquisitions for $54.3 million.

A new $100 milliond share repurchase program was approved in February 2006. For 2006, management expects sales growth of 5%-7% excluding currency effects, diluted EPS of $2.60-$2.80, an effective tax rate of approximately 29.5% (versus 23.5% in 2005), and free cash flow of $100-$150 million. Management also anticipates an approximate $0.11 per diluted share impact from stock-based compensation expense under SFAS 123(R).

02—Key points

Key Highlights

  1. Net sales of $2,104.9 million in 2005, up from $1,993.0 million in 2004; Power segment sales rose 18% and Industrial Technology rose 17%.
  2. Diluted EPS of $2.67 in 2005 versus $2.51 in 2004; net income of $165.1 million versus $154.7 million.
  3. Electrical segment, 71% of 2005 revenue, saw operating margin decline to 9.5% from 10.6% due to unabsorbed factory costs, commodity costs and SAP-related inefficiencies.
  4. Total debt reduced to $228.8 million from $299.0 million after the $100 million senior notes repayment; debt to total capitalization fell to 19% from 24%.
  5. Cash from operations was $184.1 million in both 2005 and 2004; capital expenditures rose to $73.4 million from $39.1 million.
  6. 2006 guidance calls for 5%-7% sales growth excluding currency effects, diluted EPS of $2.60-$2.80, and a 29.5% effective tax rate.
  7. Board approved a new $100 million share repurchase authorization in February 2006, to be implemented after the $60 million program is completed.

03—Questions

Frequently Asked Questions

  1. How did Hubbell perform in 2005 compared with 2004?

    Net sales grew 5.6% to $2,104.9 million, operating income increased to $226.8 million from $212.6 million, and diluted EPS rose to $2.67 from $2.51. Growth was led by the Power and Industrial Technology segments, helped by price increases, storm-related shipments and acquisitions.

  2. What drove the weaker Electrical segment results?

    Electrical segment operating margin fell to 9.5% from 10.6%, with operating income of $142.2 million versus $156.7 million. The filing cites unabsorbed costs from lower unit volumes, higher commodity, freight and utility costs not fully offset by price increases, and inefficiencies tied to the SAP implementation and a factory closure.

  3. What is the outlook for 2006?

    Management expects overall sales growth of 5%-7% excluding currency effects, with Electrical and Industrial Technology leading. Full-year operating profit margin is expected to be equal to or slightly lower than 2005, and diluted EPS is expected in the range of $2.60-$2.80, including about $0.11 per share of stock-based compensation expense.

  4. How strong is Hubbell's balance sheet and liquidity?

    At year-end 2005, total debt was $228.8 million and shareholders' equity was $998.1 million, with cash and investments of $310.7 million. The company had $178 million of unused commitments under its $200 million bank credit facility, which expires in October 2009.

  5. What did Hubbell do with its capital in 2005?

    Hubbell repaid $100 million of senior notes, paid $80.6 million in dividends, repurchased $62.7 million of common stock and acquired five businesses for $54.3 million. Capital expenditures totaled $73.4 million, including software spending for the enterprise-wide SAP system.

04—Continue

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