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Hubbell Annual Report, Year Ended Dec 31, 2007

Filing Date
Filed February 25, 2008
Period End
December 31, 2007
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 February 25, 2008. Cited figures are marked; the original filing is the authoritative source.

Hubbell Incorporated reported 2007 net sales of $2,533.9 milliona, up from $2,414.3 million in 2006, with net income of $208.3 million and diluted earnings per share of $3.50, compared with $2.59 in 2006.

Operating income rose to $299.4 millionb, or 11.8% of sales, from $233.9 million, or 9.7%, as gross profit margin improved to 29.0% from 27.2%. The filing attributes the margin gains mainly to selling price increases and productivity improvements, with the Industrial Technology and Power segments leading sales growth of 23% and 11%, respectively. The Electrical segment, the largest at $1,639.9 million in sales, was essentially flat as residential lighting weakness offset gains in electrical products and wiring systems.

Cash flow from operating activities more than doubled to $335.2 millionc, and the company repurchased about 3.6 million shares for $193.1 million. Total debt was $236.1 million, with debt to total capitalization of 18%.

Management's 2008 outlook calls for sales growth of 4%-6% excluding currency effects, operating margin expansion of about one percentage point, and diluted EPS of $3.70d-$3.90. Management expects residential markets to decline significantly in 2008, and it completed the January 2008 acquisition of Kurt Versen, Inc. for approximately $100 million.

02—Key points

Key Highlights

  1. Net sales rose to $2,533.9 million in 2007 from $2,414.3 million in 2006, and operating income increased to $299.4 million from $233.9 million.
  2. Diluted EPS was $3.50 in 2007 versus $2.59 in 2006; net income was $208.3 million versus $158.1 million.
  3. Gross profit margin improved to 29.0% from 27.2%, driven by selling price increases and productivity gains; net cash from operations was $335.2 million versus $139.9 million.
  4. Segment results: Electrical sales $1,639.9 million (operating margin 9.2%), Power $636.6 million (15.3%), Industrial Technology $257.4 million (19.9%).
  5. Share repurchases totaled $193.1 million in 2007 for about 3.6 million shares, and new $200 million repurchase program was approved in December 2007.
  6. 2008 guidance: sales growth of 4%-6% excluding currency, operating margin up about one percentage point, diluted EPS of $3.70-$3.90, and effective tax rate near 30.5%.
  7. Backlog was $246.4 million at December 31, 2007, up from $211.3 million a year earlier, and the company's PCORE acquisition was completed in October 2007 for about $50 million.

03—Questions

Frequently Asked Questions

  1. How did Hubbell's profitability change in 2007?

    Operating income increased to $299.4 million, or 11.8% of net sales, from $233.9 million, or 9.7%, in 2006. The filing attributes the improvement to higher sales and gross profit, partly offset by higher selling and administrative expenses. Net income rose to $208.3 million from $158.1 million.

  2. What does management expect for 2008?

    Management expects overall 2008 sales growth of 4%-6% excluding currency effects, with the full-year impact of acquisitions contributing 2%-3%. Operating profit margin is expected to rise about one percentage point, and diluted EPS is expected to be in the range of $3.70-$3.90. Residential markets are expected to decline significantly.

  3. What are the main risks the filing highlights?

    The filing cites competitive pressure on pricing, weaker end markets, especially residential construction, availability and cost of raw materials and components, reliance on low-cost-country suppliers, acquisition integration, the SAP business system initiative, customer credit quality, and litigation and environmental matters.

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

    Total debt was $236.1 million and debt to total capitalization was 18%, with cash and investments of $116.7 million. Company repurchased $193.1 million of stock in 2007 and paid $78.4 million in dividends, while the $250 million revolving credit facility was unused at year-end.

  5. What acquisitions did Hubbell make?

    In 2007 Hubbell spent $52.9 million on acquisitions, including PCORE Electric Company for about $50 million in October 2007. In January 2008 it acquired Kurt Versen, Inc. for approximately $100 million, which has annual sales of about $44 million.

04—Continue

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