01—Abstract
Summary
Summary of the 10-K filed February 13, 2013. Cited figures are marked; the original filing is the authoritative source.
Hubbell Incorporated's 10-K for fiscal 2012 reports net sales of $3.04 billiona, up 6% from $2.87 billion in 2011, driven mainly by higher organic volume, with acquisitions and price realization also contributing.
Operating income rose 11% to $471.8 millionb, and operating margin improved to 15.5% from 14.8%. Net income attributable to Hubbell was $299.7 million, or $5.00 per diluted share, compared with $4.42 in 2011. Gross margin expanded to 33.2% from 32.2%, reflecting price realization, productivity improvements and slightly lower material costs.
The Electrical segment generated $2.11 billionc of sales and $303.7 million of operating income, while the Power segment generated $929.8 million of sales and $168.1 million of operating income, with an operating margin of 18.1%. Cash from operations was $349.1 million, and year-end cash and cash equivalents were $645.0 million against total debt of $596.7 million. The company completed four acquisitions for $90.7 million in 2012 and acquired Continental Industries for approximately $37 million in January 2013.
Management guided to 2013 net sales growth of three to five percent and roughly 40 basis points of operating margin expansion. The filing also highlights governance and leadership changes. David G.
Nord became President and Chief Executive Officer effective January 1, 2013, succeeding Timothy H. Powers, who remained Chairman. Class A shares carry 20 votes per share and hold about 73% of voting power, and the quarterly dividend was raised twice during 2012, to $0.45d per share.
02—Key points
Key Highlights
- Net sales rose to $3,044.4 million in 2012 from $2,871.6 million in 2011, an increase of 6%, mainly from higher organic volume.
- Operating income increased 11% to $471.8 million, and operating margin improved 70 basis points to 15.5%.
- Net income attributable to Hubbell was $299.7 million, or $5.00 per diluted share, versus $4.42 in 2011.
- The Power segment's operating margin improved 180 basis points to 18.1%, with operating income up 19% to $168.1 million.
- Cash flow from operations was $349.1 million, and year-end cash and cash equivalents were $645.0 million.
- Quarterly dividend was increased from $0.38 to $0.41 in February 2012 and to $0.45 in December 2012.
- 2013 guidance calls for net sales growth of three to five percent and an operating margin expansion of about 40 basis points.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Hubbell kept $0.10.
- Revenue$3.04B100.0%
- Cost of revenue−$2.03B66.8%
- Gross profit$1.01B33.2%
- Operating costs−$540.4M17.8%
- Operating income$471.8M15.5%
- Interest, other & tax−$172.1M5.7%
- Net income$299.7M9.8%
Where FY2012 revenue went
$3.04B- Cost of revenue: $2.03B, 67% of revenue
- SG&A: $540.4M, 18% of revenue
- Net income: $299.7M, 9.8% of revenue
- Interest, other & tax: $172.1M, 5.7% of revenue
Kept 9.8% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 13, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $3.04B$2.87B | +6.0% |
| Cost of Revenue | $2.03B$1.95B | +4.3% |
| Gross Profit | $1.01B$923.70M | +9.6% |
| SG&A Expenses | $540.40M$499.90M | +8.1% |
| Operating Income | $471.80M$423.80M | +11.3% |
| Interest Expense | $30.80M$30.90M | −0.3% |
| Net Income | $299.70M$267.90M | +11.9% |
| EPS (Basic) | $5.05$4.47 | +13.0% |
| EPS (Diluted) | $5.00$4.42 | +13.1% |
| Shares Outstanding (Basic) | 59.10M59.70M | −1.0% |
| Shares Outstanding (Diluted) | 59.80M60.40M | −1.0% |
05—Questions
Frequently Asked Questions
What drove Hubbell's revenue growth in 2012?
Net sales increased 6% to $3.04 billion. Volume added four percentage points, acquisitions added two points, and price realization added one point, while foreign currency translation reduced net sales by one point.
How did the two segments perform?
The Electrical segment's net sales rose 6% to $2,114.6 million with operating income of $303.7 million. The Power segment's net sales rose 7% to $929.8 million with operating income of $168.1 million, an 18.1% operating margin.
What is management's outlook for 2013?
Management expects overall net sales to increase three to five percent versus 2012, including two percentage points from acquisitions, and expects operating margin to expand by about 40 basis points. The 2013 tax rate is expected to decrease slightly to approximately 31.5%.
What leadership changes took place?
David G. Nord became President and Chief Executive Officer effective January 1, 2013, succeeding Timothy H. Powers, who remained Chairman of the Board. William R. Sperry was named Senior Vice President and Chief Financial Officer in June 2012.
What are the main shareholder structure considerations?
Class A common stock carries 20 votes per share and held approximately 73% of the voting power at December 31, 2012, while the Hubbell Trust and Roche Trust together held about 49% of the Class A stock. This concentration gives Class A holders significant influence over matters put to a shareholder vote.
06—Continue