Hubbell Reports Third Quarter Results; Net Sales of $789.7 Million and Earnings Per Diluted Share of $1.45

  Hubbell Reports Third Quarter Results; Net Sales of $789.7 Million and
  Earnings Per Diluted Share of $1.45

Business Wire

SHELTON, Conn. -- October 18, 2012

Hubbell Incorporated (NYSE: HUBA, HUBB) today reported operating results for
the third quarter ended September 30, 2012.

Net sales in the third quarter of 2012 were $789.7 million, an increase of 3%
compared to the $764.3 million reported in the third quarter of 2011.
Operating income was $135.1 million, or 17.1% of net sales, compared to $125.3
million, or 16.4% of net sales, for the comparable period of 2011. Net income
in the third quarter of 2012 was $87.1 million versus $82.4 million reported
in the third quarter of 2011. Earnings per diluted share were $1.45 in the
third quarter of 2012 compared to $1.37 reported in the third quarter of 2011.
Free cash flow (defined as cash flow from operations less capital
expenditures) was $77.1 million in the third quarter of 2012 versus $90.6
million reported in the comparable period of 2011.

For the first nine months of 2012 net sales were $2.3 billion, an increase of
8% compared to the same period last year. Operating income was $361.3 million,
or 15.8% of net sales, compared to $314.0 million, or 14.7% of net sales, for
the comparable period of 2011. Net income in the first nine months of 2012 was
$227.8 million, an increase of 15% compared to the $197.9 million reported in
the first nine months of 2011. Earnings per diluted share were $3.80, or 17%
above the $3.25 reported for the comparable period of 2011. Free cash flow was
$160.7 million compared to $175.9 million reported in the first nine months of
2011.

OPERATIONS REVIEW

Timothy H. Powers, Chairman and Chief Executive Officer said, “I am very
pleased with our third quarter results. Despite a challenging macro
environment, our sales increased 3% due to higher organic growth. Acquisitions
added two percentage points to our sales growth in the quarter and were
essentially offset by unfavorable foreign currency rates. We also expanded our
operating margin to 17.1%, 70 basis points above the third quarter of 2011
with both our Electrical and Power segments contributing.”

“Looking at our end markets, we experienced a slower economy than anticipated
during the third quarter. The U.S. non-residential new construction market
appeared to get weaker and we have yet to see any meaningful improvement in
this area. Renovation and relight projects, including LED fixtures, continued
to grow in the quarter. Our other construction related end market,
residential, also showed improvement. North American electrical utility demand
increased due to the strength of transmission projects while international and
construction markets weakened. Industrial demand was mixed with continued
higher growth in the energy related industries while our MRO related
industrial businesses slowed.”

SEGMENT REVIEW

The comments and year-over-year percentages in this segment review are based
on third quarter results in 2012 and 2011.

Electrical segment net sales in the third quarter of 2012 increased 5% to
$551.8 million compared to $526.6 million reported in the third quarter of
2011. The sales increase was led by higher demand in the energy and
residential markets. Acquisitions added 3% to sales in the quarter while the
impact of unfavorable foreign exchange rates reduced sales by 2%. Compared to
the third quarter of 2011, operating income increased 11% to $90.7 million, or
16.4% of net sales. The increase in operating income was primarily due to
price realization and lower commodity costs. These benefits were partially
offset by higher costs, including pension and benefit related expenses, in
excess of productivity improvements.

Hubbell’s Power segment net sales in the third quarter of 2012 were $237.9
million compared to $237.7 million reported in the third quarter of 2011. The
sales were essentially flat as higher levels of transmission spending were
offset by weaker demand in the international and construction markets. In
addition, unfavorable foreign exchange rates reduced sales by 2%. Compared to
the third quarter of 2011, operating income increased 1% to $44.4 million, or
18.7% of net sales. The slight increase in operating income was primarily due
to price realization and productivity improvements in excess of cost
increases.

SUMMARY & OUTLOOK

Mr. Powers commented, “Looking at the remainder of 2012, we remain on track to
deliver another year of record results despite macro economic uncertainty. For
the full year 2012, we now expect net sales to increase by approximately 6%
and operating margins to expand by approximately 70 basis points.”

Mr. Powers concluded, “Looking ahead to 2013, third party forecasts for our
end markets have recently moderated but still point to modest growth for next
year. However, we remain cautious given the uncertainty surrounding the
upcoming elections, potential U.S. fiscal cliff and some recent weakness in
the global market. Given this level of near term uncertainty, we expect to
provide a more detailed outlook on our next scheduled conference call in
January. We are more optimistic with the medium to long term outlook. We
expect a more meaningful and sustainable recovery in the construction markets
which remain at or near trough levels. Those markets represent approximately
fifty percent of our overall sales and we are well positioned to participate
in that recovery. We also expect to benefit from growth trends in the energy
related markets as well transmission project spending. We plan to remain
active on the acquisition front looking across our portfolio for opportunities
to extend our brands and value to our customers. From a profitability
perspective, our objective remains to continue expanding operating margin. We
plan to accomplish this through both higher volumes, including new product
introductions, as well as continued efforts and focus on productivity
improvements throughout the organization.”

Certain statements contained herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These include statements about capital resources, performance and results of
operations and are based on the Company's reasonable current expectations. In
addition, all statements regarding anticipated growth or improvement in
operating results, anticipated market conditions, and economic recovery are
forward-looking. These statements may be identified by the use of
forward-looking words or phrases such as “improved,” “leading,” “improving,”
“continuing growth,” “continued,” “ranging,” “contributing,” “primarily,”
“plan,” “expect,” “anticipated,” “expected,” “expectations,” “should result,”
“uncertain,” “goals,” “projected,” “on track,” “likely,” “intend” and others.
Such forward-looking statements involve numerous assumptions, known and
unknown risks, uncertainties and other factors which may cause actual and
future performance or achievements of the Company to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, but are not limited to:
achieving sales levels to fulfill revenue expectations; unexpected costs or
charges, certain of which may be outside the control of the Company;
anticipated impacts from the Federal stimulus package; expected benefits of
process improvement and other lean initiatives; the expected benefit and
effect of the business information system initiative and streamlining
programs; the availability and costs of raw materials and purchased
components; realization of price increases; the ability to achieve projected
levels of efficiencies and cost reduction measures; general economic and
business conditions; competition; and other factors described in our
Securities and Exchange Commission filings, including the “Business,” “Risk
Factors,” and “Quantitative and Qualitative Disclosures about Market Risk”
Sections in the Annual Report on Form 10-K for the year ended December 31,
2011.

Hubbell Incorporated is an international manufacturer of quality electrical
and electronic products for a broad range of non-residential and residential
construction, industrial and utility applications. With 2011 revenues of $2.9
billion, Hubbell Incorporated operates manufacturing facilities in the United
States, Canada, Switzerland, Puerto Rico, Mexico, the People’s Republic of
China, Italy, the United Kingdom, Brazil and Australia. Hubbell also
participates in joint ventures in Taiwan and Hong Kong, and maintains sales
offices in Singapore, the People’s Republic of China, India, Mexico, South
Korea and the Middle East. The corporate headquarters is located in Shelton,
CT.

                          
HUBBELL INCORPORATED

Condensed Consolidated Statement of Income

(unaudited)

(in millions, except per share amounts)
                                                    
                             Three Months Ended      Nine Months Ended

                             September 30            September 30
                                                              
                             2012        2011        2012          2011
                                                                  
Net Sales                    $  789.7   $  764.3   $  2,291.9   $  2,131.6
Cost of goods sold             521.2     512.0     1,529.5     1,444.2
Gross Profit                     268.5       252.3       762.4         687.4
Selling & administrative       133.4     127.0     401.1       373.4
expenses
Operating income                 135.1       125.3       361.3         314.0
Operating income as a % of       17.1%       16.4%       15.8%         14.7%
Net sales
Interest expense, net            (7.2)       (7.3)       (21.5)        (22.3)
Other income (expense),        1.1       -         (0.1)       (3.8)
net
Total other expense, net         (6.1)       (7.3)       (21.6)        (26.1)
Income before income taxes       129.0       118.0       339.7         287.9
Provision for income taxes     41.4      34.7      110.5       88.2
Net income                   $  87.6    $  83.3    $  229.2     $  199.7
Less: Net income
attributable to                0.5       0.9       1.4         1.8

noncontrolling interest
Net income attributable to   $  87.1    $  82.4    $  227.8     $  197.9
Hubbell
                                                                       
                                                                       
Earnings Per Share:
Basic                        $  1.47    $  1.38    $  3.84      $  3.29
Diluted                      $  1.45    $  1.37    $  3.80      $  3.25
                            
Cash dividends per common    $  0.41    $  0.38    $  1.23      $  1.14
share
                                                                       

                               
HUBBELL INCORPORATED

Condensed Consolidated Balance Sheet

(unaudited)

(in millions)
                                                        
                                                             
                                    September 30, 2012       December 31, 2011
ASSETS
                                                             
Cash and cash equivalents         $ 605.6                  $ 569.6
Short-term investments              9.0                      12.8
Accounts receivable, net            468.6                    394.3
Inventories, net                    356.3                    318.3
Deferred taxes and other           53.1                    58.5
                                                             
TOTAL CURRENT ASSETS                1,492.6                  1,353.5
                                                             
Property, plant and equipment,      356.9                    359.6
net
Investments                         38.0                     42.0
Goodwill                            742.4                    727.3
Intangible assets, net              280.6                    269.5
Other long-term assets             61.8                    94.6
                                                             
TOTAL ASSETS                      $ 2,972.3                $ 2,846.5
                                                             
LIABILITIES AND EQUITY
                                                             
Short-term debt                   $ 0.2                    $ 2.9
Accounts payable                    220.0                    215.7
Accrued salaries, wages and         67.1                     71.1
employee benefits
Accrued insurance                   43.3                     46.2
Dividends payable                   24.3                     22.5
Other accrued liabilities          138.1                   133.7
                                                             
TOTAL CURRENT LIABILITIES           493.0                    492.1
                                                             
Long-term debt                      596.6                    596.3
Other non-current liabilities      264.1                   284.6
                                                             
TOTAL LIABILITIES                   1,353.7                  1,373.0
                                                             
Hubbell Shareholders' Equity        1,612.5                  1,467.8
Noncontrolling interest            6.1                     5.7
TOTAL EQUITY                       1,618.6                 1,473.5
                                                             
TOTAL LIABILITIES AND EQUITY      $ 2,972.3                $ 2,846.5
                                                             

                                             
HUBBELL INCORPORATED

Condensed Consolidated Statement of Cash Flows

(unaudited)

(in millions)
                                                                
                                                                       
                                              Nine Months Ended

                                              September 30
                                                                  
                                              2012                 2011
                                                                       
                                                                       
Cash Flows From Operating Activities
Net income attributable to Hubbell            $   227.8          $  197.9
Depreciation and amortization                       49.2               51.7
Stock-based compensation expense                    8.0                7.7
Deferred income taxes                               16.0               14.5
Changes in working capital                          (98.0)             (60.2)
Contributions to defined benefit pension            (22.0)             (2.1)
plans
Other, net                                       11.0             7.7
                                                                       
Net cash provided by operating activities        192.0            217.2
                                                                       
Cash Flows From Investing Activities
Capital expenditures                                (31.3)             (41.3)
Acquisition of businesses, net of cash              (53.0)             -
acquired
Net change in investments                           8.7                (5.8)
Other, net                                       13.7             5.5
                                                                       
Net cash used in investing activities            (61.9)           (41.6)
                                                                       
Cash Flows From Financing Activities
Short-term debt borrowings, net                     (2.7)              0.6
Payment of dividends                                (71.3)             (67.7)
Repurchase of common shares                         (55.6)             (137.7)
Proceeds from exercise of stock options             21.4               17.2
Other, net                                       10.7             3.4
                                                                       
Net cash used in financing activities            (97.5)           (184.2)
                                                                       
Effect of foreign exchange rate changes          3.4              (0.3)
on cash and cash equivalents
                                                                       
Increase (decrease) in cash and cash                36.0               (8.9)
equivalents
Cash and cash equivalents
Beginning of period                              569.6            520.7
End of period                                 $   605.6          $  511.8
                                                                       


HUBBELL INCORPORATED

Segment Information

(unaudited)

(in millions)
                                                          
                                                                       
                                                                       
                     Three Months Ended            Nine Months Ended

                     September 30                  September 30
                     2012          2011            2012            2011
                                                                       
                                                                       
Net Sales
Electrical           $  551.8     $  526.6       $  1,593.2     $  1,490.6
Power                  237.9       237.7         698.7         641.0
Total Net Sales      $  789.7     $  764.3       $  2,291.9     $  2,131.6
                                                                       
                                                                       
Operating Income
Electrical           $  90.7      $  81.5        $  235.7       $  208.3
Power                  44.4        43.8          125.6         105.7
Total Operating      $  135.1     $  125.3       $  361.3       $  314.0
Income
                                                                       
                                                                       
Operating Income
as a % of Net
Sales
Electrical               16.4%         15.5%           14.8%           14.0%
Power                    18.7%         18.4%           18.0%           16.5%
Total                    17.1%         16.4%           15.8%           14.7%
                                                                       

                     
HUBBELL INCORPORATED

Earnings Per Share Calculation

(unaudited)

(in millions, except per share amounts)
                                                   
                         Three Months Ended              Nine Months Ended

                         September 30                    September 30
                         2012      2011                 2012       2011
Numerator:                                                          
  Net income
  attributable to        $  87.1   $  82.4             $  227.8   $  197.9
  Hubbell
  Less: Earnings
  allocated to             0.3      0.2                0.8       0.7
  participating
  securities
  Net income
  available to           $  86.8   $  82.2             $  227.0   $  197.2
  common
  shareholders
                                                                         
Denominator:
  Average number of
  common shares              59.1       59.3                 59.2        59.9
  outstanding
  Potential dilutive       0.6      0.6                0.6       0.7
  shares
  Average number of
  diluted shares           59.7     59.9               59.8      60.6
  outstanding
                                                                         
Earnings per Share:
  Basic                  $  1.47   $  1.38             $  3.84    $  3.29
  Diluted                $  1.45   $  1.37             $  3.80    $  3.25
                                                                         

                                     
HUBBELL INCORPORATED

Non-GAAP Financial Measures

(unaudited)

(in millions)
                                                          
Ratios of Total Debt to Total Capital  
and Net Debt to Total Capital
                                                                      
                                        September 30,             December 31,
                                        2012                      2011
   Total Debt                           $   596.8                 $   599.2
   Total Hubbell's Shareholders'           1,612.5                  1,467.8
   Equity
   Total Capital                        $   2,209.3               $   2,067.0
                                                                      
   Total Debt to Total Capital              27%                       29%
                                                                      
   Total Debt                           $   596.8                 $   599.2
   Less:          Cash and cash             (605.6)                   (569.6)
                  equivalents
                  Investments              (47.0)                   (54.8)
   Net Debt                             $   (55.8)                $   (25.2)
                                                                      
   Net Debt to Total Capital                (3%)                      (1%)
                                                                      
   Note: Management believes that net debt to capital is a useful measure
   regarding Hubbell's financial
   leverage for evaluating the Company's ability to meet its funding needs.
                                                                      
                                                                      
Free Cash Flow Reconciliation          
                                                                      
                                        Nine Months Ended September 30
                                        2012                      2011
                                                                      
   Net cash provided by operating       $   192.0                 $   217.2
   activities
   Less:          Capital                  (31.3)                   (41.3)
                  Expenditures
   Free cash flow                       $   160.7                 $   175.9
                                                                      
   Note: Management believes that free cash flow provides useful information
   regarding Hubbell's ability
   to generate cash without reliance on external financings. In addition,
   management uses free cash flow
   to evaluate the resources available for investments in the business,
   strategic acquisitions and further
   strengthening the balance sheet.
   

Contact:

Hubbell Incorporated
James M. Farrell, 475-882-4000
 
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