Hubbell Reports Fourth Quarter Results: Net Sales of $752.5 Million and Earnings Per Diluted Share of $1.20

Thu Jan 24, 2013 7:25am EST

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SHELTON, CT.  (January 24, 2013) - Hubbell Incorporated (NYSE:  HUBA, HUBB) today reported
operating results for the fourth quarter ended December 31, 2012.

Net sales in the fourth quarter of 2012 were $752.5 million, an increase of 2% compared to the
$740.0 million reported in the fourth quarter of 2011. Operating income was $110.5 million, or
14.7% of net sales, compared to $109.8 million, or 14.8% of net sales, for the comparable period
of 2011. Net income in the fourth quarter of 2012 was $71.9 million versus $70.0 million reported
in the fourth quarter of 2011. Earnings per diluted share were $1.20 in the fourth quarter of 2012
compared to $1.17 reported in the fourth quarter of 2011. Free cash flow (defined as cash flow
from operations less capital expenditures) was $139.3 million in the fourth quarter of 2012 versus
$103.7 million reported in the comparable period of 2011.  

Net sales for the full year 2012 were $3.0 billion, an increase of 6% compared to 2011. Operating
income was $471.8 million, or 15.5% of net sales, compared to $423.8 million, or 14.8% of net
sales, for the comparable period of 2011. Net income for the full year 2012 was $299.7 million, an
increase of 12% compared to the $267.9 million reported in 2011. Earnings per diluted share were
$5.00, or 13% above the $4.42 reported for the comparable period of 2011. Free cash flow was
$300.0 million compared to $279.6 million reported in 2011. 

OPERATIONS REVIEW

Timothy H. Powers, Chairman of the Board said "Before we discuss the financial results, I would
like to take this opportunity to express what an honor and privilege it has been leading Hubbell
over the past decade. As many of you already know, Dave Nord has been appointed President and
Chief Executive Officer while I will remain Chairman of the Board. I am looking forward to working
with Dave and the Board during this transition and am highly confident that the Company will
continue to prosper under Dave's leadership. 

"Now turning to the results, the uncertainty surrounding the U.S. election and the "fiscal cliff"
appeared to have a dampening effect on demand in the fourth quarter. Our overall sales increased
slightly in the quarter with essentially flat organic demand while acquisitions added two
percentage points to our sales growth. From a profitability perspective, we reported operating
margin of 14.7%, in line with our expectations despite some market softening as we exited the
year. I am pleased to report that we completed the acquisition of Continental Industries, Inc. in
January which will be added to our Electrical segment. Continental makes high quality exothermic
welding and connector products and is a strong fit with our Burndy business. This marks the
seventh deal we have completed in the past year and a half and highlights our capabilities in this
area.

"Looking at our end markets, we experienced a slightly weaker environment than anticipated during
the fourth quarter. U.S. non-residential new construction was weak as it appeared that spending
decisions may have been delayed due to economic uncertainty. Within this market, relight projects
and demand for LED fixtures were areas of strength in the quarter. The residential market was
another area of growth for us and the recovery is clearly underway. North American electrical
utility demand for our products was higher due in large part to Hurricane Sandy as well as
increased spending on transmission projects. At the same time, we experienced weaker demand for
maintenance related distribution products as utility budgets were limited due to higher levels of
spending earlier in the year. Industrial demand was mixed with solid growth in the energy related
industries while our high voltage test businesses were much weaker."

Mr. Powers added "In reviewing the full year results, we achieved the highest sales and earnings
per share in our history. For the year, our sales increased 6% with balanced growth between our
two segments. We experienced growth in several key areas; utility, oil and gas and residential
markets as well as continued higher demand for energy efficient lighting used for renovation and
relighting. Looking at our profitability, we finished the year at 15.5% operating margin which is
well above the same point in our previous cycle. This margin level was attained through a
disciplined process of managing costs and driving productivity across the enterprise and as a
result we have evolved into a structurally more profitable organization. I would also like to
highlight that we have increased the pace of acquisitions; adding to our branded product breadth.
In addition, we raised our dividend two times during the course of the year and returned
approximately $75 million to shareholders by repurchasing nearly one million shares reflecting our
confidence in Hubbell's cash flow generating abilities and commitment to increasing shareholder
value."

SEGMENT REVIEW

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

Electrical segment net sales in the fourth quarter of 2012 increased 2% to $521.4 million compared
to $513.6 million reported in the fourth quarter of 2011. The increase was due to acquisitions
which contributed 2% to sales in the quarter. In addition, higher demand in the energy and
residential markets was offset by weakness in high voltage test equipment. Compared to the fourth
quarter of 2011, operating income decreased 8% to $68.0 million, or 13.0% of net sales. The
decrease in operating income was primarily due to a less favorable product mix and higher costs,
including pension and benefit related expenses.     

Hubbell's Power segment net sales in the fourth quarter of 2012 were $231.1 million compared to
$226.4 million reported in the fourth quarter of 2011. The acquisition that was completed in the
4th quarter of 2012 contributed 2% to sales. The organic sales were essentially flat as the
favorable impact of storm sales and large transmission related projects were offset by lower
levels of spending for distribution maintenance. Compared to the fourth quarter of 2011, operating
income increased 18% to $42.5 million, or 18.4% of net sales. The increase in operating income was
primarily due to productivity improvements and price realization in excess of cost increases. 

SUMMARY & OUTLOOK

David G. Nord, President and Chief Executive Officer commented "Looking to 2013, we expect overall
sales to increase in the 3 to 5% range comprised of low single digit growth from organic volume
and 2% from acquisitions. We expect the volume increases to be more weighted towards the second
half of the year due to anticipated strengthening in the markets and more favorable comparisons to
the prior year. Within our Electrical segment, we expect 3 to 5% growth led by strong growth in
our residential businesses. The non-residential new construction market is likely to remain
challenging in the near term but third party forecasts still point to some improvement in the
second half of the year and relight opportunities should also have a favorable impact. The
industrial market is expected to be flat to slightly higher with modest increases in factory
utilization and the energy markets partially offset by lower demand for high voltage test
equipment. The Power segment is expected to grow in the 4 to 6% range with acquisitions
contributing 2%. We expect modest growth for maintenance and repair work on the distribution and
transmission networks. Spending for transmission related projects is expected to remain at
historically high levels but the growth rate will be lower than the past couple of years."

Mr. Nord added "Turning to profitability, we expect that operating margins will expand by
approximately 40 basis points in 2013 primarily due to leveraging the higher volume. As always, we
will continue focusing on carefully balancing productivity and pricing actions to offset all cost
increases. Our tax rate is expected to be approximately 31.5% in 2013 which includes the two year
benefit of the reinstatement of the R&D tax credit." 

Mr. Nord concluded "On a more personal note, I am energized by the opportunity to lead an
organization with such a rich heritage as Hubbell. As I look forward, I am excited to work with
Tim, the Board and all of Hubbell's employees to continue to build upon our successes."

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 initiatives 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 2012 revenues of $3.0 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                     Year Ended            
                                                                                December 31                       December 31            
                                                                                                                                         
                                                                          2012               2011           2012               2011      
                                                                                                                                         
 Net Sales                                                              $    752.5         $    740.0    $    3,044.4       $    2,871.6 
 Cost of goods sold                                                          502.7              503.7         2,032.2            1,947.9 
 Gross Profit                                                                249.8              236.3         1,012.2              923.7 
 Selling & administrative expenses                                           139.3              126.5           540.4              499.9 
 Operating income                                                            110.5              109.8           471.8              423.8 
                                Operating income as a % of Net sales         14.7%              14.8%           15.5%              14.8% 
 Interest expense, net                                                       (7.5)              (7.3)          (29.0)             (29.6) 
 Other income (expense), net                                                 (0.9)              (0.6)           (1.0)              (4.4) 
 Total other expense, net                                                    (8.4)              (7.9)          (30.0)             (34.0) 
 Income before income taxes                                                  102.1              101.9           441.8              389.8 
 Provision for income taxes                                                   29.2               31.4           139.7              119.6 
 Net income                                                             $     72.9         $     70.5    $      302.1       $      270.2 
 Less: Net income attributable to noncontrolling interest                      1.0                0.5             2.4                2.3 
 Net income attributable to Hubbell                                     $     71.9         $     70.0    $      299.7       $      267.9 
                                                                                                                                         
                                                                                                                                         
 Earnings Per Share:                                                                                                                     
                                Basic                                   $     1.21         $     1.18    $       5.05       $       4.47 
                                Diluted                                 $     1.20         $     1.17    $       5.00       $       4.42 
                                                                                                                                         
 Cash dividends per common share                                        $     0.45         $     0.38    $       1.68       $       1.52 
                                                                                                                                         
                                                                                                                                         


                                     HUBBELL INCORPORATED                                     
                             Condensed Consolidated Balance Sheet                             
                                         (unaudited)                                          
                                        (in millions)                                         
                                                                                              
                                                                                              
                                                   December 31, 2012       December 31, 2011  
 ASSETS                                                                                       
                                                                                              
 Cash and cash equivalents                      $               645.0   $               569.6 
 Short-term investments                                           8.8                    12.8 
 Accounts receivable, net                                       405.2                   394.3 
 Inventories, net                                               341.7                   318.3 
 Deferred taxes and other                                        55.5                    58.5 
                                                                                              
 TOTAL CURRENT ASSETS                                         1,456.2                 1,353.5 
                                                                                              
 Property, plant and equipment, net                             364.7                   359.6 
 Investments                                                     36.7                    42.0 
 Goodwill                                                       755.5                   727.3 
 Intangible assets, net                                         288.1                   269.5 
 Other long-term assets                                          45.8                    94.6 
                                                                                              
 TOTAL ASSETS                                   $             2,947.0   $             2,846.5 
                                                                                              
 LIABILITIES AND EQUITY                                                                       
                                                                                              
 Short-term debt                                $                   -   $                 2.9 
 Accounts payable                                               213.1                   215.7 
 Accrued salaries, wages and employee benefits                   75.4                    71.1 
 Accrued insurance                                               39.6                    46.2 
 Dividends payable                                                  -                    22.5 
 Other accrued liabilities                                      119.3                   133.7 
                                                                                              
 TOTAL CURRENT LIABILITIES                                      447.4                   492.1 
                                                                                              
 Long-term debt                                                 596.7                   596.3 
 Other non-current liabilities                                  235.0                   284.6 
                                                                                              
 TOTAL LIABILITIES                                            1,279.1                 1,373.0 
                                                                                              
 Hubbell Shareholders' Equity                                 1,661.2                 1,467.8 
 Noncontrolling interest                                          6.7                     5.7 
 TOTAL EQUITY                                                 1,667.9                 1,473.5 
                                                                                              
 TOTAL LIABILITIES AND EQUITY                   $             2,947.0   $             2,846.5 


                                                      HUBBELL INCORPORATED                                                      
                                                 Earnings Per Share Calculation                                                 
                                                          (unaudited)                                                           
                                            (in millions, except per share amounts)                                             
                                                                                                                                
                                                                        Three Months Ended                  Year Ended          
                                                                            December 31                    December 31          
                                                                      2012              2011          2012             2011     
 Numerator:                                                                                                                     
             Net income attributable to Hubbell                    $      71.9         $    70.0   $     299.7       $    267.9 
             Less: Earnings allocated to participating securities          0.2               0.3           1.0              1.0 
             Net income available to common shareholders             $    71.7         $    69.7    $    298.7       $    266.9 
                                                                                                                                
 Denominator:                                                                                                                   
             Average number of common shares outstanding                  59.1              58.9          59.1             59.7 
             Potential dilutive shares                                     0.5               0.6           0.7              0.7 
             Average number of diluted shares outstanding                 59.6              59.5          59.8             60.4 
                                                                                                                                
 Earnings per Share:                                                                                                            
             Basic                                                 $      1.21       $      1.18   $      5.05      $      4.47 
             Diluted                                               $      1.20       $      1.17   $      5.00      $      4.42 


                                             HUBBELL INCORPORATED                                             
                                Condensed Consolidated Statement of Cash Flows                                
                                                 (unaudited)                                                  
                                                (in millions)                                                 
                                                                                                              
                                                                                                              
                                                                               Year Ended December 31         
                                                                                                              
                                                                            2012                   2011       
                                                                                                              
                                                                                                              
 Cash Flows From Operating Activities                                                                         
 Net income attributable to Hubbell                                    $         299.7        $         267.9 
 Depreciation and amortization                                                    66.8                   68.2 
 Stock-based compensation expense                                                 15.8                   15.1 
 Deferred income taxes                                                            27.5                   18.8 
 Changes in working capital                                                     (45.3)                 (21.5) 
 Contributions to defined benefit pension plans                                 (22.6)                 (22.7) 
 Other, net                                                                        7.2                    9.2 
                                                                                                              
 Net cash provided by operating activities                                       349.1                  335.0 
                                                                                                              
 Cash Flows From Investing Activities                                                                         
 Capital expenditures                                                           (49.1)                 (55.4) 
 Acquisition of businesses, net of cash acquired                                (90.7)                 (29.6) 
 Net change in investments                                                         9.9                 (14.4) 
 Other, net                                                                       13.8                   12.9 
                                                                                                              
 Net cash used in investing activities                                         (116.1)                 (86.5) 
                                                                                                              
 Cash Flows From Financing Activities                                                                         
 Short-term debt (repayments) borrowings, net                                    (2.9)                    1.4 
 Payment of dividends                                                          (122.3)                 (90.1) 
 Repurchase of common shares                                                    (75.6)                (137.7) 
 Proceeds from exercise of stock options                                          24.9                   21.9 
 Other, net                                                                       14.2                    6.2 
                                                                                                              
 Net cash used in financing activities                                         (161.7)                (198.3) 
                                                                                                              
 Effect of foreign exchange rate changes on cash and cash equivalents              4.1                  (1.3) 
                                                                                                              
 Increase in cash and cash equivalents                                            75.4                   48.9 
 Cash and cash equivalents                                                                                    
 Beginning of period                                                             569.6                  520.7 
 End of period                                                         $         645.0        $         569.6 


                                                      HUBBELL INCORPORATED                                                       
                                                       Segment Information                                                       
                                                           (unaudited)                                                           
                                                          (in millions)                                                          
                                                                                                                                 
                                                                                                                                 
                                                                                                                                 
                                               Three Months Ended December 31                     Year Ended December 31         
                                                                                                                                 
                                              2012                          2011               2012                   2011       
                                                                                                                                 
                                                                                                                                 
 Net Sales                                                                                                                       
 Electrical                               $            521.4             $        513.6     $     2,114.6          $     2,004.2 
 Power                                                 231.1                      226.4             929.8                  867.4 
 Total Net Sales                          $            752.5             $        740.0     $     3,044.4          $     2,871.6 
                                                                                                                                 
                                                                                                                                 
 Operating Income                                                                                                                
 Electrical                               $             68.0             $         73.7     $       303.7          $       282.0 
 Power                                                  42.5                       36.1             168.1                  141.8 
 Total Operating Income                   $            110.5             $        109.8     $       471.8          $       423.8 
                                                                                                                                 
                                                                                                                                 
 Operating Income as a % of Net Sales                                                                                            
 Electrical                                            13.0%                      14.3%             14.4%                  14.1% 
 Power                                                 18.4%                      15.9%             18.1%                  16.3% 
 Total                                                 14.7%                      14.8%             15.5%                  14.8% 


                                                                                                                                                                          HUBBELL INCORPORATED                                                                                                                                                                          
                                                                                                                                                                      Non-GAAP Financial Measures                                                                                                                                                                       
                                                                                                                                                                              (unaudited)                                                                                                                                                                               
                                                                                                                                                                             (in millions)                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                        
 Ratios of Total Debt to Total Capital and Net Debt to Total Capital                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                   December 31, 2012                                                                                                                                        December 31, 2011                                           
   Total Debt                                                                                                                    $                                                                       596.7                                                                            $                                                                       599.2 
   Total Hubbell's Shareholders' Equity                                                                                                                                                                1,661.2                                                                                                                                                  1,467.8 
   Total Capital                                                                                                                 $                                                                     2,257.9                                                                            $                                                                     2,067.0 
                                                                                                                                                                                                                                                                                                                                                                        
   Total Debt to Total Capital                                                                                                                                                                             26%                                                                                                                                                      29% 
                                                                                                                                                                                                                                                                                                                                                                        
   Total Debt                                                                                                                    $                                                                       596.7                                                                            $                                                                       599.2 
   Less:                                              Cash and cash equivalents                                                                                                                        (645.0)                                                                                                                                                  (569.6) 
                                                      Investments                                                                                                                                       (45.5)                                                                                                                                                   (54.8) 
   Net Debt                                                                                                                      $                                                                      (93.8)                                                                            $                                                                      (25.2) 
                                                                                                                                                                                                                                                                                                                                                                        
   Net Debt to Total Capital                                                                                                                                                                              (4%)                                                                                                                                                     (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                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                             Year Ended December 31                                                                                                                     
                                                                                                                                                         2012                                                                                                                                                     2011                                                  
                                                                                                                                                                                                                                                                                                                                                                        
   Net cash provided by operating activities                                                                                     $                                                                       349.1                                                                            $                                                                       335.0 
   Less:                                              Capital Expenditures                                                                                                                              (49.1)                                                                                                                                                   (55.4) 
   Free cash flow                                                                                                                $                                                                       300.0                                                                            $                                                                       279.6 
                                                                                                                                                                                                                                                                                                                                                                        
   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:   James M. Farrell
           Hubbell Incorporated
           40 Waterview Drive
           P.O. Box 1000
           Shelton, Connecticut  06484
           (475) 882-4000


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