Hubbell's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Hubbell Inc. (HUB.B)

Q2 2012 Earnings Call

July 19, 2012 10:00 am ET

Executives

Jim Farrell - Director, IR

Tim Powers - Chairman & CEO

Dave Nord - President & COO

Bill Sperry - SVP & CFO

Analysts

Christopher Glynn - Oppenheimer

Rich Kwas - Wells Fargo

Steve Tusa - JPMorgan

Jeff Sprague - Vertical Research Partners

Brent Thielman - D.A. Davidson & Company

Mike Wood - Macquarie Capital

Jeff Beach - Stifel Nicolaus

Carter Shoop - KeyBanc

Presentation

Operator

Good day, everyone. Welcome to the Hubbell Incorporated second quarter 2012 earnings conference call. As a reminder, today's call is being recorded. Now for opening remarks and introductions, I would like to turn the call over to Jim Farrell. Please go ahead, sir.

Jim Farrell

Good morning everyone, and thank you for joining us. Hubbell announced the second quarter results for 2012 this morning. The press release and earning slide materials have been posted to the Investor Section of our website at www.hubbell.com. Please note that our comments this morning may include statements related to the expected future results of our company and are therefore forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.

Therefore, please note the discussion of forward-looking statements in our press release and consider it incorporated by reference into this call. In addition, comments made here also include some non-GAAP financial measures. Those measures are reconciled to the comparable GAAP measures and are included in the press release and the earnings slide materials. Now let me turn the call over to our Chairman and CEO Tim Powers.

Tim Powers

Thanks, Jim. Welcome and thank you for joining us this morning. Before go into the specifics of the quarter, I want to bring everyone up to date on some recent organizational changes. Dave Nord who has been Chief Financial Officer since joining Hubbell in 2005, has been promoted to President and Chief Operating Officer. Dave has done an outstanding job as CFO implementing change and driving organizational focus to help support our profit margin expansion. We look forward to Dave’s leadership in his new role. Bill Sperry who has been our Vice President of Corporate Strategy and Development has been promoted to Chief Financial Officer. Bill joined Hubbell in 2008 and has been instrumental in supporting our acquisition strategy as well as providing valuable insights into our company to the investment community. I am confident that Dave and Bill will continue to provide the necessary leadership and direction to enable Hubbell to reach higher levels of performance. I wish each of them much success in their new roles.

I have just a couple of high level comments and then I will turn the discussion over to Dave on the quarter. First of all on our execution, I was very pleased that the second quarter provided our company with opportunity to provide the highest levels of service that we've seen in many, many quarters. Customer delivery performance was excellent, our plant factory performance was excellent resulting in good overall execution for the quarter as you can see in our results.

Second, on one of the markets that we participate in and that is residential. We see a bottoming and positive signs of improvement. We had higher levels of business with the national home builders, through our DIY channels and over the internet. So we feel that we’re at the bottom and beginning to start up in the residential market. And then to discuss further the macro uncertainty of the economy and our view of that and while there is great uncertainty, we remain focused on our own performance. We understand what's going on around us, but we remain committed to introduce more new products, have higher levels of capital spending and greater efforts on acquisition in 2012 than we’ve done in 2011. And with those comments, I will turn it over to Dave.

Dave Nord

Thanks Tim. Good morning everyone. Before I get into the quarter, let me just provide a little commentary on the new role. I am obviously honored and delighted to you know that Tim and the Board have the confidence to give me this responsibility. I certainly view it a bit of, I have done such a great job at helping the organization set targets that they thought it would be a good opportunity for me to go and get more involved in the operations to help deliver those targets. So, I welcome the challenge and the opportunity. I have been out in the last month and half visiting some of our locations, spending some time in the factory floor and I can tell you that, that just gives me more confidence in the capabilities in the organization, what we’ve achieved to date and what the runway is going forward. We've got a strong team. We've got great programs in place and a lot more opportunities to go. So I am really looking forward to this.

I am also really delighted that you know Bill joined us several years ago, brought him on board and he is probably been instrumental in energizing our acquisition activity, lot of focus on our strategy as well as enhancing our image and our relationship with the investment community. So all those things I think are natural fits and I think the transition here has been very seamless.

With that, let me get into a little color on the second quarter. Turning first to page 3. Sales in the quarter were up 10% and that was really based on broad-based growth. So a strong growth continues in our harsh and hazardous business, up 20%. The power business continues to perform well on all fronts, including the benefit, a little bit at the end of the quarter but certainly leading in to the third quarter. But recent storms that we’ve experienced in the Midwest and Mid-Atlantic, we did what we normally do and we’re very responsive, delivered almost three quarters of the requirements within the day, the utilities need them, which is one of our signature capabilities. So not a lot of benefit in the second quarter, but some volume benefit that will occur in the third.

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