Hubbell Inc. Business Information, Profile, and History

Company Perspectives:

The Combination of these--commitment to the industry, diversification of product and market, a continuing tradition of quality, partnershi p with the independent electrical distributor, and the experience of accomplishment in research and development--have forged Hubbell Incor porated's exceptional records of growth. The same comprehensive corpo rate capability will expand Hubbell's growth in the commercial, telec ommunications, lighting, utility, industrial, and consumer markets of the future.

History of Hubbell Inc.

Hubbell Inc. produces electrical equipment for commercial, telecommun ications, lighting, utility, industrial, and consumer markets. With m anufacturing divisions and global subsidiaries in North America, Puer to Rico, Mexico, Italy, Switzerland, and the United Kingdom, Hubbell produces items such as lighting fixtures, outlet boxes, wire and cabl e, insulators and surge arrestors, and voice and digital signal proce ssing components. For many decades, Hubbell maintained a modest and u nassuming profile, manufacturing the important products invented by i ts founder, Harvey Hubbell II; one correspondent for Forbes ad monished his readers in 1977 that "unless you are reading this on saf ari, there is probably a Harvey Hubbell invention within six feet of you right now." The company had remained strongly focused on such pro ducts until the 1960s, when it embarked on a diversification program. During the early years of the new millennium, Hubbell has been dedic ated to the technology of generating, transmitting, and utilizing ele ctrical energy.

The Early Years

Hubbell bears the name of inventor and businessman Harvey Hubbell II. Born in Connecticut in 1859, he graduated from high school and began working for companies that manufactured marine engines and printing machinery. During this time, he accumulated several ideas for new inv entions, and in 1888 he set out on his own, opening a small manufactu ring facility in Bridgeport, Connecticut. Hubbell's first product was taken from his own patent for a paper roll holder with a toothed bla de for use in stores that sold wrapping paper. This cutter stand beca me a tremendous success; it was a common feature of retail stores tha t used wrapping paper in the early 1900s and remained in wide use int o the late 20th century.

Hubbell also designed and built a series of new and improved machine tools during his early years in business. In the early 1890s, he bega n to consider the opportunities presented by Edison's new electric li ght bulb, and the fruits of his work would secure both the future of his company and his place in history. On a visit to New York City, Hu bbell happened upon a penny arcade, featuring several electrically op erated games that, although popular with customers, caused maintenanc e headaches. Every day, the janitor had to detach each of the power s upply wires for the games from separate terminals in the wall so that he could move them and sweep the floor underneath. After he was done , he faced the tedious task of reconnecting the wires, making sure th at each one went into the proper terminal--the consequence of not doi ng so being a short circuit. Watching the janitor gave Hubbell the id ea for an electrical plug in which the wires were permanently attache d in their proper sequence, so that devices could be easily detached and reattached to their power sources. Hubbell built a prototype, whi ch he tested with the help of the janitor, and later patented it. The two-pronged electrical plug that became standard for electrical appl iances is a direct descendant of this innovation. In 1896 Hubbell pat ented a light bulb socket with an on/off pull chain, another inventio n in use to this day.

In 1901 Hubbell published a 12-page catalogue that listed 63 electric al products of his company's manufacture, and four years later he inc orporated his enterprise as Harvey Hubbell, Inc. In 1909 the company began constructing a four-floor factory and office building that woul d become the first building in New England made of reinforced concret e.

As electricity became the power source of choice in the United States , Hubbell's company did its best to keep up. Its 1917 catalogue was 1 00 pages long and listed more than 1,000 electrical products, includi ng 277 different types and sizes of light bulb sockets. One important product was a toggle light switch, which Hubbell had invented to rep lace the old two-button switch. A line of 288 heavy-duty "Presturn" p roducts marked the company's entry into industrial electrical product s. In the 1920s, the company produced a line of low-voltage devices f or use by farmers who had not tapped into higher-voltage urban electr ical grids. Also during this time, Hubbell developed a device that lo cked streetlamp and household light bulbs firmly in place, filling a need in cities where new trolley cars were producing vibrations that loosened bulbs and caused them to fall out of their sockets.

Harvey Hubbell died in 1927 and was succeeded as president of the com pany by his son, Harvey Hubbell III. The 26-year-old Hubbell had been trained as an electrical engineer and was already at work for the fa mily firm. Under Harvey Hubbell III, the company went public in 1936, a timely move considering that, during the later years of the Great Depression, some employees occasionally had to accept company stock i n lieu of pay. He also proved his business acumen by establishing a n etwork of independent distributors to help market and disseminate the company's products, a system that would help offset the low profile that, traditionally, the company has kept.

During World War II, much of the company's capacity was devoted to ma nufacturing electrical components for the military, including battery -charging systems for the M-4 Sherman tank. Hubbell also opened a pla nt in Lexington, Kentucky, in part to meet demand for its military pr oducts and also because its original factory in Connecticut was consi dered vulnerable to air attack.

Postwar Expansion and Diversification

After the war, Harvey Hubbell Inc. shifted its focus back to making p roducts for the civilian economy. It custom designed and produced ele ctrical devices for the luxury ocean liner United States, which was l aunched in 1952 and required electrical wiring that would resist the corrosive effects of salt air while fitting into narrow stateroom par titions. At the end of the 1950s, the company began to ponder the ben efits of diversification. Until that point, Hubbell had been a conser vative company with a reputation for making high-quality products tha t sold for higher-than-average prices. Its narrow range of products, however, limited opportunities for growth and left it vulnerable to c yclical ups and downs. Even with its strong desire to diversify, howe ver, Hubbell chose its targets carefully and did not stray far from i ts field of expertise. In 1962 it acquired Kellems, a Connecticut-bas ed manufacturer of mesh grips, cord connectors, and wire management p roducts. In 1963 it bought Grelco, an English company that made indus trial controls, the California-based Shalda Lighting, and the Chicago -based Ralco Manufacturing. Hubbell later merged Grelco into its Brit ish subsidiary, Harvey Hubbell Ltd. In 1966 Hubbell purchased Euclid Electric, which it later renamed Hubbell Industrial Controls. The fol lowing year, Harvey Hubbell Ltd. acquired Watford Electric & Manu facturing, solidifying its presence as a producer of industrial contr ols in Great Britain.

Continued Growth in the 1970s and 1980s

Harvey Hubbell III died in 1968 and was succeeded as CEO by George We ppler, who became the first non-Hubbell to run the company in its 80 years of existence. Under Weppler, the pace of Hubbell's acquisition campaign was maintained. In 1969 the company acquired Kerite, a Conne cticut-based manufacturer of high-voltage electrical cables used main ly by utility companies and railroads. The next year, it acquired Ste ber Lighting to augment its light fixtures business. In 1972 Hubbell entered the telecommunications equipment field when it purchased Puls e Communications, a Virginia-based manufacturer of voice and data sig nal processing components. Also that year Hubbell acquired Southern I ndustrial Diecasting. Moreover, the company established a presence in South America with its Brazilian subsidiary, Harvey Hubbell do Brasi l, after acquiring H.K. Porter do Brasil in 1973 and Metal-Arte Indus trias Sao Paolo in 1974.

Weppler was succeeded by Robert Dixon in 1975. Dixon had spent 12 yea rs studying electrical and mechanical engineering in night school and was a firm believer in Hubbell's odyssey through diversification and expansion. "If we had stayed only in the wiring business, our number s would look better but we wouldn't be as strong," he told a Forbe s correspondent in 1982, adding, "I even question whether we'd st ill be independent." Under Dixon, Hubbell acquired Hermetic Refrigera tion, a Phoenix-based re-manufacturer of air conditioning compressors , in 1976. In 1978 it purchased Ohio Brass, which made insulation and surge arrestors for high-voltage electrical equipment, as well as mi ning equipment. In 1981 the company spun off Harvey Hubbell do Brasil , and picked up Arrestor, an American manufacturer of switch, junctio n, and outlet boxes and electrical fittings.

By this time, Hubbell's diversification had produced mixed results. O n the one hand, the company's original wiring and light fixture busin ess accounted for a disproportionate share of profits into the 1980s, a sign that acquired companies were not proving terribly lucrative d espite the fact that Hubbell had made few outright missteps. On the o ther hand, Hubbell generated record profits every year from 1961 to 1 983. In 1961, the company posted a relatively modest $22 million in sales; by 1981 sales had reached $445.8 million. Robert Dixon retired as CEO in 1983 and was succeeded by Fred Dusto, who presided over the final acquisitions of Hubbell's long spree: Miller Lighting and Killark Electric Manufacturing, both purchased in 1985. In 1986 t he company shortened its name to its current form.

The 1990s

Dusto retired in 1987 and was succeeded by George Ratcliffe, who had once served as the company's chief counsel. Under Ratcliffe, Hubbell spent aggressively on upgrading and automating its capital equipment as well as on research and development. This reinvestment produced pr ofit margins higher than those of its competitors during the 1980s, a s the company was able to cut labor costs and also sell innovative pr oducts that commanded relatively high returns. Hubbell also made furt her acquisitions during this time. In 1991 it purchased Westinghouse' s Bryant Electric division, which made wiring devices for industrial applications. In 1993 Hubbell acquired Hipotronics, a manufacturer of high-voltage cables and test and measurement equipment, and E.M. Wei gmann and Co., Inc., a manufacturer of industrial enclosures.

Hubbell continued to add to its roster of companies those that perfor med well in its core lighting operations. Recognizing that electricit y's central role would not be diminished in the coming years, Hubbell 's electrical equipment empire spanned across the globe and across ap plications. Because no alternative power source even remotely threate ned to challenge electricity, Hubbell's strategy was sound, as its ac quisitions provided for stable long-term growth.

In March 1994, Hubbell purchased A.B. Chance Industries, a powerful p resence in the electrical utility sector with a number of products su ch as overhead and underground distribution switches, fuses, cutouts, insulators, and safety equipment. Hubbell's next acquisition was in 1996, when it bought Gleason Reel Corporation, an industrial-grade el ectrical cable producer. In September 1997, Hubbell acquired Namar/Wi recon, a leading producer of self-contained electrical switches and r eceptacle tools used in the manufacture of prefabricated housing and recreational vehicles. Buoyed by its new operations, Hubbell's sales soared from $832.4 million in 1994 to $1.38 billion in 1997. Even more impressive was the company's profits, which increased from $66.3 million in 1993 to $130.3 million in 1997.

The year 1998 witnessed several key acquisitions. On November 17, Hub bell announced its impending purchase of Sterner Lighting, a designer and manufacturer of specification-grade outdoor lighting fixtures, a s well as custom lighting products. Sterner's wares could often be fo und in indoor sports arenas. This producer of light fixtures for corr osive and hazardous locations complemented Hubbell's existing busines ses. Sales kept rising through 1998, as Hubbell achieved more than 36;169 million in profit. Other acquisitions completed in 1998 and 19 99 included: Chalmit Lighting based in Glasgow, Scotland; Tennessee-b ased Chardon Electrical Components; and Haefely Test AG of Switzerlan d.

At the close of the century, Hubbell's four key divisions remained ce ntered on lighting and its application in a variety of spheres. With manufacturing facilities in Canada, Mexico, Puerto Rico, Singapore, t he United Kingdom, and the United States, Hubbell had grown considera bly beyond its humble origins. Joint ventures in Germany, South Ameri ca, and Taiwan, as well as sales offices in Asia, Mexico, and the Mid dle East, rounded out Hubbell's far-flung operations.

Hubbell in the New Millennium

During the early years of the new millennium, Hubbell remained focuse d on strengthening its core operations. It made several acquisitions, including Hawke Cable Glands Ltd., which was based in the United Kin gdom, and Cooper Power Systems Inc.'s pole line hardware segment. One of its more significant purchases was completed during 2002. In Apri l of that year, Hubbell added U.S. Industries Inc.'s domestic lightin g group, LCA Group, to its arsenal in a $250 million deal. The pu rchase proved beneficial for both parties. U.S. Industries was in the midst of a cost reduction program and needed to shed businesses unre lated to its core bath and plumbing operations. Hubbell jumped at the chance to buy the unit, which had secured $575 million in sales in 2001. Management believed the addition of LCA would prove lucrativ e and expected sales in its lighting products segment to climb to mor e than $800 million as a result of the deal. Overall, sales durin g 2002 increased by 21 percent over the previous year.

During this time period, the company shed several businesses that had proved unprofitable in the long term. With the sale of The Kerite Co mpany, Hubbell exited the insulated cable business. In 2000, the comp any jettisoned its WavePacer DSL business after determining it could not effectively compete with large telecommunications firms in this m arket. Hubbell also was forced to cut costs as the economy began its slowdown during 2001. As such, the company reduced its work force, pa id down debt, and reduced its inventories and capacity.

Hubbell's efforts appeared to pay off. Net income increased by 72 per cent over the previous year in 2002. Sales and profits continued to c limb in 2003 as well as 2004. During 2005, the company continued work on controlling costs and shed nearly 6 percent of its work force. A slowdown in nonresidential construction--one of Hubbell's key markets --as well as high oil prices that affected freight and utility costs proved challenging in 2005. Nevertheless, Hubbell stood on solid grou nd with Electrical, Power, and Industrial Technology as its three mai n operating segments.

Although Harvey Hubbell II is not widely remembered today, his invent ions were instrumental in facilitating and disseminating the pioneeri ng work of more famous inventors such as Edison and Westinghouse. Sim ilarly, the company that Hubbell founded has labored for more than a century without widespread recognition for the company's name or prod ucts. Nevertheless, the success of its products, which people use and rely upon daily, left Hubbell well positioned for profitability in t he years to come.

Principal Subsidiaries: Artesanias Baja, S.A. de C.V. (Mexico) ; Dual-Lite Manufacturing Inc.; GAI-Tronics Corporation; Gleason Reel Corporation; Haefely Test AG (Switzerland); Harvey Hubbell Caribe, I nc.; Hipotronics, Inc.; Hubbell Building Automation, Inc.; Hubbell de Mexico, S.A. de C.V.; Hubbell Inc. (Delaware); Hubbell Industrial Co ntrols, Inc.; Hubbell Lighting, Inc.; Hubbell Ltd. (United Kingdom); Hubbell Power Systems, Inc.; Hubbell-Taiwan Co., Ltd. (50%); Prog ress Lighting, Inc.; Pulse Communications, Inc.; Hubbell Canada L.P.

Principal Competitors: Catalina Lighting Inc.; Cooper Industri es, Inc.; Thomas & Betts Corporation.

Chronology

• Key Dates:
• 1901: Harvey Hubbell publishes his first catalogue.
• 1905: Harvey Hubbell, Incorporated is established.
• 1909: The company builds its first factory.
• 1927: Harvey Hubbell dies and is succeeded at the helm of the company by Harvey III.
• 1968: George Weppler chairs the company and quickens Hubbell's pace of acquisitions.
• 1972: Hubbell enters the telecommunications equipment field.
• 1986: Harvey Hubbell Inc. shortens its name to its current for m.
• 1994: A.B. Chance Industries Co., Inc. is acquired.
• 1998: Hubbell purchases Sterner Lighting.
• 2002: The company adds LCA Group to its holdings.