Hubbell Inc

Good day, and thank you for standing by, and welcome to the Hubble Second Quarter Earnings Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during this session, you need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would like to hand the conference over to your speaker today, Dan Inamorato. Please go ahead.

Thanks, Operator. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing our results for the second quarter 2021. The press release and slides are posted to the investor section of our website at hubble.com. I'm joined today by our Chairman, President, and CEO, Gerben Bakker, and our Executive Vice President and CFO, Bill Sperry. Please note that our comments this morning may include statements related to the expected future results of our company. in our 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. Additionally, comments may also include non-GAAP financial measures. Those measures are reconciled to the comparable GAAP measures and are included in the press release and slides. Now, let me turn the call over to Gerben.

Gerben Bergeron- Great. Thanks, Dan. And good morning, everyone. and thank you for joining us on this busy day to discuss Hubble's second quarter results. I'm going to start my comments on page three with some key takeaways for the quarter. As you can see from our results and our press release this morning, it was a quarter of strong growth for Hubble, with revenues and earnings each up over 20%. We are seeing broad-based growth across both our electrical and utility segments and within each of our major end markets. As anticipated, our operating margins declined year over year in the second quarter due to the lapping of prior year cost actions, as well as inflationary headwinds, which we are actively mitigating through price and productivity. Operationally, our second quarter results are consistent with our prior guidance, but we are now raising our full year adjusted earnings per share expectations at the halfway point. We'll walk you through our guidance in more detail later, but at a high level, we see stronger market growth and a modestly lower full-year tax rate relative to our prior guidance. And while inflationary headwinds are greater than initially anticipated, we are proactively driving incremental price and productivity to offset. We'll give you some more context around each of these dynamics throughout this morning's presentation. Turning to page four to provide some more details on the results, second quarter sales were up 26 percent and organic growth was up 21 percent year over year as markets and customer demand were strong across both segments. In electrical solutions, we saw broad-based inflection across end markets with light industrial continuing to lead the recovery and heavy industrial and non-residential markets beginning to improve as well. We noted coming out of the first quarter that electrical orders had turned positive, and this trend accelerated in the second quarter as demand remained strong and electrical orders continued to exceed shipments. Looking ahead, we expect our electrical markets to benefit from these recoveries in industrial and non-residential markets, as well as longer-term trends toward increased electrification. In utility solutions, we continue to see strong demand for T&D components driven by aging infrastructure and grid modernization trends. Recall that despite the economic impact of the COVID-19 pandemic, our power systems business remained very resilient and grew revenues in 2020 as our electric utility customers are actively investing to upgrade and modernize the grid. These investments are driving attractive growth over the near and long term, including in our gas distribution business, which is effectively serving the growing need from gas utilities to harden and upgrade critical infrastructure. As anticipated, communications and controls markets return to growth in the quarter as project deployments, which face pandemic-related delays, have steadily returned. Operationally, Adjusted operating margins of 14.5% were down year over year. As previously communicated, we took a series of temporary cost actions and salary reductions in the second quarter of 2020, which resulted in a one-time benefit of approximately $20 million. And we lapped that benefit this quarter. We also continue to face significant inflation from materials, freight, and labor as the impact of tight supply chains across the industrial economy drives higher input costs. However, we are being aggressive in our response. We continue to utilize the strength of our brands to lead most of our markets in frequency, pace, and magnitude of price increases, and we achieved strong price realization in the quarter of 3.5%, with increasing traction into the second half. We also continue to realize significant savings from our prior investments in restructuring actions, particularly within the electrical solution segment, where you're already seeing the productivity benefits of unifying that segment under a common leadership structure come through in our results. We will give you some more granular color on our outlook section at the end of this presentation and our expectations for the second half, but we are managing through a dynamic environment aggressively and proactively and we now expect to deliver stronger full-year results than from where we set a few months ago. Let me now turn it over to Bill to give you some more context around our financial results, starting on page five.