Hubbell Inc

We're standing by and welcome to the second quarter 2022 earnings conference call for Hubble Corporation. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. Once again, that's star 1-1. As a reminder, today's program may be recorded. And now I'd like to introduce your host for today's program, Dan Imerato, Vice President, Investor Relations. Please go ahead, sir.

Thanks, operator. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing our second quarter 2022 results. 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, Gervin Bakker. and our Executive Vice President and CFO, Bill Sperry. Please note our comments this morning may include statements related to the expected future results of our company and 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. And with that, I'll turn the call over to Gerben. Great.

Thanks, Dan, and good morning, everyone, and thank you for joining us to discuss Hubble's second quarter results. I will open our call this morning with a broad overview of our performance, markets, and the investments we continue to make that drive value for our stakeholders. Bill will then provide details on our second quarter results, and I'll come back with some comments on the outlook for the year. Hubbell delivered another strong quarter of operating performance, with year-over-year organic growth of 20% and adjusted operating profit growth of 29%. We are performing above our initial expectations through the first half of the year and have generated year-over-year adjusted EPS growth of 29% through the first two quarters. We are raising our annual outlook this morning to reflect that strong performance. While we anticipate the second half operating environment to remain dynamic and we see uncertainty around macroeconomic conditions, we are confident in our ability to continue to execute effectively and deliver on the stronger outlook due to three key factors, the strength of our end markets, the strength of our position in those markets, and our continued operational execution. particularly proactively managing price cost as well as supply chain constraints. Starting with markets, customer demand for reliable and efficient critical infrastructure solutions in front and behind the meter continues to drive strong orders and sales growth. In particular, the utility solution segment continues to build backlog even as customer shipments pick up sequentially. Grid modernization initiatives continue to drive robust investment levels from our core utility customers as they seek to upgrade and harden aging infrastructure while integrating renewables onto the grid. Our leading quality, reliability, and service in these markets continue to position us well to effectively serve these critical needs for our customers. In electrical solutions, demand remains strong across most of our end markets, Electrification trends, together with strong industrial and non-residential markets, continue to drive sales and order growth across most of our electrical businesses, while residential markets remain soft as anticipated. I'd also like to highlight the ongoing strength we are seeing in communications markets, which is a key strategic vertical for Hubble spanning across both segments. Telecommunications customers continue to invest in building out 5G networks, rural broadband access, and fiber-to-the-home upgrades, driving demand for leading products and solutions across the Hubble portfolio, including enclosures, connectors, tooling, and antennas. Results in the quarter were also driven by continued execution on price cost. Price realization was 14% in the quarter, up again sequentially as the company continued to actively manage price and productivity to offset broad-based inflationary pressures. While material inflation is showing signs of easing, non-material inflation and supply chain headwinds persist. Increased cost of labor, freight and logistics, as well as tight availability in key materials and components continue to drive higher input costs and manufacturing and transportation efficiencies across our businesses. Despite these challenges, we were able to drive increased unit output and achieve strong year-over-year operating margin expansion of 130 basis points in the second quarter. Overall, a very strong quarter for Hubbell. We are confident in our ability to continue to effectively navigate a dynamic environment, and we are raising our full year expectations this morning while at the same time accelerating investments in the second half of the year to position us well for sustained long-term outperformance. We'll provide more color on that full-year outlook at the end of this presentation. Before I turn it over to Bill to talk you through the financial results in more detail, I would like to welcome PCX and Ripley Tools to the Hubble portfolio. These two high-quality businesses, which we acquired earlier this month, have strong financial profiles and attractive growth characteristics and bolster our position in key strategic growth verticals of data centers, renewables, electric T&D, and communications. We also have a strong cash position and balance sheet and expect to continue investing in acquisitions as a core component of our strategy for long-term shareholder value creation. With that, let me turn it over to Bill.