2008 Annual Report - Hubbell Wiring Device-Kellems

PART IItem 1.BusinessHubbell Incorporated (herein referred to as “Hubbell”, the “Company”, the “registrant”, “we”, “our” or “us”,which references shall include its divisions and subsidiaries as the context may require) was founded as aproprietorship in 1888, and was incorporated in Connecticut in 1905. Hubbell is primarily engaged in the design,manufacture and sale of quality electrical and electronic products for a broad range of non-residential andresidential construction, industrial and utility applications. Products are either sourced complete, manufactured orassembled by subsidiaries in the United States, Canada, Switzerland, Puerto Rico, Mexico, the People’s Republic ofChina, Italy, the United Kingdom, Brazil and Australia. Hubbell also participates in joint ventures in Taiwan and thePeople’s Republic of China, and maintains sales offices in Singapore, the People’s Republic of China, Mexico,South Korea, and the Middle East.During the first quarter of 2008, the Company realigned its internal organization and operating segments. Thisreorganization included combining the electrical products business (included in the Electrical segment) and theindustrial technology business (previously its own reporting segment) into one operating segment. This combinedoperating segment is part of the Electrical reporting segment. Effective for the first quarter of 2008, the Company’sreporting segments consist of the Electrical segment (comprised of wiring, electrical and lighting products) and thePower segment. Previously reported data has been restated to reflect this change.In December 2008, a decision was made to further consolidate the businesses within the Electrical segment.The wiring products and electrical products businesses were combined to form the electrical systems business. Thecombination of these two businesses did not have an impact on the Company’s reporting segments. See alsoNote 21 — Industry Segments and Geographic Area Information in the Notes to Consolidated FinancialStatements.In December 2008, the Company purchased all of the outstanding common stock of The Varon LightingGroup, LLC, (“Varon”) for approximately $55.6 million in cash. Varon is a leading provider of energy-efficientlighting fixtures and controls designed for the indoor commercial and industrial lighting retrofit and relight market,as well as outdoor new and retrofit pedestrian-scale lighting applications. The company has manufacturingoperations in California, Florida, and Wisconsin. This acquisition has been added to the lighting business within theElectrical segment.In September 2008, the Company purchased all of the outstanding common stock of CDR Systems Corp.(“CDR”), for approximately $68.8 million in cash. CDR, based in Ormond Beach, Florida, with multiple facilitiesthroughout North America, manufactures polymer concrete and fiberglass enclosures serving a variety of endmarkets, including electric, gas and water utilities, cable television and telecommunications industries. Thisacquisition has been added to the Power segment.In August 2008, the Company purchased all of the outstanding common stock of USCO Power EquipmentCorporation (“USCO”) for approximately $26.1 million in cash. USCO, based in Leeds, Alabama, provides highquality transmission line and substation disconnect switches and accessories to the electric utility industry. Thisacquisition has been added to the Power segment.In January 2008, the Company purchased all of the outstanding common stock of Kurt Versen, Inc. (“KurtVersen”) for $100.2 million in cash. Located in Westwood, New Jersey, Kurt Versen manufactures premiumspecification-grade lighting fixtures for a full range of office, commercial, retail, government, entertainment,hospitality and institution applications. The acquisition enhances the Company’s position and array of offerings inthe key spec-grade downlighting market. Kurt Versen has been added to the lighting business within the Electricalsegment.During 2008, the Company also purchased three product lines; a manufacturer of rough-in electrical products,added to the Electrical segment, a Canadian manufacturer of high voltage condenser bushings and a Braziliansupplier of preformed wire products which were both added to the Power segment. The aggregate cost of theseacquisitions was approximately $16.7 million.2