Good day, and welcome to the Hubbell Incorporated Second Quarter 2013 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jim Farrell. Please go ahead, sir.

Good morning, everyone, and thank you for joining us. I'm here today with our President and Chief Executive Officer, Dave Nord; and our Chief Financial Officer, Bill Sperry. Hubbell announced its second quarter results for 2013 this morning. The press release and earnings slide materials have been posted to the Investors 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 also could include 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 Dave.

Thanks, Jim. Good morning, everybody. Let me just take a few minutes to talk a bit about the second quarter, and then I'll give it to Bill to go through some of the details. We're certainly pleased with our performance, overall, in the second quarter, particularly when we think about the end markets that we're facing. As expected, very mixed, very difficult to predict. So our team is very focused on performance regardless of what the markets throw at us. But overall, our sales you see are up 3%, largely due to the acquisitions in total, but even within our markets, particularly on the lighting side, good growth on that side of the business, the Electrical segment, x acquisitions are flat and then the Power business and we'll talk a bit more later. And I think from an end market standpoint, as I said, we've got some mixed markets that we're dealing with, the non-residential market, a little bit better, mainly because of the strength in the renovation market, we're not seeing any meaningful improvement in new construction. The residential market continues to be solid, although as you see from the monthly reports on housing starts and permits, it's a bit lumpy. Utility side was a little weaker on both transmission and distribution, but also against some pretty tough comps, you remember last year, we had a very strong start to the year from weather and releases on transmission projects. And then the Industrial side is mixed. The core is bit sluggish, our high voltage down sharply, although I think we feel pretty confident that that's the last time we'll be saying that. We got some good activity that we expect to start to come through in the third and fourth quarter. And the Harsh & Hazardous side, as we…

Thanks, Dave, and good morning, everybody. I'm using materials that, hopefully, you found on our website and I'm starting on Page 4. Our second quarter sales were $801 million, up 3%. As Dave mentioned, driven essentially by acquisitions. I think to give you a little bit of flavor of that, we had 5 different acquisitions contributing to the quarter. Dave was just referring to the breadth of that, those investments spread across both the Electrical and Power segments. I think that it gives you reasonably interesting snapshot of the state of our business development activities and, to the extent you're interested, we certainly can talk more about that in the Q&A. The second part of sales is obviously the organic end markets here where we had flat performance. On the non-residential side, which is our largest market, we continue to wait for a rebound in the new construction building market. It's not here yet. We continue to see a bifurcation between the private construction markets, which are growing a little bit, and the public markets which are not. And I think one favorable place we've got so far is the fact that the balance between those 2 markets is a lot closer to 60-40 now, with private being the largest contributor. And that compares to maybe 50-50 when government stimulus was at its peak and we think the 60-40 balance is a lot healthier. But we're still waiting for that new construction to catch. The renovation and relight continues to be the favorable side of non-res. It mostly impacts our lighting business, but it also helps us on some of our wiring device and other electrical product areas. So that's really the bright spot of non-res. The industrial story is very mixed in terms of both industrial production and some…

Okay. Thanks, Bill. Yes, let me just provide a couple of comments on the outlook and then I know you guys want to have some questions. First, on the top line, as Bill said, we're looking at 4% to 6% sales growth with 3 points of that coming from acquisitions. The acquisition pipeline has been good, our closings have been good. There's still more in the pipeline, but you can never guarantee that you can get them to closure. But I would think that we would have, likely, at least one, potentially, more in the second half of the year, our typical size range. The outlook on volume becomes more difficult to predict as our business has migrated a little bit more to stock business from the large project business, as well as some of what has historically been a very stable predictable market on the utility side to being much more volatile. So that's added some challenges but I'm --we feel good right now from what we've seen with our 4% to 6%, while we historically have been conservative, or been viewed as being conservative, I wouldn't say we're changing that, but I would say that we have a lot more. We don't want of the unduly conservative, but this is a good outlook for us, as of today. Our margins, 30 basis point improvement, that's down from our prior guidance and really just because of the impact of the acquisitions coming in, and certainly the impact in the early periods of those acquisitions. A lot of that, to date, has been due to some of the favorable price cost and other productivity gains. I think we'll get a little bit more from productivity and, of course, when we get some of the facility closing costs behind us, that…

Thanks, Dave. Let's turn it over to the Q&A portion of the call. Thanks.

[Operator Instructions] We'll go first to Christopher Glynn of Oppenheimer. Christopher Glynn - Oppenheimer & Co. Inc., Research Division: LED deal in terms of sales might be somewhat immaterial but any comments on size of CMC?

Chris, we got cut off on the first half of your question, sorry, I couldn't hear. Christopher Glynn - Oppenheimer & Co. Inc., Research Division: Okay. Yes, I was just asking about the size of the deals that I think the LED one sounds sort of immaterial, but maybe the size of CMC?

Yes, CMC is going to add about one point to the second half of the year. And as Dave was describing, kind of nice typical Hubbell-sized deal and the lighting one was a little smaller..

Yes. CMC was about a $44 million purchase price and the lighting deal was in the mid-teens. Christopher Glynn - Oppenheimer & Co. Inc., Research Division: Okay. And then utility, do you think that's based, given what we've come through on the transmission, I don’t know if you'll call it a bubble, but do you see that resuming growth at some point, looking even into next year? Or do you think we're kind of moving along peak levels here?

I would say we're moving along peak levels, from our side. I mean, we clearly see a big drop-off in quoting activity, which is the first indicator. And I think that's what most of the forecast had suggested, that somewhere the investment was going to peak somewhere around '13. Remember that's calculated when it's put in service and some of our stuff happens before that. So I think you're going to see that. Our belief is that, that's going to start to turn down. It's still at high levels but it's not a growth engine for us, by any means. Christopher Glynn - Oppenheimer & Co. Inc., Research Division: Okay. And then just lastly, the consolidation charges, are those done now? And what kind of payback are you looking at?

We've got a little bit, Chris, that'll finish off in the third, but quite small. And we haven't been explicit about the paybacks, but what when we're talking about closing facilities and moving that volume into existing footprint, and those projects are very attractive return-wise.

We'll go next to Rich Kwas of Wells Fargo Securities.

Dave, on -- you talked about the sales outlook, the 4% to 6% and saying it's pretty reasonable. But if I look at the margin here for the year, the 30 basis point expansion, which was revised downward a little bit, and I think about what happened here in the first half, you outperformed here in Q2 on the margin front, at least versus our numbers, you've got lower consolidation charges in the back half, you've got less of a drag from high volt and maybe that actually lifts a little bit in the second half. Harsh & Hazardous hasn't been great, it sounds like things are picking up a little bit there. So what are kind of the puts and takes on the second half margin and what are you most concerned about in terms of potentially -- essentially achieving the margin outlook? And then what are kind of the risks to potentially generating some upside.

Well, I think, first and foremost, it's volume dependent. So the closer we are to the 4% growth, the more challenge it puts on that, number one. Number two, keep in mind that, as we mentioned, the second quarter margin had a good contribution from the mix, which is not consistent and necessarily continual. So you have a shift back to some of the other growth areas in volume. Particularly, as you know, on the lighting side, the lighting overall is not a -- not all those businesses are incremental margin contributors, so when you have growth on that side of the business, that puts a little bit of a challenge on it. And then it's also a very difficult pricing environment. We've been successful so far with maintaining discipline, but at some point, you do have to balance that discipline on holding price to your share implications. We hold out as long as possible and so that's -- when you ask me what I am concerned about, it's how that's going to play out in the second half. We're not expecting to give up on price, but you don't know what others will do in the market if demand is weaker. So that help?

Yes, it does. And then, Bill, I know I've asked this question in the past. On the distribution piece, you're seeing any signs of any benefit from the new construction side, from residential? I know you kind of said that, that probably is not going to really be impactful until next year, but what have you seen here in the last few months?

Yes, we still don't see, Rich, any impact, certainly not in this quarter, and we're not anticipating any this year. I'm hoping to be able to describe some next year. But for now, we just don't see the impact of that although your logic is dead-on, that once we start to outgrow the installed infrastructure with some of these housing construction, it's going to drive the need for some last-mile construction which will be very beneficial for our distribution business.

Okay. And then just a cleanup question, last one. I think you mentioned residential lighting grew 13%, do you have the non-res numbers as well or a consolidated number for lighting in the quarter?

Yes. The non-res was up 6% and so the platform was up 8%.

Great. And that's revenues, right?

Correct.

We'll go next to Jeff Sprague of Vertical Research Partners.

It's actually Ryan, sitting in for Jeff this morning. Just a couple nuance-y questions here. Just want to know what's giving you the confidence in the turn in high voltage. I know it's something you've been talking about for several quarters and comps are getting easier. I just wonder if you might delve into a little bit about that what you're seeing and maybe size it for us in terms of the impact to the back half?

Yes, Ryan. I think that the high voltage is unique for us and that we tend not to rely on forecasting data to tell us what it can do. Tends to have a long lead time so we use our backlog. And so it does give us a higher degree of confidence in describing that turnaround. And I think, we -- in terms of order of magnitude, I would expect that the second half growth will largely offset the first half decline. So for the year, we'd have a reasonably flat high volt business.

Okay. And then it seemed there was potentially a hint at possibly more restructuring if things start to get a little weaker in different businesses, and maybe I'm reading into that too much. But could you talk about some of the areas like maybe in the transmission business where things that are clearly slowing and based on utility CapEx budgets to use, definitely slowing in '14? Are these some areas of the business that you might look to cut more cost?

I don't think there's any particular business. It's really more broad-based and what I'm referring to is just an increase in our cost discipline and our spending discipline. No radical impacts right now. But certainly, as I said, to the extent that the markets weakened dramatically, and we're surprised by that, we would be working toward looking at other actions that would occur. But nothing major at this point that's outside of what has been a continual process for us in our facility rationalization, in our productivity, in our hiring process. So I hope that helps.

Yes. And maybe just one last one. If you could give us sort of a capital allocation update. Obviously, you've done a lot of work on the M&A side, I was wondering if we might start to look at more share repo now that we're halfway through the year?

Yes. I think, Ryan, to give a little flavor on -- we really haven't been doing much share repurchase. This quarter, we only bought $7 million [ph] worth of shares. We continue to kind of have an objective of offsetting creep that might come from an option exercise. And so acquisitions continue to be a big area of focus. Dave was describing some of the recent activity and deals can get lumpy. Sometimes it's helpful to widen the lens a little bit, and if I were to look at the last 8 quarters to give kind of a 2-year view, we've acquired 9 companies, investing $222 million. If you kind of try to cut that in half and said an average years of activity, right now is about 4.5 deals, adding over 3 points of sales, that's a good snapshot, I think, of how we're doing on the deal front. And that represents a ramp-up over the last 3 years, as Dave mentioned. Hopefully, no slacking on that in the future. So between the 2, we continue to have our focus on acquisitions, Ryan.

We'll go next to Brent Thielman of D.A. Davidson. Brent Thielman - D.A. Davidson & Co., Research Division: Just on the acquisitions, you mentioned not additive to margins this year. Should those be a little more consistent with the base business -- businesses next year or incremental headwind or tailwind in margins?

Yes, they should be much more trued up after we've owned it for a year or so. Brent Thielman - D.A. Davidson & Co., Research Division: Got you. And then just on the Power side, the rest of the world component is smaller, but could you talk around some of the trends you're seeing in that area?

Yes, so we actually had some contraction in our international power business as well, consistent with the platform as a whole. That's largely for us down in South America. And so consistent trend there versus here actually.

We'll go next to Mike Wood of Macquarie.

I know you have nice backlog in the high voltage test equipment business that gives you confidence in the back half of the year. But can you also talk about what you're seeing in the recent order momentum, is that continuing?

Yes, Mike. The activity has been improving as well. The customers, to remind everybody, customers for high volt are really, for us, the test equipment goes into 2 places. One is it goes to OEMs who are making transformers, and the other is utilities who are testing their grids and their networks. I think we -- the trends have been transformer manufacturing globally are running pretty mixed around. There's some people moving capacity to low cost countries, others adding capacity, others shrinking. So kind of an interesting mixed picture there. Utility customer side, I think, showing us a little more consistent activity, Mike.

Okay. And also you'd mentioned previously some optimism for gradual recovery into the end of the year in new non-res, but you'd said that you're seeing any meaningful improvement yet. Has that outlook changed at all?

Not sure I heard you right. You were talking about non-res?

New non-res, in terms of new starts.

Yes. We really haven't seen it yet. So we can't really speak to anything specific that changes that and so we've retained our outlook where it was.

I'll go next to Noelle Dilts of Stifel. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: I'd just like to go back to transmission really quickly. I was hoping you could remind us what your typical lead time is between the quotation activity you're seeing and project construction?

The transmission piece is -- you'd have to break that up into the 2 components, Noelle. I think the maintenance and repair side of transmission would have a more regular and typical order pattern and shipping that would be a little bit more book-to-bill. The longer lead time is the large project and that could be -- you can be building up orders, releases could be 3 months, 6 months, could be a year even. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then a couple of other players in transmission have talked about Canada as being actually an opportunity, and seeing some acceleration there. Can you comment on what you're seeing in that market and how much exposure you have?

Yes, we would agree that the project activity that does exist in North America happens to be in Canada. Our market share there, Noelle, has not been as good as our overall market share. The market's been a little bit more price competitive. There's some international competitors there. So we'll have to see how that market evolves. But I agree with what you're saying that the activity has been north of the border.

At this time, we have no further questions.

Okay, thank you, everyone, for joining us this morning. Certainly, if anyone has any follow-up questions, they can feel free to give me a call. And thank you, again, for joining us this morning.

That does conclude today's conference. We thank you for your participation.