Exhibit 99.1
Hughes Supply, Inc. Reports First Quarter Earnings of $0.51 Per Diluted Share
ORLANDO, Fla., May 27 /PRNewswire-FirstCall/ -- Hughes Supply, Inc. (NYSE:
HUG), a leading distributor of construction and industrial materials, equipment
and supplies, today announced its results for the fiscal first quarter ended May
2, 2003. Sales for the 2004 fiscal first quarter totaled $782.8 million and
included revenues from the Utiliserve acquisition, while sales in the year ago
quarter included the benefit of an extra fiscal week as summarized below
(dollars in millions):
First First
Quarter Quarter
FY 2004 FY 2003 % Change
Base - 13 weeks $730.6 $734.9 (1)%
Acquisition 52.2 --
Extra week -- 55.1
Total $782.8 $790.0 (1)%
Memo: Comparable Branch "Same-
Store" Growth 0% (5)%
Net income totaled $11.8 million compared with $12.4 million in the prior
year's first quarter. Earnings per diluted share were $0.51 on approximately
23.1 million shares outstanding for the quarter ended May 2, 2003 compared with
$0.52 per share in the prior year. Net income and earnings per share in the
prior year were helped materially by the additional week of sales, which
leveraged the cost structure and as a result favorably impacted both margin and
expense ratios.
Revenue Trend
Tom Morgan, President and Chief Executive Officer, commented that the
trend towards positive comparable branch growth was continuing. "From a trough
in the second half of calendar 2001 when sales were down 7 - 9%, and despite a
continuing challenging economy, we have steadily improved for five consecutive
quarters to the point where we can soon anticipate positive sales growth,"
stated Morgan.
"I am very encouraged by our marketing initiatives and vendor programs,
and we appear to be gaining market share," Morgan said. "The recently received
GSA certification will enable us to pursue government supply contracts in our
various business segments. In our vendor initiatives, key vendor partnerships
and use of EDI continues to expand."
Earnings and Cash Flow
In commenting upon earnings and cash flow trends, David Bearman, Chief
Financial Officer, noted, "The margin mix has changed somewhat because of the
Utiliserve acquisition, but expenses are lower, our earnings are improving and
our return on invested capital is up." In addition, Bearman said "Hughes has
invested in additional inventories in certain business areas to position the
Company for growth, while at the same time receivables remain consistent with
sales growth. I would expect our operating cash flow performance for overall
fiscal 2004 to be similar to the strong performance in fiscal 2003, particularly
if we successfully focus on managing the return on invested capital equation."
Outlook
"While we continue to be very positive about the long-term outlook,
particularly given the significant strategic operating and management changes we
have initiated in the last two years, our short-term outlook is restrained with
mixed economic signals and some recent poor weather in certain markets. Having
said that, we expect our earnings for our fiscal second quarter to be above the
level of last year's second quarter," Tom Morgan concluded.
Webcast
Hughes Supply will host a webcast conference call at 9 a.m. Eastern time
on Wednesday, May 28, 2003 to discuss the Company's first quarter performance
and outlook. This conference call can be accessed at
http://www.firstcallevents.com/service/ajwz382293625gf12.html or you can dial
888-829-8669; passcode Hughes; leader Mr. David Bearman. A replay of the
conference call will be available at www.hughessupply.com until June 28, 2003,
or you may dial 800-839-1196 and use the passcode Hughes.
About Hughes Supply, Inc.
Hughes Supply, Inc. ( www.hughessupply.com ) is a distributor of
construction and industrial materials, equipment and supplies with over 450
locations in 34 states. Headquartered in Orlando, Florida, Hughes Supply employs
approximately 7,200 associates and generates annual revenues of approximately
$3.0 billion. Hughes Supply is a Fortune 500 company and was named by Fortune
the #2 Most Admired Company in America in the Wholesalers: Diversified Industry
segment.
Except for historical information, all other information discussed in this news
release consists of forward-looking statements under the Private Securities
Litigation Reform Act of 1995. When used in this report, the words "believe,"
"anticipate," "estimate," "expect," "may," "will," "should," "plan," "intend,"
and similar expressions are intended to identify forward-looking statements.
These forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be different from any future results,
performance, and achievements expressed or implied by these statements. These
risks and uncertainties include, but are not limited to, the strength of the
construction market, fluctuating commodity prices and unexpected product
shortages, competition, Hughes Supply's reliance on key personnel, general
economic conditions, success in integrating acquired business units, Hughes
Supply's dependence on credit sales, and other factors set forth from time to
time in filings with the Securities and Exchange Commission. The forward-looking
statements included in this news release are made only as of the date of this
news release and under section 27A of the Securities Act and section 21E of the
Exchange Act. Hughes Supply does not have any obligation to publicly update any
forward-looking statements to reflect subsequent events or circumstances.
Hughes Supply, Inc.
Consolidated Statements of Income
(unaudited)
(in millions, except per share data)
Three Months Ended
May 2, Ratio May 3, Ratio
2003 to Sales 2002 to Sales
Net Sales $782.8 $790.0
Cost of Sales 607.2 608.8
Gross Profit 175.6 22.4% 181.2 22.9%
Operating Expenses:
Selling, general and
administrative 144.8 149.3
Depreciation and amortization 5.1 5.0
Total operating expenses 149.9 19.1% 154.3 19.5%
Operating Income 25.7 3.3% 26.9 3.4%
Other Income (Expense):
Interest and other income 1.7 2.1
Interest expense (7.7) (8.0)
(6.0) (5.9)
Income Before Income Taxes 19.7 21.0
Income Taxes 7.9 8.6
Net Income $11.8 1.5% $12.4 1.6%
Earnings Per Share:
Basic $0.52 $0.54
Diluted $0.51 $0.52
Weighted Average Shares Outstanding:
Basic 22.8 23.2
Diluted 23.1 23.6
Net Sales by Segment: V%
Electrical & Plumbing $393.3 $375.4 5%
Water & Sewer/Building Materials 316.4 330.3 (4%)
Industrial PVF 73.1 84.3 (13%)
$782.8 $790.0 (1%)
Hughes Supply, Inc.
Consolidated Balance Sheets
(unaudited)
(in millions)
May 2, January 31, May 3,
2003 2003 2002
Assets
Current Assets:
Cash and cash equivalents $2.0 $1.7 $3.0
Accounts receivable, net 459.8 423.1 432.0
Inventories 466.5 438.5 403.3
Deferred income taxes 18.9 19.7 16.4
Other current assets 41.1 48.5 28.1
Total current assets 988.3 931.5 882.8
Property and equipment, net 163.6 157.8 142.0
Goodwill 320.1 320.1 263.8
Other assets 29.1 26.9 20.6
$1,501.1 $1,436.3 $1,309.2
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt $63.7 $63.8 $21.3
Accounts payable 274.8 230.0 240.0
Accrued compensation and benefits 23.6 43.3 23.2
Other current liabilities 39.6 35.6 45.4
Total current liabilities 401.7 372.7 329.9
Long-term debt 402.1 378.1 349.3
Deferred income taxes 40.6 34.0 15.7
Other noncurrent liabilities 7.7 6.7 6.3
Total liabilities 852.1 791.5 701.2
Shareholders' Equity:
Common stock 23.9 23.9 23.9
Capital in excess of par value 222.2 222.4 220.2
Retained earnings 426.1 416.7 377.4
Treasury stock and other (23.2) (18.2) (13.5)
Total shareholders' equity 649.0 644.8 608.0
$1,501.1 $1,436.3 $1,309.2
Hughes Supply, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in millions)
Three Months Ended
May 2, May 3,
2003 2002
Cash Flows from Operating Activities:
Net income $11.8 $12.4
Adjustments to reconcile net income
to cash provided by
operating activities:
Depreciation and amortization 5.1 5.0
Deferred income taxes 7.5 0.9
Other 2.8 4.8
Changes in assets and liabilities,
net of businesses acquired:
Accounts receivable (38.7) (47.9)
Inventories (28.1) (6.9)
Other current assets 7.4 28.7
Other assets (1.2) (0.2)
Accounts payable 44.8 51.6
Accrued compensation and benefits (19.7) (9.6)
Other current liabilities 4.0 10.7
Other noncurrent liabilities 1.0 0.1
Net cash (used in) provided by
operating activities (3.3) 49.6
Cash Flows from Investing Activities:
Capital expenditures (5.3) (2.4)
Proceeds from sale of property and
equipment 0.1 1.3
Net cash used in investing
activities (5.2) (1.1)
Cash Flows from Financing Activities:
Net borrowings (payments) under
short-term debt arrangements 20.8 (52.8)
Principal payments on other debt (2.6) --
Purchase of treasury shares (6.0) --
Dividends paid (2.4) (2.0)
Other (1.0) 2.5
Net cash provided by (used in)
financing activities 8.8 (52.3)
Net Increase (Decrease) in Cash and
Cash Equivalents 0.3 (3.8)
Cash and Cash Equivalents, Beginning
of Year 1.7 6.8
Cash and Cash Equivalents, End of Year $2.0 $3.0