Exhibit 99.1
NEWS RELEASE
For Immediate Release For Further Information Contact:
January 30, 2006 Jennifer Noda
Investor Relations Analyst
(407) 822-2815
HUGHES SUPPLY, INC. RAISES FISCAL YEAR 2006
SALES AND EARNINGS OUTLOOK
Hughes Supply, Inc. (NYSE:HUG) Orlando, Florida
Hughes Supply, Inc., a leading distributor of construction, repair and
maintenance-related products, announced today that due to continuing strong
demand across its businesses, revenue and earnings for its fiscal year ending
January 31, 2006 are expected to exceed the Company's previously issued
guidance. Additionally, in connection with the proposed merger with The Home
Depot (R), the Company filed a preliminary proxy statement with the Securities
and Exchange Commission on Friday, January 27, 2006.
Revenues for the fiscal year 2006 are now expected to be approximately
$5.4 billion, a 23% increase over the previous year's revenues of $4.4 billion.
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is now
expected to be approximately $309 million, a 25% increase over the previous
year's EBITDA of $248 million. Net Income is expected to be approximately $152
million, an increase of 23% over the previous year's net income of $124 million.
Earnings per diluted share are expected to be approximately $2.26, compared to
$1.95 per diluted share in the previous year, an increase of 16%. Previous
guidance issued on November 17, 2005, indicated fiscal year 2006 revenues of
$5.3 billion, net income of $141 million - $143 million, and diluted earnings
per share of $2.11 - $2.14.
About Hughes Supply, Inc.
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Hughes Supply, Inc., founded in 1928, is one of the nation's largest
diversified wholesale distributors of construction, repair and
maintenance-related products, with over 500 locations in 40 states.
Headquartered in Orlando, Florida, Hughes employs approximately 9,600 associates
and generated annual revenues of $4.4 billion in its last fiscal year. Hughes is
a Fortune 500 company and was named the #1 Most Admired Company in America in
the Wholesalers: Diversified Industry segment by FORTUNE Magazine. For
additional information on Hughes Supply, you may visit www.hughessupply.com.
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",
"project", 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 ability of the
Company and The Home Depot to satisfy the conditions to closing of the pending
merger (including Company shareholder approval and regulatory approval) and
timing of the process; the effect on the Company's business of the pending
transaction, the strength of the construction market and the general economy,
competition, delay in implementing operating systems, reliance on key personnel
who may separate from the Company due to general attrition or due to additional
uncertainties created by the pending merger, success in integrating and
achieving expected profitability from acquired businesses, achieving enhanced
profitability goals, fluctuating commodity prices, the Company's fixed cost
structure, customer credit policies, unexpected product shortages, product
purchasing and supply, overseas movement of manufacturing facilities, 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.
Disclosures in this news release, including in the following table, regarding
the Company's fiscal year 2006 financial results are preliminary and are subject
to change in connection with the Company's preparation and filing of its Form
10-K for the year ending January 31, 2006. The financial information in this
release reflects the Company's preliminary results subject to completion of the
year end review process. The final results for the Company's fiscal year may
differ from the preliminary results discussed above due to factors that include,
but are not limited to, risks associated with final review of the results and
preparation of financial statements.
In connection with the proposed merger, Hughes Supply has filed a proxy
statement with the Securities and Exchange Commission. INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of
the proxy statement and other documents filed by Hughes Supply at the Securities
and Exchange Commission's Web site at http://www.sec.gov. The proxy statement
and such other documents may also be obtained for free from Hughes Supply by
directing such request to Hughes Supply, Attention: Investor Relations,
telephone: (407) 822-2139.
Hughes Supply and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation of
proxies from its stockholders in connection with the proposed merger.
Information concerning the interests of Hughes Supply's participants in the
solicitation is set forth in Hughes Supply's preliminary proxy statement dated
January 27, 2006, for its 2006 Special Meeting of Shareholders, relating to the
merger.
HUGHES SUPPLY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
(unaudited)
($ in millions)
While Hughes Supply, Inc. (the "Company") reports its results of operations
using generally accepted accounting principles ("GAAP"), management believes
that certain non-GAAP performance measures and ratios used in managing the
business may provide users of this financial information additional meaningful
comparisons between current results and results in prior operating periods.
Management believes that these non-GAAP measures can provide additional analysis
of underlying trends of the business because they provide a comparison of
historical information that excludes certain items that do not represent results
from the fundamental operations of the Company. Non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, the Company's
reported results prepared in accordance with GAAP. The reconciliation below
provides the information required by Regulation G of the Securities Exchange Act
of 1934, as amended, related to the disclosure of non-GAAP financial measures.
Such non-GAAP financial measures have been disclosed by the Company in
connection with its updated sales and earnings outlook release for the fiscal
year ended January 31, 2006.
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") (1)
EBITDA for the Company is computed as follows:
Fiscal Years Ended
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January 31, January 31,
2006 E 2005
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Income before income taxes $ 249 $ 198
Add: Interest expense 35 31
Depreciation and amortization 34 27
Less: Interest and other income (9) (8)
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EBITDA $ 309 $ 248
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(1) Although EBITDA should not be used as a substitute for the Company's
reported GAAP results, the Company uses this non-GAAP measure to manage
and determine the effectiveness of its business management by segment.
EBITDA is defined as income before income taxes plus interest expense and
depreciation and amortization minus interest and other income.