HUGHES SUPPLY INC, S-3/A, 1996-04-22

HUGHES SUPPLY INC
S-3/A, 1996-04-22
ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1996.

REGISTRATION NO. 333-02215

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HUGHES SUPPLY, INC.
(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C>
FLORIDA 59-0559446
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)
</TABLE>

20 NORTH ORANGE AVENUE, SUITE 200
ORLANDO, FLORIDA 32801
(407) 841-4755
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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DAVID H. HUGHES
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
HUGHES SUPPLY, INC.
20 NORTH ORANGE AVENUE, SUITE 200
ORLANDO, FLORIDA 32801
(407) 841-4755
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
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COPIES OF COMMUNICATIONS TO:

<TABLE>
<S> <C>
ROBERT N. BLACKFORD, ESQ. G. WILLIAM SPEER, ESQ.
MAGUIRE, VOORHIS & WELLS, P.A. POWELL, GOLDSTEIN, FRAZER & MURPHY
2 SOUTH ORANGE AVENUE 16TH FLOOR
ORLANDO, FLORIDA 32801 191 PEACHTREE STREET, N.E.
(407) 244-1100 ATLANTA, GEORGIA 30303
(404) 572-6600
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /___________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /____________
If the delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. / /____________
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED APRIL 22, 1996

PROSPECTUS
1,929,926 SHARES

[HUGHLES SUPPLY, INC. LOGO]

COMMON STOCK

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Of the 1,929,926 shares of Common Stock offered hereby, 1,250,000 shares
are being sold by Hughes Supply, Inc. ("Hughes Supply" or the "Company") and
679,926 shares are being sold by certain shareholders (the "Selling
Shareholders"). See "Principal and Selling Shareholders." The Company will not
receive any of the proceeds from the sale of shares of Common Stock by the
Selling Shareholders. This offering is contingent upon consummation of the PVF
Acquisition (as defined herein).

The Company's Common Stock is traded on the New York Stock Exchange, Inc.
(the "NYSE") under the symbol "HUG." The last reported sale price of the
Company's Common Stock on the NYSE on April 19, 1996 was $29.875 per share.

SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING AN INVESTMENT IN THE
COMMON STOCK OFFERED HEREBY.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

<TABLE>
<CAPTION>
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UNDERWRITING PROCEEDS TO
DISCOUNTS AND PROCEEDS TO SELLING
PRICE TO PUBLIC COMMISSIONS(1) COMPANY(2) SHAREHOLDERS
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<S> <C> <C> <C> <C>
Per Share $ $ $ $
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Total(3) $ $ $ $
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</TABLE>

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."

(2) Before deducting expenses estimated at $425,000, all of which is payable
by the Company.

(3) The Company and one of the Selling Shareholders have granted the
Underwriters 30-day options to purchase up to 236,989 and 52,500
additional shares of Common Stock, respectively, solely to cover
over-allotments, if any. See "Underwriting." If such option is exercised
in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ and
$ , respectively.

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The shares of Common Stock are offered by the several Underwriters named
herein, subject to prior sale, when, as and if accepted by them and subject to
certain other conditions. It is expected that certificates for the shares of
Common Stock offered hereby will be available for delivery on or about
, 1996, at the offices of Smith Barney Inc., 14 Wall Street, New
York, New York 10005.

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SMITH BARNEY INC. ROBERT W. BAIRD & CO.
INCORPORATED

, 1996
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The following map shows the locations of the Company's branches and
distribution centers and the branch locations of two companies to be
acquired by the Company.

[MAP]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the financial statements and related notes thereto included
elsewhere or incorporated by reference in this Prospectus. As used in this
Prospectus, unless the context indicates otherwise, (i) the terms "Company" and
"Hughes Supply" mean Hughes Supply, Inc., its subsidiaries and its predecessors,
and (ii) the information in this Prospectus assumes that the Underwriters'
over-allotment option is not exercised. The Company's fiscal year ends on the
last Friday in January of each year.

THE COMPANY

Hughes Supply is one of the largest diversified wholesale distributors of
materials, equipment and supplies for the construction and industrial markets
operating primarily in the southeastern and midwestern United States. The
Company distributes more than 100,000 products through 221 branches located in
15 states and Puerto Rico. The Company's customers are subcontractors, general
contractors, utilities, municipalities and manufacturers. Management believes
that the Company holds significant market share in a majority of its local
markets and is one of the largest distributors of its range of products in the
southeastern and midwestern United States. The Company's largest geographic
market is Florida (representing approximately 43% of fiscal 1996 net sales),
which is one of the largest commercial and residential construction markets in
the United States.

The products which the Company distributes are used in new construction for
commercial, residential, utility and industrial applications and for replacement
and renovation projects. Such products include materials and supplies associated
with the Company's nine major product groups, as follows: electrical; plumbing;
water and sewer; air conditioning and heating; industrial pipe, valves and
fittings; building materials; electric utilities; water systems; and pool
equipment and supplies. Each product group is sold by the Company's own
specialized and experienced sales force consisting of outside sales
representatives and inside account executives. Management believes that the
Company's mix of commercial, residential, utility and industrial business,
geographic diversification and multiple product groups reduces the impact of
economic cycles on the Company's net sales and profitability. Management
believes that no other company competes against it across all of its product
groups.

The Company's principal business objective is to achieve profitable growth,
both internally and through selective acquisitions, primarily in existing and
contiguous geographic markets. The Company has grown internally through
increases in comparable branch net sales, new branch openings and the addition
of new product groups. Since January 29, 1993, the Company has opened 25 new
branches. In addition, the Company continues to pursue an active acquisition
program to capitalize on the opportunities presented by the substantial size and
highly fragmented ownership structure of its industry. Based upon estimates
available to the Company, industry sales in the United States of products sold
by the Company exceeded $100 billion in 1995, and no wholesale distributor of
these products accounted for more than 2% of the total market. Since January 29,
1993, the Company has completed 23 acquisitions representing 68 branches,
excluding the PVF Acquisition (as defined herein). In addition to increased
geographic penetration, acquisitions often provide opportunities for the Company
to gain market share and to enhance and diversify product offerings. Management
believes that the most cost effective way for the Company to enter new
geographic markets is through acquisitions. All of the Company's significant
acquisitions have been accretive to the Company's earnings per share.

The Company's acquisition strategy is to acquire profitable distribution
businesses with strong management and well-developed market positions and
customer franchises. Acquisitions can generally be categorized as fill-in
acquisitions or new market acquisitions. Fill-in acquisitions are generally
smaller in size and represent new branches within existing product groups and
existing geographic markets. Since January 29, 1993, the Company has completed
fill-in acquisitions of 28 branches, and management believes that significant
additional fill-in acquisition opportunities are available.

New market acquisitions represent the addition of new product groups,
within related commercial construction and industrial product categories, or the
entry into new geographic markets, or both. During the last three fiscal years,
the Company has increasingly focused on new market acquisitions with the goal of
adding products and product groups with higher gross margins, increasing sales
to the replacement and

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industrial markets (which tend to be less cyclical than new construction
markets), achieving greater geographic diversification and developing additional
opportunities for future fill-in acquisitions and new branch openings. Recent
new market acquisitions completed by the Company include (i) The Treaty
Distribution Group, resulting in a significant increase in the Company's water
and sewer products business in new geographic markets, (ii) Moore Electric
Supply, Inc., resulting in a significant increase in the Company's electrical
products business in new geographic markets, and (iii) Florida Pipe & Supply
Company, the Company's initial entry into the industrial pipe, valve and fitting
market.

The Company's operating strategy is based on decentralizing customer
related functions at the branch level, such as sales and local inventory
management, and centralizing certain administrative functions at the corporate
level, such as credit, human resources, finance and accounting, and management
information systems. Other key elements of the Company's operating strategy
include:

- Comprehensive and diversified product groups;

- Superior customer service;

- Local market focus;

- Well-trained and experienced workforce; and

- Volume purchasing power.

Hughes Supply differentiates itself from consumer-oriented, large format,
do-it-yourself ("DIY") home center retailers with respect to the type of
customer served, breadth of products offered and level of service provided.
Management believes that the Company's customers, unlike DIY customers, are
typically professionals who choose their building materials suppliers primarily
on the basis of product availability, price, relationships with sales personnel,
and the quality and scope of services offered by such suppliers. Furthermore,
professional customers generally buy in large volumes, are involved in ongoing
jobs or projects lasting months or years resulting in repeat buying situations,
and require specialized services not typically provided by large format DIY home
center retailers. Customer services provided by the Company include credit,
design assistance, material specifications, scheduled job site delivery, job
site visits to ensure satisfaction, technical product services, including
blueprint take-off and computerized order quotes, and assistance with product
returns. Accordingly, the Company has been able to serve customer groups that
large format DIY home center retailers generally do not emphasize.

As a result of the Company's operating and acquisition strategies, net
sales increased to $1.1 billion in fiscal 1996 from $735.0 million in fiscal
1994, a compound annual growth rate of 21.3%; operating income increased to
$29.9 million in fiscal 1996 from $13.1 million in fiscal 1994, a compound
annual growth rate of 51.0%; and the number of branches increased to 212
branches at the end of fiscal 1996 from 143 branches at the end of fiscal 1994,
a compound annual growth rate of 21.8%.

Hughes Supply was founded as a general partnership in Orlando, Florida in
1928 and was incorporated as a Florida corporation in 1947. The Company's
executive offices are located at 20 North Orange Avenue, Suite 200, Orlando,
Florida 32801, and its telephone number is (407) 841-4755.

THE PVF ACQUISITION

On March 27, 1996, the Company entered into an asset purchase agreement to
acquire substantially all of the assets, properties and business of PVF
Holdings, Inc. ("PVF") and its subsidiaries and to assume certain of their
liabilities (the "PVF Acquisition"). The aggregate consideration to be paid in
the PVF Acquisition is approximately $106 million, consisting of cash in the
amount of $74.4 million, the issuance of 669,956 shares of Common Stock and the
assumption of up to $13 million of bank debt. The PVF Acquisition is scheduled
to close on May 13, 1996. This offering is contingent upon the consummation of
the PVF Acquisition. Concurrently, the Company is offering privately (the "Notes
Offering") an aggregate of $100 million of Senior Notes (the "Notes"),
approximately $74.4 million of the proceeds of which will be used to partially
fund the PVF Acquisition. The balance of the proceeds will be used to repay a
portion of the Company's bank debt. See "Use of Proceeds" and "Description of
Notes."

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providers of pipe, valve and fitting products for use by industrial companies
that operate manufacturing processes involving highly corrosive or high
temperature fluids, such as those of the petrochemical, food and beverage, and
paper industries. Management of the Company believes that PVF carries one of the
country's broadest and deepest inventories of such products, consisting of more
than 15,000 different items sold to approximately 4,000 active accounts. PVF
sells both directly to end-users and to supply houses that sell to end-users
through 16 regional branch locations concentrated in the southeastern and
southwestern United States.

For the 12 months ended December 31, 1995, PVF had net sales of $109.2
million and operating income of $27.7 million. On a pro forma basis, giving
effect to the PVF Acquisition, the Company's fiscal 1996 net sales were $1.2
billion, operating income was $57.0 million and, as of the end of fiscal 1996,
the Company had 228 branches located in 19 states and Puerto Rico. See "Selected
Unaudited Pro Forma Consolidated Financial Data."

The PVF Acquisition is a new market acquisition which provides the Company
with several strategic benefits, including: (i) a well-established position in
the stainless steel and specialty alloy sector of the pipe, valve and fitting
products market; (ii) a higher gross margin product group than the Company's
other product groups; (iii) greater focus on targeted industrial and replacement
markets; (iv) a strong management team; and (v) new opportunities for additional
fill-in acquisitions. Additional growth opportunities for the Company related to
the PVF Acquisition include incremental sales of complementary valve products
(which represented only 2% of PVF's fiscal 1995 net sales) and new branch
openings, including the expected opening of a branch in Southern California.

RISK FACTORS

For a discussion of certain factors that should be considered by
prospective purchasers of the Common Stock offered hereby, see "Risk Factors."

FORWARD-LOOKING STATEMENTS

This Prospectus, including the information incorporated by reference
herein, includes "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is
subject to the safe-harbor created by such sections. The Company's actual
results may differ significantly from the results discussed in such
forward-looking statements. Certain factors that might cause such differences
include, but are not limited to, the "Risk Factors" described herein.

THE OFFERING

<TABLE>
<S> <C>
Common Stock being offered by:
The Company............................................... 1,250,000 shares
The Selling Shareholders.................................. 679,926 shares
Common Stock to be outstanding after this offering.......... 9,222,864 shares(1)
Use of proceeds............................................. To repay indebtedness under
the Company's revolving credit
facility and line of credit
agreement. See "Use of
Proceeds."
NYSE symbol................................................. HUG
</TABLE>

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(1) Based on the number of shares of Common Stock outstanding on April 1, 1996
and including an estimated aggregate of 1,155,749 shares of Common Stock to
be issued in the PVF Acquisition and the acquisition of Elasco Inc. Does not
include 485,941 shares of Common Stock issuable upon the exercise of stock
options outstanding as of April 1, 1996.

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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
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JAN. 26, 1996
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JAN. 31, JAN. 29, JAN. 28, JAN. 27, PRO FORMA AS
1992(1) 1993 1994 1995 ACTUAL ADJUSTED(2)
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<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales...................... $558,299 $600,185 $734,958 $875,459 $1,082,179 $1,258,842
Gross profit................... 106,523 115,111 144,492 176,327 223,606 277,580
Operating expenses............. 107,958 109,352 131,383 154,693 193,718 217,897
Operating income (loss)........ (1,435) 5,759 13,109 21,634 29,888 59,683
Interest expense............... 6,439 5,117 5,055 5,284 7,484 12,823
Interest and other income...... 2,058 3,743 2,981 2,848 4,605 5,542
Income (loss) before
income taxes................. (5,816) 4,385 11,035 19,198 27,009 52,402
Net income (loss).............. $ (3,856) $ 2,841 $ 6,524 $ 11,485 $ 16,050 $ 31,133
======== ======== ======== ======== ========= ==========
Earnings (loss) per share
Primary...................... $ (0.76) $ 0.56 $ 1.27 $ 1.83 $ 2.34 $ 3.36
======== ======== ======== ======== ========= ==========
Fully diluted................ $ (0.76) $ 0.56 $ 1.19 $ 1.81 $ 2.31 $ 3.33
======== ======== ======== ======== ========= ==========
OPERATING DATA:
Branches at end of period...... 124 130 143 173 212 240
Comparable branch sales
increases (decrease)(3)...... (14)% 3% 17% 13% 8%
</TABLE>

<TABLE>
<CAPTION>
AS OF JANUARY 26, 1996
-----------------------------------
ACTUAL PRO FORMA AS ADJUSTED(4)
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<S> <C> <C>
BALANCE SHEET DATA:
Working capital.............................................. $180,512 $234,120
Total assets................................................. $379,096 $516,415
Long-term debt, less current portion......................... $106,215 $169,681
Shareholders' equity......................................... $154,143 $211,659
</TABLE>

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(1) Fiscal 1992 represents a 53-week fiscal year.
(2) Gives effect to the following as if each had occurred as of January 28,
1995: (i) the PVF Acquisition; (ii) the acquisitions completed by the
Company on or after January 27, 1996 through April 1, 1996 and the pending
acquisition of Elasco Inc. (the "Fiscal 1997 Acquisitions"); and (iii) this
offering, the Notes Offering and the application of the net proceeds
therefrom by the Company. See "Selected Unaudited Pro Forma Consolidated
Financial Data."
(3) Comparable branch sales increases are calculated for each period presented
by comparing the net sales results in a fiscal year with the net sales
results for the prior fiscal year (for those branches that were open for
the entire fiscal year and the entire prior fiscal year).
(4) Gives effect to the following as if each had occurred as of January 26,
1996: (i) the PVF Acquisition; (ii) the Fiscal 1997 Acquisitions; and (iii)
this offering, the Notes Offering and the application of the net proceeds
therefrom by the Company.

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RISK FACTORS

In addition to the other information included or incorporated by reference
in this Prospectus, prospective investors should consider carefully the
following information relating to the Company and the Common Stock before making
an investment in the Common Stock offered hereby.

RISKS OF ACQUISITION STRATEGY

A significant portion of the Company's growth strategy is based upon the
acquisition of other building products businesses. During the normal course of
its business, the Company pursues suitable acquisition opportunities in selected
markets. There can be no assurance, however, that the Company will be able to
continue to identify and acquire appropriate businesses or obtain financing for
such acquisitions on satisfactory terms. In addition, no assurance can be given
that the Company will be successful in integrating the business obtained in the
PVF Acquisition or any other acquired business into its existing operations, or
that such integration will not result in unforeseen operational difficulties or
require a disproportionate amount of management's attention. Future acquisitions
may be financed through the incurrence of additional indebtedness or through the
issuance of Common Stock or the issuance of equity-linked securities, which may
be dilutive to the Company's shareholders. Furthermore, there can be no
assurance that competition for acquisition opportunities in the building
products industry will not escalate, thereby increasing the cost to the Company
of making further acquisitions or causing the Company to refrain from making
further acquisitions. See "Business -- Acquisition Strategy" and "-- The PVF
Acquisition."

DEPENDENCE ON CONSTRUCTION MARKETS, ESPECIALLY IN FLORIDA

Demand for the Company's products depends to a significant degree on the
commercial, residential and industrial construction markets. The level of
activity in the commercial construction market depends largely on vacancy and
absorption rates, interest rates, regional economic outlooks, the availability
of financing and general economic conditions. The level of activity in the
residential construction market depends on new housing starts and residential
renovation projects, which are a function of many factors, including interest
rates, availability of financing, housing affordability, unemployment,
demographic trends, gross domestic product growth and consumer confidence. The
level of activity in the industrial construction market is linked to the
industrial economic outlook, corporate profitability, interest rates and
capacity utilization. Consequently, the level of activity in the commercial,
residential and industrial construction markets is determined by factors that
are not within the Company's control. Moreover, since such markets are sensitive
to cyclical changes in the economy, future downturns in the economy or lack of
further improvement in the economy could negatively affect the Company's results
of operations, especially in Florida where approximately 43% of the Company's
net sales were derived in fiscal 1996.

UNCERTAINTY OF SUPPLY AND PRICE OF PRODUCTS

The Company distributes construction materials and supplies manufactured by
over 5,500 manufacturers and suppliers, no one of which accounted for more than
6% of the Company's total purchases during fiscal 1996. Although the Company has
a widely diversified base of suppliers, future supply shortages may occur from
time to time as a result of unanticipated demand or production difficulties. In
such cases, suppliers often allocate products among distributors, which could
have a short-term adverse effect on the Company's results of operations.
Although the Company has entered into strategic partnerships with certain
suppliers, if the Company fails to maintain such strategic partnerships or if
such suppliers cease to offer competitive pricing terms, the Company's results
of operations may be adversely affected. Furthermore, the future financial
performance of PVF is directly influenced by the cost of stainless steel which,
as a commodity item, can be volatile. A significant fluctuation in the price of
stainless steel could have a material adverse effect on PVF's future
profitability and could create cyclicality in PVF's operating performance. See
"Business -- Operating Strategy -- Volume Purchasing Power" and "-- Customers
and Suppliers."

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COMPETITION

The building products industry is highly competitive and fragmented. The
principal competitive factors in the Company's business are availability of
materials and supplies, pricing of products, availability of credit, technical
product knowledge as to application and usage, and advisory and other service
capabilities. The Company competes with other wholesalers, manufacturers who
sell certain lines directly to contractors and other of the Company's customers
and, to a limited extent, retailers in the markets for plumbing, electrical
fixtures and supplies, building materials, pool supplies and contractor's tools.
The Company's competition varies by product line, customer classification and
geographic market. No assurance can be given that the Company will be able to
respond effectively to the competitive pressures created by those entities,
especially since certain of those entities have substantially greater financial
and other resources than those of the Company. See "Business -- Competition."

RELIANCE ON EXECUTIVE OFFICERS

The Company is highly dependent upon the skills, experience and efforts of
its executive officers. Loss of the services of one or more of the Company's
executive officers could have a material adverse effect on the Company's
business and development. The Company's continued growth also depends in part on
its ability to attract and retain qualified managers, salespersons and other key
employees and on its executive officers' ability to manage growth successfully.
No assurance can be given that the Company will be able to attract and retain
such employees or that such executive officers will be able to manage growth
successfully. See "Management."

SUBSTANTIAL INCREASE IN SHARES OUTSTANDING; LIMITATIONS ON PAYMENT OF DIVIDENDS

This offering, the PVF Acquisition and the acquisition of Elasco Inc. will
substantially increase the number of shares of Common Stock outstanding. The
amount of future dividends, as well as the decision to pay any dividends, in
respect of the Common Stock will depend on the Company's results of operations,
capital requirements and financial condition and other factors that the Board of
Directors deems relevant. In addition, certain debt instruments and agreements
to which the Company and its subsidiaries are or may in the future become
parties contain or may contain restrictive covenants and provisions that limit
the amount of dividends payable by the Company. See "Price Range of Common Stock
and Dividends" and "Description of Notes."

VOLATILITY OF MARKET PRICE FOR COMMON STOCK

From time to time after this offering, there may be significant volatility
in the market price for the Common Stock. Operating results of the Company or of
other companies participating in the building products industry, changes in
general economic conditions and the financial markets, or other developments
affecting the Company or its competitors could cause the market price for the
Common Stock to fluctuate substantially. See "-- Dependence on Construction
Markets, Especially in Florida" above and "Price Range of Common Stock and
Dividends."

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USE OF PROCEEDS

The net proceeds to the Company from the sale of 1,250,000 shares of Common
Stock offered hereby are estimated to be approximately $33.9 million
(approximately $40.4 million if the Underwriters' over-allotment option is
exercised in full). This assumes a public offering price of $29.00 per share of
Common Stock, the last reported sale price of the Common Stock on the NYSE on
April 1, 1996, and expenses payable by the Company estimated at $425,000. The
Company expects to apply the net proceeds from this offering to reduce
indebtedness outstanding under its revolving credit facility and line of credit
agreement. At the end of fiscal 1996, such indebtedness had a weighted average
interest rate of 6.29% per annum and becomes payable on June 30, 1998.

The net proceeds to the Company from the sale of the Notes are estimated to
be approximately $100 million. The Company expects to apply approximately $74.4
million of the net proceeds of the Notes Offering to partially fund the PVF
Acquisition. The remaining net proceeds therefrom will be used to further repay
indebtedness outstanding under the Company's revolving credit facility and line
of credit agreement. See "Business -- The PVF Acquisition" and "Description of
Notes."

This offering and the Notes Offering are contingent upon the consummation
of the PVF Acquisition. If the Company is unable to secure financing through the
Notes Offering (or if the Notes Offering is consummated after the PVF
Acquisition), the Company has secured a commitment for interim financing of $55
million from its bank syndication group which, along with interim financing from
the sellers in the PVF Acquisition of $30 million, would be utilized to fund the
PVF Acquisition. The Company will not receive any of the proceeds from the sale
of Common Stock by the Selling Shareholders.

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company (i) as of January 26, 1996 and (ii) pro forma as adjusted to give effect
to the following as if each had occurred as of January 26, 1996: the PVF
Acquisition; the Fiscal 1997 Acquisitions; and this offering (assuming a public
offering price of $29.00 per share of Common Stock, the last reported sale price
of the Common Stock on the NYSE on April 1, 1996), the Notes Offering and the
application of the net proceeds therefrom by the Company. See "Use of Proceeds,"
"Selected Unaudited Pro Forma Consolidated Financial Data," and the Company's
Consolidated Financial Statements and related notes included in this Prospectus.

<TABLE>
<CAPTION>
JANUARY 26, 1996
----------------------
PRO FORMA
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt....................................... $ 2,551 $ 2,551
-------- -----------
Long-term debt, less current portion:
Unsecured revolving bank notes........................................ 68,300 31,766
Short-term instruments classified as long-term debt................... 35,200 35,200
Other notes payable................................................... 558 558
Capital lease obligations............................................. 2,157 2,157
% Senior Notes...................................................... -- 100,000
-------- -----------
Total long-term debt, less current portion.................... 106,215 169,681
-------- -----------
Shareholders' equity:
Preferred Stock, no par value; 10,000,000 shares authorized; none
issued; preferences, limitations and relative rights to be
established by Board of Directors -- --
Common Stock, par value $1 per share; 20,000,000 shares authorized;
6,798,462 and 9,204,211 issued..................................... 6,798 9,204
Capital in excess of par value........................................ 40,553 91,586
Retained earnings..................................................... 106,792 110,869
-------- -----------
Total shareholders' equity.................................... 154,143 211,659
-------- -----------
Total capitalization..................................... $262,909 $ 383,891
======== =========
</TABLE>

9
<PAGE> 11

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

The Common Stock is listed on the NYSE under the symbol "HUG." The
following table sets forth the high and low sale prices of the Common Stock, as
reported on the NYSE for, and the dividends per share declared in, the periods
indicated.

<TABLE>
<CAPTION>
PRICE RANGE
-------------- DIVIDENDS
HIGH LOW PER SHARE
---- --- ---------
<S> <C> <C> <C>
Year Ended January 27, 1995:
1st Quarter.................................................... $32 1/4 $24 $ .05
2nd Quarter.................................................... 28 3/4 17 .05
3rd Quarter.................................................... 21 17 .06
4th Quarter.................................................... 19 3/8 15 7/8 .06
Year Ended January 26, 1996:
1st Quarter.................................................... 20 7/8 17 3/4 .07
2nd Quarter.................................................... 22 3/8 18 7/8 .07
3rd Quarter.................................................... 27 1/4 21 3/8 .07
4th Quarter.................................................... 30 1/2 23 5/8 .09
Year Ending January 31, 1997:
1st quarter (through April 19, 1996)........................... 30 26 5/8 .09
</TABLE>

The closing sale price of the Common Stock, as reported on the NYSE, on
April 19, 1996 was $29.875 per share. As of April 1, 1996, there were 1,114
holders of record of the Common Stock.

The amount of future dividends, as well as the decision to pay any
dividends, in respect of the Common Stock will depend on the Company's results
of operations, capital requirements and financial condition and other factors
that the Board of Directors deems relevant. In addition, certain debt
instruments and agreements to which the Company and its subsidiaries are or may
in the future become parties contain or may contain restrictive covenants and
provisions that limit the amount of dividends payable by the Company. See
"Description of Notes."

10
<PAGE> 12

SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The unaudited Pro Forma Consolidated Balance Sheet of the Company as of
January 26, 1996 gives effect to the following as if each had occurred as of
January 26, 1996: (i) the PVF Acquisition; (ii) the Fiscal 1997 Acquisitions;
and (iii) this offering, the Notes Offering and the application of the net
proceeds therefrom by the Company. The unaudited Pro Forma Consolidated
Statement of Income of the Company for the fiscal year ended January 26, 1996
gives effect to the following as if each had occurred on January 28, 1995: (i)
the PVF Acquisition; (ii) the Fiscal 1997 Acquisitions; and (iii) this offering,
the Notes Offering and the application of the net proceeds therefrom by the
Company.

The PVF Acquisition was accounted for under the purchase method of
accounting. The total purchase price was allocated to tangible and identifiable
intangible assets and liabilities based on management's estimate of their fair
values with the excess of cost over the fair value of the net assets acquired
allocated to goodwill.

The unaudited Pro Forma Consolidated Balance Sheet and Statement of Income
have been prepared by the Company based on the Consolidated Financial Statements
of the Company and PVF included in this Prospectus. The unaudited Pro Forma
Consolidated Balance Sheet and Statement of Income are presented for
illustration purposes only and do not purport to be indicative of the combined
financial condition or results of operations that actually would have occurred
if the transactions described above had been effected at the dates indicated or
to project future financial condition or results of operations for any future
period. In particular, PVF's gross margin may be adversely affected by
fluctuations in prices for stainless steel and nickel alloy. In addition, the
volatility of prices for stainless steel and nickel alloy may create cyclicality
in PVF's operating performance. Therefore, management believes that the pro
forma consolidated financial data are not necessarily indicative of future
performance. The unaudited Pro Forma Consolidated Balance Sheet and Statement of
Income should be read in conjunction with the Company's Consolidated Financial
Statements and the Consolidated Financial Statements of PVF and related notes
thereto included in this Prospectus.

11
<PAGE> 13

HUGHES SUPPLY, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JANUARY 26, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON
STOCK
PRO FORMA PRO FORMA OFFERING AND
ADJUSTMENTS ADJUSTMENTS NOTES
HUGHES PVF FISCAL 1997 FISCAL 1997 PRO FORMA OFFERING PRO FORMA
SUPPLY PVF ACQUISITION ACQUISITIONS ACQUISITIONS COMBINED ADJUSTMENTS AS ADJUSTED
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
(A) (A) (B) (B)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents... $ 3,432 $ 204 $ -- $ 274 $ -- $ 3,910 $ -- $ 3,910
Accounts
receivable,
net........ 143,354 12,584 -- 8,516 (62)(i) 164,392 -- 164,392
Inventories... 132,524 39,829 -- 8,572 -- 180,925 -- 180,925
Other current
assets..... 18,175 747 (747)(c) 44 (16)(i) 18,203 -- 18,203
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
Total
current
assets... 297,485 53,364 (747) 17,406 (78) 367,430 -- 367,430
Property and
equipment,
net.......... 57,697 1,295 500(d) 3,107 (1,385)(i) 61,214 -- 61,214
Goodwill....... 16,637 -- 58,167(n) -- 4,327(o) 79,131 -- 79,131
Other assets... 7,277 1,270 (132)(e) 597 (500)(i) 8,512 128(l) 8,640
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
$379,096 $55,929 $ 57,788 $ 21,110 $ 2,364 $516,287 $ 128 $ 516,415
======== ======= ========== ========= ========= ======== ========== =========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Accounts
payable.... $ 84,875 $ 8,233 $ -- $ 5,717 $ -- $ 98,825 $ -- $ 98,825
Other current
liabilities... 32,098 8,126 (6,595)(f) 1,062 (206)(i) 34,485 -- 34,485
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
Total
current
liabilities... 116,973 16,359 (6,595) 6,779 (206) 133,310 -- 133,310
Long-term
debt......... 106,215 7,084 78,269(g)(p) 7,405 5,018(j) 203,991 (34,310)(m)(p) 169,681
Other
noncurrent
liabilities... 1,765 -- -- 605 (605)(i) 1,765 -- 1,765
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
Total
liabilities... 224,953 23,443 71,674 14,789 4,207 339,066 (34,310) 304,756
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
Shareholders'
equity:
Capital
stock...... 6,798 10 660(h) 521 (35)(k) 7,954 1,250(m) 9,204
Capital in
excess of
par
value...... 40,553 2,021 15,909(h) 85 (170)(k) 58,398 33,188(m) 91,586
Retained
earnings... 106,792 30,455 (30,455)(h) 5,715 (1,638)(k) 110,869 -- 110,869
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
Total
shareholders'
equity... 154,143 32,486 (13,886) 6,321 (1,843) 177,221 34,438 211,659
-------- ------- ----------- ------------ ------------ --------- ------------ -----------
$379,096 $55,929 $ 57,788 $ 21,110 $ 2,364 $516,287 $ 128 $ 516,415
======== ======= ========== ========= ========= ======== ========== =========
</TABLE>

See notes to unaudited pro forma consolidated balance sheet.

12
<PAGE> 14

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(a) The Company has entered into an agreement to acquire certain assets and
liabilities of PVF for cash consideration of $74,400 and Common Stock
consideration of $18,600.

(b) The Company has acquired certain assets and liabilities of two entities
accounted for under the purchase method of accounting, and has entered into
an agreement to acquire a third entity which will be accounted for under
the poolings of interests method. Cash consideration of $5,430 has been
paid and Common Stock consideration of $13,250 will be issued for these
acquisitions. These acquisitions are immaterial individually and in the
aggregate.

(d) Adjustment to write-up property and equipment acquired in the PVF
Acquisition to its estimated fair value.

(e) Adjustment to record the elimination of $504 of other assets of PVF not
being acquired and to record debt issuance costs of $372 incurred on the
issuance of $74,772 of Notes.

(f) Adjustment to accrue for professional fees of $500 associated with the PVF
Acquisition, to eliminate $2,818 of other current liabilities which are not
being assumed, and to reclassify $4,277 of the current portion of PVF debt
to long term as it will be replaced by the Company's line of credit.

(g) Adjustment to reflect the issuance of $74,772 of Notes (assuming an
interest rate of 7.75% and debt issuance costs of $372) to be issued in
connection with the PVF Acquisition, the elimination of $780 of PVF debt
which is not being assumed, and the reclassification of $4,277 of the
current portion of PVF debt to long term as it will be replaced by the
Company's line of credit.

(h) Elimination of the shareholders' equity accounts of PVF and to reflect the
issuance of 669,956 shares of Common Stock in connection with the PVF
Acquisition at $27.76 per share, which approximates the estimated fair
value of the Common Stock at the date the terms of the acquisition were
agreed upon.

(i) Elimination of assets/liabilities of the Fiscal 1997 Acquisitions which
are not being acquired or assumed.

(j) Adjustment to reflect the borrowing of $5,430 under the Company's line of
credit facility to fund a portion of the purchase price for the Fiscal 1997
Acquisitions and the elimination of $412 of long-term debt of the acquired
companies which is not being assumed.

(k) Adjustment to reflect the issuance of 485,793 shares of Common Stock for
one of the Fiscal 1997 Acquisitions to be accounted for under the poolings
of interest method of accounting and the elimination of the capital
accounts of the Fiscal 1997 Acquisitions which have been accounted for
under the purchase method of accounting.

(l) Adjustment to reflect the balance of the debt issue costs to be incurred
upon the issuance of $25,228 of Notes.

(m) Adjustment to reflect the issuance of $25,228 of Notes (assuming an interest
rate of 7.75% and net proceeds to the Company of $25,100) and the issuance
of 1,250,000 shares of Common Stock at an assumed price of $29.00 per share
(estimated net proceeds to the Company of $27.55 per share and $34,438 in
the aggregate) with the net proceeds from these offerings being used to
reduce amounts outstanding under the Company's line of credit facility.

(n) Adjustment to record the excess of the acquisition cost over the fair value
of net assets acquired (goodwill) of PVF of $58,167.

(o) Adjustment to reflect the excess of the acquisition cost over the fair
value of net assets acquired (goodwill) of $4,327.

(p) Included in the adjustment to long-term debt is $74,772 and $25,228 for the
private placement of $100,000 of Notes with an assumed final maturity in
2011. Proceeds from the issuance of the Notes will be used to partially
fund the PVF Acquisition and to provide additional working capital to the
Company. Should the Notes Offering not be consummated, the Company intends
to finance the PVF Acquisition through a $55,000 bridge loan with the
Company's bank syndication group and issuance of a $30,000 promissory note
to the sellers. The bridge loan will carry interest at approximately the
same rate as the Company's line of credit facility (an average rate of
6.29% in fiscal 1996) for the first six months, and will increase 1% for
months six through nine and increase an additional 1% after nine months.
The sellers' promissory note will bear interest at 6% for the first six
months, then will increase to prime for the next six months. Thereafter,
interest on such note will be at prime plus 1/2%. The sellers' note will
mature on May 31, 1998. See "Description of Notes."

13
<PAGE> 15

HUGHES SUPPLY, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED JANUARY 26, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ADJUSTMENTS ADJUSTMENTS
HUGHES PVF FISCAL 1997 FISCAL 1997
SUPPLY PVF ACQUISITION ACQUISITIONS ACQUISITIONS
------------ ----------- ----------- ------------ ---------------
(A) (A)
<S> <C> <C> <C> <C> <C>
Net sales................ $1,082,179 $ 109,159 $ -- $ 67,690 $ (186)(f)
Cost of sales............ 858,573 66,428 -- 56,261 --
------------ ----------- ----------- ------------ ---------------
Gross profit........... 223,606 42,731 -- 11,429 (186)
Operating expenses....... 183,133 14,349 (3,264)(b) 9,064 (1,036)(g)
Depreciation &
amortization........... 10,585 673 3,878(c) 266 249(h)
------------ ----------- ----------- ------------ ---------------
Total operating
expenses............... 193,718 15,022 614 9,330 (787)
------------ ----------- ----------- ------------ ---------------
Operating income....... 29,888 27,709 (614) 2,099 601
Interest and other
income................. 4,605 175 -- 762 --
Interest expense......... (7,484) (965) (5,537)(d)(j) (615) --
------------ ----------- ----------- ------------ ---------------
Income before taxes.... 27,009 26,919 (6,151) 2,246 601
Income taxes............. 10,959 10,910 (2,478)(e) 23 1,133(e)
------------ ----------- ----------- ------------ ---------------
Net income............. $ 16,050 $ 16,009 $(3,673) $ 2,223 $ (532)
=========== ========== =========== =========== =============
Earnings per share:
Primary................ $ 2.34
===========
Fully diluted.......... $ 2.31
===========
Average shares
outstanding:
Primary................ 6,856
===========
Fully diluted.......... 6,935
===========

<CAPTION>
COMMON
AND NOTES
PRO FORMA OFFERING PRO FORMA
COMBINED ADJUSTMENTS AS ADJUSTED
---------------- ----------- -----------
<S> <C> <C> <C>
Net sales................ $ 1,258,842 $ -- $ 1,258,842
Cost of sales............ 981,262 -- 981,262
---------------- ----------- -----------
Gross profit........... 277,580 -- 277,580
Operating expenses....... 202,246 -- 202,246
Depreciation &
amortization........... 15,651 -- 15,651
---------------- ----------- -----------
Total operating
expenses............... 217,897 -- 217,897
---------------- ----------- -----------
Operating income....... 59,683 -- 59,683
Interest and other
income................. 5,542 -- 5,542
Interest expense......... (14,601) 1,778(i)(j) (12,823)
---------------- ----------- -----------
Income before taxes.... 50,624 1,778 52,402
Income taxes............. 20,547 722(e) 21,269
---------------- ----------- -----------
Net income............. $ 30,077 $ 1,056 $ 31,133
========== =========== ==========
Earnings per share:
Primary................ $ 3.36
==========
Fully diluted.......... $ 3.33
==========
Average shares
outstanding:
Primary................ 9,262
==========
Fully diluted.......... 9,342
==========
</TABLE>

See notes to unaudited pro forma consolidated statement of income.

14
<PAGE> 16

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(DOLLARS IN THOUSANDS)

(a) Amounts represent results of acquired companies for the 12 months ended
December 31, 1995.
(b) Adjustments to operating expenses to eliminate overhead allocation from
PVF's parent of $2,341 and personnel costs of $923 which will be
reduced/eliminated as a result of the acquisition.
(c) Adjustment to reflect amortization on goodwill of $58,167 on a
straight-line basis over 15 years.
(d) Adjustment to interest expense as a result of the PVF Acquisition:

<TABLE>
<S> <C>
Interest on $74,772 of Notes (including $372 of debt issuance costs)
to be issued in connection with the PVF Acquisition, assuming an
interest rate of 7.75%............................................ $5,795
Reduction of interest on PVF average borrowings of $10,651 at
average rate of 9.06% replaced by the Company's line of credit
with an average rate of 6.29%..................................... (295)
Amortization of debt issuance costs................................. 37
------
$5,537
======
</TABLE>

(e) Federal income tax adjustments relating to the acquisitions using the
Company's annual effective tax rate of 40.6%. This amount also reflects the
effect on income taxes for earnings on a sub-chapter S corporation.
(f) Elimination of sales generated from assets which were not acquired.
(g) Adjustment to reflect a reduction in personnel costs of $855 as a result of
the acquisitions and the elimination of expenses of $181 associated with
assets which were not acquired.
(h) Adjustment to eliminate depreciation charges of $39 for plant and equipment
which was not acquired and to reflect amortization of $288 on $4,327 of
goodwill recorded on the acquisitions on a straight-line basis over 15
years.
(i) Adjustment to interest expense as a result of this offering and the Notes
Offering:

<TABLE>
<S> <C>
Use of proceeds from this offering to reduce amounts outstanding
under the Company's line of credit facility....................... $2,159
Increase in interest expense resulting from replacing amounts
outstanding under the line of credit facility with the Notes...... (381)
------
$1,778
======
</TABLE>

(j) If the Company is unable to secure financing through the Notes Offering,
the Company has secured a commitment for interim financing of $55,000 from
its bank syndication group which along with interim financing from the
sellers of $30,000 would be utilized to fund the PVF Acquisition. The
alternative financing would result in the Company incurring an estimated
additional $187 of interest expense compared to the amount assumed with
respect to the Notes Offering.

15
<PAGE> 17

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected consolidated financial data have been derived from
audited consolidated financial statements of the Company. The following data
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Company's Consolidated
Financial Statements and related notes included in this Prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------
JAN. 31, JAN. 29, JAN. 28, JAN. 27, JAN. 26,
1992(1) 1993 1994 1995 1996
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales.................................. $558,299 $600,185 $734,958 $875,459 $1,082,179
Cost of sales.............................. 451,776 485,074 590,466 699,132 858,573
-------- -------- -------- -------- ----------
Gross profit............................... 106,523 115,111 144,492 176,327 223,606
Operating expenses......................... 107,958 109,352 131,383 154,693 193,718
-------- -------- -------- -------- ----------
Operating income (loss).................... (1,435) 5,759 13,109 21,634 29,888
Interest expense........................... 6,439 5,117 5,055 5,284 7,484
Interest and other income.................. 2,058 3,743 2,981 2,848 4,605
-------- -------- -------- -------- ----------
Income (loss) before income taxes.......... (5,816) 4,385 11,035 19,198 27,009
Income taxes (benefits).................... (1,960) 1,544 4,511 7,713 10,959
-------- -------- -------- -------- ----------
Net income (loss).......................... $ (3,856) $ 2,841 $ 6,524 $ 11,485 $ 16,050
======== ======== ======== ======== =========
Earnings (loss) per share:
Primary.................................. $ (0.76) $ 0.56 $ 1.27 $ 1.83 $ 2.34
======== ======== ======== ======== =========
Fully diluted............................ $ (0.76) $ 0.56 $ 1.19 $ 1.81 $ 2.31
======== ======== ======== ======== =========
Cash dividends per share................... $ 0.24 $ 0.12 $ 0.16 $ 0.22 $ 0.30
======== ======== ======== ======== =========
Shares outstanding:
Primary.................................. 5,046 5,058 5,143 6,259 6,856
Fully diluted............................ 5,046 5,086 6,313 6,443 6,935
OPERATING DATA:
Branches at end of period.................. 124 130 143 173 212
Comparable branch sales increases
(decrease)(2)............................ (14)% 3% 17% 13% 8%
BALANCE SHEET DATA (END OF PERIOD):
Working capital............................ $112,984 $120,522 $142,392 $172,794 $180,512
Total assets............................... 234,723 246,249 279,390 346,116 379,096
Long-term debt, less current portion....... 77,240 86,258 104,692 105,243 106,215
Shareholders' equity....................... 86,829 90,080 98,066 136,104 154,143
</TABLE>

- ---------------

(1) Fiscal 1992 represents a 53-week fiscal year.
(2) Comparable branch sales increases are calculated for each period presented
by comparing the net sales results in a fiscal year with the net sales
results for the prior fiscal year (for those branches that were open for
the entire fiscal year and the entire prior fiscal year).

16
<PAGE> 18

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Hughes Supply is one of the largest diversified wholesale distributors of
materials, equipment and supplies for construction and industrial markets
operating primarily in the southeastern and midwestern United States. The
Company distributes more than 100,000 products, through 221 branches located in
15 states and Puerto Rico. The Company's customers are subcontractors, general
contractors, electric utilities, municipalities and manufacturers. Management
believes that the Company holds significant market share in a majority of its
local markets and is one of the largest distributors of its range of products in
the southeastern and midwestern United States.

Since January 29, 1993, the Company has completed 23 acquisitions
representing 68 branches, excluding the PVF Acquisition. In addition to
increased geographical penetration, acquisitions often provide opportunities for
the Company to gain market share and to enhance and diversify product offerings.
Management believes that the most cost effective way for the Company to enter
new geographic markets is through acquisitions.

On March 27, 1996, the Company entered into an asset purchase agreement to
acquire substantially all of the assets, properties and business of PVF and its
subsidiaries and to assume certain of their liabilities. The aggregate
consideration to be paid in the PVF Acquisition is approximately $106 million,
consisting of cash in the amount of $74.4 million, the issuance of 669,956
shares of Common Stock and the assumption of up to $13 million of bank debt. The
PVF Acquisition is scheduled to close on May 13, 1996. This offering is
contingent upon the consummation of the PVF Acquisition.

On February 5, 1996, the Company acquired Waldorf Supply Inc. ("Waldorf"),
a wholesale distributor of plumbing supplies and materials in Waldorf, Maryland.
Waldorf has one location and had annual sales of approximately $6.2 million in
its last fiscal year. Waldorf is a fill-in acquisition.

On March 22, 1996, the Company acquired West Virginia Water and Waste
Supply Co. ("West Virginia Water"), a wholesale distributor of water and sewer
products in Charleston, West Virginia. West Virginia Water has two locations and
had annual sales of approximately $17.9 million in its last fiscal year. West
Virginia Water represents a new market acquisition.

The Company expects to acquire Elasco Inc., a wholesale distributor of
electric utility products in Mattoon, Illinois in May 1996. Elasco Inc. has
three locations and had annual sales of approximately $43.6 million in its last
fiscal year. Elasco Inc. is a new market acquisition in the Midwest and will be
accounted for as a poolings of interest.

The acquisitions of Waldorf, West Virginia Water and Elasco Inc. are
collectively referred to as the "Fiscal 1997 Acquisitions."

As described in Note 2 of the Notes to the Company's Consolidated Financial
Statements, in fiscal 1996 the Company entered into business combinations with
Moore Electric Supply, Inc. and Florida Pipe & Supply Company, and such business
combinations were accounted for as poolings of interests. Accordingly, all
financial data in this discussion and analysis is reported as though the
companies had always been combined.

In addition to the business combinations accounted for as poolings of
interests referred to above, in fiscal 1996 the Company purchased nine wholesale
distributor businesses for an aggregate amount of approximately $13 million ($10
million in cash and $3 million in Common Stock). In fiscal 1995, amounts paid
for acquisitions totaled approximately $21 million ($11 million in cash, $4
million in Common Stock and $6 million in other consideration), and amounts paid
for acquisitions in fiscal 1994 totaled approximately $4 million in cash. The
results of these acquired operations are included in the Company's Consolidated
Financial Statements from their respective dates of acquisition. See
"Business -- Acquisition Strategy."

17
<PAGE> 19

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage
of net sales represented by certain items in the Company's Consolidated
Statements of Income:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------
JAN. 28, JAN. 27, JAN. 26,
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Net sales..................................................... 100.0% 100.0% 100.0%
Cost of sales................................................. 80.3 79.9 79.3
Gross profit................................................ 19.7 20.1 20.7
Operating expenses............................................ 17.9 17.7 17.9
Operating income............................................ 1.8 2.5 2.8
Interest and other income..................................... 0.4 0.3 0.4
Interest expense.............................................. 0.7 0.6 0.7
Income before income taxes.................................. 1.5 2.2 2.5
Income taxes.................................................. 0.6 0.9 1.0
Net income.................................................. 0.9 1.3 1.5
</TABLE>

NET SALES

Net sales were $1.1 billion in fiscal 1996, representing a 23.6% increase
over fiscal 1995 net sales of $875.5 million. Fiscal 1995 net sales represented
a 19.1% increase over fiscal 1994 net sales of $735.0 million. Newly-opened and
acquired branches accounted for approximately 66% of the increase in net sales
in fiscal 1996 and 40% of the increase in net sales in fiscal 1995. The
remainder of the increase in each period was a result of sales increases in
existing branches.

The Company's strategy of expansion and diversification has contributed to
the above-mentioned sales gains along with growth in comparable branch sales.
Although residential construction activity decreased in fiscal 1995 and fiscal
1996 following a period of substantial residential construction activity in
fiscal 1994, this decrease was offset by an increase in commercial and
industrial construction activity in fiscal 1995 which continued through fiscal
1996.

Construction activity, especially commercial construction activity in the
Southeast, is expected to remain strong during fiscal 1997. Management believes
that the continuing favorable construction markets together with the Company's
acquisition program and growth in comparable branch sales should result in
continued sales growth.

GROSS PROFIT

Gross profit was $223.6 million in fiscal 1996, representing a 26.8%
increase over fiscal 1995 gross profit of $176.3 million. Fiscal 1995 gross
profit increased 22.0% over fiscal 1994 gross profit of $144.5 million. Gross
margins have improved steadily over the past three fiscal years. The improvement
has resulted from several factors, including the introduction of product
offerings with better margins, efficiencies resulting from the Company's use of
central distribution centers, and increased volume and concentration of supply
sources in connection with the implementation of the Company's preferred vendor
program.

OPERATING EXPENSES

Operating expenses were $193.7 million in fiscal 1996, representing a 25.2%
increase over fiscal 1995 operating expenses of $154.7 million. Newly-opened and
acquired branches accounted for approximately 60% of the increase. The remainder
of the increase was due primarily to personnel and transportation costs
associated with growth in the Company's sales. The 17.7% increase in fiscal 1995
operating expenses over fiscal 1994 operating expenses of $131.4 million was
primarily attributable (approximately 45%) to branches opened and acquisitions
made during fiscal 1995, as well as to an increase in costs, such as personnel,

18
<PAGE> 20

transportation and insurance, associated with sales growth. Operating expenses
as a percentage of sales remained relatively constant over the three-year
period.

NON-OPERATING INCOME AND EXPENSES

Interest and other income increased to $4.6 million in fiscal 1996 compared
to $2.8 million in fiscal 1995, representing a 61.7% increase. This increase is
primarily the result of improved collection of service charge income on
delinquent accounts receivable. In fiscal 1995, interest and other income
decreased to $2.8 million compared to $3.0 million in fiscal 1994, representing
a 4.5% decrease.

Interest expense increased to $7.5 million in fiscal 1996, representing a
41.6% increase over fiscal 1995 interest expense of $5.3 million. Higher
interest rates and higher average borrowing levels were equally responsible for
the increase. Fiscal 1995 interest expense was $200,000 higher than fiscal 1994
interest expense of $5.1 million, representing a 4.5% increase. This increase
was attributable to higher interest rates which were partially offset by lower
borrowing levels resulting in part from the conversion of $23.0 million of
subordinated debentures in April, 1994.

NET INCOME

As a result of the foregoing factors, net income in fiscal 1996 increased
by 39.7% to $16.1 million from $11.5 million in fiscal 1995. In fiscal 1996,
fully diluted earnings per share increased 27.6% to $2.31 compared to $1.81 in
fiscal 1995. Net income in fiscal 1995 increased by 76% from $6.5 million in
fiscal 1994. In fiscal 1995, fully diluted earnings per share increased by 52.1%
from $1.19 in fiscal 1994.

LIQUIDITY AND CAPITAL RESOURCES

Working capital at the end of fiscal 1996 amounted to $180.5 million
compared to $172.8 million and $142.4 million at the end of fiscal 1995 and
fiscal 1994, respectively. The Company continues to maintain more than 75% of
total assets as current assets. The working capital ratio was 2.54 to 1, 2.67 to
1 and 2.89 to 1 for fiscal 1996, fiscal 1995 and fiscal 1994, respectively.

During periods of expansion when sales volumes are increasing, the Company
is required to carry higher levels of inventories and receivables to support its
growth. The Company strives to maintain inventories at levels that support, but
not exceed, its current sales activity through (i) increased use of its central
distribution facilities and (ii) investment in resources to improve the
efficiency and service capability of such facilities. As a result, the inventory
turnover rate has been in excess of six turns for each of the last three fiscal
years, ranging from a low of 6.2 turns in fiscal 1995 to a high of 6.7 turns in
fiscal 1996. During the same period, the accounts receivable turnover rate has
been in excess of seven turns, ranging from a low of 7.1 turns in fiscal 1995 to
a high of 7.6 turns in fiscal 1996.

Net cash provided by operations was $20.3 million in fiscal 1996 compared
to $3.7 million in fiscal 1995 and cash used in operations in fiscal 1994 was
$2.2 million. The foregoing changes are due primarily to fluctuations in
accounts receivable, inventories and accounts payable. Because of an increase in
the amount of cash generated in fiscal 1996, net borrowings under short-term
debt instruments decreased to $6.2 million compared to $23.8 million in fiscal
1995 and $16.7 million in fiscal 1994.

The Company invested $11.9 million in property and equipment and $10.0
million in business acquisitions in fiscal 1996. These business acquisitions
added 20 branches to the Company's operations. Capital expenditures, not
including amounts which may be paid for business acquisitions in fiscal 1997,
are expected to be approximately $12 million.

During fiscal 1996, the Company's revolving credit facility and line of
credit agreement with a group of banks was amended in order to expand the
Company's maximum borrowings thereunder from $130 million to $160 million (see
Note 4 of Notes to the Company's Consolidated Financial Statements). After
giving effect to this offering (assuming a public offering price of $29.00 per
share of Common Stock, the last reported sale price of the Common Stock on the
NYSE on April 1, 1996) and approximately $25.2 million from the Notes

19
<PAGE> 21

Offering to reduce bank debt, the Company will have approximately $96.8 million
available under this agreement.

Management believes that the Company has sufficient borrowing capacity to
take advantage of growth and business acquisition opportunities and has the
resources necessary (subject to certain covenants related to the Notes and in
the revolving credit facility and line of credit agreement) to fund ongoing
operating requirements and anticipated capital expenditures. Future expansion
will continue to be financed on a project-by-project basis through the
incurrence of additional indebtedness or, as circumstances allow, through the
issuance of Common Stock or equity-linked securities.

INFLATION AND CHANGING PRICES

The Company is aware of the potentially unfavorable effects inflationary
pressures may create as a result of higher asset replacement costs and related
depreciation, higher interest rates and higher material costs. The Company seeks
to minimize these effects by taking advantage of economies of scale in
purchasing and inventory management which result in cost reductions and improved
productivity. In addition, from time to time the Company will also implement
price increases in order to maintain reasonable profit margins. Management
believes, however, that inflation (which has been moderate over the past few
years) and changing prices have not significantly affected the Company's results
of operations or markets in its three most recent fiscal years.

SEASONALITY

The Company experiences some seasonality in its business. The Company's net
sales and net income during the first quarter and, to a lesser extent, the
fourth quarter of its fiscal year are generally lower than the second and third
quarters of its fiscal year. The first and fourth quarter are typically
adversely affected by winter construction cycles and weather patterns as the
level of activity in both the home improvement and new construction markets
decreases. The Company has a concentration of locations in the southeastern
United States, which can offset to some degree the effects of winter weather in
other states. Management closely monitors operating expenses and inventory
levels during seasonally affected periods and, to the extent possible, controls
variable operating costs.

20
<PAGE> 22

BUSINESS

GENERAL

The Company's principal business objective is to achieve profitable growth,
both internally and through selective acquisitions, primarily in existing and
contiguous geographic markets. The Company has grown internally through
increases in comparable branch net sales, new branch openings and the addition
of new product groups. Since January 29, 1993, the Company has opened 25 new
branches. In addition, the Company continues to pursue an active acquisition
program to capitalize on the opportunities presented by the substantial size and
highly fragmented ownership structure of its industry. Since January 29, 1993,
the Company has completed 23 acquisitions representing 68 branches, excluding
the PVF Acquisition. In addition to increased geographic penetration,
acquisitions often provide opportunities for the Company to gain market share
and to enhance and diversify product offerings. Management believes that the
most cost effective way for the Company to enter new geographic markets is
through acquisitions. All of the Company's significant acquisitions have been
accretive to the Company's earnings per share.

INDUSTRY OVERVIEW

Based on estimates available to the Company, industry sales in the United
States of products sold by the Company exceeded $100 billion in 1995, and no
wholesale distributor of these products accounted for more than 2% of the total
market. As a result of their smaller size, many of the local or regional
distributors generally lack the purchasing power of a larger entity, may lack
the resources to offer broad product lines and multiple brands, and may not
possess sophisticated inventory management and control systems necessary to
operate multiple branches efficiently.

As a result, during the past decade many of the large wholesale
distributors, including the Company, have grown considerably through
acquisitions. However, many independent distributors are still privately owned,
relationship-based companies that emphasize service, delivery and reliability to
their customers. Further, a majority of independent distributors focus on a
particular size or type of customer and a particular product

21
<PAGE> 23

group. In contrast, the Company services various sizes and types of customers
and multiple product groups and diversifies its sales across various types of
construction and users of its products. Due to its strong competitive position,
its size and its management infrastructure, management also believes that the
Company is well-positioned to continue to benefit from consolidation trends
within the wholesale distribution business.

ACQUISITION STRATEGY

New market acquisitions represent the addition of new product groups,
within related commercial construction and industrial products categories, or
the entry into new geographic markets, or both. During the last three fiscal
years, the Company has increasingly focused on new market acquisitions with the
goal of adding products and product groups with higher gross margins, increasing
sales to the replacement and industrial markets (which tend to be less cyclical
than new construction markets), achieving greater geographic diversification and
developing additional opportunities for future fill-in acquisitions and new
branch openings. Recent new market acquisitions completed by the Company include
(i) The Treaty Distribution Group, resulting in a significant increase in the
Company's water and sewer products business in new geographic markets, (ii)
Moore Electric Supply, Inc., resulting in a significant increase in the
Company's electrical products business in new geographic markets, and (iii)
Florida Pipe & Supply Company, the Company's initial entry into the industrial
pipe, valve and fitting market.

22
<PAGE> 24

The following table summarizes the fill-in and new market acquisitions
completed, or to be completed, by the Company since January 29, 1993:

<TABLE>
<CAPTION>
TYPE OF DATE OF NUMBER OF STATE(S)/TERRITORY MAJOR PRODUCT
ACQUISITION ACQUISITION ACQUISITION BRANCHES OF OPERATION GROUPS
- --------------------- ----------- ---------------- --------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
Virginia branch...... Fill-in June, 1993 1 VA Plumbing
Florida and Georgia
branches........... Fill-in June, 1993 3 FL, GA Electrical and
Electric Utilities
Electrical
Distributors,
Inc.*.............. New market June, 1993 1 GA Electrical
Alabama Water Works
Supply, Inc........ New market July, 1993 3 AL Water and Sewer
Florida branches..... Fill-in December, 1993 2 FL Building Materials

Swaim Supply
Company*........... New market January, 1994 8 NC, VA Plumbing, Air
Conditioning and
Heating
Florida and Georgia
branches(1)........ Fill-in February- 4 FL, GA Water and Sewer,
September, 1994 Plumbing and
Electrical
Treaty Distribution
Group branches..... New market January, 1995 16 IN, OH Water and Sewer,
Plumbing, Air
Conditioning and
Heating
Olander & Brophy,
Inc................ New market March, 1995 4 OH, PA Pool Equipment and
Supplies, Water
Systems
Port City Electrical
Supply, Inc........ Fill-in March, 1995 3 GA, SC Electrical
Elec-Tel Supply
Company............ Fill-in April, 1995 1 GA Electric Utilities
Various
branches(1)........ Fill-in July, 1995 9 AL, FL, KY, MD, Electrical, Pool
February, 1996 NC, NJ, SC, TN, Equipment and
VA Supplies, Plumbing
Moore Electric
Supply, Inc.*...... New market August, 1995 5 NC, SC Electrical
Atlantic Pump &
Equipment
Companies.......... Fill-in September, 1995 4 FL, PR Pool Equipment and
Supplies
Florida Pipe & Supply
Company*........... New market December, 1995 1 FL Industrial Pipe,
Valves and Fittings
Waldorf Supply
Inc................ Fill-in February, 1996 1 MD Plumbing
West Virginia Water
and Waste Supply
Co................. New market March, 1996 2 WV Water and Sewer
Elasco Inc.*......... New market Pending 3 IL, OH Electric Utilities
PVF.................. New market Pending 16 AL, GA, IL, LA, Industrial Pipe,
MO, NC, NJ, TN, Valves and Fittings
TX, UT, WA
--
TOTAL.......
87
==========
</TABLE>

- ---------------

* Accounted for, or to be accounted for, as pooling of interests.

(1) Facilities acquired in purchases of assets from four entities.

23
<PAGE> 25

OPERATING STRATEGY

The Company's operating strategy is based on decentralizing customer
related functions at the branch level, such as sales and local inventory
management, and centralizing certain administrative functions at the corporate
level, such as credit, human resources, finance and accounting, and management
information systems. Key elements of the Company's operating strategy include:

Comprehensive and Diversified Product Groups. As part of its emphasis
on superior customer service, the Company offers more than 100,000 products
in nine product groups at competitive prices. Distribution of a wide
variety of products within product groups assists the Company's customers
in managing their inventory, arranging for consolidated delivery
requirements and providing a greater portion of total job specifications.
The depth and breadth of the Company's product groups allows it to make add
on sales of higher margin, non-commodity items.

The Company is diversified across nine product groups and various
sectors of the construction industry (such as commercial, residential,
utility and industrial), which lessens its dependence upon market
conditions applicable to any one of its products groups or any single
sector of the construction industry. Further, the Company's product
diversification allows it to participate in multiple phases of construction
projects.

Superior Customer Service. Substantially all of the Company's sales
are to professional customers with whom the Company has developed long-term
relationships. These relationships are largely based on the Company's
history of providing superior service. Customer services provided by the
Company include credit, design assistance, material specifications,
scheduled job site delivery, job site visits to ensure satisfaction,
technical product services, including blueprint take-off and computerized
order quotes, and assistance with product returns.

Local Market Focus. The Company has organized its branches as
autonomous, decentralized branches capable of meeting local market needs
and offering competitive prices. Each branch handles one or more of the
Company's product groups and operates as a separate profit center with its
own sales force. Each branch manager has the authority and responsibility
to set pricing and tailor the product offering and mix, as well as the
nature of services offered, to meet the local market demand. In addition,
each branch manager is responsible for purchasing, maintenance of adequate
inventory levels, cost controls and customer relations.

The Company has been able to tailor its branch size and product
offerings to perceived market demand. As a result, the Company has
successfully operated branches in secondary cities where management
believes it has achieved significant market share and in larger
metropolitan areas where it has established a sound market presence.

Well-Trained and Experienced Workforce. The Company has implemented
extensive employee training and recruiting programs to ensure that its
employees have the skill levels necessary to compete effectively in today's
marketplace. The Company utilizes in-depth training seminars covering basic
and advanced product knowledge, and selling, purchasing, negotiating and
management skills. The Company has also developed a recruiting and training
program to increase the number of qualified applicants introduced into its
management and sales ranks. The Company has experienced a low rate of
turnover among its employees and, as a result, the Company's corporate
management group, branch managers, outside sales representatives and inside
sales account executives have considerable experience with the Company.

Centralized Administrative Functions. The Company has centralized
certain administrative functions such as credit, human resources, finance
and accounting and management information systems. The Company's credit
function is essential to its success. All credit decisions are researched,
analyzed and approved by a group of regional credit managers to ensure
conformity and quality of credit decisions across the Company's operations.
Management believes that its credit function has enabled it to be
recognized as an industry leader due to its consistently low level of bad
debt expense. Centralization of human resources, finance and accounting
functions ensure conformity in policy and lower overall cost of

24
<PAGE> 26

administration. The Company's comprehensive management information system
is based on point of sale information and provides managers with real time
inventory, receivables, purchasing, pricing, credit and margin information.
This management information system allows the Company's branches to more
effectively manage their inventory and receivables and respond more quickly
and accurately to specific customer needs and local market demand.

Volume Purchasing Power. The Company, as one of the largest
diversified wholesale distributors of construction products in its markets,
is able to achieve significant volume discounts and rebates from its
vendors. The Company established its Preferred Vendor Program in 1991 to
more effectively leverage its purchasing power. This program has reduced
the number of vendors and has resulted in stronger, more strategic
relationships with a more concentrated group of vendors. The concentration
of vendors has also improved the Company's ability to assure more timely
delivery, reduce errors, and to obtain better terms and greater financial
incentives. Other programs currently being employed with vendors include
vendor managed inventory systems, bar coding, and electronic exchange of
purchase orders and invoices, each of which has resulted in a reduction in
transaction costs and an improvement in operating efficiency.

PRODUCTS

The Company distributes products in the following nine major product
groups:

- Electrical: Electrical supplies, including wire, cable, cords, boxes,
covers, wiring devices, conduit, raceway duct, safety switches, motor
controls, breakers, panels, fuses and related supplies and accessories,
residential, commercial and industrial electrical fixtures and other
special use fixtures.

- Plumbing: Plumbing fixtures and related fittings, residential,
commercial and industrial water heaters, and plumbing accessories and
supplies.

- Water and Sewer: Water works and industrial supplies, including large
diameter plastic (PVC) and cast iron pipe, fire hydrants, water meters,
valves, backflow prevention devices and related hardware and accessories.

- Air Conditioning and Heating: Air conditioning and heating equipment,
furnaces, heaters, heat pumps, condensing units, duct, pipe, fittings,
registers, grills, freon, insulation and other refrigeration equipment,
supplies and service parts.

- Industrial Pipe, Valves and Fittings: Mechanical and weld pipe, valves
and related fittings, fire protection systems and supplies, high
performance valves, specialty pipe, stainless steel and other high alloy
pipe, valves and fittings.

- Building Materials: Reinforcing wire, reinforcing steel, plyform,
lumber, concrete chemicals, concrete forming accessories, road and bridge
products, masonry accessories and other building materials, hand tools,
power tools and equipment for all mechanical and building trades.

- Electric Utilities: Transformers, conductor cable, insulators,
prestressed concrete transmission and distribution poles, and other
electric utility supplies and related hardware, accessories and tools.

- Water Systems: Jet and submersible pumps and tanks, residential and
commercial water treatment, well liners, wire, poly pipe, accessories and
environmental products.

- Pool Equipment and Supplies: Above ground and in-ground pool packages,
pumps, filters, heaters, lights, slides, diving boards, skimmers, drains,
chemicals, solar equipment, pool liners and in-ground pool walls, deck
products and cleaning equipment.

25
<PAGE> 27

The following chart shows the Company's fiscal 1996 sales by product
category on a pro forma basis, giving effect to the PVF Acquisition and the
Fiscal 1997 Acquisitions:

[CHART]

SALES AND PURCHASING

The Company employs approximately 400 outside sales representatives who
call on customers and who also work with architects, engineers, and
manufacturers' representatives for major construction projects. For each outside
sales representative there are generally two inside account executives who
expedite orders, deliveries, quotations, and requests for pricing. Most orders
are received by telephone, and materials are delivered by the Company's trucks
to the customer's office or job site.

The Company's purchasing agents in its branches use a computerized
inventory system to monitor stock levels, while central distribution centers in
Orlando, Florida, College Park, Georgia, Hendersonville, North Carolina, Monroe,
North Carolina, Greenville, Ohio and Nashville, Tennessee provide purchasing
assistance as well as a broad stock of inventory which supplements the inventory
of the branches.

CUSTOMERS AND SUPPLIERS

The Company currently serves over 50,000 customers, and no single customer
accounts for more than 1% of total sales annually. Orders for larger
construction projects normally require long-term delivery schedules throughout
the period of construction, which in some cases may continue for several years.
The substantial majority of customer orders are shipped from inventory at the
Company's branches. The Company also accommodates special orders from its
customers and facilitates the shipment of certain large volume orders directly
from the manufacturer to the customer.

The Company regularly purchases from over 5,500 manufacturers and
suppliers, of which 550 are currently part of the Company's Preferred Vendor
Program. No single supplier accounted for more than 6% of the Company's total
purchases during fiscal 1996.

26
<PAGE> 28

COMPETITION

Management believes that the Company is one of the largest wholesale
distributors of its range of products in the southeastern and midwestern United
States. However, there is strong competition in each product group distributed
by the Company. The main sources of competition are other wholesalers,
manufacturers who sell certain lines directly to contractors and, to a limited
extent, retailers in the markets for plumbing, electrical fixtures and supplies,
building materials, pool supplies and contractor's tools. The principal
competitive factors in the Company's business are product availability, pricing,
technical product knowledge as to application and usage, and advisory and other
service capabilities.

EMPLOYEES

As of January 26, 1996, the Company had approximately 3,350 employees
consisting of approximately 15 executives, 550 managers, 950 sales personnel,
and 1,835 other employees, including truck drivers, warehouse personnel, office
and clerical workers. Over the last year, the Company's work force has increased
by approximately 20% compared to the prior year as a result of increased sales
volume and completed business acquisitions. None of the Company's employees is
represented by a union or covered by a collective bargaining agreement; 13 of
Elasco Inc.'s employees are represented by a union and are covered by a
collective bargaining agreement. The Company considers its relationship with its
employees to be excellent.

PROPERTIES

The Company leases approximately 31,000 square feet of an office building
in Orlando, Florida for its headquarters. In addition, the Company owns or
leases 214 facilities in 15 states and Puerto Rico. The typical sales branch
consists of a combined office and warehouse facility ranging in size from 3,000
to 40,000 square feet, with paved parking and storage areas. The Company also
operates a computer center, five central distribution warehouses, and a garage
and trucking terminal.

LEGAL PROCEEDINGS

The Company is involved in various legal proceedings incidental to the
ordinary conduct of its business. Management believes that none of these
proceedings will have a material adverse impact on its financial condition,
results of operations or cash flows.

THE PVF ACQUISITION

General. On March 27, 1996, the Company entered into an asset purchase
agreement to acquire substantially all of the assets, properties and business of
PVF and its subsidiaries and to assume certain of their liabilities. The
aggregate consideration to be paid in the PVF Acquisition is approximately $106
million, consisting of cash in the amount of $74.4 million, the issuance of
669,956 shares of Common Stock and the assumption of up to $13 million of bank
debt. The amount of aggregate consideration to be paid is subject to increase or
decrease (on a dollar for dollar basis) for the difference between the book
value of net assets acquired, adjusted for certain inventory and accounts
receivable items, and the book value of such net assets at December 31, 1995.
The PVF Acquisition is scheduled to close on May 13, 1996. This offering is
contingent upon the consummation of the PVF Acquisition.

PVF, a privately owned company headquartered in Houston, Texas, is a
specialty distributor of stainless steel and nickel alloy based pipe, valve and
fitting products to industrial customers, and conducts its business through its
principal subsidiaries Southwest Stainless, Inc., Multalloy, Inc., a Texas
corporation, and Multalloy, Inc., a New Jersey corporation. PVF is one of the
leading providers of pipe, valve and fitting products for use by industrial
companies that operate manufacturing processes involving highly corrosive or
high temperature fluids, such as those of the petrochemical, food and beverage,
and paper industries. Management of the Company believes that PVF carries one of
the country's broadest and deepest inventories of such products, consisting of
more than 15,000 different items sold to approximately 4,000 active accounts.
PVF sells both directly to end-users and to supply houses that sell to end-users
through 16 regional branch locations concentrated in the southeastern and
southwestern United States.

27
<PAGE> 29

For the 12 months ended December 31, 1995, PVF had net sales of $109.2
million and operating income of $27.7 million. On a pro forma basis, giving
effect to the PVF Acquisition, the Company's fiscal 1996 net sales were $1.2
billion, operating income was $57.0 million and, as of the end of fiscal 1996,
the Company had 228 branches located in 19 states and Puerto Rico. See
"Unaudited Pro Forma Consolidated Financial Data."

Products. PVF carries over 15,000 different items in its inventory of
pipe, valve and fitting products. These products are differentiated on the basis
of size, material content, performance specifications and manufacturer.
Industrial pipe, valve and fitting products generally do not grow obsolete over
time, allowing PVF to maintain an extensive inventory of such products. The
substantial majority of PVF's products are used in the replacement market,
including a significant number in emergency applications.

The majority of PVF's products are made of stainless steel. Other nickel
alloy based products, however, represent a growing share of PVF's sales. PVF
entered the specialty alloy products market in 1993 to take advantage of a
market opportunity created by the limited number of sources of these products.
These specialty alloy products typically offer performance standards superior to
stainless steel products, sell at higher prices and higher margins and are
offered by a limited number of distributors. Management of the Company believes
that PVF's sales of specialty alloy products should continue to grow if, as in
the past, an increasing number of customers move from stainless steel products
to specialty alloy products and as PVF extends its product line to include new
specialty alloy products.

Sales. PVF's sales force includes 19 outside salespeople and 31 inside
salespeople. Outside salespeople visit end-users and supply house customers at
their offices and work to develop good business relationships. The inside sales
force works on-site at PVF and handles the bulk of PVF's orders, as most of
PVF's sales come from a customer calling an inside salesperson directly with an
order.

PVF sells its products through its 50-person sales force and through 16
branches in 11 states. PVF's salespeople have substantial authority to set
prices within guidelines established by senior management. PVF is
well-represented in Texas, the largest end-user market for stainless steel pipe,
valve and fitting products. PVF has a single branch location in New Jersey,
which is the second largest end-user market in the United States and which
management of the Company believes represents an opportunity for increased
distribution of PVF's products.

Customers and Suppliers. The end-users of products sold by PVF generally
are manufacturers that operate plants involving the use of highly corrosive or
high temperature fluids. PVF sells both to supply houses that resell to
end-users and directly to end-users. Supply houses typically carry narrower
inventory than PVF in any particular PVF product group. Many of PVF's end-user
customers are Fortune 500 companies that have highly structured purchasing
organizations that typically prefer large, professional suppliers, such as PVF
or the Company. PVF has approximately 4,000 active accounts, and for its most
recent fiscal year ended June 30, 1995 the largest customer accounted for less
than 4% of PVF's sales, while its top ten customers accounted for less than 15%
of sales.

Many of the 15,000 products sold by PVF require long manufacturing lead
times. Consequently, a large investment in inventory is often required. PVF's
financial strength combined with its product experience allows it to purchase
products in large volumes at favorable terms and maintain the large investment
in inventory required to be competitive. For its most recent fiscal year ended
June 30, 1995, PVF purchased from approximately 400 vendors, and no single
vendor accounted for more than 7% of PVF's purchases in such period.

28
<PAGE> 30

The future financial performance of PVF will be directly influenced by the
cost of stainless steel and nickel alloy which, as a commodity item, can be
volatile. Significant fluctuations in the prices of stainless steel and nickel
alloy could have an effect on PVF's future profitability and could create
cyclicality in PVF's operating performance. In addition, while PVF has not
experienced difficulty in obtaining specialty alloy products, PVF currently
purchases certain specialty alloy products from one of only two available
sources worldwide.

Properties. Headquartered in Houston, Texas, PVF has 17 facilities,
including 16 distribution centers located in 11 states. PVF owns two of its
facilities and leases 15 facilities. Ten of these leases are for properties
owned by third parties and five are leased from affiliates of PVF.

29
<PAGE> 31

MANAGEMENT

The following table sets forth certain information as of April 1, 1996
concerning executive officers and directors of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION
---------------------------------- --- --------------------------------------------------
<S> <C> <C>
David H. Hughes(1)................ 52 Chairman of the Board and Chief Executive Officer
A. Stewart Hall, Jr.(1)........... 53 President, Chief Operating Officer and Director
Russell V. Hughes(1).............. 70 Vice President and Director
Vincent S. Hughes(1).............. 55 Vice President and Director
Jasper L. Holland, Jr............. 54 Regional Vice President
Clyde E. Hughes, III.............. 48 Regional Vice President
James C. Plyler, Jr............... 52 Regional Vice President
Kenneth H. Stephens............... 55 Regional Vice President
Sidney J. Strickland, Jr.......... 46 Regional Vice President
Gradie E. Winstead, Jr............ 46 Regional Vice President
Peter J. Zabaski.................. 47 Regional Vice President
J. Stephen Zepf................... 46 Treasurer and Chief Financial Officer
John D. Baker, II(2).............. 47 Director
Robert N. Blackford(1)(3)......... 59 Secretary and Director
John B. Ellis(2).................. 71 Director
Clifford M. Hames(3).............. 70 Director
Donald C. Martin(2)............... 59 Director
Herman B. McManaway(3)............ 70 Director
</TABLE>

- ---------------

(1) Member of the Executive Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee

David H. Hughes has served as the Company's Chairman of the Board and Chief
Executive Officer since November, 1986, as a director since August, 1968, and
has been employed with the Company since June, 1959. Mr. Hughes served as
President of the Company from June, 1972 until March, 1994. Mr. Hughes is also a
director of SunTrust Banks, Inc. and Lithium Technologies Corp.

A. Stewart Hall, Jr. has served as President, Chief Operating Officer and a
director since March, 1994, and has been employed with the Company since August,
1973. Mr. Hall served as Executive Vice President of the Company from January,
1988 until March, 1994.

Russell V. Hughes has served as Vice President since February, 1971, as a
director since May, 1964, and has been employed with the Company since March,
1949.

Vincent S. Hughes has served as Vice President since April, 1972, as a
director since April, 1966, and has been employed with the Company since June,
1957.

Jasper L. Holland, Jr. has served as Regional Vice President since June,
1994, and as a Vice President since February, 1980. Mr. Holland has been
employed by the Company since March, 1965.

Clyde E. Hughes, III has served as Regional Vice President since June,
1994. Previously, Mr. Hughes served as Regional Manager from December, 1990 to
June, 1994. Mr. Hughes has been employed by the Company since June, 1966.

James C. Plyler, Jr. has served as Regional Vice President since February,
1996. Prior to serving in this capacity, Mr. Plyler served as President of USCO
Incorporated, one of the Company's subsidiaries, from January, 1973 to February,
1996. Mr. Plyler has been employed by the Company since May, 1972.

Kenneth H. Stephens has served as Regional Vice President, since June,
1994, and as a Vice President since February, 1983. Mr. Stephens has been
employed by the Company since June, 1961.

30
<PAGE> 32

Sidney J. Strickland, Jr. has served as Vice President of Purchasing and
Administration since August, 1994. Previously, Mr. Strickland served as Director
of Corporate Services from February, 1994 to August, 1994. Prior to serving as
Director of Corporate Services, Mr. Strickland served as Director of Human
Resources from September, 1989 to August 1994. Mr. Strickland has been employed
by the Company since October, 1979.

Gradie E. Winstead, Jr. has served as Regional Vice President since June,
1994. Previously, Mr. Winstead served as Regional Manager from March, 1990 to
June, 1994. Mr. Winstead has been employed by the Company since September, 1975.

Peter J. Zabaski has served as Regional Vice President since June, 1994.
Previously, Mr. Zabaski served as President of One Stop Supply, Inc., a
subsidiary of the Company, from January, 1990 to June, 1994. Mr. Zabaski has
been employed by the Company since June, 1982.

J. Stephen Zepf has served as Treasurer and Chief Financial Officer since
April, 1984, and has been employed by the Company since May, 1983.

John D. Baker, II has served as a director since March, 1994. Mr. Baker
currently serves as President, Chief Executive Officer and director of Florida
Rock Industries, Inc. Mr. Baker is also a director of FRP Properties, Inc.

Robert N. Blackford was elected Secretary of the Company in February, 1974,
and has served as a director since December, 1970. Mr. Blackford is an attorney
with the firm of Maguire, Voorhis & Wells, P.A., in Orlando, Florida, where he
has practiced since 1968.

John B. Ellis has been a director since November, 1986. Mr. Ellis is
retired. Prior to retiring in January, 1986, Mr. Ellis served as Senior Vice
President Finance and Treasurer of Genuine Parts Company for a period of 11
years. Mr. Ellis is also a director of Interstate/Johnson Lane Corporation,
Flowers Industries, Inc., Oxford Industries, Inc., Scotty's, Inc., Intermet
Corporation and Integrity Music, Inc., and is a director emeritus of Genuine
Parts Company.

Clifford M. Hames has been a director since February, 1972. He has been
retired from Sun Bank, N.A., in Orlando, Florida since 1989 where he served as
Vice Chairman of the Board for a period of 14 years.

Donald C. Martin has been a director since August, 1993. Mr. Martin
provides consulting services to the Company and has done so since July, 1993.
Prior to July, 1993, Mr. Martin served as President of Electrical Distributors,
Inc. ("EDI") from April, 1963 until June, 1993. EDI was acquired by the Company
in June, 1993.

Herman B. McManaway has been a director since October, 1985. Prior to
retiring in January, 1987, Mr. McManaway served as Vice President of Ruddick
Corporation for a period of 13 years and as President of Ruddick Investment Co.
for a period of 13 years. Mr. McManaway is also a director of Versa
Technologies, Inc.

The following family relationships exist between directors of the Company:
David H. Hughes and Vincent S. Hughes are brothers; and Russell V. Hughes is a
first cousin of David H. Hughes and Vincent S. Hughes. Clyde E. Hughes, III is
not related to any of the Hughes family members named above.

31
<PAGE> 33

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth, as of March 15, 1996, certain information
regarding the ownership of the Common Stock by (i) each of the Selling
Shareholders, (ii) each person known by the Company who is, or may be deemed to
be, the beneficial owner of more than 5% of the outstanding shares of Common
Stock, and (iii) all officers and directors of the Company as a group. Except as
otherwise indicated, each of the following shareholders has sole voting and
investment power with respect to shares beneficially owned by such shareholder.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING AFTER THE OFFERING
--------------------------- -----------------------
PERCENT OF PERCENT OF
NUMBER OF OUTSTANDING SHARES NUMBER OF OUTSTANDING
NAME OF BENEFICIAL OWNER SHARES SHARES OFFERED SHARES SHARES(10)
- ------------------------------------ --------- ----------- ------- --------- -----------
<S> <C> <C> <C> <C> <C>
The Employees' Retirement Plan of
Consolidated Electrical
Distributors, Inc.(1)............. 1,012,438 14.9 214,926 447,512 4.9
Edmundson International, Inc.(2).... 754,901 11.1 350,000 404,901 4.4
John V. Moore(3).................... 251,703 3.7 20,000 231,703 2.5
Russell V. Hughes(4)................ 229,460 3.4 20,000 209,460 2.3
Donald C. Martin(5)................. 259,397 3.8 30,000 229,397 2.5
John E. Petterson(6)................ 96,148 1.4 25,000 71,148 *
John F. Caswell, Jr.(7)............. 64,099 * 20,000 44,099 *
All directors and officers as a
group (18 persons)(8)............. 1,293,171 18.2(9) 1,243,171 13.0
</TABLE>

- ---------------

* Indicates less than one percent ownership.

(1) In Amendment No. 14 to Schedule 13D dated March 3, 1995 and filed with the
Securities and Exchange Commission (the "Commission"), The Employees'
Retirement Plan of Consolidated Electrical Distributors, Inc. (the "Plan")
reported aggregate beneficial ownership of 1,012,438 shares. Of the shares
reported as beneficially owned, 214,926 were reported as held with sole
voting and investment power, and 797,512 were reported as held by
affiliated entities with shared voting and investment power. The address of
the Plan is 1516 Pontius Avenue, No. 201, Los Angeles, California 90025.

(2) Edmundson International, Inc. ("Edmundson") is an affiliate of the Plan.
Edmundson has shared voting and investment power with respect to 754,901
shares. The shares held by Edmundson are included in the shares shown in
the table as owned by the Plan. The address of Edmundson is 1516 Pontius
Avenue, Los Angeles, California 90025.

(3) The address of Mr. Moore is 3531 Castellaine Drive, Charlotte, North
Carolina 28226.

(4) Mr. Hughes has shared voting power with respect to 189,033 shares and
shared investment power with respect to 190,033 shares. The ownership
figure reported for Mr. Hughes includes options exercisable within 60 days.
The address of Mr. Hughes is 20 North Orange Avenue, Suite 200, Orlando,
Florida 32801.

(5) Mr. Martin has shared voting and investment power with respect to 56,569
shares. The ownership figure reported for Mr. Martin includes options
exercisable within 60 days. The address of Mr. Martin is 1303 Henderson
Mill Road, Mansfield, Georgia 30255.

(6) The address of Mr. Petterson is 71 Shadow Lane, Lakeland, Florida 33813.

(7) The address of Mr. Caswell is 510 Goldenrod Court, Lakeland, Florida 33813.

(8) Includes an aggregate of 305,441 shares subject to options under the Hughes
Supply, Inc. 1988 Stock Option Plan which are exercisable within 60 days,
84,000 shares subject to options under the Directors' Stock Option Plan,
and 19,377 shares credited to the accounts of directors and officers under
the Hughes Supply, Inc. Employee Stock Ownership Plan. All officers and
directors as a group hold sole voting power with respect to 937,060 shares,
shared voting power with respect to 356,111 shares, sole investment power
with respect to 917,683 shares and shared investment power with respect to
375,488 shares.

(9) Calculated on the basis of 7,122,456 shares, including 6,817,015
outstanding shares and 305,441 shares subject to options exercisable within
60 days.

(10) Calculated on the basis of 9,222,864 shares of Common Stock outstanding,
including an estimated aggregate of 1,155,749 shares of Common Stock to be
issued in the PVF Acquisition and acquisition of Elasco Inc. and, with
respect to the share ownership of officers and directors as a group,
includes options exercisable within 60 days.

32
<PAGE> 34

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, $1.00 par value per share, and 10,000,000 shares of Preferred
Stock, no par value (the "Preferred Stock").

COMMON STOCK

All holders of Common Stock have the right to cast one vote for each share
held of record on matters coming before the shareholders for a vote. Holders of
Common Stock have no cumulative voting rights with respect to the election of
directors and have no preemptive or other rights to purchase additional
securities of the Company. The holders of Common Stock are entitled to receive
dividends, if any, as and if declared from time to time by the Board of
Directors in its discretion out of assets legally available therefore and
subject to the prior dividend rights of holders of any Preferred Stock then
outstanding. In the event of the liquidation, dissolution or winding up of the
Company, holders of Common Stock will be entitled to share equally and ratably
in the assets available for distribution after the payment of the liabilities,
subject to any prior rights of holders of any Preferred Stock then outstanding.
All outstanding shares of Common Stock are, and the shares offered hereby upon
payment therefor will be, validly issued, fully paid and non-assessable.

PREFERRED STOCK

The Board of Directors has the authority to issue up to 10,000,000 shares
of Preferred Stock in one or more series, and to fix the number of shares
constituting such series and the rights and preferences thereof, including
dividend rights, voting rights, terms of redemption and liquidation preferences,
without further vote or action by the shareholders. The Board of Directors has
established a Series A Junior Participating Preferred Stock, no par value per
share (the "Series A Stock"), consisting of 300,000 shares. No shares of Series
A Stock or any other shares of Preferred Stock have been issued or are presently
outstanding. The issuance of Preferred Stock with voting and conversion rights
may adversely affect the voting power of the holders of Common Stock.

SHAREHOLDER RIGHTS PLAN

The Company has a shareholder rights plan. Under the plan, the Company
distributed to shareholders a dividend of one right per share of the Common
Stock. When exercisable, each right will permit the holder to purchase from the
Company a unit consisting of one one-hundredth of a share of Series A Stock at a
purchase price of $65 per unit (the "Rights"). The Rights generally become
exercisable if a person or group acquires 20% or more of the Common Stock or
commences a tender offer that could result in such person or group owning 30% or
more of the Common Stock. If certain subsequent events occur after the Rights
first become exercisable, the Rights may become exercisable for the purchase of
shares of Common Stock of the Company, or of an acquiring company, having a
value equal to two times the exercise price of the Right. The Rights may be
redeemed by the Company at $.01 per Right at any time prior to ten days after
20% or more of the Common Stock is acquired by a person or group. The Rights
expire on June 2, 1998 unless sooner terminated in accordance with the rights
plan.

CERTAIN PROVISIONS OF THE RESTATED ARTICLES OF INCORPORATION

Under the Restated Articles of Incorporation of the Company (the
"Articles"), directors are classified with respect to the time for which they
severally hold office by being divided into three classes, each consisting of as
near to one-third of the whole number of directors as practicable, with
directors in each class being elected every third year. The provisions of the
Florida Business Corporation Act (the "Florida Act") permit any vacancy
occurring on the Board of Directors, including any vacancy created by reason of
an increase in the number of directors, to be filled by a director elected by
the affirmative vote of a majority of the remaining directors. Any such director
elected by the remaining directors shall hold office until the next meeting of
the shareholders at which directors are elected.

The Articles also provide that no plan of consolidation or merger in which
the Company is a constituent corporation but not the surviving corporation shall
be deemed approved by the shareholders unless such plan

33
<PAGE> 35

of consolidation or merger shall have been approved by the affirmative vote of
the holders of two-thirds of the total number of shares of voting stock of the
Company entitled to vote. The Articles also require the affirmative vote of
two-thirds of the outstanding shares of the Company's voting stock to approve
certain business combinations involving Company and any 10% shareholder unless
approved by a majority of the directors not affiliated with such shareholder or
unless certain price and procedural requirements are met; to require the
affirmative vote of at least 80% of the outstanding shares to remove directors
without cause; to provide that the size of the Board of Directors may be
determined by the affirmative vote of 80% or more of the outstanding shares; to
require the affirmative vote of at least 80% of the outstanding shares to alter
the provisions of the Articles in relating to the number, classification and
terms of office of directors; to require that special meetings called by the
shareholders be called by an 80% vote of shareholders; and to prohibit the
shareholders of the Company from taking action by means of a written consent.

These provisions may have the effect of delaying or preventing transactions
involving a change of control of the Company, including transactions in which
shareholders might otherwise receive a substantial premium for their shares over
then current market prices, and may limit the ability of shareholders to approve
transactions that they may deem to be in their best interests.

CERTAIN PROVISIONS OF FLORIDA LAW

The Company is subject to several anti-takeover provisions under the
Florida Act that apply to a public corporation organized under Florida law
unless the corporation has elected to opt out of such provisions in its Articles
or (depending on the provision in question) its Bylaws. The Company has not
elected to opt out of these provisions. The Florida Act contains a provision
that prohibits the voting of shares in a publicly-held Florida corporation which
are acquired in a "control share acquisition" unless the holders of a majority
of the corporation's voting shares (exclusive of shares held by officers of the
corporation, inside directors or the acquiring party) approve the granting of
voting rights as to the shares acquired in the control share acquisition. A
control share acquisition is defined as an acquisition that immediately
thereafter entitled the acquiring party to vote in the election of directors
within each of the following ranges of voting power: (i) one-fifth or more but
less than one-third of such voting power; (ii) one-third or more but less than a
majority of such voting power and (iii) more than a majority of such voting
power.

The Florida Act also contains an "affiliated transaction" provision that
prohibits a publicly-held Florida corporation from engaging in a broad range of
business combinations or other extraordinary corporate transactions with an
"interested shareholder" unless (i) the transaction is approved by a majority of
disinterested directors before the person becomes an interested shareholder or
(ii) the interested shareholder has owned at least 80% of the corporation's
outstanding voting shares other than those owned by the interested shareholder.
An interested shareholder is defined as a person who together with affiliates
and associates beneficially owns more than 10% of the corporation's outstanding
voting shares.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Company's Common Stock is American
Stock Transfer & Trust Company.

34
<PAGE> 36

DESCRIPTION OF NOTES

Concurrently with this offering, the Company is offering privately the
Notes in an aggregate principal amount of $100 million. The Notes will be issued
pursuant to a Note Agreement between the Company and SunTrust Capital Markets,
Inc., as agent for the participating lenders (the "Note Agreement"). The
following is a summary of the assumed terms of the Notes, but there can be no
assurance that the Notes will be issued on such terms, or that the Notes
Offering will be consummated. This offering is not contingent upon consummation
of the Notes Offering.

General. The Notes will mature on or around May 30, 2011, will be limited
to $100 million aggregate principal amount, and will be pari passu to the
Company's revolving credit facility and line of credit agreement. The Notes will
bear interest at %, payable in cash semi-annually in arrears, and will be
amortized in 20 equal semi-annual payments beginning May, 2001.

Sinking Fund. The Note Agreement will not provide for a sinking fund.

Optional Redemption. The Notes may be redeemed at the Company's option, in
whole or in part, on a pro rata basis, on any interest payment date for the sum
of (i) the greater of par or the present value of all, remaining interest and
principal payments, such present value to be determined using a discount rate
equal to the sum of (a) 50 basis points and (b) the yield on a U.S. Treasury
obligation having a maturity date corresponding with the remaining average life
of the Notes being prepaid, and (ii) accrued interest at the date of redemption.

Certain Covenants. The Note Agreement will contain a number of covenants
restricting the operations of the Company and its subsidiaries, including
covenants with respect to the following matters: (i) limitation on indebtedness;
(ii) limitation on restricted payments (in the form of the declaration or
payment of certain dividends or distributions, the purchase, redemption or other
acquisition of any capital stock of the Company (or any affiliate thereof);
(iii) limitation on transactions with affiliates; (iv) limitation on liens and
subsidiary debt; (v) limitation on sales of assets; (vi) limitation on issuance
of guarantees of and pledges for indebtedness; and (vii) limitation on
consolidations, mergers and sale of all or substantially all assets of the
Company.

Events of Default. The events of default ("Events of Default") under the
Note Agreement will include provisions that are typical of senior debt
financing, including a default by the Company or any subsidiary on any
indebtedness that has an aggregate principal amount of not less than $5 million
resulting in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise become due and payable.

Upon the occurrence of an Event of Default, the holders of not less than
50% in principal amount of the outstanding Notes may immediately accelerate the
maturity of all the Notes as provided in the Note Agreement.

Interim Financing. In the event the Notes Offering cannot be consummated
concurrently with the PVF Acquisition, the Company intends to finance the PVF
Acquisition through a $55 million bridge loan with the Company's bank
syndication group and a $30 million note to be issued by the Company to the
sellers. The bridge loan will carry interest at approximately the same rate as
the Company's line of credit facility (an average rate of 6.29% in fiscal 1996)
for the first six months. The sellers' promissory note will bear interest at 6%
for the first six months, then will increase to prime for the next six months.
Thereafter, interest on such note will be at prime plus 1/2%. The sellers' note
will mature on May 31, 1998.

35
<PAGE> 37

UNDERWRITING

Upon the terms and subject to the conditions stated in the Underwriting
Agreement dated the date hereof (the "Underwriting Agreement"), each of the
underwriters named below (the "Underwriters"), for whom Smith Barney Inc. and
Robert W. Baird & Co. Incorporated are acting as representatives (the
"Representatives"), has severally agreed to purchase, and the Company and the
Selling Shareholders have agreed to sell to such Underwriter, the number of
shares of Common Stock set forth opposite the name of such Underwriter.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
- ---------------------------------------------------------------------------------- ---------
<S> <C>
Smith Barney Inc..................................................................
Robert W. Baird & Co. Incorporated................................................

---------
Total...................................................................
========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to approval of certain legal matters by counsel and
to certain other conditions. The Underwriters are obligated to take and pay for
all of the shares of Common Stock offered hereby (other than those covered by
the over-allotment option described below) if any such shares are taken.

The Underwriters initially propose to offer part of the shares of Common
Stock directly to the public at the public offering price set forth on the cover
page of this Prospectus and part of such shares to certain dealers at a price
which represents a concession not in excess of $ per share below the
public offering price. The Underwriters may allow, and such dealers may reallow,
a concession not in excess of $ per share to certain other dealers.
After the offering, the public offering price and such concessions may be
changed by the Underwriters.

The Company and one of the Selling Shareholders have granted the
Underwriters options, exercisable for 30 days from the date of this Prospectus,
to purchase up to 236,989 and 52,500 additional shares of Common Stock,
respectively, at the public offering price set forth on the cover page of this
Prospectus less the underwriting discounts and commissions. The Underwriters may
exercise such options solely for the purpose of covering over-allotments, if
any, in connection with the offering of the shares of Common Stock offered
hereby. To the extent such options are exercised, each Underwriter will become
obligated, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares set forth opposite
each Underwriter's name in the preceding table bears to the total number of
shares listed in such table.

The Company and its officers and directors have agreed that, for a period
of 180 days from the date of this Prospectus, they will not, without the prior
written consent of Smith Barney Inc., offer, sell, contract to sell, or
otherwise dispose of, any shares of Common Stock or any securities convertible
into, or exercisable or

36
<PAGE> 38

exchangeable for, Common Stock, or grant any options or warrants to purchase
Common Stock, except for the shares of Common Stock offered hereby, the grant of
options and the issuance shares of Common Stock pursuant to the Company's
existing stock option plans and the surrender of Common Stock in payment of the
exercise price of stock options. Further, the Selling Shareholders and certain
other shareholders of the Company designated by the Representatives have agreed
that, for a period of 90 days from the date of this Prospectus, they will not,
without the prior written consent of Smith Barney Inc., offer, sell, contract to
sell, or otherwise dispose of, any shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, Common Stock, or grant any
options or warrants to purchase Common Stock, except for the shares of Common
Stock offered hereby.

The Company, the Selling Shareholders, and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act.

LEGAL MATTERS

The validity, authorization and issuance of the shares of Common Stock
offered hereby will be passed upon for the Company by Maguire, Voorhis & Wells,
P.A., Orlando, Florida. Robert N. Blackford, a member of Maguire, Voorhis &
Wells, P.A. is Secretary and a director of the Company. As of April 1, 1996,
certain members of Maguire, Voorhis & Wells, P.A. beneficially owned 24,237
shares of the Company's Common Stock.

Certain legal matters will be passed upon for the Underwriters by Powell,
Goldstein, Frazer & Murphy, Atlanta, Georgia. Powell, Goldstein, Frazer & Murphy
will rely upon the opinion of Maguire, Voorhis & Wells, P.A., as to all matters
of Florida law.

EXPERTS

The Consolidated Balance Sheets as of January 26, 1996 and January 27,
1995, and the Consolidated Statements of Income, Shareholders' Equity and Cash
Flows of the Company for each of the two years in the period ended January 26,
1996, included in this Prospectus and incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended January
26, 1996, have been so included and incorporated in reliance on the report of
Price Waterhouse LLP, independent certified public accountants, given on the
authority of said firm as experts in auditing and accounting.

The Company's Consolidated Statements of Income, Shareholders' Equity and
Cash Flows for the year ended January 28, 1994, included in this Prospectus and
incorporated in this Prospectus by reference to the Company's Annual Report on
Form 10-K for the year ended January 26, 1996, have been so included and
incorporated in reliance on the reports of Price Waterhouse LLP, independent
certified public accountants, and Coopers & Lybrand, independent accountants,
given on the authority of said firms as experts in auditing and accounting.

The Consolidated Balance Sheets of PVF as of June 30, 1994 and June 30,
1995 and the Consolidated Statements of Income, Stockholders' Equity and Cash
Flows of PVF for each of the three years in the period ended June 30, 1995 have
been included herein in reliance upon the report of Deloitte & Touche LLP,
independent certified public accountants, given on the authority of that firm as
experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected without charge at, and copies thereof may be
obtained at prescribed costs from, the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following regional offices of the Commission: New York
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048; and
Chicago

37
<PAGE> 39

Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
In addition, the aforementioned materials may also be inspected at the offices
of the NYSE, 20 Broad Street, New York, New York 10005.

This Prospectus, which constitutes part of a registration statement on Form
S-3 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act, omits certain of the information contained in the
Registration Statement and the exhibits and schedules thereto. Reference is
hereby made to the Registration Statement and to the exhibits and schedules
relating thereto for further information with respect to the Company and the
Common Stock offered hereby. Statements contained herein concerning the
provisions of documents are necessarily summaries of such documents, and each
such statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission. The Rights are attached to each
share of Common Stock currently outstanding and each share of Common Stock to be
sold pursuant to this offering. Any reference herein made to the Common Stock
shall include the Rights.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company's (i) Annual Report on Form 10-K for the fiscal year ended
January 26, 1996, (ii) Proxy Statement for the 1996 Annual Meeting of
Shareholders and (iii) Current Report on Form 8-K dated March 27, 1996 have been
filed with the Commission and are incorporated in this Prospectus by reference
and made a part hereof.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the respective dates
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of this Prospectus.

The Company undertakes to provide without charge to each person, including
any beneficial owner of Common Stock, to whom a copy of this Prospectus has been
delivered, upon written or oral request, a copy of any or all information
incorporated by reference in this Prospectus (not including exhibits to such
information, unless such exhibits are specifically incorporated by reference
into such information). Such requests should be directed to Hughes Supply, Inc.,
Attention: J. Stephen Zepf, Treasurer and Chief Financial Officer, at 20 North
Orange Avenue, Suite 200, Orlando, Florida 32801, telephone number (407)
841-4755.

38
<PAGE> 40

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
HUGHES SUPPLY, INC.
Report of Price Waterhouse LLP, Independent Certified Public Accountants.............. F-2
Report of Coopers and Lybrand L.L.P., Independent Accountants......................... F-3
Consolidated Balance Sheets as of January 27, 1995 and January 26, 1996............... F-4
Consolidated Statements of Income for the fiscal years ended January 28, 1994, January
27, 1995 and January 26, 1996....................................................... F-5
Consolidated Statements of Shareholders' Equity for the fiscal years ended January 28,
1994, January 27, 1995 and January 26, 1996......................................... F-6
Consolidated Statements of Cash Flows for the fiscal years ended January 28, 1994,
January 27, 1995 and January 26, 1996............................................... F-7
Notes to Consolidated Financial Statements............................................ F-8
PVF HOLDINGS, INC.
Report of Deloitte & Touche LLP, Independent Auditors................................. F-20
Consolidated Balance Sheets as of June 30, 1994, June 30, 1995 and December 31, 1995
(unaudited)......................................................................... F-21
Consolidated Statements of Income for the fiscal years ended June 30, 1993, 1994 and
1995, and for the six months ended December 31, 1994 and 1995 (unaudited)........... F-22
Consolidated Statements of Stockholders' Equity for the fiscal years ended June 30,
1993, 1994 and 1995, and for the six months ended December 31, 1995 (unaudited)..... F-23
Consolidated Statements of Cash Flows for the fiscal years ended June 30, 1993, 1994
and 1995, and for the six months ended December 31, 1994 and 1995 (unaudited)....... F-24
Notes to Consolidated Financial Statements............................................ F-25
</TABLE>

F-1
<PAGE> 41

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of Hughes Supply, Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, shareholders' equity and of cash
flows present fairly, in all material respects, the financial position of Hughes
Supply, Inc. and its subsidiaries at January 26, 1996 and January 27, 1995, and
the results of their operations and their cash flows for the years ended January
26, 1996 and January 27, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above. The consolidated financial statements of Hughes Supply, Inc. and its
subsidiaries for the year ended January 28, 1994, prior to restatement, were
audited by other independent accountants whose report dated March 17, 1994
expressed an unqualified opinion on those financial statements.

The financial statements for 1994 have been restated to reflect the
poolings of interests described in Note 2. We have audited the restatement
adjustments described in Note 2 that were applied to restate the 1994 financial
statements. In our opinion, such adjustments are appropriate and have been
properly applied to the 1994 financial statements.

PRICE WATERHOUSE LLP

Orlando, Florida
March 14, 1996

F-2
<PAGE> 42

REPORT OF INDEPENDENT ACCOUNTANTS

Shareholders and Board of Directors
Hughes Supply, Inc.

We have audited the consolidated statements of income, shareholders'
equity, and cash flows of Hughes Supply, Inc. and subsidiaries for the fiscal
year ended January 28, 1994 (not presented herein). These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations and cash flows
of Hughes Supply, Inc. and subsidiaries for the fiscal year ended January 28,
1994 (prior to the retroactive restatement to account for the poolings of
interests), in conformity with generally accepted accounting principles.

COOPERS & LYBRAND

Orlando, Florida
March 17, 1994

F-3
<PAGE> 43

HUGHES SUPPLY, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
JANUARY 27, JANUARY 26,
1995 1996
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................................. $ 3,485 $ 3,432
Accounts receivable, less allowance for losses of $5,042 and $4,671... 131,907 143,354
Inventories........................................................... 125,159 132,524
Deferred income taxes................................................. 8,921 10,397
Other current assets.................................................. 6,551 7,778
----------- -----------
Total current assets.......................................... 276,023 297,485
Property and Equipment, Net............................................. 54,618 57,697
Deferred Income Taxes................................................... 2,095 2,430
Other Assets............................................................ 13,380 21,484
----------- -----------
$ 346,116 $ 379,096
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt..................................... $ 1,393 $ 2,551
Accounts payable...................................................... 78,275 84,875
Accrued compensation and benefits..................................... 9,823 12,622
Other current liabilities............................................. 13,738 16,925
----------- -----------
Total current liabilities..................................... 103,229 116,973
Long-Term Debt.......................................................... 105,243 106,215
Other Noncurrent Liabilities............................................ 1,540 1,765
----------- -----------
Total liabilities............................................. 210,012 224,953
----------- -----------
Commitments and Contingencies (Note 7)
Shareholders' Equity:
Preferred stock, no par value; 10,000,000 shares authorized; none
issued; preferences, limitations and relative rights to be
established by the Board of Directors.............................. -- --
Common stock, par value $1 per share; 20,000,000 shares authorized;
6,613,757 and 6,798,462 shares issued.............................. 6,614 6,798
Capital in excess of par value........................................ 37,653 40,553
Retained earnings..................................................... 93,525 106,792
----------- -----------
137,792 154,143
Less treasury stock, 108,988 shares and no shares, at cost............ (1,688) --
----------- -----------
Total shareholders' equity.................................... 136,104 154,143
----------- -----------
$ 346,116 $ 379,096
======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE> 44

HUGHES SUPPLY, INC.

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
---------------------------------------
JANUARY 28, JANUARY 27, JANUARY 26,
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Net Sales.................................................... $ 734,958 $ 875,459 $ 1,082,179
Cost of Sales................................................ 590,466 699,132 858,573
----------- ----------- -----------
Gross Profit................................................. 144,492 176,327 223,606
----------- ----------- -----------
Operating Expenses:
Selling, general and administrative........................ 121,645 144,256 181,284
Depreciation and amortization.............................. 7,800 9,056 10,585
Provision for doubtful accounts............................ 1,938 1,381 1,849
----------- ----------- -----------
Total operating expenses........................... 131,383 154,693 193,718
----------- ----------- -----------
Operating Income............................................. 13,109 21,634 29,888
----------- ----------- -----------
Non-Operating Income and (Expenses):
Interest and other income.................................. 2,981 2,848 4,605
Interest expense........................................... (5,055) (5,284) (7,484)
----------- ----------- -----------
(2,074) (2,436) (2,879)
----------- ----------- -----------
Income Before Income Taxes................................... 11,035 19,198 27,009
Income Taxes................................................. 4,511 7,713 10,959
----------- ----------- -----------
Net Income................................................... $ 6,524 $ 11,485 $ 16,050
======== ======== =========
Earnings Per Share:
Primary.................................................... $ 1.27 $ 1.83 $ 2.34
======== ======== =========
Fully diluted.............................................. $ 1.19 $ 1.81 $ 2.31
======== ======== =========
Average Shares Outstanding:
Primary.................................................... 5,143 6,259 6,856
======== ======== =========
Fully diluted.............................................. 6,313 6,443 6,935
======== ======== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE> 45

HUGHES SUPPLY, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK CAPITAL IN TREASURY STOCK
------------------ EXCESS OF RETAINED -------------------
SHARES AMOUNT PAR VALUE EARNINGS SHARES AMOUNT
--------- ------ ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 29, 1993, as
previously reported............... 5,453,249 $5,453 $ 22,410 $ 72,761 901,055 $(13,958)
Adjustment for poolings of
interests....................... 439,057 439 (276) 3,251 -- --
--------- ------ ---------- -------- -------- --------
Balance, January 29, 1993, as
restated........................... 5,892,306 5,892 22,134 76,012 901,055 (13,958)
Net income......................... -- -- -- 6,524 -- --
Cash dividends --
$.16 per share.................. -- -- -- (724) -- --
Pooled company.................. -- -- -- (13) -- --
Issuance of treasury shares for EDI
merger.......................... (374,998) (375) (5,434) -- (374,998) 5,809
Other acquisition.................. -- -- (1,557) 2,158 (101,368) 1,570
Treasury shares issued under stock
option plans.................... -- -- -- (18) (6,123) 95
Purchase and retirement of common
shares.......................... (2,581) (2) (9) (38) -- --
--------- ------ ---------- -------- -------- --------
Balance, January 28, 1994............ 5,514,727 5,515 15,134 83,901 418,566 (6,484)
Net income......................... -- -- -- 11,485 -- --
Cash dividends --
$.22 per share.................. -- -- -- (1,290) -- --
Pooled company.................. -- -- -- (27) -- --
Treasury shares contributed to
employee benefit plan........... -- -- 243 -- (16,597) 257
Conversion of subordinated
convertible debentures into
common stock.................... 1,081,146 1,081 21,670 -- -- --
Stock dividend by pooled company... 26,101 26 207 (233) -- --
Treasury shares issued under stock
option plans.................... -- -- -- (141) (44,341) 687
Purchase and retirement of common
shares.......................... (8,217) (8) (35) (170) -- --
Other acquisitions................. -- -- 434 -- (248,640) 3,852
--------- ------ ---------- -------- -------- --------
Balance, January 27, 1995............ 6,613,757 6,614 37,653 93,525 108,988 (1,688)
Net income......................... -- -- -- 16,050 -- --
Cash dividends --
$.30 per share.................. -- -- -- (1,971) -- --
Pooled company.................. -- -- -- (15) -- --
Stock dividend by pooled company... 28,710 29 260 (289) -- --
Shares issued under stock option
plans........................... 6,657 6 74 (154) (86,984) 1,347
Purchase and retirement of common
shares.......................... (19,642) (20) (146) (354) -- --
Other acquisitions................. 168,980 169 2,712 -- (22,004) 341
--------- ------ ---------- -------- -------- --------
Balance, January 26, 1996............ 6,798,462 $6,798 $ 40,553 $106,792 -- $ --
======== ====== ======= ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE> 46

HUGHES SUPPLY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
---------------------------------------
JANUARY 28, JANUARY 27, JANUARY 26,
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers.......................... $ 718,603 $ 861,732 $ 1,073,951
Cash paid to suppliers and employees.................. (712,125) (846,357) (1,034,589)
Interest received..................................... 2,001 2,323 3,454
Interest paid......................................... (5,134) (4,825) (7,273)
Income taxes paid..................................... (5,544) (9,181) (15,230)
----------- ----------- -----------
Net cash provided by (used in) operating
activities....................................... (2,199) 3,692 20,313
----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures.................................. (8,885) (11,915) (11,853)
Proceeds from sale of property and equipment.......... 709 743 1,228
Business acquisitions, net of cash.................... (3,934) (11,099) (10,009)
----------- ----------- -----------
Net cash used in investing activities............... (12,110) (22,271) (20,634)
----------- ----------- -----------
Cash flows from financing activities:
Net borrowings under short-term debt arrangements..... 16,733 23,832 6,245
Proceeds from issuance of long-term debt.............. 580 -- --
Principal payments on:
Long-term notes..................................... (2,918) (1,266) (4,150)
Capital lease obligations........................... (660) (725) (844)
Proceeds from issuance of common shares under stock
option plans........................................ 77 546 1,273
Purchase of common shares............................. (49) (213) (520)
Dividends paid........................................ (629) (1,188) (1,736)
----------- ----------- -----------
Net cash provided by financing activities........... 13,134 20,986 268
----------- ----------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents....... (1,175) 2,407 (53)
Cash and Cash Equivalents, beginning of year............... 2,253 1,078 3,485
----------- ----------- -----------
Cash and Cash Equivalents, end of year..................... $ 1,078 $ 3,485 $ 3,432
========= ========= ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-7
<PAGE> 47

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1 -- DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INDUSTRY

Hughes Supply, Inc. and its subsidiaries (the "Company") are engaged in the
wholesale distribution of a broad range of materials, equipment and supplies
primarily to the construction industry. Major product lines distributed by the
Company include electrical, plumbing and electric utility equipment, building
materials, pool equipment and supplies, water and sewer products, heating and
air conditioning equipment and supplies, water systems and industrial pipe,
valves and fittings. The Company's principal customers are electrical, plumbing
and mechanical contractors, electric utility companies, municipal and industrial
accounts.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the Company and its
wholly-owned subsidiaries. All significant intercompany transactions and
accounts have been eliminated. Prior period financial statements have been
restated to include the accounts of companies acquired and accounted for as
poolings of interests. Results of operations of companies purchased and
immaterial poolings are included from dates of acquisition. The Company's
minority investment in affiliate is accounted for by the equity method.

FISCAL YEAR

The Company's fiscal year ends on the last Friday in January. Fiscal years
1994, 1995 and 1996 each contained 52 weeks.

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

INVENTORIES

Inventories are carried at the lower of cost or market. The cost of
substantially all inventories is determined by the average cost method.

PROPERTY AND EQUIPMENT

Buildings and equipment are depreciated using both straight-line and
declining-balance methods based on the following estimated useful lives:

<TABLE>
<S> <C>
Buildings and improvements................................... 5-40 years
Transportation equipment..................................... 2-7 years
Furniture, fixtures and equipment............................ 3-10 years
Property under capital leases................................ 20-40 years
</TABLE>

Maintenance and repairs are charged to expense as incurred and major
renewals and betterments are capitalized. Gains or losses are credited or
charged to earnings upon disposition.

OTHER ASSETS

The excess of cost over the fair value of net assets of purchased companies
($8,806 and $16,637 at January 27, 1995 and January 26, 1996, respectively, net
of accumulated amortization) is being amortized by the straight-line method over
15 to 25 years.

F-8
<PAGE> 48

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

IMPAIRMENT OF LONG-LIVED ASSETS

In the event that facts and circumstances indicate that the excess of cost
over the fair value of net assets of purchased companies or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset would be compared to the asset's carrying amount to determine if a
write-down to market value or discounted cash flow is required.

REVENUE RECOGNITION

The Company recognizes revenue from product sales when goods are received
by customers.

INCOME TAXES

Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred taxes
resulting from temporary differences. Such temporary differences result from
differences in the carrying value of assets and liabilities for tax and
financial reporting purposes. The deferred tax assets and liabilities represent
the future tax consequences of those differences, which will either be taxable
or deductible when the assets and liabilities are recovered or settled. Deferred
taxes are also recognized for operating losses that are available to offset
future taxable income.

EARNINGS PER COMMON SHARE

Primary earnings per share are based on the weighted average number of
shares outstanding during each year plus the common stock equivalents issuable
upon the exercise of stock options. Fully diluted earnings per share assumes the
conversion of 7% convertible subordinated debentures (after elimination of
related interest expense, net of income tax effect) and exercise of stock
options.

DEFERRED EMPLOYEE BENEFITS

The present value of amounts estimated to be payable under unfunded
supplemental retirement agreements with certain officers is being accrued over
the remaining years of active employment of the officers and is included in
other noncurrent liabilities.

ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles necessarily requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 2 -- BUSINESS COMBINATIONS

On August 1, 1995, the Company acquired all the common stock of Moore
Electric Supply, Inc. ("Moore") in exchange for 316,000 shares of the Company's
common stock. Moore is a wholesale distributor of electrical products with five
outlets in North Carolina and South Carolina.

On December 18, 1995, the Company acquired all the common stock of Florida
Pipe & Supply Company ("FPS") in exchange for 178,000 shares of the Company's
common stock. FPS is a wholesale distributor of industrial pipe, valves and
fittings with one outlet in Florida.

F-9
<PAGE> 49

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The above transactions have been accounted for as poolings of interests
and, accordingly, the consolidated financial statements for the periods
presented have been restated to include the accounts of Moore and FPS. Moore's
and FPS's fiscal year ends have been changed to the last Friday in January to
conform to the Company's fiscal year end.

Net sales and net income of the separate companies for the periods
preceding the acquisitions were as follows:

<TABLE>
<CAPTION>
NET NET
SALES INCOME
-------- -------
<S> <C> <C>
Six months ended July 31, 1995 (unaudited):
Hughes, as previously reported.................................. $494,239 $ 6,681
Moore........................................................... 32,297 1,023
-------- -------
Combined........................................................ $526,536 $ 7,704
======== =======
Nine months ended October 31, 1995 (unaudited):
Hughes, as previously reported.................................. $805,575 $11,732
FPS............................................................. 14,762 520
-------- -------
Combined........................................................ $820,337 $12,252
======== =======
Fiscal year ended January 27, 1995:
Hughes, as previously reported.................................. $802,445 $10,328
Moore........................................................... 54,115 423
FPS............................................................. 18,899 734
-------- -------
Combined........................................................ $875,459 $11,485
======== =======
Fiscal year ended January 28, 1994:
Hughes, as previously reported.................................. $660,938 $ 6,286
Moore........................................................... 54,854 358
FPS............................................................. 19,166 (120)
-------- -------
Combined........................................................ $734,958 $ 6,524
======== =======
</TABLE>

During fiscal years 1994, 1995 and 1996, the Company acquired several
wholesale distributors of materials to the construction industry that were
accounted for as purchases. These acquisitions, individually or in the
aggregate, did not have a material effect on the consolidated financial
statements. Results of operations of these companies from their respective dates
of acquisition have been included in the consolidated financial statements.

F-10
<PAGE> 50

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 3 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Land........................................................... $ 13,415 $ 14,380
Buildings and improvements..................................... 42,850 45,996
Transportation equipment....................................... 19,930 20,265
Furniture, fixtures and equipment.............................. 21,045 24,129
Property under capital leases.................................. 10,794 10,551
-------- --------
108,034 115,321
Less accumulated depreciation and amortization................. (53,416) (57,624)
-------- --------
$ 54,618 $ 57,697
======== ========
</TABLE>

NOTE 4 -- LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Unsecured revolving bank notes under $160,000 credit agreement,
payable June 30, 1998, fluctuating interest (6.3% to 6.4% at
January 26, 1996)............................................ $ 61,025 $ 68,300
Short-term instruments classified as long-term debt............ 34,803 35,200
Other notes payable............................................ 6,950 2,252
Capital lease obligations...................................... 3,858 3,014
-------- --------
106,636 108,766
Less current portion........................................... (1,393) (2,551)
-------- --------
$105,243 $106,215
======== ========
</TABLE>

On July 31, 1995, the Company's revolving credit and line of credit
agreement with a group of banks was amended. The agreement, as amended, now
permits the Company to borrow up to $160,000 (subject to borrowing limitations
under the agreement) -- $125,000 long-term, expiring June 30, 1998, and $35,000
line of credit convertible to a term note due two years from conversion date.
The $35,000 line of credit backs commercial paper. Under the credit facility,
interest is payable at market rates plus applicable margins. Commitment fees of
.25% and .125% are paid on the unused portions of the revolving and line of
credit facilities, respectively.

Loan covenants require the Company to maintain consolidated working capital
of not less than $75,000 and a maximum ratio of funded debt to total capital, as
defined, of .55 to 1.0. The covenants also restrict the Company's activities
regarding investments, liens, borrowing and leasing, and payment of dividends
other than stock. Under the dividend covenant, approximately $13,480 is
available at January 26, 1996 for payment of dividends.

The Company has a bank line of credit for short-term borrowing aggregating
$6,000 (subject to borrowing limitations under the long-term debt covenants)
under which $200 was outstanding at January 26, 1996. There were no amounts
outstanding at January 27, 1995. The line provides for interest at market rates.
The interest rate on short-term borrowings as of January 26, 1996 was 5.9%. In
addition, the Company has a commercial paper program backed by its revolving
credit facility. The weighted average interest rate on

F-11
<PAGE> 51

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

outstanding commercial paper borrowings of $34,803 and $35,000 as of January 27,
1995 and January 26, 1996 was 6.0% and 5.9%, respectively.

The Company's credit facility enables the Company to refinance short-term
borrowings on a long-term basis to the extent that the credit facility is
unused. Accordingly, $34,803 and $35,200 of short-term borrowings at January 27,
1995 and January 26, 1996, respectively, have been classified as long-term debt.

The carrying value of notes payable is a reasonable estimate of fair value
since interest rates are based on prevailing market rates.

Maturities of long-term debt, excluding capital lease obligations, for each
of the five years subsequent to January 26, 1996 and in the aggregate are as
follows:

<TABLE>
<CAPTION>
FISCAL YEARS ENDING
------------------------------------------------------------------
<S> <C>
1997......................................................... $ 1,694
1998......................................................... 408
1999......................................................... 103,615
2000......................................................... 31
2001......................................................... 4
Later years.................................................. --
--------
$105,752
========
</TABLE>

NOTE 5 -- INCOME TAXES

The components of deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts................................ $ 1,854 $ 1,809
Inventories.................................................... 2,866 1,757
Capital leases................................................. 590 503
Property and equipment......................................... 744 1,148
Accrued vacation............................................... 667 911
Deferred compensation.......................................... 597 681
Environmental clean-up costs................................... 216 268
Operating leases............................................... -- 276
Other accrued liabilities...................................... 3,222 5,106
Other.......................................................... 310 389
------- -------
Total deferred tax assets.............................. 11,066 12,848
------- -------
Deferred tax liabilities:
Operating leases............................................... 42 --
Intangible assets.............................................. 8 21
------- -------
Total deferred tax liabilities......................... 50 21
------- -------
Net deferred tax asset........................................... $11,016 $12,827
======= =======
</TABLE>

No valuation allowance has been provided for these deferred tax assets at
January 27, 1995 and January 26, 1996 as full realization of these assets is
expected.

F-12
<PAGE> 52

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The consolidated provision for income taxes consists of the following:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
------------------------------
1994 1995 1996
------ ------- -------
<S> <C> <C> <C>
Currently payable:
Federal.............................................. $4,567 $ 9,927 $11,091
State................................................ 645 1,635 1,679
------ ------- -------
5,212 11,562 12,770
------ ------- -------
Deferred:
Federal.............................................. (906) (3,650) (1,555)
State................................................ 205 (199) (256)
------ ------- -------
(701) (3,849) (1,811)
------ ------- -------
$4,511 $ 7,713 $10,959
====== ======= =======
</TABLE>

The following is a reconciliation of tax computed at the statutory Federal
rate to the income tax expense in the consolidated statements of income:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
----------------------------------------------
1994 1995 1996
------------- ------------- --------------
AMOUNT % AMOUNT % AMOUNT %
------ ---- ------ ---- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Tax computed at statutory Federal rate...... $3,862 35.0 $6,719 35.0 $ 9,453 35.0
Effect of:
State income tax, net of Federal income
tax benefit............................ 552 5.0 933 4.9 925 3.4
Nondeductible purchase adjustments........ 24 .2 38 .2 43 .2
Nondeductible expenses.................... 117 1.1 330 1.7 396 1.5
Other, net................................ (44) (.4) (307) (1.6) 142 .5
------ ---- ------ ---- ------- ----
Income tax expense.......................... $4,511 40.9 $7,713 40.2 $10,959 40.6
====== ==== ====== ==== ======= ====
</TABLE>

NOTE 6 -- EMPLOYEE BENEFIT PLANS

PROFIT SHARING AND EMPLOYEE STOCK OWNERSHIP PLANS

The Company has a 401(k) profit sharing plan which provides benefits for
substantially all employees of the Company who meet minimum age and length of
service requirements. Under the plan, employee contributions of not less than 2%
to not more than 3% of each eligible employee's compensation are matched (in
cash or stock) 50% by the Company. Additional annual contributions may be made
at the discretion of the Board of Directors.

The Company has an employee stock ownership plan (ESOP) covering
substantially all employees of the Company who meet minimum age and length of
service requirements. The plan is designed to enable eligible employees to
acquire a proprietary interest in the Company. Company contributions (whether in
cash or stock) are determined annually by the Board of Directors in an amount
not to exceed the maximum allowable as an income tax deduction. At January 27,
1995 and January 26, 1996, the plan owned approximately 172,000 and 184,000
shares, respectively, of the Company's common stock, all of which were allocated
to participants.

Amounts charged to expense for these and other similar plans during the
fiscal years ended in 1994, 1995 and 1996 were $1,000, $1,157 and $1,710,
respectively.

F-13
<PAGE> 53

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

BONUS PLANS

The Company has bonus plans, based on profitability formulas, which provide
incentive compensation for key employees. Amounts charged to expense for bonuses
to executive officers were $533, $935 and $1,354 for the fiscal years ended in
1994, 1995 and 1996, respectively.

STOCK OPTION PLANS

The Company's stock option plans authorize the granting of both incentive
and non-incentive stock options for an aggregate of 1,635,000 shares of common
stock to key executive, management, and sales employees, and, with respect to
135,000 shares, to non-employee directors. Under the plans, options are granted
at prices not less than market value on the date of grant, and the maximum term
of an option may not exceed ten years. Prices for incentive stock options
granted to employees who own 10% or more of the Company's stock are at least
110% of market value at date of grant. Options may be granted from time to time
to May 1998, or May 2003 with regard to directors. An option becomes exercisable
at such times and in such installments as set by the Board of Directors.

The employee plan also permits the granting of stock appreciation rights
(SARs) to holders of options. Such rights permit the optionee to surrender an
exercisable option, in whole or in part, on any date that the fair market value
of the Company's common stock exceeds the option price for the stock and receive
payment in common stock, or, if the Board of Directors approves, in cash or any
combination of cash and common stock. Such payment would be equal to the excess
of the fair market value of the shares under the surrendered option over the
option price for such shares. The change in value of SARs would be reflected in
income based upon the market value of the stock. No SARs have been granted or
issued through January 26, 1996.

A summary of option transactions during each of the three fiscal years in
the period ended January 26, 1996 is shown below:

<TABLE>
<CAPTION>
NUMBER OF OPTION PRICE
SHARES RANGE
--------- -------------
<S> <C> <C>
Under option, January 29, 1993
(253,442 shares exercisable)............................ 406,442 $12.00 - $17.63
Granted................................................ 12,000 $16.25
Exercised.............................................. (6,023) $12.25 - $12.87
Cancelled.............................................. (12,835) $12.00 - $12.63
---------
Under option, January 28, 1994
(297,584 shares exercisable)............................ 399,584 $12.25 - $17.63
Granted................................................ 115,000 $18.13 - $25.37
Exercised.............................................. (44,241) $12.25 - $12.63
---------
Under option, January 27, 1995
(339,343 shares exercisable)............................ 470,343 $12.25 - $25.37
Granted................................................ 15,000 $19.25
Exercised.............................................. (93,541) $12.25 - $20.25
Cancelled.............................................. (1,861) $12.25 - $12.63
---------
Under option, January 26, 1996
(329,941 shares exercisable)............................ 389,941 $12.25 - $25.37
========
</TABLE>

There were 640,658 and 627,519 shares available for the granting of options
at January 27, 1995 and January 26, 1996, respectively.

F-14
<PAGE> 54

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

STOCK-BASED COMPENSATION

The Company accounts for compensation cost related to employee stock
options and other forms of employee stock-based compensation plans in accordance
with the requirements of Accounting Principles Board Opinion 25 ("APB 25"). APB
25 requires compensation cost for stock-based compensation plans to be
recognized based on the difference, if any, between the fair market value of the
stock on the date of grant and the option exercise price. In October 1995, the
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). SFAS
123 established a fair value-based method of accounting for compensation cost
related to stock options and other forms of stock-based compensation plans.
However, SFAS 123 allows an entity to continue to measure compensation costs
using the principles of APB 25 if certain pro forma disclosures are made. SFAS
123 is effective for fiscal years beginning after December 15, 1995. The Company
intends to adopt the provisions for pro forma disclosure requirements of SFAS
123 in fiscal 1997.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

The Company has entered into agreements with certain key executive officers
providing for supplemental payments, generally for periods up to 15 years, upon
retirement, disability or death. The obligations are not funded apart from the
Company's general assets. Amounts charged to expense under the agreements were
$166, $390 and $238 in fiscal years ended 1994, 1995 and 1996, respectively.

NOTE 7 -- COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

A portion of the Company's operations are conducted from locations leased
under capital leases from a corporation which is owned by three of the directors
of Hughes Supply, Inc. The leases generally provide that all expenses related to
the properties are to be paid by the lessee. The leases also generally provide
for rental increases at specified intervals. The leases all expire within ten
years; however, it is expected that they will be renewed. Rents under these
agreements amounted to $1,165 for fiscal years ended 1994 and 1995 and $1,149 in
fiscal year ended 1996. Property under capital leases is included in the
consolidated balance sheets as follows:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Property under capital leases (consisting of land and
buildings)................................................... $10,794 $10,551
Accumulated amortization....................................... (8,458) (8,840)
------- -------
$ 2,336 $ 1,711
======= =======
</TABLE>

In addition, rents under operating leases paid to this related corporation
were $396, $400 and $358 in 1994, 1995 and 1996, respectively.

F-15
<PAGE> 55

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Future minimum payments, by year and in the aggregate, under the
aforementioned leases and other noncancellable operating leases with initial or
remaining terms in excess of one year as of January 26, 1996, are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
FISCAL YEARS ENDING LEASES LEASES
--------------------------------------------------------------- ------- ---------
<S> <C> <C>
1997...................................................... $ 1,141 $ 9,122
1998...................................................... 1,141 8,238
1999...................................................... 558 6,540
2000...................................................... 360 4,755
2001...................................................... 325 3,201
Later years............................................... 258 5,221
------- ---------
Total minimum lease payments................................... 3,783 $37,077
=======
Less amount representing interest.............................. (769)
-------
Present value of net minimum lease payments.................... 3,014
Less current portion........................................... (857)
-------
$ 2,157
======
</TABLE>

Lease-related expenses are as follows:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
-----------------------------
1994 1995 1996
------ ------ -------
<S> <C> <C> <C>
Capital lease amortization...................................... $ 594 $ 594 $ 584
Capital lease interest expense.................................. 505 440 364
Operating lease rentals (excluding month-to-month rents)........ 6,397 7,412 12,090
</TABLE>

GUARANTEES OF AFFILIATE DEBT

A wholly-owned subsidiary of the Company owns a 20% interest in Accord
Industries Company ("Accord"), a joint venture formed from the Company's sale of
its manufacturing operations in 1990. As partial consideration for the sale, the
Company received $2,750 in notes receivable, part of which is convertible into
an additional partnership interest in Accord of up to 29%.

In connection with the investment in Accord, the Company guaranteed $500 of
Accord's indebtedness to a bank and the Company's subsidiary as a joint venturer
is contingently liable for the remaining bank debt of approximately $1,100 as of
January 26, 1996.

LEGAL MATTERS

The Company is involved in various legal proceedings incident to the
conduct of its business. In the opinion of management, none of the proceedings
are material in relation to the Company's consolidated operations or financial
position.

NOTE 8 -- CAPITAL STOCK

COMMON STOCK

On May 24, 1994, the shareholders approved an amendment to the articles of
incorporation of the Company increasing the number of authorized shares of
common stock to 20,000,000 shares, $1.00 par value per share.

F-16
<PAGE> 56

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

On March 8, 1994, the Company issued a call for redemption of its
outstanding 7% convertible subordinated debentures to take place on April 7,
1994. Of the $22,960 debentures outstanding at January 28, 1994, $22,889, or
99.7%, were converted into the Company's common stock at $21.17 per share or
47.2 common shares for each $1 face amount of debentures. This conversion
resulted in the issuance of 1,081,146 common shares.

PREFERRED STOCK

The Company's Board of Directors established Series A Junior Participating
Preferred Stock (Series A Stock) consisting of 300,000 shares. Each share of
Series A Stock will be entitled to one vote on all matters submitted to a vote
of shareholders. Series A Stock is not redeemable or convertible into any other
security. Each share of Series A Stock shall have a minimum cumulative
preferential quarterly dividend rate equal to the greater of $1.25 per share or
100 times the aggregate per share amount of the dividend declared on common
stock. In the event of liquidation, shares of Series A Stock will be entitled to
the greater of $100 per share plus any accrued and unpaid dividend or 100 times
the payment to be made per share of common stock. No shares of Series A Stock
are presently outstanding, and no shares are expected to be issued except in
connection with the shareholder rights plan referred to below.

The Company has a shareholder rights plan. Under the plan, the Company
distributed to shareholders a dividend of one right per share of the Company's
common stock. When exercisable, each right will permit the holder to purchase
from the Company a unit consisting of one one-hundredth of a share of Series A
Stock at a purchase price of $65 per unit. The rights generally become
exercisable if a person or group acquires 20% or more of the Company's common
stock or commences a tender offer that could result in such person or group
owning 30% or more of the Company's common stock. If certain subsequent events
occur after the rights first become exercisable, the rights may become
exercisable for the purchase of shares of common stock of the Company, or of an
acquiring company, having a value equal to two times the exercise price of the
right. The rights may be redeemed by the Company at $.01 per right at any time
prior to ten days after 20% or more of the Company's stock is acquired by a
person or group. The rights expire on June 2, 1998 unless sooner terminated in
accordance with the rights plan.

NOTE 9 -- CONCENTRATION OF CREDIT RISK

The Company sells its products in the major areas of construction markets
in certain states of the eastern half of the United States. Approximately 90% of
the Company's sales are credit sales which are primarily to customers whose
ability to pay is dependent upon the construction industry economics prevailing
in these areas; however, concentration of credit risk with respect to trade
accounts receivable is limited due to the large number of customers comprising
the Company's customer base and no one customer comprises more than 1% of annual
sales. The Company performs ongoing credit evaluations of its customers and in
certain situations obtains collateral sufficient to protect its credit position.
The Company maintains reserves for potential credit losses, and such losses have
been within management's expectations.

F-17
<PAGE> 57

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 10 -- SUPPLEMENTAL CASH FLOWS INFORMATION

The following is a reconciliation of net income to net cash provided by
(used in) operating activities:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
-------------------------------
1994 1995 1996
-------- -------- -------
<S> <C> <C> <C>
Net income............................................ $ 6,524 $ 11,485 $16,050
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation..................................... 7,038 8,217 8,669
Amortization..................................... 762 839 1,916
Provision for doubtful accounts.................. 1,938 1,381 1,849
Gain on sale of property and equipment........... (270) (294) (621)
Undistributed (earnings) losses of affiliate..... (171) (139) 115
Treasury shares contributed to employee benefit
plan........................................... -- 500 --
Changes in assets and liabilities, net of effects
of business acquisitions:
(Increase) decrease in --
Accounts receivable......................... (16,894) (13,819) (8,872)
Inventories................................. (4,688) (16,539) 1,129
Other current assets........................ (81) (835) (1,119)
Other assets................................ 178 (262) (1,063)
Increase (decrease) in --
Accounts payable and accrued expenses....... 4,399 13,770 6,095
Accrued interest and income taxes........... (487) 2,840 (2,249)
Other noncurrent liabilities................ 178 397 225
Increase in deferred income taxes.............. (625) (3,849) (1,811)
-------- -------- -------
Net cash provided by (used in) operating activities... $ (2,199) $ 3,692 $20,313
======== ======== =======
</TABLE>

NONCASH INVESTING AND FINANCING ACTIVITIES

The net assets acquired and consideration for acquisitions accounted for as
purchases are summarized below:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
-------------------------------
1994 1995 1996
-------- -------- -------
<S> <C> <C> <C>
Fair value of:
Assets acquired..................................... $ 8,421 $ 28,396 $22,600
Liabilities assumed................................. (4,487) (7,269) (9,369)
-------- -------- -------
Purchase price........................................ $ 3,934 $ 21,127 $13,231
======== ======== =======
</TABLE>

Consideration in fiscal 1995 included 249,000 shares of common stock (fair
value $4,286), a note for $1,525 and amounts payable of $4,217. Consideration in
fiscal 1996 included 191,000 shares of common stock (fair value $3,222).

Additional common stock was issued in fiscal year 1995 upon the conversion
of $22,889 convertible subordinated debentures.

F-18
<PAGE> 58

HUGHES SUPPLY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 11 -- SUBSEQUENT EVENT (UNAUDITED)

On March 27, 1996, the Company entered into an asset purchase agreement to
acquire substantially all of the assets, properties and business of PVF
Holdings, Inc. and its subsidiaries and to assume certain of their liabilities.
The aggregate consideration to be paid is approximately $106 million, consisting
of cash in the amount of $74.4 million, the issuance of 669,956 shares of common
stock and the assumption of bank debt not to exceed $13 million.

F-19
<PAGE> 59

INDEPENDENT AUDITORS' REPORT

To The Board of Directors of PVF Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of PVF Holdings,
Inc. and subsidiaries as of June 30, 1994 and 1995, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended June 30, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of PVF Holdings, Inc. and subsidiaries
as of June 30, 1994 and 1995, and the results of their operations and their cash
flows for each of the three years in the period ended June 30, 1995 in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Birmingham, Alabama
September 25, 1995 (October 25, 1995 and
March 27, 1996 as to Note 9)

F-20
<PAGE> 60

PVF HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30,
------------------------- DECEMBER 31,
1994 1995 1995
----------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS (NOTE 4)
CURRENT ASSETS:
Cash.................................................. $ 197,118 $ 183,182 $ 203,512
Accounts receivable, less allowance for doubtful
accounts of $75,000 (June 30, 1994), $110,000
(June 30, 1995) and $120,000 (December 31,
1995)............................................ 8,590,232 12,346,105 12,583,641
Inventories........................................... 23,006,950 37,487,362 39,829,495
Prepaid expenses...................................... 33,457 21,020 74,946
Deferred income taxes (Note 5)........................ 231,468 576,000 672,000
----------- ----------- ------------
Total current assets.......................... 32,059,225 50,613,669 53,363,594
PROPERTY, PLANT AND EQUIPMENT -- NET (Note 2)........... 1,426,187 1,278,274 1,294,929
INVESTMENT IN AND LOANS TO AFFILIATE (Note 3)........... 183,740 636,108 688,157
GOODWILL, NET........................................... 530,400 494,560 476,633
OTHER ASSETS............................................ 163,189 121,244 105,874
----------- ----------- ------------
TOTAL......................................... $34,362,741 $53,143,855 $ 55,929,187
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit -- bank (Note 4)............. $ 6,738,000 $ 3,583,000 $ 3,423,000
Accounts payable...................................... 8,191,188 10,852,719 8,233,078
Accrued management fees (Note 3)...................... 265,466 1,866,118 750,494
Other accrued expenses (Note 3)....................... 745,836 1,887,870 1,884,228
Income taxes payable.................................. 82,269 2,456,746 985,157
Current portion of long-term debt (Note 4)............ 3,193,549 1,058,540 1,083,249
Current portion of subordinated debt (Note 4)......... 175,000 -- --
----------- ----------- ------------
Total current liabilities..................... 19,391,308 21,704,993 16,359,206
LONG-TERM DEBT (Note 4)................................. 462,660 6,719,230 6,384,126
SUBORDINATED DEBT (Notes 3 and 4)....................... 700,000 700,000 700,000
COMMITMENTS (Note 6)
STOCKHOLDER'S EQUITY (Notes 4 and 8):
Series A preferred stock; nonvoting and cumulative;
par value $1 per share; 9,500 shares authorized,
issued and outstanding............................. 9,500 9,500 9,500
Series B preferred stock; nonvoting, cumulative and
convertible; par value $1 per share; 310 shares
authorized; 310 (June 30, 1994 and 1995) and -0-
(December 31, 1995) shares issued and
outstanding........................................ 310 310 --
Common Stock; par value $.01 per share; 100,000 shares
authorized; 19,000 (June 30, 1994 and 1995) and
50,000 (December 31, 1995) shares issued and
outstanding........................................ 190 190 500
Additional paid-in-capital............................ 2,021,000 2,021,000 2,021,000
Retained earnings..................................... 12,013,447 21,988,632 30,454,855
Unearned compensation relating to stock award......... (235,674) -- --
----------- ----------- ------------
Total stockholders' equity.................... 13,808,773 24,019,632 32,485,855
----------- ----------- ------------
TOTAL......................................... $34,362,741 $53,143,855 $ 55,929,187
========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-21
<PAGE> 61

PVF HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31,
--------------------------------------- -------------------------
1993 1994 1995 1994 1995
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET SALES....................... $48,297,228 $60,930,776 $92,790,481 $39,808,900 $56,514,677
----------- ----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of goods sold............ 37,105,439 46,211,087 60,423,904 28,957,788 34,982,987
Operating expenses (Notes 3,
6, 7 and 8)................ 8,514,457 9,878,622 14,339,683 6,303,462 7,127,306
Interest expense (Note 3)..... 730,858 830,638 997,709 486,019 453,161
----------- ----------- ----------- ----------- -----------
Total costs and
expenses............ 46,350,754 56,920,347 75,761,296 35,747,269 42,563,454
----------- ----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES...... 1,946,474 4,010,429 17,029,185 4,061,361 13,951,223
INCOME TAXES (Note 5)........... 706,000 1,419,000 7,054,000 1,629,000 5,485,000
----------- ----------- ----------- ----------- -----------
NET INCOME...................... $ 1,240,474 $ 2,591,429 $ 9,975,185 $ 2,432,631 $ 8,466,223
========== ========== ========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-22
<PAGE> 62

PVF HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
SERIES A SERIES B UNEARNED
PREFERRED STOCK PREFERRED STOCK COMMON STOCK ADDITIONAL COMPENSATION
--------------- --------------- --------------- PAID-IN RETAINED RELATING TO
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS STOCK AWARD TOTAL
------ ------ ------ ------ ------ ------ ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JULY 1,
1992.............. 9,500 $9,500 310 $ 310 19,000 $190 $2,021,000 $ 8,181,544 $ (471,567) $ 9,740,977
Net income........ 1,240,474 1,240,474
Amortization of
shares vested
under stock
award (Note
8)............. 117,923 117,923
------ ------ ------ ------ ------ ------ ---------- ----------- ------------ -----------
BALANCE, JUNE 30,
1993.............. 9,500 9,500 310 310 19,000 190 2,021,000 9,422,018 (353,644) 11,099,374
Net income........ 2,591,429 2,591,429
Amortization of
shares vested
under stock
award (Note
8)............. 117,970 117,970
------ ------ ------ ------ ------ ------ ---------- ----------- ------------ -----------
BALANCE, JUNE 30,
1994.............. 9,500 9,500 310 310 19,000 190 2,021,000 12,013,447 (235,674) 13,808,773
Net income........ 9,975,185 9,975,185
Amortization of
shares vested
under stock
award (Note
8)............. 235,674 235,674
------ ------ ------ ------ ------ ------ ---------- ----------- ------------ -----------
BALANCE, JUNE 30,
1995.............. 9,500 9,500 310 310 19,000 190 2,021,000 21,988,632 -- 24,019,632
Conversion of
Series B
preferred stock
into common
stock (Note
8)............. (310) (310 ) 31,000 310
Net income
(unaudited).... 8,466,223 8,466,223
------ ------ ------ ------ ------ ------ ---------- ----------- ------------ -----------
BALANCE, DECEMBER
31, 1995
(unaudited)....... 9,500 $9,500 -- $ -- 50,000 $500 $2,021,000 $30,454,855 $ -- $32,485,855
===== ====== ===== ====== ====== ====== ========= ========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-23
<PAGE> 63

PVF HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31,
---------------------------------------- -------------------------
1993 1994 1995 1994 1995
----------- ----------- ------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income......................................... $ 1,240,474 $ 2,591,429 $ 9,975,185 $ 2,432,631 $ 8,466,223
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation..................................... 332,387 385,457 414,770 207,386 207,900
Amortization..................................... 259,684 148,459 98,512 49,188 31,829
Compensation expense relating to stock award and
performance stock plan......................... 117,923 117,970 418,916 280,673 209,260
Provision for losses on accounts receivable...... 59,119 73,228 97,630 39,832 (4,212)
Equity in net income of affiliate................ (104,143) (16,920) (52,049)
(Gain) loss on disposal of fixed
assets......................................... (8,478) 1,377
Changes in assets and liabilities provided (used)
cash:
Accounts receivable.............................. (1,624,606) (2,425,405) (3,853,503) (1,136,628) (233,324)
Inventories...................................... (5,734,882) (1,385,973) (14,480,412) (4,447,040) (2,342,133)
Prepaid expenses................................. (12,232) 29,695 12,437 (14,383) (53,926)
Deferred income taxes............................ (75,000) 1,000 (344,532) (147,532) (96,000)
Accounts payable and accrued expenses............ 2,131,773 1,124,603 5,220,975 1,692,347 (3,948,167)
Income taxes payable............................. 7,084 73,282 2,374,477 211,577 (1,471,589)
Other............................................ (18,271) (11,856) (20,727) (16,603) 1,469
----------- ----------- ------------ ----------- -----------
Net cash provided by (used in) operating
activities..................................... (3,316,547) 721,889 (198,893) (865,472) 716,658
----------- ----------- ------------ ----------- -----------
INVESTING ACTIVITIES:
Capital expenditures............................... (596,967) (165,801) (271,779) (133,931) (225,933)
Investment in and loans to affiliates.............. (183,740) (348,225) (348,225)
Proceeds from the sale of fixed assets............. 13,400
----------- ----------- ------------ ----------- -----------
Net cash used in investing activities............ (596,967) (349,541) (606,604) (482,156) (225,933)
----------- ----------- ------------ ----------- -----------
FINANCING ACTIVITIES:
Net borrowings (payments) under line of credit..... 4,934,000 772,000 (3,155,000) (3,245,000) (160,000)
Proceeds from issuance of long-term debt........... 28,412 7,500,000 7,500,000 147,045
Payments on long-term debt......................... (1,270,393) (1,187,364) (3,553,439) (2,947,905) (457,440)
----------- ----------- ------------ ----------- -----------
Net cash provided by (used in) financing
activities..................................... 3,692,019 (415,364) 791,561 1,307,095 (470,395)
----------- ----------- ------------ ----------- -----------
NET INCREASE (DECREASE) IN CASH...................... (221,495) (43,016) (13,936) (40,533) 20,330
CASH, BEGINNING OF PERIOD............................ 461,629 240,134 197,118 197,118 183,182
----------- ----------- ------------ ----------- -----------
CASH, END OF PERIOD.................................. $ 240,134 $ 197,118 $ 183,182 $ 156,585 $ 203,512
========== ========== =========== ========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for:
Interest......................................... $ 782,082 $ 882,922 $ 967,059 $ 483,159 $ 406,188
========== ========== =========== ========== ==========
Income taxes..................................... $ 828,735 $ 1,346,059 $ 5,113,069 $ 1,549,411 $ 7,058,914
========== ========== =========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-24
<PAGE> 64

PVF HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation -- The consolidated financial statements
include the accounts of PVF Holdings, Inc. ("PVF"), Southwest Stainless, Inc.
("SWS"), Coastline Products, Inc. ("Coastline"), Houston Products and Machine
("HPM"), and Multalloy, Inc., ("Multalloy") (hereinafter collectively referred
to as the "Company"). The Company's investment in C. F. Fluid Controls Inc.
("C.F. Fluid") a 50% owned unconsolidated investee, is accounted for on the
equity method (see Note 3). All significant intercompany accounts and
transactions have been eliminated in consolidation.

b. Description of the Company -- PVF was incorporated in Delaware on
November 30, 1989. At that time, it issued 19,000 shares of common stock, 9,500
shares of Series A preferred stock and 310 shares of Series B convertible
preferred stock for all of the similar shares of SWS, of which Coastline was a
wholly-owned subsidiary, in a non-taxable exchange. SWS and Coastline were
surviving companies from a purchase acquisition in 1988. In 1992, the Company
acquired the assets of HPM and, in 1994, it incorporated its Multalloy division.

The Company is a wholesale distributor, selling to customers located
primarily in the Southeastern and Southwestern United States, of stainless and
special-alloy pipe, valves and accessories for use primarily in the chemical,
paper and textile industries. Effective June 30, 1992, Jemison industries, Inc.
("Industries"), a majority-owned subsidiary of Jemison Investment Co., Inc.
("Investment"), transferred its interest in PVF to Investment. The stockholders
of the Company at June 30, 1995 include, among others, Investment, which is a
49% shareholder, and certain management members and shareholders of Investment
and Industries. As of July 1, 1995, Investment increased its ownership of the
Company to 80.5% by converting all of its Series B preferred stock (see Note 8).

c. Inventories -- Inventories, which consist of purchased materials, are
valued at average cost (using the weighted average method) and are stated at the
lower of cost or market.

d. Property, Plant and Equipment -- Property, plant and equipment is stated
at cost. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets.

e. Goodwill -- Goodwill is being amortized on a straight-line basis
primarily over 40 years. Accumulated amortization of goodwill was $179,000 and
$215,000 at June 30, 1994 and 1995, respectively.

f. Income Taxes -- Effective July 1, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes.
SFAS No. 109 requires that deferred income taxes be determined under an asset
and liability method. Under this method, deferred tax assets and liabilities are
based on the expected future tax consequences of temporary differences between
the book and tax bases of assets and liabilities. Previously, deferred income
taxes were determined under Accounting Principles Board Opinion No. 11,
Accounting for Income Taxes ("APB No. 11"). Under APB No. 11, deferred income
taxes were based on the historical tax effects of timing differences between
book and taxable income. The impact of adopting SFAS No. 109 was immaterial to
the Company's consolidated financial statements. Deferred income taxes are
provided for temporary differences between financial and tax reporting,
primarily attributable to capitalization of inventory costs under uniform
capitalization regulations.

g. Interim Period Presentation -- The unaudited consolidated financial
statements for the six months ended December 31, 1994 and 1995 have been
prepared on a basis substantially consistent with that of the audited financial
statements included herein. In the opinion of management, such unaudited
financial statements include all adjustments (consisting of only normal
recurring accruals) necessary for a fair presentation of the results of
operations and cash flows. The results of operations for the six months ended
December 31, 1995 are not necessarily indicative of results that may be expected
for the year ending June 30, 1996.

F-25
<PAGE> 65

PVF HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

h. Reclassifications -- Certain reclassifications have been made to the
1994 balance sheet amounts to conform to the 1995 presentation.

i. New Accounting Standards Not Yet Adopted -- In December 1991, SFAS No.
107, Disclosures About Fair Value of Financial Instruments was issued by the
Financial Accounting Standards Board ("FASB"). In October 1994, SFAS No. 107 was
amended by SFAS No. 119, Disclosure about Derivative Financial Instruments and
Fair Value of Financial Instruments. SFAS Nos. 107 and 119 require various
disclosures relating to nonderivative financial instruments and derivative
financial instruments. These statements are effective for fiscal years ending
after December 15, 1995 for entities with less than $150 million in total
assets. The adoption of these statements will impact the Company's financial
statements only in terms of increased disclosures regarding the affected
instruments.

The FASB has also issued SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of. This statement
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets to be
held and used, and for long-lived assets and certain identifiable intangibles to
be disposed of. This statement is effective for fiscal years beginning after
December 15, 1995. Management believes there would be no impact on the Company's
consolidated financial statements if this Statement were adopted currently.

2. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
JUNE 30,
------------------------- DECEMBER 31,
1994 1995 1995
---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Land and buildings............................ $ 278,040 $ 278,040 $ 278,040
Furniture and fixtures........................ 149,918 167,610 175,360
Machinery and equipment....................... 1,720,451 1,914,347 2,008,807
Transportation equipment...................... 203,055 210,985 210,277
Leasehold improvements........................ 110,180 136,260 148,278
---------- ---------- ------------
2,461,644 2,707,242 2,820,762
Less accumulated depreciation and
amortization................................ 1,035,457 1,428,968 1,525,833
---------- ---------- ------------
Total............................... $1,426,187 $1,278,274 $1,294,929
========= ========= ==========
</TABLE>

3. RELATED PARTY TRANSACTIONS

The Company owes $700,000 to Investment, which until November 3, 1994 was
guaranteeing certain of the Company's other debt. Interest of $70,000 was
incurred on this obligation in 1993, 1994 and 1995. In exchange for these
guarantees and certain management services, the Company paid Investment an
annual consultant and guarantee fee based upon 5% of the Company's adjusted
pre-tax income. For the years ended June 30, 1993, 1994 and 1995, the Company
incurred approximately $160,000, $265,000 and $1,866,000, respectively, of these
fees, including in 1995 a special management fee of $900,000.

The Company leases certain branch facilities from related parties
consisting of its President, the Chairman of Investment and Investment. Related
party rents of approximately $266,000, $370,000 and $384,000 were incurred in
1993, 1994 and 1995, respectively.

At June 30, 1995, the Company has $348,000 in notes receivable from C. F.
Fluid plus $20,000 accrued interest on these notes. During 1995, the Company
purchased inventory from C.F. Fluid totaling $634,000, and as of June 30, 1995
had related accounts payable of $200,000.

F-26
<PAGE> 66

PVF HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT

The Company's long-term debt consists of:

<TABLE>
<CAPTION>
JUNE 30,
------------------------- DECEMBER 31,
1994 1995 1995
---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to bank, refinanced in 1995 to
include additional borrowings, bearing
interest at prime (9% at June 30, 1995) due
in quarterly principal installments of
$187,500 through October 1, 1999 and a final
payment of $3,750,000 due January 1, 2000... $2,873,864 $7,125,000 $6,750,000
Two notes payable to former owners of
Coastline, due in annual installment of
$100,650 (including 14% interest) through
November 30, 1998........................... 345,538 293,264 233,671
Note payable to Investment in monthly
installments of $2,492 (including 11.5%
interest) through December 1, 1999.......... 121,476 104,673 98,713
Dividends payable to stockholders,
due June 30, 1996........................... 210,107 210,107 210,107
Other......................................... 105,224 44,726 174,884
---------- ---------- ------------
3,656,209 7,777,770 7,467,375
Less current portion.......................... 3,193,549 1,058,540 1,083,249
---------- ---------- ------------
Total............................... $ 462,660 $6,719,230 $6,384,126
========= ========= ==========
</TABLE>

The short-term revolving line of credit (under which the Company may borrow
up to $10,000,000 as of June 30, 1995, with interest payable at the prime rate)
and long-term note payable agreements with the bank contain various restrictive
covenants which among others, require the Company to maintain a net working
capital of not less than $8,000,000, a tangible net worth of not less than
$10,000,000, and a debt-to-equity ratio of not more than 1.5:1. The Company must
also maintain a current ratio of not less than 1.5:1 and no dividends in excess
of 10% of the prior fiscal year's net income may be paid. The Company is also
limited on acquisitions of capital assets and its incurrence of additional debt.
At June 30, 1994, the Company was in violation of certain of these covenants
and, accordingly, $2,173,864 of long-term obligations were classified as current
liabilities in the accompanying 1994 consolidated balance sheet. The Company was
in compliance with these covenants as of June 30, 1995.

Substantially all of the Company's assets are pledged as collateral on this
indebtedness.

At June 30, 1995, the future maturities of long-term debt were as follows:

<TABLE>
<S> <C>
1996............................................................. $1,058,540
1997............................................................. 863,804
1998............................................................. 851,132
1999............................................................. 864,848
2000............................................................. 4,139,446
----------
Total.................................................. $7,777,770
=========
</TABLE>

F-27
<PAGE> 67

PVF HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Subordinated Debt

The Company is obligated under an unsecured $700,000 note payable to
Investment, with 10% interest payable quarterly. The entire principal amount is
due on January 1, 2009. At June 30, 1994 the Company was also obligated under 8%
notes payable to former stockholders totaling $175,000 which matured in December
1994.

All principal payments relating to these notes are subordinate to the bank
debt.

5. INCOME TAXES

Provision (benefit) for income taxes consist of:

<TABLE>
<CAPTION>
1993 1994 1995
-------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal........................................... $726,000 $1,338,000 $6,684,532
State............................................. 55,000 80,000 714,000
-------- ---------- ----------
781,000 1,418,000 7,398,532
-------- ---------- ----------
Deferred:
Federal........................................... (70,000) 1,000 (321,532)
State............................................. (5,000) -- (23,000)
-------- ---------- ----------
(75,000) 1,000 (344,532)
-------- ---------- ----------
$706,000 $1,419,000 $7,054,000
======== ========= =========
</TABLE>

Provision (benefit) for income taxes differ from the amounts computed by
applying the statutory federal income tax rate to income before income taxes as
follows:

<TABLE>
<CAPTION>
1993 1994 1995
-------- ---------- ----------
<S> <C> <C> <C>
Federal income tax at statutory rate................ $681,000 $1,404,000 $6,471,000
Effect of graduated rates........................... (19,000) (40,000) (171,000)
State income taxes, net of federal taxes............ 32,000 53,000 449,000
Nondeductible expenses.............................. 35,000 24,000 66,000
Other............................................... (23,000) (22,000) 239,000
-------- ---------- ----------
$706,000 $1,419,000 $7,054,000
======== ========= =========
</TABLE>

F-28
<PAGE> 68

PVF HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The approximate tax effects of temporary differences that give rise to the
deferred tax assets and liabilities at June 30, 1994 and 1995 are as follows:

<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Deferred tax assets:
Inventory valuation............................................ $356,000 $581,000
Performance stock plan expense................................. -- 70,000
Provision for bad debts........................................ 27,000 42,000
Other.......................................................... 16,468 29,000
-------- --------
Gross deferred tax assets...................................... 399,468 722,000
-------- --------
Deferred tax liabilities:
Depreciation................................................... 97,000 106,000
Compensation expense related to stock award.................... 65,000 --
Other.......................................................... 6,000 40,000
-------- --------
Gross deferred tax liabilities................................. 168,000 146,000
-------- --------
Net deferred tax asset......................................... $231,468 $576,000
======== ========
</TABLE>

6. LEASE ARRANGEMENTS

The Company leases its branch facilities and offices under operating lease
agreements. Several leases provide for multiple renewal options covering periods
of up to nine years.

In most cases, management expects that in the normal course of business,
leases will be renewed or replaced by other leases.

Minimum lease commitments at June 30, 1995 for all noncancelable operating
leases, excluding renewal periods, are as follows:

<TABLE>
<S> <C>
1996........................................................... $288,000
1997........................................................... 201,000
1998........................................................... 66,000
1999........................................................... 55,000
2000........................................................... 27,000
--------
Total................................................ $637,000
========
</TABLE>

Total rent expense was $557,000 (1993), $670,000 (1994) and $821,000
(1995).

7. EMPLOYEE BENEFIT PROGRAMS

401(k) Plan

The Company has elected to participate in the Jemison Multi-Company 401(k)
Plan (the "Plan"). Under the Plan, the Company has the option to contribute up
to 6% of a participant's earnings. Contributions by the Company for the years
ended June 30, 1993, 1994, and 1995 totaled $216,000, $250,000 and $288,000,
respectively.

Performance Stock Plan

Effective July 1, 1994 the Company established the PVF Holdings, Inc.
Performance Stock Plan under which certain designated employees are granted
performance shares to provide long-term incentives. The performance shares are
valued based on the greater of the Company's common stock book value per share
or

F-29
<PAGE> 69

PVF HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

six times the average of the previous five years' net income per share.
Participants vest 50% upon seven years of employment and continue to vest 10%
annually, becoming fully vested at twelve years of employment. Participants are
paid their vested balance upon termination of employment; however, if the award
exceeds $50,000 the Company may elect to pay $50,000 upon termination and the
balance in annual or quarterly installments, plus interest of 7% per annum.
Compensation expense related to this plan is recognized over the vesting period
and was $183,000 for the year ended June 30, 1995 and $209,000 (unaudited) for
the six-months ended December 31, 1995.

8. CAPITAL STOCK

The Company has three types of preferred stock authorized at June 30, 1995:

(a) Series A preferred stock has a dividend rate of $16 per share per
year as declared by the board of directors, a liquidation preference of
$200 per share ($1,900,000 total) held plus any unpaid accumulated
dividends whether or not declared, and is redeemable at the option of the
Company for the liquidation preference. Dividend arrearages were $848,667
(1995) and $696,667 (1994).

(b) Series B preferred stock has a dividend rate of $18 per share per
year as declared by the board of directors, a liquidation preference of
$300 per share ($93,000 total) held plus any unpaid accumulated dividends
(whether or not declared) but subject to the preferential rights of holders
of Series A preferred stock, and is redeemable at the option of the Company
for the liquidation preference. Dividend arrearages were $31,155 (1995) and
$25,575 (1994). Effective July 1, 1995, the Series B preferred stock was
converted into 31,000 shares of the Company's common stock.

(c) Other preferred stock, par $1.00, 10,190 shares authorized (none
of which have been issued), which the Board of Directors of the Company has
the authority to divide into series and to fix and determine the relative
rights and preferences of any series so established.

Pursuant to a stock restriction agreement, unless a shareholder obtains
written consent from Investment to sell his or her stock, Investment has first
option to purchase any or all of the preferred or common shares offered.

Stock Award

In December 1991, the Company issued 5,000 shares of common stock to a key
officer of the Company to satisfy a deferred compensation liability of
approximately $152,000 and to provide the officer additional compensation for
past and future services. Compensation expense related to this stock award was
recognized in accordance with the vesting schedule specified in the agreement,
which was 40% vested at June 30, 1992 (including the deferred compensation
amount) with an additional 15% vesting occurring annually through June 30, 1996.
In connection with the adoption of the Performance Stock Plan (see Note 7), the
key officer was deemed 100% vested as of August 15, 1994 and the remaining
unearned portion ($235,674) was charged to operations in 1995. Related
compensation expense of approximately $118,000 was charged to operations in 1993
and 1994.

9. SUBSEQUENT EVENTS

On October 25, 1995, the Company renewed its bank line of credit to provide
for maximum borrowings of $12 million.

On March 27, 1996, the Company entered into an agreement with Hughes
Supply, Inc. ("Hughes") to sell substantially all of its assets, properties and
business and to convey certain of its liabilities to Hughes. The aggregate
consideration is approximately $106 million, consisting of cash of $74.4
million, 669,956 shares of common stock of Hughes, and the assumption by Hughes
of up to $13 million of the Company's bank debt.

F-30
<PAGE> 70

------------------------------------------------------
------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY OF THE SELLING SHAREHOLDERS OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE COMMON STOCK
OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF ANY OFFER TO BUY THE COMMON STOCK OFFERED HEREBY BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds....................... 9
Capitalization........................ 9
Price Range of Common Stock and
Dividends........................... 10
Selected Unaudited Pro Forma
Consolidated Financial Data......... 11
Selected Consolidated Financial and
Operating Data...................... 16
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 17
Business.............................. 21
Management............................ 30
Principal and Selling Shareholders.... 32
Description of Capital Stock.......... 33
Description of Notes.................. 35
Underwriting.......................... 36
Legal Matters......................... 37
Experts............................... 37
Available Information................. 37
Incorporation of Certain Documents by
Reference........................... 38
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>

------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------

1,929,926 SHARES

[HUGHES SUPPLY, INC. LOGO]

COMMON STOCK
------------
PROSPECTUS

, 1996
------------
SMITH BARNEY INC.

ROBERT W. BAIRD & CO.
INCORPORATED
------------------------------------------------------
------------------------------------------------------
<PAGE> 71

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

It is estimated that the Company will incur the following expenses in
connection with the offering of the securities being registered:

<TABLE>
<S> <C>
SEC registration fee.............................................................. $ 22,295
NYSE additional listing fee....................................................... 29,500
NASD filing fee................................................................... 6,936
Accounting fees and expenses...................................................... 80,000
Legal fees and expenses........................................................... 50,000
Blue sky fees and expenses........................................................ 6,000
Printing and engraving expenses................................................... 165,000
Miscellaneous expenses............................................................ 65,269
--------
Total................................................................... $425,000
========
</TABLE>

The foregoing items, except for the SEC registration fee, the NYSE
additional listing fee, the NASD filing fee and blue sky fees and expenses, are
estimated. The Company has agreed to bear all expenses (other than underwriting
discounts and commissions) in connection with the registration and sale of the
shares of Common Stock.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 607.0850 of the Florida Business Corporation Act permits, and in
some cases requires, the Company as a Florida corporation to indemnify a
director, officer, employee, or agent of the Company, or any person serving at
the request of the Company in any such capacity with respect to another entity
against certain expenses and liabilities incurred as a party to any proceeding
brought against such person by reason of the fact that such person is or was a
director, officer, employee, or agent of the Company or is or was serving in
such capacity with respect to another entity at the request of the Company. With
respect to actions, other than in the right of the Company, such indemnification
is permitted if such person acted in good faith and in a manner such person
reasonably believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action or proceeding, if such person
had no reasonable cause to believe his or her conduct was unlawful. Termination
of any such action by judgment, order, settlement or conviction or a plea of
nolo contendere, or its equivalent shall not, of itself, create a presumption
that such person did not act in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the Company, or with
respect to any criminal action or proceeding, had reasonable cause to believe
that his or her conduct was unlawful.

With respect to any action threatened, pending or completed in the right of
the Company to procure a judgment in its favor against any such person, the
Company may indemnify any such person against expenses actually and reasonably
incurred by him or her in connection with the defense or settlement of such
action or suit, including the appeal thereof, if he or she acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the Company, except that no indemnification shall be made in
respect of any claim, issue or matter as to which any such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his or her duties to the Company unless the Court in which the action was
brought determines that despite the adjudication of liability, but in view of
all the circumstances in the case, such person is fairly and reasonably entitled
to indemnity for such expenses.

Section 607.0850 also provides that if any such person has been successful
on the merits or otherwise in defense of any action, suit or proceeding, whether
brought in the right of the Company or otherwise, such person shall be
indemnified against expenses actually and reasonably incurred by him or her in
connection therewith.

II-1
<PAGE> 72

If any director or officer does not succeed upon the merits or otherwise in
defense of an action, suit or proceeding, then unless pursuant to a
determination made by a court, indemnification by the Company shall be made only
as authorized in the specific case upon a determination that indemnification of
the director or officer is proper because he or she has met the applicable
standard of conduct. Any such determination may be made:

(a) By the Board of Directors by a majority vote of a quorum
consisting of directors who are not parties to such action, suit, or
proceeding;

(b) If such a quorum is not obtainable or, even if obtainable, by a
majority vote of a committee duly designated by the Board of Directors (in
which directors who are parties may participate) consisting solely of two
or more directors not at the time parties to the proceeding;

(c) By independent legal counsel selected by the Board of Directors
prescribed in paragraph (a) or the committee prescribed in paragraph (b);
or if a quorum of the directors cannot be obtained for paragraph (a) or the
committee cannot be designated under paragraph (b) selected by a majority
vote of the full Board of Directors (in which directors who are parties may
participate); or

(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to the proceeding or, if no such quorum
is obtainable, by a majority vote of shareholders who were not parties to
such proceedings.

Section 607.0850 also contains a provision authorizing corporations to
purchase and maintain liability insurance on behalf of its directors and
officers. For some years the Company has maintained an insurance policy which
insures directors and officers of the Company against amounts the director or
officer is obligated to pay in respect of his legal liability, whether actual or
asserted, for any negligent act, any error, any omission or any breach of duty
which, subject to the applicable limits and terms of the policy, include
damages, judgments, settlements, costs of investigation, and costs, charges and
expenses incurred in the defense of actions, suits, or proceedings or appeals
thereto, subject to the exceptions, limitations and conditions set forth in the
policy.

ITEM 16. EXHIBITS.

The following items are filed as exhibits to this registration statement:

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ------------------------------------------------------------------------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement by and among the Company, the Selling Shareholders
named therein and Smith Barney Inc. and Robert W. Baird & Co. Incorporated, as
representatives of the several underwriters, dated May , 1996.
2 -- Asset Purchase Agreement by and among the Company, Jemison Investment Co., Inc., PVF
Holdings, Inc., Southwest Stainless, Inc., Multalloy, Inc. (Texas), Multalloy, Inc.
(New Jersey) and Houston Products & Machine, Inc., dated March 27, 1996*
4.1 -- Restated Articles of Incorporation of the Company, as amended(1)
4.2 -- Composite By-Laws of the Company(2)
4.3 -- Specimen Stock Certificate representing shares of the Company's Common Stock(3)
4.4 -- Resolution approving and implementing Shareholder Rights Plan together with a copy
thereof(4)
5 -- Opinion of Maguire, Voorhis & Wells, P.A.
11 -- Summary Schedule of Earnings Per Share Calculations*
23.1 -- Consent of Maguire, Voorhis & Wells, P.A. (See Exhibit 5 hereto)
</TABLE>

II-2
<PAGE> 73

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ------------------------------------------------------------------------------------
<C> <C> <S>
23.2 -- Consent of Coopers & Lybrand L.L.P.
23.3 -- Consent of Deloitte & Touche LLP
23.4 -- Consent of Price Waterhouse LLP
24 -- Power of Attorney*
</TABLE>

- ---------------

* Previously filed.

(1) Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report
on Form 10-Q filed for the quarter ended July 31, 1994.
(2) Incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report
on Form 10-Q filed for the quarter ended July 31, 1994.
(3) Incorporated by reference to Exhibit 4.2 to the Company's Quarterly Report
on Form 10-Q filed for the quarter ended October 31, 1984.
(4) Incorporated by reference to Exhibit 4.4 to the Company's Current Report on
Form 8-K dated May 17, 1988.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted against the registrant by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 74

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Orlando, State of Florida, on this 22nd day of
April, 1996.

HUGHES SUPPLY, INC.

By: /s/ J. STEPHEN ZEPF

------------------------------------

J. Stephen Zepf

Treasurer and Chief Financial
Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment
to this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- ---------------
<C> <S> <C>
* Chairman of the Board and Chief April 22, 1996
- --------------------------------------------- Executive Officer
David H. Hughes

* Director April 22, 1996
- ---------------------------------------------
John D. Baker, II

/s/ ROBERT N. BLACKFORD Director April 22, 1996
- ---------------------------------------------
Robert N. Blackford

* Director April 22, 1996
- ---------------------------------------------
John B. Ellis

* Director April 22, 1996
- ---------------------------------------------
A. Stewart Hall, Jr.

* Director April 22, 1996
- ---------------------------------------------
Clifford M. Hames

* Director April 22, 1996
- ---------------------------------------------
Russell V. Hughes

* Director April 22, 1996
- ---------------------------------------------
Vincent S. Hughes

* Director April 22, 1996
- ---------------------------------------------
Herman B. McManaway
</TABLE>

II-4
<PAGE> 75

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- ---------------
<C> <S> <C>
* Director April 22, 1996
- ---------------------------------------------
Donald C. Martin

/s/ J. STEPHEN ZEPF Treasurer and Chief Financial April 22, 1996
- --------------------------------------------- Officer (Principal and
J. Stephen Zepf Accounting Officer)

*By: /s/ J. STEPHEN ZEPF
- ---------------------------------------------
J. Stephen Zepf
Attorney-in-Fact
</TABLE>

II-5
<PAGE> 76

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------------ ----
<C> <C> <S> <C>
1 -- Form of Underwriting Agreement by and among the Company, the Selling
Shareholders named therein and Smith Barney Inc. and Robert W. Baird & Co.
Incorporated, as representatives of the several underwriters, dated May ,
1996..........................................................................
2 -- Asset Purchase Agreement by and among the Company, Jemison Investment Co.,
Inc., PVF Holdings, Inc., Southwest Stainless, Inc., Multalloy, Inc. (Texas),
Multalloy, Inc. (New Jersey) and Houston Products & Machine, Inc., dated March
27, 1996*.....................................................................
4.1 -- Restated Articles of Incorporation of the Company, as amended(1)..............
4.2 -- Composite By-Laws of the Company(2)...........................................
4.3 -- Specimen Stock Certificate representing shares of the Company's Common
Stock(3)......................................................................
4.4 -- Resolution approving and implementing Shareholder Rights Plan together with a
copy thereof(4)...............................................................
5 -- Opinion of Maguire, Voorhis & Wells, P.A......................................
11 -- Summary Schedule of Earnings Per Share Calculations*..........................
23.1 -- Consent of Maguire, Voorhis & Wells, P.A. (See Exhibit 5 hereto)..............
23.2 -- Consent of Coopers & Lybrand L.L.P............................................
23.3 -- Consent of Deloitte & Touche LLP..............................................
23.4 -- Consent of Price Waterhouse LLP...............................................
24 -- Power of Attorney*............................................................
</TABLE>

- ---------------

* Previously filed.

<PAGE> 1

PGFM DRAFT OF April 22, 1996

1,929,926 Shares

HUGHES SUPPLY, INC.

Common Stock

UNDERWRITING AGREEMENT

May ___, 1996

SMITH BARNEY INC.
ROBERT W. BAIRD & CO. INCORPORATED

As Representatives of the Several Underwriters

c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013

Dear Sirs:

Hughes Supply, Inc., a Florida corporation (the "Company"), proposes
to issue and sell an aggregate of 1,250,000 shares of its common stock, par
value $1.00 per share, to the several Underwriters named in Schedule II hereto
(the "Underwriters"), and the persons named in Part A of Schedule I hereto (the
"Selling Shareholders") propose to sell to the several Underwriters an
aggregate of 679,926 shares of common stock of the Company. The Company and
the Selling Shareholders are hereinafter sometimes referred to as the
"Sellers." The Company's common stock, par value $1.00 per share, is
hereinafter referred to as the "Common Stock" and the 1,250,000 shares of
Common Stock to be issued and sold to the Underwriters by the Company and the
679,926 shares of Common Stock to be sold to the Underwriters by the Selling
Shareholders are hereinafter referred to as the "Firm Shares." The Company and
the Selling Shareholder listed in Part B of Schedule I hereto also propose to
sell to the Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional 289,489 shares (the "Additional Shares") of Common
Stock. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares."

The offering of the Shares pursuant to this Agreement is contingent
upon the consummation of the transactions contemplated by the PVF Acquisition
Agreement (as defined in Section 7(x) hereof).

The Company and the Selling Shareholders wish to confirm as follows
their respective agreements with you (the "Representatives") and the other
several Underwriters on whose behalf you are acting, in connection with the
several purchases of the Shares by the Underwriters.

1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of
<PAGE> 2

the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-3 under the Act (the "registration statement"), including a prospectus
subject to completion relating to the Shares. The term "Registration
Statement" as used in this Agreement means the registration statement
(including all financial schedules and exhibits), as amended at the time it
becomes effective, or, if the registration statement became effective prior to
the execution of this Agreement, as supplemented or amended prior to the
execution of this Agreement. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement will
be filed and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. The term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant to Rule 424(b).
The term "Prepricing Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus. Any reference in this Agreement to the registration
statement, the Registration Statement, any Prepricing Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
date of the registration statement, the Registration Statement, such Prepricing
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the registration statement, the Registration
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the registration
statement, the Registration Statement, any Prepricing Prospectus, the
Prospectus, or any amendment or supplement thereto.

2. Agreements to Sell and Purchase. Subject to such adjustments
as you may determine in order to avoid fractional shares, the Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company and the Selling Shareholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $______ per Share (the "purchase price per share"), the number of Firm
Shares which bears the same proportion to the aggregate number of Firm Shares
to be issued and sold by the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Shareholders.

-2-
<PAGE> 3

Subject to such adjustments as you may determine in order to avoid
fractional shares, each Selling Shareholder agrees, subject to all the terms
and conditions set forth herein, to sell to each Underwriter and, upon the
basis of the representations, warranties and agreements of the Company and the
Selling Shareholders herein contained and subject to all the terms and
conditions set forth herein, each Underwriter, severally and not jointly,
agrees to purchase from each Selling Shareholder at the purchase price per
share that number of Firm Shares which bears the same proportion to the number
of Firm Shares set forth opposite the name of such Selling Shareholder in
Schedule I hereto as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule II hereto (or such number of Firm Shares increased
as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares
to be sold by the Company and the Selling Shareholders.

The Company and the Selling Shareholder listed in Part B of Schedule I
hereto also agree, subject to all the terms and conditions set forth herein, to
sell to the Underwriters, and, upon the basis of the representations,
warranties and agreements of the Company and the Selling Shareholder herein
contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right to purchase from the Company and the Selling
Shareholder listed in Part B of Schedule I hereto, at the purchase price per
share, pursuant to an option (the "over-allotment option") which may be
exercised at any time and from time to time prior to 9:00 P.M., New York City
time, on the 30th day after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading), up to an aggregate of
236,989 Additional Shares from the Company and up to an aggregate of 52,500
shares from the Selling Shareholder listed in Part B of Schedule I hereto (the
maximum number of Additional Shares which each of them agrees to sell upon the
exercise by the Underwriters of the over-allotment option is set forth opposite
their respective names in Part B of Schedule I). Additional Shares may be
purchased only for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. The number of Additional Shares which
the Underwriters elect to purchase upon any exercise of the over-allotment
option shall be provided by the Company and by each Selling Shareholder who has
agreed to sell Additional Shares in proportion to the respective maximum
numbers of Additional Shares which the Company and each such Selling
Shareholder has agreed to sell. Upon any exercise of the over-allotment
option, each Underwriter, severally and not jointly, agrees to purchase from
the Company and each Selling Shareholder who has agreed to sell Additional
Shares the number of Additional Shares (subject to such adjustments as you may
determine in order to avoid fractional shares) which bears the same proportion
to the number of Additional Shares to be sold by the Company and each Selling
Shareholder who has agreed to sell Additional Shares as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule II hereto
(or such number of Firm Shares increased as set forth in Section 12 hereof)
bears to the aggregate number of Firm Shares to be sold by the Company and the
Selling Shareholders.

Certificates in transferable form for the Shares (including any
Additional Shares) which each of the Selling Shareholders agrees to sell
pursuant to this Agreement have been placed in custody with Maguire, Voorhis &
Wells, P.A. (the "Custodian") for delivery under this Agreement pursuant to a
Custody Agreement and Power of Attorney (the "Custody Agreement") executed by
each of the Selling Shareholders appointing J. Stephen Zeph and Robert N.
Blackford as agents and attorneys-in-fact (the "Attorneys-in-Fact"). Each
Selling Shareholder agrees that (i) the Shares

-3-
<PAGE> 4

represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the Underwriters, the Company and
each other Selling Shareholder, (ii) the arrangements made by the Selling
Shareholders for such custody are, except as specifically provided in the
Custody Agreement, irrevocable, and (iii) the obligations of the Selling
Shareholders hereunder and under the Custody Agreement shall not be terminated
by any act of such Selling Shareholder or by operation of law, whether by the
death or incapacity of any Selling Shareholder or the occurrence of any other
event. If any Selling Shareholder shall die or be incapacitated or if any
other event shall occur before the delivery of the Shares hereunder,
certificates for the Shares of such Selling Shareholder shall be delivered to
the Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity or other event had not occurred, regardless of whether or not the
Attorneys-in-Fact or any Underwriter shall have received notice of such death,
incapacity or other event. Each Attorney-in-Fact is authorized, on behalf of
each of the Selling Shareholders, to execute this Agreement and any other
documents necessary or desirable in connection with the sale of the Shares to
be sold hereunder by such Selling Shareholder, to make delivery of the
certificates for such Shares, to receive the proceeds of the sale of such
Shares, to give receipts for such proceeds, to pay therefrom any expenses to be
borne by such Selling Shareholder in connection with the sale and public
offering of such Shares, to distribute the balance thereof to such Selling
Shareholder, and to take such other action as may be necessary or desirable in
connection with the transactions contemplated by this Agreement. Each
Attorney-in-Fact agrees to perform his duties under the Custody Agreement.

3. Terms of Public Offering. The Sellers have been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.

4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 10:00 A.M., New
York City time, on May ___, 1996 (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement among you,
the Company and the Attorneys-in-Fact.

Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Smith Barney Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after
the giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company and the
Attorneys-in-Fact of the Underwriters' determination to purchase a number,
specified in such notice, of Additional Shares. The place of closing for any
Additional Shares and the Option Closing Date for such Shares may be varied by
agreement among you, the Company and the Attorneys-in-Fact.

Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing

-4-
<PAGE> 5

Date, as the case may be. Such certificates shall be made available to you in
New York City for inspection and packaging not later than 9:30 A.M., New York
City time, on the business day next preceding the Closing Date or the Option
Closing Date, as the case may be. The certificates evidencing the Firm Shares
and any Additional Shares to be purchased hereunder shall be delivered to you
on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor in immediately available funds to the
order of the Company and the Attorneys-in-Fact.

5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:

(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares
may commence, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice in
writing, when the Registration Statement or such post-effective amendment has
become effective.

(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any request by
the Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or the Prospectus or for additional information; (ii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and (iii) within the period of
time referred to in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material fact
required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.

(c) The Company will furnish to you, without charge (i)
four signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and
all exhibits to the registration statement, (ii) such number of conformed
copies of the registration statement as originally filed and of each amendment
thereto, but without exhibits, as you may request, (iii) such number of copies
of the Incorporated Documents, without exhibits, as you may request, and (iv)
four copies of the exhibits to the Incorporated Documents.

-5-
<PAGE> 6

(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus
or, prior to the end of the period of time referred to in the first sentence in
subsection (f) below, file any document which, upon filing becomes an
Incorporated Document, of which you shall not previously have been advised or
to which, after you shall have received a copy of the document proposed to be
filed, you shall reasonably object.

(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in such quantities
as you have requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by dealers, prior to the date of
the Prospectus, of each Prepricing Prospectus so furnished by the Company.

(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer, the
Company will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as you may request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set
forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus (or to file under the Exchange Act any
document which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto (or to such document), and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you, as Representatives of
the several Underwriters, agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.

(g) The Company will cooperate with you and with counsel
for the Underwriters in connection with the registration or qualification of
the Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified

-6-
<PAGE> 7

or to take any action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.

(h) The Company will make generally available to its
security holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as soon
as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.

(i) During the period of five years hereafter, the
Company will furnish to you (i) as soon as available, a copy of each report of
the Company mailed to shareholders or filed with the Commission, and (ii) from
time to time such other information concerning the Company as you may request.

(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 12 hereof or by notice given by you
terminating this Agreement pursuant to Section 12 or Section 13 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure
or refusal on the part of the Company or the Selling Shareholders to comply
with the terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Representatives for all out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by you
in connection herewith.

(k) The Company will apply the net proceeds from the sale
of the Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.

(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will
advise you of the time and manner of such filing.

(m) Except as provided in this Agreement, the Company
will not offer, sell, contract to sell or otherwise dispose of any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, or grant any options or warrants to purchase Common Stock,
except for the sale of shares to the Underwriters pursuant to this Agreement
and except for the grant of options and the issuance of shares of Common Stock
pursuant to the Company's existing stock option plans and the surrender of
shares of Common Stock in payment of the exercise price of stock options, for a
period of 180 days after the date of the Prospectus, without the prior written
consent of Smith Barney Inc.

(n) The Company has furnished or will furnish to you
"lock-up" letters, in form and substance satisfactory to you, signed by each of
its current officers and directors and each of its shareholders designated by
you.

(o) Except as stated in this Agreement and in the
Prepricing Prospectus and Prospectus, the Company has not taken, nor will it
take, directly or indirectly, any action designed

-7-
<PAGE> 8

to or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares.

(p) The Company will use its best efforts to have the
shares of Common Stock which it agrees to sell under this Agreement listed,
subject to notice of issuance, on the New York Stock Exchange on or before the
Closing Date.

6. Agreements of the Selling Shareholders. Each of the Selling
Shareholders agrees with the several Underwriters as follows:

(a) Such Selling Shareholder will cooperate to the extent
necessary to cause the registration statement or any post-effective amendment
thereto to become effective at the earliest possible time.

(b) Such Selling Shareholder will pay all Federal and
other taxes, if any on the transfer or sale of the Shares being sold by the
Selling Shareholder to the Underwriters.

(c) Such Selling Shareholder will do or perform all
things required to be done or performed by the Selling Shareholder prior to the
Closing Date or any Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement.

(d) Such Selling Shareholder has executed or will execute
a "lock-up" letter as provided in Section 5(n) above and will not offer, sell,
contract to sell or otherwise dispose of any shares of Common Stock, except for
the sale of Shares to the Underwriters pursuant to this Agreement, prior to the
expiration of 90 days after the date of the Prospectus, without the prior
written consent of Smith Barney Inc.

(e) Except as stated in this Agreement and in the
Prepricing Prospectus and the Prospectus, such Selling Shareholder will not
take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.

(f) Such Selling Shareholder will advise you promptly,
and if requested by you, will confirm such advice in writing, within the period
of time referred to in Section 5(f) hereof, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations or of any change in information relating to such Selling
Shareholder or the Company or any new information relating to the Company or
relating to any matter stated in the Prospectus or any amendment or supplement
thereto which comes to the attention of such Selling Shareholder that suggests
that any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented, if amended or supplemented) is or may be untrue
in any material respect or that the Registration Statement or Prospectus (as
then amended or supplemented, if amended or supplemented) omits or may omit to
state a material fact or a fact necessary to be stated therein in order to make
the statements therein not misleading in any material respect, or of the

-8-
<PAGE> 9

necessity to amend or supplement the Prospectus (as then amended or
supplemented, if amended or supplemented) in order to comply with the Act or
any other law.

7. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:

(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.

(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
registration statement in the form in which it became or becomes effective and
also in such form as it may be when any post-effective amendment thereto shall
become effective and the prospectus and any supplement or amendment thereto
when filed with the Commission under Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions of the Act and will
not at any such times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and warranty
does not apply to statements in or omissions from the registration statement or
the prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or on behalf
of any Underwriter through you expressly for use therein.

(c) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations thereunder,
and any further Incorporated Documents so filed will, when they are filed,
conform in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder; no such document, when it was filed (or,
if an amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and no such further
document, when it is filed, will contain an untrue statement of a material fact
or will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading.

(d) All the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the Shares to
be issued and sold by the Company have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights; and the capital stock of the Company
conforms to the description thereof in the registration statement and the
prospectus.

(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Florida with
full corporate power and authority to own, lease

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<PAGE> 10

and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the Company
and the Subsidiaries (as hereinafter defined) taken as a whole.

(f) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report on Form
10-K which is incorporated by reference into the Registration Statement. Each
Subsidiary is a corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or results
of operations of such Subsidiary; all the outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned by the Company directly, or
indirectly through one of the other Subsidiaries, free and clear of any lien,
adverse claim, security interest, equity or other encumbrance.

(g) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against the Company or
any of the Subsidiaries, or to which the Company or any of the Subsidiaries, or
to which any of their respective properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not described
as required, and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement or any Incorporated Document that are not described or filed as
required by the Act or the Exchange Act.

(h) Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or by-laws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries, or in default
in any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound.

(i) Neither the issuance and sale of the Shares to be
sold by the Company, the execution, delivery or performance of this Agreement
by the Company nor the consummation by the Company of the transactions
contemplated hereby (i) requires any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or

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<PAGE> 11

other governmental body, agency or official (except such as may be required for
the registration of the Shares under the Act and the Exchange Act and
compliance with the securities or Blue Sky laws of various jurisdictions, all
of which have been or will be effected in accordance with this Agreement) or
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the certificate or articles of incorporation or bylaws, or
other organizational documents, of the Company or any of the Subsidiaries or
(ii) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, any agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, or violates or will violate
any statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.

(j) The accountants, Price Waterhouse LLP, Coopers and
Lybrand L.L.P. and Deloitte & Touche LLP, who have certified or shall certify
the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants as required by the Act.

(k) The consolidated historical and pro forma financial
statements, together with related schedules and notes, set forth in the
Prospectus and the Registration Statement comply as to form in all material
respects with the requirements of the Act. Such historical financial
statements fairly present the consolidated financial position of the Company
and the Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles ("GAAP") consistently
applied throughout such periods. Such pro forma financial statements have been
prepared on a basis consistent with such historical statements, except for the
pro forma adjustments specified therein, and give effect to assumptions made on
a reasonable basis and present fairly the historical and proposed transactions
contemplated by the Prospectus and this Agreement. The other financial and
statistical information and data included in the Prospectus and in the
Registration Statement, both historical and pro forma, are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.

(l) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws.

(m) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or

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<PAGE> 12

contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and the Subsidiaries taken as a
whole, and there has not been any change in the capital stock, or material
increase in the short-term debt or long-term debt, of the Company or any of the
Subsidiaries, or any material adverse change, or any development involving or
which may reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, net worth or results
of operations of the Company and the Subsidiaries taken as a whole.

(n) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances, except such as are described in the
Registration Statement and the Prospectus or in a document filed as an exhibit
to the Registration Statement, and all the property described in the Prospectus
as being held under lease by each of the Company and the Subsidiaries is held
by it under valid, subsisting and enforceable leases.

(o) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the distribution
of the Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act.

(p) The Company and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and
to conduct its business in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus; the Company and each
of the Subsidiaries has fulfilled and performed all its material obligations
with respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such permit, subject in each case to such qualification as may be set forth in
the Prospectus; and, except as described in the Prospectus, none of such
permits contains any restriction that is materially burdensome to the Company
or any of the Subsidiaries.

(q) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(r) To the Company's knowledge, neither the Company nor
any of its Subsidiaries nor any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.

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<PAGE> 13

(s) The Company and each of the Subsidiaries have filed
all tax returns required to be filed, which returns are complete and correct,
and neither the Company nor any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto.

(t) No holder of any security of the Company has any
right to require registration of shares of Common Stock or any other security
of the Company because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.

(u) The Company and the Subsidiaries own or possess all
patents, trademarks, trademark registration, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Prospectus as being owned by them or any of them or
necessary for the conduct of their respective businesses, and the Company is
not aware of any claim to the contrary or any challenge by any other person to
the rights of the Company and the Subsidiaries with respect to the foregoing.

(v) The Company has complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.

(w) Each of the Company and the Subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in ERISA and such regulations and
published interpretations) in which employees of the Company and the
Subsidiaries are eligible to participate and each such plan is in compliance in
all material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations, and has not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.

(x) The copy of the Asset Purchase Agreement dated March
27, 1996 by and among the Company, Jemison Investment Co., Inc., PVF Holdings,
Inc., Southwest Stainless, Inc., Multalloy, Inc., a New Jersey corporation,
Multalloy, Inc., a Texas corporation, and Houston Products & Machine, Inc.,
including the related agreements, certificates and opinions which appear as
exhibits thereto (collectively, the "PVF Acquisition Agreement"), delivered by
the Company to the Underwriters is a true and correct copy of the PVF
Acquisition Agreement and there have been no amendments, alterations,
modifications or waivers thereto or in the exhibits or schedules thereto. The
execution and delivery of, and the performance by the Company of its
obligations under, the PVF Acquisition Agreement have been duly and validly
authorized, and the PVF Acquisition Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as rights to indemnity and contribution thereunder may be
limited by Federal or state securities laws. There exists no condition that
would permit any of the parties to the PVF Acquisition Agreement the right to
terminate the transactions contemplated by the PVF Acquisition Agreement
pursuant to Article XIV thereof, or otherwise, and the Company has no reason to
believe

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<PAGE> 14

that the transactions contemplated by the PVF Acquisition Agreement will not be
consummated on or prior to the Closing Date.

8. Representations and Warranties of the Selling Shareholders.
Each Selling Shareholder represents and warrants to each Underwriter that:

(a) Such Selling Shareholder now has, and on the Closing
Date and, with respect to the Selling Shareholder listed in Part B of Schedule
I hereto, any Option Closing Date, will have, valid and marketable title to the
Shares to be sold by such Selling Shareholder, free and clear of any lien,
claim, security interest or other encumbrance, including, without limitation,
any restriction on transfer.

(b) Such Selling Shareholder now has, and on the Closing
Date and, with respect to the Selling Shareholder listed in Part B of Schedule
I hereto, any Option Closing Date, will have, full legal right, power and
authorization, and any approval required by law, to sell, assign transfer and
deliver such Shares in the manner provided in this Agreement, and upon delivery
of and payment for such Shares hereunder, the several Underwriters will acquire
valid and marketable title to such Shares free and clear of any lien, claim,
security interest, or other encumbrance.

(c) This Agreement and the Custody Agreement have been
duly authorized, executed and delivered by or on behalf of such Selling
Shareholder and are the valid and binding agreements of such Selling
Shareholder enforceable against such Selling Shareholder in accordance with
their terms.

(d) Neither the execution and delivery of this Agreement
or the Custody Agreement by or on behalf of such Selling Shareholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Shareholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act and the Exchange Act or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Shares) or conflicts or will conflict with or constitutes
or will constitute a breach of, or default under, or violates or will violate,
any agreement, indenture or other instrument to which such Selling Shareholder
is a party or by which such Selling Shareholder is or may be bound or to which
any of such Selling Shareholder's property or assets is subject, or any
statute, law, rule, regulation, ruling, judgment, injunction, order or decree
applicable to such Selling Shareholder or to any property or assets of such
Selling Shareholder.

(e) The Registration Statement and the Prospectus,
insofar as they relate to such Selling Shareholder, do not and will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.

(f) Such Selling Shareholder does not have any knowledge
or any reason to believe that the Registration Statement or the Prospectus (or
any amendment or supplement thereto)

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<PAGE> 15

contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.

(g) The representations and warranties of such Selling
Shareholder in the Custody Agreement are, and on the Closing Date and any
Option Closing Date will be, true and correct.

(h) Such Selling Shareholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares, except for the lock-up
arrangements described in the Prospectus.

9. Indemnification and Contribution. (a) The Company and each
of Russell V. Hughes and Donald C. Martin (Messrs. Hughes and Martin for
purposes of this Section 9 are collectively referred to as "Indemnifying
Selling Shareholders"), jointly and severally, agree to indemnify and hold
harmless each of you and each other Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in addition to
any liability which the Company or any Selling Shareholder may otherwise have.

(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Company or any Selling Shareholder,
such Underwriter or such controlling person shall promptly notify the parties
against whom indemnification is being sought (the "indemnifying parties"), and
such indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such

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<PAGE> 16

Underwriter or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel, or (iii) the named
parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
indemnifying parties and such Underwriter or such controlling person shall have
been advised by its counsel that representation of such indemnified party and
any indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar
or related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons
not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Smith Barney Inc., and
that all such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.

(c) Each of The Employees' Retirement Plan of
Consolidated Electrical Distributors, Inc., Edmundson International, Inc., John
V. Moore, John E. Petterson and John F. Caswell, Jr. (collectively referred to
as "Passive Selling Shareholders") agrees, severally and not jointly, to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, the Company, its directors,
its officers who sign the Registration Statement, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act to the same extent as the foregoing indemnity from the Company and
the Indemnifying Selling Shareholders to each Underwriter, but only with
respect to the information furnished in writing by or on behalf of such Passive
Selling Shareholder expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against any
Underwriter, any such controlling person of any Underwriter, the Company, any
of its directors, any such officer, or any such controlling person of the
Company, based on the Registration Statement, the Prospectus or any Prepricing
Prospectus or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Passive Selling Shareholder pursuant to
this paragraph (c), such Passive Selling Shareholder shall have the rights and
duties given to the Company by paragraph (b) above (except that if the Company
shall have assumed the defense thereof, such Passive Selling Shareholder shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at such Passive Selling Shareholder's expense), and each Underwriter,
each such controlling person of any Underwriter, the

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<PAGE> 17

Company, its directors, any such officer, and any such controlling person of
the Company shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which any Passive Selling Shareholder may otherwise have.

(d) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, each Selling Shareholder, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent as the foregoing indemnity from
the Company and the Selling Shareholders to each Underwriter, but only with
respect to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, any Selling Shareholder,
or any such controlling person based on the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (d), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such officer,
the Selling Shareholders, and any such controlling person shall have the rights
and duties given to the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any Underwriter
may otherwise have.

(e) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Shareholders on the one hand and the Underwriters
on the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Shareholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Selling
Shareholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Shareholders or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling

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<PAGE> 18

Shareholders, and the underwriting discounts and commissions received by the
Underwriters, from the sale of such Additional Shares, in each case computed on
the basis of the respective amounts set forth in the notes to the table on the
cover page of the Prospectus. The relative fault of the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Shareholders on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

(f) The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by a pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (e) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (e) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim
or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule II
hereto (or such numbers of Firm Shares increased as set forth in Section 12
hereof) and not joint.

(g) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.

(h) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 9 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Shareholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Shareholders or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this

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<PAGE> 19

Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.

10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:

(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares
may commence, the registration statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 424 and 430A under the Act
shall have been timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the registration statement or the
prospectus or otherwise) shall have been complied with to your satisfaction.

(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially adversely affect
the market for the Shares, or (ii) any event or development relating to or
involving the Company or any officer or director of the Company or any Selling
Shareholder which makes any statement made in the Prospectus untrue or which,
in the opinion of the Company and its counsel or the Underwriters and their
counsel, requires the making of any addition to or change in the Prospectus in
order to state a material fact required by the Act or any other law to be
stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such event
or development would, in your opinion, as Representatives of the several
Underwriters, materially adversely affect the market for the Shares.

(c) You shall have received on the Closing Date, an
opinion of Maguire, Voorhis & Wells, P.A., counsel for the Company and John V.
Moore, Russell V. Hughes, Donald C. Martin, John E. Petterson and John F.
Caswell, Jr., certain of the Selling Shareholders, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, to the effect
that:

(i) The Company is a corporation duly
incorporated and validly existing in good standing under the laws of the State
of Florida with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition

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<PAGE> 20

(financial or other), business, properties, net worth or results of operations
of the Company and the Subsidiaries taken as a whole;

(ii) Each of the Subsidiaries is a corporation
duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization, with full corporate power and authority to
own, lease, and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto); and all the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned by the Company directly, or indirectly through
one of the other Subsidiaries, free and clear of any perfected security
interest, or, to the best knowledge of such counsel after reasonable inquiry,
any other security interest, lien, adverse claim, equity or other encumbrance;

(iii) The authorized and outstanding capital stock
of the Company is as set forth under the caption "Capitalization" in the
Prospectus; and the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock;"

(iv) All the shares of capital stock of the
Company outstanding prior to the issuance of the Shares to be issued and sold
by the Company hereunder, have been duly authorized and validly issued, and are
fully paid and nonassessable;

(v) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and nonassessable and
free of any preemptive, or to the best knowledge of such counsel after
reasonable inquiry, similar rights that entitle or will entitle any person to
acquire any Shares upon the issuance thereof by the Company;

(vi) The form of certificates for the Shares
conforms to the requirements of the Florida Business Corporation Act;

(vii) The Registration Statement and all
post-effective amendments, if any, have become effective under the Act and, to
the best knowledge of such counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in accordance with Rule 424(b);

(viii) The Company has corporate power and authority
to enter into this Agreement and to issue, sell and deliver the Shares to be
sold by it to the Underwriters as provided herein, and this Agreement has been
duly authorized, executed and delivered by the Company and is a valid, legal
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of rights to indemnity and
contribution hereunder may be limited by Federal or state securities laws or
principles of public policy and subject to the

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<PAGE> 21

qualification that the enforceability of the Company's obligations hereunder
may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles;

(ix) Neither the Company nor any of the
Subsidiaries is in violation of its respective certificate or articles of
incorporation or bylaws, or other organizational documents, or to the best
knowledge of such counsel after reasonable inquiry, is in default in the
performance of any material obligation, agreement or condition contained in any
bond, debenture, note or other evidence of indebtedness, except as may be
disclosed in the Prospectus;

(x) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement, compliance by
the Company with the provisions hereof nor consummation by the Company of the
transactions contemplated hereby conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, the certificate or articles
of incorporation or bylaws, or other organizational documents, of the Company
or any of the Subsidiaries or any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties is bound that is an
exhibit to the Registration Statement or to any Incorporated Document, or is
known to such counsel after reasonable inquiry, or will result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of the Subsidiaries, nor will any such action result in any
violation of any existing law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction, order or
decree known to such counsel after reasonable inquiry, applicable to the
Company, the Subsidiaries or any of their respective properties;

(xi) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained under the Act
and the Exchange Act or such as may be required under state securities or Blue
Sky laws governing the purchase and distribution of the Shares) for the valid
issuance and sale of the Shares to the Underwriters as contemplated by this
Agreement;

(xii) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and statistical
data included therein, as to which such counsel need not express any opinion)
comply as to form in all material respects with the requirements of the Act;
and each of the Incorporated Documents (except for the financial statements and
the notes thereto and the schedules and other financial and statistical data
included therein, as to which counsel need not express any opinion) complies as
to form in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;

(xiii) To the best knowledge of such counsel after
reasonable inquiry, (A) other than as described or contemplated in the
Prospectus (or any supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or any of
their property, is

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<PAGE> 22

subject, which are required to be described in the Registration Statement or
Prospectus (or any amendment or supplement thereto) and (B) there are no
agreements, contracts, indentures, leases or other instruments, that are
required to be described in the Registration Statement or the Prospectus (or
any amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not described or
filed as required, as the case may be;

(xiv) To the best knowledge of such counsel after
reasonable inquiry, neither the Company nor any of the Subsidiaries is in
violation of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any
decree of any court or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries;

(xv) The statements in the Registration Statement
and Prospectus, insofar as they are descriptions of contracts, agreements or
other legal documents, or refer to statements of law or legal conclusions, are
accurate and present fairly the information required to be shown;

(xvi) This Agreement and the Custody Agreement have
each been duly executed and delivered by or on behalf of each such Selling
Shareholders and are valid and binding agreements of such Selling Shareholder
enforceable against such Selling Shareholders in accordance with their terms;

(xvii) To the knowledge of such counsel, each such
Selling Shareholder has full legal right, power and authorization, and any
approval required by law, to sell, assign, transfer and deliver good and
marketable title to the Shares which such Selling Shareholder has agreed to
sell pursuant to this Agreement;

(xviii) The execution and delivery of this Agreement
and the Custody Agreement by such Selling Shareholders and the consummation of
the transactions contemplated hereby and thereby will not conflict with,
violate, result in a breach of or constitute a default under the terms or
provisions of any agreement, indenture, mortgage or other instrument known to
such counsel to which any such Selling Shareholder is a party or by which any
of them or any of their assets or property is bound, or any court order or
decree or any law, rule, or regulation applicable to any such Selling
Shareholder or to any of the property or assets of any such Selling
Shareholder;

(xix) Upon delivery of the Shares by the Company
and such Selling Shareholder pursuant to this Agreement and payment therefor as
contemplated herein the Underwriters will acquire good and marketable title to
such Shares free and clear of any lien, claim, security interest, or other
encumbrance, restriction on transfer or other defect in title; and

(xx) Although counsel has not undertaken, except
as otherwise indicated in their opinion, to determine independently, and does
not assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof (including review and discussion of the
contents of all Incorporated Documents), and nothing has come to the attention
of such counsel that has caused them to believe

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<PAGE> 23

that the Registration Statement (including the Incorporated Documents) at the
time the Registration Statement became effective, or the Prospectus, as of its
date and as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that any amendment or supplement to the Prospectus, as of its
respective date, and as of the Closing Date or the Option Closing Date, as the
case may be, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other
financial and statistical data included in the Registration Statement or the
Prospectus or any Incorporated Document).

In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the State of Florida, provided that (i) each such local counsel is
acceptable to the Representatives, (ii) such reliance is expressly authorized
by each opinion so relied upon and a copy of each such opinion is delivered to
the Representatives and is in form and substance satisfactory to them and their
counsel, and (iii) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon.

(d) You shall have received on the Closing Date, an
opinion of Benjamin P. Butterfield, Esq., corporate general counsel for the
Company, dated the Closing Date and addressed to you, as Representatives of the
several Underwriters, to the effect that:

(i) The Company and each of the Subsidiaries has
full corporate power and authority, and all necessary governmental
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental regulatory officials and bodies (except
where the failure so to have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits, individually or in the
aggregate, would not have a material adverse effect on the business,
properties, operations or financial condition of the Company and the
Subsidiaries taken as a whole), to own their respective properties and to
conduct their respective businesses as now being conducted, as described in the
Prospectus;

(ii) Except as disclosed in the Prospectus, the
Company owns of record, directly or indirectly, all the outstanding shares of
capital stock of each of the Subsidiaries free and clear of any lien, adverse
claim, security interest, equity, or other encumbrance;

(iii) Other than as described or contemplated in
the Prospectus (or any supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or any of
their property, is subject, which are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement thereto);

(iv) There are no agreements, contracts,
indentures, leases or other instruments, that are required to be described in
the Registration Statement or the Prospectus (or any

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<PAGE> 24

amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not described or
filed as required, as the case may be;

(v) The Company and the Subsidiaries own all
patents, trademarks, trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Prospectus as being owned by them or any of them or
necessary for the conduct of their respective businesses, and such counsel is
not aware of any claim to the contrary or any challenge by any other person to
the rights of the Company and the Subsidiaries with respect to the foregoing;

(vi) Neither the Company nor any of the
Subsidiaries is in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries;

(vii) Except as described in the Prospectus, there
are no outstanding options, warrants or other rights calling for the issuance
of, and such counsel does not know of any commitment, plan or arrangement to
issue, any shares of capital stock of the Company or any security convertible
into or exchangeable or exercisable for capital stock of the Company;

(viii) Except as described in the Prospectus, there
is no holder of any security of the Company or any other person who has the
right, contractual or otherwise, to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, the Shares or the
right to have any Common Stock or other securities of the Company included in
the registration statement or the right, as a result of the filing of the
registration statement, to require registration under the Act of any shares of
Common Stock or other securities of the Company; and

(ix) The transactions contemplated by the PVF
Acquisition Agreement have been consummated in accordance with the provisions
of the PVF Acquisition Agreement.

(e) You shall have received on the Closing Date an
opinion of ___________________, counsel for The Employees' Retirement Plan of
Consolidated Electrical Distributors, Inc. and Edmundson International, Inc.,
certain of the Selling Shareholders, dated the Closing Date and addressed to
you, as Representatives of the several Underwriters, with respect to matters
referred to in clauses (xvi), (xvii), (xviii) and (xix) of the foregoing
paragraph (c) and such other related matters as you may request.

(f) You shall have received on the Closing Date an
opinion of Powell, Goldstein, Frazer & Murphy, counsel for the Underwriters,
dated the Closing Date and addressed to you, as Representatives of the several
Underwriters, with respect to the matters referred to in clauses (v), (vii),
(viii), (xii) and (xx) of the foregoing paragraph (c) and such other related
matters as you may request.

(g) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Price Waterhouse LLP

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<PAGE> 25

and Deloitte & Touche LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.

(h)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Prospectus (or any amendment or Supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and
the Subsidiaries taken as a whole; (iv) the Company and the Subsidiaries shall
not have any liabilities or obligations, direct or contingent (whether or not
in the ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement thereto); (v) all
the representations and warranties of the Company contained in this Agreement
shall be true and correct on and as of the date hereof and on and as of the
Closing Date as if made on and as of the Closing Date; and (vi) the
transactions contemplated by the PVF Acquisition Agreement shall have been
consummated at or prior to the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 10(h) and in
Section 10(i) hereof.

(i) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.

(j) All the representations and warranties of the Selling
Shareholders contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing Date
and signed by or on behalf of the Selling Shareholders to the effect set forth
in this Section 10(j) and in Section 10(k) hereof.

(k) The Selling Shareholders shall not have failed at or
prior to the Closing Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied with by
them hereunder at or prior to the Closing Date.

(l) Prior to the Closing Date the shares of Common Stock
which the Company agrees to sell pursuant to this Agreement shall have been
listed, subject to notice of issuance, on the New York Stock Exchange.

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<PAGE> 26

(m) The Sellers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
requested.

(n) You shall have received copies of the opinions
delivered pursuant to Sections 8.05 and 9.06 of the PVF Acquisition Agreement,
together with letters authorizing you to rely thereon as if such opinion
letters were addressed to you.

All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and your counsel.

Any certificate or document signed by any officer of the
Company or any Attorney-in-Fact or any Selling Shareholder and delivered to
you, as Representatives of the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Company, the
Selling Shareholders or the particular Selling Shareholder, as the case may be,
to each Underwriter as to the statements made therein.

The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except
that, if any Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in paragraphs (c) through (j)
shall be dated the Option Closing Date in question and the opinions called for
by paragraphs (c), (d), (e) and (f) shall be revised to reflect the sale of
Additional Shares.

11. Expenses. The Sellers (in such proportion (aggregating 100%)
as they shall agree among themselves) agree to pay the following costs and
expenses and all other costs and expenses incident to the performance by them
of their obligations hereunder: (i) the preparation, printing or reproduction,
and filing with the Commission of the registration statement (including
financial statements and exhibits thereto), each Prepricing Prospectus, the
Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each Prepricing Prospectus, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with
the original issuance and sale of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Shares on the New York Stock Exchange; (vi) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including
the reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of

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<PAGE> 27

the Shares; and (ix) the fees and expenses of the Company's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Company and the Selling Shareholders.

12. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company, by notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Company and the Selling Shareholders.

If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Smith Barney Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule II hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.

Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.

13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Shareholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if

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<PAGE> 28

different from the Closing Date and then only as to the Additional Shares), as
the case may be, (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York or Florida shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak
or escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions, the effect of
which on the financial markets of the United States is such as to make it, in
your judgment, impracticable or inadvisable to commence or continue the
offering of the Shares at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the resale of the
Shares by the Underwriters. Notice of such termination may be given to the
Company by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.

14. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first and third paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
The first paragraph under the caption "Underwriting will contain the names and
participations of the underwriters; the third paragraph will contain the
selling concession and the reallowance.

15. Miscellaneous. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of
the Company at 20 North Orange Avenue, Suite 200, Orlando, Florida 32801,
Attention: David H. Hughes, Chairman of the Board and Chief Executive Officer;
or (ii) if to the Selling Shareholders, c/o J. Stephen Zeph and Robert N.
Blackford, Attorneys-in-Fact, c/o Maguire, Voorhis & Wells, P.A., 2 South
Orange Avenue, Orlando, Florida 32801, or (iii) if to you, as Representatives
of the several Underwriters, care of Smith Barney Inc., 388 Greenwich Street,
New York, New York 10013, Attention: Manager, Investment Banking Division.

This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as used in this
Agreement shall include a purchaser from any Underwriter of any of the Shares
in his status as such purchaser.

16. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.

This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.

-28-
<PAGE> 29

Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholders and the several Underwriters.

Very truly yours,

HUGHES SUPPLY, INC.

By:
--------------------------------
David H. Hughes
Chairman of the Board and
Chief Executive Officer

Each of the Selling Shareholders
named in Schedule I hereto

By:
--------------------------------
Attorney-in-Fact

Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.

SMITH BARNEY INC.

ROBERT W. BAIRD & CO. INCORPORATED

As Representatives of the Several Underwriters

By SMITH BARNEY INC.

By:
------------------------------
Managing Director

-29-
<PAGE> 30

SCHEDULE I

HUGHES SUPPLY, INC.

<TABLE>
<CAPTION>
Part A - Firm Shares

Number of
Selling Shareholders Firm Shares
-------------------- -----------
<S> <C>
The Employees' Retirement Plan of
Consolidated Electrical Distributors, Inc. . . . . . . . . . . . . . . . 214,926
Edmundson International, Inc. . . . . . . . . . . . . . . . . . . . . . . . 350,000
John V. Moore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Russell V. Hughes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Donald C. Martin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
John E. Petterson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
John F. Caswell, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
-------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679,926
-------
<CAPTION>
Part B - Additional Shares
Number of
Selling Shareholders Additional Shares
-------------------- -----------------
<S> <C>
Edmundson International, Inc. . . . . . . . . . . . . . . . . . . . . . . 52,500
-------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,500
-------
</TABLE>
<PAGE> 31

SCHEDULE II

HUGHES SUPPLY, INC.

<TABLE>
<CAPTION>
Name of Name of
Underwriter Firm Shares Underwriter Firm Shares
----------- ----------- ----------- -----------
<S> <C> <C> <C>
Smith Barney Inc. . . . . . . . . . . . . .
Robert W. Baird &
Co. Incorporated . . . . . . . . . . . .

</TABLE>

<PAGE> 1
EXHIBIT 5

April 22, 1996

Hughes Supply, Inc.
20 North Orange Avenue
Suite 200
Orlando, Florida 32801

RE: Registration Statement on Form S-3; 2,219,415 Shares of
Common Stock

Gentlemen:

We are legal counsel to Hughes Supply, Inc., a Florida corporation (the
"Company"), and have acted as such in the preparation and filing of its
Registration Statement on Form S-3 (Registration No. 333-02215) dated April 3,
1996, as amended by Amendment No. 1 to the Registration Statement on Form S-3
dated April 22, 1996 (the "Registration Statement"), with the Securities and
Exchange Commission (the "SEC") pursuant to the requirements of the Securities
Act of 1933, as amended, and the General Rules and Regulations of the SEC
promulgated thereunder for the registration of 2,219,415 shares of Common Stock,
par value $1.00 per share (the "Common Stock"), of the Company, of which up to
1,486,989 shares of Common Stock will be sold by the Company and up to 732,426
shares of Common Stock will be sold by certain selling shareholders (the
"Selling Shareholders").

In connection with the following opinion, we have examined copies of the
Company's Articles of Incorporation, including all amendments to the date
hereof, and all other corporate records and documents deemed necessary to render
this opinion.

Based upon the foregoing, it is our opinion that:

(1) The shares of Common Stock being offered for the account of the
Selling Shareholders were, when issued by the Company, duly authorized,
legally and validly issued, fully paid and nonassessable; and

(2) The shares of Stock being offered by the Company, when and if
issued and sold in the manner set forth in the Registration Statement, will
be legally and validly issued, fully paid and nonassessable.

We hereby consent (1) to be named in the Registration Statement and in the
Prospectus, which constitutes a part thereof, as the attorneys who will pass on
the legal matters in connection with the sale of Common Stock by the Company and
certain of the Selling Shareholders, and (2) to the filing of this opinion as
Exhibit 5 to the Registration Statement.

MAGUIRE, VOORHIS & WELLS, P.A.

By: /s/ ROBERT N. BLACKFORD
------------------------------------
Robert N. Blackford

<PAGE> 1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion and incorporation by reference in this
registration statement on Form S-3 of Coopers & Lybrand's report, dated March
17, 1994, on Coopers & Lybrand's audit of the consolidated statements of income,
shareholders' equity, and cash flows of Hughes Supply, Inc. and subsidiaries,
for the fiscal year ended January 28, 1994 which report is included in this
Prospectus and incorporated by reference in the Company's Annual Report on Form
10-K for the fiscal year ended January 26, 1996. We also consent to the
reference to Coopers & Lybrand under the caption "Experts."

COOPERS & LYBRAND L.L.P.

Orlando, Florida

April 19, 1996

<PAGE> 1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Hughes Supply, Inc.
on Form S-3 of our report dated September 25, 1995 (October 25, 1995 and March
27, 1996 as to Note 9) on the consolidated financial statements of PVF Holdings,
Inc. and subsidiaries, appearing in the Prospectus, which is part of this
Registration Statement. We also consent to the reference to us under the heading
"Experts" in such Prospectus.

Deloitte & Touche, LLP

Birmingham, Alabama

April 22, 1996

<PAGE> 1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the inclusion and incorporation by reference in the
Prospectus constituting part of the Registration Statement on Form S-3 of our
report dated March 14, 1996 relating to the consolidated financial statements of
Hughes Supply, Inc., which appears in such Prospectus. We also consent to the
references to us under the heading "Experts" in such Prospectus.

Price Waterhouse LLP

Orlando, Florida

April 19, 1996