FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-08772
HUGHES SUPPLY, INC.
(Exact name of registrant as specified in its charter)
Florida 59-0559446
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 North Orange Avenue, Suite 200, Orlando, Florida 32801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 407/841-4755
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock Outstanding as of December 1, 1997
$1 Par Value 18,866,250
Page 1
HUGHES SUPPLY, INC.
FORM 10-Q
Index
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of
October 31, 1997 and January 31, 1997 ......... 3 - 4
Consolidated Statements of Income for the
Three Months Ended October 31, 1997 and 1996 .. 5
Consolidated Statements of Income for the
Nine Months Ended October 31, 1997 and 1996 ... 6
Consolidated Statements of Cash Flows for the
Nine Months Ended October 31, 1997 and 1996 ... 7
Notes to Consolidated Financial Statements .... 8 - 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations ................................. 12 - 15
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K .............. 16 - 21
Signatures .................................... 22
Index of Exhibits Filed with This Report ...... 23
Page 2
HUGHES SUPPLY, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (unaudited)
(in thousands, except share data)
October 31, January 31,
1997 1997
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 10,132 $ 6,329
Accounts receivable, less allowance for
losses of $6,048 and $3,809 269,129 195,200
Inventories 268,974 250,113
Deferred income taxes 11,272 12,761
Other current assets 15,622 12,366
--------- ---------
Total current assets 575,129 476,769
Property and Equipment, net 96,747 73,038
Excess of Cost over Net Assets Acquired 99,406 89,755
Deferred Income Taxes 2,191 2,204
Other Assets 13,675 7,736
--------- ---------
$ 787,148 $ 649,502
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 3
HUGHES SUPPLY, INC.
Consolidated Balance Sheets (unaudited) - continued
(in thousands, except share data)
October 31, January 31,
1997 1997
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 3,666 $ 3,108
Accounts payable 137,728 112,004
Accrued compensation and benefits 19,125 16,508
Other current liabilities 25,271 14,768
--------- ---------
Total current liabilities 185,790 146,388
Long-Term Debt 271,199 221,988
Other Noncurrent Liabilities 2,612 2,199
--------- ---------
Total liabilities 459,601 370,575
--------- ---------
Commitments and Contingencies
Shareholders' Equity:
Preferred stock - -
Common stock-18,584,811 and
17,277,169 shares issued and outstanding 18,585 17,277
Capital in excess of par value 127,379 109,161
Retained earnings 182,860 152,489
Unearned compensation related to
outstanding restricted stock (1,277) -
--------- ---------
Total shareholders' equity 327,547 278,927
--------- ---------
$ 787,148 $ 649,502
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 4
HUGHES SUPPLY, INC.
Consolidated Statements of Income (unaudited)
(in thousands, except per share data)
Three months ended October 31,
1997 1996
---------- ----------
Net Sales $ 486,346 $ 405,353
Cost of Sales 381,448 319,892
---------- ----------
Gross Profit 104,898 85,461
---------- ----------
Operating Expenses:
Selling, general and administrative 74,578 61,033
Depreciation and amortization 4,505 4,106
Provision for doubtful accounts 460 1,018
---------- ----------
Total operating expenses 79,543 66,157
---------- ----------
Operating Income 25,355 19,304
---------- ----------
Non-Operating Income and (Expenses):
Interest and other income 1,283 1,057
Interest expense (4,920) (3,677)
---------- ----------
(3,637) (2,620)
---------- ----------
Income Before Income Taxes 21,718 16,684
Income Taxes 8,580 6,269
---------- ----------
Net Income $ 13,138 $ 10,415
========== ==========
Earnings Per Share:
Primary $ .70 $ .61
========== ==========
Fully diluted $ .70 $ .61
========== ==========
Average Shares Outstanding:
Primary 18,719 16,970
========== ==========
Fully diluted 18,774 16,979
========== ==========
Dividends Per Share $ .08 $ .07
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 5
HUGHES SUPPLY, INC.
Consolidated Statements of Income (unaudited)
(in thousands, except per share data)
Nine months ended October 31,
1997 1996
---------- ----------
Net Sales $1,369,125 $1,150,670
Cost of Sales 1,075,200 914,270
---------- ----------
Gross Profit 293,925 236,400
---------- ----------
Operating Expenses:
Selling, general and administrative 215,157 177,694
Depreciation and amortization 13,353 10,638
Provision for doubtful accounts 967 2,701
---------- ----------
Total operating expenses 229,477 191,033
---------- ----------
Operating Income 64,448 45,367
---------- ----------
Non-Operating Income and (Expenses):
Interest and other income 3,763 4,665
Interest expense (13,334) (9,603)
---------- ----------
(9,571) (4,938)
---------- ----------
Income Before Income Taxes 54,877 40,429
Income Taxes 21,679 15,293
---------- ----------
Net Income $ 33,198 $ 25,136
========== ==========
Earnings Per Share:
Primary $ 1.82 $ 1.64
========== ==========
Fully diluted $ 1.81 $ 1.64
========== ==========
Average Shares Outstanding:
Primary 18,203 15,312
========== ==========
Fully diluted 18,307 15,363
========== ==========
Dividends Per Share $ .23 $ .19
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 6
HUGHES SUPPLY, INC.
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Nine months ended October 31,
1997 1996
---------- ----------
Increase (Decrease) in Cash and Cash
Equivalents:
Cash flows from operating activities:
Cash received from customers $1,309,474 $1,112,764
Cash paid to suppliers and employees (1,282,670) (1,085,918)
Interest received 2,874 2,967
Interest paid (10,220) (6,564)
Income taxes paid (17,390) (15,269)
---------- ----------
Net cash provided by
operating activities 2,068 7,980
---------- ----------
Cash flows from investing activities:
Capital expenditures (28,130) (11,824)
Proceeds from sale of
property and equipment 399 1,721
Business acquisitions, net of cash (8,055) (89,952)
---------- ----------
Net cash used in
investing activities (35,786) (100,055)
---------- ----------
Cash flows from financing activities:
Net payments under
short-term debt arrangements (27,628) (35,182)
Principal payments on:
Long-term notes (10,692) (14,266)
Capital lease obligations (806) (843)
Proceeds from issuance of long-term debt 80,000 98,000
Net proceeds from sale of common stock - 48,197
Proceeds from stock options exercised 822 869
Purchase of common shares (285) (395)
Dividends paid (3,890) (4,526)
---------- ----------
Net cash provided by
financing activities 37,521 91,854
---------- ----------
Net Increase (Decrease) in Cash and
Cash Equivalents 3,803 (221)
Cash and Cash Equivalents:
Beginning of period 6,329 3,644
---------- ----------
End of period $ 10,132 $ 3,423
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 7
HUGHES SUPPLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) (dollars in thousands, except per share data)
1. In the opinion of Hughes Supply, Inc. (the "Company"), the
accompanying unaudited consolidated financial statements contain
all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position as of October
31, 1997, the results of operations for the three months and nine
months ended October 31, 1997 and 1996, and cash flows for the nine
months then ended.
The fiscal year of the Company is a 52- or 53-week period ending on
the last Friday in January. Fiscal year 1998 will be a 52-week
period while fiscal year 1997 was a 53-week period. The nine
months ended October 31, 1997 and 1996 contained 39 weeks and 40
weeks, respectively, and the quarters ended October 31, 1997 and
1996 each contained 13 weeks.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per
Share ("SFAS 128"). SFAS 128, which supersedes Accounting
Principles Board Opinion No. 15, establishes standards for
computing and presenting earnings per share. SFAS 128 is effective
for financial statements issued for periods ending after December
15, 1997 and, accordingly, will be adopted by the Company
commencing with its period ending January 30, 1998. When adopted,
all prior-period earnings per share data are required to be
restated. The Company does not expect the adoption of SFAS 128 to
have a material effect on the calculation of its earnings per
share.
2. During the nine months ended October 31, 1997, the Company acquired
nine wholesale distributors of materials to the construction
industry for cash and stock. These acquisitions have been
accounted for as purchases or immaterial poolings and did not have
a material effect on the consolidated financial statements of the
Company. Results of operations of these companies from their
respective dates of acquisition have been included in the
consolidated financial statements.
3. On August 18, 1997, the Company's revolving credit and line of
credit agreement (the "credit agreement") with a group of banks was
amended. The credit agreement, as amended, now permits the Company
to borrow up to $180,000 (subject to borrowing limitations under
the credit agreement), $130,000 of which is long-term debt,
expiring August 17, 2000, and $50,000 of which is a line of credit
convertible to a term note due two years from conversion date.
Page 8
HUGHES SUPPLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited) (dollars in thousands, except per share data)
On August 28, 1997, the Company issued $80,000 of senior notes due
2012 in a private placement. The notes, of which $40,000 bear
interest at 7.14% and $40,000 bear interest at 7.19%, will be
payable in 21 and 13 equal semi-annual payments beginning in 2002
and 2006, respectively. Proceeds received by the Company from the
sale of the notes were used to reduce indebtedness outstanding
under the Company's credit agreement.
In connection with the issuance of the senior notes, on August 27,
1997 the Company entered into an interest rate swap agreement. The
interest rate swap agreement effectively converts the Company's
$40,000 of 7.19% senior notes due 2012 from fixed-rate debt to
floating-rate debt based on six-month London Interbank Offered
Rates (LIBOR) less a predetermined spread.
4. On May 20, 1997, the Company's Board of Directors declared a three-
for-two stock split to shareholders of record as of July 10, 1997.
The date of issuance for the additional shares was July 17, 1997.
Accordingly, all share and per share data have been restated for
periods prior to the stock split.
On May 20, 1997, the shareholders approved an amendment to the
Restated Articles of Incorporation of the Company increasing the
number of authorized shares of common stock from 20,000,000 to
100,000,000 shares, $1.00 par value per share.
On August 20, 1997, the Company granted 50,000 shares of restricted
stock with a market value of $1,300 to certain key employees. The
market value of the restricted stock was recorded as unearned
compensation and is being charged to expense over the shorter of
the 10-year vesting period, or the period of time from the date of
grant through the date when the employee reaches age 65.
On September 30, 1997, the Company's Board of Directors increased
the regular quarterly cash dividend from $.075 per share to $.08
per share effective for the third quarter dividend which was
payable on November 14, 1997 to shareholders of record on November
3, 1997.
Page 9
HUGHES SUPPLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited) (dollars in thousands, except per share data)
5. The following is a reconciliation of net income to net cash
provided by (used in) operating activities:
Nine months ended October 31,
1997 1996
---------- ----------
Net income $ 33,198 $ 25,136
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation 8,854 6,968
Amortization 4,499 3,670
Provision for doubtful accounts 967 2,701
Other, net (382) (660)
Changes in assets and liabilities,
net of effects of acquisitions:
(Increase) decrease in:
Accounts receivable (60,135) (38,944)
Inventories (7,094) (6,340)
Other current assets (2,998) 5,969
Other assets (5,740) (274)
Increase (decrease) in:
Accounts payable and accrued
expenses 23,083 6,343
Accrued interest and income
taxes 5,828 5,500
Other noncurrent liabilities 413 348
(Increase) decrease in deferred
income taxes 1,575 (2,437)
---------- ----------
Net cash provided by
operating activities $ 2,068 $ 7,980
========== ==========
Page 10
HUGHES SUPPLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited) (dollars in thousands, except per share data)
6. Subsequent events:
On November 24, 1997, the Company entered into an agreement to
acquire all of the common stock of Mountain Country Supply
("Mountain Country"). Mountain Country is a wholesale distributor
of plumbing supplies, water and sewer equipment and supplies, and
HVAC equipment and supplies with 10 locations in Arizona. Mountain
Country's sales for its current fiscal year ending December 31,
1997 are expected to be approximately $100,000. The transaction
will be accounted for as a purchase. The acquisition is subject to
a number of contingencies including certain regulatory approvals.
It is anticipated that the transaction will close in January 1998.
Page 11
HUGHES SUPPLY, INC.
PART I. FINANCIAL INFORMATION - Continued
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following is management's discussion and analysis of certain
significant factors which have affected the financial condition of the
Company as of October 31, 1997, and the results of operations for the
three and nine months then ended.
As described in Note 4 of the Notes to Consolidated Financial
Statements, on May 20, 1997 the Company's Board of Directors declared a
three-for-two stock split to shareholders of record as of July 10, 1997.
Accordingly, all share and per share data have been restated for periods
prior to the stock split.
Certain statements set forth in Management's Discussion and Analysis of
Financial Condition and Results of Operations constitute "forward-
looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Act of 1934,
as amended, and are subject to the safe harbor created by such sections.
When used in this report, the words "believe," "anticipate," "estimate,"
"expect," and similar expressions are intended to identify forward-
looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give
no assurance that such expectations will prove to be correct. The
Company's actual results may differ significantly from the results
discussed in such forward-looking statements. When appropriate, certain
factors that could cause results to differ materially from those
projected in the forward-looking statements are enumerated. This
Management's Discussion and Analysis of Financial Condition and Results
of Operations should be read in conjunction with the Company's
consolidated financial statements and the notes thereto.
Material Changes in Results of Operations
Net Sales
Net sales were $486 million for the quarter ended October 31, 1997, a
20% increase over the prior year's third quarter. Net sales for the
nine months were $1.37 billion which was 19% ahead of last year. On a
basis comparable to the prior year, the Company experienced a same-store
net sales increase of 6% and 7% for the three and nine months ended
October 31, 1997, respectively. The remaining increase in net sales is
attributable to newly-opened and acquired wholesale outlets.
Page 12
The same-store sales increase of 6% for the third quarter was below the
high single-digit increases the Company has achieved in recent years.
This was primarily due to the adverse impact that mild and wet weather
had on air conditioning and pool product sales. On the other hand, two
of the Company's newest product groups, water and sewer and industrial
pipe, valves and fittings, achieved double-digit same-store sales
increases which helped offset the decline in same-store sales growth.
Gross Profit
Gross profit and gross margin for the three and nine months ended
October 31, 1997 and 1996 were as follows (dollars in thousands):
<TABLE>
<CAPTION>
1997 1996
Gross Gross Gross Gross Variance
Profit Margin Profit Margin Amount %
<S> <C> <C> <C> <C> <C> <C>
Three months ended $ 104,898 21.6% $ 85,461 21.1% $ 19,437 22.7%
Nine months ended $ 293,925 21.5% $ 236,400 20.5% $ 57,525 24.3%
</TABLE>
The improvement in gross margins has resulted from several factors,
including expansion of product offerings to lines with better margins,
efficiencies created with central distribution centers, increased
volume, and concentration of supply sources as part of the Company's
preferred vendor program.
Operating Expenses
Operating expenses for the three and nine months ended October 31, 1997
and 1996 were as follows (dollars in thousands):
<TABLE>
<CAPTION>
1997 1996
% of % of Variance
Amount Net Sales Amount Net Sales Amount %
<S> <C> <C> <C> <C> <C> <C>
Three months ended $ 79,543 16.4% $ 66,157 16.3% $ 13,386 20.2%
Nine months ended $ 229,477 16.8% $ 191,033 16.6% $ 38,444 20.1%
</TABLE>
Approximately 13 and 15 percentage points of the 20.2% and 20.1%
increases in operating expenses for the three and nine months ended
October 31, 1997, respectively, is attributable to newly-opened
wholesale outlets and recent acquisitions. The remainder of the
increase is primarily due to higher personnel expenses, including health
care costs, and higher transportation costs associated with same-store
sales growth.
Non-Operating Income and Expenses
Interest and other income increased $.2 million and decreased $.9
million for the three and nine months ended October 31, 1997,
respectively, over the prior year periods. The decrease of $.9 million
for the nine month period is primarily attributable to non-recurring
gains recognized on the sale of property and equipment in the prior
year.
Page 13
Interest expense was $4.9 million and $13.3 million for the three and
nine months ended October 31, 1997 compared to $3.7 million and $9.6
million for the three and nine months ended October 31, 1996,
respectively. The increases are the result of higher borrowing levels
partially offset by lower interest rates. Expansion through business
acquisitions has been partially funded by debt financing.
Income Taxes
The effective tax rates for the three and nine months ended October 31,
1997 and 1996 were as follows:
1997 1996
Three months ended 39.5% 37.6%
Nine months ended 39.5% 37.8%
Prior to the mergers on April 26, 1996 with Electric Laboratories and
Sales Corporation and ELASCO Agency Sales, Inc. (collectively, "ELASCO")
and January 24, 1997 with Metals, Incorporated and Stainless Tubular
Products, Inc., all three entities were Subchapter S corporations and,
therefore, not subject to corporate income tax. Each entity's
Subchapter S corporation status terminated upon the merger with the
Company. As a result, the Company's effective rate is higher for the
three and nine months ended October 31, 1997 compared to the prior year
periods. The Company's effective tax rate for the three and nine months
ended October 31, 1996 would have been approximately 40% assuming
ELASCO, Metals, Incorporated and Stainless Tubular Products, Inc. were
tax paying entities.
Net Income
Net income for the third quarter increased 26% to $13.1 million. Fully
diluted earnings per share for the third quarter were $.70 compared to
$.61 in the prior year, a 15% increase with 11% more shares outstanding.
For the nine months ended October 31, 1997, net income reached $33.2
million, a 32% increase over the nine months ended October 31, 1996.
Fully diluted earnings per share for the nine months ended October 31,
1997 and 1996 were $1.81 and $1.64, respectively. This increase of 10%
was on 19% more shares outstanding.
These improved results reflect operating leverage that has been achieved
through the Company's acquisition program and the resulting purchasing
and administrative synergies, as well as through internal growth.
Operating margins (operating income as a percentage of net sales) have
improved to 5.2% and 4.7% for the three and nine months ended October
31, 1997, compared to 4.8% and 3.9% for the three and nine months ended
October 31, 1996, respectively.
Page 14
Liquidity and Capital Resources
Working capital at October 31, 1997 amounted to $389 million compared to
$330 million at January 31, 1997. The working capital ratio was 3.1 to
1 and 3.3 to 1 as of October 31, 1997 and January 31, 1997,
respectively. The Company typically becomes more leveraged in
expansionary periods. Consequently, higher levels of inventories and
receivables, trade payables and debt are required to support the growth.
Net cash provided by operations was $2.1 million for the nine months
ended October 31, 1997 compared to $8.0 million for the nine months
ended October 31, 1996. This change is primarily due to increases in
accounts receivable and inventories resulting from the Company's growth.
Expenditures for property and equipment were $28.1 million for the nine
months ended October 31, 1997 compared to $11.8 million for the nine
months ended October 31, 1996. Capital expenditures for property and
equipment, not including amounts for business acquisitions, are expected
to be approximately $32 million for fiscal year 1998.
Cash payments for business acquisitions accounted for as purchases
totaled $8.1 million for the nine months ended October 31, 1997. In
addition, the Company issued approximately 607,000 of its common shares
valued at approximately $15.2 million for such purchases.
Principal reductions on long-term debt were $10.7 million for the nine
months ended October 31, 1997 compared to $14.3 million for the prior
year nine months. These amounts are attributed primarily to the
repayment of debt assumed as a result of certain business acquisitions.
Dividend payments were $3.9 million during the nine months ended October
31, 1997 and $4.5 million (including $2.4 million in cash dividends of
pooled companies) during the nine months ended October 31, 1996.
As discussed in Note 3 of the Notes to Consolidated Financial
Statements, in August 1997 the Company issued $80 million of senior
notes in a private placement. The proceeds of this offering were used
to reduce indebtedness outstanding under the Company's bank debt.
Management believes that the Company has sufficient borrowing capacity,
with approximately $92 million available under its existing credit
facilities (subject to borrowing limitations under long-term debt
covenants) as of October 31, 1997, to take advantage of growth and
business acquisition opportunities and has the resources necessary to
fund ongoing operating requirements and anticipated capital
expenditures. Future expansion will continue to be financed on a
project-by-project basis through additional borrowing, or, as
circumstances allow, through the issuance of common stock.
Page 15
HUGHES SUPPLY, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Filed
(2) Plan of acquisition, reorganization, arrangement, liquidation
or succession. Not applicable.
(3) Articles of incorporation and by-laws.
3.1 Restated Articles of Incorporation, as amended, filed as
Exhibit 3.1 to Form 10-Q for the quarter ended April 30,
1997 (Commission File No. 001-08772).
3.2 Composite By-Laws, as amended, filed as Exhibit 3.2 to
Form 10-Q for the quarter ended July 31, 1994 (Commission
File No. 001-08772).
(4) Instruments defining the rights of security holders, including
indentures.
4.1 Specimen Stock Certificate representing shares of the
Registrant's common stock, $1.00 par value, filed as
Exhibit 4.1 to Form 10-Q for the quarter ended July 31,
1997 (Commission File No. 001-08772).
4.2 Resolution Approving and Implementing Shareholder Rights
Plan filed as Exhibit 4.4 to Form 8-K dated May 17, 1988
(Commission File No. 0-5235).
(10) Material contracts.
10.1 Lease Agreements with Hughes, Inc.
(a) Orlando Trucking, Garage and Maintenance Operations
dated December 1, 1971, filed as Exhibit 13(n) to
Registration No. 2-43900 (Commission File No. 0-
5235). Letter dated April 15, 1992 extending lease
from month to month, filed as Exhibit 10.1(a) to
Form 10-K for the fiscal year ended January 31,
1992 (Commission File No. 0-5235).
Page 16
(b) Leases effective March 31, 1988, filed as Exhibit
10.1(c) to Form 10-K for the fiscal year ended
January 27, 1989 (Commission File No. 0-5235).
Sub-Item Property
(1) Clearwater
(2) Daytona Beach
(3) Fort Pierce
(4) Lakeland
(6) Leesburg
(7) Orlando Electrical Operation
(8) Orlando Plumbing Operation
(9) Orlando Utility Warehouse
(11) Sarasota
(12) Venice
(13) Winter Haven
(c) Lease amendment letter between Hughes, Inc. and the
Registrant, dated December 1, 1986, amending
Orlando Truck Operations Center and Maintenance
Garage lease, filed as Exhibit 10.1(i) to Form 10-K
for the fiscal year ended January 30, 1987
(Commission File No. 0-5235).
(d) Lease agreement dated June 1, 1987, between Hughes,
Inc. and the Registrant, for additional Sarasota
property, filed as Exhibit 10.1(j) to Form 10-K for
the fiscal year ended January 29, 1988 (Commission
File No. 0-5235).
(e) Leases dated March 11, 1992, filed as Exhibit
10.1(e) to Form 10-K for the fiscal year ended
January 31, 1992 (Commission File No. 0-5235).
Sub-Item Property
(2) Gainesville Electrical Operation
10.2 Hughes Supply, Inc. 1988 Stock Option Plan as amended
March 12, 1996 filed as Exhibit 10.2 to Form 10-K for the
fiscal year ended January 26, 1996 (Commission File No.
001-08772).
10.3 Form of Supplemental Executive Retirement Plan Agreement
entered into between the Registrant and eight of its
executive officers, filed as Exhibit 10.6 to Form 10-K
for fiscal year ended January 30, 1987 (Commission File
No. 0-5235).
Page 17
10.4 Directors' Stock Option Plan, as amended, filed as
Exhibit 10.4 to Form 10-Q for the quarter ended July 31,
1994 (Commission File No. 001-08772).
10.5 Asset Purchase Agreement with Accord Industries Company,
dated October 9, 1990, for sale of Registrant's
manufacturing operations, filed as Exhibit 10.7 to Form
10-K for the fiscal year ended January 25, 1991
(Commission File No. 0-5235).
10.6 Lease Agreement dated June 30, 1993 between Donald C.
Martin and Electrical Distributors, Inc., filed as
Exhibit 10.6 to Form 10-K for the fiscal year ended
January 28, 1994 (Commission File No. 001-08772).
10.7 Consulting Agreement dated June 30, 1993 between Hughes
Supply, Inc. and Donald C. Martin, filed as Exhibit 10.7
to Form 10-K for the fiscal year ended January 28, 1994
(Commission File No. 001-08772).
10.8 Written description of senior executives' long-term
incentive bonus plan for fiscal year 1996 incorporated by
reference to the description of the bonus plan set forth
under the caption "Approval of the Stock Award Provisions
of the Senior Executives' Long-Term Incentive Bonus Plan
for Fiscal Year 1996" on pages 26 and 27 of the
Registrant's Proxy Statement Annual Meeting of
Shareholders To Be Held May 24, 1994 (Commission File No.
001-08772).
10.9 Hughes Supply, Inc. Amended Senior Executives' Long-Term
Incentive Bonus Plan, adopted January 25, 1996, filed as
Exhibit 10.9 to Form 10-K for the fiscal year ended
January 26, 1996 (Commission File No. 001-08772).
10.10 Lease Agreement dated June 24, 1996 between Donald C.
Martin and Hughes Supply, Inc., filed as Exhibit 10.10 to
Form 10-Q for the quarter ended October 31, 1996
(Commission File No. 001-08772).
Page 18
10.11 Lease Agreements between Union Warehouse & Trucking
Company (d/b/a Union Warehouse & Realty Company) or
Monoco Realty and USCO Incorporated.
(a) Leases dated March 1, 1985 and amended December 23,
1986, filed as Exhibit 10.11(a) to Form 10-K for
the fiscal year ended January 26, 1996 (Commission
File No. 001-08772).
Sub-Item Property
(1) 610 East Windsor St., Monroe, NC
(2) 113-115 Henderson St., Monroe, NC
(3) Statesville, NC
(4) Charlotte, NC
(5) Durham, NC
(6) Pinehurst, NC
(7) West Columbia, SC
(b) Lease dated July 1, 1986 and amended December 23,
1986 for Aiken, South Carolina property, filed as
Exhibit 10.11(b) to Form 10-K for the fiscal year
ended January 26, 1996 (Commission File No. 001-
08772).
(c) Lease dated March 1, 1990 for 1234 South
Pleasantburg Drive, Greenville, South Carolina
property, filed as Exhibit 10.11(c) to Form 10-K
for the fiscal year ended January 26, 1996
(Commission File No. 001-08772).
(d) Lease dated November 1, 1993 for Cheraw, South
Carolina property, filed as Exhibit 10.11(d) to
Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
(e) Lease dated March 1, 1985 and amended October 1,
1992 for 1515 Morgan Mill Road, Monroe, North
Carolina property, filed as Exhibit 10.11(e) to
Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
(f) Lease amendment letter between Union Warehouse &
Realty Company, Monoco Realty Company and Hughes
Supply, Inc., dated October 18, 1994, amending the
leases for the eleven properties listed in Exhibit
10.11(a) through (e), filed as Exhibit 10.11(f) to
Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
Page 19
(g) Lease effective February 1, 1996 for Pineville,
North Carolina property, filed as Exhibit 10.11(g)
to Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
10.12 Lease Agreement effective February 1, 1993 between Union
Warehouse & Realty Company and Moore Electric Supply,
Inc. for 213 North Pleasantburg Drive, Greenville, South
Carolina property, filed as Exhibit 10.12 to Form 10-K
for the fiscal year ended January 26, 1996 (Commission
File No. 001-08772).
10.13 Lease Agreement dated April 14, 1997 between Union
Warehouse & Realty Co. and the Registrant for 607 East
Windsor St., Monroe, North Carolina property, filed as
Exhibit 10.13 to Form 10-Q for the quarter ended April
30, 1997 (Commission File No. 001-08772).
10.14 Amended and Restated Revolving Credit Agreement and Line
of Credit Agreement, dated as of August 18, 1997, by and
among the Company, SunTrust, SouthTrust, NationsBank,
First Union, Barnett and PNC, filed as Exhibit 10.14 to
Form 10-Q for the quarter ended July 31, 1997 (Commission
File No. 001-08772). The Amended Credit Agreement
contains a table of contents identifying the contents of
Schedules and Exhibits, all of which have been omitted.
The Company agrees to furnish a supplemental copy of any
omitted Schedule or Exhibit to the Commission upon
request.
10.15 Note Purchase Agreement, dated as of August 28, 1997, by
and among the Company and certain purchasers identified
in Schedule A of the Note Purchase Agreement, filed as
Exhibit 10.15 to Form 10-Q for the quarter ended July 31,
1997 (Commission File No. 001-08772).
(11) Statement re computation of per share earnings.
11.1 Summary schedule of earnings per share calculations.
(15) Letter re unaudited interim financial information. Not
applicable.
(18) Letter re change in accounting principles. Not applicable.
(19) Report furnished to security holders. Not applicable.
(22) Published report regarding matters submitted to vote of
security holders. Not applicable.
(23) Consents of experts and counsel. Not applicable.
Page 20
(24) Power of attorney. Not applicable.
(27) Financial data schedule.
27.1 Financial data schedule (filed electronically only).
27.2 Restated financial data schedule (filed electronically
only).
27.3 Restated financial data schedule (filed electronically
only).
27.4 Restated financial data schedule (filed electronically
only).
(99) Additional exhibits. Not applicable.
(b) Reports on Form 8-K
During the quarter ended October 31, 1997, the Registrant
filed a Current Report on Form 8-K dated July 17, 1997, which
reported under Item 5 (Other Events) that the Registrant has
restated its Selected Financial Data to give effect to a
three-for-two stock split declared by the Registrant's Board
of Directors on May 20, 1997 to shareholders of record as of
July 10, 1997.
Page 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HUGHES SUPPLY, INC.
Date: December 12, 1997 By: /s/ David H. Hughes
David H. Hughes, Chairman of
the Board and Chief Executive
Officer
Date: December 12, 1997 By: /s/ J. Stephen Zepf
J. Stephen Zepf, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
Page 22
INDEX OF EXHIBITS FILED WITH THIS REPORT
11.1 Summary schedule of earnings per share calculations.
27.1 Financial data schedule (filed electronically only).
27.2 Restated financial data schedule (filed electronically only).
27.3 Restated financial data schedule (filed electronically only).
27.4 Restated financial data schedule (filed electronically only).
Page 23
Exhibit 11.1
HUGHES SUPPLY, INC.
SUMMARY SCHEDULE OF EARNINGS PER SHARE CALCULATIONS
(in thousands, except per share amounts)
Potentially dilutive securities:
Options for common stock, issued under stock option plan.
Three Months
Ended October 31,
1997 1996
Line
- ----
SHARES
------
1 Average shares outstanding 18,395 16,628
2 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at average market price
during the period 324 342
---------- ----------
3 Shares used in calculating Earnings Per
Common and Common Equivalent Share 18,719 16,970
4 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at the higher of the
average market price during the period or the
market price at the end of the period; and
that options exercised during the period were
exercised at the beginning of the period (or
time of issuance, if later) and the proceeds
were used to purchase shares at the market
price at the date of exercise 55 9
---------- ----------
5 Shares used in calculating Earnings Per
Common Share - Assuming Full Dilution 18,774 16,979
========== ==========
EARNINGS
--------
6 Net income per financial statements $ 13,138 $ 10,415
========== ==========
RESULTING PER SHARE DATA
------------------------
7 Earnings per common share (Line 6/Line 1) $ .71 $ .63
========== ==========
8 Earnings per common share and common
equivalent share (Line 6/Line 3) $ .70 $ .61
========== ==========
9 Dilution 1.4% 3.2%
========== ==========
10 Earnings per common share - assuming full
dilution (Line 6/Line 5) $ .70 $ .61
========== ==========
11 Dilution 1.4% 3.2%
========== ==========
12 Used in statements of income:
[ ] Line 7, if dilution less than 3%, or antidilution, exists for all
periods.
[ X ] Lines 8 and 10, if dilution >= 3% for any period.
Nine Months
Ended October 31,
1997 1996
Line
- ----
SHARES
------
1 Average shares outstanding 17,916 15,004
2 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at average market price
during the period 287 308
---------- ----------
3 Shares used in calculating Earnings Per
Common and Common Equivalent Share 18,203 15,312
4 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at the higher of the
average market price during the period or the
market price at the end of the period; and
that options exercised during the period were
exercised at the beginning of the period (or
time of issuance, if later) and the proceeds
were used to purchase shares at the market
price at the date of exercise 104 51
---------- ----------
5 Shares used in calculating Earnings Per
Common Share - Assuming Full Dilution 18,307 15,363
========== ==========
EARNINGS
--------
6 Net income per financial statements $ 33,198 $ 25,136
========== ==========
RESULTING PER SHARE DATA
------------------------
7 Earnings per common share (Line 6/Line 1) $ 1.85 $ 1.68
========== ==========
8 Earnings per common share and common
equivalent share (Line 6/Line 3) $ 1.82 $ 1.64
========== ==========
9 Dilution 1.6% 2.4%
========== ==========
10 Earnings per common share - assuming full
dilution (Line 6/Line 5) $ 1.81 $ 1.64
========== ==========
11 Dilution 2.2% 2.4%
========== ==========
12 Used in statements of income:
[ ] Line 7, if dilution less than 3%, or antidilution, exists for all
periods.
[ X ] Lines 8 and 10, if dilution >= 3% for any period.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF HUGHES SUPPLY, INC. AS OF OCTOBER 31, 1997, AND
THE RELATED STATEMENT OF INCOME FOR THE NINE MONTHS THEN ENDED AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-30-1998
<PERIOD-END> OCT-31-1997
<CASH> 10,132
<SECURITIES> 0
<RECEIVABLES> 275,177
<ALLOWANCES> 6,048
<INVENTORY> 268,974
<CURRENT-ASSETS> 575,129
<PP&E> 174,954
<DEPRECIATION> 78,207
<TOTAL-ASSETS> 787,148
<CURRENT-LIABILITIES> 185,790
<BONDS> 271,199
0
0
<COMMON> 18,585
<OTHER-SE> 308,962
<TOTAL-LIABILITY-AND-EQUITY> 787,148
<SALES> 1,369,125
<TOTAL-REVENUES> 1,369,125
<CGS> 1,075,200
<TOTAL-COSTS> 1,075,200
<OTHER-EXPENSES> 228,510
<LOSS-PROVISION> 967
<INTEREST-EXPENSE> 13,334
<INCOME-PRETAX> 54,877
<INCOME-TAX> 21,679
<INCOME-CONTINUING> 33,198
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,198
<EPS-PRIMARY> 1.82
<EPS-DILUTED> 1.81
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF HUGHES SUPPLY, INC. AND RELATED STATEMENTS OF
INCOME AS OF AND FOR THE PERIODS ENDED JULY 31, 1997, APRIL 30, 1997,
JANUARY 31, 1997, OCTOBER 31, 1996, AND JULY 31, 1996. THIS SCHEDULE IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS YEAR 9-MOS 6-MOS
<FISCAL-YEAR-END> JAN-30-1998 JAN-30-1998 JAN-31-1997 JAN-31-1997 JAN-31-1997
<PERIOD-END> JUL-31-1997 APR-30-1997 JAN-31-1997 OCT-31-1996 JUL-31-1996
<CASH> 10,712 11,110 6,329 3,423 652
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 251,595 234,751 199,009 223,737 212,380
<ALLOWANCES> 5,259 4,647 3,809 8,611 7,403
<INVENTORY> 265,458 266,776 250,113 224,209 202,296
<CURRENT-ASSETS> 548,612 528,713 476,769 466,011 430,077
<PP&E> 159,617 146,723 140,928 141,062 135,393
<DEPRECIATION> 71,963 67,796 67,890 71,391 67,985
<TOTAL-ASSETS> 748,476 712,591 649,502 625,128 588,416
<CURRENT-LIABILITIES> 176,315 191,971 146,388 162,834 150,618
<BONDS> 262,096 230,438 221,988 194,755 184,853
0 0 0 0 0
0 0 0 0 0
<COMMON> 17,916 17,417 17,277 16,951 16,360
<OTHER-SE> 289,669 270,437 261,650 248,469 234,566
<TOTAL-LIABILITY-AND-EQUITY> 748,476 712,591 649,502 625,128 588,416
<SALES> 882,779 421,385 1,516,088 1,150,670 745,317
<TOTAL-REVENUES> 882,779 421,385 1,516,088 1,150,670 745,317
<CGS> 693,752 332,224 1,200,179 914,270 594,378
<TOTAL-COSTS> 693,752 332,224 1,200,179 914,270 594,378
<OTHER-EXPENSES> 149,427 73,214 255,794 188,332 123,193
<LOSS-PROVISION> 507 344 842 2,701 1,683
<INTEREST-EXPENSE> 8,414 3,981 13,520 9,603 5,926
<INCOME-PRETAX> 33,159 12,856 51,706 40,429 23,745
<INCOME-TAX> 13,099 5,079 19,178 15,293 9,024
<INCOME-CONTINUING> 20,060 7,777 32,528 25,136 14,721
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 20,060 7,777 32,528 25,136 14,721
<EPS-PRIMARY> 1.12 .44 2.05 1.64 1.01
<EPS-DILUTED> 1.12 .44 2.05 1.64 1.01
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF HUGHES SUPPLY, INC. AND RELATED STATEMENTS OF
INCOME AS OF AND FOR THE PERIODS ENDED APRIL 30, 1996, JANUARY 26, 1996,
OCTOBER 31, 1995, JULY 31, 1995, AND APRIL 30, 1995. THIS SCHEDULE IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR 9-MOS 6-MOS 3-MOS
<FISCAL-YEAR-END> JAN-31-1997 JAN-26-1996 JAN-26-1996 JAN-26-1996 JAN-26-1996
<PERIOD-END> APR-30-1996 JAN-26-1996 OCT-31-1995 JUL-31-1995 APR-30-1995
<CASH> 3,286 3,644 1,792 3,231 2,090
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 186,125 160,570 176,254 167,261 169,182
<ALLOWANCES> 6,061 4,868 7,903 6,500 5,715
<INVENTORY> 171,842 167,138 153,431 158,607 157,156
<CURRENT-ASSETS> 376,249 353,722 340,419 339,560 339,596
<PP&E> 129,758 123,513 121,522 120,387 118,334
<DEPRECIATION> 64,561 60,762 59,360 58,471 57,593
<TOTAL-ASSETS> 470,558 440,795 429,100 425,211 424,581
<CURRENT-LIABILITIES> 152,931 136,583 132,239 124,124 138,049
<BONDS> 141,241 131,682 127,661 137,176 128,441
0 0 0 0 0
0 0 0 0 0
<COMMON> 12,841 12,698 12,661 12,718 12,722
<OTHER-SE> 161,646 158,061 154,686 149,445 143,723
<TOTAL-LIABILITY-AND-EQUITY> 470,558 440,795 429,100 425,211 424,581
<SALES> 349,500 1,242,446 938,481 610,065 289,543
<TOTAL-REVENUES> 349,500 1,242,446 938,481 610,065 289,543
<CGS> 280,157 989,214 750,121 487,198 230,824
<TOTAL-COSTS> 280,157 989,214 750,121 487,198 230,824
<OTHER-EXPENSES> 58,982 212,039 155,496 101,611 49,657
<LOSS-PROVISION> 851 1,907 2,454 1,247 625
<INTEREST-EXPENSE> 2,461 9,380 7,133 4,772 2,252
<INCOME-PRETAX> 8,644 34,867 27,111 17,549 7,192
<INCOME-TAX> 3,121 11,661 8,980 5,643 2,183
<INCOME-CONTINUING> 5,523 23,206 18,131 11,906 5,009
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 5,523 23,206 18,131 11,906 5,009
<EPS-PRIMARY> .42 1.82 1.42 .94 .40
<EPS-DILUTED> .42 1.80 1.41 .94 .40
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF HUGHES SUPPLY, INC. AND RELATED STATEMENT OF
INCOME AS OF AND FOR THE PERIOD ENDED JANUARY 27, 1995. THIS SCHEDULE IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-27-1995
<PERIOD-END> JAN-27-1995
<CASH> 3,774
<SECURITIES> 0
<RECEIVABLES> 146,122
<ALLOWANCES> 5,224
<INVENTORY> 149,461
<CURRENT-ASSETS> 316,142
<PP&E> 115,528
<DEPRECIATION> 56,381
<TOTAL-ASSETS> 391,153
<CURRENT-LIABILITIES> 119,197
<BONDS> 121,728
0
0
<COMMON> 12,421
<OTHER-SE> 136,261
<TOTAL-LIABILITY-AND-EQUITY> 391,153
<SALES> 994,811
<TOTAL-REVENUES> 994,811
<CGS> 797,123
<TOTAL-COSTS> 797,123
<OTHER-EXPENSES> 169,202
<LOSS-PROVISION> 1,415
<INTEREST-EXPENSE> 6,414
<INCOME-PRETAX> 23,860
<INCOME-TAX> 7,979
<INCOME-CONTINUING> 15,881
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,881
<EPS-PRIMARY> 1.34
<EPS-DILUTED> 1.32
</TABLE>
